6006 - Procurement Procedures

#6006 - Procurement Procedures Policy

Administration

The Business Administrator and others who have been designated shall be the only persons authorized to obligate the district for the purchase of supplies, equipment, and services. The only other exception would be in the event of an emergency wherein loss or harm will result without immediate action.

It is the policy of Piute County School District to comply with and utilize procurement procedures required by law and set forth in Utah Code 63G unless more restrictive procedures are adopted by the Piute County School District Board of Education.

Purchasing Authority 

Those whom have been designated have been given exclusive authority by the Board and State law, unless otherwise stated, to:

1. Initiate, conduct, and/or conclude negotiations concerning the purchase of materials, equipment, supplies and services for the district.
2. Obligate the district for goods and services duly approved.
3. Those who have been designated are not authorized and will not arrange personal purchases for faculty and staff. The use of the district's name directly or by inference to obtain a reduced price for any product being purchased for private use is expressly prohibited.
4. The selection of sources and vendors is the responsibility of those whom have been designated. Local sources and state government contracts are preferred and should be suggested whenever possible.
5. All employees, officers, and designees are expected to follow all ethical provisions of the Utah Procurement Code and Utah Public Employee Ethics Act.

Purchasing Responsibilities

1. Any purchase of $10,000 or more for supplies, equipment, or services must be approved by the central district office.
2. Any purchase of $50,000 or more for supplies, equipment, or services requires prior approval of the Board of Education.
3. All purchases made by delegated agents must be made through an authorized approval process prepared by faculty and staff. All purchases of $1,000 or more must receive prior approval to determine the availability of funds and compliance to purchasing procedures.
4. Competitive prices shall be sought from all available sources whenever possible.

5. Bids/quotes for purchases shall be obtained when required. RFP’s (Request for Proposal) or IFB’s (Invitation for Bid) shall also be conducted when required. (See Purchasing Procedures - Purchasing Limits section below)

Purchasing Procedures - Employee Ethics

• Employee Ethics: The Utah Public Officers' and Employees' Ethics Act prohibits district employees from using their positions to acquire private economic interests using their position in the district.
• Employees may not use district or government contracts to make personal purchases.
• Employees may not use school or district accounts with vendors to make personal purchases.
• Employees may not use the school or district tax exempt status to make personal purchases.

67-16-9. Conflict of interests prohibited.

No public officer or public employee shall have personal investments in any business entity which will create a substantial conflict between his private interests and his public duties.

63G-6a-2303 (Effective 05/01/13). Offering a gratuity.

1. As used in this section, "interested person" means a person who is interested in any way in the sale of a procurement item, real property, or insurance to a public procurement unit.
2. Except as provided in Subsection (5), it is unlawful for an interested person to give, offer, or promise to give an emolument, gratuity, contribution, loan, or reward to:
   1. a procurement officer of the public procurement unit that is seeking to obtain the procurement item;
   2. any employee, official, or agent of the public procurement unit that is seeking to obtain the procurement item; or
   3. another person or entity on behalf of a person described in Subsection (2)(a) or (b).
3. The conduct described in Subsection (2) is unlawful, regardless of whether the emolument, gratuity, contribution, loan, or reward is given for:
   1. the person's own use; or
   2. the use or benefit of any other person.
4. A person who violates this section is guilty of:
   1. a felony of the second degree if the total value of the emolument, gratuity, contribution, loan, or reward is $1,000 or more;
   2. a felony of the third degree if the total value of the emolument, gratuity, contribution, loan, or reward is $250 or more, but less than $1,000;
   3. a class A misdemeanor if the value of the emolument, gratuity, contribution, loan, or reward is $100 or more, but less than $250; or
   4. a class B misdemeanor if the value of the emolument, gratuity, contribution, loan, or reward is less than $100.
5. A person is not guilty of a violation of this section if:
   1. the gift is an item of less than $10 in value;
   2. the total value of all gifts given by the person to a person described in Subsection (2), or another person in that person's behalf, during that calendar year does not exceed $50; and
   3. the gift is not given with the intent to induce a person to make a procurement decision in reciprocation for the gift; or 
   4. the gift is a philanthropic donation to a public procurement unit; and
   5. is not given with the intent to induce a person to make a procurement decision in reciprocation for the gift.

63G-6a-2304 (Effective 05/01/13). Accepting or requesting a gratuity.

1. As used in this section, "associate" means any of the following:
   1. the chief procurement officer;
   2. a procurement officer;
   3. a public employee;
   4. a public official; or
   5. an agent of a public procurement unit.
2. Except as provided in Subsection (4), it is unlawful for an associate of a public procurement unit that is engaged in obtaining a procurement item, real property, or insurance to ask, receive, offer to receive, accept, or ask for a promise to receive, an emolument, gratuity, contribution, loan, or reward for the associate's own use or benefit, or the use or benefit of any other person interested in the procurement item, real property, or insurance.
3. A person who violates this section is guilty of:
   1. a felony of the second degree if the total value of the emolument, gratuity, contribution, loan, or reward is $1,000 or more;
   2. a felony of the third degree if the total value of the emolument, gratuity, contribution, loan, or reward is $250 or more, but less than $1,000;
   3. a class A misdemeanor if the value of the emolument, gratuity, contribution, loan, or reward is $100 or more, but less than $250; or
   4. a class B misdemeanor if the value of the emolument, gratuity, contribution, loan, or reward is less than $100.
4. A person is not guilty of a violation of this section if:
   1.  
      1. the associate receives a gift of less than $10 in value;
      2. the total value of all gifts received by the associate from the same person during that calendar year does not exceed $50; and
      3. the associate does not make a procurement decision, or intend to make a procurement decision, in reciprocation for the gift; or
   2. the associate:
      1. receives a philanthropic donation on behalf of a public procurement unit; and
      2. does not make a procurement decision, or intend to make a procurement decision, in reciprocation for the donation.

63G-6a-408 (Effective 05/01/13). Penalties for artificially dividing a purchase.

4. (4) It is unlawful for a person to intentionally or knowingly divide a procurement into one or more smaller procurements with the intent to make a procurement:

1. qualify as a small purchase, if, before dividing the procurement, it would not have qualified as a small purchase; or
2. meet a threshold established by rule made by the applicable rulemaking authority, if, before dividing the procurement, it would not have met the threshold.

5. A division of a procurement that is prohibited under Subsection (4) includes doing any of the following with the intent or knowledge described in Subsection (4):

1. making two or more separate purchases;
2. dividing an invoice or purchase order into two or more invoices or purchase orders; or
3. making smaller purchases over a period of time.

63G-6a-2305 (Effective 05/01/13). Penalties for artificially dividing a purchase.

A person who violates Subsection 63G-6a-408(4) or (5) is guilty of:

1. a felony of the second degree if the total value of the divided procurements is $1,000,000 or more;
2. a felony of the third degree if the total value of the divided procurements is $250,000 or more, but less than $1,000,000;
3. a class A misdemeanor if the total value of the divided procurements is $100,000 or more, but less than $250,000; or (4) a class B misdemeanor if the total value of the divided procurements is less than $100,000.

76-8-103. Bribery or offering a bribe.

1. A person is guilty of bribery or offering a bribe if that person promises, offers, or agrees to give or gives, directly or indirectly, any benefit to another with the purpose or intent to influence an action, decision, opinion, recommendation, judgment, vote, nomination, or exercise of discretion of a public servant, party official, or voter.
2. It is not a defense to a prosecution under this statute that:
   1. the person sought to be influenced was not qualified to act in the desired way, whether because the person had not assumed office, lacked jurisdiction, or for any other reason;
   2. the person sought to be influenced did not act in the desired way; or
   3. the benefit is not conferred, solicited, or accepted until after:
      1. the action, decision, opinion, recommendation, judgment, vote, nomination, or exercise of discretion, has occurred; or
      2. the public servant ceases to be a public servant.
3. Bribery or offering a bribe is:
   1. a third degree felony when the value of the benefit asked for, solicited, accepted, or conferred is less than $1,000; and
   2. a second degree felony when the value of the benefit asked for, solicited, accepted, or conferred is $1,000 or more.

76-8-105. Receiving or soliciting bribes or bribery by public servants.

1. A person is guilty of receiving or soliciting a bribe if that person asks for, solicits, accepts, or receives, directly or indirectly, any benefit with the understanding or agreement that the purpose or intent is to influence an action, decision, opinion, recommendation, judgment, vote, nomination, or exercise of discretion, of a public servant, party official, or voter.
2. It is not a defense to a prosecution under this statute that:
   1. the person sought to be influenced was not qualified to act in the desired way, whether because the person had not assumed office, lacked jurisdiction, or for any other reason;
   2. the person sought to be influenced did not act in the desired way; or
   3. the benefit is not asked for, conferred, solicited, or accepted until after:
      1. the action, decision, opinion, recommendation, judgment, vote, nomination, or exercise of discretion, has occurred; or
      2. the public servant ceases to be a public servant.
3. Receiving or soliciting a bribe is:
   1. a third degree felony when the value of the benefit asked for, solicited, accepted, or conferred is $1,000 or less; and
   2. a second degree felony when the value of the benefit asked for, solicited, accepted, or conferred exceeds $1,000.

76-8-402. Misusing public money.

1. Every public officer of this state or a political subdivision, or of any county, city, town, precinct, or district of this state, and every other person charged, either by law or under contract, with the receipt, safekeeping, transfer, disbursement, or use of public money commits an offense if the officer or other charged person:
   1. appropriates the money or any portion of it to his own use or benefit or to the use or benefit of another without authority of law;
   2. loans or transfers the money or any portion of it without authority of law;
   3. fails to keep the money in his possession until disbursed or paid out by authority of law;
   4. unlawfully deposits the money or any portion in any bank or with any other person;
   5. knowingly keeps any false account or makes any false entry or erasure in any account of or relating to the money;
   6. fraudulently alters, falsifies, conceals, destroys, or obliterates any such account;
   7. willfully refuses or omits to pay over, on demand, any public money in his hands, upon the presentation of a draft, order, or warrant drawn upon such money by competent authority;
   8. willfully omits to transfer the money when the transfer is required by law; or
      1. willfully omits or refuses to pay over, to any officer or person authorized by law to receive it, any money received by him under any duty imposed by law so to pay over the same.
2. A violation of Subsection (1) is a felony of the third degree, except it is a felony of the second degree if:
   1. the value of the money exceeds $5,000;
   2. the amount of the false account exceeds $5,000;
   3. the amount falsely entered exceeds $5,000;
   4. the amount that is the difference between the original amount and the fraudulently altered amount exceeds $5,000; or
   5. the amount falsely erased, fraudulently concealed, destroyed, obliterated, or falsified in the account exceeds $5,000.
3. In addition to the penalty described in Subsection (2), a public officer who violates Subsection (1) is subject to the penalties described in Section 76-8-404.

Purchasing Procedures - Segregation of Duties.

Authorization Role—Board of Education & Administrators: The Board of Education and administrators serve as the formal authorization of transactions in the district. They oversee, ensure compliance, monitor, and authorize purchasing transactions. These individuals should not be routinely involved in the record keeping and custody of assets assignments within the district.

Record Keeping: Various secretaries and clerks throughout the district have been specifically assigned to keep records for purchasing transactions. These individuals assist in processing transactions as well. Each school/program is authorized to designate one secretary/clerk to serve in this function. These individuals are not permitted to be the authorizing authority on purchasing transactions.

Processing & Custody of Assets: Purchasing transactions usually originate with faculty and staff members. These individuals originate purchasing orders, help obtain bids/quotes, and work with administrators and secretaries to obtain the necessary information for a purchasing request. These individuals are the same individuals that eventually become responsible for the custody of the assets which they seek to purchase and are held accountable for the assets. These individuals are not permitted to be the authorizing authority on transactions nor oversee records for purchases.

Purchasing Procedures - Purchasing Limits

Purchasing Procedures - Planning to Buy

• STEP 1: Define the needs and reason for purchase
  • The first step in acquiring goods or services for your location/program is to define your needs. What need(s) are you trying to fulfill through the purchase? Why are you making the purchase? Determining the specification(s) for the purchase is the beginning of the purchasing process. Specifications may include...description, quantity, quality, color, estimated cost, training requirements, maintenance requirements, freight charges, etc.
• STEP 2: Are funds available to pay for the purchase?
  • The second step is to determine if funds are available to make the purchase.
• STEP 3: Complete Authorization to Order Form
  • The third step is to complete an authorization to order form documenting the funds available, the purpose(s) for the purchase, and the detail specifications for the purchase.
• STEP 4: Obtain bids/quotes or State Contract
  • The fourth step is to obtain the necessary bids/quotes per district policy and procedures.
• STEP 5: Obtain authorization signatures
  • The fifth step is to obtain the necessary signatures on the authorization to order form.
• STEP 6: Send order to vendor/contractor
  • The sixth step is to organize and arrange to make the purchase with the vendor selected.

Purchasing Procedures - Receiving The Order

The person signing for the delivery should verify that the piece count agrees with the amount indicated on the delivery slip before signing for the delivery. Mistakes do happen. Most of the errors and damages are caught at the time of delivery. Using the following guidelines will help catch errors early and minimize problems associated with those inadvertent errors.

1. It is the site's responsibility to verify for correctness or any concealed damage. It is very difficult to handle mistakes if the order has been distributed throughout the facility. In most cases' problems can be resolved if the order is not broken up.
2. Discrepancies such as shortages, overages, or damaged products must be reported immediately after the order has been checked. Problems that extend beyond a reasonable time period are not the responsibility of the vendor.

Purchasing Procedures - Emergency Purchases

True emergencies are infrequent but they do exist. "An emergency condition is a situation which creates a threat to public health, or safety such as may arise by reason of floods, epidemic, riots, equipment failure, or such other reason as may be determined by the chief procurement officer or designee. The existence of such conditions creates an immediate and serious need for supplies, services, or construction that cannot be met through normal procurement methods (63G-6-411). Emergency procedures may avoid bid/quote requirements but still require the appropriate authorization signatures outlined in the Purchasing Limits section.

Purchasing Procedures - Sole Source Purchases

On a case-by-case basis, the bid or quote requirement may be waived and a sole source purchase approved by the business administrator or Superintendent. A sole source procurement is a product or service that is available from only one source. However, at a minimum for purchases greater than $50,000 we will advertise sole source procurements for at least five days.

Requestors should provide administrators justifications for using sole source procurement. Justifications are to be supported by factual statements that will pass internal and state audits. The justifications must establish that the vendor is the only source available to provide the item or service required. The justifications should explain and fully describe the conditions that make the supplier a sole source and must be based upon a need for some feature or characteristic that is unique to the requested product or service that cannot be provided by any other product or service.

A purchase might be practical from only one vendor (sole source) for the following reasons;

1. There is no competitive product. The good/service is a one-of-a-kind or patented product, a copyrighted publication available from only one source, or a unique item such as a work of art.
2. The product is only available from a regulated or natural monopoly. For example, utilities.
3. The replacement of a component or a repair part is only available from the original supplier and the part is not interchangeable with similar parts available from another supplier.
4. The product or equipment is unique. There is no other product or equipment available that meets the specialized needs of the department or performs the intended function.
5. The purchase is related to a specific fundraiser approved within the fundraising policy.

The practice of specifying or requesting sole source items should be limited. With competition eliminated, purchases involving sole source are often more costly.

63G-6a-802 (Effective 05/01/13). Sole source -- Award of contract without competition -- Notice.

1.  
2. A contract may be awarded for a procurement item without competition if the procurement officer, the head of an authorized purchasing entity, or a designee of either who is senior to the procurement officer or the head of the authorized purchasing entity, determines in writing that:
   1. there is only one source for the procurement item; or
   2. the award to a specific supplier, service provider, or contractor is a condition of a donation that will fund the full cost of the supply, service, or construction item.
3. Circumstances under which there is only one source for a procurement item may include:
   1. where the most important consideration in obtaining a procurement item is the compatibility of equipment, technology, software, accessories, replacement parts, or service;
   2. where a procurement item is needed for trial use or testing;
   3. where transitional costs are unreasonable or cost prohibitive; or
   4. procurement of public utility services.
4. The applicable rulemaking authority shall make rules regarding the publication of notice for a sole source procurement that, at a minimum, require publication of notice of a sole source procurement, in accordance with Section 63G-6a-406, if the cost of the procurement exceeds $50,000.
5. An authorized purchasing entity who awards a sole source contract on behalf of a public procurement unit shall negotiate with the contractor to ensure that the terms of the contract, including price and delivery, are in the best interest of the state.
6. A public procurement unit may extend a contract for a reasonable period of time without engaging in a procurement process, if:
   1. the award of a new contract for the procurement item is delayed due to a protest or appeal;
   2. the procurement process is delayed due to unintentional error;
   3. changes in industry standards require significant changes to specifications for the procurement item;
   4. the extension is necessary to prevent the loss of federal funds;
   5. the extension is necessary to address a circumstance where the appropriation of state or federal funds has been delayed; or
   6. the extension covers the period of time during which contract negotiations with a new provider are being conducted.

Purchasing Procedures - Change Orders

Increasing the amount of an order requires adherence to all provisions in the Purchasing Limits section. Change orders with vendors must first go through a pre-approval process and be documented on a new authorization to order form.

Purchasing Procedures - Year-end Procedures

From an accounting standpoint, the fiscal year in which a purchase is charged to is determined by the date the goods/services are actually received--not the date which the payment is made. Because the date which the goods/services are received is also the date which the liability is incurred, this is the date in which the expenditure is recorded against the budget.

Administrators should plan accordingly and well in advance to ensure the appropriate timing of expenditures occurs in conjunction with budget availability.

Purchasing Procedures - Other Items

1. Delegation of Purchasing Authority: Schools and programs are delegated authority to oversee purchases up to $9,999. Purchases greater than $9,999 must be processed through the central district office. Schools and programs are given authority to designate one secretary/clerk to process purchases up to $9,999. School and program administrators must ensure all internal controls and purchasing procedures are followed for purchases up to $9,999. School and program administrators must ensure all internal controls and purchasing procedures for purchases over $9,999 are referred to the central district office for processing no matter what the source of funds for the purchase are.
2. Conflicts of Interest: Where conflicts of interest exist for purchases of $1,000 or more, these purchases must be referred and overseen by the central district office. Conflicts of interest include situations where schools/programs have employees directly related to those who have a direct private interest in the transaction.
3. Small Purchases: Any purchase less than $50,000 is considered to be a small purchase.
4. Board Approval Required: Any purchase of $50,000 or greater must receive prior-board approval before processing.
5. Minimum Order Pre-Approval Documentation Requirements: All purchases of $1,000 or more must document pre-approval from the appropriate administrator(s) with the appropriate number of authorization signatures, before the order is sent to the vendor. This is normally done using the district’s order authorization form. This may also be done using an online electronic order process but a hard copy of the order and authorizations must be on file for reference.. No order may be sent to a vendor/contractor until all pre-authorization requirements have been met.

Purchasing Procedures - Common Mistakes

• Ordering/Purchasing Without Authorization: Personnel are only permitted to make orders/purchases with vendors after they have received permission from their supervisor. If the order/purchase is $1,000 or more, the authorization from the supervisor (the supervisor’s signature) is documented on a hard copy of the actual order form used—either an authorization order form or other ordering form used with the vendor. This documentation must be retained in the district or school accounting files.
• Ordering/Purchasing Without Obtaining Bids/Quotes First: All purchases $750 or more require competitive purchasing and bids/quotes (see purchasing flowchart). This requirement is applicable for all purchases—no matter what program the purchase is for or the reasons for the purchase.
• Documentation - Bids/Quotes: All bids/quotes for a purchase must be documented and retained in district or school accounting files for future reference.

Vendor Selection - Responsive & Responsible Vendors/Contractors:

District, school, and program personnel have a fiduciary duty to taxpayers to select the vendor/contractor which is the best value when considering bids, quotes, and RFPs. The vendor/contractor selected must be both the most responsive and most responsible option. Not only is cost a consideration, but also timeliness, reliability, compliance, and other factors are used to determine the best value. “Best Value” is always defined and evaluated per the specifications determined in the planning phase of the purchasing process.

Vendors/contractors shall be selected based upon the specifications set forth in the planning stages for the purchase.

63G-6-303 (Superseded 05/01/13). Purpose of specifications. All specifications shall seek to promote overall economy and best use for the purposes intended and encourage competition in satisfying the state's needs, and shall not be unduly restrictive. The requirements of this part regarding the purposes and nonrestrictiveness of specifications shall apply to all specifications, including, but not limited to, those prepared by architects, engineers, designers, and draftsmen for public contracts.

Responsible Bidder: A bidder who has the capability in all respects to perform fully all

requirements with integrity and reliability to assure good faith performance.

Responsive Bidder: A bidder who has submitted a proposal response which conforms in all

respects to the solicitation document.

Vendor Selection - Local Vendors And State Contracts:

By law and district policy, schools and programs are required to use a competitive purchasing method for each purchase. This means schools and programs are required to shop out their purchases to receive the best possible value for each purchase. “Best Value” is defined as having a combination that provides for 1) the goods that meet minimum specifications and requirements, 2) at the right time, 3) at the right place, 4) at the lowest cost. Taxpayers expect school employees to use public funds wisely.

Using Local Vendors/Contractors. When opportunities allow for purchases that produce the “best value” using local vendors/contractors, schools and programs are encouraged to use local contractors and vendors.

State Contracts. Schools and programs should also be mindful of competitively bid state contracts available at http://purchasing.utah.gov.

Vendor Selection - Prohibited Donations As A Requirement For Vendor Selection:

67-16-5.6. Offering donation, payment, or service to government agencies in exchange for approval -- When prohibited.

1. It is an offense for any person, under circumstances not amounting to a violation of Section 76-8-103, to donate or offer to donate personal property, money, or services to any agency on the condition that the agency or any other agency approve any application or request for a permit, approval, or other authorization.
2.  
   1. (a) Subsection (1) does not apply to any donation of property, funds, or services to an agency that is:
      1. otherwise expressly required by statute, ordinance, or agency rule;
      2. mutually agreed to between the applicant and the entity issuing the permit, approval, or other authorization;
      3. a condition of a consent decree, settlement agreement, or other binding instrument entered into to resolve, in whole or in part, an actual or threatened agency enforcement action; or (iv) made without condition.
   2. The person making the donation of property, funds, or services shall include with the donation a signed written statement certifying that the donation is made without condition.
   3. The agency receiving the donation shall place the signed written statement in its files.

Documentation Requirements:

Any documentation used to process a purchase is property of the public and Piute County School District. Employees are required to retain all documentation and ensure the documentation is safeguarded and submitted to the official purchasing file for each transaction.

All items received during the purchase must be documented. This includes free items or donations being given by the vendor/contractor. No exceptions.

Contracts, Receipts, Shipping documents, Bid/quote summary forms and documentation, Approvals

Authorization to Order forms, Order documentation used with vendors & Purchase Orders

All other forms and documentation used for the purchase

Revised August 2021

Revised May 2022