Purchasing Policy 5.2-1

I.  Introduction/Purpose

The Purchasing Policy is a collection of rules that control the requisitioning process, ensuring alignment with the organization's strategic purchasing requirements. It provides the University community with requirements and procedures regarding the centralized purchasing of goods and services by Saginaw Valley State University (University) in its entirety.  Using a centralized purchasing process creates opportunities for efficiency, value, conservation of resources, and risk mitigation.

II. Key Definitions

Consulting Services: services that meet the very narrow definition of engaging a subject matter “expert” for advice (documented recommendations) or the development of specifications that will guide the University in its efforts to achieve specific results. A Consultant Agreement is required.  

Contracted Services:  services that involve the engagement of a contractor in the performance of a defined task or set of tasks. A contracted service provider may also provide advice in conjunction with the services required to achieve the defined task(s).  The key differentiator is the performance of an actual task which exposes the University to a greater level of risk than present in simply receiving advice from a consultant.  Contracted Services which exceed the specified bid dollar amount thresholds are to be selected via an authorized competitive bidding process and require:

1. Verification that University insurance requirements are met, and
2. A Purchase Order (PO) to be completed in advance of any services rendered, and
3. May require a contract reviewed and signed by a University administrative staff member with delegated Contract Signature authority.  

Contract Signature Authority: a formal delegation that allows an individual to sign or otherwise enter into an agreement that legally binds the university to terms and conditions. This includes contracts that bind or obligate the university to a financial or a non-financial commitment. See Contractual and Signature Authority Policy. 

Financial Approval Authority: a formal delegation in the Workday system that allows an individual to spend or approve the commitment of university funds within the scope of their management responsibility, such as activity, cost center, gift, grant or project manager. Financial Approval Authority does not include Contract Signature Authority as described above. 

Purchase Order (PO): a formal document issued by the University to a vendor, specifying the goods or services to be purchased and the terms of the transaction. 

Purchase Requisition: a request from a department or individual to purchase specific goods or services. 

Single Source: a procurement method used when multiple suppliers offer comparable goods or services but a compelling and well-documented rationale exists to select one specified supplier. This decision is based on strategic considerations that serve the best interest of the University, such as continuity, performance history, integration needs, or long-term value.

Sole Source: a procurement method used when only one supplier is capable of providing the product, service, or technology. This determination is based on the absence of any other comparable or reasonably equivalent alternatives in the marketplace.

III. Role of Purchasing Department

Purchasing is responsible for the administration of centralized purchasing services, and for most procurement negotiations on behalf of the University, as delegated by the President and Vice President for Administration and Business Affairs (VP for ABA).

To achieve this goal, Purchasing is responsible for the following:

1. Solicit competitive bids/offers when requested purchases exceed University defined competitive solicitation limits. 
2. Perform the preliminary review of Single Source or Sole Source justification documents submitted for the purpose of obtaining waiver of the competitive solicitation process.  This preliminary review includes
   • Approve or decline Single Source or Sole Source requests for purchase requests below $50,000.
   • Forward requests for purchases of $50,000 or greater with recommendations to the VP for ABA for decision. 
3. Maintain liaison with the suppliers who service the University.
4. Facilitate the procurement of goods and services for all University Departments (except Facilities Planning & Construction).
5. Support the maintenance of procurement systems that facilitate vendor setup, requisitioning, ordering, and competitive solicitation processes.
6. Advise and train University employees regarding techniques and tools for the competitive shopping of goods and services.
7. Verify that any contracts are signed by a University employee that has contract signature authority and that computer hardware and software requests have been properly vetted.
8. Assure that suppliers provide a valid certificate of insurance which meets University requirements, prior to the issuance of POs for services.

IV. Specification of Items & Bid Requirements

A. Specification of Items

The employee or department determines the nature of goods or services necessary for the performance of their job responsibilities and are encouraged to make recommendations to Purchasing regarding specifications, potential suppliers, etc.

1. If an employee/department intends to obtain quotes from prospective suppliers, it is recommended they consult Purchasing in advance to ensure that appropriate terms & conditions are requested and that the appropriate vendor list is utilized.
2. Any price quotations from potential suppliers solicited directly by the employee/department shall be in writing except when time or other circumstances do not permit, in which case verbal bids are acceptable if they are properly documented.  It is the responsibility of the requesting employee to provide this documentation to Purchasing for review before a PO is issued.
3. Purchase Requisitions submitted for goods or services from one vendor with total price exceeding any bid limit shall not be intentionally divided into multiple Purchase Requisitions for the purpose of avoiding the solicitation and documentation of the required quoting process.

B. Bid Requirements

The purchase of goods or services (contracted or consulting) are subject to the following requirements:

1. Greater than $10,000 and less than $50,000 in value require a minimum of three (3) documented price quotations unless the desired goods or are covered by competitive cooperative pricing agreements, state contracts, are a Single or Sole Source, or a justifiable waiver of the requirement is approved by Purchasing in writing in advance.
2. Less than $50,000 in value may be formally bid if Purchasing determines that the formal competitive bidding process would be to the University's advantage.
3. $50,000 or greater in value must be preceded by one of the following actions performed by or under the guidance of Purchasing, unless covered by competitive cooperative pricing agreements, state contracts, are a Single or Sole Source, or a waiver of sealed bid is approved by the President or VP for ABA:

a. A formal competitive sealed bid - A formal sealed bid request will state the day and time due and will be open to the public after the defined deadline. No sealed bids will be accepted if received after the day and time specified. 

b. A formal request for proposal (RFP) process - A formal RFP process will state the day and time due and will be closed to the public at the defined deadline.   Proposals and results of an RFP process will not become available to the public until an award decision has been made, and any related contract processes have been completed.

c. An equivalent competitive solicitation process orchestrated in cooperation with Purchasing.

When the purchase of goods or services (contracted or consulting) is for a multi-year contract, bid and authorization requirements apply based on the total value of the contract, not the annual amount.

C. Single or Sole Source Justification

In instances where a competitive bid is not possible or where the requestor/department is requesting that no competitive bid, RFP or competitive solicitation process be conducted, a Single/Sole Source justification form must be completed and attached to the Purchase Requisition.  The Single/Sole Source justification form contains a list of common pre-approved justification exceptions.  Requests that fall outside of the pre-approved justification exceptions require a detailed explanation supporting the specific reasons for the request. 

• • Single Source justification requires an explanation of the rationale for selecting the vendor, any alternatives considered and how the price was determined to be fair, reasonable, and the best value for the University.
    
    
  • Sole Source justification requires an explanation that addresses at a minimum:
    
    1. Why the product or service is unique (i.e., Why any seemingly comparable substitute goods or services in the marketplace are not actually comparable); and
    2. How you know that there is only one source for the requested product or service; and
    3. The basis for determining that the price is fair and reasonable.

The Purchasing department will review the single/sole source justification request and make a determination on requisitions below $50,000.  Requisitions of $50,000 or greater will be forwarded to the VP for ABA for a determination.  If the request is denied, additional information may be requested, or the requisition may be competitively bid. 

V.  Supplier Selection

Purchasing is responsible for the selection of the supplier, however, if the goods or services being procured do not exceed $10,000 or are within the list of exceptions noted below, the ordering employee(s) may be involved in the final supplier selection. 

The University subscribes to a policy of equal opportunity and non-discrimination.  The supplier selection process is available to all without regard to age, color, disability, gender identity, genetic information, height, marital status, national origin, race, religion, sex (including pregnancy), sexual orientation, veteran status, weight, or on any other basis protected by state, federal, or other applicable law. 

It is vitally important that the University, as a public institution, avoid even the appearance of impropriety, including the inference that certain prospective suppliers might enjoy an unfair advantage in doing business with the University by virtue of the employment relationship of its owner with SVSU.  Purchases will not be made where a conflict of interest situation exists.

VI.  Purchase Authorization Requirements

    A. All Purchase Requisitions must have all required approval(s) before Purchasing can generate a PO.

No commitment of funds shall be made by Purchasing without prior approval from the designated Financial Approval Authority and/or Vice President of the business unit to which the purchase is to be charged.

University employees who have been designated a Financial Approval Authority and/or Vice Presidents of the business unit to which the purchase is to be charged have the authorization to approve expenditures against their assigned cost centers, gifts, projects or grants.  However, these individuals have not been authorized to act as an agent of the University and are not authorized to purchase goods or services from suppliers.  It is the responsibility of Purchasing to issue POs and monitor any variances that may occur. 

University employees who have Financial Approval Authority, but who do not follow established University purchasing policies and procedures may be held personally financially liable for all or part of the cost of purchases where these policies were not followed. In the most severe situation, it may result in additional disciplinary action up to and including termination.

B. The purchase of any goods or services of $10,000 or greater value requires approval of the appropriate Vice President of the business unit before Purchasing is authorized to generate a PO. 

If the good or service being procured is within the exceptions listed and defined under the “Exception Items” category set forth below, modified purchase authorization requirements may apply.

C. The purchase of any computer-related hardware or software requires additional review and approval prior to the generation of a PO. 

The required review and authorization needs to be planned and initiated to ensure completion by any established deadlines.

1. 1. The purchase of any computer-related hardware requires Information Technology Support Services (ITSS) approval to ensure that devices are compatible with University systems and compliant with University computer technology security standards.
   2. The purchase or renewal of any computer software requires approval by the Information Technology Support Services (ITSS) and Accessibility Resource & Accommodations (ARA) departments.  This is to ensure that the software or application is compliant with current data security standards and Federal ADA Accessibility & Student Privacy (FERPA) laws.

a. For software that stores or handles data in the cloud or on non-SVSU servers, the vendor must provide a HECVAT (Higher Education Community Vendor Assessment Tool) for ITSS data security compliance assessment.  In some instances, the ITSS Data Security Administrator may accept SOC 2 documentation and attestation in lieu of the HECVAT.

b. For software that is accessed or used by students or more than one individual, the vendor must provide a VPAT (Voluntary Product Accessibility Template) vendor self-assessment which needs to be submitted to ARA for review and approval.  In some instances, ARA may accept a WCAG (Web Content Accessibility Guidelines) vendor self-assessment.

c. For software that involves the storing of any student data, the vendor must acknowledge the process used to ensure FERPA compliance.

There may be additional assessments and reviews required depending on the specific use and function of the software. Additional information can be found in the Software Purchasing and Installation Policy (ITSS policy 3.1-1) and the Information Technology Related Purchasing Policy (ITSS policy 4.4-1)

Mobile device apps under $25 that directly support an individual’s job requirements are exempt from additional approval from ITS. Either P-Card or reimbursement via a Workday Expense Report can both be utilized for these purchases.

    D. Sponsored Programs approval is required for all grant expenditures.

VII.  Exception Items

Purchasing is not responsible for, but may assist with purchases related to the following specific items or services:

A.  Employee Travel - Expenditures for approved travel and entertainment can be incurred, and the employee reimbursed in accordance with Travel and Meal Expenses Policy 2.3-1.  

B.  Architectural and architectural related consultant & professional services, new construction, contractual repairs, and remodeling involving SVSU Facilities Planning & Construction Department.

C. Purchases made with a P-Card in accordance with the SVSU Procurement Card Policy.

VIII. Price Variances

A.  PO Variances - any changes that increase the price of any line item or of the total order in advance of delivery by the vendor requires immediate notification to Purchasing for an assessment of what corrective action is needed to resolve the variance prior to delivery or invoicing.

B. Invoice Variances - under the conditions below additional approvals are obtained prior to payment:

1. 1. The invoice total exceeds the greater of ten percent or $100 over the PO total (excludes shipping costs).
   2. The invoice is over the amount quoted by the supplier.
   3. The quantity invoiced exceeds the quantity ordered, except for printing and promotional items, on which a ten percent overage is allowed.

Related Policies & Forms:

Contractual and Signature Authority 5.2-13
Financial Conflict of Interest 5.8-2
Travel and Meal Expenses Policy 2.3-1

mySVSU Contracts Page (internal access only)
mySVSU Purchasing Page (internal access only)