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Competitive Bidding Guidelines
financial policy #2308 requires competitive bids for all purchases with an
aggregate value of $5,000 or more. Normally, a minimum of three bids from competent
sources of supply are required to satisfy the University's competitive bidding
requirement. Faculty and staff are empowered to solicit bids/quotations from competent
suppliers; however, Purchasing Services staff members
are available to assist in the solicitation of competitive bids.
Utilization of Approved Contract Suppliers
Prior to soliciting competitive bids, the requestor should check the Purchasing
Services Preferred Contract Supplier list
to determine if the required product or service is available from an existing contact
supplier. The benefit of using an existing contract supplier is that the competitive
bidding process to secure the least total cost has already been completed by
Purchasing Services. The University's competitive bidding requirement is waived
when a purchase with an aggregate value of $5,000 or more is made from a contract
supplier. The competitive bidding requirement is also waived for any purchase made
from suppliers available in the Penn
Marketplace, the University's eProcurement supplier marketplace.
The Competitive Bidding Process
In order to ensure appropriate stewardship of University resources, a determination
has to be made to show that a proposed price for an aggregate purchase of $5,000
or more is fair and reasonable, considering the quality, delivery and other factors.
Competitive bidding is the formal process that allows a requestor and/or
Purchasing Services to properly survey the marketplace.
When requesting formal quotations from potential suppliers, the requestor
should ask for terms and conditions that are favorable to the University and their
department, rather than accept what is in the best interest of the supplier.
Whenever possible, the request for quotation should be submitted in writing to
potential suppliers, or electronically utilizing the University's online bidding tool called SmartSource from IASTA, to avoid any miscommunication or misinterpretation of expectations
and/or specific requirements. Supplier responses must also be submitted in writing
or electronically when utilizing the bidding tool with quoted prices, terms and conditions clearly documented in the response.
All formal quotations should detail the requirements both parties, the University
and the supplier, have agreed upon.
Things to Consider When Soliciting Competitive Bids
Purchasing Services staff members are available to provide assistance to faculty
and staff and can represent the University in a formal solicitation for competitive
bids. By contacting Purchasing Services before you are ready to solicit bids for
a desired product or service, you can take advantage of our professional purchasing
experience, capabilities, and technology to help realized the least total cost for
the desired product and service. This can be accomplished by using a traditional
competitive bidding process or new
Electronic Sourcing (Reverse Auction)
technology. For electronic sourcing Purchasing Services has partnered with IASTA,a software and global service provider of cost effective online competitive bidding technology. The IASTA tool called "SmartSource", has been designed to be used as a centralized repository for sourcing projects with an integrated document library and bidding templates for use by the campus community. Assistance with using SmartSource is available at any time from the eBusiness Administrator. Purchasing can also assist in the sourcing of competent bidders;
develop the formal request for quotation documents, and/or manage the entire
competitive bidding process.
For faculty and staff interested in soliciting quotations directly from external
suppliers, we offer the following guidelines when soliciting quotations from
- Each potential bidder must receive the same information and business
requirements. Be as specific as possible with requirements. Include manufacturer
name and part number if available, a complete description of desired product(s)
and/or services, the delivery location and required-by date.
- Provide a copy of the University's
purchase order terms and conditions
if requested by a potential bidder.
- Obtain at least three quotations from competent sources of supply.
In support of the University's commitment to supplier diversity, include suppliers
from the Purchasing Services
West Philadelphia and
Minority & Women Owned
supplier lists in the bid solicitation process whenever possible.
- Provide a contact name, phone number and e-mail address for suppliers that
may have questions regarding the request or requirements.
- Clearly define bid submission instructions and submittal day and time.
At no time should one supplier's proprietary information be shared with another
supplier. Please remember to allow sufficient time (usually two weeks for complex
requests) for the supplier to respond to a Request for Quotation.
Once the bids have been received from the suppliers, analyze the proposals to
determine with supplier is able to meet all business and delivery requirements,
at the least total cost. Contact Purchasing Services if help is required to assess
each proposal to determine which represents the best value to the University.
Request to Waive the Competitive Bidding Requirement
The competitive bidding requirement can be waived for a purchase of products or
services with an aggregate value of $5,000 or more when the product or service is
available from only one non-contract supplier, thereby exempting the purchase from
the otherwise required competitive bid policy of the University. This is done under
exceptional and limited circumstances. Even though there may not be an opportunity
to competitively bid the requirement, a formal request for quotation should still
be sent to the supplier. This request acts in the same way as a formal competitive
bidding process is used, to obtain a formal price quotation including terms and
conditions for the desired product or service.
In order to waive the competitive bidding requirement, the faculty or staff member
requesting the exemption must provide Purchasing Services with a detailed written
explanation as to why competitively bidding the product or service would be
impracticable and that the cost charged by the supplier is reasonable and customary.
The formal request to waive the competitive bidding document must include all
necessary information regarding the purchase and be submitted to Purchasing Services
for review and approval as part of the purchase order approval process in the
BEN Buys purchasing system. Such request should
include specific technical requirements of the product or service, supportable evidence
that due diligence has been performed in an objective market analysis and proof of
fair and reasonable pricing. Purchasing Services reserves the right to negotiate
pricing or to solicit additional information and remains the final authority on
all procurement issues.
Conditions for Waiving the Competitive Bidding Process
A non-competitive purchase is any request, which, by the specifications needed by
the requestor, restricts the purchase to one supplier or to one brand. Examples of
non-competitive purchases include:
- Equipment for which there is no comparable competitive product, for example, a one-of-a-kind centrifuge that is available from only one supplier.
- A component or replacement part for which there is no commercially available substitute, and which can be obtained only from the manufacturer.
- An item where compatibility is the overriding consideration, such as computer operating software enhancements for an existing system.
- A supply, equipment, part, service or supplier that, due to technically constraining factors associated with scientific research, are needed to ensure the fairness and validity of the underlying research.
- Repair/replacement parts for non-competitive equipment.
- Continuation of an existing contract when work is so closely related to that of the uncompleted basic contract that it would not be feasible to consider another potential contractor.
If the justification submitted is not sufficient, the request will be denied and
the unapproved purchase order in the BEN Buys purchasing system will be rejected to
the original requisitioner. Submission of a request to waive the competitive bidding
process does not indicate automatic approval. It is not approved until the
appropriate Purchasing Services staff member reviews
and approves the request.
Sole Source Justification
A sole source justification for a purchase order with to total dollar amount of
$5,000 or more will only be approved if:
- The requested product is an integral repair part or accessory compatible with existing equipment
- The requested product or service is essential in maintaining research continuity or to remain in compliance with established university standards
- Only a particular brand or "make" is compatible with existing equipment or inventory
- Only one source is known for a specialized item of equipment or service
- Only one supplier is capable of providing the required service
The sole source justification is to be entered into the "Notes to Approved"
field in the purchase requisition or faxed (fax #: 215-898-9396) directly to
Purchasing Services. The document(s) faxed to Purchasing Services must
reference the related BEN Buys purchase order number.
Each Sole Source Justification request must include:
- A clear statement of the unique performance factors of the product or supplier specified
- Why those unique factors are required
- What other products or suppliers were evaluated
- The reason(s) for rejecting the other products or suppliers
Purchasing Services reserves the right to reject any unacceptable or poorly
justified sole source justification request.