Purchasing and Procurement

To assure compliance with federal (especially OMB 2 CFR, Part 200, of which the agency took the extension to 7/1/18), State, health department regulations and District Board by-laws regarding purchases, the following policy is applicable to all purchases.  Purchasing guidelines are outlined in 902 KAR 8:170 Section 6: Purchasing Policies and also in specific directives from Federal OMB 2 CFR, Part 200 and parts of  KRS 424 and the CHFS.

All procurements must adhere to free and open competition.  Source documentation must be available to determine open competition, the reasonableness, the allowability and allocation of costs.

These processes are to be followed by all NKY Health staff and purchase functions are to be done by those assigned.  The Purchasing staff will do ALL purchasing UNLESS she/he has communicated otherwise on a case-by-case basis.  

These procedures are for purchases not made via contract/MOA or petty cash.  

NKY Health will NOT make unnecessary or duplicate purchases of goods or services.  Additionally, NKY Health will avoid doing business with entities declared ineligible to receive Federal contracts due to debarment.

Effective resource allocation during an unplanned event is paramount for a successful response effort to a public health concern. NKY Health is responsible for taking actions to help protect the entire population that it serves, while also focusing enhanced measures on sub-populations that are either more likely to be affected by the nature of the event or are more likely to have barriers restricting their ability to secure related resources. To help ensure a fair and reasoned approach to resource allocation during an unplanned event, NKY Health leadership will take the following steps:

1. Review and investigate the nature of the unplanned event. When possible, this includes determination of the event’s cause, current and potential breadth, potential duration, likely population at risk (entire population or sub-sets), expected degree of impact, and sources of additional information.

2. Identify and enact NKY Health staff who will have a role in the response. If necessary, identify outside officials, agencies, organizations, and other community partners that may be needed or beneficial to response efforts. Initiate contacts and plan with such partners as appropriate.

3. In planning for resource allocation measures, consideration will be placed on identifying populations that may be at a higher health risk. This may include certain age groups, existing health conditions, socioeconomic status, race or ethnicity, physical mobility, culture, housing stability, or other social determinants that could impact their ability to receive resources during an unplanned event. NKY Health will utilize its knowledge, clients, and existing collaborators to identify those at greater risk or need, work with community partners within those populations, and take measures through these partnerships to reach and provide resource allocations in a manner most effective to do so.

4. Existing available resources will be utilized in initial response efforts, and additional resources will be secured as needed. This will be through means such as local and regional assets, requests through state and federal mechanisms, and purchases from vendors.

5. Resources will be allocated based on a situational assessment. Those deemed to be at greatest risk will be prioritized. Populations at higher health risks and those identified with additional barriers to resources will be targeted for increased access and consideration. Examples may include in-home visits or deliveries to those homebound or appropriate transportation to resource sites; providing hotel rooms to individuals who do not have housing but are in need of quarantine or treatment; outreach through churches and organizations to host events within the community they serve; utilizing known and trusted community contacts within specific populations; partnering with members of populations who can speak directly with those who have limited English proficiency; and a range of other measures to help reach those who otherwise may be less likely to receive or seek services. Established or response-initiated work groups of pertinent community partners will be implemented as needed to provide insight and deliver information and resources across populations.

To purchase an item, follow these steps:

1. Purchasing Specialist will complete an Analysis of Cost (essentially a cost estimate) for item and document on Purchase Order Request (PO) form.

2. Expenditure for a single type of good or service not covered by contract policies requires a PO request and must adhere to the following: 

   • If < $3,000, any source of supply may be used as long as agency gets maximum value. 

   • If $3,000-$39,999, three quotes must be obtained and the lowest and best quote selected.

   • If $40,000 or more, ads for bids will be made in accordance with KRS 424.110-424.150.

   • For a State price contract, competitive bidding regulations shall not apply.

   • Accounting staff will determine whether or not the expenditure is for a single type of good or service and whether the purchasing or contract rules apply.

3. Employee completes PO request located in Division PO folder.  Ensure there is adequate lead time for your purchase request to be processed.  Refer to Employee Instructions in the PO Request form.

4. Program Supervisor, if required, and then the Division Director approves the request.

5. Accounting Supervisor or designee certifies that funds are available.

6. Purchasing staff places the order. See Employee Instructions in the PO Request form for exceptions.

7. Request for proposals (when applicable) will be coordinated by Accounting staff with the assistance of the employee requesting the purchase. For example, employee may help create request for proposal or may be required to be available to answer questions by vendors.  All vendor questions must be answered consistently. (Refer to the Contracts and Agreements site for specific details.

8. No purchases are to be made or services initiated until PO request is approved and funds have been certified.

9. Program purchases of gift cards (i.e.: incentives for program activity) are NOT be awarded to staff.  This creates a taxable event.

10. Vendors and Independent Contractors ARE NOT authorized to represent or negotiate on behalf of the agency.

11. Invoices are to be matched with PO orders and notification of items received prior to payment.

12. Payments $50,000 or greater are to be signed off on by the NKIDHD Board Chair and by the District Director of Health (signing the check can suffice for this approval).  The Local Account bank statement is to be sent to the NKIDHD Board Chair on a monthly basis.

All procurements made by NKY Health involving the expenditure of Federal funds will be made in accordance with the following procurement standards.

The Accounting Manager in coordination with the Deputy Director of Health is primarily responsible for overseeing all procurement of NKY Health.  This responsibility includes, but is not limited to, the responsibilities set forth below:

• Ensures that all procurement transactions are conducted in a manner that provides full and open competition in accordance with 2 CFR Section 200.319.

• Manages contracts and overseeing vendors and or/ensures that vendors perform in accordance with the terms, conditions, and specifications of vendor contracts and/or purchase orders.

• Ensures that vendors who develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals are excluded for competing for such contracts and/or purchase orders.

• Ensures that all contractual and administrative issues arising out of procurement is handled in accordance with good administrative practice and sound business judgment.

• Ensures that sufficient records detailing the procurement history is maintained.  The records maintained for contracts include, at a minimum, the following records:

  • Rationale for methods of procurement.

  • Selection of procurement type.

  • Selection or rejections of vendor.

  • Basis for contract price.

• Ensures that affirmative steps are taken to assure minority business enterprises are used when possible.  (2 CFR Part 200.321. Small, minority and women’s businesses and labor surplus firms).  Affirmative steps include:

  • Solicitation lists.

  • Solicited when sources are available.

  • Dividing total requirements, when economical feasible (i.e., prices are equal), to allow maximum participation,

  • Use Small Business Administration and Minority Business Development Agency.

  • Require prime contractor, in subcontracts, to use affirmative steps.

Purchases of supplies or services where the aggregate dollar amount does not exceed the micro-purchase threshold of $10,000 will be made using the micro-purchase method.   The Purchasing Specialist is responsible for procuring supplies or services for NKY Health using the micro-purchase process (i.e.: NKY Health's normal purchasing procedures.) 

Purchases over the micro-purchase threshold of $10,000 and below the Simplified Acquisition Threshold of $40,000 (per KRS 424.260 and 902 KAR 8:170) will be made using small purchase procedures.

Purchasing staff is responsible for making purchases using small purchase procedures.  These responsibilities include, but are not limited to the following:

• Contacting potential vendors when price or rate quotes are needed from at least three qualified sources.

• Ensuring the confidentiality of price or rate quotes are maintained until purchase is made.

• Ensuring small purchases are made based on the lowest price.

• Ensuring documentation is maintained and includes at least the written specifications used, identification of vendors contacted, vendor price or rate quotes received, and vendor selected.  

The Accounting Manager is responsible for overseeing the small purchase procedures.  These responsibilities include, but are not limited to the following:

• Reviewing price or rate quotes.

• Providing final approval via certification of funds for the purchase.

Procurement by sealed bids will be utilized for purchases over the Simplified Acquisition Threshold of $40,000 and where the following conditions are met:

• A complete, adequate, and realistic specification or purchase description is available.

• Two or more responsible bidders may be willing and able to compete effectively for the business.

• The supplies or services can be procured for a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.

The Accounting Supervisor in coordination with the Deputy Director of Health are responsible for procuring supplies or services using sealed bids.  These responsibilities include, but are not limited to the following:

• Performing a cost and price analysis as well as an independent estimate prior to receiving bids.

• Ensuring that contracts are awarded to the responsible bidder whose bid is responsive to the solicitation and is most advantageous to the Organization.

• Ensuring that, when weighted criteria is used as part of the solicitation, a weighted evaluation sheet is provided to each bidder in the initial bid document materials; and a firm fixed price contract is awarded following evaluation.

• Ensuring that the bid tabulation is signed signifying a review and approval of the selections.

• Monitoring the formal procurement system to ensure compliance with applicable laws.

• Ensuring that all procurement documentation relating to procurement by sealed bids is maintained.

• Ensuring that solicitation is advertised by newspaper and on its website to publicize the Organization’s intent to purchase needed items.

• Ensuring that announcements (advertisements or legal notices) contain:

  • General description of items to be purchased.

  • Deadline for submission of questions and the date written responses will be provided including addenda to bid specifications, terms and conditions as needed.

  • Date of pre-bid meeting, if provided, and if attendance is a requirement for bid award.

  • Deadline for submission of bids.

  • Address of location where complete specifications and bid forms may be obtained.

  • Date, time, and location of where the bids will be publicly opened.

• Ensuring advertisements run for at least 7 days but not more than 21 days. Per KRS 424.130.

• Ensuring that vendors are given the same opportunity to bid on the same product specifications.

• Ensuring that purchase conditions are clearly defined in the solicitation.

• Ensuring that the initial procurement solicitation and the final awarded contract includes all required contract language and meets the requirements of federal and state law.

The Accounting Supervisor in coordination with the Deputy Director of Health are responsible for overseeing procurement by sealed bids.  These responsibilities include, but are not limited to the following:

• Reviewing weighted evaluation sheet and/or bid tabulation sheet.

• Providing final approval of the purchase.

Procurement by competitive negotiation will be utilized for purchases over the Simplified Acquisition Threshold of $40,000 and where sealed bids are not appropriate.

The Accounting Supervisor in coordination with the Deputy Director of Health are responsible for procuring supplies or services using competitive negotiations.  These responsibilities include, but are not limited to the following:

• Performing a cost and price analysis as well as an independent estimate prior to receiving proposals.

• Ensuring that contracts are awarded to the responsible proposer whose proposal is responsive to the solicitation and is most advantageous to the Organization.

• Ensuring that, when weighted criteria is used as part of the solicitation, a weighted evaluation sheet is provided to each proposer in the initial proposal document materials; price and other factors are considered with price receiving the highest weight; and a firm fixed price or cost reimbursable contract is awarded following evaluation and/or negotiation (as applicable).

• Ensuring that the proposal tabulation or the evaluation criterion score sheet is signed signifying a review and approval of the selections.

• Monitoring the formal procurement system to ensure compliance with applicable laws.

• Ensuring that all procurement documentation relating to formal procurement is maintained.

• Ensuring that solicitation is advertised by newspaper and on its website to publicize the Organization’s intent to purchase needed items.

• Ensuring that announcements (advertisements or legal notices) contain:

  • General description of items to be purchased.

  • Factors to be considered in the evaluation of proposals and the relative weights assigned to each selection factor.

  • Deadline for submission of questions and the date written responses will be provided including addenda to proposal specifications, terms and conditions as needed.

  • Date of pre-proposal meeting, if provided, and if attendance is a requirement for bid award.

  • Deadline for submission of proposals.

  • Address of location where complete specifications and bid or proposal forms may be obtained.

• Ensuring advertisements run for at least 7 days but not more than 21 days. Per KRS 424.130.

• Ensuring that vendors are given the same opportunity to propose on the same product specifications.

• Ensuring that purchase conditions are clearly defined in the solicitation.

• Ensuring that the initial procurement solicitation and the final awarded contract includes all required contract language and meets the requirements of federal and state law.

The Accounting Supervisor in coordination with the Deputy Director of Health are responsible for overseeing procurement by competitive proposals.  These responsibilities include, but are not limited to the following:

• Reviewing weighted evaluation sheet and/or bid tabulation sheet.

• Providing final approval of the purchase.

Procurement by non-competitive negotiation is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:

• The item is available only from a single source.

• The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation.

• The Federal awarding agency or pass-through entity expressly authorizes non-competitive proposals in response to a written request from the Organization.

• After solicitation of a number of sources, competition is determined inadequate.

The Accounting Manager is responsible for procuring supplies or services using non-competitive negotiations.  These responsibilities include, but are not limited to the following:

• Ensuring that written specification are prepared and provided to the vendor.

• Ensuring that a record of non-competitive negotiation is maintained including, at a minimum, the following:

  • Item Name

  • Dollar Amount

  • Vendor

  • Reason for Non-Competitive Procurement

• Ensuring documentation that the actual product or service specified was received is maintained.

No NKIDHD or NKIDBOH member, employee, consultant, elected official, appointed official or designated agent of the NKIDHD or NKIDBOH will take part or have an interest in the award of any procurement transaction if a conflict of interest, real or apparent, exists.  A conflict of interest occurs when the official, employee or designated agent of NKIDHD or NKIDBOH, partners of such individuals, immediate family members, or an organization which employs or intends to employ any of the above has a financial or other interest in any of the competing firms.

No NKIDHD or NKIDBOH member, employee or designated agent of NKIDHD or NKIDBOH may acquire a financial interest in or benefit in any way from any activity which uses any portion of Federal funding, nor shall they have any interest in any contract, subcontract or agreement for themselves or any family members.

These rules apply to all named parties and shall be effective for the period of service and for one year after leaving said position or office, in the case of elected officials.

10/1/2022:

• Purchase Order form updated

• Simplified Acquisition Threshold was increased to $40,000, and language was updated to reflect changes. 

• Added button for Fixed Asset - Inventory policy.

5/14/2024:

• Added "Expedited PO/Resource Allocation Process" section.

• Updated policy contact

7/1/2024:

• Purchase Order form updated.

• Updated contact information to "Accounting Supervisor" and "Deputy Director of Health."

• NKY Health W9 Form updated.

03/24/2025:

• Purchase Order form updated.