Texas State Purchasing Policy UPPS No. 05.02.02
Issue No. 4
Effective Date: 03/31/2011
Review: October 1 E2Y
01. POLICY STATEMENTS
01.01 The purpose of this UPPS is to identify policies and procedures to use when purchasing goods and services for Texas State with university funds.
01.02 In accordance with The Texas State University System (TSUS) Rules and Regulations, Chapter III, Section 10, Contracts, Purchases, and Agreements, Subsection 10.2, Authority, Paragraph 10.23, the president has delegated authority to the director of Purchasing to obligate university funds for the purchase of goods or services through the approval and issuance of purchase orders.
01.03 The director has the authority, and is responsible, for promulgating and communicating Texas State purchasing policies and procedures. Generally, this information is made available to the university community on the Purchasing Office’s Web site and via direct correspondence to departments, as needed.
a. The director of Purchasing may, at his or her discretion and with the concurrence of the associate vice president for Financial Services, delegate purchasing, processing, or approval authority to another university employee or state agency.
b. This delegation may include soliciting for bids, proposals, offers, quotes, or other expressions of interest; evaluating responses received; negotiating terms and conditions; or obligating university funds for the purchase of goods or services.
c. Employees with delegated purchasing authority have reporting responsibility to the director of Purchasing. The director will determine the level of delegated authority and the training required and will be responsible for evaluating the employee performance in this area.
d. This delegation may be emergency, general, specific, or limited.
e. Delegation should be confirmed with a Memorandum of Understanding (MOU).
01.04 State and federal laws, The Texas State University System Rules and Regulations, and university policies and procedures strictly prohibit the splitting of orders solely to circumvent the competitive solicitation requirements and processes, or other applicable purchasing requirements.
01.05 Texas State shall assume no liability for payment of obligations incurred by unauthorized persons.
a. Persons making unauthorized purchases may be held personally liable for any damages resulting from the repudiation of the contract or purchase order. This personal liability includes paying for the unauthorized purchase with personal funds, or personally reimbursing the university for any expenses incurred.
b. The employee may also be subject to further disciplinary actions consistent with university policies.
01.06 This policy will apply when using all sources of funds, with the exception of foundation funds, for the procurement of goods and services.
02. PROCEDURES FOR THE ACQUISITION OF GOODS AND SERVICES
02.01 Pursuant to The Texas State University System Rules and Regulations, Chapter III, Section 17, Best Value Procurement, Texas State may acquire goods or services by the method that provides the “best value” to the institution, including the following:
a. Competitive bidding;
b. Competitive sealed proposals;
c. Group purchasing programs;
d. Open market contracts; or,
e. Catalogue purchase.
02.02 In determining best value to an institution of higher education, Texas State shall consider the following criteria:
a. Purchase price;
b. Reputation of the vendor and of the vendor's goods or services;
c. Quality of the vendor's goods or services;
d. Extent to which the goods or services meet the institution’s needs;
e. Vendor’s past relationship with the institution;
f. Impact on the ability of the institution to comply with laws and rules relating to historically underutilized businesses (HUBs) and to the procurement of goods and services from persons with disabilities;
g. Total long-term cost to the institution of acquiring the vendor’s goods or services;
h. Use of material in construction or repair to real property that is not proprietary to a single vendor, unless Texas State provides written justification in the request for bids for use of the unique material specified; and
i. Any other relevant factor that a private business entity would consider in selecting a vendor.
02.03 Procurements of goods and services must comply with state and federal laws; The Texas State University System Rules and Regulations; and university policies and procedures
02.04 Purchase orders are not intended to be used strictly as a payment tool.
a. The purchase order must be created prior to the commitment or obligation.
b. Purchase orders submitted after the commitment has been made or after the goods and services are received, will constitute non-compliance and require documented justification for the action.
03. PROCUREMENT METHODS
03.01 Institutional Contracts – Established university contracts and price agreements allow requisitioning departments to purchase commodities and services directly from the vendor. The “best value” procurement solicitation and award process has already occurred; therefore, individual purchases do not require further competitive solicitation or bidding in order to award an order. Institutional contracts should be utilized whenever possible. All current institutional contracts will be available through the Purchasing Office’s Web site.
03.02 Procurement Card (P-card) – The P-card should be utilized for allowable low-dollar procurements in lieu of processing a purchase requisition and creating a purchase order. For P-card applications and guidelines, see the Purchasing Office’s Web site.
03.03 State Use/Texas Industries for the Blind and Handicapped (TIBH) – Commodities and services that are available through the Texas Council for Purchasing from People with Disabilities (currently TIBH) must be purchased when state-appropriated funds are being used, unless adequate justification for the non-utilization of State Use/TIBH products or services is furnished.
03.04 State of Texas Contracts – For more information, contact the Purchasing Office or refer to http://www.window.state.tx.us/procurement/tools/.
a. Automated and Non-automated Term Contracts – The Texas Purchasing and Support Services (TPSS) Division of the Comptroller’s Office establishes term contracts for the purchase of goods and services by state agencies.
b. Texas Multiple Award Schedules (TXMAS) contracts – Certain federal GSA schedule contracts are negotiated with the vendor by the TPSS for providing goods and services to state agencies.
c. Department of Information (DIR) contracts – The DIR Go DIRect Program allows Texas State to purchase items directly from a DIR-contracted vendor. Most DIR contracts are Go DIRect, but some contracts are not. For those non-Go DIRect orders, customers make their purchase orders payable to DIR and send orders and payments directly to DIR.
d. Council on Competitive Government (CCG) contracts –The CCG identifies state services that are commercially available. After CCG staff review the services, they make recommendations to the CCG as to whether the services may be provided more effectively through competition with private sector providers or state agencies.
e. Agency Piggyback Contracts – Agency Piggyback Contracts are those that have been competitively bid in accordance with State of Texas statutes, rules, policies, and procedures and extended for the use by other state agencies.
03.05 Purchasing Groups and Co-op Contracts – Texas State is a member of numerous purchasing groups and co-ops, which allow purchases to be made directly from the vendor, as the competitive solicitation or negotiation process has already occurred. Contact the Purchasing Office for further information and the most current list of purchasing groups and co-ops.
03.06 Competitive Solicitations (Quotes, Bids, Proposals, or Offers) – If the “best value” for the commodity or service is not obtained from one of the above listed procurement methods, the end user is to follow the competitive solicitation requirements and processes. If competitive bidding is either not practical or not advantageous to the university, the Request for Proposal (RFP) process may be used.
03.07 Single or Proprietary Source Purchase – A proprietary purchase is justified only when adequate documentation is furnished to justify that competition is not available due to a lack of an equivalent product or service.
04. PROCEDURES FOR DEVELOPMENT OF SPECIFICATIONS
04.01 A specification is a detailed functional description of a product or service. A specification must be simple, clear, accurate, competitive, and flexible. If a specification does not allow for competition, then it is considered proprietary.
04.02 A specification should communicate “salient features” of the commodity or service needed by the end user.
04.03 A specification should also communicate minimum acceptable features of the commodity or service needed by the end user.
05. PROPRIETARY SPECIFICATIONS JUSTIFICATION PROCEDURES
05.01 When a specification limits consideration to one manufacturer, one product, or one service provider, and the amount of the purchase exceeds $5,000, a written proprietary justification must be provided to support the purchase.
05.02 The Proprietary Purchase form has been developed to assist in the justification documentation process. The account manager must complete the form and state the following:
a. The proprietary or unique features of the item and why these features are required; and
b. Why no competing product can meet the needs.
06. PROCEDURES FOR ADDRESSING COMPETITIVE SOLICITATION REQUIREMENTS
06.01 When competitive solicitation is required, quotes, bids, proposals, offers, or other expressions of interest must be solicited and obtained from potential vendors for purchases in excess of $5,000, unless justification for a proprietary or single source can be properly documented.
06.02 The account manager is encouraged to solicit and purchase from Texas certified HUBs to the fullest extent possible. For assistance in locating qualified HUBs, contact the Texas State HUB coordinator or HUB specialist. For further information, refer to UPPS No. 05.02.04, Texas State Historically Underutilized Business Outreach Program (HUB-OP).
06.03 Current competitive solicitation limits, regardless of the source of funds, are as follows:
a. $0 - $4,999.99: Only one quote is required; however, requisitioning departments are encouraged to obtain more than one bid. Purchases from a HUB are encouraged to the fullest extent possible.
b. $5,000.00 - $24,999.99: Three verbal or informal bids are solicited, with at least two being from Texas-certified HUBs (e.g., minority-owned or woman-owned businesses).
c. $25,000 or greater: Formal bids, proposals, or offers are solicited, with at least two being from Texas-certified HUBs (e.g., minority-owned or woman-owned businesses).
06.04 Exceptions to above bid requirements are as follows:
a. Exempt purchases; or
b. Adequately justified proprietary purchases of less than $25,000.
06.05 All procurements that exceed $25,000, without regard to the source of funds, may be posted on the Electronic State Business Daily (ESBD), an electronic bulletin board managed by TPSS, if there is an advantage to do so. Procurements exceeding $100,000 should be posted unless there is documented justification explaining why it was not in the university’s best interest to do so.
07. PROCEDURES FOR EXEMPT PURCHASES
07.01 Exempt purchases are purchases that are exempt from the competitive solicitation process. Exempt purchases include the following:
a. Classified advertisements (e.g., newspaper and magazine advertisements);
b. Conference expenses (expenses related to conference room services such as audio/visual/network and food services; however, goods purchased for attendees or transportation services are not exempt);
c. Direct publications (e.g., direct subscriptions, prepared videos, and software packages purchased directly from the developer);
d. Exhibit space (e.g., booths for display purpose);
f. Hotels and conference rooms;
g. Internal repairs, except as noted in Section 09;
h. Inter-agency purchases (purchases from other state agencies);
i. Guest lecturers or speakers (e.g., fees for one time only, not for continuous engagements);
j. Legislative information services;
k. Bill analysis services;
l. Membership fees and dues;
m. Moving expenses (employee);
n. Newspaper and magazine subscriptions directly from the publisher;
o. Registration fees and associated books and materials;
p. Student travel (except for chartering aircraft);
q. Purchases from federal agencies;
r. Purchases from the Texas Department of Criminal Justice;
s. Purchases from Texas Industries for the Blind and Handicapped; and
08. EMERGENCY PROCUREMENT PROCEDURES
08.01 An emergency procurement (purchase) is defined in Texas Administrative Code Title 34, Part 1, Chapter 20, Subchapter C, Rule 20.32, Definitions as “a situation requiring the state agency to make the procurement more quickly to prevent a hazard to life, health, safety, welfare, or property or to avoid undue additional cost to the state.”
a. The director/assistant director of Purchasing or P-card administrator has authority to exempt emergency procurements from Texas State purchasing policies and procedures.
b. An emergency procurement is defined as one required to protect and safeguard employees and assets of the university.
c. Whenever practical, prior to authorizing a vendor to fulfill any emergency procurement request, the originating department shall attempt to develop an estimate of the cost to obtain the goods or services identified as necessary to resolve the emergency situation. If the cost is reasonably expected to exceed the threshold required for competitive solicitations, the originating department shall attempt to solicit quotes, bids, proposals, offers or other expressions of interest.
1) If possible, quotes, bids, proposals, offers or other expressions of interest, either informal or formal, as appropriate to address the emergency situation, are solicited from the minimum required number of vendors, including certified HUBs, prior to the procurement action.
2) If it is impossible to obtain an estimate or solicit quotes, bids, proposals, offers or other expressions of interest to address the emergency situation in a timely fashion, the procurement file is to reflect this fact through the preparation of written documentation, signed by the appropriate account managers with a copy to the director of Purchasing.
3) A copy of the documentation, noted above, is included as supporting documentation when the procurement request file is routed for the necessary approvals and processing.
d. If the estimated cost of the procurements identified as necessary to resolve the emergency situation is $ 25,000 or greater, or cannot be readily determined, the originating department shall attempt to notify the director of Purchasing and the appropriate deans or directors or their designees, of the necessary procurement actions, in advance and in writing.
1) The notification shall include the information required in Sections 08.02 a., b., and c., below, to document the emergency.
2) In addition, the originating department shall prepare an Emergency Proposed Procurement Notice for posting on the Electronic State Business Daily (ESBD) on the form prescribed by director of Purchasing.
3) The completed Emergency Proposed Procurement Notice form is forwarded for immediate posting to the Purchasing Office, or, if ESBD posting authority has been delegated by the director of Purchasing, to the appropriate ESBD posting designee.
4) The documented emergency situation circumstances shall dictate if a minimum ESBD posting time is required.
5) If posted by a delegated ESBD posting designee, a copy of the posted notice is forwarded to the attention of the director of Purchasing when posted.
08.02 Following a successful procurement, an emergency purchase requires that a written justification be submitted to the Purchasing Office. The justification, signed by the responsible account manager, must state the following:
a. The reason for the emergency purchase (i.e., explanation of what the emergency is and what caused the emergency);
b. The specific financial or operational damage (as opposed to a general claim of loss or damage) that will occur if needs are not satisfied immediately; and
c. Why the needs were not or could not be anticipated so that items could be procured through regular procurement procedures.
09. INTERNAL REPAIR PURCHASE PROCEDURES
09.01 An internal repair is defined as a repair to Texas State-owned equipment that cannot be reasonably defined prior to the actual repair, and the extent of which cannot be determined until the equipment is disassembled. Internal repairs are usually the result of an unexpected, basic service outage, such as the failure of a building’s HVAC system or the mechanical breakdown of a vehicle. Internal repairs must contain labor and may also include parts.
09.02 If it is determined that an internal repair meets the criteria of an emergency procurement, see Section 08 above for the appropriate procurement process to follow and the documentation that is required.
09.03 If an internal repair is expected to exceed $ 5,000, whenever practical, a “not to exceed $ x,xxx.xx without written authorization” purchase order is issued to the vendor selected to perform the repairs.
09.04 The following is required as supporting documentation when a purchase is determined to meet the definition of a non-emergency internal repair purchase:
a. A written statement is prepared and signed by the account manager that the necessary repairs could not be reasonably defined prior to the actual repair and the extent of which could not be determined until the equipment was disassembled; and
b. If the estimated cost is identified as $ 25,000 or greater or cannot be readily determined, the originating department shall notify the director of Purchasing and the appropriate deans or directors, or their designees, of the necessary procurement actions, in advance and in writing.
1) The notification shall include a statement that the needed repairs meet the university’s definition of internal repairs.
2) In addition, the originating department shall prepare a Proposed Procurement Notice for posting on the ESBD on the form prescribed by director of Purchasing.
3) The completed form is forwarded to the Purchasing Office, or, if posting authority has been delegated by the Purchasing Office, to the appropriate ESBD posting designee for immediate posting.
4) The minimum ESBD procurement notification posting time shall be appropriate for the documented internal repair situation.
5) If posted by a delegated ESBD posting designee, a copy of the posted notice is forwarded to the attention of the director of Purchasing when posted.
10. PROFESSIONAL SERVICES
10.01 Professional services are defined by Texas Government Code §2254, Professional and Consulting Services. These services must be provided in connection with a person who is licensed and employed in the profession or practice.
10.02 The following are considered to be professional services:
c. Land architecture
d. Land surveying
g. Professional engineering
h. Real estate appraising
i. Professional nursing
10.03 Contact the Purchasing Office for guidelines on processing requests for the purchase of professional services.
11. PROCEDURES FOR ADVANCE PAYMENTS
11.01 Generally, prepayment is not authorized for the purchase of supplies, materials, equipment, or services. When utilizing state-appropriated funds, the following are exceptions:
a. Library purchases for university libraries;
b. Payments to federal and other state agencies;
c. Lease payments;
e. Rental fees for a meeting room or exhibit booth;
f. Annual maintenance agreements; and
g. Registration fees.
11.02 When institutional funds are being used, advance payments will be made to vendors only when no practical alternative exists to satisfy a need, when definite price savings can be realized, or when it is determined that it is in the best interest of the university to do so.
a. Advance payments will not be made to vendors who sell to some classes of customers without advance payments, but require such payments from Texas State, unless there is no alternative and the payments are approved in advance by the director of Purchasing and the associate vice president for Financial Services.
b. Payments from agency funds and Athletic Department funds do not require prior approval.
12. SPECIAL PURCHASING PROCEDURES AND REQUIREMENTS
12.01 Purchase of food, refreshments or awards – refer to UPPS No. 03.01.03, Purchase of Alcohol, Awards, Flowers, Food, or Refreshments.
12.02 Purchase of motor vehicles – refer to UPPS No. 05.05.03, Fleet Management Plan.
12.03 Leasing land, space, and other facilities – refer to FSS/PPS 08.01.01, Facilities Leases.
12.04 Lease or purchase of equipment and other commodities – contact the Purchasing Office.
12.05 Contracting with consultants – refer to UPPS No. 03.04.01, Contracted Services, Including Consultants, Speakers, and Other Services.
12.06 Contracting with independent academic or professional personnel – refer to UPPS No. 03.04.01, Contracted Services, Including Consultants, Speakers, and Other Services.
12.07 Memberships – refer to UPPS No. 06.04.01, Memberships in Professional Organizations.
12.08 Subscriptions – Subscriptions may be processed by using a P-card or by forwarding a purchase requisition through the Purchasing Office. When a subscription is required, it is suggested that a lead time of approximately six weeks be given; however, when state-appropriated funds are used, subscriptions may not be paid more than six weeks in advance of the renewal date. The "ship to address" should be in the following format to minimize delays in receiving the subscription:
Texas State University-San Marcos
Name of Department/Office
601University Dr., Bldg Name-Room #
San Marcos, TX 78666
12.09 Moving expenses – State-appropriated funds may be used to pay the reasonable and necessary expenses incurred in moving the household property for a state employee only if:
a. The employee is being reassigned from one designated headquarters to another designated headquarters of the same agency;
b. The agency determines that the best interests of the state will be served by the reassignment; and
c. The distance between the current and future designated headquarters is at least 25 miles.
Reimbursement for moving expense requires the approval of the appropriate Cabinet officer.
12.10 Purchase of real estate – refer to UPPS No. 08.04.01, Real Property Acquisitions.
12.11 Catering – refer to UPPS No. 05.03.02, Catered Events-Policies.
12.12 Purchase of alcoholic beverages – refer to UPPS No. 05.03.03, Alcoholic Beverage Policy and Procedure.
12.13 Purchase of wireless (cell) equipment and services – refer to UPPS No. 05.03.10, Wireless Cellular Communications Services.
12.14 Contracting for temporary staff or outsourcing – refer to UPPS No. 04.04.22, Hiring Temporary Workers through Third Party Service Providers.
12.15 Purchase of security systems – refer to UPPS No. 05.04.04, Texas State Security Alarm Systems.
12.16 Lease of photocopiers – refer to UPPS No. 05.03.20, Quick Copy Service.
12.17 Live animal purchase – refer to UPPS No. 02.02.05, Animal Care and Use Policy.
12.18 Purchase of radioactive materials – refer to UPPS No. 04.05.07, Radiation Safety.
12.19 Purchase of hazardous materials – refer to UPPS No. 04.05.06, Hazardous Materials and Waste Management.
12.20 Purchase of new construction or remodeling services – refer to UPPS No. 01.03.02, University Construction Policy.
12.21 Purchases from another state agency – refer to UPPS No. 03.04.07, Interagency or Interlocal Cooperation Contracts or Agreements.
12.22 Purchase of furniture and equipment for new or renovated buildings – refer to FSS/PPS 05.01.04, Furniture and Building Renovations.
12.23 Purchase of university vehicles and signs – refer to FSS/PPS 05.02.01, Standard University Colors for Vehicles, Signs and Other Materials.
12.24 Purchase of electronic and information resources – Chapter III, Paragraph 19.3 of the Texas State University System Rules and Regulations requires central review and oversight of all university acquisitions of information technology by the vice president for Information Technology or designee, “including, but not limited to, computing hardware software, and hosting services, regardless of source of funds.” Administrative heads shall consult with the vice president for Information Technology or designee regarding purchases of technology products or services which are not yet centrally supported by the Information Technology Division.
Also, to optimize their accessibility, usability, security, and privacy, all electronic and information resources developed or procured for use with the TXSTATE.EDU network domain shall comply with the applicable provisions of Texas Administrative Code, Chapter 213, Subchapter C, Rules §213.37 and §213.38, dealing with the procurement of Electronic and Information Resources in Institutions of Higher Education, commonly known as TAC 213.
12.25 Purchase of services performed on campus – refer to UPPS No. 04.04.17, Staff Background Checks.
12.26 HEAF purchases – refer to UPPS No. 03.02.05, Higher Education Assistance Funds (HEAF).
13. REVIEWERS OF THIS UPPS
13.01 Reviewers of this UPPS include the following:
Director, Contract Compliance October 1 E2Y
Director, Purchasing October 1 E2Y
14. CERTIFICATION STATEMENT
This UPPS has been approved by the following individuals in their official capacities and represents Texas State policy and procedure from the date of this document until superseded.
Director of Contract Compliance; senior reviewer of this UPPS
Associate Vice President for Financial Services
Vice President for Finance and Support Services