èßäapp

Scope

This policy provides guidance for the procurement of goods and services by the University as well as outlining the authority and responsible parties for making purchases.

Reason for Policy

To outline the authority and responsibilities of making purchases for the purpose of maximizing the value of the money spent by the University while operating in compliance with the Board of Curators’ Collected Rules and Regulations.

Policy Statement

Delegation of Authority
The government of the University of Ã¨ßäapp is vested in the Board of Curators by the constitution of the State of Ã¨ßäapp, Article IX Section 9(a). The Board has established and approved Collected Rules and Regulations (CRR) governing and controlling purchasing practices for the University. The Board has delegated to the President the authority for procurement of supplies, equipment and services. Authority is further delegated to the Executive Vice President, Finance & Operations and Chief Financial Officer to govern and manage the purchasing and contract operations and negotiations. The Executive Vice President, Finance & Operations and Chief Financial Officer has delegated the purchasing and contracting operations to the Assistant Vice President for Management Services, who has further delegated authority to èßäappSystem Procurement and MU Health Care. The authorizations are outlined in CRR 80.010.

Additional Reviews and Approvals:

• General Counsel of the University must approve all contract documents as to form. 
• Additional approvals may also be needed in the case of information technology and telecommunications purchases (refer to University Policy 12004). 
• Additional approvals may be needed in the case of facility purchases and/or purchases with a facilities impact (refer to University policy 24001).
• Furniture, signage and artwork purchases $500,000 and above must be competitively bid by either èßäappSystem Procurement, MUHC Supply Chain, or Planning Design & Construction and may not be purchased through a Group Purchasing Organization (GPO) or other means unless otherwise approved by the Chief Procurement Officer or designee.  

Board of Curators approval must be obtained for:

• Purchases of unique items or services which do not lend themselves to competitive bidding when the cost is more than $500,000, except for proprietary licenses or maintenance agreements necessary for operations of University computing equipment, in which case the President shall be authorized to enter into the contract a.k.a. Sole Source
• Consultant agreements, when arrived at through a Request for Qualifications (RFQ) or sole source, if they exceed $500,000.  Consultant agreements, when done through a Request for Proposal (RFP) where price is a component of the evaluation criteria, do not require Board approval.
• Rental and lease agreements on equipment for more than $500,000 for a sole source contract.
• Reports in lieu of approvals: An annual report shall be provided to the Board for purchases and competitively bid services contracts when the cost is more than $1,000,000; equipment leases when the total cost is more than $1,000,000 or when the lease term is more than five years.

Department Authority and Responsibility
Departments may make purchases under $5,000 or up to the maximum limit for single transaction and monthly cycle of a University issued credit card by authorized staff in each business unit as specifically allowed in University policy.  It is the responsibility of the administrative head of the ordering department to assure that purchases initiated by departmental staff are made in accordance with University policies and in the best interest of the University.

Procurement Restrictions
The following are prohibited under this policy:

• Purchases for employees – Purchases for personal or private use by University employees is prohibited.  Exceptions will only be made under special contracts, which may include microcomputers and related peripherals. 
• Splitting or Stringing Purchases – Splitting or Stringing Purchases with the willful intent to circumvent University policies is prohibited.  The act of splitting or stringing purchase may result in the withdrawal of delegated purchasing authority.  In addition, the responsible person may be subject to disciplinary actions including obligating the employee making such purchases to pay for the items or services.
• Confirming orders – Making a purchase commitment without proper authorization or before a University purchase order is issued is prohibited. Committing the University to purchase without the issuance of a purchase order violates the delegation of authority, except as authorized by èßäappSystem Procurement or MUHC.

Employee Liability
Any employee who commits the University to a purchase, sale, lease or other arrangement without proper authorization may be personally liable for the transaction.  The University is under no obligation to authorize payment for expenditures not made in compliance with applicable policies.  University employees acting in a procurement capacity may be liable for damages to the University if they injure the University through willful misconduct, bad faith, dishonesty or criminal negligence.

Definitions

Splitting or Stringing Purchases - the practice of issuing multiple purchase orders, procurement card transactions, requisition, petty cash transactions, or other methods of purchasing of like items or services with the willful intent of circumventing purchasing policy.

RFP (Request for Proposal) - a formal process that is used when multiple factors are to be considered in making a decision based on best value.   

RFI (Request for Information) -  used to determine what products and services are potentially available in the marketplace to meet a buyer needs.  It is typically followed by an RFP, but an RFI is not a mandatory prerequisite to writing an RFP. 

RFQ (Request for Qualification) - used to qualify a pool of suppliers who meet defined criteria for a specified product category or service. RFQ may also be used to narrow a pool of qualified supplier prior to an RFP.

Informal RFB (Request for Bid) - an informal bid or request for quotation is commonly used on low dollar purchases where the required items are known, but obtaining the cost is the primary objective.

RFB (Request for Bid) - a formal request for pricing that is awarded to the lowest responsible and responsive bidder whose bid conforms to the specifications and meets all other requirements and criteria set forth in the RFB. 

Sole Source - the Sole Source process is used when the item or service is only available from one source with no other distribution network is available.  These are treated as justified exceptions to the normal bidding procedures.  Documentation stipulating the reason for the sole source and reasons why this is the case must be submitted and approved by UMSYS Procurement or MUHC Supply Chain based on delegated authority.

GPO - a group purchasing organization is an entity that is authorized to act as an agent for a group of individuals or entities who are members of that GPO.  The GPO bids goods and services and negotiates the best deals in which the members can then access the contracts. èßäappSystem Procurement and MUHC Supply Chain have the ability to further negotiation pricing and/or terms and conditions of GPO contracts.

Accountabilities

èßäappSystem Procurement/MUHC Supply Chain:

• Provide a role of guidance and assistance to University departments to ensure that purchases are made in a manner that provides the best value to the University
• Provide organization and administration of unified, fair and effective purchasing services for all divisions and departments of the University
• Acquire equipment, supplies and services for all departments of the University in an economical, expeditious and reasonable manner in accordance with University policies
• Identify qualified suppliers and develop and maintain good business relationships with them
• Provide assistance to departments in preparing specifications and in analysis of solicitations received
• Perform final negotiations, award contracts and assure supplier performance compliance
• Maintain contracts with suppliers for many supplies, equipment or services with authorized suppliers.  Contract pricing and performance is based on the University’s overall anticipated volume of purchases during the contract period. 

Departments:

• Collaborate with èßäappSystem Procurement or MUHC Supply Chain for purchases over specified limits that require solicitation
• Ensure requisitions and/or purchase orders are approved by properly authorized employees
• Obtain needed supplies, equipment or services from authorized suppliers and contracts

Additional Details

Forms

Sole Source Justification Form (only available in PeopleSoft during the requisitioning process)

Related Information

Collected Rules and Regulations: 80.010 Procurement

Collected Rules and Regulations: General Execution of Instruments
Collected Rules and Regulations: Purchasing
Policy 12004 on Information Technology and Telecommunication Purchases

History

This policy combines the following former policies:

• Business Policy Manual 301 – Delegation of Authority (revised 10/20/2010)
• Business Policy Manual 302 – Organization (revised 10/20/2010)
• Purchasing Policy Manual 101 – Executive Summary
• Purchasing Policy Manual 102 â€“ University of èßäapp Procurement Staff
• Purchasing Policy Manual 304 â€“ Unauthorized Purchases
• Purchasing Policy Manual 504 â€“ Restrictions

Procedure