721.0 Purchasing Procurement Policy

PURCHASING PROCUREMENT POLICY

I.    PURPOSE

The purpose of this policy is to ensure compliance with District procurements of all supplies, materials, equipment, furnishings and services including purchases regulated by federal and state grant programs.

II.    GENERAL STATEMENT OF POLICY

1. Under the direction of the School Board, the District operates a centralized purchasing system administered by the Purchasing Department. The Purchasing Department is responsible for procuring supplies, equipment, and services necessary to provide a quality instructional program for students and staff.
2. It is the policy of the District to ensure that all disbursements of District funds are properly reviewed and authorized, and consistent with sound financial management principles. In order to meet these objectives, all disbursements of District funds shall be subject to the Purchasing procedures, to the extent that they do not conflict with or contradict with any Board policies and maintain accurate records of all transactions for audit purposes.
3. The District shall award all contracts which exceed the dollar limit thresholds based on the funding sources as follows:
   1. Specified in Minn. Stat. § 471.345 (Uniform Municipal Contracting Law) in accordance
   2. Specified in Federal Awards Administration Policy 721.1
   3. Specified in Minn. Stat. § 123B.52, Independent School District, Contracts.
4. For an expenditure of public funds to qualify as a lawful expenditure, it should have:
   1. A public purpose. A public purpose for the expenditure must exist.
   2. The activity will benefit the community as a body.
   3. The activity directly relates to functions of government.
   4. The activity does not have, as its primary objective, the benefit of a private interest.
   5. Authority. Specific or implied authority for the expenditure must exist.

I.    CONFLICT OF INTEREST

1.  Employees, including School Board members, who are in a position to make direct purchases, recommend purchases, services and sources or supply and/or negotiate with suppliers and contractors may not do the following:
   1. Receive or solicit from such suppliers, sources and/or contractors, directly or indirectly, for him or herself or anyone with whom he or she has family, business or financial ties, anything of economic value as a gift, gratuity, loan, entertainment or favor, including gift certificates, credits or bonus points which can be exchanged for merchandise, frequent flyer miles, etc. This prohibition shall not apply to the gift exceptions specifically enumerated in Minnesota Statute 471.895, subd. 3.
   2. Use their position to influence district decisions for personal gain;
   3. Perform any work or service for remuneration for a supplier or contractor except  as disclosures of conflict of interest are properly made;
   4. Give preferential treatment to friends, domestic partner, members of one’s household, guardian, relatives (relative is defined as: child, spouse, sibling, parent, mother-in-law, father-in-law, grandchild, grandparent, or stepparent), current or former district employees, or any relationship that has the appearance of or is perceived to be a conflict.
   5. Disclose information about bids or other confidential matters which would compromise the district’s ability to obtain the best price.
2. Any district employee, including any School Board member, who knows, or may reasonably be expected to know, that he or she, or his or her spouse, has a material financial interest in any transaction in which the district is or may be concerned, shall disclose such interest to the superintendent and disqualify himself or herself from participating in or influencing that transaction.
3. Code of Conduct
   1. As representatives of the School District, all employees are expected to conduct themselves in a professional and ethical manner, maintaining high standards of integrity and the use of good judgment.
   2. Employees are expected to be principles in their business interactions and act in good faith with individuals both inside and outside the School District community.
   3. The Code of Conduct shall govern  the performance,  behavior  and  actions of the agency, including Board members, employees, directors, volunteers, or agents who are engaged in any aspect of procurement, including – but not limited to – purchasing goods and services; awarding contracts and grants; or the administration and supervision of contracts.
4. No employee, officer, director, or volunteer of the School District shall participate in the selection, award or administration of a bid or contract supported by Federal funds if a conflict of interest is real or apparent to a reasonable person.
5. Alleged violations of the policy will be referred to the Employee Services Department for appropriate follow up. If the alleged violation involves the superintendent, the complaint shall be filed directly with the school board. If the alleged violation involves a school board member, the complaint shall be filed directly with the school board chair. If the alleged violation involves the school board chair, the complaint shall be filed directly with the school board vice chair.
6. The District’s employees, officers, directors, or volunteers shall neither solicit nor accept gratuities, gifts, consulting fees, trips, favors or anything having a monetary value in excess of that which is stated in Minnesota Statute 471.895, from a vendor, potential vendor, or from the family or employees of a vendor, potential vendor or bidder; or from any party to a sub- agreement or ancillary contract.
7. The District’s employees, officers, directors, or volunteers shall neither solicit nor accept gratuities, gifts, consulting fees, trips, favors or anything having a monetary value in excess of that which is stated in Minnesota Statute 471.895, from a vendor, potential vendor, or from the family or employees of a vendor, potential vendor or bidder; or from any party to a sub- agreement or ancillary contract.

I.    PURCHASING ADMINISTRATION

The School Board has the ultimate authority and approval over what the District Purchases. The School Board authorizes administration to establish procedures for the compliance with this policy that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.

1. The school district’s procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives and any other appropriate analysis to determine the most economical approach.
2. The school district must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.
3. The school district must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement; selection of the contract type; contractor selection or rejection; and the basis for the contract price.
4. The school district alone must be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the school district of any contractual responsibilities under its contracts.
5. When possible the school district should ensure that small business minority businesses, women’s business enterprises, veteran-owned businesses  and labor surplus area firms are considered.
6. The School District should, to the greatest extent practicable and consistent with law, purchase, acquire, or use products and services that can be reused, refurbished, or recycled; contain recycled content, are biobased, or are energy and water efficient; and are sustainable. This may include purchasing compostable items and other products and services that reduce the use of single-use plastic products.
7. Competition - The school district must have written procedures for procurement transactions. These procedures must ensure that all solicitations:
   1. Incorporate a clear and accurate description of the technical requirements for      the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product, or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specification should be avoided if at all possible. When making clear and accurate description of the technical requirement is impractical or uneconomical, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and
   2. Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.
   3. The school district must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the school district must not preclude potential bidders from qualifying during the  solicitation period.
   4. Specifications utilized in solicitations shall not be so prepared as to exclude all but one type or kind but shall include competitive supplies and equipment Minn. Stat. §471.35.

I.        MANAGING EQUIPMENT AND SAFEGUARDING ASSETS

1. Property Standards - The school district must, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired or improved with federal funds as provided to property owned by the non-federal entity. Federally owned property need not be insured unless required by the terms and conditions of the federal award.
   The school district must adhere to the requirements concerning real property, equipment, supplies, and intangible property set forth in 2 C.F.R. §§ 200.311, 200.314, and 200.315.
2. Equipment - Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place will, at a minimum, meet the following requirements:
   1. Property records must be maintained that include a description of the property; a serial number or other identification number; the source of the funding for the property (including the federal award identification number (FAIN)); who holds title; the acquisition date; the cost of the property; the percentage of the federal participation in the project costs for the federal award under which the property was acquired; the location, use, and condition of the property; and any ultimate disposition data, including the date of disposition and sale price of the property.
   2. A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years.
   3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated.
   4. Adequate maintenance procedures must be developed to keep property in good condition.
   5. If the school district is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.

VII.          Joint Purchasing/Cooperative Purchasing

The District shall participate in joint purchasing ventures with other municipalities, other purchasing cooperatives or with the State when doing so will improve the financial health of the district and meet district standards, and shall consider other cooperative purchasing groups agreement or state purchasing agreements whenever feasible or as required by law.

VIII.        Construction Contracting

1. Responsible Contractor: Each construction contract in excess of $50,000, awarded pursuant to a lowest responsible bidder requires the successful contractor to submit a verification of compliance signed under oath by an owner or officer verifying compliance with the minimum criteria set forth in Minn. Stat. § 16C.285, subdivision 3.
2. Bonds: Contractors doing public work are required to give both a performance bond and a payment bond in an amount not less than the contract price if the contract is more than $175,000 Minn. Stat. § 574.26
3. Payment: Each contract between the school district and a prime contractor requires the prime contractor to pay subcontractors within ten days of receipt of payment from the government entity or pay interest at the rate of 1½ percent per month or any part of a month Minn. Stat. § 471.425
   1. Withholding Affidavit/Certificate: Before making final settlement with any contractor under a contract requiring the employment of employees for wages by said contractor and by subcontractors, the school district must obtain a certificate by the Commissioner of Revenue that the contractor or subcontractor has complied with the withholding requirements of Minn. Stat. § 290.92 (either Form IC134 or a Contractor’s Withholding Affidavit Confirmation). Minn. Stat. § 270C.66
   2. Retainage: For a contract for public improvement, a public contracting agency may withhold up to five percent of any progress payment as retainage to ensure satisfactory performance. If it does so, it must release the retainage no more than 60 days after substantial completion.
      “Substantial completion” is the date when construction is sufficiently completed so that the owner can occupy or use the improvement for the intended purpose. For streets, highways, and bridges, “substantial completion” is defined as the date when construction- related traffic devices and ongoing inspections are no longer required. The public contracting agency is permitted to continue to withhold the following two amounts even after the 60-day period:
      1. up to 250 percent of the cost to correct or complete work known at the time of substantial completion, and
      2. the greater of $500 or one percent of the value of the contract pending submission of final paperwork.
         
         The first amount must be released within 60 days of work completion. The second must be released within 60 days of submission of final paperwork Minn. Stat. § 15.72