Business Services Policies

BS09 Initiating Purchases from Vendors Outside the University

Policy Status: 

Active

Policy Steward: 

Associate Vice President for Auxiliary & Business Services

Contents:

  • Purpose
  • Initiating the Purchase Order
  • Determination of Adequate Description
  • Securing Proper Approvals
  • Transmittal of Requisition
  • Emergency Purchases
  • Quotations and Vendor Selection
  • .... Competitive Buying
  • .... Non-Competitive Buying
  • .... Justifying Fairness and Reasonableness of Price
  • .... Revealing of Competitive Bids
  • Placing the Formal Purchase Order
  • Further Information
  • Cross References
  • PURPOSE:

    To set forth the general policies for initiating purchases or contracted services from vendors outside the University. (See Policy BS17 concerning the procurement of consultants.)

    INITIATING THE PURCHASE ORDER:

    An eBuy+ Requisition, or in identified situations, a Purchase Order Requisition. This form serves ONLY as a purchase requisition, until such time as approved by Purchasing Services. In the meantime, it has served Accounting Operations as a notice of intent to use funds from a certain departmental budget or fund. Also, the purchasing agent in Purchasing Services has been alerted to secure bids, etc.

    Any questions on how to execute the eBuy+ Requisition, or the Purchase Order Requisition form, or any problem which arises in handling procurement problems, should be discussed with Purchasing Services for advice and direction.

    DETERMINATION OF ADEQUATE DESCRIPTION:

    A person or department placing a requisition for purchase has the responsibility of furnishing a sufficiently detailed description so that, when used in soliciting bids, all prospective bidders will be properly advised as to the requirement. In cases where a general description is adequate, Purchasing Services' purchasing agents will work with the department originating the purchase requisition in writing formal specifications.

    SECURING PROPER APPROVALS:

    Appropriate approvals as established by Policy FN18 serve to indicate that the proposed purchase is needed, and to specify which available funds are to be used.

    TRANSMITTAL OF REQUISITION:

    The completed eBuy+ Requisition proceeds in accordance with the established workflow within the purchasing system, based on roles established by each area’s Financial Officer.

    EMERGENCY PURCHASES:

    When an emergency* arises, the faculty or staff member involved should contact Purchasing Services to explain the need. He or she will be advised by the purchasing agent of the necessary steps or action to be taken to obtain the material or service. The action taken may be telephoning of the request by the agent to a vendor, with follow-up documentation to be sent to Purchasing Services as instructed.

    * NOTE: For purposes of this policy, an emergency shall be defined as a sudden and unforeseen situation, and with the potential to pose a threat to the safety of personnel or property, requiring immediate action.

    QUOTATIONS AND VENDOR SELECTION:

    One of the most important responsibilities of Purchasing Services is that of making the decision as to which vendor should be selected to supply the need. Purchasing Services is responsible for obtaining quotations from vendors when formal bidding is required. Staff members may inquire and seek product or specification information and cost estimates for budgetary purposes from prospective vendors, but unofficial quotations sent to departments from vendors create delays, duplication of effort, and confusion in the final process of preparing and placing orders by Purchasing Services.

    1. Competitive Buying:

    Purchasing Services is required to take mandated purchasing action and retain corresponding documentation according to the following guidelines:

    $ 0 - 9,999 - Competition is not required if prices from the suggested source are known to be both fair and reasonable. However, bidding may be utilized when Purchasing Services has a basis to believe that a better price can be obtained by the use of competition.

    $ 10,000 - 24,999 - Evidence of competitive pricing must be documented. This can be accomplished by Purchasing Services through formal bidding, electronically submitted, FAX bids, phone pricing, comparison to or use of existing contracts and cooperative buying organizations, comparison to or use of volume purchase agreements, use of previous formal competitive quotations, or other means to ensure competitive pricing.

    $25,000 - up - Requires a formal bidding, on-line bidding (reverse auctions), negotiation process, or use of an existing contract or approved cooperative buying agreement.

    ALL QUOTATIONS OR OTHER MEANS TO ENSURE COMPETITIVE PRICING MUST BE OBTAINED BY PURCHASING SERVICES.

    2. Non-Competitive Buying:

    $10,000- up - Should a requisitioner determine that a specific manufacturer or brand of product is required, a written justification is required which documents the reasons why competition is or should be restricted. The "Single/Sole Source Justification" must be used. The preparer must reference the eBuy+ requisition number when preparing and submitting the on-line form. After a careful review by Purchasing Services with the department or ultimate user, a decision will be rendered as to the advisability of making a non-competitive purchase. The request for a single source item or a specific brand of product does not necessarily eliminate competitive requirements, and the supplier and method of award will be ultimately determined by Purchasing Services. Through documentation, Purchasing Services must show that even sole sourced items have been purchased based on price reasonableness.

    In the absence of bidding, various methods are utilized by Purchasing Services to gain assurance of reasonable prices such as, price comparisons with similar products, price lists or catalogs, or vendor contract price lists. In addition to the previous methods, Purchasing Services may also request a statement from the vendor certifying that "No better price is offered to other customers."

    3. Justifying Fairness and Reasonableness of Price:

    When undertaking and completing purchase of goods or services, it is no longer required to document the basis of a non-competitive (sole source) purchase where the purchase price does not exceed $10,000 exclusive of shipping or transportation costs, if separately priced. While documentation of the basis for a non-competitive purchase is no longer required, purchasing agents should generate such documentation if, on an "as needed" basis, the buyer or purchasing agent deems it to be warranted or needed by reason of unusual circumstances or other such reasons. The foregoing does not remove the requirement to ensure and adequately document that the price to be paid by the University is both fair and reasonable. The fairness and reasonableness of a price may be affirmed by the purchasing agent affixing his or her signature to the purchase order.

    4. Revealing of Competitive Bids:

    It is the general policy of Purchasing Services to reveal the name of the successful bidder and the price quoted. However, prices submitted by unsuccessful bidders are not disclosed.

    It is also the general policy of Purchasing Services to place the order with the vendor submitting the lowest and best quotation. The University reserves the right to reject any or all bids received and, as a result, on rare occasions, the low bidder may not be accepted in view of the stringent requirements and performance of the materials or service requested.

    PLACING THE FORMAL PURCHASE ORDER:

    Following the selection of a vendor who is to supply the material or service required, a formal Purchase Order will be placed with the vendor by Purchasing Services. Orders processed via the eBuy+ Requisition will be available on-line to the originating department. Confirmation of invoices will be done via the eBuy+ Invoice Confirmation System. (See Policy BS13.)

    FURTHER INFORMATION:

    For questions, additional detail, or to request changes to this policy, please contact the Office of the Associate Vice President, Auxiliary & Business Services.

    CROSS REFERENCES:

    Other Policies in this Manual may apply, especially:

    BS13 - Payment of Vendor's Invoices,

    BS17 - Use and Procurement of External Consultants, and

    FN18 - University Approval Authorization Policy.

    Effective Date: March 18, 2011
    Date Approved: March 16, 2011
    Date Published: March 18, 2011 (Editorial changes- September 21, 2016)

    Most Recent Changes:

    Revision History (and effective dates):

    • October 25, 2013 - Editorial changes. Addition of policy steward information, in the event that there are questions or requests for changes to the policy.
    • March 18 2011- Revisions made throughout the policy to reflect the use of the eBuy+ system as the prime valid method of committing the University for the purchase of equipment, materials, goods or services.
    • February 2, 2005 - editorial changes to eliminate "General Forms Usage Guide" and to correct links.
    • June 30, 2004:
      • Revised the competitive bidding thresholds and the requirement for a sole source justification. The previous $5,000 threshold was raised to $10,000.
      • Added the government auditor's language about the agent's signature now indicating the agent's determination of a fair price.
      • Deleted references to the now obsolete paper Purchase Order.
      • Added references to current electronic methods of obtaining bids.
      • Corrected IBIS form name from "PURC" to "REQR."
      • Changed 'buyer' to 'agent'
    • January 23, 2003 - Editorial change: Added a reference to the new online Single/Sole Source Justification form.
    • October 26, 1999 - Under Non-Competitive Buying subsection of section QUOTATIONS AND VENDOR SELECTION: changed the word 'or' to 'and' indicating the statement from the vendor is required in addition to vendor contract price lists.
    • March 6, 1998 - Policy renumbered from PC04 to BS 09; adjusted the cross references to policies BS13 and BS16.
    • January 10, 1995 - Added cross-reference to policy PC12 concerning the procurement of consultants; changed a reference from AD17 to FN18.
    • October 26, 1994 -
      • Changed the competitive buying levels from $0-2499 to $0-4999, $2500-4999 to $5000 - 24999, and $5000 and up to $25000 and up.
      • For competitive buying level of $25,000 and up, quotations must be obtained by Department of Purchases.
      • Non-competitive level added for $5000 and up.
    • May 26, 1994 - Added Department of Purchases responsibility to negotiate pricing which is supported by price or cost analysis.
    • August 24, 1993 - Added provisions for the IBIS PURC form, the Sole Source Justification form, and added a reference to the approval policy AD17.
    • March 19, 1990 - Changed the term "signatures" to "approvals." Change the title of section QUESTIONS AND VENDOR SELECTION to QUOTATIONS AND VENDOR SELECTION.
    • November 17, 1988 - Added definition of "emergency purchase."
    • May 10, 1988 - Changed title of "business manager" to "Director of Business Services."
    • May 18, 1987 - Under the section NON-COMPETITIVE BUYING, added a provision for alternate action in the absence of bidding.
    • April 29, 1983 - Requirement for competitive bidding raised from $1000 or more to $2500 or more.
    • March 22, 1982 - Signatures of "Department Head and Dean" changed to "budget administrator and budget executive."
    • February 1978 - New Policy.