Price Reference and Price Justification

In May 2019, S. 530, Ratification #52, General Bill Amending the Consolidated Procurement

Code was signed by the Governor affecting all solicitations issued after May 13, 2019. Among other things, various procurement dollar thresholds were changed.  The biggest impact to purchasing was raising the fair and reasonable purchase limit (i.e. no competition required) from $2,500 to $10,000 and the ability to procure products with three formal written quotes between $10,000 - $25,000.  

In 2011, a $10,001 purchase, for example, had to be processed by a certified buyer who was required to competitively bid to product or service. 

To clarify, the policy is a result of a requirement in the law and was not implemented to shift work or create hurdles.  By law, Clemson is REQUIRED to show that three formal written quotes have been obtained, assure that products quoted are identical, we are paying the lowest price. Please use the example and explanation below to understand how to meet this requirement.

Please contact the Procurement and Business Service team for questions and we will be happy to discuss with you or assist you in obtaining price references. Procurement and Business Services contact information may be found here:

Price Reference: Website, Quote (verbal or written), Published Pricing, Previous Knowledge

Prices obtained from preferred and alternate suppliers for requested goods and/or services that can help support the price we want to pay from the selected supplier is the lowest price.  The prices do not

Good Example:

  • Clemson requestor obtains three formal written quotes and prices offered such as:
    • Supplier A - $12,500
    • Supplier B - $11,200
  • Requisition placed to Supplier C for $10,200

Poor Examples: 

  • Simply listing suppliers names:
    • Supplier A
    • Supplier B
  • Listing only other prices without stating where they come from:
    • $11,000
    • $11,500

Helpful Hints:

  • Provide written quotes from three suppliers attach them as supporting documentation.
  • Make sure the quotes are for goods and/or services that are identical.
  • Do NOT waste time obtaining multiple price references if you are planning to spend more than $25K. This will most likely require bidding and obtaining other prices is a waste of time (your time and suppliers time).
  • When looking at and researching suppliers for goods and/or services, always obtain pricing from the suppliers, even if it is preliminary pricing. If you find a good website with pricing, bookmark it.

Price Justification

There are certain instances where obtaining other prices for a good or service is not practical if it is difficult to locate other sources of supply or to get true “apple-to-apple” pricing.  In these instances, providing some other justification, aside from multiple price points, to justify that a price is fair and reasonable is appropriate.  Examples of what appropriate justification might include Market Knowledge, comparison to a similar item, sales of a similar item to other universities or companies, and independent university (in-house) estimate.

Good Example:

While we are sure other companies can provide Product A, we can only find pricing for Product B, which is the same as Product A except for one thing.  Pricing for Product B is Supplier A - $3500, Supplier B - $4000.

Poor Examples: 

  • Stating “fair and reasonable”, “n/a”, or leaving blank.
  • Stating “this is the best one in the market” or “these are the only guys that can supply it” or “this is the only supplier than can provide this.”  If it is truly only one supplier than can make this, then utilize a Sole Source form and justify the sole source instead of simply justifying the price.

Helpful Hints:

  • When looking at and researching suppliers for goods and/or services, always obtain pricing from the suppliers, even if it is preliminary pricing. If you find a good website with pricing, bookmark it.
  • If you know price is going to be >$10K, do not worry about price justification as it will most likely need to be publicly bid out.