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Develop Emergency Procurement Policy and Procedures

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During an emergency, utilities often find it difficult to use their usual procurement procedures. Bids from contractors are usually ineffective for immediate needs and depending on the severity of a disaster incident, a utility's preselected or preferred contractors may not be operational. It is important to establish emergency procurement and purchasing policies prior to an emergency to ensure that your procurement costs are reasonable and well documented. Establishing the policies can involve your utility management, procurement/accounting staff, and emergency management/operations personnel. The written utility policy document for emergency procurement should:

  1. Establish conditions when emergency procurement is necessary,
  2. Encourage contracts for emergency services and materials to be negotiated before a disaster– if this is not possible, work with contractors you already have a relationship with,
  3. Specify situations when non-competitive procurement is acceptable, and
  4. Identify the utility management or operational positions that have authority to approve certain amounts or types of procurement arrangements.

To help develop your own emergency procurement policies and procedures, examples of such policies and procedures from East Bay Municipal Utility District and Valley Center Water District are provided in the text boxes. Such procedures should be part of a utility's emergency response plan.

Example: East Bay Municipal Utility District Policy and Procedures
EBMUD policy & procedures

Policy 7.03 (Excerpts related to costs) Emergency Preparedness/Business Continuity

"To ensure eligibility for state funding of response-related costs, all District emergency plans, procedures, and training will follow the Standardized Emergency Management System (SEMS) regulations, and coordinate with the District-wide EOP." Furthermore on authorizations for expenditures, the policy says, " When an emergency condition arises that necessitates immediate action to minimize damage and inconvenience resulting from such condition, the General Manager or successor, in consultation with the President of the Board of Directors, or successor, is authorized to enter into emergency contracts not to exceed $350,000, per contract, without bids or notice. At the next regular or special meeting of the Board of Directors following such emergency, a report shall be made to the Board of Directors summarizing all expenditures made and contracts executed in response to said emergency. Periodic reports shall be generated at the direction of the Board until the emergency is concluded."

Procedure 122 - EMERGENCY PURCHASES (PDF) (2 pp, 34K, About PDF)
PURPOSE: Provides procedures for contracts to make emergency repairs to District facilities or to purchase materials or supplies in a District-declared emergency.

Procedure 140 Supplier Selection for Materials and Supplies Purchases(PDF) (5 pp, 52K)
PURPOSE: To establish the method for supplier selection for materials and supplies purchases. Also, procedure includes lists of procurement forms as well as an authorizing acquisitions table with columns including Transaction Amount (e.g., up to $20,000), Buying Method (e.g., purchase card), Approval Level (e.g., Section Managers), Authorized District Personnel (e.g., Supervisor for Senior Engineers, Principal Management Analysts), and Steps Required (e.g., minimum 3 faxes or verbal quotes). The policy also covers authorization for option year contracts, change orders, and procurements directed by emergency response team.

During an emergency, it is important to follow your utility's emergency purchasing/procurement policies and procedures. This ensures consistency and helps with incurring reasonable expenditures during a disaster. Also, a defined emergency procurement can be critical for maximizing cost reimbursement. Detailed documentation of purchases and procedures before, during, and after an incident is important for FEMA's determination of reimbursement eligibility.

Example: Valley Center Water District Emergency Procurement Procedure
East Valley Water District

In an emergency, we give our general manager the power to, "Enter into contracts and/or agreements and to expend funds on behalf of the District, provided that such expenditures or contracts do not exceed, in total, $500,000.00." He is to try to contact the board president or other board member for prior approval if possible.

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