1 Only 2 bids received for purchase of fire truck costing $115,000. - PDF document

Public Purchasing and Contracting Basic Legal Requirements Norma Houston 2017 Introduction to Local Government Finance Basic Public Contract Requirements Procurement Methods Competitive Bidding Requirements Construction Requirements Building Construction Requirements Exceptions ARE YOU SMARTER THAN A . . . . . .PURCHASING OFFICER? www.sog.unc.edu Page 1 Norma Houston UNC School of Government 1

Only 2 bids received for purchase of fire truck costing $115,000. Can you open the bids? 1. Yes 2. No After bid opening, vendor asks you to keep his “proprietary” bid documents confidential. Can you keep the bid documents confidential? 1. Yes 2. No 1. Yes 2. No A service vendor fails to perform as required under an oral contract. Can you enforce the terms of the contract? 1. Yes 2. No 1. Yes 2. No www.sog.unc.edu Page 2 Norma Houston UNC School of Government 2

County requires bid bond even though not required by statute. Low bidder omits bond. Can the defect be waived? 1. Yes 2. No Bidder’s formal construction bid arrives late because of Fed Ex error due to no fault of bidder. Is the bid timely? 1. Yes 1. Yes 2. No 2. No Bidder notices part of his cost estimates are missing when his bid is opened and offers the missing information to complete his bid. 1. Yes Can the missing information be accepted? 2. No 1. Yes 2. No www.sog.unc.edu Page 3 Norma Houston UNC School of Government 3

Local vendor’s bid is only $100 higher than out - of-state vendor. Can the bid be awarded to the local vendor? 1. Yes 2. No 2. No 1. Yes PUBLIC CONTRACT REQUIREMENTS What is a Valid Public Contract? Budget / Writing Pre-audit Proper Authority Procurement Methods Offer Valid Other Legal Acceptance Requirements Contract Consideration www.sog.unc.edu Page 4 Norma Houston UNC School of Government 4

Failure to Comply  Contract rendered void  Cannot be enforced by either party  Loose legal authority to make payments under the contract PROCUREMENT METHODS Public Procurement Methods Type of Procurement Cost Contract Method www.sog.unc.edu Page 5 Norma Houston UNC School of Government 5

Procurement Methods – State Law Formal Bidding Formal Qualifications-Based Cost of Contract $500,000 Bidding Selection No Informal $90,000 Method Bidding Informal Required Bidding $30,000 No No Method Method $0 Everything Else * Purchase Construction Mini-Brooks Act Type of Contract * Optional: May use request for proposals for service contracts or information technology purchases or services. Procurement Methods – Federal Rules Sealed Competitive Competitive Sealed Bidding Proposals Proposals Bidding * Competitive Proposals: Cost of contract Qualifications- Simplified Based Acquisition Procurement Threshold (Currently $150,000 ) Small Small Micro- Small Purchase Purchase Purchase Purchase Threshold (Currently $3,500 ) Micro Purchase Micro Purchase Micro Purchase $0 Supplies or Architectural/ Construction ** Services, Engineering Generally ** Type of contract Services * Preferred method for construction ** May use competitive proposals when sealed bidding not appropriate COMPETITIVE BIDDING REQUIREMENTS www.sog.unc.edu Page 6 Norma Houston UNC School of Government 6

Competitive Bidding Requirements Bidding Informal Formal Requirement ($30,000 - $500,000) ($500,000 and above) Formal notice published in newspaper No specific method required; local for 7 days between date of publication and Solicitation government may choose to “secure” bids bid opening; may also use electronic means Advertisement by any means in addition to newspaper (electronic means only requires governing board approval) Bids must be sealed (construction bids must Form of Bids Any form; must keep record of bids be in paper form) Number of Bids Received No minimum required At least 3 (construction only) Bid Bond Must be submitted with bid; must equal at Not Required (construction only) least 5% of bid amount Bid must be received by date and time of Bid Deadline No statutory deadline bid opening HUB requirements Must solicit HUB participation and Formal HUB requirements for local ( building construction only) document recruitment efforts governments and bidders Public bid opening Not required Required Standard of Award Lowest responsive, responsible bidder Lowest responsive, responsible bidder Required (may delegate for purchase Board Approval Not required contracts) Record of bids not public until contract Public Record Bids public when opened award pg. 249-255 You Want To: Purchase a new tractor Build a new admin building ($65,000) ($2.5 million) LRRB Standard of Award Lowest Responsive Responsible Bidder Cost Bid Skills Legal Requirements Abilities Bid specs Resources Only minor deviations can be waived! www.sog.unc.edu Page 7 Norma Houston UNC School of Government 7

Can You Waive . . . NO ? Failure to comply with statutory requirement MAYBE ? Minor clerical error ? Miscalculation of dollar amounts MAYBE NO ? Missing information material to bid specifications ? Missing information not material to bid YES specifications CONSTRUCTION CONTRACTING Construction Contract Requirements Public Procurement Requirements Construction & Repair Requirements Building Construction Projects www.sog.unc.edu Page 8 Norma Houston UNC School of Government 8

Construction Contract Requirements ALL Informal and Formal Construction 1. General contractor required for projects over $30,000  Owner-contractor affidavit required if acting as own general contractor (force account work) 2. Licensure requirements included in ITB and bid specs 3. Dispute resolution procedure (either local policy or State Building Commission policy) Construction Contract Requirements ALL Formal Construction 5. Board approval ($500,000+) required (cannot 1. Bids received sealed in delegate) paper form 6. Contractor must 2. 3-bid minimum to execute w/in 10 days open or forfeit bid 3. Bid bond/deposit with deposit/bond bid (at least 5%) 7. Performance and 4. Withdrawal after payment bonds at opening only for good execution ($300,000) faith clerical error CONSTRUCTION CONTRACTING REQUIREMENTS FOR BUILDING CONSTRUCTION & REPAIR www.sog.unc.edu Page 9 Norma Houston UNC School of Government 9

Building Construction & Repair  Additional legal requirements for Construction & construction & repair of Repair Requirements buildings  Requirements apply to BUILDING building construction Construction & Repair and repair costing over Requirements $300,000 (unless otherwise noted) Building Construction Contracting Formal Additional Bidding Building $500,000 Construction Cost of Contract Requirements $300,000 Informal Bidding $30,000 No Method* $0 Construction & Repair Type of Contract *Local governments may impose lower bid thresholds by local policy What Do You Think? What is a “Building”? www.sog.unc.edu Page 10 Norma Houston UNC School of Government 10

Building Construction Requirements ($300,000 + ) 1. Separate Specifications 3. Authorized for Trades Construction Methods  HVAC  Traditional  Plumbing • Separate-Prime (Multi- Prime)  Electrical • Single Prime  General • Dual Prime  Alternative 2. HUB Participation • CM@R  $30,000 + informal • Design-Build  $300,000 + formal • Design-Build Bridging • Public Private Partnership (P3) HUB Participation  Is a goal , not a quota  Focuses on opportunity to compete on bids  Lowest responsive, responsible bidder standard still applies  Non-discrimination requirements still apply HUB - What is Required?  Depends on Funding Source and Project Cost  3 Basic Requirements: 1. Goals set by local government 2. Participation efforts • By local government • By Bidder 3. Reporting by local government www.sog.unc.edu Page 11 Norma Houston UNC School of Government 11

HUB Requirements Cost Goals Good Faith Efforts Reporting Below Not required Not required Not required $30,000 $30,000 - Not required Local Government: Local Government: $300,000 Informal solicitation (10% goal: $100,000 Informal reporting to Informal or more and funded Bidders: HUB Office HUB No requirements with state funds*) Local Government: Formal outreach and $300,000 Local Government: good faith efforts and above Required Formal reporting to Bidders: HUB Office Formal HUB Formal good faith efforts *For projects costing $100,000 or more and funded wholly or in part with state funds, state law requires a local government use a 10% goal unless the local government has previously established and maintained another verifiable goal. When Bids Become Open To Public Inspection When Received, When Contract is Or If Sealed, When Opened Awarded When Opened Purchase & Formal Purchase Informal Purchase Construction Below and Construction and Construction Informal Range Mini-Brooks Act Optional IT RFP Everything Else “Trade Secrets” remain confidential ONLY under statutory criteria What About Local Preferences? www.sog.unc.edu Page 12 Norma Houston UNC School of Government 12