Competition Requirements for Small Purchases Greater Than or Equal to $20,000 Policy

Policy Approval Authority President
Responsible Division Division of Administration and Finance
Responsible University Office Procurement Services and Contract Management
Responsible Officer(s) Director
Contact Person Antoinette Bridges
Primary Audience Faculty
Staff
Date Submitted to Policy Library Committee 11-01-2019
Status Active
Proposed Adoption Date 11-01-2019
Effective Adoption Date 11-01-2019
Last Review Date 11-01-2019
Policy Category/Categories Finance / Risk Management

Policy


To ensure reasonable competition pursuant to Section 4.2020 of the IL Administrative Rules, the University requires the submission of multiple quotes (a minimum of two quotes required) for requisitions that are considered a small purchase and are greater than or equal to $20,000.

In conducting small purchase procurements for commodities (supplies), services, and construction, the University shall use practices that ensure maximum reasonable competition and promote small businesses, diversity, transparency, and other statutory requirements. Small Purchases is defined as services or supplies under the threshold of $100,000.

Departments shall seek diverse vendors (minorities, females, persons with disabilities and veterans) for purchases greater than or equal to $20,000.00 and under the small purchase limit by soliciting at least one quote from a Business Enterprise Program (BEP) certified diverse vendor (women, minorities, persons with disabilities & veterans), when available.

Link for Business Enterprise Program (BEP) certified diverse vendor https://cms.diversitycompliance.com/

A requisition (including open orders) that is less than the small purchase limit ($100,000), but greater than or equal to $20,000 must include written documentation demonstrating competition from multiple vendors (PSCM Quote Form 2019-1). Small purchases should be made from the vendor that offers the lowest cost or the best value to the University.

The individual submitting a purchase requisition shall document that quotes were solicited from multiple vendors, including diverse vendors and small businesses. If the University does not receive multiple quotes, documentation demonstrating the reasons why must be submitted (uploaded as an attachment in the Peoplesoft system (P2PO), along with the purchase requisition using the Small Purchase Waiver form. Small Purchase Waiver form can be found on the niu.edu/procurement/forms.

 

If a purchase requisition is submitted for a vendor that is not the lowest-cost vendor, the individual submitting the requisition must complete the Small Purchase Waiver form, documenting the justification for the request.

Small purchase limits may be adjusted annually or by rules promulgated by the Chief Procurement Officer for Higher Education and published on the Illinois Procurement Bulletin for Public Institutions of Higher Education.

Pursuant to changes in the Illinois Administrative Code, the University is required to establish practices that ensure maximum, reasonable competition and promote small businesses, diversity, transparency, and other statutory policies. Documentation of each purchase must be maintained in the procurement file. This policy outlines the procedures to meet these requirements. See 44 IL Admin Code 4.2020 for additional information.

The Illinois Procurement Code (30 ILCS 500/20) states the applicable source selection and contract formation requirements. This policy is applicable to all purchases subject to the Illinois Procurement Code that are below the small purchase limit ($100,000).

A requisition for supplies (commodities), services and construction that is greater than or equal to $20,000, shall include documentation demonstrating competition from multiple vendors. A minimum of two quotes is required, with one from a certified BEP vendor is required. This document must include either:

  • Quotes from multiple vendors for the supply/service requested, or
  • Small purchase waiver documenting the reason(s) why multiple quotes were not attainable.

The small purchase should be made with the vendor that offered the lowest cost and/or best value. If a purchase requisition is submitted with a purchase to a vendor other than the lowest cost vendor, the individual submitting the requisition must complete the Small Purchase Waiver Form documenting the justification for the request. 

Competition can be demonstrated by (note: use a consistent method of engaging vendors for the same procurement):

  • Obtaining written quotes from competing vendors
  • Requesting pricing via email
  • Web search results demonstrating pricing
  • Telephone quotations (must be documented to state which vendor was contacted and the pricing quoted)

PSCM Quote Form 2019-1 is an example to support obtaining written quotes or documenting verbal/internet quotes.

Note: Obtaining quotes for items that are not similar in nature is not considered "reasonable competition."

Departments have a shared responsibility to consider small and diverse businesses in this competitive process. Small and diverse businesses can be identified by searching the Illinois Department of Central Management Services' Business Enterprise Program (BEP) and Small Business Set-Aside Program directories or by contacting Procurement Services & Contract Management department.

Purchases for supplies or services that are not prohibited or restricted and are less than $20,000 may be purchased through Peoplesoft (P2PO) purchase requisition as the normal process. Allowable purchases for supplies that are less than or equal to $5,000 may be purchased using a Purchase Card (P-Card). If possible, competition should be sought by Departments and/or cardholders making these purchases.

Open Orders

Requisitions for open orders require the same level of competition as other small purchases. When an open order is for a catalog of items, the requester should use historical purchase information to determine the quantities and types of products being purchased, in order to compare pricing catalogs from multiple vendors. Catalog items are considered to be a vast array of items one vendor can provide. For example if the requester routinely buy cleaning solutions, cleaning towels, brooms, mops, etc., then the requester should seek quotes from multiple vendors for the common items procured.

Exemptions

The purchases identified below are exempt from the Procurement Code and competition does not need to be demonstrated.

  • Membership in professional, academic, research, or athletic organizations on behalf of a public institution of higher education, an employee of a public institution of higher education, or a student at a public institution of higher education (30 ILCS 500 / 1-13(b)(1))
  • Events or activities paid for exclusively by revenues generated by the event or activity, gifts, or donations for the event or activity, private grants, or any combination thereof (30 ILCS 500 / 1-13(b)(2))
  • Events or activities for which the use of specific potential contractors is mandated or identified by the sponsor of the event or activity, provided that the sponsor is providing a majority of the funding for the event or activity (30 ILCS 500 / 1-13(b)(3))
  • Athletic, artistic or musical services, performances, events, or productions by or for a public institution of higher education (30 ILCS 500 / 1-13(b)(4))
  • Periodicals, books, subscriptions, database licenses, and other publications procured for use by a university library or academic department, except for expenditures related to procuring textbooks for student use or materials for resale or rental (30 ILCS 500 / 1-13(b)(5))
  • Placement of students in externships, practicums, field experiences, and for medical residencies and rotations (30 ILCS 500 / 1-13(b)(6))
  • Programming and broadcast license rights for university-operated radio and television stations(30 ILCS 500 / 1-13(b)(7))
  • Performing sponsored research and other sponsored activities under grants and contracts funded by the sponsor or by sources other than State appropriations (30 ILCS 500 / 1-13(b)(8))
  • Contracts with a foreign entity for research or educational activities, where the foreign entity does not maintain an office in the United States or the foreign entity is the sole source of the service or product (30 ILCS 500 / 1-13(b)(9))
  • Medical supplies or medical services necessary for the delivery of care and treatment at medical, dental, or veterinary teaching facilities utilized by SIU or U of I (30 ILCS 500 / 1-13(b-5))
  • Medical supplies or medical services at a university-operated care center ir dispensary that provides care, treatment, and medications for students, faculty and staff (30ILCS 500 / 1-13(b-5))
  • Purchase of care as defined in 1-15.68 of the Illinois Procurement Code (30 ILCS 500 / 1-10 (b)(3))
  • Hiring an individual as an employee by contract directly with the individual (30 ILCS 500/1-10(b)(4))
  • A real estate property purchase valued over $25,000 (30 ILCS 500 / 1-10(b)(6))
  • Anticipated litigation, enforcement actions, or investigations (30 ILCS 500 / 1-10(b)(7))
  • Services, commodities, and equipment to support the delivery of timely forensic science services (30 ILCS 500 / 1-10(b)(13))
  • Domestic or international trade show or exhibition of an exhibitor, member or sponsor (30 ILCS 500 / 1-10(b)(14))
  • Contract with a railroad or utility that requires the state to reimburse for the relocation of utilities for construction or other public purpose (30 ILCS 500 / 1-10(b)(15))

Purchases under an Existing Contract

Competition does not need to be demonstrated if a purchase is made under an existing contract, as competition was established through the initial solicitation/award process. Examples of where a small purchase may be made under an existing contract include:

Stringing

Dividing or planning procurements to avoid use of competitive procedures (known as 'stringing') is prohibited. A review for potential string may occur when the total value of three or more purchases for the same or similar items exceed the small purchase limit during any 12-month period. The Purchasing Director and State Purchasing Officer will jointly determine if a competitive or other consolidated procurement is warranted.

Definitions

Exclusive:  Vendor is the only one capable of providing specified product or service (e.g. unique part for a device or maintenance).

Emergency or schedule requirement: Failure of a device/device part, unusable device/device part, and/or incompatible device/part required an immediate purchase to avoid loss of data, research results, programmatic delays or harm to program participants.

Processing time Vendor turnaround time to produce the good or service facilitates research and programmatic timelines required under the award.

Compatibility: The item purchased must be integrated into an existing device, experiment or research effort, or instructional sequence.




 

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