Purchasing 101 Montana State University

1
Purchasing 101 Montana State University
October 30, 2003
2
Introduction

• Agenda
• Purchasing Department
• Purchasing Overview
• Procurement Delegation Authority
• Purchasing Procedures lt 25,000
• Formal Purchasing Procedures
• Policy Updates
• Lessons Learned
• Wrap Ups

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Purchasing Department

• Staff
• Mary Routhier, Director
• Sharon Ditterline, Administrative Officer
• Karen McGuire, Administrative Support
• Kelly Doolittle, Student Worker
• Location Montana Hall, Room 104
• Business hours
• Monday Friday
• 830 1200 and 100 430
• Primary Phone [phone]
• Fax [phone]

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Purchasing Department

• Responsibilities
• Perform all purchasing functions for MSU
• Planning and Developing Purchasing Strategies
• Issue Formal Solicitations (IFBs and RFPs)
• Negotiations
• Prepare and award of Contracts
• Post- Award Contract Administration
• Director is MSUs exclusive Contracts Officer

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Purchasing Overview
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Introduction
Needs Identified
Purchase Order or Contract
Products and Services
BPA Processed Vendor Paid
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Introduction

• Supplies and Services paid for with Public Funds
  
• Taxpayer Dollars
• Restricted Unrestricted Funds
• Government establishes Laws and Regulations
• Purchasing Procedures
• Responsible for compliance

8
What is a Contract

• An oral or written agreement between two parties
  of sound mind, where an offer was made and
  accepted, consideration was exchanged and is
  legally binding.
• Common contracts issued by MSU
• Departmental Purchase Orders
• Purchase Orders
• Contracted Service Agreements
• Purchasing Agreements
• Contracts resulting from RFPs

9
Funding
Whose money are we are spending?
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Rules Governing Purchasing
State of Montana Montana Code Annotated Montana
Procurement Act
Department of Admin State Procurement Bureau
Administrative Rules of Montana
Montana State University
Purchasing Policy and Procedures
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Purchases exempt from Montana Procurement Act

• Title 18, Chapter 4, MCA
• See page 11 of handout

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Montana State University - Procurement Policy
Procedures

• Policy approved May 2003
• Available electronically at our web page
• click on Policies and Procedures
• click on Purchasing Procedures Manual
• http//www2.montana.edu/policy/purchasing/

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Procurement Delegation Agreement
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PURCHASING BOULEVARD
Purchases Over 250,000
Purchases Over 25,000

Purchases 25,000 or less
ControlledItems
Handled by State Procurement Bureau
Handled byPurchasingDepartment
Delegatedto Depts.
Primarily handled byPurchasingDepartment
Certain Exclusions apply
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Delegation Agreement

• Dept. of Administration responsible for
  procurement of all supplies and services for
  State of Montana
• Procurement Delegation Agreement between State
  Procurement Bureau and MSU
• Effective October 2003 September 2005
• State Procurement Bureau delegated purchasing
  authority to MSU-Bozeman Purchasing Department

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Delegation Agreement

• Purchasing Department Authority
• Authorized to procure Non-Controlled supplies
  and services with Total Contract Value up to
  250,000
• Authorized to purchase the following regardless
  of TCV
• Food
• Bus Transportation
• Animals
• Agricultural items
• Information Technology Resources per MCA 2-17-516
• Authorized to further delegate purchasing
  authority to departments and satellite campuses

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Delegation Agreement

• Further delegations
• Authorized to procure Non-Controlled supplies
  and services with Total Contract Value up to
  25,000
• All MSU Departments
• MSU Great Falls College of Technology
• MSU Northern
• Certain exclusions apply
• Mandatory Training
• Department representatives are required to attend
  a minimum of one Purchasing class per year to
  retain current delegation

NEW
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Delegation Agreement

• Further delegations
• Authorized to procure Non-Controlled supplies
  and services with Total Contract Value up to
  50,000
• MSU Billings
• MSU Bozeman
• Information Technology Center
• Office of Facilities Services
• Auxiliary Services
• Certain exclusions apply
• Mandatory Training

NEW
NEW
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Delegation Agreement Information Technology

• Departments are authorized to buy within their
  delegated purchasing authority lt 25,000
• Special approvals needed PRIOR to purchase
• Purchases gt 500
• ITC approval required on DPES form
• Purchases over 50,000
• OCHE approval required
• Purchases impacting States network
• ITSD approval required
• Strongly recommend letting ITC handle the
  procurement
• DPES not required
• Contact ITC Computer Stores prior to purchase
• Refer to pages 36 38 of handout

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Delegation Agreement- Controlled Items
Supplies and Services identified by the State as
commonly used items which, when consolidated for
purchasing purposes, result in discounted prices
due to large volumes

• Delegation Agreement defines how MSU-Bozeman will
  purchase the following Controlled Items
• Central Stores Program
• Printing Services
• Cooperative Purchasing Agreements
• Statewide Term Contracts
• Requisition Time Schedule (RTS) Items

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Delegation Agreement- Controlled Items

• Departments are delegated purchasing authority
  for purchases up to 25,000 for
• Office Supplies
• Your Department may buy office supplies from the
  Central Stores Program or other sources
• Printing Projects
• Your Department may buy printing services from
• University Printing
• Print and Mail Services Bureau
• Submit Purchase Requisition to MSU-PD
• Any other source
• Departments must buy Standard Printed Envelopes
  from
• University Printing or
• Exclusive State Term Contract 169-04C
  http//www.discoveringmontana.com/doa/gsd/content/
  Resources/TCForms/TC169-04-C.pdf

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Delegation Agreement- Controlled Items

• Departments are delegated purchasing authority
  for purchases up to 25,000 for
• Cooperative Purchasing
• Your Department may participate
  inter-governmental agreements for research
  purposes without prior approval
• State Term Contracts
• Your Department may buy supplies and services
  from State Term Contracts regardless of TCV
• Non-Exclusive
• Exclusive
• Exclusive with optional use

NEW
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Delegation Agreement- Controlled Items

• Exclusive State Term Contracts
• State mandates that we must buy supplies and
  services from the vendor(s) identified on
  Exclusive Term Contracts
• Departments will be held financially liable for
  all fees resulting from violation of the contract
  
• Exceptions
• Some Exclusive contracts provide MSU optional
  use
• MSU has the option of ordering from vendors
  identified on the contract or from other sources
• Dell Personal Computers (WSCA)
• Hewlett Packard Personal Computers
• IBM Personal Computers Intel-Class Servers
• Laser Printers
• Microsoft Software License and Products
• Temporary Services

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Delegation Agreement- Controlled Items

• Requisition Time Schedule (RTS) Items
• New Vehicles
• MSU is not authorized to buy New Vehicles
• State holds a Vehicle Call
• February and September each year
• Departments send Purchase Requisition to
  MSU-Bozeman Purchasing Department
• We submit Requisitions to State Procurement
  Bureau
• They bundle the requirements for all State
  Agencies and issue formal solicitations
• Benefits obtain better prices

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Delegation Agreement - Department
Responsibilities

• Understand and comply with your purchasing
  authority
• Understand and comply with MSUs Purchasing
  Policy
• Perform Contract Administration
• Pre-Award
• Obtain Bids or Sole Source approval
• Award DPOs or CSAs
• Maintain documentation in a Contract File
• Post-Award
• Accept goods and services
• Process BPAs for payment

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Unauthorized Purchases/Ratifications

• Unauthorized Purchases
• Purchases that are not compliant with purchasing
  regulations, policies, and procedures.
• Contract Ratifications
• Ratification means transforming an unauthorized
  purchase into a legally binding contract
• The Director of Purchasing is the ratifying
  official
• Seeks approval to ratify from the Controller
• Upon approval, the Director of Purchasing
  ratifies the unauthorized purchase
• Copies of the approval are sent to the VP
• Refer to sections 420 and 430 of Purchasing
  Procedures and Policy

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Dont hang out there by yourself!
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Delegation Authority

• KEY CONCEPT
• Total Contract Value

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Purchasing Buzz Word- Total Contract Value -

• TCV is defined as the initial contract period,
  plus renewals
• Options to buy additional quantities
• Options to obtain additional services
• Options to extend contract term
• Calculating TCV
• Estimate the value of the initial purchase
• Estimate the value of all options that will be
  included in the contract
• Add both together for TCV

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Total Contract Value - Example

• You are buying Consulting Services
• The contract is for 2 years
• The contract includes an option to extend the
  contract for one additional year
• Cost of Initial Contract Term is 25,000
• Cost of Option to extend term is 5,000
• Is your Department authorized to issue the
  Contracted Services Agreement?

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Total Contract Value (contd)
Answer NO
Initial Contract Term (Year 1 Year
2) 25,000 Option to extend contract term (Year
3) 5,000 Estimated Total Contract Value
30,000
Send Requisition to the Purchasing Department
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Total Contract Value (contd)

• Example
• You are buying an IT Server including a 2-year
  maintenance agreement with an option to extend
  the maintenance agreement for the 3rd year
• Initial purchase
• Server 22,000
• 2 year maintenance 3,000
• Option to extend maintenance
• Additional 1 year 1,000

Is your Department authorized to issue the
contract?
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Total Contract Value (contd)
Answer NO
Initial Contract (Server 2 yr
maintenance) 25,000 Option to extend maintenance
(Year 3 ) 1,000 Estimated Total Contract
Value 26,000 What other approvals do you
need?
Send Requisition to the Purchasing Department
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Total Contract Value (contd)

• EXAMPLE - Your department issued a contract to
  buy equipment and a 2 year maintenance plan for
  25,000.
• The contract does not include any options
• You want to extend the maintenance for another
  year
• The estimated TCV of the original contract was
  25,000
• Initial Contract (Server 2 yr maintenance)
  25,000
• How do you buy one additional year of
  maintenance?

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Total Contract Value (contd)

• Initial Contract (Server 2 yr
  maintenance) 25,000
• Cost to extend maintenance (Year 3 ) 1,000
• REVISED Total Contract Value
  26,000
• You have a two alternatives
• Prepare a contract modification and obtain
  signature from Purchasing and Legal Counsel
• TCV of modified contract exceeds 25,000
• Above your purchasing authority
• Issue a new maintenance agreement
• TCV of new maintenance agreement is 1,000 and
  within your departments delegated purchasing
  authority

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Purchasing Tools

• Small Purchases
• Includes Purchasing Card
• Limited Solicitation
• Invitation for Bid
• Request for Proposal
• Emergency Procedures
• Term Contracts
• Pre-Qualification of Vendors
• Cooperative Purchasing Agreements

EVERYTHING DEPENDS ON TOTAL CONTRACT VALUE
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Sinking in the sea of Purchasing Regulations ?????
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Departmental Purchasing Procedures

• How to make purchases within your purchasing
  authority?

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Purchasing Methods

• Small Purchases
• Total Contract Value up to 5,000
• Limited Solicitations
• Total Contract Value between over 5,000 up to
  and including 25,000
• Total Contract Value gt 25,000
• Competitive Sealed Bids (IFB)
• Competitive Sealed Proposals (RFP)

As TCV increases - purchasing process is more
structured
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Purchasing Basics lt 25,000
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Purchasing Basics

• Basic questions to ask yourself
• What is the estimated cost of the supply or
  service?
• Estimate Total Contract Value
• Is this supply or service exempt from purchasing
  procedures?
• Is my Department authorized to buy this?
• Is this a controlled item?
• Is my Department authorized to buy this
  controlled item?
• What type funds will be used to pay for the
  purchase? GC, State Funds, MSU Foundation
• Does competition exist or is this a sole source
  procurement? See pages 4-10
  of handout

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Small Purchase Procedures TCV up to 5,000
JUST DO IT

• No preferred purchasing method
• Competitive procedures not required
• Department has maximum flexibility
• Supplies
• Recommend using Procurement Card
• improves efficiencies and MSU earns a rebate
• Issuing a DPO next best alternative
• Services
• Recommend issuing CSA
• CSA mandatory when using GC funds and TCV gt
  1,000
• Benefits of written contract
• Legally Binding
• Defines scope of work or items purchased
• Identifies price, delivery date, quote , TCs
• Defines MSUs liabilities and protects MSU from
  unbound liabilities

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Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Competitive Procedures Mandatory
• All state contracts for supplies and services
  must be awarded by a source selection method per
  Montana Procurement Act
• Obtain a minimum of 3 quotes, if available
• Procurement Methods
• Obtain oral quotes (phone bids)
• Complete PD-20 Tabulation of Bids Resulting from
  Limited Solicitation Procedure (page 28)
• Obtain written quotes (fax and E-mail acceptable)
• Must use PD-46 to obtain written quotes

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Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Written solicitation (PD-46)
• Lets review page 19 of handout
• To prepare solicitation
• Describe supply or service being sought
• Example computer equipment or consulting
  services
• Identify the purpose/use
• What must the equipment do
• Identify the specifications or statement of work
• Identify the deliverable
• Identify any special requirements
• Warranty, training, installation, service,
  maintenance, parts
• Identify the delivery date and bid due date

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Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Open the bids at the prescribed date/time
• Review the bids
• Identify the lowest bidder
• Ensure the bid is responsive
• Meets all requirements of solicitation
• Award to lowest responsive bid
• Prepare Bid Tabulation (PD-20) page 28
• Submit PD-20 with BPA
• Lets review page 28 of handout

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Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Issue written contract
• Supplies
• Issue a Departmental Purchase Order
• Any deviations from MSUs Standard Terms and
  Conditions must be approved by Leslie Taylor, MSU
  Legal Counsel, prior to contract award
• See page 29 of handout
• Services
• Issue a Contracted Services Agreement (CSA)
• Any deviations from the CSA (PD-46) must be
  approved by Leslie Taylor, MSU Legal Counsel,
  prior to contract award
• DO NOT use Procurement Card

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Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Award on other than lowest bid
• Issue written solicitation (PD-47)
• Lets review page 23 of handout
• Prepare solicitation
• Describe supply or service being sought
• Example computer equipment or consulting
  services
• Identify the purpose/use
• What must the equipment do
• Identify the specifications or statement of work
• Identify the deliverable
• Identify any special requirements
• Warranty, training, installation, service,
  maintenance, parts
• Identify the delivery date and bid due date
• Define Evaluation Criteria

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Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Prior to issuing the solicitation
• Should solicitation to Purchasing for review
• Open the bids at the prescribed date/time
• Evaluate the bids based on evaluation criteria
• Identify the highest scoring offeror
• Ensure the bid is responsive
• Meets all requirements of solicitation
• Award to highest scoring bid
• Prepare Evaluation Memorandum
• Submit memo with BPA
• Example - Montana PBS (KUSM)

49
Limited Solicitation Procedures TCV gt 5,000 -
25,000

• Issue written contract
• Supplies
• Issue a Departmental Purchase Order
• Any deviations from MSUs Standard Terms and
  Conditions must be approved by Leslie Taylor, MSU
  Legal Counsel, prior to contract award
• Services
• Issue a Contracted Services Agreement (CSA)
• Any deviations from the CSA (PD-46) must be
  approved by Leslie Taylor, MSU Legal Counsel,
  prior to contract award
• DO NOT use Procurement Card

50
Limited Solicitation Procedures TCV gt 5,000 -
25,000

• What if you estimate TCV under 25,000 and all
  quotes come in above 25,000?
• DO NOT award a contract
• Contact Purchasing Department
• We may provide a ONE-TIME Delegation
• or
• Advise you to submit a Purchase Requisition
• Well issue a formal solicitation

51
Limited Solicitation Procedures TCV gt 5,000 -
25,000

• EXCEPTIONS
• May be exempt from competitive procedures per
  Administrative Rules of Montana
• See page 11 of handout
• Meets criteria for Sole Source

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Sole Source

• Criteria for Sole Source Procurements
• the compatibility of current services or
  equipment, accessories, or replacement parts is
  the paramount consideration
• there is no existent equivalent product
  or
• only one source is acceptable or suitable for
  the supply or service item.

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Sole Source

• Purchases of 25,000 or less
• Departments must maintain records for sole source
  procurements
• Submit SSJ (PD-14) with BPA
• Purchases over 25,000
• Submit SSJ with Purchase Requisition
• Approved by Purchasing Director and
  ControllerLets turn to page 39 of handout

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Sole Source Exemptions

• Professional licenses
• Dues to associations
• Renewal of software license agreements or
• Purchase or renewal of maintenance agreements for
  software or hardware
• Purchases from Sheltered Workshops
• Subscriptions, publications, and textbooks only
  available from a single supplier, i.e., published
  videos, movies, recordings, and serial
  subscriptions for periodicals and journals
• Purchasing of specific brand name items for
  resale to the public.
• Subcontractors associated with specific research
  grant programs, if the subcontractors are
  specifically named therein.
• Advertising placed in publications or on radio,
  television, or other electronic means.
  Development, design, and distribution of
  advertising is not included in this exception.
• License Agreements for electronic publications
  including licensed library materials, journals
  (scientific, technical or medical) journal
  articles, periodicals, and course packs.

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Contracted Services Proper Procedures

• Determine Estimated Total Contract Value (TCV)
• If TCV less than 25,000, your department is
  authorized tohandle the procurement
• Determine if competition exists
• Issue written solicitation (PD-46 or PD-47)
• Include CSA Template (PD-49) in solicitation
• Obtain bids from minimum of 3 vendors
• Review bids and determine lowest responsive
  bidder
• Obtain signature from vendor
• Obtain signatures from MSU Administration and
  award contract
• Lets turn to pages 65-66 of handout
• Sole source procedures
• Prepare Sole Source Justification
• Obtain quote from vendor and signature on PD-49
• Obtain signatures from MSU Administration and
  award contract

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Contracted Services Proper Procedures

• See Purchasing Policy
• Section 820
• Appendix W procedures
• Appendix X Independent Contractor Checklist
• Appendix Y Contract Template
• Appendix Z CSA Routing Slip for contract
  signature
• DO NOT rely on Business Procedures Manual
• Section 490.00 490.70
• Information is obsolete

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Do you ever think maybe I should just lay back
and let the Purchasing Department handle this...
58
Purchasing Methods

• Small Purchases
• Total Contract Value up to 5,000
• Limited Solicitations
• Total Contract Value between over 5,000 up to
  and including 25,000

• Total Contract Value gt 25,000
• Competitive Sealed Bids (IFB)
• Competitive Sealed Proposals (RFP)

As TCV increases - purchasing process is more
structured
59
Formal Sealed BiddingTCV gt 25,000

• Prepare Purchase Requisition (PR)
• Submit to Purchasing Department

60
Could be less stressful for ya!
61
Purchasing Basics Pre-Award Process gt 25,000
62
Purchase Requisitions

• Presented by Karen McGuire

63
Requisition Process

• Prepare Purchase Requisition (PR) - PD-1
• Prepare proper documentation
• Specifications
• Provide required delivery date F.O.B. point
• Vendors list
• Data Processing Equipment Software (DPES)
• Brand Name Justification (PD-24)
• Property Trade-In (PAMS 3)
• Sole Source Justification (PD-14)
• Obtain Proper Signatures
• Typed name and title
• Signature by GC or appropriate VP

64
Requisition Process

• How do you properly fill one out?
• Lets look at a Requisition

65

• Purchase Requisition received
• Enter into Banner
• Enter into Requisition Log

66
Requisition Process

• Purchase Requisition Received
• Review for proper attachments and signatures
• Enter into Banner
• Enter into Requisition Log
• Determine procurement method
• Competitive Procedures
• Invitation for Bid (IFB)
• Request for Proposal (RFP)
• Sole Source Procurement
• Process Requisition
• Prepare and issue contract

67
Writing good specifications

• Describe supply or service being sought
• Example computer equipment or consulting
  services
• Identify the purpose/use
• Identify the performance requirements
• What must the equipment do
• Identify the design specifications
• Describe the equipment or service
• May have combo of both performance and design
• Identify minimum requirements
• Allows for competitive bids
• Identify special requirements
• Warranty, training, installation, service, parts

68
Writing good specifications

• Identify the Delivery Date, Location
• Describe receiving procedures
• Such as testing, sampling, or other to determine
  if delivered product is acceptable to us
• Beware of Hazards
• Who wrote the specifications
• Did they come from a vendor
• When were they last updated
• Are the specifications too narrow
• Do they limit competition
• Samples

69
Invitation for Bid (IFB)

• A formal, written solicitation that completely
  describes
• Specifications or Statement of Work
• Boilerplate Terms and Conditions
• Special Terms and conditions
• Delivery Date, Training and Installation,
  Acceptance Criteria
• Award Information
• Routinely used to purchase supplies and services
• Allow 2-3 weeks for submittal of bids
• Award made to the lowest responsive and
  responsible bidder
• Responsive - meets all specifications, terms
  and conditions
• Responsible vendor who has capability to fully
  perform contract and has integrity and
  reliability that ensure good faith performance
• Goal is to issue contract within 2-3 days after
  bid opening
• Subject to Protest

70
BID TABULATION PROCESS

• All bids are in now what?

12
2

• Bids opened daily
• Public/Vendors may attend
• Department Reps welcome

3
9
6
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BID TABULATION PROCESS

• Purchasing Department prepares Bid Tabulation
• see handout - Page 50
• Sends to Department for approval
• Department reviews bid tabulation and bid
  submitted by lowest bidder
• Will provide copies of bids upon request
• Ensure lowest bidder is responsive to the IFB
• Document PD-8 and return to Purchasing
• see handout Page 51
• Return via fax, campus mail or E-mail

YES Accept lowest bidder
NO Reject lowest bidder
72
PURCHASE ORDERS
Presented by Karen McGuire
73
Receiving and Inspecting Goods
74
Does the shipment belong to your department?

• If not, dont sign!

75
Inspection Process

• Correct number of cartons, packages, etc.
• Damage, real and suspected.
• If there appears to be damage
• Note damage on the shipping receipt (bill of
  lading).
• Notify carrier that you want a damage
  inspection.

76
Payment Process

• Departments submit Banner Payment Authorization
  to Controllers Office
• BPA will be reviewed by
• Purchasing
• Grants Contracts
• Accounts Payable

77
PO0000747 P
CS040013 F
78
Payment Process

• BPAs may contain errors or shortfalls
• May result in a Correction Notice
• Lets turn to page 60 in handout

79
Just wanted to see if you are still awake -))
Just think we do This for a living!
80
Request for Proposal

• Formal procurement process
• A written solicitation that completely describes
• Statement of Need
• A written description of your needs
• Needs may not be crystal clear
• May be seeking a technical solution
• Award is based on stated evaluation criteria
• Proposals may be modified
• Subject to Protest

81
Policy Changes
82
Revised Forms

• Contracted Services Agreement (CSA) Template
• Form PD-49
• Page 64 of handout
• Contracted Services Agreement Modification
  Template
• Form PD-94
• Page 66 of handout
• Independent Contractor Checklist
• Form PD-52
• Changes in Paragraphs 1g, 1i and 2
• Tabulation of Bids Resulting from Limited
  Solicitation Procedure
• Form PD-20
• Page 28 of handout
• Product Demonstration Template - Form PD-55
• Request for Proposal Template - Form PD-81
• Sole Source Justification - Form PD-14
• numerous other forms see
• http//www.montana.edu/wwwbu/purchasing/purchform
  s.html

83
Montana State University - Procurement Policy
Procedures

• Legal Counsel
• Revised Signature Authority
• Legal Counsel signature required on all purchases
  over 25,000
• BPAs
• Grants Contracts recently eliminated a GC copy
  of BPAs and PARIS reports
• GC still requires additional copies for
• Superfund index numbers include salmon colored
  original and full copy
• Green Stamp BPAs include a copy of the BPA cover
  page only

84
Montana State University - Procurement Policy
Procedures

• Emergency Procurements
• Updated procedures
• Revised form
• Refer to pages 61-62 of handout
• Refer to section 660 of Policy
• Appendix K Instructions

85
Lessons Learned
86
Common Mistakes to Avoid

• Contracted Services Agreements
• Contractors performing work without verification
  of proper insurance
• Commercial General Liability
• Workers Compensation
• Performance may not begin until the contract is
  properly signed and awarded
• GC gt 1,000 (GC funded)
• Purchasing Director gt 25,000
• Legal Counsel gt 25,000
• Vice President gt 25,000 (other than GC funds)

NEW
87
Common Mistakes to Avoid

• Contracted Services Agreements
• Contractors continue to deliver supplies or
  perform services on EXPIRED contracts
• Evidenced by BPAs
• Must modify contract
• Notify Purchasing Department 30 days prior to
  expiration of contract
• Purchasing Department will issue a CSA
  modification OR
• Department issues CSA modification (PD-94) if TCV
  remains below or equal to 25,000

88
Common Mistakes to Avoid

• Product Demonstrations
• Send letter to vendor prior to receipt and
  acceptance of equipment
• PD-55 Product Demonstration Template
• Do not deviate from terms and conditions in
  letter
• Vendor is responsible for all costs associated
  with demonstration
• On-Line Auctions
• Department may use on-line auctions as a source
  for a bid
• Still required to obtain 2 bids/quotes from other
  sources
• Still must award to lowest, responsive bidder

89
Common Mistakes to Avoid

• Purchase Requisitions
• Proper Signatures not on form
• DPES not provided
• Sole Source Justification not provided
• PAMS-3 not provided
• BPAs
• Tabulation of Bids (PD-20) not provided
• DPES not provided
• Sole Source Justification not provided

90
Purchasing Policy and Procedures

• Pending MSU Policy
• Signature Authority
• All official documents must be signed by
  appropriate personnel
• Deans, Directors, Dept. Heads, Vice Presidents
• Substitute or alternate signatures not allowed
  unless appropriate personnel have delegated their
  authority
• Written delegations on file in Controllers
  Office
• Stamps with signatures not accepted

91
Hot Tips

• PLANNING
• Contact Purchasing Department to discuss
  your pending requirements
• We can guide you towards the best purchasing
  strategy to fulfill your needs
• Plan ahead provide realistic delivery dates
• MARKET RESEARCH
• REQUEST FOR PROPOSAL
• Contact PD to discuss the RFP process such
  as evaluation committee, evaluation
  criteria, schedule, etc

92
Summary

• YOU ARE OUR CUSTOMER
• We are here to serve you
• Understand your delegation authority
• Understand purchasing procedures
• Remember - were spending taxpayer
• Please complete the evaluation forms

93
THANK YOU FOR COMING
PURCHASING 101 GRADUATE October
2003
94
BACK-UP Slides
95
Delegation Agreement- Controlled Items

• RECAP
• MSU-Bozeman NOT authorized to buy New Vehicles
• MSU-Bozeman NOT authorized to buy supplies and
  services from Cooperative Agreements without
  prior approval from the State Procurement Bureau
• Excludes Inter-Governmental Agreements
  established for research purposes
• MSU MUST buy supplies and services from the
  vendor(s) identified on EXCLUSIVE Term Contract
• Unless MSU identified as optional use
• MSU Departments NOT authorized to buy
  photocopiers
• MSU Departments NOT authorized to buy standard
  printed envelopes from any source other than
  University Printing or the Exclusive Term Contract

96
Requisition Process

• If Purchase Requisition is incomplete
• PD will issue a Correction Notice (PD-6)
• Requisition on hold until completed
• See page 60 of handout

97
Contracts Officer

• MSU-Bozeman Contracts Officer
• Mary Routhier, Director of Purchasing
• Authorized to enter into legally binding
  contracts for MSU
• Authorized to administer contracts
• Authorized to terminate contracts
• Authorized to further delegate purchasing
  authority

98
Post Award Administration
Supply or Service
Issue Contract
Supply
YES
Acceptable?
Acceptable?
Process BPA
YES
NO
NO
Sign Receipt and process BPA
99
Request for Proposal

• Cover Page, Instructions, Table of Contents,
  Offerors RFP Checklist, Schedule of Events
• Section 1 Project Overview and Instructions
• Section 2 Standard Information
• Section 3 Scope of Project
• Section 4 Offeror Qualifications
• Section 5 Cost Proposal
• Section 6 Evaluation Criteria
• Appendix A Standard Terms and Conditions
• Appendix B Standard Contract

100
Request for Proposal (contd)

• Award based on factors other than lowest price
• Common evaluation factors
• Company Qualifications
• Technical Capability
• Past Performance
• Demonstrated experience of similar type effort
• Management Experience
• Enhanced Capabilities

101
Request for Proposal (contd)

• THINGS TO REMEMBER
• RFPs are used for complex purchases over 25,000
• RFP process is time consuming
• Can take up to 90 days for entire process
• Typically allow 30 days for proposal submittal
• Expensive for vendors to prepare proposals
• An Evaluation Committee evaluates the proposals
• Purchasing Director oversees the Evaluation
  Committee and guides them through the process
• Purchasing Director is sole point of contact
  between MSU and vendors during RFP process
• Negotiations are common
• Lead by Purchasing Director