Business Manual - Material & Disbursement Services Section

State statutes give explicit instructions on the solicitation of bids when the total purchase is over $5,000. Solicitation of bids and quotations on orders up to $500,000 and on certain specified items and services has been delegated by the State to the University. With this delegation comes the requirement to solicit, where possible, at least three competitive bids, regardless of the dollar value of the purchase.

Specifications

Generic, performance-based specifications encourage competition. Whenever possible, requisitions should be supported by a description of need, functional specifications, technical specifications, installation and training requirements, service requirements, and other criteria that will allow vendors to bid their products to suit the particular needs of the user. Do not quote brand-specific specifications unless the particular requirement can be met only by those exact specifications. Quoting brand-specific specifications without reasonable justification deviates from State statutes and shortchanges the University by unnecessarily restricting competition. If a requirement can be met only by a brand-specific specification, send a justification with the Purchase Requisition.

Limited Competition

Purchasing Services is responsible for ensuring that fair and equitable competition is achieved for all purchases delegated to the University. To accomplish this, items that can be obtained from University Stores inventory or existing State contracts should be obtained from these sources unless lower prices can be documented. Any deviation from these sources requires a justification with the requisition. Sole-source and/or product-specific requisitions for purchases over $5,000 ($2,500 if Federal funds are used) must be accompanied by a justification statement. While a requestor may designate a specific vendor to fill a requisition, Purchasing will search for the most advantageous source, based on price and other source selection factors.

Informal Bids

For purchases above the small-order purchase threshold ($5,000), solicitation of competitive bids or quotations is the responsibility of Purchasing. To speed up the process, departments may obtain quotes and forward them to Purchasing. Quotes obtained by departments may be used only for informational purposes, as State law requires the use of at least three informal bids, or quotes, for purchases over $5,000. Any pricing information received must be protected from release to anyone outside the University so as not to compromise the competitive bidding process.

Formal Bid Procedures

For requisitions greater than $10,000 and up to $500,000, Purchasing will use the University's sealed formal bid procedure to obtain competitive bids (including posting on the State Purchase and Contract Web site). Requisitions over $500,000 will be submitted through the State Purchasing Office.

Results of Bids

Information submitted in a successful bid is used by Purchasing to prepare the Purchase Order. The Purchase Order form itself binds the vendor to meet the quantities, qualities, prices, and other conditions as proposed in the bid.

Selection of Bids

If competition is received during bid solicitation, the requesting department will be contacted before an order is placed. If the lowest-priced bid is not selected, a justification statement must be prepared by the user.

Lead Time

When issuing a Purchase Requisition for materials, the requestor must consider the time it takes to solicit and evaluate bids, place the order, and finally effect delivery. Also, bear in mind that the lack or inadequacy of the requisite justifications and specifications may significantly delay the requisition beyond the normal processing time. Assuming the requestor submits a complete requisition package with adequate specifications and justifications if required, the following times are required to solicit bids/quotes and place an order:

Value of Purchase	Business Days Required
Up to $10,000	7–10
$10,000–$500,000	25, plus time for department to evaluate bids
More than $500,000	40–70

If there is a need to have a requisition handled as a priority, please so indicate on the requisition and include a rationale for the priority handling. This is particularly important for purchases over $500,000, as the State Purchasing and Contract Office has a high volume of work and must have some indicator to help prioritize the workload.

Contact with Vendors

When competition is received during the bid-solicitation phase of an acquisition, the requesting department will normally participate in the evaluation process. After requests for quotes/bids have been issued by Purchasing and before a purchase order or contract is awarded, possession of bid/quote information is limited to University and State evaluating personnel only. Any communication with bidding vendors that may be necessary for the purpose of clarification of a quote or bid must be cleared in advance.

Addtional Information

MSD Policy 5, Equipment Specifications

MSD Policy 7, Single-Source or Brand-Specific Purchases

MSD Policy 8, State Purchase (Term) Contracts

MSD Appendix 2, Justification Memorandum

SOLICITATION OF BIDS AND QUOTATIONS

State Statutes