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  1. Purchasing Services & Construction MASBO February 2010

  2. Information to purchase Services Information to purchase Construction Introduction

  3. All agencies and governing authorities shall purchase their commodities and printing; contract for garbage collection or disposal; contract for solid waste collection or disposal; contract for sewage collection or disposal; contract for public construction; and contract for rentals….. • Other than what is listed above, the Purchasing Law does not mention Services, only Construction. Purchasing Law Miss Code § 31-7-13

  4. State purchasing laws do not make mention of “Services”; therefore, for governing authorities, there is no statutory requirement for obtaining bids to acquire services. Be sure to follow your District’s Policies and Procedures when purchasing a service. Services

  5. “Service” can best be defined as “the furnishing of labor, time, or effort by a contractor to meet a demand, especially work that is not connected with a manufacturing process or the delivery of a specific product other than reports or other items which are merely incidental to the required performance.” • Therefore, a “Service Contract” could be defined as a “contract that calls for the contractor’s time and effort rather than a concrete end product or commodity.” What is a Service?

  6. The difficulty develops in defining what a service is and when does a service become a construction project or a commodity purchase. Determining Factors…

  7. If you hire someone to paint a building on a non-routine basis, it would be considered a construction project, and bidding would be required. Examples to illustrate difficulty:

  8. When you hire a janitorial firm to clean the building, you are receiving the benefits of the various cleaning chemicals and supplies; however, since you are contracting for a service (the time & effort), there is no requirement to comply with the statutory bidding requirements. Examples to illustrate difficulty: (continued)

  9. If you have staff which is qualified to apply water treatment chemicals for the boiler and cooling towers, you could follow the statutory bid procedures to procure chemicals. Examples to illustrate difficulty: (continued)

  10. On the other hand, if advantageous to the District, you could enter into a personal services contract with a vendor to provide the time & effort required to provide the treatment service to keep your system operating efficiently. Examples to illustrate difficulty: (continued)

  11. Even though we are not required to comply with the bid laws for Services, it should not be construed to mean that an entity could not obtain bids/quotes for services. Good purchasing practice would indicate that the buying entity obtain the lowest and best possible price for the services required. Good Purchasing Practices

  12. Basic Quote Requests • Competitive Sealed Bids Is practicable, when specifications can be clearly defined and cost is the primary factor and negotiations are not allowed. • Request for Proposals (RFP’s) Allows a general scope of work to be specified and permits negotiations. How to Purchase Services

  13. Competitive Sealed Bids includes: • Instructions • Detailed Purchase Descriptions/Specification Differences in bids and rfp’s

  14. General Terms and Conditions • Special Terms and Conditions • Bid Form for Pricing Differences in bids and rfp’s(Continued)

  15. Public Bid Open - Bids are publically read and unconditionally accepted without alteration or correction. No negotiations. • Bids must meet detailed specifications Differences in Processes (Continued)

  16. Awarded to the lowest responsive and responsible bidder • Cost is primary factor in determining award Differences in Processes (Continued)

  17. Request for Proposals – (RFP) includes: Instructions Detailed Scope of Work General Terms and Conditions Differences in Processes (Continued)

  18. Special Terms and Conditions Evaluation Factors/Criteria (We like to qualify our bidders by asking specific questions pertaining to the service , as well as questions relating the companies ability to supply the service. This makes it easier to evaluate and score each proposal. ) Differences in Processes (Continued)

  19. Sample Contract showing Terms and Conditions Proposals are not opened publicly. Differences in Processes (Continued)

  20. Permits discussions and negotiations with competing offerers. Allows comparative judgmental evaluations to be made when selecting among acceptable proposals for award of the contract. Differences in Processes (Continued)

  21. Awarded to the offerer to be the most advantageous to the District taking into consideration price and the evaluation factors set forth in the RFP. Process time is longer than Competitive Bid process. Differences in Processes (Continued)

  22. Competitive sealed bidding may be practicable; that is, reasonably possible but not necessarily advantageous because the RFP might enhance the competition resulting in a more acceptable economical offer, as well as, the ability to negotiate contract terms and conditions. Do I bid or do I use the rfp process for Services?

  23. Contracts are essential business tools for business relationships. Without clearly defined and agreed contracts, misunderstanding can develop, expectations of customer and service performance fail to match, and all sorts of problems occur. The contract is developed through the Bid/rfp

  24. Project Manager must: • Have a clear understanding of the project. (Communication) • Do your homework. What is done up front can stop problems down the road. • Work closely with the end user’s, vendor’s, etc to understand expectations between supplier and customer. How to Develop a good contract

  25. Definition of Scope of Work: Identifies both the project deliverables and project objectives How to Develop a good contract(Continued)

  26. Scope of Work: • Most critical and is the roadmap for the deal! • Needs to be done in clear and concise terms. How to Develop a good contract(Continued)

  27. Developing the Scope of Work: Do you know what is needed and expected? How to Develop a good contract(Continued)

  28. Developing the Scope of Work: POSSIBLE CONSIDERATIONS Aspect To Be Addressed: Problem/Issue • ASK: What is the problem to be solved or issue to be addressed? How will you know that the problem/issue is resolved satisfactorily? What do you want to see accomplished? How to Develop a good contract(Continued)

  29. Aspect To Be Addressed: Characteristics of persons to be served ASK: Who has the problem/issue? Who is expected to be served under this contract? What are their characteristics such as geographic location, etc? How to Develop a good contract(Continued)

  30. Aspect To Be Addressed: Staff characteristics ASK: What types of staff will the contract require? (qualifications, availability, etc) How to Develop a good contract(Continued)

  31. Aspect To Be Addressed: Facilities & equipment ASK: What facilities and equipment will be required or expected? Are there specific requirements the facilities or equipment must meet? How to Develop a good contract(Continued)

  32. Aspect To Be Addressed: Define the Service and the Tasks ASK: What types of services will the contract require? What service tasks must be performed? How to Develop a good contract(Continued)

  33. Aspect To Be Addressed: Method of delivery ASK: Are there expectations for how the tasks must be carried out? Are there expectations about how, when, who, how often, what? If so, what are they? How to Develop a good contract(Continued)

  34. Aspect To Be Addressed: Service completion ASK: How will you know the service has been provided and the required tasks completed? Will payment be tied to outputs? Are there reports or meetings you expect? If so, at what time intervals? What are the expectations for those reports or meetings? How to Develop a good contract(Continued)

  35. The Scope of Work should hold the Service Provider Accountable….. Results or performance should be the focus, not procedure or process. How to Develop a good contract(Continued)

  36. Work requirements should be in a results-oriented manner and clearly defined performance objectives, work expectations and project milestones. How to Develop a good contract(Continued)

  37. Handouts: Showing Standard Contract language/terms and conditions are available. How to Develop a good contract(Continued)

  38. Dr. Ronnie McGehee Deputy Superintendent Madison County School District Construction

  39. #1 – Choose wisely on who is your professional Construction

  40. #2 – Contract Be very careful as mentioned in previous slides – Before execution, read and read again! Construction (continued)

  41. #3 – Time Frame This needs to be clearly stated in your terms and conditions. Construction (continued)

  42. #4 – Design Construction (Continued)

  43. #5 – Code Issues Construction (Continued)

  44. Handouts: Construction handouts are available Construction (Continued)