Policy Manual

The function of the Purchasing Office is the organization and administration of centralized purchasing services for all departments of the university. In providing these services and in accordance with sound business practices, the office seeks to realize for the university the maximum value for every dollar expended.

To achieve this goal, the Purchasing Office has been charged by the President of the university and the Board of Regents, State of Iowa, with responsibility for the following:

1. Securing competitive bids to obtain maximum value from the expenditures of university funds.
2. Maintaining liaison with the vendors that provide goods and services to the university.
3. Coordinating the procurement of goods and services for the academic, administrative, and research departments of the university.
4. Developing sources of supply to assure that the university departments have an adequate number of vendors from which to obtain supplies, equipment, and services.
5. The Purchasing Department follows the Code of Ethics of the National Association of Educational Procurement (NAEP), the professional association serving the purchasing/materials management professionals who support higher education and not-for-profit health care organizations. 

1. General. Competition within a free marketplace provides the best value for the consumer. By encouraging competition among viable vendors, the university strives to obtain goods and services at the best possible cost and quality. Negotiations for purchases, including requests for quotations of prices, must be accomplished through the Purchasing Department.
   
   Purchases less than or equal to $25,000 may be delegated to individual department purchasers. Purchase of goods and services between $25,001 and $50,000  may be purchased through an informal competitive bid with an adequate number of vendors. Federally funded purchases must follow the Uniform Guidance policy. The Board of Regents, State of Iowa, requires competitive bidding for the purchase of all university goods and services greater than $50,000 in value.
   
   Certain purchases involve terms or conditions that require legal or risk managerment review. Contracts involving such terms or conditions are forwarded by the Purchasing Department to the Director of Risk Management  and/or to the General Counsel's Office for review, as appropriate.
   
   The three most effective formal methods of competitive bidding are the Request for Quotation (RFQ), the Request for Proposal (RFP), and the Request for Qualificatons (RQFL). These methods provide:
   1. Increased savings;
   2. Exact communication of wants and needs;
   3. Equal and fair access to all qualified vendors;
   4. Compliance with university, Regent, state, and federal acquisition regulations and laws;
   5. Improved information provided by vendors;
   6. Objective evaluation for awards; 
   7. Services of an experienced purchasing professional; and
   8. An established contract under which the vendor is legally obligated to perform.
2. Request for Quotation (RFQ). The Request for Quotation is used for acquisitions based on lowest cost that meets specifications. The university issues formal RFQs for all goods and services greater than $50,000 in value unless a sole-source justification is received and approved. (See V-11.9 Waiver of Bid Requirements.)
   
   The Purchasing Agent routinely obtains several quotes, seeking the best price available. Purchasing Agents, in concert with the end users, develop specifications and send the RFQs to potential vendors. Vendors may then reply with a bid showing exact price, shipping costs, delivery schedule, payment terms, and other particulars of the items sought.
   
   Purchasing makes the award to the vendor who submits the lowest priced offer whose goods meet  the specifications stated in the RFQ. 
3. Request for Proposal (RFP). The Request for Proposal (RFP) is used for acquisitions based on other significant factors in addition to price. Examples include capabilities, past performance, support, service, warranty and maintenance. 
4. Request for Qualifications (RFQL). The Request for Qualifications process is used primarily for selecting professional services. This process enables the evaluation committee to select the awarded vendor based on the professional's unique skill set, experience, and expertise that are most critical to the success of the project or services requested.
5. Negotiations. The use of negotiated, noncompetitive, and sole-source purchasing procedures must be approved by the Purchasing Department.With appropriate institutional review, both competitive negotiation and noncompetitive negotiation processes may replace written competitive bidding when the purchase is anticipated to exceed $50,000.  

The names of the bidders and the amounts bid shall be supplied to any person upon request after the  evaluation of the bids is completed and the award is made. Information will not be released in situations in which the release would provide a competitive advantage to any of the bidders. 

The Purchasing Department has sole discretion to waive competitive bidding requirements in certain situations, including but not limited to:

1. Immediate need. It can be demonstrated without question that the requiring department could not have foreseen the required purchase in sufficient time for normal purchasing procedures to be used.
2. Emergency need. Life will be endangered, property will be destroyed, or considerable cost will be incurred because of events beyond the control of the department if the procurement is not completed without delay. An emergency includes but is not limited to one of these conditions:
   1. In which an immediate or emergency need exists for the item or service because of events and circumstances not reasonably foreseeable.
   2. Critical to sustaining patient care or human life, maintaining critical equipment or services, or similar.
   3. In which there is a need to protect the health, safety, or welfare of persons occupying or visiting a public property.
   4. In which the university must act to preserve critical services or programs.
   5. Purchases that are considered time sensitive and would result in increased costs due to delay or the inability to continue to provide necessary services to patients, students, public, etc.
3. The university will submit a quarterly summary of emergency purchases over $50,000 to the Executive Director, Board of Regents, State of Iowa.
4. Sole source. There is only one person or vendor that can provide the requirement. No other known person or firm is available with an equivalent service or supply. Departments must complete a sole source justification form (see https://uiowa.edu/eforms/) and receive approval from Purchasing prior to commencing the purchase process.
   
    In order to justify a sole-source purchase, one or more the following criteria must be substantiated in support of the justification:
   1. Compatibility with existing equipment. This justification may be used if the goods or services are being purchased to directly interface with or attach to equipment of the same manufacturer, and no other manufacturer's goods will correctly interface with existing equipment.
   2. Compatibility for instructional purposes. This justification may be used if the goods are being purchased to supplement existing equipment in a classroom. The goods must match the existing equipment and is being purchased to provide uniformity for instructional purposes.
   3. Compatibility for research. This justification may be used if the main purpose for acquiring equipment or supplies is to replicate specific experiments, using the exact goods that produced the original results. You may also use this justification if you are collaborating with another researcher and can show that identical goods are required to fulfill your part of the research grant or contract.
   4. Compatibility for medical services. This justification may be used if the main purpose of acquiring medical equipment or supplies is for the specific need of patient(s) at the discretion of the physician.
   5. Only one supplier can be identified to supply compliant goods or services. In limited cases, only one supplier may exist to provide particular goods or services. When providing a justification based on the availability of one supplier, the goods or services must be defined in generic terms. Specifying patented products or processes, when not necessary to meet functional requirements, is not acceptable as a sole source justification. Justifications can be accepted more readily by providing information regarding attempts to locate other suppliers, such as letters, informal quotations, or telephone contacts.
5. Noncompetitive justification. The following may be reasons for using noncompetitive procurement methods:
   1. Patent rights, copyrights, secret processes, or control of basic raw materials may preclude competition, although they do not in and of themselves always justify using noncompetitive procurement.
   2. Bids have been solicited and no responsive bid (conforming to the central requirements of the solicitation) has been received. 

Purchase of insurance may only occur via the Department of Risk Management, Insurance, and Loss Prevention.

(See also V-15 Risk Management and Insurance.)

Purchases of equipment that are to be financed on a lease-purchase or similar basis shall be forwarded to the Chief Financial Officer for review and shall contain a summary setting forth the financing cost for comparison with the terms offered for equipment financing under the Regents' master lease agreement. 

1. Definitions.
   1. "Employee":
      1. a paid employee of a Regent institution or the Board of Regents office;
      2. an employee of another state of Iowa agency (Iowa Department of Transportation, Department of Administrative Services, Department of Human Services, Iowa Department of Personnel, etc.)
   2. "Conflict of interest vendor":
      1. any firm of which any of the above referred persons is a partner or sole proprietor;
      2. any corporation in which any of the above referenced persons holds five percent or more stock either directly or indirectly.
2. General policy.
   1. A conflict of interest arises when a faculty or staff member is or may be in the position to influence the university's business, research, or other decisions in ways that could lead to any form of personal gain for the faculty or staff member or others closely associated with that university employee.
   2. Except as part of official state duties, an official, a state employee, a member of the general assembly, or a legislative employee shall not sell, in any one occurrence, any goods or services having a value in excess of two thousand dollars to any state agency unless the sale is made pursuant to an award or contract let after public notice and competitive bidding. Employees with private sector employment who sells a good or service to a state agency in the excess of $2,000 after public notice and bid, is required to file a Iowa Ethics and Campaign Disclosure Form within twenty days of making the sale, the total amount of the sale, and the type of goods or services being sold. See Iowa Code 68b.3.
   3. Vendors must be reviewed and approved by the Chief Procurement Officer when there is a disclosure or indication of a conflict of interest.
   4. Services of faculty or staff other than those in established businesses providing such services as outside contractors, unless approved in the budget or in advance by the Senior Vice President for Finance and Operations, are approved only after the purchasing department has determined the services are either uniquely exclusive or otherwise beneficial to the university in comparison to other available sources of the required services.
   5. University faculty or staff members cannot be interested, directly or indirectly, in any contract to furnish material of any kind to or for the university. In addition, participation in direct sales (pyramiding) ventures is considered a direct or indirect interest in a contract and is encompassed by this policy. Based on special approvals, faculty or staff members may be reimbursed for out-of-pocket expenditures on presentation of approved vouchers with receipts or other acceptable evidence of actual amounts paid for items purchased for university use.
   6. Faculty or staff members who would benefit personally from the supplying of goods or services to the university by any prospective supplier may not participate in the decision process leading to the choice of supplier. Specifically, faculty or staff members who have or who reasonably anticipate having either an ownership interest in, a significant executive position in, or a consulting or other remunerative relationship with a prospective supplier may not participate in the recommendation of, drafting specifications for, or the decision to purchase the goods or services involved. Faculty or staff members who know that a member of their family (or any other person with whom they have a personal or financial relationship) has an ownership interest or significant executive position in a prospective supplier are also disqualified from participating in the purchasing of the goods and services. However, faculty or staff members whose sole ownership interest in a potential supplier is held by a fiduciary (such as TIAA-CREF, a blind trust, or a mutual fund) that has the power to acquire or dispose of the interest without consultation with the faculty or staff member are not disqualified from participation in the purchase decision.
      
      When a faculty or staff member is disqualified from participating in a procurement decision, the fact of the disqualification and the reason for it must be reported to others involved in the decision. If necessary, a substitute may take the faculty or staff member's place.
   7. Federal Guidelines In addition to the conflict of interest policy provisions stated above, Office of Management and Budget (OMB) Circular A-110, Procurement Standards, section 42, "Codes of Conduct," imposes additional requirements on federally funded acquisitions concerning conflict of interest situations. It states: "No employee, officer, or agent shall participate in the selection, award, or administration of a contract sponsored by federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of their immediate family, their partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subagreements." 

Departmental requests for equipment, goods, and services are made on the university purchase requisition form. When preparing a requisition for an outside vendor, sign in to Employee Self Service; under Business & Financial Systems > Financial Systems & Forms, click on E-Pro (Evouchers & PReqs). For step-by-step instructions for completing a requisition, see the online tutorial PReqs Receiving Guide. Complete instructions and procedures for preparation and submission are found in the Purchasing Policy and Procedure Guide.

1. Workflow approvals.
   1. Two individuals must approve all requisitions. The first approval shall be that of the individual requesting/initiating a purchase, and the second approval shall be that of a departmental executive officer, designated subordinate, dean of the college, or other chief administrative officer.
   2. Requisitions for "advanced" and "expedited" orders, referred to as "confirming orders," enable staff members to make contingency and emergency purchases. Complete procedures are found in the Purchasing Policy and Procedure Guide.
2. General policy. Except as indicated below, acquisitions from outside vendors are made by means of purchase orders issued directly by the Purchasing Department under the delegated authority of the Chief Procurement Officer.
3. Exception. Procurement card purchases are allowed for low-dollar purchases.

Departments hold responsibility for oversight of non-P.O. vouchers and invoice forms and procurement cards subject to compliance with the requirements of V-11.19 and V-11.20 and competitive bidding principles embodying a duty to secure goods and services of the best quality and price. 

1. General policy. When purchase order invoices are received from vendors, they are audited against the purchase order number they reference. Invoices not referencing a purchase order number may be returned to the vendor or forwarded to the requesting department for this information before they are processed.
   
   Once an invoice is entered and a voucher created, an email is generated to the requestor, stating that a voucher has been created and requires the department's review. Departments must verify receipt of the item, note the receipt date, and maintain the documentation of receipt within the department. In the event of discrepancies, such as overpricing by a vendor for previously bid or quoted items, sales tax, or freight charges billed in error, Accounts Payable will process the invoice noting this "short pay" action and, when necessary, will review with Purchasing and/or the department. Voucher payments are automatically scheduled within the vendor's payment terms — the earliest of the discount due date or scheduled due date. Vouchers for "Capital Equipment" require an electronic receipt to be entered once the items have been received. Once the receipt has been entered, the voucher will be scheduled for payment.
2. Important approval and return procedures. Procedures are spelled out in the Accounts Payable Policies document. Highlights are listed below:
   1. Vouchers should be reviewed promptly to ensure that any cash discounts are processed in the prescribed time period.
   2. Appropriate department review and/or approval are certification that goods received are as ordered, and charges are accepted.
   3. Errors, damage in transit, or other problems with orders should be reported promptly to the vendor and Purchasing/Accounts Payable. Purchasing/Accounts Payable will work with the vendor, shipper, and the department to verify damage and initiate any actions necessary to rectify the situation.
   4. Freight and express charges are normally charged to the MFK shown on the purchase order. 

The university will not pay directly nor reimburse faculty or staff for cell phone or internet service fees, with the following exceptions:

1. Department-owned contracts for the purpose of rotation among staff, delivery service, or on-call emergency service.  
2. Extramural support/research subject use—e.g., if a granting agency allows support for cell phone use, a dedicated phone for support of this work may be purchased.