Purchases over $5,000 and the new multiple-quote process

In our previous article, Making a purchase under $5,000, we shared the two options that are available for purchasing goods and/or services under $5,000 when the items are not available through a preferred supplier.

This week we will expand on purchasing options for goods and services over $5,000 and specifically cover options for purchases between $5,000 - $20,000, share information on the new multiple-quote requirement that will be implemented on April 1, 2022 for purchases between $20,000 - $75,000, and discuss contracts for services and requests for proposals.

Procurement and Contract Management (PCM) has redeveloped these processes to create efficiencies under the Service Excellence Transformation (SET) program, but also to establish stronger processes to ensure researchers, faculty, and staff receive the best value for the purchases being made. As a post-secondary institution, there are many regulations and best practices that we are required to follow when funds are spent. Our role in PCM is to ensure value for any product, and value is the best dollar for the quality of the product, but also includes items such as warranty and extended warranty, no cost delivery, and other items negotiated by PCM.

Purchases between $5,000 - $20,000

When placing a purchase between $5,000 - $20,000 the order must be placed through SupplyNet. For purchases of goods and services over $5,000 and under $20,000, it is recommended to obtain more than one quote, however, not mandatory.

It is recommended that departments authorize access to SupplyNet for employees who anticipate placing five or more orders annually from our preferred suppliers and other suppliers in SupplyNet. To request SupplyNet access, visit SupplyNet Requester Access. For more information on SupplyNet, visit our SupplyNet webpage. If you order less frequently, please work with your Supervisor, Academic Department Manager, Finance Partner, or Faculty General Manager to determine the process to purchase goods and services.

Purchases between $20,000 - $75,000 and multiple quotes

Purchases between $20,000 - $75,000 require a SupplyNet purchase order. As of April 1, 2022, if the purchase is not through a preferred supplier, a minimum of two supplier quotations will be mandated for purchases of goods and services between $20,000 and 75,000. Purchases related to an existing contract renewal or extension do not require multiple quotes.

This new multiple quote process ensures a fair and transparent procurement process by sourcing goods, services, and construction through multiple vendors to increase savings and fair competition. While there is a minimum of two supplier quotations, you are able to source additional quotes as needed.

The first step when initiating this process is to determine the total procurement value. This includes annual maintenance fees, warranties and/or goods and/or services that may be required over a period of time. A supplier quote checklist is available to assist with developing a comprehensive quote request; it is recommended, however, not mandatory.

To support the community in navigating this business process, Procurement and Contract Management (PCM) has developed a recommended quote template.

If you decide to make the purchase based on the quotes you receive, a SupplyNet Requisition will need to be created for the selected Supplier. Attach all Supplier Quotations responses and any supporting documents, including any "no quotation" responses. A justification field needs to be completed to explain your decision to purchase from another supplier. This process is mandatory to ensure a successful approval. If you received one or less quotations, follow the single or sole source justification identified below.

In addition, all requisitions above $20,000 route to PCM for oversight and approval. Prior to the April 1 process changes, requisitions $10,000 and above are routed to PCM. The routing approvals have been updated and increased to $20,000 and now align with our multiple quote process requirements.

Single or sole source justification

In the event multiple quotes cannot be obtained, justification for purchasing through a single supplier must be provided. Some examples of these scenarios include situations where suppliers of the good or service are limited or responses to quotation requests are not received. In addition, there are instances when the market only offers a unique supplier. When we have a requirement for a work of art or protection of patents, copyrights, or other exclusive rights come into play, obtaining multiple quotes can be challenging. Sometimes there's an absence of competition for technical reasons or the supply of goods or services is controlled by a supplier that is a statutory monopoly.

This type of reasoning (termed single or sole source justification) should be included when completing the purchase requisition for the order to proceed. When multiple quotes are not received, the Sole and Single Source Justification Form must be completed, with a brief explanation added in the justification field and attached to your order.

Purchases $75,000 and above

To be compliant with Trade Agreements and Legislation, purchases in this threshold (equal to or greater than $75,000 and equal to or greater than $200,000 for construction) must be publicly tendered in a competitive bid process, and completed by PCM.

Note: All SupplyNet Requisitions in this category will route to PCM after Budget Owner Approval for further review and processing.

Request for Proposal (RFP)

Requests for proposals are used for goods and services where values are equal to or greater than $75,000 and construction where values are equal to or greater than $200,000. Use of an RFP ensures proper oversight and approvals are given for large value projects.

Discretionary RFP

As part of the current Request for Proposal (RFP) process at the U of A, PCM receives a request through a requisition in SupplyNet. If the request is equal to or greater than $75,000 in value, an RFP is completed and the service or product is purchased.

As of April 1, 2022, PCM will provide additional oversight and review within the RFP process. In many cases, other opportunities exist including collaboration opportunities, alternative delivery methods (in-house support vs external contractor), and the cancellation of the purchase.

Service contract process redesign

All units are required to follow the directions from PCM when using a Contract for Service (CFS) to complete work at the university. Procurement and Contract Management (PCM) provides oversight and direction for all CFS agreements. All units are expected to follow the outlined processes and follow the directions below:

Do

1. Prior to beginning work, a SupplyNet requisition must be completed.
2. If the value of the agreement is between $20,000 to $75,000, multiple quotes are required and must be submitted with the requisition.
3. If multiple quotes cannot be obtained the completion of the Sole & Single Source Justification form is required and must be submitted with the requisition.
4. Work may commence only once the Purchase Order has been created and approved.

Don't

1. Submit invoices without a previously issued Purchase Order.
2. Sign contracts of any type (this role is completed by PCM). A purchase order can be created in SupplyNet for a contract for service. The university issues a CFS to individuals, small businesses (unregistered or a limited, or incorporated companies ("Contractor") in order to provide services to the university. The purchase order and its associated terms and conditions, approved by Procurement and Contract Management (PCM), ensure that the contractor has a clear understanding of their obligations, including the specific services to be provided.

Information session

PCM recently held an Information Session on March 14 to provide users an overview of the multiple quote process and additional changes to U of A purchasing processes that will be implemented on April 1, 2022. Watch the session for an overview of upcoming changes.