Needed goods and services will be identified, selected, and acquired as economically as possible according to specified standards of quality and service, while giving responsible suppliers fair consideration. This should be done in a timely and organized manner that provides for the accountability of University expenditures. With few exceptions, Purchasing Services shall conduct a competitive process to select vendors for single purchases $50,000 and over, AND for repetitive purchase requirements valued at $50,000 and over annually, AND for purchases $250,000 and over from U Wide contract vendors. Splitting purchases to avoid bidding is expressly forbidden. See Bid Requirements.
All purchases must comply with State laws, Federal laws and guidelines, University policy and the University of Minnesota Purchasing Code of Ethics.
Purchasing Services staff will document their commitment to ethical practices by signing a Purchasing Code of Ethics. Department personnel, who have purchasing responsibility, shall document a commitment to ethical purchasing practices by signing a Code of Ethics for Department Staff Responsible for Buying.
Exclusions
University libraries may purchase materials in various formats, including micro formats and electronic formats, that are required for instructional or research purposes and become part of the library collection. University Bookstores may purchase resale items.
Purchases of goods, services and professional services between the University of Minnesota and University of Minnesota Physicians shall not require review and approval from Purchasing or from the Board of Regents, but shall instead be consistent with the Master Agreement for the Purchase of Goods and Services Between the University of Minnesota and University of Minnesota Physicians. The Master Agreement does not apply to lease of real property from one party to the other, or to sponsored research activities and related subcontractor relationships.
Special Situations
Purchases of goods, services and professional services from Fairview University Hospital shall be handled in a manner consistent with University Purchasing Policy, but purchases from Fairview University Hospital that are related to research projects shall not require bidding for any dollar amount.
To ensure quality, consistency, and control, University Relations has directed that all official University business cards and stationary be printed by University Printing Services (TC Campus), Printing Services (Duluth Campus) or Duplicating Services (Morris Campus).
Follow special procedures for purchases of restricted commodities:
For controlled substances, see Administrative Policy: Using Controlled Substances for Research for information.
Departments with repetitive annual purchases from a vendor that exceed the bid threshold will submit a Requisition to Purchasing for competitive bidding.
Outsourcing activity, which creates the potential for displacing University employees, is governed by a special multi-step process.
It is recommended that emergency purchases be handled through the U of M Purchasing Card. If that is not an option, University staff may purchase items under $500 needed for emergencies and request reimbursement with proper documentation including original receipts and authorized signature.
This policy is necessary to ensure appropriate stewardship of University assets, integrity when acquiring goods and services, and accountability to funding sources.
The following forms are issued by Purchasing Services only:
- Request For Bid
- Request for Proposal
- Bid Referral Form
- Addendum
- Usually refers to a request to change a Request for Bid (RFB) or a Request for Proposal (RFP) prior to the due date and time.
- Basis for Price
- Explains how the vendor or contractor arrived at the dollar amount to charge the University when standard price list and catalogs are not available.
- Basis of Vendor Selection
- Explains why a department has chosen a specific supplier over other potential suppliers of a good or service.
- Bid Threshold
- Dollar amount, set by administrative policy and reviewed biennially by the Board of Regents, at and over which purchases must be competitively bid.
- Blanket Order
- A price agreement with a vendor establishing prices, discounts, or other terms, which will be in effect for a specific period of time, usually at least one year.
- Equipment
- Physical resources or fixed assets for the University such as: machinery, apparatuses, instruments, etc. Equipment that costs $2,500 or more is considered capital equipment.
- Freight On Board
- Indicates the point at which the ownership or title of the goods transfers from the vendor to the customer.
- Non-PO-Related Purchases
- A list of items and services that departments may purchase directly from the vendor without competitive bidding or issuance of a purchase order.
- Professional Services/Consulting
- Specialized services that require intellectual or creative expertise, often original in character. Examples of professional services are artistic design services, editorial services, executive search services, audit services, and software development.
- Purchase Order
- Document used to order a product or service from an external vendor.
- Reasonable Price:
- A price that can be shown to be not excessive and consistent with current market prices. Reasonable price may be ascertained by sending a Request for Bid (RFB) or Request for Proposal (RFP) to three or more competitors and comparing bids/proposals, or by comparing a quoted price to one or more of the following:
- Comparison to previous purchases
- Comparison to peer institution's purchase
- Comparison to similar purchases
- Cost / Price breakdown of all charges + markup
- Knowledge of the market
- Request for Bid (RFB)
- A competitive process initiated through Purchasing Services. An RFB requests bids for specific goods or standard services from vendors. The purchase order or contract is awarded based on the lowest price meeting the stated specifications.
- Request for Proposal (RFP)
- A competitive process initiated through Purchasing Services. An RFP requests solutions from several or many vendors. The award is made to the vendor offering the best proposal or solution based on the stated evaluation criteria, one of which is price.
- Split Distribution
- A method to identify more than one account to pay for a purchase.
- Standard Services
- Standard services are services that are routinely provided to a large number of customers usually at published rates without significant customizing. Firms rather than individuals are likely to provide these services.
- Examples of standard services are dry cleaning, extermination services, equipment maintenance, laboratory testing services, lawn care, and courier services.
- Supplies
- Consumable items, provisions, etc. Examples of supplies are pens, paper, beakers and chemicals.
- University-Wide Contract
- A contract negotiated by Purchasing Services, with prices, terms, and conditions available for use by all campus locations within the University. See University-Wide Contracts website. With the exception of U-Wide Contracts for printing, departments may place individual orders with U-Wide Contract vendors up to $249,999 without bidding.
- Buyers
- Ensure that all purchases made by or through them will comply with applicable policies, laws, and guidelines and ethical practices. Adhere to Purchasing Services Code of Ethics.
- Deans, Directors, and Department Heads
- Ensure that all purchasing activity conducted in their units complies with applicable policies.
- Director of Purchasing
- Recommend policy changes. Establish and maintain University of Minnesota purchasing processes that incorporate compliance with applicable policies, laws, and guidelines. Oversee the competitive process for purchases over the bid threshhold. Provide assistance to University departments to ensure adequate vendor performance. Maintain a vendor relations program that includes new vendor orientation, a vendor access plan, and a vendor performance program. Provide a vendor environment that is inclusive, participatory and competitive. Establish purchasing contracts (discount agreements) with vendors. When appropriate, approve requests for exceptions to the Regents' Purchasing policy.
- Report purchasing activity to the Board of Regents quarterly. Seek approval from the Regents, monthly, for all purchases of $250,000 and over. Report annually to the Regents the dollar volumes purchased using U-wide contracts.
- University Staff involved in purchasing activities
- Ensure that all purchases made by or through them comply with applicable policies and ethical practices. Learn and follow University purchasing procedures. Document unacceptable or exceptional vendor performance and notify Purchasing Services.
Board of Regents Policies:
Administrative Policies:
Other Related Information:
- OMB Circular A-110, "Uniform Administrative Requirements for Grants and Agreements"
- OMB Circular A-21, "Cost Principles for Educational Institutions"
- Minnesota 15.43, Acceptance of advantage by state employee; penalty.
Subdivision 1. Financial interest of agents. No employee of the state or of the University of Minnesota in direct contact with suppliers or potential suppliers to the state or the university, or who may directly or indirectly influence a purchasing decision or contract by establishing specification, testing purchased products, evaluating contracted services, or otherwise has official involvement in the purchasing or contracting process may:
- 1. have any financial interest or have any personal beneficial interest directly or indirectly in contracts or purchase orders for goods or services used by, or purchased for resale or furnished to a department or agency of the state or the university; or
- 2. accept directly or indirectly from a person, firm, or corporation to which a contract or purchase order has been or may be, awarded, a rebate, gift, money, or anything of value other than items of nominal value. No such employee may further accept any promise, obligation or contract for future reward. *University Purchasing considers $5.00 to be nominal value for purposes of avoiding conflict of interest in purchasing.
According to State law (M.S. 15.43), violation is a misdemeanor.
- Minnesota 179A.01 and 179A.11, "External Subcontracting"
- Federal Acquisition Regulation
- Amended:
- June 2008 - Policy completely revised to address the Enterprise Financial System rollout. Updated language in the Laws, Policies, Requirements of the Planning Purchases procedure. Appendix A and Bid Specifications added.
- Amended:
- February 2007 - Bid Threshold increased from $10,000 to $50,000 for non-UWide contract vendors. Changes made throughout policy to reflect this.
- Amended:
- July 2006 - Policy Statement amended to make it explicitly clear that splitting purchases to avoid bidding is expressly forbidden.
- Amended:
- April 2006 - Added the following to Special Situations: "Purchases of goods, services and professional services from Fairview shall be handled consistent with University Purchasing Policy, but purchases from Fairview that are related to research projects shall not require bidding for any dollar amount." Added Audit Committee Charter and Attorneys and Related Services Regents policies to Related Information.
- Amended:
- January 2006 - Updated definitions, responsibilities, procedures, forms and appendices. The policy statement was slightly abridged.
- Amended:
- December 2004 - Emergency Purchase limit increased from $200.00 to $500.00 in Special Situations section.
- Amended:
- January 2004 - Added Common Audit Recommendations - Purchasing & Disbursements to appendices.
- Amended:
- April 2002 - All references to "Special Payments" changed to "Non Purchase Order Related Payments".
- Amended:
- January 2001 - Appendices B and C updated to reflect current requirments for documentation and justification within the POT and PVA.
- Amended:
- February 1999 - Policy Statement wording change in 2nd paragraph. Third paragraph added with link to Departmental Code of Ethics.
- Amended:
- June 1998 - Added passes and tickets category to Special Payments table in Appendix B: Direct Purchase Procedures.
- Amended:
- February 1998 - Clarified the exclusions section to more accurately reflect the purchasing authority granted to University Libraries in the Regents Policy on Libraries and Archives.
- Effective:
- January 1998
- Supercedes:
- Purchasing and Restricted Commodities
-
To obtain a copy of a historical policy,
e-mail the U Policy Librarian at policy@umn.edu or call 612-624-4372.
Help
Policy Feedback
Print Policy
