Housing Authority of the City of Williamson Williamson, West Virginia PROCUREMENT POLICY Adopted by PHA Board of Commissioners Resolution No.: Date of Adoption: December 4, 2015 Effective Date of Implementation: January 1, 2016 2015 The Nelrod Company, Fort Worth, Texas 76109 Authorized Use by The Housing Authority of the City of Williamson (11/2015)
Procurement Policy Table of Contents CHAPTER 1. GENERAL PROVISIONS... 3 A. APPLICABILITY... 3 B. DEFINITION... 4 C. EXCLUSIONS... 4 D. CHANGES IN LAWS AND REGULATIONS... 4 E. PUBLIC ACCESS TO PROCUREMENT INFORMATION... 4 CHAPTER 2. BOARD APPROVAL OF PROCUREMENT ACTIONS... 4 CHAPTER 3. ADMINISTRATION AND DELEGATION OF CONTRACTING AUTHORITY... 5 A. AUTHORITY AND DELEGATION... 5 CHAPTER 4. ETHICS IN PUBLIC CONTRACTING... 6 A. CONFLICTS OF INTEREST... 6 B. GRATUITIES, KICKBACKS, AND USE OF CONFIDENTIAL INFORMATION... 7 C. PROHIBITION AGAINST CONTINGENT FEES... 7 CHAPTER 5. PROCUREMENT PLANNING... 7 CHAPTER 6. PURCHASING METHODS... 8 A. PETTY CASH PURCHASES... 8 B. SMALL PURCHASES... 8 C. SEALED BIDS... 9 D. COMPETITIVE PROPOSALS...10 E. NONCOMPETITIVE PROPOSALS...12 F. COOPERATIVE PURCHASING/INTERGOVERNMENTAL AGREEMENTS/GSA...13 G. GENERAL SERVICES ADMINISTRATION (GSA) PURCHASING...13 H. INDEPENDENT COST ESTIMATE (ICE) AND REASONABLENESS OF PRICE...14 CHAPTER 7. PROCUREMENT FOR LEGAL SERVICES... 14 A.PROCUREMENT METHODS FOR LEGAL SERVICES...14 B.TYPES OF LEGAL CONTRACTS...15 C. CONTRACTS FOR LITIGATION SERVICES...15 CHAPTER 8. COST AND PRICE ANALYSIS... 15 A. PETTY CASH AND MICRO PURCHASES...15 B. SMALL PURCHASES...16 C. SEALED BIDS...16 D. COMPETITIVE PROPOSALS...16 E. CONTRACT MODIFICATIONS...16 CHAPTER 9. SOLICITATION, ADVERTISING AND FAIR COMPETITION... 16 A. FAIR AND OPEN COMPETITION...16 B. METHOD OF SOLICITATION...17 C. TIME FRAME...17 D. TIME PERIOD FOR SUBMISSION OF BIDS OR PROPOSALS...18 E. COMPOSITION OR FORM...18 F. CANCELLATION OF SOLICITATIONS...18 G. CREDIT (OR PURCHASING) CARDS...19 CHAPTER 10. BONDING REQUIREMENTS... 19 1
CHAPTER 11. CONTRACTOR QUALIFICATIONS AND DUTIES... 20 A. CONTRACTOR RESPONSIBILITY...20 B. SUSPENSION AND DEBARMENT...21 C. VENDOR LISTS...21 D. EQUAL EMPLOYMENT OPPORTUNITY (EEO)...21 CHAPTER 12. CONTRACT PRICING ARRANGEMENTS... 23 A. CONTRACT TYPES...23 B. OPTIONS...23 CHAPTER 13. CONTRACT CLAUSES... 23 CHAPTER 14. CONTRACT ADMINISTRATION... 23 CHAPTER 15. SPECIFICATIONS... 24 A. LIMITATION...24 CHAPTER 16. APPEALS, DISPUTES, PROTESTS, CLAIMS AND REMEDIES... 24 A. INFORMAL APPEALS PROCEDURE...24 B. FORMAL APPEALS PROCEDURE...25 CHAPTER 17. ASSISTANCE TO SMALL, OTHER BUSINESSES AND SECTION 3 25 A. REQUIRED EFFORTS...25 B. DEFINITIONS...26 C. RESIDENT-OWNED BUSINESSES...26 D. CONTRACTING WITH A RESIDENT MANAGEMENT CORPORATION (RMC)...27 E. GOALS...28 F. CONTRACT AND SUBCONTRACT ACTIVITY REPORT....28 G. SECTION 3 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1968 (24 CFR PART 135)..28 CHAPTER 18. FEDERAL LABOR STANDARDS, WAGE RATES CONSTRUCTION AND MAINTENANCE... 29 A. DAVIS-BACON ACT...29 B. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT...29 C. SOLICITATIONS AND CONTRACTS...29 CHAPTER 19. ENERGY EFFICIENCY... 30 CHAPTER 20. DOCUMENTATION AND AUDITS... 30 CHAPTER 21. DISPOSITION OF SURPLUS PROPERTY... 30 CHAPTER 22. FUNDING AVAILABILITY... 31 CHAPTER 23. SELF-CERTIFICATION... 31 CHAPTER 24. MANDATORY HUD FORMS... 31 APPENDIX - CAPITAL FUND STIMULUS GRANT PROCUREMENT POLICY... 41 2
PROCUREMENT POLICY This Procurement Policy complies with the Annual Contributions Contract (ACC) between the Housing Authority of the City of Williamson and the HUD, Federal Regulations at 2 CFR Part 200, the Uniform Administrative Requirements, Cost Principles, and Audits Requirements for Federal Awards, the procurement standards of the Procurement Handbook for Public Housing Agencies, HUD Handbook 7460.8, Rev 2, and applicable State and Local laws. This Public Housing Agency (herein known as PHA) has chosen to use the same policy for administering all federal programs as applicable by program requirements and for the purpose of operational efficiency and cost savings, e.g. small purchases. This agency s policy is written to conform to HUD s guidance in support of asset management as applicable. The PHA may elect different organizational approaches to purchasing to include those that are centralized, partially centralized or decentralized, all of which are permissive. However, the PHA is responsible for assuring compliance with all applicable rules and regulations and will establish written procedures for implementation. CHAPTER 1. GENERAL PROVISIONS The Housing Authority of the City of Williamson shall: Provide for a procurement system of quality and integrity; Provide for the fair and equitable treatment of all persons or firms involved in purchasing by the PHA; Ensure that supplies and services (including construction) are procured efficiently, effectively, and at the most favorable prices available to the PHA; Promote competition in contracting; and Assure that the PHA s purchasing actions are in full compliance with applicable Federal standards, HUD regulations, State, and local laws. The following outlines: applicability of this policy; procurement administration responsibilities; procurement methods, equal employment opportunity, requirements for contracting with small businesses, minority-owned firms and labor surplus area firms; Section 3 goals and objectives; appeals and remedies; and, code of conduct/ethics. A. Applicability This Procurement Policy applies to all procurement actions involved with the PHA s procurement of good, supplies, equipment, services and construction regardless of the source of funds, except as noted under exclusions, below consistent with the law. When both HUD and non-federal grant funds are used for a project, the work to be accomplished with the funds should be separately identified prior to procurement so that appropriate requirements can be applied, if necessary. If it is not possible to separate the funds, HUD procurement regulations shall be applied to the total project. If funds and work can be separated and work can be completed by a new contract, then regulations applicable to the source of funding may be followed. 3
Nothing in this Policy shall prevent the PHA from complying with the terms and conditions of any grant, contract, gift or bequest that is otherwise consistent with law. B. Definition The term procurement as used in this Policy, includes the procuring purchasing, leasing or renting of the following: Good, supplies, equipment and materials, Construction and maintenance, Consultant services, Architectural and Engineering (A/E) services, Social services, and Other services C. Exclusions This policy does not govern administrative fees earned under the Section 8 program, the execution of landlord Housing Assistance Payment contracts under that program, or nonprogram income, e.g., fee for service revenue under 24 CFR Part 990. These excluded areas are subject to applicable State and local requirements. D. Changes in Laws and Regulations In the event an applicable law or regulation is modified or eliminated, or a new law or regulation is adopted, the revised law or regulation shall, to the extent inconsistent with this Policy, automatically supersede this Policy. E. Public Access to Procurement Information Most procurement information that is not proprietary is a matter of public record and shall be available to the public to the extent provided in the West Virginia Freedom of Information or Opens Records Act. CHAPTER 2. BOARD APPROVAL OF PROCUREMENT ACTIONS Approval by the Board of Commissioners is not required for any procurement action, as permitted under State and local law other than approval of this Procurement Policy. It is the responsibility of the Board approved contracting officer who will be the Executive Director unless, otherwise appointed by the Board of Commissioners, to make sure that all procurement actions are conducted in accordance with the policies contained herein. 4
CHAPTER 3. ADMINISTRATION AND DELEGATION OF CONTRACTING AUTHORITY A. Authority and Delegation Although the Executive Director is responsible for ensuring that the PHA s procurements comply with this Policy, the Executive Director may delegate all procurement authority as is necessary and appropriate to conduct the business of the PHA. The Executive Director shall be responsible for developing operational procedures, procurement forms and documents to implement this Policy and a system of sanctions for violations of the ethical standards described below under Ethics in Public Contracting. All procurement and forms will be consistent with state and Federal regulations and Procurement Handbook No. 7460.8 REV 2 for Public Housing Agencies. It is the responsibility of the Executive Director regardless of the authority delegated, to: Use sound judgment in accomplishing the procurement activities of the PHA; Ensure that bidders and contractors receive fair, impartial, and equitable treatment; Ensure that contract actions comply with all applicable Federal, state and local laws and rules and with the PHA s approved procurement policy; Seek the greatest overall benefit and best value for the PHA in response to the needs desired; Procurement requirements are subject to an annual planning process to assure economical and efficient purchasing; Verify that the procurement documents clearly specify the appropriate products, construction effort, and/or services, and the history of each procurement is fully documented; including the method of procurement, the selecting of contract type, rationale for selecting offers, and the basis for the contract price; For all procurement other than small purchases, public notice is given at least ten (10) days (unless otherwise required per West Virginia law) before Solicitation responses to notices are honored to the maximum extent practical. A minimum of fifteen (15) days (or other time period if required per West Virginia law) is allowed for preparation and submission of bids or proposals and to make notices of awards available to the public; Solicitation procedures are conducted in full compliance with Federal standards or more stringent State and local laws in accordance with 2 CFR Part 200.319. Non-HUD related properties will follow appropriate state laws and other pertinent restrictions. An independent cost estimate (ICE) shall be prepared for all purchases above the Micro Purchase threshold prior to solicitation. The level of detail shall be commensurate with the cost and complexity of the item to be purchased. Contract award is made to the responsive and responsible bidder offering the lowest price (in sealed bid situations); or contract award is made to the offeror whose proposal offers the greatest value to the PHA, considering price and technical factors, as specified in the solicitation (competitive proposal situations); Unsuccessful firms are notified within ten (10) days (or other period required per West Virginia law) after contract award; 5
There are sufficient unencumbered funds available to cover the anticipated cost before a contract award or modification, work is inspected before payment, and payment is made promptly for work accepted; and, The PHA complies with applicable HUD review requirements. That PHA staff and responsible bidders comply with Section 3 requirements. Bidders and staff should refer to the PHA s adopted Section 3 Plan. Each purchase action or contract (e.g., new contract, modification, interagency agreement, purchase order, etc.) that obligates the PHA to pay a contractor or vendor must be signed or otherwise authorized by an individual to whom the PHA has expressly authorized the authority to make such an obligation. If an individual is not an authorized Contracting Officer, that individual must not bind the PHA by making any implied contract such as by making a promise or stating intent to purchase, either orally or in writing. Under the laws governing the PHA and apparent authority, the PHA may be liable for, or bound by, the acts of a PHA employee, if such person (who is not a Contracting Officer) appears to be an offeror to have been given authority by the PHA. Therefore, all actions that could be misinterpreted as committing the PHA to purchase should be clarified with a statement such as, This request for price quotation is not an offer to buy and should not be assumed as such. CHAPTER 4. ETHICS IN PUBLIC CONTRACTING The PHA hereby establishes this code of standards (conduct/ethics) regarding procurement issues and actions and shall implement a system of sanctions for violations as required by 2 CFR Part 200.318 (c). This code of conduct/ethics is consistent with applicable Federal, State, or local law. A. Conflicts of Interest No PHA employee, officer, Board member, or agent of the PHA shall participate directly or indirectly in the selection, award, or administration of any contract if a conflict of interest, either real or apparent, would be involved. This type of conflict would be when one of the persons listed below has a financial or any other type of interest in a firm competing for the award: An employee, officer, Board member, or agent involved in making the award; His/her relative (including father, mother, son, daughter, brother, sister, uncle, aunt, first cousin, nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law, daughterin-law, brother-in-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half-brother, or half-sister); His/her partner; or An organization which employs or is negotiating to employ, or has an arrangement concerning prospective employment of any of the above. 6
Neither the PHA nor any of its contractors or their subcontractors may enter into any contract, subcontract, or arrangement in connection with a project under the ACC in which any of the following classes of people have an interest, direct or indirect, during his or her tenure or for one year thereafter: Any present or former member or officer of the governing body of the PHA, or any member of the officer s immediate family. There shall be excepted from this prohibition any present or former tenant commissioner who does not serve on the governing body of a resident corporation, and who otherwise does not occupy a policymaking position with the resident corporation, the PHA or a business entity. Any employee of the PHA who formulates policy or who influences decisions with respect to the project(s), or any member of the employee s immediate family, or the employee s partner. Any public official, member of the local governing body, State or local legislator, or any member of such individuals immediate family, who exercises functions or responsibilities with respect to the project(s) of the PHA. No present or former PHA employee, officer, or agent shall engage in selling or attempting to sell supplies, services, or construction to the PHA for one year following the date such employment ceased. The term sell means signing a bid or proposal, negotiating a contract, contacting any PHA employee, officer, or agent for the purpose of obtaining, negotiating, or discussing changes in specifications, price, cost allowances, or other terms of a contract; settling contract disputes; or any other liaison activity with a view toward the ultimate consummation of a sale, although the actual contract is negotiated by another person. Note: For additional important provisions, see HUD Form 53012A (7/95), ACC: Part A Terms and Conditions, Section 19 Conflict of Interest. B. Gratuities, Kickbacks, and Use of Confidential Information No officer, employee, Board member, or agent shall ask for or accept gratuities, favors, or items from any contractor, potential contractor, or party to any subcontract, and shall not knowingly use confidential information for actual or anticipated personal gain. C. Prohibition Against Contingent Fees Contractors who want to do business with the PHA must not hire a person to solicit or secure a contract for a commission, percentage, brokerage, or contingent fee, except for bona fide established commercial selling agencies. CHAPTER 5. PROCUREMENT PLANNING Planning is essential to managing the procurement function properly. The PHA will periodically review its record of prior purchases, as well as future needs, to: Find patterns of procurement actions that could be performed more efficiently or economically; 7
Maximize competition and competitive pricing among contractors and decrease the PHA s procurement costs; Reduce PHA administrative costs; Ensure that supplies and services are obtained without any need for re-procurement, e.g., resolving bid protests; and Minimize errors that occur when there is inadequate lead time. Consideration should be given to storage, security, and handling requirements when planning the most appropriate purchasing actions. CHAPTER 6. PURCHASING METHODS Based upon determination that the required goods or services will be purchased directly by the PHA, one of the following procurement methods will be chosen based on the nature and anticipated dollar value of the total requirement. A. Petty Cash Purchases The PHA is not authorized the use of Petty Cash. B. Small Purchases For purchases not exceeding $25,000, the PHA use the small purchase procedures authorized in this section. Under small purchase procedures, the PHA shall obtain a reasonable number of quotes, preferably three. Contract requirements shall not be artificially divided in order to constitute a small or micro purchase, thereby avoiding the more formal requirements associated with the other procurement methods discussed below, except as may be reasonably necessary to comply with Assistance to Small, Other Businesses and Section 3 of this policy. Small purchases must be distributed among qualified sources to the extent practicable and to promote competition. Small purchases quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the PHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. Micro Purchases: For purchases for supplies or services that aggregately do not exceed $2,500 or $2,000 for construction services subject to Davis-Bacon Act, 2 CFR Part 200.320(a). Quote: Only one quote is required provided the quote is considered reasonable. No formal cost or price analysis is required for petty cash or micro purchases. The Contracting Officer s execution of a contract, purchase orders or other means shall serve as the determination that the price obtained is reasonable, which may be based on the Contracting Officer s prior experience or other factors. Small Purchases: Purchases that do not exceed the $25,000, of the small purchase threshold. 8
Quotes: The PHA must obtain price or rate quotations from an adequate number of qualified sources quotes (preferably three or more). Award shall be offered, providing lowest acceptable quotation, unless justified in writing based on price and other specific factors. If non-price factors are used, they shall be made known to all those solicited. Purchase Orders: The issuance of a Purchase Order by the PHA and its acceptance by the contractor (either through performance or signature on the purchase order) constitute a contract. The Purchase Order will clearly specify the item(s) or service(s) being purchased and the terms and conditions of the purchase. The Purchase Order will contain information regarding scope of work/service to be provided, price, delivery, method of payment, inspection, and acceptance. Additional terms and conditions may be added depending on the nature and complexity of the work requested. Mandatory provisions may be found in HUD s Mandatory Forms listed in Chapter 24 of this policy. The PHA will ensure that all necessary contract clauses are included in its Purchase Orders or in its Request for Quotes, providing the latter are referenced, and made part of the Purchase Order. All purchases shall be made by standard purchase order. Purchase orders exceeding $500 (default amount) shall be stamped or signed by the Executive Director (or designee) to verify that sufficient and unencumbered funds are available for payment. The names, addresses, and/or telephone numbers of the firms/persons contacted, the date and amount of each quote received, shall be recorded and maintained as a public record unless otherwise provided in State or local law. C. Sealed Bids Sealed bidding shall be used for all procurement contracts that exceed the small purchase threshold and that are not competitive proposals or non-competitive proposals, as these terms are defined in this document. Under sealed bids, the PHA publicly solicits bids and awards a firm fixed-price contract (lump sum or unit price) to the responsible bidder whose bid, conforming with all the material terms and conditions of the Invitation for Bid (IFB), is the lowest in price. Sealed bidding is the preferred method for procuring construction, supply, and non-complex service contracts that are expected to exceed $150,000. Conditions for Using Sealed Bids. The PHA shall use the sealed bid method if the following conditions are present: A complete, adequate, and realistic statement of work, specification, or purchase description is available; Two or more responsible bidders are willing and able to compete effectively for the work; the contract can be awarded based on a firm fixed price; and The selection of the successful bidder can be made principally on the lowest price. 9
Solicitation and Receipt of Bids. An IFB is issued which includes the specifications and all contractual terms and conditions applicable to the procurement, and a statement that award will be made to the lowest responsible and responsive bidder whose bid meets the requirements of the solicitation. The IFB must state the time and place for both receiving the bids and the public bid opening. All bids received will be date and timestamped and stored unopened in a secure place until the public bid opening. A bidder may withdraw the bid at any time prior to the bid opening. Bid Opening and Award. Bids shall be opened publicly. All bids received shall be recorded on an abstract (tabulation) of bids, and then made available for public inspection. If equal low bids are received from responsible bidders, selection shall be made by drawing lots or other similar random method. The method for doing this shall be stated in the IFB. If only one responsive bid is received from a responsible bidder, Award shall not be made unless the price can be determined to be reasonable, based on a cost or price analysis. Mistakes in Bids. Correction or withdrawal of bids may be permitted, where appropriate, before bid opening by written or telegraphic notice received in the office designated in the IFB prior to the time set for bid opening. After bid opening, corrections in bids may be permitted only if the bidder can show by clear and convincing evidence that a mistake of a nonjudgmental character was made, the nature of the mistake, and the bid price actually intended. A low bidder alleging a nonjudgmental mistake may be permitted to withdraw its bid if the mistake is clearly evident on the face of the bid document but the intended bid is unclear or the bidder submits convincing evidence that a mistake was made. All decisions to allow correction or withdrawal of a bid shall be supported by a written determination signed by the Contracting Officer. After bid opening, changes in bid prices or other provisions of bids prejudicial to the interest of the PHA or fair competition shall not be permitted. D. Competitive Proposals Competitive proposals are the preferred method for procuring professional services and can also be used for other goods and services that will exceed the small purchase threshold of $25,000, and where conditions are not appropriate for the use of sealed bidding. The competitive proposal method, unlike sealed bidding, allows: Consideration of technical factors other than price; Discussion with offerors concerning offers submitted; Negotiation of contract price or estimated cost and other contract terms and conditions; Revision of proposals before the final contractor selection; and The withdrawal of an offer at any time up until the point of award. 10
Award is normally made on the basis of the proposal that represents the best overall value to the PHA, considering price and other factors, e.g., technical expertise, past experience, quality of proposed staffing, etc., set forth in the solicitation and not solely the lowest price. Additionally, purchase authorization shall be stamped or signed by the Executive Director (or designee) to indicate that sufficient and unencumbered funds are available for payment. Form of Solicitation. Competitive proposals, other than Architectural/Engineering (A/E) services, shall be solicited through the issuance of a Request for Proposal (RFP). The RFP shall clearly identify the importance and relative value of each of the evaluation factors, as well as, any sub-factors and price. A mechanism for fairly and thoroughly evaluating the technical and price proposals shall be established before the solicitation is issued. Proposals shall be handled so as to prevent disclosure of the number of offerors, identity of the offerors, and the contents of their proposals until after award. The PHA may assign price a specific weight in the evaluation criteria or the PHA may consider price in conjunction with technical factors. In either case, the method for evaluating price shall be established in the RFP. Evaluation. Proposals shall be evaluated only on the criteria stated in the RFP. The PHA shall establish an Evaluation Plan for each RFP. Generally, all RFPs shall be evaluated by an appropriately appointed Evaluation Committee. The Evaluation Committee shall be required to disclose any potential conflicts of interest and to sign a Non-Disclosure statement. An Evaluation Report, summarizing the results of the evaluation, shall be prepared prior to the award of a contract. Negotiations. Negotiations are exchanges (in either competitive or sole source environment) between the PHA and offerors that are undertaken with the intent of allowing the offeror to revise its proposal. Negotiations shall be conducted with all offerors who submit a proposal determined to have a reasonable chance of being selected for award, unless it is determined that negotiations are not needed with any of the offerors. This determination is based on the relative score of the proposals as they are evaluated and rated in accordance with the technical and price factors specified in the RFP. These offerors shall be treated fairly and equally with respect to any opportunity for negotiation and revision of their proposals. No offeror shall be given any information about any other offeror s proposal, and no offeror shall be assisted in bringing its proposal up to the level of any other proposal. A common deadline shall be established for receipt of proposal revisions based on negotiations. These negotiations may include bargaining that includes: Persuasion, Alteration of assumptions and positions, Give-and-take, May apply to price, schedule, technical requirements, type of contract, or Other terms of a proposed contract. NOTE: When negotiations are conducted in a competitive acquisition, they take place after establishment of the competitive range and are called discussions. 11
Discussions are tailored to each offeror s proposal, and shall be conducted by the contracting officer with each offeror within the competitive range. The primary object of discussions is to maximize the PHA s ability to obtain best value, based on the requirements and the evaluation factors set forth in the solicitation. The contracting officer shall indicate to, or discuss with, each offeror still being considered for award, significant weaknesses, deficiencies, and other aspects of its proposal (such as cost, price, technical approach, past performance, and terms and conditions) that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposer s potential for award. The scope and extent of discussions are a matter of the contracting officer s judgment. The contracting officer may inform an offeror that its price is considered by the PHA to be too high, or too low, and reveal the results of the analysis supporting that conclusion. It is also permissible to indicate to all offerors the cost or price that the government s price analysis, market research, and other reviews have identified as reasonable. Auctioning (revealing one offeror s price in an attempt to get another offeror to lower their price) is prohibited. Award. After evaluation of the revised proposals, if any, the contract shall be awarded to the responsible firm whose technical approach to the project, qualifications, price and/or any other factors considered, are most advantageous to the PHA provided that the price is within the maximum total project budgeted amount established for the specific property or activity. A/E Services. The PHA shall contract for A/E services using Qualifications Based Selection (QBS) procedures, utilizing a RFQ. Sealed bidding shall not be used for A/E solicitations. Under QBS procedures, competitors qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. Price is not used as a selection factor under this method. QBS procedures shall not be used to purchase other types of services, though architectural/engineering firms are potential sources or offerors. E. Noncompetitive Proposals Conditions for Use. Procurement by noncompetitive proposals (sole-source) may be used only when the award of a contract is not feasible using small purchase procedures, sealed bids, cooperative purchasing, or competitive proposals, and if one of the following applies, per CFR Part 200.320(f): The item is available only from a single source, based on a good faith review of available sources; An emergency exists that seriously threatens the public health, welfare, or safety, or endangers property, or would otherwise cause serious injury to the PHA personnel or residents, as may arise by reason of a flood, earthquake, epidemic, riot, equipment failure, or similar event. In such cases, there must be an immediate and serious need for supplies, services, or construction such that the need cannot be met through any of the other procurement methods, and the emergency procurement shall be limited to those supplies, services, or construction necessary simply to meet the emergency; HUD authorizes the use of noncompetitive proposals; or After solicitation of a number of sources, competition is determined inadequate. 12
Justification. Each procurement based on noncompetitive proposals shall be supported by a written justification for the selection of this method. The justification shall be approved in writing by the responsible Contracting Officer. Poor planning or lack of planning is not justification for emergency or sole-source procurements. The justification, to be included in the procurement file, should include the following information: Description of the requirement; History of prior purchases and their nature (competitive vs. noncompetitive); The specific exception in 2 CFR Part 200.320(f)(1)-(4) which applies; Statement as to the unique circumstances that require award by noncompetitive proposals; Description of the efforts made to find competitive sources (advertisement in trade journals or local publications, phone calls to local suppliers, issuance of a written solicitation, etc.); Statement as to efforts that will be taken in the future to promote competition for the requirement; Signature by the Contracting Officer s supervisor (or someone above the level of the Contracting Officer); and Price Reasonableness. The reasonableness of the price for all procurements based on noncompetitive proposals shall be determined by performing an analysis, as described in this Policy. F. Cooperative Purchasing/Intergovernmental Agreements/GSA The PHA may enter into Federal, State and/or local cooperative or intergovernmental agreements to purchase or use common supplies, equipment, or services. The decision to use an interagency agreement instead of conducting a direct procurement shall be based on economy and efficiency. The interagency agreement, if used, shall stipulate who is authorized to purchase on behalf of the participating parties and shall specify inspection, acceptance, termination, payment, and other relevant terms and conditions. The PHA may use Federal or State excess and surplus property instead of purchasing new equipment and property if feasible and if it will result in a reduction of project costs. The goods and services obtained under a cooperative purchasing agreement must have been procured in accordance with 2 CFR Part 200.320. G. General Services Administration (GSA) Purchasing The PHA may utilize cooperative purchasing, subject to any limitations that may be established under state and local laws and procedures, to purchase certain items offered through the GSA under GSA Schedule 70. Purchases are limited to the following automated data processing equipment: firmware, software, supplies, support equipment, and services. Other GSA Government wide Acquisition Contracts (GWACs) are not authorized for use by public housing agencies. 13
H. Independent Cost Estimate (ICE) and Reasonableness of Price For all purchases above the Micro Purchase threshold, the PHA shall prepare an ICE prior to solicitation. The level of detail shall be commensurate with the cost and complexity of the item to be purchased. Under competitive procurement or quote process a comparison with other offers shall generally be sufficient determination of the reasonableness of price and no further cost or price analysis is required. If a reasonable number of quotes, bids, or proposals are not obtained to establish reasonableness through price competition, the Contracting Officer shall document price reasonableness through other means, such as prior purchases of this nature, catalog prices, the Contracting Officer s personal knowledge at the time of purchase, comparison to the Independent Cost Estimate (ICE), or any other reasonable basis. CHAPTER 7. PROCUREMENT FOR LEGAL SERVICES The costs of legal services incurred under HUD grants (including those obtained under contract) must be reasonable and necessary in accordance with 2 CFR Parts 200.435 and 200.459 and as required, will be solicited through appropriate procurement methods. Legal services contracts are subject to the requirements set forth in 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, in particular, 2 CFR Part 200.435. 2 CFR Part 200.435 contains a set of cost principles the PHA will use to determine the allowability of costs incur under Federal grants and will follow guidance provided. Contracts for litigation services are also to meet the requirements of the HUD Litigation Handbook 1530.1 REV-5 dated May 2004 (the Litigation Handbook ). A. Procurement Methods for Legal Services According to 2 CFR Part 200, the PHA may use all of the contracting methods listed below and previously described, but are expected to choose the method of procurement that is reasonable based on the facts surrounding the particular situation. Small Purchase Procedures. Price or rate quotations will be obtained from an adequate number of qualified sources if relatively simple and informal small purchase methods are used 2 CFR Part 200.320(b). Competitive Proposals. This is the generally preferred method when procuring professional services because it allows for the consideration of technical quality or other factors (in addition to hourly rates) for securing services estimated. Either a fixed-price or cost reimbursement type contract may be awarded. If this method is used, the conditions in 2 CFR Part 200.320(d) must be followed. Noncompetitive Proposals. Are not recommended 14
B. Types of Legal Contracts Time and Materials Contracts. Legal services can be procured on an hourly basis using a type of contract known as time-and-materials (or sometimes, labor-hour ) contracts. The contractor s services are pre-priced in the contract (usually, in terms of hours) and the PHA orders services in unit amounts (e.g., hours) as needed until the funds in the contract are exhausted. PHAs may use this type of contract only after the PHA determines that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. 2 CFR Part 200.318(j) Obtaining Legal Services by Procurement or Employment Methods. PHAs may employ an attorney directly (house counsel) in accordance with the PHA s Personnel Policy, or the PHA may enter into a procurement contract with an attorney or law firm. The procurement of legal services shall follow the procedures previously outlined under Procurement Methods for Legal Services, this section 2 CFR Part 200.459. PHA house counsel is ineligible to receive procurement contracts for legal services. All services of the PHA house counsel would be part of his/her employment contract and are not to be procured separately. Where legal services are desired outside of the scope of services provided by the PHA house counsel, PHAs may use one of the procurement procedures previously described. C. Contracts for Litigation Services General Requirements and HUD Regional Counsel Approval. PHA must submit to HUD Regional Counsel, for prior written concurrence, any litigation service contract where the fee is expected to exceed $100,000 with a private attorney involving PHA program, project, or activity receiving loan, grant, or other subsidy assistance from HUD with the exception of litigation involving a PHA acting as a Section 8 private developer. Such contracts shall make provision for reasonable fees and reimbursement of necessary expenses. If additional funding or budget revision will be required to cover the cost of litigation services, the PHA shall consult appropriate Field and Regional Offices staff. Contract Addendum Legal Services Protocol. The PHA shall include contract provisions as recommended by HUD into all legal service contracts executed and/or administered by PHAs, unless no federally provided funds will be used to administer the contract. CHAPTER 8. COST AND PRICE ANALYSIS The PHA shall require assurance that, before entering into a contract, the price is reasonable, in accordance with the following instructions before entering into a contract. However, according to HUD Procurement Handbook 7460.8 REV 2, the number of times that a PHA will need to conduct a cost analysis will be limited given that most purchases will be of a commercial nature and based on adequate competition. A. Petty Cash and Micro Purchases Neither a formal cost nor price analysis is required. The execution of a contract by the Contracting Officer (through a Purchase Order or other means) shall serve as the 15
Contracting Officer s determination that the price obtained is reasonable, which may be based on the Contracting Officer s prior experience or other factors. B. Small Purchases A comparison with other offers shall generally be sufficient determination of the reasonableness of price and no further analysis is required. If a reasonable number of quotes are not obtained to establish reasonableness through price competition, the Contracting Officer shall document price reasonableness through other means, such as prior purchases of this nature, catalog prices, the Contracting Officer s personal knowledge at the time of purchase, comparison to the ICE, or any other reasonable basis. C. Sealed Bids Price reasonableness is generally established with the presence of adequate competition. Where sufficient bids are not received, and when the bid received is substantially more than the ICE, and where the PHA cannot reasonably determine price reasonableness, the PHA will conduct a cost analysis, consistent with federal guidelines, to ensure that the price paid is reasonable. D. Competitive Proposals The presence of adequate competition is generally sufficient to establish price reasonableness. The PHA must compare the price with the ICE if sufficient proposals are not received. The PHA must conduct a cost analysis, consistent with Federal guidelines, to ensure that the price paid is reasonable when prices cannot be easily compared among offerors, if there is inadequate competition, or when the price is substantially greater than the ICE. E. Contract Modifications A cost analysis, consistent with federal guidelines, shall be conducted for all contract modifications for projects that were procured through Sealed Bids, Competitive Proposals, or Non-Competitive Proposals, or for projects originally procured through Small Purchase procedures and the amount of the contract modification will result in a total contract price in excess of $25,000. CHAPTER 9. SOLICITATION, ADVERTISING AND FAIR COMPETITION A. Fair and Open Competition The Agency Contracting Officer(s) shall promote and provide for fair, full and open competition in soliciting offers and awarding Agency contracts. Contracting Officer(s) shall provide fair, full, and open competition through the use of competitive methods and procedures contained in this policy and the Agency s Procurement Procedures Manual. The competitive bidding process must be fair and open. Fair means that all bidders are treated the same and that no bidder/proposer/offeror has advance knowledge of the project information. Open means there are no secrets in the process such as information 16
shared with one bidder, but not with others and that all bidders know what is required of them. The Agency is prohibited from using state or local geographical preferences in evaluating bids or proposals (except where applicable Federal statutes expressly mandate or encourage geographical preferences, such as HUD s Section 3 requirements in 24 CFR Part 135.11 and 2 CFR Part 200.319. When contracting for architectural and engineering (A/E) design services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. The Agency will use the procurement methods previously stated in this Policy that are best suited to the circumstances of the contract action and consistent with the need to fulfill the Agency s requirements efficiently. Only the following exceptions to fair, full, and open competition are acceptable and must be justified in writing in the procurement file: 1. Only one responsible source and no other supplies or services will satisfy Agency requirements 2. Unusual and compelling urgency 3. Services of an expert or neutral person for any current or anticipated litigation or dispute 4. An acquisition is expressly authorized or required by statute B. Method of Solicitation Petty Cash and Micro Purchases. The PHA may contact only one source if the price is considered reasonable. Small Purchases. Quotes may be solicited orally, through fax, email, or by any other reasonable method. Sealed Bids and Competitive Proposals. Solicitation must be done publicly. The PHA must use one or more following solicitation methods, provided that the method employed provides for meaningful competition. C. Time Frame Advertising in newspapers or other print mediums of local or general circulations. Advertising in various trade journals or publications (for construction). E-Procurement. The PHA may conduct its public procurements through the Internet using e-procurement systems. However, all e-procurements must otherwise be in compliance with 24 CFR Part 200.320, State and local requirements, and the Authority s procurement policy. For purchases of more than $25,000, the public notice should run not less than once each week for two consecutive weeks. 17
D. Time Period for Submission of Bids or Proposals A minimum of 30 days shall be provided for preparation and submission of sealed bids and 15 days for competitive proposals. The Executive Director may allow for a shorter period under extraordinary circumstances. Solicitation procedures are conducted in full compliance with Federal standards or more stringent State and local laws that are consistent with 2 CFR Part 200.320. Non-HUD related properties will follow appropriate state laws and other pertinent restrictions. E. Composition or Form Notices/advertisements should state, at a minimum, the following: Place Date Time (that the bids or proposals are due), Solicitation number The name of a contact who can provide a copy and information about the solicitation, and A brief description of the needed item(s) or services. F. Cancellation of Solicitations 1. An Invitation for Bids (IFB), Request for Proposal (RFP), or other solicitation may be cancelled before bids/offers are due if: The supplies, services or construction is no longer required; The funds are no longer available; Proposed amendments to the solicitation are of such magnitude that a new solicitation would be best; or Other similar reasons. 2. A solicitation may be cancelled and all bids or proposals that have already been received may be rejected if: The supplies or services (including construction) are no longer required; Ambiguous or otherwise inadequate specifications were part of the solicitation; All factors of significance to the PHA were not considered; Prices exceed available funds and it would not be appropriate to adjust quantities to come within available funds; There is reason to believe that bids or proposals may not have been independently determined in open competition, may have been collusive, or may have been submitted in bad faith; or For good cause of a similar nature when it is in the best interest of the PHA. 18
3. The reasons for cancellation shall be documented in the procurement file and the reasons for cancellation and/or rejection shall be provided upon request. 4. A notice of cancellation shall be sent to all bidders/offerors solicited and, if appropriate, shall explain that they will be given an opportunity to compete on any re-solicitation or future procurement of similar items. 5. If all otherwise acceptable bids received in response to an IFB are at unreasonable prices, an analysis should be conducted to see if there is a problem in either the specifications or the PHA s cost estimate. If both are determined adequate and if only one bid is received and the price is unreasonable, the Contracting Officer may cancel the solicitation and either: Re-solicit using an RFP; or Complete the procurement by using the competitive proposal method. The Contracting Officer must determine, in writing, that such action is appropriate, must inform all bidders of the PHA s intent to negotiate, and must give each bidder a reasonable opportunity to negotiate. 6. If problems are found with the specifications, PHA should cancel the solicitation, revise the specifications and re-solicit using an IFB. G. Credit (or Purchasing) Cards Credit card usage should follow the rules for all other small purchases such as: The Contracting Officer may use a credit card for Micro Purchases without obtaining additional quotes provided the price is considered reasonable. For amounts above the Micro Purchase level, the Contracting Officer would generally need to have obtained a reasonable number of quotes before purchasing via a credit card. The PHA will adopt reasonable safeguards to assure that credit cards are used only for intended purposes, such as, limiting the types of purchases or the amount of purchases that are permitted with credit cards. See Credit Card Policy. CHAPTER 10. BONDING REQUIREMENTS There are no bonding requirements for small purchases or for competitive proposals per federal guidelines. (2 CFR Part 200.325) The standards under this section apply to construction contracts that exceed the Simplified Acquisition Threshold of $150,000, per federal regulations, or State law. State guidelines must be followed if stricter than federal regulations. The PHA may require bonds in other circumstances when deemed appropriate. However, nonconstruction contracts should generally not require bid bonds. Bid Bonds. For construction contracts exceeding $150,000 (federal regulation), offerors shall be required to submit a bid guarantee from each bidder equivalent to 5% of the bid price. 19
The bid guarantee must consist of a firm commitment such as a bid bond, certified check, federal bank s irrevocable letter of credit, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required when the time specified. Performance and Payment Bonds. For construction contracts exceeding $150,000 (federal regulation), the successful bidder (contractor) shall furnish the following performance and payment bond(s). A performance bond on the part of the contractor for 100 percent of the contract price. A performance bond is one executed in connection with a contract to secure fulfillment of all the contractor s obligations under such contract. A payment bond on the part of the contractor for 100 percent of the contract price. A payment bond is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in contract NOTE: A payment bond is required by West Virginia law if the construction contract is in excess of $25,000. A performance bond is required by West Virginia law if construction is in excess of $25,000. The stricter requirement between federal regulation and State law must be followed. These bonds must be obtained from guarantee or surety companies acceptable to the U. S. Government and authorized to do business in the State where the work is to be performed. Individual sureties shall not be considered. U. S. Treasury Circular Number 570 lists companies approved to act as sureties on bonds securing Government contracts, the maximum underwriting limits on each contract bonded, and the States in which the company is licensed to do business. Use of companies on this circular is mandatory. CHAPTER 11. CONTRACTOR QUALIFICATIONS AND DUTIES A. Contractor Responsibility The PHA shall not award any contract until the prospective contractor, i.e., low responsive bidder, or successful offeror, has been determined to be responsible. A responsible bidder/offeror must: Have adequate financial resources to perform the contract, or the ability to obtain them; Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all the bidder s/offeror s existing commercial and governmental business commitments; Have a satisfactory performance record; Have a satisfactory record of integrity and business ethics; Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them; Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them; and, 20