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Purchasing Guide _08-34_

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					          Purchasing and Payment Procedures

                          For

The University of Texas Health Science Center at Houston
Preface...................................................................................................................................................................... - 6 -

Introduction to Purchasing....................................................................................................................................... - 7 -
    WEB Site http://buy.uth.tmc.edu .......................................................................................................................... - 7 -
    Contact Numbers ................................................................................................................................................. - 7 -
    Office Hours......................................................................................................................................................... - 7 -
    Purchasing Capabilities ...................................................................................................................................... - 7 -

Purchasing Ethics..................................................................................................................................................... - 9 -

Authority to Obligate Funds ................................................................................................................................... - 10 -

Authority to Sign Contracts .................................................................................................................................... - 10 -

Spending Thresholds............................................................................................................................................... - 10 -

Splitting Orders ...................................................................................................................................................... - 11 -

Contracts for purchases.......................................................................................................................................... - 11 -

Difference between a Consultant and Supplier vendor .......................................................................................... - 11 -

Contracts for revenue generation ........................................................................................................................... - 11 -

Historically Underutilized Business (HUB) program............................................................................................. - 12 -

Vendor Relations .................................................................................................................................................... - 13 -

Protest Procedures ................................................................................................................................................. - 13 -

Open Records Request............................................................................................................................................ - 13 -

Gratuities................................................................................................................................................................ - 13 -

PURCHASING CYCLE ........................................................................................................................................ - 14 -
    Purchasing Cycle - Requisition ......................................................................................................................... - 15 -
    Purchasing Cycle - Purchase Order.................................................................................................................. - 16 -
    Purchasing Cycle - Change Order..................................................................................................................... - 18 -
    Purchasing Cycle - Receiving............................................................................................................................ - 19 -
    Purchasing Cycle - Return to Vendor ................................................................................................................ - 20 -
    Purchasing Cycle - Invoice Entry ...................................................................................................................... - 21 -
    Purchasing Cycle - Payment.............................................................................................................................. - 22 -

PURCHASING TERMS .......................................................................................................................................... - 24 -
    Blanket Orders (Amount Only) .......................................................................................................................... - 25 -
    Standing Order(Amount Only)........................................................................................................................... - 25 -
    Procurement Card (Point of Sale) ..................................................................................................................... - 26 -
    Change Order .................................................................................................................................................... - 27 -
    Commodity Contracts ........................................................................................................................................ - 28 -
Purchasing and Payment Procedures




    Sole Source ........................................................................................................................................................ - 29 -
    FOB ................................................................................................................................................................... - 30 -
    Indemnification .................................................................................................................................................. - 31 -
    Maintenance / Service Agreements .................................................................................................................... - 32 -
    Personal Service Contracts................................................................................................................................ - 33 -
    Professional Service Contract ........................................................................................................................... - 34 -
    Purchase Order ................................................................................................................................................. - 35 -
    Requisition ......................................................................................................................................................... - 36 -
    Request for Information (RFI), Request for Quote (RFQ) & Request for Proposal (RFP) ............................... - 37 -
    Debarment ......................................................................................................................................................... - 38 -

RFP PROCESS ....................................................................................................................................................... - 39 -
    Introduction ....................................................................................................................................................... - 40 -
    Policy ................................................................................................................................................................. - 40 -
      Why do a request for proposal?..................................................................................................................... - 40 -
      Role of the Procurement Department in the RFP Process............................................................................. - 41 -
      Non-Standard Procurements ......................................................................................................................... - 42 -
    Who can bid? ..................................................................................................................................................... - 43 -
    Grounds for Disqualification............................................................................................................................. - 44 -
    Procedures......................................................................................................................................................... - 44 -
      Overview of the RFP Process ....................................................................................................................... - 44 -
      Contacts and Communications...........................................................................................................................45
      Pre-Bid Meetings ...............................................................................................................................................46
    Content....................................................................................................................................................................47
      Structure.............................................................................................................................................................47
      RFP Scope of Work ...........................................................................................................................................47
      Closing Date.......................................................................................................................................................48
    Checklist .................................................................................................................................................................48
    RFP Creation..........................................................................................................................................................49
    What is an Evaluation Process and Why is One Required? ...................................................................................49
      Evaluation Criteria .............................................................................................................................................50
    Evaluation Methods ................................................................................................................................................51
    Preparing Evaluation Criteria................................................................................................................................52
      Mandatory Requirements ...................................................................................................................................53
      Desirable Requirements .....................................................................................................................................54
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   Criteria in the RFP Document................................................................................................................................55
      Evaluation Team ................................................................................................................................................55
   Evaluating Proposals..............................................................................................................................................56
     How to Evaluate an RFP ....................................................................................................................................56
     Bidder Presentations ..........................................................................................................................................57
     Evaluation Tools ................................................................................................................................................58
     Evaluation Reports.............................................................................................................................................58
   Debriefings .............................................................................................................................................................59
   Conclusions.............................................................................................................................................................60

GENERAL POLICIES AND PROCEDURES ......................................................................................................... - 61 -
   Subject:          Capital Assets ................................................................................................................................. - 62 -
   Subject:          Change Orders................................................................................................................................ - 63 -
   Subject:          Claims for Damages and Shortages ............................................................................................... - 64 -
   Subject:          Drugs and Pharmaceuticals ........................................................................................................... - 65 -
   Subject:          Vendor Debarment.......................................................................................................................... - 66 -
   Subject:          Emergency Orders .......................................................................................................................... - 68 -
   Subject:          Insurance Requirements ................................................................................................................. - 69 -
   Subject:          Managing Encumbrances ............................................................................................................... - 70 -
   Subject:          Departmental Deliveries / Receiving Items .................................................................................... - 71 -
   Subject:          Return of Merchandise.................................................................................................................... - 72 -
   Subject:          Signature Authority......................................................................................................................... - 73 -
   Subject:          Terms and Conditions..................................................................................................................... - 74 -
   Subject:          Unauthorized Purchases................................................................................................................. - 75 -
   Subject:          Records Retention ........................................................................................................................... - 76 -

SPECIAL PURCHASES/PROCUREMENTS.......................................................................................................... - 77 -
   Subject:          Advertisements for Non – Faculty Recruitment .............................................................................. - 78 -
   Subject:          Animal Purchases ........................................................................................................................... - 79 -
   Subject:          Automobile/Vehicle Purchases ....................................................................................................... - 80 -
   Subject:          Computers, Computer Software And Related Products .................................................................. - 81 -
   Subject:          Construction, Architect and Engineering Contracts....................................................................... - 83 -
   Subject:          Consultant Services......................................................................................................................... - 84 -

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    Subject:          Demonstrator Equipment................................................................................................................ - 86 -
    Subject:          Trade In of Existing Equipment ...................................................................................................... - 87 -

NON-PO VOUCHERS............................................................................................................................................ - 89 -
    Introduction ....................................................................................................................................................... - 90 -
    Process Description........................................................................................................................................... - 90 -
    Supporting Documentation ................................................................................................................................ - 91 -
    Typical and Approved Uses ............................................................................................................................... - 91 -

APPENDICES ........................................................................................................................................................ - 99 -
    Appendix A - Proposal Release Checklist ...................................................................................................... - 100 -
    Appendix B NON-DISCLOSURE/CONFLICT OF INTEREST STATEMENT ......................................... - 101 -
    Appendix C: Canceling a Purchase Order line with a requisition reference ................................................. - 103 -
    Appendix D: Canceling an entire Purchase Order line with a requisition reference ..................................... - 104 -
    Appendix E: Closing a Purchase Order ......................................................................................................... - 105 -
    Appendix F: Signing Contracts....................................................................................................................... - 107 -




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Preface
This guide is meant to be a resource for all employees involved indirectly or directly with the
acquisition of goods or services for the department in which they work. It is not the intent of this
guide to be all inclusive of every policy or procedure or type of purchase you may be asked or
expected to make. The guide will assist you in the normal, daily activities involved in the
acquisition of goods and services for your department and the Health Science Center.

The Buyer’s Guide is assembled in such a way as to provide the reader with an understanding of
the Procurement Process from the identification of the need to the fulfillment and subsequent
payment of that request. It is the desire of all those that had input into this guide that this
Buyer’s Guide should assist those individuals in purchasing occupations or positions in making
their lives a little easier through increased understanding of the process.

Comments or suggestions regarding this guide should be directed to Procurement Services or any
of the contributing authors listed below.




Contributing Authors:
Richard Sears, Irina Belmont, Peter Martin, Kevin Armstrong, Gary Mah, Richard Rawson




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Introduction to Purchasing
WEB Site http://buy.uth.tmc.edu

Procurement Services is responsible for supporting all activities related to the acquisition of
goods and services, from requisition to payment. We hope the site will provide useful
information to our customers throughout the UTHSC-H community, as well as all of our current
and prospective suppliers. We have included information on Capital Asset Management since
their activities are closely aligned with the procurement process.

Our WEB site is the primary vehicle of communication for keeping employees and suppliers
updated on changes to policies and current bidding opportunities.



Contact Numbers
Procurement Services provides a single phone number, 713/500-4700, which is answered
without use of an automated attendant. Individual buyer or contract administrator phone
number’s can be access by either utilizing the UT white pages or the Procurement web page.



Office Hours
Procurement Services staff follows the standard work schedule (8:00 – 5:00) as defined in HOOP
2.36.



Purchasing Capabilities
The Purchasing Department buyers are knowledgeable of the commodities and services the
institution requires to maintain our position of a premier health science research center within
Texas and the world. Purchasing Department buyers are also knowledgeable of the vendors that
supply those goods and services required. These individuals are also skilled in the art of


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negotiation and are the only individuals authorized to perform this function on behalf of the
Health Science Center for goods and services.

The Purchasing Department is not only a valued resource for the acquisition of goods and
services but also, an invaluable resource when problems with the good or service arise.
Purchasing Department buyers are well versed in the options and alternatives available to the
Health Science Center as an agency of the State of Texas.




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Purchasing Ethics
2.01 General Standards of Conduct
2.19 Conflict of Interest
13.01 Ethical Procurement

As the recipient and custodian of public and private funds, The University of Texas Health
Science Center at Houston (UTHSC-H) is especially concerned with the ethical procurement of
goods and services, and requires that its faculty and staff request and acquire goods and services
in the most ethical manner possible.

Employees of the UTHSC-H may not solicit, demand, accept, or agree to accept any economic
opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service in
connection with the following:

    •   approving, disapproving, recommending, or preparing any part of a program requirement
        or purchase request;
    •   influencing the content of any specification or procurement standard, rendering of advice,
        investigation, audit, request for ruling, or claim; or
    •   awarding a contract.



If you observe or suspect unethical behavior in the procurement of a good or service by an
employee, you should contact any of the following individuals or offices:

    •   Your supervisor, or
    •   Another member of management in their area, or
    •   UTHSC-H's Chief Compliance Officer. Employees may also call the Compliance Hotline
        at 1-888-472-9868 in confidence and anonymity.

    Any person with a concern regarding a breach of ethics or a possible compliance matter
    should notify the UTHSC-H ethics officer or the compliance officer.




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Authority to Obligate Funds
The Purchasing Department receives their authority to purchase for the organization from the
President of the University. The Purchasing Department delegates the authority to purchase
goods and services up to but not exceeding $5,000 to the individual HSC departments. For
faculty or staff to obligate the UTHSC-H in any way in excess of $5,000 is a violation of this
authority and places the University at increased and substantial risk with the suppliers that
provide us goods and services in good faith.

Authority to Sign Contracts
The authority to sign any contract obligating the UTHSC-H in any way is delegated to the
Purchasing Department and select additional individuals from the President of the University.
Departments have no authority to sign contracts on behalf of the UTHSC-H for the acquisition of
goods or services.

Spending Thresholds
$0 - $5,000
                             UTHSC-H departments are delegated the ability to purchase goods
                             and services, inclusive of delivery charges, up to this maximum
                             dollar amount. Departments should first consider the use of the
                             electronic catalog; internal service provider or other locally
                             negotiated contract before soliciting suppliers with whom the
                             University has no current contract or pricing agreement.
$5,000.01 - $25,000
                             Only the Purchasing department has the express authority to
                             obligate the university for amounts greater than $5,000. Requests
                             between these dollar amounts allow for the solicitation of bids
                             informally. Informal bids may be in the form of a verbal
                             conversation with the vendor.
$25,000 and up
                             Requests over this dollar amount must be solicited through a
                             formal response method. The purchasing department accomplishes
                             this through public bids. Suppliers must provide their response in
                             writing to the University. This process is coordinated through the
                             UTHSC-H Purchasing department.

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Splitting Orders
The splitting of a purchase order is a direct attempt to circumvent the purchasing thresholds
established by the Board of Regents, UT System and the UTHSC-H President. This term is
specifically used to reference an action by an individual to break up or ‘split’ a purchase order in
excess of the buyer’s purchasing limit into multiple smaller purchase orders or requests within
the buyer’s purchasing limits. The splitting of purchase orders is a violation of purchasing policy
and buyer’s engaged in this activity may lose their ability to purchase.


Contracts for purchases
All contracts for the purchase of goods services must be entered into the purchasing system.
There are a few exceptions to this policy, please refer to the Non-PO Voucher section of this
guide for a list of the approved transactions.


Difference between a Consultant and Supplier vendor
There is no definitive approach to identifying the correct classification for a vendor. The
information provided by the departments is used to assist in the determination of the appropriate
type. There are some generalities that can be applied to assist you in your initial request. If you
want to pay an individual for a service, you would request a consultant vendor code be
established. If the vendor you want created only provides you a social security number for tax
purposes, then you would request a consultant vendor code be established. If the vendor will be
paid less than $10,000 total for a duration not to exceed four(4) months, then you would request
a consultant vendor code be established . The Financial Administrative Support Team (FAST) is
responsible for the creation and ongoing maintenance of consultant vendor codes.

Procurement establishes and maintains only Supplier vendors. Student Financial Aid establishes
Student vendors and all other vendor types are currently administered by the Financial
Administrative Support Team (FAST).


Contracts for revenue generation
Contracts where the UTHSC-H is paid to provide a service whether it be employment physicals,
drug testing, employee assistance programming, or providing staffing for clinics or hospitals are
handled through Office of Legal Affairs and Risk Management.

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Historically Underutilized Business (HUB) program
It is the policy of The University of Texas Health Science Center at Houston (UTHSC-H) to
promote full and equal opportunity for all businesses to supply the goods and services needed to
support mission, administrative, and logistical operations of the University. UTHSC-H commits
to good faith efforts to increase purchases from and contract awards to Historically Underutilized
Business (HUB) firms consistent with the State's goals for HUB participation and overall
economic development.

As a public entity, UTHSC-H has a compelling interest to assure that procurement funds always
are expended in an equal-business-opportunity context. To meet that obligation, UTHSC-H is
required by U. T. System Board of Regents to establish and maintain procurement systems and
procedures that are nondiscriminatory with respect to race, color, religion, sex, or national origin.
That obligation also encompasses procurement systems and procedures of business firms under
contract with UTHSC-H.

The HUB Program of Procurement Services has primary responsibility for identifying HUB
vendors to the UTHSC-H community. The HUB Program Director establishes the UTHSC-H
HUB vendor utilization targets and prepares HUB plan. The HUB Program Director is
responsible for monitoring the purchasing plan targets versus actual performance. It is the
responsibility of all authorized buyers of UTHSC-H to make a good faith effort at soliciting and
awarding contracts to HUB vendors


SMALL BUSINESS ASSISTANCE

Public Law 95-507 requires certain federal contracts to include a small, veteran minority
business subcontracting plan. When such contracts are in effect, the UTHSC-H is required to
direct purchases to small, veteran owned, and minority business concerns as defined by the
plans.

The HUB Program can assist you in locating a HUB or Small Business when users are in need of
locating a vendor to acquire a good or service. You may also consult the HUB Program website
for a list of certified HUB vendors.

HUB Director – Nina Lahasky
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Vendor Relations
Positive vendor relations are critical to the success of the UTHSC-H. We have an obligation to
our vendors to provide prompt payment for all goods and/or services they have rendered to us.


Protest Procedures
Everyone that performs a purchasing function, regardless of the department in which they reside,
is responsible for awarding contracts fairly. Vendors responding as bidders to either single-item
purchases or term contracts may elect to file formal grievance proceedings in the award of any
contract that exceeds $5,000.


Open Records Request
As a State Agency, the purchasing records are subject to Open Records requests by individuals
or organizations. Any request of information from an individual or organization outside the
UTHSC-H should be written and submitted to the Office of Legal Affairs and Risk Management.


Gratuities
Vendors with whom the University and/or your department conducts business may offer you a
token of their appreciation for your business, your continued support, or perhaps even provide
you a ‘sample’ of something. These offerings are considered gratuities and should be refused.
Acceptance of such gifts creates the appearance of unfair advantage of one vendor over another
and can place you and the University at risk but at a minimum in worse position for bargaining
with the vendor. The official policy on ethic procurement can be found in or HOOP 13.01
Ethical Procurement and Gifts and Gratuities in the HOOP 2.01 Standards of Conduct Guide.




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                           PURCHASING CYCLE




              Payment                Requisition




    Invoice                                        Purchase
     Entry                                          Order




              Receipt of
               Good or                Change
               Service                 Order
              (Returns)




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Purchasing Cycle - Requisition

A requisition (Req) is the beginning of the procurement cycle and is used to request a good or a
service. It is important to note that the requisition is not recognized as an official obligation for
the University for the purpose of third party (outside) vendors. It does begin the process of
acquisition        for       the       faculty,       staff,      student,       or       employee.

At UTHSC–H, there are five types of Requisitions:

         Catalog Request
         A catalog request is used for items that are selected through an electronic catalog. You
         can search the catalog for commonly used items, add them to your shopping cart, and
         then check out.

         Special Request – Goods and Services
         A Special Request is used for goods or services not found in the catalog. This requisition
         is made by providing a description of the needed good or service.

         Point of Sale Request
         A Point of Sale Request is used to record purchases made with a procurement card. The
         transaction is entered “after the fact”, that is, after the purchase has been made either
         through an in-store purchase, telephone order, or through an internet web site. The
         requisition pre-encumbers the funds and allows later reconciliation with the bank
         statement.

         Internal Service Dept Request
         The Internal Service Dept Request is used for goods or services provided by a UTH
         internal service department, e.g. long distance, copy services, printing, and telephone
         charges.

         Travel & Consultant Request
         The Travel & Consultant request is used for employee travel, consultant (contractor)
         services, and consultant travel. These requisitions are covered in the course, PeopleSoft
         8.4 FMS Travel for End Users.


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Purchasing Cycle - Purchase Order
A purchase order or “PO” is used to order the goods or services from the
supplier. This order is the official contract between the University and the supplier.

Purchase orders created for less than $5,000 are dispatched electronically directly to the supplier
via email, fax, or XML. The method of dispatch is decided by the vendor.

Purchase Orders for greater than $5,000 will automatically be routed to the Purchasing
department for review and subsequent processing.



                                 Bid Limits and Process Time

The goal is to achieve the best value on the dollars expended for the University. Purchases are
made by virtue of competitive bidding. It is important to allow the buyers sufficient time to
properly process your request.

Departments are authorized to purchase up to $5,000 per transaction without notifying the
Purchasing Department. This delegation allows for the most expedient and efficient method of
order placement on orders not requiring any informal or formal bid process.




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Orders greater than $5,000 are automatically routed to the Purchasing Department for
processing. The following chart provides an estimate on the amount of time it takes Purchasing
to finalize your purchase order (PO):

                    All                                               HUB
Procurement               Turnaround
                   Fund                                            Requirements
  Method                     Time
                  Sources
                  Between                                          Requires a
Telephone Bids    $5000 and 3-5 days                               minimum of three
                  $25,000                                          HUB solicitations
                                                                                       Greater
                                                                                       than
                  Greater                                          Requires a          $100,000
Formal Invitation
                  than         7-15 days                           minimum of three    requires
to Bid
                  $25,001                                          HUB solicitations   formal
                                                                                       HUB
                                                                                       Plan
                                                                                       Greater
                                                                                       than
                                                                   Requires a          $100,000
Request for       All dollar
                               30-60 days                          minimum of three    requires
Proposal          amounts
                                                                   HUB solicitations   formal
                                                                                       HUB
                                                                                       Plan

                                            Greater                                    Greater
                                            than                                       than
                                            $15,000                Requires a          $100,000
Consultant        Less than
                               3-5 days     Requires     90 days   minimum of three    requires
Contracts         $15,000
                                            Governor's             HUB solicitations   formal
                                                                                       HUB
                                            Approval
                                                                                       Plan
                                            Greater                                    Greater
                                            than                                       than
                                            $25,000                Requires a          $100,000
                  Less than                              30-60
Local Contracts                7-15 days    Requires               minimum of three    requires
                  $25,000                   UT           days
                                                                   HUB solicitations   formal
                                            System's                                   HUB
                                            Approval                                   Plan




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There are exceptions to these processing times, (i.e. Local Contracts, State Contracts, Services,
etc.) in which case the processing time would be shorter. Please contact the Purchasing
department for more information.

Purchasing Cycle - Change Order

There may be instances where you may need to make a change to a purchase order after it has
been dispatched to the vendor. The purpose of the Change Order is to communicate to the
vendor the corrections that have been made. In these cases, only the buyer on the purchase order
can make the necessary changes to the Purchase Order in the system. Changes made to
quantity, amount, buyer, scope of work, or delivery schedule are not automatically
dispatched to the supplier. The buyer will need to communicate these changes to the
vendor.

NOTE: Changing a chartstring on a purchase order will not result in a change order.




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Purchasing Cycle - Receiving

At UTHSC-H, there are two ways in which goods are received: At the desktop and at Shipping
and Receiving (Central Receiving).

If your package is delivered directly to you (Desktop delivery), it is your responsibility to
process the receiving transaction and file the packing list for the three (3) year period. Not
entering the receiving transaction for an item requiring receiving is the primary issue in late
payments to suppliers. Payments for purchase orders requiring receiving cannot be made until a
receiver is recorded into the financial system. Consistent late payments to a supplier negatively
impacts the Purchasing Department’s ability to negotiate better prices for the University overall.

Shipping and Receiving is responsible for receiving all UTHSC-H incoming shipments, unless a
different address and room number is specified. Shipping and Receiving will deliver your
overnight packages (FedEx, Airborne, DHL, etc.) the same day they are received at our location,
6431 Fannin, B.500. All other packages will be delivered within 24 hours of receipt.

Shipping and Receiving will process and retain all the required paperwork. In addition, if your
package is received in Shipping and Receiving, we will process the PeopleSoft receiver
transaction for you.

As mandated by the state, UTHSC-H is required to retain all packing slips and associated
paperwork for a period of three (3) years. Once again, if your goods are delivered to Shipping
and Receiving, this office will file the necessary paperwork as required.




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Purchasing Cycle - Return to Vendor
It may be necessary to return items you have purchased for credit or replacement. These returns
could be the result of incorrect merchandise delivered, damaged merchandise, or any number of
valid reasons. In these cases you should document the problem by processing a Return to
Vendor (RTV) transaction. This transaction has no accounting or general ledger affect but is
used to document the problem.

The department receiving the good is responsible for the coordination and the recording of the
return to the vendor both in the departmental files and in the ordering system.




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Purchasing Cycle - Invoice Entry

Accounts Payable and Disbursements teams' goal is to ensure timely and accurate processing of
payments to the University’s vendors while adhering to the University policies and procedures as
well as maintaining compliance with applicable state and federal laws, rules, and regulations.

For purchases made on purchase orders, except those made with a procurement card, the vendor
should send the invoice to Accounts Payable. Invoices received by other departments must be
immediately forwarded to Accounts Payables, unless the invoice is to be paid on a Non-PO
Voucher. Refer to Unauthorized Purchases for in General Policies and Procedures.




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Purchasing Cycle - Payment

Accounts Payable and Disbursements teams' goal is to ensure timely (see late fees below) and
accurate processing of payments to the University’s vendors while adhering to the University
policies and procedures as well as maintaining compliance with applicable state and federal laws,
rules, and regulations.

The UTHSC-H can generate payments for goods and services by one (1) of four (4) methods:

    1. Payment for an invoice received against a purchase order is made by Accounts Payable.

    2. Payment for an invoice received without a corresponding purchase order is made via a
       Non-PO Voucher. For this method of payment, the department enters the Non-PO
       Voucher and forwards the voucher pages and corresponding invoice/receipt to
       Disbursements. See Unauthorized Purchases or Non-PO Voucher.

    3. Payment is made with the individual’s UTHSC-H procurement card.                       See
       http://buy.uth.tmc.edu/buycard.htm

    4. Payment       is   made     through     the   petty    cash    reimbursement.         See
       http://financialresources.hsc.uth.tmc.edu/accounting/pettycas.html




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Late Payment Fees
It is the goal of Accounts Payable to pay all invoices within thirty (30) days of receipt. It is
inevitable that occasionally the payment of late fees will be required. According to The Texas
Administrative Code (TAC) 114.7 (b), a State Agency must make payment to the vendor within
30 days after the final receipt of the goods or services or 30 days after the Agency receives the
invoice, whichever is later. If a State Agency does not make timely payments under this
provision, the amount owed to the vendor may accrue interest at the sum of the prime rate at the
beginning of the fiscal year plus 1.0% per month plus beginning on the day after payment is due.

Another good source of information on this topic is Texas Government Code, specifically
Section 2251.026,


http://buy.uth.tmc.edu/purchasing/faq.htm#Misc



    •    Prompt Payment Interest Calculator - Provided by the Texas State Comptroller's Web
         Site. It can be used to calculate the amount of interest that should be paid on invoices
         considered past due.




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                    PURCHASING TERMS




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Blanket Orders (Amount Only)
A blanket order is a specific type of purchase order best used when quantities are indeterminable
or not practical.




Standing Order(Amount Only)

Standing orders are utilized for the following types of purchases:

    •    Services which are repetitive and predictable in size and scope.
    •    Products that are needed in same or similar quantities on a routine basis, i.e.
         weekly, monthly.




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Procurement Card (Point of Sale)
Corporate credit card program designed and implemented to allow cardholders to make
direct small dollar purchases (under $5,000) via a MasterCard in order to decrease the
need for small dollar purchase orders and reimbursements.

The Procurement Card has numerous restrictions. Detailed information regarding this
program and purchase restrictions can be found on the Procurement web site:
http://buy.uth.tmc.edu/buycard.htm.




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Change Order
There may be instances where you may need to make a change to a purchase order after it has
been dispatched to the vendor. The purpose of the Change Order is to communicate to the
vendor the corrections that have been made. In these cases, only the buyer on the purchase order
can make the necessary changes to the Purchase Order in the system. Changes made to
quantity, amount, buyer, or delivery schedule are not automatically dispatched to the
supplier. The buyer will need to communicate these changes to the vendor.

NOTE: Changing a chartstring on a purchase order will not result in a change order.




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Commodity Contracts
The UTHSC-H initiates local contracts/pricing agreements for the provision of frequently
required goods and services. Departments should purchase goods and services from the vendors
who have been awarded local contracts for provision of those goods and services.

Procurement services manages the local contract purchase process. Many of these agreements in
place are with our eProcurement catalog vendors, see: http://buy.uth.tmc.edu/sciquest.htm.




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Sole Source
Sole Source purchases are purchases made without competitive procurement because
circumstances exist that preclude obtaining competition. Generally, sole source purchases occur
when the procurement of a good or service can be made only from one source of supply or when
the procurement of a particular brand name or product is required. Since sole source purchases
eliminate competition, The University of Texas Health Science Center at Houston (UTHSC-H)
carefully regulates them and requires that they be clearly identified within the purchasing
process.

UTHSC-H makes sole source purchases only when detailed justification exists. The requesting
department manager is responsible for providing a detailed, reasonable, and defensible
justification of sole source purchases. The head of procurement services, or his or her designee,
is responsible for approving the justification.

Request for consideration in granting a sole source/proprietary status, a request must include the
following:

    •    An explanation of the need for the specification, e.g. which part or parts of the stated
         specification restricts the requisition to one manufacturer or provider.
    •    The reason competing products are not satisfactory, e.g. a justification for the proprietary
         purchase.
    •    The specific impact on the Department/Research/Patients.
    •    In additional the individual requesting the consideration of Sole Source must sign a
         “Conflict of Interest” statement providing assurance that their recommendation has not
         been inappropriately influenced.
    •    Approval: The buyer must document the due diligence that was conducted to support
         his/her approval. An additional approval is required by another Purchasing staff member
         who has contract signature “delegation of authority” for the amount of the purchase.

The sole source justification form can be obtained at:

http://buy.uth.tmc.edu/Forms/SOLE%20SOURCE3.pdf




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FOB
FOB is the term used for “Free on Board”, which determines, when the ownership of the goods
pass from the vendor to the buyer. Typically, the FOB will be Destination or Shipping Point.
FOB-Destination is used when the ownership of the goods is passed at the point the goods arrive
at the final destination and signed for. FOB-Shipping Point is used when the ownership of the
goods is passed once the goods leave the vendor’s dock.

 It is definitely preferable to place all purchase orders with a FOB of Destination so that the
vendor is responsible for the goods until we sign for them. If any damage occurs in transit, the
vendor would have to file a freight claim if the FOB was Destination; whereas, if the FOB was
Shipping Point, the buyer (UTHSC-H) of the goods would be responsible for filing the freight
claim. Freight carriers have up to six (6) months to settle a claim.




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Indemnification
Indemnification is a clause that simply protects UTHSC-H and others from claims resulting from
a purchase order or the goods or services provided to us. This clause is in our standard terms and
conditions for all purchase orders, contracts, and agreements issued by the University of Texas
Health Science Center at Houston.

The specific clause is as follows:

INDEMNIFICATION:
CONTRACTOR SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS UNIVERSITY,
THE BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM ("BOARD") AND
THE STATE OF TEXAS AND THEIR OFFICERS, AGENTS AND EMPLOYEES
(COLLECTIVELY THE "INDEMNIFIED PARTIES") FROM AND AGAINST ALL
ACTIONS, SUITS, DEMANDS, COSTS, DAMAGES, LIABILITIES AND ALL OTHER
CLAIMS, INCLUDING REASONABLE ATTORNEYS' FEES (COLLECTIVELY
"CLAIMS"), ARISING OUT OF, IN CONNECTION WITH OR RESULTING FROM THIS
PURCHASE ORDER OR THE GOODS OR SERVICES PROVIDED UNDER THIS
PURCHASE ORDER, TO THE EXTENT CAUSED BY THE ACTS, OMISSIONS OR
WILLFUL MISCONDUCT OF CONTRACTOR OR ITS AGENTS, EMPLOYEES,
SUBCONTRACTORS OR SUPPLIERS. IN ADDITION, CONTRACTOR SHALL DEFEND,
INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM AND
AGAINST ALL CLAIMS ARISING FROM INFRINGEMENT OR ALLEGED
INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER
INTELLECTUAL PROPERTY RIGHTS ARISING OUT OF, IN CONNECTION WITH OR
RESULTING FROM THIS PURCHASE ORDER OR THE GOODS OR SERVICES
PROVIDED UNDER THIS PURCHASE ORDER.




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Maintenance / Service Agreements
Contracts for maintenance service on University owned equipment must be covered by a
Purchase Order. Departments should enter a requisition using the Special Request Service or a
Point-of-Sale (if under $5000) requisition.

The law of agency governs all business in our Institution. Departments and their employees are
not authorized agents. No one may commit the University for funds other than authorized agents
of the University. Therefore, all maintenance agreements requiring a signature must be submitted
to Procurement Services for signature at the time the order is issued.

Orders for Personal and Professional Service Contracts are also issued through the Special
Request Service requisition procedure. A signed contract, as well as all other pertinent
documentation (i.e. sole source justification, 20-pt questionnaire, Contractor’s affirmation and
warranties, etc.) must be submitted at the time the order is issued.

Note: No service may begin prior to receipt of required documentation and approved
Purchase Order.




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Personal Service Contracts
Orders for Personal and Professional Service Contracts are also issued through the Special
Request Service requisition procedure. A signed contract, as well as all other pertinent
documentation (i.e. sole source justification, 20-pt questionnaire, Contractor’s affirmation and
warranties, etc.) must be submitted at the time the order is issued.

Note: No service may begin prior to receipt of required documentation and approved
Purchase Order.

Link to sole source form:
http://buy.uth.tmc.edu/Forms/SOLE%20SOURCE3.pdf

Link to 20-FACTOR COMMON LAW TEST FOR CLASSIFYING AN INDIVIDUAL
AS AN EMPLOYEE OR INDEPENDENT CONTRACTOR :
http://buy.uth.tmc.edu/Forms/20%20Factor%20Common%20Law%20test.pdf

Link to Personal Service Contract form:
http://buy.uth.tmc.edu/Forms/Services%20Contract.doc




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Professional Service Contract
The University of Texas Health Science Center at Houston (UTHSC-H) uses the professional
expertise of companies or corporations external to the University only when those services
cannot be provided by members of the UTHSC-H community.

Professional service contracts do not include formal and ongoing relationships such as those with
an external consultant. (Refer to 13.36 Purchase of Consultant Services and the Contracts and
Grants Manual for more information on consultant services.)

Professional Services relationships may only be with a corporation or business.

Link to Professional Service Contract from:
http://buy.uth.tmc.edu/Forms/Services%20Contract.doc




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Purchase Order
A purchase order or “PO” is used to order the goods or services from the
supplier and is created from requisitions from various origins such as; catalog, special request,
point of sale, travel, and internal service. A purchase order is a recognized contractual obligation
of the UTHSC-H with a supplier.


From Purchasing, the purchase order information integrates with:

           •   General Ledger to facilitate management of funding and commitment control.
           •   Accounts Payable to ensure payments to suppliers.
           •   Asset Management to account for asset items.




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Requisition
A requisition (Req) is used to formally request a good or service.

At UTHSC-H, there are five types of requisitions:

         Catalog Request
         A catalog request is a requisition for items that are selected through an electronic catalog.
         You can search the catalog for commonly used items, add them to your shopping cart,
         and then check out.

         Special Request – Goods and Services
         A Special Request is used to requisition goods and services not found in the catalog. This
         requisition is made by providing a description of the needed good or service.

         Point of Sale Request
         A Point of Sale Request records purchases made with the procurement card. The
         transaction is recorded into financial system “after the fact”, i.e., after you have made the
         in-store purchase, telephone order, or internet charge. This requisition pre-encumbers the
         funds and allows later reconciliation with the bank statement of charges.

         Internal Service Dept Request
         The Internal Service Dept Request lets you requisition goods or services provided by a
         UTH internal service department.

         Travel & Consultant Request
         The Travel & Consultant request is used to requisition employee travel, consultant
         (contractor) services, and consultant travel. These requisitions are covered in the
         PeopleSoft FMS Travel for End Users course.




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Request for Information (RFI), Request for Quote (RFQ) & Request for
Proposal (RFP)
These terms, RFI, ITB, and RFP refer to formal requests made of suppliers for information, bids,
or proposals which can only be performed by the Procurement department.

A Request for Information (RFI) may be used for many reasons including: Gathering
information on a purchase of which there is no in-house expertise; assessing the potential for
competition in an industry; or just gathering information about a specific type of equipment,
commodity or service.

A Request for Quote (aka. Invitation to Bid) is typically used for the purchase of a
commodity/service when the specifications for the good/service is easily defined, quantified
and/or qualified. Generally the only decision for the buyer to make is based upon cost and
delivery of the good.

A Request for Proposal is generally used for large dollar purchases of complex goods and/or
services where the specification of the purchase may not be easily determined, identified or
quantified. RFPs may be used for purchases of highly technical commodities and services. This
method may also be used when contracting for highly specialized or professional services such
as medical, social, architectural, engineering and similar professional services.




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Debarment

UTHSC-H cannot conduct business with vendors that have been “debarred” from one of the
WEB sites listed below. A vendor can be debarred (kept from conducting business) for multiple
reasons. However, as an institution that has not only state appropriations but also federally
sponsored projects, we are forbidden from conducting business with these vendors.

Suppliers are required to certify that they are not debarred from any of the following federal
and/or state agencies:

    1. Debarment, exclusion, or other ineligibility for participation in federally funded health
       care programs or receipt of federal funds by querying the List of Excluded
       Individuals/Entities maintained by the Department of Health and Human Services, Office
       of the Inspector General http://oig.hhs.gov/fraud/exclusions.html;
    2. Debarment, exclusion, or other ineligibility for participation in state and federally funded
       health care programs or receipt of state or federal funds by querying the Medicaid and
       Title XX Provider Exclusion List maintained by the Texas Health and Human Services
       Commission http://www.hhsc.state.tx.us/oie/exclusionlist/exclusion.asp;
    3. Debarment and/or exclusion from federal procurement programs by querying the
       Excluded Parties Listing System (the electronic version of the Lists of Parties Excluded
       from Federal Procurement and Non-Procurement Programs) maintained by the General
       Services Administration http://epls.arnet.gov/FAQEPLS.html;
    4. Designation as a Specially Designated National by querying the Specially Designated
       Nationals List maintained by the United States Department of the Treasure, Office of
       Foreign Assets Control http://www.treas.gov/offices/eotffc/ofac/sdn/;
    5. Suspension and/or exclusion by the Texas Building and Procurement Commission by
       querying the Suspended Vendor List and the Debarred Vendor List maintained by the
       Texas             Building             and            Procurement               Commission
       http://www.tbpc.state.tx.us/stpurch2/venman.html, and
    6. Verification of good standing with the Texas Comptroller of Public Accounts by
       querying the Certification of Account Status database maintained by the Texas
       Comptroller of Public Accounts http://ecpa.cpa.state.tx.us/coa/Index.html.




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                             RFP PROCESS




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Introduction

The University of Texas Health Science Center at Houston, through the HOOP and other
procurement policy and procedures, is committed to:

•        Ensuring that the University’s requirements for goods, services, construction and
         facilities are met through an open and fair process that provides the highest degree of
         competition and value to the University
•        Ensuring that all bidders have reasonable notice and opportunity to tender
•        Fostering economic development by giving every capable supplier the opportunity to do
         business with the University
•        Encouraging Certified State of Texas Historically Underutilized Businesses (HUB) to be
         competitive and to sustain quality product and service development
•        Being accountable to the public for procurement decisions

This booklet is intended to assist Procurement Department Buyers, departments and suppliers by
providing information on the preparation, use, and application of the (Request for Proposal) RFP
process. Following these guidelines will lead to documents that satisfy the University’s policy
on procurement. Better evaluation criteria will also provide better and more consistent methods
of identifying the best bid submission. The use of an appropriate evaluation process is
mandatory for all RFP submissions.

No document such as this can cover every eventuality. There will still be need for consultation
between internal customers and the Procurement department.


Policy

Why do a request for proposal?
Where the end requirements of a job are relatively simple and clear-cut, an ITB is normally used.
This simply lists the basic goods or services needed and asks bidders for a price. Responses are
evaluated primarily on the prices submitted, with other factors such as delivery dates and vendor
terms typically used only to distinguish between identical price submissions.


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A Request for Proposals is normally used where the requirements of a job are more complex, not
so well-defined, or require further investigation before a final approach can be identified. In
these instances, it is important that the RFP be carefully thought out in advance, so that all of the
vital issues can be identified and evaluated.

It is important to remember that the creation of an RFP is also the first step in the creation of a
binding legal agreement for work to be done. The specifications that are created in the RFP,
along with the response submitted by the successful bidder, will end up being incorporated into
the legal contract to perform the required work. Therefore, any extra effort put into producing
initial specifications and responding proposals that are thorough, clear and complete will pay
dividends later on in the project.

Remember, an RFP is not really very different from an ITB. It is not, as many people believe,
inherently more flexible in the ability to choose a vendor who is not the lowest bidder. The
primary difference is that an ITB is evaluated almost solely on price, while an RFP can be
evaluated on other weighted criteria such as completion time and the expertise of resources
available. But in the end, the award is expected to be given to the most competent bidder that
will provide the overall best value to the University, however price must still be an important
factor in the selection process, and must receive appropriate weighting.

One of the strengths of RFPs is that they allow users to specify their minimum requirements, and
ask the suppliers to suggest their best approach to meeting these needs. Proposals may introduce
new concepts or technologies that the user has not had the time or resources to research
adequately. Further, the vendor community may well be familiar with the latest “leading edge”
solutions, so they could suggest a more creative approach than would have been considered by
the user.

Role of the Procurement Department in the RFP Process
The Procurement department is responsible for ensuring procurement policy and procedures are
met. The Procurement department has three "customer groups" - Departments, Suppliers and the
Public. Its broad responsibilities to each are set out below.

         To Departments

         •     To assist departments in making quality, cost-effective decisions in the purchase
               of goods or services;

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         •     To advise departments in the procurement planning process and in the
               implementation of procurement policies and processes;
         •     To help administer government contracts.

         To Suppliers

         •     To provide fair and equitable access which enables qualified Suppliers to compete
               for government business;
         •     To ensure that all aspects of the evaluation and award processes are followed
               fairly and equitably;
         •     To help assist in the identifying of qualified HUB suppliers in order to provide an
               equal opportunity for work

         The Public

         •     To help ensure that the State of Texas taxpayers receive the best value for money;
         •     To enhance the return the public receives from government purchase investment
               decisions;
         •     To ensure accountability in procurement activities.
The Procurement department must be involved in all RFP’s from the time a decision is made to
solicit proposals in that form to the execution of the resulting contract. To ensure that the
interests of each of its customer groups are protected, it will:

         •     Advise departments on RFP content and approve the final RFP document
         •     Manage supplier lists
         •     Receive proposals and monitor the evaluation process
         •     Maintain contact with suppliers throughout the RFP procedure
         •     Make the final decision on awarding of the bid
         •     Advise suppliers, conduct debriefings and assist in contract negotiation.
         •     Advise and assist in coordinating payment processes to include monitoring of
               subcontractor payments and reporting

Non-Standard Procurements

         Sole Source Contracts

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         In exceptional cases and only with the approval of Procurement, customers may solicit
         contracts without competition, however only the Procurement department has the
         authority to sign and obligate on contracts. This method of contracting will normally
         occur when Procurement is reasonably sure there is only one qualified supplier capable of
         delivering an acceptable combination of product and cost effectiveness.              The
         Procurement department will approve all sole source awards and their supporting
         rationale.

         Alternative Procurement Practices (Emergency Purchases > $5K)

         In addition to sole source contracts, in order for the procurement process to balance the
         need for open, competitive opportunity with the demands of urgent or specialized
         circumstances, alternative procurement practices have been created. These processes
         must be used only for the purposes intended and not to avoid competition or to
         discriminate against specific suppliers. To ensure that they are used appropriately, the
         Assistant Vice President for Procurement must approve the use of alternative
         procurement practices.


Who can bid?

In general, anyone can bid on University RFP’s, (if the Bidder is not debarred from doing
business with the State of Texas) that are listed on our Bid Opportunities website. The
Procurement department does not maintain any form of “authorized bidders” list or other
supplier registry.

Suppliers are advised that all significant opportunities are posted on our Internet website.
Suppliers should monitor these postings and request copies of bidding opportunities of interest.
Many documents can be downloaded directly from the website to your computer. Some
competitions will also permit bid submission through the Internet. Suppliers should monitor
the website on a regular basis to ensure they are aware of every possible opportunity.

In order to ensure adequate competition, some suppliers may be invited to submit bids. A letter
of invitation will be faxed or emailed directly to the invited bidders. This will be done in addition
to posting the opportunity on the website. The competition will still be open to anyone who feels
they can submit a valid bid.


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Grounds for Disqualification

The following summary indicates potential reasons for the disqualification of a supplier proposal
in the RFP process:

         •     Responses provided to other than the address specified in the RFP
         •     Failure to meet mandatory requirements specified in the RFP; including signing
               the Execution of Offer
         •     Submission of an inappropriate HUB packet on bids with a total expected value of
               $100,000 or greater
         •     Responses received after the closing time and date;
         •     Responses containing or implying questionable ethical or business practices;
         •     Responses implying potential conflict of interest.

Suppliers are also advised that direct contact with officials other than the designated
Procurement contact without consent, will be regarded as grounds for disqualification.


Procedures


Overview of the RFP Process

The key steps in the RFP process are:

         Need and Preliminary Approval

         •     Departmental identification of need
         •     Specification and documentation of need

         RFP Preparation Process

         •     Procurement consulted and advice provided to department
         •     Scope of Work written by department based on Procurement’s “master” document
         •     Determination of evaluation criteria, weights and assessment plan (approval of
               AVP for Procurement is needed)
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         •      Establish an evaluation team approved by AVP for Procurement
         •      Submission by evaluation team members of a Non-Disclosure/Conflict of Interest
                form prior to posting of RFP

         Solicitation Process

         •      Issue of RFP
         •      Posting of opportunity on Internet; advertisement in newspaper, if required
         •      Enquiries from suppliers
         •      Suppliers' meeting (if required)
         •      Receipt of proposals

         Evaluation

         •      Evaluation and short listing
         •      Presentation/demonstration (optional)
         •      Final selection

         Contracting

         •      Contract negotiations
         •      Final approval (Procurement, other authority as required)
         •      Contract award

         Notification and Debriefing

         •      Notification to suppliers
         •      Bidder debriefing (if requested)




Contacts and Communications

The Procurement department will provide a contact point for inquiries from suppliers or potential
suppliers. It is vital that, before the RFP is released, vacation schedules and planned absences
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(meetings, conferences, etc.) are checked to ensure that the contacts are expected to be in the
office up until the time that bids close and/or that alternative resources are available to respond to
any inquiries.

The Procurement department contact will advise bidders on technical aspects of the procurement
process, such as how to submit alternative bids, but will not advise suppliers regarding the end
user's requirements or current processes.

The user contact must therefore be someone who is well-informed about the work covered by the
RFP, and authorized to respond to Bidder inquiries. Uninformed staff members should never be
permitted to give (possibly incorrect or incomplete) advice to suppliers.

All contacts should keep a record of who made inquiries and what was said. All new
information must be provided to all bidders, and an addendum must be issued to all potential
bidders. This must be done through the Procurement department and each responding bidder
must acknowledge receipt of the addendum at the time the proposal is due.

Finally, if there is a serious omission in these processes, serious consideration must be given to
cancelling the RFP and re-issuing it in a modified form or with more complete information.


Pre-Bid Meetings

In certain cases, pre-bid meetings or a bidders’ conference will be conducted when the RFP
addresses complex issues which can be better explained in person than in writing. A pre-bid
meeting is open to all suppliers and provides an opportunity to ask questions about the project
and the RFP process. Any such meetings must be scheduled before the RFP is issued. It is
preferable that the meeting take place at least one week after the RFP is released, and at least one
week before proposals are due. If attendance at such a conference is mandatory, this must be
stated on the cover page and listed in the mandatory criteria.

There are two purposes to a pre-bid meeting. Firstly, it enables all suppliers to understand as
clearly as possible the intent of the RFP. This results in better proposals and more useful and
cost-effective solutions for the University. Secondly, it gives the suppliers confidence that they
have had every opportunity to make their best effort.



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The pre-bid meeting may be a convenient time to distribute supplementary documentation for the
RFP. However, departments are cautioned that the pre-bid meeting is not to be used to distribute
major pieces of information which have a key effect on the suppliers’ proposals. The RFP
document is the call for proposals and the meeting will be held to fill in the background on
complex issues, not to cover errors or omissions in the RFP document.

Suppliers are encouraged to prepare questions beforehand and to submit written questions
relating to complex technical issues well in advance to allow informative discussion at the
meeting.


Content


Structure

There are at least six components to an RFP issued through the Procurement department,
although the departmental preparer is responsible for the completion of only one of these.
Nonetheless, you should be generally aware of the other parts, and how they interact.

The RFP section that the customer creates is the core and the most vital part of the whole
process, the scope of work (SOW) since it outlines the nature of the work to be done and how a
supplier must respond to be considered for the work.


RFP Scope of Work

The RFP Scope of Work is the responsibility of the department requesting the good or service.
They are specific to the circumstances of the RFP and will vary according to those
circumstances. Generally, the RFP will include the following information:

         •    Description of the problem for which a solution is required.
         •    Background information relating to the problem.
         •    The role that the project will play in the department's operations (how the supplier
              can expect his/her products and services to assist the department).
         •    If possible, the department's expected approach to the problem and an indication
              of whether or not alternative approaches will be considered
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         •     Technical background information relevant to the proposal
         •     Expected completion date, project milestones and work plans
         •     Known constraints under which the suppliers' solutions will be required to operate
               (e.g. location, system architecture, cost management issues, security
               arrangements, etc.)
         •     Qualities expected of the winning proposal
         •     Method of evaluation of the Bidder responses and the evaluation criteria
               (discussed in Section 2.3 & 5.4 in RFP document)

Where consultants are hired by departments to assist in writing the Requirements Section, they
will not be allowed to:

         •     Submit a proposal in response to the RFP.
         •     Act as subcontractor to the successful firm.
         •     Maintain contact with, or provide information to, any potential Bidder

Unauthorized contact between such consultants and suppliers will give rise to grounds for
disqualification.


Closing Date

Closing dates are firm except where the Procurement department, in consultation with the
customer involved, has issued an extension. In this case, all suppliers will immediately be
notified. However, if they have downloaded the documents from the Procurement website, they
will not be aware that you have done so and intend to submit a bid. Under these circumstances,
they must check the website on a regular basis, and especially just before you submit your bid, to
ensure that you are aware of any addenda or extensions. (the URL for the Procurement web site
will be included in all formal bid documents).




Checklist


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A Proposal Release checklist has been included as Appendix A. All RFPs must satisfy all
applicable sections of this checklist before they can be issued by the Procurement department.

Proposal Contents
Suppliers are advised to review their proposal prior to submission to confirm that each of the
mandatory and desirable requirements identified have been fully addressed and are easily located
in the body of the proposal. Suppliers are also encouraged to carefully examine the contents of
the proposal prior to submission. Proposals cannot be altered after the bid due date.



RFP Creation
RFP’s should be prepared using the “master” document format provided by Procurement and
filling in the customer’s specific needs and requirements. One of the most critical, overlooked
and under-rated aspects of the RFP is the evaluation criteria and the process that supports them.


What is an Evaluation Process and Why is One Required?

The evaluation process begins with setting evaluation criteria. These criteria are a series of
standards and measures used to determine how satisfactorily a proposal has addressed the
requirements identified in a bidding opportunity. They also play a major role in identifying the
best overall cost effective solution to the proposal requirement.

The complete evaluation process consists of:

•        Establishing appropriate criteria,
•        Placing the criteria in the proposal document,
•        Selecting an evaluation team,
•        Evaluating the proposal using the criteria, and
•        Preparing the evaluation report, including a recommendation for supplier of choice.

The need for the evaluation process is twofold. First, it offers all potential bidders a fair and
equitable method of having their proposal reviewed and considered as a potential solution in a


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consistent and fair manner. Second, it provides the evaluators with a clear and concise method of
identifying the competent tenders and ultimately the best overall bid.


Evaluation Criteria

Evaluation criteria are the standards and measures used to determine how satisfactorily a
proposal has addressed the requirements identified in the RFP.

Once basic evaluation criteria are identified, the RFP preparers must decide which criteria will
be mandatory and which will be weighted/ranked. Suppliers either meet or do not meet
mandatory criteria; a point system is not used. Mandatory criteria establish the basic
requirement of the invitation. Any bid that is unable to satisfy any of these requirements is
deemed to be incapable of performing the contract and is rejected. It is on the basis of the
mandatory criteria that “competent” tenders are established.
Weighted criteria, on the other hand, represent “desirable” features, which add value or
functionality to the proposal. With weighted criteria, the relative importance of each criterion to
the overall requirement and to the other criteria must be determined. For each weighted criterion
it must also be decided if a mandatory requirement is associated with it. In such a case the
criterion is made up of two elements: a mandatory requirement (pass/fail) and a
desirable/weighted factor, which applies to features and functionality desired over and above the
basic requirement and on which the department wishes to place additional consideration and
value.

For evaluation criteria to be effective, they should ideally have the following characteristics:

Objective:                                    not subject to diverging interpretation;

Relate to the requirements definition:        all key elements of the project requirements must be
                                              covered by evaluation criteria;

Discriminating:                               separate best, average and weaker proposals;

Non-discriminatory:                           fair and reasonable - mandatory and heavily
                                              weighted criteria must be justified;

Realistic:                                    given the contract nature and/or value;

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Measurable:                                     use measurable standards and have sub-criteria if
                                                necessary to simplify evaluation;

Economical to use:                              do not consume an unreasonable amount of time or
                                                resources;

Justifiable:                                    make sense, can be justified on common sense,
                                                technical and legal basis.


Evaluation Methods

There are many methods for evaluating proposals. Each has it strengths and weaknesses and
most suitable applications. The following are some possible evaluation strategies:

1.       Mandatory criteria only, with award to the lowest competent tender

         Used as the typical selection system for the procurement of goods

         •      Objective, fair, easy to justify
         •      Clear, objective criteria; somewhat more difficult to use for professional services;
                good for low “technical expertise” projects.

         This system will result in a price-driven contract. If all criteria are met by all bidders,
         price is the determining factor. This method is rarely, if ever, used for a Request for
         Proposals.

2.       Mandatory and Weighted criteria (including weighted cost factor)

         Price will be scored by the Procurement department on all RFP’s.

         Used when simply meeting minimum requirements is not sufficient.

         •      Price is assigned a pre-set weight in the overall evaluation and is calculated:

                Price of lowest competent bid         X       # of points     =       Score
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                Price of individual bid                        available

         •      Integrates price into evaluation as a direct evaluation element.

         This system results in a value-driven contract because evaluation criteria other than price
         alone are used to determine the outcome. This method is the most frequently used way of
         evaluation proposals.

3.       Highest technical merit:

         Used, for example, when a maximum price or budget has been quoted in the RFP, to
         establish which proposal offers the greatest results for a given price.

         ·      All proposals will likely be of the same price; possibility of economies is lost.
         ·      More difficult to evaluate, as all factors of all responses must be analyzed and
                scored for their technical merit and value-added components.

         This system will result in a value-driven contract.

         Normally budget information is not released as part of the RFP process. This helps
         to ensure that project scope and expectations are reasonable and subject to market
         discipline. Therefore, RFP’s using the “Highest Technical Merit” evaluation process are
         discouraged.

4.       Two Envelope System

         •      Price proposals are kept separate from technical proposals, and are not opened
                until the technical evaluation is complete.
         •      Only price proposals for bids deemed to be fully competent are opened or
                considered.
         •      Award made to lowest competent bid, or price evaluated to determine best value
                solution based on pre-approved scoring.


Preparing Evaluation Criteria
The success of a competition depends largely on the evaluation criteria. Clear and simple criteria
are easy for the supplier to understand, and easy for the end user to evaluate. When the
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requirements are more complex, criteria may have to be expanded or broken down into simpler
components in order to preserve clarity and understanding.


Mandatory Requirements

Every RFP should include mandatory requirements. These represent the minimum qualifications
or acceptable level of response. Without these specific minimum requirements even the most
inappropriate bid could potentially be compliant. This would be particularly troublesome in
evaluating a complex set of services.

Each RFP must also address the issue of acceptable risk levels, particularly with mission critical
services.

•        When an agency issuing the RFP requires absolute assurances against specific service or
         performance risk(s), the RFP document should present the requirements clearly, as
         pass/fail criteria. The specified risk(s) must be easily determinable, (for example, a
         required deadline date). All qualified bids must indicate clear and distinct compliance,
         before a bid can proceed to the next round of evaluation.

Where the exclusive use of mandatory criteria might not properly differentiate suitable from
unsuitable proposals then it may be also appropriate to identify the minimum score that must be
achieved in order to be considered a competent tender, or to require presentations from a ‘short
list’ of highest scoring suppliers. For instance to address this issue the RFP could include
directions such as:

a)       Evaluation of Written Submission

         Proposals meeting the mandatory requirements will be evaluated in accordance with the
         point rating scheme. To qualify as a competent tender written proposals must achieve an
         overall minimum of X [e.g. 70]% for the categories subject to point rating. OR
         Categories marked with an asterisk (*) are considered critical. Suppliers must score at
         least X[e.g.70]% in these categories in order to be considered compliant.

b)       Selection of Short List and Bidder Presentation



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         From the list of competent proposals, the highest scoring proposals (a maximum of X
         [e.g. 3]) will be selected for the short list. Each Bidder on the short list may be asked to
         make a presentation to the client to clarify their proposal and its content. Final selection
         will be based on scoring plus an evaluation of the presentation.

c)       Examples of Mandatory Requirements

         Bidder must have at least two staff who are Professional Engineers licensed to practice
         in the State of Texas.

         Bidder must be an authorized reseller of the products required, and must provide proof of
         authorization from the manufacturer(s) with the Proposal.

         Bidder must provide resumes for all personnel identified in the response to Section 4.5 of
         this RFP. Resumes must not exceed two pages each.


Desirable Requirements

Desirable or optional requirements are worth points in the evaluation, but are not required to win
the award. Their importance is determined solely by the score and weight they have in the
tender.

Depending on the user requirements, the RFP could be structured so that the scores were specific
to sections within the RFP. In an RFP with sectional scores, the vendor may fail prerequisites
for particular sections, but would not necessarily be completely disqualified. The bid would lose
any possible points for the section, but may score well enough in other areas to remain
competitive in the final award. This would be applicable when trying to streamline the
evaluation of an RFP with many complex low priority features, or non-critical options.

The RFP for goods or basic services involves a specification of deliverables.                These
specifications indicate the physical characteristics, and performance attributes in detail.
Specifications for goods can be stated in either of two ways. They can be exact, stating pre-
approved brand names and/or models, or they can be specified using detailed design,
performance or materials specifications. If a user fails to provide an acceptable justification for
specifying particular products/services with no substitution, it may be viewed as unnecessarily
restrictive, and the user will be asked to defend the requirement to the Procurement department.

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In the case of any request for clarification by the public, the user will be responsible for
defending their requirements in a public forum. The requirements must be clear, and should not
conflict. Similarly, the criteria and scoring scale must be stated in the RFP, in a clear and
concise fashion. Every evaluation should be an objective exercise, measuring the vendor’s
response against clearly stated criteria, that results in a simple tabulation of the best score.

The evaluation process for a complex RFP is simplified by combining the right decision tools
with a properly formatted tender reply form. Requiring specific and unequivocal answers from
the suppliers makes the evaluation as objective and clearly measurable as possible. Where
applicable, use a questionnaire format for the required information, with yes/no alternatives, or
precise quantity replies.


Criteria in the RFP Document

At this point in the evaluation process, the evaluation criteria have been established with the
appropriate requirements listed, ranked and weighted for selection purposes. The next step is to
ensure that these criteria are included in the proposal document. It is mandatory that all RFP’s
have appropriate documented evaluation criteria included and clearly explained. All
evaluation criteria must be approved by the AVP for Procurement prior to posting of the bid.
Evaluation criteria must relate to requirements identified in the body of the RFP. It is not
reasonable or defensible to use criteria which do not clearly relate back to the requirements
identified or the problem to be resolved by the proposal.


Evaluation Team

The evaluation team must be approved by the AVP for Procurement prior to posting the bid and
must not include anyone who:

-        has a personal or business relationship with any of the suppliers
-        has had a major ‘personality conflict’ with any of the suppliers in the past
-        has any preconceived bias for or against any of the suppliers who may bid for the work
         being tendered

The selection of the Evaluation Team should be done when the RFP is first prepared, and the
Team members must be approved by the AVP for Procurement before the evaluation process
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begins. The final Team should consist of a group of three or more individuals assigned the
responsibility in a competition to a) develop the procurement plan, b) review the requirements
and RFP, c) set the evaluation criteria and points structure, d) evaluate bids against predefined
criteria, e) document evaluations and recommend the award. The Procurement Department is
responsible for ensuring that an evaluation Team is in place and that a report documenting the
evaluation is prepared for each competition. A copy of each evaluation report is to be filed with
Procurement and will be part of the permanent competition file. A representative from
Procurement can participate in the evaluation process, as required, to facilitate an acquisition or
to validate the evaluation process that has taken place. Procurement will evaluate price and the
HUB Director will evaluate the HUB subcontracting plan.

Upon the receipt of valid bid proposals, no additional members will be added to the evaluation
team. During the process of evaluation and while meetings are in session, the evaluation team
shall maintain confidentiality. No member shall communicate preliminary conclusions or results
of what was bid by the vendors, or that a given vendor will be selected. All internal workings of
the committee shall be kept confidential until the committee has completed its work and all
bidders have been officially notified of the selection. This practice supports a fair and ethical
evaluation of all valid proposals without the opportunity for outside influence from non-team
members. An ethical and fair evaluation process is key to ensuring that bids are awarded to the
supplier providing the best value to the University. Additionally, this best business practice
provides the University stability and reliability in the procurement process and reduces the risk
of supplier protests.


All evaluation team members must sign and submit to the Procurement department a Non-
Disclosure/Conflict of Interest form. Failure to do so will mean that the individual cannot
participate in the evaluation of the proposals.




Evaluating Proposals

How to Evaluate an RFP

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For any proposal that will yield a value greater than $100,000 a HUB Subcontracting packet
must accompany the bid proposal. The first step in the evaluation process is the opening and
review of the HUB Subcontracting packet by the University’s HUB Director. The HUB
Director will make the determination that the submittal either meets or fails the submission
criteria as determined by the State of Texas.

The evaluation team must evaluate submissions based only on the criteria listed in the
proposal document. Any requests for supplementary information must be conveyed to the
suppliers through the Procurement department. Any communication with the evaluation team
members or their advisors by a Bidder, other than at the request of the team, is unacceptable and
will lead to disqualification of that Bidder.

The first phase of the evaluation process is to review all submissions for mandatory
qualifications and to establish competent tenders. Three questions should be applied to all
mandatory requirements for all responses:

1.       Has the Bidder substantially complied with the requirements?
2.       Have the suppliers received fair and equal treatment?
3.       Has the integrity of the competitive bidding process been respected?

If all answers are “Yes” then the Bidder is ‘competent’. Do not forget to consider whether the
Bidder attended the mandatory bidders’ conference or site viewing, if applicable. Any Bidder
not meeting all mandatory requirements is eliminated and is excluded from further consideration.
The remaining qualified proposals are reviewed in further detail, which in some cases could
result in a ‘short list’ of candidates. If there are to be oral presentations then these should be
organized with the short listed suppliers (see Bidder Presentations below). Contact the
Procurement department if you are unsure of this process and they will assist you.


Bidder Presentations

Bidder presentations may be requested to obtain additional information from the suppliers or to
see a product demonstrated. The department must prepare an agenda outlining the objectives of
the presentation and any specific requirements. All shortlisted suppliers will be given a copy of
the agenda far enough in advance to allow them to prepare properly. Criteria must be prepared
in advance by the department in order to evaluate the presentations. All short list bidders will be


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asked to answer the same questions or provide the same information and will evaluated
accordingly.


Evaluation Tools

A simple tabulation using pen and paper suffice for an RFP with very few categories to score.
More complex RFP’s lend themselves to more detailed analysis and possibly the use of
electronic evaluation software. The options for these types of evaluation tools commonly include
such items as: Percentages, including weighted values (based on documented criteria) applied to
the scores from each member of the committee, averaged across the entire committee;
questionnaire-type replies in each tender response, in hard copy and/or digital medium;
calculated price/performance standards; net present value for future cash streams and balloon
payments; timeline schedules with required milestone dates; quantifiable risk factors to
deadlines.

Each tool used in the analysis should be designed with an audit trail in mind. The evaluation
results must be reconcilable and repeatable, whether using simple or complex evaluation
methods. Each RFP should describe the point range for each scored item, and what constitutes
the criteria for each score. For example, the top score for staff experience in a range should be
based on specifics, like a minimum number years of work in the subject area along with specific
certification(s), and not just an affirmative response to a question like, “Do you have experience
in the subject area?”

If possible, define terms in advance. What constitutes an ‘excellent’ response to a particular
criterion? Ensure that all members of the evaluation team understand and agree with the ratings.


Evaluation Reports

To complete the evaluation process, you must create a report to outline the findings of the
evaluation team and also to make a recommendation for a Vendor or Bidder of choice. Where
the evaluation team recommends an award to other than the low competent tender, the evaluation
report will have to be submitted to the AVP of Procurement for consideration and approval.

At the completion of the evaluation scoring and prior to award it may become necessary to
contact references that were provided by the Bidders. The Procurement department will be
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responsible for making the reference contacts and reporting the findings to the evaluation team.
The findings of the reference checks can be used to assist the evaluation team in making their
final recommendation for award. Additionally, a financial analysis may need to be performed on
one or more bidders to determine their long term financial stability. This analysis will be
completed by the Procurement department and findings will be reported to the evaluation team.

The evaluation report details the findings of the evaluation team and indicates the collective
reasoning and opinions of the individuals for the scoring of each of the bids. The document
should identify all competent tenders as well as be a summary of each Bidder’s bid submission
and how they scored relative to their competitors. The evaluation report is mandatory and forms
part of the competition documentation. It will be made available as a public document and can be
reviewed by anyone requesting it, subject to the regulations of an open records request.



Debriefings

Debriefing sessions may be requested by any Bidder. The evaluation report, along with other
competition documentation must be made available to the Bidder at these sessions. The
evaluation team should take the lead role in these sessions and may be called upon to explain and
justify the decisions outlined in the evaluation report.

Suppliers should contact the Procurement Department to request a debriefing session.
Departments are to discuss the evaluation or selection with suppliers in debriefing sessions
only. Debriefing sessions should be done verbally whenever practical.

Debriefings will be treated as an exchange of information which helps both the suppliers and the
University. The principal objective of the debriefing is to aid the Bidder in presenting a better
proposal in subsequent RFP’s. Using the winning proposal as a benchmark, the Bidder who is
being debriefed will be provided with at least the following:

•        the winning Bidder’s evaluation rating as compared to the Bidder being debriefed, with
         substantiation where possible;

During the debriefing the Bidder is normally not told how each of the competitors ranked or how
they scored. However, all proposals and materials may be subject to release under an open
records request processed through the UTHSC-H Legal Affairs Office.
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Complaint Resolution
Bidder complaints arising from the RFP process should be directed in the first instance to the
Procurement department representative named in the RFP. The grievance/protest process in
outlined in HOOP 13.08.



Conclusions
The RFP process is necessary to arrive at a fair, equitable and defensible procurement decision
and to ensure the best value for money spent. Although this booklet is not intended to cover
every aspect or eventuality of the process, it should assist departments in establishing the
appropriate criteria for their particular requirement. It should also give Suppliers an appreciation
of the roles of the different agencies involved, and of the steps required to submit a successful
Proposal. It is recommended that you contact the Procurement department to assist you with the
complete RFP process, including the structure and use of evaluation criteria.




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         GENERAL POLICIES AND PROCEDURES




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                                                              •   Issue Date:    10/31/2004
                                                              •   Page:          1 of 1


Subject:        Capital Assets

         Generally, any equipment purchase with a purchase value of $5,000 and an estimated
         useful life of one (1) year or more may be considered a Capital Asset and will be treated
         as such by the University. Other costs like freight, insurances while in transit, and set up
         fees are all considered in determining the final capitalized cost of the equipment.

         Requisitions that meet the above criteria of $5,000 will be routed via electronic workflow
         to the Capital Assets department for review. Capital Assets will determine if the
         appropriate Asset Profile has been utilized and notify the requestor if a change is
         necessary.

         Departments should contact the Capital Assets Management department before entering
         the requisition to determine the appropriate coding for the acquisition so as not to impede
         the approval and processing of the request.




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                                                              •   Issue Date:    10/31/2004
                                                              •   Page:          1 of 1


Subject:        Change Orders
         Change Orders are issued to reflect changes in price, quantity, delivery location, or terms
         and are required to be made to the original purchase order. In short, if the vendor needs
         to know then it should be a change order.

                NOTE: Changes in the chartstring does not require a change order.

         Only the buyer listed on the purchase order can initiate the change through the purchasing
         system.

         All change orders, regardless of the change, are approved in the Purchasing Department.

         Purchase orders originally exceeding $5,000 or increased to exceed $5,000 will require
         the departmental buyer forward the request in either a written or electronic format to the
         Purchasing Department for review and handling.

         Changes to Purchase Orders less than $5,000 will route via workflow to Procurement for
         approval as mentioned above but are initiated by the departmental buyer.

         Communication with the vendor is critical. It is important for the buyer (Department or
         Purchasing) to determine whether the change needs to be communicated to the supplier.
         The Purchasing Department does not send Change Orders to the vendor as a normal
         course of business to minimize the risk of duplicate shipments.




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                                                             •   Issue Date:    10/31/2004
                                                             •   Page:          1 of 1


Subject:        Claims for Damages and Shortages

         All shipments/deliveries should be inspected as soon as possible for damage or
         noncompliance. In rare instances when delivered merchandise may be damaged or
         shipped short, it is necessary to inform the vendor immediately.

         In the event of a shortage, the receipt (actual and system) should only reflect the
         actual number/quantity received. Deliveries with visible damage should not be
         accepted by the department. The department should call the vendor immediately for
         instructions on the disposition of the delivery. You have the right to: Reject the
         entire shipment; Accept only those conforming goods and reject the remainder; or
         accept the entire shipment. In the event you accept the entire shipment, the vendor
         may offer to issue a credit for the damaged merchandise or send a replacement.

         In the cases where the vendor will issue a credit, you should document the
         conversation/agreement by processing a Return to Vendor (RTV) transaction. When
         a vendor has delivered the items specified on the purchase order, he has legally
         complied with his part of the contract and is 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 additional charges may be incurred.

         The department should call the vendor immediately to obtain an Return of
         Merchandise (RMA) or Return of Goods (RGA) number for the item(s) you wish to
         return. However, if the item is a capital asset, contact Capital Assets Management
         and notify them of the RMA/RGA number obtained from the vendor and the capital
         asset tag number. Then arrange with the vendor for a pick up or shipment of the
         returned goods. If item has been received, enter the Return to Vendor in PeopleSoft.
         In the case where your shipment is short of what was indicated on your packing list,
         contact the vendor to re-ship missing items.




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                                                             •   Issue Date:    10/31/2004
                                                             •   Page:          1 of 1


Subject:        Drugs and Pharmaceuticals

         The Drug Enforcement Agency (DEA) of the U.S. Government restricts the
         procurement of certain types of drugs, pharmaceuticals, and chemicals. Only
         authorized, licensed individuals may order these controlled substances.

         The University of Texas Health Science Center at Houston (UTHSC-H) does not
         have an institutional DEA license for the purchase of controlled substances; therefore,
         the end user of the product must have a license to purchase controlled substances and
         must document that license in the purchase. All purchases for controlled drugs and
         pharmaceuticals are routed to Procurement Services for processing prior to placing
         the order with the vendor.




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Issue Date:                                                                   10/31/2004
                                                            •   Page:         1 of 2


Subject:        Vendor Debarment

         The UTHSC-H is a public university and solicits/accepts federal funds; therefore, we are
         prohibited (debarred) from procuring goods or services from any vendor or potential
         vendor that appears on any of the following WEB sites. A vendor may be debarred for
         the following: failure to pay sales tax; failure to pay federal income tax or fraud.

         Suppliers are required to certify that they are not debarred from any of the following
         federal and/or state agencies:

                   The Department of Health and Human Services, Office of the Inspector
                   General maintains this listing of companies and individuals debarred,
                   excluded, or otherwise ineligible for participation in federally funded health
                   care        programs        or       receipt      of       federal      funds.
                   http://oig.hhs.gov/fraud/exclusions.html

                   The Texas Health and Human Services Commission maintains this listing of
                   companies and individuals debarred, excluded, or otherwise ineligible for
                   participation in federally funded health care programs or receipt of federal
                   funds. http://www.hhsc.state.tx.us/oie/exclusionlist/exclusion.asp

                   The General Services Administration maintains this listing of companies and
                   individuals debarred and/or excluded from federal procurement programs.
                   http://epls.arnet.gov/FAQEPLS.html

                   The U. S. Department of the Treasury maintains this listing of companies,
                   individuals and organizations designated as a Specially Designated National
                   and Blocked Persons through the Office of Foreign Assets Control.
                   http://www.treas.gov/offices/eotffc/ofac/sdn/

                   The Texas Building and Procurement Commission maintains this listing of
                   vendors under suspension and/or exclusion through the Suspended Vendor
                   List        and           the         Debarred      Vendor         List.
                   http://www.tbpc.state.tx.us/stpurch2/venman.html

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            The Texas Comptroller of Public Accounts maintains this listing of companies
            for verification of good standing with the Texas Comptroller of Public
            Accounts. http://ecpa.cpa.state.tx.us/coa/Index.html.




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                                                             •   Issue Date:    10/31/2004
                                                             •   Page:          1 of 1


Subject:        Emergency Orders

         Even with the best of intentions and planning, emergencies do arise. It is understood that
         there may be no way to avoid an occasional crisis, but emergency purchase orders will be
         processed only when the unfulfilled need of supplies and /or services, if not procured
         immediately, will cause serious financial or operational loss. Emergency requisitions
         must contain an explanation detailing the nature of the emergency. The explanation must
         be entered in the requisition as a comment that is not sent to the vendor.

         The departmental buyer or administrator should notify Purchasing that an emergency
         request has been entered.




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                                                              •   Issue Date:    10/31/2004
                                                              •   Page:          1 of 1


Subject:        Insurance Requirements
         When services are required to be performed on UTHSC-H’s premises, the
         Contractor/Vendor is required to maintain a certain types of coverage with minimal
         statutory limits. The types of coverage and statutory limits are based on the type of work
         being performed by the Contractor/Vendor.


         The Contractor/Vendor is required to provide proof of insurance in the form of a
         Certificate of Insurance that outlines the coverage and statutory limits prior to beginning
         work on UTHSC-H’s premises.


         Procurement Services will request of the Contractor/Vendor to provide proof of insurance
         for contracted work greater than $5,000. When the contracted work is less than
         $5,000.00, the requestor/department administrator shall request such proof of insurance
         from the Contractor/Vendor. Such proof of insurance is to be reviewed by Procurement
         Services for acceptability. The requestor should consult with Procurement Services to
         determine the types of coverage and statutory limit requirements.




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                                                           •   Issue Date:   10/31/2004
                                                           •   Page:         1 of 1


Subject:        Managing Encumbrances


         Departmental Administrators and Buyers are responsible for managing the encumbrances
         for the expenditures made from their departmental funds.

         Encumbrances must be monitored to ensure that all open encumbrances are in fact valid.
         Encumbrances no longer needed should be liquidated to free up the funds.




For more details:

http://buy.uth.tmc.edu/purchasing/ManagingEncumbrances.ppt




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                                                              •   Issue Date:    10/31/2004
                                                              •   Page:          1 of 1


Subject:        Departmental Deliveries / Receiving Items

         The UTHSC-H receives goods and services in one of two ways: Centralized Receiving
         (Shipping and Receiving) or Desktop delivery.

         Centralized Receiving (Shipping and Receiving)

                Shipping and Receiving staff within Procurement Services are responsible for
                receiving all incoming shipments, unless a different address and room number
                is specified.

                Shipping and Receiving staff will deliver your overnight packages (FedEx,
                Airborne, DHL, etc.) the same day they are received at our location, 6431 Fannin,
                B.500. All other packages will be delivered within 24 hours of receipt. As
                mandated by the state, UTHSC-H is required to retain all packing slips and
                associated paperwork for a period of three (3) years

                Shipping and Receiving will process and retain all the required paperwork. In
                addition, if your package is received in Shipping and Receiving and will process
                the PeopleSoft receiver transaction.

         Desktop delivery

                This method of delivery occurs when the vendor delivers the requested/ordered
                materials to the specific location assigned on the purchase order. The majority of
                all goods or services are delivered in this way.             It is the departments
                responsibility to process the receiving transaction and file the packing list for the
                three (3) year period.




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                                                            •   Issue Date:    10/31/2004
                                                            •   Page:          1 of 1

Subject:        Return of Merchandise



         It may be necessary to return items you have purchased for credit, or replacement,
         and in these cases you should document this by processing a Return to Vendor (RTV)
         transaction. When a vendor has delivered the items specified on the purchase order,
         he has legally complied with his part of the contract and is 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 additional charges may be incurred.

         The department should call the vendor immediately to obtain a Return of
         Merchandise (RMA) or Return of Goods (RGA) number for the item(s) you wish to
         return. However, if the item is a capital asset, contact Capital Assets Management
         and notify them of the RMA number obtained from the vendor and the capital asset
         tag number. Then arrange with the vendor for a pick up or shipment of the returned
         goods.




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                                                           •   Issue Date:   10/31/2004
                                                           •   Page:         1 of 1


Subject:        Signature Authority
Only Procurement Services and select individuals within Administration have the delegated
authority to sign contracts for the acquisition of goods or services on behalf of the University
regardless of amount. Neither faculty nor staff have delegated authority to sign contracts
obligating the UTHSC-H in any way. This delegation is clearly identified in the Handbook of
Operating Procedures 1.04.

         The ability to acquire goods and services up to $5,000 should not be confused with the
         delegated authority to sign a contract.




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                                                              •   Issue Date:    10/31/2004
                                                              •   Page:          1 of 1


Subject:        Terms and Conditions
         All purchases of goods or services are governed by UTHSC-H’s Terms and Conditions.
         These are specific clauses and phrases used by this university to affect how business is to
         be carried out, our expectations, how payment will be made, and how disputes will be
         settled.

         UTHSC-H’s Terms and Conditions can be incorporated into the text of a purchase order,
         referenced as an attachment, or be issued as an Agreement. All purchase orders include
         the address to our website. A vendor’s acceptance of the order is considered agreement
         with our Terms and Conditions that are posted to that site.

         Generally speaking our Terms and Conditions are not flexible. Procurement Services is
         responsible for determining the correct Terms and Conditions to be utilized and for the
         negotiation of the Terms and Conditions on any given contract.




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                                                            •   Issue Date:   10/31/2004
                                                            •   Page:         1 of 1


Subject:        Unauthorized Purchases
         The acquisition of a good or service that has not been sourced through the appropriate
         mechanism for the type and dollar value of purchase, is considered to be an unauthorized
         purchase. Only Procurement Services has the authority to obligate the UTHSC-H for the
         purchase of purchase of goods or services. Any purchase outside the Procurement
         policies becomes the sole liability of the individual making the purchase.

         Payments for unauthorized purchases are made through the use of a Non-PO Voucher.
         Departmental personnel requesting payment must download the Unauthorized Purchase
         Justification form and the Reaffirmation Agreement from the Procurement Web Site.
         Once completed, the signed forms and the request for payment, along with all necessary
         support documentation is forwarded to the Disbursement team for handling.

         The Assistant Vice President for Procurement Services will approve or deny the request
         based upon the review of all relevant information inclusive of all prior requests for
         exceptions by individuals or departments. Each request should ‘stand alone’ as to
         reasons and purpose.




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                                                             • Issue Date: 05/08/2006
                                                             • Page: 1 of 1


Subject:        Records Retention

         All records associated with purchase order transactions should be maintained by the
         department or departments’ designee for a period of 7 years from the date of the
         completed transaction.

         Documents to be retained include but are not limited to;

                    •   Completed requisitions
                    •   Copies of purchase orders
                    •   Packing slips
                    •   Receipts
                    •   Correspondence with the supplier
                    •   Buy Card monthly statements
                    •   Buy Card receipts

         Each department or the department’s designee is responsible for maintaining purchase
         documentation on purchases with a value of $5,000 or less.

         The Procurement department is responsible for maintaining purchase documentation for
         purchases with a value of greater than $5,000.

         Records are to be archived according to HOOP 17.06.

         http://www.uth.tmc.edu/ut_general/admin_fin/planning/pub/hoop/17/17_06.html




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          SPECIAL PURCHASES/PROCUREMENTS




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                                                            •   Issue Date:   10/31/04
                                                            •   Page:         1 of 1


Subject:        Advertisements for Non – Faculty Recruitment
         Acquisition of services for the purpose of advertisement in newspapers, journals and
         other periodicals for the recruitment for non-faculty or staff.

Method:         Special Request requisition for service.

How:
    1. Departments are required to receive approval from Human Resources prior to placing an
       advertisement for an open position in a newspaper or other periodical.
    2. Upon approval from Human Resources, a requisition can be placed in PeopleSoft
       utilizing the Special Request functionality.

         Alternatively the department may use the BuyCard to place the advertisement. A point of
         sale (POS) transaction will need to be entered into PeopleSoft and reconciled in
         accordance with the standard BuyCard reconciliation procedures.

    3. The department is responsible to ensure that the advertisement is published with the
       correct information.

Who:            All departmental buyers and data entry personnel.

Restrictions: None

For more details:
http://www.uth.tmc.edu/ut_general/admin_fin/hr/index.html\




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                                                            •   Issue Date: 10/31/04
                                                            •   Page: 1 of 1

Subject:        Animal Purchases

         Requisitions for live animals must be approved by the Center for Laboratory Animal
         Medicine and Care (CLAMC) prior to the purchase of the animals. This prior approval
         allows CLAMC staff to verify that the space, facilities and supplies will be available to
         care for the animals when they are delivered.


Method:         Special Request requisition for goods

How:
            1. Requesting departments are required to receive approval from the Center for
               Laboratory Animal Medicine and Care (Animal Care) prior to purchasing animals
               for research.
            2. Requesting department enters a requisition into the purchasing system with the
               necessary information such as; type, weight, age, delivery dates, etc.
            3. With approval from Animal Care, the requisition will follow the normal purchase
               cycle and dispatch to the selected supplier for order fulfillment.
            4. Animal orders are to be received in the Animal Care department.
            5. All subsequent changes to the purchase order are the responsibility of the
               requesting department.

Who:            All departmental buyers and data entry personnel.

Restrictions:          All animal purchases must have prior approval from Animal Care.

For more details:
http://www.uth.tmc.edu/ut_general/research_acad_aff/raa_office/research.htm#ctr




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                                                       •   Issue Date:     10/31/04
                                                       •   Page:           1 of 1

Subject:        Automobile/Vehicle Purchases

         Requisitions for vehicles must be approved by the University Fleet Manager. As a State
         Agency, the UTHSC-H is required to maintain a balance of gasoline and alternatively
         fueled vehicles. The Fleet Manager is responsible for maintaining that balance.

Method:         Special Request requisition for goods.

How :           1. The requesting Department shall complete a Vehicle Request Form and submit
                to Procurement.

                2. Procurement will obtain bids and submit to the Fleet Manager for approval.

                3. Upon approval from the Fleet Manager, the requesting department will enter a
                   requisition into the purchasing system to pre-encumber the funds for the lease
                   or purchase.

                       The requisition will follow the normal process through the purchasing to obtain a
                       purchase order.

                4. Procurement will place the order and take physical receipt of the vehicle at the
                   Operations Center Building

                5. The UTHSC-H insurance coordinator will verify that the vehicle has adequate
                   coverage.

                6. Upon verification of insurance, the requesting department may take delivery
                   of the vehicle.


Who:            All departmental buyers and data entry personnel

Restrictions: Approval of Fleet Manager



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                                                    •   Issue Date:    10/31/2004
                                                    •   Page:          1 of 2


Subject:        Computers, Computer Software And Related Products


         Acquisition of computers and computer-related equipment, software, and services are
         processed following guidelines provided by the State of Texas Department of
         Information Resources (DIR) and are consistent with the short and long-term strategies
         for information technology adopted by the UTHSC-H Information Resources Steering
         Team (IRST).

         All UTHSC-H departments benefit from a well-conceived and well-managed strategy for
         information technology. Both Information Services (IS) and the Office of Academic
         Computing (OAC) can provide assistance in selecting and deploying information
         technology solutions. Departments are urged to involve either IS or the OAC in the early
         phases of information technology projects involving the following:

                •   service contract purchases that cost more than $100,000;
                •   applications software purchases that cost more than $100,000;
                •   hardware purchases that cost more than $100,000;
                •   implicit or explicit standard setting; or
                •   strategic technologies such as EDI, imaging, ATM, and clinical information
                    systems.

         Early involvement will allow IS or the OAC to provide initial direction and coordination
         to reduce the chance for delays when the order is placed.

How:

                1. Departments should contact the Chief Information Officer when
                   contemplating implementation of qualifying information technology.



                2. IS and the OAC can assist in planning, selecting, and implementing
                   technology by providing consultation and coordination. When contacted, IS

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                   and/or the OAC will provide the department with information regarding the
                   role either will play in the acquisition and may ask for additional information.



                3. Before the procurement is made, IS and/or the OAC will issue an opinion
                   regarding the selection and implementation and how consistent it is with the
                   IRST's strategies. The procurement cannot proceed until such an opinion has
                   been issued. The department has the responsibility to contact IS or the OAC
                   and provide adequate information and time for the review.

Who:                   All departmental buyers and data entry personnel.


Restrictions:          Purchases of $1 million or less should be made following normal
                       procurement procedures or Qualified Information Services Vendor (QISV)
                       procedures. (QISV refers to contracts with specific "catalogue" vendors;
                       contact procurement services at 500-4700 for more information.)

                       Purchases of more than $1 million that use state funds as the fund source
                       must be documented and submitted to the DIR in the Biennial Operating
                       Plan. This plan is developed and submitted by information services (IS)
                       and the office of academic computing (OAC) in the fall of odd-numbered
                       years. For a planned procurement of this magnitude, departments are
                       responsible for providing IS or the OAC the information required so that
                       the plan can be prepared. The DIR reserves the right to review and to
                       participate in any such procurement.




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                                                             •   Issue Date: 10/31/2004
                                                             •   Page:       1 of 1


Subject:        Construction, Architect and Engineering Contracts


         Construction contracts are those contracts in which work to be performed is based on the
         requirements of a specification and/or drawing. Architect and Engineering contracts are
         contracts for Professional Services in which specifications and/or drawings are created.
         Requestors submit to Procurement Services a Scope of Work outlining their requirements
         for such work as well as any applicable specifications and drawings. When requiring a
         contract for Architectural and/or Engineering services, a Scope of Work is required for
         selection of a firm.

         Contracts for construction services are issued as a result of a bid process. Architect and
         Engineering Contracts are issued as a result of a Request for Qualifications. The
         Selection of an Architect and/or Engineer is not based upon pricing but rather upon their
         qualifications.

         After the award of the contract but before work can commence, the requesting
         department is required to process a requisition in the purchasing system to encumber the
         funds for the project. Additionally, the contractor must be given a Notice to Proceed
         (NTP). The NTP along with the purchase order is the contractors official notification that
         work can begin. Only the Procurement department can issue a NTP to a contractor.

         UTHSC-H may not enter into a contract for Architectural and/or Engineering Services
         unless the firm has been qualified to perform such work.

         CONTRACTORS CAN NOT BEGIN TO PERFORM WORK UNTIL A
         PURCHASE ORDER HAS BEEN WRITTEN.




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                                                            •   Issue Date:    10/31/2004
                                                            •   Page:          1 of 2


Subject:        Consultant Services


         Consulting services are defined as the human service of studying or advising an agency
         under an independent contract. The term includes routine work provided to an agency
         under an independent contract that is necessary to the functioning of the agency’s
         programs, and/or the practice of studying an existing or proposed operation or project of
         the agency and advising the agency with regard to the operation or project.


Method:         Special Request requisition for services

How:
                    1. Requesting department is required to forward a detailed Scope of Work to
                       the Procurement department prior to entering a requisition into the
                       purchasing system.

                    2. The Procurement department will review the Scope of Work to determine
                       if it meets the definition as stated above. Additionally, Procurement will
                       determine the appropriate bid process for awarding a contract.

                    3. Upon award of the contract, the requesting department will enter a
                       requisition in the purchasing system to encumber the funds required for
                       the project.


Who:            Departmental Buyers and Procurement Services


Restrictions:          UTHSC-H may not enter into a consultant contract, when funded from
                       appropriated funds, with any individual who has been employed by
                       UTHSC-H within the previous 12 months.



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For more details:
                    Further information can be located at the following Web site:
                    http://legal.uth.tmc.edu/hoop/13/13_36.html




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                                                           •   Issue Date:   10/31/2004
                                                           •   Page:         1 of 1


Subject:       Demonstrator Equipment

         A department may require or request equipment of a vendor to be located on UTHSC-H
         property for the purpose of demonstrating or evaluating its effectiveness in a
         department’s operation. Departments can take advantage of demonstrator equipment
         provided by suppliers utilizing the following procedure.

         All purchasing policies and procedures apply to the acquisition of demonstrator
         equipment.

Method:        Special Request requisition for goods

How:
               1. Requesting department develops specifications for the equipment and
                  provided to Procurement prior to bringing equipment on site.

               2. The requesting department will enter a requisition in the purchasing system
                  and mark it as ‘RFQ Required’ and then notify Procurement that the request is
                  ready to be sourced. The ‘RFQ Required’ flag is located on the line details
                  page of the requisition.

               3. Procurement will source the specifications to various suppliers to determine
                  which suppliers are willing and able to provide equipment matching the
                  specification at no charge. Additionally, Procurement will coordinate the time
                  frame for the evaluation period between the requesting department and the
                  suppliers.

               4. The requesting department will evaluate the demonstrator equipment and will
                  submit to Procurement a written evaluation document rating the performance
                  of each supplier’s equipment against the stated specifications.

               5. The Procurement department will make the award to appropriate supplier
                  following the UTHSC-H purchasing guidelines.


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                                                             •   Issue Date:    10/31/2004
                                                             •   Page:          1 of 2


Subject:        Trade In of Existing Equipment

         In certain situations, when there is residual value for an existing piece of equipment, it
         may be used as a trade-in on a new equipment purchase with the approval of the
         Purchasing Department. The trade-in must be similar to equipment which is being
         purchased.

         The department must provide the following information on the all items to be traded-in:
            • Make, Model Number, Serial Number
            • UTHSC-H Inventory tag number
            • Age and condition of the equipment
            • Contact person for question clarification
            • Estimate of current value
            • Original purchase cost when new.


How:

                    1. When a department desires to trade-in used equipment in the acquisition
                       of new equipment, the requisition must provide a description of the item
                       to be traded in, including the inventory number and the trade-in allowance
                       received from the vendor, in the line comments of the requisition for each
                       purchase of new equipment.



                    2. Before removing a traded in item of equipment from the Health Science
                       Center premises, the department must promptly send the inventory tag and
                       a copy of the RQ and/or PO document to the Capital Assets Management
                       Department.



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Who:                Departmental buyers and data entry personnel.




Restrictions:       Inventory tag and a copy of the RQ and/or PO document to the Capital
                    Assets Management Department.




For more details:
http://buy.uth.tmc.edu/cam/handbook.htm




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                    NON-PO VOUCHERS




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Introduction
The Non-PO Voucher transaction is utilized to facilitate certain payments where direct
disbursement of funds is allowed and prior encumbering of funds is not necessary.

A good rule of thumb is: If the goods or services your department needs to buy are for the
normal day to day operation of your department and are readily available in the marketplace,
then you will probably need to purchase them through the procurement process. If the goods or
services your department needs are for official functions, memberships, subscriptions or are
available only from individuals, the Non-PO Voucher may be an appropriate mechanism of
payment either as a reimbursement to an employee or as a direct payment to a vendor.

The Accounts Payable/Disbursement section of the Procurement WEB site will have the most
current documentation and appropriate uses information.



Process Description

Non-PO Vouchers are initiated by UTHSC-H departments with the data entry of the transaction
into the financial system. The department sends a screen print of the Non-PO Voucher and
supporting documentation to the Disbursement Group in Procurement Services. Appropriate
original supporting documents such as invoices, order forms, receipts, etc., must also be attached
to the Non-PO Voucher screen print. Once the documents are received by the Disbursements
Group, both the documents and the system transaction are reviewed to ensure that the payment is
both allowable under institutional policy and adequately documented. The Non-PO Voucher
transaction and process is controlled by Procurement Services and any violation of purchasing
procedures will be resolved through Procurement Services.

Exceptions                      To                     Purchasing                    Policy
Any exceptions to the established procedures for submission, documentation and approval of
Non-PO voucher transactions - particularly when institutional purchasing procedure was not
followed - will be considered for processing only after compliance with the following is
satisfied: The department requesting an exception must complete and submit an Unauthorized
Purchase Justification form and Reaffirmation Agreement to the AVP of Procurement Services
signed by the office of the respective department management. Approval of exceptions will be
made on a case by case basis.



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Supporting Documentation

All Non-PO voucher transactions must be adequately documented and supported by original
documents such as receipts, invoices, etc. Summary billing statements, photocopies, or fax copies
are not acceptable substitutes for original documents. In the event the Non-PO voucher support
is an order or an application form, the requestor should also send a photocopy of the form, since
one copy must be retained in Records Management and one must be sent with the check to the
vendor.



Typical and Approved Uses

Alcoholic Beverages/Liquor Stores (HOOP 2.02)
         The “Request for Permission to Serve Alcoholic Beverages” form must be attached to
         any reimbursement for which alcoholic beverages are to be consumed at an official UT
         function either on campus or off campus. Additional documentation requirements are
         identical to those listed for business meals. Cannot be purchase with State funds,
         Service department or federal funds.

Achievement Awards to Employees (HOOP 2.07)
         The UTHSC-H authorizes the purchase and presentation of awards to recognize
         outstanding professional achievements by employees and students.

Books
         Request for prepayment of books not to exceed $1,000 may be processed as a Non-PO
         Voucher. Price support from the vendor MUST document the prepayment requirement.
         Delivery address must be to the institution.

Brochures, Pamphlets
         Payments for such items may include training manuals or video tapes. Payments cannot
         exceed $1,000.




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Business Meals (HOOP 2.11)
         Expenses are processed only as reimbursement to a UTHSC-H employee; cannot use
         State Funds; supporting documentation must include a list of the attendees, their
         affiliations, their positions, titles, etc., and describe what institutional business was
         discussed. Maximum gratuity allowable is 20%. Maximum reimbursement is limited to
         $75(including gratuity) per person.

Cancellation/Late fees and similar charges
         Payments to vendors for these fees regardless of value need to be approved by the
         Assistant Vice President of Procurement Services. Documentation and an explanation of
         the charge should accompany the request.

Catering
         Catering and attendant charges may be used in the pursuit of legitimate business
         entertainment or an office function endorsed by the President or his designee. Supporting
         documentation must describe the attendees and what institutional business was discussed.
         See HOOP 2.11 - Official Functions; HOOP 2.02 - Alcoholic Beverages for additional
         information.

Coffee/Water Services
         Payments to vendors who maintain coffee equipment and/or replenish coffee supplies,
         etc. Limited to Designated Funds and certain Private Gift Fund accounts.

Computer Searches
         Payments for computer searches of selected databases to a library or similar institution.

Contributions
         Prohibited - The University does not make contributions to any agency or organization
         regardless of fund source.

Delivery Charges
         Fees charges by a commercial carrier in fulfillment of their required duty. DOES NOT
         INCLUDE PAYMENTS TO FEDEX, DHL/AIRBORNE AND UNITED PARCEL
         SERVICE(UPS)




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Deposits
         Some types of deposits may be made with a Non-PO Vocuher; others, particularly those
         associated with travel may not. Deposits with federal agencies generally are appropriately
         done as a Non-PO Voucher.

Examinations Fees
         Fees for such items as standardized test and attendant analysis.

Flowers, Floral Arrangements
         Gifts such as flowers, mementos, etc., in recognition of some special event or occasion
         are processed as a Non-PO Voucher. Cannot be paid with State Funds; cannot exceed $60
         per person. Documentation must indicate the name of the recipient, their association with
         the UTHSC-H, and the event or occasion. NOTE: The gift or award cannot be of a
         service award nature. See HOOP 2.31 - Gifts for additional information and prohibited
         purchases.

Food & Beverage Servers (HOOP 2.11)
         Payments for services in conjunction with business entertainment to individuals (rather
         than a company) may be done on a Non-PO Voucher. Attendant documentation must
         include a signed affidavit which includes a description of their services provided, the full
         name of the server, his or her Social Security number, and a permanent mailing address.
         Servers cannot be a UTHSC-H employee except under conditions described in UT
         System Regents' Rules and Regulations (Chapter IV, Section 7).

Food, Grocery, Beverage Purchases
         Related to in-home business entertainment only. Original receipts are required;
         documentation required as with any business entertainment. Reimbursements cannot
         include personal items. See HOOP 2.11 - Official Functions and/or HOOP 2.02 -
         Alcoholic Beverages for additional information.

Gifts (HOOP 2.31)
         Gifts such as flowers, mementos, etc., in recognition of some special event or occasion
         are processed as a Non-PO Voucher. Cannot be paid with State Funds; cannot exceed $60
         per person. Documentation must indicate the name of the recipient, their association with
         the UT-HHSC, and the event or occasion. NOTE: The gift or award cannot be of a
         service award nature. See HOOP 2.31 - Gifts for additional information and prohibited
         purchases.

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Graduation Ceremonies (HOOP 2.11)
         Expenses related to the hosting of graduation ceremonies may be processed on a Non-PO
         Voucher. All such transactions are routed for approval through the Office of the Assistant
         Vice President for Finance and Governmental Relations.

Insurance Payments
         Insurance contracts are not usually negotiated by UTHSC-H departments. A Non-PO
         Voucher is the appropriate method for payment of various types of insurances; however,
         some types require additional approvals such as: Camp Events Insurance, Equipment
         Insurance, Fine Arts Insurance, Flood Insurance, Property Insurance, Vehicle Insurance
         require the approval of Office of Environmental Health and Safety. Professional
         Liability Insurance for Non MDs. requires the approval of the Office of Legal Affairs and
         Institutional Compliance.

Interagency Contracts
         Contracts between state agencies and an expected value of less than $5,000 total may be
         paid using a Non-PO Voucher.

Lab Fees
         Reimbursable laboratory tests requested by a department where the department will be
         reimbursed by a patient or a third party may be paid to the service provider via an Non-
         PO Voucher.
         Non-Reimbursed laboratory tests must be processed through the procurement process.

Legal Services
         Legal services are not usually contracted for by UTHSC-H departments. Any request for
         such an expenditure will be routed through and have the written approval of the Office of
         Legal Affairs and Institutional Compliance.

Licensing Fees
         Professional licensing fees are reimbursed to the individual and not paid directly to the
         organization.

Lodging-Consultants
         Direct payments to hotels for the lodging expenses of a consultant.



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Membership Dues
         INDIVIDUAL: Reimbursement for membership in a professional society or organization
         in the name of a faculty or staff member are processed with a Non-PO Voucher.
         Payments are not made directly to the organization. Cannot be on State or Federal Funds;
         must be mailed to an institutional mailing address. See HOOP 2.52 - Membership in
         Professional & Educational Organizations for additional information.

         INSTITUTIONAL (STATE FUNDS): Payment for membership in a professional society
         or organization in the name of the UTHSC-H can be done on a Non-PO Voucher.
         Memberships must be addressed to the UTHSC-H in care of or to the attention of the
         head of the operating unit or chairman of the department requesting the membership.
         Initial membership payment must be endorsed by a memorandum to the Financial
         Administrative Support Team that describes how the membership will benefit the
         UTHSC-H. See HOOP 2.52 - Membership in Professional & Educational Organizations
         for additional information.

         INSTITUTIONAL (OTHER FUNDS): Payment for membership in a professional society
         or organization in the name of the UTHSC-H can be done on a Non-PO Voucher.
         Memberships must be addressed to the UTHSC-H in care of the Director or Chairperson
         of the department requesting the membership. See HOOP 2.52 - Membership in
         Professional    &    Educational    Organizations      for   additional     information.
         Payments/Reimbursement for memberships used for, or in conjunction with, official
         functions may be processed only when used predominantly for UTHSC-H official
         functions. Each payment must expressly state in terms of annual use the percent used for
         official UTHSC-H business.

Musical Entertainers (HOOP 2.11)
         Payments for musical entertainment in conjunction with business entertainment to a
         musical group or representative of such a group can be done on a Non-PO Voucher. A
         properly executed copy of the contract must be attached to the Non-PO Voucher support
         documentation. Cannot use State Funds. Musicians cannot be UTHSC-H employee
         except under conditions described in UT System Regents' Rules and Regulations
         (Chapter IV, Section 7).

Notary Bond/License Fees
         Fees for services of a notary public or bonding services may be processed on a Non-PO
         Voucher for reimbursement to an employee. Such Non-PO Voucher transactions must
         have the written approval of the Director, Risk Analysis & Loss Control and must be
         mailed to an institutional address.
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Official Functions (HOOP 2.11)
         The provision of hospitality (meals, beverages, musical diversion for guests) towards
         some legitimate business purpose related to the goals of the UTHSC-H or one of its'
         departments. Cannot be done with State Funds; must be supported by original
         documentation and support. Documentation should include the name(s), affiliation and
         position/title of those in attendance; the institutional business discussed or the benefit to
         the institution. See HOOP 2.11 - Official Functions; HOOP 2.02 - Alcoholic Beverages
         for additional information.

Parking Fees/Validations
         Reimbursement for parking fees may be made to non-employees (i.e., patients, research
         subjects) on a Non-PO Voucher. The process normally involves purchasing parking
         tokens from the TMC, Inc. Note: Reimbursements to employees for expenses related to
         parking while on official business (not on travel status) are usually done on Petty Cash.
         Reimbursements for parking fees while on travel status are processed through the travel
         reimbursement process. See HOOP 2.12 Travel for additional information.

Plants (live or artificial)
         Gifts such as flowers, mementos, etc., in recognition of some special event or occasion
         are processed as a Non-PO Voucher. Cannot be paid with State Funds; cannot exceed $60
         per person. Documentation must indicate the name of the recipient, their association with
         the UTHSC-H, and the event or occasion. NOTE: The gift or award cannot be of a
         service award nature. See HOOP 2.31 - Gifts for additional information and prohibited
         purchases.

Prepayments (HOOP 13.09)
         As a general rule the UTHSC-H is prohibited from paying for goods or services prior to
         receiving them. There are instances where prepayment is appropriate as in the following
         instances: books; initial subscriptions; registration fees; software; publications such as
         pamphlets, brochures, or reprints; and purchases from federal agencies when
         prepayments are required or will expedite the delivery of merchandise

Refunds
         Monies deposited to a UTHSC-H account that for multiple reasons may need to be
         refunded to the originator. These refunds could include: patient refunds, Refunds to
         Grantors, Continuing Education refunds.

Registration fees – In City
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         Fees charged to attend a conference or meeting within the Houston Metropolitan area.

Relocation/Moving (HOOP 3.08)
         Expenses related to the relocation of a new faculty or staff member committed to by a
         department as part of the recruitment process. Reimbursement to the employee for
         expenses incurred by and associated with the move, should be processed as a Non-PO
         Voucher to third parties (outside vendors) are to be handled through the Procurement
         process. Note: Aggregate expenses for any such move cannot exceed one month base
         compensation of the new employee except through the written approval of the head of the
         operating unit. See HOOP 3.08 - Administrative & Professional or HOOP 4.18 - Faculty
         for additional information.

         Relocation/Moving faculty, staff or offices within the university should be handled as a
         requisition using the local contract vendor and NOT paid as a Non-PO Voucher.

Rentals
         Rentals of tables, chairs, booths, etc. at conferences, conventions, etc. are typically done
         on a Non-PO Voucher.

Preprints/Page Charges
         Charges incurred by publishers for processing manuscripts as well as ordering reprints of
         articles may be processed as a Non-PO Voucher. Charges cannot exceed $1,000.

Research Subjects
         Participants in research trials or patients who participate in experimental therapies may be
         paid through the Non-PO Voucher process. Participant documentation must include a
         signed affidavit which includes a description of the services provided, the full name of
         the participant, and a permanent mailing address. The Principal Investigator on such trials
         must endorse the request for payment with a written approval. If any such payment to the
         individual exceeds, or is expected to exceed $50, the department must request that the
         recipient be set up a consultant vendor within the financial system in order to capture
         necessary tax reporting(1099) information. This requires the name, address, and social
         security number of the patient/subject.

Site Visits
         Expenses in conjunction with hosting a site visit from an accreditation or regulatory
         agency may be made on a Non-PO Voucher; see also Official Functions and Business
         Meals.
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Sub Contract Payments
         Generally, these payments are payments on sub contracts as they related to restricted
         funds and other agencies.

Subscriptions
         Magazine or journal subscriptions may be paid through the Non-PO Voucher process;
         subscriptions can be renewed for one year only. All subscriptions must have an
         institutional address as the mailing address.

Teleconferencing Fees
         Charges generated through the use of multi party calling. Generally these charges are
         infrequent in use.

Telephone Fees and Surcharges
         Request for reimbursements for toll calls made on non-institutional telephones will be
         considered only when the calls were of an emergency nature. Such calls are more
         appropriately made on University telephones and thereby charged directly to a University
         account. Documentation must include who placed the call, who was called, his or her
         affiliation, and what UTHSC-H business was discussed. The following charges will not
         be paid or reimbursed: 9-1-1 Emergency Number Act; Poision Control Surcharge;
         Emergency communications District Act; Emergency Telephone Number Act.




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                         APPENDICES




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Appendix A - Proposal Release Checklist
          There is no conflict with any trade
          agreement or government procure-          The Department has stipulated who
          ment policy                               will have rights to the use of
                                                    intellectual property. (optional)
          Requirements are clearly stated.
          Bidders will be able to understand        Evaluation criteria are clearly stated,
          exactly what is expected of them and      complete with weights in addition to
          what must be included in their bid to     the members of the evaluation team
          receive full consideration.               are approved by AVP for
                                                    Procurement.
          Constraints, schedules and deadlines
          identified.                               Proposal closing date provides
                                                    sufficient time for bidders to prepare
          Deliverables       and        reporting   a good proposal. (3-5 weeks)
          obligations are specified
                                                    If needed Legal Counsel has looked
          Special performance or delivery           at the Request for Proposal.
          requirements clear.                       (Especially for complex or high-
                                                    dollar value requirements.)
          Specifications and/or standards are
          used appropriately.                       Advertising method has been
                                                    determined (Including posting in the
          Pricing requirements and bid              newspaper and on the Internet if
          submission expectations are clear.        required by Procurement Policy.)

          Closing time, date and location are       If available, a copy of the proposed
          clear.                                    contract form is included or
                                                    referenced in the Request for
          Bidders’ meeting date, time and           Proposal.        If not available,
          location are identified.                  everything that will be called for in
                                                    the contract has been addressed in
          Insurance, bonding or holdback            the Request for Proposal.
          requirements have been addressed.
                                                    The document has been carefully
          Environmental       factors       been    checked for accuracy and simplicity.
          considered. (optional)


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          Appendix B NON-DISCLOSURE/CONFLICT OF INTEREST
                             STATEMENT

                                                    RFP/ITB NUMBER: __________

           NON-DISCLOSURE/CONFLICT OF INTEREST STATEMENT


I, _____________________, the undersigned, hereby certify that the following
statements are true and correct and that I understand and agree to be bound by
the commitments contained herein.

I am acting at the request of The University of Texas Health Science Center at
Houston as a participant of the Evaluation committee for the responses received
to the Request for Proposal (RFP), _____________, dated _________.

I am acting on my own accord and am not acting under duress. I am not
currently employed by, nor am I receiving any compensation from, nor have I
been the recipient of any present or future economic opportunity, employment,
gift, loan, gratuity, special discount, trip, favor, or service in connection with any
proposal or involved proposer in return for favorable consideration. I have no
preconceived position on the relative merits of any proposals nor have I
established a personal preference or position on the worth or standing of any
proposer participating in this action.

The information that you are being given access to is of a very sensitive nature.
Disclosure of any RFP information to any unauthorized individual can result in
disciplinary action up to and including termination from the University. Therefore,
I agree not to disclose or otherwise divulge any information pertaining to the
contents, status, or ranking of any proposal to anyone other than the evaluation
team leader or other evaluation team members. I understand the terms “disclose
or otherwise divulge” to include, but are not limited to, reproduction of any part or
portion of any proposal, or removal of same from designated areas without prior
authorization from the evaluation team leader. I agree to perform any and all
evaluations of said proposals in an unbiased manner, to the best of my ability,
and with the best interest of the State of Texas paramount in all decisions.


________________________                           ______________________
Signature                                          Printed Name
_______________



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Date




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Appendix C: Canceling a Purchase Order line with a requisition
reference

   1.     Find the Purchase Order line that needs to be cancelled.
   2.     Go to the specific line(s) on the Schedule tab.
   3.     Click on the cancel PO icon ( ).
   4.     The following message will appear.
                 This action will cancel shedule? for Line? (10200,230)

                 The action that you are taking will cancel this schedule for this line. If you do not want to cancel
                 this purchase order, then you cannot perform the action at this time.

          Click the              icon .


   5. The following message will appear.
                 This action will cancel this line for this purchase order. Continue? (10200,229)

                 The action that you are taking will cancel this line for this Purchase Order. If you do not want to
                 cancel this line, then you cannot perform the action at this time.

          Click the              icon.


                 The Budget Status field is now set to “Not Ckd”
                 The Line Status shows as Cancelled.

   6.           The Purchase Order
   7. Click the Budget Check icon                  . Once Budget Check runs successfully the funds
      will be released.
   8.           The Purchase Order




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Appendix D: Canceling an entire Purchase Order line with a requisition
             reference


   1. Find the Purchase Order that needs to be cancelled.
   2. Click on the cancel PO icon ( ).
   3. The following message will appear.
                 Please note this action will cancel the Entire Purchase Order. Continue? (10200,228)

                 The action that you are taking will cancel the entire Purchase Order. If you do not want to cancel
                 this purchase order, then you cannot perform the action at this time.

      Click the         icon .
   4. The following message will appear.
                 PO cannot be canceled once a change order has occurred. Cancel all lines instead? (10200,334)

                 The PO has either been dispatched or change order processing has occurred. You cannot cancel
                 the entire PO but you cancel all the lines.

          Click the              icon
   5.           The Purchase Order
   6. Click the Budget Check icon                 . Once Budget Check runs successfully the funds
      will be released.
   7.           The Purchase Order




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Appendix E: Closing a Purchase Order

   1. Find the Purchase Order that needs to be closed.

   2. Click on the RED finalize document icon (                      ).

             NOTE: Without this step, the monies from the encumbrance will create a
             pre-encumbrance

   3. The following message will appear.
                        i. This action will finalize all eligible distributions for this PO. Continue? (10200,335)



   4.     Click the               icon .

   5. The screen will return to the purchase order.

                        i. NOTE: The Budget Status field is now set to “Not Ckd”

   6.                 the Purchase Order

   7. Click the Budget Check icon . Once Budget Check runs successfully the
      requisition is now closed allowing for reductions of the encumbrance to be
      released to free balance.

             NOTE: The release of the funds to free balance will occur with the process
             run by Purchasing. (See Step 8)

   8.                 The Purchase Order

   9. Send an email to procurementservices@uth.tmc.edu:

             a. Purchasing
                     If Business Unit = UTHSC, Purchasing requesting the purchase
                     order be closed. Include in your email the Business Unit,
                     Requisition Origin, Purchase Order number.
                     If Business Unit = UTINT, departments should gain approval from
                     the Internal Service Department for closure. Without verification,
                     Purchasing will NOT close UTINT purchase orders.
             OR




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          b. Employee Reimbursement Team
                  If Business Unit = UTTRV, departments should gain approval from
                  the ERT for closure. Purchasing will NOT close UTTRV purchase
                  orders.

                            Closing a Purchase Order

   WHEN:
                  A purchase order can only be closed after it has been received and/or
                  has vouchers entered against it.

   WHY:
                  A purchase order should be closed only after the vendor is aware
                  (except for POS orders) of the necessity for closure and when:
                       1. it is no longer viable or,
                       2. it can not be cancelled.

   HOW:
                  See attached procedure

   WHO:
                  The closing of a purchase order is a joint effort between the issuing
                  department, the processing department, and the vendor.
                  Departmental buyers initiate the process.




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Appendix F: Signing Contracts

What:           Acquiring a signature on a contract when requesting goods or
                services from a vendor or prospective vendor.


How:
                1. Department representative forwards sample/draft contract to
                   Purchasing for review prior to signature or commitment.

                2. Purchasing Buyer reviews and revises as necessary terms of
                   contract.

                3. Purchasing buyer enters negotiations with prospective vendor.

                       a. If agreement is reached,
                               i. Purchasing Buyer informs department to enter
                                  requisition for encumbering funds.
                              ii. Purchasing Buyer signs contract and returns to
                                  requesting department for handling.
                       b. If agreement is NOT reached,
                               i. Purchasing Buyer informs department that
                                  negotiations were not successful and that
                                  alternative vendor/venue should be considered.
                              ii. Purchasing Buyer instructs department that no
                                  requisitions can/should be issued regarding this
                                  contract.

Who:            Only Procurement Services has the delegated authority to sign
                contracts for the acquisition of goods or services regardless of
                amount. Neither faculty nor staff have delegated authority to sign
                contracts on behalf of the University.

Restrictions:
                       Funding:       N/A
                       Amount:        Any amount




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