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Purchases Involving $7500 or More
Alabama law mandates that there be public competition for purchases involving $7500 or more. Therefore, competitive, sealed bids are required if the item needed is not already covered on an existing University contract. Because of the competitive bid requirement, this process can take 40 or more days to complete, therefore advanced planning is required for such purchases. The process may take significantly longer if user review of bids is delayed.
Purchases involving $7500 or more cannot be divided into smaller purchases in an effort to circumvent the Alabama Competitive Bid Law.
For example, multiple copies of the same item should be grouped into one requisition. When buying equipment, the department is responsible for ensuring that suitable equipment is not available for use elsewhere on campus.
The department should contact Procurement and Payment Services for guidance prior to preparing the Purchase Requisition required to initiate the purchasing process.
Selection of Source of Supply
Procurement and Payment Services is responsible for contracting with the best supply sources for the University. Procurement and Payment Services Buyers are constantly seeking to expand the number of potential vendors, so your suggestions on vendors are always welcome. All qualified vendors will be considered as sources of supply, with Procurement and Payment Services retaining final responsibility for the selection of the vendor.
Specifications
Specifications are the requirements which establish which product or service will best meet your needs. Preparing specifications for purchases is the joint responsibility of your department and the Procurement and Payment Services Buyers. The PPS Buyers will outline the terms and conditions; your department will provide the technical or performance specifications. You should work with PPS to develop evaluation criteria.
Specifications should define the quality of the item that is required, noting whether a lesser or higher grade is acceptable.
Specifications should not be unduly restrictive and should assist in the competitive process. They should be fair and equitable and not be prejudicial for or against a specific supplier.
If a vendor assists in developing product specifications, that vendor must be excluded from bidding on those items.
"Acceptable Substitute" may be used to set specification standards. If using "brand name or equal," identify the distinct features which will meet those criteria.
See "Sole Source Purchases" for exceptions to this policy.
Replacement Parts
Replacement parts through original equipment manufacturers are often priced higher than parts from other sources. If the quality and service meet your needs at a lower price, consider substitute replacement parts instead of original manufacturers' replacement parts.
Procurement and Payment Services can help you obtain information on suppliers of replacement parts as well as other assistance in obtaining or evaluating replacement items.
Installation Requirements for Purchased Equipment
It is the responsibility of the requesting department to determine all requirements for installing new equipment. When there are special needs for utilities, floor-loading capacity, or building accessibility, the department should work closely with the Facilities Division before submitting the requisition. Installation requirements and any arrangements made with Facilities Division should be noted on the requisition.
Lease-Purchase or Installment Payments for Equipment
Capital equipment may be purchased on an installment or Lease Purchase basis. Unless authorized by the Strategic Procurement and Contracting Officer, the payment period cannot exceed five years.
Purchase Requisitions for such items must include a description of the item and the desired number and dates of annual payments.
It is the department's responsibility to determine whether lease-purchase or outright purchase is the most economical and practical option. Documentation supporting the cost analysis should be kept on file in the department.
Procurement and Payment Services will process requests for bids, including financing. If the vendor cannot provide financing at an acceptable interest rate, Procurement and Payment Services may seek financing from a third-party. If financed by a third party, payments will be made to the third party by the department.
If there is a possibility that the equipment might be "bought out" before the end of the installment contact, the agreement should indicate the buy-out terms and conditions as well as any penalties for early payment.
Sole Source Items
Sometimes an item is available from only one source. It might be something such as a specific part, equipment manufactured by only one manufacturer, or original art. When you wish to make such an acquisition, you must complete a
Justification for Sole Source Purchase Form, denote the Purchase Requisition number on the Justification form; have form approved by PI and department head and forward it to Procurement and Payment Services for review.
The Manager of Procurement Services will review your documentation to determine whether to waive the requirements. Your written justification should describe the technical characteristics of the item as well as why those characteristics are essential and cannot be obtained from another source.
In the case of Sole Source Purchases, Procurement and Payment Services may negotiate the purchase, in an effort to obtain the best possible price, terms and delivery. If the item exceeds $7500 or more an RFB may be issued to formally obtain pricing information.
Trading-In University Property
There are only two methods for disposing of University property: through trade-in on replacement equipment or by disposal by sale or transfer through Property Services. For additional information on the disposal procedures, see the
Property Services section of the University Policies and Procedures manual.
If equipment is no longer in practical use, it may be traded in on the purchase of equipment of the same general nature. It should not be traded if the trade-in offer is substantially less than the current market value.
When submitting a Purchase Requisition involving a trade-in, the requisition should list the equipment to be traded, a full description, condition, current location, and AU property control number.
Purchases involving $7500 or more are subject to the bid law even if the net payment amount after trade is less than $7500.
Campus-Wide Contracts
The University regularly contracts with suppliers to provide computers, office supplies, cut paper, copiers, copier paper and other materials at a volume discount. Information on bids and state contracts may be obtained from Procurement and Payment Services or via the Procurement and Payment Services web site.
Contract Time Span
Generally contracts will not be extended beyond a fiscal year except for maintenance contracts. A contract may, however, be extended up to five years when the Executive Director of Procurement and Payment Services finds it advantageous to do so.
Funds in state appropriated accounts are not obligated beyond the end of the fiscal year. Funds for Sponsored Program Accounts are not obligated beyond the expiration date of a grant or contract.
Return to Procurement and Payment Services Spending Policies
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Business Office · Ingram Hall
Auburn University · Alabama 36849 USA
334-844-5588
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