Purchasing 101
Introduction to the Anywhere ISD Purchasing Processes
Janet Powell, Director of WFISD Support Services
jpowell@wfisd.net
235-1018
The Foundation and Structure
Why we do what we do…
The Governmental Requirements
• The Law
• Texas Education Code 44.031 through 44.047
• Purchasing Contracts – 44.031
• All purchases made over $50,000 must follow one of the defined purchasing
methods
• What criteria can be used to determine an award (“Best Value”)
• Public advertisement in a local newspaper
• Definition of and procedure for making an emergency purchase
• Criminal Penalties – 44.032
• Construction Services – 44.035 through .041
The Governmental Requirements (cont.)
• District Policy
• CH (Legal)
• Based directly on governing statutes
• CH (Local) – Purchasing Acquisition
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Purchasing Authority
Competitive Procurement Requirements
Interlocal Agreements
Vendor’s List
Bids and Proposals under $10,000
Information Technology Purchases under $25,000
Employee Conflict of Interest
The District Requirements
• Financial Information Resource Manual (FIRM)
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Purchasing Requirements
Purchasing Organization
How to make a District Purchase
Sole Source Procurements
Personal, Consulting and Professional Services
Purchase Requisition Preparation
Purchase Order Receiving
Purchasing with a Purchasing Card
The District Requirements (cont.)
• Financial Information Resource Manual (FIRM)
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Vendor Selection
Purchasing Ethics
Purchasing Contracts
Available at: http://www.your_isd_website.net
Historical Perspective for Round Rock ISD
• In 2007 – 2008:
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The RRISD spent over $62 million dollars in purchase orders
The Purchasing Office issued over 9,400 purchase orders
There were a total of 32,351 procurement card transactions
The District spent $4 million in procurement card transactions
The Purchasing Office awarded 108 contracts worth over $100
million
• Distribution received 16,328 warehouse requisitions worth
$1.7 million
• Print Services made 50 million impressions, and over 48
million impressions were made on convenience copiers
• Text Books managed $15 million of text books
Purchasing Ethics
• Responsibility to the tax payer to use the District
funds appropriately
• Develop good relationships with suppliers and
encouraging competition while avoiding an
appearance of favoritism or misconduct
• Employees are not to circumvent laws, policies, and
procedures, or make liberal interpretations
• Not make intentional sequential or component
purchases to circumvent requirements
• Failure to follow State laws and District policy will
render the purchase non-compliant
Purchasing Ethics (cont.)
• Receipt of gifts, kickbacks or gratuities are not
acceptable and may lead to disciplinary actions if
necessary
• Opened acknowledgement of conflicts of interest
• Failure to follow requirements may have criminal
penalties
Remember:
Do the Newspaper Test for all purchases
The Organization
What we look like…
The Purchasing Office’s Role
District-wide Perspective
Board of Trustees
Superintendent
Deputy Superintendent
of Instruction
Chief Financial Officer
Director of Business /
Budget Services
Purchasing Department
The Purchasing Office’s Role (cont.)
Purchasing Department
Director of Business /
Budget Services
Director of Purchasing
Assistant Director of
Purchasing
-Purchasing Process
(Buyers, Purchasing
Specialist)
Assistant Director of
Purchasing
Programs
-Purchasing Programs
(Pcard Administration,
Travel, Fixed Assets,
Surplus Property)
Manager Distribution
-Mail Services
-Warehouse
-Distribution
Text Book
Coordinator
-Text Books
-Instructional Media
-Records Retention
Manager – Print
Services
-Print Services
-Convenience Copiers
-Media Lab
Authority and Aggregation
• Centralized Buying Authority
• The Purchasing Office has been tasked with overseeing all
purchasing activity in the District and has been delegated
down to the individual campuses and departments
• The District is recognized as a whole, not as individual
entities
• Purchases by all campuses and departments are aggregated
together for a particular category to determine the annual
expenditure
• The annual expenditure will determine which purchasing
method is to be used
Aggregation Example
Aggregation of all purchases
30 Elementary
Schools
9 Middle
Schools
4 High Schools
Administration
Example: If each campus purchases 10 of the same
book worth $25, the District as a whole has spent
$10,750.
Contracts, Agreements and Funds
• Contracts / agreements can only be signed by the
Superintendent or Chief Financial Officer
• Signature from any other non-delegated District employee will
render the agreement void
• By signing an agreement on behalf of the District may create
on obligation on the individual to pay
• Types of Funds that must follow Purchasing
Requirements:
• General Fund
• All Activity Funds
• Federal Funds (must be more restrictive than federal
guidelines)
District’s Electronic Procurement System
• eROC
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Online registration for suppliers
Electronic (email) notification of bid opportunities
Electronic bidding
Electronic tabulation of bid responses
Information and Login at:
http://schools.roundrockisd.org/purchasing/login.htm
Purchasing Flow
From start to finish – and what to do…
RRISD Purchasing Process Flow
Established Resources
No bidding necessary…
Process 1: Warehouse
Process 1
Is the item /
available through
the RRISD
Warehouse?
• Overview
• Many items are available through the Warehouse:
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Bond Paper
Industrial Papers
Furniture
Fixtures
Maintenance Supplies
Housekeeping Supplies
• Review inventory choices through District Software
• Warehouse inventory is considered an asset of the District
and should be used first
Process 2: District Contracts
Process 2
Is the item /
service available
through a RRISD
Contract?
• Overview
• The Purchasing Office administers approximately
150 contracts
• Both goods and services contracted
• Majority are term contracts with multiple extension years
• The end user locates the contract information, showing
items or service to be procured, the awarded vendor, and
the contract price
Process 3: Interlocal Contracts
Process 3
Is the item /
service available
through Interlocal
Contract?
• Overview
• All interlocal contracts and purchases are handled through
the District Purchasing Office
• Purchasing Office will determine if the interlocal will be in
the best interest of the District
• An attempt should be made to get best pricing available
Process 4: Sole Source
Process 4
Is the item /
service only
available through
sole source?
• Overview
• Defined by TEC 44.03(d), District Policies CH(Legal)
• For a product or service to be considered sole source, it must
be available from only one source, and meet one of the
following descriptions:
• an item for which competition is precluded due to the existence of a
patent, copyright, secret process, or monopoly
• a film, manuscript, or book
• a utility service, including electricity, gas, or water, or
• a captive replacement part or component for equipment
• Only goods/services that meet the definition are acceptable
• If over $10,000, letter of justification from department head
required.
Process 5: Purchases under
$1,000
Process 5
Is the item /
service less than
$1,000?
• Overview
• Normally includes “spot” or one time purchase
items
• Procedure
• Check the cumulating list of vendors based on dollar
amount for current year to determine level of process
(available in the future)
• No attempt at competition is required
• The end user is encouraged to secure competition through
quotes
Process 6: Purchases Over
$1,000 to $5,000
• Overview
Process 6
Is the item /
service more
than $1,000 but
less than
$5,000?
• For larger, one time purchases
• Procedure
• The end user is encouraged to secure competition
through quotes from a minimum of three (3)
vendors, with a preferable inclusion of eROC suppliers
• If quotes are secured, all documentation concerning choice
of vendor is to be retained by the end user
The Quotation Level
Competition necessary…
Process 7: Purchases Over
$5,000 to $10,000
Process 7
• Overview
Is the item /
service more
than $5,000 but
less than
$10,000?
• Larger purchases that may include numerous
purchases over time
• Limited Term Contracts
• Procedure
• A minimum of 3 suppliers must be contacted – additional may
be added if necessary
• All quote documents (e.g. quotes, supporting spec sheets,
etc.) concerning award to be retained by the end user and
provided to their assigned buyer for the Purchasing file
• End user must request a quote number from the Purchasing
Office for inclusion with the purchaser requisition
Process 7: Purchases Over
$5,000 to $10,000 (cont.)
Process 7
Is the item /
service more
than $5,000 but
less than
$10,000?
RRISD Quote
Summary
Form
http://www.roundrockisd.org/docs/rrisd_quote_summary_020109.xls
Formal Solicitation Thresholds
Sealed Competition necessary…
Process 8: Purchases Over
$10,000 to $25,000
• Overview
Process 8
Is the item /
service more
than $10,000
but less than
$25,000?
• Used for term contracts or large one time delivery
contracts
• Requires competitive sealed bid process
• May use best value if determine necessary
• Can be done quickly (within a day or two) or over a longer
period of time (e.g. week)
• Procedure
• Campus / Department determines need and provides
required information (specifications, scope, quantity, etc.)
• Purchasing Office to release, open and award
Process 9: Purchases Over
$25,000
Process 9
Is the item /
service more
than $25,000?
• Overview
• Includes term contracts, large one time delivery,
highly complex purchases, construction contracts, etc.
• Requires competitive sealed bid / proposal process
• Use of best value required
• Average 60 to 90 days (longer for complex procurements)
• Procedure
• Campus / Department determines need and provides
required information (specifications, scope, quantity, etc.)
• Purchasing Office to release, open and award
Purchasing Methods
The Choices of Solicitations…
Purchasing Methods
• Request for Quotes – “RFQ”
• Can be used in Processes 3, 5, 6, and 7
• Informal process – does not require sealed bids
• Request for Bids – “RFB”
• Can be used in Processes 8 and 9 – restricted to the
Purchasing Office only
• Formal solicitation process (sealed bids)
• Request for Proposals – “RFP”
• Only Process 9 – restricted to the Purchasing Office only
• Usually an elaborate eval. process with use of scoring criteria
• Allows for negotiations as to final terms, pricing, etc.
Purchasing Methods (cont.)
• Request for Competitive Sealed Proposals – “RFCSP”
• Only for Process 9 – restricted to the Purchasing Office only
• Usually an elaborate eval process with use of scoring criteria
• Allows for negotiations as to final terms, pricing, etc.
• Request for Qualifications – “RFQ”
• Only for Process 9 – restricted to the Purchasing Office only
• Used for professional services only
• Request for Information – “RFI”
• No associated process since no purchase is made
• Used for investigation or research
• Helps in the development of specs or requirements
Formal Solicitation Flow
A partnership with the End User and Purchasing…
Competitive Bidding Process - Formal
Solicitation
Development
Purchasing Process
Contract Period
Publish in Local
Newspaper
Contract Begins
Pre-bid Conference if
needed
Contract Ends
Approx. 60-90 days
Need is Determined
Develop Supplier List
(eROC)
Develop Specifications
Determine Award
Criteria
Solicitation Document
Finalized
Release of the
Solicitation
Opening / Closing
Evaluation Process
Award of Contract
Restart process if
needed
Specifications /
Scope of Service
The backbone of the solicitation…
Writing a Specification / Scope of Service
• Specifications for Goods
• Rely on the experts – good chance it’s not Purchasing – it’s you
• Rely on available resources – do research
• Be specific in what it is you need, not necessarily what you
want – minimum requirements are the best place to start
• Be cognizant of competition – don’t be exclusive
• Write specs so that you can verify what you received is what
you need
• Specs left out of a solicitation cannot be used as a disqualifier
for others
• Don’t over / under do the spec
Writing a Specification / Scope of Service
• Services
• All solicitations that include a service need to have some
level of scope of work included in the specifications
• A scope is normally a performance based procedure
• The scope develops the focus of the objective and should
include all necessary points of work to be performed
• If the scope does not include a specific step, you may not be
able to require the vendor to perform the step
• If a schedule or certain limitations to access of the area to be
worked in, the solicitation needs to address these thoroughly
• If the scope is large in scale, it may require performance
based measures
District Contracts
Established Resources…
Contracts
• Active Contracts Listing
• A list of all the current contracts maintained by the Purchasing
Office can be found at:
http://www.roundrockisd.org/index.aspx?page=2457
• Once an item or service is under contract with a specific
vendor, the District is to use the contracted vendor only
• Only the items or services awarded to a particular
supplier can be purchased through a contract
• Line Item Awards
• This describes a contract that was awarded on a line by line
basis with a set price to a specific vendor
Contracts (cont.)
• Catalog Contracts
• This describes a contract that may include multiple awarded
vendors
• Vendor may provide a discount for purchases from a published
catalog
• Usually will include all items within the vendor’s catalog with
some exceptions
• Prices subject to be changed based on changes / updates in
the catalog
Contracts (cont.)
• “M” Contracts
• “M” stands for multiple
• Unique contracts that do not “close” until later in the fiscal
year so that suppliers can submit a response when ready
• Awards made upon completion of an evaluation
• Examples of “M” Contracts
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Classroom Instructional Materials
Retail General Merchandise
Retail Food Service Providers and Catering
Fundraisers
Extracurricular / Enrichment Programs
Special Events Services and Products
Vendor Relations
Developing the Partnership…
Vendor Relations
Communications
End User
Buyer
Vendor
• Solicitations
• Major Contract Issues
Vendor Relations
• The District is in a partnership with the vendor
community and both should perform their duties
with professionalism and integrity and should
maintain and perform based on any contractual
agreement between both parties
• All performance related issues – good or bad should be documented for future reference at
http://www.roundrockisd.org/index.aspx?page=3364
• Vendors deserve a right to know how they are doing
- convey performance issues as they arise and
communicate approperately
Tools to Purchase With
How to get it…
Procurement Cards – “Pcard”
• Not considered a purchasing process - only a payment
method for convenience
• Dollar limits are established based on position controls
and will not be increased
• All purchases made with a Pcard must follow all
applicable purchasing procedures
• For contract purchases, the card holder is to notate
within the Pcard purchase sign-off in a comment box the
contract number for future reference
• Complete information on the use of the Pcard:
http://www.roundrockisd.org/index.aspx?page=1526
Purchase Requisitions
• The submission of a purchase requisition is not the
start of the purchasing process, but the completion
of it – it should not be created after the item or
service has been received
• Quote / Contract Number must be included in
Comment Line
• Documentation to support quotes over $5,000 must
be provided to the Purchasing Office before req can
be approved
• Reqs must be submitted by deadlines indicated in
the FIRM to be considered
Purchase Requisitions (cont.)
Quote / Contract Number in Comment Line
Enter contract
information
here
Follow-up to Purchase
Finishing off the Process…
Receiving Purchased Items
• Always notate on the shipping receipt if any external
damage is found on the outside of the container
• Verify that what was called for in the purchase order is
what was received
• Check specifications within the PO / contract to ensure
what was received meets the requirements
• Notify the supplier immediately if any damage is found
• Review the invoice for contract price, discounts if
applicable, freight if allowed, etc., before sign off
Receiving when Services are being
performed
• Be familiar with what the scope of service requires
the vendor to perform
• Verify that all aspects of the scope are performed
before signing off on the work
• When an invoice is received, review all aspects
(contract price, discounts if applicable, freight if
allowed, etc.) before sign off
• Update software or paperwork upon completion of
the order for payment processing
Questions?