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Procurement Policy Changes Coming July 1, 2017

As you may recall from our previous announcements, the Federal government’s new regulations on grants and contracts (commonly referred to as “Uniform Guidance”) provided an opportunity for universities to delay the implementation of new procurement requirements beyond the December 26, 2014 effective date.  On July 1, 2017, the time will come when EKU is required to begin enforcing the new procurement standards. 

In an effort to encourage competitive pricing and fair selection of vendors, the new guidelines require multiple quotes or a competitive bid/RFP process for all purchases that total $3,500 or more.  EKU’s revised procurement procedures will ensure compliance with both the new Federal requirements and the state of Kentucky’s procurement policies. 

Changes will impact all purchases in the following ways:

  1. Individual transaction limits on University credit cards will be decreased to $3,499.
  2. The limit on direct pay requests will be increased to $3,499 (some exceptions will apply).
  3. Purchases that do not require a contract and total $3,500 will be handled through Banner purchase requisitions and are subject to a competitive process as follows:
  • Purchases totaling between $3,500 and $19,999 will require two quotes from potential vendors; with appropriate attestation by authorized EKU personnel, these quotes may be obtained via telephone.
  • Purchases totaling between $20,000 and $39,999 will require three quotes from potential vendors; these quotes must be submitted by vendors in writing.
  • Purchases totaling $40,000 or more will require a formal bid or RFP process; bids will be used to select the lowest cost vendor, and Requests for Proposals (RFPs) will be used when factors other than price are considered in selecting a vendor. 
  • When a department is unable to secure the required number of quotes, Purchasing will post a public Request for Quotes. 

In addition, these changes will impact contractor agreements on sponsored project awards in the following ways:

  1. When a contractor (either an organization or an individual consultant) will provide professional services on a sponsored project at a total cost of less than $3,500, a formal contractor agreement will not be required.  Instead, the services can be compensated through the direct pay process.  These contractors may be specifically identified in a sponsored project proposal (or proposed budget). 
  2. When contractors are budgeted for compensation at $3,500 or more on a project, they may not be selected without a competitive process being used and may not be listed in a sponsored project proposal (or proposed budget) unless the quote or bid/RFP process has been completed and approved through Purchasing.  Arrangements for professional services at this cost level will require a formal contractor agreement following the competitive selection process as follows:
  • Purchases totaling between $3,500 and $19,999 will require two quotes from potential vendors; with appropriate attestation by authorized EKU personnel, these quotes may be obtained via telephone.
  • Purchases totaling between $20,000 and $39,999 will require three quotes from potential vendors; these quotes must be submitted by vendors in writing.
  • Purchases totaling $40,000 or more will require a formal bid or RFP process; bids will be used to select the lowest cost vendor, and Requests for Proposals (RFPs) will be used when factors other than price are considered in selecting a vendor. 
  • When a department is unable to secure the required number of quotes, Purchasing will post a public Request for Quotes. 

Purchasing is currently developing procedures to implement these new regulations, and upon completion, these resources will be made available online. 

For contractor agreements on sponsored projects, the requests will continue to be accepted online, but will require approval from Purchasing based on the new criteria prior to being processed. 

The changes described here will impact purchases beginning July 1, 2017 and do not have an impact on purchases made prior to this date.  We appreciate your patience as new procedures are being developed and will share additional details about these changes as soon as possible. 

Published on February 23, 2017

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