Introduction to Procurement for Public Housing Authorities Competitive

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Introduction to Procurement for Public Housing Authorities Competitive Proposals

Introduction to Procurement for Public Housing Authorities Competitive Proposals

2 Learning Objectives • Understand when to use the competitive proposal method of procurement

2 Learning Objectives • Understand when to use the competitive proposal method of procurement • Understand the basic process and requirements for awarding contracts under the competitive proposal method • Understand the difference between the two types of competitive proposals: Requests for Proposals and Requests for Qualifications

3 Proposals • Competitive Proposals ▫ The market supports adequate competition Allows for negotiated

3 Proposals • Competitive Proposals ▫ The market supports adequate competition Allows for negotiated procurement that considers factors other than price using proposals solicited from multiple offerors & • Noncompetitive Proposals ▫ The market does not support competition Single or sole source items/services Emergencies and Public Exigencies HUD authorizes

4 Competitive and Noncompetitive Proposals Request for Proposals Competitive Proposals Qualifications-Based Proposals (Used in

4 Competitive and Noncompetitive Proposals Request for Proposals Competitive Proposals Qualifications-Based Proposals (Used in the Selection of A/Es & Mixed-Finance Developers) RFQ Price is Excluded Competitive-Based Proposals RFP Price is Included Noncompetitive Proposals

5 When to use Competitive Proposals… 1. 2. 3. 4. 5. 6. Conditions require

5 When to use Competitive Proposals… 1. 2. 3. 4. 5. 6. Conditions require the use of the method, such as unclear or incomplete specifications The nature of the work requires evaluation of technical merits in addition to price Cannot award a firm fixed-price contract (e. g. , Sealed Bid) The work lends itself to different approaches There are 2 or more qualified offerors in the market The cost estimate is more than the $100, 000 Federal regulatory threshold or a lower dollar limit specified in the PHA’s Procurement Policy

6 The Competitive Proposal Process Solicit 1. Advertise & receive proposals (RFP/RFQ) Evaluate 2.

6 The Competitive Proposal Process Solicit 1. Advertise & receive proposals (RFP/RFQ) Evaluate 2. Evaluate proposals, with or without price as a factor Negotiate 3. Negotiate the price, if applicable Award 4. Award the contract to the top ranked entity, price considered!

7 Two Types of Competitive Proposals Competitive-Based Proposals Identified as Request for Proposals (RFP)

7 Two Types of Competitive Proposals Competitive-Based Proposals Identified as Request for Proposals (RFP) Used for procuring professional and consulting services, including Architecture/ Engineering (A/E) professional services Price is considered as a selection factor! Qualifications-Based Proposals Identified as Request for Qualifications (RFQ) Procedure can only be used for the selection of Architecture/Engineering professional services or Mixed-Finance Developers Price is not considered as a selection factor!

8 Issuing Requests for Proposals (RFP) • Develop a detailed Statement of Work •

8 Issuing Requests for Proposals (RFP) • Develop a detailed Statement of Work • Develop/reassess the Independent Cost Estimate • Develop the applicable Evaluation Factors, including price, and the award criteria • Publicly advertise the RFP ▫ Local, state and national newspapers, trade periodicals, etc. ▫ Mail advertisement to potential entities or firms • Hold a pre-proposal conference, if deemed necessary • Issue addenda, if necessary • Receive proposals ▫ Time-date stamp and safeguard ▫ Do not open publicly!

9 Evaluating RFPs: Rating and Ranking • Draft evaluation factors and scoring range -

9 Evaluating RFPs: Rating and Ranking • Draft evaluation factors and scoring range - customized to proposal - before solicitation is advertized • Develop rating and ranking forms to summarize criteria • Identify evaluation committee and chairperson • Hold meeting to discuss procedures to follow • Use whole numerals for scoring range ▫ Example for 20 point scale: � 15 to 20 points: Excellent � 10 to 14 points: Good � 0 to 9 points: Poor

10 More on Rating and Ranking • Sample Evaluation Factors 1. 2. 3. 4.

10 More on Rating and Ranking • Sample Evaluation Factors 1. 2. 3. 4. 5. 6. • Evidence of experience and ability to perform task specified under solicitation Capability to provide service in a timely manner Knowledge of applicable Federal, State and local laws, and regulations Fee schedule for task Licensing requirements Other rating criteria, as necessary Final Ranking Identification ▫ ▫ ▫ Acceptable Capable of being made acceptable Unacceptable

11 Evaluating RFPs: Technical Evaluation Committee/Panel • Sample Procedures for Evaluation Committees (See Appendix

11 Evaluating RFPs: Technical Evaluation Committee/Panel • Sample Procedures for Evaluation Committees (See Appendix 8 in the PHA Procurement Handbook) ▫ Made up of at least 3 members (or a greater odd number) ▫ Members identified by Contracting Officer ▫ Panel members must identify any conflict of interest related to RFP/RFQ and, if necessary, recuse themselves ▫ Independent panel ▫ Confidential decisions �See Appendix 9 in the PHA Procurement Handbook – Certification of Nondisclosure

12 Evaluating RFPs • Based on the method identified in the advertised RFP, the

12 Evaluating RFPs • Based on the method identified in the advertised RFP, the Evaluation Committee evaluates and ranks proposals using one of two methods: ▫ Price is part of the initial evaluation factors – 1 step process �Points are assigned to price based on its relative importance to the points assigned to the other technical factors. ▫ Price is secondary and part of final evaluation – 2 step process �A technical evaluation of the qualification factors, excluding price, is done first. �A final evaluation considering price is completed last. • The Evaluation Committee issues the Evaluation Report ▫ Lists the final ranking of the offerors by technical merit, including price.

13 More on Evaluating RFPs: Negotiation • Evaluation Committee develops the negotiation objectives to

13 More on Evaluating RFPs: Negotiation • Evaluation Committee develops the negotiation objectives to be used by the Contracting Officer in the reassessment of proposals. • Contracting Officer determines the limit of the competitive range (the “cut-off”) and either… ▫ Proceeds to negotiate with the best ranked offerors, or ▫ Awards contract to top ranked offeror without negotiations – provided such procedure is clearly outlined in the RFP, and the contract file contains the rationale for such action. • Negotiation: exchanges between the PHA and offeror(s) which allow clarification of unclear issues, improvement of weaknesses, correction of deficiencies, etc. , and an opportunity to revise the proposal.

14 Evaluating RFPs: Round 2 – After Initial Negotiations • • • After initial

14 Evaluating RFPs: Round 2 – After Initial Negotiations • • • After initial negotiations are complete, the Contracting Officer (CO) notifies the entities within the competitive range to submit best and final offers …a second round! CO receives best and final proposals. Evaluation Committee performs a second technical evaluation of re-submitted final proposals and makes a final recommendation via an Evaluation Report. CO either selects the top-ranked provider or, if needed, performs second round of negotiations/discussions with selected offerors in the final competitive range. CO accepts the most advantageous proposal. CO must justify the determination in writing and ensure that the successful offeror is responsible.

15 Responsible Contractors • A bidder/offeror that has the ability to perform successfully under

15 Responsible Contractors • A bidder/offeror that has the ability to perform successfully under the terms and conditions of the proposed contract/agreement ▫ Per § 85. 36(d)(3)(iv), Awards will be made to the responsible firm whose proposal is most advantageous … • In determining responsibility, the PHA’s Contracting Officer shall consider the bidder’s ▫ Satisfactory record of integrity & business ethics ▫ Compliance with public policy ▫ Performance record & experience ▫ Financial & technical resources

16 Issuing the Award § Obtain Board of Commissioner approval, if required § Conduct

16 Issuing the Award § Obtain Board of Commissioner approval, if required § Conduct pre-award conference, if required § Obtain Contracting Officer’s approval of the contract award § Execute contract –all parties § Notify unsuccessful offerors § Administer and manage the contract per established procedures

17 Issuing Requests for Qualifications RFQs • Used only for the selection of Architecture/Engineering

17 Issuing Requests for Qualifications RFQs • Used only for the selection of Architecture/Engineering firms or Mixed-Finance Developers or when authorized by HUD ▫ Includes joint venture partnerships for development purposes • The RFQ includes only technical qualification statements related to the project being procured • The evaluation process is similar to the one outlined for RFPs except there is no factor for price ▫ Price is negotiated after the best qualified entity has been selected!

18 More on Issuing RFQs • Once a competitive range is established based on

18 More on Issuing RFQs • Once a competitive range is established based on technical factors, the Contracting Officer negotiates with the topranked firm to reach a fair and reasonable price. • If an agreement cannot be reached, negotiations are terminated with that entity and the Contracting Officer starts negotiations with the next highest ranked entity. ▫ This process is repeated as necessary until a contract is awarded. ▫ Once negotiations have been terminated with a firm, the PHA cannot reopen negotiations with that firm even if the next lower ranked offeror is higher in price!

19 More on Issuing RFQs • If a PHA receives less than 3 proposals,

19 More on Issuing RFQs • If a PHA receives less than 3 proposals, it must first evaluate them before deciding what to do: ▫ If 2 proposals—either proceed to award or reject all and start over. ▫ If only 1 proposal—HUD approval must be obtained before award since it becomes a noncompetitive (e. g. , sole source) procurement.

20 General requirements for Competitive Proposals • Evaluation Factors and their relative weight must

20 General requirements for Competitive Proposals • Evaluation Factors and their relative weight must be included in the RFP/RFQ and referenced in the advertisement. • The PHA must establish an Evaluation Committee to review technical factors. • Price is always a factor but it may or may not be a weighted evaluation factor. • Where price is part of the scoring process, a Price or Cost Analysis must be part of the evaluation report issued by the Evaluation Committee. • Profit must be negotiated as a separate element of the contract.

21 Required Forms for Competitive Proposals • Attachments to Solicitation (Non-Construction and A/Es) ▫

21 Required Forms for Competitive Proposals • Attachments to Solicitation (Non-Construction and A/Es) ▫ HUD-5369 -B, Instructions to Offerors Non-Construction ▫ HUD 5369 -C, Certifications and Representations of Offerors Non. Construction Contract • Attachment to Contracts for Non-Construction: ▫ HUD-5370 -C, General Conditions for Non-Construction Contracts (either Section I or both Sections I and II) • HUD A/E Agreement Form ▫ HUD-51915, Model Form of Agreement Between Owner and Design Professional • Attachment to AIA B 108 -2009 model A/E contract ▫ HUD-51915 -A, Contract Provisions Required by Federal Law or Owner Contract with the U. S. Department of Housing and Urban Development

22 Competitive Range Example (RFP) Independent Cost Estimate = $325, 000 OFFEROR SCORE COST

22 Competitive Range Example (RFP) Independent Cost Estimate = $325, 000 OFFEROR SCORE COST 1 EXP, Ltd. 96 $375, 000 2 NKT Co. 91 $350, 000 3 OBC, Inc. 89 $425, 000 4 NTT Assoc. 79 $315, 000 5 MTB Co. 55 $250, 000 22

23 Competitive Range Example (RFP) Independent Cost Estimate = $325, 000 OFFEROR SCORE COST

23 Competitive Range Example (RFP) Independent Cost Estimate = $325, 000 OFFEROR SCORE COST 1 EXP, Ltd. - consider 96 $375, 000 2 NKT Co. - consider 91 $350, 000 3 OBC, Inc. - consider 89 $425, 000 4 NTT Assoc. - ? 79 $315, 000 5 MTB Co. - ? 55 $250, 000 23

24 Competitive Range Example—Final Selection Independent Cost Estimate = $325, 000 OFFEROR SCORE COST

24 Competitive Range Example—Final Selection Independent Cost Estimate = $325, 000 OFFEROR SCORE COST 1 EXP, Ltd. - included 96 $375, 000 2 3 4 NKT Co. - included OBC, Inc. - included NTT Assoc. - included 91 89 79 $350, 000 $425, 000 $315, 000 5 MTB Co. - excluded 55 (too low) $250, 000 (too low)

25 Remember… • RFQ method only used for A/E services, Mixed-Finance Developers or when

25 Remember… • RFQ method only used for A/E services, Mixed-Finance Developers or when HUD authorizes • Price is not a selection factor when using RFQ method ▫ Negotiate price after ranking respondents based on technical factors • Include evaluation factors and relative weight in RFP/RFQ advertisement • Negotiate!

26 References and Resources • 24 CFR 85. 36(d)(3) • PHA Procurement Handbook 7460.

26 References and Resources • 24 CFR 85. 36(d)(3) • PHA Procurement Handbook 7460. 8 REV 2 Chapter 7 • For HUD’s Limited Denial of Participation List, visit www. hud. gov/offices/enforce