Procurement Services 301: Competitive Thresholds

Purpose

To provide information on competitive bidding requirements so departments can appropriately plan purchases.

Reference

University of Alaska Procurement Manual (not available online) Board of Regents Policy 05.06 State of Alaska Statute 36.00

Definitions

Competitive Bidding: The process of requesting price quotations on an item or service.

Policy

Competitive Requirements

Alaska statutes and university procurement regulations require that purchases in excess of $5,000 be competed to ensure that the university is getting the best value as it procures goods and services to support its mission. The process includes, written or verbal specifications submitted to potential vendors or contractors requesting them to submit pricing via an informal quote or proposal for goods or non-personal services with a value of $5,001 to $50,000; or a formal bid or request for proposal for goods, non-personal or professional services over $50,000.

A university procurement officer will formulate the specifications and/or scope of work in the Invitation for Bid or Request for Proposal documents based on the information provided by the department on the requisition, in supporting materials or in verbal communication. Vendors are generally given a standard amount of time to respond to university solicitations. However, sometimes changes to the original quote, bid or proposal are necessary and an amendment is prepared. An amendment will usually provide the vendors additional time to respond to the new terms of the solicitation. Because of the possibility of changes, be sure to plan ahead for larger dollar purchases as they often take much longer than smaller purchases.

Exemptions from Formal Competition
There are items and services that are, by their nature and of necessity, exempt from competitive procedures. Nevertheless, all exempt purchases are subject to a standard of price reasonableness. Examples of exempt items and services include awards, institutional memberships, art acquisitions, subscriptions, publications, speakers and performers.

Effective: 10/25/2005


The following table shows the form of competition required depending on the type of purchase and the dollar amount.

Goods and Non-Personal Services

AMOUNT OF PURCHASE ORDER OR
AWARD

REQUIRED PROCUREMENT ACTION

$0 to $5000

No required competition.  Purchases made
as needed per the best judgment of
department and Procurement Services.

$5001 to $50,000

For goods: Competition through a request
for quotation.  For non-personal services:
Competition through a request for
quotation or informal proposal.

Over $50,000

For goods and non-personal services:
Formal solicitation through a request for
proposal or invitation for bid.

Professional Services

AMOUNT OF PURCHASE ORDER OR
AWARD

REQUIRED PROCUREMENT ACTION

$0 to $50,000

No required competition.  Purchases made
as needed per the best judgment of
department and Procurement Services.

Over $50,000

Formal solicitation through a request for
proposal or invitation for bid.