"So Ron, why on earth did you choose HUD as an example of fair, open, transparent, bidding? I thought they'd be the last government agency to be held up as the reference standard."
That's why I chose them.
At any rate, this is what HUD says about procurement, and I've added a few comments to help translate the tortuous language of government. About halfway through, throw a glass of ice water in your face, and continue reading.
This guy reads a lot of my stuff;
Here we go:
-----
https://portal.hud.gov/hudportal/documents/huddoc?id=cdbgchapter14.pdf
CHAPTER 14: PROCUREMENT
CHAPTER PURPOSE & CONTENTS
This chapter provides an overview of the federal procurement requirements. It covers the basics of Part 85.
SECTION TOPIC
14.1 Overview of Procurement Requirements
When a grantee elects to hire a contractor, whether to administer a program, complete a task or do construction, those contractors must be procured competitively. This section highlights the procurement rules.
Key Topics in This Section: Procurement requirements and methods
Regulatory/Statutory Citations: 570.502, 570.610, 85.36
Other Reference Materials on This Topic: CPD Notice 96-05, Executive Order 12549
Both grantees and subrecipients must follow federal procurement rules when purchasing services, supplies, materials, or equipment. The applicable federal regulations are contained in:
State and local governments and Indian tribes – 24 CFR Part 85. A copy of Part 85 is included in the attachments to this chapter;
Nonprofits, institutions of higher education and hospitals – OMB Circular A-110, as implemented through 24 CFR Part 84.
In addition to federal regulations, most states and many local governments have laws and regulations regarding procurement. Each entity receiving CDBG funds should be aware of state and/or local laws that may affect procurement policies.
Grantees should adopt procurement policies that describe how the grantee or subrecipient will procure supplies, materials, services, and equipment. The policy should assure that all purchases are handled fairly and in a manner that encourages full and open competition. Grantees should follow the procedures established in the policy, and document how all procurements were handled.
The “essence of good procurement” can be summarized as follows:
Identify and clearly specify standards for the goods or services the grantee or subrecipient wants to obtain;
Seek competitive offers to obtain the best possible quality at the best possible price;
Use a written agreement that clearly states the responsibilities of each party;
Keep good records; and
Have a quality assurance system that helps the grantee or subrecipient get what it pays for.
RRS: This may also be accomplished with a "Performance and Payment" Bond. Very cheap insurance for the taxpayer (typically 1%), and guarantees the project will be finished properly, or the bonding company steps in, and hires someone else (at no expense to taxpayers).
Believe me, no roofing contractor on earth wants their bonding company to take over. They will forfeit all assets the bonding company required to issue the bond in the first place. BRUTAL.
Basically CDBG (November 2007) 14-1
HUD, Office of Block Grant Assistance
Chapter 14: Procurement
There are four methods of procurement that are identified in the federal regulations:
Small purchase procedures;
Sealed bids;
Competitive proposals; and
Non-competitive proposals.
Please note that the following training manual text is an abbreviated summary of the procurement rules and grantees are encouraged to read Part 85.36 in its entirety (attached) as well as any applicable state or local procurement laws.
14.1.1 Small Purchase Procedures
The small purchase procedures allow recipients to acquire goods and services totaling no more than $100,000, without publishing a formal request for proposals or invitation for bids.
This method of procurement is typically used to purchase commodities such as equipment or other materials.
In the event that a grantee is purchasing materials that will exceed $100,000, they must use the sealed bid process.
The small purchases method can also be used to acquire eligible types of services, such as professional consulting, environmental review, or planning. This method cannot be used if the services contract will exceed $100,000 in value. If the services contract will exceed $100,000, the grantee must issue an RFP under the competitive proposals approach (see below).
In general, the small purchases procedures also should not be used to acquire construction contractors. It is recommended that these acquisitions occur under the sealed bid approach outlined below.
Under the small purchases method, grantees send a request for quotes to potential vendors with a detailed description of the goods or services needed. In return, they receive competitive written quotations from an adequate number of qualified sources.
Each quote should include pricing information that allows the grantee to compare costs across bidders and ensure cost reasonableness.
Documentation of the quotes shall be maintained in the grantee’s files.
The award should be made to the lowest responsive and responsible source.
RRS: Is that clear? LOWEST and RESPONSIBLE.
14.1.2 Sealed Bids (Formal Advertising)
Sealed bids (Formal Advertising) should be used for all construction contracts or for goods costing more than $100,000.
Competitive sealed bidding requires publicly solicited sealed bids and a firm-fixed-price lump sum or unit price contract is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is lowest in price.
In order for formal advertising to be feasible, the following minimum conditions must be present:
A complete, adequate and realistic specification or purchase description is available.
Basically CDBG (November 2007) 14-2
HUD, Office of Block Grant Assistance
Chapter 14: Procurement
Two or more responsible suppliers are willing and able to compete effectively for a grantee's business.
The procurement lends itself to a firm fixed-price contract, and the selection of the successful bidder can appropriately be made principally on the basis of price.
When the competitive sealed bid (formal advertising) process is used, the following requirements apply:
Publication Period: The invitation for bids must be publicly advertised and bids solicited from an adequate number of suppliers. RRS: Note, they say "suppliers", as in plural. "Competition" is not ONE manufacturer, and 4 of their vendors. What incentive would the manufacturer have to compete?
The publication should be published at least once in a newspaper of general circulation, providing sufficient time prior to bid opening. If the publication period is not of sufficient time to attract adequate competition, the bid may have to be re-advertised.
Clear Definition: The invitation for bids, including specifications and pertinent attachments, must clearly define the items or services needed in order for bidders to properly respond to the invitation.
Public Opening: All bids must be opened publicly at the time and place stated in the invitation for bids. The public is allowed at that time to review the bids.
RRS: Think about that for a minute. "The public is allowed at that time to review the bids".
Selection and Contracting: A firm-fixed-price contract award must be made by written notice to the responsible bidder whose bid, conforming to the invitation for bids, is lowest. Where specified in the bidding documents, factors such as discounts, transportation costs and life cycle costs must be considered in determining which bid is lowest.
Rejection of all Bids: All bids may be rejected when sound documented reasons exist. Such documentation shall be made a part of the files.
14.1.3 Competitive Proposals
Competitive proposals are used to purchase professional services where the total cost will exceed $100,000. Under this procurement method, the grantee must publish a written request for submissions and then review these submissions based on established selection criteria.
The grantee must solicit proposals from an adequate number of qualified sources.
To learn more about excluded parties, go to: http://www.epls.gov/
Basically CDBG (November 2007) 14-4
HUD, Office of Block Grant Assistance
-----
I provided the link earlier if you care to read additional attachments.
ALL public procurement agencies (local, state, and federal) have published laws, and ALL devote large sections specifically to "Fair Competition" on ALL publicly funded projects.
The word "Competition" is twisted, and manipulated by those who cannot accept measurable units. It's easy for an Administrator to get sucked into the vortex of a "Predatory Sales Model".
I cannot reasonably expect an Administrator to have intimate knowledge of all construction trades, and sub trades.
Friends, I know this is like watching paint dry, but the people who are stealing your tax dollars are frauds, and depend upon you to get bored, or simply quit. I've been at this for 10 years now, and am neither bored, nor have the slightest desire to "quit".
I derive ZERO pleasure when people lose their jobs, careers, families, and sometimes "Freedom". Just this one, and then we'll move on:
http://wikiroof.blogspot.com/2014/05/va-official-admits-to-64-counts-of.html
The work is tedious, time consuming, and at times, heartbreaking.
-----
NOTE: Retired 2003, do not solicit nor accept compensation or personal advancement of any kind.
You, my respected readers, depend upon me to tell only the truth.
I know that.
Reject negativity in all forms and always remember to keep looking "UP".
Respect.
Robert R. "Ron" Solomon
Public Procurement Analyst
Florida State Certified
CCC 1325620
That's why I chose them.
At any rate, this is what HUD says about procurement, and I've added a few comments to help translate the tortuous language of government. About halfway through, throw a glass of ice water in your face, and continue reading.
This guy reads a lot of my stuff;
Here we go:
-----
https://portal.hud.gov/hudportal/documents/huddoc?id=cdbgchapter14.pdf
CHAPTER 14: PROCUREMENT
CHAPTER PURPOSE & CONTENTS
This chapter provides an overview of the federal procurement requirements. It covers the basics of Part 85.
SECTION TOPIC
14.1 Overview of Procurement Requirements
When a grantee elects to hire a contractor, whether to administer a program, complete a task or do construction, those contractors must be procured competitively. This section highlights the procurement rules.
Key Topics in This Section: Procurement requirements and methods
Regulatory/Statutory Citations: 570.502, 570.610, 85.36
Other Reference Materials on This Topic: CPD Notice 96-05, Executive Order 12549
Both grantees and subrecipients must follow federal procurement rules when purchasing services, supplies, materials, or equipment. The applicable federal regulations are contained in:
State and local governments and Indian tribes – 24 CFR Part 85. A copy of Part 85 is included in the attachments to this chapter;
Nonprofits, institutions of higher education and hospitals – OMB Circular A-110, as implemented through 24 CFR Part 84.
In addition to federal regulations, most states and many local governments have laws and regulations regarding procurement. Each entity receiving CDBG funds should be aware of state and/or local laws that may affect procurement policies.
Grantees should adopt procurement policies that describe how the grantee or subrecipient will procure supplies, materials, services, and equipment. The policy should assure that all purchases are handled fairly and in a manner that encourages full and open competition. Grantees should follow the procedures established in the policy, and document how all procurements were handled.
The “essence of good procurement” can be summarized as follows:
Identify and clearly specify standards for the goods or services the grantee or subrecipient wants to obtain;
Seek competitive offers to obtain the best possible quality at the best possible price;
Use a written agreement that clearly states the responsibilities of each party;
Keep good records; and
Have a quality assurance system that helps the grantee or subrecipient get what it pays for.
RRS: This may also be accomplished with a "Performance and Payment" Bond. Very cheap insurance for the taxpayer (typically 1%), and guarantees the project will be finished properly, or the bonding company steps in, and hires someone else (at no expense to taxpayers).
Believe me, no roofing contractor on earth wants their bonding company to take over. They will forfeit all assets the bonding company required to issue the bond in the first place. BRUTAL.
Basically CDBG (November 2007) 14-1
HUD, Office of Block Grant Assistance
Chapter 14: Procurement
There are four methods of procurement that are identified in the federal regulations:
Small purchase procedures;
Sealed bids;
Competitive proposals; and
Non-competitive proposals.
Please note that the following training manual text is an abbreviated summary of the procurement rules and grantees are encouraged to read Part 85.36 in its entirety (attached) as well as any applicable state or local procurement laws.
14.1.1 Small Purchase Procedures
The small purchase procedures allow recipients to acquire goods and services totaling no more than $100,000, without publishing a formal request for proposals or invitation for bids.
This method of procurement is typically used to purchase commodities such as equipment or other materials.
In the event that a grantee is purchasing materials that will exceed $100,000, they must use the sealed bid process.
The small purchases method can also be used to acquire eligible types of services, such as professional consulting, environmental review, or planning. This method cannot be used if the services contract will exceed $100,000 in value. If the services contract will exceed $100,000, the grantee must issue an RFP under the competitive proposals approach (see below).
In general, the small purchases procedures also should not be used to acquire construction contractors. It is recommended that these acquisitions occur under the sealed bid approach outlined below.
Under the small purchases method, grantees send a request for quotes to potential vendors with a detailed description of the goods or services needed. In return, they receive competitive written quotations from an adequate number of qualified sources.
Each quote should include pricing information that allows the grantee to compare costs across bidders and ensure cost reasonableness.
Documentation of the quotes shall be maintained in the grantee’s files.
The award should be made to the lowest responsive and responsible source.
RRS: Is that clear? LOWEST and RESPONSIBLE.
14.1.2 Sealed Bids (Formal Advertising)
Sealed bids (Formal Advertising) should be used for all construction contracts or for goods costing more than $100,000.
Competitive sealed bidding requires publicly solicited sealed bids and a firm-fixed-price lump sum or unit price contract is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is lowest in price.
In order for formal advertising to be feasible, the following minimum conditions must be present:
A complete, adequate and realistic specification or purchase description is available.
Basically CDBG (November 2007) 14-2
HUD, Office of Block Grant Assistance
Chapter 14: Procurement
Two or more responsible suppliers are willing and able to compete effectively for a grantee's business.
The procurement lends itself to a firm fixed-price contract, and the selection of the successful bidder can appropriately be made principally on the basis of price.
When the competitive sealed bid (formal advertising) process is used, the following requirements apply:
Publication Period: The invitation for bids must be publicly advertised and bids solicited from an adequate number of suppliers. RRS: Note, they say "suppliers", as in plural. "Competition" is not ONE manufacturer, and 4 of their vendors. What incentive would the manufacturer have to compete?
The publication should be published at least once in a newspaper of general circulation, providing sufficient time prior to bid opening. If the publication period is not of sufficient time to attract adequate competition, the bid may have to be re-advertised.
Clear Definition: The invitation for bids, including specifications and pertinent attachments, must clearly define the items or services needed in order for bidders to properly respond to the invitation.
Public Opening: All bids must be opened publicly at the time and place stated in the invitation for bids. The public is allowed at that time to review the bids.
RRS: Think about that for a minute. "The public is allowed at that time to review the bids".
Selection and Contracting: A firm-fixed-price contract award must be made by written notice to the responsible bidder whose bid, conforming to the invitation for bids, is lowest. Where specified in the bidding documents, factors such as discounts, transportation costs and life cycle costs must be considered in determining which bid is lowest.
Rejection of all Bids: All bids may be rejected when sound documented reasons exist. Such documentation shall be made a part of the files.
14.1.3 Competitive Proposals
Competitive proposals are used to purchase professional services where the total cost will exceed $100,000. Under this procurement method, the grantee must publish a written request for submissions and then review these submissions based on established selection criteria.
The grantee must solicit proposals from an adequate number of qualified sources.
To learn more about excluded parties, go to: http://www.epls.gov/
Basically CDBG (November 2007) 14-4
HUD, Office of Block Grant Assistance
-----
I provided the link earlier if you care to read additional attachments.
ALL public procurement agencies (local, state, and federal) have published laws, and ALL devote large sections specifically to "Fair Competition" on ALL publicly funded projects.
The word "Competition" is twisted, and manipulated by those who cannot accept measurable units. It's easy for an Administrator to get sucked into the vortex of a "Predatory Sales Model".
I cannot reasonably expect an Administrator to have intimate knowledge of all construction trades, and sub trades.
*****
Friends, I know this is like watching paint dry, but the people who are stealing your tax dollars are frauds, and depend upon you to get bored, or simply quit. I've been at this for 10 years now, and am neither bored, nor have the slightest desire to "quit".
I derive ZERO pleasure when people lose their jobs, careers, families, and sometimes "Freedom". Just this one, and then we'll move on:
http://wikiroof.blogspot.com/2014/05/va-official-admits-to-64-counts-of.html
The work is tedious, time consuming, and at times, heartbreaking.
-----
NOTE: Retired 2003, do not solicit nor accept compensation or personal advancement of any kind.
I know that.
Reject negativity in all forms and always remember to keep looking "UP".
Respect.
Robert R. "Ron" Solomon
Public Procurement Analyst
Florida State Certified
CCC 1325620
