Public School Purchasing THE FUNDAMENTALS

Transcription

1 Public School Purchasing THE FUNDAMENTALS Government Purchasing Association of New Jersey Atlantic City, NJ March 23, 2017 Mr. James Shoop School Business Administrator/Board Secretary (Ret.) SHOOP SBA, LLC 1 P a g e

2 The Fundamentals of Purchasing Fundamental #1 Authority to Purchase A. Who has the authority to purchase in a school district? N.J.S.A. 18A:18A-2(b) The Purchasing Agent Purchasing Agent means the Secretary of the Board Business Administrator (Assistant Superintendent of Business) Business Manager The Purchasing Agent is duly assigned the authority, responsibility, and accountability for the purchasing of the Board and having the power to: Prepare advertisements for bids To advertise for and received bids To award contracts less than the bid threshold when so authorized by the board. B. How Does the Purchasing Agent purchase goods and services for the district? The Purchasing Agent issues a purchase order. A purchase order is a document issued by the Purchasing Agent authorizing (not confirming) a purchase transaction with a vendor N.J.S.A. 18A:18A-2 (v). C. What is the purchasing process for the district? 1. Purchasing Agent prepares and signs a purchase order. 2. The purchase order is sent to the vendor 3. The vendor receives the purchase order and then, only then, the vendor provides either the goods or services to the district. 2 P a g e

3 D. Unauthorized or Confirming Orders If there is any deviation from this process, the purchase becomes an unauthorized purchase or a confirming order. The district then becomes subject to any penalties outlined in State law and code. The district may also receive an audit finding and the district may also lose points in the NJ QSAC Fiscal Management Section. Bluntly speaking, only the Purchasing Agent of the school district is authorized by law to purchase on behalf of the district. No Principals No Coaches No Custodians No Teachers No Supervisors No Superintendents No Architects; Engineers No Board Members Withholding of State Aid N.J.A.C. 6A:23A-5.4 The NJ Department of Education shall withhold State funds from any public school district which fails to obey the provisions of the Public School Contracts law. Contracts with Vendors Shall be in Writing--N.J.S.A. 18A:18A-40 All contracts with vendors shall be in writing. No school official, including the School Business Administrator, may call or contact a vendor to perform any service or provide any goods. The contract with the vendor must be in the form of an official purchase order. The Plan! To assist the Purchasing Agent to maintain control over the purchasing process, I have developed a set of strategies to limit unauthorized purchases. Do not say, do or sign anything that can ruin you professionally. 3 P a g e

4 Strategies to Limit Unauthorized Purchases 4 P a g e

5 Strategy #1 Change the Business Office Terminology Eliminate the term Confirming Order from the official vocabulary of the Business Office. Call the confirming order what it really is an unauthorized order! New Jersey State Law N.J.S.A. 18A:18A-18A-2(v) notes that a purchase order is a document issued by the Purchasing Agent, authorizing (not confirming) a purchasing transaction with a vendor. Only the Purchasing Agent is authorized to make purchases on behalf of the school district. 5 P a g e

6 Strategy #2 Superintendent Letter to All Employees It is recommended that on an annual basis, the Superintendent of Schools or the School Business Administrator, send a letter to all employees in the school district, informing them of the possible consequences of unauthorized (confirming) orders. The letter should highlight the following; The authority to purchase; Explanation of an unauthorized purchase; Laws and code relevant to purchasing; and District warning and sanctions. The letter should be given to all employees and discussed at staff meetings. A sample letter is attached. 6 P a g e

7 Name of School District Office of the Superintendent Address City, State, Zip Memorandum To: From: Date: Re: All School District Employees, Superintendent Purchasing Procedures All purchases of goods and services must be made through the proper purchase order process as outlined in the school district purchasing manual. Unauthorized Purchases Any school district employee who orders and/or receives any goods or services without first going through the approved purchase order process, has made an unauthorized purchase. Unauthorized purchases are a violation of New Jersey Public School Contracts Law N.J.S.A. 18A:18A-1 et seq. Board of Education Policy NJQSAC Fiscal Management SOA #10 The district may be subject to penalties as outlined in N.J.A.C. 6A:23A-5.4 (a). The State of New Jersey conducts audits of the district s business practices. Failure to comply with State law, regulations and board policy, with respect to contracting with vendors, may place the district at risk for penalties and may in certain instances place individual liability on district employees. We will be working with the Business Office to monitor compliance with this directive. If you have any questions about the district s purchasing practices, please do not hesitate to contact the Business Office at. c. School Business Administrator Board Attorney 7 P a g e

8 Strategy #3 Annual Training Session The School Business Administrator, to be in compliance with New Jersey Administrative Code 5:34-1.1(b), should provide an annual training session(s) to all officials involved with the purchasing process. A letter should be sent to all principals and district administrators inviting them to the training session see sample letter. Attendance should be taken and let it be known that any makeup training sessions will be held on a Friday afternoon at 3:00 p.m. 8 P a g e

9 Name of School District Office of the Superintendent Address City, State, Zip Memorandum To: From: Date: Re: All School District Employees Superintendent Annual Training Session Purchasing Practices/Procedures The Annual Purchasing Training Session has been scheduled in order for our district to be in compliance with N.J.A.C. 5:34-1.1(b). Only Principals and Central Administrators are asked to attend this important annual meeting which is scheduled for: Weekday, Month 00, :00 a.m. Location Those who do not attend the training session on Weekday, Month 00, 2000, must attend the make-up session on Friday, Month 00, 2000 at 3:15 p.m. in the. If you have any questions, please contact me at Extension. c. School Business Administrator/Board Secretary 9 P a g e

10 Strategy #4 Annual Letters to Vendors The School Business Administrator should, on an annual basis, send a letter to all vendors who provide goods and services to the school district. The main focus of this letter is to inform vendors about authorized purchases and unauthorized purchases. The vendors have to be told up front to only accept requests for purchases through the approved purchase order process. It is also a good time to inform vendors about your district s strict policy on vendor relations and ethics in purchasing. A sample letter is attached. 10 P a g e

11 Name of School District Office of the Superintendent Address City, State, Zip TO: All Vendors Date: UNAUTHORIZED ORDERS Authorized Purchases Official Notification The Board of Education only recognizes purchases made through the approved purchase order process. All purchases made by the Public School District require: Unauthorized Purchases Written Purchase Order Purchase Order Number; and an Authorized Signature (Purchasing Agent) Any Board employee who orders and/or receives any materials, supplies or services without first going through the approved purchase order process has made an unauthorized purchase. Vendors Responsibility Do Not Honor Requests! Vendors are not to honor or accept any requests for goods or services unless the vendor receives a written purchase order with an authorized signature and a purchase order number. Contact the Business Office! Please alert at if any Board employee attempts to place an order without an authorized purchase order. You will NOT Get Paid! The Board of Education will not be held responsible for any unauthorized orders or unauthorized purchases. Authorized Signature The Board of Education will only recognize purchase orders signed by: School Business Administrator, Board Secretary 11 P a g e

12 ETHICS IN PURCHASING Vendor Relations Recommendation of Purchases It is the desire of the Board of Education to have all Board employees and officials practice exemplary ethical behavior in the procurement of goods, materials, supplies, and services. School district officials and employees who recommend purchases shall not extend any favoritism to any vendor. Each recommended purchase should be based upon quality of the items, service, price, delivery, and other applicable factors in full compliance with N.J.S.A. 18A:18A-1 et seq. Solicitation/Receipt of Gifts Prohibited School district officials and employees are prohibited from soliciting and receiving funds, gifts, materials, goods, services, favors, and any other items of value from vendors doing business with the Board of Education or anyone proposing to do business with the Board. Vendor Responsibility Offer of Gifts, Gratuities -- Prohibited Any vendor doing business or proposing to do business with the Board of Education, shall neither pay, offer to pay, either directly or indirectly, any fee, commission, or compensation, nor offer any gift, gratuity, or other thing of value of any kind to any official or employee of the Board of Education or to any member of the official s or employee s immediate family. Vendor Influence -- Prohibited No vendor shall cause to influence or attempt to cause to influence, any official or employee of the Board of Education, in any manner which might tend to impair the objectivity or independence of judgment of said official or employee. Vendor Certification Vendors or potential vendors will be asked to certify that no official or employee of the Board of Education or immediate family members are directly or indirectly interested in this request or have any interest in any portions of profits thereof. The vendor participating in this request must be an independent vendor and not an official or employee of the Board of Education CONTRIBUTIONS TO BOARD MEMBERS Award of Contract Reportable Contributions N.J.A.C. 6A:23A-6.3(a) (1) No board of education will vote upon or award any contract in the amount of $17,500 or greater to any business entity which has made a contribution reportable by the recipient under P.L.1973, c83 (codified as N.J.S.A. 19:44A-1 et seq.) to a member of the board of education during the preceding one year period. Contributions During Term of Contract Prohibited N.J.A.C. 6A:23A-6.3(a)(2)(3) Contributions reportable by the recipient under P.L. 1973, c83 (codified as N.J.S.A. 19:44A-1 et seq.) to any member of the school board from any business entity doing business with the school district are prohibited during the term of the contract. When a business entity referred in (a)(2) is a natural person, contribution by that person s spouse or child that resides therewith, shall be deemed to be a contribution by the business entity. When a business entity is other than a natural person, a contribution by any person or other business entity having an interest therein shall be deemed to be a contribution by the business entity. 12 P a g e

13 Strategy #5 Individual Letters to Vendors It is going to happen even in the best school districts! There will be unauthorized purchases. The School Business Administrator should take some corrective action to limit these unauthorized purchases. Attached are three (3) sample letters that may be used as the occasion arises. 1. Letter to Vendor Unauthorized Purchase This letter to the vendor identifies the purchase that was made through the invoice submitted by the vendor. The SBA puts the vendor on notice of the unauthorized purchase and asks the vendor to... acknowledge in writing to my office that you fully understand these purchasing procedures. The SBA will not start the payment process if there is no written acknowledgement. 2. Letter to Vendor Items Added to the Purchase Order This letter reminds the vendor that only goods and services listed on the purchase order are to be delivered or rendered. There are times when an employee may add an item to a purchase order if another item is out of stock. The Business Office usually finds out about these purchases when the invoice submitted by the vendor does not match the items on the purchase order. Adding items to a purchase order is an unauthorized purchase. Only the Purchasing Agent may authorize purchases for the district. This letter calls for the vendor to contact the school to make arrangements to pick up the unauthorized items. 3. Letter to the Vendor Cannot Pay Invoice This letter is usually sent to the vendor who repeatedly violates school district procedure by providing goods and services to the district without first receiving an authorized purchase order. A final note! For documentation purposes, it is suggested that copies of all letters be sent to the Superintendent, the Board Attorney and the Principal/Administrator. 13 P a g e

14 Letter to Vendor Unauthorized Purchase BOARD OF EDUCATION Address City, State, Zip Date: Re: Unauthorized Purchase -- Services/Goods I am sorry to inform you that Name of Company Invoice Number provided unauthorized services and or goods to the Board of Education. The Board of Education pursuant to State Law and Board Policy authorizes all purchases through an approved signed purchase order. There is no purchase order for the following purchase(s): Date Amount Service/Goods The district has taken corrective action on our part. I ask that in the future provide no services or goods unless a signed approved purchase order is first received by your company. If any employee of the Board of Education contacts you to provide any service or goods for the district, do not do so unless you receive from the Board of Education a signed purchase order with a purchase order number authorizing you to perform the service or provide the goods. Please acknowledge in writing to my office that you fully understand these purchasing procedures. As for the above listed invoice(s), it will be reviewed by district officials. A determination will be made whether to pay the invoice or not. c:, Superintendent of Schools, Board Attorney, Principal/Administrator Yours truly, School Business Administrator, Board Secretary 14 P a g e

15 Letter to Vendor Items Added to the Purchase Order BOARD OF EDUCATION Address City, State, Zip Date: Re: Unauthorized Purchase Items Added to Purchase Order # I am sorry to inform you that provided unauthorized goods/materials to the Board of Education. The Board of Education pursuant New Jersey State Law and Board Policy authorizes all purchases through an approved signed purchase order. The attached purchase order (# ) to your company lists the approved items. The invoice ( ) submitted by your company for this purchase order has the following extra items which were not on the original purchase order: Quantity Description Unit Price Total Price This is an unauthorized purchase! The school and your company had no authority to add items to the purchase order. Please submit a revised invoice deleting the additional items. The school district will only pay for the items on the original purchase order. You may want to contact the school in question to work on having the items in question returned. C:, Superintendent of Schools, Accounts Payable Manager, Board Attorney, Principal / Administrator Yours truly, School Business Administrator, Board Secretary 15 P a g e

16 Letter to the Vendor Cannot Pay Invoice BOARD OF EDUCATION Address City, State, Zip Date: Re: Invoice No. Please note this is an unauthorized purchase! The Board of Education only recognizes purchases made through the approved purchase order process. Please do not accept any requests for goods or services unless the request is made on a signed purchase order with a purchase order number. We cannot pay this invoice. Yours truly, Enclosure C:, Superintendent of Schools, Board Attorney School Business Administrator, Board Secretary 16 P a g e

17 Strategy #6 Formalize the Purchasing Process It is recommended to formalize the purchasing procedures of the district and to highlight the authorization to purchase process. Suggested methods to formalize the process could be the following: 1. Update Board of Education Policy on Purchasing All school districts, from time to time, should review all board policies and regulations to ensure compliance with current laws and code; and to furthermore, codify the actual purchasing practices of the school district. 2. Adopt Annual Resolution on Authorization for Purchasing The board should adopt on an annual basis, a resolution on Authorization for Purchasing of Goods and Services. Among the suggested topics in the board resolution are: a. Authorization to Purchase; b. Aggregation and Remaining Amount; c. Preparation of Bid Advertisement; Opening of Bids; d. Authorized Purchases; and e. Unauthorized Purchases A sample resolution is attached. 3. Purchasing Manual Preparing and Adoption It is suggested that every school district prepare a working, user friendly purchasing manual. The manual will be the guidebook for all employees to understand the district s purchasing procedures. The manual should be revised on an annual basis and approved by the board of education, prior to the beginning of the new fiscal year. The Purchasing Manual should emphasize again, that the only person in the school district that is authorized to purchase goods and services is the Purchasing Agent. 17 P a g e

18 Authorization for Purchasing of Goods and Services Authorization to Purchase The Board of Education, pursuant to N.J.S.A. 18A:18A-3(a), designates, School Business Administrator, Board Secretary, as the Purchasing Agent for the Board of Education and authorizes him to award contracts, in full accordance with the law, for purchases that do not exceed in the aggregate in a contract year the total sum of $40, (bid threshold) without public advertising for bids. Furthermore, is authorized to solicit competitive quotations pursuant to N.J.S.A. 18A:18A-37(a) and to award contracts pursuant to N.J.S.A. 18A:18A-37(c). Pursuant to N.J.S.A. 18A:18A-2 (b), in the absence of the Purchasing Agent, the Board of Education authorizes to sign purchase orders for the school district. Aggregation and Remaining Amount Your Committee of the Whole, pursuant to N.J.A.C. 5:34-8.3, et seq., further authorizes to seek either competitive quotations or competitive bids when original determinations of aggregation are found to be more than anticipated or incorrect. Preparation of Bid Advertisements; Opening of Bids Pursuant to N.J.S.A. 18A:18A-2(b), is designated to have the power to prepare advertisements, to advertise for and to receive bids., in accordance with N.J.S.A. 18A:18A-21(b) is authorized to publicly receive bids, unseal them and announce the contents. Purchase Order System /Authorized Purchases All purchases made by the Board of Education shall be done through the purchase order system. Pursuant to N.J.S.A. 18A:18A-2(v), a purchase order is a document issued by the purchasing agent authorizing a purchase transaction with a vendor to provide goods or to perform services. Unauthorized Purchases Any Board of Education employee who orders and/or receives any goods and services without going through the approved purchase order process has made an unauthorized purchase. Unauthorized purchases are a violation of State Law N.J.S.A. 18A:18A-2(v) and N.J.S.A. 18A:18A- 3(a). Board employees making unauthorized purchases are subject to disciplinary action as outlined by the Superintendent. Resolution Adopting 20xx - 20xx Purchasing Manual The Board of Education further recommends the Purchasing Manual prepared by, Business Administrator, Board Secretary, be hereby adopted for the 20xx 20xx School Year. The manual outlines the proper purchasing practices that are to be followed by all Board of Education employees to be in compliance with the New Jersey State Law of Education Policy. The Board of Education further empowers the Superintendent of Schools, to impose actions against employees who make unauthorized purchase as defined in the Purchasing Manual. 18 P a g e

19 The Fundamentals of Purchasing Fundamental #2 The Law and Code All decisions made by public officials should be supported by some legal authority. Public School Contracts Law (PSCL) N.J.S.A. 18A:18A-1 et seq. The Public School Contracts Law provides to the Purchasing Agent the laws that must be followed when procuring goods and services for the school district. Administrative Code The following New Jersey Administrative Codes provide to the Purchasing Agent legal support, guidance and further explanation to ensure compliance with the Public School Contracts Law: A. N.J.A.C. 5:34-1 et seq*. Department of Community Affairs Division of Local Government Services The rules have been reviewed and approved by the Commissioner of Education. B. N.J.A.C. 6A:23A-1 et seq. Accountability Regulations C. N.J.A.C. 6A:26-1 et seq. Educational Facilities *This administrative code supports the Public School Contracts Law. Other Legal Citations of Interest Pertaining to Purchasing Item Citation Affirmative Action Requirements N.J.S.A 10:5-31 et seq. Business Registration Certification N.J.S.A. 52:32-44 Contractor s Registration N.J.S.A 34: Expenditure Notification State Comptroller N.J.S.A. 52:15C-10 Federal Funds Procurement 2 CFR Part 200 (Start 7/1/15) Federal Funds National School Lunch 7 CFR Political Contribution Disclosure N.J.S.A. 19:44A-20.13(a) N.J.S.A. 53:34-25 Prompt Payment Law Construction Contracts N.J.S.A. 2A:30A-1 et seq. Shared Services Agreements N.J.S.A. 40A:65-1 et seq. 19 P a g e

20 INDEX TO TERMS PUBLIC SCHOOL PURCHASING Prepared by Mr. James Shoop Managing Member SHOOP SBA, LLC School Business Administrator (Ret.) January P a g e

21 Affirmative Action; Contract Compliance Equal Employment Opportunities in Public Contracts Statute Code/LFN/Other Resource Book 10:5-31 et seq. Public Contracts EEO Compliance Handbook 12/11 LFN :27-1 et seq., LFN Aggregate; Definition 18A:18A-2(l) def. 5: Aggregate; Determination of (Contract Year) 5: et seq. p Aggregate; Vendor Amount Not Determining Factor 5:34-8.2(c)(2)ii3,4 Aggregate Estimates--Incorrect Four (4) Situations 5: and 5:34 -- Appendix A p.17 Americans with Disabilities 42 U.S.C. S et seq. Auctions, Online Disposal of Surplus Property LFN ; LFN Bids; Bidding - Materials; Goods; Services p Addenda to Bids (7 days) 18A:18A-21(c,d) Advertisements (10 days) 18A:18A-21 (a, b) p.59 Affirmative Action Requirements 10:5-31 et seq. Public Contracts EEO Compliance Handbook 12/11 LFN :27-1 et seq., LFN Annual Bids; Determination of Aggregation 18A:18A-9 5:34-8.2(c)(1) Attorney General; County Prosecutor Notified 18A18A-5(d) Bid Acceptance Dates (No Bid Mondays) 18A:18A-21(a) LFN Bid Guarantee (Bid Bond) 18A:18A-24 6A:23A-21.2 p Bid Prices too High or No Bids Received (Combination) 18A:18A-5(c) Bid - Required to 18A:18A-4(a) p.15 Bid Specifications (Restrictions) 18A:18A-15 p Bid Threshold 18A:18A-2(m) def. 18A:18A:3(a) (b) 5:34-5.(4) (Increasing) LFN p.18 Brand Name or Equivalent 18A:18A-15(d) 5: p.44 Business Registration Certification 52:32-44 LFN (G) Contract Language Cancellation or postponement of receipt of bids, competitive contracting, RFP's 5: LFN p p Certificate of Surety 18A:18A-25 6A:23A-21.2 p P a g e

22 Statute Code/LFN/Other Resource Book Challenge to Bid Specifications (3 days) 18A:18A-15(e) p Cost Estimate of Project - 18A:18A-5(c)(2) Required prior to advertising Equal Prices; Bids 18A:18A-37(d) p.77 Exceptions to Bidding -- List 18A:18A-5(a)(b) p Exclusions of Bidders 18A:18A-15 (a-e) False Material Representation 2C: (b) Iran Financial Disclosure 18A:18A :32-55 et seq. Labor and Material Bond p.49 Lowest Price (definition) 18A:18A-2(s) p.77 Lowest Responsible Bidder (def) 18A:18A-2(t) 5: Lowest Responsible Bidder (Award) 18A:18A-4(a) No Bids Received 18A:18A-5(c) Non-Collusion Affidavit 2A:93-6 / 52:34-15 Non-Responsive 18A:18A-2(y) Performance Bond 2A: et seq. 6A:23A-21.2 p.48 Political Contribution Disclosure Form Chapter Required With Bid 6A:23A-6.3 LFN (H) Political Contribution Disclosure Statement 19:44A-20.13(3a) LFN Chapter 271 ($50,000) (Pay to Play) Pre-Bid Meetings; Mandatory (Not Permitted) LFN page 3 Prior Negative Experience 18A:18A-4(a)(b)(c) Receipt; Announcement of Bids/Bid Prices 18A:18A-21(b), 2(b) p.75 Renewal Clause in Bid Package 18A:18A-15(e) p.45 Rejection of All Bids 18A:18A-22 p Right to Know (Worker/Community) 34A:5A-l et seq. Specifications (Free, Open, Competitive) 18A:18A-15 Stockholder s Disclosure/Corp. Ownership 52: Time to Make Award (60 days) 18A:18A-36(a) 6A:26-4.8(b) 60 days receipt of bids 22 P a g e

23 Statute Code/LFN/Other Resource Book Bids; Bidding - Public Works/Construction Bids/Quotes Addenda to Bids 18A:18A-21(c,d) Advertise for Work 18A:18A-18(b) Advertisements (10 days) 18A:18A-21 (a, b) p. 59 Affirmative Action Requirements 10:5-31 et seq. Public Contracts EEO Compliance p Handbook 12/11 17:27-1.1, LFN American Goods 18A:18A-20 Americans with Disabilities 42 U.S.C. S et seq. Architects/Engineers Length of Contracts 18A:18A-42(k) Authorization to Proceed Work 18A:18A-36(b) p.87 Award of Contract 18A:18A-18(c) Award of Contracts; Construction 18A:18A-18(a) p Bid Guarantee (Bid Bond) 18A:18A-24 6A:23A-21.2 p Bid Prices too High 18A:18A-5(c) Bid Specifications (Restrictions) 18A:18A-15 p Bid Specifications -- State Approval 18A:18A-16 Brand Name or Equivalent 18A:18A-15(d) 5: p.44 Business Registration Contract Language 52:32-44 See LFN's p Certificate of Surety 18A:18A-25 6A:23A-21.2 p.48 Challenge to Bid Specifications (3 days) 18A:18A-15(e) p Change Orders 20% Limit 5: (a)(9) Change Orders; Capital Projects 5: et seq. Board Approval (less than 20%) 6A:26-4.9(a)(1) Division of Finance (more than 20%) 6A:26-4.9(a)(2) Change Orders; School Facilities Project 6A:26-4.8(c) 5% Contingency Classification of Bidders p Bidders must be classified ($20,000) 18A:18A-26, 27 Prequalification Affidavit 18A:18A-32 Contractor's Performance Report 18A:18A P a g e

24 Contractor Registration; Public Works ($2,000) 34: et seq. LFN p Contingency (5%)--Capital Projects Cost Estimate of Project - Required prior to advertising Debarred Contractors Statute Code/LFN/Other Resource Book 18A:18A-5(c)(2) 34: ; 18A:18A- 4(b)(4); 2 CFR A:26-4.8(c) 17:19-3.2, LFN SAM Exclusion Federal Equal Prices; Bids 18A:18A-37(d) p.77 Equipment Certification 18A:18A-23 p.46 False Material Representation 2C: (b) Four primes / general construction 18A:18A-18(a) p.64 Handicapped Persons; Facilities for 18A:18A-17 Iran Financial Disclosure 18A:18A :32-55 et seq. Liquidated Damages 18A:18A-41/ 18A:18A-19 p.96 No Material Adverse Change Statement 18A:18A-32 Non-Collusion Affidavit 2A:93-6 / 52:34-15 Notice of Classification 18A:18A-27 et seq. 52:35-1 Number of Working Days 18A:18A-19 Partial Payments 18A:18A-40.1 Performance Bond 2A: et seq. Plans; Separate for Work; Bids 18A:18A-18 Political Contribution Disclosure Statement Chapter 271 ($50,000) 19:44A-20.13(3a) LFN Political Contribution Disclosure Form Chapter Required With Bid 6A:23A-6.3 LFN Pre-Bid Meetings; Mandatory (Not Permitted) LFN page 3 Prequalification Affidavit / Process 18A:18A-32; 18A:7G-34 Prequalification of Construction Mgt. Services 18A:18A-27.1 Prevailing Wages 34: et seq. LFN p Certified Payrolls 6A:26-4.7(c) Contracts Exceeding $2,000 34: (11) (b) 12:60-8.1, LFN P a g e

25 School Facilities Projects 18A:7G-23 Statute Code/LFN/Other Resource Posting of Prevailing Wages 34: Private Contract (Leased Properties) 18A:20-4.3, 4.4, 4.5 LFN Public Work (definition) 34: (5) Prompt Payment -- Construction Projects 2A:30A-1 et seq. LNF p Public Works (definition) 18A:18A-2(z) 5: Receipt; Announcement of Bids/Bid Prices 18A:18A-21(b), 2(b) p.75 Renewal Clause in Bid Package 18A:18A-15(e) p.45 Residency Requirement -- Prohibited 18A:18A-15(b) Resident Citizens Preferred in Employment 34:9-2 Retainage (5%) (2%) 18A:18A-40.3 Return of Deposit for Plans 18A:18A-36(b) Separate Plans 18A:18A-18(a) Specifications (Free, Open, Competitive) 18A:18A-15 State Supported Projects -- Non Authority Certification of Contract Award Project File -- Bids and Awards 6A:26-4.7(c)(1-3) 6A:26-4.7(a)(4) Stockholder s Disclosure/Corp. Ownership 52: Subcontractors; List of Four Primes 18A:18A-18(b) p.64 Total Amount of Uncompleted Contracts 17: / 2.13 Board of Education 18A:18A-2(a) Business Registration Certificate 52:32-44 LFN (G) Business Registration Certificate Language 52:32-44 LFN Books, Magazines, Tapes, DVD's must be educational 6A:23A-9.3(c)(13) Change Orders 6A:23A-21.1; 5: et seq. p Board Approval Required 5: and 5: Capital Projects -- ROD Projects 6A: Capital Projects -- Authority Projects 6A: Book 25 P a g e

26 Statute Code/LFN/Other Resource Book Competitive Contracting 18A:18A-4.1 5: et seq. p.13 Twenty Per Cent (20%) Limit 5: (a)(9) Professional Services; EUS 6A:23A-21.1(e); 5: Work; Service; Materials and Supplies 6A:23A-21.1(d) Administration of Process (QPA, SBA or Board Attorney) 18A:18A-4.3(b) 5: Acceptance Dates (No Bid Mondays) 18A:18A-21 LFN p Contract Limit (5 years) 18A:18A-4.2 p.102 Definition 18A:18A-2(p) Disqualification of Vendor 18A:18A-4.5(b) Documentation Needed--Competitive Contracting 18A:18A-4.4 Employees Must be Notified 18A:18A-4.5(c) Evaluation (RFPs) -- Competitive Contracting 5:34-4.2(a) Evaluations of Proposals Legal Requirements 18A:18A-4.5(d) LFN State Comptroller / p : Administrative Process 5:34-4.3(c) Evaluation Committee -- Conflict of Interest 5:34-4.3(e)(f) Examples of Use 18A:18A-4.1(a-k) LFN Professional Development Notice of Award (Newspaper) 18A:18A-4.5(g) p Process; Provisions - RFP Process 18A:18A-4.3,4.4,4.5 5: , LFN State Comptroller Report to the Board 18A:18A-4-5(f) p Twenty(20) Days from Advertisement; Public Notice 18A:18A-4-5(a) LFN p.57 Concession Competitive Contracting 18A:18A-4.1(j) p Definition 18A:18A-2(aa) (dd) 5: : p Examples of Concessions 5:34-9.4(b) Procurement Process 5:34-9.4(d-f) 26 P a g e

27 Statute Code/LFN/Other Resource Book Construction Management Services 18A:18A-27.1; 18A:7G-33 DLGS Handout Contract (def.) 18A:18A-2(n) 5: Contract Year 18A:18A:2(o) 5: Contracting Unit; Governing Body Definition 5:34-1.2, LFN Contractor definition Contracts 18A:18A-41 Architect; Engineer Contracts 18A:18A-4.2(k) Availability of Funds Clause (multi-year) 18A:18A-42 5:34-3.3(d) p.102 Award of Contracts Board 18A:18A-4(a) Award of Contracts Board Public Works 18A:18A-18(a) p Award of Contract--Prohibited (Pay to Play) 6A:23A-6.3(a)(2) Vendor Contribution to Board Members Award of Contract -- Purchasing Agent 18A:18A-2(b); 18A:18A- 3(a) Contracts Not to be Divided; Prohibited 18A:18A-8 p.15 Exceeding the Bid Threshold 18A:18A-5; 18A:18A-4(a) Execution of (21 Days) 18A:18A-36(b) p.96 Extension of Contracts Rebidding 18A:18A-42 (o) Federal Education Funds; Using 2 CFR Part 200 et seq. Competitive Procurement Required Length of (24 months/12 months) 18A:18A-42; 18A:18A- p.100 3(b) Less than the Bid Threshold 18A:18A-3 18A:18A-3(a) 18A:18A-37(a) Multiyear/Contract Periods 18A:18A-42 5:34-8.1(a)(b) p Multiyear Contracts: Subject to Bid (cumulative amount) 5:34-3.2(a) 5:34-8.1(a)(b) Negotiated Contracts 18A:18A-5(c) Non-Listed Services -- Apply to NJDLGS 5: P a g e

28 Statute Code/LFN/Other Resource Book Opening; Evaluating (RFPs) Competitive Contract 5:34-4.3(a-f) Rejection of Proposals (18A:18A-22) 18A:18A-4.5(d) Renewal (Extension) of Contracts (Services Only) 18A:18A-42 5: (b) p Renewal of Contract (cannot exceed bid threshold) 5:34-8.1(b) Renewal of Contracts--Iran Disclosure Form Required 18A:18A :32-37 Report to the Board; Annual, Ongoing 18A;18A-42.2 Time Period to Award Contract (60) Days 18A:18A-36(a) 6A: (b) p Writing; must be in 18A:18A-40 p.101 Contributions to Board Members 6A:23A-6.3 Cost Estimate - Required Prior to Advertising 18A:18A-5(c)(2) Credit Cards -- Prohibited Annual Audit Program Page I-5.9 Debarred, Suspended Bidders; Contractors Considered "prior negative experience" indicator 18A:18A-4(b)(4) Public Hearing not needed to disqualify 18A:18A-4(c)(5) Definitions; Public School Contracts Law 18A:18A-2 5: Designee, Duly Authorized Purchasing District Emergency Contracts 18A:18A-2(d) 5:34-9.5(e) Definition: Emergency 18A:18A-7 Definition: Emergent Condition 6A: Notification--County Superintendent 5:34-6.1(a)(2) (3 days) Procedures 18A:18A-7(a-d) 5: et seq. p Energy Savings Improvement Program 18A:18A-4.6 LFN page 3 Expenditure Notification -- State Comptroller 52:15C-10 OSC Letter 5/7/08 $2.0 million with 20 days Expenditure Notification -- State Comptroller $10.0 million 30 days Prior to Bid 52:15C-10 OSC Letter 5/7/08 28 P a g e

29 Statute Code/LFN/Other Resource Book Extraordinary Unspecifiable Services (EUS) Award of Contract 18A:18A-37 (a) (b) 5:34-2.3(a) Cannot use EUS for Listed Services 18A:18A-4.1 Certification Required (form on NJDLGS web site) 5:34-2.3(b) Form LFN AU Definition 18A:18A-2(g) 5: Exception to Bidding 18A:18A-5(a)(2) Notice of Award; Public Notice 18A:18A-5(a)(2) 5:34-2.3(c), LFN p : (c) Quotation EUS (excess of bid threshold) 18A:18A-37(b) 5:34-2.3(a) Requirements Limiting Use 5: Use of EUS; Types of Services -- Including 5:34-2.1, LFN AU p Insurance/Insurance Consulting Services False Material Representation 2C: (b) Federal Funds -- Procurement Goods & Services; Public Works 2 CFR Part 200 et seq. Navigating the Uniform Grant Guidance--NJDOE Food Services - National School Lunch Program *7 CFR *Reference Form #187 NJ Department of Agriculture Federal GSA Contracts 18A:18A-10(b) LFN LFN Notification Requirement 5: and 5:34 Appendix C Form Food Services (Management) Competitive Contracting 18A:18A-4.1(f) NJ Dept. of Agriculture Forms Sec. Exception to Bidding 18A:18A-5(a)(22) Contract Term (3 years) 18A:18A-42(m) Food Supplies Food Supplies (def.) 6A:23A-16.5(b) Purchase of Food Supplies 6A:23A-16.5(c,d,e,f) p Purchase of Food Supplies (Exception) 18A:18A-5(a)(6) Milk; Purchase of 18A:18A-6 Gifts; Monetary 18A:18A-15.1 LGS Website (Forms) 29 P a g e

30 Statute Code/LFN/Other Resource Book Goods and Services (def.) 18A:18A-2(q) 5: Index Rate 18A:18A-2(bb) LGS Website -- Actual Rate Insurance; Procurement EUS 18A:18A-5(a)(10) Joint Agreements (with BOE) 40A:11-10(b)(c)(d) Leases; Duration of Contract 18A:18A-42(f) 5: Leases; Rental Agreements; Service Agreements 5: et seq. Availability of Funds Clause 5:34-3.3(d) Payment to Third Party Vendor 5:34-3.3(c) Library/Educational Goods and Services 18A:18A-2(r) def.18a:18a-5(a)(5) Lowest Price -- Definition 18A:18A-2(s) 5: Lowest Responsible Bidder 18A:18A-2(t) Luxury Vehicle (GW 6,000 less) $30,000 limit 6A:23A-6.12(h) Meals; Allowable Expenses 6A:23A-5.8 Meals; Refreshments for Staff Prohibited 6A:23A-7.12(d) Meals; Refreshments (Non-Travel) Purchases 6A:23A-5.8, 6A:23A-7.12(f) National Cooperative Purchasing Contracts 52: LFN LFN Guidance of Use Official Newspaper 35:1-1 et seq. Political Contribution Disclosure Statement ($50,000) (Pay to Play) 19:44A-20.13(3a) LFN Political Contribution Disclosure Form -- Chapter :34-25(2a) LFN ($17,500) Pay to Play -- Include in Bid, Quotation other procurement specifications A:23A-6.3(a)(1-4) Prior Negative Experience 18A:18A-4(a)(b)(c) p Professional Development Services Definition LFN LFN Examples of LFN Competitive Contracting Permitted LFN P a g e

31 Professional Services Contract Term (12 months) Statute Code/LFN/Other Resource Book 18A:18A-3(b) 18A:18A-42 Definition; Explanation 18A:18A-2(h) 5: LFN p Evaluation of RFP LFN State Comptroller Exceptions to Bidding 18A:18A-5(a)(1) Preparation of RFP LFN State Comptroller Public Notice of Award (20 Days) 18A:18A-5(a)(1) LFN :34-9.5(c) p RFP to Procure Services (Suggested) 6A:23A-5.2(a)(5) 6A:23A-9.3(c)(11), LFN Prompt Payment -- Construction Contracts 2A:30A-1 et seq. LFN Proprietary Goods and Services Definition 18A:18A-2(cc) Proprietary Bid 18A:18A-15(d) 5:34-9.1(b); LFN Sole Source Proprietary Computer Software 18A:18A-4.1(a) 5:34-9.1(d) Board of Education Use - Examples Listed Purchases 18A:18A-15(d) 5: p.31 Maintenance--Proprietary Hardware; Software 18A:18A-5(a-19) Public Notices -- Official Newspapers (PSCL) 35:1-1, et seq. LFN Addenda to Bid Advertisement (Seven Days) 18A:18A-21(c)(1) Award of Contract -- Competitive Contracting 18A:18A-4.5(g) 5:34-9.5(c) p (Twenty Days) LFN Award of Contract - EUS (Twenty Days) 18A:18A-5(a)(2) 5:34-2.3(c), 5:34-9.5(c) p LFN Award of Contract - Professional Services 18A:18A-5(a)(1) 5:34-9.5(c) p (Twenty Days) LFN Public Works Definition 18A:18A-2(z) Public Works Definition (Prevailing Wages) 34: (5) Purchase Order definition 18:18A-2(v) 5: P a g e

32 Statute Code/LFN/Other Resource Book Purchase Definition 18A:18A-2(j) 5: Purchases; Educational Value; Reasonableness Purchases Exceeding Bid Threshold (Awarded by Board) Purchasing Orders; Exceeding Original Amount 18A:18A-5 6A:23A-5.5 6A:23A-6.10 Purchasing Agent 18A:18A-2(b) 5: p.11 Purchasing Agent Designee 5:34-9.5(e) p.11 Purchasing Agent (Authorized to Purchase) 18A:18A-2(b) (q) (v) NJQSAC - Fiscal Mgt. SOA #10 p.12 Board Resolution required for awarding contracts less than the bid threshold - 18A:18A-3(a) 18A:18A-3(a) 18A:18A-37(q) Purchasing Agent; Temporary (QPA Vacancy) 5:34-5.5, LFN , LFN Purchases; Confirming; Unauthorized Authorized Purchase 18A:18A-2(v) Confirming, Unauthorized Purchase NJQSAC - Fiscal SOA #10 Qualified Purchasing Agent 18A:18A-3(a) 40A:11-9(b) 5:34-5.1, LFN / p Qualified Purchasing Agent - Exam/Continuing Education 5:34-5.2, LFN / Qualified Purchasing Agent - Renewal of Certification LFN / : Qualified Purchasing Agent - Vacancy of QPA Quotation 5: Temporary Purchasing Agt. Award of Contract (Price and other factors) 18A:18A-37(a) p.81 Definition 18A:18A-2(w) Use of Quotation Process (15% Threshold) 18A:18A-37(a) 5:34-2.3(a) p Renewable Energy Services LFN Renewable Energy Services; Power Purchase LFN Report of Contracts; Annual, Ongoing 18A:18A-42.2 Responsible (def.) 18A:18A-2(x) 5: Responsive (def.) 18A:18A-2(y) 5: P a g e

33 Statute Code/LFN/Other Resource Book Right to Know (Worker/Community) 34A:5A-1 et seq. Sale of Personal Property 18A:18A-45 School; District Improvement Services Definition LFN Examples of LFN Competitive Contracting Permitted LFN Services (definition) 18A:18A-2(dd) 5: Shared Services Definition 6A:23A-1.2 Shared Services Agreements 40A:65-1 et seq. Sole Source Vendor - Not Recognized under PSCL LFN page 9 Special Education Related Services (Procurement) Approved Clinics/Agencies 6A:14-5.1, 5.2; NJ DOE Website Notice of Intent 6A:14-5.1(d) Request for Proposal (RFP) Process RFP Process for Competitive Contracting 18A:18A-4.4 RFP Preparation Process LFN "Best Practices for Awarding Services Contracts" State Comptroller RFP Evaluation Process LFN "Best Practices for Awarding Services Contracts" State Comptroller RFP to Procure Professional Services (Suggested) 6A:23A-5.2(a)(5) LFN A:23A-9.3(c)(11) Evaluation of RFP - State Comptroller LFN Preparation of RFP -- State Comptroller LFN Suggested Use for RFPs 6A:23A-5.2(a) 56A:23A-9.3(c)(11) LFN State Comptroller Best Practices Awarding LFN Contracts State Contract Purchases; NJ State Contract Purchases 18A:18A-10(a) 5: p Exceeding Bid Threshold (Board Resolution) 5: (c) Identifier 1NJCP on Purchase Order 5: (a) (e) 33 P a g e

34 Statute Code/LFN/Other Resource Book Student Activity Account Purchases 18A:18A-5(a)(21) Ten Percent (10%) Below State Contract Law 18A:18A-5(e) Procedures 5: : Form p Textbooks; Purchase of 18A:18A-4(d) 18A:18A-2(r) Textbooks; Leasing of (Exception to Bid) 5:34-3.2(c) Textbooks; Conditions to be met when purchasing 6A:23A-9.3(c)(12) Trade In (Offset Price of New Purchase) 18A:18A-45(g) Training for officials; employees--purchasing 5:34-1.1(b) Vending Machines (Exception) 18A18A-5(a)(23) Not a Concession 18A:18A-2(aa) 5:34-9.4(a) Vendors Relations Policy 6A:23A-6.3(a) Violations Violation of Public School Contracts Law Penalty: State Aid Withheld Work (definition) 18A:18A A:18A-2(x) 6A:23A-5.4 6A:23A-5.1(h) Book: Focus on; Public School Contracts Law Donna M. Kaye, Esq New Jersey School Boards Association January 2016 Report: State Comptroller Report Best Practices for Awarding Service Contracts March 4, LFN Suggestions 1. Keep the Index to Terms close to your desk 2. Send a copy to your board attorney 3. Throw out an earlier edition Prepared by Mr. James Shoop, Managing Member SHOOP SBA, LLC Shoop18A18A@gmail.com 34 P a g e

35 The Fundamentals of Purchasing Fundamental #3 Resources for Purchasing Agents Resource Website NJASBO Purchasing Agents are presented with a wealth of information as it pertains to Public School Purchasing. In the Resource Section Purchasing, some of the items that may be downloaded are: Purchasing Manual Sample Quotation Boilerplates Sample Bid Boilerplates Affirmative Action Assistance NJASBO also permits members to request items and assistance from other members. New Jersey Division of Local Government Services The NJDLGS provides a wealth of information for Purchasing Agents, including an entire section on the website pertaining to procurement Click Public School Contracts Law. The Division is also responsible for distribution Local Finance Notices which explain the various laws and codes about purchasing. (Attachment LFN ) New Jersey Division of Purchase and Property This NJDPP is responsible for purchasing goods and services for the State of New Jersey. Many of these state contracts are available for use by school districts. Purchasing Agents are encouraged to visit the site and click on Cooperative Purchasing for an introduction to State Contract Purchasing. New Jersey Division of Wage and Hour A visit to the NJ Department of Labor and Workforce website wage and hour section, will introduce the Purchasing Agent to all information needed as it pertains to prevailing wages and public works contracts. Remember the $2, threshold for prevailing wages. 35 P a g e

36 The Fundamentals of Purchasing Fundamental #3 Resources for Purchasing Agents (Continued) Resource Website New Jersey State Comptroller The State Comptroller provides guidance to Purchasing Agents as it pertains to procuring and awarding service contracts that are procured through the RFP process. It is important for all Purchasing Agents to download the Comptroller s Best Practices for Awarding Service Contracts Center for Government Services Rutgers University cgs.rutgers.edu The Center provides to the Purchasing Agent a list of courses for advanced study in purchasing. Other Resources for Purchasing Agents There are many, many other purchasing resources for Purchasing Agents. A final one of particular note is Collegiality NJABSO members It is important that you develop at an early age, a collegiality spirit to help other SBA s and Purchasing Agents in the business. I have taken pride over the years to do so and I offer to you at this time for attending this session Lifetime Technical Support You may contact me at my Consulting Business address for guidance Shoop18A18A@gmail.com 36 P a g e

37 LOCAL FINANCE NOTICES INDEX NEW JERSEY DIVISION OF LOCAL GOVERNMENT March 2017 Topic LFN Date Page Comment Affirmative Action EOF August 18, 2008 Percentage for training eliminated Affirmative Action for Public Contracts New Rules June 21, 2005 Contracts must exceed the bid threshold Awarding Service Contracts March 26, 2010 State Comptroller Guidelines Bid Acceptance Dates January 4, 2013 Annual Notice Issued Bid Threshold Notice June 17, 2010 Notice Given Every Five (5) Years Bids; Mistakes vs. Clerical Errors March 18, 2011 Local Public Contracts Law Only! Business Registration Certificate (BRC) August 6, 2004 Initial LFN about BRC Business Registration Certificate (BRC) October 20, 2004 BRC Update Business Registration Certificate (BRC) April 27, 2010 BRC Update II Business Registration Certificate (BRC) June 4, 2007 p. 6 BRC Submission not fatal - Re: with bid Business Registration Certificate (BRC) January 27, 2010 p. 5 BRC Filed Prior to Award Competitive Contracting Acceptance Dates December 28, 2009 Annual Notice Issued Competitive Contracting Examples of Use January 13, 2010 p. 8-9 Professional Devel/District Improvement Ser. Contractor Registration; Public Works April 28, 2010 Explains the law the nine principles Contracts; Federal Procurement January 13, 2010 p EDGAR Procurement Rules Debarred Contractor June 4, 2007 p. 3 Further explains the law Energy Savings Improvement Program (ESCO) June 12, 2009 ESIP Extraordinary Unspecifiable Services (EUS) AU February 26, 2002 Explains EUS process with examples Federal GSA Contracts January 13, 2010 p. 4-5 Only permits GSA State Contract National Cooperative Purchasing Contracts January 13, 2010 p. 4-5 Prohibitions; Exceptions (state contract) National Cooperative Purchasing Contracts May 14, 2012 Application/Guidelines of Use Online Auction Procedures; Selling Surplus Property April 28, P a g e

38 Topic LFN Date Page Comment Online Auction; Sale of Surplus Property December 3, 2008 p. 1-3 Update to procedures Pay to Play Chapter June 4, 2007 for BOE's - Includes exceptions Pay to Play Chapter January 13, 2010 p. 7-8 PCD's not required for non-profits Pay to Play Chapter January 13, 2010 P. 8H PCD's for Boards of Education Pay to Play Chapter January 18, 2006 BOE Responsibilities for Pay to Play Pay to Play Municipalities March 7, 2006 Update - Mostly for Municipalities Pay to Play Update BOE June 4, 2007 Update - BOE with Exemptions Pre-Bid Meeting June 12, 2009 p. 3 Cannot be mandatory Prevailing Wages June 4, 2007 p. 2-4 Prevailing Wages Update Professional Development Services January 13, 2010 p. 8-9 Competitive Contracting Use Professional Services -- Definition January 13, 2010 p. 3-4 Contract Professional Services Professional Service Awards Over Bid Professional Services -- Public Notice of Award January 13, 2010 p. 2 Threshold Professional Services -- Subcontracting January 13, 2010 p. 3 Related Services Prompt Payment -- Construction Contracts November 1, 2006 Explanation of Law Public Notices -- Award of Contracts January 13, 2007 p. 2 Explains how notices are to be prepared Public Notices -- Awards of Contracts January 13, 2010 p. 2 Threshold amount; Notice set-up Qualified Purchasing Agent (QPA) June 27, 2010 p. 2-3 Update -- New training requirements Qualified Purchasing Agent (QPA) Renewal August 10, 2012 Renewal of QPA Certification Qualified Purchasing Agent Certification - New Rules October 6, 2014 New rules on Certification & Renewals--Green Purchasing Qualified Purchasing Agent; Boards of Education (QPA) May 5, 2011 Update on QPA and Boards of Education Qualified Purchasing Agents - (QPA) Exam April 27, 2012 Continuing Educational Requirements Renewable Energy Services December 3, 2008 Renewable Energy Services; Power Purchase June 12, 2009 Sole Source Vendor; Provider January 13, 2010 p. 9 Not recognized PSCL Statement of Ownership December 1, 2016 Updates Ownership Form 38 P a g e

39 The Fundamentals of Purchasing Fundamental #4 Know the Numbers! Public School Purchasing Limits The Purchasing Agent must become familiar with many different thresholds and limits as it pertains to public school purchasing. For example! Chapter 271 Political Contribution Disclosure Form amount? $ New Jersey Business Registration Certificate amount? $ Prevailing Wages amount? $ Federal Funds Micro-purchase amount? $ Expenditure Notification Amount 20 Day Rule $ NJ State Comptroller? (See attached Public School Purchasing Limits) Purchase Orders and Contract Requirements The Purchasing Agent must become familiar with what documents* are needed prior to the Purchasing Agent signing a purchase order. I have provided a sample chart to assist the Purchasing Agent. *Documents: Prior to Signing a Purchase Order 1. Affirmative Action Evidence 2. Business Registration Certificate 3. Chapter 271 Political Contribution Disclosure Form 4. Disclosure of Activities in Iran Form-????? 39 P a g e