Funding of Purchase Request

The estimated cost shown on the PR is the amount committed by the requiring activity to cover the purchase of supplies or services. Responsibility for controlling the obligation of funds and the limitations of such funds is vested exclusively in the allotment holder or designated representative. However, this does not relieve the contracting officer from complying with purchasing regulations contained in the SUPARS. The

NAVCOMPT Form 2276 contains a certification by the approving signature block stating, "I certify that the funds cited are properly chargeable for the item required." When any other purchase request or requisition form is used, the person signing or approving the request is also making the certification, even though the statement may not be printed on the form.

Controls

Controls should be established at every activity that has contracting authority as maybe required to prevent violations of standard procurement regulations. These controls include, but are not limited to, the following:

1. Individual open market purchase actions cannot exceed an activity's contracting authority without prior approval from the cognizant regional contracting management office.

2. Requirements may not be broken down into separate purchases to get around the dollar amount thresholds.

3. The functions of initiation of the requirement, award of the purchase action, and receipt of material may not be performed by the same person. When local circumstances make the use of this three-way separation impractical, at a minimum, the functions of award of the purchase action and receipt of material should not be performed by the same person.

SMALL BUSINESS-SMALL PURCHASE SET-ASIDES

All open market purchases with an anticipated dollar value of $10,000 or less are considered to be small business-small purchase set-asides and must be made with small business concerns.

Small purchase set-aside procedures apply only to purchases in the United States, its territories and possessions, Puerto Rico, and the trust territory of the Pacific Islands. The requirement for small business-small purchase set-asides does not affect the responsibility of agencies to make purchases from required sources of supply, such as federal prison industries, industries for the blind and other severely handicapped, and mandatory federal supply schedule contracts.

Exceptions

The small business-small purchase set-aside can be dissolved and the purchase made from a large business concern when the contracting officer determines there is no reasonable chance of obtaining quotations from two or more responsible small business concerns (or at least one if the purchase is less than $1,000) that will be competitive in terms of market price, quality, and delivery.

When the buyer or storekeeper proceeds with the small business-small purchase set-aside and receives a quotation from only one responsible small business concern that is not a reasonable price or cannot meet the required delivery date, purchase description or specification, the purchase may be completed by soliciting one or more large business concerns.

Definition of Small Business

A small business concern means a concern, including its affiliates, that is independently owned and operated, not dominant in the field in which it is bidding on government contracts, and is qualified as a small business under certain criteria and size standards as outlined in NAV-SUP P-560.

For purchases up to $10,000, a dealer is considered to be a small business if it has 500 employees or less and is furnishing any domestically produced or manufactured product.

Competition and Price Reasonableness

It is the responsibility of the storekeeper or buyer to make sure every purchase is made at a fair and reasonable price, and the government gets what it pays for in terms of quality and delivery.

PURCHASES LESS THAN $1,000.- These purchases must be distributed equitably over a period of time among qualified suppliers. When possible, a quotation is solicited from other than the previous supplier before placing a repeat order. Purchases less than $1,000 may be made without soliciting competition and/or documenting any price reasonableness determination if the contracting officer finds no reason to question the fairness and reasonableness of the price.

When the buyer can determine one quote fair and reasonable, the additional expense in time and administrative costs is not worthwhile in seeking additional quotes.

PURCHASES MORE THAN $1,000.- For purchases in excess of $1,000, the storekeeper or buyer must solicit a reasonable number of quotations (generally at least three) from qualified suppliers to promote competition to the maximum extent possible and to make sure the purchase is advantageous to the government, as far as price and other factors are concerned. Reasonable competition for small purchases can normally be obtained from the local trade area.

When possible, two sources not included in previous solicitation should be requested to furnish quotations. If only one response is received, no additional quotations are needed if the price can be determined fair and reasonable.