Buying Information

Goals of an Effective Purchasing System

Purchasing Guidelines

1.     Ensure effective competition and bottom-line savings where appropriate.

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

3.     Establish authority for those authorized to purchase.

4.     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.

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

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

7.     Utilize buying consortiums to leverage buying power.

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

Purchases >$5,000

Purchases $5,000 and over require a purchase order.
When a purchase order is required…

  • An eProcurement Requisition must be entered into People Soft
  • The Price Justification Form must be included as part of the Purchase Request for purchases >$5,000
  • Authorized signatures for approval must be present

The price justification form is broken out into two parts; one represents Purchases $5,000 – 25,000 and Purchases >$25,000. 

Purchase requisitions totaling under $5,000.00 will be processed without further stipulations. 

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.

Purchasing Construction or Construction-Like Services 

Orders for construction or construction-like services must be forwarded to Planning Design & Construction (PD&C).

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.

Definitions for Price Justification Terms


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 preferred provider listing will need no further competition. Any other firms not listed are not to be considered Preferred Providers.

Buying Consortiums

SMU participates with nine buying consortiums:

E&I – Educational and Institutional Cooperative Service, Inc. ( -password required)

Horizon Resource Group, ( -password required)

TCPN – Texas Cooperative Purchasing Network,; U.S. Communities (

MiCTA ( – IT type supplies & services

National Intergovernmental Purchasing Alliance (National IPA)

National Joint Powers Alliance


U.S. Communities

Any firm selected from one of the five buying consortiums will need no further competition. Contact Shannon Brown at x84909 for passwords.

Sole Source – there is only one supplier that provides the product or service.

  • For unique products that cannot be found anywhere but only through one supplier/manufacturer.
  • Tasks represent a natural continuation of previous work carried out by the same contractor.
  • A rapid selection is essential because of an emergency type requirement.
  • The task represents a small dollar assignment ($10,000 or less).
  • Only one firm is qualified or has the experience of exceptional worth for the service.

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.

Single Source – one selected supplier even though there are other suppliers that provide similar products.

Best Value Analysis – selection is based on the best balance of price, quality & performance achieved through competition in accordance with the stated selection criteria.

Tax Exempt Certificate

1.     The University’s state taxpayer number is labeled on each SMU pcard.

2.     The Cardholder must give this number to all suppliers at the time of any transaction to exempt payment from sales tax.

3.     In the event sales tax is billed to the Cardholder’s account the Cardholder, within thirty days of the transaction, must rectify directly with the supplier or dispute the charge on payment net.

4.     The Cardholder may obtain the Tax Exempt Certificate from the SMU Purchasing & Accounts Payable websites to provide to a merchant when appropriate.

5.     Small credit card exemption certificates are available from the Purchasing office.

6.     SMU is exempt from Texas State & Local Sales Tax & each employee is therefore responsible for making the vendor aware of this exemption.

7.     Should Sales Tax be paid, it is the personal responsibility of the SMU employee to recover the taxes.

8.     Continued incorrect payment of Texas State & Local Sales Tax will result in suspension & eventual cancellation of the pcard.

9.     New Mexico Gross Receipts Tax (NMGRT) is not to be paid when purchasing office supplies for the Taos campus.

10.  Find the current tax exempt certificate at and then select Texas Sales Tax Exemption Certificate.

Procurement Card Signature Authorities

SMU employees may purchase up to a maximum of $5,000 per transaction, $25,000 per month via a procurement card with approval of your Financial Officer.. Exceptions require additional review and approval by the Vice President of Business & Finance.

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:

  • Inform the requester of the proper procedures for initiating a purchase request and processing a procurement action.
  • Request a purchase request and a written explanation by the individual making the commitment and written approval from the appropriate Vice President. The memorandum must be prepared in accordance with Frequently Asked Questions on the Purchasing website explaining why proper procedures were not utilized.

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. 

SMU Policy on the Procurement of Supplies and Services.

Procurement of supplies and services is covered in SMU Policy Guidelines found at 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

 3.7 - Travel and Entertainment Management Policy

 7.4 - Sponsored Research Procurement

13.2 - Membership Fees and Dues