4. Purchasing of Goods and Services
D.4.01 Purchasing Authority:
The System shall comply with Texas Education Code Section 44.031 in establishing open and fair purchasing and bidding practices that provide the best value to the System.
Board approval is required for purchases or contracts of $50,000 or more over the contract term including options to renew. Authority for purchases and contracts for the procurement of goods or services below $50,000 can only be delegated by the Chancellor. Delegated authority to procurement personnel may be removed if unacceptable behavior or job performance is observed.
The authority to approve purchase orders, check requests, and employee expense and petty cash reimbursements is given to directors, managers and other employees as delegated by the Chancellor and LEOs.|
D.4.02 Policy Applicability:
This policy applies to the purchase of tangible personal property or services except as follows:
a. Purchases of real property; or
b. Purchases of professional services (see “Purchasing Professional Services” subsection, above);
D.4.03 Purchasing Objectives:
When purchasing equipment, supplies, materials, services, hardware, and software, the two factors which drive the purchasing process, and the decisions to be made, are:
a. Obtaining the best overall value for the System; and
b. Fairness. Procurement activities shall be conducted in an open and fair manner with equal opportunity provided to all qualified suppliers. The System will provide equal contracting opportunities as provided by federal, state and local laws and regulations to historically underutilized businesses.
The purchase of equipment, supplies, materials and services shall be based upon a competitive process, except as otherwise provided in this Policy. Purchases may not be subdivided to avoid the competitive requirements of this Policy.
D.4.04 Administrative Requirements:
Unless otherwise covered by the sections above or required by law to meet other requirements, all purchases of goods or services made on behalf of the System shall meet the administrative requirements outlined below.
a. Purchases Valued Below $10,000
Minor purchases of goods or services less than $5,000 in value may be made without a competitive process.
Purchases of goods and services valued at $5,000 or more and less than $10,000 shall follow an informal competitive process that includes obtaining at least three quotes. These quotes may be obtained by telephone, fax, or other electronic means, and shall be documented and accompany the purchase requisition.
b. Purchases Valued at $10,000 or More and Less than $25,000
Purchases of goods or services that are $10,000 or more and less than $25,000 shall be made by requesting written quotations from at least three (3) vendors on the System Purchasing Department vendor list or any additional vendors the System elects to include. Written quotations shall accompany purchase requisitions.
c. Purchases Valued at $25,000 or More
All purchases of $25,000 or more for goods or services shall be coordinated through System Purchasing Department. These purchases shall follow a formal competitive process that includes:
i. Pre-qualification and selection of suppliers;
ii. Standards and specifications;
iii. Requests for bids/proposals;
iv. Submission of bids/proposals, and public openings; and
v. Award of purchase orders and contracts.
d. Administrative Approval
Purchases valued at $25,000 or more and less than $50,000 require approval by the Associate Vice Chancellor for Business Support Services.
e. Board Approval
All purchases of $50,000 or more for goods or services require Board approval, except as otherwise stated in this policy.
f. Emergency and Sole Source Purchases
At times, it may not be in the System’s best interest to engage in a formal competitive process. Purchases necessary to respond to emergencies (situations that jeopardize public or employee safety, or that could result in significant financial or operational loss), and sole source purchases which are purchases where only one supplier can provide the product or service (e.g. the product or service is protected by patent, copyright or trademark; or due to schedule conflicts, etc., only one supplier can provide the product or service when it is required) do not require a formal competitive process. Sole source purchases must be justified in writing and approved in advance by the System Director of Purchasing. Emergency purchases must be justified in writing and approved in advance by the Chancellor for purchases $50,000 or more, by the Vice Chancellor for Business Affairs/CFO for purchases between $50,000 and $25,000 and by the Associate Vice Chancellor of Business Support Services for less than $25,000. Emergency and Sole Source purchases of $50,000 or more must be approved or ratified by the Board of Trustees.
g. Inter-local Purchase Agreements
The System may enter into an inter-local purchase agreement with another local government or with the state or a state agency to purchase goods or services. Inter-local purchase agreements that are $50,000 or more, whether payable in a one time payment or in installments, over the contract term, shall be approved by the Board of Trustees. Purchases may be made through the agreement without a competitive bid process after a market analysis determines that the best value for the System is through the agreement. Documentation of the best value decision must accompany purchases for $25,000 or more.
D.4.05 Departure from Policy:
There may be instances that justify a departure from the normal competitive process. Departures from this policy shall be approved, in advance, by the Chancellor or authorized designee.
D.4.06 Contract Award Criteria:
In awarding a contract, the System must consider:
a. Purchase price, including delivery and installation,
b. The reputation of the vendor and of the vendor’s goods or services,
c. The quality of the vendor’s goods or services,
d. The extent to which the goods or services meet the System’s needs,
e. The vendor’s past relationship with the System,
f. The impact on the ability of the System to comply with laws relating to historically underutilized businesses,
g. The total long-term cost to the System to acquire the goods or services, and
h. Any other relevant factor specifically listed in the request for bids or proposals.
D.4.07 Long-Term Contracts:
The use of long-term contracts is encouraged to maximize the efficiency of the procurement process or to optimize long-term pricing. Long-term contracts shall not exceed five years. A contract that exceeds the end of the System’s fiscal year must include a provision that permits termination at the end of the fiscal year if funding is unavailable.
D.4.08 Bidding Requirements:
All bidding practices shall be in conformance with state law. The System will establish practices to identify when bids shall be required and when other practices of obtaining needed goods and services shall be utilized.
Bid openings shall be public and those submitting bids are invited to attend. The Board or authorized designee has authority to reject any and all bids.
All bids shall be conducted through the System Purchasing Department unless specific authorization is granted through Board approval.
The System may hold pre-bid conferences and may, upon proper notice, make the attendance at such a conference mandatory. The System will not open or consider any bid submitted by any vendor who did not attend a mandatory pre-bid conference.
D.4.09 Surety Bonds:
The System may, at the discretion of the Chief Financial Officer, require bid surety, payment bonds and performance bonds.
Bid surety bonds shall be returned to all bidders except the successful bidder at the time the award is made. The surety bond of the successful bidder shall be retained until the merchandise has been delivered and inspected for quality and other requirements of the bid.
D.4.10 Personal Purchases:
System employees shall not be permitted to purchase supplies or equipment for personal use through the System, or through special discounts and arrangements made between the System and its qualified vendors.
D.4.11 Further Guidance:
Guidelines and procedures for compliance with this Policy shall be developed and implemented by the Chancellor or authorized designee.