Utah Valley University New Age Procurement

1. Utah Valley UniversityNew Age Procurement

2. Some Positive Changes have been made.

3. Why?

4. Update to State Code • Why code was updated • Procurement code was old • Various high-profile procurement-related issues • Update process • 2012 Legislative Session • 2013 Legislative Session • 2014 Legislative Session • Effective Date: May 1, 2013

5. Regent’s Policy • Procurement code declares Board of Regents as Rulemaking Authority • New Regent’s policy delegates this rulemaking authority to each institution

6. New UVU Policies • Currently in Stage 3 • Posted on the Policy website • New policies • 241, University Procurement • 242, Solicitation and Award of Procurement Contracts • 243, Small Purchases • 244, Requisitions and Purchase Orders • 245, Receiving Goods and Services • 246, Surplus Property

7. New UVU Policies – cont. • Other affected policies • 204, Appropriateness of Expenditures • Updating references to procurement policies • Updating format • Fixing some minor grammatical and syntax errors • Not changing expenditure procedures • 421, Property and Equipment • Removing Surplus section only • Not updating format

8. High Profile Procurement Issues

9. DABC • Split Purchases • Unethical behavior • Accepting Gratuities • Inflating contracts • Bid Rigging

10. Splitting procurements • Under the Utah Procurement Code, it is illegal to divide, split, parcel, or manipulate a procurement, with the intent of making a larger purchase appear to qualify as a small-dollar purchase or to avoid an established dollar threshold. • Revocation of privileges (P-card, LPC) • Disciplinary action • Report to AG

11. Ethical Requirements • All individuals participating in a procurement, including contract administration, must adhere to the ethical requirements outlined in the Utah Procurement Code • Gratuities • Kickbacks • Fairness • Impropriety

12. UVU Procurement Code of Ethics • Know and obey the letter and spirit of laws, regulations, and policies • Prevent the appearance of unethical behavior • Protect confidential information • Avoid conflicts of interest • Do not accept gifts, gratuities, or kickbacks from vendors which may appear to influence purchasing decisions.

13. Change Orders • Requisitions should have a good estimated amount • No $1.00 requisitions • Change Orders submitted through website form • Additional items will not be added from invoice • Analyzed to ensure compliance with policies, procedures, and applicable contracts

14. Communication • During a procurement process, no communication with vendors • Vendors must be directed to Purchasing

15. Timpview High School • Mishandling money • Lax control environment • Personal Reimbursements • “Intentional and willful disregard by certain employees for compliance with appropriate practices and policies.”

16. Check Requests – A/P • “Any expenditure external to UVU that cannot be purchased with a limited purchase check or purchasing card must be obtained using a requisition through the Purchasing Department” (Policy 204.V.A.1.g). • Sales Tax. • Lack of proper controls.

17. Check Requests – Proper Use • Should only be used if the expenditure cannot be feasibly made using an LPC, P-Card, or PO as determined by FaBS and PS. • Include a detailed explanation on the check request. • Check Requests received for reimbursement may be sent to the VP as a violation. • See Policy 204. • Questions regarding Check Requests are referred to Scott Wood.

18. UDOT • Protest on I-15 CORE Project • Criteria weighting was changed to favor a vendor • Evaluation factors included in the RFP were not adhered to • Settlement: $13 million

19. Vendor Favoritism • Specifications shall not be unduly restrictive or appear to favor one vendor over another • Rating criteria should be clear and concise • Rules can’t be changed during the process • Analysis on expenditures to ensure fairness

20. Emergency! Emergency!

21. Emergency vs. Urgent • Emergency procurements are procurements needed due to an emergency situation • Threat to public health or welfare • Serious threat to the functioning of the institution • Procurements made at Purchasing’s discretion • Urgent procurements are procurements that are needed due to a lack of planning or circumstances beyond the control of the requestor. • All procurement policies and procedures must still be followed.

22. Violations

23. Violations • An unauthorized purchase is a purchase made without following the authorized procurement processes.  • An after-the-fact purchase occurs when a University employee places an order without first completing a requisition and receiving a purchase order.

24. Violations – cont. • Result in duplicate payments to the vendor, for which the department is responsible. • Result in higher costs for goods and services • Lead to significant vendor payment issues that can result in problems for other departments on campus. • Bypass the appropriate approval process. • Place the University at financial risk and create potential personal liability. • Create additional, often unnecessary, work for administrative support staff.

25. Violations – cont. Ways to Avoid Violations: • If you have to place an order, create the requisition right away.  Work with the Purchasing Office if you need the order expedited. • You must arrange a payment method BEFORE placing an order.  “I didn’t know…,” is not a valid excuse for violating policy.

26. Violations – cont. What to do if a violation occurs: • If a violation occurs, fill out all sections of the Purchase Violation Form.  • An explanation of why policy was not followed • Future corrective action • Attach invoice and send for authorizing signatures • Vendor is paid • DO NOT enter a requisition.

27. What changed?

28. Thresholds • Bid Limit • $3,000 • $5,000 (Construction) • Advertised Limit • $30,000 • $50,000 (Construction) • Small-Dollar Purchase Threshold • $5,000 • $15,000 (Construction) • Large-Dollar Purchase Threshold • $50,000 Old New

29. Small-Dollar Purchasing

30. Small-Dollar Purchasing • Methods: • Purchasing Card (P-Card) • Must comply with P-Card usage guidelines • Default Limit: $1,000 per purchase • Limited Purchase Check (LPC) • Must comply with LPC usage guidelines • Limits: $150 and $500 • Requisition/Purchase Order Process

31. P-Card Changes • Default limit: $1,000 • Auditing process • New preliminary audit report • Clearer deadlines • Adjustment to the point system

32. LPCs • Ordered using a Stores Requisition • Do not mix with regular stores items • Return documentation within five business days • Don’t return unused checks via intra-campus mail • Fewer violations

33. Requisitions • Requisitions (Req) are not Purchase Orders (PO) • Orders cannot be placed with requisitions • PO must be completed and approved before orders are placed • Orders placed before a PO is completed and approved are violations

34. Requisitions • Must include all necessary information for purchasing and vendors to understand what is being procured • Minimum specifications • Product numbers and descriptions • Names of individuals and Dates • Memberships, conferences, hotels, presenters, performers

35. Request for Quotes (RFQ) • Reqs over the small-dollar purchase threshold • Performed by the Purchasing Office • Quotes gathered from at least two known vendors • Order placed with vendor providing the lowest price • Not required if items are available through a contract

36. Large-Dollar Purchasing

37. Large-Dollar Purchase Methods • Requisition/Purchase Order • Invitation for Bid Process • Enhanced Procurement Methods

38. Invitation for Bids (IFB) • Publically advertised through BidSync.com • Time frame set by buyer • Minimum ten calendar days • Minimum specifications listed in requisition • Not brand specific • Not unduly restrictive • Awarded to vendor providing lowest price

39. Enhanced Procurement Methods

40. Enhanced Procurement Methods • Multi-Stage Bid (MSB) • Request for Proposals (RFP) • Multi-Year Pricing Agreement/Contract • Requires justification • Fill out Justification for Enhanced Procurement Method

41. MSB - New

42. MSB Examples • Equipment needed to perform specific experiment • Specialized software needed to perform specific function • Specialized services

43. Multi-Stage Bids (MSB) - New • An MSB is used when potential bidders or potential products must be pre-qualified before requesting priced bids. Objective criteria (pass/fail, quantitative) is used to determine if a potential bidder or potential product meets the minimum qualifications or specifications needed.

44. MSB Process • Enter a requisition. • Indicate MSB in the comments field • Fill out the Justification for Enhanced Procurement Method • If approved, buyer will provide an MSB Statement of Needs and Rating Criteria document • Work with the buyer to complete the document

45. MSB Process – cont. • Bids performed in two stages • Stage 1: Technical/Qualification • Allows vendors to submit technical (no cost) written bids outlining capabilities and qualifications. • May include demonstrations, presentations, trials, etc. • Bids are rated pass/fail based on meeting qualifications and specifications • Stage 2: Cost bids • Cost bids are requested from vendors that successfully pass Stage 1 • Awarded to vendor providing lowest price in Stage 2

46. MSB Process – cont. • Technical bids are evaluated by at least three individuals • Acceptable, Potentially Acceptable, Unacceptable • Discussions with vendors to clarify technical bids may be held during the evaluation process • Minimum timeframe: Two weeks – Stage 1 • Timeframe set by buyer

47. RFP - Improved

48. Request for Proposals (RFP) • In an RFP process, vendors are asked to submit proposals outlining how they would meet or exceed our needs. A committee evaluates the proposals and rates each proposal based on the criteria contained in the RFP. Following the technical evaluation, a cost evaluation is performed. The award is made to the vendor that will provide the best value to the University.

49. RFP Process • Enter a requisition. • Indicate RFP in the comments field • Fill out the Justification for Enhanced Procurement Method • If approved, buyer will provide an RFP Statement of Needs and Rating Criteria document • Work with the buyer to complete the document • Timeframe: Four to six weeks • Timeframe set by buyer

50. RFP Process – cont. • Evaluation is a three stage process • Stage 1: Technical Evaluation • Proposals are evaluated subjectively by at least three individuals • Each weighted criterion receives a score 1-5 • Technical points are combined for each proposal • Committee cannot have access to cost information