Purchasing Procedures - General
Approval Date: 2019-02-19
Effective Date: 2019-02-19
Responsible Unit: Department of Financial and Administrative Services
1. METHODS OF ACQUISITION
1.1. The employees designated to control purchasing and payments for a unit have the responsibility to determine how the acquisition of goods and services should be made. The following methods are available depending upon the dollar value and, in some cases, the nature of the acquisition.
1.1.1. Purchase Orders (POs) are to be used for all purchases other than those made by Petty Cash or small, dollar value items purchased on Procurement Card. See Procedure for Using Purchase Orders for further information on the use of purchase orders.
1.1.2. Direct Pay Forms can be used only if the nature of the acquisition meets the guidelines as specified in the Procedure to Use Direct Pay.
1.1.3. The Procurement Card is to be used for all purchases meeting the procurement card guidelines in the Procedure for Using Procurement Card. Certain types of expenditures, such as travel and hosting, are not permitted to be charged to this card.
1.1.4. Petty Cash is available for purchases of $75 or less (including taxes). See Procedure for Using Petty Cash for details.
1.2 University orders by faculty/staff charged to their personal credit card are not to be permitted, except as allowed under the Procedure for Using Petty Cash.
2. PROCUREMENT VALUE GREATER THAN $500,000
2.1 A proposed Open Call for Bids with a value greater than $500,000 (exclusive of harmonized sales tax) must be reviewed by the Office of the General Counsel.
3. OPEN CALL FOR BIDS
3.2 Under these regulations an open call for bids is required for:
(a) goods with an estimated value of $10,000 or greater;
(b) services (excluding engineering and architectural services) with an estimated value of $50,000 or greater;
(c) engineering and architectural services with an estimated value of $100,000 or greater;
(d) public works with an estimated value of $100,000 or greater; and
(e) leases of space with an estimated contract value of $100,000 or greater.
3.2.1 The PPA excludes "professional services" from the definition of services. Professional services means the following services required by a public body:
i. legal services, and
ii. financial services relating to the provision of credit and instruments of monetary policy;
Please refer to the Guidelines for Procurement of Professional Services exempt from the Public Procurement Act.
3.3 All thresholds are CDN$; inclusive of all premiums, fees, commissions and interest, as well as delivery costs; and exclusive of harmonized sales tax. Estimated value shall be based on the entire length of the contract, including renewal options. If a legitimate estimate cannot be determined for a procurement, then an Open Call for Bids shall be issued.
3.3.1 If a single procurement includes a combination of goods and services, the unit shall determine the estimated value for each component and use the cost estimate for the largest component to determine the applicable threshold. For example: goods $10,000 + service $2,000 = $12,000 requires an Open Call for Bids as the largest component is goods in which a $10,000 value exceeds the Open Call for Bids threshold.
3.4 An open call for bids means a publicly-advertised invitation to suppliers to submit a bid, by electronic advertisement or written media, as per Section 7 of the PPR.
An open call for bids may be in the form of either an Invitation to Tender, or a Request for Proposals. Purchase orders cannot be broken down into more than one order to get each order value less than the established thresholds.
3.5 All other exemptions to an open call for bids are found in Section 6 of the PPR and, if used, are to be reported to the Public Procurement Agency in accordance with Section 32. Please refer to the Procedure for Open Call for Bids.
3.6 The University requires that all procurement comply with the PPA regardless of the funding source.
3.7 The Director of Financial and Administrative Services (The Director) is responsible to ensure that the University is in compliance with the PPA and PPR. This responsibility includes:
- Ensuring that all units are consistent in the application of the PPA and PPR in the purchasing function for which they have responsibility.
- Providing approvals as may be delegated to the Director by the President and the Board of Regents, in accordance with Section 29 of the PPR.
- Providing any type of assistance required by units in order that they may comply with the PPA and PPR efficiently and effectively. This includes provision of services related to development of open call for bids specifications, advertising, bid opening, bid evaluation and subsequent recommendations, and interpretation of the various sections of the PPA and PPR.
3.8 To ensure consistent application of these public procurement requirements, it is recommended that all purchases greater than the thresholds outlined in 3.1 be coordinated with the Department of Financial and Administrative Services' Tendering Clerk.
3.9 For those units issuing an open call for bids, FAS will supply a locked tender box in which bidders may place their bids.
4. LIMITED CALL FOR BIDS
4.1 University procurement is governed by the Government of Newfoundland and Labrador Public Procurement Act (PPA) and Public Procurement Regulations (PPR) 2018. Under these regulations a limited call for bids is required for (all thresholds are CDN$; inclusive of all premiums, fees, commissions and interest, as well as delivery costs; and exclusive of harmonized sales tax):
(a) goods with an estimated value less than $10,000;
(b) services (excluding engineering and architectural services) with an estimated value less than $50,000;
(c) engineering and architectural services with an estimated value less than $100,000;
(d) public works with an estimated value less than $100,000; and
(e) leases of space with an estimated contract value less than $100,000.
A limited call for bids requires the public body to either obtain quotations from at least three suppliers, or to determine a fair and reasonable price for the commodity based on recent market conditions.
4.2 Purchase orders cannot be broken down into more than one order to get each order value less than the established thresholds.
4.3 Quotations for all acquisitions of goods and services less than the Open Call for Bids thresholds must be obtained using the following guidelines.
Determine Fair Price
Services (excluding engineering & architectural services)
Engineering & Architectural Services
Lease of Space (Contract Value)
Quotations must be recorded on a Quotation Summary Log and a copy attached to the invoice when sent to FAS for payment processing.
4.4 For services valued between $10,000 and $50,000, with the exception of engineering and architectural services, and for Public Works valued between $20,000 and $100,000, the preferred approach is to obtain quotations from at least three suppliers. If this is not feasible, at least one quotation should be obtained and the price shall be fair and reasonable.
4.4.1 The invitation for a quotation must be sent to no less than three (3) selected suppliers. A summary of the quotations requested must be recorded on a Quotation Summary Log and attached to the invoice when sent to FAS for payment. Quotations must be kept in the unit's files for audit purposes in accordance with Section 6 Record Retention.
4.4.2 All invitations for a written quotation should identify to the vendor a time limit within which the quotation is expected to be returned and to whom.
4.4.3 The lowest quotation is usually accepted. In cases where other than the lowest quotation is accepted, explanations should be documented by the purchaser and approved by the Unit Head prior to placing the order.
4.4.4 Purchase of Computers and Related Supplies - If the University's IT Procurement Office (ITPO) can provide the required items they should be contacted as a potential supplier. Items may be purchased directly from the IT Procurement Office without obtaining alternate price quotations (as ITPO has already performed this function). However, if the purchaser obtains price quotations, then one of the required three price quotations must be obtained from the ITPO with consideration given to IT security needs. If the system configuration required is not available from the ITPO, the Quotation Summary Log must include written confirmation from the ITPO to that effect.
4.5 A Fair and Reasonable Price based on recent market conditions shall be established as follows:
- Obtaining two direct quotations and comparing the prices to determine whether competitive market forces have ensured that the prices are fair and reasonable;
- Obtaining one direct quotation and substantiating that it is fair and reasonable through reference to trade catalogues, price lists, or a recent acquisition price for similar goods and services;
- Obtaining one direct quotation and substantiating that it is fair and reasonable through the utilization of a rotational system, which consists of at least two suppliers, and which is monitored to ensure that prices are competitive, fair and reasonable;
- Obtaining one direct quotation and substantiating that it is fair and reasonable from an operations perspective where the goods or services are urgently required and a delay in delivery would negatively impact the operations of a department;
- Obtaining one direct quotation and determining that the price is fair and reasonable as a result of a limited supplier base in the area (consideration would be given to additional direct and administrative costs associated with acquiring the goods or services in another area); or
- Obtaining one quotation via shelf pricing or advertised price where a purchasing card is used for a low dollar value acquisition and a direct quotation is not generally provided and, in this instance, business should be rotated to ensure that prices are competitive and reasonable.
5. Purchases without Quotation
5.1 There are purchases up to the Limited Call for Bids thresholds (excluding taxes) where it is not feasible or practicable to obtain quotations due to the following circumstances:
- Commodity is available from a Public Body.
- Acquisition of a commodity is for the purpose of resale or for incorporation into a product for resale.
- An emergency or situation or urgency exists and an open call for bids cannot reasonable be made in time (obtain more than one quote where the situation allows).
- Only one available source (sole source), in the following circumstances:
- Compatibility with existing products, to recognize exclusive rights or to maintain specialized products that must be maintained by the manufacturer or representative;
- An absence of competition for technical reasons, no alternative or substitute exists;
- Supply is controlled by a statutory monopoly;
- Purchase of goods on a commodity market;
- Work on or about a leased property that can only be performed by the lessor without giving rise to a significant risk for the public body;
- Work to be performed under a warranty or guarantee;
- Winner of a design contest;
- A prototype or a first good or service to be developed in the course of and for a particular contract for research, experiment, study or original development, but not for any subsequent purchases;
- Original works of art; and
- Subscriptions to newspapers, magazines or other periodicals.
5.2 A full written explanation as to why quotations were not obtained must be provided on a Quotation Summary Log and kept in the unit's files for audit purposes in accordance with Section 6 Record Retention.
It is the responsibility of each unit to sufficiently document each procurement in order to provide audit evidence of their compliance with the Purchasing policy and related procedures. This evidence must be retained for a period of the previous six fiscal years plus the current fiscal year.
7. PPA REPORTING REQUIREMENTS
7.1 The Director of Financial and Administrative Services (The Director) is responsible to ensure that the University is in compliance with the PPA and PPR reporting requirements.
This responsibility includes:
- Reporting all Open Calls for Bid Opportunities, including Notices, Amendments and Cancellations to the Chief Procurement Officer as identified.
- Reporting awards of Open Calls for Bids within 15 days of contract award to the Chief Procurement Officer.
- Reporting exceptions to Open Calls for Bids within 15 days of contract award to the Chief Procurement Officer.