Purchasing Guidelines
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Purchasing Procedures and Contract Requirements
The following is a brief synopsis of the District’s purchasing policies and procedures in compliance with the Education Code, Public Contract Code, and Civil Code. Compliance with these procedures will facilitate processing of orders in a timely manner for each college and the District as a whole. These procedures apply regardless of the funding source. Purchasing Department staff is available to provide assistance and may be reached at (650) 574-6508.
Written Quotes
1. Three verbal or simple email quotes should be obtained for purchases of goods or services when the total dollar amount of the order exceeds $2,000. Three written quotations should be obtained and compared for competitive pricing when the total dollar amount of the order exceeds $5,000. For purchases in excess of $20,000, but less than the legal bid requirement of $72,400, a Request for Quotations must be prepared. The Purchasing Department will assist in any quote gathering required.
Bid Requirements
2. Purchases exceeding $72,400 for materials, supplies or services sold or leased to the District must be legally advertised, formally bid and awarded by the Board of Trustees to the lowest responsive bidder. There are two exceptions to the $72,400 limit: public contract code work and professional services. Public works projects require a formal bid if expenditures are greater than $125,000. This bid process must be completed before purchase orders can be issued. The Purchasing Department is available to assist in drafting proper specifications. Professional services are exempt from bid requirements.
Contracts
3. Contracts are required for all annual service, maintenance agreements, professional services, copyright or licensing agreements, and facility or vehicle rental. These contracts must be submitted to the Executive Vice Chancellor's Office for review and approval prior to services being rendered. Board approval is required for contracted services in the amount of $50,000 or more. Once again, the exception to this amount is public contract code agreements, which require Board approval if they exceed $125,000.
Public Works Project Requirements
4. The District has elected to become subject to the California Uniform Public Construction Cost Accounting Act. The adoption of this act enables the District to raise the minimum required bid for small public works projects from $15,000 to $125,000 under Public Contract Code (Section 22003).
• $0-$30,000 - No Bid. CUPCCAA exempts this size of project from bidding requirements; the District will negotiate a contract or procure the job by purchase order.
• $30,000-$125,000 - Informal Bid. Would be let to the qualified contractor submitting the lowest quote through an informal bidding process. The District would still reserve the right to bid a project in this range formally, if desired. Bid bonds, performance bonds, and payment bonds would continue to be required of all contractors doing work under these provisions.
• Over $125,000 - Formal Bid. Requires one advertisement in a local paper with 14-day advance notice. Trade Journals are notified 30 days in advance. Requires Board approval.
• If the District receives no bids through the informal or formal bidding procedures, the Act authorizes the District by Section 22038(c) to have the Project completed by negotiated contract, which complies with bidding procedures.
Independent Contracts
5. Contracts are required for service work performed by an independent contractor. An independent contractor is defined as an individual (rather than a company) who performs a service (rather than provides a tangible product) for the District. Independent contractors are in business for themselves and are responsible for their own tax reporting to the IRS. The independent contractor uses a social security number for tax identification purposes, rather than a federal tax ID number. SB1419 sets specific guidelines for appropriate use of independent contractors.
Contract Authorization
6. Only the Chancellor and the Executive-Vice Chancellor are authorized to sign contracts for the District. A contract without one of these signatures is not a valid contract.
Purchase Orders
7. District or College personnel cannot place orders without the issuance of a purchase order by the Purchasing Department, unless a procurement card is used. Vendors should never process an order or perform services without a District purchase order authorizing the expenditure.
Confirming Purchase Orders
8. Confirming purchase orders will be issued only in emergency situations and only after a requisition has been received in the Buyer's queue. Confirming orders will not be issued for equipment purchases, or without verification of available funding.
Requisition Descriptions
9. Item descriptions on requisitions should be sufficient enough to indicate clearly what is being ordered. For example, a part number alone is an insufficient description. Descriptive detail is required for auditing purposes and to allow proper classification and inventorying of equipment and supplies. Concerning project or contracted work, the requisition should always include both a starting and an ending date.
Standing Orders
10. Standing orders are issued to authorize expenditure for unspecified supplies or services during a specified period of time, with no minimum purchase requirement for individual items or service rendered. District quote requirements apply if an individual item purchased within the standing order exceeds $5,000.
Equipment Purchases > $1,000
11. Equipment valued over $1,000 must always be purchased using the requisition/purchase order process. Whenever possible, purchase of supplies and services under $1,000 should be made with a District procurement card. Reimbursements to employees for amounts over the petty cash limit of $100 are discouraged.
Fixed Assets and Inventoried Equipment
12. Equipment and furniture with a unit price of $5,000 or more (including sales tax, delivery and installation) are fixed assets and must be assigned an asset inventory number. For tracking purposes, all inventoried equipment and furniture are tagged with a District Asset Inventory Number and entered into the District's asset inventory records immediately upon receipt. The corresponding Asset Addition Form should be returned to Purchasing on or before the date payment is approved.
Fixed Asset Equipment from Federal Grants
13. In general, the fixed asset threshold for equipment purchases with Federal Grant funding is $5,000. Refer to the Federal Grant in question for specific requirements that may deviate from this standard.
Prepayment
14. Prepayment is acceptable only if the vendor refuses to supply products or services without prepayment. If prepayment is requested on a requisition, appropriate documentation, such as an order form, pro-forma invoice, or a vendor letter indicating the item description, price and prepayment requirement is necessary before processing.
Lease Purchases
15. All lease-purchases require Board approval.
DOLLAR LIMIT GUIDELINES
Purchases should follow these procedures before an item or service is ordered: 1-the creation of a requisition, 2-the completion of campus approvals, 3-the creation of a purchase order, and 4-the vendor’s receipt of the purchase order. Please ensure that these procedures are followed for all purchases, except when using a District procurement card.
Purchases under $2,000
Purchase and selection of vendor is at the discretion of the user. Use of the District procurement card is encouraged for most purchases under $1,000. Purchases of equipment items valued over $1,000 must always be made through the Banner requisition/purchase order process.
Purchases between $2,000 and $5,000
Three verbal or email quotes should be obtained for purchases of goods or services when the total dollar amount of the order is between $2,000 and $5,000.
Purchases between $5,001 and $20,000
Three written quotes should be obtained for purchases of goods or services when the total dollar amount of the order is between $5,001 and $20,000. All quotes should be forwarded to the Purchasing Department either via email or by hard copy; include the requisition number for reference. Equipment and furniture with a value greater than $5,000 per item (including sales tax, delivery and installation) are fixed assets and must be tracked by the District. All fixed assets are assigned an asset inventory number by the Purchasing Department; asset tags are affixed upon receipt of the item(s).
Purchases between $20,001 and $72,400
For purchases of goods or services when the total dollar amount of the order is between $20,001 and the legal bid limit of $72,400, a Request for Quotations is required and should be sent to multiple vendors.
Purchases over $72,400, except Public Contract Code Projects and Professional Services
The formal bid process, including advertisement of bids, is required for purchases over $72,400. The requesting department should coordinate the development of bid specifications with the Director of General Services or designated Buyer. Since this process can take as long as 30-90 days, depending upon the complexity of the bid, the Purchasing Department should be contacted well in advance of the desired delivery date to allow adequate time to prepare the bid and arrange legal advertising and Board reports. An exception to this $72,400 threshold is Public Works Projects which require a formal bid if expenditures are greater than $125,000. Professional services, such as lawyers, architects, or engineers are not bound by formal bid requirements. However, an evaluation of a minimum of three firms for any consulting project must occur before purchasing consulting services.
Written Proposal or Agreement for Certain Purchases - Any Dollar Amount
Submit with the requisition a written proposal which describes the work and includes a price quote for all annual service arrangements, professional services, services involving copyright or licensing, and facility or vehicle rental. Agreements must be reviewed and signed by the Executive Vice Chancellor prior to issuing a purchase order.
Insurance Requirements
A certificate of insurance from a contractor performing services is required if the services are performed at a District site. A minimum of $2,000,000 comprehensive general liability is required. Certain large construction projects may require additional insurance. For construction performed under CIP2, the District has a mandatory Owner Controlled Insurance Program (OCIP) for all contracts in excess of $30,000.
Board Approval Requirements
• Purchases of products or equipment over $72,400.
• Contracts or agreements for services, including Independent Contractors, in the amount of $50,000 and over, except those contracts governed by public contract code.
• Annual membership dues over $25,000.
• Lease-purchase agreements.
• Public Works Projects over $125,000.
COMMONLY USED PURCHASING ACCOUNT CODES
| 45XX - | Other Supplies | |||||||||||||||||||||
| 4510 - | Supplies: Includes instructional and non-instructional items that are expendable and quickly consumed or easily broken, damaged, or lost; valued at $500 or less per item. Examples: Pens, books, tests, periodicals, non-catered food, videocassettes, and software, including packages with the license included (see also 5621 and 6459). Equipment Supplies: Account 4510 also includes equipment items that are valued at less than $500 and not considered consumable. Examples: Small electronic equipment, including, but not limited to, keyboards, mice, cables, hard drives, small printers, digital cameras, or other equipment accessories ordered separately, or as a replacement for existing equipment items. | |||||||||||||||||||||
| 4511 - | Non-Inventoried Equipment: New account retroactive to July 1, 2004. Includes equipment (electronic or otherwise), including computers, that cost at least $500 and up to $5,000 (including sales tax, shipping and installation). You should no longer use 6451 for Non-Inventoried Equipment. | |||||||||||||||||||||
| 4512 - | Non-Inventoried Furniture: New account retroactive to July 1, 2004. Includes furniture that costs at least $500 and up to $5,000 per item (including sales tax, shipping, and installation). You should no longer use 6471 for Non-Inventoried Furniture. | |||||||||||||||||||||
| 4513 - | and 4110 are used for Library purchases only. | |||||||||||||||||||||
| 4514 - | Replacement of Non-Inventoried Equipment: New account retroactive to July 1, 2004. Includes replacement equipment lost due to theft, which costs at least $500 and up to $5,000 per item (including sales tax, shipping and installation). You should no longer use 6481 for Replacement of Non-Inventoried Equipment. | |||||||||||||||||||||
| 4530 - | Custodial Supplies: This includes janitorial supplies such as floor stripper, waxes, cleaners; "personal products" like soap, toilet tissue, seat covers, paper towels, and the dispensers for these products; and indoor or classroom light bulbs and fluorescent tubes. | |||||||||||||||||||||
| 4540 - | Grounds Supplies: This includes fertilizers, pest controls, overalls, gloves, seed, small hand tools for trimming, and irrigation supplies. | |||||||||||||||||||||
| 4550 - | Maintenance Supplies: This should be your “catch all” category. This is for supplies that the crews use in the performance of their jobs for which there is not a more appropriate category. This could include nails, drill bits, electrical supplies, pipes, small motors, filters, paint for the parking lots and benches, lamps for the parking lot fixtures and pool supplies and repair parts. | |||||||||||||||||||||
| 4555 - | Truck Maintenance/Repair: This includes supplies and parts used to repair and/or maintain the District vehicles, except for tires, oil, and gas which should be charged to 4620. | |||||||||||||||||||||
| 4560 - | Building Repair: This includes parts and supplies used to repair the building itself. This should only be used if the more specific objects listed below do not apply. | |||||||||||||||||||||
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| 4570 - | Repair Parts for Equipment: Includes only parts used to repair equipment (i.e. typewriter platens, copier fuser rollers, belts, gears). If the repair includes parts and labor, use 5630. | |||||||||||||||||||||
| 46XX - | Pupil Transportation Expense | |||||||||||||||||||||
| 4620 - | Gas, Oil & Tires |
| 56XX - | Contract & Rental Expense | ||||||||||||
| 5620 - | Rental of Equipment: Includes cost of renting equipment for which the District accrues no rights of ownership. | ||||||||||||
| 5621 - | Software License: Includes cost of software site licensing fees, either one-time or annual. When using 5621, the assumption is that software (disks and documentation) has been purchased separately and the purchase is for additional licenses or renewal of annual license fees. | ||||||||||||
| 5630 - | Repair of Equipment, Labor: Includes the cost of parts and labor to repair equipment, extended warranty agreements, and annual maintenance agreements. If parts are purchased separately, 4570 should be used. | ||||||||||||
| 5640 - | Repair Vehicles: This includes parts and labor. | ||||||||||||
| 5650 - | Repair Buildings: This includes the labor used to repair the building itself. This should only be used if the more specific objects listed below do not apply. | ||||||||||||
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| 5670 - | Film Rental: Includes the cost of film rental and also the cost of preview fees when they are applicable to the purchase price. | ||||||||||||
| 5690 - | Other Contracted Services: Includes the cost of services, other than repair or printing; for example, graphic artistry and design, furniture assembly, typesetting, videotape production, sign making (unit price under $2,000), catered food, fees for athletic officials and athletic events. Note: Conference registration fees are to be submitted on conference advance or reimbursement forms charged to the appropriate 5200 account. With the exception of fees, a contract or written quotation outlining prices and services to be rendered is required. Vendors providing services (with no tangible product included) under a Social Security number are paid as independent contractors under 5110. | ||||||||||||
| 5694 - | Contracted Printing Services: Includes cost of printing done by outside firms, including T-shirt screens (shirts are charged to 4510; setup fee charged to 5690). |
| 58XX - | Other Administrative Expenses |
| 5840 - | Advertising: Includes the cost of advertising and promotion, other than legal advertising such as required for formal bids. |
| 61XX - | Sites & Site Improvements |
| 6120 - | Improvement of Sites |
| 6122 - | Engineering Services |
| 62XX - | Buildings |
| 6210 - | Building Improvements: Includes cost of capital additions or improvements to buildings that include materials and installation, such as installation of built-in fixtures (doors, windows, window coverings, electrical wiring, cabling, fixed playground equipment, flagpoles). Ordinarily used for projects over $5,000. |
| 6211 - | Architect Fees |
| 6212 - | Inspection |
| 6213 - | Tests |
| 6215 - | Additional Improvement of Buildings |
| 64XX - | Equipment |
| 6450 - | Inventoried Equipment: Includes equipment with a unit cost of more than $5,000 including sales tax, shipping and installation. Equipment is durable, tangible property with a useful life of more than one year, other than land, buildings, improvements to buildings and furniture. An asset inventory number is assigned by Purchasing for all equipment whose value is greater than $5,000. The asset tag should be affixed to the equipment upon receipt. |
| 6451 - | Non-inventoried Equipment: This object code will no longer be used retroactive to July 1, 2004. |
| 6459 - | Software: Includes software and software license that has a unit cost of more than $5,000. Note: A package of multiple copies of the software/licenses with a per copy cost of under $5,000 is coded to 4510.< |
| 6470 - | Inventoried Furniture: Includes furniture with a unit cost of more than $5,000 including tax, installation, project management and shipping. An asset inventory number is assigned by Purchasing for furniture systems with a cost greater than $5,000. The asset tag should be affixed to the furniture piece as soon as it is received. |
| 6471 - | Non-Inventoried Furniture: This object code will no longer be used retroactive to July 1, 2004. |
| 6480 - | Replacement Inventoried Equipment: Includes replacement equipment lost due to theft, which costs at least $5,000 including tax, installation, project management and shipping. Inventory tags are assigned by Purchasing for items charged to 6480. |
| 6481 - | Replacement Non-Inventoried Equipment: This object code will no longer be used retroactive to July 1, 2004. |
| 6490 - | Inventoried Equipment from Federal Grants: Federal Grants require that we track all equipment valued greater than $5,000. This accounting code allows us to separate those purchases and easily identify them. Asset tags should be affixed to these items as soon as they are received. |
