Procurement

1. Procurement September 2008 Office of Fiscal Services Bureau of County Finance & Technical Assistance

2. Procurement • Applicable Regulations • Methods of Procurement • After Procurement Office of Fiscal Services Bureau of County Finance & Technical Assistance

3. Major Changes • Small purchase procurement now comprised of two types: • Standard: Price is overriding factor • Non-standard: Qualitative factors must be evaluated • Small purchase procurement threshold $100,000 • State competitive bidding requirements not applicable except for IV-D contracts Office of Fiscal Services Bureau of County Finance & Technical Assistance

4. Who is Affected? • County Department of Job and Family Services (CDJFS) • Public Children Services Agency (PSCA) • Workforce Development Agency • Agencies’ Subrecipients (For example, Family and Children First Councils) • Non-Profit Agencies (Under contract) Office of Fiscal Services Bureau of County Finance & Technical Assistance

5. Written Code of Conduct • Maintain Written Code of Standards of Conduct • Ethical Procurement Practices • Conflict of Interest (real, potential, or apparent) • Maintaining Fairness in the Process • Gratuities or Kickbacks • 45 CFR 92.36 (b)(3) (HHS) • 29 CFR 97.36 (b)(3) (DOL) • 7 CFR 3016.36 (b)(3) (FNS) • OAC 5101:9-4-04 Office of Fiscal Services Bureau of County Finance & Technical Assistance

6. Open and Free Competition 45 CFR 92.36 (c) (HHS) 7 CFR 3016.36 (c) (FNS) 29 CFR 97.36 (c) (DOL) OAC 5101:9-4-07 (K) (5) Office of Fiscal Services Bureau of County Finance & Technical Assistance

7. Cost/Price Analysis • Grantees must perform a cost or price analysis in connection with every procurement action, including contract modifications. • At a minimum, must make independent estimate BEFORE receiving bids or proposals. Office of Fiscal Services Bureau of County Finance & Technical Assistance

8. Cost Analysis • A cost analysis must be performed when the offeror is required to submit the elements of their estimated cost. • Vendor’s profit must be negotiated as a separate element of price for each contract in which there is no price competition and in all cases where cost analysis is performed. Office of Fiscal Services Bureau of County Finance & Technical Assistance

9. Cost Analysis (cont’d) • Required when adequate price competition is lacking, and for sole source procurements unless price reasonableness otherwise established through marketplace or price set by law or regulation. • Price analysis required in all other instances. • 45 CFR 92.36 (f) • 29 CFR 97.36 (f) • 7 CFR 3016.36 (f) • OAC 5101:9-4-07 (f) Office of Fiscal Services Bureau of County Finance & Technical Assistance

10. Methods of Procurement • Small Purchases • Sealed Bid • Competitive Proposals • Non-Competitive Proposals • Additional Source • State Cooperative Purchasing (ORC 125.04) • 7 CFR 3016.36 (d) • 45 CFR 92.36 (d), (b)(5) • 29 CFR 97.36 (d) • OAC 5101:9-4-07 (F) (4) Office of Fiscal Services Bureau of County Finance & Technical Assistance

11. Small Purchases ($100,000 or Less)Standardized • For purchases where price is the overriding factor and which involve standardized products or services (e.g., office equipment and supplies), agencies may use relatively simple and informal procurement methods by obtaining price or rate quotations from an adequate number of qualified sources (not less than 3). • OAC 5101:9-4-07 (B) Office of Fiscal Services Bureau of County Finance & Technical Assistance

12. Small Purchases ($100,000 or Less)Non-Standardized • For purchases where price is not the overriding factor and where relative quality and performance must be evaluated (e.g., consultant services), agencies shall seek proposals from an adequate number of qualified sources (not less than 3) and shall identify the evaluation factors and their relative importance. • OAC 5101:9-4-07 (B) Office of Fiscal Services Bureau of County Finance & Technical Assistance

13. Competitive Sealed Bidding (Formal Advertising) • For purchases of $100,000 or more, county family service or workforce development agencies shall use competitive sealed bidding (formal advertising) under the following conditions: • A complete, adequate, and realisticspecification or purchase descriptionis available • OAC 5101: 9-4-07 (C) (1) (a) Office of Fiscal Services Bureau of County Finance & Technical Assistance

14. Two or more responsible bidders are willing and able to compete effectively for the business OAC 5101: 9-4-07 (C) (1) (b) Competitive Sealed Bidding Office of Fiscal Services Bureau of County Finance & Technical Assistance

15. Competitive Sealed Bidding • The invitation for bids will be publicly advertised, and • Bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids • OAC 5101: 9-4-07 (C) (2) (a) Office of Fiscal Services Bureau of County Finance & Technical Assistance

16. Competitive Sealed Bidding • The procurement lends itself to a firm fixed price contract, and • The selection of the successful bidder can be made principally on the basis of price • OAC 5101: 9-4-07 (C) (1) (c) Office of Fiscal Services Bureau of County Finance & Technical Assistance

17. Competitive Sealed Bidding • All bids will be publicly opened at the time and place prescribed in the invitation for bids • OAC 5101: 9-4-07 (C) (2) (c) Office of Fiscal Services Bureau of County Finance & Technical Assistance

18. Competitive Sealed Bidding • A firm fixed-price contract award will be made in writing to the lowest responsive and responsible bidder • OAC 5101: 9-4-07(C) (2) (d) Office of Fiscal Services Bureau of County Finance & Technical Assistance

19. Competitive Sealed Bidding • Any or all bids may be rejected if there is a sound documented reason. • Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs shall be considered in determining which bid is lowest. • OAC 5101: 9-4-07 (C) (2) (d) Office of Fiscal Services Bureau of County Finance & Technical Assistance

20. RFPs: Things to Consider • Put as much thought into writing your RFP as you will with the actual contract! • You are bound by the language in the RFP. • Don’t ask for what you don’t need! • For contracted services, consider placing a renewal option at the agreement of both parties. If it’s not in there, you can’t do it! Office of Fiscal Services Bureau of County Finance & Technical Assistance

21. Bad Procurement Language • Two (2) 2005 Yugos, black, 300 horsepower, 150-inch wheelbase, leather interior • Ten Compaq desktop “Presario” computers, black cases, Pentium 4 processors Office of Fiscal Services Bureau of County Finance & Technical Assistance

22. Better Procurement Language • Two (2) 2005, 4-door, 5-passenger vehicles • Ten (10) desktop personal computers, minimum processor speed 3GHz, 512 MB RAM Office of Fiscal Services Bureau of County Finance & Technical Assistance

23. Competitive Proposals • County family service or workforce development agencies shall use competitive proposals when the conditions are not appropriate for the use of competitive sealed bidding, small purchases, or non-competitive proposals. Generally, competitive proposals are used when it is not feasible to use competitive sealed bidding. • OAC 5101: 9-4-07 (D) (1) Office of Fiscal Services Bureau of County Finance & Technical Assistance

24. Competitive Proposals • Use of competitive proposals is appropriate when there may be a variety of methods to achieve the results contained in the RFP. • Evaluation factors will focus on approach, program design, innovation and experience. • Contracts are either fixed-price or cost-reimbursement. • OAC 5101: 9-4-07 (D) (1) Office of Fiscal Services Bureau of County Finance & Technical Assistance

25. Competitive Proposals • County family service or workforce development agencies may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. • OAC 5101: 9-4-07 (D) (2) (c) (d) Office of Fiscal Services Bureau of County Finance & Technical Assistance

26. Competitive Proposals • County family service or workforce development agencies will have a method for conducting technical evaluations of the proposals received and for selecting awardees. • Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered. • OAC 5101: 9-4-07 (D) (2) (c) (d) Office of Fiscal Services Bureau of County Finance & Technical Assistance

27. Competitive Proposals • Requests for proposals will be publicized and • identify all evaluation factors and their relative importance. • Any response to publicized requests for proposals shall be honored to the maximum extent practical. • Proposals will be solicited from an adequate number of qualified sources. • OAC 5101: 9-4-07 (D) (2) (a) (b) Office of Fiscal Services Bureau of County Finance & Technical Assistance

28. Noncompetitive Proposals • Used only when the award of a contract is infeasible under small purchase, competitive sealed bidding or competitive proposals and one of the following applies: • Sole source • Emergency • The federal agency making the award authorizes noncompetitive proposals • After solicitation of a number of sources, competition is determined inadequate • Equipment or services for technical equipment where prices established by law and interchangeability with existing equipment is required Office of Fiscal Services Bureau of County Finance & Technical Assistance

29. Noncompetitive Proposals • Foster care and child welfare purchased services made under ORC 5153 are generally considered noncompetitive proposals, subject to certain limitations specified in the OAC. Office of Fiscal Services Bureau of County Finance & Technical Assistance

30. Procurement Review System • Debarment and Suspension • Contract only with responsible providers • Debarment List • http://www.epls.gov/ • Database of Unresolved Findings • www.auditor.state.oh.us/WhatsNew/FFR/ • 45 CFR 92.35 Office of Fiscal Services Bureau of County Finance & Technical Assistance

31. 45 CFR 92.36 (b)(2) (HHS) 7 CFR 3016.36 (f) (FNS) 29 CFR 92.36 (b)(2) (DOL) OAC 5101:9-4-07 (J)(8) Contract Monitoring Office of Fiscal Services Bureau of County Finance & Technical Assistance

32. Records Retention • Retention of Records • 3 years • County Records Commission approval • OAC 5101:9-4-07 (K)(13) Office of Fiscal Services Bureau of County Finance & Technical Assistance

33. Protest Procedures • A settlement process to address protests, disputes, and claims should be defined in the agreement. (There is limited federal involvement.) Office of Fiscal Services Bureau of County Finance & Technical Assistance

34. Termination Clause • Contracts must contain certain provisions, e.g., termination for cause and for convenience for contracts in excess of $10,000, compliance with various federal laws, etc. • 45 CFR 92.36 (i)(2) • 29 CFR 97.36 (i)(2) • 7 CFR 3016.36 (i)(2) • OAC 5101:9-4-07 (K)(2) Office of Fiscal Services Bureau of County Finance & Technical Assistance

35. Awarding the Contract • Contracts should be awarded only to responsible vendors or grantees • http://www.epls.gov/ (Debarment List) • Document past problems to avoid potential lawsuits Office of Fiscal Services Bureau of County Finance & Technical Assistance

36. After Procurement:Charging Costs • Equipment may be charged directly to a program, to a major program area cost pool, or to the shared cost pool • Administrative contracts may be charged to a major program area cost pool or to the shared cost pool • Contracts for services that directly benefit a program must be charged to that program • OMB Circular A-87 Attachment B (15)(b) • APL 281 Office of Fiscal Services Bureau of County Finance & Technical Assistance

37. After Procurement:Depreciation Threshold • Threshold for capitalization is the lesser of $5,000 or the amount used by the local government for financial reporting • “State of Ohio Asset Management Policies and Procedures” for useful life tables: www.gsd.das.state.oh.us/fams/ug/userguide.htm • 45 CFR 95.705 Office of Fiscal Services Bureau of County Finance & Technical Assistance

38. Do Your Homework! • Laws and regulations: most restrictive apply • Federal • 7 CFR 3016.36 (FNS) • 45 CFR 92 (HHS) • 45 CFR 74 (HHS Non Profits) • 29 CFR 97 (DOL) • 29 CFR 95 (DOL Non Profits) • Local • Resolutions/Policy of Local Government • County Procurement Plan • Note: State competitive bidding requirements (ORC 307.86) not applicable except for IV-D contracts. Office of Fiscal Services Bureau of County Finance & Technical Assistance

39. Also Consider… • Is the proposed purchase an allowable cost? • Federal award • OMB A-87 • OMB A-122 (Not For Profits) • Does it make sense to make this purchase? • Is it reasonable? Office of Fiscal Services Bureau of County Finance & Technical Assistance

40. Thank You Office of Fiscal Services Bureau of County Finance & Technical Assistance