Claire Pritchard, Associate Consultant (Email)
The coronavirus pandemic is causing many communities around the country to put their emergency purchasing procedures into effect. Here are some best practices for emergency purchasing, as well as some examples of communities that are applying them.
Most municipalities require purchases above a certain threshold to be approved by a majority vote of their elected body. However, elected bodies can’t meet in person to review purchases right now due to the shelter-in-place requirements. While they can get around this hurdle by enabling bodies to meet by phone, as the Town of Taos, New Mexico does, this approach relies heavily on technology, which may be untested in many communities. In addition to the technology hurdle, requiring a meeting to approve a purchase prevents municipalities from being able to meet the needs of their communities quickly, which ironically is what’s most needed during an emergency.
For these reasons, it is best to delegate purchasing authority to individuals during a state of emergency. Providing purchase approval authority to more than one person is critical in case someone becomes unable to report to work.
Another best practice during an emergency is to remove the limit on certain individuals’ purchasing cards, or p cards. Though this requires trust in employees and training in the appropriate use of p cards, it increases a municipality’s flexibility and speed to make purchases when they’re needed most. This strategy also reduces administrative work in the short term, helping free up staff for more urgent duties.
Given that social distancing requirements are in place and conditions are constantly evolving, municipalities should review all active contracts and identify where services may be impacted, then amend the terms, if needed, either by extending the timeframe or modifying the scope, to enable a contractor’s ability to complete their work. In some cases, contracts may have force majeure clauses allowing changes to the scope or timeline due to external factors, such as the pandemic. In other cases, contracts may require amendments to change the scope or timeline. Just like the spending issue, specific individuals should be given authority to approve change orders during a state of emergency without the need for approval from the elected body.
If additional authorities are required to make a contract change, municipalities should amend their purchasing policy now, to grant those authorities in states of emergency, or they should issue or amend an emergency declaration to authorize certain positions to approve change orders on the municipality’s behalf. This will help ensure that the organization is appropriately positioned for the future, whatever takes place.
Some communities’ declarations of emergency have expiration dates that require the elected body to vote to extend it.
Many communities have competitive bid requirements for high dollar purchases. While this is prudent under normal circumstances, retaining these requirements during an emergency inhibit a community’s ability to meet its urgent needs. Different communities have taken different approaches to suspend these requirements during the pandemic. Some communities have chosen to suspend their purchasing requirements entirely during this situation.
It is important to track expenditures carefully during an emergency to monitor resource availability and ensure that funds are being allocated as effectively as possible. Carefully tracking expenditures provides the data communities need to prepare well for future emergencies. In many cases, a log of expenditures is also required for reimbursement from state or federal agencies. For these reasons, each municipality should keep detailed records of emergency purchases. The International City/County Management Association has produced a guide for tracking and managing coronavirus recovery costs.