CSULB Purchasing Operations Manual
Section 5: Requirements Specific to Contracts and Service Orders
In addition to the special requirements contained in this Section 5, requirements in Section 2 also apply to the procurement of information technology resources (ITR).
Public Contract Code (PCC) Section 12100.5 requires the Trustees of the CSU to develop and maintain policies that further the legislative policies for ITR procurement as expressed in Sections 12100 et seq. of the PCC. PCC Sections 10295 and 12120 provide that the CSU has an independent procurement authority separate from the State Departments of General Services and Finance. PCC Section 12102(b) and (c) require that contract awards for all large-scale systems integration projects be based on the proposal that provides the most value-efficient (best-value) solution to the awarding agency’s requirements. However, hardware purchased independent of a large-scale system integration project may be made on the basis of lowest cost meeting all other specifications. When an acquisition is based upon cost alone, an award shall be made to the lowest responsible bidder meeting the specifications.
PCC 12100 et seq.; Ed Code 89036; CSU Policy sec. 500.
5.01 Scope of Transactions:
The scope of ITR acquisition policy encompasses the following broad types of CSU and CSULB acquisitions:
- Equipment: Acquisition of ITR-related hardware and other capitalized tangible property items is accomplished by means of awarded purchase orders, master purchase agreements, lease/purchase agreements, or rental agreements. Acquisition of large-scale systems integration items (e.g., mainframe computers, network, voice, video, and telecommunications infrastructure installations) may employ the use of a standard agreement, rather than a purchase order, to accommodate specific and unique terms and conditions.
- Materials: ITR materials are normally non-capitalized items. They are expendable supplies and low-value assets that can be readily replaced. These items are usually obtained through the issuance of a purchase order or by direct charge, rather than by the issuance of a contract. The acquisition of ITR materials is subject to the standard CSU procurement policies.
- Services: Vendor or contractor services for ITR-related functions normally require the issuance of standard agreements or service orders. They include such things as installation of hardware or software products, modifications or upgrades, equipment maintenance, repairs, network and database subscriptions, and consultant services.
CSU Policy 504.
5.02 General Provisions:
All standard purchase and service contract policy requirements including the use of forms and exhibits that are not contained under ITR-specific policy are also applicable. These include, but are not limited to, policies governing sole source awards, vendor price schedules, DVBE compliance, drug free workplace certifications, notices of contract award, small business preferences, State contracts register, vendor data records, and applicable general provisions governing all transactions.
CSU Policy 502.
5.03 Procurement Principles for ITR Transactions:
CSULB shall employ sound and appropriate business practices to guide and control the planning, acquisition, development, operation, maintenance, and evaluation of all ITR-related applications.
Decisions regarding the application of ITR equipment, materials, and services shall be based primarily on analyses of overall costs and benefits over the operational life cycle of the application. In selecting or developing applications, CSULB shall consider the benefits and costs of maintaining compatibility with other planned and existing applications for both campus use and for the use of CSU as a whole.
By CSU policy, CSULB is given a choice of vendors to meet its individual or unique hardware, service, and application requirements. Long-term contracts with annual cancellation and funding-out clauses are desirable, as they help protect the campus investment in ITR equipment and materials. Multi-year renewal options are believed to encourage vendors to develop higher levels of service and support for their products. (Ref: PCC 12101.5(a).
CSULB strives to continue transforming its procurement activities from a labor and paper intensive process to an all-electronic system whereby data bases of product and service needs are made accessible to vendors and contractors via either direct or dial-up computer access (Ref: PCC 12113.5).
PCC 12100 et seq.; CSU Policy 503.
5.04 Competitive Bidding:
It is the policy of CSULB that all transactions made under the CSU procurement authority be designed to encourage active competition among those who wish to become the suppliers of goods and services to the campuses.
There is no single competitive procurement methodology universally suited to all kinds of ITR acquisitions. CSULB recognizes that the same competitive processes used for obtaining non-ITR goods and services such as the Invitation for Bid and the Request for Proposal may be effective for ITR acquisitions as well. There are, however, other approaches such as the Best Value or Multi-Step techniques that could be ideally suited for a particular ITR acquisition. It is the responsibility of the Purchasing Office to recommend the method best suited to a particular acquisition, with special attention being given to the “Best Value” approach.
PCC 12102, 12120, CSU Policy 505.
5.05 Best Value (Value-Effective) Acquisitions:
The “Best Value” technique for ITR acquisitions of goods and services shall be used to the maximum extent practical. Any acquisition that employs Best Value selection criteria shall result in an intent to award to the respondent achieving the highest score in a weighted evaluation process. There is no specific formula or regimen prescribed for examining the criteria in a Best Value award, but it is important that the award be consistent with the terms of the solicitation and that any price premium is justified by specific technical or value-added enhancements.
Solicitations for Best Value acquisitions may provide that the price quote be submitted under separate cover for evaluation purposes whenever this approach is preferred. Although the price quote and costs (including a “life-cycle cost”) must be included as criteria for making the contract award, other criteria shall also play a role. Such criteria may include, but are not limited to:
- Operational costs.
- Quality or technical competency of the bidder’s product or service.
- Delivery and implementation timetables including incentives for early delivery.
- Warranties, guarantees, and return policies.
- Costs associated with financing provisions or alternatives.
- Vendor’s financial stability.
- Consistency of proposed product or service with the planned application.
- Vendor’s industry or program experience.
- Vendor’s past performance record with similar installations.
- Risk assessment.
- Value-added services or options.
- Innovative use of current technologies—and quality results.
- Proven methodologies and tools used for servicing the product or program.
- The degree of facilitation for exchanging data and interfacing with other existing systems.
PCC 12102(b), 12100.7; CSU Policy 505.01.
5.06 Best Financing Alternatives:
For all solicitations formally advertised, evaluation of bidder proposals for the purpose of determining a contract award for ITR goods or services shall provide for consideration of a bidder’s best financing alternatives, including lease or purchase alternatives, if any bidder so requests. This information must be made available to the campus at least 30 days prior to the date of the deadline for final bid submittals.
PCC 12113; CSU Policy 507.04.
5.07 State Division of Telecommunications (COMDIV):
COMDIV is the Division of the State Department of General Services that is responsible for the development of tactical policy and procedures for telecommunication acquisitions consistent with statewide strategic policies. The CSU and CSULB shall grant to COMDIV an opportunity to bid whenever the CSU solicits bids for telecommunications goods and services.
PCC 12120; CSU Policy 507.02.
5.08 Pre-Negotiation of Repetitive Contract Terms & Conditions:
The campus Purchasing Office may avail itself of any existing CSU model agreements for ITR acquisitions. The terms & conditions expressed in a model agreement that is used repetitively with the issuance of ITR-related contract awards may be pre-negotiated with the campus, upon request from a given vendor or contractor who normally bids on such awards. Such pre-negotiations must be conducted with oversight from the CS&P Department of the Chancellor’s Office. A contract’s General Provisions are non-negotiable, however, since they are comprised principally of State legal requirements to which all bidders and all State agencies (including the CSU and CSULB) are bound.
PCC 12101.2; CSU Policy 506.
5.09 Multiple Awards:
Contract awards may be initiated with more than one vendor or contractor for comparable products or services. Multiple awards may be used in instances where awarding to a single provider would be impractical or fail to satisfy the overall requirements of all potential users.
PCC 12101.5(b); CSU Policy 505.02.
5.10 Sole Source Approvals on EDP (or ITR) Acquisitions:
In addition to the usual approvals required on formal sole source awards of purchase orders and contracts, there may be one additional approval required for a sole source acquisition of ITR equipment, materials, or service. ITR sole source requisitions of $250,000 or more that are not intended to be processed under a CSU systemwide agreement must also be approved either by (a) the campus Associate Vice President for Information Technology or (b) the campus Associate Vice President for Information Management & Analysis. Approval under (a) or (b) depends upon whether the project under which the requisition is to be processed is for academic (instructional) purposes (a), or administrative (institutional support) purposes (b).
PSS 98-03.
5.11 Y2K (Year 2000) Product Compliance Language:
The campus must ensure that its acquisitions specify year-2000-compliant products whenever the products contain date-sensitive components. On purchase orders or contracts that contain such products, the following requirement shall be stated:
“Hardware, software, and firmware products, individually and in combination, shall successfully transition into the year 2000 with the correct system date, without human intervention, including leap year calculations. Hardware, software, and firmware products, individually and in combination, shall also provide correct results when moving forward or backward in time through and beyond January 1, 2000.”
Two general rules apply to help ensure vendor or contractor compliance:
- The year-2000-compliance statement should appear on any order or contract that calls for a product that may be time sensitive;
- The end user should be asked the question about sensitivity, if there is doubt.
PSS 97-12; 98-08.
5.12 Used Equipment:
CSULB may avail itself of any opportunity to purchase used or remanufactured ITR equipment where a substantial savings in cost (compared with other alternatives for acquisition of similar equipment) justify the purchase.
CSU Policy 507.01
5.13 Disposal of Equipment:
ITR equipment and materials that have been determined to be surplus to the needs of CSULB shall be disposed of in a manner that will best serve the interests of the campus or of the CSU as a whole. Methods used for the disposal of surplus goods may include auction or competitive bidding, open advertising at a fair market price, and transfer or sale of the goods to other governmental entities, including other CSU campuses.
PCC 12102(I); CSU Policy 507.03.
