Chapter 16-300

Purchasing Policies

Business and Finance Bulletin BUS-43 introduction sets forth guidelines for “appropriate implementation of the policies….” relating to purchasing activities. These include:

  1. "recognition that the interests of the people of the State of California are paramount and that University Materiel Management policies and practices should be developed to best serve those interests,
  2. recognition that the basic purpose of Materiel Management is to support the teaching, research, and public service missions of the University in the most cost effective manner,
  3. continuing development and refinement of University purchasing policies in accordance with good business judgment and normal business practice as applicable to the University's total operations,
  4. the firm belief that it is in the overall interest both of extramural sponsors and the University to limit as much as possible the effect of sponsor regulations on University policy and administration."

Specific purchasing policies are presented in 16-310 through 16-370 and in Business and Finance Bulletin BUS-43 and apply to all campus and Laboratory purchasing activities unless otherwise indicated.

16-310 External Purchasing Policies and Requirements

Certain federal and State laws and regulations also govern University purchasing activities. Some obligations are required by a particular extramural sponsor award. In such cases, the Contract and Grant Officer must coordinate such requirements with the responsible purchasing personnel during the proposal, negotiation, acceptance/execution, and post-award administrative phases, as appropriate. Other extramural sponsors’ requirements fall under general obligations for the University, unrelated to any particular extramural award. Some of these are included in 16-F01 through 16-F07 and 16-S01.

The Executive Vice President-Business Operations is responsible for providing information on all such requirements through the Executive Director, Strategic Sourcing, the Director-Research Administration Office, as applicable, and through other appropriate channels to Chancellors and Laboratory Directors who, in turn, shall establish appropriate procedures and controls to ensure compliance.

See 16-320 through 16-323 for information on purchase contracts under externally funded federal and State awards.

16-311 External "Prior Approval" Requirements

Both general and specific purchasing requirements imposed by external fund sources may require that the University to obtain prior approval from the sponsoring agency prior before a specific purchasing action.

16-312 "Flow-Down" of External Policies and Requirements Through Purchasing Transactions

Sponsored agreements often require the University to include in its subcontracts sponsor-specific provisions or “flow-down” terms from the sponsored agreement which govern purchase contracts with vendors for the acquisition of goods or services. Such flow-down provisions must also be included in purchase contracts as well as in subawards, if required by the prime sponsored award , in accordance with 16-320 through 16-323.

16-320 Purchase Contracts

Purchase contracts (e.g., purchase orders and subcontracts) are the legal documents which bind the University when purchasing goods and services from sources outside of the University. (Coverage on appropriate instruments for purchasing goods or services from sources within the University, i.e., from other campuses or DOE Laboratories, is presented in 10-240 through 10-253).

Policy coverage and details regarding purchase contract form and content, compliance enforcement, claims or disputes, and revisions to terms are contained in Business and Finance Bulletin BUS-43, Part 3“Purchase Transactions”. Generally, all purchase contracts should be in writing using standard purchase order forms and standard terms and conditions of purchase as approved for use by the Executive Director of Strategic Sourcing and included in Business and Finance Bulletin BUS-43, Exhibit C.

16-321 Special Documents

Purchase contracts may need to be specifically tailored for unusually complex or high-value items or services, or for purchases under extramural sponsor agreements which require flow-down provisions as discussed at 16-312. Such purchase contracts shall be entered into only when these documents have been approved and coordinated in accordance with 16-322 and 16-323. 

16-322 General Counsel Approval

No changes, deletions, exceptions, or additions to the standard terms and conditions shall be made to purchase contract terms in BUS 43, Exhibit C, without written approval of the General Counsel. (See BUS-43 Part 3, Section III.G.2.

16-323 Contract and Grant Officer Coordination

For campuses where the campus Purchasing Office is responsible for any subawards for research and development work under awards accepted by the campus Contract and Grant Office, such subawards (subcontracts and subagreements) must be coordinated in advance with the respective campus Contract and Grant Officer to ensure flow-down of applicable requirements from the prime award. In addition, purchase contracts for unusually complex or high-value items or other services under an extramurally funded awards should be coordinated with the respective campus Contract and Grant Officer.

16-330 Planned Purchasing Program

16-331 Policy

University policy seeks to make purchases at the lowest possible overall cost through planned, quantity purchasing. To this end, regional and University-wide pool purchases, commodity agreements, and price schedules shall be utilized to the maximum practicable extent. These mechanisms comprise the University's Planned Purchasing Program which is discussed in Business and Finance Bulletin BUS-43. BUS-43, Part 4 provides definitions, guidelines, and coverage on program management, purchase transactions, and State supply schedules and contracts for the Planned Purchasing Program.

16-332 Responsibility

The Executive Director, Strategic Sourcing, shall represent the University in its relations with the State Procurement Office, Department of General Services, to secure mutually beneficial supply agreements.

The Executive Director is also responsible for all other requirements described in BUS-43 including chairing the Planned Purchasing work group which advises on commodity assignments, development of systems for the Planned Purchasing Program, establishment of criteria for determining when consolidated purchasing should be undertaken, and review and recommendation of changes to the Program.

16-333 Laboratory Participation

The prime Department of Energy contract which governs the Lawrence Berkeley National Laboratory (LBNL) require the use of certain federal government sources not generally available to campuses. When they would be cost effective and there would be no conflict with federal requirements, LBNL may use University-wide pool purchases, commodity agreement, and price schedules.

16-340 Competitive Bids

BUS-43, Part I, defines a competitive bid as “a minimum of three qualified suppliers submitted in accordance with a solicitation from the Materiel Manager.” University policy requires competitive bids for “any transaction expected to involve an expenditure of $50,000 or more for goods or services, other than personal or professional services, unless it is determined that a brand or trade name article, thing or product, or proprietary service is unique, available only from a sole source, or is designated to match others used in or furnished to a particular installation, facility, or location.” (BUS-4, Part 3. III. D.) For transactions for less than $50,000, the Materiel Manager (or designee) may negotiate orally or in writing with one or more vendors . In such exceptional circumstances, purchasing transactions shall occur in accordance with 16-350. Purchasing transactions and subawards shall not be artificially divided into separate transactions to avoid or change competitive bidding requirements.

Implementing policies and procedures for competition bidding are located in Business and Finance Bulletin BUS-43, Part 3, “Purchasing Transactions.” [] Competition bidding requirements for individual consultants are set forth in Business and Finance Bulletin BUS-34, “Securing the Services of Independent Consultants,” Part VI. (See 16-442.

16-341 Contract and Grant Officers' Responsibility

Contract and Grant Officers shall not commit the University through submission of a legally binding offer to an extramural sponsor, to the purchase of a particular brand name product, or otherwise restrict competitive procurements under a subsequent award, unless such brand name product or other restriction meets the exception from competition criteria discussed in 16-340 and Business and Finance Bulletin, BUS-43.

16-350 Negotiation

When purchasing transactions involve goods or services which meet the exception-from-competition criteria discussed in 16-340, such transactions may be conducted through negotiation in accordance with Business and Finance Bulletin BUS-43, Part 3.

16-360 Conflicts of Interest

The University complies with federal and State laws concerning purchasing transactions made with or influenced by current or past employees of the University and the near-relatives of such employees, University policy coverage in this area is provided in BUS-43, Part 7, “Employee-Vendor Relationships,” and BUS-34.

16-370 Socio-Economic Requirements

The University of California complies with federal and State law regarding equal employment opportunity and affirmative action. The University’s Policy to Ensure Equal Opportunity in Business Contracting, January 1, 1996.

“The University of California Administrative Guidelines to Ensure Equal Opportunity in Business Contracting” were issued to Materiel Managers and Contracting Officials by the President effective January 1, 1996. In the area of purchasing goods and services, these Guidelines provide that "the University will continue to set goals and timetables for small, disadvantaged, women-owned, and disabled veteran business enterprises where such goals and timetables are required as a condition of federal or state funded contracts or grants....In addition, the University will continue to utilize outreach programs to assure equality of opportunity." The guidelines recommend a number of different outreach activities to be employed, and require each University location to designate a knowledgeable official(s) to oversee outreach activities. Campuses are further required to maintain separate statistical records for purchases from small businesses, small disadvantaged businesses, women-owned businesses, and disabled veteran businesses, compared to total dollars expended to all businesses. This statistical information is to be submitted to the Office of the President not later than August 15 each year.

OP Strategic Sourcing provides guidance to campus Materiel Managers regarding federal- or State-wide contract or grant requirements under agreements for research, training, or public service, such as requirements incorporated in Federal Acquisition Regulation Subpart 19.7 (see 16-F02), OMB Circular A-110 Section __.44(b) (see 16-F01), and the State Public Contract Code (see 16-S01) as well as any University-wide programs regarding purchases from small, disadvantaged, women-owned, and disabled veteran businesses, in Business and Finance Bulletin BUS-43, Part 5, Purchasing and Public Policy.

The role of the campus Contract and Grant Office, as stated in the guidelines, is to advise campus purchasing offices when any contract or grant has transaction-specific requirements regarding purchases from disadvantaged or women-owned businesses under that award, such as a federal contract with subcontracting plan requirements. (See 16-F02.).

The OP Facilities Management Department provides guidance on implementing the University “Administrative Guidelines” cited above with respect to awarding and administering construction contracts. (See University Facilities Manual, 1.5 Equal Opportunity Policy.)