1. GUIDELINES ON PURCHASING PRACTICES These practices are used by Purchasing to promote competition and ensure that all purchases comply with the University’s Bidding Requirements. The rules vary depending on the dollar value of the transaction, but the principles should be employed whenever University’s funds are to be used. Purchasing has the expertise to perform all the necessary due diligence. These guidelines are included here primarily to give our customers a better understanding of the process and to better facilitate communication and collaboration. If you choose to select the supplier and obtain quotes without assistance from Purchasing, this section should serve as a guide or checklist. When a preferred supplier exists for the commodity or service being sought it is important and Purchasing strongly recommends their use. Preferred Suppliers are pre-qualified and choosing to use one will eliminate the time consuming processes of due diligence; selecting suppliers and preparing and evaluation of bids.
SELECTING QUALIFIED SUPPLIERS
Supplier selection and evaluation is a process that can take considerable time and energy depending on the product or service.
The first step in selecting suppliers is often research, particularly if the product or service has not been purchased before. There are a number of tools available for this initial phase:
Check with consortium to which the University belongs, to see if a contract exists for the commodity in question
Talk to colleagues in other institutions who might have purchased a similar product or service.
Consult trade publications, directories, supplier catalogues, and professional journals.
Talk to salespeople.
Once a list of potential suppliers has been developed, begin evaluating each supplier ’s capabilities. Obtaining a Dun & Bradstreet financial report (‘running a D&B’) is a good place to start. However, a D&B contains only publicly available information or information that the supplier chooses to provide. Some D&Bs also include brief profiles of key management personnel and historical information on the company. Another option is to check with local Better Business Bureaus.
There are a number of guidelines for supplier selection
Find out how long the supplier has been in business.
Find out who are the supplier’s primary customers and ask for and check references.
Investigate a supplier’s financial stability.
Check bank references.
Tour the supplier’s facilities, if possible.
Is the supplier really interested in doing business with the University?
Does the supplier use state-of-the art technology?
Does the supplier offer an educational discount?
These steps should narrow the field to the three suppliers (sometimes more) who will be asked to bid on the particular product or service.
PREPARING AND EVALUATING A BID
Bidding goods and services is important for several reasons. The bidding process:
allows “comparison shopping” for the best pricing and service
allows for an informed and objective choice among potential suppliers
encourages competition among suppliers
provides a standard for comparing price, quality, and service
provides a list of qualified suppliers for future bids
provides access to University business for suppliers
The bid process begins with the development of a set of specifications or objectives. The Purchasing Office, in conjunction with the requester must define the requirements exactly. Colleagues, technical personnel, trade manuals, and suppliers may be consulted for assistance in developing specifications. The requirements are then communicated to the selected suppliers by a Request for Quotation (RFQ) or a Request for Proposal (RFP).
The RFQ process is designed to identify the supplier who can meet the requesters requirements for the best price. The RFQ should be used for bidding familiar, standard items. Price, delivery and inventory are usually the most important elements of the RFQ. The RFQ should contain ALL the information necessary for the supplier to submit a valid quote:
The product(s) should be described in detail.
Specifications should be clear, concise and complete.
Quantity, quality requirements, packaging, F.O.B. point, payment terms, and warranty, delivery and inventory requirements should all be included in the RFQ.
An RFP should be used for more complex projects, for services, and for long term contracts, when there are important considerations other than price. The RFP usually begins with a statement of purpose or goals and objectives The RFP should:
clearly define an acceptable level of performance for the supplier and a definite time frame for achieving this goal
ask the supplier to describe the qualifications of those individuals who may be involved in implementing the goals and objectives of the RFP
ask for all of the information contained in an RFQ (see above) but also can ask for input from the suppliers. The suppliers might be asked how they would address the issue, what unique contributions they would make toward achieving the goals outlined in the proposal, and what alternative proposals they would offer. The suppliers might also be asked to solve specific problems concerning time constraints, new technology, or on-the-job training for end users. “How” is as important as “how much”.
Criteria for Preparing an RFQ/RFP:
Adequate time to prepare a good RFQ/RFP and allow suppliers sufficient time to respond (two to four weeks).
All suppliers should receive identical copies of the RFQ/RFP and any subsequent changes in the bid specification.
A deadline should be established for the submission of all bids. If the deadline is extended for one supplier, it must be extended for all.
All suppliers should be notified in writing if the bid specifications change. If the changes are substantial, it may be necessary to extend the submission deadline. All suppliers should be notified of the extension in writing.
If a number of questions are raised about the bid, consider holding a pre-bid conference. This will provide an opportunity to clarify the RFQ/RFP for all the suppliers and no supplier will have the unfair advantage of additional information.
When the bids are received, they should be signed, dated and indicate the time that each was received. All competitive bids are confidential and should never be used as a bargaining tool.
Criteria for Evaluating bids:
Time should be taken to review the bids carefully.
Narrow the field by determining which suppliers are “responsive”. A “responsive” bid provides ALL the information asked for and addresses ALL the issues in the RFQ/RFP. Eliminate bidders who are unresponsive.
Look carefully at proposed prices. Be wary of a supplier who substantially underbids his competitors. He may be ‘low-balling” to win the bid but the quality of his product could suffer or he might be unable to meet the delivery requirements. A substantially lower price might also indicate that the supplier has misunderstood or misinterpreted the requirements.
If appropriate, obtain and evaluate samples.
If the bidding is close, ask for extended warranties (if appropriate) and compare prices.
Consider the suppliers’ past performances, after-sale support and services, technology, and the creativity used to meet the requirements or objectives.
Negotiating successfully takes skill and practice and should result in a win – win situation for both the buyer and the seller. Good negotiators:
do their homework/research
clearly understand their requirements and objectives
never lose sight of their goals
know where they can afford to compromise and where they cannot
make sure their negotiating teams have whatever expertise (technical, financial, legal) is needed to increase the chances for a successful settlement
make an effort to anticipate the supplier’s strategy and to determine what the supplier hopes to gain from the negotiation process.
When to Negotiate Negotiation should be used when:
the purchase involves a significant amount of money or represents an on-going effort
the number of suppliers available are too few to competitively bid the purchase
new technologies or processes are involved for which selling prices haven’t been determined yet
the supplier must make a substantial financial investment in equipment, technology or other resources
Negotiation Strategies Whenever possible:
do comprehensive research for reliable facts and figures. Never use information that could be questioned or proven inaccurate.
define your goals. Never lose sight of the target – what should be gained from the negotiation
negotiate on your “turf”
prepare an agenda and brief the members of your negotiating team beforehand so that their strategy isn’t compromised
negotiate only with supplier representatives who are empowered to make concessions
leave plenty of room to maneuver. The greater the initial demands, the greater the probability for success.
don’t be afraid to be silent. Silence can be an effective negotiating tool. If the supplier fears he is losing the business, he may talk himself into offering more and better concessions than expected.
call a recess or lunch break if negotiations break down.
withhold something for concession in return for a point the supplier is willing to concede.
Always be fair. The supplier is entitled to a reasonable profit – one that allows him to stay in business for the long-run. Negotiation Strategies to Avoid Don’t:
reveal strategies too early in the negotiation process
get so bogged down in details that the overall objectives are lost
try to prove the supplier wrong. Leave the supplier room to retreat gracefully from a stated position.
display temper, frustration and anger that can handicap the negotiation process and logical thinking.
communicate anything to the supplier that reduces bargaining power, for example: “You’re our only source.” “We have $21K budgeted for this purchase.” “I have to have it now.” etc. Be intelligent and cautious.
2. HOW WE BUY
The purchase of goods and services on behalf of Tufts University business can be accomplished via several different purchasing mechanisms: For small dollar orders under $5,000, the Tufts Procurement Card (PCard) is the preferred method. Tuft’s PCard can be used for purchases up to $5,000 of all non-restricted commodities from any merchant that accepts MasterCard as a form of payment. Travel related costs should be paid by using the Tuft’s Travel MasterCard or through reimbursement via the Tufts Travel Expense Form. For orders in excess of $5,000 or where a supplier will not accept the Tufts PCard, Purchase Orders are the primary means for obtaining goods and services. Non-facility related Purchase orders are issued by the Purchasing Department upon receipt of completed and approved Tufts requisitions. Requisitions in excess of $10,000 must be accompanied by source selection documentation as required by government and Tufts policy. For ordering goods and services from other Tufts departments, please use a Tufts Interdepartmental Requisition (IDR). Some of Tufts “partner” suppliers provide on-line ordering at Tufts pricing directly on the suppliers web site. Once authorized and set up, orders to these suppliers will be charged directly to a departments dept-id and if applicable project/grant and account. For any questions concerning the proper method to purchase a good or service at the University, please call the Purchasing Department at 617-627-3225.
3. TUFTS PROCUREMENT CARD (PCARD)
The Procurement Card (PCard) is a MasterCard credit card, which can be used for purchases up to $5,000 of all non-restricted commodities from any merchant that accepts MasterCard as a form of payment. The PCard provides a faster, more efficient way to purchase lower dollar goods. While the PCard should be used for any university business purchases, all travel related meals and costs must still be paid using the Travel Reimbursement Forms and/or the Travel MasterCard. The PCard is administered by Tufts Support Services (TSS), who can be contacted at 627-7000. TSS will set up the training once your card is received.
4. TUFTS TRAVEL MASTERCARD
Tufts Travel MasterCards issued by JP Morgan Chase are provided, free of charge, to university travelers. Tufts Travel MasterCards should be used to the fullest extent possible to pay all travel-related costs. There are numerous beneficial reasons for utilizing this corporate credit card. Tufts Travel MasterCards can be used to pay travel-related charges, such as hotel costs, rental car costs, and meals. They are globally accepted with the benefit of obtain cash advances from ATM machines worldwide and offer a comprehensive travel insurance package, at no cost to university travelers. Contact TSS for more information on the Tufts Corporate Card program.
All charges on a Tufts Corporate Card must be reconciled using our electronic Travel and Expense Reporting e-Expense System for employees or via a paper form for students and others.
All reimbursements will be sent (via electronic funds transfer) to the employee’s bank account on file. An e-mail will then be sent to the employee indicating that the reimbursement has occurred. The Travel Corporate Card is administered by Tufts Support Services, who can be contacted at 627-7000. For additional information please visit TSS.
For non-facility orders in excess of $5000, a completed and approved electronic requisition must be created and approved before it is automatically routed to the Purchasing Office for the creation of a Tufts purchase order. Requisitions in excess of $10,000 must also be accompanied by source selection documentation as required by government and Tufts policy. Throughout this document, terminology for charging goods and services is derived from Tufts official accounting system (PeopleSoft). Reference and use of Project/Grant coding is not solely limited to project and grants and can refer to and is also used for awarded contracts.
7. BLANKET ORDERS
A Blanket Order (also known as a Standing Order) is a term contract or basic agreement between the University and a supplier. It is issued to a specific supplier to address recurring low dollar purchases of consumable supplies or services, for a specific period of time. A Blanket Order is issued to support an existing contract, or independently, after all terms and conditions have been negotiated.
GUIDELINES FOR ALL BLANKET ORDERS
A Blanket Order should be used when the ordering department/cost center will:
Purchase repetitive, specified services or items, or categories of items from the same supplier; which are purchased and paid in a predictable manner during a certain time period, usually one (1) year
Order standard materials or maintenance supplies which require numerous shipments
Enable the buyer to obtain more favorable pricing through volume commitments
Blanket Orders generally should not be used when:
The primary purpose is, to provide an open line of credit with a supplier
Prices are unknown at ordering time, or subject to change later without notice
Quality of the supplier and/or services are questionable and control over the University expenditures would be weakened significantly
3. A Blanket Purchase Order format shall include the following information:
The period to be covered by the blanket agreement (generally should not exceed one year)
The previous Blanket Order number, if this is a replacement Blanket Order
Items and/or categories of items to be covered by the Blanket Order (when available)
Maximum quantities, if any
Prices and pricing arrangements
Terms and billing arrangements
For regulated or controlled substances, the licensed investigator is responsible for providing a DEA license number and /or forms to the supplier. (If applicable)
4. Blanket Orders $10,000 and Above
All University business rules apply to Blanket Orders.
A Justification Form and supporting documentation is required for Blanket Orders $10,000 and above, and those expected to reach $10,000 or more in expenditure during the fiscal year.
Purchasing will provide assistance in negotiating price agreements and/or obtaining bids from different suppliers.
5. Pricing: Price, quantity, and F.O.B. terms, should be negotiated prior to the blanket order being issued.
6. Annual Review: It is recommended that prior to requesting a new Blanket Order [April-May]; the ordering department should review the existing Blanket Order for any changes.
Interdepartmental Requisitions (IDR’s) are used when a department is purchasing goods or services from another department within the university. Throughout this document, terminology for charging goods and services is derived from Tufts official accounting system (PeopleSoft). Reference and use of Project/Grant coding is not solely limited to project and grants and can refer to and is also used for awarded contracts.
Department Name and AddressProvide the name and campus address of the department that will be performing the goods or service.
Department Name and AddressThis section is the contact information for the individual and department placing the order for the goods or service.
Items or Services RequiredThe order should be described in as much detail as space permits what is being requested. Specify exact quantity, description, unit price and cost.
Requests Involving Catering EventsIf the IDR is being used for a catering event, section 4 must be filled out. In this section include a justification for the event and all the information regarding the event. For further information regarding the justification, please refer to the Business Expense Policy. Otherwise, please skip to section 5.
Account- Dept ID- Project/Grant – Debit AmountProvide the ACCOUNT of the category classification that this order will be charged to. (e.g. 5455 – Lab Services or 5431 – Catering) Accounts are used in conjunction with Dept-ID’s and Project/Grants (if applicable).Provide the department id (DEPT ID) of the department that will receive the charge for the ordered goods or services.Project/Grants are internal or externally funded activities normally the result of grant or contract awards to the University by the Federal or State Government Agencies or private organizations.Debit Amount is the amount that the department will be charged for the goods or services provided.
Account- Dept ID- Project/Grant – Credit AmountProvide the ACCOUNT of the category classification that this order will be receiving the funds from. (e.g. 5455 – Lab Services or 5431 – Catering) Accounts are used in conjunction with Dept-ID’s and Project/Grants (if applicable).Provide the department id (DEPT ID) of the department that will receive the payment for the ordered goods or services that they provided.Project/Grants are internal or externally funded activities normally the result of grant or contract awards to the University by the Federal or State Government Agencies or private organizations.Credit Amount is the amount that the department will be credited for the goods or services that they provided.
Requesting Department (DEBIT) Authorization SignatureAn individual that has signing authority for the Dept ID Project/Grant that is being charged for the goods or services must provide a signature.
Servicing Department (CREDIT) Authorizing SignatureAn individual that has signing authority for the Dept ID Project/Grant that is being credited for the goods or services must provide a signature.
9. PURCHASING RADIOISOTOPES
To meet Massachusetts Department of Public Health’s regulatory requirements and to insure the safety of the Tufts community, radioactive materials use at the University is managed by a Radioactive Use Permit. The Permit authorizes a faculty member (Authorized User) to use specific radioactive material, radiation generating devices or lasers in his or her laboratory under the University’s Radioactive Materials License issued by the Massachusetts Department of Public Health’s Radiation Control Program. Under the License, the University can purchase, process and use radioactive materials under a prescriptive set of conditions.
All radioactive material purchased on the Boston campus are ONLY shipped to Tufts Medical Center, Proger Receiving Area, 25 Harvard Street, Boston, MA, ATTN: Geoffrey C. Sirr Jr. and all radioactive materials on the Medford campus will be shipped to either Dana Hall, 120 Packard Ave., Medford, MA ATTN: Harry Bernheim or 200 Boston Ave., Suite 4700, Medford, MA ATTN: Harry Bernheim / “PI’s name”.
To order radioisotopes, use the eReq system, fill out all necessary information and be sure to check ‘restricted item’ box on the electronic requisition. Proper attachments should be an authorized email from Principal Investigator (PI), including the following:
Quantity – Specifications, Unit Price In this section you must fill out the quantity to be ordered in millicuries. Under the specification section, please include the supplier that you wish to purchase the isotopes from, the catalog number and the item description. If it is known, please also include the price under the unit price section.
Location – Provide the Tufts address of the laboratory in which the radioisotopes are going to be used.
Extension – This section is for the Tufts phone number of the person responsible for the order.
Licensee – (Print)Print the name of the person with the radioisotope license in this section.
Licensee – (Signature)Provide the signature of the person with the radioisotope license in this section.
10. PURCHASING CONTROLLED SUBSTANCES
A Federal Drug Enforcement Agency (DEA) license and DEA requisition number are required for purchasing controlled substances. The FDA, in the Controlled Substances Act, has established strict ordering procedures that must be followed before a supplier is permitted to fill an order. DEA Form 222 must accompany orders for DEA Schedule I and Schedule II drugs. This form is numbered sequentially and issued only to holders of DEA registration numbers. Schedule III and IV controlled substances can be purchased by citing the DEA requisition number from Form 223. The three-part form must be completed as the directions on the back of the form specify. The licensee must keep Part 3 of the form and have it available for inspection by enforcement officers for a period of two years from the date the order was placed. Space is provided on Part 3 for receiving information. The other parts of the form must be sent along with the requisition to the Purchasing department. The license holder is responsible for maintaining adequate records regarding ordering, receiving, storage, and distribution of these substances. Controlled substances must be kept in secured locations accessible only to authorized personnel. A DEA representative will explain these procedures to the license applicant during the preliminary inspection prior to issuing an DEA Controlled Substance License.
11. RECEIVING PURCHASES
Deliveries can be made directly to the end user’s office, lab, receiving dock, or any other location specified on the purchase order. All packaging should be carefully examined for any visible evidence of damage, particularly if the purchase is fragile or costly. The person ‘receiving’ the purchase should make a note of the date the order was received, the name of the supplier, the quantity received, and the purchase order number. The receiving and purchase order information can be checked against the invoice to make sure that the quantities received are the same as the quantities being invoiced.
Damaged Shipments and ShortagesUnder Interstate Commerce Commission regulations, damaged shipments cannot be refused unless totally destroyed or unless the broken contents would cause contamination. If the shipment is refused, the supplier or shipper could dispose of the shipment, making it very difficult for the buyer or end user to initiate a successful claim. Any damage to the package, no matter how slight, should be noted on the carrier’s and receiver’s delivery receipt. If the shipper is unwilling to wait while the contents of the package are inspected, the receiver should note on the delivery receipt that the condition of the contents is unknown. If concealed damage is discovered during unpacking, stop unpacking, notify the shipper, and request an immediate inspection. Save damaged packaging and cartons for the shipper’s claims inspector and, if possible, photograph the damaged shipment.
Initiating a ClaimThe shipper’s main office should be notified in writing within 15 days of receipt of the damaged merchandise. The formal claim letter should:
describe the damage
give the date the shipment was received
include a copy of the delivery receipt with the shipper’s signature and the receiver’s description of the damage
provide the name of the supplier
include a written estimate from the supplier of the costs to replace or repair the damaged items
provide a copy of the supplier’s original invoice
provide copies of all correspondence pertaining to the claim
The Interstate Commerce Commission requires the shipper to acknowledge the claim within 30 days and to offer a settlement within 120 days. When terms are F.O.B. Destination, the buyer or end user should notify the supplier immediately so that the supplier can file a claim.
Returning Goods to the supplier Goods should not be returned without first notifying the supplier. Some suppliers require the buyer to obtain a return authorization number and have procedures as to how and when a return shipment should be made. Some suppliers may also charge a restocking fee to offset the cost of returning the item to inventory. The individual returning the goods should keep a record of the name of the individual authorizing the return, the authorization number and date, notes of any conversations with the supplier authorizing the return, the date the shipment was returned, the name of the carrier, and the supplier’s complete address and the name of the individual receiving the returned goods. If the item being returned is expensive or fragile, it should be insured. Contact the Tufts University Risk Management Department for adequate insurance information.
12. MANAGING SUPPLIER RELATIONSHIPS
Maintaining good relations with a supplier should be as important to the Purchasing Office/end user as getting the best price. A good buyer-seller relationship is a partnership, a win-win situation over the long run. A supplier who is treated with courtesy, honesty, and fairness will deliver a quality product at the best price, will provide good service, and will be responsive to emergency situations and special requests. A responsive supplier is an asset for the University community.
There is also a public relations aspect to purchasing that should not be overlooked. An organization’s public image can be a valuable asset. A supplier who is treated equitably and professionally is likely to communicate his positive experiences with your organization to his associates.
Guidelines for Successful Supplier Relationships:
One must utilize university preferred suppliers to best leverage the collective University volume, to consolidate orders, and to reduce administrative processing costs.
Be fair. Give all qualified suppliers an equal opportunity to compete for business.
Maintain integrity. A supplier’s pricing is confidential and should never be shared with another supplier for any reason.
Be honest. Never inflate requirements to obtain better pricing. Negotiate in good faith. Don’t change the requirements and expect the supplier to hold his pricing.
Be ethical. Procurement decisions should be made objectively, free from any personal considerations or benefits.
Be courteous. A contract administrator/end user should make an effort to receive sales persons to the extent that his or her work schedule permits.
Be reasonable. A supplier is entitled to a fair profit.
Pay promptly. The purchase order you issue to the supplier is your promise to pay for the goods and services you buy in a timely manner (usually within 45 days).
13. BID POLICY
The Federal Acquisition Regulation (FAR) defines a small purchase as $25,000 or less. Tufts University requires that any purchase over $5,000 (20% of the small dollar purchase threshold of $25,000) comply with FAR regulations and Competition and Price Reasonableness rules. A completed and signed “Supplier Justification Form” must accompany requisitions $10,000 and greater. All purchases should represent sound business decisions and follow price reasonableness rules.
Tufts University requires competitive bidding and documentation for every purchase order $10,000 and over (with the exception of Facilities Contractor Procurement; see Contractor Procurement policy below). The Purchasing Office is expected to promote competition and ensure advantageous pricing by soliciting bids from a minimum of three suppliers and to select the lowest bidder able to meet the requirements. For orders $10,000 and over the quotations must be written. Requestors of quotations must retain documentation of these bids/quotations in department files for audit purposes.
NON-COMPETITIVE SUPPLIER SELECTION
Occasionally, the Purchasing Office is unable or chooses not to competitively bid the requirements. These situations involve selected or sole sources. A selected source: alternative suppliers exist in the competitive market, but the buyer chooses a particular supplier because of technical requirements (precision, reliability) or past performance by other suppliers (poor service, availability of parts). A sole source: no other supplier capable of fully meeting the requirements exists. Sole sources should be the exception, not the rule.
Tufts University also requires documentation verifying that all purchase represent sound business decisions and that prices are fair and reasonable. The buyer must conduct a cost/price analysis for all non-competitive purchase orders and fully document this analysis for purchase orders $10,000 and over. Documentation can be based on the price of previous and similar purchases, current price lists, catalogs, advertisements and negotiated pricing agreements (supplier partnerships).
The objective of this policy is to ensure that jobs are awarded fairly and equitably with prudent use of University funds; and that pricing, quality, and timeliness are all considered in the procurement of contracted services. The bidding requirements quoted below are established to promote competition and ensure advantageous pricing.
Emergency projects and Non-Emergency projects – $1-$10,000 No formal bid process is required. Typically, Tufts Purchasing policy requires competitive bidding and documentation for every purchase order $10,000 and over. However, based on historical information and experience with certain suppliers in the field, a list of competitive suppliers has been “pre-selected” and approved as competitive suppliers. A “Supplier Justification Form” must accompany orders $10,000 and over.
Non-Emergency projects – Single-trade $10,000-$15,000; Multi-Trade $10,000 to $25,000: At least two verbal bids must be solicited using the best available information. These verbal bids must be documented (contractor information, date submitted, price, etc.) on a supplier Justification Form, and submitted for file and review by campus Directors.Exceptions to this policy should be infrequent and be for valid reasons, not for convenience. When single sourcing is necessary (for reasons such as emergency, or proprietary systems) the reasons must be clearly documented in writing on the supplier Justification Form and put in the appropriate job file. If selection is made for reasons other than low bid, this decision must be reviewed with and approved by the Director of University Facilities and the rationale and supporting documentation put on the supplier Justification Form. That documentation should then be put in the PO packet and the job file. For emergency situations the good of the University and common sense should always prevail (see first bullet above).
Non-Emergency Single trade projects $15,000 to $50,000, and multiple-trade projects $25,000 to $50,000: These projects must have three written proposals from eligible and qualified contractors. Detailed drawings and specific “bid documents” may not be available for these types of projects, but every effort should be made to ensure that contractors are pricing comparable specifications. The Purchasing Department should be a part of this procurement process whenever goods and services relating to equipment and/or furniture are involved.
Construction projects $50,000 and greater: These projects will normally have design drawings and formal specifications. With these documents a formal bidding process must be followed. This will include written invitations to multiple contractors accompanied by all relevant documents, a specific submission format and deadline, a formal bid opening, a formal supplier Justification Form to be completed and signed at the time of the bids being opened. At least two Tufts representatives will be present at the bid opening, including a representative from the Purchasing Office.
A completed supplier justification form is required for all orders $10,000 or greater.
15. DEBARRED SUPPLIER POLICY
THE FEDERAL ACQUISITION REGULATION
(FAR) 52.209-5 requires that Tufts obtain written certification from suppliers receiving a purchase order of $25,000 and over and made with Federal funds that they have not been debarred (prohibited) from doing business with the Federal Government. A prime contractor such as Tufts, who knowingly does business with a debarred supplier, risks having its Federal contract terminated.
CAUSES FOR DEBARMENT
A supplier is debarred for serious criminal offenses such as embezzlement, theft, forgery, bribery and other offenses indicating a lack of business integrity. Depending on the specific cause, the length of the debarment can be anywhere from three years to indefinitely.
When suppliers are set up in Tufts PeopleSoft system, they are required to certify among other items that they are not debarred, being considered for debarment, or other wise disqualified from receiving Federal funds in the conduct of their business. Additionally, Tufts PO Terms and Conditions specify that by accepting a Tufts PO that the supplier certifies that they are not a debarred or disqualified supplier. On all orders over $25,000, the requisitioner/Purchasing Office must insure that the supplier is not excluded from Federal procurement. Verification of the status of a proposed supplier can be obtained from the System for Award Management (SAM), a Official U.S. government system.
16. PAYMENT TERMS
Payment terms are established by the Purchasing Office and dictate when payments to non-employee suppliers will be made. Generally, the university employs a “Net 45” payment term meaning that the payment will be issued 45-days from the date of the suppliers invoice. Purchase orders sent to the suppliers reflect these terms and conditions and they apply to all invoices received by the university regardless of whether they are issued against an existing purchasing order or not. Payment terms other than “Net 45” can only be negotiated by the Purchasing Office. Travel reimbursements and other payments to employees are paid immediately.
Within the PeopleSoft Financials System, payment terms are established for each supplier. Invoices processed by Tufts Support Services (TSS) will reflect those terms and the payment due date will automatically be calculated by the system. TSS does not designate a payment date as this is entirely system driven. For example, a supplier invoice dated January 4th that is received by TSS on January 9th and then entered into PeopleSoft on January 10th. Since our standard payment terms are “Net 45” the system will automatically calculate a payment due date of February 19th. The system is programmed to adjust for weekends and university holidays when calculating due dates. Currently non-employee payments are issued twice weekly (typically Monday and Thursday). The PeopleSoft system is coded to select any invoice for payment that has a payment due date equal to or prior to the check run date. Checks are printed and usually mailed out the same day.
TSS will make every effort to process invoices in a timely manner to take advantage of beneficial discount terms. Keep in mind that not all discounts offered by suppliers for faster payment are advantageous to the university. The Purchasing Office in conjunction with the Treasury Office is responsible for determining when such supplier discounts are beneficial and recommends when they should be taken.
Generally, the university issues payments upon completion of the service or delivery of the product. Requests by suppliers for pre-payments or deposits can only be approved by the Purchasing Office who will ensure that the pre-payment terms are beneficial to the university and that proper controls have been established to protect Tufts interests.
All questions from suppliers concerning the payment date of a particular invoice should be directed to TSS for handling.
17. INVOICE PROCESSING
Please refer to the TSS website or telephone 617-627-7000 for invoice processing information.
18. PURCHASING CAPITAL EQUIPMENT
A Capital Equipment purchase is equal to or greater than $5,000 and has a useful life span of one or more years. For additional information regarding capital equipment purchases, call the Capital Asset Administrator at 617-627-2008
LEASE OR BUY
Equipment purchases usually involve a substantial financial commitment – the purchase price of the equipment and the cost to service and repair it. The primary reason to lease rather than buy an item is because the needed item is so expensive that its direct purchase is not possible and other financing mechanisms are unavailable or more expensive than leasing. In order to be considered for leasing, the item must have a value of at least $50,000 and must have CEA approval. If the Purchasing Office decides to lease the equipment, provisions should be made for upgrading the equipment, if needed.For additional information see Leasing Policies and Procedures.
MAKING THE BUY
Once the decision has been made to purchase the equipment, the specification is prepared, the suppliers selected and the RFQ/RFP is developed. Guidelines for Shipping Capital Equipment & Transfer of Title The F.O.B. point should be Destination, and then the supplier is legally responsible for the equipment until it is delivered to the specified location. If the equipment is damaged in transit, the supplier is responsible for filing the freight claim. If the terms are F.O.B. Origin, Tufts is legally responsible for the equipment in transit from the supplier’s warehouse or dock and the University is required to file the freight claim. If equipment is damaged in route Tufts is insured for replacement cost under the University’s blanket insurance policy. For additional information or to file a claim, contact the Tufts University Office of Risk Management.
19. EQUIPMENT MAINTENANCE AND SERVICE AGREEMENTS
Computers, scientific, diagnostic and testing equipment, and other specialized equipment require on-going periodic maintenance after warranties expire. One of the primary benefits of negotiating a service/maintenance agreement with the manufacturer or authorized representative is that they have ready access to the parts and factory trained personnel required to maintain or repair the equipment.
If the equipment purchase is a ‘one time’ buy, service and maintenance requirements should be addressed in the bid or during negotiations with the supplier. In evaluating an RFQ/RFP, costs for service and maintenance should always be considered as part of the total price of the equipment. The LIFE CYCLE COST of the equipment includes purchase price for the equipment and the cost of service/maintenance extended over the useful life of the equipment – typically 5 to 10 years. If the equipment will be rented or leased, the contract administrator should carefully review the service coverage offered as part of the rent/lease program for adequacy.
DEVELOPING SERVICE/MAINTENANCE AGREEMENTS FOR NEW OR PREVIOUSLY PURCHASED EQUIPMENT
Purchasing Office representatives negotiating equipment maintenance/service agreements should fully describe the scope of the work to avoid any misunderstandings or unsatisfactory levels of service. Terms and conditions that should be agreed upon include working hours, labor, excluded services (what the supplier is not obligated to do), warranty, excluded parts, response time, loaner equipment, and appropriate insurance coverage. suppliers usually have standard terms and conditions available for review. Whenever possible Tufts Terms and Conditions should be used. If additional services might be required or if the terms and conditions require amending, these elements should be negotiated with the supplier before the service/maintenance agreement is signed. The Contract Administrator should also try to negotiate shipping terms in case the equipment needs to be returned to the manufacturer for repairs. Equipment that can be serviced under a common agreement should be grouped and identified by model number and manufacturer. If a number of pieces of equipment need servicing, the supplier might be willing to extend a quantity discount. Information should be requested from individual manufacturers on standard maintenance agreements and what, if any, policy the manufacturer has on maintaining another manufacturer’s equipment. A maintenance schedule should be developed which is mutually agreeable to the requestor and the supplier so that the equipment will be available and accessible for servicing. If feasible, the contract administrator should look at the cost of obtaining an independent contractor to handle repairs and maintenance versus the original equipment manufacturer (OEM). Service representatives from the OEM may have to travel some distance to repair your equipment – travel time the requestor will have to pay for. Sometimes, an independent contractor will be able to handle service and repair requirements for a lower rate because the service representatives are closer. However, the contract administrator and the requestor must be confident that the independent contractor can obtain the parts and personnel needed to service and repair the equipment.
TUFTS CAPITALIZATION POLICY
Capital expenditures can occur at any time throughout the year. There are two types of capital expenditures: construction projects and equipment purchases. All construction projects are managed by the Operations Division. All capital equipment purchases are processed by the Purchasing Office. The university capitalizes movable equipment expenses that exceed $5,000.
EQUIPMENT POLICY SUMMARY – CAPITALIZATION
Equipment is capitalized and recorded in the Property Management System database if the acquisition cost of the item is $5,000 or more and has a useful life of at least one or more years. A system with multiple components which cannot operate independently of each other and together cost $5,000 or more will also be capitalized. Property tags are affixed to each equipment item.
For record keeping purposes, all capitalized equipment purchases are recorded to specific account codes in the PeopleSoft Financial system. Accounts 5401 through 5405 are reserved for capital equipment purchases. Only items with an individual cost or total component cost of $5,000 or more should be coded to these accounts when completing a requisition for a purchase order.
Once payment has been recorded, the Capital Asset Administrator will obtain a copy of the invoice for the purchase order. With this information, the Capital Asset Administrator will visit your department and tag the equipment. This usually occurs within thirty days of notification that payment for the equipment has been finalized. Equipment may be acquired in the following ways:
Through the Purchasing process
Through transfer from other institutions
Under government grants and contracts
Each department is requested to notify the Capital Asset Administrator concerning equipment that is not acquired through the purchasing process. If you would like to inquire about the status of tagging for an equipment item, please contact Ed Fanikos at extension 72008 or via email.
DISPOSITION OF EQUIPMENT
The Capital Asset Administrator must be notified concerning any change in status for any item in the equipment inventory. This includes: moves, trade-ins and equipment transfers and surplus. Before disposition can be done, one must notify the Capital Asset Administrator by contacting Ed Fanikos at extension 72008 or via email
In order to comply with federal regulations, a physical audit every two years. A representative from the Purchasing Office from will coordinate the audit with each department.
If you would like information about your department’s equipment inventory, please contact Ed Fanikos at extension 72008 or via email.
If you have equipment that is no longer of use to your department and is in good condition, the equipment will be offered to other departments within your division. Before doing so, one must notify the Capital Asset Administrator by contacting Ed Fanikos at extension 72008 or via email. Should no interest for utilization be found within your division, the items will then be offered to all departments at the university. Delivery arrangements for the equipment are the responsibility of the department obtaining the equipment. Only after it has been determined that such equipment cannot be utilized at the university, the item will be made available for personal purchase. A fair market value, including sales tax, will be obtained for the item and the purchaser will be required to file a bill of sale. The proceeds from the sale will be allocated by the University Budget Center to the department selling the equipment.
The university makes every effort to recycle equipment in an environmentally responsible manner. Departments must coordinate the removal of computer equipment with Facilities Management and report any Tufts University property bar code numbers to Edward.Fanikos@tufts.edu . Most electronic equipment will be moved at no charge to the department. For larger items, i.e. refrigerators, desks and other lab equipment, a requisition will be required from the department so that charges can be allocated. All lab equipment must be inspected and approved by Environmental Health and Safety prior to removal.
21. OTHER ISSUES TO ADDRESS BEFORE PURCHASING CAPITAL EQUIPMENT:
PHYSICAL SITE PREPARATION
Does the receiving site have any limitations such as truck size, weight, or accessibility? Have provisions been made to remove old equipment, if necessary? Can the floor structurally support the equipment? Are freight elevators available and will the equipment fit? (Take the time to measure doorways and elevators.) Are electrical connections in place and compatible? Will the new equipment interface with existing equipment and how will this be accomplished? Request that the supplier give notification 24-48 hours before delivery and be sure that arrangements are made to remove any old or existing equipment prior to the arrival of the new equipment.
Who will be responsible? What does it include? If the installation will be performed by the supplier’s personnel, make sure the supplier has adequate liability and worker’s compensation insurance. Can University personnel install the equipment? How long will installation take? Is installation a separate cost or included (F.O.B. Installed).
Is training available for end users? Where will it take place? How long will it take? Is training included in the purchase price? Is a user’s manual included, complete with parts list and schematic, and in English? Will the supplier provide on-going technical assistance if needed?
AcceptanceThe equipment is expected to conform to certain performance specifications and should be tested before the contract administrator/end user authorizes payment to the supplier.
Warranties Warranties should begin from the date of installation, testing and training. The equipment should be operational and personnel fully trained. The Purchase Office/end user should avoid taking partial shipments and risk warranties on components expiring at different times. If the equipment is to be stored, arrange with the supplier for an extended warranty or have the supplier activate the warranty after the equipment has been installed and tested. Otherwise, the warranty may expire before the equipment is up and running. The Purchasing Office/End User may find an extended preventative maintenance agreement more cost effective than whatever discount terms the supplier is offering.
Service and Maintenance See Equipment Maintenance and Service Agreements (above)
Payment Terms Negotiate payment terms with the supplier and specify the terms on the purchase order. Occasionally, suppliers will request a partial payment when the order is placed, another payment when the order is shipped, and final payment when the equipment is accepted. Progress payments are typically made if the equipment is expensive