General Principles - Purchasing Goods & Services Policy

EFFECTIVE DATE: December 15, 1995 |LAST UPDATED: November 19, 2013 | Policy Section: buying-paying

Responsible Executive

Carolyn Ainslie, vice president for finance and treasurer

Responsible Office

Purchasing

Contact

Jason Knoch, executive director of financial services and strategic initiatives, (609) 258-9181

I. Policy StatementBACK TO TOP

Princeton University supports a purchasing environment that recognizes departments have special expertise and are in the best position to determine what they need to run their programs. Policies and procedures are provided to facilitate the purchase of goods and services needed to run programs in a timely, efficient, and cost effective manner. The Purchasing of Goods and Services Policy contains the following policy sections:

  1. General Principles
  2. Suppliers & Contracts
  3. Capital Equipment
  4. Computer Equipment
  5. Mobile Communication Devices
  6. Sales Tax Exemption

It is essential to obtain prior approval to bind the university in any agreement (Transaction Authority Policy) and to obtain prior approval to make any payment. All purchases must be charged against the correct project grant, and must be compliant with related sponsor contracts. A centralized purchasing system is used to leverage purchases for best pricing and to maintain an inventory of all purchased items.

II. Who is Affected by this PolicyBACK TO TOP

All faculty, staff, researchers, graduate students, undergraduate students and independent contractors.

III. Definitions

Asset

A purchase, whether a physical good or intangible property, that has monetary value and is accounted for in the owner's balance sheet.

Department

An operating unit of the University. See Home Department, Initiating Department, Owning Department, and Reporting Department.

Goods

A physical item other than money, real estate, or services.

Single or Selected Source

A purchase where there are multiple sources of supply, and a capability to solicit competitive bidding.

Small Business Concern

A small business that is independently owned and operated, and is not dominant in its field of operation.

Sole Source

A purchase where only one supplier is capable of providing a product or service.

IV. PolicyBACK TO TOP

The Purchasing Department is the central purchasing authority for the University and is responsible for managing the purchasing process on a University-wide level. The Purchasing Department staff is made up of licensed purchasing professionals who are pleased to assist University departments.

The Purchasing Department staff is available to work on large and complex projects, but departments may work independently to source their needs and select the supplier in accordance with University policies. The University department and the Purchasing Department will jointly communicate technical details to suppliers as needed. Purchasing staff are available to communicate with suppliers regarding prices and quotes, perform due diligence, and execute the final contract. Purchasing has the responsibility for making the final determination of source of supply, quantities purchased, delivery schedules, and price negotiations.

All written vendor forms of agreement for the purchase of goods and services, such as quotations, contracts, terms and conditions, etc., should be sent to General Counsel and the Purchasing Department for review via the Contracting website, which is a University-wide website to facilitate contract review.

AUTHORITY TO BIND THE UNIVERSITY and APPROVAL OF PAYMENTS

Princeton University’s bylaws provide that only officers of the corporation or their delegates may bind the University in contracts, leases, and other legal agreements. The Transaction Authority Policy clarifies the delegation of authority to individuals to make legally binding obligations on the University.

All purchase contracts, vendor agreements, and transactions for the purchase of goods and services must receive approval for both contract signature and payment approval. The Transaction Authority Policy and annual certification process record the delegation of authority to specific department heads and office heads. These individuals only are authorized to commit University resources and approve payments up to a specified threshold. The Purchasing Department is authorized to execute contracts and place orders for goods and services, subject to the receipt of an approved purchase requisition from the initiating department. The Purchasing Department has delegated authority to the departments to work directly with suppliers when the transaction dollar value is less than $5,000.

According to New Jersey law, individuals who do not have delegated authority and enter into an unauthorized agreement may be held personally liable and responsible for the cost of the goods or services purchased.

Please coordinate with other University departments for the purchase of goods and services:

MINIMUM BID REQUIREMENTS

Competition between suppliers is one of the most effective ways to ensure that a product or service is secured at the most favorable price and terms. Competitive bidding is required for products or services with an aggregate total value of $5,000 or more. However, competitive bidding is not appropriate in every situation.

The University requires competitive bidding in order to appropriately safeguard University assets. As a condition for receiving federal funding for research, the University maintains a federally approved purchasing system that is routinely audited to confirm compliance with Federal Acquisition Regulations (FAR). These regulations mandate competitive bidding. When audited, the University must certify that the University’s policies are in compliance for all transactions - not just those that are federally funded. An audit failure would result in a requirement for government approval for every individual purchase transaction when federal funding is involved. An additional federal requirement is that suppliers designated as “Disadvantaged Businesses" be given an opportunity to compete for the University’s business. As a result, the Purchasing Department makes efforts to request bids from firms with such designations. In some circumstances, competitive bids are not appropriate and the requirement for obtaining them is waived. These circumstances include those outlined on the Sole and Single Source Purchasing section below.

The following minimum bid requirements guidelines have been established to promote competitive bidding. Bids should be solicited whenever the items can be purchased from multiple sources. Upon request, the Purchasing Department will assist in locating potential suppliers and obtaining pricing and product availability information.

  • Orders less than $5,000 - Verbal and written quotations are recommended for all requisitions of up to $5,000 in total. It is recommended that written bids be obtained for all purchases.
  • Orders $5,000 or more – The University requires a minimum of three competitive bids for a product or service with a potential aggregate total value of $5,000. A fourth "opportunity" supplier will be included from the Small, Disadvantaged Business resources whenever possible. Quotations for all requirements over $5,000 must be in written form. Contract suppliers are preferred suppliers and should be the first sourcing choice. Competitive bids are not required when purchasing directly from a preferred contract supplier.

SOLE and SINGLE SOURCE PURCHASING

The University usually obtains the lowest prices through the competitive bidding process. However, when only one supplier is capable of providing a product or service, the noncompetitive transaction must be documented by submitting the Supplier Justification Form to support the absence of bids. The Purchasing Department will evaluate requests and supporting documentation for Sole or Single/Selected Source classification. Purchasing may contact the originating department with suggestions for alternative suppliers.

SUPPLIER PRICING CONFIDENTIALITY

Maintaining the confidentiality of pricing information results in a more fruitful competitive bidding process. As a private institution, the University is not required to divulge quoted supplier prices to their competition. Revealing quotes from one supplier to a competitor may open the door to legal difficulties, and undermines the competitive bidding practice as competing suppliers may not bid the best prices possible.

Both the Purchasing Department and other departments that solicit supplier bids are required to keep bids confidential. Prompt notification of both successful and unsuccessful bidders should be completed immediately after the conclusion of the bidding period.

CONFLICTS OF INTEREST AND ETHICS

Employees of the University have an obligation to avoid activities or situations that may appear to be, or could result in, a conflict of interest. Employees must not use their University positions to influence outside organizations or individuals for the direct financial, personal, or professional benefit of themselves, members of their families, or others with whom there is a personal relationship.

Purchasing is committed to fair and ethical business practices that promote open and fair competition in the best interests of the University and the success of its supplier relationships. Purchasing abides by the National Association of Educational Buyers Code of Ethics.

CHECK THE SURPLUS PROGRAM

Prior to contacting a supplier to purchase common equipment, departments should review the Surplus Program web listing. In fact, federally funded project contracts require the University to look for suitable equipment in the Surplus Program prior to acquiring new equipment. The Surplus Program provides an inventory and access to underutilized equipment that is available for repurposing within the University.

V. Procedures BACK TO TOP

VI. Forms BACK TO TOP

VII. Contact Roles and Responsibilities BACK TO TOP

VIII. Update Log BACK TO TOP

2/25/11

No change to policy or substance; revised organization and language for web-based policy library.

12/15/95

Approved


 

CONTACT US

finance@princeton.edu
Tel (609) 258-3080
Fax (609) 258-0442

Princeton University
Office of Finance & Treasury
701 Carnegie Center
Princeton, NJ 08540

Google Map
Princeton Shuttle

FINANCIAL SERVICE CENTER

7 New South
Tel (609) 258-3080
Fax (609) 258-5040
Open Monday through Friday,
8:45 am — 5:00 pm

SERVICES INCLUDE

Customer service, cashiering,
check pick-up, financial system access

FINANCE NEWSLETTER

The General Ledger is your link to updates on people, policies, and other information related to financial transactions at the University.

Download Current Issue
Download Past Issues
Subscribe

WE WANT YOUR FEEDBACK!

How can we better serve you? Submit comments, questions, and ideas to our customer service department.

finance@princeton.edu