Procurement Training 2015

Presented by: Educational Services Center (ESC) Contracts and Purchasing UnitOffice of General CounselCollege Procurement Specialists

Introduction

-Presenters: • Anne Diga, Associate General Counsel• Leila Menzies, VP of Administrative Services• Jim Watson, Contracts Manager• Fabbee Bunag, Contracts Analyst• Daryan Hubbard, Contracts Analyst• Dorothea Mc Farline, Contracts Analyst• Ramona Divinagracia, College Procurement Specialist

(Mission, Pierce and Valley)• Kim Hoffmann, College Procurement Specialist

(East LA, Trade Tech and West LA)• Marcia Webb, College Procurement Specialist

(Harbor, Southwest and City) -Our Audience-Housekeeping Items (Hand-outs and logistics)- Training will not cover SAP entry transaction or Cal Card Policies

Agenda • I. Introduction• II. What is procurement?• III. Who can sign?

• A. Signature authority • B. Personal Liability• C. Conflict of Interest• D. Board Approval

• IV. Types of Procurement Transactions• A. Purchase Order, Purchase Requisition, Short Term Agreement, Request for Contract, Facilities Order• B. Professional Services vs. Personal Services• C. No bid splitting

• V. Types of Competitive Procurement Processes • A. Solicitation of Quotes• B. Request for Proposal• C. Invitation for Bid• D. Request for Qualifications

• VI. What is a contract?• A. Key Contract Terms

• VII. Non-Competitive Procurement Transactions• A. Piggyback contracts, Education materials, Food and Cafeteria Supplies, Emergency Contracts, Finding of

Impracticability, Professional services• B. Master Agreements

• VIII. Public records issues in procurement• IX. Use of Facilities Agreements - Permits and Leases• X. Other Special Procurement Considerations - Donations, Foundation , ASO/ASU, Specially Funded Programs• XI. Wrap-up, Takeaways and Questions

Training Goals

• 1) Develop a basic understanding of board rules, administrative regulations, procurement policies and processes that govern LACCD

• 2) Create an awareness of issues that require further review

before engaging in a procurement transaction

• 3) Help colleges to reduce audit findings • 4) Enable training participants to apply knowledge learned to

factual situations they may encounter

Top 3 Procurement Audit Findings

• 1. Procurement documents lack appropriate signatures.

• 2. Three quotes were not solicited for contracts and purchases subject to this requirement.

• 3. Contracting or purchasing transaction was not approved or ratified by the Board of Trustees within 60 days of commencement.

Pre-Assessment Quiz• 1. True or False? College Presidents may sign all of the following:

• (a) Leases up to 14 days; (b) bond funded construction contracts in the amount of $ 5,000; (c) An equipment lease for $100,000.

• 2. True or False? Civic center permits always require prior authorization by the Board of Trustees.

• 3. True or False? Three quotes are required when using a piggyback agreement.

• 4. True or False? Three quotes are required for contracts and purchases greater than $2,500 but below $5,000.

• 5. True or False? A contract, agreement, vendor proposal and memorandum of understanding are the same legally.

• 6. True or False? A purchase order may be used to buy services.

• 7. True or False? All contracts and purchase orders under the formal bid threshold must be reported to the Board of Trustees within 60 days of commencement.

What is “procurement”?

• The act of obtaining or buying goods and services. The process includes preparation and processing of a demand as well as the end receipt and approval of payment. It often involves(1) purchase planning,(2) standards determination, (3) specifications development, (4) supplier research and selection, (5) value analysis, (6) financing, (7) price negotiation, (8) making the purchase, (9) supply contract administration, (10) inventory control and stores, and (11) disposals and other related functions.

Read more: http://www.businessdictionary.com/definition/procurement.html#ixzz3Ux7VCf00

Who can sign? (Delegation of Signature Authority)

• Board of Trustees are vested with the responsibility to contract and purchase on behalf of the District and its nine colleges.

(Education Code 81655)

• In 2000, limited authority to contract and purchase on behalf of the colleges was delegated by the Chancellor to the College Presidents for certain transactions. (Administrative Regulation B-19)• -Contracts and purchases under formal bid threshold• -Donations• -Civic Center and Permits for Use • -Other transactions listed in B-19

Transactions not delegated to the College President:-Contracts and purchases over the formal bid threshold, leases greater than 5 days, other transactions listed in B-19.

Further delegation of signature

authority • College President may delegate to the Vice President of

Administrative Services and to acting day-to-day substitutes transactions within their authority.

• Any person that is delegated authority by a College President must participate in District-wide Contracts Training Sessions.

Temporary Delegation of Authority

• Any temporary delegation shall be made in writing to the Chancellor and copied to the Deputy Chancellor, Chief Financial Officer, Director of Business Services and General Counsel and must state the specific period of delegation.

• Temporary delegation must only be among the Vice President level.

Personal Liability

• “An employee who acts beyond his or her authority may be held personally liable for any and all moneys the district paid out…” (Education Code 81656)

• “An employee who signs a contract in violation of law or his/her authority may be disciplined. District funds incurred as a result of such actions may be charged to the location which created the liability.”

(Board Rule 7100.10(f))

Conflicts of Interest• No financial interest in any contract in one’s official capacity.

(Government Code section 1090) • Employees of the District and members of the Board of

Trustees shall not have an interest in any contract, other than their individual employment agreement, made by the Board.

(Board Rule 7100.14) - Form 700 Reporting requirements required by Fair Political Practices Act-New Chancellor Directive #152 – Disclosure Form • New Conflicts of Interest Checking Process• New Administrative Regulation C13 and Form C13-A

Board Approval Required • Board of Trustees must authorize or ratify all contracts and

purchases within 60 days of commencement. (Education Code Section 81656)

• College Procurement Specialist require Request for Contract (RFC) and Short Term Agreement (STA) 8 weeks prior to targeted board date.

• Any contract or purchase over the formal bid threshold requires prior board authorization.

Hypothetical #1 • Viola Harmony, VP of Student Services, would like to contract

with a photographer to take pictures at the next graduation ceremony at West Harbor College. Viola’s husband, Harry, is a well-known photographer in the area. She persuades Horatio Horn, VP of Administrative Services, to issue Harry a personal services contract in the amount of $25,000 to photograph the entire graduation ceremony and reception at the College.

• Due to a brief illness, Horatio is unable to sign the agreement in time to reserve Harry’s services for graduation . However, Viola recalls that she was delegated authority last year by the College President, Piper Presley, when both Horatio and Piper were at a CASBO conference in Sacramento together.

• What is wrong with this picture?

5 Minute Break

Procurement Transaction Dollar ThresholdsServices (not construction-related), Supplies, Apparatus and Equipment (Public Contract Code section 20651-20656) • Micro-Purchase $1-$2,499 – While no quotes are required, College

President may determine a lower amount. (Some SFP’s have lower thresholds for quotes (*Federal OMB – requires quotes for all purchases/contracts $1<), best practice would be to solicit quotes for purchases in this threshold.)

• Small Purchase:$2,500-$4,999 = College Purchasing Office • Must solicit at least 3 informal quotes (catalog, website, email,

master agreements, etc.,)*Master Agreement handout • Medium Purchase $5,000 - $85,999 = College Procurement Specialist • Must solicit at least 3 formal written quotes • Large purchase $86,000+ = ESC Contracts and Purchasing Unit • Formal bid – legal advertisement, bid package issued, sealed bids

and public bid opening

Procurement Transaction Types

Purchase Order (PO)

Purchase Requisition (PR->PO)

Short Term Agreement (STA)

Request for Contract (RFC->CO)

Purchase Order• This transaction involves procurement of materials, supplies

and equipment less than $4,999.• Three quotes must be solicited for purchases between $2,500

and less than $5,000.

(Procurement Policy PP 04-04)

Purchase Requisition (PR->PO)

This transaction involves procurement of materials, supplies and equipment over $5,000 up to statutory bid threshold are reviewed and approved by the College Procurement Specialists.

Procurement policy requires that written quotes be solicited from three or more potential suppliers, or utilize Chancellor Directive #142 – Master Agreements or piggyback contracts.

Procurement Policy 04-05

Purchase Requisitions (PR) (Cont’d)Purchases over statutory bid threshold will be handled by the Contracts and Purchasing Unit at the Educational Services Center (ESC).

The ESC Contracts and Purchasing District Unit will solicit proposals, request formal bids publicly, or utilize Chancellor Directive #142 or piggyback contracts.

Purchases will need to be ratified by the Board of Trustees before the ESC Contracts and Purchasing Unit releases the PO.

Procurement Policy 04-06

Short Term Agreements (STA)

The Short Term Agreement is a contract for personal or professional services or rental of equipment with a term of one year or less and costing $5,000 or less.

Must solicit informal competitive quotes when purchases are over $2,500.

No quotes are necessary for Community Services programs, modeling services, musical performances, workshop presenters, or when compatible parts and servicing is a demonstrated need or grant guidelines require otherwise.

Procurement Policy 04-05

Short Term Agreements (STA) (Cont’d)

STA’s can only be amended through submission of Request For Contract (RFC). It may not exceed the maximum of one year period and the total cost may not exceed $5,000. Amendments are handled by either the College Procurement Specialist or ESC Contracts and Purchasing Unit.

A copy of the STA must be forwarded to College Procurement Specialist for Board of Trustees reporting.

****IMPORTANT****STA’s must be ratified by the Board of Trustees within 60 days of commencement.

Request For Contract (RFC->CO)

A Contract is used to procure personal or professional services, equipment maintenance, leases of equipment, special funded grants, student intern arrangements, income agreements, multi-year contracts.

College Procurement Specialists process contracts that are delegated to the College Presidents for transactions under Administrative Regulation B-19 and within the statutory bid threshold.

ESC Contracts and Purchasing Unit processes contracts that are not under the Administrative Regulation B-19 and are over the statutory bid threshold.

Written quotes from three or more potential contractors are needed except when compatible parts and servicing is a demonstrated need or grant guidelines require otherwise.

Contracts shall be limited to three years for purchase of materials or supplies and five years for equipment or services, unless otherwise defined by statute. (Education Code section 81644)

Request for Contract (RFC) (Cont’d)

****IMPORTANT****Contracts under formal bid threshold or delegated transactions under B-19 must be ratified by the Board of Trustees within 60 days of commencement.

Facilities-related Procurement

• Maintenance services, repair to facilities and construction related public works (CUPCAA Public Contract Code sections 22030-22045) • Colleges cannot transact purchases or

contracts using bond funds.• Facilities procurement thresholds:• Up to $30,000 = requires three written

quotes.• $30,000 to $175,000 = informal bidding• $175,000 = formal bidding

Facilities Order Form (FOF)

• Solicit 3 written quotes • Create FOF Document

Vendor entered in SAP Enter PO/FOF in SAP Define work to be done and payments to be made in

appropriate detail • Ensure that both pages of FOF are reviewed and signed by the

contractor. General terms and conditions have been signed off by contractor.

• College President or Vice President of Administrative Services must sign FOF.

• College Facilities Director cannot sign FOF. • Board approval or ratify of FOF within 60 days of date of

commencement of FOF.

Facilities Order Form (FOF)

• Solicit 3 written quotes • Create FOF Document

Vendor entered in SAP Enter PO/FOF in SAP Define work to be done and payments to be made in

appropriate detail • Ensure that both pages of FOF are reviewed and signed by the

contractor. General terms and conditions have been signed off by contractor.

• College President or Vice President of Administrative Services must sign FOF.

• College Facilities Director cannot sign FOF. • Board approval or ratify of FOF within 60 days of date of

commencement of FOF.

Hypothetical #2• West Harbor College has received a grant to purchase state of

the art imaging equipment for its Radiology Tech Program. In order to purchase the equipment, the College is advised that it must reinforce the walls of the room housing the equipment with lead plates to shield the spread of radiation outside of the room.

• Frank Fix, Facilities Director, receives a contractor proposal to mount the reinforced plates on the walls for $25,000.

• Frank signs the contractor proposal.

• Was his actions appropriate? What steps should Frank have taken to properly procure a contractor?

Professional Services vs. Personal Services• Professional specialized services are defined as those contract

transactions where highly specialized knowledge and professional licenses are needed to perform services requested. • (Government Code section 53060 and Procurement Policy 04-08)

• Professional services examples: legal, financial, accounting, engineering/architectural, insurance brokerage, payroll issuance and other administrative matters

• Personal services examples: Piano tuning, window washing, catering

Cannot contract out “classified” or “bargaining unit” work. (Education Code section 88003.1)

Personnel Commission reviews board agenda items involving services.

Illegal contract transactions are pulled from the agenda and may be paid as claims which require explanation to the Board of Trustees.

Hypothetical #3• President Presley would like to hire the services of an audit

firm to review the accounting records of her College Foundation from the last 5 years. President Presley is quoted a price by MPG Accounting of $87,000. • Must President Presley put the contract out to a competitive

procurement process?• If so, what type of competitive process?• Are there any other issues President Presley needs to be aware

of?

No bid splitting• It shall be unlawful to split or separate into smaller work orders

or projects any work, project, service, or purchase for the purpose of evading competitive bidding. (Public Contract Code section 20657)

• What did you know at the time you knew it and/or should you have known it? Facts.• Example of bid split: College planned in the next fiscal year to

repaint the computer rooms of the Library in the amount of $46,000 and separates paint job (Floor 1 Computer Room = $23,000 and Floor 2 Computer Room = $23,000) by floors because there is not enough time to bid the entire painting project.

• Not a bid split: The College library 1st floor computer room (costs = $23,000) gets vandalized over the weekend with graffiti and must be repainted. In two weeks that same tagger hits the 2nd floor computer room (costs = $23,000) and now needs to be repainted.

Types of Competitive Procurement Transactions

• Solicitation of Quotes• Request for Qualifications• Invitation for Bid• Request for Proposals

Solicitation of Quotes• An informal competitive process• Solicit vendors (email/phone call), catalogue pricing, internet

research, master agreements, mail/fax request for quotes, SAP database of vendors

• Written evidence or record of solicitation attached to purchasing documents.• -Copies of emails, telephone log (including date, name of vendor,

time and phone number), print internet web page, vendor submittals

RFQ’s, RFP’s & IFB’s- “Request for Qualifications“ (RFQ) (District)

• Not formal bidding, best business practice• Respondents ranked by qualifications• Price is negotiated with highest ranked respondent

• - “Request for Proposals” (RFP) (District)• Not formal bidding, best business practice• Respondents submit qualifications, technical proposal and price• Award based on most advantageous offer, all factors considered, not price alone

• - “Invitation for Bids” (IFB) or “Request for Bids” (RFB) (District)• Formally bid transactions currently $86,000 and greater – formal bid threshold adjusted

January of each year• Formal advertisement in newspaper of general circulation for specified period of time• Bids submitted sealed• Public bid opening• Award to lowest responsible and responsive bidder

• Responsible vs. Responsiveness

Lunch Break

What is a “contract”? • A transaction involving two or more people whereby each

party becomes obligated to the other• Specific parties• Specific terms• Consideration (an exchange of promises)

• Contracts, agreements, memorandum of understanding, letter of engagement, consultant proposal

• “Quacks like a duck, walks like a duck…It is a duck.”

Key Contract Terms• Scope of Work • Payment • Duration of a contract • Termination • Indemnity • Insurance • Warranty • Venue/Choice of Law • Binding arbitration clause

Scope of Work• Goods or services should be specifically defined• What party will perform the work or produce the good?• Expected deliverables – quality and quantity

Avoidance of scope creep, additional service charges, and you get what you pay for.

Payment • When is payment due?• Upon invoicing• Start up or advance payments• Not less than 30 days• Less than 30 days in order to secure discount

• Are payments tied to deliverables?• Does payment term involve penalty for late payments?

Duration or Term of Contract• Contracts or purchases for services or equipment shall only be

up to 5 years• Contracts or purchases for materials and supplies shall only be

up to 3 years• No “evergreen” or automatic renewal provisions beyond the

legally identified term.

(Education Code Section 81644)

Termination• If a contract situation becomes “unsatisfactory” or a party

does not hold up its end of the deal, there should be an identified process to get out of the contract or the ability to fix it before a contract is terminated.

• Parties to a contract may want to “walk away” without cause or fault as long as sufficient agreed upon reasonable notice is given to the other party.

Insurance and Indemnity• Types of insurance depends on the activities covered by the

agreement.• Risk Manager , David Serrano at (213) 891-2461, should be

consulted regarding changes to standard insurance provisions.• Insurance is not the same as indemnity.• “Indemnity” assigns who will be responsible for any risks or

losses as a result of the contract activities. Office of General Counsel may assist in review of indemnity provisions.

Venue and Choice of Law• Venue provisions in a contract identify where claims or

lawsuits will be brought under the contract.• Venue should be any competent court of jurisdiction in the

County of Los Angeles, State of California.• -Where was the contract signed, where are the parties doing

business, LACCD is a public agency in CA, where is the evidence and witnesses?

Contracts entered into by the LACCD should be governed by the laws of the State of California. LACCD cannot agree to be subject to the laws of another state. *Heads up: Out-of-state vendors typically request their own state law.

Federal law will always apply.

Warranty• A warranty is an assurance or guaranty of standard of

performance.• What will the “warranty” cover? • Work should be warranted at least to “industry” or “professional

standard”.• Materials, supplies and equipment should be warranted for a

reasonable time period.

Limitation on Liability• Vendors typically want to limit their liability to a small dollar

amount or to a very limited set of circumstances• Refer to Regional Purchasing Specialist, Contracts Office Staff

or OGC for review.• Need to look at what exposure is created by the contract in

order to determine whether any limit is acceptable.• Office of General Counsel assists in review.

Binding Arbitration• Contracts with “binding arbitration” clauses can only be

agreed to by Chancellor, Deputy Chancellor, Executive Director of Facilities Planning and Development and Director of Business Services.

• Agreeing to “binding arbitration” limits the District’s legal remedies available including the ability to sue a party in court.

Basic Contract Drafting Considerationsand Checklist

• Review Contract Checklist (Hand-out)

Who, what , why, when, where and how?

Top 5 Questions to Ask Before Entering an Agreement• Is this transaction within the college’s delegated authority of

procurement transactions? • Who must sign this agreement?• ◦Are the source of funds used for the transaction appropriate

to spend in this manner? (Limits on grants or funds) • ◦Is this the type of transaction that requires public bidding or a

solicitation of competitive quotes? • ◦What approved contract forms or terms do I need to be

aware of and/or make the vendor or service provider aware of in doing business with the College/District?

• ◦Does the contract or purchase require me to get prior board authorization or is board ratification appropriate?

Hypothetical #4• Regina Proctor, College Procurement Specialist for West Harbor College, has

received a Memorandum of Understanding from Horatio to review from Western State University to provide collaborative grant writing services to the College. Western State University’s MOU state terms as follows:

• 1. The term of this Agreement shall renew automatically, unless a party provides prior 90 days written notice of non-renewal before the end of the Agreement Term.

• 2. Any claims, actions or proceedings under this Agreement by either party must be brought in the State of Illinois and subject to Illinois state laws.

• 3. West Harbor College shall pay liquidated damages to Western State for failure to pay invoices when received.

• 4. Western State shall provide grant writing services to West Harbor upon initial receipt of start-up costs in the amount of 50% of the overall contract.

• 5. Western State shall not be liable for any claims or losses suffered by West Harbor College as a result of Western State’s actions or omissions.

Non-Competitive Procurement

These types of transaction are identified by statutory authority as not requiring the solicitation of quotes, bids, or any other form of competitive submittal prior to purchase.

Education MaterialsFood/Cafeteria SuppliesEmergency ContractsPiggyback Contracts – (Cooperative Purchases) Finding of ImpracticabilityMaster Agreements

Non-Competitive Procurement

• A. Educational Materials – Education Code section 81651 – relates to instructional supplies and materials for students, not equipment.

• B. Food/Cafeteria Supplies – Public Contract Code section 20660 – perishable food stuffs and seasonal commodities used in the operation of cafeterias and food services.

• C. Emergency Contract – Public Contract Code section 20654 - an emergency when any repairs, alterations, work, or improvement is necessary to any facility of the college, or to permit the continuance of existing college classes, or to avoid danger to life or property. Requires finding of emergency and unanimous vote by Board of Trustees.

• D. Cooperative Purchases – Public Contract Code section 20652 – piggyback purchases from other government or public agency contracts such as WSCA or CMAS, other CCD’s.

• E. “Finding of Impracticability” – No statutory authority for sole sourcing. Refers to a market condition when competitive procurement process is impossible or impracticable. *Requires Board to make a finding of impracticability before authorizing a vendor agreement. Need to include documentation required to support finding per Procurement Policy 04-13 Section 2(e). Case law established.

• F. Use of Master Agreements – if procurement is made from District Master Agreement no additional competitive process is needed.

51

Master Agreements

• Chancellor’s Directive Number 142

1) Utilize existing Districtwide master agreements, including those established through BuildLACCD.

2) Purchases based on piggyback contracts from other government or public agency contracts.

3) Needs that cannot be met with existing District-wide agreements or where more favorable pricing has been provided by written quote may be allowed at the discretion of the Deputy Chancellor or her designee; permission is to be obtained by the College Presidents or Vice President of Administrative Services in advance of purchase.

4) Purchases that do not comply with this directive will become the personal responsibility and liability of the individual(s) who made the purchase(s). 52

Hypothetical #5• Horatio is told by Director of College Facilities, Frank Fix, that

due to a freak rainstorm over the weekend the bookstore has been flooded. Frank inspected the area this morning and found a foot of standing water in the facility.

• Frank confers with Horatio and he is directed to call Suck-It-Up Water Removal and Remediation Experts immediately. The water removal and remediation work is estimated to be about $25,000.

• Was Horatio’s direction to Frank proper?• What steps should Horatio later take to ensure appropriate

contracting of these services?

Hypothetical #6• West Harbor College is constructing a new Student Services Building

requiring a fire alarm system to be installed. All of the current fire alarms located at the College’s existing buildings were purchased and installed by ABC Fire Alarms and run on proprietary radio signals. ABC fully warrants the existing alarm system.

• What process should Horatio undertake to procure the alarm system for the Student Services Building?

Public Records • Access to records relating to the conduct of the public business is a

fundamental right.• Records possessed and maintained by a public entity are deemed

to public records unless otherwise excluded i.e. protection of employee or student privacy rights.

• Response required within 10 days of receipt of request to determine whether records will be made available for inspection.

• Colleges may respond to public records requests. Keep copies of what is provided to requestor. (College may refer requests to Office of General Counsel if such requests create possible exposure to the District/College or if the request is related to anticipated or existing litigation or legal matter.)

• Examples of public records: Contracts and purchase order, conflict of interest forms, emails, evaluation scoring sheets, college directory

Other special agreementsFacilities Use Agreement (Permits and Lease)Donation AgreementFoundation AgreementSpecially Funded Program AgreementASO Funded Agreement

Use of Facilities Agreements – Third Party Use of District/College Property

• License for Use of Facilities: Non-exclusive use of facilities• Civic Center – educational, recreational, cultural, literary, political,

moral activities, general character building or welfare interests of the public.

• May request direct costs only for making facility available - utilities, custodial, additional security expenses. If permittee solicits admission fees, membership dues or other contributions for event, but fees not being used for welfare of the College’s students. College may negotiate fair rental value and direct costs.

• Permit for Use – Rental amount negotiable• Filming Permit• Mobile Food Truck Permit

College may issue permits up to 14 days. Educational Services Center Contracts and Purchasing Unit issues permits over 14 days. (Sequential or non-sequential use w/in calendar year)

Use of Facilities Agreements (cont’d)

• Other Considerations when issuing permits:

• Insurance Requirements – threshold may increase depending on activities conducted at event

• Security Deposit?

• Alcohol served at event on campus by 3rd party – ABC license, increased insurance of $ 5 million, no college/district staff may dispense liquor

• Don’t confuse permits for use with use of free speech areas on campus

Use of Facilities Agreements (cont’d)

Lease for Use of Facilities: Exclusive use of facilities – sequential 24/7 use*Up to 5 days – College may issue*Greater than 5 days – Contracts and Purchasing Unit must issue.

Ground leases greater than 5 years require formal public bidding. (Education Code Section 81378.1)

• Longer term leases beyond 5 years may be established through

public bidding or other exemptions defined in the Education Code.

• * New process for cell tower leases will be released soon.

Donations of Equipment and Funds

• Donation of materials or funds subject to acceptance by Board of Trustees. Donations may be ratified.

• Donation form and donation agreements on line.• For donor tax write off purposes, LACCD does not valuate donation.

Donor provides valuation.• Donation conditions must be reviewed for appropriateness and

legality. • College President or Vice President of Administrative Services need

to sign donation form. If conditions relate to IT or facilities related items, IT Director or Facilities Director need to sign off donation form.

• Donation of funds are handled by the Chief Financial Officer.

Procurement considerations with College Foundation• Foundations are separate legal entities. Defined as 501 (c)(3)

corporations. • May accept gifts and donations not customarily accepted by

College directly. However, cannot divert funds typically handled by the College.

• Foundations are subject to Master Agreement with the College• Salary and benefits for District employees require 50% monetary

reimbursement• Foundations subject to Brown Act and Public Records Act.• Administrative Regulation A-02

• Services, Programs and Functions of an auxiliary organization are listed.

Procurement Considerations for Specially Funded Programs (SFP)

Procurement with SFP funds requires additional monitoring and oversight to ensure purchases and subcontracts are made within grant and grantor agency guidelines.

• SFP Directors need to be familiar with their SFP or grant requirements and guidelines, and need to be aware of:• Any “flow down” provisions that need to be in any purchase orders,

subcontracts, or sub grants. • Any procurement restrictions or guidelines.

Example: Prohibition against federal or state debarredcontractors or vendors. The Excluded Parties List System is online

at www.sam.gov

62

Procurement Considerations for Specially Funded Programs (Cont’d)

• A. Award of SFP Funds• Prior to setting up an SFP budget for procurement, SFP program director

must receive a written award letter or offer from the grantor agency.

• B. Establish a Budget Cost Center• College creates eBTA, attaching documents electronically, via the Portal

to the District Budget Office. • Work Breakdown Structure (WBS) code is assigned by the District

Accounting Office upon receipt of documents. • District Budget Office establishes a matching Fund Center to the WBS.

63

Procurement Considerations for Specially Funded Programs (Cont’d)

• C. Establish an SFP Agreement• eBTA approved electronically by the VP of Administration via the Portal• CRF approved and signed by the VP of Administration (hard copy original) • Award Letter or Offer from the Grantor Agency• SFP Abstract• SFP Fund/WBS Master Data Form• RFC entered into SAP database• Copies of eBTA and listed documents, along with original Grant

Agreement and instructions, sent to College Procurement Specialist *For existing SFP Agreement, provide original SAP contract number.*All multi-campus grant agreements must be handled by the District Office

Contracts Section 64

Procurement Considerations for ASO/ASU transactions

• ASO/ASU is not a separate legal entity. Its insurance and liability is not independent of LACCD.

• ASO/ASU procurement transactions must follow LACCD procurement policies and procedures.

• College President has legal responsibility to provide fiscal oversight on ASO expenditures and funds.

• The ASO/ASU governing body, College President or designee must approve all ASO contracts in advance. All contracts must be in writing. Contracts not binding until signed by the College President, Vice President of Administrative Services, ASO Advisor, ASO President and other contracting party • (Administrative Regulation S-4).

65

Hypothetical # 7

• Sally SFP Program Director from West Harbor College is planning to throw a welcome reception for new students served by the SFP Program. The grant for the Program states that funds can only be used for food served during instructional program functions. Horatio Horn, VP of Administrative Services has been invited and is well aware of Sally’s plans for the reception. Having no culinary program on campus, Sally decides to bring an outside catering company to provide food and beverages for the reception. ABC Catering Company estimates food services to be about $5,000 for the reception. They request Sally to sign the service proposal. Sally signs the proposal.

• Is this an appropriate transaction?

Post-Assessment Quiz• 1. True or False? The Vice President of Administrative Services may delegate

his/her signature authority to the Facilities Director.• 2. True or False? A College President may sign a window washing services

agreement for $100,000.• 3. True or False? Leases over 5 days require prior approval by the Board of

Trustees.• 4. True or False? Three quotes are needed before a purchase from a Master

Agreement may be made.• 5. True or False? A memorandum of understanding is a binding agreement.• 6. True or False? A purchase order for equipment greater than $5,000

requires three formal bids.• 7. True or False? Contracts are public records.• 8. True or False? Contracts over the formal bid threshold require prior

approval by the Board of Trustees.• 9. True or False? Contracts and purchases under $86,000 must be ratified by

the Board of Trustees within 6 months.

Training Takeaways• 1. Engage in procurement planning and respect process timelines. Failure to

plan does not constitute an emergency.• 2. College President and Vice President of Administrative Services are the

only positions on campus that have signature authority. Ensure all contract documents are fully signed and dated.

• 3. Keep centralized record of 3 quotes obtained for audit purposes.• 4. The colleges have the delegated authority to handle certain enumerated

transactions:*partial list (see B-19 for entire list) • (1) non-facilities purchases and contracts up to $86,000; • (2) civic center/permits for uses up to 14 days; • (3) donations; • (4) FOF’s up to $30,000

• 5. SFP Director and SFP Tech need to be fully knowledgeable of their grant guidelines and requirements.

• 6. Information inputted in the RFC in SAP must be accurate and complete. Information in CRF should match RFC information.

Top 10 Takeaways (cont’d) • 8. Transactions that require board ratification must occur within 60

days of the contract or purchase order commencement.• 9. When in doubt, ask your College Procurement Specialist:• Ramona Divinagracia, (818) 947-2547 • Kim Hoffmann, (323) 415-4154 • Marcia Webb, (310) 233-4256

• 10. A very complex question? Ask the ESC Contracts and Purchasing Unit staff: Dial (213) 891-ext.#• Jim Watson, Contracts Manager ext. 2421 • Fabbee Bunag, Contracts Analyst ext.2430• Daryan Hubbard, Contracts Analyst ext. 2301• Dorothea Mc Farline, Contracts Analyst ext. 2276• Marilyn Huff, Purchasing Agent ext. 2103

Questions

The End*Please submit surveys to the front of the room. Thank you