Course Number: V001

1. SRM Sourcing Purchase Order for New Users Course Number: V001

2. Welcome!

3. Introductions

4. Course Objectives

5. Course Objectives • After successfully completing this course you will be able to: • Understand the basics of Commonwealth Purchasing • Create a Purchase Order “from scratch” and send for processing • Edit a Purchase Order and/or Delete a Purchase Order • Create a Purchase Order with reference to a Contract • Understand the requisitioning process • Source a requirement and generate a purchase order from the solicitation document • Liquidate commitments

6. Agenda • Commonwealth Procurement Basics • Creating, Editing, and Deleting Purchase Orders • Approval Agent Report • Understanding Requisitioning • The Buyer’s Worklist • Sourcing an Assigned Requirement • Generating a Purchase Order from an Awarded Bid • Liquidating Commitments

7. Commonwealth Procurement Basics

8. Commonwealth Procurement Law Act 57 of 1998 • Signed into law in May of 1998 by former Governor Tom Ridge • Act 57 contains the “Commonwealth Procurement Code”, Title 62 of the Pennsylvania Consolidated Statutes • The Procurement Handbook is a standard reference guide for the Commonwealth Procurement Code

9. Commonwealth Procurement Law Procurement Handbook • The Pennsylvania Procurement Handbook provides information on the policies, procedures, and guidelines for the procurement of materials, services, and construction under the authority of Act 57 of 1998 • The Handbook is “Online” and no longer exists in hard copy or PDF • By being maintained online, the Handbook will always be current and in “real-time”

10. Commonwealth Procurement Law Procurement Handbook (cont’d) • All Commonwealth Purchasing Professionals should be familiar with the structure and organization of the Procurement Handbook • The Handbook is divided into four Parts, with numerous Chapters under each Part • Each Chapter is specific to a particular procurement rule or procurement type • URL: www.dgs.state.pa.us/procurement

11. Disability Procurement - PIBH • Section 520 of the Commonwealth Procurement Code, 62 Pa.C.S. § 520 • DGS-PIBH Operational Agreement • DGS Requirements Contract

12. Disability Procurement - PIBH • Commonwealth Procurement Code Section 520 • Governs Commonwealth purchasing of materials manufactured and services performed by persons with disabilities • Provides the framework for the Commonwealth purchasing program to benefit persons with disabilities. • DGS designates a central nonprofit agency to facilitate program orders and to market and sell program products to Commonwealth agencies.

13. Disability Procurement - PIBH • Commonwealth Procurement Code Section 520 (cont’d) • Gives DGS the authority to establish the guidelines, policies, and procedures for doing business with the central nonprofit agency. • No competitive bidding is required • DGS establishes the fair market price (FMP) • Persons with disabilities must make an appreciable contribution • The agency for persons with disabilities must also be capable of meeting the Commonwealth agency’s specifications. • DGS, with assistance from the purchasing agency, must conduct annual compliance reviews for contracts exceeding $300,000. Deficiencies must be corrected within 45 days of notice, or there may be penalties.

14. Disability Procurement - PIBH • DGS-PIBH Operational Agreement • DGS designated PIBH as the central non-profit agency • Defines the operational procedures • Fair market price determination • Carve-out List (reference materials and services that agencies are required to offer to PIBH) • Annual Disability Procurement Council Meetings • Allows annual price adjustments • Only DGS has the authority to review certain confidential contract information

15. Disability Procurement - PIBH • DGS-PIBH Operational Agreement (cont’d) • PIBH may be used as a subcontractor to the prime contract • For performance deficiencies, purchasing agency must submit written notification to PIBH and their member agency giving them 45-days to correct deficiencies • Gives PIBH the option to file a dispute that includes a pre-protest exchange of communications between the parties • Agreement continues until one party gives the other party 60 days written notice of termination (or until termination for default)

16. Disability Procurement - PIBH • Statewide Requirements Contract • Contract covers the Commonwealth agencies’ actual purchasing requirements for materials manufactured and services performed by persons with disabilities. • Includes both materials and services • DGS must establish the FMP • No minimum order • P-card enabled • The contract terminates 60 days after one party gives the other party written notice of termination (or until termination for default)

17. Disability Procurement - PIBH • The PIBH Carve-Out List includes all materials and/or services that you must first offer to PIBH before you can purchase the materials or services from any other supplier. • If the materials or services are not listed on the PIBH Carve-Out List, then you are not required to offer the materials or services to PIBH. • You may proceed with purchasing the materials or services through other procurement methods. • If you would still prefer to order the materials or services from PIBH, even though the item is not listed on the PIBH Carve-Out List, you may request that DGS establish a fair market price.

18. Disability Procurement - PIBH • Do not order any PIBH item directly from PIBH if the PIBH item is available on another contract. You must order the PIBH item from the applicable contract. Currently, there are PIBH items on the following contracts: • PIBH Statewide Requirements Contract • Office Supplies Statewide Requirements Contract • Janitorial Supplies Statewide Requirements Contract • Carpet Installation Statewide Requirements Contract

19. Statewide Requirements Contracts • These contracts cover goods and services that are commonly used by most agencies, or are used by one or more agencies at locations throughout the Commonwealth • DGS negotiates and manages these contracts and Agencies are required to order their items or services directly from the supplier who holds the contract • Statewide contracts make ordering by the agencies practical, convenient, and at a cost-savings by purchasing at bulk rates

20. Statewide Requirements Contracts • Some examples of statewide requirements contracts are: • Medical Services • Equipment Maintenance Program • PIBH Products & Services • Correctional Industries Products • Catering Services • Office Supplies • IT Hardware • Commercial Furniture • Maintenance, Repair, Operation (MRO) * To view additional contracts, see the DGS Portal Website

21. Understanding Contracts (eMarketPlace) Open Internet Explorer. In the Address line, enter the following address: www.emarketplace.state.pa.us.

22. Understanding Contracts (eMarketPlace) The eMarketPlace website will display. To search for contracts, select the Contracts section as shown below.

23. Understanding Contracts (eMarketPlace) This will open the contracts search screen as shown below.

24. Understanding Contracts (eMarketPlace) Select the “Search by” dropdown to select how you want to search for a contract. You can search open or archived contracts, or you can search both. You can also view a list of Contracts by selecting the link at the top of the page.

25. Understanding Contracts (eMarketPlace) If you choose Description from the dropdown, another space will open for you to enter a keyword/description to search by. In the example below, were entered the word “catering” and selected the search button. This brought up all the contracts that include catering.

26. Understanding Contracts (eMarketPlace) The contract search screen shows the Contract Number, Description, Overview, Change Notice, Reason for Change, Category, Ending Date, Supplier, COSTARS, Commodity Specialist, Agency, Last Updated, Parent No., MSCC, PCard, Solicitations, Tabs, Awards, Contract No. However, to see all of this information you will need to scroll to the right. To view the Overview, you would select the piece of paper in that column, same with the change notice.

27. Understanding Contracts (eMarketPlace) Contract Overview

28. Understanding Contracts (eMarketPlace) Copy of Fully Executed Contract

29. Understanding Contracts (eMarketPlace) Contract Change Order

30. Searching for MBE/WBE on the DGS Portal Website • Open your Internet Explorer • Type in the address bar: www.dgs.state.pa.us • Select the “Procurement” link at the top of the page.

31. Searching for MBE/WBE on the DGS Portal Website • On the left side of the page, click on Bureau of Minority and Women Business Opportunities.

32. Searching for MBE/WBE on the DGS Portal Website • In the center of the page in the left column, click on “Find MBE/WBE’s”. This will take you to the database search for MBE/WBE’s.

33. Searching for MBE/WBE on the DGS Portal Website • You can find MBE/WBE’s by using the Code Look Up for the type of service/material you need, by vendor name, or by the county your looking for a vendor to exist in.

34. Dollar Thresholds • Under certain conditions, Agencies are authorized to procure materials and services outside of Statewide Requirements Contracts • When these conditions exist, the procurements may not exceed the dollar thresholds outlined in Part I, Chapter 7, of the Procurement Handbook • The next two slides briefly describe the types of procurements and thresholds

35. Dollar Thresholds (non-contract materials) • $0.00 - $5,000.00 • No bid required/No documents required – Agency • $5,000.01 - $10,000.00 (small informal bid) • Requires 3 quotes – Agency • $10,000.01 - $20,000.00 (delegated formal bid) • Delegated Competitive Sealed Bidding - Agency • $20,000.01 + (DGS delegated formal bid) • Competitive Sealed Bidding - DGS

36. Dollar Thresholds (non-contract services) • $0.00 - $5,000.00 • No bid required/No documents required – Agency • $5,000.01 - $10,000.00 (small informal bid) • Requires 3 quotes – Agency • $10,000.01 - $250,000.00 (delegated formal bid) • Delegated Competitive Sealed Bidding - Agency • $250,000.01 + (DGS delegated formal bid) • Competitive Sealed Bidding – DGS

37. IT Procurement/Waiver Review Process • Information Technology Bulletin – ITB-EPM003 • The purpose of this ITB is to provide direction to agencies for IT procurements according to specific dollar thresholds and for IT procurements for all non-standard purchases. • This ITB applies to all agencies, boards, commissions and councils under the governor’s jurisdiction. Agencies not under the governor’s jurisdiction are encouraged to follow this policy to ensure they develop and implement applications that facilitate enterprise-wide interoperability.

38. IT Procurement/Waiver Review Process (cont) • This ITB established an enterprise-wide policy for IT procurement reviews for purchases in excess of $100,000 and is issued in accordance with Executive Order 2004-8 “Enterprise Information Technology Governance Board”, issued on May 9, 2007. • Executive Order 2004-8 broadens the role of the Office of Administration/Office for Information Technology (OA/OIT) by requiring agencies to receive approval from the OA/OIT prior to the issuance of IT procurement documents and/or requests. Review of standard and non-standard purchases is based on type/dollar thresholds as defined in the following examples.

39. IT Procurement/Waiver Review Process (cont) • The agency Chief Information Officer (CIO)/IT Manager is to email the documentation specified in ITB-EPM003 to the agency’s OA/OIT CoP Planner at least twenty (20) working days prior to issuance to a supplier(s).

40. IT Procurement/Waiver Review Process (cont) • Communication Process • Once the Agency (Chief Information Officer) CIO/IT Manager has submitted complete documentation to the CoP Planner, the request is submitted to the Deputy Chief Information Officer (DCIO) and if necessary, the Technical Architecture Review (TAR) board. The agency CIO/IT Manager will be notified if clarification or additional information is needed. In some instances, the agency will meet with the TAR board for discussion/clarification. Once all questions are answered and issues resolved, the CoP Planner will notify the agency CIO/IT Manager, CoP Agency Services Coordinator, DCIO, Comptroller, and the DGS BOP that the request has been approved (with or without comments/conditions) or denied.

41. IT Procurement/Waiver Review Process (cont) • Exemption from This Policy: • In the event an agency chooses to seek an exemption for reasons such as the need to comply with requirements for a federally mandated system, the waiver portion of the IT Procurement/Waiver Review Form is to be completed and submitted to the agency CoP Planner. See ITB-EMP003 IT Procurement Review Process documentation at the OA/OIT website for further information.http://www.portal.state.pa.us/portal/server.pt?open=512&objID=416&PageID=210791&mode=2

42. Purchase Orders

43. Purchase Order Overview Contracts vs. Purchase Orders • Contracts do not encumber or “commit” funds • Encumbrances are important in determining the total amount of funds available in a fiscal year • Purchase Orders commit funds and can be valid for up to 5 years • A commitment encumbrance is created when a PO is fully approved and provides funding for that specific item or service

44. Purchase Order Overview Contracts vs. Purchase Orders (cont’d) • The purpose and main benefit of encumbrance accounting is avoiding budget overspending • Encumbrances can also be used to predict cash outflow and as a general planning tool • The formula used to determine the amount of funds which are available is: Funds Available = Budget – Actuals - Encumbrances

45. Purchase Order Overview Contracts vs. Purchase Orders (cont’d) • When the procurement begins with a requisition, upon approval, funds are placed aside in the form of an obligation encumbrance(Pre-Commitment) • After the requisition’s associated purchase order is approved, the obligation encumbrance becomes a commitment encumbrance • Upon payment to the vendor, the commitment encumbrance is reversed and the funds appear under the Actual funds balance rather than an Encumbrance balance

46. Purchase Order Overview So… …when should you use a contract? …when should you use a multi-year PO?

47. Purchase Order Overview

48. Purchase Order Overview • Stand alone Purchase Orders (i.e., from “scratch”) can be created, based on a supplier’s quote or no bid award, when a requirement has not been submitted • Stand alone Purchase Order’s should be created when procuring items or services designated as “exempt” in the Field Procurement Handbook (Chapter 1, Paragraph C, #5) • Examples: works of art, historic objects, published books, maps, periodicals, technical pamphlets, video and audio reproduction, etc. • There is no “copy” or template function for Purchase Orders in SRM

49. Purchase Order Overview • In many cases, the use of Document Builder is not necessary when creating Purchase Orders • For POs under $10,000, the following standard language is included: “In performing the services or furnishing the material covered by this Purchase Order, the supplier agrees to comply with the Standard Terms and Conditions for Purchase Orders Not Exceeding $10,000, Form STD 280, located on the DGS website….” • For POs referencing an existing contract, the following standard language is included: “This Purchase Order is issued pursuant to the referenced Contract and constitutes the Suppliers authority to deliver the item(s) referenced at the prices stated……in accordance with the Contract terms and conditions”

50. Purchase Order Overview • For POs referencing a Solicitation, etc., the following standard language is included: “This Purchase Order is comprised of…the above-referenced Solicitation, the Suppliers Bid or Proposal, and any documents attached to this Purchase Order or incorporated by reference” • Additional instructions to the supplier may be added in the PO Header Text, Item Text, and in any additional document attachments