Informal Bid Rules

Date: May 14, 2015

Links (Within This Page):

Rules
Checklists
Helpful Tips
Optional Guidelines for Writing Effective Specifications

Overview:

In order to process an informal bid correctly, you must:

  1. Submit a requisition (including vendor number for low bidder)
  2. Include specifications that were sent to all vendors (the specifications sent to each vendor must be identical for each informal bid)
  3. Include all of the individual quotes submitted by the vendors (at least 3) [no telephone bids are allowed; “no bid” responses do not count for informal bids]
  4. Submit a bid tab (Excel document found at http://purchasing.tennessee.edu/campusresources/default.html)

Please read the rules below. You are responsible for complying with them.

Introduction:

These Informal Bid Rules apply to departments in following areas of The University of Tennessee: Institute of Agriculture

  • Ag Research
  • College of Veterinary Medicine
  • UT Extension (excludes CASNR)

What is an informal bid? Departments may seek three or more quotes. Departments cannot use the informal bid process for requests for proposals (RFPs). Think of this as “get at least three written bids and then submit a requisition.”

The informal bid limit is $50,000. D epartments cannot bind the University, and departments must make that clear to vendors. Only the Office of Procurement Services (“purchasing”) can bind the University in the informal bid process.

This is an option for departments. If you do not feel comfortable doing an informal bid, you may request the Office of Procurement Services to do the bidding for you.

Departments shall comply with the rules outlined below, and all applicable University policies and relevant laws. These rules do not supersede University policy or applicable laws, and these rules are subject to change at any time.

Informal bidding is a privilege. In order to comply with the rules, please be sure to read this information carefully, and check this page often.

Generally, informal bidding must have all of the following elements to be valid:

  • Written responses from suppliers (preferably an electronic process, but hard copy works, also);

  • Vendor completes “vendor information form;”

  • Competition (seek at least three bids);

  • Must be free of anticompetitive practices (for example, you cannot share one supplier’s response with another supplier; you cannot give out “insider information” to suppliers, etc.);

  • Fairness (seek bids from small businesses and minority-owned businesses whenever possible);

  • Consistent (for each bid, you must treat each vendor consistently, send each vendor the same bid request, etc.);

  • Documented (you must document your procurement process).

The Office of Procurement Services will inform the appropriate Chief Business Officer of any department staff who fail to comply with these rules and applicable University policies. Failure to do so will result in a department’s informal bid privileges being suspended (temporarily) or revoked (permanently), and may also subject the individual employee(s) to disciplinary action. In limited circumstances, Tennessee law may deem certain behavior criminal conduct, such as an employee selling goods to the University, or an employee accepting bribes or kickbacks from a supplier.

Again, departments may not use informal bidding for requests for proposal.


Important Note:

Once a department obtains at least three bids, the department will complete the bid tabulation, and then attach all relevant documentation to a requisition and submit in IRIS for approval. The Office of Procurement Services will evaluate the department’s documents, and determine whether to issue an award.


Note:

The University of Tennessee values diversity, and the University encourages departments to do business with minority-owned businesses, and small businesses. Accordingly, the University encourages departments to seek quotes from minority-owned and small businesses whenever possible. If you need help finding such businesses, please contact Procurement Services.

Departments should go to the following website before obtaining bids from small and minority-owned businesses. This website contains a list of all vendors registered with the State of Tennessee’s Governor’s Office of Diversity: http://purchasing.tennessee.edu/search.html

Here is a link to the official Governor’s Office page: https://tn.diversitysoftware.com/FrontEnd/VendorSearchPublic.asp?TN=tn&XID=1215


Rules of Ethics:

The following rules of ethics govern all informal bids:

  1. Department staff shall ensure that their department is in compliance with all applicable University policies (including, but not limited to, the Code of Conduct and Conflict of Interest policies), and department staff shall frequently review all applicable policies.

  2. All departmental staff involved in seeking informal bids or communicating with vendors must keep their conflict-of-interest forms current.

  3. Department staff shall refrain from soliciting or accepting money, loans, credits, or prejudicial discounts (i.e. discount that are not available to the entire University or general public).

  4. Further, department staff shall refrain from accepting gifts, entertainment, favors or services from present or potential suppliers, which might influence, or appear to influence, procurement decisions.

  5. Supplier-paid site visits or training for University employees are not permitted unless stipulated as part of a formal supplier contract that was reviewed and approved by Procurement Services.

  6. Department staff shall conduct business with potential and current suppliers in an atmosphere of good faith.

  7. Department staff shall promote honest and positive relationships with vendors by being courteous and impartial.

  8. Department staff shall give all vendors who submit responses fair and equitable consideration.

  9. Departments must give all vendors for each bid the same information. Departments shall not engage in giving a particular vendor or vendors “insider information” (i.e. information that is not shared with all vendors).

  10. Department staff shall not:

    1. inform a bidder that they are the lowest bidder or the winning bidder;

    2. discuss other suppliers’ responses with any other supplier;

    3. communicate the results with vendors;

    4. share a supplier’s information, communication, or bid response with any other supplier;

    5. notify any supplier of the award.

Rules:

Top

The informal bid process is allowed for purchases of $49,999.99 for a one-time purchase. Departments cannot use informal bidding to obtain:

  • construction services (excludes the Facilities Services department);

  • vehicles.

The department submitting the informal bid is required to provide written documentation detailing the informal bid process.

Departments may use the informal bid process for informal quotations only. Departments shall not submit informal requests for proposals.

  1. All University fiscal policies apply. Departments should refer to relevant policies before starting an informal bid.

  2. When interacting with vendors, you must make it clear that you are seeking quotes only, and that you cannot make a binding commitment.

  3. You must send vendors the “Vendor Information Form” and require them to complete the form and email it back to you.

  4. If something is a factor in your bid, you must mention it in your bid.

    1. Examples:

      1. i. If you are seeking bids on goods, and you want to take the suppliers’ warranty into consideration, you must mention this in your specifications.

      2. ii. If delivery date is a consideration, you must list that in your specifications.

    2. Departments may not solicit bids for services that require a contractor's license, insurance, or performance bonds.

  5. Departments shall seek bids from at least three separate suppliers. Departments cannot submit a requisition until the department has received three responses. (Note: a vendor’s response with a “no bid” does not qualify as a bid under these rules).

  6. Departments shall not split transactions or bids in an effort to be below the formal bid limit of $49,999.99.

  7. If delivery time is a factor in the award, then departments must communicate this to the potential suppliers.

  8. Departments shall not falsify or manipulate a supplier’s bid response details.

  9. Departments shall develop sufficiently clear specifications to define what goods and services are being sought. Departments must permit competition between products of equal quality.

  10. Departments must write specifications in an objective manner.

  11. Bids obtained from vendors and submitted to the Office of Procurement Services must be for the same specifications.

  12. Departments shall not modify the specifications after sending the specifications.

  13. Specifications must include requirements for design, installation, warranties, maintenance and shipping.

  14. Departments must require suppliers to include in the supplier’s response all possible costs involved in the supplier’s good or service (for example, delivery, installation, etc.).

  15. Departments are encouraged to obtain informal bids from small businesses and minority-owned businesses, and should do so whenever possible. See the following website for a searchable database: http://purchasing.tennessee.edu/search.html

  16. Departments’ informal bid requests must be in writing (email, fax, or letter). The University encourages departments to use email, as this reduces costs and increases the efficiency and effectiveness of the informal bid process.

  17. Telephone bids and website screen-shots are not acceptable.

  18. If a department seeks quotes on used or refurbished equipment, the department must also obtain quotes on new equipment.

  19. If a department seeks quotes on leasing an item, the department must seek a quote on purchasing the items.

  20. Departments must use the bid tab report located here [insert link], and departments must submit this with each requisition.

  21. Departments must ensure that an IRIS vendor number is created before the Office of Procurement Services issues an award to the winning bidder.

  22. In the event that a department wants to award to a bidder who is not the lowest bidder, the department must provide justification with the bid tab form.

  23. The department may not share any bid information submitted from any bidder to anyone other than the Procurement Services department.

  24. Departments may never share bid information from one bidder to another bidder.

  25. Departments shall not notify a bidder that the bidder won. The Office of Procurement Services will notify the winning bidder.

  26. Departments shall submit the informal bid responses in IRIS for review by the Office of Procurement Services.

The Office of Procurement Services will review the bids. The Office of Procurement Services may request additional information, or may issue a purchase order.



Required Information from the vendor:
  1. A substantive quote that is responsive to the departments’ specifications.

  2. Shipping terms.

  3. All possible costs (including all fees for shipping and delivery, installation, set-up, removal, etc.). Note: if exact shipping costs are not known, as for all suppliers to estimate the maximum possible shipping costs.

  4. All costs must be itemized.

  5. Vendor’s federal identification number.

  6. Vendor’s remit-to address.



Tips for Writing Bid Specifications:

  • Use objective characteristics, and use generic/common descriptions for goods or services. For example, don’t say “Kleenex,” say “facial tissues.”

  • Be clear and precise, and avoid ambiguity (ambiguity is when a word is reasonably interpreted to mean more than one thing). For example, “tall” is ambiguous.

  • When specifying compliance with certain industry test methods or standards, include copies or indicate where copies may be obtained.

  • When sizes, weights, speeds, etc. are a part of the specification, determine if a range is acceptable then indicate minimums or maximums or approximates.

  • Be sure to include who is responsible for shipping costs.

  • Give the Office of Procurement Services as much information as possible (for example, if you bid items for an existing piece of equipment, include the PO number for the existing equipment, if applicable).

  • Indicate the appropriate unit of measure (e.g., liters, feet, etc.). If you say “box” or “package,” be sure to specify how many units should be in a box or package.

  • If compatibility with an existing piece of equipment is a factor, describe the equipment, connectors, interfaces, brand and model of the existing equipment.


Helpful Reminders:

Departments must utilize internal University resources if the goods or services are available internally by the University.

Do not conduct any business with members of your family or with businesses in which you have a financial interest.

Do not split requisitions to avoid the formal bid limit of $50,000.

Do not submit false or altered bids or engage in other unethical practices.

We recommend, but do not require, that you use deadlines of 4-6 business days. This may help encourage vendors to respond quickly. Note: vendors must be given the same amount of time to respond and the deadline must be the same date and time for all vendors you solicit.

Checklists:

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Before seeking informal bids:

  1. Check your budget to ensure that you have sufficient funds to pay for the good or service.

  2. Check to see if internal University resources can provide the good or service. If so, you must utilize the internal University good or service.

  3. Check to see if there is an existing UT contract or State of Tennessee contract. If there is, and if the price is cheaper, then you must use the existing contract.

  4. Check to see if the UT Marketplace has the good or service available. If so, you must utilize the UT Marketplace if the item is cheaper in the Marketplace.

  5. If applicable on your Campus or Institute, ensure that you seek all necessary prior-approvals (entertainment, etc.).

  6. Read the Informal Bid Rules website. Don’t refer to a printed copy, as the rules can change.

  7. If needed, review the optional helpful tips for writing better specifications.



When seeking informal bids:
  1. Ask suppliers for discounts applicable to non-profit educational entities and state government entities.

  2. Be sure to send the vendor the applicable tax exemption information.

  3. Obtain three written bids from three separate vendors (“in writing” includes email or other quotes from the supplier).

  4. Send the vendors the “vendor information form” to capture necessary information from the vendors.

  5. Telephone bids are not acceptable.

  6. Website screenshots or print-outs are not acceptable.

  7. Do not share a supplier’s information, communications, responses, etc. with other suppliers.

  8. Make reasonable efforts to obtain bids from small and minority-owned businesses. Please search for vendors by using this link: http://purchasing.tennessee.edu/search.html

  9. You must receive three bids before you can proceed.


After:
  1. If the winning bidder has not been set up as a vendor in IRIS previously, the department must create a vendor number for the winning bidder.

  2. Fill in the bid tab.

  3. Attach the bid tab and all suppliers’ bids in IRIS.

  4. Add this comment in the requisition:

  5. Submit requisition.


Helpful Tips:

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Before you obtain bids, be sure to include all of the necessary information in your communications to suppliers. Below, please find a list of helpful tips.

All vendors:

Discounts: Please remind all vendors that the University is a state government agency and a non-profit higher education entity. (Legally, the University is an IRS 170(C) organization (not a 501(c)(3)), and the University is an instrumentality of the State of Tennessee).

Be sure to specifically ask for all discounts applicable to: non-profit higher educational agencies and state government entities.

Tax Exemption: Be sure to send the vendor the appropriate tax exemption information. You can find out where the University is tax exempt by going to this website: controller.tennessee.edu and clicking the “tax” link.

Note: the University is exempt from most taxes in Tennessee, and certain, specified taxes in other states. Be sure to check the Controller’s office website.

The lists below are simply to help you think through what you need. You might think of other things to ask suppliers, and that’s completely acceptable. Just be sure to communicate the same needs to all suppliers.


Goods:
  • Quantity

    • Be more specific than “box” or “crate.” Be sure to know the exact quantity you are buying.

  • Does the item need to be installed?

    • Specify location.

    • Specify dimensions or other facts.

  • Warranty

    • If warranty is a factor, you must mention this in the specifications.

  • Delivery:

    • What are the delivery costs?

    • Is delivery time a factor in your award?

    • Where does the item need to be delivered?

    • Will the items be insured while in transit?

  • Include any relevant compatibility requirements.

  • If needed, inquire about warranty offerings.


Services:
  • Indicate the timeframe in which you want the services provided.

  • Does the service need to be compatible with certain existing systems?

  • Does the service provider need to be familiar with particular standards?

  • How soon do you need the services?

  • Does the service provider need access to campus?

Hotels:
  • Sleeping rooms:

    • Be sure to specify the number of rooms per night.

    • Do you need any handicap accessible rooms?

  • Meeting rooms:

    • Capacity: specify how many people per day need to be in the room.

    • Set-up: if a particular set-up is necessary, please specify this.

  • Time:

    • During what times each day do you need the meeting room?

    • Will you need to leave items in meeting rooms overnight?

  • Food and beverages:

    • Breakfast: is breakfast included in the hotel’s room rate?

    • Meals:

      • Specify time.

      • Specify number of people.

      • Specify any special dietary needs.

  • Parking:

    • Ask the hotel if there is a charge to park?

    • Does your department need to park a bus? If so, ask the hotel whether there will be an extra charge for this.

  • Wi-fi: Is wireless internet free?

  • Audio-visual: There are lots of different audio-visual equipment, so the list below is overly general.

    • Podium (lectern)

    • Projector

    • Projector screen

    • Laptop

    • Microphone

      • Stations

      • Lapel

      • Hand-held

    • Wireless presenter device (commonly called a “wireless clicker”) for slideshows

    • Telephone

    • Television

      • Size

    • Speakers

    • Electronic computer tablet



Discussion:

Here are a few common terms in the hotel industry that apply to dealings with hotels:

  • Attrition: A threshold minimum guarantee of a certain amount of bookings or revenue. For example, the hotel will require you to fulfill a minimum of 80% of your booked room occupancy, or you will be charged the difference between actual occupancy and 80%.

  • Cancellation: Completely cancelling the event. Hotels usually impose cancellation fees, and these fees are based on how far in advance you cancel. The longer in advance you cancel, generally, the lower the cancellation fees will be.

  • “Walk:” On almost a daily basis, guests who have reservations do not show up for various reasons. Many times, guests fail to show up because of an emergency, a flight delay, or other reasons beyond their control. In those cases, hotels often do not charge the guest for the room. In order to increase their revenue to account for the lost rooms, hotels often over-sell their rooms. For example, if a hotel has 200 rooms, the hotel will often allow reservations booked for 204 or 205 rooms. In this example, if all 204 people show up, then the hotel will “walk” (relocate) the 4 extra people. Almost always, the hotel will pay for those 4 people to stay one night in another hotel, the taxi fare to the other hotel, and for one local phone call.



Hotel industry practices:

Hotels are free to bargain, and hotels do not have to offer these items. The discussion below is meant to help you understand what to ask for when seeking to do business with a hotel:

  • Complimentary sleeping rooms: Hotels often give a group 1 free room per night for every 40 rooms paid for per night, per stay. In other words, if you book 50 rooms for 2 nights, it’s likely that the hotel will give you 1 free room per night.

  • Complimentary meeting rooms: Hotels often give a group free meeting space when the group books either food and beverage, or sleeping rooms.

  • Complimentary parking: Hotels sometimes offer complimentary parking to groups.

  • Complimentary Wi-Fi: Hotels often offer free Wi-Fi to groups.

Optional Guidelines for Writing Effective Specifications

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For anyone outside the university, please see notes at the end. This document is internal guidance only.

Introduction:

The term “specification” simply means the description of a good or service that you want to buy. The goal is to tell suppliers specifically (thus, “specification”) what you are looking to buy. You might hear or see the term “specification” abbreviated as “specs.”

Your specifications must be as clear and complete as possible.

Why do we need specifications? The University’s goal is to encourage open competition among suppliers to save money and to get the best deal possible. Departments will use specifications to search for quotes on goods or services. The Office of Procurement Services will use the specifications to determine whether a supplier’s bid was adequate in response to the specifications.

So, you’re ready to do an informal bid? Before you get started, please consider these preliminary steps:

Preliminary Steps:

  1. Talk to the “end user” (the people who will be using the good or service) in your department. Ask them questions, and be sure to utilize their expertise and knowledge.

  2. Search the internet for companies who sell the good or service you’re seeking.

  3. Be sure to think about quantity, quality, weights, measurements, etc.

  4. Be sure to think about delivery.

    • When do you need the item?

    • Where will it be delivered?

  5. Does the good or service you are buying need to be compatible with something your department currently uses? For example, compatible with certain software? If so, be sure to state this in your specifications.

  6. f you are uncertain how to write a specification, contact the Office of Procurement Services.



Good Specifications:

The “Four C’s”

✔ Clear: write your specifications clearly. Avoid ambiguity and vagueness.

✔ Concise: write complete, but concise specifications. Avoid excess verbiage.

✔ Complete: include all required information is in the specifications.

✔ Correct: ensure that your specifications are technically accurate and applies to the project (meets your needs)



Good specifications are written in standard English (that is, English used by educated native English speakers). Moreover, good specifications must be clear. Be sure to write specifications in a manner that isn’t up to interpretation about what you need. For example, if you want an “environmentally friendly” machine, don’t use the word “green.” Green is a color, and has no bearing on environmental standards. Instead, you might say: “Energy Star certified” or some other objective description.

Be sure to list your requirements clearly. Consider the following before you start writing:

  • Color
  • Physical dimensions
  • Composition (such as, chemical composition)
  • Purity
  • Design standards
  • Quantity
  • Dimensions
  • Size
  • Form
  • Standard of workmanship
  • Grades of materials
  • Type of ingredients
  • Percent
  • Unit of measure (Metric or U.S. measurements)
  • Performance
  • Weights


Figures and Tables: Do you need to include:

  • Figures

  • Illustrations

  • Photos

  • Graphs

  • Charts


General drafting guidelines:

Use short, easy-to-read sentences (avoid run-on sentences). Keep paragraphs short, too (3-5 sentences per paragraph). Avoid using abbreviations, acronyms, slang, or jargon. It’s OK to use abbreviations or acronyms, but only if you define them first!



Active voice:

Use the active voice only. Active voice is when the subject of the sentence does the action. Using passive voice (when the subject is no longer active) leads to unclear sentences, confusion, and excess words. For example:

Active: The cat played with the toy mouse.
Passive: The toy mouse was played with by the cat.

Active: The university must have the following…
Passive: The following items are needed by the university…



Specifying Time:

Time Zones: If you specify a time zone, please remember that “daylight savings time” and “standard time” are specific periods of the year. If you see “EST” or “Eastern Standard Time,” that is referring to a specific time of year. Most people forget that. Do not reference “standard” or “daylight” when specifying a time zone. Instead, simply reference “Eastern Time,” “Central Time,” “Mountain Time,” or “Pacific Time.”


Time of Day: If you use capitals, don’t use periods. Use “AM” or “a.m.”, and “PM” or “p.m.”



Numbers:

Digits only: Do not spell out numbers (for example, do not write “twenty,” instead, write “20”). Digits are much easier to proofread. Never use digits plus spelling, such as “twenty (20)” as this is archaic, and also likely to cause conflicts. Many people will update the word or the digit, but not both.

Do not use ambiguous words: Below is a list of words that you should avoid using when possible because these words are ambiguous (there are many other words that might be ambiguous):

about quality recognized
acceptable immediately relevant
accurate improper reputable
adequate instant safe
adjustable insufficient sanction
affordable known secure
applicable less significant
appropriate low similar
average major simple
better neat smooth
capable necessary stable
careful normal substantial
deep optimum sufficient
dependable other suitable
desirable periodically temporary
easy pleasing timely
economical possible typical
efficient practicable variable
essential practical various
excessive proper wide
good quick workmanlike
high reasonable worse


Measurements:

 

 

Length

 

 

 

U.S.

Metric

 

 

in (inches)

mm (millimeters)

ft (feet)

m (meters)

yd (yards)

m (meters)

mi (miles)

km (kilometers) 

 

 

 

 

Area

 

 

 

U.S.    

Matric

 

 

in2 (square inches)

mm2 (square millimeters)

ft2 (square feet)

m2 (square meters)

yd2 (square yard)

m2 (square meters)

ac (acres)

ha (hectares)

mi2 (square miles)

km2 (square kilometers)

 

 

 

 

Volume

 

 

 

U.S.

Metric

fl oz (fluid ounces)

mL (Milliliters)

gal (gallons)

L (Liters)

ft3 (cubic feet)

m3 (cubic meters)

yd3 (cubic yards)

m3 (cubic meters)

 

 

 

 

 

 

Mass

 

 

 

U.S.

Metric

 

 

oz (ounces)

g (grams)

lb (pounds)  

kg (kilograms)

T short tons (2000 lb)         

Mg (or "t") megagrams (or “metric ton”)

 

 

 

 

Temperature

 

 

 

U.S.

Metric

 

 

°F (Fahrenheit)

°C (Celsius)

 

 

 

 

Illumination

 

 

 

U.S.

Metric

 

 

fc (foot-candles)

lx (lux)

fl (foot-Lamberts)   

cd/m2 (candela/m2)

 

 

 

 

Force and Pressure or Stress

 

 

 

U.S.

Metric

 

 

lbf (poundforce)      

N (Newtons) 

lbf/in2 (poundforce per square inch)      

kPa (Kilopascals)