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Bid Contracts


Bid Contracts document sample

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									Discussion of the Alabama
  Competitive Bid Law –
   Boards of Education
 Presented by Mr. Mike Scroggins,
   Director County Audit Division
   Examiners of Public Accounts
            Legal Authority

• Code 41-16-50 through 41-16-63
  (Article 3)
• Applies to County
  Commissions,      County and City
  Boards of Education, Municipalities
         To What It Applies…

• Applies to the expenditure of funds for
  labor, services and work involving
  $7,500 or more
• Applies to the purchase or lease of
 materials, equipment, supplies or other
 personal property involving $7,500 or
          Legal Requirement

Requires a contractual agreement entered
     into by free and open competitive
   bidding, on sealed bids, to the lowest
             responsible bidder.
      Length of Contract Terms

• Purchase or Service Contracts - limited
  to 3 years
• Lease-Purchase Contracts for capital
  improvements, repairs to real property
  and other lease-purchase contracts -
  limited to 10 years
      Advertising Requirements

• Post notice on bulletin board outside
  purchasing department
• Can do more…but not required!
   Sealed Bids and Documentation

• Must be sealed when received
• Opened in public at the hour stated in
  the notice
• All original bids and documents
  pertaining to the award of the contract
  shall be retained for a period of seven
  years from the date the bids are
  opened and shall be open to public
      Bid Bonds/Cashier’s Check

• Must be furnished for contracts
  exceeding $10,000, if bonding is
  available for the services, equipment or
• No guidance in Law as to amount of
  bond - 5% to 10% of contract
          Performance Bonds

• Bond for faithful performance of the
  contract may be required in an amount
  specified in the advertisement for bids
• Bond should be a “responsible” sum
  with adequate surety
• Not required!
  Items Exempt from Requirements

• Utility Service (rates fixed by
  law, regulation, or ordinance)
• Insurance
   Items Exempt from Requirements
• Professional
  – Attorneys            –Consultants
  – Physicians
  – Architects           –Certified Public Accountants
  – Teachers             –Public Accountants
  – Superintendents of
                         –Others possessing a high
                         degree of professional skill
  – Artists
                         where the personality of the
  – Appraisers           individual plays a decisive part.
  – Engineers
  Items Exempt from Requirements

• Regular Civil Service    • Manuscripts, Books, M
  employment contracts       aps, Pamphlets, or
• Fiscal or Financial        Periodicals
  Advice or Services
                           • Paying
• Products made by
  Alabama Inst. For Deaf     Agents/Trustees
  and Blind
• Maps/Photographs from
  any federal agency
  Items Exempt from Requirements

• Computer hardware           • Service or commodity
  which is only type            for which there is only
  compatible with
                                one vendor or supplier
  hardware already
  owned/Custom software       • Product whose price is
• Professional Services for     regulated and
  the codification and          established by state
  publication of the laws       law
  and ordinances of the
  muni or county.
  Items Exempt from Requirements

• Security Related Services/Products
  – Which impact upon the security of
    persons, structures, facilities or
 Items Exempt from Requirements

• Individual school purchases from
  monies other than those raised by
  taxation or rec’d from state or county
  appropriations (i.e., fundraisers,
              Local Schools
• Local schools do not have to comply
  with the bid law when they are using
  funds other than those derived from
  taxation or appropriation from the
  Board (i.e., donations or fund raisers).
New Legislation –
NACO - Act No. 2006-279
• Amends Code of Alabama 1975, 41-16-51
• “(a) the competitive bidding requirements of
  this article shall not apply to:
  – (16) Subject to the limitations in this
    subdivision, purchases of goods made as part of
    the purchasing cooperative sponsored by the
    National Association of Counties, or its successor
• U.S. Communities is the purchasing
New Legislation –
NACO - Act No. 2006-279 (Cont.)
• “This subdivision shall not apply to
  goods for which a service or service
  contract, whether subject to
  competitive bidding under this contract
  or not, is necessary to utilize the
New Legislation –
NACO - Act No. 2006-279 (Cont.)
• “Purchases may only be made if all of
  the following occur:
  – The goods being purchased are available
    as a result of a competitive bid process
    approved by the Alabama Department of
    Examiners of Public Accounts of each bid.”
• On May 31, 2006, we communicated
  our approval of this competitive bidding
  process used by U. S. Communities.
New Legislation –
NACO - Act No. 2006-279 (Cont.)
• “Purchases may only be made if all of
  the following occur (continued):
  – The goods are either not at the time
    available to counties on the state
    purchasing program or are available at a
    price equal to or less than that on the state
    purchasing program.”
      U.S. Communities Contracts
  Divided into Three Groups by ACCA

Contract awarded by U.S. Communities
1. No State contract for same item
2. Contract awarded by State – Same
   vendor has both contracts
3. Contract awarded by State – Different
   vendors for same items
Item to Note
• ACCA staff and the Examiners worked
  together so that Counties will not have
  to evaluate each product for every
Contract Categories
• No problems with purchasing immediately for
  goods in Category 1
• Category 2 companies have agreed to sell at
  the lowest cost through U. S. Communities
• Category 3 offered biggest challenges-
  includes mainly the following:
  – Office Depot contracts
  – GTSI contracts
Contracts from
Category 1 & 2
• Homeland Security-Hagemeyer NA
• Park and Playground Equipment-
  Gametime; Landscape Structures; Little
  Tykes Commercial
• Carpet and Flooring – Milliken Carpet
• Physical Education Supplies – Sportime
• Janitorial Supplies – ZEP
Contracts from
Category 1 & 2 (cont.)
• Maintenance, Repair and Operating
  Supplies - Home Depot Supply/The
  Home Depot
• School-related Furniture – Virco
• Office Furniture – Haworth, Herman
  Miller, Steelcase and Knoll
• Electrical and Data Communications
  (including light bulbs, etc) - Graybar
New Legislation –
NACO - Act No. 2006-279 (Cont.)
• “Purchases may only be made if all of
  the following occur (continued):
  – The purchase is made through a
    participating Alabama vendor holding a
    valid Alabama business license, if such a
    vendor exists.”
     Resident Bidder Preferences

• Resident Bidder – has a place of business
  within the local preference zone.
• Deemed to be a Responsible bidder.
• Bid is no more than 3 percent greater than
  the bid of the lowest responsible bidder.
• In this instance, contract may be awarded to
  the resident bidder.
                Bid Lists
• Sealed bids shall also be solicited by
  sending notice by mail to all vendors
  who have filed a request in writing that
  they be listed on the bid list for the
  particular items being bid.
• If a vendor fails to respond to any
  solicitation after the receipt of
  three, the vendor may be removed from
  the bid listing.
    Items to be considered when
   determining the lowest bidder…
• Qualities of the goods proposed to be
• Conformity with specifications
• Purposes for which required
• Terms of delivery
• Transportation charges
• Dates of delivery
          Rejection of a Bid

Awarding authority may reject a bid when
   the price is deemed excessive or the
       quality of product is inferior.
      Documentation of Results

• To whom bid was awarded
• Reasons for not awarding to the lowest
• Bid file shall be open for public
• Must affect public health, safety or
  convenience, be declared in writing by the
  awarding authority, and such action and
  reasons should be immediately made public
  by the awarding authority.
• No advertising required
• Must still follow other bid law requirements -
  per ruling by the State Supreme Court
  (General Electric Co vs. City of Mobile 1991)
        Only One Bid Received

• May accept bid or
• May reject the bid and negotiate the
  purchase or contract, provided the
  negotiated price is lower than the bid
         Splitting of Contracts

• No purchase or contract in excess of
  $7,500 shall be divided into parts
  involving amounts of $7,500 or less for
  the purpose of avoiding the
  requirements of the competitive bid law
           Conflicts of Interest

• No member or officer of an awarding
  authority shall be financially
  benefit, either directly or indirectly, in
  the purchase of or contract for any
  personal property or contractual
• Misdemeanor and removal from
  office, if convicted
         Collusion Among Bidders
• Any agreement or collusion among bidders or
  prospective bidders to bid a fixed price or to
  refrain from bidding shall render the bids of
  such bidders void and shall cause such
  bidders to be disqualified from submitting
  further bids to the awarding authority on
  future purchases.
• Knowing participants can be guilty of up to a
  Class C felony.
      Advance Disclosure of Bid

Any advance disclosure of the terms a bid
  submitted shall render the proceedings
    void and will require the item to be
         advertised and bid again.
       Assignment of Contracts
• No contract awarded to the lowest
  responsible bidder shall be assignable
  by the successful bidder without written
  consent of the awarding authority
• In no event shall a contract be assigned
  to an unsuccessful bidder whose bid
  was rejected due to not being a
  responsible bidder!
Provisions for Mistakes by Vendors

There are no provisions in the law for
  mathematical mistakes by vendors.
           Joint Purchasing

• Governing bodies of two or more city or
  county boards of education may
  purchase jointly (Act 2006-621).
• Each governing body must approve
  joint purchasing agreement and details
  by resolution.
• A Joint Purchasing Agent may be
IT Joint Purchasing
• Act 2003-392 – Effective 6/24/2003
• Provides for the joint purchasing of
  information technology (IT) by
  educational institutions.
Educational Institutions –
Who is included?:
                          • Department of Youth
• State Trade Schools       Services
• State Junior Colleges   • Alabama Institute for
• State Colleges            the Deaf and Blind
                          • Alabama School of Fine
• State Universities        Arts
• City/County Boards      • Alabama School of Math
  of Education              and Science
• District Boards of
Information Technology –
What is included?:
• Equipment
• Supplies and Other Tangible Personal
• Software
• Services
• Any combination of above used to
  provide data processing, networking, or
  communication services.
Qualified Vendors
• Only companies or those companies
  affiliates, subdivisions, subsidiaries, or
  departments have ISO-9001
  certification can bid on IT to be jointly
• Ensures quality vendors.
Joint Purchasing Agreement
• An agreement in writing providing for
  the lease or purchase of information
  technology under a single contract.
• May be entered into by any number
  or combinations of educational
• Agreement must be executed by
  each of the participating institutions.
Joint Purchasing Agreement
• Agreement should address the
  categories of IT to be purchased or
  leased, the manner of advertising for
  bids and awarding the contract, the
  method of payment by each
  participating educational institution, and
  other matters.
• A joint purchasing administrator may be
State Department of
Education/Department of
Postsecondary Education

  • Monitoring and Oversight
  • May purchase from joint IT contracts
    when purchases are necessary to
    maintain statewide application and
    compatibility with the consent of the
    Director of Finance.
Competitive Bid Law Issues
• May result in awards to multiple vendors for
  each one product line in order to meet
  specific requirements/compatibility.
• All terms and conditions of Title 41, Chapter
  16, Code of Alabama 1975 that are not
  expressly modified by this act shall apply to
  joint purchase agreements.

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