Classifying the Purchase - 303
Policy
Acquisitions and contracts must be properly classified to correctly apply relevant laws, policies, procedures, and contract terms. Information Technology (IT) and non-IT transactions are governed by different areas of law and proper classification ensures the procurement process and resulting contract meet the right requirements.
Incorrect classification of a transaction for the purpose of circumventing laws, policies, procedures, and contract terms is prohibited.
Final authority for all contract classification decisions resides with the California State Chief Procurement Officer, Deputy Director, DGS’ Procurement Division.
Procedure
- Identify the business need.
Obtain a clear description of the proposed acquisition, including the purpose of the purchase, required functionality, and expected outcomes.
- Determine the acquisition type.
- IT Goods
- IT Services
- Non-IT Goods
- Non-IT Services
- State Contracting Manual Volume 2 Section 304 – Acquisition Types
- State Contracting Manual Volume 2 Chapter 10 – Information Technology Procurements
- State Administrative Manual (SAM) 4819.2
- Seek assistance.
- The appropriate level of procurement authority.
- If the procurement should be conducted by DGS or the California Department of Technology (CDT).
- Required pre-procurement and procurement activities.
- Contract terms, provisions, or special conditions.
- Procurement, program, and project delays.
- Limiting competition.
- Waste of time and taxpayer money.
- Loss of funding.
- Risk to the state (e.g., IT security).
- Disputes, protests, and/or lawsuits.
- Illegal contracts.
- Compliance.
Identify whether the acquisition is:
See Contract Classification Quick Guide for assistance or the following policy:
First consult the department designated Purchasing Authority Contact (PAC). After reviewing available resources and consulting with the PAC, contact the DGS Procurement Division (PD) at PAMS@dgs.ca.gov
Proper classification is essential to determine:
Inaccurate classification may result in:
Contract classification compliance is monitored through purchasing authority reviews and audits. PD also investigates allegations of non-compliance submitted in various ways such as a vendor complaint, failed protest, etc. Deficiency notices will be issued to remedy systemic and transactional compliance concerns.
Legal Reference
Public Contract Code (PCC) 10290, 10300-10381, 12100-12113
Related Policy, Procedures & Resources
State Contracting Manual Vol. 2 Section 304 – Acquisition Types
State Contracting Manual Vol. 2 Chapter 10 – Information Technology Procurements
State Administrative Manual (SAM) 4819.2
Attachments
Revisions
No Revisions for this item.