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PURCHASING BASICS Department of Purchasing Revised 11/11/13

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Presentation on theme: "PURCHASING BASICS Department of Purchasing Revised 11/11/13"— Presentation transcript:

1 PURCHASING BASICS Department of Purchasing Revised 11/11/13

2 Purchasing Basics Provide and discuss information about Purchasing laws, policies and procedures. Provide a better understanding of the Purchasing process. Central Purchasing Staff and Responsibilities can be found on the Purchasing Web Page at : Provide and discuss information about Purchasing laws, policies and procedures. Provide a better understanding of the Purchasing process. Central Purchasing Staff and Responsibilities can be found on the Purchasing Web Page at :

3 Index Purchasing Authority Duties and Responsibilities Accountability
Sustainability Violation of Purchasing Policy Procurement Card On-line Purchasing Procedures Small Purchasing Authority Requisitions Should Contain Straight Disbursements Competitive Sealed Bid Competitive Negotiation Price Contracts Blanket Orders Receiving Procedures Ethics in Purchasing Central Stockroom Purchases Office Supply Purchases Moving Policy Fleet Fueling Program Recycled Material Procurement Vehicle Rental Printing Federal Debarment Purchasing Forms

4 Purchasing Authority (Statutory)
KRS 164A.560, allowed public institutions of higher education and their affiliated corporations to perform the functions of acquisition of funds, accounting, purchasing and capital construction by regulation. The University operates under KRS 164A A.840 and the Model Procurement Code KRS 45A.005 through 45A.470. The Board of Trustees has delegated purchasing responsibility to the Director of Purchasing by board resolution. The Director, Associate Directors, Assistant Directors, Purchasing Manager, and Buyers in Purchasing are authorized to sign contracts on behalf of the University. Department signs as “Recommended By” Only. Purchase Orders are contracts.

5 Purchasing Duties and Responsibilities
Purchasing oversight of all equipment, supplies and services for the University. Execution of equipment rental and lease agreements. Adherence to state statutes and administrative regulations. Practice sound purchasing policies resulting in economical procurement under fair and competitive conditions. Maintain good working relationship with our vendors so issues of price, delivery and quality can be resolved. Disposal of Surplus Property via Competitive Bid or Auction. Operation of Central Receiving, Stockroom, Inventory Control, and Asset Management.

6 Accountability Internal Audit - every 2 or 3 years.
External Audit - annually

7 Sustainability Green Purchasing minimizes negative environmental effects through the use of environmentally friendly products. Environmentally Preferable Purchasing or Green Purchasing (GP) refers to the procurement of products and services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose. This comparison may consider raw materials acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance or disposal of the product or service. To learn more about Purchasing and Sustainability visit our web page at

8 Violation of Purchasing Policy
Faculty and staff who violate purchasing policies or otherwise act outside of their authority, do so at their own personal risk. Purchases made without proper authority may become binding upon the University only upon ratification by the Director of Purchasing. If the purchase is not ratified by the Director Of Purchasing, the obligation remains the personal obligation of the person making the purchase. Use of the University tax exempt number is for University purchases only. Tax exempt form can be printed off the web, completed and mailed or faxed to vendor.

9 Procurement Card (ProCard) Program
The ProCard program allows departments the opportunity to use a University credit card to purchase goods and services. The University benefits by having a more efficient, cost-effective method of purchasing and payment for small dollar transactions. If a department decides it is appropriate for their use and would like to participate, the cardholders shall be expected to follow the established guidelines and shall be held accountable for use of the card. The program complements the existing purchasing and payment process. Use of the card does not replace current travel or competitive bid regulations, nor does it allow departments to bypass Purchasing policies and procedures. For more details, visit the ProCard website:

10 On-Line Purchasing Procedures
PeopleSoft Training Manuals for Purchasing Inquiry, E-pro Requisition Entry, E-pro Receiving, Change Request, and Return to Vendor Data Entry can be accessed on the IT Web page at: WorkFlow is utilized to process requisitions and purchase orders. If requisitions have sufficient funds and pass budget checking, they will be routed to the department approver, and then to the appropriate Buyer. Department Approver, then Buyer will receive an automatic Groupwise notification that a requisition is ready for approval.

11 On-Line Purchasing Procedures
Approval Options : Recycle Deny Approve Departments are responsible for requisition entry Buyers are responsible for requisition approval. The comments panel of the requisition should be used by departments and Purchasing to provide an audit trail for the requisition. Send to Vendor – information prints on Purchase Order; Show at Receipt – Final destination information; and Show at Voucher – for Accounts Payable.

12 On-Line Purchasing Procedures (Continued)
Buyer Options for processing requisitions Small Purchase authority Price Contract Quotation Sealed Bids RFP (Request For Proposal)

13 Small Purchase Authority
The Requisition is reviewed and updated with any necessary changes and approved by the Buyer. Buyer recycles, approves or denies the requisition. An automatic process (POBUILD) converts the requisition to a purchase order. Printed purchase orders will be reviewed by the Buyer and mailed, faxed, or ed to the Vendor.

14 Requisitions Should Contain the Following:
Suggested Vendor(s) and Address Correct Category, Speedtype, and Origin Accurate and complete Deliver To Address Quantity (How many?) What is shipping unit (case, each, dz) Unit Cost of Item Description specific enough so that Purchasing/Vendor will know exactly what you want and when. Complete descriptions and/or detailed specifications in the event bids or quotations need to be solicited.

15 Requisitions Should Contain the Following:
Additional information or unusual circumstances about the purchase that make it non-routine; i.e. single source justification, vendor quotation, etc. Appropriate use of Unit of Measure, Quantity, Amount, Item Description Successful budget check Any necessary comments pertinent to the requisition Department approval

16 Straight Disbursements
A straight disbursement is used when the purchase meets the necessary criteria. Straight Disbursement forms as well as a list of expenses used on a request for Disbursement Form can be printed from the Controller’s Office web page at:

17 Purchase By Competitive Sealed Bid
Purchasing Policy Can be found on the Purchasing Web page at the following address: The University is required by law to solicit formal Invitations to Bid for commodities and services, including construction >=$40,000. The buying staff has been given the discretion to determine the method of procurement for purchases under $40,000, using the value added principle. Buyers can add value to a procurement in the form of: More competitive price Better quality Shorter delivery time Improved terms and conditions Participation by Minority or Woman-owned firms Buyers will initiate the appropriate action such as competitive quotes. Continued on next slide

18 Purchase By Competitive Sealed Bid (Continued)
Bids have a specific opening time and are publicly opened and read. Bids are tabulated and ranked in accordance with applicable evaluation criteria. Departments cannot split or parcel purchases over a time period for the purpose of evading competitive bidding, per KRS 45A.100.

19 Purchase By Competitive Negotiation
Purchasing Policy 7.00 Can be found on the Purchasing Web page at the following address: Purchasing Officer determines in writing that the use of competitive sealed bid is not practical. Some of the reasons: Inability to write detailed specifications Price is not the main factor in awarding a contract Need for vendor’s expertise to accomplish desired outcome Examples: Food Services, Bookstore Services, Insurance A Request for Proposal is the document used to facilitate a competitive negotiation Standard time to allow responses is 30 days No public bid opening, all responses and negotiations remain confidential until a contract is awarded.

20 Price Contracts Purchasing Policy 9.00
Can be found on the Purchasing Web page at the following address: Price Contracts are established to obtain competitive price and prompt delivery of products used frequently. Awarded as result of competitive bid or negotiations Usually established for a period of one year with renewal options. It is the policy of Purchasing to purchase from price contract vendors when products qualify and prices are consistent with specifications supplied by the ordering department. A list of current price contracts can be found on the Purchasing Web Page

21 Blanket Orders Blanket orders are paid on a continuing basis as invoices are approved for payment. Example of purchases that blanket orders are used for: Rental Maintenance of equipment Dry Ice Radio pagers Animal Food Scientific and Laboratory Supplies Department must initiate requisition to encumber sufficient funds for current fiscal year. Requisition must state the period of time the order is to cover. Blanket orders on general funds will close on June 30.

22 On-Line Receiving Purchasing Policy 17.00
Can be found on the Purchasing Web page at the following address: PeopleSoft Training Manuals for Purchasing Inquiry, E-pro Requisition Entry, and E-pro Receiving can be accessed on the IT Web page at:

23 When the Department Receives
Receipts should be entered into PeopleSoft immediately after receipt of merchandise or performance of services, never prior to receipt. Timely entry of accurate information is essential for prompt payment. A Return to Vendor must be entered for any discrepancies immediately, and in no case more than (5) days after receipt of material. If receiving equipment, contact Inventory Control to tag. Have the PO# and/or Receipt Number. Questions: Please call or

24 When Central Receiving Receives
Central Receiving personnel will check product/item against purchase order and prepare a delivery manifest. A delivery manifest is signed by department when material is delivered. Central Receiving personnel will enter receiving data on-line in PeopleSoft. Central Receiving personnel are not responsible for unpacking, uncrating, assembling or installing delivered items. Any questions, please call

25 Duplicate Shipments/Receipt of Incorrect or Defective Goods
Purchasing Policy 18.00 Can be found on the Purchasing Web page at the following address: It is the departments' responsibility to process a Return to Vendor in PeopleSoft for any duplicate shipments, or incorrect or defective goods that are delivered to them. Department will pack material for return, print out Return to Vendor form, and notify appropriate carrier for pick up of goods.

26 Ethics in Purchasing (Gratuities)
Purchasing Policy 4.00 Can be found on the Purchasing Web page at the following address: Buyers of goods and services for the University of Louisville, shall not take, receive or offer to take or receive (directly or indirectly) any rebate, percentage of contract, money, (or other things of value) as an inducement (or intended inducement) from any vendor bidding for University purchase contract(s) or otherwise seeking to make sale to the University. The Purchasing Department adheres to the National Association of Educational Buyers Code of Ethics.

27 Purchases From Central Stockroom
Purchasing Policy 28.00 Procedures for ordering items from Central Stockroom can be found on the Purchasing web page at the following address:

28 Purchase of Office Supplies
Purchasing Policy 26.00 Can be found on the Purchasing Web page at the following address OfficeMax is the primary office supply vendor for the University An OfficeMax Welcome Guide is available. This guide contains useful information on how to process orders, returns, etc. Three options for order placement Internet Order – Phone Order – PeopleSoft Order – PO will be sent electronically OfficeMax representative is Jason Turner,

29 Moving Expense Policy Purchasing Policy 32.00
Can be found on the Purchasing Web page at the following address: University has established a contract with Allied Van Lines/ Berger Transfer Storage Inc. Departments complete an authorization to move form found at: (Employee move) (Office/Lab move) Payments are made by the Department of Purchasing and reallocated back to the authorizing department.

30 Gasoline Fleet Fueling Program
Purchasing Policy 13.00 Can be found on the Purchasing Web page at the following address: The University has a contract with Fleet One Program for vehicles owned by the department Fuel access cards are vehicle specific Procedures for Fleet Fuel Program: To obtain a Fuel Card / Pin # :

31 Recycled Material Content Procurement
Purchasing Policy 31.00 Can be found on the Purchasing Web page at the following address: A minimum recycled material content is required for specific goods, supplies, equipment, materials and printing. Example: paper and office supplies made from paper require a minimum of 50% recovered material and 10% post consumer waste. The University sends an annual report to the General Assembly and the Governor of Kentucky each December showing recycled purchases. Vendors are required to complete a Certification of Product Content prior to contracting.

32 Vehicle Rental Purchasing Policy 27.00
Can be found on the Purchasing Web page at the following address: The University has a current contract with Enterprise Rental Vehicles rates can be viewed on the Purchasing Web page at the following address: The Enterprise account rep can be reached at phone

33 Printing Purchasing Policy 37.00
Can be found on the Purchasing Web page at the following address: Per Kentucky law, all University printing must be done in-house (IT Printing) or under established contract. First Right of Refusal – IT Print makes a determination if job will be done in-house or sent to an approved vendor. All printing contracts must be approved by the Governor of the Commonwealth of Kentucky.

34 Federal Debarment Purchasing Policy 35.00
Can be found on the Purchasing Web page at the following address: Prior to contract award, the Department of Purchasing shall ensure that the successful vendor is not debarred from doing business with federal agencies. Sanction checks will be performed and at Renewal times also. Sole source purchases, and departmental agreements >$25,000 will require a sanction check.

35 Purchasing Forms Can be found on the Purchasing Web page at the following address: Examples: Capital Lease - application for master lease MOVING (Employee Move) MOVING (Office/Lab Form) New Vehicle Request Procurement Card Forms Personal Services Contract Forms / PSC Invoice Form Stores Requisition Component Purchases Equipment purchased on procurement card Resident Bidder Status Construction Invoice / Change Order / Employment Utilization Report

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