Procurement Overview Joe Damico Director Virginia Governmental Structure

Procurement Overview Joe Damico, Director

Virginia Governmental Structure State Government Local Government • 245 state public bodies • 960+ local and regional public bodies cities, counties, towns, plus schools, airports, districts, authorities, commissions… (agencies/ covered institutions/authorities) • 100, 000+ employees • 345, 000+ employees • Some centralized authority and/or oversight with delegation • No centralized authority - independent buying authority • Decentralized authority • Central electronic procurement system & 69 different ERP/financial systems • Approximately $6. 5 billion annual spend • Variety of systems • Approximately $5 billion annual spend Suppliers • 90, 000+ suppliers interested in doing business with Commonwealth of Virginia public bodies • Mix of local, state, national, international

Review of Authority and Responsibility

State Public Bodies Non Technology Goods and Services Code and Rules DGS/DPS Responsibility Authority and Responsibility • Virginia Public Procurement Act (VPPA) & Appropriation Act • Administrative executive orders and Directives • Department of General Services (DGS)/Division of Purchases and Supply (DPS) • Implement regulations (Agency Procurement and Surplus Property Manual – APSPM and Vendors Manual) • Procure goods and services • Establish statewide contracts – 440+ • Training /certification • Contracting associate – 1, 420 • Contracting officer – 704 • Contracting master – 47 • Delegation of goods and nonprofessional services to agencies

State Public Bodies Technology Goods and Services Code and Rules VITA responsibility Authority and Responsibility • Virginia Public Procurement Act (VPPA) & Appropriation Act • Administrative executive orders and directives • Virginia Information Technologies Agency (VITA) • Develop IT policies, standards, and guidelines (IT Procurement Manual: Buy IT) • Procure IT goods and services • Establish IT statewide contracts • Delegation of IT goods and services to agencies

Professional Services as defined in the VPPA • Accounting • Dentistry • Actuarial Services • Medicine • Architecture • Optometry • Land Surveying • Pharmacy • Landscape architecture • Professional Engineering • Law • Economist procured by the State Corporation Commission

State Public Bodies Professional Services accounting, actuarial services, law, dentistry, medicine, optometry, and pharmacy Code and Rules Individual Agency Authority and Responsibility • Virginia Public Procurement Act (VPPA) & Appropriation Act • Administrative executive orders and directives • Each individual agency • Procure professional services using Competitive Negotiation (Request for Proposals) • May establish purchase procedures that allow for contracts without requiring competitive negotiation up to $80, 000

State Public Bodies Construction & related Professional Services architecture, land surveying, landscape architecture, and professional engineering Code and Rules Authority and Responsibility • Virginia Public Procurement Act (VPPA) & Appropriation Act • Administrative executive orders and directives • DGS/Division of Engineering and Building (DEB) • Each individual agency DGS/DEB Responsibility • Establish standards and procedures for construction related professional services (Construction and Professional Services Manual – CPSM) • Building Code Official Individual Agency Authority • Procure construction and construction related Professional services

State Public Bodies Highway Construction Code and Rules VDOT responsibility Authority and Responsibility • Virginia Public Procurement Act (VPPA) & Appropriation Act • Administrative Executive Orders and Directives • Virginia Department of Transportation (VDOT) • Procure Highway Construction • Road and Bridges

Covered Institutions Code and Rules Authority and Responsibility • Rules Governing Procurement of Goods, Services, Insurance, and Construction, and Appropriation Act • Some Executive Orders and Directives • Individual College or University Management Agreement (Tier III) or Memorandum of Understanding (Tier II) varying authority • Tier III (all of the areas) • • Professional Services Non Technology goods & services Construction and related professional services • Tier II (only selected areas) • • Professional Services Non Technology goods & services Construction and related professional services

Local Public Bodies Follow the VPPA • Virginia Public Procurement Act (VPPA)* • County Ordinances and Directives* • Individual Local Public body authority (e. g. school board, water authority, administration) Exempt from the VPPA as permitted in § 2. 2 -4343 • County Ordinances and Directives Ordinances must incorporate select mandatory provisions of the VPPA • Individual Local Public body authority (e. g. school board, water authority, administration) *Last survey indicates the split is approximately 50% VPPA and 50% Ordinances

Procurement Methods

General Methods of Procurement • Competitive Sealed Bidding – Invitation for Bids Method for acquiring goods, services and construction for public use in which the award is made to the lowest responsive and responsible bidder, based solely on the specifications set forth in the invitation for bid (IFB). No discussion or negotiations • Competitive Negotiation – Request of Proposals Method for acquiring goods and services for public use in which the public issues a written Request for Proposal (RFP) indicating in general terms that which is sought and specifies the factors (evaluation criteria) that will be used in evaluating proposals. Negotiations shall be conducted and awarded to the highest ranking Offeror(s). This allows the Commonwealth to achieve Best Value • Small Purchase Informal purchase procedures not requiring competitive sealed bids or competitive negotiation The policies associated with the methods vary based on the rules and the responsible authority

Procurement Methods of Procurement Transportation -related construction (State and Local) Professional Services (State and Local) Small Purchases $25 K Up to 80 K* Competitive Sealed Bidding $25 k+ Competitive Negotiation $25 k+ $80 K + Goods and Non Goods, professional Professional and non Services professional (State and Local) Services (Covered Institutions) Up to $100 K* Up to $50 K $100 K + $50 K + *VPPA Requires state public bodies to solicit at least 4 bidders/offerors $30 k and over

Mandatory Sources for State Public Bodies • Virginia Correctional Enterprises (VCE) • Department for the Blind & Vision Impaired (DBVI) • VITA services and mandatory contracts • DGS’ o Office of Graphics Communications o Office of Fleet Management o Virginia Distribution Center o mandatory state contracts Restructured Colleges/Universities and Local Public Bodies not subject to mandatory sources but may use.

Small Business Advancement (EO 20) Enhancement Plan for State Public Bodies Set Asides • Purchases under $10, 000 shall be set aside for award to Department of Small Business & Supplier Diversity (DSBSD)-Certified Micro Businesses (Designation within small) when the price Quoted is fair and reasonable • Procurements $10, 000 up to and including $100, 000, for goods and nonprofessional services must be set aside for award to DSBSD-Certified Small businesses and up to $50, 000 for Professional Services • Price must be fair and reasonable and within the agency budget Small Business Subcontracting plans • Must include in all solicitations exceeding $100, 000 • Vendors must include in bid to be considered responsive and eligible for award • Vendors must include in proposal and will be an evaluation criterion

Small Businesses and Procurement State – Non. Technology G/S State – Technology Covered G/S Institutions Local Government $0 -10 K: Set aside for DSBSD micro businesses* Adopt own policies $10 k-100 k: Set aside for DSBSD small businesses* >$100 K: Small business subcontracting plan >$100 K: allows award to be made to a reasonably priced or ranked DSBSD certified business that is other than the lowest price bidder or highest ranked offerer. Varies by Institution * Micro and small businesses shall have a price preference over noncertified businesses as long as the bid of the certified small business does not exceed the low bid by more than 5%. (2017, SB 1334)

Construction Procurement Methods

Methods of Construction Procurement Design-Bid-Build • Traditional method • Owner engages A/E • A/E Designs facility • Owner engages Contractor through Competitive Sealed Bidding • Contractor Constructs Facility

Methods of Construction Procurement Construction Management at Risk • Utilized for Complex Projects • Owner engages A/E to design facility • Owner engages Construction Manager through 2 step competitive negotiation • Construction Manager provides preconstruction services concurrent with design then constructs facility

Methods of Construction Procurement Design-Build • Utilized for relatively simple projects with easily defined requirements • Selection is a 2 step RFQ/RFP process • Agency contracts with a D-B Contractor to design and construction project for a fixed price based upon a defined set of criteria

What is Complex? Complex Project: a construction project that includes one or more of the following significant components: • • difficult site location, unique equipment, specialized building systems, multifaceted program, accelerated schedule, historic designation, or intricate phasing or some other aspect that makes competitive sealed bidding not practical.

State Public Bodies, Covered Institutions, & Local Public Bodies - Construction Management (CM) & Design-Build (D-B) Code and Rules Authority and Responsibility Effective July 1, 2017 • Chapter 43. 1. Construction Management and Design-Build Contracting (§ 2. 2 -4378 et seq. ) and Appropriation Act • State Public Bodies • Covered Institutions • Local Public Bodies DGS/DEB – oversight and reporting

Construction Management (CM) & Design Build (DB) • Procedures • Procurement Method Review • Reporting

CM/DB Procedures

State Public Bodies- Procedures Follow DGS Policy – Construction and Professional Services Manual incorporates Ch. 43. 1 and complies with the Secretary of Administration Procedures

Covered Institutions Procedures • Submit proposed procedures for Design-Build and Construction Management at Risk to DGS. • Procedures must comply with Ch. 43. 1 and the Secretary of Administration Procedures • DGS will review & make recommendations to the institution. • Institutions submit procedures adopted by the Board of Visitors to DGS for its records and for use in project procurement reviews.

Other Public Bodies- Procedures • Local Public Bodies must develop procedures consistent with Ch. 43. 1 and the Secretary of Administration Procedures • These procedures shall be adopted by the entity’s governing body.

CM/DB Procurement Method Review

State Public Bodies and Covered Institutions Procurement DGS Review Of Proposed CM & DB Procurements • Regardless of fund source • Includes state chartered authorities, boards, and commissions. • DGS can concur or not with the selected procurement method

Other Public Bodies- Procurement DGS does not review other public bodies proposed CM & DB Procurement method

CM & DB Procurement Review & Evaluation https: //dgs. virginia. gov/engineering-and-buildings/special-reports-and-procedures/cm-and-db-procurementevaluation/ 2018 -10 -17 2019 State Public Body 123 -12345 -000 Example purposes only $30, 000 Download CM Yes CM

Key Things to Remember for State Public Bodies and Covered Institutions • DGS recommendations, positive or negative, must be placed in project file. • Agency must report the procurement method actually utilized to DGS. • All information is public record and will be posted on DEB website.

CM/DB Reporting

Reporting Requirements Report #1 Procurement Method Selection: Due: 12/1/2018 DGS Reports data from our review of State Public Bodies & Covered Institution Procurement Method Selection Report will include: • number of projects reviewed • identity of the state public body or covered institution and a description of each such project • estimated cost of the project at the time of the Department's review • recommendation made by the Department concerning the proposed procurement method • final procurement method used by the state public body or covered institution

Reporting Requirements Report #2 Completed Capital Projects in excess of $2 M: Due: 12/1/2018 *First set of data will be available in 2021 DGS compiles annual report from data reported by all Public Bodies for all completed capital projects Report will include: • • • procurement method utilized project budget actual project cost expected timeline actual completion time any post-project issues

Reporting Requirements • Data will be reported to DGS through utilization of e. VA • DGS will submit the reports to the Governor and Chairmen of the House Committee on Appropriations and the Senate Committee on Finance

e. VA

Commonwealth's central electronic procurement system Implemented in 2001 - Virginia's online, central electronic procurement system is a web-based purchasing system that allows state agencies, colleges, universities and many local governments to conduct all purchasing and sourcing activities for goods and services

Commonwealth's central electronic procurement system Provides Public Bodies with: • Sourcing and contracting functionality, public posting and notification to suppliers of business opportunities, bid openings, solicitation documents, bid meeting notes, award decisions • Data sharing (includes full electronic integration (real time and batch) to multiple ERP/Financial systems) Provides for suppliers: • For Suppliers offers registration, account management, notification and access to business opportunities, online Bidding and Quick Quote response, reporting of sub-contractor payments, catalog publishing, transparency spend reports, and collaboration with through B 2 B connect

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