Procurement

A.R.S. §15-213 requires districts to follow procurement practices adopted by the State Board of Education. The School District Procurement Rules are based on the Arizona Procurement Code (A.R.S. Title 41, Ch. 23), which is the legislative authority and guidance for procurement. These rules: 

• Simplify, clarify, and modernize the law governing procurement by the State.
• Permit the continued development of procurement policies and practices.
• Make the procurement laws as consistent as possible.
• Provide for increased public confidence in the procedures followed in public procurement.
• Ensure the fair and equitable treatment of all persons who deal with the procurement system of this State.
• Provide increased economy in the State procurement activities and maximize to the fullest extent practicable in purchasing value for public monies of this State.
• Foster effective broad-based competition within the free enterprise system.
• Provide safeguards for the maintenance of a procurement system of quality and integrity.

Districts should obtain written quotes from at least 3 vendors for purchases costing at least $10,000 and less than $100,000. Refer to the USFR §VI-G, Expenditures for detailed requirements.

Yes. School District Procurement Rule R7-2-1022(A) requires districts to advertise the notice of the IFB/RFP if procuring services other than the following:

• Clergy.
• Architect.
• Certified public accountant.
• Engineer.
• Physician.
• Land surveyor.
• Dentist.
• Assayer.
• Legal counsel.
• Geologist.
• Landscape architect.

Further, for all other goods, services, and construction procurements, if there are 4 or fewer bidders on the bidders list, the district must advertise the notice of the IFB/RFP. 

Yes, if a majority of the work will be done in the last year of the contract and work will not carry over substantially into the next fiscal year. However, the district should not ask or allow the architect to start work on any new projects scheduled for the fiscal year after the contract period, thereby circumventing the School District Procurement Rules that would require those services to be competitively bid. School District Procurement Rule R7-2-1093(E)

Due diligence is the process of obtaining and reviewing documentation to verify that the procuring entity procured contracts pursuant to the School District Procurement Rules and determining that the contract price and terms are favorable to the district to receive the best value for the good or service desired.

Whether administering or purchasing from a cooperative purchasing agreement, districts are responsible for ensuring that procurements are done in accordance with School District Procurement Rules.

Based on R7-2-1004(B), districts are authorized to prescribe methods and operational procedures to be used in preparing written determinations.

Districts should prepare and maintain written determinations, as required by R7-2-1004 to support their reason(s) for the selection of a particular vendor, including for any specified professional services, construction, construction services, or materials to an entity selected from a qualified select bidders list or through a school purchasing cooperative. The determination shall specify the reasons for the determination, including how the determination was made. Documentation should be included in the procurement file to substantiate the determination.

Districts should carefully research goods or services and determine in writing that the pricing or contract terms are fair and reasonable. If the good or service needed has been provided before, districts should consider what price was previously paid and research and determine if another district has purchased the same item. Districts may also review documents and evaluate the following, as applicable, to determine: 

• Contract or modification is based on adequate competition;
• Price is supported by established catalog and/or market prices;
• Price is established by law or rule;
• Price is supported by relevant, historical price data; 
• Estimated value, scope, complexity of project;
• Nature of the service; or
• If there are any government or educational discount programs.

This research will provide valuable pricing information that can be used during negotiations and in determining price reasonableness. R7-2-1079, R7-2-1110 and R7-2-1122

School District Procurement Rule R7-2-1101 includes procedures for creating a qualified select bidders list, R7-2-1106—1115 includes procedures for construction-manager-at-risk, design-build, and job-order contracting methods of construction, and R7-2-1117—1123 relate to specified professional services such as architects or engineers. 

Yes/No. Auxiliary Operations and Community School Fund monies are public monies. The School District Procurement Rules or USFR guidelines for written price quotes apply to every district expenditure of public monies when the cost of the construction, materials, or services is at least $10,000, unless an expenditure is specifically exempted by a federal/State law or regulation or is otherwise specifically exempted from the Procurement Rules or USFR guidelines (e.g., payroll or student activities monies).

Example:
A district decides to run a dance program through the Community School Program/Fund and wants to hire a dance instructor.

Yes. If the district hires a new employee to be the dance instructor, the payment would not be required to be bid.

Yes. If the district hires a current district employee to be the instructor (by addendum to a teacher's contract or classified employee's agreement), the payment would not be required to be bid since the extra duties are within the realm of duties normally added by addendum to a contract or agreement (e.g., coaching, or sponsoring a student activity or extracurricular activity).

Note—Services such as t-shirt silk screening, painting buildings, plumbing, construction, etc., performed by a teacher/employee acting as a vendor, regardless of what fund they are paid out of, would require the district to follow the School District Procurement Rules. (USFR §VI-G, Expenditures).

No. If the district hires someone other than a district employee to be the instructor, the district should obtain written quotes or formal competitive bids in accordance with the USFR guidelines or Procurement Rules, as applicable, for this service.

If the district obtains written quotes and does not want to select the lowest bidder, they should document why they selected someone other than the lowest bidder (e.g., the person who was the lowest bidder does not know how to dance!).

No. A.R.S. §15-213(N) prohibits district employees from accepting personal gifts from vendors.

Further, A.R.S. §15-213(Q)(1) defines “gift or benefit” as a payment, distribution, expenditure, advance, deposit or donation of monies, any intangible personal property or any kind of tangible personal or real property. A gift or benefit does not include items that are of nominal value such as a greeting card, t-shirt, mug or pen, food or beverage, or expenses or sponsorships relating to a special event or function to which individuals involved in procurement are invited.

In addition, A.R.S. §38-504(C) prohibits a public officer or employee from using their official position to secure anything of value or benefit for themselves that they would not ordinarily receive as part of their official duties, if the thing or benefit is of such character as to manifest a substantial and improper influence on the officer or employee with respect to their official duties.

Some scenarios to consider and whether they could be considered a personal gift or benefit:

1. A district vendor invites you to a charity event and pays your fee that includes meals, hotel stay, and golf. Highly questionable.

2. The vendor also pays for your spouse to attend the charity event. Highly questionable.

3. A district vendor, also a friend, gives you a birthday gift. Depends. Are you in a position as defined under A.R.S. §15-213?

4. A district employee, who is also a district foundation board member, seeks donations from district vendors for a foundation event. Does not appear to be, but caution is needed. The scenarios above and any other types of actions that might be considered or give the appearance of a personal gift or benefit should be carefully evaluated and discussed with district management and the district’s legal counsel, as appropriate, before accepting anything of value.