Overview
Three critical purchasing forms are now embedded in BearBuy: Source Selection and Price Reasonableness Justification, Conflict of Interest, and Capital Equipment. Here are answers to common questions on each of these items.
Q: When should I do Source Selection and Price Reasonableness?
A: When making a purchase on a single requisition, using either federally funded dollars for goods or services of $50,000 or more, or non-federally funded dollars for goods or services of $100,000 or more, you must document both Source Selection and Price Reasonableness per Federal and/or University of California (UC)C/State policy/guidelines. This information must be documented in BearBuy.
Federal/state law and UC policy require this section for:
- Federal funds transactions > $50,000
- Non-federal funds transactions > $100,000
Q: What is "source selection"?
A: The process of selecting and contracting with the most qualified proposal that meets UCSF’s requirements. There are four options: New or Existing Bid, Non-Formal Quotes, Registered Small Business or Sole Source.
- New or Existing Bid: Transactions $100,000 or more must have a new or existing formal competitive bid. This must be performed by a Supply Chain Management buyer. The buyer will evaluate a minimum of three qualified bids before moving forward with the requisition.
- If this transaction is using a UCSF or UC systemwide agreement, include the bidding number from that bid. If you do not know that number, please contact your department-assigned buyer.
- If bidding has not already occurred, contact your buyer to start the process. Note that specific bidding activities may take weeks or months. We advise you to contact your buyer early in the process.
- Non-Formal Quotes
- For transactions under $100,000, informal quotes can be obtained by the department making the purchase in lieu of the formal bidding process. A minimum of three competitive (informal) quotes should be attached to the requisition.
- See below "what is a non-formal quote, and why is it a thing?"
- Registered Small Business
- Transactions involving small business under $250,000 are exempt from providing informal quotes.
- Sole Source
- For transactions where there is only one solution/supplier that will meet the University’s needs. If selected, you will be required to complete both the Sole Source Justification and the Price Reasonableness portions of the BearBuy form.
- For help on how to write a sole-source justification, visit the Sole-Source Justification Guide.
Q: What is "price reasonableness"?
A: The price paid by the University must be reasonable, one that does not exceed what would be incurred by a prudent person in a competitive business. Required by the California Public Contract Code and FAR (Federal) provision. This information must be documented in the BearBuy requisition.
Q: How do I document "price reasonableness"?
A: Documenting Reasonable Price: back up your entries with listings, price histories or other data. An auditor should not have to question anything. The following provides guidance on price reasonableness:
- Need not be the lowest price available but offers the highest total value to the University
- Can be established by market test, price or cost analysis, or the experience and judgment of the Procurement/Supply Chain Manager. Such judgment considers total value to the University
- For transactions above $100,000, reasonable price is established through formal competitive bidding unless they are exempt from bid, in which case, a reasonable price is established via an adequate market test, set by applicable law or regulation, or supported by an appropriate price or cost analysis
The following are examples of how to substantiate price reasonableness, together with a discount (discount alone is not justifiable), in order of preference:
- Price competition – comparison of quotes
- University of California Office of the President (UCOP), State, or GSA contract pricing, or comparison with prices under existing contracts
- Prior price history with same vendor, same items over the past year
- Comparison with current, or recent prices for a similar item(s) with another vendor
- Market research, catalog or established price list (sales to general public - screen shot ok)
Q: What happens if I forget to complete the Source Selection and Price Reasonableness section?
A: Failing to complete the section could be a violation of the California Public Procurement Code or federal law, depending on the dollar amount and type of funds involved with the procurement. Luckily, our SCM buyers are highly ]skilled in ensuring UCSF is documenting our procurements correctly. If you forget, your department-assigned buyer will send you a comment in BearBuy letting you know the information is required and asking you for the additional information.
Q: What if I have an existing purchase order (PO) and I am doing a change order?
A: If the amount of your change order uses federal funds and is greater than $50,000, or if your change order uses non-federal funding and is greater than $100,000, then you must justify the source selection and price reasonableness of the transaction. Currently, the change order form in BearBuy does not include these fields, so you should attach the form found here.
Q: Why is a Sole Source justification needed?
A: The California Public Procurement Code requires us to be transparent in our procurement decisions. In the event that your product is unique, and you really don’t have a choice in the procurement, we still need to justify the procurement to show that we are fair and open in our procurement decisions.
Q: How do I write a good Sole Source justification?
A: A good sole-source justification is one that clearly demonstrates that UCSF has no real choice in the procurement. For guidance on writing sole-source justifications please, see our Sole-Source Justification Guide.
Q: Does source selection and price reasonableness apply to both goods and services?
A: Yes. For all transactions above the thresholds ($50,000 for federal and $100,000 for non-federal) the federal government and state government require UC to justify how we chose the supplier (source selection) and how we know the price is reasonable.
Q: What is a "non-formal quote," and why is it a thing?
A: The term "non-formal quote" is procurement jargon (sorry) and is used to denote the PDF-type quotes collected by departments (or buyers) from suppliers for orders under $100,000. These typically occur when departments call the sales representative and ask for a quote for the service or good under consideration. For orders above $100,000, the federal/state law requires UC to bid the good or service more formally by publishing a Request for Proposal (RFP) using UC’s public bid tool. These must be done by a Supply Chain Management buyer and your buyer can help you if you need to run a bid.
Q: When do I need to fill out Conflict of Interest?
A: Always. Every transaction requires a declaration that “to the best of the requester/shopper’s knowledge” there is no conflict of interest. As a public entity, there should never be a conflict of interest or even the appearance of a conflict within our procurement processes.
Q: What if I know of or suspect a conflict of interest?
A: Contact your department-assigned buyer. They will provide guidance on the conflict of interest policies, provide a form to document the potential conflict and help identify a path for resolution.
Q: What is conflict of interest defined as? Where can I find more information on this topic?
A: UC policy, state law and federal anti-corruption laws require that UC’s procurement transactions be open, transparent and fair. Generally, UCSF is not permitted to conduct business with suppliers who are owned by UC employees or near relatives of a UC employee. More information is available via conflict of interest.
Q: What is an Equipment Category?
A: Currently the equipment categories available apply broadly to research equipment. If you do not find an equipment category that applies to your purchase but is research related, select equipment category Other-Research. If your purchase does not apply to research equipment, select Other-Non-Research.
Q: How do I know if my purchase is used for research?
A: Refer to the following grid for guidance. All responses to questions 1 through 4 must be "Yes" to qualify as “Use for Research,” otherwise select No.
Q: Why is Manufacturer Name and Manufacturer Part Number now required to complete the form?
A: This information is important in providing accurate data for UCSF’s capitalized equipment system and accuracy in searching for equipment information by UCSF personnel.
Q: What is the Additional Equipment Information section used for?
A: This section allows you to communicate with the Controller’s Office by indicating how you would like to manage the equipment once it is capitalized in the Asset Management System. The Controller’s Office may follow up with you on any questions they have regarding your instructions.
Q: What does "Part of an Existing System" mean?
A: Select Yes, if the equipment purchase you are making should be added to the value of existing tagged equipment at UCSF--meaning a tag number will not be created for the item(s) in your purchase.
Select No, if the item(s) in your purchase will not be added existing tagged equipment.
Q: What does "Track Equipment Components Separately" mean?
A: Select Yes if you would like the equipment purchased broken up into multiple tag numbers. This action will allow service information to be tracked and maintained per equipment component in the Asset Management System and provides visibility by tag numbers of each component during the physical inventory process. Each component of the order must meet the threshold of $5,000 and above requirement to receive a separate tag number.
Q: How do I provide Capitalization Instructions?
A: If you would like to track components separately, meaning a separate tag number for various components of your purchase, you can provide instructions to Capital Accounting as to how many asset tags you want and how to group them.
Capitalization instruction examples:
Example 1 - “Please capitalize as one single system”
Example 2 - “Please create separate tags to track lens separately, costing $7,000 each”
Example 3 - “Assets to be tracked as 3 systems, each comprised of:
(1) Base unit @ $6,000, (3) Accessories @ $2,000), and software separated as (3) systems.
Q: What does "In a Core" mean?
A: In a Core is defined as a shared-resource laboratory that provides services, products and/or equipment to the UCSF research community.
Q: What does "Exclude from Capital Equipment Web Search" mean?
A: A selection of Yes will prevent the equipment from being searchable in UCSF’s Capital Equipment Web Search page open to employees under UCSF’s Intranet.
Q: What is "Curator?"
A: The Curator role is preassigned in the Asset Management System and is selectable during the purchase process in BearBuy Asset Management tab. The Curator role is typically assigned to lab personnel or others who wish to add additional attribute information to the equipment record once it passes from BearBuy to the Asset Management system, such as descriptive keywords or if the equipment is shareable, etc.