1. Welcome! Procurement Basics Jane Scott, P-Card Manager Mary Louise Hughes, Senior Buyer

2. Procurement Code & Policy Utah Procurement Code 63G-6a-408: Small Purchases University Policy 3-100: University Procurement 3-191: Small Purchases and Expedited Procurement 3-192: Restricted Purchases and Special Procurement 3-010: Expenditure of University Funds & Personal Reimbursements

3. What do I need? – Specifications Where can I get it? – Contracted vendors When do I need it? – Process time/Payment How much will it cost? – Estimate Procure – to - Pay

4. Definitions Small Dollar Purchase: Procurement of supplies or services; total cost is less than $5,000. Competitive bidding is not required but is encouraged. Procurement Price: Total acquisition price; i.e., cost of goods/services plus shipping, installation, ancillary items, training, tips, etc. Order Splitting: It is unlawful for an employee to intentionally or knowingly divide a procurement into one or more smaller procurements with the intent to qualify as a small purchase or to avoid transaction limits.

5. Criminal Penalties for Violation A person who violates the small purchase law is guilty of a: Class B misdemeanor if the total value of the divided procurements is less than $100,000. Penalties increase to a second degree felony depending on transaction total value.

6. Small Dollar Procurement Tools - Under $5000 Purchasing Card: Preferred procurement method Campus Orders Blanket Order Limited Purchase Order – LPO Payment Request – Reimbursements All restricted items must go on a Requisition

7. Purchasing Card Preferred method for small dollar under $5,000 Most merchants accept MasterCard Minimal paperwork / handling Electronic reallocation Restricted items – PCard and General Restrictions Excellent controls – vendor and spend limit

8. Keep it On Campus Campus Orders Print & Mail General Stores Plant Operations Instructional Media Services Chartwells The Point Event venues – Rice-Eccles, Red Butte…

9. Campus Orders Administered by Accounts Payable Department to Department Purchase Print & Mail Services, Plant Ops, General Stores, Media Services, Media Solutions, The Point, Red Butte Gardens, Library, Travel, Museum of Fine Arts, Type then give to the “Selling” dept Transaction shows up on Management Reports Bookstore, Guest House and Chartwells prefer the University MasterCard, not a Campus Order

10. Blanket Orders For frequent small dollar purchases under $5,000 If bid, will cover LARGE $$ amounts Can make them anytime during the year Purchasing sends out proof requisitions each spring on Blanket Orders that expire June 30th P-Card may handle these types of purchases

11. Limited Purchase Order - LPO Administered by Accounts Payable – Issued to an LPO Custodian, upon completion of an agreement, who is primarily responsible for the control of these forms. One-time purchases under $5000 – DO NOT split transactions to avoid limit DO NOT use for foreign purchases Type or print 3-part form then send copies out to: 1.Vendor 2. Accounts Payable 3. Keep one for department file

12. Limited Purchase Order - LPO Included within the scope of changes to Procurement code and University Policy. Use when purchaser does not have a PCard or merchant does not accept PCard For incremental services or deliverables with multiple payment installments, use Requisition instead of Limited Purchase Order.

13. Payment Request Administered through Accounts Payable – form found online Included within the scope of changes to Procurement code and University Policy. Used for payments to individuals for services, reimbursements, Guest Lecturers, Performers, Honoraria. Payments to Independent Contractors and Consultants, or other service providers still subject to Policy 3-111.Policy 3-111 For incremental services or deliverables with multiple payment installments, use Requisition instead of Payment Request.

14. Policy 3-010 Key Points Binding for all University colleges, departments, and units, including University Hospitals & Clinics. Accountability for the funds entrusted to the University, regardless of funding source, extends to all those involved in the expenditure of those funds. Funds “administered or held by the University” can include; Departmental operating funds Clinical income Gifts Any other funds for which the University is accountable, including monies from federal contracts and grants.

15. Policy 3-010 Key Points Reimbursements should be avoided, and instead direct procurement methods should be utilized, which take advantage of negotiated contracts, and the least costly expenditure outlay to the University. Reimbursements are subject to all the requirements of expenditures made directly via University funds. Payment of Sales Tax, via reimbursements, is waste of funds entrusted to the University. Prohibits use of personal funds to purchase on behalf of the University in combination with use of the University’s Sales Tax Exemption certificate.

16. University Sales Tax Exemption Certificate

17. Policy 3-010 Key Points Reimbursements under the minimum amount, currently $25, should be paid by a departmental Petty Cash fund, if available. Reimbursements greater than the maximum, currently $1,000, require supervisory and Director or Department Chair approval, and an explanation why preferred procurement methods were not used. If an individual makes a purchase which violates University procurement policies, and then seeks reimbursement, it is possible that reimbursement will not be processed. This Policy does not apply to University Travel.

18. Rule 3-010 Key Points Establishes the following minimum documentation requirements; Description of item or services purchased Date of invoice or date of purchase Amount Adequate description of business purpose Appropriate invoice or receipts Appropriate accounting distribution Necessary approvals

19. Rule 3-010 Key Points Combining personal funds with the use of the University Sales Tax exemption certificate is a violation of state law. If documentation suggests misuse of this certificate, the reimbursement will require a letter of justification, including approval of the cognizant Vice President. Reimbursement requests will not be eligible for expedited processing (Next Day or Same Day) without department Director or Chair approval.

20. General Restricted Items – Requisitions ONLY Radioactives Drugs Ethyl alcohol Live Animals Imports Recruitment ads Gases Controlled substances

21. Federal Grants Federal Grant Money has additional rules of how it is to be spent Grants & Contracts Accounting is the main contact Purchasing gets their approval for equipment purchases If spending towards the end of a grant, leave 8 weeks for procurement procedures to take place. Federal Grant $$ can be turned down if spent too close to the end of a grant.

22. Large Dollar Procurement - Over $5000 Submit requisitions for all purchases close to or over $5,000. Not all requisitions are bid. A bid waiver request must be submitted with requisition. Purchasing buyer determines if bidding. (Purchases from state or university contracts do not require bidding.) All restricted items MUST go on a Requisition Form found on Purchasing website or CIS www.purchasing.utah.edu www.purchasing.utah.edu Fill it out on-line, print, sign and fax to Purchasing Be descriptive and informative

24. Large Dollar Procurement – Solicitation Tools: Quotes (Request for Quotes) Bids (Invitation for Bids) Request for Proposals Use when price is not the most important factor Purchasing must pre-approve using this process Use RFP instructions, template and buyer at Purchasing

25. What Happens if it’s Bid? Step 1: Requisition gets routed to the buyer and buyer determines if bidding is required (State contracts and other justifications) Step 2: Buyer gathers bids - 3 or more sources Under $50,000; the buyer gets fax or phone bids will take about 3-7 days Over $50,000; will be posted to the online bid system will take about 10-25 days Step 3: Bid results are forwarded to department

26. What Happens if it’s Bid? – cont. Step 4: Department accepts low bid or justifies otherwise Step 5: Purchasing Department generates a PO Step 6: Purchasing Department sends PO to vendor Note: Contracts should be reviewed by the legal department before they are signed by departments

27. Modifications Purchase Order modifications are made on a Continuation Form Increase/decrease Remove encumbered funds Cancel PO Make changes to PO in any way Continuation Form found on Purchasing Department’s website Fill out and fax to Purchasing Department

28. It is UNLAWFUL for purchasing participants or contract administrators to ask for or receive a gratuity. It is UNLAWFUL for suppliers to offer or give a gratuity. Gratuities and Kickbacks, …

29. Gratuity means anything of value except promotional or hospitality items of less than $10 in value, such as: 1. Trinkets or promotional items such as a pen or pencil 2. Non-alcoholic beverages or snacks Gratuities & Kickbacks Don’t accept anything from a supplier if involved with a current procurement process.

30. Do NOT accept Gratuities or Kickbacks Restricted Gratuities include: 1. Meals: breakfast, lunch, dinner, other meals. 2. Tickets or admittance: movies, plays, concerts, sporting events, etc. 3. Lodging Gratuities & Kickbacks

31. Do NOT accept Gratuities or Kickbacks Kickbacks include: 1. Payment 2. Offer of employment 3. Anything of value Gratuities & Kickbacks

32. Is using your position as a procurement officer/person to influence: Decisions and approvals Awards and recommendations Procurement requirements Proceedings, ruling determinations Claims, controversies, or investigations to the benefit of you or your family members. Conflict of Interest

33. University policy 1-006 requires procurement participants to disclose significant financial interests in a business entity proposing to enter into a transaction with the University if the employee’s position may influence the outcome of a transaction decision. There should be no relationship with or bias towards any bidder that would prevent fair treatment of all bidders. Conflict of Interest

34. Resources Where do I find more information on…? Demonstration of CIS – Financial & Business Services Menu – Reports, Transaction Detail Search, Chartfields, Assets, Ship to Codes Who do I ask about…? Tour of Financial & Business Services Websites – Purchasing, Accounts Payable, Tax Services, General Accounting, Grants and Contracts, Property Accounting

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36. Remember The $5000 limit – must go through Purchasing if the total amount of the procurement exceeds $5000 Restricted items must go on a requisition Sales Tax Exemption No split transactions per Utah Procurement Code and University Policy