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About the Purchase Order

Access to the BEN Buys Purchasing System enables authorized faculty and staff to purchase required products and services from external suppliers in accordance with University financial policies, the BEN Financials Commodity Matrix, and any School or Center specific internal procedures.

Legal Terms and Conditions

There are a number of implications that need to be understood by all authorized BEN Buys users who approve University purchase orders. Every approved University purchase order transmitted to a University BEN Buys approved supplier creates a legal contract that binds the University in accordance with the University purchase order terms and conditions. The University Purchase Order Terms and Conditions document states that the general terms of the contract between the University and the supplier, and is automatically incorporated by reference in each purchase order. The Purchase Order Terms and Conditions document has been created to protect the institution as a purchaser of products and services, and should enable the entire user community to feel comfortable when conducting business by purchase order. As a condition of doing authorized business with Penn, all suppliers listed in the BEN Buys Purchasing System approved supplier database, have indicated in writing, their prior acceptance to Penn's purchase order terms and conditions. In certain cases, when approved in writing by a Purchasing Services officer, the University may agree to modified terms and conditions if deemed in the best interest of the University.

The following are a number of factors that authorized BEN Buys users need to know about the use of a University purchase order:

  1. Supplier acceptance of a University purchase order is effective only:
    1. upon actual shipment of the product or performance of the services outlined in the purchase order, or,
    2. issuance of a written acknowledgement by the supplier

    When a purchase order is issued, there is no law binding the supplier to deliver the products or perform a service even if you have received verbal confirmation from the supplier. Therefore, on any purchase order where delivery is time-critical, a written or faxed acknowledgement should be requested from the supplier. To enter a note to a supplier, the BEN Buys user must use "Add Attachments - Attention: Supplier".

    This request does not normally need to be followed on shipments of stock products from Penn preferred contract suppliers who typically ship upon receipt of the purchase order.

  2. If specific requirements or specifications are required for the purchase order, they must be incorporated in the purchase order document via "Add Attachments - Attention: Supplier" field (e.g.: "University specifications titled ________ and dated ________ are incorporated by reference").

    If the supplier presents a set of specifications or a quotation (even promotional materials), containing relevant information about the product(s) or service(s) to be purchased, in most cases, that information must also become part of the purchase order and be specifically incorporated in the purchase order (e.g.: "Supplier's proposal/quotation #________ dated ________ are incorporated by reference"). The purchase order requisitioner, or appropriate PO Manager, must forward all relevant supporting documentation for a purchase orders with a total dollar value of $5,000 or more to Purchasing Services for review and final approval.

  3. At no time is a University faculty or staff member authorized to sign a supplier document. All supplier quotations, contracts, terms and conditions, or any other document related to a purchase and require a signature from a University representative must be forwarded to Purchasing Services for review and signature.

    Supplier documents are typically written to solely protect the rights of the supplier. Until such time as an authorized officer (Purchasing Services) of the University agrees in writing to other supplier terms and condition, Penn's Purchase Order Terms and Conditions will be the governing terms and conditions of the purchase transaction. If a supplier presents a document for signature, do not sign the document, forward it to Purchasing Services for review, and if appropriate, final execution.

  4. Penn's Purchase Order Terms and Condition document specifies that the risk of loss during the transit remains with the supplier. If you receive damaged products, immediately contact the supplier in accordance with University Receiving & Inspecting Purchased Goods procedure (see below). Do not put damaged products into use. Once damaged products are put into use, it becomes extremely difficult to get a satisfactory resolution with the supplier. If the shipping container shows visible external damage, do not accept the delivery and immediately contact the supplier.
  5. Cancellation of an approved University purchase order must be timely and in accordance with the University Purchase Order Cancellation Procedure). The supplier has protection under the governing law against improper termination. The only official way to cancel a University purchase order is to first verbally inform the supplier of your intent to cancel a purchase order for products that have not been shipped or services that have not been preformed.

    If the product(s) has / have not been shipped, inform the supplier representative that the purchase order will be cancelled and not to ship any product(s). Be sure to document the date and name of the supplier representative that you spoke to regarding the pending cancellation.

    If the product(s) has / have been shipped, request a formal Return Authorization Number and return the product(s) to the supplier as per the supplier's return instructions.

Purchase Order Approval

Purchase order with a total aggregate dollar value less than $5,000 are reviewed by the approved PO Manager and final approval according the Purchase Order Approval Hierarchy for each School and Center.

For purchase orders with an aggregate dollar value of $5,000 or more, the purchase order is routed electronically to Purchasing Services for final review and approval by the appropriate commodity Sourcing Manager. Formal purchase order approval criteria is used to approve all purchase orders that meet all established purchasing requirements, within one business day. Purchase orders referencing a message such as "attachments to be sent to Purchasing Services" in the Notes to Approver field are held for up to three business days. If the attachment is not received within three business days, the purchase order is rejected with a note stating the reason for the rejection. Purchase orders that do not reference a note of forthcoming documents are rejected upon receipt with a note stating reason for rejection.

Competitive Bidding Requirements

University financial policy #2308 requires competitive bids for all purchases with an aggregate value of $5,000 or more. Normally, a minimum of three bids from competent sources of supply are required to satisfy the University's competitive bidding guidelines. Faculty and staff are empowered to solicit bids/quotations from competent suppliers; however, Purchasing Services staff members are available to assist in the solicitation of competitive bids.

Supplier Purchase Order Contracts

All supplier purchase related contracts are to be sent to Purchasing Services will review and signature. Purchasing Services will attempt to review and sign supplier contracts within one (1) business day. However, due to the complexity of the contract or contract terms, Purchasing Services may require up to three business days to review and sign the supplier contract. All supplier contracts forwarded to Purchasing Services must reference an official University purchase order number.

Due to the complexity of the contract, or assistance required from the Office of General Counsel, it may take longer than three business days to review and sign a supplier contract. In these cases, the Sourcing Manager will notify the PO Manager that the contract review will take longer than three business days.

Supplier Purchase Order Equipment Leases

The Office of the Treasurer has the authority and responsibility to determine the most appropriate means of acquiring equipment, i.e., purchase, lease or rental and review and must approve all requests for external leasing prior to the creation of a University purchase order.

Purchasing Services will attempt to approve lease requests within one business day. However, due to the complexity of the lease or lease terms, Purchasing Services may require up to three business days to review and sign the supplier lease agreement. All supplier leases forwarded to Purchasing Services must reference an official University purchase order number.

Due to the complexity of the contract, or assistance required from the Office of General Counsel, it may take longer than three business days to review and sign a supplier contract. In these cases, the Sourcing Manager will notify the PO Manager that the lease review will take longer than three business days.

Responsibility for Receipt of Goods

The faculty or staff member receiving and signing for the products is responsible for inspecting products upon receipt while the delivery driver is still present because this is the most reasonable time to determine whether the correct number of conforming goods arrived without damage.

The party receiving the shipment should follow these steps:

  1. Inspect the delivery for two things:
    1. Damage
    2. Conforming products
  2. Check the products against the packing slip to confirm that the description of the products and the number of items shipped match.
  3. If damages are apparent on the carton, request the delivery driver wait until the products are unpacked and inspected further.
    1. Make a joint inventory and examination of the contents with the delivery driver.
    2. Make a detailed description of any problems on all the freight paperwork. When documenting damage, please be specific, use terms such as shortage, scratched, bent, dented, or broken.
  4. Compare the delivered products, the packing slip and the purchase order if available.
  5. Check for shortages or overages.
  6. If shortages or overages occur, request the delivery driver wait until the products are inventoried and inspected further.
    1. Make a joint inventory and count all of the contents with the delivery driver.
    2. Document any discrepancies on the delivery receipt before accepting and signing for the products.
  7. Have the driver sign the paperwork to verify the item discrepancies or damage.
  8. Be sure to retain a copy of the paperwork for your records.
  9. Initiate a claim for any damage or non-conforming goods identified in the inspection.

Purchase Order Invoice Payment

The University's Accounts Payable department is responsible for processing supplier payments against approved and reserved BEN Buys purchase orders in accordance with agreed upon payment terms (usually Net 30 Days). The following is information that BEN Buys users may find helpful regarding the payment of purchase order invoices.

  1. All supplier purchase order invoices must be submitted directly to Accounts Payable. University faculty and staff are not permitted to direct a supplier to submit original purchase order invoices to the order department.
  2. A University check is produced for purchase order suppliers within thirty (30) days from the date of the supplier invoice date, provided the invoice was received by Accounts Payable and is not "on hold" in BEN Financials.
  3. When responding to Oracle Alerts, the BEN Buys user must do one of the following:
    1. Enter a receipt for a Quantity Received Hold.
    2. Place a Hold Markup through MarkView with a detailed explanation if you would like to cancel the invoice.
    3. Place the PO Creator Approved Markup through MarkView to release the following holds: maximum total, quantity ordered and items not ordered.
    4. E-mail Accounts Payable for all finally closed purchase orders and provide a detailed explanation if you would like the invoice cancelled, or if you would like the payment released to the supplier. If you do not have access to Markview, you may email Accounts Payable to release the invoice from hold, cancel the invoice and provide a detailed explanation as to why, and final close purchase orders.

After-the-Fact Transactions

An "After-the-Fact" purchase transaction is a purchase that has been made by a faculty or staff member without prior issuance of an approved purchase order or use of a Purchasing Credit Card, and then, an attempt is made to initiate a purchase order after-the-fact in order to pay the supplier invoice. Such a transaction violates University financial policy #2301. School or Center senior financial officers will be advised of employees in their area who place orders for products and/or services without prior approval of a University purchase order or Purchasing Credit Card, and in turn, create financial liability and risk for the institution.

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