New Bidding Thresholds Increase Flexibility for Shoppers

Starting August 5, Penn State implemented a significant change to the procure-to-pay process, introducing new bidding thresholds designed to increase the flexibility for requesters. Under these new thresholds, competition is no longer required if pricing is fair and reasonable for purchases under $25,000. For purchases from $25,000  to $99,999, requesters now follow informal bidding steps, coordinating a minimum of three supplier bids. Central Procurement solicits bids for purchases equal to or exceeding $100,000.  
 
Chief Procurement Officer Duane Elmore emphasizes, "By increasing the threshold amounts, we align with best practices in higher education procurement while further promoting efficiency and compliance. This change empowers requesters to take a more active role with informal bids." 
 
To assist requesters with purchases from $25,000 to $99,999, the informal bid process guides a requester through several key considerations: 

• BS09: Initiating Purchases from Vendors Outside the University Policy This updated policy outlines principles for leveraging available contracts and purchasing methods, identifies entities responsible for commitments, and specifies the new bidding thresholds. 
• Sole Source Justification Form: A smart form used to validate purchases equal to or exceeding $25,000 that require a specific manufacturer or brand. 
• Sponsored Funding Sources: Purchases using sponsored funds must follow the competitive bidding thresholds required by the sponsoring agency. For federal-sponsored programs, purchases must be made in accordance with Federal Acquisition Regulations and Uniform Guidance (2CFR 200): The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 

Elmore highlights, "While thresholds offer shoppers more flexibility, buyers consider factors beyond the sticker price. They evaluate the total value a purchase brings to the University, ensuring every dollar is spent wisely and complies with policies." 
 
For purchases of $100,000 or more, an optional new electronic RFP/RFQ Request Form allows requesters to compile supplier information before connecting with a Central Procurement buyer for a formal bid. 
 
Requesters are encouraged to familiarize themselves with the new bidding thresholds and watch the Competitive Bidding Guidance Webinar recording.