This Policy outlines the responsibilities and procedures required when making purchases with University funds. It applies regardless of the funding source. The University uses a decentralized purchasing process, allowing its departments to make purchasing decisions in accordance with their specific needs, and in alignment with their budgets. As with all expenditures, anyone making purchases with University funds is obligated to use stewardship, exercise ethical behavior, comply with government regulations, and provide proper transaction documentation and recording. Area Vice Presidents may impose additional restrictions than those outlined in this policy.
Authorization Limits and Purchasing Methods
Department chairs and budget directors have authority to make purchases on behalf of the University for goods and services under $1,000. Purchases under $1,000 may be processed with a purchase order or university issued credit card. Please refer to the Policy for Credit Card Program for more information on using the University credit card, and what restrictions apply.
Purchases that are $1,000 and over require a university purchase order. This means that if the vendor is going to deliver materials or render services in advance of receiving payment, a purchase order must be issued. These purchases also require the approval of the area Vice President, and purchases over $10,000 also require the approval of the President.
Exceptions are generally made for utilities, lease and maintenance contracts and debt payments where services may be engaged by contract. The Policy for Contracts provides information on when written contracts are required. In addition, situations where the University must pay in advance of delivery of services or materials are not appropriate for purchase orders; examples are subscriptions, conference registration fees, and membership dues (in these situations the University is committing to the purchase by tendering payment via a check request).
Prior to committing the University to a purchase there should be a reasonable estimate of the cost. If the price is not published a vendor can provide a quote. Include estimated shipping costs on the purchase order as well. Invoices that come in over the amount of the purchase order require additional approvals.
While not mandated, except as described below under “Purchasing Standards for Purchases made with Federal Funds”, competitive quotes from vendors handling the same or similar goods and services should be secured whenever possible to ensure the University receives quality merchandise and services at the best value.
The following types of purchases have some additional requirements as described:
ARAMARK – Catering purchases from ARAMARK require a purchase order. Contact an ARAMARK representative or Accounts Payable for more information.
Awards/Prizes and Gifts – Expenditures for awards/prizes and gifts to staff and students are covered in Policy for Awards/Prizes and Gifts. Purchases of awards/prizes and gifts require prior approval from area Vice President.
Branding – Purchases of T-shirts and other items that have St. Mary’s brand/logo on them must be from a vendor licensed with St. Mary’s. The link to this vendor list is located on Gateway under the Finance section.
Technology-related Equipment – Purchases of technology related equipment and software must be coordinated through Information Services. Technology related equipment must be processed using a purchase order and will be routed through Information Services for approval. Software $250 and over must be processed using a purchase order as well. The University does not permit purchases of computers and related equipment and software, $250 and over, with a University credit card or other form of payment to be reimbursed to the buyer, such as personal credit cards, checks or cash. Please also refer to the Policy for Information Resources Acquisition.
Furniture – In addition to the purchasing process described above, purchases of furniture should follow the guidelines set forth in Facilities’ Furniture Disposal and Acquisition Procedure. This guide is available on Gateway, or by contacting Facilities.
Purchase Orders are processed, prior to the purchase being made, through Gateway. Instructions on completing a purchase order can be found in the Banner Finance Self Service Guide. To access the Finance Self Service functions, contact the Finance Office. Purchases should not be made until the purchase order has been approved by all required approvers. Requests for an official printed purchase order can be made through the Accounts Payable Office. Requests for new vendors must be sent to the Accounts Payable office. A W-9 form is required to be completed by all new vendors prior to them being set up.
Business Expense Reimbursements
University employees must always be mindful of good stewardship and the University business purpose when using University funds. Reimbursements may be requested for reasonable and necessary expenses incurred by individuals in the conduct of official University activities for expenditures that do not fall within these purchasing procedures. Examples would include:
Reimbursement for a business-related meals
For business-related meal reimbursements, the original itemized meal receipt must be attached to the form. The names of the individuals attending the meal, along with their affiliation with the University, and the business purpose must be written on the form or receipt. “Business Meeting” is not a valid business purpose; need to include the general topic of discussion. Only reasonable tips (15-20%) will be reimbursed. Tips in excess of 20% are considered personal expenses and are not reimbursable.
Reimbursement for mileage that is not travel related
The University permits the auto mileage allowance published annually by the IRS. The rate is available on the IRS website or from the Accounts Payable office. A Mileage Log and Reimbursement Request showing the dates, destination, and mileage incurred or a mileage calculation from MapQuest, along with the business purpose for the trip is required. Employees are reimbursed for workday travel in excess of regular round-trip commute from home to St. Mary’s University. Departments who reimburse mileage for work-day automobile travel should maintain records of the employee’s round-trip commute to ensure accurate calculation of the reimbursement. Traveler must carry at least the minimum legal limit of liability insurance required by law when using personal vehicle for University business.
Reimbursement for supplies or materials purchased under the PO requirement of $1,000
For reimbursements of supplies or materials under $1,000, the original receipt must be attached to the Check Request Form, and required approvals obtained.
Reimbursements should not be requested for the following. These purchases should be made using the purchasing process as described above.
Payment for services
Payment for technology related equipment and software
Other purchases $1,000 and over
Reimbursements are approved by individuals with the proper budget authority and are issued to the individual that has incurred the expense. The approval cannot be by the individual requesting the reimbursement. The individual’s Dean or VP would have authority to approve such a request.
Payment requests must be submitted to the Accounts Payable Office by 5:00 on Friday in order to be paid the following Friday. To ensure prompt payment and to avoid late-payment penalties, all invoices should be mailed directly by the supplier to the Accounts Payable Office. Vendor invoices will be paid according to the terms or due date noted on the invoice. For vendor invoices with no terms or due date listed on the invoice, the net terms of 30 days that is listed on the Purchase Order will be followed. For other payments such as employee reimbursements, memberships, registration fees, etc… where the payment is required prior to receiving the good or service, the check will be issued on Fridays, for requests received the previous Friday by 5 p.m.
Conflict Of Interest
As stated in the University’s Code of Business Conduct, “Employees must disclose to their immediate supervisor any financial or other relationships with suppliers, agencies or competitors they may have and the reasons they believe such a relationship does not violate this Code. In making such a disclosure, employees must follow this code as well as guidelines contained in the University’s Personnel Manual . . . After such a disclosure is made, the situation will be reviewed by the supervisor and appropriate University Officer and a decision will be made in writing as to whether the disclosed item constitutes a conflict of interest and requires a waiver of the Code, termination of the activity, or disciplinary action. Because of the possibility of severe consequences, employees are encouraged to request pre-clearance on any potential conflicts of interests prior to engaging in the relationship or transaction.”
University Procurement Procedures for Purchases made with Federal Funds
Ensure that contractors perform in accordance with the terms, conditions, and specifications of their contract.
Comply with University’s Code of Conduct.
Avoid acquisition of unnecessary or duplicative items.
Consider consolidating or breaking out procurements for a more economical purchase.
Analyze use of a lease purchase, where appropriate.
Consider using state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services.
Consider federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.
Use ‘value engineering’ (systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost) clauses in construction contracts of sufficient size.
Award contracts only to responsible contractors “possessing the ability to perform successfully under the terms of a proposed contract”, and consider a contractor’s integrity, compliance with public policy, record of past performance, and financial technical resources.
Maintain records sufficient to detail the history of procurement. These records should include, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
Use time and material contracts only after a determination that no other contract is suitable. Contracts must set a ceiling price that the contractor exceeds at his own risk. Time and materials means a contract whose cost to the University is the sum of:
The actual cost of the materials,
Director labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit.
The University must assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. The University alone must be responsible, in accordance with good administrative practice and sound business judgement for the settlement of all contractual and administrative issues arising from a procurement.
Competition (2 CFR 200.319)
All procurement must be conducted in a manner that provides full and open competition. Situations considered to be restrictive of competition include:
Placing unreasonable qualifying requirements on firms
Requiring unnecessary experience and excessive bonding requirements
Noncompetitive pricing practice’s between firms or affiliated companies
Noncompetitive contracts to consultants that are on retainer contracts
Organizational conflicts of interest
Specifying a “brand name” instead of allowing for “an equal” product consideration
Any arbitrary actions
All solicitations must:
Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured.
Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.
The University must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition, and not preclude potential bidder from qualifying during the solicitation period.
Methods of procurement to be followed (2 CFR 200.320)
The University must use of the following five procurement methods:
The acquisition of supplies or services where the aggregate dollar amount does not exceed $3,000 (or $2,000 in the case of acquisitions for construction subject to the Davis Bacon Act).
To the extent possible, distribute micro-purchases equitably among qualified supplies.
May be awarded without soliciting competitive quotations or a cost/price analysis if the University considers the price to be reasonable.
The acquisition of supplies or services where the aggregate dollar amount does not cost more than the Simplified Acquisition Threshold. (Set by Federal Acquisitions Regulation at 48 CFR Subpart 2.1). This amount is $150,000.
If the small purchase procedures are used, price or rate quotations must be obtained from a minimum of two of qualified sources.
Sealed bids (formal advertising).
Purchases costing more than $150,000.
Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, confirming with all the material terms and conditions is the lowest in price.
Preferred method for procuring construction, if following conditions are met:
A complete, adequate, and realistic specification or purchase description is available,
Two or more responsible bidders are willing and able to compete effective for the business, and
The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
If sealed bids are used, the following requirements apply:
The invitation for bids will be publicly advertised and bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening bids.
The invitation for bids must define the items or services in order for the bidder to properly respond.
All bids will be publicly opened at the time and place prescribed in the invitation for bids.
A firm fixed price contract will be in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually take advantage of.
Any or all bids may be rejected if there is a sound documented reason.
Purchases costing more than $150,000.
Normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. Used when conditions are not appropriate for sealed bid.
Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any responses must be considered to the maximum extent practical.
Proposals must be solicited from an adequate number of qualified sources.
Must have a written procedures for conducting technical evaluations of the proposals received and for selecting recipients.
Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.
May use competitive proposal procedures for qualifications-based procurement of architectural/engineering professional services and in these cases price cannot be sued as a selection criteria
Procurement through solicitation from only one source, and can only be used if:
The item is available only from a single source,
The public exigency or emergency for the requirement will not permit a delay resulting from completive solicitation,
The Federal awarding agency authorizes the purchase, or
After solicitation of a number of sources, completion is determined inadequate.
Suspension and Department (2 CFR 200.212 & CFR 180.220)
The University cannot conduct business with a company that has been suspended or debarred. This includes procurement contracts for goods and services that are expected to equal or exceed $25,000. The University is required to verify that the vendor is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished through the SAM.gov website. https://www.sam.gov/portal/public/SAM/.