Transcript Purchasing Basics - Utah Valley University

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Why code was updated
◦ Procurement code was old
◦ Various high-profile procurement-related issues
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Update process
◦ 2012 Legislative Session
◦ 2013 Legislative Session
◦ 2014 Legislative Session
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Effective Date: May 1, 2013
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Procurement code declares Board of Regents
as Rulemaking Authority
New Regent’s policy delegates this
rulemaking authority to each institution
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Currently in Stage 3
Posted on the Policy website
New policies
◦ 241, University Procurement
◦ 242, Solicitation and Award of Procurement
Contracts
◦ 243, Small Purchases
◦ 244, Requisitions and Purchase Orders
◦ 245, Receiving Goods and Services
◦ 246, Surplus Property
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Other affected policies
◦ 204, Appropriateness of Expenditures
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Updating references to procurement policies
Updating format
Fixing some minor grammatical and syntax errors
Not changing expenditure procedures
◦ 421, Property and Equipment
 Removing Surplus section only
 Not updating format
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Split Purchases
Unethical behavior
◦ Accepting Gratuities
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Inflating contracts
Bid Rigging
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Under the Utah Procurement Code, it is illegal
to divide, split, parcel, or manipulate a
procurement, with the intent of making a
larger purchase appear to qualify as a smalldollar purchase or to avoid an established
dollar threshold.
Revocation of privileges (P-card, LPC)
Disciplinary action
Report to AG
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All individuals participating in a procurement,
including contract administration, must
adhere to the ethical requirements outlined in
the Utah Procurement Code
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Gratuities
Kickbacks
Fairness
Impropriety
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Know and obey the letter and spirit of laws,
regulations, and policies
Prevent the appearance of unethical behavior
Protect confidential information
Avoid conflicts of interest
Do not accept gifts, gratuities, or kickbacks
from vendors which may appear to influence
purchasing decisions.
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Requisitions should have a good estimated
amount
◦ No $1.00 requisitions
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Change Orders submitted through website
form
Additional items will not be added from
invoice
Analyzed to ensure compliance with policies,
procedures, and applicable contracts
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During a procurement process, no
communication with vendors
Vendors must be directed to Purchasing
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Mishandling money
Lax control environment
Personal Reimbursements
“Intentional and willful disregard by certain
employees for compliance with appropriate
practices and policies.”
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“Any expenditure external to UVU that cannot
be purchased with a limited purchase check
or purchasing card must be obtained using a
requisition through the Purchasing
Department” (Policy 204.V.A.1.g).
Sales Tax.
Lack of proper controls.
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Should only be used if the expenditure
cannot be feasibly made using an LPC, PCard, or PO as determined by FaBS and PS.
Include a detailed explanation on the check
request.
Check Requests received for reimbursement
may be sent to the VP as a violation.
◦ See Policy 204.
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Questions regarding Check Requests are
referred to Scott Wood.
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Protest on I-15 CORE Project
◦ Criteria weighting was changed to favor a vendor
◦ Evaluation factors included in the RFP were not
adhered to
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Settlement: $13 million
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Specifications shall not be unduly restrictive
or appear to favor one vendor over another
Rating criteria should be clear and concise
Rules can’t be changed during the process
Analysis on expenditures to ensure fairness
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Emergency procurements are procurements
needed due to an emergency situation
◦ Threat to public health or welfare
◦ Serious threat to the functioning of the institution
◦ Procurements made at Purchasing’s discretion
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Urgent procurements are procurements that
are needed due to a lack of planning or
circumstances beyond the control of the
requestor.
◦ All procurement policies and procedures must still
be followed.
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An unauthorized purchase is a purchase
made without following the authorized
procurement processes.
An after-the-fact purchase occurs when a
University employee places an order without
first completing a requisition and receiving a
purchase order.
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Result in duplicate payments to the vendor, for
which the department is responsible.
Result in higher costs for goods and services
Lead to significant vendor payment issues that can
result in problems for other departments on
campus.
Bypass the appropriate approval process.
Place the University at financial risk and create
potential personal liability.
Create additional, often unnecessary, work for
administrative support staff.
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Ways to Avoid Violations:
 If you have to place an order, create the
requisition right away. Work with the
Purchasing Office if you need the order
expedited.
 You must arrange a payment method BEFORE
placing an order. “I didn’t know…,” is not a
valid excuse for violating policy.
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What to do if a violation occurs:
 If a violation occurs, fill out all sections of the
Purchase Violation Form.
◦ An explanation of why policy was not followed
◦ Future corrective action
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Attach invoice and send for authorizing
signatures
Vendor is paid
DO NOT enter a requisition.
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Bid Limit
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◦ $3,000
◦ $5,000 (Construction)
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◦ $5,000
◦ $15,000 (Construction)
Advertised Limit
◦ $30,000
◦ $50,000 (Construction)
Small-Dollar Purchase
Threshold
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Large-Dollar Purchase
Threshold
◦ $50,000
Old
New
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Methods:
◦ Purchasing Card (P-Card)
 Must comply with P-Card usage guidelines
 Default Limit: $1,000 per purchase
◦ Limited Purchase Check (LPC)
 Must comply with LPC usage guidelines
 Limits: $150 and $500
◦ Requisition/Purchase Order Process
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Default limit: $1,000
Auditing process
◦ New preliminary audit report
◦ Clearer deadlines
◦ Adjustment to the point system
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Ordered using a Stores Requisition
◦ Do not mix with regular stores items
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Return documentation within five business
days
Don’t return unused checks via intra-campus
mail
Fewer violations
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Requisitions (Req) are not Purchase Orders
(PO)
◦ Orders cannot be placed with requisitions
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PO must be completed and approved before
orders are placed
Orders placed before a PO is completed and
approved are violations
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Must include all necessary information for
purchasing and vendors to understand what
is being procured
◦ Minimum specifications
◦ Product numbers and descriptions
◦ Names of individuals and Dates
 Memberships, conferences, hotels, presenters,
performers
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Reqs over the small-dollar purchase
threshold
Performed by the Purchasing Office
Quotes gathered from at least two known
vendors
Order placed with vendor providing the
lowest price
Not required if items are available through a
contract
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Requisition/Purchase Order
Invitation for Bid Process
Enhanced Procurement Methods
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Publically advertised through BidSync.com
◦ Time frame set by buyer
 Minimum ten calendar days
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Minimum specifications listed in requisition
◦ Not brand specific
◦ Not unduly restrictive
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Awarded to vendor providing lowest price
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Multi-Stage Bid (MSB)
Request for Proposals (RFP)
Multi-Year Pricing Agreement/Contract
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Requires justification
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◦ Fill out Justification for Enhanced Procurement
Method
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Equipment needed to perform specific
experiment
Specialized software needed to perform
specific function
Specialized services
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An MSB is used when potential bidders or
potential products must be pre-qualified
before requesting priced bids. Objective
criteria (pass/fail, quantitative) is used to
determine if a potential bidder or potential
product meets the minimum qualifications or
specifications needed.
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Enter a requisition.
◦ Indicate MSB in the comments field
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Fill out the Justification for Enhanced
Procurement Method
If approved, buyer will provide an MSB
Statement of Needs and Rating Criteria
document
Work with the buyer to complete the
document
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Bids performed in two stages
◦ Stage 1: Technical/Qualification
 Allows vendors to submit technical (no cost) written
bids outlining capabilities and qualifications.
 May include demonstrations, presentations, trials, etc.
 Bids are rated pass/fail based on meeting
qualifications and specifications
◦ Stage 2: Cost bids
 Cost bids are requested from vendors that successfully
pass Stage 1
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Awarded to vendor providing lowest price in
Stage 2
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Technical bids are evaluated by at least three
individuals
◦ Acceptable, Potentially Acceptable, Unacceptable
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Discussions with vendors to clarify technical
bids may be held during the evaluation
process
Minimum timeframe: Two weeks – Stage 1
◦ Timeframe set by buyer
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In an RFP process, vendors are asked to
submit proposals outlining how they would
meet or exceed our needs. A committee
evaluates the proposals and rates each
proposal based on the criteria contained in
the RFP. Following the technical evaluation, a
cost evaluation is performed. The award is
made to the vendor that will provide the best
value to the University.
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Enter a requisition.
◦ Indicate RFP in the comments field
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Fill out the Justification for Enhanced
Procurement Method
If approved, buyer will provide an RFP
Statement of Needs and Rating Criteria
document
Work with the buyer to complete the
document
Timeframe: Four to six weeks
◦ Timeframe set by buyer
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Evaluation is a three stage process
◦ Stage 1: Technical Evaluation
 Proposals are evaluated subjectively by at least three
individuals
 Each weighted criterion receives a score 1-5
 Technical points are combined for each proposal
 Committee cannot have access to cost information
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Stage 2: Cost Evaluation
◦ The buyer calculates the cost score based on the
formula 40 x (2 – Proposed Price / Lowest Proposed
Price)
◦ The buyer may work with the committee to clarify
proposed costs
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Stage 3 – Composite Score
◦ The technical and cost scores are combined to form
the composite score
 Cost is approx. 30% of total composite score
◦ The contract is awarded to the vendor whose
proposal receives the highest composite score
 May require a cost-benefit analysis
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The purpose of an RFI is to obtain
information, comments, or suggestions from
potential bidders before issuing a solicitation.
It can also be used to determine whether a
solicitation should be issued or to generate
interest in a future solicitation. RFIs are not
considered a procurement process, but an
information gathering process.
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Bid or RFP Completed by the State or WSCA
No additional competition needed
Purchase directly
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Department
◦ Elevator Maintenance
◦ Uniforms
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Campus-wide
◦ Buses
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Computers
◦ Computer Shop
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Printers
◦ HP
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Audio/Visual Equipment
◦ Contact Media Services
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Furniture
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Software, including apps
◦ Software Ordering System
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Campus-owned cellphones/aircards
Office Supplies
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Not allowed
Exceptions determined by Purchasing
◦ Deposits
◦ Progress Payments
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Flowchart
This is how it works regardless of:
Fund source
Sourcing method
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Sole source procurement may be used when a
requirement is only reasonably available from
a single supplier
◦ Availability
◦ Compatibility
◦ Transition costs
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Require justification
◦ New Sole Source Justification Form
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Not reasons: price, time
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Services performed by individuals.
◦ No product
◦ No companies
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Requires Responsible Party signature.
Second Level approval required for payments
$1000 or more.
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Deemed “Independent” by FaBS and Human
Resources.
Guest Speakers/Performers are always
considered independent.
Form can be downloaded from the Finance
and Business Services Website.
◦ http://uvu.edu/finance/reports-forms-files/
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Personal reimbursement program
No P-Card or LPC
Travel Office
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