Ohio Department of Transportation
Purchasing Contract Administration Training
Office of Finance and Forecasting
Updated May, 2008
Purchasing Contract Administration
Table of Contents: Course Schedule.............................................................................................................................. ii Abstract .......................................................................................................................................... iii Learning Objectives ....................................................................................................................... iii Lesson One: Before Making A Purchase ........................................................................................ 1 Lesson Two: Bid Contract Items .................................................................................................. 25 Lesson Three: Direct Purchasing Authority ................................................................................. 53 Lesson Four: Information Technology Purchases ........................................................................ 67 Lesson Five: Review and Approval Process ................................................................................. 77 Lesson Six: Payment Options – Paycard, EDI and Debit Voucher .............................................. 91 Lesson Seven: Purchasing and Ethics ........................................................................................ 127
Appendix A: Appendix B: Appendix C: Appendix D: Appendix E: Appendix F:
Office of Finance and Forecasting
Acronyms Purchasing Policy Purchasing Guidelines for Multiple Award Contracts FAQ’s Web Links Acknowledgement Form
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Purchasing Contract Administration Updated May 2008
Course Schedule
Day One
Start Time Duration
Title
Abstract & Introductions
8:30 a.m.
15 minutes
Lesson One
8:45 a.m.
45 minutes
Before Making A Purchase
Lesson Two
9:30 a.m.
60 minutes
Bid Contract Items
Break
10:30 a.m.
15 minutes
Lesson Three
10:45 a.m.
45 minutes
Lunch
11:30 a.m.
60 minutes
Lesson Four
12:30 p.m.
30 minutes
Information Technology Purchases
Lesson Five
1:00 p.m.
30 minutes
Review and Approval Process
Break
1:30 p.m.
15 minutes
Lesson Six
1:45 p.m.
60 minutes
Payment Options – Paycard, EDI & Debit Voucher
Lesson Seven
2:45 p.m.
30 minutes
Purchasing and Ethics
Course Review
3:00 p.m.
15 minutes
Adjourn
3:30 p.m.
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Direct Purchasing Authority
Office of Finance and Forecasting
Purchasing Contract Administration Updated May 2008
Abstract The purpose of the Purchasing Contract Administration training is to clarify, reinforce and teach the rules and guidelines of purchasing within the Ohio Department of Transportation. The ethics involved in purchasing and contracts has never been more paramount than present day. ODOT is considered a leader in state government and has a vast commitment to its customers to ensure the highest standard of business practice with each purchasing transaction. Following the distinct purchasing guidelines and rules set within this manual will limit the liability for all purchasers and approvers and empower ODOT to maintain its unique purchasing authority privilege.
Learning Objectives The learning objectives for this course are as follows: •
Understand the uniqueness of ODOT’s direct purchasing authority
•
Identify questions to ask before making a purchase
•
Understand general purchasing guidelines and the purchasing flow process
•
Understand the difference between Bid Contracts and Non Contract Purchases
•
Understand ODOT’s purchasing options
•
Understand the components of a contract
•
Identify and understand the separate and distinct roles of purchaser, reviewer and approvers
•
Understand Minority Business Enterprise
•
Understand Contract Administration
•
Comprehend the dispute resolution process
•
Recognize when to use Non-Contracts/Direct Purchase
•
Understand the various payment options
•
Understanding the ethics involved in purchasing and contracts
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Purchasing Contract Administration Updated May 2008
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Office of Finance and Forecasting
Lesson One
Purchasing Contract Administration May 2008
Lesson One: Before Making a Purchase
LESSON ONE Before Making A Purchase
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Purchasing Contract Administration May 2008
Lesson One
Unique Purchasing Authority ODOT is one of only a few state
agencies to have its own purchasing authority
A. Unique Purchasing Authority 1. Chapter 125 of the Ohio Revised Code (O.R.C.) a. Grants purchasing authority to the Department of Administrative Services (DAS) 2. Chapter 5513 of the Ohio Revised Code a. Provides ODOT with its own purchasing authority b. ODOT must provide training of purchasing laws and DAS policies so that we can continue our commitment to the customers and be a leader in state government i. The Office of Budget and Management (OBM) and DAS requests DOT participation on statewide teams ii. DAS has allowed DOT to enter Community Rehabilitation Program (CRP) contracts 3. ODOT is one of only a few state agencies to have its own contract department
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Lesson One
Purchasing Contract Administration May 2008
Purchasing Checklist Questions to ask FIRST Is the purchase necessary and or permitted? What types of supplies or services are being
requested? What is the time frame for providing the
supplies or services to meet the need? Will the item or service be required beyond this
purchase? If so, how often?
B. Purchasing Checklist: Items to Ask Yourself Before Making a Purchase 1. Is the purchase necessary and/or permitted? a. Does it support the mission or operation of ODOT? 2. What types of supplies or services are being requested? a. Types of services may dictate the requirement of a personal service agreement b. Types of supplies or services may dictate different pre-approval requirements i. ITPR for IT purchases ii. Pre-approval process for copiers or vehicles 3. What is the time frame for providing the supplies or services to meet the need? a. Plan ahead b. The purchase may require a contract, Release and Permit (R&P), or personal service agreement 4. Will the item or service be required beyond this purchase? If so, how often? Example: Salt, aggregates, etc. a. A contract may need to be awarded or quotes may be required b. A blanket purchase order may be the most efficient way to purchase
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Purchasing Contract Administration May 2008
Lesson One
Purchasing Checklist Questions to ask FIRST What is the dollar value of the required
supplies or services? Will it be necessary to write specifications? Is the vendor in the appropriation accounting
system?
5. What is the dollar value of the required supplies or services? a. The dollar value may indicate the need for a R&P or pre-approval from the Information Technology (IT) area b. The dollar amount also dictates the number of quotes that are required c. Vendor $50K list needs to be reviewed d. The dollar value may also dictate the type of payment i. Debit voucher ii. Payment card iii. Purchase order 6. Will it be necessary to write specifications? a. Quotes b. Contract c. Personal service i. All would require specifications or clear expectations 7. Is the vendor on the Appropriation Accounting System (AA)? a. Plan ahead, there are new processes when adding vendors to the system b. The vendor must be added to the Ohio Administrative Knowledge System (OAKS) before their addition to AA 4
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Lesson One
Purchasing Contract Administration May 2008
Purchasing Checklist Who to Utilize Can I get it from an internal source? Is it available from a State resource like OPI,
CRP, ODOT Printing, DAS State Printing, etc.? Is it available from an ODOT purchasing contract? Is it available from a DAS contract? Is this a non-contract purchase that requires quotes? Can I purchase from an MBE?
8. Can I get it from an internal source? a. The mailroom, parts room, garage, stockroom, or appropriate office b. Examples of some items considered to be non-essential for operational need and should not be purchased (this is not a complete list) i. Franklin Covey planners ii. Coffee iii. Table covers iv. Decorations v. Certificate picture frames vi. Fair booth give-a-ways, table cloths and decorations for the booth c. Advil, Tylenol, Advil, etc. are not considered first aid supplies. These items are classified as over the counter medications and ODOT does not provide these items. Check with safety first if you are in doubt about purchasing first aid supplies. d. The following is a list of first aid supplies that should be purchased on a regular basis i. Adhesive bandages ii. CPR breather with latex gloves Office of Finance & Forecasting
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Purchasing Contract Administration May 2008
Lesson One
iii. Pre poison oak and ivy lotion iv. Poison ivy lotion v. Knuckle bandages vi. Finger tip bandages vii. Antibiotic ointment viii. Iodine swab ix. Sting kill wipes x. Alcohol prep wipes xi. Burn spray xii. Sterile pads xiii. Adhesive tape 9. Is it available from a State resource such as The Ohio Penal Industries (OPI), Community Rehabilitation Program (CRP), ODOT Printing, DAS State Printing, etc.? 10. Is it available from an ODOT purchasing contract? 11. Is it available from a DAS contract? 12. Is this a non-contract purchase that requires quotes? 13. Can I purchase from a Minority Business Enterprise (MBE)?
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Lesson One
Purchasing Contract Administration May 2008
Responsibilities Prior to Purchasing Obtain Supervisor approval Refer to the $50,000 limit list prior to making
purchases Follow proper purchasing procedures per the Purchasing Contract Administration Manual (PCA) Assess the amount of materials needed prior to performing a job
C. Responsibilities Prior to Purchasing 1. Obtain supervisor approval 2. Refer to the $50K limit list at the following location prior to making purchases a. O:\FINANCE\PaymentCard\50klistFY08website.xls i. Be sure to use the correct fiscal year report b. Purchasers can become fiscally responsible i. Return item to vendor ii. Pay for item personally 3. Follow the proper purchasing procedures a. Refer to the Purchasing Contract Administration Manual (PCA) 4. Purchasers should assess the amount of materials needed prior to performing a job a. Quotes may need to be obtained b. This may result in the need for utilization of purchase orders rather than using the payment card improperly
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Purchasing Contract Administration May 2008
Lesson One
Responsibilities Prior to Purchasing Use proper contract and ensure correct
contract pricing prior to purchase Obtain quotes where applicable or provide sole source explanation Purchasers cannot approve their own transactions
5. Use the proper contract and ensure the correct contract pricing prior to purchase a. Vendors are not always forthcoming with what is on contract and what isn’t on contract 6. Obtain quotes where applicable or provide sole source explanation 7. Purchasers cannot approve their own transactions a. May not use another person’s sign on for transaction approval b. May not be an alternate approver to approve one’s own transactions c. Cannot enter requisition and act as the alternate approver for required approvers for the district/division i. A list of required approvers can be provided by the Fiscal Officer
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Lesson One
Purchasing Contract Administration May 2008
Purchasing Pre-approvals DAS Pre-approvals Release and Permit Controlling Board
D. Purchasing Pre-approvals 1. DAS Pre-Approvals a. Unique pre-approval is required from DAS i. Past practice dictated a pre-approval number. Since the implementation of OAKS, the DAS pre-approval process is still required, however no number is provided for vehicles or copiers. ii. The purchase of a copier requires an online form to be completed for DAS. The link to online forms can be found on the Office of Accounting’s website. a) http://procure.ohio.gov/pdf/preapproval.htm iii. To purchase a vehicle, contact ODOT’s Office of Equipment Management 2. Release and Permit a. Obtained from DAS b. According to the Ohio Revised code, the release and permit is required when a purchase exceeds the direct purchasing authority limit of $33,500 for supplies and $67,000 for services. However, OBM has required anything over $50,000 to go through the controlling board. c. The R&P is like having a “ticket” to get in to the controlling board. Thus, any purchase over $50,000 must have a R&P.
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Purchasing Contract Administration May 2008
Lesson One
d. Direct purchasing authority limits change every few years. Be sure to verify the current limit. 3. Controlling Board a. Controlling Board requests are used when a vendor has reached the $50K spending limit and a non-contract purchase needs to be made with this vendor i. The Office of Contracts are not permitted to bid ii. Quotes are preferred when requesting control board approval
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Lesson One
Purchasing Contract Administration May 2008
Minority Business Enterprise (MBE) Defined on Equal Opportunity Divisions (EOD) website as: “Minority Business Enterprises means an individual, partnership, corporation or a joint venture of any kind that is owned and controlled by United States citizens, residents of Ohio, who are and have held themselves out as members of the following economically disadvantaged groups: African Americans, American Indians, Hispanics and Asians.” E. Minority Business Enterprise (MBE) 1. The MBE Company must be owned and controlled at least 51% by US citizen(s) and resident(s) of Ohio, belonging to one of the following ethnic groups: African Americans, American Indians, Hispanics or Asians. The firm must have been operational at least one year prior to applying for certification a. Pass-through i. The Equal Opportunity Division (EOD) researches companies by conducting the following a) Interviews b) Review of financial documents c) Facility visits
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Purchasing Contract Administration May 2008
Lesson One
Minority Business Enterprise (MBE) Vendor must be certified with EOD office 15% requirement of all eligible purchases
for Certified Minority Business Enterprises
2. Vendor must be certified with the Equal Opportunity Divisions (EOD) Office a. All applications are required to be completed online at www.mbe.ohio.gov i. The business must be a for-profit business entity ii. The business must be at least fifty-one percent owned and controlled by one or more of the person(s) belonging to the following groups: African Americans, Native Americans, Hispanics and Asians for one year prior to applying for certification iii. There must be a demonstrated capability and/or expertise within classifications identified for a period of one year prior to certification iv. The MBE certification will be granted for a period not to exceed one year 3. There is a 15% requirement of all eligible purchases for Certified Minority Business Enterprises per O.R.C. §125.081 a. To the extent that any agency of the state, other than the Department of Administrative Services, the legislative and judicial branches, boards of elections, and the adjutant general, is authorized to make purchases, the agency shall set aside a number of purchases, the aggregate value of which equals approximately fifteen percent of the aggregate value of such purchases for the current fiscal year for competition by minority 12
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Lesson One
Purchasing Contract Administration May 2008
business enterprises only. The procedures for such purchases shall be the same as for all other such purchases made by the agency, except that only minority business enterprises certified by the equal employment opportunity coordinator in accordance with rules adopted under division (B) (1) of section 123.151 [123.15.1] of the Revised Code shall be qualified to compete. b. The 15% requirement of MBE purchases is a legal requirement c. The 15% MBE goal is an ODOT statewide requirement, not just a county or garage requirement i. Your county may already have met the 15%, but other counties in your district may need additional credit from your area to meet the department wide requirement d. The 15% goal needs to be pursued all year long e. When requesting quotes from an MBE, all requests must be to MBE’s. Do not mix in quotes from a non-MBE vendor. i. Although quotes cannot be mixed, if you know that an MBE is providing a price that is within 10% of what non-MBE vendors have charged for the same commodity, you may choose the MBE ii. MBE vendors charging in excess of 10% of a non-MBE vendor should not be selected
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Purchasing Contract Administration May 2008
Lesson One
Minority Business Enterprise (MBE) Standard Query for listing of all ELIGIBLE
object codes Using Payment Card – the MBE flag must be changed Locate an MBE Encourage local minority vendors to register with EOD
f. Eligible codes i. Object codes that are not eligible will not be counted towards the MBE goal for your district/division. a) Some examples of excluded object codes: 1) Wired telecom 2) Wireless telecom 3) Dump trucks 4) Testing equipment 5) Ag/Gard tractors 6) Salt 7) Courier services 8) Aircraft service repairs and aircraft parts 9) Utilities – gas, electric and water
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Lesson One
Purchasing Contract Administration May 2008
b) Payment card – the vendor is USB and is not an MBE, so each transaction must be flagged individually 1) Y = MBE 2) N = Non-MBE c) The MBE flag must be changed when using the payment card g. To locate an MBE i. Contact the finance or accounting department of your office or district ii. Contact the Office of Accounting located in Central Office iii. BI query in GQL iv. Use the State purchasing internet page: http://www.state.oh.us/das/Eod/MBEsearch/index.asp v. Encourage local minority vendors to register with EOD
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Purchasing Contract Administration May 2008
Lesson One
MBE Set Aside & EDGE MBE = Minority Business Enterprise EDGE = Encouraging Diversity Growth &
Equity To flag a purchase as an MBE set aside vendor must be certified as such Enter the letter “Y” when applicable on Page one (1) during the paycard voucher entry process
4. MBE Set Aside a. 15% requirement b. To flag a purchase as an MBE set aside, the vendor must be certified as such i. Quotes must only be obtained from MBE certified vendors 5. Encouraging Diversity and Growth (EDGE) a. 5% requirement b. Should not be using EDGE for goods and services unless the vendor is not an MBE 6. Payment card entry process a. Enter the letter “Y” when applicable on page one, during the paycard voucher entry process b. If a vendor is both MBE and EDGE only flag as MBE. If the vendor is only EDGE certified, flag as EDGE. c. Both fields are required. Either enter “N” for both or “Y” if MBE.
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Lesson One
Purchasing Contract Administration May 2008
F. Purchasing Flowchart 1. Ohio Penal Industries (OPI) a. OPI is a required program i. Division of the Department of Rehabilitation and Corrections (DR&C) b. Provides inmates with the opportunity to develop work skills and acquire training c. Reference contract for purchases from OPI d. Products provided i. Office furniture ii. Signs, flags and emblems iii. Snowplow, dump body, spreader installation iv. Salt dome construction e. Waiver is required in writing prior to purchasing i. Example: If OPI cannot meet the required specifications, then a waiver may be requested to purchase from another vendor. Call OPI to request the waiver. f. OPI is excluded from the Minority Business Enterprise (MBE) calculation Office of Finance & Forecasting
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Purchasing Contract Administration May 2008
Lesson One
2. Community Rehabilitation Program (CRP) - Previously OIH and Possitivity a. The CRP is a required program i. Quotes are not required b. Payment card may be used for products only i. Use payment card contract suffix relating to the vendor (US bank) c. Must reference CRP contract d. Excluded from Minority Business Enterprise (MBE) calculation e. Waiver is required in writing prior to purchasing i. Example: If CRP cannot meet the required specifications, then a waiver can be requested to purchase from another vendor f. Products provided i. Custodial supplies ii. Pencils iii. Pens iv. Picnic tables v.
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Pink hand soap
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Lesson One
Purchasing Contract Administration May 2008
vi. Safety vests g. Services provided i. Custodial ii. Landscaping h. Lawn maintenance
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Purchasing Contract Administration May 2008
Lesson One
3. ODOT Print Shop a. ODOT has an internal print shop that should be utilized. No Kinkos! By using the ODOT print shop there are no additional costs to the department for printing. b. If the ODOT print shop cannot fill the print order, they will instruct you to forward your request to State printing c. Examples of jobs i. Business cards ii. Newsletters iii. Forms iv. Manuals v. Brochures
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Lesson One
Purchasing Contract Administration May 2008
4. DAS State Printing a. Used if the ODOT print shop cannot process the project i. If the ODOT print shop is unable to fill the order, they will grant a Printing Request Order (PRO) number b. Printing Request Order (PRO) is necessary i. DAS Form can be found on the accounting website or contact the ODOT print shop for information ii. Send the PRO form to Central Office Accounting iii. Central Office Accounting will enter the requisition. Do not go directly to the DAS Print Shop. Central Office Accounting will need to reject the order and the process must start over. c. Costs are incurred for DAS State printing. Some examples include: i. Envelopes ii. Art layouts iii. Forms management iv. Odd size reports
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Purchasing Contract Administration May 2008
Lesson One
Required Resource Payment Card may NOT be used for items
available from OPI, another state agency or State Printing CRP - payment card may be used for
goods, but not for services Items available from the above must be
purchased from that specific state agency
5. The payment card may not be used for items available from OPI, another State Agency or State Printing 6. When one State agency pays another, the paycard process cannot be used 7. OIH services include engraving, embroidery, etc. 8. CRP a. The payment card may be used for goods only. Do not use for services.
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Lesson One
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Purchasing Contract Administration May 2008
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Purchasing Contract Administration May 2008
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Lesson One
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Lesson Two
Purchasing Contract Administration May 2008
Lesson Two: Bid Contract Items
LESSON TWO Bid Contract Items
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Purchasing Contract Administration May 2008
Lesson Two
A. ODOT Office of Contracts 1. The Office of Contracts provides a centralized procurement area to obtain competitive bids for specific goods, materials and services a. Legal advice and interpretation b. Very large registered vendor database c. Consequential damages d. Detailed specifications e. Automatic extension of contract for 30 days i. May be longer if mutually agreed upon f. No fees incurred by the Department
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Lesson Two
Purchasing Contract Administration May 2008
Benefits of Bid Contracts No signatures required No dollar limitation No additional bidding No additional terms and conditions Most vendors accept payment card or
EDI Does not contribute to the $50K list
2. Bid Contract Benefits a. No signatures are required i. Contract provides requirements for all vendors b. No dollar limitation i. No additional requirements are necessary a) No quotes or R&P c. No additional bidding is required i. On some contracts, vendors have the benefit to update pricelists d. No additional terms and conditions are required e. Most vendors accept payment card or EDI f. Does not contribute to $50k list
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Purchasing Contract Administration May 2008
Lesson Two
Release and Permit (R&P) ODOT negotiates R&P each biennium from
DAS for the purchase of supplies and services directly related to the construction and maintenance of state highways Lists commodities Blanket R&P is provided for a two year period Without R&P, ODOT would be required to make competitive bid purchases through DAS or the Controlling Board
3. Release and Permit a. ODOT negotiates blanket R&P each biennium from DAS for the purchase of specific supplies, materials, and services for the construction and maintenance of state highways. i. Pursuant to Revised Code sections 125.05 and 125.06, the Director of DAS provides R&P for supplies and/or services that are considered to be directly related to the construction and maintenance of state highways as defined in Section 5501.31 and 5501.17 of the Ohio Revised Code ii. Without blanket R&P, we would be required to make all competitive bid purchases through DAS or the Controlling Board b. Lists commodities c. Blanket R&P is provided for a two year period d. If DAS would establish a term contract for any of these items, ODOT would be required to purchase from the DAS contract if R&P is no longer approved for commodity i. When an item is available on a DAS contract and DOT contract, use the DAS contract when there is a significant cost savings a) Notify the Office of Contracts and Superintending Office b) No fee to DAS when using an ODOT contract
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Lesson Two
Purchasing Contract Administration May 2008
Purchasing Options ODOT Contracts Office of Contracts has two types of
Competitive bids One
time bid contract Term contracts
Includes Multiple Award Contracts (MAC)
4. ODOT contracts a. The Office of Contracts provides a centralized procurement area to obtain competitive bids for specific goods, materials and services for highway related items b. Blanket Release and Permit issued to ODOT c. Competitive bids i. One-time bid contract a) Purchased infrequently ii. Term contracts a) Contract items include 1) Aggregate, orange barrels, salt iii. Most are bid annually iv. All responsive bidders can be awarded if multiple award v. All vendor questions regarding invitations to bid (ITB) should be referred to the Office of Contracts
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Purchasing Contract Administration May 2008
Lesson Two
ODOT Multiple Award Contracts (MAC) Take advantage of the
thresholds When fixed and definite
specifications cannot be provided Allows flexibility in the
Districts
5. Multiple Award Contracts (MAC) a. See O.R.C. § 5513.02 i. (A) “Specifications describing the character of the articles that the Department of Transportation is proposing to purchase…All purchases shall be made by the director from the lowest responsive and responsible bidder for each item in accordance with section 9.312 of the Revised Code, except where the Director has established in the bidding documents a provision for multiple awards for the purchase of items such as asphalt, aggregates, machinery, equipment, or supplies for which fixed and definite specifications cannot be prepared, the director may purchase the articles meeting the general specifications prescribed and which the director finds are most suitable for the uses intended…” b. Provides opportunity for MBE vendors c. Allows flexibility in the Districts d.
Mandatory
e. Some have exemptions i. Read terms and conditions of each contract f. Permits purchase of similar types of items from numerous suppliers g. Most are revised annually 30
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Lesson Two
Purchasing Contract Administration May 2008
h. Contract items include i. Office supplies (MAC043), digital cameras, hand-held radios, etc. i. The examples below detail product specifications and thresholds for each contract i. Look for the different terms and conditions for each contract ii. Make no assumptions about contract content based on previous awards
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Purchasing Contract Administration May 2008
Lesson Two
Example: Contract Thresholds: ODOT 123A06 Contract
Example: Contract Thresholds: DOT 009-07 Contract
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Lesson Two
Purchasing Contract Administration May 2008
ODOT Multiple Award Contracts (MAC) Most responsible vendor Lowest responsible cost This is easier than what you think
j. Contract Threshold i. If the contract threshold is met, the contract must be used and contract pricing applies ii. If the contract threshold is not met, you may purchase off a contract from any vendor or you may purchase off the contract from the contract vendor at a lower price, not to reference the contract k. Most responsible vendor and lowest responsible cost i. All attempts must be made to determine who is the lowest responsible cost ii. A MBE vendor within 10% of the lowest vendor may be justification for not using the vendor providing the lowest bid l. Lowest responsible cost i. Encourage purchasers to make good business decisions ii. Thresholds are set for contract to provide ability to purchase locally iii. Lowest cost should be documented on the comment screen in the Appropriation Accounting System iv. You may use a DAS contract prior to a DOT contract when the cost savings are realized using the DAS contract Office of Finance and Forecasting
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Purchasing Contract Administration May 2008
Lesson Two
ODOT Multiple Award Contracts (MAC) Questions or concerns when dealing with
MAC’s
Limitations Lower prices outside of the scope erodes the competitive bid process
Price list change Reference contract when items are under
minimum threshold, but on contract, and contract vendor is used
m. Questions, issues or concerns when dealing with MACs i. Limitations to accepting a lower cost than the bid a) All price changes must be approved through the Office of Contracts before payment is rendered b) Advertised specials on office supplies or equipment ii. DAS may allow lower price acceptance as well as price negotiations, but the Department of Transportation does not allow this same practice with DOT or DAS contracts n. Price list change i. Vendor made an error on price list submitted ii. All price changes must be approved through the Office of Contracts when referencing a DOT contract o. Reference the contract when items are under the minimum threshold, yet on contract, and the lowest responsible contract vendor is used i. For purchases under the contract threshold, and the lowest responsible vendor is not used, yet the items are on contract, do not reference the contract. Note in the comment screen why the contract was not referenced.
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Lesson Two
Purchasing Contract Administration May 2008
ODOT Multiple Award Contracts (MAC) To quote or not to quote Review the award tab Lowest responsible cost justification Any negotiation regarding prices with a
vendor after the award of a contract is strictly forbidden
p. This is not intended to say that vendor quotes are needed in order to properly purchase from an ODOT MAC vendor q. The purchaser should simply review the award tab for the specific contract to determine the lowest responsible cost considering the factors set forth previously r. Central Office accounting has provided a cheat sheet to the districts and can be found on the accounting webpage s. If the vendor with the lowest price is not considered by the purchaser to be the lowest responsible cost, justification must be placed on the Automated Purchasing System (APS) or Payment Card screens documenting why an order was placed with a vendor with a higher price i. Documentation is key to approval t. Any negotiation regarding prices with a vendor after the award of a contract is strictly forbidden
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Purchasing Contract Administration May 2008
Lesson Two
ODOT Multiple Award Contracts (MAC) Consignment agreements and justification Districts and purchasers do not have authority
to create their own forms
Required forms are available on the Office of
Contracts website
Entering into consignment contracts without
the Director’s signature and approval is prohibited
u. Consignment agreements for a MAC must be entered into with the vendor who has the lowest responsible cost v. Entering into a consignment agreement with a vendor who did not provide the lowest responsible cost is prohibited i. If lowest bid vendor refuses to enter into a consignment contract, DOT may not enter into consignment with any of the other contract or non-contract vendors w. Districts and purchasers do not have the authority to create their own forms i. Required forms are available on the Office of Contracts website ii. Entering into consignment contracts, without the Director’s signature and approval is not allowed
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Lesson Two
Purchasing Contract Administration May 2008
B. Department of Administrative Services Responsibilities 1. Award DAS contracts 2. Follow-up on vendor evaluations 3. Provide R&P
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Purchasing Contract Administration May 2008
Lesson Two
Purchasing Options DAS Contracts General Distribution Contracts (GDC)
MANDATORY
Multiple Award Contracts (MAC)
MANDATORY
Master Maintenance Agreement (MMA)
OPTIONAL
State Term Schedules (STS)
OPTIONAL
Limited Distribution Contract (LDC)
MANDATORY – may only used by specified agencies
4. Department of Administrative Services (DAS) contracts a. Payment card can be used b. Vendors not accepting the payment card should file a Complaint to Vendor (CTV) c. GDC, MAC & LDC i. Mandatory ii. Must be purchased from the contract vendor a) Supplies and/or services provided by these contracts must be procured from the awarded vendors listed on the contract iii. LDC not intended for ODOT cannot be used a) Sample of other agency specific index numbers – cannot be used by ODOT 1) DOH 2) DPC 3) DRC 4) DHM b) Index numbers for DOT specific contracts begin DOT 38
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Lesson Two
Purchasing Contract Administration May 2008
c) Other contracts that DOT can use, index begins: 1) GDC 2) MMA 3) MAC d. MAC & MMA i. Sometimes optional – review the contract for details ii. Payment card can be used iii. Vendors not accepting the payment card can file a Complaint to Vendor (CTV) e. State Term Schedule (STS) is recommended but not mandatory i. Obtain quotes for the best price ii. Payment card can be used
Discussion Question: What is the difference between a state term schedule, a state term contract and a bid term contract?
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Purchasing Contract Administration May 2008
Lesson Two
Non-Pay Direct Dealers Payments may only go to
vendor on contract A lack of vendor ID indicates no payments can be made to this dealer Vendor – remit payment to Dealer – multiple locations for merchandise pickup
f. Caution: When reviewing dealer information, no vendor ID will be displayed. A lack of vendor ID indicates no payments can be made to this dealer. Parts or equipment may be picked up from the dealer, but all payments must go to the contract vendor. i. Vendor – remit payment to ii. Dealer – Provides multiple locations for merchandise pickup a) Status can change at any time
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Office of Finance and Forecasting
Lesson Two
Purchasing Contract Administration May 2008
Example: Vendor – John Deere Company
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Purchasing Contract Administration May 2008
Lesson Two
Contracts Things to Know Contract numbers are required for entry in the
Payment Card, EDI and APS systems
Allow ample time for PO to process prior to
contract expiration
Payment Card may be used up to $2500 ODOT contracts should be used prior to a DAS
contract unless the DAS contract provides better pricing
C. Contracts 1. Things to know about contracts a. Contract numbers are required for entry in the payment card, EDI and APS systems b. Contracts must be set up in OAKS and must match the OAKS sequence i. Allow ample time for Purchase Order (PO) to process prior to contract expiration a) Purchase orders must be final approved and file transferred to OAKS prior to contract expiration. Allow at least five days for processing. 1) Remind approvers that requisition is awaiting their review ii. When searching the DAS webpage by contract on “Find It Fast”, do not include a suffix iii. Understand requirements of Pay Direct contracts c. Payment Card may be used up to $2500 i. District or Central Office Fiscal Officers may have set authority limits based on historical spending trends ii. Override may be required depending on MCC 42
Office of Finance and Forecasting
Lesson Two
Purchasing Contract Administration May 2008
d. ODOT contracts should be used prior to a DAS contract unless the DAS contract provides better pricing
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Purchasing Contract Administration May 2008
Lesson Two
Understanding Contract Suffixes Suffix
Each contract has a suffix specific to each contract vendor The number is not consistent for the vendor or US Bank payment card Not required when looking up contracts in DAS (Find it Fast)
Specific to OAKS
2. When using the paycard, the suffix for US Bank must be used, regardless of which vendor is used a. The suffix number must correspond to US Bank (be conscious of what suffix relates to the vendor) Example: Contract #12345 has three vendors; they will have four suffix numbers because the fourth number is for US Bank. #12345-4. i. Contract # 12345-1 ii. Contract # 12345-2 iii. Contract # 12345-3 iv. Contract # 12345-4 (US Bank) b. US Bank will not be the same suffix across contracts
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Office of Finance and Forecasting
Lesson Two
Purchasing Contract Administration May 2008
Contract Administration It is important to know Contract terms and conditions Pricing requirements of contract Invoice requirements Vendor is subject to payment of damages for default Vendor is subject to debarment
3. It is important to know a. Contract terms and conditions b. Pricing requirements of the contract c. Invoice requirements d. Vendor is subject to payment of damages for default e. Vendor is subject to debarment 4. The vendor cannot be held to the agreed specifications and requirements, if the terms and conditions of the contract are not understood by ODOT a. Assure goods are provided in accordance with the terms of the contract b. Make sure the method of delivery is in compliance with the contract c. Substitutions are not permitted d. Do not accept goods in excess of PO unless modification is processed e. Problems must be reported within 30 days after receipt of product
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Purchasing Contract Administration May 2008
Lesson Two
Contract Administration ODOT personnel are responsible
Inspection & acceptance of services or products Identifying non-conforming goods or defective products Follow-up and expedite Receive Over shipments Lost/Damaged Operation of the product/service
5. ODOT personnel are responsible for administering the inspection and acceptance of services or products and identifying non-conforming goods or defective products a. Follow-up and expedite b. Receive c. Over shipments d. Lost and/or damaged goods e. Operation of the product and/or service
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Office of Finance and Forecasting
Lesson Two
Purchasing Contract Administration May 2008
Complaint to Vendor (CTV) Always attempt to work with the
vendor first
DAS DOT
6. Complaint to Vendor (CTV) a. Always attempt to work with the vendor first b. Forms are found on-line on the DAS website and Accounting website c. DAS i. Vendor complaint to vendor form a) Use when the current issue is unresolved b) http://apps.das.ohio.gov/c2vendor/ ii. Vendor performance survey a) Use when issue is resolved, but need to document b) http://www.procure.ohio.gov/pdf/vsurveyform.doc d. DOT i. Vendor evaluation form a) http://www.dot.state.oh.us/CONTRACT/PDF/Purchase_ VendorEvaluation.pdf ii. Complaints may be filed for a) Poor attitude or lack of cooperation Office of Finance and Forecasting
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Purchasing Contract Administration May 2008
Lesson Two
b) Lack of immediate customer service c) Poor delivery (timeliness, quantity or quality) d) Inadequate knowledge and/or service e) Improper invoicing
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Office of Finance and Forecasting
Lesson Two
Purchasing Contract Administration May 2008
Expectation of Vendor and Purchaser Incorrect labor rates Incorrect parts pricing
7. Vendor and purchaser’s expectations a. Incorrect labor rates i. Vendor invoice must show hours worked and labor rate clearly on the invoice ii. District should not authorize payment of an invoice until labor hours and labor rate are verified b. Incorrect parts pricing i. District should review all pricing before authorizing payment to the vendor
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Purchasing Contract Administration May 2008
Lesson Two
Expectation of Vendor and Purchaser Shipping Sublet Miscellaneous charges are not permitted Parts pricing must be calculated at contracted
rate
8. Shipping a. Emergency purchases to provide expedited shipping i. Must be authorized by another layer of management 9. Sublet a. Must provide the actual sublet invoice b. Five percent mark up c. No travel cost to sublet vendor d. Miscellaneous charges are not permitted e. Parts pricing must be calculated at the contracted rate
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Office of Finance and Forecasting
Lesson Two
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Purchasing Contract Administration May 2008
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Purchasing Contract Administration May 2008
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Lesson Two
Office of Finance and Forecasting
Lesson Three
Purchasing Contract Administration May 2008
Lesson Three: Direct Purchasing Authority
LESSON THREE Direct Purchasing Authority
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Purchasing Contract Administration May 2008
Lesson Three
Direct Purchasing Quote Requirements/Payment Types Quote Levels Dollar Amount
Quotes
Payment type
$0 to $500.00
1 quote
Debit voucher, payment card or EDI
$500.01 to $1,000.00
1 quote
Purchase order, payment card or EDI
$1,000.01 to $2,500.00
2 quotes
Purchase order, EDI, or approval from District/central office payment card administrator
$2,500.01 to $33,500.00
3 quotes
Purchase order or EDI
$33,500.01 and above
CO, Contact Office of Contracts, Purchasing Services
Vendor Limits $50,000.00 per vendor for supplies and personal services if non-contract or nonControl Board purchase $75,000.00 per vendor for real estate leases
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Office of Finance and Forecasting
Lesson Three
Purchasing Contract Administration May 2008
Vendor Spending Limits $50K Limits Must reference contracts when applicable Encourage vendors to bid on contracts Inform Office of Contracts of commodities that should be bid out Do not use vendor subsidiaries to circumvent $50k list Payment card purchases do get added to the $50K limit
A. Vendor Spending Limits 1. $50K Limits a. Must reference contracts when applicable b. Encourage vendors to bid on contracts c. Inform the Office of Contracts of commodities that should be bid out d. Do not use vendor subsidiaries to circumvent the $50K list i.
Southeastern/Equipment Salvage
e. See O.R.C. §125.05 Competitive Selection i.
Office of Finance and Forecasting
…..A state agency wanting to purchase services that cost more than fifty thousand dollars or supplies that cost more than twenty-five thousand dollars shall, unless otherwise authorized by law, make the purchase from or through the department. The department shall make the purchase by competitive selection under section 125.07 of the Ohio Revised Code.
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Purchasing Contract Administration May 2008
Lesson Three
f. See O.R.C. §127.16 Purchasing by Competitive Selection i.
(B) except as otherwise provided in this section, no state agency, using money that has been appropriated to it directly, shall: (1) make any purchase from a particular supplier that would amount to fifty thousand dollars or more when combined with both the amount of all disbursements to the supplier during the fiscal year for purchases made by the agency and the amount of all outstanding encumbrances for purchases made by i. C) any person who authorizes a purchase in violation of division (B) of this section shall be liable to the state for any state funds spent on the purchase, and the attorney general shall collect the amount from the person.
g. Payment card purchases do get added to the $50K limit i.
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Reference $50K via e-mail or on-line, rather than AA
Office of Finance and Forecasting
Lesson Three
Purchasing Contract Administration May 2008
Direct Purchase Authority When do I use it? Not required to be from state required
resources, DAS contracts or DOT contracts The value does not exceed $33,500 for
supplies or $67,000 for services * Be mindful of $50K un-bid purchasing limit
B. When Do I Use Direct Purchase Authority? 1. For non-contract purchases, contact your fiscal office or finance office prior to making the purchase 2. If you have determined your need is not available from any state required resources or from any mandatory DAS or DOT contract 3. You are now ready to make the purchase under authority granted directly to the agency in the Ohio Revised Code 4. Once an agency has determined that it is operating within its authority to create a new contract, it may proceed using Direct Purchase Authority a. Be mindful of $50K un-bid purchasing limit
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Purchasing Contract Administration May 2008
Lesson Three
Direct Purchasing Requisition Funds must be encumbered prior
to purchasing and/or obtaining services
Funds must be encumbered
prior to purchasing and/or obtaining services
Funds must be
encumbered prior to purchasing and/or obtaining services
C. Direct Purchasing Requisition 1. Funds must be encumbered prior to purchasing and/or obtaining services a. This applies to all purchases, including contracts i.
See O.R.C. § 127.67, section 3.12 a) ….If such officer or agent makes or participates in making a contract without such appropriation or authority, he is personally liable thereon, and the state, county, township or municipal corporation in whose name or behalf the contract was made shall not be liable thereon
b. Tear down – facility c. Set up a purchase order prior to beginning work for the estimated amount i.
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Modify the purchase order as needed
Office of Finance and Forecasting
Lesson Three
Purchasing Contract Administration May 2008
Emergency Purchases See Ohio Administrative
Code Chapter 123:5 ODOT considers an
emergency to be a situation which threatens the safety of the traveling public
2. Emergency Purchases a. The Ohio Administrative Code Chapter 123:5 defines an emergency as: A situation which creates a threat to public health, welfare, safety, which may arise by reason of epidemics, riots, equipment failure or such other reasons as may be proclaimed by the governor; or which interrupts the operation of production facilities maintained by the Ohio Penal Industries in its program for employment of prisoners. b. ODOT considers an emergency to be a situation which threatens the safety of the traveling public i.
Mudslides and Snowstorms
ii.
Obstruction in roadway
c. Operational necessity i.
Work with your manager to document operational need. It is very important not to act on one’s belief of an emergency, but to have the support of their manager. If the direct supervisor is not available, a member of management needs to be involved in the purchasing decision.
ii.
An emergency is NOT the result of poor planning a) Facility issues (HVAC, roof, etc.) b) Tractor part in a winter storm
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Purchasing Contract Administration May 2008
Lesson Three
Direct Purchasing Quotes Do not obtain
quotes from family or friends
Clearly define the
item or scope
Do not guide a
purchase in anyway that may be viewed improperly
No verbal quotes!
Request quote on quote form or vendor letterhead
Do not pay a fee for
quotes
Notify parties of the
outcome after the award
D. Direct Purchasing Quotes 1. Clearly define the item or scope a. Use the quote form i.
Provides terms and conditions
b. Provides protection 2. Do not take verbal quotes a. Request the quote on vendor letterhead or quote form b. Retain fax confirmation for non-responsive vendors 3. Do not obtain quotes from family or friends a. Delegate the quote request to someone other than a family member or friend 4. Do not guide a purchase in any way that may be viewed improperly 5. Do not pay a fee for quotes a. This is very uncommon, but if it does occur, contact the Office of Accounting for guidance b. Notify parties of the outcome after the award 60
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Lesson Three
Purchasing Contract Administration May 2008
i.
Office of Finance and Forecasting
The vendor must submit a Public Records Request for the dollar amounts
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Purchasing Contract Administration May 2008
Lesson Three
Direct Purchasing Quotes Quotes obtained after-the-fact are not
legitimate Do not quote subsidiaries When vendors add additional items, it
will be necessary to obtain a new quote
6. Make sure the same owner or person is not getting all the money a. The approver should spot check quotes or visit the company website 7. Quotes obtained after-the-fact are not legitimate a. Districts may still require purchasers to complete this process 8. Do not quote subsidiaries a. Use the same vendors at the same location 9. When vendors add additional items, it is necessary to go back and re-quote if this item is necessary a. If the vendor added an item that was not requested and is not needed, ask the vendor to re-quote without that particular item
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Office of Finance and Forecasting
Lesson Three
Purchasing Contract Administration May 2008
Direct Purchasing Quotes Blanket type quotes are good for up to
one year when noted on the Quote Request Form Get a fresh quote Do not help vendors fill out quotes or bids Do not obtain quotes from vendors when quotes will place the vendor over $50k 10. Blanket type quotes are good for up to one year when noted on Quote Request Form a. Concrete, pipe and other items ordered multiple times b. Get a fresh quote i.
When there is a different or additional purchase the original quantity did not cover
ii.
Do not obtain quotes from vendors if it will place them over the $50K limit
iii.
Payment card purchases do get added to the $50K limit a) Reference $50K via e-mail or on-line, rather than the Appropriation Accounting System (AA system)
11. Do not help vendors fill out quotes or bids a. Do not share bids b. Do not change bids 12. Considerations for breaking a tie a. First vendor to respond b. Timeliness of delivery
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Purchasing Contract Administration May 2008
Lesson Three
c. Fairly distribute the award to vendors who tie often
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Office of Finance and Forecasting
Lesson Three
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Purchasing Contract Administration May 2008
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Purchasing Contract Administration May 2008
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Lesson Three
Office of Finance and Forecasting
Lesson Four
Purchasing Contract Administration May 2008
Lesson Four: Information Technology Purchases
LESSON FOUR Information Technology Purchases
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Purchasing Contract Administration May 2008
Lesson Four
Our Purpose and What We Do Our purpose
To provide the highest quality technology based services in a cost-effective manner
What we do
Provide MBE vendor assistance Provide standardized quotes Submit requests to the Department of Administrative Services/Office of Information Technology for Release and Permit
A. IT Purchases 1. Our Purpose a. Our purpose is to provide the highest quality technology based services in a cost-effective manner 2. What we Do a. Provide MBE vendor assistance b. Provide standardized quotes c. Submit request to Department of Administrative Services/Office of Information Technology for Release and Permit
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Office of Finance and Forecasting
Lesson Four
Purchasing Contract Administration May 2008
ITPR Request Use your BALS ID when logging into ITPR ITPR Form and instructions are found on
DoIT’s intranet site An ITPR is required for the purchase of any
goods or services pertaining to information technology
3. Information Technology Purchase Request (ITPR) a. When logging into ITPR, you will use your BALS ID. These are the same credentials that you use for RFL. b. The ITPR form can be found by selecting ITPR Application on DoIT’s intranet site c. For instructions on completing the ITPR form, visit DoIT’s intranet site and select ITPR instructions d. An ITPR is required for the purchase of any of the following that pertain to information technology i. Hardware ii. Software iii. Telecommunications iv. 2-way mobile radios v.
Training and consulting services
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Purchasing Contract Administration May 2008
Lesson Four
Types of Requests Hardware Any type of physical device or component Software Any type of application or program requiring installation
4. Types of Requests a. Hardware i. Any type of physical device or component a) Batteries (component) b) Cables c) Computers d) Monitors e) Telecommunications 1)
Cell phones
f) 2-way mobile radios g) Digital camera h) Printers i) Memory card b. Software i. Any type of application or program requiring installation 70
Office of Finance and Forecasting
Lesson Four
Purchasing Contract Administration May 2008
Types of Requests Hardware Maintenance Support and/or maintenance on devices or components Software Maintenance Support and/or maintenance on an application or program Other Consulting, training, services, etc. that pertain to technology
c. Hardware maintenance i. Support and/or maintenance on devices or components a) Support and/or warranties on hardware b) Physical devices and/or components should not be listed under this category d. Software maintenance i. Support and/or maintenance on an application or program a) Support and/or warranties on software e. Other i. Consulting, training, services, etc. that pertain to technology f. When submitting an ITPR, it is important to select the different types of purchases correctly. There have been instances where components have been placed under the wrong category which distorts end of year reporting. An example would be batteries or cables placed under hardware maintenance instead of hardware.
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Purchasing Contract Administration May 2008
Lesson Four
Workflow
B. Workflow 1. This is the Division of Information Technology’s workflow when processing IT purchases a. Obtain quotes i.
Quotes need to be obtained per quote requirements
ii.
Consider obtaining quotes from an MBE vendor if you haven’t reached your MBE quota
b. Submit a license agreement and/or terms and conditions if applicable i.
In some instances a license agreement and/or terms and agreement will need to be submitted to Resource Management. In turn, Resource Management will submit to Chief Legal for their review. a) This does not include a click-through license
c. Enter ITPR i.
ITPR application is located on DoIT’s intranet site as well as step-by-step instructions
d. Resource Management Review
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Lesson Four
Purchasing Contract Administration May 2008
i.
Resource Management will review each ITPR and corresponding documentation to ensure completeness and accuracy
e. Prepare Agenda i.
Resource Management will compile all requests and prepare an agenda for the Chief information Officer (CIO)
f. Present for CIO Review and Approval i.
Resource Management typically meets once a week with the Information Technology Deputy Director to reach a decision on each request
ii.
If approved, an approval notification will be sent via e-mail or, when applicable, will be submitted to The Office of Information Technology (OIT) for their review and approval
iii.
If denied, an e-mail will be sent to that effect and you will have the option to resubmit the ITPR
g. Submit to OIT for R&P review and approval i.
If approved, information will be supplied to the requesting party a) Please plan ahead, as this may take a few days to a few weeks
ii.
Office of Finance and Forecasting
If denied, an e-mail to that effect will be sent and resubmitting the request may be an option
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Purchasing Contract Administration May 2008
Lesson Four
Quote Requirements per DAS/Office of IT guidelines Dollar Amount
Quote Levels Quotes
Payment Type
$0 to $1,000.00
1 quote
Payment card, Purchase Order if the vendor does not accept Payment Card
$1,000.01 to $2,500.00
2 quotes
Purchase Order, EDI or Payment Card pending approval from District/Central Office payment card administrator. PDAs, computers and notebooks cannot be purchased using a payment card.
$2,500.01 to $25,000.00
3 quotes
Purchase Order or EDI (if IT Purchase)
$25,000.01 to $50,000.00
3 quotes
R&P approval required (if IT Purchase)
$50,000.01 and above
3 quotes
If non-contract, controlling board approval required
Software Non-contract software purchases may require a license agreement to be reviewed and approved by Office of Chief Legal Counsel Vendor Limits $50,000.00 per vendor if non-contract or non- Controlling Board purchase
C. Quote Requirements 1. Please follow all PCA guidelines with these additional requirements
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Office of Finance and Forecasting
Lesson Four
Purchasing Contract Administration May 2008
Waiver Process OIT Waiver Process This
process was put in place during the purchasing control that took effect January 31, 2008 All IT purchases that would fall under Category 530 and that have a unit cost of more than $300.00 will require an OIT waiver
D. Waivers 1. OIT Waiver Process a. Based upon the purchasing freeze that was put in place in January 2008, there are waivers that are in place at this time that pertain to Category 530. While these waivers are very similar, they each have a different workflow. ii. The OBM Waiver applies to all purchases under Category 530 that are not IT Purchases iii. The OIT Waiver is used for IT purchases b. Until further notice, these waivers should be completed based upon the type of requests (IT or non-IT under Category 530) that is being submitted c. When submitting an IT purchase that requires the OIT waiver, submit your waiver, quotes and any additional documentation or pertinent information to the IT Purchases mailbox at
[email protected] or by faxing to (614) 887-4719
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Purchasing Contract Administration May 2008
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Lesson Four
Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
Lesson Five: Review and Approval Process
LESSON FIVE Review & Approval Process
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Purchasing Contract Administration May 2008
Lesson Five
Internal Control Principles of internal control Maintain adequate records Divide responsibility for related transactions Perform regular and independent reviews
A. Principles of Internal Control 1. Establish responsibilities a. Determine who will be the purchaser and who will be the approver 2. Maintain adequate records a. Keep all source documents i. Invoices ii. Receiving tickets iii. Record retention 3. Divide responsibility for related transactions a. Separation of duties i. Make certain two or more people are part of the process 4. Perform regular and independent reviews a. Quality Assurance Reviews (QAR’s)
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Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
Purchasing Process Review Districts complete
Central Office reviews
Quarterly QAR Reviews
requisitions for contract and quote specifications
Central Office
Accounting provides oversight to quarterly reviews Central Office
Central Office
provides QARs every two years for Districts and Central Office Divisions
Accounting randomly reviews DAS and DOT contracts
B. Purchasing Process Review 1. Districts complete quarterly QAR reviews 2. Central Office responsibilities a. Central Office accounting provides oversight to quarterly reviews b. Central Office Accounting randomly reviews DAS and DOT contracts c. Central Office reviews requisitions for contract and quote specifications d. Central Office provides Quality Assurance Reviews (QAR) every two years for Districts and Central Office divisions e. OBM review – pay card
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Purchasing Contract Administration May 2008
Lesson Five
Central Office Requisition Review Coding Contract Price Miscellaneous Charges PID Project Quotes C. Central Office Requisition Review 1. Coding a. Correct expense/object code, funding 2. Contract a. Items must be on contract and must be on the price list b. Vendor must be on contract for those items 3. Price a. Pricing should match contract price list 4. Miscellaneous charges a. Typically not allowed to be charged on contracts 5. Encumbering after the fact a. Purchase orders must be complete and finalized in OAKS prior to authorizing any purchase or service to be completed 6. PID a. Ellis must be updated with encumbrance
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Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
7. Project a. Correct formatting for DOT projects or state architect projects 8. Quotes a. Provide detailed explanation for large differences in quote dollar amounts
Office of Finance and Forecasting
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Purchasing Contract Administration May 2008
Lesson Five
Direct Purchasing Requisition Changes due to OAKS Contract Purchases
Ensure pricing is correct
Ensure line items, descriptions and vendor address match
United Nations Standard Products & Services Code (UNSPSC) codes, item id, contract line, unit of measure, and price must be correct for DAS catalog requisitions
D. Direct Purchasing 1. Requisition a. If this information is not correct, it will reject at OBM and will require deletion and processing again b. There are built-in edits for ODOT contracts, however, mistakes will slow the process and require rework c. Contract Purchases i. Ensure pricing is correct a) Compare pricing to contract and to OAKS d. Ensure line items and descriptions match in OAKS e. The vendor address needs to match the contract and OAKS i. Vendors can be obsolete but still used, although the purchase order will not be valid
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Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
f. Incorrect information for catalog type requisitions will cause purchase orders to be rejected and reentry will be necessary. The following items must be correct for DAS catalog requisitions: i. United Nations Standard Products & Services Code (UNSPSC) codes ii. Item id iii. Contract line iv. Unit of measure v. Price
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Purchasing Contract Administration May 2008
Lesson Five
Direct Purchasing Requisition Emergency/Confirming
Must be related to the roadways for the motoring public
Should be encumbered prior to the purchase
g. Emergency/Confirming i. Must be related to the roadways for the motoring public ii. Should be encumbered prior to the purchase h. There are exceptions in emergency situations such as flooding. Don’t wait until the invoice is received before entering the requisition. i. Detail to include dates of service, types of service, manpower, equipment, etc. j. Indicate blanket purchases on contract purchases
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Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
Direct Purchasing Requisition Sole Source Ensure there are no other vendors that can provide the product/service
Does not need to be district-wide only
Provide detailed sole source explanation/justification
Sometimes suppliers provided manufacturer’s products at a cheaper price than manufacturer
k. Sole Source i. Just because someone says something is sole source doesn’t mean that it is. Do a little checking yourself; you may be surprised at what you find! ii. If using a different vendor would void your warranty, it is acceptable to use the original vendor iii. Sole source is an item which cannot be purchased from any other vendor a) Ensure there are no other vendors that can provide the product and/or service b) Does not need to be statewide only c) Examples of true sole source 1) Software that is only provided by manufacturer 2) Replacement parts that must be provided by the vendor the original purchase was made from d) Sole source is not self-directed iv. Provide detailed sole source explanation and/or justification v. Sometimes suppliers provide manufacturer’s products at a lower cost than the manufacturer Office of Finance and Forecasting
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Purchasing Contract Administration May 2008
Lesson Five
Direct Purchasing Purchasers and Approvers Ensure Requisitions are Reviewed for: Reasonableness Should match the contract Items are on contract
Pricing Specifications Quotes
Request copies of quotes
Pre-Approval Numbers Correct OAKS fields Vendor information
Address, W-9, Are they in contract?
2. Purchasers and Approvers a. Ensure requisitions are reviewed for i.
Reasonableness
ii.
Pricing a) Match contract
iii.
Specifications
iv.
Quotes a) Request copies of quotes
v.
Pre-approval numbers
vi.
Correct United Nations Standard Products and Services (UNSPSC)
vii.
Vendor information a) Address, W-9, etc.
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Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
Direct Purchasing Approvers Do not approve assuming others have
approved the detail Check the detail yourself Responsibility is not simply pressing F1 Responsibility is for reviewing and approving purchase as processed
3. Approvers a. Do not approve transactions assuming others have reviewed the detail i.
Check the detail yourself
ii.
Responsibility is not simply pressing F1
iii.
Reviewing and approving purchases as processed is your responsibility
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Purchasing Contract Administration May 2008
Lesson Five
Examples Example #1 Tom obtained quotes for the purchase of materials and used his payment card for the purchase. He has processed his transaction and then approved his transaction using his supervisor’s login. Are there any concerns with how Tom handled this transaction?
Example #2 Larry knows the local shop owner. The shop owner has provided Larry with a key to his business so that the District can obtain parts after hours. The shop owner wants to help the community and ODOT as much as possible. Larry is grateful for the ability to obtain parts after hours. Are there any concerns with this scenario?
Example #3 The county manager has a vehicle that was wrecked ten months ago. The vehicle was recently dropped off at the local MAC vendor for repairs. The vendor was not told the vehicle was left for repair. This vendor was not the lowest responsible cost vendor. No dollars were encumbered for this purchase, although the dollar amount would be over the $2,500 payment card threshold. What should the county manager have done before leaving the vehicle for repairs?
Example #4 A vendor provides two hours of equipment operator service time with a rental of equipment. A vendor wanted to know why Steve would not let him provide additional service to his garage. “Steve says that if I do go over the two hours of free service, and need to charge for labor, just charge it as soap. Are there any concerns with this situation?
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Office of Finance and Forecasting
Lesson Five
Purchasing Contract Administration May 2008
Purchasing Things to Know Review of proper purchasing guidelines is
required If guidelines are not followed:
Purchase order requests will not be approved Invoices will not be paid Delay could result in penalty Purchaser and Approvers could become personally liable for paying the vendor
4. Purchasing - things to know a. Review of proper purchasing guidelines are required b. Purchaser and approvers could become personally liable for paying the vendor c. If guidelines are not followed i.
Purchase order requests will not be approved
ii.
Invoices will not be paid
iii.
Delay could result in penalty
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Purchasing Contract Administration May 2008
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Lesson Five
Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Lesson Six: Payment Options – Paycard, EDI and Debit Voucher
LESSON SIX Payment Options Paycard, EDI & Debit Voucher
Office of Finance and Forecasting
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Purchasing Contract Administration May 2008
Lesson Six
Ohio Payment Card Program Ohio Department of Transportation
Introduction to Payment Cards Does NOT supersede State Purchasing
Regulations or ODOT’s Internal Purchasing Regulations
Primarily for the purchase of equipment,
materials and supplies
A. Payment Card Purchasing 1. Uses a. Primarily used for the purchase of equipment, materials and supplies b. Payment cards do not supersede State Purchasing Regulations or ODOT’s Internal Purchasing Regulations
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Card Security The Pay Card, as well as the card
number and expiration date, is for the EXCLUSIVE use of the cardholder Vendors should not keep payment card information on file
2. Card security a. Card sharing can result in discipline b. The payment card is for the EXCLUSIVE use of the cardholder, as well as the card number and expiration date c. Vendors should not keep payment card information on file with the exception of utility payments
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Card Security Secure the card – it should remain
in possession of the cardholder or in a locked safe Violations to policies of the program could result in disciplinary actions Card numbers & partial numbers must be removed from invoices & receipts
d. Secure the card i. It should remain in the possession of the cardholder or in a locked safe ii. Violations to the policy of the program could result in disciplinary actions iii. Card numbers and partial numbers must be removed from invoices and receipts
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Payment Card Program Exclusions Services from a
provider NOT on the approved service vendor list
Travel/Lodging
3. Paycard program exclusions a. Services from a vendor not on the approved service vendor list i. Exception – 10% incidental charge does not have to be on the list. Some examples are glass, wood and key cutting charges. ii. Service or agent fees are allowable up to 15% of the invoice amount, not to exceed $30.00. Fees not disclosed should be disputed. a) This was recently changed from 5% not to exceed $25.00 b. Travel and lodging i. Direct bill payments made with a specific card held by the accounting office only. Remind the vendor ODOT should be direct billed. Give the Central Office address, cardholder’s office name and floor number.
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Payment Card Program Exclusions Medical Services Gasoline - DAS oversees gasoline
credit card program Cash advances Tuition ISTV
c. Medical Services d. Gasoline i. DAS oversees the gasoline credit card program e. Cash advances f. Tuition g. Intra State Transfer Voucher (ISTV)
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Approved Service Vendor List Services, Rentals, Memberships,
Registrations, Subscriptions
Incorporated Vendors or Government
Entities Regulated by the IRS
Updated monthly Current list available on the Finance Web
Page
4. Approved service vendor list a. Uses i. Services ii. Rentals iii. Memberships iv. Registrations v. Subscriptions b. Vendor providing service must be on the approved service vendor list c. Incorporated vendors and government entities are regulated by the IRS i. Vendor type must be Paycard (PC), Corporation (CN) or Government Entity (GE) ii. Vendor type cannot be TI (not a corporation) d. The current list is available on the Finance Web Page and is updated on a monthly basis: http://itcww012/ccvndor/vendorlist.asp i. If needed sooner, vendors can be added as requested e. May require credit for services provided by a vendor not on the SVL (Service Vendor List) Office of Finance and Forecasting
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Payment Card - Tax State of Ohio is tax
exempt
If charged sales tax: Less than $10 - credit not required Greater than $10 credit is mandatory
5. Payment card tax a. The State of Ohio is tax exempt i. The tax exempt number of 311334820 is imprinted on each card ii. A blanket certificate is available at http://intranet.dot.state.oh.us/finance/forms/blanket%20exemptio n.pdf iii. If sales tax is charged a) Credit is not required if less than $10.00 b) Credit is mandatory if greater than $10.00
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Payment Card Adjustments Cardholder must request an adjustment
if: A vendor mis-charged Items are returned or not received
Cardholder must pursue credit where
credit is due, regardless of the amount Processing time varies depending on the merchant processing schedule
6. Payment card adjustments a. Cardholder must request an adjustment if i. A vendor charged in error a) Request a credit if overcharge is greater than $10.00 b) Request an additional charge per the contract pricing if undercharge is greater than $10.00 b. Cardholder must pursue credit where credit is due, regardless of the amount when items are not received or are returned c. The vendor controls the processing time of each credit
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Credit Processing Guidelines Credits less than $250: Process original transaction Indicate a credit in comments screen Follow up with vendor to ensure credit is issued Upon receipt of credit, process the transaction using a negative number and reference original voucher
7. Credit processing guidelines a. For credits less than $250.00 i. Process the original transaction ii. Indicate in the comments screen that a credit will be issued and why iii. Follow up with the vendor to ensure the credit is issued iv. Upon receipt of credit, process the transaction using a negative number and reference the original voucher
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Credit Processing Guidelines Credits of $250 and greater: Do Not update transaction Place voucher on hold Indicate a credit in comments screen Process the original voucher upon receipt of the credit Process credit voucher using a negative number and reference the original voucher number
b. For credits of $250.00 and greater i. Do not update the transaction ii. Place voucher on hold by pressing F2 twice iii. Indicate in the comments screen that a credit will be issued and why a) Update comments weekly, for charges on hold iv. Process the original voucher upon receipt of the credit v. Process the credit voucher using a negative number and reference the original voucher number
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Disputed Transactions Reasons for disputes: Broken
Merchandise Voucher more than the receipt Purchase not made by cardholder
8. Disputed transactions a. Reasons for dispute i. Broken merchandise that merchant refused to replace ii. Voucher is more than the receipt and merchant refused to issue a credit iii. Purchase not made by the cardholder
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Disputed Transactions Cont’d... When a resolution CANNOT be made with the
merchant Flag transaction as “disputed” in the system Contact Fiscal Officer/Payment Card Administrator Complete dispute form and send to the Payment Card Administrator (District & Central Office)
Form must be filed within 30 days
b. When a resolution cannot be made with the merchant i. Flag the transaction as disputed in the system by pressing F3 twice a) Comments must indicate why the transaction is being disputed ii. Contact the Payment Card Administrator to flag the transaction in OAKS. This is critical to avoid the card being shut off. iii. Complete the dispute form and send to the payment card administrator (district and central office) iv. Form must be filed within 30 days a) If not, we are liable for the charge and must process v. Central office will fax back to US Bank c. Once the letters of dispute have been given to the cardholder, it is imperative they be forwarded to the Payment Card Administrator ASAP. If the forms and letters are not received by the date requested from US Bank, the credit will not happen and ODOT will be responsible for paying the charge.
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Disputed Transactions Cont’d... Disputes must be flagged in OAKS to avoid
the card being shut off from purchasing US Bank will issue credit when justified Process original and credit voucher
d. When transactions are charged improperly i. Disputes must be flagged in OAKS by the Paycard Administrator to avoid the card being shut off from purchasing ii. US Bank will issue credit when justified iii. Process original and credit voucher to clear off the system
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Payment Card Roles Segregation of duties for internal control Payment Card Administrator
Central Office & District
Cardholder Approver/Supervisor Alternate entry Payor/Reconciler Final Approver
9. Payment card roles a. Segregation of duties for internal control i. Payment card administrator a) Central Office and District ii. Cardholder iii. Approver/supervisor iv. Alternate entry v. Payor/reconciler vi. Final approver a) Not mandatory
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Processing Time for Each Role Cardholder – two working days Approver & Alternate Approver – two working
days Payor – one working day Purchases must be paid within 5 business days Transactions 30 days old and older are subject to suspension until paid
10. Processing time for each role a. Cardholder – two working days b. Approver & alternate approver – two working days c. Payor – one working day i. The comment screen must be utilized in order to provide any additional information that may be helpful in coding the payment card transaction d. Contractual agreement to reimburse US Bank within five business days e. For transactions 30 days and older, cards are subject to suspension until paid
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Lesson Six
Purchasing Contract Administration May 2008
Cardholder Verify purchase information
on invoice to paycard transaction Enter required fields MBE/EDGE Contract number Quantity Unit of Measure Description How/where used Dollar amount
11. Cardholder a. Verify purchase information on invoice to paycard transaction b. Enter the following required fields in the mainframe system i. MBE / EDGE ii. Contract number iii. Quantity iv. Unit of measure v. Description a) Use practical description (payors usually do not see the invoices) vi. How and where used vii. Dollar amount c. Use the comment screen for quotes, sole source, inventory numbers, ITPR numbers, etc. i. Computer related purchases must obtain ITPR number from DoIT prior to purchase
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d. Do not split a purchase of like supplies and/or services in order to circumvent getting quotes e. Black out credit card number on receipt including the last four digits f. When the receipt is too small for the label, attach the receipt and label to 8.5” X 11” sheet of paper g. Fill out the label / stamp h. Update
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Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Split Paycard Purchases Do not split a purchase of like supplies
and/or services in order to circumvent getting quotes Example of split purchases would be: Same vendor Same day Consecutive invoice numbers Same items or like items
12. Split Paycard Purchases a. Do not split a purchase of like supplies and or services in order to circumvent getting quotes b. Some examples of split purchases would be i. Same vendor ii. Same day iii. Consecutive invoice numbers iv. Same items or like items
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Open Tickets with Vendors Do not use open tickets with vendors when
more than one cardholder is using the same vendor to run open tabs Open tickets are permitted as long as they are for a single cardholder’s transactions.
13. Open Tickets with Vendors a. Do not use open tickets with vendors when more than one cardholder is using the same vendor to run open tabs b. Open tickets are permitted as long as they are for a single cardholders transactions
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Lesson Six
Purchasing Contract Administration May 2008
Detail Entry Group same like items when entering detail Detail 80% of costs
Higher price items
May combine 20% if any one item is not
significant
Lower price items
14. Detail Entry b. Group same like items when entering detail i. Detail 80% of costs a) Higher price items ii. May combine 20% if any one items is not significant a) Lower price items
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Paycard Electronic Log 1) Label to be completed PAYMENT CARD
Date Goods/Services Rec’d_____________ CNT# _________ Inventory #___________ Phone Order Y or N MBE Y or N Signature___________________________ Additional description _________________ ___________________________________ VPC/PCR# __________ Funding_________
2) Submit all finalized documents to the accounting office weekly as transactions occur. Inclusive of all back up documentation. (ie., Ioc’s, list of attendees, agenda, quotes, etc.)
15. Paycard Electronic Log a. Label to be completed b. Dates on the label should reflect the date the goods and/or services were received, not ordered c. Submit all finalized documents to the accounting office weekly, as transactions occur i. Inclusive of all back up documentation
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Paycard Alternate Entry Alternate Entry is:
A data entry function to assist cardholders if on leave, or need assistance with the processing
Does not allow a secondary person to act as a cardholder and authorize purchases
16. Paycard Alternate Entry a. A data entry function to assist cardholders when they are on leave or need assistance with the processing function for payment card purchases b. This is data entry assistance only and does not allow a secondary person to act as a cardholder and authorize purchases on the paycard c. The person assigned to this function must be trained on the payment card system including payment card computer processing and how to process credits and taxes d. The alternate entry person should not sign payment card labels for the cardholder. The cardholder should sign for receipt of all goods/services. e. The alternate entry person should use their own name, not the name of the cardholder, if the cardholder is on long term leave
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Paycard Approver Approvers responsibilities Approve or reject back to the cardholder Do not approve assuming others have reviewed the detail Cardholders cannot approve their own transactions
17. Paycard Approver a. Cardholders cannot approve their own transactions b. May not use another person’s sign on for transaction approval c. May not be an alternate approver to approve ones own transaction i. Do not approve assuming others have reviewed the detail a) Check the detail yourself b) Responsibility is not simply pressing F1 c) Responsibility is for reviewing and approving purchases as processed
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Lesson Six
Purchasing Contract Administration May 2008
Paycard Payor Authorized to assign account coding to
post against the appropriate budget Update or reject back to cardholder Can make changes to:
Contract number, MBE/EDGE, and add comments
18. Paycard Payor a. Authorized to assign account coding to post against the appropriate budget b. May make changes to the following: i. Contract number ii. MBE / EDGE iii. Add comments c. Can reject the transaction back to the cardholder
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Paycard Reconciler Reconciles all cardholder monthly
transactions by the 10th of the following month Ensures additional documentation is attached Notifies Payment Card Administrator when
reconciliation is complete
19. Paycard Reconciler a. Reconciles all cardholder monthly transactions by the 10th of the following month b. Ensures additional documentation is attached i. Quotes for non contract purchases >$1,000 ii. Meeting and employee recognition documents iii. Check for possible split purchases
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Purchasing Contract Administration May 2008
Paycard Final Approver Same as approver Check to see if coded to the appropriate
budget Approve, reject back to the payor, or back to
the cardholder
20. Paycard Final Approver a. Same as approver b. Check to see if transaction is coded to the appropriate budget c. Approve, reject back to the payor, or back to the cardholder i. Approve or reject happens after the accounts payable staff have coded and assigned the object code for the purchase d. Sensitive items check the inventory guidelines e. The final approver will verify that the information is correct. If changes need to be made, the next step is to reject back to the Accounts payable staff or cardholder. A comment must be placed.
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Cardholder Agreement Cardholder will: Seek best value for State Not make personal purchases Follow established purchasing procedures Know how to obtain & use the Payment Card Manual, contracts, Service Vendor list, dispute forms, etc.
21. Cardholder Agreement a. Cardholder will i.
Seek best value for State a) Follow state purchasing rules and regulations
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ii.
Not make personal purchases
iii.
Follow established purchasing procedures
iv.
Know how to access the intranet to obtain use of the payment card manual, contracts, service vendor list, dispute forms, etc.
v.
Will result in disciplinary action if proper procedures are not followed
Office of Finance and Forecasting
Lesson Six
Purchasing Contract Administration May 2008
Electronic Data Interchange (EDI) Primarily designed for vendors capable of
transmitting invoices and purchase orders electronically to ODOT Intended to: Simplify and streamline the procurement process Lower overall transaction costs Pay vendors within 4-5 days Reduce errors
B. Electronic Data Interchange (EDI) 1. Primarily designed for vendors capable of transmitting invoices electronically to ODOT a. Intended to i. Simplify and streamline the procurement process ii. Lower overall transaction costs iii. Pay vendors within 4-5 days iv. Reduce errors b. Quotes are still required c. Blank dollar amount field represents a credit
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Electronic Data Interchange (EDI) Cont’d. Limitations
Anything over $500.00, regardless of contract or non-contract, will require a Purchase Order
d. Limitations i. Anything over $500.00, regardless of contract or non-contract, will require a Purchase Order ii. Utilities
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EDI Disputes EDI invoices may only be disputed
during the purchaser/reviewer function EDI invoices can be disputed for many reasons
2. Disputed EDI Invoices a. EDI invoices may only be disputed during the purchaser/reviewer function b. An EDI invoice may be disputed for the following reasons i. Duplicate billing ii. Missing data iii. Invalid date iv. Goods and/or services not received v. Goods damaged and the vendor is not willing to replace
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EDI Disputes Follow the appropriate steps to delete
the disputed invoice
Place the voucher in dispute status and fill out the EDI deletion request spreadsheet Submit to your fiscal officer and the Central Office paycard Administrator Notify the vendor to re-submit the invoice using a revised invoice number
c. Follow the following steps to delete the invoice: i. Place the voucher in dispute status and fill out the EDI deletion request spreadsheet ii. Submit to your fiscal officer and Central Office paycard Administrator iii. Notify the vendor to re-submit the invoice using a revised invoice number iv. Utilities cannot be disputed/deleted unless the vendor is willing to re-bill v. The Central Office Administrator will delete the disputed invoice
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EDI Credits EDI Credits cannot be processed by
themselves. They need to be merged with another invoice for the same vendor.
3. EDI Credits a. Credits cannot be processed by themselves. They need to be merged with another invoice for the same vendor. i. Up to six invoices can be merged together ii. The net amount of the credit must equal at least .01¢
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Direct Purchasing Debit Voucher Used for making non-contract small
dollar purchases A purchase order is not required unless A pre-approval number is required Community Rehabilitation Program (CRP) or Ohio Penal Industries (OPI) Using a contract
C. Direct Purchasing - Debit Voucher 1. Used for making non contract small dollar purchases a. $500 or less b. Vendor does not accept payment card c. Vendor must be on the appropriation accounting system prior to purchasing d. Services provided by unincorporated vendors i. Not on payment service vendor list e. A purchase order is not required unless i. A pre-approval number is required ii. Community Rehabilitation Program (CRP) or Ohio Penal Industries (OPI) iii. Using a contract 2. Can only be used on contracts if order is BELOW the minimum purchase dollar amount on contract
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Lesson Seven
Purchasing Contract Administration May 2008
Lesson Seven: Purchasing and Ethics
LESSON SEVEN Purchasing & Ethics
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Ethical Considerations Ethical conduct Perception of impropriety Proper ethical conduct is a crucial element of
a successful purchasing program. Anything less is not acceptable to the purchasing professional.
A. Ethical Considerations 1. Ethical Conduct a. Ethical conduct means that all potential vendors are given a fair and equal opportunity to offer their supplies and services to the agency. Any action on the part of the agency, indicating that a particular vendor is being treated differently than others, gives rise to unethical conduct by the agency. b. Innocent lunches, small gifts and tickets to sporting events could lead to accusations of impropriety toward the agency and possible violation of Ohio's ethics laws c. Proper ethical conduct is a crucial element of a successful purchasing program. Anything less is not acceptable to the purchasing professional.
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Lesson Seven
Purchasing Contract Administration May 2008
Ethical Considerations Employees are subject to the ethics laws
found in the Ohio Revised Code
PERCEIVED unethical conduct can have the
same impact as actual violations
d. In Ohio, all employees involved with any aspect of the procurement process, to include their spouses, are subject to the ethics laws found in Ohio Revised Code. Employees should read and fully understand the requirements of these laws and how their conduct in the procurement processes could affect their professional and personal lives. e. Remember: PERCEIVED unethical conduct can have the same impact as actual violations. As a purchasing professional you hold the trust of the public you serve. Don't place yourself, your agency and the state into a position of jeopardizing that trust.
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O.R.C. & Written Contracts Ohio Revised Code §1302.04
B. Contract Considerations 1. O.R.C. §1302.04 a. Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. ...” O.R.C. §1302.04 i. Not an ODOT or DAS competitively bid contract
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Office of Finance and Forecasting
Lesson Seven
Purchasing Contract Administration May 2008
ODOT Forms Use of DAS or ODOT Contract means no contract
from the vendor is needed If asked to sign anything that would alter, amend or modify the terms and conditions of either an ODOT or DAS contract, contact the Office of Contracts or Chief Legal Counsel Direct purchasing through quotes Purchasing from Sole Source
2.
Forms a. If you use a DAS or ODOT contract as the basis of your purchase, YOU SHOULD NOT HAVE TO SIGN ANY CONTRACT FORM FROM THE VENDOR i. If you are asked to sign anything that would alter, amend, or modify the terms and conditions of the DAS or ODOT contract, contact the Office of Contracts or Chief Legal Counsel ii. If you are direct purchasing through quotes, use the standard quote form and attach ODOT’s standard terms and conditions iii. If you are purchasing a sole source item and the vendor hands you their “form” contract, READ THE AGREEMENT and then hand them a standard ODOT addendum to sign
3. Rental Agreements a. Any rental agreement that extends beyond three weeks must be reviewed by The Office of Chief Legal Counsel
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Prior to Contract Execution Agreements are merely written promises
and should be easily understood
Always send your drafts to Chief Legal
Counsel’s office for review prior to sending them to the other party
4. Signing Agreements a. Agreements should not be difficult to read or understand. If any part of the agreement is unclear, rephrase it to state simply and clearly what you intended to state. The clearer and more readable the agreement is, the less likely it is that the parties will later disagree about what a particular provision means. b. Agreements are merely written promises and, as such, are seemingly simple. Yet poorly written agreements regularly result in unhappy and dissatisfied customers. Occasionally such agreements can result in huge unexpected costs. c. Anticipating unexpected events complicates drafting a good agreement. If you have any doubts about whether the agreement correctly and completely reflects the promises made by the parties or contains all the necessary and appropriate terms and conditions, please contact Chief Legal Counsel’s Office and we will be happy to assist you in your efforts to improve contracting procedures at your office or district. d. Always send your drafts to Chief Legal Counsel’s office for review prior to sending them to the other party
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Office of Finance and Forecasting
Lesson Seven
Purchasing Contract Administration May 2008
Prior to Contract Execution After reading the agreement, answer
the following questions:
Who are the parties? What have each of the parties agreed to do? When will the contract commence and terminate? How much will ODOT owe under the contract? How is risk allocated? Is the contract complete? Are all the exhibits attached?
e. After you have read the agreement, you should be able to easily answer the following questions: i. Who are the parties? a) All contracts should be in the name of the State of Ohio, Department of Transportation per O.R.C. §5501.43 b) Whenever possible, use an ODOT contract, not the contract or form provided by the Vendor c) If it is not possible, you should include ODOT’s standard addendum form with the Vendor’s form ii. What have each of the parties agreed to do? a) A well drafted Scope of Work is essential to good contract administration. Make sure that all deliverables or tasks are clearly set forth and that dollar values are assigned to each deliverable and task. iii. When will the contract commence and terminate? a) No contract may extend beyond the end of the State’s biennium, which is June 30 of any odd-numbered year. This biennium ends June 30, 2009. b) No contract should commence before the date that ODOT signs it
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c) No work should commence before the purchase order is finalized in OAKS and AA iv. How much will ODOT owe under the contract? a) Any un-bid contract for supplies and services that exceeds $49,999 must be approved by the State Controlling Board 1) Exceptions: contracts with other state agencies, including public universities and colleges, LPA Agreements, contracts with public utilities v. How is risk allocated? Clauses to watch out for: a) Indemnification – it’s unconstitutional b) Attorney fees or collection fees – ODOT does not pay c) Liquidated damages – ODOT does not pay d) Governing law – only Ohio law should apply vi. Is the contract complete? a) Are all exhibits attached?
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Lesson Seven
Purchasing Contract Administration May 2008
Should You Sign? Signature authority DO NOT SIGN if you do not have the appropriate signature authority; you may be personally liable for the agreement
5. Signature Authority a. Before signing any agreement on behalf of the Director, you should make sure you have the appropriate Director’s Signature Authority. If you do not have the appropriate signature authority to sign a particular agreement on behalf of the Director, or are unsure of the extent of your authority, contact Chief Legal Counsel’s Office. A list of people who are authorized to sign on the Director’s behalf and the extent of their authority can be found on Chief Legal Counsel’s website http://intranet.dot.state.oh.us/ChiefLegal/ b. DO NOT SIGN if you do not have the appropriate signature authority; you may be personally liable for the agreement
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Lesson Seven
Personal Service Contracts Purpose and Need Why do you need it? Scope of Work Review by Chief Legal Counsel Review by Chief of Staff Signature of Director
6. Personal Service Contracts a. Purpose and Need – Why do you need it? i. Must first be approved by the Chief of Staff before you select a vendor b. Scope of Work i. Follow “Helpful Hints” c. Review by Chief Legal Counsel i. Use form contract d. Review by Chief of Staff i. Three quotes are required e. Signature of Director i. All personal service contracts are signed by the Director f. Do not enter into contract services until the contract is signed and a purchase order is issued
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Office of Finance and Forecasting
Lesson Seven
Purchasing Contract Administration May 2008
Examples of Personal Service Contracts Training & Speakers Expert witnesses Administrative hearing and litigation support
services for non-English speaking language groups Public hearing support services Court reporters or other recording services DBE support services Consulting & Engineering services Security and Janitorial Services
g. Some examples of when you would use a Personal Service Contract i. Training and Speakers ii. Expert Witnesses iii. Administrative hearing and litigation support services iv. Public hearing support services (i.e., Interpreters for the deaf) v. Court reporters or other recording services vi. Disadvantaged Business Enterprises (DBE) support services vii. Consulting and engineering services a) Check with Consultant Services first viii. Security and janitorial services a) Check with Facilities first
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Office of Finance and Forecasting
Appendix A: Acronyms
AA – Appropriation Accounting System APS – Automated Purchasing System CIO – Chief Information Officer CN – Corporation CRP – Community Rehabilitation Program CTV – Complaint to Vendor DAS – Department of Administrative Services DBE – Disadvantaged Business Enterprises DPA – Direct Purchase Authority DRC – Department of Rehabilitation and Corrections EDGE – Encouraging Diversity Growth & Equity EDI – Electronic Data Interchange EOD – Equal Opportunity Division GE – Government Entity GDC – General Distribution Contract IT – Information Technology ISTV – Intra State Transfer Voucher ITPR – Information Technology Purchase Request LDC – Limited Distribution Contract LPA – Local Project Assistance MAC – Multiple Award Contract MBE – Minority Business Enterprise
MCC – Merchant Category Code MMA – Master Maintenance Agreement OAKS – Ohio Administrative Knowledge System OBM – Office of Budget and Management OIT – Office of Information Technology OPI – Ohio Penal Industries ORC – Ohio Revised Code PC – Payment Card PCA – Purchasing Contract Administration PO – Purchase Order PRO – Print Request Order QAR – Quality Assurance Review R&P – Release and Permit STS – State Term Schedule SVL – Service Vender List UNSPSC – United Nations Standard Products and Services Code
Appendix B: Purchasing Policy 18-007(P)
Approved:
Policy No: 18-007(P) Effective: August 2, 2006 Responsible Division: Finance and Forecasting Supersedes policy 18-007(P) dated 8/4/03
Gordon Proctor, Director
PURCHASING POLICY POLICY STATEMENT: This policy provides guidance to assure that State and Federal Laws and Regulations are followed when purchasing supplies, equipment, materials, and services.
AUTHORITY: Sections 102.03, 123.152, 125.01- 125.11, 125.31-125.76, 125.081, 127.06, 127.12 127.16, 153.65- 153.71, 2921.42, 2921.43, 4115.31-4115.35, 5147.07, 5501.17, 5501.18, and 5513.02 of the Ohio Revised Code. DAS Directive 06-21 Ohio Ethics Commission Advisory Opinion No. 91-010 REFERENCE: Control Board Manual www.ecb.ohio.gov/Documents/CBManual.pdf Consultant Contracts Administration Manual http://www.dot.state.oh.us/contract/consult_contract_adm_manual.htm Purchasing and Contract Administration Manual http://intranet.dot.state.oh.us/finance/Manuals/Accounting/Purchasingmanual.PDF Project Printing Order http://intranet.dot.state.oh.us/finance/Accounting/Fical%20Analysis/PPOinst.pdf SCOPE: This policy is applicable to all supervisors and employees who make or approve purchases of services, supplies, or equipment on behalf of the Department of Transportation. BACKGROUND AND PURPOSE: This policy supersedes Policy 18-007(P) dated 8/4/03.
Policy No: 18-007(P) Effective: August 2, 2006 Page 2 of 8
I.
REQUIRED SOURCES ODOT will procure all goods and services provided by the sources listed below as required by the Ohio Revised Code (ORC): *Ohio Penal Industries - (OPI) (Section 5147.07) *State Use Program - (SUP) (Sections 4115.31 - 4115.35) - OIH is the current contractor providing management services for the SUP. *DAS State Printing – if the ODOT print shop cannot meet your needs you must use DAS State Printing (Sections 125.31 - 125.76) Department of Administrative Services (DAS) term contracts (Sections 125.01 - 125.11) ODOT Term contracts (Section 5513.02) *If goods or services are offered by any of the required sources above, a written waiver must be obtained from that source in advance to purchase the goods or services from a different vendor.
II.
DIRECT PURCHASE AUTHORITY Purchases of materials, equipment, or services from other than the required sources listed in section I of this policy will be made with the direct purchase authority granted to the Department by DAS in section 125.05 of the ORC. Any purchase made with the Department’s direct purchase authority will be made in a manner which ensures the Department is obtaining the lowest responsible and responsive price. Price quotations will be the primary mechanism for ensuring the best value is obtained. Quotation requirements will be established and communicated each Fiscal Year by the Division of Finance and Forecasting. No purchases shall be authorized or made without first encumbering the funds to pay for it, except in instances where the payment card or debit voucher is legally and administratively acceptable or where an emergency situation exists as defined by ORC Section 5513.02. All purchases shall be made using ODOT’s Automated Purchasing System (APS) or other approved purchasing methods (Paycard, EDI or debit voucher). Sole source purchasing should be avoided, if at all possible. Quotes should be obtained according to established requirements.
Policy No: 18-007(P) Effective: August 2, 2006 Page 3 of 8 Do not split a purchase of like supplies and/or services in order to circumvent any requirement set forth in this policy or as set forth in DAS Directive 06-21. It is important to plan purchases efficiently and economically. Pricing information contained in vendor quotations and bids is confidential information and must not be released or disseminated until the contract or purchase is awarded. All personal service contracts shall use a standard contract form approved by the Chief Legal Counsel. Personal Service contracts over $25,000 shall be approved by the Director or Assistant Directors. Conflicts of interest in the purchasing process shall be avoided at all times. Prior to entering into an ODOT contract, any employee who is involved in recommending, selecting or entering into an ODOT contract with a vendor with whom the employee, employee' s family member or employee' s business associate holds a financial interest, shall report such interest to the Chief Legal Counsel to determine whether a conflict exists. III.
RELEASE AND PERMIT A. ODOT must obtain release and permit authority from OIT for the purchase of computers, telecommunication equipment, and from DAS vehicles, and copiers as required by section 125.06 of the ORC. B. The purchase of various commodities and subsequent request for release and permit is coordinated and overseen by certain Central Office Divisions and Offices within the Department. The list of coordinating office and commodities are as follows: ODOT Print Shop - all printing needs. Division of Information Technology - All IT & telecommunication commodities including hardware, software, IT related personnel services and IT related maintenance. Office of Equipment Management - Vehicles and heavy equipment. Office of Facilities Management - Janitorial contracts through the State Use Program. B.
ODOT must obtain release and permit authority from DAS:
Policy No: 18-007(P) Effective: August 2, 2006 Page 4 of 8 - Whenever a purchase is expected to exceed the single purchase limit established by DAS, - When an anticipated purchase will meet or exceed the vendor limit as established in section 127.16 of the ORC, - For ODOT to have the ability to establish competitively bid ODOT Term contracts for highway related commodities. This is achieved through a joint effort by the Divisions of Contract Administration and Finance & Forecasting and is completed at the beginning of each biennium. C. Any purchase which would cause a vendor to exceed the vendor limit as established in 127.16 of the ORC must have approval from the Controlling Board prior to the purchase. IV.
CONTROLLING BOARD For purchases of supplies, equipment and services, ODOT shall consider whether or not it is necessary to seek Controlling Board approval for those purchases. ODOT shall consider whether the type or source of purchase is exempt from Controlling Board Review, and if the purchase exceeds the Controlling Board threshold amount. The threshold amount is the limit at which a purchase from a particular supplier would amount to $50,000 or more. The amount is determined by combining the amount of all disbursements to the supplier during the fiscal year with the amount of all outstanding encumbrances. This does not include any purchases made by competitive selection or any purchases with the prior approval of the Controlling Board. If the purchase of the supply or service exceeds the threshold amount, and it is necessary to gain Controlling Board approval, each office or division shall coordinate their Controlling Board request with the Office of Legislative Services. The specific types of purchases exempt from Controlling Board review, the sources exempt from Controlling Board review, and more information regarding the vendor limit can be found in the Controlling Board manual at: www.ecb.ohio.gov/Documents/CBManual.pdf
V.
CONSULTANT SERVICES It is intended that ODOT personnel refer to the Consultant Contracts Administration Manual for ODOT’s internal procedures regarding consultant administration and the consultant selection process. These services include but are not limited to, environmental studies, design and plan preparation, construction inspection, bridge inspection and right of way acquisition. Any and all ODOT employees having any role in
Policy No: 18-007(P) Effective: August 2, 2006 Page 5 of 8 the administration of a consultant contract must either possess or have ready access to a copy of this manual. VI.
LANDS, BUILDINGS AND FLEET EQUIPMENT No purchase for, or sale of, ODOT operational lands and/or buildings, which typically includes but is not limited to headquarters, garages, outposts and safety rest areas, will be made without first complying with the OFM Land Acquisition & Disposition form. For further information, contact the Office of Facility Management in central office. All fleet and rolling stock equipment including all replacement and new addition purchases, must meet specific established criteria that will optimize ODOT’s equipment fleet from a life cycle perspective. Examples of criteria are average age targets for each equipment class, target disposal ages, usage objectives, turn-in frequencies, DAS mandates, etc. All equipment purchases must be approved by the Office of Equipment Management.
VII.
MINORITY BUSINESS ENTERPRISES (MBE) ODOT will procure 15% of all eligible goods and services from minority business enterprises which have been certified by the Department of Administrative Services as required by section 125.081 of the ORC. The MBE 15% percentage credit will be a combination of these two components: SetAside and Participation. Set Aside Component: In order for a competitive bid or non bid purchase to count towards the set-aside MBE requirement, the bids or quotes must be solicited solely from minority vendors certified by DAS. Purchases where competitive bids or quotes are solicited from certified MBE vendors and non MBE vendors will not count towards the MBE set-aside component. Participation Component: Represents purchases that are competitively bid or quoted open market, to both DAS certified minority vendors and non-minority vendors, and a certified minority vendor was awarded the contract. In situations where a competitive bid or quote is bid on the open market, ODOT guidance is to pay no more than 10% over the amount the commodity could be obtained from the non-MBE vendor.
VIII.
ENCOURAGING DIVERSITY, GROWTH, and EQUITY (EDGE) ODOT will procure 5% of all eligible construction projects, supplies and services, professional services, information technology services, and architectural and engineering
Policy No: 18-007(P) Effective: August 2, 2006 Page 6 of 8 services, from socially and economically disadvantaged enterprises which have been certified as EDGE vendors by the Department of Administrative Services as required by section 125.081 of the ORC. ODOT will be focusing on our Capital Construction Contract and Consultant agreements to meet this goal. IX.
ELECTRONIC COMMERCE It is ODOT policy to make maximum use of payment cards in procuring goods and services where their use is legally and administratively acceptable. All employee classifications within ODOT are eligible to utilize the payment card. This decision is at the discretion of the employee’s immediate supervisor, Administrator, Central Office Accounting or Deputy Director.
X.
BUY OHIO ODOT will apply preferences to Ohio products in accordance with section 125.09 and 125.11 of the Ohio Revised Code.
XI.
FREQUENT FLYER MILES AND HOTEL DISCOUNTS PERSONAL RESPONSIBILITY All ODOT employees are prohibited from accepting, soliciting, or using the authority or influence of their position to secure, for personal travel, a discounted or free “frequent flyer” airline ticket, hotel stay, or other benefit from an airline, hotel, or other business if they have obtained the ticket or other benefit from the purchase of airline tickets or hotel stay for use in official travel, by the Department. This is in accordance with The Ohio Ethics Commissions Advisory Opinion No. 91-010 and ORC sections 102.03 (D-E), 2921.42(A)(4), and 2921.43(A). All ODOT employees are prohibited from accepting gifts, gratuities, vendor credits, or any other thing of value which would result in personal gain. No employee is permitted to use state funds to purchase retirement awards such as plaques, clocks, watches, etc. Purchasing awards to recognize an employee for their length of service with the agency, or safety related awards are permissible as long as the costs are reasonable.
DEFINITIONS: Controlling Board – a seven member board of the House and Senate which provides oversight and approval for certain capital and operating expenditures by state agencies. In addition, the
Policy No: 18-007(P) Effective: August 2, 2006 Page 7 of 8 board has approval authority over various state fiscal activities such as waivers of competitive selection and increases in appropriation authority. Department of Administrative Services (DAS): the administrative organization that provides oversight and leadership for most state purchasing activities. Encouraging Diversity, Growth, and Equity (EDGE) vendor: a small socially and economically disadvantaged business enterprise owned and controlled by U.S. Citizens who are Ohio residents. EDGE vendors are certified by DAS based on established criteria to determine if they are socially and economically disadvantaged. Minority Business Enterprise (MBE): an individual, partnership, corporation, or joint venture of any kind that is owned and controlled by United States citizens, residents of Ohio, who are and have held themselves out as members of the following economically disadvantaged groups: Blacks, American Indians, Hispanics, and Orientals. Ohio Correctional Industries (OPI): a division of the Department of Rehabilitation and Corrections created to provide work training programs for inmates housed at the various prison facilities. OIH, Inc. (OIH): the current contract vendor for Ohio’s State Use Program, which markets the services and products of sheltered workshops employing people with severe disabilities. OIH assists the workshops in product development and marketing of the product to the state and other customers. Quotation: a verbal or written statement from a vendor indicating the price or fee they will charge for providing a specified quantity of goods or services for a specific period of time. A quote in excess of $500 should be in writing on company letterhead. Sole Source: The only vendor capable of providing a service or commodity. A sole source should be clearly documented and justified. Split Purchase: Any purchase made, intentionally or unintentionally, which results in the circumvention of any limit set forth in this policy such as the DAS single purchase threshold, controlling board threshold, or quotation limits. State Use Program (SUP): A mandatory statewide program whereby state agencies must procure certain products and services from qualified non-profit work centers that provide employment to people with severe disabilities. Vendor limit: a dollar limit established by ORC 127.16 consisting of the total dollar amount of all disbursements and the amount of all outstanding encumbrances for purchases made by the
Policy No: 18-007(P) Effective: August 2, 2006 Page 8 of 8 agency from the vendor in a fiscal year. This excludes purchases made by competitive selection or with the approval of the controlling board. TRAINING: All employees that participate in purchasing activities should be trained on the appropriate policy, statutory requirements, and procedures for the various types of purchasing mechanisms. FISCAL ANALYSIS: There is no negative fiscal impact of implementing this policy. This policy contains DAS purchasing requirements which have been established and are in effect at present.
Appendix C: Purchasing Guidelines for Multiple Award Contracts
Appendix D: Frequently Asked Questions
What is the difference between a state term schedule, a state term contract and a bid term contract? State term contracts and bid term contracts are terms for contracts created through a competitive process (generally Invitations to Bid). A state term schedule is not created through a competitive procurement. The majorities of state term schedules are based on existing federal GSA contracts and are held by manufacturers or software developers.
What is the best way to break a tie between vendors that quote the same price? Break the tie in a fair manner. Some considerations are: 1. First vendor to respond 2. Timeliness of delivery 3. Fairly distribute the award to vendors who tie often
Is it ever appropriate to call three vendors and fill out the quote form? No. The quote should always be completed and signed by the vendor. This limits your exposure.
Do I need a new quote for each purchase? A new quote is needed if the scope of the quote or commodity purchased has changed.
How long is a quote good for? The quote form should include the dates for the vendor to provide the product or service. This would indicate how long the quote is good for. However, the quote cannot be used for more than one year, fiscal or calendar. The quote also cannot continue to be used if the scope of the quote has changed.
May I make multiple purchases off the same quote? Yes, as long as the quote timeframe covers the purchase and the additional items being purchased are items that are covered by the quote.
How do I determine if two vendors are the same vendor, simply operating from different locations? Do your best to determine the vendor relationship. An internet search would be a good tool to use. Most often the purchasers are aware of the vendors and their different businesses and storefronts. This includes vendors who have different tax ID numbers, yet share the same employees, addresses, etc.
Emergency purchases - who determines if it is an emergency? Emergency purchases must be related to the safety of the motoring public. Flooding, severe snowstorms, and obstructions in the roadways could all be considered emergency situations. HVAC, facility type issues are not considered emergencies. Even with emergencies, funds should be encumbered prior to the purchase. Do not wait until an invoice arrive to encumber funds.
What if I need to purchase service and parts? One vendor on contract is lower on parts, but the other vendor on contract is lower on service. How do I choose which contract vendor to use? Utilize local expertise and prior occurrences to determine if the repair will be more labor or parts intensive. The entire cost should be compared, considering distance, towing/hauling, wages for hauling, etc. The mechanic needs to work through his manager to make a decision. Document the situation and the decision made. If the manager is not comfortable in making the decision, he will need to go to the next level of management at his District/Division to obtain guidance in making the decision. It is imperative to have management in the decision making process, to avoid any appearance of impropriety.
How do I choose the lowest responsible cost vendor for 100G? This may not be a hard line definitive choice. Utilize local expertise and prior occurrences to determine which combination of prices for equipment and materials will result in the lowest effective cost for the agency. For example, take into account ODOT Standard Equipment rates and average Highway Technician wages to determine if we should haul materials or have delivered by the vendor. Use your best judgment, with your manager, to make the decision and then simply document how that decision was made in the comments screen. Choosing a vendor because they treat you well is not an acceptable justification. All purchases from multiple award contracts should be made according to the lowest responsible cost for the Department.
When do I have to request an adjustment for an item overcharged or undercharged on a contract? Anytime a contract vendor overcharges, or undercharges, based upon contractual price lists, an adjustment is necessary when the difference in price is $10.00 or greater. (A purchaser may follow-up for less than the $10.00 if the purchaser is instructed to do so by their management.) In any instance, be sure to file a complaint to vendor, or vendor evaluation to document the incorrect charge. For example, if you have an invoice for $500.00, and one part was overcharged by $8.00 and another part was overcharged by $2.00, a credit would be necessary for the full $10.00. If only one part was overcharged by $8.00, an adjustment is not required. The total amount of the invoice is insignificant, the amount of the pricing error, is what determines when an adjustment is necessary. If a vendor does not charge as much as the contract price list, the same $10.00 threshold applies. Be sure to also file a vendor evaluation when a vendor undercharges for DOT contracts, so that Office of Contracts is aware of any price discrepancies that have occurred.
Does sole source apply regionally or statewide? Sole source indicates that there are no other providers for this commodity or service. Just because a vendor is not local and shipping will be charged, this does not justify sole source. Sole source is a very infrequent situation. For example, a manufacturer that assigns dealerships a specific territory does not constitute sole source for that dealership if you are in that territory. Always call the District Fiscal Office, or Central Office Accounting for help in finding vendors when sole source.
What is the process for tear downs or facility type repairs? Obtain a quote from the chosen vendor and set-up a purchase order for the quoted amount prior to beginning the work. It is not necessary to obtain multiple quotes from other vendors, based upon the additional fees that would be incurred for researching the mechanical issue. It is important that the choice of vendor be made upon some research for lowest responsible cost. Understanding the labor rate for local vendors would be helpful in identifying the lowest responsible cost. Choosing the same vendor for each tear-down would not be acceptable, unless there was some type of documentation that they are the lowest responsible cost. At the point that it is determined additional work may be needed, a mod for the additional work should be entered immediately.
How should I manage warranty work? Sometimes the servicing vendor completes work that is not warranty work without any prior authorization to do so. The key to obtaining warranty work and only warranty work is clear communication with the vendor. When choosing a non-contract vendor for warranty work, it is imperative that you ensure the work is truly warranty work, before they complete the repair. Any non-warranty repair must be serviced by the contract vendor.
If I can obtain a cheaper price from a contract vendor, and the total cost does not require contract usage, can I purchase at a lower price? There are typically three different scenarios for contract usage and lower price acceptance. Scenario One: If contract threshold is met, contract must be used and contract pricing applies. For example, if the cost of the item(s) is $800 and the contract must be used for any purchases over $500, the contract vendor must be used, the contract must be referenced for the transaction and the contract price must be paid. Scenario Two: If contract threshold is not met, the purchaser may purchase off contract from any vendor. For example, if the cost of the item(s) is $400, and the contract must be used for any purchases over $1000, the purchaser is not required to use the contract, and may purchase from any vendor. If the choice is not to use the contract, please provide reasoning in comments screen. A justification could be that the price is less expensive from a non-contract vendor. Scenario Three: If contract threshold is not met, the purchaser may purchase off contract from any contract vendor at a lower price, but cannot reference the contract. For example, if you are purchasing from the contract vendor, and the cost of the item(s) is $800, and the contract must be used for any purchase over $1000, however, the vendor is charging less than the contract rate. This is acceptable, but the contract may not be referenced. Justification could be that you are, in fact, using the contract vendor, but you are receiving a cost lower the contracted price, so the contract cannot be referenced. In any situation, if the item is on contract, the vendor is on contract and the contract rate is being paid, the contract should be referenced, regardless of the contract threshold for required usage. How do I activate my payment card? Call 1-800-344-5696 to reach the US Bank automated prompt. Enter the following information when prompted: o Zip code: 43215 o Last four digits of your social security number: this is the last four digits of your employee ID number (e-pay number) o Phone number: 614-752-4220 What do I do if my payment card is stolen? Immediately contact US Bank by calling 1-800-344-5696. Also, contact your agency’s payment card Administrator. The Agency Administrator will work with US Bank to obtain a new card. What circumstances may cause my payment card to be declined? An attempt to purchase from a blocked MCC group, for example kerosene, or if the single or monthly transaction limit is exceeded. VISA has 24 hour protection monitoring.
What procedures do I follow if my payment card is declined at the point of sale? Call US Bank at 1-800-344-5696 to determine the reason the card was declined. Contact your Fiscal Officer and/or your Payment Card Administrator and explain the problem. What is the billing address and phone number for credit cards? The billing address is 30 East Broad St., 34th floor, Columbus, Ohio 43215 and the phone number is (614) 752-4220. Who are the payment card key contacts? The Purchasing Coordinator, the Central Office Payment Card Administrator and the District Payment Card Administrator are the payment card key contacts.
Appendix E: Web Links
DAS complaint to Vendor, issue unresolved http://apps.das.ohio.gov/c2vendor/ DAS Vendor Evaluation Form, issue resolved, but need to document http://www.procure.ohio.gov/pdf/vsurveyform.doc DOT Vendor Evaluation http://www.dot.state.oh.us/CONTRACT/PDF/Purchase_VendorEvaluation.pdf MBE Vendor Search http://www.state.oh.us/das/Eod/MBEsearch/index.asp Completion of MBE applications www.mbe.ohio.gov IT purchase mailbox
[email protected] Copier/Printer pre-approval form http://procure.ohio.gov/pdf/preapproval.htm $50K limit list O:\FINANCE\PaymentCard\50klistFY08website.xls Approved service vendor list http://itcww012/ccvndor/vendorlist.asp Payment card tax blanket certificate http://intranet.dot.state.oh.us/finance/forms/blanket%20exemption.pdf Chief Legal SignatureAuthority http://intranet.dot.state.oh.us/ChiefLegal/
Find it Fast – DAS Contracts http://procure.ohio.gov/proc/finditFast.asp
DAS Contract Search http://procure.ohio.gov/proc/searchCurContracts.asp
DOT Contracts http://intranet.dot.state.oh.us/finance/Odotcon/ctr-list.htm
OPI Purchasing Catalog http://www.opi.state.oh.us/opi/oos/welcomemenu.aspx
Appendix F: Acknowledgement Form
State of Ohio Purchasing Contract Administration Training Acknowledgement The quality and effectiveness of the state purchasing process depends on the commitment from a capable, competent and honest workforce. By signing this form, I acknowledge that I received this training and that: 1.
I have been given a copy of the Purchasing Contract Administration (PCA) Manual and understand State and Agency purchasing laws, policies, procedures and guidelines that were provided in this training.
2.
I understand that I am being entrusted with the authority to make purchases that support the accomplishment of the agency’s mission.
3.
I understand that under no circumstances will I make personal purchases either for myself or others. I further understand that I cannot steer contracts to friends, relatives, or business associates. Abuse of purchasing privileges will result in disciplinary action including termination of employment.
4.
I will follow State and Agency purchasing laws, policies, procedures and guidelines. Failure to do so will result in disciplinary action.
5.
I agree that should I violate the purchasing requirements or purchase for personal gain, I will reimburse the State of Ohio for all incurred charges and any fees related to the collection of those charges.
____________________________ Employee Name (Print)
____________________________
__________________
Employee Signature
Date
Training Requirements Completed
____________________________
__________________
District Fiscal Officer/Trainer Signature
Date
State of Ohio Purchasing Contract Administration Training Acknowledgement The quality and effectiveness of the state purchasing process depends on the commitment from a capable, competent and honest workforce. By signing this form, I acknowledge that I received this training and that: 1.
I have been given a copy of the Purchasing Contract Administration (PCA) Manual and understand State and Agency purchasing laws, policies, procedures and guidelines that were provided in this training.
2.
I understand that I am being entrusted with the authority to make purchases that support the accomplishment of the agency’s mission.
3.
I understand that under no circumstances will I make personal purchases either for myself or others. I further understand that I cannot steer contracts to friends, relatives, or business associates. Abuse of purchasing privileges will result in disciplinary action including termination of employment.
4.
I will follow State and Agency purchasing laws, policies, procedures and guidelines. Failure to do so will result in disciplinary action.
5.
I agree that should I violate the purchasing requirements or purchase for personal gain, I will reimburse the State of Ohio for all incurred charges and any fees related to the collection of those charges.
____________________________ Employee Name (Print)
____________________________
__________________
Employee Signature
Date
Training Requirements Completed
____________________________
__________________
District Fiscal Officer/Trainer Signature
Date
