Purchasing Policies and Procedures
Effective August 1, 2005
Updated January 13, 2014
- The Troy University Purchasing Department is responsible for the development of policies and procedures designed to create an efficient and effective decentralizedprocurement environment for the Troy University System. The Purchasing Department is the final review and approval for all purchases with University funds.
- University employees may not enter into purchase contracts or otherwise obligate theUniversity for expenditures unless authorized to do by the Director of Procurement or inaccordance with the Purchasing Policies and Procedures Manual (September 1998, asamended). Such negotiations are unauthorized and any resulting expenditures will beclassified as non-reimbursable personal expense. Troy University will assume no liability forpayment of purchases which were not made through approved purchasing procedures.Laws regarding the use of public funds are very specific, so it important that Universityprocedures be carefully followed.
- Every expenditure must be prudent and directly benefit Troy University. Documentation tothis effect must be maintained by University personnel. Only purchases for businesspurposes are allowed. Purchasing items for personal gain and/or the purchase of itemsexpressly prohibited by the State (i.e., alcoholic beverages, gifts, etc.) are not allowed.
- Restrictions imposed by a grantor or contractor may be more stringent than thoseimposed by the State and the University. It is the responsibility of the Principal Investigatorto make sure that all purchases are made in accordance with State and Universityrestrictions, as well as meeting all conditions imposed by the granting or contractingagency.
- All purchases for goods and services are subject approvals based upon the TroyUniversity Contractual, Financial, and Personnel Authority levels policy, approved by theChancellor, effective January 27, 2004, as amended.
- Prepayment for the purchase of goods and services is not allowed.
- Employees should not expend personal funds and request reimbursement for goods andservices on behalf of the University without written permission from the Director ofProcurement. The University is tax exempt and tax on such purchases will not bereimbursed.
There are three types of purchasing alternatives expressly approved by Troy University:
- Orders requiring a purchase order
- Orders not requiring a purchase order
- Troy University Purchasing Card
1. Purchases Requiring a Purchase Order
- Most purchases of goods or services which exceed $500.00 in value must be processedvia the purchase order process. Requisitions are generated using Datatel PurchasingModule through REQM. Assigned departmental personnel are required to enter therequisition information utilizing the On-Line Requisition and Electronic Approval process.Approvals for requisitioned items are also entered electronically through the Datatel systemby the approvers. Training can be scheduled by contacting the Purchasing Department atExt. 3402 or firstname.lastname@example.org.
- Exceptions to the requirement for a purchase order for goods and services exceeding$500.00 are listed in the section “Purchases not requiring a purchase order.”
- The Purchasing Department will generate purchase orders once daily. Vendor,departmental and material receipt copies of the purchase order will be returned to thedepartment for verification of data on purchase order. The initiating department isresponsible for forwarding the purchase order to the vendor via mail, fax or by calling inorder if permitted by the vendor.
- Purchase orders will not be approved if funds are not available. The On-line requisitionprocess monitors budget availability and overrides are not allowed.
- The Purchasing Department will determine if competitive bids are required. No ordersexceeding bid thresholds can be placed until competitive bid law requirements have beenmet.
- Orders for goods and services should not be placed until the purchase order has beenapproved at all levels. Only the Purchasing Department can issue a Purchase Order.
2. Purchases Not Requiring A Purchase Order
- Some purchases may be made directly by the department and do not require a purchaseorder. Note: If a vendor requires a purchase order for any purchase or if the departmentdesires a purchase order, follow the standard procedures for processing a requisition in thePurchasing Module of Datatel.
- Purchases of less than $500 usually do not require a purchase order and can be paidusing the Accounts Payable Check Request Form. Petty cash can also be used inaccordance with the Petty Cash Policy.
- The following items do not require a purchase order, even if their costs exceed $500.00:
- Insurance Premiums (Approved Risk Management Expenditures)
- Legal and Audit fees
- Legal Settlements
- Lodging (See travel policy)
- Manuscripts, books, maps, pamphlets
- Memberships (must be approved by the administration)
- Notary Public/Bond Fees
- Periodicals, technical reports
- Postage and Post Office Box Rental
- Routine purchases from Troy University Departments (Internal Transfers)
- Subscriptions (must be approved by the administration)
- Utilities (electric, gas, water, cable and telephone)
- Purchases processed on check requests must be approved at all required levels prior tosubmission for payment.
Payment of Purchases
- Accounts Payable is responsible for generating checks to pay vendors for goods andservices once orders have been completed.
- In order for a vendor payment to be generated, University personnel must processmaterial receipts through Goods and Services Receiving in the Purchasing Module ofDatatel.
- Original invoices should be forwarded to Accounts Payable in 314 Adams AdministrationBuilding as soon as the goods and services have been completed. Invoices will be paid within 30 days of receipt or by the invoice due date in most cases.
3. Troy University Purchasing Card
- The Troy University Purchasing Card Program has been established to provide aconvenient means with which to make small dollar transactions within established usagelimits. The program is designed to enhance purchasing options and reduce the need forincidental/petty cash transactions. The card may be used with any merchant who acceptsMasterCard, either in store, by phone, mail, fax, or on-line via the Internet.
- The Purchasing Department is responsible for managing the program, and eachassigned cardholder is responsible for managing its Cardholder account. The procedurescontained in the Purchasing Card Program manual apply to all University employees whohave been issued a Troy University Purchasing Card or who have direct or delegatedresponsibilities under the Purchasing Card Program.
- The Purchasing Card Program is not intended:
- To avoid or bypass established procurement or payment procedures;
- To replace certain established travel policies and procedures;
- For personal use.
- The cards are intended exclusively to conduct official University business. Purchasingcards are generally limited to commodity purchases only. Purchases must followappropriate state laws and guidelines and must be made with reasonable judgment.Contact the Purchasing Department for clarification prior to making a purchase if there isa question about the official purpose of a purchase or if the use of the Purchasing Card tomake a purchase seems questionable.
- All permanent full-time employees are eligible for the Troy University Purchasing Card.However, issuance of cards is subject to approval by any employee’s supervisor(s) and theSenior Vice Chancellor for Finance and Business Affairs. Application for a University carddoes not automatically qualify an individual for a card. No purchase orders will beassociated with the University Purchasing card. Approved cardholders must demonstratethe ability to manage the card according to the Card Policy and that the requireddepartmental structure is in place to support the use of the card.
Purchases Involving $15,000 or More And the Alabama Competitive Bid Process
- Alabama law mandates that there be public competition for purchases of goods orservices involving $15,000 or more. Therefore, competitive, sealed bids are required if theitem is not already covered by an existing University contract or by items listed on a StateContract issued by the Alabama Purchasing Division. Because of the competitive bidrequirement, this process can take up to 40 days or more to complete; therefore, significantadvanced planning is required for such purchases. The process can take significantly longerif user review of bids is delayed.
- Purchases involving $15,000 or more cannot be divided into smaller purchases inan effort to circumvent the Alabama Competitive Bid Law. The threshold of $15,000 isfor any one item or any order of multiple goods or services whose total value equals$15,000 for like items.
- The department should contact the Purchasing Department for guidance prior topreparing bid specifications for goods and services requiring the Competitive Bid Law.
- The Purchasing Department maintains a common list of vendors who have registered forconsideration in the public bid process. The Purchasing Department is constantly seeking toexpand the list of potential vendors, so your suggestions are always welcome. Vendors maybe referred to the Purchasing Department to register requests may be sent email@example.com.
- Specifications are the requirements which establish the product or services that will meetyour needs. Preparing specifications for purchases are the joint responsibility of yourdepartment and the Purchasing Department. The Purchasing Department will outline theterms and conditions for the bid process; your department will develop the technical orperformance specifications. You should work with the Purchasing Department to developevaluation criteria.
- Specifications should define the quality of the item that is required, noting if a lesser orhigher grade is acceptable.
- Specifications must not be unduly restrictive and should assist in the competitive process.Under no circumstances should specifications be written in order to exclude vendors whohave an equal opportunity to respond to bid requests. They should be fair and equitable andnot be prejudicial for or against a specific supplier.
- If a vendor assists in developing product specifications, that vendor must be excludedfrom bidding on those items.
- “Acceptable substitute” may be used to set specification standards. If using “brand nameor equal, “identify the distinct features which will meet those criteria.
- See “Sole Source Purchases” for exceptions to this policy.
- Emergency orders must still comply with certain legal requirements. Please contact thePurchasing Department for further instructions.
- The same requirements apply if used items are preferred or if the item is to be leased(capital or operating leases)
Sole Source Items
Sometimes an item is available from only one source. In order to justify purchasing basedon “sole source” status of a vendor, you must provide adequate documentation from thevendor with your request to waive the bid process. The Director of Procurement will reviewyour documentation to determine if the “sole source” justification is adequate andappropriate. Your written justification should describe the technical characteristics of theitem as well as why those characteristics are essential and cannot be obtained from anyother source. This information should also include documentation from the vendor whichadequately describes the proprietary nature if the item. In the event “sole source” status isaccepted, the purchase price of the item should be negotiated to receive the bestterms/pricing possible.
Other Alabama Competitive Bid Process Items
- Generally, contracts cannot be bid beyond a fiscal year. However, when a major contractcannot achieve economies of scale, longer term contracts may be allowed. Contact theDirector of Procurement to find out the allowable length for contract types. Funds in stateappropriated accounts are not obligated beyond a fiscal year. Funds for SponsoredProgram Accounts are not obligated beyond the expiration date of a grant or contract.
- Code of Alabama, Title 39 for Public Works covers the bid requirements for renovation,remodeling, building and removal of public structures. The threshold at which bidding underPublic Works is required is $50,000 per project. Contact the Purchasing Department formore information on Public Works if a major building project is being planned.
If you have questions regarding the Alabama Competitive Bid Process, please contact thePurchasing Department.
Other Purchasing Items
Vendor Disclosure Statement
In compliance with Alabama State Law Act 2001-955, Sections (1), (2) and (3), TroyUniversity requires the disclosure of certain information regarding vendors and theirrelationships with Troy University.
Vendors should be advised that in submitting their bid, contract proposal, they affirm underoath that no such relationships exist. If such a relationship does exist and the intended oractual contract value exceeds $5000, they should complete a detailed Vendor DisclosureStatement and submit it to the Purchasing Department.
In the event of competitive bids, this disclosure is only required from the winning vendor.Contracts will not be awarded to any person who refuses to disclose required information ifsuch relationships exist. Departments should be aware that this law applies to ALL vendorswith whom a contract which exceeds $5,000 (including those items submitted on a checkrequest).
All vendors are also required to submit a W-9 form to the Purchasing Department. Eachdepartment will be responsible for requesting this from the vendor. For your convenience,the form is available on the Financial Affairs website under “FORMS.” Payment for goodsand services will not be made to any vendor until this process has been satisfied.
Code of Ethics
Any University employee involved in purchasing goods or services must comply with theNational Association of Educational Buyers (NAEB) Code of Ethics which includes thefollowing:
- Priority will be given to the objectives and policies of Troy University
- Seek maximum value for each expenditure
- Do not accept any personal gifts or gratuities.
- Give each supplier fair and equal consideration, within the parameters of the laws andUniversity policy
- Foster ethical trade practices and conduct business honestly and with good faith.Demand the same standards from suppliers.
When making any purchase which will require shipping – you should have a completeunderstanding of whether shipping charges are to be paid by the supplier or thedepartment. Your purchase requisition should include the approximate carrying charges tobe paid by the department. When possible, avoid paying freight by specifying FOB location.
Emergencies: are defined as circumstances in which action is needed to protect the healthand welfare of personnel and students and to prevent further damage to property. FAILURETO ANTICIPATE A NEED IS NOT, OF ITSELF, CONSIDERED A BONAFIDEEMERGENCY! WAITING UNTIL THE LAST MINUTE TO CORRECT A FORESEEABLECIRCUMSTANCE IS NOT AN EMERGENCY.
Prepayment of Purchase Orders and Contracts
It is the policy of the University not to pay for an item before it is received (prepay).Prepayment of purchases is made only with the approval of the Purchasing Department.
- Subscriptions, as required.
- Institutional memberships
- Registration fees for conferences and official meetings
To process a request for prepayment, prepare an Accounts Payable Check Request, obtainall the proper approvals. Forward all documentation for PREPAYMENT to the PurchasingCoordinator for processing. DO NOT FORWARD REQUESTS FOR PREPAYMENTS TOACCOUNTS PAYABLE.
Working with Vendors
Any price quotations you receive from vendors are considered informal and are forinformation purposes only. Only the Purchasing Department can issue formal and bindingbids/quotes.
On many occasions, the information provided to you by the vendor may contain certainterms or language that the University cannot comply with. The Purchasing Department willinsure that our terms and conditions are formalized with the vendor.
Do not commit to a purchase verbally or in writing until it has been authorized by followingstandard purchasing procedures.
If you have a complaint about a vendor, please contact the Purchasing Department at Ext3402.
Vendor samples may be accepted by University departments only under certaincircumstances:
- The product will be needed by the University. Do not accept products that will probably notbe purchased.
- Samples are not for personal use
- The sample is relatively small and of low dollar value. Samples are for examinationpurposes and not added to inventory.
- If a sample is accepted it should be promptly conveyed to the appropriate department fortesting and the vendor is provided with a prompt evaluation.
Sometimes vendors, such as Quill, offer premiums with orders that exceed a certain dollarlevel or with orders of specifically marketed items. Employees of the University are notallowed to profit at the expense of University funds. If, at any time, premiums are receivedas a result of a vendor promotion, the gift must be forwarded to the Purchasing Department.
- Original signatures are always required on check requests.
- Original invoices are required for vendor payment. If an original is not available, aduplicate must be obtained from the vendor marked “certified, true, correct and unpaid” bythe vendor. An original signature must be obtained from the vendor or vendor personnelresponsible for accounts receivable.
- Troy University is exempt by law from paying sales tax within the State of Alabama. Salestax reflected on invoices will be deducted prior to payment. If a vendor requests a taxexempt form, this can be obtained in the Office of the Senior Vice Chancellor for Financeand Business Affairs.
- Invoices reflecting discounts should be submitted for payment in a timely manner toinsure the possibility of deducting within payment terms.
- All invoices should be submitted in a timely manner in order to process payment to thevendor within thirty days of invoice date.
- Troy University does not pay late charges, penalties and/or finance charges.
- Payment will be mailed directly to the vendor from Accounts Payable unless otherwisespecified by the Department. Department mailings of checks should be limited to thoseitems requiring accompanying information that the department has held pending checkgeneration.