Purchasing

Purchasing

SUMMARY

The Purchasing Procedure establishes the University's requirements for purchasing goods and services.

PROCEDURE 

Purpose

To detail the requirements for purchasing goods and services.  Covered in this document are:
  • Government Contracts
  • Quotation Requirements
  • Contract Agreements
  • Maintenance Agreements
  • Licence Agreements
  • Petrol Cards
  • Delivery and Acceptance of Goods and Services
  • Legality of Purchase Orders
  • Credit Cards
  • Petty Cash
  • Purchasing processes:
    - blanket orders
    - variation to orders
    - renewal of blanket orders
    - cancelling orders

Procedure

This procedure requires actions by the following:
  • Business Services Section, Office of Financial Services
  • Contractor
  • Director
  • Executive Dean
  • Head of Department
  • Higher Degree Research Student
  • Purchasing Officer, Budget Units
  • Staff
  • Supervisor

Staff, Higher Degree Research Student or Contractor

Establish a need to purchase a good or service.

Follow the steps listed within the Purchasing Checklist to identify the required good and/or service.

University Preferred Suppliers / Government ContractsEnsure University Preferred Suppliers or Government Contracts are utilised where appropriate. These can be located in the Procurement Handbook

Quotation RequirementsIf goods cannot be covered by the University preferred suppliers or Government Contract, it may be necessary to obtain quotes. When requesting written and verbal quotation, it must be ensured that information provided to suppliers is identical and the offers received are evaluated against identical criteria. All amounts are exclusive of GST.

Refer the quotes to the appropriate Purchasing Officer within your budget unit if you do not have the appropriate Delegation of Authority and/or access to Finance One.

Purchasing Officer in Budget Units

Purchasing officers in budget units must make appropriate checks to ensure the following is adhered to:
    • the Purchasing Checklist has been followed before placing any order (this may require a request for source documents from those wishing to purchase goods and or services)
    • the quotation and tender process has been followed as appropriate.
    • that every effort to seek information about potential suppliers from all available sources has been made to ensure effective and sustainable purchasing and value for money, whilst increasing supplier competitiveness by encouraging new potential suppliers to enter the field.
    • Under no circumstances should there be any “splitting of purchase orders” as a means of avoiding the need to seek a delegate’s approval for a higher level of expenditure or avoid the need to seek quotations/tenders.

After the above points have been considered the budget unit purchasing officers are responsible for entering purchase requisitions in Finance One.

The budget unit Purchasing Officer must attach all necessary quotes. All quotes must be scanned and attached to the requisition within Finance One to reduce paper usage. If this is not possible, send or fax (+61 2 9850 1697) all documents to the Business Services Section, Office of Financial Services.

All tenders must be initiated through the Business Services Section as per the Procurement Handbook which is responsible for providing advice on Tender advertisements and protocol.

Heads of Department, Directors, Executive Deans, Supervisors, Authorised Delegates

Ensure that fair, ethical and sustainable purchasing practices are undertaken on behalf of the University. This can be done by ensuring the Purchasing Checklist has been used.

Always be alert to situations that may have the potential to create a conflict of interest for purchasing staff (eg where a purchasing officer or a staff member involved with a quotation or tender has a pecuniary or other interest in a supplier organisation that is making a bid, (eg some form of personal relationship). Use the Conflict of Interest Checklist which can be located in the Procurement Handbook

Ensure all purchases have received approval by an officer with sufficient Delegation of Authority.

Ensure that only appropriate staff members, HDR students or contractors are given access to Finance One.

Ensure access is granted for all approving officers to eliminate the need for hard copy signatures.

Budget Unit Purchasing Officer

Contract Agreements

Advice on Contract Agreements is provided in the Procurement Handbook.

Maintenance Agreements

Individual Budget Units negotiate maintenance agreements with the supplier. The Budget Unit then uses Finance One to raise a requisition for the contract. The use of a standing requisition is recommended if the contract will be on going so that each year the contract/order can be renewed with the same details.

Licence Agreements

The University may be required to enter into licence agreements when purchasing computer software or other items. It is especially important, prior to such purchases being made, that the conditions of such licences are examined to ensure that the University is not placed in a disadvantageous position or that conditions do not put unreasonable constraints on the University or do not contradict the requirements of the Procurement Handbook and Purchasing Checklist.

The agreement must be referred to the University's General Counsel for an opinion and advice when required by the Contract Management Policy. Before purchasing a licence, the agreement should be examined to ascertain the following:
  • Its adherence to the principles of the Procurement  Handbook
  • The term or duration of the licence
  • The cost of the service and whether it is fixed or open ended - in general it is desirable to tie cost increases to the CPI
  • What the licence offers, for example, conditions of usage, access by the licensee, confidentiality of any programs
  • Options for termination and the notice required for termination by either party
  • Frequency of payments (that is, annually, quarterly, monthly). As it may be a financial disadvantage for the University to make a single annual payment for large contract amounts, it may be necessary to negotiate alternative frequencies of payment.

If the licence agreement is acceptable, have it approved by an officer with sufficient delegated authority and send the original agreement to the Business Services Section for processing of the order.
In approving the licence, the Budget Unit officer is committing both the Budget Unit and the University to the conditions stated on the agreement.

A copy of the licence agreement must be retained within the Budget Unit so it can be referred to in cases of disputes.

It is the responsibility of the appropriate officers within a Budget Unit to ensure that both the supplier and the Budget Unit comply with all terms and conditions of an agreement or contract.

Petrol Cards
  • Obtaining a petrol card Budget Units that own or regularly hire vehicles can obtain petrol cards for the use of their staff. The Head of the Budget Unit is responsible for the use of these cards.
    Normally petrol cards are organised when a vehicle is purchased. Budget Units can request additional cards by sending a memo to the Business Services Section.
    When applying for a petrol card you must supply the following information:
    • Type of fuel required, for example, unleaded petrol, oil, gas, diesel
    • Account name and number for payments
    • Budget Unit name or individual staff member's name.
    Petrol cards must be collected, and signed for, in person from the Business Services Section.
  • Using petrol cards
    Staff members can use the petrol card at service stations of the company issuing the card and can only purchase the fuel approved for that card. When tendering the petrol card, you are required to give the vehicle registration number and its odometer reading.
  • Checking your petrol card account
    It is the card user’s responsibility to verify the petrol card charges each month.
    Fuel is charged at the supplier's published monthly government price or the bowser price whichever is lower.
  • Renewals of petrol cards
    When petrol cards are due for renewal, a memo from the Business Services Section will be sent to the cardholder.
    Users need to pick up the new card from the Business Services Section. They will be required to sign for it and hand in the old card.
  • Cancelling a petrol card
    To cancel a petrol card, send a memo to Business Services giving details of the card to be cancelled.
  • Lost or theft of a petrol card
    In the case of a card being lost or stolen, the cardholder must notify Business Services immediately. If the loss or theft occurs outside business hours, the cardholder should contact the provider of the card directly and advise Business Services as soon as possible.

Delivery and acceptance of goods and services
It is the responsibility of the Budget Unit to check the quality and quantities of the goods received and report any discrepancies to the Business Services Section within 48 hours for corrective action. If discrepancies are not reported, payment of the invoice will proceed within the negotiated settlement terms.

Legality of Purchase Orders
University staff must note that a properly executed purchase order will become a legally binding document (refer to Appendix B). In some cases the purchase order could become a key document at law, as it is a written contract agreed between the University and a supplier.

Staff should also be aware of the requirements of service level agreements if in existence. The University terms and conditions of purchase accompany each purchase order issued. If a supplier unconditionally accepts the University purchase order then the terms and conditions that accompany the purchase order will formally govern the transaction.

However, if a supplier wishes to amend the University terms and conditions, the matter must be referred, without delay, to the Business Services Section for advice. Only in exceptional circumstances and with the approval of Business Services, will the terms and conditions of the supplier be agreed to over those of the University.

All purchase orders are issued by the Business Services Section. They are based on purchase requisitions entered into Finance One (FMIS) by a staff member within the Budget Unit.

Credit Card
University credit cards are to be used for University accommodation and other travel related expenditure. They can also be used for the acquisition of goods/services when it is not cost effective to raise a purchase order. Examples of such purchases are conference booking fees, some overseas payments over the internet, internal catering, small equipment items, etc. Refer to the Credit Card Policy.

Petty Cash
Petty cash is used for advances/reimbursements for staff members with a legitimate and urgent need to be reimbursed or to purchase small goods/services up to the value of A$100.00 (GST exclusive) where there is no acceptable alternative method of payment.

The preferred payment options are:
  • A supplier invoice processed by Accounts Payable
  • Direct payment by utilising the University’s Business Card
  • Direct reimbursement of expenses incurred to the claimant’s nominated Bank Account.

It is the responsibility of the Delegated Officer authorising the payment to ensure that the request for reimbursement satisfies all the policy requirements. Claims that are deemed to be for other than University purposes will not be reimbursed.

Non-negotiable limits apply to Petty Cash transactions. They are:
  • No salary or wage related payments will be accepted.
  • Reimbursements by the Cashier are restricted to a total of A$100.00 (GST exclusive), per person per day.

Business Services Section, Office of Financial Services

Business Services can provide assistance to Budget Units of the University on all matters related to the acquisition of goods/services.

Business Services is the only office authorised to issue official University orders. After a purchase order is issued, no correspondence is to be undertaken with suppliers without consultation and approval by the Business Services Section.

It is the responsibility of the purchasing officer issuing the order to ensure that:
  • All required procedures, including quotation requirements and sustainable options have been followed where applicable.
  • The details on the order are accurate.
  • Blanket orders
    Blanket orders can only be approved by the Assistant Director, Business Services Section. They are used for:
    • the regular supply of specific goods during the calendar year
    • cleaning contracts
    • maintenance contracts
    • mail services.
    Blanket orders are closed at the end of each calendar year.
  • Variations to Orders
    Variations to orders must be kept to a minimum. A written request to vary the order, approved by an authorised officer, must be forwarded to the Business Services Section for processing.
  • Renewal of Blanket Orders
    A list of blanket orders due for renewal must be submitted annually to the Assistant Director, Business Services Section for revision and approval.
  • Cancelling orders
    Orders are binding contracts and can only be cancelled if the supplier cannot fulfil the contract or by negotiation between the University and the supplier. When an order is cancelled, funds committed are automatically returned to the account from which the order was raised.
    Blanket orders can be cancelled at any time during the year, except those governed by the conditions of a contract. Those orders can only be cancelled by mutual agreement with the contractors.
    All requests to cancel a blanket order must be sent to the Business Services Section, in writing, for processing.
    Once the order is closed, any remaining commitment is credited to the original account. No delivery will be accepted against a cancelled order.
  • Delivery and Acceptance of goods and services
    For all North Ryde purchases, the University operates a central store for receipt of goods ordered. The Central Store is located at 299 Lane Cove Road, North Ryde.
    When goods are delivered to the Central Store, the Stores receiving staff print a Store Delivery Advice (SDA) from the order in Finance One. The SDA and the consignment are delivered to the Budget Unit. If the order is a blanket order, a copy of the supplier's delivery docket is sent with the SDA. This SDA form provides details of all items delivered. A Budget Unit officer must sign for receipt of the goods at the Budget Unit.
    A copy of the SDA is left with the officer concerned and the original is to be returned to the Business Services Section with the delivery driver.
  • Petrol Cards
    Business Services is responsible for the issue of Petrol Credit Cards to Budget Units and University staff members. Petrol cards are for use with University-owned vehicles or vehicles hired or leased by the University for official business.

Procedure Information

Contact OfficerPurchasing and Asset Manager, Office of Financial Services
Date Approved18 October 2013
Approval AuthorityChief Financial Officer
Date of Commencement1 November 2013
Amendment HistoryJune 2014 – Financial Delegations of Authority Schedule replaced by Delegations of Authority Policy and Wiki
February 2014 – added Procurement Handbook
Date for Next ReviewOctober 2016
Related DocumentsCredit Card Policy
Contract Management Policy
Delegations of Authority Policy / Wiki
Entertainment Policy
Financial Delegations of Authority (Administrative Functions) Policy
Petty Cash Procedure
Procurement Handbook
Purchasing Checklist Appendix A
Purchasing Terms & Conditions Appendix B
Travel Policy
KeywordsGoods, services, purchasing, procurement, purchase orders, blanket orders, petrol cards
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