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ATTACHMENT
PERMANENT UNIVERSITY IMPLEMENTING PROCEDURES
FOR MEDICAL CENTER PROCUREMENTS

A. Statement of Purpose and Authority

These implementing procedures are the permanent procedures authorized and required by the Board of Visitors' June 14, 1996, resolution governing the exercise of procurement autonomy by the University on behalf of the Medical Center for Medical Center procurements. The Medical Center department authorized to undertake these procurements is Materiel Support Services. These procedures implement the Board requirements and those of Chapters 933 and 995 of the 1996 Virginia Acts of Assembly. These procedures shall be effective for all University procurements on behalf of the Medical Center thirty(30)days after the date transmitted to the President and the Board. These procedures are to be implemented by the Director, through Medical Center Purchasing, a division of Materiel Support Services, and they shall apply to the purchase of all goods and services, except construction and architectural and engineering services, by the University on behalf of the Medical Center.

B. Policy and Goals

In connection with Medical Center procurements and the processes leading to award of contracts, the Medical Center shall adhere to the following principles and guidelines:

• 1. The Medical Center shall seek and ensure competition to the maximum practical degree, taking into account the size of the anticipated procurement, the term of the resulting contract, and the likely extent of competition.
• 2. The Medical Center shall conduct all procurements in a fair and impartial manner, avoiding any impropriety or appearance of any impropriety.
• 3. The Medical Center shall make procurement rules clear in advance of any competition to the extent practicable.
• 4. The Medical Center shall provide access to all qualified vendors, firms, and contractors (collectively referred to as vendors), with no potential bidder or offeror excluded arbitrarily or capriciously, while allowing flexibility to engage in cooperative procurements and to meet the special needs of the Medical Center.
• 5. The Medical Center shall ensure that specifications for procurements are fairly drawn so as to not favor unduly a particular vendor.
• 6. The Medical Center shall support the goal of the procurement process to provide for the exchange of information between the Medical Center, the remainder of the University, and vendors, firms, or contractors concerning the goods or services sought and offered while preserving the confidentiality of proprietary information.

These principles and guidelines shall be adhered to and incorporated into the procurement process as outlined in the following procedures.

C. Methods of Contractor Selection

All contracts with nongovernmental contractors for the purchase of goods or services shall be awarded by one of the following methods. In all instances, competition should be sought to the maximum practical degree, but no contract award will be reversed based upon the method of contractor selection used. Written records of all procurements shall be maintained. Vendors may be prequalified for particular types of contracts at the discretion of Medical Center Purchasing.

• 1. Small Procurements. Procurements of goods or services to be obtained at anticipated prices of $30,000 or less may be undertaken by any method reasonable under the circumstances, given the complexity of the transaction, the likely extent of competition, the term of the contract and the needs of the requesting department. Methods include informal bidding, including telephone or other quotes, competitive sealed bidding, competitive negotiation and sole source. Negotiation with any vendor is permitted and encouraged, and the agreed price should in all instances be reasonable under the circumstances. Written records of sources solicited and prices should be maintained.
• 2. Procurements Over $30,000. Procurements of goods and services anticipated to be priced at more than $30,000 should be made with such competition, including public notice, as is practicable under the circumstances. Where requirements are clear and price is the sole determining factor in the award, competitive sealed bidding shall be used unless other factors make this method impractical. In such cases, telephone solicitations, supported by written documentation to ensure reasonable price and a reasonable scope of competition, is permitted with the prior approval of the method and the procurement specifications by the Director of Materiel Support Services. Other methods may be used as well.
  
  • a. Competitive Sealed Bidding. Where competitive sealed bidding is used, the procurement shall be undertaken pursuant to an Invitation for Bids ("IFB") which shall prescribe all relevant contractual requirements, including quantities, term, conditions, etc. The IFB may be distributed to prospective bidders identified by Medical Center Purchasing and notice of the procurement shall be posted in the offices of Medical Center Purchasing for public view. Other methods of publication are encouraged where practicable. Variations of competitive sealed bidding may be used, such as a process for vendor pre-qualification.
  • b. Competitive Negotiation. Where factors other than price are important in selecting a vendor, competitive negotiation pursuant to a Request for Proposal ("RFP") may be used. In addition, a system of competitive negotiation pursuant to an RFP shall be used for procurements of professional services, as such services are defined in Virginia Code § 11-37. The RFP shall set out the requirements for vendor qualification and selection, and describe what is sought to be purchased. The RFP may be distributed to prospective offerors identified by Medical Center Purchasing and notice of the procurement shall be posted in the offices of Medical Center Purchasing. The competitive negotiation process used for contractor selection by Medical Center Purchasing shall ensure that information made available to any offeror or prospective offeror is available to all other offerors or prospective offerors. Following evaluation of written proposals, Medical Center Purchasing shall rank the proposals, may negotiate with two or more offerors, and may award a contract upon achieving a reasonable and satisfactory price and non-price offer from an offeror.
  • c. Sole Source. Sole-source procurements for procurements over $30,000 may be undertaken only after a written finding that only one source is practicably available for the goods or services sought, which shall be reviewed and approved by the Director of Materiel Support Services or designee. Procurements at auction may be similarly authorized, based upon a written determination that it is in the best interest of the University and the Medical Center to undertake such a purchase.
  • d. Cooperative Procurements. Cooperative or joint procurements by the University on behalf of the Medical Center are authorized. To the extent that it is economically beneficial and lawful to do so, the Medical Center may participate with other units of the University in the joint procurement of goods and services, or it may purchase under blanket University or state contracts. The Medical Center may also participate in cooperative procurements with other educational institutions, charitable organizations, healthcare provider alliances, and purchasing organizations, such as the University Health System Consortium ("UHC") and the Virginia Hospital Association.

D. Virginia Code Provisions Applicable to Procurements

The following Virginia Code sections continue to apply to Medical Center procurements:

• 1. § 11-49 (use of brand names in a solicitation does not restrict offerors to that brand unless specified in the bid solicitation);
• 2. § 11-51 (employment discrimination by contractors and subcontractors is prohibited, and certain requirements apply);
• 3. § 11-52 (public inspection of procurement records, cost estimates, etc. subject to confidentiality provisions);
• 4. § 11-54 (withdrawal of bids due to error is allowed under certain circumstances);
• 5. § 11-56 (five percent retainage permitted in contracts and subcontracts);
• 6. § 11-56.2 (contract provisions barring damages for unreasonable delay are void);
• 7. § 11-57 (bid bonds required for contracts over $100,000);
• 8. § 11-58 (performance and payment bonds required on contracts over $100,000);
• 9. § 11-59 (time limitations for actions on performance bonds);
• 10. § 11-60 (actions on payment bonds and time limitations);
• 11. § 11-61 (alternative forms of security); and
• 12. §§ 11-72 through 11-80 (Ethics in Public Procurement).

Where a procurement is undertaken for a brand name good, and substitution of an equal product is not authorized, the brand name designation shall be supported by a written determination that the named brand is necessary, or that sufficient intra-brand competition exists to make competition likely in the procurement.

Discrimination in procurements based upon race, religion, color, sex or national origin is prohibited. The Medical Center shall (a) ensure a non-discriminatory procurement process, and (b) prohibit employment discrimination by all vendors, firms, and contractors who provide goods and services to the Medical Center. These provisions shall be outlined in all formal procurement documents, including RFP's, IFB's, contracts and purchase orders. The Medical Center shall actively seek to involve minority business enterprises ("MBE") in its procurement processes. The Director, Materiel Support Services, shall coordinate these activities with the Director of Minority Procurement Programs for the University.

E. Contract Administration

Medical Center Purchasing shall administer Medical Center contracts, including:

• 1. Procuring of supplies, equipment, and services
• 2. Reviewing and processing of requisitions, purchase orders, contracts, bids, and payment requests
• 3. Coordinating vendor contracts and communications
• 4. Tabulating of bids
• 5. Processing vendor returns
• 6. Expediting past due orders
• 7. Coordinating activities involving UHC agreements
• 8. Reviewing vendor and product complaints
• 9. Reviewing new products
• 10. Identifying and coordinating supply expense reduction and standardization activities

Contracts must include provisions requiring contractors to pay promptly all subcontractors upon receipt of payments from the University. Contracts may include provisions for retainage, where appropriate, and where the retention provisions are described in the solicitation. Contracts also may be modified, extended or enlarged by agreement between Medical Center Purchasing and the contractor where such modification, extension or enlargement is in the best interest of the University and the Medical Center.

The Medical Center shall pay invoices and interest on past-due invoices in accordance with good business practice and the applicable provisions of the Code of Virginia as outlined below. The payment due date for all Medical Center invoices shall be the later of: (a) thirty (30) days from the date of receipt of goods and/or services (providing no defect or impropriety is detected in the invoice or goods and/or services received), (b) the invoice due date, or (c) the due date established by contract. Payment may be made earlier than the payment due date as deemed appropriate by the Medical Center. The Medical Center shall pay interest on properly-presented invoices outstanding more than fourteen (14) days beyond the payment due date at a rate no higher than the lowest prime rate charged by any commercial bank as published in The Wall Street Journal. Payment of Medical Center invoices shall be made in compliance with the set-off procedures of the Virginia Debt Collection Act, Section 2.1-726 et seq. of the Code of Virginia. The Medical Center shall submit an annual report to the Executive Vice President and Chief Operating Officer which summarizes the total interest paid in conjunction with past due invoices for each fiscal year.

F. Remedies

Formal processes for (a) submission of protests and appeals by vendors, firms, and contractors, and (b) debarment of vendors, firms and contractors by the University on behalf of the Medical Center in conjunction with Medical Center procurements are hereby established. The President of the University shall (1) designate an individual to whom protests shall be directed, and (2) appoint a Medical Center Procurement Appeals Board to whom appeals shall be directed for review and subsequent action. The Medical Center Procurement Appeals Board (the "Board") shall be comprised of five individuals with procurement and purchasing experience, one of whom shall be appointed chairperson. The initial Board shall include two members appointed for a term of one year, and three members, including the chair, who shall be appointed for terms of two years. All subsequent appointments shall be for terms of two years. The Board shall sit in panels of three members as appointed by the chair to consider appeals. The Board shall adopt written procedures governing its process, which shall provide for a hearing if requested by the vendor, and which shall require a written decision of the Board including findings of fact for all appeals. The University shall provide such staff as is necessary for the Board to complete its work.

Protests may challenge determinations of vendor, firm, or contractor non-responsibility or ineligibility, or award of contracts, provided that such protests and appeals are filed in writing and received by the Director, Materiel Support Services, within ten (10) calendar days of such actions by the Medical Center. Where the protest is dependent upon the provision of information to the vendor by the University, the ten (10) day period shall be tolled upon the vendor's request for such information and shall resume upon the requested information being made available to the vendor. Any protest shall state with specificity the basis of the challenge. Remedies shall be limited to reversal of the action challenged on the basis that it is arbitrary, capricious, not in accordance with law, or not in accordance with the terms and conditions of the solicitation documents.

Any appeal of the denial of a protest must be filed in writing with the Medical Center Procurement Appeals Board, in care of the Chief Contracting Officer of the University, and received by the Board within ten (10) calendar days of the denial of the protest. Remedies shall be limited to reversal of the action challenged on the basis that it is arbitrary, capricious, not in accordance with law, or not in accordance with the terms and conditions of the solicitation documents.

The University, on behalf of the Medical Center, may debar for a specified period or take corrective measures with any vendor, firm, or contractor, for one or more reasons. The causes for debarment, scope and term of debarment, and application of debarment provisions to other parties such as manufacturers or suppliers shall be those set forth below:

Debarment is action taken by the institution to exclude individuals or vendors from contracting with the institution for particular types of goods or nonprofessional services for specified periods of time. Debarment does not relieve the vendor of responsibility for existing obligations.

The purpose of debarment is to protect the institution from risks associated with awarding contracts to persons or vendors having exhibited an inability or unwillingness to fulfill contractual requirements, and to protect the institution's interests and the integrity of the procurement process by preventing individuals or vendors which have displayed improper conduct from participating in the institution's business for specific periods of time.

1. Causes for Debarment

The debarring official can debar an individual or vendor without judicial determination for any of these reasons:

• a. Breach (including anticipatory breach) of contract with an institution.
• b. Sale or attempted sale to an institution of items or services which are required to be purchased under another contract, when the vendor knew or had reason to know that the items or services are required to be purchased under that contract.
• c. Statement of an unwillingness or inability to honor a binding bid. A mere request to withdraw a bid, which does not otherwise state an unwillingness or inability to perform, is not a cause for debarment.
• d. Falsifying or misrepresentation of manufacturer's specifications in order to appear responsive to a solicitation.
• e. Conferring or offering to confer any gift, gratuity, favor, or advantage, present or future, upon any employee of an institution who exercises any "official responsibility" for a "procurement transaction" as those terms are defined in the Code of Virginia, Section 11-73. It is not necessary that the employee accept the offer, or that the offer be made with intent to influence the employee in an official act. Offers of any discounts or privileges not available to all State employees is considered to be offering an advantage.
• f. Failure to disclose a condition constituting a conflict of interest by any officer, director, owner, or partner of the vendor awarded the contract or purchase order.
• g. Any cause indicating that the individual or vendor is not a responsible vendor.
• h. A determination by the institution that a vendor has used abusive or obscene language or behaved in a threatening manner toward institutional personnel.
• i. Sale, under non-emergency conditions, of building materials, supplies, or equipment for any building or structure constructed by or for the institution by an independent vendor employed to furnish architectural or engineering services, but not construction for such building or structure or from any partnership, association or corporation in which such architect or engineer has a personal interest (Code of Virginia, Section 2.1-639.2 and Section 11-79).
• j. Sale of goods or services to the institution when such sale is prohibited by any debarment then in effect.
• k. Conviction of any criminal offense involving public contracting. Examples include, but are not limited to, bribery (Code of Virginia, Section 18.2-447) and knowingly making a false statement in regard to collusion on a solicitation (Code of Virginia, Section 18.2-498.4). Conviction for any of the above of any officer, director, owner, partner, agent, or related business entity of a vendor constitutes grounds for the removal of the vendor.
• l. Court judgment finding a violation of either Federal or State antitrust laws.
• m. Conviction of any offenses indicating a lack of moral or business integrity.
• n. Any other activity which is so serious as to justify debarment.

If the debarring official finds that the cause for debarment reflects on the vendor's traits or tendencies only with regard to certain goods or services, the debarment may apply only to such goods or services. Otherwise the debarment applies to all goods and services within the purview of the debarring institution.

2. Ineligibility or Disqualification of Manufacturer

Should any manufacturer commit any of the acts described under causes for debarment, bids offering material, equipment, or supplies manufactured by that vendor may be rejected even though the bid is submitted by a vendor in good standing.

3. Debarment Period

Debarment is for a period of one year, except that debarment for reasons k., l., m., and n. may be for up to three years. Debarment commences upon notification of debarment, or if later, upon expiration of any existing debarments.

The debarring official may lift or suspend at any time the debarment if it is in the best interest of the institution. A debarred individual or vendor can apply for reinstatement at any time in writing to the debarring official citing actions taken to remedy the reason for debarment or to prevent recurrence of the situation that caused the debarment action. Examples of actions the debarring official may take into consideration include, but are not limited to:

• a. Repayment by a debarred vendor of additional costs resulting from a default action for which the vendor had previously failed to reimburse.


• b. Disassociation with individuals or vendors that were responsible for the debarment.

Medical Center Purchasing shall document any instances which result in the above actions being taken, and any person debarred shall be notified in writing. Any contractor debarred may protest the action, and may appeal the denial of a debarment protest, under the same deadlines and procedures established for other protests and appeals.

G. Leases

Leases of real property shall be undertaken in conformity with procedures prescribed in the Higher Education Capital Outlay Manual, Appendix V.