THE AMERICAN UNIVERITY IN CAIRO R/D 00/9A SUPPLY CHAIN MANAGEMENT OFFICE RECEIVING AND DELIVERY UNIT OPERATING POLICIES AND PROCEDURES

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1 THE AMERICAN UNIVERITY IN CAIRO R/D 00/9A SUPPLY CHAIN MANAGEMENT OFFICE RECEIVING AND DELIVERY UNIT OPERATING POLICIES AND PROCEDURES 1. Overview These procedures apply to all goods and services procurements and related activities, to establish uniform procedures for the procurement of goods and services that are consistent with the policies of the university. It is the individual responsibility of each employee involved in the procurement process to understand the policies, upon which these procedures are based, and the meaning and intent of the procedures themselves. If there are any questions or concerns relative to either the policies or procedures, or the ability of the employees to respond effectively to the requirements of the procedures, then it is the responsibility of the employee to bring such matters to the attention of the Director of Purchasing and Warehouses immediately. The fundamental purpose of these procedures is not to restrict the effectiveness of the individuals involved in procurement, but to provide a foundation for effective, consistent, and complete consideration of all aspects of the task, with the expected result being a positive, professional relationship between the university employee and the suppliers who serve the university. 2. Acquisition Sources This policy applies to all the university departments and units, and provides guidelines to all personnel involved in purchasing procurement Acquisition Sources Internal Sources Before proceeding with any requisition for the external procurement of goods and services, first check carefully to ensure that your needs cannot be satisfied from within the university. There are four major sources of internal supply: Interdepartmental transfer of assets Any department / unit possessing personal property surplus to its foreseeable requirements should forward them to the University s Main Store. Any personal property considered to be potentially of use to other departments will be stored. If subsequently found suitable by another department, the asset will be added to the new requesting department s inventory and future depreciation expense will be charged to its budget according to the applicable depreciation rates.

2 2.1.2Supplies Stores The University s Main Supply Stores maintains stock of all frequently used items of stationary and other office requirements. A catalog of items in stock and prices is furnished annually to departments by the Purchasing Office, and is available in the on-line requisition system. For the specialized requirements of the Science department, the Scientific Supplies Store maintains stocks of frequently used chemicals and laboratory utensils. A specialized store is also maintained for materials required by Building and Grounds for the operation and maintenance of plant Auxiliary Enterprises and Service Departments The Printing Services is equipped to handle all normal printing, designing and duplicating requirements subject to capacity and equipment constraints. Food Services are able to cater for the requirements of all normal social functions on or off campus Printing Services and Duplicating Center I. Printing and Duplicating Policy Statement: All printing jobs must be processed through the University s Printing Services and its Duplicating Center. Exceptions to this policy can be authorized if: a. No printing facility or materials are available in the Printing Services to meet the required production. b. The Printing Services cannot carry the job within the time required. c. Any printing job that exceeds LE 15,000.00, where a requester may request external quotations through the Purchasing Office from a pre-approved list of printers according to the following procedures: o Purchasing Office will seek quotations from three printers named by the requester from the pre-approved list and from the Printing Services. o All those submitting bids shall provide quotations that provide price, delivery dates, samples of similar work and the cost or savings of any options proposed. o When the AUC Printing Services will manage the interaction with the external Print Shop, it will receive a fee equal to 10% of the order value. o The decision to place the order will be made by a committee comprised of the Executive Director Supply Chain Management and Business Support the Vice-President for Planning and Administration, and the Director of Strategic Marketing. When the requester is the Strategic Marketing, the committee shall be comprised of the first two members. o The decision will be based on the following factors: price (including the management fee in #c above), time of delivery, technical capability, quality of previous work, and recommendations of the requester.

3 II. Financial Policies and Procedures: Printing costs charged to departmental budgets generate revenue of equivalent amount to the Printing Services. It is therefore not directly relevant to make comparison between external and internal prices for printing, as orders to external suppliers do not bring any revenue to the university. III. Authorization and Supporting Documents: Printing Services requisitions can be authorized by the Department Head or his/her designee. Most Department Heads delegate this authority to their Administrative Assistants. The Purchasing Office will not accept purchase requisitions drawn on outside suppliers for value less than LE 15, unless there is a clear written notification from the Printing Services on the requisition to the effect that it is unable to perform the job because of (reason/s). External printing press invoices must be attached to the Printing Services requisition, showing the Printing Services reason/s for not carrying out the job at the university. IV. Copyright Policy The university policy permits only the making of one photocopy of a chapter from a book or an article from a journal (regardless of internal or external sources). A single photocopy of an entire book or journal issue, or multiple copies of a chapter or article, will require the permission of the copyright holder, which can be obtained in writing through the AUC Press. No goods or services, which can be supplied from any of the above-mentioned sources, will be procured externally. Direct orders will not be placed with external suppliers, and will not be accepted for reimbursement unless internal sources confirm in writing their inability to supply requirements within the specified time and quality Acquisition Sources External Sources For all goods and services, which can be procured through the local market (i.e. Egypt), the university maintains a list of approved vendors through whom it deals. Additions can be made to this list at any time; however, it should be borne in mind that for a vendor to be accepted, the following criteria must normally be met: o All orders must be placed by purchase orders through the Purchasing Office. o All goods and services will be paid by checks. o Payment will be made against invoices identifying in adequate details the goods or services delivered. o All price quotations must be valid for a period not less than 30 days. Supplier obligations and Supplier Selection are dealt with in sections 4.1. and 4.3. The Purchasing Office does not maintain a comprehensive list of approved vendors outside Egypt. The university uses a stateside purchasing agent for all goods that can be purchased from the United States. On the other hand, the Purchasing Office will deal directly with vendors outside the US. Procurement Procedures in the local market and from abroad are dealt with in section 6.

4 3.1. Budget Preparation Budget Availability This policy applies to all university purchases, to provide guidance for completing a purchase requisition. The procurement cycle begins when a department submits a procurement requisition to the Purchasing Office. Estimated or unknown cost must be entered on the procurement requisition, to enable the Purchasing Office to enter the internal commitment as a Requisition (PR) transaction within the financial system. If the requesting department does not feel confident to estimate cost, the input of the Purchasing Office should be requested and obtained before the procurement requisition is released to the Purchasing. Upon receipt of a properly completed procurement requisition, the Purchasing Office performs a further check on estimated cost and enters the requisition to the financial system to check budget availability. Any requisition that results in the overdrawing of a unit appropriation is rejected and the requesting department is immediately notified in writing of the absence of available budget, with the request to take the necessary corrective action and to resubmit the requisition. Delays will therefore be avoided if the requesting department makes every effort to assure itself in advance that the budget is available to meet the planned commitment of funds. Because budget is normally checked at the unit of appropriation level and not at the individual budget line level, it can occasionally happen that a requisition is accepted by the financial system even though the expenditure, encumbrances, and commitments against the unit of appropriation exceed its value. This arises because the requisition is an internal commitment only and not a binding obligation of the institution. Accordingly, a requisition is rejected only where, individually, its value, when added to that of expenditures and encumbrances outstanding, causes the appropriation limit to be exceeded. The logic for this is that the requesting department may wish the most recently presented requisition to be accepted, and an earlier requisition to be revoked or otherwise not progressed to the point of becoming a purchase order. The Purchasing Office will use its best endeavors to notify the requesting department whenever presentation of a requisition leads to an over-committed unit of appropriation with potential conflict of precedence between requisitions when purchase orders are issued. The prime responsibility for ensuring that this situation does not arise rests with the requesting department. The Purchasing Office will notify the requesting departments within two business days of any budget problems associated with a requisition Budget Preparation Budgeting for Currency Changes It not infrequently happens that equipment budgeted to be acquired in dollars is purchased in Egyptian pounds, and vice versa. As the currency decision should rest entirely in the hands of the Purchasing Office, it has been decided that, in those cases where a change from the budgeted currency is required, the Purchasing Office is authorized to complete a Budget Change Request Form on behalf of the requesting department, and submit it for update directly to the Budget and Financial Planning Office. A copy of the form will be sent to the requesting department for information purposes only.

5 3.3. Budget Preparation Budgeting for Minor and Major Equipment After the university s budget is approved at the May Board meeting, all approved furniture and equipment outlays will be removed from the organizational budgets and consolidated in one general appropriation. This appropriation will not form part of the operational budget, and there will be no reporting in the financial system at the organizational level of capital outlays incurred. The Purchasing Office will provide to each organization at year end a complete listing of all expenditures that it has incurred. Minor Equipment / Furniture All non-expandable items having a productive life for two or more years, and whose costs less that LE 14,500 should be entered under Low-Value Asset (assets less than LE 14,500). Major Equipment / Furniture Major items of equipment and furnishings having a unit value in excess of LE 14,500 should be entered under Capital Asset. This may include items of unit price less than LE 14,500 if the total purchase of the same item is greater than or equal to LE 14, Budget Preparation Budget Savings from Major Equipment Budget savings realized on capital acquisitions for departments and units are NOT available to be spent on other, previously unbudgeted item. Savings in the university-wide capital expenditure budget for furniture and equipment may, however, be applied to make up any shortfalls in departmental budgets for planned capital acquisitions for which the budget proves to be insufficient due to price increases or faulty market intelligence. Departments wishing to purchase unbudgeted capital items should either apply savings realized elsewhere in their budget, or use Area contingency funds (if available); in both cases, the approval of the relevant Area Head must be obtained. Please visit for details Budget Preparation Related Expenses for International Procurement We freight all our supplies (except books) by air, and airfreight costs continue to escalate. For your guidance, one-pound weight of supplies from the U.S. currently attracts airfreight and forwarding charges of $7.00; this is in addition to the administrative charges according to the following table: Order exceeds Order equal or less than Charge Basis $0.00 $1, % of amount or $125, whichever bigger $1, $5, % of amount or $300, whichever bigger $5, $20, % of amount or $900, whichever bigger $20, $50, % of amount or $1,750, whichever bigger $50, No limit 5% of amount or $3,000, whichever bigger (with maximum $4,500)

6 Goods may be subject to substantial clearing fees and/or customs duties for which provision must be made in the budget planning process. As a rule of thumb, you should allow 7% of estimated equipment cost to cover: freight & insurance (3%), clearing expenses (4%). This is in addition to the administrative fees as mentioned above See how to allocate in the next section Budget requirement. For all overseas orders, the above-mentioned percentages may be substantially higher should the university be unable to import customs free the items you require. We normally have no customs problems with goods, which are self-evidently required purely for educational purposes. Items that can also be put to non-educational uses may well attract customs duties. Since incidental costs such as freight charges and administrative fees related to the purchase of goods are paid as incurred (i.e. in various steps), only the value of the requested items should be written on the procurement requisition that you send to the Purchasing Office. Do not include amounts allocated for freight, forwarding and administrative fees. These amounts should be held in the related budget line item to meet the anticipated costs. If you are in any doubt as to whether goods you need are liable to customs, please do not hesitate to contact the Executive Director Supply Chain Management and Business Support at ext Budget Allocations: 1. If the expense is related to supplies acquisition: a. Freight, forwarding and insurance (3%), in addition to the administrative fees (according to the above-mentioned table) are paid in US$ and are normally charged to the expense code (cost element) under which the acquisition cost of the imported supply is booked. b. Clearance, and warehousing charges (4%) are paid in Egyptian pounds and normally charged to the expense code (cost element) under which the acquisition cost of the imported supply is booked. 2. If the expense is related to major Equipment / Furniture: a. Freight, forwarding and insurance (3%), in addition to the administrative fees (according to the above-mentioned table) are paid in US$ and are normally charged to the expense code (cost element) under which the acquisition cost of the imported asset is booked b. Clearance, and warehousing charges (4%) are paid in Egyptian pounds and normally charged to the expense code (cost element) under which the acquisition cost of the imported asset is booked.

7 4. SAP Requisition Preparation This procedure applies to all purchase requisitions, to provide detailed instructions for completing a purchase requisition. The purchase requisition is designed to contain all of the necessary information and signatures relevant to the processing of the procurement within the university. The completion of the purchase requisition serves to create the formal purchase order that is the contractual commitment between the supplier and the university SAP Requisition Preparation Step by Step User Manual Please refer to section 6.1. For the step-by-step user manual, and visit / for a live presentation. In case the requester wishes to send any attachments such as an offer from a vendor, a brochure of descriptions, invoices or any other needed documents; he/she must state the requisition code number - given by the system with any sent attachment. The Purchasing Office will not take any action in processing the requisitions until they receive the attachments SAP Reservation from Supply Store Preparation Step by Step User Manual Please refer to section 6. For the step-by-step user manual, and visit / for a live presentation. The SAP Supply Store System allows departments and units to order needed supplies via a userfriendly, easy to use interface. The system makes the University s Main Supply store available online, facilitating the process of ordering frequently used items of stationary and other office supplies, which are submitted instantly to the supply store, guaranteeing a fast, error-free delivery On-Line Requisition Preparation Maintenance Contract System The Online Maintenance Contract System allows departments and units to order new maintenance contracts or to renew existing contracts via a user-friendly, easy-to-use interface. The system makes the University s Maintenance department available online, facilitating the process of maintenance contracts issue and renewal. Authorized users are able to order maintenance contracts utilizing a single form, which is submitted instantly to the Purchasing Office, guaranteeing a fast, error-free delivery On-Line Requisition Preparation Warehousing System The Online Warehousing Requisition System allows the Buildings and Grounds (B&G) to order new warehousing stuff for faculty via a user-friendly, easy-to-use interface. The system facilitates the process of warehousing requisitions.

8 5. Requisitions Receipt Schedule This procedure applies to all purchase requisitions, to provide detailed instructions relating to the monthly and annual deadlines for submitting requisitions to the Purchasing Office. Following are detailed procedures to be followed when implementing a request for purchase of equipment, computing, furniture, supplies, services, etc Requisitions Receipt Schedule Capital Equipment and Furniture The completed requisitions related to the following items should be sent annually by May 30 th of every year to the Purchasing Office: All equipment on the preliminary approved budget list for the following fiscal year, which is usually sent to departments through the Budget and Financial Planning Office during the month of May, with the exception of contingently needed items (e.g. you have provided for replacement of a machine whose ability to provide service for another year is questionable) To the extent feasible, all supplies are required to be purchased from abroad. All requisitions should have the budget control reference number for each requested item. Purchase orders for approved requisitions will be processed at the beginning of the fall semester Requisitions Receipt Schedule Computing Equipment Requisitions for all computing equipment on the preliminary approved budget list for the following fiscal year, which is usually sent to departments through the Budget and Financial Planning Office during the month of May, with the exception of contingently needed items (e.g. you have provided for replacement of a machine whose ability to provide service for another year is questionable), should be sent to the Purchasing Office by May 30 th of every year. Purchase orders for approved requisitions will be processed at the beginning of the fall semester. After processing the main lot of the fall semester purchases, the deadline for submitting requisitions to the Purchasing Office for all budgeted computing equipment and supplies (hardware, software) for the current fiscal year is April 30 th of the same fiscal year. These requisitions, which will be received during the academic year and before April 30 th of every year, will be processed on a monthly basis according to the following procedures: o Requisitions will be submitted to the Purchasing Office according to the current system after being technically reviewed and approved by the School/Area Representative. o The Purchasing Office will consolidate all the requisitions received for processing according to the policy. o Offers and documents will be presented to the Computing Purchasing Committee (CPC) for recommendation and action every month. o The deadline for submitting budgeted computing equipment and supplies requisitions (Hardware, Software) to the Purchasing Office is April 30 th of every fiscal year.

9 5.3. Requisitions Receipt Schedule Supplies and Materials from Local market Local requisitions for supplies, services and material should be submitted to the Purchasing Office on a monthly basis within the period from the 1 st day up to the 15 th day of each month. This requires that each department and unit should ensure adequate quantities to cover its requirements and needs for one month ahead. This applies to all items that are used repetitively and are of lower unit value. The annual deadline for all purchase requisitions for all the university departments, except Buildings & Grounds, Engineering Projects, Maintenance, Housing and DDC, will be May 30 th of every year. This includes requisitions requesting items that require manufacturing or making Requisitions Receipt Schedule Supplies and Materials from Abroad International Purchasing Unit will accept requisitions for overseas supplies on a monthly basis within the period from the 1 st day up to the 15 th day of each month. The annual deadline for receiving overseas requisitions for all the university departments will be April 30 th of every year Requisitions Receipt Schedule Supply Store Requisitions All departments are requested to submit their requisitions for stationary and other requirements on a monthly basis within the period from the 1 st day up to the 15 th day of each month. It is preferable to separate your supplies for office use from other supplies required for the use of special programs and projects. The annual deadline for receiving the Supply Store requisitions for all the university departments will be May 30 th of every year Requisitions Receipt Schedule New Year Desk Calendars and Agendas As these are seasonal items, requisitions are expected to be received within the period from November 1 st up to November 15 th of every year. The main purpose of this request is to enable the Purchasing Office to consolidate identical or similar requests for all the university departments and units, to take advantage of bulk and quantity discounts, to secure that every department has adequate quantities for a reasonable period of time and to avoid the delay and frequent emergencies.

10 6.1. Procurement Procedures Direct Orders This procedure applies to all purchases of goods and services with an estimated price not to exceed $5,000. This system is to facilitate situations where small purchases are made, and has the operational advantages of reduced paperwork for small orders and greatly increased operational convenience. The Executive Director Supply Chain Management and Business has the authority to approve direct orders where the amount of purchase order does not exceed $5,000. The additional approval of the Vice President for Finance is required for direct purchase order in excess of $5,000. The Purchasing Office may place direct orders for all commodities subject to monopoly (irrespective of whether the monopoly is enjoyed by a governmental or private sector supplier), or under other circumstances, up to a value of $5,000, where sole source supply is deemed unavoidable (e.g. peripherals for server computer system, etc.). The Purchasing Office will use its best efforts to obtain the most favorable prices possible for the university, despite unpropitious negotiating circumstances engendered by absence of competition. Subject to the approval limits set out in this manual under section Approval Authorities - Purchase Orders, the Executive Director Supply Chain Management and Business is authorized to order directly the supply of the following types of goods: o Items effectively subject to monopoly or which are sold through a highly restricted number of suppliers. o Specialized items that cannot be adequately specified in bidding process because of the preeminence of non-quantifiable characteristics (aesthetic, appearance, design, etc.). o Items required with great urgency where time does not permit execution of all the steps required in competitive bidding. In all such cases, the requesting department must justify the urgency in writing to the Purchasing Office. o Items normally replacement parts for systems where it is desirable for purchase to be made from the original system supplier. 6.2 Procurement Procedures Proprietary Procurement This procedure applies to all Proprietary Procurement. Proprietary Procurement, i.e., procurement from a single source and without obtaining quotations or bids from other manufactures or suppliers, is hereby authorized only: o To assure compatibility or standardization with existing commodities, o When special design requirements are needed and available only from a single source, o When a specific commodity has proven to be most economical, dependable or serviceable. o When a specific commodity has only one manufacturer or supplier.

11 Any decision to procure a commodity on a proprietary basis, except for procurement of spare parts and components for existing commodities, shall be documented and shall be supported by a statement setting forth the reason(s) justifying that such procurement was advisable and necessary. Please refer to section 5.1. Sole Source/Brand Justification Form Procurement Procedures Quotations & Negotiations This procedure applies to purchases of goods and services concerning solicitations of competitive quotations, with an estimated price of $1,000 and not to exceed $10,000. The Executive Director Supply Chain Management and Business has the authority, in consultation with the requesting department, to select the successful quotation where the amount of the offer does not exceed $10,000. The additional approval of the Vice President for Finance is required for the selection of the successful quotations on amounts in excess of $10,000. Subject to the approval limits set out in this Manual, the Executive Director Supply Chain Management and Business is authorized to directly negotiate with vendors for the supply of the following types of goods: o Items effectively subject to monopoly or which are sold through a highly restricted number of vendors. o Specialized items, which cannot be adequately specified in bidding process because of the preeminence of non-quantifiable characteristics (aesthetic appearance, design etc.). o Items required with great urgency where time does not permit execution of all the steps required in competitive bidding. In all such cases the requesting department must justify the urgency in writing to the Purchasing Office. o Items- normally replacement parts - for systems where it is desirable for purchase to be made from the original system supplier. Types of Quotations: I. Verbal Quotations - will be obtained for purchases of standard or noncomplex material with an estimated unit price not to exceed $1,000. Prices are to be recorded on a quotation sheet that will serve as a backup documentation after the order is placed. The quotation sheet will be attached to the original requisition/purchase order. II. Written Quotations - Written requests for quotation will be sent to vendors under the following conditions: a. All capital equipment purchases. b. Non-standard conditions, requirements, instructions, etc. c. Any occasion where more permanent documentation is advisable. Written quotations should be typed using, whenever possible, the Request for Quotation form. Complete information should be provided including, but not limited to, quantity, description, delivery requirement, special conditions, drawings, specifications, date information required, etc. If

12 replies are to conform to a certain format, this should be spelled out. Purchasing staff must be thorough and attempt to remove all known variables. To the extent practicable, as many potential vendors as possible will be contacted and the selection process should not be limited to leading manufactures or distributors of brand names products, but should embrace as wide a segment as feasible of the entire market for the items requested. The Purchasing Office will determine whether oral or written solicitation is in the university s best interests. Whenever possible, offers should be solicited in writing as this reduces the potential for eventual misunderstandings between the university and the vendor. As a general rule, solicitation by telephone or personal contact will be used only when a restricted number of items are required up to a value of $1,000, when identical items have been procured from the same vendor within a period not exceeding two months, or when time constraints will not permit otherwise. Award Procedure: The final selection of the successful vendor is governed by the following general principles: A. Purchasing staff, when purchasing goods or services requiring written requests for quotations, will solicit prices from three or more vendors. A minimum of two vendors is acceptable for verbal requests, providing that the Purchasing representative is familiar with the market and prices of the item in question. In case of proprietary items, more than one price is often not possible and should be so noted on the requisition. B. Quotations will be solicited only from vendors whom Purchasing knows are qualified or can be qualified to meet all requirements. Maintenance of an approved vendor list is advisable. Examination of the financial condition of a vendor, his ability to perform, and his facilities should be part of the criteria for an acceptable vendor. C. Answers to technical questions arising during the quotation period should be provided by the requester. Purchasing must coordinate the reply and ensure that all potential vendors are provided the same information. D. After all quotations have been received and examined for completeness, a summary sheet is to be prepared noting all the pertinent data and discrepancies. Determination of the low bidder and award of the order will be made by PURCHASING ONLY after all aspects, including preference of the requester, have been considered. The information gathered will be kept with the purchase order as a backup documentation. In cases of quotations for estimating purposes, a copy of each quotation is to be sent to the requester along with the quotation summary sheet. E. Employees will not reveal to a vendor at any time the prices quoted or paid. F. In order to ensure that vendors contacted have responded to a request for quotation, the assigned staff will identify on the requisition all vendors solicited and responses. G. It is a good practice to notify unsuccessful vendors that the quotations have been closed and a contract awarded.

13 H. Unless a specific exception has been obtained from the Vice President For Finance, quotations shall not be solicited from, nor any order placed with, any company that: o Is owned, controlled, or actively influenced by an immediate relative of an employee engaged in Purchasing. o Employs in management, consulting, or sales capacity any person who is a university employee. o Employs in any capacity a university employee who is in position to influence the selection of, or conduct business with, such vendor. I. When circumstances warrant that the solicitation of competitive bids is inappropriate, the assigned Purchasing staff shall document the facts and obtain the specific approval of the Director of Purchasing and Support Services. Any problems of interpretation should be referred to the Director of Purchasing and Warehouses Procurement Procedures Bidding Processes This procedure applies to purchases of non-proprietary commodities (supplies, equipment, and/or services) concerning solicitations of competitive bids, where the order value exceeds $10,000. Purchasing staff should take care not to violate the limits of individual authority as outlined in section Approval Authorities - Purchase Orders. For items and/or services with an estimated price under $10,000 and not covered by a contractual agreement, see section 6.3. Procurement Procedures Quotations & Negotiations. Authority and Responsibility: A. The Director of Purchasing and Warehouse has the responsibility for maintaining a uniform set of policies and forms to serve the bid process. Consideration should include the need for mechanisms for supplier notification, bid analysis and summary, bid bonds, bidder mailing-list applications, competitive invitations, instructions to bidders, policy statement of bid award, and sealed-bid envelopes. B. The Director of Purchasing has the authority, in consultation with the requesting department, to select the successful bidder where the amount of the bid does not exceed $50,000. The additional approval of the Vice President for Finance is required for the selection of the successful bidder on amounts in excess of $50,000. C. Purchasing staff is responsible for obtaining bids on all goods and/or services covered under this policy for both estimating purposes and purchases. Types of Competitive Bids: I. Unlimited Competitive Bids - where the university specifies its requirements and solicits bids through an advertisement in one or more of the national newspapers. Bids are submitted in sealed envelopes with interested vendors being given at least fifteen days to respond from the date of placing the advertisement(s).

14 II. Limited Competitive Bids - where the university invites bids from qualified vendors on its approved vendor list. Given the restricted size of the local market, where typically only a handful of vendors exist who are able to meet the university s requirements; this approach is usually the most suitable and has the advantage of greater speed and simplicity. Award Procedure: Purchases of non-proprietary commodities where the order value exceeds $10,000 are normally satisfied through a formal bidding process. All bids - whether on an unlimited or limited basis - for amounts in excess of $10,000 should normally be supported by a bid bond or a bank draft equal to 1% of the value of the bid. The successful bidder is then required to furnish a performance bond or deposit an additional amount to raise the guarantee to an amount between 5-10 %, at the discretion of the university. The Purchasing Office may waive the successful bidder from this requirement according to his previous performance, the level of his provided services, and the strength of his financial stability. The successful bid will normally be the lowest which meets all specifications and terms. Exceptions to this general principle must be clearly documented and adequate justification provided whenever the lowest bid is not selected; see section 6.5. Award other than Low Bid. If two (or more) bids are identical in price and other conditions, the decision may be taken to divide the order between them. Where only one bid is received which is responsive to the university s requirements, the Director of Purchasing may accept such bid if he feels that the price is reasonable and all conditions have been met in the offer, and that the requesting department sees no clear benefit in repeating the bid process. When the successful bidder has been selected, all other bidders are contacted and requested to submit their deposit receipts for refund. All bid bonds are then mailed directly to the issuing bank. The following factors in combination, not necessarily listed in their order of importance, will be considered in reviewing bids and awarding contracts: o Prices. o Bidder s previous record of performance and service. o Ability of bidder to render service in this instance. o Availability of bidder s representative to call upon and consult with the requesting departments. o Quality and conformance to specifications. The university reserves the right to reject any and all bids, to waive informalities, and to contract as the best interests of the university may require. This should be clearly noted on all bid documents. The final selection of the successful vendor is governed by the following general principles: A. Bid requests should be typed, using a standard form whenever possible. Complete information should be provided including, but not limited to, quantity, descriptions, delivery requirements, special conditions, drawings, specifications, date information required, etc. If replies are to conform to a certain format, this should be spelled out; Purchasing must be thorough and attempt to remove all known variables.

15 B. A minimum of three vendors is acceptable, provided that purchasing staff is familiar with the market and prices of the goods in question. In the case of proprietary items, more than one price is often not possible and should be so noted on the requisition. C. Bids will be solicited only from vendors whom Purchasing knows are qualified or can be qualified to meet all requirements. Maintenance of an approved vendor list is advisable. Examination of the financial condition of a vendor, his ability to perform, and his facilities should be part of the criteria for an acceptable vendor. D. Answers to technical questions arising during the quotation period should be provided by the requester. Purchasing must coordinate the reply and ensure that all potential vendors are provided the same information. E. After all bids have been received and examined for completeness, a summary sheet is to be prepared noting all the pertinent data and discrepancies. Determination of the low bidder and award of the order will be made by PURCHASING ONLY after all aspects, including preference of the requester, have been considered. The information gathered will be kept with the purchase order as a backup documentation. F. Employees will not reveal to a vendor at any time the prices quoted or paid. G. In order to ensure that vendors contacted have responded to a request for quotation, the assigned staff will identify on the requisition all vendors solicited and responses. H. It is a good practice to notify unsuccessful vendors that the bid has been closed awarded. It is not necessary to note the name of the successful bidder. I. Unless a specific exception has been obtained from the Vice President For Finance, bids shall not be solicited from, nor any order placed with, any company that: o Is owned, controlled, or actively influenced by an immediate relative of an employee engaged in Purchasing. o Employs in management, consulting, or sales capacity any person who is a university employee. o Employs in any capacity a university employee who is in position to influence the selection of, or conduct business with, such vendor. J. When circumstances warrant that the solicitation of competitive bids is inappropriate, the assigned Purchasing staff shall document the facts and obtain the specific approval of the Director of Purchasing and Support Services. Any problems of interpretation should be referred to the Executive Director Supply Chain Management and Business

16 6.5. Procurement Procedures Award other than Low Bid This procedure applies to all procurements, to establish criteria for awarding purchase orders or contracts to other than the low bidder. It is recognized that the primary objective of the Purchasing Office is the timely acquisition of goods and services at the lowest total cost. The elements of total cost, in addition to basic price, include transportation, storage, service, technical assistance, and willingness to stock material for the university s requirements, after-hours availability, and compatible and correct invoicing. The assigned staff/committee evaluates each of these and other criteria to decide which proposal represents greatest value or lowest total cost to the company. Since several of these decisions are subjective, it is important that the reasoning employed in reaching such decisions be carefully documented. In the event that the assigned staff/committee decides to award the order or the contract to a vendor whose price is not low, the assigned personnel shall: o Make a spreadsheet listing all objective elements of the decision. o Write a brief explanation of those factors that lead to the decision to award to other the low bidder. o Have both the spreadsheet and the explanation reviewed and approved by the Executive Director Supply Chain Management and Business prior to placement of the order Procurement Procedures Contracts This procedure applies to all contract procurements to provide guidelines to all personnel involved in contract procurements. The Purchasing Office is responsible for the issuance and administration of all contracts which relate to the purchase or acquisition goods, computing and other equipment maintenance, and services except for: o Acquisition of buildings and lands. o Apartment rentals. o Utilities. o Major construction contracts. o Small construction contracts awarded by direct order to petty contractors, with a contract value not exceeding $2,000. In the case of minor construction or remodeling contracts, the Building & Grounds Office is responsible for reporting to the Controller s Office, with the full supporting details, all commitments entered into, so that encumbrances may be appropriately recorded and, in due course, invoices submitted for settlement. Before signing a contract binding the university, the contracting officer refers the documentation to the Legal Affairs Office for review and approval. The Legal Affairs Office may, at its discretion, refer the proposed contract to external legal counsel. Contract signing powers are subject to the Procurement and Contracting Authority Table in section Approval Authorities Purchase Orders. Apart from the exceptions noted above, the Purchasing Office is responsible for the administration of contracts entered into by the university including, in particular, the administration of contracts for the

17 maintenance of equipment and machinery. administration of contracts: The following general principles apply to the A. The contracting officer (or other designated officer) must ensure that the contractor complies with all terms and conditions of the contract, particularly with reference to quality and delivery terms. B. The contracting officer is responsible for ensuring that all necessary steps are taken to protect the university s legal rights and remedies in the event that the contractor fails to perform in accordance with the contract terms. C. The contracting officer has no authority to grant to the contractor price increases not provided for in the contract without corresponding benefits accruing to the university. D. The contracting officer has no authority to grant era of payments provided for in the contract without corresponding benefits accruing to the university Contract Negotiations This procedure applies to all university employees to provide guidelines to all personnel involved in contract negotiations. The Executive Director Supply Chain Management and Business has the responsibility of ensuring that all contract negotiations conducted on behalf of the university by any employee of the university are consistent and within the policy practices contained in the purchasing manual. As part of this responsibility, the Executive Director Supply Chain Management and Business will develop appropriate checklists to serve participants in the negotiation process. Checklist topics may include basis for award, purchase orders, contracts and agreements, overseas purchasing negotiations, specifications, prospective vendors, terms and conditions, and user department requirements. Please refer to section 6.3. Procurement Procedures Quotations & Negotiation, which provides guidelines for all procurement negotiations. General Considerations: o A contract is a bilateral agreement entered into by the Buyer and Supplier. For a contract to be legal and enforceable, both an offer and an acceptance, in identical terms, are required. o The purpose of negotiation is to bring into existence a contract that is clear, concise, complete, and in the best interest of all parties to the agreement. It is in this spirit that university employees should enter into negotiation. o It must be remembered that contract negotiations are conducted with individual suppliers and take place prior to final selection and award of contract. Thus prudence and good judgment need to be exercised during the negotiation process. Any questions or concerns as to the proper stance to be adopted should be brought to the attention of the Executive Director Supply Chain Management and Business.

18 Equipment Maintenance Agreements This procedure applies to all equipment maintenance agreements to provide guidelines to all personnel involved in equipment maintenance agreements. The Purchasing Office is responsible for the issuance and administration of all contracts, which relate to the purchase or acquisition goods, computing and other equipment maintenance. It has been noticed that departments and units are signing equipment maintenance contracts with vendors and sending executed contracts to the Purchasing Office (or even to the Controller s Office directly) for payment processing. Therefore, it should be noted that all such contracts should be negotiated through, and executed by, the Purchasing Office. Failure to observe these procedures may lead to the university s refusal to effect the payment requested Procurement Procedures Procedures for Purchasing Computing Equipment Following are procedures for purchasing computing hardware, software and network requirements: Budget requests should be set at department/office level. All budget requests should then be submitted to the School/Area Representative in the Computing Purchasing Committee (CPC). Once they are justified by the School/Area Representative, they are to be sent to the Dean of the School/Area Head for approval. If the requests are justified and approved by the Dean/Area Head, they will be sent to the AVP for Computing for concurrence. All approved requests will be returned to the requesting department/office to be attached with their yearly budget requests. This practice will be applied for hardware, software and network requirements After the budget is approved, the Purchasing Office usually asks the departments/offices to submit their requisitions for processing. At that time, all departments/offices should submit their requisitions to the related School/Area Representative to be technically reviewed and to ensure that all specifications are clearly stated on the requisitions, and to provide technical advice if the need arises All requisitions are then forwarded to the Purchasing Office. The Purchasing Office will forward requisitions to CPC to be reviewed and analyzed. CPC will prepare a draft for the requests that will be forwarded to the vendors. The draft should clearly include all the required specifications According to the specifications given by the CPC, the Purchasing Office will contact the suppliers and vendors, and arrange to get quotations, bids and offers for the requested items according to the University s Purchasing policy. In that event, the following points should be carefully noted: a. In the interest of fairness, all vendors must be accorded the same treatment. The committee and the departments representatives should treat all bid data confidentially and should not divulge one bidder's data to another bidder, either before or after the contract has been awarded. All bidders should be advised of the bid closing date, and no bids should be accepted after that date. If, for extraordinary reasons, the bid date is extended to give an interested vendor more time, all bidders should be notified of the new bid closing date.

19 b) The specifications must be clear enough for both buyer and seller to be absolutely certain that they are considering the same thing. c) Specification should spell out unambiguously the required design or performance characteristics necessitated by the current operating situation. As a rule, the requesting department needs to discuss various aspects of the equipment with the vendor. This activity is normally coordinated by the Buyer assigned to the job. d) When the investigation is complete and specifications are firm, the Purchasing Office may take the necessary actions. e) In addition to achieving clarity, care must be exercised to ensure that specifications are not written around a specific product, so as to limit competition. f) For upgrading, a clear and accurate definition of the items to be upgraded should be listed and to be provided with the requisition. It should be noted that the upgrading cost of any equipment should not exceed 50% of the purchase value of its brand new equivalent The offers will be forwarded to the Purchasing Office. The Purchasing Office will appoint an Internal Computing Purchasing Committee to open bidders' envelopes, and a summary will be presented to the CPC at the beginning of the academic year. CPC will then review the offers and give advice regarding the brands, items requested and suitable suppliers, and recommends the selected equipment. The Purchasing Office, in coordination with the AVP for Computing, will negotiate with the suppliers for discounted prices In coordination with the School/Area Representatives, CPC will assign and recommend the respective equipment to each department/office. The recommendation will be forwarded to AVP for Computing for the final decision. According to the AVP for Computing decision, the Purchasing Office will process the department/offices' requisitions as approved, if the departments/offices' budget is sufficient. In the case of requests to purchase any of the following item(s), the AVP for Computing will make a recommendation on the requested purchase(s) to the President s Budget Review Committee: o o Any computing equipment or software licenses with an item value in excess of $15,000. Server class systems; network-connected storage systems; network-connected video storage systems; and, video streaming stations, regardless of their values. Only that Committee can give final approval to such purchases. (The President s Budget Review Committee includes the President, the Provost, the VP (Finance) and the VP (Planning & Administration) If the market economical environment is stable, the selected prices and brands will be valid for three months. Accordingly, prices will be applied on all departments'/offices' individual requests for PCs and printers and other items where values are $6, or less per item, and are similar to those previously approved ones if the total quantity requested is less than 10 units. The Purchasing Office will directly process these requisitions after they have been recommended by the School/Area Representative and approved by the AVP for Computing.

20 The Purchasing Office will trace the market every three months to enable CPC to review the prices and a new approved list will be issued. There will be a meeting to be held in the month of May to review any pending issues. The vendors, brands and prices that will be approved at this meeting will be applicable during June, July and August. Purchasing will directly process any requisition that may be received during these months, provided that it is recommended by the relevant School/Area Representative and approved by the AVP for Computing In order to expedite the purchasing of all requisitions for all items other than computing equipment (such as upgrading, modems, servers, network accessories, Ethernet cards, hard discs, memory upgrade, spare parts, keyboards, monitors, software and all other components & accessories), they will be processed directly through the Purchasing Office as far as the requisition is signed, recommended and approved by the appropriate authority according to the following table: Purchasing Office $ Area/School Representative $ A.V.P. for Computing $ Item Value <1,000 <2,000 >2, Receiving and Delivery of Computing Equipment Technical computing offices, or those who have computing lab technicians, should nominate to the Controller s Office the names of the authorized technicians who will ascertain that the received equipment comply with the ordered equipment's specifications. AVP for Computing will nominate two technicians for AUC non-technical departments/offices or upon the request of the receiving department/office. The recipient subcommittee will provide the AVP for Computing Office and the Purchasing Office a signed compliance note. The CPC School/Area Representative s signature on the receipt/delivery note will replace the technician s signature related to the School/Area in question Disposal of Computing Equipment All computing equipment is subject to the normal depreciation policy, and it s assumed to function properly up to the end of its life cycle. Accordingly, all machines and equipment transferred to the Main Store after their assigned life cycle will be considered obsolete and out of order, and are to be sold or disposed of through the Purchasing Office. In the event that any item is transferred to the Main store before its assigned life cycle time, the approval of the School/Area Representative, together with the justified reasons for that transfer, must be secured on the transfer note. In both cases, the department transferring any computing equipment to the Main Store should identify the detailed technical status of the transferred equipment. All departments that may request reconditioned or obsolescent machines from the Main Store must use them for a period not less than 18 months before requesting state-of-art replacement.