PURCHASING POLICIES AND PROCEDURES
Georgia Code 50-5-51 gives procurement authority to the Department of Administrative Services (DOAS). Included is the authority to contract for the rental, lease, purchase or other acquisition of all supplies, materials, services (other than professional and personal employment services) and equipment required by the state government or any of its institutions, to contract for telephone services, have general supervision over all storerooms and to contract for state printing.
Board of Regents policy manual states “The University System shall
utilize the sources of the central purchasing agency for the State of
State Purchasing Office (SPO) has delegated general purchase authority not to
exceed $100,000 (for E&G funds) to the Procurement and Contract Services
The Purchasing Section is established to manage the procurement of supplies, materials, equipment and contractual services for the University. It has the responsibility for preparing, negotiating, executing, awarding and administering all contracts other than some personal service and all Public Works contracts. Further, it serves to coordinate the University’s procurement activity with appropriate State agencies. In addition to state statutes, the University adheres to policies established by the Board of Regents of the University System of Georgia, the University and recommendations furnished by the state and internal auditors.
Specific service goals of the department are to define economies, assist in the planning of purchases, develop standard specifications and reduce administrative costs and inventories.
The University budget establishes funds to be used for certain purposes under the authority of the designated budget head that has the primary responsibility for approval of all purchases charged against their accounts. The budget head may delegate this authority to other persons by memorandum to the Purchasing Section of Procurement and Contract Services.
The requisition form is the primary vehicle used to initiate a purchase for a department. Specifications must be provided by the department and must be specific enough in order to indicate to vendors what it is that the department is looking for. Departments are discouraged from simply attaching a catalog page from a particular vendor. Using another products specification as minimum specifications may be considered as “lock-out” specifications and therefore considered unlawful. It is possible to reference another product as “meeting desired minimum technical and quality levels”.
The Purchasing section is committed to completing departmental purchases in a timely manner. Many factors determine the time to complete a purchase including, but not limited to: state procurement regulations, buyer workload, commodity purchased, availability of funds, vendors, time of year and other contract considerations. The following lead times (from receipt of requisition to issuance of purchase order) are considered to be necessary to ensure that procurements can be completed correctly and within established regulations:
a. Bids ($5,000 and greater and not otherwise exempted) 30 working days
b. Sole Source/Sole Brand 10 working days
c. Open Market purchases ($4,999.99 and less) 7 working days
d. Contract Releases (purchased against state or agency contracts) 10 working days
The authority to commit University funds for supplies, materials, equipment and certain contractual services has been delegated to the Procurement and Contract Services Department within limits established by the Department of Administrative Services, State Purchasing Office. This policy of purchasing centralization provides for economies and efficiencies.
University departments are currently delegated authority up to $5,000 per transaction. Purchases must comply with other regulations as indicated elsewhere within this document. Departments may not “split” purchases to avoid this transaction limit. Purchases by departments which do not conform to regulations and policy may be determined to be “unauthorized purchases”. When such a purchase is detected, the appropriate Department Head shall be notified in writing and an explanation requested as to the circumstances surrounding the violation. A final determination shall be made by the Director of Procurement and Contract Services.
The Department of Procurement and Contract Services is a service unit, and in order to be of the most benefit to the University, is largely dependent upon the cooperation and assistance of all University units, offices and departments. In order to define the relationship between the Department of Procurement and Contract Services and other University units, offices and departments as definitely as possible, the following governing practices are set forth:
· Only Procurement and Contract Services should formally solicit quotations from vendors. Departments are encouraged to contact vendors for informal quotations or budget pricing. All vendor pricing obtained should be submitted to Procurement and Contract Services when submitting a requisition.
· The Procurement and Contract Services Department should conduct all correspondence with the State Purchasing Office (SPO).
· All formal correspondence with vendors should be either handled through or pre-approved by the Procurement and Contract Services Department. Formal communications is defined as those which obligate either the vendor or the University to specific contractual actions. This is particularly true once a solicitation to bid is in process. Again, departments are encouraged to seek technical advice and product availability information directly from vendors.
· The degree of success that Procurement and Contract Services Department has is dependent upon receiving timely information from departments concerning upcoming events and requirements. This allows us to be proactive versus reactive. We encourage departments to:
¨ E-mail or telephone us advising of upcoming projects or needs
¨ Seek our participation in meeting with vendors
· The University seeks to deal fairly, consistently and openly with all vendors in the spirit of cooperation. There are situations, however, where the bargaining position of the University could be compromised when vendors receive information regarding orders, prices or future plans. Departments should refrain from revealing information not absolutely necessary.
· Contact the Purchasing Section when solicited by a vendor offering a suspicious “good deal”. This office is in contact with other Purchasing offices throughout the country and often has knowledge of scams in progress.
· Departments contemplating accepting equipment on a “trial” basis should contact Procurement and Contract Services first. Vendors, and sometimes departments, may need to be made aware of certain risks or obligations especially with regards to risk management and liability issues.
· Relationships with vendors should be kept on a business like basis. Refrain from accepting any gifts and especially those of greater than nominal value.
· Keep the Purchasing Section notified of pertinent information relayed by vendors such as potential or actual price increases, new products etc. This is especially true if the vendor indicates a price change during the term of a contract.
· Departments are cautioned against signing any agreement or contract. Agreements or contracts signed by personnel without the requisite contracting authority are illegal contracts and the person signing may assume personal liability.
· In order to administer a contract, it requires a joint effort between Purchasing and the user department(s). Close coordination and communication is the key.
Under competitive bidding, the award should be made to the vendor offering the lowest price for materials or services meeting the required specifications. Quality and service standards in specifications must, therefore, be adequately defined.
Three primary methods are used to obtain goods and services:
a. purchase orders
b. *petty cash (administered by Accounts Payable)
c. *Purchasing card
* denotes purchasing methods delegated to departments at established levels.
The general dollar value limits listed below are either delegated by DOAS or established by University policy:
$1,000 or less Limit for use of Petty Cash (minimum reimbursement of $50)
$4,999.99 or less Level for taggable equipment (plus all computers and weapons)
$4,999.99 or less Limit for departmental purchases and P-Card limits
$5,000 and greater Capitalized assets (depreciable assets)
$5,000 and greater Level requiring competitive solicitation
$100,000 Sealed Bid limit
The University also maintains Agency contracts which are unique to Georgia Southern University. Examples include janitorial supplies, security services, bus charter and food supplies.
The precedence for using these mandatory sources are: Statewide Contracts, Agency Contracts and then Georgia Correctional Industries. Off-contract purchases should only be made where the desired good or service is not carried under a contract indicated above. These mandatory sources of supply apply to departmental purchases (Procurement Card) as well as those submitted through Procurement and Contract Services.
The Procurement and Contract Services Department is responsible for administering the many Statewide contracts issued by DOAS and used by the University. Many of these contracts are mandatory sources of supply (Statewide Contracts, Georgia Correctional Industries) and must be used before soliciting other vendors. Additionally, depending upon need, the Procurement and Contract Services Department will enter into contracts with vendors for repetitive items and/or services in support of the campus department’s mission (Agency Contracts). The use of supply contracts and blanket orders usually improve the University’s position with regards to price and delivery and are encouraged whenever feasible. Departments having repetitive needs for certain commodities are encouraged to contact Purchasing regarding the possibility of establishing an annual contract.
Southern University, as a unit of the State of
It is unlawful (Georgia Code 50-5-80) for the University to make purchases for the personal use of its employees. The Board of Regents manual further states that
“employees of the University System shall not purchase goods or services through channels used in the purchase of goods and services for the operation of the University System."
Some items, the nature of which indicates that their end-use is more personal than official are prohibited from purchase without prior approval of the Procurement and Contract Services Department. These items include but are not necessarily limited to: holiday decorations, cut flowers, coffee makers, entertainment and/or refreshments, portable table radios, watches, ground-breaking shovels and other items to be granted as a donation or gratuity in favor of a person, corporation or association, employment agency placement fees, greeting cards, trophies and other awards and shoes.
If a department routinely buys items listed above (for example: Catering buying flowers for official functions), then it should submit an exemption request via memo to the Purchasing Office. We will respond in writing keeping a copy of your request on file for audit purposes.
using funds derived from contracts, grants or gifts are subject to State of
Emergency situations include the following:
Should an emergency arise during normal working hours, contact the Purchasing Section by phone as soon as possible. A member of the staff will review the situation with you and make a decision on the appropriate course of action. The Purchasing Section is required to report to DOAS all emergency purchases so it is imperative that this office be notified immediately.
Should an emergency take place after hours, weekends and/or holidays, the department should make the purchase or acquire the services. If necessary, the department can furnish the vendor with their VISA card number or advise the vendor that Purchasing will contact them the next work day with either a purchase order number or a VISA card number. Departments must contact the Purchasing Section on the next working day. Proper follow up action will be discussed and taken at that time.
Two of the more closely audited items during a purchasing audit are the use of sole source and sole brand procurements. Both of these are heavily regulated by the state and require certain minimum justifications as indicated below.
Sole source simply means justifying that only one company can provide the good or service that is being requested. Justifications must address the following:
o Exclusive source can furnish services because of its previous experience with the University and hiring another source would result in excessive cost to the University. The excessive cost must be quantified. Simply stating that a vendor “did a good job before” is not justification for sole source.
o Exclusive source has unique technical competence or expertise. Explain.
o Exclusive source possesses patents or other exclusive rights to the item being furnished. Provide documentation.
Sole source may not be used as an attempt to contract with a favored service provider or a favored product (see Sole Brand). This is perhaps the largest abuse of sole source in purchasing and carefully scrutinized by the audit staff.
While sole source refers to only one vendor being able to furnish the goods or services, sole brand does not necessarily limit competition. A common justification for sole brand involves “standardization” meaning the item must match existing items. For example: uniforms or scientific lab equipment where training, spare parts and maintenance are issues involving which brand to buy and reduced costs to the University.
Departments desiring to purchase an item or services under sole source and/or sole brand justifications must complete the sole source and/or sole brand form found in the forms gallery on our web page. A member of the purchasing staff will review it to ensure all the above minimum requirements are met. If not, it will be returned to the department. If additional sources or brands meeting specifications are found, purchasing will issue the solicitation as a competitive bid.
Effective 2005 all Sole Source and Sole Brand procurements must be posted on the Georgia Bid Registry for a minimum of three business days before an award may be made. If a legitimate challenge is made to the Sole Source or Sole Brand then a competitive bid must be prepared and the competitive process followed.
The following commodities require special procedures and/or approvals. Departments having need of the following should contact the Purchasing Section for further details.
Printing Services: The printing service functions usually begin at the point that edited copy and finalized artwork are ready for submission, either as camera-ready copy or digital files. These services may include:
· Various design services
· Preparation of impressions by specified press type, offset, web, photocopy machine etc.
· Cutting, collating, folding, binding, packaging and other after-impression services
· Shipping or direct mail services.
Printing Specifications: Complete and accurate specifications are required for all printing requests, whether or not the Purchasing Section processes the request. Given the present situation of changing technology, there is no substitute for consultation in the preparation of printing specifications. The Purchasing Section and the Design Section of Marketing and Communications are available for assistance. At times, printing suppliers may also be called upon for advice. The outline below is provided as a guide for the preparation of your specifications.
Recycled Fiber Content: The University is required by law to purchase a percentage of their printing paper from recycled stock and report these percentages to DOAS. To assist in meeting this goal, customer departments are requested to indicate what percentage of recycled stock is acceptable. If not indicated, the Purchasing Section will assume 50% recycled fiber content is acceptable.
Standards Review: All printed material for which specifications were prepared solely within the originating department and is intended for off-campus distribution should be forwarded to Marketing and Communications /Design Services prior to submission to the Purchasing Section, for review of content and style to ensure that it meets the established University standards.
Printing Specifications Outline
Professional Services do not include the following:
· Advertising and advertisements
· Chemical Analysis
· Interior Decorating
o. Consulting Agreements: Consulting agreements are now handled in Procurement and Contract Services. These agreements are not considered by the State to be a professional service and are therefore subject to the Georgia Procurement Code meaning that agreements of $5,000 or greater must be either competitively bid or declared a Sole Source purchase. Departments wishing to procure the services of a consultant need to follow the procedures and guidelines indicated below:
Consulting agreements will fall under one of three categories:
· Consulting agreements up to $4,999.99:
o Do not require a written agreement. If the vendor, however, requires their own written agreement to be signed, the agreement/contract must be forwarded to Procurement and Contract Services or Legal Affairs for review. The terms and conditions of this agreement may be objectionable or in conflict with those contained on the Per Diem and Expense Form.
o May be done within departmental purchasing authority and do not need to come through Procurement and Contract Services
o Do not require encumbrance of funds on a purchase order
o May be paid on a per diem and expense form sent directly to Accounts Payable.
· Consulting agreements $5,000 and greater
o Require a written agreement.
o Require an encumbrance of funds on a purchase order
o Require either competition (a bid) or a sole source justification from the department as to why this consultant is the only one qualified to do the work.
o Departments should send a requisition citing funds as well as a “scope of work” and sole source form, if applicable, to Procurement and Contract Services.
o Procurement and Contract Services will draft and release a bid and/or written contract and a purchase order to the vendor.
o (*) Services are to be paid against the encumbrance on the Purchase Order therefore a Per Diem and Expense Form will not be used to pay for the services.
(*) Note: Language contained in the terms and conditions on the Per Diem and Expense Form may not agree with terms and conditions contained in the written agreement prepared by Procurement and Contract Services. It is imperative that these two documents not be used together.
p. Used Equipment. The Georgia Procurement Manual does allow for the purchase of used equipment/goods. As antiques are not separately covered, they are covered as used goods. In order to purchase used goods, the goods must be examined by “qualified personnel who will furnish a written certification as to the condition and value to the agency. This certification should include good working condition for intended use and price comparisons to comparable used equipment.”
Georgia Southern University participates in the statewide procurement card program. This card is essentially a commercial VISA card issued through the Bank of America. The University has strict guidelines regarding the use of this card and the procedures associated with its use. Cardholders become authorized purchasing agents up to certain limitations and are required to follow specific rules regarding the expenditure of public funds. Card limits are normally $4999.99 per transaction and monthly limits are set based upon department head recommendations. There are specific requirements regarding monthly submittals of charge slips, the ongoing maintenance of records and the safeguarding of the use of the card. Procurement and Contract Services requires cardholders participate in a training session prior to receipt of their cards. Individuals desiring a card must complete an application and have their department head approve it and forward to Procurement and Contract Services. Use and procedures for the Purchasing Card are covered in a separate area on our website.
Solicitation for and issuance of contracts for the maintenance and servicing of University equipment shall be the responsibility of the Purchasing Section. Maintenance contracts will be negotiated on new equipment as it is acquired and will be renewed annually on existing equipment as requested and/or approved by the Department Head. Renewals are NOT an automatic procedure. Annually, the Purchasing section will issue a contract renewal notification to all departments currently having annual contracts.
Occasionally it is necessary to amend the original purchase order because of change in quantity, specifications, price, substitute products or any number of other corrections brought about by changing plans or requirements. Because amended purchase orders alter an existing contract between the University and the vendor, they can only be issued with the agreement and consent of the vendor. Sometimes it becomes necessary to compel a cancellation upon a vendor when in the best interests of the University. These actions should not be taken lightly and they are often harmful to good vendor relations.
Purchase order changes and cancellations will be issued from the Purchasing Section after consultation with the user department. The following are circumstances that may justify a change order or cancellation:
a. Overshipments: When more material is received than ordered, Purchasing will first contact the department to determine if they wish to keep the additional quantities. Should they decide to do so, the departments will be charged for the additional quantities.
b. When price changes occur .
c. Department requests for additional quantities or items from same vendor prior to shipment and receipt of original order. Department should contact the buyer indicated on the original purchase order.
The Purchasing Section will routinely follow-up on outstanding orders. Unless specifically requested by a department or the need becoming apparent otherwise, the Purchasing Section will not routinely expedite (change to provide for an earlier delivery date) orders.
Procurement and Contract Services operates a Central Receiving function that is responsible for the receipt, inspection and delivery of materials on campus. It is the policy of the University to consign most goods to Central Receiving for further delivery to the departments. Further details can be obtained on the Procurement and Contract Services web page.
Department Heads are responsible for ensuring their departments maintain their own files relating to purchases. These files must include a copy of the requisition, a copy of the resulting purchase order or contract and any pertinent or significant correspondence. Upon receipt of an issued purchase order from the Purchasing Section, departments should compare this to their requisition to ensure that the purchase order matches what they intended to order. Discrepancies should be brought the attention of the Purchasing section immediately.
In March of 2004 the University started issuing Wright Express fuel cards. These cards are unique to a particular University vehicle and NOT an individual. These cards may be used at participating stations to purchase fuel, automotive supplies and minor maintenance. The use of the Wright Express card instead of other credit cards (personal credit cards, corporate American Express) is that the Wright Express card automatically deducts taxes for which the University is exempt. In order to use the Wright Express card, the individual operator must have a Personal Identification Number (PIN) number assigned. The Fuel Authorization Form on our web page may be used to request a PIN. Persons or departments desiring additional information on the Wright Express card may contact the Purchasing Section for details. Currently the Wright Express card is to be used only secondary to the on campus fueling station. Its primary use is for out of town travel or during periods when the campus fueling station is inoperable.
Departments may make direct purchases from vendors for immediate needs of not more than $1,000.00 per purchase per vendor per day. It is the University’s policy that such direct purchases may only be made when payment in full is made at the time and initial point of delivery. Departments may not make direct purchases and request that an invoice be sent.
Restriction on purchases are essentially the same as for other methods of purchase. (See page 5 for items resembling personal purchases).
Payment to the vendor may be made in cash from personal funds or in cash from funds temporarily withdrawn from a departmental petty case fund. If required by the vendor, University personnel must provide a tax exemption certificate at the time of purchase. These forms are available from our Purchasing Section or from our web site. Under “Forms”.
Cash purchases may be reimbursed to an authorized employee or departmental agent with the submission of a Petty Cash Sales Slip Transmittal Form with the receipts attached. With one exception (cash register receipts), all receipts submitted for reimbursement to the employee (any by departmental petty cash funds custodians for reimbursement to the fund) should have the following characteristics:
Reimbursement for cash purchases (and replenishment of departmental petty cash funds) is made in the form of a University check. Reimbursement can take approximately two (2) weeks. Due to processing costs, Petty Cash Sales Slip Transmittals will only be processed if they total $50.00 or more. Accounts Payable may make an exception to this policy if a receipt would have to be held by University personnel over thirty days before additional purchases would be made to total $50.00. A written statement explaining the circumstances should be submitted explaining the circumstances.