university sealEditor's notes:

POLICY TITLE: Carnegie Mellon University Purchasing Policy

DATE OF ISSUANCE: This policy was approved by the President's Council on February 15, 2002.

ACCOUNTABLE DEPARTMENT/UNIT:  Procurement Services. Questions on policy content should be directed to the Director of Procurement Services, ext. 8-4309.

RELATED POLICIES AND DOCUMENTS:
Policy on Conflict of Interest/Commitment 
Policy on Authorized Signatures for Agreements, Contracts, Licenses

Policy on Responsibilities for Managing Carnegie Mellon Financial Assets Policy Statement 

Business and Travel Expense Policy 
Procurement Manual 

FORMS: The forms mentioned in this policy are available online in Microsoft Word/Excel or Portable Document Format. To view them in PDF format, you may need to download Adobe Acrobat.


Carnegie Mellon University Purchasing Policy

The Carnegie Mellon Purchasing Policy comprises four component parts as detailed below: (1) Purchasing, (2) Competition, (3) Conflict of Interest & Buying Ethics, and (4) Small Business Utilization (Disadvantaged, Women-Owned, Veteran-Owned, Service Disabled Veteran-owned and HUBZone Business Enterprises).

Introduction

(1) Purchasing

At Carnegie Mellon, most purchasing actions are conducted by academic and administrative departmental employees rather than a central purchasing authority. Purchasing activities include obligations for ethical behavior, compliance with government regulations, proper transaction documentation and fiscal responsibility. Procurement Services (PS) are intended to help departmental Buyers (those who have access to the tools for making commitments and payments, i.e., Oracle Purchase Orders and Tartan Trust Cards), and departmental Users (those who have influence into the acquisition decision-making process), fulfill these obligations, as well as to ensure consistent purchasing practices across the university.

Policy Statement

Purchasing

The goal of purchasing policies and procedures is to provide reasonably priced, high-quality goods and services to end users, while preserving organizational, and financial and civic accountability.

o    Buyers and Users should familiarize themselves with Carnegie Mellon policies and procedures relevant to their purchasing activities. At the end of this document, there is a list of related policies and procedures that can be accessed online. A Purchasing Manual that explains procedures in detail also can be accessed online.

o    Buyers must complete training and sign all applicable forms, statements and certifications (including, but not limited to, a Cardholder Agreement, Buyers’ Code of Ethics, Anti-Kickback Clause, Purchasing Using Federal Funds Training Certification, and a Conflict of Interest Disclosure Statement before making any purchases.

o    PS has developed a Preferred Supplier Program whereby all applicable pricing and supporting documentation has been pre-negotiated. For Purchases under $100,000 (under $50,000 for FMS contracts within a project) Preferred Suppliers can be used with any type of funds, without doing supporting documentation. Buyers are encouraged to purchase goods and services from Preferred Suppliers. The Preferred Supplier Directory can be found on the PS website. The use of non-Preferred Suppliers is allowed, but requires individual Buyers and Users to provide accurate, adequate and complete supporting documentation for any transaction equal to or exceeding the Competitive Threshold ($5,000 as of 1/1/04; $2,500 for federally funded transactions; and $2,000 for federally funded facilities-related transactions) (ref: Purchasing Checklist/Bid Summary Form). Other than good business judgment, there are no constraints when using non-Preferred Suppliers for purchases that total below the Competitive Threshold.

o    Buyers should use the purchasing tool (for example, Tartan Trust Card, Oracle Purchase Order or Web-based ordering) that is required or most appropriate for the purchase.

o    Buyers and Users should utilize suppliers and service providers that make use, to a practicable extent, of materials and services that support the Carnegie Mellon environmental mission and goals of reducing, reusing and recycling. Information regarding the university's Green Practices can be obtained by contacting the Green Practices Environmental Coordinator at 268-7858, or by referencing the Environmental Practices Committee's web site.

Buyer’s Responsibilities

Purchasing

o    Buyers are encouraged to purchase goods and services from Preferred Suppliers. The use of non-Preferred Suppliers for expenditures above the Competitive Threshold must be documented in accordance with Carnegie Mellon requirements and government regulations (ref: Buyer Actions Matrix and Purchasing Checklist.)

o    Choose the appropriate purchasing tool (Tartan Trust Card, Oracle Purchase Order, Web-based ordering, etc.) for the transaction.

o    Reconcile Tartan Trust Card transactions monthly, as needed.

o    Re-allocate Tartan Trust Card expenses, as appropriate and necessary.

o    Maintain security of purchasing cards and related card numbers and expiration dates, including immediately reporting a lost or stolen card.

Department & User Responsibilities

Purchasing

o    Identify departmental buyers for Tartan Trust Cards, Oracle Purchase Orders and Web-based ordering.

o    Provide transaction-supporting documentation in accordance with Carnegie Mellon requirements and government regulations (ref: Buyer Actions Matrix).

o    Make sure departmental buyers have received appropriate training before they begin making purchases.

o    Notify the Carnegie Mellon University Card Manager when a Tartan Trust Cardholder terminates employment with Carnegie Mellon or transfers to another department, and retrieve the card prior to the employee’s exit.

PS’s Responsibilities

Purchasing

o    Provide appropriate training and documentation.

o    Provide a Purchasing Manual that describes policies and procedures in detail, including guidelines for using purchasing tools and for committing Carnegie Mellon and government funds.

o    Establish and maintain a Preferred Supplier Program that identifies qualified suppliers, provides a competitive atmosphere, analyzes bids and proposals, and documents Preferred Supplier agreements, including terms and conditions, discount pricing, product or service quality, delivery performance, and government certifications.

o    Regularly reevaluate Preferred Suppliers for performance, price adherence and customer satisfaction.

o    Maintain financial relationship with bank/card provider.

o    Provide purchasing tools for committing and forms for documenting purchasing transactions.

o    Audit selected Tartan Trust Card transactions.

o    Offer assistance in the proper finalization of any purchase.

o    Resolve supplier - customer problems and disputes.

o    Approve federally funded transactions equal to or exceeding $10,000 with non-Preferred Suppliers prior to commitment to the supplier.

o    Affix an authorized Carnegie Mellon signature on contracts, agreements, licenses and/or leases after all appropriate approvals.

Introduction

(2) Competition

Carnegie Mellon is required under the Office of Management and Budget's Circular A-110 "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations" and by Federal Acquisition Regulations (FARs) to establish a competitive environment for the purchase of goods and services. The use of competitive bidding also makes good business sense. Procurement Services (PS) policies and procedures on competitive bidding ensure that Buyers in Carnegie Mellon’s decentralized purchasing environment process transactions in a uniform manner consistent with federal requirements and good business practice.

Policy Statement

Competition

Carnegie Mellon makes every effort to maximize competitive procurement opportunities by soliciting competitive bids and proposals for goods and services prior to issuing or awarding credit card commitments, purchase orders, web-based orders or contractual documents.

o    PS sets the Competitive Threshold for Carnegie Mellon ($5,000 as of 1/1/04; $2,500 for federally funded transactions). Buyers and Users are required (where competitive vendors can be identified) to solicit competitive bids and proposals at and above the Competitive Threshold, and to make the purchase from the lowest, evaluated responsible supplier. All non-competitive acquisitions at or above the Competitive Threshold must be adequately and appropriately justified and documented. Supplier bids, quotations and proposal information are generally considered confidential and should not be disclosed or discussed with other suppliers.

o    Suppliers listed in the Preferred Supplier Directory have already undergone the competitive bidding and supporting documentation process. For purchases under $100,000 (under $50,000 for FMS contracts within projects), no further bidding or documentation action need be taken by Buyers or Users purchasing goods and/or services from Preferred Suppliers. Buyers and Users are encouraged to use Preferred Suppliers whenever possible.

o    Decisions on purchases should be based on the supplier’s compliance with Carnegie Mellon specifications, terms and conditions, price, delivery and capacity to perform. Carnegie Mellon business should be awarded in the best interest of Carnegie Mellon based on the merits of the competition. Unsolicited proposals may be considered as long as they are in the best interest of Carnegie Mellon.

o    Carnegie Mellon does not engage in or submit to the practice of reciprocity in any purchase transaction.

Buyer’s Responsibilities

Competition

o    Buyers are encouraged to purchase goods and services from Preferred Suppliers. The use of non-Preferred Suppliers for expenditures above the Competitive Threshold must be documented in accordance with Carnegie Mellon requirements and government regulations (ref:Buyer

 Actions Matrix

 and Purchasing Checklist).

o    Compete transactions to the maximum extent practicable.

o    Choose the appropriate purchasing tool (Tartan Trust Card, Oracle Purchase Order, Web-based ordering, etc.) for the transaction.

o    Reconcile Tartan Trust Card transactions monthly, as needed.

o    Re-allocate Tartan Trust Card expenses, as appropriate and necessary.

Department & User’s Responsibilities

Competition

o    Identify departmental Buyers for Tartan Trust Cards, Oracle Purchase Orders, Web-based ordering and other purchasing activities.

o    Provide supporting documentation in accordance with Carnegie Mellon requirements and government regulations whenever non-Preferred Suppliers are used for purchases at or above the Competitive Threshold (ref: Buyer Actions Matrix).

o    Make sure departmental Buyers have received appropriate training before they begin making purchase commitments.

o    Make sure departmental Buyers and Users comply with Carnegie Mellon’s purchasing policy on competition.

PS’s Responsibilities

Competition

o    Provide appropriate training and documentation.

o    Provide a Purchasing Manual that describes policies and procedures in detail, including guidelines for competitive bidding.

o    Establish and maintain a Preferred Supplier Program that identifies qualified suppliers, provides a competitive atmosphere, analyzes bids and proposals, and documents Preferred Supplier agreements, including terms and conditions, discount pricing, product or service quality, delivery performance and government certifications.

o    Regularly reevaluate Preferred Suppliers for performance, price adherence and customer satisfaction

o    Audit selected transactions for competitive bidding compliance and documentation.

o    Offer assistance in the proper finalization of any purchase.

o    Resolve supplier - customer problems and disputes related to competitive bidding.

 

Introduction

(3) Conflict of Interest &

Buying Ethics

Faculty, staff, and students who have purchasing or purchase approval authority (collectively "Buyers and Users") must be aware of the standards of ethical behavior that apply to their purchasing activities. They must avoid unethical conduct and conflicts of interest in purchasing goods and services. Federal regulations require Carnegie Mellon to have explicit procedures for addressing incidents in which there are allegations of improprieties or conflicts of interest in purchasing. This purchasing policy works in tandem with the university-wide Policy on Conflict of Interest/Commitment.

 

Policy Statement

Conflict of Interest &

Buying Ethics

Conflicts of interest occur when Buyers and Users are in a position to make or influence a procurement decision from which they might directly or indirectly receive financial benefit or which might give improper advantage to their associates. Buyers and/or Users should not maintain relationships with firms or individuals if there is a chance that these relationships might influence their buying decisions on behalf of Carnegie Mellon.

o    Buyers must annually complete a PS Conflict of Interest Disclosure Form describing the existence and nature of any such conflict. Forms are to be submitted to PS.

o    Buyers and Users must inform their supervisors if they know or suspect that: a supplier is a Carnegie Mellon employee, a Carnegie Mellon employee has a substantial ownership interest in a supplier’s firm, or a Carnegie Mellon employee will receive financial benefit from a purchase.

o    Purchases from Carnegie Mellon employees and purchases over $1,000 (threshold as of 10/04/01) from firms in which Carnegie Mellon employees have a substantial ownership interest must be reviewed and approved by the Director of Procurement Services (PS).

Conflicts of Interest
Identification & Resolution
Procedures

Conflict of Interest &

Buying Ethics

o    Buyers and Users should use good judgment, professional commitment and ethics to protect themselves and Carnegie Mellon from potential conflicts. Administrators and supervisors should make Buyers and Users aware of relevant policies and create, by example, an atmosphere consistent with them.

o    Buyers and Users in a position to influence a Carnegie Mellon acquisition decision for which they might receive material benefit should disclose the nature of the conflict to others involved in the decision. Whenever possible, those with potential conflicts should remove themselves from involvement in the decision. If the individual continues to participate in the decision process, discussion with supervisors and documentation of the potential conflict should be presented to the appropriate dean, director or department head and to the Director, PS.

o    The first and most important line of defense against conflicts of interest must be Carnegie Mellon Buyers and Users themselves. Buyers must fill out a PS Conflict of Interest Disclosure Form annually. In addition, Buyers and Users are strongly encouraged to disclose, to the appropriate dean, director or department head, their outside activities on a regular basis (e.g., during annual departmental reviews, evaluations, or whenever those activities undergo significant change). In the event that potential conflicts cannot be resolved at this level, they should be referred to the Director of PS who will then forward a recommendation to the department for final resolution.

Some funding agencies of the federal government require grantees to conform with other disclosure and conflict of interest resolution procedures. The Office of Sponsored Research has information about these agencies and their specific requirements.

Code of Ethics

Conflict of Interest &

Buying Ethics

 

Carnegie Mellon subscribes to the intent of the National Association of Educational Buyers’ (NAEB) Code of Ethics. Carnegie Mellon’s Code states that Buyers will:

o    Give first consideration to the objectives and policies of their institution.

o    Strive to obtain the maximum value for each dollar of expenditure.

o    Decline personal gifts or gratuities in accordance with Policy.

o    Grant competitive suppliers equal consideration insofar as state or federal statute and institutional policy permit.

o    Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.

o    Demand honesty in sales representation, whether offered through the medium of a verbal or written statement, an advertisement, or a sample of the product.

o    Receive consent of originator of proprietary ideas and designs before using them for competitive purchasing purposes.

o    Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a supplier; and/or be willing to submit any major controversies to arbitration or other third party review, insofar as the established policies of my institution permit.

o    Accord a prompt and courteous reception insofar as conditions permit to all who call on legitimate business activities.

o    Cooperate with trade, industrial and professional associations, and with governmental and private agencies for the purposes of promoting and developing sound business methods.

o    Foster fair, ethical and legal trade practices.

o    Work on behalf of the interests of the University solely, and avoid situations that may result in personal benefit or gain to the buy.

 

Gift Guidelines

Conflict of Interest &

Buying Ethics

It is essential to Carnegie Mellon and its subsidiaries, its suppliers, contractors and consultants that all decisions and actions regarding acquisitions are based upon proper business considerations and are not influenced in any way by personal obligations or opinions.

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Therefore, individuals with expenditure authority on behalf of the Carnegie Mellon must avoid any behavior that involves a real conflict of interest or any appearance, however remote, of using affiliation with Carnegie Mellon as a means of furthering personal interests or showing favoritism to any individual, or current or potential supplier.

Requesting or accepting any favor or special consideration from any individual or organization doing or seeking to do business with Carnegie Mellon that may result in any direct or indirect financial gain by an employee (or a member of his/her family) with the capability of influencing a source selection process involving that individual or organization, is not allowed.

No one with the capability of influencing the selection of an individual or organization doing or seeking to do business with Carnegie Mellon should accept entertainment, gifts, or favors with a value in excess of $75.00 (threshold as of 10/04/01) without first obtaining the written approval of their immediate supervisor or higher level management. (Professional samples, i.e., textbooks for review provided by publishers, are not considered gifts or gratuities.) No employee should accept any gifts or gratuities that are provided by persons with whom Carnegie Mellon has business dealings under circumstances that suggest the donor intends to influence the judgment or conduct of the employee, or Carnegie Mellon’s business decisions.

Courtesy gifts, such as flowers, standard event tickets and business meals, as well as unsolicited advertising or promotional materials (pencils, calendars, etc.) that are valued at less than $75.00 in the aggregate may be accepted. Gifts in excess of $75.00 (threshold as of 10/04/01) are generally not permitted (exceptions may be golf tournament outings, non-standard event tickets, computer software, etc.). Exceptions must be reported to at least the next level of supervision, in writing (i.e., e-mail or memorandum).

If any employee with the capability of influencing the selection of an individual or organization doing or seeking to do business with Carnegie Mellon receives a gift that is contrary to this policy, the employee's immediate supervisor should be notified and the gift returned to the sender with a letter stating that the receipt and acceptance of the gift(s) is contrary to Carnegie Mellon policy. Major exceptions to this policy should be reviewed by the Vice President for Administration and Chief Financial Officer or designee to determine if special circumstances exist to warrant the acceptance of a gift from either a supplier or vendor, or to determine whether a gift should be declined or returned.

Should a questionable situation arise, the employee shall consult his or her immediate supervisor or the Director of Procurement Services for guidance and disposition.

Anti-Kickback Clause

Conflict of Interest &

Buying Ethics

 

The Office of Naval Research (ONR), which is Carnegie Mellon’s cognizant agency, requires all Carnegie Mellon Buyers to read, understand and sign off on this clause, which is distributed annually to all Buyers:

Definition: "Kickback" as used in this clause means any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind which is provided, directly or indirectly, to any prime contractor (university and/or principal investigator), prime contractor employee, subcontractor, or subcontractor employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or in connection with a subcontract.

Clause: The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) prohibits any person from: providing or attempting to provide or offering to provide any kickback; soliciting, accepting or attempting to accept any kickback; or including, directly or indirectly, the amount of any kickback in the contract price. The Act imposes criminal and civil penalties on any person who knowingly and willfully engages in the prohibited conduct addressed in the Act [ FAR 3.502-2 (b) and (c)].

Documentation

Conflict of Interest &

Buying Ethics

Carnegie Mellon’s Conflict of Interest Disclosure Form, Buyers’ Code of Ethics, Gift Guidelines for Employees, and Anti-Kickback Clause are distributed annually to Carnegie Mellon Buyers. Buyers should make sure they read and understand these requirements, sign the forms, and return them to Procurement Services.

 

Introduction

(4) Small Business Utilization

Carnegie Mellon is committed to supporting small business enterprises, including disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUBZone business enterprises, in its purchasing programs. Small business enterprises are defined by the federal government in FAR 19.102. Categories of socially and economically disadvantaged small business enterprises are defined in FAR 19.001.

 

 

Policy Statement

Small Business Utilization

o    Carnegie Mellon has established a goal for small business enterprise participation of 15% of the dollar volume of Carnegie Mellon purchasing (excluding purchasing from sole source providers where there is no discretion in supplier selection, e.g., utilities). Within this overall goal, Carnegie Mellon has established goals for disadvantaged, women-owned, veteran-owned, service disable veteran-owned and HUBZone business enterprise participation of 5% of the dollar volume of Carnegie Mellon purchasing. Awards from federal government or other sponsoring agencies may mandate different participation goals. The Office of Sponsored Project Accounting tracks and reports individual award goal attainment and overall Carnegie Mellon goal attainment to the appropriate agencies.

o    Although individual purchases, projects or awards may not reach these goals, Carnegie Mellon’s intent is to work for the achievement of these goals over a fiscal year. Success depends on the active commitment of all Buyers and Users. Carnegie Mellon procurement activities should be as inclusive as possible to allow small, disadvantaged, women-owned, veteran-owned, service disable veteran-owned and HUBZone business enterprises the maximum practicable opportunity to participate in providing goods and services to Carnegie Mellon.

o    All contractors and suppliers doing business with Carnegie Mellon are expected to share these goals and participate in their achievement. Carnegie Mellon’s Equal Opportunity Services (EOS) will work with the Procurement Services and Buyers and Users to develop, implement and monitor the effectiveness of strategies to achieve these goals.

o    The degree of utilization of small, disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUBZone business enterprises should be considered along with other selection factors, such as cost, when choosing vendors. EOS and the Design & Construction Office will review construction proposals to verify that reasonable good faith efforts are being made to achieve participation goals in Carnegie Mellon’s capital programs. They may grant goal waivers, where appropriate.

o    In addition to meeting contractual obligations and federal, state and local requirements to include small business program suppliers in Carnegie Mellon’s bidding process, Carnegie Mellon is also committed to encouraging these suppliers to compete for business. To be sure that such suppliers are not overlooked, use the following guidelines or resources:

(1) Contact PS or the EOS for help identifying appropriate suppliers.

(2) Consider breaking an order into smaller installments to give smaller businesses an opportunity to supply items (but not as a way to avoid Competitive or Requirements Thresholds).

(3) Contact supplier representatives, PS, EOS, and Design & Construction when developing specifications.

Buyer’s Responsibilities

Small Business Utilization

o    Use best efforts to comply with policies on the utilization of small, disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUBZone businesses.

Department & User Responsibilities

Small Business Utilization

o    Make sure departmental Buyers have received appropriate small business utilization training before they begin making purchases.

o    Make sure departmental Buyers and Users use best efforts to comply with policies on the utilization of small, disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUBZone businesses.

PS’s Responsibilities

Small Business Utilization

o    Provide appropriate training and documentation on Carnegie Mellon and government small business programs.

o    Use best efforts to locate, solicit and contract small, disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUBZone businesses into the Preferred Supplier Program.

o    Provide information related to locating all categories of small businesses.

Contact

Questions about these policies should be directed to Procurement Services , 8-8430. Questions regarding the specific requirements of governmental grantors should be directed to the Office of Sponsored Research, 8-2091.


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