Contract and Procurement Fraud The Procurement Process Introduction . The procurement system refers to those processes, procedures, and entities involved in the purchase of goods and services by public or private entities. 2 of 11 Public Procurement . Public procurement refers to those processes, procedures, and entities involved in the government’s process of acquiring goods and services. 3 of 11 Private Procurement . Private procurement refers to those processes, procedures, and entities involved in the acquisition of goods and services in the private sector. 4 of 11 Methods of Procurement . Competitive Bidding Using Sealed Bids • Prepare the invitation for bids. • Publicize the invitation for bids. • Receive submitted bids. • Open the bids in public. • Evaluate and compare the bids. • Select the most appropriate bids. 5 of 11 Methods of Procurement . Contracting by negotiation • Competitive negotiation using RFPs or RFQs • Sole-source contracting . Simplified acquisition procedures • Charge accounts • Purchase cards • Purchase orders • Petty cash funds 6 of 11 Phases in the Procurement Process . The presolicitation phase . The solicitation phase . The bid evaluation and award phase . The post-award and administration phase 7 of 11 Employees Involved in Purchasing . Can involve almost every employee in the organization, but typically involves: • Purchasing • Accounts payable • Operations 8 of 11 Procurement Involving Contracts . Mutual consent (meeting of the minds) . Lawful subject matter or objective . Consideration . Competent parties . Form permitted by law 9 of 11 Procurement Involving Contracts . Other Issues of Enforceability • Contracts in writing • Oral agreements • Contract terms • Rescission of a contract • Breach of contract 10 of 11 Types of Contracts . Master contracts . Fixed-price contracts . Not-to-exceed contracts . Time-and-materials contracts . Cost-reimbursement contracts (cost-plus contracts) . Escalation clauses . Incentive agreements 11 of 11 .