How to Buy
The Buying Methods at a Glance
Standard University policy does not permit campus departments to place orders directly with vendors and service providers, apart from using the universal delegation of authority that permits acquisitions to be made under the Procurement Card program, Direct Payment Program or through the use of a petty cash fund. Instead, requisitions must first be submitted for processing to the Procurement and Contract Services Office.
Where do I start?
There are five different methods which have been established to assist campus departments in obtaining goods and services, they are as follows:
Procurement Card (Pro-Card)
California State University, Sacramento offers a VISA Procurement Card program through US Bank. The Procurement Credit Card (also known as a ProCard) is an easy, efficient and cost-effective option for purchasing supplies (goods), and allowable services (see pro card manual for allowable service) costing up to $5,000 (including tax and shipping) or less, which are not restricted or prohibited. Cardholders are encouraged to use the Procurement Credit Card for low value purchases in order to achieve cost savings and improve processing time for such items. The Procurement Credit Card is for authorized University purchases only and is not for personal use. Departments should seek the use of small business and or disadvantaged veteran small business enterprises (DVBE) first.
Purchase Requisition User Guide
Purchase Requests should be submitted for any order totaling $5,000 or greater that cannot be put on a Pro-Card.
If there is a purchase that is under $5,000 that cannot be put on a Pro- Card then you will need to submit a purchase requisition.
- $5,000- $50,000 processing of non-IT supplies or services does not require a formal bid. Though bids are not required, all reasonable efforts are made to place orders with small and/or (DVBE). It is at the Buyers discretion to determine if it would be in the best interest of the University to obtain additional pricing for requests under $50,000. A Purchase Order is required. University Procurement must assist with all orders $5,000 and greater. Contact the buyer that oversees the area for the commodity that you need to purchase if you have questions.
- $50,000 –$100,000 in accordance with CSU policies and regulations, all contracts for the acquisition of goods in the amount greater than $50,000 and less than $100,000 shall be advertised in the California State Contracts Register and may be the result of an informal bid process. An informal solicitation process may provide for submittal of written or verbal quotes from vendors. Bids that result in an award to a Certified Small Business are not required to be advertised in the California State Contracts Register, as long as price quotations have been obtained from two or more Certified Small Businesses. The Procurement team can guide you through this process.
- $100,000 and over all contracts for the acquisition of goods in the amount of $100,000 or more shall be formally bid and awarded by written contract or the issuance of a purchase order to the lowest responsible bidder meeting specifications. Efforts shall be made to meet the goals established for small businesses and disabled veteran business enterprises as set forth in section 215, and DVBE Participation Goals and 216, Small Businesses of the CSU policy manual for contracting and procurement.
- Departments create their purchase requisition in CFS at their PC. The requisition is routed electronically for necessary departmental approvals. Once the requisition has been approved by the departmental approver, it is forwarded electronically to Procurement and Contract Services where a purchase order is generated and sent to the supplier.
Information Technology Resources (ITR) Purchases of Goods and Services
- Information Technology is defined to include, but is not limited to, all electronic technology systems and services, automated information handling, system design and analysis, conversion of data, computer programming, information storage and retrieval, telecommunications which include voice, video, and data communications, requisite system controls, simulation, electronic commerce, and all related interactions between people and machines.
- <$50,000 from Certified Small Business
Acquisitions that are estimated to be less than $50,000 may be awarded to a Certified Small Business without competition and without advertising in the California State Contracts Register. However, whenever there is reason to believe a price quote from a single source is not fair and reasonable the campus shall obtain at least two price quotations from responsible suppliers.
Acquisitions that are estimated to be less than $50,000 may be awarded when the price has been determined to have met fair and reasonable standards. The attainment of the standard of “fair and reasonable” may be determined by, but not limited to, one of the following techniques:
- Catalog or Market Price – The price offered is supported by an established and verifiable catalog or market pricing medium issued by a responsible supplier and/or through an established reputable forum. In addition, the pricing structure provided is one that a prudent buyer would accept as a reasonable representation of existing market value.
- Price Comparison – A buyer has obtained and documented quotes or offers within the last 18 month period from other responsible suppliers which provides evidence that a price obtained is deemed fair and reasonable.
- Historical Pricing – A buyer is able to demonstrate that other transactions occurring in the past 18-months show prices for similar acquisitions, which provides evidence that a price obtained is deemed fair and reasonable.
- Controlled Pricing – law or regulation sets the price offered.
- Informal solicitation process.
Campuses may also define “fair and reasonable” attainment techniques that provide the best value to the CSU.
- $50,000 and less than $100,000 from Certified Small Business
Acquisitions that are estimated to be equal to or greater than $50,000 and less than $100,000 may be awarded to a Certified Small Business without advertising in California State Contracts Register, as long as price quotations have been obtained from two or more small businesses.
IT Services ONLY
Acquisition of IT services of $5,000 or more must be advertised in the California Contracts Register.
Acquisitions equal to or greater than $50,000 and less than $500,000
Acquisition of IRT requirements that are estimated to be equal to or greater than $50,000, and $500,000 or less may be the result of an informal solicitation process that includes advertising in the California Contracts Register as:
- Solicitations for IT goods in excess of $100,000
- All solicitations for IT services
- Solicitations that include both IT goods and services:
Advertisement must include both IT goods and services portions when the portion attributable to IT goods is in excess of $100,000
Advertisement may be limited to advertising the IT service portion of the solicitation when the IT goods portion is $100,000 or less
An informal solicitation process may provide for submittal of written or verbal quotes from vendors
Acquisitions greater than $500,000
- Acquisitions of IRT requirements estimated to result in contracts greater than $500,000 shall be awarded as the result of a formal solicitation process.
Stockless Office Supply
- You can order office supplies from your desk by using the web-based ordering system from OfficeMax Solutions.
- Before placing your order, you must complete a set-up application and forward to Karen Massey/Leah Davis in Procurement and Contract Services at email@example.com
- Use of the Direct Pay Program for specific items administered by the Accounts Payable Office. Information regarding the Direct Pay Program is available on the Accounts Payable website at http://www.csus.edu/aba/accounts-payable/index.html
- Use of the Petty Cash program for specific transactions costing less than $50.00 as administered by the Student Financial Services Center. Information regarding the Petty Cash Program is available on the Student Financial Services Center website at www.csus.edu/sfsc .
Requirements Common to all Transactions
- Procurement and Contract Services has included further insight to some of these additional common requirements that may help you further understand the procurement process and how it relates to your purchase. These requirements apply to all procurement transactions, i.e., acquisitions of personal property (goods) or services, information technology (IT) orders and contracts, and the sale, lease, and license of University personal property. These requirements are to assure the following are met:
- Clarification on the laws and policy with respect to competitive bidding requirements;
- Protection of the public from the misuse of state funds;
- A fair opportunity for all qualified bidders to enter the bidding process, thereby adhering to sound business practices and state fiscal policies;
- Prevention of favoritism, fraud, and corruption in the awarding of University contracts
Defining Characteristics of Purchase Orders, Service Orders and Contracts
- Proper classification of requests is necessary as a first step in determining which solicitation process is appropriate.
A Purchase Order
- Once issued under proper authorization to a vendor who has been duly informed of the intent to buy a commodity offered at a specified time and price and under mutually agreed upon terms and conditions, is a legally binding contract. However, it differs from a contract (formal signed agreement) in that only one party (the issuer) is required to sign it.
- This is a purchase that has as its sole or main purpose the buying of tangible items, such as equipment, parts, supplies, or other merchandise. If any services are to be provided as well, the dollar value associated with the purchase of the goods must be greater than the dollar value of the services that will be provided.
- A purchase Order requires a three way match for payment:
- Purchase Order
- Stock Received in CFS
- Vendor invoice
The vendor cannot be paid unless all three items are accounted for.
A Service Order
- Is an instrument that technically can be used in much the same manner as a purchase order (signed unilaterally by the issuer), except that a service rather than a commodity is proposed to be rendered to the requester.
- Service means any work performed wherein the service rendered does not consist primarily of the acquisition of goods. This classification does not include public works project agreements, or professional service agreements in connection with a public works project.
- A service order requires a two way match for payment
- Service Order
- Approval of the invoice for the amount stated on the service order.
Standing & Blanket Purchase Orders
- From time to time, buyers will use standing or blanket purchase orders for commodities such as office or cleaning supplies.
Standing Order is used when the buyer and the vendor have agreed on:
- A fixed price
- Specific goods
- Specific delivery schedule
For example, the vendor will deliver three cases of copy paper, at $30 per case, to the Biology Department every Wednesday, effective July 1, 2010 - June 30, 2011. The delivery should occur automatically, once the order is placed. A Standing Order usually covers a period of one year. At the end of the year, a new purchase order number should be obtained and a new purchase order generated.
Blanket Order is used when the buyer knows he will be ordering a variety of items, but has not determined specific quantities or delivery dates at the time the order is created. The order should include:
- A description or catalogue number of the items the buyer anticipates ordering
- The price or percentage of discount the buyer and vendor agree upon
- Estimated quantities, if possible
- Effective dates of the order
The buyer should include a "not to exceed" dollar value for individual order releases and the total amount of the purchase order. The order is delivered on request and the buyer should provide the vendor with a list of people authorized to request deliveries. A Blanket Order usually extends for a period of one year. At the end of the year, a new purchase order number should be obtained and a new purchase order generated.
- Is a formal agreement, signed by all parties who are to be bound (legally) by its terms and conditions. Contracts can be issued for any number of purposes, but usually the purpose is to acquire a service or commodity from a provider in exchange for some form of consideration (usually money). The CSU Agreement form is commonly the instrument used for such a contractual purpose.
- The promotion of fair and open competition by the University in the acquisition of goods and services to meet its needs is indispensable to maintaining its operational health. Not only does it normally result in the best use of the University’s limited financial resources, but also by preventing favoritism, it provides a professionally viable climate in which the Procurement and Contract Services Office may conduct its business. When properly implemented, it achieves optimal benefits to everyone involved, including the general public in regard to the best use of the University’s budget as appropriated by the California Legislature.
- There are numerous ways to promote fair and open competition. They include, but are not limited to, public advertising for bids or proposals; the use of the California State Contracts Register (CSCR); direct notifications to known vendors and service providers; initiating outreach programs, an extensive use of vendor and contractor source files for bidding purposes and simple telephone calls to obtain informal quotes.
- Requisitions which are generally processed without formal bidding at the buyer’s discretion are as follows:
- Requests for supplies or equipment which total $250,000.00 or less where the recommended vendor is a California Certified Small Business or Disabled Veteran Business Enterprise (DVBE).
- Requests for services which total $50,000.00 or less.
- Supplies ordered from existing State Contracts, State Price Schedules , or CSU Master Agreements.
- Competition is sought, via either formal or informal solicitation, for transactions under $50,000 whenever the Procurement and Contract Services Office determines that competition is necessary to develop a source, validate prices or for other sound business reasons. Informal solicitations may be secured either orally or in writing. The number of vendors from whom quotes or bids are solicited is the responsibility of the Buyer and will generally depend upon the size, complexity of the purchase, and market conditions.
- The selection of a vendor or contractor to satisfy a university need is not necessarily based upon the lowest responsible bid or quote received. While this certainly must be a prime criterion, the quality of the product or service, provider reliability, warranties and several other factors also can (and often should) enter into the decision to award an order or contract. In general, awards are based upon one of three different solicitation approaches:
- A RFQ (request for quotation) may be utilized to obtain price quotes for products or services whenever the estimated cost is less that the threshold established in policy for acquiring formal bids. An informal solicitation may be verbal,, emailed, faxed, or mailed. RFP
- An IFB (invitation for bid) based upon the acceptance of the lowest responsible bid for a product that has been fully described with detailed specifications accompanying the solicitation. An IFB must be conducted by the University Procurement and Contract Services Department
- A RFP (request for proposal) awarded on the basis of the highest score attained from an evaluation process. The RFP conveys essentially what is needed but leaves the detailed specifications to the proposer. RFP’s are conducted by the University Procurement and Contract Services Department.
Limits on Competitive Bidding (use of Sole Source, Sole Brand and Or Equal clauses)
- No agency or employee of the State of California may draft any specifications for bids in connection with the purchase of supplies or materials in such a manner as to limit the bidding to any one bidder. Likewise, no invitation for bid or request for proposal may be drafted for services in such a manner as to limit the bidding to a single bidder.
- There are occasions when only a single source (or a single brand) exists or is suited to accomplish the need at hand. When this is the case, documentation is required to show why a non-competitive award must be issued. Such documentation is termed justification.
- Except in cases where a product of a specified brand name is the only product that can properly meet the needs of a requester, the drafting or application of specifications or bid requirements that directly or indirectly limit the bidding to a single brand is prohibited. A brand name or equal is a competitive process that allows bidders to propose equivalent items.
Sole source or sole brand requests shall not be justified on the basis of:
- A lack of advance planning by the requiring activity which would necessitate not having adequate time to be in compliance with the procurement process.
- Concerns related to the amount of funds available
- A previous non-competitively bid contract in which the price was zero or substantially below fair market price and the results of such contract caused the sole source or sole brand to be required on future contracts.
- A sole source procurement is permissible only when a determination has been made and approved in writing that only one source exists for the required product or service. A requirement for a proprietary (or sole brand) item does not necessarily justify a sole source procurement, as more than one potential bidder or supplier may exist who can supply that item.
- A request for a sole source acquisition must include a written justification explaining why the sole source is necessary to satisfy the needs of the requester. The justification shall include the following information:
- The unique performance factors required;
- Why these factors are required;
- What other sources have been considered and rejected and why.
The Procurement and Contracts Office provides Sole Source and Sole Brand Justification Forms on our website at http://www.csus.edu/aba/forms.htm# [Procurements & Contracts] for campus use.
A completed form is required for sole source and sole brand requests that entail expenditures of $50,000 or more.