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Advancing Into Management Program Purchasing Goods & Services

Advancing Into Management Program Purchasing Goods & Services. June 2005. Presentation Objectives. What the purchasing policy is and why it’s important. What are the objectives of the policy? How do we achieve the objectives? Tools and support mechanisms.

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Advancing Into Management Program Purchasing Goods & Services

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  1. Advancing Into Management ProgramPurchasing Goods & Services June 2005

  2. Presentation Objectives • What the purchasing policy is and why it’s important. • What are the objectives of the policy? • How do we achieve the objectives? • Tools and support mechanisms. • Where to access additional information. www.procurement.utoronto.ca

  3. Background • Decentralized – No mandated suppliers • Objective: To ensure that goods and services are acquired in a manner that reflects effective use of resources while maintaining high legal, ethical and professional standards. • Responsibility to achieve this objective rests both centrally and at the local departmental level. www.procurement.utoronto.ca

  4. Role of Procurement Services • Information repository - www • Institution-wide supply agreements • Purchasing facilitation programs • Purchasing consulting services • Sourcing (RFx) • Contract review • Financing alternatives • Monitor compliance with Purchasing Policy www.procurement.utoronto.ca

  5. Purchasing Policy Objective • To provide a framework to • Ensure we get the best value • Meet legal and ethical obligations • Conduct a Fair, Open and Objective process www.procurement.utoronto.ca

  6. Ensure Optimum Value • Institution-wide supply contracts for broadly used commodities and services • Competitive quotes on purchases over $5,000 • Public tendering on major purchases and projects www.procurement.utoronto.ca

  7. Legal & Ethical Obligations Publicly-funded institution = rigorous standards • arms length business relationships • competitive bids/proposals • evaluation processes that are open to public scrutiny: - Objective - Consistently applied - Quantifiable - Transparent www.procurement.utoronto.ca

  8. Result… • Assurance that the public monies entrusted to the university by various contributors are expended in a manner that reflects effective use of resources in accordance with the highest legal, ethical and professional standards. www.procurement.utoronto.ca

  9. Where to focus? • 99% transactions <$25,000 = 40% total spend • 1% transactions >$25,000 = 60% total spend For transactions valued: <$25,000 – focus on transactional process used including control & monitoring >$25,000 – focus on individual transactions to ensure that appropriate competitive bidding process is applied www.procurement.utoronto.ca

  10. Purchasing Methods • Under $5,000 • Purchasing Card • Purchase Order (optional) • Certified Invoice (avoid) • Over $5,000 - Purchase Order • Travel – American Express / Expense reimbursement system www.procurement.utoronto.ca

  11. Web based access to university’s contracted suppliers • Fully integrated with financial system and funds management • Most efficient process - Saves up to 90% time and effort • Locally defined business rules • Use for: • Lab Supplies Equipment Chemicals • Office Supplies Computers Radio nucleotides • More… MRO Supplies, Furniture, and UofT Bookstore www.procurement.utoronto.ca

  12. No cash required • Purchasing Credit Card • Why use it ? • What do we use it for ? • Control and monitoring roles • Administrative processes www.procurement.utoronto.ca

  13. Purchasing Card • Used for University purchases: • Low value, • Frequently purchased commodities & services • Purchases less than $5,000 (with some exceptions) www.procurement.utoronto.ca

  14. Purchasing Card Benefits • Low administrative burden • Convenient • Reduced requirement for petty cash • Charges recorded in FIS next day • Transaction detail capture www.procurement.utoronto.ca

  15. Purchasing Card:Why not for Travel? • Requires “one-up” approval • Canada Revenue Agency requirement • Additional scrutiny appropriate Alternative: American Express Corporate Card • No annual fee, free insurance: Life, Flight delay, baggage loss, LDW for car rental; 45-day grace period www.procurement.utoronto.ca

  16. Purchasing Card –Administrative Roles & Responsibilities • Cardholder • Phone, fax, present or place on-line order • Reconcile monthly statement • Forward statement invoice/sales slip to departmental administrator • Departmental Administrator • Conducts monthly reconciliation of payments • Files back-up documentation www.procurement.utoronto.ca

  17. Department Level of Responsibility Under $5,000 • maintain audit trail. $5,001 - $25,000 • maintain audit trail • documented competitive bids • Purchase Order created by Business Officer www.procurement.utoronto.ca

  18. RFPs, RFQs, RFIs, Tenders • What are they for? • What are the advantages? • What are the disadvantages? www.procurement.utoronto.ca

  19. Higher Value Purchases • Over $5,000 – multiple quotes required • “Sole sourcing” exceptions • Highly specialized scientific equipment • Unique specifications with only one supplier • Request for Quotation (RFQ) – specifications known; only variable is price • Request for Proposal (RFP) – desired outcome known; variety of means to achieve outcome www.procurement.utoronto.ca

  20. Competitive Solicitation Transaction Levels & Authority Purchase Process Requirements Public RFP or Tender call Size of Authority to Invited RFP Verbal Purchase Purchase Written or prequalifying issue purchase Tender call Transaction Order Quotes Quotes statement order P.O. Not req'd use P-card Up to $5,000 Optional Optional No No Budgetary Unit $5,001 to $25,000 Yes Yes Optional Optional No Budgetary Unit $25,001 to Procurement Services $100,000 Yes - Yes Optional No $100,001 to Procurement Services $500,000 Yes - - Yes Optional Procurement Services Over $500,000 Yes - - - Yes www.procurement.utoronto.ca

  21. Consulting, Contracts Engaging consultants • < $25K/yr - Head of budgetary unit • > $25K/yr - Dean or V.P. approval • Note: If consultant is employee of UofT, payment must be processed through HRIS. To determine whether employee relationship exists:http://www.utoronto.ca/hrhome/incomtax.pdf Executing Contracts • Contact Procurement Services at the outset – contract vetting, supplier vetting www.procurement.utoronto.ca

  22. Sole Sourcing Technical compatibility Only one supplier, no substitute exists Unforeseeable urgency Honour guarantees, warranties Procure a prototype Competitive Solicitation Request for Quotation: price is sole selection criterion Request for Proposal: desired outcome known, means and cost to achieve may vary; multiple selection criteria Procurement Methods www.procurement.utoronto.ca

  23. Scenario Discussion • The Freebie • The Offer You Can’t Refuse • The Convenient Resource • The Good, the Bad and the Obstinate www.procurement.utoronto.ca

  24. Demo • Simple purchase • Purchase with approval • Goods receipt Demo link www.procurement.utoronto.ca

  25. Where to Get More Information • Your Business Officer • Procurement Services • www.procurement.utoronto.ca • Purchasing Policies • “How-to” Guides • Pcard and travel card applications • Vendor lists with links to web sites • On-line forms • Frequently Asked Questions • Departmental Contact information www.procurement.utoronto.ca

  26. The End Any questions? www.procurement.utoronto.ca

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