Bid Threshold for Non-Federal Funds Increases Effective January 1, 2011
Governor Schwarzenegger signed Senate Bill SB 1122 into law effective January 1, 2011, increasing the state competitive bid threshold for UC for the first time since it was established in 1984 at $50,000. The new bid threshold is $100,000. This higher bid limit provides greater flexibility for the campus in deciding when to bid, subject to buyer discretion. This new bid threshold may also provide more UC procurement opportunities for small, local and Service-Disabled-Veteran Business Enterprises (SDVBE) as these groups of suppliers can find it challenging to respond to the University of California bidding process.
Rules for federally-funded purchases remain unchanged, requiring maximum competition down to the micro-purchase threshold of $3,000. Competition is addressed by competitive bids through Purchasing, competing quotes or sole source justification. Price reasonableness also must be established.
The use of Strategic Sourcing contracts remains strongly encouraged, as they have already addressed competition, aggregate significant spend across the campus or UC system and typically streamline processes by offering release limits well above the LVO limit of $5,000.
SB 1122 also provides flexibility in paying student employees providing services to the University outside the scope of their employment (such as a student clerk in a paid musical performance). Instead of having to set up dual employment to avoid violating conflict of interest law, which prohibits current UC employees from providing goods or services to the University, UCLA will be able to consider alternatives such as a new Accounts Payable process to generate these payments. Guidelines will be provided shortly by the Office of the President.