Taking the Puzzle Out of Procurement or How To Do Business With Procurement and Materials Management.

Taking the Puzzle Out Taking the Puzzle Out of Procurement of Procurement

or or How To Do Business How To Do Business

With Procurement and With Procurement and Materials ManagementMaterials Management

We will cover ...We will cover ... • Introduction - Who We Are• Where to Find Purchasing

Information• Purchasing Lead Times• Delegated Purchasing Tools• Purchasing Ethics

We will Cover...We will Cover...

• Explanation of the Competitive Procurement Process

• Sole Source Procurement• Procurement using Federal funds• Minority, Small and

Disadvantaged Vendor Programs

We Will CoverWe Will Cover

• Procurement File Documentation • Receiving and Shipping

Procedures • Contract Administration• Disposal of Surplus Property

Procurement and Procurement and Materials Materials

ManagementManagementBlair Blankinship

Director of Procurement and Materials Management

Toni WallingtonAssistant Director

Nancy WrightContract Specialist

Lisa EdwardsProperty Control

Dee McGhin

Purchasing Card Administrator and

Purchasing Assistant

Wally Humphrey

Receiving Specialist

Code of EthicsCode of Ethics• Give Vendors Equal Consideration

• Strive to obtain the maximum value for each dollar of expenditure

• Do Not Accept Gifts or Gratuities such as– Tickets to sporting or entertainment

events, golf outings, expensive after hours dinners

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Code Of Ethics Code Of Ethics (Continued)(Continued)

• Avoid Appearance of Conflict of Interest – Do not place orders with relatives

or firms with whom you have some ownership or relationship

• Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.

Procurement Procurement Administrative Lead Administrative Lead

TimeTime• Purchases using the UM

Purchasing Card• Transaction under $5,000

handled in Procurement• Greater than $5,000 Less

than $100,000• Greater than $100,000

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•Same Day

•3 days

•10 to 14 days

•Milestone Plan

MISSIONMISSION

In support of the University’s mission of excellence in education, research, outreach and collaborative partnerships with the greater community, the Department of Procurement and Materials Management will:

Establish and administer contracts effectively. Procure goods and services for best value. Delegate procurement authority using the Purchasing Card program to promote efficiency. Provide materials management services, including central receiving, physical distribution, and property control functions that add value for campus customers. Coordinate the State’s self insurance program and provide risk management services.•Support the State of Maryland Minority Business Enterprise program and the Federal Small and Disadvantaged Business Programs. • Participate in campus sponsored community outreach.• Ensure University business is conducted in a fair and open environment, in full compliance with applicable laws and regulations.

Where to Find Where to Find Purchasing Purchasing InformationInformation

• Procurement & Supply Home Page– www.ubalt.edu/procurement

DELEGATED DELEGATED PROCUREMENTPROCUREMENT

• The Purchasing Card Program– Allows authorized cardholders to

make purchases up to $5,000.– Monthly purchase limit based on

your needs.

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Purchasing CardPurchasing Card• Simple to Use, Saves Paperwork

• Place order immediately - no waiting

• No Cost for Card

• Vendors Paid within 3 Days

• Major Cost Avoidance for the University

Purchasing Card Purchasing Card

• Not for Travel or Restaurants – Travel Card is available (60% rolled

out) www.dbs.umd.edu/travel

• Cards Must NOT be shared

• Issued in Individual’s Name • Graduate/Research Assistants can

get cardsPage 8

P-Card SafeguardsP-Card Safeguards• Issued only to Employees

Authorized by Department Head

• Cardholders Sign Agreement

• Cardholders Trained

• Employee Keeps Log of Transactions and Reconciles with Monthly Visa Statement

Purchasing Card Purchasing Card AbuseAbuse

• Man who abused county credit card must repay $27,000, serve probation

– Ex-supervisor also gets two weekends in jail – By Andrea F. Siegel– Sun Staff - Originally published February 22, 2001– The former Anne Arundel County warehouse supervisor who used a county-issued

credit card to buy himself dozens of items that ranged from a "Star Wars" pinball machine to Raisinettes was ordered yesterday to repay the county nearly $27,000, spend two weekends in jail and five years on supervised probation.

– The judge was unsympathetic to Middleton's assertion of financial difficulties…she said. Chiding him for betraying the public's trust, Judge Davis-Loomis asked, "How closely does an employer have to monitor an employee whom they trust?"

– The maximum punishment for a felony theft scheme, to which Middleton pleaded guilty last month, is 15 years in prison and a $1,000 fine. However, he has no criminal record, and his sentence was within state guidelines of probation to six months.

– Copyright © 2001, The Baltimore Sun

How To Get How To Get Purchasing Cards?Purchasing Cards?

• Submit Cardholder Agreements and information form to Procurement. (see http://www.ubalt.edu/procurement/pcard.htm)

• Cardholders Attend Cardholder Training to get Card (Allow 2 wks)

Simplified Acquisition Simplified Acquisition and and

Formal ProcurementFormal Procurement

Priority of Procurement Priority of Procurement Sources Sources

• Share Equipment or Buy Used

• UB In-House Services

• State Use Industries

• Blind Industries & Services of MD

• Maryland Sheltered Workshops

• Master Contracts

• Small & Minority Vendors

Classification by SizeClassification by Size

• $5,000 and under Micro Procurement– Delegated to Campus

• $5,001 - $100,000 - Simplified Acquisition – Handled by Procurement and Supply

• Over $100,000 - Formal Procurement

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Simplified AcquisitionSimplified Acquisition• $5,001 to $100,000

• Handled by Procurement – Issue purchase order with 14 days

• Simplified refers to the more streamlined process the Buyer in Procurement will use to execute these transactions

Requisition for Requisition for PurchasePurchase

• Create an electronic Requisition in PeopleSoft

• Three step approval process1. Amount Approval in Department2. Chartfield Approval in Finance3. Budget Check by Requestor

Requisition Must HaveRequisition Must Have

• Complete information– who, what, where, when, why

• Sufficient time for process– Give a realistic date for delivery -

not ASAP

Request For QuotationRequest For Quotation

• Typically, Procurement will send a Request For Quotation (RFQ) to several suppliers.

• If your requirement is a Sole Source, provide a written Justification for Sole Source

Formal ProcurementFormal Procurement

• Greater than $100,000• Handled by Procurement and

Supply• Customer will assist in the

development of a milestone plan• Requires more teamwork

between Procurement and customer

Milestone Plan and Milestone Plan and Source Selection PlanSource Selection Plan

• Milestone Plan– Documentation of action items,

person responsible and due date

• Source Selection Plan– Method we will use to select a

contractor

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Milestones in the RFP Milestones in the RFP ProcessProcess

• Requestor Develops Scope of Work• Procurement Develops Source

Selection Plan• Joint Development of RFP Document• Release of RFP to Vendors &

Published in Maryland Contract Weekly

• Determinations

MBE Subcontract GoalMBE Subcontract Goal

• Procurement and Supply will establish a Minority Business Enterprise subcontract goal for each procurement over $100,000.

• Goal is determined for each procurement based on the availability of MBE contractors in that market and the nature of the requirement.

The SolicitationThe Solicitation• Request For Proposals (RFP)

– Best Value

• Invitation For Bids (IFB)– Low Bid

• Sole Source– Limited circumstances with

adequate justification– Still need a formal proposal from

contractor

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Publication of the Publication of the RequirementRequirement

• Maryland Contract Weekly• e-Maryland M@rketplace• Others as necessary

– Length of time before due date is now flexible

Pre-solicitation Pre-solicitation conferenceconference

• Prospective contractors may ask questions about the work to be preformed or about the procurement process.

• May also include a visit to the site where the work will be performed.

Evaluation of OffersEvaluation of Offers

• Based only on criteria stated in the solicitation– IFB - low price the meets the

specifications– RFP - best value with separate

evaluation of technical proposal and price

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RFP EvaluationRFP Evaluation

• Evaluation committee reviews proposals

• identifies areas that need clarification

• May have oral presentation or demonstration if provided for in RFP


• Committee writes narrative summary of proposal strengths and weaknesses

• Consensus evaluation


• After technical evaluation has been completed review summary of price proposals from Procurement.

• Determine final ranking and justify best value decision.

• Break

Sole Source Sole Source ProcurementProcurement

• Customer makes request and justification.

• Procurement without competition is authorized under limited conditions and subject to written justification documenting the conditions that preclude the use of a competitive process.

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Sole Source Sole Source DeterminationDetermination

• Procurement reviews justification.

• Performs independent research.• Writes Sole Source

Determination• Approved by Director of

Procurement

Sole Source ContractSole Source Contract

• Procurement issues Sole Source RFP– greater than $100,000

• get formal proposal from contractor

• contractor reviews and signs our terms, conditions, affidavits and certifications

Sole Source ContractSole Source Contract

• Procurement and Supply determines price reasonableness

• Procurement and Supply determines contractor responsibility– past performance– technical capabilities– financial stability

Special ApprovalsSpecial Approvals

• First the good news!– No More BB-4 form– No More RIP form– Board of Public Works (BPW) now

$500,000 for construction and services (no longer $25,000)

• Other State Agencies still saddled with old rules.

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• Alcoholic Beverages - purchase of such beverages with University-controlled funds is not permitted except when purchased for resale.

ApprovalsApprovals

• Purchases Affecting Buildings and Utilities. Heavy items, very large items, utilities hook‑up, modification to a structure, or pose hazardous or safety concerns, must be reviewed and approved.

Special ApprovalsSpecial Approvals• Purchases Using Sponsored

Programs Funds– equipment with a unit value greater

than $5,000 must first be approved by the Comptroller’s Office, Inventory Control.

– Purchases using sponsored programs funds for services with a value greater than $5,000 must first be approved by the ORAA


Radioactive And Hazardous Materials – approved by the Radiation Safety

Officer, Environmental Safety


•Live Vertebrate Animals– Animals with backbones must first

have their Animal Care Protocol approved by campus Animal Care and Use Committee.

•Motor Vehicles – Purchase or leasing of motor

vehicles requires prior approval by the Fleet Administrator.


• Real Property– Purchase, leases and rentals of land and

structures usually require special processing and approval

• Legal Representation – Hiring of Attorneys must be coordinated

with the President’s Office of Legal Affairs.

Special ApprovalsSpecial Approvals• Insurance

– University is generally prohibited from purchasing insurance.

– Need a certificate of insurance? Contact Blair Blankinship, 301-405-5837

• Vendor Agreements, Licenses, Waivers, Contracts and Contract Modifications. – All such documents require Procurement’s review for

objectionable terms. – Other University personnel are not authorized to sign such

documents and may be personally liable for the obligations in the agreement.

Consulting Consulting AgreementsAgreements

• Consulting services are, in principle, no different from any other contract for services.

• Contracts over $5,000 must be coordinated with Procurement.

• Travel and accommodations costs can be included in the contracts.– travel and accommodations should be

consistent with University travel guidelines.

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Consulting Consulting AgreementsAgreements

• Cannot treat consultants as employees.

• To avoid conflict with IRS rules consult with Procurement and Supply or the President’s Office of Legal Affairs.

Furniture PurchasesFurniture Purchases

• State Use Industries should be evaluated for all furniture purchases.

• If State Use Industries (SUI) can satisfy your requirements we must use SUI.

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State Use Industries State Use Industries FurnitureFurniture

• Five exceptions are recognized by law for not purchasing from SUI:– SUI cannot provide the items within a reasonable

time– SUI cannot meet reasonable specification.– The cost of purchasing from SUI exceeds the

budgetary allowance.– The procurement is an emergency procurement as

defined by law - necessary to avoid or to mitigate serious damage to public health, safety and welfare.

– The item is not available from SUI.

• You must document the reason!


• Contracts for construction or services over $500,000 require prior approval of the MD Board of Public Works.– Who? The Governor, Comptroller and

Treasurer.

• Contracts over $5 Million require prior approval of the USM Board of Regents.

Exemptions from Exemptions from Standard ProceduresStandard Procedures

• Several categories of items are excluded from the USM Procurement Policies and Procedures– Real Property– Disposal of Surplus Property– Collaborative Undertakings– Intergovernmental contracts– Purchases for resale– Cultural, entertainment and

intercollegiate athletics

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ExclusionsExclusions• Protection and administration of intellectual

property rights• Housing, food and related supply and

service contract for conference facilities• Contracts for programs and operations

located or implemented overseas or out-of-state

• Procurement in conflict with a governing federal law or the terms of a gift

• purchase, use or development of curricular materials

Procurements Funded by Procurements Funded by

Federal FundsFederal Funds

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Purchasing Rules Apply Purchasing Rules Apply Regardless of Funding Regardless of Funding

SourceSource

• University Procurement Rules Apply to Grants and Contracts

A110 C.43 A110 C.43 CompetitionCompetition Preferred Preferred

• Maximum extent practical

• Specification developer excluded

• Award to most advantageous and responsive offer– Price, quality, other written factors

Procurement and Procurement and SupplySupply

• Has responsibility for obligating funds for procurements and signing contracts

• Responsibilities include– Seeking Maximum Practical Competition– Making Formal Determinations – Issuing Purchase Orders & Contracts– Establishing Master Contracts

Solicitation StandardsSolicitation Standards

• Clear description, no restrictive specifications

• Vendor requirements, evaluation factors

• Functional or performance specifications– Range or minimum

Solicitation StandardsSolicitation Standards

• Specify salient characteristics of the item if using Brand Name or Equal

• Preferences– Metric Measurement– Environmentally friendly– Energy efficient– Recycled

Other Federal Other Federal Concerns (Grant and Concerns (Grant and

Contract)Contract)• Food

• US Flagged vessels and planes

• Restricted entities/governments• http://www.arnet.gov/epls/

• Federal provisions for purchase orders/contracts

Small Business Small Business Subcontracting Plans Subcontracting Plans

Set Goals for Awards To:Set Goals for Awards To:

• Small businesses• Disadvantaged firms• Women owned business

enterprises• HUB-Zone firms• HBCU and MI• Veteran owned firms

Small Business Small Business DefinitionDefinition

• Service - Average Receipts NTE $2.5 - $21.5 Million

• Manufacturers - # Employees 500-1500

• Supplies - less than 500 employees

Disadvantaged FirmsDisadvantaged Firms

• Changed 10/11/99

• Certification by Small Business Administration (SBA) required

Which Firms are Which Firms are Small, Women-Owned, Small, Women-Owned,

Etc?Etc?

• www.pro-net.sba.gov– Identify a specific firm– List small firms for a specific SIC

code

• www.sba.gov/hubzone– See handout– Identify by County

Report ofReport ofSmall Business Small Business

SpendingSpending• SF 294 Form

– Individual contract over $500,000

• SF 295 Form – Summary of all contracts for each

sponsor

• Reports generated twice each year by Procurement with assistance from ORAA and Comptroller

Minority, Small and Disadvantaged

Business Enterprise Program

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Minority Business Minority Business EnterpriseEnterprise

• Minority Business Enterprise (MBE)

• State socioeconomic program to support historically underutilized businesses.

• House Bill 306 - Maryland Law sets goals

Certification for MBE Certification for MBE contractorscontractors

• To be counted a firm must be certified by MD Dept. of Transporation

• Approx. 2700 firms certified• Database available at

– http://www.mdot.state.md.us/cgi-bin/mbedir/mbedirectory

– link from Procurement’s web site

Minority Business Minority Business Participation GoalParticipation Goal

• FY 03 goal is 25% of dollars spend to be spent with MBE contractors or subcontractors

• 10% sub-goal for women owned businesses and 7% for African American owned businesses

• Included - not additional

Chancellor and President Chancellor and President Mote support MBE Mote support MBE

programprogram• The UM and USM Board of Regents supports

the State’s efforts to increase business opportunities for MBE’s – Firms that have demonstrated time and again the

ability to provide excellent products and services• Increasing the MBE participation to 25 percent

is a significant challenge. • We also need the assistance and aggressive

effort of every unit on campus to achieve these new MBE goals.

Review of Each Review of Each ProcurementProcurement

• Procurement and Supply will review each procurement to determine if MBEs are available for solicitation.

• Each Procurement over $100,000 will have MBE contract or subcontract goal.

Documentation of Documentation of Procurement FilesProcurement Files

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DocumentationDocumentation

• The procurement process is complex and detail oriented. Good business judgement as well as policy and procedure dictate that complete and accurate records must be created and maintained.

DocumentationDocumentation• Each file should be well documented

– understand the need for and nature of the procurement

– know who requested, who funded and who issued/authorized the contract

– understand the rights and responsibilities of all parties

– understand how contractor was selected– understand the price of the contract and

price analysis performed to determine that the price is fair and reasonable

– understand the rationale that supports the finding that the contractor is “Responsible”

– understand all important contract dates

Documentation of P-Documentation of P-Card TransactionsCard Transactions

• Completed Purchasing Card Transaction Log clearly describing the goods or services, detailed receipts, and a reconciled Visa statement for each billing period. – The Transaction Log must be signed

by the cardholder and assigned reviewer.

Records of Large Records of Large TransactionsTransactions

• Records and reports for Transactions handled by Procurement will be maintained in Procurement and Supply’s files.

• Departments should keep copies of Requisition and other related files.

Receiving and ShippingReceiving and Shipping

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Goods Received by Goods Received by the Requestor the Requestor

• Review Delivery/Shipping Documents• Inspect Shipment• If count is incorrect or damage is apparent

– Record discrepancy on delivery document (short one piece, etc.)– Have delivery person sign acknowledgement of statement with

signature or initials– Make a copy of the signed document for your records– Sign document and accept delivery– Contact Procurement for Assistance if necessary.

• If UPS or FedEx and shipment is damaged, record discrepancy and refuse shipment

Shipping Goods from Shipping Goods from CampusCampus

• Get a “Return Authorization” from Contractor to whom you are shipping

• Insure outbound shipments• Keep accurate records

Household MovesHousehold Moves

• Procurement has contracts for household moves.

• Contact Blair Blankinship, 410-837-5714 for assistance.

• Please allow approximately four weeks for the bid process, especially during peak season (June, July and August)

Contract Contract AdministrationAdministration

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• Small purchase of supplies– contract administration may be no

more than verifying that the ordered item was received on time, at the right location and the price on the invoice is equivalent to the price on the purchase order, P-Card order, etc

• complex procurement – contract administration is a

responsibility that is shared between Procurement and Supply and the customer


• Complex Procurement– Contract Kick-Off Meeting– Identification of Using Department

Program Manager– Identification of Contractor

Technical or Service Representative


• Early and effective communication between all parties (including Procurement)

• Detailed documentation of performance– Good or Bad!

Disposal of Surplus Disposal of Surplus PropertyProperty

• Property Control• Located in the Academic Center• Contact Lisa Edwards (X5242) for

assistance

We Discussed…We Discussed… • Key Purchasing Principles

• Where to Find Purchasing Information

• Purchasing Processes, Procedures, Lead Times

• Purchasing Restrictions

• Federal Subcontract Plans & Reports

QuestionsQuestions

• Blair Blankinship, Director of Procurement and Material Management [email protected] 410-837-5714

Taking the Puzzle Out of Procurement or How To Do Business With Procurement and Materials Management.

Documents

procurement greater

delegated procurement

materials management

ethics slide

purchasing card program

department of procurement

specialist slide

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