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Purchase Bidding

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Purchase Bidding document sample

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									Procedure 3205 PR.2
Bidding and Cost Analysis
Revision Date 6/1/99


  1 – Overview of Policy and Requirements .....................................................................................................................................1
      Overview ...............................................................................................................................................................1
      Determine the Level of Bidding Required.............................................................................................................1
  2 - Obtain Bids ..................................................................................................................................................................................2
      Obtain Bids from Vendors.....................................................................................................................................2
      Web price lists and Catalogue listings...................................................................................................................2
      Negotiate with Vendors .........................................................................................................................................2
  3 – Perform Cost/Price Analysis .....................................................................................................................................................3
      Life Cost ................................................................................................................................................................3
      Other Cost Analysis Factors ..................................................................................................................................3
      Conflict of Interest.................................................................................................................................................4
  4 – Document Analysis of Vendor Selection .................................................................................................................................4
      Document the Analysis..........................................................................................................................................4
      Specify the Vendor ................................................................................................................................................4


1 – Overview of Policy and Requirements

Overview
Selection of University vendors for goods and services should be conducted in a way that evaluates the
mix of quality, service and price to best match the stated needs of Yale's programs. To satisfy its
purchasing objectives and to promote compliance with Federal regulations, the University requires
individuals who are authorized to select vendors and make purchases to perform some measure of cost
price analysis. See Policy 3205, Vendor Selection, for a full discussion of the University's policy.
The bidding process for goods or services valued at $2,000 or greater must be documented and stored
as part of the transaction record.
Purchases of $ 2,000 or greater from vendors with whom the Purchasing Department has negotiated a
University-wide contract or blanket order do not require further documentation. Such purchases are
deemed to meet the bid criteria because of the negotiation process performed by the Purchasing
Department prior to the establishment of the purchasing agreement.
Purchases from vendors qualifying as single or sole source suppliers must be explained on an
Explanation of Single/Sole Source Vendor form, which becomes part of the transaction record. (See also
Single/Sole Source form instructions.)

Determine the Level of Bidding Required
The level of bidding required and documentation to be submitted is determined by the dollar amount of
the purchase.
Note: The Purchasing Department will solicit bids as required for purchase requisitions forwarded to them.
Requisitioners may undertake bidding prior to submitting a requisition if they wish to name a preferred
vendor or to take a more active role in the purchasing process. Those purchasing goods or services
without using the purchase requisition process are responsible for obtaining bids according to this
procedure.
Individuals holding purchasing cards are responsible for obtaining, documenting and retaining required
verbal bids for purchases made using the card. Refer to the procedure for Requesting and Maintaining a
Purchasing Card for more details.
                                                                                         Bidding and Cost Analysis
   If the dollar                                                Then…
  amount of the
  purchase is…
 under $2,000           • Quotations from vendors may be submitted, but are not required.
                        • Informal cost/price analysis is expected.
 from $2,000            • Obtain verbal quotations from at least three (3) vendors.
 through $9,999         • Document the verbal bids. The Verbal Quotation Record form is available for this
                          purpose. Include the names of the vendors and the quoted prices, and the name
                          of the person with whom you spoke, if available.
                        • Submit bid documentation with the purchase requisition. Attach the bids to your
                          purchasing card transaction record, or to the OK to Pay invoice, if either of those
                          methods is used.
                        • Retain your copy of the bid document as part of the transaction record.
 $10,000 or more        • Obtain written bids from at least three (3) vendors.
                        • Assemble the bid documents and attach them to the purchase requisition or your
                          purchasing card records.
                        • Retain the bids as part of the purchasing record.

2 - Obtain Bids

Obtain Bids from Vendors
1. Refer to Policy 3205, Vendor Selection, to help identify potential vendors to contact for bids.
2. Contact at least three vendors that supply the item or service being sought.
3. Give each vendor the same precise and accurate description of the specifications and technical
   requirements for the item or service. Request the following information:
     • clear description of the specifications for the item or service being quoted
     • net cost of the requirement, either as a whole or by its components
     • cost of maintenance, if applicable
     • delivery time and shipping/installation cost
     • terms and conditions of payment
     • warranty and other data applicable to individual situations.
4. Verbal bids may be obtained over the telephone or in person at a vendor location. The Verbal
   Quotation Record form is available for listing the bid details.
5. Written bids may be received by US mail, fax or email and should be signed by a representative of
   the vendor.

Web price lists and Catalogue listings
Prices obtained from reputable company web sites or catalogues can be considered verbal bids.
A limited number of companies have negotiated agreements with Yale and have supplied web sites for
Yale users to browse products and specifically negotiated prices. Only in these cases can a quoted price
from the web site be printed out and used as a written bid.
Consult the Procurement web site for detailed information about vendor contracts and catalogs.
(http://www.yale.edu/procurement)

Negotiate with Vendors
1. Evaluate the following factors with respect to their priority to the requisitioner:

6/1/1999                                                                                               Page 2 of 4
                                                                                      Bidding and Cost Analysis
     • Price
     • Quality
     • Lead time
     • Delivery method (vendor delivery or customer pick-up)
     • Required and/or desired features as they relate to target price
     • Arrangements for installation, if necessary
2. Determine the time frame available to negotiate and make the purchase decision.
3. Confirm that all information provided by the potential vendors is correct.
4. List all the assumptions that the buyer and the supplier have made regarding the purchase.
5. Do not discuss the specifics of competing bids with vendors; such information is confidential.
6. If undertaking renegotiations based on the results of the first round of bidding, make sure that all
    vendors that have quoted on the purchase have an equal chance to submit another bid based on any
    changes or modifications to the proposal.
7. Be aware of the applicable federal regulations with regard to purchases funded by grants or contracts,
    including those regarding debarred or suspended vendors. Refer to Policy 3205, section 2.E for
    further information.


 3 – Perform Cost/Price Analysis

Life Cost
The life cost of an item reflects its true cost over its expected useful period, including maintenance.
Evaluate the life cost of a product when analyzing price and cost information.

Other Cost Analysis Factors
Include the following basic evaluations in your analysis:
     • Does the vendor provide the best mix of quality, service and price for the specified University
       need?
     • Federal regulations require that the lowest price have priority, unless quality, service or delivery
       time takes priority as to need.
     • Proximity to Yale, in relationship to the Buy New Haven program. City of New Haven vendors are
       given preference, to the extent practical and economically feasible.
     • Qualification as a small, disadvantaged, minority or women-owned business, when the business is
       willing and able to compete for University business under the same terms and conditions defined
       for all vendors.
     • Does the vendor have the financial stability, size and service infrastructure to be capable of
       meeting the University's needs?
     • Are the product quality and performance reputation of the vendor acceptable in the context of
       University use?
     • Do the vendor warranty, service reliability and format, shipping or delivery procedures, and terms
       and conditions of sale protect University interests?
     • Does the vendor supply products and services that conserve natural resources, are energy
       efficient and protect the environment? Vendors are given preference, to the extent practical and
       economically feasible, for such products.



6/1/1999                                                                                            Page 3 of 4
                                                                                                            Bidding and Cost Analysis
      • With respect to goods and services used on Federal grants and contracts, confirm that a potential
        vendor is not debarred, suspended or proposed for delinquency under applicable Federal
        regulations, as required. See Policy 3205, section 2.E for further details.

Conflict of Interest
Identify in the vendor evaluation documents any known personal interest or relationship of any Yale
employee in the enterprise under evaluation. This step is critical for the purposes of avoiding conflicts of
interest and for ensuring avoidance of private inurement.
For more information, consult the University’s guidelines on ethical practice: Policy 3201, General
Purchasing, sections 3201.3, Separation of Duties, and 3201.4, Ethical Practices.


4 – Document Analysis of Vendor Selection

Document the Analysis
Document your evaluation of vendors with respect to the life cost and other factors described in Step 3:
Such documentation serves the following functions:
      • as a reference for comparison with current vendor performance,
      • as a basis for performance expectation and review, and
      • as documentation for audit purposes.
Documentation of cost/price analysis serves as justification for the choice of vendor and becomes part of
the purchasing transaction record.

Specify the Vendor
1. Determine the vendor that best meets all criteria, taking into consideration University policies, Federal
   regulations, and requisitioner needs and specifications.
2. Attach to the purchase requisition (or to the purchasing card transaction record):
      • original written bids, as required, and
      • documentation of cost/price analysis.
3. A Buyer or Certified Buying Agent completes the purchasing process by selecting, or approving the
   selection of the vendor and creating a purchase order.
4. The purchasing cardholder completes purchases made using his or her card.



The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are
  dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.




6/1/1999                                                                                                                     Page 4 of 4

								
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