Unit 1 Introduction to Procurement for Public Housing

Unit 1 Introduction to Procurement for Public Housing Authorities Getting Started: Basic Administrative Requirements

2 Purpose of this training series • Provide a basic review of proper procurement methods and procedures for Public Housing Agencies (PHAs) according to Federal standards • Prevent some common mistakes, for e. g. , ▫ ▫ Not developing an independent cost estimate Not performing a cost or price analysis Mixing procurement types Negotiating with the lowest bidder on sealed bid contracts ▫ Breaking contracts/purchases down to circumvent regulations ▫ Expanding contracts after award with additional, nonrelated work

3 Learning Objectives • Identify basic procurement administrative requirements • Identify important roles and responsibilities during the procurement process • Understand basic procurement documentation requirements • Identify conflicts of interests that may be present during the procurement process

4 Procurement Regulations and Guidance • PHAs shall follow 24 CFR 85. 36 when procuring property or services with grant funds (e. g. , Capital or Operating Funds) • PHA’s Procurement Policy & Procedures ▫ Sets directives & administrative responsibilities • Procurement Handbook for PHAs 7460. 8 REV 2 dated March 2007 ▫ Provides administrative & managerial guidance • Federal contract provisions (24 CFR 85. 36(i) and bonding requirements (24 CFR 85. 36(h)) • Additional related requirements: ▫ Contracting with small minority firms, women’s business enterprises and labor surplus areas; ▫ Section 3 (24 CFR 135), Mixed Finance (24 CFR 941 Subpart F), Consortia and Joint Ventures (24 CFR 943); Contracting with Resident Owned Businesses (24 CFR 963); ▫ PIH Notices and other guidance; and ▫ State and local laws.

5 Administrative Requirements • PHAs must use their own procurement policy and procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards of 24 CFR 85. 36 • Maintain a contract administration system • Maintain a written Code of Standards of conduct governing performance in the award and administration of contracts

6 Administrative Requirements (cont. ) • Make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement • Maintain records sufficient to detail the significant history of a procurement • PHA will be solely responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements ▫ Including source evaluations, protests, disputes and claims • Have protest procedures to handle and resolve disputes relating to their procurements

7 Procurement Policy and Procedures • • ▫ ▫ Ensure that a PHA acts legally and with integrity in its daily operations by providing regulatory and administrative oversight of all procurement activities The Policy… Adopted by the Board of Commissioners per Annual Contributions Contract Identifies specific regulatory aspects of the procurement process The Procedures… Implemented by the Executive Director Standard Operating Procedures that implement the policy

8 Procurement Roles and Responsibilities Board of Commissioners Executive Director (or Contracting Officer) Contract Administration System • Provides general oversight of procurement activities • Not directly involved in vendor/contractor selection • May approve contracts/agreements which exceed a threshold or address a condition specifically outlined under the PHA’s Procurement Procedures • Has full authority to procure and execute contracts on behalf of the PHA • May delegate authority to staff if approved by the Board per official resolution • Delegations must specify monetary limits & types of actions allowed • Internal coordination, including staff, to administer procurement activities • Ensures contractor compliance

9 Roles and Responsibilities Board of Commissioners • Approves the policy and delegates to its agents the development and maintenance of procedures • Cannot have a direct financial gain from any of the operational activities at the PHA • Ensures Conflicts of Interest do not occur • Monitors procurement activities and other undertakings via regular meetings per established procedures • In approving contracts/agreements, follows threshold limits noted in the Procurement Procedures • Has the right to inquire and follow-up on administrative inconsistencies or wrongdoing to prevent fraud and mismanagement at the PHA

10 Roles and Responsibilities Executive Director • Appointed by the Board to conduct procurement activity as the Contracting Officer • Any delegations must identify the specific actions per monetary limits and be approved by the Board • If authorized: • May be designated to obligate funds • May execute contracts, purchase orders, intergovernmental agreements and change orders • Analyzes bids and proposals to ensure fair and equitable treatment for all parties • May grant and/or deny protests in writing

11 Roles and Responsibilities Contract Administration System • Relates to the staff assignment and internal coordination to administer all procurement activities • Ensures that contractors hired by PHAs perform in accordance with the terms, conditions, and specifications • Applies to all contracts awarded (formal or not) under: ▫ Small Purchase Procedures (SPP) ▫ Invitation for Bids (IFB) ▫ Request for Proposals (RFP) ▫ Request for Qualifications (RFQ)

12 Documentation • Each significant action of every procurement must be properly documented by the PHA. • Per § 85. 36(b)(9), the records maintained must be sufficient to detail the significant history of a procurement, including: 1. Rationale for the method of procurement used 2. Selection of contract type 3. Selection/rejection of contractor 4. Basis for contract price • Per § 85. 42, PHAs shall keep records a minimum of 3 years from the date of the last expenditure. • Per § 85. 36(i)(11), contractors shall keep records 3 years after final payment is made.

13 Documentation— Sample of records. . . Think: Why, when, how and where the money is spent • • Independent cost estimate Rationale for procurement method employed for each procurement action Selection of contract type for other than a typical procurement Contractor’s selection or rejection • • • Abstract of offers made Copies of newspaper advertisements List of vendors Calculation of low bid Detail of negotiations Price or Cost Analysis

14 Remember… • Maintain written Procurement Policies and Procedures • Maintain a written Code of Standards • Maintain a contract administration system • Document significant procurement actions

15 References • 24 CFR 85. 36(b) • 24 CFR 85. 42(e) • PHA Procurement Handbook 7460. 8 REV 2 ▫ Chapter/Section 3. 3