PUR 201–03: Value in Procurement
To ensure value when purchasing goods and services
United States. Office of Management and Budget. OMB Circular A-110 (revised 11/19/93 as further amended 9/30/99)
United States. Office of Management and Budget. OMB Circular A-21 (revised 8/8/00)
Arizona Board of Regents Policy Manual - 3-801 to -810
Purchasing and Business Services
All procurements made by the university, regardless of the source of funds
Individuals purchasing goods and services must ensure the value of the goods and services purchased. Value is assured when the goods and services are obtained in a timely manner, with reasonable cost, through an appropriate level of competition, and in accordance with applicable federal and state regulations.
The following guidelines will assist individuals in obtaining value for small-dollar goods and services.
Individuals using one of the university small-dollar purchasing programs only need to take these guidelines into consideration when making the transaction.
Other factors to consider when determining value of goods and services are price and/or cost analysis, make vs. buy considerations, and competition.
Price and/or Cost Analysis
Before purchasing goods or services, individuals should determine that the price to be paid is fair and reasonable. For individuals using one of the university small-dollar purchasing programs, fair and reasonable cost is determined by considering the prices charged for similar goods and services by competing firms.
Make vs. Buy
Individuals should consider whether value for goods and services can be assured through making vs. buying the goods and services. For individuals using one of the university small-dollar purchasing programs, a make vs. buy decision can be made by considering if a university source can make or supply the goods or services.
Very few goods and services are purchased without some consideration of competition. Individuals using one of the university small-dollar purchasing programs should consider the prices charged by competing firms for alternative goods and services.
For individuals using one of the university small-dollar purchasing programs, no documentation of the determination of value for money is required. The completion of the transaction is sufficient evidence that the individual has determined that the university will obtain value for goods and services.
Price and/or Cost Analysis
For formal solicitations, a Purchasing and Business Services buyer may have to take into consideration other price and/or cost factors.
Make vs. Buy
Individuals should consider whether value for goods and services can be assured through making vs. buying the goods and services.
Lease vs. Buy
Individuals should consider whether value for goods and services can be assured through leasing vs. buying the goods and services. For more information, see PUR 602–01, “Lease vs. Buy Considerations.”
Purchasing and Business Services buyers who place orders under the formal competition limit of $50,000 are using their professional knowledge of the commodity and market to determine that the price for goods and services is fair and reasonable. For transactions costing more than $25,000, but less than $50,000, informal competition is normally obtained. For transactions costing more than $50,000, formal competition is normally encouraged.
High dollar transactions require the signature of a Purchasing and Business Services buyer on the purchase order or agreement, or the signature of an individual with signature authority on agreements (see PUR 202, “Contract Signature Authority”). The signature of the buyer or authorized signer indicates that a determination of value for goods and services has been made.
Vendors that do not offer value for goods and services are placed on the Consolidated General Services Administration Debarred List, a listing developed by federal agencies. Accordingly, the university will not do business with vendors on the list. To determine if a vendor is on the list, individuals may:
Buyers conducting formal solicitations determine if vendors are on the debarred list by requesting bidders or proposers to certify their status.
For information on the authority for signing contracts and other agreements, see PUR 202, “Contract Signature Authority.”
For information on the university small dollar purchasing programs, see:
For information on lease versus buy considerations, see PUR 602–01, “Lease vs. Buy Considerations.”
For information on the public purpose served, see the Financial Services Policies and Procedures Manual—FIN 119, “Public Purpose Served.”