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Procurement Methods & Choices TXMAS (Texas Multiple Award Schedule) The TXMAS contracts can also be searched from the CPA website: By TXMAS Schedule: http://www.txsmartbuy.com/contractsearch Using search fields such as Contract Number, Contractor/Dealer, Contract Category,GSA Schedule, Keyword, or VID Once you locate a contract, click on the TXMAS contract number to go to the TXMAScontract details: The initial page is an introductory page that details the general terms andconditions of the contract At the top of the page is a link to items available on contract If the goods and/or services you desire are not listed on this contract link, thenwhat you desire is not TXMAS eligible. Determine if item description, cost, and lead time fit your needs.20

Procurement Methods & Choices TXMAS (Texas Multiple Award Schedule) Pricing quoted should be equal to or less than the pricing listed on the TXMAScontract. Pricing should coincide with the on-line TXMAS catalog or contract pricing Incidental, off contract items may be purchased as ‘Open Market’, however the ratiocannot be less than 50/50, and cannot total more than 5K without approval from theStatewide Procurement Division (PCS will obtain approval). Negotiation is allowed TXMAS Program Manager: Brian Haught [email protected]

Procurement Methods & Choices Department of Information Resources (DIR) ‘Cooperative Contracts’ These are contracts and awards for Information Systems (IS) hardware, software, staffingservices, maintenance, managed services, technology training, DBITS, and otherproducts/services with high customer demand The contracts can be searched from the DIR website at: http://dir.texas.gov/ Click on ‘All Contracts and Services’ link at the top Search by Category, Vendor Name, Contract Number, Brand, or by Class/Item Code Once you locate the contract you want, click on the link to take you to the contract details Links to the contract, terms, pricing, and HUB plan are listed on each contract page If under 50K, you are not required to obtain competitive quotes from other DIR vendors,however you are welcome to do so to demonstrate ‘best value’22

Procurement Methods & Choices Department of Information Resources (DIR) ‘Cooperative Contracts’ DIR quotes must contain the following: DIR Contract Number Pricing should coincide with the DIR contract pricing, usually listed in the Appendix C – PricingList: Include part numbers If DIR contract pricing is structured as ‘% discount from list’ or ‘MSRP’, then the quote shouldreflect the ‘List’ or ‘MSRP’ price, the applicable DIR % discount, and resulting price Negotiation is allowed All DIR contracts have an officially filed HUB Subcontracting Plan (HSP) If your goods/and or services from the DIR vendor involve subcontracting other than what iscurrently filed, the DIR vendor will have to revise the filed HSP with DIR prior to use of thecontract23

Procurement Methods & Choices DIR and TXMAS Quoting If the DIR or TxMAS item or service you are procuring is under 50K, you may award directly tothe vendor of your choice, as long as you feel the purchase is of a ‘best value’ determination If the DIR or TXMAS item or service you are procuring is over 50K: Advertise to at least three (3) competing DIR or TXMAS vendors (if available) If this is not done your requisition may be rejected and you may have to start the processover again There are exceptions – check with Procurement.24

Procurement Methods & Choices DIR – SB20 84(R) Requirements If the DIR or TXMAS item or service you are procuring is over 50K: Advertise to at least two (3) competing DIR or TxMAS vendors (if available) If this is not done, Procurement will do this for you. If the DIR or TXMAS item or service you are procuring is over 50K and up to 150K: Advertise to at least six (6) competing DIR or TXMAS vendors (if available) If this is not done, Procurement will do this for you. If the DIR or TXMAS item or service you are procuring is over 1M: Procurement will advertise to all eligible applicable TxMAS vendors Procurement will do this for you.25

Procurement Methods & Choices DIR – SB20 84(R) Requirements (con’t) Statement of Work Portal: DIR DBITS (services), Managed Services for IT, IT SecurityServices, Cloud Services, and Comprehensive Web Development procurements over 50K that cannot be purchased from an existing DIR contract catalogue, the followingare required: The agency must submit a Statement of Work, from a DIR template, through theDIR portal for review and approval prior to posting.26

Procurement Methods & Choices Proprietary Purchases Texas Government Code Section §2155.067 Defined as: product that is proprietary to one vendor and do not permit anequivalent product to be supplied Justification Form Required – PCS02 Form must be completed For Formal procurements ( 25K), is NOT exempt from the procurementsolicitation process Attach PCS02 Proprietary Justification Form and budgetary quote to the requisition27

Procurement Methods & Choices Emergency Purchases Defined by Texas Gov’t Code Section §2155.137; Defined by Texas Administrative Code Rule §20.210; Rule §20.82 Delegated Purchases applies to your purchase; Further explained in the Procurement and Contract Management Guide; Emergencies occur as the result of unforeseeable circumstances and may require an immediate response to avert anactual or potential public threat. If a situation arises in which compliance with normal procurement practices is impracticalor contrary to the public interest, an emergency purchase may be warranted to prevent a hazard to life, health, safety,welfare, property, or to avoid undue additional cost to the state. Emergencies are NOT defined as a potential lapse in funding, unless the case can be made that it would cost the stateadditional monies if not acted upon before the current biennium funds lapse. However, this is not a typically valid reason,which is typically attributed to poor planning. Justification form required, PCS01 Emergency Justification Form is generated by the program. For Formal procurements ( 25K), the purchase is NOT exempt from the procurement solicitation process or the formalprocurement requirements .however the minimum posting times do not apply.28

Procurement Methods & Choices Internal Repairs Definition: When the extent of the repair cannot be reasonably determined until theequipment is disassembled and an analysis performed. Example: Repair of an air conditioner or some other piece of equipment that quitworking. Initial estimate must be below the ‘spot purchase’ threshold of 5,000.00 If not, then it is an Informal Purchase, and there are minimum biddingrequirements The initial quote from the vendor must include the following: Hourly labor rate Estimate for repair Any known component costs that may be required29

Procurement Methods & Choices Internal Repairs (cont.) After the repair estimate is received, and you have the final cost of the repair, you willcommunicate to PCS for a purchase order change notice The benefit of categorizing this as an ‘Internal Repair’ from the onset is that shouldthe repair estimate be above the spot purchase limit of 5K, there is an allowance togo ahead and approve the purchase order and purchase order change notice withoutobtaining competitive quotes. Thee is a limit to the extent and allowance of the repair amount; PCS will discuss withthe program.30

Solicitation MethodsInvitation For Bid (IFB) Primarily used for the purchase of Goods When there is a clearly defined specification, such as a part number Very little ambiguity, if any, about what is expected to be delivered Also utilized in Emergency and Proprietary purchases Awarded to lowest bid amount As there is little to no ambiguity as to what is expected to be delivered Contractor must meet the agency stated minimum qualifications, and demonstrate these minimumqualifications in their bid response Once the defined minimum qualifications are demonstrated, you must consider all bidders equally qualified No Negotiation allowed Two Exceptions: Emergency Purchase When there is only one bid response Bid Opening – Open to the Public Names and all prices are read aloud31

Solicitation Methods (cont)Request For Proposal (RFP) Primarily used for the purchase of Services, a combination of goods and services, or highly complex procurements The respondent is required to propose how the goods/services will be delivered The evaluation criteria is based upon a combination of factors (example): Pricing40 points Qualifications60 pointsStandardized Qualifications criteria, can vary from solicitation to solicitation: Respondent’s Ability to Provide Construction Services and Proposed Team’s Relevant Experience30 points Respondent’s Quality and Safety Program Respondent’s Financial Stability and Risk10 points Respondent’s Proposed Methodology15 points5 points Process allows for an ‘Interview’, also known as an ‘Oral Presentation’, to clarify vendor’s responses and to further evaluate thehighest ranked respondents Awarded to the highest ranked respondent once evaluation/interview/oral presentation is completed ‘Best and Final Offer’ (BAFO) and Negotiation IS allowed RFP Opening – Open to the Public TGC §2269 Construction - Names and all prices are read aloud; all others, names only32

Solicitation Methods (cont)Request For Qualifications (RFQ) Primarily used for the purchase of Professional Services, as defined by Texas Gov’t Code§2254. The respondent is required to demonstrate their qualifications for the services required. Standardized Qualifications criteria, can vary from solicitation to solicitation: Respondent’s Relevant Experience & QualificationsRespondent’s MethodologyRespondent’s Quality Control & Safety Program60 points25 points15 points Process allows for an ‘Interview, also known as an ‘Oral Presentation’ ’ to clarifyvendor’s responses and to further evaluate the highest ranked respondents. Awarded to the highest ranked respondent, based upon demonstrated qualifications,once evaluation/interview/oral presentation is completed. Negotiation IS allowed This is where the agency negotiates a fee schedule for the project, as you cannot request fees in the initialresponse RFQ Opening – Open to the Public Names of respondents only33

Solicitation Methods (cont)IFBvs.RFPvs.RFQ Shorter overall time frameLonger overall time frameLonger overall time frame Evaluated against specs / priceEvaluated against criteriaEvaluated against criteriaqualifications only Public Bid Opening –Names & PricesPublic Proposal Opening Names onlyPublic Submittal Opening Names only Technical clarifications onlyInterviews/Oral PresentationsInterviews/Oral Presentations No Negotiation AllowedTwo exceptions: emergency,and only one bid receivedBAFO/Negotiation allowedNegotiation allowed Best Value Low BidBest Value Combo of Price& Qualifications, rankedBest Value reasonable andcustomary fee schedule negotiatedwith ‘most qualified’34

‘Best Value’ Standard You hear a lot about ‘best value’ in public procurement.What exactly is ‘best value’? Believe it or not, there is a law (statute) that defines it:Texas Gov’t Code 2155.074 ‘Best Value Standard forPurchase of Goods and Services’.35

‘Best Value’ Statute §2155.074‘In determining the best value for the state, the purchase price and whether thegoods or services meet specifications are the most importantconsiderations. However, the comptroller or other state agency may, subject toSubsection (c) and Section 2155.075, consider other relevant factors, including: (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 under the contract such aspast vendor performance, the vendor's financial resources and ability toperform, the vendor's experience or demonstrated capability andresponsibility, and the vendor's ability to provide reliable maintenanceagreements and support; (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 or a subdivision ofthe state, including potential tax revenue and employment; and (9) other factors relevant to determining the best value for the state in thecontext of a particular purchase.’36

‘Best Value’ Statute §2155.074Determining ‘Best Value’ in your Program’s Procurements PCS recognizes the using program is the technical subject matter expert on whetheror not the quote is reasonable and customary When there is no competition (‘spot’ purchase, TXMAS, DIR, Proprietary), thefollowing guidelines should be followed in order to make a ‘best value’ determination: Scope of Work is detailed and acceptable to HHSC employee Quoted hourly rate is usual and customary for the services requested The number of labor hours are justified Parts are itemized and separate from labor – no flat fees allowed An analysis of the above in order to determine ‘best value37

Historically Underutilized Business(HUB) Program Supported by Texas Government Code Chapter §2155.505 and Texas AdministrativeCode Chapter Title 34, Part 1, Chapter §20, Subchapter’s §20.14 – §20.28 Requires state agencies to provide opportunity for HUBs to quote on goods and/orservices for procurements above 5,000.00, as well as subcontracts from primevendors when the contract award will be above 100K Link to Statewide HUB Program: / Requirements to provide outreach and opportunity to HUBs for Open Market or ‘on thestreet’ procurements at the following thresholds: 5,000.01 - 25,000.00Informal PurchaseMin. 3 CMBL w/ 2 HUB’s 25,000.01 and aboveFormal PurchaseFormal Notification to allapplicable CMBL vendors including HUB’s38

Historically Underutilized Business(HUB) Program Spot purchases and Informal purchases present opportunities to utilize a HUB vendor. To locate aHUB vendor when searching on the CMBL, select ‘HUB’s on CMBL’ option at the top of the CMBLpage. Formal Solicitations 100K: HUB Subcontracting Plan (HSP) Requires the ‘prime’ respondent to provide opportunity to HUB’s to quote on subcontractingperformed under the contract. The HSP is a material aspect of the contract. The HSP must be reviewed and approved for compliance by the HHSC HUB Program You must attach a HUB Determination Form PCS406 to the requisition.39

Obtaining Budgetary QuotesReview of Budgetary Quote Process Checklist Contact PCS Construction Team Purchaser for the current CMBL list applicable to your procurement You may supplement with whomever you choose Send the same scope of work to all vendors, at the same time, and set a deadline for response “no bid’ or no response fulfills the bidding requirement If there is a ‘walk-through’, all vendors should be invited to be at the same walk-through at the same time You should prearrange the walk-through with your selected bidders to insure all can attend. If all cannot attend, then change the schedule to adate when all can attend. Walk through sign in sheet (for your protection) The bid notice should include a deadline for bid submission – or else you will never know when the bid is over The bid notice should include minimum insurance requirements – document provided Hard copy quote should contain the following: Description of services Breakdown of material and labor – no flat fee Hourly labor rate with estimated number of hours Any discounts should be reflected after ‘standard’ or ‘list’ No taxes Keep for your records: Budgetary Quote Process Checklist Budgetary quote template and email sent to the vendors, CMBL list provided by PCS Additional notification emails Jobsite walkthrough sign in sheets Any clarifications, addendums, or answers to questions All quotes/bids received. For no bids, on the jobsite walkthrough sign in sheet, make a note that there were ‘x’ number of no bids or no responses received. You should never copy/paste another vendors bid or quote into a bid notice or the budgetary quote template40

Budgetary Quote Process Checklist1.02.03.0Contact PCS Complex Team Purchaser to obtain the applicable CMBL list1.1Budgetary quote email notice must be sent to minimum three CMBL vendors;1.2At least two CMBL vendors must be HUB's;1.3All CMBL Vendors must be from same Class/Item code.1.4Recommendation is to send the budgetary quote email notice to as many vendors as practicable.1.5You may include additional vendors not on the CMBL, but send the email notice to all - at the same timeSave the CMBL file sent to you from the PCS Purchaser for your records.You must use the Budgetary Quote Template for your budgetary quote process3.1Copy the text from the budgetary quote template and paste it into your email notice.3.2Edit the highlighted sections as appropriate to your project.3.3Typically, allow three to five days for bidders to respond.3.4Walkthrough(s) and questions submitted may affect this timeframe.3.5If walkthroughs are offered, ensure that sufficient time is allowed for prospective bidders to plan to attend.3.6If there is a walkthrough, all vendors should be invited to be at the same walkthrough at the same time.3.7If walkthrough is MANDATORY, recommendation is to schedule two (2) walkthroughs.3.8If walkthrough is OPTIONAL, schedule one (1) walkthrough.3.9A "Jobsite Walkthrough Sign-In Sheet" is part of the Budgetary Quote Template.3.10Regardless of whether walkthrough is optional or mandatory, all attendees (includes HHSC M&C or facility staff)are required to sign in. Retain the sign-in sheet for your records.3.11Remove yellow highlighting from edited text.3.12Delete red text with green highlighting when editing is complete.3.13Procurement will be happy to assist in editing or review prior to emailing.3.14Email the prepared Budgetary Quote Template to the PCS Purchaser for final reviewProvided by ProcurementBudgetary Quote TemplateWalkthrough Sign-In SheetEmail bid announcement41

Budgetary Quote Process Checklist(cont.)4.0The email notice with the Budgetary Quote Template should be sent 'To' the selected vendors, 'CC' yourself, andinclude the following:4.14.2All highlighted sections completed.Minimum insurance requirements attachment (services only)5.0Answers to submitted questions should be sent simultaneously to all vendors that you requested a budgetaryquote from6.0Print the email notification list for your records; THE EMAIL MUST CONTAIN THE VENDOR EMAIL ADDRESSES USE THE 'TO' FIELD7.0"No Bid" or no response fulfills the bidding requirement8.0Email copy of the bid/quote should contain the following:9.08.1Description of services8.2Breakdown of material and labor - no flat fee8.3Hourly labor rate with estimated number of hours8.4Any discounts should be reflected after 'stand

Procurement & Contracting Services (PCS) Staff Richard D. Ehlert, CTCD, CTCM Director, Complex Construction [email protected] 512-406-2429