PROCUREMENT

Marcy MealyProcurement SpecialistCDBG Program

Procurement

Recipients of CDBG funds are responsible for ensuring that goods and services are procured competitively and in accordance with established procurement rules and regulations.

Local procurement policies should describe how the recipient will procure supplies, materials, services and equipment.

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Procurement

The policy should assure that all purchases are handled fairly and in a manner that encourages full and open competition.

Recipients should follow the procedures established in the policy and document how all procurements were handled.

Documentation of the procurement process will show that the recipient obtained high quality goods and services at the lowest possible price through an open, competitive process.

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Procurement and Conflict of Interest Policies

Must have a written procurement policy

CDBG or local procurement policy

Can adopt CDBG policy to apply only to the CDBG

funded project Adopt written procedures to handle and resolve

procurement disputes Must have a written conflict of interest policy

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Conflict of Interest

Prohibited conflicts: Person with CDBG responsibilities, decision-

making power or information may NOT: - obtain a financial interest or benefit from

CDBG activity- have an interest in contract or subcontract

Grant Administrator cannot help grantee with the procurement of grant administration if they intend to submit proposal

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Four Kinds of Procurement

Small Purchases

Non-competitive Proposals

Competitive Proposals

CompetitiveSealed Bid

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Small Purchases

Formal bid solicitation is not required for purchases under $25,000

Price or rate quotations shall be obtained from an adequate number of qualified sources

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Noncompetitive Proposals

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This method may be used only under VERY limited circumstances.

Grantee should consult state CDBG staff before utilizing this method The item/service is available only from a single source State may authorize the method in the event of a public

emergency After solicitation of a number of sources, competition is

determined inadequate. (fewer than 3 bids) - submit list of solicited firms - submit copy of RFP/RFQ or invitation to bid - submit response (s) - rating/ranking sheets

Competitive Proposals

Typically used in the selection of professional service providers

Two types: Request for Proposal (RFP) – cost is a factor Request for Qualifications (RFQ) – cost is not a

factor in the procurement of engineering and architect services

CDBG funds may not be used to pay for any preliminary engineering or grant writing services

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Competitive Proposal - RFP

Document Procurement Process for project file

Grantee must send request, receive responses and complete the evaluation

Requests for proposals will be publicized and identify all evaluation factors and their relative importance

Grantee must honor reasonable requests for an opportunity to compete

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Competitive Proposals - RFP

Proposals must be solicited from an adequate number of qualified sources

Maintain a list of Professional Service Providers

Maintain a list of MBE/WBE firms for construction, engineering and other professional services

Grantee must conduct a technical evaluation of the submitted proposals

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Competitive Proposals - RFP

Awards will be made to the most responsive and responsible bidder – must clearly be the most advantageous source of the services – based on price and other factors

Unsuccessful bidders must be notified in writing

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Competitive Proposal - RFQ

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For procurement of architecture or engineering services Request for Qualification (RFQ) may be used.

Most qualified competitor is selected based on evaluation of qualifications

Price is not used as a selection factor This approach may be used only to

purchase architectural and engineering services

Competitive Sealed Bid

Typically used in the procurement of construction contracts

Award is based on fixed bid price (lump sum or unit price) – “cost plus” contracts prohibited

Contract is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (lowest responsive and responsible bidder)

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Invitation for Bid

Must clearly identify all bidding requirements 10-hour training requirement for all contractor

employees working on public works

E-Verify –is necessary for all contracts paid with CDBG funds

Obtain applicable Federal wage rates from DED. Addendum cannot be issued after 72 hours prior to the bid opening. If providing sales tax number to contractors and

subcontractors, Section 144.062 of the State Statutes, advertise in a manner that all bidders are aware that the sales tax saving method is being used.

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Invitation for Bid

Maintain written records for each procurement action sufficient to detail the significant history of the transaction

Contracts over $25,000 may be formally advertised once a week for a minimum of three weeks (21 days) prior to the bid opening

Internet advertisement - 21 days – must ensure that bidders are informed that internet is being used in lieu of newspaper advertisement

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Invitation for Bid

Contracts cannot be divided to keep them under $25,000

Alternates may be requested in the bid process Bid documents must specify the order in which

alternates will be applied in determining the low bid Alternates must be used in the order they are

written Submit to our office documentation of

advertisement for bids and affidavit of publication

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Bid Opening & PreselectingAward of Contract

All bids and proposals opened and read in a public meeting

Officials will keep minutes all bid openings Check references and use evaluation form Review all Bids. Determine if bids are legally and

technically responsive Process for selecting other than the low bidder.

Must be lump sum or unit price bids. Unit price determines lump sum.

May not Negotiate with bidder

Any or all bids may be rejected if there is a sound documented reason.

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Bid Opening & Preselecting

Award of Contract Grantee will hold a public meeting to make their

decision and selection.

Official minutes contract award will be kept in grant files

Need approval from DED if less than three responses are received prior to awarding a contract

Request to DED for approval to come from the grantee/sub-grantee

Notify all unsuccessful bidders in writing 19

Prior to Award of Construction Contract

Verify that contractor is not on the listing of debarred contractors

Request DED to verify that the contractor has a certificate in good standing with the Secretary of State

Request DED to verify that contractor’s bonding company is on the Department of Treasury’s listing of approved sureties

Provide in writing the correct names and spelling of each

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Change Orders

It is prohibited to change order out items while in the process of awarding the contract

This method of contracting will be considered negotiation and CDBG funds cannot be used to pay for the construction

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The “essence of good procurement” can be summarized as follows:

Identify and clearly specify standards for the desired goods or services

Seek competitive offers to obtain the best possible quality at the best possible price

Use a written agreement that clearly states the responsibilities of each party

Keep good records

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Questions?

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