Introduction to Procurement

June 5, 2014

Background
Purchase Order Value (FY12/13)

Avg Cycle Time (PR to PO)

2.56 days
PO Documents 3,800

~$44M Annual Spend + ~$1.6M

Pcard!

Background
All of the content presented herein can be located at:
http://www.bloomu.edu/purchasing

Expenditure of Public Funds Policy 2010-01-A

The spending of public funds must clearly and directly benefit the
university in support of its mission
Expenditures of public funds may not inure to the private benefit of one
or more individuals unless such expenditure is authorized by law
All expenditures of public funds must be prudent and economical
Key compliance points:

Consistency

Adequate documentation supports:

There is no taxable benefit to the recipient

No private inurement (benefit)
Expenditure was incurred for the right reasons (advancement of
universitys mission)
Approvals

Policy/Authori
Commonwealth
Acts/Policy/Procedures:
ty
Title 62 Commonwealth Procurement Code (Act 57 of 1998)

BOG Policy 1998-04 A (Procurement of Goods, Services and Construction)

Manual for Preparing and Processing Contracts for Goods and Services
Office of Chief Counsel/Office of Univ. Legal Counsel
Contracting Officer

Primary person delegated with contracting officer authority on behalf of the

University, without financial limitations, is VP A&F. When absent, AVP A&F.
Director of Procurement and Operations has purchases and contract
authority to $100K.
No other individual has contracting signatory authority on behalf of the University
unless delegated in advance and in writing by the President!

Fiscal Officer

Primary persons with delegated authority as "fiscal officer" to review

contracts and agreements, and to sign disbursement authorizations on
behalf of the University, without limitation are: AVP A&F or Assist. Dir.,
Budget and Finance.
No other individual has fiscal authority on behalf of the University unless delegated
in advance and in writing by the President!
Note intentional segregation of duties to provide safeguards and oversight; mitigate
potential risk.

Delegation of Authority

Solicitation/Contracting
Methods

Type

Informal Quote

Description

May request under the bidding threshold

Invitation for Bid

(IFB)

Normally used when the supply, service, or construction

can be satisfactorily described and price is the only factor
to be considered in the award, after bidder responsibility is
determined
Request for
Typically issued from existing State/PASSHE contract at
Quotation (RFQ)
specified $ threshold
Request for Proposal When the contracting officer determines that the use of
(RFP)
competitive sealed bidding is either not practicable or
advantageous to the University.
(a) Seeking a contractor's solution to a Univ. need;
(b) Wants to give the offerors flexibility in the contents of
their proposals in terms of the materials, services, or A/E
offered; or
(c) Has difficulty preparing a detailed procurement
description.
Invitation to Qualify
(ITQ)

Sometimes used to describe the solicitation document,

process and umbrella contract for certain multiple-award
contracts entered into by the Commonwealth. ITQs
generally are solicited using an invitation for bids, which
may be conducted through an electronic system (portal),
and open to enrollment to qualified suppliers throughout
the term of the umbrella contract.

Cycle
Time
Few
days
2-3
weeks

1-2
weeks
3-4
months
+

1-2
weeks

Solicitation/Contracting
Methods
Solicitations Publically Advertised
Others

DGS/State Contract
PASSHE Contract
COSTARS
Various Purchasing Cooperatives:
PEPPM contract
TCPN Lowes contract
US Communities Astro Turf contract and
Graybar contract
National IPA (Grainger only)

http//www.ebidexchange.com/pass
he
http://emarketplace.state.pa.us/

Thresholds and Process Materials

Value

Requester Action

Procurement
Process

$0$19,100

Provide verbal or written

quotes but no formal bidding
required. Should solicit 3
informal quotes, when
possible.
- Enter requisition
- Purchases under $1,000 can
use p-card (in accordance
with published Pcard
procedures)
http://www.bloomu.edu/financ
e_busoffice/purchasing

If using Pcard, do not also

enter a PR

PO Created
Signed by
Authorized Agent
and sent to
vendor

1-5 Days

>$19,100

- Enter requisition

- Solicit at least 3 competitive

quotes, where feasible, in
advertising and bid process

IFB/RFQ or RFP
Created
Bids Evaluated
PO Created
Signed by
Authorized Agent
and sent to

15-30 days

Approx. Process
Time

Thresholds and Process - Services

Process
$0-$19,100

>$5000$19,100

Requester Action

Procurement Process

Enter Requisition

Provide verbal quoteno formal bidding

required

Enter requisition

Provide any written quotes, but no

formal bidding required

>$19,100$20,000

Enter requisition

Participate in advertising and bid

process

>$20,000$500,000

Enter requisition

Participate in advertising and bid

process

PO/SPC Created
Sent to vendor for
signature
Signed by Authorized
Agent (s)
PO/SPC Created
Sent to vendor for
signature
PO/SPC Signed by
Authorized Agent
University Legal Review
and signature
IFB, RFQ or RFP Created
Bids evaluated
PO/SPC Created
Sent to vendor for
signature
Signed by Authorized
Agent and sent to vendor
University Legal Review
and Signature
IFB, RFQ or RFP Created
Bids evaluated
PO/SPC Created
Sent to vendor for
signature
Signed by Authorized
Agent. Bus Office and VP

Approx.
Process Time
5-10 days depending
on vendor signature
time

10 -20 days depending

on legal review

<$20,000 = 10-20
days

>$20,000 = 30-90
days (OAG is allowed
up to 30 days for
signature)

Thresholds and Process Services

Process
>$500,000

Requester Action
Enter requisition

Participate in advertising and bid

process

Procurement
Process

IFB, RFQ or RFP Created

Bids evaluated
PO/SPC Created
Sent to vendor for
signature
Signed by Authorized
Agent
University Legal review
and signature
OGC Review and
signature
OAG Review and
signature

Approx.
Process Time
90-180
days (OAG and OGC
signatures can take
up to 30 days each)

Exceptions to Competitive
Bidding

The Commonwealth warehouse

Items on state (DGS, COSTARS or PASSHE), contracts
May still require an RFQ
Items available from agencies for persons with
disabilities (such as Pennsylvania Industries for Blind
and handicapped)
Certain items specified under grant or restricted gift
provisions, and
Items procured under the sole source and
emergency provisions of the Commonwealth
Procurement Code.

Purchase Requisition
Review
Special Approvers

General
Value

Approval

$0-$5,000

Requisitioner (1)(2)

>$5,000

Dean/VP

(1)Procurement reviews for appropriate

expenditure, price and source
(2)Budget validation

Materi
al
Group

Description

Approv
er

Lev
el

00172

DESKTOP PRINTERS

Celli

$200

00180

COPIER-PURC_RENT_EQ

Celli

$1,000

00252

COMPUTER SOFTWARE

Celli

$1,000

00260

COMPUTER HARDWARE

Celli

$299

00108

LIBRARY MATLS_SUPP

Droll

$1,000

00124

EQ_LIBRARY_ARCHIVAL

Droll

$1,000

00908

SRVC-PRINTING_PHOTO

Mandel

$1,000

00132

SIGNS_FLAGS_BANNERS/(LOGOS) McGuire

$5,000

00140

PROMOTIONAL PRODUCTS

Rush

$5,000

00748

SRVC-ADVERTISING

Rush

$5,000

Types of Contracts and

POs
Type

Purchase Order
(PO) (45)
Service Purchase
Contract (SPC) (40)

Description/Use

Purchase of goods (i.e. computers, furniture, books). The

PO is signed by the Contracting Officer.
Purchases of services (i.e. consultants, performers, piano
tuners). SPCs are signed by the vendor, Univ. and legal
counsel (OAG/OGC) based on $ value of contract.

Outline Agreements
(OA) (46)

Service Purchase

Outline Agreement
(SPOA) (47)

Encumb
ers
Funds

Y
Y

Facilitate repetitive orders to single vendor (Bottled

H20, hearing aids, bulk commodities)
Allows single contract to capture all associated PO
spend. Issue separate POs that reference 46#
Can be configured for multiple years with POs issued
on annual year basis
Can be configured for multi-using depts. (separate line
for each)

Repetitive service requirements (Maint repair

contracts)
Limit to $19.1K/yr
Actions:
Require new PO for each FY

Types of Contracts and

POs
Type

Description/Use

Encumb
ers
Funds

Blue Back Contract More complicated procurements and associated

transaction (ex. student loan mgt). Signed by the vendor,
Univ., legal counsel, AG and OGC based on $ amount of
the contract.

Construction
Contract (39)

New construction, renovations and improvements to

buildings. Construction contract signed by the contractor,
Univ., legal counsel, AG and OGC based on $ value of the
contract. (PO signed by Contracting Officer)

Pcard

Typically assigned a single transaction $ limit of $1,000;

monthly $ limit of $3,000. Certain university operations
may be assigned a higher per transaction or monthly
dollar limit where appropriate and with the approval of
the Procurement Department.

N
(batch
monthly to
expense)

Prohibited Contract
Clauses

Policy:

Assignment Clauses - No assignment without prior written consent of the

University.

Law of the Contract - The laws of PA must govern the contract or agreement.

Attorneys' Fees, Court Costs, Entry of Judgment - The University may not
voluntarily pay - the contractor's court costs or legal fees nor may it allow a
contractor to confess judgment on its behalf.

Indemnity and Hold-Harmless Clauses - Removed from every Commonwealth

contract because it compromises the greatest protection afforded the
Commonwealth entities: Sovereign immunity.

Arbitration Clauses - Resolution of disputes by binding arbitration in contracts for

goods and services are prohibited. The Board of Claims has exclusive jurisdiction.

Payment in Advance

Purchase of Insurance

Contracting for Speakers

SPC must be executed between BU and speaker/speakers booking
agent prior to engagement.
1. Initiate a Purchase Requisition (PR).
a. Lead times below must be followed:
i. >$5,000 6 weeks prior to engagement to allow Procurement
time to create contract, work through contract issues with the
speaker, and obtain speaker and PASSHE legal counsel signatures;
ii. $5,000 and < 2 to 3 weeks prior to engagement to permit time
to review, edit terms and obtain all signatures.
b. Include all pertinent information on the PR in SAP:
i. Speakers quotation and/or contract (add as attachment to PR);
ii. Name, address and phone number;
iii. SSN of the speaker or EIN of the booking agent;
iv. Speakers fee;
v. Travel expenses (lodging, meals, mileage, etc.) select one of
the following methods:

Contracting for Speakers

a. Establish a set fee with the
speaker, agreed upon in advance,
which includes all expenses.

a. Estimate of travel expenses

must be in accordance with
university travel guidelines (see
1.c. above).

a. PR - Line 1 will state

"Speaker's Fee".

1. All Inclusive Fee (Preferred Method)

b. PR - Line 1 will state
c. To determine reasonableness of included expenses,
"Speaker's Fee-Note:
please reference current per diem and lodging rates and mileage
Bloomsburg University is not
calculator found on Bloomsburg University's Travel Information webpage.
responsible for any travel
Current rates for Bloomsburg are $77/day for lodging and $46/day for
expenses".
meals.

2. Travel Expenses Reimbursed to Speaker

b. PR - Line 1 will state
c. PR - Line 2 will state "Estimated
"Speaker's Fee".
reasonable travel costs (lodging,
meals, mileage, etc.) - receipts
required".

d. Item Text will state

"Speaker will make travel
arrangements, pay for travel costs,
and invoice Bloomsburg University
accordingly".

3. Travel Arrangements Made by BU

b. Item Text will state "Bloomsburg
c. Note: travel arrangements must be in accordance with university travel
University will arrange and pay for
guidelines (see 1.c. above) and can be made using the purchasing card or
travel costs (lodging, meals, etc.)".
purchase requisition system.

Contracting for Speakers

Payment processing:
Standard practice - Speaker responsible for sending invoice for services provided to University
in accordance with the terms outlined on the SPC. University depts/offices should not generate
an invoice on the speakers behalf.

However, if speaker is an individual not associated with a company or corporation, does not
speak routinely in the course of his/her normal employment the department may prepare and
submit an invoice on his/her behalf. This invoice should be signed by the speaker prior to
departure. After the engagement, the invoice must be signed for approval by the respective
department who initiated the speaker request. Refer to the link for this invoice form.
http://www.bloomu.edu/documents/purchasing/GeneralInvoiceForm.doc

If a speaker contracted for expense reimbursement, original receipts for actual expenses
incurred must accompany the invoice to substantiate expenses claimed and satisfy audit
requirements prior to reimbursement (applies to options 2 and 3, above, only).

Payment will be made after speaking engagement has taken place and the requisitioner has
approved the invoice for payment. Any exceptions to this rule must be approved by the
Procurement office. Prepayment of speaker fees and/or expenses is only authorized under
extraordinary circumstances (i.e., speakers from outside the US).

Upon approval of final invoice for the contract, indicate final invoice before forwarding to
AP office for processing. By doing so, any remaining open commitment will be liquidated
and funds returned to funds center holders budget.

Call the Procurement office if you have any questions or special circumstances.

Cautions

A person without delegation

who signs a contract is acting
outside the scope of his/her
employment and can be held
personally liable for the
obligation(s) created by the
inappropriate signing of
contract.

This is also true for after the

fact contracts (i.e. procuring
a good or service without the
advance approval of
Procurement). BU cannot pay
on an unlawful contract and
the contractors only remedy
is to proceed against BU via
the Board of Claims or
request approval of a
settlement agreement.