Increased Bid Threshold

1. Increased Bid Threshold

2. House Bill 863 Becomes Law • House Bill 863 (HB63) was passed by the Georgia House and Senate and signed into law by the Governor to be effective July 1, 2012. HB863 raises the competitive bid threshold from $5,000.00 to $25,000.00. • Applies to purchases of supplies, materials, equipment, or non-public works services which can reasonably be expected to be acquired for less than $25,000.00 and are not available on state contracts or through statutorily required sources • This legislative change is expected to increase efficiencies in the purchasing process

3. Sunset Clause and Impact • It should be noted that HB 863 has a sunset clause whereby it shall stand repealed on July 1, 2015, and on which date the competitive bid limit will revert to $5,000.00.  • Background and Impacts: • Proponents of the bill expect an increase of purchasing with small businesses.  We expect the legislature to inquire about trends in spend data to determine if raising the bid threshold resulted in spend with small and local businesses.  • UGA is implementing “sound business practices” as stewards of the State’s funds, to ensure monies are being spent prudently and that due diligence in purchasing decisions is occurring.  Additionally, they assist with meeting federal requirements in specific purchasing situations, particularly in the area of $10,000.00 to $24,999.99.

4. SUMMARY OF NEW REQUIREMENTS AND SOUND BUSINESS PRACTICES

5. IMPACT ON P-CARDS? • It does not affect the p-card rules, policies and procedures, as a different law applies to p-card regulations. The maximum single transaction limit (STL) for p-cards remains $4,999. Please also remember there is a STL on each card which is approved by the cardholder’s department head; it is the responsibility of the cardholder to know the STL for his/her card, ensure it is not exceeded, and that split purchases are not made to avoid the STL.

6. IMPACT ON CHECK REQUESTS? • Yes, there is an impact. Historically there has been a list of categories that were limited to a total cost of less than $5,000.00 and that limit is now increased to less than $10,000.00 for that category of check requests. The new threshold also allows for compliance with certain federal requirements. • Refer to AskUGA Procurement Procedures, Check Requests available at http://askuga.uga.edu/default.asp?id=1447&Lang=1&SID=

7. IMPACT ON STATEWIDE CONTRACT USE? • Do I still need to purchase from a statewide contract if my purchase is less than $25,000.00? • Yes, if the statewide contract is a mandatory contract. If you wish to pursue a waiver from a mandatory statewide contract, please contact the appropriate buyer in Procurement. • If the statewide contract is a convenience contract, you may utilize the convenience contract or purchase from an alternate vendor. If you are paying a higher price than the convenience contract price, it is recommended that you include and retain justification for this action with the purchasing documentation.

8. QUESTIONS ? • You may contact Procurement staff at 706-542-2361 • You may email questions to procure@uga.edu • Remember, there is a “Frequently Asked Questions” document for your reference located at http://www.busfin.uga.edu/procurement/threshold.html