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Procurement Policies & Procedures
Organization & Requirements
UNIVERSITY ORGANIZATION FOR PROCUREMENT
A. Authority
B. Authority to Obligate the University
C. Approving Authority for Certain Actions
D. Centralization and Authority Delegation for Procurement
E. Limitations
F. Purchasing Objective: Greatest Value for Funds Expended
G. Conflict of Interest in Procurement
H. Receiving and Interviewing Sales Representatives
I. Unauthorized Purchases
PROCUREMENT DEPARTMENT
A. The Procurement Department has been Assigned Definite Responsibilities
B. Achieving and Maintaining a Successful Procurement Operation
C. Availability of Funds
D. Coordination of Procurement Functions among System Institutions and Schools
E. Lifecycle Costs
F. Council of Buyers
GENERAL PROCUREMENT REQUIREMENTS
A. Competitive Bidding and Specifications
B. Invitation to Bid
C. Minimum Notice and Number of Bids
D. Bid Withdrawal, Bid Revision, and Bid Rejection
E. Acceptance of Bids
F. Protested Bids
G. Tie Bids
H. Articles and Services on State Contract
I. State Manufactured Articles and Services
J. Sole Source and Proprietary Purchases
K. Purchases for Resale in Auxiliary Enterprises
L. Purchases for Libraries, Excluding Materials and Supplies Identified for Consumption
by the Library
M. Data Processing and Related Equipment Purchases
N. Prohibited Transactions
O. Disposal or Surplus Personal Property
P. Government/State Surplus Property
Q. Property Loss and Theft
R. Reports
S. Procurement Records
T. Contracts and Agreements
U. Utility Contracts
V. Purchase Requisition
W. Alcohol, Drugs, and Hazardous Merchandise
X. Exceptions Policies and Guidelines Applicable to This Manual
GENERAL OVERVIEW
A. Vendors Mailing List
B. Selection of Vendors
D. Supply Sources for Unusual Items
E. Previous History for Commodities
F. Pool or Cooperative Buying
G. Establishment of Current Prices
H. Price as a Function of Value
I. Factors in Selection of Major Equipment
J. Equipment Maintenance K. Standardization of Common-Use Items
L. Determination of Quality Specifications
M. Revision of Order Quantities
N. Economical Order Quantities
O. Consolidation of Purchases
P. Repetitive Orders
Q. Price Inquiry by Departments
R. Split Purchases
S. Bid Bond or Check
T. Performance Bond
U. Evaluation and Award
V. Samples
W. Change Order
X. Emergency Purchases
Y. Complaint to Vendor
SHIPPING AND RECEIVING
A. Receiving Reports
B. Orders Past Delivery Date
C. Partial Filled Orders/Shipments
D. Duplicate Orders/Shipments
E. Unidentified Shipments/Orders
F. Damage Claims
G. Inspecting and Checking of Items Received by Departments
H. Order(s) Picked Up from Vendor
I. Delivery to Department
J. Return of Supplies or Equipment
PAYMENT OF INVOICES
A. Invoices
B. Documents Required for Payment
C. Prepayment
D. Partial Payments
E. Special Disbursement
F. Processing Payments (authorized purchase order)
GIFTS AND DONATIONS
A. Purpose
B. Authority
C. Gifts Other Than Cash
D. Department Actions
E. Office of Development Actions
F. Procurement Department Actions
G. Real Property and Testamentary Gifts
H. Tennessee Board of Regents Approval
MISCELLANEOUS PURCHASING MATTERS
A. Sales Tax Exemption
B. Loan of Equipment
C. Removal of Equipment/Property From University Premises for Personal Use
D. Minority and Small Businesses
E. Removal/Suspension from Vendors List
F. Buyer
G. Procedure for Bond Fund Projects
Tennessee State University
Purchasing Policies and Procedures
INTRODUCTION
This manual is for general use of University personnel to comply with purchasing policies and procedures. It is not intended to inform the General University population of the technical and/or legal requirements of Procurement in such technical processes as contracts, bidding procedures, etc. However, in some instances, departments must furnish technical information data to ensure that the department receives satisfactory materials to accomplish its intended purposes and mission(s). Accordingly, users of this manual have an obligation to check with Procurement at all times to ensure that any information contained herein is the latest. Procurement will initiate and distribute any changes in policies and procedures contained herein resulting from University, TBR, or legal changes without notice to departments.
These policies and procedures have been made as simple as possible and meet the requirements of State of Tennessee laws, policies of the Tennessee Board of Regents (TBR) and adopted University policies, good business practice, and special requirements adopted from time-to-time by various agencies from which the University secures funds for special programs. These procedures are meant to cover most cases involving procurement for Tennessee State University, and are generally consistent with those of similar State institutions of higher education.
The University considers its vendors to be valuable assets. It attempts to administer buying practices within established policy so that all suppliers are considered and dealt with ethically. The best ones will be awarded shares of the services rendered and ultimate, long-range benefit to the University as a whole. All savings, including cash discounts, achieved by combining purchases, using buying power of the University as a whole, or in developing larger quantities per order by the cooperation of any department, as well as with other institutions under the governance of the Tennessee Board of regents, such actions will benefit the departmental or project budget which provides the funds for purchases.
The purchasing function as defined by statutes is extended to induce the total supply and/or materials management concept involving such related activities as central receiving and inspection of materials and equipment.
Standardization and simplification of products and procedures also may result in substantial and repetitive savings to the individual department budget.
UNIVERSITY ORGANIZATION FOR PROCUREMENT
A. Authority
Chapter 115, Public Act of the 86th General Assembly of the State of Tennessee, 1969 Session, is the basis for the University's purchasing authority and responsibility as administered by the Tennessee Board of Regents, pursuant to Article 6, Section 2 (g), and Article 7, Section 2 (a) of the bylaws of the Tennessee Board of Regents.
The following policies and procedures are adopted as minimum standards for exercise by the President of the University or his/her designee in accord with the authority delegated to institutions by the State University and Community College System of Tennessee, as set forth in Tennessee Board of Regents Policy No. 4:02:10:00.
B. Authority to Obligate the University
The President, Vice President for Business and Finance, and Director of Procurement are the only persons authorized to obligate the University. Without definite and prior written permission, no University department may order directly by letter, telephone, telegraph, or in any other manner. The University will assume no obligation except in a previously issued and duly authorized purchase order.
C. Approving Authority for Certain Actions
The Vice President for Business and Finance or the Director of Procurement shall be the approving authority for the following actions only when substantial written justification is submitted:
1. Award Other Than Low Bid
2. Sole Source/Proprietary Purchase
3. Emergency Purchases
D. Centralization and Authority Delegation for Procurement
The responsibility for all procurement, contract negotiations and administration of purchasing policies and procedures has been centralized and delegated to the Director of Procurement.
E. Limitations
Pursuant to these policies and procedures, the following purchases are not included, and shall be expressly subject to the approval of the Chancellor or his designee, Tennessee Board of Regents:
1. Purchase or lease of real property.
2. Purchase or lease of data processing equipment.
3. Purchase of insurance.
4. Purchase of professional and/or consultative services.
5. Purchase of capital outlay projects from any fund source whatsoever.
F. Procurement Objective: Greatest Value for Funds Expended
The expenditures of all Tennessee State University funds regardless of the source shall be made in accordance with established University policies and procedures, and Tennessee Board of Regents' regulations. Particular care shall be exercised to comply with federal laws as well as any applicable contract requirements or special terms of grants and donations. All funds shall be handled so that the greatest ultimate value per dollar expended is achieved.
G. Conflict of Interest in Procurement
No officer or employee of the Procurement Department, or any member of any department head, or any project head of the institution, charged with the responsibility of initiation requisitions; shall accept or receive directly or indirectly from any person, firm, or corporation to where any contract for the purchase of materials, supplies, or equipment for Tennessee State University, may be rewarded by rebate, gifts, or otherwise any money or anything of value whatsoever, or any promise, obligation, or contract for future rewards or compensation.
H. Receiving and Interviewing Sales Representatives
University personnel having a need to contact sales representatives for a particular brand name or product should contact the Procurement Department for assistance. Sales representatives contacting University personnel without being scheduled through the Procurement Department should be encouraged to contact the Procurement Department. When sales representatives possess information concerning new products or special value, they will be referred to appropriate offices.
All sales representatives visiting the Procurement Department are required to sign the Sign-In Register on each visit, irrespective to the number of visits.
I. Unauthorized Purchases
No individual has the authority to enter into purchase contracts or in any way to obligate Tennessee State University for procurement indebtedness unless specifically authorized to do so by the President, Vice President for Business and Finance, or the Director of Procurement. Any such negotiations are considered unauthorized purchases and the individual may encounter a personal obligation to the vendor. Firms ordinarily doing business with the University are aware of this policy and are advised that all purchases legally chargeable to Tennessee State University must be authorized by an official Tennessee State University purchase order signed by an authorized buyer. Exclusive of the debit voucher procedure, the University will not reimburse officers or employees for the cost of any such purchases on behalf of the University unless previous arrangements to that end have been made.
PROCUREMENT DEPARTMENT
Tennessee State University's Procurement Department is organized and administered as a functioning area under the University's Business and Finance Division.
The function of the Procurement Department is to organize and administer procurement for all departments of the University in accordance with the responsibility and authority delegated by the President and Tennessee Board of Regents.
The Procurement Department must work and coordinate with hundreds of individuals within the University and with thousands of vendors in supplying complex requirements economically, effectively, and as promptly as circumstances will allow.
The Procurement Department shares in certain responsibilities with the Finance and Accounting Office, Budget Office, and other University administrative offices in expending University funds.
A. The Procurement Department has been Assigned Definite Responsibilities:
1. Procurement of materials, supplies, equipment and services for all University departments.
2. Testing and evaluation of various commodities to insure proper balance of quality and monetary expenditures.
3. Expedite delivery of urgently needed goods and services.
4. Refer information about new or improved products to departments using these products.
5. Inform departments of exceptional buys on selected commodities.
6. To exercise prudent controls and maintain surveillance over all purchases and purchasing related activities to insure compliance with the State statutes, regulations, Tennessee Board of Regents, and such other policies and procedures as may be adopted by the University.
7. To assist in planning for acquisition of materials, supplies, equipment, or services, if the needs of a department are complicated or extensive or if a major project is being planned.
8. To insure uniform enforcement of contractual obligations for all firms having University contracts.
9. To stimulate interest in bidding by all responsible vendors who can furnish material, equipment, supplies, and services meeting University specifications.
10. To offer full opportunity for all qualified bidders to compete for University business on an equal basis.
11. To offer full opportunity to all qualified minority vendors.
12. To encourage fair and open competition among bidders.
13. To enable University personnel to understand policies and procedures by annual workshops or other appropriate means.
14. To obtain maximum value for each dollar spent by the University.
15. To assure compliance with University record and retention policies.
B. Achieving and Maintaining a Successful Procurement Operation
In order to achieve and maintain a successful purchasing operation, departments should:
1. Follow the procedures prescribed in this manual.
2. Plan their needs well in advance.
3. Describe accurately on purchase requisitions quantity, quality, and detailed specifications of the item needed.
4. Initiate purchase requisitions forty-five (45) to sixty (60) days in advance of the desired date needed.
5. Indicate on the purchase requisition the actual date (ASAP, Immediately and Emergency, are not dates), and location (room) to which items are to be delivered.
6. Use the correct account number and object code.
7. Obtain all required approvals on the purchase requisition.
C. Availability of Funds
No purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase.
D. Coordination of Procurement Functions among System Institutions and Schools
In all contracts and other bid processes, consideration will be given to such wording that would allow other Tennessee Board of Regents member institutions and schools to purchase under the terms and conditions of the bid awarded by the University.
E. Lifecycle Costs
Lifecycle costs will be used in contracting for major energy-consuming products, and in the case where a lifecycle cost and/or energy efficiency standard has been developed for a product by the federal government apply such lifecycle cost and/or energy efficiency standard in the determination of the lowest qualified and responsible bidder.
F. Council of Buyers
The Director of Procurement is the University representative on the Tennessee Board of Regents Council of Buyers.
GENERAL PURCHASING REQUIREMENTS
A. Competitive Bidding and Specifications
All purchases shall be based upon the principle of competitive bidding except as herein provided. Required documentation related to competitive bidding shall be routed through the institution’s procurement/contract office, prior to the purchase, to ensure compliance with applicable policies and guidelines. Unless original signatures are otherwise required (e.g., easements, deeds and other real property documents), electronic procurement is permitted for formal procurements when the required rules and procedures are developed in accordance with TBR Guideline B-095, and TCA §12-3-704, which provides that state agencies shall not require small and minority owned businesses to receive or respond to invitations to bid/request for quotations or request for proposals, or other solicitations electronically. Whenever possible, all specifications for materials, supplies, equipment and services shall be worded or designed so as to permit open and competitive bidding for the supplying of the article, commodities or services to which they apply. For all RFPs and RFQs exceeding $100,000, written certification from the author or committee that the specifications, to the best of their knowledge, are not proprietary shall be documented in the bid file. It is the responsibility of the procurement officer to ensure all competitive bidding is considered fair and open in a bid process. It will be considered open and competitive bidding by utilizing one of the following procurement techniques:
1. Requests for Quotation (RFQ)/Invitation to Bid (ITB) – a competitive process soliciting bids from possible suppliers for a one-time procurement of product(s) and/or service(s).
Specifications based on brand names and product numbers - reference to brand names, trade names, model numbers or other descriptions peculiar to specific brand products is made to establish a required level of quality and functional capabilities; it is not intended to exclude other products of that level. Comparable products of other manufacturers will be considered if proof of comparability is contained in the bid. Vendors are required to notify the Chief Procurement Officer whenever specifications procedures are not perceived to be fair and open. All suggestions or objections shall be made in writing and received by the Chief Procurement Officer at least three (3) working days prior to the bid opening. It shall be the responsibility of the vendors, including vendors whose product is referenced; to furnish with the bid such specifications, catalog pages, brochures or other data as will provide an adequate basis for determining the quality and functional capabilities of the product offered. Failure to provide this data may be considered valid justification for rejection of a bid;
Specifications based on standard specifications;
Specifications based on qualified products list; or
Specifications based on catalogs, price lists, or price schedules.
For any contract that results from an RFQ, ITB or RFP, Institutions are not permitted to change the scope of the service(s) once a contract is awarded. (Department of General Services Procurement Division, Agency Procurement Procedures Manual, Revision Twelve, Approved by the Board of Standards, January 30, 2007)
2. Requests for Proposals (RFP) – a competitive process in which bids are solicited from possible suppliers, with a source or sources of supply established for a specified period of time at agreed upon unit pricing for goods and/or services.
a. Request for Proposal – Under $50,000, sealed bid with cost and technical proposal submitted as one document
(under $50,000 does not require sealed bids; can be written, telephone or electronic as provided in Section IV.B).
b. Request for Proposal – $50,000 and over, sealed bid with separate sealed technical and cost proposals which must be
submitted at the same time. Compliance with the mandatory RFP requirements shall be determined by the RFP
Coordinator in consultation with the Chief Business Officer or designee. Evaluation of technical offers shall be
determined by an evaluation team selected by the president or designee. Members of the evaluation team should be
adequate and appropriate to the scope and nature of the RFP. Procurement department representatives shall review
the proposals to ensure procurement procedures were followed and shall offer guidance to the evaluation team, but
shall not serve on the evaluation team, and shall not score technical proposals received, except in instances where
the RFP is directly related to a good/service needed by the procurement department. Any technical offers shall be
evaluated based on the criteria of the RFP and other information learned during the technical evaluation process. Any
technical offer submitted which contains any pricing information of any type shall be rejected. Technical offers not
deemed acceptable will not proceed to the pricing phase. Cost proposals shall not be opened if the associated
technical proposal has been deemed non-responsive and is rejected by the institution. Technical and cost proposals
shall not be made public until the inspection period following the evaluation of the cost proposals; or
c. Additional Procedures for Multi-step Sealed Bidding – the use of a multi-step sealed bidding process is required in
the bidding process for the procurement of products and/or services when it is not practical to prepare initially
definitive specifications.
Multi-step sealed bidding is a two-phase process consisting of a technical first phase composed of one or more steps
in which proposers submit unpriced technical offers to be evaluated and a second phase in which those proposers
whose technical offers are determined to be responsive during the first phase have their price proposals considered.
For any contract that results from an RFP, Institutions are not permitted to change the scope of the service(s) once a
contract is awarded. (Department of General Services Procurement Division, Agency Procurement Procedures Manual,
Revision Twelve, Approved by the Board of Standards, January 30, 2007).
B. MINIMUM NOTICE AND NUMBER OF BIDS
The number of bids required and the notice to bidders for solicitation of bids for purchases and revenue contracts shall be as follows:
1. If the estimated amount of the purchase (or revenue) is $50,000 or more, written sealed bids must be solicited from fifteen (15) vendors or the number of vendors on the Vendors List--whichever is less and to all that request the specific RFQ/RFP. (The Chief Procurement Officer must approve the solicitation of less than 15 bids). If the annual estimated amount of the purchase is $100,000 or more, solicitations must be sent in a manner that verifies proof of delivery. An RFQ for goods must be sent at least fourteen (14) days (ten (10) days when all vendors are local vendors) before the date that the bids are scheduled to be opened. For RFPs and applicable RFQs, (for example, those RFQs having requirements in addition to or other than the purchase of goods), a minimum of four (4) to six (6) weeks should be allowed for vendors to adequately prepare a competitive proposal based on the method of RFP or RFQ delivery, bid specifications and pre-bidders questions/responses. Examples of types of bids which would need to allow at least six (6) weeks include, but are not limited to, banking and other financial services, bookstore and food services, custom software and or IT system services, advertising management services and any other bid for which the additional time is appropriate. A vendor’s general or standing request for notice for all RFQs/RFPs or all RFQs/RFPs of a given type shall not suffice as a request for a specific RFQ/RFP and shall create no obligation on the institution.
2. If the estimated amount of the purchase (or revenue) is at least $10,000 but less than $50,000, written, telephone or electronic bids must be solicited from at least three (3) qualified vendors (with the exception of Section I. E. above). When telephone bids are solicited, a written record of the bidders and amounts bid shall be maintained.
C. Bid Withdrawal, Bid Revision, and Bid Rejection
Before bid opening, a vendor may be permitted to withdraw a bid entirely and/or submit a substitute bid. The vendor making such a request must submit suitable identification.
After bid opening, a vendor will be permitted to withdraw a bid only where there is obvious clerical error in the bid such as a misplaced decimal point, or where enforcement of the bid would impose unconscionable hardship due to an error in the bid resulting in a quotation substantially below the other bids received. Withdrawal will be considered only upon written request from the vendor.
In cases of errors in the extension of prices in the bid, the unit price will govern.
A bid may not be revised after bid opening.
When it becomes necessary to reject all bids, the reason for such rejection must be set out in complete detail and made available to all bidders who submitted a bid.
Action to reject all bids shall be taken only for unreasonable high price errors in the invitation to bid, cessation of need, unavailability of funds, or any other reason approved by the President or Director of Procurement or his designee.
D. Acceptance of Bids
All bids shall be subject to rejection by the President or his designee. If awarded, the contract for purchase shall be awarded to the lowest qualified and responsible bidder, taking into consideration quantifiable factors including but not limited to the apparent ability of the bidder to perform the proposed contract, the conformity of the articles or services to the specifications, any discount allowed for prompt payment or for any other reason, transportation charges, and the date of delivery specified in the invitation to bidders.
A bond for the faithful performance of any contract may be required in the discretion of the University. A complete written record of all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.
Bids must be received in the specified location on or before the date and hour designated for bid opening. Late bids will not be considered in contract award.
All bids received shall be publicly opened and examined by the Director of Procurement or his designee at the time and place specified in the Invitation to Bid. All bids conforming to the invitation together with the name of the bidder shall be recorded, become a matter of public record, and remain open to public inspection after award.
Each bid should give the full name and business address of the bidder. Unsigned bids will be rejected. The person signing the bid must show his title, and if requested, must furnish satisfactory proof of his authority to bind his company in contract. Bids must be written with typewriter, ink; otherwise, they may not be considered. Purchase order will be issued to the firm name appearing on the bid.
Alternate bids will not be considered unless specifically called for in the bid.
E. PROTESTED BIDS
1. Right to Protest
(a) Any actual proposer who claims to be aggrieved in connection with a specific solicitation (ITB, RFQ or RFP) process may submit a protest in writing to the Chief Procurement Officer within seven (7) calendar days from the date of notice to award. Protests must be received by the Institution’s Procurement Office no later than the close of business of the seventh Calendar Day.
All proposers should know and shall be deemed responsible for knowing the facts documented in the institution’s procurement files on the day the institution opens the bid files for public inspection.
Any issues raised by the protesting party after the seven (7) calendar day period shall not be considered as part of the protest.
(b) The following are the sole grounds for a protest:
· The contract award was arbitrary, capricious, an abuse of discretion, or exceeded the authority of the awarding entity;
· The procurement process violated a constitutional, statutory, or regulatory provision;
· The awarding entity failed to adhere to the rules of the procurement as set forth in the solicitation and this failure materially affected the contract award;
· The procurement process involved responses that were collusive, submitted in bad faith, or not arrived at independently through open competition; and
· The contract award resulted from a technical or mathematical error during the evaluation process.
(c) Any issues not raised by the protesting party after the seven (7) Calendar Day period shall not be considered as part of the protest.
(d) Protests shall include the required bond, as specified in Section VIII.C, below. Protests received which do not include the required bond shall not be considered. See Exhibit 9 for sample protest bond.
2. Signature on Protest Constitutes Certificate.
a. The signature of an attorney or protesting party on a request for consideration, protest, motion, or other document constitutes a certificate by the signer that the signer has read such document, that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass, limit competition, or to cause unnecessary delay, or needless increase in the cost of the procurement or of the litigation. If a request for consideration, protest, pleading, motion, or other document is signed in violation of this subsection before or after appeal to the Chancellor, the Chancellor upon motion or upon his/her own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties, including the affected institution, the amount of the reasonable expenses incurred because of the filing of the protest, a petition for a stay of award, pleading, motion, or other paper, including reasonable attorneys’ fees.
3. Protest Bond
(a) Neither a protest nor a stay of award shall proceed under this section unless the protesting party posts a protest bond (See Appendix I). The protesting party shall post, with the Chief Procurement Officer of the institution, at the time of filing a notice of protest, a bond payable to the institution in the amount of five percent (5%) of the lowest cost proposal evaluated or five percent (5%) of the highest revenue proposal evaluated. Such protest bond shall be in form and substance acceptable to the institution and shall be immediately payable to the institution conditioned upon a decision by the Chancellor that:
(i). A request for consideration, protest, pleading, motion, or other document is signed, before or after appeal to the Chancellor, in violation of subsection VII A. (ii);
(ii). The protest has been brought or pursued in bad faith; or
(iii). The protest does not state on its face a valid basis for protest.
(iv) The institution shall hold such protest bond for at least eleven (11) calendar days after the date of the final determination by the institution. If the protesting party appeals the determination in accordance with subdivision (vii), the institution shall hold such protest bond until instructed by the Chancellor to either keep the bond or return it to the protesting party.
(v) At the time of filing notice of a protest of a procurement in which the lowest evaluated cost proposal is less than one million dollars ($1,000,000), or in which the highest evaluated revenue proposal is less than one hundred thousand dollars ($100,000), a minority or small business protesting party may submit a written petition to the Chief Procurement Officer for exemption from the protest bond requirement of subsection VII.A.(iii). Such a petition must include clear evidence of minority or small business status. On the day of receipt, the petition shall be given (may be faxed) to the Chancellor or designee. The Chancellor has five (5) business days in which to make a determination. If an exemption from the protest bond requirement is granted, the protest shall proceed as though the bond were posted. Should the Chancellor deny an exemption from the requirement, the protesting party shall post the bond with the Chief Procurement Officer of the institution as required in subsection VII.A.(iii) within three (3) business days of the determination. For the purposes of this section, “minority business” is defined as solely owned or at least fifty-one percent (51%) owned by a person or persons who control the daily operation of such business and who is disabled (a person having a physical or mental impairment that in the written opinion of the person’s licensed physician, substantially limits one (1) or more of the major life activities of such person, including caring for oneself, and performing manual tasks, which include writing, walking, seeing, hearing, speaking, and breathing); African American (persons having origins in any of the Black racial groups of Africa); Asian American (persons having origins in any of the original peoples of the Far East, Southeast Asia and Asia, the subcontinent, or the Pacific Islands); Hispanic American (persons of Cuban, Mexican, Puerto Rican, Central or South American, or other Spanish or Portuguese origin, culture, or descent, regardless of race,); or Native American (persons having origins in any of the original peoples of North America). For purposes of this section, “small business” is defined as one which is independently owned and operated, has total gross receipts of no more than two million dollars ($2,000,000) for the most recently ended federal tax year, and employs no more than thirty (30) persons on a full-time basis.
4. Authority to Resolve Protest.
a. The Institution’s Chief Procurement Officer has the authority to resolve the protest. If deemed necessary, the Institution’s Chief Procurement Officer may request a meeting with the protesting party to seek clarification of the protest issues.
b. The final determination of the Institution’s Chief Procurement Officer shall be given in writing and submitted to the protesting party.
c. The protesting party may request that the final determination of the Institution’s Chief Procurement Officer be considered by the Institution’s Chief Financial Officer. The request for consideration shall be made in writing to, and received by, the Institution’s Chief Financial Officer within seven (7) Calendar Days from the date of the final determination by the Institution’s Chief Procurement Officer.
d. The Institution’s Chief Financial Officer has the authority to review and resolve the protest. If deemed necessary, the Institution’s Chief Financial Officer may request a meeting with the protesting party to seek clarification of the protest issues. The final determination of the Institution’s Chief Financial Officer shall be given in writing and submitted to the protesting party.
e. The protesting party may request that the final determination of the Institution’s Chief Financial Officer be considered by the Chief Executive Officer, or President of the Institution. The request for consideration shall be made in writing to, and received by, the Chief Executive Officer or President within seven (7) Calendar Days from the date of the final determination by the Institution’s Chief Financial Officer.
f. The Institution shall have no longer than sixty (60) Calendar Days from receipt of the protest to resolve the protest.
g. The protesting party may request that the final determination of the President be considered by the Chancellor. The request for consideration shall be made in writing to, and received by, the Chancellor within seven (7) Calendar Days from the date of the final determination by the President.
h. The determination of the Chancellor or designee is final and shall be given in writing and submitted to the protestor.
i. Should the Institution fail to acknowledge receipt of a protest within fifteen (15) Calendar Days and to resolve the protest within sixty (60) Calendar Days, the protesting party may request that the Chancellor consider the protest. Such request shall be in writing and received by the Chancellor within seven (7) Calendar Days from the expiration of the sixty (60) day period.
5. Stay of Award
a. Prior to the award of a contract, a proposer who has protested may submit to the Institution’s Chief Procurement Officer a written petition for stay of award. Such stay shall become effective upon receipt by the Institution’s Chief Procurement Officer.
b. The Institution’s Chief Procurement Officer shall not proceed further with the solicitation process or the award until the protest has been resolved in accordance with this section, unless the Institution’s Chief Financial Officer makes a written determination that continuation of the solicitation process or the award without delay is necessary to protect substantial interests of the Institution.
F. Tie Bids
A tie bid exists when two or more bidders offer products that meet all specifications, terms and conditions at identical prices, including cash discount offered. In such case, a tie bid will be broken by the following methods in descending order of preference:
1. In-state business will be given preference.
2. Small and minority business will be given preference.
3. Award item(s) to vendor who was low bidder on other item(s) being bid per the same requisition.
4. By lot or coin toss (properly witnessed and documented).
G. Articles and Services on State Contract
Purchase of materials or services for which the State of Tennessee, Department of General Services, Procurement Division, has awarded a contract (SWC) to a vendor through the competitive bidding process, will be made without adherence to paragraph (C), pertaining to Minimum Notice and Number of Bids, provided the vendor meets the contract specifications and price.
H. State Manufactured Articles and Services
State manufactured articles and services will be purchased from other state agencies, e.g., Department of Correction, Blind Services, whenever such items or services are available therefrom and meet the desired conditions and standards.
I. Sole Source and Proprietary Purchases
Sole source or proprietary purchases may be allowed pursuant to the following:
1. Sole Source Procurement - Sole source purchases are made only when items are unique and possess specific characteristics that can be filled by only one source.
2. Proprietary Purchase - A proprietary product is one that is manufactured and marketed by a person or persons having the exclusive right to manufacture and sell the product. Marketing is generally controlled by franchises that may include competitive sales at wholesale or retail levels. When it is found that bids may be obtained from different franchises, bid invitation must be issued unless the estimated purchase is less than $10,000.
3. Factors to be considered in sole source and proprietary purchases include the following:
a. Whether the vendor possesses exclusive and/or predominant capabilities or the items contained a patented feature providing superior utility not obtainable from similar products.
b. Whether the product or service is unique and easily established as one of a kind.
c. Whether the program requirements can be modified so that competitive products or services may be used.
d. Whether the product is available from only one source and not merchandised through wholesalers, jobbers and retailers.
e. Whether items must be interchangeable or compatible with in-place items.
f. Whether the cost of conversion, including but not limited to disruption re-training, and replacement precludes bidding competitively.
g. Whether the product is to be used in an instructional setting and the intent is to provide instruction on the specific product or diversity of products.
h. Other justifications as approved by the Chancellor, Tennessee Board of Regents, or his designee.
4. After review of the written justification from the requisitioning department and ascertaining that the item to be purchased meets one or several of the above criteria, the item may be purchased without following competitive bid procedures. A written quote is obtained from the supplier and a purchase order issued. Request for Sole Source or Proprietary Purchases requires approval of the President or his designee, and may be procured utilizing non-competitive negotiation.
5. Whenever specifications are not so worded or designed to provide competitive bidding, or specify a single brand, the person responsible for the recommendation shall be required to justify the necessity for the specification in writing, and the request shall be approved by the President or his designee.
K. Purchases for Resale in Auxiliary Enterprises
Purchase of items for resale shall be made as follows:
1. Textbooks and other course related materials may be purchased without adherence to Minimum Notice and Number of Bids Policy. All textbook ordering lists and authorization forms must be maintained for audit purposes.
2. Certain items for resale for which customers have expressed a preference and/or promotional items procured under accepted retail merchandising practices may be purchased without adherence to Minimum Notice and Number of Bids Policy. Appropriate documentation shall be maintained which supports the action taken.
L. Purchases for Libraries, Excluding Materials and Supplies Identified for Consumption by the Library
Purchases for Libraries, excluding materials and supplies identified for consumption by the Library, such as books, catalogs, periodicals and other general publications may be made without formal bid or quotations, and appropriate documentation will be submitted and maintained on all transactions to support sole source procurement . Purchases of electronic journals, subscriptions, and databases will be procured through: (1) procurement, or (2) by agreement process in instances when a competitive process can be used.
Library purchases are to be made by one of the following methods:
1. Sole source/proprietary purchases (must be documented)
2. Use of an existing contract/agreement between the University and the vendor.
3. Use of other existing TBR system institutions contracts/agreements.
4. Use of other existing UT system institutions contracts/agreements.
5. Competitive bid, when necessary.
6. Documentation used to support the purchase must be attached to the requisition.
M. Data Processing and Related Equipment Purchases
All computer hardware, software and related equipment must be approved by the IT Department prior to purchase.
1. Acquisition of Computer System
Acquisition of computer systems involving the purchase of hardware with the development of application software shall be made in accordance with TBR Purchasing Policy and Procedures 4:02:10:00, Acquisition of Data Processing Equipment / Software / Services, and Procedures for Multi-Step Sealed Bidding.
2. Multi-Step Sealed Bids
a. In the Invitation to Bid, the Procurement Department shall provide the bidder with information describing the functional requirements of the system, purpose of the procurement, technical requirements, bidder qualifications, and any other information considered relevant to the goods and services being acquired.
b. The bidder shall submit a technical offer sufficient in detail so as to constitute the technical specifications of the purchase.
c. As specified in the invitation to bid, all technical offers must be received by the institution at the designated time and will be opened in the same manner as a competitive sealed bid. Technical offers shall not be made public until the inspection period following evaluation of the bids submitted with prices.
d. Acceptability of technical offers shall be determined by an evaluation team appointed by the President, or his designee. All technical offers will be evaluated based on the criteria of the invitation to bid and other information learned during the technical evaluation process. All vendors whose technical offers are deemed acceptable will be invited to participate in a confidential discussion of unpriced technical offers. Offers not deemed acceptable will not proceed to the pricing phase.
e. Bid Price. At the conclusion of the evaluation phase of the multi-step sealed bidding process, bidders will be required to submit a bid price clearly defining the cost of their technical offer in accordance with the invitation to bid.
f. Award. Each contract shall be awarded to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation to bid.
3. Competitive Negotiation
A contract may be entered into by competitive negotiation only in cases when the institution is unable to obtain needed goods and/or services by the competitive bid process. The President shall prescribe the procedures under which negotiation is to be conducted. These procedures shall provide for the safeguarding of the information and provide fairness to the vendor in the negotiation process. In the event it appears the competitive negotiation process is to be implemented, such an action must be approved by the President. Once the negotiations have been concluded, a recommendation shall be made by the negotiating team to the President, and he shall approve the results prior to entering into a contract.
N. Prohibited Transactions
Funds appropriated by the legislature for general operating use, including the unrestricted funds budgeted to university departments, may not be used for extravagant or personal purchases, or for items or services that are not prudent or necessary to carry out university business. Examples of prohibited expenditures include, but are not limited to:
• Personal letterhead or stationery
• Christmas cards
• Personal photographs, pictures or frames
• Elaborate business cards
• Office area coffee pots or coffee makers
• Plants, flowers, or vases for decorating individual offices or classrooms
• Gifts other than approved awards
• Coffee, pastries or foodstuffs for consumption by the staff except in approved conference settings
• Personal or social memberships to clubs, organizations, associations (institutional or approved individual professional memberships are acceptable)
Waivers of such restrictions must be approved in writing and in advance by the President, Vice President for Business and Finance or Procurement Director.
O. Disposal or Surplus Personal Property
Surplus property is personal property that has been determined obsolete, outmoded, unusable or no longer usable by the University, or property for which future needs do not justify the cost of maintenance and/or storage. University policy prohibits the purchase of surplus property by bid or otherwise by any employee of the University. Disposal of such property shall be in accordance with TBR Policy No. 4:02:20:00, Disposal of Surplus Property.
P. Government/State Surplus Property
Acquisition of federal and state surplus property is available through appropriate channels. All inquiries shall be routed through Procurement. The Director will work with the department in obtaining surplus property. Permission to dispose of government/state surplus property will be submitted to the Director of Procurement for subsequent approval by the President.
Q. Property Loss and Theft
Property discovered as being lost or stolen shall be reported immediately by the person having first knowledge of the loss or theft to the Office of Safety and Security for appropriate action. The item description, including serial number, University tag number, date of loss/theft and prevailing circumstances surrounding the loss/theft will be verbally provided to Safety and Security upon reporting such incident.
R. Reports
A report detailing purchases made where the low bid was not accepted and where items were purchased on a proprietary basis shall be transmitted to the Vice Chancellor for Business and Finance on a quarterly basis (January-March, April-June, July-September, October-December). Other reports will be provided upon request.
S. Procurement Records
All records of purchases are open and accessible to the public during the regular operating hours of the Procurement Office. Request for inspection of records must be reasonable, contain sufficient information for retrieval. and must not interfere with the orderly operation. Vendors application form, which include financial disclosure information, or the identity of prospective vendors prior to bid opening, where such disclosure might negate the competitive bid process, are not open to the public. Records are available for reviewing after the evaluation and prior to the award. (Minimum General Bid Condition No. 18). A Vendor Bid Review Record will be made for each visit. Vendors are encouraged to attend bid openings on the day and at the time specified in the Invitation to Bid.
T. Contracts and Agreements
All contracts and agreements will be in conformance with TBR Guideline G-030, Contracts and Agreements.
1. All agreements and contracts involving or related to the purchase or lease of real property or data processing equipment, the purchases related to capital outlay projects, shall be expressly subject to the approval of the Chancellor.
2. No agreement of any nature which requires the expenditure of funds shall extend beyond the end of fiscal year in which it is entered into unless expressly subject to the condition that the University shall have the right to terminate the agreement at the end of any fiscal year in the event that sufficient funds are not appropriated by the General Assembly and/or budgeted for continuation of the agreement.
3. No agreement of any nature shall be entered into which:
a. Provide for the indemnity or hold harmless any other party.
b. Provide for the payment of taxes of any nature.
c. Provide for the payment of interest, late charges, or penalties of any nature.
d. Contain any provision concerning default, commencement of any legal proceedings, or payment of attorney's fees.
e. Provides for prepayment for any goods or services, except for books and publication, conferences, and necessary in the ordinary course of business, provided the amount does not exceed $1,000: unless the agreement is expressly subject to the approval of the Chancellor.
4. All agreements, contracts and subcontracts shall contain all necessary nondiscrimination requirements provided by Federal or State laws and regulations.
5. Contract Limitations. No contract for purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase. No contract shall be entered into in addition to the contract resulting from acceptance of a bid and issuance of a purchase order except pursuant to TBR Policy No. 1:03:02:10, Approval of Agreements.
U. Utility Contracts
The University shall purchase or contract for all telephone, telegraph, electric light, gas, power, postal and other services for which a rate for the use thereof has been established by a public authority in such manner as the Commissioner deems to be in the best interest of the State of Tennessee. Each such purchase or contract shall be made on a competitive basis, whenever possible, in accordance with the TBR Purchasing Policy, unless it has been determined that such purchase is single source, if such purchase has been determined to be single source, the purchase shall then be made pursuant to Paragraph K, Sole Source and Proprietary Purchases.
V. Purchase Requisition
The purchase requisition is the source document for initiating all transactions for goods, supplies and services within the University. Information required on the purchase requisition shall be completed by the requisitioner, and must have budget approval and funds available prior to any expenditure.
W. Alcohol, Drugs, and Hazardous Merchandise
Federal and state laws govern the purchase, control. and use of narcotic and dangerous drugs. In order to insure that such materials are ordered, shipped, and subsequently stored, safe guarded and used in accordance with government regulations and codes, applicable regulations shall be followed.
X. Exceptions
Any exceptions to the policies and procedures established herein including subsequent revisions shall be approved by the Chancellor or his designee.
TENNESSEE BOARD OF REGENTS (TBR)
POLICIES AND GUIDELINES APPLICABLE TO THIS MANUAL
• Policy No. 1:03:02:10 Approval of Agreements
• Policy No. 4:01:04:00 Solicitation and Acceptance of Gifts
• Policy No. 4:02:10:00 Purchasing Policies and Procedures
• Policy No. 4:02:20:00 Disposal of Surplus Personal Property
• Guideline No. G-030 Acquisition of Data Processing/Equipment Software/Services
• Policy No. 4:02:10:00 Procedures for Multi-Step Sealed Bidding
• Guideline No. G-030 Execution of Contracts
GENERAL OVERVIEW
This section constitutes what might be described as the "nuts and bolts" of procurement procedures and requirements for the University.
Whenever possible, the various steps in making a purchase have been arranged for use as instructions and as a reference guide for use in all procurement activities. Since many requirements described only once are valid for more than one procedure, a working knowledge of the entire Manual is required before use as a reference.
A. Vendors Mailing List
No person, firm, or corporation shall be deemed or considered to be a qualified bidder unless such firm has completed and filed a Bidders Application with the University Procurement Department, and received subsequent approval. All such applications by prospective bidders shall contain a verified statement disclosing types and classes of materials, supplies, equipment, and services offered. From the listing of qualified bidders, the Procurement Department may use a selective system in choosing bidders to who bid invitations will be sent, taking into consideration the geographical location, and items each bidder has established his ability to furnish.
B. Selection of Vendors
Potential vendors are selected for their ability to serve the need of the University in the most economical and efficient manner possible on a continuing basis. Past performance of vendors and cooperation with Tennessee State University are important factors in vendor selection. It is impossible for the University to purchase efficiently from all available sources in many lines. The buying power of the University must be concentrated as much as possible with selected vendors to attain the maximum advantages of price and service. Many vendors have secured important shares of University business on the basis of negotiated contracts, price, and exceptional service demonstrated repeatedly over long periods of time. Such well-qualified suppliers are important assets to the University.
C. Changes of Suggested Vendors (Purchase Requisitions)
The Procurement Department may delete an item listed on the requisition and buy from another source to take advantage of special circumstances or of an existing State of Tennessee Term Contract (SWC). Of course, the order may also be shifted entirely to another supplier who will provide better prices, service, or delivery. The standard of quality will not be changed, except in necessary cases and with consultation between the buyer and the department requisitioning the item. For these and other reasons, no commitments, expressed or implied, should be made by University departments.
A department may request an opportunity to review the bids before an order is placed. If this is desired, it should be so stated on the requisition.
D. Supply Sources for Unusual Items
Departments are encouraged to suggest sources of supply with complete address, particularly for unusual or non-standardized items. Authority for the final selection of the vendor; however, shall be left to the Procurement Department buying staff which is charged with the overall responsibility of developing and contracting with the best sources of supplies for the University. The Procurement Department will follow a department's recommendations as much as possible, so long as it does not violate Purchasing policies and procedures.
E. Previous History for Commodities
Unusual items specified on a requisition have been purchased before and an adequate history of the product, potential vendors, and the service capabilities and product availability is on hand in the records of the Procurement Department, or can be readily developed or updated. This is one of the advantages of specialization and centralization.
F. Pool or Cooperative Buying
The University will participate in cooperative or pool buying when it is judged to be advantageous. Examples are:
1. Annual bid for scientific equipment and supplies.
2. Annual contract for stock forms and paper.
3. Annual contract for automobiles, etc.
4. Contracts with Educational and Institutional Cooperative Services, Inc.
5. Master contracts by the Tennessee Board of Regents.
G. Establishment of Current Prices
Members of the Procurement Department buying staff remain aware of current prices through study of published price lists, price information available from salesmen, or published market data; and if the price cannot be determined from such sources, the proper price is established through negotiation or competitive bid.
H. Price as a Function of Value
The Director of Procurement may examine prices quoted by several different suppliers to determine which price, in combination with the necessary quality features of the product and the service aspects of the relationship with the supplier, will afford the University the greater overall value.
I. Factors in Selection of Major Equipment
The selection of major equipment shall be based on considerations of economy in operation, productivity, compatibility, quality, dependability, savings in time or labor costs, and durability, so that the net result will be increased efficiently at the lowest net cost.
NOTE: Prior to submitting a requisition for the purchase of an instrument or item of equipment, the requesting department should ascertain whether power requirements or other utilities are available. These should be specified on the requisition. Space requirements and floor loading should also be checked where applicable. Facilities Management department should be contacted if assistance is needed.
J. Equipment Maintenance
Certain items of equipment to the maximum extent practical, will be covered by service contracts in order to assure continuing efficient operation. Equipment such as electronic microscopes, ultra centrifuges, and other highly specialized scientific equipment also should be maintained under service contracts. Departments shall submit a requisition for annual contracts to the Procurement Department.
K. Standardization of Common-Use Items
Items in common-use shall be standardized as much as possible in order to gain the value of maximum quantity discounts, to lessen the variety of items carried in stock in various departments, and to eliminate numerous small orders at retail prices and expensive processing costs.
L. Determination of Quality Specifications
The buyer shall make purchases on the basis of specifications, either on file or furnished by members of the faculty and staff. The determination of a desirable quality to accomplish necessary results will be a joint decision between the using agent, department chairman, and Director of Procurement. (Example: Many vendors make alternate proposals that afford the University a better value by either meeting or exceeding the specifications.)
M. Revision of Order Quantities
The Procurement Department shall check purchase requests against the need and may revise quantities or quality in accordance with the University's purchasing policy and good business practices; the fundamental responsibility of the buyer is to fill the need, not necessarily to make a purchase exactly as requested. Significant deviations will be discussed with the user and pertinent factors cooperatively considered. Be specific as to quantities. Do not write "1 box", but rather "1 box (100 per box)".
N. Economical Order Quantities
When an order is placed, the quantity shall be that which results in the lowest total cost to the University, including the cost of carrying the merchandise in stock as well as its procurement costs. For this reason, a requisition is not considered a directive to purchase a given quantity.
O. Consolidation of Purchases
Purchases of similar items or items from common sources shall be consolidated for purchasing wherever possible, in order to gain maximum quality discounts and best vendor service. Delivery schedules and costs should be kept in mind.
P. Repetitive Orders
Small repetitive orders should be increased in quantity and decreased in frequency so that suppliers are not continually asked to handle transactions which are unprofitable. Order in larger quantities also reduces costs to the University caused by the negotiating and placing of orders, paper work processing, and issuance of checks.
Q. Price Inquiry by Departments
Individual departments may, for their own information, may wish to secure "inquiry" price quotations on items they are considering to purchase. It should be understood; however, that these price quotations, regardless of their source, may not be acceptable to the Procurement Department for actual use at the time of purchase due to time lapse, quantity changes, or inadequate information. Be sure to allow sufficient time for the Procurement Department to obtain prices, place the order, and receive shipment.
R. Split Purchases
No purchase shall be divided in amounts for the purpose of bringing it within certain dollar or time limits relative to required bidding periods. Failure to combine orders when this logically should be done in the interest of economy is circumventing the University policy on combined purchases and, therefore will not be approved (i.e. purchase requisitions containing identical account number, object code and vendor). Whenever this occurs, the Director of Procurement will return the purchase requisition to the requisitioner.
S. Bid Bond or Check
1. Bid bond or check may be required in Invitation to Bid. If the invitation to bid so specifies, a bidder must file with the Procurement Department a "bid bond", certified check, cashiers check, or bank draft in the amount of and in the form specified in the invitation. The bid will not be considered unless this provision is met.
2. Surety required. In addition to signing the bid bond as principal, the bidder must have the bond signed by a surety company authorized to do business in the State of Tennessee. If the surety on a bond has its authority to do business in the State of Tennessee revoked, or if for any reason ceases to do business in the state, the bidder must promptly obtain another surety on the bond.
3. Condition of the bond. The bond must be conditioned on full performance and all obligations imposed on the bidder in this Manual, by submission of a bid including the obligation to keep the price firm for as long a period as specified in the bid, and the obligation to file a performance bond when required if awarded a contract. The bid bond shall provide that upon the bidder's failure to perform any of such obligations, the University may recover from the bidder and/or surety company any and all damages suffered because of such failure.
4. Deposit Agreement. If the bidder elects to deposit a certified check, cashier's check, or bank draft, it will be security for full performance of all obligations referred to above in this section. If the bidder fails to perform any one or more of such obligations referred to above, the Vice President for Business and Finance may endorse the check and retain as much of the proceeds as is necessary to compensate the University, for any and all damages suffered because of such failure.
5. Return of Check. If a bidder is not the successful bidder, the certified check, cashier's check, or bank draft will be returned to that Bidder promptly after the award is made. The check of the successful bidder shall be returned after the contract is awarded or as soon as such Bidder has filed a bid bond, if one is required.
T. Performance Bond
A successful bidder may be required to file a "performance bond" in a designated amount, whenever it appears to be in the best interest of the University to do so.
A complete written record on all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.
U. Evaluation and Award
The basic intent of the evaluation in each instance shall be to determine the lowest qualified bidder meeting the conditions and specifications. When this determination is made no more factors or considerations can be demanded and no fewer accepted than those imposed by the complete invitation to bid.
Awards will be made to the bidder whose bid meets all specifications and other requirements of the invitation to bid and is the lowest and most responsible of all bidders to include, but not be limited to, the following:
1. Cash discounts will be considered in making an award of bids.
2. Unit Price Controlling. In case of a mistake in the extension of a price, the unit price shall govern.
3. Awards of Any or All Items. An award may be made to the lowest aggregate bidder for all items on invitation, on a group or an individual basis, whichever is found to be in the best interest of the University.
4. All bids are subject to rejection by the University, and in those instances where evaluation dictates the rejection of the lowest bid as not meeting the standards established in the invitation, a complete factual statement shall be recorded on the bid summary sheet as a part of the permanent records to show the reason for rejection, become a matter of public record, and remain open to public inspection.
5. After bids have been evaluated and the successful bidder has been determined, the Director of Procurement shall issue a written purchase order to the vendor.
6. Vendors attending a bid opening will be required to sign the Bidders Attendance and Registration Form.
V. Samples
1. A sample may be requested on any item bidded to be submitted either at the time the bid is submitted or prior to award. Usually, the invitation will specify whether or not samples will be required. Each sample must be labeled clearly with the vendor's name, address, commodity classifications, brand and model, and bid invitation number. All samples submitted must be representative of the commodities or equipment which shall be delivered if a contract is awarded. Samples submitted by successful bidders shall be retained for use in comparing items delivered under the contract.
2. Transportation Charges. No samples will be accepted by the Procurement Department unless transportation charges, including cartage, have been prepaid. Samples received from bidders who are not successful shall be returned upon written request and payment of all shipping costs by the bidder.
W. Change Order
The change order form will be used to alter or cancel a purchase order. The University may make changes in quantities, drawings, specifications, and time for performance of the order. An equitable adjustment in the price or delivery or both shall be made.
1. Cancellation. When a purchase order is issued by the Procurement Department, it has certain legal ramifications and cannot be cancelled without proper cause. Therefore, in circumstances where a department feels that a purchase order should be cancelled, the department head should contact the Director of Procurement to discuss the matter and receive instructions relative to what action should be taken, if any on the order under consideration.
If it is determined that a order should be cancelled, the department head will be asked to send a written memo to the Director of Procurement requesting that a change order be issued to cancel the purchase order. A copy of the cancellation request should be provided the Budget Office or Grants Administration, depending upon whether restricted or unrestricted funds are involved.
The following information must be included in the memo when requesting cancellations:
a. Name of the department initiating the cancellation report.
b. Budget account number.
c. Requisition number.
d. Purchase order number.
e. Name of vendor.
f. The total dollar amount of the order.
g. If only an item or several items are to be cancelled, then the item number and total price for the particular item or items, as well as the information in items a through f above must also be included in the request.
2. Change Orders are not needed in order to make payment as follows (specific examples):
a. A quantity variance of less than ten percent (10%) on an individual purchase order (usually associated with printed material, bulk shipments, i.e., coal, feed, rock, etc.).
b. Incorrect extensions - unit price shall prevail.
c. A vendor's inability to ship an item on a purchase order resulting in a decrease in the total amount of the purchase order.
d. Authorized freight charges (debit voucher payment).
All of these conditions can be corrected without requesting a purchase order change by liquidating the entire amount on the purchase order at the time the disbursement voucher is written, and expending the correct amount.
X. Emergency Purchases
Purchases of specific materials, supplies, equipment, or services may be made in the open market without competitive bidding for immediate delivery only to meet bona fide emergencies arising from any unforeseen cause. All emergency purchases shall, if practicable, be made on the basis of competitive bids.
1. Emergency conditions are described as those needs arising from any unforeseen cause including, but not limited to, delays by contractors, delays in transportation, unanticipated volume of work, and acts of God.
NOTE: So called emergency needs that arise due to poor planning do not fall in the above categories, and are normally not considered.
2. ALL BONAFIDE EMERGENCY PURCHASES MUST BE APPROVED BY THE PRESIDENT OR HIS DESIGNEE and a written report on the circumstances of any such emergency justifying the purchase shall be prepared and maintained by the University's Procurement Department.
Y. Complaint to Vendor
Initial complaints should be made as soon as possible and copies should be distributed as noted on the complaint form. The copies are designed to inform all concerned of any action or lack of action as soon as possible, and with minimum effort.
The complaint form should be used to report all instances where the vendor fails to perform in accordance with the purchase order. This includes failure to perform by the date specified or within a reasonable length of time, and any unacceptable difference between the receiving copy of the purchase order and the merchandise received. The receiving copy of the purchase order should always be available and used in receiving merchandise or services.
Items with unacceptable differences that are visible should be refused, returned, and reported as returned with a full explanation of the reason for the return. Performance that is below that which can be reasonably expected or hidden damages should be reported immediately upon discovery. All complaints should be accurate and specific.
SHIPPING AND RECEIVING
When any supplies, equipment, or materials are received by the University, the receiving agent thereof shall make a written certification that the supplies, equipment, or materials received were equal in quality and quantity to those requisitioned
A. Receiving Reports
All shipments will be delivered to the University's Central Receiving Facility unless otherwise approved in writing by the Director of Procurement. When items are to be picked up from the vendor, it will be so noted on the purchase order.
A receiving report will be prepared promptly on each shipment of supplies, materials, or equipment received in the University. All information on the receiving report shall be completed and appropriate signatures obtained when delivered to departments and prior to forwarding to Accounts Payable. The receiving report is an important document and its accuracy is indispensable. Complete records on all receiving reports shall be maintained and filed in numerical order in order to provide for a clear audit trail on the receipt of all purchases.
B. Orders Past Delivery Date
Follow-up action shall be initiated on purchase orders that have not been received after the specified delivery date on the purchase order. This action shall be taken ten (10) days after the delivery date and made a part of the file.
C. Partial Filled Orders/Shipments
Orders received that have been only partially filled on the date of delivery and the vendor failed to indicate delivery date of remaining order; follow-up action will be promptly taken to notify vendor. When partial shipments are received, each will be regarded as a separate delivery.
D. Duplicate Orders/Shipments
Duplicate shipments or unauthorized substitutions made by the vendor will be returned with shipping costs borne by the vendor. Cost for duplicate shipments errors made by the department will be borne by the department. In all instances, a re-shipping authorization number will be requested from the vendor. Appropriate documentation shall be maintained on all transactions.
E. Unidentified Shipments/Orders
A shipment received at the Central Receiving Facility from a vendor that cannot be identified will be returned to the vendor only after follow-up action has been taken. All shipping costs will be borne by the vendor if shipment has to be returned.
F. Damage Claims
All carriers recognize their liability for two (2) types of damages - apparent and concealed damages. Prompt examination of the shipment by Central Receiving will reveal the apparent damaged order. Where there is evidence of damage, the package or packages shall be opened immediately, permitting a joint inspection or examination of content by the carrier's representative and Central Receiving.
An inspection report listing all details of the physical damage and/or shortages will be placed in writing and signed by Central Receiving and the carrier representative.
A claim will be submitted to the carrier with necessary documentation to support claim.
Claims must be supported by:
1. Original bill of lading.
2. Original paid freight bill (bond of indemnity may be acceptable where either of the above documents have been lost or misplaced).
3. Original invoice or certified copy of or extract from the original invoice.
4. Copy of carrier's document pertaining to the particular shipment involved, whereon carrier has acknowledged loss and/or damage over carrier's signature.
5. Inspector's report (concealed loss or damage claim).
6. Consignee form (concealed loss or damage claim).
7. Shipper's form (concealed loss or damage claim).
8. Repair invoice (when consignee repairs damage).
G. Inspecting and Checking of Items Received by Departments
The system of inspecting and testing shall be used to insure that the University is receiving the quantity and quality of goods for which it has negotiated. The department receiving the merchandise is responsible for promptly unpacking and carefully inspecting shipments. Any discrepancies or shortages shall be reported promptly, in writing, to the Procurement Department referring to the purchase order number and vendor, and attaching all pertinent papers. The Procurement Department will work out the problems involved to protect the University's interest and to complete the transaction.
H. Order(s) Picked Up from Vendor
Orders picked up from vendors without prior written approval is in violation of University purchasing policies and procedures. Written approval will be placed on each duly authorized purchase order and must be placed on the purchase requisition when initiated by the department.
I. Delivery to Department
Central Receiving will make deliveries to departments daily during regular work hours Monday - Friday between the hours of 8:00 a.m. - 12:00 p.m. and 1:00 p.m. - 4:00 p.m. When deliveries are made and no one is available in the department to receive the order, the Receiving Report will be annotated to show that an attempt was made to deliver the order.
J. Return of Supplies or Equipment
Supplies or equipment returned to suppliers or manufacturers for adjustment or credit must be cleared through the Procurement Department. Credit memos received that cannot be identified with returns will receive disposition at the discretion of the Finance and Accounting Office.
PAYMENT OF INVOICES
Disbursement of all University managed funds shall be accomplished by the following methods:
• Approved debit voucher payment
• Duly authorized purchase order
A. Invoices
All invoices shall be forwarded to Accounts Payable to the address shown on the bottom of the purchase order. Original invoices mailed to departments by vendors are required to be forwarded to Accounts Payable upon the date of receipt. Departments shall not communicate with vendor to have invoices forwarded to them, which is a violation of University policy. Invoices shall be paid within forty-five (45) days of receipt and must show at a minimum, the following:
• Vendor name and address
• Purchase order number
• Item description and number
• Quantity, unit, unit price and extension for each item discount, if applicable.
B. Documents Required for Payment
The following documents are required to support payment:
• Duly authorized purchase order
• Receiving report
• Invoice
C. Prepayment
Occasionally, it becomes necessary to make advance payment for items. This is always true for U.S. Government documents from the Superintendent of Documents and for certain other items, usually of small value. In such cases, information is needed regarding the accurate and complete description of the item required; the item's price and catalog number; and the correct name and ordering address of the supplier. When ordering U.S. Government publications, an order form must be attached to the purchase requisition. Order forms can be obtained from Procurement. Also attached to the requisition should be any supporting documentation, such as an advertisement, letter from the vendor, proforma invoice, etc. Prepayment will only be made for goods and services upon receipt of written approval prior to issuing the purchase order.
D. Partial Payments
In accordance with the terms of the purchase order for which partial payment is required, a continuation form must be used for the articles or services received in part.
E. Special Disbursement
Disbursement for the following types of transactions require payment to be made within the prescribed time as provided on the invoice since the purchase was not encumbered prior to the obligation being made:
• Debit voucher payment
• "Emergency" purchase order
NOTE: All of the above requests for payment must be supported by invoice and/or a receipt.
F. Processing Payments (authorized purchase order)
1. Purchase orders are issued and maintained in the online Procurement system.
2. Receiving reports are issued by Central Receiving, or by the department (by approving the invoice) if it is not a Central Receiving item or if it is a service.
3. Invoices are matched with the purchase order.
4. Invoices are input into the Banner System. All input and paperwork are audited prior to payment being processed. Once the final invoice register is run, payments are made via checks or direct deposits. Payments are then balanced in total between the final invoice register and the check/direct deposit registers.
5. The checks or direct deposit payments are matched to the balanced check registers. Checks are mailed to the vendor, and the direct deposit file is submitted and processed by the ban for "positive pay" purposes. File copies of the check/direct deposit are attached to the documentaton for each payment and placed in a paid file.
GIFTS AND DONATIONS
A. Purpose
The purpose of this policy is to provide guidance to all employees engaged in the acceptance of gifts and/or donations on behalf of the University, regardless of source or a specific use by a designated department.
B. Authority
The Director of Development is responsible for coordination and acceptance of all gifts (personal property and cash) to the University. This includes but not limited to equipment of any kind, vehicles, machinery computer equipment, etc. shall be processed without exception, through the Office of Development.
The Office of Development will therefore be advised immediately upon learning of the probability of an offer of a gift or donation. After securing all appropriate information, a written recommendation shall be submitted to the President who will make the final decision on acceptance of the proposed gift or donation.
C. Gifts Other Than Cash
For all gifts other than cash, departments or activities which reports to the Office of the Vice President for Academic Affairs shall submit the above information to the Vice President for Academic Affairs for his/her consideration and recommendation to the Director of Development. All other departments and activities shall submit the above information to the Vice President for Business and Finance for consideration and recommendation to the Director of Development. Cash donations with significant restrictions on use (other than contributions to establish restricted accounts) shall also be reviewed in the same manner as non-cash gifts.
D. Department Actions
Any person who gains knowledge of the probability of the offer of a gift or donation to the University shall advise his department or activity head. The department or activity head shall secure the following listed information (if applicable) concerning the potential gift/donation.
1. Identification of the item(s) and donor.
2. Estimate of the value of the item(s) - preferably based on the judgment of the department head or other responsible department official. This statement is for internal use only and cannot be considered official for donor's tax purposes.
NOTE: Professional appraisals of value of non-cash items (for tax purposes) will normally be the responsibility of the donor; however, other arrangements may be made at the discretion of the Director of Development.
3. Restrictions on use of the gift.
4. Recommendation as to acceptance.
5. Statement as to the University's need for the item(s), if non-cash.
6. Statement as to the condition of the item(s).
7. Statement as to the availability of space for use of the item(s).
8. Details on any liabilities associated with the gift, i.e., mortgages or liens.
9. Estimate of cost renovation, if necessary, to make the gift usable.
10. Estimate of the annual maintenance cost and other ongoing expenses, if accepted.
11. Estimate of cost of delivery and/or installation.
12. Estimate of all other costs that might be incurred by acceptance of the item(s).
E. Office of Development Actions
A complete record of all gifts and donations to the University will be maintained in the Office of Development.
Proper acknowledgement of all gifts and donations will be made by the Director of Development. He will also insure that all letters and publicity concerning gifts and donations are appropriately coordinated prior to release.
Upon receipt of an offer of a gift/donation, the required information concerning the item(s) and recommendation from the appropriate Vice President, the Director of Development will accomplish the following:
1. Review thoroughly the information submitted by the department/activity head.
2. Secure the approval of the President.
3. Review the gift/donation proposal with the prospective donor, and advise the donor of the non-acceptance and the reasons therefore: or the terms and conditions under which the gift/donation will be accepted.
4. Advise the concerned department of the decision to accept or not accept the gift or donation.
5. Coordinate the transfer of ownership and physical possession of the item(s) with the donor and the appropriate University department officials; including necessary steps to have the item(s) placed on the current inventory.
6. Advise the offices of the following listed officials of the acceptance of the gift or donation. Non-cash items shall be fully described and the terms and conditions under which the acceptance was made shall be included:
• Vice President for Business and Finance
• Director of Procurement
• Other departments or activity heads who may be concerned.
F. Procurement Department Actions
Once the above process is completed, the President will forward a form letter stating that this gift has been accepted and entered into the Property Inventory at the specific value stated in the President's letter.
Upon receipt of the approved forms from the President's Office, a copy will be furnished the University Property Officer. The Property Officer will:
1. Review the documentation for accuracy.
2. Determine if the item and value meet the requirements for inventory purposes.
3. In the event the item meets the criteria for inclusion in the property inventory, make arrangements with the department receiving the property to tag item(s).
4. Prepare the necessary paperwork to include the item(s) on the department's property inventory.
5. Complete and submit property inventory sheets to Finance and Accounting.
G. Real Property and Testamentary Gifts
The Office of the Vice President for Business and Finance shall be responsible for the coordination and acceptance of all donations and gifts or real property and testamentary bequests and devices in coordination with the Office of Development. The same information shall be secured for these type donations or gifts as outlined herein.
H. Tennessee Board of Regents Approval
The Office of the Vice President for Business and Finance shall be responsible for securing the approval of the Tennessee Board of Regents, where appropriate.
MISCELLANEOUS PURCHASING MATTERS
A. Sales Tax Exemption
Supplies, equipment and services purchased by the University, or goods or services acquired for resale are tax exempt, and taxes shall not be paid. A Tax Exemption Certificate will be issued in the name of the vendor providing the services. All tax exemption certificates will be issued and signed by the Director of Procurement and mailed rather than be given to the individual requesting the certificate.
B. Loan of Equipment
The loan of equipment to outside agencies, organization, and other educational institutions must have prior written approval by the President or his designee.
C. Removal of Equipment/Property From University Premises for Personal Use
The removal of equipment and/or movable property from University premises is prohibited unless prior written approval is obtained from the Vice President for Business and Finance. Persons, who do not have such written request in their possession when removing University equipment/property from the premises, may be subject to a charge of property misappropriation.
D. Minority and Small Businesses
The University welcomes and encourages minority and small businesses to participate in the competitive bidding process of providing goods, services, supplies and equipment needed by the various departments within the University, whenever possible.
Each prospective minority and small business is required to file a vendor application to be placed on the vendor's list. Regular visitation to the University to check the bidder bulletin board, a means by which procurement information can be readily obtained, is encouraged. Tennessee Board of Regents including state laws governing procurement activities will be adhered to regardless of business.
Purchasing Policies and Procedures
UNIVERSITY ORGANIZATION FOR PROCUREMENT
A. Authority
B. Authority to Obligate the University
C. Approving Authority for Certain Actions
D. Centralization and Authority Delegation for Procurement
E. Limitations
F. Purchasing Objective: Greatest Value for Funds Expended
G. Conflict of Interest in Procurement
H. Receiving and Interviewing Sales Representatives
I. Unauthorized Purchases
PURCHASING DEPARTMENT
A. The Purchasing Department has been Assigned Definite Responsibilities
B. Achieving and Maintaining a Successful Purchasing Operation
C. Availability of Funds
D. Coordination of Purchasing Functions among System Institutions and Schools
E. Lifecycle Costs
F. Council of Buyers
GENERAL PURCHASING REQUIREMENTS
A. Competitive Bidding and Specifications
B. Invitation to Bid
C. Minimum Notice and Number of Bids
D. Bid Withdrawal, Bid Revision, and Bid Rejection
E. Acceptance of Bids
F. Protested Bids
G. Tie Bids
H. Articles and Services on State Contract
I. State Manufactured Articles and Services
J. Sole Source and Proprietary Purchases
K. Purchases for Resale in Auxiliary Enterprises
L. Purchases for Libraries, Excluding Materials and Supplies Identified for Consumption
by the Library
M. Data Processing and Related Equipment Purchases
N. Prohibited Transactions
O. Disposal or Surplus Personal Property
P. Government/State Surplus Property
Q. Property Loss and Theft
R. Reports
S. Purchasing Records
T. Contracts and Agreements
U. Utility Contracts
V. Purchase Requisition
W. Alcohol, Drugs, and Hazardous Merchandise
X. Exceptions Policies and Guidelines Applicable to This Manual
GENERAL OVERVIEW
A. Vendors Mailing List
B. Selection of Vendors
D. Supply Sources for Unusual Items
E. Previous History for Commodities
F. Pool or Cooperative Buying
G. Establishment of Current Prices
H. Price as a Function of Value
I. Factors in Selection of Major Equipment
J. Equipment Maintenance
K. Standardization of Common-Use Items
L. Determination of Quality Specifications
M. Revision of Order Quantities
N. Economical Order Quantities
O. Consolidation of Purchases
P. Repetitive Orders
Q. Price Inquiry by Departments
R. Split Purchases
S. Bid Bond or Check
T. Performance Bond
U. Evaluation and Award
V. Samples
W. Change Order
X. Emergency Purchases
Y. Complaint to Vendor
SHIPPING AND RECEIVING
A. Receiving Reports
B. Orders Past Delivery Date
C. Partial Filled Orders/Shipments
D. Duplicate Orders/Shipments
E. Unidentified Shipments/Orders
F. Damage Claims
G. Inspecting and Checking of Items Received by Departments
H. Order(s) Picked Up from Vendor
I. Delivery to Department
J. Return of Supplies or Equipment
PAYMENT OF INVOICES
A. Invoices
B. Documents Required for Payment
C. Prepayment
D. Partial Payments
E. Special Disbursement
F. Processing Payments (authorized purchase order)
GIFTS AND DONATIONS
A. Purpose
B. Authority
C. Gifts Other Than Cash
D. Department Actions
E. Office of Development Actions
F. Purchasing Department Actions
G. Real Property and Testamentary Gifts
H. Tennessee Board of Regents Approval
MISCELLANEOUS PURCHASING MATTERS
A. Sales Tax Exemption
B. Loan of Equipment
C. Removal of Equipment/Property From University Premises for Personal Use
D. Minority and Small Businesses
E. Removal/Suspension from Vendors List
F. Buyer
G. Procedure for Bond Fund Projects
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Tennessee State University
Purchasing Policies and Procedures
INTRODUCTION
This manual is for general use of University personnel to comply with purchasing policies and procedures. It is not intended to inform the General University population of the technical and/or legal requirements of Purchasing in such technical processes as contracts, bidding procedures, etc. However, in some instances, departments must furnish technical information data to ensure that the department receives satisfactory materials to accomplish its intended purposes and mission(s). Accordingly, users of this manual have an obligation to check with Purchasing at all times to ensure that any information contained herein is the latest. Purchasing will initiate and distribute any changes in policies and procedures contained herein resulting from University, TBR, or legal changes without notice to departments.
These policies and procedures have been made as simple as possible and meet the requirements of State of Tennessee laws, policies of the Tennessee Board of Regents (TBR) and adopted University policies, good business practice, and special requirements adopted from time-to-time by various agencies from which the University secures funds for special programs. These procedures are meant to cover most cases involving procurement for Tennessee State University, and are generally consistent with those of similar State institutions of higher education.
The University considers its vendors to be valuable assets. It attempts to administer buying practices within established policy so that all suppliers are considered and dealt with ethically. The best ones will be awarded shares of the services rendered and ultimate, long-range benefit to the University as a whole. All savings, including cash discounts, achieved by combining purchases, using buying power of the University as a whole, or in developing larger quantities per order by the cooperation of any department, as well as with other institutions under the governance of the Tennessee Board of regents, such actions will benefit the departmental or project budget which provides the funds for purchases.
The purchasing function as defined by statutes is extended to induce the total supply and/or materials management concept involving such related activities as central receiving, inspection, inventory control, and disposal of surplus or unusable stocks of materials and equipment.
Standardization and simplification of products and procedures also may result in substantial and repetitive savings to the individual department budget.
UNIVERSITY ORGANIZATION FOR PROCUREMENT
A. Authority
Chapter 115, Public Act of the 86th General Assembly of the State of Tennessee, 1969 Session, is the basis for the University's purchasing authority and responsibility as administered by the Tennessee Board of Regents, pursuant to Article 6, Section 2 (g), and Article 7, Section 2 (a) of the bylaws of the Tennessee Board of Regents.
The following policies and procedures are adopted as minimum standards for exercise by the President of Tennessee State University or his designee in accord with the authority delegated to institutions by the State University and Community College System of Tennessee, as set forth in Tennessee Board of Regents Policy No. 4:02:10:00.
B. Authority to Obligate the University
The President, Vice President for Business and Finance, and Director of Purchasing are the only persons authorized to obligate the University. Without definite and prior written permission, no University department may order directly by letter, telephone, telegraph, or in any other manner. The University will assume no obligation except in a previously issued and duly authorized purchase order.
C. Approving Authority for Certain Actions
The Vice President for Business and Finance shall be the approving authority for the following actions only when substantial written justification is submitted and upon recommendation by the Director of Purchasing:
1. Award Other Than Low Bid
2. Sole Source/Proprietary Purchase
3. Emergency Purchases
D. Centralization and Authority Delegation for Procurement
The responsibility for all procurement, contract negotiations and administration of procurement policies and procedures has been centralized and delegated to the Director of Purchasing.
E. Limitations
Pursuant to these policies and procedures, the following purchases are not included, and shall be expressly subject to the approval of the Chancellor or his designee, Tennessee Board of Regents:
1. Purchase or lease of real property.
2. Purchase or lease of data processing equipment.
3. Purchase of insurance.
4. Purchase of professional and/or consultative services.
5. Purchase of capital outlay projects from any fund source whatsoever.
F. Purchasing Objective: Greatest Value for Funds Expended
The expenditures of all Tennessee State University funds regardless of the source shall be made in accordance with established University policies and procedures, and Tennessee Board of Regents' regulations. Particular care shall be exercised to comply with federal laws as well as any applicable contract requirements or special terms of grants and donations. All funds shall be handled so that the greatest ultimate value per dollar expended is achieved.
G. Conflict of Interest in Procurement
No officer or employee of the Purchasing Department, or any member of any department head, or any project head of the institution, charged with the responsibility of initiation requisitions; shall accept or receive directly or indirectly from any person, firm, or corporation to where any contract for the purchase of materials, supplies, or equipment for Tennessee State University, may be rewarded by rebate, gifts, or otherwise any money or anything of value whatsoever, or any promise, obligation, or contract for future rewards or compensation.
H. Receiving and Interviewing Sales Representatives
University personnel having a need to contact sales representatives for a particular brand name or product should contact the Purchasing Department for assistance. Sales representatives contacting University personnel without being scheduled through the Purchasing Department should be encouraged to contact the Purchasing Department. When sales representatives possess information concerning new products or special value, they will be referred to appropriate offices.
All sales representatives visiting the Purchasing Department are required to sign the Sign-In Register on each visit, irrespective to the number of visits.
I. Unauthorized Purchases
No individual has the authority to enter into purchase contracts or in any way to obligate Tennessee State University for procurement indebtedness unless specifically authorized to do so by the President, Vice President for Business and Finance, or the Director of Purchasing. Any such negotiations are considered unauthorized purchases and the individual may encounter a personal obligation to the vendor. Firms ordinarily doing business with the University are aware of this policy and are advised that all purchases legally chargeable to Tennessee State University must be authorized by an official Tennessee State University purchase order signed by an authorized buyer. Exclusive of the debit voucher procedure, the University will not reimburse officers or employees for the cost of any such purchases on behalf of the University unless previous arrangements to that end have been made.
PURCHASING DEPARTMENT
Tennessee State University's Purchasing Department is organized and administered as a functioning area under the University's Business and Finance Division.
The function of the Purchasing Department is to organize and administer procurement for all departments of the University in accordance with the responsibility and authority delegated by the President and Tennessee Board of Regents.
The Purchasing Department must work and coordinate with hundreds of individuals within the University and with thousands of vendors in supplying complex requirements economically, effectively, and as promptly as circumstances will allow.
The Purchasing Department shares in certain responsibilities with the Finance and Accounting Office, Budget Office, and other University administrative offices in expending University funds.
A. The Purchasing Department has been Assigned Definite Responsibilities:
1. Procurement of materials, supplies, equipment and services for all University departments.
2. Testing and evaluation of various commodities to insure proper balance of quality and monetary expenditures.
3. Expedite delivery of urgently needed goods and services.
4. Refer information about new or improved products to departments using these products.
5. Inform departments of exceptional buys on selected commodities.
6. To exercise prudent controls and maintain surveillance over all purchases and purchasing related activities to insure compliance with the State statutes, regulations, Tennessee Board of Regents, and such other policies and procedures as may be adopted by the University.
7. To assist in planning for acquisition of materials, supplies, equipment, or services, if the needs of a department are complicated or extensive or if a major project is being planned.
8. To insure uniform enforcement of contractual obligations for all firms having University contracts.
9. To stimulate interest in bidding by all responsible vendors who can furnish material, equipment, supplies, and services meeting University specifications.
10 To offer full opportunity for all qualified bidders to compete for University business on an equal basis.
11. To offer full opportunity to all qualified minority vendors.
12. To encourage fair and open competition among bidders.
13. To enable University personnel to understand policies and procedures by annual workshops or other appropriate means.
14. To obtain maximum value for each dollar spent by the University.
15. To assure compliance with University record and retention policies.
B. Achieving and Maintaining a Successful Purchasing Operation
In order to achieve and maintain a successful purchasing operation, departments should:
1. Follow the procedures prescribed in this manual.
2. Plan their needs well in advance.
3. Describe accurately on purchase requisitions quantity, quality, and detailed specifications of the item needed.
4. Initiate purchase requisitions forty-five (45) to sixty (60) days in advance of the desired date needed.
5. Indicate on the purchase requisition the actual date (ASAP, Immediately and Emergency, are not dates), and location (room) to which items are to be delivered.
6. Use the correct account number and object code.
7. Obtain all required signatures on the purchase requisition.
C. Availability of Funds
No purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase.
D. Coordination of Purchasing Functions among System Institutions and Schools
In all contracts and other bid processes, consideration will be given to such wording that would allow other Tennessee Board of Regents member institutions and schools to purchase under the terms and conditions of the bid awarded by the University.
E. Lifecycle Costs
Lifecycle costs will be used in contracting for major energy-consuming products, and in the case where a lifecycle cost and/or energy efficiency standard has been developed for a product by the federal government apply such lifecycle cost and/or energy efficiency standard in the determination of the lowest qualified and responsible bidder.
F. Council of Buyers
The Director of Purchasing is the University representative on the Tennessee Board of Regents Council of Buyers.
GENERAL PURCHASING REQUIREMENTS
A. Competitive Bidding and Specifications
All purchases shall be based upon the principle of competitive bidding except as herein provided. Whenever possible, all specifications for materials, supplies, equipment and services shall be worded or designed so as to permit open and competitive bidding for the supplying of the article, commodities or services to which they apply. It will be considered open and competitive bidding by utilizing one of the following purchasing techniques:
1. Specifications based on brand names and product numbers - reference to brand names, trade names, model numbers or other descriptions peculiar to specific brand products is made to establish a required level of quality and functional capabilities; it is not intended to exclude other products of that level. Comparable products of other manufacturers will be considered if proof of comparability is contained in the bid. It shall be the responsibility of the vendor, including vendors whose product is referenced, to furnish with the bid such specifications, catalog numbers and pages, brochures of other data as to provide an adequate basis for determining the quality and functional capabilities of the product offered. Failure to provide this data may be considered valid justification for rejection of a bid.
2. Specifications based on standard specifications.
3. Specifications based on qualified products list.
4. Specifications based on catalogs, price lists, or price schedules.
B. Invitation to Bid
Invitations to bidders shall specify the following:
1. Time and place that bids will be received and opened.
2. Articles or services for which such bids are to be submitted and the specifications for such articles or services.
3. Amount or number of articles or services required.
4. Time of delivery.
5. Amount, if any, of any bid bond or certified checks to accompany the bid.
6. Amount, if any, of any performance bond which will be required if the vendor is the successful bidder.
7. Date bid evaluations available for viewing.
8. Any other requirements, conditions, or information in reference to the purchase deemed necessary.
C. Minimum Notice and Number of Bids
The number of bids required and the notice to bidders for solicitation of bids shall be as follows:
1. If the estimated amount of the purchase is $5,000 or more, written sealed bids must be solicited from fifteen (15) vendors or the number of vendors on the Vendors List - whichever is less (The Director of Purchasing must approve the solicitation of less than 15 bids). The invitation to bid must be mailed at least fourteen (14) days (ten days where all vendors are local vendors) before the date the bids are scheduled to be opened.
2. If the estimated amount of the purchase is at least $500 but less than $5,000, written or telephone bids must be solicited from at least three (3) qualified vendors. When telephone bids are solicited, a written record of the bidders and bid amount shall be maintained.
3. If the estimated amount of the purchase is less than $500, the purchase may be negotiated by the Director of Purchasing.
D. Bid Withdrawal, Bid Revision, and Bid Rejection
Before bid opening, a vendor may be permitted to withdraw a bid entirely and/or submit a substitute bid. The vendor making such a request must submit suitable identification.
After bid opening, a vendor will be permitted to withdraw a bid only where there is obvious clerical error in the bid such as a misplaced decimal point, or where enforcement of the bid would impose unconscionable hardship due to an error in the bid resulting in a quotation substantially below the other bids received. Withdrawal will be considered only upon written request from the vendor.
In cases of errors in the extension of prices in the bid, the unit price will govern.
A bid may not be revised after bid opening.
When it becomes necessary to reject all bids, the reason for such rejection must be set out in complete detail and made available to all bidders who submitted a bid.
Action to reject all bids shall be taken only for unreasonable high price errors in the invitation to bid, cessation of need, unavailability of funds, or any other reason approved by the President or Director of Purchasing or his designee.
E. Acceptance of Bids
All bids shall be subject to rejection by the President or his designee. If awarded, the contract for purchase shall be awarded to the lowest qualified and responsible bidder, taking into consideration quantifiable factors including but not limited to the apparent ability of the bidder to perform the proposed contract, the conformity of the articles or services to the specifications, any discount allowed for prompt payment or for any other reason, transportation charges, and the date of delivery specified in the invitation to bidders.
A bond for the faithful performance of any contract may be required in the discretion of the University. A complete written record of all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.
Bids must be received in the specified location on or before the date and hour designated for bid opening. Late bids will not be considered in contract award.
All bids received shall be publicly opened and examined by the Director of Purchasing or his designee at the time and place specified in the Invitation to Bid. All bids conforming to the invitation together with the name of the bidder shall be recorded, become a matter of public record, and remain open to public inspection after award.
Each bid should give the full name and business address of the bidder. Unsigned bids will be rejected. The person signing the bid must show his title, and if requested, must furnish satisfactory proof of his authority to bind his company in contract. Bids must be written with typewriter, ink, or indelible pencil; otherwise, they may not be considered. Purchase order will be issued to the firm name appearing on the bid.
Alternate bids will not be considered unless specifically called for in the bid.
F. Protested Bids
1. Right to Protest
An aggrieved bidder may submit a protest in writing to the Director of Purchasing within ten (10) days after he/she knows or should have known the facts giving rise to the protest.
2. Authority to Resolve Protest
The Director of Purchasing shall review all bid protests and communicate his decision in writing to the Vice President for Business and Finance. If a protest is not resolved to the satisfaction of the aggrieved bidder, the aggrieved bidder may request an opportunity to meet with the Vice President for Business and Finance to present his grievance. Protests shall be submitted to the Vice President for Business and Finance within ten (10) days of a written decision of the Director of Purchasing. The Vice President for Business and Finance, in consultation with the President, shall review the appeal. If the Vice President for Business and Finance's decision does not resolve the issue, the aggrieved bidder may appeal to the Chancellor, or his designee, Tennessee Board of Regents. A request for this action must be made in writing within ten (10) days of the date of the decision of the Vice President for Business and Finance. The determination of the Chancellor or his designee, is final, and shall be given in writing and submitted to the protestor.
3. Stay of Procurement During Protest
An aggrieved bidder may request a stay of award prior to award of the contract. Upon notification of a request for a stay to the Director of Purchasing, the proposed acquisition shall not proceed until the protest has been resolved, unless the Chancellor or his designee makes a written determination that continuation of the bid process or the award of the contract without delay is necessary to protect substantial interests of the University upon the recommendation from the Vice President for Business and Finance.
4. Protest Subsequent to Award
The Tennessee Claims Commission has exclusive jurisdiction to determine all monetary claims against the state for the negligent deprivation of statutory or constitutional rights.
G. Tie Bids
A tie bid exists when two or more bidders offer products that meet all specifications, terms and conditions at identical prices, including cash discount offered. In such case, a tie bid will be broken by the following methods in descending order of preference:
1. In-state business will be given preference.
2. Small and minority business will be given preference.
3. Award item(s) to vendor who was low bidder on other item(s) being bid per the same requisition.
4. By lot or coin toss (properly witnessed and documented).
H. Articles and Services on State Contract
Purchase of materials or services for which the State of Tennessee, Department of General Services, Purchasing Division, has awarded a contract (SWC) to a vendor through the competitive bidding process, will be made without adherence to paragraph (C), pertaining to Minimum Notice and Number of Bids, provided the vendor meets the contract specifications and price.
I. State Manufactured Articles and Services
State manufactured articles and services will be purchased from other state agencies, e.g., Department of Correction, Blind Services, whenever such items or services are available therefrom and meet the desired conditions and standards.
J. Sole Source and Proprietary Purchases
1. Sole source or proprietary purchases may be allowed pursuant to the following:
a. Sole Source Procurement - Sole source purchases are made only when items are unique and possess specific characteristics that can be filled by only one source.
b. Proprietary Purchase - A proprietary product is one that is manufactured and marketed by a person or persons having the exclusive right to manufacture and sell the product. Marketing is generally controlled by franchises that may include competitive sales at wholesale or retail levels. When it is found that bids may be obtained from different franchises, bid invitation must be issued unless the estimated purchase is less than $500.
2. Factors to be considered in sole source and proprietary purchases include the following:
a. Whether the vendor possesses exclusive and/or predominant capabilities or the items contained a patented feature providing superior utility not obtainable from similar products.
b. Whether the product or service is unique and easily established as one of a kind.
c. Whether the program requirements can be modified so that competitive products or services may be used.
d. Whether the product is available from only one source and not merchandised through wholesalers, jobbers and retailers.
e. Whether items must be interchangeable or compatible with in-place items.
f. Whether the cost of conversion, including but not limited to disruption re-training, and replacement precludes bidding competitively.
g. Whether the product is to be used in an instructional setting and the intent is to provide instruction on the specific product or diversity of products.
h. Other justifications as approved by the Chancellor, Tennessee Board of Regents, or his designee.
3. After review of the written justification from the requisitioning department and ascertaining that the item to be purchased meets one or several of the above criteria, the item may be purchased without following competitive bid procedures. A written quote is obtained from the supplier and a purchase order issued. Request for Sole Source or Proprietary Purchases requires approval of the President or his designee, and may be procured utilizing non-competitive negotiation.
4. Whenever specifications are not so worded or designed to provide competitive bidding, or specify a single brand, the person responsible for the recommendation shall be required to justify the necessity for the specification in writing, and the request shall be approved by the President or his designee.
K. Purchases for Resale in Auxiliary Enterprises
Purchase of items for resale shall be made as follows:
1. Textbooks and other course related materials may be purchased without adherence to Minimum Notice and Number of Bids Policy. All textbook ordering lists and authorization forms must be maintained for audit purposes.
2. Certain items for resale for which customers have expressed a preference and/or promotional items procured under accepted retail merchandising practices may be purchased without adherence to Minimum Notice and Number of Bids Policy. Appropriate documentation shall be maintained which supports the action taken.
L. Purchases for Libraries, Excluding Materials and Supplies Identified for Consumption by the Library
Purchases of materials for additions to a library collection include cost of books, catalogs, periodicals, binding, audio-visual media, and other general publications. These items are capital expenditures. These purchases may be made without formal bids or quotations, and appropriate documentation shall be maintained on these purchases to support sole source procurement. However, the President may at his discretion require which items to be bidded, if in the best interest of the University.
M. Data Processing and Related Equipment Purchases
All computer hardware and related equipment exceeding $5,000.00 must be approved by the Chancellor, or his designee, upon recommendation from the President of the University. No purchase will take place until after final approval is obtained.
To assist the President in his decision and recommendations to the Chancellor the University Computer Resources Committee will review and make appropriate recommendations on all data processing equipment and forward same to the President for his approval or disapproval. If the Committee's recommendations are accepted, a letter is initiated for the President's signature and forwarded to the Tennessee Board of Regents for the Chancellor's consideration and/or approval. Departments contemplating purchasing data processing equipment are encouraged to contact the University Computer Resources Committee for assistance.
1. Acquisition of Computer System
Acquisition of computer systems involving the purchase of hardware with the development of application software shall be made in accordance with TBR Guideline B-030, Acquisition of Data Processing Equipment / Software / Services, and Guideline B-035, Procedures for Multi-Step Sealed Bidding.
2. Multi-Step Sealed Bids
a. In the Invitation to Bid, the Purchasing Department shall provide the bidder with information describing the functional requirements of the system, purpose of the procurement, technical requirements, bidder qualifications, and any other information considered relevant to the goods and services being acquired.
b. The bidder shall submit a technical offer sufficient in detail so as to constitute the technical specifications of the purchase.
c. As specified in the invitation to bid, all technical offers must be received by the institution at the designated time and will be opened in the same manner as a competitive sealed bid. Technical offers shall not be made public until the inspection period following evaluation of the bids submitted with prices.
d. Acceptability of technical offers shall be determined by an evaluation team appointed by the President, or his designee. All technical offers will be evaluated based on the criteria of the invitation to bid and other information learned during the technical evaluation process. All vendors whose technical offers are deemed acceptable will be invited to participate in a confidential discussion of unpriced technical offers. Offers not deemed acceptable will not proceed to the pricing phase.
e. Bid Price. At the conclusion of the evaluation phase of the multi-step sealed bidding process, bidders will be required to submit a bid price clearly defining the cost of their technical offer in accordance with the invitation to bid.
f. Award. Each contract shall be awarded to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation to bid.
3. Competitive Negotiation
A contract may be entered into by competitive negotiation only in cases when the institution is unable to obtain needed goods and/or services by the competitive bid process. The President shall prescribe the procedures under which negotiation is to be conducted. These procedures shall provide for the safeguarding of the information and provide fairness to the vendor in the negotiation process. In the event it appears the competitive negotiation process is to be implemented, such an action must be approved by the President. Once the negotiations have been concluded, a recommendation shall be made by the negotiating team to the President, and he shall approve the results prior to entering into a contract.
N. Prohibited Transactions
Personal
1. The purchase of such item as: briefcases, personal name cards, personal subscriptions to magazines, trade journals, leather portfolios, desk pen sets other than a line similar to Esterbrook or in the same price range.
2. Coffee-brewing devices, desk clocks, desktops of plate glass, nameplates, microwave ovens, and desk or office plates is prohibited (unless in the considered judgement of the appropriate Vice President with subsequent approval of the Vice President for Business and Finance when proper written justification is submitted).
3. Ornamental items such as pictures, vases, pillows, planters, ornamental plants, are all prohibited.
4. Radios for automobiles, except for the chief administrator of the Safety and Security purposes, rugs, carpets, and draperies for offices (unless approved by the Vice President for Business and Finance).
5. Slide rules for personal use (no purchase with University funds will be made of a type customarily used and owned by students and professional employees doing like work).
These and other items are not provided by University funds, and are considered personal items. Any individual who wishes to have such items in his/her office shall procure them personally. University letterheads shall not be used for ordering personal items to be paid for by the individual. When letterheads are used, the vendor will very often bill the University rather than the individual, resulting in time consuming and expensive correspondence.
O. Disposal or Surplus Personal Property
Surplus property is personal property that has been determined obsolete, outmoded, unusable or no longer usable by the University, or property for which future needs do not justify the cost of maintenance and/or storage. University policy prohibits the purchase of surplus property by bid or otherwise by any employee of the University. Disposal of such property shall be in accordance with TBR Policy No. 4:02:20:00, Disposal of Surplus Property.
P. Government/State Surplus Property
Acquisition of federal and state surplus property is available through appropriate channels. All inquiries shall be routed through Purchasing. The Director will work with the department in obtaining surplus property. Permission to dispose of government/state surplus property will be submitted to the Director of Purchasing for subsequent approval by the President.
Q. Property Loss and Theft
Property discovered as being lost or stolen shall be reported immediately by the person having first knowledge of the loss or theft to the Office of Safety and Security for appropriate action. The item description, including serial number, University tag number, date of loss/theft and prevailing circumstances surrounding the loss/theft will be verbally provided to Safety and Security upon reporting such incident.
R. Reports
A report detailing purchases made where the low bid was not accepted and where items were purchased on a proprietary basis shall be transmitted to the Vice Chancellor for Business and Finance on a quarterly basis (January-March, April-June, July-September, October-December). Other reports will be provided upon request.
S. Purchasing Records
All records of purchases are open and accessible to the public during the regular operating hours of the Purchasing Office. Request for inspection of records must be reasonable, contain sufficient information for retrieval. and must not interfere with the orderly operation. Vendors application form, which include financial disclosure information, or the identity of prospective vendors prior to bid opening, where such disclosure might negate the competitive bid process, are not open to the public. Records are available for reviewing after the evaluation and prior to the award. (Minimum General Bid Condition No. 18). A Vendor Bid Review Record will be made for each visit. Vendors are encouraged to attend bid openings on the day and at the time specified in the Invitation to Bid.
T. Contracts and Agreements
All contracts and agreements will be in conformance with TBR Guideline G-030, Contracts and Agreements.
1. All agreements and contracts involving or related to the purchase or lease of real property or data processing equipment, the purchases related to capital outlay projects, shall be expressly subject to the approval of the Chancellor.
2. No agreement of any nature which requires the expenditure of funds shall extend beyond the end of fiscal year in which it is entered into unless expressly subject to the condition that the University shall have the right to terminate the agreement at the end of any fiscal year in the event that sufficient funds are not appropriated by the General Assembly and/or budgeted for continuation of the agreement.
3. No agreement of any nature shall be entered into which:
a. Provide for the indemnify or hold harmless any other party.
b. Provide for the payment of taxes of any nature.
c. Provide for the payment of interest, late charges, or penalties of any nature.
d. Contain any provision concerning default, commencement of any legal proceedings, or payment of attorney's fees.
e. Provides for prepayment for any goods or services, except for books and publication, conferences, and necessary in the ordinary course of business, provided the amount does not exceed $1,000: unless the agreement is expressly subject to the approval of the Chancellor.
4. All agreements, contracts and subcontracts shall contain all necessary nondiscrimination requirements provided by Federal or State laws and regulations.
5. Contract Limitations. No contract for purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase. No contract shall be entered into in addition to the contract resulting from acceptance of a bid and issuance of a purchase order except pursuant to TBR Policy No. 1:03:02:10, Approval of Agreements.
U. Utility Contracts
The University shall purchase or contract for all telephone, telegraph, electric light, gas, power, postal and other services for which a rate for the use thereof has been established by a public authority in such manner as the Commissioner deems to be in the best interest of the State of Tennessee. Each such purchase or contract shall be made on a competitive basis, whenever possible, in accordance with the TBR Purchasing Policy, unless it has been determined that such purchase is single source, if such purchase has been determined to be single source, the purchase shall then be made pursuant to Paragraph K, Sole Source and Proprietary Purchases.
V. Purchase Requisition
The purchase requisition is the source document for initiating all transactions for goods, supplies and services within the University. Information required on the purchase requisition shall be completed by the requisitioner, and must have budget approval and funds available prior to any expenditure.
W. Alcohol, Drugs, and Hazardous Merchandise
Federal and state laws govern the purchase, control. and use of narcotic and dangerous drugs. In order to insure that such materials are ordered, shipped, and subsequently stored, safe guarded and used in accordance with government regulations and codes, applicable regulations shall be followed.
X. Exceptions
Any exceptions to the policies and procedures established herein including subsequent revisions shall be approved by the Chancellor or his designee.
TENNESSEE BOARD OF REGENTS (TBR)
POLICIES AND GUIDELINES APPLICABLE TO THIS MANUAL
•Policy No. 1:03:02:10 Approval of Agreements
•Policy No. 4:01:04:00 Solicitation and Acceptance of Gifts
•Policy No. 4:02:10:00 Purchasing Policies and Procedures
•Policy No. 4:02:20:00 Disposal of Surplus Personal Property
•Guideline No. B-030 Acquisition of Data Processing/Equipment Software/Services
•Guideline No. B-035 Procedures for Multi-Step Sealed Bidding
•Guideline No. 0-030 Execution of Contracts
GENERAL OVERVIEW
This section constitutes what might be described as the "nuts and bolts" of procurement procedures and requirements for the University.
Whenever possible, the various steps in making a purchase have been arranged for use as instructions and as a reference guide for use in all procurement activities. Since many requirements described only once are valid for more than one procedure, a working knowledge of the entire Manual is required before use as a reference.
A. Vendors Mailing List
No person, firm, or corporation shall be deemed or considered to be a qualified bidder unless such firm has completed and filed a Bidders Application with the University Purchasing Department, and received subsequent approval. All such applications by prospective bidders shall contain a verified statement disclosing types and classes of materials, supplies, equipment, and services offered. From the listing of qualified bidders, the Purchasing Department may use a selective system in choosing bidders to who bid invitations will be sent, taking into consideration the geographical location, and items each bidder has established his ability to furnish.
B. Selection of Vendors
Potential vendors are selected for their ability to serve the need of the University in the most economical and efficient manner possible on a continuing basis. Past performance of vendors and cooperation with Tennessee State University are important factors in vendor selection. It is impossible for the University to purchase efficiently from all available sources in many lines. The buying power of the University must be concentrated as much as possible with selected vendors to attain the maximum advantages of price and service. Many vendors have secured important shares of University business on the basis of negotiated contracts, price, and exceptional service demonstrated repeatedly over long periods of time. Such well-qualified suppliers are important assets to the University.
C. Changes of Suggested Vendors (Purchase Requisitions)
The Purchasing Department may delete an item listed on the requisition and buy from another source to take advantage of special circumstances or of an existing State of Tennessee Term Contract (SWC). Of course, the order may also be shifted entirely to another supplier who will provide better prices, service, or delivery. The standard of quality will not be changed, except in necessary cases and with consultation between the buyer and the department requisitioning the item. For these and other reasons, no commitments, expressed or implied, should be made by University departments.
A department may request an opportunity to review the bids before an order is placed. If this is desired, it should be so stated on the requisition.
D. Supply Sources for Unusual Items
Departments are encouraged to suggest sources of supply with complete address, particularly for unusual or non-standardized items. Authority for the final selection of the vendor; however, shall be left to the Purchasing Department buying staff which is charged with the overall responsibility of developing and contracting with the best sources of supplies for the University. The Purchasing Department will follow a department's recommendations as much as possible, so long as it does not violate Purchasing policies and procedures.
E. Previous History for Commodities
Unusual items specified on a requisition have been purchased before and an adequate history of the product, potential vendors, and the service capabilities and product availability is on hand in the records of the Purchasing Department, or can be readily developed or updated. This is one of the advantages of specialization and centralization.
F. Pool or Cooperative Buying
The University will participate in cooperative or pool buying when it is judged to be advantageous. Examples are:
1. Annual bid for scientific equipment and supplies.
2. Annual contract for stock forms and paper.
3. Annual contract for automobiles, etc.
4. Contracts with Educational and Institutional Cooperative Services, Inc.
5. Master contracts by the Tennessee Board of Regents.
G. Establishment of Current Prices
Members of the Purchasing Department buying staff remain aware of current prices through study of published price lists, price information available from salesmen, or published market data; and if the price cannot be determined from such sources, the proper price is established through negotiation or competitive bid.
H. Price as a Function of Value
The Director of Purchasing may examine prices quoted by several different suppliers to determine which price, in combination with the necessary quality features of the product and the service aspects of the relationship with the supplier, will afford the University the greater overall value.
I. Factors in Selection of Major Equipment
The selection of major equipment shall be based on considerations of economy in operation, productivity, compatibility, quality, dependability, savings in time or labor costs, and durability, so that the net result will be increased efficiently at the lowest net cost.
NOTE: Prior to submitting a requisition for the purchase of an instrument or item of equipment, the requesting department should ascertain whether power requirements or other utilities are available. These should be specified on the requisition. Space requirements and floor loading should also be checked where applicable. The Director of the Physical Plant should be contacted if assistance is needed.
J. Equipment Maintenance
Certain items of equipment to the maximum extent practical, will be covered by service contracts in order to assure continuing efficient operation. Maintenance of general-use equipment such as electric typewriters, electronic typewriters, dictating equipment, calculating machines and duplicating equipment fall in this category. For this type of equipment, service can be obtained by calling the Purchasing Department. Other equipment such as electronic microscopes, ultra centrifuges, and other highly specialized scientific equipment also should be maintained under service contracts. Departments shall submit a requisition for annual contracts to the Purchasing Department.
K. Standardization of Common-Use Items
Items in common-use shall be standardized as much as possible in order to gain the value of maximum quantity discounts, to lessen the variety of items carried in stock in various departments, and to eliminate numerous small orders at retail prices and expensive processing costs.
L. Determination of Quality Specifications
The buyer shall make purchases on the basis of specifications, either on file or furnished by members of the faculty and staff. The determination of a desirable quality to accomplish necessary results will be a joint decision between the using agent, department chairman, and Director of Purchasing. (Example: Many vendors make alternate proposals that afford the University a better value by either meeting or exceeding the specifications.)
M. Revision of Order Quantities
The Purchasing Department shall check purchase requests against the need and may revise quantities or quality in accordance with the University's purchasing policy and good business practices; the fundamental responsibility of the buyer is to fill the need, not necessarily to make a purchase exactly as requested. Significant deviations will be discussed with the user and pertinent factors cooperatively considered. Be specific as to quantities. Do not write "1 box", but rather "1 box (100 per box)".
N. Economical Order Quantities
When an order is placed, the quantity shall be that which results in the lowest total cost to the University, including the cost of carrying the merchandise in stock as well as its procurement costs. For this reason, a requisition is not considered a directive to purchase a given quantity.
O. Consolidation of Purchases
Purchases of similar items or items from common sources shall be consolidated for purchasing wherever possible, in order to gain maximum quality discounts and best vendor service. Delivery schedules and costs should be kept in mind.
P. Repetitive Orders
Small repetitive orders should be increased in quantity and decreased in frequency so that suppliers are not continually asked to handle transactions which are unprofitable. Order in larger quantities also reduces costs to the University caused by the negotiating and placing of orders, paper work processing, and issuance of checks.
Q. Price Inquiry by Departments
Individual departments may, for their own information, may wish to secure "inquiry" price quotations on items they are considering to purchase. It should be understood; however, that these price quotations, regardless of their source, may not be acceptable to the Purchasing Department for actual use at the time of purchase due to time lapse, quantity changes, or inadequate information. Be sure to allow sufficient time for the Purchasing Department to obtain prices, place the order, and receive shipment.
R. Split Purchases
No purchase shall be divided in amounts for the purpose of bringing it within certain dollar or time limits relative to required bidding periods. Failure to combine orders when this logically should be done in the interest of economy is circumventing the University policy on combined purchases and, therefore will not be approved (i.e. purchase requisitions containing identical account number, object code and vendor). Whenever this occurs, the Director of Purchasing will return the purchase requisition to the requisitioner.
S. Bid Bond or Check
1. Bid bond or check may be required in Invitation to Bid. If the invitation to bid so specifies, a bidder must file with the Purchasing Department a "bid bond", certified check, cashiers check, or bank draft in the amount of and in the form specified in the invitation. The bid will not be considered unless this provision is met.
2. Surety required. In addition to signing the bid bond as principal, the bidder must have the bond signed by a surety company authorized to do business in the State of Tennessee. If the surety on a bond has its authority to do business in the State of Tennessee revoked, or if for any reason ceases to do business in the state, the bidder must promptly obtain another surety on the bond.
3. Condition of the bond. The bond must be conditioned on full performance and all obligations imposed on the bidder in this Manual, by submission of a bid including the obligation to keep the price firm for as long a period as specified in the bid, and the obligation to file a performance bond when required if awarded a contract. The bid bond shall provide that upon the bidder's failure to perform any of such obligations, the University may recover from the bidder and/or surety company any and all damages suffered because of such failure.
4. Deposit Agreement. If the bidder elects to deposit a certified check, cashier's check, or bank draft, it will be security for full performance of all obligations referred to above in this section. If the bidder fails to perform any one or more of such obligations referred to above, the Vice President for Business and Finance may endorse the check and retain as much of the proceeds as is necessary to compensate the University, for any and all damages suffered because of such failure.
5. Return of Check. If a bidder is not the successful bidder, the certified check, cashier's check, or bank draft will be returned to that Bidder promptly after the award is made. The check of the successful bidder shall be returned after the contract is awarded or as soon as such Bidder has filed a bid bond, if one is required.
T. Performance Bond
A successful bidder may be required to file a "performance bond" in a designated amount, whenever it appears to be in the best interest of the University to do so.
A complete written record on all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.
U. Evaluation and Award
The basic intent of the evaluation in each instance shall be to determine the lowest qualified bidder meeting the conditions and specifications. When this determination is made no more factors or considerations can be demanded and no fewer accepted than those imposed by the complete invitation to bid.
Awards will be made to the bidder whose bid meets all specifications and other requirements of the invitation to bid and is the lowest and most responsible of all bidders to include, but not be limited to, the following:
1. Cash discounts will be considered in making an award of bids.
2. Unit Price Controlling. In case of a mistake in the extension of a price, the unit price shall govern.
3. Awards of Any or All Items. An award may be made to the lowest aggregate bidder for all items on invitation, on a group or an individual basis, whichever is found to be in the best interest of the University.
4. All bids are subject to rejection by the University, and in those instances where evaluation dictates the rejection of the lowest bid as not meeting the standards established in the invitation, a complete factual statement shall be recorded on the bid summary sheet as a part of the permanent records to show the reason for rejection, become a matter of public record, and remain open to public inspection.
5. After bids have been evaluated and the successful bidder has been determined, the Director of Purchasing shall issue a written purchase order to the vendor.
6. Vendors attending a bid opening will be required to sign the Bidders Attendance and Registration Form.
V. Samples
1. A sample may be requested on any item bidded to be submitted either at the time the bid is submitted or prior to award. Usually, the invitation will specify whether or not samples will be required. Each sample must be labeled clearly with the vendor's name, address, commodity classifications, brand and model, and bid invitation number. All samples submitted must be representative of the commodities or equipment which shall be delivered if a contract is awarded. Samples submitted by successful bidders shall be retained for use in comparing items delivered under the contract.
2. Transportation Charges. No samples will be accepted by the Purchasing Department unless transportation charges, including cartage, have been prepaid. Samples received from bidders who are not successful shall be returned upon written request and payment of all shipping costs by the bidder.
W. Change Order
The change order form will be used to alter or cancel a purchase order. The University may make changes in quantities, drawings, specifications, and time for performance of the order. An equitable adjustment in the price or delivery or both shall be made.
1. Cancellation. When a purchase order is issued by the Purchasing Department, it has certain legal ramifications and cannot be cancelled without proper cause. Therefore, in circumstances where a department feels that a purchase order should be cancelled, the department head should contact the Director of Purchasing to discuss the matter and receive instructions relative to what action should be taken, if any on the order under consideration.
If it is determined that a order should be cancelled, the department head will be asked to send a written memo to the Director of Purchasing requesting that a change order be issued to cancel the purchase order. A copy of the cancellation request should be provided the Budget Office or Grants Administration, depending upon whether restricted or unrestricted funds are involved.
The following information must be included in the memo when requesting cancellations:
a. Name of the department initiating the cancellation report.
b. Budget account number.
c. Requisition number.
d. Purchase order number.
e. Name of vendor.
f. The total dollar amount of the order.
g. If only an item or several items are to be cancelled, then the item number and total price for the particular item or items, as well as the information in items a through f above must also be included in the request.
2. Change Orders are not needed in order to make payment as follows (specific examples):
a. A quantity variance of less than ten percent (10%) on an individual purchase order (usually associated with printed material, bulk shipments, i.e., coal, feed, rock, etc.).
b. Incorrect extensions - unit price shall prevail.
c. A vendor's inability to ship an item on a purchase order resulting in a decrease in the total amount of the purchase order.
d. Authorized freight charges (debit voucher payment).
All of these conditions can be corrected without requesting a purchase order change by liquidating the entire amount on the purchase order at the time the disbursement voucher is written, and expending the correct amount.
X. Emergency Purchases
Purchases of specific materials, supplies, equipment, or services may be made in the open market without competitive bidding for immediate delivery only to meet bona fide emergencies arising from any unforeseen cause. All emergency purchases shall, if practicable, be made on the basis of competitive bids.
1. Emergency conditions are described as those needs arising from any unforeseen cause including, but not limited to, delays by contractors, delays in transportation, unanticipated volume of work, and acts of God.
NOTE: So called emergency needs that arise due to poor planning do not fall in the above categories, and are normally not considered.
2. ALL BONAFIDE EMERGENCY PURCHASES MUST BE APPROVED BY THE PRESIDENT OR HIS DESIGNEE and a written report on the circumstances of any such emergency justifying the purchase shall be prepared and maintained by the University's Purchasing Department.
Y. Complaint to Vendor
Initial complaints should be made as soon as possible and copies should be distributed as noted on the complaint form. The copies are designed to inform all concerned of any action or lack of action as soon as possible, and with minimum effort.
The complaint form should be used to report all instances where the vendor fails to perform in accordance with the purchase order. This includes failure to perform by the date specified or within a reasonable length of time, and any unacceptable difference between the receiving copy of the purchase order and the merchandise received. The receiving copy of the purchase order should always be available and used in receiving merchandise or services.
Items with unacceptable differences that are visible should be refused, returned, and reported as returned with a full explanation of the reason for the return. Performance that is below that which can be reasonably expected or hidden damages should be reported immediately upon discovery. All complaints should be accurate and specific.
SHIPPING AND RECEIVING
When any supplies, equipment, or materials are received by the University, the receiving agent thereof shall make a written certification that the supplies, equipment, or materials received were equal in quality and quantity to those requisitioned
A. Receiving Reports
All shipments will be delivered to the University's Central Receiving Facility unless otherwise approved in writing by the Director of Purchasing. When items are to be picked up from the vendor, it will be so noted on the purchase order.
A receiving report will be prepared promptly on each shipment of supplies, materials, or equipment received in the University. All information on the receiving report shall be completed and appropriate signatures obtained when delivered to departments and prior to forwarding to Accounts Payable. The receiving report is an important document and its accuracy is indispensable. Complete records on all receiving reports shall be maintained and filed in numerical order in order to provide for a clear audit trail on the receipt of all purchases.
B. Orders Past Delivery Date
Follow-up action shall be initiated on purchase orders that have not been received after the specified delivery date on the purchase order. This action shall be taken ten (10) days after the delivery date and made a part of the file.
C. Partial Filled Orders/Shipments
Orders received that have been only partially filled on the date of delivery and the vendor failed to indicate delivery date of remaining order; follow-up action will be promptly taken to notify vendor. When partial shipments are received, each will be regarded as a separate delivery.
D. Duplicate Orders/Shipments
Duplicate shipments or unauthorized substitutions made by the vendor will be returned with shipping costs borne by the vendor. Cost for duplicate shipments errors made by the department will be borne by the department. In all instances, a re-shipping authorization number will be requested from the vendor. Appropriate documentation shall be maintained on all transactions.
E. Unidentified Shipments/Orders
A shipment received at the Central Receiving Facility from a vendor that cannot be identified will be returned to the vendor only after follow-up action has been taken. All shipping costs will be borne by the vendor if shipment has to be returned.
F. Damage Claims
All carriers recognize their liability for two (2) types of damages - apparent and concealed damages. Prompt examination of the shipment by Central Receiving will reveal the apparent damaged order. Where there is evidence of damage, the package or packages shall be opened immediately, permitting a joint inspection or examination of content by the carrier's representative and Central Receiving.
An inspection report listing all details of the physical damage and/or shortages will be placed in writing and signed by Central Receiving and the carrier representative.
A claim will be submitted to the carrier with necessary documentation to support claim.
Claims must be supported by:
1. Original bill of lading.
2. Original paid freight bill (bond of indemnity may be acceptable where either of the above documents have been lost or misplaced).
3. Original invoice or certified copy of or extract from the original invoice.
4. Copy of carrier's document pertaining to the particular shipment involved, whereon carrier has acknowledged loss and/or damage over carrier's signature.
5. Inspector's report (concealed loss or damage claim).
6. Consignee form (concealed loss or damage claim).
7. Shipper's form (concealed loss or damage claim).
8. Repair invoice (when consignee repairs damage).
G. Inspecting and Checking of Items Received by Departments
The system of inspecting and testing shall be used to insure that the University is receiving the quantity and quality of goods for which it has negotiated. The department receiving the merchandise is responsible for promptly unpacking and carefully inspecting shipments. Any discrepancies or shortages shall be reported promptly, in writing, to the Purchasing Department referring to the purchase order number and vendor, and attaching all pertinent papers. The Purchasing Department will work out the problems involved to protect the University's interest and to complete the transaction.
H. Order(s) Picked Up from Vendor
Orders picked up from vendors without prior written approval is in violation of University purchasing policies and procedures. Written approval will be placed on each duly authorized purchase order and must be placed on the purchase requisition when initiated by the department.
I. Delivery to Department
Central Receiving will make deliveries to departments daily during regular work hours Monday - Friday between the hours of 8:00 a.m. - 12:00 p.m. and 1:00 p.m. - 4:00 p.m. When deliveries are made and no one is available in the department to receive the order, the Receiving Report will be annotated to show that an attempt was made to deliver the order.
J. Return of Supplies or Equipment
Supplies or equipment returned to suppliers or manufacturers for adjustment or credit must be cleared through the Purchasing Department. Credit memos received that cannot be identified with returns will receive disposition at the discretion of the Finance and Accounting Office.
PAYMENT OF INVOICES
Disbursement of all University managed funds shall be accomplished by the following methods:
•Approved debit voucher payment
•Duly authorized purchase order
A. Invoices
All invoices shall be forwarded to Accounts Payable to the address shown on the bottom of the purchase order. Original invoices mailed to departments by vendors are required to be forwarded to Accounts Payable upon the date of receipt. Departments shall not communicate with vendor to have invoice(s) forwarded to them, which is a violation of University Policy. Invoices shall be paid within forty-five (45) days of receipt and must show as a minimum, the following:
•Vendor name and address
•Purchase order number
•Item description and number
•Quantity, unit, unit price and extension for each item discount, if applicable.
NOTE: Invoices are to be paid within 45 days of receipt of invoice.
B. Documents Required for Payment
The following documents are required to support payment:
•Duly authorized purchase order
•Receiving report
•Invoice
C. Prepayment
Occasionally, it becomes necessary to make advance payment for items. This is always true for U.S. Government documents from the Superintendent of Documents and for certain other items, usually of small value. In such cases, be sure of the accurate and complete description of the item required, its price, catalog number, and the exact name and address of the supplier. When ordering U.S. Government publications, obtain and complete an order form and attach to purchase requisition. Order forms can be obtained from Purchasing. Also, attach to the requisition any supporting documentation such as advertisement, letters from the vendor, proforma invoices, etc. Prepayment will only be made for goods and services upon receipt of prior written approval and before issuing the purchase order.
D. Partial Payments
In accordance with the terms of the purchase order for which partial payment is required a continuation form will be used for the articles or services received in part.
E. Special Disbursement
Disbursement for the following types of transactions require payment to be made within the prescribed time since the purchase was not encumbered prior to the obligation being made:
•Debit voucher payment
•"Emergency" purchase order
NOTE: All of the above requests for payment must be supported by invoice and/or a receipt.
F. Processing Payments (authorized purchase order)
•Purchase orders upon receipt are placed in suspense file.
•Verification by the receiving report and/or an invoice approved, if services are involved.
•Invoices are matched with the purchase order.
•Payment voucher listing and approval sheet prepared, coded, a batch number and forwarded to the Computer Center.
•Batch sheet voucher listing is keypunched and a first run printout is prepared for edit by the Accounts Payable Section. Corrections are made, if any.
•Checks are reviewed for correctness. If approved, authorized signature is placed on checks and mailed to vendors. If final payment is being made, documents are stamped processed and placed in permanent paid files, for payment and assigned.
GIFTS AND DONATIONS
A. Purpose
The purpose of this policy is to provide guidance to all employees engaged in the acceptance of gifts and/or donations on behalf of the University, regardless of source or a specific use by a designated department.
B. Authority
The Director of Development is responsible for coordination and acceptance of all gifts (personal property and cash) to the University. This includes but not limited to equipment of any kind, vehicles, machinery computer equipment, etc. shall be processed without exception, through the Office of Development.
The Office of Development will therefore be advised immediately upon learning of the probability of an offer of a gift or donation. After securing all appropriate information, a written recommendation shall be submitted to the President who will make the final decision on acceptance of the proposed gift or donation.
C. Gifts Other Than Cash
For all gifts other than cash, departments or activities which reports to the Office of the Vice President for Academic Affairs shall submit the above information to the Vice President for Academic Affairs for his/her consideration and recommendation to the Director of Development. All other departments and activities shall submit the above information to the Vice President for Business and Finance for consideration and recommendation to the Director of Development. Cash donations with significant restrictions on use (other than contributions to establish restricted accounts) shall also be reviewed in the same manner as non-cash gifts.
D. Department Actions
Any person who gains knowledge of the probability of the offer of a gift or donation to the University shall advise his department or activity head. The department or activity head shall secure the following listed information (if applicable) concerning the potential gift/donation.
1. Identification of the item(s) and donor.
2. Estimate of the value of the item(s) - preferably based on the judgment of the department head or other responsible department official. This statement is for internal use only and cannot be considered official for donor's tax purposes.
NOTE: Professional appraisals of value of non-cash items (for tax purposes) will normally be the responsibility of the donor; however, other arrangements may be made at the discretion of the Director of Development.
3. Restrictions on use of the gift.
4. Recommendation as to acceptance.
5. Statement as to the University's need for the item(s), if non-cash.
6. Statement as to the condition of the item(s).
7. Statement as to the availability of space for use of the item(s).
8. Details on any liabilities associated with the gift, i.e., mortgages or liens.
9. Estimate of cost renovation, if necessary, to make the gift usable.
10. Estimate of the annual maintenance cost and other ongoing expenses, if accepted.
11. Estimate of cost of delivery and/or installation.
12. Estimate of all other costs that might be incurred by acceptance of the item(s).
E. Office of Development Actions
A complete record of all gifts and donations to the University will be maintained in the Office of Development.
Proper acknowledgement of all gifts and donations will be made by the Director of Development. He will also insure that all letters and publicity concerning gifts and donations are appropriately coordinated prior to release.
Upon receipt of an offer of a gift/donation, the required information concerning the item(s) and recommendation from the appropriate Vice President, the Director of Development will accomplish the following:
1. Review thoroughly the information submitted by the department/activity head.
2. Secure the approval of the President.
3. Review the gift/donation proposal with the prospective donor, and advise the donor of the non-acceptance and the reasons therefore: or the terms and conditions under which the gift/donation will be accepted.
4. Advise the concerned department of the decision to accept or not accept the gift or donation.
5. Coordinate the transfer of ownership and physical possession of the item(s) with the donor and the appropriate University department officials; including necessary steps to have the item(s) placed on the current inventory.
6. Advise the offices of the following listed officials of the acceptance of the gift or donation. Non-cash items shall be fully described and the terms and conditions under which the acceptance was made shall be included:
Vice President for Business and Finance
Director of Purchasing
Other departments or activity heads who may be concerned.
F. Purchasing Department Actions
Once the above process is completed, the President will forward a form letter stating that this gift has been accepted and entered into the Property Inventory at the specific value stated in the President's letter.
Upon receipt of the approved forms from the President's Office, a copy will be furnished the University Property Officer. The Property Officer will:
1. Review the documentation for accuracy.
2. Determine if the item and value meet the requirements for inventory purposes.
3. In the event the item meets the criteria for inclusion in the property inventory, make arrangements with the department receiving the property to tag item(s).
4. Prepare the necessary paperwork to include the item(s) on the department's property inventory.
5. Complete and submit property inventory sheets to Finance and Accounting.
G. Real Property and Testamentary Gifts
The Office of the Vice President for Business and Finance shall be responsible for the coordination and acceptance of all donations and gifts or real property and testamentary bequests and devices in coordination with the Office of Development. The same information shall be secured for these type donations or gifts as outlined herein.
H. Tennessee Board of Regents Approval
The Office of the Vice President for Business and Finance shall be responsible for securing the approval of the Tennessee Board of Regents, where appropriate.
MISCELLANEOUS PURCHASING MATTERS
A. Sales Tax Exemption
Supplies, equipment and services purchased by the University, or goods or services acquired for resale are tax exempt, and taxes shall not be paid. A Tax Exemption Certificate will be issued in the name of the vendor providing the services. All tax exemption certificates will be issued and signed by the Director of Purchasing and mailed rather than be given to the individual requesting the certificate.
B. Loan of Equipment
The loan of equipment to outside agencies, organization, and other educational institutions must have prior written approval by the President or his designee.
C. Removal of Equipment/Property From University Premises for Personal Use
The removal of equipment and/or movable property from University premises is prohibited unless prior written approval is obtained from the Vice President for Business and Finance. Persons, who do not have such written request in their possession when removing University equipment/property from the premises, may be subject to a charge of property misappropriation.
D. Minority and Small Businesses
The University welcomes and encourages minority and small businesses to participate in the competitive bidding process of providing goods, services, supplies and equipment needed by the various departments within the University, whenever possible.
Each prospective minority and small business is required to file a vendor application to be placed on the vendor's list. Regular visitation to the University to check the bidder bulletin board, a means by which procurement information can be readily obtained, is encouraged. Tennessee Board of Regents including state laws governing procurement activities will be adhered to regardless of business
UNIVERSITY ORGANIZATION FOR PROCUREMENT
A. Authority
B. Authority to Obligate the University
C. Approving Authority for Certain Actions
D. Centralization and Authority Delegation for Procurement
E. Limitations
F. Purchasing Objective: Greatest Value for Funds Expended
G. Conflict of Interest in Procurement
H. Receiving and Interviewing Sales Representatives
I. Unauthorized Purchases
PURCHASING DEPARTMENT
A. The Purchasing Department has been Assigned Definite Responsibilities
B. Achieving and Maintaining a Successful Purchasing Operation
C. Availability of Funds
D. Coordination of Purchasing Functions among System Institutions and Schools
E. Lifecycle Costs
F. Council of Buyers
GENERAL PURCHASING REQUIREMENTS
A. Competitive Bidding and Specifications
B. Invitation to Bid
C. Minimum Notice and Number of Bids
D. Bid Withdrawal, Bid Revision, and Bid Rejection
E. Acceptance of Bids
F. Protested Bids
G. Tie Bids
H. Articles and Services on State Contract
I. State Manufactured Articles and Services
J. Sole Source and Proprietary Purchases
K. Purchases for Resale in Auxiliary Enterprises
L. Purchases for Libraries, Excluding Materials and Supplies Identified for Consumption
by the Library
M. Data Processing and Related Equipment Purchases
N. Prohibited Transactions
O. Disposal or Surplus Personal Property
P. Government/State Surplus Property
Q. Property Loss and Theft
R. Reports
S. Purchasing Records
T. Contracts and Agreements
U. Utility Contracts
V. Purchase Requisition
W. Alcohol, Drugs, and Hazardous Merchandise
X. Exceptions Policies and Guidelines Applicable to This Manual
GENERAL OVERVIEW
A. Vendors Mailing List
B. Selection of Vendors
D. Supply Sources for Unusual Items
E. Previous History for Commodities
F. Pool or Cooperative Buying
G. Establishment of Current Prices
H. Price as a Function of Value
I. Factors in Selection of Major Equipment
J. Equipment Maintenance
K. Standardization of Common-Use Items
L. Determination of Quality Specifications
M. Revision of Order Quantities
N. Economical Order Quantities
O. Consolidation of Purchases
P. Repetitive Orders
Q. Price Inquiry by Departments
R. Split Purchases
S. Bid Bond or Check
T. Performance Bond
U. Evaluation and Award
V. Samples
W. Change Order
X. Emergency Purchases
Y. Complaint to Vendor
SHIPPING AND RECEIVING
A. Receiving Reports
B. Orders Past Delivery Date
C. Partial Filled Orders/Shipments
D. Duplicate Orders/Shipments
E. Unidentified Shipments/Orders
F. Damage Claims
G. Inspecting and Checking of Items Received by Departments
H. Order(s) Picked Up from Vendor
I. Delivery to Department
J. Return of Supplies or Equipment
PAYMENT OF INVOICES
A. Invoices
B. Documents Required for Payment
C. Prepayment
D. Partial Payments
E. Special Disbursement
F. Processing Payments (authorized purchase order)
GIFTS AND DONATIONS
A. Purpose
B. Authority
C. Gifts Other Than Cash
D. Department Actions
E. Office of Development Actions
F. Purchasing Department Actions
G. Real Property and Testamentary Gifts
H. Tennessee Board of Regents Approval
MISCELLANEOUS PURCHASING MATTERS
A. Sales Tax Exemption
B. Loan of Equipment
C. Removal of Equipment/Property From University Premises for Personal Use
D. Minority and Small Businesses
E. Removal/Suspension from Vendors List
F. Buyer
G. Procedure for Bond Fund Projects
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Tennessee State University
Purchasing Policies and Procedures
INTRODUCTION
This manual is for general use of University personnel to comply with purchasing policies and procedures. It is not intended to inform the General University population of the technical and/or legal requirements of Purchasing in such technical processes as contracts, bidding procedures, etc. However, in some instances, departments must furnish technical information data to ensure that the department receives satisfactory materials to accomplish its intended purposes and mission(s). Accordingly, users of this manual have an obligation to check with Purchasing at all times to ensure that any information contained herein is the latest. Purchasing will initiate and distribute any changes in policies and procedures contained herein resulting from University, TBR, or legal changes without notice to departments.
These policies and procedures have been made as simple as possible and meet the requirements of State of Tennessee laws, policies of the Tennessee Board of Regents (TBR) and adopted University policies, good business practice, and special requirements adopted from time-to-time by various agencies from which the University secures funds for special programs. These procedures are meant to cover most cases involving procurement for Tennessee State University, and are generally consistent with those of similar State institutions of higher education.
The University considers its vendors to be valuable assets. It attempts to administer buying practices within established policy so that all suppliers are considered and dealt with ethically. The best ones will be awarded shares of the services rendered and ultimate, long-range benefit to the University as a whole. All savings, including cash discounts, achieved by combining purchases, using buying power of the University as a whole, or in developing larger quantities per order by the cooperation of any department, as well as with other institutions under the governance of the Tennessee Board of regents, such actions will benefit the departmental or project budget which provides the funds for purchases.
The purchasing function as defined by statutes is extended to induce the total supply and/or materials management concept involving such related activities as central receiving, inspection, inventory control, and disposal of surplus or unusable stocks of materials and equipment.
Standardization and simplification of products and procedures also may result in substantial and repetitive savings to the individual department budget.
UNIVERSITY ORGANIZATION FOR PROCUREMENT
A. Authority
Chapter 115, Public Act of the 86th General Assembly of the State of Tennessee, 1969 Session, is the basis for the University's purchasing authority and responsibility as administered by the Tennessee Board of Regents, pursuant to Article 6, Section 2 (g), and Article 7, Section 2 (a) of the bylaws of the Tennessee Board of Regents.
The following policies and procedures are adopted as minimum standards for exercise by the President of Tennessee State University or his designee in accord with the authority delegated to institutions by the State University and Community College System of Tennessee, as set forth in Tennessee Board of Regents Policy No. 4:02:10:00.
B. Authority to Obligate the University
The President, Vice President for Business and Finance, and Director of Purchasing are the only persons authorized to obligate the University. Without definite and prior written permission, no University department may order directly by letter, telephone, telegraph, or in any other manner. The University will assume no obligation except in a previously issued and duly authorized purchase order.
C. Approving Authority for Certain Actions
The Vice President for Business and Finance shall be the approving authority for the following actions only when substantial written justification is submitted and upon recommendation by the Director of Purchasing:
1. Award Other Than Low Bid
2. Sole Source/Proprietary Purchase
3. Emergency Purchases
D. Centralization and Authority Delegation for Procurement
The responsibility for all procurement, contract negotiations and administration of procurement policies and procedures has been centralized and delegated to the Director of Purchasing.
E. Limitations
Pursuant to these policies and procedures, the following purchases are not included, and shall be expressly subject to the approval of the Chancellor or his designee, Tennessee Board of Regents:
1. Purchase or lease of real property.
2. Purchase or lease of data processing equipment.
3. Purchase of insurance.
4. Purchase of professional and/or consultative services.
5. Purchase of capital outlay projects from any fund source whatsoever.
F. Purchasing Objective: Greatest Value for Funds Expended
The expenditures of all Tennessee State University funds regardless of the source shall be made in accordance with established University policies and procedures, and Tennessee Board of Regents' regulations. Particular care shall be exercised to comply with federal laws as well as any applicable contract requirements or special terms of grants and donations. All funds shall be handled so that the greatest ultimate value per dollar expended is achieved.
G. Conflict of Interest in Procurement
No officer or employee of the Purchasing Department, or any member of any department head, or any project head of the institution, charged with the responsibility of initiation requisitions; shall accept or receive directly or indirectly from any person, firm, or corporation to where any contract for the purchase of materials, supplies, or equipment for Tennessee State University, may be rewarded by rebate, gifts, or otherwise any money or anything of value whatsoever, or any promise, obligation, or contract for future rewards or compensation.
H. Receiving and Interviewing Sales Representatives
University personnel having a need to contact sales representatives for a particular brand name or product should contact the Purchasing Department for assistance. Sales representatives contacting University personnel without being scheduled through the Purchasing Department should be encouraged to contact the Purchasing Department. When sales representatives possess information concerning new products or special value, they will be referred to appropriate offices.
All sales representatives visiting the Purchasing Department are required to sign the Sign-In Register on each visit, irrespective to the number of visits.
I. Unauthorized Purchases
No individual has the authority to enter into purchase contracts or in any way to obligate Tennessee State University for procurement indebtedness unless specifically authorized to do so by the President, Vice President for Business and Finance, or the Director of Purchasing. Any such negotiations are considered unauthorized purchases and the individual may encounter a personal obligation to the vendor. Firms ordinarily doing business with the University are aware of this policy and are advised that all purchases legally chargeable to Tennessee State University must be authorized by an official Tennessee State University purchase order signed by an authorized buyer. Exclusive of the debit voucher procedure, the University will not reimburse officers or employees for the cost of any such purchases on behalf of the University unless previous arrangements to that end have been made.
PURCHASING DEPARTMENT
Tennessee State University's Purchasing Department is organized and administered as a functioning area under the University's Business and Finance Division.
The function of the Purchasing Department is to organize and administer procurement for all departments of the University in accordance with the responsibility and authority delegated by the President and Tennessee Board of Regents.
The Purchasing Department must work and coordinate with hundreds of individuals within the University and with thousands of vendors in supplying complex requirements economically, effectively, and as promptly as circumstances will allow.
The Purchasing Department shares in certain responsibilities with the Finance and Accounting Office, Budget Office, and other University administrative offices in expending University funds.
A. The Purchasing Department has been Assigned Definite Responsibilities:
1. Procurement of materials, supplies, equipment and services for all University departments.
2. Testing and evaluation of various commodities to insure proper balance of quality and monetary expenditures.
3. Expedite delivery of urgently needed goods and services.
4. Refer information about new or improved products to departments using these products.
5. Inform departments of exceptional buys on selected commodities.
6. To exercise prudent controls and maintain surveillance over all purchases and purchasing related activities to insure compliance with the State statutes, regulations, Tennessee Board of Regents, and such other policies and procedures as may be adopted by the University.
7. To assist in planning for acquisition of materials, supplies, equipment, or services, if the needs of a department are complicated or extensive or if a major project is being planned.
8. To insure uniform enforcement of contractual obligations for all firms having University contracts.
9. To stimulate interest in bidding by all responsible vendors who can furnish material, equipment, supplies, and services meeting University specifications.
10 To offer full opportunity for all qualified bidders to compete for University business on an equal basis.
11. To offer full opportunity to all qualified minority vendors.
12. To encourage fair and open competition among bidders.
13. To enable University personnel to understand policies and procedures by annual workshops or other appropriate means.
14. To obtain maximum value for each dollar spent by the University.
15. To assure compliance with University record and retention policies.
B. Achieving and Maintaining a Successful Purchasing Operation
In order to achieve and maintain a successful purchasing operation, departments should:
1. Follow the procedures prescribed in this manual.
2. Plan their needs well in advance.
3. Describe accurately on purchase requisitions quantity, quality, and detailed specifications of the item needed.
4. Initiate purchase requisitions forty-five (45) to sixty (60) days in advance of the desired date needed.
5. Indicate on the purchase requisition the actual date (ASAP, Immediately and Emergency, are not dates), and location (room) to which items are to be delivered.
6. Use the correct account number and object code.
7. Obtain all required signatures on the purchase requisition.
C. Availability of Funds
No purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase.
D. Coordination of Purchasing Functions among System Institutions and Schools
In all contracts and other bid processes, consideration will be given to such wording that would allow other Tennessee Board of Regents member institutions and schools to purchase under the terms and conditions of the bid awarded by the University.
E. Lifecycle Costs
Lifecycle costs will be used in contracting for major energy-consuming products, and in the case where a lifecycle cost and/or energy efficiency standard has been developed for a product by the federal government apply such lifecycle cost and/or energy efficiency standard in the determination of the lowest qualified and responsible bidder.
F. Council of Buyers
The Director of Purchasing is the University representative on the Tennessee Board of Regents Council of Buyers.
GENERAL PURCHASING REQUIREMENTS
A. Competitive Bidding and Specifications
All purchases shall be based upon the principle of competitive bidding except as herein provided. Whenever possible, all specifications for materials, supplies, equipment and services shall be worded or designed so as to permit open and competitive bidding for the supplying of the article, commodities or services to which they apply. It will be considered open and competitive bidding by utilizing one of the following purchasing techniques:
1. Specifications based on brand names and product numbers - reference to brand names, trade names, model numbers or other descriptions peculiar to specific brand products is made to establish a required level of quality and functional capabilities; it is not intended to exclude other products of that level. Comparable products of other manufacturers will be considered if proof of comparability is contained in the bid. It shall be the responsibility of the vendor, including vendors whose product is referenced, to furnish with the bid such specifications, catalog numbers and pages, brochures of other data as to provide an adequate basis for determining the quality and functional capabilities of the product offered. Failure to provide this data may be considered valid justification for rejection of a bid.
2. Specifications based on standard specifications.
3. Specifications based on qualified products list.
4. Specifications based on catalogs, price lists, or price schedules.
B. Invitation to Bid
Invitations to bidders shall specify the following:
1. Time and place that bids will be received and opened.
2. Articles or services for which such bids are to be submitted and the specifications for such articles or services.
3. Amount or number of articles or services required.
4. Time of delivery.
5. Amount, if any, of any bid bond or certified checks to accompany the bid.
6. Amount, if any, of any performance bond which will be required if the vendor is the successful bidder.
7. Date bid evaluations available for viewing.
8. Any other requirements, conditions, or information in reference to the purchase deemed necessary.
C. Minimum Notice and Number of Bids
The number of bids required and the notice to bidders for solicitation of bids shall be as follows:
1. If the estimated amount of the purchase is $5,000 or more, written sealed bids must be solicited from fifteen (15) vendors or the number of vendors on the Vendors List - whichever is less (The Director of Purchasing must approve the solicitation of less than 15 bids). The invitation to bid must be mailed at least fourteen (14) days (ten days where all vendors are local vendors) before the date the bids are scheduled to be opened.
2. If the estimated amount of the purchase is at least $500 but less than $5,000, written or telephone bids must be solicited from at least three (3) qualified vendors. When telephone bids are solicited, a written record of the bidders and bid amount shall be maintained.
3. If the estimated amount of the purchase is less than $500, the purchase may be negotiated by the Director of Purchasing.
D. Bid Withdrawal, Bid Revision, and Bid Rejection
Before bid opening, a vendor may be permitted to withdraw a bid entirely and/or submit a substitute bid. The vendor making such a request must submit suitable identification.
After bid opening, a vendor will be permitted to withdraw a bid only where there is obvious clerical error in the bid such as a misplaced decimal point, or where enforcement of the bid would impose unconscionable hardship due to an error in the bid resulting in a quotation substantially below the other bids received. Withdrawal will be considered only upon written request from the vendor.
In cases of errors in the extension of prices in the bid, the unit price will govern.
A bid may not be revised after bid opening.
When it becomes necessary to reject all bids, the reason for such rejection must be set out in complete detail and made available to all bidders who submitted a bid.
Action to reject all bids shall be taken only for unreasonable high price errors in the invitation to bid, cessation of need, unavailability of funds, or any other reason approved by the President or Director of Purchasing or his designee.
E. Acceptance of Bids
All bids shall be subject to rejection by the President or his designee. If awarded, the contract for purchase shall be awarded to the lowest qualified and responsible bidder, taking into consideration quantifiable factors including but not limited to the apparent ability of the bidder to perform the proposed contract, the conformity of the articles or services to the specifications, any discount allowed for prompt payment or for any other reason, transportation charges, and the date of delivery specified in the invitation to bidders.
A bond for the faithful performance of any contract may be required in the discretion of the University. A complete written record of all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.
Bids must be received in the specified location on or before the date and hour designated for bid opening. Late bids will not be considered in contract award.
All bids received shall be publicly opened and examined by the Director of Purchasing or his designee at the time and place specified in the Invitation to Bid. All bids conforming to the invitation together with the name of the bidder shall be recorded, become a matter of public record, and remain open to public inspection after award.
Each bid should give the full name and business address of the bidder. Unsigned bids will be rejected. The person signing the bid must show his title, and if requested, must furnish satisfactory proof of his authority to bind his company in contract. Bids must be written with typewriter, ink, or indelible pencil; otherwise, they may not be considered. Purchase order will be issued to the firm name appearing on the bid.
Alternate bids will not be considered unless specifically called for in the bid.
F. Protested Bids
1. Right to Protest
An aggrieved bidder may submit a protest in writing to the Director of Purchasing within ten (10) days after he/she knows or should have known the facts giving rise to the protest.
2. Authority to Resolve Protest
The Director of Purchasing shall review all bid protests and communicate his decision in writing to the Vice President for Business and Finance. If a protest is not resolved to the satisfaction of the aggrieved bidder, the aggrieved bidder may request an opportunity to meet with the Vice President for Business and Finance to present his grievance. Protests shall be submitted to the Vice President for Business and Finance within ten (10) days of a written decision of the Director of Purchasing. The Vice President for Business and Finance, in consultation with the President, shall review the appeal. If the Vice President for Business and Finance's decision does not resolve the issue, the aggrieved bidder may appeal to the Chancellor, or his designee, Tennessee Board of Regents. A request for this action must be made in writing within ten (10) days of the date of the decision of the Vice President for Business and Finance. The determination of the Chancellor or his designee, is final, and shall be given in writing and submitted to the protestor.
3. Stay of Procurement During Protest
An aggrieved bidder may request a stay of award prior to award of the contract. Upon notification of a request for a stay to the Director of Purchasing, the proposed acquisition shall not proceed until the protest has been resolved, unless the Chancellor or his designee makes a written determination that continuation of the bid process or the award of the contract without delay is necessary to protect substantial interests of the University upon the recommendation from the Vice President for Business and Finance.
4. Protest Subsequent to Award
The Tennessee Claims Commission has exclusive jurisdiction to determine all monetary claims against the state for the negligent deprivation of statutory or constitutional rights.
G. Tie Bids
A tie bid exists when two or more bidders offer products that meet all specifications, terms and conditions at identical prices, including cash discount offered. In such case, a tie bid will be broken by the following methods in descending order of preference:
1. In-state business will be given preference.
2. Small and minority business will be given preference.
3. Award item(s) to vendor who was low bidder on other item(s) being bid per the same requisition.
4. By lot or coin toss (properly witnessed and documented).
H. Articles and Services on State Contract
Purchase of materials or services for which the State of Tennessee, Department of General Services, Purchasing Division, has awarded a contract (SWC) to a vendor through the competitive bidding process, will be made without adherence to paragraph (C), pertaining to Minimum Notice and Number of Bids, provided the vendor meets the contract specifications and price.
I. State Manufactured Articles and Services
State manufactured articles and services will be purchased from other state agencies, e.g., Department of Correction, Blind Services, whenever such items or services are available therefrom and meet the desired conditions and standards.
J. Sole Source and Proprietary Purchases
1. Sole source or proprietary purchases may be allowed pursuant to the following:
a. Sole Source Procurement - Sole source purchases are made only when items are unique and possess specific characteristics that can be filled by only one source.
b. Proprietary Purchase - A proprietary product is one that is manufactured and marketed by a person or persons having the exclusive right to manufacture and sell the product. Marketing is generally controlled by franchises that may include competitive sales at wholesale or retail levels. When it is found that bids may be obtained from different franchises, bid invitation must be issued unless the estimated purchase is less than $500.
2. Factors to be considered in sole source and proprietary purchases include the following:
a. Whether the vendor possesses exclusive and/or predominant capabilities or the items contained a patented feature providing superior utility not obtainable from similar products.
b. Whether the product or service is unique and easily established as one of a kind.
c. Whether the program requirements can be modified so that competitive products or services may be used.
d. Whether the product is available from only one source and not merchandised through wholesalers, jobbers and retailers.
e. Whether items must be interchangeable or compatible with in-place items.
f. Whether the cost of conversion, including but not limited to disruption re-training, and replacement precludes bidding competitively.
g. Whether the product is to be used in an instructional setting and the intent is to provide instruction on the specific product or diversity of products.
h. Other justifications as approved by the Chancellor, Tennessee Board of Regents, or his designee.
3. After review of the written justification from the requisitioning department and ascertaining that the item to be purchased meets one or several of the above criteria, the item may be purchased without following competitive bid procedures. A written quote is obtained from the supplier and a purchase order issued. Request for Sole Source or Proprietary Purchases requires approval of the President or his designee, and may be procured utilizing non-competitive negotiation.
4. Whenever specifications are not so worded or designed to provide competitive bidding, or specify a single brand, the person responsible for the recommendation shall be required to justify the necessity for the specification in writing, and the request shall be approved by the President or his designee.
K. Purchases for Resale in Auxiliary Enterprises
Purchase of items for resale shall be made as follows:
1. Textbooks and other course related materials may be purchased without adherence to Minimum Notice and Number of Bids Policy. All textbook ordering lists and authorization forms must be maintained for audit purposes.
2. Certain items for resale for which customers have expressed a preference and/or promotional items procured under accepted retail merchandising practices may be purchased without adherence to Minimum Notice and Number of Bids Policy. Appropriate documentation shall be maintained which supports the action taken.
L. Purchases for Libraries, Excluding Materials and Supplies Identified for Consumption by the Library
Purchases of materials for additions to a library collection include cost of books, catalogs, periodicals, binding, audio-visual media, and other general publications. These items are capital expenditures. These purchases may be made without formal bids or quotations, and appropriate documentation shall be maintained on these purchases to support sole source procurement. However, the President may at his discretion require which items to be bidded, if in the best interest of the University.
M. Data Processing and Related Equipment Purchases
All computer hardware and related equipment exceeding $5,000.00 must be approved by the Chancellor, or his designee, upon recommendation from the President of the University. No purchase will take place until after final approval is obtained.
To assist the President in his decision and recommendations to the Chancellor the University Computer Resources Committee will review and make appropriate recommendations on all data processing equipment and forward same to the President for his approval or disapproval. If the Committee's recommendations are accepted, a letter is initiated for the President's signature and forwarded to the Tennessee Board of Regents for the Chancellor's consideration and/or approval. Departments contemplating purchasing data processing equipment are encouraged to contact the University Computer Resources Committee for assistance.
1. Acquisition of Computer System
Acquisition of computer systems involving the purchase of hardware with the development of application software shall be made in accordance with TBR Guideline B-030, Acquisition of Data Processing Equipment / Software / Services, and Guideline B-035, Procedures for Multi-Step Sealed Bidding.
2. Multi-Step Sealed Bids
a. In the Invitation to Bid, the Purchasing Department shall provide the bidder with information describing the functional requirements of the system, purpose of the procurement, technical requirements, bidder qualifications, and any other information considered relevant to the goods and services being acquired.
b. The bidder shall submit a technical offer sufficient in detail so as to constitute the technical specifications of the purchase.
c. As specified in the invitation to bid, all technical offers must be received by the institution at the designated time and will be opened in the same manner as a competitive sealed bid. Technical offers shall not be made public until the inspection period following evaluation of the bids submitted with prices.
d. Acceptability of technical offers shall be determined by an evaluation team appointed by the President, or his designee. All technical offers will be evaluated based on the criteria of the invitation to bid and other information learned during the technical evaluation process. All vendors whose technical offers are deemed acceptable will be invited to participate in a confidential discussion of unpriced technical offers. Offers not deemed acceptable will not proceed to the pricing phase.
e. Bid Price. At the conclusion of the evaluation phase of the multi-step sealed bidding process, bidders will be required to submit a bid price clearly defining the cost of their technical offer in accordance with the invitation to bid.
f. Award. Each contract shall be awarded to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation to bid.
3. Competitive Negotiation
A contract may be entered into by competitive negotiation only in cases when the institution is unable to obtain needed goods and/or services by the competitive bid process. The President shall prescribe the procedures under which negotiation is to be conducted. These procedures shall provide for the safeguarding of the information and provide fairness to the vendor in the negotiation process. In the event it appears the competitive negotiation process is to be implemented, such an action must be approved by the President. Once the negotiations have been concluded, a recommendation shall be made by the negotiating team to the President, and he shall approve the results prior to entering into a contract.
N. Prohibited Transactions
Personal
1. The purchase of such item as: briefcases, personal name cards, personal subscriptions to magazines, trade journals, leather portfolios, desk pen sets other than a line similar to Esterbrook or in the same price range.
2. Coffee-brewing devices, desk clocks, desktops of plate glass, nameplates, microwave ovens, and desk or office plates is prohibited (unless in the considered judgement of the appropriate Vice President with subsequent approval of the Vice President for Business and Finance when proper written justification is submitted).
3. Ornamental items such as pictures, vases, pillows, planters, ornamental plants, are all prohibited.
4. Radios for automobiles, except for the chief administrator of the Safety and Security purposes, rugs, carpets, and draperies for offices (unless approved by the Vice President for Business and Finance).
5. Slide rules for personal use (no purchase with University funds will be made of a type customarily used and owned by students and professional employees doing like work).
These and other items are not provided by University funds, and are considered personal items. Any individual who wishes to have such items in his/her office shall procure them personally. University letterheads shall not be used for ordering personal items to be paid for by the individual. When letterheads are used, the vendor will very often bill the University rather than the individual, resulting in time consuming and expensive correspondence.
O. Disposal or Surplus Personal Property
Surplus property is personal property that has been determined obsolete, outmoded, unusable or no longer usable by the University, or property for which future needs do not justify the cost of maintenance and/or storage. University policy prohibits the purchase of surplus property by bid or otherwise by any employee of the University. Disposal of such property shall be in accordance with TBR Policy No. 4:02:20:00, Disposal of Surplus Property.
P. Government/State Surplus Property
Acquisition of federal and state surplus property is available through appropriate channels. All inquiries shall be routed through Purchasing. The Director will work with the department in obtaining surplus property. Permission to dispose of government/state surplus property will be submitted to the Director of Purchasing for subsequent approval by the President.
Q. Property Loss and Theft
Property discovered as being lost or stolen shall be reported immediately by the person having first knowledge of the loss or theft to the Office of Safety and Security for appropriate action. The item description, including serial number, University tag number, date of loss/theft and prevailing circumstances surrounding the loss/theft will be verbally provided to Safety and Security upon reporting such incident.
R. Reports
A report detailing purchases made where the low bid was not accepted and where items were purchased on a proprietary basis shall be transmitted to the Vice Chancellor for Business and Finance on a quarterly basis (January-March, April-June, July-September, October-December). Other reports will be provided upon request.
S. Purchasing Records
All records of purchases are open and accessible to the public during the regular operating hours of the Purchasing Office. Request for inspection of records must be reasonable, contain sufficient information for retrieval. and must not interfere with the orderly operation. Vendors application form, which include financial disclosure information, or the identity of prospective vendors prior to bid opening, where such disclosure might negate the competitive bid process, are not open to the public. Records are available for reviewing after the evaluation and prior to the award. (Minimum General Bid Condition No. 18). A Vendor Bid Review Record will be made for each visit. Vendors are encouraged to attend bid openings on the day and at the time specified in the Invitation to Bid.
T. Contracts and Agreements
All contracts and agreements will be in conformance with TBR Guideline G-030, Contracts and Agreements.
1. All agreements and contracts involving or related to the purchase or lease of real property or data processing equipment, the purchases related to capital outlay projects, shall be expressly subject to the approval of the Chancellor.
2. No agreement of any nature which requires the expenditure of funds shall extend beyond the end of fiscal year in which it is entered into unless expressly subject to the condition that the University shall have the right to terminate the agreement at the end of any fiscal year in the event that sufficient funds are not appropriated by the General Assembly and/or budgeted for continuation of the agreement.
3. No agreement of any nature shall be entered into which:
a. Provide for the indemnify or hold harmless any other party.
b. Provide for the payment of taxes of any nature.
c. Provide for the payment of interest, late charges, or penalties of any nature.
d. Contain any provision concerning default, commencement of any legal proceedings, or payment of attorney's fees.
e. Provides for prepayment for any goods or services, except for books and publication, conferences, and necessary in the ordinary course of business, provided the amount does not exceed $1,000: unless the agreement is expressly subject to the approval of the Chancellor.
4. All agreements, contracts and subcontracts shall contain all necessary nondiscrimination requirements provided by Federal or State laws and regulations.
5. Contract Limitations. No contract for purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase. No contract shall be entered into in addition to the contract resulting from acceptance of a bid and issuance of a purchase order except pursuant to TBR Policy No. 1:03:02:10, Approval of Agreements.
U. Utility Contracts
The University shall purchase or contract for all telephone, telegraph, electric light, gas, power, postal and other services for which a rate for the use thereof has been established by a public authority in such manner as the Commissioner deems to be in the best interest of the State of Tennessee. Each such purchase or contract shall be made on a competitive basis, whenever possible, in accordance with the TBR Purchasing Policy, unless it has been determined that such purchase is single source, if such purchase has been determined to be single source, the purchase shall then be made pursuant to Paragraph K, Sole Source and Proprietary Purchases.
V. Purchase Requisition
The purchase requisition is the source document for initiating all transactions for goods, supplies and services within the University. Information required on the purchase requisition shall be completed by the requisitioner, and must have budget approval and funds available prior to any expenditure.
W. Alcohol, Drugs, and Hazardous Merchandise
Federal and state laws govern the purchase, control. and use of narcotic and dangerous drugs. In order to insure that such materials are ordered, shipped, and subsequently stored, safe guarded and used in accordance with government regulations and codes, applicable regulations shall be followed.
X. Exceptions
Any exceptions to the policies and procedures established herein including subsequent revisions shall be approved by the Chancellor or his designee.
TENNESSEE BOARD OF REGENTS (TBR)
POLICIES AND GUIDELINES APPLICABLE TO THIS MANUAL
•Policy No. 1:03:02:10 Approval of Agreements
•Policy No. 4:01:04:00 Solicitation and Acceptance of Gifts
•Policy No. 4:02:10:00 Purchasing Policies and Procedures
•Policy No. 4:02:20:00 Disposal of Surplus Personal Property
•Guideline No. B-030 Acquisition of Data Processing/Equipment Software/Services
•Guideline No. B-035 Procedures for Multi-Step Sealed Bidding
•Guideline No. 0-030 Execution of Contracts
GENERAL OVERVIEW
This section constitutes what might be described as the "nuts and bolts" of procurement procedures and requirements for the University.
Whenever possible, the various steps in making a purchase have been arranged for use as instructions and as a reference guide for use in all procurement activities. Since many requirements described only once are valid for more than one procedure, a working knowledge of the entire Manual is required before use as a reference.
A. Vendors Mailing List
No person, firm, or corporation shall be deemed or considered to be a qualified bidder unless such firm has completed and filed a Bidders Application with the University Purchasing Department, and received subsequent approval. All such applications by prospective bidders shall contain a verified statement disclosing types and classes of materials, supplies, equipment, and services offered. From the listing of qualified bidders, the Purchasing Department may use a selective system in choosing bidders to who bid invitations will be sent, taking into consideration the geographical location, and items each bidder has established his ability to furnish.
B. Selection of Vendors
Potential vendors are selected for their ability to serve the need of the University in the most economical and efficient manner possible on a continuing basis. Past performance of vendors and cooperation with Tennessee State University are important factors in vendor selection. It is impossible for the University to purchase efficiently from all available sources in many lines. The buying power of the University must be concentrated as much as possible with selected vendors to attain the maximum advantages of price and service. Many vendors have secured important shares of University business on the basis of negotiated contracts, price, and exceptional service demonstrated repeatedly over long periods of time. Such well-qualified suppliers are important assets to the University.
C. Changes of Suggested Vendors (Purchase Requisitions)
The Purchasing Department may delete an item listed on the requisition and buy from another source to take advantage of special circumstances or of an existing State of Tennessee Term Contract (SWC). Of course, the order may also be shifted entirely to another supplier who will provide better prices, service, or delivery. The standard of quality will not be changed, except in necessary cases and with consultation between the buyer and the department requisitioning the item. For these and other reasons, no commitments, expressed or implied, should be made by University departments.
A department may request an opportunity to review the bids before an order is placed. If this is desired, it should be so stated on the requisition.
D. Supply Sources for Unusual Items
Departments are encouraged to suggest sources of supply with complete address, particularly for unusual or non-standardized items. Authority for the final selection of the vendor; however, shall be left to the Purchasing Department buying staff which is charged with the overall responsibility of developing and contracting with the best sources of supplies for the University. The Purchasing Department will follow a department's recommendations as much as possible, so long as it does not violate Purchasing policies and procedures.
E. Previous History for Commodities
Unusual items specified on a requisition have been purchased before and an adequate history of the product, potential vendors, and the service capabilities and product availability is on hand in the records of the Purchasing Department, or can be readily developed or updated. This is one of the advantages of specialization and centralization.
F. Pool or Cooperative Buying
The University will participate in cooperative or pool buying when it is judged to be advantageous. Examples are:
1. Annual bid for scientific equipment and supplies.
2. Annual contract for stock forms and paper.
3. Annual contract for automobiles, etc.
4. Contracts with Educational and Institutional Cooperative Services, Inc.
5. Master contracts by the Tennessee Board of Regents.
G. Establishment of Current Prices
Members of the Purchasing Department buying staff remain aware of current prices through study of published price lists, price information available from salesmen, or published market data; and if the price cannot be determined from such sources, the proper price is established through negotiation or competitive bid.
H. Price as a Function of Value
The Director of Purchasing may examine prices quoted by several different suppliers to determine which price, in combination with the necessary quality features of the product and the service aspects of the relationship with the supplier, will afford the University the greater overall value.
I. Factors in Selection of Major Equipment
The selection of major equipment shall be based on considerations of economy in operation, productivity, compatibility, quality, dependability, savings in time or labor costs, and durability, so that the net result will be increased efficiently at the lowest net cost.
NOTE: Prior to submitting a requisition for the purchase of an instrument or item of equipment, the requesting department should ascertain whether power requirements or other utilities are available. These should be specified on the requisition. Space requirements and floor loading should also be checked where applicable. The Director of the Physical Plant should be contacted if assistance is needed.
J. Equipment Maintenance
Certain items of equipment to the maximum extent practical, will be covered by service contracts in order to assure continuing efficient operation. Maintenance of general-use equipment such as electric typewriters, electronic typewriters, dictating equipment, calculating machines and duplicating equipment fall in this category. For this type of equipment, service can be obtained by calling the Purchasing Department. Other equipment such as electronic microscopes, ultra centrifuges, and other highly specialized scientific equipment also should be maintained under service contracts. Departments shall submit a requisition for annual contracts to the Purchasing Department.
K. Standardization of Common-Use Items
Items in common-use shall be standardized as much as possible in order to gain the value of maximum quantity discounts, to lessen the variety of items carried in stock in various departments, and to eliminate numerous small orders at retail prices and expensive processing costs.
L. Determination of Quality Specifications
The buyer shall make purchases on the basis of specifications, either on file or furnished by members of the faculty and staff. The determination of a desirable quality to accomplish necessary results will be a joint decision between the using agent, department chairman, and Director of Purchasing. (Example: Many vendors make alternate proposals that afford the University a better value by either meeting or exceeding the specifications.)
M. Revision of Order Quantities
The Purchasing Department shall check purchase requests against the need and may revise quantities or quality in accordance with the University's purchasing policy and good business practices; the fundamental responsibility of the buyer is to fill the need, not necessarily to make a purchase exactly as requested. Significant deviations will be discussed with the user and pertinent factors cooperatively considered. Be specific as to quantities. Do not write "1 box", but rather "1 box (100 per box)".
N. Economical Order Quantities
When an order is placed, the quantity shall be that which results in the lowest total cost to the University, including the cost of carrying the merchandise in stock as well as its procurement costs. For this reason, a requisition is not considered a directive to purchase a given quantity.
O. Consolidation of Purchases
Purchases of similar items or items from common sources shall be consolidated for purchasing wherever possible, in order to gain maximum quality discounts and best vendor service. Delivery schedules and costs should be kept in mind.
P. Repetitive Orders
Small repetitive orders should be increased in quantity and decreased in frequency so that suppliers are not continually asked to handle transactions which are unprofitable. Order in larger quantities also reduces costs to the University caused by the negotiating and placing of orders, paper work processing, and issuance of checks.
Q. Price Inquiry by Departments
Individual departments may, for their own information, may wish to secure "inquiry" price quotations on items they are considering to purchase. It should be understood; however, that these price quotations, regardless of their source, may not be acceptable to the Purchasing Department for actual use at the time of purchase due to time lapse, quantity changes, or inadequate information. Be sure to allow sufficient time for the Purchasing Department to obtain prices, place the order, and receive shipment.
R. Split Purchases
No purchase shall be divided in amounts for the purpose of bringing it within certain dollar or time limits relative to required bidding periods. Failure to combine orders when this logically should be done in the interest of economy is circumventing the University policy on combined purchases and, therefore will not be approved (i.e. purchase requisitions containing identical account number, object code and vendor). Whenever this occurs, the Director of Purchasing will return the purchase requisition to the requisitioner.
S. Bid Bond or Check
1. Bid bond or check may be required in Invitation to Bid. If the invitation to bid so specifies, a bidder must file with the Purchasing Department a "bid bond", certified check, cashiers check, or bank draft in the amount of and in the form specified in the invitation. The bid will not be considered unless this provision is met.
2. Surety required. In addition to signing the bid bond as principal, the bidder must have the bond signed by a surety company authorized to do business in the State of Tennessee. If the surety on a bond has its authority to do business in the State of Tennessee revoked, or if for any reason ceases to do business in the state, the bidder must promptly obtain another surety on the bond.
3. Condition of the bond. The bond must be conditioned on full performance and all obligations imposed on the bidder in this Manual, by submission of a bid including the obligation to keep the price firm for as long a period as specified in the bid, and the obligation to file a performance bond when required if awarded a contract. The bid bond shall provide that upon the bidder's failure to perform any of such obligations, the University may recover from the bidder and/or surety company any and all damages suffered because of such failure.
4. Deposit Agreement. If the bidder elects to deposit a certified check, cashier's check, or bank draft, it will be security for full performance of all obligations referred to above in this section. If the bidder fails to perform any one or more of such obligations referred to above, the Vice President for Business and Finance may endorse the check and retain as much of the proceeds as is necessary to compensate the University, for any and all damages suffered because of such failure.
5. Return of Check. If a bidder is not the successful bidder, the certified check, cashier's check, or bank draft will be returned to that Bidder promptly after the award is made. The check of the successful bidder shall be returned after the contract is awarded or as soon as such Bidder has filed a bid bond, if one is required.
T. Performance Bond
A successful bidder may be required to file a "performance bond" in a designated amount, whenever it appears to be in the best interest of the University to do so.
A complete written record on all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.
U. Evaluation and Award
The basic intent of the evaluation in each instance shall be to determine the lowest qualified bidder meeting the conditions and specifications. When this determination is made no more factors or considerations can be demanded and no fewer accepted than those imposed by the complete invitation to bid.
Awards will be made to the bidder whose bid meets all specifications and other requirements of the invitation to bid and is the lowest and most responsible of all bidders to include, but not be limited to, the following:
1. Cash discounts will be considered in making an award of bids.
2. Unit Price Controlling. In case of a mistake in the extension of a price, the unit price shall govern.
3. Awards of Any or All Items. An award may be made to the lowest aggregate bidder for all items on invitation, on a group or an individual basis, whichever is found to be in the best interest of the University.
4. All bids are subject to rejection by the University, and in those instances where evaluation dictates the rejection of the lowest bid as not meeting the standards established in the invitation, a complete factual statement shall be recorded on the bid summary sheet as a part of the permanent records to show the reason for rejection, become a matter of public record, and remain open to public inspection.
5. After bids have been evaluated and the successful bidder has been determined, the Director of Purchasing shall issue a written purchase order to the vendor.
6. Vendors attending a bid opening will be required to sign the Bidders Attendance and Registration Form.
V. Samples
1. A sample may be requested on any item bidded to be submitted either at the time the bid is submitted or prior to award. Usually, the invitation will specify whether or not samples will be required. Each sample must be labeled clearly with the vendor's name, address, commodity classifications, brand and model, and bid invitation number. All samples submitted must be representative of the commodities or equipment which shall be delivered if a contract is awarded. Samples submitted by successful bidders shall be retained for use in comparing items delivered under the contract.
2. Transportation Charges. No samples will be accepted by the Purchasing Department unless transportation charges, including cartage, have been prepaid. Samples received from bidders who are not successful shall be returned upon written request and payment of all shipping costs by the bidder.
W. Change Order
The change order form will be used to alter or cancel a purchase order. The University may make changes in quantities, drawings, specifications, and time for performance of the order. An equitable adjustment in the price or delivery or both shall be made.
1. Cancellation. When a purchase order is issued by the Purchasing Department, it has certain legal ramifications and cannot be cancelled without proper cause. Therefore, in circumstances where a department feels that a purchase order should be cancelled, the department head should contact the Director of Purchasing to discuss the matter and receive instructions relative to what action should be taken, if any on the order under consideration.
If it is determined that a order should be cancelled, the department head will be asked to send a written memo to the Director of Purchasing requesting that a change order be issued to cancel the purchase order. A copy of the cancellation request should be provided the Budget Office or Grants Administration, depending upon whether restricted or unrestricted funds are involved.
The following information must be included in the memo when requesting cancellations:
a. Name of the department initiating the cancellation report.
b. Budget account number.
c. Requisition number.
d. Purchase order number.
e. Name of vendor.
f. The total dollar amount of the order.
g. If only an item or several items are to be cancelled, then the item number and total price for the particular item or items, as well as the information in items a through f above must also be included in the request.
2. Change Orders are not needed in order to make payment as follows (specific examples):
a. A quantity variance of less than ten percent (10%) on an individual purchase order (usually associated with printed material, bulk shipments, i.e., coal, feed, rock, etc.).
b. Incorrect extensions - unit price shall prevail.
c. A vendor's inability to ship an item on a purchase order resulting in a decrease in the total amount of the purchase order.
d. Authorized freight charges (debit voucher payment).
All of these conditions can be corrected without requesting a purchase order change by liquidating the entire amount on the purchase order at the time the disbursement voucher is written, and expending the correct amount.
X. Emergency Purchases
Purchases of specific materials, supplies, equipment, or services may be made in the open market without competitive bidding for immediate delivery only to meet bona fide emergencies arising from any unforeseen cause. All emergency purchases shall, if practicable, be made on the basis of competitive bids.
1. Emergency conditions are described as those needs arising from any unforeseen cause including, but not limited to, delays by contractors, delays in transportation, unanticipated volume of work, and acts of God.
NOTE: So called emergency needs that arise due to poor planning do not fall in the above categories, and are normally not considered.
2. ALL BONAFIDE EMERGENCY PURCHASES MUST BE APPROVED BY THE PRESIDENT OR HIS DESIGNEE and a written report on the circumstances of any such emergency justifying the purchase shall be prepared and maintained by the University's Purchasing Department.
Y. Complaint to Vendor
Initial complaints should be made as soon as possible and copies should be distributed as noted on the complaint form. The copies are designed to inform all concerned of any action or lack of action as soon as possible, and with minimum effort.
The complaint form should be used to report all instances where the vendor fails to perform in accordance with the purchase order. This includes failure to perform by the date specified or within a reasonable length of time, and any unacceptable difference between the receiving copy of the purchase order and the merchandise received. The receiving copy of the purchase order should always be available and used in receiving merchandise or services.
Items with unacceptable differences that are visible should be refused, returned, and reported as returned with a full explanation of the reason for the return. Performance that is below that which can be reasonably expected or hidden damages should be reported immediately upon discovery. All complaints should be accurate and specific.
SHIPPING AND RECEIVING
When any supplies, equipment, or materials are received by the University, the receiving agent thereof shall make a written certification that the supplies, equipment, or materials received were equal in quality and quantity to those requisitioned
A. Receiving Reports
All shipments will be delivered to the University's Central Receiving Facility unless otherwise approved in writing by the Director of Purchasing. When items are to be picked up from the vendor, it will be so noted on the purchase order.
A receiving report will be prepared promptly on each shipment of supplies, materials, or equipment received in the University. All information on the receiving report shall be completed and appropriate signatures obtained when delivered to departments and prior to forwarding to Accounts Payable. The receiving report is an important document and its accuracy is indispensable. Complete records on all receiving reports shall be maintained and filed in numerical order in order to provide for a clear audit trail on the receipt of all purchases.
B. Orders Past Delivery Date
Follow-up action shall be initiated on purchase orders that have not been received after the specified delivery date on the purchase order. This action shall be taken ten (10) days after the delivery date and made a part of the file.
C. Partial Filled Orders/Shipments
Orders received that have been only partially filled on the date of delivery and the vendor failed to indicate delivery date of remaining order; follow-up action will be promptly taken to notify vendor. When partial shipments are received, each will be regarded as a separate delivery.
D. Duplicate Orders/Shipments
Duplicate shipments or unauthorized substitutions made by the vendor will be returned with shipping costs borne by the vendor. Cost for duplicate shipments errors made by the department will be borne by the department. In all instances, a re-shipping authorization number will be requested from the vendor. Appropriate documentation shall be maintained on all transactions.
E. Unidentified Shipments/Orders
A shipment received at the Central Receiving Facility from a vendor that cannot be identified will be returned to the vendor only after follow-up action has been taken. All shipping costs will be borne by the vendor if shipment has to be returned.
F. Damage Claims
All carriers recognize their liability for two (2) types of damages - apparent and concealed damages. Prompt examination of the shipment by Central Receiving will reveal the apparent damaged order. Where there is evidence of damage, the package or packages shall be opened immediately, permitting a joint inspection or examination of content by the carrier's representative and Central Receiving.
An inspection report listing all details of the physical damage and/or shortages will be placed in writing and signed by Central Receiving and the carrier representative.
A claim will be submitted to the carrier with necessary documentation to support claim.
Claims must be supported by:
1. Original bill of lading.
2. Original paid freight bill (bond of indemnity may be acceptable where either of the above documents have been lost or misplaced).
3. Original invoice or certified copy of or extract from the original invoice.
4. Copy of carrier's document pertaining to the particular shipment involved, whereon carrier has acknowledged loss and/or damage over carrier's signature.
5. Inspector's report (concealed loss or damage claim).
6. Consignee form (concealed loss or damage claim).
7. Shipper's form (concealed loss or damage claim).
8. Repair invoice (when consignee repairs damage).
G. Inspecting and Checking of Items Received by Departments
The system of inspecting and testing shall be used to insure that the University is receiving the quantity and quality of goods for which it has negotiated. The department receiving the merchandise is responsible for promptly unpacking and carefully inspecting shipments. Any discrepancies or shortages shall be reported promptly, in writing, to the Purchasing Department referring to the purchase order number and vendor, and attaching all pertinent papers. The Purchasing Department will work out the problems involved to protect the University's interest and to complete the transaction.
H. Order(s) Picked Up from Vendor
Orders picked up from vendors without prior written approval is in violation of University purchasing policies and procedures. Written approval will be placed on each duly authorized purchase order and must be placed on the purchase requisition when initiated by the department.
I. Delivery to Department
Central Receiving will make deliveries to departments daily during regular work hours Monday - Friday between the hours of 8:00 a.m. - 12:00 p.m. and 1:00 p.m. - 4:00 p.m. When deliveries are made and no one is available in the department to receive the order, the Receiving Report will be annotated to show that an attempt was made to deliver the order.
J. Return of Supplies or Equipment
Supplies or equipment returned to suppliers or manufacturers for adjustment or credit must be cleared through the Purchasing Department. Credit memos received that cannot be identified with returns will receive disposition at the discretion of the Finance and Accounting Office.
PAYMENT OF INVOICES
Disbursement of all University managed funds shall be accomplished by the following methods:
•Approved debit voucher payment
•Duly authorized purchase order
A. Invoices
All invoices shall be forwarded to Accounts Payable to the address shown on the bottom of the purchase order. Original invoices mailed to departments by vendors are required to be forwarded to Accounts Payable upon the date of receipt. Departments shall not communicate with vendor to have invoice(s) forwarded to them, which is a violation of University Policy. Invoices shall be paid within forty-five (45) days of receipt and must show as a minimum, the following:
•Vendor name and address
•Purchase order number
•Item description and number
•Quantity, unit, unit price and extension for each item discount, if applicable.
NOTE: Invoices are to be paid within 45 days of receipt of invoice.
B. Documents Required for Payment
The following documents are required to support payment:
•Duly authorized purchase order
•Receiving report
•Invoice
C. Prepayment
Occasionally, it becomes necessary to make advance payment for items. This is always true for U.S. Government documents from the Superintendent of Documents and for certain other items, usually of small value. In such cases, be sure of the accurate and complete description of the item required, its price, catalog number, and the exact name and address of the supplier. When ordering U.S. Government publications, obtain and complete an order form and attach to purchase requisition. Order forms can be obtained from Purchasing. Also, attach to the requisition any supporting documentation such as advertisement, letters from the vendor, proforma invoices, etc. Prepayment will only be made for goods and services upon receipt of prior written approval and before issuing the purchase order.
D. Partial Payments
In accordance with the terms of the purchase order for which partial payment is required a continuation form will be used for the articles or services received in part.
E. Special Disbursement
Disbursement for the following types of transactions require payment to be made within the prescribed time since the purchase was not encumbered prior to the obligation being made:
•Debit voucher payment
•"Emergency" purchase order
NOTE: All of the above requests for payment must be supported by invoice and/or a receipt.
F. Processing Payments (authorized purchase order)
•Purchase orders upon receipt are placed in suspense file.
•Verification by the receiving report and/or an invoice approved, if services are involved.
•Invoices are matched with the purchase order.
•Payment voucher listing and approval sheet prepared, coded, a batch number and forwarded to the Computer Center.
•Batch sheet voucher listing is keypunched and a first run printout is prepared for edit by the Accounts Payable Section. Corrections are made, if any.
•Checks are reviewed for correctness. If approved, authorized signature is placed on checks and mailed to vendors. If final payment is being made, documents are stamped processed and placed in permanent paid files, for payment and assigned.
GIFTS AND DONATIONS
A. Purpose
The purpose of this policy is to provide guidance to all employees engaged in the acceptance of gifts and/or donations on behalf of the University, regardless of source or a specific use by a designated department.
B. Authority
The Director of Development is responsible for coordination and acceptance of all gifts (personal property and cash) to the University. This includes but not limited to equipment of any kind, vehicles, machinery computer equipment, etc. shall be processed without exception, through the Office of Development.
The Office of Development will therefore be advised immediately upon learning of the probability of an offer of a gift or donation. After securing all appropriate information, a written recommendation shall be submitted to the President who will make the final decision on acceptance of the proposed gift or donation.
C. Gifts Other Than Cash
For all gifts other than cash, departments or activities which reports to the Office of the Vice President for Academic Affairs shall submit the above information to the Vice President for Academic Affairs for his/her consideration and recommendation to the Director of Development. All other departments and activities shall submit the above information to the Vice President for Business and Finance for consideration and recommendation to the Director of Development. Cash donations with significant restrictions on use (other than contributions to establish restricted accounts) shall also be reviewed in the same manner as non-cash gifts.
D. Department Actions
Any person who gains knowledge of the probability of the offer of a gift or donation to the University shall advise his department or activity head. The department or activity head shall secure the following listed information (if applicable) concerning the potential gift/donation.
1. Identification of the item(s) and donor.
2. Estimate of the value of the item(s) - preferably based on the judgment of the department head or other responsible department official. This statement is for internal use only and cannot be considered official for donor's tax purposes.
NOTE: Professional appraisals of value of non-cash items (for tax purposes) will normally be the responsibility of the donor; however, other arrangements may be made at the discretion of the Director of Development.
3. Restrictions on use of the gift.
4. Recommendation as to acceptance.
5. Statement as to the University's need for the item(s), if non-cash.
6. Statement as to the condition of the item(s).
7. Statement as to the availability of space for use of the item(s).
8. Details on any liabilities associated with the gift, i.e., mortgages or liens.
9. Estimate of cost renovation, if necessary, to make the gift usable.
10. Estimate of the annual maintenance cost and other ongoing expenses, if accepted.
11. Estimate of cost of delivery and/or installation.
12. Estimate of all other costs that might be incurred by acceptance of the item(s).
E. Office of Development Actions
A complete record of all gifts and donations to the University will be maintained in the Office of Development.
Proper acknowledgement of all gifts and donations will be made by the Director of Development. He will also insure that all letters and publicity concerning gifts and donations are appropriately coordinated prior to release.
Upon receipt of an offer of a gift/donation, the required information concerning the item(s) and recommendation from the appropriate Vice President, the Director of Development will accomplish the following:
1. Review thoroughly the information submitted by the department/activity head.
2. Secure the approval of the President.
3. Review the gift/donation proposal with the prospective donor, and advise the donor of the non-acceptance and the reasons therefore: or the terms and conditions under which the gift/donation will be accepted.
4. Advise the concerned department of the decision to accept or not accept the gift or donation.
5. Coordinate the transfer of ownership and physical possession of the item(s) with the donor and the appropriate University department officials; including necessary steps to have the item(s) placed on the current inventory.
6. Advise the offices of the following listed officials of the acceptance of the gift or donation. Non-cash items shall be fully described and the terms and conditions under which the acceptance was made shall be included:
Vice President for Business and Finance
Director of Purchasing
Other departments or activity heads who may be concerned.
F. Purchasing Department Actions
Once the above process is completed, the President will forward a form letter stating that this gift has been accepted and entered into the Property Inventory at the specific value stated in the President's letter.
Upon receipt of the approved forms from the President's Office, a copy will be furnished the University Property Officer. The Property Officer will:
1. Review the documentation for accuracy.
2. Determine if the item and value meet the requirements for inventory purposes.
3. In the event the item meets the criteria for inclusion in the property inventory, make arrangements with the department receiving the property to tag item(s).
4. Prepare the necessary paperwork to include the item(s) on the department's property inventory.
5. Complete and submit property inventory sheets to Finance and Accounting.
G. Real Property and Testamentary Gifts
The Office of the Vice President for Business and Finance shall be responsible for the coordination and acceptance of all donations and gifts or real property and testamentary bequests and devices in coordination with the Office of Development. The same information shall be secured for these type donations or gifts as outlined herein.
H. Tennessee Board of Regents Approval
The Office of the Vice President for Business and Finance shall be responsible for securing the approval of the Tennessee Board of Regents, where appropriate.
MISCELLANEOUS PURCHASING MATTERS
A. Sales Tax Exemption
Supplies, equipment and services purchased by the University, or goods or services acquired for resale are tax exempt, and taxes shall not be paid. A Tax Exemption Certificate will be issued in the name of the vendor providing the services. All tax exemption certificates will be issued and signed by the Director of Purchasing and mailed rather than be given to the individual requesting the certificate.
B. Loan of Equipment
The loan of equipment to outside agencies, organization, and other educational institutions must have prior written approval by the President or his designee.
C. Removal of Equipment/Property From University Premises for Personal Use
The removal of equipment and/or movable property from University premises is prohibited unless prior written approval is obtained from the Vice President for Business and Finance. Persons, who do not have such written request in their possession when removing University equipment/property from the premises, may be subject to a charge of property misappropriation.
D. Minority and Small Businesses
The University welcomes and encourages minority and small businesses to participate in the competitive bidding process of providing goods, services, supplies and equipment needed by the various departments within the University, whenever possible.
Each prospective minority and small business is required to file a vendor application to be placed on the vendor's list. Regular visitation to the University to check the bidder bulletin board, a means by which procurement information can be readily obtained, is encouraged. Tennessee Board of Regents including state laws governing procurement activities will be adhered to regardless of business
E. Removal/Suspension from Vendors List
A vendor may be removed from the vendor’s list on a temporary or permanent basis for a specified period depending upon the gravity of the violation.
Failure to respond to the first three (3) consecutive mailed Invitations to Bid (ITB) or Request for Quotation on a particular qualified vendor list will result in removal from that list and examination of the response on other lists. Failure to respond to fifty percent (50%) of all ITBs or RFQs on all lists may result in removal from all Qualified Vendor Lists. Reported failures to comply with bid awards and orders shall become a part of the vendor’s application file.
Examples of failure to comply include but are not limited to:
- Over shipments
- Under shipments
- Late shipments
- Failure to ship
- Damage products
- Defective products
- Shipments not in conformance with specifications
- Unauthorized substitutions
- Billing error
- Service deficiencies
- Failure to respond to complaints
- Failure to deliver to University Central Receiving unless written exception is placed on the purchase order
- Failure to forward invoice to Accounts Payable as required on the purchase order
- Early shipments
- Unethical practices
- Misrepresentation of merchandise
- Sell and/or release of goods, equipment and/or supplies to any University employee without a duly authorize purchase order or proper authorization. Note: Release to an employee because he/she is a University employee is NOT acceptable. Violation becomes a matter of personal financial obligation between the vendor and the person(s) making the purchase.
- Placing equipment on campus on a trial basis without proper authorization from the President or Director of Purchasing
- Failure to comply with the terms and conditions of the bid/quotation requirements
- Failure to obtain a Notice to Proceed Form when awarded a contract for construction or other similar work
- Consistent failures and/or an unreasonable length of time required for correcting noted deficiencies
- Unprofessional conduct while on campus
- Misrepresentation of merchandise
- Conviction or plea of guilty or no contest to crimes involving fraud or restraint of trade with respect to public contracts
- Failure to comply with any University purchasing policy
Failure of a vendor to perform satisfactorily in any of the above areas may also result in vendor’s liability for damages to the University.
F. Buyer
A buyer will act exclusively as an agent of the Director of Purchasing for procurement and other purchasing matters. As such, will be designated in writing to sign and authenticate purchase orders for the Director. All buyers will adhere to and follow ethical practices in all relationships when dealing with vendors, and become thoroughly familiar with ethical guidelines.
G. Procedure for Bond Fund Projects
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All requisitions for capital outlay expenditures exluding change orders and confirmations are prepared and initiated by the Director of Campus Planning and/or Director of Facilities Management.
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Authorized signatures are obtained including verification of funds by the Budget Officer and forwarded to the University Purchasing Department after all required approvals have been outlined.
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Specifications and related documents, if any are audited and/or corrected, if necessary. When required, the University’s Purchasing Department solicits bids, and evaluates prior to being submitted to the Tennessee Board of Regents. Subsequently, the Tennessee Board of Regents’ requisition is prepared by the University and forwarded to the Board’s Office of Facilities approval, i.e. Chancellor, Vice Chancellor for Facilities Management, Office of the State Architect, and the Department of Finance and Administration.
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If recommendations are acceptable, a purchase order is issued by the Tennessee Board of Regents.
- Payment—Upon completion of the project and/or delivery of all items per approval of the requisition and purchase order, the payment voucher is prepared in the Accounts Payable section. If a final payment is being made, the paying copy of the purchase order shall be returned along with the final payment voucher to the Tennessee Board of Regents.
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Procurement