Purchasing Policy

The Purchasing Policy is part of the standard Fiscal Policies of the University.  Listed below are those policies which are specific to Purchasing:

7.3 Purchasing Policy

7.3.1       General Purpose

The Purchasing Department of Chapman University System is a service department created to provide centralized control over the procurement activities of the University. Our goal is to provide efficient and effective services in a timely and courteous manner. Services performed by our staff include:

Procurement of supplies, equipment, and services for the faculty administrative staff, and all operation departments of the University at the time needed and as economically as possible consistent with desired quality.  

1.)    -Establishment of standards of equipment and materials of common use at the University.

2.)    -Implementation of volume buying by consolidating items used by different departments.  

3.)    -Maintenance of a consistent and fair policy toward the business community which provides for the University's needs.

4.)    -Provision of special, personalized assistance to faculty and staff members when needed in the area of procurement.

It is the responsibility of the Purchasing Department to convert department requests (requisitions) into Purchase Orders. A Purchase Order issued by the Purchasing Department is the only authority for a vendor to perform a service or deliver merchandise to the University. Staff and faculty are not authorized to issue Purchase Orders. Only the Purchasing Department is authorized to issue Purchase Orders.

7.3.2       Purchasing Procedures

                                                                                                Chart 1:  “Purchases of Higher Dollar Amounts”

“Sole Sources” exist when a single seller controls the supply of products or services in a defined market.  These situations are usually the product of market conditions such as technology leadership, patent protection, limited/exclusive franchise distributorships, mergers and acquisitions, etc.

“Single Source” selections are usually driven by objective business decisions; such as leveraged volume purchase contracts, standardization programs/systems, parts/service provided by an “original equipment manufacturer”, consistency of quality/batch control, “just in time” delivery requirements, etc.  “Single Source” selection based purely on personal preference or subjective rationale will not be sanctioned.

When you request a “Sole Source” justification, consider the following:

                Reasonable Price

Even though there may be good reason for a “Sole Source”, we enter into a purchase contract only after determining that we will be paying reasonable prices.  Documented price comparisons, discounts off published price lists, buyer’s knowledge of market, Fair Trade laws and other cost-price analyses determine if the price is reasonable.

                Brand or Trade names

When you believe that only a specific brand, trade name, item or proprietary service will properly satisfy your requirements, include a description of the technical features that make that product or service the only one that fulfill your needs.

Extenuating Circumstances

When the prime-sponsoring agency or governing law directs the purchase, or when unusual or compelling urgency for acquiring the goods or services precludes obtaining formal competition, the purchase may qualify for sole source justification.

Price Certification

If there is no competitive or comparative evidence to demonstrate that a price is reasonable, the vendor should be asked to certify in writing that the quoted price is the best price offered to any educational or non-profit customer of a similar business volume.  If the vendor is willing to provide this certification, it creates a legal liability for the vendor and is sufficient price justification.

7.3.2.1    Purchasing Requisitions and Vendor Selection

A Purchasing Requisition must be issued to a qualified vendor.  If the vendor is not currently in the vendor database then a W-9 form must be submitted to the Purchasing Dept.  When using federal grant funds, it is important to know if a potential vendor has been debarred or suspended from doing business with the federal government.

Each vendor should be looked up on the Excluded Parties List System (https://www.epls.gov/) advance, to see if a potential supplier has been suspended or debarred.  This check may help prevent delays in the procurement process.  No purchase order can be issued to a vendor that is not set up in the vendor database.

The Purchasing Department is available to assist in planning all future expenditures with regard to department requirements.  All departments are encouraged to recommend vendors that have proven to be competent and qualified based on prior performance to the University.  However, it is the responsibility of the Purchasing Department to obtain competitive bids and issue the Purchase Order to the best qualified vendor based on all factors with regard to the purchase.

Whenever goods or services need to be ordered by a department for which a vendor will issue an invoice, a Purchase Order must be issued by the Purchasing Department.  For a department to request a Purchase Order, an electronic Purchasing Requisition must be entered into the purchasing system either by the requestor or by the purchasing staff.    Requests for pricing, bids and analysis of responses should be done by the purchasing department in conjunction with, the department’s requestor.  These documents can be attached to an electronic Purchasing Requisition.  The Purchasing Requisition must include the department/account information and all the appropriate authorization approvals before an order can be placed with the vendor.

As described in the Disbursement Policy (Section 7.1.4.3), the following transactions do not require a Purchase Order; a Check Request form should be used for:

1.)    Memberships & Subscriptions

2.)    Conference Registration Fees

3.)    Honorariums (see NRA Disbursement Section 7.1.2.5)

7.3.2.2 Standard Purchase Orders / Blanket Purchase Orders

A Purchase Order is issued once a Purchasing Requisition has been fully approved. A fully approved Purchasing Requisition has gone completely through workflow and has received all the required approvals. The Purchase Order will be faxed, e-mailed or mailed directly to the vendor by the Purchasing staff. If a department wants to place the order with the vendor special instructions need to be written in the “Notes” section of the Purchasing Requisition. Any order that is to be picked up must indicate "Will Call" on it. For “will call” orders a copy of the Purchase Order will be provided to the department which can be taken to the vendor. Departments may not order items from a vendor without a Purchase Order. The vendor must indicate the Purchase Order number on the invoice.

Vendors will be instructed to send invoices directly to the Accounts Payable department for processing of payment.

After the Purchase Order items have been received and inspected by the department, the requestor must access the Receiving Screen and indicate that the order has been received. Accounts Payable will not pay an invoice without the order being received in the purchasing system. If there are any discrepancies between the invoice and the Purchase Order, the Purchasing Dept or the requesting department will be notified to resolve all problems PRIOR to the invoice being paid.

Vendor Discounts

The Purchasing Dept will negotiate with the vendor to obtain discount pricing. Some vendors do offer discounts that must be reflected on each purchase order. The Purchasing Dept will make sure that all allowable discounts are taken and reflected on each order.

Blanket Purchase Orders

Blanket Purchase Orders will be issued to some vendors. Prior to the Blanket Purchase Order being issued, the Purchasing Department will evaluate the need for a Blanket Purchase Order and which vendor will be used. Generally, a Blanket Purchase Order may be required because a vendor will be issuing multiple invoices for the following:

·         Frequent re-orders within a certain dept.

·         Contracted services

·         Rents

·         Equipment Leases 

Any department requesting a Blanket Purchase Order must be specific as to the exact services to be rendered or specific items that will be re-ordered.  Once the Blanket Purchase Order is issued all invoices from the vendor must reference the Blanket Purchase Order number.   All invoices that reference a Blanket Purchase Order must be approved by the department before payment can be made.  The final determination of whether or not a Blanket Purchase Order should be issued is made by the Purchasing Department.

Purchasing Adjustments

The Purchasing Dept should be contacted if there are any adjustments to an order.  Any changes to a Purchase Order after it is issued can only be done by the Purchasing Dept. 

Returns Saleable / Returns Damaged

Most vendors require a Return Authorization be given before any returns can be made. The Purchasing Dept staff is available to assist with the process of returning goods that are in saleable condition. The Purchasing Dept must be notified immediately if any goods are received in damaged condition. The Purchasing Dept will also track returns to verify that credit is issued or a refund is given by the vendor to the University.

7.3.2.3    Contracts, Leases and Official Agreements

All contracts and lease agreements must be reviewed by Legal Affairs before they are submitted to the Executive Vice President/Chief Operations Officer.

All contracts, leases or official agreements committing Chapman University System to an action or monetary obligation must be signed by the Executive Vice President / Chief Operating Officer.

A written contract amendment signed by the university and the respective vendor is required when changes are proposed in a contract as originally approved.  No verbal amendments to contracts are permitted.  Vendor contracts shall include a provision requiring any amendment to be in writing and signed by authorized representatives of the parties.

Examples of contract amendments include: extension of contract beyond original expiration date, revised services to be received, increases or decreases to contract costs, increases or decreases in commission rates, changes in other financial reimbursements to Chapman University and any other changes to the original contract.  Contracts shall be extended by written amendment for no more than a total period of three years unless otherwise approved by the Executive Vice President/Chief Operating Officer.   

All contract amendments must be reviewed by Legal Affairs.  If modifications are necessary, the amendment will be returned to the originating department.   If there are no modifications, Legal Affairs will forward the amendment to the Executive Vice President/Chief Operating Officer for approval and signature.
 
7.3.2.4   Exceptions to Purchase Order procedures:

Sodexho special events - see Disbursement Policy (Section 7.1.2.11)

OFFICE SUPPLIES - Chapman Campus - all office supplies should be requested on the Office Supplies order form available on the Purchasing Dept web site. Each order is reviewed and placed with the vendor by the Purchasing Dept.

Brandman Campus sites - Office supplies should be requested on the Chapman University System Office Supplies Order Form. Each form must be submitted to Purchasing Dept., for processing.

Once orders are placed with the vendor for Chapman University and Brandman Campus locations, printouts from the vendor's ordering system reflecting exact pricing information will be sent to departments.  To notify the Purchasing Department that merchandise has been delivered, the packing slips from every box should be signed and returned.

7.3.2.5 Code of Ethics

Chapman University System requires that its employees adhere to the principles and standards of the National Association of Educational Buyers Code of Ethics which are listed below:

1.     Give first consideration to the objectives and policies of the institution.

2.     Strive to obtain the maximum value for each dollar of expenditure.

3.     Decline personal gifts or gratuities.

4.     Grant all competitive offers equal consideration insofar as the established policies of the institution permit, and regard each transaction on its own merit.

5.     Conduct business with potential and current suppliers in an atmosphere of mutual confidence and integrity, void of intentional misrepresentation.

6.     Demand honesty in sales representation whether offered through the medium of a verbal or written statement, an advertisement, or a sample of the product.

7.     Use only by consent, original ideas and designs devised by one vendor for competitive purchasing purpose.

8.     Be willing to submit any major controversies to arbitration or other third party review, insofar as the established policies of the institution permit.

9.     Accord a prompt and courteous reception insofar as conditions permit to all who call on legitimate business missions.

10.   Cooperate with trade and industrial associations, governmental and private agencies for the purposes of promoting and developing sound business methods.

11.   Foster fair, ethical and legal trade practice.

12.  Counsel and cooperate with NAEB members and promote a spirit of unity among them.