Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Instructor
Michael S. Gifford, C.P.M., PHM
Housing Agency Procurement Assistance (HAPA)
Las Vegas, NV
Office(866)526-7790 Cell(702)236-0275
E-mail: gifford52@yahoo.com
1
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
What will we accomplish during this presentation?

A better understanding of what HUD and the public
requires pertaining to noncompetitive procurements.

A renewed commitment to conduct noncompetitive
procurements and the ensuing contract awards in an
open, fair, reasonable and justified HUD-compliant
manner.

An ability to locate in the regulations what HUD wants
pertaining to noncompetitive procurements–hence, a
better understanding of HUD requirements.

As a result, improved relationships with our Board, our
ED, our clients, our contractors, and the public at large.

An understanding of Gifford’s Gospels.
2
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Gifford’s Gospels
No. 1: “If it ain’t written, it don’t exist.
No. 2: “There are no coincidences in life—everything happens
for a reason.”
No. 3: “Whatever we do must be open, fair, reasonable and
justified.”
No. 4: “Contractors are not our friends—they are our partners.”
No. 5: “Nothing is free—there is a price to pay for everything.”
No. 6: “Be prepared—if something can go wrong, it will happen
at the worst possible moment.”
No. 7: “Luck is where preparation and opportunity meet.”
No. 8: “He/she who writes the contract, the contract is in favor
of.”
3
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Herein we will make references to:

24 CFR 85.36:





HUD Handbook 7460.8 REV 2:




aka the Common Rule.
Issued by Congress.
Hereinafter “Part 85.36.”
Specific references herein within “{ }.”
7460.8 issued by HUD to explain Part 85.36 in further
detail.
Hereinafter “7460.8” or “HPH.”
Specific references herein within “[ ].”
<Many Sample Forms developed by HAPA and HUD are
available at no charge on procurementassistance.org>
4
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Within the Handbook’s or the CFR’s:

Important!!!!! Remember, therein:


[HPH: 1.2]
“Shall” and “must” mean that an action or item is
mandatory and is required by statute or regulation.
“Should” and “may” mean that the action or item
serves to provide guidance and/or best practices but
is not mandatory.
!!!PLEASE NOTE-BEWARE!!!

HUD has used the term “should” a number of times
in the HPH and then in another part of the HPH uses
the term “shall” or “must” in reference to the same
issue—an auditor WILL most likely go with the
stricter reference as the requirement.
5
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Relationship of local or State laws with Federal law:

PHAs must comply with the stricter of Federal
rules and State/local rules.
[HPH: 1.5/13.1]

States.
{Part 85.36(a)}

“When procuring property and services under a
grant, a State will follow the same policies and
procedures it uses for procurements from its nonFederal funds. The State will ensure that every
purchase order or other contract includes any
clauses required by Federal statutes and executive
orders and their implementing regulations.”

Therefore, one procurement policy only!
6
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Procurement Authority: Use of noncompetitive
procurements is, per pages a-6 through a-7 of Appendix 1 of
the HPH, is typically listed within the HA . . .

Procurement Policy:






[HPH: 2.2]
Appendix 1 of 7580.8 REV 2 (corrected copy)
Combining Policy and Procedures—Not good!
 Policy approved by Board of Commissioners.
 Procedures approved by ED.
HUD approval not typically required
Includes stricter of requirements of Handbook 7460.8 REV
2, 24 CFR 85.36 and applicable local laws.
Know the difference: Policy—Procedure—Practice.
<procurementassistance.org, “Sample Documents,” Sample
Procurement Policy, SF-40a>
7
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Procurement Planning

Individual Procurement Plans (IPPs).




[HPH: 3.1]
Typically for larger procurements, but may also be used for
quotes.
Establishes deadlines and milestones.
Checklist.
[HPH: Appendix 2]
<procurementassistance.org, “Sample Documents,” Sample
Competitive Solicitation Checklists, SF-5a through SF-5m>
8
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Documentation: Requirements and Recommendations.
[HPH: 3.3] {Part 85.36(b)9}




“Sufficient to detail the significant history of each
purchase.”
In writing, in one clearly marked file.
Contains all documents pertaining to the issue.
Checklist.
Records Retention: 3 years after final payment.

Audit clause to be included in all solicitations.

{Part 85.36(a)&(b)}
{Part 85.36(i)(11)}

<procurementassistance.org, “Sample Documents,”
Sample Noncompetitive Justification Form, SF-27a>
Gifford’s Gospel: If it ain’t written, it don’t exist.
9
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Four competitive solicitation methods provided for by
HUD:

Quotations for Small Purchases (QSP)

aka Quotes
[HPH: Chapter 5] {Part 85.36(d)1}

Invitations For Bids (IFB)

aka Sealed Bids
[HPH: Chapter 6] {Part 85.36(d)2}

Request For Proposals (RFP) [HPH: Chapter 7] {Part 85.36(d)3}

aka Competitive Proposals

Request For Qualifications (RFQ)

aka Qualifications-based Selection (QBS)

Subset of an RFP (hence it is a sub-section within
HPH Chapter 7)
[HPH: 7.3] {Part 85.36(d)3.v)}
10
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD:

Micro Purchases




<$2,000
Must not be in violation of HPH 5.3.C.
Petty Cash Purchases.


[HPH: 5.6]
For very small purchases only ($50?).
Purchases must not be in violation of HPH 5.3.C.
Procurement Cards.



[HPH: 5.2.B]
[HPH: 5.7]
Can be an effective tool.
Purchases must not be in violation of HPH 5.3.C.
Must have written controls (set Policy and Procedure).
11
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(A) The item is only available from a single source;
CAUTION:



Be sure to do a reasonable survey of the marketplace,
ensuring that the “item is only available from a single
source” (underlining added by me).
DO NOT close your eyes or your ears to other potential
sources (e.g. “we are not aware of any other sources” or
“we have not heard of any other sources”).
Complete and place in the file the Noncompetitive
Procurement Justification Form. Especially note No. (5)
thereon.
12
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(B) The public exigency or emergency for the requirement
will not permit a delay resulting from competitive
solicitation; CAUTION:




Exigency: urgency; a situation calling for immediate
attention; pressing needs.
Emergency: a sudden, unexpected occurrence demanding
immediate attention.
Neither definition includes: “I forgot!” or “I’ve been too
busty to plan.”
Remember the age-old adage, “Your lack of planning is NOT
am emergency on my part.”
13
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(C) The awarding agency authorizes noncompetitive
proposals; CAUTION:

Who is the Awarding Agency? Typically, HUD awards
your Agency its grants.

Must have from HUD in from HUD writing (Gifford’s
Gospel: If it ain’t written, it don’t exist). Verbal
“approvals” cannot be proven!

No matter if you receive approval in writing, your Agency
is still responsible for what it does.
14
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(D) After solicitation of a number of sources, competitive is
determined inadequate; CAUTION:



“Solicitation of a number of sources” means you conduct a
full open competitive solicitation.
“Competitive is determined inadequate” means you only
received one quote, bid, or proposal in response to the
solicitation.
Beware inappropriate competitive solicitation practices that
serve to restrict competition and may cause an
“inadequate” number of responses (e.g. received one only):
15
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(D) After solicitation of a number of sources, competitive is
determined inadequate; CAUTION:

Beware inappropriate competitive solicitation practices that
serve to restrict competition and may cause an
“inadequate” number of responses (e.g. received one only):
•
Not placing an advertisement <SF-4a/SF-4b>;
•
Not advertising for an adequate period of time; or
•
Placing the advertisement too close to the preconference, especially if the pre-conference is
mandatory (e.g. advertise on Monday, pre-conference
on Wednesday).
16
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(D) After solicitation of a number of sources, competitive is
determined inadequate; CAUTION:

Beware inappropriate competitive solicitation practices that
serve to restrict competition and may cause an
“inadequate” number of responses (e.g. received one only):
•
Not doing outreach to a reasonable number of
prospective quoters/bidders/proposers, especially
those who have previously inquired<SF-7a and SF-7e>;
•
In appropriately or unnecessarily making preconferences mandatory <SF-37a through SF37d> ;
17
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(D) After solicitation of a number of sources, competitive is
determined inadequate; CAUTION:

Beware inappropriate competitive solicitation practices that
serve to restrict competition and may cause an
“inadequate” number of responses (e.g. received one only):
•
Issuing specifications/SOW’s that are unduly
restrictive or advantageous to a certain firm;
•
Answering questions by one firm and not to all firms,
via addendum <SF-2>;
18
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Noncompetitive Procurements (in each case, complete
the Noncompetitive Procurement Justification form)
[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(D) After solicitation of a number of sources, competitive is
determined inadequate; CAUTION:

Beware inappropriate competitive solicitation practices that
serve to restrict competition and may cause an
“inadequate” number of responses (e.g. received one only):
•
Inappropriately utilizing the RFP method to eliminate
some firms from consideration (e.g. not evaluating
appropriately per the evaluation factors published).
19
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Other solicitation/procurement methods provided for
by HUD (con’d):

Contract award directly to another governmental agency
[HPH: 14.2]

Much information in Section 14.2 as to how to complete awards
to other governmental agencies. Must be for “common goods
and services only;” “common,” meaning something that the
governmental agency does during its normal course of
business.

All following requirements apply (e.g. NOT exempt from ICE
and CPA, though rates set by government, such as sewer fees,
are exempt from analysis—there is no need to analyze a cost
that you cannot compare to anything else or that you have no
power to change or influence).
20
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Recap of methods we have discussed:

Micro Purchases (Noncompetitive)

Quotations for Small Purchases-QSP (Competitive)
[HPH: 5.2.B]
[HPH: Chapter 5]

Invitation For Bids-IFB (Competitive)
[HPH: Chapter 6]

Request For Proposals-RFP (Competitive)
[HPH: Chapter 7]

Request For Qualifications-RFQ (Competitive) aka
Qualifications-based Selection-QBS)

[HPH: 7.3]
Noncompetitive Awards (Noncompetitive); including: sole
source; emergency; HUD-approved; single bid/proposal
[HPH: Chapter 8]{Part 85.36(d)(4)}

Awards directly to another governmental agency
[HPH: 14.2]
21
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Mandatory requirements for noncompetitive
procurements

Independent Cost Estimate (ICE)


Except for rates set by government for the public at large,
which are exempt from analysis (such as sewer fees).
Cost Price Analysis (CPA)



[HPH: 3.2]
[HPH: 10.3, Appendix 12]
Price Analysis involves only comparing the proposed costs
with the ICE, as there is no force of competition to
compare.
Except for rates set by government for the public at large,
which are exempt from analysis (such as sewer fees).
<All referenced forms are available at no charge in the
“Documents” area of procurementassistance.org>
22
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Mandatory requirements for noncompetitive
procurements

Standard Forms/Mandatory Contract* Clauses.

Small Purchases, Non-construction, without Maintenance
Work: Table 5.1.
[HPH: 5.10]

Small Purchases, Non-construction, with Maintenance work:
Table 5.1; form HUD-5370-C, Section II; if applicable,
appropriate Maintenance Wage Rate Determination.
[HPH: 5.10]

Small Purchases, Construction: form HUD-5370-EZ;
appropriate wage decision; perhaps bonds.
[HPH: 5.10]
*PLEASE NOTE: The various 5369 forms are not contract
forms—they are competitive solicitation forms—and have no
applicability to the contract that ensues from the solicitation;
therefore, it is not appropriate to include them in a contract.
<All referenced forms are available at no charge in the
“Documents” area of procurementassistance.org>
23
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Mandatory requirements for noncompetitive
procurements

Standard Forms/Mandatory Contract* Clauses.

Formal Contracts, Non-construction, with Maintenance
work: form HUD-5370-C - Section I and form HUD-5370 –
Section II; if applicable, appropriate Maintenance Wage
Rate Determination.
[HPH: 6.5.A.6/10.5.C]

Formal Contracts, Non-construction, without Maintenance
work: form HUD-5370-C - Section II.
[HPH: 6.5.A.6/10.5.B]
*PLEASE NOTE: The various 5369 forms are not contract
forms—they are competitive solicitation forms—and have no
applicability to the contract that ensues from the solicitation;
therefore, it is not appropriate to include them in a contract.
<All referenced forms are available at no charge in the “Documents”
area of procurementassistance.org>
24
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
Mandatory requirements for noncompetitive
procurements

Standard Forms/Mandatory Contract* Clauses.

Formal Contracts, Construction: form HUD-5370-C,
appropriate Wage Rate Decision.
[HPH: 6.5.A.6/10.5.A]

Formal Contracts, Design Work: form HUD-51915.

In addition to the aforementioned 5370/51915 forms, ALL
contracts must include the thirteen required clauses from
24 CFR Part 85.36(i).
[HPH: 7.3.F]
*PLEASE NOTE: The various 5369 forms are not contract
forms—they are competitive solicitation forms—and have no
applicability to the contract that ensues from the solicitation;
therefore, it is not appropriate to include them in a contract.
<All referenced forms are available at no charge in the “Documents”
area of procurementassistance.org>
25
Can I Buy Stuff Without a Bid?
Yep, But You Better Be Careful!
Michael S. Gifford, C.P.M., PHM 2010 ©
I hope this information is of a
help!
Be sure to visit procurementassistance.org to
obtain, at no charge, many forms and
competitive
solicitation
(QSP’s;
IFB;
RFP’s; RFQ’s) documents.
Thank you!
26