Increase of Small Purchase and Informal Bidding Thresholds

To: [Formal Notice] DDD, University Business Managers, Campus Unit Finance Leads
From: Troy Morse, Director of Purchasing Services

Recently, the state of North Carolina updated its small purchase and bidding thresholds in administrative code 01 NCAC 05B, which resulted in a significant rise in these thresholds. To align our policies, we have updated the 1200 policy and procedure series — which cover the University of North Carolina at Chapel Hill’s purchase of goods and services. The scope of the changes is detailed below.

All University personnel who work with requisitions should familiarize themselves with the changes and attend an upcoming training session, if possible. Training session details are at the end of this memo.

Effective July 1, the following changes are in effect:

• Increase our Small Purchase Benchmark from $5,000 to $25,000. A Small Purchase is now defined as purchases less than or equal to $25,000, including applicable taxes (e.g., out of state sales tax) and shipping.
  • Purchases Less than or equal to $5,000 – No change to existing processes. Buy Carolina, PCARD, and Campus voucher are still acceptable methods of procurement and should be selected based on the Operational Excellence Purchasing Method Decision tool.
  • Purchases $5000.01 < Price < $25,000
    • No longer require Waiver of Competition Form
    • Still require a requisition and PO to ensure Capital Assets are captured properly
    • Requisition may be submitted with a single quote
    • It is highly recommended that you check multiple sources to ensure you are getting the best price

• Informal Bidding now allowable for purchase between $25,000.01 and $100,000
  • Waiver of Competition is required if competition is not available.
  • Requires at least three (3) formal quotes obtained through an official University Request for Quote (RFQ) which will be prepared and sent out from Purchasing Services.
  • Requisitions should include a vendor quote to establish a reasonable pricing range, and contact information for at least three vendors (if known) to assist the purchasing agent in obtaining quotes. (Name, Phone number, Email Address)
  • At least one vendor should be certified as a Historically Underutilized Business (HUB). Purchasing will assist in identifying these businesses if one is not readily known. HUB businesses can also be searched by category.

• Formal Requests for Proposals or Invitation for Bids will be required for all purchases exceeding $100,000.
  • Requires a detailed Statement of Work/Scope of Work
  • Department should establish evaluation criteria for evaluation of proposals.

Impact

These changes will have the following impact on our campus community:

• Simplifies the purchasing process for all purchases under $25,000, eliminating the need to seek three quotes or draft Waiver of Competition documentation.
• Allows greater flexibility in sourcing small dollar purchasing, which may generate higher utilization of Historically Underutilized Businesses and assist the research community in meeting small, minority and women-owned business goals.
• Creates greater structure around the informal bidding processes to ensure that state businesses can take advantage of price matching legislation and that all suppliers acknowledge no Conflict of Interest in University contracts.
• Reduces administrative burden on campus and Purchasing Services related to the creation, solicitation, and review of formal bid documents.
• Increases efficiency and effectiveness of the purchasing department.

Affected Policies

Please review major revisions in:

• 1231 – University of North Carolina at Chapel Hill Policy on Solicitation of Quotations, Bids, and Proposals
• 1251 – University of North Carolina at Chapel Hill Small Order Policy

Training

Purchasing Services will conduct three two-hour trainings for campus requisitioners to cover these changes and general requisitioning.  Participants may also log into Zoom for off-site training.

If interested, please sign up to one of the slots below: