COLORADO DEPARTMENT OF LABOR AND EMPLOYMENT
STANDARD POLICY AND PROCEDURE
LEROY J. WILLIAMS, JR.
Executive Director / SUPERSEDES: SP-250 SPP NUMBER: SPP-0017____
DATE: _ 11/18/03 __ DATE: 04/04/05 ____
EXECUTIVE DIRECTOR'S APPROVAL:
______
SUBJECT TITLE: Procurement Activities
CATEGORY/UNIT: Procurement & Contracts Unit
SUB-CATEGORY: Sub-Delegation / AUTHOR: Lisa Eze
DISTRIBUTION: All Employees
I. Purpose 1
II. Changes 1
III. Background 1
IV. Applicable Guidelines 1
V. CDLE Procurement and Contracts Office (PaCO) 1
A. Objectives and Responsibilities 1
B. When to Involve PaCO 2
1. Planning 2
2. Requisitioning 2
3. Questions 2
VI. Purchasing Sub-Delegation 3
A. Exceptions 3
B. Sub-Delegation of Purchasing Authority (Purchases That Cost Less Than $5,000) 3
C. Sub-Delegated Purchasing Authority Responsibilities 4
D. Payment Process for Purchases That Cost Less Than $5,000 4
VII. Purchases Totaling $5,000 or More 5
A. Policy 5
B. Emergency Procurements 5
1. Business-Hours Emergency 5
2. After-Hours Emergency 5
VIII. Purchasing Requirements for Any Dollar Amount 5
A. Conflict of Interest 5
B. Insurance Requirements for All Service Purchases 6
C. Statement of Work (SOW) and Specifications Documents 6
D. Performance Monitoring 6
E. Vendor and Contractor Issues and Disputes 6
F. Taxes 6
IX. Contracts 7
A. Contract Drafting 7
B. Contract Negotiations 7
1. Negotiations Involving Program Scope 7
2. Negotiations Involving Contract Terms and Conditions 7
C. Contract Review 8
D. Contract Execution 8
E. Contract Signature Authority 8
X. Leases 8
A. When a Lease is Required 8
B. Real Estate Brokers 8
C. Space Standards 8
D. Requisitioning 9
E. Lease Termination 9
XI. Construction 9
XII. Procurement Violations 9
A. Internal Infractions 9
B. Statutory Violations 9
C. Ratification of Procurement Violations 10
1. Internal Infractions 10
2. Statutory Violations 10
XIII. Outdated Communications and Guidance 11
XIV. Definitions 11
i
I. Purpose
The purpose of this Standard Operating Procedure (SP) is to provide the Colorado Department of Labor and Employment (CDLE) with general policy guidance on procurement activities regardless of the funding source. This SP will define basic procurement terms, policy, and sub-delegation authority within CDLE but is not intended to provide specific procedures on the acquisition of supplies and services (see “Supplies” and “Services” in the Definitions section).
The CDLE policy for procurement activities is to ensure fair and equitable competition for CDLE’s funding opportunities, maximizing to the fullest extent practicable the purchasing value of public funds while ensuring compliance with all applicable statutes, rules, codes, procedures, and policies.
II. Changes
Changes made from the original SPP-250 include: 1) an increase in the purchasing sub-delegation from $4,000 to $5,000 (Section V.B.); 2) removal of the requirement for Appointing Authorities to send written purchasing sub-delegation documentation to PaCO (Section VI.B.); and 3) clarifies the counties covered by the State’s Real Estate Brokers (Section X.B.).
III. Background
The Colorado Department of Personnel and Administration (Division of Finance and Procurement) has delegated purchasing authority to CDLE’s Procurement and Contracts Office (PaCO) to conduct all procurement activities for CDLE. This is the broadest procurement authority available and CDLE Purchasing Agents are the only CDLE employees with this level of authority. Further delegation of purchasing authority must come from the CDLE Purchasing Director.
IV. Applicable Guidelines
Purchasing activities performed by State employees are governed by Colorado State Statutes; Colorado Procurement Code and Rules; State of Colorado Fiscal Rules; State of Colorado Personnel Rules; Federal Code and Rules; federal grant funding, guidance, and policies; this SP (and any related DLs); and all applicable CDLE rules and policies.
V. CDLE Procurement and Contracts Office (PaCO)
A. Objectives and Responsibilities
The objectives of PaCO are to provide guidance, training, and assistance to the program (or business) units within CDLE on all procurement activities. PaCO is responsible for the following:
Conducting vendor selections
Ensuring fair and reasonable pricing is obtained
Managing vendor protests
Conducting vendor and contractor negotiations
Selecting and executing proper commitment vouchers such as purchase orders, contracts, leases, MOUs (Memorandum of Understanding), etc. (see “Contract” in the Definitions section)
Improving procurement processes within CDLE
Monitoring delegated purchasing activities
Monitoring performance and fulfillment of contract and purchase order terms
Facilitating resolution of vendor complaints
Serving as liaison to the “Central Approvers” (State Controller’s Office, State Purchasing Office, Office of the Attorney General, State Buildings and Real Estate Programs, etc.) on all purchasing and contracting issues
Serving as CDLE’s “travel office” by providing guidance to CDLE employees on state awards for car rentals, hotel rentals, airline travel, travel cards, and other applicable travel information
B. When to Involve PaCO
1. Planning
Business units are strongly encouraged to involve PaCO in discussions regarding future purchases at the earliest identification of need. The optimum time to involve PaCO is at the point the business unit requests funding for a particular project or during development of the business unit’s budget. PaCO’s early involvement will assist the business unit in the following:
Determining the best procurement method
Delineating required timeframes for procurement and contract processes
Selecting the optimum commitment voucher
Ensuring that the business unit receives the supplies and services it desires
2. Requisitioning
For all nondelegated purchasing needs and for all contracting needs, business units must submit a completed CDLE Requisition (“Requisition”) to PaCO for processing. Business units are reminded to obtain all internal approvals prior to submitting the Requisition to PaCO.
Once PaCO receives a completed Requisition, PaCO staff will contact the business unit to discuss the procurement method, timeframes, business unit’s involvement in the procurement and contract process, and the selection of the appropriate commitment voucher for the situation.
[Note: Please be aware that this policy changes the use of the Requisition; under this policy a Requisition is only used when requesting action from PaCO and is not used for authorizing payment to vendors and contractors.]
3. Questions
For all purchasing and contracting questions, contact the business unit’s designated PaCO Purchasing Agent, PaCO’s Contracts Manager, or CDLE’s Purchasing Director for assistance. If you are unsure whom to contact, please call our main phone line for assistance at (303) 318-8067.
VI. Purchasing Sub-Delegation
A. Exceptions
While one of the intents of this SP is to sub-delegate the maximum purchasing authority allowable, there are categories of supplies and services that cannot be delegated. The following categories of purchase requests must be forwarded to PaCO in a timely manner for processing (i.e., vendor selections, negotiations, issuance of commitment vouchers):
Architects
Engineers
Industrial hygienists
Architectural landscaping
Land surveyors
Space planning
Construction
Copier rentals
Leased space (see Section titled “Leases” for definition and information)
Emergency purchases that cost $5,000 or more for after-hours emergencies (see Section titled “Emergency Procurements” for more information)
On-going services and ongoing commitments (i.e., maintenance of equipment and software, janitorial services, trash removal services, snow removal services, grounds-keeping services) (“On-going services” are also referred to as “Recurring Services,” see “Recurring Purchases” in Definitions section)
Outside legal services
Procurements requiring a contract
When a contract is required to document the agreement or when a contract is required to protect the State’s interests
Vendor agreements
Modifications to a purchase order or contract
When anticipating acquiring State-offered services through a private vendor (i.e., printing in the Denver Metro Area, mail services in the Denver Metro Area, document scanning)
B. Sub-Delegation of Purchasing Authority (Purchases That Cost Less Than $5,000)
To streamline processes, ensure value-added processes are utilized, and closely align internal delegations with current State requirements, the CDLE Purchasing Director (through this SP) is sub-delegating limited purchasing authority to CDLE statutory Appointing Authorities (AAs). Delegated authority to AAs is limited to purchases that cost less than $5,000 and will be referred to as “discretionary” purchases. Purchases may not be divided to circumvent this limited delegated authority.
This new delegation authorizes statutory AAs to further delegate, in writing, limited purchasing authority to employees within their business units; however, AAs are ultimately responsible for all purchasing and contracting activities within their Division. PaCO will conduct random monitoring to ensure proper sub-delegation for purchasing and contracting activities.
The new delegation for purchases that cost less than $5,000 is defined to include the following:
One-time purchases of services or supplies that cost less than $5,000
Purchases not anticipated to regularly recur (see “Recurring Purchases” in the Definitions section) and that cost less than $5,000 in any fiscal year
Purchases to any single vendor or contractor that cost less than $5,000 in any fiscal year
Consumable office supply purchases that cost less than $5,000 per order
See Section titled “Purchasing Requirements (for Any Dollar Amount)” for additional guidance.
C. Sub-Delegated Purchasing Authority Responsibilities
AAs must ensure that their sub-delegates:
Comply with the guidance provided by PaCO, this SP, and related departmental letters;
Comply with the “Purchasing Requirements (for any dollar amount)” Section of this SP;
Utilize vendors pre-selected through a Mandatory State Price Agreement (see “State Price Agreement” in the Definitions section) (Requests for exemptions to this policy must be submitted to PaCO for analysis and determination if a “waiver” submission to a Central Approver is appropriate.);
Utilize, when feasible or applicable, vendors pre-selected through a Permissive State Price Agreement (see “State Price Agreement” in the Definitions section) (If a Permissive State Price Agreement is not used, the business unit must document the reason for selecting another vendor.);
Comply with all other internal requirements as they relate to procurements (i.e., internal approvals from IMO, Staff Development, Office of Human Resources/Personnel, Office of Government and Public Relations) prior to committing the Department to the expenditure of funds (i.e., making a purchase);
Comply with all other federal and State requirements as they relate to procurements;
Ensure the State receives fair and reasonable prices for sub-delegated purchases and that “informal competition” is obtained (contact PaCO for guidance); and
AAs must ensure that all purchases that cost $5,000 or more are forwarded to PaCO for processing.
D. Payment Process for Purchases That Cost Less Than $5,000
Please refer to the applicable guidance from the Finance Office regarding the payment process.
VII. Purchases Totaling $5,000 or More
A. Policy
All one-time or recurring purchase requests totaling $5,000 or more in any fiscal year must be forwarded, via a Requisition, in a timely manner to PaCO for processing prior to making a commitment to the vendor or contractor and prior to the vendor or contractor performing the work. Timeline guidance for purchase requests at or above $5,000 should be obtained from PaCO. AAs and business units will continue to be involved in purchases that cost $5,000 or more, which may require a vendor selection and a contract. Business units need to ensure appropriate resources are available to provide business-related technical expertise and assistance with these processes.
See Section titled “Purchasing Requirements (for Any Dollar Amount)” for additional guidance.
B. Emergency Procurements
There may be times when an emergency (see “Emergency” in the Definitions section) arises and CDLE must respond immediately. Authority to authorize emergency procurements is limited to CDLE’s Purchasing Director and PaCO’s Purchasing Agents, unless the emergency occurs after-hours.
1. Business-Hours Emergency
In the event of an emergency during normal business hours, the business unit must immediately contact PaCO for guidance in procuring the necessary supplies, services, or construction to recover from the emergency at hand. In addressing the emergency, competition shall be encouraged, if practicable under the circumstances. On the following workday, the business unit shall provide to PaCO a written report of the circumstances, the nature and value of the commitments made, and details of any future services and supplies needed.
2. After-Hours Emergency
In the event an emergency arises after normal working hours, the business unit may take the necessary steps to control the emergency. On the following workday, the business unit shall notify their assigned Purchasing Agent, or the Purchasing Director, of the emergency and the steps taken to control the emergency. The business unit also shall, on the following workday, provide to PaCO a written report of the circumstances, the nature and value of the commitments made, and details of any future services and supplies needed.
VIII. Purchasing Requirements for Any Dollar Amount
A. Conflict of Interest
It is the policy of CDLE to avoid any conflict of interest, or the appearance of a conflict, with vendors and contractors. CDLE employees who purchase supplies and services or those involved in the purchasing and contracting process must avoid the intent and appearance of unethical or compromising practice in relationships, actions, and communications. This includes not soliciting or accepting money, loans, credit, prejudicial discounts, gifts, entertainment, favors, or services from present or potential suppliers which might influence or appear to influence purchasing decisions. You are encouraged to contact PaCO if you are unsure whether a transaction may appear to be a conflict.
Additionally, the State or vendors may offer special offers or discounts to State employees. CDLE’s policy is basically the same as that for conflicts of interest; CDLE employees involved in purchasing similar supplies and services are prohibited from participating in these special offers.
B. Insurance Requirements for All Service Purchases
It is the business policy of CDLE to require all vendors and contractors providing services on behalf of or to CDLE to comply with the State’s insurance requirements to protect State employees, State property, and the vendor or contractor from any damages or loss. For purchase of services within your sub-delegation limit, please contact your PaCO Purchasing Agent for further assistance on insurance requirements and to obtain model language on the State’s insurance requirements.
C. Statement of Work (SOW) and Specifications Documents
To ensure that CDLE obtains the proper services and supplies, there may be instances when PaCO requests that the business unit develop a SOW (for personal services purchases) or specifications document (for supply purchases). PaCO staff is available to assist business units in developing sufficient statements of work or specifications documents. Additionally, CDLE’s model SOW is available from PaCO.