6/22/2020 Welcome to “Fundamentals of Purchasing” We recommend you join today’s session using your computer audio . While you wait for our session to begin, please run the Sound Check Feature in the AUDIO section of your GoToWebinar control panel ( see the red arrow ). Alternatively, you may join by telephone: +1 (631) 992-3221 Access Code: 118-593-468, Webinar ID: 847-455-611 Technical problems? Prior to the session, you can call Tracy Arner at (706) 202-8169 1 Want to ask a question? To Submit a written question, find the Question Pane on the control panel ( see the red box ). Simply type in the lower portion of the pane and click send. 2 1
6/22/2020 Ready to be recognized? Use the “Raise Hand” button ( see the green arrow ) to give us a wave! 3 Earning CPE In order to earn CPE credit for this course, you must: • Answer all polling questions, • Be registered with the Georgia Center for Continuing Education, • Be logged in to the session individually, and • Remain present until the full hour of the webinar. Certificates will be available within 30 days. 4 2
6/22/2020 Today’s Presenter Dave Lakly Public Service Associate 5 Fundamentals of Purchasing Presented by: Dave Lakly dlakly@uga.edu 3
6/22/2020 Learning Objectives Recall the functions and goals of purchasing Recall the steps of the purchasing cycle Identify the importance of writing solicitations Define the process of issuing the requisition and purchase order 7 Public Sector Purchasing 8 4
6/22/2020 Public Sector Purchasing What makes public sector purchasing different? Protection of public funds • Competition • Open/transparent • Value • Legality • 9 Functions Materials Management Contract Supply Chain Administration Management Supplier Commodity Management Management 10 5
6/22/2020 Goals Maximize savings by obtaining the best value for each tax dollar spent Efficiency Effectiveness Economy 11 Quality Purchasing Staff Honesty • Integrity • Ability to Multi-Task • Attention to Detail • Assertiveness • Sense of Responsibility • 12 6
6/22/2020 Universal Public Procurement Certification Council Independent entity formed to govern and administer the Certified Public Procurement Officer (CPPO) and Certified Professional Public Buyer (CPPB) certification programs https://www.uppcc.org/Certification 13 14 7
6/22/2020 To be effective, purchasing must have Authority Responsibility 15 Writing a Policy Exemptions • Ethics • Other policies • Authority • Procedures • Purchasing thresholds • Process • Sole purchase • Emergency purchase • 16 8
6/22/2020 Policy Examples Sample Thresholds: • Purchases between $0 and $5,000 – authorized staff members will obtain at least two verbal quotes. • Purchases greater than $5,000 but not greater than $20,000 – authorized staff members will obtain at least three written quotes. • Purchases greater than $20,000 use sealed, written bids or proposals. (Additional examples, Cities of Callaway, Edgewater) 17 Knowledge Check Purchasing’s goal to maximize savings by obtaining the best value for each tax dollar spent is accomplished by… A. Ethics, economy and expediting. B. Honesty, integrity, and sense of responsibility. C. Efficiency, effectiveness, economy. D. Responsive bids and responsible bidders. 18 9
6/22/2020 Steps in the Purchasing Process 19 Steps in the Purchasing Process • Determining Need 1 • Verifying Availability of Funds 2 • Writing Specifications 3 • The Requisition 4 • Method of Purchase and Solicitations 5 20 10
6/22/2020 Steps in the Purchasing Process (cont’d) • Evaluation and Award 6 • Preparation of PO or Contract 7 • Monitoring of Delivery 8 • Receipt of Goods or Services 9 • Capital Assets 10 21 Purchasing Process 1. Determining need: the user department determines a need and requisition is submitted to purchasing 2. Verifying availability of funds: fund availability is determined according to your: Operating Budget • Capital Projects Budget • 22 11
6/22/2020 Purchasing Process 3. Writing Specifications Written by the user department • Describe requirements of products or services • Written at the correct quality level • 23 Purchasing Process 3. Writing Specifications (cont’d) Before writing them, research similar solicitations, Write them in a way review the web, that they do not brochures, catalogs, restrict competition and other materials Write them Include clearly and performance accurately to expectations describe (usually for minimum RFPs) requirements Include physical characteristics 24 12
6/22/2020 “It’s unwise to pay too much, but it’s also unwise to pay too little. When you pay too much, you lose a little money, that is all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was thought to do.” - John Ruskin Art Critic & Social Commentator 25 Purchasing Process 4. The requisition should contain Date the item is needed • Budget coding information and approval • Description of the item • Suggested vendors • Quantity, estimated costs & delivery location • 26 13
6/22/2020 Purchasing Process 5. Method of Purchase and Solicitations will depend on Dollar amount – formal or informal • Is the request for a product, equipment, or service • Requirements of the user department • 27 Knowledge Check After the need for a purchase is determined by a user department which of the following should be confirmed first? A. Requirements of the products or services B. Availability of funds C. The preferred vendor D. Method of purchase 28 14
6/22/2020 Purchasing Process 6. Evaluation and Award The department usually evaluates the bids and • makes a recommendation Bids are evaluated for technical compliance and to • ensure that they are recommended for award to a responsive and responsible vendor Final approval of award is based on the dollar • amount 29 Closer Look " Responsive " simply speaks to a bidder doing as has been requested. If a bidder has to provide three references, did the bidder do so? If the bidder has to submit a notarized affidavit of some sort, did the bidder do so? " Responsible " means that the bidder is able to accomplish the task(s) being requested. If a bidder says that they can provide green widgets, can they? If the request is to build a bridge, has the bidder adequately done so before? After all, citizens wouldn't want to use that bridge if it weren't constructed by a competent, experienced, and "responsible" builder. 30 15
6/22/2020 Purchasing Process 7. Preparation of Purchase Order or Contract Name and address of vendor • Shipping address • Expected delivery date • Quantity and measure of unit • Description of what is to be purchased • 31 Purchasing Process 7. Preparation of Purchase Order or Contract (cont’d) Unit cost, extended cost and total cost • Transportation and FOB Point • FOB Source – ownership takes place on the • vendor’s dock FOB Delivery – ownership takes place on the • buyer’s dock 32 16
6/22/2020 Purchasing Process 7. Preparation of Purchase Order or Contract (cont’d) Name of person to contact for questions • Accounting information • Authorized signature of issuer • Date purchase order issued • 33 Purchase Order Example 34 17
6/22/2020 Purchasing Process 8. Monitoring Delivery Who receives actual delivery is dependent on • the size of the organization Ensure items are shipped to correct address • Copy of purchase order forwarded to user • department 35 Purchasing Process 9. Receipt of goods or services Upon receipt, someone should verify: • Quality • Quantity • Documentation • Verify items are “per specification” • Testing & storage • 36 18
6/22/2020 Purchasing Process 10. Capital Assets Purchases that qualify for capitalization should • be identified during the purchasing process Must be tracked in the capital asset • management system 37 Purchasing Process 10. Capital Assets (cont’d) Disposal: • Declare unusable items as surplus and sell, • donate or destroy Methods of disposition • Sale or donations • Public auction • Sealed/spot bids • Trade-ins • 38 19
6/22/2020 Knowledge Check “FOB Delivery” ownership takes place at… A. The buyer’s dock. B. The vendor’s dock. C. The shipping point. D. Time of payment. 39 40 40 20
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