1

Integrated Service Center (ISC) Webcast

PROCUREMENT: Best Practices for Purchasing

Goods & Services

September, 2009

2

Agenda

1. Standard Operating Procedures

2. Contracted Purchases

3. Non-Contracted Purchases

4. Small Item Payment Process (SIPP)

5. Procurement Card (P-Card)

6. Certification of Delivery

7. Travel Reimbursement (TRAC)

8. Inventory Guidelines

9. Deadlines and Reminders

3

Standard Operating Procedures (SOP)

The Division of Financial Operations (DFO) maintains the following website:

http://dfoapps.nycenet.edu/SOP/Default.aspx

Click on SOP Chapters for Detailed Procedures

•SOP includes rules and regulations governing OTPS expenditures; guidelines are designed to yield maximum value for each dollar spent.

•All equipment, supplies, and services purchased with NYCDOE funds must serve the DOE’s educational and/or administrative programs while complying with legal bidding and administrative contractual requirements.

4

Summarized Highlights of the SOP

•There must be sufficient funds in the spending plan in order to procure goods or services.

•Under no circumstances should goods be ordered or services begin prior to generating a fully approved purchase order.

•Schools must have an initiator (Secretary or School Aide) and an approver (Principal, APO or School Business Manager) to process purchase orders.

Don’t Forget: An Initiator CANNOT be an Approver!

5

Summarized Highlights of the SOP (continued)

• Schools should purchase contracted goods and services from an established DOE contracted vendor.

• All purchases from non-contracted vendors must be in strict compliance with open competitive bidding rules.

• Sole Source is not a determination of the vendor. Sole Source must be researched by the School Purchasing Liaison to ascertain that there is no equivalent product that can be provided by another vendor.

6

Summarized Highlights of the SOP (continued)

• All goods and services must be delivered by June 30th. Back orders are not allowable. Any goods received and accepted after June 30th will be charged against the school’s next fiscal year budget.

• Schools must maintain original documentation to support all purchases; i.e. original signed and dated purchase order, packing slip. If it is a non-contracted order you must retain three (3) bids or approved sole source letters.

7

FAMIS Portal

http://schools.nyc.gov/offices/DCP/MostPopularClicks/launch.html

8

Contracted Purchase via FAMIS Portal

• E-Catalog is the on-line system used to place orders with contracted vendors. Use the E-Catalog to order:a. Textbooks and trade booksb. Computer Software (instructional and administrative) c. Audio Visual Media (videos, DVDs, audio CDs and cassettes)d. Supplies and Instructional Materialse. Wireless Services including new phones, phone plans, and

replacement equipmentf. Coach Busesg. Internal Services (Professional Development provided by the

Department of Education)h. Leadership Academyi. Computer Hardware & Consumer Electronics (computers &

equipment)

9

FAMIS Demonstration

Click on “Purchasing”

10

FAMIS Demonstration – continue

Click on Contracted

11

FAMIS Demonstration – continue

Click on ContractedClick on E-Catalog

12

FAMIS Demonstration – New category

Click on Computer Hardware & Consumer Electronics

13

FAMIS Demonstration – to Search items

Click here to do search

14

FAMIS Demonstration – Key Search Item Description

15

Other Contracted Purchasing Options•Non-List:

•Create a purchase order with a contracted vendor for contracted items not available in the E-Catalog. This includes used textbooks, sheet music, magazine subscriptions, libraries, listing applications and more.

•Professional Services:

•Create a purchase order for contracted professional services (i.e. professional development, curriculum development, evaluation services, student support services, counseling services).

•Listing Applications:

•For the designated procurements of published or copyrighted materials, artistic performance of specific artists or groups, payment of admission fees to cultural institutions and other such programs.

16

Contracted vs. Non-Contracted

Contracted

Non-Contracted•Must submit bids prior to paymentMust submit bids prior to payment•Pay for deliveryPay for delivery•Delivery into schools additional chargeDelivery into schools additional charge•Goods are not insuredGoods are not insured•Additional paperworkAdditional paperwork•Delivery time not guaranteedDelivery time not guaranteed

•Free DeliveryFree Delivery•Delivery into the schoolDelivery into the school•Product is insuredProduct is insured•Damaged items are replacedDamaged items are replaced•Less paperworkLess paperwork

17

Shop DOE (ShopDOE.com)

•ShopDOE.com allows users to find items on the E-Catalog

•You can enter the site by entering your business or personal e-mail address.

•Features and Benefits:

- Ability to sort by Item #, Description and Price

- Vendor Contact Information

- Create an E-Shopping cart by clicking on ‘Add to Cart’ on the search screen

- Print the results of any selected search criteria

- View items in your E-Shopping Cart by clicking on “View Cart” or “Proceed to Checkout”.

- Print a list of the items in your E-shopping cart.

18

https://dfoforms.nycenet.edu/ecatalog/Logon.aspx

19

Non-Contracted Purchases

• Goods or Services obtained from a Vendor without a DOE Contract are non-contracted purchases

• Creation of a Purchase Order for a non-contracted vendor is done through: The Bidding Process Sole Source Open Market Agreements Exceptions

• Whenever possible, goods and services should be obtained by DOE contracted vendors

20

Guidelines & Thresholds for Non-Contracted Purchases: Commodities

•No bids are required up to $250

•Three telephone bids are required for purchases greater than $250

•Three written bids are required for purchases $5,001 to $15,000

•An Open Market Agreement is required for purchases $15,001 to $100,000

•For purchases from $100,001 the school or ISC must request DCP to assist in the preparation and execution of a Request for Bid (RFB) or

•For Sole Source or Exception over $100,001 the ISC, on behalf of the school, must submit an exception to the Committee on Contracts

For required bid forms see: http://schools.nyc.gov/Offices/DFO/MostPopularClicks/SOPForms.htm

21

Guidelines & Thresholds for Non-Contracted Purchases:

Professional Services

•For services less than $25,000 Schools must obtain quotes from three (3) vendors

•For services from $25,001 to $100,000, a request must be made to the Division of Contracts & Purchasing (DCP) so that DCP can conduct either an Informal Solicitation Request (ISR,) Sole Source or Exception to Bid

•For services exceeding $100,000, the ISC must request for DCP to assist in the preparation & execution of a Request for Proposal (RFP,) Sole Source or Exception to Bid, after which the ISC must submit an Exception to the Committee on Contracts

22

Telephone Bid Summary

FormUsed for

non-contracted purchases$250 - $5,000

http://schools.nyc.gov/NR/rdonlyres/B60203FD-994F-4F01-8429-08E3B9C7FDF2/0/otpsxA.pdf

23

Submitted along with the written bids from the vendors

http://schools.nyc.gov/NR/rdonlyres/3C6228F2-51D8-4BF5-BFF9-

65209A809E27/0/WrittenBidSummaryForm.pdf

Written Bid Summary Form

Used for non-contracted purchases

$5001 - $15,000

24

FAMIS Demonstration – Non-Contracted 3-Bids

NEW

25

FAMIS Demonstration – Non-Contracted 3-Bids (NEW)

26

Establishing a Vendor as a Sole Source

•A vendor, who for very specific reasons, is identified as the only feasible source for obtaining certain services or items and therefore may be exempt from the competitive bidding process.

•Evidence that no other service provider offers substantially equivalent or similar benefits & the cost of services is reasonable.

•Documented evidence that there is no other possibility of competition for the procurement of the item.

•Use of copyrighted materials, organizational membership fees, postage, tickets, administrative fees, conference by non-NYC DOE organizations.

•Sole Source is not a determination of the vendor. Sole Source must be researched by the DOE/ISC Staff to ascertain that there is no equivalent product that can be provided by a contracted vendor.

27

Exceptions to the Bidding Process•On rare occasions, the Department of Contracts and Purchasing (DCP) will grant an exception to the bidding process

•To determine if your school’s special circumstances qualify for the exception, the school must provide a written justification which includes:

• An explanation of why the services cannot be economically procured through the competitive process

• The purpose and nature of the services including which specific Chancellor’s Goals or Initiatives will be addressed

• the period time the request covers• A detailed cost breakdown of the services and an explanation of

why the prices are fair & reasonable• Assurance that the vendor has given “best pricing” by

specifying prices paid elsewhere and/or cost of alternatives

•When a vendor is named in a competitive grant and is a key component of receiving the grant award, further solicitation is not necessary

28

The FAMIS Portal Approval Path for Non-Contracted Purchases

•$0 - $5,000 requires Principal Approval only

•$5,000 - $25,000 requires Principal and ISC Approval• School must provide all documentation to the ISC before the

document will be approved in the FAMIS Portal

•$25,000 - $100,000 requires approval of the Executive Director, Division of Contracts and Purchasing (DCP)

•$100,000 and above requires review and approval by Committee on Contracts

29

Reminders for Non-Contracted Purchases

•Not all registered vendors have a contract with the DOE (a “vendor ID” is not the same as a contract number!)

•All purchases from non-contracted vendors must be in strict compliance with open competitive bidding rules

•It is inappropriate and a violation of standard operating procedures for vendors to obtain bids from competing vendors

•It is inappropriate and a violation of standard operating procedures to split orders with a single vendor or among vendors to avoid bidding requirements

•Use of non-contracted vendors is strongly discouraged unless extenuating or sole source circumstances exist

•If you have a valid sole source or exception, you should allow three months for processing in order to fulfill all requirements and encumber the order in advance of your planned start date

A Purchase Order must be created before goods or services are received

30

SIPP: The Small Item Payment Process

Typical Uses for SIPP

•Reimbursement to employees for approved car fare

•Payment of stipends to the SLT (School Leadership Team members)

•Payment of stipends to Parents or Students

•Payment for food & refreshment expenses at meetings when the vendors do not accept a DOE Procurement Card

Important to Remember

•With few exceptions, these expenditures must be less than $500.

•Purchases exceeding $250 require adherence to SOP Guidelines that cover bidding

31

SIPP: The Small Item Payment ProcessGeneral Guidelines

•SIPP is generally used for SLT Stipends, postage, tuition reimbursement, small emergency purchases

•Schools are authorized to enter payments up to $2,500

•Payments of $500 or less will be posted directly to FAMIS at the site

•Payments from $501 to $2,500 will be electronically sent to the ISC for approval

•A purchase up to $250 does not require bids

•From $250.01 to $500 bids are required for each transaction• ALL supporting documentation must be retained at the school level• Copies of supporting documentation must be forward to your ISC for

approval

•Bill Splitting is prohibited

32

SIPP: The Small Item Payment Process

What you can’t use SIPP for:

• Reimbursement should not be paid to the general school fund

•New York Sales tax should not be paid and is not reimbursed

•Consultants (object codes 685 & 689) can not be paid with a SIPP

33

Tax Exempt Form

http://schools.nyc.gov/NR/rdonlyres/66D28ED7-7F53-4911-9EB0-

ACDEFC966CA9/0/otpsxb.pdf

34

What A Recipient Needs to Receive Reimbursement via SIPP

•Vendors receiving payments that do not exceed $2,500 need a valid FAMIS vendor number. This means the vendor must be activated in the FAMIS VENDOR FILE before a payment request can be processed.

•Vendors NOT listed in the FAMIS Vendor File, must submit a W-9 form to the Division of Contracts and Purchasing (DCP).

•This form can now be completed and submitted online at the following location:http://www.nycboe.net/dfop/tracker/w9/

•Employees require a valid 7-digit Employee Reference Number (a look-up by name is provided) allowing for the name and address of the payee to be retrieved from the DOE Employee table

•For Parents or Students you must fill in the information requested

35

Principals Only: The Electronic Approval Process

• For reimbursements of $500 or less: Before payment is posted by the Principal, an electronic approval request will be generated and automatically sent to the respective Superintendent for approval.

• For reimbursements above $500: Before payment is posted by the ISC, an electronic approval request will be generated and automatically sent to the respective Superintendent for approval.

• The FAMIS approval screen uses color indicators to display the status of a Principal’s SIPP and will only allow payment to be posted upon approval.

Yellow: indicates Pending Superintendent’s approval

Red: indicates Rejected

Green: indicates approved & sent for FAMIS processing

• The appropriate action taken by the Superintendent will automatically be emailed to the Principal, and populated in the FAMIS/Portal approval screen.

36

Procurement Card (P-Card)

•P-Cards are used most commonly for incidental school supplies, postage, event admissions and food

•P-Cards are useful for emergency purchases, within guidelines

•Most find P-Cards easier than processing a SIPP

•The transactional cost to the DOE is far less when you use P-Cards than when you process a SIPP

37

Important Things to Know about Creating and Using a P-Card

•The maximum balance permitted on a P-Card is $15,000

•No single transaction can exceed $2,500

•A P-Card is subject to the same SOP guidelines as other purchases, including the need for telephone bids for purchases exceeding $250

•Creation of, as well as increases and decreases to your P-Card are processed through the FAMIS Portal

•When planning to increase your P-Card, keep in mind that purchases take up to two weeks to post; this means that a recent purchase may not be deducted from your available balance, and the increase will be limited

38

Documenting and Certifying P-Card Transactions

•All original receipts and required paperwork must be kept on file at the school

•A P-Card Usage Log is required

•DFO makes transaction activity available through an Expense Reporting and Certification Screen

•The cardholder or authorized designees are required to indicate the appropriate expense type (e.g., supplies, parking & postage) for each transaction

• This is necessary because P-Card encumbrances are made to a single object code

•The cardholder’s certification of expenses becomes an authorization and approval to realign the object code where the expense was made, which is required of the DOE by the City Comptroller

39

P-Card Usage Log

After every purchase, complete a usage log like the one at left in order to keep track of the P-Card balance.

The sample log can be found by following this URL:

http://schools.nyc.gov/NR/rdonlyres/7C246CAD-B65D-445B-8D33-377F485A2135/0/otpsxK.pdf

40

Expense Reporting and Certification

Procurement Card Expense Reporting and Certification can be located through the Division of Financial Operations page (DFO) http://schools.nyc.gov/Offices/DFO/News/PCard+Expense+Reporting+Certification.htm

41

Certification of Delivery•Certification of Delivery is the process by which schools must declare receipt of goods or services

•Immediately upon receipt of the goods or services ordered, verify consistency with original order

•If all goods or services have been delivered satisfactorily, a copy of the order is to be signed and dated by a school official to certify delivery

> To establish internal controls, this person should be different from the person who initiated or prepared the order

•Retain the record of certification of delivery, along with all packing slips and other vendor documents included in the package, on file at the school attached to the original Purchase Order

•Certify On-Line in the FAMIS Portal

All goods and services must be received by June 30th!Anything received after June 30th is considered a purchase in the following

fiscal year, and must be paid with funds from that fiscal year.

42

Guide to On-Line Certification

http://schools.nyc.gov/NR/rdonlyres/0BA93FB1-8859-422B9093344964B31B59/0/userguidecertification.pdf

43

TRAC: Travel Reimbursement Approval Certification

•TRAC is the electronic form now used to:Receive Reimbursement for Local TravelRequest Approval for Out of Town TravelReceive Reimbursement for Out of Town Travel

•TRAC can be accessed via FAMIS PortalSelect “Miscellaneous”Then select “TRAC”

•TRAC can also be accessed via this link:

https://dfoforms.nycenet.edu/trac

44

TRAC On-Line Guide

Can be accessed by following this link:

http://schools.nyc.gov/NR/rdonlyres/D4315AC3-389C-4A48-80B2A780E6B5B3B5/0/TRACGuide.pdf

45

ISC Professional Development page

http://www.learningtimes.net/iscwebcasts

46

Inventory Guidelines

• Each Principal is responsible for maintaining and updating the inventory records for his or her school.

• All equipment, textbooks, computer software and educational and administrative supplies stored in large quantities, should be inventoried regardless of funding source.

•DELL maintains the inventory of all computer equipment in our schools. A copy of the inventory can be obtained by calling 718-935-4444.

• The annual updated inventory of equipment and large quantities of unused supplies in storage must be completed on an annual basis no later than April 15th.

47

• Textbooks – For inventory purposes the term is used for all published and copyrighted materials of an educational/instructional nature; it does NOT include library books and books used for administrative, office, or reference use.

• Equipment - Items which can be reused or which maintain their character through use, and usually cost at least $5000. Other such items, which may cost under $5,000 such as typewriters, video cameras, TV sets, tape recorders, science lab equipment, musical instruments, digital cameras, DVD players, etc. must also be inventoried.

• Supplies - A supply item is any article which meets one or more of the following conditions: (1) is consumed in use or loses its identity through incorporation into a different unit or substance; (2) loses its shape or appearance with use; and (3) is expendable i.e., it is less expensive to replace than to repair.

Items for Physical Inventory

48

Annual Inventory Statement

This form must be filed no later than 30 days after

the physical inventory has been taken.

http://dfoapps.nycenet.edu/SOP/Default.aspx?c=1114

Select “Inventory” and then “Annual Inventory

Statement”

49

DEADLINES & EXPENDITURE PLANActionItem

    Anticipated DOE Deadline

NYS Funds: Textbooks, Library, Hardware, Software ASAP

  (Prior to Thanksgiving)

Budget modifications deadline mid-March

FAMIS Purchasing – Furniture, Computer Equipment and Computer Security Devices

 late March

FAMIS Purchasing –

All Other Good & Services, All Fund Sources

 mid-April

Annual Physical Inventory April 15th

Balance on P-card = 0 June 30th

Delivery of Goods & Services June 30th

Enter SIPP (Imprest Funds) June 30th

Certify delivery on-line Upon receipt –ongoing

50

Questions from the Live Audience

51

If you need assistance with any procurement issue, please contact your

ISC Officer ,

ISC Representative

Or

Your CFN Support Staff