The Code of Federal Regulations of the United States of America

Subpart 1-3.6-Small Purchases

§ 1-3.600 Scope of subpart.

This subpart prescribes policies and procedures for the purchasing of supplies and nonpersonal services from commercial sources when the aggregate amount involved in any one transaction does not exceed $2,500. Such purchases shall be termed "small purchases." This subpart is not applicable to the procurement of supplies and services initially estimated to exceed $2,500 even though awards under such procurements do not exceed $2,500.

§ 1-3.601 Purpose.

The objectives of the simplified purchase methods prescribed herein are to reduce the administrative costs in accomplishing small purchases, to improve opportunities for small business concerns and minority business enterprises to obtain a fair proportion of Government purchases and contracts, and to eliminate costly and time consuming paper processes.

[37 FR 13979, July 15, 1972]

§ 1-3.602 Policy.

(a) Small purchases shall be made by negotiation (see § 1-3.203), except under special circumstances where it is clearly in the best interest of the Government to accomplish such purchases by more formal methods.

(b) The objective of helping small concerns and minority business enterprises to participate in Federal procurement has wide potential application where small purchases are concerned and, accordingly, placement of small purchases with small concerns and minority business enterprises is specifically encouraged, consistent with other valid considerations such as price feasibility.

(c) When quotations are received on a number of related items (such as hardware items, spare parts for vehicles, or office supplies, etc.), one purchase order shall normally be issued to the firm quoting the lowest aggregate prices rather than issuing more than one purchase order on the basis of the lowest quotation on each item.

(d) In arriving at the aggregate amount involved in any one transaction, there must be included all supplies and services which would properly be grouped together in a single transaction and which would be included in a single advertisement for bids if the procurement

were being effected by formal advertiseing. Requirements aggregating more than $2,500 shall not be broken down into several purchases which are less than $2,500 merely for the purpose of permitting negotiation or utilizing the small purchase methods authorized under this Subpart 1-3.6.

(e) Any one of the purchase methods set forth in this subpart which is determined the most suitable to the immediate requirement and which will accomplish the procurement in the most efficient and economical manner, shall be utilized. [29 FR 10155, July 24, 1964, as amended at 37 FR 13979, July 15, 1972]

§ 1-3.603 Competition. § 1-3.603-1

Solicitation.

(a) Reasonable competition shall be obtained in making small purchases. As used in this § 1-3.603, reasonable competition means obtaining a sufficient number of quotations from qualified sources of supply to assure that the procurement. is fair to the Government, price and other factors considered, including the administrative cost of the purchase. In arriving at the number of quotations to be solicited, due consideration will be given to the cost of the proposed solicitation in relation to the potential benefits to be derived by the Government, consistent with good business.

(b) Reasonable competition for small purchases ordinarily can be obtained without soliciting quotations from sources outside the trade area in which the procurement office is located. However, solicitation shall not be limited to suppliers of well known and widely distributed makes or brands, nor shall quotations be solicited purely on a selective personal preference basis. New supply sources, disclosed through trade. journals or other media, shall be continuously reviewed and, when appropriate, added to the list of available sources. Each agency shall prescribe procedures for insuring that the small business and minority business enterprise status of each source is recorded on agency small purchase source lists, where lists are maintained, when such status is made known to the agency. Such status information shall be used. to insure that small business concerns and minority business enterprises are given opportunities to submit quotations in response to small purchase solicitations. Small business size standards are set forth in Subpart 1-1.7,

and minority business enterprise is defined in § 1-1.1310-2.

(1) The nature of the article or service to be procured, and whether highly competitive and readily available in several makes or brands, or relatively noncompetitive.

(2) Information obtained in making recent purchases of the same or similar item.

(3) The urgency of the proposed purchase.

(4) The dollar value of the proposed purchase.

(5) Past experience concerning specific dealers' prices.

(d) Solicitation of quotations may be effected orally or in writing. Written solicitation should be used only in such circumstances as where (1) the suppliers are located outside the local area, (2) special specifications are involved, (3) a large number of items are included in a single proposed procurement, or (4) obtaining oral quotations is not considered efficient. Standard Form 18, Request for Quotations shall be used for written solicitation of quotations in accordance with § 1-16.201.

(e) Where it is the practice for supliers to furnish standing price quotations on supplies or services required on an intermittent and recurring basis, this information may be used in lieu of obtaining individual quotations each time a purchase is contemplated. In such cases, the purchaser shall assure that the price information is current and that the Government obtains the benefit of maximum discounts.

[29 FR 10155, July 24, 1964, as amended at 37 FR 13979, July 15, 1972] § 1-3.603-2

chases.

Data to support small pur

(a) The manner of securing quotations and the nature and extent of information to be required for small purchases, are for determination by the procuring agency, but should be limited to only that deemed necessary to conclude purchase action.

(b) The following are illustrative of the extent to which quotation information should be recorded:

(1) Oral solicitations. When oral price quotations are obtained, informal records should be established which will reflect clearly the propriety of placing the order

at the price paid with the supplier concerned. In most cases, this will consist merely of showing the names of the suppliers contacted and the prices and other terms and conditions quoted by each. Handwritten notations on the purchase action request form of the agency, or whatever medium the purchaser is using as his basis for making the purchase, are satisfactory for this purpose.

(2) Written solicitations. Retention in the purchase files of written quotations received, or references to printed price lists used, will usually suffice as the record supporting the price paid.

(c) Purchase data collected or compiled during the course of arranging the purchase are for administrative and guidance value in making the purchase and issuing the appropriate purchase document. The retention of such data in the purchase files for use in subsequent reference, or as administratively required by agencies for management review, should be limited in time and quantity to the minimum necessary for such

This § 1-3.604 prescribes policies and procedures for making small purchases of supplies and nonpersonal services through the use of imprest funds. Related policies and regulations concerning bonding requirements and the establishment of, and accounting for, imprest funds are contained in Treasury Department Circular Nos. 1030 and 969, and GAO Manual 7 GAO 2700 and 5120. § 1-3.604-2 Definition of imprest fund.

The term "imprest fund" means a fixed cash or petty cash fund in the form of currency, coin, or Government check which has been advanced by an official Government disbursing office, without charge to a Government appropriation or fund account, to a duly authorized cashier for cash payment or other cash requirement purposes as specified in his designation or authorization. The fund may be of a revolving type, replenished to a fixed amount as spent or used, or of a stationary nature such as a change making fund.

§ 1-3.604–3 Agency responsibilities.

Each agency using imprest funds for small cash purchases of supplies or nonpersonal services shall have the responsibility of periodically reviewing and determining whether there is continuing need for each fund established, and that amounts of such funds are not in excess of actual needs. Agencies should take prompt action to have imprest funds adjusted to a level commensurate with demonstrated needs whenever circumstances warrant such action. In this connection, each agency shall:

(a) Study agency practices to insure that full advantage is taken of all small purchase processes; and

(b) Develop and issue appropriate implementing regulations.

§ 1-3.604-4 Use of imprest funds.

(a) The cash payment processes described in this section should be used for making small purchases whenever advantageous to the Government. Cash purchases will generally be advantageous in the following circumstances:

(1) When vendors are reluctant to honor small purchase orders.

(2) When vendors are not equipped to bill agencies for purchases in accordance with normal business practices.

(3) When supplies or nonpersonal services are needed at locations not served by purchase offices or when the established sources of issue are not conveniently accessible to point of use.

(4) When provisions for local credit arrangements and monthly billings by vendors are impracticable.

(b) The following are typical procurements for which the use of imprest funds would be suitable:

(1) Emergency, fill-in, occasional, or special purchases of supplies or services. (2) Repair of equipment.

(3) Perishable subsistence.

(4) Public utility bills where location of the activity is so situated as to make cash payment more efficient.

(5) Postage stamps, parcel post, COD, postal charges, local drayage, transportation tokens or passes (including cash fares), and taxi fares.

(6) Expenses incident to travel and emergency travel advances (as specified in Treasury Department Circular No. 4030).

$100 for any one transaction, except that under emergency conditions the amount for any one transaction may be increased not to exceed $250. Exceptions or additions needed in connection with procurement matters described in § 1-3.604-4, as well as the maximum dollar limitation for any one procurement transaction, should be addressed to the Treasury Department (pursuant to Treasury Department Circular No. 1030). The granting of any such exceptions or additions will be coordinated with the Administrator of General Services or his designee. Approved exceptions now existing will automatically be continued without specific request from the agency to which exceptions have been granted.

(b) Supplies or services subject to restrictions under any provisions of law or regulation may not be purchased through use of imprest funds except with such statutory and regulatory restrictions.

§ 1-3.604-6 Procurement and payment.

(a) Small purchases utilizing imprest funds may be made only by authorized employees.

(b) When payment for small purchases is made from imprest funds, no purchase order need be issued unless it is advantageous to the Government, for example, when required by the vendor to grant Government discounts. When so required, any authorized purchase order form may be used and will be endorsed "payment to be made in cash."

(d) The cashier may either reimburse employees for amounts paid by them for authorized purchases or furnish the cash necessary to consummate such purchases. Purchases for which cash has been furnished in advance should be confirmed within five work days from the date of advance. § 1-3.604-7

Tax exemption certificates. Government tax exemption certificates (Standard Form 1094-Revised) will not be required unless the amount of the taxes on any one bill or purchase exceeds one dollar. (See GAO Manual of Policies and Procedures, Title 7, section 4820.10). § 1-3.605

Purchase order forms.

§ 1-3.605-1

Standard Form 44, Purchase Order-Invoice-Voucher.

(a) Purpose of the form. Standard Form 44, Purchase Order-InvoiceVoucher illustrated in § 1-16.901-44), is a pocket-size purchase order form designed primarily for on-the-spot overthe-counter purchases of supplies and nonpersonal services. It is a multi-purpose form which can be used as a purchase order, receiving report, invoice, and public voucher.

(b) Prescribed use. Standard Form 44 is prescribed for use in connection with the documenation of purchases when all of the following conditions are satisfied:

(1) Except for purchases made under public exigency circumstances, the amount of the purchase is not in excess of $2,500.

(2) The supplies or services are immediately available.

(3) One delivery and one payment will be made.

(4) Its use is determined to be more economical and efficient than use of other small purchase methods.

(c) Terms and conditions. There are no written terins and conditions included on Standard Form 44. Since there is, for all practical purposes, simultaneous placing of purchase orders on Standard Form 44 and delivery of the items ordered, written terms and conditions are not considered necessary.

(d) Instructions for use. General procedural instructions governing the use of Standard Form 44 are printed on the form and on the inside front cover of each book of forms.

(e) Agency implementation. Agency implementation shall be consistent with this § 1-3.605-1, and shall provide adequate safeguards regarding the control of forms and accounting for purchases.

(f) Description and availability of form. (1) Standard Form 44 is available from General Services Administration supply depots in four-part carbon interleaved sets made up into books, consisting of twenty-five sets per book. Each set of forms consists of the following copies: Seller's Invoice, Seller's Copy of Order, Receiving Report-Accounting Copy, and Memorandum Copy. Standard Form 44 may be ordered in the same manner as other standard forms, or the form may be ordered specially printed in accordance with paragraph (f) (2) of this § 1-3.605-1.

(2) Standard Form 44 may be ordered specially printed (i) to include

agency name, address, and serial numbers; and (ii) on special weight of paper and with the type of construction, number of sets per book, and number of parts per set, as specified by the ordering agency. Also, the administrative instructions on the inside front cover of the books may be supplemented by using agencies. However, the format of Standard Form 44 may not be changed unless otherwise authorized by the General Services Administration.

§ 1-3.605-2 Standard Forms 147 and 148, Order for Supplies or Services. (a) General. (1) Standard Form 147, Order for Supplies or Services (illustrated in § 1-16.901-147) and Standard Form 148, Continuation Sheet (illustrated in § 1-16.901-148). are multi-purpose forms designed for use as a purchase order, delivery order, receiving and inspection report, and invoice.

(2) Standard Forms 147 and 148 are available for use by all Federal agencies and shall be used when in the judgment of the agency concerned the use of such forms is considered economical and efficient.

(3) Standard Form 147 is designed primarily for use as:

(i) A purchase order for small purchases not in excess of $2,500.

(ii) A delivery order for ordering or scheduling deliveries against established contracts or from Government sources of supply.

(b) Terms and conditions. (1) Terms and conditions generally suitable for most small purchases are printed on the reverse of Standard Form 147.

(2) Additional terms and conditions, which are consistent with those printed on the form, may be added by agencies provided they are designated as agency terms and conditions, and not as standard terms and conditions of Standard Form 147.

(c) Description and availability of forms. (1) Standard Forms 147 and 148 are available from General Services Administration supply depots in carbon interleaved sets of six parts and may be ordered in the same manner as other standard forms, or the forms may be ordered specially printed in accordwith paragraph (c) (2) of this

ance

§ 1-3.605-2.

(2) Standard Forms 147 and 148 may be ordered specially printed (i) to include agency name, address, and serial numbers; and (ii) on special weight of

paper and with the type of construction, and number of copies per set, as specified by the ordering agency. The forms may be made up as snap-out manifold forms, cut sheets, or reproducible masters. However, the format of Standard Forms 147 and 148 may not be changed unless authorized by the General Services Administration.

§ 1-3.605-3 Agency order forms.

Where Standard Forms 147 and 148 are not used, order forms designed by executive agencies shall conform insofar as practicable with the form illustrated in § 1-16.901-147.

§ 1-3.606 Blanket purchase arrange

This section establishes policy relating to the purchase of day-to-day requirements through arrangements with vendors or dealers to furnish, on a "charge account" basis, such supplies or nonpersonal services as the Government may order from such sources during a stated period of time. Generally, these arrangements should be made only with local sources so that individual purchases thereunder can be effected with a minimum of time and paper work. In addition to making blanket purchase arrangements for small purchases, similar blanket purchase accounts may be established with Federal Supply Schedule contractors, if not inconsistent or at variance with the terms of the applicable Federal Supply Schedule Contract. § 1-3.606-2 Authority to use blanket purchase arrangements.

(a) Blanket purchase arrangements are authorized when:

(1) A wide variety of items in a broad class of goods, like hardware, are generally purchased from local suppliers but the exact items, quantities, and delivery requirements are not known in advance and may vary considerably.

(2) There is a need to provide local commercial sources of supply for one or more offices or projects in a given area that do not have or need authority to purchase otherwise.

(3) In any other case where the writing of numerous purchase orders can be avoided through the use of this procedure.

(b) Blanket purchase arrangements should be made with local firms from whom numerous individual purchases

will likely be made in a given period. For example, where past experience has shown that certain commercial firms selling supplies in a local area are dependable and consistently lower in price than other supply firms in the area dealing in the same commodities, and numerous small purchases are usually made from such suppliers, it would be advan tageous to establish blanket purchase arrangements with these firms.

(c) There is no prohibition against making these arrangements with several suppliers for the same class or classes of items. Where experience indicates that prices vary between suppliers, it is preferable to have several blanket purchase arrangements so that delivery orders can be placed with the firm offering the best price.

§ 1-3.606-3

Establishment of account.

If it is determined that blanket purchase arrangements with certain suppliers would be advantageous, such suppliers should be contacted, preferably in person or through correspondence, in order to make the necessary arrangements with respect to securing maximum discounts, documenting the individual purchase transactions, periodic billing, and other necessary details.

§ 1-3.606-4 Documentation.

(a) Any documentation that assures the following with respect to individual purchase transactions is permissible:

(1) That the vendor and purchaser are in agreement as to what is being purchased.

(2) That at the time of delivery a record of sale and receipt is created.

(3) That at the time of billing for payment the foregoing requirements have provided evidence of the items, quantity, price, date sold and other relevant data.

(b) The issuance of a formal purchase order to document blanket purchase arrangements may be necessary only in certain instances. Such instances may be: when required by the vendor for administrative or tax exemption purposes; when administratively deemed necessary in the best interests of the Government by an agency; or when it is necessary to fix the extent of items covered, quantity, prices, expenditure authorized, activities participating, or otherwise identify or isolate areas of the arrangement. The issuance of a purchase order for Government purchasing

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