PURCHASING BASICS Department of Purchasing Revised 7/15/13

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PURCHASING BASICSDepartment of
Purchasing
Revised 8/17/11
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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 onthe Purchasing Web Page at
  http//www.louisville.edu/admin/purchasing/cpsta
  ff.htmPurchasing

• 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 onthe Purchasing Web Page at
  http//louisville.edu/purchasing/aboutstaff

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Index
Purchasing Authority Duties and
Responsibilities Accountability Sustainability Vio
lation 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
RentalPrinting Federal Debarment Purchasing Forms
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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.555 -
  164A.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.

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Purchasing Duties and Responsibilities

• Purchase 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
• Operation of Central Receiving, Stockroom,
  Inventory Control,
• and Asset Management.

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Accountability

• Internal Audit - every 2 or 3 years.
• External Audit - annually

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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 http//louisville.edu/purcha
sing/sustainability
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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.
• http//louisville.edu/purchasing/forms/taxexempt.
  pdf

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Procurement Card

• The Procurement Card Program has been
  established as a service to
• campus departments through PNC Bank and the U of
  L
• Purchasing Department.
• Program will allow departments the opportunity to
  use a University
• Credit Card to purchase certain goods totaling
  less than the departmentalset authorization
  (typically 2500.00).
• The Procurement Card Presentation can be found
  at
• http//louisville.edu/procard

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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 www.louisville.edu/orion/trai
  ning/classesWork2.htmlfinancials
• 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/Buyer Assistant.
• Department Approver, Buyer or Buyer Assistant
  will receive anautomatic Groupwise email
  notification that a requisition is ready for
  approval.

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On-Line Purchasing Procedures
Approval Options Recycle Deny Approve Departm
ents are responsible for requisition entry
Buyer Assistants are responsible for
requisitions lt4999 Buyers are responsible for
requisitions over 5,000. 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.
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On-Line Purchasing Procedures (Continued)

• Buyer Options for processing requisitions
• Small Purchase authority
• Price Contract
• Quotation
• Sealed Bids
• RFP (Request For Proposal)

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Small Purchase Authority

• The Requisition is reviewed and updated with any
  necessary changes and approved by the Buyer or
  Buyer Assistant.
• Buyer or Buyer Assistant 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 or BuyerAssistant and mailed, faxed, or
  emailed to the Vendor.

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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.
• Appropriate payment documentation if a check is
  required for a deposit
• or a prepayment

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Requisitions Should Contain the Following

• Additional information or unusual circumstances
  about thepurchase that make it non-routine i.e.
  single source justification,vendor quotation,
  etc.
• Appropriate use of Unit of Measure, Quantity,
  Item Description
• Successful budget check
• Any necessary comments pertinent to the
  requisition
• Department approval

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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 printedfrom the Controllers web page at
• http//louisville.edu/vpf/controller/acctops/accou
  ntspayable/disbursementguidelines04.html

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Purchase By Competitive Sealed Bid

• Purchasing 6.00 Can be found on the Purchasing
  Web page at the following address
• http//louisville.edu/purchasing/policies/purchas
  ing-6.00.html
• The University is required by law to solicit
  formal Invitations to Bid
• for commodities and services, including
  construction gt40,000.
• 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

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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.

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Purchase By Competitive Negotiation

• Purchasing 7.00
• Can be found on the Purchasing Web page at the
  following address
• http//www.louisville.edu/purchasing/policies/pur
  chasing-7.00.html
• 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 vendors 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.

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Price Contracts

• Purchasing 9.00
• Can be found on the Purchasing Web page at the
  following address
• http//www.louisville.edu/purchasing/p
  olicies/purchasing-9.00.html
• 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
• http//louisville.edu/purchasing/cont
  racts

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Blanket Orders

• Blanket orders are paid monthly on a continuing
  basis.
• 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

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On-Line Receiving

• Purchasing 17.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-17.00.html
• PeopleSoft Training Manuals for Purchasing
  Inquiry, E-pro Requisition
• Entry, and E-pro Receiving can be accessed on
  the IT Web page at
• www.louisville.edu/orion/training/classesWork2.ht
  mlfinancials

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When the Department Receives

• Receipts should be entered into PeopleSoft
  immediately after receipt of merchandise or
  performance of services.
• 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 call Helen Carter _at_ 852-2986, Don
  Lomax _at_ 852-6131, or Ken Burton _at_ 852-2943.

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When Central Receiving Receives

• Central Receiving personnel will check against
  purchase order and
• prepare a delivery manifest.
• A delivery manifest is signed by department when
  material is delivered.
• Central Receiving personnel will enter data
  on-line in PeopleSoft.
• Central Receiving personnel are not responsible
  for unpacking, uncrating, assembling or
  installing delivered items.
• Any questions may be directed to David Jenkins or
  Windell Prewitt at 852-5890.

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Duplicate Shipments/Receipt of Incorrect or
Defective Goods

• Purchasing 18.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-18.00.html
• 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.

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Ethics in Purchasing (Gratuities)

• Purchasing 4.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-4.00.html
• 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.

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Purchases From Central Stockroom
Purchasing 28.00
Can be found on the Purchasing Web page at the
following address http//louisville.edu/pur
chasing/policies/purchasing-28.00.html
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Purchase of Office Supplies

• Purchasing 26.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-26.00.html
• Staples is the primary office supply vendor for
  the University
• A Staples Ordering Reference Guide is available.
  This guide contains useful information on how to
  process orders, returns, etc.
• Three options for order placement
• Internet Order www.eway.com
• Phone Order 1-888-238-6329
  PeopleSoft Order PO will be sent
  electronically
• Staples representative is Charles Beard,
  502-899-2644
• Currently no purchasing can be done in Staples
  retail stores.

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Moving Expense Policy

• Purchasing 32.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-32.00.html
• University has contract with Allied Van
  Lines/Berger Transfer Storage Inc.
• Departments create an electronic requisition and
  complete an
• authorization to move form found at
• (Employee move) http//louisville.edu/purchasing/
  forms/employee_move_form
• (Office/Lab move) http//louisville.edu/purchasing
  /forms/office_lab_move_form

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Gasoline Fleet Fueling Program

• Purchasing 13.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-13.00.html
• 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 Programhttp//louisvil
  le.edu/procard/fuelcard/proceduresforfleetfuelprog
  ram.html
• To obtain a Fuel Card / Pin http//louisville.
  edu/admin/forms/fuelcardform.htm

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Recycled Material Content Procurement

• Purchasing 31.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchas
  ing-31.00.html
• 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.

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Vehicle Rental
Purchasing 27.00 Can be found on the Purchasing
Web page at the following address http//louisvil
le.edu/purchasing/policies/purchasing-27.00.html
The University has a current contract with
Enterprise Vehicles rates can be viewed on the
Purchasing Web page at the following
address http//louisville.edu/purchasing/policies
/vehiclerates.pdf The Enterprise account rep can
be reached at phone [phone].
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Printing

• Purchasing 37.00
• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/policies/purchasi
  ng-37.00.html
• Per Kentucky law, all University printing must
  be done in-house (IT Printing) or under
  established contract.
• First Right of Refusal IT Print decides if
  job will be done in-house or sent to a
  previously approved vendor.
• All printing contracts must be approved by the
  Governor of the Commonwealth of Kentucky.

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Federal Debarment
Purchasing 35.00 Can be found on the Purchasing
Web page at the following address http//louisvil
le.edu/purchasing/policies/purchasing-35.00.html
Prior to contract award, a department initiating
a procurement of 40,000 or more, any amount of
which is federally funded, shall ensure that the
successful vendor is not debarred from doing
business with federal agencies.  All new
contracts, sole source purchases, and
departmental agreements gt25,000 require a
sanction check.
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Purchasing Forms

• Can be found on the Purchasing Web page at the
  following address
• http//louisville.edu/purchasing/forms
  
• 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