1 can i buy stuff without a bid? yep, but you better be careful! michael s. gifford, c.p.m., phm...

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Can I Buy Stuff Without a Bid?Yep, But You Better Be Careful! Michael S. Gifford, C.P.M., PHM 2010 ©

InstructorMichael S. Gifford, C.P.M., PHM

Housing Agency Procurement Assistance (HAPA)Las Vegas, NV

Office(866)526-7790 Cell(702)236-0275E-mail: [email protected]

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Can I Buy Stuff Without a Bid?Yep, But You Better Be Careful!

Michael S. Gifford, C.P.M., PHM 2010 ©

What will we accomplish during this presentation?

A better understanding of what HUD and the public requires pertaining to noncompetitive procurements.

A renewed commitment to conduct noncompetitive procurements and the ensuing contract awards in an open, fair, reasonable and justified HUD-compliant manner.

An ability to locate in the regulations what HUD wants pertaining to noncompetitive procurements–hence, a better understanding of HUD requirements.

As a result, improved relationships with our Board, our ED, our clients, our contractors, and the public at large.

An understanding of Gifford’s Gospels.

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Gifford’s Gospels

No. 1: “If it ain’t written, it don’t exist.

No. 2: “There are no coincidences in life—everything happens for a reason.”

No. 3: “Whatever we do must be open, fair, reasonable and justified.”

No. 4: “Contractors are not our friends—they are our partners.”

No. 5: “Nothing is free—there is a price to pay for everything.”

No. 6: “Be prepared—if something can go wrong, it will happen at the worst possible moment.”

No. 7: “Luck is where preparation and opportunity meet.”

No. 8: “He/she who writes the contract, the contract is in favor of.”

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Herein we will make references to:

24 CFR 85.36: aka the Common Rule. Issued by Congress. Hereinafter “Part 85.36.” Specific references herein within “{ }.”

HUD Handbook 7460.8 REV 2: 7460.8 issued by HUD to explain Part 85.36 in further

detail. Hereinafter “7460.8” or “HPH.” Specific references herein within “[ ].”

<Many Sample Forms developed by HAPA and HUD are available at no charge on procurementassistance.org>

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Within the Handbook’s or the CFR’s:

Important!!!!! Remember, therein: [HPH: 1.2]

“Shall” and “must” mean that an action or item is mandatory and is required by statute or regulation.

“Should” and “may” mean that the action or item serves to provide guidance and/or best practices but is not mandatory.

!!!PLEASE NOTE-BEWARE!!! HUD has used the term “should” a number of times in

the HPH and then in another part of the HPH uses the term “shall” or “must” in reference to the same issue—an auditor WILL most likely go with the stricter reference as the requirement.

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Relationship of local or State laws with Federal law:

PHAs must comply with the stricter of Federal rules and State/local rules. [HPH: 1.5/13.1]

States. {Part 85.36(a)}

“When procuring property and services under a grant, a State will follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and executive orders and their implementing regulations.”

Therefore, one procurement policy only!

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Procurement Authority: Use of noncompetitive procurements is, per pages a-6 through a-7 of Appendix 1 of the HPH, is typically listed within the HA . . .

Procurement Policy: [HPH: 2.2] Appendix 1 of 7580.8 REV 2 (corrected copy) Combining Policy and Procedures—Not good!

Policy approved by Board of Commissioners. Procedures approved by ED.

HUD approval not typically required Includes stricter of requirements of Handbook 7460.8 REV

2, 24 CFR 85.36 and applicable local laws. Know the difference: Policy—Procedure—Practice.

<procurementassistance.org, “Sample Documents,” Sample Procurement Policy, SF-40a>

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Procurement Planning [HPH: 3.1]

Individual Procurement Plans (IPPs). Typically for larger procurements, but may also be used for

quotes. Establishes deadlines and milestones. Checklist. [HPH: Appendix 2]

<procurementassistance.org, “Sample Documents,” Sample Competitive Solicitation Checklists, SF-5a through SF-5m>

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Documentation: Requirements and Recommendations. [HPH: 3.3] {Part 85.36(b)9}

“Sufficient to detail the significant history of each purchase.”

In writing, in one clearly marked file. Contains all documents pertaining to the issue. Checklist. Records Retention: 3 years after final payment.

{Part 85.36(a)&(b)}

Audit clause to be included in all solicitations. {Part 85.36(i)

(11)}

<procurementassistance.org, “Sample Documents,” Sample Noncompetitive Justification Form, SF-27a>

Gifford’s Gospel: If it ain’t written, it don’t exist.

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Four competitive solicitation methods provided for by HUD:

Quotations for Small Purchases (QSP) aka Quotes [HPH: Chapter 5] {Part 85.36(d)1}

Invitations For Bids (IFB) aka Sealed Bids [HPH: Chapter 6] {Part 85.36(d)2}

Request For Proposals (RFP) [HPH: Chapter 7] {Part 85.36(d)3} aka Competitive Proposals

Request For Qualifications (RFQ) aka Qualifications-based Selection (QBS) Subset of an RFP (hence it is a sub-section within HPH

Chapter 7) [HPH: 7.3] {Part 85.36(d)3.v)}

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Other solicitation/procurement methods provided for by HUD:

Micro Purchases [HPH: 5.2.B]

<$2,000 Must not be in violation of HPH 5.3.C.

Petty Cash Purchases. [HPH: 5.6]

For very small purchases only ($50?). Purchases must not be in violation of HPH 5.3.C.

Procurement Cards. [HPH: 5.7]

Can be an effective tool. Purchases must not be in violation of HPH 5.3.C. Must have written controls (set Policy and Procedure).

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Other solicitation/procurement methods provided for by HUD (con’d):

Noncompetitive Procurements (in each case, complete the Noncompetitive Procurement Justification form)

[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(A) The item is only available from a single source; CAUTION:

Be sure to do a reasonable survey of the marketplace, ensuring that the “item is only available from a single source” (underlining added by me).

DO NOT close your eyes or your ears to other potential sources (e.g. “we are not aware of any other sources” or “we have not heard of any other sources”).

Complete and place in the file the Noncompetitive Procurement Justification Form. Especially note No. (5) thereon.

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(B) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; CAUTION:

Exigency: urgency; a situation calling for immediate attention; pressing needs.

Emergency: a sudden, unexpected occurrence demanding immediate attention.

Neither definition includes: “I forgot!” or “I’ve been too busty to plan.”

Remember the age-old adage, “Your lack of planning is NOT am emergency on my part.”

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(C) The awarding agency authorizes noncompetitive proposals; CAUTION:

Who is the Awarding Agency? Typically, HUD awards your Agency its grants.

Must have from HUD in from HUD writing (Gifford’s Gospel: If it ain’t written, it don’t exist). Verbal “approvals” cannot be proven!

No matter if you receive approval in writing, your Agency is still responsible for what it does.

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}

(D) After solicitation of a number of sources, competitive is determined inadequate; CAUTION:

“Solicitation of a number of sources” means you conduct a full open competitive solicitation.

“Competitive is determined inadequate” means you only received one quote, bid, or proposal in response to the solicitation.

Beware inappropriate competitive solicitation practices that serve to restrict competition and may cause an “inadequate” number of responses (e.g. received one only):

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}



• Not placing an advertisement <SF-4a/SF-4b>; • Not advertising for an adequate period of time; or• Placing the advertisement too close to the pre-conference,

especially if the pre-conference is mandatory (e.g. advertise on Monday, pre-conference on Wednesday).

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}



• Not doing outreach to a reasonable number of prospective quoters/bidders/proposers, especially those who have previously inquired<SF-7a and SF-7e>;

• In appropriately or unnecessarily making pre-conferences mandatory <SF-37a through SF37d> ;

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}



• Issuing specifications/SOW’s that are unduly restrictive or advantageous to a certain firm;

• Answering questions by one firm and not to all firms, via addendum <SF-2>;

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[HPH: 5.2.B] {Part 85.36(d)(4)(i)(A)-(D)}



• Inappropriately utilizing the RFP method to eliminate some firms from consideration (e.g. not evaluating appropriately per the evaluation factors published).

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Contract award directly to another governmental agency [HPH:

14.2]

Much information in Section 14.2 as to how to complete awards to other governmental agencies. Must be for “common goods and services only;” “common,” meaning something that the governmental agency does during its normal course of business.

All following requirements apply (e.g. NOT exempt from ICE and CPA, though rates set by government, such as sewer fees, are exempt from analysis—there is no need to analyze a cost that you cannot compare to anything else or that you have no power to change or influence).

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Recap of methods we have discussed:

Micro Purchases (Noncompetitive) [HPH: 5.2.B]

Quotations for Small Purchases-QSP (Competitive) [HPH: Chapter

5]

Invitation For Bids-IFB (Competitive) [HPH: Chapter 6]

Request For Proposals-RFP (Competitive) [HPH: Chapter 7]

Request For Qualifications-RFQ (Competitive) aka Qualifications-based Selection-QBS) [HPH: 7.3]

Noncompetitive Awards (Noncompetitive); including: sole source; emergency; HUD-approved; single bid/proposal

[HPH: Chapter 8]{Part 85.36(d)(4)} Awards directly to another governmental agency [HPH: 14.2]

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Mandatory requirements for noncompetitive procurements

Independent Cost Estimate (ICE) [HPH: 3.2] Except for rates set by government for the public at large,

which are exempt from analysis (such as sewer fees).

Cost Price Analysis (CPA) [HPH: 10.3, Appendix 12] Price Analysis involves only comparing the proposed costs

with the ICE, as there is no force of competition to compare.

Except for rates set by government for the public at large, which are exempt from analysis (such as sewer fees).

<All referenced forms are available at no charge in the “Documents” area of procurementassistance.org>

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Standard Forms/Mandatory Contract* Clauses. Small Purchases, Non-construction, without Maintenance

Work: Table 5.1. [HPH: 5.10]

Small Purchases, Non-construction, with Maintenance work: Table 5.1; form HUD-5370-C, Section II; if applicable, appropriate Maintenance Wage Rate Determination.

[HPH: 5.10]

Small Purchases, Construction: form HUD-5370-EZ; appropriate wage decision; perhaps bonds. [HPH: 5.10]

*PLEASE NOTE: The various 5369 forms are not contract forms—they are competitive solicitation forms—and have no applicability to the contract that ensues from the solicitation; therefore, it is not appropriate to include them in a contract.


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Standard Forms/Mandatory Contract* Clauses.

Formal Contracts, Non-construction, with Maintenance work: form HUD-5370-C - Section I and form HUD-5370 – Section II; if applicable, appropriate Maintenance Wage Rate Determination. [HPH: 6.5.A.6/10.5.C]

Formal Contracts, Non-construction, without Maintenance work: form HUD-5370-C - Section II. [HPH: 6.5.A.6/10.5.B]



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Standard Forms/Mandatory Contract* Clauses. Formal Contracts, Construction: form HUD-5370-C,

appropriate Wage Rate Decision. [HPH: 6.5.A.6/10.5.A]

Formal Contracts, Design Work: form HUD-51915. [HPH:

7.3.F]

In addition to the aforementioned 5370/51915 forms, ALL contracts must include the thirteen required clauses from 24 CFR Part 85.36(i).



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I hope this information is of a help!

Be sure to visit procurementassistance.org to obtain, at no charge, many forms and competitive solicitation (QSP’s; IFB; RFP’s; RFQ’s) documents.

Thank you!