Florida Purchasing 101 Training October 21, 2010

1. Florida Purchasing 101 Training October 21, 2010

2. Course Objective Course Objective Today’s class: • Is intended for state entities and local governments purchasing under Section 287.057, Florida Statutes (F.S.). • Recognizes that fair and open competition is the basic tenet of public procurement. • Integrates the state’s procedures for best practices in the procurement of commodities and services. • Applies state laws, rules, and suggested practices to everyday purchases.

3. Course Objective • Per Florida Attorney General Opinion #78-101, an agency must have expressed or implied statutory authority to make a specific purchase • Promotional items • Client incentives • Gift cards • http://www.myfloridalegal.com/ago.nsf/Opinions/458FC3959F27499E852565930069670F

4. Purchasing Overview

5. Agenda Agenda • Basic Principles • Methods of Procurement • Purchasing Requirements • Odds and Ends • Wrap-Up / Contact Us

6. Purchasing Authority Authority for the purchase of goods and services is: • Delegated to each agency from the Department of Management Services (DMS) • Chapter 287, Florida Statutes (F.S.) • Rule 60A, Florida Administrative Code (F.A.C.)

7. Purchasing Thresholds Defined in Section 287.017, F.S., as of July 1, 2010, as: • Category One - $20,000 • Category Two - $35,000 • Category Three - $65,000 • Category Four - $195,000 • Category Five - $325,000

8. Certified Business Enterprise (CBE) • The state is committed to providing equity in contracting to diverse vendors throughout Florida. • Office of Supplier Diversity (OSD) certifies vendors as certified business enterprises. • Certification as a minority-, women-owned or service-disabled veteran business enterprise gives a vendor preference in the situation of a tied bid.

9. Purchasing Best Practices Unless otherwise authorized by law, per Section 287.057 F.S.: • All purchases should have a review process including program and financial review. • Purchases exceeding Category Two must be competitively solicited and awarded by competitive sealed bidding. • In Rule 60A-1.002 F.A.C., purchases less than Category Two but above $2500 must obtain at least two quotes. • Service purchases more than $65,000 shall have legal approval. • Purchases less than $2500 must be completed using sound purchasing practices. • The best value to the state should always be considered.

10. Agenda Agenda • Basic Principles • Methods of Procurement • Purchasing Requirements • Odds and Ends • Wrap-Up / Contact Us

11. Methods of Procurement • PRIDE • RESPECT of Florida • State term contracts (STC) • State purchasing agreements (SPA) • Competitive solicitations • Alternate contract sources (ACS) • Single source • Statutory exemptions • Informal quotes • Emergency purchase

12. PRIDE Prison RehabilitativeIndustries and Diversified Enterprise • Per Sections 9.46515 (2) and (4), F.S., similar products or services of comparable price or quality found necessary for use by any state agency may not be purchased from any source other than PRIDE. • Per Chapter 283, F.S., competition is not required with the exception of printing services. • PRIDE offers a variety of products from furniture to maintenance supplies. • http://www.pride-enterprises.org/

13. RESPECT of Florida • Per Section 413.036, F.S., similar commodities or services of comparable price or quality found necessary for use by any state agency may not be purchased from any source other than RESPECT. • RESPECT works with non-profit organizations around the state who employ persons with disabilities in the production of products and services. • RESPECT is exempt from the competitive process (no quotes or solicitations necessary). • Examples of items provided under 914-000-05-R: • Office supplies • Janitorial services • Marker boards • Temporary services in the Tampa / St. Petersburg area • www.respectofflorida.org

14. State Term Contracts (STC) • Negotiated and managed by DMS Division of State Purchasing. • More than 60 contracts currently, totaling more than $2 billion in state savings annually. • Mandatory usage for state agencies and optional for OEUs. • Meets the competitive solicitation requirement of Section 287.057, F.S. • Per Rule 60A-1.043, all STC with multiple vendors providing the same product must have two quotes unless the contract expressly has other RFQ requirements. • http://dms.myflorida.com/contracts

15. Types of STC State Term Contract (STC) Quotes • Per Rule 60A-1.043, all STC with multiple vendors providing the same product must have two quotes unless the contract expressly has other RFQ requirements.

16. Alternate Contract Sources (ACS) • ACS are similar to STC, but are not mandatory. • If an agency’s ACS is cost-effective and in the best interest of the state (and allowed by the scope of the contract), DMS approves the use of the contract for all entities. • May approve the contract for a single transaction or multiple transactions • A complete listing of all ACS is available at http://dms.myflorida.com/contracts . • Agency-specific ACS are not posted online.

17. State Purchasing Agreements (SPA) • Negotiated per agency request and managed by DMS State Purchasing. • Usage cannot exceed an annual combined total of $35,000. • Not to be used to circumvent competitive processes. • http://dms.myflorida.com/contracts

18. Competitive Solicitations • Invitation to Bid (ITB) • Driven by low cost • Request for Proposal (RFP) • Used when there is a good understanding of the goods/services requested but is not solely driven by low cost. • Invitation to Negotiate (ITN) • Used when there isn’t a clear understanding of exactly how a problem should be solved and are inviting vendors to submit solutions. • The only solicitation method that allows for negotiation with vendors

19. Single Source • Per Section 287.057(5)(c), F.S., and Rule 60A-1.045, F.A C., a single source is defined as a purchase of commodities or services available only from one vendor. • For purchases less than Category Two, approval of the justification must provided to the individual agency’s purchasing office.

20. Single Source Procedures Single Source Procedures • For single source purchases exceeding Category Two, follow a separate process: • Advertised on Vendor Bid System (VBS) • PUR 7776 • Seven business days • If the purchase exceeds Category Four, DMS approval is required • PUR 7777 • Post Intent to Award on VBS • PUR 7778 • 72 business hours (excluding weekends and holidays)

21. Informal Quotes • Purchases more than $2,500 and under Category Two require at least two quotes Quotes: • Can be obtained by phone, in writing, e-mail or the MFMP eQuote tool • Should be stored for audit purposes with the purchase documents • Are awarded to the vendor with the best value for the state • i.e. the best cost for the goods/services that meet the needs of the state Request for Quote (RFQ): • Used for STC such as consulting services • IT Consulting • Management Consulting

22. Emergency Purchases • Determination • Emergency exceeding Category Two • An emergency purchase must pose immediate danger or risk to public health or safety • Certification • For emergency purchases, a notarized certification must be provided to DMS from an agency head or designee within 30 days • Procedure • PUR 7800 Notice of Emergency Purchase to DMS • Governor declares “State of Emergency,” typically suspends all procurement rules directly related to emergency efforts

23. Statutory Exemptions • Section 287.057 (5)(f), F.S., includes services exempt from competition including, but not limited to: • Artistic services • Lectures by individuals (not training services) • Legal services • Government entity • Mental health / drug abuse prevention programs • Family placement services • Contracts pursuant to Section 337.11

24. Agenda Agenda • Basic Principles • Methods of Procurement • Purchasing Requirements • Odds and Ends • Wrap-Up / Contact Us

25. Purchasing Requirements • Purchasing requirements as defined by Statute, Rule and Memorandum include the following: • Vehicle purchases • Recycled content • Public printing • Advance payment • Blanket purchase order (BPO)

26. Vehicle Purchase Requirements • Per Chapter 287, F.S.: • DMS Form MP 6301 • Statewide Fleet Approver • Justification • Acknowledgment of order from the dealer • Budget authority • Approximately 75 percent of all new vehicles must be alternative fuel vehicles • Not including hybrids • Leasing- more than 30 days • Rental Vehicle STC

27. Recycled Content Requirements • Per Section 287.045, F.S.: • Paper must contain 65 percent recycled content. • Office paper STC line item catalog in MFMP. • MFMP displays a recycled indicator on all recycled products in line item catalogs.

28. Public Printing • Per Section 283.33, F.S.: • Recycled paper • Purchases exceeding Category Two must be competitively solicited (including PRIDE). • Pre-production proofs are required.

29. Advance Payment Requirements • Per Section 215.422 (14), F.S.: • Justification is required. • DFS Bureau of Accounting & Auditing requires approval for advanced payment purchases exceeding Category Two. • MFMP allows you to indicate a purchase marked for advanced purchase and to select an agency user to be notified.

30. Blanket Purchase Orders (BPO) • In accordance with Memorandum No. 3 (2008-09): • Blanket Purchase Orders (BPO) are purchase orders issued to one vendor in which multiple purchases can be made for a specific period of time. • BPOs for purchases made from purchasing agreements or STC must include a scope of work and a quantifiable, measurable and verifiable unit of deliverables. • When setting up a BPO, be mindful of how you will subsequently receive and pay from this order. • BPO should not exceed Category Two without being competitively solicited. • For large BPO completed in MFMP, set up a contract or master agreement.

31. BPO Requirements con’t • BPOs must also identify: • All necessary organizational and accounting codes • Vendor name • Items or types of items authorized for purchase • Item prices or a reference to how prices will be established at the time of purchase • Authorized user(s), by name and/or title • Contract term • Maximum total dollar amount of purchases authorized during the term

32. Agenda Agenda • Basic Principles • Methods of Procurement • Purchasing Requirements • Odds and Ends • Wrap-Up / Contact Us

33. Restrictions from Expenditures • Congratulatory / condolence cards • Plants, flowers, pictures • Entertainment • Refreshments • Convenience appliances • When purchasing for the convenience of employees • Includes heaters, refrigerators, microwaves • Items not in accordance with state, federal or local laws • http://www.myfloridacfo.com/aadir/reference_guide/

34. Commodity Codes • Commodity codes are 13-digit codes • The class and group are the first six digits • Commodity codes for services begin with a “9” • Commodity Codes in VBS determine what vendors receive e-mail notifications. • SPURSView: http://www.myflorida.com/aaps/spurs/spurs.main_menu_form • Commodity Code search: http://dms.myflorida.com/content/search?SearchText=commodity+codes

35. Common Mistakes • Leaving payment terms out of the procurement • A statement of work that is unclear or not defined • Not following purchasing laws and rules • Preventing the perception of partiality to the vendor community • Not focusing on getting the best price for the right product/service at the right time • Signing agreements without consulting your purchasing office first • PCard purchases exceeding Category Two • After-the-fact purchases

36. Resources • DMS Division of State Purchasing • http://dms.MyFlorida.com/contracts • purchasingcustomerservice@dms.MyFlorida.com • (850) 488-8440 • MyFloridaMarketPlace (MFMP) • www.dms.MyFlorida.com/mfmp • www.dms.MyFlorida.com/buyertoolkit • MyFloridaMarketPlace@dms.MyFlorida.com • Office of Supplier Diversity (OSD) • http://dms.MyFlorida.com/osd • OSDHelp@dms.MyFlorida.com

37. Resources • State expenditure reference guide • http://www.myfloridacfo.com/aadir/reference_guide/ • DMS STC • http://dms.MyFlorida.com/contracts • MFMP Punchout catalogs • https://dms.MyFlorida.com/mfmp_punchout_catalogs • CFO Memorandum NO. 06 (09-10) – Contract Document Requirements • http://www.myfloridacfo.com/aadir/cm0/cmmaster0910.htm

38. Agenda Agenda • Basic Principles • Methods of Procurement • Purchasing Requirements • Odds and Ends • Wrap-Up / Contact Us

39. Contact Us

40. Wrap-Up Questions?