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Invitation for Bid (IFB) Road Map

Invitation for Bid (IFB) Road Map. INVITATION FOR BID (IFB). BUREAU OF CONTRACTS WORKLOAD STATISTICS. 2008 – 2009 State Fiscal Year 34,886 - total number of transactions processed $33.4 billion – value of transactions processed IFB Team processes: 30% of all transactions

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Invitation for Bid (IFB) Road Map

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  1. Invitation for Bid (IFB) Road Map

  2. INVITATION FOR BID(IFB) Office of Operations 2009 Fall Conference

  3. BUREAU OF CONTRACTS WORKLOAD STATISTICS 2008 – 2009 State Fiscal Year • 34,886 - total number of transactions processed • $33.4 billion – value of transactions processed • IFB Team processes: • 30% of all transactions • 19% of new approved contracts • $4.1 billion – value of new contracts approved Average processing time – less than 11 days Office of Operations 2009 Fall Conference 3

  4. PRIOR APPROVAL THRESHOLDS • Pursuant to §112 of the State Finance Law, any contract for the purchase of goods and services exceeding $50,000 and revenue contracts exceeding $10,000 require the approval of OSC. • Procurements are subject to a formal competitive process when the value of the transaction exceeds $50,000 unless it is made in another manner consistent with the procurement methods described in §163 of the State Finance Law. Office of Operations 2009 Fall Conference 4

  5. STATE FINANCE LAW §163PURCHASE of COMMODITIES and SERVICES Statutory preference is accorded in the following order: 1st Preferred Sources 2nd OGS Contracts 3rd Agency or Multi-Agency established Contracts 4th Procurement methods prescribed by State Finance Law (SFL) Office of Operations 2009 Fall Conference 5

  6. PREFERRED SOURCES Commodities 1st Corcraft 2nd Industries for the Blind 3rd Industries for the Disabled (NYSID), buy “OMH” and Qualified Veterans’ Workshops are all accorded equal priority Services Industries for the Blind NYSID Buy “OMH” Qualified Veterans’ Workshops www.ogs.state.ny.us/procurecounc/pdfdoc/guidelines.pdf Office of Operations 2009 Fall Conference 6

  7. METHODS of PROCUREMENT PURSUANT to SFL §163 • Competitive Bids • Invitation for Bid (IFB) • Request for Proposal (RFP) • Sole/Single Source • Piggybacking • Emergency Purchases • Printing Contracts • Discretionary Purchases Office of Operations 2009 Fall Conference 7

  8. INVITATION FOR BIDS (IFB) • Typically used when requirements can be translated into exact specifications • Award will be made based on price alone • Must be used for commodity purchases • May be used for the purchase of services and technologies Office of Operations 2009 Fall Conference 8

  9. REQUEST FOR PROPOSAL (RFP) • Used for procurements where factors in addition to cost are considered and weighted when awarding the contract • The method of award is “best value” • Used for services and technology and complex procurements Office of Operations 2009 Fall Conference 9

  10. STEP #1 – FORMULATE the IFB Step #1a – Describe the commodity/service required Step #1b – Describe the bidder qualifications/requirements Step #1c – General Requirements Office of Operations 2009 Fall Conference 10

  11. STEP #1a – Describe the Commodity/Service • Clearly describe the commodity/service needed • Should meet program needs • Be clear, unambiguous and all inclusive • Specify if the commodity must meet certain standards Office of Operations 2009 Fall Conference 11

  12. STEP #1a – Describe the Commodity/Service • If referencing a brand name, include an “or equal” specification – for commodities only • Make sure the pricing page includes a place for an alternate make, model # and request the bidder to list any deviations from the referenced item (see step #6c) • Specify how the vendor is to bid • Use industry standards, where applicable • Hourly rate, square foot, specified size, etc. • Confirm the specifications with the end user Office of Operations 2009 Fall Conference 12

  13. STEP #1b – Describe the Bidder Qualifications/Requirements • Specify criteria to provide reasonable assurance the vendor will be able to provide the commodity or service required • Do not use criteria you cannot verify, measure, explain or do not need • Specify if the service requires licensing or certification • Be prepared to justify criteria selected Office of Operations 2009 Fall Conference 13

  14. STEP #1c – General Requirements • List specific delivery requirements – should be FOB Destination • Make sure delivery requirements reflect actual need • Review records of previous contracts, if possible, to review historical usage (estimates), contract deliverables and problems encountered • Mandatory requirements should be pass/fail • Ensure requirements are not so restrictive that only one vendor meets the criteria Office of Operations 2009 Fall Conference 14

  15. STEP #1c – General Requirements • Be careful when using words such as “must, shall, may not, minimum, maximum,” etc. to describe requirements • Do not invite vendors to include prices for additional services or to expand upon the requirements without figuring these additions into the method of award and evaluation • Items cannot be awarded if they are not evaluated Office of Operations 2009 Fall Conference 15

  16. STEP #2 – METHOD of AWARD Determine your Method of Award Assigning Weights Additions during the Contract Period Office of Operations 2009 Fall Conference 16

  17. STEP #2 – Determine your Method of Award • Should be clearly stated • Examples of appropriate Methods of Award are: • Award by item • Award by lot • Award by grand total • Indicate the potential for multiple awards • Indicate how tie bids will be decided Office of Operations 2009 Fall Conference 17

  18. EXAMPLE • “Agency reserves the right to award the bid based on any of the following criteria, whichever is in the best interest of the State: • Total of item A • Total of item B • Total of item A plus item B” • Key points to consider: • What item(s) is needed by the agency? • What drives the decision on how to award the contract? • Would all vendors be able to determine how the contract will be awarded? Office of Operations 2009 Fall Conference 18

  19. SOLUTION “Award will be made by item to the lowest responsive and responsible vendor or vendors. Agency reserves the right to make no award on any individual item.” OR “Award will be made by grand total to the lowest responsive and responsible bidder.” Office of Operations 2009 Fall Conference 19

  20. STEP #2 – Determine your Method of Award • When determining the Method of Award, assign a weight to the cost based on estimated usage • If certain services or commodities will be used more frequently, the associated costs must be weighted accordingly in the evaluation • Should be a reasonable estimate – based on historical usage when possible • Reasonable estimates may be percentages or actual units • Use total cost as the determining factor, not unit prices Office of Operations 2009 Fall Conference

  21. EXAMPLE • The method of award states: • “Award will be made based on the lowest average of the four classes shown below: • Service Technician $_____________ • Foreperson $_____________ • Journey Level Person $_____________ • Apprentice $_____________ • Average $_____________ • Key points to consider: • Does this create an even playing field? • How could this be altered to better reflect the agency’s need? Office of Operations 2009 Fall Conference 21

  22. SOLUTION Suppose two vendors bid the following: • Vendor A is the low vendor according to the method of award; however, they only send service technicians when work is required. Is this fair? • Suggestions to improve: • Indicate expected usage by category • Indicate the agency will choose which skill level is required for each job • Require the per hour amounts must be equal to or greater than prevailing wages Office of Operations 2009 Fall Conference 22

  23. STEP #2 – Determine your Method of Award If you anticipate additions during the contract term or if you are requesting pricing on options, these must be evaluated in the method of award, or you cannot make an award for the additions Office of Operations 2009 Fall Conference 23

  24. EXAMPLE An IFB was conducted for lab testing services where vendors were asked to submit a per test price. In addition, the agency requested the vendors provide hourly rates for data review and expert testimony. These additional services are rarely used and no estimated number of hours was provided in the bid document. The method of award states: “Award will be made to the bidder meeting all of the Mandatory bid requirements and submitting the lowest per sample price.” • Key points to consider: • Do the vendors have enough information to submit reasonable prices for the additional services? • Does the method of award clearly reflect the agency’s need? Office of Operations 2009 Fall Conference 24

  25. SOLUTION The following represents two bids received: Bidder A Bidder B 100 samples $98 = $9,800 $100 = $10,000 10 hours review $100 = $1,000 $50 = $500 10 hours testimony $200 = $2,000 $100 = $1,000 Totals $12,800 $11,500 Using the method of award stated, Bidder A would have been awarded the contract; however, Bidder B’s total contract value was lower. Optional/additional items should be incorporated into the method of award to ensure the State is obtaining the best price. Office of Operations 2009 Fall Conference 25

  26. STEP #3 – Develop your IFB Step #3a – Administrative Process Step #3b – Contract Terms and Conditions including, but not limited to: price adjustment clauses, renewals, termination, site visits, appendices Office of Operations 2009 Fall Conference 26

  27. STEP #3a – Administrative Process • Date, time and place of bid opening • Requirements for submitting faxed or sealed bids • Timeline for process • Name, phone, fax and e-mail address of the contact person for questions and for Lobby Law • Timeframe for submitting and responding to written questions relating to the IFB • Description of how bidders will be informed of potential addendums to the IFB Office of Operations 2009 Fall Conference 27

  28. STEP #3b – Contract Terms and ConditionsPrice Adjustment Clauses • Used to reimburse contractors for increased costs but also allows for the State to realize savings if costs decrease • Price adjustments will affect bids, therefore must be noted in the solicitation document in order to be included in the contract Office of Operations 2009 Fall Conference 28

  29. STEP #3b – Contract Terms and ConditionsPrice Adjustment Clauses • Must be clearly defined • Consumer Price Index (CPI) must include the index, region, base period and item • Producer Price Index (PPI) must include the proper series ID • CPI/PPI indices must be relevant to the item/service being procured • May use other items such as prevailing wages, fuel indices, etc. • Contracts utilizing de-escalation/escalation for both services and materials should include a proportional breakdown of the cost in the bid document Office of Operations 2009 Fall Conference 29

  30. EXAMPLE Vendor, or the state, may request a price increase or decrease based on changes in the CPI. CPI to be used is CPI - All Urban Consumers – Northeast All Items for the 12 months ended 90 days prior to the anniversary date of the contract. Requests for changes must be initiated 60 days prior to the anniversary date of the contract. Only one price adjustment per year will be granted on the anniversary date of the contract. Office of Operations 2009 Fall Conference 30

  31. STEP #3b – Contract Terms and ConditionsRenewals and Termination Provisions • Contract term and subsequent renewals • Cannot exceed five years total • Termination Provisions • Should not allow vendor’s unilateral right to terminate (Bulletin G-214) • Consequences of Default (i.e., liquidated damages) • Lobby Law violations • Agency’s convenience • Cause Office of Operations 2009 Fall Conference 31

  32. STEP #3b – Contract Terms and ConditionsSite Visits • If the site visit is mandatory, it cannot be waived for any vendor • Provide OSC with a sign-in sheet for verification • Bids received from vendors who did not attend the mandatory site visit must be rejected • Site visits should be conducted on one day at one time so all vendors have the same information Office of Operations 2009 Fall Conference 32

  33. STEP #3b – Contract Terms and Conditions • Prevailing wage schedules, if applicable • Mandatory requirements • Order of Precedence clause • Vendor Responsibility Documentation • Tax Department Certification • Procurement Lobbying Documentation • Appendix A Office of Operations 2009 Fall Conference 33

  34. STEP #4 – ADVERTISING Contract Reporter Advertisement Discretionary Advertising Exemptions Single/Sole Source Office of Operations 2009 Fall Conference 34

  35. STEP #4 – Contract Reporter Advertisement Bulletin G-107B • Must appear in the Contract Reporter at least 15 business days prior to the proposal due date • NYS Agencies are required to publish: • Bid solicitations over $15,000 • Printing contracts over $5,000 • Annual anticipated procurements up to $50,000 based on date of first purchase [SFL 163 (6)(b)] • Contract Reporter exemptions must be approved by OSC prior to publishing the exemption • Make sure to include an “or equal” in your advertisement to avoid restricting competition • Agencies must use due diligence to identify potential bidders Bid Opportunity Office of Operations 2009 Fall Conference 35

  36. STEP #4 – Contract Reporter Advertisement • Discretionary Purchasing Threshold – new subdivision 6(b) was added to Section 163: • Obligates state agencies to aggregate expected purchases for the same commodities or services within twelve months from the date of purchase to determine whether the procurement falls within the discretionary threshold • Expressly prohibits split ordering • A change to or a renewal of a discretionary purchase shall not be permitted if the change or renewal would bring the aggregate amount of all purchases of the same commodities or services from the same provider within the twelve month period over the discretionary threshold and should have been reasonably expected prior to the date of the first purchase Office of Operations 2009 Fall Conference 36

  37. EXAMPLE The Contract Reporter advertisement and the bid specifications state the winning vendor must be located within 15 miles of the agency’s location. The agency received three bids: Vendor Distance Price Xavier, Inc. 44 miles $14 Yellow and Co. 16.2 miles $12 Zed Unlimited 13 miles $28 • Key points to consider: • Who does the agency have to award to? • What could’ve been done to avoid this situation? • What other issues/problems do you see? Office of Operations 2009 Fall Conference 37

  38. SOLUTION • Problems: • The requirement to be located within 15 miles was mandatory • Agency may have restricted competition • Unless the IFB allowed for making no award, the Agency has to award vendor Z. • Ways to avoid this problem: • Conduct a web search prior to soliciting bid • Conduct a request for information Office of Operations 2009 Fall Conference 38

  39. STEP #4 – Contract Reporter AdvertisementDiscretionary Purchases Between $50,000 and $100,000 • Best Practices Language #1 • [Agency X] intends to purchase [1,000 widgets] pursuant to its discretionary authority under State Finance Law Section 163(6). Interested parties should contact [agency contact person] to discuss this opportunity. • Best Practices Language #2 • [Agency X] intends to purchase [1,000 widgets] pursuant to its discretionary authority under State Finance Law Section 163(6), which authorizes purchases without a formal competitive process in certain circumstances, including purchases from New York State small businesses, from businesses certified pursuant to Article 15-A of the New York State Executive Law and, if applicable, from businesses selling commodities or technology that are recycled or remanufactured. Interested parties should contact [agency contact person] to discuss this opportunity. Office of Operations 2009 Fall Conference 39

  40. STEP #4 – Contract Reporter AdvertisementDiscretionary Purchases Between $50,000 and $100,000 Best Practices Language #3 • [Agency X] intends to purchase [1,000 widgets] pursuant to its discretionary purchasing authority under State Finance Law Section 163. This procurement opportunity is limited to NYS Small Businesses, businesses certified pursuant to Article 15-A of the NYS Executive Law and, if applicable, businesses selling commodities or technology that are recycled or remanufactured. This language can only be used when no formal solicitation has been made using an IFB or RFP. Office of Operations 2009 Fall Conference 40

  41. STEP #4 – Contract Reporter AdvertisementExemptions • Exemption requests must be submitted to and approved by OSC prior to entering into a contract • Request must include: • Justification of need • Justification for the selection of the vendor • Justification of reasonableness of price • Exemptions for single source contracts will be scrutinized more closely based on recent changes to SFL 163 (10)(b) Office of Operations 2009 Fall Conference 41

  42. STEP #4 – Contract Reporter AdvertisementExemptions – Single/Sole Source A new subparagraph ii was added to Section 163 (10)(b) to limit the use of single source procurements to circumstances where a formal competitive process is not feasible and provide that the term of the single source contract shall be only for a period of time until such circumstances are ameliorated. Furthermore, state agencies must document in the Procurement Record why competition is not feasible and publish these reasons on its website within 30 days of awarding a single source contract. This is in addition to the requirement that single source contracts be let only in unusual circumstances where material and substantial reasons exist. Office of Operations 2009 Fall Conference 42

  43. STEP #4 – Contract Reporter AdvertisementExemptions • State agencies shall conduct formal competitive procurements to the maximum extent practicable • Shall be used only when a formal competitive process is not feasible • Shall minimize the use of single source procurements • Shall only be made under unusual circumstances • Shall include a determination that the specifications have been designed in a fair and equitable manner Office of Operations 2009 Fall Conference 43

  44. STEP #5 – BID TABULATIONS Bid Opening Submission to OSC Office of Operations 2009 Fall Conference 44

  45. STEP #5 - Bid Tabulations At the time of the bid opening: • Reflect all bids received based on the method of award • Signed and certified by the agency on the day of the bid opening Before sending in to OSC: • Indicate any rejections • Indicate the low bidder Office of Operations 2009 Fall Conference 45

  46. STEP #6 – Agency Responsibility Step #6a – Awarding the Contract Step #6b – Vendor Responsibility Step #6c – Exceptions/Deviations Step #6d – Bid Protests and Debriefings Step #6e – Rejected Bids Step #6f - General Office of Operations 2009 Fall Conference 46

  47. STEP #6a – Awarding the Contract • Award to the lowest responsive and responsible bidder • Award in accordance with the method of award • Ensure the product/service being offered meets the minimum specifications of the bid • Compare the minimum specifications of the product offered with those of the brand name referenced, if applicable • Verify vendor’s calculations Office of Operations 2009 Fall Conference 47

  48. STEP #6b – Vendor Responsibility • Verify the vendors meet the minimum requirements stated in the IFB • Investigate large variations in bid prices to ensure the low bidder understands the scope of work • Verify the vendor is not present on the Workers’ Compensation or Labor Law debarred lists www.labor.state.ny.us/workerprotection/publicwork/PWContents.shtm • Verify the vendors meet the minimum requirements stated in the IFB • Investigate large variations in bid prices to ensure the low bidder understands the scope of work • Verify the vendor is not present on the Worker Compensation or Labor Law debarred lists www.labor.state.ny.us/workerprotection/publicwork/PWContents.shtm Office of Operations 2009 Fall Conference 48

  49. STEP #6c – Exceptions/Deviations • Exceptions/deviations to the bid specifications should be acknowledged and included in the procurement record • Include a memo for OSC/the Procurement Record, detailing how the agency determined the exceptions/deviations are immaterial • If an exception/deviation is deemed immaterial, explain how other bidders and potential bidders were not harmed by accepting the exception/deviation Office of Operations 2009 Fall Conference

  50. EXAMPLE Regarding the qualifications of the vendor, the agency indicates the following: “Vendor must have a minimum of 5 years experience.” “Vendor will provide evidence of licensing.” “Vendor shall possess the necessary equipment to perform the required service.” The agency received three bids – two with less than 5 years experience and one with 6 years experience. The vendor with the most experience was the highest bidder. • Key points to consider: • Are the qualifications mandatory? • Can the agency deem the lack of experience a minor deviation? • What problems might this present? Office of Operations 2009 Fall Conference 50

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