20180130Avista to WNIDCL_PR_015 Attachment A.pdf

Avista strives to conduct the procurement of goods and/or services in a disciplined manner, consistent with good business and internal control practices as well as Avista’s Code of Conduct and Ethics.
Supply Chain Management (Buyers/Contract Managers) acts as the authorized agent and primary contact for Avista, unless otherwise delegated, for the procurement of goods and services to protect the financial and
commercial interests of Avista and to obtain the maximum value for each dollar of expenditure. This is
done by:
Acquiring goods and/or services to meet Avista’s quality, quantity, financial and time requirements.
Negotiating for optimum value in terms of lowest overall cost.
Establishing and maintaining competent, dependable and competitive supply sources.
Developing and maintaining effective, fair and ethical relationships with suppliers.
Reviewing this document with new Supply Chain employees.
Reviewing this document with all Supply Chain employees on an annual basis.
To achieve the goals set forth above, Supply Chain Management has developed the following “best practices”
that should be followed when procuring goods and services.
1.SCOPE AND OVERVIEW OF PROCUREMENT:
1.1 All expenditure requests for the purchase of goods and/or contracts for services must be
reviewed, approved and signed by the Business Unit (BU) manager having overall accountability for the results of the particular contract, in accordance with established corporate signature authority (a
Signature Authority Log is managed by Accounts Payable).
1.2 The Signature Authority Log has certain individuals listed multiple times with different levels of signature authority, depending on the organization code. Supply Chain personnel should ensure that
signature on the “Contract Document” (defined as agreements, amendments, work authorizations and change orders) is obtained for the proper individual under the applicable organization code.
1.3 Revenue and expense contracts must be signed by the authorized level of management responsible for
committing Avista resources. Contracts with no financial impact should be signed by the BU manager having overall accountability for the results of the particular contract.
1.4 When individuals sign above their established signature authority, written delegation of signature
authority must be obtained from the appropriate signature authority and retained in the applicable database of record (ValueMation/Oracle).
1.5 All fully executed Contract Documents must be saved in the applicable database of record
(ValueMation/Oracle). (The Contract Manager, Contract Tech or Buyer who saves the Document is
responsible for ensuring that the scanned Document is complete and legible prior to saving it in the
database of record.)
1.6 Exceptions to the processes described in Sections 1.1 through 1.5 include: (i) legal services, (ii) electric and natural gas power supply, and transmission contracts involving purchasing and selling power, (iii)
executive professional services, and (iv) emergency-related situations (See Section 8.2 below).
The following is a basic categorization of typical transactions associated with the purchase of goods and services.
2. CONTRACTING OF SERVICES
2.1 A written contract is required for all services including construction, professional, general, andfield services, regardless of value. Excluding contracts with electric and natural gas service customers (“M” contracts) the use of open-ended (evergreen) and/or time and materials service contracts with
no set not-to- exceed amount (“NTE”) is discouraged.
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2.2 All contracts must meet corporate financial, tax, insurance, legal and risk management standards.
Supply Chain Management is responsible for identifying and evaluating any liabilities as well as negotiating terms that result in a well-balanced and fair contract. Legal and/or Risk Management must
be consulted, as needed.
2.3 Avista’s standard contract terms and conditions govern all contracted activities. Significant deviations from Avista’s standard terms and/or use of terms and conditions provided by the counterparty must
be approved by Legal.
2.4 Work under an evergreen/master contract is administered under a work authorization (“WA”), and additional work under a project-specific contract is administered via a change order (“CO”). Changes
to an executed contract that change contractual terms are administered via an amendment, or by a CO if the change involves the work or compensation. Finally, additional work and/or changes to an executed WA are administered via a CO. Supply Chain Management will work with the requestors
to execute the appropriate Contract Document.
2.4.1 Each WA should represent a specific element of work under a master agreement. Combining WA’s which represent similar or related work is at the discretion of the stake holder/requestor
and Supply Chain Management. However, Supply Chain Management should work with the BU to ensure that WA’s are not split into multiple documents as a means of circumventing the proper review and approval process.
2.4.2 A CO should specify the reason for the change, the impact on the schedule (if any) and the impact to the compensation (if any). A CO should reflect the compensation applicable under
the Contract Document and the additional compensation added by the CO (if any). Signature
authority of the CO should be determined by comparing the total new dollar amount created by the CO to the signatory of the original Contract Document (for example, if a CO increases
the total compensation applicable under the Contract Document over $100K, then the Director
of the BU is not authorized to sign the CO – the CO must now be signed by the Vice President responsible for the activity associated with the BU).
2.4.2.1 If a Contract Document exceeds $50,000 and it was not subject to Avista’s Request
for Proposal (“RFP”) process, a Sourcing Approval Form must be generated and routed for signature.
2.4.2.2 Once a Sourcing Approval Form is signed and formalized, it is not necessary to
execute another Sourcing Approval Form if the compensation under the CO Contract Document increases, unless the incremental compensation applicable under the CO
Contract Document increases above fifty thousand dollars ($50,000).
2.4.2.3 Completed Sourcing Approval Forms must be saved in the applicable database of record (ValueMation/Oracle). (The Contract Manager, Contract Tech or Buyer who
saves the Document is responsible for ensuring that the scanned Document is complete
and legible prior to saving it in the database of record.)
2.4.3 An Avista Representative, authorized to act on Avista’s behalf, should be identified for all
contracts. The Avista Representative acts as the primary point of contact with the contractor during the performance and administration of the contract.
2.4.4 The Contract Review and Approval Form is used to document review and approval of
arrangements for goods and services by authorized representatives of Supply Chain, Legal, BU Management, and Risk Management.
2.4.4.1 Non-standard terms and conditions require Legal and BU approval.
2.4.4.2 Waivers or adjustment to standard insurance requirements require Legal and Risk Management approval.
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3. PURCHASES OF GOODS
A Purchase Order is required for the purchase of goods in excess of $1,000. Requisitions are submitted via the iProcurement System utilizing established signature authority to ensure proper review and
approval of expenditures. Material requirements may not be split into multiple purchases as a means of
circumventing the proper review and approval process.
4. EQUIPMENT LEASES
Equipment leases must be reviewed and facilitated by Supply Chain Management. Equipment lease
agreements that potentially could exceed $50,000 require additional review by the Corporate Accounting Department.
5. REAL PROPERTY
The Real Estate Department manages all real property (permits, franchises, deeds and easements) and maintains all original real estate documents, and requests for copies of real estate documents should be
directed to that Department.
6. MASTER AGREEMENTS
Master Agreements are negotiated when a particular supplier may be utilized for multiple projects and/or
there are opportunities to leverage company-wide purchases/services to achieve the greatest corporate value.
7. COMPETITIVE BIDDING
The following guidelines outline Avista’s competitive bidding philosophy and processes:
7.1. OVERVIEW:
7.1.1. Avista is committed to contracting via competitive bidding processes to the maximum extent
practical, and strives to invite a sufficient number of suppliers, including qualified diversity
and/or local suppliers where possible, to assure sound competitive offerings. Bids are by invitation only.
7.1.2. Supply Chain Management is responsible for administering Avista’s competitive bid
processes, serves as the Single Point of Contact (“SPC”) throughout the bid process, and works closely with the relevant BU throughout the process. The SPC is responsible for managing all
communications, including clarifications or modifications to the RFP documents, and ensuring
that any modifications to the RFP are issued simultaneously to all potential bidders.
7.1.3. Competitive bids should be solicited through a formal, confidential RFP when the potential
value of the contract is $100,000 or more. RFP’s of lesser value are evaluated for opportunity
and subject to competitive bidding or written quotations as advised by Supply Chain Management.
CONTRACTED VALUE BIDDING GUIDELINES

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7.2. INITIATING AN RFP:
7.2.1. The requestor is responsible for providing the Statement of Work (“SOW”) including any technical specifications, drawings, tasks, deliverables, and/or special considerations.
Requestors should strive to make the SOW and all attachments clear and precise, yet “vanilla”
enough to invite competition whenever possible.
7.2.2. Bidders should be encouraged to present their products and services at prices that reflect the
current competitive markets, and ensure that any exceptions are clearly noted by the bidders.
7.3. EVALUATION:
7.3.1. Bids are opened privately by Avista only after the deadline for receiving proposals has passed.
Supply Chain Management reviews the bids for responsiveness and exceptions, and compares the bids, with an emphasis on pricing, terms, exceptions and/or delivery, with the appropriate BU. Additional financial and risk analyses are performed as required. Legal and/or Risk
Management review exceptions and form, as necessary.
7.3.2. Supply Chain Management will assist the BU in: (i) validating pricing and commercial terms to ensure the integrity of the bids when the RFP is unusual or complex, or interpretation or
comparison is difficult; (ii) determining if the bid contains an apparent error (or errors), and (iii) deciding if a re-bid is warranted.
7.3.3. Supply Chain Management will work with the requestor (who has the primary responsibility
of performing the technical evaluation to ensure that the bid conforms to the technical specifications, standards, quality and/or other physical or operational concerns required under
the RFP) in evaluating the proposals received, as appropriate.
7.3.4. Following reviewing the proposals, Avista has the option to: (i) enter into negotiations with the preferred supplier, or (ii) invite a “short list” of qualified Bidders whose proposals are deemed
most responsive to the RFP to participate in a second, “Best and Final Offer” evaluation round.
8. EXCEPTIONS TO THE COMPETITIVE BID PROCESS:
8.1. In cases where Avista would benefit by using a specific supplier rather than conducting an RFP due
to the long-term value of the business relationship, a completed Sourcing Approval Form must be
submitted to Supply Chain Management for review/follow-up prior to commencing any purchasing or contracting activity.
8.2. When situations arise that require immediate procurement of materials or services to avoid placing
Avista in a position that may affect its ability to conduct operations in a safe, efficient and cost-effective manner, a Sourcing Approval Form is required within 48 hours of the transaction, if the
expense is greater than $50,000 and traditional approval processes were not followed. Requestors should work with Supply Chain Management to execute the transaction whenever possible.
8.3. The Sourcing Approval Form is used to document appropriate Supply Chain, Legal, BU Management,
and Risk Management review where there are exceptions to the standard procurement processes for goods and services. This Sourcing Approval Form requires approval by the corporate manager with signature authority equal to the estimated value of the transaction when:
8.3.1. “Sole source” (no bid) agreements with a value of $50,000 or more are created.
8.3.2. A new agreement replaces an expired or outdated agreement with an existing contractor / supplier. The “Justification” in the Sourcing Approval Form should be explained (i.e. that the
agreement is being updated for Avista best interest in continuing its relationship with the contractor/supplier). In this specific case only, the Supply Chain Manager’s signature is
required on the Sourcing Approval Form.
8.3.3. Contract is awarded to other than the lowest evaluated bidder if the value is in excess of $50,000.
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9. AWARDS & SUPPLIER SELECTION:
9.1 Suppliers should be selected on the basis of:
 Ability to provide materials, equipment and/or services in accordance with the specifications;
 Ability to meet standards for quality, service level, and long term benefit to Avista;
 Optimum value / lowest overall cost;
 Financial and business stability, past performance and relevant experience; and
 Other pertinent factors as deemed necessary.
9.2 Employees should avoid doing anything that could imply selection of a supplier on any basis other than the best interests of Avista or which could give an improper advantage to one supplier over another.
9.3 Additional consideration may be given to local suppliers having manufacturing or major stocking
facilities located within Avista’s service area if all conditions are equal.
9.4 Foreign suppliers may be considered when qualified domestic suppliers are non-competitive, unable
to meet delivery requirements, or the foreign product has design and performance characteristics desired by Avista that may not be available domestically.
10. SUPPLIER RELATIONS
10.1. Employees are expected to maintain impartial, objective, and fair business dealings with suppliers while promoting positive supplier relationships in all phases of the contracting and procurement cycle.
(Refer to Avista’s Code of Conduct & Ethics for additional information.)
10.2. Special emphasis should be placed on employees who are responsible for, or in a position to influence, the procurement of goods or services including employees with the responsibility to:
 Establish criteria or specifications for procurement of goods or services;
 Qualify, evaluate, recommend or select suppliers or contractors;
 Receive, inspect, or accept goods or services on behalf of Avista;
 Manage projects and/or review supplier performance; and/or
 Price, sell, or negotiate the sale of Avista goods or services.
10.3. Employees must avoid solicitation or acceptance of any gifts or personal favors that may create or
appear to create an obligation by the employee or Avista to provide preferential treatment. To avoid the appearance of impropriety, Avista pays employee expenses for trips associated with factory or business visits to supplier sites, etc.
10.4. Passage of one supplier’s pricing information to a competitor is not only unethical but can be a violation of antitrust laws. It is never appropriate to discuss a supplier’s products or services with competitors. Likewise, Avista pricing must not be shared with other suppliers and/or customers of
such other suppliers.
10.5. When on Avista property, suppliers must be escorted by an Avista representative, unless suppliers
have obtained appropriate background checks.
10.6. Concerns with supplier performance (delivery, quality, or conduct) should be brought to Supply Chain Management for resolution. (Supply Chain Management will involve Legal, as needed.
11. GENERAL PURCHASING INSTRUCTIONS:
11.1. WILL CALL ORDERS. Employees must present identification at the time of pick-up for any “will call” purchases. Employees must legibly print their name, department, and/or phone number on
the sales order.
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11.2. INVENTORY MATERIAL. Material stocked in an Avista storeroom should be utilized to ensure
compliance with material standards and minimize additional spending on alternative products as
a result of supplemental purchases.
11.3. CREDIT CARDS. For a complete list of acceptable uses of Credit Cards, please refer to Avista’s
Credit Card Policies and Procedures.
12. DOCUMENTATION & RETENTION:
12.1. FORMS:
The following forms are utilized as part of the procurement practices and must be retained in
accordance with Section 12.2:
 Contract Request Forms.
 Sourcing Approval Forms: Used for Sole source, Awarding Bid to non-lowest bidder, new
agreement replacing an existing agreement.
 Contract Review and Approval Records: Used to document review and approval of arrangements for goods and services by authorized representatives of Supply Chain, Legal, BU Management, and
Risk Management.
12.2. RETENTION
12.2.1. Appropriate documentation, including pre- and post-award records, must be maintained
throughout the life of the contract according to corporate policies, procedures, guidelines and legal/regulatory requirements. These documents include:
Agreements
Exhibits/Attachments
Amendments
Work Authorizations
Change Orders
12.2.2. Documentation must be saved to the Contracts Network Shared Drive and into the electronic system of records (i.e. ValueMation).
12.2.3. Prior to uploading documentation (including Contract Documents, approval forms, etc.) into the electronic system of record (i.e. Oracle/ValueMation). The Contract Manager, Contract
Tech or Buyer who scans and saves such documents is responsible for ensuring that the
documentation is complete (i.e. with signature page, no missing pages, attachments, etc.) and legible prior to scanning, and once scanned, are responsible for confirming that the scanned
documents are complete and legible prior to disposing of the hard copies of such
documentation.

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