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PURCHASING TRAINING SPRING 2011

PURCHASING TRAINING SPRING 2011. Presented by Shawna Lanphear, Purchasing Director. PURCHASING DEPARTMENT. Shawna Lanphear Director slanphear@montana.edu x 5016 Lawrence Martin Purchasing Manager lawrence.martin@montana.edu x 3212 Cathy McDunn Purchasing Agent

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PURCHASING TRAINING SPRING 2011

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  1. PURCHASING TRAINING SPRING 2011 Presented by Shawna Lanphear, Purchasing Director Purchasing & Contracting

  2. PURCHASING DEPARTMENT Shawna Lanphear Director slanphear@montana.edu x 5016 Lawrence Martin Purchasing Manager lawrence.martin@montana.edu x 3212 Cathy McDunn Purchasing Agent kathleen.mcdunn@montana.edu x3211 Purchasing & Contracting

  3. HOW TO FIND US Location: Montana Hall, Room 104 Phone: 994-3211 Fax: 994-3000 Business Hours Monday – Friday 8:00 – 12:00p.m. and 1:00 – 5:00p.m Purchasing & Contracting

  4. RESOURCES • Purchasing Website http://www2.montana.edu/policy/purchasing • Forms http://www2.montana.edu/policy/purchasing/purch1800.html#1800 • Purchasing Manual , Delegation Agreement Summary, FAQ’s, Training (General and Department), Quick Reference Guide • General Services Division – State Procurement Bureau Website http://www.gsd.mt.gov • Purchasing ListServ • Purchasing Staff Purchasing & Contracting

  5. TRAINING OVERVIEW • Scoping the Purchase and Writing Specifications • Limited Solicitation Step-by-Step Process • FAQ’s, Examples & Participant Questions • State Term Contracts; University Term Contracts and approved Cooperatives Purchasing & Contracting

  6. SCOPING THE PURCHASE • What is the subject of the purchase? • Who are the vendors? • What is the Total Contract Value? • Is there a current contract available to use so bidding isn’t necessary? Purchasing & Contracting

  7. SCOPING THE PURCHASE(con’t) • What do we NEED? • an objective to be filled • not a WANT • Translate the NEED into a Specification/Requirement • list them by category • objective and measurable • Scope of Work for Services • no brand or vendor specific • No pre-shopping Purchasing & Contracting

  8. WRITING SPECIFICATIONS • Description of supply or service being sought. • Purpose is not solely to obtain the least expensive items, but the desired quality at the most competitive price. • Should do four things: • Identify Minimum Requirements • Allow for Competitive Bids • List Evaluation Criteria and Test Methods • Provide for a Fair Award at Lowest Possible Cost Purchasing & Contracting

  9. HOW TO WRITE SPECIFICATIONS (Con’t) • Name of Supply or Service • Purpose/Use for Supply or Service • Description of Supply or Service / Desired Outcome • List Special Requirements • Unusual Conditions • Delivery Date • Delivery Location • Point ofContact • For answering questions • Receiving Procedures Purchasing & Contracting

  10. LIMITED SOLICITATION STEP-BY-STEP 9/23/10 Purchasing & Contracting

  11. LIMITED SOLICITATION – PROCESS FLOW-THROUGH Sole Source Justification Quote Brand (PD-14) Bid (PD-20)or PD-46) with PD-14 Buy from lowest bid Requirements 3 Vendors 3 Products (PD-20 or PD-46) Buy from lowest bid BPA • ProCard TermContract Buy from vendor from Term contract Greater than $5000 ask for exceptions by Emailing Shawna with PD-20 or PD-46 and PD-14 9/23/10 Purchasing & Contracting

  12. LIMITED SOLICITATION PROCEDURESTCV $5,000.01 - $25,000.00 • Competitive Procedures are MANDATORY • Obtain 3 quotes from vendors (PD-20 or PD-46) or • Identify a sole source (PD-14) or • Use a Term Contract; University Contract or Cooperative • Procurement Cards cannot be use for purchases over $5,000 without prior authorization • Must follow Competitive Procedures • See next slide for instructions to ask for an exception 9/23/10 Purchasing & Contracting

  13. APPROVAL OF PRO CARD PURCHASES >$5,000 • For purchase of products/supplies only • (no services unless approved by purchasing) • Email slanphear@montana.eduwith your request and attached Limited Solicitation; PO reference; Sole Source Document • If approved, request will be sent to Andrea Gullickson to increase card for the purchase • Attach all documentation to Pro Card Report 9/23/10 Purchasing & Contracting

  14. LIMITED SOLICITATION BIDS • Oral Quotes (Phone Bids) • Complete PD-20 • Written Quotes (Fax and Email Quotes included) • Use PD-46 • Describe product/supply/service needed 9/23/10 Purchasing & Contracting

  15. LIMITED SOLICITATION BIDS (CON’T) • Identify • What the equipment must do • Specifications or Statement of Work • Deliverables and associated payments • Delivery date and bid due date • Special requirements – i.e. warranty, training, installation, service, maintenance, parts Purchasing & Contracting

  16. LIMITED SOLICITATION BIDS (CON’T) • Online Auctions • Counts as one source for a bid • Must obtain 2 bids/quotes from other sources prior to auction; lowest quoted bid is auction maximum bid • What if you estimate TCV under $25,000 and all quotes come in above $25,000? • DO NOT award a contract • Contact Purchasing • We may provide a ONE-TIME Delegation or • Advise you to submit a Purchase Requisition Purchasing & Contracting

  17. LIMITED SOLICITATION /SOLE SOURCE • Start with PD 20 or 46 and write out your objective requirements • If it is Brand specific, complete a PD 14 to substantiate the choice • Look for 3 vendors that should be able to provide the product or service; if it is not Brand specific then the bids must include multiple brands • Call or email them to request quote for the requirements 9/23/10 Purchasing & Contracting

  18. LIMITED SOLICITATION (CON’T) • If you can only find 2 vendors that can provide the product or service; document the PD 20 or 46 in the 3rd vendor column that there was no one available • If you can only find 1 vendor that can provide the product or service complete the PD 14 for the sole source. • If you are purchasing a service and the vendor is an individual and not a company, then contact purchasing 9/23/10 Purchasing & Contracting

  19. BRAND & SOLE SOURCE EXPLANATION • Remember: The primary goal of purchasing is to encourage competitive bidding • Sole Source means there is no one to compete with for the purchase of a particular product/supply/service • PD 14 is the form for Brand and Sole Source • It is a 3 step evaluation • What are the requirements • What Brand can meet the requirements • What is the only source that can deliver the brand 9/23/10 Purchasing & Contracting

  20. BRAND & SOLE SOURCE EXPLANATION (PD 14) • Step 1 – Write objective Requirements. The object goal of purchasing is to encourage competitive bidding. This is where all purchases begin • Step 2 – Is the purchase exempt from bidding? • Step 3 – If not exempt, is there only one brand that can meet the requirements? • Step 4 – How do you know this? Must perform an objective thorough search for products or service providers that could meet • Step 5 – If only one brand or service provider is proven, is there more than 1 vendor who sells the good or service 9/23/10 Purchasing & Contracting

  21. BRAND/SOLE SOURCE JUSTIFICATION FLOW-THROUGH PROCESS - SERVICES Named Specifically By Name in Grant No Bid - Sole Source Justification Requirements Bid Yes • Non-brand Specific • Needs not Wants • Objective & Measurable More than one Provider of services No Bid - Sole Source Justification No • Search Web • Trade Forums 9/23/10 Purchasing & Contracting

  22. BRAND/SOLE SOURCE JUSTIFICATIONFLOW-TRHOUGH PROCESS GOODS Bid Yes Non-brand or equivalent services More than one vendor could bid No No Bid - Sole Source Justification No No Yes Listed in Grant Brand Only Requirements Bid • Non-brand Specific • Needs not Wants • Objective & Measurable Yes Yes More than one vendor could bid No Yes No Bid - Sole Source Justification No Brand Justification No Bid Purchasing & Contracting

  23. LIMITED SOLICITATION AWARD • Contract must be awarded to lowest responsive bidder • In rare situations it may be possible to award on factors other than lowest bid. Must talk to Purchasing • Products/Supplies • Must Issue a Departmental Purchase Order (DPO) unless ordered with a Pro Card • Services • Issue a Contracted Service Agreement (CSA) Any deviations of terms and conditions from the original DPO or CSA form must be approved by Purchasing and Legal Counsel, prior to contract award. Purchasing & Contracting

  24. QUESTIONS AND SURVEYS • Thank you for your attendance. • Questions • Please take a few moments to complete the Survey for each session you attended. Please note on the survey for which session or sessions it applies. Purchasing & Contracting

  25. FREQUENTLY ASKED QUESTIONS ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Purchasing & Contracting

  26. Frequently Asked Questions • Copiers - How are copiers to be purchased and leased now that it isn’t mandatory state contract? • Purchase or lease through State Term Contract - WSCA • Check the state term contract for copiers that fit your requirements. If one of them fit for a purchase then follow the instructions above on How to Use a State Term Contract. • If you decided to bid (thinking you may get better pricing or the type of copier you need is not on the WSCA contact), standard purchasing rules apply for bidding and delegated authority. Copiers are rarely sole source, so you must have generic requirements that would allow for multiple manufacture vendors to bid. • If you are leasing a copier, all purchases must come through the Purchase Dept. Submit a signed Purchase Requisition Purchasing & Contracting

  27. FAQ’s continued • Vehicles - How are new and used Vehicles purchased or leased? • All new and new leased vehicles must be purchased during the Spring and Fall bids that the State issues on behalf of all agencies. Purchasing sends out the Specifications from the state to the Departments. The Departments submit a Purchase Requisition (hard and electronic copy) with attached Specifications to the Purchasing Dept. The Purchasing Department then forwards to the State. • All used vehicle purchases are purchased applying the standard purchasing rules apply using the Delegated Authority (up to $5,000; $5000.01 to $25,000; and purchasing for over $25,000). Vehicles are rarely sole source, so you must have generic requirements that would allow for multiple manufacture vendors to bid. You must go to state Surplus first to determine if anything is available and they will give you approval. • All leased used vehicles are purchased through the MSU Purchasing Dept., Must Submit a Purchase Requisition Purchasing & Contracting

  28. FAQ’s continued • Office Supplies – How are office supplies to be purchased? • It is suggested to use Staples (previously Corporate Express) as it has been bid, we can use our Pro Card. This is the most economical and efficient solution in most cases. • http://www.gsd.mt.gov/ProcurementServices/centralstoresprogram.mcpx • How Do I Order • Online. Go to our online ordering site. If you need to get signed up for online ordering please fill out the new user form and fax to 406-495-6001. Purchasing & Contracting

  29. FAQ’s continued • Shipping – What are shipping terms? • MSU requires FOB Destination – this means that the vendor has responsibility for the shipping liability all the way to MSU’s door • Vendors will propose other alternatives that place the responsibility on MSU as soon as it packaged and shipped. Then if there are problems MSU must deal with the shipper when in fact they didn’t do the packaging • State FAQ’s – Where can I find additional information on the purchasing process that the state follows? • http://gsd.mt.gov/procurement/procurementqas.asp Purchasing & Contracting

  30. FAQ’s continued • Terms and Conditions – What if the vendor proposes its own terms and conditions? • Only MT terms and conditions can apply without legal approval • Contact the purchasing office and they will facilitate the review and negotiation of terms and conditions • No one is authorized to sign a vendors document – i.e. quote, statement of work, license, Purchase Order or Contract Purchasing & Contracting

  31. FAQ’s continued • P-Card – How do I request an increase on my P-Card >$5,000? • For purchase of products/supplies only (no services unless approved by purchasing) • Email slanphear@montana.eduwith your request and attached Limited Solicitation; PO reference; Sole Source Document; DPES; PARR • If approved, request will be sent to Andrea Gullickson to increase card for the purchase • Attach all documentation to Pro Card Report • This is a payment alternative to a BPA Purchasing & Contracting

  32. FAQ’s continued • Sole Source/ Brand Justifications • The primary goal of purchasing is to encourage competitive bidding • Sole Source means there is no one to compete with for the purchase of a particular product/supply/service • PD 14 is the form for Brand and Sole Source • It is a 3 step evaluation • What are the requirements • What Brand can meet the requirements • What is the only source that can deliver the brand Purchasing & Contracting

  33. FAQ’s Sole Source continued • Step 1 – Write objective Requirements. The object goal of purchasing is to encourage competitive bidding. This is where all purchases begin • Step 2 – Is the purchase exempt from bidding? • Step 3 – If not exempt, is there only one brand that can meet the requirements? • Step 4 – How do you know this? Must perform an objective thorough search for products or service providers that could meet • Step 5 – If only one brand or service provider is proven, is there more than 1 vendor who sells the good or service Purchasing & Contracting

  34. FAQ’s continued • Receiving Goods– Are there best practices to follow? • Inspect the shipping container and if damaged contact the shipper and vendor immeadiately • Take a photo of container and contents before removing • Submit to shipper and vendor if damaged • If no problems accept DELIVERY of the goods • Until installed and operational do not ACCEPT the goods Purchasing & Contracting

  35. FAQ’s continued • State Term Contracts – Where do I find them and how do I use them? • Currently the State Term Contracts are located at http://www.montana.edu/wwwbu/purchasing • Click on “State Term Contracts” under “Information” • List of available contracts by subject matter Purchasing & Contracting

  36. FAQ’s continued • University Term Contracts - Where do I find them and how do I use them? • They will be listed on http://www.montana.edu/wwwbu/purchasing • Current contracts are: • Gases – (General Distributing (Compressed); American Welding (Liquid) • Learning Management - D2L • Microsoft • Background Checks • Collection Agencies • Vending Machines • Food • Pour Rights • Athletic Travel • Office supplies – Staples – state term contract • Elevator Maintenance Purchasing & Contracting

  37. FAQ’s continued • Cooperative Term Contracts - Where do I find them and how do I use them? • They will be listed on http://www.montana.edu/wwwbu/purchasing • The list is being developed and information will be disseminated as it is created • If you believe that something is available or has potention, please contact the purchasing department Purchasing & Contracting

  38. QUESTIONS AND SURVEYS • Thank you for your attendance. • Questions • Please take a few moments to complete the Survey for each session you attended. Please note on the survey for which session or sessions it applies. Purchasing & Contracting

  39. State Term Contracts; University Term Contracts and approved Cooperative Term Contracts Purchasing & Contracting

  40. What are Term Contracts • Refers to Contracts that are written based on awards from a bidding process that are available to buy from without doing your own bid process • Mandatory use is required by some • Recommended use is advised for others • A source of one vendor quote for a Limited Solicitation if it fits the purchasing need Purchasing & Contracting

  41. Term Contracts – Where To Find • Currently the State Term Contracts are located at http://www.montana.edu/wwwbu/purchasing • Click on “State Term Contracts” under “Information” • List of available contracts by subject matter • Coming Soon: Under location • University Term Contracts • Cooperatives Purchasing & Contracting

  42. Purchasing & Contracting

  43. Term Contracts – How To Use • Define Requirements • These are needed at the beginning of any purchase regardless of size • Identify Total Contract Value (TCV) • Establishes which purchasing method and rules apply • If TCV is over $25,000 prepare a Purchase Requisition (PD1) and contact purchase office • Review Mandatory Contracts List • If mandatory then must buy from this vendor Purchasing & Contracting

  44. Term Contracts – How To Use (con’t) • Purchasing office responsible for signing any terms and conditions with a vendor • Forms that may required: • DPES, PARR, W9 • If not a mandatory Term Contract then may: • Use a the best priced Term Contract from any Term Contract List • Use as one of the vendor sources for a Limited Solicitation Purchasing & Contracting

  45. Term Contracts – How to Use (con’t) • Contract Effective Dates • Must be Effective as of the date purchasing • Prices/Discounts • Provide Requirements to vendor and get pricing and discounts; verify against the contract • Request additional discount or services to be included • Verify that delivery is included • Verify that if additional services such as installation and training are needed that they are included • How To Place Orders • Instructions are provided in the contract you want to use • Make sure the department Purchasing & Contracting

  46. Term Contracts – How to Use (con’t) • Contract number • Must have to put on Limited Solicitation or Purchase Requisition, BPA or p-card report • Payment terms • Net 30 • Will they accept p-card for payment • Who is invoicing • Verify that the department is going to be invoiced • Delivery terms • Verify that it is FOB destination Purchasing & Contracting

  47. Term Contracts – How to Use (con’t) • Return policy • Review to make certain it meets your needs • Acceptance policy • If this is equipment that requires installation or training you would not want to accept until all completed • Warranty • Review to make sure what it covers and for what period of time • Request literature • In the event you aren’t sure if you should buy, requesting literature will provide you with feedback on the product and vendor Purchasing & Contracting

  48. Term Contracts – How to Use (con’t) • Installation • If services are needed they need to be included in the quote • Insurance • If the vendor is coming on site we require insurance; request assistance from the purchasing department • Maintenance and Support • If you know you are going to require maintenance and support, request quote for it to begin at the end of the maintenance and support period Purchasing & Contracting

  49. Term Contracts – How to Use for TCV OVER $25,000 (con’t) • Purchase Requisition - REQUIRED • Note: there has been some ambiquity if this is required or if spending over the $25,000 is allowed • Cannot exceed delegated authority of $25,000: • Provides spending authority approval • DPES • PARR • Federal Funds • Banner Encumbrance • Leases all must come through purchasing regardless of TCV Purchasing & Contracting

  50. Purchase Requisition • Complete the entire form • Add a second page if additional space is needed for requirements. • Email specifications to Purchasing as a Word (.doc or .docx) attachment • Do NOT use for commodities or services that have already been received • Call Purchasing to discuss • Submit a signed original via PDF (to Lawrence.Martin) or hard copy to Purchasing Office; including all supporting documents required (DPES and or PARR) • Include signed copies of all written quotes Purchasing & Contracting

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