Purchasing Thresholds, Delegations and Small Purchases

Procedure 1221-PR1

Purpose & Scope

Purpose

To implement Policy 1221 and outline procedures for delegated purchase authority to all Organizational Units to make small purchases up to the Standard Competitive Bid Threshold. Certain Organizational Units have broader procurement authority as delegated by this procedure. Delegated purchase authority includes conformance with the State of Utah Procurement Code and is subject to penalties contained therein.

Scope

This procedure is binding for all University colleges, departments, and units.

Definitions

The definitions provided in 1221.6 apply for this procedure. In addition, the terms below apply for the limited purpose of this procedure.

“Small Purchase” means a purchase with a cost that is less than the Standard Competitive Bid Threshold.

Rules & Procedures

Procurement Thresholds

  1. Standard Competitive Bid Threshold: $10,000
  2. Formal Purchase Threshold: $100,000
  3. Consulting and Professional Services Threshold: $100,000
  4. The director of purchasing and/or the VP for Finance and Administrative Services may establish an Annual Cumulative Threshold through a memorandum of understanding.

Standard Competitive Purchases, Consulting and Professional Services Thresholds

  1. Small purchases up to the Standard Competitive Bid Threshold shall be made in accordance with procedures established by Purchasing and Contract Services. The procurement method for small purchases is utilizing a P-card. If you cannot make the small purchase on your p-card, you must create a non-catalog requisition in EZ-Buy and obtain prior and proper approvals.
  2. Organizational Units may make small purchases totaling up to the Standard Competitive Bid Threshold by selecting the best source. For these purchases, Organizational Units are not required but are encouraged to obtain and retain competitive quotes.
  3. Organizational Units may also make purchases up to the Consulting and Professional Services Threshold by selecting the best source, completing a Consulting and Professional Services Confirmation Form and submitting a purchasing requisition through EZ-Buy. For these purchases, Organizational Units are not required but are encouraged to obtain and retain competitive quotes based on the scope of work. This threshold may be applied when the contract for services is below the threshold or the fee otherwise expected to be charged for the scope of services is below the threshold.
  4. It is not permissible to engage in unlawful splitting of any procurement in an attempt to stay under any threshold. (63G-6a-506.8)
  5. Organizational Units are responsible for the availability of funds prior to initiating a small purchase.
  6. When making a purchase through EZ-Buy, a requisition should be created, obtain proper approvals and a PO generated prior to making the purchase.
    1. Using the After the Fact form for purchases is only permitted for emergency purchases (Policy 1221.2.4.5). All other purchases using the After the Fact are considered “unauthorized purchases”.
  7. Delegated purchasing authority includes compliance with recommendations established by a grant or subcontract which may include encouragement of purchases from small, minority, veteran, and woman-owned businesses.
  8. The director of purchasing may modify or revoke a Procurement Threshold for an individual or University Organizational Unit.

Restrictions on Delegated Purchase Authority

  1. Dividing or splitting of a procurement: It is a violation of Utah law and University policy and procedures for a person to intentionally or knowingly divide a procurement into smaller procurements with the intent to make a procurement qualify under any established threshold. Order splitting or dividing of a procurement is subject to Utah Procurement Code, Unlawful Conduct and Penalties.
  2. Sales tax shall not be paid on small purchases as the University is tax exempt, except for on small purchases from a non-reciprocating out-of-state supplier. Organizational Units shall provide a copy of the Utah State sales tax exempt form to Suppliers that require it. (See tax exempt certificate options available from the Controller's Office.)

Purchasing Card (PCard) Usage

  1. Authorized individuals within Organizational Units may make direct purchases of Supplies and Services up to the card holders single transaction limit by utilizing a P-Card, except as restricted by University policy and procedures.
  2. P-Cards are generally issued to a named individual within an Organizational Unit.
  3. Authorization to use a P-Card requires individuals to apply for a card and requires adherence to terms and conditions of the University P-Card agreement issued by the P-Card administrator.
  4. P-Card procedures are established and administered by the P-Card administrator.
  5. The P-Card administrator is responsible to issue, approve credit limits, suspend, or cancel P-Cards. P-Card credit limits are requested by Organization Units but may not exceed the Standard Competitive Bid Threshold.
  6. For detailed instructions, cardholder responsibilities, and full program requirements, please refer to the P-Card procedures provided by the Controller’s Office. 

Reimbursement

The university discourages the use of reimbursements for the purchase of goods and services. Reimbursements to individuals for the purchase of goods and services are subject to 1221-PR5 and any associated University policy and procedures.

Multiple Payment Purchase Orders

  1. Multiple Payment Purchase Orders must have initially gone through a standard procurement process to obtain a contract.
  2. The valid contract must be attached to the Multiple Payment Purchase Order as supporting documentation.  
  3. Multiple Payment Purchase Orders exceeding the Standard Competitive Bid Threshold without a contract are prohibited except as approved by Purchasing and Contract Services.
    1. Exceptions that would not require a contract would be for services such as utilities.

Exceptions: Procurement Authority of Organizational Units

  1. By virtue of their special needs and the roles they fill at the University, some Organizational Units may be authorized by the director of purchasing, VP for Finance and Administrative Services or by state statute, to solicit bids and may be delegated procurement authority at a higher spend level than normally authorized, compliant with university policies and procedures, the Utah Procurement Code, and written rules adopted by the Organizational Unit.  Also included are procurements of construction and architect/engineer services by USU Facilities following procurement rules adopted by the state Division of Facilities Construction and Management and using the procedures allowed in Procedure 1221-PR2.
  2. Additional Organizational Units that have delegated purchase authority are identified below and may enter into a written memorandum of understanding with the director of purchasing. Other Organizational Units may be extended similar limited procurement exceptions as described in writing at the discretion of the director of purchasing.
    1. USU Facilities
    2. Campus Store (resale items only)
    3. USU Housing (per MOU with PCS and USU Facilities)

Office of General Counsel Small Purchases and Emergency Procurement

  1. The Office of General Counsel shall have authority to conduct procurements for the hiring of outside counsel, expert witnesses and litigation support services in accordance with Procedure 1221-PR4.
  2. If an emergency condition exists necessitating the need for immediate hiring of outside counsel, expert witnesses or litigation support Services, the general counsel shall make a written determination of the existence of the emergency and a written statement of justification for choosing a specific supplier.

Policies, Procedures, Guidelines, Forms, and other Related Resources

Policies and Procedures

Forms

Contacts

The designated contact official for this regulation is the Director of Procurement.

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