PROCUREMENT MANUAL. Policies and Procedures

Transcription

1 PROCUREMENT MANUAL Policies and Procedures Revised

2 INTRODUCTION This updated manual was approved by the CEDA Executive Board of Directors on December 15, 2015, and will be effective commencing January 1, This document can be found in the public folders of Microsoft Outlook. Purpose: The purpose of these Procurement Policies and Procedures is to provide guidance to the Community and Economic Development Association of Cook County, Inc. (CEDA) and to contractors interested in contracting with CEDA. These policies and procedures govern the procurement of contracts for goods and services. They are designed to encourage and promote competition among contractors to ensure that CEDA receives the highest quality products and services at the lowest price in the most efficient way. CEDA will use competitive principles in awarding all contracts of any amount with only a defined exception. The exception to the competitive principle include a) repair parts, accessories; equipment or services for equipment or services previously furnished or contracted b) sole source professional services, must be justified and approved c) goods or services required to mitigate an emergency affecting the health and safety of CEDA clients or staff d) water, electricity (single market place) e) items that have been competed unsuccessful where additional bids would be costly or otherwise prohibitive. 2

3 TABLE OF CONTENTS INTRODUCTION 2 FORWARD 7 Section 1 GLOSSARY OF TERMS 9 Section 2 PROCUREMENT OBJECTIVES 14 Section 3 PROCUREMENT DEPARTMENT RESPONSIBILITIES 14 Section 3.1 Procurement Records 15 Section 3.2 Commitment of Agency Funds Policy 15 Section 4 PROCUREMENT POLICIES 15 Section 4.1 Laws Governing CEDA Procurement 15 Section 4.2 Ethics Policy 16 Section Ethical Standards for Directors, Employees and Agents of CEDA 16 Section Conflicts of Interest 18 Section Exceptions 18 Section Ethical Standards for Non-Employees 18 Section Business Meals 19 Section Ethical Standards for Employees of the Procurement Department 19 Section 4.3 The Procurement Cycle 20 Section 4.4 Competition Policy 21 Section Geographic Preferences 21 Section 4.5 Contractor Selection Policy 22 Section 4.6 Specification Development Policy 22 Section 4.7 Components of a Purchasing Description 23 Section 5 PROCUREMENT SOURCE SELECTION METHODS 23 Section 5.1 Selection of Procurement Method 23 Section 5.2 Solicitation Procedures Formal Bids and Proposals 23 Section Timely Submissions 24 3

4 Section Contract Cost and Price 24 Section Formal Bids 24 Section Formal Bidding Procedure 25 Section Submission of Bids 26 Section Modification and Withdrawal of Bids 27 Section Opening of Bids 27 Section Rejection of all Bids after Bid Opening 27 Section Rejection of Bids after Bid Evaluation 28 Section Minor Informalities or Irregularities in Bids 29 Section Evaluation of Formal Bids 29 Section Bid Rigging 30 Section 5.3 Competitive Proposals 30 Section Pre-Qualified Lists 32 Section The RFP Process 32 Section Evaluations of Requests for Proposals 33 Section 5.4 Solicitation Procedures Informal 33 Section Informal Solicitation Procedure 33 Section Authorization to Obtain Price Quotes 35 Section Non-Competitive Procurement 35 Section Cooperative Purchasing Agreements 36 Section 6 EVALUATIONS 36 Section 6.1 Appointing and Evaluation Committee 37 Section 6.2 Evaluation Committee Members 37 Section 6.3 Duties and Responsibilities of Evaluation Committee Members 37 Section 6.4 Committee Meetings 38 Section 6.5 Understanding Solicitation Documents 38 Section 6.6 Evaluation Criteria 38 4

5 Section 6.7 Discussions at Committee Meetings 39 Section 6.8 Oral Presentations 39 Section 6.9 Committee Recommendation 39 Section 7 CONTRACT ADMINISTRATION 40 Section 7.1 Contracts 41 Section 7.2 Contract Types 42 Section Time and Material Contracts 42 Section 7.3 Contract Provisions 42 Section 7.4 Contracts over $150, Section 7.5 Construction Projects in Excess of $150, Section 7.6 Negotiated Contracts 44 Section 7.7 Purchase Orders as Contracts 45 Section 7.8 Procedures for Developing Contracts 45 Section Service Agreements of $3,000 or Less 46 Section Vendor Contract Form 46 Section 7.9 Contract Tracking/Monitoring 46 Section 7.10 Contract Execution and Term 47 Section 7.11 Time Extensions 47 Section Approval/Disapproval of Extension 48 Section 7.12 Contract Modification Process 48 Section 7.13 Written Authorization Required 48 Section 7.14 Federal Awarding Agency or Pass-Through Entity Review 48 Section 8 SOURCING PROCEDURES AND MARKET EVALUATION 49 Section 8.1 Sources of Supply 50 Section Bidders List 50 Section Minority, Women and Small Business Development 51 Section 8.2 Contractor Pre-Qualification 52 Section 9 FACILITIES 52 5

6 Section 9.1 Facilities Requests 52 Section 9.2 Emergency Situations 53 Section 9.3 Prevailing Wages 54 Section 10 CONTRACTOR RELATIONS AND EVALUATIONS 55 Section 10.1 Contractor Evaluation 55 Section 10.2 Contractor Appeal and Protest 56 Section 10.3 Contractor Debarment 56 Section 11 TRAINING 60 EXHIBITS 61 Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5 Exhibit 6 Exhibit 7 Exhibit 8 Exhibit 9 Exhibit 10 Exhibit 11 Exhibit 12 Exhibit 13 Exhibit 14 Exhibit 15 Quotes Form Professional Services Agreement Contract Sign Off form Business Card Form Ethics/Conflicts of Interests Statement - IFB Ethics/Conflicts of Interests Statement RFP/Q Confidentiality Statement IFB Confidentiality Statement RFP Conflict of Interest Statement Sole Source Justification Form Vendor Evaluation Form Vendor Add Form Evaluation Committee Guidelines Department Request for Solicitation to Obtain Goods Department Request for Solicitation to Obtain Services 6

7 FOREWORD CEDA s Mission The Community and Economic Development Association of Cook County, Inc. (CEDA) is a community action agency that serves Cook County in the State of Illinois. It provides economic development and human service programs to address the immediate needs of low-income county residents as well as the underlying conditions which cause those needs. It is CEDA s mission to work in partnership with communities to empower families and individuals to achieve self-sufficiency and improve their quality of life. Its mission is to create, through comprehensive and coordinated program activities, a climate of awareness within which conscious, self-directed social change toward the elimination of poverty and its causes can and will take place on the part of individuals, families and community institutions. Procurement Department Mission The Procurement Department is committed to providing high quality/value-added Procurement services and good stewardship of the Agency s funds. Our commitment to providing valueadded services is the basis for leveraging CEDA s purchasing power and employing cost-saving methods. This effort by the Procurement Department adds dollars to the Agency s bottom line thus helping CEDA ensure the successful fulfillment of its mission. The mission of the Procurement Department is to provide enlightened and responsible leadership to CEDA s procurement function. This leadership ensures that user Departments obtain the goods and services of the quality and quantity they require, within their stated timeframes, at the least possible cost and through a method that conforms to the procurement policies and procedures set forth by CEDA s various funding sources. Procurement will provide timely goods and services through a fair, open and competitive process while maintaining high internal and external customer service. This Procurement Manual (the Manual) has several functions. It articulates CEDA's procurement policies and procedures and: Defines purchasing authority and policies Clarifies the Procurement Department s relationships with other Departments Standardizes and communicates approved practices Guides personnel in decision making Promotes contractor understanding and cooperation Fulfills management departmental requirements Provides standards for evaluating performance 7

8 The Manual is intended to provide guidelines to purchases of supplies, equipment and services including professional services. This Manual will serve as a reference for CEDA employees, Officers and Board Members. It is the responsibility of CEDA employees to understand the policies herein and adhere to them. Any provision of the Manual that conflicts with statements included in a Request for Proposal (RFP), Invitation for Bid (IFB) document, or funding source requirements shall be superseded by the provisions specified in the RFP, IFB document or funding source requirements. If the Manual does not address a provision identified in these documents or requirements then the provision as identified in the documents or requirements shall be accepted as the correct provision. If the Manual contains a provision that is not identified in the solicitation documents or funding requirements, the provision in the Manual shall be accepted as the correct provision. 8

9 SECTION 1 GLOSSARY OF TERMS Frequently used terms are listed below: Addendum Agreement Amendment Appeal or Protest Authorized Contractors Bid Bidder Bid Bond Bid Rigging This refers to a change of a formal document not yet executed, such as changes to bid documents prior to bid opening or changes to contracts not yet executed. The term "Agreement" is generally used when entering into a contract for services, particularly professional services; however, agreement and contract are generally used interchangeably. Amendments refer to written changes to executed documents. This may include but is not limited to a change in the term of service, scope, or compensation. Complaint lodged by a vendor or contractor to contest a procurement specification, evaluation or contract award. Contractors that have been pre-qualified by CEDA s procurement process or have been selected because of CEDA s procurement process as outlined in its policies and procedures. An Invitation for Bid (IFB) is a formal competitive solicitation. IFBs generally have an advertised public opening conducted at the time and date specified in the IFB. The responses are evaluated and awarded to the responsive, responsible bidder with the lowest price. When using this solicitation, price as well as specification requests are major considerations in the award process. A contractor that submits a bid in response to an Invitation for Bid (IFB). A bond, certified check or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified. Bid Rigging is a form of fraud where bidders conspire to fix a bid by agreeing that certain bidders will not genuinely compete for the contract allowing a selected bidder to win the bid. Bidders will submit artificially high bids such that the selected bidder of a group can win the bid. 9

10 Category of Spend CEDA Change Orders Consultant Contract Contractor Cure Period Debarment Emergency Event of Default The category of spend refers to groups of commodities or services within a certain area, such as: travel and entertainment, professional services, construction, technology, telecommunications, etc. The Community and Economic Development Association of Cook County, also known as the Agency These are generally field orders that have been authorized and incorporated into a contract modification. There may be various change orders incorporated into a modification. The term "consultant" is generally used when entering into an agreement for professional services. An agreement in which a buyer agrees to acquire goods or services from a seller. Generally includes business provisions, detailed pricing, invoicing/payment information, and other legal terms and conditions. Supplier of goods or services, including construction or maintenance. Contractors can also be called vendors or suppliers. A cure period is one of the remedies that the parties have to address and rectify an event of default. To initiate a cure period there should be official written Notice. The exclusion of a person or company from participating in a procurement activity for an extended period of time, because or previous illegal or irresponsible action. This method must pass the test of emergency for the agency. Generally, the test implies that the situation presents a risk to the safety, health of the public or individuals; significant damage to property or the operations of the organization; severe fiscal or financial impact on the operations of the organization. These are conditions of non-compliance with contract requirements. Either the contractor or agency has failed to perform in accordance with the terms of the contract or failed to meet the qualifications or requirements needed to continue to perform satisfactorily under the contract. 10

11 Financial Edge Joint Purchasing Lowest bidder Method of Procurement Micro-purchase Notice to Proceed Payment and Performance Bond Pre-Award Protest Pre-Bid Protest Post-Award Protest CEDA s financial, purchasing and general ledger software. Joint purchasing, also referred to as Cooperative purchasing, is the effort to promote cost effective use of shared services by entering into intergovernmental agreements with other agencies for shared goods or services, or the use of another agency s contracts whereby the agency has completed the selection and award of a Contractor through a competitive process. The term lowest bidder means that the bidder whose price of the goods or service is less than that of any other responsive and responsible submission. The method is the process by which an agency solicits offers from prospective contractors/consultants/vendors. The method to be followed is determined by the Procurement Department. Methods include: Bid, RFP, RFQ, Sole Source, Emergency, Cooperative purchasing. The acquisition of supplies or services of which the aggregate dollar amount per purchase does not exceed $3,000. This term, generally referred to as NTP, is the official notice to commence work. It establishes the actual commencement and completion date of a construction contract. This is an important Notice as liquidated damages are determined based on the number of days passed the completion date established in the NTP that contractor takes to complete the work. A bond submitted by the Contractor, executed in connection with a contract award to secure fulfillment of all the Contractor s obligations under the Contract, and to assure payment as required by law of all persons supplying labor and materials in the execution of work provided for in the Contract. Protest regarding the evaluation of bids, qualifications or proposals. Protest regarding a portion of a bid solicitation. Protest Regarding the Award of a Contract or Contract 11

12 Extension. Provider Purchase Order (PO) Purchase Requisition Quote Request for Proposal (RFP)/Request for Qualifications (RFQ) Responsible bidder Responsive Bidder Simplified Acquisition Threshold Supplier of professional services. Document used to commit the agency to orders of goods and services. A request for goods and/or services forwarded to the Procurement Department by the user department An estimate of cost to provide a good or service. A competitive proposal which requires a vendor to supply any or all of the following; their qualifications to do the job, a proposal outlining how he or she would do the job and the cost of the job. This process can be a one, two or three step process depending on the type of procurement. The RFP/RFQ will delineate all evaluation criteria and factors that will be considered in the contract award. Awards will be made to the proposer whose proposal, in the sole opinion of CEDA best meets the criteria required in the RFP and is most advantageous to the program and the Agency when all factors are considered. Responsibility is a proposer s financial solvency, past performance (references, good standing with required Federal, State and local agencies) good standing with CEDA and ability in the sole determination of CEDA of the bidder to provide the required goods or services at the proposed price. Responsible contractors will not have been on any Federal debarment list. In addition the verdict of court cases will be reviewed. Contractors convicted of an offense of a criminal nature i.e. fraud, embezzlement etc. will be considered unresponsive. In addition Contractors that show a consistent pattern of litigation for faulty of dangerous work will also be considered unresponsive. Responsiveness is attained if the bidder has met all submittal requirements and the basic bidding criteria that is outlined in the bid document. Purchases for goods, supplies or services that exceed $150,

13 Small purchases Sole Source Specification Solicitation User Departments Value-Added Services Informal procurement methods for securing services, supplies or other property above $3,000 that do not exceed $150,000. If small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Sole Source or procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source. A concise description of an item or service that CEDA seeks to buy and the requirements the vendor must meet in order to be considered for a contract award. A notification of an organization s interest in purchasing specified goods or services Programs within CEDA that the Procurement Department serves by obtaining for them goods or services using appropriate procurement processes. Services that add to the value of a purchase or enhance the procurement experience. 13

14 SECTION 2 PROCUREMENT OBJECTIVES OBJECTIVES The Procurement Department has the following overall objectives for its service to CEDA. Provide guidelines for ethical behavior in procurement for CEDA Board of Directors, Officers, Staff and Contractors. Provide continuous support to the functions, user departments and Agency programs Continue the Procurement department s transition from a transactional to strategic procurement model Utilize the full capacity of automated systems to incorporate all bidding, requisitioning and receiving processes. Continue centralization of procurement process within CEDA s Procurement Department Manage the supply chain so that delivery is synchronized to need Utilize commodity sourcing strategies to leverage volumes and achieve cost savings Provide equal opportunity in procurement process for participation by all eligible contractors Maximize the utilization of small, minority, women owned businesses and labor surplus area firms in the purchase of goods or services for CEDA Maintain internal controls to safeguard the quality and integrity of the procurement process Provide leadership to the procurement process from specification to contract award Continue to enforce all CEDA ethics polices through all phases of the acquisition so that there are no documented cases of procurement related ethical breaches SECTION 3 PROCUREMENT DEPARTMENTAL RESPONSIBILITIES In performing its procurement and management functions, the Procurement Department leads the search for sources of contractors, researches for the best quality and pricing of goods and supplies, manages contractor selection, and manages the process for the procurement of goods and services. Some of the key activities of purchasing include: Convening and leading users groups for the development of commodity procurement strategies 14

15 Defining, developing and maintaining contractor relationships for key commodity groups Maintaining accurate procurement records Extending appropriate assistance to user departments in determination of the most suitable materials, equipment and services available to meet their requirements Coordinating the information related to materials, equipment or services to be purchased, the selection of the sources of supply and the relative quality and suitability of offerings Promoting good contractor relationships, cultivated by informed and fair buying practices, by strict maintenance of ethical standards and by courteous and prompt reception of contractor representatives 3.1 Procurement Records CEDA must maintain records sufficient to detail the history of the procurement. These records will include, but are not limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 3.2 Commitment of Agency Funds Policy Contractual agreements whose value is $25,000 or more require the approval of the CEDA Board of Directors and the signature of the President/CEO of CEDA. In addition, the CEO shall sign these contracts indicating that this agreement is approved by the program or programs its serves, and the CFO must review these agreements indicating that the proposed expenditure is budgeted and is appropriate for the program. The President/CEO may delegate the authority of the management of the procurement process for these agreements to his or her designees. This authority extends to approving and releasing purchase orders for purchases made in line with CEDA policies and procedures. It is understood that one-time orders for goods orders for monthly service or emergency service may not result in a written contractual agreement other than a purchase order. These orders will have been checked for budget availability by the automated system and approved at the requisition stage by the program director or designee. SECTION 4 PROCUREMENT POLICIES The statements contained in this section are the laws and policies that govern CEDA procurement. 4.1 Laws Governing CEDA Procurement The statements contained in this section are the laws and policies that govern CEDA Procurement. 15

16 Procurement practices of CEDA are governed by agency policies as adopted by the Board of Directors and requirements of funding agencies including the applicable provisions of OMB Circulars A-133 and A-110 and OMB Circular A-122, 2 CFR part 230 and Appendix B, and 41 CFR Part 60 seq.; 2 CFP Part ; 2 CFR Part ; 42 U.S.C et. seq.; 45 CFR part ; 45 CFR part ; 41 U.S.C. 403(11), 42 U.S.C ; 10 CFR section of the DOE regulations; 31 U.S.C. 1352, 29 U.S.C ; 30 ILCS 500 Illinois Procurement Code. Contractors shall comply with the following statutes as applicable: Title VII of the Civil Rights Act of 1964, 42 U.S.C et seq. (1988), as amended by the Civil Rights Act of 1991 and the Lily Ledbetter Fair Play Act of 2009; Executive Order 11236, as amended by Executive Order 11375, and as supplemented by 41 CFR Part 60-1; Age Discrimination in Employment Act of 1967, 29 U.S.C , as amended; Rehabilitation Act of 1973, 29 U.S.C 701 et. seq., as amended. 4.2 Ethics Policy It is the intent of CEDA to incorporate high ethical standards into the execution of daily professional activities. Procurement activities are affected by moral standards and ethical values, as well as being subject to widespread publicity. Major procurement decisions may be difficult and controversial even when there are no overt political pressures. It is very important that personnel engaged in procurement activities (both procurement staff and staff of user Departments) conduct themselves in a manner that is above reproach. Relations of a compromising or "favored" nature, or even the appearance of such relations, are to be scrupulously avoided. Ethical behavior cannot be legislated. Rules applicable to every situation which may be confronted cannot be written. However, it is possible to establish policies and guidelines that assist in establishing and maintaining high standards of conduct. It is CEDA s intention that the ethical standards and requirements listed below will govern activities of CEDA s Board of Directors, staff and contractors in every phase of the acquisition process. These policies and procedures are established to encourage adherence to an uncompromising level of integrity. They are designed to heighten awareness and acceptance of appropriate conduct. Policies stated here are intended to provide insight for handling difficult day-to-day issues. Staff should remember that policies and procedures cannot take the place of good judgment. When in doubt, consult with management, professional colleagues and of course your conscience. Violations of CEDA s Procurement ethics policies and procedures can result in disciplinary action and ultimately in dismissal Ethical Standards for Directors, Employees and Agents of CEDA Members of the Board of Directors, employees and agents of CEDA (Employees) shall avoid the intent and appearance of unethical or compromising conduct in relationships, actions, and communications. The consequences of a perceived impropriety can be the same as consequences of an actual impropriety. Therefore, it is essential that any activity or involvement between Employees and active or potential suppliers which in any way diminishes, or even appears to diminish, open and fair treatment of suppliers is strictly avoided. Those who do not 16

17 understand the circumstances will judge based on appearances. Employees must consider this and act accordingly. No Employee shall participate in the selection or in the award or administration of a contract if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when the Employee, his spouse, children, grandchildren, parents, aunts, uncles, cousins, significant other or life partner (immediate family), his or her business partner; or an organization which employs or is about to employ any of the above has a financial or other interest in the contractor selected for the award. It is a breach of ethical standards for any Employee to participate directly or indirectly in any aspect of the procurement process including but not limited to selection of the contractor and administration of the contract when the Employee knows that: The Employee or any member of the Employee s immediate family has a financial interest pertinent to the procurement A business organization in which the Employee or any member of the Employee s immediate family has a financial interest pertaining to the procurement has a financial interest in the procurement Any other person, business or organization with which the Employee or any member of the Employee s immediate family is affiliated has a financial interest pertinent to the procurement No Employee may order any good(s) or service(s) for their personal use or consumption in the name of CEDA, even if it is their intention to pay for the item(s) or service(s) from personal funds. No Employee shall solicit nor accept gratuities, favors, premiums, personal discounts, loans, money or anything of monetary value from contractors/vendors, potential contractors, or parties to sub-agreements for his or her personal use. Monetary value is defined as non-perishable items with a value of $50.00 or more. An example of a premium is the offering of a TV or VCR for the purchase of 5,000 pens. If a premium is provided within the parameters of a normal purchase the premium becomes the property of CEDA; it must be added to the program inventory and given to the program director for use within the program. All rebates on purchases made with CEDA funds become the property of CEDA and must be turned in to the CFO for deposit in the proper account. In addition to the restrictions on contracting with CEDA, CEDA employees are prohibited from soliciting, demanding, accepting or agreeing to accept from another person a gratuity or an offer of employment in connection with any procurement decision. Similarly, CEDA employees are prohibited from accepting any payment or offer of employment made by or on behalf of a subcontractor as an inducement for the award of a subcontract or order. Finally, employees may 17

18 not knowingly use confidential information for actual or anticipated personal gain, or for the actual or anticipated gain of any person Conflicts of Interest CEDA, its Affiliates and all Officers, Directors, Employees, Delegates, Council and Committee members scrupulously shall avoid any conflict between their respective personal, professional or business interests and the interests of CEDA, in any and all actions taken by them on behalf of CEDA in their respective capacities. If any Officer, Director, Delegate, Employee of CEDA has any direct or indirect interest in, or relationship with, any individual or organization that proposes to enter into any transaction with CEDA, including but not limited to transactions involving: the sale, purchase, lease or rental of any property or other asset employment, or rendition of services, personal or otherwise the award of any grant, contract, or subcontract the investment or deposit of any funds of the Agency Such person shall give notice of such interest or relationship and shall thereafter refrain from discussing or voting on the particular transaction in which he has an interest, or otherwise attempting to exert any influence on CEDA, or its components to affect a decision to participate or not participate in such transaction Exceptions Where an Employee or member of the Employee s immediate family holds a financial interest in an all blind trust the Employee shall not be deemed to be in conflict of interest with regard to matters pertaining to that financial interest provided the disclosure of the existence of the blind trust has been made to the CFO of CEDA. Upon discovery of an actual or potential conflict of interest, an employee shall promptly file a written statement of disqualification to the CFO of CEDA and shall withdraw from further participation in the transaction involved. Should the CFO have such a conflict of this nature the written statement of disqualification should be directed to the President/CEO. The person may also request written instructions and disposition of the matter. If an actual violation occurs or is not disclosed and remedied, the employee involved may be reprimanded, suspended, or dismissed. The contractor or potential contractor may be barred from receiving future contracts and have an existing contract canceled Ethical Standards for Non-Employees Any efforts to influence any CEDA employee to breach the standards of the ethical conduct listed here is also a breach of the ethical standards of CEDA. Contractors shall offer no gifts, gratuities, favors or anything of monetary value to any Board Member, Official or Employee of CEDA based upon any mutual understanding either explicit or implicit that the business of CEDA would be influenced by its acceptance. It is assumed that a perishable item or one having a value of $50.00 or less does not imply such an understanding. No person who has an economic interest in CEDA business shall give, directly or indirectly, to any CEDA individual or group of employees whose decision or action may substantially affect such transaction, or to the 18

19 immediate family member of such an employee, and none of them shall accept, any gift of (i) cash or its equivalent regardless of value, or (ii) an item or service other than an occasional one of nominal value (perishable item or one valued at less than $50.00) provided. This section however does not prohibit reasonable hosting, including, entertainment, meals or refreshments furnished by a contractor in connection CEDA business. It also does not preclude sponsorship of activities in conjunction with fundraising for CEDA programs. Participation in industry or company events, where the agency will receive some benefit (i.e. education or industry updates, professional networking opportunities etc.) is also acceptable with prior approval of the member of senior management staff that is responsible for the Department that wishes to participate. Senior managers shall review the issues at the weekly senior staff meeting if there is any doubt regarding the correct course of action Business Meals An invitation for a business lunch or dinner, advertising novelty items or sales promotional gifts may be accepted so long as they are of nominal value ($50 or less) and intended only to enhance a business relationship. Meals as defined above may be accepted in connection with business discussions provided the following criteria be met: They are unsolicited They are offered infrequently They involve reasonable and not lavish expenses They do not create an obligation or expectation They take place in a setting reasonable and appropriate for the individuals involved in the business at hand Ethical Standards for Employees of the Procurement Department The employees that work for the Procurement department of CEDA are required to support the agency's operating departments with an uninterrupted flow of materials and services. Procurement personnel are custodians of CEDA's reputation for fair and equitable procurement practices. Accordingly, a high ethical standard of conduct is mandatory. Procurement Department employees must discharge their duties impartially to assure fair and competitive access to procurement opportunities by responsible vendors. For these reasons employees of the Procurement Department and all employees that take (in addition to the steps listed above) an active part in the acquisition process are bound by the following ethical standards. They must strictly adhere to all of the ethical standards already set forth in this manual. In addition, they will: Believe in the dignity and worth of the services rendered by CEDA and the clients served by CEDA 19

20 Be governed by the highest ideals of honor and integrity in all public and personal relationships, in order to merit the respect and inspire the confidence of the staff of CEDA Believe that personal enrichment or personal profit obtained through misuse of CEDA funds or public or personal relationships is dishonest and cause for discharge Identify and eliminate participation of any individual in operational situations where a conflict of interest may be involved or perceived to be involved At no time and under no circumstances accept directly or indirectly gifts, gratuities, tips, kickbacks, money or anything of monetary value (value is defined as $50 or more for nonperishable or limited types of promotional items) from contractors Items with a value of $50.00 or less or perishable items may only be accepted once per year from any current contactor or any contractor interested in selling to CEDA 4.3 The Procurement Cycle The first step in any procurement is to determine the need for particular goods or services. Researching the market is often essential, and CEDA employees may find an ongoing effort to collect market information to be worthwhile. It is the policy of CEDA that the Procurement Cycle begins with the identification of the need to purchase a particular item or service. The Procurement Department may help develop requirements or specifications; however, they are not responsible for their development. Procurement works in tandem with user departments to create a final determination of the materials, equipment or services that are needed. This identification can take several forms which include but are not limited to: A verbal or written statement of need by a user Department requesting the commodity or service A commodity evaluation by the Procurement Department reveals items or services that should be purchased through competition The expiration of contractual agreements for items that were selected through competition requires renewal. The procurement cycle is completed when goods are delivered or services are delivered as requested and accepted by the requestor. The agency should avoid any unnecessary or duplicative purchases. An analysis of internal sources of supplies or services should be conducted prior to a user department initiating a procurement request. The agency is encouraged to use State or Federal excess or surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs. Consideration will also be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be 20

21 made or lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. 4.4 Competition Policy It is the policy of CEDA that all procurement transactions will be conducted in a manner that provides full and open competition. CEDA will use competitive principles in awarding all contracts of any amount with only specifically defined exceptions. All requests for goods or services not covered by an exception are subject to competition where competition is available. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or Invitations for Bid or Requests for Proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to: Placing unreasonable requirements on firms in order for them to qualify to do business Requiring unnecessary experience or excessive bonding Noncompetitive pricing practices between firms or between affiliated companies Organizational conflicts of interest (as defined in Section 4.2 Ethics) Specification of only brand names instead of allowing an equal product to be offered and describing the performance or other relevant requirements of the procurement Any arbitrary action in the procurement process The exceptions to the competitive principles include a) repair parts, accessories; equipment or services for equipment or services previously furnished or contracted b) sole source professional services c) and single source services that have only one supplier in the market place such as water or electricity d) good or services required to mitigate an emergency affecting the health and safety of CEDA clients or staff, or the fiscal stability of CEDA as an agency (e) items that have been competed unsuccessfully where additional bids would be costly or otherwise prohibitive. Purchases in excess of $150,000 resulting from the selection of one qualified bid or response will be reported to the funding agency, where required, prior to awarding of the contract Geographic Preferences CEDA will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or 21

22 encourage geographic preference. When contracting for architectural and engineering services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. 4.5 Contractor Selection Policy To insure competition all contractors must respond to a set of specifications prepared by the Procurement Department in tandem with the user department. Selection will be made based on the bid that represents the lowest responsive and responsible bidder in response to an Invitation for Bid, or the proposal that in CEDA s sole opinion best fulfills the evaluation criteria specified in the Request for Proposal. CEDA will award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. 4.6 Specification Development Policy A specification is a concise description of an item or service that CEDA seeks to buy and the requirements the contractor must meet in order to be considered for a contract award. Once department personnel have determined a need, they must then convey that need to potential contractors in such detail as to ensure that CEDA receives responsive quotes, bids, or proposals that can be priced and compared in a fair manner. A sufficient purchase description may require only a few words for each item. For more complex procurements, the purchase description will include more detailed specifications that may include parameters such as size, dimensions, quality, performance, warranties, installation, and terms. A purchase description may also include a scope of services that details specific services, including the work products or deliverables to be produced under the contract. An inadequate purchase description renders effective competition impossible because potential contractors will not know what the CEDA is seeking and will be unable to offer a reliable price. Vague purchase descriptions often result in contractor protests and cancelled procurements. If the CEDA does award a contract using a vague purchase description, it may end up paying for supplies or services it does not need, and CEDA purchasing employees are likely to have disputes with vendors over what the contract does or does not require. User Departments, the Facilities Department, the Information Technology Department, the Procurement Department, an outside agency or independent contractor may prepare specifications. User departments must approve all specification however the final acceptance of the specifications rests with the Procurement Department. The Procurement Department will assist the user department in developing specifications, or in identifying sources from which technical specifications can be obtained. Procurement staff is encouraged to utilize specifications that are available through procurement professional organizations such as the Institute for Supply Management and the National Institute of Governmental Purchasing. The Procurement Department discourages the use of contractors in the preparation of specifications for goods and services. Where contractors prepare specifications, they should be compensated. However, they are not eligible to propose on the work resulting from their specifications. 22

23 4.7 Components of a Purchase Description At a minimum, the following are the elements of any good purchase description: A list and description of each supply or service in sufficient detail for all contractors to understand what the department needs. Relevant sample documents may be appended to the purchase description; alternatively, contractors should be instructed how to obtain or review such documents. When purchasing a service, employees should clearly specify the service or services contractors will be required to perform and the documents, reports, and materials they must deliver. The quantity of each supply or service needed and whether the quantity shown is the actual amount or an estimate. Contractors need this information to judge whether they can handle the contract and to submit accurate prices. The timeline for which each supply or service is needed. The exact schedule, or an approximate schedule, with a statement that it is subject to minor adjustment, should be included in the purchase description. The delivery terms, if known. SECTION 5 PROCUREMENT SOURCE SELETION METHODS 5.1 Selection of Procurement Method When initiating the procurement cycle, it is important that solicitations are in compliance with the procurement standard procedures, meet the requirements of the user department, and that the funds are budgeted for the expenditure. The Procurement Department, in collaboration with the user department(s) will determine the best procurement method to successfully complete the procurement process to deliver the goods or services needed by the Agency. 5.2 Solicitation Procedures Formal Bids and Proposals CEDA s procurement procedures for solicitations incorporate clear and accurate descriptions of the technical requirements for the material, product or service to be procured. The descriptions will not unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, set forth the minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. When it is impractical or uneconomical to make a clear and accurate description of technical requirements, a brand name or equivalent description will be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met contractors must be clearly stated, and identify all requirements which the contractors must fulfill and all other factors to be used in evaluating bids or proposals. Detailed specifications along with relevant terms and conditions are prepared by the user department and forwarded to the Procurement Department. Requests for solicitations must be 23

24 submitted to the Procurement Department either in hard copy or electronically. All such requests should have the signature of (or if electronic be copied to) the program director. All requests should have the amount budgeted for the expenditure and the account number or numbers d requesting their approval, the dollar amount budgeted and the account number to fund the project. The Procurement Department reviews these specifications for clarity, completeness, fairness and to insure that outcomes are quantifiable and measureable. They then incorporate these specifications into the Bid documents. Bidders may receive these documents by picking up a hard copy from CEDA s central office, obtaining a copy from CEDA s website or receiving a copy from the Procurement Department via Timely Submissions All requests for competitive solicitations (bids or proposals) include a time, date and location for submittal to be considered. All bids or competitive proposals must be received by CEDA not later than the date and time specified in the solicitation documents. Bids or proposals that are received after the stated time or date shall be deemed late. They will not be returned to the sender and not considered for contract award. Bids or proposals that are received at the stated time and date, but are not submitted to the correct location, will be deemed late and will not be considered for contract award Contract cost and price A cost or price analysis must be performed in connection with every procurement action in excess of the Simplified Acquisition Threshold of $150,000 including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the Agency will make independent estimates before receiving bids or proposals. Profit will be negotiated as a separate element of the price for each contract in which there is no price competition and in all cases where a cost analysis is performed. To establish a fair and reasonable profit, consideration must be giving to the complexity of the work to be performed, the risk borne by the contractor, the contractor s investment, the amount of subcontracting, the quality of tis record of past performance, and industry profit rates in the surrounding geographical area for similar work. Costs or prices based on estimated costs for contracts under a Federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable in the federal regulations. CEDA may reference its own cost principles that comply with the Federal cost principles. The cost plus percentage of cost and percentage of construction cost methods or contracting must not be used Formal Bids Competitive sealed bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms 24

25 and conditions of the invitation for bid, is the lowest in price. The sealed bid method is the preferred method for procuring construction. A competitive sealed bidding process will be used when: A complete, adequate and realistic specification or purchase description is available Two or more responsible bidders are willing and able to compete effectively for the business The purchase lends itself to a firm, fixed-price contract The selection of the bidder can be made principally on the basis of price Formal bidding procedures will be used for securing goods, materials, supplies, maintenance, repair or construction services that cost more than the Simplified Acquisition Threshold of $150, Formal Bidding Procedure If sealed bids are used, the following requirements apply: Bid must be solicited from an adequate number of known bidders, providing them sufficient response time prior to the date set for opening the bids The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond All bids will be opened at the time and place prescribed in the invitation for bids; the bids must be opened publicly A firm, fixed price contract award will be made in writing to the lowest, responsive, responsible bidder. Where specified in the bidding documents, factors such as discounts, transportation costs, and life cycle costs must be considered in determining which bid is the lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of, and Any and all bids may be rejected if there is a sound documented reason Procurement staff will take the following steps in creating a bid document and managing the bid process. Invitations to Bid (IFBs) are the documents used in a formal bid process. The procedures listed below will be used for the creation of an Invitation for Bid (IFB). Create a legal advertisement inviting qualified firms to bid on the specified goods and/or services. The ad is placed in a newspaper of major circulation and, where 25