Annual Business Meeting May 30, 2013

1. Annual Business MeetingMay 30, 2013 Purchasing Department

2. Topics • New Procurement Code • Sole Source • Small Purchases • Ethics • P-Card • Warehouse Schedule

3. Sole Source Procurement

4. The Procurement Code Specifies Circumstances that Justify a Sole Source Section 63G-6a-802 (3) states: Circumstances under which there is only one source for a procurement item may include: where the most important consideration in obtaining a procurement item is the compatibility of equipment, technology, software, accessories, replacement parts, or service; (b) where a procurement item is needed for trial use or testing; (c) where transitional costs are unreasonable or cost prohibitive; or (d) procurement of public utility services.

5. What Does the Procurement Code Say About Public Posting Requirements for Sole Sources? Section 63G-6a-406 of the Procurement Code was revised and now requires a minimum public posting period of seven (7) consecutive days before approving a Sole Source procurement with a total cost over $50,000.

6. What Does the Procurement Code Say About Public Posting Requirements for Sole Sources? NOTE: A Purchasing Buyer has the ability to require the seven (7) consecutive day public posting period for a Sole Source procurement under $50,000 – if the validity of the Sole Source is questionable.

7. What is the Purchasing Department’s Process for Reviewing, Posting, and Approving Sole Sources? When a Sole Source form is received, the Purchasing Buyer: Reviews the justification provided and determines whether it meets the Sole Source criteria outlined in the State of Utah Procurement Code; (2) Conducts additional research to validate the explanation and justification provided; (3) Prepares the Notice of Proposed Sole Source Procurement document for posting in BidSync and monitors the Sole Source for challenges or requests for additional information during the 7 consecutive day public posting requirement (if applicable).

8. What is the Purchasing Department’s Process for Reviewing, Posting, and Approving Sole Sources? (4) If the Sole Source total dollar amount is under $50,000, the justification is valid, and all required back up documents have been received, the Purchasing Director may approve the Sole Source request; or if the Sole Source total dollar amount exceeds $50,000, has been posted for 7 consecutive days without challenge (or any challenge that was received was successfully resolved), and all required back up documents have been received, the Purchasing Buyer will recommend approval and submit to the Purchasing Director for final approval.

9. Small Purchases63G-6a-408

10. Small Purchases63G-6a-408 (1) As used in section: (a) "Annual Cumulative Threshold" means the maximum total annual amount, established by the applicable rulemaking authority under Subsection (2)(a)(i), that a procurement unit may expend to obtain procurement items from the same source under this section. (b) "Individual Procurement Threshold" means the maximum amount, established by the applicable rulemaking authority under Subsection (2)(a)(ii), for which a procurement unit may purchase a procurement item under this section. (c) "Single procurement aggregate threshold" means the maximum total amount, established by the applicable rulemaking authority under Subsection (2)(a)(iii), that a procurement unit may expend to obtain multiple procurement items from one source at one time under this section.

11. Small Purchases63G-6a-408 (2) The applicable rulemaking authority may make rules governing small purchases, including: (a) establishing expenditure thresholds, including: (i) an annual cumulative threshold; (ii) an individual procurement threshold; and (iii) a single procurement aggregate threshold; (b) establishing procurement requirements relating to the thresholds described in Subsection (2)(a); and (c) the use of electronic, telephone, or written quotes.

12. JSD District Policy Small Purchases: Procurement Item Thresholds $1,000 = Individual Procurement Threshold63G-6a-408 $2,000 = Single Procurement Aggregate Threshold 63G-6a-408 $50,000 = Annual Cumulative Threshold63G-6a-408

13. Small Purchases63G-6a-408 $1,000 = Individual Procurement Item Threshold Any Procurement Item Costing Less Than $1,000 Examples: One artificial plant costing $999 One package of printer ink cartridges costing $70 One ream of special bond paper costing $30 One laptop computer costing $875

14. Small Purchases63G-6a-408 $2,000 = Single Individual Procurement Item Aggregate Threshold Any Combination of Individual Procurement Items Costing Less Than $1,000 Purchased From One Source at One Time Up To $2,000. Examples: Two artificial plants each costing $999, totaling $1,998 Twenty packages of printer ink cartridges costing $70, totaling $1,400 Fifty reams of special bond paper costing $30, totaling $1,500 Two laptop computers each costing $875, totaling $1,750

15. Small Purchases63G-6a-408 $50,000 = Annual Cumulative Individual Procurement Item Threshold Total Individual Procurement Items Costing Less Than $1,000 Purchased From One Source During A Fiscal Year Not To Exceed $50,000. Examples: Artificial plants each costing $999, totaling $59,940 = Contract Packages of printer ink cartridges costing $70, totaling $70,000 = Contract Special bond paper each costing $30, totaling $60,000 = Contract Laptop computers each costing $875, totaling $87,500 = Contract

16. Small PurchasesObtaining Quotes Under $2,000 – Obtain at least one (1) verbal or written quote. Any single item over $1,000 – Obtain at least three (3) quotes. $2,000 to $9,999 – Obtain three (3) verbal or written quotes using the JSD quote form. Must include company name, contact name, date of quote, product name/model number, and price. $10,000 to $49,999 – Coordinate with the purchasing buyer assigned to the appropriate commodity and obtain three (3) written quotes on vendor letterhead or quote form. $50,000 and above – Requisition to be submitted in Skyward and the appropriate purchasing buyer will solicit competitive bid or RFP on behalf of the requesting school/department.

17. Small PurchasesShipping/Freight Charges Shipping or freight costs should always be included in all quote requests. If you know there are no shipping charges, indicate “Free shipping” in the last line of the requisition. When requesting quotes for shipping/freight, ask for FOB Destination Freight Prepaid and Add. If the company cannot provide an exact freight quote, ask for an estimated freight quote. Include the estimated shipping as a line item on the Skyward requisition. Requisitions that do not include a line for shipping/freight charges will be sent back to the originator.

18. Procurement Ethics

19. S.B. 190Utah Procurement Code • Effective May 1, 2013 • Gratuities—Kickbacks– Unlawful use of position or influence.~ UCA 63G-6a-2304.5 • Artificially dividing a purchase. ~UCA 63G-6a-2305 and 2306

20. S.B. 190 Utah Procurement Code Gratuities—Kickbacks ~UCA 63G-6a-2304.5 (3) & (4) • Offering a gratuity or kickback—unlawful for an interested person to give, offer, or promise to give a gratuity or kickback to a procurement participant or contract administrator or known family member of participant or administrator • Accepting or asking for gratuity or kickback—unlawful for a procurement participant or contract administrator to ask for or receive a gratuity or kickback from an interested person for the benefit of the participant or administrator or for another person

21. S.B. 190 Utah Procurement Code • Definitions • “Contract administrator” means a person who administers a current contract, on behalf of a public entity, including: • making payments relating to the contract; • ensuring compliance with the contract; • auditing a contractor in relation to the contract; • or enforcing the contract.

22. S.B. 190 Utah Procurement Code • “Family member” means a parent, stepparent, spouse, sibling, stepsibling, child, stepchild, grandparent, great-grandparent, grandchild, or great-grandchild. • “Gratuity” means anything of value including money, a loan with an interest rate lower than terms usually offered on the market, an award, employment, admission to an event, a meal, lodging, travel, or entertainment for which a charge is normally made.

23. S.B. 190 Utah Procurement Code • “Interested person” means a person who is interested in any way in the sale of a procurement item or insurance to a public entity. • “Kickback” means a gratuity given in exchange for favorable treatment in a pending procurement or the administration of a contract.

24. S.B. 190 Utah Procurement Code • “Procurement participant” means a person involved in: • administering, conducting, or making decisions regarding a procurement process • making a recommendation regarding award of a contract or regarding a decision to obtain a procurement item for a particular person; • evaluating a quote, a bid, or a response; or • awarding a contract or otherwise making a decision to obtain a procurement item for a particular person.

25. S.B. 190 Utah Procurement Code • Exceptions ~UCA 63G-6a-2304.5 (6) & (7) • Not guilty if item is classified as hospitality gift • Contributions to the entity with no intent for reciprocation for the contribution

26. S.B. 190 Utah Procurement Code • Definition • “Hospitality gift” means a promotional or hospitality item, including, a pen, pencil, stationery, toy, pin, trinket, snack, nonalcoholic beverage, or appetizer • Hospitality gift” does not include money, a meal, a ticket, admittance to an event, entertainment for which a charge is normally made, travel, or lodging.

27. S.B. 190 Utah Procurement Code • Gratuity or Kickback Penalties ~UCA 63G-6a-2304.5 (6) & 2306 (1) • Employees who intentionally violate shall be dismissed from employment and face penalty.

28. S.B. 190 Utah Procurement Code • Penalties for artificially dividing a purchase ~UCA 63G-6a-2305 & 2306 (1) • Employees who intentionally violate shall be dismissed from employment and face penalty.