Revised 05/11/07

Purchasing Policy and Procedures

 1.00 Procurement Authority and Regulations

1.01 Procurement Authority

The procurement of supplies, materials, equipment, and services necessary for the operation of the University is the responsibility of the Office of Purchasing. This responsibility has been delegated to the Director of Purchasing and Central Services by the Vice President for Finance and Business Services and the Treasurer, in accordance with Resolution 84-59 of the Board of Trustees of Miami University.

No individual has the authority to enter into a contract for the purchase of goods or services, or otherwise obligate Miami University to purchase indebtedness, without at least one of the following:

• A resolution of the Board of Trustees; or,

• A specific delegation by the Vice President for Finance and Business Services in writing and on file with the Secretary of the University; or,

• A Purchase Order (PO) or other contract instrument issued by or under the direction of the Director of Purchasing and Central Services.

Negotiations conducted or commitments made without such authority do not obligate the University, but are the personal responsibility of the individual making the commitment, in accordance with Section 3.12 of the Ohio Revised Code.  Additionally, refer to www.muohio.edu/publications for publication titled ‘Rules for Contracting’ for further instructions.

Expenditures from all accounts, regardless of its source, are considered University funds and shall be administered in accordance with applicable University policy. Except for student organization funds (accounts beginning with 9300) and agency funds (accounts beginning with 9000) all purchases and expenditures shall be administered by the Office of Purchasing in a uniform manner, and in conformance with University procurement policies and procedures.

 1.02 General Purchasing Policy

Procurement responsibilities are divided between the Office of Purchasing, Bonham House, and its branch, the Office of Maintenance Purchasing and Central Stores, 181 Cole Service Building. The purchasing agents located in the Office of Maintenance Purchasing are responsible for procurement of supplies, materials, tools, and - equipment necessary for the operation and maintenance of the campus physical facilities. All other procurement activity for goods and services is handled by the Office Purchasing.

Purchases may be initiated by one of three methods: a Purchase Order (PO), a Limited Purchase Order (LPO) or by University Procurement Card (Master Card) .    LPO’s or Procurement Cards provide a decentralized system to conduct smaller dollar purchases directly from departments to chosen vendors. 

For larger purchases, the ordering department prepares a requisition outlining the requirements and forwards it to the Office of Purchasing. There, the responsible purchasing agent matches the request with existing contracts or obtains competitive bids/quotations and issues a PO for the materials or services.

An LPO, Procurement Card, or a PO must be issued prior to any commitment being made for the purchase of goods or providing of services, and the PO number and/or a hard copy of such order must be presented to the vendor or service provider at the time the purchase is made or contract is arranged. The Office of Purchasing will not issue POs after the fact to cover commitments, nor are departments permitted to do so with LPOs.

 1.03 Approval Signatures

A uniform, minimum signature requirement for approval of all requisitions, Limited Purchase Orders (LPOs), Procurement Card statements, travel reimbursement requests, and personal reimbursement requests has been adopted by the University and included as Appendix C. Any purchase commitment or transaction as described above must be approved and signed by authorized individuals in accordance with this policy. The policy allows for delegation of authority where appropriate. The policy does not permit the signing of authorized individuals' names by other individuals.

Charges to any grants, workshops, or other special academic accounts follow the same signature approval procedure as departmental accounts. Where accounts are being cited that are not under the control of the requisitioning department, the signature of the approving authority for the account being charged, or some correspondence attached showing the approving authority has approved the charge, must be obtained.

 1.04 Grants, Contracts, Excellence Awards

The purchase of goods and services for grants, contracts, and excellence awards is subject to the same policies and procedures as all other departmental procurement. When award of a major grant or contract that includes any significant purchases that appears imminent, it is suggested that the principal investigator contact the Manager of Academic Procurement in the Office of Purchasing, 9-9200, to discuss specific needs and requirements. Any additional requirements contingent to a grant or contract, such as Federal requirements may be applicable to the purchase activity and also may require additional processing time as part of any resultant bid notice or request for proposal.  All materials and equipment purchased under such grants, contracts, and awards are the property of Miami University unless otherwise agreed to in the contract between the University and the grantor or contractor.

 1.05 Regional Campus Purchasing

The Office of Purchasing is responsible for regional campus procurement and the policies and procedures outlined in this handbook are fully applicable to the Miami regional campuses. Limited Purchase Orders (LPOs) or Procurement Card for small orders are issued by the appropriate offices at the respective campuses. Issuance and use of LPOs shall be in accordance with the Limited Purchase Order Policy as outlined in Appendix A.  For emergency purchases exceeding LPO limits, an emergency Purchase Order authorization must be sought from the Director of Purchasing and Central Services. More information on emergency purchases may be found in 3.12.

 1.06 Student Organization Purchasing

Student organization funds (Account Index Codes ranging from 9300 to 9900) are considered expended when distributed, and expenditures from these funds are not subject to normal bid and contract requirements. To initiate a purchase or payment with student organization funds, a Student Organization Check Request form is prepared by the organization and signed by the organization treasurer and advisor. The form is then presented at the Accounts Payable Office, 107 Roudebush, where the funds are checked and an "S" number authorization slip is provided. The authorization slip is provided to the vendor at the time of purchase, and returned by the vendor to Accounts Payable, with the invoice.

Student organization accounts may not be used with LPOs and student organization accounts may not be cited on POs. However, the Office of Purchasing will, upon request, place orders via PO for items of equipment through State Contracts, IUC Agreements, University term contracts, or a competitive bid/quotations process.

 1.07 Agency Account Purchasing

Agency accounts (Account Index Codes ranging from 9000 to 9299) are not considered University funds, and expenditures from these accounts are not subject to University purchasing procedures.

Where agencies have funds on deposit with the University, the agency is responsible for placing their own orders, using agency letterhead or other suitable forms. All orders must be placed in the official name of the agency, not in the name of the University. Invoices should be addressed to the agency c/o Miami University at the proper University address. Payment is then requested by the agency representative using a Request for Payment requisition.

With few exceptions, University Purchase Orders (POs) will not be issued for agency accounts.  However, the Office of Purchasing will assist agencies in locating vendors or obtaining materials as requested. When it can be demonstrated that a significant advantage exists for an agency permanently located on campus and having a direct relationship with the University to use a State contract, IUC price agreement, or University term contact, a PO may be issued on individual approval of the Director of Purchasing and Central Services. The University purchasing process may not be used by permanent agencies to purchase any items for resale.

 1.08 University Stores

The Office of Purchasing operates a Central Stores where office and maintenance supplies are purchased in wholesale quantities, stored on campus, distributed, and charged to departments. The inventory of maintenance/hardware/cleaning supplies is significant, and departments must use University Stores as the primary source for these items. A limited selection of high use office supplies can be picked up at Wells Hall Mail and Office Services Center, or orders can be phoned or mailed in for weekly delivery. Maintenance supplies are available from the Storeroom, Cole Service Building. Inventory items are issued by interdepartmental charge.  A valid Banner Index code must be provided at the time of sale.  Monthly itemized statements showing items issued and amounts charged are furnished to departments, with the corresponding summary charge appearing on the departments' monthly accounting reports.

 1.09 Conflict of Interest

Any purchase transaction of the University is a "public contract." With few exceptions, Section 2921.42 of the Ohio Revised Code states:

• It is improper for any employee of the University to have an interest in the profits or benefits of a contract entered into by the University; and

• It is prohibited for employees of the University to use their position to "secure authorization of any public contract in which they, a member of their families, or any of their business associates has any interest."

In addition to the legal implications it is important that, as members of a public institution, University employees avoid transactions that might appear to be a conflict, even if technically no conflict exists.

Please refer to the University's Statement on Conflicts of Interest http://www.units.muohio.edu/secretary/policies_guidelines/policy_info_manual/, or questions regarding potential conflicts of interest in purchasing transactions, may be directed to the Director of Purchasing and Central Services, 9-9200.

 1.10 Personal Purchases

Ohio Law makes it improper for employees to use their influence to solicit or accept anything of value, or to receive any compensation (defined as money, thing of value, or financial benefit) for their work in the institution other than the remuneration provided by the institution. As such, it is improper for faculty or staff to do any of the following:

• Use the University procurement system as a conduit to order, pay for, then reimburse the University for personal purchases;

• Order in the name of the University then make personal payment to the vendor for items or services received; or

• Solicit University contractors to sell to them, or perform services for them, at prices or fees more favorable than those available to other individuals.

Additionally, University funds may not be used to upgrade or repair personally owned computers or other equipment, even if such items are used by employees in the performance of their job duties.

Several University contracts with microcomputer manufacturers or suppliers do include personal purchases at educational discounts by students, faculty, and staff. Any personal sales authorized in this manner are handled through the University Bookstore, Shriver Center.

 1.11 Vendor Presentations

The University receives numerous requests from vendors and manufacturers to allow them to hold demonstrations on campus, typically for the general information of University departments, staff, and/or students. While it is important that departments retain the freedom to meet with vendors, view their products, and learn of new processes and technologies, the University cannot sponsor or favor individual vendors and/or provide sales assistance, except where exclusive contracts have been awarded for the benefit of the University.

A specific policy regarding vendor presentations on campus has been adopted by the President and Vice Presidents. Additional information on the subject, or a copy of the policy, may be obtained by contacting the Office of Purchasing, 9-9200.

 1.12 Surplus Property

Section 114.45 of the Ohio Revised Code requires that "all service rendered and property transferred from one institution, department, improvement, or public service industry to another shall be paid for at its full value." The Attorney General's Office has ruled that:

• The University may not make a gift of any of its assets;

• The University is prohibited from donating its property not only to private concerns,

• but also to other state agencies and institutions; and,
• The University must receive "full value" for any property sold or exchanged.

The method by which property is obtained does not affect the means of disposal. Whether the property is purchased with restricted funds, grant monies, gift monies, or is an outright gift, it is the property of Miami University.

The Office of Purchasing has been designated as the responsible agency for the processing and disposal of items which are no longer needed or usable by Miami University. This centralization is important to insure compliance with applicable State statutes, and also to match the surplus of one University department with the needs of another. Departments should notify the Office of Purchasing whenever items become surplus for possible placement in other areas.

An auction of surplus University property is normally held twice yearly and is the primary means of property disposal. Surplus property will be solicited by the Office of Purchasing prior to the sale times. Departments having unique surplus items with limited markets should contact the Director of Purchasing and Central Services to arrange special solicitations. No sale of University property will be made to employees or other individuals except through the auction or other advertised sales.

2.00 Bids and Quotations

2.01 Bid Requirements

The Office of Purchasing has the dual responsibility of supporting the needs and requirements of the requestor, while at the same time fulfilling the requirements of the Ohio Revised Code, University purchasing policy, and generally recognized and published purchasing ethics. As a public institution, it is important that the Office of Purchasing ensure competition at all levels of procurement, and provide an opportunity for any capable vendor or service provider to quote on potential University purchases.

Effective July 1, 1997, the State of Ohio revised the requirements for competitive bidding by State agencies. Under these requirements, "competitive selection" is required for:

• Any single purchase of goods which exceeds $25,000.

• Any single purchase of services which exceeds $50,000

• Any purchase which, when combined with all other expenditures to that vendor in a fiscal year that were not awarded by competitive selection, would exceed $50,000.

The above requirements provide significant latitude for the University to make responsible purchasing decisions without the need for a formal bid process. At the same time, it would be totally inappropriate and poor business practice to allow purchases of up to $25,000 or contracts for services up to $50,000, without some form of competitive selection or a justification/approval process to ensure the purchase is clearly in the best interest of the University. With this in mind, the Vice President for Finance and Business Services has approved the following bid/quotation policy for Miami University:

These guidelines apply to all purchases except those being made from State contracts, Inter-University Council of Ohio Purchasing Agreements, or Miami University term contracts which have already been awarded as a result of a competitive proposal process.

In addition to the individual bid requirements listed, the aggregate total of all individual purchases made from a vendor in a fiscal year, that were not awarded by competitive selection, may not exceed $50,000, university-wide. Once this aggregate is reached, competitive quotations are required, regardless of the amount of purchase. Exceptions to this policy may be found in 2.03.

 2.02 Bid/Quotation Process

Except for construction and renovation projects, the State does not mandate a specific process for competitive selection. Generally, the competitive selection should consist of:

1. A written solicitation outlining the University’s needs, outlining the terms of the purchase, and the award criteria sent to prospective bidders;
2. Written responses received from prospective bidders; and
3. An evaluation made by the requestor and buyer, in writing whenever selecting other than the apparent lowest proposal.

Solicitations may be made in various formats including via a Request for Quote form (RFQ), letterhead format, invitation to bid format, or Request for Proposal (RFP) format. The form of solicitation will be determined by the respective purchasing agent in accordance with guidelines established by the Director of Purchasing and Central Services.

Except for simple price requests on a specific product or list of products, verbal solicitations should be avoided because it is essential that all prospective responders be provided the same information upon which to base their bid and it is easy to forget certain information or change an instruction when the information is given verbally.

Facsimile transmissions (faxes) are acceptable forms of written solicitations and responses for most competitive selection processes. Faxes are normally not acceptable for sealed bid openings and formal request for proposal processes.

2.03 Waiver of Competitive Selection/Single Source Procurement

Competitive selection requirements may be waived by the Vice President for Finance and Business Services, or their delegate, whenever, in their best judgment:

• An emergency situation exists, requiring immediate action to avoid damage or destruction to University property or facilities, or to avoid disruption to services vital to the operation of the University; or,
• It is deemed impractical, impossible, or otherwise of a substantial economic disadvantage to the University to seek such bids; or,
• The needs of the University are best served by purchase of a specific item or service that is available only from a single source; or,
• The product is available for purchase by the University from Government Services Administration (GSA) price schedules or other Cooperative Purchase Agreements of which the University is a party, and it is financially advantageous to the University to purchase from such agreements.

Requests for waiver of competitive bidding must be made in writing to the Director of Purchasing and Central Services, outlining the rationale for the request in specific terms and accompanied by supporting documentation. Requests above $5,000 but under the $50,000 aggregate will be approved/ disapproved by the Director of Purchasing. Requests over that amount will be referred, with a recommendation by the Director of Purchasing and Central Services, to the Vice President for Finance and Business Services for approval/disapproval.

Claims that a specified product is the "only one which can be found" are not sufficient justification for a single source purchase as the bid process will either serve to confirm those claims or uncover alternative solutions. Requestors must also be aware that the review, evaluation, and selection of a product without the involvement of Purchasing, followed by the preparation of a requisition with a "single source" justification supporting the selection, is not an acceptable substitute for a competitive selection process conducted by the Office of Purchasing, and will only serve to delay the purchase while such a process is conducted. Requests for more information may be addressed to the Director of Purchasing and Central Services, 9-9200.

 
2.04 Negotiation

In the public competitive selection environment under which the University operates, negotiation is to be used only as a secondary tool in a Request for Proposal (RFP) process to work out contract details and/or determine pricing for missing components or add-ons with the apparent best proposer at or toward the end of the evaluation phase. Until after responses are received

from all parties and quotes are tabulated, prices received from one vendor are not to be shared with another, and it is unethical to give a vendor the opportunity to beat another vendor’s offer.

 2.05 Buy Ohio Preference

Sections 125.09 and 125.11 of the Ohio Revised Code require that in the evaluation of bids, the University give preference to products which are "mined, excavated, produced, manufactured, raised, or grown" in the State of Ohio, or products offered by bidders who have a "significant Ohio presence," defined to mean that the bidders:

• "Have sales offices, divisions, sales outlets, or manufacturing facilities in Ohio or whose facilities demonstrate a significant capital investment in Ohio;

• Pay required taxes to the state of Ohio; and

• Are registered and licensed to do business in the state of Ohio with the Office of Secretary of State."

Any bids meeting the above criteria will be given a preference of up to five (5) percent over the lowest price "non-Ohio" bid submitted; except that such preference will not be applied against vendors from bordering states, unless those states have programs favoring their in-state bidders over "Ohio" vendors.

3.00 Purchasing Process

3.01 General

A successful procurement program depends upon effective communication - between the requestor and the purchasing agent. The purchasing agent is familiar with the various contracts, and aware of the price practices and discount levels of many vendors. The requestor can best evaluate suitability for intended use, product quality, and level of service. Prior to making any purchasing initiative or vendor contact, the requestor is encouraged to consult with the respective purchasing agent to discuss the best method of handling specific needs.

It is the policy of the University to carefully document all purchase transactions. In addition to any specific requirements for initiating a requisition, it is the responsibility of the requesting department and subsequent approvers to disclose the following business details on any and all purchase documents.

Who: The party who is the ultimate end user

What: A reasonable item description of items or services purchased

When: The date in which the item is purchased or the service is rendered. (i.e. conference date, or project start date)

Where: The campus location where the item purchased is delivered or the service is performed

Why: A reasonable description of the business purpose and reason for the item to be purchased or the services acquired

 3.02 Routine Purchases of $500 or less

Limited Purchase Orders (LPOs), or Procurement Cards issued directly by the requestor's department, are the preferred method of placing small orders for miscellaneous supplies, materials, and services, not otherwise restricted by the Director of Purchasing and Central Services. LPOs are limited to an aggregate amount per order of $500 plus shipping charges, except for certain types of approved transactions for which there is no limitation. Procurement Cards may be used similarly except the transaction limit is permitted for $1000 aggregate per transaction.  LPOs may be issued for mail orders, telephone orders, or customer pick-up- Appendix A clarifies the instructions, uses, restrictions, and limitations of LPOs.  Section 3.11 clarifies the instructions, uses, restrictions and limitations for Procurement Cards.

3.03 Routine Purchases above $500

For the purchase of routine supplies, materials, and small equipment totaling over $500, and for other transactions restricted from LPOs, a requisition is completed by the requesting department, approval signatures are obtained, and the requisition is forwarded to the Office of Purchasing. Detailed instructions for completing requisitions are contained in Appendix B.

Once the requisition is received in the Office of Purchasing, if the items are available on contract, the purchasing agent will verify and insert the vendor and prices and issue a Purchase Order (PO). This process typically takes only one or two days. If competitive quotations must be sought, solicitations are usually conducted made via mail by the Office of Purchasing. This process normally takes ten days to two weeks, depending upon the complexity of the purchase. -.

Realistic requirements on the part of the requestor are essential. Requestors are discouraged

from requesting expedited procedure unless it is absolutely necessary. Requestors wishing to be consulted prior to an award should so note when submitting their requisitions.

3.04 Major Purchases

When a major purchase is being considered, the requestor should contact the Director of Purchasing and Central Services, or the purchasing manager/agent assigned to that commodity, and indicates the basic requirements and potential vendors and sources. Purchasing Office staff will research State contract or IUC price agreement vendors, and suggest them as first contacts. The purchasing agent will work with the requestor to further define needs and develop an evaluation process. As soon as the market has been surveyed, and the requestor has a good feel for the level and type of equipment that will be required to meet its needs, the bid process may be initiated.

 At this point the requestor and the purchasing agent jointly define requirements in detail and write specifications for the needed equipment or items. Proposals will be solicited from at least three vendors/manufacturers asking them to offer equipment meeting the requirements and providing firm prices. (Even vendors on State contracts or IUC Price Agreements often offer better prices in response to formal bid requests.) Upon receipt of proposals, the evaluation process continues, measuring the formal proposals against the requestor's requirements and selecting the equipment/system best suited to the requestor's needs.

The major responsibility for evaluation and selection remains with the requestor. The University is not bound to accept the "low" bid, but can accept the most "responsive and responsible" bid, in the interest of the University. In this manner, the legal requirements are satisfied as well as the requestor's needs, and usually better pricing is obtained through increased competition.

With the complexity and high costs of equipment systems, preliminary investigation and evaluation by the requestor in anticipation of a purchase is extremely important. Because of this, there may be the tendency for some requestors to proceed too far into the procurement process on their own by soliciting proposals and prices, conducting a detailed evaluation, making a selection, and expecting the Office of Purchasing to support the decision and automatically issue a Purchase Order (PO). Where the item or system selected is available from several vendors, the purchase may be merely delayed while the Office of Purchasing checks the prices, attempts more favorable quotations, and/or conducts a formal bid solicitation.

In other instances, the purchase simply cannot be completed because competitive bid requirements were not met and a competitive bid process is no longer possible due to the search already being narrowed to a specific item or system available only from one source. When this occurs, everyone is unhappy.

Faculty and staff are cautioned not to solicit quotations or proceed through an evaluation/ decision process on their own. Although the Office of Purchasing is committed to ensuring that the needs and requirements of the requestors are met, it must also ensure that the transaction meets all procedural, legal, and ethical requirements of the Federal government, State and University. Competitive procurement requirements can be waived only under very limited circumstances, and failure to work through the Office of Purchasing will result in unnecessary delays and, potentially, unpleasant or impossible procurement situations.

 3.05 Blanket Purchase Orders

When departments are faced with numerous repetitive orders for miscellaneous requirements to a single vendor, or when departments have a requirement for a known quantity of an item or items to be delivered over a period of time, a Blanket Purchase Order (BPO) may be issued. Under this order, a requisition is forwarded to the Office of Purchasing indicating a vendor, item(s) or types of items to be ordered, dollar amount, and the period of time to be covered. After issuance of the order, the using department makes its requests as needed, giving the Purchase Order (PO) number each time. Invoices are paid against the order until the set dollar amount is exhausted. Requestors having requirements that they feel would be well served by BPOs should contact the appropriate buyer to discuss this purchasing method.

3.06 Term Contracts

In many instances, volume discounts are available to the University based upon quantities of items or like items to be ordered over time, or volumes of services to be performed. Specifications are written outlining the product(s) or service(s), estimated quantities, and method, frequency, and size of orders. Vendors then bid unit prices based upon these specifications, and a contract is awarded for items to be ordered or services to be performed over time, normally a one-year period. Whenever the items are needed or services required, a Purchase Order (PO) is written to the vendor at the agreed upon price.

State Contracts and IUC Price Agreements are all term contracts. In addition, the Office of Purchasing has numerous University term contracts based upon local requirements. Buyers will check existing term contracts whenever seeking a source to meet a department's requirement. This is a primary reason users should check with the appropriate buyer prior to investigating sources on their own.

Purchasing agents regularly review purchasing activity in their areas to see if a buying pattern suggests creation of a term contract to enable more effective purchasing. Departments having recurring requirements for goods or services that they feel would lend themselves to a term contract should contact the responsible buyer or the Director of Purchasing and Central Services.

 3.07 Purchases Requiring Installation

As new and replacement equipment is purchased for use on campus, the requirements for final delivery, set-up, and installation, and costs thereof, may be overlooked. On occasion, the cost of providing utilities, taking care of environmental needs, making necessary room modifications,

and installing equipment has substantially exceeded the dollars spent on the actual equipment purchase. Yet, no funds were allocated for such work when the equipment was approved and

ordered. As a result, departments and users were faced with long installation delays, as well as major unanticipated expenses that cut into other programs, at either the departmental, school, or divisional level.

Therefore, the Office of Purchasing has been requested by the Office of the Provost, Vice President of Finance and Business Services, and Physical Facilities Department to ensure that prior to ordering any equipment requiring installation, the following three conditions must be met:

• Any required space utilization approvals must be obtained;

• Any room, utility, and/or environmental systems modification work must be recognized and planned; and,

• The total costs of equipment procurement and installation must be recognized and funding identified.

To avoid delays in equipment procurement, departments are urged to make installation planning part of their equipment request and approval process. If a room change of use will be made, or additional utilities or room modifications are required, a Project and Space Utilization Request Form will also have to be initiated by the requesting department.

3.08 Order Follow-Up/Change Orders/Amendments

For Purchase Orders (POs), the Purchasing Office's responsibility does not end with placing the order. Order follow-up and assistance in resolving vendor problems is provided as required.

Upon receiving the departmental copy of the PO, the requestor should carefully review it to ensure that all information is correct. If there is any problem with the PO as written, the requestor should contact the purchasing agent immediately.

Any delivery time promised by the vendor is typed on the PO. If indicated delivery time presents a major problem, or if the delivery date passes without receiving the items and follow-up is required, the requestor should contact the purchasing agent before contacting the vendor.

Occasionally an order must be changed after issuance. It is extremely important from a contract, accounting viewpoint, and for the protection of all parties, that a written PO change be issued to reflect the modified order. Requestors should not initiate, accept, or approve changes to a PO without the purchasing agent’s concurrence.

Upon delivery, the requestor should perform the following procedures:

1. Check that all items on the packing slips are accounted for, and that nothing is damaged.

2. Save all packing slips, even if nothing is amiss.

3. If there is any damage, save all cartons and packaging.

4. Contact the buyer promptly regarding any problem(s).

5. When copies of the payment invoice are received from the Accounting Office, carefully check the items against the invoice. If there is any discrepancy, notify Accounting to hold payment, and contact the buyer for vendor follow-up.

6. File the packing slip and the invoice copy with the department's copy of the PO for future reference.

For Limited Purchase Orders (LPOs) or Procurement Card, order follow-up with the vendor is normally the responsibility of the ordering requestor or department. Requestors should contact the vendor directly regarding delivery status, merchandise problems, or pricing issues. If departments are unable to resolve the problem directly, they should contact the Office of Purchasing for assistance.

3.09 Payment Voucher Requests/Confirming Requisitions

Though most purchases require the issuance of Purchase Orders (POs), Limited Purchase Orders (LPOs), or Procurement Card prior to placement of an order or commitment, there are several types of transactions where an invoice is routinely issued prior to a commitment and the payment actually initiates the transaction; or where no PO is issued prior to the shipment of materials or completion of work, even though a contract was approved/entered into by the Office of Purchasing. The following transactions are approved for routine processing on Payment Voucher Request requisitions:

• Payment of maintenance contract renewals with the manufacturer or specified manufacturer's agent.
• Payment of ongoing software license and maintenance fees for products originally purchased/leased by a PO.
• Routine office machine maintenance arranged through the Office of Purchasing.
• Payment on various contracts previously bid and awarded or otherwise approved by Purchasing for which no PO was issued. Contract numbers should be cited on all confirming requisitions.
• Books and periodicals ordered from publishers or other subscription sources not accustomed to accepting POs.
• Miscellaneous small orders for publications, reprints, information, etc. from other universities, government agencies, etc., not accustomed to accepting POs.
• Reimbursement for small incidental purchases made for the department which could not be handled by any other routine procedure.
• Other routine transaction types approved in advance by the Director of Purchasing and Central Services.

Appendix B.082 contains detailed instructions on completing these requisitions.

Confirming Payment Voucher Request requisitions for purchases or contracts which were not approved in advance by the Vice President for Finance and Business Services, nor by the Director of Purchasing and Central Services, will be reviewed on a case-by-case basis for acceptance as an obligation of Miami University. Such requisitions are subject to rejection where the transaction violates state or local policy or where the materials or services were already available less expensively from existing contracts.

 
3.10 Prepayments

State statutes generally prohibit the University from making payment prior to receipt of merchandise or rendering of service. Routine prepayments are limited to subscriptions, small book orders, payment for membership or any renewal and conference/seminar registration fees. Other prepayments will be authorized only when absolutely required to complete a transaction that is clearly advantageous to the University.   Routine pre payments are preferred to be handled and processed with the departmental Procurement Card.

When using the Procurement Card for - prepayment, "proof of price" must be provided. This may be an order form, letter from the vendor, copy of an advertisement, copy of a catalog page, or a price list. Requestors should ensure that proof of price is current, and includes any shipping charges.

 
3.11 Purchasing Cards

Purchasing Cards are intended for department use to conduct small dollar procurement needs.  Specifically, the purchasing card is the preferred method for pre-payment, conference registration, airline ticket purchases and business use hotel room charges.  The card may also be used for on-line purchases (be sure the site is secure) and to supplement or replace LPO’s.

The Office of Purchasing is continuing to analyze the purchasing card program with the goal of providing a more useful and more efficient method for small dollar procurement needs. 

Limits: Departmental Cards - $1000 per transaction limit,  $8,000 monthly limit.   Minimum waived for travel.

The Department Card is a Master Card Purchasing Card with a low dollar limit for departments to conduct small purchases, supplementing the University’s limited purchase order (LPO) system and business travel use.  Card usage should be restricted to purchase transactions or commodities following the same guidelines as the Limited Purchase Order Policy, or as authorized by the Director of Purchasing. The preferred use of the purchasing cards include conference registrations, certain travel expenses, automobile rental, orders requiring prepayment, purchases from retail stores with cumbersome open account requirements, small purchases from companies where the University does not have an account, on-line ordering vendors, etc.  Examples of approved use for the card include laboratory supplies, books, and periodicals.  Also, non-capitalized equipment (subject to individual departmental policies for tracking and recording) such as hand tools, cameras, sporting goods, or calculators. The Director of Purchasing may authorize higher transaction limits for specific cards to meet certain specific procurement needs. 

Issuance

Cards will be issued in the name of the University, the department, and a responsible individual (Chair/Director) within the department.  Normally one card will be issued per department in the name of the chair or director, with the card then entrusted to the departmental administrative staff to manage.  The chair or director may also designate a business officer, secretary, or account clerk as the cardholder.  The cardholder would then provide the card or the number to individuals within the department to make purchases in much the same manner that an LPO is delegated. 

Where needs warrant, additional departmental cards may be issued for an assistant chair/director, or other person specifically authorized by the department chair/director to approve and make small purchases on behalf of the department.  To be a cardholder, a person must have signature authority granted under the University LPO/Requisition policy.

Even though each card will have an individual cardholder’s name, the department and the University, not the cardholder, is responsible to the issuing bank for the card payment.  The card in no way will reflect on the individuals personal credit records.  The cardholder will be responsible to the University for proper card usage, and for reconciling monthly charges made on the card.  If the card is being used in person by an individual other than the card-holder, the merchant may require additional identification or an authorization slip to complete the sale.

To obtain a card, the cardholder will have to complete a purchasing card application (Appendix A). If the cardholder is other than the department chair/director, it requires the approval of the chair/ director.  All applications are subject to approval by the Director of Purchasing prior to issuance.  At the time the card is issued and received, the cardholder will complete a purchasing card agreement (Appendix B).

General Use

Needs and use will be discussed with the individual department to which the card is to be assigned prior to issuance.  Items eligible for LPO usage which will not be approved for departmental purchasing card at this time include:

• hosting and entertainment expenses
• meals during travel status (traveler to be reimbursed per diem by travel policy)

Items restricted from LPO usage, and thus from purchasing card usage as well include: 

• Movable Equipment (Capitalized exceeding $1200.00),
• furniture, furnishings, carpet, window treatments,
• telecommunications equipment and devices,
• business cards, letterheads, envelopes,
• items available in University stores or office supply room,
• building repair, painting, renovation/remodeling
• payment of consultants, speakers, etc.
• contracting for temporary employment services,
• reimbursements to or purchases from University employees,
• other purchases restricted and published by the Director of Purchasing

The Director of Purchasing may authorize one or more of the above restrictions for certain cardholders/departments whose duties include specifying and procuring that commodity for the University.  Any such authorization must be in writing and made in advance of the transaction. 

Making a University related purchase with the Master Card Purchasing Card is similar to using any credit card.  An order for goods is placed with a supplier either by mail, phone, fax, secure Internet site, or in person.  The supplier processes the transaction as they would any consumer credit card purchase through the Master Card network.  Please be sure to clarify with the vendor that each transaction is tax exempt.  Refer to the transaction instructions that follow. 

Master Card regulations require the supplier must ship the goods before a transaction is processed.

Any goods ordered by MasterCard must include the shipping instructions to a valid Miami University campus address, department name and building.  Do not consign delivery to Central Receiving.

Please note it is the responsibility of the department card holder that charge slips, itemized sales tickets, and/or packing slips be collected by the cardholder for each transaction, and held for a reconciliation process to be done once monthly on receipt of the memo billing.

Travel Expenses

The Master Card may be used for certain university authorized travel expenses at the approval and discretion of the departmental chair or director in whose name the Master Card is held.   The Master Card may be used for travel related expenses without limit for conference registration fees, air travel tickets (either agency or internet), hotel/lodging/meeting rooms for official University travel/business.  Reporting for travel expenses must be included with the individuals Travel Expense Report as a non-reimbursable item. The Master Card may not be used for any personal expenses per the travel policy.

Rental Car may be processed by Master card as well, provided expenses are approved in accordance with departmental and university policy.  Reporting for car rental expenses must be included with the individuals Travel Expense Report as a non-reimbursable item.

Record Keeping

Issuance and use of a purchasing card requires the cardholder to maintain card purchase records and individual receipts for each transaction.  Records should be kept on a monthly basis coinciding with the individual card billing cycle. Individual receipts must be obtained from the supplier for each purchase, and kept for reconciliation.  Once monthly, the memo billing and individual receipts will be reconciled by the cardholder and forwarded to the Office of Purchasing for review and distribution of charges, in accordance with reconciliation procedures.

In general, departments should treat card purchases the same as an LPO authorization, with the card and related documentation held by the individual primarily responsible for LPOs and requisitions (the cardholder).  Faculty and staff wanting to make a purchase shall receive authorization from the cardholder and the cardholder determines if a purchasing card transaction is authorized and advantageous to an LPO for the requested purchase. At the time of the purchase, the purchaser must inform the seller that the sale is tax exempt, and presents or completes a tax exemption form if requested.  The card and charge slip with itemized receipt are then returned to the cardholder when the purchase is complete.

It is extremely important that the department cardholders obtain the charge slips and cash register tapes/itemized invoice from the individual buyers.  In the event that an individual charge slip and/or cash register receipt is lost, a Master Card Purchasing Card Lost Sales Slip Report (Appendix D) shall be completed and certified by the purchaser and approved by the department head.  For large purchases, the department may be required to obtain duplicate copies, with the costs of obtaining such paid for by the department.  Repetitive incidents of lost sales slips may result in revocation of card privileges for individual purchasers or the department. 

Payment

Each month at the end of the billing cycle, the Office of Purchasing will receive a consolidated electronic invoice for all monthly credit card purchases from Fifth Third Bank.  At the same time each the cardholder will receive a billing statement for all charges to their card.

Upon receipt of the memo statement, the department cardholder reconciles the statement on line.  The cardholder must ensure that each charge is valid and accounted for, and should also check that no tax is charged.  Each purchasing card is assigned a default Banner index number, normally the department's main account.  If the charge is to be made to that account, no entry is required on the envelope in the column marked ABanner Account@.  If the charge is to be made to other than the default account, the proper Banner Index/account number must be entered.

After reconciliation, the cardholder obtains the signature of the department head or other signature authority authorized for the total amount, makes a copy of the exterior form for their files, and forwards the envelope to Purchasing.  The folders must be received in Purchasing within seven (7) days after receipt of the memo billing in the department.

The Purchasing Office will review the purchases for appropriateness. This document is then copied into an Excel spreadsheet and prepared for an automated payment voucher upload to charge to the proper accounts. The spreadsheet must include the following at minimum; the actual end user name, a reasonable description of the item(s) purchased, the location of the property or destination (if traveling), the date purchased or date of travel, and the business purpose of the purchase or travel itinery.

The completed spreadsheets and original documentation is then forwarded to Accounts Payable for posting.    All monthly charges to an account for the 5/3 Purchasing Card purchases will be reflected in a single entry on the Banner reports as A5/3 Purchasing Card Purchases. In the event that a department fails to submit their purchasing card charges in a timely manner, to allow payment of the bill in accordance with the University's agreement with 5/3 Bank, all charges against the department's card will be processed and posted to their card default account, and the department will be responsible for initiating any journal voucher entries to correct the charges.

Responsibility

The department chair/director and cardholder are responsible for the security and the appropriate use of their assigned card.  The card is issued in the department name and it will be assumed that any purchases made against the card have been properly authorized unless the card is reported lost or stolen prior to use.  Use of the card not in accordance with University policies and procedures, or failure of the cardholder or his/her designee to properly account for purchases and reconcile the statement in a timely manner each month, may result in card revocation, personal liability to the University, and/or disciplinary action. 

Appropriate use of the procurement card includes a consistent and reliable report and reconsolidation of the monthly reports The following requirements at minimum must be included in procurement card reporting. Specific training is provided by the Office of Purchasing on completing monthly reports.

Who The party who is the ultimate end user

What A reasonable item description of items or services purchased

When The date in which the item is purchased or the service is rendered. (i.e. conference date, or project start date)

Where The campus location where the item purchased is delivered or the service is performed

Why A reasonable description of the business purpose and reason for the item to be purchased or the services acquired

Should a cardholder terminate employment with the University or transfer between departments, the user department has the specific obligation to reclaim the credit card and return it to the Purchasing Office prior to the employee’s termination date.

 

4.00 Specific Purchasing Transactions

Special guidelines must be followed in performing certain purchasing transactions. These transactions and the appropriate procedures are described below.

4.01 Air Travel Tickets

There are several factors involved in the purchase of airline tickets. Travel Policy and Procedures 6.00 contains a detailed discussion of the policies and procedures regarding such purchases.

4.02 Business Cards, Envelopes, Letterhead

The University has adopted a standardized format to be used for business cards, envelope return addresses, and letterhead stationery. Use of this format is mandatory for all departments. The Department of IT Services, Print Center provides for the production and distribution of business cards by on line ordering system. Envelopes and Stationary are provided by contracts maintained in Purchasing and those orders should be placed via Request for Purchase Order requisitions to the Office of Purchasing. Users desiring more information on the standardized design, pricing, and ordering guidelines are encouraged to contact the Print Center at 9-6065 or the Purchasing Agent, 9-9206.

4.03 Consulting, Professional Services

Contracts for most consulting and professional services are subject to the same procurement policies and considerations as those of any other purchase, including the requirement for competitive selection. When contracting with individuals, rather than firms, IRS regulations require an "independent contractor versus employee" evaluation. Non-Employee Payment Policy and Procedures 4.00 contains more information on this subject.

4.04 Samples or Merchandise on Approval

Books, software, and other media are frequently offered and ordered subject to 30-day or similar trial periods. When ordering such items, either a Purchase Order (PO) or a Limited Purchase Order (LPO), depending upon the amount, should be issued and furnished to the vendor, just as would be done for a regular purchase. In the description area of the LPO or requisition, the requestor should clearly indicate "Purchase for 30 day trial only -- Subject to return." This will ensure that the shipment and invoices can be properly identified. If the merchandise is not kept, the requestor should notify the Office of Purchasing so that the LPO or PO can then be canceled.

Sample material items are occasionally required for Physical Facilities Projects or other similar purposes.  A sample item, if so requested by a University Department, is subject to issuance of an appropriate LPO (zero dollars) that identifies the item(s) requested as a “sample only and subject to return, This is NOT an order”.  Also the LPO should display the requestor, and campus delivery location. Any returns should be coordinated with the Central Receiving Department 9-7038.

4.05 Microcomputers, Peripherals - revised 5/22/06

Standards and specifications for microcomputers, computing equipment and peripherals must be coordinated and approved through the Vice President for Information Technology, who is responsible for the oversight and management of the university’s IT assets. “IT Equipment” is defined as desktop computers, laptop computers, servers, storage devices, network and communications devices, research computers or workstations, displays, printers, electronic multimedia devices, personal mobile devices and any other equipment designated by the Vice President for Information Technology. Without prior approval by the Vice President for Information Technology, acquisition of IT assets by departments as defined herein are unauthorized.

The University maintains and coordinates contracts and agreements for the purchase of approved and supported hardware and peripherals that result in exceptional discounts and improved overall support. Certain makes and models of computers and associated hardware have been adopted as standards for use at the University. Request for Purchase Order requisitions should be sent to the Vice President for Information Technology or their designee for standards and specification review and approval prior to issuance of a purchase order by the Purchasing office. The requisition should be accompanied by an IT Purchase Cover Form available from the IT Purchases website at http://www.muohio.edu/itpurchases/ Equipment that adheres to the standard configurations described on the website as Desktop/Laptop Bundles are automatically pre-approved for use on campus.  If you have questions, please contact Bob Black, blackrw@muohio.edu or 529-1593.

LPOs and credit cards may not be used for the purchase of desktop computers, laptops, servers, monitors/displays, printers, and network equipment. These items must be selected via the web page cited above, or otherwise described via requisition sent to the Vice President for Information Technology or his designee.

4.06 Office Furnishings

The Office of Purchasing follows a set of informal standards in the selection and purchase of office furnishings that has been supported by the University Administration over many years of use. These standards are guided by functionality, appearance, durability, cost, and individual duties while being mindful of and respecting individual roles and surrounding architecture and environment. Requestors desiring more information on these standards are encouraged to contact the Furniture Buyer in the Office of Purchasing, 9-9200, or the Space Planner/Interior Designers in the Office of the University Architect, 9-1676 or 9-2361.

Through IUC Price Agreements the University obtains exceptional discounts on quality office furnishings. Common items in basic colors and upholstery are available in ten days to two weeks after placement of order. Other items are manufactured to order with lead times of 60 to 120 days. It is important that departments plan for furnishing requirements in advance of the needs to allow for contract lead times.

For emergency needs, the Physical Facilities Department maintains a small inventory of used office furnishings. Should some unforeseen need arise; requestors may contact the Office of Trucking Services, 9-7035, for information on availability.

4.08 Physical Facilities Purchases

All work on University facilities and building equipment, including maintenance, repairs, remodeling, minor and major construction, and decorating must be accomplished through the Physical Facilities Department.

Separate procedures and forms for purchase requisitions have been developed for use within and between the Physical Facilities Department and the Office of Maintenance Purchasing and Central Stores. Those procedures supersede certain information contained in this handbook, and should be followed by Physical Facilities personnel. Requestors desiring more information about Physical Facilities purchases should direct their questions to the Manager of Maintenance Purchasing, at 9-6132, or the Facilities Contract Administrator, at 9-1697.

4.09 Printing and Publications

In addition to normal procurement policy and regulation, contracts for printing and publications are restricted by Section 3345.10 of the Ohio Revised Code to contractors having manufacturing facilities in the State of Ohio. This applies to both Limited Purchase Order (LPO) and Purchase Order (PO) transactions.

Departments having requirements for printing and publications should work through the IT  Printing Manager, 9-6013, or the Director of University Publications, 9-7596, as appropriate, for assistance with specifications and vendor selection. For assistance with office forms, requestors may contact the Printing Buyer in the Office of Purchasing, 9-9206.

Once specifications are determined, a Request for Purchase Order requisition and specifications should be forwarded to the Printing Buyer for bids or quotes and issuance of a PO.

 4.10 Rentals and Leasing - revised 5/22/2006

All IT-related rentals and leases require prior review and approval by the Vice President for Information Technology, who is charged with the oversight and management of the university’s IT purchases. Such agreements should be forwarded to the Vice President for Information Technology or their designee, who will coordinate with the Purchasing Department for the bidding and contracting process as required.

Any rental or lease agreements are subject to the same guidelines as the purchase of goods or services, including the requirement to seek competitive bids or proposals. The total of all payments to be made over the life of the lease or rental shall be the “purchase” amount for the purpose of applying competitive bid requirements. Questions regarding rental or lease agreements should be addressed to the Director of Purchasing and Central Services, 529-9200.

 4.11 Software, Information Databases, Application Systems, IT Consultants, IT Contracts (web services, application or database programmers, etc.) - revised 5/22/2006

The University maintains and coordinates contracts and agreements for the purchase of approved and supported software that result in exceptional discounts and improved overall support. Most packaged microcomputer software from major publishers is available, under various education discounts for University use. Software agreements may include provisions for individual sales, some requiring the consolidation of orders for volume discounts, and some as site licenses. Any packaged software from major publishers, and all software from other publishers selling for over $100 should be checked first ordered via the web page at http://www.muohio.edu/itpurchases/ and processed by a Request for Purchase Order requisition and forwarded to the Vice President for Information Technology for review and approval, prior to the issuance of a Purchase Order via the Office of Purchasing. Software from small publishers with a sales price under $100 may be ordered on Limited Purchase Orders (LPOs) or Procurement Cards.

The purchase, rental, or lease of software, information databases, application systems, IT consultants, and IT contracts (e.g., for web services, application or database programmers, etc.) must be coordinated and approved through the Vice President for Information Technology. Without prior approval by the Vice President for Information Technology, purchases by departments are unauthorized.

Requests for needs of this nature shall be made through the Office of the Vice President for Information Technology, who will assist the requestor in determining the scope and specifications to meet the need. Any IT related applications to be developed must be reviewed for compatibility and appropriateness in the University’s IT network infrastructure, as well as being reviewed by the Office of the Information Security Officer. The purchase, rental, or contracting of services for developing applications and/or databases are otherwise subject to the requirement to seek out competitive bids or proposals, conducted by the Purchasing Department.

Requestors desiring more information on these subjects may direct their questions to Bob Black, blackrw@muohio.edu, or 529-1593.

4.12 Telephone Equipment, Cellular Phones, Pagers - revised 5/22/2006

Purchases of telephones and other telecommunications equipment and services must be made through the Vice President for Information Technology, Office of Telecommunications, to ensure compatibility with the University telephone system. Interested parties should contact the Manager of Telecommunications or the Assistant Manager of Telecommunications for Operations, both at 529-3511, for assistance. Without prior approval by IT Services Office of Telecommunications, purchases of telecommunications equipment by departments are unauthorized.

T Services Office of Telecommunications maintains agreements and term contracts for cellular telephone and radio pager rentals at significant discounts. All requests for these services are to be made to IT Services Office of Telecommunications, which will arrange for the individual pager rentals and set up the proper billing through the University telephone system. Further information may be obtained by contacting IT Services Office of Telecommunication.

4.13 Used Equipment

Occasionally departments find that their needs can be well served by the purchase of used or "demo" equipment. The purchase of used equipment follows the same policies and procedures as that of new equipment, including the requirement for competitive bidding when applicable due to the amount of the purchase. Used equipment may also be purchased from individuals, subject to conflict of interest restrictions (as described in 1.09) and proof of ownership. All purchases of used equipment are subject to review and approval by the Office of Purchasing prior to any commitment.

4.14 Emergencies

The Office of Purchasing is prepared to assist and work with requestors to obtain required materials or services when true emergencies exist or expedited procedures are otherwise required. The Director of Purchasing and Central Services may waive certain policies or procedures within its control if conditions warrant. Whatever the cause of the emergency, departments must work through the Office of Purchasing, explaining the circumstances, and requesting assistance to arrive at a viable solution. Departments cannot make transactions without authority and later justify them as an emergency. The Director of Purchasing and Central Services is under no obligation to assume responsibility for transactions made without authority by after-the-fact approval.

 When the situation requires, and bidding restrictions are not a concern, the Office of Purchasing can issue a standard Purchase Order (PO) immediately upon presentation of a properly signed requisition. - However, requestors must remember that an error on their part does not automatically constitute an emergency on the part of the Office of Purchasing.