Ashby Procurement Process Recommendations

1. Ashby Procurement Process Recommendations Prepared by: Ashby Citizens’ Advisory Committee on Procurement

2. Citizens’ Advisory Committee • From a letter to selectmen from Alan Pease, James Hargraves, Rebecca Walsh dated March 19, 2008: “We request the Selectmen appoint a committee of citizens to review the process and procedures involved with the purchase of the fire truck. That the committee report back to the Selectmen identifying weaknesses in the purchase process and recommending changes in the purchase process to make it less subject to failure. We request the committee be allowed to discuss the process and procedures with relevant personnel. That the committee be allowed to consult with Town Counsel at the discretion of the Town Administrator. That the report be distributed to the public.” • The Committee was appointed and convened for its first meeting on 4/9/08 and consists of the following: • John Vogt, Co-chairman • Ken Brown, Co-chairman • Amy Redder, Recording Secretary • Nancy Chew • Dick Catalini • Matt Peeler • Alan Ewald

3. Committee Mission • “To review current procurement process, identify deficiencies, and recommend changes to make it less subject to failure.” • The Committee was NOT convened to determine or assign blame for the Fire Truck procurement and has sought to avoid doing so throughout the process.

4. Committee Process • Discovery • The Committee has met with the Selectmen, the Town Administrator, the Town Accountant, the Fire Chief and other members of the Fire Department, and other past and present town employees and officers to review the history of the Fire Truck Procurement, as well as other procurements and the processes surrounding procurements • Assessment • The Committee has assessed information received during the Discovery process and defined key findings. • Solution Generation • The Committee has discussed and organized general recommendations to address perceived deficiencies, gaps, errors and omissions in current process while attempting to retain positive elements and provide enhancements. • The Committee has broken down steps to the procurement process and defined recommendations within those steps. • As “Advisors” to the town on procurement process, we recognize that we are not experts in numerous aspects of state law, specific types of procurements, and department specific needs and requirements. As a result, we leave deeper definition of certain process elements to the pertinent town officers and administrators. • Review • The Committee has reviewed elements of our recommendations with certain process owners to ensure the accuracy of our understandings and to test the viability of certain ideas.

5. Committee Process • Public meetings were held on: • 4/9, 4/16, 4/30, 5/14, 5/21, 6/4, 6/18, 7/23, 8/21, 9/10, 10/1, and 10/8 • All meeting minutes have been published on the Ashby town website

6. Key Findings and Defined Needs • Lack of clear understanding of existing state and town specific procurement process: • Lack of clarity around 30B and 41 • Confusion around prepayment requirements • No formal training in an environment of changing players • No clearly defined process owner(s) • No current certified procurement expert • Lack of clarity around certification requirements and process • Lack of written, specific procurement policy • Lack of sequential steps to process procurements • Lack of clear decision making authority • Need for clarity around any engagement of Legal • Cost carrying more weight than legal protection

7. Key Findings and Defined Needs • Need for centralization of the process, associated documents, and audit trail • Lack of internal Audit process • Need for clarity of roles: • Procurement Selectman • CPO • Backup CPO • Department Head • Town Accountant • Need for clarity around specification development process • Lack of a standard bid form • Need for Supplier qualifications • Technical, business, service • Need for clear Bond acceptance standards • Need for irrefutable acceptance criteria • Need for better control of Terms and Conditions • Erratic means of confirming we’ve received what we bought • The entire process lacks clear accountability

8. General Recommendations • Recommendations of education for those who are involved in procurement (town admin., dept. heads, selectmen, as elected, and Accountant/Treasurer) • Educate • Implement • Review • Procurement Process Audit • Should be a written policy (tiered by size, and integrated w/30B) • Should be a Schedule of Authorizations (*including swearing in/code of conduct/statement of accountability) • Need to determine when Town Counsel is engaged to review purchase activity • Centralization of procurement process and the administration of procurements (the person with the bottom line of accountability) • “Chief Procurement Officer” - CPO

9. General Recommendations(continued) • Chief Procurement Office (continued) • Determine required certifications • Determine certification frequencies • COMMITTEE RECOMMENDATIONS: • CPO should be the Town Administrator • Town Accountant should be comparably certified to act as assistant or backup CPO 5. Procurement that triggers regulations of 30B requires admin. oversight and an appropriately formed committee to manage all aspects of the procurement • Procurement Committee • Can potentially consist of Dept. Head, Town Admin./CPO, the Selectman charged with Procurement, (ALL selectmen, over a certain amount), legal counsel, and other citizens

10. General Recommendations(continued) 5. (Continued) • Create a purchase binder/folder to contain applicable documentation (“Core documents”)necessary to PROVE compliance to the language of 30B in the event the town is audited, AND to prove compliance with the town’s own procurement process. • Establish milestone review of Binder Core Documents before Pre-contract, Contract and Post-contract phases

11. Procurement Process RecommendationsUsing Contract Phases Procurement is needed Pre-Contract Phase Contract Phase Post-Contract Phase Procurement completed

12. Procurement Process RecommendationsUsing Contract Phases PRE-CONTRACT PHASE • Committee development • CPO will recommend a committee member list for approval by BOS • Specification Development • Determine if there are multiple sources that can meet specifications • Determine minimum number of bids required • Determine if this procurement can be done off a statewide bid list • Determine if it is appropriate to engage outside resources for this procurement • Ashby should contemplate development of an approved Standard Bid format to avoid the need to engage Legal resources too frequently. Selected Bid Format should: • Define early terms and conditions which would be incorporated into final contract • Define bid criteria weighting (reputation vs. value) Start Pre-Contract Phase Create Committee Develop Specification

13. PRE-CONTRACT PHASE(Continued) • Determine Business Criteria (not just for the health of the contractor, but also Bond Holder) • Performance Bond requirements • Create Bond acceptance standards • Recommend that Ashby pre-establishes Bond/Vendor relationships and recertification process • Need for a minimum number of compliant bids, or Procurement Committee needs to go back and “tweak” specs • Determine if a custom contract is required • Determine Bid Acceptance Criteria and Process, and the Procurement Committee members’ roles in that process Determine Business Criteria Determine Bond Requirements Determine Acceptance Criteria

14. PRE-CONTRACT PHASE(Continued) • (Continued) • Determine who has authority to bind contractually • Generate contract sign-off/approval sheet (a list of signatures, similar to a building permit process) including all applicable procurement committee members (CPO, dept. head, procurement selectman, all selectmen, town accountant) • Ensure Pre-contract/Contract Review prior to authorization for payment by Accountant • Process continuation when above proof of applicable sign offs/ approvals are delivered to accountant • Determine if a specific procurement qualifies for any form of waivers to the written procurement criteria and process • If so, justify why, by whom, and by what body of order • If so, evaluate what the resultant implications are Generate Sign-off Sheet Determine If Waivers Allowed Create Procurement Binder/Folder

15. PRE-CONTRACT PHASE(Continued) • No Prepayment…Need clear understanding of Massachusetts General Laws 30B and 41, and reconciliation between law and practice Hold Pre-Contract Milestone Review Move To Contract Phase

16. CONTRACT PHASE Start Contract Phase Receive and Review Bids • Generate General Contract Terms and Conditions • Ashby controls terms and conditions • Ashby controls contract • Contract Development/Negotiations* • Generic contract – no/minimal change (doesn’t require legal review) • “Material” change (requires legal review) • Custom contract - legal involvement mandatory • Initial draft is written by “Best Qualified” (*Ensure current Town Counsel is best equipped to support this process) Return to Develop Specification Acceptable Bid? No Yes Generate Contract Terms And Conditions Negotiate Contract Legal Review of Contract

17. CONTRACT PHASE, cont. 3. Bond (if applicable) should be received prior to execution of contract, reviewed for authenticity/ enforceability 4. Hold milestone review prior to executing contract Receive and Review Bond, if required Hold Contract Phase Milestone Review Execute Contract Move To Post-Contract Phase

18. POST-CONTRACT PHASE Start Post-Contract Phase • “Delivery Acceptance Confirmation” (we’ve actually received exactly what we ordered) • Appropriate form of Confirmation to be determined by Committee • Finalize Procurement Binder and retain in an appropriate centralized location Confirm Delivery Hold Post-Contract Milestone Review Issue Payment Finalize Procurement Binder Archive Procurement Binder

19. Next Steps • Take Action • Create Team to review and implement recommendations as submitted • Suggested Team members • Procurement Selectman • Town Administrator • Town Accountant • Others as determined by these three