What Method Is It?

1
What Method Is It?

• Jan Giffin, CPPB, VCO
• Procurement Management Account Exec.
• DGS- Division of Purchases Supply
• jan.giffin_at_dgs.virginia.gov

2

• Overview
• Definitions
• Methods of procurement and determining which
  method of procurement to use based on the
  requirements
• Review proper use of each method presented, based
  on state guidelines and good purchasing practices

3
Goods Definition

• Material, equipment, supplies, printing, and
  automated data processing hardware and software
  (Code of Virginia, 2.2-4301).

4
Services Definition

• Services are any activities performed by an
  independent contractor wherein the service
  rendered does not consist primarily of
  acquisition of equipment or materials, or the
  rental of equipment, materials and supplies (Code
  of Virginia, 2.2-4301).

5
Buying both goods services

• When the estimated cost of materials, equipment,
  or supplies amounts to fifty percent (50) or
  more of the total expenditure, it is not
  considered a contractual service and shall be
  obtained using the procedures for the procurement
  of goods.

6
Buying both goods services

• The procurement process for the rental or lease
  of any equipment will be handled in the same
  manner as the procurement of goods.

7
Responsive Bidder

• A person or firm who has submitted a bid which
  conforms in all material respects to the IFB
  (VPPA, 2.2-4301).

8
Responsible Bidder or Offeror

• A person or firm who has the capability, in all
  respects, to perform fully the contract
  requirements and the moral and

business integrity and reliability which will
assure good faith performance, and who has been
prequalified, if required (VPPA, 2.2-4301).
9

• Use Appropriate Language

• Mandatory verbs
• shall
• must
• Permissive verbs
• may
• should
• will (usually used to signify what the agency
  will do)

10
Delegated Authority

• State Agencies have a general delegation of
• 50,000 - Goods Printing
• Unlimited Services
• Select state agencies have requested through DPS
  an increase in delegation for goods and/or
  printing varying from 100K to unlimited.

11
Delegated Authority

• Localities and Authorities
• Are governed by the Virginia Public Procurement
  Act (VPPA)
• Must adopt their own small purchase procedures in
  writing and are not governed by the Agency
  Procurement Surplus Property Manual (APSPM)

12
Methods

• Section 2.2-4303 of the VPPA recognizes six
  methods of procurement
• Small Purchases
• Competitive Sealed Bidding
• Competitive Negotiations
• Emergency
• Sole Source
• Reverse Auction

13
Determine Method

• Determine value of the contract - Consider total
  of initial term all possible renewal periods.
• 1 year term contract expected to be 30,000
• 4 possible renewal periods 150,000 value

14
Purchases over 50,000

• Competitive Sealed Bidding
• Competitive Sealed Bidding is accomplished by
  issuing an Invitation For Bids (IFB)
• - Preferred Method of contracting
• Competitive Negotiation
• Competitive Negotiation is accomplished by
  issuing a Request for Proposals (RFP)
• - Must be justified in writing

15

• Competitive Sealed Bidding
• (APSPM 6)

• It is the preferred method for acquiring goods,
  printing, and nonprofessional services for public
  use when the estimated cost is over 50,000.

16

• Competitive Sealed Bidding
• (APSPM 6)

The goods or services must be capable of being
described so that bids submitted may be evaluated
against the description in the Invitation For
Bids (IFB) and an award made to the lowest
responsive and responsible bidder.
17
IFB Requirements

• Post/Advertise in eVA VBO Buyer
• Solicit 6 valid sources, incl. 4 minority or
  women-owned businesses document on bidders list
  (unless set-aside)
• Prepare bidder solicitation list include in
  file
• If fewer are solicited, document file
• Be sure final solicitation meets the needs of the
  requestor obtain internal approvals

18
Competitive Negotiation

• A method of purchasing goods and services,
  usually of a highly complex and technical nature
  whereby qualified individuals or firms are
  solicited by means of a Request for Proposals
  (RFP).
• Negotiations shall be conducted.

19

• Competitive Negotiation
• (APSPM 7.1, 7.2)

• A requirement exists but definitive
  specifications cannot be described
• Justification for use of competitive negotiation
  documented and approved by agency head or
  designee
• Verify adequate negotiation skills adequate
  time to complete all stages of the process

20

• RFP Requirements
• (APSPM 7.2, Annex 7-E)

• Justify (Goods Nonprofessional Services)
• Advertise in a newspaper of general circulation
• Post/advertise notice for a minimum of 10 days in
  the VBO ads on the eVA website
• Evaluation panel selected and criteria
  established
• Pre-proposal conference held/site visit (if
  provided for in the RFP)

21
IFB Format

• (APSPM 6.2)
• Any special approvals or releases needed before
  beginning? (i.e., CP-15, VCE)
• Written specifications and requirements
• capable of being described so that bids can be
  evaluated based upon the requirements in the IFB
• Include all general and appropriate special terms
  conditions
• Include pricing schedule or scenario
• Establish due date time

22
IFB Development

• (APSPM Annex 6-D)
• Suggest following the format in APSPM (see format
  in Annex 6-B)
• Include requirement for licenses needed and
  document contractors license number
• Is work being done on state property?
• If so, be sure insurance is required

23
IFB Development, continued

• If it is anticipated that a bid may exceed
  available funds, include the Negotiations with
  the Lowest Bidder clause in special terms
  conditions--not to be used as a matter of
  routine. Also, if negotiations are conducted,
  the buyer must make the decision in advance in
  writing.
• Follow format in APSPM

24
Pre-bid conference or Site Visit

• Required for complex, large (over 100,000) or
  critical requirements
• To emphasize and/or clarify requirements
• To eliminate ambiguities
• To permit vendor input

25
Conducting Pre-bid Conferences

• Schedule 10 days from issue date posting date
• Conduct when where per the solicitation
• Attendance roster signed
• ONE person (usually from Purchasing) conducts the
  conference/site visit
• Arrange for key personnel to attend and introduce
  them
• Take notes or record
• conference
• Hold Mandatory conferences
• only when necessary

26
Pre-bid Conference

• EMPHASIZE the fact that nothing said is official
  until the change/clarification is issued in the
  form of a written addendum
• All questions do not have to be answered at the
  conference
• After, get questions in writing and
  respondgiving all vendors the same information,
  if appropriate

27
Addendum

• Issue an addendum, if necessary, to all who
  received a solicitation
• If more than one addendum is issued during the
  solicitation stage, date each addenda when issued
  and sequentially number them
• Post addenda on eVA VBO Buyer
• The due date for responses should not be less
  than 10 days after the final addendum

Addenda 1
28
IFB Receipt (APSPM 6.3.a)

• Receive bids until the date and time specified
• Check timing device for accuracy and be
  consistent with the use of the timing device

• Use date/time stamp or clock where bids are
  received
• Suggest publicly closing bids announcing that,
  IFB __ is now closed and no further bids shall
  be received.

29
IFB Opening (APSPM 6.3.a)

• Publicly open and read aloud
• name of bidder, price, discount terms if
  considered in making the award, brand
  names/numbers, if requested
• Late bids shall not be considered (may be
  returned to the bidder unopened)
• The public opening of bids for construction type
  contracts shall be held 24 hours after the date
  and time set for submission of bids, Code of
  Virginia, 2.2-4330 A (ii)

30
Informality

• A minor variation or variation of the bid or
  proposal from the exact requirements of the IFB
  or RFP, which does not affect
• Price
• Quality
• Quantity
• Delivery
• for goods, services or construction being
  procured (Code of Virginia, 2.2-4301)

31
Determine Responsiveness (APSPM 6.3.b)

• After bid opening, each bid is evaluated to
  determine if it is responsive to the IFB
• Has it met all of the requirements of the
  solicitation?
• The responsive bids are then evaluated according
  to the criteria and/or
• evaluation procedure described
• in the IFB to determine which is the lowest bid

32
Determine Responsibility (APSPM 6.3.c)

• The lowest responsive bidder is then evaluated to
  determine if the firm is responsible
• Check references, if requested
• Check insurance coverage if applicable
• Check contractors license with Board for
  Contractors (804-367-2785 or www.dpor.virginia.gov
  ) if applicable
• Evaluate financial condition (if required)

33
Complete the Bid Evaluation

• The contract is awarded to the lowest RR. The
  award, up to 100,000, may be made to a
  reasonably priced minority or woman-owned bidder
  that is other than the lowest RR. If the award
  is made to other than the lowest priced bidder,
  the award shall be made to the next lowest RR
  minority or women-owned bidder
• If the bidder is not responsive to the
  solicitation, go to the next lowest bidder
• If the bidder is not determined to be
  responsible...

34
Sec. 2.2-4359

• 2.2-4359. Determination of nonresponsibility.
  -- A. Following public opening and announcement
  of bids received on an Invitation to Bid, the
  public body shall evaluate the bids in accordance
  with element 4 of the definition of Competitive
  sealed bidding in 2.2-4301. At the same time,
  the public body shall determine whether the
  apparent low bidder is responsible. If the
  public body so determines, then it may proceed
  with an award in accordance with element 5 of the
  definition of Competitive sealed bidding in
  2.2-4301. If the public body determines that the
  apparent low bidder is not responsible, it shall
  proceed as follows
• 1. Prior to the issuance of a written
  determination of nonresponsibility, the public
  body shall (i) notify the apparent low bidder in
  writing of the results of the evaluation, (ii)
  disclose the factual support for the
  determination, and (iii) allow the apparent low
  bidder an opportunity to inspect any documents
  that relate to the determination, if so requested
  by the bidder within five business days after
  receipt of the notice.
• 2. Within ten business days after receipt of the
  notice, the bidder may submit rebuttal
  information challenging the evaluation. The
  public body shall issue its written determination
  of responsibility based on all information in the
  possession of the public body, including any
  rebuttal information, within five business days
  of the date the public body received the rebuttal
  information. At the same time, the public body
  shall notify, with return receipt requested, the
  bidder in writing of its determination.
• Etc. etc.
• See also sections B., C., D. of 2.2-4359.

35
IFB Award

• A Notice of Intent to Award is posted for 10 days
  if a lot of interest was shown or a protest is
  expected, otherwise
• Post a Notice of Award for 10 days
• Award or Intent to Award is posted on eVA VBO
  by updating your initial posting of the
  solicitation

36
IFB Award Document

• Award document may be a purchase order or
  Notice of Award
• Orders placed through eVA

37
Post-Award (APSPM 10.2)

• Assign a contract administrator (CA) in writing.
  State roles and responsibilities
• Provide instructions and copy of
• successful bid and/or contract
• specifications to CA
• CA to provide monitoring of
• contract to assure both contractor
• and agency live up to obligations

38
File Documentation (APSPM Annex 6-D)

• File (paper or electronic) should contain the
  who, what, where, when, why, and how of the
  procurement
• Use a checklist
• Unsuccessful bids are kept too
• Envelopes are kept until period for protest has
  elapsed. Keep date / time received (front of
  envelope)
• Document administration efforts

39
Two-step Competitive Sealed Bidding

• Used when its impractical to initially prepare a
  definitive purchase description to support an
  award based on prices.

Step 1 -- IFB requesting Technical
Proposal Step 2 -- IFB requesting Price
40
Combined Two-Step IFB (APSPM 6.6)
OR
Rather than two separate steps

• Prepare an IFB that incorporates BOTH the
  technical proposal and request for bid price
• Bid price must be placed in a separate envelope
  from the technical proposal
• Evaluate technical proposal THEN open bids only
  from those bidders whose proposals are acceptable

41

• RFP Preparation
• Goods Nonprofessional Services

• Background
• Statement of Needs
• Preparation Submission Instructions
• Evaluation Award criteria
• Pre-proposal conference
• General Special Terms Conditions
• Method of Payment
• Pricing Schedule
• Any attachments

42

• Developing the Solicitation
• (APSPM Annex 7-E)

• Provide background information needed by the
  Offeror, not requirements
• Use mandatory verbs sparingly in the Statement
  of Needs section
• Specify what the agency will provide
• Develop deliverables (if needed) showing time
  frames, requirements, and to whom the delivery
  should be made

43

• Developing the Solicitation

• If "Best and Final Offers are expected during
  negotiation, this must be stated in the RFP
  (Note Use with caution it may "box you in")
• For highly complex or large dollar purchases, a
  pre-proposal conference (mandatory or optional)
  should be conducted and noted in the RFP
  mandatory or optional (required over 100,000)
• date, time, and place
• policy on late admittance

44

• Developing the Solicitation

• Specific proposal instructions should state
  exactly what the Offeror is to submit as a
  complete proposal
• Select appropriate special terms and conditions
• Review insurance requirements
• Determine if licenses are required and if so,
  include that as a requirement in the RFP
• Develop pricing schedule
• See guidelines in APSPM, Annex 7-B

45

• Developing the Solicitation

• The Evaluation Committee
• Do not include too many
• on the committee, usually
• 3 to 5 members
• (requestor/CA, expert, purchasing)
• Each member must contribute the time needed
• Each member must be committed to the project
• Purchasing takes the lead

46

• Developing the Solicitation

Purchasing Departments Role-

• May or may not evaluate proposals
• Distributes proposals, conducts the
• meetings, schedules presentations
• Organizes, oversees, and documents the process
  (and the file)
• Ethics - may have evaluators affirm that they
  have no interest in the procurement action

47

• Developing the Solicitation

• The Evaluation Criteria
• Based upon the specific proposal instructions --
  what is to be submitted in the Offerors proposal
  
• Criteria should not be more than 5 or so
• Criteria weights should total 100
• Do not "over" or "under" value any 1 criterion
• Price should always be an evaluation criteria
• Weights must be listed in RFP or publicly posted
  before receipt of proposal

48
Conducting Pre-proposal Conferences

• Schedule 10 days from issue date posting date
• Conduct when where per the solicitation
• Attendance roster signed
• ONE person (usually from Purchasing) conducts the
  conference/site visit
• Arrange for key personnel to attend and introduce
  them
• Take notes or record
• conference
• Hold Mandatory conferences
• only when necessary

49
Issue the RFP

• Solicit 6 valid sources, incl. a min. of 4
  minority or women-owned businesses, if
  available. If fewer solicited, document. (Unless
  set-aside)
• Pre-proposal conference/site visit
• (if provided for in the RFP)
• Addenda issued, if needed
• Respond to questions same as in the IFB

50

• Receipt of Proposals
• (APSPM Annex 7-E)

• Receive RFPs until the date and time specified
• Be consistent with the timing device used to
  signify the time of closing
• Time-stamp as received
• Record who proposals were received from

51

• Late Proposals
• (APSPM 3.1.e)

• Late proposals or those received from vendors who
  did not attend a mandatory pre-proposal
  conference are returned, unopened

52

• Opening Proposals
• (APSPM 7.3)

• Responses may be opened recorded privately
  after closing date
• Unless provided for in the RFP, there is no
  public "opening"
• If held, only the names of the Offerors are read
  aloud

53

• Receipt Evaluation
• (APSPM 7.3)

• Check to see that all information required in the
  specific proposal instructions has been received
• If some information is
• missing, the buyer may
• request prompt submission
• of any missing information

54
Evaluation of Responses

• What is to be submitted in the Offerors proposal
  is based upon what was requested in the specific
  proposal instructions.
• Suggestion Copy paste the section in the RFP
  on specific proposal instructions as the basis
  for the evaluation score sheet.

55

• Evaluation of Responses

• Responses to RFPs are generally NOT declared
  nonresponsive. With few exceptions, all
  responses should be evaluated
• Those missing information after the request to
  remedy the deficiency should receive a lower score

56

• Evaluation Committee Review
• (APSPM Annex 7-E)

• Distribute proposals evaluation instructions
• Emphasize security of information
• Members review each proposal individually list
  areas of apparent noncompliance and/or areas
  needing clarification
• These lists are evaluated by the committee as a
  group to determine if clarification is needed
  from the Offeror

57

• Oral presentation
• (APSPM Annex 7-E)

• If needed, the buyer schedules oral
  presentations (phone or in person)
• Negotiation is NOT conducted at this time

• Upon initial evaluation by members, or after the
  the oral presentation if held, the committee
  meets as a group to discuss proposals.

58

• Evaluate Proposals

• Responsibility Issues
• References provided are checked
• Inspections are made
• Licenses are verified
• The financial manager may review and evaluate
  financial data submitted even if not part of the
  rest of the evaluation committee

59

• Assign Points
• (APSPM Annex 7-B)

• Points are assigned in accordance with the
  evaluation criteria in the RFP
• The Buyer may assign the points for pricing
  (equation in APSPM, Annex 7-B)
• Recommended methodology for assigning points is
  found in the APSPM, Annex 7-E

60

• Consensus Evaluation

• The committee prepares one consensus evaluation
  sheet showing
• names of the committee members
• names of all Offerors (including those that were
  removed from further consideration)
• evaluation criteria point values for each
• the consensus score assigned for each proposal by
  the evaluation committee

61
Selection of Offerors for Negotiation
Determine Negotiation Range

• For goods or nonprofessional services Decide
  which two or more Offerors to negotiate with
  based upon the scoring of the proposals.

For professional services Decide which Offeror
with whom to negotiate.
62
Only ONE Suitable Offeror? (APSPM
Annex 7.3.c)

• If it is determined in writing that one Offeror
  is clearly more highly qualified and suitable
  than the others under consideration, a contract
  may be negotiated and awarded to that Offeror
  (This is rare)

63

• Negotiation Planning
• (APSPM Annex 7-E)

• Lead negotiator is selected (usually the buyer
  or other representative from Purchasing)
• Negotiating strategy is planned. Establish
  maximums and minimums
• Identify each point to be negotiated
• The goal is a WIN-WIN contract
• Schedule negotiation sessions with
• Offerors selected

64
Negotiation

• May be teleconference, face-to-face is best
• On own turf, if possible
• May schedule back-to-back sessions with competing
  offerors
• May provide agenda before meeting (or not)
• Each person present must know their role
• No disagreement between members
• Remember the proposal is an offera starting
  pointofferors expect negotiation

65

• Completing the Negotiations

• Obtain in writing, confirmation of any changes to
  the proposal that were agreed to during
  negotiations (this will be a part of the file)
• If provisions for Best and Final Offers (BAFO)
  were included in the RFP, they are submitted
• Conduct pre-award surveys, as necessary
• Verify any information that is in question
• Obtain performance payment bonds, if required
• Review APSPM, Annex 7-C for tips/guidelines
• Verify insurance requirements, if requested

66

• Award of Contract

• After negotiations have been completed with each
  of the selected offerors, the Commonwealth
  selects the offeror which, in its opinion, has
  made the best proposal however, if the contract
  is up to 100,000, the contract may be awarded to
  a reasonably ranked minority or woman-owned
  offeror that is other than the highest ranking
  offeror

67
RFP Award

• A Notice of Intent to Award is posted for 10 days
  if a lot of interest was shown or a protest is
  expected, otherwise
• Post a Notice of Award for 10 days
• Award or Intent to Award is posted on eVA VBO
  by updating your initial posting of the
  solicitation

68
Developing the Contract (APSPM Annex 7-E)

• Prepare a two-party contract that incorporates
  the RFP and the Offeror's proposal, as negotiated
• Include milestones, such as progress
  reports/deliverables, for payment schedule
• Assign contract administrator in writing to be
  responsible for contract monitoring and oversight
• Place order through eVA

69

• Post Award Activities
• (APSPM Annex 7-E)

• Obtain performance payment bonds, if required
• Post "Notice of Intent to Award", if a protest
  is anticipated, otherwise, Post a Notice of Award
  for 10 days
• Verify insurance requirements, if requested in
  RFP
• Administer contract

70
Summary

• Competitive Sealed Bidding
• Preferred Method
• Capable of describing items for evaluation based
  on price
• Award to lowest responsive responsible bidder

• Competitive Negotiation
• Use of competitive negotiation must be justified
  and approved
• Pricing is component of evaluation criteria
• Must negotiate with two or more Offerors unless.
• Can negotiate many times with different Offerors