Procurement Tools
- Table of Contents
- 600.00 Getting it Purchased - Procurement Tools
- 610.00 Small Purchases
- 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.
Purchases with a Total Contract Value less than $10,000
Departments are authorized to purchase supplies and services with a total contract value less than $10,000 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 at $10,000 and above.
- 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.
Purchases with a Total Contract Value from $10,000 and up to $99,999
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 Law (Section 18-4-302, MCA) requires broad-based competition for all state purchases with a total contract value of $10,000 or above. Competitive procedures must be used for all purchases $10,000 or above to enhance competition. Departments must obtain a minimum of three viable bids, if available. Bids can be obtained via the phone (oral), in writing, 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 Procurement & Contract Services.
Obtaining Bids
- Departments must use “Limited Solicitation” procedures for purchases with a total contract value from $10,000 to 99,999. Purchases exceeding your department’s delegation (typically $25,000 Total Contract Value) must be purchased by Procurement & Contract Services.
- Departments must solicit a minimum of three (3) bids from suppliers. Bids can be obtained via phone (oral), written, 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.
- 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.
- 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, y 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. Please seek assistance from Procurement & Contract Services when using this procurement method.
- 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.
- Services: Refer to Section 820.00 "Contracted Services Agreement".
- Departments are not allowed to artificially divide requirements to keep the total contract value under the bidding thresholds, simply to avoid procedures established for procurements with a higher dollar value.
- 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 to Procurement & Contract
Services in advance of the purchase.. Procurement & Contract Services’ Sole Source
Review Committee will make the determination to approve or disapprove the sole source
procurement.
Purchases with a Total Contract Value greater than $25,000:
The PD-14 must be submitted with the Purchase Requisition to Procurement & Contract
Services. The Department must provide a signed and dated quote. Upon review, Procurement
& Contract Services may request additional documentation prior to approval of the
sole source justification. The MSU-Bozeman Director of Procurement & Contract Services
and Assistant Vice President of Finance will make the final determination to approve
or disapprove the sole source procurement per ARM 2.5.604.
"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: 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 and the brand is available from more than one source,
the purchase must be made in accordance with the competitive procurement requirements
of this policy.
640.00 Competitive Sealed Bids - Invitation for Bid
Procurement & Contract Services will work with the department to 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 Procurement Services 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 electronically sealed until the assigned time for the formal
bid opening. At the assigned time, the bids are opened and tabulated by Procurement
Services. Please advise Procurement Services if a department representative plans
to attend the bid opening.
The bid results will be provided to the department via E-mail. In most cases, the department will need to review the bids and supporting documentation. When review of the bids is required, Procurement Services will notify the department. 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 Procurement Services via Email, 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:
Procurement & Contract Services will prepare and issue a Purchase Order. Procurement Services will send a copy of the Purchase Order to the department (see Appendix I, MSU-Bozeman Purchase Order). Depending on the Requisition, the State Procurement Bureau may issue a Purchase Order on behalf of MSU. Departments should 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 Procurement & Contract Services.
Requests must be submitted in writing. 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 Office of Sponsored Programs
must approve the increase. Modifications to contracts issued by Procurement & Contract
Services can only be made by Procurement & Contract Services. 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 Procurement & Contract Services
in writing and signed by the appropriate approval authorities, Department Head, Dean,
OSP and applicable Vice President. Vice President signature is required if the total
contract value exceeds $25,000. See Appendix E.
650.00 Competitive Sealed Proposals-Request for Proposal
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 Department has identified. The RFP provides
the Department the ability to subjectively score an offeror's qualifications, experience,
and approach to determine who will provide the best solution for the University’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.
Procurement & Contract Services and the Department will work together to prepare the
RFP based on the requirements set forth in the Purchase Requisition. Procurement
& Contract Services 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 Procurement Services immediately if any discrepancies
are found.
There are several steps in the RFP process. Procurement & Contract Services 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 Emergency Purchases, are 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.”
Under very limited circumstances, a department may need to make an "exigency" purchase. Poor planning on the part of the department is not an exigency. This procedure may not be used to satisfy personal preferences, departmental convenience, to prevent funds from reverting at the end of the fiscal year, or for any reason that seeks to circumvent regular procurement methods.
Exigency procurement procedures are established in the Administrative Rules of Montana 2.5.605. The following requirements apply to exigency purchases:
- An exigency procurement greater than $5,000 must be limited to those supplies and services necessary to meet the exigency.
- The determination to use exigency procedures must be made by the Director of Procurement. If the Director of Procurement is not available, the University Business Office, or the appropriate Vice President 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.
- 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
- Written documentation justifying the exigency procurement and the basis for the selection of a particular vendor.
660.10 Exigency Purchase Report
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.
- Procedure: For an exigency purchase with a total contract value $10,000 or above, Departments are required to obtain approval from the Director of Procurement & Contract Services and/or the University Business Office, appropriate Vice President or higher authority. Departments must submit an Exigency Purchase Report (Form PD-71) to Procurement Services, per Appendix L). Please refer to Appendix K for instructions for completing the PD-71. The following forms must be submitted with the Exigency Purchae Report, if applicable:
- BPA
- Purchase Requisition (PD-1) if exceeding $25,000Brand Name Justification (PD-13)
- Procurement & Contract Services will review the documentation and approve or disapprove the purchase. If approved, Procurement & Contract Services 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 Procurement & Contract Services Director, University Business Office, and/or Internal Auditor may contact the Department to obtain further insight on the situation. The Exigency request may be disapproved if the documentation does not justify an exigency situation. If this occurs, the University Business Office will recommend the Department return the merchandise or find alternate non-state funds to pay for it.