In support of Lawrence Berkeley National Laboratory's research, the total value of purchases for the last few years has been in excess of $190 million per fiscal year. Because procurement transactions account for a significant portion of the Laboratory's annual budget, the Department of Energy and University of California exercise rigorous control over the Laboratory purchasing system. In particular, the Laboratory has a responsibility to ensure that:
Authority to make contractual commitments for the expenditure of Laboratory funds is held only by specifically delegated individuals primarily assigned to the Office of the Chief Financial Officer/Procurement and Property Department. Only these formally designated individuals may commit the Laboratory to the expenditure of funds. Purchases or commitments made by individuals without delegated procurement authority to commit the Laboratory must undergo a ratification process to determine whether the purchase would otherwise have been proper and in the best interests of the Laboratory. Individuals making commitments without delegated authority are subject to disciplinary action.
Many laws have been enacted to curb the fraud, waste, and abuse associated with unethical procurement practices at the federal level, and some apply to the Laboratory as a DOE contractor. Further, state laws and University regulations also establish criteria for ethical conduct and penalties for violations. In some cases, Laboratory employees may be held personally and/or criminally liable for actions that are not consistent with the equitable treatment of contractors and the appropriate expenditure of government dollars.
The information provided in this section encompasses general rules governing the procurement process; it is not intended to be an exhaustive guide to procurement requirements. Laboratory employees should address specific questions to Procurement. Procurement information is available on Procurement's Web page, which may be accessed from Berkeley Lab's Web page.
Over 12,000 items are available through the Laboratory storeroom system. Additional items such as office supplies and chemicals are available from just-in-time (JIT) systems agreements. The Laboratory Facilities Inventory Management/Stores groups are responsible for maintaining this stock. Berkeley Lab and Lawrence Livermore National Laboratory (LLNL) no longer share the same Stores system. A limited number of items may be requested from LLNL storerooms when needed. Stores catalogs are available from the Central Storeroom. JIT systems catalogs are available from the Procurement/JIT Systems group. Stock items may be requested by any employee or authorized nonemployee furnishing an employee number, an appropriate account number, and (when applicable) a job-order number. Certain sensitive items are subject to special authorization or other forms of issue control. Supervisors receive a monthly statement of charges against their accounts.
Supplies of low-value, high-use stock items are maintained in many of the Laboratory shops or scientific research areas for use only by those in the program or immediate area. Personal use of these supplies, as with all government property, is prohibited. See RPM §11.39 (Use of Laboratory Property and Supplies).
Equipment or materials unavailable from commercial sources may be fabricated at the Laboratory by job order or outside the Laboratory by purchase order or subcontract. See Property Management Guide §3, IV-C (Make or Buy Decisions).
The Office of the Chief Financial Officer/Budget will determine whether a fabrication should be charged to an operations equipment account. Requests for such determinations should be accompanied by a statement indicating the need for the item, a description or drawing, the desired fabrication schedule, and a cost estimate for fabrication or installation.
Subcontracts for architect-engineer services will be performed in accordance with the requirements of the University of California Procurement Policy and Standard Practices Manual. Selection of subcontractors will be based primarily on the offerer's qualifications. Cost, price, or other factors may also be considered in the selection of A/E subcontractors. With the exception of turnkey subcontracts, no subcontract for the construction of a project will be awarded to the subcontractor who designed the project or its subsidiaries or affiliates unless approved by DOE.
Subcontracts for construction will be performed in accordance with the requirements of the Manual and the State of California. In the event of a conflict between California and federal requirements, federal requirements will take precedence.
A blanket subcontract is a type of subcontract that:
Blanket subcontracts are used to avoid the administrative cost of issuing multiple subcontracts and to obtain quantity discounts when a recurring need for goods or services is anticipated. Product analysis, market analysis, and/or prior purchasing history is used to determine whether a blanket subcontract is advantageous to the Laboratory. Consideration is also given to socioeconomic goals. Blanket subcontracts are often placed by the Office of the Chief Financial Officer/Procurement for Laboratory-wide requirements. Any product or service requested by an authorized technical coordinator under a blanket subcontract is called a "release." Each blanket subcontract has a listing of Laboratory personnel authorized to make releases and their level of authority.
The Laboratory is authorized to obtain used equipment or materials from government excess material lists. EH&S must be consulted when such an acquisition involves a potential hazard. Capital equipment or property must be coordinated with the Office of the Chief Financial Officer/Property Management Group after or concurrent with these consultations. Requests for excess property are processed by Procurement.
In the event of emergency or unusual circumstances, employees are permitted to purchase low-value items not available through normal procurement methods using an LBNL travel charge card when on travel status or a personal credit card or cash when in the local area. Additionally, if the division/department requesting reimbursement is located on site, a Request for Issuance of Check may be used where normal procurement methods are not practical.
Travel Charge Card. When on travel status, employees are allowed to use their LBNL travel charge card for the purchase of low-value items needed in the course of their work. The limit on miscellaneous business expenses while on travel is determined by the traveler’s division/department based on business need. Reimbursement requires submission of a travel expense report approved by the original approver of the trip. Pre-trip approval is required. The required documentation (receipts, etc.) and limit are governed by the LBNL travel policies contained in RPM §11.08 (Travel Policy).
Personal Credit Card or Cash. In the event of time constraints caused by emergency or unusual circumstances, employees are allowed to purchase goods not available through normal procurement methods using their personal credit card or cash. Such purchases are limited to $300 and are reimbursable by filling out a “Request for Issuance of Check” (see below), which must be approved by an authorized signer on the Laboratory’s Signature Authorization System. The Request for Issuance of Check form requires the employee to certify that the expense is allowable and represents official Laboratory business. Although prior approval is not required, the form must be signed by the employee’s group leader or a higher level official. Original receipts are required.
Request for Issuance of Check. The use of Requests for Issuance of Check is restricted to on-site Laboratory locations, where other means of procurement are not possible. Requests for reimbursement for items purchased by a Laboratory employee are prepared on a Request for Issuance of Check form, which includes the appropriate authorization from the issuing division/department. The request is then submitted to the Office of the Chief Financial Officer/Accounts Payable for approval and processing.
In order to receive reimbursement, the following must apply.
When an item is purchased for reimbursement, the vendor must be advised that Berkeley Lab has been granted California State Sales permit SR CH 21-835970 (also known as a Resale Certificate) so that the tax will qualify for exemption.
Generally, procurements at the Laboratory can be initiated by:
Following is a flowchart of the Laboratory's overall procurement process:
The Office of the Chief Financial Officer/Procurement processes all purchase actions listed below:
Some commodities, such as isotopes, are subject to special treatment, Laboratory approval, and/or DOE approval before award of the subcontract. Questions regarding these types of purchases should be directed to Procurement.
For the procurement process to work most efficiently, three procurement lead times must be considered:
When establishing a delivery date or a date for services to commence, employees must remember to consider all these lead times. If the requirement is urgent, explain the emergency to the Procurement Specialist as soon as possible. If accelerated performance from a subcontractor is required, the requesting organization may have to pay for premium time, and costs may increase substantially.
Procurement lead times vary from one to three days for a telephone order and over 30 days to several months for complex and/or high-dollar subcontracts. Some subcontracts or purchase orders and some change orders over $500,000 are subject to development of an Advanced Acquisition Plan (AAP). See Paragraph (I)(1), below.
The procurement lead times given above do not include other Laboratory, University, DOE, or United States Department of Labor approvals required before subcontract award associated with the following:
Certain factors in a requisition may affect procurement lead time:
When such conditions exist, the appropriate section of the requisition or the accompanying documentation should be highlighted for better processing of the procurement.
A procurement specialist knowledgeable in the specific type of procurement requirement and the associated industry can be consulted to obtain an estimate of the subcontractor's performance time before submitting the requisition to Procurement.
The procurement process starts with good planning. The level of procurement planning is dependent on the dollar value and complexity of a proposed subcontract.
Procurement planning is an essential tool for both requisitioning organizations and the Office of the Chief Financial Officer/Procurement because it provides a method for early notification of intended requirements and an understanding of the entire procurement process from inception through completion. The information gathered at this stage can also be used for budgeting and scheduling purposes. Procurement uses such information for:
Procurement planning also enables procurement specialists to become involved in the procurement process as early as possible. This early involvement helps ensure that the work meets the mission or program needs.
Procurement planning at the Laboratory is addressed by submission of an Advanced Acquisition Plan (AAP) by the requestor for each purchase of $500,000 or more. For transactions of $500,000 or more, the program/technical division requesters also enter the acquisition information electronically into a Web-based AAP database that lists the purchasing requirements and schedule for acquisitions at various dollar levels. The database is accessible from the Procurement home page.
The AAP system requires that these transactions be entered into the AAP database at least 30 days before the time the purchase requisition will be issued to the Office of the Chief Financial Officer/Procurement. If this procedure is not followed, Procurement reserves the right to add 30 days to the Procurement Plan to compensate for the lack of advance notice. The 30-day period will be used by Procurement to review the requester's description and requirements and develop a Procurement Plan. This procedure enhances socioeconomic and competitive opportunities by providing lead time for the development of source lists from, e.g., market research, market surveys, public notices, and advertisements.
Requisitions must be submitted electronically to the Office of the Chief Financial Officer/Procurement via Peoplesoft PRP. Requisitions will be screened to ensure that they are correctly filled out and that all necessary approvals are present. An incomplete requisition will be returned to the requester with a notice of its deficiencies.
Any change modifying the quantity, funding, account number, terms, or specifications of a requisition already submitted may require either resubmittal of the requisition or, minimally, a supporting memo explaining the change.
Changes to existing or expiring subcontracts are also initiated by a purchase requisition.
Things to remember when submitting a change/modification requisition:
The authorized signatory must have authority for the dollar amount of the change.
Incomplete information may lead to delays in processing the requisition. Because delays may also result if the requisition is illegible, the requisition should be typed whenever possible. The following fields on the requisition form must be completed by the requisitioning organization:
Always provide the name and telephone number of the individual technically qualified to answer questions relating to the requisition.
The program/technical division requester must review purchases for potential hazards and select one or more of the nine appropriate choices indicated on the requisition. The Office of the Chief Financial Officer/Procurement will not process the requisition until this information is obtained.
The requisition hazard review box states the hazard(s) as follows:
Every individual performing work at the Laboratory or at one of its off-site locations is responsible for understanding the properties of the hazards with which they will work. Before ordering such hazards, the employee should review all requirements mandated in the Laboratory Health and Safety Manual (LBNL/PUB-3000), Chemical Hygiene and Safety Plan (CHSP) (LBNL/PUB-5341), and Facilities Notebook. Each department is responsible for ensuring that the quality assurance, LBNL/PUB-3000, and CHSP requirements are met in handling all materials.
Beyond Laboratory procurement, the purchase of many commodities and services must be approved by various organizations (e.g., the Office of the Chief Financial Officer/Budget, OCR, EH&S). These approvals should be obtained before forwarding the requisition to the Office of the Chief Financial Officer/Procurement. Any requisition that does not have the appropriate approvals will be returned to the requisitioning division.
Adequately describing the purchase requirement helps ensure timely requisition processing. Purchase requirements must be clearly defined on the requisition or an attached specification, Scope of Work, or Statement of Work. Items should be identified by generic noun ("personal computer"), defining adjective, and any other useful description. List the model number and manufacturer when applicable with use of the phrase "or equal" to allow for fair and effective competition if another brand of equal capability can be accepted. The Laboratory's minimum requirements must be described in detail to fairly evaluate any offers received for that product or service.
Before solicitation, the Laboratory should have an estimate of the proper price level or value of the supplies or services to be purchased, i.e., the estimated price of the subcontract. It is generally the requester's responsibility to develop these estimates. Estimates can range from simple budgetary estimates to complex estimates based on the requester's assessment of the labor, materials, and other quantitative elements of performance.
The requester must identify any quality requirements for the subcontract on the purchase requisition. The need for, type of, and extent of quality requirements to be included in a specification or Statement of Work depend on the particular circumstances and may range from inspection at the time of acceptance to a requirement for a subcontractor's implementation of a comprehensive quality assurance program.
Subcontract quality requirements fall into three general categories, depending on the extent of quality assurance the Laboratory needs for the acquisition involved:
In identifying quality requirements in the Statement of Work, the requester should consider:
For further information or assistance in assessing how to treat quality-assurance requirements in Statements of Work and/or specifications, contact the Laboratory's Office of Institutional Assurance (OIA).
Government-furnished property (GFP) is property owned by the government (almost everything at the Laboratory is government property) and made available to a subcontractor for its use during performance of work under a specific subcontract with the Laboratory. The term includes government-furnished equipment, government-furnished supplies, and property that a subcontractor acquires or otherwise provides under a subcontract (subcontractor-acquired property (SAP)).
If GFP will be involved in performance of the desired work, it must be identified in the purchase request. If the specific property can be identified at the beginning of the procurement process, the requester must provide:
Because the Laboratory is responsible to DOE under the DOE/LBNL Contract for managing all government property in its possession, procurement actions involving GFP must be coordinated with the Office of the Chief Financial Officer/Property Management Group throughout the process, from requisition to subcontract closeout.
An organizational conflict of interest (OCI) means that a relationship or situation exists in which an offerer has past, present, or currently planned interests that relate to the work to be performed under a Laboratory subcontract and that the conflict may reasonably:
Requisitions and Statements of Work will be reviewed in the Office of the Chief Financial Officer/Procurement to make an initial determination of whether they constitute a potential OCI situation. If the answer is "yes," the requester must fill out a Pre-Procurement Organizational Conflict of Interest Fact Sheet to aid in evaluating the situation. If, after evaluation, the procurement is found not to raise OCI concerns, the issue will be put to rest and the action will proceed.
If, after evaluation, the procurement is found to raise an OCI concern and the procurement cannot be modified to remove any problem aspects of the Statement of Work, the solicitation must include an OCI clause and require the offerers to respond with information for Laboratory and DOE evaluation.
The responses must be evaluated by both Procurement and DOE, but DOE makes the decision on whether:
Evaluation factors should be aimed at ascertaining the distinctions among the offerers on significant aspects of the work to be performed rather than at identifying the relatively unimportant differences to be expected when multiple offers are received. The evaluation criteria will be stated in the solicitation to explain to potential offerers how the Laboratory will select the subcontractor.
After the closing date for receipt of offers, the requester will participate in evaluating the offers received against the evaluation factors stated in the solicitation. Once the due date for receipt of offers passes and evaluation of offers starts, the evaluation criteria cannot be changed. Offers must be evaluated in accordance with the criteria set out in the solicitation.
In some cases, notably in construction, the Laboratory does not negotiate the initial award, but instead relies on a formal bidding process in which discussion is not used. The low-priced, responsive, and responsible offer wins without further discussion.
Although the procurement specialist is responsible for preparing and conducting negotiations, the requester has an important role to play in evaluating technical proposals, analyzing cost elements, and otherwise advising on the Laboratory's negotiation position.
Depending on what is being purchased, the procurement specialist may request
the assistance of the requester or technical coordinator in performing technical
review and technical analysis, as required.
During technical analysis, at least the following items should be considered:
A draft Statement of Work and suggested selection criteria are provided
by the responsible program/technical division for use by the Office
of the Chief Financial Officer/Procurement in preparing the solicitation. These documents are
received by the committee and reviewed and approved by the Procurement Manager.
After receipt of the offerers' proposals, the selection committee performs
the evaluations and prepares a written report of its activities and decisions,
including award recommendations. This report is taken under consideration
by the procurement specialist, technical coordinator, and procurement official
who will authorize the award. The procurement specialist then negotiates
any remaining issues with the selected firm.
Discussions with offerers are particularly sensitive during solicitation, evaluation of offers, and negotiation. Technical coordinators or requesters should not have separate discussions or negotiations with offerers.
The Laboratory is required to treat all potential subcontractors fairly and equitably. When an offerer or subcontractor believes that it has not been so treated, that subcontractor has the option of filing a protest directly with the Office of the Chief Financial Officer/Procurement, the University, or DOE. A protest is a very powerful action. It can hold up work on a subcontract that has already been awarded, or it can hold up any further action on a subcontract that is under negotiation but has not yet been awarded.
The following are some situations that could cause a protest:
When there is doubt about the propriety or consequences of an action during the purchasing process, a procurement specialist should be contacted for advice.
A procurement is noncompetitive when it is entered or proposed to be entered after solicitation and negotiation with only one potential vendor/subcontractor. The Laboratory uses the terms "sole source" and "noncompetitive" synonymously in describing the procurement process followed in such cases.
Generally, a noncompetitive action may be justified for the following reasons:
A formal justification must be provided for sole-source purchases greater than $100,000 and for all intra-University transactions in excess of $25,000. The Justification for Sole Source Procurement or Intra-University Transaction form, obtained from the Office of the Chief Financial Officer/Procurement, must be used for documenting sole-source and IUT actions.
The Laboratory must ensure that subcontracting is consistent with efficient performance of the program mission and the nature of supplies and services being purchased. Consequently, noncompetitive (sole-source) procurements should be used only when no other reasonable alternatives exist.
Subcontractors are required to take all reasonable precautions at Laboratory sites to protect the environment, health, and safety of all persons involved, and to comply with all applicable environment, health, and safety regulations and requirements of the Laboratory and DOE. The Laboratory may stop the particular work any time a subcontractor fails to comply.
The Laboratory requires subcontractors to maintain insurance:
The level of insurance required varies depending on the relative hazard of the work being done and the likelihood of loss. Some operations are more hazardous than others. Some subcontracts are not hazardous, but the possibility of loss may be significant.
As proof of insurance, the subcontractor must provide an industry-standard certificate of insurance before working on site. Except for professional liability and workers' compensation insurance, the certificate of insurance must name the Regents of the University of California and the United States Department of Energy as additional insureds.
The Laboratory risk manager may waive, revise the limits of, or prescribe the types and levels of insurance required for particular types of work.
No subcontractor may be indemnified unless prior approval is obtained from DOE-HQ and the Regents of the University of California. Laboratory counsel should be consulted on any request by a subcontractor for indemnification.
Under the DOE/LBNL Contract, the Laboratory is required to include in its subcontracts provisions pertaining to patents, data, and copyrights. These provisions basically concern such matters as patent rights, rights to data (including copyrights), and patent and copyright infringement.
Requesters/technical coordinators are expected to ensure that the subcontractor's obligations in these matters (e.g., reporting inventions, reporting notices or claims of infringement, and securing required DOE approvals) are properly fulfilled. If the subcontractor does not meet these obligations, the technical coordinator is expected to notify the Office of the Chief Financial Officer/Procurement immediately so that appropriate timely action may be taken. See RPM §5.03 (Patents).
The Laboratory must obtain DOE approval for each request for foreign travel by a subcontractor before the travel. "Foreign travel" means any travel outside Canada and the United States and its territories and possessions.
The Laboratory generally does not pay California sales tax, because most of our purchases are considered to be "for resale" to the government. When Laboratory employees have a petty cash, low-value, or Procurement Card purchase, they must advise the vendor that the Laboratory has been granted California State Sales Permit SR CHA 21-835970, also known as a Resale Certificate.
All charter and lease agreements between aviation service subcontractors and the Laboratory must adhere to the safety policies and procedures of DOE Order 440.2B (Aviation Safety) or its successor order.
The Office of the Chief Financial Officer/Procurement negotiates, awards, and issues subcontracts to meet program requirements for goods and services. This activity, however, is only the beginning of the process. Once the subcontract is awarded and issued, the subcontract must be administered to ensure that the Laboratory gets what was intended.
Monitoring performance is a common responsibility of the procurement specialist and the requester. Performance must be monitored for, e.g., delays, schedule slips, quality deficiencies, and financial status. The program/technical divisions must advise the assigned procurement specialist of any indication that performance is not what the Laboratory expected.
The Laboratory must develop a clear and obvious record of all actions taken by the Laboratory or the subcontractor. A complete documentation record can assist in the resolution of problems at a later date or provide information for the evaluation of similar projects or problems in the future. Problems need to be identified and resolved before legal issues become unavoidable.
Only the procurement specialist is authorized to modify subcontract terms or take any action to enter into a change order or other contractual commitment on the part of the Laboratory. Although under some subcontracts it is normal for the requester to have ongoing technical interchange with the subcontractor during performance, no alternation of subcontract requirements may be authorized during these discussions.
Certifiers must verify that services were rendered as required by the subcontract before a subcontractor's invoice can be processed for payment by the Office of the Chief Financial Officer/Accounts Payable.
When subcontract performance is physically complete, the requester may be contacted to verify, in writing, that all work and/or deliverables are satisfactory. The requester may also be asked to identify all government-furnished property, subcontractor-acquired property, drawings, designs, specifications, and publications that require disposition before subcontract closeout.
Many subcontracts can be closed when the procurement specialist receives evidence of the receipt of goods or services and/or evidence of final payment.
Laboratory employees are reminded that only authorized Office of the Chief Financial Officer/Procurement and Property Department personnel or others who have been delegated low-value, purchase-order authority, including Procurement Card authority, by the Procurement and Property Manager may commit the Laboratory to expenditures for goods or services.
An individual who is not an authorized designee and who purchases goods or services may be responsible for payment of charges incurred and will be subject to disciplinary action.
This section briefly highlights Laboratory policies and procedures pertinent
to obtaining goods and services. The University of California Laboratory
Procurement Policy and Standard Practices Manual defines these policies
and procedures in detail. Copies of that manual are available on the Office
of the Chief Financial Officer/Procurement and Property Management Web site.