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Purchasing 101 Introduction to the Anywhere ISD Purchasing Processes Janet Powell, Director of WFISD Support Services email@example.com 235-1018 The Foundation and Structure Why we do what we do… The Governmental Requirements • The Law • Texas Education Code 44.031 through 44.047 • Purchasing Contracts – 44.031 • All purchases made over $50,000 must follow one of the defined purchasing methods • What criteria can be used to determine an award (“Best Value”) • Public advertisement in a local newspaper • Definition of and procedure for making an emergency purchase • Criminal Penalties – 44.032 • Construction Services – 44.035 through .041 The Governmental Requirements (cont.) • District Policy • CH (Legal) • Based directly on governing statutes • CH (Local) – Purchasing Acquisition • Purchasing Authority • Competitive Procurement Requirements • Interlocal Agreements • Vendor’s List • Bids and Proposals under $10,000 • Information Technology Purchases under $25,000 • Employee Conflict of Interest The District Requirements • Financial Information Resource Manual (FIRM) • Purchasing Requirements • Purchasing Organization • How to make a District Purchase • Sole Source Procurements • Personal, Consulting and Professional Services • Purchase Requisition Preparation • Purchase Order Receiving • Purchasing with a Purchasing Card The District Requirements (cont.) • Financial Information Resource Manual (FIRM) • Vendor Selection • Purchasing Ethics • Purchasing Contracts • Available at: http://www.your_isd_website.net Historical Perspective for Round Rock ISD • In 2007 – 2008: • The RRISD spent over $62 million dollars in purchase orders • The Purchasing Office issued over 9,400 purchase orders • There were a total of 32,351 procurement card transactions • The District spent $4 million in procurement card transactions • The Purchasing Office awarded 108 contracts worth over $100 million • Distribution received 16,328 warehouse requisitions worth $1.7 million • Print Services made 50 million impressions, and over 48 million impressions were made on convenience copiers • Text Books managed $15 million of text books Purchasing Ethics • Responsibility to the tax payer to use the District funds appropriately • Develop good relationships with suppliers and encouraging competition while avoiding an appearance of favoritism or misconduct • Employees are not to circumvent laws, policies, and procedures, or make liberal interpretations • Not make intentional sequential or component purchases to circumvent requirements • Failure to follow State laws and District policy will render the purchase non-compliant Purchasing Ethics (cont.) • Receipt of gifts, kickbacks or gratuities are not acceptable and may lead to disciplinary actions if necessary • Opened acknowledgement of conflicts of interest • Failure to follow requirements may have criminal penalties Remember: Do the Newspaper Test for all purchases The Organization What we look like… The Purchasing Office’s Role District-wide Perspective Board of Trustees Superintendent Deputy Superintendent Chief Financial Officer of Instruction Director of Business / Budget Services Purchasing Department The Purchasing Office’s Role (cont.) Purchasing Department Director of Business / Budget Services Director of Purchasing Assistant Director of Assistant Director of Manager - Text Book Manager – Print Purchasing Purchasing Distribution Coordinator Services Programs -Purchasing Process -Purchasing Programs -Mail Services -Text Books -Print Services (Buyers, Purchasing (Pcard Administration, -Warehouse -Instructional Media -Convenience Copiers Specialist) Travel, Fixed Assets, -Distribution -Records Retention -Media Lab Surplus Property) Authority and Aggregation • Centralized Buying Authority • The Purchasing Office has been tasked with overseeing all purchasing activity in the District and has been delegated down to the individual campuses and departments • The District is recognized as a whole, not as individual entities • Purchases by all campuses and departments are aggregated together for a particular category to determine the annual expenditure • The annual expenditure will determine which purchasing method is to be used Aggregation Example Aggregation of all purchases 30 Elementary 9 Middle Schools Schools 4 High Schools Administration Example: If each campus purchases 10 of the same book worth $25, the District as a whole has spent $10,750. Contracts, Agreements and Funds • Contracts / agreements can only be signed by the Superintendent or Chief Financial Officer • Signature from any other non-delegated District employee will render the agreement void • By signing an agreement on behalf of the District may create on obligation on the individual to pay • Types of Funds that must follow Purchasing Requirements: • General Fund • All Activity Funds • Federal Funds (must be more restrictive than federal guidelines) District’s Electronic Procurement System • eROC • Online registration for suppliers • Electronic (email) notification of bid opportunities • Electronic bidding • Electronic tabulation of bid responses • Information and Login at: http://schools.roundrockisd.org/purchasing/login.htm Purchasing Flow From start to finish – and what to do… RRISD Purchasing Process Flow Established Resources No bidding necessary… Process 1 Process 1: Warehouse Is the item / available through the RRISD Warehouse? • Overview • Many items are available through the Warehouse: • Bond Paper • Industrial Papers • Furniture • Fixtures • Maintenance Supplies • Housekeeping Supplies • Review inventory choices through District Software • Warehouse inventory is considered an asset of the District and should be used first Process 2 Process 2: District Contracts Is the item / service available through a RRISD Contract? • Overview • The Purchasing Office administers approximately 150 contracts • Both goods and services contracted • Majority are term contracts with multiple extension years • The end user locates the contract information, showing items or service to be procured, the awarded vendor, and the contract price Process 3 Process 3: Interlocal Contracts Is the item / service available through Interlocal Contract? • Overview • All interlocal contracts and purchases are handled through the District Purchasing Office • Purchasing Office will determine if the interlocal will be in the best interest of the District • An attempt should be made to get best pricing available Process 4 Process 4: Sole Source Is the item / service only available through sole source? • Overview • Defined by TEC 44.03(d), District Policies CH(Legal) • For a product or service to be considered sole source, it must be available from only one source, and meet one of the following descriptions: • an item for which competition is precluded due to the existence of a patent, copyright, secret process, or monopoly • a film, manuscript, or book • a utility service, including electricity, gas, or water, or • a captive replacement part or component for equipment • Only goods/services that meet the definition are acceptable • If over $10,000, letter of justification from department head required. Process 5 Process 5: Purchases under Is the item / $1,000 service less than $1,000? • Overview • Normally includes “spot” or one time purchase items • Procedure • Check the cumulating list of vendors based on dollar amount for current year to determine level of process (available in the future) • No attempt at competition is required • The end user is encouraged to secure competition through quotes Process 6 Process 6: Purchases Over Is the item / service more $1,000 to $5,000 than $1,000 but less than $5,000? • Overview • For larger, one time purchases • Procedure • The end user is encouraged to secure competition through quotes from a minimum of three (3) vendors, with a preferable inclusion of eROC suppliers • If quotes are secured, all documentation concerning choice of vendor is to be retained by the end user The Quotation Level Competition necessary… Process 7 Process 7: Purchases Over Is the item / service more $5,000 to $10,000 than $5,000 but less than $10,000? • Overview • Larger purchases that may include numerous purchases over time • Limited Term Contracts • Procedure • A minimum of 3 suppliers must be contacted – additional may be added if necessary • All quote documents (e.g. quotes, supporting spec sheets, etc.) concerning award to be retained by the end user and provided to their assigned buyer for the Purchasing file • End user must request a quote number from the Purchasing Office for inclusion with the purchaser requisition Process 7 Process 7: Purchases Over Is the item / service more $5,000 to $10,000 (cont.) than $5,000 but less than $10,000? RRISD Quote Summary Form http://www.roundrockisd.org/docs/rrisd_quote_summary_020109.xls Formal Solicitation Thresholds Sealed Competition necessary… Process 8 Process 8: Purchases Over Is the item / service more $10,000 to $25,000 than $10,000 but less than $25,000? • Overview • Used for term contracts or large one time delivery contracts • Requires competitive sealed bid process • May use best value if determine necessary • Can be done quickly (within a day or two) or over a longer period of time (e.g. week) • Procedure • Campus / Department determines need and provides required information (specifications, scope, quantity, etc.) • Purchasing Office to release, open and award Process 9 Process 9: Purchases Over Is the item / $25,000 service more than $25,000? • Overview • Includes term contracts, large one time delivery, highly complex purchases, construction contracts, etc. • Requires competitive sealed bid / proposal process • Use of best value required • Average 60 to 90 days (longer for complex procurements) • Procedure • Campus / Department determines need and provides required information (specifications, scope, quantity, etc.) • Purchasing Office to release, open and award Purchasing Methods The Choices of Solicitations… Purchasing Methods • Request for Quotes – “RFQ” • Can be used in Processes 3, 5, 6, and 7 • Informal process – does not require sealed bids • Request for Bids – “RFB” • Can be used in Processes 8 and 9 – restricted to the Purchasing Office only • Formal solicitation process (sealed bids) • Request for Proposals – “RFP” • Only Process 9 – restricted to the Purchasing Office only • Usually an elaborate eval. process with use of scoring criteria • Allows for negotiations as to final terms, pricing, etc. Purchasing Methods (cont.) • Request for Competitive Sealed Proposals – “RFCSP” • Only for Process 9 – restricted to the Purchasing Office only • Usually an elaborate eval process with use of scoring criteria • Allows for negotiations as to final terms, pricing, etc. • Request for Qualifications – “RFQ” • Only for Process 9 – restricted to the Purchasing Office only • Used for professional services only • Request for Information – “RFI” • No associated process since no purchase is made • Used for investigation or research • Helps in the development of specs or requirements Formal Solicitation Flow A partnership with the End User and Purchasing… Competitive Bidding Process - Formal Solicitation Purchasing Process Contract Period Development Approx. 60-90 days Publish in Local Need is Determined Contract Begins Newspaper Develop Supplier List (eROC) Pre-bid Conference if Contract Ends needed Develop Specifications Opening / Closing Determine Award Criteria Restart process if needed Solicitation Document Evaluation Process Finalized Release of the Award of Contract Solicitation Specifications / Scope of Service The backbone of the solicitation… Writing a Specification / Scope of Service • Specifications for Goods • Rely on the experts – good chance it’s not Purchasing – it’s you • Rely on available resources – do research • Be specific in what it is you need, not necessarily what you want – minimum requirements are the best place to start • Be cognizant of competition – don’t be exclusive • Write specs so that you can verify what you received is what you need • Specs left out of a solicitation cannot be used as a disqualifier for others • Don’t over / under do the spec Writing a Specification / Scope of Service • Services • All solicitations that include a service need to have some level of scope of work included in the specifications • A scope is normally a performance based procedure • The scope develops the focus of the objective and should include all necessary points of work to be performed • If the scope does not include a specific step, you may not be able to require the vendor to perform the step • If a schedule or certain limitations to access of the area to be worked in, the solicitation needs to address these thoroughly • If the scope is large in scale, it may require performance based measures District Contracts Established Resources… Contracts • Active Contracts Listing • A list of all the current contracts maintained by the Purchasing Office can be found at: http://www.roundrockisd.org/index.aspx?page=2457 • Once an item or service is under contract with a specific vendor, the District is to use the contracted vendor only • Only the items or services awarded to a particular supplier can be purchased through a contract • Line Item Awards • This describes a contract that was awarded on a line by line basis with a set price to a specific vendor Contracts (cont.) • Catalog Contracts • This describes a contract that may include multiple awarded vendors • Vendor may provide a discount for purchases from a published catalog • Usually will include all items within the vendor’s catalog with some exceptions • Prices subject to be changed based on changes / updates in the catalog Contracts (cont.) • “M” Contracts • “M” stands for multiple • Unique contracts that do not “close” until later in the fiscal year so that suppliers can submit a response when ready • Awards made upon completion of an evaluation • Examples of “M” Contracts • Classroom Instructional Materials • Retail General Merchandise • Retail Food Service Providers and Catering • Fundraisers • Extracurricular / Enrichment Programs • Special Events Services and Products Vendor Relations Developing the Partnership… Vendor Relations Communications End User Buyer Vendor • Solicitations • Major Contract Issues Vendor Relations • The District is in a partnership with the vendor community and both should perform their duties with professionalism and integrity and should maintain and perform based on any contractual agreement between both parties • All performance related issues – good or bad - should be documented for future reference at http://www.roundrockisd.org/index.aspx?page=3364 • Vendors deserve a right to know how they are doing - convey performance issues as they arise and communicate approperately Tools to Purchase With How to get it… Procurement Cards – “Pcard” • Not considered a purchasing process - only a payment method for convenience • Dollar limits are established based on position controls and will not be increased • All purchases made with a Pcard must follow all applicable purchasing procedures • For contract purchases, the card holder is to notate within the Pcard purchase sign-off in a comment box the contract number for future reference • Complete information on the use of the Pcard: http://www.roundrockisd.org/index.aspx?page=1526 Purchase Requisitions • The submission of a purchase requisition is not the start of the purchasing process, but the completion of it – it should not be created after the item or service has been received • Quote / Contract Number must be included in Comment Line • Documentation to support quotes over $5,000 must be provided to the Purchasing Office before req can be approved • Reqs must be submitted by deadlines indicated in the FIRM to be considered Purchase Requisitions (cont.) Quote / Contract Number in Comment Line Enter contract information here Follow-up to Purchase Finishing off the Process… Receiving Purchased Items • Always notate on the shipping receipt if any external damage is found on the outside of the container • Verify that what was called for in the purchase order is what was received • Check specifications within the PO / contract to ensure what was received meets the requirements • Notify the supplier immediately if any damage is found • Review the invoice for contract price, discounts if applicable, freight if allowed, etc., before sign off Receiving when Services are being performed • Be familiar with what the scope of service requires the vendor to perform • Verify that all aspects of the scope are performed before signing off on the work • When an invoice is received, review all aspects (contract price, discounts if applicable, freight if allowed, etc.) before sign off • Update software or paperwork upon completion of the order for payment processing Questions?
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