Policy Author:
Office of Business Affairs
Responsible Office – Department:
Office of Business Affairs
Effective Date of Policy:
2008, reviewed annually
Purpose of Policy
The purchasing policy of Daemen University is comprised of several interrelated policies. These policies ensure adherence to defined budgetary goals, audit requirements, and IRS rules when making decisions to purchase goods and services with university funds.
Policy Narrative
Annual operating budgets are approved by the cabinet and the board of trustees. Spending by department managers/chairs must not exceed their approved budgets and be for legitimate and appropriate university purchases. The fiscal year of the university runs from June 1 – May 31. All invoices will be charged to the budget year in which goods or services are received or an event takes place. The Competitive Bidding Policy will be followed whenever appropriate.
A purchase requisition (PR) system is utilized to authorize payments to vendors. Purchase requisitions must be created and approved prior to purchase, be within the remaining approved budget for department expense line, be for legitimate and appropriate university purposes, and must include the appropriate approval signatures. Purchases may be paid by check, corporate credit card, or electronic payment as deemed appropriate by the Office of Business Affairs.
Purchase requisitions should be processed through the purchasing department for all items and for all departments except as noted. Exceptions are granted in situations where specialized technical requirements make it more efficient for specifically approved departments to place orders directly with their vendors. The centralized purchasing system of the university brings the following benefits to our institution:
- Ensures vendors are aware of our tax-exempt status, thereby eliminating the time consuming process of removing sales tax charges from invoices.
- Ability to negotiate volume discounts, favorable return policy and/or waiving of shipping and handling fees.
- Demonstrates Daemen’s commitment to support the local economy through the use of local vendors and thus creating reciprocal relationships.
- Ensures compliance with approved departmental budget constraints.
- Fulfills control requirements and documentation expectations for our annual institutional audit.
Refer to the Business Affairs website for forms and procedures.
Additional policies related to purchasing are found below.
Purchasing Related Policies:
Capital Purchases–Equipment Classification
It is the policy of Daemen University to classify all items of equipment in the 51503 line of each departmental budget. Items with a useful life of one year or more and that cost over $5,000 are considered equipment. Additionally, bulk purchases of assets with lives in excess of 1 year having a total cost in excess of $5000 are to be classified as equipment (i.e., computer lab refresh, office remodel, etc.) Purchases of items that do not meet the criteria should be considered supplies and coded to the 51502 line of each departmental budget.
Competitive Bidding Policy
Approved by the President’s Cabinet – December 15, 2003
Revisions approved by cabinet September 9, 2014
Purchases are defined as supplies, equipment, purchased services, consultants, and contractors.
1) Dollar Thresholds:
- $0 – $10,000 – No Quotes Required
Although bids are not required for purchases up to $10,000, the university strongly encourages departments to seek the best price on all purchases. - $10,000.01 – $25,000 – Minimum of 2 Quotes (can be verbal)
Purchases over $10,000, up to and including $25,000, require 2 quotations. The quotes can be in writing, via telephone or via fax. If by telephone, a record of the transaction must be maintained to include the name of each supplier contacted, person providing the quote. date of the quote. and quoted price. Departments can directly solicit bids or request that the purchasing department solicit the bids on their behalf. If the low bid is found to be unacceptable, the department head should write a justification for not accepting the lowest bid. - Over $25,000 – Minimum of 3 Written Quotes
All purchases over $25,000 require 3 written quotations. Departments can directly solicit bids or request that the purchasing department solicit the bids on their behalf. Documentation for purchases over $25,000 are to include the following:
a) Copy of the “Request for Bids” or the letter soliciting quotes which clearly specify the requirements of the university, such as quantity, description, delivery, special conditions, drawings, bid due date, etc.
b) Names and contact persons for suppliers solicited.
c) Copy of quotes from all responsive suppliers.
d) Basis for selection and award price.
e) Justification for lack of competition when competitive bids were not obtained, such as emergency purchases, library acquisitions, requirements based on lease, rental or warranty agreements, design compatibility with existing equipment, only known source of supply, or agency specified vendor.
2) When evaluating quotes, consideration should be given to the following criteria when applicable:
- Price
- Quality and conformance to specifications
- Delivery schedule
- Life Expectancy
- Warranty
- Bidder’s previous record of performance
- Vendor Stability
- Ability of bidder to render satisfactory service in this instance
3) Unsuccessful bidders are to be notified that the bid has been awarded, although it is not necessary to inform them of the successful bidder.
4) Documentation of bids and awards are to be sent to the business affairs office with the original purchase requisition, to be maintained for year end auditing purposes.
5) This policy applies to initial bids for purchases. Documentation to justify why competitive bids are not obtained on renewal contracts of $10,000 or greater must be submitted to the supervisory cabinet member and approved in advance.
6) This policy applies to all purchases by Daemen University employees and departments. In addition, employees who make purchases on grants where Daemen is serving as the fiscal agent must follow this policy and any additional regulations as mandated by the funding agency. Purchasing policies applicable to federal grants and agreements are listed on the National Archives Code of Federal Regulations webpage.
Corporate Credit Card Policy
Daemen University provides some employees with a corporate credit card to aid in travel arrangements and expenditures. Any request for issuance of a Daemen credit card must be made to the Office of Business Affairs using a Credit Card Request form. In order to qualify for a credit card, the applicant should be regularly traveling 3 or more times per year, or have other specific circumstances that necessitate a corporate credit card. All requests must be signed by department heads and the business affairs office.
Daemen corporate credit cards should not be used for normal purchases of office supplies and equipment items. These purchases should continue to be made through the purchasing department using the regular purchase requisition system. This will insure that issues such as audit compliance, price discounts, taxes, and shipping/return problems can be handled in an expedient manner.
Daemen corporate credit cards are to be used only for university-related expenses. Since the university is a tax-exempt entity, New York State sales taxes should not be paid on any transaction. Tax-exempt forms are available in the business office.
Credit card expense reports are to be submitted monthly in accordance with procedures found on the Business Affairs website.
Emphasis on Local, Women/Minority-Owned Vendors
Daemen University has traditionally emphasized placing university business with local firms. Daemen is committed to promoting opportunities for small business, minority, and women vendors to participate in the university’s procurement, and for following the New York State MWBE guidelines for advertising opportunities for same.
This policy is written in general terms to allow reasonable discretion and will not cover every possible purchasing situation. Exceptions to this policy must be approved by the vice president for business affairs or controller and must be clearly justified as beneficial to the mission, goals, and objectives of Daemen University. Contact the controller with any questions.
Grant-funded purchases must follow guidelines specified in the grant. Contact the grants administration manager with questions.
Gift Cards Policy (effective 4.26.13)
Any requests for reimbursement or purchase of gift cards must include the purpose of the gift card(s) as defined below. The Record of Gift Card Distribution form will be used as proof of recipients receiving gift cards and must be submitted to the business office within 2 days of distribution of gift cards.
Gift cards may only be used for the following purposes:
-Prizes, recognition awards, or tokens of appreciation for students
-Prizes for employees
-Compensation for study subjects in approved studies
Gift cards should not be used as a form of payment to Daemen employees as they are considered taxable income.
Technology Procurement and Acquisition
All purchases of technology related equipment, software, and services must adhere to the Technology Procurement and Acquisition Policy.