Purchasing Train

Information about Purchasing Train

Published on November 23, 2007

Author: Junyo

Source: authorstream.com

Content

Purchasing Training:  Purchasing Training Roane State Community College Jack D. Walker, Director of Purchasing Purchasing Mission:  Purchasing Mission To facilitate the procurement of goods and services Manage Surplus Property Shipping and Receiving Mail Copiers Values:  Values Ethical Practices Professional Conduct Quality and Friendly Service Timely Processing of Transactions/Services (as capabilities allow) Major Changes:  Major Changes TBR Policy Changes Effective October 2005 New bid limits Less than $5,000-formal quotes or bids are not required $5,000-$25,000-request at least three quotes Over $25,000-formal bids sent to at least 15 vendors (Purchasing will work closely with you when processing transactions at this level) New Office Supply Contract with Staples Online purchasing and approval Use of FRS system will not be necessary for Staples transactions Flexibility and Responsibility:  Flexibility and Responsibility New bid limits offer greater flexibility Fewer items will require quotes or bids Decentralizes purchasing activities to departments for many transactions Should speed process for many transactions Departments need to make good decisions and follow rules Flexibility and Responsibility:  Flexibility and Responsibility Greater Responsibility for departments to follow rules Departments will need to be responsible for obtaining quotes for larger purchases Definitions:  Definitions Requisition-entered into FRS system. This is simply a request to purchases goods and services. Purchase Order-a requisition becomes a purchase order when the requisition is approved through appropriate channels (in FRS system) and transferred to a purchase order in purchasing. Definitions (continued):  Definitions (continued) Invoice-a document received from a vendor detailing items/services sold and amounts to be paid. Quote/Bid-a document provided by a vendor that details the prices that a vendor expects for goods and services. Original, fax, or email quotes are generally acceptable for quotes obtained by departments. Purchasing Options:  Purchasing Options Petty Cash (up to $25 or $50 depending on the fund used Purchase Order/Requisition Purchasing Cards (Wal-Mart, Lowes, etc.) Blanket Purchase Orders (up to $4,999) Personal Reimbursement Quotes-at least three must be obtained for purchases over $5,000 Formal bids-required for purchases $25,000 or greater Request for Proposals (RFP)-appropriate for technical/complex purchases Petty Cash:  Petty Cash Intended for small purchases less than $50 for Main and ORBC funds and less than $25 for all other funds Sales tax cannot be reimbursed An approved food services authorization form must be present if food or drinks are purchased for human consumption Travel expenses cannot be reimbursed through petty cash Invoices may not be split to avoid reimbursement limits Purchase Order/Requisition:  Purchase Order/Requisition Appropriate for most purchases Be as clear as possible with descriptions-refer to model numbers, catalog numbers, etc. Provide us with necessary information (vendor addresses and contact information if vendor is not in the system) Do not take possession of merchandise or otherwise commit institution funds until a properly executed Purchase order is obtained Plan purchases with sufficient time to allow for approvals and processing Make sure you send any supporting documentation to us promptly (order forms, registration forms, sole source, proprietary, quotes, quote worksheet, etc.) Purchase Order/Requisition:  Purchase Order/Requisition Ensure correct account and object code is entered Budget managers-check the system for any items that you need to approve on a regular basis-If you approve 20 transactions at 4:00 PM on a Friday afternoon, your transactions will probably not be processed until the next week We cannot process your transaction until all approvals and documentation are obtained. Transactions are processed on a first come, first serve basis except for emergencies We have limited staff and multiple demands as most of you do. However, we can usually provide a quick turnaround if you have approvals and documentation in order Purchase Order/Requisition:  Purchase Order/Requisition Non Compliance explanation is required if you purchase prior to obtaining a purchase order You may be personally liable for items purchased without a purchase order MAKE SURE YOU HAVE A PROPERLY APPROVED PURCHASE ORDER BEFORE YOU MAKE A PURCHASE Purchasing Cards:  Purchasing Cards Wal-Mart Home Depot Kroger Lowes Purchasing Cards:  Purchasing Cards Appropriate for many items Convenient and quick if you are near the store Check out from purchasing You need your account number Take the tax exempt form and ensure the clerk sees it Write your account number on the receipt Turn in the card and receipt promptly after purchase Obtain approved Food Services Authorization Form if you are buying food or drinks for human consumption May add Staples Card in future Staples/Office Supplies:  Staples/Office Supplies All TBR institutions required to migrate to Staples contract competitively awarded by UT Cooperative purchasing is a major TBR initiative All office supply purchases should be made through Staples-purchase of office supplies from others allowed only when a cheaper price can be documented Purchase orders for other office suppliers will not be approved unless you provide documentation to support lower pricing or Staples does not sell the product Staples/Office Supplies:  Staples/Office Supplies Major Change-Staples will provide training on use of web site Purchasing will be web based and not require a purchase order Ordering and approvals handled online Should make purchasing easier and consume less time You will need to provide receiving documentation to Diane Mount (Accounts Payable) in a timely manner Staples/Office Supplies:  Staples/Office Supplies Discount Structure General Supplies 62% Diamond Items 30% Private Label 72% Core List 40-90%-The core list is currently for UT but the list will likely be changed to accommodate TBR in the coming months Rebates to RSCC of 3 ½ to 4% depending on volume and average order size Blanket Purchase Orders:  Blanket Purchase Orders A blanket purchase order obligates funds and allows you to spend up to the maximum approved during the course of a year. As you make purchases, the expenditures are charged to your account. The Physical Plant, Exposition Center, and some other departments use them extensively. Appropriateness depends on the nature of expenditures that a department makes. Blanket Purchase Orders:  Blanket Purchase Orders Appropriate for some departments where it is expected that recurring purchases will be made with a particular vendor through the course of a fiscal year (July1-June 30) Advantages Establish the purchase order amount for the maximum one or two times per year rather than issuing purchases orders repetitive orders Some time savings and convenience Blanket Purchase Orders:  Blanket Purchase Orders Guidelines May be issued up to a maximum of $4,999 A second order or addendum may be issued on or after January 1 or each year Any further purchases must be bid If multiple blanket orders to the same vendor are scattered across accounts in a department, then the total of all individual blanket orders will apply toward the $4,999 limit regardless of account Blanket orders for larger amounts may be issued if supported by bidding, contracts, or other acceptable methods A series of blanket orders may not be used to circumvent bidding or other requirements Personal Reimbursement:  Personal Reimbursement Make purchase with personal credit/debit card or personal check Advantages Do not need prior approved purchase order May allow for in store or internet purchases that may not be possible with a purchase order Disadvantages RSCC cannot reimburse sales tax You will receive no reimbursement if it is determined that the purchase is not allowable Receipt/invoice showing proof of payment must be submitted for reimbursement Invoice must detail what was actually purchased Dollar Level Requirements:  Dollar Level Requirements Minimum bid/quote limit is $5,000 CALL BEFORE YOU BID - if you are contemplating purchases $5,000 or greater, contact me and advise me of the details of the purchase and we can mutually form a strategy. This will help to ensure compliance and avoid wasting your time and efforts. Sealed bids are required for purchases $25,000 and greater Guidelines for Obtaining Quotes/Bids:  Guidelines for Obtaining Quotes/Bids The change in dollar limits will afford you greater flexibility and place more responsibility on your department. It is imperative that we thoroughly document purchases that must be bid. In many cases, I will recommend that the department obtain three or more quotes for purchases falling in the $5,000-25,000 range. Guidelines for Obtaining Quotes/Bids:  Guidelines for Obtaining Quotes/Bids Ask for quotes based on specifications for goods and services Detailed specifications help ensure that you get a product or service that meets your needs You may not bid for a specific brand or model exclusively unless you have an approved Proprietary Purchase form You may request quotes based on a brand or model but you must allow the opportunity for equivalent products to be bid Guidelines for Obtaining Quotes/Bids:  Guidelines for Obtaining Quotes/Bids Example Roane State Community College is requesting bids for a DELL GX 110 or equivalent Using a statement such as this might allow Gateway and other computer makers to bid on the item Guidelines for Obtaining Quotes/Bids:  Guidelines for Obtaining Quotes/Bids Be sure to inquire about any shipping and handling charges and have them documented Make sure your quotes include contact information (Contact person, address, fax, telephone, etc.) Fax, Email, or mailed quotes are acceptable Listing a catalog or price on an internet website is not sufficient-better pricing is often received if you contact a sales representative and you ask for a formal quote Complete your Quotation Worksheet (available on Purchasing Department Website) Purchase order must be issued to low bidder unless items bid do not meet specifications The Formal Bid Process:  The Formal Bid Process Purchasing handles the mail out and bid openings Department can move the process along by suggesting vendors and writing good specifications Locating vendors interested in our business will improve your price Bids must stay out for a minimum of two weeks and longer in some circumstances Department is provided with copies of bid documentation to consider in making the award Advanced planning is a must-bids and the related documentation process are time-consuming for our staff We may elect to continue using Formal Bids for certain purchases falling under $25,000 Request For Proposals:  Request For Proposals Appropriate for complex or highly technical purchases Allows you to separate product evaluation from price Generally used on purchases exceeding $25,000 Two tiered evaluation Technical phase Cost Phase Committee Evaluates the proposals State, TBR, and UT contracts:  State, TBR, and UT contracts Bidding is not required if you are purchasing off of an existing contract State contracts are contracts awarded by the State of Tennessee, Department of General Services and the contracts may be viewed on the internet TBR contracts are contracts awarded by another TBR school (usually universities) or the TBR central office UT contracts are contracts awarded by the University of Tennessee If a representative tells you that they have a contract, verify that a contract actually exists and obtain a copy of it Contact purchasing with any questions on contracts-in some cases there may be a contract that is no longer valid or a type of contract that we cannot purchase from Contract pricing may or may not be better than what may be obtained by bidding-use good judgment Sole Source and Proprietary Procurement:  Sole Source and Proprietary Procurement Sole Source Procurement Sole source purchases are made only when items are unique and possess specific characteristics that can be filled only by only one source. Only authorized sole source may be procured utilizing non-competitive negotiation. Sole Source and Proprietary Procurement:  Sole Source and Proprietary Procurement Proprietary Procurement A proprietary product is one that is manufactured and marketed by a person or persons having the exclusive right to manufacture and sell the product. Marketing is generally controlled by franchises that may include competitive sales at wholesale or retail levels. When it is found that bids may be obtained from different franchises, bid invitations must be issued unless the estimated purchase is less than $5,000 Sole Source and Proprietary Procurement:  Sole Source and Proprietary Procurement Key difference in sole source and proprietary purchase A sole source purchase will not require bidding because it can be obtained from only one source. A proprietary purchase must be bid (or quotes obtained as appropriate) because the item may be purchased from multiple vendors. Sole Source and Proprietary Procurement:  Sole Source and Proprietary Procurement Justification Factors Whether the vendor possesses exclusive and/or predominant capabilities or the items contain a patented feature providing superior utility not obtainable from similar products. Whether the product or service is unique and easily established as one of a kind. Whether the program requirements con be modified so that competitive products or services may be used. Sole Source and Proprietary Procurement:  Sole Source and Proprietary Procurement Whether the product is available from only one source and not merchandised through wholesalers, jobbers, and retailers. Whether items must be interchangeable or compatible with in-place items. Whether the cost of conversion, including but not limited to disruption, re-training, and replacement precludes bidding competitively. Sole Source and Proprietary Procurement:  Sole Source and Proprietary Procurement Whether the product is to be used in an instructional setting and the intent is to provide instruction on the specific product or diversity of products. For personal, professional, and consultant services, whether the use of non-competitive negotiation is in the best interests of the institution. Other justifications as approved by the Chancellor, President, Director. Emergency Purchases:  Emergency Purchases Emergency purchases as defined by TBR policy would almost always apply to accounts managed by the Physical Plant or Bill Fuqua “Emergency” purchases as defined by most departments are really just urgent or unplanned purchases Same policies apply to these purchases as others We can often assist you If all approvals and necessary documentation are obtained we can give you a purchase order number to call in to the vendor To the extent possible we will expedite orders where needed Bear in mind our resources and capabilities are limited but we will assist you to the extent possible Poor planning often causes “emergency” orders Inappropriate Purchasing Methods:  Inappropriate Purchasing Methods Most common-making a purchases prior to obtaining a properly approved purchase order With a few exceptions, all purchases must have a properly approved purchase order prior to making a purchase An explanation in writing must be submitted when this occurs You may be personally liable for purchases made without a purchase order Inappropriate Purchasing Methods:  Inappropriate Purchasing Methods Invoice/purchase order splitting-comes in many forms Purchase orders or invoices are split or purchases made a few days or weeks apart for the purpose of avoiding bidding, petty cash limits, or other requirements May violate State Law Causes audit problems Will strictly enforce this in the future Contact Purchasing if in doubt Inappropriate Purchasing Methods:  Inappropriate Purchasing Methods Abuse of Blanket Purchase Orders Using blanket purchase orders at amounts that should be bid New requirements for blanket purchase orders to be strictly enforced Failing to plan is often the root cause The rules apply to everyone Penalties for Inappropriate Purchases:  Penalties for Inappropriate Purchases Ethics:  Ethics See TBR Policies for specifics Statement of Policy-Employees must discharge their duties and responsibilities fairly and impartially. They also should maintain a standard of conduct that will inspire public confidence in the integrity of the institutions and technology centers General Standards of Ethical Conduct Realization of personal gain through public employment Purchasing shall be based on principle of competitive bidding All bidders must be granted equal consideration and foster fair, ethical and legal trade practices Avoid misrepresentation and sharp practices Be receptive to competent counsel and submit controversy through appropriate appeals process Accord prompt and courteous reception Shall not use original designs developed by a vendor for competitive purposes Ethics:  Ethics It shall be a breach of ethical standards for any employee, in the performance of his or her official duties, to participate directly or indirectly in any proceeding or application, request for ruling or other determination, claim or controversy, or other particular matter pertaining to any contract, or subcontract, and any solicitation or proposal thereof, in which to his or her knowledge: A. he or she or any member of his or her immediate family has a substantial financial interest; or B. a business or organization in which he or she or any member of his or her immediate family has a substantial financial interest as an officer, director, trustee, partner or employee, is a party; or C. any other person, business, or organization with whom he or she or a member of his or her immediate family is negotiating or has an agreement concerning prospective employment is a party. Ethics:  Ethics The determination of whether a substantial financial interest exists shall be based upon the criteria identified in TBR Policy No. 1:02:03:10, Conflict of Interest. Direct or indirect participation shall include but not be limited to involvement through decision, approval, disapproval, recommendation, preparation of any part of a purchase request, influencing the content of any specification or purchase standard, rendering of advice, investigation, auditing or in any other advisory capacity. Ethics:  Ethics You may not accept or demand gratuities It shall be a breach of ethical standards for any employee who is involved in procurement to become or be, while such an employee, the employee of any party contracting with the particular governmental body by which the employee is employed. If you believe that there is or may be a conflict or appearance of a conflict of interest, it must be disclosed in accordance with TBR and RSCC Policy The Future:  The Future Banner implementation will likely lead to further changes We will implement web based purchasing to the extent possible Procurement cards may be implemented in the future Purchasing Web Page Resources:  Purchasing Web Page Resources Visit our web page at the following link Contains links to policies, forms, instructions, contracts, We plan to continually add new items http://www.roanestate.edu/keyword.asp?keyword=PURCHASING%20DEPARTMENT Questions ?:  Questions ? ? ? In Conclusion :  In Conclusion

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