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How to Buy
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.
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.
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.
- 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.
- 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.