Provided By the
Comptroller of Public
Accounts
CPA TEXAS GOVERNMENT
BASIC PUBLIC PURCHASING
Try to complete the crossword puzzle without looking in your book!
Across
3. Someone who is authorized to act on behalf of someone else
4. A supplier of goods and/or services 8. An offer to contract with the state
10. __________Purchase - A purchase method used to order goods in bulk
Down
1. The result of final negotiations with responsive vendors during the RFP process
2. _________Bid - A formal written bid opened in public at a designated time and place
5. A set of moral principles or values
6. To remove oneself from participation to avoid a conflict of interest
7. An addition or supplement to a solicitation document 9. The performance of duties helpful to others excluding
Basic Public Purchasing Objectives
Overall Course Objectives
From this course the learner will be able to:
• Demonstrate a general knowledge of Texas Public Purchasing requirements.
• Perform purchasing responsibilities in an ethical manner. • Explain the various steps in the procurement cycle.
• Prepare flexible, accurate, clear, competitive, and simple (FACCS) specifications.
• Select the state approved purchasing method that will result in a best value acquisition for the state.
• Define their delegated purchasing authority. • Compare and contrast bids and proposals.
• Navigate the CPA website to find needed information. • Pass each “Test your Knowledge” quiz with 100% accuracy • Pass the BPP Mini Quiz with 83% accuracy (10/12)
• Enter the APP class (if required) with a minimum knowledge base. • Master the objectives of each section in the workbook.
Purchasing Profession Overview
After this section the learner will be able to: • Define purchasing
• Name at least three current trends in public purchasing • Identify the four basic public purchasing principles
• Name the steps of the procurement cycle in the correct order • Explain the State of Texas purchasing and continuing education
requirements Ethics and the Law
After this section the learner will be able to:
• Execute an ethical course of action in a conflict of interest
• Follow proper procedure when made aware of an ethical violation • List the seven criteria required to form a legal contract
• Differentiate between good and effective specification writing Texas Purchasing Methods
After this section the learner will be able to:
• Identify and explain the basic usage of the 14 state approved purchasing methods
• Memorize the delegated purchasing table Sourcing and Solicitation
After this section the learner will be able to:
• Name the two main sources for vendor location
• List the three types of basic solicitation methods and the five methods used to solicit a bid
Receiving Bids and Proposals
After this section the learner will be able to:
• Differentiate between the informal and formal bidding process • Identify the steps in the IFB and RFP process in order
• Differentiate between Competitive Sealed Bids and Competitive Sealed Proposals and identify instances when either is appropriate
Logistics
After this section the learner will be able to:
• Distinguish FOB Destination from FOB Origin
• Follow an appropriate course of action when damaged or incorrect orders are received
Reporting Requirements and Documentation After this section the learner will be able to:
• Know when major agency reports are due
• Categorize purchase vouchers into Doc types 2 and 9 • Name the most common audit finding
• Determine the purpose of PCC codes
Copyright © 2005
by
Comptroller of Public Accounts
-All Rights
Reserved-TABLE OF CONTENTS
Introduction 1
Purchasing Profession Overview 2 What is Purchasing? 3
Purchasing Trends 4 Basic Public Purchasing Principles 5
Surplus Property 6 The State of Texas Procurement Cycle 8 The Purchasing Process 9 State of Texas Training and Certification Program 11
Professional Organizations 13
Test Your Knowledge 15
Ethics and the Law 16
Ethics in State Purchasing 17
Conflict of Interest 19
Ethical Resources 20
Texas Purchasing Statutes, Rules and Policies 21
Test Your Knowledge 26
Specifications 27
Introduction to Specifications 28
Specification Types 29
Writing Specifications 30
Test Your Knowledge 32
Texas Purchasing Methods 33
State Approved Purchasing Methods 34
Delegated Purchasing 43
Test Your Knowledge 45
Sourcing and Solicitation 46
Sourcing 47
Historically Underutilized Business (HUBs) 49
Solicitation 53
Receiving and Evaluating Bids and Proposals 58
Introduction 59
Bids 60
Proposals 63
Purchasing Preferences 64
Compare and Contrast (Competitive Bids vs. Competitive Proposals) 66
Test Your Knowledge 68
Logistics 70
Shipping 71
Carrier Shipping Methods 72
Receiving 73
Inspection 74
Test Your Knowledge 76
Reporting Requirements and Documentation 77
Reporting Requirements 78
Procurement Audit 83
Test Your Knowledge 85
Glossary 86
Acronyms 93
Class Exercises 95
INTRODUCTION
The Comptroller of Public Accounts (CPA) is committed to the education and professional development of state purchasers. It is through this commitment that we provide training opportunities that allow you, as a state purchaser, to manage your level of success and career path.
State purchasers face many challenges. As a state purchaser, you are one of many departments within your organization, and you may even work in a field or branch office. Therefore, you must manage a large part of your organization that you cannot see, and work with people you may never meet. Each department is motivated by different goals, and may have different cultures from the purchasing department. Your toughest yet most important job is to help identify and meet the needs of such a diverse group of customers by procuring goods and services at the best value for the state.
Although the job of purchasing is challenging, it is through those challenges that you have an opportunity to excel in the profession. By being a proactive purchaser you can help your
organization become more responsive, increase service levels, reduce expenditures, and achieve best value acquisitions for the state.
This workbook is designed to provide entry-level state purchasers with a broad overview of the purchasing profession. It was written and edited by a team of Certified Texas Purchasers (CTP), Certified Texas Procurement Managers (CTPM), and subject matter experts (SMEs). You can feel confident that the information presented in this workbook will provide you with the basic information you need to begin your career as a State of Texas purchaser and help you succeed in your goals toward state purchasing certification; however, this workbook is not a step-by-step guide. Purchasers should refer to state statute, state procurement rules, the State of Texas Procurement Manual, and other resources identified throughout this workbook for assistance with daily purchasing procedures.
The staff of CPA’s Training and Certification Program wishes you success with your professional development endeavors.
PURCHASING PROFESSION
OVERVIEW
WHAT IS PURCHASING?
Congratulations, you’re a public purchaser. Now what? Do you understand what that means? Do you realize your responsibilities? Let’s find out.
Please take a minute to write down your definition of “purchasing.”
How did you do? Did you struggle with a definition? Did you include key words and phrases like purchase, materials, equipment, services, satisfy needs, best value, lowest price, highest quality, etc? If you are new to purchasing, some of these terms may not be familiar. The
glossary at the back of this workbook provides definitions for common words you will encounter in the purchasing profession.
PURCHASING TRENDS
Past vs. Present
Old Days Current Trends
Bidding out all requirements. Improving the process by involving multiple parties in the planning process.
Multiple transactions. Reducing overall costs.
Always awarding to the lowest bidder. Obtaining best value.
BASIC PUBLIC PURCHASING PRINCIPLES
The following four basic public purchasing principles are inherent in the foundation of public purchasing:
Competition
Competition is considered the anchor of most state purchasing statutes, and can be defined as the process by which two or more vendors attempt to secure state business by offering the most favorable price, quality, delivery, or other terms of service.
Competition reduces the opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically. The requirement for competitive bidding is specified in Gov’t Code, §2155.063. Since the state benefits in a competitive environment, purchase methods like proprietary and emergency purchases that limit competition are generally discouraged.
Public Notice
To ensure there is a competitive environment for purchases, it is essential that multiple motivated vendors participate in the procurement process. The state utilizes several tools to facilitate a competitive environment via public notice. The Centralized Master
Bidder’s List (CMBL) provides a list of vendors registered to receive solicitations based on specific commodity codes, and the Electronic State Business Daily (ESBD) advertises bid opportunities greater than $25,000 on the Internet.
Public Opening
During a public opening, the bids or proposals received from all vendors are opened and read aloud in public. Depending on the type of solicitation, there are specific procedures and rules of conduct that must be adhered to during an opening to prevent vendor
protests. After the public opening, the final evaluation for award is conducted by the purchaser who will make a recommendation for award to the responsive and responsible vendor whose bid provides best value to the state.
Open Records
The Texas Public Information Act, defined under Gov’t Code, Chapter 552, specifies which records are available for public scrutiny. After an award, procurement regulations
SURPLUS PROPERTY
Texas Facilities Commission (TFC) operates a Surplus Property Program pursuant to
Government Code, Chapter 2175. Surplus property is defined as property no longer needed by a state agency, and federal property declared as surplus by agencies of the United States
government and handed over to the General Services Administration for disposal. TFC’s Surplus Property Program disposes of surplus personal property from both Texas state agencies and the federal government.
State Surplus Property Program
State agencies are required to post all surplus property on the Comptroller’s website
(http://www.texasahead.org/lga/surplus/) for ten (10) business days. During the 10-day period, state surplus property is available to state agencies, political subdivisions, and assistance organizations as defined by Gov’t Code, Chapter 2175. The owning agency determines the price, if any, for each item. State agencies have priority over all other organizations; however, if no state agency requests the property, the first organization requesting the property is entitled to it.
The State of Texas has three State Surplus storefronts; one each in Austin, San Antonio, and Fort Worth. Inventories can be found at the Surplus Property section of TFC’s website
(www.tfc.state.tx.us) under “Retail Store/Locations and Inventories.” For additional
information, call the Surplus Property Program at (512) 463-3381. For storefront questions, call (512) 463-1990.
Federal Surplus Property Program
TFC also manages the disposition of surplus and salvage property donated to the state by federal programs. TFC must certify that participants meet federal requirements to receive donated property. Once certified, state agencies, political subdivisions, some non-profits, and Small Business Administration (SBA) 8(a) program participants are eligible to receive federal surplus property through TFC.
The Federal Surplus Property program operates on a cost recovery basis and receives no funding from state or federal governments. Participants pay a handling fee for property that is a portion of the original purchase cost, usually five (5) to ten (10) percent.
The program distributes property through its regional warehouses in Austin, Fort Worth and San Antonio. Participating organizations can send authorized representatives to either warehouse to obtain property. TFC also publishes a list of available federal surplus property on its website.
Purchaser’s Role
The first step in the procurement cycle is to “identify need.” This is a critical step because if a need has not been recognized or made clear, you won’t be able to pursue the other steps in the procurement cycle. The term “Identify Need” serves two functions:
1. To identify the need of the end user.
2. To identify the need to make a procurement.
As a public purchaser, you are responsible for obtaining maximum value for the goods or
services procured by challenging wasteful and avoidable costs. If an item is available in Surplus Property, then it may be possible to fulfill the need of the end user without the need to purchase an item from a third party.
The best way to reduce the risk of financial loss to an organization and to avoid wasteful
spending is to transfer surplus or unwanted property to another organization. TFC aids this effort by administering the State and Federal Surplus Property Programs.
THE STATE OF TEXAS PROCUREMENT CYCLE
Payment
Contract Administration
Evaluation and Award Inspection and
Acceptance Receipt of Bids
Solicitation Procurement Method Selected Need Defined Disposal of Property
THE PURCHASING PROCESS
The procurement cycle always begins with defining a need; however, it may not end with the disposal of property; especially in the case of transfer of surplus property or the purchase of recycled materials.
In a regulated environment such as a state or federal agency, the purchasing process is a multi-departmental task requiring involvement from many different groups. Please look at the table on the next page to review the major activities associated with various responsibilities during the procurement cycle. It should be noted that the activities listed in the table often vary in detail and number of steps depending on the complexity of the purchase. Can you identify the people within your agency who are responsible for each step?
THE PURCHASING PROCESS
Number Task Involved Procurement Cycle Group Responsible
1 Identify the Need
Need Defined 2 Develop the Requirement
3 Transmit the Requirement
4 Receive the Transmission
5 Review the Need
6 Check Surplus
7 Select Purchasing Method Procurement Method Selected
8 Solicit Vendors Solicitation
9 Review Bids Receipt of Bids
10 Evaluate for Best Value
Evaluation and Award 11 Select Vendor
12 Contract Formation
13 Issue Purchase Order
14 Receive Requirement Inspection and Acceptance
15 Contract Administration
Contract Administration 16 Evaluate Vendor
17 Payment Payment
STATE OF TEXAS
TRAINING AND CERTIFICATION PROGRAM
Overview
Required by Gov’t Code, §2155.078 as administered by CPA.
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.2155.htm#2155.078
CPA’s Training and Certification Program was created to ensure that the State of Texas employs the most qualified purchasers and rewards professionals by providing opportunities for
advancement through specified course work and certification(s).
The 75th Texas Legislature mandated by statute that all state agency purchasing personnel, as defined by Gov’t Code, §2151.078(b), be trained and certified to the extent required by CPA.
CPA’s Training and Certification Program consists of the following three (3) training levels and (2) certification levels:
Training Courses
1) CPA Texas Government Basic Public Purchasing (BPP) 2) CPA Texas Government Advanced Public Purchasing (APP)
3) CPA Texas Government Cost VS Market, Contract Negotiations & Contract Administration (CNC)
Levels of Certification
1) Certified Texas Purchaser (CTP)
2) Certified Texas Procurement Manager (CTPM)
1. CPA Texas Government Basic Public Purchasing: A two-day foundation class covering ethics and principles of public purchasing in Texas. State purchasers must complete the Basic Public Purchasing class within their first six months of
employment. Basic Public Purchasing is targeted at state purchasers who procure goods or services for an amount up to $25,000.
2. CPA Texas Government Advanced Public Purchasing: A two-day class covering specification writing, competitive purchasing methods including formal and informal bidding, and contract administration. Advanced Public Purchasing is targeted at state purchasers who procure goods or services for an amount up to $100,000.
It is a state requirement that all state purchasing employees be certified based on their delegated purchasing authority. CPA offers the following two certification levels:
1. Certified Texas Purchaser (CTP): Required for delegated purchases of $25,000 - $100,000. Certification requirements include attendance at both Basic and Advanced Public Purchasing classes, one (1) year of purchasing experience, and a passing score of 70 percent or above on the CTP exam.
2. Certified Texas Procurement Manager (CTPM): Required for delegated purchases greater than $100,000. Certification requirements include attendance at Basic and Advanced Public Purchasing and the CNC classes, three (3) years of purchasing experience, and a passing score of 70 percent or above on the CTPM exam.
PURCHASING AUTHORITY
TRAINING EXPERIENCE CERTIFICATION
Zero to $25,000 BPP None Required None Required
$25,000.01 to $100,000
BPP & APP One Year CTP
Over $100,000 BPP, APP, & CNC Three Years CTPM
Certified purchasing employees must obtain 120 hours of continuing education over a five-year period. For additional information about the Training and Certification Program, please see CPA’s website at www.window.state.tx.us/procurement/prog/training-cert/index.html.
PROFESSIONAL ORGANIZATIONS
Now that you have a better understanding of the purchasing profession, you should know there are several professional organizations available that can serve as valuable resources. Many of these organizations offer memberships that provide networking opportunities and some offer nationally recognized purchasing certifications.
Institute for Supply Management™ (ISM)
“The Institute for Supply Management™ (ISM) is the largest supply management association in the world. ISM’s mission is to lead the supply management profession through its standards of excellence, research, promotional activities, and education.” ISM is a non-profit organization that offers the “Certified Professional in Supply Management” (CPSM certification) and also offers a variety of online classes.
www.ism.ws
National Institute of Governmental Procurement (NIGP)
“The National Institute of Governmental Procurement provides its membership with education, research, technical assistance and networking opportunities in public purchasing while promoting excellence, enhancing effectiveness and increasing public trust.” NIGP offers the “Certified Professional Public Buyer” (CPPB) and “Certified Public Procurement Officer” (CPPO) certifications.
www.nigp.org
National Association of State Procurement Officials (NASPO)
“The National Association of State Procurement Officials is a non-profit association dedicated to strengthening the procurement community through education, research, and communication. It is made up of the directors of the central purchasing offices in each of the 50 states, the District of Columbia and the territories of the United States.”
www.naspo.org
National Association of Educational Procurement (NAEP)
“The National Association of Educational Procurement, Inc. is the professional
association serving colleges and universities nationwide. NAEP’s mission is to advocate the development, exchange and practice of effective and ethical procurement principles
National Contract Management Association (NCMA)
“NCMA is a membership-based, professional society whose mission is to enable the workforce to grow professionally, assess individual and organizational competency against professional standards, establish values, develop best practices, and provide access to skilled individuals, enabling enterprises to improve their buyer-seller relationships.” NCMA offers multiple levels of contract manager certification.
TEST YOUR KNOWLEDGE
1. Name three (3) current trends in purchasing.2. Put the following steps of the procurement cycle in the correct order.
Disposal of Property Contract Administration Solicitation
Evaluation & Award Payment Procurement Method Selected Need Defined Receipt of Bids Inspection & Acceptance
3. Which of the following might be considered a challenge for the purchasing department?
a.) The organization is staffed with people other than the purchasing department. b.) Managing departments and people you may never see.
c.) Various branches may have different cultures. d.) All of the above.
4. The most important trend in today’s purchasing environment is to always get the lowest bid.
ETHICS IN STATE PURCHASING
Ethics is a set of moral principles or values governing an individual or group. As a public purchaser, most everything you do is subject to open records and public scrutiny; therefore, it is imperative to maintain the highest ethical standards. It is your responsibility to:
Serve the best interests of each state organization and taxpayers in the State of Texas.
Avoid acts which are improper or give the appearance of impropriety.
Know and uphold the laws and statutes governing Texas procurement.
Many agencies have their own code of ethical conduct for their employees and for those who conduct business with their agency. The ethics provisions of 1 Texas Administrative Code Section §111.4 apply to employees, vendors and potential vendors acting under delegated authority. In consultation with the Comptroller's Office, the Ethics Commission is required, under Section 1.07 of House Bill 3560, to adopt new rules to implement the specific ethics
provisions of that legislation as they relate to Texas Procurement and Support Services (TPASS). Likewise under Section 3.10 of House Bill 3560, the Ethics Commission is required to adopt new rules to implement the specific ethics provisions of that legislation as they relate to TPASS.
Ethical guidelines assist purchasers and vendors in understanding what behaviors are condoned, as well as what the agency and the state find unacceptable.
For example, TFC’s rules (1 TAC, §111.4) specify the ethical standards of conduct required of commission employees, vendors, potential vendors, and employees of other agencies when acting under authority delegated from CPA. These rules state that an employee may not:
(1) participate in work on a commission contract knowing that the employee or member of their immediate family has an actual or potential financial interest in the contract, including prospective employment;
(2) solicit or accept anything of value from an actual or potential vendor; (3) be employed by, or agree to work for, a vendor or potential vendor; or (4) knowingly disclose confidential information for personal gain.
A vendor or potential vendor may not offer, give, or agree to give an employee anything of value.
A former employee who ceases service or employment with the commission on or after January 1, 1992, may not represent any person or receive compensation for services rendered on behalf of any person regarding a particular matter in which the former
request written instructions on disposition of the matter. If an actual ethical violation occurs for which you are aware, and it is not disclosed and remedied, you could be reprimanded,
suspended, or dismissed.
A vendor or potential vendor involved in an ethical violation may have a pending bid or proposal rejected, be barred from receiving future contracts and/or have an existing contract canceled.
CONFLICT OF INTEREST
Perception plays a key role when discussing ethics in the state. Situations that may involve a conflict of interest play a key role in avoiding the appearance of impropriety. So, what exactly is a conflict of interest?
“A conflict between the private interests and the official responsibilities of a person in a position of trust.”
∼Merriam-Webster
As a public purchaser it is important to maintain the highest level of ethical integrity which includes avoiding even the appearance of impropriety. It is your responsibility to recuse yourself from any procurement where you or, a relative stand to reap financial gain or personal benefit and have another qualified person award the contract.
Additionally, Gov’t Code, §2252.901 helps prevent agencies from entering into conflict of interest situations by stating that “A state agency may not enter into an employment contract, a professional services contract under Chapter 2254, or a consulting services contract under Chapter 2254 with a former or retired employee of the agency before the first anniversary of the last date on which the individual was employed by the agency, if appropriated money will be used to make payments under the contract.”
Conflict of Interest Statement
All purchasing staff of a state agency who have been delegated the authority to purchase must sign a Conflict of Interest statement each year. One copy of the signed statement should be given to the employee, one copy should be filed in the employee's personnel file and another copy should be filed in the employee's supervisor's file. The Conflict of Interest Statement certifies that purchasers have read and understand their responsibilities as a public servant. See
Procurement Manual, Section 1.2, Code of Ethics and Conflict of Interest for a template used by CPA.
Nepotism Disclosure Statement
Legislation (Gov’t Code, §2262.004) and Sec. 2262.001 requires a “disclosure statement for purchasing personnel” from all state agency personnel working on a "Major contract" meaning a contract that has a value of at least $1 million. Purchasing personnel includes an employee of a state agency who is involved in making decisions on behalf of the state agency of a major contract. The disclosure statement will require you to answer a number of questions regarding any relationship or interest with an employee, a partner, a major stockholder, or other owner of the business entity. The disclosure statement must be submitted to the administrative head of the
ETHICAL RESOURCES
There are several resources available where you can find answers to your ethical questions or dilemmas.
The Texas Ethics Commission
The Texas Ethics Commission (TEC) was created in 1991 to promote public confidence in electoral and governmental processes by enforcing, administering, and training state officers and employees on applicable laws governing standards of conduct, personal financial disclosure, lobby registration and activities, political contributions and expenditures, and political advertising.
Their website is a wealth of information including ethics laws, regulations, advisory opinions, and even ethics training for state employees.
www.ethics.state.tx.us
Professional Organizations
The numerous professional organizations named in the previous chapter of this workbook each have a code of conduct or ethical standards they abide by. For example, in 1992, ISM’s Board of Directors approved “Principles and Standards of Ethical Supply Management Conduct.” These professional organizations can provide useful information if you are trying to create ethical guidelines or standards for your program.
Where else can you turn for answers to your ethical questions/dilemmas?
_________________________ _________________________
_________________________ _________________________
TEXAS PURCHASING STATUTES, RULES AND POLICIES
As a public purchaser you are responsible for creating contracts; therefore, it is important to understand the legal authority directing your profession including what creates an enforceable agreement, and how to ensure compliance from the other contracting party.The legal hierarchy in public sector employment is:
1. Texas Government Code (Gov’t Code) – The legislature passes laws or “statutes” by which agencies must abide. Procurement statutes are the highest level of authority and overrule TAC and policy in the case of a conflict. As a state purchaser, you should be familiar with Gov’t Codes §§2155-2161. You can find the Texas Government Code authorizing agency activities online as listed below.
GOVERNMENT CODE
TITLE 10.GENERAL GOVERNMENT
SUBTITLE D. STATE PURCHASING AND GENERAL SERVICES CHAPTER 2155.PURCHASING: GENERAL RULES AND PROCEDURES
SUBCHAPTER A. GENERAL PROVISIONS
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.2155.htm
CHAPTER 2156.PURCHASING METHODS
SUBCHAPTER A. CONTRACT PURCHASE PROCEDURE
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.2156.htm#2156.122
CHAPTER 2157.PURCHASING: PURCHASE OF AUTOMATED INFORMATION SYSTEMS
SUBCHAPTER A. GENERAL PROVISIONS
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.2157.htm
CHAPTER 2161.HISTORICALLY UNDERUTILIZED BUSINESSES SUBCHAPTER A. GENERAL PROVISIONS
abiding by your own agency’s and CPA’s procurement rules. You can find a list of TAC Rules on the Texas Register at http://info.sos.state.tx.us/pls/pub/readtac$ext.viewtac.
3. Agency Policy and Procedure – Each agency will have internal policies and procedures to help further clarify and explain their rules. You are responsible for knowing both CPA’s and your agency’s policies and procedures regarding state purchasing. You must know what to do when you are solely responsible for a purchase based on your delegated
purchasing authority, and what to do when a purchase is not delegated to your agency and must be processed by CPA.
EVERY state purchaser has access to legal counsel. If you are unsure of how to interpret a statute, rule, or procedure, you should contact your procurement manager or designated
legal counsel (i.e. internal general counsel, Office of the Attorney General (OAG), etc.).
State of Texas Procurement Manual
The State of Texas Procurement Manual (Manual) is a document that serves as a set of
guidelines for action. The Manual describes the steps, policies, and procedures state purchasers should be aware of and adhere to when making a purchase. The Manual is a living document that is continually updated and can be found on CPAs website at
http://www.window.state.tx.us/procurement/pub/manual/
Section 1 of the Manual provides additional reference to purchasing authority requirements, procedures, and best practices applicable to the procurement of goods and services.
State of Texas Contract Management Guide
The purpose of the CMG is to offer contract managers at state agencies recommendations on improving existing contract management processes and practices.
Pursuant to 2262.052, each state agency is required to comply with the CMG. Additionally, the SAO is required to periodically monitor for CMG compliance and report any non-compliance to the governor, the lieutenant governor, the speaker of the House of Representatives and the
Contract Advisory Team (CAT). As well as assist, in coordination with the TPASS and the CPA, a non-complying state agency to comply with the aforementioned section.
The CMG is not intended to be a manual on contract law nor does it constitute legal advice. General principles of law are discussed but are only general principles, inclusive of exceptions. A legal reference section provided at the end of the CMG provides general information regarding contracting issues within the contract management process. Consult your agency's attorney for legal advice concerning contracts.
Purchasing Authority
What is an agent? This statement might be more correctly phrased as “who is an agent?” A person with the authority to bind another is identified as an agent. In your agency you are empowered with certain rights and authority to spend funds on the agency’s behalf. This can be assigned by a dollar limit on the transaction, a category of expenditure, or both. As an agent, you act on behalf of the organization/agency and as such have the legal empowerment to bind the principal (the agency) within the scope of your authority. The principal has endowed you with either actual or apparent authority.
Actual authority is the expressed or stated expression that you have a level of empowerment through which to spend funds for the agency and as such the agency will be bound to honor your commitment to the vendor. Only persons having actual authority to act on behalf of the state can bind the state in a contract.
In apparent authority the parties believe and act as if they have the empowerment of the
organization, and the vendor often has reason to believe, by past performance, that your order or commitment will be both honored and paid for by the agency.
The final party to an agency relationship is the third party. In state purchasing, we call them the vendor. They are the party with which we make transactions that bind our principal.
Contract Law
Purchasers operate under two primary laws in the purchase of goods and services. The first is the Law of Contracts which has its origin in English common law of 1620. Since that time, it has been revised to reflect current standards and usage in the procurement profession. A purchaser falls under the control of contract law when they engage in any form of offer or acceptance to acquire goods or services.
Statute of Frauds is a tenet of the Law of Contracts requiring certain contracts to be written in order to be enforceable and generally applies to contracts:
• Greater than $500.
• For the purchase and sale of real estate.
• With a duration greater than one year.
A written contract can never be modified by only a verbal agreement.
The second law a purchaser operates under is the Law of Agency. Under this law, purchasers receive their empowerment from their principal (agency) who provides rules and restrictions that purchasers are required to follow. Some of these parameters include: dollar spending limits, signature limitations, and items purchased.
While not a law, another area describing purchasing empowerment is the Uniform Commercial Code (UCC) (http://straylight.law.cornell.edu/ucc/ucc.table.html). The UCC is a series of articles used to govern business transactions in most states. Article two of the UCC discusses sales and has the most bearing and influence on the purchasing profession.
The Texas Business and Commerce Code (TBCC) (http://tlo2.tlc.state.tx.us/statutes/bc.toc.htm ) is the state code that mirrors the UCC. Sections of the TBCC include:
Title 1: Uniform Commercial Code Title 2: Competition and Trade Practices,
Title 3: Insolvency, and Fraudulent Transfers, Fraud Title 4: Miscellaneous Commercial Provisions
Criteria for a Valid Contract
The essential elements necessary to form a binding contract are:
Criteria Application
Generally involves a promise or commitment to do or not do a specified act in the future.
Occurs when the contracting parties agree to accept the terms of the offer.
The objective of the contract must be for a legal purpose. A contract may not violate criminal law or public policy.
Both parties must understand and assent to, receive a benefit from the other, and be equally bound by the contract.
A party may not accept an offer so as to form a contract unless the terms of that contract are reasonably certain.
Requires that something of value must be tendered in exchange for goods or services.
Parties to a contract must be competent and authorized to enter into a contract.
TEST YOUR KNOWLEDGE
1. Which ethical concern has the greatest risk and long-term stigma associated with a purchaser?
a.) Responsibility to your employer. b.) Perception of your actions. c.) Not knowing the statutes. d.) Reporting conflict of interest.
2. Name the seven criteria required to form a legal contract.
1.) 2.) 3.) 4.) 5.) 6.) 7.)
3. CPA’s rules allow state purchasers to accept gifts from vendors as long as the value does not exceed $50.
True or False
4. The best action to take if you have a relative who is a potential bidder on an upcoming
contract is to .
5. State purchasers are responsible for following only statute and CPA’s purchasing rules.
INTRODUCTION TO SPECIFICATIONS
Even if you are new to the purchasing profession you are probably familiar with the term “specification” or “specs,” but you may not fully appreciate how critical thorough and accurate specifications are to the purchasing process.
What is a Specification?
Take a minute to write a definition for “specification.”
How did you do? Did you write key words or phrases like “a detailed description,” “customer
needs,” “requirements,” “performance,” “product or service,” etc.?
A specification is a detailed description of the requirements for a material, product, or service that includes performance or design criteria necessary to satisfy customer need. The Purchase Requisition (PR) is the most common document used to transmit the requirement.
There are generally two main functions of a specification:
1. Internally, well written specifications ensure that the purchasing department and all other internal parties involved in the purchasing process understand exactly what the end user wants to procure.
2. Externally, specifications are the primary communication document for the vendor; therefore, well written specifications ensure that vendors understand exactly what is required to prepare a bid or offer.
SPECIFICATION TYPES
Performance or Functional
Performance specifications describe what the product or service the end user seeks is expected to do. Details of how the required performance will be achieved are not specified. The purchaser or end user is primarily concerned with the final result.
Design or Technical
Design specifications provide a complete description of what the product or service must look like. For products, design specifications often define the process by which a product will be made, including the required materials. For services, design specifications include step-by-step instructions on how the service should be performed.
Combination
Combination specifications include elements of both performance and design specifications. The end user may have some specific design requirements, but may be open to suggestions regarding performance.
Brand or Trade Name
Brand Name specifications identify, by name, model number or other designation, a specific product manufactured by a specific corporation. It is important to always use the terms “only” or “equal to” when using Brand Name specifications.
Qualified or Approved Products List
Approved Products List (APL) is a list of certain products or services whose acceptability has been tested and determined in advance of a purchase. The APL is extremely useful when a product’s conformance to specifications is unknown and difficult to ascertain.
Statement of Work
A Statement of Work (SOW) is used in the purchase of services to define exactly what work is being contracted. A SOW should define what is to be done, when it is to be done, and what constitutes an acceptable result.
WRITING SPECIFICATIONS
Although purchasers may not always write specifications, they still play a key role in ensuring standard specifications and/or specifications submitted by the end user are effective. An effective specification should be:
Flexible - Avoid overly restrictive specifications which could prevent the acceptance of a bid or offer that could provide a better value (higher quality, lower price).
Accurate - Use units of measurement that are compatible with industry standards. All quantities and packing requirements should be clearly identified.
Clear - Use correct spelling and grammar. Avoid legalese and jargon whenever possible.
Competitive - Avoid overly restrictive requirements, and avoid unneeded extras that may reduce or eliminate competition and increase costs.
Simple - Avoid unnecessary detail and redundancy.
The accessibility of specifications directly affects the level of competition obtained. It is also crucial that information you plan to use in making a best value determination be clearly defined in your specification or SOW.
A good specification:
Clearly identifies a minimum requirement.
Identifies performance requirements and/or test methods. Allows for maximum competition.
Contributes to obtaining best value.
Specification Writing Resources
Uniform Standards and SpecificationsGov’t Code, §2155.068 provides CPA with the authority, in coordination with other state agencies, to develop specifications or adopt nationally recognized standards and/or
specifications. The Specification and Standards Program of CPA develops formal standards and specifications for a number of commodities purchased in volume by the state. These standards and specifications establish minimum quality requirements and are identified by a
standard/specification number and an effective or revision date, and are available on CPA’s website at http://www.window.state.tx.us/procurement/pub/specifications-library/numerics.
Request for Information
A Request for Information (RFI) is an optional specification writing planning tool that may be used to gather information when an agency does not have the necessary information to prepare a complete and accurate solicitation document. RFI’s can be used to identify industry standards, best practices, potential performance measures, and cost or price structures.
Other Resources
There are a variety of other resources for finding and developing specifications. Many of these resources provide pre-developed specifications that can save the agency administrative hours and provide purchasers with industry expertise. Resources include:
1.) Other government agencies - State
- Federal
2.) National and International professional associations - National Institute for Governmental Purchasing - Institute for Supply Management
- International Purchasing and Supply Education and Research Association - American Purchasing Society
- International Federation of Purchasing and Materials Management
3.) Standards organizations
- American Society for Testing and Materials - American Society of Mechanical Engineers - Society of Automotive Engineers
- National Safety Council
- National Electrical Manufacturers Association - Underwriter’s Laboratory
4.) Catalogs and sales literature
5.) Sales representatives
6.) Consultants
Specifications are not static. Advancements in technology and other industries may make a previously developed specification unsuitable for future purchases. Always be sure to customize
TEST YOUR KNOWLEDGE
1. When using a specification, the purchaser assumes most of the risk for the proper performance of a product.
2. Which of the following is not a type of specification?
a.) Performance b.) Design c.) Open Market d.) Statement of Work
3. It is important to write specifications that are open enough to allow all vendors to submit a bid or make an offer.
True or False
4. Name the five elements of an effective specification.
5. Which specification type provides the vendor with maximum latitude to determine how to satisfy the bid requirement?
a.) Design b.) Performance c.) Statement of Work d.) Brand Name
The State of Texas provides a myriad of purchasing methods or opportunities. Each method provides you with the unique opportunity to make a best value determination and save state taxpayers valuable money. This chapter will highlight the various procurement methods and provide you with an outline on how to determine the appropriate method for your purchase.
Section 2.4 of the Procurement Manual will provide additional information on selecting a Procurement Method
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Department of Information Resources (DIR)
(Gov’t Code, §2157.068; & 1 TAC, §201.18)
DIR is a state agency created in 1989 that serves as the chief information office for the State of Texas. DIR provides contracts for computer hardware, software, technical services, and telecommunications infrastructure and services for the state. All DIR contracts are
competitively bid and comply with applicable purchasing laws. Most contracts offered by DIR are Information and Communication Technology (ICT) contracts meaning the purchase order (PO), with the DIR contract number referenced, is issued directly to the vendor. State agencies are required to purchase information technology (IT) commodity items through contracts established by DIR unless the agency first obtains an exemption from DIR.
Telecommunications
"Telecommunications services" are defined as intercity communications facilities or services that do not include single agency point-to-point radio systems or facilities, or services of criminal justice information communication systems. Gov’t Code, Chapter 2170 requires state agencies to procure telecommunications services through DIR. A state agency may not acquire telecommunications services with a carrier other than DIR unless DIR’s Telecommunications Planning and Oversight Council (TPOC) determines, and provides the agency with a waiver, that the agency's requirement for telecommunications services cannot be met at a comparable cost by the consolidated telecommunications system.
Hardware, Software, and Technical Services
Gov’t Code, §2157.068 requires state agencies to purchase hardware, software, and
technical services through DIR’s cooperative contracts. Hardware, software, and technical services are defined as commercial software, hardware, or technology services, other than telecommunications services for which DIR determines that a reasonable demand exists in two or more state agencies. The term includes seat management, through which a state agency transfers its personal computer equipment and service responsibilities to a private vendor to manage the personal computing needs for each desktop in the state agency, including all necessary hardware, software, and support services.
The Request for Offer method of procurement is mainly used to procure Automated Information System (AIS) and Information Technology (IT) services.
and negotiated discounts. “Buyer Alerts” are updated every three (3) months. Purchasers can subscribe at http://lists.state.tx.us/mailman/listinfo/buyer-alert to receive automatic e-mail notices regarding buyer alerts.
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Council on Competitive Government (CCG)
(Gov’t Code, Chapter 2162)
The Texas Legislature created the Council on Competitive Government (CCG) in 1993 to explore how different institutional arrangements, such as managed competition, outsourcing, reengineering and public/private partnerships can create incentives for efficiency, improve customer service, enhance accountability, and save taxpayer dollars. CCG partners with state agencies in order to assist them with their efforts to improve services and save money by increasing competition within state government. Gov’t Code, Chapter 2162 mandates agencies use contracts recommended and/or created by the CCG. Some current contracts include:
Computer Assisted Legal and Investigative Research (CALIR) Services: A master contract for the acquisition of online legal and investigative research services
Document Destruction: Efficient, secure destruction of documents as well as e-waste.
Digital Imaging: Conversion of physical documents into accessible electronic formats.
Energy Procurement: Expert support for energy procurement.
Geographic Information Services: A master contract for acquisition of geographic imagery and geospatial datasets.
Mail Services: Fast, efficient mail fulfillment services.
Print Shops: Five state print shops providing a full range of print services.
Retail Fuel Card: Innovative fuel card program that automatically reduces fuel costs.
Specialty Paper & Supplies: A master contract for acquisition of print shop specialty papers and supplies.
(40 TAC, §189.2 & Human Resources Code, Chapter 122)
The State Use Program is a statutory mandate requiring state agencies to purchase, on a non-competitive basis, the products made and services performed by persons with disabilities, which have been approved by the Texas Council on Purchasing from People with
Disabilities (TCPPD). The State Auditor’s Office (SAO) audits for compliance with the State Use Program and is responsible for reporting non-compliance to TCPPD.
TCPPD is a state agency whose purpose is to further the state’s policy of encouraging and assisting persons with disabilities to achieve maximum personal independence by engaging in useful and productive employment activities and, aiding state institutions in conforming with requirements of nondiscrimination and affirmative action in employment matters related to persons with disabilities.
TCPPD’s responsibilities include:
• Promoting the State Use Program
• Determining the fair market price of goods and services offered by persons with disabilities
• Ensuring that goods and services offered for sale by persons with disabilities are the best value for the state
• Evaluating exception reports
• Contracting with a Central Nonprofit Agency (CNA) to market and administer daily operations
TCPPD contracts with TIBH Vendor
Currently TCPPD contracts with TIBH Industries, Inc. (TIBH) to market and provide program management for the State Use Program. TIBH is the essential management link between the Community Rehabilitation Program (CRP) work centers (i.e. Goodwill Industries), state agencies, and TCPPD.
State purchasers must check the TIBH catalog to see if the requested commodity or service meets the specification and other requirements on the purchase requisition. Purchasers are required to submit monthly exception reports to CPA regarding purchases that were available but not purchased from TIBH. The only authorized exceptions are if the good or service provided by TIBH do not meet state specifications as to quantity, quality, delivery, and life cycle costs.
All of TIBH products and services are fully guaranteed to give 100% satisfaction in every way. If you find something is not satisfactory, we will do whatever is necessary to correct the cause of your dissatisfaction.
TIBH closely monitors all supplier defects; immediate action is taken to address quality issues. In order for TIBH to be fully successful in addressing quality issues, they rely on their customers to provide feedback about products. If at any time a product is not deemed
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Texas Correctional Industries (TCI)
(Gov’t Code, Chapter 497; & Prison-Made Goods Act of 1963)
TCI is a division of the Texas Department of Criminal Justice (TDCJ) whose purpose is to provide inmates with marketable job skills to help reduce recidivism through a coordinated program of job skills training and other resources. The Prison-Made Goods Act of 1963 requires state agencies to buy prison-made products when specifications of standards and quality are met.
If the purchase is within an agency’s delegated purchasing authority, the order can be
processed directly with TCI by including the statement “The award is made under the Prison Made Goods Act and is noncompetitive.” If the value of the purchase exceeds an agency’s delegated purchasing authority, an open market requisition should be sent to CPA stating “Please award to TDCJ per attached quotation.”
PRISON MADE GOODS ACT WAIVER (TDCJ)
The Prison Made Goods Act, requires that an agency purchase goods made by and services offered by the Texas Correctional Industries (TCI). If a product/service offered by TCI as set forth in its catalog of products and services needs to be purchased from a source other than TCI, a waiver from TCI must be obtained. The waiver request can be based on a substantial difference in specifications which could include delivery, or on substantial price differences, or both. Note: TCI is located on the CMBL list and bids for printing must include a bid or no bid response (in lieu of the waiver) for this commodity. Visit website for a copy of a TCI waiver and additional information at:
http://www.window.state.tx.us/procurement/pub/manual
The State of Texas Procurement Manual; 2.5.2 Texas Correctional Industries
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Term Contracts
(34 TAC, §20.40)
CPA has established term contracts on certain commodities and services as a supply source for state agencies. These contracts are based on forecasted amounts specified by CPA and may be ordered as needed. There are two types of term contracts: automated and non-automated. To ensure accurate historical data of purchases, agencies must enter purchasing data into CPA’s online ordering system for all contracts available in TxSmartBuy.
> Automated Term Contracts are generated using the TxSmartBuy On-Line ordering system. A purchase order will be sent directly to the vendor and the ordering entity. > Non-Automated Term Contracts are generated using the TxSmartBuy On-Line ordering
(Gov’t Code, §2155.502 & §2155.504)
Search TXMAS contracts at http://portal.cpa.state.tx.us/txmas/
The TXMAS program was established by CPA to permit state agencies to take advantage of previously competitively awarded federal contracts. The price on the contract is considered the most favored customer pricing, but purchasers may seek to negotiate lower pricing. As applicable, orders are placed online via the TxSmartBuy On-Online ordering system. TXMAS contracts will denote, which items must be entered in TXSMARTBUY. Below is
an example of what will appear at the bottom of applicable TXMAS contracts.
THIS TXMAS CONTRACT IS ALSO LISTED ON TXSMARTBUY. Unless this company has TXMAS-authorized dealers all purchasing entities wanting to purchase items/services available on this TXMAS contract must purchase through TxSmartBuy: www.txsmartbuy.com. If this contract has TXMAS-authorized dealers, those dealers may continue to accept purchase orders as they have been doing in their previous manner (fax, email, or hand carry). If you have any questions, please send an email to txmas
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Open Market Solicitations
(Gov’t Code, §2155.062)
An open market solicitation is the purchase of a good or service made by soliciting from any available source. The open market solicitation procedure is the method for making an open market purchase, and always involves a competitive formal or informal bidding process. Generally, no negotiations are permitted in the competitive bid process. However, in rare instances where there is only one bidder or during emergencies when competition is not practical, negotiations are permitted.
Open market orders exceeding an agency’s delegated purchasing authority are sent to CPA for processing. Purchasers should complete and submit the current Open Market
Requisition Form or enter the requisition online. Upon receipt of the request, CPA will evaluate the requirement and determine if it can add value by performing the purchase.
If CPA purchasers determine that they can add value, then they will create an Invitation for Bid (IFB). The IFB will be sent to the requesting entity and should be reviewed for
accuracy in relation to the submitted specification. If errors are noted, the appropriate CPA purchaser should be contacted and changes made immediately. The final IFB will be posted on the Electronic State Business Daily (ESBD).
If CPA purchasers determine that they cannot add value by performing the purchase then CPA, in writing, will delegate the purchase authority back to the original agency.
procurement method is reducing inventory costs. The essential elements required for a blanket open market order are:
1) the start and end time of blanket order coverage; and 2) an estimated quantity required.
> An Open Market Standing Order is employed when an ordering entity has a specific and repetitive need for products or services. The products or services are provided on a scheduled time for the ordering entity instead of on an “as required” basis. The quantities are guaranteed since the ordering entity has committed to a regularly scheduled delivery time.
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Competitive Sealed Proposals
(Gov’t Code, §§2156.121 – 2156.125)
A Competitive Sealed Proposal (CSP) may also be known as a Request for Proposal (RFP). This procurement method is often used for items or services that represent a high risk, are extremely expensive, or are an exceptionally technical or complicated purchase for the ordering entity.
The RFP is a unique purchasing method because purchasers are authorized to utilize some of the more complex Best Value criteria within the state approved procedures. A RFP method may include a pre-conference with respondents, a modification of the offering by an addendum, and an option of negotiating for a Best and Final Offer (BAFO).
The RFP generally consists of the following information:
Cover
Scope of Proposal Introduction Statement of Work Vendor Qualifications
Contract Term and/or Option to Extend Proposal Contents
Evaluation Criteria Terms and Conditions Execution of Offer Required HUB Forms Exhibits
(Gov’t Code, § 2155.137; & 34 TAC, §§20.32 & 20.41)
An emergency purchase is a situation requiring the state agency to make the procurement more quickly to prevent a hazard to life, health, safety, welfare, or property or to avoid undue additional cost to the state. This frequently occurs as the result of an unforeseen circumstance and may require an immediate response to avert future loss or financial damage to the agency. CPA has delegated to all agencies the sole responsibility to declare an emergency; however, empowerment by CPA does not certify the existence of an emergency situation.
Solicitation for an Emergency Purchase involves:
1) At least three informal bids are encouraged whenever possible, and the award should be best-value based.
2) If an emergency purchase is greater than $25,000, notice of the award must be posted on the Electronic State Business Daily (ESBD), but the minimum posting times do not apply.
When justifying an emergency purchase, the agency should address what caused the emergency, the impact on the state, and the estimated financial damage that would have occurred had normal procedures been followed.
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Internal Repair
(34 TAC, §20.209)
An internal repair occurs when the extent of the work that must be performed cannot be determined until the equipment is disassembled. An internal repair PO must contain labor and may also include parts. It must also indicate “Internal Repair” and should have a “Cost Not To Exceed” amount. Internal repairs over $25,000 must be posted to the ESBD, but the minimum posting times do not apply.
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Proprietary Purchase
(Gov’t Code, §2155.067; & 34 TAC, §§20.32 & 20.4 1)
A proprietary purchase is only justifiable when an equivalent product or service is not available. A proprietary purchase of a good or service means that the item sought has a unique feature that is not shared by others or provides a compelling distinction which sets one vendor apart from others in the marketplace. When the specification requirement limits consideration to one vendor, a written justification signed by the agency head must be provided and is subject to review by CPA. The justification letter must include:
• An explanation of the need for the specification, specifically what restricts the specification to one manufacturer or provider;
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Scheduled Managed Contract
(Gov’t Code, §2155.064)
A Scheduled Managed Contract is a CPA method for purchasing commodities in bulk. The Contract must:
• Be a high-volume purchase.
• Be for a definite, known quantity of a commodity.
• Be delivered on a definite, known schedule.
Some examples of items conducive to schedule purchasing include fertilizer, milk, bread, pastry, etc.
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Professional and Consulting Services
(Gov’t Code, Chapter 2254)
Professional services are defined as those services provided by a person who is licensed or registered as a(n):
• Certified public accountant
• Architect
• Landscape Architect
• Land Surveyor
• Physician, including a surgeon
• Optometrist
• Professional Engineer
• Real Estate Appraiser
• Registered nurse
Providers of professional services may not be selected on the basis of competitive bids, but must be selected on the basis of demonstrated competence and qualifications to perform services for a fair and reasonable price. This is generally accomplished via a Request for Qualifications (RFQ). Professional fees under the contract must be consistent with and not higher than the recommended practices and fees published by the applicable professional associations, and may not exceed any maximum provided by law.
Consulting services are services provided under contract that do not involve the traditional relationship between employer and employee. A state agency may contract with a
consultant only if there is a substantial need for the consulting service and the agency cannot adequately perform the service with its own personnel or obtain the service through a
CPA delegates purchasing authority to ordering entities for specific commodities and services based on the order amount. The purchaser certification level you achieve determines your individual delegated purchasing authority.
Summary of Minimum Requirements for Delegated Purchases
Total Amount of Purchase Order Commodity Purchases Purchases of Services Direct Publication Purchases Perishable Goods Purchases Distributor Purchases Fuel, Oil and Grease Purchases Emergency Purchases $0.00 to $5,000.00 Competitive Process Not Required PCC E Competitive Process Not Required PCC E Competitive Process Not Required PCC K Competitive Process Not Required PCC L Competitive Process Not Required PCC M Competitive Process Not Required PCC P Competitive Process Not Required PCC E $5,000.01 to $25,000.00 Open Market Informal Solicitation PCC F Open Market Informal Solicitation PCC Q Direct Publication Declaration with Purchasing Documentation PCC K Open Market Informal Solicitation PCC L Open Market Informal Solicitation if Multiple Dealers Available PCC M Open Market Informal Solicitation PCC P Open Market Informal Solicitation PCC-Q $25,000.01 to $100,000.00 *Non-delegated Formal Competitive Process PCC S Direct Publication Declaration with Purchasing Documentation PCC K Formal Competitive Process PCC L Formal Competitive Process Encouraged if Multiple Dealers Available PCC M Formal Competitive Process PCC P Formal Competitive Process When Possible PCC T Over $100,000.00 *Non-delegated May or May Not be Delegated with CATRAD Review PCC S Direct Publication Declaration with Purchasing Documentation PCC K Formal Competitive Process PCC L Formal Competitive Process Encouraged if Multiple Dealers Available PCC M Formal Competitive Process PCC P Formal Competitive Process When Possible PCC T*May or may not be delegated. Refer to Sourcing & Solicitation, Solicitation, Open Market (OM) Solicitation Methods.
There are exceptions that apply under certain circumstances with regards to delegated
empowerment and exemptions to CPA standard rules of operations. See Gov’t Code, §§2155.138– 2155.148.
Section 4, item 4.5 Exemptions of the Procurement Manual provides additional information.
• Institutions of Higher Education
- May be exempt from CPA rules
- Higher Education Assistance Funds
- Group Purchasing Programs
• Other Programs
- Exemptions of Goods or Services of Blind or Visually Impaired Persons - Exemptions of Certain
Libraries and Health Facilities
- Gifts and Grants - Auxiliary Enterprise - Care and Treatment
Services by the Texas Juvenile Justice Department
- Certain Health Care Purchases
- Certain Purchases by TCEQ
- Certain purchases by ERS - Certain purchases by GLO - Certain purchases by TRC - Certain purchases by
TxDOT
- Certain purchases by the Veteran’s Land Board - Certain purchases for Texas
Statewide Emergency Services Personnel Retirement Fund
1. The Request for Offer method of procurement is mainly used to procure…
a.) Commodities greater than $100,000. b.) Professional services.
c.) Consulting services.
d.) Automated Information System (AIS) and Information Technology (IT) services.
2. Due to a change in legislation, your agency needs to procure data entry services for a project expected to last 2 years that will cost approximately $60,000. Under these circumstances, which procurement method should you use?
a.) Request for Proposal (RFP) b.) Proprietary purchase procedure c.) Emergency purchase procedure
d.) Department of Information Resources (DIR) contract if one exists
3. An agency may use the Competitive Sealed Proposal (i.e. RFP) method of procurement only if CPA approves it.
True or False
4. When using the Competitive Sealed Bid (i.e. IFB’s) method of procurement, negotiations are permitted:
a.) when written approval is obtained from CPA. b.) when all the bids exceed your budget.
c.) on purchases when there is only one supplier or during emergencies when competition is not practical.
