PROCUREMENT PROCEDURES MANUAL

Transcription

1 PROCUREMENT PROCEDURES MANUAL FOR CITY OF ANDERSON TRANSIT SYSTEM Index June 4, 2014

2 Section page SECTION I: INTRODUCTION 3 SECTION II: SPECIAL REQUIREMENTS 3 Buy America... 3 Disadvantaged Business Enterprise (DBE)... 3 Small and Small Local Business Enterprise (SBE, SLBE)...4 Equal Employment Opportunity/Title VI... 6 Debarment and Suspension... 7 Life Cycle Costing... 8 Inventory and Audit... 8 Scrap and Surplus... 9 Pre-Award and Post-Delivery Audits of Rolling Stock Purchases SECTION III: PROCUREMENT METHODS 10 Competition Consortium Piggy-backing State Bids Procurement Procedures Small purchases Small purchases Price Quotation Procedure (Quote) Invitation for Bid (IFB) Request for Proposal (RFP) Request for Qualifications (RFQ) Noncompetitive Process (Sole and Single Source Purchases) Competitive Bid Process Cost/Price Analysis SECTION IV: CONTRACT ADMINISTRATION 18 Project Management Contract Amendments and Change Orders Contract Files Inspection and Acceptance Contract Closeout Procedures Negotiations Selection Award Protest Procedures APPENDIX: INDEPENDENT COST ESTIMATE Independent Cost Analysis Price Analysis Cost Analysis Applicability of Third Party Forms FTA Required Clauses and Documents 2

3 SECTION I: INTRODUCTION Procurement is the process of purchasing goods or services. City of Anderson Transit System must follow these guidelines when purchasing supplies, equipment and services funded with Section 5307or Certain procurement items will require City of Anderson Transit System to contact the Indiana Department of Transportation (INDOT) or Federal Transportation Administration (FTA) for further information and guidance. INDOT is responsible for seeing that all state requirements pertaining to procurement are followed by systems when using funds administered by INDOT (PMTF). Transit systems may conduct their own procurement, with oversight from INDOT/FTA, to allow greater flexibility to meet local needs. Agreements for federal capital funds will be executed after INDOT/FTA grant awards. Although the procurement process may be initiated before the transit system has a signed agreement, an acknowledgement of financial responsibility under INDOT/FTA s guidelines for "Advance Authority to Incur Costs" must be document and the Board of Works must approve P.O. and any payment before the grant is approved. Documentation of this process must list the project(s) and the federal ceiling amount for the project. SECTION II: SPECIAL REQUIREMENTS Buy America All City of Anderson Transit System procurements are subject to the Buy America provisions of Section 165 of the Surface Transportation Assistance Act of 1982, 49 U.S.C. 1601, Section 337 of the Surface Transportation and Uniform Relocation Assistance Act of 1987, and 49 CFR Parts 660 and 661. Buy America Certificate, as per 49 CFR Part or 12, must be completed and submitted with the bid. A bid which does not include the certificate will be considered non-responsive. A waiver from the Buy America requirements may be sought by City of Anderson Transit System if grounds for the waiver exist under 49 CFR Part In order to qualify as a domestic endproduct, the cost of all domestic made components must exceed sixty percent (60%) of the total cost and the product must be produced in the United States. Disadvantaged Business Enterprise (DBE) The City of Anderson Transit System Public Transportation Corporation, doing business as the City of Anderson Transit System Indiana Transit System (City of Anderson Transit System), has established a Disadvantaged Business Enterprise (DBE) program in accordance with regulations of the U. S. Department of Transportation (DOT), 49 CFR Part 26 (See Appendix I). City of Anderson Transit System has received Federal financial assistance from the Department of Transportation, and as a condition of receiving this assistance, City of Anderson Transit System has signed an assurance that it will comply with 49 CFR Part 26. It is the policy of City of Anderson Transit System to ensure that DBEs, as defined in Part 26, have an equal opportunity to receive and participate in DOT-assisted contracts. It is also City of Anderson Transit System objectives to: 3

4 1. Ensure nondiscrimination in the award and administration of DOT-assisted contracts; 2. Create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; 3. Ensure that the DBE Program is narrowly tailored in accordance with applicable law; 4. Ensure that only firms that fully meet 49 CFR Part 26 eligibility standards are permitted to participate as DBEs; 5. Help remove barriers to the participation of DBEs in DOT-assisted contracts; and 6. Assist the development of firms that can compete successfully in the market place outside the DBE Program. The Director of Operations has been delegated as the DBE Liaison Officer. In that capacity, the Director of Operations is responsible for implementing all aspects of the DBE Program. Implementation of the DBE Program is accorded the same priority as compliance with all other legal obligations incurred by City of Anderson Transit System in its financial assistance agreements with the Department of Transportation. City of Anderson Transit System will disseminate this policy statement to all components of the City of Anderson Transit System organization. City of Anderson Transit System will distribute this statement to DBE and non-dbe business communities performing work for City of Anderson Transit System on DOT-assisted contracts through the contract documents. Program Implementation - On a continuing basis, City of Anderson Transit System identifies and certifies DBEs who are capable of providing services and supplies. Annually, City of Anderson Transit System projects the number and types of contracts to be awarded and the number and types of DBEs likely to be available to compete for contracts. DBE contractors are encouraged to compete as prime contractors. City of Anderson Transit System is committed to undertaking special efforts to seek socially and economically disadvantaged firms. DBE goals are established annually for City of Anderson Transit System annual procurements with contracting opportunities, as well as on a project-to-project basis. Small and Small Local Business Enterprises It is the policy of City of Anderson Transit System (CATS) to ensure that small business enterprises, as defined in federal regulations at 13 CFR Part 121, and small local businesses located within the service area, have equitable opportunity to participate in procurements of goods, material and services, including construction projects. In order to provide economic opportunity for small local businesses, and to stimulate economic development in communities served by the CATS, the CATS will develop and implement procedures designed to maximize contract award opportunities for these companies. Procedures shall include set asides and preferences, as further defined in this Policy. Intended Impacts of this Policy Increase opportunities for contract awards to small local businesses participating in CATS contract and procurement activities; 4

5 Increase the circulation of dollars within the City of Anderson service area; and Promote the development of the small local business community. Definitions Small Business, Small Business Enterprise (SBE) - A business with not more than a specified amount of average gross annual receipts over the previous three (3) years, as defined by the United States Small Business Administration s size standard for the type of work conducted. Small Local Business Enterprise (SLBE) - A business located within City of Anderson Transit System s service area and certified as a small business by an authorized agency. Federal Transit Administration (FTA) Small Business Enterprise (SBE) regulations and provisions will apply to federally funded procurements. A. The City of Anderson recognizes the difficulties small businesses may encounter when competing against larger more established businesses. In order to assist, the city will seek to utilize SBEs and SLBEs to the extent permissible by law, when such businesses are available and the price of their goods, material or services sought is reasonable and competitive in the marketplace. B. The City of Anderson will establish overall annual goals for SBE and SLBE utilization and the goals will be expressed as a percentage of total annual payments made by the city in the procurement of goods, materials and services. C. The City of Anderson Transit System will not award bid points or give percentage preferences to small local businesses. D. Procurement purchases of goods, material, and services below the bid limits, and not subject to competitive bidding, are required to be issued according to the City of Anderson s nondiscrimination and non-preferential treatment policies, and CATS staff will be expected to select and utilize bidders and contractors according to this policy. E. Discretionary spending for purchases of goods, material and supplies up to $10,000 shall be formally conducted using the Area s SBE & SLBE policy when a reasonable expectation exists that at least two responsible small business concerns can offer the goods, services or material at fair market prices. 1. For federally funded purchases, the Area will target SBEs. 2. For non-federally funded purchases, the Area will target SLBEs first, and then target SBEs second. F. Non-federally funded contracts (including Construction and Service contracts) for goods, material and services greater than $10,000 will be reviewed, and SLBE subcontracting goals will be included based upon an availability analysis to determine whether subcontracting opportunities exist. Bids/Proposals will be reviewed for the prime contractor s SLBE subcontractor participation and/or good faith efforts; and the successful prime contractor will be required to provide reports of SLBE subcontractor payments for the duration of the contract. G. For federally funded contracts, and as a race neutral effort to support CATS Disadvantaged Business Enterprise Program established pursuant to 49 CFR Part 26, CATS will evaluate each 5

6 contract for SBE prime and subcontracting opportunities. A determination will be made of the availability of small businesses (with no local component per federal requirements) that may be ready, willing and able to compete for such procurements subcontracts, and include a specific SBE subcontract percentage goal. CATS will require all bidders to provide a list of the SBE subcontractors to be utilized to meet the SBE goal; and will require good faith efforts documentation for bidders not meeting the SBE subcontract goal prior to award of contract. CATS will require the successful prime contractor to provide quarterly reports of payments to SBE subcontractors. H. SBEs and SLBEs will be given first priority in the performance of work in a public exigency or emergency. I. CATS will insure timely payment to small local businesses upon receipt of properly documented invoices or other contract billings. J. CATS will institute a program of outreach activities, including procurement networking sessions, roundtables and workshops, to make it possible for small local business owners to meet key contracting personnel and be counseled on the procurement and contract processes. CATS will establish and maintain relations with community groups and attend meetings to provide information and guidance on this small local business policy. K. CATS will provide ongoing training to procurement and contracting staff to assure adherence to this Policy. CATS will assign appropriate and sufficient staff to oversee and administer all components of the SBE/SLBE program. L. In order to insure its legality, effectiveness and integrity, this Policy is neutral as to race, ethnicity, national origin, age, sex, religion, sexual orientation, disability or veteran status. Any small local business seeking inclusion in the pool will be able to apply. M. To the extent that it is a condition of a federal, state or other funding source that the Area comply with Small Business Enterprise, Disadvantaged Business Enterprise, Minority and Women Business Enterprise and/or Disabled Veteran Business Enterprise requirements. Equal Employment Opportunity/Title VI City of Anderson Transit System procurement process shall carry out the provisions of the equal employment opportunity requirements of Section 19 of the UMT Act of 1964; Title VI regulations issued by the U. S. Department of Justice (DOJ), 28 CFR Part 42, Subparagraph F, and the U. S. Department of Transportation (DOT) 49 CFR Part 21. (See Appendix 6.7) This shall insure that no person shall on the grounds of race, color, creed, national origin, sex, or age be excluded from participation in, or denied the benefits of, or be subject to discrimination under any project, program, or activity. This shall apply to employment and business opportunities. Debarment and Suspension City of Anderson Transit System shall not participate in any contractual relationship with a contractor that is currently debarred by the Federal Government. The General Services 6

7 Administration maintains a current consolidated list of all contractors debarred, suspended, proposed for debarment, or declared ineligible by Government agencies or by the General Accounting Office. All bidders will be required to certify they are not on the consolidated list of ineligible contractors in accordance with 49 CFR Part 29. (See Appendix 6.31) In order to protect the public's interest, City of Anderson Transit System may have occasion to initiate its own debarment and suspension actions. Debarment is defined as an action initiated by the Director of Operations intended to exclude an organization from contracting or subcontracting for a reasonable period of time. A contractor may be debarred for several causes including: A conviction of or civil judgment for the commission of fraud; The commission of a criminal offense which involves obtaining, attempting to obtain, or performing a public contract or subcontract; Violation of Federal or State antitrust statutes related to the submission of offers; Crimes such as embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; and Violation of the ethics provisions of this procurement manual. Other causes for debarment include lack of business integrity or business honesty that directly affects the responsibility of a contractor or subcontractor. City of Anderson Transit System will not participate in de facto debarment of contractors. De facto debarment involves the exclusion of potential bidders based upon non-performance on specific prior contracts without allowing them to bid and making a formal non-responsibility determination. City of Anderson Transit System will allow affected persons due process prior to taking any debarment action. City of Anderson Transit System will initiate debarment only in instances of actions on the part of the contractor that satisfy one or more of the causes of debarment set forth above. The Director of Operations shall be responsible for implementing the due process procedures for debarment and suspension actions. The procedures outlined below will be followed when a debarment proceeding is initiated. The contractor will be advised that debarment is being considered: Of the reasons for the proposed debarment; Of the conduct or transaction(s) upon which the action is based; Of the cause(s) relied upon for proposing debarment; Of the potential effect of a debarment; Of the date, time and place where the Contracting Officer will hear and receive all evidence concerning the proposed debarment; Of the debarring official's decision; Of settlement and voluntary exclusion procedures; Of the period of debarment; and 7

8 Of the scope of debarment. Life Cycle Costing Life cycle costing is the measure of the total cost of a product over its service life, including maintenance; incidental cost for tools or installation, and expected useful life span. City of Anderson Transit System reserves the right to apply life cycle costing to purchases in the formal bidding process, and bidders may be required to provide information, as may be necessary, to perform such analyses. If City of Anderson Transit System elects to use life cycle costing, it shall be included in the invitation for bids (IFB) specifications. Inventory and Audit Real Property and Equipment - The City Controller shall maintain an on-going inventory of all real property and equipment. Real property and equipment records must include a description, identification number, source, acquisition date, cost, percentage of Federal participation in the cost, the grant project under which it was procured, location, use and condition, and any disposition date, including the date of disposal and sale price or, where applicable, the method used to determine its fair market value. City of Anderson Transit System should also state who holds title to the equipment. A physical inventory of equipment must be taken and the results reconciled with equipment records at least once every two (2) years. Any differences must be investigated to determine the cause of the difference. In connection with this inventory, City of Anderson Transit System shall certify the existence, current use, and continued need for the equipment. The requirement for this certification continues throughout the useful life or until disposition of project equipment. It must be based on an adequate equipment management record system and states for each grant that: Equipment acquired under the grant will continue to be used for the purpose for which the grant was approved; The equipment does not exceed the needs of City of Anderson Transit System' transit operations; None of the equipment has been sold, damaged, lost or otherwise taken out of transit service; and A physical inventory and verification have been taken at least once during the preceding two (2) year period. If any of these assurances cannot be made, the Department Director shall submit a statement that details relevant information such as date, items involved, nature of the loss and the original grant number under which it was procured. The latest biennial inventory will be kept on file. The report will be submitted to the General Manager. 8

9 Parts - The Director of Operations will conduct an annual physical inventory of parts and reconcile the parts-in-stock versus those on hand. A variance report will be prepared by the Director of Operations and submitted to the General Manager identifying discrepancies in the count of line items and their value. Scrap and Surplus The identification of surplus and scrap shall be the responsibility of the Director. Equipment shall be surplus when it becomes obsolete to City of Anderson Transit System either because it has been replaced by more cost-efficient equipment, or because the equipment no longer supports the mission of City of Anderson Transit System. Equipment shall be scrapped when it is non-functional and non-repairable, or when it is obsolete to City of Anderson Transit System. Parts are surplus when stock-on-hand exceeds the maximum as established due to the history of demand. It is the policy of City of Anderson Transit System to dispose of surplus and scrap in the most effective manner available, and in conformity with FTA C5010.1A, FTA C9030.1A, FTA Circular latest version FTA 4220 and State Statute I.C Disposal of all surplus stock and/or equipment must be authorized by the General Manager, except that disposal of items of surplus stock and equipment valued in excess of Five Thousand Dollars ($5,000.00) and all vehicles must be approved by the Board of Works. City of Anderson Transit System shall give notice of any surplus stock to the office of the mayor of the City of Anderson, Indiana at least 10 days prior to proceeding with any steps to dispose of the surplus stock. Surplus stock will be disposed of by using one of the following methods: Return to supplier for credit or refund; Transfer with another government entity, (I.C ); Traded in on new stock and/or equipment; and of Surplus (I.C ). If the surplus item or items to be sold are one (1) item, with an estimated value of One Thousand Dollars ($1,000.00) or more; or more than one (1) item, with an estimated total value of Five Thousand Dollars ($5,000.00) or more; City of Anderson Transit System may sell the personal property at a public auction conducted by an auctioneer licensed under I.C , after advertising the personal property for sale as provided below. However, if an auctioneer is not engaged, the disposing agent shall sell the property at a public sale or by sealed bids delivered to the office of the General Manager before the date of sale. All sales shall be made to the highest responsible bidder. Advertisement of all sales shall be published in the Herald Bulletin two (2) times, at least one (1) week apart, with the second publication being fifteen (15) days before the sale, or the date for opening sealed bids (I.C e & ). All advertisements for sealed bids shall provide notice that City of Anderson Transit System has the right to reject any and all bids and if the bid on any one item is less than Five Thousand Dollars the Board may after rejecting a bid transfer the item to another government entity. If the sale is by an auctioneer, the auctioneer shall also advertise the sale and include a detailed description of the property to be sold in the advertisement. 9

10 If the surplus items to be sold are one (1) item, with an estimated value less than One Thousand Dollars ($1,000.00) or more than one (1) item, with an estimated total value less than Five Thousand Dollars ($5,000.00); City of Anderson Transit System may sell the property at a public or private sale or transfer the property without advertising. All surplus stock and/or equipment shall be appraised to determine fair market value prior to selling or trading on new stock and/or equipment. Scrap will be disposed of by using one of the following methods: Scrap that has been collected in conjunction with a recycling program may be sold without advertising at a public or private sale. Scrap that is worthless may be demolished or junked. Pre-Award and Post-Delivery Audits of Rolling Stock Purchases On September 24, 1991, the FTA, issued regulations (49 CFR Part 663) that affect the purchase of federally-funded vehicles. City of Anderson Transit System is required to assure that Federal Motor Vehicle Safety Standards (FMVSS), "Buy America" requirements, and their own bid specifications are met prior to contract award and after a vehicle delivery for all vehicle purchases. SECTION III: PROCUREMENT METHODS Competition The primary purpose of these procurement guidelines is to obtain optimal quality and service at minimum cost through free and open competition. A secondary purpose is to guard against favoritism and profiteering at public expense, and to provide equal opportunities to participate by every potential vendor. Your procurements should be designed to ensure that all qualified vendors have a fair opportunity to benefit from spending public funds. City of Anderson Transit System s procurement process is one in which two or more vendors attempt to secure business by the most favorable price, quality, and service. These procurement practices only rule out vendors for sound business reasons. Exclusionary practices that INDOT regards as limiting competition for reasons other than business or bona fide policy goals are not allowed. Two sources/vendors are not considered adequate if there are additional sources/vendors in the area that are fully qualified to compete. INDOT will not fund procurements that restrict competition by using exclusionary or discriminatory specifications such as: placing unreasonable requirements on firms in order for them to qualify to do business; requiring unnecessary experience and bonding; allowing noncompetitive practices between firms (collusion, price fixing); noncompetitive awards to any person or firm on retainer contracts; conflicts of interest within the agency; specification of a name brand product without listing its salient characteristics and not allowing an alternative product to be offered; 10

11 using any arbitrary action in the procurement process; and geographic preference. Geographic preference for local or state firms is prohibited, except in cases where federal statutes expressly mandate or encourage geographic preferences. Geographic location may be a selection criterion in the purchase of architectural and engineering services provided that an appropriate number of qualified firms compete for the contract. City of Anderson Transit System may conduct its own procurement, join with other systems in a consortium procurement led by one of the participants, use a state-administered procurement conducted on behalf of one or more transit systems, or use an existing state contract if the procurement process satisfies FTA and INDOT requirements. Consortium A consortium is a competitive procurement involving more than one transit system. Each transit system must agree on the specifications and work together with one lead person to develop common specifications. Piggy-backing The post award practice of allowing someone who was not included in the original procurement to purchase the same supplies or equipment through the original contract is allowed under specific situations: 1. the original solicitation must include an assignability clause that provides for the assignment of all or part of the deliverables as originally advertised and competed; 2. the original solicitation and contract must contain both a minimum and maximum quantity; 3. no additional quantities can be added; and 4. units must be as originally specified with no "cardinal changes." State Bids Each year the State of Indiana establishes contracts for purchases of vehicles, tires, radios, fuel and other items. To the extent that these state bids meet FTA procurement requirements, transit systems may purchase equipment from the existing state bids. The TPA will provide the city with information on whether equipment is available to purchase by this method. Procurement Procedures Procedures used for purchasing materials or services include small purchases, price quote, invitation to bid, request for proposal, and request for qualifications. The procedure to use is determined by the cost estimate of the procurement and/or by the nature of the service or product needed. The city may set lower limits for quote procedures. The General Manger should verify what the local restrictions are before deciding on which procurement procedure to use. 11

12 All purchases with federal funds must comply with Buy America regulations. The transit system should state the Buy America regulation on the purchase order or require that Buy America certification be submitted when purchasing items using a price quote procedure. Purchases qualifying for the small purchase procedure (whether used or not) are not subject to requirements of advance INDOT concurrence. Although advance concurrences may not be required, documentation of proper procurement procedures and principles of free and open procurement will be followed. Documentation of the procedures may be required at the time payment is requested, or subsequently as part of a compliance review. The system may request INDOT concurrence at any stage during procurement. Small Purchase Price Quote Invitation for Bid (IFB) Request for Proposal (RFP) Request for Qualifications (RFQ) Amount of Purchase Total under $2,500 Total under $75,000 Purchases $75,000 or more Purchases $75,000 or more Nature of Product or service Standardized Product/service Standardized Product/service Standardized Product/service Services cannot be precisely defined and/or price is only one factor for evaluation Architectural and Engineering Competitive Yes Yes Yes Yes INDOT Concurrence No No Yes Yes Yes Small purchases Small purchases are procurements under $2,500 and can be made without obtaining competitive quotations if the grantee determines that the price is fair and reasonable. These purchases should be equitably distributed among qualified suppliers in the local area. No purchases will be split to be under the dollar threshold to avoid competition. The Davis-Bacon Act applies to construction contracts greater than $2,000, even though small purchases. Documentation must include how the determination was made that the price is fair and reasonable. Price Quotation Procedure (Quote) The price quote procedure will be used for goods or services costing less than $75,000. It is the value of the total contract that determines the procedure to use. If the individual item is under $75,000, but the approved project is $75,000 or more, the city requires the formal bid procedure even if the items are purchased individually. The step-by-step process to purchase by price quote: 1. verify with INDOT that quote procedure is the correct method for purchase; 2. develop specifications, include INDOT/FTA certifications and written specifications; 3. solicit quotes by phone, mail or in person (at least two quotes, preferably three or more); 12

13 4. analyze quotes, obtain Board of Works approval from lowest quote vendors; 5. announce intent to award to firms submitting quotes; and 6. issue purchase order. Invitation for Bid (IFB) The IFB procurement process is used when complete specifications or purchase descriptions are available. An IFB is most commonly used to obtain prices for specific goods and services. The IFB process must involve two or more bidders and the award is given to the lowest responsible bidder. Design specifications of goods and services to be procured under an IFB are not subject to negotiation. Bids that deviate from the specifications are rejected as nonresponsive. Request for Proposal (RFP) The RFP procurement process is used when a general, rather than specific description of goods and services is used. The RFP method is used typically for planning, purchases of transit services, ITS equipment and software, and other projects that entail complex purchase factors. This method allows for the procurement of goods and services without detailed design specifications. The primary consideration in awarding bids need not be price. Vendors typically submit a "statement of work" and a "cost proposal." Contractors have flexibility in how the goods or services are produced and the award is based on an evaluation of price and a number of criteria. Communication with vendors is used to negotiate an optimal contractual agreement, in which both price and evaluation criteria are used in selecting a bidder. Awards are based on an evaluation of price and quality. Final price may be negotiated with the vendors deemed to be in the "competitive range" of proposals submitted. Appendix II is a copy of the RPF and RFQ procurement process format. Request for Qualifications (RFQ) Procurement of Architectural and Engineering (A & E) Services A competitive procedure based on the Brooks Act is used when contracting for A & E services. Other types of services considered A & E include program management, construction management, preliminary engineering, design, surveying, mapping and services that require performance of a registered or licensed architect. The Brooks Act requires that: 1. a vendor's qualifications be evaluated; 2. price be excluded as an evaluation factor; 3. negotiations be conducted with only the most qualified vendor; 4. failing agreement on price, negotiations with the next most qualified vendor be conducted until a contract award can be made; and 5. negotiations cannot be reopened with a party once the next vendor has been contacted. Geographic preference may be used in A & E procurements as long as a reasonable number of contractors are available. Noncompetitive Process (Sole and Single Source Purchases) Sole source procurements are allowed only when the award of a contract is infeasible under small purchase procedures, sealed bids, or competitive proposals and at least one of the following conditions apply: 13

14 1. the item is only available from one source; 2. public emergency will not permit the delay resulting from competitive solicitation; 3. FTA authorizes noncompliance negotiations; 4. after solicitation of a number of sources, the competition is determined inadequate; or 5. the item is an associated capital maintenance item. REQUIREMENT In addressing the various methods of procurement that may be used, Section 9.h of FTA Circular latest version of FTA 4220 provides: Procurement By Noncompetitive Proposals (Sole Source). Sole source procurements are accomplished through solicitation or acceptance of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. A contract amendment or change order that is not within the scope of the original contract is considered a sole source procurement that must comply with this subparagraph. 1. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids, or competitive proposals and at least one of the following circumstances applies: (a) The item is available only from a single source; (b) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; (c) FTA authorizes noncompetitive negotiations; (d) After solicitation of a number of sources, competition is determined inadequate; or (e) The item is an associated capital maintenance item as defined in 49 U.S.C. 5307(a)(1) that is procured directly from the original manufacturer or supplier of the item to be replaced. The grantee must first certify in writing to FTA: (i) that such manufacturer or supplier is the only source for such item; and (ii) that the price of such item is no higher than the price paid for such item by like customers. 2. A cost analysis, i.e., verifying the proposed cost data, the projections of the data, and the evaluation of the specific elements of costs and profit, is required. Purpose - Public procurement essentially operates in an environment where full and open competition is the primary goal or aspiration and, in many cases, is a mandate. However, there may be very legitimate reasons or situations when, as opposed to "full and open" competition, limited or no competition exists The FTA, through the requirements set forth above, has established guidelines when sole source procurements may be used if FTA funds are involved. Even though we will address federal requirements in this section, you should also be aware of any limitations or restrictions that your state law or agency regulations may place on you. 14

15 Because procurement by sole source is a noncompetitive procurement, it is treated as an "exception-to-the-norm" in public procurements and, as a result, your ability to use it requires justification and, frequently, pre-approval before you award a sole source contract. In this context, "justification" equates to paperwork and documentation, the bane of all procurement professionals but a necessary part of our genetic make-up. Best Practices - As quoted above, FTA Circular latest version of FTA 4220 establishes a matrix that should be followed in justifying the use of noncompetitive or sole source procurements. Step One - You must first determine that your requirement cannot be obtained under small purchase procedures, sealed bids, or competitive proposals. Does more than one source exist? Does adequate time exist to obtain your requirement through a competitive process? Is Item B (for which competition exists) an acceptable substitute for Item C (for which there is only one source)? Stated another way, Director of Operations should take reasonable steps to avoid using sole source procurement except in circumstances where it is both necessary and in the best interest of the agency. If one of the three methods can be used (or is feasible), even if you would rather not, sole source is not an option for you. Step Two - If one of the competitive processes is not feasible in your situation, you may use sole source procurement if at least one of the following circumstances is present: The item is available only from a single source - In justifying the use of this circumstance, you will frequently address such factors as: Single Source Factors: How did you arrive at the conclusion this item represents your minimum need or requirement? Is this a "nice to have" with all the "bells and whistles" or does it really represent your requirement or minimum need? How did you determine availability? Did you check on prior procurements for the same or similar items? Examples: Utility services (how many sources do you have for electricity in your community?) Limited rights in data, patent rights, copyrights, or secret processes (If one entity owns the patent on a process or product you require, can anyone else meet your need?) Relocation of a major natural gas distribution line from your rail right of way (the natural gas utility company is the only source available to work on the gas line) Are there other sources? Are they responsible? Are identical or compatible parts or equipment available from any other source? Competitive Bid Process The basic steps in a formal bid using an IFB or RFP method are very similar. 15

16 1. Pre-Bid Activities a. Determine scope of procurement b. Decide on IFB or RFP c. Develop solicitation package i. General Instruction to bidders, including uniform terms and conditions, required clauses, evaluation process, and protest procedures. ii. Develop specifications iii. Documents and attachments 2. Obtain OPT review and written approval of solicitation package 3. Solicitation Activities a. Finalize solicitation package b. Advertise procurement in at least one general circulation newspaper and by mail, fax, or to all vendors shown on OPT vendor lists c. Send solicitation package to all vendors requesting package d. Conduct pre-bid conference if deemed necessary e. Respond to vendors requesting clarifications, approved equals or exceptions to bid package f. Vendors submit sealed proposals by the designated deadline g. Public opening of proposals at time and location specified in solicitation package 4. Bid review and award a. Convene review committee b. Analyze bid for responsiveness to requirements, vendor responsibility, and tabulate bid pricing c. Obtain OPT concurrence in determination of lowest responsive and responsible bidder and anticipated award d. Notify vendor of record of intent to award and bid tabulation e. All bids may be rejected if in the public interest f. For vehicle purchases, perform pre-award audits and prepare certification. g. Handle protests 5. Post-delivery a. Inspections if required b. Audit - FTA c. Notice to vendor of defects d. Payment to vendor Cost/Price Analysis City of Anderson Transit System will perform a cost or price analysis in connection with every procurement action, including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, City of Anderson Transit System will make independent estimates before receiving bids, quotes or proposals. A cost analysis must be performed when the offeror is required to submit the elements of his estimated cost, e.g., under professional consulting, architectural and engineering services contracts. A cost analysis will be necessary when adequate price competition is lacking and for 16

17 the sole source procurements, including contract modifications or change orders, unless price reasonableness can be established on the basis of a catalog or market price of a commercial product sold in substantial quantities to the general public or on the basis of prices set by law or regulation. Contract cost analysis is the element-by-element examination of the estimated or actual cost of performing a contract, the analysis of cost accounting data furnished by an offeror. It involves: The verification of cost data; The evaluation of specific cost elements; and The projection of the cost data to determine its effect on prices. A cost analysis looks into such factors as: The necessity for certain costs; The reasonableness of amounts estimated for necessary costs; The bases for allocating overhead costs; Allowances for contingencies; and The appropriateness of allocations of particular overhead costs to the contract. In conducting a cost analysis, it is not enough simply to examine proposed figures on the number of hours his staff will work, the amounts and cost of materials, and the rates of labor and overhead from accounting records. And it is not enough to project the actual cost experience and call it the estimate of future costs. To conduct a proper cost analysis we must thoroughly investigate and verify the accounting data and evaluate the functions that cause the costs. You need to analyze hours, quantities, tooling, testing, and other factors that constitute all the cost elements of a price proposal. A price analysis may be used in all other instances to determine the reasonableness of the proposed contract price. Price analysis is a broad term that includes whatever actions the City of Anderson Transit System takes to reach a price decision without using cost analysis methods. These actions may include: A comparison of competitive price quotations submitted to your organization; A comparison of prior quotations and contract prices with current quotations for the same or similar end-items; The use of rough yardsticks such as dollar per pound, per horsepower, or other units to point up apparent gross inconsistencies; A comparison of prices or published price lists issued on a competitive basis, and published market prices of commodities, together with discount or rebate schedules; A comparison of proposed prices with independent estimates of cost developed within City of Anderson Transit System Determination of Reasonable Price and Award A. Before award can be made to a particular Contractor(s), the Procurement Administrator shall determine, in writing, that the price to be paid to the successful 17

18 Bidder(s) is fair and reasonable. B. When there is only one response received to a request for quotations, or the price variance between multiple responses reflects a lack of robust competition, the Procurement Administrator shall include a statement in the contract file giving the basis for the determination of a fair and reasonable price. C. The determination that a proposed price is fair and reasonable may be based on either of the following: i. Competitive quotations; or ii. Comparison of the proposed price with prices found reasonable on previous purchases, current price lists, catalogs, advertisements, similar items, value analysis, the Procurement Administrator's personal knowledge of the item being purchased, or by reference or comparison to any other reasonable price source. D. When adequate competition is lacking and for sole source purchases, a cost analysis may be necessary to determine price reasonableness. E. The Procurement Administrator shall notify the successful Vendor of award but shall only notify the unsuccessful Vendors, if requested. Excluded Parties (Vendors): The City of Anderson Transit System is required to search the System for Award Management (SAM), to verify vendors have not been excluded from entering into contracts funded with federal monies. This must be documented and placed in the procurement file. The TPA will verify this documentation prior to granting concurrence to proceed. 18

19 SECTION IV: CONTRACT ADMINISTRATION Project Management The General Manager may, when appropriate, designate a Project Manager for each project. When no Project Manager is designated, the Director of Operations shall carry out the Project Manager's responsibilities. It shall be the Project Manager's responsibility to ensure that the contractor performs in accordance with the terms, conditions, and specifications of the contract or purchase order. Generally, the Statement of Work in the contract defines specific tasks, milestones, and review procedures which vary depending on the specific project. The Project Manager shall provide technical direction to the contractor and respond to correspondence on technical matters from the contractor's designated representative. A copy of all correspondence shall be provided to the Contract Officer. The Project Manager shall monitor the progress of the work on a regular basis. The contractor is required to document the amount of time and money spent on the work on a periodic basis specified in the contract. The Project Manager shall review the contractor's documentation and invoices in relation to the milestones, work expended to date, and budgeting information. The Project Manager shall advise the Director of Operations if the contractor is not in compliance with the contract. The Director of Operations shall take appropriate actions. The Project Manager shall also review invoices for accuracy and content and then, if acceptable, forward to the Director of Operations. Contract Amendments and Change Orders Change Orders are, in effect, amendments to a contract and may be required periodically to adjust a contract amount or performance period due to unanticipated conditions. Change Orders are considered a non-competitive procurement and as such are subject to the same requirements as noted in Section II. The General Manager has the authority to authorize expenditure for extra work without the necessity of advertising for bids, provided the cost of the extra work does not exceed Three Thousand Dollars ($3,000.00) or ten percent (10%) of the original contract amount, whichever is greater. The General Manager must review and recommend approval, and the City of Anderson Board of Works must approve the change, if over ten percent (10%) of the original contract amount approved by them. Prior to issuing any Change Order, the General Manager shall be informed, so that a determination can be made as to the availability of funds. The Director of Operations shall also be contacted to determine if the proposed Change Order contains a change in scope which may be grounds for bidding the extra work. A cost analysis must be performed, unless price reasonableness can be established, based on the basis of catalog or market price of a commercial product or on the basis of prices set by law or regulation. Change orders must be prepared in triplicate. Two (2) copies will be retained for the contract files. The third will be returned to the vendor. The adjustment may be in the form of an underrun (adjusting the contract amount downward due to unanticipated savings), or in the form 19

20 of an overrun (adjusting the contract upward due to extra work). Change orders are prepared by the Director of Operations. General - If, in the course of the work, it becomes apparent that a change in the Statement of Work is required, the Project Manager will initiate a request to the Director of Operations for a change order, explaining why it is necessary and could not have been anticipated by the contractor. The Project Manager will also provide a cost or price analysis of the proposed changes, and provide changes to the Statement of Work and required documentation to the Director of Operations. The Director of Operations will notify the General Manager to determine if the change order can be funded, prior to signing any changes. The Statement of Work, change in schedule, and cost of any change, if any, are to be negotiated with the contractor by the Director of Operations before the change order is processed, in accordance with procedures and delegation of authority. The Project Manager has a continuing responsibility to monitor the contractor's work progress until it is completed and the product or service is accepted by City of Anderson Transit System. The Project Manager must notify the Contracting Officer when the work is completed. Construction - City of Anderson Transit System staff may be augmented by the use of a consultant for construction management designated as the Construction Manager. For technical matters, the Construction Manager works for the City of Anderson Transit System Project Manager. However, the Construction Manager does have obligations to the City of Anderson Transit System Coordinator as defined in the letter of appointment. Construction changes will be originated from the contractor, the Construction Manager, the design consultant or Project Manager. The Construction Manager, or in their absence the Project Manager, will prepare a request for a change order. If applicable, the Construction Manager will forward the change order to the Project Manager. This request will define the scope of and reason for the change with an order of magnitude estimated cost. The Project Manager will consult with parties having knowledge of, or interest in, the contract. The pending change will be reviewed to determine that it is not already a contract requirement, that it is really needed and the scope reflects only the need. After a favorable determination, the Project Manager will approve the pending change with the concurrence of the Director of Operations. A copy will be forwarded to the contractor through appropriate channels with a request to prepare a proposal to make the change. For differing site conditions or emergencies, this review will be after the fact and a ratification of the previous verbal actions. When the contractor's proposal, the estimate, and the schedule are in hand, the Director of Operations, in conjunction with the Project Manager, will develop City of Anderson Transit System negotiation position and schedule negotiations with the contractor utilizing the assistance of the Construction Manager as appropriate. Negotiations will be conducted with the contractor and documented. If negotiations are not successful, the Disputes Section of the contract becomes applicable. If successful, a change order will be prepared and executed by both parties. All changes will be executed by the General Manager. The cumulative value of all changes for a 20

21 contract may not exceed ten percent (10%) of the original award amount without City of Anderson Transit System Board approval. The change order file shall contain reason/scope of change, record of negotiations, contractor's proposal, estimate and schedule as appropriate. The agreed cost of the change order will be debited or credited to the original contract price. Contract Files All contract files are centralized under lock and key, and numerically coded. Only limited access to the files is provided. To insure that all pertinent and required documentation is contained within a standardized filing system, at a minimum, the following documentation will be incorporated in the contract file: Purchase requisition; Rationale for method of procurement; Selection of contract type; Solicitation document (IFB, RFP, technical spec); Bid requirements and conditions; General contract provisions; Legal notice to bidders, if applicable; Bid and performance bond data, including justification; Pre-bid independent cost estimate, when required; Summary of bid evaluation; Summary of negotiations; Price or cost analysis; Authorizing resolution, if applicable; Master contract and modifications; Contract amendments or change orders, and associated cost analysis; Progress reports, vendor correspondence, etc.; and Contractor selection or rejection. In addition, all construction contract files shall include: Weekly payroll sheets as required by Davis-Bacon Act; Release of liens, materials, and payments bonds, etc.; Insurance documents. Each file is maintained and controlled by the Director of Operations. The removal or review of contract files will be monitored. Inspection and Acceptance The Project Manager shall be responsible for determining, through inspection, if the equipment, services, and/or supplies delivered meet the specifications or statement of work. The inspection may be performed by the Project Manager or a third party contracted to provide the required inspection services. Upon completing the inspection, the Project Manager shall report to the 21

22 Director of Operations whether the equipment, services, and/or supplies are acceptable. If acceptable, the Director of Operations shall request the General Manager s approval to proceed with contract close out and final payment. If unacceptable, the Director of Operations shall notify the contractor and pursue a satisfactory solution through the contract terms and conditions. Contract Closeout Procedures Upon acceptance of the work under the contract, the Director of Operations shall notify the contractor of close out initiation. This notification shall contain requests for any documents necessary to closeout the contract. Upon return of any documents requested of the contractor, the Director of Operations shall review the documents for completeness and, if acceptable, complete the close out. The Contract Officer shall also initiate grant closeout with the FTA, IDOT, or other federal and state agencies, as applicable. If the documents are not acceptable, the Director of Operations shall follow-up with the contractor and obtains the information required. Cost and/or fees withheld pursuant to the contract provisions shall not be released to the contractor until the contractor has submitted the required closing documents, made final disposition of City of Anderson Transit System property, and reached final agreement with City of Anderson Transit System regarding the amount of final payment due. Withheld costs and/or fees shall be included in the final payment to the contractor. The Director of Operations, upon reaching agreement with the contractor, shall submit for approval the final request for payment. Prequalification Project Manager will be in charge of prequalification of bidders and products. This process can be used in several circumstances, such as when an Agency is procuring critical equipment with exacting performance requirements, or critical services which are needed on a quick-reaction basis. A qualified products list (QPL) is a listing of products which have been tested and found to have satisfied all of the specified requirements. The products on the list may be supplied by any responsible vendor bidding on the procurement. The qualified bidders list (QBL) is a listing of bidders who are manufacturing more complex items, such as buses, requiring sophisticated manufacturing and quality control procedures. These bidders must be reviewed carefully to determine if their internal controls and procedures will produce satisfactory end products. These pre-qualification procedures may also be appropriate for companies who wish to bid on procurements for furnishing critical services, such as quick reaction services for repairs, etc. Only those bidders on the qualified bidders list may supply the products or services specified. The Federal government has used this practice for critical military equipment, such as jet engine turbine blades, or for critical quick-reaction services such as ship repairs. Transit Agencies using this procedure of establishing a qualified products list (QPL) often cite a rationale of: "For reasons of efficiency, economy, compatibility, or maintenance reliability, there is a need for standardization as to various supplies, materials, and equipment." Documenting of Decision to Establish a QPL or QBL Project Manager must ensure that prequalification procedures are not used to restrict full and open competition. Toward this goal Federal Agencies are required to justify in writing the necessity for establishing a 22

23 prequalification requirement. The Project Manager will follow the practice of documenting the reasons why a particular part or service is being placed on a qualified products list (QPL) or a qualified bidders list (QBL), although they are not required to do so by FTA. Qualifying During Solicitation Period Project Manager has two different policies as to bids offering products which have not been qualified prior to the solicitation. When using non-federal funds, the Agency will not allow bidders to offer non-qualified products in response to a solicitation--bidders must obtain certification of their product before, and independently of, any solicitation for that item. When using grant funds, however, grantees must allow vendors an opportunity to qualify their products during the solicitation period (FTA Circular latest version of FTA 4220, Paragraph 8.d). The Federal procurement rules do not require Federal Agencies to delay awards, and the standards applicable to these Agencies should be appropriate for grantees as well. Negotiations The Director of Operations is responsible for all negotiations of contracts resulting from RFPs. All proposers selected to participate in negotiations shall be advised of deficiencies in their proposals and shall be offered a reasonable opportunity to correct or resolve the deficiencies and to submit such price or cost, technical, or other revisions to their proposals that may result from the discussions. A deficiency is defined as that part of a proposal which would not satisfy City of Anderson Transit System's requirements. Discussions shall not disclose the strengths or weaknesses of competing proposers or disclose any information from any proposal which would enable another proposer to improve his proposal as a result thereof. A summary of the negotiations shall be included in the contract file. Selection In all IFB and small purchase procurements, the award of contracts shall be to the lowest and best bidder/quoter. If the award is to be made to other than the apparent low bidder/quoter, a full justification memorandum must be prepared and put into the contract file. The justification memorandum shall be placed in the minutes of the Board of Directors if they made the decision not to accept the lowest proposal. Unless all proposals are rejected, award of RFP procurements will be made to the lowest and best proposer based on the evaluation criteria established in the RFP. Award will not be made until all required approvals have been obtained. Award must be consistent with the solicitation evaluation criteria and requirements. Award Within sixty (60) calendar days after the bid opening, the General Manager shall sign the Solicitation, Offer and Award form submitted by the successful bidder and shall deliver the 23

24 executed contract documents within twenty (20) calendar days after the signing. Delivery of contract documents shall be determined by the Contractor's signature on the return receipt request. Upon award of the contract, the Director of Operations will return bid bonds to the unsuccessful bidders. The Director of Operations may notify the unsuccessful bidders in writing. Bid bonds submitted by the successful bidder will be retained by the Director of Operations. The Director of Operations will obtain an executed contract, performance bond and certificate of insurance, if required, and place them in the contract file. Protest Procedures Protests may be made by prospective bidders or proposers whose direct economic interest would be affected by the award of a contract or by failure to award a contract. City of Anderson Transit System will consider all protests requested in a timely manner regarding the award of a contract, whether submitted before or after an award. All protests are to be submitted in writing to City of Anderson Transit System, 530 Dale Jones Road, Anderson, Indiana Protest submissions should be concise, logically arranged, and clearly state the grounds for the protest. Protests must include at least the following information. Name, address, and telephone number of protester; Identification of the solicitation or contract which the protest concerns; A detailed statement of the legal and factual grounds of the protest, including copies of relevant documents; A statement as to what relief is requested. Protests must be submitted to City of Anderson Transit System in accordance with these procedures and time requirements. Protests must be complete and contain all issues that the protester believes relevant. For the purpose of this Section, the following definitions shall apply: DAYS: Refers to calendar days FILE OR SUBMIT: Refers to the date of receipt by City of Anderson Transit System INTERESTED PARTY BY City of Anderson Transit System: Refers to an actual or prospective bidder, or offeror, whose direct economic interest would be affected by the award of the contract, or by failure to award the contract. May also include a subcontractor or supplier, provided they have a substantial economic interest in a portion of the IFB or RFP. FEDERAL LAW OR REGULATION: The violation of any valid requirement imposed by Federal statute or regulation governing contracts awarded pursuant to a grant agreement. This includes the requirements as stated in FTA Circular latest version of FTA Oral protests not followed up by a written protest will be disregarded. The Director of Operations may request additional information from the appealing party and information or a response from other bidders, which shall likewise be submitted in writing to the Director of Operations not later than five (5) days from the date of City of Anderson Transit System' request. 24

25 So far as practicable, appeals will be decided upon the basis of the written appeal, information, and written response submitted by the appealing party and other bidders; all parties are urged to make written submissions as complete as possible. Failure of any party to timely respond to a request for information will be deemed by City of Anderson Transit System that such party does not desire to participate in the proceeding, does not contest the matter, or does not desire to submit a response; and, in such event, the protest will proceed and will not be delayed due to the lack of a response. Upon receipt and review of written submissions and any independent evaluation deemed appropriate by City of Anderson Transit System, the Director of Operations shall either (a) render a decision on all substantive issues, or (b) at the sole election of the Director of Operations, conduct an informal hearing at which the interested participating parties will be afforded an opportunity to present their respective positions and facts, documents, justification, and technical information in support thereof. Following the informal hearing, the Director of Operations shall render a decision on all substantive issues, which shall be final and advise all interested parties thereof in writing, but no later than ten (10) days from the date of the informal hearing. The decision to open a bid or award a contract prior to the resolution of a protest rests with City of Anderson Transit System. However, on any protest that is accepted by FTA, an adverse decision on the protest by FTA could jeopardize funding for that procurement action. To ensure that all potential bidders/offerors are aware of City of Anderson Transit System' protest procedures, City of Anderson Transit System procedures shall be included or referenced in the solicitation document. If the procedures are referenced, City of Anderson Transit System shall include information on how the procedures may be acquired by any interested party. When the procedures are requested, they shall be provided immediately. 25

26 APPENDIX : INDEPENDENT COST ESTIMATE 26