BS09 Initiating Purchases from Vendors Outside the University
Contents:
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:
Shoppers shall initiate a shopping cart through Shop OnLion when requesting a Purchase Order. This form serves ONLY as a purchase requisition, until such time as approved by the Office of Central Procurement. 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 Central Procurement has been alerted to secure bids, etc.
Any questions on how to execute the Shop OnLion shopping cart or any problem which arises in handling procurement problems, should be discussed with Central Procurement 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, Central Procurement's 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 Shop OnLion purchase order 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 the Office of Central Procurement 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.
PURCHASING WITH SPONSORED FUNDS
Purchases using sponsored funds must follow the competitive bidding thresholds required by the sponsoring agencies policies and regulations, which may have lower thresholds than the University. For federal-sponsored programs, purchases must be made in accordance with Federal Acquisition Regulations and Uniform Guidance (2CFR 200): The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
QUOTATIONS AND VENDOR SELECTION:
All purchases of equipment, materials, goods, and services must be conducted in a manner that provides, to the maximum extent possible, competition and adherence to competitive procurement practices. University units that need to purchase equipment, materials, goods, or services shall first seek the equipment, materials, goods, or services from an internal supplier and second from a University-contracted Supplier. If neither internal suppliers nor University-contracted Suppliers can provide the equipment, materials, goods, or services, the unit shall use one of the following sourcing methods outlined in this section. The Office of Central Procurement may competitively bid any request, regardless of the dollar amount, when it is deemed in the best interest of the University.
1. Competitive Buying:
The Office of Central Procurement is required to take mandated purchasing action and retain corresponding documentation according to the following guidelines:
$ 0 - $24,999 - Competition is not required if the prices from the suggested source are known to be both fair and reasonable. Fair and reasonable can be determined from historical pricing, commercially published price lists, or comparisons with similar goods or services. However, additional bidding procedures may be utilized when the Office of Central Procurement has a basis to believe that a better price can be obtained using competition.
$25,000 - $99,999 - Evidence of competitive pricing must be documented. This can be accomplished by obtaining three or more quotes in written form. Units may obtain quotes and submit to the Office of Central Procurement for final evaluation. The Office of Central Procurement can assist units with obtaining quotes as needed. The Office of Central Procurement will determine if formal bidding procedures are required in the best interest of the University.
*NOTE: Evidence of competetive pricing is required for acquisitions that are equal to or greater than $25,000 (but may also be used for purchases under $25,000, such as for federal programs with lower limit of $10,000 in accordance with Uniform Guidance (2CFR 200): The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.) when the goods or services required can be clearly defined.
$100,000 - up - The Office of Central Procurement will perform a formal bidding, online bidding (reverse auction), negotiation process, or utilize an existing contract or approved cooperative buying agreement.
Revealing of Competitive Bids: Upon request, the Office of Central Procurement may reveal the name of the successful bidder and price quoted. Any additional competitive bidding information requested requires the approval of the Chief Procurement Officer.
2. Non-Competitive Buying:
$25,000- up - Should a requisitioner determine that a specific manufacturer or brand of product is the only necessary source, a written Single/Sole Source Justification is required which documents the reasons why competition is, or should be, restricted. The Single/Sole Source Justification Form must be completed in full. The Office of Central Procurement, with the department or ultimate user, will determine the validity and authenticity of the request to making a non-competitive purchase. The request for a Single/Sole Source item, or specific brand of product, does not necessarily eliminate competitive requirements, and the Supplier and method of award will ultimately be determined by the Office of Central Procurement. The Office of Central Procurement, through documentation, must show that all items, even those that are Single/Sole Source, 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 $25,000 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.
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 The Office of Central Procurement. Orders processed via Shop OnLion will be available on-line to the originating department. Confirmation of goods receipts will be done via Shop OnLion.
FURTHER INFORMATION:
For questions, additional detail, or to request changes to this policy, please contact the Office of Central Procurement.
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:
- August 7, 2024
- Added reference to Purchasing with Sponsored Funds
- Editorial changes to change Purchasing Services to the Office of Central Procurement and eBuy to Shop OnLion.
- Revised the competitive bidding thresholds. The previous $10,000 threshold was raised to $25,000.
- Revised the formal bidding threshold. The previous $25,000 threshold was raised to $100,000.
- Revised sole source justification threshold. The previous $10,000 threshold was raised to $25,000.
- Added reference to compliance with Uniformed guidance when Sponsored Funds are used
Revision History (and effective dates):
- September 21, 2016 - Editorial changes. Removal of Authorized Approvals for Forms and IBIS/EASY Screens (Formerly Appendix 23) in the SECURING PROPER APPROVALS section; this appendix was obsolete and retired in May 2014.
- 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:
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- 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.