101 - Foundations of Public Procurement Flashcards
American Bar Association (ABA) Model Procurement Code
Developed and adopted in 1979. State and larger local governments have individually codified the ABA MPC into procurement law and policy to effectively guide their procurement organizations.
Essentially, it is “a collection of statutory principles and policies that provudes guidance to public policy managers who wish to responsibly manage procurements.
Acceptance
- Indication that all parties to the contract agree to be bound by the terms of the contract
- An indication by one party of a willingness to act in accordance with the contract or offer.
- The assumption of a legal obligation by a party to a contract and its terms and conditions.
Acquisition
The process of obtaining supplies, services, or construction through purchase, lease, or grants.
Best Alternative to Negotiated Agreement (BATNA)
Plan B should negotiations begin to break down and sets criteria by which the state will walk away. BATNA contains all of the state’s options, including negotiating with other bidders, extending the existing contract, or rebidding.
(Bid) Preference Programs
Are usually procurements laws that mandate bid prices for preferred class of bidders be given special consideration when comparing bid prices.
i.e. SB/DVBE, TACPA
Bid Tabulation Sheet
A summary document of
Brand-Name-or-Equal-Specification
One or more manufacturers’ brand names, with identifying model numbers, used in a specification to evoke a certain quality, performance, and other salient characteristics needed to meet the requirements of the solicitation.
Breach of Contract
Failure by either contracting party to fulfill a contract wholly or in part, without legal excuse.
Bribery
The crime of offering, giving, receiving, or soliciting anything of value to influence action of an official or in the charge of a public duty.
Cannibalization
Used to describe the disassembly, dismantlement, stripping or tearing down of buildings or equipment for the salvage of parts or components. A process used to extend the life cycle of equipment.
Chief Procurement Officier (CPO)
The official that leads the central state procurement office and is responsible for all procurement efforts across the state as defined by statue or law
Code of Ethics
A guide of acceptable and ethical behavior as defined by an organization or public body.
Competent Parties
Persons legally capable of entering into a contract, being of legal age and sound mind.
Conflicts of Interest
- A situation that can undermine a person due to self or public interest
- A situation when parties discharge responsibility to a third party
Consideration
- Something of value which is exchanged by two parties and serves to bind or form a contract.
- A type of mutual commitment that must exist to form an express contract.
- That which is given or promised to bring a binding contract into existence.
Contract
- An obligation between competent parties upon legal consideration to do or abstain from doing an act.
- A legally binding promise, enforceable by law.
- An agreement between parties with binding legal and moral force
Contract Administration
A term used to describe the functions that are performed after parties have signed a contract.
Delegated Authority
Authorized or appointed individuals (outside the purchasing department) are given this authority under the entity’s rules/procedures that allow them to make small dollar purchases on behalf of the agency.
CA Department of General Services (DGS) Delegates Spend Authority to each California Department, Agency, Board, Office, etc.
Definition of Need
Identification of what is needed, how many, functionalities, features, etc.
-usually a rough idea which forms prior to researching the market and writing specifications
Design Specification
Describe dimensional and other physical requirements of the item to be purchased.
-concentrates on how a product is to be fabricated or constructed
-most traditional kind of specification
Emergency Procurement/Contract
Purchase made in response to unexpected and urgent request where health and safety or the conservation of public resources is at risk
CA - formal competitive bidding procedures are waived
Firm Fixed Price (FFP)
Type of contract providing for a price that is not subject to adjustments on the basis of the contractor’s cost experience
-place maximum risk and full responsibility on the contractor for all costs and resulting profit or loss
-maximum incentive for the contractor to control costs, perform effectively, and impose minimum admin burden upon the contracting parties
Fixed Price with Escalation
The response from the supplier/contractor outlining very specifically how the supplier proposes to complete the work
-outlined in the Scope of work
-defines what will be done, how, by whom, and cost factors
Fixed Price with Incentive
Provide incentive to reduce cost by allowing for the adjustment of profit and establishing a final contract price
-based on formula measuring the relationship of final negotiated cost to total target cost
-may be a price incentive for early performance
Invitation for Bids (IFB)
Procurement method used to solicit competitive sealed bid responses
Kickbacks
Payment of value to an individual with the goal of persuading or influencing their decision in a certain situation
Legality of Purpose
To be valid and enforceable, a contract must be be consistent with federal, state and local law and cannot violate legal statues of public policy.
Liquidated Damages Provision
Damages paid (agreed to by the parties to a contract) by the party who breaches all or part of the contract.
-May not be imposed as an arbitrary penalty
-It is incumbent upon the buyer to demonstrate, through quantifiable means, that damages did exist
Market Research
Involves collecting and analyzing information on the capabilities and limitations in the commercial marketplace, as well as determining the best method to obtain the required goods and services
-goal is to better understand the marketplace and suppliers
Mutuality of Obligation
Both parties to an agreement are obligated or none of the parties is obligated.
-sub-element of consideration
Negotiate
Discussing or bargaining to reach agreement in business transactions.
-process between two or more parties seeking to reach a mutually satisfactory agreement on, or settlement of, a matter of common concern.
Procurement Card (pCard)
Payment method whereby internal customers (requisitioners) are empowered to deal directly with suppliers for purchases.
-Generally, a pre-established limit is in place for each card issued
-facilitate on-line ordering from pre-approved suppliers under blanket contracts
Performance Specification
Used to identify the function that a using agency wishes to achieve and does not commit to any specific design or brand name.
-states what the purchaser needs the product/service to do
Primary Market Research
Research you do yourself to collect necessary data and narrow down specifications
Example: Surveying each primary department that uses a potential commodity or service
Procurement Officer
Any person duly authorized to enter into and administer a contract and make determinations and findings thereto.
-includes authorized representative of the procurement officer within the limits of their authority
Protest
A challenge to the award or proposed award of a contract for the procurement of goods and services or a challenge to the terms of a solicitation for such a contract
Public-Private Partnership (P3)
Broad term used to describe public facility and infrastructure contracts that minimally includes components of design and build into a single contract
-allocates risks to a the party best able to manage the risks and may assign a higher level of responsibility for means and methods to the partner
Public Procurement
The designated legal authority to advise, plan, obtain, deliver, and evaluate a government’s expenditures on goods and services that are used to fulfill stated objectives, obligations and activities
Qualified Products List (QPL)
A list of products that are the only items that meet the minimum specifications as determined by the using entity
-identified by the manufacturers’ name and model numbers
-used when quality is such a critical factor and the entity wants to stay with proven products
Request for Information (RFI)
A non-binding method whereby a jurisdiction needs input from interested parties for an upcoming solicitation.
-used to obtain comments, feedback, or reactions from potential responders prior to solicitation
-published via newspaper, Internet, or direct mail
Request for Proposals (RFP)
Used to solicit proposals from potential providers for goods and services
-Price is usually not the primary factor
-provides for the negotiation of all terms e.g. price
-may be single or multi step
-may include provision for the negotiation of best and final offers
Requisition
Internal document by which an agency sends details of supplies, services or materials to purchasing department
-usually includes description of need and other information
Responsible Bidder/Protestor
A business entity or individual who has the financial and technical capacity to perform the requirements of a solicitation and contract
Responsive Bid/Proposal
A bid or proposal that fully conforms in all material respects to the Invitation for Bids (IFB)/Request for Proposal (RFP) and all of its requirements
Reverse Auction
An online auction in which sellers bid against each other to win a buyer’s business
-typically used for commodities from pre-qualified providers
-aka eAuction
Scope of Work
A written description of the entity’s needs and desired outcomes for the procurement and serve as the basis for the solicitation
Secondary Market Research
Data that others have already gathered and made available
Example: Subscription to market research tool or data from trade associations about industry trends
Set-Aside
Acquisition or procurement exclusively or partially reserved for a special class of contractor
Example: A supplier that is designated as “local”
Sole Source Procurement
Situation created due to the inability to obtain competition.
-method where only one supplier possesses the unique ability or capability to meet the particular requirements of the solicitation.
-may require a justification as to why the vendor is the only source
Solicitation
A Invitation for Bid, Request for Proposal, or any document used to obtain bids or proposals for a contract
Statement of Work (SOW)
Response from the supplier/contractor outlining very specifically how the supplier proposes to complete the work as outlined in the Scope of Work
-defines what will be done, by whom, and cost factors
Surplus Property
Refers to goods or materials that are obsolete or no longer needed by an agency and are designated for disposal
Termination for Convenience
A contract clause that may be contained within contract to be ended at the discretion of the governmental entity.
-falls within the contracts provisions and with no reflection on the contractor’s performance.
