As a state public university in Ohio, the University is required to complete competitive bids for goods and services that exceed $50,000 with a single vendor within a single fiscal year – regardless of funding source. We also must bid multi-year agreements that have a combined total of $50,000 or more. Competitive bidding is governed by Ohio University Policy 55.007 . This policy complies with the requirements of Ohio Revised Code (ORC) and the Ohio Administrative Code (OAC). In addition, if you have grants you must also follow Uniform Guidance 2 CFR Part 200 Subpart D – Procurement Standards .
Competitive bidding is a form of solicitation that is used when procuring goods and services. Generally, this is done through the issuance of a Request for Proposal (RFP), which details the products or services required by vendors who have an interest in participating in the competitive bidding process.
As a campus buyer, what do you need to know about competitive bidding?
- Competitive bidding helps meet the need for goods and services at the lowest overall cost or best value; complies with external funding source requirements as required by Uniform Guidance; and provides, to the extent possible, open and free competition.
- If you are a buyer, you must consider annual or total multi-year spend for products or services needed on a regular or repetitive basis to determine if a bid needs to be completed.
- If the University’s spend (not departmental spend) in a fiscal year with a single supplier is $50,000 or greater, the good or service must be competitively bid.
- Purchases less than $50,000 can also be bid upon a request to the Procurement Office. Sometimes this helps departments get the best overall cost for the product or service they need, or helps them understand what options within the market-place exist to meet their needs. However, competitive bidding for less than $50,000 is not required.
There are only a limited number of exceptions that can be considered for a bid waiver and all of them require adequate documentation to be presented with the request for waiver form to be considered:
- Sole source – While not common, there are some occasions in which a sole source bid waiver can be obtained. Sole source exists when only one known source or only one single supplier can fulfill the requirement/need. Things like exclusive offers are not considered sole source (as an exclusive offer does not mean that only one supplier exists to meet that need). Sole source requests are considered on a case-by-case basis and approval is contingent upon the facts and support provided for each request.
- Compatibility – This justification may be used if the goods or services are being purchased to directly interface with or attach to equipment of the same manufacturer, and no other manufacturer's goods will correctly interface with existing equipment or provide the uniformity required. Preference is not sufficient for a compatibility bid waiver.
- Emergency – This category means that life will be endangered, property will be destroyed, or considerable cost will be incurred because events are beyond the control of the department if the procurement process is not completed without delay. When you think of emergency think of materials necessary for flood preparation or supplies needed to cope with fire or other natural disaster. An emergency bid waiver does not include things like waiting until the last minute or not properly planning for a required competitive bid event.
- Other – In some very rare circumstances, an exception to bid waiver can be obtained for other reasons. Such requests are considered on a case-by-case basis and Legal Affairs is often consulted to ensure that no state competitive bidding laws are being violated. Approvals for a bid waiver using this category are incredibly rare.
Next month we will review the competitive bidding regulations under Uniform Guidance and how they apply to bidding requirements for external grants. Questions? Contact financecustomercare@ohio.edu