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PROCUREMENT USER MANUAL

Table of Contents

INTRODUCTION ...................................................................................................................................... 2

CHAPTER I - PROCUREMENT OVERVIEW ............................................................................................... 2

Section 1- Procurement Authority ...................................................................................................... 3

Section 2- Procurement Planning ....................................................................................................... 4

Section 3- Principles of Procurement ................................................................................................. 4

Section 4- Procurement Ethics ............................................................................................................ 5

Chapter 2- REQUISITIONS ...................................................................................................................... 7

Section 1- On-line Requisitions ........................................................................................................... 7

Section 2- How to place a request ...................................................................................................... 7

Section 3- Express Buy Process ........................................................................................................... 7

Section 4- Direct Pay Orders ............................................................................................................... 8

Section 5- Defining Requirements ...................................................................................................... 9

Chapter 4- PROCUREMENT METHODS ................................................................................................ 10

Section 1- Methods of Soliciting offers ............................................................................................. 10

Section 2- Credit Card Purchases ...................................................................................................... 12

Chapter 5- RECEIVING .......................................................................................................................... 12

Section 1- Receiving of Goods........................................................................................................... 12

Section 2- Shipping Personal Effects for New Faculty Members ...................................................... 12

Chapter 6- COMPLAINT PROCESS ........................................................................................................ 12

Chapter 7- CONTRACTS ADMINISTRATION & INSURANCE ................................................................. 13

Appendices: I - FAQ

II - I-procurement processes guideline

III - How to raise a Complaint

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INTRODUCTION The University Procurement and Contracts Administration Department is established to support the educational and research missions of the University. It is staffed by procurement agents who have the requisite knowledge, skills and training to assist University personnel in the acquisition of required goods and services. This expertise insures that procurement decisions will be made in the best interest of the University and in compliance with its policies.

Customer service is our first priority. As a service department, our goal is to develop and maintain an excellent working relationship with our stakeholders and strive to ensure that all procurement transactions are conducted in a legal, ethical, and professional manner while abiding by AUB’s Policies and procedures, which results in the most efficient, economical and responsible purchases. We offer all businesses an opportunity to compete on an equal basis.

CHAPTER I - PROCUREMENT OVERVIEW Procurement is the overall process of acquiring goods and services which includes all steps from the identification of needs, requisitioning, sourcing and contract award, and supplier compliance.

This manual should be used as a guide by all users when requesting goods and services; it provides:

Information regarding the basic policies and procedures to be followed for procurement at AUB;

Guidance on how to place a purchase requisition;

Useful information about how the procurement process works in general;

Summaries of major procurement policies and objectives, responsibilities of various individuals and departments, and procedures for the performance of some of the major procurement functions.

The Procurement and Contracts Administration Department recognizes that faculty and staff may have questions or concerns regarding the procurement process which may be answered in Appendix I.

Procurement and Contracts Administration Department Contacts

Procurement Department: Telephone extension 2200/1

Fax: 00 961 1 744463

E-mail: purchase@aub.edu.lb

For individual contact, kindly check the link below showing the list of the employees at the Procurement and Contracts Administration Department with their respective contact methods.

http://www.aub.edu.lb/pca/Pages/contact.aspx

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AUB Procurement Process

Section 1- Procurement Authority

The Procurement and Contracts Administration Department is the central authority for the

procurement of goods and services required by any University department. No individual other

than the Director of Procurement has the authority to direct or approve (subject to purchase

order approval hierarchy) an order with a supplier or to obligate AUB to an outside supplier in

any way unless:

1. The President of the University or the COO specifically authorizes an individual or group to

do so.

2. The Director of Procurement delegates purchasing authority to specific procurement agents

in the Procurement and Contracts Administration Department.

Procurement or other commitments made by unauthorized personnel are not legal and not

binding upon AUB and may result in a personal obligation for the individual making the

procurement or commitment. Only individuals who are authorized to commit University

entrusted funds can make purchases on behalf of AUB.

Tools for making purchasing commitments are: - Standard Purchase Orders - Express Buy Purchase Orders - Direct Pay Purchase Orders

Planning Requisition

Creation Requisition

Approval

Solicitation of Competitive

Bids

Evaluation of Bids

Bid Award

Purchase Order Creation & Processing

Shipment of Goods

Receiving of Goods

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Individuals purchasing goods directly in one of the ways set forth above must ensure that the

goods and services were purchased in a competitive situation at the best value available in the

market place for the goods or products of the quality required and specified. The factors in

determining whether goods and services are obtained in a competitive process include factors

such as whether at least three bids or quotes have been obtained (in writing) and the product

selected at the best value that meets the quality standards and delivery schedule reasonably

required. Regardless of funding source, AUB purchases will be made in accordance with AUB

procurement policies. Some funds are more restrictive than others, and the procurement agents

must be aware of those restrictions.

Section 2- Procurement Planning

Procurement planning is essential for the successful and timely solicitation of quotations, bids or proposals; cost efficiency; the award of contracts; and the delivery of inputs. Early and accurate planning is essential to avoid last minute, emergency and ill-planned procurements and most importantly it allows us to conduct business in a fair, competitive and transparent process.

Departments may request the Procurement and Contracts Administration Department to issue a Request for Information (RFI) as a means of soliciting information (such as price information for budgetary purposes, investment decision-making, and product analysis) without the intention to purchase the product and this will help end-users in making informed business decisions based on cost benefit analysis; however any intention to purchase the product in the future will be subject to a RFQ, ITB, or RFP in accordance with the Procurement and Contracts Administration Department bidding and purchasing procedures. For more information on Procurement terms definition, kindly review Chapter I, Section 6 of the Campus Procurement Manual.

Section 3- Principles of Procurement

The Procurement and Contracts Administration Department gives due consideration to the following general principles while executing procurement on behalf of the University:

Best Value for Money

Fairness, Integrity, Transparency

Effective International Competition

The Interest of AUB

Best Value for Money

The core governing principle of Procurement is to obtain the best value for money. In the context of the procurement process, obtaining “best value for money” means selection of the offer, which presents the optimum combination of life-cycle costs and benefits, which meet the AUB’s needs. Best value for money should not be equated with the lowest initial price option rather requiring an integrated assessment of technical, organizational and pricing factors in light of their relative

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importance (i.e., reliability, quality, experience, reputation, past performance, cost/fee realism, timeliness and reasonableness). The principle of best value for money is applied at the award stage to select the offer that effectively meets the stated requirement. To ensure that best value for money is obtained, the process of soliciting offers and selecting a Contractor should:

Maximize competition by applying the competitive bidding process;

Minimize the complexity of the solicitation, evaluation, and the selection process by defining requirements and setting clear criteria;

Ensure impartial and comprehensive evaluation of solicited offers; and ensure selection of the Contractor whose offer has the highest degree of realism and whose performance is expected to best meet the end-user specifications.

Fairness, Integrity and Transparency

As competition is the basis for efficient, impartial and transparent procurement; Procurement & Contracts Administration team members are therefore, responsible for protecting the integrity of the procurement process and maintaining fairness in AUB’s treatment with all suppliers. Sound procurement (i.e., transparency of the process; probity; complete and accurate records; accountability; confidentiality) establishes and then maintains rules and procedures that are attainable and unambiguous. Effective Competition

The objective of AUB’s competitive processes, as described in these guidelines, is to provide all eligible prospective suppliers with timely and adequate notification of AUB’s requirements and an equal opportunity to tender for the required goods and services. Requestors should ensure that restrictions are not placed on the competitive processes and hence limiting the pool of potential suppliers. Interest to AUB

The University interest for the procurement of goods and services is always guided by: - The need for economy and efficiency in the sourcing process of goods and services. - The access to procurement opportunities for all interested and qualified suppliers

worldwide, giving all eligible suppliers the same information and equal opportunity to compete in providing goods or services; and the importance of transparency in the procurement process.

Section 4- Procurement Ethics

The funds used by the AUB are entrusted to the University by its Board of Trustees and other parties. The transactions engaged in AUB shall be conducted in accordance with the highest ethical and professional standards in order to ensure the maximum degree of trust. Procurement activities must be carried out in a manner above reproach. In addition, all faculty, staff, and students must avoid conflicts of interest between their obligations to AUB and their personal affairs. No faculty, staff member, or student should have an economic interest in, or relationship with, any firm, person, or corporation doing business with AUB if there is a chance it could influence the employee’s or student’s actions on behalf of AUB.

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AUB procurement process must allow suppliers to compete for AUB business on a fair, equal and transparent basis. Staff associated with the procurement function, therefore are responsible for protecting the integrity of the procurement process and maintaining fairness in AUB’s treatment of all suppliers.

A- Code of Ethics

1. Give first consideration to the mission, objectives, and policies of AUB.

2. Seek the best price for the product that meets the technical and quality and delivery requirements of the University and strive to obtain the maximum value for each dollar of expenditure.

3. Decline personal gifts or gratuities.

4. Grant competitive suppliers equal consideration in so far as laws, regulations, AUB community user requirements, and AUB policy permit.

5. Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.

6. Demand honesty in sales representation whether offered through the medium of a spoken or written statement, an advertisement, or a sample of the product.

7. Receive consent of originator of proprietary ideas and designs before using them for competitive purchasing purposes. Do not share supplier pricing information without the written permission from the supplier.

8. Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a supplier while being a strong advocate of the University’s contractual rights and other legal rights.

9. Accord a prompt and courteous reception in so far as conditions permit to all who call on legitimate business missions.

10. To foster fair, ethical, and legal trade practices.

11. Work on behalf of the interests of AUB solely and avoid situations that may result in personal benefit or gain to the buyer, requestor, or any member of a bid committee.

B- Buying for Employees or Third Parties

Making personal purchases for University employees and outside entities is prohibited under the University policies. As such, the Procurement and Contracts Administration Department will neither negotiate for personal purchases, nor request suppliers to offer special discounts to faculty and staff, or conduct solicitations for non-University entities.

For more information about AUB’s Code of Ethics and Conflict of Interests Policy, kindly review Chapter II of the Campus Procurement Manual.

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Chapter 2- REQUISITIONS

Section 1- On-line Requisitions

I-procurement is an on-line application that is part of the Oracle Purchasing Module. It provides a web-based method for requestors to create requisitions and research the status of existing requisitions. Items that are needed by AUB faculties and departments and are not available in the AUB inventory or stores and cannot be ordered through the Express Buy PO Program must be requested through i-procurement by filling an on-line requisition.

The Administrative Assistant in the Procurement & Contracts Administration Department is

available to give functional support and attend to queries related to the procurement process.

She can be reached at extension 2200/01.

Section 2- How to place a request

1. The requestor must first contact the Materials Management Department to confirm that the requested items are available in the store; otherwise he should place an electronic requisition to the Procurement and Contracts Administration Department.

2. For expense items requests, assigned preparers/requestors from user departments can place

their requisitions via i-Procurement by selecting from the “Generic Items Catalogue”, override the generic description with detailed item description, enter needed quantity, enter estimated unit price, select (default) charge accounts, enter notes and attachments, and submit for approval within the Oracle approval hierarchy. Upon final approval and confirmation of funds availability, the request will be transmitted to the Procurement and Contracts Administration Department for procurement agents to process in Oracle in accordance with the university policies and procedures. No paper forms should be used; all supporting documents, enclosures or back-up information should be electronically attached to the requisition in Oracle.

3. Requisitions received by the Procurement and Contracts Administration Department should

include related details/full and complete description of the item and generic specifications and/or business requirements; otherwise they will be returned to the requester for completion. Example: LaserJet Printer, Colored, 20 colored pages/minute, 16 black&white pages/minute, resolution 48000dpi.

For more information about I-procurement processes, kindly check Appendix II.

Section 3- Express Buy Process

The Express Buy Process has been established to make purchases of goods and services whose value

does not exceed $200 per purchase order as convenient as possible for AUB faculties and

departments that are defined as i-procurement users (except for those purchases funded by

research grants the limit per purchase is $1,000-). I-procurement users can order goods directly

from the Express Buy PO approved suppliers defined on Oracle.

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The Procurement and Contracts Administration Department has entered into agreements with

preferred suppliers for specific commodity groups that permit i-procurement users to directly

purchase from those suppliers. Under this procedure, i-procurement users are delegated the

authority to make direct purchases from approved preferred suppliers defined on Oracle when the

value of the purchase does not exceed $200 per order except for those purchases funded by

research grants the limit per purchase is $1,000-.

Unauthorized Purchases

Departments are allowed to purchase items needed to support the functions of their department

and whose value does not exceed the $200- per order except for the following:

1. Store items (items available in university stores). 2. Purchases for employee’s benefits. 3. Professional fees. 4. Equipment and Furniture. 5. Travel, meals, entertainment. 6. Representation allowance expenditures. 7. Gifts and contributions. 8. Splitting purchases to circumvent the $200/$1,000 limit. It is the duty and responsibility of the i-procurement user and the corresponding approver to ensure that purchases are not made in violation of this section. Such purchases will not be honored by Accounts Payable. Using the Express Buy Procedure is not a reason for not planning departmental purchases and using normal purchasing procedures. The purchasing procedure has been designed to maximize the amount of saving that the University receives. The Express Buy procedure is designed to maximize the convenience for small value purchases.

For more information about the Express Buy Process, kindly check Appendix II- Section 4.

Section 4- Direct Pay Orders

The Direct Pay Order has been established to make a direct payment by University departments and personnel that have received approvals from the applicable Vice President. For more information about the Direct Pay Process, you may check Appendix II- Section 5.

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Section 5- Defining Requirements

Requirement definition is the process of defining and describing what is required and will be procured. Requirements need to be defined with the aim of opening up competition. No use of brands or other restrictions shall be used, unless a valid technical justification exists. Requirements should describe the exact need (technical and quality) while avoiding over specifications (as costs might increase) and under specifications (as requirement might not be met). Additionally, the need by dates must be included in order to avoid progress delays. Specifications and functional/physical aspects of commodities must provide detailed descriptions of the needed requirements. They should also be generic to the extent possible in order to enable the widest possible competition. Specifications need to be stated as one or a combination of the following:

Functional: Focuses on what a product is intended to do rather than materials and dimensions. Example: Printer, Colored, Inkjet

Performance: Focuses on what is to be achieved rather than having a fixed description of how it is to be done. Example: Printer, Colored, 16 black pages/minute, 20 colored pages/minute, resolution 1200dpi

Technical: Describes the exact design and details of the requirements including manufacturing process or the working methods to be used. In this case and due to the uniqueness of the requirement, competition is often limited.

While all three types can be combined, it is recommended to use to the extent possible performance and functional specifications in order to open up competition. This way, suppliers might be able to offer alternative solutions that turn out to be more cost effective. Furthermore, the use of brand names should be avoided as much as possible. In the event that a reference to a brand name is deemed essential, the requisitioner should:

Specify the essential and critical requirements without having the supplier to guess on which characteristics of the good are mandatory and which are not.

Use the words “or equivalent”. Example: Multifunctional printer equivalent in performance to Brand X model Y.

Specify that no particular preference to a certain brand will be given.

If certain specifications, restrictive to competition, are needed, proper justification is required and should be documented. For items with values not exceeding the $5000 threshold, the requestor may send his justification by e-mail and the approval of the Chairman/Director is required. For items with values exceeding the $5000 threshold, the user shall fill a bid waiver form and secure the necessary approvals on his justification based on the exact $value of the purchase.

Below are typical aspects of product requirements that do not conform to the policies and procedures set forth in the procurement manual and users should avoid:

Copy Specification of a particular product rather than defining a generic description

“Unpersuasive” justification for waiving competitive bidding

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Unreasonable delivery schedule

Budget estimates that are not realistic

Any requisition that does not give due consideration to Best Value for Money shall be brought to the attention of the requisitioner, who will be asked to amend/correct the requisition accordingly.

Chapter 4- PROCUREMENT METHODS The University uses a variety of procurement methods for the solicitation and tendering of goods or services. The method selected depends upon a number of factors including the type of good or service being procured as well as its value. The overall objective of the solicitation and tendering processes is to procure high quality goods or services as economically as possible. For AUB, this objective is best achieved through the transparent use of public funds and effective competition, which affects the choice of procurement method and the documentation and procedures that are used. Upon receipt of an approved on-line requisition, the Procurement agent:

Reviews the requisition to determine that all required data is provided to assure prompt processing of the order.

Checks for accuracy and correct use of the item.

Analyzes the requisition and process the order, based on the estimated cost and the nature of the order, along the lines of the following categories: (a) requisitions with an estimated expenditure of less than $5,000; (b) requisitions with an estimated expenditure of between $5,000 and $25,000; and (c) requisitions with an estimated expenditure of more than $25,000.

Section 1- Methods of Soliciting offers

Once a requisition has been approved, funding assured and specifications prepared, the procurement agent will analyze the requisition and process the order, based on the estimated cost and the nature of the order, along the lines of the following categories:

Requisition Value

Procurement Methods Time Frame

≤ $ 5,000 Secure written quotations from at least three (3) qualified suppliers.

Verbal quotations may be authorized by the Procurement Director in urgent cases.

5-7 working days depending on the nature of the goods or services to be procured.

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$5,000 - $25,000 Issue a Request for Quotation (RFQ) requesting written sealed quotes from at least three (3) qualified suppliers.

The RFQ should be made according to the requirements and generic specifications received from the end user and reviewed by the director of procurement.

Sealed quotes are opened after the submission date dead line in the presence of the Director of Procurement, the procurement agent, and the end-user.

The award shall be given to the lowest acceptable responsible bidder meeting the requirements for delivery, quality, and price.

10-20 working days depending on the nature of the goods or services to be procured.

≥ $25,000 Invitations to Bid (ITB) shall be issued to at least three potential suppliers.

Bid invitations shall be published on AUB web after having been checked and approved by the procurement director.

The procurement agent has an obligation to source as many bidders as possible, within Lebanon, the United States, and globally, and must use best efforts to ensure approved suppliers and other qualified suppliers that provide the commodities, products, goods, or equipment to be purchased have received the ITB or have been made aware of the posting of the ITB on the AUB website.

4-8 weeks depending on the nature of the goods or services to be procured.

Exceptions

The university policy does authorize procurements without competitive bidding if a particular situation qualifies for one of the following: Sole Source, Emergency Purchase, or Standardization of equipment; and if the occasion arises, the user should fill a Waiver Bid Form.

Non-competitive routine orders for Single Source items or products available under existing University Contracts (regardless of dollar value), will usually be processed and mailed to the suppliers within 3 working days after receipt of an approved on-line requisition, provided no further information is required from the user.

For more information on the Solicitation Process, you may review Chapter 6 of the Campus Procurement Manual.

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Section 2- Credit Card Purchases

Requestors may need to conduct on-line purchases for specific products that can only be procured through a credit card. For these cases requestors are required to place an on-line request through i-procurement following the process described under Chapter 2, Section 2, of this manual, and provide the link for the corresponding website with all the necessary information needed to process the transaction.

Chapter 5- RECEIVING

Section 1- Receiving of Goods

All orders are delivered at the Receiving dock in the lower Campus. Once the goods are delivered to the end-user he must inspect the goods for quantity, condition and quality, operability, and to ensure that the goods conform to the specifications of the purchase order. If the goods require assistance from a technical department, then, the end user should request a representative from such department to assist with the inspection of the product, device, or equipment or good delivered. This is important since AUB’s legal rights to return the product and other contractual rights will be triggered upon receipt and acceptance of the goods. If such inspection and acceptance or rejection does not take place in a timely manner, AUB may waive certain legal rights in connection with such goods.

If the goods are accepted the end user must confirm the inspection and acceptance on the transmittal document, if not, the reason for rejection of the goods should be recorded. The transmittal note must be returned to the Receiving Department immediately so that the acceptance or rejection of the goods, product, or equipment can be recorded in Oracle.

Section 2- Shipping Personal Effects for New Faculty Members

Sometimes people can find the experience frustrating, by running into brick walls information-wise. Beyond finding out, often for the first time, what is involved in shipping goods to Lebanon, there is also the interpersonal element, where you want to know the contact person that will entrust your personal effects; check the below link for all the details related to the shipping formalities:

http://www.aub.edu.lb/nfo/prearrival/Pages/index.aspx#shipping_and_airfreight

Chapter 6- COMPLAINT PROCESS The Procurement and Contracts Administration Department is committed to ensure that all its procurement activity works effectively and fairly for all parties. With this in mind, we have developed the procurement complaint procedure to ensure that any user who has complaints about the procurement process can contact the Customer Service Administrator and have their complaint appropriately addressed.

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So if at any time the user thinks we haven't met his expectations, he is encouraged to file a complaint by following the complaint procedure and we will try to do everything we can to put things right and will analyze complaints data over time to identify further opportunities to improve our services.

Moreover, The Procurement and Contracts Administration Department takes the supplier complaints very seriously in an effort to ensure the best goods and services for users. User input is a valuable tool and helps identify and document poor supplier performance that may result in purchasing debarring the supplier from doing business with the University.

All complaints must be sent to the Procurement and Contracts Administration Department. The Customer Service Administrator will review the complaint and take the appropriate action. The users should not send complaints directly to the supplier.

For more information on how to raise a complaint, kindly check Appendix III.

Chapter 7- CONTRACTS ADMINISTRATION & INSURANCE

Contracts Administration section provides support to Campus departments having the need to

establish agreements or contracts for services with external suppliers by leading the

administrative process of competitive bidding, contract negotiation and award, drafting and

finalizing the agreement, and evaluating the contractor performance against the contract

terms and conditions. In addition, Contracts Administration section is in charge of the University

Insurance Contracts.

The University holds various types of insurance policies and some are acquired on an as needed basis in which financial protection or reimbursement against losses is received from the insurance provider(s). The main insurance policies include but are not limited to the following:

Travel Insurance

Fire Insurance

Public Liability

Medical Malpractice

Motor Vehicle

Etc.

PCA supports the community by providing Travel Insurance policy to employees traveling outside Lebanon on business leave. Coverage is strictly limited to medical emergency, which is defined as a sudden, unexpected, and unforeseen occurrence of condition resulting in an injury.

PCA reviews Requests for Proposals and contracts to ensure that they do not violate terms and conditions of University policies and procedures; they address all possible risks, as well as existing or required insurance policies.