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 BasicsProvide 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 SustainabilityViolation of Purchasing PolicyProcurement CardOn-line Purchasing ProceduresSmall Purchasing AuthorityRequisitions Should ContainStraight DisbursementsCompetitive Sealed BidCompetitive Negotiation Price ContractsBlanket OrdersReceiving ProceduresEthics in PurchasingCentral Stockroom Purchases Office Supply PurchasesMoving PolicyFleet Fueling ProgramRecycled Material ProcurementVehicle Rental PrintingFederal DebarmentPurchasing 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 ofprice, 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 SustainabilityGreen Purchasing minimizes negative environmental effectsthrough the use of environmentally friendly products.Environmentally Preferable Purchasing or Green Purchasing(GP) refers to the procurement of products and services thathave a lesser or reduced effect on human health and theenvironment when compared with competing products orservices that serve the same purpose. This comparison mayconsider 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 outsideof their authority, do so at their own personal risk.Purchases made without proper authority may become binding upon theUniversity only upon ratification by the Director of Purchasing.If the purchase is not ratified by the Director Of Purchasing, theobligation remains the personal obligation of the person making thepurchase.Use of the University tax exempt number is for University purchases only.Tax exempt form can be printed off the web, completed and mailed orfaxed 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 theIT 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 : RecycleDenyApproveDepartments are responsible for requisition entryBuyers are responsible for requisition approval.The comments panel of the requisition should be used by departmentsand Purchasing to provide an audit trail for the requisition.Send to Vendor – information prints on Purchase Order; Show atReceipt – Final destination information; and Show at Voucher – forAccounts Payable.
12 On-Line Purchasing Procedures (Continued) Buyer Options for processing requisitionsSmall Purchase authorityPrice ContractQuotationSealed BidsRFP (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 AddressCorrect Category, Speedtype, and OriginAccurate and complete Deliver To AddressQuantity (How many?) What is shipping unit (case, each, dz)Unit Cost of ItemDescription specific enough so that Purchasing/Vendor will know exactlywhat you want and when. Complete descriptions and/or detailedspecifications 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 DescriptionSuccessful budget checkAny necessary comments pertinent to the requisitionDepartment approval
16 Straight Disbursements A straight disbursement is used when the purchase meets thenecessary 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 Bidfor commodities and services, including construction >=$40,000.The buying staff has been given the discretion to determine the method ofprocurement for purchases under $40,000, using the value added principle.Buyers can add value to a procurement in the form of:More competitive priceBetter qualityShorter delivery timeImproved terms and conditionsParticipation by Minority or Woman-owned firmsBuyers 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 thepurpose of evading competitive bidding, per KRS 45A.100.
19 Purchase By Competitive Negotiation Purchasing Policy 7.00Can be found on the Purchasing Web page at the following address:Purchasing Officer determines in writing that the use of competitive sealed bidis not practical. Some of the reasons:Inability to write detailed specificationsPrice is not the main factor in awarding a contractNeed for vendor’s expertise to accomplish desired outcomeExamples: Food Services, Bookstore Services, InsuranceA Request for Proposal is the document used to facilitate a competitive negotiationStandard time to allow responses is 30 daysNo public bid opening, all responses and negotiations remain confidential untila 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 ofproducts used frequently.Awarded as result of competitive bid or negotiationsUsually established for a period of one year with renewal options.It is the policy of Purchasing to purchase from price contract vendors whenproducts qualify and prices are consistent with specifications supplied by theordering department.A list of current price contracts can be found on the Purchasing Web Page
21 Blanket OrdersBlanket orders are paid on a continuing basis as invoices are approved for payment.Example of purchases that blanket orders are used for:RentalMaintenance of equipmentDry IceRadio pagersAnimal FoodScientific and Laboratory SuppliesDepartment 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 RequisitionEntry, 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 18.00Can 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 4.00Can 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 orindirectly) any rebate, percentage of contract, money, (or otherthings of value) as an inducement (or intended inducement) from anyvendor bidding for University purchase contract(s) or otherwiseseeking to make sale to the University.The Purchasing Department adheres to the National Association ofEducational Buyers Code of Ethics.
27 Purchases From Central Stockroom Purchasing Policy 28.00Procedures for ordering items from Central Stockroom can be foundon the Purchasing web page at the following address:
28 Purchase of Office Supplies Purchasing Policy 26.00Can be found on the Purchasing Web page at the following addressOfficeMax is the primary office supply vendor for the UniversityAn OfficeMax Welcome Guide is available. This guide contains useful information on how to process orders, returns, etc.Three options for order placementInternet Order –Phone Order – PeopleSoft Order – PO will be sent electronicallyOfficeMax 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 13.00Can be found on the Purchasing Web page at the following address:The University has a contract with Fleet OneProgram for vehicles owned by the departmentFuel access cards are vehicle specificProcedures for Fleet Fuel Program:To obtain a Fuel Card / Pin # :
31 Recycled Material Content Procurement Purchasing Policy 31.00Can 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 aminimum of 50% recovered material and 10% post consumer waste.The University sends an annual report to the General Assembly and theGovernor 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 RentalVehicles 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 FormsCan be found on the Purchasing Web page at the following address:Examples:Capital Lease - application for master leaseMOVING (Employee Move)MOVING (Office/Lab Form)New Vehicle RequestProcurement Card FormsPersonal Services Contract Forms / PSC Invoice FormStores RequisitionComponent PurchasesEquipment purchased on procurement cardResident Bidder StatusConstruction Invoice / Change Order / Employment Utilization Report