3.9 Procurement Policies and Procedures
Policy and Procedure 3.9 Procurement
Purpose
The purchase of goods and services is necessary for the smooth operation of ESIP. The aim of the internal control system for the supplying of goods and services is to ensure orders are handled by individuals having skills in evaluating what purchases are required from suppliers offering the best deals, to ensure purchases made do not exceed the budget provided and to ensure purchased goods and services conform with the quantity and price specified in the order.
Methodology
ESIP shall follow certain methods in purchasing goods, equipment and services required for the needs of the organization or its projects. Use of competitive bidding shall be a priority practice. The first criterion in choosing a supplier shall be the lowest price. However, if a supplier does not provide the required level of service or an adequate guarantee, then other criteria shall also be considered. ESIP shall specify in the purchase file the reasons the lowest bid was not chosen.
Due diligence must be followed for acquisitions of goods and services (resources), especially for procurement of resources that include costs for acquisition, operation, storage, maintenance, safeguards, or disposal. All acquisitions should be approved by the Executive Director. To the extent possible, a request for an acquisition must be submitted at least 10 days before the resource must be ordered. A comparative analysis of available resources should be completed prior to procurement. The procurement of resources that cost more than $2000 must follow a formal bidding or quote process to ensure that the resource is acquired at a competitive price.
Purchases under the micro-purchase threshold, currently $3500, are awarded without soliciting competitive quotes; however, to the extent possible, prices are shopped using online and/or local stores.
For purchases above $3500 and below $150,000, a quotation/invoice shall be obtained from two-three qualified sources or from as wide of a range of suppliers deemed practical in terms of time, potential savings and good business practice. Four major factors enter into supplier selection: quality, delivery, service and price. For meeting hotel contracts, ESIP will consider sponsor needs as well as price. These quotes will be reviewed by the Executive Director and the award must be specifically approved in advance by the Executive Director.
For purchases above the simplified acquisition threshold, currently $150,000, ESIP must select vendors or suppliers based on publicly solicited sealed bids or competitive proposals. ESIP will always negotiate for the best value in performance and price, unless specified otherwise in a Government Request for Proposal (RFP). If all non-price evaluation factors are equal, the lowest cost supplier is awarded the order. ESIP will also perform a cost or price analysis for purchases over $150,000, to make independent estimates before receiving bids or proposals.
Purchases from a sole source shall be explained in the purchase file.
To the extent possible, purchases will be combined in an effort to negotiate better terms and prices.
The purchase file shall contain all the documents pertaining to each transaction, i.e. the purchase requisition, quotations, contact information of suppliers purchase contracts or orders, invoices, delivery slips and any other pertinent documents. The purchase file may be in electronic or hard copy form depending on the Organization’s determination of the best method to support and retain purchasing decisions.
Award Types
Awards are typically fixed price, unit price, or time and materials. Other types of awards based on normal commercial practices may be used. The Board of Directors must approve award of any purchase based on cost reimbursement (CR).
Ethical Considerations
Individuals authorized to perform purchasing functions shall:
Avoid the intent or appearance of unethical or uncompromising practices in relationships, actions and communications.
Demonstrate compliance with this policy by adhering to applicable laws and policies using sound business judgment within the authority granted.
Abstain from any private business or professional activity that would create a real or perceived conflict of interest between personal interests and the interest of the Organization. Any potential conflicts must be reported to the Executive Director and the Board of Directors.
Obtain the most competitive pricing possible using best industry practices.
Ensure the review and flow down of applicable grant terms and conditions are incorporated into all purchase orders and subawards.
Ensure that contracts are only made with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of the proposed procurement. Consideration shall be given to such matters as contractor integrity; compliance with public policy, including, where applicable, record of past performance; financial and technical resources or accessibility to other necessary resources. In certain circumstances, contracts with certain parties are restricted by implementation of executive order 12549, “Debarment and Suspension,” at 2 CFR parts 180 and 1880.
Individuals shall be responsible for protecting proprietary and financial information of its suppliers. Use or disclosure of supplier information for other than the purpose of which it has been supplied is strictly prohibited. Supplier pricing information shall not be disclosed outside of the Organization without the prior written approval of the supplier.
Approved by the ESIP Board of Directors on TBD - April 20, 2020.