Final
Overview of the State Procurement Process
STATE PROCUREMENT PROCESS
Votes:
Action Taken:
<none>
<none>
9:16 AM - Staff Overview of the State Procurement Process
Marc Carey, Legislative Council Staff, discussed the memorandum that provides an overview of the state procurement process (Attachment B). He explained that the Colorado Procurement Code (Section 24-101-101, C.R.S.) gives the Department of Personnel and Administration (DPA) authority over the procurement process including rule-making authority. Colorado's procurement process is relatively decentralized compared to other states, and executive departments and institutions of higher education have delegated purchasing authority with varying levels of oversight by DPA. Elected officials are exempt from the procurement code.
Mr. Carey explained that the state uses the Bid Information and Distribution System (BIDS) as a clearing house for vendors, and agencies to share information. This computer system and website is cash funded through vendor registration fees.
Mr. Carey explained that there are three main categories of state procurement purchases: contract awards, price agreements and purchase orders. Contract awards use a bidding process for goods or services depending on the amount of the contract. For contracts greater than $150,000, a formal competitive bid process is required. Purchases between $10,000 (for commodities) or $25,000 (for services) and $150,000 require an informal competitive process known as a documented quote, and commodity purchases under $10,000 and services under $25,000 do not require competitive processes. Sole source contracts are purchases for which only one vendor can supply the service or good.
Price agreements occur when the state specifies a commodity or service that it wishes to purchase, and vendors submit bids on a per unit basis. Agencies then contract with vendors on an as needed basis. Cities and counties can also participate in the price agreements, thereby helping to increase the state's leveraging power.
Purchase orders are typically used by the state to acquire commodities and small purchases of services under $50,000. Purchase orders are a form of unilateral contract where the vendor may accept the terms either in writing or through performance. Once the good is shipped or the service is performed, the vendor is entitled to be paid.