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Procurement Training Los Angeles Community Colleges

Procurement Training Los Angeles Community Colleges. Presented by: Business Services Division Office of General Counsel College Procurement Specialists June/July 2008. Welcome / Introductions. Presenters: Anne Diga, Associate Counsel Jim Watson, Contracts & Purchasing Manager

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Procurement Training Los Angeles Community Colleges

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  1. Procurement TrainingLos Angeles Community Colleges Presented by: Business Services Division Office of General Counsel College Procurement Specialists June/July 2008

  2. Welcome / Introductions • Presenters: • Anne Diga, Associate Counsel • Jim Watson, Contracts & Purchasing Manager • Fabbee Bunag, Contracts Analyst • College Procurement Specialists • Michele Burrus • Ramona Divinagracia • Kim Hoffmann • Audience self-introductions • Housekeeping items

  3. Agenda • Background and purpose • Structure of new policies and procedures • Statutes and other authorities

  4. Agenda (Cont’d) Presentation of New Procedures • 04-00 Procurement Overview and Policy • 04-01 Procurement Responsibilities and Organization • 04-02 Methods and Types of Procurement Transactions • 04-03 Micro-Purchases • 04-04 Small Purchases • 04-05 Medium Purchases • 04-06 Large Purchases

  5. 04-07 Short Term Agreements/Contracts for Services04-08 Procurement of Special and Professional Services • 04-09 Bid Protests and Appeals • 04-10 Cooperative Purchases • 04-11 Lease of Equipment • 04-12 License of Software and other Intellectual Property • 04-13 Non-Competitive Procurement • 04-14 Acceptance of Loaned and Donated Personal Property

  6. Agenda (Cont’d) • 04-15 Authorization to Pay • 04-16 Purchasing Card • 04-17 Receiving and Acceptance of Procured Items • 04-18 Invoicing and Payment • 04-19 Suppliers/Vendors • 04-20 Procurement Considerations for Specially Funded Programs

  7. Agenda (Cont’d) Miscellaneous Procurement Topics • Template agreements • Key contractual terms • Property Agreements for Use of Facilities • Civic Center Permits/Permits for Use

  8. Background and Purpose • Procurement: “The act of obtaining, attainment, acquisition….” • Contract: “An agreement between 2 or more persons which creates an obligation to do or not do a particular thing.” • Procurement contract:“A government contract with a…supplier of goods under the terms of which a sale is made to the government.”

  9. Background and Purpose (Cont’d.) History of Decentralization • 2000: Board delegates contracting authority (Board Rule 7100 et seq) • 2000: Chancellor delegates authority to College Presidents (Board Rule Admin Reg B-19) • 2000: Training by BSD, OGC • 2001: Purchasing regions created; CPSs hired • 2001-02: Presidents delegate to VPs of Administrative Services • 2001: Launch of purchasing card • 2002: Implementation of SAP Financial and Purchasing System • 2005: Launch of Business Policies and Procedures Project • 2008: Adoption of New Procurement Policies and Procedures • http://www.laccd.edu/

  10. Background and Purpose (Cont’d.) Purpose of Training: • Unveil new district-wide written procurement policy and procedures • In-service new administrators and staff • Refresher to continuing administrators and staff • Not for bond and construction related purchases • Not focused on SAP training

  11. 21 New Procurement Policies and Procedures • Organized to Follow the Procurement Lifecycle of a Purchase with additional procurement related issues Purchase- Receiving- Payment

  12. Procurement Procedures Development Team • Fabbee Bunag, DO Contracts Analyst • Michele Burrus, College Procurement Specialist • Anne Diga, Associate General Counsel • Ramona Divinagracia, College Procurement Specialist • Jeanette Gordon, Chief Financial Officer • Allan Hansen, Director of College Facilities – West Los Angeles • Mark Henderson, Manager of Information Systems – Pierce College • Kim Hoffmann, College Procurement Specialist • Bruce Hurt, Receiving Supervisor - Valley • Kelly Ryan, Accounting Assistant – City College • Kenneth Takeda, Vice President of Administrative Services - Pierce • Ann Tomlinson, Vice President of Administrative Services – Harbor College • Jim Watson, DO Contracts Manager • Tania Yanes, Facilities Administrative Assistant – Trade Tech College • Mayra Zelaya, Purchasing Supervisor, City College

  13. Policy Objectives • 04-00 Procurement Overview and Policy • Comply with laws, board rules and regulations governing procurement for LACCD • Encourage competition in order to obtain best pricing and terms, superior products and customer services • Provide all suppliers equal opportunity to participate – No favoritism, fraud, abuse, corruption • Efficiency of resources • Timely delivery of products and services

  14. Common Definitions (04-00) • Bid • Bid Threshold • Board approval/ratification • Invitation for Bids (IFB) (RFB) • Proposal • Request for Proposal (RFP) • Request for Qualifications • Solicitation of Quotes • And others…..

  15. Types of Procurement - “Solicitation of Quotes” (Campus or CPS) • Not formal bidding, best business practice • Obtained prior to purchase • Informal pricing quotes not required but best business practice for purchases less than 2500; 2500 or greater a minimum of three quotes required; 5,000 up to bid threshold a minimum of 3 written quotes - “Request for Qualifications“ (RFQ) (District) • Not formal bidding, best business practice • Respondents ranked by qualifications • Price is negotiated with highest ranked respondent • - “Request for Proposals” (RFP) (District) • Not formal bidding, best business practice • Respondents submit qualifications, technical proposal and price • Award based on most advantageous offer, all factors considered, not price alone • - “Invitation for Bids” (IFB) or “Request for Bids” (RFB) (District) • Formal advertisement in newspaper of general circulation for specified period of time • Bids submitted sealed • Public bid opening • Award to lowest responsible and responsive bidder

  16. Statutes and Other Authorities State (29 California Codes) • Public Contract Code, Education Code, Government Code, others • Welcome to California –www.ca.gov • LACCD • Board Rules, Administrative Regulations • http://www.laccd.edu/about%5Fus/ • Miscellaneous external: • Grant application and guidelines • Case law

  17. Statutes and Other Authorities (Cont’d)

  18. Statutes and Authorities (Cont’d) • Public Contract Code Sections • 100, 101, 102 - Objectives, efficiency, encourage competition • 3400 – Specific brand or trade name “equal or better” • 20651-20662 Community Colleges • 20651 – Formal bid threshold • 20654 – Emergency defined • 20657 – No Bid Splitting • 22000 et seq, (CUPCAA) • Education Code Sections • 81644 – Duration of Contracts • 81655 – Delegation of Authority to Contract, Personal Liability for malfeasance • 81656 – Delegation of Authority to Purchase, Personal Liability for malfeasance • 88003.1 – Personal Services Contracts – No contracting out of classified work with exceptions • Government Code Sections • 53060 – Professional/Specialized Services

  19. Statutes and Other Authorities(Cont’d) • Board Rules - Chapter VII, Article I – Contracting • Board Rules 7100 – 7101.15 • 7100 – Board Responsibility for Contracts • 7100.10 Delegation of Authority • 7100.11 Emergency Contracts • 7100.15 Ratification of Transactions • 7100.16 Rejection of Bids • 7100.17 Advertisement of bids • 7101 – 7101.15 Administration of Contracts • 7102 – 7102.14 Rules for Purchasing • 7103 – 7103.17 Facilities Related Contracts for Public Projects • http://www.laccd.edu/board_rules/documents/Chapter%20VII/Ch.%20VII%20-%20Article%20I.doc

  20. Statutes and Other Authorities (Cont’d.) Administrative Regulations • B-19 – Delegation of Authority to College Presidents • College Presidents, Deputy Chancellor, Executive Director of Facilities Planning and Development, Director of Business Services • College Presidents can delegate to VP’s of Administrative Services • LACCD - About Us - Administrative Regulations

  21. Exercise #1 Delegation of Authority A) Dee, Director of College Facilities, at Sunrise Community College would like to repair the baler/trash compactor on campus. She receives a quote in the amount of $7,000 from Bob’s Baler Repair. She asks Fran Facilities Aide to enter and print a Facilities Order in SAP. Dee signs the FOF and sends it off to Bob. Is Dee in compliance with B-19? Are there other issues of concern?

  22. Exercise #2 Delegation of Authority • Sally SFP Director at West Pierce Community College would like to host the end of the year program banquet at a nearby hotel next to the college. She contacts the Airport Hilton to determine whether a banquet room is available for the event. The Hilton event planner confirms that the event date is available. Sally is sent a reservation confirmation agreement which she signs and returns to the Hilton.

  23. 04-01 Procurement Responsibilities and Organization • A. College Purchasing Office • Handles purchases up to <$5,000 at a centralized location • Southwest and Harbor fully decentralized • Trade Tech partially decentralized • College Plant Facilities Office handle facilities related procurement up to <$125,000

  24. 04-01 Procurement Responsibilities and Organization (Cont’d) • Region-based College Procurement Specialists • City*, Southwest, Harbor—Michele Burrus • East*, West, Trade Tech —Kim Hoffmann • Valley*, Mission, Pierce—Ramona Divinagracia *College where CPS has office

  25. 04-01 Procurement Responsibilities and Organization (Cont’d) • District Office – Contracts and Purchasing Section • Jim Watson, Contracts and Purchasing Manager • Non-construction related property leases • Personal and Professional Services • District and non-district property • Fabbee Bunag, Contracts Analyst • Leases of equipment • Software licenses • Personal and Professional Services • Curtis Paltza, Contracts Analyst • Personal and Professional Services • Non-construction related property leases • Vending machines, pay phones • Marilyn Huff, Purchasing Agent • Handles all Formal Bids for purchases and purchases at the District Office • Updates SAP Vendor list

  26. Current Structure/Policies (cont.) • Purchasing Responsibility by Threshold: • College: Micro and Small purchases ($0-4,999) • Region: Medium purchases ($5,000-statutory threshold--$72,400) • District Office: Large Purchases + not specifically delegated

  27. 04-02 Methods and Types of Procurement Transactions • A. Methods – Competitive vs. Non-competitive, miscellaneous • B. Types of Transactions • Micro purchases $< or = $2,500 • Small purchases $2,501 up to $4,999 • Medium purchases $5,000 up to formal bid threshold (currently, $72,400) • Large purchases $72,400 and greater • Special/Professional Services • Rentals, Leases and Licenses of Equipment/Software

  28. 04-03 Micro Purchases • Entered by college in SAP database • <$2,500 purchases of supplies, equipment and services • SFP purchases may have lower $ threshold required by the grant • Recommended best business practice to obtain competitive pricing, but not required to solicit quotes. • Approval required by Vice President Administrative Services in SAP • Purchase Order (PO) signed by College President or Vice President of Administrative Services

  29. 04-04 Small Purchases • Entered by college in SAP database • $2501 up to $5,000 purchases of supplies, equipment and services • Approval of Vice President of Administrative Services; PO signed by College President or Vice President of Administrative Services • Must solicit at least a minimum of three (3) quotes *Record of solicitation kept in original transaction file • Internet research • Catalog • Vendor contact • E-mail, telephone, fax

  30. 04-05 Medium Purchases • $5,000 up to bid threshold ($72,400) • For all procurements at or over $25,000 the EPLS needs to be searched with a screen print saved with the original documents whether SFP or general funds. • A minimum of (3) three written quotes required and must be submitted with PR/RFC • Entered by college and processed by College Procurement Specialist (CPS) as Purchase Requisition (PR) (goods) or Request For Contract (RFC) (services) • PR requires conversion by college into PO • RFC requires conversion by CPS into Contract Order (CO) • Approved by Vice President and CPS • Decentralized colleges may include approval by Department Head, Dean, Director or other VP’s

  31. Exercise #3 Types of Purchases • South Bay Community College would like to purchase athletic football equipment in the amount of $50,000. Abby Athletic Director supplied a purchase request with one quote from Acme Sporting Goods. Patty Purchasing Aide should do the following: • A) Process request • B) Contact Athletic Director for a minimum of two additional quotes • C) Check Acme Sporting Goods catalog to verify price quote submitted by Abby.

  32. 04-06 Large Purchases • $72,400 or greater • Purchase contract cannot exceed 3 years • Handled solely by the District Contracts and Purchasing Section • PO or Contract approved and signed by DO Purchasing Agent or Contracts Manager • Public Contract section 20651 requires formal sealed bids using process identified in Education Code section 81641 • Formal bid process

  33. 04-06 Large Purchases (Cont’d) • Formal Bid Process (IFB) • Advertisement for two weeks • Bid Package • Pre-bid conference (optional/mandatory) • Sealed bid submission • Bid Opening • Bid Evaluation • Award to responsive/responsible lowest bidder • Agenda item for Award of Procurement

  34. 10 Minute Break

  35. 04-07 Short Term Agreements and Contracts for Services • Services defined • Provision of labor as distinguished from goods. • Personal Services – Routine labor for which NO special training, education, certification or license is required. • Professional/Specialized Services - • Government Code section 53060 • Legal, Administrative, Auditing, Payroll Processing, Design and Engineering, Medical and other specialized services requiring high level of independent judgment, expertise and discretion. • Cannot contract out classified work – Education Code Section 88003.1

  36. Personal Services – Contracting Out of Classified Work • Education Code Section 88003.1 • General prohibition to contract out classified work, except when: • Clear demonstration of cost savings • Code provides specific formula in making cost savings analysis • Services not otherwise available • Highly specialized and cannot be performed by college or district employees • Services pursuant to a contract or lease for purchase of real property • Emergency

  37. 04-07 Short Term Agreements and Contracts for Services (Cont’d) • Short Term Agreements (STA) • Requires three written quotes • Services one year or less • STA can only be amended through RFC and handled by CPS • STA cannot be amended for term beyond a year or amount to exceed $5,000. • Valued at $5,000 or less including tax and delivery charges • STA must be Board ratified within (60) calendar days of entering into the transaction. Send copy of STA to CPS for submission to Board for ratification. • Agreements must be approved and signed by College President or Vice President of Administrative Services

  38. 04-07 Short Term Agreements and Contracts for Services (Cont’d) • Contracts for Services • Personal Services for multiple years up to $72,400. • Requires three written quotes • Contract initiated by RFC and entered into SAP by the College • If renewal or amendment, require reference to existing contract number. • Contracts below $72,400 are ratified by Board. $72,400 or greater require prior authorization. • Contract cannot exceed 5 years • Limit Order Agreements

  39. 04-08 Procurement of Specialized or Professional Services • Government Code section 53060 defines special and professional services • Examples of special services include financial, auditing, legal, architectural/engineering, insurance brokerage, payroll issuance and preparation, and other administrative matters where service provider must be specially trained. • Special services/professional services are exempt from formal bidding • Recommended best business practice is to solicit Request for Proposals (RFP) or Request for Qualifications (RFQ) Requires Professional Services Agreement to be signed by both service provider and District/College. Signature obtained from service provider first.

  40. Exercise #4 – Contracting Out for Services • West Valley Community College is planning graduation ceremonies. The College customarily provides sign language interpreters for large public events and ceremonies such as this one. Victoria Vice President issues a short term agreement to Selective Sign Works for three interpreters to provide services throughout the graduation at a total cost of $2,000. Is this appropriate?

  41. Exercise #4 – Short Term Agreements and Contracts for Services • South Harbor CCD has just implemented a new payroll processing system. Unfortunately, the pay stubs generated from the system reverse print the payroll information on the stub making the information unrecognizable to employees. South Harbor would like to hire a system software programmer who is able to troubleshoot the problem and fix the misprinted pay stubs. What solicitation process does South Harbor need to undertake in order to contract for these services?

  42. O4-09 Bid Protests and Appeals • Affords bidders/proposers the ability to be heard if they believe fair treatment in the procurement process has not been provided to them. • Purchases below statutory threshold: • Written protest filed with Vice President of Administrative Services within 2 business days of award notification • Purchases at or above statutory threshold: • Written protest filed with Director of Business Services within 5 business days of award notification

  43. 04-10 Cooperative Purchases • Public Contract Code section 20652 – piggyback of personal property (not services) • Board must make finding of best interest to piggyback if purchase is over statutory threshold • County of Los Angeles – copiers, janitorial supplies • Public Contract Code sections 20653 and 10290 provides the ability to piggyback personal property and services under contracts specifically awarded by the Department of General Services • Western States Contracting Alliance – HP, Dell, Apple and Gateway computers; Grainger for maintenance supplies and equipment • California Multiple Award Schedule – Tractors, forklifts, service vehicles -Hard copy of valid contract must be provided by initiators

  44. 04-11 Lease of Equipment • Handled by the DO Contracts and Purchasing Section ONLY • Requestor must provide original lease documents provided by finance company and equipment proposal from supplier • Lease must be made in accordance with Education Code section 81550 • Fixed lease term greater than one (1) year up to ten (10) years • One (1) year or less requires a rental agreement which is handled by the College

  45. 04-12 License of Software and other Intellectual Property • A license provides a non-exclusive right to use an asset. • A license of software is an agreement. • Beware of on-line downloadable software • Terms and Conditions of on-line software agreement should be reviewed and approved by the Vice President of Administrative Services prior to installation. • Requires evaluation and screening by local Information Technology department prior to download and acceptance of use.

  46. 04-13 Non-Competitive Procurement • A. Educational Materials – Education Code section 81651 • B. Food/Cafeteria Supplies – Public Contract Code section 20660 • C. Emergency Contract – Public Contract Code section 20654 • D. Cooperative Purchases – Public Contract Code section 20652 • E. Single Source – No statutory authority for sole source. Refers to a market condition in which only one supplier or service provider exists. Therefore, a competitive process is impossible or impracticable. Refer to sole source evaluation procedure. • Specification of brand name/trade name “equal or better” - Public Contract Code section 3400

  47. 04-14 Acceptance of Loaned or Donated Personal Property • Education Code sections 71046 and 72205 • Donor responsible for specifying value for their tax purposes • Donations must be evaluated prior to acceptance or delivery to campus • College Information Technology department should screen IT related equipment • College Facilities Department should screen all equipment requiring electrical or utilities connection • Donations cannot be for illegal purposes

  48. 04-14 Acceptance of Loaned or Donated Personal Property (Cont’d) • Donation Form or Donation Agreement must be approved by the College President and Vice President of Administrative Services prior to receipt of property. • Equipment donations must be sent to Receiving Department for appropriate asset tagging. • Board must ratify within 60 days of acceptance of donation items. • Donations of cash or cash equivalents are handled by the Chief Financial Officer.

  49. Exercise # 5 - Donations • Peter Painting Supervisor at Valley Tech College accepts a donation of 100 gallons of super gloss paint from LOL Paint Company. Upon delivery of the paint cans to the College, Peter inspects the label on the paint cans and determines that the paint is lead-based. How should Peter have handled this donation?

  50. One hour - Lunch Break

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