North Carolina Agency Purchasing Manual North Carolina Department of Administration Division of Purchase & Contract

Transcription

1 North Carolina Agency Purchasing Manual North Carolina Department of Administration Division of Purchase & Contract Revised: July 2006

2 Table of Contents I. Introduction... 5 Statutory Authority and NC Administrative Code Competition II. Glossary... 6 Definitions Abbreviations III. Ethics / Integrity / Responsibility... 9 Ethics Integrity Responsibility IV. Delegations / Exemptions General Delegations (Benchmarks) Special Delegations List of Special Delegations Exemptions V. Purchasing Methods Basic Small Purchases Open Market Solicitations Term Contracts Waivers and Emergencies Waiver of Competition Emergency and Pressing Needs Preferences Nonprofit Work Centers for the Blind and the Severely Disabled Department of Correction Procedures and Records Procedures / Records File Maintenance / Documentation VI. Division of Purchase and Contract (P&C) General Process Requisitions P&C Control Numbers Purchasers Education / Outreach (Compliance / Training) Operations Vendor Complaint Service Board of Award

3 VII. Miscellaneous Rules Seeking Competition Recall of Offers , Facsimile, and Telephone Offers Public Openings Late Offers, Modifications, or Withdrawals Mandatory Conference / Site Visits Evaluations Error / Classifications Extension of Acceptance Time Evaluations Basis for Rejection Lack of Competition Inspection and Testing Partial and Multiple Awards Reciprocal Preference Purchases for Persons with Disabilities Special Provisions Purchase of Used Items Auctions Articles for Special Purposes Various Purchases Purchases for Across-The-Counter Resale Purchases from or Through a State Employee Use of Purchasing Power for Private Gain Cooperative Purchasing Rentals / Leases Lease Purchase / Installment Purchase Contracts Modular Buildings Printing Contractors Notification of Award Guarantees and Warranties Antitrust Violations Advertising Protest Procedures Default Proceedings and Debarment Faithful Performance Other Confidentiality Construction Contracts vs. P&C Payment Plans Inventories and Stores Funds from Different Sources Conditional Grants, etc., in Public Purchasing Post Award VIII. Specifications Purpose Types Standard Specifications Qualified Products List Articles for Special Purposes North Carolina Products Inspections

4 XI. Advertising Requirements X. Environmentally Preferable Procurement Buying Recycled Products Purchasing for Waste Reduction Environmentally Preferable Goods and Services XI. Consultant Services General Applicability of the Section Definition Policy Consultant Contracts with Other State Agencies Relationship of Consultant to State Consultant Contracts Contrary to this Section Authority Requests for Authority to Contract with Consultants Review of Agency Requests Contracting Competitive Proposals Negotiated Consultant Contracts Consultant Contract Modification XII. Historically Underutilized Businesses (HUB) XIII. State Surplus Property Organization Transfer or Sale Trade-In XIV. Appendix P&C Organization N.C. General Contract Terms and Conditions

5 I. INTRODUCTION STATUTORY AUTHORITY AND NC ADMINISTRATIVE CODE This Manual is intended to provide you with all the laws and rules (except those for IT) that must be followed in carrying out the responsibilities of the purchaser for your agency. It applies to the acquisition of all (except Information Technology/IT**) equipment, materials, supplies, printing, and services, through outright purchase, rental, lease, lease-purchase, or installment purchase. Community colleges are exempt from following these rules for all printing and services, and for all acquisitions which involve solely a rental or lease. Community colleges are required by General Statute 115D-58.5 to purchase all supplies, equipment and materials by contracts made by or with the approval of the Division of Purchase and Contract of the Department of Administration. In accordance with Article 3 of Chapter 143 of the General Statutes, the Secretary of the Department of Administration is responsible for administering the State's program for the acquisition and management, and disposal of personal property, as well as, the acquisition of services for state agencies. The Secretary is authorized and responsible for adopting and carrying out rules necessary to protect the public interest. The administration of this program has been delegated to the State Purchasing Officer (SPO) by the Secretary. All agency purchasing personnel should have a copy of the N.C. Administrative Code Title 1 Chapter 5 (P&C Home Page) and Title 4 Chapter 21 (ITS Home Page), this Manual, and access to Article 3 and 3C of Chapter 143 and Article 3D of Chapter 147 of the General Statutes, to provide them with the resources needed to ensure they meet all requirements in conducting their day to day purchasing activities. **All State agencies, except the General Assembly, the Judicial Department and the universities, are required to obtain their IT requirements through Information Technology Services in the Governor s Office. **Community colleges, universities, the Judicial Department, and the General Assembly, may buy through ITS for their IT requirements. COMPETITION The State's purchasing program is based on sound competitive purchasing procedures and organized as a centralized purchasing system. The SPO is responsible for all aspects of purchasing commodities and contractual services by agencies, either directly or indirectly. The SPO has direct responsibility for all acquisitions (except IT) over the established benchmarks set by statute that involve statewide term contracts and open market bids. Although agencies handle purchases under the established benchmarks and by delegation, the SPO is indirectly responsible for these purchases, since he must prescribe Rules for acquiring those needs. Competition is the cornerstone around which public contracting is built. In its best form, it is a mirror of a free and open economy. North Carolina's purchasing program is built North Carolina Agency Purchasing Manual July 2006 Page 5 of 5

6 on the principle of competition. Where it is not sought, or obtained, the reason must be valid and must be documented as part of the public procurement file. The importance of seeking competition exists at all levels of expenditure, not just in those solicitations above benchmarks. Below the benchmarks, the competitive element is just as important and can be sought through some form of competitive solicitation. All agency purchasing personnel must maintain an awareness of the need for and value of competition in every procurement action. The ability to foster competition is a skill required of all agency purchasing personnel. Fostering competition is an attitude more than a procedure or mechanism. It is reflected in the way specifications are written, in searching for new sources of supply, in attempting to make procurement documents simple and inviting, and in everyday courteousness shown to prospective suppliers and contractors. Price should not be considered as the absolute in the competitive arena. The lowest responsive and responsible bid is the benchmark in North Carolina's purchasing program. The lowest responsive and responsible price allows consideration of many factors, such as, terms and conditions, delivery schedules and lead times, types and degrees of service required, inspection and testing procedures, transportation and delivery costs, warranties and guarantees required, etc. The purchaser's responsibility is to evaluate all the factors included in the procurement document to determine the lowest responsive and responsible offer from all offers received. As purchasers, we are entrusted by the taxpayers of this State to spend the monies allotted us in an efficient and effective manner. To accomplish this we must work jointly to promote and protect the basic fundamentals of fair and open competition upon which our State's purchasing program is built. In doing this, the integrity of our purchasing program, statewide, is paramount in maintaining this trust. II. GLOSSARY DEFINITIONS AGENCY: All departments, institutions, boards, commissions, universities, Purchase & Contract, or other units of the State, and community colleges; unless specifically exempted in this Manual by reference. For the purpose of identifying a special responsibility constituent institution, as designated by the University Board of Governors, just the name university(ies) shall be used to distinguish any difference in the rules. AGENCY SPECIFIC TERM CONTRACT: A term contract for use by a specific agency. Depending on the dollar value of the contract, it may be handled by P&C or the agency. BEST VALUE PROCUREMENT: The terminology used in G.S to identify the method required for purchasing information technology commodities and services. COMMODITY: Any equipment, materials, or supplies. Also referred to in this manual as goods and items. COMPETITION: The fair and open solicitation of offers from more than one source; the receipt of offers from more than one source. Competition must be reasonable and adequate for the amount of the expenditure and the specific requirement. North Carolina Agency Purchasing Manual July 2006 Page 6 of 6

7 CONSULTANT SERVICE: Work or task performed by State employees or independent contractors possessing specialized knowledge, experience, expertise and professional qualifications to investigate assigned problems or projects and to provide counsel, review, analysis or advice in formulating or implementing improvements in programs or services. This includes, but is not limited to, the organization, planning, directing, control, evaluation and operation of a program, agency, or department. CONTRACTUAL SERVICE: When an independent contractor performs services requiring specialized knowledge, experience, expertise or similar capabilities for a State agency for compensation from agency funds. The services may include (by way of illustration, not limitation) services such as, maintenance of buildings or equipment, auditing, film production, employee training and food service, provided that the service is not primarily for review, analysis or advice in formulating or implementing improvements in programs or services (in which case rules relating to Consultant Contracts shall be applicable). DELEGATIONS: General Delegation: The authority granted by the SPO for an agency to handle purchases made under a certain dollar amount, in accordance with the guidelines in this manual. Special Delegation: The authority granted by the SPO for an agency to handle a specific or special purchase, where it would serve no practical purpose for the purchase to be handled by P&C. EMERGENCY: A situation which endanger lives, property, or the continuation of a vital program and which can be rectified only by immediate on-the-spot purchase (or rental) of equipment, supplies, materials, printing, or contractual services (also see Pressing Need). HUB (Historically Underutilized Business): Any one of the following: a minority-owned business, a female-owned business, a disabled owned business, a disabled business enterprise, a non-profit workshop for the blind or severely disabled. INFORMATION TECHNOLOGY (IT): Electronic data processing goods and services and telecommunications goods and services, microprocessors, software, information processing, office systems, any services related to the foregoing, and consulting or other services for design or redesign of information technology supporting business processes. INSTALLMENT PURCHASE: A contract in which the agency's established periodic payments are applied to fulfill the payment obligations for ownership of the commodity. Used when ownership of commodity at time of possession is intended. INVITATION FOR BIDS: A formal solicitation document, usually in a standardized format. This document or the RFP is required to be used for competitive procurements over $25,000. Normally used for larger, advertised competitive procurements for commodities. LEASE: A contract conveying from one to another the use of a commodity for a designated period of time in return for established periodic payments. Does not contain an option or an obligation to purchase. North Carolina Agency Purchasing Manual July 2006 Page 7 of 7

8 LEASE-PURCHASE: A contract conveying from one to another use of a commodity for a designated period of time in return for established periodic payments, with an option or obligation to purchase the commodity. Used when outright ownership is uncertain or when it is the intent to delay ownership. NEGOTIATION: The act of making a purchase when all offers have been rejected, or when there is justification for waiving the competitive process, or when an emergency or pressing need arises. OFFER: This term may refer to a proposal, quote, or bid submitted in response to a Request for Proposals, Request for Quotations, Invitation for Bids, or Negotiation. OFFEROR: Company, firm, corporation, partnership, individual, etc. submitting a response to a solicitation document or in response to a negotiation. OPEN MARKET CONTRACT: A contract for the purchase of a commodity or contractual service not covered by a term contract, usually for a definite quantity on a single order. PERSONAL SERVICE: Services provided by a professional individual (person) on a temporary or occasional basis, including (by way of illustration, not limitation) those provided by a doctor, dentist, scientist, or performer of the fine arts and similar professions; the exemption applies only if the individual is using his/her professional skills to perform a professional task; a personal service may also be a consultant service, in which case consultant contracting procedures shall be followed. PRESSING NEED: A need arising from unforeseen causes including, but not limited to, delay by contractors, delay in transportation, breakdown in machinery, or unanticipated volume of work, and which can be rectified only by immediate on-the-spot purchase (or rental) of equipment, supplies, materials, printing, or contractual services (also see Emergency). PURCHASE: The solicitation of, and acceptance of, an offer to (1) provide a service, or (2) lease or rent a commodity, or (3) sell a commodity outright, or (4) sell a commodity through a lease purchase or installment purchase contract. RENTAL: A contract for the right to use a commodity or product for a period of time, usually with payments made at intervals over the period of use, and normally providing for short notice of cancellation. REQUEST FOR PROPOSALS: A solicitation document. This document or the IFB is required to be used for competitive procurements over $25,000. Normally used for larger, advertised competitive procurements for services. It is an alternate acquisition method to the IFB. A RFP may also be handled as a two step process. REQUEST FOR QUOTES: A solicitation document. Normally used for smaller, non-advertised competitive procurements (may include e-quote). RESPONSIBLE OFFEROR: An offeror who has the capability in all respects to perform fully the contract requirements, and the integrity and reliability to assure good-faith performance. RESPONSIVE OFFEROR: An offeror who has submitted an offer which conforms in all material respects to the solicitation document. North Carolina Agency Purchasing Manual July 2006 Page 8 of 8

9 SMALL PURCHASE: The purchase of an item, printing job, or contractual service for $5,000 or less. SOLE SOURCE: When an item or service is available from only one known source of supply. This usually requires research to confirm and documentation for the file. SOLICITATION DOCUMENT: A written Request for Quotation, Request for Proposals, or an Invitation for Bids. STATEWIDE TERM CONTRACT: A term contract handled by P&C for all agencies, unless exempted by statute, rule, or special term and condition specific to that contract. TERM CONTRACT: A contract generally intended to cover all normal requirements for a commodity or contractual service for a specified period of time based on estimated quantities only. Sometimes referred to as "requirements contract" or "indefinite quantity contract". ABBREVIATIONS Abbreviation Meaning Secretary Secretary of the Department of Administration SPO State Purchasing Officer P&C Purchase and Contract Division, Department of Administration HUB Historically Underutilized Business IFB Invitation for Bids IT Information Technology RFQ Request for Quotes RFP Request for Proposals III. ETHICS / INTEGRITY / RESPONSIBILITY ETHICS Ethics and ethical practices are a major concern in the realm of public purchasing today. While laws and rules mesh to provide a mechanism for public purchasing, only people can make it work. In purchasing, as in all fields, there are values of pride and worth, there are standards and ideals, and there are specifics of conduct and performance. Impediments to the process must be detected early and safeguards provided at all levels. This applies both to purchasing personnel and the vendor community. It becomes imperative, therefore, that all public purchasing personnel be entirely cognizant of the necessity for ethical behavior. It takes only the slightest hint of impropriety to cast doubt on behavior. Sometimes, it may be even more of a perception than an actual event. North Carolina Agency Purchasing Manual July 2006 Page 9 of 9

10 INTEGRITY Fairness and impartiality in all phases of the process are an essential ingredient in public purchasing. Dealings with vendors and peers must be open, honest, and objective. Like all service functions, purchasing's justification is the quality of the service it renders. The process cannot be both effective and self-serving; the two are incompatible. In the case of public purchasing, utmost fairness is required in expending public funds. The result of favoritism extended to either a user or seller is the same. The practice is not permissible. No matter how strongly a user may prefer a particular product over others, equivalent products must be given every reasonable consideration. We must commit and adhere to fair and open competition. Integrity is a principal stock in trade for the public purchaser. Integrity is manifested by fairness, openness, and impartiality and can be tarnished by even the slightest appearance of impropriety. Once this occurs, it is very difficult to regain. RESPONSIBILITY If any agency contracts for the purchase or lease of any commodities, printing or services contrary to statutes, or rules adopted thereunder, such contract shall be void and of no effect. In addition, the Executive Officer of that agency shall be personally liable for the costs thereof. IV. DELEGATIONS/EXEMPTIONS GENERAL DELEGATIONS (BENCHMARKS) Under G.S (a)(2) and G.S , the maximum authorized dollar limits (delegation/ benchmark) for purchases of commodities, printing, and services by agencies are: All agencies (except universities) have a delegation of $10,000, unless an increase is approved by the SPO, up to a maximum of $25,000. Each university s benchmark is set by the University Board of Governors, up to a maximum of $500,000. Although the purchasing benchmarks for universities are set by the University Board of Governors, the rules applying to purchases made under those benchmarks are governed by the rules adopted by the Secretary. To help eliminate confusion, the term used to describe the authority to make purchases under an agency s delegation or a university s benchmark, may be referred to herein as a general delegation or delegation. All transactions over the general delegations must be handled or delegated by the SPO. The procedures for handling purchases under the general delegation are covered under Section Purchasing Methods. There are normally two types of delegations - general and special. The differences between these and the conditions under which they are delegated are explained herein. North Carolina Agency Purchasing Manual July 2006 Page 10 of 10

11 Each agency should have a person(s) designated to be responsible for the purchasing functions of the agency. It is recommended that just one office have this responsibility, to ensure consistency and accountability for all expenditures. An agency shall not divide requirements in order to keep them under the general delegation, and thereby avoid the Rules requiring the applicable method for competition. Note: Consultant Services are handled differently. See the Section entitled Consultant Services. When the dollar amount of the expenditure is under an agency's general delegation, the agency is authorized to acquire commodities, printing and contractual services, by purchase, rent, lease, lease purchase, or installment purchase, subject to the following Rules: All commodities and contractual services covered by term contracts must be purchased in accordance with the instructions of those contracts. In situations where a special type item or contractual service is needed for a particular application, the State Purchasing Administrator who handled the term contract should be consulted for appropriate action. The Executive Officer of each agency shall set forth, in writing, purchasing procedures for making small purchases. The SPO may require that a copy of this written procedure be sent to P&C. For definition of small purchase see section V, Purchasing Methods. The specific rules which apply to the procurement process for expenditures over $5,000 are given in Section V. Agencies must be sure they do not exceed their delegation in handling any type of purchase. This includes monthly and quarterly (scheduled buying) purchases and agency specific term contracts which may be established for items acquired on a repetitive basis. The contract value of the original contract period or the renewal option period(s), individually, must be within your delegation. The solicitation document shall include terms and conditions and any other consistent contract language, issued by the SPO, unless prior approval from the SPO is granted. Agencies should monitor purchases under their general delegation to guard against abuse of the system and to ensure that the dollar value received is commensurate with the dollar amount expended. Awarding of contracts under the general delegation shall be the responsibility of the using agency. Rules applying to service and printing contracts do not apply to community colleges. SPECIAL DELEGATIONS By special delegation, the SPO may authorize an agency to purchase specific commodities, printing, or contractual services without limitation as to the expenditure. Such delegation is normally confined, but not limited to, items and quantities, or services which by their nature or circumstance, such as perishability, transportation costs, local conditions or local availability, would serve no practical purpose to be handled by P&C. North Carolina Agency Purchasing Manual July 2006 Page 11 of 11

12 Some special delegations apply to all agencies and some are agency specific. All delegations shall be in writing and made a matter of record. For special delegations applying to all agencies, the publishing of them in this manual is the written approval. Unless otherwise specified by the SPO, special delegations are subject to all of the following conditions: All commodities and contractual services covered by term contracts must be purchased in accordance with the instructions of each term contract. Competition must be solicited, where available. If competition is not available, the reason(s) must be documented in the procurement file. Agencies are required to issue their own solicitation documents. This shall also apply to a waiver. The solicitation document shall include terms and conditions and any other consistent contract language, issued by the SPO, unless prior approval from the SPO is granted. All transactions shall be documented. Awarding of contracts under a special delegation shall be the responsibility of the agency's Executive Officer. However, the SPO may require that offers received under such delegations be sent to P&C for determination of the successful contractor. Any controversial matter arising from a special delegation must be brought to the attention of the SPO. Specific delegations may be subject to additional conditions as determined by the SPO. These conditions shall be submitted to the agency in writing. P&C shall periodically review its special delegations to ascertain the availability of these items or services and their continued suitability for delegation. LIST OF SPECIAL DELEGATIONS These delegations apply to all agencies; however, competition shall be sought where available. Repairs (Non-Construction): Purchasing authority for repairs handled by private sector personnel, regardless of cost, is delegated to the using agency. Where materials are being purchased for a repair and using agency personnel will perform the needed repair, the purchase of the materials must be handled in accordance with normal purchasing procedures outlined in this manual. NOTE: Where any structural changes are to be made in or to an agencyowned building, the proposed project should be handled in accordance with construction statutes and rules applicable to each agency. (See G.S concerning building repairs and renovation) Feed: Authority to purchase feed, including special ingredients, is delegated to using agencies which are engaged in the feeding of animals, poultry and fish. Animals, Poultry and Fish: Authority is delegated to purchase animals, poultry and fish. Athletic Apparel: Authority to purchase athletic apparel is delegated to using agencies. In the purchase of athletic apparel, there are certain considerations North Carolina Agency Purchasing Manual July 2006 Page 12 of 12

13 regarding the safety of the athlete which should remain within the control of the using agency officials. Maintenance of Aircraft: All aircraft maintenance and repair (see Repairs / Non- Construction) whether unexpected or scheduled, is covered by this delegation. This does not include the purchase of equipment, materials, or supplies for the aircraft that is separate and apart from the maintenance or repair being performed. Playground Equipment (Structures): Where the purchase of playground equipment is being handled as a commodity purchase vs. a construction project, the authority to purchase such playground equipment and its installation is delegated to the using agency. Ready-Mix Concrete: Where the purchase of ready-mix concrete is being handled as a commodity purchase vs. a construction project, the authority to purchase such ready-mix concrete is delegated to the using agency. EXEMPTIONS Except as provided in (IV, Special Delegations), it is not mandatory for the items and services listed below to be purchased through P&C; however, competition must be sought where available. o Purchase of liquor; o Perishable (fresh / frozen) articles such as meats, fruit, vegetables, fish, poultry and eggs; o Published material produced by others, such as newspapers, magazines, pamphlets, manuscripts, books, maps, charts, globes, film, filmstrips and recordings (including tapes); o Services provided by individuals by direct employment contracts with the state; o Public utility services (gas, water and electricity); o Services provided which are subject to published tariff rates as established by the State Utilities Commission; o Services which are merely incidental to the purchase of supplies, materials or equipment such as installation services; o Contracts for construction of and structural changes to public buildings; o Personal services provided by a professional individual (person) on a temporary or occasional basis, including (by way of illustration, not limitation) those provided by a doctor, dentist, scientist or performer of the fine arts and similar professions. The exemption applies only if the individual is using his/her professional skills to perform a professional task. A personal service may also be a consulting service, in which case Consultant Services rules apply. o Services provided directly by an agency of the state, federal or local government, or their employees when performing the service as a part of their normal governmental function. In addition to products and services exempted by Statute, the SPO may exempt other products and services from purchase through P&C. o That competition will not enhance the price that the State would receive for the product or service; and, North Carolina Agency Purchasing Manual July 2006 Page 13 of 13

14 o That competition will not enhance the quality of the product or service that the State would receive. Soliciting competition for bakery products and dairy products shall be handled by the agency in accordance with Section V, Purchasing Methods, regardless of the dollar value of the proposed contract, but awarded through P&C if over the agency's delegation. V. PURCHASING METHODS BASIC When the dollar amount of the expenditure is under an agency's delegation, the agency is authorized to acquire commodities, printing, and contractual services, by purchase, rent, lease, lease purchase, or installment purchase, subject to the procedures herein. Once a need is determined by a user at an agency, the user should submit a requisition through the agency s purchasing office. The commodity, printing, or contractual service needed will usually fall under one of the categories given below (For consultant services, See Section XI, Consultant Services ). Small Purchases (Section V) Open Market Solicitations (Section V) Statewide Term Contract (Section V) Agency Specific Term Contract (Section V) Waiver of Competition (Section V) Emergency or Pressing Need (Section V) Correction Preference (Section V) Nonprofit Work Centers for the Blind and the Severely Disabled (Section V) Special Delegation (Section IV) Exemptions (Section IV) SMALL PURCHASES A small purchase is defined as the purchase of commodities, services or printing, not covered by a term contract, involving an expenditure of public funds of five thousand dollars ($5,000) or less. The executive officer or his designee, of each agency shall set forth, in writing, purchasing procedures for making small purchases. The benchmark for small purchases may be set at less than $5,000 at the discretion of the agency s executive officer or designee, but small purchases may not exceed $5,000. The awarding of contracts for small purchases shall be the responsibility of the using agency. The SPO may require a copy of the small purchase procedures be sent to the Division of Purchase and Contract. OPEN MARKET SOLICITATIONS An open market solicitation is for the purchase of a commodity, printing, or service not covered by a term contract. Open market contracts are to be established in accordance with the procedures in Section V-7 where competition procedures are defined. North Carolina Agency Purchasing Manual July 2006 Page 14 of 14

15 TERM CONTRACTS A term contract is a contract intended to cover normal requirements for a commodity, printing, or contractual service for a specified period of time based on predicted usage. It is also referred to sometimes as a requirements contract or indefinite quantity contract. Term contracts are to be established under the procedures given in Section V, Purchasing Methods. There are two basic types of term contracts: Statewide term contract is established by P&C for agency use. Agency specific term contract is established by P & C for use by an agency when a commodity, printing or service is not covered by a statewide term contract, and the contract value exceeds the agency s delegation. Commodities on statewide term contracts are competitively bid. Some considerations in establishing statewide term contracts are as follows: Items most commonly used or purchased by the state; Obtain lower prices through volume discounts; Transportation costs are included in the pricing; For some items, standards have been established and items have been tested; Warranties may be included in the contract; On-line catalogs are available within E-Procurement for processing efficiency. Every statewide term contract and agency specific term contract has different information pertinent to that specific contract. READ EACH CONTRACT CAREFULLY PRIOR TO ORDERING. Most of the statewide term contracts for commodities specify a minimum and maximum quantity (or dollars). Orders below the minimum shall be obtained in accordance with agency procurement procedures. Orders that exceed the maximum quantity must be forwarded to P&C for processing. For needs that exceed the maximum, P&C will determine if the order should be placed with the contractor at the contract price, negotiate the price with the contractor, or solicit new offers for the requirement. In all cases, follow the instructions, which will vary by contract or call the P&C purchaser for guidance. If a waiver, emergency purchase or pressing need arises, a term contract supplier should be given the opportunity to satisfy the requirement, if the requirement is covered by a term contract and time permits such action. North Carolina Agency Purchasing Manual July 2006 Page 15 of 15

16 WAIVERS and EMERGENCIES Waiver of Competition Under certain conditions, and if deemed to be in the public interest, competition may be waived. Conditions permitting waiver include, but are not limited to, the following situations: Performance or price competition is not available; Needed product or service is available from only one source of supply; Emergency or pressing need is indicated; Competition has been solicited but no satisfactory offers received; Standardization or compatibility is the overriding consideration; A donation predicates the source of supply; Personal or particular professional services are required; A particular medical product or service, or prosthetic appliance is needed; Product or service is needed for the disabled and there are overriding considerations for its use; Additional products or services are needed to complete an ongoing job or task; Products are bought for "over the counter" resale; A particular product or service is desired for educational, training, experimental, developmental or Research work; Equipment is already installed, connected and in service, and it is determined advantageous to purchase it; Items are subject to rapid price fluctuation or immediate acceptance; There is evidence of resale price maintenance or other control of prices, lawful or unlawful, or collusion on the part of companies which thwarts normal competitive procedures; The amount of the purchase is too small to justify soliciting competition or where a purchase is being made and a satisfactory price is available from a previous contract; Requirement is for an authorized cooperative project with another governmental unit(s) or a charitable non-profit organization(s); A used item(s) is available on short notice and subject to prior sale; Product or service is available from another governmental agency. Although competition may be waived for proper cause, its use is required wherever practicable. Where waiver is contemplated, agencies may negotiate with a potential vendor in an effort to acquire the quality of commodity, service or printing needed at the best possible price, delivery, terms and conditions, when the expenditure is less than the agency s respective delegation. A solicitation document requesting or inviting an offer(s) shall be issued, including standard language, terms and conditions issued by P&C. A solicitation document requesting or inviting an offer(s) shall be issued by the agency, including standard language, terms and conditions issued by P&C. In instances where there is a question regarding terms and conditions, contact P&C. Negotiations may also North Carolina Agency Purchasing Manual July 2006 Page 16 of 16

17 be conducted with a potential vendor(s) for contracts exceeding an agency s benchmark or delegation, but are subject to the approval of P&C, except where otherwise permitted by rule. If the dollar value of an agency contract exceeds ten thousand dollars ($10,000), but is less than the agency s delegation, and the agency contemplates waiver of competition, then prior review by the Division is required, except when it qualifies as an emergency and time does not permit prior review. The agency shall submit their request for this review via a requisition (or in some other acceptable format), which shall include a description of the requirement, the amount of the expenditure, the recommended vendor, and the justification for the waiver; and shall provide any additional documentation and justification deemed necessary by the SPO for conducting a thorough review. This documentation must be included in the purchase file as a matter of public record and be suitable for review by auditors, public, vendors, and other interested parties. Emergency and Pressing Needs An agency may make purchases of commodities, printing or services in the open market in cases of emergency or pressing need. For this purpose, a pressing need is one arising from unforeseen causes, including but not limited to, delay by contractors, delay in transportation, breakdown in machinery, or unanticipated volume of work. Emergencies are defined as situations which endanger lives, property or the continuation of a vital program and which can be rectified only by immediate on-the-spot purchases or rental of commodities, printing or services. Agencies may negotiate with a potential vendor(s) in an effort to acquire the quality of commodity, service or printing needed at the best possible price, delivery, terms and conditions. A solicitation document requesting or inviting an offer(s) shall be issued, including standard language, terms and conditions issued by P&C. In instances where there is a question regarding terms and conditions, contact P&C. When emergency or pressing need action is necessary, and the expenditure is over the agency's delegation, prior approval shall be obtained from P&C if time permits. If the expenditure is over $10,000 for agencies (regardless of their delegation), or over a university s delegation, an explanation of the emergency or pressing need purchase shall be reported in writing to P&C. P&C shall report such purchases of commodities and printing to the Board of Award as a matter of record. PREFERENCES Nonprofit Work Centers for the Blind and the Severely Disabled Agencies may purchase goods and services directly from a nonprofit work center for the blind and severely disabled as long as: The purchase of goods does not exceed the agency delegation, and The goods or services are not available under a term contract, and The goods or services must be of suitable price and quality, as determined by the agency. North Carolina Agency Purchasing Manual July 2006 Page 17 of 17

18 Competition is not required when making a purchase from a nonprofit work center for the blind and severely disabled. Nonprofit work centers for the blind and severely disabled may still submit offers for contracts. Department of Correction North Carolina has a preference statute (G.S ) that controls the sale of prison industry products and prohibits their sale to the private sector. All agencies shall give preference to Department of Correction products in purchasing articles, products, and commodities which are needed and which are manufactured or produced within the State prison system and offered for sale to them by the Department of Correction. This preference requirement also applies to all community colleges (except printing). Delegation limits do not apply to products purchased from Correction Enterprises. Products available from the private sector and also offered by Correction Enterprises, including those on term contracts, shall be purchased from the private sector only when it is determined that the Correction Enterprises product will not satisfy the requirement or will not be available when needed. The purchase file should contain documentation from Correction Enterprises stating that the item(s) cannot be supplied. Competitive bidding shall not apply to articles or commodities available from Correction Enterprises. Correction Enterprises is required to keep the price of products substantially in accord with that paid by governmental agencies for similar products of equivalent quality. PROCEDURES and RECORDS Except where a waiver, small purchase, special delegation, exemption, emergency or a pressing need is permitted by rule, all purchases involving the expenditure of public funds made by agencies for those commodities, services and printing, not covered by statewide term contracts, shall comply with the following delegations and procedures. The two exceptions to this are when an agency buys from either the Department of Correction or from a Nonprofit Work Center for the Blind and the Severely Disabled (See Section V, Purchasing Methods ). For purchases made by an agency involving an expenditure of public funds over $5,000, up to the general delegation limit: Competition shall be solicited; Solicitation documents requesting or inviting offers shall be issued; and Solicitation documents shall include standard language, including terms and conditions issued by P&C, unless prior written approval is obtained from P&C. If additional terms and conditions are used, they shall not conflict with P&C s standard terms and conditions, unless prior written approval is obtained from the SPO. E-quote or IPS may be used for solicitations below $10,000. North Carolina Agency Purchasing Manual July 2006 Page 18 of 18

19 In addition, agencies, community colleges and universities shall advertise their solicitations on P&C s Interactive Purchasing System (IPS) via the Internet for the following purchases: Agencies and community colleges: For purchases involving an expenditure of public funds exceeding $10,000, up to their maximum delegation limit. Universities: For purchases involving an expenditure of public funds exceeding $25,000, up to their maximum delegation limit. Agencies, community colleges and universities may advertise solicitations of smaller dollar purchases through IPS. The awarding of contracts under an agency s delegation shall be the responsibility of the using agency. Procedures / Records Where the total requirements for commodities, services or printing jobs involve an expenditure of public funds in excess of the agency s general delegation, the competitive bidding procedure as defined in G.S shall be utilized as follows: Sealed offers for commodities and printing shall be solicited by P&C via advertisement; For service contracts, the SPO delegates to agencies the authority to solicit sealed offers for their agency in accordance with the procedures outlined above. After opening and completing the evaluation of offers received, the agency shall prepare a written recommendation for award, and if over the agency s general delegation, shall submit a copy of all offers received and their recommendation of award or other action to P&C for approval or other action deemed necessary by the SPO (Examples: cancellation, negotiation, etc.). Notice of P&C s decision shall be sent to the agency. The awarding of contracts for services shall be the responsibility of the using agency. Sealed offers for statewide term contracts for commodities, printing and services shall be solicited by P&C via advertisement. For service contracts handled by an agency, the agency shall prepare a task description of the services and desired results. Task descriptions shall contain all of the following: The date(s) of service (The contract shall not be for more than three years including extensions and renewals, without the prior approval of P&C.); Detailed specifications or scope of work required; What the State shall furnish; What the contractor shall furnish; The method, schedule, and procedures for billing and payments; and Other subject matters bearing on the conduct of the work. Rules applying to service and printing contracts do not apply to community colleges. North Carolina Agency Purchasing Manual July 2006 Page 19 of 19

20 File Maintenance / Documentation All purchasing records shall be maintained for a period of five years after the expiration date of the contract. Each file shall be identified individually so it can be readily located and referenced either through the NC Your Service system or hard copy files. All purchase transactions shall be documented, with each file containing, as applicable, the following: Original offers if in writing, or written documentation of verbal offers received; Reasons for award or cancellation; Worksheets/evaluations; Vendor list, if used; Written justification for waiver or emergency purchase; Tabulation of offers received; Copy of purchase order(s); Related correspondence; Reason(s) for receiving only one offer in response to a solicitation; Negotiated contracts; and Reasons for not accepting technical proposals. After award of contract, all material in the file, except confidential information, shall be public record. VI. DIVISION OF PURCHASE AND CONTRACT (P&C) GENERAL The purpose of this Section is to provide an overview of what normally happens to a requisition when it is sent to P&C for processing. This section also identifies organization within P&C and provides other general information of importance. PROCESS Requisitions To expedite handling of an agency's requirement, requisitions may be sent to P&C electronically through IPS (online requisitioning). Agencies using E-Procurement should send requisitions via E-Procurement. Hardcopies may also be sent. In either case, the contents of a requisition sent by an agency to P&C should contain at least the following: Agency name, address, and shipping address. Requisition number, if one is used. Authorized signature, unless submitted electronically. Source of funds (Federal, State, Grant, etc., and what percentage of each). Detailed description of the commodity or service desired. Quantity needed. North Carolina Agency Purchasing Manual July 2006 Page 20 of 20

21 Specifications. Any special requirements that apply. Names and addresses of known sources. Agency contact name and phone number. Estimated cost, if known, or amount of available funds for the purchase. Verbal request for P&C to contract for an agency requirement is not an acceptable substitute for a written request, except for emergency or pressing need procurements, in case which written confirmation must follow. P&C Control Numbers Requisitions sent to P&C are assigned a unique, sequential control number. This number allows staff to locate requisitions when a call is received from an agency or from vendors. This number stays with the procurement file throughout its existence. Purchasers The Purchasing Section consists of purchasing groups that are assigned specific commodities and/or services. The purchasers are available to assist agencies with the interpretation of General Statutes, rules and regulations and to process requirements that exceed an agency s delegation. The current organization of the Division of Purchase and Contract and the assignment of commodities can be found on P&C s website at Upon receipt by a purchaser, requisitions are processed as expeditiously as possible. Based on the content of the requisition, appropriate action is determined (i.e., preparation of a bid document, justification for waiver of competition or delegated to the agency for processing). In most cases, a solicitation document is developed and advertised on the Internet via IPS. Based on requirements, a site visit or a pre-bid conference may be necessary. Registered vendors are notified of the solicitation via the Vendor Link NC system. Vendors who register will receive next day notification of procurement opportunities for products and services that they have selected. After the offers are opened, a tabulation of the offers is made online. The offers and a copy of the tabulation are sent to the agency for review. Once the agency completes its review, the original offers must be returned to P&C with the agency s recommendation. If P&C does not agree with the recommendation, the agency is contacted and the matter is resolved. When legal interpretation is needed, a representative of the Attorney General's Office may be contacted by P&C for legal advice. Once a recommendation is finalized, the purchaser presents to the Board of Award the recommendation for award or other action as deemed necessary. North Carolina Agency Purchasing Manual July 2006 Page 21 of 21

22 Education / Outreach (Compliance / Training) P&C shall conduct compliance reviews on purchasing practices at all agencies. The purpose of the compliance reviews shall be for determining if agencies are complying with North Carolina s purchasing statutes and rules. These findings may also determine whether an agency should continue having the same level of delegation, have it reduced, or qualify for an increase. A copy of the compliance report shall be provided to the agency s executive officer, the State Auditor, and the State Budget Officer, any of which are applicable. The compliance officer(s) may schedule a meeting to review an agency s purchasing records for the purpose of a compliance review. The agency shall cooperate with the compliance officer(s) providing them with requested records and adequate office space. Agency purchasing staff shall be available to discuss the purchase transactions. The SPO may lower, or raise if requested, an agency s (excluding the universities) general delegation, if the results of a compliance review merit such action. The SPO may lower the delegation to any level, including the complete removal of the delegation, depending on the nature of any violations found. The SPO shall report to the University s Board of Governors the results of any compliance review conducted at the universities and shall provide recommendations based on those results. The compliance officer s responsibility is not only to review purchase files, but to provide or recommend training and assistance in improving agency purchasing practices. The Education/Outreach team within P&C provides on-going training. The objective is to foster legal and ethical purchasing principles, promote responsible procurement in the publics best interest, ensure compliance with all applicable purchasing laws, establish accountability, and support career development of the purchasing profession. Operations This section has broad responsibility internally and externally for centrally maintained computer systems and processes that support centralized and decentralized purchasing processes. These processes are included in the Interactive Purchasing System (IPS) and known as bid posting, vendor link (registration), purchasing and requisition tracking, and the vendor complaint service. This section also maintains the Internet Home Page and information contained therein at Vendor Complaint Service A centralized agency complaint service has been set up within P&C to handle problems that arise between agencies and vendors. When a problem arises with a vendor, whether it is late delivery or incorrect commodities shipped, etc., the agency s first step should be to contact the vendor directly in an effort to resolve the problem. Written communication or confirmation of verbal contact is highly recommended. If the problem is not resolved satisfactorily within a reasonable time period, or it becomes a recurring problem, then this problem should be reported to P&C on a Vendor Complaint Form, found on P&C s home page, under P&C Links, Division Forms, Vendor Complaint. North Carolina Agency Purchasing Manual July 2006 Page 22 of 22