Source: http://spo.hawaii.gov/procurement-wizard/manual/develop-procurement-strategy-plan/
Timestamp: 2019-04-18 16:21:27+00:00

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The Procurement Team should meet to develop a procurement strategy. The procurement strategy meeting is an important step in the planning process as it gives the team an opportunity to brainstorm and discuss the market research, once gathered. From this discussion, the Procurement Team will make decisions that drive the effective execution and management of the procurement through the remainder of the procurement lifecycle.
Key elements of the Procurement Strategy Plan are described in this section. Some elements of the plan will be informed and refined as a result of the Market Research phase of the Procurement Lifecycle. The Procurement Officer should document the outcomes from the meeting in the Procurement Strategy Plan and provide the document to the Procurement Team for review.
A purchasing need must be fully understood in order to properly define the scope of the procurement. By defining the features and functions of the desired good, service, or construction, the agency begins to establish the scope of the procurement. The agency Procurement Officer must work to identify the scope by consulting with identified stakeholders as well as reviewing the state agency’s historical purchases or usage of the identified goods, services or construction. Without a clear scope, the agency will have difficulty in developing the detailed functional specifications for the requirement. After contract award, the agency project manager will be responsible to manage the defined requirement to the defined scope thus preventing an increase in contract scope or quantities, or the addition of functions or features not originally contemplated, or proposed.
The Procurement Officer must facilitate an open dialogue with the procurement stakeholders to define the critical business requirements. Critical business requirements are those essential functions that must be met by the provided goods, services, or construction. The Procurement Officer must encourage discussion and ask sufficient and pertinent questions to ensure the Procurement Team fully understands the critical business requirements.
Why are the goods/services needed?
Who/what area is impacted by this procurement?
What are the key functions the needed goods/services/construction must meet?
What factors will impact this purchase?
What is the estimated/approved budget?
When are the goods/services/construction needed?
Where will goods be delivered and/or services/construction performed?
How must services be provided?
What key approvals are necessary and who must provide this approval?
What specific quality or quantity needs must be considered?
Identifying the critical business requirements will improve the Procurement Officer’s results in conducting market analysis.
The choice of procurement method is a critical decision in purchasing goods, services, or construction. In some cases the purchasing agency may be able to utilize an existing price list or vendor list contract to meet their need. In other situations the purchasing agency may be required to consider their requirement and determine which method of procurement method best fits their need.
As stated above, prior to engaging in any procurement activities agency staff must be trained in the applicable procurement method and receive delegation to procure. The following narrative can help an agency Procurement Officer and the Procurement Team select the most appropriate procurement method that meets the agency’s needs. Each method of procurement is briefly described in sections 2.4.3.2 through 2.4.3.12. This section will discuss the elements that should be considered when selecting the method of procurement only. Actual procedures to conduct each method of procurement will be discussed in depth in Section 4.
Prior to engaging in a stand-alone procurement, agencies may want to check the existing price and vendor list contracts procured by the SPO. The SPO state-wide price list and vendor list contracts provide benefits to agencies by obtaining price discounts and other leveraged concessions through volume purchases. In addition, agency administrative, procurement, and contract management burdens are avoided. Rather than having to solicit individual contracts, resulting in multiple contracts for the same commodity or service, these processes are managed by the SPO, providing benefit to all agencies.
A price list contract is comprised of a group of common items or services competitively bid to set the prices contractually for a specified time period. A vendor awarded a price list contract is obligated to provide the specified goods or services, at the contracted price and terms, to all purchasing agencies committed to the contract.
A vendor list contract is comprised of qualified vendors that were competitively solicited to provide specified goods and/or services (i.e. NASPO ValuePoint Copiers, Printers & Related Devices, NASPO ValuePoint Computer Equipment and Services, etc.) for a specified period and usually at discounted rates from a vendor’s established catalog or product lists.
The decision to use an existing price/vendor list contract or to solicit pricing from other sources is at the discretion of the agency, unless mandatory. It is recommended that agencies utilize the price and vendor lists where possible because these contracts are the most efficient means of acquiring their procurement need. However, if an agency chooses to procure needed goods and services outside of the price and vendor list contracts available, it is subject to all requirements necessary to execute that procurement in accordance with the procurement method selected.
Personnel purchasing from a price/vendor list contract must take SPO Workshop SPO 190.
A searchable list of the available contracts, including instructions on how to place orders utilizing the contract, is available on the SPO website on the Price and Vendor List Contracts page.
Any other goods or services which the policy board determines by rules or the CPO determines in writing is available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State.
HRS §103D-102(b)(4)(L) notes the ability of the Procurement Policy Board to identify goods and services, determined to be exempt from HRS 103D competitive requirements, because while such goods and services may be available from multiple sources, their procurement by competitive means would be either not practicable or not advantageous to the State. HAR §3-120-4, Exhibit A provides a list of these goods and services that the Procurement Policy Board has identified as exempt by rule. Exemption for construction services is not allowable under HRS §103D-102(b)(4)(L).
This list is reviewed annually by the Procurement Policy Board, and requests to add or remove items from the list can be submitted to the Board by an agency’s CPO. An agency executing a procurement under this exemption authority must cite the specific authority and the exemption number from statute or Exhibit A on the contract, Purchase Order or pCard.
Agencies may also request prior CPO approval for exemption under HRS §103D-102(b)(4)(L) for requirements that may be available from multiple sources but procurement by competitive means would be impracticable or not advantageous to the State. Exemption requests for CPO approval must be submitted via the SPO Form SPO-007.
Pursuant to HRS §103D-306(c) and HAR §3-122-81, Procurements Approved for Sole Source, the Procurement Policy Board has approved the following list of sole source procurements that may be procured without obtaining a sole source approval, pursuant to section 3-122-82.
Rental of booth space for exhibits at conventions and trade shows when organized by a single sponsor. Criteria: When rental is available only through a single organizer or sponsor of the convention or trade show.
For the repair, replacement, installation (connection, activation or hookup), or relocation of public utility company equipment or facilities. Criteria: When the equipment or facilities are owned or controlled by utility companies such as an electric, telephone, gas, or cable television company.
Annual license renewal and maintenance for computer software. Criteria: When the license renewal and maintenance can be obtained from only a single source, normally the developer of the software.
Procurement of computer software conversions, modifications, and maintenance for existing programs from the manufacturer of the software. Criteria: When the conversion, modification, or maintenance can only be obtained from the manufacturer of the software.
Transcripts of court proceedings. Criteria: When the transcripts of court proceedings are only available from the respective assigned court reporter provided by the Judiciary.
Repair and maintenance services and supplies from the original equipment manufacturer or its designated representative; when the manufacturer or its designated representative is required to provide the services and supplies to retain the manufacturer’s warranty or guarantee. Criteria: When the services or supplies can only be obtained from the manufacturer or its designated representative to retain the manufacturer’s warranty or guarantee.
Procurement of equipment upgrades from the original manufacturer to existing equipment and information technology hardware, when the upgrades can only be obtained from the manufacturer. Criteria: When the upgrades are available only from the manufacturer.
The list is reviewed by the Procurement Policy Board biennially. When agencies conduct a purchase pursuant to this section they shall cite on the purchase order or on the contract the sole source authority as “Approved for Sole Source Procurement pursuant to Section 3-122-81, (cite sole source number from attached list), Hawaii Administrative Rules”.
Agencies may also request prior CPO approval for sole source requirements as described in 2.4.3.8.
The small purchases method of procurement was established to streamline the procurement process for purchases under certain dollar thresholds as discussed below. This method of procurement offers flexibility since less formal procedures are required. The small purchase method of procurement should be used in all purchases of goods, services and construction that fall under the dollar thresholds discussed below. In accordance with HRS §103D-305 and HRS §103F-405, Executive Branch agencies may make small purchases of less than $25,000 for health and human services, $100,000 for goods or services, and $250,000 for construction.
Discussions with bidders is not necessary to select the winning bid.
For a detailed description of the processes related to completing the Competitive Sealed Bid method of procurement, refer to Section 4.3.
In order to determine the most advantageous offering to the State, a comparative evaluation wherein the allocation of point values between price, and other non-price factors such as quality, schedule and contractual considerations may be required and set for in the RFP.
For a detailed description of the processes related to completing the Competitive Sealed Proposal method of procurement, refer to Section 4.4.
Any other practice defined as professional by the laws of this State or the professional and scientific occupation series contained in the United States Office of Personnel Management’s Qualifications Standards Handbook.
Architectural and engineering services furnished by licensees under HRS Chapter 464 shall be procured by this method.(3)Only if the emergency requirements of HRS §103D-307 are met, professional ...continue Other professional services may be procured in accordance with this process but may also be procured using other available methods of procurement. For a detailed description of the Professional Services procurement method, refer to Section 4.5.
Public utility repair or construction that can only be provided by the utility company.
Loss of funding: a potential loss of funds at the end of a fiscal year.
Procurement Teams should perform extensive market research, as discussed in Section 3, prior to determining to utilize a sole source procurement method. Sole sources are extremely unusual and are rarely approved by the CPO. If, after conducting market research, the team determines there is only one source for the goods, services, or construction required, then procedures set forth in Section 4 should be followed.
For any goods, services or construction not contained on the list of Procurements Approved for Sole Source set forth in HAR 3-122, Executive Branch departments are required to seek CPO approval by completing Form SPO-001, Notice and Request for Sole Source Procurement, providing justification for the sole source. The form must be signed by the HOPA and approved by the CPO prior to issuing a contract, P.O. or pCard payment.
Upon receipt of Form SPO-001, the CPO will post the form to SPO’s notices website for seven (7) days to allow vendors the opportunity to review and submit any inquiries or objections to the Request for Sole Source. If in that time no objections are received, the CPO will review the justification for the Sole Source and, if approved, return it to the agency to execute the contract. If objections are received, the CPO will place the request on hold, review the objection, and provide a written determination to the person submitting the objection and/or the requesting agency.
The CPO makes the final determination regarding the approval or disapproval of a request. If the CPO disapproves a request, the purchasing agency shall use an appropriate method of procurement to obtain the requirement.
Sole source procurements are limited to a maximum performance period of one (1) year. In accordance with HAR §3-122-123, the Procurement Officer agency is required to obtain certified cost or pricing data for sole source procurements exceeding $100,000. Reference Section 3.5 for instructions on requesting and evaluating cost and pricing data.
HRS §103D-307, states that in the case of an emergency, an agency is given latitude to meet the purchasing needs generated by the emergency situation without having to utilize the normal competitive procurement requirements. Although an agency is not required to utilize a competitive procurement method, it is recommended that the agency seek as much competition as possible considering the emergency circumstances.
A situation of an unusual or compelling urgency creates a threat to life, public health, welfare, or safety by reason of major natural disaster, epidemic, riot, fire, or such other reason as may be determined by the head of that purchasing agency.
The emergency condition generates an immediate and serious need for goods, services, or construction that cannot be met through normal procurement methods and the government would be seriously injured if the purchasing agency is not permitted to employ the means it proposes to use to obtain the goods, services, or construction.
Without the needed good, service, or construction, the continued functioning of government, the preservation or protection of irreplaceable property, or the health and safety of any person will be seriously threatened.
An emergency procurement may only be used to address the immediate needs brought about by the emergency condition, and may not be used for subsequent non-emergency related procurement needs. Lack of planning or the potential loss of funds at the end of a fiscal year does not constitute an emergency condition.
Prior to the procurement, or if time does not permit, as soon as practicable thereafter, the HOPA responsible shall complete and submit Form SPO-002, Emergency Procurement, providing justification for the Emergency Procurement and requesting CPO approval.
It is recommended that the affected agency to inform the SPO of the emergency situation as soon as is practicable to ensure the greatest level of coordination and support necessary to address the procurement needs brought about by the emergency condition.
HRS §103F-402 is specifically used for the purchase of services from health and human services providers. It is a formal, value-based procurement process and is the most frequently used procurement method for purchasing health and human services.
For a detailed description of the processes related to completing the Competitive Purchase of Services method of procurement, refer to Section 4.6.
Only one provider satisfies limitations imposed by the funding source.
Failure to plan: a purchasing agency’s failure to plan ahead sufficiently in order to issue a request for proposals.
In order to procure using the Restrictive Purchase of Services method, the agency shall complete Form SPOH-500, Notice of and Request for Restrictive Purchase of Service, providing justification for the restrictive purchase. The form must be signed by the HOPA and submitted to the CPO for approval prior to completing the procurement.
Upon receipt of Form SPOH-500, the CPO will post the request to SPO website for a minimum of seven (7) days to allow providers the opportunity to review and submit any inquiries or Notice of Protest. If in that time no protests are received, the CPO will review and take action on the request. If approved, agencies shall not award a contract until two (2) days after the protest submittal deadline.
If a protest is received, the CPO will place the request on hold, until the protest is settled or resolved. The protest shall be handled in accordance with processes detailed in HAR 3-148. Protest is also covered in Section 4.8.2.2. Based on the outcome of the protest, the CPO makes the final determination regarding the approval or disapproval of a request.
If the CPO disapproves a request, the purchasing agency shall choose an appropriate method of procurement.
where the need cannot be met through services available from the departments of health or human services, or under other available procurement methods available in HRS 103F.
The crisis method of procurement may only be used to meet current needs generated by the crisis and cannot exceed six months or, with CPO approval, for twelve months.
Prior to the procurement or, if time does not permit, as soon as practicable thereafter, the HOPA responsible shall complete and submit Form SPOH-600, Request for Crisis Purchase of Service, providing justification for the Crisis Purchase and requesting CPO approval.
It is recommended that the affected agency contact SPO to inform them of the crisis situation as soon as is practicable to ensure the greatest level of coordination and support necessary to address the procurement needs brought about by the crisis.
Upon request of the CPO, any state or county agency may participate in, sponsor, conduct, or administer a cooperative agreement for goods and services with any other state or county agency in accordance with HRS §103D-801 and HAR 3-128. The purchases shall be made on the same terms and conditions, and under the same rules and regulations as per the agreement entered into between the participants. At this stage in the procurement process, if there is a multi-agency or state-wide need for this requirement the agency should consider entering into a cooperative purchase agreement to leverage economies of scale and to increase competition and savings.
Procurement by cooperative purchasing agreements shall be conducted in compliance with the requirements of HRS 103D, unless the procurement is initiated by an external to Hawaii procurement entity. If the purchasing agency is going to work with an external purchasing unit, it must comply with public notice requirements for the procurement method, and must ensure that the external public entity does as well, listing the purchasing agency as a participating entity.
Failure of a procurement unit that is procuring the good or service from a cooperative agreement contract to secure performance from the contractor pursuant to its terms and conditions, may not necessarily preclude the remaining procurement units from obtaining goods and services from the cooperative agreement contract.
Purchasing entities should note that they are not able to enter into an existing cooperative purchasing agreement, known as piggybacking, including contracts issued by the federal government or other state or local government without prior public notice of an intent to participate.
1. ⇧ For executive CPO jurisdiction, health and human services provided to the public as defined in HRS Chapter 103F shall be procured pursuant to HRS 103F, Professional services may not be used.
2. ⇧ For executive CPO jurisdiction, health and human services provided to the public as defined in HRS Chapter 103F shall be procured pursuant to HRS 103F. Professional services may not be used.
3. ⇧ Only if the emergency requirements of HRS §103D-307 are met, professional design services may also be procured utilizing the emergency procurement method.
4. ⇧ In accordance with HRS §103D-312 and HAR §3-122-123 sole source awards over $100,000 require the offeror to submit certified cost and pricing data.

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