Sourcing is a collaborative approach for selecting suppliers of products and services designed to consolidate and leverage the university’s spend to reduce costs while delivering the highest quality. When initiating a search for a supplier of goods or services, units should first search for products and services from the available internal service providers and University-wide contracts negotiated by Procurement in M-Marketsite or through the Find Products & Services search tool.
Purchases Under $10,000
In accordance with SPG 507.01, authorized unit end users may commit funds on behalf of the university using a Purchase Order or purchasing card (PCard). Department end users are not authorized to sign contracts.
If a unit is unable to identify a contracted U-M supplier, Procurement Services recommends:
- Determining the needs of goods and/or services
- Identifying potential sources
- Collecting multiple quotes
- Selecting the best overall value supplier(s)
You may purchase directly from suppliers unless the item is on the restricted commodities and special approvals list.
Purchases $10,000 and Greater
The U-M Regents require that all transactions $10,000 and greater be competitively bid. Competitive bidding is the process that allows Procurement Services to properly survey the marketplace and evaluate a number of factors in addition to the purchase price. SPG 507.01 details responsibilities required of both the purchasing unit and Procurement Services. Exceptions to the $10,000 bid limit include orders placed under some University-wide contracts.
Competitive Bid Process
Procurement Services will work with the unit to help establish detailed specifications or scope of service and a list of potential sources. Buyers utilize a number of tools in the purchasing process depending upon the extent of the information required to identify suppliers and prepare a Request for Information (RFI) /Request for Quote (RFQ) /Request for Proposal (RFP)- collectively referred to as “RFx”.
It is important to note during the entire bidding process, Procurement manages all of the supplier coordination and communication. This way each Supplier receives consistent information at the same time and has the same expectations for the return of information. If any changes are made after the sourcing event has been issued, all bidders must be notified in writing. Final decision of award is a joint decision between the requesting party and Procurement Services based on overall best value. Once a supplier is selected, the contracting or ordering processes are initiated.
For transactions $10,000 and greater, units should submit a Start the Competitive Bid Process eForm to Procurement Services as soon as the need is known, so we can begin research for the sourcing event. The sooner procurement is involved, the smoother the process.
The following information will be needed to complete the eForm to start the process:
- A summary of your request
- Customer Type (Campus or Michigan Medicine)
- Commodity Category
- Transaction Frequency (One-time or Recurring)
- Estimated Total Dollar Value of the Contract
- If Sponsored Funds are Involved
It is preferred requests also contain as applicable:
- Information on Suppliers you have researched or contacted
- Supporting Documentation
- Facilitate the competitive bid process
- Negotiate with suppliers to achieve the best value
- Work with the stakeholders to provide updates
- Communicate project-specific expected timing based on the request