Procurement Methods

Question 1

Informal Bidding

Answer 1

1) From over $5,000 up and equal to $25,000
2) Must solicit from at least three (3) vendors
on Centralized Master Bidders List (CMBL), two (2)
of which must be HUB vendors
3) MUST be within the NIGP code and MAY be by geographic area
4) Negotiations not allowed (unless only one qualified vendor)
5) Lowest price wins
6) Acceptable methods to receive bid: in person, mail, fax, email, over the phone.

Question 2

Invitation for Bids (IFB)

Answer 2

1) A formal written competitive sealed bid to obtain written bids
2) MUST be used for over $25,000 (when appropriate); MAY be used for those less than this
3) Most often used for goods when specifications can be clearly defined
4) Negotiations are not allowed (unless there is only one qualified bidder)
5) Must solicit all eligible vendors on CMBL with NIGP code
6) Lowest price wins

Question 3

SPD Non-Delegated Purchases

Answer 3

1) State and Federal Surplus
2) Set Aside Programs: a) Texas Correctional Industries TCI and b) State Use Program- TWC oversees Texas Purchasing from People with Disabilities TPPD and WorkQuest administers the day to day operations)
3) Interagency Cooperative Contracts
4) Interlocal Cooperative Contracts
5) Term contracts, Managed contracts, Travel Services Contracts
6) Mail and Messenger Service Contracts
7) Used equipment
8) Printing Services
9) SPD Administered Agency Specific Procurements
10) Proprietary Purchases (some could be done under delegation by rule or under the review and delegation process)

Question 4

What does Texas law mandate regarding contract award?

Answer 4

May only be made to vendors providing best value to the State

Question 5

Why is selecting the correct procurement method so important?

Answer 5

The best value standard may vary according to procurement method, so if the incorrect method is selected, it will not result in best value.

Question 6

Agencies must use SPD and DIR designated

procurement methods unless?

Answer 6

the procurement is subject to a statutorily specified exclusion or exemption.

Question 7

How does SPD delegate its purchasing authority?

Answer 7

1) Delegated by rule for a pre-approved class or contract value
2) case by case basis when an agency obtains it through the SPD delegation and review process (OMR or POD portal)

Question 8

How should SPD delegated purchases be accomplished?

Answer 8

Through competitive bidding whenever possible

Question 9

Even if SPD has delegated its purchasing authority to an agency, what are these delegated procurements still subject to?

Answer 9

ESBD posting requirements and CAT and QAT reviews

Question 10

What types of procurements has SPD delegated to agencies by rule?

Answer 10

1) one-time purchases of goods (including goods for resale) that do not exceed $50,000;
2) purchases of services that do not exceed $100,000 (excludes professional or consulting services, services of an employee of an agency, and services of public utilities);
3) direct publications;
4) purchases of perishable goods;
5) distributor purchases;
6) internal repair purchases;
7) fuel, oil, and grease purchases;
8) emergency purchases.
9) Spot purchases of $5,000 or less (excludes printing services of $2500 or more)

Question 11

What is not permitted to avoid the competitive bidding requirement?

Answer 11

Dividing purchases into small lot purchases to match the delegation dollar thresholds

Question 12

If a procurement type is not addressed by SPD delegated rule or statutory exemption, what must the agency do?

Answer 12

Obtain delegated authority by:

1) Submit an Open Market Request via email for goods greater than $50,000 OR
2) Submit request through Procurement & Oversight Delegation portal for services greater than $100,000

Question 13

When an agency is required to request SPD’s authority for a purchase, when can the agency issue the solicitation?

Answer 13

not until it receives a letter of delegation from SPD, even if receipt of the letter takes longer than the typical 30 day review by SPD

Question 14

What happens if SPD denies an agency’s request for delegation authority?

Answer 14

SPD will obtain goods or services on behalf of agency

Question 15

What are agencies encouraged to do on their website to encourage a strong pool of vendor responses for solicitations?

Answer 15

Post upcoming solicitations in the next 6 months

Question 16

What do you need to know to identify the procurement method? (Guide p. 15)

Answer 16

procurement type, cost estimate, and purchasing entity

Question 17

What are the condensed purchasing process steps to determine procurement method (from slide presentation)

Answer 17

1) State and Federal Surplus
2) Set Aside Programs
3) Interagency Contract
4) SPD Term Contract
5) SPD Delegation by Rule
6) SPD Review & Delegation

Question 18

What is the Texas Disaster Act of 1975? How can an agency make a purchase under this Disaster Act?

Answer 18

The Governor may suspend the provisions of any statute if compliance would prevent coping with the disaster. An agency’s purchase under a disaster must:

1) clearly relate to the disaster,
2) conform to the directives of the disaster declaration, 3) occur within the timeframe specified in the disaster declaration.

Question 19

Can the “emergency purchase” be under the Texas Disaster Act?

Answer 19

Only if it falls within the parameters of the declared disaster.

Question 20

Comparing the procurement process under “Emergency Purchases” and under “Texas Disaster Act” which one does SPD have authority over?

Answer 20

SPD only has authority over emergency purchases, not for purchases under Texas Disaster Act.

Question 21

How are professional services procured? Are they delegated or non-delegated?

Answer 21

Usually by an RFQ. They are delegated by statute, so they don’t require SPD delegated authority.

Question 22

What reporting/approval are professional services procurements subject to?

Answer 22

ESBD posting and CAT review and LBB reporting

Question 23

What are professional services?

Answer 23

Within Scope of practice defined by law (Chapter 2254) or professional license (e.g. registered nurse, doctor, optometrist, architect, accountant, landscape architecture, engineer, real estate appraisal) Also includes interior design

Question 24

What is award of a professional services contract based on?

Answer 24

competence and qualifications and fair and reasonable price

Question 25

What is a consulting services contract?

Answer 25

Studying or advising an agency that does not involve traditional employee relationship. Can only contract if the need cannot be filled by agency personnel or be obtained through a state govt. contract

Question 26

What is considered a “major consulting services” contract?

Answer 26

Value will exceed $15,000 for a state agency or $25,000 for an IHE.

Question 27

What review/approval are consulting services procurements subject to?

Answer 27

ESBD posting, CAT review, LBB reporting and notice to Governor’s Board and Planning Office

Question 28

What are TXMAS contracts?

Answer 28

They supplement Term Contracts by adapting existing competitively awarded government contracts with Texas terms and conditions. Agencies don’t have to obtain SPD delegated authority to purchase goods exceeding $50,000 or services exceeding $100,000 with TXMAS contracts.

Question 29

What are additional requirement/conditions of TXMAS Contracts?

Answer 29

1) Do NOT need to obtain SPD delegated authority to purchase goods exceeding $50,000 or services exceeding $100,000 with TXMAS contracts.
2) Must conduct best value determination (no more than $50,000- award directly to vendor; more than $50,000- obtain 3 price quotes)
3) Negotiations are permitted but vendors don’t have to honor prices below minimum (Vendor cannot charge a price higher than price published)
4) Orders are entered on Texas SmartBuy unless contract page states that offline sales are authorized
5) Incidental, off-schedule items (not listed under contract) may be purchased from vendor as best value, open market items provided they are NECESSARY for product integration or completeness (e.g. special cord for a phone)- These items MAY NOT EXCEED $5,000 or 50% of PO total
6) Must post contract AWARD on ESBD for over $25,000

Question 30

What other methods must be checked 1st before purchasing with TXMAS contract?

Answer 30

TCI, State Use, and Term contracts

Question 31

What services are not offered through TXMAS contracts?

Answer 31

Consulting services and some professional services

Question 32

For competitive bidding, what factors other than price and specifications may help determine best value?

Answer 32

1. installation costs;
2. life cycle costs;
3. the quality and reliability of the goods and services;
4. the delivery terms;
5. indicators of probable vendor performance- past performance, financial stability, experience
6. the cost of any employee training associated with a purchase;
7. the effect of a purchase on agency productivity;
8. the vendor’s anticipated economic impact to the state (tax revenue or employment)

Question 33

When is RFP recommended?

Answer 33

1) factors other than price should be considered
2) negotiations are allowed and encouraged (BAFO can be used)
3) requirements cannot be described by detailed specifications in a PO
4) Vendor is expected to provide innovative ideas

Question 34

What is the key difference between Invitation for Bid and Request for Proposal?

Answer 34

Negotiations not allowed with IFB but are with RFP; In the RFP, the solicitation must state the factors other than price that will be considered to determine which proposal offers best value

Question 35

What is a Request for Offer?

Answer 35

1) Primary purchasing method for AIS, other than those under DIR’s IT commodity program
2) Available when agency has obtained: the exemption from DIR, DIR certification of unavailability, and approval from LBB
3) Does not require SPD delegation of authority
4) Negotiations are allowed
5) Includes factors specific to IT (e.g. cybersecurity and cloud service reqs)
6) Best value standard is lowest overall cost but this also includes capacity for upgrading, level of training to use it, etc.)
7) $5 million or more- submit to POD for CAT and QAT review

Question 36

What is a Request for Qualifications?

Answer 36

Used for professional services where respondents are evaluated solely on qualifications and skills
Price is not a factor until AFTER vendor selection

Question 37

What is Request for Applications?

Answer 37

Not a sanctioned method for goods and services

Used to invite grant applications in which grants are tied to designated funds and for a specific purpose

Question 38

What must an Request for Applications include?

Answer 38

1) Grant objective, guidelines, and limitations on spending/eligibility
2) Specify evaluation criteria and any other info needed to submit application
Agencies should refer to Uniform Grant Management Standards for more information.

Question 39

What is a Request for Information?

Answer 39

Not used for procurement but for research- invitation to the vendor community to obtain info that may be used for a future solicitation

Question 40

An unsealed, competitive solicitation used to obtain offers submitted verbally or in writing for purchases with a value of $25,000 or less.

Answer 40

Informal bid or informal solicitation

Question 41

For competitive bidding, what must the agency specify in the solicitation regarding best value?

Answer 41

Factors other than price that will be considered