CERTIFIED PROCUREMENT PROFESSIONAL (CPP)

1. CERTIFIED PROCUREMENT PROFESSIONAL (CPP) Big Sky Public Procurement Association Contract Management Certification Program

2. Guardians of the Public Trust “Money is of no value; it cannot spend itself. All depends on the skill of the spender.” – Ralph Waldo Emerson 1803-1882

3. THE CONSTITUTION OF THE STATE OF MONTANA • Section 8. Right of participation. The public has the right to expect governmental agencies to afford such reasonable opportunity for citizen participation in the operation of the agencies prior to the final decision as may be provided by law. • Section 9. Right to know. No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure.

4. Objectives • Understand the function of procurement • Learn where to find resources to help us • Practice with some basic tools • Know where to go for further information

5. Procurement is: • The acquisition of supplies or services • Includes contracts with or without cost; buying; renting; leasing; or other acquisition method. • It includes all functions that pertain to the obtaining of any supply or service • Description of requirements; selection and solicitation of sources; preparation and award of contract; and all phases of contract administration. • It does not include the acquiring of supplies or services by gift.

6. Effective Public Procurement • Reduces costs and directly improves the quality and timeliness of services rendered by public entities.

7. Effective Public Procurement • For public entities, procurement is a service function, supporting programs by the acquisition of supplies and services.

8. Effective Public Procurement • For potential contractors, it is an opportunity to provide supplies and services to public entities.

9. Procurement Resources • Montana Law/Administrative Rules • Dept of Administration General Services Division Website: http://gsd.mt.gov/ • Montana Operations Manual (MOM) • BSPPA Website: bsppa.net • Policies and Procedures of Contracting Organization • NIGP website: www.nigp.com (many of the resources require membership to access.)

10. Procurement Ethics As employees involved in the expenditure of public funds, we are called upon to avoid even the appearance of impropriety and to conduct our business in a manner above reproach in every respect.

11. Ethical Do’s and Don’ts • Do be familiar with MCA and your organization’s code of ethics • Don’t accept gifts and gratuities from suppliers - including lunches, clothing, etc. • Do avoid the appearance of impropriety – make sure you are contacting more than one firm for drafting specifications; be impartial • Do be open about information gathering, solicitation processes, etc.

12. Ethics Resources Montana Code Annotated Title 2, Chapter 2 – Standards of Conduct Your organization’s published code of ethics (if you don’t have one perhaps you should…)

13. Reminder… “When it comes to public trust, perception is reality. It is not enough that we do no wrong, we must also try to assure that others believe we have done no wrong.” 1998 Michael Josephson "Ethics is knowing the difference between what you have a right to do and what is the right thing to do.“ Justice Potter Stewart

14. Procurement Tools City/County Governments 7-5-2301. Competitive, advertised bidding required for certain large purchases or construction contracts. • Except as provided in 7-5-2304 and Title 18, chapter 2, part 5, a contract for the purchase of any vehicle, road machinery or other machinery, apparatus, appliances, equipment, or materials or supplies or for construction, repair, or maintenance in excess of $50,000 may not be entered into by a county governing body without first publishing a notice calling for bids.

15. Procurement Tools • City/County Governments (cont.) • The notice must be published as provided in 7-1-2121. • Subject to 7-5-2309 and except as provided in Title 18, chapter 2, part 5, every contract subject to bidding must be let to the lowest responsible bidder. • 18-4-124 allows political subdivisions to adopt any or all parts of the MT Procurement Act and the accompanying rules.

16. Procurement Tools State Government • Total Contract Value: • The initial contract period and any options to renew. • Small Purchases: Purchases under $5,000. • Limited Solicitations: • Purchases with a "Total Contract Value" between $5,001 and $25,000.

17. Procurement Tools • Formal Bids/Proposals: Purchases over $25,000 • Competitive Sealed Bids (Invitation for Bid) • Competitive Sealed Proposals (Request for Proposal)

18. Procurement Tools Cooperative Purchasing • Cost savings for local governments and school districts through volume purchasing. • May use State term contracts, vehicle requisition time schedule, Central Stores program, and certain commodities needed by MDT. • Must sign a Cooperative Purchasing Agreement prior to utilizing state contracts.

19. Procurement Tools MOM 1-0714.00, page 45 • Prequalification of Vendors: allowed by ARM 2.5.507 • Request for Information: Used to gain preliminary information about market, availability and/or specifications for a particular service or item. • Cannot be used as a selection method. • Can be informal or formal.

20. Procurement Tools Direct Negotiation • The formal solicitation process did not provide a responsible or responsive bidder/offeror. Requires SPB approval.

21. Procurement Tools Public Auctions • 7-5-2303 MCA in lieu of bids city and county governments may purchase vehicles, road machinery or other machinery, apparatus, appliances, equipment, or materials or supplies up to $60,000 at public auctions.

22. Sole Source Procurement • Sole source procedures do not apply to purchases under $5,000 • Item or service is available from only one known capable vendor.

23. Sole Source Procurement (cont.) • Circumstances might include: • Compatibility of current services or equipment, accessories, or replacement parts; • No existing equivalent product; or • Only one source is acceptable or suitable. • Justification required

24. Sole Source Procurement (cont.) • Organization must maintain records for all sole source purchases. • Does not apply to: • Professional licenses; • Dues to associations; • Renewal of software license agreements; or • Purchase or renewal of maintenance agreements for software or hardware.

25. Sole Brand Procurement • Sole brand distinguishes itself from “sole source” in that while there may be only one acceptable manufacturer, several distributors are available, therefore competition is required. • Sole brand justification must be provided in writing and stated in the solicitation document.

26. Exigency Procurement7-5-2304 and 18-4-133 MCA • An exigency procurement must be limited to those supplies and services necessary to meet the exigency. • The determination as to whether a procurement is an exigency must be made by the procuring organization. The determination must be in writing and must state the basis for an exigency procurement and for the selection of the particular vendor.

27. Exigency Procurement (cont.) • The purchase procedure used shall be selected to assure that the required supplies or services are procured in time to meet the exigency. However, such competition as is practicable shall be obtained. • Record of each exigency procurement must contain: • The vendor’s name; • Amount and type of contract; • List of supplies and services purchased under the contract; and • Written documentation justifying the exigency procurement and the basis for the selection of a particular vendor.

28. Limited Solicitations • Purchases with a "Total Contract Value" between $5,001 and $25,000 (State) • Can be used for both supplies and services. • Does not apply to “controlled items”. • Requires three written or oral quotations. • Online auctions can be used • except for new or used vehicles.

29. Limited Solicitations (cont.) • Must be documented using the “Limited Solicitation” form (State agencies). • Must be awarded to lowest acceptable quote if cost is the only consideration. • If other criteria will be considered in award decision, the vendors must be provided with all criteria and their relative importance. (This method must be done in writing.)

30. Building IFB’s and RFP’sMOM 1-0719.00, page 56 • Invitation for Bid (IFB) • Defined specifications • Award made to lowest responsive and responsible bidder • Request for Proposal (RFP) • Problem/solution specifications • Evaluated on stated criteria (cost being only one) • Proposal responses may be modified

31. Invitation for Bid (IFB) • Section 1: General Requirements • Provides a brief overview of the project • Contact for all communications • Bidders are responsible for reviewing the document • Pre-Bid Conference (optional) • When/where are bids due

32. Invitation for Bid (cont.) • Section 2: Delivery Requirements • Requested or required delivery date • Shipping information • Delivery locations

33. Invitation for Bid (cont.) • Section 3: Special Terms and Conditions • Contract requirements • Special conditions • Acceptance testing/criteria • Mandatory requirements (i.e. proof of licenses, previous related experience, etc.)

34. Invitation for Bid (cont.) • Section 4: Specifications and Pricing Schedule • Fixed pricing or adjustable? • Award basis • Detailed specifications

35. Invitation for Bid (cont.) • Sent to adequate number of viable bidders • Public Notice • Counties must publish a newspaper notice per 7-1-2121, MCA

36. Opening & Awarding an IFBMOM 1-0722.00, page 68 • Must be received at the location listed by the date/time specified • Publicly opened • Prepare a bid tabulation sheet

37. Opening & Awarding an IFB (cont.) • Determine if low bidder is “responsive” & “responsible” • Apply Preferences • Blind Vendor Preference, 18-5-502, MCA • Reciprocal Preference, 18-1-102, MCA • County Resident, 7-5-2309, MCA • Send a Request for Documents Notice (if necessary) • Issue a Purchase Order (or contract)

38. Request for Proposal (RFP) • Cover Page • Template Instructions • Table of Contents • Instructions to Offerors • Schedule of Events

39. Request for Proposal (cont.) • Section 1: Project Overview and Instructions • Provides a brief overview of project, expected contract term, and who the contact person is. • Tells the potential offerors when and where to send questions, and attend pre-proposal conference. • Instructions on date, time & location for submitting a response and the number of copies required.

40. Request for Proposal (cont.) • Section 2: RFP Standard Information • Notifies the potential offerors of the organization’s rules regarding confidential materials. • Describes the evaluation process.

41. Request for Proposal (cont.) • Section 3: Scope of Project • Core of the RFP. This detailed overview of the purpose of the project should include the description of the contractor’s duties and responsibilities. • Section 4: Offeror Qualifications • Sets out what qualifications the offeror must possess to fulfill the needs of the project.

42. Request for Proposal (cont.) • Section 5: Cost Proposal • Includes information on how the costs are to be presented for this proposal. • Section 6: Evaluation Criteria • Includes those factors which will be used to appraise and measure an offeror’s response to the RFP.

43. Request for Proposal (cont.) • Appendix A: Standard Terms & Conditions • Appendix B: Standard Contract • Appendix C: RFP Response Form (optional)

44. Opening & Awarding RFP’sMOM 1-0723.00, page 74 • RFP’s are not publicly opened • Procurement Officer must first review them for confidential information • Verify Trade Secret Affidavit is included • Verify that all information claimed as confidential is valid as such by Montana law. • Copies are given to evaluation committee

45. Opening & Awarding RFP’s (cont.) • Evaluation • Usually done by committee, but can be an individual • Conflict of Interest • Meetings are public • Post the Meeting – 72 hours • ADA accessible location • All members of the public are welcome • Must allow for public comment for any matter not on the agenda that is within the jurisdiction of the agency/organization. • Quorum of committee members required • Keep Minutes of the Meeting

46. Opening & Awarding RFP’s (cont.) • What if the committee has questions? • Send out written clarification questions • Conduct oral interviews and/or demonstrations • Site visits • Seek best and final offers

47. Opening & Awarding RFP’s (cont.) • Finalize the Evaluation • Submit to procurement officer: • Completed scoring matrix with scoring justifications • Committee meeting minutes • Committee recommendation

48. Opening & Awarding RFP’s (cont.) • Send Notices • Request for Documents • Selection Notice • Post to Website • Contract Negotiation / Execution

49. Elements of a Contract • Offer and Acceptance • Consideration • Mutuality of Obligation • Legality of Purpose • Competency of Parties

50. Types of Contracts • Purchase Orders • Dually Signed Contracts (White paper) • Information Technology • Term Contracts • Construction • Memorandum of Agreement