13.03

The Procurement Process PRO CAM

POLICY OVERVIEW

As stated in policy 13.02 General Procurement Principles, procurement services makes every attempt to obtain the "best value" for the university.^a In determining best value, procurement services will consider the following:

• the purchase price;
• the reputation of the vendor and of the vendor's goods or services;
• the quality of the vendor's goods or services;
• the extent to which the goods or services meet the unit's needs;
• the vendor's past relationship with the unit;
• the impact on the ability of the unit to comply with laws and rules relating to historically underutilized businesses (HUBs);
• the total long-term cost to the unit of acquiring the vendor's goods or services; and
• any other relevant factor that a private business entity would consider in selecting a vendor.

PROCEDURE

Departments within the university are delegated authority to purchase goods and services, within certain guidelines, to $5,000 using a procurement card or a small order (SO). For information on procurement cards, refer to the procurement card instruction manual, available on-line (http://admin5.hsc.uth.tmc.edu/fin_svcs/ accounting/procure.html).

When acquiring goods and services that cost more than $5,000, the department enters a requisition (RQ) so procurement services may acquire the goods and services by the method that provides the best value, including but not limited to the following:

1. Competitive bidding,
2. Competitive sealed proposals,
3. Catalogue purchases,
4. Group purchasing program,
5. Open market contract.

I. Distribution

Once the small order (SO) has been placed by procurement services, the vendor ships the material to the distribution department or, preferably, to the department that placed the order.

If the merchandise is shipped to the distribution department, a distribution staff member verifies that the merchandise received is the merchandise ordered, checks the merchandise for visible damage and shortages, and initiates a claim with the vendor or shipper if shortages or damages exist. The department that ordered the merchandise acknowledges that all merchandise was received as ordered and in good condition, and distribution personnel enter a receiver (RC) against the SO.

If the merchandise is shipped directly to the department that ordered it, the department checks that all material is received as ordered and in good condition, and enters an RC against the SO.

II. Payment

The vendor sends the invoice to accounting. When a three-way match exists between the SO, RC, and the vendor invoice in The University Financial Management System (TUFIMS) tables, accounting pays the vendor. Accounting pays all invoices; invoices received by other departments must be immediately forwarded to accounting.

III. Capital Assets

Equipment valued at more than $1,000 is considered a "capital asset" and must be tagged, tracked, and inventoried annually. Equipment valued at less than $1,000 is not considered a capital asset and is therefore neither tagged nor inventoried; however, such property is still state property and must be retained in the department's custody and used for the proper purposes.

^a Texas Government Code 2155.132; Texas Education Code 51.9335.

Updated 08/05; 08/07