FAQ

Carnegie Mellon University's Procurement Services
Frequently Asked Questions

Purchasing Question on Contracts: When should I prepare a contract and who should sign it?

A contract should be prepared for services provided to the University, by an individual or a company, which are equal to or greater than $600 per calendar year. Additionally, if the services include intellectual property, copyrighted material, present a risk to the University or are of a complex nature, a contract should be prepared regardless of the contract value.

Begin by reviewing the contract templates available on the Procurement Services web site to determine which template best defines the services to be procured. Please carefully read and edit the Procurement Services templates to record the details of the required service and to identify the parties involved in the agreement. Do not alter any of the terms and conditions without consulting either PS or legal counsel.

The department representative should provide two edited original agreements to your service provider with the required supplier forms which need to be executed in one package. If no alterations are being requested by the service provider, and he/she has signed the agreement, please forward both originals to Procurement Services for final University Authorized Signature (Director and Associate Director are authorized signatories for the University) with the executed supplier forms. Please refer to the “Guide to Supplier Forms" for guidance on the required forms.

Procurement Services will retain and keep on file one original and return the second original to the department representative’s attention after the supplier has been entered into the Oracle supplier database. The return of the executed agreement should alert the department that the purchase order (PO) for the services can now be created. The department representative should make one copy to retain for the department’s records. The second original should be forwarded to the supplier for their records.

The department should send the invoices for the services to Accounts Payable referencing the applicable purchase order when services have been completed.

Purchasing Question on Insurance: What do I do when my supplier doesn’t have the insurance requested in the Professional Services Agreement?

You will need to direct your insurance questions to Brian Cappo, our Director of Risk Management. However, we would suggest you begin by asking your contractor to provide you with evidence of any insurance coverage they may have in place before discussing your concerns with Brian. In the event that you feel compelled to ask Brian to waive the insurance requirement, please be aware that he requires the following information from you and your contractor:

1. Type of Contract; Description of contractor’s activities;

2. Will contractor be on campus meeting with faculty, staff, and students or performing work duties?

3. Length of time contractor has been performing this type of work? How long have we been using this contractor? Loss/claim experience of contractor?

4. Professional Vitae of Contractor.

If the Director of Risk Management grants you a waiver, he then typically requests that the following language be included in the agreement:

Contractor understands and agrees, while performing work for the University, the University agrees to waive its standard insurance requirements for Contractor. As such, Contractor is advised that as a result of agreeing to waive the insurance requirements, the Contractor may be unable to adequately defend or reimburse the University for any claim(s) that may result from this Agreement.

Accordingly, Contractor is advised that the University's agreement to waive such insurance shall not and will not relieve the Contractor, or any of its Sub-Contractors, of any obligation or liability imposed or assumed under this Agreement, including specifically the obligations set forth in Indemnification language in the agreement, nor of any obligation or liability imposed by operation of law.

Purchasing Question on Purchase Orders: How do I create a draw-down purchase order?

A draw-down PO (some currently reference these as “blanket” POs, although they are not truly so) can be created by doing the following steps:
1. At the line level of a new PO, select the line type as “Service/Goods – Amount."
2. In the Unit of Measure field, you will see DOLLARS, which has defaulted there when you selected Service/Goods – Amount.
3. Place the dollar value of the total contract in the Quantity field.
4. Place the number 1 (which represents $1) in the Unit Price field.
5. Continue on with the PO as you normally would.
6. When finished, look at the total PO Amount field in the header to verify the total is equal to the total value of the contract for the complete time period/term of the agreement.
Note 1: If you are revising an existing PO to become a draw-down PO, you may have to create a new line item with the remaining balance of the total contract dollars and then cancel the original line item. This is because Oracle sometimes will not allow the buyer to change the line type within the existing line item (Services/Goods – Amount from an originally selected line type of Services/Goods – Quantity). If multiple Oracle strings are to be charged, then we suggest that you create one line item for each Oracle string.

Note 2: This methodology is acceptable within the current Oracle functionality. It will be tested within the new Oracle Globalization release to assure correct operation within each set of financial books (US, Qatar, Australia).

Creating a PO in this draw-down manner allows you to submit periodic invoices directly to Accounts Payable (with the PO number referenced on them) and they will be paid against the draw-down PO without creating a new separate PO, or a new line item to an existing PO. Additionally, because a new PO or line item to an existing PO has not been created for each new invoice, there are no recurring approvals required in Oracle. The invoice amount is drawn down from the total contract value of the one PO until there are no more dollars left on the order.

Purchasing Question: What is the difference between a draw-down purchase order and a blanket purchase order?

A blanket purchase order is for a specific item at a set unit price for a negotiated total quantity. A draw-down purchase order specifies the total amount that will be permitted to be paid under the purchase order number.

Procurement Question on Supplier: What does it take to make a supplier part of the Preferred Supplier Program?
A Preferred Supplier is one that has completed a formalized selection process operated by PS or FMS, and has been chosen by the University as a supplier who can provide products, materials and/or services that are in the best interests of the University as related to quality of products, materials and/or services; length of contract; advantageous pricing; payment methodologies; delivery practices/performance; supplier operational support and services; ethical business practices; and social and community support.

Procurement Services will conduct a formalized selection process based on purchasing trends and input from campus.

Requirements to be considered for identifying a Preferred Supplier:

1. Items can be identified and competed in a formalized selection process.

2. Firm pricing can be established during the term of the agreement.

3. Demand exists in multiple units across campus.

4. Commodity represents a significant purchasing volume to the University to warrant the commitment of time and attention of a campus team the formalized selection process. (Generally, we will not consider a commodity unless it reaches a value of $100K or greater.)

A Preferred Supplier will be required to sign an agreement or contract which identifies all the terms and conditions under which the agreement/contract will operate, including allowing the University to retain the right to bid on individual requirements of $50,000 or more. The period of performance for Preferred Supplier Agreements is typically three years with options for two one-year extensions.

Purchasing - Honorarium Question: What are the steps to create an honorarium ?

Honorarium must only be prepared to pay recipients a token of our appreciation for their services. This recipient must not be a Carnegie Mellon employee. The amount to be paid to the recipient must be an amount less then amount the recipient would receive in the open market for same services provided to the public.

Honorarium Steps:

Buyer determines payment option and whether the recipient is to be paid via check, electronic funds or wire.

(Note: I have written the letter assuming a check will be issued which is the most commonly used payment method. This of course will need to be changed if an alternate payment method is selected.)

Buyer obtains the honorarium letter with the applicable information form the Honorarium Template provided on the Procurement Services web site: http://www.cmu.edu/procurementservices/Forms/ContractsApplication/HonorariumLetter.doc

Buyer edits the honorarium letter and attaches the IRS W-9 Form for execution.*

*NOTE: when the honorarium recipient is a Non-Resident Alien , please substitute the following forms in place of the W-9:

Non-Resident Alien Performing Work Within US: Foreign National Information Form

Non-Resident Alien Performing Work Outside US: Foreign Source Income Form

Buyer provides the letter with the attachment to the honorarium recipient.

Buyer receives the signed letter back from the recipient.

Buyer verifies that the address on the honorarium is consistent on all the documents to be provided to Procurement Services.

Buyer forwards the honorarium letter and attachment to Procurement Services.

Procurement Services will work with Payroll to enter the supplier into Oracle supplier base.

When the supplier has been entered into Oracle’s supplier database, Procurement will sign and return letter to Buyer.

Buyer will by receipt of the letter be informed that the supplier is in Oracle’s supplier database and can now create a purchase order.

Buyer will then write the purchase order number on the honorarium letter and forward same letter to accounts payable as the invoice to initiate payment.

Purchasing Questions on Supplier Forms: When I submit my Supplier Information forms, what is the turn-around time?

Typically, PS should be able to process all of the information within 1-2 business days as long as it has received the proper information and paperwork. In many cases, if PS has all of the information and is not experiencing an unusually large volume of input, it can get them entered within the same day. Contact Procurement Services directly if you have an emergency.

Where can I find the right Supplier forms?

The supplier forms are behind the CMU WebISO system to ensure that a University buyer is looking to obtain products/services from the vendor. This prevents unauthorized solicitation from vendors who currently have no contact with the University. Unsolicited supplier submittals can slow down supplier entry.

Who do I contact to confirm if my vendor/supplier is set in the system?

We typically contact the buyer directly if they have submitted the proper paperwork. If anything is missing, they will also be contacted. If you wish to inquire about a particular supplier, you can contact Adam Rauf at 412-268-8442 or arauf@andrew.cmu.edu

What is a NAICS code?

For ALL cases, except for honorariums and foreign nationals, our forms require that the supplier enter the North American Industry Classification System (NAICS) code that their business/service falls under. This applies for all business in the USA, Mexico, and Canada. You can find out what NAICS code a business falls under by going to http://www.census.gov/epcd/www/naics.html and searching for the service/products being provided. If a business/service falls under many classifications, choose the one that the business/service spends the majority of its time doing, or the one closest to what kind of products/services being provided to the University.

How do I find out what non-supplier forms I need to submit?

You can access the Buyer Actions Matrix in our Forms section under Standard Forms. This will tell you what forms you need based on the amount being spent, whether or not federal dollars are being used, or if any additional forms or paperwork are required.

Purchasing Question on Local & Out-of-State Hotels. Who should I contact regarding Hotels and Lodging?

Gloria Claus is Administrative Coordinator for Procurement Services. She handles all supplier information and agreements for hotel and lodging arrangements. Gloria can be reached at 412-268-8430 or gc2v@andrew.cmu.edu

Purchasing Question on Transportation: Who should I contact regarding questions about Transportation Services (buses, limousines, vans, etc.)?

Beth Borrasso is Commodity Manager for Procurement Services. She handles the contracts and agreements for all transportation needs. Beth can be reached at 412-268-3617 or borrasso@andrew.cmu.edu

Who should I contact regarding leasing or renting of real property?

Russ O’Lare is the Director of University Planning. He can be reached at 412-268-1001 or rdo@andrew.cmu.edu

Who should I contact about all trademark/licensing needs?

Jay Marano is Licensing Coordinator at the University. He can be reached at 412-268-3904 or Marano@andrew.cmu.edu

This is my first time doing a Contract/Professional Service Agreement (PSA), who can I contact for help with this?

You can refer to any of the documentation we have online, but if you still have questions, you can contact Jean Smarto at jsmarto@andrew.cmu.edu or 412-268-4924.

How do I go about “re-activating” a supplier?

If a supplier has been rendered “inactive” due to no recent purchase orders and you are conducting business with them again, they will need to resubmit the required forms as indicated. Typically for companies, this includes the Supplier Forms and W-9. For individuals, it would be the Supplier Forms, W-9, and Independent Contractor Checklist (ICC).

What should I do if the company/contractor changes their address?

We will need for the supplier to submit a new copy of the supplier information forms and a new W-9 with the updated information.

If their EIN number has changed due to acquisition or restructuring, they will need to go through the same process as the “re-activation” procedure described above by submitting new forms.

Who should I contact for tax exemption forms?

Please contact Angela Pecora, our tax manager at 412-268-9939 or ampecora@cmu.edu

How do I request assistance with an Oracle Issue by phone?
One way to request assistance with an Oracle Issue is to call the Financial Systems Help Desk's main number 8-4666.

If a supplier asks for the price from a competing bidder, what should I do?
The University strives to be fair to all suppliers with whom it does business. All pricing and other information furnished by our suppliers must be kept confidential per university policy. Should you have questions when working with a supplier, do not hesitate to call Procurement Services for assistance.

How do I know when a purchase will require preparation of a purchasing checklist?
The Buyer Actions Matrix, which can be found in our Standard Forms section, was designed to guide the buyer in determining what steps and documentation is required to support each purchase regardless of dollar amount, the source of the funding, or the proposed supplier/vendor.

The Purchasing Checklist and Bid Summary Form, which can be found in our Standard Forms section, is designed to be a simple to understand and use form. Procurement Services has developed a training class, "How to Use the Buyer Actions Matrix and Prepare Purchasing Checklist and Bid Summary Form." See our Training and Certification section for an updated schedule. You can refer to any of the documentation we have online on Purchasing Checklists and Bid Summary Form completion, but if you still have questions, you can contact Walter Werner at wwerner@andrew.cmu.edu or 412-268-3405.

What if my question is not answered on this list?
You can also call or email Procurement Services for immediate assistance at 412-268-8430 or procurement-inbox@andrew.cmu.edu