3201 PR.02 Competitive Bidding Process

Revision Date: 
July 1, 2017

* This procedure has been updated to accommodate Workday Financials business processes and terminology.  Please note the effective revision date.


This Procedure is a supplement to Policy 3201 General Purchasing and the associated Procedure 3201 PR.01 Purchasing Requisition Process.  The policy outlines the procurement practices for purchasing all goods and services at Yale University and the procedure outlines the process of obtaining goods and services at Yale University.  This guide is intended to give the buyer step-by-step instructions on how to do competitive bidding.

The Chief Procurement Officer has responsibility for the systems, processes, effectiveness, and efficiency of purchasing activities at the University.

If the purchase cost of the good or service being purchased is greater than the University’s competitive bidding threshold of $10,000 as stated in Policy 3201, the initiator must follow the process described below. The initiator must also prepare a requisition, as detailed in Procedure 3201 PR.01 Purchasing Requisition Process and attach the following to the requisition:

  • A copy of Request for Proposal (RFP) or Request for Quote (RFQ)
  • A copy of all relevant quotes received from suppliers
  • A statement identifying the supplier and the reason it was chosen
  • Sole Source Justification document (if competitive bidding deemed inappropriate)
  • Certificate of Insurance or a Waiver from the Enterprise Risk Management office

A.  Using Sole Source Justification

If the initiator and Purchasing Services are unable to identify at least three suppliers capable of providing the good or service, the purchase may be completed using a sole source justification.  Purchasing Services should be consulted whenever a sole source purchase is being considered to support negotiating price and/or terms and conditions.  

  • Sole Source

If the good or service is unique or proprietary, or if a supplier has an exclusive or territorial agency and will not meet the criteria for competition, the purchase may be completed by requesting a sole source waiver to the University’s competitive bidding process.

Example: The need for a sole source supplier usually arises when the good or service is unique (e.g., specialized and unique laboratory equipment, specialized software, patented materials or techniques). 

In this case, Form 3205 FR.03 Explanation for Sole Source must be completed and submitted along with a purchase requisition for the good or service and other supporting pricing documentation, such as a valid quote and or pricing schedule for the specific amount of time that the purchase period will be active.

  • Exceptions to Competitive Bidding

For exceptions see Policy 3201 General Purchasing, Special Situations and Exceptions.

B.  Requesting Competitive Bids and Quotes

For goods or services in excess of the University’s competitive bidding threshold, at least three written bids must be requested, reviewed, and included as part of the purchasing transaction record.

Note:  In very limited circumstances, a department’s PCard limit could allow purchases above the University’s competitive bidding threshold. In those instances, PCard holders are still responsible for obtaining, documenting, and retaining competitive bids or quotes in accordance with University policies and procedures.

C.  Prepare a Request for Proposal or Request for Quote 

The initiator, where appropriate, must develop a Request for Proposal (RFP), Request for Quotations (RFQ), or Request for Information (RFI), to solicit bids from potential suppliers.  The difference between RFPs and RFQs is explained below.  Purchasing Services is available to assist departments in selecting, completing and reviewing the most appropriate method.   

  • Select the RFP, RFQ or RFI Method
  • Request for Proposal (RFP) - RFPs should be used when the department’s business needs could be met in multiple ways, the ultimate product or quantity is uncertain, or the scope of work could change.  RFPs allow competing suppliers to describe their proposed methodologies or processes for meeting the University’s needs in addition to their pricing information.  In general, most purchases of services should use an RFP to request competitive bids.    
  • Request for Quotations (RFQ) - RFQs should be used if a purchase has clearly defined parameters and the scope of work is unlikely to change.  RFQs provide clear specifications for the desired good or service and do not generally request information on the suppliers’ processes or methodologies.  RFQs are most appropriate when the good or service is standardized and suppliers’ products or services are very similar.   
  • Request for Information (RFI) - RFI’s are used when a good or service has been identified but more information from suppliers is needed to assist the decision-making process and identify next steps.  RFI’s are seldom the final stage of a procurement process and are often used prior to and in combination with either an RFQ or RFP.  RFIs clearly indicate that an award of a contract will not automatically follow and is not an offer by Yale to enter an agreement with any supplier.

Note:  If the purchase involves consulting or other professional services, a copy of Form 3210 FR.01 Professional Services Agreement should be included with the RFP/RFQ.  Refer to Policy 3210, Professional Services and Consulting for more information.

For further information about creating a Request for Proposal (RFP), Request for Quotations (RFQ), or Request for Information (RFI), please refer to the following forms:

D.  Obtain Bids or Quotes from Suppliers

The Initiator must confirm that he or she understands the following guidelines for establishing a fair competition when requesting formal bids or quotes from suppliers in order to ensure that each supplier has an equal chance in the competition.  Purchasing Services is available to assist departments in the bid or quote solicitation process.

  • Send RFP/RFQ to Suppliers

The initiator must send the RFP/RFQ to at least three qualified suppliers.  Each RFP/RFQ must be identical and sent to each supplier at the same time to ensure a fair competition.  

Note:  Prior to the established due date, competing suppliers may submit questions on the RFP/RFQ to the University.  All supplier questions and the subsequent University answers must be provided to each of the competing suppliers in writing and at the same time.

  • Receive Bids or Quotes

Supplier proposals or quotations may be received by U.S. mail, fax, e-mail, overnight mail, or hand delivery.  Bids or quotes received by Purchasing Services will be forwarded to the appropriate Buyer for review and analysis.  As soon as a bid or quote is received, it should be stored in a secure area.  Bids or quotes must not be shared with any person unless he or she is participating in the decision-making process.  Bids or quotes submitted to the University are strictly confidential and under no circumstances should suppliers be given information about bids or quotes from competing sources.

Note:  Purchasing Services is one of the few offices authorized to sign Yale University contracts.  If a contract is provided with a quotation or proposal, it must be sent to Purchasing Services for review and signature along with supporting documentation and the purchase requisition.

  • Confirm Bids or Quotes Are Complete

The Initiator should review all received supplier proposals or quotations to ensure that they are complete.  The University may choose not to consider incomplete submissions in order to preserve the fairness of the competition.  The following information should be included in each bid or quote:  

  • Clear and accurate description, including specifications, for the product or service
  • Net cost of the product or service, the cost broken down by components or work phase
  • Other related costs (e.g., surcharges, maintenance, handling fees, expenses, shipping, and/or installation costs)
  • Delivery schedule (include date and time as appropriate)
  • Payment terms

Note:  Yale University’s standard payment terms are Net 30, meaning that the University will pay properly authorized invoices within 30 days of the supplier invoice date.

  • Environmental specifications of the product or service including, but not limited to, product life cycle analysis, raw materials and energy costs of product manufacturing and delivery, recycled content and recyclables of the product, any possible health concerns regarding its use and disposal (e.g., toxicity of materials or ingredients), and possible end-of-life product recovery by its company
  • Warranty and other data applicable to individual situations
  • Professional Services and Consulting Agreement terms and conditions, if applicable. Refer to Policy 3210 Professional Services and Consulting.

A thorough analysis of each bid or quote received is required prior to selecting the final supplier.  Therefore, the Initiator must read each bid or quote carefully and consider the guidelines stated in this section to ensure that the University’s resources are used effectively.  Purchasing Services is available to assist with the analysis as requested.

A.  Analyze the Bids or Quotes

In general, the Initiator should consider the following key questions when reviewing bids or quotes:  

  • Does the supplier provide the best mix of quality, service and price for the specified University need?

Note:  Federal regulations may require primary consideration of the lowest price from a qualified supplier whose bid was received by the bid closing date unless quality, service, or delivery time takes priority based on documented need.

  • Does the supplier have the financial stability, size, and service infrastructure to effectively meet the University’s needs?
  • Will the proposed delivery schedule meet the departments “need-by” date?
  • Are the product’s quality and supplier’s performance reputation acceptable in the context of University use?
  • Will the supplier satisfy all requirements of the sponsored award, if applicable?

Note:  Be aware of applicable Federal or other sponsored program regulations regarding purchases funded by grants or contracts, including those regarding debarred or suspended suppliers as noted in Policy 3201 General Purchasing.

Note:  Analysis of supplier terms and conditions or insurance levels may be complex. It is strongly recommended that the Initiator request assistance from Purchasing Services in reviewing this information.

  • Does the supplier qualify as a diversity supplier or otherwise support University initiatives?
  • Do the supplier’s business practices and products support the University’s environmental sustainability initiatives?

B.  Request New Bids or Quotes, if Necessary

If the initiator determines that none of the received bids or quotes can meet the department’s business needs, based on the results of the bid or quote analysis, a new RFP or RFQ may be issued.  It is strongly recommended that the department contact Purchasing Services for assistance prior to initiating a new bidding process.      

If a new RFP or RFQ is issued, the Initiator must ensure that all suppliers who have submitted bids or quotes for the original RFP or RFQ are notified and have an equal chance to submit another bid or quote.

C.   Select a Supplier

  • Negotiate with Suppliers

Based on the results of the bid or quote analysis, the Initiator must identify the supplier(s) that appear best able to meet the department’s business needs.  The Initiator may then initiate discussions with suppliers to ask any questions and clarify any details regarding the bid or quote.  During these discussions, it is appropriate to negotiate any required or desired price, performance, or terms and conditions improvements.

Note:  It is not permissible to discuss the specifics of competing bids with suppliers or any University employee outside of the negotiation team; such information is confidential.

Prior to negotiations, the initiator should: 

  • Contact Purchasing Services to request assistance in establishing an appropriate negotiation team
  • Consider and decide on negotiation points, positions, and possibilities for supplier concessions; and
  • Establish an appropriate timeframe to negotiate and make the purchase decision. 
  • Make the Supplier Selection

Once negotiations are complete, the department must determine which supplier will provide the best overall product or service based on the documented business needs and results of the bid or quote analysis. 

  • Document the Supplier Selection Process

Document the selection and evaluation of suppliers with respect to the life-cycle cost and other factors described in Section 4-A.

Note:  Special documentation considerations apply if the purchase involves consulting or other professional services.  Refer to Policy 3210 Professional Services and Consulting.