The purpose of this procedure is to provide clear direction to all RIT employees utilizing federally granted funds; to ensure compliance with required federal laws and regulations; and to ethically execute the purchasing function to best serve the mission of RIT.
This procedure applies to all purchases for materials, supplies, equipment, services, contracts, service and maintenance agreements and leases made using federal funds or flow-through funds.
In December 2014, the Office of Management and Budget (OMB) issued the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (Uniform Guidance). The Uniform Guidance includes procurement procedures required when using federal funds. The information below summarizes the Uniform Guidance in regards to procurement, but it is important that all Principal Investigators (PIs) on federally funded grants read the procurement sections of the Uniform Guidance, 2 CFR §200.317 through §200.326, to ensure compliance.
Procurement Standards and PI Responsibilities
It is the responsibility of the College and PIs to ensure that federal grant funds are used properly.
In addition to the RIT standard purchasing policy and procedures as documented in the Procurement Services Manual, PIs are directly responsible for the following:
Ensure purchases are reasonable, necessary, and approved grant purchases
Avoid purchasing unnecessary or duplicative items
Use surplus property in lieu of purchasing new equipment and property
Government Surplus auctions
Analyze lease versus purchase alternatives
Maintain oversight to ensure contractors perform in accordance with terms and conditions
Maintain documentation to support procurement decisions
Adhere to all College, funding agency, and federal policies
Conflict of Interest Considerations
The Uniform Guidance requires that the College “maintain written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award and administration of contracts.” (Code of Federal Regulations, Title 2 – Grants and Agreements, §200.318 General Procurement Standards (c)(1); May 30, 2017). For this reason, it is necessary for PIs to adhere to the University Policy C04.0 Individual Conflict of Interest and Commitment Policy.
The RIT Policy states, ”A Conflict of Commitment exists whenever an employee’s external commitments, relationships, or activities have the possibility—whether potential, real, or perceived—of interfering or competing with the university’s mission or with the employee’s ability or willingness to perform the full range of responsibilities associated with his or her position.” Any potential conflict of interest (including interest in any sales, supplies, or services by immediate family members of an employee) should be disclosed in accordance with the Procedures for the Implementation of the Conflict of Interest and Commitment Policy.
What are the Methods of Procurement?
This section introduces basic definitions of the five defined methods of procurement. For purposes of calculating your project costs, purchase costs are aggregate dollar amounts purchased from a supplier, not unit costs. Calculate the total purchase price of all units, not the individual cost of the item(s), to determine the appropriate purchase threshold below. Documentation may be required to verify why the procurement threshold was chosen. See the “What Purchasers Need to Know and Do” section below for specific procurement procedures.
the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $5,000 (verify specific awarding agency does not still consider $3,500)
Effective July 1, 2018 the University has elected to increase our micro purchase threshold to $5,000 in response to the NDAA 2017 issued on December 23, 2016, which allows University to have a micro purchase threshold up to $10,000.
the acquisition of supplies, services, or equipment, the aggregate dollar amount in the range of $5,000 to $250,000
the acquisition of supplies, services, or equipment, the aggregate dollar amount exceeding $250,000, where a clear bid specification is available, the procurement lends itself to a firm fixed price contract, bids are publicly solicited and the award can be made principally on the basis of price
the acquisition of supplies, services, or equipment, the aggregate dollar amount exceeding $250,000, where price and other factors are considered important, bids are publicly solicited and either a fixed price or cost-reimbursement contract is awarded
procurement through solicitation of a proposal from only one source
For additional information on each of these methods, refer to 2 CFR §200.320 of the Uniform Guidance.
What Purchasers Need to Know and Do
Contracting with Small and Minority Businesses, Women’s Business Enterprises, and Labor Surplus Area Firms
The College and PIs must take all necessary affirmative steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. See 2CFR §200.321 for affirmative steps. Visit Supplier Diversity on the Procurement Services web page for assistance identifying potential qualified suppliers.
RIT is a 501(c)(3) tax-exempt organization and, therefore, does not pay New York State sales tax for certain items. Purchasers should contact SPA for guidance about sales tax prior to purchasing. If needed, SPA will provide the purchaser with a NYS sales tax exemption certificate. Taxes for which exemptions are available are unallowable costs.
PIs and purchasers should choose the appropriate procurement threshold below and follow the procedures described below. The Competitive Procurement Policy applies to all purchases. The following sections incorporate additional guidance that applies to purchases made using public grant funds. Questions should be directed to the Procurement Services Director of Operations or Sourcing Strategy Specialist.
For aggregate purchases less than $5,000, the purchaser should use his or her own judgment in identifying potential suppliers. Purchases must be reasonable and may require explanation for determination of the reasonableness. If the purchaser is uncertain as to whether or not a purchase qualifies as a micro-purchase, contact the Procurement Services Sourcing Strategy Specialist prior to making the purchase. Records must be maintained to support the purchase decision.
For aggregate purchases between $5,000 and $250,000, the purchaser will need to document at least three price quotes and the basis for vendor selection prior to making a purchase. Documentation from the vendors needs to be in writing and can include screen shots from websites, copies of published price lists, and advertised pricing in established magazines or journals. Price or rate quotations must be obtained from a minimum of three qualified sources prior to making a purchase. A Price Summary Form and Federal Funds Procurement Checklist must be submitted to the Procurement Services Sourcing Strategy Specialist before making the purchase.
Purchasers must follow section 2 CFR §200.320 of the Uniform Guidance.
For aggregate purchases greater than $250,000, purchasers will need to contact the Procurement Services Office to assist with the formal publicized bid process. The PSO will work collaboratively with the PI to facilitate this process and meet all federal requirements, whether a Sealed Bid or Competitive Proposal. Therefore, it is important that the purchaser communicate plans for major purchases as early as possible to allow reasonable time to accomplish the bidding procedure. Prior to soliciting bids, an independent estimate must be established. The independent estimate can range from a simple budgetary estimate to a complex estimate based on inspection of the product itself and review of items like drawings, specifications and prior procurement data. The word "independent" does not imply that it is performed by someone other than the grantee. This could be the case, however, if the grantee does not have the expertise for a large complex procurement. The independent estimate is especially critical whenever there is no price competition (e.g., for architect-engineer procurements or where only one price proposal is received), or where price proposals for goods or services are not exactly comparable (e.g., for procurements of high-technology items or professional services). It is also useful in competitive procurements to alert the agency when all competitors are submitting unreasonably high cost proposals. A Price Summary Form and Federal Funds Procurement Checklist must be submitted to the Procurement Services Sourcing Strategy Specialist before making the purchase.
Purchasers must follow section 2 CFR §200.320 of the Uniform Guidance.
Sole Source Purchasing
For aggregate purchases greater than $5,000 and in which the aforementioned means of procurement are not appropriate, the purchaser may request that the standard procurement procedures be waived. For an exception to be valid, a clear statement of justification must be submitted for approval in writing. A waiver must be submitted to Procurement Services and approved prior to making any purchase commitment. See “How Do I Request a Waiver?” below for instructions.
Example situations that would justify purchases without the competitive bid process are:
The supplier is obviously a sole source for the item. Examples:
Unusual and not generally available used equipment
A very specialized piece of scientific equipment
A specialized service (lobbyist, consultant) when the supplier has a one-of-a-kind ability to provide the required service due to demonstrably unique circumstances (knowledge, contacts, experience)
There is an undeniable compatibility requirement. The item will be connected to existing equipment or the purchase is an upgrade to existing equipment/software.
Subcontracts which explicitly approve sole source purchasing, whereby such an agreement was written into the grant award
There has been an unpredictable emergency and there is no time to bid. Examples:
Human life, health or College property is in jeopardy
Repairs are immediately needed for equipment where delay would lead to higher expense