This change will simplify the purchasing process, dramatically reduce processing time for thousands of purchases, and strongly support the President's Strategic Initiatives.
The Bid Threshold is the dollar level at which Purchasing Services is required by policy to publicly solicit competitive bids/proposals or approve an exception, and issue the Purchase Order.
The Departmental Purchase Order Limit is the dollar limit under which departments may select a vendor and make a purchase without the involvement of Purchasing Services.
- New Bid Threshold
- Price Comparison for Purchases of Goods & Standard Services $10,000 to $49,999 (Ms Word)
- Federal Contract Orders (New Procedures for March 1, 2007)
Please note that it is important that those receiving this information share it with faculty, project coordinators, and any administrative or project staff involved in the purchasing decision-making process, so they are prepared to implement the new procedures on March 1.
Please refer questions to Purchasing Services at 612-624-2828.
New: Reward Program for Targeted Business Purchasing
Imagine your department getting a check for $10,000 or $15,000 or even $25,000 dollars! Your department could earn up to a $25,000 award for purchasing from Targeted Group Businesses (TGB), that is, Businesses owned and operated by Women/Minority/Disabled persons.
The Office for Business and Community Economic Development (OBCED) in partnership with Purchasing Services has created the Award Incentive Recognition (AIR) initiative to recognize extraordinary support of Targeted Group Businesses by University departments. Through the AIR program, departments can receive a financial reward based on their purchases of goods and services from Targeted businesses. Individual staff will also be recognized for their efforts in creating business opportunities for TGBs.
While there are opportunities for TGBs through Purchasing's competitive bidding process, departments are encouraged to focus especially on opportunities from $0 to $49,999, in which departments select the vendor. These purchases account for 99% of the purchasing transactions made in FY 2006-07, a total of $51 Million dollars.
To provide information about the AIR program and about resources for identifying Targeted Businesses, OBCED and Purchasing will host a workshop, "Purchasing from Targeted Businesses". For workshop dates and on-line registration, consult the OBCED website at http://www.bced.umn.edu/Biz_Workshop_Registration.html
President, Board Support Opportunities for Targeted Business
A Regents Policy entitled Targeted Business, Urban Community Economic Development and Small Business Programs states: "The Board of Regents strongly believes that the purchasing power of the University should enhance equal employment and business opportunities for minorities, women, and disabled persons...The University should continue to act aggressively both to promote the utilization of businesses owned and operated by minorities, women, and disabled persons ("targeted businesses"), and to prevent discriminatory practices against such businesses."
President Bruininks has confirmed his support of this policy in a memo to the University community in which he asks for renewed commitment to this policy. In this memo, President Bruininks encourages University purchasers to attend the new workshop entitled "Purchasing from Targeted Businesses", offered by the Office of Business and Community Economic Development (OBCED) in conjunction with Purchasing. See above article "New: Reward Program for Targeted Business Purchasing" for information on how to register for the workshop.
New: Standard Performance Agreement
Effective February 1, 2007, University departments who hire individuals who could be considered "performers" (speakers, entertainers, bands, emcees, etc.) may choose to use a customized Contract for Professional Services (CPS), entitled University of Minnesota Standard Performance Agreement.
The new document, which may be used for performer engagements $3,000 and up, was designed with the help of the Office of the General Counsel (OGC) and University departments who regularly hire performers. The document includes space for performance-specific information, such as audio requirements, arrival time, sound check time, and admission prices. Not all fields will apply to every performance.
Please note that when the CPS transaction for a performer is entered in Financial FormsNirvana, the Contract for Professional Services (CPS) will print. Destroy the CPS document and use the Standard Performance Agreement instead, noting the system-assigned CPS number for future invoice payment. University and vendor signatures will be required on the Standard Performance Agreement. FFN will route the transaction to Purchasing for on-line approval and the department routes the transaction to the required approvals. This is the same procedure used now for non-standard contracts, that is, contracts that are custom-composed by the OGC or submitted by the vendor and approved by OGC.
The Standard Performance Agreement is available now in the Contracts Library maintained by the Office of the General Counsel.
Preparing for Conversion - Close Those Old POs!
Conversion of CUFS data to the PeopleSoft financial system is an important part of the Enterprise Financial System implementation, scheduled for July 1, 2008. Purchasing data that will automatically convert to the new system will include all Purchase Orders open on CUFS at the time of the conversion. Open requisitions will not convert. Open blanket orders or contracts with a time period i.e., "electronic supplies as called for, for the period of July 1, 2007 to June 20, 2007" which were originally issued by Purchasing, will not convert, since blanket orders have never been entered into CUFS.
Close Old POs
Each department is responsible to use the available tools to identify and close old POs:
1. Use CUFS UA641 - Aged Open Purchase Report to identify old POs that have been shipped complete and/or will not have further invoices.
2. Use the FFN ER (Encumbrance Release) transaction to identify and easily close open POs.
Possible Reasons for Open POs
1. Invoice could have been processed non-PO related, when a PO existed for the purchase.
2. All invoices processed, but order never finalized ("final" flag was not set on last invoice).
Closing Old POs is Important
1. Encumbered funds are released and can be used for other purposes.
2. Only current, accurate data should be fed into PeopleSoft.
Closing POs Must Begin Now and Continue
1. At the end of FY 06, there were over 12,000 open POs totaling $86 million dollars going back to 1995.
2. This is a big project. Each department must start now to regularly review and close open POs. Once the PO status is brought up-to-date in your department, you must keep it current.
Document Destruction Services Must Meet Standard
Effective March 1, U202 will list three approved University-Wide contract vendors for document destruction.
Destruction of information is a routine part of the business of many University departments. The Records and Information Management Office has established requirements for document destruction services to ensure that the University's information is adequately protected and destroyed according to laws and regulations.
Not all vendors who advertise document destruction services meet these requirements. Selecting a University-Wide Contract vendor guarantees that you are using a document destruction vendor who meets the University's requirements.
If you wish to use a non-U-Wide contract vendor, please contact Records and Information Management at 612-625-3497, or firstname.lastname@example.org for review and approval of your vendor before authorizing the work.
From the Tax Department: Making Purchases Exempt from Sales Tax
The University of Minnesota has a very broad sales tax exemption covering most purchases with the exception of meals, lodging, motor vehicles and solid waste disposal services. If the University is directly paying for the purchase, no sales tax should be charged.
Retailers generally require documentation that the purchaser is exempt from sales tax. Sometimes retailers ask for a Minnesota ST3 exemption certificate as evidence that the purchase is exempt from Minnesota sales tax. As long as the University is directly paying for the purchase, the ST3 may be provided to the retailer. Other retailers review the ST3 once and issue an exempt number rather than reviewing the ST3 for every sale; this streamlines the checkout process. The exempt number may be used at their stores for any purchases made by the University. Some stores require that you get an exempt number from them before making exempt purchases.
It is essential that the P-Card be used when making the exempt purchases. If an individual uses a personal credit card, or writes a check for a purchase, and is then reimbursed by the University, it is not considered a University purchase for sales tax purposes. The sale is subject to tax. Additionally, many University Departments do not reimburse sales tax unless the purchase is of an emergency nature.
Not all retailers consistently enforce these procedures. They may not charge tax when an individual writes a personal check and presents an ST3.
If an individual pays for a purchase personally and presents the ST3, the individual is considered as using the exemption certificate for purposes other than the claimed exemption. The penalty provisions of the sales tax laws suggest that the individual could be subject to a penalty of $100 for each transaction. The potential for this penalty coupled with the fact that an individual may not be reimbursed for sales tax paid make it imperative that the P-Card be used for all University purchases that are exempt from sales tax.
The University currently has retailer exemption/account numbers with Home Depot and Office Depot. The Home Depot number is 606074334. For Office Depot, refer to Customer number 37801528 and exempt number 0-37801528-3. Both numbers were issued to the "University Tax Department". If you print out the ST3 from the Forms Library, the retailer exemption account numbers will print out as a second page following the ST3.
If you need exempt numbers for other retailers, please contact the Tax Department at 4-1053 or at email@example.com One number for the entire University will be applied for and added to the list available on the web.