Procedure: _____

MUSKEGON HEIGHTS PUBLIC SCHOOLS

SUBJECT: CONTRACTING, PROCUREMENT, SUSPENSION AND DEBARMENT, & CONFLICT OF INTEREST PROCEDURES

Effective:______

Approved by:______

TABLE OF CONTENTS

SECTIONPAGE

1.01District Policy

1.01.01District Policy – General………………………………………………….1

1.01.02MHPS Board Policy 6320 - Purchasing……………………………… ….1

1.01.03Contract Cost and Price Analysis………………………………………….4

1.01.03.01Best Available Price……………………………………………………….5

1.01.04Competition………………………………………………………………..65

1.02Requisitions

1.02.01Preparation………………………………………………………………..76

1.02.02Service Contracts…………………………………………………………87

1.02.03Delegation of Authority/Approval Requirements………………………..98

1.02.04Requisition Distribution………………………………………………….109

1.02.05Contract Provisions Summary – Federal Programs………………………121

1.02.06Conflicts of Interest………………………………………………………143

1.02.06.01Board Policy 1130 – Conflict of Interest………………………………...143

1.02.06.02Conflict of Interest Procedures…………………………………………..154

1.03Competitive Procurements

1.03.01Board Policy - General……………………………………………………187

1.03.02MHPS Board Policy 6321 – New School Construction, Renovation……………………………………………………………….. 187

1.04Penalties for Non-Compliance & Training

1.04.01Penalties for Non-Compliance Procedure………………………………..2019

1.04.02Training…………………………………………………………………..2019

Attachments to Procedure:Conflict of Interest Disclosure Form

LiveScan Fingerprint Request Form

MHPS District Application (to be added)

MHPS Telephone Reference Checklist (to be added)

MHPS Vendor Release Form (to be added)

MHPS Excluded Party Spreadsheet (to be added)

Supply or Equipment Requisition

Title I Request for Funds Form

District References:Muskegon Heights Public Schools Administrative Staff Development Corrective Discipline Manual

Muskegon Heights Public Schools Allowable Use of Funds Procedure

Legal References:2 CFR Part 225 (OMB Circular A-87), 34 CFR Part 80.36

1.01DISTRICT POLICY

1.01.01District Policy – General

This procedure manual has been designed to provide guidelines for procuring the items and services necessary to support the district’s operational functions. This manual will assist all district personnel in the contracting and procurementprocess. When district funds, whether local, state, or federal, will be used for goods and services, this procedure manual must be followed. Although competitive bidding may not be required in all instances, this manual will assist district employees in establishing whether or not special procurement rules apply. It is also the intent of this document to provide guidelines for selecting the most qualified service providers at fair market values.

All district policies, including contracting and procurement policies, are available and accessible at the Muskegon Heights Public Schools Board (MHPS) AdministrationBuilding, as, as well as online at

The standard document utilized for district purchases is the Supply or Equipment Requisition (see attached formsattachments). These forms are available at the MHPS administration building, as well as all buildings in the MHPS district. If a blank form is not available, please contact the MHPS purchasing department at ext. 3204. The actual purchasing process will be explained in greater detail in subsections of this document.

Although the actual procurement responsibilities are that of the MHPS business office, the procurement process cannot begin until a duly authorized requisition has been received by the MHPS purchasing department. In certain circumstances, the MHPS business office may initiate the solicitation phase of the procurement process if the contract or purchase is above the dollar value threshold dictated by MHPS Board Policy. Please refer to board policy 6320 – Purchasing for guidelines pertaining to the competitive bidding process. In any case, no purchase order or contract will be issued until the authorized requisition is received. In addition, it is improper for any department or employee to incur obligations on behalf of the district for the procurement of items or services without submitting a requisition and obtaining a purchase order or contract.

1.01.02MHPS Board Policy 6320 – Purchasing

Each year the State of Michigan informs the School of the legal amount for purchases which require a formal bidding process of a single item. Please refer to for information regarding this threshold.

It is the policy of the Board that the Superintendent::

A. / Seek informal price quotations on purchases in excess of $1,000.00.
B. / When the purchase of, and contract for, single items of supplies, materials, or equipment is less than the amount allowed by State statute, but exceeds $10,000.00 the Superintendent shall whenever possible, require three (3) writtenquotations. All quotes will be retained and attached to the purchase order for future reference.

Purchases in a single transaction that are in excess of the dollar amount permitted by State statute shall require competitive bids and, whenever possible, have at least three (3) written bids for substantiation of purchase and shall require approval of the Board prior to purchase. Bids will be attached to the successful bidders purchase order for future reference. In instances when there is a sole supplier of materials, MHPS will attach to the purchase order documentation that supports the single vendor circumstance.

Competitive bids are not required for items purchased through the cooperative bulk purchasing program operated by the Michigan Department of Management and Budget pursuant to M.C.L.A.18.1263.

Competitive bids are not required for food purchases, unless food purchased in a single transaction costs $100,000 or more.

Bids that are sealed will remain in this state until opened by the Superintendent in the presence of at least one (1) witness. All orders or contracts should be awarded to the lowest responsible bidder; however, consideration can be given to:

A. / the quality of the item(s) to be supplied;
B. / its conformity with specifications;
C. / suitability to the requirements of the school;
D. / delivery terms;
E. / past performance of vendor.

In addition to the factors above, the Board may consider and provide a preference to bidders:

A. / which use a Michigan-based business as the primary contractor.
B. / which use one (1) or more Michigan-based business as subcontractors.

For purposes of this preference a Michigan-based business means a business that would qualify for a Michigan preference for procurement contracts under M.C.L.A. 18.1268, which requires that the businesses certify that since inception or during the last twelve(12) months it has done one of the following:

A. / have filed a Michigan business tax return showing an allocation of income tax base to Michigan
B. / have filed a Michigan income tax return showing income generated in or attributed to Michigan
C. / withheld Michigan income tax from compensation paid to the bidder's owners and remitted the tax to the Michigan Department of Treasury

This geographical preference shall not apply to any procurement or project using Federal funds, because it would violate Federal regulations.

The Board shall be informed of the terms and conditions of all competitive bids and shall award contracts as a consequence of such bids.The Board reserves the right to reject any and all bids.

Contracts for any single item or group of identical items costing less than the amount allowed by school codesmay be awarded by the Superintendent without Board approval. All other contracts require Board approval prior to purchase.

The Board should be advised, for prior approval, of all purchases of equipment, materials, and services when the purchase exceeds the total budget function by ten percent(10%).

The Superintendent is authorized to make emergency purchases, without prior approval, of those goods and/or services needed to keep the school in operation. Such purchases shall be brought to the Board’s attention at the next regular meeting.

In order to promote efficiency and economy in the operation of the school, the Board requires that the Superintendent periodically estimate requirements for standard items or classes of items and make quantity purchases on a bid basis to procure the lowest cost consistent with good quality.

Whenever storage facilities or other conditions make it impractical to receive total delivery at any one time, the total quantity to be shipped but with staggered delivery dates, shall be made a part of the bid specifications.

Before placing a purchase order, the Superintendent shall check as to whether the proposed purchase is subject to bid, whether sufficient funds exist in the budget, and whether the material might be available elsewhere in the school.

All purchase orders shall be numbered consecutively.

In the interests of economy, fairness, and efficiency in its business dealings, the Board requires that:

A. / opportunity be provided to as many responsible suppliers as possible to do business with the school;
B. / a prompt and courteous reception, insofar as conditions permit, be given to all who call on legitimate business matters;
C. / where the requisitioner has recommended a supplier, the Superintendent may make alternate suggestions to the requisitioner if, in his/her judgment, better service, delivery, economy, or utility can be achieved by changing the proposed order. This cannot circumvent the competitive bidding process;
D. / upon the placement of a purchase order, the Superintendent shall commit the expenditure against a specific line item to guard against the creation of liabilities in excess of appropriations.

The Board may acquire office equipment as defined in law by lease, by installment payments, by entering into lease-purchase agreements, or by lease with an option to purchase, provided the contract sets forth the terms of such a purchase.

1.01.03Contract Cost and Price Analysis

When competitive bidding becomes necessary per the guidelines of board policy 6320, and prior to bidding goods and/or services, the individual requesting the acquisition of these goods and/or services must perform an independent cost analysis to determine fair market value (see procedure 1.01.03.01). For additional requirements in regard to contract cost and price analysis, please refer to 34 CFR part 80.36 (f) which states:

(1) Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, grantees must make independent estimates before receiving bids or proposals. A cost analysis must be performed when the offeror is required to submit the elements of his estimated cost, e.g., under professional, consulting, and architectural engineering services contracts. A cost analysis will be necessary when adequate price competition is lacking, and for sole source procurements, including contract modifications or change orders, unless price resonableness can be established on the basis of a catalog or market price of a commercial product sold in substantial quantities to the general public or based on prices set by law or regulation. A price analysis will be used in all other instances to determine the reasonableness of the proposed contract price.

(2) Grantees and subgrantees will negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.

(3) Costs or prices based on estimated costs for contracts under grants will be allowable only to the extent that costs incurred or cost estimates included in negotiated prices are consistent with Federal cost principles (see §80.22). Grantees may reference their own cost principles that comply with the applicable Federal cost principles.

(4) The cost plus a percentage of cost and percentage of construction cost methods of contracting shall not be used.

The individual or department requesting the purchase of goods and/or services subject to the bidding requirements of policy 6320 is responsible for developing, evaluating, and maintaining evidence of contract cost and price analysis. Prior to accepting a contract bid, and during the bid evaluation process, the cost analysis performed by the individual or department must be shared, at a minimum, with the MHPS Board of Education. Please refer to board policy 6320 for additional, non-price related bid evaluation criteria that can be used when determining qualified vendors.

1.01.03.01Best Available Price

In order to ensure the best available price for goods or services, an evaluation of price must be completed. The proposed price should be compared to:

  • All offered goods or services prices
  • The current goods or services contract price
  • The previous/historic goods or services contract price
  • A similar goods or services price
  • An interlocal or piggy back agreement (an example would be shared services through the MAISD or other LEA)
  • Other data that would be easily verifiable or convincing to a third party

A price is determined reasonable if it does not exceed what a prudent consumer and/or businessperson would pay when conducting competitive business and, based on the written results of the price/cost analysis performed by the individual or department requesting the goods and/or services.

The cost/price analysis must clearly demonstrate that the proposed price is reasonable in comparison with current or recent prices for the same or similar items, adjusted to reflect changes in market conditions, economic conditions, quantities, or terms and conditions under contracts that resulted from adequate price competition where two or more responsible suppliers, competing independently, submit offers that satisfy the expressed requirement wherein the award based on best value where price is a substantial factor in the source selection and there is no finding that the price of the otherwise successful supplier is unreasonable.

Other factors to consider when determining best price include, but are not limited to:

  • Comparing offers received
  • Comparing proposed prices to price history or system bill of material or current contract
  • Parametric methods
  • Comparison to published (catalog) price lists and published market prices
  • Comparison with independent government estimates
  • Compare proposed prices to market research or pricing data for same/similar items
  • Analysis of pricing information provided by the supplier
  • Catalog price

IMPORTANT: The individual or department requesting the purchase of goods and/or services for which the best price analysis is performed will be responsible for maintaining documentation and other evidence of the best price analysis, and must be able to provide this evidence to a third party upon request.

1.01.04Competition

All procurement transactions will be conducted in a manner providing full and open competition. As stated in 34 CFR 80.36 (c) (1), some situations considered to be restrictive of competition include, but are not limited to:

  • Placing unreasonable requirements on firms in order for them to qualify to do business
  • Requiring unnecessary experience and excessive bonding
  • Noncompetitive pricing practices between firms or between affiliated companies
  • Noncompetitive awards to consultants that are on retainer contracts
  • Organizational conflicts of interest
  • Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance of other relevant requirements of the procurement
  • Any arbitrary action in the procurement process

1.02REQUISITIONS

1.02.01Preparation

The duplicate form Requisition is the initial document submittal required for the purchase of items and engagement of service providers and transfers the authority to expend funds. These forms must be filled out (at a minimum) with the following information:

  1. Suggested Vendor
  2. This must include the vendor name and address
  3. Date of Request
  4. Date the requisition is initiated by the person requesting the goods and/or services
  5. Date Required
  6. Date when the goods or services are need by the initiator of the requisition
  7. Appropriate Building
  8. Check the corresponding box for the building in which the initiator of the requisition works
  9. District Department (Optional)
  10. Quantity/Unit
  11. Indicate the physical number of items being purchased
  12. Item Description
  13. Description of item being purchased as well as any other information that will assist the purchasing department properly classifying the purchase for accounting purposes
  14. If the item pertains to restricted State and Federal program funds, additional description information may apply. Please refer to the district’s “Allowable Use of Funds” procedure for more information on this topic. If further clarification is needed to properly process the restricted state or federal programs requisition, please contact the State and Federal (S&F) Programs Director at ext. 3240 for guidance. If the S&F Director is unavailable, contact the Director of Curriculum’s office at ext. 3207 or the Accounting Specialist at ext. 3219 for additional assistance.
  15. Unit Cost
  16. Estimated cost per unit being purchased
  17. Total Cost
  18. Multiply Quantity by the Unit Cost and enter into the Total Cost Column
  19. Account Number
  20. The direct supervisor of the requisition initiator will indicate the budgetary account number that will be used for purchasing the goods and/or services
  21. If the employee assigning the account number needs assistance in establishing the proper account number to be used, please contact the Accounting Specialist at ext. 3219. If the Accounting Specialist is unavailable, contact the purchasing department at ext. 3204.
  22. Signature of the employee requesting goods and/or services
  23. Fill out the “initiated by”, “school”, and “principal” section of the requisition
  24. Signature of direct supervisor
  25. If the requisition is performed by the superintendent, the board of education must approve the requisition. If a department director is initiating the requisition, the superintendent or a second director must sign the requisition. Purchase being made with federal funds must include the signature of the State and Federal (S&F) Programs Director.

Please note that items F through I are not required if a copy of the quote for the item or service being requested is attached to the requisition, however the attachment must include all of the data indicated in items F through I. A reference to the attachment MUST be made in the “description” of the requisition, and the costs on both the requisition and attachment must match. If there are any changes to the cost sections of either sheet, they must be noted on the requisition.

1.02.02Service Contracts

A requisition and district contract is required for the procurement of all services that are not ordinarily provided by District personnel. Below are examples of services that must be obtained through a requisition:

  • Information Technology
  • Legal Services
  • Accounting Services
  • Academic Training
  • Maintenance Services
  • Utilities
  • Consultants
  • Human Resources
  • Health Care Services
  • Architectural Services
  • Professional Development
  • Project Management
  • Construction Management

The initiator of the requisition should prepare a “scope of work” or detail of services being requested. If MHPS board bid policies should dictate that other competitive bidding conditions apply, the business office will initiate the normal solicitation process, in which competitive proposals shall be received for all such services Please refer to Board Policy – 6320 (1.01).