Integrated CSU Administrative Manual

CSU POLICY

Section:   CSU POLICY MANUAL FOR CONTRACTING & PROCUREMENT

Section 5000 Policies

Policy Number:  5206.0

Policy Title: Limits on Competition

Policy Effective Date:  April 28, 2008

Last Revision Date:  
(see revision history)

POLICY OBJECTIVE

To establish system wide contracting and procurement policy as required by Education Code 89036.

POLICY STATEMENT

It is the policy of the CSU to promote fair and open competition to the maximum extent possible.  This section prescribes the policies to be used in those instances where other than full and open competitive contracting is required to fulfill the requirements of the CSU.

Sole brand and sole source are two procurement methods that limit competition.  Any decision to limit competition may also have the effect of limiting the CSU’s ability to minimize costs, negotiate favorable terms and conditions, and allow for alternate courses of action during disputes. These methods should be used only when it has been determined that other competitive procurement methods will not fulfill the requirements of the CSU.

Each sole source or sole brand request must include a written justification explaining why the sole source/brand is necessary to satisfy the needs of the CSU.  Except when a contract is necessary for the immediate preservation of the public health, welfare, or safety, or the protection of CSU property and programs, the request must be approved prior to the execution of the sole source or sole brand contract.  The justification shall include the following information.

  1. The unique performance factors required;
  2. Why these factors are required;
  3. What other source/brands have been considered or rejected and why.

Sole source or sole brand requests shall not be justified on the basis of:

  1. A lack of advance planning;
  2. Concerns related to the amount of funds available for the acquisition of the goods or services; or
  3. A previously non-competitively bid contract for which the price to the CSU was zero or substantially below fair market price and the results of such contract caused the sole source or sole brand to be required on future contracts.

The drafting or application of specifications or solicitation requirements for goods or services that are unnecessarily restrictive in such a manner as to limit, directly or indirectly, competition to a single brand or single source does not provide for full and open competition, regardless of the number of sources solicited, and is prohibited.  A “brand name or equal” is a competitive process that allows bidders to propose equivalent items.

 

100  Sole Brand Procurement (Rev. 03/03/03)

A sole brand procurement is prohibited except in the following instances:

  1. The sole brand product is unique and essential to the CSU’s requirements, thereby precluding consideration of a product manufactured by another company, or
  2. The sole brand product is required to match other similar product already in place and the use of an alternate product would cause the CSU to incur substantial additional costs.
  3. The sole brand product is required for the immediate preservation of the public health, welfare, or safety, or the protection of CSU property and programs.

The determination as to whether a procurement has been adequately justified in writing for a sole brand award shall be made by the designated campus authority.

 

200  Sole Source Procurement (Rev. 04/20/04)

Except where a contract is necessary for the immediate preservation of the public health, welfare, or safety, or the protection of CSU property and programs, a sole source procurement is permissible only when a determination has been made and approved in writing, that only one source exists for the required product or service.

A requirement for a proprietary (or sole brand) item does not necessarily justify sole source procurement, as more than one potential bidder or supplier may exist who can supply that item.

The sole source request must clearly demonstrate:

    1. That there is only one source or only one supplier that can provide the goods or services in accordance with the requirements of the CSU, or
    2. The existence of limited rights in data patent rights, copyrights or secret processes makes the supplies or services available from only one source (however the mere existence of such rights or circumstances does not in and of itself justify a sole source procurement).

Addition of new work that was not within the scope of or incidental to, the original contract scope of work, either as part of the base contract or as an option, is subject to sole source requirements. The determination as to whether a procurement has been adequately justified in writing for a sole source award shall be made by the designated authority.  Campus sole source requests for acquisitions $100,000 or more must be approved by a campus authority no lower than Vice President for Administration/Finance.  For sole sources of $250,000 or greater, a copy of the requisition, the justification, and other pertinent documentation must be forwarded to the Chancellor’s Office CS&P for review and final approval.

 

300  Exceptions to Competition Requirements (Rev. 04/28/08)

The following transactions are not required to be competitively bid and do not require a sole source approval.

    1. Emergency contracts which are necessary for the immediate preservation of the public health, welfare, or safety, or the protection of CSU property and programs;
    2. Contracts for the work or services of a state, local or federal agency, the University of California, a California community college, a foundation or auxiliary organization incorporated to support the CSU, or a Joint Powers Authority of which the CSU is a member;
    3. Contracts for which only per diem and travel expenses are paid and there is no payment for services rendered;
    4. Contracts for the express purposes of obtaining non-CSU legal counsel or obtaining expert witnesses for litigation (both of these must be submitted to the Office of General Counsel for approval);
    5. Contracts with business entities operating Community Rehabilitation Program workshops as specified in Policy Section 219;
    6. Equipment maintenance contracts for which there is only one authorized or qualified source required by the equipment manufacturer for the preservation of equipment warranty;
    7. Proprietary software maintenance, annual license renewals, and/or upgrade contracts;
    8. Utilities contracts for which there is no competition because of sole authorization to provide service to the geographical area;
    9. Public entertainment contracts for campus-sponsored fairs, expositions, exhibitions, plays and concerts;
    10. Contracts for conference or meeting facilities, including room accommodations for conference attendees;
    11. Educational materials and information access resources related to campus library services as specified in Policy Section 303.04;
    12. Personal property acquisitions as specified in Policy Section 301A, Bid Thresholds for Personal Property;
    13. Procurement of Services as specified in Policy Section 401A, Bid Thresholds for Services;
    14. General Services Administration Pricing Schedules in accordance with Policy 204D;
    15. California Department of General Services Multiple Award Schedules exempted by DGS and listed at http://www.documents.dgs.ca.gov/pd/masters/checklist.pdf;
    16. Contract amendments for time extensions, with no additional dollars being added;
    17. Contract amendments to exercise options that were part of the original contract or that were part of a previously approved amendment to the contract;
    18. Contract amendments that are within the scope of or incidental to the original contract scope of work;
    19. Approved Sole Brand procurements where there is only one source for that product;
    20. Contracts for professional examinations and memberships;
    21. Contracts for goods or services produced by Prison Industry Authority.

APPLICABILITY AND AREAS OF RESPONSIBILITY

 

REVISION HISTORY

 

RESOURCES AND REFERENCE MATERIALS

Useful Guidelines:

 

Related Principles:

 

Sound Business Practices:

 

Laws, State Codes, Regulations and Mandates:

Reference: Executive Order 775

COGNIZANT OFFICE(S)

CO Manager:

Tom Roberts
Director, Contract Services & Procurement
CSU Office of the Chancellor
troberts@calstate.edu

Subject Expert:

Tom Roberts
Director, Contract Services & Procurement
CSU Office of the Chancellor
troberts@calstate.edu

Affinity Group:

Procurement and Support Services Officers

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