A. Insure effective competition and bottom-line savings where appropriate.
B. Establish thresholds for initiating competition, formal solicitation, appropriate signature levels of buyers and those holding procurement cards.
C. Establish authority for those authorized to purchase.
D. Establish standard terms and conditions for contracting goods and services. Obtain approval from University Legal Counsel for any agreement not on pre-approved standard terms and conditions.
E. Establish a list of restrictive or prohibited goods/services.
F. Require availability of budget resources before encumbering University funds.
G. Utilize buying consortiums to leverage buying power.
H. Act affirmatively to conduct procurement activities with small business, minority owned businesses, and with woman owned businesses.
The use of the procurement card for purchases less than $5,000 is encouraged. Usage of the procurement card eliminates the need for a purchase order and decreased administrative processing.
When a purchase order is required…
A Purchase Requisition Form must be completed. (All information requested on form is necessary.)
The Price Justification sheet must be part of the Purchase Request
Authorized signatures for approval must be present.
Purchase requisitions totaling under $5,000.00 will be processed without further stipulations.
Purchases $5,000 – 10,000
Purchase requisitions totaling $5,000.00 or more must be accompanied by a “Price Justification Form.”
The “Price Justification Form” is found
on website under forms
- Check “Competition” if three or more quotes have been obtained from three or more vendors. Please attach the quotations.
- Check “Historical Pricing” if purchase has been made in the past with little or no price difference.
- Check “Market Survey Performed” if list pricing has been checked through at least three different sources via the internet, catalog, email ads, etc.
- Check “Source is Preferred Provider” if source is recognized by the procurement department as a preferred provider. A “preferred provider” is selected by the procurement department through a competition process. A listing of these providers can be found on procurement’s website.
- Check “Source if from a SMU Buying Consortium” if source is a member of one of the following buying consortiums.
- E and I Cooperative Purchasing
- Horizon Resource Group
- US Communities
*Pricing from sources that are members of the above groups have already been competed and determined fair and reasonable.
- Check “Value Analysis Performed” if an expert in the field relating to the purchase has been consulted and agrees that the pricing is fair and reasonable.
- Check “Other” if there is another reason other than the above why requestor feels pricing is fair and reasonable. Then use the lines provided to explain. ** Note ** the “other” category is often questioned by the procurement department.
- "Other" may also be checked for those cases in which requestor wish the purchasing department to determine fair and reasonable pricing.
Purchases $10,000 – 25,000
Section 2 of the price justification form must be filled out for orders that are in the range of $10,000.00-$25,000.00.
Check “Three bids are
attached” if indeed at least three bids are attached.
Check “Purchasing to
Perform the Competition” if requestor would like purchasing to obtain the
three bids. Purchasing will keep requestor informed on any new information
Requestor may also select
“Preferred Provider” or “Buying Consortium” within this dollar range.
Check “Other” if there is
another reason other than the above why requestor feels pricing is fair and
reasonable. Then use the lines provided to explain. ** Note ** the “other”
category is often questioned by the procurement department.
Check “Sole Source
Statement” when purchase is very critical or unique to the capabilities of the
requested vendor/firm. Use lines provided to explain why full and open
competition is not possible, how purchaser will be impacted if item is not
procured from selected source, and why price is fair and reasonable.
Section 3 of the price justification form must be filled out for orders that are over $25,000.00
Purchasing may wish to
issue a RFI (request for information), RFP (request for proposal), RFQ
(request for quotation), or an oral solicitation for orders reaching this
dollar amount. So a Statement of Work or Purchase requirements/specifications
WILL need to be attached. This attachment should explain in great
detail every aspect of the purchase.
Requestor may also select “Preferred Provider” or “Buying Consortium” within
this dollar range.
Check “Other” if there is another reason
other than the above why requestor feels pricing is fair and reasonable. Then
use the lines provided to explain. ** Note ** the “other” category is often
questioned by the procurement department.
Check “Sole Source Statement” when
purchase is very critical or unique to the capabilities of the vendor/firm. Use
lines provided to explain why full and open competition is not possible, how
purchaser will be impacted if item is not procured from selected source, and why
price is fair and reasonable.
A member of the Purchasing
Department will contact the requester at any time the purchase is not promptly
processed for any reason.
Purchasing Equipment or Supplies
Orders for equipment and/or supplies should be processed with standard purchasing procedures as long as there are no exceptions to the standard terms and conditions.
If there are exceptions,
the purchasing package must be sent to Legal counsel for review and approval.
Construction or Construction-Like Services
Orders for construction or construction-like services must be forwarded to CPPO.
Services may also be procured through the Purchasing Department. If SMU standard terms and conditions are not accepted or changes to them are requested the purchasing package must be forwarded to Legal Counsel for review and approval.
Two or more responsible offerors (suppliers & vendors), competing independently, submit priced offers that are responsive and satisfy our stated requirement(s). We can include consideration for best value procurements where price is a substantial factor. Competition is considered the best way to insure prices are good.
Another Definition: An environment of varying dimensions relating to buy-sell relationships in which the buyer induces, stimulates, or relies on conditions in the marketplace that cause independent sellers to contend confidently for the award of a contract.
Price history, usually the last price paid when we bought an item or service, is used to evaluate a current offer/price. You make the assumption that previous buys were analyzed and justified adequately so you may compare the current price proposed with the price previously accepted. If this is not the case then you need to analyze the basis of the previous pricing, perhaps there was a need to expedite the item or we had to buy in less than normal production quantities. In many cases we use a price index to analyze or track changes in prices received from the initial commercial purchasers of products.
This includes formal market surveys like request for quotes to informal market surveys that consist of reviewing pricing in a published catalog, reading a business publication like the Wall Street Journal which covers general market data, knowledge of trade & user associations that publish useful market indexes or journals, informal telephone quotes, or current knowledge gained form recent purchases of similar items or services that were open to the “market”.
Value Analysis/Visual Analysis
Knowledge of the product, its functions, and the use to which it is to be put is essential for value analysis. Use this technique for low priced items and you determine whether the product, as it is now constituted, is the best product in terms of value. Visual analysis is similar & is commonly called eyeballing, description your inspection of an item to come up with an estimate of its probable value. Both value & visual analysis are closely related and should flag unrealistically high prices for common items.
A listing of firms maintained by SMU Purchasing that includes a range of items like computer supplies, electrical supplies, florists, plumbing supplies, ground supplies, hotels, household goods movers, janitorial & custodial supplies, office supplies, paint supplies, paper, parking, pool supplies, ad specialty, & shipping. Any firm selected from this listing maintained at http://www.smu.edu/procurement/providers_commodity.asp will need no further competition. Any other firms not listed are not to be considered Preferred Providers.
SMU participates with five buying consortiums, E&I – Educational and Institutional Cooperative Service, Inc. (www.eandi.org -password required); Horizon Resource Group, (www.horizonrg.com -password required); TCPN – Texas Cooperative Purchasing Network, www.tcpn.org; U.S. Communities (http://uscommunities.org), and MiCTA (http://www.micta.org/). You will find a wide range of supplies and services available. Any firm selected from one of the five buying consortiums will need no further competition. Contact Terry Conner at x84909 for passwords.
A firm that is characterized as the one and only source available, regardless of the marketplace, possessing a unique and singularly available performance capability for the purpose of contract award. Documenting a sole source should include rationale that addresses criticality, uniqueness of the item/service or requisite capabilities required of the vendor/firm, why full & open competition is not possible, impact to your program or effort if the item is not procured form the requested source, and/or exigency.
Fairness & Reasonableness of Price
A price that is fair to both the buyer & seller, considering the agreed-upon conditions, promised quality, and timeliness of contract performance. Although generally a fair and reasonable price is a function of the law of supply and demand, there are statutory, regulatory and judgmental limits in the concept. Competition is the best way to make sure that the resulting contract price is not rigged in favor of either buyer or seller, and in fact, results from the impartial working of the marketplace.
10. Tax Exempt Certificate
The University’s state taxpayer number is labeled on each SMU pcard. The Cardholder must give this number to all suppliers at the time of any transaction to exempt payment from sales tax. In the event sales tax is billed to the Cardholder’s account the Cardholder, within thirty days of the transaction, must rectify directly with the supplier or dispute the charge on paymentnet. The Cardholder may obtain the Tax Exempt Certificate from the SMU Purchasing & Accounts Payable websites to provide to a merchant when appropriate. Small credit card exemption certificates are available from the Purchasing office. SMU is exempt from Texas State & Local Sales Tax & each employee is therefore responsible for making the vendor aware of this exemption. Should Sales Tax be paid, it is the personal responsibility of the SMU employee to recover the taxes. Continued incorrect payment of Texas State & Local Sales Tax will result in suspension & eventual cancellation of the pcard. New Mexico Gross Receipts Tax (NMGRT) is not to be paid when purchasing office supplies for the Taos campus.
Find the current tax exempt
http://smu.edu/purchasing/forms/forms.asp and then select Texas Sales Tax Exemption
Signature authority is subject to the following conditions:
Funding must be available.
Obtain approval form University
Legal Counsel for any agreement not on a standard approved document or for any
deviation in the standard terms and conditions of purchase.
Contacts are not awarded to contractors
that the University considers Suspended, Ineligible or Excluded.
Signature Authorities, Dollar Limit and Term
*Signature authorities are predicated upon there being no exceptions to the terms and conditions from our standard SMU contract formats.
Procurement Card Signature Authority
SMU employees may purchase up to a maximum of $5,000 per transaction, $25,000 per month via a procurement card. Exceptions require additional review and approval.
Procurements or other commitments made by unauthorized personnel are not legal and binding upon the University and may result in a personal obligation for the individual making the procurement or commitment. In such a situation, the University could simply refuse to pay the supplier, and the supplier could seek payment from the unauthorized person. However, as a standard policy, the Director of Procurement will:
Inform the requester of the proper
procedures for initiating a purchase request and processing a procurement
Request a purchase request and a written explanation by the individual making the commitment and written approval from the appropriate Vice President.
University employees who commit an unauthorized purchase or use their Procurement Card in an inappropriate manner will be subject to disciplinary action including possible card cancellation, termination of employment at Southern Methodist University and/or criminal prosecution.
The Director of Purchasing
shall approve any unusual transaction at any dollar level if the procurement
will be awarded to a firm that did not submit the lowest overall cost
SMU Policy on
the Procurement of Supplies and Services.
Procurement of supplies and services is covered in SMU Policy Guidelines found at www.smu.edu/policy. Specific attention is directed to the following:
1.10 Limitation on Use of University Funds
1.19 Contracts and Commitments
3.2 Petty Cash Procedures
3.10 Entertainment Management Policy
7.4 Sponsored Research Procurement
13.2 Membership Fees and Dues