PROCEDURE 200 – CONTRACTING FOR GOODS AND SERVICES I. Purpose A. This procedure describes the process to follow to Contract any non- emergency service, material, or supplies required for the operation of the Common Facilities of VGEM. Emergency situations should be handled as appropriate to the circumstance. Confirming Contracts for emergencies should be completed as soon as practical after the fact to maintain a record of the occurrence. Purchases for Clubs or Events (e.g. Halloween Party) sponsored by the HOA are not covered by this procedure. B. The Declaration of Covenants and Restrictions provides that the Board of Trustees is empowered to promulgate, adopt, and publish such Rules and Regulations as may be necessary to carry out the intent of the Declaration. II. Roles and Duties A. Seller – Responsible to provide the goods and services as well as all other deliverables defined in the Contract. This may include training, manuals, special tools, spare parts etc. B. Site Manager – Receives the request to purchase service, materials, and supplies in accordance with Procedure 101 - Delegation of Authority and assures the request is fully defined. The Site Manager also administers the overall contracting process including request for bids or proposals, evaluation, award, contract administration, and payment. C. Receiver – Confirms receipt of material or completion of services in accordance with the terms of the agreement. The Receiver should normally be someone other than the Site Manager. III. Procedure A. Upon identification of a need for service, materials, or supplies, the Site Manager shall review the need, assure it is fully defined and initiate the acquisition. In emergency situations, an agreement can be placed verbally and confirmed via written Contract as soon as practicable. B. Purchases valued at greater than $10,000 or any purchase that may have a critical impact on the HOA (as determined by the Board of Trustees) are Procedure 200 – Contracting for Good or Services Adopted: October 4, 2017 Page 2 considered Major Contracts and shall comply with the provisions in this procedure applicable to Major Contracts. C. If value of the purchase is within the authority (DOA) delegated to the Site Manager, (s)he shall prepare the agreement as detailed below and transmit to the Seller. The Site Manager shall use its best efforts to award these agreements to Sellers who can meet the specifications or scope of the work and provide the best combination of price, quality, and schedule. When practicable multiple bids should be obtained. D. If the purchase is beyond the authority (DOA) of the Site Manager, the Site Manager shall prepare a Purchase Recommendation (See Exhibit 1) and review it with the entity having the approval authority. Award of the Contract shall be made after approval of the recommendation. This recommendation may be as simple as a short statement or a thorough analysis depending on the specific needs. E. A contract file shall be created for all contracts and shall include a copy of any invitation to bid, a copy of all bids/proposals, a copy of the approved Purchase Recommendation, all correspondence between Seller and HOA or internal to the HOA regarding the invitation to bid and the subsequent contract. F. Contracts documents should be written in plain language (See Exhibit 2 for a Document Checklist for Plain Language), include a contract date, contract effective date, required delivery/completion date, contract expiration date, ship to address or location of work to be performed, method of shipment, FOB, payment terms, scope of work, specification or full description including a list of all deliverables and showing, part number if applicable, unit price, extended price, subtotal of extended prices, tax, shipping and handling, other costs, special terms and conditions and signature. G. The Contract should be written using the HOA Standard Contract Form as shown in Exhibit 3 which includes the Standard Terms and Conditions. Contracts for Services should be executed by both the HOA and the Seller. One copy of the fully executed Contract shall be mailed to the Seller, and one copy placed in the Contract File. H. The Contract documents should fully define the responsibilities of the Seller, the HOA and where applicable, the homeowners of VGEM. I. When Service is rendered, or material received, it should be inspected to assure that it conforms to the agreement. If so, it should be so noted in the Contract file. Inspection of materials should be done when the deliverer of the materials is still present, whenever possible, and any discrepancies should be noted on the Procedure 200 – Contracting for Good or Services Adopted: October 4, 2017 Page 3 deliverer’s paperwork. If there is a discrepancy, the Site Manager should be notified, and the Site Manager shall immediately notify the Seller. If any parts or equipment are replaced, the contractor shall give the original parts to the Site Manager or their designee identifying the reason the parts or equipment are being replaced. IV. Major Contracts, as defined herein shall adhere to the following: A. A minimum of three bids shall be sought. In cases where it is anticipated that some Sellers may decline to bid an adequate number of Sellers should be invited to bid to obtain three bids and an Intent to Bid document shall be required to be submitted by each bidder. If three bids are not obtained, the Purchase Recommendation shall include an explanation of why there are less than three bids. B. All bids shall remain confidential and sealed until the Bid Closing Date. Bids should be kept in a secure location and not distributed until after the Bid Closing Date. During the period from the Bid Closing Date until the award of the Contract, bid information shall remain confidential and distributed only on a need-to-know basis. C. The evaluation criteria should be documented prior to the start of evaluating proposals. Each Contract will have unique evaluation criteria, but such criteria generally includes price, schedule, quality, prior performance of Seller at VGEM, reference checks, features and characteristics that are unique to a given Seller, commercial terms and conditions and Sellers ability to provide future maintenance or modifications as required. D. An evaluation team shall be assigned which includes a minimum of three people. Typically, the Site Manager and at least one Board member shall be assigned to each team. The team should be selected prior to issuing the invitation to bid. E. All Major Contracts shall be included on a Contracting Plan (See Exhibit 4) that is maintained by the Site Manager and reviewed by the Board of Trustees, at a minimum, on a quarterly basis. This plan should include a timeline for each Major Contract identifying time for: 1. Preparing an invitation to bid package including Specifications/Scope of Work, Special Terms and Conditions and Schedule Requirements 2. Investigating potential Sellers to be included on the Invitation to Bid list. Procedure 200 – Contracting for Good or Services Adopted: October 4, 2017 Page 4 3. Bidders to thoroughly analyze the invitation to bid and prepare a proposal/bid. When necessary this should also include time for site visits and/or pre-bid meetings. 4. Analyzing proposals and preparing a Purchase Recommendation. When necessary this should also include time for questions for each Seller and corresponding response time as well as time to meet with some or all Sellers to review their proposals. 5. Approval of the Award by the Board of Trustees at an open HOA meeting 6. Negotiation, preparation, and execution of a Contract. 7. Startup time as needed. V. Definitions and Acronyms A. Bid Closing Date – The specific date and time when all bids are to be received. B. Common Facilities – C. Contract – The agreement between the Seller and the HOA for the purchase of goods or services. D. HOA – Village Grande at English Mill Homeowners Association Inc. E. Seller - The entity providing the service, materials, or supplies. F. Site Manager- The person responsible for the day-to-day administration of the HOA. G. VGEM – Village Grande at English Mill VI. Attachments A. Exhibit 1 - Purchase Recommendation B. Exhibit 2 – Plain Language Checklist C. Exhibit 3 – Standard HOA Contract Form including Standard Terms and Conditions D. Exhibit 4 – Sample Contracting Plan VII. References A. Procedure 101 – Delegation of Authority