Procurement Modernization Procurement Modernization Town Hall - - PowerPoint PPT Presentation

Procurement Modernization Procurement Modernization Town Hall Meeting

August 15, 2016

Laws, Rules and Policies ,

Laws, rules, and policies govern the procurement functions for the S tate of procurement functions for the S tate of Colorado:

 Proc rement Code & R les  Procurement Code & Rules  S

tate Purchasing & Contracts Office Policies

 S

C ll S & P li i

 S

tate Controller S tatute & Policies

 Fiscal Rules  Personnel Rules  Procurement Code of Ethics

Procurement Code

• Governs how most executive branch agencies buy

d i i f ti t h l d goods, services, information technology and construction

• Administered by Department of Personnel &
• Administered by Department of Personnel &

Administration

Purpose of t he Procurement Code p f

• 1. S

implify, clarify, and modernize the law;

• 2. Provide for increased public confidence in public

procurement; 3 E th f i d it bl t t t f ll h

• 3. Ensure the fair and equitable treatment of all who

deal with procurement; 4 Provide increased economy in state procurement

• 4. Provide increased economy in state procurement

activities;

• 5. Foster effective broad-based competition; and

p ;

• 6. Provide safeguards for a procurement system of

quality and integrity.

Ot her S t at ut ory Requirement s y q

In addition to the Procurement Code, waivers or approvals are required for the following: approvals are required for the following:

 Office furniture  Technology goods and services  Printing document management mail related  Printing, document management , mail-related

services, microfilm, graphic arts, copying, copiers, fleet, personal services contracts, independent contractors, and training

Preferences/ S et Asides f

L Ti Bid

• Low Tie Bids
• S

tate purchases of recycled paper and recycled products

• Environmentally Preferable Products
• S

ervice-disabled veteran owned small businesses

• Persons with S

evere Disabilities

• Reciprocal bidder preference

Organizat ional S t ruct ure g

Department of Personnel & Administration S tate Purchasing & Contracts Office

Agency Purchasing Agency Purchasing Agency Purchasing Agency Purchasing Purchasing Office Purchasing Office Purchasing Office Purchasing Office

Why does Government Buy what y y it Does?

To fulfill the mission of its agency! Why doesn’ t everyone get a state contract? Why do we require competition?

Met hods of S

• urce S

elect ion f

Discretionary S tate Price Agreements Discretionary S tate Price Agreements Documented Quotes Invitation for Bids Documented Quotes Invitation for Bids Request for Proposals Competitive Negotiation q p p g Emergency S

• le S
• urce

Discret ionary

• No competitive bidding required
• Must ensure price is fair and reasonable

p

• Encouraged to use Minority and Women-Owned

Businesses

S t at e Price Agreement s g

• Competitive solicitations that result in statewide

t t contracts

• Administered by S

tate Purchasing & Contracts Office

• Users include state and local government, higher

education, and qualified non-profit organizations Multiple vendors can be awarded

• Multiple vendors can be awarded
• Based on need and opportunity to leverage state’ s

buying power buying power

• Mandatory vs. Permissive

Document ed Quot es (DQ) Q ( Q)

• S

implest solicitation

• S

implest solicitation

• Typically has a quick turnaround
• Informal process
• Price is primary consideration
• Flexibility to negotiate at S

tate’ s discretion y g

Invit at ion for Bids (IFB) f ( )

• Primarily used for goods
• Primarily used for goods
• Works well when specific need can be defined
• Formal process – bids must be sealed
• Bidders must be responsive (meet the requirements)
• Low (responsive) bidder is awarded
• No flexibility to negotiate

Request for Proposals (RFP) q f p ( )

• Used primarily for services

Used primarily for services

• Works well when the details are unknown (results)
• Formal process – proposals must be sealed

Requires an evaluation committee

• Requires an evaluation committee
• Price is one of many factors
• Flexibility to clarify

Discret ionary & Bidding Thresholds y g

Goods Services Method < $10,000 < $25,000 Discretionary ( biddi i d) (no bidding required) > $10,000 and < $150 000 > $25,000 and < $150 000 Documented Quote < $150,000 < $150,000 > $150,000 > $150,000 Invitation for Bids or Request for Proposals Request for Proposals

Overview of Colorado Procurement

Where are S

• licit at ions Post ed?

ColoradoVS

S (Vendor S elf S ervice)

https:/ / codpa-vss.hostams.com/ webapp/ PRDVS S 1X1/ AltS elfS ervice

CDOT S

uS S (S upplier S elf S ervice) Portal

https:/ / www.codot.gov/ business/ procurement-and-contract- services/ cdot-supplier-information services/ cdot supplier information

Rocky Mountain E-Purchasing S

ystem

http:/ / www.rockymountainbidsystem.com/ p y y

BidExpress (BidX)

https:/ / www.bidx.com/ co/ main For more information, see the S tate Purchasing & Contracts Office website https:/ / www.colorado.gov/ osc/ solicitations p g

S

• le S
• urce

Must meet both of these conditions:

• Only 1 product or service meets our needs AND
• Only 1 source can provide that product or service

Except ions p

• No state funds are expended
• Revenue-producing
• Legislative or j udicial branch
• Interagency/ Intergovernmental
• Public printing (Article 109)
• Resale
• Grant-specified
• Law-specified
• A&E, land surveyors, or industrial hygienists

y yg

Commit ment Document s

Commitment documents are state purchase orders or state contracts purchase orders or state contracts.

• Purchase orders are required for

purchase of goods or services greater than $5,000.

• S

tate Contracts are required for purchase of services greater than $100 000 $100,000.

Terms and Condit ions

• The S

tate’ s terms and conditions are provided in conditions are provided in S tate purchase orders and contracts.

• Terms from vendors that are

problematic for the S tate include indemnification include indemnification, limitations of liability, and choice of law.

• Vendor Agreements are not

ideal.

Communicat ion Wit h Vendors

Why limit communication?

M i t i th i t it f th t

• Maintain the integrity of the procurement process
• Ensure fair and equitable treatment of all vendors
• Avoid perception of giving an advantage

Avoid perception of giving an advantage

Communicat ion Wit h Vendors

Conflicts of Interest

• The potential for a conflict can

arise in the procurement process A i i fli t f

• Agencies may require conflict of

interest disclosures from bidders

Communicat ion Wit h Vendors

Requests for Information (RFI)

• May be issued to gain information

from vendors in a transparent, from vendors in a transparent, inclusive way.

• Posted publicly.

N t li it ti d i t

• Not a solicitation, a vendor is not

chosen

Quest ions? Q

Cindy Lombardi S tate Purchasing & Contracts Office https:/ / www colorado gov/ pacific/ osc/ spo https:/ / www.colorado.gov/ pacific/ osc/ spo

Procurement Modernization Procurement Modernization Town Hall Meeting

August 15, 2016

It’ b It’ s been how long!? how long!? g

It ’ s been how long!? g

It ’ s been how long!? g

It ’ s been how long!? g

It ’ s been how long!? g

Procurement Code Adopt ed p

• Colorado Procurement Code established in 1982
• Based on 1979 American Bar Association (ABA)

model procurement code

• No comprehensive review/ update in more than

34 years

Wh t’ th What’ s the problem? problem? p

What ’ s t he problem? p

What ’ s t he problem? p

What ’ s t he problem? p

What ’ s t he solut ion?

• DPA led internal review of Procurement Code and

Rules

• Procurement professionals from many S

tate i i d h ti d id tifi d agencies examined each section and identified problems and opportunities

• Identified areas for potential changes
• Identified areas for potential changes
• Need stakeholder input to make

recommendations to the General Assembly recommendations to the General Assembly

Wh d Where do we start? we start?

Where do we st art ?

Where do we st art ?

Where do we st art ?

Where do we st art ?

Where do we st art ?

Purpose of t he Code p f

The Code exists to help keep the public trust, p p p , promote fair competition, make efficient use of taxpayer dollars, and allow the S tate to effectively do the people’ s business.

House Bill 1451

Directed DPA to solicit input from: p

• Vendors
• Business organizations
• Nonprofit organizations

L b i ti

• Labor organizations
• Taxpayer advocacy organizations
• Legal professionals
• S

tate employees

• S

tate employees S ubmit recommendations to General Assembly

Opport unit ies pp

• General updates and clean-up

p p

• Application of the Code
• Contracts
• Confidentiality

Ethi

• Ethics
• Training
• Market research
• Administrative remedies
• Administrative remedies
• Cooperative purchasing

General Updat es and Clean-up p p

The Procurement Code should be easy to read, y , understand, and follow

• Make definitions simple and consistent

U d t i l

• Use modern terminology
• Use consistent dates and timeframes
• S

implify processes (reporting)

• Align requirements for grants with new
• Align requirements for grants with new

Federal rules

• Reorganize/ relocate sections for ease of use

Applicat ion of t he Code pp f

• The purpose of the Procurement Code is to

p p establish a process that is efficient, fair, and competitive, NOT to create bureaucracy. Th l h ld k f h thi k

• The rules should make sense for how things work

in the real world

Cont ract s

• Update the Contract Management System (CMS

) p g y ( ) to focus more on contract compliance rather than reporting I t t di t ll f i

• In contract disputes, allow for progressive

discipline rather than heavy-handed punishment

• Need to clarify terms and conditions to reduce
• Need to clarify terms and conditions to reduce

contract negotiation delays

Confident ialit y f y

• Most procurement documents are public record

p p

• Clarify the process of identifying and protecting

confidential vendor information and trade secrets i d t i t th S t t in documents given to the S tate

Et hics

• S

tate Procurement professionals are bound by a p y code of ethics, but the Procurement Code does not explicitly establish ethical requirements for other persons involved in the procurement process (end d t t ) users, vendors, management, etc.)

Training

• There is not an established training program for

g p g S tate employees or vendors who wish to do business with the S tate.

Market Research

• Update and clarify appropriate processes for

p y pp p p S tate agencies to conduct market research, including engaging vendors through the Request for Information (RFI) process

Administ rat ive Remedies

• Clarify the protest and appeals process to ensure

y p pp p it is consistent and fair

• Adj ust the process to incentivize administrative

di liti ti remedies over litigation

Cooperat ive Purchasing p g

• Provide flexibility to S

tate agencies to participate y g p p in j oint procurements with other public entities

We want your feedback y f

Procurement Modernization Initiative Website:

https:/ / www.colorado.gov/ osc/ pmi

S end questions, comments, and ideas to:

S OC P S OC_Procurement@ state.co.us