Purchasing Policyand

Bidding Requirements

Leadership TrainingMay 3, 2007

by: Rick Ashby, C.P.M., A.P.P.

Davis School District

Director of Purchasing & Materials Distribution

Lessons Learned – Title I

1. Forwarding of Approvals

2. Sole/Single Source Requests

3. Vendor Set Up

4. Conflicts of Interest

5. Ask Questions

6. Require More Detail & Documentation

7. Keep Both Eyes Open

Lessons Learned – AG Investigation

1. Specification Writing & Development2. Proprietary Specifications (Sole/Single

Source)3. Inadequate Justification & Supporting

Documentation4. Procurement Review and Approval5. Open Competition6. Ongoing Review & Justification

Purchasing Authority

“The Director of Purchasing is delegated authority by the…Board to carry out the procurement functions of the District and to ensure such functions are in accordance with established policies and written procedures. …”

DSD Purchasing Policy 6F-103(2)

Procurement Activities

Definition: “means buying, purchasing, renting, leasing,

leasing with an option to purchase, or otherwise acquiring any supplies, services, or construction. …

Procurement Activities (cont.)

“It also includes all functions that pertain to the obtaining of any supply, service, or construction, including description of requirements, selection, and solicitation of sources, …

Procurement Activities (cont.)

“…preparation, and award of a contract

and all phases of contract administration.” UPC 63-56-105

Rule of Thumb

What is a Procurement Activity?

Generally, any activity that involves: Vendors

Specifications Pricing & Negotiations Commitment of Funds

Implementation & Administration of Contracts

Video Clip

Who is responsible for the use of public monies?

Who is accountable for the use of public monies?

Procurement Controls

Protect Public Funds from Misuse

Avoid Financial Problems

Build Public Trust

Develop Healthy Vendor Relationships

Efficiency vs. Accountability & Responsibility

Procurement Activities Governed by:

PUBLIC SECTOR

State Laws (Utah Procurement Code 63-56)

State Rules (Utah Procurement Rules R33-1)

District Purchasing Policy (6F-103)

Purchasing Department Procedures & Guidelines

Professional Public Procurement Ethics

Public Sector Procurement

The public has a right to know how funds are expended & the manner that they are spent

- Therefore -

The Disposition & Expenditure of Public Funds Requires District Employees Be Held to a Higher Standard Than Counterparts in

Private Organizations

Ten Commandments of Ethical Government Purchasing

1. Be Independent

Ten Commandments of Ethical Government Purchasing

1. Be Independent

2. Act Only in the Public Interest

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

4. Follow the Law

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

4. Follow the Law

5. Strive for Efficiency

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

4. Follow the Law

5. Strive for Efficiency

6. Protect the Economy

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

4. Follow the Law

5. Strive for Efficiency

6. Protect the Economy

7. Take Nothing, Ever

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

4. Follow the Law

5. Strive for Efficiency

6. Protect the Economy

7. Take Nothing, Ever

8. Do Not Socialize with Vendors

Ten Commandments of Ethical Government Purchasing

1. Be independent

2. Act Only in the Public Interest

3. You Are a Trustee of the Public’s Money

4. Follow the Law

5. Strive for Efficiency

6. Protect the Economy

7. Take Nothing, Ever

8. Do Not Socialize with Vendors

9.Maintain Confidentiality

Ten Commandments of Ethical Government Purchasing

1. Be independent2. Act Only in the Public Interest3. You Are a Trustee of the Public’s Money4. Follow the Law5. Strive for Efficiency6. Protect the Economy7. Take Nothing, Ever8. Do Not Socialize with Vendors9. Maintain Confidentiality

10. Do Not Play Favorites by: Suzanne M. Dallimore, Esq.

Higher Standards

Applicable to Purchasing Dept. Staff Only?

NO !

“Any person acting…in any official capacity [who] participates in the procurement of supplies, services,

construction, real property or insurance…” DSD Purchasing Policy 6F-103(14)

Public Procurement Objectives

Ensure Fair & Equitable Treatment of all Persons Who Deal with the Procurement System of the [District]

Provide Increased Economy in [District] Procurement Activities

Foster Effective Broad-Based Competition within the

Free Enterprise System UPC 63-56-101

Applicability

“… all purchases made by the District…; i.e. schools, departments, programs, etc.

“… regardless of the source of the money to be expended, including but not restricted to:

- tax money- state & federal grants- donations- all types of fees- revenue generated by programs, schools, departments,

etc.

Applicability (cont.)

“… all purchases made through…approved purchase orders, school generated purchase orders, expenditure requests and purchasing/travel cards.

“… all purchases of supplies, equipment, materials, construction, real property, and services.

DSD Purchasing Policy 6F-103(3)

Approval to Commit Funds

“All transactions that result in a commitment of District/School funds shall be approved by the applicable budget manager prior to making purchasing arrangements.”

DSD Purchasing Policy 6F-103(4)

Small Purchase Authority

Budget managers have authority to make small purchases of any type less than $10,000:

Exception #1: Purchases of construction and architect/engineering services limited to $50,000

Exception #2:Purchases made with a Visa Purchasing card limited to $250

Exception #3:Purchases made with a Visa Travel card limited to $20,000 with prior travel approval

Exception #4:Emergency purchases (a condition that threatens body, life or property)

Exception #5:Purchases > $10,000 covered under an existing District or State contract

Provided that …

Small Purchase Authority (cont.)

1. Three (3) written quotes are obtained for purchases > $5,000 and < $10,000 – (retained by Purchasing)

2. Three (3) verbal quotes are obtained for purchases > $1,000 and < $5,000 – (retained by school/dept.)

3. Quotes encouraged (not required) for purchases < $1,000 DSD Purchasing Policy 6F-103(5)

Handout

“Small Purchase Procedure Decision Tree”

- Using District Funds

- Using School Funds

“Bid Procedure Decision Tree”

- All purchases > $10,000

Defining Small Purchase Amount

If a Purchase Order is to be issued, the total dollar amount of the requisition drives the necessity of obtaining written, verbal or no quotes.

If a Contract is to be issued, the aggregate total value of all possible purchases over the entire term of the contract drives the necessity of obtaining written, verbal or no quotes.

Caution:Sub-dividing purchases into smaller unit values to avoid

Purchasing procedures is prohibited

Limited Authority

Budget managers do not have authority to do the following without Purchasing Dept. involvement:

1. Make purchases > $10,000

2. Enter into contracts or agreements that effectively encumber or commit funds beyond the current fiscal year

3. Approve single or sole source purchases (DSD Purchasing Policy 6F-103(8))

Large Purchase Authority

Purchases of any type greater than $10,000

The Purchasing Department must:

Conduct a formal sealed bid process Issue a public notice of bids Receive all sealed bid responses Open all sealed bids in a public bid opening Coordinate bid review, evaluation and award processes Implement & administer contracts

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

3. Local Businesses Must Compete for Bids

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

3. Local Businesses Must Compete for Bids

4. Existing Vendors Should Not Write Your Bid or RFP Specifications

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

3. Local Businesses Must Compete for Bids

4. Existing Vendors Should Not Write Your Bid or RFP Specifications

5. Be Creative and Open to New Approaches

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

3. Local Businesses Must Compete for Bids

4. Existing Vendors Should Not Write Your Bid or RFP Specifications

5. Be Creative and Open to New Approaches

6. Someone is Trying to Rip You Off

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

3. Local Businesses Must Compete for Bids

4. Existing Vendors Should Not Write Your Bid or RFP Specifications

5. Be Creative and Open to New Approaches

6. Someone is Trying to Rip You Off

7. You Have a Duty to Rely on Competition

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency

2. Competition Will Almost Always Yield the Best Product at the Right Price

3. Local Businesses Must Compete for Bids

4. Existing Vendors Should Not Write Your Bid or RFP Specifications

5. Be Creative and Open to New Approaches

6. Someone is Trying to Rip You Off

7. You Have a Duty to Rely on Competition

8. Avoid Acceptance of Gratuities

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency2. Competition Will Almost Always Yield the Best Product at the Right

Price 3. Local Businesses Must Compete for Bids4. Existing Vendors Should Not Write Your Bid or RFP Specifications5. Be Creative and Open to New Approaches6. Someone is Trying to Rip You Off7. You Have a Duty to Rely on Competition8. Avoid Acceptance of Gratuities

9. The Bidding Process is an Open Process

Ten Commandments for Public Bidding

1. Bidding Rules Emphasis Fairness Over Efficiency2. Competition Will Almost Always Yield the Best Product at the Right

Price3. Local Businesses Must Compete for Bids4. Existing Vendors Should Not Write Your Bid or RFP Specifications5. Be Creative and Open to New Approaches6. Someone is Trying to Rip You Off7. You Have a Duty to Rely on Competition8. Avoid Acceptance of Gratuities9. The Bidding Process is an Open Process

10. Bid Results are Public Author - Unknown

Purchasing Dept. Staff

www.davis.k12.ut.us/district/purchasing

Questions?