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University of Maryland Policy and Procedures for Delegated Purchasing Authority

Consolidated USM and UMD Policies and Procedures

VIII-3.10(B) UNIVERSITY OF MARYLAND POLICY AND PROCEDURES FOR DELEGATED PURCHASING AUTHORITY

(Approved by the President September 9, 1997; Revised May, 2000)

  1. POLICY
    Effective May 1, 2000, University departments were allowed to apply for delegated purchasing authority to make purchases up to $5,000 per transaction (including shipping costs). The tools available to make these purchases include the Purchasing Card and Delegated Small Procurement Orders. Master Contract Releases are available to University departments as well, and these can be used for any dollar value procurements. This delegation is in accordance with the Code of Maryland Regulation Section 21.05.07 and subject to the restrictions set forth below. The Director of Procurement and Supply reserves the right to restrict or revoke delegation to specific departments as circumstances warrant.
  2. PURPOSE
    The objective of the delegated authority is to satisfy needs for goods and services that fall within the delegation faster and more efficiently.

    The Purchasing Card is the University's primary tool for purchases up to $5,000. The purchasing card is to be used to purchase authorized goods and services required for daily departmental operation. Procurement and Supply's Delegated Purchasing Manager is available for assistance.

    The Delegated Small Procurement Order (SM) allows the purchase of authorized goods and services up to $5,000 on the "SM" series of order forms when the purchasing card cannot be used. This should be extremely rare.

    A Master Contract is a formal agreement between the University and a vendor to supply goods and/or services, at a published price or basis of pricing, for a specified time period. Purchases can be made directly from the contract vendor without further effort to find competitive vendors or prices, since that process has already been completed.

    Master Contract Releases allow the purchase of specified goods or services covered by a Master Contract directly from the contract vendor. Only those goods and services specified on the Master Contract may be purchased through the Master Contract process. Purchases from the Master Contract may be made up to $5,000 with the Purchasing Card or by using the Master Contract Release Form that has no dollar limit assigned. The SM Delegated Small Procurement Order is not to be used in conjunction with Master Contracts.

    To receive authorization for delegated authority, Departments should obtain and complete Procurement Authorization Cards, available from the office of Procurement and Supply. The Department is required to provide the signatures of individuals authorized to issue SM Delegated Small Procurement Orders and Master Contract Releases to Procurement and Supply. Authorized signatories may then write to Procurement and Supply, on their department letterhead, to obtain batches of pre-numbered order forms.

    These Delegated Authority tools are designed to enable prompt response to departmental needs. These tools are to be used to acquire necessary items and are not to be used to tie up dollars by building up inventories of small dollar items.

    "Stringing" orders (splitting over $5,000 needs into small portions to bypass submitting requisitions to Procurement) is also prohibited.

  3. PROCEDURE
    1. LOCATING SUPPLIERS
      1. State law requires that the campus support the State of Maryland socioeconomic programs by issuing orders to State Use Industries, Blind Industries, certified sheltered workshops, certified minority vendors, and small vendors as opportunities exist. For assistance or clarification regarding any of these programs, contact Procurement and Supply buyers. A listing of state certified minority preference vendors is available from Procurement in hardcopy or on Procurement and Supply's Website at www.purchase.umd.edu.
      2. Before purchasing new equipment, departments should first screen other departments to determine if they can share equipment or check to see if appropriate used equipment is available from campus surplus through Terrapin Trader.
      3. Before placing orders with outside vendors, departments should also consider products and services available on campus, i.e., office supplies, photocopying, travel services, and printing (see restrictions section related to printing).
      4. Competition is not required when purchasing under the $5,000 delegated authority threshold; however, users are encouraged to seek all available discounts.
      5. Purchases from University employees and members of their immediate families are generally prohibited.
      6. PURCHASING CARDS, SMALL PROCUREMENT ORDER FORMS AND MASTER ORDER RELEASE FORMS SHOULD BE KEPT IN A SECURE PLACE TO SAFEGUARD FROM UNAUTHORIZED USE.

    For all Purchasing Card transactions, a Transaction Log, reconciled Purchasing Card statement and all required documentation are to be maintained in a central location within the department. Numerical sequencing of SM and Master Order forms is to be maintained. A sample order log form is available from the Department of Procurement and Supply.

  4. RESTRICTIONS
    1. Purchases of certain categories of goods and services are restricted by State law, regulations or policy so that they may not be purchased with purchasing cards or delegated procurement orders. They are:
      1. purchases requiring the signing of vendor's agreements, contracts, or other vendor documents. For these kinds of purchases, use a purchase requisition and send your requirement to Procurement and Supply.
      2. alcoholic beverages, gifts, flowers, or other expressions of sentiment.
      3. alterations to University buildings, building equipment, or building systems. For these kinds of purchases, contact Facilities Management.
      4. two-way radios. For these kinds of purchases, use a purchase requisition along with a telecommunications equipment and approval form.
      5. furniture. Office furniture purchases to other than State Use Industries (SUI) are to be submitted to Procurement and Supply on a long form requisition. State law requires furniture to be purchased from SUI if they can meet the need. SUI does accept the Purchasing Card and Small Procurement Orders. The State Use Industries Showroom in the Physical Distribution Center and the furniture buyer are available for assistance.
      6. printed forms. For these kinds of purchases, use University Printing Services or State Use Industries (State use Industries accepts the Purchasing Card). The printing buyer is available for assistance.
    2. Additional restrictions apply to the purchasing card only. These include:
      1. All travel related purchases (airlines, transportation services, automobile rentals, unincorporated service providers)
      2. Amusement and entertainment (motion picture theaters, bowling alleys, betting, golf, recreational services)
      3. Liquor and restaurants
      4. Lodging (hotels, motels) Exception: The card may be used to reserve a meeting space in a hotel, but shall not be used for lodging.
      5. Personal service providers (financial institutions, securities brokers, timeshares, laundry, photographic studios)
    3. Food and catering purchases are authorized within the delegated authority. Document the name, purpose, and date of the function, as well as the attendees and cost breakdown by meal.
  5. SHIPPING AND RECEIVING
    1. Departments have an option regarding the shipment of goods purchased under delegated authority. Goods may be shipped to Central Receiving or delivered directly to the department's University address.
      1. When using the Purchasing Card and shipping through Central Receiving in the Physical Distribution Center, instruct the vendor to identify the package as a "Purchasing Card Purchase" and include the cardholder's name. Central Receiving will deliver the goods to the department when purchased with the purchasing card, but all payment and documentation requirements are the responsibility of the cardholder.

        Should you want to ship through Central Receiving, use this address:

        University of Maryland
        Central Receiving
        Paint Branch Parkway, Building 383
        College Park, Maryland 20742

        Central Receiving will process the order and deliver the goods to your department. Any freight invoices and any damage claims for SMs or Master Contract Releases will be processed by Central Receiving.

      2. When the purchasing card is used, all payment and documentation requirements are the responsibility of the cardholder.

        For goods shipped by mail or parcel services directly to a department's University address, the department is responsible for resolving any delivery problems regardless of which delegated purchasing tool is used to acquire the goods.

    2. Campus departments are to immediately contact vendors to address any problems with their delegated transactions, such as price discrepancies, quality, quantity received.

      For assistance with transportation related problems, such as damaged or lost packages, immediately contact the University Transportation Manager.

  6. DOCUMENTATION
    1. The following documentation is required for SMs and Master Contract Releases:
      1. The colored copies of the SM and Master Contract Release form are to be distributed to Accounts Payable and Central Receiving (when shipping to Central Receiving) immediately upon placing the order as indicated on the form. It is recommended that a copy of all orders be FAXED to Central Receiving to assure that the order is received before the shipment arrives and to expedite receipt of the order should it be sent to Central Receiving in lieu of being sent directly to the ordering department. For sensitive equipment, a photocopy of the order is to be sent to Inventory Control.
      2. Freight invoices from transportation companies are to be forwarded to the Transportation Manager in the Physical Distribution Center for freight rate auditing and payment processing. The small procurement order number and FAS number should be indicated directly on the invoice. All other invoices are to be forwarded to Accounts Payable.
    2. Documentation required for Purchasing Card purchases includes a completed Purchasing Card Transaction Log clearly describing the goods or services, detailed receipts, and a reconciled Visa statement for each billing period. The Transaction Log must be signed by the cardholder and assigned reviewer. The using department is required to maintain Purchasing Card files in a central location within the department.
    3. The following documentation is required for all delegated purchasing tools:
      1. In accordance with campus record retention requirements, a file of delegated orders with pertinent related documentation, such as invoice and receiving documentation, must be maintained for a period of three years from completion. In the case of purchases made pursuant to federal grants or other federal agreements, documentation is required for three years from the date of the submission of the final financial report.
      2. Any material safety data sheets received should be retained in departmental files and a copy provided to the Department of Environmental Safety.
  7. LIMITS OF DELEGATED AUTHORITY
    1. DEPARTMENT HEAD RESPONSIBILITIES
      1. Department heads are charged with responsibility to provide leadership and oversight to ensure that these procedures are followed and that delegated authority is administered ethically. It is also the responsibility of the department head to assure a clear-cut separation of duties related to delegated authority. For example, the person who authorizes the procurement must not receive or sign for delivery. Nor is it acceptable for either of these parties to be the person who approves invoices for payment. The department head is also responsible for ensuring that individuals do not accept personal gifts or gratuities from vendors.
      2. The Department of Procurement and Supply is responsible for conducting assistance reviews to determine compliance with these requirements. Department heads are expected to ensure that their departments cooperate in this process.
    2. MISUSE OF DELEGATED AUTHORITY
      1. Any purchase by the use of delegated authority for more than the delegated limit is an unauthorized commitment which the University is not obligated to pay and for which the ordering party is personally responsible. The department head may petition the University to assume payment obligations for unauthorized transactions by submitting a written request for payment with the invoice and an approved Miscellaneous Payment Request Form to the Department of Procurement and Supply. The request must indicate how the error was made, why it is in the University's best interest to pay, and the steps taken to ensure that proper procedures are followed in the future. The Department of Procurement and Supply has the discretion to grant or deny any such requests.
      2. Purchases for personal benefit of employees, their families, and other individuals are strictly prohibited.
      3. The Director of Procurement and Supply will revoke or otherwise restrict a department's delegated authority if that department is found to be stringing purchases to exceed delegated dollar limits, is purchasing restricted items, has developed a pattern of distributing paperwork in an untimely manner, or is otherwise failing to comply with this policy. When corrective actions are taken to ensure full compliance for future transactions, the department head may request reinstatement of the delegated privilege.
      4. Delegated authority shall only be used for approved University purchases and all charges shall be made in accordance with applicable laws and regulations, including, but not limited to, sponsored project terms and conditions, the Code of Maryland Regulations (COMAR), and the University Purchasing Card Policies and Procedures. Violators shall be held personally responsible to any unauthorized purchase. The amount of any such unauthorized purchases may be deducted from the violator's payroll check and from any other payments due from the State.
  8. MISCELLANEOUS
    The University of Maryland is exempt from the following taxes: State of Maryland sales tax (Certificate #30002563), and manufacturers federal excise tax (Certificate #52730123K). Certificiate numbers are printed on the purchasing card and delegated procurement order forms.

    Small procurement orders and Master Contract Releases are not encumbered and will not be reflected on accounting summaries until invoices are paid.