Faculty and Staff Handbook

Introduction

Please visit the federal Small Business Agency's database of small businesses using the Central Contractor Registration (CCR) site, to search for federally certified small, disadvantaged, veteran owned, HUBZone, and women-owned businesses.

Please visit MOLIS, a ground-breaking online database of the research capabilities of over 268 minority institutions. MOLIS is used by government agencies, organizations and institutions (both private and public) to identify opportunities for HBCUs & minority serving institutions.

Contents

Summary of Purchasing Authority
Starting the Purchasing Process
Stages of the Purchasing Process
Proprietary Purchases: Sole Source/No Substitute
Emergency Purchases
Request for Proposal (RFP)
Federal Sub-Contracting Requirements
Purchasing Ethics
Purchasing from or Sale to an Officer or Employee
Software License Agreements
Duty Free Entry Status of Foreign Shipments
Glossary of Purchasing Terms
Helpful Phone Numbers

Related Links:

Business Contracts
Changing an Existing Purchase Order
Current Contracts and Orders You May Use
Professional Services
Consulting
Obtaining and Using a Procurement Card

Summary of Purchasing Authority

¹Use PB4 for sole source with sole source letter.

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Starting the Purchasing Process

It's always good to evaluate what you want to buy and how you should buy it. There may be standing orders or contracts in place which will save you time. Some types of purchases require special handling or considerations. The checklist below will help you decide which path to take. Use existing contracts and orders to expedite your purchase. If uncertain, please contact the Purchasing Office for additional help.

Services Provided by Other University Departments

Many services are available from other University departments – when service is obtained from another University department, bidding is not required, no purchase order is issued, and charges may be paid using an Interdepartmental Transfer (IDT) rather than vouchering against an invoice. See http://www.utexas.edu/admin/purchasing/faq.html for a list of services available from University departments.

Goods

Services

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Stages of the Purchasing Process

The department may solicit telephone (informal) bids up to $25,000. A firm quotation must be obtained prior to any purchase order being issued. A written (formal) bid invitation is administered only by the Purchasing Office.

The purchase order is issued by The University Purchasing Office

The material or service is received at the proper destination, and receipt is documented to allow payment for goods.

An invoice is received by the proper vouchering authority.

A voucher, The University's authorization to pay a vendor, is issued.

If goods are received by Central Receiving, Accounts Payable will prepare the voucher for payment.

If goods or services are received at any location other than Central Receiving, the using department must prepare the voucher.

Certain items must be delivered directly to the department rather than to Central Receiving. The purchase order should specify the appropriate delivery address.

• Live animals or plants
• Bottled gas
• Gasoline (bulk deliveries)
• Concrete, sheet rock, plate glass
• Food for human consumption
• Items which are overly large or heavy

This list is not definitive. Contact your buyer if you have questions about delivery through Central Receiving.

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Sole Source/No Substitute

Generally, all purchases are made on a competitive bid basis. However, there may be a reason to request a Sole Source or No Substitute item. Whenever this situation occurs and the estimated cost exceeds $5,000, justification for an exclusive vendor or brand must be included. It is not necessary to justify the need for the product, but it is necessary to:

1. Identify the unique features of the particular product
2. Explain the need for the unique features
3. Explain why competing products/vendors are not acceptable

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Emergency Purchases

An emergency purchase is defined as "the purchase of supplies or services which are so badly needed that the department will suffer financial or operational damage if the supplies or services are not secured immediately." Carelessness or negligence on the part of the agency and/or its employees can cause emergencies. Such cases are subject to question, review, and possible rejection by Purchasing Office. Contact the Purchasing Office for detailed information on how to proceed in cases of emergency.

A sample emergency justification letter is available. (Microsoft® Word format)

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Request For Proposal (RFP)

The RFP is a significant tool available to professional buyers. Its use is specialized and is applicable only when competitive sealed bids will not produce the desired products and services.

Notable differences between competitive sealed bids and requests for proposals:

When To Use:

• There are complex specifications, standards, or installation requirements
• Product, service or software is very sophisticated
• High cost (not price) life cycle cost should be considered
• Critical performance requirements
• Complicated trade-ins or upgrades
• Contract must be other than fixed price
• Discussions with proposers will be desirable and necessary
• Proposal revision is desirable
• Proposer defines and offers solutions for needs
• Need to compare quality, technical, contractual and price factors
• Determination of award is not solely based on price

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Invitation For Bid vs. Request For Proposal

Procedural Details

RFP Pre-Planning Checklist

Anyone considering the use of an RFP for the purchase of goods or services should contact the Purchasing Office in order to obtain a copy RFP format to prepare a draft from.

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Federal Funds

(26 accounts)

Please visit PRO-NET, the federal Small Business Agency's database of small businesses, to search for federally certified small, disadvantaged, veteran owned, HUBZone, and women-owned businesses.

Please visit MOLIS, the U.S. Department of Energy Office of Environmental Management's database of minority institutions.

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Purchasing Ethics

First consideration shall be given to the objectives and policies of the System and its component institutions.

Every effort shall be made to obtain the maximum ultimate value for each dollar of expenditure.

Honesty in sales representation shall be demanded, whether offered through the medium of oral or written statement, an advertisement, or a sample of the product.

Purchasing agents and their staffs and others authorized by or under these regulations to make purchases shall not accept personal gifts or gratuities that might in any way result in an obligation to individuals or firms seeking business.

All qualified, reputable bidders shall be given equal opportunity to submit bids on a uniform basis when competition is possible.

No vendor shall receive special consideration or, except in the case of RFPs, be allowed to revise their offer after the time set for opening bids.

Any violations of these purchasing ethics shall be reported promptly by the Office of the Controller to the Vice Chancellor for Business Affairs.

A very thorough presentation of UT System Ethics Policies and Guidelines is available online.

The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) was passed to deter subcontractors from making payments and contractors from accepting payments for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or a subcontract relating to a prime contract. The Act imposes criminal penalties on any person who knowingly and willfully engages in the prohibited conduct under the Act. The Act also provides for recovery of civil penalties by the United States from any person who knowingly engages in such prohibited conduct and from any person whose employee, subcontractor or subcontractor employee provides, accepts or charges a kickback.

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Purchase from or Sale to an Officer or Employee

UTS 159 Purchasing, Procedures, Section 3

Purchase from, or sale to, any officer or employee of the System or a component institution of any supplies, materials, services, equipment, or property must have the prior approval of the component president. Any such purchases shall be made only if the cost is less than from any other known source. This Section does not apply to sales or purchases made at public auction or sales approved by the institutional president valued at $5,000 or less.

see also Texas Government 2155.003

"No member of the Commission or an employee or appointee of the Commission shall be interested in, or in any manner connected with, any contract or bid for furnishing supplies, materials, services, and equipment of any kind to any agency of the State of Texas...".

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Software License Agreements

Purchasing Office contracts license.

• The cost of the software if known or a statement that the software is free or no charge and a contact person with the software vendor if a contact is known. This information will enable Purchasing to more quickly determine the approval process for an individual software license agreement. Software licenses that are free or no charge and software licenses that are less than $1,000.00 in cost will be expedited in order to put the software in the hands of the end user more quickly.
• Departments should note any concerns they have about requirements of the license - for example, requirements for submission of written reports, on site visits, etc. The purchasing office attempts to work such concerns out along with any other legal concerns.

See the Software license checklist on the OGC web site.

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Duty Free Entry Status of Foreign Purchases

Items imported by the University are not automatically eligible for Duty Free Entry. You must provide evidence that the items were not available from domestic sources, were special order components or custom made to requestor's specifications. This criteria must be submitted to U.S. Customs for their consideration and approval. The best approach is to apply for a Duty Free status prior to importation. This process can take up to one year for approval, usually less that 120 days. If the Duty Free status application is submitted after the importation of the products, Customs Duty must be prepaid and you will be required to request a Duty refund after the approval is given for Duty Free admission. This refund can take up to one year to receive.

You may obtain the Duty Free Status application on our forms page. You will need Adobe® Acrobat Reader to use this form.

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Glossary of Purchasing Terms

Best Value Procurement:

An institution of higher education may acquire goods or services by the method that provides the best value to the institution, including:

competitive bidding;
competitive sealed proposals;
a catalogue purchase;
a group purchasing program; or
an open market contract.

In determining what is the best value to an institution of higher education, the institution shall consider:

the purchase price;
the reputation of the vendor and or the vendor's goods or services;
the quality of the vendor's goods or services;
the extent to which the goods or services meet the institution's needs;
the vendor's past relationship with the institution;
the impact on the ability of the institution to comply with the laws and rules relating to historically underutilized businesses and to the procurement of goods and services from persons with disabilities;
the total long term cost to the institution of acquiring the vendor's goods or services;
any other relevant factor that a private business entity would consider in selecting a vendor;
the use of material in construction or repair to real property that is not proprietary to a single vendor unless the institution provides written justification in the request for bids for use of the unique material specified.

FOB - Free On Board Varieties

• Who pays the transportation (freight) charges from vendor's business to U.T. delivery destination?
• Where does the title to the goods transfer?
• Who is responsible for goods while in transit? This is important in the case of damage or loss of goods while in transit.
• Who is responsible for filing any freight claims if there is a problem with a shipment?

Click on thumbnail for a diagram of the FOB term described:

Preferably, all purchase orders for material to be delivered to The University should be issued F.O.B. Destination Freight Prepaid. However, some vendors will only ship F.O.B. Shipping Point. The University urges all departments to request that the full value be declared on shipments of all orders over $1,000 that are issued F.O.B. Shipping Point. The cost of this insurance is approximately $0.50 per $100 value. The Purchasing Office does not automatically declare the value unless a specific request from the department has been received.

Payment Terms

• Net 30 Payment of net (full) amount within 30 days of receipt of invoice or receipt of material or service, whichever is later.
• 2%10 Net 30 A 2% cash discount is earned if invoice is paid within 10 days after receipt - otherwise the net (full) amount is due in 30 days. Discount cannot be used in calculating total and can only be taken by Accounts Payable in processing payment.
• Prepayment Payment by check will go to the vendor with the copy of the purchase order - vendor will then deliver materials. Prepayment should only be used for small dollar purchases. All prepayments are at the department's risk.

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Helpful Phone Numbers

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