Administration

Board of Trustees Policy

SUBJECT:

Procurement Policies

NUMBER:
5.8
DATE:
June 20, 2016
SUPERSEDES:
October 24, 2011
January 18, 2005
September 2004

Policy

Authority and Responsibility for Purchasing Goods and Services

  1. This procurement policy is intended to comply with all applicable laws and procurement regulations of the Commonwealth of Pennsylvania, specifically those outlined in Chapter 35 of the Pennsylvania Code and the Community College Act of 1963, as well as those set forth by the OMB Uniform Guidance: Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Omni/Super Circular” 2C.F.R.200), when applicable.
  2. A Procurement Director shall be designated by the Board of Trustees for the duties and purposes listed below, but in all cases, the President of the College or Vice President for Finance and Administration may act in such capacity.
  3. The Procurement Director is responsible for enforcing the College’s procurement policies.
  4. The Vice President for Finance and Administration will establish and the Procurement Director will maintain procedures to provide for the efficient and responsible conduct of all procurement activities.
  5. Authority to enter into purchase contracts or, in any way, obligate the College for procurement indebtedness is subject to the following approval structure.
    • College Buyer - purchases up to $5,000
    • College Procurement Director and other Vice Presidents - purchases up to $50,000
    • Vice President of Finance and Administration - purchases up to $100,000
    • College President - purchases up to $250,000
    • Board of Trustees - all goods, equipment or services in excess of $250,000

These approval levels shall apply regardless of the solicitation method used (sealed bid, request for proposals, etc.).

  1. All single acquisitions of goods, equipment or services of $100,000 or greater must be brought to the Board of Trustees as an informational item at the next available meeting.  Additionally at the first Board meeting after the conclusion of the fiscal year, the Board shall be provided with a list of all vendors with which the college spent $100,000 or more cumulatively during the prior fiscal year.
  2. Because of their significance to the College and the responsibilities of the Board of Trustees, the following professional services, regardless of cost, require Board approval at the time a change in provider is considered or a new contract for services is required: Public Accounting Services, Banking Services, Legal Services, Insurance Broker Services, Investment Management Services, AND the engagement of any professional service provider with an annual expense of two-hundred fifty thousand dollars ($250,000) or greater.
  3. Any negotiations by an unauthorized individual will not be honored by the College, and the individual will assume a personal obligation to the vendor. Firms ordinarily doing business with the College will be advised that all purchases chargeable to the College must be authorized by an official College purchase order or contract signed by an authorized individual. Exclusive of the petty cash procedures, the College will not reimburse officers or employees for the cost of any such purchases on behalf of the College, unless previous arrangements to that end have been made.
  4. All purchases must be made for the purpose of College activities. Purchasing any goods or services for personal use is prohibited.

Code of Conduct

The Procurement Office staff, as stewards of the College’s resources, should have a strong sense of professional ethics and will abide by the Code of Ethics published by the National Association of Educational Procurement (NAEP).  (http://www.naepnet.org)

Gifts, Gratuities and Favors

College employees, officers and agents may not solicit or accept any gift, gratuity, favor or anything of monetary value from contractors, potential contractors, and parties to sub-agreements, vendors, or parties to sub-agreements that are, or appear to be, given to influence procurement of goods or services.

Unsolicited gifts or gratuities that are valued under one hundred ($100.00) dollars may be accepted.  Acceptable items may include: 

    • Promotional items such as pens, pencils, tablets, cups, mouse pads, etc… 
    • Items serving as tokens of appreciation such as food stuffs such as candy, baked goods, and other miscellaneous items of nominal value. 

In the event that a conflict of interest or appearance of same exists, the employee should report the 
conflict to his/her supervisor.  

Purchases From Related Parties

  1. The Trustees of Montgomery County Community College have adopted policies establishing comprehensive guidelines for dealing with conflicts of interest on the part of trustees, faculty, administrators and support staff of the College. This policy supplements, but does not modify or replace the other College policies on this subject. Refer to the Board of Trustees Policy Manual; Subject 2.8 - Board of Trustees Conflict of Interest Policy and Subject 6.16 – Employee Conflict of Interest Policy.
  2. In addition to complying with all other relevant policies with regard to procurement, College faculty or staff will not knowingly select, solicit, acquire goods from, or administer a contract with any related party. A related party is defined as any supplier or service provider that:
    • Is owned, controlled, or actively influenced (with regard to any proposed transaction with the College) by any employee, faculty member or their immediate families; or
    • Employs, or will employ, any person who is an employee or faculty member of the College, or their immediate families.
  3. The President must approve, in writing, any transaction from a related party prior to the issuance of a purchase order. See Attachment A for the appropriate form.

Compliance with Procurement Policies

  1. The Procurement Department, in conjunction with the College Controller, is responsible for ensuring compliance with the College procurement policy and/or other approved purchasing process.
  2. Authorization to suppliers for the purchase of products and services must be made through an approved College purchase order or other approved purchasing process. Verbal authorization to ship goods or to approve the rendering of services without issuing a purchase order number is prohibited.
  3. Any supplier contract or agreement requiring signature authorization must be reviewed by the Procurement Department prior to execution. Only the Procurement Director; College President, Vice President of Finance and Administration or their authorized designee may execute supplier contract forms.

Contract Compliance

  1. The Procurement Department, under the direction of the Procurement Director, is authorized by the Board of Trustees to negotiate and issue contracts that provide the College with "best value" supplier arrangements for goods and services required from external suppliers.
  2. All College contract supplier information and pricing is proprietary information and may not be used for any purposes other than official College business. College contract information is not to be:
    • Provided to other suppliers or anyone outside the college;
    • Used in any unethical fashion;
    • Used for personal purchases or private gain
  • Misuse of supplier data will be considered improper handling of institutional data.

Competitive Bidding Over $25,000 (Other than for Construction and Facility Management

  1. The Procurement Department is responsible for establishing an equitable and efficient competitive bidding process and ensuring that the procedures are followed and appropriate approvals obtained.
  2. Unless specifically exempt, as defined below in Section 4: the College must solicit competitive bids or proposals if a total order is Twenty Five Thousand Dollars ($25,000) or more for non-construction purchases or Twenty Thousand Dollars ($20,000) or more for construction and facilities maintenance contracts,
  3. The process for purchasing supplies, services and equipment deemed to be publicly biddable is as follows.
    • If a total non-construction related order is Twenty Five Thousand Dollars ($25,000) or more, the College must solicit competitive bids or proposals by public advertising, electronic publication which is accessible to the general public, issuance to bidders and proposers on the College's bid lists, and/or by issuance to a pre-qualified list of bidders or proposers when the College has conducted a pre-qualification process.
    • The requesting department will complete a list of requirements or specifications for use by the Procurement department in developing a competitive request for bid or proposal. In the case of bids, a contract will be awarded by the College to the lowest responsive and responsible bidder. In the event bids are received for the same dollar amount, the successful bid will be determined through a flip of the coin.
    • Bids or proposals submitted in response to the notification must be received in writing, in sealed form, by the Board of Trustees, a committee designated for this purpose, or the Procurement Director, if so designated. The bids will be publicly opened and read at the time and place designated in the notification and will be held for consideration and analysis for subsequent award.  At the discretion of the Procurement Director, proposals may also have a public opening.
    • Each bid shall be accompanied by a bond guarantee in the form of a certified check, cashier's check, treasury check, or bid bond in such amount as the Board of Trustees shall determine, but not less than five percent (5%) of the amount bid. However, the Procurement Director has the right to waive the bid bond up to $100,000 on non-construction bids. In the event any bidder shall, upon award of the contract, fail to comply with the requirements as to the bond guaranteeing the performance of the contract, such bid bond or certified check shall be forfeited.
    • The contract for the purchase of the supplies, services and equipment for which bids were received shall be awarded to the lowest responsive and responsible bidder, kind, quality and material being equal.  The contract for the purchase of the supplies, services and equipment for which proposals were received shall be awarded to the proposer whose proposal has been deemed to represent the best overall value to the College.  In all cases, the College shall reserve the right to reject any and all bids or proposals or to select a single item from any bid. The College further reserves the right to award the contract on a split order, lump sum, or individual item basis, or all bids or parts of solicitations, to waive informalities in bids and quotes, or to reissue the solicitation.
  4. The following situations are exempt* from competitive bid requirements but require submission of a “Single or Sole Source Justification” (See Attachment B).  This justification must be approved by the Procurement Director prior to issuance of a purchase order or contract. Purchases exempt from competitive bid requirements are still subject to the regular approval process. *Note: No exemptions using federal funding.  See Procurement with Federal Grants section. 
    • The equipment can be obtained from only one person or firm (sole source of supply);
    • Competition is precluded because of the existence of patent rights, copyright, or similar circumstances;
    • Goods, equipment or services needed at once because of an emergency.  These may be purchased without bid or proposal at the discretion of the President, but must be brought before the Board for retroactive approval at the next available meeting.
    • For professional services.  Professional services may include, but not be limited to:

Appraisal Services

Insurance

Planning and Budgeting Studies

Artists

Investment Management

Property Management Services

Consulting Services

Legal Services

Quality Improvement and Process Analysis Studies

Data Processing Assessments

Management Information Systems Studies

Surveys and Feasibility Studies

Engineers

Organizational Studies

Technology Implementation Services

Environmental Studies

Management Information Systems Studies

Training Services

Graphic Design

Personnel, Job Classification and Benefit Studies

Venues for College Events

    • The contemplated procurement is for components being procured in support of equipment specially designed by the manufacturer;
    • The contemplated procurement is for technical services in connection with the assembly, installation, or servicing or the instruction of personnel therein of equipment of a highly technical or specialized nature;
    • The contemplated procurement is for labor and material required for providing immediate accommodation in support of the installation of new equipment/systems which can be accomplished by a vendor already on site; and it would not be practical to allow another vendor to work on the same site or when it would be considered impractical for another vendor to mobilize and demobilize;
    • The purchase of goods or services from College Contract Suppliers or from State Contracts and/or Educational Procurement Cooperatives approved by the College Board of Trustees. The Procurement Department is authorized to require competitive bids for purchases from College contract suppliers, State Contract suppliers and/or Educational Procurement Cooperatives if in its judgment, cost savings may be realized or other College objectives accomplished;
    • Contracts involving policies of insurance, surety company bonds, contracts with internet access companies, contracts with public utility services or telephone companies under tariffs on file with the Public Utility Commission, contracts made with another political subdivision of the Commonwealth of Pennsylvania, the federal government and any agency of the Commonwealth of Pennsylvania or any municipality authority;
    • Contracts for education films, film strips, prepared transparencies and slides, prerecorded magnetic tapes and disc recordings, textbooks, prepared kits, models, projectiles, teacher demonstration devices necessary for College use, and library books and materials;
    • Integral equipment repair parts, accessories or equipment that must be compatible with existing equipment or fixtures;
    • Software or software support that must be compatible with existing software or for which it would be impractical or excessively costly for another vendor to provide the software or software support.

Please note that while certain goods and services previously described in this subject may be exempt from competitive bidding requirements, Board notification is still required and the items are subject to reporting provisions of the Pennsylvania Right to Know (RTK) law.

Procurements $5,000 or Greater and Less Than $25,000 (*Excluding purchases with federal grant funds)

    1. The College must solicit competitive quotations from at least three (3) responsible vendors for all supplies, services and equipment with a total cost of Five Thousand Dollars ($5,000.00) but less than Twenty Five Thousand Dollars ($25,000.00) unless identified as “exempt” in the preceding Section 4.
    2. A contract shall be awarded to the lowest responsive and responsible vendor meeting specifications.
    3. Normally, a minimum of three quotes from qualified sources of supply will be required. However, circumstances may exist when fewer than three quotes or more than three quotes may be appropriate.
      • The Procurement Department will accept fewer than three quotes only in cases where the normal competitive bidding process cannot be conducted. Purchase orders for which at least three quotes cannot be obtained must be accompanied by a completed Vendor Selection Form, Attachment C, in which the circumstances are explained. Either the College President, Vice President of Finance and Administration, or Procurement Director is authorized by the Board of Trustees to sign the waiver.
    4. The Procurement Department is authorized to determine when more than three bids will be required.

    Procurements Less than $5,000 (*Excluding purchases with federal grant funds)

    All supplies, services and equipment with a total cost less than Five Thousand Dollars ($5,000.00) may be purchased by the Procurement agent without request for written quotations or bids.

    Lease vs. Purchase

    1. The Vice President of Finance and Administration has the authority and responsibility to determine the most appropriate method of acquiring equipment, i.e., purchase or lease (capital and operating) of $100,000 or more. The Controller also has the responsibility to evaluate each external third party lease over $100,000 for proper accounting and reporting treatment (i.e., capital or operating).
    2. The Procurement Department has the authority and responsibility to review and execute all supplier leased contracts on behalf of the College.
    3. While it is not recommended, external third party leases are permitted only when the Office of Administration and Finance determines that economic benefits will be realized. Such benefits may include lower cash payments, beneficial financing terms, and/or decreased risk, e.g., obsolescence, assumed by the College. However, generally third party leases are not cost effective and, in the case of capital leases, create reporting requirements. Outright purchase is the most preferred method of acquiring equipment.
    4. The procurement of equipment via an external third party lease with a total lease payment cost of $5,000 or more is subject to the College’s competitive quotation/bidding policy and request for equipment lease approval procedure.

    Construction and Facility Maintenance Procurement

    The Board of Trustees may perform any construction, reconstruction, repairs, or work of any nature, by its own maintenance personnel or may have the work performed under contract in the following circumstances.

    1. In accordance with Pennsylvania Code §35.51, if a contract equals or exceeds Twenty Thousand Dollars ($20,000.00), the College shall, with public notice, solicit competitive bids and shall award a contract to the lowest responsive and responsible bidder.
    2. If a contract equals or exceeds Five Thousand Dollars ($5,000.00), but is less than Twenty Thousand Dollars ($20,000.00), the College shall solicit competitive quotes from at least three (3) responsible firms.
    3. If a contract is less than Five Thousand Dollars ($5,000.00), the College may award a contract without soliciting competitive bids.
    4. In an emergency in which any part of the College plant may become unusable or cause interruptions to the normal operations of the College, the President may, after consulting with the chairman of the Board of Trustees, and upon approval of the Department of Education, award a contract for emergency repairs.
    5. Bids under public notice shall be received in sealed envelopes at a designated place and time and shall be opened publicly and the contract awarded thereon. The College shall retain the right to accept or reject any or all bids or parts of solicitations, to waive informalities in bids and quotes, or to reissue the solicitation. The College further reserves the right to award the contract on a split order, lump sum, or individual item basis, or such combination as shall best serve the interest of the College unless otherwise specified by the College. In case of errors of price extensions, unit prices shall govern.
    6. Bids under public notice for construction, reconstruction and repair shall be accompanied by a bond with corporate surety or certified check in an amount as the board of trustees determines, but at least 5% of the amount bid. If a bidder, upon award of the contract, fails to comply with the requirements as to a bond guaranteeing the performance of the contract, the bid bond or certified check shall be forfeited.
    7. The bidder to whom the contract is awarded shall furnish bonds to guarantee the performance of the contract and payment for labor and materials. Bonds shall be in compliance with the Public Works Contractors’ Bond Law of 1967 (8 P. S. § § 191—202). Failure to furnish bonds shall void the previous award.
      1. The contractor shall purchase and maintain throughout the period of the contract the insurance required by the College as shown on the College’s Purchasing web site, https://mc3.edu/purchasing, and shall meet all requirements shown therein. 

    Conditions

    1. College is to be named as an additional insured on the insurance certification.
    2. All certificates to contain a 60-day notice of cancellation
    3. the contractor shall obtain and furnish the College certificates for any subcontractors subject to the above terms and conditions
    4. general liability policy shall contain a per job location aggregate
    5. All insurance policies and/or bonds will be written with insurance companies licensed to do business in the Commonwealth of Pennsylvania and subject to the approval of the College.

    Procurement with Federal Grant Funds

    When using federal grant funds, the applicable state statutes and rules and local policies must be followed to the extent that those statutes, rule, and policies do not conflict with the Omni/Super Circular, 2.C.F.R 200.

    1. Simplified Acquisition Threshold for purchases with federal grant funds must be followed as stated below:
      • Micro-purchases:  Purchases less than Three Thousand Dollars ($3,000.00). 
        • May be purchased by the Procurement agent without request for written quotations or bids.
      • Small purchases:  Purchases Three Thousand Dollars ($3,000.00) or greater. 
        • The College must solicit competitive quotations from at least three (3) responsible vendors.
      • Sealed bidding:  For fixed price contracts
        • Must be advertised publically
        • Contain specifications
        • Must be opened in a public forum
        • Must be awarded to the lowest responsive and responsible bidder.
      • Competitive Proposals:  Used when conditions for sealed bids is not appropriate.
        • Request competitive proposals (RFPs) when sealed bids are not appropriate.
        • Both fixed price and cost reimbursement contracts may be awarded.
        • Must be advertised publically
        • Written method for conducting technical evaluations must be in place.
        • Awarded on price and other factors.
      • Non-competitive Proposals:  Permissible only under special circumstances.
        • Item is only available from a single source;
        • Emergency purchase that will not permit a delay for competitive solicitation;
        • Written authorization from the federal awarding agency to use sole source;
        • After soliciting a number of sources, it is determined that competition inadequate.
    1. Prior to initiating the procurement processes, the grant recipient, together with Procurement must:
      • Review the proposed procurement to avoid any unnecessary and/or duplicate purchase of equipment, supplies, and services.
      • Determine if the consolidation of purchases will save time and money
      • When applicable, perform a lease vs buy analysis.
      • Perform a cost analysis in connection with all purchases in excess of the Simplified Acquisition Threshold.
      • Research opportunities to utilize state or local intergovernmental agreements for purchasing equipment, supplies, and services.
      • Incorporate a clear and accurate description of the technical requirements for the supplies, materials, products, or services to be procured.
        • Ensure the description does not, in competitive procurements, contain features which unduly restricted competition.
      • Prohibit restricting competition.
      • When using a prequalified list of entities or products, ensure that the lists are “current and include enough qualified sources to ensure maximum open and free competition,” and do not preclude any other potential entities or products from participating in the solicitation.
      • Use federal surplus federal property, when feasible, when purchasing supplies and equipment.
    1. All solicitation of bid and quotes must, when possible, be made available to minority firms and business enterprises.
      • Awards of contracts or bids must not be based on local geographic preferences, except where applicable Federal statutes expressly mandate or encourage geographic preference.
      • Small and minority businesses and women’s business enterprises shall be placed on solicitation lists;
      • Ensure that small and minority businesses and women’s business enterprises are solicited whenever they are considered potential sources for products and services;
      • When possible, divide requirements into smaller tasks or quantities to allow for participation by small and minority businesses and women’s business enterprises;
      • Establish delivery schedules which encourage participation by small and minority businesses and women’s business enterprises;
      • Utilize the services and assistance of the Small Business Administration and the Minority Business Development Agency;
      • Require contractors to take the same steps listed above.
    1. Contract terms for agreements paid, in whole or in part, with federal grant funds.
      • All federally grant funded contracts must include all applicable provisions described in the Contract Provisions for non-Federal Entity Contract under Federal Awards. www,ecfr.gov
      • Prior to execution of any contract, Procurement must verify that the contractor is not listed on the Excluded Parties List in the System for Award Management (SAM).  www.sam.gov
      • Value engineering clauses must be included in any contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions.
      • Contract performance and payments will be monitored during the course of the contract.
    1. Procurement Record Retention
      • For all purchases made with federal grant funds, Procurement will retain documents detailing the history of the purchase.  This includes:
        • Records showing the rationale for the method of procurement;
        • Rational for the selection of the contract type;
        • Rationale for the contractor selection or rejection; and
        • Bases for the contract price.
    1. Disposal of Property
      • Property and equipment procured with federal grant funds, when no longer needed for the original project or program, may be used in other activities supported by the awarding agency.
      • Before disposition of property or equipment, the College must verify the federal awarding agency disposition instructions.
        • For items values less than $5,000:  Procurement may sell or otherwise dispose of the item without further obligation;

     

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