Procurement Process for Public Organizations
1. What will be Purchased
For Professional or Consulting Services, the Competitive Proposal method is most advantageous to the Administrator
- Determining factor: Provider price, qualifications, experience, knowledge
- Examples: Contractors for the installation of HVAC, WX work; Audit Services, Tracking Software, Accounting Software.
2. Procurement Type: Competitive Proposal
The Competitive Proposal method requires the Administrator to publicly solicit the best qualified professional based on established selection criteria, such as price, qualifications, knowledge, and experience. A minimum of two (2) acceptable bids must be received to meet the competitive proposal requirement. The awarded contract and price are subject to negotiation.
3. Identify Staff Involved in Purchase Process
Individuals involved in the procurement process may include, but are not limited to:
- Program Director or Manager
- Construction inspector or manager
- Quality Control
- Accounting/budget/audit professionals
The Administrator does not need to identify separate individuals for each of the following roles. One individual may assume several of the roles outlined below as long as the assignment of roles maintains separation of duties and avoids conflict of interest.
Avoid Conflict of Interest
Administrator must ensure there is sufficient separation of staff duties to avoid conflicts of interest during the procurement process. For example: Someone other than the person(s) conducting the purchasing processes should review and approve payment for the goods/services procured; employees in the purchasing function should not have record-keeping responsibilities in the cash disbursement system; employees involved in the receipt of goods from vendors should not be involved in the purchasing or cash disbursement processes.
Conflict of interest occurs when a "covered person" inappropriately benefits, either directly or indirectly, as a result of:
- Procurement actions taken in the administration of federal funding; or
- Receipt of assistance provided by federal funding
Covered persons include:
- All employees, officers, elected or appointed officials, and agents of the Administrator, and their family members, partners, and associates
Covered persons canNOT:
- Participate in procurement of the beneficiary for contractual award or selection of the beneficiary for assistance
- Conduct business with the procured provider or the assisted individual
- Solicit or accept gratuities, favors, or items of monetary value from the procured provider or the assisted individual
One individual may assume several duties outlined below as long as the assignment maintains separation of duties and avoids conflict of interest.
Procurement Oversight: The individual responsible for procurement oversight assumes all responsibility for ensuring that the procurement process is compliant and timely.
Compliance with Internal Policy: Administrator must identify individual(s) responsible for ensuring appropriate procurement procedures are conducted in accordance with Administrator's written procurement policies and procedures to:
- Ensure free and open competition
- Use appropriate methods for soliciting goods and services
- Determine the best value for goods and services purchased
- Comply with local/state/federal requirements
Contract Management: The individual(s) responsible for overseeing contract management must ensure the following factors are appropriately addressed:
- Compliance with applicable local/state/federal policies, procedures, rules, and regulations
- Development of contractual timelines to ensure program benchmarks are met
- Records management and documentation
- Appropriate expenditure of funds
- Quality goods and services obtained at lowest reasonable prices
- Development and negotiation of contracts/agreements awarded
- Post-procurement monitoring of contractor performance
Timeline Tracking: The individual responsible for overseeing procurement timelines must ensure that procedures are undertaken in a timely manner so that goods/services are received in sufficient time to allow compliance with program requirements and contractual benchmarks. Any variations must be acknowledged and the procurement timeline adjusted as necessary. See #4 for additional guidance.
Developing the of Scope of Work: The individual responsible for developing the Scope of Work must be qualified to assess the technical requirements for the required materials/products/services. See #5 for additional guidance.
Evaluation of Proposals Received: Administrator must designate a committee responsible for the objective assessment and selection of proposals based on established evaluation criteria. See #8 for additional guidance.
4. Establish Timeframes
Ensure procurement procedures are undertaken in a timely manner so that goods/services are received in sufficient time to allow compliance with program requirements and contractual benchmarks. Consider the following factors:
- Time required to develop the Scope of Work
- Goods/services – requires analysis of product/services required and descriptive write-up for solicitation of proposals
- Time required to develop Request for Proposal (RFP)
- Required publication period for RFP
- Be prepared to advertise outside your service area if necessary to get qualified bidders
- Time for optional meeting prior to bids being due to allow for questions from potential bidders
- Time required for submittal of proposals by service providers
- At a minimum, allow fourteen (14) days before the bid is due from the time of initial advertisement
- Time required to review and/or negotiate proposals
- Time required for formal approval by city/county/board (if applicable)
- Time required to develop an appropriate contract (if applicable) and execute the agreement
- Allowance for unforeseen circumstances or delay
- Allowance for potential bidder protest
- Be aware of contractual benchmarks or terms
Contract or Agreement Terms: Consider the length of the contract being awarded, and include sufficient time for the vendor/service provider to prepare, implement and finish the entire project.
Threshold or Production Timelines: Consider including performance thresholds with specific benchmark completion dates identified in the contract.
5. Develop Scope of Work
Create a thorough, detailed description of the goods/services to be purchased. Include specifications, standards, and minimum qualifications desired. Factors to be considered in the Scope of Work include, but are not limited to:
- Essential characteristics of the required product/service
- Quality and quantity of materials/products/services
- Minimum required standards for labor or materials, as applicable
- Requirements related to:
- Program rules and regulations
- Applicable codes/standards and plans/specifications (especially as related to construction)
- Methods and materials
- Required date of completion
- Potential length of contract
6. Create Proposal
A Request for Proposal (RFP) is created and published when procuring professional services for which factors other than lowest price are being considered. Establish minimum qualifications and request documentation of qualifications, experience, certifications and/or licenses. Include a clear and concise description of the work required for the professional service being procured. Identify required timeline for completion of the work. Include instructions for responding to the RFP. Reference the applicable funding source(s) or program(s), possibly including contract or award number. Identify location/date/time at which proposals must be received. Identify evaluation factors and their relative importance. Inform bidders that incomplete bids will not be considered. Include protest procedures for proposal respondents.
7. Begin Proposal Period
The bid period begins when the Request for Proposal (RFP) is published or posted. Publically advertise the RFP. Respond to any questions from interested parties; if relevant, share answers with all potential bidders. Document all activity at this time.
8. Accept and Evaluate
Record the receipt of all proposals. There must be at least two (2) completed/acceptable proposals for a competitive proposal.
Proposals must be:
- Responsive – fully conforms to specific information requested
- Reasonable – include reasonable costs and materials in line with industry practice and work required
- Responsible – provider possesses suitable skill-set to accomplish the job and evidences ability to perform with integrity and reliability
Proposals may be opened, reviewed, and negotiated as they are received.
- Evaluate the proposal information using the stated evaluation criteria and determine the most reasonable and responsible response.
- Compare submitted prices in submitted bids to cost/price analysis done by the Subrecipient - TAC §5.10(a) (Secretary of State site)
- Confirm and document the absence of conflict of interest.
- Confirm and document the bidder has not been state debarred or federally debarred.
- Proposals may be rejected if there is a sound documented reason.
- TDHCA pre-approval is recommended if only one acceptable proposal is received (non-competitive proposal).
- Conduct negotiation with the winning proposer, if appropriate.
- Accept the most responsive, reasonable, and responsible proposal and document approval by Board of Directors or approved designee, as applicable.
- Document the process.
9. Make Award
- Notify the accepted service provider and unsuccessful bidders. Allow time for exercise of protest rights by unsuccessful bidders.
- Prepare and execute the contractual agreement with the accepted service provider.
- Document the steps of this process and ensure copies of all documents are retained in a procurement file.