Purpose of Department Procurement Policies and Procedures - 101.1

Statutory Requirement

Public Contract Code (PCC), Sections 10333 and 12100 grants the DGS the authority to delegate purchasing authority to departments based upon certain requirements as discussed in this manual.  One critical requirement that best demonstrates a department's understanding of and its ability to manage and maintain a purchasing authority program is to establish and maintain current procurement policies and procedures in sufficient detail to support the department's approved purchasing authority for each type, category/sub-category and dollar threshold authorized by the DGS.

Additionally, departments' purchasing authority policies and procedures must also provide instruction to department users on other related purchasing activities such as receiving goods and service, supplier payment, reporting contractor performance, reporting requirements, and ensuring that departments contracting personnel are free from conflict of interest.

Purpose

The purpose of requiring a department’s purchasing authority policy and procedure manual, hereafter, referenced as a procurement manual, is to familiarize department employees (whether a buyer or an employee involved in an aspect of the department's purchasing activities) with department purchasing practices in a clear, common understanding of goals, benefits and policies as well as what the department expects with regard to performance and conduct.  The results provide an overall description of the department's purchasing program.

Policy vs. Procedure

Policies are the business rules and guidelines of a department that ensure consistency and compliance with the department’s strategic direction.  Policies are the guidelines under which Procedures are developed.  Procedures define the specific instructions necessary to perform a task or portion of a Process.  Procedures can take the form of a work instruction, a desk top Procedure, a quick reference guide, or a more detailed Procedure.

A department’s procurement manual should include both purchasing policies and procedures.  The policy section of the manual should discuss the purposes and objectives of the department's purchasing program while the procedure section establishes and describes, using considerable detail, and the internal procedures of the purchasing program.

In simple terms, policy is "what" the department does operationally, and procedures are "how" it intends to carry out that policy.

Definitions

Policy: A written statement that clearly indicates the position and values of the department on a given subject.  It contains rules and tells one what to do.

Procedure: A written set of instructions that describe the approved and recommended steps for a particular act or sequence of acts.  It tells one how to perform a set of tasks in relationship to the department's policies on conducting business.

Example #1:

Policy: Pursuant to Executive Orders D-37-01and D-43-01 the Department of Motor Vehicles shall aggressively pursue an annual 25 percent certified Small Business and 3 percent Disabled Veteran business Enterprise participation level in departmental purchasing activities.

Procedure: Buyers will consult the department's Small Business Advocate to assist in locating certified SB or DVBE suppliers prior to preparing any type of solicitation document. 

The table below identifies common distinctions between policy and procedures:

Policies

Widespread application Changes less frequently Usually expressed in broad terms Statements of "what" and/or "why" Answers major issue(s)

Procedures

Narrow application Prone to change Often stated in detail Statements of "how", "when", and/or sometime "who" Describes in detail the process