Price Justification for Requested Purchases

The University of California is required to obtain the lowest overall cost, while affording the maximum opportunity to all suppliers that can provide a specific product or service.

"The University shall meet its need for goods and services at the lowest overall cost while affording the maximum opportunity practicable to those who wish to become suppliers to the University." (PPM 350-10)

Agreement Purchases

Purchasing agreements that have been negotiated with UC buyers meet price comparison requirements.

The department complies with the price justification requirement by ordering items in AggieBuy or citing the agreement number on their Requisition in KFS. You do not need to include any price justification documentation when using a university agreement, thus using an agreement is the preferred procurement method whenever possible.

Open Supplier Departmental Purchases

Each open supplier purchase (generally those below $10,000) requires price justification by the department.

Departments should compare the prices of at least three suppliers (web suppliers, previous orders, or new suppliers) before placing an open supplier order on a Procurement Card or a Requisition in KFS. 

There may be restrictions on the price comparison process if purchasing with contract and grants.  Check with the funding source if in doubt.

The departmental Request for Quotation form (available on the Forms page) can be used to secure prices from three or more suppliers for a delegated purchase.  This form contains all the required information necessary to obtain accurate price quotes.

Supplier Price Quotes

A formal supplier price quote is a proposal with price/delivery/terms provided on company letterhead or company stationery. Quotes are not necessary when purchasing through AggieBuy or when purchasing against an established purchasing agreement in KFS.

Departments are to submit the Requisitions exactly as indicated on the supplier quote. The expectation is that the resulting invoice(s) issued against the associated Purchase Order will match the quote.  

What Constitutes a Formal Quote?

Formal quotes will include a quote number, payment terms, delivery terms, expiration date of quote, and terms and conditions.

What Isn't a Formal Quote?

The following do not constitute an official quote: email messages, hand written notes on blank paper, and verbal/telephone quotes.

When is a Quote Required?

The following scenarios require the use of one or more quotes:

  • Request for Independent Consultant work: 3 supplier quotes required
  • Request for Transactions at or above $10K and below $100K: 1 supplier quote required
  • Request for Transactions at or above $100K, up to $250K: 2 supplier quotes required

To expedite the processing of your KFS transactions in Procurement & Contracting Services, the requesting department should provide quote(s), whenever possible. Increased processing time is required if the buyer in Procurement & Contracting Services has to obtain the supplier quote(s).

These price quote requirements are consistent with the requirements for purchases subject to the UC Small Business First Program.

Buyer Negotiates and Makes Final Supplier Determination

For KFS Requisitions that route to Procurement & Contracting Services, the buyer assigned to the Requisition is responsible for conducting the necessary procurement functions.

The Procurement & Contracting Services buyers and analysts are trained professionals who follow university policies to qualify suppliers, establish reasonableness of price, make an award and write the contract/order per the policies and procedures established by the University.

It is the buyer's responsibility to determine whether competition is required and to conduct the procurement, regardless of any departmental-supplied information on KFS requisitions. Although departments suggest suppliers on the Requisition for consideration, the buyer in Procurement & Contracting Services makes the final supplier determination.