Southern Methodist University
SMU

Buying Info

Purchasing Guidelines

  1. Goals of an Effective Purchasing System
  2. Placing Orders
  3. Purchases < $5,000
  4. Purchases $5,000 – 10,000
  5. Purchases $10,000 – 25,000
  6. Purchases > $25,000
  7. Purchasing Equipment or Supplies
  8. Purchasing Construction or Construction-Like Services
  9. Purchasing Services
  10. Definitions for Price Justification Terms
  11. Tax exempt Certificate
  12. Signature Authorities
  13. Procurement Card Signature Authority
  14. Unauthorized Purchases
  15. SMU Policy on Purchasing Supplies and Services
     

1. Goals of an Effective Purchasing System

A.     Insure effective competition and bottom-line savings where appropriate.

B.     Establish thresholds for initiating competition, formal solicitation, appropriate signature levels of buyers and those holding procurement cards.

C.     Establish authority for those authorized to purchase.

D.     Establish standard terms and conditions for contracting goods and services. Obtain approval from University Legal Counsel for any agreement not on pre-approved standard terms and conditions.

E.      Establish a list of restrictive or prohibited goods/services.

F.      Require availability of budget resources before encumbering University funds.

G.     Utilize buying consortiums to leverage buying power.

H.     Act affirmatively to conduct procurement activities with small business, minority owned businesses, and with woman owned businesses.

 


 2. Placing Orders

Faculty or Staff requesters are not required to go through purchasing to make purchases, but are urged to check with the Purchasing Department to see if there is a better source for the product or service, or a better means of placing the order. Documentation of price reasonableness is required for any purchase of supplies, equipment or services greater than $2,500.
 

3. Purchases <$5,000

The use of the procurement card for purchases less than $5,000 is encouraged. Usage of the procurement card eliminates the need for a purchase order and decreased administrative processing.
 

When a purchase order is required…

4. Purchases $5,000 – 10,000

Purchase requisitions totaling $5,000.00 or more must be accompanied by a “Price Justification Form.”
 

- Check “Competition” if three or more quotes have been obtained from three or more vendors.  Please attach the quotations.

- Check “Historical Pricing” if purchase has been made in the past with little or no price difference.

- Check “Market Survey Performed” if list pricing has been checked through at least three different sources via the internet, catalog, email ads, etc.

- Check “Source is Preferred Provider” if source is recognized by the procurement department as a preferred provider.  A “preferred provider” is selected by the procurement department through a competition process.  A listing of these providers can be found on procurement’s website.

- Check “Source if from a SMU Buying Consortium” if source is a member of one of the following buying consortiums.

  • E and I Cooperative Purchasing
  • TCPN
  • Horizon Resource Group
  • MiCTA
  • US Communities
  • Provista
    *Pricing from sources that are members of the above groups have already been competed and determined fair and reasonable.

- Check “Value Analysis Performed” if an expert in the field relating to the purchase has been consulted and agrees that the pricing is fair and reasonable.

- Check “Other” if there is another reason other than the above why requestor feels pricing is fair and reasonable.  Then use the lines provided to explain.  ** Note ** the “other” category is often questioned by the procurement department.

  • "Other" may also be checked for those cases in which requestor wish the purchasing department to determine fair and reasonable pricing.

 

5. Purchases $10,000 – 25,000

Section 2 of the price justification form must be filled out for orders that are in the range of $10,000.00-$25,000.00.

6. Purchases >$25,000

Section 3 of the price justification form must be filled out for orders that are over $25,000.00
 

A member of the Purchasing Department will contact the requester at any time the purchase is not promptly processed for any reason.
 

7. Purchasing Equipment or Supplies

Orders for equipment and/or supplies should be processed with standard purchasing procedures as long as there are no exceptions to the standard terms and conditions.
 

If there are exceptions, the purchasing package must be sent to Legal counsel for review and approval.
 

8. Purchasing Construction or Construction-Like Services

Orders for construction or construction-like services must be forwarded to CPPO.
 

9. Purchasing Services

Services may also be procured through the Purchasing Department. If SMU standard terms and conditions are not accepted or changes to them are requested the purchasing package must be forwarded to Legal Counsel for review and approval.
 

10. Definitions for Price Justification Terms
 

 

Competition

Two or more responsible offerors (suppliers & vendors), competing independently, submit priced offers that are responsive and satisfy our stated requirement(s). We can include consideration for best value procurements where price is a substantial factor. Competition is considered the best way to insure prices are good.

Another Definition: An environment of varying dimensions relating to buy-sell relationships in which the buyer induces, stimulates, or relies on conditions in the marketplace that cause independent sellers to contend confidently for the award of a contract.

Historical Pricing

Price history, usually the last price paid when we bought an item or service, is used to evaluate a current offer/price. You make the assumption that previous buys were analyzed and justified adequately so you may compare the current price proposed with the price previously accepted. If this is not the case then you need to analyze the basis of the previous pricing, perhaps there was a need to expedite the item or we had to buy in less than normal production quantities. In many cases we use a price index to analyze or track changes in prices received from the initial commercial purchasers of products.

Market Survey

This includes formal market surveys like request for quotes to informal market surveys that consist of reviewing pricing in a published catalog, reading a business publication like the Wall Street Journal which covers general market data, knowledge of trade & user associations that publish useful market indexes or journals, informal telephone quotes, or current knowledge gained form recent purchases of similar items or services that were open to the “market”.

Value Analysis/Visual Analysis

Knowledge of the product, its functions, and the use to which it is to be put is essential for value analysis. Use this technique for low priced items and you determine whether the product, as it is now constituted, is the best product in terms of value. Visual analysis is similar & is commonly called eyeballing, description your inspection of an item to come up with an estimate of its probable value. Both value & visual analysis are closely related and should flag unrealistically high prices for common items.

Preferred Provider

A listing of firms maintained by SMU Purchasing that includes a range of items like computer supplies, electrical supplies, florists, plumbing supplies, ground supplies, hotels, household goods movers, janitorial & custodial supplies, office supplies, paint supplies, paper, parking, pool supplies, ad specialty, & shipping. Any firm selected from this listing maintained at http://www.smu.edu/procurement/providers_commodity.asp will need no further competition. Any other firms not listed are not to be considered Preferred Providers.

Buying Consortiums

SMU participates with five buying consortiums, E&I – Educational and Institutional Cooperative Service, Inc. (www.eandi.org -password required); Horizon Resource Group, (www.horizonrg.com -password required); TCPN – Texas Cooperative Purchasing Network, www.tcpn.org; U.S. Communities (http://uscommunities.org), and MiCTA (http://www.micta.org/). You will find a wide range of supplies and services available. Any firm selected from one of the five buying consortiums will need no further competition.  Contact Terry Conner at x84909 for passwords.

Sole Source

A firm that is characterized as the one and only source available, regardless of the marketplace, possessing a unique and singularly available performance capability for the purpose of contract award. Documenting a sole source should include rationale that addresses criticality, uniqueness of the item/service or requisite capabilities required of the vendor/firm, why full & open competition is not possible, impact to your program or effort if the item is not procured form the requested source, and/or exigency.

Fairness & Reasonableness of Price

A price that is fair to both the buyer & seller, considering the agreed-upon conditions, promised quality, and timeliness of contract performance. Although generally a fair and reasonable price is a function of the law of supply and demand, there are statutory, regulatory and judgmental limits in the concept. Competition is the best way to make sure that the resulting contract price is not rigged in favor of either buyer or seller, and in fact, results from the impartial working of the marketplace.


11. Tax Exempt Certificate

Find the current tax exempt certificate at http://www.smu.edu/controller/dept_tax/ and then select Sales Tax Exemption Certificate.
 

12. Signature Authorities

Signature authority is subject to the following conditions:

Signature Authorities, Dollar Limit and Term

*Signature authorities are predicated upon there being no exceptions to the terms and conditions from our standard SMU contract formats.
 

13. Procurement Card Signature Authority

SMU employees may purchase up to a maximum of $5,000 per transaction, $25,000 per month via a procurement card. Exceptions require additional review and approval.
 

14. Unauthorized Purchases

Procurements or other commitments made by unauthorized personnel are not legal and binding upon the University and may result in a personal obligation for the individual making the procurement or commitment. In such a situation, the University could simply refuse to pay the supplier, and the supplier could seek payment from the unauthorized person. However, as a standard policy, the Director of Procurement will:
 

University employees who commit an unauthorized purchase or use their Procurement Card in an inappropriate manner will be subject to disciplinary action including possible card cancellation, termination of employment at Southern Methodist University and/or criminal prosecution.

The Director of Purchasing shall approve any unusual transaction at any dollar level if the procurement will be awarded to a firm that did not submit the lowest overall cost
 

15. SMU Policy on the Procurement of Supplies and Services.

Procurement of supplies and services is covered in SMU Policy Guidelines found at www.smu.edu/policy. Specific attention is directed to the following:
 

 1.10   Limitation on Use of University Funds

 1.19   Contracts and Commitments

 3.2 Petty Cash Procedures

 3.10   Entertainment Management Policy

 7.4      Sponsored Research Procurement

13.2    Membership Fees and Dues

 

Buying Info
Buying Ethics
Buyer's Guide
Standard Terms & Conditions
    Purchase Orders
    One-Time Services
Authorized Buying Methods
Procurement Card Guidelines
Preferred Provider Listing
Buying Consortiums
Office Depot
Sam's
Training Info
    Office Depot
    TCS
    Procurement Card