Update of RCUH Procurement & Disbursing Policies

RCUH is in the process of updating its Procurement and Disbursing policies.  The intent is to publish the updated RCUH Procurement policies on February 1, 2015, with an effective date of March 1, 2015.  In an effort to inform Principal Investigators and their projects on the upcoming changes, below is a summary of some of the more substantial policy updates that will be implemented. 

If there are any questions regarding the changes, please contact Doug Tonokawa at 956-9244, or [email protected].

  1. Threshold Increased for Purchases Without Competition:  In order to streamline RCUH’s procurement process, RCUH intends to raise the threshold for purchases that can be made without competition, from $2,500 to $3,000.

  2. Purchases Requiring Only Verbal Quotations:  In order to streamline RCUH’s procurement process, RCUH intends to raise the threshold for purchases requiring only verbal quotations from less than $15,000, to less than $25,000.

  3. Tax Clearance:  Under Hawaii Revised Statutes, Section 103-53, a proof of tax compliance with the Hawaii Department of Taxation and the U.S. Internal Revenue Service is a prerequisite to entering into any contract for purchases of $25,000 or more.  RCUH is already requiring this for all formal contracts (i.e., Agreement for Services, Construction Contracts) $25,000 or greater.  Since a purchase order is a type of contract, beginning March 1, 2015, RCUH will require a tax clearance for all Purchase Orders for the purchase of goods and services of $25,000 or more, upon both the Purchase Order issuance, and upon final payment on a Purchase Order.  Please begin to plan for this for future purchases.  This is consistent with current requirements for UH and other state agencies.

The Federal Office of Management and Budget published its Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.  This guidance, termed the “Super Circular,” will add several requirements to various purchases using Federal funds.  Although the Super Circular established an effective date of December 26, 2014, it allows a grace period that defers the effective date for one full fiscal year.  RCUH will be electing to take advantage of the grace period, resulting in an effective date of July 1, 2016. 


The following will be required at that time: 


Invitation for Bids (IFB) and Request for Quotations (RFQ) above $150,000


Under current RCUH policies, Projects can obtain written quotes without publicly advertising the solicitation.  Under the Super Circular, that will no longer be permissible.  The following will be required:


a.   Public Advertising:  Under the Super Circular (2 CFR § 200.320), all IFBs and RFQs above $150,000 must be publicly advertised.  The Super Circular does not define public advertising.


RCUH will require that all IFBs/RFQs above $150,000 be posted on the State Procurement Office’s website.  This is consistent with the existing practices of other state agencies, including UH.  SuperQUOTE may still be utilized for solicitations, provided that the IFB/RFQ is posted on the State Procurement Office’s solicitation website and reference is made to the SuperQUOTE listing. 


b.  Sealed Bids/Quotes:  Under the Super Circular (2 CFR § 200.320), all submitted bids and quotes above $150,000 must be kept sealed and confidential and must be opened publicly at the location/date/time indicated in the IFB or RFQ.  Bids/quotes cannot be opened, even by project personnel, before the date/time specified in the solicitation.  SuperQUOTE may still be utilized, provided that the bids/quotes obtained through SuperQUOTE are kept sealed and are not opened until the public opening date/time (we understand that UH and CommercePoint are working on this capability).

c.   Independent Cost/Price Estimate:  Under the Super Circular (2 CFR § 200.323), Projects must make an independent cost/price estimate before going out for bid/quote for all purchases $150,000 or greater.  Documentation of this estimate must be kept in the procurement file.  The estimate may take various forms, including (a) simple market research on similar goods or services, (b) comparison to previous or similar purchases, (c) internally estimating the general range for the purchase price. 


This may appear burdensome; however, RCUH believes that the Super Circular simply requires that some minimal background work be done by the Project on the pricing expected before going out to obtain bids/quotes.