Guide to Equipment Purchasing
Introduction
Items of equipment purchased by the University are funded either by equipment fund monies or funds granted by external bodies. The procedures to be followed when seeking competitive bids for the desired equipment are the same regardless of the source of funds. Before raising a purchase order for the equipment, the following matters must be taken into consideration:-- the type of equipment
- is it already covered by a centrally-negotiated arrangement?
- does anyone else in the University require similar equipment?
- the approximate value of the equipment
- depending on the expected value, should the Purchasing Office be involved in the procurement exercise?
- the purchasing procedures to be followed
- the specification for the equipment
- the procedure for obtaining and receiving quotations/tenders
- award of the business
- the proposed location of the equipment
- is any structural work etc. required to facilitate the installation and operation of the equipment?
Type of Equipment
The equipment purchased by the University varies from low value/high volume items to very expensive 'one-off' purchases. The procedure to be followed when seeking competitive bids is essentially the same irrespective of the equipment's value. The main difference relates to the level of documentation and time involved and these are designed to reflect the overall costs or long-term implications of the purchase. For example, some pieces of equipment have a relatively low purchase cost but high running costs. Therefore, the complete cost of the purchase should be considered, not just the initial purchase price.
Another consideration is whether any other area within the University may be wishing to purchase a similar item. In the past, considerable savings have been achieved by co-ordinating the purchases of similar items of equipment.
Expected Price of Equipment / Appropriate Procedures
The total value of the purchase should be estimated. This will indicate the quotation/tendering requirements. The unit should seek the required competitive quotations, however, all purchases over the tender threshold must be tendered by the Purchasing Office.
It is important that the end user speaks to the Purchasing Office as early as possible before any proposed purchase. The Purchasing Office will advise on the appropriate procedure to be followed. In the case of purchases which fall within EU procurement regulations, this early involvement can save considerable time as the technical assessment of potential suppliers can continue while the tender documentation is issued and awaiting return. The EU procedures require a minimum of 7½ weeks (this does not include the time needed to prepare the specifications or assess the bids once they have been received). The Purchasing Office would allow at least 3 months for the issue and receipt of tenders when following EU procedures.
Equipment Specification
Writing a specification for the proposed purchase is one of the most difficult aspects of the quotation/tendering process. The specification can be either performance-based or output-based and should use clear language. It is important that the potential supplier knows exactly what is required. The use of brand names is not permitted. The Purchasing Office will advise on the preparation of the specifications.
In general, the specification will be written in two parts. Firstly, the essential criteria - what the equipment must do, and secondly, the desirable criteria - any extras factors which could enhance its operation and suitability. Other factors such as back-up service, maintenance costs, etc should also be considered.
Note: Suppliers have rights under European legislation and can sue the University if they believe that they have not been afforded a 'fair chance' to compete for business. The specification would be one of the key documents in any complaint and must therefore be prepared in an appropriate manner. It should be as general as possible and should not be what is termed 'a lock-out specification', ie, one which excludes certain suppliers from tendering.
Issue and Receipt of Bids
The keystone of the quotation/tender procedures is that potential suppliers are given an equal opportunity to bid for the University's business ie the procedures should be transparent and non-discriminatory. It is necessary, therefore, that all suppliers receive the enquiry at the same time, have the same opportunity to discuss the requirement and submit the sealed, secret bids on or before a stated date and time.
Award of Quotation/Tender
The final decision relating to the award of the quotation/tender rests with the end user. The decision is made on the basis of the 'most economically advantageous' bid, not necessarily the lowest bid. The most economically advantageous bid will include factors such as running costs, back-up service, technical support, delivery etc. as well as price. However, it must be noted that where the lowest bid is not accepted, the decision made must be supported with a written justification which the end user should be able to stand over. In the case of tenders, all submissions will have been scored against pre-defined criteria and it is the outcome of this assessment which will be used as the basis for the ultimate award.
Adherence to Standstill Rule (EU Tenders)
In respect of equipment tendered via the European Union, the 'standstill rule' applies. This requires that all unsuccessful tenderers are informed of the characteristics and relative advantages of the successful tender submission and also requires a period of at least 10 days to elapse between notification of the award decision and finalising the award (concluding the contract) with the successful tenderer.
Location of the Equipment
Although not falling within the Purchasing Office's remit, experience has shown that, in some cases, structural work may be required prior to the delivery of large pieces of equipment. It is advised that the purchaser contacts the Estates Department, as early in the exercise as possible, to discuss any implications of the proposed purchase.
