UCR

UCR Policies and Procedures

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Campus Policy Number: 750-72
Policy Topic: Campus Purchasing - Purpose, Function, & Organization
Policy Owner: Campus Purchasing
Effective Date: 04/22/2011
 
 
A.      PURPOSE
 
The primary mission of Campus Purchasing is to provide procurement services to the campus in support of the University's role in research, education and public service. Campus Purchasing implements and administers University policy, as specified in the Business and Finance Bulletins, in a manner which is consistent with need and which addresses the following:
 
1.       Cost Effectiveness. Cost effectiveness is accomplished through programs dealing with standardization, value, cost and price analysis, utilization of items excess to others, maximization of the economics of quantity buying through the use of Universitywide, Campuswide and regional pool-purchases, commodity agreements and price schedules (i.e., Strategic Sourcing Program), as well as simplification of the procurement process itself. The primary emphasis is to encourage receipt of the most favorable prices, terms and conditions of purchase which result in the greatest value to the University at the lowest overall cost, consistent with need.
 
2.       Positive Vendor Relationships and Affirmative Action in Business Contracting. Campus Purchasing is committed to the development and maintenance of a large vendor base and strong vendor relations. Campus Purchasing actively seeks-out and is strongly committed to the continued development and utilization of small business enterprises (SBE), disadvantaged business enterprises (DBE), woman-owned business enterprises (WBE) and veteran-owned business enterprises (VOBE). Campus Purchasing undertakes all reasonable and appropriate actions to promote such businesses and ensure they are given every opportunity to compete for and receive University business.
 
3.       Mediate on behalf of customers, campus and vendors. Campus Purchasing acts as the primary interface between vendors and campus customers. Although Purchasing’s primary role is to represent the campus’ best interests, it is also Purchasing’s responsibility to help ensure campus demands of its vendors are reasonable. Campus Purchasing promotes positive vendor relationships through adjudication or mediation of disagreements between vendors and campus customers when appropriate.
 
4.       Professional Conduct. Campus Purchasing conducts all activities in a fair, ethical, legal and professional manner, consistent with the Principles and Standards of Purchasing Practice of the Institute for Supply Management (formerly National Association of Purchasing Management) and the Code of Ethics of the National Association of Educational Procurement (formerly National Association of Educational Buyers).
 
5.       Protection of University Interests. Campus Purchasing helps ensure that all purchase transactions are conducted in accordance with current Universitywide policies and procedures, State and Federal laws and regulations as well as any special requirements of extramural sponsors (with the assistance of the campus Office of Research). Campus Purchasing further protects University interests through the development of purchase transactions which include terms and conditions which benefit and protect the University in the event of product or vendor failure to properly perform. All purchase transactions are documented to indicate that the requirements for competition have been met; negotiations, if any, have been conducted in accordance with prescribed guidelines; prices to be paid are reasonable; and all necessary approvals have been obtained.
 
6.       Assistance and Information Provided in Support of Campus and Universitywide Activities. Campus Purchasing provides procurement related research activities for the benefit of campus departments and Universitywide administration. These activities include locating sources for needed materials and services, providing literature and/or price estimates for budgetary purposes, providing information for user's consideration and counseling users in regard to purchasing requirements and procedures. It is Campus Purchasing’s goal to ensure campus customers make fully informed procurement decisions.
 
 
B.       FUNCTION
 
The specific responsibilities and efforts of Campus Purchasing are presented below:
 
1.       Reasonable Price Determination
 
Campus Purchasing is required to certify that the prices to be paid on all purchase transactions are reasonable. A "Reasonable Price" is a price that does not exceed that which would be incurred by a prudent person in the conduct of a competitive business. A reasonable price is established by market test, price or cost analysis, or through the experience and judgment of the Director of Materiel Management, or designee. Such judgment considers total value to the University. There is value to the University in purchases which meet the University's needs, such as those involving quality, quantity, delivery and service. A reasonable price need not be the lowest price available, but is one which offers the highest total value to the University.
 
a.        Transactions over $100,000 - A reasonable price is established through competition sufficient to ensure an adequate market test, or set by applicable law or regulation, or supported by an appropriate price or cost analysis.
 
b.       Transactions under $100,000 - A reasonable price is normally determined through analysis and the experience and judgment of the Director of Materiel Management, or designee, including the value-based criteria noted above.
 
Pricing techniques prescribed in Federal regulations are utilized selectively in price or cost analysis (including where appropriate, an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement), recognizing their fundamental soundness but taking into consideration the different character and scale of purchases for which these regulations have been developed. Literal compliance is necessary only for purchases under specific Federal contracts and grants which require such action.
 
2.       Pricing and Product Information
 
Campus Purchasing maintains pricing and product information as well as market trends and potential supply sources for many commodities. This information is available for use by all campus departments.
 
3.       Product Differentiation
 
Sales representatives often present their product in comparison to products available from other vendors/manufacturers, attempting to convince potential customers that the functions or specifications of their own product are a necessity. If vendors are successful, competition is essentially negated and the price paid by the University may be greater than that which could have been obtained through normal competitive methods. Therefore, though a particular product may be the most desirable for a user's applications, it is imperative that the user does not indicate to the vendor that their product is the only one suitable. When this situation arises, please contact the appropriate Buyer in Campus Purchasing for advice and/or assistance.
 
4.       Communication with Departments
 
Development and maintenance of two-way communication with campus departments is essential for effectively meeting the needs of the University. Communications include price and product information, development of product specifications, development of procurement strategies, discussions of policy and procedures, and the legal ramifications of any proposed purchase action.
 
5.       Standardization
 
Campus Purchasing ensures that the standards which have been developed for certain commodities are not circumvented. Such standards have been established to ensure safety and provide the greatest value to the University.
 
6.       Cost Savings
 
Campus Purchasing is charged with achieving cost savings. "Cost savings" is defined as the difference between the current price paid and a price previously paid by the University for the same item(s). Cost savings are obtained through professional buyer actions utilizing a variety of techniques. Savings accomplished through vendor price reductions generally available to the marketplace (such as list price reductions) are not considered or recorded as cost savings accomplishments.
 
7.       Cost Avoidances
 
Campus Purchasing is charged with achieving cost avoidances. "Cost avoidance" is defined as the economic benefit resulting from positive action of Campus Purchasing’s buyers which enables the requisitioning department to avoid a cost that would have otherwise been incurred. Cost avoidances also include obtaining greater values at no additional cost to the requisitioning department (e.g., obtaining additional materials or services for no additional cost) as well as negotiated discounts resulting in lower costs.
 
8.       Business Affirmative Action
 
Campus Purchasing actively seeks-out and is strongly committed to the continued development and utilization of small business enterprises (SBE). Campus Purchasing undertakes all reasonable and appropriate actions to promote utilization of such businesses and ensure they are given every opportunity to compete for and receive University business.
 
It is the policy of the University of California, Riverside, as required by the funding source and consistent with State and Federal law, to take affirmative action to optimize opportunities for business contracting with small business enterprises, particularly small disadvantaged, woman-owned, and disabled veteran-owned business enterprises in providing goods and services to the University, and to ensure the placement of a fair proportion of business contracts with such enterprises as required by the funding source.
 
Campus Purchasing utilizes a number of techniques to accomplish this task, including; outreach, vendor development, vendor education, trial orders, splitting large orders into smaller orders to permit participation, and other methods as may be recommended by University sponsors. All campus departments utilizing funds from sponsors which require utilization of such targeted vendors must be keenly aware that it is the campus' collective responsibility to ensure these businesses receive the fullest opportunity to participate in University business contracts. This campus responsibility includes assurance that these businesses receive a proportionate share of university business contracts.
 
 
C. ORGANIZATION
 
Campus Purchasing is a division of the Materiel Management Department. The organizational structure is as follows:
 
·         Vice Chancellor – Financial and Business Operations
·         Director of Materiel Management
·         Campus Purchasing Manager
·         Procurement Supervisors (organized by commodity)
·         Buyers (by commodity)
 
Campus Purchasing is currently organized into four buying groups. Each of these groups purchases a range of semi-related commodities. Each group is headed by a senior level Procurement Supervisor (buyer) specializing in specific commodities assisted by support buyers. This arrangement allows the members of each group to develop greater expertise within their commodity assignments.
 
The members of each buying group, telephone extensions and commodity assignments are shown on Campus Purchasing’s “Who-Buys-What” webpage. After review of this webpage, if you are still unsure as to the appropriate member to contact for a particular transaction, you may call any of the Buyers for assistance.
                 
D.      RELATED REFERENCES
 
·         BUS-43 Materiel Management
 
 
E.       FEEDBACK
 
For questions related to this policy or procedure, please contact the Director of Materiel Management
 
 
F.        DEFINITIONS - to be added in a future update
 
 
G.       FREQUENTLY ASKED QUESTIONS (FAQs) – to be added in a future update