No purchase shall be ARTIFICIALLY DIVIDED so as to constitute a small purchase under $500 or to reduce a solicitation to a
lesser or no bid requirement. In the absence of a good faith business basis, no purchase
or procurement shall be artificially divided within a budget unit, or its equivalent.
(Executive Order KBB 07-10)
Executive Order KBB 07-10 authorizes the governor to establish procedures for the procurement of small purchases
with the caveat that “procurement requirements shall not be artificially divided so
as to constitute a small purchase under this Section.” In other words, a budget unit
cannot submit two or more requisitions to the same vendor or similar vendors in order
to avoid competitive bid requirements or to avoid the formal solicitation of competitive
sealed bids.
Executive Order KBB 07-10 establishes the following small purchase requirements:
Purchases up to $1,000 – no quotes required
Purchases over $1,000 to $5,000 – informal quote to at least 3 sources
Purchases over $5,000 to $25,000 – written or fax bid to at least 5 sources
Artificial division of purchases can be outlined as follows:
Budget unit submitting two or more requisitions of $1,000 each or less for the identical
commodity on the same day or within the same week.
Example: (1) desk @ $450 & (1) desk @ $600 received 2/21/2007
Budget unit submitting two or more requisitions of $1,000 each or less to the same
vendor on the same day or within the same week.
Example: (1) desk @ $800 to Acme Office Company received 4/13/2007
(1) chair @ $250 to Acme Office Company received 4/15/2007
Budget unit submitting two or more requisitions of $1,000 each or less to similar
vendors* for identical or similar commodities** on the same day or within the same
week.
Example: (2) balances = $522 to Acme Scientific received 5/16/2007
(8) beakers = $312 to Wholesale Lab Supply received 5/16/2007
(9) thermometers = $288 to Best Buy Labs received 5/16/2007
* Similar vendors are suppliers selling products within the same industry category,
i.e., athletic, automotive, data processing, electrical, medical, office, scientific,
etc.
** Similar commodities are items which possess general characteristics within the
same industry category, i.e., athletic, automotive, data processing, electrical, medical,
office, scientific, etc.
Budget unit head submitting separate requisitions for the same requester totaling
$1,000 each or less which meet criteria 1, 2 or 3 above.
Recurring pattern of requisitioning over the course of a fiscal year exceeding $5,000
for the same commodity from the same or similar vendors*.
The Purchasing Department will combine requisitions it interprets in possible violation
of the Executive Order and it will solicit the necessary bids unless the requisition
is accompanied by a suitable explanation (Artificial Division Exception Form) for dividing a purchase. In a few cases there are daily or weekly reoccurrences of
small non-competitive purchases necessary to perform unanticipated remedial maintenance.
However, such exceptions are to be handled with a prior Purchasing approved purchase
requisition.
