Administration

Board of Trustees Policy

SUBJECT:

Procurement Policies

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

Policy

Authority and Responsibility for Purchasing Goods and Services

  1. This procurement policy is intended to comply with all applicable laws and procurement regulations of the Commonwealth of Pennsylvania, specifically those outlined in Chapter 35 of the Pennsylvania Code and the Community College Act of 1963.
  2. A Procurement Manager shall be designated by the Board of Trustees for the duties and purposes listed below, but in all cases, the President of the College or Vice President for Administration and Finance may act in such capacity.
  3. The Procurement Manager is responsible for enforcing the College’s procurement policies.
  4. The Vice President for Finance and Administration will establish and the Procurement Manager will maintain procedures to provide for the efficient and responsible conduct of all procurement activities.
  5. Authority to enter into purchase contracts or, in any way, obligate the College for procurement indebtedness is subject to the following approval structure.
    • College Purchasing Agent and other Vice Presidents-purchases below $50,000
    • Vice President of Finance and Administration-purchases up to $100,000
    • College President-purchases up to $250,000
    • Board of Trustees-all goods, equipment or services in excess of $250,000

    All goods, equipment or services of $100,000 or greater must be brought to the Board of Trustees as an informational item. All of these approval limits apply not just to individual purchases but apply cumulatively to purchases from the same vendor during the same fiscal year.

    Because of their significance to the College and the responsibilities of the Board of Trustees, the following professional services regardless of cost require Board approval at the time a change in provider is considered or a new contract for services is required: Public Accounting Services, Banking Services, Legal Services, Insurance Broker Services, Investment Management Services, AND the engagement of any professional service provider with an annual expense of two-hundred fifty thousand dollars ($250,000) or greater.

    Any such negotiations by an unauthorized individual will not be honored by the College, and the individual will encounter a personal obligation to the vendor. Firms ordinarily doing business with the College will be advised that all purchases chargeable to the College must be authorized by an official College purchase order or contract signed by an authorized individual. Exclusive of the petty cash procedures, the College will not reimburse officers or employees for the cost of any such purchases on behalf of the College, unless previous arrangements to that end have been made.

  1. All purchases must be made for the purpose of College activities. Purchasing any goods or services for personal use is prohibited.

Purchases From Related Parties

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

Compliance with Procurement Policies

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

Contract Compliance

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

    Misuse of supplier data will be considered improper handling of institutional data.

Competitive Bidding

  1. The Purchasing Department is responsible for establishing an equitable and efficient competitive bidding process and ensuring that the procedures are followed and appropriate approvals obtained.
  2. Generally, if a total order is Twenty Five Thousand Dollars ($25,000) or more, Twenty Thousand Dollars ($20,000) or more for construction and facilities maintenance contracts; the College must solicit competitive bids or proposals.
  3. The process for purchasing supplies, services and equipment deemed to be publicly biddable is as follows.
    • If a total order is Twenty Five Thousand Dollars ($25,000) or more, the College must solicit competitive bids or proposals by public advertising, electronic publication which is accessible to the general public, issuance to bidders and proposers on the College's bid lists, and/or by issuance to a pre-qualified list of bidders or proposers when the College has conducted a pre-qualification process.
    • The procuring organization will complete a list of requirements or specifications for use by the purchasing department in developing a competitive bid or proposal. A contract will be awarded by the College to the lowest responsive and responsible bidder. In the event bids are received for the same dollar amount, the successful bid will be determined through a flip of the coin.
    • Bids or proposals submitted in response to the notification must be received in writing, in sealed form, by the Board of Trustees, a committee designated for this purpose, or the Procurement Manager if so designated. The bids or proposals will be publicly opened and read at the time and place designated in the notification and will be held for consideration and analysis for subsequent award.
    • The contract for the purchase of the supplies, services and equipment shall be awarded to the lowest responsive and responsible bidder, kind, quality and material being equal, but in all cases, The College shall reserve the right to reject any and all bids or to select a single item from any bid. The College further reserves the right to award the contract on a split order, lump sum, or individual item basis, or all bids or parts of solicitations, to waive informalities in bids and quotes, or to reissue the solicitation.
    • Each bid shall be accompanied by a bond guarantee in the form of a certified check, cashier's check, treasury check, or bid bond in such amount as the Board of Trustees shall determine, but not less than five percent (5%) of the amount bid. However, the President or his or her designee has the right to waive the bid bond up to $100,000 on non-construction bids. In the event any bidder shall, upon award of the contract, fail to comply with the requirements as to the bond guaranteeing the performance of the contract, such bid bond or certified check shall be forfeited.
  4. The following situations are exempt from competitive bid requirements but require backup documentation to obtain the exemption and are still subject to the regular approval process.
    • The equipment can be obtained from only one person or firm (sole source of supply);
    • Competition is precluded because of the existence of patent rights, copyright, or similar circumstances;
    • Goods, equipment or services needed at once because of an emergency may be purchased without bid at the discretion of the President, but must be brought before the Board for retroactive approval at the next available meeting.
    • For professional services (Refer to Page 1);
    • It is impossible to draft, for solicitation of bids, adequate specifications or any other adequately detailed description of the required supplies or service;
    • The contemplated procurement is for components being procured in support of equipment specially designed by the manufacturer;
    • The contemplated procurement is for technical services in connection with the assembly, installation, or servicing or the instruction of personnel therein of equipment of a highly technical or specialized nature;
    • The contemplated procurement is for labor and material required for providing immediate accommodation in support of the installation of new equipment/systems which can be accomplished by a vendor already on site; and it would not be practical to allow another vendor to work on the same site or when it would be considered impractical for another vendor to mobilize and demobilize;
    • The purchase of goods or services from College Contract Suppliers or from State Contracts and/or Educational Procurement Cooperatives approved by the College Board of Trustees. The Purchasing Department is authorized to require competitive bids for purchases from College contract suppliers, State Contract suppliers and/or Educational Procurement Cooperatives if in its judgment, cost savings may be realized or other College objectives accomplished;
    • Contracts involving policies of insurance, surety company bonds, contracts with internet access companies, contracts with public utility services or telephone companies under tariffs on file with the Public Utility Commission, contracts made with another political subdivision of the Commonwealth of Pennsylvania, the federal government and any agency of the Commonwealth of Pennsylvania or any municipality authority;
    • Contracts for education films, film strips, prepared transparencies and slides, prerecorded magnetic tapes and disc recordings, textbooks, prepared kits, models, projectiles, teacher demonstration devices necessary for College use, and library books and materials.
  5. Normally, a minimum of three bids from qualified sources of supply will be required. However, circumstances may exist when fewer than three bids or more than three bids may be appropriate.

    • The Purchasing Department will accept fewer than three bids only in cases where the normal competitive bidding process cannot be conducted. Purchase orders for which at least three bids cannot be obtained must be accompanied a written Request to Waive the Competitive Bidding Process, in which the circumstances are explained. Either the College President or Vice President of Finance and Administration is authorized by the Board of Trustees to sign the waiver.
    • The Purchasing Department is authorized to determine when more than three bids will be required.

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

Requesting Quotations

  1. The College must solicit competitive quotations from at least three (3) responsible vendors for all supplies, services and equipment with a total cost of Five Thousand Dollars ($5,000.00) but less than Twenty Five Thousand Dollars ($25,000.00).
  2. A contract shall be awarded to the lowest responsive and responsible vendor meeting specifications.

Supplies, Services and Equipment Costing less than $5,000

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

Procurement of Equipment

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

Construction and Facility Maintenance Procurement

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

  1. In accordance with Pennsylvania Code §35.51, if a contract equals or exceeds Twenty Thousand Dollars ($20,000.00), the College shall, with public notice, solicit competitive bids and shall award a contract to the lowest responsive and responsible bidder.
  2. If a contract equals or exceeds Five Thousand Dollars ($5,000.00), but is less than Twenty Thousand Dollars ($20,000.00), the College shall solicit competitive quotes from at least three (3) responsible firms.
  3. If a contract is less than Five Thousand Dollars ($5,000.00), the College may award a contract without soliciting competitive bids.
  4. In an emergency in which any part of the College plant may become unusable or cause interruptions to the normal operations of the College, the President may, after consulting with the chairman of the Board of Trustees, and upon approval of the Department of Education, award a contract for emergency repairs.
  5. Bids under public notice shall be received in sealed envelopes at a designated place and time and shall be opened publicly and the contract awarded thereon. The College shall retain the right to accept or reject any or all bids or parts of solicitations, to waive informalities in bids and quotes, or to reissue the solicitation. The College further reserves the right to award the contract on a split order, lump sum, or individual item basis, or such combination as shall best serve the interest of the College unless otherwise specified by the College. In case of errors of price extensions, unit prices shall govern.
  6. Bids under public notice for construction, reconstruction and repair shall be accompanied by a bond with corporate surety or certified check in an amount as the board of trustees determines, but at least 5% of the amount bid. If a bidder, upon award of the contract, fails to comply with the requirements as to a bond guaranteeing the performance of the contract, the bid bond or certified check shall be forfeited.
  7. The bidder to whom the contract is awarded shall furnish bonds to guarantee the performance of the contract and payment for labor and materials. Bonds shall be in compliance with the Public Works Contractors’ Bond Law of 1967 (8 P. S. § § 191—202). Failure to furnish bonds shall void the previous award.
  8. The contractor shall purchase and maintain throughout the period of the contract the insurance listed below and shall provide evidence of such by submitting certificates of insurance to the College within ten (10) days of contract award.
  9. Workers Compensation
    1. statutory coverage
    2. employers liability - 100/500/100
    3. coverage to include all employees of contractor and/or any subcontractors

    Commercial General Liability

    1. including premises and operations, independent contractors, products and completed operations
      • $1,000,000 each occurrence
      • $1,000,000 general aggregate
      • $1,000,000 product/completed operations aggregate
      • $1,000,000 personal liability
      • $50,000 fire liability
      • $5,000 medical payments
    2. College to be named as an additional insured

    Automobile

    1. $1,000,000 combined single limit for bodily injury and property damage
    2. coverage to include all owned, hired and non-owned autos

    Conditions

    All certificates to contain a 60-day notice of cancellation

    1. the contractor shall obtain and furnish the College certificates for any subcontractors subject to the above terms and conditions
    2. general liability policy shall contain a per job location aggregate
    3. all insurance policies and/or bonds will be written with insurance companies licensed to do business in the Commonwealth of Pennsylvania and subject to the approval of the College.

 

mc3-footer