hello and welcome to the Illinois Department of Commerce and Economic Opportunity grantee training in this presentation we will be discussing procurement standards for recipients of Grant funds from the state of Illinois what is procurement procurement is the act of obtaining equipment materials or supplies grantees with the state of Illinois are required to comply with procurement standards as they purchase goods and services this can and frequently does entail a competitive bidding process which helps identify and request products and are Services based on cost-effectiveness and quality for two CFR 200.317-327 grantees must Implement a procurement policy that aligns with State Standards this policy must be written and documented and thoroughly communicated to everyone within the grantees organization it is important to note that an organization's procurement policy cannot be word of mouth as this can lead to confusion bending the rules or inconsistent processes which can lead to non-compliance the state of Illinois needs assurance that Grant funds are being used efficiently dce requires full transparency in how State funds have been used this helps reduce inefficiency or waste in the use of Grant funds proper procurement means that you're getting the right price for goods and services and that Grant funds won't be denied or clawed back for non-compliance it is also important that grantees are aware of bid stringing what is Bid stringing for the Illinois General Assembly a person commits unlawful stringing of bids when he or she with the intent to evade the bidding requirements of any unit of local government or School District knowingly strings or assists in stringing or attempts to string any contract or job order with the unit of local government or School District bid stringing is a class IV felony let's take a look at an example of bid stringing Townville adheres to a policy that says any purchase that exceeds fifty thousand dollars must follow a formal bidding process Townville needs to procure a bucket truck to trim trees on Main Street pricey Incorporated has a bucket truck for sale for one hundred fifty thousand dollars pricey Incorporated once the contract with Townville but they know about the fifty thousand dollars threshold Townville understands what the procurement policy states but wants to avoid the bidding process to do this they break down the purchase into Parts with Townville paying fifty thousand dollars for the truck's engine another fifty thousand dollars for the bucket and an additional fifty thousand dollars for the shell of the truck why does this matter grantees and vendors cannot circumvent the procurement process in this case the rule was deliberately broken remember bid stringing is a class IV felony there are five different procurement types each with its own set of requirements micro purchase small purchase sealed bids proposals and non-competitive micro purchases are purchases made below the micro purchase threshold established by the federal acquisition regulations or far which is currently set at ten thousand dollars these purchases are allowable as long as they are considered reasonable reasonable may be up for interpretation within their own procurement policy organizations should have their own definition for what they consider reasonable for example Joel needs batteries specific typically Joel needs a 12 pack of Double A's based on Joel's experience he knows he shouldn't have to pay more than 18 for Batteries when out running errands Joel stops in the hardware store and sees a 12-pack of Double A's for 14.99 Joel is comfortable with his price so he makes the purchase this is why it is important for grantees to specifically document their own clear definition of reasonable grantees should feel encouraged and empowered to shop around and compare prices for goods and services under the ten thousand dollars threshold the micro purchase threshold of ten thousand dollars can be increased to up to fifty thousand dollars at the discretion of dceo increased thresholds require that grantees meet and document all the necessary requirements small purchases are also considered an informal procurement method here purchases are more than the micro purchase threshold but beneath the simplified acquisition threshold currently established by far at two hundred fifty thousand dollars grantees can choose a lower threshold in their procurement policy for small purchases but it cannot exceed the simplified acquisition threshold here is where grantees are required to shop around for different sources of goods or services that they wish to procure for example Danny is in the market for a very specific automobile Danny wants a specific make year and model he begins the process of shopping around his area and contacts three different dealerships via email for quotes Danny emails local dealerships a b and c for quotes and availability the exact same car is available in all three locations Danny finds that dealership a has the fairest price so he buys the car from them in this scenario Danny retains each quote received via email for audit purposes and for his records for small purchases grantees must have an adequate number of responses from the business sourcing their needs also referred to as vendors it is up to the grantee to determine what they consider adequate again this definition needs to be part of the organization's procurement policy and ensure that everyone within that organization understands dceo strongly suggests that grantees have at least three vendors to choose from to get the best price sealed bids are a formal procurement method sealed bids are purchases that exceed the simplified acquisition threshold which is currently set at 250 000 by far or the grantees established simplified acquisition threshold which must be lower than 250 000 this amount is also subject to change over time it is up to the grantee to determine if their threshold needs to be lower than the threshold established by far due to risk and this should be documented in the organization's own written procurement policy sealed bids are typical of larger programs such as capital projects sealed bids require the procedures for the solicitation are documented prior to the solicitation occurring grantees must post a public solicitation specifying what they would like to procure the due date for the submission of the bids and the date and location of when bids will be opened bidders must be given adequate time to submit sealed bids all sealed bids must be opened at the same time and place outlined in the invitation to bid there should be no less than two vendors who submit a bid if grantee doesn't receive at least two bidders they should notify their Grant manager of the situation to determine how to proceed bids are reviewed and scored based on the most practical and cost-effective price the lowest bidder should be capable of performing at a level is that of the highest bidder all documentation of the solicitation procedures advertising invitation to bid bids received and costs analysis must be maintained proposals are also a formal procurement method proposal procurement methods are to be used if the purchase is over the simplified acquisition threshold currently established by far at 250 000 or less if the grantee has established a lower threshold you may be wondering what makes proposals different from sealed bids sealed bids are more focused on cost whereas proposals are needed if the grantee can't specify exactly what they need or need to assess vendors based on additional criteria area other than cost here the lowest bidder may not be the automatic winner of the contract instead grantees perform a thorough review of the quality of the proposal and capability of the vendor to ensure efficient use of funds think quality over price proposals require that information on procedures for conducting technical evaluations of proposals and how selection will be made be established prior to the solicitation occurring grantees must post a public solicitation specifying all evaluation factors and their relative importance and the due date for the submission of the proposal bidders should be given adequate time to submit proposals there should be no less than two bidders who submit proposals if grantee doesn't receive at least two proposals they should notify their Grant manager of the situation and inquire how to proceed all documentation of the method for conducting technical evaluations of the proposals received in making selections advertising requests for proposals proposals received and scoring and selection of proposals based on the method for conducting technical evaluations previously identified non-competitive purchases are not typical in these cases the item may be under the micro purchase threshold or only available from a single source for instance a specific product that only one vendor can reasonably provide for example imagine a grantee has a very specific piece of equipment that is vital to their operation that piece of equipment breaks and the replacement part is available from only one vendor or it can be an emergency or in the event you only get a single bidder on a public solicitation in all these cases grantees should contact their Grant manager to determine how to proceed both the notice of funding opportunity in the grant agreement state that the state of Illinois procurement standards must be followed always remember the bigger the purchase the more formal the procurement policy will likely be do not string purchases in order to stay under thresholds this will be reviewed remember to document everything keep your policies public solicitations bids receipts invoices and all other relevant documents remember to keep notes and track everything you'll be glad you did as they may be requested for review to learn more about the thresholds established by federal acquisition regulations visit acquisition.gov you can also check out more dceo Grant Training videos by visiting our grantee resources page you may enter the bitly link below into your web browser or scan the QR code with your phone thank you for watching this presentation on dceo's procurement standards if you have any questions please reach out to ceo.grant help at illinois.gov