As an agency or public entity when you cannot get what you need from a preferred source, a centralized contract, or other existing agency contracts, it is time to conduct your own procurement. This can be done in two ways: by using a competitive bid or by making a discretionary purchase.
Understanding Competitive Bids
Open competitive bids go by many names including Request for Proposals (RFP), Request for Quote (RFQ), Invitation for Bid (IFB), and Invitation for Quote (IFQ).
The basic competitive bidding process involves creating a document detailing your needs and requirements. This document is then posted for a certain period of time, and interested businesses respond to the request by a certain date. After that date, you open and evaluate the responses. The decision of which business you choose is made on the basis of best value or lowest possible bidder.
Understanding Discretionary Spending Purchases
If purchases are made beneath a dollar limit that is pre-established, it is called a discretionary purchase. You can purchase directly from the business of your choice without a formal, competitive bid process if the purchase is beneath a certain threshold and if you can demonstrate:
- That the purchase meets your needs.
- How and why you selected the vendor.
- The reasonableness of the price.
- That you bought from a responsible vendor.
- That you complied with all your internal policies and procedures.
For agencies that are customers of the BSC, the Purchasing Service Line provides assistance with issuing IFBs for one-time purchases. Visit the BSC website for more information.
All discretionary purchases of $50,000 or more must be advertised in the New York State Contract Reporter. There are a few other things to keep in mind when making discretionary purchases as a state agency :
- Most agencies have a threshold of $50,000.
- When purchases are made from MWBE-certified businesses or when purchasing recycled or manufactured technology or commodities, the threshold increases to $200,000.
- The threshold also increases to $200,000 for food commodities that are grown, produced, or harvested in New York State.
Municipalities & School Districts
Conducting your own procurement at the local level is guided by the adopted procurement policy of your municipality or school district. The Office of the State Comptroller (OSC) can provide guidance and resources to help you, including the OSC Local Government Management Guide: Seeking Competition in Procurement (PDF).