Introduction to Procurement

1. Introduction to Procurement June 5, 2014

2. Background • Avg Cycle Time (PR to PO) – 2.56 days • PO Documents – 3,800 ~$44M Annual Spend + ~$1.6M Pcard! Purchase Order Value (FY12/13)

3. Background All of the content presented herein can be located at: http://www.bloomu.edu/purchasing Expenditure of Public Funds – Policy 2010-01-A • The spending of public funds must clearly and directly benefit the university in support of its mission • Expenditures of public funds may not inure to the private benefit of one or more individuals unless such expenditure is authorized by law • All expenditures of public funds must be prudent and economical Key compliance points: • Consistency • Adequate documentation supports: • There is no taxable benefit to the recipient • No private inurement (benefit) • Expenditure was incurred for the right reasons (advancement of university’s mission) • Approvals

4. Policy/Authority Commonwealth Acts/Policy/Procedures: • Title 62 Commonwealth Procurement Code (Act 57 of 1998) • BOG Policy 1998-04 A (Procurement of Goods, Services and Construction) • Manual for Preparing and Processing Contracts for Goods and Services – Office of Chief Counsel/Office of Univ. Legal Counsel Contracting Officer • Primary person delegated with contracting officer authority on behalf of the University, without financial limitations, is VP A&F. When absent, AVP A&F. • Director of Procurement and Operations has purchases and contract authority to $100K. • No other individual has contracting signatory authority on behalf of the University unless delegated in advance and in writing by the President! Fiscal Officer • Primary persons with delegated authority as "fiscal officer" to review contracts and agreements, and to sign disbursement authorizations on behalf of the University, without limitation are: AVP A&F or Assist. Dir., Budget and Finance. • No other individual has fiscal authority on behalf of the University unless delegated in advance and in writing by the President! Note – intentional segregation of duties to provide safeguards and oversight; mitigate potential risk.

5. Delegation of Authority

6. Solicitation/Contracting Methods

7. Solicitation/Contracting Methods Solicitations Publically Advertised http//www.ebidexchange.com/passhe http://emarketplace.state.pa.us/

8. Thresholds and Process - Materials

9. Thresholds and Process - Services

10. Thresholds and Process - Services

11. Exceptions to Competitive Bidding • The Commonwealth warehouse • Items on state (DGS, COSTARS or PASSHE), contracts • May still require an RFQ • Items available from agencies for persons with disabilities (such as Pennsylvania Industries for Blind and handicapped) • Certain items specified under grant or restricted gift provisions, and • Items procured under the sole source and emergency provisions of the Commonwealth Procurement Code.

12. Purchase Requisition Review Special Approvers General • Procurement reviews for appropriate expenditure, price and source • Budget validation

13. Types of Contracts and PO’s

14. Types of Contracts and PO’s

15. Prohibited Contract Clauses Policy: • Assignment Clauses - No assignment without prior written consent of the University. • Law of the Contract - The laws of PA must govern the contract or agreement. • Attorneys' Fees, Court Costs, Entry of Judgment - The University may not voluntarily pay - the contractor's court costs or legal fees nor may it allow a contractor to confess judgment on its behalf. • Indemnity and Hold-Harmless Clauses - Removed from every Commonwealth contract because it compromises the greatest protection afforded the Commonwealth entities: Sovereign immunity. • Arbitration Clauses - Resolution of disputes by binding arbitration in contracts for goods and services are prohibited. The Board of Claims has exclusive jurisdiction. • Payment in Advance • Purchase of Insurance

16. Contracting for Speakers SPC must be executed between BU and speaker/speaker’s booking agent prior to engagement. 1. Initiate a Purchase Requisition (PR). a. Lead times below must be followed: i. >$5,000 – 6 weeks prior to engagement to allow Procurement time to create contract, work through contract issues with the speaker, and obtain speaker and PASSHE legal counsel signatures; ii. $5,000 and <– 2 to 3 weeks prior to engagement to permit time to review, edit terms and obtain all signatures. b. Include all pertinent information on the PR in SAP: i. Speaker’s quotation and/or contract (add as attachment to PR); ii. Name, address and phone number; iii. SSN of the speaker or EIN of the booking agent; iv. Speaker’s fee; v. Travel expenses (lodging, meals, mileage, etc.) – select one of the following methods:

17. Contracting for Speakers

18. Contracting for Speakers • Payment processing: • Standard practice - Speaker responsible for sending invoice for services provided to University in accordance with the terms outlined on the SPC. University depts/offices should not generate an invoice on the speaker’s behalf. • However, if speaker is an individual not associated with a company or corporation, does not speak routinely in the course of his/her normal employment the department may prepare and submit an invoice on his/her behalf. This invoice should be signed by the speaker prior to departure. After the engagement, the invoice must be signed for approval by the respective department who initiated the speaker request. Refer to the link for this invoice form. http://www.bloomu.edu/documents/purchasing/GeneralInvoiceForm.doc • If a speaker contracted for expense reimbursement, original receipts for actual expenses incurred must accompany the invoice to substantiate expenses claimed and satisfy audit requirements prior to reimbursement (applies to options 2 and 3, above, only). • Payment will be made after speaking engagement has taken place and the requisitioner has approved the invoice for payment. Any exceptions to this rule must be approved by the Procurement office. Prepayment of speaker fees and/or expenses is only authorized under extraordinary circumstances (i.e., speakers from outside the US). • Upon approval of final invoice for the contract, indicate “final invoice” before forwarding to AP office for processing. By doing so, any remaining open commitment will be liquidated and funds returned to funds center holder’s budget. • Call the Procurement office if you have any questions or special circumstances.

19. Cautions A person without delegation who signs a contract is acting outside the scope of his/her employment and can be held personally liable for the obligation(s) created by the inappropriate signing of contract. This is also true for “after the fact” contracts (i.e. procuring a good or service without the advance approval of Procurement). BU cannot pay on an “unlawful” contract and the contractor’s only remedy is to proceed against BU via the Board of Claims or request approval of a settlement agreement.