Topic PURCHASING Procedure Category Expenditure Updated 07/2015

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1 Topic PURCHASING Procedure Category Expenditure Updated 07/2015 RELATED POLICIES, PROCEDURES AND FORMS Policies Procedures Forms Queensland Procurement Policy Purchasing Card Purchase Request * Purchasing Policy Financial Delegations Engagement of Consultants Printing Quote Request Form Procedure Griffith University Code of Conduct ICT Procurement (Information Standard #13) Authority To Sign Contracts And Agreements - Schedule Of Delegations *Use only if Griffith Portal is unavailable PURCHASING All expenditure of University funds regardless of source (other than salaries, staff reimbursements, petty cash and utilities) must be undertaken through the purchasing processes in this procedure. Options of purchasing through contractual and preferred supplier or standing offer arrangements are to be explored prior to seeking quotations for the supply of goods and/or services. Definitions Purchasing is the process of issuing an official Purchase Order to a supplier for the acquisition (and subsequent payment) of goods and/or services and includes the acquisition of goods and/or services using the University's Purchasing Card. Authorised Financial Delegate is the person who, in accordance with the University s Financial Delegations, has the authority to approve expenditure on behalf of the University and who certifies that the goods and/or services are necessary for the conduct of University business. Purchase Request means a request to purchase goods and/or services approved by a relevant authorised financial delegate submitted via A Griffith Portal on-line Purchase Request; A manual Purchase Request Form; or Other manual means e.g. or facsimile. Buyer is a University employee with responsibility for ensuring that probity exists in the purchasing process and that value for money on behalf of the University occurs in the goods and/or services being acquired. 1 PURCHASING PRINCIPLES 1.1 PROBITY AND ACCOUNTABILITY GUIDELINES FOR UNIVERSITY PURCHASING The University must conduct its purchasing activities with the utmost probity. The University is to ensure that its purchasing is carried out in accordance with such obligations as may be placed upon it by the: ALWAYS refer to the electronic copy for the latest version. Page 1 of 10

2 Financial Administration and Audit Act (Qld) ; Financial Management Standard (Qld) ; Public Sector Ethics Act (Qld) 1994; and such other legislative or Government policy obligations as may from time to time apply to the purchasing activities of the agency. Ethical behaviour required when purchasing goods and/or services includes: maintaining confidentiality in all dealings (i.e. never reveal prices when seeking competitive quotes) impartial performance; non-acceptance of gifts and favours; avoiding approaches that might be interpreted as seeking preferential treatment; avoiding conflict of interest; being accountable/consistent/professional. 1.2 PROCUREMENT PLANNING Procurement planning facilitates a structured and considered approach to purchasing. Procurement planning is based on an analysis of the University s purchasing patterns and supply markets. The University should use supply market analysis in an effort to identify possible opportunities for local suppliers. Planning must be undertaken at both the corporate level and in relation to significant individual purchases, the University will prepare: a corporate procurement plan; and plans when purchasing goods and services that have been identified as being of high relative expenditure and/or for which supply is difficult to secure (significant purchases). Finance annually reviews the University s purchasing patterns and supply markets to develop and refine its procurement profile. Significant expenditure categories will be identified for procurement planning purposes. Other Elements responsible for input to the procurement plan include, but are not limited to: Capital Works Campus Life Administration is responsible for providing procurement planning information in relation to Capital Works projects. Information and Communications Technology (ICT) Information Services is responsible for providing procurement planning information in relation to ICT projects, and Library Acquisitions and Services 1 Section 36 2 Part 3 Division 4 - Expense Management ALWAYS refer to the electronic copy for the latest version. Page 2 of 10

3 The University publishes all forward procurement schedules on the Queensland Government Marketplace website, with a basic outline of anticipated significant purchases. 1.3 SIGNIFICANT PURCHASES Significant purchases are those goods and services that fall into the following categories: High relative expenditure and difficult to secure supply; High relative expenditure and easy to secure supply; Low relative expenditure and difficult to secure supply. A number of factors impact on how many potential suppliers are approached in a particular purchasing exercise, and in what manner the University goes to the market and the form of the arrangement that is intended to be established. These factors include but are not limited to: the nature and complexity of the goods or services being acquired; the availability of the goods or services and the characteristics of the market; the importance of the goods or services to the University; the whole-of-life costs of the goods or services; the transaction costs associated with undertaking the purchase. 1.4 COMPETITIVE PURCHASING ARRANGEMENTS Competitive purchasing arrangements include steps to: ensure that all goods and/or services are purchased with the appropriate quality standards, delivery requirements and optimum volume levels and at the lowest possible price; consider the credit terms available through various suppliers and the positive effect that such terms can have for the University; ensure that goods purchased are obtained at the best value for the University dollar; comply with the requirements of the Queensland Procurement Policy and the University Purchasing Policy Quotes For purchasing goods and/or services not the subject of contractual and pre-qualified supplier or standing offer arrangements, the following arrangements apply: Less than $5,000 1 verbal quote (documented) Record quote details on the Purchase Request. $5,000 to <$20,000 2 verbal quotes (documented) Record quote details on the Purchase Request $20,000 to <$200,000 3 written quotes (forwarded to buyer) Use the official Request for Quotations Form. See Note (iv) below Record quote details on the Purchase Request and forward the written quote/s to the relevant Buyer. ALWAYS refer to the electronic copy for the latest version. Page 3 of 10

4 $200,000 to $1,000,000 University Tender Process to be followed Follow Tender Procedures. See Note (v) below. Contact Tender Manager, Business Services >$1,000,000 Tender Board Approval Follow Tender Procedures. See Note (v) below Note: (i) Monetary thresholds are exclusive of GST; (ii) (iii) (iv) (v) Contact Tender Manager, Business Services the price offered must achieve the best value for money for the University taking into account the availability of goods and/or services of similar quality and features from other suppliers; The requirement to obtain competitive bids may be negated in certain situations e.g. goods only available from a sole supplier. Full documentation is required to substantiate departure from purchasing arrangements in this procedure; the number of invitations issued should be governed by: an assessment of the benefits to be gained by increasing the competition to the additional cost involved. a requirement to ensure that all suppliers wishing to do business with the University are given a reasonable opportunity to do so. Obtain the Request for Quotations Form from the Tender Manager, Business Services. Exceptions to the requirement for the calling of formal public tenders may apply where: Market analysis shows that a genuine sole supply or limited supply situation exists; A thorough forward planning exercise has been undertaken, taking into account market analysis, expenditure and level of difficulty in securing supply of the goods or services. Requests for waiver of tender must be directed in the first instance to the Tender Manager, Finance, Business Services, who will verify if exception may be granted and prepare a recommendation for consideration by the Vice President (Corporate Services). ALWAYS refer to the electronic copy for the latest version. Page 4 of 10

5 1.4.2 Tender Procedures The recommended tender procedures are outlined in the following diagram: STEPS IN TENDER PROCESS EXAMPLES OF DECISIONS/ACTIONS ## Planning the Procurement Selecting a Procurement Process Defining the outcome in function terms Defining specifications Researching the procurement market Identifying risks Developing a business case Determining whether to use an open, select or direct source tender Preparing to Approach the Market Developing a procurement plan Developing a request document Seeking appropriate legal advice Developing a submission evaluation plan Creating a submission evaluation committee Approaching the Market Notifying the market Publishing request document modifications Publishing clarifying answers Evaluating Submissions Fairly and impartially evaluating submissions Appropriately documenting decisions Advising participants of the decision Concluding the Process Negotiating and signing the contract Publishing the awarding of the contract Properly handling complaints Fulfilling reporting requirements Storing all records ## Refer to Queensland Purchasing s Procurement Guidelines or contact your buyer for further information. 1.5 PURCHASES FROM CONTRACTUAL, PRE-QUALIFIED SUPPLIERS OR STANDING OFFER ARRANGEMENTS The University establishes contractual and pre-qualified supplier arrangements for a range of goods and/or services. State and Federal government negotiated standing offer arrangements may also be accessed. Contact your buyer for further information. 1.6 LOCAL SUPPLIERS When making purchasing decisions, the University ensures that competitive local firms that comply with relevant legislation are given a full, fair and reasonable opportunity to supply goods and/or services. 1.7 SPECIAL APPROVAL PURCHASES Purchases requiring special advice, consultation and approval prior to placement of an Order include: ALWAYS refer to the electronic copy for the latest version. Page 5 of 10

6 Insurance External Printing/Business Cards Building Alterations and Additions Audio Visual Equipment Library Acquisitions e.g. Books, Periodicals and other Publications Advertising/Graphic Design Photocopiers and Multi-function Devices ICT Purchases - Products and Services including Software (including overseas purchases) Dangerous Goods and Chemicals Food and Beverages Insurance & Risk Management, Audit, Risk and Compliance Uniprint, Enterprise Printing Services Campus Life Administration Division of Information Services Division of Information Services Marketing and Communications Division of Information Services Divisional of Information Services Technical Coordination and Logistics Griffith Food 1.8 PURCHASE OF ICT PRODUCTS AND SERVICES The procurement of ICT is defined as procurement of hardware, software, telecommunications equipment and associated services used in electronic processing, storage, and dissemination of information. ICT includes: Central Processors Video communicators Peripheral Equipment Facilities management Systems software, including operating systems Systems development Application software Systems integration Voice and data communications facilities, including fixed and mobile radio systems; computer premises equipment such as PABX's, multiplexers and terminal equipment (eg. facsimiles, modems, telephone handsets); Maintenance and support services Micrographic equipment IT Consultancies Government Information Technology Conditions (GITC) Any supplier offering products and/or services to the University must be a signatory to or be prepared to sign a GITC Agreement before any Official Order is placed on or a supply arrangement is entered into by the University. Purchase Orders must be endorsed with the following statement: ALWAYS refer to the electronic copy for the latest version. Page 6 of 10

7 "This Order is placed in accordance with the terms and conditions of Queensland GITC Agreement Number XXX." Raising an Official Order activates the pre-agreed contractual terms and conditions in respect of each procurement transaction Industry Development The ICT Procurement Standard (IS13), in the context of facilitating the ongoing development of the Queensland ICT industry, requires that where ICT purchases exceed $250,000, the submission of an Industry Development Statement must be included by the offerer and form part of the overall tender evaluation process. 1.9 LEASING ARRANGEMENTS When making decisions about the acquisition of an asset, the University is required to be satisfied that the best cost alternative is used. An acquisition should represent the best return and performance for money spent from a total costs of ownership or whole-of-life costs perspective. Leasing arrangements cannot be used as a way to alleviate the impact of pressure on budget allocations. There is no justification for entering into a leasing arrangement that increases the overall cost of an acquisition to the University. Leasing arrangements will be considered only in exceptional circumstances where a proven cost benefit can be demonstrated. Leasing arrangement requests must be submitted with a full cost benefit analysis to the Treasury Director, Financial Control. Approval of the Queensland Treasurer is required before the University can enter into leasing arrangements 3. 3 Statutory Bodies Financial Arrangements Act 1982 (Section 61A and related definition of Type 2 Financial Arrangement ) ALWAYS refer to the electronic copy for the latest version. Page 7 of 10

8 2 PURCHASING PROCESS 2.1 INFORMATION ON SOURCES OF SUPPLY University Buyers; accumulate information on sources of supply and act as a reference point; have details of preferred supplier arrangements established; have catalogues and brochures from a number of suppliers; and have details pertaining to Government Contracts. Once all steps in Section Competitive Purchasing Arrangements have been completed, the following actions are required to formalise the purchase request. 2.2 PURCHASE REQUESTS The University s preferred method for submitting purchase requests is via the Griffith Portal on-line Purchase Request facility. A Purchase Request must not be split into separate requests with the aim of issuing two or more orders or contracts which individually fall within the level of financial delegation held by an authorised financial delegate. A purchase request, although approved by the authorised Financial Delegate: does not constitute a Purchase Order; and should not under any circumstances be represented to a supplier as an official Purchase Order. 2.3 PURCHASE ORDERS An official Purchase Order establishes a contractual and legal arrangement. The University commits to pay for goods and/or services only when an official Purchase Order is issued or a Purchasing Card transaction is effected. Purchase Orders are raised through the Finance System Purchase Orders Not Required Purchase orders are not required for certain expenditure including, and not limited to, the following: Purchases using the University Purchasing Card. Purchases for some utility items (for example, audit fees, electricity, insurance, telephone charges, annual subscriptions, Council rates) Open Orders Where regular orders are placed with the same supplier and it is not appropriate to utilise the Purchasing Card facility, an open order may be established. Open orders are usually valid for periods of up to12 months Assets Any Purchase Order relating to the acquisition of assets must identify asset items as separate line items to facilitate recording in the Asset Management System. ALWAYS refer to the electronic copy for the latest version. Page 8 of 10

9 See Assets Non Current Assets Trade In of Existing Asset Where a purchase price is offset by the Trade In of an existing asset, the Purchase Order must reflect the full price plus the trade in as a credit line against the full value. See Assets Disposal Payment of Deposit (or Prepayment) A requirement to pay a deposit or prepayment against the supply of goods and/or services should be indicated clearly on a Purchase Request submitted. Relevant documentation should be attached to the purchase request to support any request for a deposit or prepayment from a supplier. 2.4 PURCHASING CARD The University s Purchasing Card is an alternative payment mechanism for the purchase of low value goods and/or services excluding assets. See Purchasing Card Procedures 2.5 PRINTING QUOTATIONS FOR UNIVERSITY PUBLICATIONS Approval is required from Marketing and Communications for any University publications to ensure consistency is maintained with corporate style requirements. Quotes are to be sought from UniPrint, if appropriate, and external suppliers. 2.6 BUSINESS CARDS The University uses a Corporate style business card. Deviations from this format are not permitted. Quotes are to be sought from UniPrint. 2.7 OVERSEAS PURCHASES (OTHER THAN LIBRARY BOOKS AND REFERENCE MATERIALS) The University may be required to lodge a formal Customs entry request for imported goods. Staff intending to import equipment, research components, teaching aids or biological material should consult the Buyer prior to submitting Purchase Requests. Prior approval is required from the Division of Information Services for any computing or IT related purchases overseas. Written quotations outlining the terms of the overseas purchase e.g. freight charges, currency variations permitted and customs clearance charges etc. are to be submitted to Finance with the Purchase Request. 2.8 AMENDMENT OR CANCELLATION OF PURCHASE ORDERS Where a need to amend or cancel a Purchase Order is identified, Departments/Elements should forward written advice to the purchasing mailbox fin-purchasing@griffith.edu.au detailing the action required and the reasons for the change. Advice from a supplier which necessitates an amendment or cancellation of a Purchase Order should be provided in writing. ALWAYS refer to the electronic copy for the latest version. Page 9 of 10

10 Any increase in financial commitment in excess of $100 above the original Purchase Order requires a further expenditure approval by the authorised financial delegate. Requests to alter any part of the account, fund, department ID, class or project/grant sequence should be directed to the appropriate Buyer. In these instances, the amendment is for Internal Use Only and entered on to the Finance System. Action to amend or cancel a Purchase Order is taken by Finance and where necessary advice is forwarded to the supplier. Source document(s) relating to proposed amendments or cancellation are to be retained with original request documents. 2.9 FOLLOW-UP ON OUTSTANDING ORDERS Buyers are required to follow up regularly on orders that are outstanding for more than 90 days RECEIPT OF GOODS AND/OR SERVICES See Procedure - Receipt of Goods and/or Services. 3 FURTHER INFORMATION For further information, contact fin-purchasing@griffith.edu.au or the Procurement Manager, Business Services Ext 56516; and refer to Procurement Transformation Division Procurement Guidelines. ALWAYS refer to the electronic copy for the latest version. Page 10 of 10