> MSU Policy and Procedures > Procurement Policy and Procedures
600.00 Getting it Purchased - Procurement Tools
section contents
620.00 Limited Solicitations
630.00 Sole Source Procedures
630.10 Brand Name Procedures
640.00 Competitive Sealed Bids - Invitation for
Bid
650.00 Competitive Sealed Proposals - Request for
Proposal
660.00 Exigency (Emergency)
Purchase
660.10 Exigency Purchase Report
600.00
Getting it purchased - Procurement Tools
Departments are required to follow the
procedures established herein within their delegated purchasing authority. Funds administered by
Montana State University are subject to Federal, State and internal audit;
therefore, purchasing procedures must be consistent with established State Law
and institutional policies and practices.
610.00 Small
Purchases
Purchases with a
Total Contract Value of $5,000 or less
Departments are authorized to purchase supplies and
services with a total contract value of $5,000 or less except for the items
identified in Section 330.
The
following procedures apply:
-
Select a purchasing
technique that best meets your needs. Departments are encouraged to follow
prudent purchasing practices and obtain competition where practicable. Common
purchasing techniques include telephone bids (see
Appendix O), written bids,
or obtaining bids via the Internet. Departments are encouraged to use
the State's Vendors List for these purchases.
-
Departments are not
allowed to artificially divide requirements to keep the total contract value
under dollar the thresholds defined herein, simply to avoid procurement
methods for purchases over $25,000.
-
Services: See
Section 820.00 "Contracted Services Agreement"
-
Purchases awarded
using "Small Purchase" Procedures are not subject to protest procedures.
-
Sole source
procedures do not apply to Small Purchases.
620.00
Limited Solicitations
Purchases with a
Total Contract Value over $5,000 and up to $25,000
Departments are authorized to purchase supplies and
services with a total contract value of $25,000 or less except for the items
identified in Section 330. Montana Public Law (MCA 18-4-302) requires
broad-based competition for all state purchases with a total contract value greater than $5,000. Competitive procedures must be
used for all purchases greater than $5,000 to enhance competition. Departments must obtain a
minimum of three viable bids
(bids), if available. Bids can be obtained via the phone (oral), in writing,
fax, e-mail, or Internet. The department representative
should use market research to identify three viable sources. Numerous market
research tools include searching the Internet, researching catalogs,
contacting vendors, communicating with your peers, or contacting the MSU-PD.
The Internet provides numerous search engines.
Obtaining Bids
1. Departments must use "Limited
Solicitation" procedures for purchases with a total contract value greater
than $5,000 and up to $25,000.
2. Departments must solicit a minimum of three (3) bids from suppliers. Bids
can be obtained via phone (oral), written, fax, e-mail or Internet. To obtain
written bids, departments shall issue a "Request for Written Bids" (Form
PD-46). This form is located at Appendix P. To obtain phone bids, departments
shall use the "Tabulation of Bids Resulting from Limited Solicitation
Procedure" (PD‑20). If three viable sources cannot be identified, the
department representative must document the actions taken to try to identify
viable sources.
3. Award shall be made to the vendor offering the lowest bid that is
responsive to the solicitation. If the lowest bid does not meet the
specifications identified on the Request for Written Bids, the Department
representative must document the reason(s) for non-acceptance, in writing.
4. For certain purchases, departments may wish to consider factors other than
lowest bid. Departments are authorized to use factors other than lowest bid to
determine acceptability (e.g., qualifications, available staff, references,
delivery date, inspection, testing, quality and workmanship, etc.) for making
an award. When using this approach, departments must use a "Request for
Written Bids - Factors Other Than Lowest Bid" (Form PD-47) located at
Appendix
Q and provide this written solicitation to vendors. The solicitation must
include evaluation criteria that are objectively measurable, such as
discounts, delivery dates, transportation costs, or life cycle costs. The
written solicitation is used to provide vendors with the evaluation criteria
and their relative importance.
5. Departments must complete the "Tabulation of Bids Resulting from Limited
Solicitation Procedure" (PD‑20) and submit this form with the BPA, see
Appendix O. Departments shall retain a copy of all bids received.
6. Services: Refer to Section 820.00 "Contracted Services Agreement".
7. Departments are not allowed to artificially divide requirements to keep the
total contract value under the $25,000 threshold, simply to avoid procedures
established for procurements with a higher dollar value.
8. Contracts awarded using Limited Solicitation Procedures are not subject to
protest procedures.
630.00: Sole Source
Procedures
Sole source acquisitions
have an adverse effect on competitive procedures.
Departments are advised to use this
method sparingly since we are the guardians of our taxpayer dollars. Quoting
Ralph Waldo Emerson 1803-1882:
"Money is of no value; it cannot spend itself. All depends
on the skill of the spender."
Departments are authorized to use sole source procedures when certain
conditions are met (MCA 18-4-306). Conditions that would necessitate a sole
source procurement are: (1) the compatibility of current services or
equipment, accessories, or replacement parts, (2) there is no existent
equivalent product, or (3) only one source is acceptable or suitable for the
supply or service item.
If a supply or service is only available from one source, departments are
authorized to use sole source procedures. When using sole source procedures, departments
must complete the "Sole Source Justification" (PD‑14). Please refer to
Appendix H.
Purchases with a
Total Contract Value of $25,000 or less:
Departments must submit a copy
of the Sole Source Justification with the BPA. A copy of the bid is
recommended, but not required.
Purchases with a
Total Contract Value greater than $25,000:
The PD-14 must be
submitted with the Purchase Requisition to the MSU-PD. The Department must
provide a signed and dated quote. Upon review, the MSU-PD may request
additional documentation prior to approval of the sole source justification.
The MSU-Bozeman Purchasing Director and Controller will make the final
determination to approve or disapprove the sole source procurement per ARM
2.5.604.
630.10: Brand Name
Procedures
"Brand Name" is
distinguishable from "Sole Source" in that a sole source procurement occurs
when only one supplier is available to provide the supply or service.
Brand Name
or Equal Specification:
A description that references all brand
name commercial products known to be acceptable; the current manufacture; and
specifies the essential requirements and salient characteristics considered
necessary to ensure that the brand name or equal products offered will satisfy
the end use application.
If a brand name is applicable,
departments must complete a
"Brand Name Justification" (PD‑24). Provide the brand names and model
numbers, indicating the level or quality desired. Identify
the minimum requirements and ensure the stated minimum is a product that will
satisfy the department's needs. However, this information does not indicate a
restriction to or acceptance of only those brands per ARM 2.5.501.
Please refer to
Appendix F.
640.00 Competitive
Sealed Bids - Invitation for Bid
The MSU-PD will prepare the IFB and
provide a copy of the IFB to the department after issuance of the IFB.
Departments should review the IFB for accuracy and notify the MSU-PD
immediately if any discrepancies are found.
Tabulation of Bids:
The due date and time for
bids will be indicated on the IFB. Upon receipt of bids from vendors, the
bids are retained in sealed envelopes until the assigned time for the formal
bid opening. At the assigned time, the bids are opened and tabulated by the
MSU-PD. Departments are welcome to attend bid openings (in person or via
phone). Vendors are welcome to observe the bid opening process. Please advise
the MSU-PD if a department representative plans to attend the bid opening.
If the department does not attend the bid opening, the results will be
provided to the department via telephone, E-mail or campus mail on the
"Tabulation of Bids for Department Review" (Form PD-8).
If the bid results are relatively
uncomplicated (i.e. no alternate bids or the bids appear to meet all
specifications), the department may be contacted by telephone and given the
bids results verbally. A verbal approval may be given by the department to
issue the Purchase Order.
In some cases, the department may need to review the bids and/or vendor
literature. When review of the bids is required, the
MSU-PD will notify the department via the PD-8. The department is responsible
for reviewing the bids to ensure the lowest bid meets all specifications. If
the lowest bid meets all specifications, the department representative shall
complete the PD-8 and return it to the MSU-PD via Email, campus mail or fax.
Please remember to sign the PD-8. Signature on the PD-8 is not required when
responding via Email. In the event the lowest bid does not meet the
specifications, the department representative must provide a detailed
explanation of how it does not
meet the specifications. If this situation occurs, the Purchase Order will be
awarded to the next lowest acceptable bid that meets the specifications.
Contract Award:
The MSU-PD will prepare and issue a
Purchase Order. The MSU-PD will send a copy of the Purchase Order to the
department (see
Appendix I,
MSU-Bozeman Purchase Order). Depending on the Requisition, the following State
Agencies may issue a Purchase Order on behalf of MSU: SPB, Print and Mail
Services Bureau, or Property and Supply Bureau (See
Appendix B, State Purchase Order).
Departments are encouraged to review the Purchase Order for accuracy.
Contract Modifications:
Requests to modify a contract, i.e.,
revise the scope of work, order additional quantities, or extend the period of
performance, must be submitted to the MSU-PD. Requests must be submitted in
writing to the MSU-PD. The appropriate approval authorities must approve the
request. If the modification increases the value of the contract, approval for
the increase must be obtained at the same approval level that was required for
the original Requisition. For increases of $25,000 or less, the Department
Head and Dean/Director shall authorize the increase. For increases of $25,000
or more, the appropriate Vice President shall authorize the increase. If the
increase changes the TCV over $25,000, the appropriate Vice President or
Grants and Contracts must approve the increase. Modifications to contracts
issued by the MSU-PD will be made only by the MSU-PD. Modifications to
contracts issued by the SPB will be made only by the SPB.
Requests to Change Index Numbers:
Requests to change index numbers must
be submitted to the MSU-PD in writing and signed by the appropriate approval
authorities, Department Head, Dean, G&C and/or applicable Vice President.
Vice President signature is required if the total contract value exceeds
$25,000 and funds using other than G&C funds. See
Appendix E.
An RFP is a formal invitation to a
potential offeror to submit a proposal to provide a solution to a problem or a
need that the Agency has identified. The RFP provides the Agency the ability
to judge if an offeror's qualifications, experience, and approach will provide
the best solution to the Department's needs. This process allows the
University to consider factors other than lowest price. This process is used
when the skills, expertise, or technical capability will be evaluated and when
the requirement is fairly detailed or complex.
The MSU-PD and the Department will work together to prepare the RFP based on
the requirements set forth in the Purchase Requisition. The MSU-PD will
provide a draft copy of the RFP to the department for review and approval.
Departments will assist in developing the evaluation criteria and will review
the RFP for accuracy and notify the
MSU-PD immediately if any discrepancies are found.
There are several steps in the RFP
process. The MSU-PD will provide guidance and training to the department in
accordance with "Initiating and Navigating the Request for Proposal Process"
issued by the Montana SPB.
660.00 Exigency (Emergency) Purchase
Exigency purchases,
commonly referred to as
an
Emergency Purchase,
is
defined as a
purchase made without following normal
purchasing procedures due to a sudden and unexpected happening or unforeseen
occurrence/condition, which requires immediate action. Exigency procurement shall be limited
to those supplies or services necessary to meet the exigency.
Under very limited
circumstances, a department may need the flexibility to make an "exigency"
purchase. It should never include a situation created by poor planning on the
part of the using agency. This procedure should not be used to satisfy
personal preferences or convenience on the part of the department, for
preventing funds from reverting at the end of the fiscal year, or for any
reason that seeks to circumvent regular procurement methods.
Exigency
procedures are established in the Administrative Rules of Montana 2.5.605.
The following procedures must be
considered when making a determination regarding exigency purchases:
1. An exigency procurement greater
than $5,000 must be limited to those supplies and services necessary to meet
the exigency.
2. The determination to use exigency
procedures must be made by the Director of Purchasing. If the Director of
Purchasing is not available, the Controller, the appropriate Vice President,
or higher authority may make the determination. This determination must be in
writing and must state the basis for the exigency procurement and for the
selection of a particular vendor.
3. The
procedure used shall be selected to assure that the required supplies or
services are procured in time to meet the exigency. However, such competition
as is practicable shall be obtained.
The record of exigency procurement must contain:
-
The contractor's name;
-
The amount and type
of the contract;
-
A list of supplies and
services procured under the contract; and
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Written documentation
justifying the exigency procurement and the basis for the selection of a
particular vendor.
The following procedure must
be followed when exigency situations arise. The exigency procurement shall be
limited to those supplies or services necessary to meet the exigency.
1. Procedure: For an exigency purchase
with a total contract value greater than $5,000, Departments are required to
obtain approval from the Director of Purchasing and/or the Controller,
appropriate Vice President or higher authority. Departments must submit an
Exigency Purchase Report (Form PD-71) to the MSU-PD, per
Appendix L). Please refer to
Appendix K for instructions for
completing the PD-71. The following forms must be submitted with the EPR, if
applicable:
-
BPA
-
Sole Source
Justification (PD-14)
-
Brand Name Justification
(PD-24)
-
Justification to Acquire Major Office
Equipment (PD-30)
-
Data Processing Equipment and Software (DPES)
Justification
2. The MSU-PD will review the
documentation and approve or disapprove the purchase. If approved, the MSU-PD
will issue a contract if it is deemed in the best interest of the University.
If necessary, additional substantiation will be requested to satisfy potential
audit requirements. The Purchasing Director, Controller, and/or Internal
Auditor may contact the Department to obtain further insight on the situation.
The EPR request may be disapproved if the documentation does not
justify an exigency situation. If this occurs, the Controller will recommend
the Department return the merchandise or find alternate non-state funds to pay
for it.
3.
Distribution:
.The MSU-PD will keep one copy of the Exigency
Purchase Report and attachments.
.The MSU-PD will attach the
documentation to the original BPA and
forward the BPA to the Controller's Office or Grants and Contracts.
The
BPA will remain on file at the Controller's Office. Payment will not be
processed until a complete package has been approved.
.One copy of the
Exigency Purchase Report will be returned to the originating Department stamped "EXIGENCY PURCHASE
TRANSACTION. DOCUMENTATION ATTACHED TO BPA FOR
PERMANENT FILES. ENCUMBRANCE OR ADDITIONAL PROCESSING WILL NOT BE
MADE."
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