Handbook of Business Procedures

7.5.5. INVITATION TO BID (ITB) - PURCHASE VALUE GREATER THAN $50,000; BASED SOLELY ON PRICE AND DELIVERY

A. Guidelines

When the expected value of the goods or services exceeds $50,000, a formal solicitation process is required. The following guidelines apply to the Invitation to Bid (ITB) solicitation method:

• An ITB is used when the decision to award the contract is made solely on the basis of price and delivery.
• An ITB is normally used when the procured good or service lends itself to a precise set of specifications, such as manufacturer part numbers, size, weight, number of classes, etc.
• ITB opportunities are sent to known suppliers who provide the good or service and publically posted on the Formal Bid Opportunities website so that any supplier may submit a response.
• Terms and conditions that govern the contract are contained within the ITB. Suppliers can note exceptions to certain terms and conditions; however, the university may disqualify a supplier for not accepting the posted terms.

B. Procedure

1. The department submits a POINT Plus PB4 requisition document that includes a list of all required items.
2. Anyone who will be answering bidder questions or reviewing bid responses must complete a Non-Disclosure/Conflict of Interest Statement before the ITB is issued. The designated purchasing buyer will provide the form.
3. The purchasing buyer drafts an ITB document, which includes:
   1. a full description of all required items
   2. instructions for the bidder on how to submit pricing and delivery
   3. submittal instructions and the deadline by which to submit the bid
   4. terms and conditions
4. The ITB is posted for a minimum of two weeks.
5. Bids received are held until the bid opening date. Suppliers are permitted to attend bid openings and can request that bids be read aloud.
6. The Purchasing Office tabulates the bids.
7. The purchasing buyer may need to take steps to determine if pricing received from a bidder is fair and reasonable (ref. FAR 15.404-1). This can be done by comparing the proposed price to that of a same or similar item by reviewing:
   
        • historical prices paid;
   
        • published price lists;
   
        • or prices obtained through market research, including Web research.
   
   The purchasing buyer should also confirm with the respondent that the pricing is the best pricing available and that no other discounts or incentives are available to the university.
8. The purchasing buyer notifies the department of which bidder(s) are selected and obtains the department’s agreement. Multiple awards are possible in order to achieve the lowest cost and/or fastest delivery to The University of Texas at Austin.
9. All bidders are notified by the Purchasing Office when an award is made.
10. The purchasing buyer issues a purchase order to the supplier. In cases where a contract may be more appropriate than a purchase order, the Purchasing Office will notify the Business Contracts Office, which will work with the department to develop a contract.

Part 7. Purchasing - Table of Contents