Procurement Services Policies and Reconfiguration

Policy Name: Procurement Services Policies and Reconfiguration
Policy Number: 03-02-001
Version Effective Date: January 1, 2012
Last reviewed on: January 1, 2019
Policy Applies To: University Wide
Responsible Office: Business Services

INTRODUCTION AND STATEMENT OF PURPOSE
New �鶹��ý City University's ("�鶹��ý") Procurement Services Department, (Purchasing & Accounts Payable), is charged with the responsibility of ordering all supplies, equipment and services necessary for the operation of �鶹��ý. The process starts with the user department and ends with accounts payable. Procurement Services is responsible for monitoring all purchases for compliance with applicable regulations and for paying �鶹��ý's bills.

The Procurement Services Department is committed to meeting the needs of �鶹��ý and its departments and to ensure that state laws and University regulations are followed. Laws regarding the use of public funds are very specific, so it is important that University procedures be carefully followed. All expenditures must be prudent and directly benefit �鶹��ý. �鶹��ý will assume no liability for the payment of purchases that were not made through the approved Procurement Services purchasing procedures.

This policy is intended to be the official method to assist all University employees in understanding �鶹��ý's procurement process. It has also been developed in accordance with New �鶹��ý State statutes and University polices. As a public institution, we are required to follow these regulations in the conduct of our day-to-day business.

PURPOSE
To establish �鶹��ý's policies regarding the procurement and payment for goods and services.

POLICY
Scope
This policy applies to all faculty and staff and uniformly to all funds administered by �鶹��ý such as departmental budgets, capital funds and restricted accounts including federal, state, and local grants, contracts and specially funded programs.

Policy
The Procurement Services Department is responsible for making the final determination of source and supply of goods and services. These decisions will be made in conjunction with the department's user, as appropriate. The Procurement Services Department serves as the exclusive channel through which all bids and quotations are handled. University departments may correspond with suppliers in cases where informal prices are needed or where technical details are necessary. In such cases, proper communication and coordination with the Procurement Services Department is required prior to committing to such purchases.

�鶹��ý's procurement policy is intended to be consistent with Generally Accepted Accounting Principals (GAAP), which provides guidelines for the timing and reporting of transactions at the time it occurs. The Purchasing Department is also obligated to follow the guidelines of the laws of the State of New �鶹��ý relating to Executive Order #134, the Procurement Reform Restrictions on Political Contributions and the Business Registration Certificate for all vendors.

�鶹��ý's Accounts Payable Department is responsible for processing all non-payroll payments including purchase order invoices, special handling requests and employee travel reimbursements in a timely and efficient manner while maintaining �鶹��ý's policies and procedures.

It is �鶹��ý departments' responsibility to ensure that each transaction is classified as an allowable
expenditure on a specific account and that funds are available accordingly.

New �鶹��ý Executive Order #134
Executive Order #134 imposes restrictions on State departments, agencies and authorities to insulate the negotiation and award of State contracts from political contributions that pose the risk of improper influence, purchase of access or the appearance thereof. State departments, agencies and authorities are prohibited from entering into a contract that exceeds $17,500 with an individual or entity that has made a political contribution to a candidate committee and/or election fund of any candidate or holder of the public office of Governor, or to any State or County political party committee. Executive Order #134 certification and disclosure forms are required to be submitted by a vendor as part of the procedure for publicly advertised bids.

Business Registration Certificate
All New �鶹��ý and out of State business organizations that conduct business with �鶹��ý are required to be registered with the State and provide proof of that registration before entering into a contract with �鶹��ý. The purpose of contractor registration is to ensure that all businesses and their subsidiaries receiving government contracts pay appropriate sales and use, and other taxes. While sales and use taxes are not paid on government contracts, the requirement to register to obtain government contracts obligates them to comply with the law on non-government contracts.

Businesses, particularly out-of-state businesses, competing with New �鶹��ý based businesses often do not pay the required taxes. Thus, unregistered businesses take unfair advantage of New �鶹��ý businesses and deprive the State of its rightfully due taxes. Business Registration Certificates are required to be submitted by a vendor as part of the procedure for publicly advertised bids. Failure to submit such valid business registration certificate with a bid will render the bid materially non-responsive. The Purchasing Department will update �鶹��ý community periodically as changes in the New �鶹��ý law are enacted.

For further information on Business Registration Certificate visit the website:
state.nj.us/treasury/revenue/busregcert.htm.

E-Procurement
�鶹��ý's Purchasing and Accounts Payable Departments have implemented the PeopleSoft E-Procurement module. Departmental requesters will use the online requisition functionality in the PeopleSoft E-Procurement module to initiate a request for purchase. The identification of where the expense should be charged will be done on the requisition and will carry forward automatically through the Purchase Order (PO) then to the Voucher (vendor payment). Online workflow approval and receiving processes replace the manual signature approval.

There are five levels of approval depending on the criteria:

Department Approval – This is the minimum approval required for all requisitions.
Project Approval – This approval is required if the requisition is contains a project or grant number.
Category Approval – This approval is required if the requisition contains items belonging to equipment, chemicals, and/or facilities categories.
Manager Approval – This approval is required prior to Vice President approval if the requisition amount is greater than $500 or $999 (Depending on managers' preference).
Vice President – This approval is required if the requisition amount is greater than $1,000.

The requisition does not get routed to the next approval level until its predecessor is approved. Once the requisition is fully approved, it will be routed to Purchasing to generate a purchase order, which is the official authorization to purchase goods or services. The requestor/user is responsible for monitoring their requisitions and knowing when a purchase order has been generated and purchase authorized.

Vendors are required to send invoices directly to the Accounts Payable department for processing. Authorization to pay is confirmed via online receiving and acceptance of the goods or services by the departments. Accounts Payable will enter the invoices from the vendors, as vouchers, into the PeopleSoft payables system in the order they are received. PeopleSoft will match vouchers to the purchase order and receipts. Any exceptions to the matching process (quantity or price variances) over predefined tolerances are routed to purchasing or the departments for resolution. Once the vouchers are successfully matched, the PeopleSoft system will generate payments when due based on payment terms and invoice dates. The user/requestor is responsible for monitoring the life cycle of their requisitions. For further information please see the EPRO Training Manual at njcu.edu/dept/controller/index.html#purchasing.

Commitment Control
Commitment Control is a delivered system functionality that allows for budgeting controls. It is a module within the PeopleSoft Financial System which can track and potentially control expenditures and purchasing. The purpose of this is to prevent overspending of a set budget for non-salary operating expenses. If an amount is requisitioned which causes the non-salary budget portion of the budget of the department budget to be exceeded, a budget error message will be generated if the department cannot resolve the issue, contact the Budget Office for assistance and to determine the cause of the over-expenditure. If there are insufficient funds in the account, the department head must consult with the Dean/Vice President to determine if additional funds are available.

Purchase Requisitions
All requisitions are initiated by authorized personnel from departments requiring goods and/or services. In most cases goods are tangible items (eg. shirts, equipment, books, etc) that can be received on line individually and are entered by quantity. Services are non-tangible items and are usually received by amount only. (eg. consulting, repairs, etc.)

General Information

An internal requisition via E-Procurement or manual requisition is considered an "in-house" document only. Requisitions should not be faxed, mailed or given out to vendors.
University departments that make purchases without the Purchasing Department issuing a Purchase Order are committing to a personal financial obligation to the vendor for which he/she may be held responsible.
Some items requisitioned may be on State contract or may need to go out to bid (See page 8 on Bid Procedures).
All requests for supplies, equipment and services may be combined for "group" buying if other departments have requested the same class of items or commodities. On occasion this can also result in a bid process from the Purchasing Department before a Purchase Order can be assigned and issued.
All requisitions over $30,700 will require the competitive, publicly advertised bid process unless on a State contract. Purchasing will make the determination and manage the bid process. Contact the Purchasing Department before submitting an on-line requisition if this applies (See page 8 on Bid Procedures).
Confirming or "after the fact" requisitions are not allowed. Any employee that orders and/or purchases goods or services without obtaining proper authority and approval signatures prior to the purchase (an internal purchase requisition is completed and the purchase order issued), may be accountable for the cost of the goods/services.

Purchasing Methods
Purchase Order
A purchase order is defined as a contract between �鶹��ý and a vendor for goods and/or services. The primary purchasing tool is the PeopleSoft Financials system which utilizes the use of E-Procurement with on-line requisitions. Using a purchase order to initiate every purchase provides the means to insure that each transaction is covered by a proper contract and that the funds are encumbered. A contract details commodities, prices, and terms and conditions specifying each party's rights and obligations. Generally, a contract's terms and conditions specifying each party's rights and responsibilities are questioned only when a dispute arises. However, as the dollar amount of a transaction rises or the level of risk in the activity (such as potential for injury) increases, so does the likelihood for major disputes and, therefore, the need for written contracts.

The dollar amount and the type of purchase and/or commodity being acquired is the basis for determining the correct purchasing procedure. These procedures, using sound business practices, provide the basis for prudent purchasing at any dollar value.

A purchase order must be issued at the time �鶹��ý incurs a liability for any type of good or service.

Types of Purchase Orders

Purchase Order - A purchase order is created from information contained in the approved on-line requisition. The purchase order is used by the vendor for authorization, to identify the purchase and is listed on shipping documents and invoices. In case of an emergency, please contact the Purchasing Department at 201-200-3159 to determine the best possible method of procuring goods and/or services.
Blanket Purchase Orders - When departments are faced with numerous repetitive orders for miscellaneous requirements to a single vendor, or when departments have a requirement for a known quantity of an item or items to be delivered over a period of time, a Blanket Purchase Order may be issued. This type of purchase order is used for small commodity-type purchases or services that are recurring. It does not require a specific listing of material desired, but instead stipulates a maximum amount of money for purchases of specified groups of supplies or services or maximum amount per invoice. Equipment purchases are not allowed and blanket orders cannot be used for items requiring quotes or bids. A blanket purchase order must be requested on line and a purchase order issued before any purchase can be made. The total cumulative purchase cannot exceed the blanket purchase order amount or it will not be paid. If a blanket purchase order needs to be increased, a new requisition specifying the original purchase order must be submitted through the approval process. Blanket purchase orders are based on the current fiscal year and will be closed at the end of each fiscal year.

E-Commerce
Business-to-Business (B2B) relationships have been, and are continuing to be established with select high-volume vendors in an effort to facilitate the ordering, invoicing and payment processes for the departmental user, the vendor and �鶹��ý. Currently �鶹��ý's main (B2B) vendor is OfficeMax for office supplies. In the up coming year, other (B2B) vendors will be added.

Contract and Direct Vendors
Direct Contracts have been established with GOURMET DINING for food services and BibliU, Inc. for the bookstore. You may request goods and services directly with these vendors. A process has been implemented with these particular vendors whereby authorized personnel can request and sign a work order form for goods or services from either vendor which streamline the normal E-Procurement process. Upon approval of purchases, GOURMET DINING and BibliU, Inc. will submit their billings to accounts payable on a monthly basis for payment. See Exhibit C Magazine subscriptions are currently available through EBSCO Subscription Services and are renewed on an annual basis. Please notify the purchasing department of any changes or additions. Do not submit subscription renewal and payments directly to the vendor unless otherwise notified by purchasing.

Purchasing Cards
Departmental credit cards are to be used to purchase goods/services with a dollar value under $500 and in instances where either the transaction is for a one-time/exceptional purchase, the vendor does not accept purchase orders, or credit cards are the industry standard payment. The departments are responsible for all receipts and paperwork regarding the transactions and are subject to periodic audits.

See the P-Card Policy at: njcu.edu/dept/controller/index.html#purchasing for further details. Procurement Services has been issued PCards for approved purchases as needed with different limits.

Miscellaneous Reimbursements
Miscellaneous reimbursements typically occur when it is necessary to reimburse for approved
departmental expenses when a purchase order, e-commerce vendor or a departmental credit card could not be used. These types of reimbursements follow the guidelines of Travel Reimbursements and Special Handling Requisitions.

Travel Reimbursements
Reimbursements for all related travel expenses such as:

Registration fees, conference fees, and membership dues;
Business meals outside of the office; and
Out-of-town travel expenses.

See the Travel Reimbursement Policy at: njcu.edu/dept/controller/Accounts_Payable.html#travel.

Special Handling Requisitions
Allowable items to be submitted through Special Handling in PeopleSoft form consist of the following:

Honoraria for speakers
Payments to individuals for participation in music, dance, theatre production, off duty police, etc.
Payments to employees must be directed to Human Resources for processing; Conferences (if �鶹��ý Purchasing Card is not available);
Registration Fees (if �鶹��ý Purchasing Card is not available);
Membership Fees (if �鶹��ý Purchasing Card is not available); and Permits.

All purchases through Special Handling in PeopleSoft need to be completed via a purchase requisition prior to any commitment made to the vendor. If the respective purchase satisfies any of the above categories, please submit a Special Handling requisition through PeopleSoft:

Special Handling forms are required to be completed in their entirety.
All expenses must be supported by detailed or itemized receipts.
Original invoices must be obtained, vendor "statements" are not proper documentation.
Business purpose must be documented on the Special Handling [please attach evidence supporting the business purpose (eg. meeting agenda)]
All approvals follow the standard approval workflow in PeopleSoft.
NJ State regulations prohibit reimbursement of alcohol related expenses, flowers (sentiment and/or condolence intended), contributions, gifts, tickets for events, and meals (not incurred during a business related occasion).

Purchase Order Cancellation and Change
Order Requests
Any request to modify or cancel an order should be directed to the Purchasing Department in writing via email or interoffice with the vendor name, purchase order number and the reason for the cancellation or change. The Purchasing Department will then act in the best interest of �鶹��ý and advises all parties accordingly. Please note that a purchase order is a binding contract between �鶹��ý and the vendor and therefore it cannot be modified or cancelled unilaterally.

Pre-Payments
The general rule for payment of requisitioned goods and services is to pay after the receipt of the item(s) or service(s). In some situations where a pre-payment may be required, attach documentation from the vendor to a purchase or special handling requisition, as applicable, with justification and forward accordingly. It is the end users responsibility to be aware of duplicate requests for payment. The Purchasing and Accounts Payable Department are available for assistance in researching requests.

Merchandise Returns and Repairs
Merchandise to be returned or repaired to a vendor for adjustment or credit should be cleared through the Purchasing Department. The Purchasing Department will work with the requisitioning department and the vendor to make arrangements for the return. In some cases, if the vendor is not at fault for sending the incorrect merchandise, they may charge a restocking fee.

Unauthorized Purchases
The Purchasing Department has the authority to obligate �鶹��ý for the purchase of goods and services. Any purchases made outside this policy will become the sole liability of the individual making the purchases.

Copiers (Multi-Function Devices)
�鶹��ý's fleet copiers are currently under warranty and maintenance agreement with Stewart Industries. All toner and parts are included, except for staples which must go through the purchase order process. You should contact Stewart Industries in case of any copier repairs and toner needs. (For service call 800-583-4996, for supplies call 800-322-5584)

Items Ordered on a "Preview" or "Trial Basis"
An internal purchase requisition must be completed and sent to Purchasing for all items that are ordered on a "trial basis" or are ordered for "review". Please indicate in comments that the item is a demo. At the end of the "trial period" it is the user department's responsibility to notify Purchasing of the decision to keep or return the items. It is customary for vendors to bill for the merchandise automatically after the trial period; therefore timely notification is required.

Bid Procedures
�鶹��ý Purchasing department will determine when competitive bids for goods and services are required in accordance with New �鶹��ý State College Contract Law.

All purchases, exceeding $2,500 but less than $30,700 will be awarded using the competitive bidding procedures. We need to obtain at least three competitive bids (quotes) as dictated by the dollar amount. Please contact the Purchasing Department for assistance.

Purchases over $30,700 (effective July 1, 2011)
The Purchasing Department may solicit bids and place orders for goods and services based upon the requirements of University departments. A supplier cannot be used by �鶹��ý once the threshold amount of $30,700 is reached. The bid threshold is cumulative for each supplier during each fiscal year.

The exceptions to bidding thresholds are as follows:

The �鶹��ý Board of Trustees enacts a resolution at a public meeting under the "waiver" guidelines of the New �鶹��ý State College Contract Law.
When an emergency affecting the health, safety or welfare of University occupants or property requires the immediate delivery of materials or supplies or the performance of work, please contact the Purchasing Department at 201-200-3159.
The State of New �鶹��ý Purchase Bureau establishes contracts for goods and services for qualified suppliers. The list of state contract suppliers can also be accessed via the internet at or in �鶹��ý Purchasing Department. You must make sure that the goods and/or services supplied under state contract are the exact good and/or services required.
The same vendor can be used on a "project basis" providing that each separate project is distinct and falls below the prevailing State threshold. The work and/or services can not be in connection with the same project or furnishings of similar materials or supplies during the same fiscal year.
The Purchasing Department will review and approve accordingly.
The use of the Federal Supply Schedules of the General Services Administration as in federal and government contracted vendors. Information pertaining to this material is available in them Purchasing Department.

Procedures for Publicly Advertised Bids

A formal request (Request to Bid, Form PUR-001 available in the Purchasing Department) from a user department must be approved by the Department Chair, Dean and Vice President and submitted to the Purchasing Department in order to initiate the bid process.
The basis of all bidding is the development of specifications and plans, as it becomes the standard by which bidders determine their prices and response. The Purchasing Department issues bid specifications and plans which permit fair and equitable bids/proposals from qualified suppliers.
When any request for a bid is prepared, there are certain drafting prohibitions such as:
- No specifications may require a standard, restriction, condition or limitation not directly related to the purpose, function, or activity for which the purchase, contract or agreement is made;
- No specifications may require the use of any "brand name" unless the phrase "or approved equal" is inserted in the specifications. This shall allow vendors to bid on substitute or equivalent goods and services which may be just as good as originally specified and may cost less.
  
  If alternates are not acceptable, the user department must give written justification for each alternate rejected. If requested, the written justification is retained in the bid file and shall be open to the public for review.
Once the specifications have been determined, formal bids can then be prepared and sent to vendors.
Bids in excess of $30,700, must be advertised and published in a legal newspaper sufficiently in advance of the date fixed for receiving the bids to promote competitive bidding, but in no event less than 10 days prior to the bid opening. The invitation for bids sets forth the basic requirements of the bid:
- The title of the bid and the bid number;
- The location that the bid will be received;
- The time and date of the bid opening; and
- The requirement for the bid to be sealed.
Bids are received in the Purchasing Department on the date and time specified and thereafter is unsealed and the contents publicly announced in the presence of any parties bidding or their agents who are present. A proper record of the prices and terms are made. No bids shall be received after the time designated in the advertisement.
�鶹��ý shall award the contract or reject all bids within such time as may be specified in the specifications or other documents issued to all bidders, but in no case more than 60 days, except the bids of any bidders who consent to a change either before or after the 60 day period as agreed.
After the bid opening, the bid tabulation data is prepared by the Purchasing Department and forwarded to the requisitioner with copies of the bids. The Purchasing Department has a decision matrix available in the event that the bid specifications were not based solely on the lowest bid but based upon the most responsive and responsible bidder meeting all of the specifications and requirements including price.
The user department must either give a written decision to the Purchasing Department to accept or reject the lowest bid (if the lowest bid is the sole criteria) or a written decision to accept a bid/proposal based upon critical elements in the specifications and documents which comprise the bid.
The Purchasing Department shall review the decisions to determine if the user department is justified or if any additional information should be required. In the event of disagreement concerning the selection of a vendor, the final decision shall be made by the Vice President for Administration and Finance.
The Purchasing Department will send a letter(s) to the vendor(s) indicating that the bid was not accepted and will issue an award letter to the winning bidder. Providing the vendor(s) do not protest within a reasonable period of time, (approximately one week), a purchase order is then released. In cases where a vendor protests, then the Purchasing Department will need to escalate the situation accordingly. When the Director of Purchasing does not accept the justification for the rejection of a bid, the requisitioner will be advised if an agreement is reached or the transaction will be terminated.

Signature Authority
Individuals are identified in each of the departments with the authority to initiate requests for purchases of goods and services. The following dictates the total commitment/expenditure that each individual at the various levels at �鶹��ý is authorized to approve. These are the minimum guidelines that �鶹��ý must follow in order to purchase goods and services. Higher approval levels can be obtained as dictated by individual departmental policies.

Operating Expenses

Purchase Requisitions Chair, Director and/or Designee approval up to $500. Director, Dean and/or Designee approval over $500. Vice President and/or Desiginee approval over $1,000.
Transfer of Budget to Another Department Vice President of respective department and the Vice President of Administration and Finance

Office Supplies (OfficeMax) On-Line Purchases
All office supplies purchases are processed in PeopleSoft through Direct Connect. The standard approval process applies and is routed through workflow.

Purchasing Card Purchases
Individual transaction limit of $500 except Deans/Director and Associate Vice Presidents limit of
$1,000 and Vice Presidents limit of $1,000. Total monthly limit varies based on need. See Purchasing Card Policy at: njcu.edu/dept/controller/documents/pcard_documetns/pcard_poli....

Travel Requests
Overnight Travel - President
Local Travel - Dean/Director

Special Handling Requests
Same as Operating Expense

Capital Expenditures
Facilities Management
In budget - Same as Operating Expense

Information Technology
In budget - Same as Operating Expense

Environmental Safety
Same as Operating Expense

In addition all purchases must be reviewed by the Associate Vice President of Facilities and Construction Management.
In addition all purchases must be reviewed by the Director of Information Technology.
All hazardous chemicals purchases must be reviewed by the Director of Environmental Safety

Projects
Same as Operating Expense with Project Manager's approval

Grants
Same as Operating Expense operating with Grant Manager's approval
Contracts and Agreements