Purchasing Bid Thresholds
As an Agency of the State of Louisiana, we are subject to certain purchasing limitations that private entities and institutions are not. Every purchase above $5,000, with the exception of purchases exempted by the Governor's Executive Order for Small Purchases, must have some degree of competition. This Executive Order governs the majority of our purchases here at LSU Health Sciences Center. The major points of interest in the Executive Order are as follows:
- No Competition is required on purchases less than $5,000 per transaction.
- Three (3) Quotes are required for purchases between $5,001 and $15,000. Price quotations may be secured via phone, fax, or in writing from prospective suppliers.
- Five (5) Written/Faxed Quotes are required for purchases between $15,001 and $25,000. The Purchasing Department will obtain these five written/faxed quotes. Bids shall be accepted for a minimum of three (3) working days.
- A minimum of five (5) Sealed Bids are required for purchases above $25,000. Bids shall be accepted for a minimum of twenty-one (21) days. Purchases above $25,000 must be advertised in accordance with Louisiana State Purchasing Regulations, Section 503.
The most significant exemption affecting the LSU Health Sciences center is covered under Section 5, Part A., Number 26. "No competitive process is required for the following items:....26. Scientific and laboratory supplies and equipment when procured by colleges and universities for laboratory or scientific research not to exceed twenty-five thousand dollars ($25,000) per transaction." This exemption affects a significant percentage of our purchases and allows our researchers the flexibility they need to be successful. Only laboratory, scientific, and research supplies and equipment will be exempt. Services like maintenance, rentals, and other "support" services will probably not fall under the exemption in most cases.
On purchases not exempted, once pricing is secured from potential suppliers, confidentiality in regards to that pricing is paramount. Haggling with suppliers after pricing is submitted is strictly prohibited. Inquiries from suppliers about a particular procurement should be directed to the Purchasing department.
In order to ensure that the proper competition is solicited, every effort should be made by the purchaser to ensure that the quote is correct at the outset. Add-on charges such as shipping, handling, and installation should be quantified on the initial quote to avoid violations of purchase regulations later.
Artificially adjusting or splitting the purchase is against Louisiana State Law and can result in serious consequences for both the employee and the agency.
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