Solicitation Preparation

Question 1

What is procurement lead time?

Answer 1

The interval between a decision to purchase a product or service to when the contract is awarded. The suggested lead time is 180 days

Question 2

What are parts of the lead time?

Answer 2

1) Drafting of solicitation documents
2) Review by CAT or SPD Delegation review
3) Posting of solicitation (30 days recommended)
4) Q& A Period
5) Response deadline
6) Evaluation of responses
7) Contract negotiation and formation
8) Contract execution

Question 3

What must the internal calendar of events include?

Answer 3

1) Milestone dates of activities or events occurring pre- and post- solicitation
2) External calendar of event dates

Question 4

Give examples of internal calendar of events

Answer 4

Kickoff meeting
Drafting solicitation
Agency internal approvals
Evaluation milestones

Question 5

What components should be included in a solicitation?

Answer 5

Introduction
Response Submission Requirements
MQs
Scope of Work (Includes specifications, and additional considerations: subcontracting reqs, background checks, conflict of interest disclosures, licensing/permit reqs, PIA reqs, intellectual property/copyright issues, records retention period)
Specifications
Payment and Pricing Terms
Contract Terms (termination clauses and other terms)
Evaluation Criteria for Award

Question 6

What are examples of MQs for vendors? How are they evaluated

Answer 6

Evaluated as pass/fail criteria; Examples:
Technical skills, licensing
Years of experience
Production facility reqs
Financial stability

Question 7

What is the Scope of Work?

Answer 7

a description of the products and services to be provided by the vendor who is awarded the contract.

Question 8

What should be used as the starting point for drafting the Scope of Work?

Answer 8

Business reqs in the needs assessment

Question 9

In terms of the components of solicitation documents, what can the success or failure of a contract be linked to?

Answer 9

Adequacy and thoroughness of the Scope of Work

Question 10

What are standard components of a Scope of Work?

Answer 10

Vendor responsibilities (tasks, deliverables and milestones)
Agency responsibilities
Evaluation of vendor performance
Deliverables and milestones
Monitoring Activities (timeline for completion, meetings, status reports)
Communication protocol (point of contact, routine communications, escalation plan for problem resolutions)
Specifications
Licensing

Question 11

What is a specification and what are the different types of specifications?

Answer 11

The description of the product or service to be offered under the contract
Performance based (focus on outcomes/results)
Design based (how to perform service or how product is made-vendor has little discretion as to method)
Mixed specifications

Question 12

Which type of specification allows respondents to bring expertise, creativity, and resources to satisfy reqs

Answer 12

Performance-based or mixed

Question 13

What are aspects of descriptive specifications?

Answer 13

1) Must provide principal physical, functional or other characteristics that are essential to the minimum business needs
2) Should NOT include minimum or maximum characteristics unique to one brand or would eliminate competition
3) Best practice- 2 known brands should be referenced “as equal”
4) Restrictive descriptive characteristics which are essential may be included only if all the manufacturer/brands referenced in the solicitation can qualify

Question 14

What are restrictive specifications?

Answer 14

Reduce competition by inadvertently customizing a product or service; (e.g. non-standard bag size)
Often result in proprietary procurements

Question 15

What is a deliverable?

Answer 15

measurable task or outcome (e.g. performance/status report) (A time sheet is not a deliverable, but used to track vendor’s time spent on performance)

Question 16

What is a milestone?

Answer 16

A scheduled event associated with a deliverable to gauge progress (e.g. date when certain percentage of project is complete)

Question 17

What are payment and pricing terms?

Answer 17

1) details of how payment will be remitted or costs reimbursed under the contract (timing of payment invoice requirements) Best practice- each payment should reflect value of work performed
2) Should be based on industry-specific research
3) Based on Reimbursement methodology
4) Advance payment (must meet list of exceptions like subscriptions and maintenance contracts)
5) Early payment- must be specified in contract
6) Retainage
7) Information about tax exempt

Question 18

What are the 3 most common reimbursement methodologies?

Answer 18

1) Fixed price- use when requirements are precisely defined (total price for product or service)
2) Time and materials- scope cannot be precisely defined- e.g. quantity is uncertain (payment is based on pre-determined amount/unit)
2) Cost reimbursement- scope and costs cannot be precisely defined/accurately determined (pymt to vendor of direct and indirect costs incurred)

Question 19

What are general contract requirements?

Answer 19

1) Must have start and end date
2) Include a term for non-appropriations if term of contract will cross a fiscal year
3) Recommendation- maximum duration of contract is 4-5 years (including renewals and extensions)

Question 20

What are contract termination provisions?

Answer 20

1) Termination by mutual agreement
2) Termination for convenience (no fault termination)- should be in all contracts
3) Termination for cause- party has failed to perform or make progress or breached the contract)
4) Termination for non-appropriation

Question 21

What are alternatives to termination for cause?

Answer 21

Cure notice- specifies a period of time to correct the deficiency
Corrective Action Plan- identifies activities that must be performed to restore compliance

Question 22

What is the following contract clause an example of: Any contract resulting from this solicitation is contingent upon the continued availability of lawful appropriations by the Texas Legislature

Answer 22

Termination for non-appropriation

Question 23

What are the guidelines for determining terms and conditions?

Answer 23

Start with boilerplate terms then add solicitation specific terms that address
Change Control
Risk Mitigation
Remedies

Question 24

What should be addressed in Change Control (for terms and conditions)?

Answer 24

Addressing anticipated/unanticipated change to scope of work, schedule, and pricing

Question 25

What are examples of Change Control Processes?

Answer 25

1) designating a point of contact for proposed changes changes made by either a) issuing a Purchase Order Change Notice (POCN) (non complex procurements) or b) executing a signed contract amendment. 2) Formal routing procedure with forms and review periods 3) Transition plans- from one vendor to another * best practice for uninterrupted service * define roles and responsibilities of each entity, resources, and timeline, safeguarding of confidential info, who bears costs 4) Price adjustment based on an Index (Consumer Price Index- for services or Producer Price Index- for commodities)

Question 26

What is a Purchase Order Change Notice?

Answer 26

Used to manage changes to scope, schedule and pricing for non-complex procurements during the contract term (used for Texas SmartBuy)

Question 27

What is the benefit to Change Control processes?

Answer 27

Uninterrupted performance while parties investigate proposed changes

Question 28

What are risk mitigation measures?

Answer 28

1) Financial capability (financial statements) 2) Insurance (Commercial general liability, professional liability, Worker's compensation, Commercial Umbrella Excess Liability, Automobile) 3) Surety Bonds 4) Warranties 5) Extended warranty or maintenance agreements (repair and replacement service) 6) Limitations of Liability Clause-parties only liable for damages that are reasonably foreseeable at the time of contracting

Question 29

What are compensatory damages?

Answer 29

amounts necessary to compensate injured party for loss * Expectation damages (benefit of the bargain-contract price minus benefit received) * Reliance damages (put injured party back to status before entering contract) * Consequential damages (special damages forseeable and should have been included in scope) (examples: discounts, credits, refunds, waiver of fees)

Question 30

What are restitution damages?

Answer 30

To prevent unjust enrichment- Awarded if innocent party incurred a loss that benefited the other party- recovery is not limited to the contract price

Question 31

What are punitive damages?

Answer 31

used in breach of contract cases when the sole point is to punish the wrongdoer. These damages are typically discouraged in breach of contract cases.

Question 32

What are remedies?

Answer 32

Provide protection to an agency if there is a contract breach; each deliverable should have a remedy for non-performance

Question 33

What are examples of remedies?

Answer 33

1) Liquidated damages-used when actual damages are difficult to calculate- set monetary amount based on percentage 2) Compensatory damages- amounts necessary to compensate injured party *Expectation damages (benefit of the bargain-contract price minus benefit received) * Reliance damages (put injured party back to status before entering contract) * Consequential damages (special damages forseeable and should have been included in scope) Examples of compensatory damages: discounts, credits, refunds, waiver of fees 3) Restitution damages- recovery is based on market value and not limited by contract price-used to prevent unjust enrichment 4) Equitable remedies (e.g. injunctions) 5) Punitive damages- rare- used to punish wrongdoer 6) Nominal damages- used when injured party has not suffered financial loss but wants to show who is in the right

Question 34

What should be included in solicitation for Response Submission Requirements?

Answer 34

1) due date and time, 2) delivery address, 3) acceptable delivery method (e.g., email, fax, USPS), including how agency will treat late or illegible responses 4) container labeling (e.g., name and address of respondent, solicitation number), 5) required number copies of the response, and 6) format of response (e.g., electronic file type, bound, tabbed, paginated, size of paper, page number limitations).

Question 35

What is the primary objective of every procurement?

Answer 35

Obtain best value for the State

Question 36

What must be included in solicitation for evaluation criteria?

Answer 36

1) Identify criteria and relative weights 2) The criteria must reflect the ESSENTIAL QUALITIES or PERFORMANCE REQUIREMENTS necessary to achieve objectives of the contract 3) Information submitted directly relates to the criteria

Question 37

What are examples of submission information requested for evaluation criteria?

Answer 37

Respondent qualifications- licenses or certifications Respondent experience- specific number and scope of similar projects Financial capability- financial statements

Question 38

What evaluation criteria does SPD recommend in addition to meeting specifications?

Answer 38

1) Respondent's proposed scope of work 2) Past performance and experience 3) Proposed price

Question 39

What are Limitations of Liability Clauses?

Answer 39

Used to limit potential breach of contract damages. Not liable for unforeseeable damages and often limited to foreseeable damages. Used to alter the extent of liability otherwise recoverable at common law.

Question 40

For an effective solicitation, the ___ and the ___ must be aligned and the agency's _____ terms must be consistent with _____ standards.

Answer 40

scope of work and pricing terms must be aligned agency's pricing terms industry standards

Question 41

What must the external calendar of events include?

Answer 41

``` Vendor deliverables and milestones Due dates (for questions, responses) ```

Question 42

What are benefits and drawbacks of each reimbursement methodology?

Answer 42

1) Fixed price- vendor assumes most of risk/ vendor is motivated to look for out of scope items 2) Time & Materials- payment based on quantity of work completed and large quantities lead to volume discounts/ requires significant monitoring & pymt not linked to vendor's achievement of goal 3) Cost reimbursement- allows forward progress when scope is uncertain & customer obtains full cost info/ customer bears burden of cost fluctuations and vendor does not have incentive to control costs

Question 43

Reimbursement methodologies should be structured to fairly compensate the contractor and encourage timely and complete performance of work

Answer 43

fairly compensate the contractor and encourage timely and complete performance of work