Procurement Modernization Town Hall Meeting August 15 2016

Procurement Modernization Town Hall Meeting August 15, 2016

Laws, Rules and Policies Laws, rules, and policies govern the procurement functions for the State of Colorado: ü Procurement Code & Rules ü State Purchasing & Contracts Office Policies ü State Controller Statute & Policies ü Fiscal Rules ü Personnel Rules ü Procurement Code of Ethics

Procurement Code • Governs how most executive branch agencies buy goods, services, information technology and construction • Administered by Department of Personnel & Administration

Purpose of the Procurement Code 1. Simplify, clarify, and modernize the law; 2. Provide for increased public confidence in public procurement; 3. Ensure the fair and equitable treatment of all who deal with procurement; 4. Provide increased economy in state procurement activities; 5. Foster effective broad-based competition; and 6. Provide safeguards for a procurement system of quality and integrity.

Other Statutory Requirements In addition to the Procurement Code, waivers or approvals are required for the following: ü Office furniture ü Technology goods and services ü Printing, document management, mail-related services, microfilm, graphic arts, copying, copiers, fleet, personal services contracts, independent contractors, and training

Preferences/Set Asides • Low Tie Bids • State purchases of recycled paper and recycled products • Environmentally Preferable Products • Service-disabled veteran owned small businesses • Persons with Severe Disabilities • Reciprocal bidder preference

Organizational Structure Department of Personnel & Administration State Purchasing & Contracts Office Agency Purchasing Office

Why does Government Buy what it Does? To fulfill the mission of its agency! Why doesn’t everyone get a state contract? Why do we require competition?

Methods of Source Selection Discretionary State Price Agreements Documented Quotes Invitation for Bids Request for Proposals Competitive Negotiation Emergency Sole Source

Discretionary • No competitive bidding required • Must ensure price is fair and reasonable • Encouraged to use Minority and Women-Owned Businesses

State Price Agreements • Competitive solicitations that result in statewide contracts • Administered by State Purchasing & Contracts Office • Users include state and local government, higher education, and qualified non-profit organizations • Multiple vendors can be awarded • Based on need and opportunity to leverage state’s buying power • Mandatory vs. Permissive

Documented Quotes (DQ) • Simplest solicitation • Typically has a quick turnaround • Informal process • Price is primary consideration • Flexibility to negotiate at State’s discretion

Invitation for Bids (IFB) • Primarily used for goods • Works well when specific need can be defined • Formal process – bids must be sealed • Bidders must be responsive (meet the requirements) • Low (responsive) bidder is awarded • No flexibility to negotiate

Request for Proposals (RFP) • Used primarily for services • Works well when the details are unknown (results) • Formal process – proposals must be sealed • Requires an evaluation committee • Price is one of many factors • Flexibility to clarify

Discretionary & Bidding Thresholds Goods Services Method < $10, 000 < $25, 000 Discretionary (no bidding required) > $10, 000 and < $150, 000 > $25, 000 and < $150, 000 > $150, 000 Documented Quote Invitation for Bids or Request for Proposals Overview of Colorado Procurement

Where are Solicitations Posted? üColorado. VSS (Vendor Self Service) https: //codpa-vss. hostams. com/webapp/PRDVSS 1 X 1/Alt. Self. Service üCDOT Su. SS (Supplier Self Service) Portal https: //www. codot. gov/business/procurement-and-contractservices/cdot-supplier-information üRocky Mountain E-Purchasing System http: //www. rockymountainbidsystem. com/ üBid. Express (Bid. X) https: //www. bidx. com/co/main For more information, see the State Purchasing & Contracts Office website https: //www. colorado. gov/osc/solicitations

Sole Source Must meet both of these conditions: • Only 1 product or service meets our needs AND • Only 1 source can provide that product or service

Exceptions • No state funds are expended • Revenue-producing • Legislative or judicial branch • Interagency/Intergovernmental • Public printing (Article 109) • Resale • Grant-specified • Law-specified • A&E, land surveyors, or industrial hygienists

Commitment Documents Commitment documents are state purchase orders or state contracts. • Purchase orders are required for purchase of goods or services greater than $5, 000. • State Contracts are required for purchase of services greater than $100, 000.

Terms and Conditions • The State’s terms and conditions are provided in State purchase orders and contracts. • Terms from vendors that are problematic for the State include indemnification, limitations of liability, and choice of law. • Vendor Agreements are not ideal.

Communication With Vendors Why limit communication? • Maintain the integrity of the procurement process • Ensure fair and equitable treatment of all vendors • Avoid perception of giving an advantage

Communication With Vendors Conflicts of Interest • The potential for a conflict can arise in the procurement process • Agencies may require conflict of interest disclosures from bidders

Communication With Vendors Requests for Information (RFI) • May be issued to gain information from vendors in a transparent, inclusive way. • Posted publicly. • Not a solicitation, a vendor is not chosen

Questions? Cindy Lombardi State Purchasing & Contracts Office https: //www. colorado. gov/pacific/osc/spo

Procurement Modernization Town Hall Meeting August 15, 2016

It’s been how long!?

It’s been how long!?

It’s been how long!?

It’s been how long!?

It’s been how long!?

Procurement Code Adopted • Colorado Procurement Code established in 1982 • Based on 1979 American Bar Association (ABA) model procurement code • No comprehensive review/update in more than 34 years

What’s the problem?

What’s the problem?

What’s the problem?

What’s the problem?

What’s the solution? • DPA led internal review of Procurement Code and Rules • Procurement professionals from many State agencies examined each section and identified problems and opportunities • Identified areas for potential changes • Need stakeholder input to make recommendations to the General Assembly

Where do we start?

Where do we start?

Where do we start?

Where do we start?

Where do we start?

Where do we start?

Purpose of the Code The Code exists to help keep the public trust, promote fair competition, make efficient use of taxpayer dollars, and allow the State to effectively do the people’s business.

House Bill 1451 Directed DPA to solicit input from: • Vendors • Business organizations • Nonprofit organizations • Labor organizations • Taxpayer advocacy organizations • Legal professionals • State employees Submit recommendations to General Assembly

Opportunities • General updates and clean-up • Application of the Code • Contracts • Confidentiality • Ethics • Training • Market research • Administrative remedies • Cooperative purchasing

General Updates and Clean-up The Procurement Code should be easy to read, understand, and follow • Make definitions simple and consistent • Use modern terminology • Use consistent dates and timeframes • Simplify processes (reporting) • Align requirements for grants with new Federal rules • Reorganize/relocate sections for ease of use

Application of the Code • The purpose of the Procurement Code is to establish a process that is efficient, fair, and competitive, NOT to create bureaucracy. • The rules should make sense for how things work in the real world

Contracts • Update the Contract Management System (CMS) to focus more on contract compliance rather than reporting • In contract disputes, allow for progressive discipline rather than heavy-handed punishment • Need to clarify terms and conditions to reduce contract negotiation delays

Confidentiality • Most procurement documents are public record • Clarify the process of identifying and protecting confidential vendor information and trade secrets in documents given to the State

Ethics • State Procurement professionals are bound by a code of ethics, but the Procurement Code does not explicitly establish ethical requirements for other persons involved in the procurement process (end users, vendors, management, etc. )

Training • There is not an established training program for State employees or vendors who wish to do business with the State.

Market Research • Update and clarify appropriate processes for State agencies to conduct market research, including engaging vendors through the Request for Information (RFI) process

Administrative Remedies • Clarify the protest and appeals process to ensure it is consistent and fair • Adjust the process to incentivize administrative remedies over litigation

Cooperative Purchasing • Provide flexibility to State agencies to participate in joint procurements with other public entities

We want your feedback Procurement Modernization Initiative Website: https: //www. colorado. gov/osc/pmi Send questions, comments, and ideas to: SOC_Procurement@state. co. us