FI0405 – Purchasing – General Policies
To provide general policies on the purchase of supplies, equipment, and services from outside vendors.
- Departments should use the campus or unit purchasing department's requisitioning and purchase order process when purchasing goods and services that are amenable to the bid process. Such goods and services are (1) subject to uniform and impersonal criteria to ensure the proper evaluation of bids or (2) combinations of goods and services whose end product is more significant than the service that leads to production or delivery and when the vendor has little control in determining the product's actual content or form. Examples of biddable services include printing brochures, developing film, or providing sound equipment for a performance.
- Departments that wish to contract for services not amenable to the bid process should refer to FISCAL POLICIES FI0420 and FI0445. Non-biddable services include those that involve highly skilled judgment or training, artistic ability, or other attributes and whose quality depends on an individual's characteristics and knowledge. Examples of non-biddable services include those provided by lecturers, artists, and entertainers. Departments should contact the campus or unit purchasing department if there are questions regarding whether services can be bid.
- The university's policies regarding the procurement of goods and services do not apply to federal, state, and administrative court costs for legal matters handled through the Office of the General Counsel.
- All purchases must be for official university use or benefit only. All goods and services purchased by the University of Tennessee must be in support of the instruction, research, public service, and supporting activities associated with the university's mission. Departments may not requisition materials, supplies, equipment, or services unless funds have been appropriated and are available for these purchases. The requisitioning department is responsible for determining that all items to be purchased are necessary.
- Generally, all materials, supplies, equipment, or services from outside sources necessary for departmental operations are acquired either through direct purchase or as gifts to the university. Goods and services accepted as gifts must be handled in accordance with FISCAL POLICIES FI0315 and FI0620.
- University personnel who are connected in any way with requisitioning or procuring equipment, supplies, and services used by the university shall not accept personal gifts, gratuities, or kickbacks (as defined by Federal Acquisition Regulation 52.203-7) that might influence the selection or purchase of such materials or services. Any university employee who becomes aware of such activities should inform the campus or unit internal auditor or UWA Audit and Consulting Services. For more details on avoiding and reporting conflicts of interests in purchasing as well as other areas, see FISCAL POLICY FI0125, Conflict of Interests.
- Generally, bartering with outside vendors for goods and services is prohibited.
Personal Use Items
- Personal Use by Employees. Items for personal use by employees may not be purchased with university funds. These items may include greeting cards, flowers, food, or gifts for any occasion, among other items.Departments may not use university funds to purchase items for employees and allow the employees to reimburse the university. Also, employees may not use the university's letterhead in placing orders for personal purchases or use the university's name to avoid paying sales taxes when making personal purchases.
- Personal Use for Official Functions. Personal items such as greeting cards, flowers or gifts required for conducting official departmental activities or business and not intended for employees may be purchased through usual procurement procedures, including university bookstores. An explanation of the reason and use for the item(s) must be provided with the payment request (e.g., on an invoice or a petty cash reimbursement request) and retained with the supporting documentation for six years for audit purposes. Purchases of appliances such as refrigerators, microwaves and similar items intended for office break rooms require written approval from the campus business officer.
Purchases From Sponsored Project (Grant or Contract) Funds
- Purchases from grant or contract funds will be made in accordance with regular university purchasing policies unless the governing document (grant or contract) specifies alternate procedures. The project director should be aware of any special purchase limitations or requirements applicable to a particular sponsored project and certify on purchase requisitions that these requirements have been met.Special procedures that must be observed in the purchase of equipment on federally sponsored projects are found in the Federal Acquisition Regulations and in Office of Management and Budget Circulars A-21 and A-110, with additional information in FISCAL POLICY FI0205. Copies of these circulars and additional information concerning certain grants and contracts may be obtained from the UT Controller's Office.
AUTHORITY OF PURCHASING DEPARTMENTS
- The responsibilities for purchasing supplies, materials, equipment, and commercial services from outside vendors for all university departments (including research projects) have been centralized in purchasing departments at the various campuses/units. This centralization is designed to relieve the faculty and other staff of many details connected with bid solicitation and procurement.The University of Tennessee bylaws specify that an officer of the university (Article IV, Section I) may not legally bind the university in contractual agreements unless authority to sign for a specific type of contract is delegated to specific campus, institute, or unit officials. Purchasing officers are authorized by the Board of Trustees to sign and issue purchase orders to acquire goods and services. Purchase orders signed by other university employees are null and void and do not obligate the university to pay for goods or services unless such authority has been delegated in accordance with this policy.Unless indicated in this policy, no obligations for purchases will be undertaken without authorization of the campus or unit purchasing department. Without special arrangements to the contrary, the purchasing department will receive all bids for every purchase of $5,000.00 or more.
- Purchases made by the University of Tennessee are exempt from Tennessee Code Annotated Title 12, Chapter 3, "subject to the policies of the board of standards...except in those cases where the department of general services executes term contracts...for an amount less than can be bought by" the university and "provided, that...(the university) shall as far as may be practicable observe the standards and procedures of purchasing" (TCA 12-3-103).
Coordination of Purchasing Among University of Tennessee Campuses and Units and Tennessee Board of Regents Institutions
- Where appropriate, bid requests should include wording that will allow all University of Tennessee campuses, units, and institutes as well as Tennessee Board of Regents (TBR) institutions (universities, community colleges, and technology centers) to purchase under the terms and conditions of the bid. All University of Tennessee campuses and units may also purchase under the terms and conditions of individual TBR institution vendor contracts that include provisions for such purchases.
- The general responsibilities and functions of the campus or unit purchasing departments are as follows:
- To purchase supplies, material, equipment, and related services for university departments and "obtain maximum value" (lowest price determined through a competitive bid process) for every dollar spent and to ensure that qualified suppliers are given equal opportunity to fulfill university requirements.
- To facilitate the delivery of material to meet requirements of user departments (when so requested).
- To handle complaints, claims, and adjustments and to negotiate for the return of material or arrange for other settlements.
- To conduct all correspondence with suppliers regarding quotations and purchase orders.
- To develop standard specifications for commonly used materials and supplies and to ensure that specifications are written to support the university's policy of open and competitive bidding.
- To consolidate purchases whenever possible to obtain discounts for volume purchases and to enter into requirements contracts with vendors for more favorable prices.
- To dispose of all materials declared surplus or obsolete by department heads or others in authority.
- To operate, when applicable, the Office Supply stores and the Equipment Repair Service section.
- To furnish, upon request, prices or cost estimates of materials and supplies to departments.
Departments that seek purchasing authority should submit a written request to the purchasing department on FORM PD-2 (see below). Chief purchasing officers must obtain the approval of the campus or unit chief business officer prior to the final delegation of purchasing functions.
- Chief purchasing officers may delegate purchasing authority to certain departments in specific cases involving routine procurement, subject to standardization of procedure. Such departments must follow the purchasing guidelines developed for each department, assume full responsibility for making awards to the qualified and responsible low bidder, and handle purchasing transactions in accordance with this policy. Such authority may be withdrawn at any time.
- Justification. The following conditions may justify the delegation of purchasing functions:
- An unstable market makes establishing firm contract prices impossible.
- Purchased items are for resale at a profit.
- Purchased items are perishable.
- Purchased items are proprietary.
- Normal purchasing procedures cannot ensure adequate timeliness.
- Guidelines. Before delegation is granted, the guidelines developed for each department must include:
- Specific functions granted, i.e., right to request quotations, tabulate and evaluate bids, make awards
- Specific items or types of items to be purchased
- Methods of taking bids (sealed or telephone bids)
- Number of bids required
- Dollar limits
- Approval of Qualified Bidders Lists
- Reports required by purchasing department
- Review authority of purchasing department
- Special considerationsThe purchasing department must ensure that the departments are aware of the standards and guidelines developed by the purchasing department and operate within the scope and limits of the delegated authority.
- Justification. The following conditions may justify the delegation of purchasing functions:
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Samantha Johnson (865) 974-3311 email@example.com