Explore UAB

Capital equipment is any item of equipment, apparatus, machinery, or furniture not attached to or made a part of a building structure. The item must be non-expendable, have a useful life in excess of one year, and be of sufficient size and individuality to make control feasible. The original acquisition cost should include the cost of all items which, when assembled, will continue to operate as one unit for the remainder of its useful life. The cost should also include the expenses necessary to make it operational. This would include shipping/freight, installation, space modification, etc.

To be considered capital equipment for the Hospital, the item must have an individual cost of $2,000 or more. To be considered capital equipment for the University, the item must have an individual cost of $5,000 or more. Major computer software for the Hospital and University is capitalized when the individual cost is $5,000 or greater.

Alabama’s Competitive Bid Law Resources

In connection with any procurement subject to Article 5 of Chapter 4 of Title 41, Code of Alabama, an expenditure of $75,000 or more must be awarded by competitive sealed bid unless otherwise authorized by law.


Sole Source

In accordance with the University Policy, any requisition totaling $75,000 or more which is not let for open and competitive bid must be accompanied by a sole source justification form. This form must be complete and signed. Any requisition meeting the above criteria which does not have a completed, department signed sole source justification attached will be returned to the requestor. All sole source transactions are subject to review and audit by the internal audit, state examiners and other governing agencies.

The Director of University Purchasing is vested with the authority to approve a sole source purchase, and the decision of the Director is final.

Board Approval

Board Rule 415

Per UA System Board Rule 415, Section C (5.)(c.), Purchases or leases of individual items of equipment equal to $750,000 or more shall be submitted to the Board for approval in accordance with Attachment C. Related equipment purchases or leases shall not be subdivided into separate actions or purchase orders of less than $750,000 to avoid required Board consideration.

Per UA System Board Rule 415, Section C (5.)(d.), Equipment purchases or leases included in Capital Construction Projects which have Board approval shall not require separate Board action. Also, purchases or leases of equipment which are funded entirely by grant or contract shall not require Board approval if both of the following criteria are met:

  1. The capital expenditure or value of the leased equipment is less than $1 million; and
  2. at least 75% of the operational cost associated with the equipment will be paid by the grant or contract over the estimated useful life of the asset.

Generally, capital projects with estimated costs of less than $750,000 may be undertaken and associated contracts executed without Board approval. However, all capital projects (regardless of cost) which impact the visual appearance of the campus are to be presented to the Board.

University Purchasing will return to the originator any purchase requisition for equipment or software that exceeds the above thresholds that do not have a copy of an approved Board resolution attached.

Back to Top