PROCUREMENTMETHODS OF PURCHASING

AND

COMMON MISTAKES & ERRORS

METHODS OF PURCHASING

Check Requests Purchasing Card (P-Card) Purchase Requests

CHECK REQUESTS

General Rule:

A check request is a “charge” commitment. Purchases under check requests are limited. Failure to follow procedure results in an “unauthorized purchase”. The person who made the purchase or who directed that it be made, may be personally liable to pay the cost and settle the matter with the supplier.

CHECK REQUESTSUNLIMITED DOLLAR AMOUNTS

Postage, postage meters Utility payments Payments for travel, registration fees Freight charges Memberships, dues, participation fees associated

with memberships and subscription charges stemming from membership

For other allowable areas see Procurement Procedures: Check Request

CHECK REQUESTSLIMITED TO TOTAL COST LESS THAN $5,000

Advertising Books and subscriptions – price support must

accompany check request Mailing lists and mailing services including collating,

packaging and sorting Repairs to equipment less than $5,000. Must involve

billable labor. Laboratory/Chemical Analysis

CHECK REQUESTSLIMITED TO TOTAL COST LESS THAN $5,000

Demurrage charges Consulting Services Personal Services

See Procurement Procedures: Check Requests for complete list

CONSULTING SERVICES

Definition – Services which involve the rendering of advice only

Under $5,000 can handle via check request $5,000 and over handle via purchase request Always use the standard consulting agreement – available

on administrative forms website www.busfin.uga.edu/forms Note: If a vendor is paid as a consultant, the vendor can

not bid on any resulting purchase Agreements should address fees for services and

reimbursable expenses separately. Object code for services is 75113 and reimbursable expenses are 75210

PERSONAL SERVICES

Personal Services may include training and instructional services, graphic design, etc.

Use the consulting services agreement until such time as a personal services agreement is available

Submit to Procurement with purchase request and sole source justification if $5,000 or above

CHECK REQUESTSCOMMON MISTAKES AND ERRORS

Purchase Construction Services Purchase Consulting Services of $5,000+ Purchase Printing Services Purchase Supplies – Non-inventoried

equipment Repairs that do not involve billable labor Purchase Software

CHECK REQUESTSCOMMON MISTAKES AND ERRORS

Services – confusion between unlimited and limited to $5,000

No WCD approval or failure to show WCD approval number on the check request when paying monthly services (WCD = Wireless Communication Device)

PURCHASING CARD

PURCHASING CARD

Known as P-Card It is a VISA card issued in an individual’s name. Obtain one by submitting P-Card Request Form

available at www.busfin.uga.edu/forms Must attend a mandatory training session $4,999 is maximum single transaction limit Can not purchase inventoried equipment Benefits:

– Vendors realize faster payment– End user realizes more timely delivery

PURCHASING CARDINVENTORIED EQUIPMENT

Any item which meets the following– Is basically nonconsumable and nonexpendable in nature; – Any item with an estimated usable life expectancy of 3 or more

years and an item acquisition cost of $3,000 or more; or,– Any item or items which the agency feels should be included in

personal property inventory even though it fails to meet the above criteria

The following are inventoried regardless of cost: Books procured through the Library Accounts, Firearms, Art Objects/Antiques, Vehicles

The following are inventoried if the unit cost is under $3,000 but $500

or over: Electronic office equipment, computer equipment, A/V equipment and photographic equipment

PURCHASING CARDCOMMON MISTAKES AND ERRORS

Purchase inventoried equipment – especially in the $500 arena of computers, audio visual and photographic

Split purchases Exceed the card’s single transaction limit Cardholder not addressing in detail in

WORKS – what was bought, quantity, unit price, and why it was purchased

Purchasing CardCOMMON MISTAKES AND ERRORS - Continued

Manager’s not requiring detailed information in WORKS and not reviewing the charge against the actual receipt/invoice

Sales tax being charged Purchasing statewide contract items from

non-statewide contract vendors. Improper reconciliation of hard copy monthly

statements

Purchasing CardCOMMON MISTAKES AND ERRORS - Continued

Memberships being purchased – allowable only via check request

Account in WORKS not being changed – especially important for conference and workshop expenses such as catering, food, etc.

Failure to change object code in WORKS

Purchasing Card Auditing

Internal Auditing completes approximately 30 audits each year

Currently, in addition to the above audits, they perform 10 audits strictly on the p-card function

Controller’s Division will be conducting compliance reviews of p-card transactions.

Purchasing Card Auditing

Items Reviewed by Internal Auditing– How is the p-card safeguarded?– Is the p-card being used by other than the

cardholder?– Is adequate department review performed?– Are hard copy documents being retained?– Is appropriate account number being charged?

Purchasing Card Auditing

Items included in the audit– Review transactions by vendor and dollar amount

– Review for questionable vendors that may indicate unauthorized use

Meals Travel expenses Inventoried Equipment Intra-University Charges

– Review for adequate documentation – both hard copy and WORKS

Purchasing Card Auditing

Items Included in Audit– Timely approval in WORKS– Timely cancellation of cards after employee

termination or transfer to another department

Consequences

PURCHASE REQUESTS

PURCHASE REQUESTSPARTS OF A PURCHASE REQUEST (1)

Date the request Include account numbers, object codes, and dollar

amounts. Recommended Vendor (at least one) Include a delivery date - specify mandatory if a certain

delivery date is required. List items – use a noun to describe the actual item, include

quantity, unit of issue, cost per unit, description of item (specifications), extended price (Unit cost X qty). Include freight charges if known.

Any priced line item on a quote should be a line item on the purchase request

PURCHASE REQUESTSPARTS OF A PURCHASE REQUEST (2)

Attachments – price support, quotes, drawings. Paperwork address – where Procurement should

send the department copy of the order Deliver to Address – specify if different than

paperwork address – this is where the vendor will deliver the service or item or where Central Receiving will re-deliver the items.

Point of contact and phone number

PURCHASE REQUESTS SPECIFICATIONS

Main Types: Fully competitive – generic – express minimum

needs without any unjustified bias toward a specific brand.

Brand Name or Equal – List one brand name and list the required minimum characteristics to determine equality.

Sole Brand – see discussion on following pages. Sole Source – see discussion on following pages.

PURCHASE REQUESTS SPECIFICATIONS - continued

Description of need – how and where items/services will be used.

Use a noun to describe the item/service Physical Requirements – Identify the measurable

physical, quality and functional characteristics common to several manufacturers. Include types/grades of material, size, weight, shape, quality, etc. If not competitively bidding or bidding on an “as equal” basis list catalog numbers, part numbers, and manufacturer name.

Installation Requirements Training Requirements Service/Warranty Requirements

PURCHASE REQUESTSSOLE SOURCE/SOLE BRAND

Only applies to purchases $5,000 or greater which are not available on a statewide contract or agency contract or available from a mandatory source.

Sole Brand – only one brand of equipment will meet the requirements of the end user.

Sole Source – A sole brand requirement where the equipment/service is only available from one source.

PURCHASE REQUESTS SOLE SOURCE/SOLE BRAND

Examples of Valid Sole Source/Sole Brand Requirements:

– Components of a major assembly– Compatible items to be added to an existing system.– Compatibility with substantial parts inventory and/or

service capabilities– Physical design characteristics to satisfy aesthetic

requirements.– Matching and inter-changing with preponderance of

existing equipment.– One of a kind equipment– Books, publications, subscriptions, etc.

PURCHASE REQUESTS ALL SOLE SOURCE REQUIREMENTS

The following must be received with the purchase request in Procurement:

1. A completed sole source/sole brand form with both end user and department head signature – form available on administrative forms website

2. A letter from the original equipment manufacturer (OEM) stating they are the sole manufacturer and sole seller of the item - In the case where the sole source is a reseller, the letter from the OEM must state the reseller is the only authorized reseller TO the state of Georgia

PURCHASE REQUESTSSOLE SOURCE/SOLE BRAND ITEM COST $10,000+

Matrix is required List minimum specifications down the side List evaluated brands across the top Show how each brand meets or does not

meet the minimum requirement specified

PURCHASE REQUESTSCHEMICAL PURCHASES

Central Research Stores is the sole agent for submitting purchase requests for lab chemicals to the Procurement Office - This applies only to main Athens campus

Lab chemicals can not be purchased on indefinite blanket orders.

PURCHASE REQUESTSRADIOACTIVE MATERIALS

All orders for radioactive materials must be placed via purchase request thru the Procurement Office

Direct purchases from vendors are prohibited Athens campus radioactive material deliveries will be

made to Radiation Safety Must be classified as an authorized user and granted

access to an electronic database by Radiation Safety which will issue a “B” number (authorization tracking number) for each item ordered - This number is unique and not reusable

Include “B” number on purchase request

PURCHASE REQUESTSCONSTRUCTION

Only use purchase request procedures Definition – Construction involves one or more of the

building trades, such as electrical, mechanical, heating, air conditioning, plumbing, carpentry, painting, acoustical or ceramic tiling, paving, excavating, grading, metal fabrication, landscaping, glass fabrication and/or installation, masonry, plastering, roofing, well drilling, concreting, building demolition, elevator installation, insulating, fencing, floor covering, environmental chamber construction and installation, greenhouse construction, etc.

PURCHASE REQUESTSEMERGENCIES

Hard copy – fax directly to Contracts and Grants or Expenditure Control depending on funding - Can also be hand-carried

Electronic PR- Place a “Y” in the emergency field in the system. Do electronic emergency justification

Always specify the required delivery date Always submit an emergency justification letter If $5,000 or above and sole source/sole brand –

submit sole source/sole brand form - also matrix should be submitted if unit cost $10,000 or above

PURCHASE REQUESTSINFORMATION TECHNOLOGY

IT includes computer systems, computer related equipment, peripherals, and software

CESS Approval required for all IT purchases totaling $10,000 or more

CESS approval guidelines are at www.eits.uga.edu/cess Statewide contracts exist for microcomputer purchases Obtain current pricing information (less than 30 days old)

from vendor and submit with purchase request See ordering guidelines for processing purchase

requests with various vendors at www.busfin.uga.edu/procurement and then see the vendors listed under Commodities and Contracts

Dell – get quote from Premier page

PURCHASE REQUEST COMMON MISTAKES AND ERRORS

All required information not submitted with purchase request – Missing paperwork address– Missing delivery address– Missing departmental point of inquiry– Inadequate specifications- no catalog number– No sole source/sole brand justification – No letter from original equipment manufacturer

certifying sole provider

PURCHASE REQUEST COMMON MISTAKES AND ERRORS

Vendor provided is not the statewide contract vendor

No quote from vendor sent to Procurement – especially needed with Dell and other statewide contract computer vendors, and necessary for sole source procurements.

No CESS approval for IT $10,000 + Failure to include B# for radioactive materials

PURCHASE REQUEST COMMON MISTAKES AND ERRORS

Failure to include size/unit of issue for radioactive isotopes and research chemicals

Radioactive isotopes with short shelf life are ordered too far in advance of required actual delivery.

PROCUREMENT IN THE FUTURE

Researching commercial web based procure to pay and E-Procurement systems

Electronic purchase requests- status tracking on line

Major vendor catalogs available on-line Orders submitted electronically to vendors Visibility of minority and small business

suppliers

QUESTIONS & ANSWERS

Contact Information:

Annette Evans

Phone: 706-542-7066

Email: amevans@uga.edu

www.busfin.uga.edu/procurement