The Purchasing Department has compiled this manual to aid you in developing a better understanding of the procurement process at NJIT. Knowledge of this information and application of same should also assist you in obtaining your required goods and services in the most timely manner possible, while adhering to applicable policies and regulations.
New Jersey Institute of Technology is obligated to make payment for goods and services only when the Purchasing Department, following the programmatic approvals, issues a purchase order, which obligates the funds. Any other commitments are considered to be unauthorized purchases and the individual who made the purchase may encounter a personal obligation to the vendor.
Firms doing business with the university are generally made aware of this policy and are advised that all purchases chargeable to New Jersey Institute of Technology must be authorized by an official New Jersey Institute of Technology purchase order. Exclusive of petty cash procedures, the university has the right to not reimburse employees for the cost of any such purchases.
General policies concerning purchasing apply to all funds of the university, regardless of source. All funds deposited with the university are university funds and must be handled consistently in accordance with university policies.
Allocation of funds in a clients budget results in authority to requisition, not to purchase. Client refers to the departmental end user or Principal Investigator depending upon the circumstance.
The primary purpose of the Purchasing Department at New Jersey Institute of Technology is to assist our clients in identifying, selecting, and acquiring needed materials and services. This is done as economically as possible within accepted standards of quality and service, while following state, federal and institutional policies and procedures.
Specifically, Purchasing does the following:
- Encourages fair and open competition among vendors through competitive bidding and contract buying.
- Provides cooperative interaction between the Purchasing staff, the vendor community, and our clients.
- Provides technical assistance, procedural explanations, and source data.
- Provides pricing information for shelf items.
- Provides our clients with current information on new products and services.
- Assigns buyers along commodity lines to permit more informed handling of your requests.
- Prepares, in conjunction with the clients, quality and quantity specifications for the items and services to be purchased.
- Provides expediting services to insure the timely delivery of items and services.
- Maintains records and files of current purchase orders, vendors, catalogues, product information, and prices.
- Contracts locally for frequently used items or services.
- Seeks the highest applicable quality in the products bought.
- Provides client departments with updates on policies and procedures resulting from changing regulatory requirements.
- Works with purchasing managers of other colleges and universities in establishing cooperative purchasing programs.
- Allows members of the Purchasing staff to be active members of The National Association of Educational Buyers (NAEB) and other professional purchasing organizations, for the purpose of insuring that the high purchasing standards and ethics at NJIT are maintained.
The purpose of this section is to explain the major steps in the procurement process, particularly those steps that pertain to the client. We suggest that new staff members familiarize themselves with this section before entering a purchase requisition into the Financial Records System (FRS) database.
Throughout the procurement process, clients may track the progress of their requisitions from original entry of a requisition to the final payment of the purchase order. This may be done using the FRS. (Refer to your Financial Records System Manual - additional copies of this manual are available in the Budget Office on the 5th floor East Building or on-line at http://www.njit.edu/v2/budg/FRS_Training.pdf)
PRE-PLANNING FOR THE PROCUREMENT PROCESS
We emphasize the need for client departments to plan their supply and equipment needs well in advance. The time required by Purchasing to process your requisition is additive to the time it takes the requisition to process through the approval cycle in the university. In addition, our buyers have to comply with all requirements, including competitive bidding, which may lengthen the time needed to complete the process.
The delivery date will, of course, depend upon the supplier’s stock and the problems they may encounter in securing delivery from their suppliers, as well as possible production problems.
The requesting of bids is a requirement of the State of New Jersey and is a recognized and accepted means of insuring effective competition among vendors. The university will generally receive greater discounts and better service through competitive bidding.
When requisitioning items that are used repetitively, specify the largest reasonable quantity and as many items as possible from common sources of supply.
It is the responsibility of the Purchasing Department to originate, control, and analyze vendor bids, quotations, and proposals. The requisitioning client is responsible for defining quantity, quality, specifications, delivery date requirements and all other pertinent information essential to making a proper purchase. The requisitioning department should also suggest sources, when known, especially for unusual or unique items. The requisitioner may be called upon to assist Purchasing in evaluating the bids received relative to a purchase for the department. In order to speed the purchasing process, bids should be obtained prior to requisition entry. (See BIDS AND QUOTATIONS section for guidelines.)
BASIC STEPS IN THE GENERAL PROCUREMENT CYCLE
- Upon determining a need for a product or service, the client may use their own resources or Purchasing’s resources to choose a supplier. In the event of larger expenditures, above the bidding limit (currently $21,500), the client should contact Purchasing regarding relevant regulations.
- Client department enters and approves a purchase requisition.
- Reviews are done by the NJIT Accounting Office and the Office of Grants & Contracts to insure proper use of expense object code, allowable vs. excludable cost for indirect cost calculations, type of funding, independent contractor status, etc.
- Requisitions for computer related items are also reviewed by the Computing
- Services Division to insure that system support exists.
- The responsible individuals enter their approval.
- After all approvals are obtained, the requisition is reviewed by Purchasing and converted to a purchase order when all requirements regarding purchasing procedures are met (e.g. bidding).
- The purchase order is sent to the vendor. (Note: In cases where speed is essential, once a PO# is received, it can be called into the supplier, but the PO should be marked “confirming” to avoid duplication.)
- The vendor ships the material to the Shipping and Receiving Department. Exceptions to this procedure would include furnish and install items, services, and authorized direct deliveries. The vendor sends an invoice to the Accounts Payable Office.
- When the material arrives at the Loading Dock, Shipping and Receiving personnel will deliver it to the client department.
- Client department inspects all items in a timely fashion. If the item is damaged or not what was ordered, Purchasing should be notified immediately by e-mail. (Regencio@njit.edu)
- Client department enters a receiving report into the FRS system.
- When a three-way match 1) receiving report 2) invoice and 3) purchase order is obtained, the Financial Records System will generate a payment check. (Blanket Orders require a two way match 1) Signed invoice and 2) Purchase Order)
- Sales representatives from vendors doing business with the university may occasionally contact you or other staff members in your department. These representatives can be a helpful source of information.
- All commitments to purchase may only be made through the Purchasing Department. Quotations provided by sales representatives should be forwarded to Purchasing with a reference to your requisition.
- Please remember that certain equipment and materials must be purchased by the competitive bid process. Do not commit yourself or your department to a vendor with comments such as:
“We’ve got to have it now.”
“You’re the only source.”
“Your product is the greatest.”
“Yours is the only one in town.”
- Equipment left by sales representatives on a “loaner” or “demonstrator” basis does not constitute a commitment to buy this equipment. Purchasing Department should be informed of any equipment left on campus by a vendor.
- Occasionally, vendors will utilize unethical tactics by attempting to solicit business by phone, stating that they can offer you a great deal on overstocked or overshipped merchandise. They will take minimal information as a commitment to buy and will ship merchandise based on their conversation with someone in the department. Should you be contacted by such a company, refer them to the Purchasing Department for handling.
Vendors who do business with the university are expected to be in full compliance with the Equal Opportunity Act of 1971, and other applicable rules and regulations, whereby a contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, age or national origin.
NJIT actively solicits competitive bids from small and minority business concerns; and keeps a listing of vendors, which can be accessed at: SBE/MBE/WBE/DBE Whenever possible, awards are made to these businesses. Public Law 95-507 requires certain federal contracts to include a small and minority business subcontracting plan. For additional assistance please contact the Purchasing Department.
When state funds are used, the New Jersey Set-Aside regulations require specific efforts be made to obtain goods and services from certified small businesses. For a complete listing please contact the Purchasing Department.
BUSINESS REGISTRATION CERTIFICATE
NEW JERSEY BUSINESS REGISTRATION REQUIREMENTS
Pursuant to NJSA 52:32-44, vendors providing goods or services must be registered with the NJ Department of Treasury, Division of Revenue.
NO AWARD WILL BE MADE TO A CONTRACTOR WITHOUT PROOF OF BUSINESS REGISTRATION.
P.L. 2004, (Chapter 57) amends and supplements the business registration provisions of N.J.S.A. 52:32-44 which impose certain requirements upon a business competing for, or entering into a contract with NJIT.
Interested parties may contact the Division of Taxation, Regulatory Services Branch, directly at 609-292-5995 or www.nj.gov/njbgs
The effective date of Chapter 57 was September 1, 2004.
UNIVERSITY EMPLOYEES AS VENDORS
Regulations prohibit buying goods or services from a university employee unless the cost is less than that from any other source identified in an appropriate diligent search. Should the cost be less, no purchase can be made until approved by the Sr. Vice President for Administration and Treasurer. Consulting contracts with university employees are generally not appropriate and must be reviewed closely. Employees should normally be paid through the payroll system.
REIMBURSEMENT FOR GOODS AND SERVICES
The university recognizes that there are times when the direct purchase of an item by a client is a more efficient method of acquisition due to any one of several specific circumstances.
The university will continue to reimburse employees for reasonable purchases. But this policy does not relieve the university or the client from the obligations and responsibilities established by the Board of Trustees, Federal and State guidelines. Among others these guidelines/policies include, Disadvantaged Business Enterprise goals and technology review.
Typically reimbursements for goods and services have been less than $500 per occurrence and those reimbursements that are greater will require a more extensive review.
SELECTION OF SUPPLIERS
It is the responsibility of the Purchasing Department to select sources of supply. Potential vendors are selected for their ability to serve the needs of the university in an economical and efficient manner on a continuing basis. Past performance of vendors and cooperation with the university are important factors in vendor selection. The Purchasing Department also needs the support of clients to maintain good vendors by their timely processing of receiving reports and invoices.
The Purchasing Department is committed to recruit new vendors, including vendors who are from disadvantaged or from under-represented groups. Whenever possible, more than one source will be sought and considered. Alternate or multiple sources of supply are maintained as a means of insuring quality, service, minimum costs, and a favorable environment for the procurement of goods and services.
End users are encouraged to suggest sources of supply, particularly for unusual or non-standard items. If several sources are recommended the Requisition Text Area on screen 251 or the description area on screen 254 can be used to inform Purchasing. The Purchasing Department will follow a client’s recommendation as much as possible. If a client requests a specific vendor with no substitutions, adequate justification should accompany the requisition for consideration. Please refer to Sole Source Purchases Procedures.
QUALITY OF MATERIALS
The Purchasing Department is committed to procuring required materials of a quality suitable for their intended use and to assist university client departments in determining the required quality of said materials.
Quality is a measure of the suitability and cost (not only price) of a product for its intended use. Determining the proper quality is of greatest importance, since to buy a higher quality than is required is often as wasteful as buying a lower quality.
Quality is determined by balancing two factors: the technical consideration of suitability and the economic consideration of price and availability.
The right to determine specifications for quality, including the right to change the specifications, rests with the client responsible for the performance or use of the materials.
SMALL, REPETITIVE ORDERS
Small repetitive orders should be increased in quantity of items and decreased in frequency, particularly if there are quantity discounts available. Frequent small orders are also costly to the university, as they result in increased handling by Receiving and Accounts Payable personnel.
One of the best ways to handle small repetitive orders is to consolidate them into Blanket Orders. Consult with the Purchasing Department staff on procedures and sources for these orders.
CANCELLATION OF ORDERS
A purchase order is a binding contract between the university and the vendor. Therefore, it cannot be modified or canceled unilaterally. Any request to modify or cancel an order should be directed to the Purchasing Department in writing or e-mail (email@example.com). The Purchasing Department will then act in the best interest of the university and advise all parties accordingly.
Generally, a vendor will agree to a request for cancellation if the items have not been shipped. The department may be held responsible for any material shipped by a vendor or costs incurred prior to cancellation of fabricated items. (See RETURN OF MERCHANDISE for allowed payment of restocking charges.) The Purchasing Department will effect purchase order cancellation to disencumber funds less any amounts due to the vendor.
If it becomes necessary to make any change in the original purchase order, such as price, terms, description, additions, deletions, cancellations, etc., send an e-mail (firstname.lastname@example.org) memo to the Purchasing Department. The Purchasing Department will issue a notification to the vendor.
Even with the best of intentions and planning, emergencies do arise. It is understood that there is no way to avoid an occasional crisis, but emergency purchase orders will be processed only when the need for supplies and/or services, if not procured immediately, will cause the university significant financial or operational loss. Emergency purchase requisitions must contain an explanation detailing the nature of the emergency. The decision of whether your request is an emergency or not rests with the Purchasing Department. The explanation must be entered in the requisition text area. It is advisable to call the Purchasing Department to advise us that an emergency order has been entered into the FRS System and is awaiting processing.
Only the Purchasing Department has the authority to obligate the university for the purchase of goods and services. Any purchases made outside this policy become the sole liability of the individual making the purchase.
EQUIPMENT SCREENING (FEDERAL FUNDS ONLY)
Before you submit a requisition for the purchase of capital equipment, federal guidelines and university policy require a screening of the NJIT inventory for similar equipment already owned by the university and the feasibility of sharing the use of it with another department if, possible. The following statement must be keyed in the requisition header text. “The item of equipment described in this requisition has been screened against our inventory. No such item, or substantially similar item, is available for share use.” (Note: This statement can be added to Screen 251 in the Requisition Text codes area, by placing 005 in the field). Requisitions for capital equipment that do not contain this statement will be put on HOLD until the statement is added by the client.)
Capital Equipment is defined as an item which has a unit cost of $500 or more and has a life expectancy of more than one year. (Purchases of computer software with a net invoice cost and any related consulting and or training associated with initial implementation exceeding $50,000 also require a similar screening.)
CONFLICT OF INTEREST
Only the highest ethical principles are to be employed by all persons involved in the procurement process. It is the responsibility of each member of the university staff and of the Purchasing Department to take all appropriate steps to assure that the university does not knowingly enter into a purchase commitment which could result in a real or apparent conflict of interest situation. A conflict of interest exists when some factor (e.g. financial or personal interest in a vendor) interferes or appears to interfere with a purchaser’s ability to be completely impartial and loyal to the university’s interests.
RETURN OF MERCHANDISE (RESTOCKING)
Merchandise to be returned to suppliers or manufacturers for adjustment or credit should be cleared through the Purchasing Department.
A vendor delivering items specified on an official purchase order and who has fully complied with the contract may be under no obligation to accept a return of those items for credit. Acceptance of a return by the vendor is by no means automatic and a restocking charge may be incurred. This charge, along with the two-way freight charge will be assessed to the requisitioning client.
If incorrect or damaged merchandise is received, no receiving report should be entered (this will stop any future payment from the university) and purchasing, should be advised by e-mail (email@example.com).
BIDS AND QUOTATIONS
Purchases up to $21,500 shall be placed using routine purchasing procedures. Depending on the nature of the item to be obtained, bids oral or written, may be required by the Purchasing Department.
Purchases above $21,500 shall be publicly advertised except for professional services, copyrighted materials, insurance, state contracts, professional consulting services, collection services, personnel recruitment, graduation garments, award certificates or other items identified by regulation.
At all levels, even above the bidding threshold, purchase orders may be placed without additional bidding, to State Contract, contain buying/cooperative agreements, or Sole Source vendors.
SOLE SOURCE PURCHASES
In order to qualify an item as Sole Source and thus exempt from bidding, NJIT form S-103 (Sole Source Justification), must be properly completed and submitted to the Purchasing Department for review and approval.
A form has been included under the “Forms” section for your information.