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Purchasing Rules & Regulations Overview of OUS & UO Purchasing & Contracting Rules, Regulations and Policies Presented by: Catherine Susman & Deanne Lahaie-Noll

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Purchasing Rules & Regulations. Overview of OUS & UO Purchasing & Contracting Rules, Regulations and Policies. Presented by: Catherine Susman & Deanne Lahaie-Noll. Purchasing Rules & Regulations. This training is required to obtain and exercise Level 1 and Level 2 Signature Authority. - PowerPoint PPT Presentation

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Page 1: Purchasing Rules & Regulations

Purchasing Rules & Regulations

Overview of OUS & UO Purchasing & Contracting Rules,

Regulations and Policies

Presented by:Catherine Susman & Deanne Lahaie-Noll

Page 2: Purchasing Rules & Regulations

Purchasing Rules & Regulations

This training is required to obtain and exercise Level 1 and Level 2

Signature Authority

Page 3: Purchasing Rules & Regulations

UO Purchasing & Contracting Policy

• Based on Oregon University System Oregon Administrative Rules (“OAR(s)”)

• Designed to provide solid purchasing guidelines and provide greater flexibility as afforded by the OUS rules for departments engaged in purchasing and contracting

• Effective October 1, 2009

• Approved Forms Use Required Oct 5th

Page 4: Purchasing Rules & Regulations

Oregon Administrative Rules

• Chapter 580 – Divisions 61 & 62

• OUS Code of Ethics– Annual Statement– Procurement Evaluation Declaration

• Participation in Competitive Procurement

– Family Members– OUS Employees & Former Employees– Gifts from Vendors

PCS Policy Page 1

Page 5: Purchasing Rules & Regulations

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• Ethics Requirements – OAR 580-061-0000

• Conflicts of Interest– Family Relationships & Employment Conflicts of

Interest

• Gifts

• Internal Controls– Fraud Factors– Segregation of Duties– Management Review

Fundamental Concepts

Page 6: Purchasing Rules & Regulations

OUS Code of Ethics

https://casitweb.uoregon.edu/pcsforms/code-of-ethicsPCS Policy Page 1

Page 7: Purchasing Rules & Regulations

OUS Procurement Evaluation Declaration of No Conflict of Interest

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http://pcs.uoregon.edu/pcs_files/OUS_Procurement_Evaluation_Declaration.pdf

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Conflicts of Interest• ORS 244.040(1) – Prohibits an UO employee from using

employee’s position to obtain personal financial gain for the employee or a relative if the personal financial gain would not otherwise be available for UO employee’s position.

• ORS 244.120 – Concerns handling actual and potential conflicts of interest. An “actual conflict of interest” means any action, decision, or recommendation by an UO employee while acting in the capacity as an UO employee which would be to the private pecuniary benefit of that employee or that employee’s relative. A “potential conflict of interest” means any action, decision, or recommendation by an UO employee while acting in the capacity as an UO employee which could be to the private pecuniary benefit of that employee or that employee’s relative.

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Page 9: Purchasing Rules & Regulations

Family Relationships and Employment

• OAR 580-22-0055(2) – No academic staff member, without permission of the immediate supervisor, shall participate in employment decisions, supervision or grievance adjustment concerning or involving the staff member’s spouse, child or stepchild.

• OAR 571-004-0005(1)(b) – No members of the faculty or administration shall participate in making recommendations or decisions involving employment, compensation, promotion, leave of absence, grievance adjustment, termination, or in the supervision of their relatives without prior permission of their immediate supervisor.

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Page 10: Purchasing Rules & Regulations

Ethics Rules

• Possible to violate the law not just by receiving something of financial value but also by giving or providing something of financial value to a public official.

• The civil penalties for non-compliance are substantial, and the individual is personally liable for such penalties.

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Page 11: Purchasing Rules & Regulations

Gifts– During a calendar year, a University

employee or a relative or member of the household of the employee may not solicit or receive, directly or indirectly, any gift or gifts with an aggregate value in excess of $50 from any single source that could reasonably be known to have legislative or administrative interest in the University.

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Page 12: Purchasing Rules & Regulations

Activity 1Class Materials Purchase

• Department X is purchasing curriculum materials required for a specific class at value of $500.

• The vendor set-up process reveals that the owner of the company is a current UO employee.

• Can UO purchase from this vendor? Would the result be different if this vendor was also teaching a workshop?

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Page 13: Purchasing Rules & Regulations

Internal Controls

• More than one person involved in purchase transaction

• Determine applicable policies & procedures

• Consult staff/campus for advice• Collect maintain documentation• Staff Training

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Fraud Triangle

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Opportunity

• Access to funds

• Access to inventory

• Ability to process transactions

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Factors Contributing to FraudOccurring (2010 ACFE Report)

• Lack of internal controls

• Override of existing controls

• Lack of management review

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Page 17: Purchasing Rules & Regulations

Segregation of Duties

• Department Purchasing Profile

• Examples of Duties:– Commit Funds– Approve Purchases– Receive Goods/Services– Process Invoice Payment– Approve Invoices– Management Review

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Importance of Management Review

• Perception of detection is directly correlated to the occurrence of occupational fraud.

• Management plays a key role in the perception level of any operation they are over.

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Page 19: Purchasing Rules & Regulations

AuthoritiesAuthority to Commit Department Funds

(to allow use of budget funds)

vs.

Signature Authority(enter into a written or oral contract)

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Page 20: Purchasing Rules & Regulations

Authority to internally allow use of department funds

(i.e. who allows the purchase within your department – not who actually

makes the purchase.)

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Authority to Commit Departmental Funds

Page 21: Purchasing Rules & Regulations

• Authority designated from Budget Authority (Dean, Director or Department Head)

• Part of Internal Controls

• No PCS required training

• NOT signature authority or authority to enter into a contract.

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Authority to Commit Departmental Funds, Cont.

Page 22: Purchasing Rules & Regulations

– Examples of Authority to Commit Funds• Department director approves a staff

member to spend $1,500 in dept funds for the purchase a laptop computer

• Department director approves a staff member to submit a hotel agreement for the department’s upcoming seminar to PCS for processing and approval

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Authority to Commit Departmental Funds, Cont.

Page 23: Purchasing Rules & Regulations

Authorities Designation to Commit Funds

UO President

Budget Authority’s Supervisor

Budget Authority

Department Staff23

Page 24: Purchasing Rules & Regulations

Authority to enter into an oral or written contract on

behalf of UO

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Signature Authority

Page 25: Purchasing Rules & Regulations

Signature Authority, cont.

– Examples of Contracts• Proposals/Quotes/Estimates/Letter

Agreements submitted to UO by a contractor for official acceptance

• Contracts/Agreements/MOU• Purchase Orders• Personal Services Agreements (PSC)• Phone & Internet Orders

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Page 26: Purchasing Rules & Regulations

AuthoritiesUO Contract Officers

– UO Contract Signature Authority Delegated to Contract Officers

by UO’s VP of Finance and Administration

– August 30, 2012 Memorandum regarding Delegation of Signature Authority

https://pcs.uoregon.edu/content/commitment-funds-and-delegated-signature-authority

Chain of Delegation

State Board

Page 27: Purchasing Rules & Regulations

AuthoritiesLevel 1 and Level 2 Signature Authority

– Delegated by PCS Director• Level 1 Signature Authority

– Less than or equal to $5,000– Purchase Order, Direct Billing

Invoice– Must use Approved PO Form

• Level 2 Signature Authority– Less than or equal to $25,000– Approved level 2 contract

forms

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PCS Policy Page 14-17

Delegated Department Personnel

Delegated Department Personnel

Delegated Department Personnel

Page 28: Purchasing Rules & Regulations

UO Department Approval Authorization

Obtain by completing

the Department Approval Authorization Form

(online form coming this Fall)

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Page 29: Purchasing Rules & Regulations

Activity 2Software Renewal

• Department X receives a renewal notice and contract amendment from the vendor to renew the software they use for managing their projects.

• The original purchase was $15,000, the renewal amendment gives them the option to renew for an additional 3 years at $5,000/year.

• The Director of Department X tells the Project Manager he approves the 3 year renewal.

• The Project Manager has Level 2 Signature Authority.

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UO Purchasing & Contracting Responsibilities

Programmatic Review

Budgetary Review

Compliance Review

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Page 31: Purchasing Rules & Regulations

UO Purchasing & Contracting Responsibilities

• Programmatic Review– Does the purchase have a business purpose that

relates to department’s objectives and supports UO’s mission?

– Review and confirmation is the primary responsibility of Department’s Budget Authority and their designees.

PCS Policy Page 2

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Page 32: Purchasing Rules & Regulations

University Purchasing & Contracting Responsibilities

• Budgetary Review– Are funds available for purchase?– Budgetary review is the primary responsibility of the

Department’s Budget Authority and their designees. – Departments must ensure funds are available and

properly budgeted prior to making any purchasing commitment.

PCS Policy Page 2

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Page 33: Purchasing Rules & Regulations

UO Purchasing & Contracting Responsibilities

• Compliance Review– Proposed purchase or contract meets all applicable laws,

regulations, policies, procedural requirements and that the purchase or contract is completed using good business practices.

– Compliance review and confirmation is a shared responsibility of PCS and a Department’s Budget Authority and their designees.

PCS Policy Page 2

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Page 34: Purchasing Rules & Regulations

Policies• Qualified Rehabilitation Facilities (QRF)

• Minority, Women Owned, Emerging Small Business (MWESB)

• Printing and Mailing

• Catering

• Confidential Recycling

• Property Control

– Surplus Property Disposal

– High Risk Equipment Tracking

• Public RecordsPCS Policy Page 2

Page 35: Purchasing Rules & Regulations

Internal Approvals

• See Approvals List – Sponsored Projects Services (SPS (formerlly ORSA)

– Information Technology (CIO Approval)

– Business Affairs Office

– Furniture Purchases

– Design and Editing Services

– Marketing and Brand Management

– UO General Counsel Review – Only secured by PCS

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PCS Policy Page 16

Page 36: Purchasing Rules & Regulations

Activity 3 Temporary Services

• Department X needs to hire a obtain

temporary services for a two week project. • Temps, Inc. provides temporary workers with

hourly rates of $13/hour.• Temps-r-Us, Ltd., a Qualified Rehabilitation

Facility (QRF), provides temporary workers with hourly rates of $14/hour

• Which vendor will Department X need to work with to hire the temporary worker?

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Page 37: Purchasing Rules & Regulations

What Dollar Level Requires a Written Contract?

• Personal Services – ANY $ amount– Personal Services are services requiring specialized

skills, knowledge, and resources. Examples include: physician, consultant, artist, etc.

– Personal Services Contract template appropriate

• Goods and Trade Services - $5,000+– Trade services generally do not require specialized skill

and certification. Examples include: janitor, caterer, photocopier maintenance, etc.

– Purchase Order template appropriate

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Page 38: Purchasing Rules & Regulations

UO Purchasing Methods

• Invoice – under $5k• Direct Billing Account – under $5k• Purchase Order – required over $5k• UO Custom Contracts• UO Contract Forms• Vendor Contracts

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PCS Policy Page 4-5

Page 39: Purchasing Rules & Regulations

Procurement Thresholds

• Direct Procurement ≤ $25,000

• Informal Procurement $25,000.01 to $100,000

• Formal Procurement $100,000.01 +

• Alternative ProcurementPCS Policy Page 4-12

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When Competition is not Required

• Price Agreements: When competitive requirements have been fulfilled & the contract is open for UO to use.– State of Oregon Contracts - ORPIN– Other Public Entity Price Agreements– Retainer Contracts– Cooperative Agreements

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PCS Policy Pages 7, 8

Page 41: Purchasing Rules & Regulations

When Competition is not Required, Cont.

• Emergency Contracts

• Sole Source

• Special Entity

Note: PCS review and approval of ANY Emergency or Sole Source contract is required before proceeding with procurement.

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PCS Policy Pages 9, 10

Page 42: Purchasing Rules & Regulations

When Competition is not Required, Cont.

• Exemptions from Competition– Department internally reviews and determines

if an exemption applies and if using the exemption is in the best interest of the department and UO

– PCS available for assistance and support– PCS review and approval of exemptions

required before proceeding with procurement

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PCS Policy Pages 10-12

Page 43: Purchasing Rules & Regulations

Activity 4Computer Purchase

• Department X is purchasing 20 computers for an estimated value of $1,500 per computer.

• What considerations or steps need to be taken when proceeding with this procurement.

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Activity 5Subscription Purchase

• Department X is excited as they are purchasing enterprise-wide software including hiring a consultant to customize, install and deploy the software in the amount of $300,000. The department just learned that there is an exemption from competition for software purchases.

• What approvals are required to complete the purchase?

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Required Records

– Minimum specifications– All award criteria– Solicitation documents– Documentation of

advertisement– Vendor communications– Vendor quotes– Copy of purchase

document

– Documentation of all required approvals

– Documentation of purchase completion

– Documentation of purchase payment

– Notes page to document vendor performance or department satisfaction

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PCS Policy Page 6 & 7

Page 46: Purchasing Rules & Regulations

Required Records, cont.

–Individual departments are the department of record for purchasing and contracting transactions

–UO Archives Record Retention Schedule http://libweb.uoregon.edu/records/schedule/sections.html

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Activity 6Public Records Request

• 3 year contract for hiring temporary personnel is expiring.

• A potential vendor has submitted a public records request to the Public Records Office to obtain copies of the documentation for the prior solicitation and all records related to the current contract.

• The Public Records Office has requested these records. What is your role in responding to the request from the Public Records Office?

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Activity 7Parent’s Guide

Department X would like to have “The Copy Store” print and distribute a guide that will be

mailed to parent’s of potential students. • 10,000 guides will be printed and mailed • The cost to print each guide is $10• The cost to mail each guide is $5

What are the steps and approvals needed for this purchase?

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Page 49: Purchasing Rules & Regulations

Activity 8Hosting Conference

• Director of Department X tells his assistant they will be hosting a conference at the Red Lion and lunch will be covered as part of the conference.

• The Director asks the assistant, who has Level 2 Signature Authority, to place the reservation and confirm attendance.

• The Red Lion sends over a letter with the menu and attendance confirmation to be signed.

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Activity 9Consultant Purchase

• Department X is hiring a consultant to analyze data generated via a campus survey and is funded with grant $’s. The contract may exceed $35,000 for year one and they would like to have the option for two additional years.

• A firm was named in the grant to perform this work.

• Is competition required? If no, why not? If yes, what type?

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Page 51: Purchasing Rules & Regulations

• Policy• Practitioners Guide• Training• Templates• Written Procedures and Instructions• Website• Direct assistance from PCS Staff via phone, email and

in-person meetings; and • Central Emails:

[email protected][email protected][email protected][email protected]

Tools & Support

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Questions

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