Handbook of Business Procedures
January 27, 2012
February 16, 2015
7.4. PURCHASING PROCESS
The purchasing process at The University of Texas at Austin consists of the following steps:
- Define the specifications or scope of work (SOW)
- Solicit price quotes
- Issue a purchase order
- Accept delivery and document receipt
- Issue payment
1. Define the Scope of Work (SOW)
Before a department can begin the purchasing process, the end user must identify the specific need for a good or service by defining the specification or scope of work (SOW) to include the following:
- description of good/service
- quantity needed
- quality of good/service
- date needed
- estimated cost
2. Solicitation of Price Quotes
Once the SOW has been defined, the correct solicitation process can be determined. Solicitation methods are generally determined by the estimated dollar value of the product or service to be purchased. A department may solicit quotes (informal bids) from vendors for purchases up to $25,000. Purchases with a value expected to be greater than $25,000 may require formal bidding by the Purchasing Office.
A department must use one of the following solicitation methods when procuring goods or services for the university:
Competitive quotes are encouraged but not required. A department may solicit a quotation from a single source and issue a purchase order at the department’s discretion.
A department is required to obtain a minimum of three quotes by mail, email, or fax and submit them to the Purchasing Office. A good-faith effort should be made to include at least one quote from a minority-owned or woman-owned business. A Sole Source Justification Form may be used if appropriate. For more information about sole source justifications, see the Handbook of Business Procedures 7.5.3. Sole Source Purchases.
Formal bidding by the Purchasing Office may be required. Consult with a buyer in purchasing to determine the appropriate procurement method. To find the purchasing buyers assigned to a department, see the UT Purchasing Centers and Buyers List. A Sole Source Justification Form may be used, if appropriate. For more information about sole-source justifications, see the Handbook of Business Procedures 7.5.3. Sole Source Purchases.
1 Use a PB4 document for sole source purchase requests.
The State of Texas and the university have access to many competitively awarded contracts that can be used to save time in the purchasing process by removing the need for formal bidding. Local contracts (those established by the university) and other frequently used contracts can be found on the Purchasing Office Current Blanket Orders website. For more information about the use of contracts, see the Handbook of Business Procedures 7.5.2. Use of Existing Contracts.
3. Issuance of Purchase Order
Purchase orders must be issued prior to the shipment of a product or the delivery of a service in order to be compliant with university policy and procedures.
After obtaining price quotes, the requesting department creates a requisition document in POINT Plus. Based on the document type, the requisition is final approved at the department level or by the Purchasing Office. Upon final approval of the requisition, a purchase order is created. The purchase order is a contractual document that specifies description, price, quantity, delivery, and terms and conditions. The following guidelines apply to purchase order issuance:
- Purchase orders for $5,000 or less are issued by the requesting department.
Note: Purchases requiring a signed software license agreement or special payment terms must be approved by the Purchasing Office.
- Purchase orders for more than $5,000 must be approved and signed by an individual in the Purchasing Office with the appropriate delegated authority prior to being issued to a vendor.
4. Delivery and Receipt
When the good or service is received at the proper destination, receipt is documented to allow for payment. Items can be delivered directly to the department (desktop delivery) or to Central Receiving.
UT Market orders require entry of an electronic receipt in FRMS.
- For desktop delivery, the requesting department must enter the receipt within 72 hours of the delivery. If shipments for a purchase order are split over multiple days, an electronic receipt should be entered for each partial shipment. Receipts are updated and finalized in the system daily. Receipts for items delivered to Central Receiving are created by central receiving personnel.
- The individual (receiver) receiving the shipment must be different than the buyer.
- The receiver is responsible for signing and dating all invoices and/or packing slips . If the receiver verifies a shipment via email, a digital certificate must be attached to the email.
Part 20.3.3.Financial Records states that packing slips and other support documentation received as hardcopy must be submitted to the Image Retrieval System to be imaged or retained in the department in accordance with all applicable retention codes.
Desktop delivery is required for certain items, including:
- Office supplies
- Live animals or plants
- Bottled gas
- Gasoline (bulk deliveries)
- Concrete, sheet rock, plate glass
- Food for human consumption
- Items that are overly large or heavy (some furniture and equipment)
For questions about delivery through Central Receiving, contact the Purchasing Office.
Payment for invoices is generated in the following ways:
- For paper invoices, if the items were received via:
- Central Receiving - Accounts Payable manually verifies and matches receipt of the service or good, paper invoice, and issued purchase order. If all three match, Accounts Payable creates the payment voucher.
- Desktop receiving - The requesting department manually verifies receipt of the service or good and creates the payment voucher.
- For electronic invoices, when the invoice is received, it is electronically matched with the purchase order and the receipt document. Once the match occurs, a payment voucher is auto-created.