Statewide Historically Underutilized Business Program

Know about the State’s Purchasing Process

Texas Comptroller of Public Accounts

Agenda

• The State’s Procurement Process• Boost Your Business Connections • Marketing to State Entities

Statewide HUB Program’s Mission

The mission of the Statewide HUB Program is to facilitate the use of HUBs in state

procurement, and to effectively provide information on the state's procurement process to minority and woman-owned

businesses.

The State’s Procurement Process

From a Purchaser's View

Purchasing Enabling Legislation

• Texas Government Code, Title 10

– Chapter 403 - Comptroller of Public Accounts

– Chapter 2155 - Purchasing: General Rules and Procedures

– Chapter 2156 - Purchasing Methods

– Chapter 2157 - Purchasing: Purchase of Automated Information Systems

– Chapter 2158 Purchasing: Miscellaneous Provisions for Purchase of Certain Goods and Services

– Chapter 2161 Historically Underutilized Business

The State of Texas Procurement Cycle• Need Defined

• Procurement Method Selected

• Solicitation

• Receipt of Bids

• Evaluation and Award

• Inspection and Acceptance

• Contract Administration

• Payment

• Disposal of Property

Competitive Bidding vs. Negotiation

• Texas Government Code stipulates that agencies purchase or contract for goods and services through competitive bidding whenever possible.

• Negotiation of contracts is permitted for:– Emergency purchaser when there is insufficient

time to solicit bids;

– Proprietary purchases or purchases of items for which there is only one source of supply;

– Purchases by means of competitive sealed proposals; and

– Proposed purchases in circumstances where competitive specifications have been advertised by only one acceptable bid, or no acceptable bids are received; provided, however, such negotiation may not result in a material change to the advertised specifications.

• End user (employee) will identify a need and communicate the need to a purchaser

• A specification is developed

• Best Value Criteria is set

Need Defined

Procurement Method Selected

• Texas Procurement and Support Services (TPASS)

• Department of Information Resources (DIR)

• Mandatory Source Procurement (Set Aside Programs)

• Delegated Authority

Texas Procurement and Support Services

• Term Contracts• Open Market Solicitations• Texas Multiple Award Schedule

(TXMAS)

Term Term Contracts

• Term contracts are established as a supply source for state agencies, institutions of higher education, and cooperative purchasing members.

• Contracts are competitively bid and based on estimated quantities, and upon historical usage data.

• NIGP codes identify goods and services to be contracted.

• State agencies are required to use TPASS Term Contracts.

Open Market Purchases

• TPASS conducts open market Invitation for Bids for commodities over $25,000 that are not available on term contract or TXMAS.

– Example: school buses

• View a list of recent Open Market awards on the Electronic State Business Daily or at: http://www.window.state.tx.us/procurement/reqs/

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Texas Multiple Award Schedule (TXMAS)

• Established in 2002 as an alternative purchasing method utilizing contracts competitively awarded by federal or state entities. TX Gov’t Code §2155.502.

Previously awarded competitive contracts of the federal government and governmental entities of other states.

TXMAS contracts have 17 pages of Terms and Conditions which supplement the GSA contract Terms and Conditions

Potential customers can go to the TXMAS site and search for a variety of products and services.

• State agencies purchased informational technology commodities and services through the Department of Information Resources (DIR), with few exceptions.

• Commodities include commercial software, hardware technology services, including seat management.

• Bid opportunities over $25,000 visit the Electronic State Business Daily http://esbd.cpa.state.tx.us/

• Vendors seeking bid opportunities under $25,000 should visit DIR at www.dir.state.tx.us

Statewide Procurement

Information Technology

Mandatory Source Procurement (Set Aside Programs)

The state is able to purchase from these two

sources through non-competitive basis

• The Texas Council on Purchasing from People with Disabilities (TCPPD) coordinators the state’s use to purchase from persons with disabilities

– Texas Industries for the Blind and Handicapped (TIBH)

• Texas Correctional Industries (TCI)

– A division of the Texas Department of Criminal Justice (TDCJ)

Delegated Authority

The authority to purchase is delegated

to state agencies by the CPA as

allowed by state statutes and CPA

Rules. Agencies are delegated the

authority to purchase:– Commodities up to $25,000– Services up to $100,000

Delegated Authority

Also delegated to state agencies are:• Direct publication purchases;• Perishables (food-related) purchases;• Distributor purchases;• Fuel, oil and grease purchases; and• Emergency purchases.

Solicitation

• Procurement Thresholds • Solicitation Documents• Electronic State Business

Daily (ESBD)

Procurement Thresholds• Non Competitive - up to $5,000

– Solicitations are not required • Informal Solicitations - $5,000.01 to

$25,000– Solicitations may be requested by

phone, fax or email to:1) Minimum of three vendors (two must

be HUBs) and 2) Registered on the Centralized

Master Bidders List (CMBL).

• Formal Solicitations - Over $25,000– Have terms/conditions, – Indicate opening time and place, – Notifications are sent to CMBL vendors,

and– Posted on the Electronic State Business

Daily (ESBD).

Solicitation Documents

• Invitation for Bid (IFB)

• Request for Qualification (RFQ)

• Request for Proposal (RFP)

Solicitation Documents

• Invitation for Bids (IFB)

Generally, this procurement method is used to procure commodities when there are clear specifications and sufficient competition in the marketplace. State agencies are delegated the authority to procure commodity items up to $25,000.

• Request for Proposals (RFP)

Generally used to procure complex commodities and services when competitive sealed bidding and informal competitive bidding are not practical or advantageous to the state. State agencies are delegated the authority to procure services up to $100,000.

What is an RFP?

The RFP is the basis for the resultingcontract and is used to: 1. Invite formal proposals from

prospective vendors and provide them with the requirements that must be met in order for their proposal to be accepted.

2. Explicitly define the responsibilities of both the vendor and the ordering entity.

3. Provide vendors with organized and explicit evaluation criteria that the ordering entity will use to evaluate the proposal.

Statement of Work

• The purpose of the SOW is to provide vendors with a clear, accurate, and complete understanding of the work to be performed.

• One example of a standardize format– Introduction – Scope – Service Requirements

• Agency• Contractor • Subcontractors

– Performance Measures • Sampling • Inspection & Testing Procedures• Delivery Requirements

Proposal Requirements • Due date for Proposals

Respondent shall submit the proposal no later than the date and time indicated in the solicitation. The entity will accurately time stamp the proposal upon receipt.

• Calendar of EventsEvent Date

Pre-Proposal Conference

Deadline for Submitting Questions

Official Response to Questions Posted on the ESBD

Proposal Opening Date and Time

Vendor Discussions

Expected Award of Contract

Proposal Requirements

• Point of Contact

Respondent shall direct all inquiries and communications concerning this RFP to the Point of Contact that is listed. Exceptions:

1. Personnel permitted by the point of contact

2. The individual designated to answer questions regarding

proper submission of the HUB Subcontracting Plan (HSP)

Proposal Requirements

• Pre-Proposal Conference

The pre-proposal conference allows respondents opportunities to ask the entity questions and/or clarify provisions of the RFP. An entity may require mandatory attendance for all respondents.

• Attachments Included with the RFP– Execution of Proposal and

Assurances (with Certification)– HUB Subcontracting Plan– Respondent Information Form– Pricing sheets and any other

attachments

Proposal Requirements

• Evaluation and Award of Contract

The entity shall award a Contract(s) to the respondent(s) whose proposal is considered to be the best value to the state as defined in §2155.074. Gov’t Code.

1 Price, Total Cost of Ownership 40%

2 Compliance with Specifications, Quality, Reliability, Characteristics to meet stated or implied needs

25%

3 Delivery Time Frame 15%

4 Indicators of probable performance under contract

10%

5 Other relevant factors 10%

Total 100

Proposal Requirements

• Submitting the Proposal– The Proposal shall titled “Proposal

Submitted for RFP [#]” and shall clearly state the Proposal Opening Date and Time identified in the Calendar of Events.

– The Proposal may be submitted in the manner identified in the solicitation• U.S Mail• Hand Delivery• Overnight/Express Mail

The RFP Process• Submitting Questions about the RFP

– Respondents will have until the deadline identified in the Calendar of Events to submit all questions in writing to the point of contact

– Questions should include to the highest degree possible, cite the specific RFP section to which the question refers.

– At the discretion of the entity, the answers may be posted in question and answer document posted on the ESBD.

– Only answers provided in writing by that entity shall be considered official

The RFP Process

• Testing and InspectionThe entity may test and inspect goods and services purchased under the Contract to ensure compliance with the specifications of the RFP and contract.

• Accuracy of the ProposalThe Respondent’s Proposal shall be true and correct and shall contain no cause for claim of omission or error. Proposals may be withdrawn in writing at any time prior to the submittal deadline.

• Cost of Submitting the ProposalThe Respondent is responsible for any expense related to the preparation and submission of the Proposal.

The RFP Process

• Public Information Act Disclosures– The State is subject to the Texas Public

Information Act (PIA), Chapter 552, Gov’t Code.

– The Proposal and other information submitted to the CPA by the Respondent are subject to release as public information.

– If it is necessary for the Respondent to include proprietary or otherwise confidential information in its Proposal or other submitted information, the Respondent must clearly label that proprietary or confidential information and identify the specific exception to disclosure in the PIA.

– Finial determination lies with the Office of the Attorney General.

The RFP Process

• Organization of the Proposal– The Proposal shall include all

information required in the RFP and the format described.

– The Respondent shall be as precise, accurate, and succinct as possible.

– The Respondent shall provide detailed descriptions of how they will fulfill each requirement.

The RFP Process

• Organization of the Proposal– Tab 1: The Transmittal Letter

A Transmittal letter identifying the responding company and point of contact.

– Tab 2: Statement of Meeting Requirements

A statement on how the Proposal meets or exceed the requirements of the RFP.

– Tab 3: Mandatory Pricing Sheet

The Completed Pricing Sheet identified within the RFP.

– Tab 4: Assumptions and Exceptions

Clearly state any assumptions that is made in the Proposal. Also, clearly identify any exceptions the Proposal makes to the specific provisions of the RFP.

The RFP ProcessOrganization of the Proposal– Tab 5: Respondent’s Background

The Respondent provides a brief description of its history and accomplishments.

– Tab 6: The Conflict of Interest DisclosureThe Respondent identifies all relationship that might be a conflict of interest or cause an appearance of a conflict of interest.

– Tab 7: Sample Sales ReportThe Respondent is to include a sample sales report to demonstrate its ability to comply with the RFP.

– Tab 8: HUB Subcontracting Plan (HSP)The Respondent will fill out the HSP and submit it with their Proposal in order for the Proposal to be consider responsive.

Addendums

• Should an addition or correctionbecome necessary after a solicitation isissued, the entity will create an addendum relating the necessary information.

• The addendum will be posted on the ESBD.

• Bidders are required to acknowledge the addendum by returning it with the bid or by physically noting the change or addition on the bid.

HUB Subcontracting Plan (HSP)• State agencies and universities must

determine if subcontracting opportunities are probable on solicitations of $100,000 or more

• If subcontracting opportunities are probable, agency will list the probable subcontracting opportunities and require an HSP

• HSPs are required to be submitted at the same time as the response

Completing the HSP

• All respondents (HUBs and Non-HUBs) to the solicitation must complete an HSP if required

• For each subcontracting opportunity not self-performed by the respondent, the respondent is required to provide written notification of the subcontracting opportunity to at least three (3) HUBs and allow the HUBs no less than five (5) working days to respond

• Respondent must provide written notification of their subcontracting opportunities to a minority or women trade organization or development center, at least five (5) working days prior to submitting their bid offer

• For more information on completing the HSP, view the online training module at Texas4Hubs.org

Receipt of Bids

• Important Factors • Informal Bids• Formal Bids• Receiving Proposals

Important Factors

• Timeliness – Late bids will not be considered

• Completeness – Everything indicated in the solicitation

must be included in the response

Informal Bids

• Applies to purchases valued $5,000 to $25,000

• Taken via telephone, in person, via fax, direct mail, or email

• Should be requested from each vendor identified during the solicitation processes

Formal Bids

• Apply to purchases greater than $25,000

• May be received via hand delivery, mail or fax

• Bidders may withdraw bids by written request any time prior to the bid opening date and hour

Receiving Proposals

• Acceptance of proposals shall end on the date and time specified in the RFP

Evaluation and Award

• The Best Value• The Responsive and

Responsible Bidder

The Best Value

• All factors used in determining “best value” purchases must be advertised in the solicitation

The Responsive and Responsible Bidder

• Responsive Bidder– A person who has submitted a bid which

conforms in all substantive respects to the Invitation for Bid including the specifications set forth in the IFB

• Responsible – A person who has the capability, integrity,

and reliability in all respects to perform the contract requirements which will assure good faith performance

Inspection and Acceptance

• Agency Responsibility • TPASS Authority

Agency Responsibility

Delivery does not constitute acceptance.

Agencies will inspect all shipments received

against orders and report to the vendor and

TPASS (if the order was issued by TPASS)

• Damage

– Minor and Severe

– Concealed Damage - If at time of receipt the agency does not detect the damage, the agency must notify the vendor and the carrier in writing via mail, email, or fax within 15 days

• Discrepancies

TPASS Authority –Vendor Relations Program

• May perform periodic, random and/or unannounced inspection of goods and services purchased by the state

• Investigates agency complaints on vendors

Contract Administration • Notice of Award• Back Orders• Substitutions• Loss or Damage in transit/freight• Delivery Time• Cancellation• Authorized relief from performance• Cancellation of contract • Damages for failure to perform• Vendor Performance Program• Debarment

Vendor Performance Tracking System

The purpose of the VendorPerformance Tracking System is to:• Identify vendors that have exceptional

performance. • Aid purchasers in making a best

value determination based on vendor past performance.

• Protect the state from vendors with unethical business practices.

• Provide performance scores in four measurable categories.

• Track vendor performance for delegated and exempt purchases.

Vendor Performance Tracking System

Vendors performance scores rangingfrom 0 to 100% are broken into fourcategories:

1. Commodity delivery 2. Service delivery 3. Commodity performance 4. Service performance

The scoring system begins to actively tally thescore after 10 purchase orders. Scores overtwo years old are not used in calculations.Each purchase order without a complaintprovides a positive score of 100% for thatvendor. Each negative VPF counts as a 0 inthe corresponding category. The scores areaveraged for each category.

Payment

• Vendor Invoices• Method of Payments• Vendor “On Hold”

Vendor Invoices

• To receive payment, vendor must submit an invoice to the state agency receiving the goods or services. The invoice should include, but is not limited to:– The vendor contact information,

including person designated by the vendor to answer questions regarding the invoice

– The state agency’s contact information– Valid Texas Identification Number (TIN)

issued by the CPA– A description of the goods or services– Other relevant information supporting

and explaining the payment requested

Method of Payment

Payments for merchandise purchased

with state appropriated funds will be

made either in the form of a warrant or

electronically (direct deposit) by the

CPA• Payment by Warrant

– Similar to a personal check, includes payee and payer information

• Payment by Direct Deposit– Preferred method of payment– Transmitted directly from CPA to the

vendor’s financial institution

Disposal of Property

The State of Texas is charged todispose property in the appropriatemanner

Questions

Boost Your Business Connections

Electronic State Business Daily(ESBD)

• State agencies are required to advertise solicitations over $25,000 on the ESBD

• Posting Requirements- 14 days - When all solicitation

documents are available on the ESBD

- 21 days – When all solicitation documents are not available on

the ESBD (i.e. Blue Prints, Project Manuals, etc.)

• Search for bid opportunities or awards by – agency, requisition number, NIGP

code or by keyword

ESBD Can be search by Newest postings and NIGP Class and Item Number

Regardless of the search option chosen this is how the results will list.

This is the solicitation profile

Centralized Master Bidders List (CMBL)

Why Register?

– The CMBL is an automated registration system used by state agencies. Once a state entity has determine the need to solicit vendors for commodities or services they will develop a mailing list from the CMBL to distribute notifications of bid opportunities.

– Used by other purchasing entities (public & private) as well as prime contractors.

Note: The CMBL is not an approved vendors list.

Centralized Master Bidders List (CMBL)

96 vendors found where class code (1) is '620', item code (1) is '79' or 'all', district flag (1) is '14' or 'all' sorted by name. (Inactive vendors listed in italics)

57 vendors found where class code (1) is '620', item code (1) is '79' or 'all', district flag (1) is '14' or 'all' sorted by name. (Inactive vendors listed in italics)

Centralized Master Bidders List (CMBL)

How to Register!

• Annual registration/renewal fee is $70.00 and may be paid on-line by credit/debit card or check debit (US addresses only).

• The profile may be printed after entered online and mailed with a check or money order (US dollars). Mailed applications incur a longer processing time.

Q&A

Marketing to State Entities

Agenda

• Research – Internal – The State

• The Pitch – In Person– Print Communication

• Track Your Outreach and Marketing Efforts

• How to Download the HUB Coordinators Contact List

Research – Internal

• Step 1

Take a honest look at your business

and clearly identify what your

business provide.

• Step 2

What are some alterative uses for the

product or service you provide.

Research – The State

• Step 1– Read the Vendor Guide

• Step 2– Search the HUB Report

Vendor Guide

The Comptroller’s Vendor Guide is

available online and helps vendors better

understand the state of Texas

purchasing process.

The HUB Report

• Provides Semi and Annual Report of the expenditures of State Agencies and Universities

• Assist to identify entities to target marketing efforts

• Identify Potential Allies/Partners

Texas4Hubs.org

• On the left hand side is a hyper link for HUB Reporting

On the right side is a hyperlink for the latest HUB Report. For this demonstration we will look at the FY 2008 semi-annual report

The Executive Summary of the Report provides a wealth of information on the state’s expenditures

The first chart provides the Statewide Total Expenditures for FY 2006 - 2008

The Executive Summary of the Report provides a wealth of information on the state’s expenditures

This is the list of the state’s four digit Object code that the state uses to make payment. Note: These are not Class and Item Codes. For the demonstration we will chose 7256 Architectural/Engineering Services.

Note: These are not Class and Item Codes

The Pitch• Be Confident

– Establish yourself as an authority in your area

• Be Clear– What are you able to provide

• Be Concise – In one sentence, what do you

provide? • Be Compelling

– What are some “Attention Getter” words within your industry that you are able to provide?

• Ex: Industry- Janitorial

“Attention Getter” Green Products – Are there alterative uses

The Pitch – In Person

• You are a successful business 1st and HUB Vendor 2nd

• Build a rapport with the entity’s contact

• Have a Game Plan – What are your main points about

your company

– What do you really want to know from that representative

The Pitch - Print Communication

• Business Card– Include an indicator of what your

business provide – Include an email address

• Email– Focus on one topic– What action do you want them to

take?– Is it error free?

• Mailings

Track Your Outreach and Marketing Efforts

Agency Name

Contract or

Spot Purchases

Important Dates, e.g. contract expiration

The State HUB Coordinators

• The HUB Coordinator is the HUB vendor’s door into doing business with a state agency or university

This page will provide general description of an HUB Coordinator. Below the first paragraph is a hyperlink titled “HUB Coordinator List”

This will provide a list of state agencies and universities

Their profile will indicate the contact information for several positions, including Agency Head.

If you scroll down you will find the HUB Contacts

To download the complete HUB Coordinator list, Choose the hyperlink “Click here for download versions

Choose the file hubcords.dat

From you browser choose save as.

Save the document as an Text File

Open an next excel document and open the file you save. Ensure you look in all files.

For step 1 of 3 of the Text Import Wizard simply choose next

For step 2 of 3, select the comma field under delimiter and then choose finish

This will provide a complete database of the HUB Coordinators and other contacts.

State of Texas Cooperative Purchasing Program

• CO-OP Program Overview• CO-OP Membership Eligibility• Marketing to CO-OP members• Accessing and Using the CO-OP

Member Lists

The State of Texas CO-OP Goal

To assist our over 1700 members in making the most of their purchasing dollars by using

the State of Texas volume buying power.

State of Texas CO-OP History

• The CPA Cooperative Purchasing Program was created in response to legislation in 1979.

• Local Government Code 271.081-083 Section 271.083 (4)(b) states: “A local government that purchases

an item under a state contract satisfies any state law requiring local governments to seek competitive bids for the purchase of the item.”

CO-OP Membership Eligibility

• Cities• Counties• School Districts• Community Colleges• Political Subdivisions (water districts,

utility districts, etc.)• MHMR Community Centers• Assistance Organizations

Marketing to CO-OP Members

Suggested marketing tactics:• Let CO-OP members know if you

have a current state contract• Sort the list for your sales area to

conduct follow-up calls• Send mailers or postcard

promotions• Email new product/service

information• Do NOT overload e-mail boxes

with promotions

Accessing and Using CO-OP Member Lists

• View CO-OP member contact information on-line at: http://www.cpa.state.tx.us/procurement/prog/coop/coopmemb/

• Search members by name or entity type

• Excel and text files can be downloaded to use for mailing lists and email campaigns.

You can view an Alphabetical List or download the complete list.

This is a list of Municipalities in Alpha

This is an CO-OP contact profile, with Agency #, Contact, Address, Phone #, Fax #, Email, Travel Eligible, and Expiration Date

Questions