Procurement Methods

5.0 PROCUREMENT METHODS

5.1 Micro Purchase Procedures. For any amounts under $10,000.00, the Agency may use micro purchase procedures. The agency shall obtain three quotes provided the quote is considered reasonable. To the greatest extent feasible,and to promote competition, micro purchases should be distributed among qualified sources. Quotations for Small Purchases (QSP), or quotes, may be submitted in writing to this e-mail address. The award shall be made to the responsive and responsible vendor that submits the lowest cost to the Agency. If the award is to be made for reasons other than the lowest price, documentation shall be provided in the contract file. The Agency shall not break down requirements aggregating more than the Micro Purchase threshold into several purchases that are less than the applicable threshold merely to: (1) permit use of the micro purchase procedures or (2) avoid any requirements that applies to purchases that exceed the Micro Purchase threshold.

5.2 Sealed Bids. Sealed bidding, also known as Invitation for Bids (IFB), shall be used for all contracts that exceed the small purchase threshold and that are not competitive proposals or non-competitive proposals, as these terms are defined in this Policy. Under sealed bids, the Agency publicly solicits bids and awards a firm fixed-price contract (lump sum or unit price) to the responsive and responsible bidder whose bid, conforming with all the material terms and conditions of the IFB, is the lowest in price. Sealed bidding is the preferred method for procuring construction, supply, and non-complex service contracts that are expected to exceed $99,999.99.

•  5.2.1 Conditions for Using Sealed Bids. The Agency shall use the sealed bid method if the following conditions are present: a complete, adequate, and realistic statement of work, specification, or purchase description is available; three or more responsible bidders are willing and able to compete effectively for the work; the contract can be awarded based on a firm fixed price; and the selection of the successful bidder can be made principally on the lowest price.  
• 5.2.2 Solicitation and Receipt of Bids. An IFB is issued which includes the specifications and all contractual terms and conditions applicable to the procurement and a statement that award will be made to the lowest responsible and responsive bidder whose bid meets the requirements of the solicitation. The IFB must state the time and place for both receiving the bids and the public bid opening. All bids received will be date and time-stamped and stored unopened in a secure place until the public bid opening. A bidder may withdraw the bid at any time prior to the bid opening. 
• 5.2.3 Bid Opening and Award. Bids shall be opened publicly. All bids received shall be recorded on an abstract (tabulation) of bids, which shall then be made available for public inspection. If equal low bids are received from responsible bidders, selection shall be made by drawing lots or other similar random method. The method for doing this shall be stated in the IFB.  
  • 5.2.3.1 Emergency Procurement: On the day of the bid opening, if less than three bids are received and it is an emergency procurement, the contracting officer and the procurement committee board member can agree to open the bids and proceed with the bid opening. If only one responsive bid is received from a responsible bidder, the award shall not be made unless the price can be determined to be reasonable, based on a cost or price analysis.
  • 5.2.3.2 Less than three bids: If the bid is not an emergency procurement, three bids will be required to open the bid packets and conduct the bid opening. If less than three bids are received, the procurement coordinator or contracting officer will hand the sealed (unopened) bids back to the representative that is present or mail the bid back if the bidder is not present.
• 5.2.4 Mistakes in Bids. Correction or withdrawal of bids may be permitted, where appropriate, before bid opening by the procurement coordinator, who was authorized by the contracting officer or the contracting officer; prior to the time set for bid opening. After bid opening, corrections in bids may be permitted only if the bidder can show by clear and convincing evidence that a mistake of a nonjudgmental character was made, the nature of the mistake, and the bid price intended. A low bidder alleging a nonjudgmental mistake may be permitted to withdraw its bid if the mistake is clear on the face of the bid document, but the intended bid is unclear, or the bidder submits convincing evidence that a mistake was made. All decisions to allow correction or withdrawal of a bid shall be supported by a written determination signed by the Contracting Officer. After bid opening, changes in bid prices or other provisions of bids prejudicial to the interest of the Agency or fair competition shall not be permitted. 

5.3 Competitive Proposals. Unlike sealed bidding, the competitive proposal method, also known as Request for Proposals (RFP), permits consideration of technical factors other than price; discussion with offerors concerning offers submitted; negotiation of contract price or estimated cost and other contract terms and conditions; revision of proposals before the final contractor selection; and the withdrawal of an offer at any time up until the point of award. Award is normally made based on the proposal that represents the best overall value to the Agency, considering price and other factors, e.g., technical expertise, experience, quality of proposed staffing, etc., set forth in the solicitation and not solely the lowest price.  

• 5.3.1 Conditions for Use. Where conditions are not appropriate for the use of sealed bidding, competitive proposals may be used. Competitive proposals are the preferred method for procuring professional services that will exceed the small purchase threshold. As detailed within Section 7.2.B of HUD Procurement Handbook 7460.8 REV 2, "Only under limited circumstances would construction services be procured by competitive proposals;" accordingly, construction services will most typically be procured utilizing the sealed bid (IFB) or small purchase procedures (QSP). 
• 5.3.2 Form of Solicitation. Other than A/E services, developer-related services and energy performance contracting, competitive proposals shall be solicited through the issuance of an RFP. The RFP shall clearly identify the importance and relative value of each of the evaluation factors as well as any subfactors and price. A mechanism for fairly and thoroughly evaluating the technical and price proposals shall be established before the solicitation is issued. Proposals shall be handled to prevent disclosure of the number of offerors, identity of the offerors, and the contents of their proposals until after award. The Agency may assign price a specific weight in the evaluation factors, or the Agency may consider price in conjunction with technical factors; in either case, the method for evaluating price shall be established in the RFP. 
• 5.3.3 Evaluation. The proposals shall be evaluated only on the factors stated in the RFP. Where not apparent from the evaluation factors, the Agency shall establish an Evaluation Plan for each RFP. All RFPs shall be evaluated by an appropriately appointed Evaluation Committee. The Evaluation Committee shall be required to disclose any potential conflicts of interest and to sign a non-Disclosure statement. An Evaluation Report, summarizing the results of the evaluation, shall be prepared by the procurement coordinator to present to the contracting officer, prior to an award of a contract.
• 5.3.4 Negotiations. Negotiations shall be conducted with all offerors who submit a proposal determined to have a reasonable chance of being selected for an award, unless it is determined that negotiations are not needed with any of the offerors. This determination is based on the relative score of the proposals as they are evaluated and rated in accordance with the technical and price factors specified in the RFP. These offerors shall be treated fairly and equally with respect to any opportunity for negotiation and revision of their proposals. No offeror shall be given any information about any other offeror's proposal, and no offeror shall be assisted in bringing its proposal up to the level of any other proposal. A common deadline shall be established for receipt of proposal revisions based on negotiations. Negotiations are exchanges (in either a competitive or sole source environment) between the Agency and offerors that are undertaken with the intent of allowing the offeror to revise its proposal. These negotiations may include bargaining. Bargaining includes persuasion, alteration of assumptions and positions, give-and-take, and may apply to price, schedule, technical requirements, type of contract or other terms of a proposed contract. When negotiations are conducted in a competitive acquisition, they take place after establishment of the competitive range and are called discussions. Discussions are tailored to each offeror's proposal and shall be conducted by the contracting officer with each offeror within the competitive range. The primary object of discussions is to maximize the Agency's ability to obtain best value, based on the requirements and the evaluation factors set forth in the solicitation. The contracting officer shall indicate to, or discuss with, each offeror still being considered for award, significant weaknesses, deficiencies, and other aspects of its proposal (such as technical approach, past performance, and terms and conditions) that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposer's potential for award. The scope and extent of discussions are a matter of the contracting officer's judgment. The contracting officer may inform an offeror that its price is considered by the Agency to be too high, or too low, and reveal the results of the analysis supporting that conclusion. It is also permissible to indicate to all offerors the cost or price that the Agency's price analysis, market research, and other reviews have identified as reasonable. "Auctioning" (revealing one offeror's price to get another offeror to lower their price) is prohibited.  
• 5.3.5 Award. After evaluation of the revised proposals, if any, the contract shall be awarded to the responsible firm whose technical approach to the project, qualifications, price and/or any other factors considered, are most advantageous to the Agency provided that the price is within the maximum total project budgeted amount established for the specific property or activity.  
• 5.3.6 A/E Services. The Agency shall contract for A/E services using Qualifications-based Selection (QBS) procedures, utilizing a Reques tor Qualifications (RFQ). Sealed bidding shall not be used for A/E solicitations. Under QBS procedures, competitors' qualifications are evaluated, and the most qualified competitor is selected, subject to negotiation for fair and reasonable compensation. Price is not used as a selection factor under this method. QBS procedures shall not be used to purchase other types of services, other than Energy Performance Contracting and Developer services, though architectural/engineering firms are potential sources.  

5.4 Noncompetitive Proposals.

• 5.4.1 Conditions for Use. Procurement by noncompetitive proposals (sole- or single-source) may be used only when the award of a contract is not feasible using small purchase procedures, sealed bids, cooperative purchasing, or competitive proposals, and if one of the following applies: 
  • 5.4.1.1 The item is available only from a sole source, based on a good faith review of available sources.
  • 5.4.1.2 Emergency Procurement: An emergency exists that seriously threatens the public health, welfare, or safety, or endangers property, or would otherwise cause severe injury to the Agency, as may arise by reason of a flood, earthquake, epidemic, riot, equipment failure, or similar event. In such cases, there must be an immediate and serious need for supplies, services, or construction such that the need cannot be met through any of the other procurement methods, and the emergency procurement shall be limited to those supplies, services, or construction necessary simply to meet the emergency. The CO or his/her delegate Deputy Executive Director (DED) reserves the right to deem what is considered an emergency and authorizes the procurement to prevent further damage to a structure, safety of tenants or employees.  
  • 5.4.1.3 HUD authorizes the use of noncompetitive proposals; or
  • 5.4.1.4 After solicitation of several sources, competition is determined inadequate.
•  5.4.2 Justification. Each procurement based on noncompetitive proposals shall be supported by a written justification for the selection of this method. The justification shall be approved in writing by the responsible Contracting Officer. Poor planning or lack of planning is not justification for emergency or sole-source procurements. The justification, to be included in the procurement file, should include the following information: 
  • 5.4.2.1 Description of the requirement. 
  • 5.4.2.2 History of prior purchases and their nature (competitive vs. noncompetitive). 
  • 5.4.2.3 The specific exception in 2 CFR §200.320(f)(1)-(4) which applies. 
  • 5.4.2.4 Statement as to the unique circumstances that require award by noncompetitive proposals. 
  • 5.4.2.5 Description of the efforts made to find competitive sources (advertisement in trade journals or local publications, phone calls to local suppliers, issuance of a written solicitation, etc.)
  •  5.4.2.6 Statement as to efforts that will be taken in the future to promote competition for the requirement.
  • 5.4.2.7 Signature by the Contracting Officer's supervisor (or someone above the level of the Contracting Officer); and
  • 5.4.2.8 Price Reasonableness. The reasonableness of the price for all procurements based on noncompetitive proposals shall be determined by performing an analysis, as described in this Policy.  
• 5.5 Cooperative Purchasing/Intergovernmental Agreements. The Agency may enter State and/or local cooperative or intergovernmental agreements to purchase or use common supplies, equipment, or services. The decision to use an interagency agreement instead of conducting a direct procurement shall be based on economy and efficiency. If used, the interagency agreement shall stipulate who is authorized to purchase on behalf of the participating parties and shall specify inspection, acceptance, termination, payment, and other relevant terms and conditions. The Agency may use Federal or State excess and surplus property instead of purchasing new equipment and property if feasible and if it will result in a reduction of project costs. The goods and services obtained under a cooperative purchasing agreement must have been procured in accordance with 2 CFR §200.317 through §200.326. When using this method to procure a product or service, a board resolution shall be required for any amount exceeding $125,000.00.