DEO Procurement Training

1
DEO Procurement Training

2
Training Agenda

• Authority, Statute, Rules, Policy and Procedures
• Method of Procurements
• Purchase Orders, Change Orders and Cancellation
  Requests
• Settlement Agreements
• Internal and External Approvals
• Day to Day Purchasing
• Questions and Answers

3
Authority

• Authority
• Chapter 287, Part 1 Florida Statutes
• Chapter 60A-1, Florida Administrative Code
• Other Related References
• DEO Purchasing Policy 4.02
• DEO Purchasing and Contracting Procedures Manual
• DMS State Purchasing Memorandums
• Department of Financial Services
• Reference Guide for State Expenditures
• Comptroller Memorandums
• Agency Addressed Memorandums
• Federal Regulations

4
Standards of Conduct

• Centralized Purchasing Office
• Legality and Ethics
• Effective Service
• Efficiency
• Economy
• Fairness
• Open and Free Competition
• Diversity

5
Specific Purchase

• Per Florida Attorney General Opinion 78-101, an
  agency must have expressed or implied statutory
  authority to make a specific purchase
• Promotional items
• Client incentives
• Gift cards
• http//www.myfloridalegal.com/ago.nsf/Opinions/458
  FC3959F27499E852565930069670F

6
Nonconforming Request

• The Purchasing Office retains the final authority
  to
• Return/deny any Purchase Requisition that does
  not adhere to
• Department Policy
• Violates State and Federal Law
• Not in compliance with Florida Administrative
  Code
• Lacks Justification
• Conflict of Interest or Noncompetitive Practices
• Inappropriate Comments or Attachments

7
Purchasing

• Exempt Purchases from Competitive Procurement -
  Section 287.057(f), F.S.
• 1. Artistic Services
• 2. Academic program reviews lt50,000
• 3. Lectures by individuals
• 4. Auditing Services
• 5. Legal Services
• 6. Health Services involving examination,
  diagnosis, treatment, prevention, medical
  consultation or administration
• 7. Services provided to persons with mental or
  physical disabilities (non-profit corporations)
• 8. Medicaid Services
• 9. Family Placement Services
• 10. Prevention services related to health
  services (operated by non-profit corporations)
• 11. Training and education services provided to
  injured employees
• 12. Contracts entered into pursuant to 337.11
  (DOT)
• 13. Services or commodities provided by other
  governmental agencies

8
State Term Contracts

• Negotiated and managed by DMS Division of State
  Purchasing.
• More than 60 contracts currently, totaling more
  than 2 billion in state savings annually.
• Mandatory usage for state agencies and optional
  for OEUs.
• Meets the competitive solicitation requirement of
  Section 287.057, F.S.
• Per Rule 60A-1.043, all STC with multiple vendors
  providing the same product must have two quotes
  unless the contract expressly has other RFQ
  requirements.
• http//dms.myflorida.com/contracts

9
State Term Contracts

• Per Rule 60A-1.043, all STC with multiple vendors
  providing the same product must have two quotes
  unless the contract expressly has other RFQ
  requirements.

10
STC Exceptions

• FAC Rule 60A 1.044 State Term Contracts
• (2) State Agency Standard Configuration and
  Options
• If an agency determines that a standard
  configuration product will not meet the agencys
  needs and that it is therefore necessary for the
  agency to purchase specific product options or
  additions to the standard configuration product,
  the agency shall, in writing, specify why the
  standard configuration product(s) cannot meet the
  agencys needs due to
• -unavailability of the product within agency
  schedule or delivery requirements
• -need for compatibility with existing equipment
  or systems or
• -failure to meet agency-required
  specifications, quality levels or technical
  requirements
• (3) The written determination shall also include
  the price impact, both as a dollar amount and as
  a percentage of the price of the state contract
  or standard configuration item(s), that result
  because of the exception or deviation

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Purchasing

• Commodity
• Supplies, materials, goods, merchandise,
  printing, food, and equipment, tangible property,
  leased property
• Freight or Inside Delivery charges should be
  coded with the same Commodity Code as the
  product(s) being purchased, do not use 991-841
• Contractual Services
• Commodity Code 9xxxxx series
• Combination Parts and Labor
• Labor only (time and effort)
• Provider Services

12
Purchasing

• Section 287.058 (4), F.S. Contractual Services
  every procurement of contractual services in
  excess of the Category Two (35,000) threshold
  shall be evidenced by a written agreement or
  purchase order.
• 0-35,000 Purchase Order
• gt35,000 Contract Agreement
• Agencies are allowed to use the purchasing card
  for contractual services direct billings that do
  not exceed 75,000 in a State fiscal year.

13
Purchasing

• Section 287.057(18), F.S. Contractual Services
  gt65,000,
• Each agency shall establish a review and approval
  process for all contractual services contracts
  costing more than the threshold amount provided
  for in s. 287.017 for CATEGORY THREE which shall
  include, but not be limited to, program,
  financial, and legal review and approval. Such
  reviews and approvals shall be obtained before
  the contract is executed.

14
Purchasing

• Commodities and Contractual Services
• State agencies may purchase only items necessary
  to carry out statutory duties and should select
  items on an economically prudent and cost
  effective basis not to satisfy the personal
  convenience or personal preference of individuals.

15
Emergency Procurements

• Immediate danger to the public health, safety, or
  welfare or other substantial lost to the State
• Executive Order
• gt35,000 requires Certification by the Director
• It is not, I forgot to do my job and my boss
  already bought it or I need a purchase order to
  pay the invoice.

16
Procurement Cycle

• 1) Determine the Need
• 2) Specification or Product Description
• 3) Determine the Method of Procurement
• 4) Quotes or Formal Soliciation
• 5) Issuance of a Purchase Order
• 6) Receipt of Goods or Services
• 7) Invoice and Payment

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Purchasing System Controls

• Purchase Order
• Standard instrument for purchasing the majority
  of goods/services involving the submittal of a
  Purchase Requisition in MFMP
• Contract two party written agreement
• PCard is a payment mechanism NOT a procurement
  method

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Settlement Agreement

• Goods and/or Services Without Proper Authority
• Claims and Demands Against the State
• Indicates the Agency is not abiding by the rules
  and Laws of Florida
• Admission We Made a Mistake
• Reported to the Governors Office Monthly
• Contact Finance and Accounting

19
Procurement Thresholds

• Section 287.017, F.S. - Purchasing Threshold
  Categories
• Category One - 20,000 (requires three
  written quotes)
• Category Two - 35,000 (bid threshold)
• Category Three - 65,000 (legal and
  financial review)
• Category Four - 195,000 (DMS approval)
• Category Five - 325,000

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Internal and External Approvals

• Internal
• Management Review
• IRA (IT)
• OCO (Budget)
• Travel C676C
• Notary Justification (Supervisor)
• General Counsel Review
• Facility Services Work Order
• Telecommunications
• New Perquisite (Personnel)
• Membership Due (COO)
• Employee Moving Expenses (EMT/SMS/Personnel)

• External
• Vehicles (DMS)
• Advance Payment (DFS)
• GSA DMS Terms and Conditions (Vendor)
• CSA (DMS)
• Single Source gt195,000 (DMS)
• Notary Commission (DMS)

21
Bid or Not to Bid ?

• FAC Rule 60A 1.002
• (4) In accordance with Chapter 287, F.S., all
  purchases for which the total contract value is
  in excess of the threshold amount for Category
  Two (35,000) for a particular commodity
• group of commodities or
• contractual service
• shall be made by first securing formal
  competitive solicitations, unless an exemption
  applies.
• (5) Acquisitions shall be reviewed and
  considered on an agency-wide basis. The
  Purchasing Office shall not divide its purchases
  or its purchasing operations to circumvent the
  process.

22
Procurement Methods

• Section 287.057, F.S. - Methods of Procurement
• (1)(a)Competitive Solicitations gt35,000
• Invitation to Bid
• Request for Proposal
• Invitation to Negotiation
• (5)Exceptional Purchases
• Emergency Purchases - FAC 60A-1.046
• Agency Term Contract FAC 60A-1.001(b)
• Alternative Contract Source FAC 60A-1.047
• Single Source Purchases - FAC 60A-1.045
• State Purchasing Agreements (SPA) -FAC 60A-1.025

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lt35,000

• FAC Rule 60A 1.002 (2) and (3)Methods of
  Procurement (continued)
• (2) Purchases lt2,500 one quote (CMBE)
• (3) Informal Quotes
• 2,500 - 20,000 two quotes
• 20,001 - 35,000 three written quotes

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Single (Sole) Source

• For single source purchases exceeding Category
  Two, follow a separate process
• Advertised on Vendor Bid System (VBS)
• PUR 7776
• Seven business days
• If the purchase exceeds Category Four (195,000),
  DMS approval is required
• PUR 7777
• Post Intent to Award on VBS
• PUR 7778
• 72 business hours (excluding weekends and
  holidays)

25
Purchasing

• Order of Priority in Selecting a Vendor
• Respect - 413.036 F.S.
• Pride - 946.515 F.S.
• State Term Contract - DMS
• Agency Term Contract - DEO
• Alternate Contract Source WSCA/GSA
• SPA Agreements
• Competitive Solicitation
• Informal Quotes

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Day to Day Purchasing

• Respect
• Calendars
• Writing Instruments, e.g., Pens, Pencils,
  Markers, Highlighters
• First Aid Kits and Refills
• Clocks
• Medical Gloves
• White Marker Boards and accessories
• Floor Chair Mats
• Depends
• Drug Test Kits
• Staplers, staples and two hole punch
• Plaques, document holders
• Flags (United State of America and State of
  Florida, only)
• Janitorial and Lawn Care Services

27
Day to Day Purchasing

• PRIDE
• Business Cards
• Furniture
• Binders
• Uniforms
• Janitorial products other than name brand
• Envelopes quantity less than 5,000

28
Red Tape

• Delays in PR Workflow Process
• Incorrect Method of Procurement Code Selected
• Incorrect Commodity Code
• STC Number, field is not populated
• Required number of quotes, not obtained or
  attached
• IRA approval, not attached
• OCO approval, not attached
• Conference/Training Registration, Agenda and
  C676C, not attached
• No Written Justification
• Incorrect Attachments or Format Type
• Forgetting to Delegation MFMP Authority in Ariba
  when on Annual/Sick Leave

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Common Mistakes

• Leaving payment terms out of the procurement
• A statement of work that is unclear or not
  defined
• Not following purchasing laws and rules
• Preventing the perception of partiality to the
  vendor community
• Not focusing on getting the best price for the
  right product/service at the right time
• Signing agreements without consulting your
  purchasing office first
• PCard purchases exceeding Category Two
• After-the-fact purchases

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Day to Day Purchasing

• Conference Registrations
• Is exempt from MFMP if the Vendor accepts PCard,
  attach the invoice for payment to the C676C and
  Voucher for Reimbursement of Travel Expenses
  forms.
• If the Vendor does not accept PCard and the
  Vendor is registered in MFMP, a purchase
  requisition is required along with the C676C
  attachment.
• If the Vendor is not registered in MFMP, contact
  the Purchasing Office
• Training Registration
• Requires a MFMP purchase order

31
Day to Day Purchasing

• Employee Moving Expenses
• Requires three (3) written quotes
• Must be paid by Warrant
• Request for Authority to Pay Moving Expenses Form
• Signature Authority Division Director
• Written Justification required
• Description Field include the Location From
  To

32
Day to Day Purchasing

• OCO Purchases
• Requires OCO Budget Committee Approval
• Unit price of a 1,000 or more
• Object Code 5xxxxx series
• Replacement requires like funds
• Contact the Budget Office

33
Day to Day Purchasing

• IT Equipment
• Commodity codes starting with 250xxx use Object
  Codes
• lt1,000 use 3810xx or 3818xx series
• gt/1,000 use 5xxxxx series
• 2,500 or greater requires three (3) written
  quotes
• Requires Information Resource Request (IRR)
  Approval
• May require OCO approval
• IT Software
• Microsoft STC or GSA Schedule 70
• 2,500 or greater requires three (3) written
  quotes up to 150,000
• 25,000 or greater requires the PUR 7102,
  Alternate Contract Source approved by DMS
• Greater than 150,000 requires formal
  solicitation

34
Day to Day Purchasing

• Business Cards
• DEO Order Form
• Employees (one color)
• Executive Management (color)
• Include the cost of freight, 4.50 per delivery
  location
• Notary Public
• Notary Commission Justification Memorandum
• Commodity Code 477540
• Application attachment is not required. However,
  if you scan the application all confidential
  information must be redact.

35
Day to Day Purchasing

• Furniture
• PRIDE
• State Term Contract
• Office Depot
• Hon Authorized Dealer on State Term Contract
• Orlando Office only

36
Day to Day Purchasing

• Copiers
• Available Lease Periods (3, 4 or 5 years)
• No lease renewals provides negotiation
• Upon expiration equipment will be picked up
  within 10 days
• Less than 2,500 can go off state term contract
• Description Lease Term, Serial Number, Brand
  Name, Model Number, Class and Type

37
Day to Day Purchasing

• Membership Dues Section 216.345, F.S.
• Forms Library
• Membership Request Form (requires COO signature
  approval)
• Certification of Availability of Records for
  Public Inspection

38
Day to Day Purchasing

• Advanced Payment Section 215.422(14), F.S.
• Maintenance Agreements, Software License and
  Subscriptions
• Must results in a cost savings essential to the
  operation of the agency
• available only if paid in advance
• gt35,000 Requires DFS, Bureau of Auditing prior
  approval
• Other Goods and Services
• gt1,800 Requires DFS, Bureau of Auditing prior
  approval

39
Day to Day Purchasing

• Employee Recognition Awards Section 110.1245,
  F.S.
• Volunteer Recognition Awards Section 110.504,
  F.S.

40
Day to Day Purchasing

• Prohibited Expenditures Per Rule 3A-40.103
  F.A.C.
• Congratulatory or condolences telegrams
• Greeting Cards - Chapter 286.27  Use of state
  funds for greeting cards prohibited. No state
  funds shall be expended for the purchase,
  preparation, printing, or mailing of any card the
  sole purpose of which is to convey holiday
  greetings
• Plants, flowers, pictures, plaques, statues,
  globes, and other decorative items
• Entertainment for visiting dignitaries
• Refreshments such as coffee and doughnuts
• Decorative Items
• More expensive office supplies, furniture, lamps,
  etc
• Items not purchased in accordance with statute
  and rules
• Items purchased by unauthorized individuals

41
Day to Day Purchasing

• Blanket Purchase Orders
• Need Unknown
• Cost Unknown
• No Single Purchase Can Exceed 2,499 Without a
  Second Quote
• DO Start and End Date Coincides with the State
  Fiscal Year
• Functions Similar to an Open Account
• Authorized Buyers
• Justification
• Examples Janitorial Supplies, Hardware, Paper
  Products, Tires, Keys Key Blanks, Sun/ePass,
  Electrical/Plumbing/HVAC Services
• Non STC Services Attach Vendor Rate Sheet or Rate
  Per Hour
• Non STC at Retail Pricing

42
Blanket PO - Commodities

• Example
• Blanket Purchase Order for tires available on
  state term contract. Rate per state contract
  863-000-06-1. All invoices to include vehicle
  Tag number and VIN number. Term 7/1/07 -
  6/30/08. Authorized Buyer Jane Doe, Bob Smith,
  Joe Brown. (Previous DO292416)

43
Blanket PO - Services

• Example
• Blanket Purchase Order for transcription
  services on an as needed basis for the UC
  Appeals Hearings. TERM 7/1/12-6/30/09 RATE
  Per attached rate sheets. NO SINGLE PURCHASE TO
  EXCEED 2,499.99 WITHOUT OBTAINING A SECOND
  QUOTE(S). AUTHORIZED BUYERS Jane Doe, Bob Smith
  and Joe Brown. Payable upon receipt of a
  complete invoice.

44
Day to Day Purchasing

• Term Purchase Order
• Specified Items or Services
• Specified Rate
• Specified Term
• Justification
• Examples Janitorial Services, Pest Control,
  Copiers, Postage Machine Rental, Cellular
  Blackberry Service, Lawn Service

45
Term PO - Services

• Example
• Term purchase order maintenance agreement for
  Department owned copier. Minolta Delta Color CF
  1501 SN-305165. Rate 136.00 monthly to include
  3,000 copies per month. To be paid quarterly in
  arrears upon receipt of itemized invoice. Term
  7/1/12- 6/30/13. Authorized Buyers Jane Doe, Bob
  Smith. Toner Cartridges, drums and staples
  included in maintenance agreement. (Previous DO
  289781)

46
Term PO Pest Control

• Example
• Term purchase order for monthly pest control
  services for Caldwell Building. TERM 7/1/12 -
  6/30/13 RATE per State Term Contract rate of
  1.31 per 1000 sq.ft./month. Facility Sq. Ft.
  16,000 sq. ft./1,000 sq. ft. x 1.31 20.96 per
  month. Authorized Buyers Jane Doe, Bob Smith.
  Payable in arrears upon receipt of a complete
  invoice. (Previous DO 290364)

47
Confidentiality

• Before uploading attachments to
  MyFloridaMarketPlace, you must redact all
  confidential information, including but not
  limited to all social security numbers, all
  health information protected by HIPAA, and
  addresses for law enforcement officers, judges,
  and other protected classes. If confidential
  information is not properly redacted, you may be
  in violation of state and/or federal laws. For
  information about what constitutes confidential
  information, under applicable state and federal
  law, consult your Agency General Counsel.
• By checking this box, I confirm that I have not
  disclosed any confidential/protected information
  in the attachments or comments for this
  transaction in violation of Chapter 119, Florida
  Statutes HIPAA or any other state and/or
  federal laws. I confirm that I will not disclose
  any confidential/protected information to any
  unauthorized individual/entity. I also understand
  that violation of this policy may result in
  disciplinary action including potential
  termination.

48
Purchase Order Change Order Request

• Written Justification Required
• Increase or Decrease Money
• Increase or Decrease Quantities
• Change in Price/Rate/Freight Charge
• Accounting Information
• Change On Behalf Of
• Term End Date

49
Purchase Order Cancellation Request

• Cancellation Request
• Open Order is a Financial Liability to the Agency
• No funds have been expended
• Company eform
• Cancel Requisition
• Title Field Should Duplicate the Purchase Order
  Title
• Written Justification, required
• CANCEL button is PROHIBITED

50
Receipt and Inspection of Goods

• Inspect order immediately
• check for damage compare description, quantity
  and price to the Purchase Order.
• DFS allows only five day from receipt of
  commodities or services for inspection and
  acceptance.
• Payments for merchandise received shall be made
  only on the basis of the agreement as to
  quantity, price, condition and description.
• Invoices that do not match the Purchase Order
  should be disputed immediately and should not be
  paid.

51
Receipt and Inspection of Goods

• Receipt Items in MyFloridaMarketPlace

52
End of the Year Activities

• Current Fiscal Year Close Out
• May 15th Cut Off
• Issuance
• Order/Receipt
• Invoice and Payment

• Preparing for Next Fiscal Year
• May 15st Cut Off
• Compliance Review
• Competitive Solicitation
• Issuance

53
Purchasing Office

• Questions and Answers