Purchase Order Approval Process for External Third Party Equipment Leases

University Financial Policy #2311 - Procurement of Equipment requires the Office of the Vice President for Finance/Treasurer to determine the most appropriate method of acquiring equipment, i.e., purchase or lease (capital & operating). Upon appropriate approval, purchase orders for external third party supplier leases are to be forwarded to Purchasing Services for final review and approval. All supporting lease documentation, including the original copy of the supplier lease contract, supplier quotations and/or proposals are to be forwarded to Purchasing Services for review and final approval.

The Approval Process Flow

All incoming equipment lease purchase orders are received by the PO Router and forwarded to the appropriate Sourcing Manager based on assigned commodity responsibilities. The original copy of the supplier lease contract, along with all required supporting documentation, must be submitted to Purchasing Services via e-mail or fax directly to the attention of the appropriate Sourcing Manager.

University financial policy requires that any purchase (included external third party equipment leases) with a total aggregate cost of $5,000 or more must be competitively bid. Lease of equipment from preferred contract suppliers and Penn Marketplace suppliers, regardless of dollar value, are exempt from the University's competitive bidding requirement. In the absence of competitive bids, a reasonable request to waive the competitive bidding process may be submitted by the ordering department. It is the responsibility of the Sourcing Managers to exercise good judgment when reviewing and approving requests to waive the competitive bidding process.

Once the purchase order and supplier lease contract are received in Purchasing Services, the Sourcing Manager is responsible for reviewing the terms and conditions of the lease contract. The Sourcing Manager is responsible for working with the supplier and ordering department to address and resolve any lease contract language issues. Sourcing Managers will consult with the Office of the General Counsel as required for specific terms and conditions.

Conditions for the timely approval of a supplier lease contract:

1. Due to the volume and complexity of the supplier contracts received by the department, Purchasing Services may require up to three (3) business days to review and approve a supplier lease contract. The review and approval period may take longer than three days based on unique business requirements or supplier terms and conditions. The Sourcing Manager will advise the requisitioner if the approval period will take longer than three (3) business days.
2. Emergency supplier lease contract requirements will be processed on case-by-case basis.
3. The Chief Procurement Officer, Director of Purchasing, or their designee will sign all fully executed external third party supplier lease contracts.
4. At no time will a supplier contract be approved and signed by Purchasing Services without prior issuance of an approved BEN Buys purchase order.

The original purchase order is to be created for the sum of the lease payments for the current fiscal year. Thereafter, it is the responsibility of the ordering department to submit a new purchase order for each subsequent fiscal year to cover the full term of the supplier lease contract. It is the responsibility of the BEN Buys Requisitioner/PO Manager to reference the original supplier lease purchase order number in the "Notes to the Approver" field for all subsequent year's purchase orders.

Upon final execution of the supplier lease contract, Purchasing Services submits the original copy of the fully executed supplier lease agreement to the supplier. A copy will be sent to the ordering department and filed in the department's Master Lease Agreement file.