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Bid Threshold Memo

October 23, 2017

Bid Thresholds

TO: All Departments
FROM: Tim Thornton, Director of Purchasing
DATE: October 23, 2017

Section 41-16-20 of the Code of Alabama 1975 requires that “all contracts of whatever nature for labor, services, work, or for the purchase or lease of materials, equipment, supplies, other personal property or other nonprofessional services, involving fifteen thousand dollars ($15,000) or more, made by or on behalf of any state department, board, bureau commission, institute, corporation, authority, or office shall, except as otherwise provided in this article, be let by free and open competitive bidding, on sealed bids, to the lowest responsible bidder.” NOTE: This $15,000 threshold is the total value per fiscal year to be spent by Alabama A&M University (AAMU) with any one vendor for like commodities or services.

Although the aforementioned is the general rule, there are many exceptions. When purchasing the following commodities or services, Alabama A&M University is at liberty to engage the vendor directly with a purchase order or formal contract without issuing a formal bid via a Request for Quotation (RFQ) or Request for Proposal (RFP) when the fifteen thousand dollar ($15,000) threshold has been met or exceeded. The following are examples of procurements readily made by the University that are exempt from competitive bidding by a buying agency like AAMU and is not meant to represent an exhaustive listing of all exemptions. For the complete listing of exemptions, please refer to Title 41, Chapter 16 of the Code of Alabama 1975.

  • Individuals with a high degree of personal skill where the personality of the individual plays a decisive part. Examples include attorneys, architects, engineers, accountants, teachers, physicians, appraisers, consultants, and artists.
  • Purchases from a cooperative/joint purchasing agreement because the contract has already been competitively bid by a public agency and exists as an aggregate demand among buyers to obtain lower pricing from selected suppliers. Suppliers, thereby, benefit from the volume purchasing provided by all participant organizations’ aggregate demand.
    • For more information about cooperative/joint purchasing agreements, as well as the University’s procedures concerning them as set forth by the Purchasing Department, see the Joint-Purchasing Agreements memo.
  • Sole Source procurements because there is only one vendor capable of providing the unique commodity or service
  • Computer hardware and software only compatible with what is already owned
  • Contracts for goods and services between governmental entities of the state
  • Contractual services impacting security plans, procedures, assessments, measures, or systems affecting the safety of persons, structures, facilities, or infrastructures
  • Custom software built to AAMU’s specifications
  • Financial Advice or Services
  • Honorariums
  • Insurance
  • Manuscripts, books, maps, pamphlets, or periodicals
  • Sale or lease of real property
  • Utilities