Procurement Policies

This policy outlines overall purchasing requirements and expectations for use by all Pomona College personnel.

All departments must comply with this policy to acquire all goods, materials, and services.

Procurement means the acquisition of goods and services.

Capital Equipment is defined as property having a useful life of one year or more and a minimum acquisition cost of $25,000 per unit.

Sole Source means that a single supplier is uniquely qualified to meet the department’s procurement objective. To be considered a sole source and, therefore, exempt from the bid process, one of the following conditions must be met:

• The actual product or service needed is the only one that will meet the department’s need/requirement, and it can only be purchased from one source (manufacturer or distributor).
• The product or service must match or be compatible with current equipment or services.
• The product needed is specifically required for use with a grant or contract.
• The service needed is controlled/mandated by the local utility or government.
• Professional or artistic services.
• An unusual or compelling urgency exists.

Pomona College supports sustaining and promoting a procurement environment based on the understanding that departments are the best positioned to determine what they need to run their programs; they are the experts. Policies, procedures, and processes are meant to reflect an environment that puts them in the best possible position to get the products and services they need in a timely and cost-effective manner to effectively run their programs while ensuring appropriate business processes are followed.

Purchasing decisions are business decisions made on behalf of the College and, therefore, should be made with the utmost consideration for what is in the College's best interest. Purchases also need to be made most efficiently and cost-effectively. Following policy and procedure ensures appropriate business processes occur when dealing with outside suppliers.

The College’s goal for every purchasing transaction is to obtain the best value possible. Best value is determined by evaluating many factors (such as price, delivery capabilities, quality, past performance, training, financial stability, service capabilities, ease of ordering, payment, etc.) and selecting a supplier that offers the best combination of those factors.

The College strives to procure most goods and services using contracts with appropriate terms and conditions to protect the department, College, and supplier properly. When bids are required by policy, they are to be conducted on an open and competitive basis without favoritism to maximize the best value for the department and college. Interested suppliers will receive fair and impartial consideration.

The College’s procurement policy is intended to be consistent with the Generally Accepted Accounting Practices (GAAP), OMB Circular A-110, OMB Circular A-21 (CAS - Federal Cost Accounting Standards), and the Federal Acquisition Regulation (FAR). College departments will ensure that each transaction is classified or defined as an allowable expenditure on a specific account. For sponsored programs, certain purchases may be unallowable.

Accounts Payable, part of the Controller’s Office in the Finance Office, is the single point of contact for all centralized payment activities. They will dispatch all Purchase Orders to suppliers, and process changes to Purchase Orders when requested by departments.

Authority and Responsibility 

As stated above, the College maintains a procurement environment that delegates considerable decision-making authority to departments. These activities include:

• Determining which products and services they need to run their programs.
• Initiating requisitions to Preferred Suppliers with contracts and agreements with the College.
• Appropriately handle individual purchases of less than $25,000 while creating requisitions for purchases of $25,000 or greater BEFORE executing a contract or purchase.
• For purchases of $50,000 or more:
  • Solicit bids, substantiate purchases from sole sources, or provide analysis of preferred suppliers when appropriate.

Employees involved in the purchasing process take full responsibility for understanding the College’s policies and procedures regarding purchasing and supplier relations. Purchasing decisions are business decisions made on behalf of the College and, therefore, should be made with the utmost consideration for what is in the College's best interest.

A department must have all appropriate Drug Enforcement Administration (DEA) licenses if it utilizes controlled substances.

Segregation of duties and responsibilities in the purchasing process provides proper controls. As a purchase's dollar value and complexity increase, so does the level of authority and responsibility required to obligate the College for a purchase. An example of segregation of duties within a department is as follows:

• Requester/end user (PI, lab assistant, department assistant, financial assistant, etc.):
  • Determine what they need.
  • Determine whether a Preferred Supplier can fulfill the need
  • Research suppliers
  • Solicit prices
  • Analyze costs and assess other important factors (i.e., delivery, customer service, etc.)
  • Select a supplier
  • Communicate needs to authorized requestor
  • Track documents and paperwork flow
  • Ensure the proper receipt of ordered goods or services and completion of contracts according to terms and conditions
• Approver (supervisor, business manager, lab manager, PI, etc.):
  • Validate the legitimate business purpose of the transaction
  • Determine whether a Preferred Supplier can fulfill the need
  • Approve requisitions
  • Validate that adequate funding is available
  • Ensure compliance with College policy and applicable regulations regarding the use of restricted funds and the acquisition of regulated or controlled goods
  • Negotiate and resolve disputes with suppliers
  • Monitor and reconcile purchase transactions using the financial system and associated financial statements and reports
• Department chair, Dean, faculty supervisor, administrative department head, etc.:
  • Review and approve reimbursement requests and other special purchasing transactions
  • Approve requisitions when necessary
  • Monitor budgets
  • Ensure compliance with college policy and applicable regulations regarding using restricted funds and acquiring regulated or controlled goods.

Ethics

Ethical business standards shall govern all procurement transactions. Infractions of College procurement policy are to be reported to the department chair, the Audit Committee, and/or an Officer of the College. Disciplinary action for those violating ethical business standards will be taken following applicable College policy, up to and including the termination of employment.

College personnel shall not solicit or accept a significant gift from any supplier or prospective supplier. A ‘significant gift’ is any item, service, favor, money, credits, or discounts not available to others that could influence purchasing decisions. College personnel may accept trivial items as a courtesy but not solicit them. Acceptance of social invitations to occasional business meals, entertainment, and hospitality will be subject to prudent judgment as to whether the invitation places or appears to place the recipient under any obligation, the appropriateness of the occasion, frequency, and choice of facilities. Questions about the value of a gift or the appropriateness of an invitation should be referred to your supervisor to ensure compliance with the College’s conflict of interest policy. Sound business practice requires that employees not make decisions for the College if the outcome directly affects their personal economic interests. For further information, reference the College Conflict of Interest Policy for faculty and staff.

Contract Agreements

End users within departments typically do NOT have the authority to sign ANY contracts or agreements with outside parties in the name of the College. Contracts should be sent to the Director of Finance Operations for review for consistency with Pomona procurement policy. The document will then be forwarded to an authorized signor. The officers currently authorized to sign contracts are:

• President
• Vice President/Treasurer
• Vice President/Institutional Advancement
• Controller/Asst. Vice President
• Assistant Controllers for Real Estate and Trust Administration

In some cases, the above officers have delegated limited signature authority to another position. Department chairs/directors can execute contracts under $50,000 per year. A copy of any contract executed outside the Finance Office must be sent to the Finance Office for their files. Preferably, the contract should be created in Workday, which automatically sends the contract to the Finance Office.

Purchase Order Requisitions

Purchase requisitions are created electronically Workday. Workday instructions are in the appropriate job aid in the Workday Resources app on the Workday homepage.

A purchase requisition should be used:

• When the supplier requires it to extend credit
• When using Amazon, CDWG or Office Depot to receive College discounts through the ‘Connect to Supplier Website’ (Punchout) option
• For all acquisitions $25,000 or greater

When creating a purchase order (PO) requisition, be sure to input sufficient details and type carefully. As noted in the next section, the requisition will go through an approval business process. The requisition should be requested when the initial agreement with the supplier is reached or when a bid needs to be sent out to multiple suppliers. Workday Procurement has a bid form called a ‘Request for Quote’, the preferred method of bidding. Do not wait until the work is done and the invoice is received. If you are unsure of the exact cost, the PO should indicate an amount “NOT TO EXCEED”.

Purchase Requisitions can be prepared for a one-time purchase, such as a filing cabinet, or multiple purchases throughout the fiscal year, such as general office supplies. In certain situations, a department may be allowed to spend more than its departmental budget, as it may have some restricted funds that can be used for that purchase, or it may oversee several department budgets, and one of the other budgets has a surplus. These are dealt with individually, and the Assistant Controller of Financial Planning and Analysis will work with the accounts payable staff, Assistant Controller of Finance Office, and department personnel to work out an appropriate solution.

Approvals - Invoice/RFC/PO Requisition/Purchasing Card

General:

• If the transaction is $25,000 or greater, the Cost Center Manager provides final approval
  • If a Program, Grant, Project, or Gift is on the transaction, it will be routed to the individual(s) assigned to the Program, Grant, Project, or Gift
• If the transaction is $25,000 or greater, it will then move to the appropriate Assistant Vice President/Associate Dean/Executive Director
• If $150,000 or greater, it moves to the appropriate Vice President/Dean and
• If $500,000 or greater, it moves to the Treasurer
• The purchase of products and services of $3,500 or more using federal grant funds also requires the approval of the Office of Sponsored Research.
• Any travel reimbursements require the signature of a supervisor. NOTE: Travel Reimbursements are a manual process using the Request for Check (RFC) form, a copy of which is in the Workday Resources application on the Workday homepage.

Purchase Order Requisitions (in addition to the above)

• Purchases $25,000 or greater require a PO except for:
  • Reimbursements to employees
  • Professional services (i.e., attorneys, engineers, architects)
  • Petty cash
  • Postage
  • Prizes and honorariums
  • Subscriptions
  • Memberships and dues
  • Registration
  • Inter-college payments
• Federal Grant purchases require at least two bids unless sole sourced per the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (or uniform guidance).
• Planned purchases of $50,000 or greater require two supplier quotes/estimates. If two supplier quotes/estimates are not provided, the following options are available:
  • Substitute Quote/Estimate Option:
    • A Requisition Quote/Estimate Form is required to be completed OR
    • The documented analysis that was performed to determine the chosen supplier.
      • For example, if the analysis was performed over the phone, the conversations should be documented and attached to the PO with a summary of the decision made. PO amounts should be estimates.
      • TIP: It’s better to estimate higher than lower, as any differences greater than 10% of the approved amount require a change order.
  • Sole Source Option: A purchase of a commodity or service that is noncompetitive in price, specifications, use, or scope of work. The commodity or service is proprietary; no other supplier is qualified or willing to meet the specified requirements. Attach the Single Source Justification Form to the requisition.
  • Contract Option: Create a Supplier Contract in Workday, attach the Preferred Supplier Form to the contract, and submit it. Once approved, a Purchase Order can be created from the contract, or a Supplier Invoice can be created from the contract if a Purchase Order is not needed. NOTE: If there is an executed/signed contract, the Preferred Supplier Form does not need to be attached.
• Assistant Controller Finance Office approves POs up to $50,000
• Controller approves POs $50,000 and over

Purchase Orders

Once the purchase requisition is approved, a purchase order will be issued, and a notification is sent to the requester. The system provides a Purchase Order number that becomes the reference number when invoices are applied against the Purchase Order.

All information you wish to include on the purchase order should be included on the purchase requisition. All purchase orders are sent to the suppliers. The supplier is instructed to send the invoice to the Finance Office address or email it to Invoice as instructed on the purchase order. This is done so that we receive discounts, if possible, on any invoices that have terms, i.e., a 2% discount if paid within 10 days.

A single purchase order may be charged to more than one account provided that the accounts are appropriate classifications for the type of expense made.

Processing Invoices for Items Ordered With A Purchase Order

A purchase transaction is complete only after the goods or services have been received, and the supplier has been paid. When a Purchase Order is issued, the department assumes responsibility for ensuring the supplier is paid within an appropriate period. Funds are properly encumbered and set aside to pay these obligations by issuing a Purchase Order through Workday before the purchase. The encumbrance is not a contract but ensures the required funding is available. Accounts Payable pays invoices for the College for external supplier purchases, employee reimbursements, and payments to independent contractors.

When an invoice is received by the Finance Office, a copy of the invoice will be forwarded to the requestor for input into Workday using the Supplier Invoice Workbench task. For requisitions that use the Punchout option, invoices are directly loaded into Workday, requiring no invoice input by the requestor. If the PO can be closed, please indicate this in the comment or send a REQUEST TO CLOSE to the Expense Procurement Specialist.

Payment Terms & Penalties

Every supplier's invoice is due for payment within some period after it is generated. This is normally computed as the number of days after the invoice is received. The College's standard for payment of supplier invoices is within thirty (30) days after receipt of the invoice. This is referred to as payment terms of ‘NET 30.’ The College must pay its obligations promptly. Failure to comply with payment terms often leads to:

• Credit hold, where a supplier refuses to fill any subsequent orders until the outstanding obligation has been paid.
• Less favorable terms, where a supplier charges a late payment penalty or even demands payment in advance.
• Higher prices on future purchases.

A supplier may impose one or more of the above actions on the entire College, even if the dispute involves only one department. The Accounts Payable department does what is necessary to prevent any of the above while acting within sound financial controls. Departments must ensure that purchases are properly accounted for in Workday.

The College is NOT exempt from Sales Tax on equipment, hotel rooms, or restaurant meals.

Disbursement Process

Once any discrepancies have been rectified, the checks are then printed. Typically, there are check runs and check disbursals every day of the week. The checks are printed with an automatic signature(s) hard coded into the system. The Finance Office also offers a direct deposit service to employees and suppliers. A separate payment run occurs for direct deposits, and the files are transmitted to the bank for credit to the appropriate bank accounts.

Requesting New Suppliers

If a supplier needs to be added to Workday, the requestor must complete a Supplier Request in Workday. This process is administered by Accounts Payable, who will first verify whether the supplier already exists in the system and may also check several other sources (the Federal ‘do not use’ list, US Treasury, etc.) before deciding whether to add a supplier. A signed W-9 is required to be obtained from the supplier.

Additional Special Approvals

Restricted Commodities. Purchasing certain commodities, such as any radioactive element or large pieces of equipment, may require special steps and/or additional approval from the Dean’s Office before it can be acquired.

System Access

Each department is responsible for identifying who can access Workday to obtain general ledger activity reports (budget versus actual). After receiving a request for access to the accounting system through the Create Request task in Workday, the Director of Finance Operations is responsible for setting up the appropriate personnel and maintaining access.

Enforcement/Consequences

Employees must be authorized to commit the College’s resources to a purchase. College faculty and staff are responsible for adherence to all sections of the policy. Examples of improper use of purchasing authority include:

• Stringing or splitting a large purchase into two or more smaller orders to avoid bid requirements and approval.
• Using an inappropriate chart string or account code.
• Conflict of interest and/or poor ethical conduct.
• Improper, misleading, or deceptive use of Sole Source justification, bid documentation, or related information. Departments and individuals will be subject to disciplinary action for failing to handle purchases according to policy and procedures. This may include:
  • Elimination of delegated purchasing authority for the individual or department
  • Employee may be recommended for discipline through Human Resources

Environmental Awareness

Environmental impact should be considered in purchasing decisions when appropriate. Pomona College encourages departments to consider using products and services that impact the environment less than competing products when it is a good, best-value decision to do so. A good, best-value decision based on a thorough total cost of ownership analysis considers the initial cost of the item as well as factors such as:

• Energy Efficiency. Purchase equipment that is Energy Star-rated (or, if there is no Energy Star rating, equipment that is highly energy efficient). Energy Star is a program helping businesses and individuals protect the environment through superior energy efficiency.
• Shipping Materials. Purchase products that are shipped in containers that are returnable or reusable and made from recycled content (i.e., cardboard boxes). Also request bulk packaging when multiple items are ordered for delivery at the same time.
• Recycled Content. Purchase products made with recycled content suitable for the intended use. Look for a high percentage of post-consumer content. ‘Post-Consumer’ is material that has served its intended purpose and has been discarded for disposal or recovery by a business or consumer. Other recycled content includes post industrial wastes which are by-products of a manufacturing process that would normally not be reused in the process.
• Other. Environmental performance of the supplier and/or producer should also be considered, such as waste prevention, waste reduction, pollution prevention, clean air and water programs, re-use of materials, minimization of scrap material, and any other green factory initiatives, etc.

Purchasing Goods Through Auctions

In general, the College discourages the use of web auctions and auction houses to make regular purchases of goods and services. Occasionally, however, hard to find or specialized items may become available for purchase through an auction process. For those cases, the College guidelines are outlined below:

• Make certain that the auction house/website offers protection against purchasing defective or erroneously described merchandise. For all auction purchases, the department should ensure that the auction house/website allows for refunds, if necessary, after a physical inspection of the goods received.
• The department should document and understand fully all warranties and other protections offered by the seller or auctioneer.
• Documentation needed for ALL auction purchases:
  • Description of the goods being purchased
  • Explanation of why the item needed to be purchased through an auction
  • Final cost
  • Copy of the purchase confirmation
  • List or market prices from other sellers of comparable items
  • Documentation describing all warranties
• For purchases on web-based auction sites, the College P- Card should be used for payment except:
  • For non-web-based purchases less than $25,000, a Supplier invoice should be created in Workday
  • For any purchases of $25,000 or more, a requisition should be issued which will result in the issuance of a Purchase Order.