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Utah Valley University New Age Procurement

Utah Valley University New Age Procurement. Some Positive Changes have been made. Why?. Update to State Code. Why code was updated Procurement code was old Various high-profile procurement-related issues Update process 2012 Legislative Session 2013 Legislative Session

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Utah Valley University New Age Procurement

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  1. Utah Valley UniversityNew Age Procurement

  2. Some Positive Changes have been made.

  3. Why?

  4. Update to State Code • Why code was updated • Procurement code was old • Various high-profile procurement-related issues • Update process • 2012 Legislative Session • 2013 Legislative Session • 2014 Legislative Session • Effective Date: May 1, 2013

  5. Regent’s Policy • Procurement code declares Board of Regents as Rulemaking Authority • New Regent’s policy delegates this rulemaking authority to each institution

  6. New UVU Policies • Currently in Stage 3 • Posted on the Policy website • New policies • 241, University Procurement • 242, Solicitation and Award of Procurement Contracts • 243, Small Purchases • 244, Requisitions and Purchase Orders • 245, Receiving Goods and Services • 246, Surplus Property

  7. New UVU Policies – cont. • Other affected policies • 204, Appropriateness of Expenditures • Updating references to procurement policies • Updating format • Fixing some minor grammatical and syntax errors • Not changing expenditure procedures • 421, Property and Equipment • Removing Surplus section only • Not updating format

  8. High Profile Procurement Issues

  9. DABC • Split Purchases • Unethical behavior • Accepting Gratuities • Inflating contracts • Bid Rigging

  10. Splitting procurements • Under the Utah Procurement Code, it is illegal to divide, split, parcel, or manipulate a procurement, with the intent of making a larger purchase appear to qualify as a small-dollar purchase or to avoid an established dollar threshold. • Revocation of privileges (P-card, LPC) • Disciplinary action • Report to AG

  11. Ethical Requirements • All individuals participating in a procurement, including contract administration, must adhere to the ethical requirements outlined in the Utah Procurement Code • Gratuities • Kickbacks • Fairness • Impropriety

  12. UVU Procurement Code of Ethics • Know and obey the letter and spirit of laws, regulations, and policies • Prevent the appearance of unethical behavior • Protect confidential information • Avoid conflicts of interest • Do not accept gifts, gratuities, or kickbacks from vendors which may appear to influence purchasing decisions.

  13. Change Orders • Requisitions should have a good estimated amount • No $1.00 requisitions • Change Orders submitted through website form • Additional items will not be added from invoice • Analyzed to ensure compliance with policies, procedures, and applicable contracts

  14. Communication • During a procurement process, no communication with vendors • Vendors must be directed to Purchasing

  15. Timpview High School • Mishandling money • Lax control environment • Personal Reimbursements • “Intentional and willful disregard by certain employees for compliance with appropriate practices and policies.”

  16. Check Requests – A/P • “Any expenditure external to UVU that cannot be purchased with a limited purchase check or purchasing card must be obtained using a requisition through the Purchasing Department” (Policy 204.V.A.1.g). • Sales Tax. • Lack of proper controls.

  17. Check Requests – Proper Use • Should only be used if the expenditure cannot be feasibly made using an LPC, P-Card, or PO as determined by FaBS and PS. • Include a detailed explanation on the check request. • Check Requests received for reimbursement may be sent to the VP as a violation. • See Policy 204. • Questions regarding Check Requests are referred to Scott Wood.

  18. UDOT • Protest on I-15 CORE Project • Criteria weighting was changed to favor a vendor • Evaluation factors included in the RFP were not adhered to • Settlement: $13 million

  19. Vendor Favoritism • Specifications shall not be unduly restrictive or appear to favor one vendor over another • Rating criteria should be clear and concise • Rules can’t be changed during the process • Analysis on expenditures to ensure fairness

  20. Emergency! Emergency!

  21. Emergency vs. Urgent • Emergency procurements are procurements needed due to an emergency situation • Threat to public health or welfare • Serious threat to the functioning of the institution • Procurements made at Purchasing’s discretion • Urgent procurements are procurements that are needed due to a lack of planning or circumstances beyond the control of the requestor. • All procurement policies and procedures must still be followed.

  22. Violations

  23. Violations • An unauthorized purchase is a purchase made without following the authorized procurement processes.  • An after-the-fact purchase occurs when a University employee places an order without first completing a requisition and receiving a purchase order.

  24. Violations – cont. • Result in duplicate payments to the vendor, for which the department is responsible. • Result in higher costs for goods and services • Lead to significant vendor payment issues that can result in problems for other departments on campus. • Bypass the appropriate approval process. • Place the University at financial risk and create potential personal liability. • Create additional, often unnecessary, work for administrative support staff.

  25. Violations – cont. Ways to Avoid Violations: • If you have to place an order, create the requisition right away.  Work with the Purchasing Office if you need the order expedited. • You must arrange a payment method BEFORE placing an order.  “I didn’t know…,” is not a valid excuse for violating policy.

  26. Violations – cont. What to do if a violation occurs: • If a violation occurs, fill out all sections of the Purchase Violation Form.  • An explanation of why policy was not followed • Future corrective action • Attach invoice and send for authorizing signatures • Vendor is paid • DO NOT enter a requisition.

  27. What changed?

  28. Thresholds • Bid Limit • $3,000 • $5,000 (Construction) • Advertised Limit • $30,000 • $50,000 (Construction) • Small-Dollar Purchase Threshold • $5,000 • $15,000 (Construction) • Large-Dollar Purchase Threshold • $50,000 Old New

  29. Small-Dollar Purchasing

  30. Small-Dollar Purchasing • Methods: • Purchasing Card (P-Card) • Must comply with P-Card usage guidelines • Default Limit: $1,000 per purchase • Limited Purchase Check (LPC) • Must comply with LPC usage guidelines • Limits: $150 and $500 • Requisition/Purchase Order Process

  31. P-Card Changes • Default limit: $1,000 • Auditing process • New preliminary audit report • Clearer deadlines • Adjustment to the point system

  32. LPCs • Ordered using a Stores Requisition • Do not mix with regular stores items • Return documentation within five business days • Don’t return unused checks via intra-campus mail • Fewer violations

  33. Requisitions • Requisitions (Req) are not Purchase Orders (PO) • Orders cannot be placed with requisitions • PO must be completed and approved before orders are placed • Orders placed before a PO is completed and approved are violations

  34. Requisitions • Must include all necessary information for purchasing and vendors to understand what is being procured • Minimum specifications • Product numbers and descriptions • Names of individuals and Dates • Memberships, conferences, hotels, presenters, performers

  35. Request for Quotes (RFQ) • Reqs over the small-dollar purchase threshold • Performed by the Purchasing Office • Quotes gathered from at least two known vendors • Order placed with vendor providing the lowest price • Not required if items are available through a contract

  36. Large-Dollar Purchasing

  37. Large-Dollar Purchase Methods • Requisition/Purchase Order • Invitation for Bid Process • Enhanced Procurement Methods

  38. Invitation for Bids (IFB) • Publically advertised through BidSync.com • Time frame set by buyer • Minimum ten calendar days • Minimum specifications listed in requisition • Not brand specific • Not unduly restrictive • Awarded to vendor providing lowest price

  39. Enhanced Procurement Methods

  40. Enhanced Procurement Methods • Multi-Stage Bid (MSB) • Request for Proposals (RFP) • Multi-Year Pricing Agreement/Contract • Requires justification • Fill out Justification for Enhanced Procurement Method

  41. MSB - New

  42. MSB Examples • Equipment needed to perform specific experiment • Specialized software needed to perform specific function • Specialized services

  43. Multi-Stage Bids (MSB) - New • An MSB is used when potential bidders or potential products must be pre-qualified before requesting priced bids. Objective criteria (pass/fail, quantitative) is used to determine if a potential bidder or potential product meets the minimum qualifications or specifications needed.

  44. MSB Process • Enter a requisition. • Indicate MSB in the comments field • Fill out the Justification for Enhanced Procurement Method • If approved, buyer will provide an MSB Statement of Needs and Rating Criteria document • Work with the buyer to complete the document

  45. MSB Process – cont. • Bids performed in two stages • Stage 1: Technical/Qualification • Allows vendors to submit technical (no cost) written bids outlining capabilities and qualifications. • May include demonstrations, presentations, trials, etc. • Bids are rated pass/fail based on meeting qualifications and specifications • Stage 2: Cost bids • Cost bids are requested from vendors that successfully pass Stage 1 • Awarded to vendor providing lowest price in Stage 2

  46. MSB Process – cont. • Technical bids are evaluated by at least three individuals • Acceptable, Potentially Acceptable, Unacceptable • Discussions with vendors to clarify technical bids may be held during the evaluation process • Minimum timeframe: Two weeks – Stage 1 • Timeframe set by buyer

  47. RFP - Improved

  48. Request for Proposals (RFP) • In an RFP process, vendors are asked to submit proposals outlining how they would meet or exceed our needs. A committee evaluates the proposals and rates each proposal based on the criteria contained in the RFP. Following the technical evaluation, a cost evaluation is performed. The award is made to the vendor that will provide the best value to the University.

  49. RFP Process • Enter a requisition. • Indicate RFP in the comments field • Fill out the Justification for Enhanced Procurement Method • If approved, buyer will provide an RFP Statement of Needs and Rating Criteria document • Work with the buyer to complete the document • Timeframe: Four to six weeks • Timeframe set by buyer

  50. RFP Process – cont. • Evaluation is a three stage process • Stage 1: Technical Evaluation • Proposals are evaluated subjectively by at least three individuals • Each weighted criterion receives a score 1-5 • Technical points are combined for each proposal • Committee cannot have access to cost information

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