Taking the Puzzle Out of
Procurement
or
How To Do Business With
Procurement and
Materials Management
We will cover ...
• Introduction - Who We Are
• Where to Find Purchasing
Information
• Purchasing Lead Times
• Delegated Purchasing Tools
• Purchasing Ethics
We will Cover...
• Explanation of the Competitive
Procurement Process
• Sole Source Procurement
• Procurement using Federal funds
• Minority, Small and
Disadvantaged Vendor Programs
We Will Cover
• Procurement File Documentation
• Receiving and Shipping
Procedures
• Contract Administration
• Disposal of Surplus Property
Procurement and
Materials Management
Blair Blankinship
Director of Procurement and Materials
Management
Toni Wallington
Assistant Director
Nancy Wright
Contract Specialist
Lisa Edwards
Property Control
Dee McGhin
Purchasing Card
Administrator and
Purchasing Assistant
Wally Humphrey
Receiving Specialist
Code of Ethics
• Give Vendors Equal Consideration
• Strive to obtain the maximum value
for each dollar of expenditure
• Do Not Accept Gifts or Gratuities such
as
– Tickets to sporting or entertainment
events, golf outings, expensive after hours
dinners
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Code Of Ethics
(Continued)
• Avoid Appearance of Conflict of
Interest
– Do not place orders with relatives or
firms with whom you have some
ownership or relationship
• Conduct business with potential and
current suppliers in an atmosphere of
good faith, devoid of intentional
misrepresentation.
Procurement
Administrative Lead Time
• Purchases using the UM
Purchasing Card
• Transaction under $5,000
handled in Procurement
• Greater than $5,000 Less
than $100,000
• Greater than $100,000
Page 3
•Same Day
•3 days
•10 to 14 days
•Milestone
Plan
MISSION
In support of the University’s mission of excellence in education, research,
outreach and collaborative partnerships with the greater community, the
Department of Procurement and Materials Management will:

Establish and administer contracts effectively.

Procure goods and services for best value.

Delegate procurement authority using the Purchasing Card program to
promote efficiency.

Provide materials management services, including central receiving,
physical distribution, and property control functions that add value for campus
customers.

Coordinate the State’s self insurance program and provide risk management
services.
•Support the State of Maryland Minority Business Enterprise program and the
Federal Small and Disadvantaged Business Programs.
•
Participate in campus sponsored community outreach.
•
Ensure University business is conducted in a fair and open environment, in
full compliance with applicable laws and regulations.
Where to Find
Purchasing Information
• Procurement & Supply Home Page
– www.ubalt.edu/procurement
DELEGATED
PROCUREMENT
• The Purchasing Card Program
– Allows authorized cardholders to
make purchases up to $5,000.
– Monthly purchase limit based on
your needs.
Page 7
Purchasing Card
• Simple to Use, Saves Paperwork
• Place order immediately - no waiting
• No Cost for Card
• Vendors Paid within 3 Days
• Major Cost Avoidance for the University
Purchasing Card
• Not for Travel or Restaurants
– Travel Card is available (60% rolled
out) www.dbs.umd.edu/travel
• Cards Must NOT be shared
• Issued in Individual’s Name
• Graduate/Research Assistants can
get cards
Page 8
P-Card Safeguards
• Issued only to Employees Authorized
by Department Head
• Cardholders Sign Agreement
• Cardholders Trained
• Employee Keeps Log of Transactions
and Reconciles with Monthly Visa
Statement
Purchasing Card Abuse
• Man who abused county credit
card must repay $27,000, serve
probation
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Ex-supervisor also gets two weekends in jail
By Andrea F. Siegel
Sun Staff - Originally published February 22, 2001
The former Anne Arundel County warehouse supervisor who used a county-issued
credit card to buy himself dozens of items that ranged from a "Star Wars" pinball
machine to Raisinettes was ordered yesterday to repay the county nearly $27,000,
spend two weekends in jail and five years on supervised probation.
The judge was unsympathetic to Middleton's assertion of financial difficulties…she
said. Chiding him for betraying the public's trust, Judge Davis-Loomis asked, "How
closely does an employer have to monitor an employee whom they trust?"
The maximum punishment for a felony theft scheme, to which Middleton pleaded
guilty last month, is 15 years in prison and a $1,000 fine. However, he has no
criminal record, and his sentence was within state guidelines of probation to six
months.
Copyright © 2001, The Baltimore Sun
How To Get Purchasing
Cards?
• Submit Cardholder Agreements
and information form to
Procurement. (see
http://www.ubalt.edu/procurement/pcard.htm)
• Cardholders Attend Cardholder
Training to get Card (Allow 2 wks)
Simplified Acquisition
and
Formal Procurement
Priority of Procurement
Sources
• Share Equipment or Buy Used
• UB In-House Services
• State Use Industries
• Blind Industries & Services of MD
• Maryland Sheltered Workshops
• Master Contracts
• Small & Minority Vendors
Classification by Size
• $5,000 and under Micro Procurement
– Delegated to Campus
• $5,001 - $100,000 - Simplified
Acquisition
– Handled by Procurement and Supply
• Over $100,000 - Formal Procurement
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Simplified Acquisition
• $5,001 to $100,000
• Handled by Procurement
– Issue purchase order with 14 days
• Simplified refers to the more
streamlined process the Buyer in
Procurement will use to execute these
transactions
Requisition for Purchase
•
•
Create an electronic Requisition
in PeopleSoft
Three step approval process
1. Amount Approval in Department
2. Chartfield Approval in Finance
3. Budget Check by Requestor
Requisition Must Have
• Complete information
– who, what, where, when, why
• Sufficient time for process
– Give a realistic date for delivery - not
ASAP
Request For Quotation
• Typically, Procurement will send a
Request For Quotation (RFQ) to
several suppliers.
• If your requirement is a Sole
Source, provide a written
Justification for Sole Source
Formal Procurement
• Greater than $100,000
• Handled by Procurement and
Supply
• Customer will assist in the
development of a milestone plan
• Requires more teamwork between
Procurement and customer
Milestone Plan and
Source Selection Plan
• Milestone Plan
– Documentation of action items,
person responsible and due date
• Source Selection Plan
– Method we will use to select a
contractor
Page 11
Milestones in the RFP
Process
• Requestor Develops Scope of Work
• Procurement Develops Source
Selection Plan
• Joint Development of RFP Document
• Release of RFP to Vendors & Published
in Maryland Contract Weekly
• Determinations
MBE Subcontract Goal
• Procurement and Supply will
establish a Minority Business
Enterprise subcontract goal for
each procurement over $100,000.
• Goal is determined for each
procurement based on the
availability of MBE contractors in
that market and the nature of the
requirement.
The Solicitation
• Request For Proposals (RFP)
– Best Value
• Invitation For Bids (IFB)
– Low Bid
• Sole Source
– Limited circumstances with
adequate justification
– Still need a formal proposal from
contractor
Page 13
Publication of the
Requirement
• Maryland Contract Weekly
• e-Maryland M@rketplace
• Others as necessary
– Length of time before due date is
now flexible
Pre-solicitation
conference
• Prospective contractors may ask
questions about the work to be
preformed or about the
procurement process.
• May also include a visit to the site
where the work will be performed.
Evaluation of Offers
• Based only on criteria stated in
the solicitation
– IFB - low price the meets the
specifications
– RFP - best value with separate
evaluation of technical proposal and
price
Page 14
RFP Evaluation
• Evaluation committee reviews
proposals
• identifies areas that need
clarification
• May have oral presentation or
demonstration if provided for in
RFP
RFP Evaluation
• Committee writes narrative
summary of proposal strengths
and weaknesses
• Consensus evaluation
RFP Evaluation
• After technical evaluation has
been completed review summary
of price proposals from
Procurement.
• Determine final ranking and
justify best value decision.
• Break
Sole Source Procurement
• Customer makes request and
justification.
• Procurement without competition
is authorized under limited
conditions and subject to written
justification documenting the
conditions that preclude the use
of a competitive process.
Page 16
Sole Source
Determination
•
•
•
•
Procurement reviews justification.
Performs independent research.
Writes Sole Source Determination
Approved by Director of
Procurement
Sole Source Contract
• Procurement issues Sole Source
RFP
– greater than $100,000
• get formal proposal from
contractor
• contractor reviews and signs our
terms, conditions, affidavits and
certifications
Sole Source Contract
• Procurement and Supply
determines price reasonableness
• Procurement and Supply
determines contractor
responsibility
– past performance
– technical capabilities
– financial stability
Special Approvals
• First the good news!
– No More BB-4 form
– No More RIP form
– Board of Public Works (BPW) now
$500,000 for construction and
services (no longer $25,000)
• Other State Agencies still saddled
with old rules.
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Special Approvals
• Alcoholic Beverages - purchase
of such beverages with Universitycontrolled funds is not permitted
except when purchased for resale.
Approvals
• Purchases Affecting Buildings and
Utilities. Heavy items, very large items,
utilities hook-up, modification to a
structure, or pose hazardous or safety
concerns, must be reviewed and
approved.
Special Approvals
• Purchases Using Sponsored
Programs Funds
– equipment with a unit value greater
than $5,000 must first be approved
by the Comptroller’s Office,
Inventory Control.
– Purchases using sponsored
programs funds for services with a
value greater than $5,000 must first
be approved by the ORAA
Special Approvals
Radioactive And Hazardous
Materials
– approved by the Radiation Safety
Officer, Environmental Safety
Special Approvals
• Live Vertebrate Animals
– Animals with backbones must first
have their Animal Care Protocol
approved by campus Animal Care
and Use Committee.
• Motor Vehicles
– Purchase or leasing of motor vehicles
requires prior approval by the Fleet
Administrator.
Special Approvals
• Real Property
– Purchase, leases and rentals of land and
structures usually require special
processing and approval
• Legal Representation
– Hiring of Attorneys must be coordinated
with the President’s Office of Legal Affairs.
Special Approvals
• Insurance
– University is generally prohibited from purchasing
insurance.
– Need a certificate of insurance? Contact Blair
Blankinship, 301-405-5837
• Vendor Agreements, Licenses,
Waivers, Contracts and Contract
Modifications.
– All such documents require Procurement’s review
for objectionable terms.
– Other University personnel are not authorized to
sign such documents and may be personally liable
for the obligations in the agreement.
Consulting Agreements
• Consulting services are, in principle,
no different from any other contract for
services.
• Contracts over $5,000 must be
coordinated with Procurement.
• Travel and accommodations costs can
be included in the contracts.
– travel and accommodations should be
consistent with University travel
guidelines.
Page 21
Consulting Agreements
• Cannot treat consultants as
employees.
• To avoid conflict with IRS rules
consult with Procurement and
Supply or the President’s Office of
Legal Affairs.
Furniture Purchases
• State Use Industries should be
evaluated for all furniture
purchases.
• If State Use Industries (SUI) can
satisfy your requirements we
must use SUI.
Page 21
State Use Industries
Furniture
• Five exceptions are recognized by
law for not purchasing from SUI:
– SUI cannot provide the items within a
reasonable time
– SUI cannot meet reasonable specification.
– The cost of purchasing from SUI exceeds
the budgetary allowance.
– The procurement is an emergency
procurement as defined by law - necessary
to avoid or to mitigate serious damage to
public health, safety and welfare.
– The item is not available from SUI.
• You must document the reason!
Special Approvals
• Contracts for construction or
services over $500,000 require
prior approval of the MD Board of
Public Works.
– Who? The Governor, Comptroller
and Treasurer.
• Contracts over $5 Million require
prior approval of the USM Board
of Regents.
Exemptions from
Standard Procedures
• Several categories of items are
excluded from the USM Procurement
Policies and Procedures
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Real Property
Disposal of Surplus Property
Collaborative Undertakings
Intergovernmental contracts
Purchases for resale
Cultural, entertainment and intercollegiate
athletics
Page 23
Exclusions
• Protection and administration of
intellectual property rights
• Housing, food and related supply and
service contract for conference facilities
• Contracts for programs and operations
located or implemented overseas or
out-of-state
• Procurement in conflict with a
governing federal law or the terms of a
gift
• purchase, use or development of
curricular materials
Procurements Funded by
Federal Funds
Page 25
Purchasing Rules Apply
Regardless of Funding
Source
• University Procurement Rules Apply
to Grants and Contracts
A110 C.43 Competition
Preferred
• Maximum extent practical
• Specification developer excluded
• Award to most advantageous and
responsive offer
– Price, quality, other written factors
Procurement and Supply
• Has responsibility for obligating
funds for procurements and signing
contracts
• Responsibilities include
– Seeking Maximum Practical
Competition
– Making Formal Determinations
– Issuing Purchase Orders & Contracts
– Establishing Master Contracts
Solicitation Standards
• Clear description, no restrictive
specifications
• Vendor requirements, evaluation
factors
• Functional or performance
specifications
– Range or minimum
Solicitation Standards
• Specify salient characteristics of
the item if using Brand Name or
Equal
• Preferences
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Metric Measurement
Environmentally friendly
Energy efficient
Recycled
Other Federal Concerns
(Grant and Contract)
• Food
• US Flagged vessels and planes
• Restricted entities/governments
• http://www.arnet.gov/epls/
• Federal provisions for purchase
orders/contracts
Small Business
Subcontracting Plans
Set Goals for Awards To:
• Small businesses
• Disadvantaged firms
• Women owned business
enterprises
• HUB-Zone firms
• HBCU and MI
• Veteran owned firms
Small Business Definition
• Service - Average Receipts NTE
$2.5 - $21.5 Million
• Manufacturers - # Employees
500-1500
• Supplies - less than 500
employees
Disadvantaged Firms
• Changed 10/11/99
• Certification by Small Business
Administration (SBA) required
Which Firms are Small,
Women-Owned, Etc?
• www.pro-net.sba.gov
– Identify a specific firm
– List small firms for a specific SIC
code
• www.sba.gov/hubzone
– See handout
– Identify by County
Report of
Small Business Spending
• SF 294 Form
– Individual contract over $500,000
• SF 295 Form
– Summary of all contracts for each
sponsor
• Reports generated twice each year
by Procurement with assistance
from ORAA and Comptroller
Minority, Small and
Disadvantaged
Business Enterprise
Program
Page 27
Minority Business
Enterprise
• Minority Business Enterprise
(MBE)
• State socioeconomic program to
support historically underutilized
businesses.
• House Bill 306 - Maryland Law
sets goals
Certification for MBE
contractors
• To be counted a firm must be
certified by MD Dept. of
Transporation
• Approx. 2700 firms certified
• Database available at
– http://www.mdot.state.md.us/cgibin/mbedir/mbedirectory
– link from Procurement’s web site
Minority Business
Participation Goal
• FY 03 goal is 25% of dollars spend
to be spent with MBE contractors
or subcontractors
• 10% sub-goal for women owned
businesses and 7% for African
American owned businesses
• Included - not additional
Chancellor and President
Mote support MBE program
• The UM and USM Board of Regents supports
the State’s efforts to increase business
opportunities for MBE’s
– Firms that have demonstrated time and again the
ability to provide excellent products and services
• Increasing the MBE participation to 25 percent
is a significant challenge.
• We also need the assistance and aggressive
effort of every unit on campus to achieve these
new MBE goals.
Review of Each
Procurement
• Procurement and Supply will
review each procurement to
determine if MBEs are available
for solicitation.
• Each Procurement over $100,000
will have MBE contract or
subcontract goal.
Documentation of
Procurement Files
Page 30
Documentation
• The procurement process is
complex and detail oriented.
Good business judgement as well
as policy and procedure dictate
that complete and accurate
records must be created and
maintained.
Documentation
• Each file should be well documented
– understand the need for and nature of the
procurement
– know who requested, who funded and who
issued/authorized the contract
– understand the rights and responsibilities
of all parties
– understand how contractor was selected
– understand the price of the contract and
price analysis performed to determine that
the price is fair and reasonable
– understand the rationale that supports the
finding that the contractor is “Responsible”
– understand all important contract dates
Documentation of P-Card
Transactions
• Completed Purchasing Card
Transaction Log clearly describing
the goods or services, detailed
receipts, and a reconciled Visa
statement for each billing period.
– The Transaction Log must be signed
by the cardholder and assigned
reviewer.
Records of Large
Transactions
• Records and reports for
Transactions handled by
Procurement will be maintained
in Procurement and Supply’s files.
• Departments should keep copies
of Requisition and other related
files.
Receiving and Shipping
Page 32
Goods Received by the
Requestor
• Review Delivery/Shipping Documents
• Inspect Shipment
• If count is incorrect or damage is apparent
– Record discrepancy on delivery document (short one
piece, etc.)
– Have delivery person sign acknowledgement of
statement with signature or initials
– Make a copy of the signed document for your records
– Sign document and accept delivery
– Contact Procurement for Assistance if necessary.
• If UPS or FedEx and shipment is damaged, record
discrepancy and refuse shipment
Shipping Goods from
Campus
• Get a “Return Authorization” from
Contractor to whom you are
shipping
• Insure outbound shipments
• Keep accurate records
Household Moves
• Procurement has contracts for household
moves.
• Contact Blair Blankinship, 410-837-5714
for assistance.
• Please allow approximately four weeks
for the bid process, especially during
peak season (June, July and August)
Contract Administration
Page 35
Contract Administration
• Small purchase of supplies
– contract administration may be no
more than verifying that the ordered
item was received on time, at the right
location and the price on the invoice is
equivalent to the price on the
purchase order, P-Card order, etc
• complex procurement
– contract administration is a
responsibility that is shared between
Procurement and Supply and the
customer
Contract Administration
• Complex Procurement
– Contract Kick-Off Meeting
– Identification of Using Department
Program Manager
– Identification of Contractor
Technical or Service Representative
Contract Administration
• Early and effective
communication between all
parties (including Procurement)
• Detailed documentation of
performance
– Good or Bad!
Disposal of Surplus
Property
• Property Control
• Located in the Academic Center
• Contact Lisa Edwards (X5242) for
assistance
We Discussed…
• Key Purchasing Principles
• Where to Find Purchasing
Information
• Purchasing Processes, Procedures,
Lead Times
• Purchasing Restrictions
• Federal Subcontract Plans &
Reports
Questions
• Blair Blankinship, Director of
Procurement and Material Management
bblankin@ubalt.edu
410-837-5714