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Procurement Authority

About this Policy

Procurement Authority

Policy Number: 26101


Effective Date:
December 12 2017

Last Updated:

Responsible Office:
UM System Supply Chain

Responsible Administrator:
Chief Procurement Officer

Policy Contact:

UM System Supply Chain

Categories:
Finance
Procure to Pay
Authority


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Scope

This policy provides guidance for the procurement of goods and services by the University as well as outlining the authority and responsible parties for making purchases.

Reason for Policy

To outline the authority and responsibilities of making purchases for the purpose of maximizing the value of the money spent by the University while operating in compliance with the Board of Curators’ Collected Rules and Regulations.

Policy Statement

Delegation of Authority
The government of the University of Missouri is vested in the Board of Curators by the constitution of the State of Missouri, Article IX Section 9(a).  The Board has established and approved Collected Rules and Regulations governing and controlling purchasing practices for the University.  The Board has delegated to the President the authority for procurement of supplies, equipment and services.  Authority is further delegated to the Vice President for Finance and Administration to govern and manage the purchasing and contract operations and negotiations.  The Vice President for Finance and Administration has delegated the purchasing and contracting operations to the Chief Procurement Officer.  The authorization of each party is outlined below.

The Board of Curators has delegated to the President authority for procurement of supplies, equipment and services in compliance with the following policies from the Collected Rules and Regulations.

The President is authorized to:

  • Participate in cooperative purchasing arrangements with any public entity or group, a.k.a. Group Purchasing Organizations (GPO’s) and execute purchase contracts for the University, procure supplies and equipment for the use at the University of Missouri Health Care (UMHC) at contract prices arrived through bids or negotiations by a consortium when in the best interest of the University.
  • Reject bids, reissue bids, or purchase items or services on the open market if they can be purchased at a better price than bid.
  • Contract with other schools and colleges and with outside agencies for educational and training programs and for the use of facilities and instructors for regular University or extension courses.
  • Contract with authors relating to publications of books by the University Press.
  • Contract for the conduct of intercollegiate athletic programs.
  • Execute agreements for all intercollegiate athletic contracts for the scheduling of athletic contests, for broadcasting and telecasting athletic contests and for programs and concessions covering athletic contests.
  • Contract for the purchase of items for resale in the normal operations of the University’s bookstores or other auxiliary services, and waive bidding requirements when it is in the best interests of the University.
  • When an emergency condition arises, and the need cannot be met through normal procurement methods, the emergency purchase shall be made with such competition as is feasible under the circumstances. 

The Chief Procurement Officer has the authority for the following: Authority for administering the Board of Curators and administrative purchasing policies and managing the purchasing operations has been delegated to the Chief Procurement Officer. The functional role and authority delegated to the Chief Procurement Officer includes the following:

  • Oversee procurement activities of the University in accordance with Board of Curators procurement policies and University administrative policies.
  • Develop and interpret procurement policy, prepare Board recommendations, resolve questions /disputes / protests, participate in system-wide buying, prepare and issue management reports, and promote good vendor relationships.
  • Approve and/or sign contracts, agreements, equipment leases and purchase orders. Provide advice and guidance on all University procurement activities as needed. Hold meetings with all Procurement staff, on a regular basis, and encourage their educational development.
  • Delegate purchases under $10,000 without solicitation of bids to departments.
  • Solicit bids for purchases of $10,000 or more from known suppliers.
  • Advertise for bids on purchases of $25,000 or more in at least two newspapers of general circulation in such places that are most likely to reach prospective bidders.  Electronic media may be used in lieu of newspaper advertisements if and when it is believed it will better serve the needs of the University.
  • Approve the purchase of unique items or services documented as a sole source with a cost of $100,000 or more without bids, except for other design professional agreements that require approval from the Director of Facilities Planning and Development.
  • Approve rental and lease agreements for equipment over $500,000 for competitively bid contracts, or $100,000 for negotiated contracts, for the term of the contract not to exceed five years. 
  • Delegate the UMHC and medical school preferred provider and pharmacy agreements.
  • The University may also use pre-existing procurement contracts of public entities or groups when the procurement methods and procedures are comparable to those of the University, and all parties (sellers and buyers) are in agreement that the University is eligible for pricing, terms and conditions of these agreements.

When an emergency condition arises, and the need cannot be met through normal procurement methods, the emergency purchase shall be made with such competition as is feasible under the circumstances. 
Additional Reviews and Approvals:

  • General Counsel of the University must approve all contract documents as to form. 
  • Additional approvals may also be needed in the case of information technology and telecommunications purchases.(refer to BPM 1204) 
  • Software licenses or software maintenance agreements over $25,000 or computer equipment purchases over $100,000 must be approved by the Vice President for Information Technology.

Board of Curators approval must be obtained for:

  • Purchases of unique items or services which do not lend themselves to competitive bidding when the cost is more than $500,000, except for proprietary licenses or maintenance agreements necessary for operations of University computing equipment, in which case the President shall be authorized to enter into the contract a.k.a. Sole Source
  • Consultant agreements, when arrived at through a Request for Qualifications (RFQ) or sole source, if they exceed $500,000.  Consultant agreements, when at through a Request for Proposal (RFP) where price is a component of the evaluation criteria, do not require Board approval.
  • Rental and lease agreements on equipment for more than $500,000 for a sole source contract.
  • Reports in lieu of approvals: An annual report shall be provided to the Board for purchases and competitively bid services contracts when the cost is more than $1,000,000; equipment leases when the total cost is more than $1,000,000 or when the lease term is more than five years.

Department Authority and Responsibility
Departments may make purchases under $5,000 by authorized signers in each business unit as specifically allowed in University policy.  It is the responsibility of the administrative head of the ordering department to assure that purchases initiated by departmental staff are made in accordance with University policies and in the best interest of the University.

Execution of Documents: CRR 70.010 – General Execution of Corporate or Board Instruments

Procurement Restrictions
The following are prohibited under this policy:

  • Purchases for employees – purchases for personal or private use by University employees is prohibited.  Exceptions will only be made under special contracts, which may include microcomputers and related peripherals. 
  • Splitting or Stringing Purchases – Splitting or Stringing Purchases with the willful intent to circumvent University policies is prohibited.  The act of splitting or stringing purchase may result in the withdrawal of delegated purchasing authority.  In addition, the responsible person may be subject to disciplinary actions including obligating the employee making such purchases to pay for the items or services.
  • Confirming orders – purchases under $5,000 where the supplier will not accept a procurement card, a requisition must be submitted and a purchase order issued.  Committing the University to purchase without the issuance of a purchase order violates the delegation of authority, except as authorized by Supply Chain.

Employee Liability
Any employee who commits the University to a purchase, sale, lease or other arrangement without proper authorization may be personally liable for the transaction.  The University is under no obligation to authorize payment for expenditures not made in compliance with applicable policies.  University employees acting in a procurement capacity may be liable for damages to the University if they injure the University through willful misconduct, bad faith, dishonesty or criminal negligence.

Definitions

Splitting or Stringing Purchases - the practice of issuing multiple purchase orders, procurement card transactions, requisition, petty cash transactions, or other methods of purchasing of like items or services with the willful intent of circumventing purchasing policy.

RFP - a formal Request for Proposal from suppliers that also often become part of the resulting contract.  It is a formal process that is used when multiple factors are to be considered in making a decision based on best value.  It is the most fair and equitable tool available for public procurement.  

RFI - Request for Information is used to determine what products and services are potentially available in the marketplace to meet a buyer needs.  It is typically followed by an RFQ or RFP but an RFI is not a mandatory prerequisite to writing an RFP. 

RFQ - a request for qualifications is a standard business process that can be implemented before initiation of the RFP process.  The purpose is to invite suppliers into a bidding process to bid on specific products or services and are best suited to products and services that are as standardized and as commoditized as possible, as this makes each supplier's quote comparable.

RFQ (2) - a request for quotation is commonly used on low dollar purchases when you know what you want, but need to know how much it will cost.  It is used to gather vendor information from multiple vendors to generate a pool of prospects. 

RFB - a Request for Bid is a formal request for pricing that is awarded to the lowest responsible and responsive bidder whose bid conforms to the specifications and meets all other requirements and criteria set forth in the RFB. 

Sole Source - the Sole Source process is used when the item or service is only available from one source with no other distribution network is available.  These are treated as justified exceptions to the normal bidding procedures.  Documentation stipulating the reason for the sole source and reasons why this is the case must be submitted and approved by the AVP/CPO.

GPO - a group purchasing organization is an entity that is authorized to act as an agent for a group of individuals or entities who are members of that GPO.  The GPO bids goods and services and negotiates the best deals in which the members can then access the contracts. 

Accountabilities

UM System Supply Chain:

  • Provide a role of guidance and assistance to University departments to ensure that purchases are made in a manner that provides the best value to the University
  • Provide organization and administration of unified, fair and effective purchasing services for all divisions and departments of the University
  • Acquire equipment, supplies and services for all departments of the University in an economical, expeditious and reasonable manner in accordance with University policies
  • Identify qualified suppliers and develop and maintain good business relationships with them
  • Provide assistance to departments in preparing specifications and in analysis of bids received
  • Perform final negotiations, award contracts and assure supplier performance compliance
  • Maintain contracts with suppliers for many supplies, equipment or services with authorized suppliers.  Contract pricing and performance is based on the University’s overall anticipated volume of purchases during the contract period. 

Departments:

  • Collaborate with UM System Supply Chain for purchases over specified limits that require solicitation of bids
  • Ensure requisitions and/or purchase orders are approved by properly authorized employees
  • Obtain needed supplies, equipment or services from authorized suppliers and contracts

Additional Details

Forms

Sole Source Justification Form (only available in PeopleSoft during the requisitioning process)

Related Information

Collected Rules and Regulations: General Execution of Instruments
Collected Rules and Regulations: Purchasing
Policy 12004 on Information Technology and Telecommunication Purchases

History

This policy combines the following former policies:

  • Business Policy Manual 301 – Delegation of Authority (revised 10/20/2010)
  • Business Policy Manual 302 – Organization (revised 10/20/2010)
  • Purchasing Policy Manual 101 – Executive Summary
  • Purchasing Policy Manual 102 – University of Missouri Procurement Staff
  • Purchasing Policy Manual 304 – Unauthorized Purchases
  • Purchasing Policy Manual 504 – Restrictions

Procedure