Procurement & Contracting Services

Business & Revenue Contracts

What is Competitive Bidding?

As a public institution, UC encourages competitive bidding whenever possible because it is a tool  in   obtaining  services  at  the  lowest  possible  cost.    Anytime  a  competitive  bid requirement  is  waived,  the  appropriate  sole  source forms  must  be  approved  and  on  file.   

Competitive bid requirements are as follows:

A.  Professional Services. 

Contracts for professional services are not legally required to be competitively bid so long as the price is justifiable (the price must be proven to be fair and reasonable).  However, competitive bidding is strongly encouraged where possible.

B.  Independent Consultants.  

Current   law   requires   any   consulting   agreement   over  $100,000  be competitively  bid,  though  the  University  strongly  encourages  consulting contracts  in  excess  of  $50,000  be  bid.  Note  that  the $100,000  threshold  is  the  total contract amount, not just the cost for the first phase. It is imperative to develop a total project  budget  to  ensure  that  all  phases  can  be  completed  within  the  no-bid  threshold.  If they cannot, the project must be bid at its inception. 

NOTE: Section 10515 of the California  Public  Contract  Code  strictly  limits  a  consultant’s  ability  to  perform services, procure goods or supplies, or take any action related to Consultant’s findings and recommendations pursuant to this agreement.  If you believe the consultant should complete specific tasks that may result from the outcome of their review, please inform Business   &   Revenue   Contracts when   your   original   request   for   an   RFP (Request for Proposal)   and/or agreement is submitted.

C.  Independent  Contractor  and  Vendor  Agreements. 

As  with Independent  Consultants, current  law  requires  any  independent  contractor  agreements  and  agreements  with vendors over  $100,000  be  competitively  bid.  Note  that  the  $100,000  threshold  is  the total contract amount, not just the cost for the first phase.  It is imperative to develop a total  project  budget  to  ensure  that  all  phases  can  be  completed  within  the  no-bid threshold. Any service agreement  between  $50K  and  100K  do  not  need  to  be competitively  bid  so  long  as  the  price  is  justifiable - typically  by  obtaining  three quotes. 

D.  Revenue  Agreements. 

If  the  university  will  be  receiving  a  commission  or  payment based on the presence of or an activity of a contractor, the contractor will be financially benefiting  from  the  university.    So  long  as  the  financial  benefit  is  substantial  and exclusive only to one contractor, a competitive bid should be held to allow all interested parties to have the opportunity to bid on the partnership. 

Business  &  Revenue  Contracts have a responsibility to  substantiate  that  all payments made to contractors are fair and reasonable.  For this reason, if a competitive bid process  is  not  required,  the  requesting  department may be  contacted  for  additional  information   about   pricing   and  your   reason   for   selection of   a   particular contractor. 

Requesting  departments  should  always  attach  copies  of  all  quotes  and  proposals  received from other service providers to their KFS request.

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