Agenda 09/23/2008 Item #10LItem # 10L
September 23, 2008
Page 1 of 6
EXECUTIVE SUMMARY
Report to the Board regarding the application of the local vendor
preference policy for purchases between $3,000 - $50,000:
OBJECTIVE: To advise the Board as to how the local vendor preference policy
adopted by the Board in June has been applied to the informal quotation
process.
CONSIDERATIONS: On June 10, 2008, the Board of County Commissioners
adopted a resolution amending the County's purchasing policy to include a local
vendor preference requirement. The policy stipulates under the formal bid
process, the lowest bidder who is deemed to be "local" and who bids within 10%
of the lowest overall bidder is given a unilateral right to match the lowest bid
offer. The policy also applies to the competitive sealed proposals process
wherein local firms receive 10 points in their evaluated score for being "local ".
The resolution adopted by the Board governing the sealed bid and sealed
proposal processes contained language with explicit direction. Accordingly,
changes to those processes were implemented immediately. The Board motion
also directed staff to apply local vendor preference to the informal quotation
process, which is used by all County departments for purchases between
$3,000 - $50,000 and is set forth under Section IV of the Board's purchasing
policy. However, the approved resolution contained no language and provided no
guidance as to how to implement the preference policy for purchases subject to
the informal quotation process.
The informal quotation process is a largely decentralized process where using
departments are permitted to solicit price quotes from vendors directly. Each
department reviews the quotes received and enters a purchase requisition into
SAP naming the recommended vendor with the quotes enclosed. The
Purchasing Department reviews the quotes and if it concurs with the
recommendation, issues a purchase order to the requested vendor. In the event
that purchasing staff does not concur with the recommendation, purchasing staff
will discuss the issue with the user until a satisfactory outcome is achieved.
Over the past three years, the Board agency has transacted nearly 2,000
purchases each year via informal quotes, resulting in many times more
solicitations than are processed through the formal competitive processes. If the
Board policy for the ITB and RFP processes were to be applied to the informal
quote process, it would require that the process be largely centralized within the
Purchasing Department as the local preference policy is complex to administer
and sensitive to dispute. This in turn would mean that the Purchasing
Department would require between 1 -2 additional full time staff to handle the
additional workload.
Item # 10L
September 23, 2008
Page 2 of 6
In an effort to give the using departments clear direction and to do so without
having to increase staffing, the Purchasing Department has amended the
existing administrative procedure governing the informal quotation process to
incorporate the local preference policy adapted to that particular process. The
process is similar to the language in the ITB process in two critical ways, 1)
vendors are required to submit a written affidavit attesting that they are a local
vendor and 2) vendors who claim local preference and whose quote falls within
10% of the lowest overall quote are given the right to match the lowest overall
quote.
The procedure for informal competition differs from the ITB process in that it does
not require the using department to solicit nor the responding vendors to submit
the local preference affidavit with their price quote. Instead, vendors can submit
the affidavit to the Purchasing Department electronically at any time and are not
required to submit it with their price offer. Additionally, using departments are to
endeavor to contact local firms when soliciting quotes.
Enclosed is a copy of the revised procedure which will be added to the
Procurement Administration Manual, which are the body of administrative
procedures written, edited and maintained by the Purchasing Department under
the Board's purchasing policy.
FISCAL IMPACT: None directly associated with this action.
LEGAL CONSIDERATIONS: This item has been reviewed by the County
Attorney's Office. It does not raise any legal issues —CMG.
GROWTH MANAGEMENT IMPACT: There is no impact on the Growth
Management Plan.
RECOMMENDATION: That the Board of County Commissioners accepts the
enclosed report regarding the implementation of the local preference policy to the
informal quotation process as set forth in the Procurement Administration
Procedures Manual.
PREPARED BY: Steve Carnell, Purchasing /General Services Director
Item # 10L
September 23, 2008
Page 3 of 6
Report to the Board regarding the application of the local vendor preference policy for purchases
between $3,000450,000. (Steve Carnell, Purchasing Director)
Prepared By:
Department
Date
Purchasing
9/10/2008 5:09:22 PM
Approved By:
Department
Approval
Date
Adminstrative
Disapproved
9/11/2008 12:04 PM
Services
Approved By:
Department
Approval
Date
Purchasing
Approved
9/11/2008 2:09 PM
Approved By:
Department
Approval
Date
Administrative
Approved
9/11/20082:43 PM
Services
Approved By:
Department
Approval
Date
Office of
Management
Disapproved
9/11/2008 2:45 PM
and Budget
Approved By:
Department Approval
Purchasing Pending
Approved By:
Date
9/11/2008 9:30 PM
Item # 10L
September 23, 2008
Page 4 of 6
Department Approval
County Attorney Approved
Approved By:
Date
9/12/2008 3:11 PM
Department Approval Date
Office of
Management Approved 9/12/2008 4:51 PM
and Budget
Approved By:
Department Approval Date
County Approved 9/13/2008 9:30 AM
Manager's Office
ATTACHMENTS:
Name: Description: Type:
D Ex Sum LVP for Informal Quotations Report to the Board re: LVP Procedures for purchases
(9- 08)rll.doc between $3,000 - $50,000 Executive Summary
D PProc A in PrDpgdVr @ @_jLVP for_qu9Le Administrative Procedure for Purchases between $3,000 -
only),doc $50,000 Backup Material
Item # 10L
September 23, 2008
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2. Informal Quotations (purchases greater than $3,000 to $50,000 not already under
contract):
a. Purpose and Applicability Generally used for acquiring commodities and services
below the County's formal competitive threshold.
b. Process Description.
1. The department responsible for the purchase will contact at least three (3)
vendors believed capable of furnishing the required commodities /services
through the issuance of a Request for Quotes (RFQ). The soliciting department
will endeavor to contact vendors who sell the desired commodities and services
and who have a local vendor preference (LVP) affidavit on file with the
Purchasing Department. Information concerning the eo °
sue f wer4E e
specifiGations and all etkeFimportant terms and conditions of the purchase shall
will be provided in a uniform and consistent manner to each vendor.
2. To the greatest extent possible, All ptifehases all RFQs shall be solicited
electronically and generally done so using the County's E- procurement system.
In instances where one or more vendors may not have Internet access, quotes can
be solicited by other means (e.g.; fax, telephone) using standard forms furnished
by the Purchasing Department. In the event a quotation is received by telephone,
subsequent written confirmation of the vendor's quote will be obtained. To this
end, the Purchasing Department will maintain a page on the Department's
Internet web site where vendors may enter their LVP affidavit at any time in
°v c 10,000 ha a be solicited in and all o ff-eFs Hiust be _,.,,,.iyed :_
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3. Pursuant to preparing and issuing the RFQ, the soliciting department must
determine the essential requirements of the purchase, which, at minimum must
include the specifications or scope of work for the required commodities and/or
services; how the price order of the quotes will be determined and what factors
(in addition to price) will be considered in making an award.
4. The department making the purchase will review the quotations received and
determine the apparent price order of the quotes. The department will selects the
responsive offer from a qualified vendor that best meets the needs of the
department that is consistent with the requirements of the terms and conditions of
the RFQ yaetaHenstegae
5. The department will submit a requisition to the Purchasing Department naming
the recommended vendor and attaching the quotes received. Prior to issuing a
purchase order, the Purchasing Department's Operations Section will determine
if any of the vendors are entitled to receive a Right to Match (RTM) option under
the County' LVP policy. In such cases, a purchasing agent from the Purchasing
Department's Acquisition Section will contact staff from the department making
the purchase and jointly verify that the LVP eligible vendor is qualified to
perform the work. Upon doing so, the Acquisitions Agent will formally extend
Item # 10L
September 23, 2008
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the RTM option to that vendor in accordance with this procedure with a formal
deadline to respond included in the RTM offer. The local vendor will be given a
single opportunity, without negotiating any changes to the requirements of the
purchase, to agree to match the price tendered by the apparent lowest priced
vendor "as is ". In the event that the local vendor agrees to match the price offer
from the lowest price vendor, the quote will be awarded to the local (or
"matching ") vendor. The Acquisitions Agent will notify the apparent lowest
priced vendor and the department making the purchase of that action. In the event
that the local vendor declines to match the lowest price offer or does not match in
a responsive manner or fails to timely respond to the match offer, award of the
purchase will be made to the lowest, qualified and responsive vendor.
6. Subsequent to the issuance of and-aRer obtaining a purchase order, the
department making the purchase will verbally authorize the vendor to initiate the
work. In instances where the vendor submits a form of contract with their
quotation and requests the County to sign the document, the operations
purchasing agent will refer the matter to the appropriate contracts specialist for
resolution in a manner consistent with Section III.C.1 of these procedures.
7. The user department may request assistance from the Purchasing Department in
obtaining verbal or written quotations.
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