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Informal Procurement Methods

 

Overview

When the estimated value of a procurement for goods or services is below the simplified acquisition threshold (or a lower local threshold) informal procurement methods can be used. Informal procurement expedites the process and minimize administrative burden and cost. There are two types of informal procurement, the micro-purchase and small purchase.

Micro-purchase

  • 2 CFR §200.320(a)(1)
  • Informal acquisition of products or services below $10,000 per transaction. SFAs may have a lower local threshold.
  • Purchases can be awarded without soliciting competitive price quotes as long as the price is “reasonable”. To determine if a price is “reasonable”:
    • compare previous purchases of similar item(s)
    • have personal knowledge of the item(s) being purchased
    • distribute purchases equitably among qualified suppliers to the maximum extent practicable
  • Keep written documentation and records for all transactions.
  • The distribution of transactions among qualified suppliers can happen either at the time of transaction, or over several transactions throughout the school year. For example, a school procuring produce may:
    • Choose one supplier to purchase produce from and then select a different supplier the next time produce needs to be purchased. Each transaction cannot exceed $10,000.
    • Various suppliers at the same time. Each transaction cannot exceed $10,000.
    • If an SFA purchases produce from Vendor A, you might purchase various types of produce, but the vendor will provide one receipt. The total transaction amount for Vendor A must be under $10,000. The next time you purchase produce, if prices are “reasonable” you would need to purchase produce from Vendor B. The total transaction amount (receipt) must be under $10,000.

  • Reasons an SFA may want to procure non-competitively:
    • saving on administrative time and cost
    • unplanned purchases/delivery shortages
    • nominal purchases
    • seasonal or local purchase

Small Purchase

  • 2 CFR §200.320(a)(2)
  • Commonly referred to as: "3 Bids and a Buy”.
  • Used when the estimated value of an awarded contract or purchase is below the simplified acquisition threshold of $250,000. SFAs may have a lower local threshold.
  • This informal method requires:
  • Verbal or written solicitation document.
  • Free and open competition (i.e. 2-3 price quotes).
  • Documentation of the procurement process (vendor name, contact method, name of person providing price quote, price quoted, date price quote obtained, duration of price quote).
  • This informal method does not require:
  • Public notice
  • Sealed bid (do not share price quotes during the solicitation process)
  • Public opening
  • Due date for solicitation responses