PURCHASING
This chapter reviews the purchasing of the Rockwall Independent School District (RISD) in the following sections:
Effective purchasing processes ensure that a district purchases high-quality supplies, equipment and services at the best price, in the right quantity, from the right source and to comply with local and state purchasing guidelines, without sacrificing quality and timeliness.
Effective contract management allows a school district to verify delivery of the terms specified in a contract and ensure that the goods or services provided meet the appropriate quality and cost standards. It also involves building a good working relationship between the district and the contractor. The district must continue managing contracts throughout their term, as well as anticipate future needs and reactions to situations that arise.
BACKGROUND
The Texas Education Code (TEC) provides several methods for procuring goods and services that meet the competitive bidding thresholds (Exhibit 7-1). Generally, when districts purchase items valued at $25,000 or more, or multiple like items with a cumulative value of $25,000 or more in a 12-month period, they must follow one of the competitive procurement methods.
Exhibit 7-1 Source: Texas Education Code (TEC) and Texas Education Agency (TEA), Financial Accountability System Resource Guide (FASRG), Update 10.0, January 2003.
TEC Competitive Procurement Methods
Purchasing Method Description Competitive Bidding Requires bids to be evaluated and awarded based solely upon bid specifications, terms and conditions contained in the request for bids, according to the bid prices offered by suppliers and pertinent factors affecting contract performance. Forbids negotiation of prices of goods and services after proposal opening. Competitive Sealed Proposals Requires the same terms and conditions as competitive bidding, but allows changes in the nature of a proposal and prices after proposal opening. Request for Proposals Generates competitive sealed proposals and involves several key elements, including newspaper advertisement, notice to proposers, standard terms and conditions, special terms and conditions, a scope-of-work statement, an acknowledgment form/response sheet, a felony conviction notice and a contract clause. Catalog Purchase Provides an alternative to other procurement methods for the acquisition of computer equipment, software and services only. Inter-local Contract Provides a mechanism for agreements with other local governments, the state or a state agency to perform governmental functions and services. Design/Build Contract Outlines a method of project delivery in which the school district contracts with a single entity to both design and construct a project. Job Order Contract Provides for the use of a particular type of contract for jobs for minor repairs and alterations; typically used for jobs involving manual labor. Reverse Auctions Outlines a bidding process that involves submission of bids by multiple suppliers, unknown to each other, in a manner that allows the suppliers to bid against each other. Construction Management Contract Outlines the use of a contract to construct, rehabilitate, alter or repair facilities using a professional construction manager. Before school districts accept bids for purchases, the TEC requires school districts to advertise bids valued at more than $25,000 at least once a week for two weeks in any newspaper published in the county in which the district is located. For purchases between $10,000 and $25,000, districts must advertise in two successive issues of any newspaper in the district's county. State law requires advertisements to specify the anticipated purchasing categories and to solicit vendors interested in supplying those categories.
Exceptions to competitive bidding requirements include contracts for professional services. Chapter 2254 of the Texas Government Code prohibits competitive bidding for professional services such as engineering, architectural and accounting. A two-step procedure is required for the procurement of architectural and engineering services. State law also allows a district to purchase items that are available from only one source, called sole-source purchases under specific circumstances.
Exhibit 7-2 presents RISD's purchasing thresholds and requirements, which follow TEC requirements.
Exhibit 7-2 Source: RISD purchasing manual.
RISD Purchasing Thresholds and Requirements
November 2002
Dollar Amount Purchase Requirements Greater than $25,000, except for produce and fuel Competitive bidding, sealed proposals, request for proposals, catalogue purchase, interlocal contract, design/build contract, contract to construct using a construction manager or job order contract Between $10,000 and $25,000 Written or telephone quotations from a minimum of three vendors In 1999, the Office of the Attorney General issued Opinion JC-37 stating school district procurement through an interlocal agreement or a cooperative purchasing arrangement satisfies competitive bidding requirements. Texas law also allows school districts to participate in catalog purchasing programs from the Texas Building and Procurement Commission (TBPC) and Qualified Information Systems Vendors (QISV). Exhibit 7-3 shows the cooperative purchasing programs in which RISD participates.
Exhibit 7-3 Source: RISD, director of Purchasing.
RISD Cooperative Purchasing Programs
2001-02
Cooperative Program Location Fee Items Purchased Qualified Information Systems Vendors (QISV) Texas Included in TBPC Computers, computer software, parts and services Texas Building and Procurement Commission (TBPC) Texas $210 Oven for food service Texas Cooperative Purchasing Network (TCPN) Region 4 Education Service Center $0 Office and maintenance supplies Multi-Regional Child Nutrition Cooperative Purchasing Program Region 10 Education Service Center $1,787 Commodity processing, full-line grocery
purchasing, milk and dairy products, bread and bakery products, snack cakes, ice cream, small waresBuy Board Texas Association of School Boards $640 Ground maintenance equipment, electricity Houston-Galveston Area Council Texas/Houston Per Purchase Order School buses An effective purchasing system starts with an organization staffed with well-trained people. Roles and related responsibilities must be clearly defined and adapted to meet the unique operating environment of the system. Exhibit 7-4 shows the organizational structure of the RISD Purchasing Division.
Exhibit 7-4 Source: RISD director of Purchasing.
RISD Purchasing and Warehouse Division
Organization
2002-03The director of Purchasing reports to the RISD chief financial officer (CFO), who is responsible for the management of all district purchasing. The director of Purchasing directs and manages the purchasing activities of the district, develops and implements purchasing procedures for processing bids and purchase orders and ensures compliance with applicable state laws and regulations. Other duties include coordinating the distribution of supplies and equipment from the central warehouse and fixed assets.
The purchasing assistant ensures prompt and accurate processing of all purchase requisitions for the district, maintains the department's files and assists with fixed assets. RISD issued 6,340 purchase orders during 2001-02.
