Dallas Area Rapid Transit Business Opportunity Forum Procurement and Corporate Card Overview Adam Nicholas Assistant Vice President, Procurement April 17, 2018

Why do we need Procurement? How come it takes so long? I know who I want. Why do I need bids? What do you expect? It’s low bid. Do we have to award to the low bidder? We can lowball the contract and earn it back with claims! I’ll bet you folks in procurement get really cool gifts!

Public Procurement Objectives Ensure public confidence Ensure fair and equitable treatment Foster effective full and open competition Provide increased savings Maximize purchasing power Satisfy agency requirements Courtesy, impartiality, and integrity Strive for efficiency and effectiveness

Procurement Responsibilities Procurement means buying, renting, leasing or otherwise acquiring any property, services, or construction Authority delegated by Executive Director and approved by Board: Award contracts Modify or change contracts Terminate contracts Some exemptions provided

Procurement Authority DPR 2-101(2) – No contract, modification, change order, or commitment shall be made unless it is… In writing Executed by a representative of the authority acting within the scope of his actual authority Authority delegated by warrant to Executive Director and to DART Contracting Officers Discuss difference between budget and contracting authority. DART executives have budget authority… they can sign a requisition but they cannot award a contract.

Annual Spend (FY2017) 140 contracts awarded - $110 million 256 blanket purchase orders - $7.8 million 3,389 purchase orders - $ 13.7 million Credit card transactions - $6.2 million 411 credit card users 423 active contracts - $1.25 Billion 36% of Spend to DMWBE - $59,273,329

Corporate Card at a Glance FY16 ~398 Active Card Holders/~100 Approvers FY17 413/106 2016 Annual Spend ~6.2M, 2017 $6.16M The Corporate Card Program supplements DART’s procurement process and facilitates payment for business travel. It authorizes approved DART employees to make purchases so that they may address their department’s needs in a timely manner. The Corporate Card Program establishes purchasing limits for all cardholders. The Corporate Card is to be used for authorized DART purchases only. Fraudulent or unauthorized card use may result in temporary or permanent cancellation of the cardholder’s privileges and disciplinary actions up to and including termination and legal action. Reasonable attempts should be made to buy from vendors that provide discounts and special prices to DART. The merchant at the point of sale enforces purchasing limits. Purchasing limits include card limits and merchant types from whom purchases can be made. Cardholders are responsible for immediately reporting any fraudulent use or misapplication of the Corporate Card to the Corporate Card Administrator.

Pre-Set Limits Single Purchase Limit: The limit established for each account that no single transaction/purchase may exceed.   Spending Limit Per Cycle: The budgetary spending limit imposed by the Approving Official on cumulative Cardholder purchases in a given billing cycle.   Merchant Category Code(s): Codes established on the account which define the type of merchant from which a Cardholder may purchase certain types of goods and/or services. A "single purchase" includes all items purchased in a single transaction. The total cumulative dollar value of Cardholder purchases for any billing cycle shall not exceed this limit. Corporate Card presented to a merchant with a blocked MCC will be rejected for that purchase.

Split Purchases DART Corporate Credit Card Manual Purchases shall not exceed the single purchase limit (or other pre- approved limit). A single purchase may include multiple items and still be within the single purchase limit. Purchases shall not be split to stay within the single purchase limit. Cardholders are required to know the authorized limits of their card. An authorized exception to this provision would be in cases where extended business travel might result in a hotel bill in excess of the single purchase limit. If the dollar amount of a purchase will exceed the single purchase limit, a Procurement Requisition (PR) shall be used instead of the DART Corporate Card.

Split Purchases Cont. Card holder (CH) can not break down requirements aggregating more than the micro-purchase threshold into several purchases that are less than the applicable threshold merely to avoid any requirement that applies to purchases exceeding the micro-purchase threshold. Separating a requirement that exceeds a CH’s single purchase limit or threshold into two or more buys as a means of getting around the CH’s purchase limit. DART CHs shall not fragment/split purchases that exceed the CH’s limit or threshold, as means to use the purchase card. To do so is a violation of DART’s Corporate Card policy and Procurement law.

Key Take Aways Do not split purchases. If in doubt – call Procurement Do not purchase the following items without prior approval Stock Items – Materials Management IT Parts and Equipment – Information Technology Promotional Items – Marketing Furniture – Facility Services Do not purchase items which are currently on contract or a BPO DART’s Procurement Department has procedures in place to quickly fulfill emergency/urgent requests.

Questions?