Buying Info

Purchasing Guidelines

1. Goals of an Effective Purchasing System
2. Purchases < $5,000
3. Purchases $5,000 – 10,000
4. Purchases $10,000 – 25,000
5. Purchases > $25,000
6. Purchasing Equipment or Supplies
7. Purchasing Construction or Construction-Like Services
8. Purchasing Services
9. Definitions for Price Justification Terms
10. Tax exempt Certificate
11. Signature Authorities
12. Procurement Card Signature Authority
13. Unauthorized Purchases
14. SMU Policy on Purchasing Supplies and Services
     

1. Goals of an Effective Purchasing System

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.

 2. Purchases <$5,000

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. 

3. 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
   

•  The top section must be completed
   
•  Section 1 must be filled out for orders that are in the range of $5,000-10,000.00.

- 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
• TCPN
• Horizon Resource Group
• MiCTA
• US Communities
• Provista
  *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.

4. 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 found.
   

• 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.
   

5. Purchases >$25,000

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.
 

6. 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.
 

7. Purchasing Construction or Construction-Like Services

Orders for construction or construction-like services must be forwarded to CPPO.
 

8. Purchasing Services

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.
 

9. Definitions for Price Justification Terms

10. Tax Exempt Certificate

Find the current tax exempt certificate at http://smu.edu/purchasing/forms/forms.asp and then select Texas Sales Tax Exemption Certificate.
 

11. Signature Authorities

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.
   

• Comply with all applicable policies and procedures and delegations of signature authority.

Signature Authorities, Dollar Limit and Term

• President, Authority to Execute all Business Documents & Deeds
   
• Vice President for Business & Finance, $500,000, 5 Years
   
• Associate Vice President & Information Technology Services (for Software License Agreements), $250,000, 3 Years
   
• Vice Presidents, 100,000, 3 Years
   
• Treasurer, 100,000, 3 Years
   
• Director of Purchasing, 350,000, 1 Year

*Signature authorities are predicated upon there being no exceptions to the terms and conditions from our standard SMU contract formats.
 

12. 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.
 

13. Unauthorized Purchases

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 action.
   

• 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
 

14. 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