Basic Purchasing Policies and ProceduresRutgers Educational Forum

April 30, 2014

ANNA MARIE WRIGHT, QPACAMDEN COUNTY PURCHASING AGENT

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PROCUEMENT LAWS

Laws to Regulate the Procurement of Goods and Services.

LOCAL PUBLIC CONTRACTS LAW N.J.S.A. 40A:11-1 ET SEQ.

PUBLIC SCHOOLS CONTRACTS LAW N.J.S.A. 18A:18A-1 ET SEQ.

COUNTY COLLEGE CONTRACTS LAW N.J.S.A 18A:64A-25.1 ET SEQ.

ADMINISTRATIVE CODE N.J.A.C. 5:34-1 ET SEQ.

ITEMS COVERED UNDER THE VARIOUS LAWS

BID THRESHOLD QUOTE THRESHOLD DURATION OF CONTRACTS TYPES OF PROCUREMENT COOPERATIVES MANDATORY BID ITEMS SPECIFICATIONS AWARD OF CONTRACTS AGGREGATION REJECTION OF BIDS DISQUALIFICATION OF BIDDERS

VARIOUS LAWS

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TYPES OF PROCUREMENT

Quote◦ Goods and Services◦ Does not have to be advertised◦ Can be negotiated

Bid◦ Goods and Services◦ Advertised 10 days in official

newspaper◦ Cannot be negotiated (unless tie

bid)

Emergency ◦ must address public health, safety

and welfare◦ Try to obtain quotes if possible

TYPES OF PROCUREMENT

Competitive Contracting Request for Proposals◦ Hybrid of a bid and RFP◦ Advertised 20 days in official

newspaper◦ Cannot be negotiated

Cooperative pricing, joint purchasing, regional cooperative and commodity resale contracts◦ Bid with a larger group of entities◦ Advertised 10 days in the

newspaper◦ Cannot be negotiated (unless tie

bid)

KEY PROVISIONS OF THE LAW

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EXCEPTIONS 40A:11-5

Professional Services 40A:11-5(1) (a)(i)◦ Examples – lawyer, architect,

engineer

Extraordinary Unspecifiable Services (EUS) 40A:11-5(1)(a)(ii)◦ Construed narrowly in favor of open

competitive bidding◦ Local Finance Notice 2002-2

Insurance 40A:11-5(1)(m)◦ Purchase of insurance coverage

and consultant

EXCEPTIONS 40A:11-5

Other listed exceptions included but are not limited to.

◦ Publishing of legal notices 40A:11-5(1)(j).

◦ The acquisition of artifacts or items of unique intrinsic, articistic or historical character 40A:11-5(1)(k).

◦ Those goods and services necessary or required to prepare and conduct an election 40A:11-5(1)(l).

◦ Library and educational goods and services 40A:11-5(1)(q).

◦ Proprietary computer hardware and software 40A:11-5(1)(dd).

KEY PROVISIONS OF THE LAW

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BID LIMIT/QUOTE THRESHOLD 40A:11-3

Bid limit is $36,000 with a Qualified Purchasing Agent

Bid limit is $17,500 without a Qualified Purchasing Agent

Quotes - 15% of the Bid limit

Two (2) quotes are required

DURATION OF CONTRACTS 40A:11-15

Two years – is standard unless the agency desires a shorter term.

Term may be for a longer duration as permitted in N.J.S.A. 40:A11-15

Extensions are permitted by one (1) two year or two (2) one year terms using the index rate established by the DCA at the time of the extension.

Professional services no more than twelve (12) months.

Competitive Contracts up to five years. (40A:11-4.2)

KEY PROVISIONS OF THE LAW

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COOPERATIVE PURCHASING N.J.A.C. 5:34-7.3

Cooperative Pricing ◦ Lead agency advertises for

bids; awards a master contract with vendor for its owns needs and bid prices extend to co-op members; co-op member will issue own contract directly with vendor.

Joint Purchasing◦ Lead agency does the

purchasing for members and certifies funding for themselves and members.

◦ COOPERATIVE PURCHASING N.J.A.C. 5:34-7.3

Cooperative Commodity Resale System◦ Lead agency procures

commodity and resells this to Cooperative members.

◦ e.g. gasoline, diesel fuel, road salt

Regional Cooperative Pricing◦ Two or more registered

Cooperative Pricing Systems and their participating units.

◦ For Energy - Electricity, Natural Gas

KEY PROVISIONS OF THE LAW

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◦ COOPERATIVE PURCHASING

State Cooperative Purchasing Program◦ 40A:11-12◦ State contract must be extend

to you in order to use.◦ Quote from Vendor must be

verified.◦ PO must have contract number

and NJCP1.

National Cooperatives◦ Local Finance Notice 2012-10

◦ COOPERATIVE PURCHASING

Advantages and Disadvantages◦ Convenient◦ Flexible◦ Time Saving◦ Are there real financial

savings?

KEY PROVISIONS OF THE LAW

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◦ EMERGENCY CONTRACTS 40A:11-6

Must affect public health, safety and welfare and requires immediate deliver of goods or performance or services.

Must designate who can declare emergency within organization.

◦ Should be the Official in charge.

◦ When unavailable or incapacitated a designee will act on behalf of Official in charge.

◦ EMERGENCY CONTRACTS 40A:11-6

◦ Must notify purchasing agent or person of authority.

◦ SHOULD develop protocol in advance and have a written policy and procedure.

◦ SHOULD try to obtain quotes if possible.

◦ Failure to plan is NOT an Emergency!

KEY PROVISIONS OF THE LAW

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MANDATORY BID REQUIREMENTS MUST BE SUBMITTED WITH BID

40A:11-23.2

A guarantee (Bid Bond) - optional◦ Required when bid exceeds

$100,000 for “construction” .

A certificate from a surety company (performance bond) optional.◦ Required when bid exceeds

$100,000 for “construction”.

A statement of Corporate Ownership. (N.J.S.A. 52:25-24.2)

MANDATORY BID REQUIREMENTS MUST BE SUBMITTED WITH BID

40A:11-23.2

A listing of “specialty trade” subcontractors pursuant to N.J.S.A. 40A:11-16.

Acknowledgment of receipt of addenda.

Any document stated to be required by the agency.

KEY PROVISIONS OF THE LAW

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SPECIFICATIONS 40A:11-13

A specification is a statement of a set of requirements to be satisfied by a product, material or a process.

Any specification shall be drafted to encourage free, open and competitive bidding.

Specification shall require the furnishing of any “brand name” but may in all cases require “brand name or equivalent”.

SPECIFICATIONS 40A:11-13

A good specification shall:◦ Identify minimum requirements.◦ Allow for competitive bidding.◦ List reproducible test methods to

be used for compliance.◦ Provide for an equitable award.

Well written specifications are essential◦ No loopholes for vendors .◦ But need to be fair to the vendors.◦ Capable of being met by several vendors.◦ Must be clear as to bid will be awarded. ◦ Simple but exact.

KEY PROVISIONS OF THE LAW

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ADVERTISEMENT 40A:11-23

Bid – goods and services -minimum 10 days.

Bid – Solid Waste – min. 60 days.

Competitive Contracting – min. 20 days. N.J.S.A. 40A:11-4.5

. Must include ◦ Bidders are required to

comply with the requirements of N.J.S.A. 10:5-31 et seq. and N.J.A.C. 17:27-1 et seq.

ADVERTISEMENT 40A:11-23

Must include

◦ Bidders are required to comply with the requirements of P.L. 1999, c. 238, (N.J.S.A. 34:11-56 et seq.) where applicable.

◦ Entities name and address.

◦ Bid Opening Date and Location.

◦ Bid number and description.

◦ Package Pick up Location.

◦ Pre-Bid information (if applicable).

KEY PROVISIONS OF THE LAW

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INVITATION TO BID

 Notice is hereby given that sealed bids for Bid #    will be received, opened and read in public at the Camden County Division of Purchasing, Courthouse - 17th

Floor, 520 Market Street, Camden, New Jersey 08102 on , at prevailing time by the Camden County Purchasing Agent or his designee.

  Copies of the bid documents may be obtained at the Camden County Division of Purchasing during regular

business hours. Copies of the bid documents may be obtained at the Camden County Division of Purchasing during regular business hours. Proposers can register to download all documents from the Camden County website: http://www.camdencounty.com/government/offices-departments/division-purchasing

 All bidders are strongly urged to attend a non-mandatory pre-bid conference to be held at  on at prevailing time.

Proposers are required to comply with the requirements of P.L. 1975, c.127 (N.J.A.C. 17:27) and N.J.S.A. 10:5-31 et seq. and to comply with the requirements of P.L. 1999, c.238, (N.J.S.A. 34:11-56.25 et seq.) where applicable.

  All bidders are responsible for obtaining complete bid documentation from the County at the address listed

above. In the event of any inconsistencies between this advertisement, as published, and the bid documentation, the bid documentation shall control.

  By order of the Board of Chosen Freeholders of Camden County, New Jersey.    Anna Marie Wright, Camden County Purchasing Agent

SAMPLEINVITATION TO BID

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OUTSIDE THE LOCAL PUBLIC CONTRACTS LAW

Pay To Play N.J.S.A. 19:44A-20.4 et seq.

Affirmative Action NJ.S.A. 10:5-31 et seq.: N.J.A.C. 17:27

Statement of Corporate Ownership N.J.S.A. 52:25.24.2

Non Collusion N.J.S.A. 52:34.15

Business Registration Act N.J.S.A. 52:32.44

OUTSIDE THE LOCAL PUBLIC CONTRACTS LAW

Disclosure of Investment Activities in Iran. Public Law 2012, c. 25

Prevailing Wage N.J.S.A. 34:11-56.25 et seq.

Public Works Contractor Registration Act N.J.S.A. 34:11-56.48 et seq.

Certification regarding debarment◦ Required for federally funded

projects.

KEY PROVISIONS OF THE LAW

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Purchasing Policies

To provide guidance and clarify purchasing procedures.

Defines Purchasing’s Roles and Responsibilities.

Defines the responsibilities of the using Departments.

Purchasing Policies

Outline management's Commitment to Ethical Behavior.

Know when to Buy◦ Right Quality, Right

Quantity, Right Time, Right Place, Right Source, Right Manner

PURCHASING POLICIES

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Purchasing Policies Challenges

Purchasing managers must participate in the formulation of the policies involving purchasing issues.

Must clearly define what is expected of the using department.

Cannot operate in a vacuum.

Purchasing Policies Challenges

Purchasing professional must protect a public entity’s assets against the danger of loss or misuse.

They must ensure all procurement and financial transactions are properly authorized.

Policies should be adopted by the governing body.

PURCHASING POLICIES

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Purchasing Policies Challenges

Integrity, honesty and ethics are essential traits of a purchaser, as the money we spend is not our own.

Public purchasing officials must perform their job with sound business shrewdness and abide by statutory requirements.

Purchasing Policies Challenges

Purchasing Officials must manage all phases of the purchasing operation.

Reduce or eliminate rush orders.

Discourage favoritism and increase competition.

Have knowledge of buying trends and technology.

PURCHASING POLICIES

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PURCHASING FORMS

Purchasing Manual

Advertisement

Requisition

Voucher

Purchase Orders

Emergency Purchase Form

Quotation Form

PURCHASING FORMS

Bid Boilerplate/Template

Bid Award Sheet

OPRA Request

Fixed Assets Form

Resolution/Ordinance

PURCHASING FORMS

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PURCHASING MANUAL

Establishes and describes internal procedures.

Written for use by all personnel in the Purchasing Department and employees that perform the purchasing functions.

Manual should describe all of the steps of the purchasing function.

PURCHASING MANUAL

Needs to address conflict of interest and ethical issues.

Needs to address the following.◦ Requisitions◦ Purchase orders◦ Required Signatures◦ Resolution or ordinance request◦ Guidance on bidding documents◦ Award of contracts◦ Record retention◦ Accounts payable procedures

PURCHASING FORMS

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QUOTE FORM

Should have a sample solicitation of quotation record form for all using departments.

Should have all quotes in writing.

Quotes can be negotiated.

QUOTATION NUMBER: QUOTATION MUST BE RETURNED NO LATER

THAN: _ _

PRICES MUST INCLUDE DELIVERIES TO THE INSTITUTIONS.  

Quotations must be made on these sheets; no other form will be accepted.

  Camden County is exempt from any/all sales

taxes.    The County of Camden reserves the right to

accept or reject any part or parts thereof.   Delivery to be made not later than

It is understood that prices include containers, except where specified.

  SUBMITTED

BY_________________________

Phone Number/Fax: _________________________

PURCHASING FORMS

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REQUISITION

◦ All required signatures

◦ Internal vendor number

◦ Business Registration Number

◦ Account number

REQUISITION

◦ Description of goods or services

◦ Quotes attached

◦ State Contract number

PURCHASING FORMS

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PURCHASING FORMREQUSITIONS

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PURCHASE ORDERS

Purchase orders are normally accompanied by terms and conditions which form the contractual agreement.

The vendor delivers the product or service and delivery is recorded.

PURCHASE ORDERS

An invoice is sent by the vendor which is cross-checked with the purchase order and documents specifying the goods have been received.

Invoice and voucher are submitted for payment.

PURCHASING FORMS

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CAMDEN COUNTY DEPARTMENT OF PURCHASING  

 ADJUSTMENTS TO PURCHASE ORDERS INCREASE/DECREASE/CANCEL OR OTHER CHANGES   This form must be submitted in duplicate with a copy of original purchase order attached.   Department requesting the adjustment: _______________________________________   Purchase Order Number: __________________ Buyer listed on P.O. ______________   Account number(s) Purchase Order is charged to: _______________________________   Check one: Increase ___ Decrease ___ Cancellation ___ Other ___     Original PO amount: ______________________________________________________   Amount of increase/decrease:_______________________________________________   Total Dollar Amount of PO after Increase or Decrease: ___________________________   Reason for Increase/Decrease/Cancellation or Change: ___________________________    **PLEASE NOTE: Cancelled PO’s will not be printed…Attach this returned copy to your department

copy for future reference.    

PURCHASING FORMSCHANGE ORDERS

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◦ BIDDING PROCESS

Process should outline the steps needed to be taken by the using department to start the procurement process.

◦ Requisition to start the process.

◦ Memo regarding cost estimate.

◦ Sufficient funds for project.

◦ Specifications or Scope of Work to be bid.

BIDDING PROCESS

Bidding Timeline.

Review of Bids Received with an award recommendation.

Bid Award – by resolution or ordinance.

PURCHASING FORMS

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BID TITLE AND NO. _______________________________________________________Camden County Purchasing

17TH Floor, Courthouse, Camden BID RETURN DATE: _______________________________________________________

  ARCHITECT / SPEC WRITE: _______________________________________________ BID AWARD

SHEET   TABULATION

PURCHASING FORMSAMPLE BID SUMMARYSHEET

 BIDDERS

BID BOND

CONSENT OF SURETY

AFFIRM ACTION

NON-COLLUSION

OWNER CH. 33

DEBARMENT

            BID TOTAL

                             

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A sound purchasing policy and procedure will help facilitate timely purchases and eliminate costly expenditures.

Always look for support from your administration and governing body.

Reach out to your purchasing peers for support and guidance.

CONCLUSION