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Requirements for Buying Through Auctions

Summary: Learn what you need to do if you want to purchase supplies or equipment for your department through an auction, including documentation requirements, payment considerations and procedures.

Online or live auctions offer a way of buying equipment and supplies for the University. Each auction vendor has specific requirements for participation that do not always correspond with University regulations. For this reason, requests to participate in auctions are handled on a case-by-case basis.
Before you attempt to purchase any item through an auction, contact Purchasing for assistance. Purchasing performs the following tasks:

• Determines whether the auction vendor's requirements accommodate working with UCSC
• Ensures that all items are inspected before UCSC may participate
• Issues a one-time delegation of authority to the participant to bid and expend funds
• Ensures that the University's procurement policies are met:
  • Requirements for competition are satisfied
  • Negotiations are conducted according to established policies
  • No conduct of compromise to the public trust is present

When you look at the price of auction items, the savings may seem substantial. However, often the reasons for the low price are disadvantages such as:

• Limited or no warranties
• No return policy
• Advance payment requirements
• Items of uncertain history and condition
• Remember, all auction items are purchased on an "as is/ where is" basis.

Involve Purchasing early: (831) 459-2311. If Purchasing determines that your participation is appropriate, a buyer will participate with you, or on your behalf. If participation is not appropriate, the buyer will assist you in finding other solutions.

Guidelines: Each auction vendor has guidelines which may/not accommodate working with UCSC. Auctions are out of the ordinary and require substantiating documentation for review.

Documentation Required Prior to Auction: The more advance notice provided to Purchasing the better; however, all documentation (indicated below) must be submitted to Purchasing at least one week prior to the auction date, including a regular purchase requisition.

• Auction house name and payment terms
• Date of auction
• Letter from PI explaining why this purchase is necessary and how it will meet his (research) needs.
• Sole source if anticipated bid is $50,000
• List of desired items with target and maximum price willing to bid
• List of pricing if purchased new (with original manufacturers' information if available)

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Purchasing Process: The Purchasing Buyer reviews all submitted documentation, and, if approved, will provide a one-time letter of designated authority from Purchasing to the Principal Investigator (PI) to bid and expend UC funds. This letter must be in place prior to the auction date. The University of California has established purchasing policies to ensure implementation of the requirements for state agencies dealing with public monies, funding agencies for Federal contracts and grants, and other extramural agreements. In addition, we caution against signing an agreement which includes terms and conditions covering issues such as limitations of liability, indemnification, penalties, late fees, credit terms or any other business contractual term beyond the realm of the specifications of the equipment/supplies and the value of the purchase.

Product Evaluation: Usually a day or two before an auction, the vendor will set aside the day(s) for review and evaluation of the equipment/supplies that will be auctioned. It is strongly suggested the PI takes advantage of this time (even if it means traveling to the location) as what appears a good value online, through a catalog, etc., in person may not be as represented and can end up being a costly mistake.

Purchase Process: If the auction request is approved, the buyer assigns a purchase order number to the requisition and attaches all supporting documentation. This PO is for internal purposes only (as most auction houses will not accept a purchase order) and is needed in order for Disbursements to make payment (usually by wire transfer.)

PI bids on items. The auction house will provide the PI with an invoice for those items for which he was the successful bidder. Included on the invoice should be the buyer premium added to the winning bid price for each item. After reviewing, the PI needs to immediately forward the invoice to the buyer for completion of PO.

Indicate items that require an inventorial equipment property tag. This is determined based on the purchase price, not on the fair market value. See Equipment Administration.

Each vendor has a different payment process. Most vendors prefer a wire transfer with payment within 72 hrs. In addition, most vendors will not release the items for shipment until payment has been received. Some vendors will require a good faith percentage deposit prior to bidding. UCSC does not have a method for providing a cashier s check.

Shipping arrangements are typically the responsibility of UCSC. This includes both carrier selection and packing. Contact Steve Goldie (831) 459-2852 in Receiving for further information about making pick-up arrangements. It is suggested you do this several days in advance of the auction. If you make shipping arrangements through the auction house there may be an additional charge.

All auction items are purchased as is/where is. No guarantee. If something is damaged in shipment it is very difficult to prove fault. What may appear as a good deal may not be worth the risk, when all is said and done. The PI needs to do his due diligence homework. Without it, his request may not be approved.

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Last revised: October 13, 2008 (am)