procurement 101 monica wilkes naspo honorary member cppo, cppb tom blaine senior research associate,...
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Procurement 101 Monica Wilkes
NASPO Honorary MemberCPPO, CPPB
Tom BlaineSenior Research Associate, Public Procurement Research CenterNASPO Honorary MemberCPPO, FCPM, FCPA
Doing Business with State Government
• Why do business with government₋ Open Competitive Opportunities₋ Fair and Reasonable Treatment₋ Reliable Customer₋ Good Payment Practices₋ Transparency- Ethical, Efficient, and Effective public procurement
Types of Purchasing Centralized contracts – generally statewide contractsAgency contracts - delegations granted to agencies to
purchase under the same procedures as Central Purchasing – dollar value, time frame, specific need
Discretionary - generally under a certain dollar threshold without the need for formal competition
Sole source - item is unique and possesses specific characteristics that can be filled by only one source - requires written justification from using agency
Single source - products or services available from two or more sources of supply but agency chooses a single source based on the best interests of the state. (e.g. – equipment maintenance required from a certain vendor to maintain the warranty)
Contract TypesPiggyback contracts – One or more organizations bid their
requirements which includes language that allows the ability for others to participate in the contract.
Cooperative contracts – Two or more governmental entities combine their requirements and solicit bids for their requirements. Commonly used by government entities: federal, state, county, local government.
Emergency contracts - used in an urgent and unexpected situation where health and public safety or the conservation of public resources is at risk.
Note: Other state agencies may have authority to perform centralized procurement functions (e.g. construction contracts)
Sole and Single Source
Documentation required• Is product or service unique and easily established as
one of a kind?• Can program requirements be modified so that
competitive products or services may be used?• Is product available from only one source and not
merchandised through wholesalers, jobbers or retailers?
• Must items be interchangeable or compatible with substantial in-place inventory?
Cooperative Agreement Benefits
Aggregate Volume • Reduces administrative expenses • Reduces advertisement (solicitation) &
development acquisition time• Increased competition• Reduces product cost
Set Aside/Preference Programs
• Correctional Facilities• Blind, Disabled Workshops• Certified or non-certified Minority or Women
Owned Business• Small Business• Veteran Business• Instate Preference – (Be aware of reciprocal
legislation)
Types of Bids• Request for Quotation (RFQ) • Invitation for Bid (IFB)• Multi-Step Competitive Sealed Bid, definite
specs, low dollar• Request for Proposal (RFP)• Request for Information (RFI) to survey the
market
IFB vs. RFP
• Invitation for Bid (IFB): Used in the procurement of commodities and awarded to the responsive and responsible bidder on the basis of lowest price; and
• Request for Proposals (RFP): Used for procurements when factors in addition to cost are weighed. The contract is awarded to the responsive and responsible proposer offeringthe best value.
Extension of Use of Contracts
Understand the breadth and depth of contract users or whether they are exempt from centralized procurement
• State authorities and public benefit corporations;• Local governments and municipalities;• Public and private elementary and secondary
schools; universities and colleges• Volunteer ambulance and fire companies;• Libraries; and• Other authorized users
Types of Contracts
• Commodities• Technology• Services• Telecommunications• Construction• Consulting Services• Professional Services
Pricing Methodologies
• Firm Fixed Price• Percentage Discount with or without price
adjustments due to changing price lists• Percentage Upcharge (cost plus)• Firm Price with pre-established price
adjustment points (up or down) based on changing indexes or price lists (e.g. NYMEX)
• Labor and materials
Contract Types• Term Contracts - establishes a “source of supply” for the
purchase of goods and/or services made over a specified period of time.– Usually one or more years, dependent on external factors
(commodity, market conditions, compatibility) – Multi-year contracts may provide for yearly extension options – Estimated purchase requirements - based on prior purchases, agency
data, survey, vendor reports, eprocurement systems– No purchase guarantees – estimated quantities
– Definite quantity for a definite period– Indefinite quantity for a definite period
• Other equivalent terms are “Open-ended (estimated quantity) Contracts, Blanket Contracts, Requirements Contracts, or Purchase Agreements.”
Agency Contracts
Agency Term Contracts - established for individual agencies which have a specific need for a product or service which may not be applicable to other state agencies.
• Golf Equip (Parks Department)• Uniforms (Correction)• Guard Rails (DOT)• Advertising/Marketing
Methods of Awarding Term Contracts
• Single Award• Groups of Line Items (By Lot)• Award by Line Item to multiple contractors• Percentage Discount from Catalog or Price List• Geographic Location• Multiple Awards
Other Contracting Methodologies
• Strategic Sourcing• Reverse Auctions• Cross-organization Projects• E-procurement Strategies • GSA Contracts – ability to purchase from GSA
may require statutory authority
Public Advertisements
Bid notifications generally required by law• Newspapers• State publications• Online notifications• Social media• Paid or free systems
Program Funding Models
• Appropriation• Self-funding using administrative fees that
range between .5% to 2% (commonly 1%) may be added to contract prices to support procurement programs
• Combination
Contract Participation• Subcontractors, authorized resellers, dealers,
distributors, or agents. • Promote and provide opportunities for small,
minority, or women-owned businesses.• Contact the manufacturer or contractor directly for
participation opportunities.• Sales through an authorized contract reseller, dealer,
distributor, or agent must be made in compliance with the contract’s terms and conditions, and are limited to the commodities and services approved under the contract.
Responsive A bidder whose bid meets or exceeds administrative
requirements, technical specifications, and contractual terms and conditions. • Specifications and terms and conditions• Signing bid and any other documents• Bonding and/or insurance requirements• Delivery time • License requirements - Current and Active• Product testing (meeting specifications)• Samples
Responsible
Vendor responsibility (Acronym FLIP)• Financial and organizational capacity;• Legal authority to do business with the state;• Integrity of the
owners/officers/principals/members and contract managers; and
• Past performance of the bidder on prior government contracts
Become a Successful Bidder• Read entire bid/proposal;• Review submittal for accuracy and completeness; • Submit a timely bid (one minute late, bid may be rejected);• Be responsive to all bid requirements;• Submitting a signed bid package complete with all the
mandatory forms;• Pricing the bid competitively;• Demonstrating vendor responsiveness and responsibility; • Submit questions for clarification. NOTE: Inquiries generally
are required in writing;• If applicable, attend pre-bid and/or post award conferences
Evaluation of Bids or Proposals
• Don’t assume proposals will be negotiated• Ask questions about process prior to bid opening• Make use of “inquiries” format • Avoid protests by fully understanding
requirements; must versus should specifications• RFP evaluations are not public until award
announcement• If unsuccessful, request a debriefing
Tips for Winning Contracts
• Use NASPO website as a resource• Register with state(s) – Check out their
websites• Visit State procurement officer(s)• Meet with state agencies(s)• Daily review of solicitations• Active in user groups - trade shows
Debriefing
• A debriefing will detail the shortcomings of a bid submission
• Unsuccessful businesses should request a debriefing
• During a debriefing, businesses should take notes and ask questions for future improvement opportunities
• Review winning competitor’s bid or proposal
Marketing
• Know your buyer• Understand the procurement laws, and
policies that pertain to the procurements• Determine timing of next requirement• Market your products or services, including
green products • Market your firm’s qualification of small,
minority or woman owned business• BE PROACTIVE AND INFORMED
Technical AssistanceFree technical assistance is available
• Procurement Technical Assistance Centers (PTACs), funded by the US Department of Defense and state and local entities• Help businesses seeking to compete
successfully in federal, state and local government contracting