division of purchase and contract nc administrative code affecting procurement presented by sam...

Division of Purchase and Contract

NC Administrative Code Affecting Procurement

Presented by Sam Byassee, State Purchasing Officer Angie Dunaway, P&C Compliance Officer

April 24, 2012


NC Administrative Code, www.pandc.nc.gov/admcode


01 NCAC 05B .0208 Qualified Products List

Prequalification of brands/models by P&C

Only products on the QPL may be offered in response to a solicitation

Qualified Products List (QPL)


01 NCAC 05B .0301 Contracting Requirements

Must solicit competition

Must obtain competition on the state‘s solicitation form, including the state‘s terms and conditions

- Forms are located on the Division of Purchase and Contract (P&C) website, www.pandc.nc.gov/divforms

Required to post solicitation to the Interactive Purchasing System (IPS)

- Agencies over $10,000

- Universities over $25,000

Good verses Service process

Over the Agency delegation or University benchmark forward to P&C

More than $5,000 – not purchased from state term contract


01 NCAC 05B .0307 Error/Clarification

Obvious error

Suspected error

Offer substantially in accordance; but, intent not entirely clear

Particular fact not entirely clear

Ambiguities

When Can Clarification be Sought?

Clarification may be sought/considered; however, NO CHANGE in PRICE is Permitted.


01 NCAC 05B .0312 Lack of Competition

Reason shall be ascertained by the solicitation issuing agency

Reason shall be made part of the procurement file

Single Offer, or Single Acceptable Offer


01 NCAC 05B .0314 Solicitation Documents

eQuote (NC E-Procurement System)

Request for Quotation (RFQ)

Invitation for Bid (IFB)

Request for Proposal (RFP)

Request for Information (RFI) - no contract will be awarded

Types of Solicitation Documents, When to Use

More than $25,000

Required to use Invitation for Bid (IFB) or Request for Proposal (RFP)


01 NCAC 05B .0315 Division of Requirements

Shall not divide requirements to keep below Agency delegation or University benchmark

Dollar value refers to TOTAL cost, not to a single item or line item

.0315 Division of Requirements

.0701 Removal of Certain Items from General Construction

Construction/renovation project shall remove any items non-related to the actual construction/renovation of the building. I.e. carpet, office panel systems, furniture.

If Agency determines such type commodity purchases are best suited for inclusion in the construction/renovation project, agency shall justify the reason and make it part of the procurement file.


01 NCAC 05B .0317 Mandatory Conference / Site Visits

Conference/Site visit may be conducted

Solicitation canceled immediately following the conference/site visit

Solicitation issuing agency

- Investigate why only one vendor attended

- Determine if competition is available

If Only One Vendor Attends a Mandatory Conference/Site Visit

If Competition is Available

Seek competition – issue new solicitation, post to IPS

If Competition is Not Available

Handle as a waiver – waiver of competition justification letter, quote on state’s solicitation form


01 NCAC 05B .0503 Negotiation

Solicitation issued no satisfactory offer received, all offers rejected, and the solicitation issuing agency determines soliciting offers again would serve no purpose

Waiver of Competition –negotiate to obtain the best price, delivery, terms and conditions

When Can I Negotiate

What Can I Negotiate

Specifications / minor variations to scope

Price

Delivery

Terms and conditions


01 NCAC 05B .0503 Negotiation (continued)

Up to all known sources of supply capable of satisfying the requirement

How to Conduct a Negotiation

With Whom May You Negotiate

In writing, including the state’s terms and conditions (any offer or response that changes original solicitation)

If negotiations are conducted with only one source, or, only one source responds to the negotiations, the reason for lack of competition shall be documented in writing and made part of the procurement file

Negotiation tips/techniques


01 NCAC 05B .0905 Specifications

The agency who awarded the contract

- But, if over the Agency’s delegation or University benchmark, then the Division of Purchase and Contract or the Statewide IT Procurement Office

May only revise specifications (and any price change caused thereby)

Authority to Revise a Contract

Contract Revision Exceeds Delegation/Benchmark

If original contract was awarded by the agency (under its delegation/benchmark); however, if contract revision results in exceeding delegation/benchmark, prior written approval shall be obtained from the Division of Purchase and Contract


01 NCAC 05B .1101 Use – Term Contracts

Factors in determining whether to establish an agency specific contract:

- Volume

- Nature of the product

- Repetitiveness of use

- Relative stability of prices

- Transportation costs

The agency may establish an agency specific term contract if:

- The contract will only be used by their agency

- There is no statewide term contract for the commodity, printing, or service

- The expenditure over the term of the contract is under the Agency delegation or University benchmark

Agency Specific Term Contract


01 NCAC 05B .1401 Policy – Waiver of Competition01 NCAC 05B .1402 Approval and Documentation

If competition is waived – agency should negotiate the best price, delivery, terms and conditions (if under delegation/benchmark)

Waiver of competition justification required to be in procurement file

Quote required to be obtained on the state’s solicitation form, with the state’s terms and conditions

Waiver Overview

Waiver of Competition Justification On agency letterhead; include date, typed name, signature of requestor

Cite condition in 01 NCAC 05B .1401 upon which waiver is based

Indicate why the item is the ONLY one that meets requirements (brand specific)

Indicate why the vendor is the ONLY vendor that can provide the required item (vendor specific)

DO NOT merely recite the relevant category


01 NCAC 05B .1505 Funds from Different Sources

Irrespective of funding source – special, federal, local, gifts, bequests, receipts, fees, or State appropriated

This means:

- Competition shall be sought when more than $5,000; and the state’s solicitation form shall be used, including the state’s terms and conditions (01 NCAC 05B .0301 Contracting Requirements)

- Advertise solicitation on IPS – agencies $10,000; universities $25,000 (01 NCAC 05B .0301(2)(b) Contracting Requirements)

- Waiver of Competition justification (01 NCAC 05B .1400 Waiver of Competition)

Article 3 of G.S. 143 and P&C Rules Apply


01 NCAC 05B .1506 Conditional Grants

When grant, donation or special discount is predicated upon making a purchase from the grantor

- Shall be explained in writing

- Shall have prior approval of the State Purchasing Officer

Purchase from Grantor

Purchase from Specific Source

When donation from a private source is predicated upon making the purchase from a specific source other than the grantor

- State Purchasing Officer approval is NOT required


01 NCAC 05B .1508 Purchases for Across the Counter Resale

“Across the counter” resale items are not forwarded to P&C; even if the total acquisition cost exceeds the agencies delegation/benchmark

The agency is responsible for adhering to the Administrative Code, unless a specific exemption exists in the General Statutes

- Purchase from state term contract

- Seek competition (if not purchased from state term contract) when more than $5,000; use state’s solicitation form, including the state’s terms and conditions

- Advertise solicitation on IPS – agencies $10,000; universities $25,000

- Waiver of competition documentation (if competition is not sought)

Across the Counter Resale – Bookstores


01 NCAC 05B .1513 Cooperative Purchasing

The Government Contract Reference Book1 defines cooperative purchasing as two or more governments purchasing under the same contract.

The ABA Model Procurement Code for State and Local Governments2 defines cooperative purchasing as, “ . . . procurements conducted by, or on behalf of, one or more Public Procurement Units . . .”

G.S. 143-129(e)(3) – “[A] competitive bidding group purchasing program … is a formally organized program that offers competitively obtained purchasing services at discount prices to two or more public agencies.”

1 Ralph C. Nash Jr., Steven L. Schooner, Karen R. O’Brien. Published 1998 by George Washington University

2 American Bar Association, 2000, pg 79

What is Cooperative Purchasing


01 NCAC 05B .1513 Cooperative Purchasing (continued)

When the agency is a participant in an authorized cooperative project with another governmental activity, or with a charitable non-profit organization.

- To acquire goods and services necessary to the project (Rare)

“If the interest of the State would be served thereby.” G.S. 143-49(17)

- S.L. 2011-338

In what is the State interested?

- Competition in contracting – (Was co-op contract competed when entered?)

- Low prices – (Is price offered reasonably competitive compared to alternative sources?)

When May an Agency Participate in Cooperative Purchasing


01 NCAC 05B .1513 Cooperative Purchasing (continued)

Do you have the authority to enter into the contract (SPO approval)

Is there a statewide term contract for the items

Was the contract competitively bid

Is the price reasonable

Terms and conditions must be carefully reviewed (does contract require vendor to accept State’s Ts & Cs?)

Things to Consider Before Entering into a Cooperative Purchasing Agreement


01 NCAC 05B .1523 Procurement Cards

No other charge cards that obligate payment by the agency or the State shall be used.

Requests for exceptions to this rule shall be submitted in writing to the State Purchasing Officer.

- Very high justification standard

- Reduces rebate offered through p-Card program

- Reduces spend visibility

- One-off cards difficult to administer and control


01 NCAC 05B .1601 Exemptions

The items listed in this rule are exempt from forwarding to P&C (even if it exceeds the agencies delegation/benchmark); however, this does NOT mean the agency is exempt from following Article 3 of G.S. 143 and P&C Rules.

This means:

- Competition shall be sought when more than $5,000; and the state’s solicitation form shall be used, including the state’s terms and conditions (01 NCAC 05B .0301 Contracting Requirements)

- Advertise solicitation on IPS – agencies $10,000; universities $25,000 (01 NCAC 05B .0301(2)(b) Contracting Requirements)

- Waiver of Competition justification (01 NCAC 05B .1400 Waiver of Competition)

Note: G.S. 143-53(a)(5) requires all waivers and sole source requests above $10,000 must be approved by the SPO.

Not Exempt from Article 3 of G.S. 143 and P&C Rules


01 NCAC 05B .1601 Exemptions (continued)

Item 11 exemption, “Services provided directly by an agency of the State, federal or local government, or their employees when performing the service as a part of their normal governmental function.”

When the “S” is capitalized in State it refers to North Carolina State agencies. If does not mean other states.

Except for multi-state cooperative purchasing agreements or some other unique service that only that particular state provides, it is highly unlikely that an agency of another state will, as part of its normal governmental function, directly provide services to an agency in another state.


01 NCAC 05B .1602 Emergencies

Emergency or pressing need, as defined by rule, agency handles in accordance with Article 3 of G.S. 143 and P&C Rules

- Competition shall be sought when more than $5,000 (unless circumstances prevent)

- State’s solicitation form shall be used, including the state’s terms and conditions

- If circumstances do not allow seeking competition, document the procurement file; negotiate best price, delivery, terms and conditions

Under Delegation/Benchmark

Exceeds Delegation/Benchmark

Prior verbal approval from P&C required (if time permits)

Written explanation shall be provided to P&C, who reports this information to the Board of Award as a matter of record


01 NCAC 05D .0100 Consultants

Service contract – A contract in which the completion of work or tasks is the main purpose (even if tangible “deliverables” are required for successful performance).

Consulting contract – A contract for “work or task(s) performed by State employees or independent contractors possessing specialized knowledge, experience, expertise and professional qualifications to investigate assigned problems or projects and to provide counsel, review, analysis or advice.”

Personal services contract – A contract for the services of a particular individual or business entity for a period of time, in which the completion of specific tasks or duties is generally secondary to the performance of services by the contracting party.


01 NCAC 05B .1518 Board of Award

Purchase, lease or lease/purchase of commodities/printing that exceeds the agency’s delegation/benchmark

Reporting of emergency or pressing need purchases over the agency’s delegation/benchmark

What Goes to the Board of Award

What Does NOT Go to the Board of Award

Services


01 NCAC 05B .1518 Board of Award (continued)

Typically every Thursday morning

When Does the Board of Award Meet

What Are the Board‘s Recommendations

Award, cancel, approve, negotiate, require additional information – present again the following week, etc.

What Happens if the Board Does Not Meet In cases of an emergency, or in the event the Board does not meet, the

Secretary of the Department of Administration has the authority to award contracts.

In such cases, contracts awarded without Board review shall be reported at the next Board meeting as a matter of record.


State of North Carolina

Department of Administration


116 W Jones Street, Raleigh NC 27603

www.pandc.nc.govwww.pandc.nc.gov

THANK YOU for attending the conference!

division of purchase and contract nc administrative code affecting procurement presented by sam...

Documents

division of purchase

division of requirements

contract pc website

state term contract

agency reason

proposal rfp slide

single acceptable offer

states solicitation