- 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
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 of $5,000 or less
Departments are authorized to purchase supplies and services with a total contract value of $5,000 or less 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 over $25,000.
- 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.
620.00 Limited Solicitations
Purchases with a Total Contract Value over $5,000 and up to $25,000
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 Public Law (MCA 18-4-302) requires broad-based competition for all state purchases with a total contract value greater than $5,000. Competitive procedures must be used for all purchases greater than $5,000 to enhance competition. Departments must obtain a minimum of three viable bids (bids), if available. Bids can be obtained via the phone (oral), in writing, fax, 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 Services. The Internet provides numerous search engines.
- Departments must use "Limited Solicitation" procedures for purchases with a total contract value greater than $5,000 and up to $25,000.
- Departments must solicit a minimum of three (3) bids from suppliers. Bids can be obtained via phone (oral), written, fax, 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, quality 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.
- 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 $25,000 threshold, 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 with the BPA. A copy of the bid is recommended, but not required.
Purchases with a Total Contract Value greater than $25,000:
The PD-14 must be submitted with the Purchase Requisition to Procurement Services. The Department must provide a signed and dated quote. Upon review, Procurement Services may request additional documentation prior to approval of the sole source justification. The MSU-Bozeman Director of Procurement and Associate Vice President of Finance will make the final determination to approve or disapprove the sole source procurement per ARM 2.5.604.
630.10: Brand Name Procedures
"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 or Equal Specification: 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, departments must complete a "Brand Name Justification" (PD‑13). Provide the brand names and model numbers, indicating the level or quality desired. Identify the minimum requirements and ensure the stated minimum is a product that will satisfy the department's needs. However, this information does not indicate a restriction to or acceptance of only those brands per ARM 2.5.501. Please refer to Appendix H.
640.00 Competitive Sealed Bids - Invitation for Bid
Procurement Services will 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 retained in sealed envelopes until the assigned time for the formal bid opening. At the assigned time, the bids are opened and tabulated by Procurement Services. Departments are welcome to attend bid openings (in person or via phone). Vendors are welcome to observe the bid opening process. Please advise Procurement Services if a department representative plans to attend the bid opening.
If the department does not attend the bid opening, the results will be provided to the department via telephone, E-mail or campus mail on the "Tabulation of Bids for Department Review" (Form PD-8).
If the bid results are relatively uncomplicated (i.e. no alternate bids or the bids appear to meet all specifications), the department may be contacted by telephone and given the bids results verbally. A verbal approval may be given by the department to issue the Purchase Order.
In some cases, the department may need to review the bids and/or vendor literature. When review of the bids is required, Procurement Services will notify the department via the PD-8. 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, campus mail or fax. 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.
Procurement 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 following State Agencies may issue a Purchase Order on behalf of MSU: SPB, Print and Mail Services Bureau, or Property and Supply Bureau (See Appendix B, State Purchase Order). Departments are encouraged to review the Purchase Order for accuracy.
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 Services. Requests must be submitted in writing to Procurement Services. 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 Grants and Contracts must approve the increase. Modifications to contracts issued by Procurement Services will be made only by Procurement 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 Services in writing and signed by the appropriate approval authorities, Department Head, Dean, G&C and/or applicable Vice President. Vice President signature is required if the total contract value exceeds $25,000 and funds using other than G&C funds. 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 Agency has identified. The RFP provides the Agency the ability to judge if an offeror's qualifications, experience, and approach will provide the best solution to the Department'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 Services and the Department will work together to prepare the RFP based on the requirements set forth in the Purchase Requisition. Procurement 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 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 an Emergency Purchase, is 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. Exigency procurement shall be limited to those supplies or services necessary to meet the exigency.
Under very limited circumstances, a department may need the flexibility to make an "exigency" purchase. It should never include a situation created by poor planning on the part of the using agency. This procedure should not be used to satisfy personal preferences or convenience on the part of the department, for preventing funds from reverting at the end of the fiscal year, or for any reason that seeks to circumvent regular procurement methods.
Exigency procedures are established in the Administrative Rules of Montana 2.5.605. The following procedures must be considered when making a determination regarding 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, the appropriate Vice President, or higher authority 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 greater than $5,000, Departments are required to obtain approval from the Director of Procurement 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 EPR, if applicable:
- Sole Source Justification (PD-14)
- Brand Name Justification (PD-13)
- Justification to Acquire Major Office Equipment (PD-30)
- Data Processing Equipment and Software (DPES) Justification
- Procurement Services will review the documentation and approve or disapprove the purchase. If approved, Procurement 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 Purchasing Director, University Business Office, and/or Internal Auditor may contact the Department to obtain further insight on the situation. The EPR 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.
- Procurement Services will keep one copy of the Exigency Purchase Report and attachments.
- Procurement Services will attach the documentation to the original BPA and forward the BPA to the University Business Office or Grants and Contracts. The BPA will remain on file at the University Business Office. Payment will not be processed until a complete package has been approved.
- One copy of the Exigency Purchase Report will be returned to the originating Department stamped "EXIGENCY PURCHASE TRANSACTION. DOCUMENTATION ATTACHED TO BPA FOR PERMANENT FILES. ENCUMBRANCE OR ADDITIONAL PROCESSING WILL NOT BE MADE."