UCR

UCR Policies and Procedures

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Campus Policy Number: 750-39

Low-Value Purchase Authorization (LVPA) Program
Policy Owner: Purchasing
Effective Date: 10/15/93

  1. PURPOSE
  2. The low-value purchase authorization (LVPA) program is designed to provide timely and cost-effective procurement action through efficient utilization of personnel in both the Purchasing Division and the participating department. This purpose is achieved through a delegation of procurement authority to departments with demonstrated procurement ability that wish to participate in this program. The delegation is accomplished through the issuance of "Various Vendors" blanket purchase orders to each participating department.

  3. ELIGIBILITY-STANDARD LVPA
  4. Any campus department which assigns purchasing responsibilities to a specific individual are issued a LVPA. Applications for a LVPA may be accomplished by submitting a request (use a standard purchase requisition, form #71400-100) signed by the Department Chair, or designee, indicating the individual(s) responsible for LVPA duties. Signature authorization forms for the responsible individual(s) must also be submitted if not already in place.

  5. GENERAL RESTRICTIONS AND PROHIBITED PURCHASES
  6. The LVPA program requires that the item(s) being purchased are:

    • Low-dollar value; not to exceed $500 per day per vendor, excluding sales tax and delivery charges. (NOTE: Purchases to the same vendor that exceed the $500 limitation shall not be divided on separate sub-purchase orders or split between different dates in order to circumvent this restriction. Violation can result in withdrawal of the low-value delegation.)
    • Not available in the Storehouse.
    • Not available from Planned Purchasing Agreement or local agreement sources (unless the item(s) are being ordered from the agreement source).
    • Not items which require special approvals (in addition to approval from the person authorized to issue the LVPA order). (See 750-63)

    Examples of items requiring special approval or that are prohibited from LVPA purchase are as follows:

    • Furniture
    • Ethyl alcohol (See 750-93)
    • Controlled Substances. (Narcotics and dangerous drugs - Ref. 850-35)
    • Firearms
    • Precious Metals
    • Explosives
    • Personal services/consulting services (750-27)
    • Food items
    • Entertainment expenses
    • Items requiring a waiver of liability
    • Repair services available through established maintenance blanket orders. (750-45)
    • Publication reprints available through established publication blanket orders (750-03)
    • Items from outside the U.S.
    • Radioactive items
    • Items from State Surplus
    • Items from UC employees or near relative of UC employees (750-63)
    • Items that are inventorial or are to be price adjusted to equipment. (750-09)
    • Items to be used for the fabrication of equipment (750-18)
    • Reimbursements to UC employees
    • Respirators
    • Other items that may be identified as prohibited on the LVPA blanket delegation.

    The Materiel Manager, or designee, may grant exception in advance of purchase both as to amount and as to items to be purchased in emergency situations on a single transaction basis.

  7. PROCEDURAL GUIDELINES FOR LVPAs
  8. Outlined below are the minimum requirements for proper discharge of LVPA duties. Departments are encouraged to develop additional procedures, tailored to their respective operations, to ensure positive business practices in the use of their LVPA.

    1. Prequalification
    2. Departments shall solicit quotes and secure goods and services from prequalified vendors only. Prequalified vendors may be identified through the use of the "Vendor File Master Listing" which is available from the Computing and Data Communications Department.

      In an instance where a vendor has a satisfactory performance history with the University but has not yet been prequalified, prequalification may be accomplished concurrently with the quotation and/or order placement process. A copy of the completed prequalification form shall be sent to the Purchasing Division who will determine the vendor's qualification status and process the information for the prequalification files. It is the initiating department's responsibility to ensure all information requested on the prequalification form has been properly supplied prior to sending the form to Purchasing.

    3. Business Affirmative Action
    4. It is the Policy of the University of California, consistent with State and Federal law, to take affirmative action to optimize opportunities for business contracting with small business enterprises, particularly small disadvantaged and women's business enterprises, in the areas of purchasing, construction, and design and other professional services provided to the University, and to ensure the placement of a fair proportion of business contracts with such enterprises.

    In order to fulfill this policy to the maximum extent possible,those departments with LVPA delegations shall act in accordance with the UC Administrative Vice Chancellor's November 4, 1987, recommendations to the Council of Chancellors as described below.

    1. Whenever a targeted vendor is available to furnish the needed goods or services and the prices quoted by this vendor are determined to be reasonable, departments may award to that vendor without additional solicitation.
    2. When solicitation of quotes is appropriate, departments should follow these guidelines:
      • Whenever two or more targeted vendors are available to provide the required goods or services, and the prices quoted are within a "reasonable" range, departments are to RESTRICT COMPETITION to these firms.
      • Whenever no targeted vendors are available to provide the required goods or services, or the prices quoted via restricted competition are not within a "reasonable" price range, or there is a question whether the quoted prices are "reasonable", departments are to include additional vendors in such solicitation, including non-targeted firms.
    3. Departments are strongly encouraged to utilize targeted firms to the maximum extent possible whenever such a firm can fulfill departmental needs at a reasonable price.

    4. Price Reasonableness (Reference definition of "Reasonable Price", 750-72,b.1)
    5. In all procurement transactions, the price paid by the University must be reasonable. Although the transactions under LVPA program are of a low-dollar value, the possibility of unreasonable prices still exists. Departments are encouraged to take all reasonable positive measures to ensure a price to be paid is reasonable. Several methods may be employed for this confirmation, such as:

      • Utilization of a University Planned Purchasing agreement or local campus agreement. These prices are automatically considered reasonable (this is because the agreements themselves have already been researched and found to contain reasonable prices);
      • Use of competitive techniques; solicitation of several sources with award to the lowest priced vendor meeting requirements;
      • Comparison of quoted price(s) to price(s) previously paid; and
      • Comparison of quoted prices to published catalog prices.

      In the event it is determined a price or condition of purchase is not reasonable, negotiation may be used to obtain the desired result. All vendors shall be treated on a fair and equal basis without any indication of a price which must be met (a budgeted amount or estimate may be disclosed as appropriate), relative standing, identity of competition, or the content of other quotations or proposals.

    6. Recordkeeping
      1. All LVPAs require the issuance or sub-purchase orders for each transaction. These sub-purchase orders must be issued at the time of commitment to the transaction.
      2. Transactions issued under this LVPA program must be documented sufficiently as to the manner in which a price was determined to be reasonable. This documentation must be adequate for proper audit of actions taken and methods used for price reasonableness determination. Purchasing recommends using the reverse side of the "issuing department" copy of the sub-purchase order form for such documentation.
      3. Periodic appraisals will be conducted by Internal Audit or by an appropriate designee of the Materiel Manager to ensure compliance with the conditions of the delegation, and to provide a basis for adjusting or discontinuing the delegation to the department, as the findings indicate.
    7. Source Selection
    8. It is important to know not only that a price to be paid is reasonable, but also that the selection of the vendor was done with reason.

      Departments must document transactions as to the method of source selection. As indicated above, Purchasing suggests the use of the reverse side of the "issuing department's" copy of the sub-purchase order form for this documentation.

    9. Utilization of Targeted Firms (Disadvantaged and Woman-owned Business Enterprises)
    10. The emphasis for the utilization of targeted firms cannot be overstated. It is essential that all departments with LVPA delegations utilize targeted vendors to the maximum extent possible. To that end, all individuals authorized to commit University funds for the purchase of goods or services, are required to document each transaction awarded to a non-targeted vendor. As suggested above, use of the reverse side of the "issuing department's" copy of the sub-purchase order is recommended for this documentation.