Fundamentals for PURCHASING PROFESSIONALS

1. Fundamentals for PURCHASING PROFESSIONALS Division of Purchases and Supply Robert E. Gleason DGS/DPS Procurement Review Unit

2. Fundamentals For Purchasing Professionals OBJECTIVES: • Have a general understanding of the Virginia Public Procurement Act (VPPA). • Have an understanding of delegated authority and standards. • Know how to use the Agency Procurement and Surplus Property Manual (APSPM), DPS staff, and other resources as purchasing tools.

3. Fundamentals For Purchasing Professionals OBJECTIVES: • Understand end-user/customer needs, requirements, roles, and responsibilities. • Understand and recognize appropriate purchasing procedures. • Recognize and understand basic procurement planning issues and exercise problem-solving skills to procure needed goods and services.

4. Fundamentals For Purchasing Professionals Code of Virginia Article 3 - Purchases and Supply • Sec. 2.1-435. Establishes Div. of Purchases and Supply (DPS) • Sec. 2.1-440 Establishes that agencies purchase thru DPS • Sec. 2.1-442 • Purchases be in accordance with Ch.7, Title 11 (VPPA). • Authorizes DPS to: • Establish procedures (APSPM) • Exempt purchases below certain amounts, or certain agencies, or goods, and services.

5. Fundamentals For Purchasing Professionals Code of Virginia, Chapter 7, Title 11Virginia Public Procurement Act (VPPA) PURPOSE: State the public policies for government procurement from non-government sources. "If there is to be a contract between a state agency and a non-government vendor, the VPPA and the regulations set forth in the Agency Procurement and Surplus Property Manual (APSPM) and the Vendor's Manual apply regardless of the source of funds from which the contract is paid." (APSPM, pg. 1-1)

6. Fundamentals For Purchasing Professionals Virginia Public Procurement Act, Article 1. Section 11-35. G. "To the end that public bodies in the Commonwealth obtain high quality goods and services at reasonable cost, that all procurement procedures be conducted in a fair and impartial manner with avoidance of any impropriety or appearance of impropriety, that all qualified vendors have access to public business and that no offeror be arbitrarily or capriciously excluded, it is the intent of the General Assembly that competition be sought to the maximum feasible degree, that individual public bodies enjoy broad flexibility in fashioning details of such competition, that the rules governing contract awards be made clear in advance of the competition, that specifications reflect the procurement needs of the purchasing body rather than being drawn to favor a particular vendor, and that purchaser and vendor freely exchange information concerning what is being procured and what is offered. "

7. Fundamentals For Purchasing Professionals Objectives of the VPPA • Obtain high quality goods/services • Cost is reasonable • Fair and impartial procedures • Avoidance of impropriety (or the appearance of) • All qualified vendors have access • No arbitrary or capricious exclusions

8. Fundamentals For Purchasing Professionals Intent of the VPPA • Maximum feasible competition • Agencies have broad flexibility • Rules are clear in advance • Specifications reflect needs, not favor any vendor • Free exchange of goods or services information

9. Fundamentals For Purchasing Professionals Organization of the VPPA • Article 1 General Provisions Title, purpose, applicability, implementation, definitions, exemptions. • Article 2 Contract Formation and Administration Procurement methods (comp. sealed bids/negotiation, sole source, emergency); recycled & less toxic goods; construction provisions; cancellation, rejection of bids, proposals, etc.; contr. pricing, discrimination, exceptions, pre-qualification, debarment, preferences, coal, paper, local products, SWAM, brand names, public inspection of records, withdrawals of bids, bonds, etc.

10. Fundamentals For Purchasing Professionals Organization of the VPPA • Article 2.1 Prompt Payment • Article 3 Remedies Ineligibilities, appeals, protests, stays of award, disputes, legal actions, alternative resolution, etc. • Article 4 Ethics Definitions, participation, gifts, disclosures, kickbacks, certifications, misrepresentations, penalties, etc.

11. Fundamentals For Purchasing Professionals ETHICS No public employee shall: ...have a business interest that conflicts with a public procurement. ...solicit or accept gifts from bidders, offerors, contractors or subcontractors. Section 11-80. Penalty for violation. "Willful violation of any portion of the Ethics Section of the Code constitutes a Class 1 misdemeanor. Upon conviction, any public employee in additional to any other penalty or fine imposed by law, shall forfeit his/her employment."

12. Fundamentals For Purchasing Professionals VPPA Ethics Definitions (Sec. 11-73) • Official responsibility: "administrative or operating authority, whether intermediate or final, to initiate, approve, disapprove or otherwise affect a procurement transaction, or any claim resulting therefrom." • Procurement transaction: "all functions that pertain to the obtaining of any goods, services, or construction, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration."

13. Fundamentals For Purchasing Professionals VPPA Ethics Definitions (Sec. 11-73) • Public employee: "any person employed by a public body, including elected officials or appointed members of governing bodies." • Immediate family: "a spouse, children, parents, brothers and sisters, and any other person living in the same household as the employee.*" * Includes brothers and sisters outside the household

14. Fundamentals For Purchasing Professionals Dept. of General Services, Div. of Purchases and Supply (DGS/DPS) • Role & Responsibility • Central purchasing agency for all goods and nonprofessional services. • Establish and publish rules and regulations • Standardize materials, equipment and supplies • Establish criteria and procedure for operation of state-owned printing facilities

15. Assist with requirements planning Develop specifications for solicitations Process requisitions Develop master term contracts Provide subject matter expertise Provide service contracting assistance Manage contract administration/compliance Conduct post audit reviews Provide education activities Serve as a source of supply Fundamentals For Purchasing Professionals DPS PROCUREMENT SUPPORT

16. Fundamentals For Purchasing Professionals "The Division shall have authority to specifically exempt purchases below a stated amount or particular agencies or specified materials, equipment, nonprofessional services, supplies and printing." General Delegation § Sec. 2.1-442 • DPS Contracts . . . . . . . . . . Amount determined by contracts • Non-contract goods and printing . . . . . . . . $30,000* ($5,000) • Nonprofessional services . . . . . . . . . . . . . . . . . . . . . Unlimited • Mandatory Sources . . . . . . . . . . . . . . . . . . . . . . . . . .Unlimited *Effective July 1, 1998

17. Fundamentals For Purchasing Professionals Agency Standards for Increased Delegated Procurement Authority 1. Organization Standards • Compliance • Delegation Within An Agency • Management • Organizational Location 2. Purchasing Program Standards • Automation • Contract Opportunities • Contracted Purchasing • Cooperative Procurements • Purchasing Policies and Procedures. • Virginia Business Opportunities (VBO) Advertising

18. Fundamentals For Purchasing Professionals Agency Standards for Increased Delegated Procurement Authority 3. Staffing Standards • Procurement Responsibility/Authority • Procurement Staff • Staff Supervision 4. Professional Standards • Ethics • DPS Orientation 5. Training Standards • End-User Training • Professional Training • Professional Associations • Training Records • VCO Certification

19. Fundamentals For Purchasing Professionals Agency Delegated Procurement Authority • APSPM, Sec. 1.6 • The general delegation threshold for the purchase of goods and printing is $30,000 • Requirements for goods over $30,000 shall be forwarded to DGS/DPS for processing • This does not affect those agencies having higher delegations specifically authorized by DGS/DPS • Agencies are authorized to contract for services up to any dollar amount, subject to laws, regs, the APSPM, and fiscal restraints

20. Fundamentals For Purchasing Professionals Agency Monitoring Responsibilities Agency headshave ultimate responsibility to ensure that the acquisition of goods or services does not violate nor circumvent state law, executive orders, appropriations, regulations or the provisions of the APSPM. Each Agency must monitor purchasing activities to ensure: • Internal procedures are followed • transactions show the "who, what, when, where, how" • transaction files and records are properly documented

21. Fundamentals For Purchasing Professionals Agency Purchasing Office Role • Conduct purchasing in accordance with APSPM and agency procedures • Coordinate activities with DPS • Establish user level of delegation • Develop internal procedures • Ensure code compliance with VPPA

22. Fundamentals For Purchasing Professionals Agency Purchasing Office Role • Monitor local internal delegated purchasing activity • Provide end-user training • Provide assistance with specifications • Procurement planning (identify sources of supply, contract management., etc.)

24. Fundamentals For Purchasing Professionals Delegation to the End-User 1. DPS supports and advocates delegation to end users 2. Authority may be limited through, or to: • Small Purchase Charge Card "SPCC" (AMEX) • Blanket Purchase Agreements (BPA) • Contract/Non-contract items • Specific commodities or services • Limited dollar thresholds

25. Fundamentals For Purchasing Professionals Delegation to the End-User "Decentralize transaction activity through centralized oversight using policy, procedural management" Robert F. Fothergill

26. Fundamentals For Purchasing Professionals WHO? • Who will oversee purchasing in work unit? • Who will approve, authorize, and award? • Who will process transactions? WHAT? • What type of authority is desired? Signature, thresholds, awards? • What training is needed? End-user, AMEX, VCO., NAPM, technical? • What must be done to assure written procedures are clear? HOW? • How delegated; dept/division/cost center, etc. • How documented, i.e. requisitions, awards, receiving, approval for payment. • How does documentation flow, purchasing, receiving, accounting, etc. Determine the Who, What, and How

27. Fundamentals For Purchasing Professionals • Be knowledgeable of the agency's procurement policies and procedures • Identify needs • Purchase goods and services as delegated by the purchasing office • Develop specifications or solicitations for IFBs or RFPs • Administer contracts • Serve on an evaluation committees END USER'S ROLE

28. Fundamentals For Purchasing Professionals PROCUREMENT PLANNING APSPM Ch. 4 • Right Quality • Right Quantity • Right Location • Right Time • Right Price ENSURES...

29. Where? Why? How? Fundamentals For Purchasing Professionals IDENTIFY NEEDS • Who? • What? • When?

30. Fundamentals For Purchasing Professionals Planning Factors • Procurement & Delivery Lead Time • Administrative lead time is the period of time from identification of need to award (30-35 days) • Order/ship time is the period of time from award to delivery (30-90 days) • Licensing requirements • Pre-bid conference

31. Fundamentals For Purchasing Professionals Planning Factors • Product demos, samples, testing • Posting requirements • Time required to develop specifications • Maintenance and warranty • Lease/Buy

32. Fundamentals For Purchasing Professionals Planning Factors • Alternative Product/Service (Surplus) • Repair or Replace • Consolidation of requirements • Site prep • Privatization

33. Fundamentals For Purchasing Professionals Ongoing Procurement Planning • Project usage from past history • Establish contracts • Maintain vendor lists • Trends and market conditions • Vendor contacts

34. Fundamentals For Purchasing Professionals Virginia Business Opportunities (VBO) What is the VBO? • Weekly subscription bulletin of statewide bid opportunities published by DPS • Available hardcopy or electronically APSPM 2.34 & 3.1 a(4)

35. Fundamentals For Purchasing Professionals Virginia Business Opportunities (VBO) What is the purpose of the VBO? • Assist all qualified vendors to have access to state business. • Increase participation of small, women and minority-owned businesses in the state procurement process.

36. Fundamentals For Purchasing Professionals Virginia Business Opportunities (VBO) • Who are the subscribers? • Vendors • State agencies/institutions

37. Fundamentals For Purchasing Professionals VBO Requirements Agencies/institutions are required to advertise solicitations estimated to be: • Over $30,000 (formerly $5,000) for goods or services • Over $30,000 (formerly $10,000) for general highway construction and architectural and engineering services. • Political subdivisions and public school systems may advertise Encouraged over $15,000 . . .

38. Fundamentals For Purchasing Professionals SWAM Requirements Increasing Small, Woman, and Minority-Owned Businesses: • Establish internal procedures • Establish a list of vendors • Solicit SWAM businesses directly • Advertise solicitation less than $15,000 in VBO

39. Fundamentals For Purchasing Professionals MANDATORY SOURCES APSPM 1.4/1.5 • DGS/DPS State Contracts (section 1.4)Available from contract distribution center, (804) 786-8873. • Dept. of Corrections (DOC) (Section 1.5a) Catalogs, VCE Customer Svc, (804) 674-3760. • Dept. for the Visually Handicapped (DVH) (Section 1.5b)Mop heads and handles, mattresses, pillows, food handler caps, sweatshirts, writing instruments, latex gloves packaging, spices packaging, instant tea packaging, mailing services, and customer service representatives. (804) 295-6034.

40. Fundamentals For Purchasing Professionals MANDATORY SOURCES APSPM 1.4/1.5 • Dept. of Transportation (VDOT) (Section 1.5d) Purchase of motor vehicles. (804) 786-5179. • DGS/DPS Virginia Distribution Center (VDC) (Section 1.5e)Selected foods, food products, janitorial supplies, paper products. (804) 230-7701. • Office of Graphic Communications (OGC) (Section 1.5f) Production of design services, desktop publishing, or prep. of camera-ready art that exceeds $750. (804) 371-8358.

41. Fundamentals For Purchasing Professionals EXCEPTIONS TO MANDATORY SOURCES • State contract does not meet minimum needs of user. • Amount of purchase is less than minimum dollar amount specified by the specific contract.

42. Fundamentals For Purchasing Professionals Surplus Property Mission • Re-utilize surplus property to save taxpayer money • An investment recovery program to sell surplus property competitively to general public. Reasons to consider surplus • Saves money • Conserves resources by stretching buying power • Recycles manufactured goods saving natural resources, an act of environmental responsibility.

43. Fundamentals For Purchasing Professionals Surplus Property Programs • THE STATE SURPLUS PROGRAM • The state surplus property program transfers property between agencies and sells property surplus to satisfy the needs of state agencies. The primary method of sale is though public auctions, with approximately 50 auctions conducted each year around Virginia. Just about everything the Commonwealth buys becomes surplus at some point. For more information (804) 236-3666.

44. Fundamentals For Purchasing Professionals Surplus Property Programs • THE FEDERAL SURPLUS PROGRAM • Public agencies, certain non-profit organizations and state agencies may be eligible for this cost saving program. Determination of eligibility is defined by federal regulations. The program is governed under Public Law 94-519 and the Virginia Plan of Operation. For more information call (804) 236-3664.

45. Fundamentals For Purchasing Professionals Specifications Planning • What are “specifications”? • A concise statement of a set of requirements to be satisfied by a product, materials or a process. Requirements should be measurable, and expressed numerically in terms of appropriate units - together with their limits. • What does "practicable" mean? • Something that is capable of being done or capable of being used for a specified purpose (practical is used to describe something that is sensible and worthwhile).

46. Fundamentals For Purchasing Professionals How is a specification established? • Three important factors to be considered: • 1. User requirements • 2. Budgetary considerations • 3. Availability of the product or service.

47. Fundamentals For Purchasing Professionals Establishing a Set of Specifications • Look for prior procurements. If a contract exists, review the file to determine if any modifications will be required for the new contract. • Gather documentation on: • existing product specifications • state of the art technology • floor plans • schematics

48. Fundamentals For Purchasing Professionals Establishing a Set of Specifications • Identify other sources: • DPS specifications library • industry standards • publications • Other state agencies • vendors

49. Fundamentals For Purchasing Professionals Develop Specifications Three characteristics of a specification: • Identify the minimum requirement • Allow for competition • Establish a method for testing and inspecting.

50. Fundamentals For Purchasing Professionals Develop Specifications Categories of Specifications • Generic • Brand Name or Equal • Proprietary