Business and Financial Policies and Procedures
 

Section 7.2 - Purchase of Goods and Services

Date: February 2010
Approved: Senior Associate Vice President for Business and Finance

 

The OBFS Purchasing Division is authorized to establish procedures that facilitate the purchase of equipment, materials, commodities, supplies, general services, and professional and artistic services. No other individual or campus department has authority to commit the University to purchasing goods and services, unless that authority has been specifically given to them by the appropriate campus AVP.

The Purchasing Division makes all formal negotiations for prices, determines the appropriate prices and vendors (unless a campus department has been authorized to obtain specifications and cost estimates), and communicates with campus departments to be sure the product or service is suitable, reasonable, and timely.

Methods of Requisitioning Goods and General Services

The University offers three mechanisms by which to requisition goods and general services (See Section 17.1, Consultants and Other Contractors for Professional and Artistic Services, for methods of requesting Professional and Artistic Services)

Competitive Selection Process

A competitive selection process (Invitation for Sealed Bid/Request for Proposal {IFSB/RFP}) is required at specific dollar levels. The dollar levels for fiscal year 2014 are posted on the Bid Limits (2014) page.

Announcements and advertisements publicize additional information and provide the bid due date, time, and place of the bid opening. Announcements must be advertised on the Illinois Higher Education Procurement Bulletin for a minimum of 14 days. All IFSBs/RFPs are publicly opened in the presence of at least one member or officer of the Board of Trustees (BOT) or delegate. Departments should allow at least one month for the IFSB process and at least two months for the RFP process.

Construction-related professional services subject to the Architectural, Engineering and Land Surveying Qualifications Based Selection Act [30 ILCS 535] are exempted from the Procurement Code, and currently are required to be procured through competitive selection procedures if $25,000 or more.

In addition to the procedure outlined above, commodities and general services in the amount of $1,000,000 or more, and Professional and Artistic Services of $1,000,000 or more, including those for construction-related professional services of $1,000,000 or more, require BOT approval. At this dollar level, departments should allow up to two additional months for completion of the BOT approval process and award of contract or purchase order.

At dollar amounts below the required competitive selection process, it is a matter of good business practice and a requirement of specific funding agencies for the University to source procurements in a manner that will allow the maximum competition practicable. At dollar amounts up to those requiring a competitive selection process, departments and/or the Purchasing Division undertake efforts to obtain such competition, including requesting informal written or verbal quotes from multiple suppliers. When submitting a Banner requisition, the department should note in the "document text" (see OBFS Banner Alerts and Resources) the results of any efforts made to obtain such competition and, if written supplier quotes were obtained, submit such written quotes as an attachment with the requisition. The first line of the document text should reference that there is an attachment to the requisition, what the attachment is, and how the attachment will be sent to Purchasing.

Exceptions to the Competitive Selection Process

In exceptional circumstances the State mandated requirement for the competitive selection process may be waived by the Purchasing Division. Requirements for public advertisement of any exceptions are still applicable. Exceptional circumstances include commodities and general services available from one economically feasible source (“sole source”) or emergency procurements. Departments should contact their campus Purchasing Division if they believe an exceptional circumstance exists.

Exceptions may occur when:

  • A recommendation for purchase is being made for goods or services from a supplier other than the low bidder. In these cases, contact your campus Purchasing Division.

The Purchasing Division may ask the requisitioning department to submit a letter justifying the source selection, performance, quality, suitability, or timing of the item being purchased.

Restricted Items

Local, state, or federal agencies restrict the purchase of some items to ensure proper use and distribution of potentially hazardous materials.

Alcohol

UIC - Pure alcohol must be obtained from Chemistry Stores.

UIUC - Pure alcohol is obtained from Chemistry Stores, by authorized individuals, under rules established by law and controlled by the U.S. Treasury Department and the State of Illinois.

Computer Software and Electronic Services

Software and electronic services for which the total cost is less than $5000 may be purchased with a P-Card if the following requirements are met and the required forms are filed in the unit as back-up documentation for the purchase. Software and electronic services that do not meet these requirements must be purchased by submitting a purchase requisition.

“Electronic services” refers to Software as a Service (SaaS). SaaS is developed and hosted by its vendor; the customer accesses the software over the Internet. Unlike packaged applications installed on the customer’s computer or server, the SaaS vendor owns the software and runs it on its own data center computers. The customer has no ownership of the software but effectively ‘rents’ it, usually for a monthly fee.

Electronic services may be purchased with a P-Card if all the following conditions are met:

  • No data considered sensitive or highly sensitive resides on a third-party provider’s server. This means, no personally-identifiable information about an individual is stored on the vendor’s site and no confidential information is used within the site, including student information (e.g., grades, advising notes or other academic records).
  • No critical business function(s) is dependent upon the electronic service (e.g., a unit’s core operations will not suffer if the vendor closes down suddenly without warning).
  • No vendor is granting itself a license to use University data located in its data center.

Software (downloaded or packaged) may be purchased with a P-Card if all of the following conditions are met:

  • No non-public University data will be shared with a third party as a result of running the software; e.g., Social Security Numbers, credit/debit card data, health/medical data, or student data will not be shared as a result of using the software.
  • The software will not be embedded into new intellectual property unless the software license grants the right to do so.

For information about the selection and secure use of software and electronic services, contact:

UA: security@uillinois.edu; or kenrowe@uillinois.edu

UIUC: securitysupport@illinois.edu; or https://security.illinois.edu/content/purchasing-software-and-electronic-services-using-p-card

UIC: security@uic.edu; or edz@uic.edu

UIS: jmene1@uis.edu; or jsimp@uis.edu

Gift Cards/Gift Certificates

Gift cards/gift certificates cannot be purchased using i-Buy, PCard, or Banner. Gift cards/certificates have a cash value and are thus considered reportable income.

Gift Cards should be purchased via a Program Advance (see Section 8, Payments and Reimbursements).  Also see Section 21, Merchant Cards.

Pharmaceuticals

These are controlled under MD, DDS, or DVM prescription and are obtained as chemical, medical, dental, or veterinary items through University pharmacies or the Purchasing Division.

Postage Stamps

All postage stamps purchased with State funds must be perforated with a University identification marker. For additional information on purchase of postage stamps, see Section 8, Payments and Reimbursements.

Radioactive materials

By law, the Illinois Department of Nuclear Safety (IDNS) licenses the production, sale, use, disposal, and transfer of radioactive materials in the State of Illinois. The University of Illinois obtains, uses, and disposes of radioactive materials under licenses granted by the IDNS and must adhere to regulations established by various federal, state, and local agencies. The campus Radiation Safety Committee grants final approvals for the acquisition, use, and disposal of radioactive materials.

Weapons

Weapons acquisition must comply with the policies and procedures described in Section 1.5, Possession of Weapons Administration (UIC, UIS, and UIUC) and the Campus Administrative Manual, Possession of Weapons (UIUC only).

Restrictions for Purchases of Furniture and Fixtures

30 ILCS 605/7a requires the University to check for available surplus furniture at the State of Illinois Surplus Property Warehouse before purchasing new furniture. If suitable surplus equipment is available, the University will be required to obtain the furniture from the warehouse. The following procedures apply for purchases of furniture with a unit cost of $500 or more.

The Purchasing Division takes the necessary steps to review surplus furniture availability when it receives requisitions from departments. If it is determined that there is no surplus furniture meeting the ordering department's needs, the Purchasing Division will file the necessary affidavit with the State certifying that the furniture was not available. The ordering department's assistance is required to complete the affidavit. Once the affidavit has been filed, the purchase of the furniture can proceed.

If suitable surplus furniture is available, the Purchasing Division notifies the department. There is no cost for the furniture but the department must pay for transportation costs and any necessary repair or refurbishing. The Purchasing Division assists departments in making arrangements for transporting the furniture to campus. In order to meet the requirement of 30 ILCS 605/7a, all items listed below must be purchased through the regular order process administered by the Purchasing Division:

  • Modular Furniture - Landscape partitions and/or systems furniture units that are joined together to create workspace or storage in an integrated configuration.
  • Office Furniture - Freestanding wood or metal furniture used for office applications including workspace (desks and tables), storage (cabinets, credenzas, freestanding portable shelving, file cabinets, and bookcases), conference tables, seating (individual, office, lounge, and reception area items)
  • Institutional Furniture - Beds, dressers, couches, lounge chairs, tables, chests, nightstands, or other items used to furnish hospital rooms or dormitory/residential areas.
  • Library Furniture - Library shelving, cabinets, files, charge desks, tables, and other freestanding library fixtures used to accommodate library patrons or provide storage for materials.
  • School Furniture - Student desk and chair units, movable chalkboards, lockers, locker room benches, or other such items commonly used for educational applications.
  • Mailroom Furniture - Sorting units, shelves, and tables utilized for mail sorting applications.
  • Laboratory Furniture - Tables, cabinets and other portable storage units used within a scientific laboratory application.
  • Audio Visual Equipment - Lecterns, portable chalkboards, or cabinets used for storage of audio-visual equipment or media.
  • Industrial & Safety Furniture - Storage cabinets used for storage of flammable items, workbenches, tool cabinets.
  • Miscellaneous Furniture & Fixtures - Folding tables, coat racks, valets, folding chairs, coffee and end tables, stools, lamps.
  • Data Processing Furniture -Furniture used for the support of data processing equipment, including computer tables, desks, and media storage cabinets.

Standards for office furniture, furnishings, and fixtures (UIUC only) - Standards for office furniture, furnishings, and fixtures have been established. These standards are to be used as a guide for planning, budgeting, and requisitioning furniture for all purposes. The Purchasing Division provides documents that describe the acceptable standards for furniture and furnishings. Purchases of office furniture and furnishings not on the approved lists require approval of the Senior Associate Vice President for Business and Finance or delegate for University Administration departments and the Associate Vice Chancellor for Administrative Affairs for campus departments.

Other

Interstate embargoes may limit some items. These are handled according to the appropriate regulations. Consult the Purchasing Division for details.

Purchases Requiring Special Approval

Advertising

University funds may be used for public relations, promoting educational exhibits, informational announcements, official notices, recruitment notices for faculty/staff, and publication of brochures. The University will not pay for entertainment, community relations, or public relations not directly related to the objectives of the University. This prohibition includes, but is not limited to, athletic events, cultural events, conventions, or any other activity not conducted by the University. State appropriated funds may be used for the following:

  • Brochures giving information about educational opportunities at the University.
  • Informational announcements, such as course offerings.
  • Listings of graduate programs in professional journals.
  • Notices about educational exhibits.
  • Official notices.
  • Recruitment notices for faculty and staff.

The dean or director of the unit involved approves, in advance, the use of state-appropriated funds. As appropriate, the Vice President or Vice Chancellor for Academic Affairs also approves, in advance. Proposed advertisement copy should be included when requesting approval. Auxiliaries, enterprises and activities - Auxiliaries and other quasi-commercial activities may advertise when promoting the sale of a commodity or a service that may provide increased revenue to the University. The cost of the advertising is offset by income realized. State-appropriated funds may not be used for this purpose.

Decorations

Office decorations such as paintings, prints, wall hangings, plants, planters, and other art or decorative objects may be purchased only when specific budget appropriations are made for this purpose. The purchase must be made from a self-supporting fund, gift fund, agency fund, or some other income-producing fund. Exceptions to this policy require the prior approval of the Chancellor or delegates for campus departments or the appropriate Associate Vice President for University Administration offices. Holidays - Ornaments, decorations, and greeting cards for religious and secular holidays may not be purchased from state-appropriated funds.

Safety - All decorations must conform to the appropriate campus safety regulations.

Modifications to Physical Space

The Office of Facilities Management and Capital Programs are responsible for the performance of projects associated with construction, rehabilitation and renovation of physical space. All requests for modification of physical space whether repair, refurbishing or enhancement must be directed to that Office. This includes the design of such modifications, management of the work to be performed, and the work (including labor and materials). Any exceptions to this policy must receive prior written approval by an authorized representative of the Office of Facilities Management and Capital Programs. Therefore, any request submitted to the Purchasing Division to process a contract where the scope of the services includes construction, rehabilitation, renovation, modification, repair or enhancement of the physical space, shall be accompanied by written approval of an authorized representative of the Office of Facilities Management and Capital Programs. It shall the responsibility of the originator of the request to seek approval from that Office before the Purchasing Division initiates any procurement or contracting activity associated with the services sought.

Print Services

The "State Agency Printing" section (30 ILCS 500/20-105) of the Illinois Procurement Code states that all books, pamphlets, documents, and reports published by a State agency must contain the following information:

  • "Printed by the Authority of the State of Illinois."
  • Date of each publication.
  • Number of copies printed.
  • Printing order number.

Public universities are exempt from the above requirements if any of the following conditions are met:

  • The printing service is not paid for with State funds.
  • The printing service is fulfilled using "on-campus" printing services.
  • The printing service is performed on behalf of another state governmental body.

Departments are responsible for determining if printing requests fall under one of the exemptions listed above. If a printing request does not meet one of the exemptions, department must ensure the printed material contains the information required by the Illinois Procurement Code as listed above. Additional requirements and considerations that pertain to any printing done by the University are as follows: The "Soybean-oil based ink" section (30 ILCS 500/45-15) of the Illinois Procurement Code mandates that the procurement of printing services must specify the use of soybean oil-based ink. The Chief Procurement Office for Higher Education may waive this requirement if he or she determines that another type of ink is required to assure high quality and reasonable pricing of the printed product. This requirement applies to both on and off-campus printing services.

If off-campus, a signed vendor certification letter, which certifies the vendor is in compliance with the "Prevailing Wage Requirements" section (30 ILCS 500/25-60) of the Illinois Procurement Code, must be obtained. Printing trade customs allow for plus or minus 10% in over/under runs. The University has standards for certain stationery materials including items with logos, items with the University Seal, and business cards. If using off-campus sources for printing these materials, departments must obtain written confirmation from the appropriate campus or University Administration office to ensure that the proposed materials conform to those standards prior to making the purchase.

Departments must purchase stationery and other printed products with recycled material content whenever cost, specifications, standards, and availability are comparable to products without recycled content.

At UIC, departments are encouraged to use paper with at least 10% post consumer content. For additional information, contact the Office of Publications.

At UIUC, departments should refer to the Campus Administrative Manual for Standards for Printed Stationery Materials and Policy on Procurement of Typesetting, Printing, and Binding for the Urbana-Champaign Campus to obtain additional information on the requirements of printing related services.

At UIS, all printing, binding, and typesetting procurement requirements must be reviewed by the Campus Services and the Purchasing Division prior to obtaining printing related services.

Equipment Loaned to the University

Vendors occasionally loan equipment to the University for trial purposes, testing, evaluation, or short-term projects at no cost. The Purchasing Division handles the arrangements for such loans, but the Office of Business and Financial Services, Grants and Contracts Office arranges for equipment loans used by sponsored programs. In the event the vendor has an insurance requirement in the loan agreement, the University Office of Risk Management should be contacted for assistance complying with the terms of the requirement.

Freight

At all campuses, when freight bills are received directly by the department, they should be sent immediately to University Payables. The freight bill should be signed and dated to signify approval for payment. Include the purchase order number (if known) or account number on the freight bill. All freight bills must be paid within seven days of the receipt of the merchandise. Note: This excludes standing orders that some UIC and UIUC departments have with United Parcel Service (UPS) or freight companies.

Gas Cylinders

Safety requirements must be observed for gas cylinders. If a compressed gas cylinder ruptures or develops a leak at the valve, place in a secure location and contact the campus Safety Office, to coordinate emergency procedures. Refer to the succeeding paragraphs for additional information on gas cylinders at each campus.

At UIC, certain steps must be taken when partially filled or empty compressed gas cylinders are returned to a vendor when no credit for contents is desired. West campus users returning partially filled or empty compressed gas cylinders should, whenever practical, have the cylinders delivered to the Central Receiving Dock, or request that Central Receiving to pick them up so they can be returned. East campus users should return gas cylinders to the department from which the cylinders were originally received (such as Chemistry Stores).

At UIUC, refer to the Division of Research Safety for information on gas cylinders.

Operating and Capital Leases of Equipment

Departments may acquire the use of equipment over some specified time period through a lease agreement. There are two types of lease agreements: capital leases and operating leases. Capital leases essentially transfer the benefits and risks inherent in ownership of the property to the University; operating leases do not. (See Section 12, Property Accounting, for official University definitions.) Some capital leases also provide for acquisition of equipment with title passing to the University after a specified number of payments. The Purchasing Division is responsible for monitoring lease agreements and properly classifying them at their inception.

Occasionally departments may find it convenient to seek outside financing for an acquisition; however external financing should be sought only when there are no internal sources of funds.

Conditions for Leases

Departments may acquire equipment through an operating or capital lease arrangement if the following conditions are met: Operating or capital leases from vendors or third party financiers are not made for transactions less than $25,000 (principal amount).

Exceptions to these guidelines must be approved by the campus Assistant Vice President for Business and Finance, or delegate. Attempts should be made to fund these transactions within the University. Any internal financing must be reviewed and approved by the OBFS. Additional reviews and approvals may be required depending on the nature of the purchase and campus requirements. Contact the Purchasing Division for information on additional requirements.

All operating or capital leases to be paid with federal funds must be reviewed in advance by the OBFS, Grants and Contracts Office.

The source of first-year funding must be determined. The FOAPAL(s) must be included to show adequate funding resources.

While funding out clauses are required by law in University lease agreements, departments and colleges should not expect to invoke the funding out clauses unless exceptional circumstances warrant it. Therefore, when funding sources are revoked before the agreement is completed, departments and colleges may be required to provide alternate funding for the remainder of the agreement.

Expediting

The Purchasing Division follows up as requested on purchase orders (excluding P-Cards) to speed the purchasing process. The Purchasing Division handles correspondence with vendors regarding any aspect of the order. Under certain circumstances, the Purchasing Division may authorize the department to correspond with the vendor. In such cases, the department should refer to the purchase order number and provide copies of any correspondence to the Purchasing Division.

Losses, damages, and adjustments - When an order is damaged or lost, the Purchasing Division communicates with the vendors or carriers. Losses and damages are reported according to appropriate campus procedures.

Ethical Purchasing Practice

Conflict of Interest

The University complies with State of Illinois requirements regarding potential procurement conflicts of interest. Please contact your campus Purchasing Office for information regarding current requirements.

Gratuities

Employees must avoid accepting any kind of gratuities, tips, or gifts. This includes merchandise, cash, or services for the performance of their duties, either past or future. (See Section 9.8, Gifts to Employees, for more information about the State Officials and Employee Ethics Act, which restricts University employees from accepting gifts from prohibited sources.) Department heads must be careful to avoid undue influence of employees in the objective performance of their duties. They must also avoid and exercise particular discretion and caution in sensitive areas that might later embarrass the employee, campus unit, or University.

This includes:

  • Admission to academic programs.
  • Awarding of grants, scholarships, and similar awards.
  • Employees who influence the selection of types of equipment, commodities, service or vendors.
  • Review and acceptance of sponsored programs, projects, or contracts.
  • The purchase of equipment, commodities, or services.

This does not prohibit:

  • Accepting advertising, desk novelties, or similar items that are small or of little value (to a maximum of $100/year), of the sort that sales staff or vendors often give away to regular or prospective customers.
  • Accepting meals that are closely equivalent in value to those allowed in Section 15, Travel.

 

Please send questions regarding this policy manual to OBFSPolicies@uillinois.edu.

Last Updated: September 26, 2013