PROCUREMENT OPTIONS

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PURCHASING 102

• Presented by
• Bill Hughes and Erin Barkman
• OSC Bureau of Contracts
• Bruce Hallenbeck and Larry Klein
• OGS Procurement Services

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AGENCY PROCUREMENT OPTIONS

• Select from Preferred Sources
• Purchase from OGS Contracts
• Utilize Alternate Methods Available Through OGS
• Develop Own Purchasing Strategy

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PREFERRED SOURCES
COMMODITIES

• Correctional Services (Corcraft) Commodities
  only
• Industries for the Blind of New York State
  (IBNYS)
• NYS Industries for the Disabled (NYSID)
• Buy OMH
• Qualified Veterans Workshop

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PREFERRED SOURCES
SERVICES Equal Priority Accorded to

• Industries for the Blind of New York State
  (IBNYS)
• NYS Industries for the Disabled (NYSID)
• Buy OMH
• Qualified Veterans Workshop

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Preferred Sources

• If product meets form, function and utility
  (i.e.. quality, quantity, delivery, packaging)
  order should be placed with appropriate preferred
  source
• If does not meet form, function and utility, must
  document in Procurement Record

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OGS CONTRACTS
Why Use OGS Contracts

• Expedient generally place an order
• No need to bid
• No need for OSC or AG approval (mini-bids may
  need OSC approval)
• No need to advertise in Contract Reporter

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OGS CONTRACTS

• Statewide Terms
• Filed Requirements
• Multi-State
• Prime Vendor
• Brand Bids

• Continuous Recruitment
• Piggyback
• Negotiated
• Back Drop

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Filed Requirements Contracts

• Covers specific delivery points and estimated
  quantities
• Guaranteed source of supply for critical
  commodities
• Agencies file their requirements prior to
  establishment of contract
• Contractual obligation to purchase
• Examples include rock salt and fuels

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Multi-State Contracts

• Permits participation by NYS authorized users as
  well as other entities
• Contract administered by one of the participating
  entities
• Minnesota Multi-State Drug Contract

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Prime Vendor Contracts

• Comprehensive contract source for broad range of
  goods and/or services within a given market
• May be awarded to single or multiple vendors
• Examples include food contract, office supplies
  and industrial supplies

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Brand Bid Contracts

• Issuance of multiple contracts or a single
  contract with multiple lots for different brands
  of a similar product
• Provides customer the widest selection of
  products
• Examples include printer contracts, copier
  contract, mailing machines

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Continuous/Periodic Recruitment

• Used in long term contracts
• Allows OGS/PSG to accept bids after the bid
  opening, adding vendors after the original award
• Included in printers, microcomputers, books and
  many service contracts, etc.

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OGS Piggyback Agreements

• OGS piggybacks onto existing contracts developed
  by other governmental agencies (federal,
  political subdivision or other states) creating a
  NYS contract
• Includes additional terms as they relate to NY
  State procurement rules

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OGS Negotiated Contracts

• Established by agreements between OGS and a
  vendor in lieu of issuing a bid
• May include continuous/periodic recruitment
• Printer contract is a negotiated contract

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Backdrop Contract

• Consists of a pool of pre-qualified contractors
  who are eligible to participate in the contracts
  Mini-Bid process or other specified selection
  process
• Examples include elevator maintenance, telephone
  PBX, and IT services

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AGENCY STRATEGIES

• Discretionary Purchases
• Filed Price Agreements
• Small Business Initiatives
• OGS or Less
• Sole/Single Source

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AGENCY STRATEGIES

• Backdrop Mini-Bids
• Piggybacks
• Continuous/Periodic Recruitment
• Emergency Purchases
• Competitive Bids using IFB/RFP

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Discretionary Purchases

• Not subject to States competitive bidding
  requirements
• 15,000 for most State agencies
• 15,000 to 50,000 if purchased from NYS small
  business, M/WBE or recycled/remanufactured
  products
• Guidelines on website at
• www.ogs.state.ny.us/procurecounc/pdfdoc/Discretio
  narypurchasingguidelines8-17.pdf

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Discretionary Purchases

• Under 15,000
• - Procurement record must support selection
  of vendor and reasonableness of price
• - Must advertise quarterly in the Contract
  Reporter for anticipated purchases between
  5,000-15,000

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Discretionary Purchases

• 15,000 - 50,000
• - Procurement record must support selection
  of vendor and reasonableness of price
• - Must advertise in Contract Reporter
• - Must submit to OSC for approval

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Filed Price Agreements

• For products not available from Preferred Sources
  or OGS contracts
• For discretionary purchases up to 15,000
• Agency responsible for determining that product
  meets form, function and utility
• Agency responsible for documenting reasonableness
  of price in procurement record

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Small Business Initiative

• For products not available from Preferred Sources
  or OGS contracts
• For procurements from small, minority or women
  owned NYS businesses
• For purchases up to 50,000 without advertising
  in Contract Reporter or formal bid
• Purchases over 15,000 require OSC approval
• Agency responsible for documenting reasonableness
  of price in procurement record

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OGS or Less

• Allows purchase from other than State contract if
  lower prices or terms are more economically
  efficient to the State agency.
• Contractor must be given opportunity to match
  pricing.
• OGS or Less purchases must meet requirements of
  law.

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Sole Source Procurement

• Where only one vendor can provide the
  product/service required
• Procurement record must explain
• - Unique nature of the requirement
• - Basis for determining only one vendor is
• able to meet needs
• - Reasonableness of price

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Single Source Procurement

• Where two or more vendors can supply
  product/service but selection of one is based on
  expertise, previous experience, etc.
• Procurement record must explain
• - Alternatives considered
• - Rationale for selecting specific vendor
• - Reasonableness of price

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Backdrop Mini-Bids

• Benefits
• - Terms Conditions already in place
• - Negotiating time saved
• - Pre-qualified list of vendors
• - Contract Reporter advertisement not
  required
• - AG approval not required

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Piggyback Contracts

• Contract established by NYS based on existing
  contracts developed by other governmental
  agencies (federal, political subdivision or other
  states)
• Must obtain OGS approval
• Guidelines available on OGS website at
• - www.ogs.state.ny.us/procurecounc/ pdfdoc/pgbg
  uidelines.pdf

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Continuous/Periodic Recruitment

• Recommend that the vendor contact OGS for
  addition to existing contract
• Allows accepting bids after the bid opening and
  adding vendors after the original award

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Emergency Purchases

• Agency head must approve waiver of competitive
  bidding requirements
• Must document nature of emergency potential
  effect on health, safety or conservation of
  public resources and detailed description of
  commodities, services and technology to be
  provided

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Emergency Purchases

• Should make reasonable attempt to get at least
  three oral quotes with written confirmation
  within a reasonable time
• FAILURE TO PROPERLY PLAN IN ADVANCE DOES NOT
  CONSTITUTE AN EMERGENCY

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Competitive Bids using IFB

• Invitation for Bids (IFB) is most typically used
  where requirements can be stated and award will
  be made to the lowest responsive and responsible
  bidder(s)
• Typically used for commodities
• Also used for many services and technologies

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Competitive Bids using IFB

• Lowest Price
• - Basis for Awarding Contracts for
  Commodities
• - Low Bid Meeting Specifications
• - Price May Include Other Costs

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Competitive Bids using RFP

• Request for Proposals (RFP) is used for
  procurements where factors in addition to cost
  are considered and weighted in awarding the
  contract and when the method of award is best
  value
• Mostly used for services and technology
• Used for complex procurements

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Competitive Bids using RFP

• Best Value
• - Basis for Awarding Contracts for Services
  (Including Technology)
• - Optimizes Quality, Cost and Efficiency

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SELECTING THE CORRECT CONTRACT VEHICLE

• Purchase Order
• PA Contract
• Contract Agreement
• AC-340

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PURCHASE ORDER REQUIRING OSC APPROVAL

• One time purchase
• Fully encumbered
• Must include all copies (vendor, OSC, agency)
• All relevant terms on the face or attached
• Appendix A referenced on vendor copy
• Purchase Orders have no dollar limitations
• A Purchase Order is the contract document
  approved by OSC

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PURCHASE ORDER (continued)

• OSC approval not required for OGS centralized
  contract purchases unless otherwise specified by
  contract
• Contract number must be shown in box labeled
  Comptrollers Contract No
• Contract number must be shown on the voucher

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PURCHASE ORDER CHANGE NOTICE

• If the original purchase order was approved by
  OSC, change notice should be accompanied by a
  copy of the original approved purchase order
• Explanation for change
• Encumbrance, if applicable

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PA CONTRACT

• A PA Contract can be used by an agency to
  establish a pricing agreement for commodity and
  printing procurements
• (See OSC Bulletin G-191)

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PA CONTRACT (continued)

• Used for commodity and printing purchases that
  exceed agency prior approval threshold
• Provides agencies with a term contract
  mechanism
• Saves administrative costs
• No Purchase Order approval required once PA
  Contract is approved
• Procurement must follow the normal procurement
  rules (IFB, single/sole source, discretionary
  purchase).

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CRITERIA FOR PA CONTRACTS

• Estimated Quantities
• Term Contract
• Guaranteed Orders require a fully encumbered
  purchase order for the value of the guaranteed
  quantity

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CREATING A PA CONTRACT

• Required Documents
• One Completed PA Data Sheet for each awarded
  vendor
• Three Contract Award Letters
• (This is the contract document for authorized
  agency and OSC signatures.)
• Three Notices of Contract Award
• Must reflect the terms and conditions of
  procurement
• Must include pricing and refer to Appendices

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OSCs ROLE IN PROCESSING PA CONTRACTS

• Assigns the contract a unique number
• Enters the contract on the Central Accounting
  System (CAS) under agency code 01055
• Processes the transaction and enters the assigned
  contract number on each copy of the Contract
  Award Letter
• Retains one original Contract Letter and Award
  and returns remaining copies to the agency

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USING YOUR NEW PA CONTRACT

• Issue Contract Award Letter and Notice of
  Contract Award to the vendor and any other
  agencies authorized to use it
• Issue a Purchase Order referencing the contract
  number in the Comptrollers contract number box
  and also on the voucher

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PA CONTRACT AMENDMENTS

• Required Documents
• One completed PA Data Sheet for each awarded
  vendor
• Three Contract Amendments
• This is the contract document for authorized
  agency and OSC signatures
• Must have written concurrence from the vendor
• Must reflect the terms and conditions of
  procurement
• Documentation supporting any changes must be
  included with the procurement package

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PA CONTRACT ADVANTAGES

• Functions as an agency specific P-Contract
• Purchase Orders issued against PA Contracts do
  not require separate OSC approval
• Standard format for Contract Letter and Notice
  of Contract Award
• May be for a term up to five years

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ADVANTAGES (Continued)

• No prior approval for POs or change notices
• Allows value monitoring for future contracting
  opportunities
• No encumbrance required for contract approval
• Can cover any contracting method - single/sole
  source, competitive bid, discretionary purchase,
  piggybacking agreement, etc.

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CONTRACT AGREEMENTS

• A full or fiscal year encumbrance is required
• An agreement between the State and a vendor must
  be created and executed
• Signed and acknowledged by the vendor, signed by
  agency, AG, and OSC
• Used for service, revenue, construction, etc.

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AMENDMENTS TO CONTRACT AGREEMENTS

• Must be accompanied by a completed and encumbered
  AC340. Action code on an amendment is c.
• If the change is the result of a Contract
  extension, the new end date and the date of
  renewal must also be changed.
• If the contract is being amended or extended, an
  executed contract amendment reflecting the change
  must also be included.

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THE AC340

• Is used when increasing the value of a contract
  (use an ECC batch when the purpose is solely to
  encumber funds)
• To change an address (with additional
  documentation required)
• The AC340 is also used to create a contract based
  on a CM master contract or a CMS single/sole
  source contract. (use your agencys code, not
  that of the host agency)

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Questions?
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