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Purchasing Common Goods and Services: MM0001
Effective Date: May 7, 1997



Purchasing Common Goods and
Services

(Policy MM0001)


I. Purpose/Scope of the Policy

It is the practice of the University to meet its need for goods and services at the
lowest overall cost, while affording the maximum opportunity practicable to those
who wish to become suppliers to the University.
The following policy applies to purchases of common goods and services only.
Other business-related contracts, including real estate leases/rentals, copyright
licenses (for use of software, music, plays, etc.), independent consultants, and
performance agreements are handled through Central Purchasing; see UCSC Policy
BUS0001: Responsibility for Business Contracts. All purchases of common goods
and services shall be executed on purchase orders. The following goods and
services shall be executed on the forms specified below.

COMMODITY  CORRECT
FORM
RESPONSIBLE 
CAMPUS
 UNIT
UCSC
 Policy or
 Procedure
Design Professionals  Agreement  P.P. & C. (Senior
 Architect)
Maintenance/Replacement  Work Order  Physical Plant
 (Work Order 
Desk)
Building alterations  CFR  P.P. & C. (Senior
Architect)
External Auditors Agreement  Internal Audit
 Office (External Audit Coordinator)
External Counsel  Agreement General Counsel
(Office of
General Counsel
Incidental Personal
Services (see definitions)
Personal
Services Short
Form Agreement
Materiel
Management
(Director of
Materiel
Management)

Policy:
MM0004

This policy provides guidelines for the purchases of common goods and services,
including (A) general provisions, (B) authority to purchase, and (C) method of
source selection.

II. Detailed Policy Statement

A. General Provisions

1. No employee of the University shall make, participate in, or attempt to
    influence any purchasing decision if the employee knows or has reason to
    know that he/she has a financial interest in the outcome of that decision.
    See Policy MM0003: Employee-Vendor Relationships and Conflict of
    Interest.

2. Purchases of goods or services shall not be made from any employee
    unless there has been a specific determination by the Director of Materiel
    Management that (a) the goods or services are not available either from
    commercial sources or from the University’s own facilities, (b) no conflict
    of interest exists, and (c) no University time, materials, equipment, or
    facilities have been or will be used in connection with any resulting
    purchase order or contract. See Policy MM0003: Employee-Vendor
   Relationships and Conflict of Interest.

3. For all purchases, the price paid must be determined to be reasonable. It is
    the responsibility of the buyer approving the purchase to make this
    determination.

4. Purchase requirements shall not be artificially divided to avoid the review
    and approval of Central Purchasing or avoid competition.

5. Goods and services covered by Primary Planned Purchasing or campus
    agreements shall not be purchased from other sources unless the exception
    involves special delivery requirements or substantial differences in
    specifications which preclude the use of the contract source. Any
    exceptions must be approved by the Director of Materiel Management.

6. Competition may be required at any time if the Director of Materiel
    Management determines it necessary to develop a source, validate prices,
    standardize purchases or for other compelling reasons.

B. Authority to Purchase

1. Purchases of unrestricted goods and services up to $500 may be made
    by UCSC personnel who have been granted delegations in writing by the
    appropriate administrative official.

2. Purchases of unrestricted goods and services up to $2,500 may be
    made by UCSC Service Center personnel who have been granted
    expanded purchasing authority. The expanded purchasing delegation shall
    require (a) observance of good business practices, (b) compliance with
    University and campus purchasing policies and procedures, and (c)
    successful completion of specialized training sessions.

3. Purchases of goods and services over $2,500 and all restricted goods
    and services shall be made by UCSC Central Purchasing in accordance
    with good business practices and University and campus purchasing
    policies and procedures.

C. Method of Source Selection

1. Purchases of unrestricted goods and services up to a maximum of
    $2,500 require only one quotation.

2. Purchases between $2,501 and $50,000 may be made by negotiating a
    reasonable price or by soliciting informal quotations. The use of
    negotiation does not preclude the use of competitive methods; however,
    competitive bidding need not be the predominant method for transactions
    in this price range.

3. Purchases over $50,000: Unless otherwise authorized by law, all
    purchase contracts for goods, materials, and services, other than personal
    or professional services, of more than $50,000 annually shall be awarded
    by formal competitive bidding to the lowest responsible and responsive
    bidder whose bid meets the requirements and criteria set forth in the
    request for quotations, or else all bids will be rejected. The lowest
    responsible bidder is determined on the basis of: cost alone, or on a cost
    per quality point basis.

4. Exceptions: The requirement for competitive bidding of goods and
   services in excess of $50,000 shall not apply when the Director of Materiel
   Management determines that:

a. only one supplier sells a product or service that will properly meet the
    needs of the University within the time available (usually applicable
    to emergency and other situations which preclude conventional
    planning and processing).

b. only one supplier sells a product or service that will properly meet the
     needs of the University because the item or service is unique.

c. only one supplier sells a product or service that will properly meet the
   needs of the University because the item or service is designated to
   match others used in a particular location.

d. only one supplier has the exclusive right to manufacture and sell a
    product or service and that product or service is the only one that will
    properly meet the needs of the University.

Note: When competitive bids are not solicited, the reason for not seeking
competition shall be documented.

III. Definitions

Common Goods: Standard commercial equipment, materials, and supplies readily
  obtainable through conventional commercial marketing channels.

Common Services: Standard services readily obtainable from competent
  independent contractors. The selection of the independent contractor providing
  common services is usually based on price (i.e., the lowest quote meeting
  specifications wins the bid). Examples include equipment maintenance and
  repair, data processing, protection and security, and installation services.

Expanded Purchasing Delegation: A written authorization granted by the
  Director of Materiel Management to individuals outside Central Purchasing,
  delegating the authority to make purchases of unrestricted goods and services in
  amounts up to $2,500 per order, excluding transportation costs and sales or use
  tax.

Formal Bid: A bid that must be submitted in a sealed envelope and in
  conformance with a prescribed format, to be opened at a specified time.

Incidental Personal Services (Low Risk, Low Cost): A service is considered lowcost
  if it is under $500 and low risk if it is unlikely to result in physical injury or
  any other significant liability to the University.

Independent Consultant: An independent consultant is an individual or
  organization outside the University of recognized scientific, professional or
  technical competence who provides primarily written and/or oral professional or
  technical advice in an independent contractor relationship. The services of
  independent consultants are secured with an Independent Consultant Agreement.
  See Policy MM0004: Purchasing Personal and Professional Services, and
  Procedure BUS0003: Independent Consultants.

Independent Contractor: An individual, agency, or business outside the
  University which performs a service for another. The service may or may not
  produce a tangible product.

Informal Quotation: An unsealed competitive offer conveyed by telephone,
telegram, fax, or in writing and under conditions different from those required for
formal bidding.

Personal and Professional Services: Infrequent, technical, or unique functions
  performed by an independent contractor. The selection of an independent
  contractor providing personal and professional services is usually based on skill,
  knowledge, reputation, and creativity. Price may be a secondary factor in the
  selection. Examples of personal services are translation, technical writing and
  editing, art modeling, and group discussion leaders. Examples of professional
  services include accountants, appraisers, archaeologists, architects, attorneys,
  consultants, engineers, physicians, researchers, and real estate brokers. See
  Policy MM0004: Purchasing Personal and Professional Services.

Reasonable Price: A reasonable price does not exceed that which would be
  incurred by a prudent person in the conduct of a competitive business.
  Reasonable price can be established by competition, market test, price or cost
  analysis, or the experience and judgment of the buyer. Such judgment considers
  total value to the University. There is value to the University in purchases which
  meet the University’s needs, such as those involving service, quality, quantity,
  and delivery. A reasonable price need not be the lowest price available, but is one
  which offers the highest total value to the University.

Request for Bids (RFB): The document used for soliciting formal bids.

Request for Information (RFI): The document used in informal, uncompetitive
  solicitation of information, data, comments, or reactions from possible suppliers
  preceding the issuance of a Request for Proposals.

Request for Proposals (RFP): The document used to solicit competitive
proposals. The RFP is usually used to solicit proposals for personal and
professional services.

Request for Quotations (RFQ): The document generally used for soliciting
  informal quotations.

Responsible Bid/Quotation: A bid/quotation submitted by a bidder who has the
  capability in all respects to fully perform the contract requirements and whose
  integrity and reliability will assure good faith performance. Factors considered in
  evaluating responsibility may include: financial resources, past performance,
  delivery capability, experience, organization, personnel, technical skills,
  operations controls, equipment, and facilities.

Responsive Bid/Quotation: A bid/quotation which conforms in all material
  respects with the requirements set forth in the request for bids/quotations.

Restricted Goods and Services: Certain goods and services must be purchased by
  buyers in Central Purchasing. These restricted goods and services include:
  firearms and explosives, ethyl alcohol, controlled substances, personal and
  professional services over $500, unapproved caterers, vehicle leases/rentals,
  equipment leases/rentals, all charters (including boat and bus).

IV. Getting Help

The campus Central Purchasing provides training and assistance to campus units
(including help with completing forms, carrying out procedures, or interpreting
policy).

If you need help with ...  Contact ...
...developing
specifications
Central Purchasing, x92311.
...approved caterers Central Purchasing/Director of Materiel
Management, x92084.
...Employee-vendor
relationships
Central Purchasing/Director of Materiel
Management, x92084.
...other conflict of interest
questions
Conflict of Interest Coordinator, x92241.
...insurance requirements  Insurance and Risk Management Office, x92853.

V. Applicability and Authority

This policy on Purchasing Common Goods and Services applies to all campus
purchases of common goods and services, except the following:

Activities for which the State of California requires that the contractor
have a valid license to perform work (such as maintenance and
construction). See the University Facilities Manual for information.

It is a new policy and thus supersedes any campus practice in existence prior to its
effective date.

The campus Director of Materiel Management is the campus authority for the
policy on Purchasing Common Goods and Services. This policy was reviewed and
approved by the Chancellor on May 7, 1997. Next review date is January 1999.

VI. Related Policies/References for More Information

Related Policies and Procedures

UCSC Policy MM0002: Purchasing Conduct and Ethics

UCSC Policy MM0003: Employee-Vendor Relationships and Conflict of
   Interest

UCSC Policy MM0004: Purchasing Personal and Professional Services

UCSC Policy BUS0001: Responsibility for Business Contracts

UCSC Procedure BUS0002: Business Contracts

UCSC Procedure BUS0003: Independent Consultants

References

UC Business & Finance Bulletin BUS-34 - Securing the Services of an
   Independent Consultant

UC Business & Finance Bulletin BUS-43 - Materiel Management

UC Business & Finance Bulletin BUS-50 - Acquisition and Use of Narcotics
    and Dangerous Drugs

Public Contracts Code


UC Santa Cruz Policy

Central Purchasing                                                                                           lrose@cats.ucsc.edu; (408) 459-2084