The Virginia Public Procurement Act
The Virginia PublicProcurement ActA Guide for Public Officials2014 EditionL ocal Governments Working Together Since 1905
Virginia Municipal LeagueThe Virginia PublicProcurement Act:A Guide for Public OfficialsBy Lisa A. Robertson, Chief Deputy City Attorney, Charlottesville, VirginiaRevised 9/22/20142014 Virginia Public Procurement Act1
Table of ContentsPreface.3The Virginia Public Procurement Act.3What Local Official is Responsible for Compliance with VPPA?.3What Transactions Are Covered?.4What Constitutes a Public Contract?.4What Types of Contractor Selection Procedures Are Required and Authorized?.41. Competitive Sealed Bidding—ITB.42. Competitive Negotiation—RFP.53. Job Order Contracting .64. Design-build and Construction Management Procurements.65. Cooperative Procurement.76. Small Purchase Procedures.77. Reverse auctioning.8In What Circumstances May Contracts be Awarded, or Purchases Made, with Little or No Competition?.81. Emergency and Sole-Source Contracts.82. Public Auction Sale.8What Public Contracts Are Exempt from VPPA Requirements?.8What Vendors Must be Included? May Vendors be Excluded?.91. Debarment.92. Prequalification.93. Small Businesses and Minority-Owned Businesses. 104. Preferences. 105. Licensing Requirements, Construction Contracts. 10What Dispute Resolution Procedures Are Specified by VPPA?. 111. Protests of Contract Awards. 112. Appeals of “Non-Responsibility” Determinations; appeals of protest decisions and disputed claims. 113. Legal Action. 114. Administrative Appeals. 115. Disputes Arising During Performance of a Contract. 12What Public Records Requirements Apply to Procurements?. 12Ethics in Public Contracting. 13Conclusion. 13Text; Virginia Public Procurement Act. 1622014 Virginia Public Procurement Act
The Virginia Public Procurement ActA Guide for Local OfficialsPrefaceThe purpose of this publication is to give an overview of the Virginia Public Procurement Act and itsapplication to local public bodies, to identify sourcesof procurement information, and to provide sampledocuments that may be of use to local officials whenconducting a procurement process. References to theVirginia Code are provided to assist local officials innavigating the VPPA.The Virginia Municipal League thanks Lisa Robertson, Chief Deputy City Attorney for Charlottesvillefor writing this guide.The Virginia Public Procurement ActThe Virginia Public Procurement Act (VPPA) is setforth within §§2.2-4300 et seq. of the Code of Virginia.VPPA articulates Virginia’s public policy relating tothe purchase of goods and services by public bodies.The General Assembly specifies the following ends tobe served by VPPA: That public bodies obtain high quality goodsand services at reasonable cost; That all procurement procedures be conductedin a fair and impartial manner, withavoidance of any impropriety or appearance ofimpropriety; and That all qualified vendors have access to publicbusiness and that no vendor be arbitrarily orcapriciously excluded. § 2.2-4300(C).The Commonwealth of Virginia has established acentralized electronic procurement program. knownas eVA. Through revisions to VPPA, the GeneralAssembly has strongly encouraged local participationin this program. The Virginia Department of GeneralServices (DGS) sponsors the program, through itsDivision of Purchases and Supply. More informationabout this Division of DGS can be found at: tabid/418/Default.aspx.The eVA webpage is located at: www.eva.virginia.gov.These two sites, together, will be referred simplyas “eVA” for the remainder of this publication. eVAprovides free access to ITBs, RFPs, and sample speci-fications and forms used by the state and other publicbodies. Every public body and its purchasing agentshould utilize this resource.What Local Official is Responsiblefor Compliance with VPPA?The requirements of VPPA may be implementedby ordinances, resolutions, or regulations enacted bya public body and administered by authorized publicofficials or employees. § 2.2-4300.The term “public body” refers to counties, cities,and towns, their departments and officials; and alsorefers to any other body, agency, office, department,authority, commission, committee, institution, board,or political subdivision. Airport authorities and commissions, jail authorities and commissions, MPOs andplanning district commissions that operate exclusivelyin Virginia, water and sewer authorities, school boards,and constitutional offices/officers are all examples of“public bodies”. § 2.2-4301.Many public bodies designate an employee, knownas a “purchasing agent,” to exercise day-to-day responsibility for procurement, including preparation ofdeterminations, solicitations, standardized forms, andother record-keeping duties. Regulations and policiesdeveloped by the purchasing agent should be approvedby the public body itself. A purchasing agent is typically delegated broad authority to make decisions inaccordance with the guidelines set forth within thepublic body’s ordinances, resolutions, regulations, andpolicies. § 15.2-1235.Each public body’s approach to implementingVPPA and to approving contracts will reflect its ownfinancial, political, and administrative structure. Forexample, the governing board of a public body mayreserve itself the right to authorize initiation of certainprocurement transactions and/or the final authority toapprove large-dollar contracts. Also, prior to approvalof a contract, a public body may require its attorneyto approve the form of contract document(s) to meetthe requirement that all contracts must be approvedby a qualified attorney. § 15.2-1237. However, beforeapproving any contract, a public body must require itsfinancial officer to certify that funds are available andappropriated to cover contract costs. § 15.2-1238.2014 Virginia Public Procurement Act3
What Transactions Are Covered?The requirements of the VPPA apply to public contracts with any non-governmental contractor, for theacquisition (by purchase or lease) of goods and services,including, without limitation: insurance and construction. § 2.2-4303. Notice that neither purchasing landnor hiring employees is subject to VPPA.“Goods” means all material, equipment, supplies,printing and automated data processing hardwareand software.“Services” means any work performed by an independent contractor wherein the service rendereddoes not consist primarily of acquisition of equipment or materials, or the rental of equipment,material and supplies.“Construction” means building, altering, repairing,improving or demolishing any structure, buildingor highway, and any draining, dredging, excavation, grading or similar work upon real property.§ 2.2-4301.The requirements of VPPA apply regardless ofwhether the consideration (benefit) supporting thetransaction is monetary or non-monetary, and regardless of whether a public body, a contractor, or somethird party is providing the consideration. § 2.24300(B). For example, if a public body enters into anagreement to allow a vendor to sell hot dogs at a publicpark, in return for a concession fee paid to the publicbody, that arrangement should go through a procurement process. If a citizen offers to donate money to paycosts of purchasing new computers for city council, thecity must comply with VPPA in purchasing the newcomputers.What Constitutes a Public Contract?A public contract means any agreement betweena public body and a nongovernmental source. VPPAdoes not apply to contracts between two public bodies, as “public body” is defined within VPPA. A publicbody may not avoid the requirements of competitiveprocurement by using a purchase order instead of aformal written agreement, by placing oral orders, orby ordering “on account” with a particular vendor.§ 2.2-4301.42014 Virginia Public Procurement ActWhat Types of Contractor SelectionProcedures Are Required andAuthorized?Unless otherwise authorized by law, public contractsmay be awarded only after completion of a competitivesealed bidding (ITB) or competitive negotiation (RFP)process. § 2.2-4303(A).1. Competitive Sealed Bidding – ITBCompetitive sealed bidding is a method of contractor selection in which price is the primary determinative factor. Bidders review a set of specificationsand offer to provide goods and services for a specificprice. The price is delivered in a sealed envelope to beopened publicly on a specific date. The contractor whohas submitted the lowest price may receive the contract. § 2.2-4302.1. Competitive sealed bidding is thepreferred process specified by FPPA for selection of acontractor to provide goods, non-professional services,and insurance. Construction may be procured onlyby competitive sealed bidding, with limited exceptions.§ 2.2-4303(D).To commence a competitive sealed bidding process,the public body must issue a written Invitation to Bid(also commonly referred to as “Invitation for Bids”, thisinvitation will hereafter be referred to as the “ITB”)containing specifications sufficiently detailed to supportaward of a contract based on prices. Terms and conditions applicable to the procurement, along with anymandatory qualifications required of potential contractors, must be set forth within an ITB. An ITB shouldreference any mandatory requirements (e.g., bonds; required licenses and certifications; insurance, etc.) whichmay affect a vendor’s pricing. An ITB may also includecriteria for life-cycle costing; value analysis; and otherspecifications (such as inspection, testing, quality,workmanship, delivery and suitability for a particularpurpose). Standards should be given as to what level ofinformation or evidence must be included within a bidin order for it the bid to be deemed responsive to therequirements and specifications. § 2.2-4302.1(1) & (4).Samples of written specifications for various goodsand services can be found on the DGS website, www.dgs.virginia.gov and within ITB documents posted oneVA.Public notice of the ITB must be given at least 10days prior to the date set for receipt of bids. In the “olddays” public bodies were required to physically postthis notice in a public area. Now the notice is requiredto be posted electronically—either on eVA or other appropriate websites, which may include the public body’s
own website. The public notice may also be publishedby newspaper, but this is not mandatory for an ITB.Bids may be solicited directly from potential contractors, and should include businesses selected from a listpublished by the Va. Dept. of Minority Business Enterprise. § 2.2-4302.1(2). Each ITB must specify the manner in which public notice will be given of an award, ordecision to award, any contract resulting from the ITB.§ 2.2-4360(A).Bidders responding to an ITB must submit the bidsin sealed envelopes, and the ITB must specify a date,time, and location at which all bids received will bepublicly opened and announced. At the public bidopening, a public body is not required to immediatelyaward a contract, but it must identify the apparent lowbidder. The public body may then take time to evaluate the bids based on the ITB’s requirements, and mayconduct inquiries to determine whether the apparentlow bidder is both “responsive” and “responsible.”§ 2.2-4302.1(3) & (5).The term “responsive” refers to whether abidder has submitted a bid that conforms in allmaterial respects to the requirements and specifications set forth in the ITB. An informality is aminor defect or variation of a bid from the exactrequirements of the ITB, but which does not affectthe price, quality, quantity, or delivery schedule.A public body may waive any informality. § 2.24301.The term “responsible” refers to a bidder whohas the ability, in all respects, to perform thecontract requirements, and the moral and business integrity and reliability that will assure goodfaith performance of the contract requirements.§ 2.2-4301.A public body must give an apparent low bidderadvance written notice before making a determinationof non-responsibility and must allow an opportunity forthe bidder to respond with rebuttal information beforemoving to the next low bidder. § 2.2-4359(A)(1). Thepublic body’s determination cannot be arbitrary—itmust be an honest exercise of discretion, based on therequirements of the ITB, and consistent with state law.§ 2.2-4359(B).After bid-opening, a public body may not changethe terms or specifications of the ITB, however, it maywaive a minor defect or variation of a bid from therequirements of the ITB (known as an “informality”)if the defect/variation does not affect the price, quality,quantity, or delivery schedule for the goods or servicesbeing procured. §§ 2.2-4302.1 & 2.2-4301.A public body may not negotiate with individualbidders. A responsive bid from the lowest responsiblebidder must be accepted as submitted, unless the entireITB is cancelled. One exception to this rule: if the bidfrom the lowest responsive and responsible bidder exceeds available funds, a public body may negotiate withthat bidder to obtain a contract price within availablefunds—but only if the ITB, when issued, identified theconditions and procedures under which the negotiationwould be conducted. § 2.2-4318.The public body may award a contract to the lowestbidder who is both responsive and responsible. If anaward will be made, public notice must be given in themanner prescribed in the ITB. § 2.2-4360(A).Alternatively, the public body may cancel or reject the entire ITB, or any and all bids received. Thereasons for cancellation or rejection must be set forth inwriting, and shall be made a part of the contract file.A public body may not cancel or reject any ITB or bid,simply to avoid contracting with a particular bidder.§ 2.2-4319(A).2. Competitive Negotiation – RFPCompetitive negotiation is a method of contractor selection in which a public body issues a writtenRequest for Proposals (“RFP”), describing the goods orservices proposed to be procured, and identifying thefactors that the locality will use to evaluate the relative merits of proposals received from persons or firms(“offerors”). § 2.2-4302.2(A)(1). The RFP must specifya deadline for submission of proposals; however, sealedenvelopes are not required, and the public body is notrequired to publicly open or announce the proposals.Contracts for “professional services,” (e.g., accounting, actuarial, architect and engineering services) mustbe procured by competitive negotiation. § 2.2-4303(B).Other types of contracts may be procured by RFP,but only after a determination made in writing by apublic body that an ITB is not either practicable or fiscally advantageous. §§ 2.2-4303(C) & (D).Public notice of an RFP must be given at least 10days prior to the deadline for receipt of proposals. Thenotice must be posted electronically—either on eVAor other appropriate websites, which may include thepublic body’s own website. A public body must alsopublish the notice by newspaper. Proposals may also besolicited directly from potential contractors. Additionalsolicitations must include businesses selected from a listpublished by the state Department of Small Businessand Supplier Diversity. § 2.2-4302.2(A)(2). The RFPmust also specify the manner in which public notice2014 Virginia Public Procurement Act5
will be given of a contract award, or decision to award.§ 2.2-4360(A).An RFP must specify the evaluation factors that thepublic body will use to compare proposals received.§ 2.2-4302.2(A)(1). With RFPs for non-professionalservices, an offeror may be required to include pricinginformation in its initial proposal. § 2.2-4302.2(A)(3).RFPs for professional services may not ask for estimates of man-hours or price/cost of services as part ofan offeror’s initial proposal. § 2.2-4302.2(A)(4).Proposals received must then be evaluated based onfactors specified in the RFP, including price, if statedin the RFP, and then a public body must implement aprocess of negotiations with potential contractors. Therequired negotiations process differs, according to theitem being procured:Goods, non-professional services, andinsuranceFollowing a public body’s determination that anITB is not practical or fiscally advantageous, an RFPmay b
2014 Virginia Public Procurement Act 3 The Virginia Public Procurement Act A Guide for Local Officials Preface The purpose of this publication is to give an over-view of the Virginia Public Procurement Act and its application to local public bodies, to identify sources of procurement information, and to provide sample
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