X-tCu. Br THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS REGULATIONS GOVERNING PROCUREMENT AND BIDDING AT THE UNIVERSITY OF ILLINOIS EFFECTIVE JUNE 1, 1958 The person charging this material is re- sponsible for its return on or before the Latest Date stamped below. Theft, mutilation, and underlining of books are reasons for disciplinary action and may result in dismissal from the University. University of Illinois Library L161— O-1096 THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS REGULATIONS GOVERNING PROCUREMENT AND BIDDING AT THE UNIVERSITY OF ILLINOIS EFFECTIVE JUNE 1, 195 8 FOREWORD The University of Illinois is required to ad- vertise and take sealed bids when making pur- chases of goods or services costing $1500 or more (with certain exceptions) and in connection with construction contracts involving an expendi- ture of $1500 or more. In addition, it is the prac- tice of the University to buy on a competitive basis, when practicable, regardless of the amount to be expended. The purpose of these rules and regulations is to set forth policies and procedures to be followed and to inform those desirous of selling to the University how to proceed in order to receive invitations to bid and how bids will be handled. c CONTENTS HOW TO SELL TO THE UNIVERSITY OF ILLINOIS KINDS OF COMMODITIES AND EQUIPMENT 5 HOW BIDS ARE SOLICITED BY THE UNIVERSITY 6 HOW TO SUBMIT BIDS 7 PROCUREMENT AND BIDDING REGULATIONS ELIGIBILITY TO BID 7 Sec. 1. Bidders List 7 Sec. 2. Removal or Suspension from List 8 SOLICITATION OF BIDS 9 Sec. 3. How Bids Are Solicited 9 SUBMISSION OF BIDS 11 Sec. 4. Bid Form 11 Sec. 5. Types of Bids 11 Sec. 6. Contents of Bids 11 Sec. 7. How to Submit Bids 13 Sec. 8. Certified Check or Bid Bond 14 Sec. 9. Submission of Samples with Bid 15 HANDLING OF BIDS 15 Sec. 10. Handling of Sealed Bids 15 Sec. 11. Handling of Open Bids 16 AWARDING OF CONTRACTS 16 Sec. 12. Standards for Awarding Contracts 16 Sec. 13. Rejection of Bids 18 Sec. 14. Binding Contract with the University 21 Sec. 15. Small Supplementary Purchases 22 PERFORMANCE BY SUCCESSFUL BIDDER 22 Sec. 16. Performance Bond 22 Sec. 17. Deliveries under the Contract 23 Sec. 18. Inspection 24 Sec. 19. Assignments by Successful Bidder 24 Sec. 20. Cancellation of Contract and Compensation for Damages 25 Sec. 21. Submission of Delivery Invoice- Vouchers for Purchases 26 Sec. 22. Submission of Contractors' Statements for Construction Work 27 OTHER PROCEDURES 28 Sec. 23. When This Procedure May Be Waived by Purchasing Official 28 Sec. 24. Rights to Appeal 29 TECHNICAL PROVISIONS 29 Sec. 25. Definitions 29 Sec. 26. Effective Date 30 Sec. 27. Authority for These Regulations 31 HOW TO SELL TO THE UNIVERSITY OF ILLINOIS The Board of Trustees has centralized the authority to purchase in the Business Office under the Vice-President and Comptroller (ex- cept where authority has been assigned to some other official or committee; e.g., books and peri- odicals are purchased by the Library) who has delegated the authority to the Director of Pur- chases for the Urbana departments and to the Purchasing Agent for the Chicago departments, the latter including Navy Pier branch and Divi- sion of Services for Crippled Children, who are referred to hereafter as the "Purchasing Officials." The various departments of the University submit requisitions to the Purchasing Officials. When properly approved, they constitute author- ity for making purchases according to the pro- cedures described in these regulations. With certain exceptions, all purchases in excess of $1500 are advertised in the official State news- paper and are awarded on the basis of sealed bids. Purchase transactions in excess of $2500 are submitted to the Board of Trustees for prior approval, except in emergencies, when they may be acted on by the President of the University. Purchases are not binding upon the University until such approval has been given. KINDS OF COMMODITIES AND EQUIPMENT The kinds of commodities and equipment bought for the University of Illinois by the Pur- chasing Officials include, among others, the fol- lowing: Automobiles and Trucks Building Maintenance Supplies Chemicals Coal Dental Supplies and Equipment Drugs Electrical Equipment, Appliances and Supplies Electronic Equipment and Supplies Envelopes Foodstuffs Furniture Gases, propane and laboratory type Grain, Hay, and Straw- Hardware Hospital Equipment and Supplies Laboratory Animals Laboratory Apparatus and Supplies Lumber and Building Materials Machine Tools and Shop Equipment and Supplies Metals, ferrous and nonferrous Office Machines, Equipment and Supplies Paints and Painters' Equipment and Supplies Paper Petroleum Products Pharmaceuticals Photographic and Projection Equipment and Supplies Plumbing and Heating Equipment and Supplies Printing, letterpress and offset Refrigeration and Air Conditioning Equipment Scientific Equipment and Supplies Seeds and Fertilizer Sound Recording Equipment and Tape Textiles Welding Equipment and Supplies X-ray Equipment and Supplies HOW BIDS ARE SOLICITED BY THE UNIVERSITY It is the policy of the University to obtain con- tracts for commodities, equipment, and construc- tion work at the lowest possible prices, provided the contracts are with responsible persons who can be depended on to give reliable performance under the contracts awarded to them. The Pur- chasing Officials maintain lists of bidders to whom they send invitations to bid for contracts to sell the University the various classifications of commodities and equipment they buy. The Physical Plant Department also maintains a list of contractors for construction and permanent improvements. Preliminary investigation is made of the responsibility of vendors and contractors placed upon such lists, but such preliminary in- vestigation is not binding upon the University if later facts or events tend to show that such vendor or contractor is not in fact a responsible person. Suppliers may be placed on a bidders list by submitting a request to the Director of Pur- chases, Urbana, Illinois, or the Purchasing Agent, Chicago, Illinois, advising him of the kinds of commodities and equipment for sale. In some instances vendors will be requested to (ill out an information blank for reference. Contractors should submit a request to the Director of the Physical Plant, Urbana, Illinois, subject also to the requirement of completing an information blank. In addition to sending out invitations to bid, the Purchasing Officials will run advertisements in the official newspaper, selected by the Director of Finance, regarding items of $1500 or more they are going to buy. HOW TO SUBMIT BIDS Listed bidders will receive invitations to bid on various items in the classification to which the list applies. The invitation will give the items to be purchased, the quantity of each item, delivery time, and the specifications which must be met by all the bidders. It will also contain a bid form (except in case of emergencies, when telegram or telephone bids will be requested) to be filled out as shown on the form and as explained in the Purchasing Regulation, and to be returned to the respective Purchasing Official by the time specified in the invitation to bid. Complete records of all bids and awards are kept in the offices of the respective Purchasing Officials. These records are available during reg- ular office hours for inspection by any interested person or his representative. PROCUREMENT AND BIDDING REGULATIONS ELIGIBILITY TO BID SECTION 1. BIDDERS LIST a. How to apply to be placed on bidders list. Bidders lists are maintained for various com- modity and equipment classifications established by the Purchasing Officials. A list of contractors for construction and permanent improvements is maintained by the Physical Plant Department. To have his name included on a bidders list, a vendor or contractor should submit a request in writing or in person to the Purchasing Official or the Physical Plant Department, indicating the types of commodities or equipment he proposes to furnish, or the type of services or construction work he can perform. b. Application to be filled out. After he re- ceives the vendor's or contractor's request, the Purchasing Official or Physical Plant Depart- ment may provide him with an application blank asking for the form of organization, bank refer- ences, sources of supply, or other information required to determine the responsibility of the applicant. c. Addition of name to list. If the applica- tion and financial statement (if requested) show sufficient evidence of the vendor's or contractor's financial and business responsibility, and no rea- son is known to the Purchasing Official or Physi- cal Plant Department why the vendor or contractor would not be a responsible bidder, his name is placed on the bidders list for the com- modity and equipment classifications or types of construction work indicated. Invitations to bid are sent to those persons appearing on bidders' lists, but this does not constitute a final or con- clusive determination as to the responsibility of such bidder. SECTION 2. REMOVAL OR SUSPENSION FROM LIST a. Notice of removal or suspension. The Purchasing Official or Physical Plant Depart- ment may remove any bidder from a bidders list or suspend him for a specified period of time. Any bidder may be suspended for not more than one year for violation of these rules and regula- tions, or failure to conform to specifications or terms of delivery. The bidder will be given due notice of such removal or suspension action. b. Cause for removal or suspension. The following, without excluding others of like or different nature, shall be sufficient grounds for such removal or suspension: (1) Delivery of commodities or equipment which do not not comply with the speci- fications. (2) Failure to make delivery within the time specified. (3) Failure to keep offer firm for length of time specified by the bidder in his bid. (4) Failure to provide performance bond when required by invitation to bid. (5) Collusion with other bidders or prospective bidders to restrain competitive bidding. (6) Giving information in an application for inclusion on a bidders' list that is later found to be false or materially misleading. (7) Bankruptcy or other evidence of insol- vency of the bidder. (8) Any other facts causing substantial doubt as to whether the bidder will continue to be a responsible bidder who can be relied upon to fulfill his obligations under this regulation and under any contract awarded to him. (9) Any violation of the Illinois Business Cor- poration Act or any other law of the State of Illinois which would make it inadvis- able for the University to deal with such bidder. (10) Any other violation of this regulation. c. Failure to respond. In addition to re- moval for the above causes, a bidder may be removed from a bidders list for two consecutive failures to respond (either with a bid or an indi- cation of "no bid") to invitations to bid. d. Reinstatement on bidders list. At any time after he receives a notice of removal or sus- pension the bidder may submit in writing or in person an explanation of the circumstances which were the cause of the removal or suspension order, or may show that such circumstances have been corrected. (Failure of a manufacturer or supplier to furnish the commodity or equipment bid upon or any part thereof to the bidder does not relieve the bidder of responsibility.) On the basis of such explanation or showing the Uni- versity may modify or rescind the removal or suspension. SOLICITATION OF BIDS SECTION 3. HOW BIDS ARE SOLICITED BY THE UNIVERSITY a. Newspaper advertisement. The Purchas- ing Official or Physical Plant Department, as required by law, will advertise in the newspaper selected by the Director of Finance, and others as such Purchasing Official or Physical Plant Department may deem necessary, bids for com- modities, equipment, or construction to be bought, unless the purchase is exempt from advertise- ment under the law. The advertisements will ex- plain where bid forms and full information can be obtained, and state the time and place of opening. b. Invitations to bid. When the Purchasing Official or Physical Plant Department are ready to buy a particular commodity or piece of equip- ment or desire bids on construction work they send out "invitations to bid" to persons on their bidders lists. Invitations also are sent to any other persons who respond to a newspaper ad- vertisement. Such invitations will state, among other things: (1) The item to be bought, or work to be bid on. (2) The quantity of the item to be bought or description of work to be done. (3) The specifications (and item number, if any) of the item. (4) Any installation, maintenance, or repair services to be provided with the item. (5) The delivery requirements. (6) Any other terms and conditions which the University may require bidders to comply with. Invitations to bid will be sent out by mail, except in cases of emergency. In such cases they may be sent out by telegram or be requested by telephone. For construction work, notice of the availability of specifications will be sent to all contractors on the bidders list. Detailed specifications will be sent to those requesting them. c. Bids sometimes individually requested. If in the judgment of the Purchasing Official the number of persons on the bidders list is not large enough to provide adequate competitive bidding, bids may also be requested from any other responsible persons who, it is thought, might submit advantageous bids. If a purchase is exempt by law from advertising, he may re- quest bids from any responsible persons. 10 SUBMISSION OF BIDS SECTION 4. BID FORM a. University bid form. In order to provide a uniform type of bid, so that there can be ac- curate comparison of the various bids by the University, the bidders, and interested members of the public, all bids must be on the form fur- nished by the University. Any exceptions must have the written approval of the proper Pur- chasing Official or Physical Plant Department. The University may waive irregularities, if, in their opinion, such irregularities are minor. b. Use of typewriter, ink, or indelible pencil. Every bid should be typewritten or written in ink or indelible pencil. Every bid must be signed by the person submitting the bid or his duly authorized agent. Proper evidence of the agent's authority will be submitted with the bid. The signature should be in either ink or indelible pencil and the name and title of each person signing the bid shall be typed or printed below his signature. c. Bids by telephone or telegram. In cases of emergency, bids may be submitted by tele- phone (with written confirmation following) or by telegram. SECTION 5. TYPES OF BIDS a. Sealed and open bids. The invitation to bid will ask for either "Sealed bids" or "Open bids." The two types of bids are so designated because of the difference in method of handling, which is explained below. b. Sealed bids. If the University estimates that a proposed order or contract will total $1500 or more, sealed bids will be requested except in those instances exempted by the State Purchas- ing Act. c. Open bids. For estimated orders or con- tracts of less than $1500, and in all cases of emergency, open bids will be requested. SECTION 6. CONTENTS OF BIDS a. Specifications. The invitation to bid will will include a description of the materials, equip- ment, or service to be purchased or to be bid on. Such description may be detailed specifications, UNIVERSITY OF ILLINQ& , , LIBRAAY standard specifications, brand names, catalog numbers, etc. b. Other terms and conditions. The invita- tion to bid and bid form may also set forth any other terms and conditions which bids must meet. c. Items must be new and current. Unless otherwise specified in the invitation to bid, the items and materials offered must all be new and the latest model, crop, or manufacture. d. Unit and total prices. In connection with purchases, the price for the units specified in the invitation to bid should be clearly shown for each separate item in the place provided on the bid form. Only one unit price should be quoted for each item. The total price for the quantity re- quested must also be shown. e. Acceptance of split award. In some cases the Purchasing Officials may split the award of a contract when two or more bids quote the same price for the item being bought. If a split award is not acceptable it must be so stated in the bid. f. Any or all items. Unless otherwise stated, a bid shall be considered as being for any or all of the items covered by the invitation to bid. The award may be made to the lowest aggregate bid- der for all items or on an item by item basis. The bid should so state if it is to be treated as an aggregate bid (that is, all items awarded or none). g. Time price will be firm. The price of each bid must be kept firm for the period of time indi- cated on the form by the vendor. This period must be at least 30 days after the latest time specified for submission of bids (unless other- wise provided in the invitation to bid). If no period is indicated, the price will be considered firm indefinitely. h. Maintenance and repair services. If the invitation to bid specifies that maintenance or repair services must be provided by the successful bidder, each bidder should explain in the bid how the services will be provided (that is, whether by the bidder or through an arrangement with another person or firm). i. Retailers' Occupation Tax. Bidders must not include Retailers' Occupation Tax or Use Tax in their quotations or bids. Receipts from 12 sales to agencies of the State of Illinois are ex- cluded from Retailers' Occupation Tax Act and the Use Tax Act. j. Federal Excise Tax. Bidders must not in- clude in their prices any allowance for payment of Federal Excise Tax, as the University is ex- empt from such taxes. If a contract is awarded for the sale of an item that is subject to Federal Excise Tax, the University will furnish the ven- dor with an exemption certificate. k. State laws and University regulations. All bids are subject to these regulations and to the laws of the State of Illinois, particularly the Illi- nois Purchasing Act and Conflict of Interest Statutes. A certification is required in certain instances, and the form of this certification will be provided in the bid form. (See also section 21(e) below.) SECTION 7. HOW TO SUBMIT BIDS a. Special envelope for sealed bids. In order that the University can tell without opening a bid which invitation to bid it is in response to, a special envelope will be furnished to be used in submitting a sealed bid. The envelope will have the following information on the outside: (1) The date and time of the bid opening. (2) The bid number. (3) The words "SEALED BID" in large capital letters. b. Bidder's own envelope for open bids. The bidder should use his own envelope for the sub- mission of an open bid. c. Where to submit bids. All bids must be submitted to the person and at the addresses specified in the invitation to bid. d. When to submit bids. Invitations for sealed bids will state the place, date, and hour of opening of bids. Invitations for open bids will require submission of bids by a specified date. In either case, the date specified will ordinarily be at least ten days after the invitations to bid are sent out. e. Change in or withdrawal of bids. A bidder may withdraw or change a bid if notice of the withdrawal or change is received by the Univer- sity before the latest time specified for submis- 13 sion of bids. Changes may be made only by substitution of another bid submitted in like manner as the original bid, or by a letter or tele- gram stating that the bid shall be changed by a specified amount (such as the subtraction of $0.75 per hundredweight) without stating the final figure resulting from the change. With- drawals of bids after bid opening will not ordi- narily be permitted; however, in those cases where, in the judgment of the University based upon clear and demonstrable evidence, the bidder has made a bona-fide error in the preparation of the bid and such error will result in a substantial loss to the bidder, an exception may be made. f. Late bids. No bids received after the time specified in the invitation to bid will be con- sidered. SECTION 8. CERTIFIED CHECK OR BID BOND a. Certified check or bid bond may be re- quired in connection with invitations to bid. The invitation to bid may require each bidder to file with his bid a certified check or bid bond (payable to The Board of Trustees of the Uni- versity of Illinois) the amount of which will not exceed 10% of the amount of the bid. b. Deposit agreement. A certified check, if requested, will be considered as security for full performance of all obligations imposed on the bidder, under the law and these regulations, in- cluding the obligation to keep the price or bid firm for as long a period as specified in the bid, and the obligation to file a "performance bond" if required, when a contract is awarded. If the bidder fails to perform any one or more of such obligations, the University will negotiate said check and retain from the proceeds thereof an amount sufficient to compensate it for any and all damages suffered because of such failure or failures. c. Return of check. If a bidder is the suc- cessful bidder, the certified check will be re- turned within a reasonable time after the contract is fully executed or after a "performance bond" is filed, if a bond is required. If a bidder is not a successful bidder, the certified check will be returned to that bidder within such time as may be set forth in the bid documents or, if no time 14 is stated, within a reasonable time after the con- tract is awarded to the successful bidder. SECTION 9. SUBMISSION OF SAMPLES WITH BID a. How to submit samples. Any samples called for in the invitation to bid should be submitted as instructed in the invitation. Each sample must be labeled clearly with the vendor's name, address, and invitation number. b. Transportation charges. No samples will be accepted by the Purchasing Officials unless all transportation charges, including cartage, have been prepaid. c. Representative sample. All samples sub- mitted must be representative of the commodities or equipment which will be delivered if a con- tract is awarded. Samples submitted by successful bidders will be retained for use in checking items delivered under the contract, but the submission of samples shall not limit the right of the Uni- versity to insist that commodities or equipment delivered must also meet the specifications of the invitation to bid. d. Disposition of samples. No payment will be made for samples. However, samples not destroyed by examination or testing will be re- turned to bidders (if so requested when samples are submitted, by marking sample "Please return sample"), at the bidder's expense. HANDLING OF BIDS SECTION 10. HANDLING OF SEALED BIDS a. Formal bid opening. All sealed bids will be opened, the amounts of the bids read aloud, and the names of the bidders recorded, at the place, date, and hour specified in the invitation to bid. The bid opening will be conducted by the Purchasing Official or by the Director of the Physical Plant, or the representatives of either of them, and an officer of The Board of Trustees or his representative. b. Bidders may be present. Bidders (or their authorized representatives) or any other inter- ested person may be present at any such opening of a group of bids. c. Bid speaks for itself. If the person read- ing the bids happens to make a mistake when 15 reading a bid aloud, the figure actually given in the bid shall govern. d. Recording of bids. The name of the bid- der will be recorded as each bid is read. As soon as all bids have been opened and read, the per- sons conducting the bid opening, as provided in section 10a, will sign the following certification: "We hereby certify that the bids submitted by the bidders whose names are recorded were opened, read, and recorded at the place and time specified in the Invitation to Bid." e. Prompt tabulation and award. Sealed bids will be tabulated for comparison and the award made as soon as reasonably practical after the opening and recording of the bids. In case of purchase or contracts over $2500, except in emergencies, this will be at a monthly meeting of The Board of Trustees. f. Public record of sealed bids. The record of bidders' names prepared at the bid opening and all the bids and tabulation sheets will be kept in the office of the Purchasing Official or Physical Plant Department for a period of not less than two years after the award is made, and are avail- able for inspection at reasonable hours by any interested person. SECTION 11. HANDLING OF OPEN BIDS a. Processed as soon as possible. Open bids will be examined and the award made as soon as reasonably possible after the latest time specified for submission of the bids. b. Public record of open bids. All written bids, confirmations in writing of oral bids, and tabulation sheets (if any) will be kept in the office of the Purchasing Official or Physical Plant Department for a period of not less than two years after the award is made, and are avail- able for inspection at reasonable hours by any interested person. AWARDING OF CONTRACTS SECTION 12. STANDARDS FOR AWARDING CONTRACTS a. Lowest and best bid. The awards will be made to the lowest bidder considering price, re- sponsibility of bidder, and all other relevant fac- tors, provided the bid meets the specifications and 16 other requirements of the invitation to bid. The standards followed in determining which is the lowest and best bid are outlined below. b. Cash discounts. In determining- the low- est bid, cash discounts when stated separately will be taken into account. c. Trade discounts. Trade discounts may be indicated, but should always be deducted by the vendor in calculating the unit price quoted. d. Quantity discounts. Quantity discounts should be included in the price of the item. e. Retailers' Occupational Tax. Bidders should not include Retailers' Occupation Tax or Use Tax in their quotations. Receipts from sales to the University of Illinois are exempt from Retailers' Occupation Tax Act and Use Tax Act. f. Unit price governs. In case of a mistake in the extension of a price, the unit price shall govern. g. Awards of any or all items. An award may be made to the lowest aggregate bidder for all items or on an item basis, whichever is found to be in the best interest of the University. h. Tie bids. If two or more bids meeting the specifications and other requirements of the in- vitation to bid are tied for low price, the bids will be treated as follows: (1) If there is no significant difference in the responsibility of the bidders, but there is a difference in the quality of the com- modities or equipment offered, the bid offering the best quality will be accepted. (2) If there is a significant difference in the responsibility of the bidders (including ability to deliver in the quantity and at the time required), the award will be made to the bidder who is deemed to be the most responsible. (3) If there is no significant difference in the responsibility of the bidders and no differ- ence in the quality of the items offered, the bid offering the earliest delivery time will be accepted in any case in which the invitation to bid specified that the needs of the University require as early delivery 17 as possible. In all other cases, delivery time will not be considered in making awards so long as the bidder states he will deliver not later than the time specified in the invitation to bid as the latest acceptable delivery time. (4) If everything is equal, except that some of the bidders are not from Illinois, pref- erence will be given to the Illinois bidders. The term "Illinois bidders" includes in- dividual bidders who reside or do business in Illinois, corporations organized under the laws of Illinois, and corporations or- ganized in other states but authorized to transact business in Illinois. An additional preference may also be given in such cases to Illinois bidders offering commodities or equipment grown or produced in Illinois. (5) If the bids quoting the same price are equal in every respect, the award may be made by lot to one or more of the low bidders; or, if feasible, may be split equally among all the low bidders if, in the judgment of the Purchasing Official or Physical Plant Department, this will not lead to any limitation of competition among bidders and is in the best interest of the University of Illinois. SECTION 13. REJECTION OF BIDS a. Non-responsive bids. Any bid which does not meet the requirements of the invitation to bid or does not comply with the provision of this regulation may be rejected. b. Alterations and erasures. Bids containing any material alteration or erasure may be re- jected unless the change is initialed by the bidder. c. Responsibility of the bidder. The Univer- sity may at any time make a supplementary in- vestigation as to the responsibility of any bidder, even though the bidder is on a bidders list. This may include investigation of financial responsi- bility, capacity to produce or sources of supply, performance record in the business or industry, ability to provide required maintenance service, and other matters relating to the bidder's prob- able ability to deliver in the quantity and at the time required under the contract if it is awarded 18 to him. The University may require the submis- sion of written statements from the bidder or other persons concerning any such matters. If the University concludes on the basis of all available evidence that a particular bidder appears not to be sufficiently responsible to assure ade- quate performance if the contract were awarded to him, his bid will be rejected even if it is the lowest bid. If in the judgment of the University there is some question about the responsibility of the low bidder but the interest of the University of Illi- nois would be adequately protected by the filing of a performance bond of the kind described in section 16 below or the deposit of a certified check as security for performance, he may require the low bidder to file such a bond or deposit such a check whether or not it was provided for in the invitation to bid, and upon the filing of the bond or deposit of the check may make the award to the low bidder. d. Contracts in which members of the Gen- eral Assembly, certain State officers or em- ployees, or any member of The Board of Trustees or employees of the University of Illinois have interest are prohibited. Any bid the acceptance of which would result in any of the following prohibited types of contracts will be subject to rejection: (1) The Constitution of the State of Illinois provides that no member of the General Assembly shall be interested, directly or indirectly, in any State contract author- ized by any law (including any appropria- tions statute) passed during the term for which he was elected or within one year after the end of such term. (2) The Constitution also provides that no member of the General Assembly or other officer of the State shall be interested, directly or indirectly, in any State con- tract for the purchase of fuel. (3) The laws of the State of Illinois provide that no elective state officer or no member of the General Assembly or any person employed in any of the offices of the state government or the wife, husband, or minor 19 child of any such person shall have, ac- quire, obtain, or hold any contract which will be wholly or partly satisfied by the payment of funds appropriated by the General Assembly of the State of Illinois, nor shall any such person have, acquire, obtain, or hold any direct pecuniary in- terest in any such contract. (4) In addition, the laws of the State of Illi- nois provide that it is unlawful for any firm, partnership, association, or corpora- tion from which any such person as de- scribed in (3) above, shall be entitled by contract, stock ownership, or otherwise to receive more than 7]/ 2 % of the total dis- tributable income thereof, to have, acquire, obtain or hold any such contract or direct pecuniary interest therein. (5) In addition, the laws of the State of Illi- nois provide that it shall be unlawful for any firm, partnership, association, or cor- poration from which any such person as described in (3) above, together with his or her wife or husband, or minor child or children, or any of them shall by con- tract, stock ownership, or otherwise be entitled to receive, in the aggregate, more than 15% of the total distributable income thereof to have, acquire, obtain or hold any such contract or direct pecuniary in- terest therein. (6) The laws of the State of Illinois provide that no member of The Board of Trustees of the University of Illinois shall be directly or indirectly interested in any contract to be made by said Board for any purposes whatsoever. (7) Also, as a matter of University policy, no contract will be awarded to a firm, partner- ship, association, or corporation the owner or principal owners or major officers of which are officers or employees of the University of Illinois. e. Attempt to influence award. No person on a bidders' list or who submits or intends to submit a bid shall give or offer to give, directly or indirectly, any money, article, or other thing 20 of value to any officer or employee of the Uni- versity of Illinois, with an intent to influence said officer or employee of the University of Illinois. If any person makes or offers to make a gift such as prohibited by this paragraph, all bids, submitted by him, will be rejected and the bidder will be barred from further bidding for a period of time fixed by the Purchasing or Physical Plant Department. (Also see section 20b(l) below, concerning cancellation of contracts ob- tained by unlawful means.) f. Collusive bids. If in the judgment of the Purchasing Official or the Physical Plant De- partment there is reasonable ground to believe that there is an agreement among certain bidders, or between them and certain prospective bidders, to restrain the bidding by establishing a fixed price or by any other means, the bids of all such bidders will be rejected, and the bidders and prospective bidders will be barred from further bidding for a period of time fixed by the Pur- chasing Official or Physical Plant Department. (Also see section 20b(l) below.) g. Rejection of all bids. If in the judgment of the Purchasing Official or the Physical Plant Department it is in the best interest of the Uni- versity of Illinois, all bids may be rejected, and notice sent to the low bidder. SECTION 14. BINDING CONTRACT WITH THE UNIVERSITY a. Purchase order. After the lowest and best acceptable bid has been determined, the Univer- sity will send the successful bidder a purchase order or a formal contract accepting his bid. b. Binding on bidder. The University's ac- ceptance of a bidder's offer by the issuance of a purchase order or submission of a formal con- tract will create a binding contract covering the following: (1) All the specifications, terms, and condi- tions in the invitation to bid and the bid form. (2) The provisions of this regulation. (3) The bidder's price and terms of payment. The successful bidder must perform in ac- cordance with the contract so made, or he will 21 be liable to the University for any damages caused it by his breach of contract. c. No changes impairing rights of University permitted. After the contract between the suc- cessful bidder and the University has been en- tered into by the issuance of a purchase order or contract, no material changes (such as a sub- stitution or a price adjustment) may be made in its terms and conditions. This provision shall not prohibit the minor addition, deletion, or chang- ing of work on construction contracts so long as such a change is agreeable to both parties, is approved by a licensed architect or engineer, and the price is appropriately adjusted. SECTION 15. SMALL SUPPLEMENTARY PURCHASES a. Conditions on which permitted. When the Purchasing Official issues a purchase order for a particular item after following the above bidding procedure, he may at any time within 30 days thereafter, issue a second purchase order to same vendor, or an amendment to the original order for an additional quantity of the same item, at the price and on the same terms and con- ditions, if: (1) He determines from the vendor that the purchase order will be accepted if issued. (2) He finds that the market price of the com- modity or equipment in question has not gone down since the first purchase; and (3) The amount of the second or additional purchase is not of such magnitude as to constitute a substantial or material varia- tion of the first purchase or original contract. b. Only one such purchase permitted. The Purchasing Official will not issue more than one such supplementary purchase order or amend- ment for a particular item without repeating the bidding procedure. PERFORMANCE BY SUCCESSFUL BIDDER SECTION 16. PERFORMANCE BOND a. May be required. The University shall have the right to require that the successful bid- der shall file a "Performance Bond" in a desig- nated amount and written by a Surety Company 22 acceptable to the University, whenever it shall appear to be in the best interest of the University to do so. It may be required that the Bond be filed within a specified number of days after the award is made or the contract shall be cancelled and the vendor or contractor shall be liable for any damages caused the University by his failure to file the bond. b. Amount. Such Performance Bond may be required in any amount up to 100% of the amount of the contract, depending upon the nature of the transaction.* c. Surety required. In addition to signing the bond as principal, the successful bidder must have the bond signed by a Surety Company authorized to do business in the State of Illinois. If the surety on the bond has its authority to do business in this State revoked or if for any rea- son it withdraws from doing business in this State, the bidder must promptly obtain another surety on the bond. d. Condition of bond. The bond shall be conditioned on full performance of all obligations imposed on the bidder by the contract with the University. It shall provide that if the bidder fails to perform any of such obligations the University of Illinois may recover from the bidder and the surety (or either of them) any and all damages suffered because of the breach of contract. e. Source of supply may also be required to file bond. If the bidder does not have a stock of the commodity or equipment in question in the amount asked for, nor facilities to produce the item in such amount, the University may in addition require the source of supply to file a Performance Bond, with surety, conditioned on such source supplying the bidder as stated in the bid. SECTION 17. DELIVERIES UNDER THE CONTRACT a. Upon order. Deliveries shall be made upon the written order of the Purchasing Official or as stated in a contract at the times and in the amounts specified in the Invitation to Bid and in such orders for delivery. Acceptance of any late deliveries shall not constitute a waiver of any of the rights of the University under its contract with the vendor. 23 b. Delivery point. All deliveries shall be made to the point or points specified in the In- vitation to Bid. SECTION 18. INSPECTION a. All deliveries subject to inspection. Any commodities or equipment that fail in any respect, for example, (1) to meet the specifications, (2) to conform to the vendor's samples, or (3) are not in good condition when delivered, will be subject to rejection. b. Notice to vendor or contractor. Notice of any such rejection based on defects that should be disclosed by ordinary methods of in- spection will be given to the vendor or contractor within a reasonable time after delivery of the item. Notice of latent defects which would make the items unfit for the purpose for which they are required may be given by the University at any time within one year after delivery. c. Vendor or contractor must remove re- jected items. The vendor or contractor may be required to remove immediately, at his own ex- pense, any items rejected by the University. If he fails to remove the items, the University may sell them and remit the proceeds of the sale (less any expenses incurred in the sale) to the vendor or contractor. d. Inspection at source. In some cases the University may require that the vendor or con- tractor permit inspection of the commodities or equipment at the factory, plant, or other estab- lishment where they are produced or grown. e. Other rights of University. Nothing con- tained herein shall be construed to limit in any way any rights the University may have under any law, including the Uniform Sales Act, ap- plicable to any transaction covered by these reg- ulations. SECTION 19. ASSIGNMENTS BY SUCCESSFUL BIDDER Contract non-assignable without approval. Because the responsibility of the individual bid- der is an essential element of his contract with the University, a person to whom such a con- tract has been awarded may not assign his inter- est in the contract, or any funds becoming due to him thereunder, without the prior consent in writing, of the University. 24 SECTION 20. CANCELLATION OF CONTRACT BY THE UNIVERSITY AND COMPENSATION FOR DAMAGES a. Cancellation for breach of contract. In any of the following cases the University shall have the right to cancel any contract entered into under this regulation without prejudice to any other right or remedy the University may have: (1) In the event the successful bidder fails to sign a written contract promptly after submission to him, or to furnish a satis- factory performance bond within the time specified. (2) In the event vendor or contractor fails to make delivery at the place or within the time specified in the contract or ordered by the University. (3) In the event any commodities or equip- ment delivered under the contract are rejected (for the reasons, among others, that they do not meet specifications, do not conform to sample, or are not in good condition when delivered) and are not promptly replaced by the vendor. If there are rejections of the vendor's commodi- ties or equipment this shall be ground for cancellation even though the vendor offers to replace the items promptly. (4) In the event the vendor is guilty of such serious misrepresentation (for example, misbranding of food or drugs) in con- nection with the contract or another con- tract for the sale of commodities or equipment to the University that he can- not reasonably be depended upon to fulfill his obligations as a responsible vendor under any of his contracts with the Uni- versity. (5) In the event that the contractor for con- struction work fails to make payments to his laborers, materialmen, or sub- contractors as provided in the contract. (6) In the event of any other breach of con- tract by the vendor or contractor. b. Cancellation for fraud, collusion, illegal- ity, etc. The University may cancel any con- tract entered into under these regulations if, in its judgment, there is sufficient evidence to show that: 25 (1) The contract was obtained by fraud, col- lusion, conspiracy, or other unlawful means, or; (2) The contract conflicts with any statutory or Constitutional provision of the State of Illinois or of the United States, or with provisions of Section 13d of these regula- tions. c. Withholding moneys to compensate Uni- versity for damages. If a contract is cancelled under paragraph a or b above, the University may deduct from a bid deposit or from what- ever is owed the vendor on that or any other contract an amount sufficient to compensate the University for any damages suffered by it be- cause of the vendor's breach of contract or other unlawful act on his part on which the cancella- tion is based. d. Damages. The damages for which the University may be compensated as provided in paragraph c above or by a suit on the vendor's or contractor's performance bond or by other legal remedy shall include, among others; (1) The additional cost of commodities or equipment bought elsewhere; (2) The additional cost of completing the work called for under the contract; (3) Cost of repeating the bidding procedure; (4) Any expenses incurred because of delay in receipt of commodities or equipment, or any expenses incurred because of delays in, completion of construction, renovation or rehabilitation work; (5) Any other damages caused by the breach of contract or unlawful act. e. Barred from further bidding. Any bidder may be suspended for not more than one year for violation of these regulations or for failure to conform to specifications or terms of delivery. SECTION 21. SUBMISSION OF DELIVERY INVOICE-VOUCHERS FOR PURCHASES a. Invoice-voucher form furnished by Uni- versity in connection with purchases. To bill the University in connection with a purchase, the vendor must fill out the University's delivery invoice-voucher form. At the time the vendor 26 delivers the commodities or equipment the ven- dor should submit all copies as directed on the delivery invoice-voucher; the vendor will receive a copy for his files as indicated on the delivery invoice-voucher. b. Detailed description of commodities or equipment. The delivery invoice-voucher should give a complete and detailed description of the commodities or equipment delivered. c. Partial payments. If more than one ship- ment is required under a purchase order or agreement, the University may make partial pay- ment of the contract price as it receives the vendor's delivery invoice-vouchers relating to the separate deliveries. d. Computation of cash discounts. If the vendor allows a cash discount, the period of time in which the University must make pay- ment to qualify for the discounts will be com- puted from the date the University (1) receives the delivery invoice-voucher (correctly filled out) or (2) receives and officially accepts the com- modities or equipment, whichever is later. In addition, if any commodities or equipment are rejected, all time from the mailing of the notice of rejection to the acceptance of items delivered shall be excluded from the discount period. e. Certification required. Each vendor or contractor must execute a certification. This cer- tification which includes the statement required by Section 11 of the Illinois Purchasing Act, requires the signature of "Seller or Authorized Agent," and it must be in ink or indelible pencil. The signature of an. individual is required and it will not be sufficient to sign merely the name of the company or the partnership. If an officer or authorized representative signs for a vendor or contractor the title of that officer or the agency of the representative should be indicated on the certification. It will be conclusively pre- sumed by the University that the individual sign- ing the certification is properly authorized so to do. SECTION 22. SUBMISSION OF CONTRACTORS' STATEMENTS FOR CONSTRUCTION WORK a. Request for payment form furnished by University. To bill the University for remodel- 27 ing, renovation, or construction work done, the contractor must fill out the University of Illinois Request for Payment form. b. Certification by licensed architect or engi- neer. Any contract for remodeling, renovation, or construction, involving an expenditure in ex- cess of $2500, shall be subject to the supervision of a licensed architect or engineer and no pay- ment shall be paid for such remodeling, renova- tion, or construction unless the voucher for such work is accompanied by a written certificate of such licensed architect or engineer that the pay- ment represents work satisfactorily completed, labor, or materials incorporated in or stored at the site of such work. c. Periodic payments. When provided in the contract, periodic payments can be made during the course of such work upon a certificate of a licensed architect or engineer, indicating the pro- portionate amount of the total work completed satisfactorily. d. Retained percentage. When periodic pay- ments are made, the University shall retain a fixed percentage, specified in the contract, to in- sure faithful completion of the contract. OTHER PROCEDURES SECTION 23. WHEN THIS PROCEDURE MAY BE WAIVED BY PURCHASING OFFICIAL a. Commodities, equipment, or services not subject to competition. In the following cases the Purchasing Officials may issue a purchase order directly without following the procedure described above relating to bids, advertisements for bids, and invitations to bids: (1) Where the goods or services to be pro- cured are economically procurable from only one source, such as contracts for telephone service, electrical energy, and other public utility services, books, pam- phlets and periodicals, and specially de- signed business equipment. (2) Where the services required are for pro- fessional, technical or artistic skills. (3) Where the contract is for the purchase of supplies, materials, commodities, and 28 equipment involving an expenditure not to exceed $1500. (4) Where the contract is for repairs, main- tenance, remodeling, renovation, or con- struction involving an expenditure not to exceed $1500. (5) Where the cost of any item is so small as to make competitive bidding impractical. b. Emergency. If emergency circumstances make it administratively unfeasible for the Pur- chasing Official to follow exactly the procedure described in this purchasing regulation, and if it is in the best interest of the University of Illinois, the Purchasing Official need not comply with all of these regulations. However, an affidavit shall be filed with the Auditor-General of the State of Illinois within ten days after the purchase setting forth the conditions and circumstances requiring the emergency purchase. SECTION 24. RIGHTS TO APPEAL Any decision rendered by the Purchasing Offi- cial or Physical Plant Department pursuant to this regulation may be appealed to the Vice- President and Comptroller of the University by filing a written statement setting forth all the facts and circumstances together with the basis for making such appeal. By agreement with the Vice-President and Comptroller a further appeal may be made to The Board of Trustees. TECHNICAL PROVISIONS SECTION 25. DEFINITIONS a. University. As used herein, "University" shall refer to The Board of Trustees of the University of Illinois. Any actions taken by any officer of the Board or by the President, Vice- President and Comptroller, Business Manager, Director of the Physical Plant, Purchasing Offi- cial, University Architect, Superintendent of Buildings and Grounds, or by the authorized agent of any of these persons, shall be considered as acts of the University within the provisions of these regulations. b. Purchasing Official. As used herein, "Pur- chasing Official" means the Director of Purchases on the Urbana-Champaign campus, the Purchas- 29 ing Agent for the Chicago Departments, includ- ing the Chicago Undergraduate Division and the Division of Services for Crippled Children, or any person duly delegated to act in behalf of the Director of Purchases or the Purchasing Agent. For the acquisition of library books, the Acquisition Librarian is authorized to act as a purchasing official. Vendors should not accept statements of other University staff members without ascertaining that they are duly author- ized representatives of a Purchasing Official. c. Physical Plant Department. As used herein, "Physical Plant Department" refers to the Director of the Physical Plant or the Uni- versity Architect on the Urbana-Champaign campus or the Superintendent of Buildings and Grounds for the Chicago divisions. d. Bidder. "Bidder" means any person who intends to submit a bid for a contract with the University, or who submits such a bid. e. Person. "Person" means and includes any individual, firm, partnership, corporation, asso- ciation, or other unit. f. Pronouns construed. The pronouns "he," "his," and "him" shall be construed to mean the appropriate pronoun form (depending on the context) applicable to the person in question. For example, "he," "his," and "him" shall be read as "they," "their," and "them" if the bidder is a partnership, or the appropriate form of "it" if the bidder is a corporation. g. Cash discounts. "Cash Discount" is a dis- count or an allowance deductible from the total amount of the invoice for payment within a specified number of days. h. Trade discounts. "Trade Discount" is a special discount allowed by the bidder to special classes of purchasers. i. Quantity discounts. "Quantity Discount" is a discount allowed by the bidder for specified quantities of the item. SECTION 26. EFFECTIVE DATE These regulations, approved April 17, 1958, shall become effective on June 1, 1958. They shall apply to all bids submitted in response to invitations to bid sent out by the University on 30 or after the latter date. A certified copy of these regulations has been filed with the Secretary of State. SECTION 27. AUTHORITY FOR THESE REGULATIONS These regulations are issued by The Board of Trustees of the University of Illinois in accord- ance with the provisions of Illinois Revised Statutes (1957), Chapter 127, Sections 132.1 through 132.12. The right is reserved to rescind or amend, these regulations in whole or in part at any time without notice. No such rescission or amendment shall be effective, however, until such rescission or amendment has been filed with the Secretary of State. 31 UNIVERSITY OF ILLINOIS-URBANA