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Purchasing Basics
This Purchasing Basics document and related links are available to assist authorized
faculty and staff with the purchase-to-pay process at Penn.
Questions and/or requests for additional information are to be directed to
staff members in Purchasing Services.
Purchasing Authority
With delegated purchasing authority, Penn faculty and staff are responsible for ensuring
that their procure-to-pay related duties are executed in an
efficient, effective, professional, and ethical manner and accountable for ensuring that
their purchase activity is accurate, necessary, and in accordance with all applicable
laws and University Financial Policies. For BEN Buys
Purchase Order Managers and
Requisitioners, user specific duties and responsibilities are clearly defined in the
BEN Buys User Roles
and Responsibilities.
Signature Authority
Unless authority has been granted to an individual by the Trustees, only the
Purchasing Services department has the authority to enter into a purchase agreement
or otherwise obligate the University. A properly executed purchase order constitutes
a contract that is binding on both the University and the supplier. Some suppliers
may also require accompanying terms, conditions, agreements or forms. In all cases,
these agreements are to be signed by an authorized Purchasing Services
staff member in advance of any commitment to purchase
to a supplier. All documents without an authorized signature will be considered
invalid and not binding upon the University.
Purchase Order Terms and Conditions
The Purchase Order Terms and Conditions and the
purchase order (collectively,
the "Agreement") shall constitute the complete and exclusive statement of
the Agreement between University and an authorized BEN Buys supplier with respect to
the purchase of any products or services. To the extent that supplier terms and
conditions conflict with the University of Pennsylvania Purchase Order Terms and
Conditions, the latter shall control. Purchasing Services is the only organization
that is authorized to modify or agree to changes to the University's standard purchase
order terms and conditions.
Authorized Buying Methods
In accordance with University
Procurement
& Disbursement financial policies, all purchases from external suppliers must be
conducted via a University purchase order
or purchasing card. Authority to use these
authorized buying methods is
delegated to designated BEN Buys Purchasing System
users and MasterCard Purchasing Card cardholders. The
Buying Decision Chart provides guidance
to faculty and staff to determine the appropriate buying method and budget object code
for required purchases.
Supplier Selection
Faculty and staff are required to use the
Supplier Selection Guide
to determined the appropriate supplier for the required purchase. University
preferred contract
and Penn Marketplace suppliers are to
be used whenever and wherever possible to ensure the University leverages its
buying power and receives the "least total cost" when purchasing products
or services from an external supplier.
Purchasing Services welcomes suggested suppliers for required products and services;
however the final decision to add a supplier to the BEN Buys supplier database is the
responsibility of Purchasing Services.
Competitive Bidding
A minimum of three formal written quotations are required for transactions with an
aggregate total cost of $5,000 in order to meet the University's
competitive
bidding requirements. Exceptions to the
competitive bidding requirement are limited
to purchases from University preferred contract
and Penn Marketplace suppliers.
Purchasing Services reserves the right to obtain additional competitive quotations
regardless of the purchase order dollar value whenever, in its judgment, the quotations
may best serve the interest of the University.
The competitive bidding requirement will be waived by Purchasing Services if a there
is only one supplier capable of providing an product or service, and therefore it is
not possible to obtain competitive bids; or, where there are multiple sources of supply,
but for specific reasons the product or service must be purchased from a specified
supplier. The BEN Buys requisitioner must submit
a Request to Waive the Bidding Process document to justify such purchases.
Supplier Payment
The timely payment of purchase order invoices is
a priority for the institution and a critical success factor for Purchasing Services
contracting and cost containment initiatives. Payment of supplier invoices according
to purchase order payment terms enables Purchasing Services to negotiate and award
best-in-class supplier discount pricing agreements.
Suppliers are directed to submit all purchase order invoices directly to
Accounts
Payable for processing. At no time is a Penn faculty or staff member, or
student permitted to request a supplier to submit a purchase order invoice directly
to the ordering department instead of the Accounts Payable department.
BEN Buys users are required to proactively manage
and respond to BEN Alerts to ensure timely payment of supplier invoices.
Unauthorized Purchases
Only the Purchasing Services department has the authority to enter into a purchase
agreement or can otherwise obligate the University for Procurement Indebtedness.
Individual faculty and staff members are not authorized to sign on behalf of the
University, or to bind the University in any manner. At no time is a Penn faculty
or staff member, or student permitted to request a supplier to ship a product or
perform a service without prior issuance of an approved purchase order, verbally place
an order with an unapproved purchase order number, or verbally request a supplier to
add a product or service to an existing approved purchase order. Based on
contract law, individuals who do not have delegated authority, and who enter into
unauthorized agreements, may be held personally responsible for the cost of the
products or services purchased.
Sales Tax
The University is exempt from Pennsylvania state sales tax
for most purchases. Upon request, Purchasing
Services will furnish a copy of the University's tax exemption certificate for
purchase order or
purchasing card transactions that require a tax
exemption certificate. Purchasing Services maintains a list of states where the
University is exempt from sales tax.
On-Site Insurance Requirements
Under a variety of circumstances, outside organizations are required to provide evidence
of commercial general liability insurance and to name the University as an additional
insured to the organization's insurance policy in order to be permitted to conduct
business on University property. All such arrangements require a written contract or
agreement with the University. The Purchasing Department works with the
Office of Risk
Management to ensure that proper insurance requirements are in place before any
on-site work begins.
Conflict of Interest
Penn faculty and staff who act on behalf of the University of Pennsylvania have an
obligation to avoid activities or situations which may result in a
conflict of interest or the appearance of conflict of
interest. Employees must not use their University positions to influence outside
organizations or individuals for the direct financial, personal or professional benefit
of themselves, members of their families or others with whom there is a personal
relationship.
Gifts and Gratuities
In order to avoid a conflict of interest or the
appearance of a conflict of interest, at no time should an employee solicit or accept
gifts from a supplier or contractor or from a potential supplier or contractor.
Ordinary business courtesies, such as payment for a modest lunch are acceptable.
Gifts which are promotional items without significant value (less than $25.00), and
which are distributed routinely by the supplier to clients, are also acceptable.
Gratuities or gifts of money to an employee cannot be accepted at any time.
Personal Purchases
Purchasing Services will not facilitate or approve any transaction for purchases of
a personal nature. Purchase order
and purchasing card transactions containing items
which appear to be of a personal nature will be questioned by Purchasing Services.
Purchase Services will solicit the support of the
Office of Audit and Compliance
to investigate cases of inappropriate purchase activity.
A formal Employee Purchase Program is available
to faculty and staff for personal purchases from designated Penn contract suppliers.
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