Purchasing Policies and Procedures

Understand the procedures established for purchasing goods and services.

Understand the dollar amount thresholds and what procedures are required.

Understand the process for competitive bidding as it relates to goods and services.

Understand the process for renewing contracts (renewable or expired).

Understand the difference between a State Term Contract, Agency Specific Contract, Sole Source or Emergency Requests.

2

It is the general policy of the Department of Administration to solicit competitive prices for commodities and services.

The Office of Fiscal Management - Purchasing Office has delegated authority to directly:

Buy goods covered by a State Term Contract (STC).

Buy goods and services not covered by a STC which cost less than $25,000 with the support of correct documentation.

3

NC General Statutes

Administrative Code

Agency Purchasing Manual

Tell us:

WHAT

HOW

4

ETHICS Ethics and ethical practices are a major concern in the realm of public purchasing today. While laws and rules mesh to provide a mechanism for public purchasing, only people can make it work.

INTEGRITY Doing what is right when no one is watching. Fairness and impartiality in all phases of the process is an essential ingredient in public purchasing. Dealings with vendors and peers must be open, honest and objective.

5

Commodity – Any equipment, materials, or supplies, also referred to as goods or items. It does not include services or printing.

DOA Purchasing – Office of Fiscal Management - Purchasing Office

E-Quote – Used to seek competitive quotes through E-Procurement

Invitation For Bids (IFB) – A formal solicitation document, used to seek competition for easily defined goods and simple services. This document or the RFP is required to be used for competitive procurements over $10,000.

Request For Proposals (RFP) - A formal solicitation document typically used for seeking competition and obtaining offers for more complex services or a combination of goods and services used for competitive procurements over $10,000. 6

Request For Quotes (RFQ): A solicitation document normally used for non-advertised competitive procurements from $5,000.01 - $10,000 (may include e-Quote).

Service – Work performed (e.g.- repairs, maintenance, installation, janitorial, etc.)

Sole Source - A procurement method utilized when procuring goods or services where one or more of the “waiver of competition” defined under 01 NCAC 05B.1401 and 09 NCAC 06B.0901 policies are met. This method requires justification documentation for the file.

Statewide Term Contract - A contract handled by Purchase and Contract, or Statewide IT Procurement Office for all agencies, unless exempted by statute, rule or special term and conditions specific to that contract.

7

Buying Entities: EG - Commodities ES – Services

Purchasing Tip: Requisitioners in e-procurement should make sure to enter the appropriate commodity code when adding a non-catalog line item in E-Procurement. Select a non “900” commodity code when purchasing goods, and select a “900” commodity code when purchasing services. If a requisition contains both goods and services, these line items should be separated and whichever line is more in dollar amount determines the commodity code, for example:

Materials to Repair Boiler #1 TubesCommodity Code - 820-14 - Boiler Parts and Accessories (Not Otherwise Listed)$4,674.00

Labor to Repair Boiler #1 TubesCommodity Code - 941-25 - Boiler Maintenance and Repair, Steam (Including

Testing Services – See 941-56 for Hydrostatic Testing)$1,141.00

The buying entity in this example would be “EG” because the materials cost more than the labor.

8

Are established and administered by the Purchase and Contract Division (P&C). Result from bids advertised by P&C Is for frequently used goods Term of contract range from 12 months to three (3) years Legally binding agreement between the State and the

vendor(s) for established prices for a specific period of time Some STC require a minimum amount of purchase to use. ▪ Example: STC 645A Paper (Office Use) and Envelopes –

minimum of $200 for any single order. Under $200 can purchase from another source.▪ Note: provision shall not be used by an agency to

circumvent the intent of the contract.

9

Division Responsibility Identify need for products/services. Verify if the product is on a State Term Contract (STC). Verify if item is available from NC Correction Enterprises. If product is not available from STC or Corrections, refer

to DOA Fiscal Purchasing Policies (Pages 046-050). (G.S. 148-70)

Division enters requisition through E-Procurement System.

Requisitions are routed through the approval flow within E-Procurement.

Reviews and receives goods in E-Procurement Approves and submits invoice to Accounts Payable. 10

Office of Fiscal Management - Purchasing Office Responsibility Budget Officers review and approve requisitions submitted in

E-Procurement.

Purchasing Office reviews and approves requisitions and issues purchase order. Note: Approval is also based on correct and necessary documentation received from the Division.

Purchase order is either faxed or e-mailed through E-Procurement to vendor depending upon vendor’s preference.

Fiscal Management makes payment after receipt of approved invoice from Division. Note: Receive items when they are delivered to avoid delaying payment. Services require the invoices to be signed.

11

12

Up to $500 - Purchases of open market/non-contract commodities and services with a total dollar value of $500.00 or less, including tax (if applicable) and freight charges, are processed as direct payments. The preferred method of purchase is the Procurement Card. This amount is up to $2,000 for Facility Management, Motor Fleet and Veterans Affairs only.

$500.01 - $5,000.00 - Requires at least three (3) written quotes or process an E-quote choosing a minimum of three vendors showing “good faith effort” to seek competition.

$5,000.01 - $10,000.00 - Require either an RFQ (Request for Quote), E-Quote or IPS (Bid)

$10,001.01 - $25,000.00 - Required to obtain competitive bids using IPS (Interactive Purchasing System). Must meet requirement of Administrative Code for exemption to competitive bidding.

$25,000.01 and Above (Goods) Fiscal Purchasing will submit request to Purchase & Contract for processing and approval.

$25,000.01 and Above (Services) Fiscal Purchasing will process and submit to Purchase & Contract for approval. Exception: Request for complex Services will be processed and approved by

P&C.

Emergency requests must meet the requirements stated in NC Administrative Code (NCAC 05B.1602 Emergencies).

Definition: A situation which endangers lives, property, or the continuation of a vital program and which can be rectified only by immediate on-the-spot purchase (or rental) of equipment, supplies, materials, printing, or contractual services (also known a Pressing Need).

Agency must provide written justification as to why a good or service is an emergency purchase.

Note: In most cases good planning prevents emergency purchases.

13

[Date] Memorandum

To: DOA Purchasing

From: Facility Management

Re: Emergency Repair of Pipes

The Facility Management Division is requesting an emergency procurement with ABC Company due to water leakage that caused the pipes to burst in the basement of the Administration Building. The pipes must be repaired in order to stop the water and prevent risk of injury to visitors and employees.  

The amount of this repair is $____________. Thank you.

14

 Under the specific conditions listed in 01 NCAC 05B .1401, or otherwise justified in the public interest by the State Procurement Officer (SPO) (or the agency, if less than $10,000), competition may be waived.

Those situations in which a waiver is possible are listed in the Administrative Code and requires documentation for the file. The request and approval must be signed and dated.

When seeking the waiver, the request must identify those specific facts or circumstances that support a waiver; simply repeating the language of the applicable category is not sufficient.

 

    15

[Date] Memorandum To: DOA Purchasing

From: Anywhere Agency Re: Sole Source Approval of Satellite Services

The Anywhere Agency requests your approval to obtain Satellite Service from Everyday Communications. This is a sole source request based upon standardization and compatibility being the overriding factor.  Due to the complexities of the video transmission, it is crucial to have as little links as possible between the Anywhere Agency and the satellite uplink, which will reduce the errors during transmission. Everyday Communications is the only vendor that can provide all of the requirements for the succession of these services. The amount of this service is $____________.

Thank you16

In order to process requisitions efficiently, please submit documentation as applicable:

Minimum (3) written quotes. Emergency justification. Sole source justification. Other information agency may feel is important

Documentation can be attached to requisition for expediting request.

Please make sure that the correct purchase order number (not the requisition number) is on the invoice before returning to Fiscal Management.

17

Purchase Orders Not Associated with Contracts : Submit request to Budget Officer for approval to do a

change order and state why change order is needed. You do not have to wait for the invoice if you know a change order is needed for certain criteria.

Purchase Orders Associated with Contracts: Submit request to Fiscal Purchasing Office for approval to

amend contract. If the contract has expired, it cannot be extended or amended.

Expired Purchase Order: A new requisition must be submitted.

18

Procurement cards (organizational charge cards) are for official use only and shall be used in accordance with the statewide contract (#946A) established and maintained by the Division of Purchase & Contract. Use of procurement cards by any agency is contingent upon satisfactory compliance review, as determined by the Division of Purchase & Contract.

The Procurement Card Program will simplify and expedite the process of small purchases within the North Carolina Department of Administration. A small purchase is defined as being $500 or less. The procurement card program is intended to supplement the purchasing process, not replace the purchase order program.

The involved entities are Bank of America, the NC Dept. of Administration, the Office of the State Controller (OSC), the North Carolina Accounting System (NCAS) and the Division of Purchase and Contract (P & C). 19

DOA Fiscal Policies: http://www.doa.nc.gov/intranet/pol.aspx

Purchase and Contract Main Website: http://www.pandc.nc.gov/index.htm

Education and Training: http://www.pandc.nc.gov/EO/EOCourses.asp

Class Schedule: http://www.pandc.nc.gov/EO/ClassSchedules.asp

State Term Contract – Alphabetical: http://www.doa.state.nc.us/PandC/keyword.asp

State Term Contract Numerical: http://www.doa.state.nc.us/PandC/numlistt.asp

Statewide IT Procurement State Term Contracts: http://www.its.state.nc.us/ITProcurement/TermContracts/TContracts.asp

20