PURCHASING FUNDAMENTALS AND RISK MANAGEMENT …

1 PURCHASING FUNDAMENTALS AND RISK MANAGEMENT PRESENTATIONPURCHASING WORKSHOPAPRIL 21, 2017 UNIFORM GRANT MANAGEMENT STANDARDS MICHELLE TURNER RANGELFORT BEND COUNTY ATTORNEY S OFFICE, RICHMOND TXGENERAL COUNSEL DIVISION CHIEFBUT FIRST! Purpose:The Uniform Grant MANAGEMENT Standards were established to promote theefficient use of public funds by providing awarding agencies and grantees a standardizedset of financial MANAGEMENT procedures and definitions, by requiring consistency amonggrantor agencies in their dealings with grantees, and by ensuring accountability for theexpenditure of public funds. State agencies are required to adhere to these standardswhen administering grants and other financialassistance agreements with cities, countiesand other political subdivisions of the S REALLY ABOUT 36(b) --AND SHE IS RIGHT!! (b) Procurement (1) Grantees and subgrantees will use their own procurement procedures which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in this COUNTY PURCHASING ACTMICHELLE TURNER RANGELFORT BEND COUNTY ATTORNEY S OFFICE, RICHMOND TXGENERAL COUNSEL DIVISION CHIEFFAIR WARNING!

2 THERE WILL BE BAD HUMOR AND MEMES!COUNTY PURCHASING ACTMICHELLE TURNER RANGELFORT BEND COUNTY ATTORNEY S OFFICE, RICHMOND TXGENERAL COUNSEL DIVISION CHIEFHEY PARTY WHEN I COMMISSIONERS COURT (OR COUNTY) YOU (OR APPLICABLE)WHY COUNTY PURCHASING ACT? SECURE BEST VALUE ON GOODS AND SERVICES STRETCH YOUR DOLLARS WITH COOPERATIVE PURCHASING OPPORTUNITIES INCREASE PURCHASING TRANSPARENCY, GIVING TAXPAYERS A CLEAR PICTURE OF WHERE THEIR MONEY GOESBASIC IDEA:In the procedure for competitive bidding under this subchapter, the commissioners court of the county shall provide all bidders with the opportunity to bid on the same items on equal terms and have bids judged according to the same standards as set forth in the specifications, because doing so Secure Best Value on Goods and Services Stretch your dollars with cooperative PURCHASING opportunities Increase PURCHASING transparency, giving taxpayers a clear picture of where their money goesBASIC RULE:You should assume that all purchases (goods, services, etc.)

3 Can and should be competitively bid out unless you aretold :It might take longer than neededUpside:Much less awkward than explaining what you did (or didn t do)BASIC RULE: (AS STATED IN LAW)Sec. COMPETITIVE REQUIREMENTS FOR CERTAIN PURCHASES. (a) Before a county may purchase one or more items under a contract that will require an expenditure exceeding $50,000, the commissioners court of the county must:(1) comply with the competitive bidding or competitive proposal procedures prescribed by this subchapter;(2) use the reverse auction procedure, as defined by Section (d), Government Code, for PURCHASING ; or(3) comply with a method described by Chapter 2269, Government Code. (construction projects)EXCEPTION TO THE BASIC RULE: Sec. EXEMPTIONS.(a)Acontract for the purchase of any of the following items isexempt from the requirement established by Section the commissioners court by order grants the exemption---but commissioners court by order grants the exemptionSO, WHAT ARE THE EXEMPTIONS (OVERVIEW)?

4 The Uh Ohs (more on this) Business or Professional Service Day Work Land/Right of Way Sole-Source Purchases Food Personal Property as allowed Community and Economic Development Vehicle and Equipment RepairsTHE UH OHS Exemption:PUBLIC (a)(1)Rule:An item is exempt that must be purchased in a case of publiccalamity if it is necessary to make the purchasepromptly to relieve thenecessity of the citizens or to preserve the property of the : (borrowed) Take all appropriate action to consider granting an exemption to thecompetitive bid process as authorized by Local Government Code (a)(1) and authorize purchase of necessary services and supplies by thePurchasing Department, Emergency MANAGEMENT Department, Sheriff, County Judgeor Commissioners as necessary for the County s own relief and emergency assistanceefforts during weather UH OHS Exemption:PUBLIC HEALTH OR SAFETY (a)(2) Rule:An item is exempt if it is necessary to preserve or protect the public health or safety of the residents of the countyExample: Take all appropriate action to consider granting an exemption to the competitive bidprocess as authorized by Local Government Code Section (a)(2) and authorizethe purchase of additional fencing from Atlas Fence Company, pursuant to RFQ 16-040,for an amount not to exceed $4,330 to complete the project at Juvenile Facility.

5 (Fund:Juvenile) Originally listed as another Uh Oh but explain why (a)(2)THE UH OHS Exemption: UNFORESEEN DAMAGE (a)(3) Rule:An item is exempt if it is necessary because of unforeseen damage to public propertyExample: Take all appropriate action to consider granting an exemption to thecompetitive bid process as authorized by Local Government Code (a)(3) for unforeseen repairs to the helicopter, from HelicopterServices, Inc., in an amount not to exceed $159, OR PROFESSIONAL SERVICE Exemption: BUSINESS OR PROFESSIONAL (4)Rule:A purchase is exempt if it for a personal or professional serviceExample: Take all appropriate action to consider granting an exemption to the competitive bid process as authorized by Local Government Code (a)(4) for the purchase of professional services, for commitment hearings to state mental facilities for Fiscal Year 2017 from the following: Travis County for Austin State Hospital; Howard County for Big Spring Hospital; Cherokee County for Rusk State Hospital; Kerr County for Kerrville State Hospital; Wilbarger County for Vernon State Hospital; Bexar County for San Antonio State Hospital; and Kaufman County for Terrell State OR PROFESSIONAL SERVICE Why?

6 So I m your And certain services are not even allowed to be bid Professional services are defined as those performed by a certifiedpublic accountant, licensed architect, physician, optometrist, surgeon,registered surveyor, engineer or any group or association thereof. When procuring architectural or engineering services, the entity shalluse a two-step selection process. First, the entity shall select anindividual or firm capable of performing the service on the basis ofdemonstrated competence and qualifications. The entity shall thenenter into negotiations on a contract at a fair and reasonable priceDAY WORKE xemption: DAY WORKC itation: (5)Rule:Any work performed and paid for by the day is exempt from the competitive bidding process. Example: AGREEMENT FOR FITNESS INSTRUCTOR SERVICES BETWEEN FITNESSAFITNESS (INDIVIDUAL) AND FORT BEND COUNTY ..As sole compensation for the services rendered by CONTRACTOR to COUNTY pursuant to this Agreement, COUNTY agrees to compensate CONTRACTOR in the amount of $ per class taught.

7 The Maximum Compensation for Service provided during the course of this Agreement shall not exceed $2, Counties have the added stipulation that no individual be compensated under this subsection for more than 20 working days in any three-month OF WAY Exemption: LAND/RIGHT OF (6)Rule:Purchase for any land or right-of-way are exempt (but this exception not apply to related)Example: (borrowed) Authorizing the purchase of a drainage easement on a acre tract of land out of the John W. Smith Survey , Abstract No. 708, County Block 4732, Bexar County, Texas, andbeing out of that certain acre tract, as described inVolume 13658, Page 2092, Plat Records of Bexar County, Texas, from PERSON NAME, Owner of Record, in the amount of$19,450 plus applicable closing costs, Boerne Stage Road Project, Precinct Number PURCHASESE xemption: SOLE-SOURCE PURCHASESC itation: (A)(7) Rule: Purchase for items available from one source are exemptExample: Take all appropriate action on Third Addendum to Software Maintenance Agreement between Fort Bend County andZoll Data Systems Inc.

8 , a sole source provider as authorized by Section (a)(7) Texas Local GovernmentCode, in an amount not to exceed $33,595 for FY 2017 maintenance of Rescuenet PURCHASESS tatute gives examples: items for which competition is precluded because of the existence of patents, copyrights, secret processes, or monopolies; films, manuscripts, or books; electric power, gas, water, and other utility services; and captive replacement parts or components for equipment (The replacement of a component or a repair part mayonly be available from the original supplier)But these are examples and not all inclusive. IS IT REALLY A SOLE SOURCE?Why it matters:If an item exempted under Subsection (a)(7) is purchased,the commissioners court, after accepting a signedstatement from the county official who makes purchasesfor the county as to the existence of only one source,must enter in its minutes a statement to that effectHOW EXTRA IS REALLY NECESSARY? AND WHY?

9 ITEMS AVAILABLE FROM ONLY ONE SOURCE WHY IS THIS A SOLE SOURCE? GOOGLE IT ASK OTHER BUYERS ARE THERE SIMILAR PRODUCTS/SERVICESFOODE xemption: Lunch! AKA (8)Rule: Foods are exempted from formal competitive bidding, as statedExample: (borrowed Victoria County) Take all appropriate action pursuant to LocalGovernment Code (a)(8) and grant food bid exemptions at intervalsof six months for the Victoria County Sheriff s Office and Victoria RegionalJuvenile Justice Center and take appropriate LUNCH IS NEVER THAT commissioners court must approve the exemption of food items from sealed competitive biddingrequirements. Counties that approve this exemption, however, must still obtainat least threetelephone or written offersfor the purchase of food itemsat times specifiedby thecommissioners court. On a form approved by the commissioners court, the individual takingtelephone or written quotations must keep arecord of all prices receivedand thevendorscontacted.

10 This information should be kept by the county for at least a year or until the countyauditor has the opportunity to review PROPERTY AS ALLOWED Exemption: Personal (9)Rule: Certain purchase of personal property are exempt at an auction by a state licensed auctioneer; at a going-out-of-business sale; or by a political subdivision of the state, a state agency, or an entity of the federal : (borrowed Victoria County) Take all appropriate action pursuant to pursuant to Local Government Code (a)(9) grant discretionary bid exemption for Victoria County purchases through a state licensed auctioneer and take appropriate AND ECONOMIC DEVELOPMENT Exemption: COMMUNITY AND ECONOMIC DEVELOPMENT (10)Rule:Contracts for Community and economic development services are exempt and alsoCan include Work performed under a contract for communityand economic development made by a county designed toreasonably increase participation by historically underutilized businesses in public contract awards by establishing a contractpercent- age goal for those businessesExample County hereby enters this contract with Local Development Council to provide certain economic development services infurtherance of the County's statutory goals pursuant to Local Government Code , as amended, and to develop andadminister the County's program for local economic development.