IV.A. Central Level Procurement Policy

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1. Guiding Principles

a. In order to provide quality, low-cost, cooperative housing, the Central Level will purchase goods and contract for services by
i. finding and selecting the “lowest responsible price” for those goods or services that are appropriately procured by the Central Level;
ii. segregating duties in the procurement process to reduce the risk of error and fraud;
iii. requiring different levels of invoice approval depending on the size of the transaction: and `
iv. requiring auditable documentation of every stage of the procurement process.
b. In addition to complying with the specific requirements set forth in the Procurement Policy, all those engaged in procurement for the BSC must follow the general BSC Business Conduct policies set forth in Section IV.G of the Policy Directory.
c. Except for specific authority granted in the Procurement Policy to make an exception to policy, only the Board of Directors has the authority to approve or ratify a purchase of goods or services that violates this policy.

2. Scope of Central-Level Procurement Authority

a. Central-Level purchasing of goods is authorized when budgeted and:
i. with respect to goods requisitioned by the Units, the aggregated orders for the good received from the Units is such that centralized ordering generates economies of scale, creating a better price for the good (for example, toilet paper); or
ii. the goods purchased are necessary to operate the Central-Level Departments (for example, copy paper); or
iii. the goods purchased are necessary to meet the Central-Level safety, habitability, maintenance, and/or contractual obligations the BSC owes to each member (for example, a pipe needed to repair an existing toilet).
b. Central-Level contracting for services is authorized when budgeted and:
i. the service is needed at multiple Units to meet safety, habitability and preventive maintenance obligations (for example, pest control); or
ii. the service is needed to meet specific Central-Level responsibilities (for example, auditing); or
iii. the service requires the specialized expertise and experience of the Central-Level staff for oversight of its desired result (for example, structural engineering or seismic renovation).
c. Goods and services not within the scope of authority of the Central Level departments to procure shall be procured directly by the responsible Unit-level managers with funds that are within the budget authority of the Unit-level management, subject to the procurement policies and practices of the individual Unit.
d. The BSC will maintain a web site providing the Units with current information about vendors and product offerings for goods and services regularly requested by the Units to assist them in making well-informed requisitions of goods and services procured through the Central-Level and well-informed procurement decisions at the Unit-level with respect to goods and services not procured by the Central-Level.
e. The Internal Affairs Committee will annually review the goods and services currently procured as well as those proposed to be procured through the Central Level and evaluate whether those goods and services should be procured at the Central Level. Based on its review, it will produce a list of authorized goods and services that shall be procured by the Central Level and shall submit that list to the Contracting Agent for vendor selection.
i. The Internal Affairs will review and revise the list of authorized services at least annually during the Fall semester.
ii. The Internal Affairs will review and revise the list of authorized products at least annually during the Spring semester. Note that this product review will not be at the level of individual items offered centrally, but rather general product categories, (e.g. coffee, tea, bread, cheese, batteries, paint, etc.). The Internal Affairs Committee will approve general product categories which it determines the Central Level should offer. The actual items offered within each category will be based on member preference and availability from the vendor which best matches the criteria for lowest responsible bid.
iii. During any period when the Internal Affairs Committee is not in session, the Operations Manager may review requests to make additions to the list of authorized products or services, using the standards for Central Level procurement authority enumerated above.

3. Vendor or Service Contractor Selection Based on Lowest Responsible Price

a. The BSC will select vendors or contractors to provide those goods or services authorized to be procured by the Central Level when it is determined that the vendor or service contractor is offering the BSC the “lowest responsible price” available.
b. The BSC will make a thorough effort to secure the “lowest” price for any given product or service by engaging in a competitive bidding or a regular online price review process. In order to reduce the number of contracts and vendor relationships under management, the BSC may determine that when a large variety of products are most feasibly secured from a single vendor (for example, office products or fresh produce), the overall pattern of price competitiveness for the products most frequently purchased shall be determinative rather than the price of a single product (for example, “post-its” or apples).
c. Criteria for determining the “responsibility” of a price offered by a vendor include whether:
1. The vendor has the skill, judgment, experience, and resources necessary to capably fulfill orders or provide services in a timely and effective manner, taking into account feedback on prior performance provided by members, Unit-level managers, and Central-Level staff.
2. The vendor’s contract and billing practices are consistent with the BSC’s invoicing and financial accounting requirements with respect to documentation and timing.
3. The vendor’s delivery services are adequate for the BSC’s needs with respect to scheduling, reliability and delivery costs.
4. The vendor demonstrates the ability to comply with BSC insurance and anti-discrimination requirements, as well as legal requirements specific to those goods and services.
5. Any other criteria for evaluating the “lowest responsible price” recommended by CFCom and adopted by the Board of Directors in a regular annual review of BSC procurement practices conducted during the Fall Semester. In no event shall the criteria for “responsibility” preclude a competitive bidding process by making a single vendor the de facto sole supplier for a given good or service.
6. The vendor meets the criteria for ethical procurement to the extent possible as determined by a reasonable, documented investigation:
i. Pro-Environment (both in the sourcing of materials for individual products and in our holistic approach to which goods we purchase/repair/recycle)
ii. Pro-Worker (by patronizing other co-ops and businesses which are worker owned/unionized)
iii. Anti-Carceral (by avoiding businesses which contract with police forces, prisons, and other agencies of governmental oppression)
c. Only the Board of Directors has the authority to approve a vendor who does not meet Board-approved criteria for providing the “lowest responsible price” or to blacklist a vendor who does meet them.
d. The frequency of vendor or service contractor price review shall be based on the volatility of the price, the ease of changing vendors, and the aggregate volume of the transactions, but shall not be less than annually.
e. The Contracting & Purchasing Agent will regularly review and update the list of approved vendors for authorized goods and services based on the “lowest responsible price” for review and approval by the Operations Manager, except that:
1. The Capital & Finance Committee will review vendor recommendations submitted by the Contracting Agent with input and advice from the Central Maintenance Supervisor for annual maintenance contracts that exceed $5,000 (such as pest control and fire alarm monitoring), professional services contracts necessary for building repair and renovation (for example, architectural and engineering), and specific construction contracts as specified under Section IV.I.1.
2. The Internal Affairs Committee will review vendor recommendations submitted by the Contracting & Purchasing Agent with input and advice from the Executive Director for Network Support Services or web site services that exceed $10,000 annually and IT equipment purchases.

4. Segregation of Duties

a. The BSC will maintain a system of checks and balances for purchase of goods and service contracts by segregating the following duties to the extent feasible within the constraints of the BSC’s organizational capacity:
1. Selecting and contracting with vendors.
2. Aggregating requisitions and placing orders.
3. Receiving, monitoring and inspecting goods and services and approving invoices.
4. Paying invoices.
b. The responsibility to select and propose contracts with vendors based on the “lowest responsible price” will reside in a Contracting & Purchasing Agent supervised by the Operations Manager. Upon selecting a vendor, the Contracting & Purchasing Agent will solicit contract documentation from the vendor, which will be reviewed and approved by the department supervisor responsible for overseeing the goods and services and then executed by the Operations Manager or Executive Director before it is returned to the vendor for signature. The Contracting & Purchasing Agent will maintain vendor contract files in alphabetical order.
c. The responsibility for reviewing requisitions to determine whether they are for goods and services that are authorized for Central-Level procurement and then aggregating orders for submission to the contracted vendor will reside in a Contracting & Purchasing Agent supervised by the Operations Manager.
d. Except for those invoices that require the further review and approval of the Operations Manager, the responsibility for approving or disapproving an invoice will reside in the Department Supervisors responsible for receiving, distributing, overseeing, directing, and monitoring the quality of those goods and services because they have the information (such as, for example, a receiving manifest or inspection of the completed work at a construction site) necessary to evaluate whether the payment in the amount requested is justified by the original contract and by the amount and quality of the goods and services actually received.
1. “Program Departments” include Central Maintenance, Central Office, and Central Warehouse.
2. The Central Warehouse Supervisor will have this responsibility for the Central Warehouse Department.
3. The Central Maintenance Supervisor will have this responsibility for the Central Maintenance Department.
4. The Central Office Bookkeeping/Office Supervisor will have this responsibility for Central Office goods and services, except that
(A). the Executive Director is responsible for IT services, HR services, auditing services, legal services, benefits contracts, insurance contracts, and other specialized professional services contracts authorized by the Board of Directors from time to time;
(B). the Member Resources Supervisor is responsible for goods and services within their approved line item budget.
(C). The Development Director is responsible for goods and services within their approved line item budget.
(D). The Housing Supervisor is responsible for goods and services within their approved line item budget for recruitment.
e. Upon approval of invoices as set forth above, the following invoices will also require the further review and approval of the Operations Manager when:
1. A single invoice greater than $2,500.
2. An invoice which when aggregated with prior invoices from the same vendor or contractor during the current fiscal year would cause the aggegrate payment during that fiscal year to exceed $10,000.
3. Any invoice that the Accounts Payable Bookkeeper or the responsible Supervisor questions for compliance with the BSC Procurement Policy.
4. The monthly statement of purchases completed using BSC credit cards.
f. The Accounts Payable Bookkeeper will maintain vendor payment files in alphabetical order, receive invoices directly from the vendors, and send the invoices to the appropriate supervisor for approval. They will pay vendors and contractors only for invoices which are within the scope of the vendor’s contract, which have been approved by the responsible supervisor (and also by the Operations Manager when required), and which include all supporting documentation. The responsibility to reconcile promptly any discrepancies between invoices, contracts, and receiving reports will reside in Accounts Payable with cooperation from the responsible supervisors.

5. Documentation and Review

a. Documentation of each step of a procurement will be maintained by the appropriate staff such that an audit trail is established so that the BSC’s independent auditor, the Executive Director or Operations Manager, or any BSC member can request and review the documentation necessary to evaluate the procurement of a specific good or service for compliance with BSC policies and procedures. Specifically, the Contracting & Purchasing Agent will maintain vendor contract files including vendor bids evaluated, approval of the vendor, and signed contracts. The Accounts Payable Bookkeeper will maintain vendor contracts payment files including purchase orders, receiving manifests or receipts, invoices, and copies of checks (or other proof of payment).
b. Documentation demonstrating vendor selection through a competitive bidding process to find the lowest responsible bid must include bids evaluated (with date, price, delivery charges, and the quantity at which that price was evaluated), which bids were rejected why, and the final selection of the vendor for the given product or service.
c. Documentation demonstrating a purchase must include requisitions by a BSC unit or central-level department, an aggregated order or purchase order, a receiving report initialed by the party receiving the good or service, an invoice signed by the program department supervisor responsible for the budget covering the purchase, and a copy of the check used to compensate the vendor.
d. Digital archiving is preferred to paper filing when feasible.
e. At least annually, the Operations Manager or a person under the supervision of the Operations Manager will randomly select 5% of BSC payments to audit for compliance with all aspects of the BSC Procurement Policy and shall report their findings to the Audit Committee at least annually.