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OPEN LETTER FROM THE DEAN OF ADMINISTRATIVE & BUSINESS SERVICES
Purchasing procedures are dictated by law and Board Policy and are complicated. I realize many will not take the time to research this booklet in detail and for this reason I offer the following suggestions:
1. Do not commit Brazosport College financially in any way without completing a Purchase Requisition and receiving a Purchase Order Number. No Number--No purchase!!
2. Any expenditure or commitment to expend Brazosport College funds made without a Purchase Order Number will not be the responsibility of Brazosport College to pay - rather the individual involved will be responsible for full payment.
3. If in doubt about any Purchasing Procedure, ask the Director, Business Services or the Procurement Specialist. They are always available and ready to be of assistance
GENERAL INTRODUCTION
PURPOSE: To distribute and see the execution of the Purchasing Policies and Procedures to all employees of Brazosport College, hereafter, called the College District.
SCOPE: The scope of the College District in centralizing the purchasing function is to comply with state laws and Board policies as well as to purchase the best product for the lowest cost.
FORMER PROCEDURES: This manual rescinds all previous operational policies, and procedures, whether written or verbal, concerning the procurement function.
GENERAL OBJECTIVES: The primary objective is to create an atmosphere that provides a competitive opportunity for all vendors in providing the goods and services needed by the College District. The secondary objective is to reduce the administrative costs of manpower, storage, and freight costs associated with accomplishing the purchasing function by insuring that the purchasing policies are followed.
RESPONSIBILITY: It is the responsibility of all College District employees involved in any aspect of the purchasing function, to be familiar with these policies and procedures. The employees are to follow them in the execution of day-to-day business, and to report any violations to their immediate supervisor. The primary staff responsibility for compliance with these procedures is assigned to the Dean Administrative & Business Services.
SUGGESTIONS: Suggestions for changes, both verbal and in writing, are encouraged and welcomed and should be directed to the Director, Business Services. Deviation from the procedures outlined herein will not be initiated until a formal change to this manual is approved and published.
PURCHASING PROCEDURAL REQUIREMENTS
AUTHORITY FOR PROCUREMENT
The Board of Regents has delegated to the President and the Dean, Administrative & Business Services the authority to contract and procure for the College District. The Board Document states all policies, procedures, and practices for contracting will follow the applicable laws of the United States of America and the State of Texas. The laws are prescribed in the Texas Education Code, Local Government Code, Texas Revised Civil Statutes, Texas Attorney General Opinions, Vernon's Annotated Texas Statutes, and Federal regulations.
The Dean, Administrative & Business Services has responsibility for the direction, performance and accountability of the procurement administration. This office secures the purchase of all supplies, materials, equipment, and construction. The Dean, Administrative & Business Services acts as the Purchasing Agent for the College District.
Except as described within this manual, the purchase order has the sole authority to obligate the College's funds. Brazosport College will not assume responsibility for the payment of purchases other than those made according to purchasing procedures.
GENERAL RESPONSIBILITIES
Purchasing services begin when a user department determines a need for goods or service and ends when that need is met.
Competitive bids are secured when the cost to obtain goods and services exceeds the bid limitation level - $50,000.
BUSINESS OFFICE RESPONSIBILITIES
The objectives and responsibilities of the Business Office are:
- to serve as the focal point for the purchasing effort within the College District and to monitor it administratively
- to acquire what College District customers need; ensuring that delivery is timely and the best value in terms of price, quality, and services supplied
- to act as the focal point for all communications with suppliers relating to bids and purchase orders
- to establish standard specifications for commonly-used materials and supplies and to ensure that specifications are worded to describe the minimum requirements, but general enough to establish free and open competitive bidding
- to consolidate purchases whenever possible to obtain quantity discounts for volume purchases and to enter into contract requirements with vendors that will provide favorable prices
- to provide customers with current information on new products and services, substitute materials, prices, and available alternatives when appropriate
- to provide prices and estimates of costs of materials and supplies upon request
- to provide better public relations by providing vendors with consistent and equitable treatment
- to develop and maintain a current list of dependable vendors for the various supplies and materials required
- to work with the Receiving Department in processing complaints, claims, and adjustments, and to negotiate for the return of material or other arrangements to the satisfaction of all parties
1. to maintain a vendor list. Upon Request the College District will afford all vendors an equal opportunity to be placed on the vendor list. The Business Office maintains current vendor catalogs, and encourages Departments to utilize this information in obtaining bid pricing or specifications.
DEPARTMENTAL AND INDIVIDUAL RESPONSIBILITY
Except as described in this manual, individuals obligating the funds of the College District without following proper procedures will be solely responsible for all payments to vendors.
Planning for Anticipated Needs:
It cannot be stressed enough that this process will require everyone to determine his/her needs and make the necessary preparations before the item is required. The process of obtaining an item can be quite lengthy and exhausting. Therefore, planning is essential and necessary. The vendor also needs sufficient time to obtain the item and forward it to Central Receiving.
STATE LAW PERTAINING TO THE PURCHASING FUNCTION (SECTION 44.031)
State law indicates the College has eight methods of procuring goods and services. The most commonly used methods will be the Request for Proposal (RFP) and the Invitation to Bid (ITB). There is a vast difference between the two bids.
Invitation to Bid
The Invitation to Bid is used when the department knows the type of equipment, goods or services are required. The quantity is a known fact and will not vary during the fiscal year. Costs are usually readily identified before the process begins and can be guaranteed as stated. This method is the predominate method used on the campus to obtain the goods and services required during the fiscal year.
Request for Proposal Procedures
There are several procedures that must be followed when using this method of procurement. The procedures are listed below.
1. Proposals are to be accepted at the advertised date and time. The names of the submittal proposals will be read into record, but will not be opened in front of any attending vendors.
2. The interview team is assembled . It is preferable no more than five be assigned to the interview team. Those involved must complete the entire process. The team will be instructed in the following areas:
a. The interview team will meet on a specified date and time. A timeline will be developed to read and assess the proposals to its final completion.
b. The interview team will read all proposals and formulate questions relative to each proposal that is submitted.
c. The questions will be routed to the Business Office. The questions will be faxed or emailed to the appropriate proposer with an appointed time to conduct their interview.
d. Copies will be made of the proposals. The interview team may keep notes of each interview session. The interview notes will become part of the bid file information that is maintained in the Business Office. This information is subject to the Open Records Act Request.
f. The interview session will be conducted in closed session with the interview team and the vendor.
g. The information discussed at the interview will not be divulged or discussed outside of the interview wrap up session.
h. Under no circumstances may a vendor be given any information concerning any of the proposals submitted during or after the interview.
i. After all proposers have been interviewed, a wrap up session will be held to award the proposal.
j. The formal recommendation will be routed to the President for approval.
k. Once the formal recommendation has been signed and awarded, the information becomes an open record, and the successful proposer will be notified in writing and a purchase order is issued.
l. The non-awarded proposers will be sent a letter and a tabulation sheet of the award.
COMPETITIVE BID PROCESS
The competitive bid process is covered in the following documents:
Texas Education Code
Local Government Code
Vernon's Civil Statutes
The Handbook on Competitive Bidding for Texas Public Schools and Junior Colleges published by the Texas Education Agency TEC 44.031 - 44.034, and Local Government Code 271.029-271.030.
"A trustee, officer, agent, or employee of a school district who violate Subsection (a) or (b) of Section 44.031 of this code (Texas Education Code) or who makes or authorizes split, separate, sequential, or component purchases with intent to avoid the competitive bidding requirements of those subsections commits an offense. The offense is a Class B misdemeanor and is an offense involving moral turpitude. The conviction of a person other than a trustee under Subsection (a) of this section results in the immediate removal from office or employment of that person. A trustee who is convicted of an offense under this section is considered to have committed official misconduct for purposes of Chapter 87, Local Government Code, and is subject to removal as provided by that article and Article V, Section 24, of the Texas Constitution. For four years after the date of the final conviction, a person removed for an offense under Subsection (a) of this section is ineligible to be a candidate for or to be appointed or elected to a public office in this state, is ineligible to be employed by or act as an agent for the state, any municipality, county, school district, or other political subdivision of this state. This subsection does not prohibit the payment of worker's compensation benefits to the removed person for any injury that occurred before the commission of the offense. This subsection does not make a person ineligible for an office for which the federal or state constitution prescribes exclusive eligibility requirements.
CATEGORIES OF PROCUREMENT
Purchases are divided into levels based upon dollar value and method of procurement. In obtaining bids by the process mentioned in the next section (Cost Limitations) all departments must ask if the purchase is a product or service and if it is an:
Aggregate Purchase: Common purchase made by the College District. (Example: office supplies)
The State has two other categories but the majority of our purchases fall in the Aggregate Category.
An individual may not make split, separate, sequential or component purchases, to avoid the bid process.
Sequential Purchasing: "The time period for which sequential purchases of $50,000 or more in the aggregate must be combined for requesting competitive bids is not well defined. Depending on the individual circumstances and the type of property being purchased, the district's best interest may be better served by requesting bids for a quantity of items sufficient for a few months or an entire fiscal year (this also applies to construction, repair, or renovation work). The Texas Attorney General's office has taken a conservative position that, if purchases will be or are reasonable anticipated to be $50,000 or more during the entire fiscal year, then the district is to request competitive bids. Business Officers should determine whether an amount that is $50,000 or more was allocated in the budget for certain categories of items, or for like or related types of work." Handbook on Competitive Bidding for Texas Public Schools published by Texas Education Agency, Austin, Texas 2010.
Component Purchases: "If the competitive bidding law applies to the aggregate purchase, districts are not to circumvent the bidding law by purchasing under separate purchase orders related items (component parts) that cannot serve in and of themselves the purpose and function for which the purchase is being made, such as, a refrigerator shell, a freezer shell, and a compressor equipment for food storage." Handbook on Competitive Bidding for Texas Public Schools published by Texas Education Agency, Austin, Texas 2010.
Cost Limitations: Items under $10,000.00 to $24,999.99 might not be subjected to the bid process. The determining factor is the aggregate dollar amount for the entire College that has been expended.
$10,000.00 to $24,999.99:
1. Three verbal bids must be obtained and documented on each requisition.
b. The department may secure the verbal bids noting the information on the supporting documentation for the requisition entered into the Empower software system. The supporting documentation should be given to the Procurement Specialist for auditing. This purchase is usually for a single, unique commodity used exclusively by only one department. It would not be used for items that are universal to all employees on this campus.
Example: A single, unique commodity is an electronic transducer trainer.
2. The procedure to award the bid is as follows:
a. The requisition is entered into the Empower software system for electronic approval.
b. It is the responsibility of the department to provide all supporting documentation to the Procurement Specialist to attach to the purchase order for auditing.
c. The purchase order will be issued and mailed, emailed or faxed to the vendor.
d. The department may not contact the vendor to indicate the purchase will be processed and that a purchase order is forthcoming. The purchase order has sole authority to obligate the College's funds.
e. The vendor will not be called with the order after the purchase order has been mailed, emailed or faxed. This could result in a duplicate shipment.
$25,000 but less than $49,999 in the aggregate:
1. 1. These purchases require three written quotes. This is an unadvertised request. The department may state the deadline for receiving the quotes and the time line is less than two weeks.
a. The requisition is entered into the online Empower Software System for electronic approval.
b. It is the responsibility of the department to provide the three written quotes and any supporting documentation to the Procurement Specialist to attach to the purchase order for auditing.
c. A purchase order will be issued and mailed, emailed or faxed to the venor.
d. The vendor will not be called with the order after the purchase order has been mailed, emailed or faxed. This could result in a duplicate shipment.
$50,000.00 and over:
This purchase requires an advertised bid process. This process may take approximately six to eight weeks to obtain the approval to purchase.
1. The following steps are required to complete the advertised bid process.
a. The department must seek approval from the appropriate Dean to begin the bidding process
b. The Business Office will provide assistance in writing the specifications.
c. The department must prepare written detailed specifications, in accordance with the guidelines listed. The specifications must include the quantity required and the approximate time the product is needed.
1. Bid specifications should not include brand names. If a description is not available, obtain brochures from several companies and forward them to the Procurement Specialist who can assist in writing the specifications.
2. Any vendors participating in the actual writing of the specifications may not participate in the bid process. (See JM 940, Attorney General's Opinions).
3. Industry standards should be utilized whenever possible.
4. Any relevant prints, diagrams, and/or samples should be attached in sufficient quantity to be provided to all potential vendors. The specifications will describe the item or service required, and state that vendors wanting to participate in the process, can obtain detailed specifications through the Business Office. Specifications will not be distributed by the individual department.
5. A suggested vendor's list should be attached. The Procurement Specialist will also have vendor sources on file that can participate in the bid process.
6. The Procurement Specialist will review (and revise if necessary) the final bid specifications that are sent to the vendors. Departments will be notified of any changes to the bid specifications
d. The bid will be advertised in the local newspaper for two weeks. Ten days after the last advertised date the bids may be opened.
e. After the bid advertisement has appeared in the local newspaper the specifications may be sent to the vendors. Vendors will not have any prior knowledge concerning the item(s) desired or the detailed specifications. Vendors given prior knowledge of bid information could place Brazosport College in serious jeopardy. The College may lose its credibility with the vendor community and bidders could initiate a complaint with the Attorney General of the State of Texas should they feel they have been treated unfairly.
f. After the bids are mailed, vendors may have questions concerning the specifications. Personnel should not attempt to answer the questions. The vendor should submit the question in writing to the Dean, Administrative & Business Services who will seek an answer to the questions and release the question and answer to all potential vendors. The College District will not be held accountable for any verbal information given to a vendor.
g. Bid openings are open to all interested parties. At the designated bid opening date the Dean, Administrative & Business Services or his designee will open all bids with one additional college employee present.
h. Once the bids have been opened a tabulation sheet is prepared, copies of the bids are made and distributed to the requesting department.
i. The department will analyze the bids and the tabulation sheet based upon the following:
1. Quality of the product offered
2. Previous service to the College
3. Timeliness of delivery
4. Cost of the product or service
5. Length of time the prices are guaranteed
j. A written recommendation is forwarded to the appropriate department Dean for approval.
k. The department Dean will then forward the recommendation to the Dean, Administrative & Business Services.
l. The Dean, Administrative & Business Services will forward both recommendations to the President for approval.
1. The President may or may not approve the final recommendation immediately. It may be necessary that the recommendation be directed to the Board of Regents in their next monthly Board Meeting for final approval.
2. Once approval is granted, the Business Office will notify the department and a requisition may be processed.
3. A purchase requisition should be prepared by the department in the on-line Empower Software System. The created purchase order will be issued and mailed, emailed or faxed to the successful vendor. All other vendors will be notified of the result of the bid process by the Procurement Specialist.
4. The department may not contact the vendor and indicate the purchase will be processed and that a purchase order is forthcoming. The purchase order has sole authority to obligate the College's funds.
GIFTS AND GRATUITIES
Employees of the College District shall not accept or receive gifts or gratuities from representatives of companies or directly from the company. This pertains to supplies, equipment, or construction for the College District. The employees may not promise or obligate future awards or compensation based upon gifts, gratuities, rebates or discounts given.
CONFLICT OF INTEREST (CIQ)
The College District does not enter into purchasing contracts with students, faculty, staff, or members of faculty or staff immediate families. An acquisition from a business in which an employee has financial interest is prohibited, unless full disclosure of the background facts is presented in writing to the President. A CIQ form is available from the Procurement Specialist.
RESTRICTIONS ON CERTAIN PURCHASES
College District funds will not be used to purchase personal items. Memberships and subscriptions must be purchased in the name of Brazosport College and must be related to the mission of the department for which the membership or subscription is purchased. All memberships will be approved by the appropriate Dean.
Purchases from special grant funds will be made in accordance with College District purchasing policies as well as State of Texas purchasing guidelines unless the governing document specifies alternate procedures. It is the responsibility of the Project Director to be aware of any special purchase limitations or requirements applicable to a particular special fund, and to certify on the requisition that such special requirements have been met.
PROFESSIONAL AND CONTRACTED SERVICES
There are many professional services that are exempt from bidding by the State of Texas. The services are architects, engineers, accountants, surveyors, appraisers, and physicians.
The Handbook on Competitive Bidding for Texas Public Schools and Junior Colleges will issue a recommendation that all personal services are exempt from competitive bidding by issuance of Attorney General's opinion JM 940. The Attorney General opinion and the recommendation from the TEA handbook states the following: "...no longer includes only the services of lawyers, physicians, or theologians, but also those members of disciplines requiring special knowledge or attainment and a high order of learning, skill, and intelligence including guest speakers, consultants, writers, and artists." This statement includes that the service performed should be for continuation of an existing project. If the project is a new service or a new construction project then the competitive bid laws will be followed.
The professional service personnel may not provide any products for the project. If products are provided then the product must be bid, but not the person providing the service. (DM 114, Attorney General's Opinion, and The Handbook on Competitive Bidding for Texas Public Schools and Junior Colleges.)
Although competitive bids are not required, purchase requisitions, and purchase orders are required for all professional services. The College requires the full name of the individual, address, city, state, zip code, contact person, and Employer's Identification Number as well as a completed and signed FORM W-9 for each requisition.
SOLE SOURCE PROCEDURES
The Administration recognizes that there may be instances when proprietary or sole source purchases must be made, but such purchases must be appropriately justified. According to Section 3.09, Article 601b, V.T.C.S., the justification for such purchases must be in writing and must be based upon a need for some feature or characteristic (specification) that is unique to the requested product or service that cannot be provided by any other product or service. The written justification, signed by the requester or other authorized individual, must be forwarded to the Business Office and must contain the following elements:
1. Identification of the unique feature(s) or characteristic(s)/specification(s) of the requested product that will serve as the basis for the proprietary/sole justification.
2. A reason stating why a competitor's product is not satisfactory. This section must relate to the explanation of need for the unique specifications and should serve to support a finding that the stated need cannot be met with competing products. Sufficient detail must be included to show that the marketplace has been canvassed to locate acceptable competitive products.
3. A statement that clearly articulates the effects on the program if the goods or services were to be obtained elsewhere.
4. A letter from the company stating that the product or service is exclusively sold by them as distributor and cannot be purchased from any others.
The written justification is not a justification to purchase. The law does not require that the decision to purchase products and services be justified. It is a justification of the need for something that is unique about the product or service that precludes competition. It is important to note that the price of a product is not an acceptable justification for a proprietary purchase. Price is determined because of competitive bidding. If there are two or more products that are acceptable, preserving the competitive bidding environment will help ensure that the College District receives the best price.
The proprietary (used, manufactured, or sold by a person or company with an exclusive property right such as a patent or trademark) purchase procedure is a valuable tool that should be used whenever appropriate. If a proprietary purchase is justified, the request should be processed accordingly, rather than by soliciting "competitive" bids and then attempting to disqualify bids received on other products.
Because purchasing files are subject to the Open Records Act, the use of proprietary/sole source purchase procedures is an overt act that must withstand critical scrutiny. Justifications must be objective and must avoid statements that cannot be substantiated. The justification cannot be that competing products are not satisfactory. Statements regarding product quality that may be subjective should not be used. It is recognized that many purchases are based upon extensive investigative work done by the requisitioner before submitting the purchase request and that there are good reasons why one product will work and another may not. Remember, however, that the proprietary/sole source purchase procedure is an exception to competitive bidding requirements to be used whenever appropriate. It is not a mechanism for avoiding such requirements.
SUBSTITUTIONS ON PURCHASE ORDERS
Substitution of items specified on a purchase order is not permitted. If a product needs to be substituted on a purchase order, the original purchase order will be canceled and reissued with the new information.
Bid items may not be substituted. If a product is no longer in production or obsolete then the competitive bid process will begin again.
CANCELLATION/MODIFICATION OF PURCHASE ORDERS
A purchase order confirms the existence of a contract between the College District and the vendor. Consequently, it cannot be modified or canceled unilaterally. Any request to modify or cancel an order must be directed to the Business Office. If it becomes necessary to make any change in the original purchase order, the requesting department should immediately send a written memo to the Business Office describing, in detail, the reasons for change. The Business Office will notify the vendor of approved changes by issuing an amended purchase order. The Business Office will handle the request following established procedures.
Generally, a vendor will agree to a request for cancellation if the item(s) has not been shipped. The department may be held responsible for any material shipped by a vendor or for other costs incurred before cancellation. Occasionally, the payment of a restocking charge may be authorized is the responsibility of the department.
RETURN MERCHANDISE
Merchandise to be returned to suppliers or manufacturers for adjustment or credit should be coordinated with the Procurement Specialist. The actual return of the merchandise is handled by the Facility Services Department following the proper property disposal procedures. The vendor is under no obligation to accept a return of items shipped according to the purchase order. The only exception is if the item is damaged, and then only if the damage is reported within three days. Agreement from the vendor to accept a return is not automatic, and a restocking charge may be incurred. These restocking charges will be the responsibility of the requesting department.
It must be noted that some vendors allow returns within a specific number of days after the product(s) are received at Central Receiving. It is critical that the department must be aware of the vendor’s return policies. Any delays in acknowledging damaged products or the need to return a product will result in the department being charged for an unwanted item.
EMERGENCY PURCHASES
The State of Texas has identified emergency purchases as natural disasters. Natural disasters are defined as either a threat to human life, or the destruction of property that will inhibit classes from being held.
The President of the College may authorize purchase of items in an emergency and subsequently report the action to the Board of Regents. However, the College District recognizes that minor emergencies may occur during the fiscal year. A procedure has been developed to meet this need. The department may call the Business Office and request an emergency purchase
Emergency purchases will be handled on an individual department basis. The department will secure the purchase requisition as soon as Empower Software System becomes available after a natural disaster.
EQUIPMENT REPAIRS
All equipment repairs are subject to competitive bids if the College aggregate exceeds the minimum required bid amount of $50,000.00. The College will need to establish a bid to select the vendors appropriate to the type of equipment repairs needed. Once the bid has been awarded a purchase requisition and purchase order must be submitted for approval before the item is sent out for repairs or repaired on campus.
If the repair cost exceeds the amount stated on the purchase order, approval for the increased amount must be obtained from the appropriate staff.
ADDITIONAL INFORMATION
This section of the manual deals with the daily operations and procedures of purchasing.
Purchase Requisition Requirements
As previously discussed, a purchase requisition and purchase order are required to order all items before an order can be given to a vendor.
All requisitions are entered within the Empower Software System. The department is responsible for It is the responsibility of the department to provide all supporting documentation to the Procurement Specialist for auditing. Note in the requisition any special instructions for processing or payment.
Provide the Procurement Specialist with the vendor information to enter a new vendor into the Empower Financial Accounting System.
Information should include:
Vendor Name
Complete Address, City, State, Zip
Phone and Fax numbers
Email address and name of contact
Procurement/Credit Card Purchase
Brazosport College has a credit card available and issued by the Business Services Department to designated employees for the purchase of products and services. It is forbidden that any personal items be purchased using the Brazosport College credit card.
Bookstore Purchases
The Business Office maintains an open purchase order with the Texas Book Company Bookstore for the purchase of small supply items and other emergency purchases. Each department shall designate a person or persons in the department that are authorized to sign for charges at the Bookstore.
No student workers may sign for charges. Each department is limited to $200 per month and the individual purchase limit is $100. Purchase requisitions are required on all purchases that exceed these limits. In addition, computer software from the book store cannot be purchased without a purchase order.
Petty Cash Purchases
The Business Office maintains a petty cash fund for the purchase of items under $100. Each department shall designate a person or persons in the department that are authorized to sign requisitions for cash purchases. No student workers may sign for or pick up cash. Requisitions for cash disbursements are available at the Cashier's Office. An approved requisition for cash disbursement is required before making a purchase. The sales tax exemption certificate is on the back of the requisition for cash disbursement form. The college district allows the Sponsor of a student travel activity to obtain cash for student meals with the approved student trip authorization form.
Purchase Requests Requiring Prepayment
Departments must initiate a purchase requisition and the Procurement Specialist will issue a purchase order even for those companies not accepting a purchase order. .This insures that all internal controls are met. In addition note that “Payment is Required” in the “PO Comments” section of the online requisition.
All requests must be completely processed by Monday afternoon for inclusion in Thursday’s. Checks are processed on Thursday, and distributed on Friday.
Purchase Order Requirements
All purchases must be accompanied by a purchase order. A purchase order is issued by the Procurement Specialist.
Any employee purchasing goods and services without obtaining a purchase order will be responsible for all payments. All invoices or requests for reimbursement made without a purchase order are considered “Confirmation Buying” and the department must obtain the President’s signature for the purchase before the invoice will be processed for payment
The Dean Administrative & Business Services has designated the Procurement Specialist to process, mail, place orders, and distribute the purchase order document.
If the department has obtained an open purchase order then they may purchase the goods and services needed calling the vendor directly. The vendor must be instructed to use this number on all invoices.
Additional requisitions will only be required if the funds allocated have been expended. The requisition will state there is an additional dollar amount allocated towards the open purchase order.
The copies of the purchase order will be distributed as follows:
|
White |
Vendor |
|
Green |
Department |
|
Pink/Blue |
Accounts Payable/Numeric |
The purchase order may not be changed, substituted, or altered once it has been issued. Any changes are the responsibility of the requisitioner to pay.
If an item is not available the purchase order must be canceled. Purchase orders with Backordered items will remain open until the vendor has filled the order, or notification from the department is given that the item is unavailable. Each department should periodically review all open purchase orders within their department. The green copy of the purchase order that needs to be closed must be signed noting “close cancel” and forwarded to the Accounts Payable Specialist.
Vendors may not increase any bid price. Notify the Business Office if this occurs.
Non-bid items may be increased. If the vendor calls to increase the cost of an item on a purchase order, they will be directed to the requisitioner for approval. This will allow the requisitioner to determine if budget levels permit the increase encumbrance You may change the price if there are sufficient funds in your budget and if it is not an established bid price. Note that this is the only item that may changed on a purchase order.
Increase Encumbrance: The increased cost of any item on a purchase order is handled with an Increase Encumbrance Memo. The requisitioner will generate an increase memo which will be sent to the appropriate approver(s) and then forwarded to the Accounts Payable Specialist. If the invoice exceeds the purchase order amount by $10 or 10% of the original amount the increase memo is not required and the invoice will be paid.
Open Purchase Orders: An open purchase order may be used for the purchase of goods or services. Open Purchase Orders are valid for any time period during the 12-month fiscal year (September 1 through August 31). This order may be used for repetitive purchases. New purchase orders are requested for September 1 through August 31 of the fiscal year for all continued contractual services and leases.
It is encouraged that all departments issue as many open purchase orders as possible. This enables the department to use only one number throughout the fiscal year. This can eliminate the Confirmation Buying scenario. The department may estimate a yearly cost to initiate the open purchase order. The purchase order number will remain in effect throughout the fiscal year. If additional funds are needed an increase to the purchase order can be processed by the requestor.
The use of the open purchase order system will reduce the number of purchase orders assigned. It should alleviate the problem of a department purchasing a product or service without a purchase order number (Confirmation Buying). The open purchase order system saves the College District personnel time and supply resources. Contact the Procurement Specialist for instructions on the open purchase order process.
Central Receiving: Central Receiving is located in the Facility Services Department. The hours of operation are Monday through Thursday, 7:30 a.m. until 5:00 p.m., and Friday, 8 a.m. until 12 p.m., they can be reached at extension 3296.
There are several reasons why all goods must be routed through Central Receiving before a vendor can be paid.
a. Damages may have occurred in transit and the freight line or vendor must be notified for a replacement
b. Verification that all goods ordered have been properly delivered.
Exemptions to the items being routed to Central Receiving:
a. Bookstore purchases
b. Library purchases
c. Welding gases
d. Groceries for the Children Center and Tommy’s in the Commons
Central Receiving is not responsible for receiving personal shipments.
Payment of Invoices: In order for payment to be made for merchandise or services received, an original signed and dated invoice from the department must be received by the Accounts Payable Specialist in the Business Office.
An invoice given to an employee must be routed to the Business Office. The vendor will not be paid in a timely manner if this invoice is not returned to the Accounts Payable Specialist and the department will incur late charges.
If an employee has picked up an order, it is his/her responsibility to sign and date the original invoice and forward the invoice to the Accounts Payable Specialist in the Business Office.
Once an item has been received, the College is obligated to pay for the item. Due diligence is required by the department. This does include all items that have been picked up by an employee.
TRAVEL INFORMATION
Travel policies and instructions for completing the travel form are included on the back of the travel authorization form. Employees are required to have a completed and approved travel authorization prior to taking any trip even if the employee does not anticipate any expenses. Pre-planning is key foa all travel by Brazosport College employees to avoid the Confirmation Buying Scenario.
Travel Service Areas
This area is not the same as the Brazosport College service area for tuition.
In Service Area, example: 11_ _ _ 15100 Out of Service Area, ex.: 11_ _ _ 15200
Angleton ISD All other locations
Brazosport ISD Bay City
Brazoria/Columbia ISD Danbury
Damon Wharton, etc.
Sweeny ISD
Old Ocean
Submit In Service Area Travel Mileage reimbursement form at least monthly within the current fiscal year in which the travel occurred (ex: September 1, 2010 thru August 31, 2011. A copy of the updated forms for In Service Area Travel, Travel Trip Authorization and the Student Trip Authorization form is on the ‘Employee$’ on Texas (J)drive under Forms. Do not use t he old forms.
FRAUDULENT CONCERNS
A vendor may not issue a new invoice to coincide with a purchase order issued after a purchase was made. This action may be prosecuted as fraud, which has a felonious penalty.
CONCLUSION
As stated earlier, the Purchasing process is dictated by State of Texas, Federal, IRS laws and Board Policy. Your cooperation in satisfying these regulations is required.
You are encouraged to seek the help of the Dean, Administrative & Business Services , the Director, Business Services and the Procurement Specialist regarding any questions about any of the purchasing procedures.
FREQUENTLY ASKED QUESTIONS CONCERNING THE PURCHASING
FUNCTION
1. How long does it take to issue a purchase order?
Any requisition received in the Business Office by noon will usually be converted to a purchase order that afternoon. A “rush” order must be followed-up by the requisitioner so that all approvers are notified.
2. What copy of the purchase order do I receive?
You will receive a green copy of the purchase order.
3. May I place an order from the copy returned to me?
Do not call the vendor to place the order with this copy. The result could be a duplication of shipments.
4. May I request the original purchase order be sent to me?
No. If the order is placed by mail or by fax there is less chance that an order will be shipped incorrectly. In addition, the vendor receives our terms and conditions that are noted on the purchase order. The department must give all supporting documentation to the Procurement Specialist so that the order can be placed in a timely manner.
5. Is it possible that payment can be made before I receive the merchandise?
Yes, but a purchase order will be issued. The purchase requisition must have the words "Prepayment Required" placed within the PO Comments Section of the online requisition. The requisition should state the date the payment is needed. The department must give all supporting documentation to the Procurement Specialist so that the order can be placed/paid in a timely manner.
6. Could I possibly purchase the items I require and be reimbursed?
No. Anyone obligating the College's funds without a purchase order will be responsible for paying the vendor.
7. Is it possible that I could obtain an emergency purchase order number?
See emergency purchases section of this manual.
8. May I obtain a purchase order number by calling the Business Office?
No. The Procurement Specialist will mail, email or fax the purchase order to the vendor. The purchase order information is available through Empower under Vendor Inquiry .
9. May I ask a vendor to hold an item for me in anticipation of a forthcoming purchase order?
No. Only the purchase order has the authority to obligate the College's Funds. Individuals will be asked to pay for any item placed on hold.
10. Is it possible to purchase an item without a purchase order?
All items must be purchased by an approved purchase order except as noted by Procurement Card and Petty Cash Requirement Sections. Anyone obligating the College's funds without a purchase order will be responsible for paying the vendor.
11. May I accept consignment of goods?
No. The College will not assume the responsibility of the goods being damaged, stolen, or broken. The individual that authorizes the goods to be on campus will be responsible for the payment of the goods if anything should happen.
12. May I preview films, books or other curriculum and then decide to purchase the item?
No. All preview films, books and curriculum require a purchase requisition and purchase order.
When a vendor calls requesting you to preview an item the following is required:
- Obtain a name, telephone and fax number for the vendor calling. Do not verbally authorize the vendor to send the product. This constitutes an expenditure without a purchase order and will be the responsibility of the authorizing person to pay for the item.
- Process a requisition through the online Empower Financial Accounting System and note in the PO Comments Section “for preview and possible purchase. Note the number of days required by the vendor to preview the item on the requisition before payment is required.
- The purchase order will be processed as earlier directed in this manual. If the item will be purchased notify Accounts Payable that an invoice will be forthcoming to purchase the item.
- If the item is to be returned, call the vendor and request a "Return Authorization Number" to return the item and that the purchase order should be cancelled.
1. Take the packaged item with appropriate address labels to the Facility Services department so the item can be shipped out
2. Forward the purchase order green copy to the Accounts Payable Specialist to marked close/cancel.
13. May I adjust the quantities or description of an item on a purchase order?
No. Any adjustments will be treated as a purchase without a purchase order.
14. Are there times I could receive an invoice and not be obligated to pay without a purchase order?
No. Anyone obligating the College's funds without a purchase order is responsible for paying the vendor.
15. Is it possible to use a "Sole Source" statement to purchase goods and services?
Yes. Refer to the Sole Source Procedure.
16. Is it possible to contact only two vendors for bidding purposes?
An effort must be made to locate a third vendor. However, if a third vendor did not respond, make the notation in the back up documentation and on the requisition. The internet now provides a solution to obtaining additional vendors and receiving a quote from them.
17. How do I cancel a purchase order?
See Cancellation/Modification of Orders.
18. Is the College required to re-advertise for bids, if no bids are returned?
Yes. Texas Attorney General Opinion No. DM-4, which was written for a similar question involving counties provides appropriate guidance to school districts. A district must re-advertise for bids if no bids are returned. Obviously, the first question is why? The answers might be in the following questions:
1. Would an advertisement in other newspapers with the county or other counties result in bids?
2. Was the invitation sent to all potential bidders?
3. Was there sufficient time for a bidder to adequately prepare a response?
4. Was the specification unduly restrictive?
5. Was the delivery schedule unrealistic?
GLOSSARY TERMS and THEIR MEANINGS
Split Purchasing: "Districts are not to split projects that would be considered as one project under normal purchasing practices, such as, paving adjoining parking lots surrounding buildings at a campus." Handbook on Competitive Bidding for Texas Public Schools published by Texas Education Agency, Austin, Texas 2010.
Sequential Purchasing: "The time period for which sequential purchases of $25,000 or more in the aggregate must be combined for requesting competitive bids is not well defined. Depending on the individual circumstances and the type of property being purchased, the district's best interest may be better served by requesting bids for a quantity of items sufficient for a few months or an entire year (this also applies to construction, repair, or renovation work). The Texas Attorney General's office has taken a conservative position that, if purchases will be or are reasonable anticipated to be $25,000 or more during the entire year, then the district is to request competitive bids. Business Officers should determine whether an amount that is $25,000 or more was allocated in the budget for certain categories of items, or for like or related types of work." Handbook on Competitive Bidding for Texas Public Schools published by Texas Education Agency, Austin, Texas 2010.
Component Purchases: "If the competitive bidding law applies to the aggregate purchase, districts are not to circumvent the bidding law by purchasing under separate purchase orders related items (component parts) that cannot serve in and of themselves the purpose and function for which the purchase is being made, such as, a refrigerator shell, a freezer shell, and a compressor equipment for food storage." Handbook on Competitive Bidding for Texas Public Schools published by Texas Education Agency, Austin, Texas 2010.
Purchase Order: The purchase order is the only authority to obligate College District funds. It is issued from the Business Office and mailed to the vendors.
Contracted/Professional Services: Licensed companies or individuals providing a service without supplying goods or materials.
BRIEF SUMMARY OF STATE ATTORNEY GENERAL OPINIONS
REQUESTED OPINION FOR: Awarding to a local vendor
REQUESTED OPINION FOR: Restriction to American made materials:
Source Basis: Section 2 of article 2368a, V.T.C.S.
Source Basis: Article 667th, V.T.C.S.
Opinion H-1086: "Accordingly, in our opinion, a county may, as a general matter, not award a contract to one not a low bidder on the sole basis that the said bidder is a local merchant or business man and the low bidder is not a local merchant or businessman. Of course there may exist circumstances in which the proximity of the bidders relates to the determination of the
lowest responsible bidder,' which determination is within the reasonable discretion of the contracting authority."
"The court held that the rule was illegal as a violation of the competitive bidding statute..." (Texas Civil Appeal -- Dallas 1951, no writ):
" Its purpose is to stimulate competition, prevent favoritism and secure
the best work and materials at the lowest practicable price, for the
best interests and benefit of the taxpayers and the property owners.
There can be no competitive bidding in a legal sense where the terms
of the letting of the contract prevent or restrict competition, favor
a contractor or material lman, or increase the cost of the work or of
the materials or other items going into the project."
"The Texas Supreme Court has held that a limitation regarding the source of materials would be an illegal restriction upon competition; in our view the same would be true of a requirement that a bidder be located within the county."
DM 113: "The board of Regents of an independent school district may not, in the absence of clear statutory authority, adopt procurement policies that reward bidders purely on the basis of a bidder's residence or location, the bidder's participation in voluntary school programs, the bidder's compliance with the school district's minority and women business enterprise contracting program, or on the basis of estimates of various economic factors, such as taxes to be paid to the district by the bidder, the amount of local salaries and wages paid by the bidder, or the number of local jobs created by the bidder."
REQUESTED OPINION FOR: Whether an independent school district may, without violating the competitive bidding statues, "act as its own general contractor" in letting bids for renovation and remodeling projects
Source basis: Local Government Code 271.027(b) 271.0275 64 AM Journal 2d Public Works and Contracts 40, at 893
DM 242: "If the independent school district uses its own employees to perform the work on a construction project, it is not necessary to competitively bid the project."
"We conclude, therefore, that an independent school district may, without violating section 21.901 of the Education Code , "act as its own general contractor" in letting bids for renovation and remodeling projects. Of course, the independent school district may be required to competitively bid contracts for materials or services used in the renovation and remodeling projects."
REQUESTED OPINION FOR: Competitive bids necessary for professional services
Source Basis: Section 21.901 of the Education Code
Chapter 271 of the Local Government Code
JM 940: "A contract for the services of a construction management consultant is excepted from competitive bidding by Section 21.907(c) of the Texas Education Code as a contract for "professional services." Contract for the construction of projects subject to the consulting contract must be submitted to competitive bidding in accordance with Section 21.907. A contractor for the construction of a project for which it serves as construction management consultant to a school district."
"A consultant is disqualified from bidding on a particular project in which the formation of the specifications was derived by the consultant. Competitive bid statutes require all bidders to be placed upon the same plane of equality."
REQUESTED OPINION FOR: Is it possible to purchase an item over $25,000 without competitive bids, if, after advertising, no bids are received.
Source basis: Local Government Code 262.023(a)
DM 4: "Bids must be re-advertised on a contract over $25,000 when the initial advertising results in the submission of no bids for the contract. The act imposes no limit on the number of times it may be necessary to advertise the bid until bids are received. The agency may not award because bids were not received to a vendor of their choice."
REQUESTED OPINION FOR: Is competitive bidding required for a contractor selected to operate a food service in a state agency or school?
Source Basis: Section 21.901 of the Education Code
DM 14: "In the absence of statutory authorization, a public body may not delegate, surrender, or barter away statutory duties that involve the exercise of judgment and discretion..."
"...in view of the significant discretion that must be exercised on behalf of a school district in all phases of the competitive bidding process, we conclude that the purchasing function may not be delegated to a food service management company by contract or otherwise."
REQUESTED OPINION FOR: Worker Compensation issues?
Source Basis: Section 21.901 of the Education Code
DM 300: "Labor Code section 406.096 applies to every "building or construction contract" entered into by the State or a political subdivision of the State, no matter how small the subject matter of the contract may be. The University of North Texas is not a "hiring contractor" as defined in Labor Code section 406.141(1) when it hires an individual or a company to perform on campus buildings any activity that constitutes "building or construction" for purpose of section 409.096. An agreement under Labor Code section 406.145 between a hiring contractor and an independent contract affirming that the independent contractor is not an employee of the hiring contractor does not certify that the contractor and any subcontractor is in fact providing worker's compensation coverage to its employees and therefore would not satisfy the certificate requirements of section 406.096"
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