II. ORDERING GOODS and SERVICES
VIA PURCHASE ORDER
A. The Purchase Order and Payment
Timeline
The DEPARTMENT…
- Order request from faculty or staff
- Requisition entered into PReqs Application
by department Initiator
- All required fields are completed
- Valid Master File Key (MFK) is used
- After the requisition entry is completed,
all information on the requisition is validated
- The requisition is submitted to Workflow
- The proper Routing Path is chosen
- The requisition is routed to the individuals
on the path
- Approvers review requisition and approve,
forward to an alternate approver, return it to the Initiator,
or cancel it.
- Workflow routing at the department level
is complete after all individuals on the path have approved
the requisition
- Orders under $3000 are not routed to Purchasing
for approval. After the last person in the department Workflow
path approves the requisition, a Purchase Order number is assigned
and the requisition is uploaded to the system as an Approved
purchase order.
- Orders $3000 and greater are routed to the
appropriate Purchasing Agent via Workflow for final approval.
The PURCHASING Department…
Purchasing Agents (Orders $3000 and greater)
- Review high-dollar requisitions on line, edit
and approve
OR
- Submit for bid (Purchases of Goods and Services
over $10,000 and Professional Services over $25,000), edit,
and approve after bid results are obtained
- Orders over $250,000 require approval by Board
of Regents.
- Orders over $1,000,000 go on Board of Regents
Docket and require 60 days advance notice.
- A Purchase Order number is assigned to the
requisition after final approval by the Purchasing Agent in
Workflow.
- Requisition is uploaded to the system as an
Open purchase order.
- Purchase order is approved in the system by
the Purchasing Agent.
THEN
- Prints ALL Purchase Orders following overnight
batch process
- Faxes or Mails Purchase Order to vendor on
the same day
- Purchase Order report is available for the
departments the day after the order is approved in the system
by the Purchasing Agent.
The VENDOR…
- Receives Purchase Order
- Ships products or provides service to department
- Mails invoice to Accounts Payable
The ACCOUNTS PAYABLE Department…
- Receives invoice and delivers to Invoice Processors
The INVOICE PROCESSORS…
- Verify invoice to Purchase Order on line
- Enter invoice into the A/P system
- Create "Assumed Receipt<$10,000 Voucher"
or "Capital Equipment and/or>$10,000 Voucher."
An e-mail notification sent to Requester or Designee.
The DEPARTMENT…
- Receives products or services from vendor
- Receives e-mail notification that voucher(s)
have created
- Receives Assumed Receipt Voucher, approves,
notes date received and files OR
- Receives Capital Equipment and/or >$10,000
Voucher, approves, notes date received, completes Asset Management
Information. Returns one copy to Accounts Payable and files
department copy, OR
- Receives Voucher and notifies Accounts Payable
to withhold payment
The ACCOUNTS PAYABLE Department
Departments enter Requisitions for goods and
services into the Purchase Requisitions Application (PReqs) on
the FUS Self Service
page at under Purchase Requisitions Production. The information
required on the Requisition form varies depending upon the type
of order, however all required fields must be completed. The Requisition
is validated and submitted to Workflow for the department approvals.
After the departmental approvers have approved the requisition,
the requisition is then routed to Purchasing via Workflow. Requisitions
less than $3000 are completed, and a Purchase Order number is
assigned, after all of the departmental approvals are obtained.
Requisitions $3000 and greater are routed to
the Purchasing Agent after the final departmental approval. The
Purchasing Agent reviews and edits the requisition, and approves
it in Workflow. The purchase order number is assigned and the
PReq is then uploaded to the system as an open purchase order.
Orders are then approved in the system, printed, and dispatched
to vendors. (Note: Under normal circumstances Confirming Purchase
Orders are not sent to vendors).
The printed Purchase Order contains the Requester
name and phone number and the Purchasing Agent name and phone
number. If a question arises, the vendor may contact either the
Purchasing Agent or the Requester.
After the invoice has been received and processed
by Accounts Payable, a voucher is created. After approval of the
voucher by the department, a check for payment is issued to the
vendor.
To view step-by-step instructions for completing
a requisition on the Purchase Requisition (PReqs) System see the
on-line tutorial on the Training
Page
3. Facilitating
the Purchasing Process
Allow 30 days or more for Requisitions for purchases
over $10,000, which will require competitive bidding. For large
capital equipment purchases or projects requiring the purchase
of multiple pieces of equipment, contact Purchasing well in advance
with specifications and lists of potential bidders. Purchases
of $500,000 or greater must be submitted to the Board of Regents
for approval.
Prior to starting a Requisition, plan ahead and
do a vendor search in PReqs. PReq vendor searches will only show
Active, Approved vendors. https://preqs.its.uiowa.edu/preqs/
- Create New Req.
- Click the Magnify Glass
- Search vendor
Searching for vendors ahead and discovering they
are not on the system will allow plenty of time for the following:
- Sending out Vendor Application Form
- E-mailing Purchasing Vendor Team for help.
- Enter Requisitions completely and accurately
on the PReqs System at https://preqs.its.uiowa.edu/preqs/
under Purchase Requisitions Production
The default Freight Terms are DEST-UI. These
terms may be overridden if either the department or vendor specifies
other terms. The following Freight Terms are available in the
Purchasing and Payables System:
- DEST-UI (FOB Destination,
U of I pays freight, vendor owns goods in transit.)
- DEST-VNDR (FOB Destination,
Vendor pays freight, vendor owns goods in transit.)
- FOBDEST-UI (FOB Destination,
U of I pays freight, vendor owns goods in transit.)
- FOBSHIP-UI (FOB Destination,
U of I pays freight, U of I owns goods in transit.)
- Ship-UI (FOB Shipping Point,
U of I pays freight, U of I owns goods in transit.)
- SHIP-VNDR (FOB Shipping Point,
Vendor pays freight, U of I owns goods in transit.)
If freight terms other than the Default are to
be used, please indicate in the Internal Comments section of the
PReq.
Departments are strongly encouraged to set up
individual accounts with UPS, Federal Express, and Airborne for
freight charges. These carriers have negotiated contracts with
the University of Iowa. Departments can take advantage of discounted
rates if they charge their freight to University account numbers.
These rates are most often lower than the rates paid when vendors
charge freight to their own accounts and add the charges to their
invoices. University freight accounts can be used for both outbound
and inbound freight.
Freight account numbers can be obtained from
the Accounts Payable Department. Access their web site: New
Carrier Accounts for additional information and an on-line
application. If you have questions contact Accounts Payable at
335-0655 for further information.
- Long Haul Carriers: On all
shipments where The University of Iowa bears the freight costs,
if the shipment weighs at least 250 pounds, instruct the vendor
to ship on a Freight Collect Basis via Yellow Freight Systems
or Roadway Express, Inc.
- Short Haul Carriers: Iowa
& Adjoining States: On all shipments where The University
of Iowa bears the freight costs, if the shipment weighs at least
250 pounds then instruct the vendor to ship on a Freight Collect
Basis via H & W Motor Express.
- On all shipments where the University of Iowa
bears the Freight Costs, if the shipment weighs less than 250
pounds then instruct the vendor to ship on a Freight Collect
Basis via U P S (United Parcel Service) or Federal Express Ground
Once you have set up freight accounts for your
department it is important to provide these account numbers to
vendors when you place orders. Enter a note in the Vendor Comments
area on the PReq instructing them to charge freight to your account
number. Sample text: “Please ship via (enter name of carrier)
and charge University of Iowa Account # *****.”
The Freight Terms default from the Purchase Order
to the Voucher.
Freight is entered into the “Freight” field on
the Voucher unless it was entered as a line item on the Purchase
Order.
If entered as a line item, the freight is entered
on the Voucher as a payment against that line. (Note: If a vendor
sends more than one invoice for the Purchase Order and freight
was entered as a line item, only the first freight payment can
be processed against that line. Subsequent freight charges will
have to be entered into the "Freight” field on the Voucher.)
C. The Purchase
Order and PO Report
The Purchase Order is generated from a Requisition.
Each night the status of all Approved purchase
orders in the system is changed to Dispatched. These orders are
then printed and faxed or mailed to the vendor by Purchasing the
following day.
Confirming orders are not sent to vendors. If
a department wants a less than $3000 confirming order mailed or
faxed to the vendor they must email Purchasing at Purchasing-ReqPO@uiowa.edu
with the Purchase Order number, address or fax phone. The vendor
receives a faxed or original Purchase Order
View the PO Report on-line on the AP/PO Web Application. Check
it for accuracy. Contact the Purchasing Agent at once to report
any discrepancies. Link: Purchasing
Department names and phone numbers.
D. Additional Purchase
Order Types and Procedures
1. Orders Less Than $3000
On requisitions less than $3000.00 the purchase
order number is assigned after the last departmental Workflow
approval. These requisitions are not routed to Purchasing for
approval. This will allow departments to obtain their PO numbers
in a timely fashion and should eliminate the need for obtaining
advance PO #’s from Purchasing for rush or emergency orders. After
the Purchase Order number is assigned, the PReq is uploaded to
the system. The Purchasing Dept mails or faxes a hard copy of
the PO to the Vendor the following day.
Remember to select “Confirming Order” in PO Type
under the Purchasing Information area on the PReq if you intend
to place the order with the vendor as soon as you obtain the PO
#.
2. Orders Greater
Than $3000
The PO number for orders $3000 and over is assigned after the
last Purchasing Department approval in Workflow. This will typically
be the Purchasing Agent. However, orders $25,000 and over also
require approval from the Director of Purchasing.
3. Blanket Orders
A Blanket Order is a Purchase Order from which
goods and services may be purchased over a given period of time
rather than in a single transaction. Contact your Purchasing Agent
for more information about Blanket Orders. Blanket Orders differ
from standard Purchase Orders as follows:
Blanket Orders:
- are used for more than a single transaction
- $3001 per year minimum
- may be used for items under contract
- are not to be used for the purchase of equipment
items
- encumber funds
- may have limits on dollar amounts set by your
department
- may have other restrictions set by your department
Completion of Blanket Order Requisitions
In addition to the standard Requisition procedures,
keep in mind the following when preparing a Blanket Order Requisition:
- Most Blanket Orders contain only one line
item.
- Include any special instructions in the
Item Description.
- Item Descriptions should begin with "Blanket
Order for ..." and contain size, packaging requirements,
or any other pertinent information to help the Purchasing
Agent bid the product. The Purchasing Agent will pursue competitive
pricing, review existing/shared contracts and/or negotiate
pricing with vendor on all blanket order requisitions for
$10,000 or more annually.
- Blanket Orders must have a minimum of $3001,
if the annual spending is under $5,000, consider using the
Procurement Card instead.
- Blanket orders, not supported by a price
contract, are intended for low dollar, regularly purchased
goods/services. The dollar maximum for each transaction must
be less than $3000. If a department has a per transaction
limit, (i.e; $500 or less per transaction), this should be
stated in the body of the PReq
- If the Blanket Order replaces a current
order, insert “Replaces P.O.# ____” in the Item Description
box.
- Submit quotations, contracts, special information,
order blanks, renewal notices, invoices, potential vendors
or any other miscellaneous items to Purchasing. Note these
in the Internal Comments area.
- Blanket orders will be set up with freight
terms of FOB destination for items under 250lbs. FOB Destination
tells the vendor to charge the freight against The University
contract. The contract rates are available to the entire campus.
Instructing the vendors to use The University contract can
save 30 to 50% on the freight costs. The department should
include their Federal Express or UPS freight account number
to be billed in the body of the PReq. A suggested comment
is: Vendor: Please charge all shipping/freight costs to FedEx
Account# ______________.
- Blanket orders can only have one MFK. The
department is responsible for reviewing and reissuing blanket
orders whenever there is a change in department leadership
or a change in the MFK who key.
- The dollar amount on a blanket order does
not print on the Purchase Order that is sent to the vendor.
At a PA’s discretion, a blanket order may be closed for minimal
activity. Minimal activity is defined as annual spend of less
than $3000 or 12 transactions. The Requester will be contacted
when a blanket order is closed.
- All blanket orders, not supported by a price
contract, with a PO date older than two years will be reviewed
by the Purchasing Agent (PA) to determine whether the blanket
PO should be closed, reissued with an estimated annual spend,
or bid. The PA will review campus wide spending for like items
on blanket orders and Procurement Card purchases.
Invoicing against Blanket Orders
Invoices are entered as Vouchers against the
Blanket Order, generating an expense on the Statement of Accounts.
In cases where more than one MFK is assigned to the Blanket Order,
Accounts Payable processes the amount of the invoice to the first
MFK only. This is done because at the time the Voucher is created
Accounts Payable has no way of knowing how the department will
want the charges split. Due to this fact, we highly recommend
the following:
- One MFK per Blanket Order
- Set up a separate Blanket Order for each MFK
if a small number of MFKs are being used
- Use of a clearing account on Blanket Orders
where many different MFKs are involved
MFK Corrections on Blanket Orders
The MFK distribution on the Voucher can
be changed after the Voucher is created. Corrections
to voucher MFK distributions must be done with Change Vouchers
to the General Ledger. Departments are encouraged to process their
own CVs using the Web http://www.bo.uiowa.edu/~ap-po
or the online General Ledger Support (GLDSS). For more information
on the Web or Millennium CV applications, contact Tracy
Rew at 5-0572. For departments without online access, Accounts
Payable will process CVs based on MFK changes noted on the Voucher
reports returned to them.
MFK changes can also be made in the system to
the Blanket Order itself. However, changes made to the Purchase
Order record affect future Vouchers only. As stated above, Vouchers
already created must be CV’d to correct the MFK. Requests for
changes to the MFK on the Purchase Order record should be directed
via email to Anne Sopher
or to the Purchasing Agent of record on the order.
Note: When an MFK closes, the
department should notify Purchasing in writing to change the MFK
on all Blanket Orders. In some cases, if the Blanket Orders are
old the department may be asked to submit requisitions to create
new Blanket Orders on the new MFK. (Grant flips are handled by
the accounting program and do not require MFK changes to the Purchase
Order.)
Closing Blanket Orders
The closing of Blanket Orders occurs by one of
the following actions:
The department instructs Purchasing to close the order. This should
be done if the department is no longer using the order. Departments
must be sure all outstanding invoices relating to the Blanket
Order have been received and vouchered before requesting an order
to be closed.
Blanket Orders created from an RFQ should not
be used after the contract period has expired. Once all invoices
associated with the Blanket Order have been vouchered, the order
should be closed. The system does not automatically close the
order based on the contract dates. The Purchasing Agent and the
departmental Requester must monitor these dates to ensure the
contract is re-bid at the proper time.
4. Competitive
Bidding
Competition in a free marketplace provides the
best value for the consumer. By encouraging competition among
viable vendors, we ensure The University obtains goods and services
at the best possible cost and quality.
The State Code of Iowa, Federal law and the State
Board of Regents mandate competitive bidding for University goods
and services to ensure fair and open competition. The two most
effective methods of competitive bidding are the Request for Quotation
(RFQ) and the Request for Proposal (RFP). These methods provide:
Increased savings
- Exact communication of wants and needs
- Equal and fair access to all qualified vendors
- Compliance with University, Regent, State
and Federal acquisition regulations and laws
- Improved information provided by vendors
Objective evaluation for awards
- Services of an experienced purchasing professional
- An established contract under which the vendor
is legally obligated to perform
The Request for Quotation (RFQ)
is used for acquisitions based solely on cost. The University
issues Requests for Quotations (RFQs) for all goods and services
greater than $10,000 in value, or $25,000 for Professional services,
unless a sole-source justification is received and approved. At
the Purchasing Agent's discretion, an RFQ may also be issued for
goods and services less than $10,000. The Purchasing Agent routinely
obtains several quotes, seeking the best price available. Purchasing
Agents, in concert with the end users, develop specifications
and send the RFQs to potential vendors. Vendors may then reply
with a bid showing exact price, shipping costs, delivery schedule,
payment terms, and other particulars. Purchasing makes the award
to the vendor who submits the lowest priced offer whose product
meets or exceeds the specifications stated in the RFQ. There is
no discounting or manipulation of prices for products that exceed
the specifications.
Contact the Purchasing Agent if you have any
questions or concerns about a bid, a chosen vendor, or a low-bid
product or service. Link: Purchasing
Dept. staff.
The Request for Proposal (RFP) is
used for acquisitions based on factors in addition to price. Examples
include capabilities, performance, support, service and maintenance.
It is difficult, if not impossible, to always place an exact dollar
figure on the value of these characteristics and services. The
University uses a statistical assessment method as the standard
for making awards based on many factors. The preparation of an
RFP is an involved process, often taking weeks or months to generate
a precise evaluation. Requesters should plan for this type of
acquisition well in advance. The Purchasing Agent shall award
the contract to the vendor whose proposal is in the best interest
of the University.
Professional Service Agreements are
contracts for unique, technical and/or infrequent functions performed
by an independent contractor qualified by education, experience
and/or technical ability to provide services. In most cases these
services are of a specific project nature, and are not a continuing,
on-going responsibility of the institution. The services rendered
are predominately intellectual in character even though the contractor
may not be required to be licensed. Professional service agreements
may be with partnerships, firms or corporations as well as with
individuals.
Professional service agreements for greater than
$25,000 must be selected through a competitive Request for Proposal
(RFP) process unless the service is a sole source purchase that
is appropriately documented. The $25,000 threshold is not based
on a one-time cost, but rather on a cumulative cost for on-going
services under the terms of the project engagement. Professional
service agreements, which are less than $25,000 over the course
of service, may be entered into without using the required competitive
bidding process. Total payment to a professional services provider
for services provided to any one University department may not
exceed $25,000 in a fiscal year, unless subject to competitive
bidding or review and approval by the institutional purchasing
department. Selection of a professional service provider shall
be based on a variety of criteria including, but not limited to
demonstrated competence, knowledge, references and unique qualifications
to perform the services, in addition to offering a fair and reasonable
price that is consistent with current market conditions. Additional
criteria may be used as appropriate to the circumstances.
5. Equipment
a) Moveable
equipment is defined as any moveable property valued at
a unit acquisition cost of at least $3000 which is identifiable,
is not a replacement part, and has a useful life of one
year or more.
Fixed equipment
is defined as an established capitalization level of $5,000
and a useful life (to the university) of more than one year
(including fabricated equipment, purchased computer software,
and computer software developed internally) for all departments
other than University of Iowa Hospital and Clinics (UIHC).
The capitalization level for UIHC departments 7000 through
8699 continues to be $2,000 and a useful life (to the university)
of more than one year. Only and all capital assets
should be charged to 6730 (moveable capital assets) or 6740
(computer software). Items of equipment purchased
with federal monies and considered as federally titled assets
by the funding agency will be so designated by Grant Accounting.
For more information see Property Management Web Site through
the Self-Service site. It is located on the ADMINISTRATION
tab under "Data Access" - PMO (Property Management).
Examples include but are not limited to: elevators, kitchen
cabinets, laboratory casework, building directories, library
shelving, drinking fountains, signage, plumbing fixtures,
building mechanical systems, fixed electronic equipment,
and fixed theater or classroom seating, as well as other
fixtures and equipment installed with the intent of permanent
use in that location. Fixed equipment, which is part of
a capital project, is exempt from the requirements of the
following subsections.
b) Equipment purchases are subject to the
following review procedures prior to the issuance of a purchase
order or any other purchase commitment by the institution.
Equipment with a unit cost of less than $250,000 or a total
purchase cost less than $500,000, will be purchased by the
chief business officer of each institution, acting through
the institutional purchasing agent, as outlined in Section
B of this Policy Manual
Equipment with a unit cost greater than
$250,000 or a total purchase cost of $500,000 to $1,000,000
will be submitted to the Board Office for approval. The
Executive Director will notify the Board of such actions.
At the discretion of the Executive Director, the equipment
purchase may be submitted to the Board for approval.
Equipment costing more than $1,000,000
will be submitted to the Board for approval.
c) The Executive Director
may approve emergency purchases which exceed $1,000,000
to be followed by Board ratification. Emergency purchases
are defined in IAC 681-8.9(4).
d) Any request submitted
to the Board Office for approval pursuant to sections 2
and 3 of this policy will include the following information
regarding the equipment to be purchased.
- Description of the equipment.
- Justification of the need for the equipment.
- Any known alternatives to the equipment
proposed.
- Estimated cost and source of funding.
6. Trade-In Equipment
If you are trading in University of Iowa tagged
equipment against a new purchase, create a separate line item
and include the Property Management tag number in the item description
field and the trade-in amount, as a negative dollar amount, in
the extension field on the Requisition form. Property Management
uses this information to remove assets and to correctly record
the amount of the newly purchased equipment in the asset books
for your department, or “in The University ledgers.”
If disposing of U of I tagged equipment, be sure
to complete the Surplus Form and route to Property Management
to review and pass on to Surplus. Surplus will assist departments
in reselling equipment or disposing of obsolete equipment. Depending
on the type and value of the item being resold, a percentage of
the proceeds may be returned to the department. Contact Joe Hennager
at 5-5001 for more information.
For additional information on disposing of equipment,
see The University of Iowa Operations
Manual, Part V, Chapter 12.
7. Obtaining
Equipment On A Trial Basis
Due to a variety of legal factors, including
risk of loss, liability, audit trails, ownership, etc., the following
protocol has been established to assist University departments
wishing to test or evaluate equipment prior to purchase:
Equipment requested by University departments
from vendors on a trial, loan, demonstration or evaluation basis
does not constitute a commitment to purchase said equipment. The
requesting department must inform Purchasing before any equipment
with a fair market value exceeding $10,000 is to be tested or
evaluated for more than five days.
Vendors wishing to make arrangements for demonstrations
of their product or equipment must coordinate these plans with
the appropriate Purchasing Agent. The individual receiving the
equipment for their department submits completed Equipment on
Loan or Demonstration Agreement form to Purchasing prior to accepting
the equipment for demonstration, testing, or evaluation.
User department personnel should not indicate
to vendors that the loan, demonstration, testing, or evaluation
of equipment constitutes a preference for that equipment or will
result in an order to purchase that equipment. Competitive purchasing
processes will be used as required by University policies and
procedures. If the vendor who loaned the equipment is the successful
vendor, new equipment must be supplied unless alternate quotations
were allowed for or requested in the competitive purchasing process.
All moving, handling, transportation and applicable
installation costs associated with equipment of this nature are
the sole responsibility of the vendor. The University will not
incur any costs associated with equipment on trial, loan, demonstration,
test or evaluation.
In the event of a loss, the department will contact
Risk Management for instructions and claim forms.
Zero dollar requisitions for trial basis equipment
cannot be entered into the PReqs system. Contact the Purchasing
Agent for assistance with orders for trial merchandise.
Link: Equipment
on Loan or Demonstration Agreement form
8. Sole Source
Purchases
Occasionally, a case will arise where the normal
competitive bidding process is not beneficial. These exceptions
fall under the guidelines for Sole Source acquisitions. A Sole
Source acquisition is a method of purchasing goods or services
with an estimated value greater than $10,000 without issuing a
formal RFQ or RFP. The Sole Source form is part of the Purchase
Requisitions (Preqs) Application.
Valid reasons for allowing a sole source purchase
can be found on the Operations
Manual and may include the following:
- Research continuity
- Product upgrade
- Competition not available
- Critical service/support requirements
The Purchasing Agent has the authority to approve
or reject the justification. Approval does not preclude the Purchasing
Department from securing a formal quotation for the product or
service. Purchasing Agents are empowered to negotiate more favorable
agreements or solicit better pricing, terms and conditions.
9. Auditing of
the Competitive Bid Process
The Office of Naval Research (ONR) has Federal
audit responsibility for all federal funds granted to The University,
and the equipment obtained with those funds. Every 2-3 years ONR
audits The University of Iowa purchasing system and equipment
inventory system to evaluate compliance with Federal Acquisition
Regulations. The results of this audit determine The University’s
eligibility to compete for Federal funds. The ONR regional audit
offices recommend approval or disapproval of these systems to
other Federal agencies based upon their audit findings regarding
the degree of The University’s compliance. The State Auditors
and our own Internal Audit staff also ensure frequent, thorough
review of our processes.
10. Professional
Service Agreements
a) Professional Service
Agreements are contracts entered into to aid University
of Iowa departments in carrying out their programs/missions.
These Agreements cover unique, technical and/or infrequent
functions performed by an independent contractor qualified
by education, experience and/or technical ability to provide
services. In most cases these services are of a specific
project nature, and are not a continuing, on-going responsibility
of the department, except in the broadest sense. The services
rendered are predominately intellectual in character even
though the contractor may not be required to be licensed.
Professional service agreements may be with partnerships,
firms or corporations as well as individuals. Examples of
professionals who provide professional services include
but are not limited to: doctors, accountants, engineers,
software programmers, real estate appraisers, nurses, guest
artists, guest entertainers, guest lecturers, guest musicians,
guest performers and guest speakers.
b) Architectural, engineering and consulting
services related to the planning, design, engineering and
construction of facilities must be retained through the
University’s Facility Services Group.
c) To determine whether the service provider
should be considered a University employee vs. an independent
contract, contact the University of Iowa Human Resources
Department.
d) Selection of a Provider Professional
service agreements, which are less than $25,000 over the
course of service, may be entered into without using the
required competitive bidding process. The $25,000 threshold
is not based on a one-time cost, but rather on a cumulative
cost for on-going services under the terms of the project
engagement and is based on a fiscal year period. Professional
service agreements written to individuals for services beyond
one year must be reviewed to determine the absence of an
employer-employee relationship. The requesting department
must have the supplier of services sign the Professional
Service Agreement found at the University
of Iowa’s e-forms web site. No changes can be made to
this agreement form without prior approval from the University’s
General Counsel or Purchasing Department. Contact the General
Counsel’s office for an addendum if any changes to the agreement
form are needed. This agreement and any addenda must accompany
the voucher and invoice form when requesting payment. The
Director of Purchasing is authorized to sign these agreements.
For assistance with any aspect of this process, please contact
the Purchasing Department.
Professional service agreements greater than $25,000 must
be selected through a competitive Request for Proposal (RFP)
process or the department must submit a Sole Source Justification
to Purchasing for approval prior to services being rendered.
The RFP process ensures the most qualified individual or
firm for a particular job is selected and that proper procedure
is followed, as required by The Board of Regents.
Selection of a professional service provider is based on
a variety of criteria including, but not limited to, demonstrated
competence, knowledge, references and unique qualifications
to perform the services, in addition to offering a fair
and reasonable price that is consistent with current market
conditions. Additional criteria may be used as recommended
by Purchasing or appropriate to the circumstances. Upon
completion of the evaluation of qualified proposals and
when selection of a successful vendor has been made, the
Purchasing Department will issue a Memorandum of Agreement.
e) Scope of Work The Scope of Work documents
all elements of the work and magnitude of the project, reflecting
the mutual understanding of the parties. The scope of work
must be consistent with the project and services described
in the Request For Proposal (RFP). The scope of work should
be attached to the Memorandum of Agreement or incorporated
into the agreement by reference to a specified RFP document.
f) Contractor Accountability Work requirements
should clearly define all performance objectives, work expectations
and project milestones, and hold the Contractor accountable
for successful completion of the resultant agreement. Requirements
may include, but not be limited to, reports, training sessions,
assessments, evaluations or other tangible services.
g) Terms and Conditions for Professional
Service Agreements. Special terms and conditions for professional
service agreements are those that include elements that
may go beyond many others routinely included in the University’s
standard contractual Terms and Conditions, such as those
specified in h-m below. Iowa law mandates that these terms
be included in all agreements for professional services.
h) Performance Requirements Performance
requirements should be precise and written in such a way
that it could easily be determined if and when the contractor
has successfully fulfilled his/her obligations under the
Agreement. Consequences for noncompliance such as non-payment
and/or termination of the contract must also be defined.
Scheduled due dates that specify milestone targets must
be clearly identified and may include, but not be limited
to, regular meetings scheduled to evaluate progress, identify
problem areas to determine actions to be taken to resolve
any concerns, dates for formal written reports, required
oral progress reports, and contract monitoring requirements.
i) Period of Performance The resultant agreement must specify
a start date and a completion date. While there may be exceptions,
in most circumstances an end date to the agreement will
be required. If an end date cannot be determined, a maximum
time limit or maximum number of hours must be stated.
Agreements with organizations are typically written for
a specific term of successive years. In some instances,
these agreements are annually renewable. Other provisions
of an agreement may include a renewal clause beyond the
original term of the agreement.
Extended term agreements for individuals are discouraged
and departments should discuss their needs with the University
of Iowa Human Resources Department.
j) Compensation and Payment Compensation
and payment terms include all elements relating to cost
and payment, such as maximum cost, (i.e., not to exceed
cost), cost per deliverable, hourly rates for individuals
providing services, number of hours required, allowable
expenses and total authorized for expenses, payment, and
invoicing procedures. The University ordinarily does not
prepay costs for professional services. Any exception to
this policy must be forwarded to and approved by the University
Controller. Additionally, compensation and payment terms
should also include a statement as to whether the University
will pay expenses incurred by the Contractor and, if so,
which ones. Such expenses may include, but not be limited
to, airfare (economy or coach class), lodging and subsistence
necessary during periods of required travel; expenses incurred
during travel for telephone, copying and postage, and private
vehicle mileage. If other types of expenses are allowed,
they must be clearly defined.
All travel expenses must be documented in writing and are
reimbursed at the current University travel reimbursement
rates and in accordance with the University’s travel policy.
The agreement should state the maximum dollar amount allowable
to be paid for expenses. Invoicing instructions should be
included in the agreement.
The agreement should define the information and documentation
required justifying payment. At a minimum, payment documentation
should include the agreement request for proposal number,
purchase order number, date(s) service was provided, description
of services provided or any goods received, and approval
for payment.
The approval for payment can be documented by the initials
of the approving staff and date on the contractor’s invoice,
or by an electronic approval process.
The University reserves the right to withhold ten percent
(10%) from any payment requested until the University makes
acceptance for completion of the services rendered.
The agreement should state how often invoices should be
submitted and require that the invoice include sufficient
detail and back-up documentation to determine the appropriateness
of the charges.
All invoices must be sent to the University of Iowa Accounts
Payable Department, 202 PCO, Iowa City, IA 52242-1460.
k) Performance Monitoring The department
project managers should monitor the compliance of the terms
and conditions of the agreement and applicable laws and
regulations. Monitoring will help prevent non-compliance
by identifying and resolving potential problems and by providing
constructive and timely feedback to the Contractor. In addition,
the project managers should assess the Contractor’s progress
towards deadlines and completion of work, to ensure the
project’s completion.
l) Provision of Liability The Contractor
providing service will be held responsible for any damages,
costs or liability, which result from the Contractor’s activities
whether such activities are by the Contractor or subcontractor
or by anyone else directly or indirectly employed by the
Contractor under the agreement. The Contractor will be required
to show proof of insurance coverage and workers compensation
compliance with statutory requirements, in the form of a
Certificate of Insurance. The Certificate of Insurance shall
be endorsed to include the State of Iowa, the Iowa Board
of Regents, the University of Iowa, their agents, officials
and employees as additional insured. The contractor and
its insurers providing coverages shall waive all rights
of subrogation or recovery against the State of Iowa, the
Iowa Board of Regents, the University of Iowa, their agents,
officials and employees. This section of the contract must
be reviewed by the Risk Management Office prior to approval.
m) Conclusion of the Contract Upon conclusion
of the agreement, an exit review between the Parties to
assess the entire project scope may be beneficial. Though
not necessary, this type of review may yield additional
information for refining and enhancing processes for future
projects, and foster continued relationships between the
Parties. If this option is selected, it should be included
as part of the “Scope of Work” section of the agreement.
11. Confirming
Orders for Emergencies
Remember, Confirming Purchase Orders
are an exception to the normal process.
- Rush or emergency purchase order numbers for
orders $3000 and over must be obtained from the Purchasing Agent.
Departments with emergencies will be required to enter a Requisition
in the PReq system and send it through Workflow with all required
signatures. Contact the Purchasing Agent with the Requisition
ID. If competitive bidding is not required and if the Purchasing
Agent approves the requisition, the PO number is assigned as
soon as the requisition is approved in Workflow. The department
can then view the Purchase order number on the PReqs system.
- Purchasing does not send out purchase order
documents to the vendor for confirming orders, unless required
by the vendor or requested by the department due to some special
circumstance. If you have a confirming order you must enter
“Confirming order. Do not duplicate” in the Vendor Comments
or it could cause a duplication of the order. When Purchasing
sees this statement on the Purchase Order they will not fax
a copy of the Purchase Order to the vendor. If your vendor requires
a copy of the Confirming Purchase Order, e-mail the Req/PO team
at: PurchasingReqPO@uiowa.edu.
Indicate the Purchase Order number that should be sent to the
vendor and include the vendor address or fax phone number.
Prohibited Items
Confirming Purchase Orders may not
be used to obtain the following:
- Alcohol
- Construction materials, unless approved by
a Purchasing Agent
- Equipment costing more than $3000 unless approved
by a Purchasing Agent
- Live vertebrate animals except by The University
Veterinarian
- Narcotics
- Printing and Copying
- Travel
12. Sub-Agreements
All orders for Sub-agreements must go through
the Sponsored Programs Office; Jackie
Searls at 335 2158 (required) must be an ad hoc as the last
Workflow approval signature.
13. Copiers,
Printing & Photocopying Orders
All orders for copiers go through the Purchasing
Department. Anne Sopher is the buyer for copiers.
Purchase Orders and Purchasing Cards may not
be used for printing or photocopying orders from outside vendors.
These services are paid on State Printing Orders administered
by the Printing Department. Please contact the Printing Department
for information on how to request printing and photocopying services.
(4-3700)
14. Interdepartmental
Requisitions
Currently, only Requisitions for goods and services
purchased from outside vendors are entered into the PReq system.
Requisitions for goods and services from University departments
must be sent to the department providing the goods or services.
See Interdepartmental
Services at or retrieve form.
15. Computers
Computers less than $3000 should be ordered on-line
when possible. To facilitate this, on the sidebar click on Computers
and you will find links for the vendors. The Purchasing department
contacts for assistance with computer ordering are: Bob
Bruns at 335-0388, or Jayne
Keiser at 335-0305. Sales Representative for Dell is
Kirk AmRhein at 800/274-7799 ext. 62645 and for Apple is Jackie
Specht at 800/800-2775 ext. 46840.
16. Questions
or Problems
Vendor questions: The Purchase
Order contains the Requester name and phone number. If a question
arises, the vendor may call either the Buyer or the Requester.
Check your PO Report for accuracy: Please
view PO Report on-line and call the Buyer immediately if you find
a discrepancy.
Returns: Contact Accounts Payable
in writing regarding the return. Provide the Return Authorization
number and the Voucher number. You may e-mail Accounts Payable
at acntpay@uiowa.edu.
Change Orders: Any change to
a Purchase Order must be approved by Purchasing. If you need to
make a change to a Purchase Order (additions, deletions, other
corrections) call the Purchasing Contact on the Purchase Order.
Please notify the Purchasing Agent if you are contacted by the
vendor. Written notification may be required by the vendor or
by Purchasing.
Questions: When in doubt about
the process, or if you have a problem with a Purchase Order or
a vendor, please call the Purchasing Agent or the main telephone
number (335-0379). Purchasing is located at 202 Plaza Centre One.
Office hours are from 8:00 am to 4:30 p.m., Monday through Friday.
Purchasing
staff
PReq Questions: To
obtain help with the PReq Application, contact PReq@uiowa.edu,
Chris Leichty
or call at 335-0384.
E. Processing Payments
on Purchase Order Invoices
1. The Payment
Process
Accounts Payable processes payments for
Purchase Order transactions. When invoices are received
from vendors, they are audited against the purchase order number
for correct vendor name and remit address, items, price, quantity,
and terms. If the invoice and Purchase Order match, the invoice
is entered on-line in the AP/PO System to create an Assumed Receipt
Voucher report or a Capital Equipment and/or>$10,000 Voucher
report. E-mail notifications are being sent to the requester (or
designee) when PO vouchers have been created. The Voucher report
is created and forwarded with related invoice documentation to
the department for review.
The payment process involves many elements:
- Processing timely payments to vendors, verifying
pricing and terms of the Purchase Order
- Monitoring vendor statements and investigating
invoicing or payment errors
Requesting and processing credit memos
- Providing assistance and direction to departments
in settling disputes with vendors arising from payment deductions
- Providing follow-up service on outstanding
invoices to ensure payment in a timely fashion
- Resolving problems that may arise from payment
deductions from vendor invoices
- Applying refund checks to the proper accounts
- Researching returned checks
Invoices
Invoices must be submitted to Accounts Payable
for auditing, to prepare Voucher reports, and to make payments.
If a department receives an invoice from the vendor, the invoice
must be sent immediately to Accounts Payable, 202 PCO if it is
for payment on a Purchase Order. Write the Purchase Order number
on the invoice if it is not included. Invoices received not referencing
a Purchase Order number are returned to departments or vendors
requesting this information before they can be processed.
Invoice Number
The Invoice number identifies the vendor invoice
being paid, and is usually assigned by the vendor. If the vendor
does not provide an invoice number, the invoice total dollar amount
and invoice date are used, and in some instances the vendor account
number and invoice date may be used.
Short Payments
If a vendor charges inappropriate sales tax or
freight, The University, Accounts Payable will automatically deduct
when processing these Purchase Order Invoices. When this occurs
the Comments field on Voucher Reports will provide information.
The vendor is notified of these short payments with a brief comment
on the check remittance advice.
Credit Memos
If The University has overpaid an invoice, or
if merchandise has been returned, Accounts Payable requests and
applies the credit memo or processes an adjustment voucher to
the same MFK.
If the invoice has not been paid and the credit
memo cancels the entire invoice, the Voucher will be manually
closed.
If the invoice has a balance due after the credit
memo is applied or if the invoice has been paid, Accounts Payable
will enter an Adjustment Voucher. If possible, the Adjustment
Voucher will have a scheduled due date the same as the invoice
Voucher, so the payment will reference both the invoice and the
credit memo. If this is not possible, the credit memo (Adjustment
Voucher) will be applied to the next payment. Payments will not
be made to vendors having credit balances. The AP/PO System will
hold Vouchers until the vendor has a debit balance before creating
a payment.
If you have questions regarding the use of credits
or credit memos, contact the Purchasing
Staff.
Refund Checks
Vendors may issue refund checks for rebates,
returned goods, duplicate payments, credit memos or overpayments.
Refund checks are processed and deposited in the corresponding
Purchase Order’s MFK. Accounts Payable is responsible for requesting
and depositing vendor refund or rebate checks.
Manual Close
Manual Close is the procedure for removing liability
on Vouchers that will not be paid. It decreases the outstanding
payable account by the amount of the unpaid portion of a liability
created from a voucher.
2. Voucher Payment
Types
Assumed Receipt Voucher
This voucher report provides departments information
on invoices, which have been received by Accounts Payable and
entered to the AP/PO System for non-equipment, and purchases less
than $10,000. E-mail notifications are being sent to the Requester
or Designee when vouchers are created. Payments are automatically
made within the voucher terms - the earliest of the Discount Due
Date or the Scheduled Due Date. If for some reason the voucher
should be held before payment is created, please e-mail acntpay@uiowa.edu
or contact one of the credit statement staff listed on the
previous page).
For more detailed information: Assumed
Receipt / Non-Equipment / <$10,000 Voucher
Capital Equipment Voucher and/or >
$10,000
This voucher report provides departments information
on invoices, which have been received by Accounts Payable and
entered to the AP/PO System for capital equipment purchases, and
dollar purchases over $10,000. The AP/PO System automatically
puts these vouchers on a hold status. Two copies of this report
are mailed to the requesting department as well as the e-mail
notification to the Requester or Designee. The department must
complete receipt and equipment information and return the voucher
report to Accounts Payable to release payment. When the completed
voucher report is returned, Accounts Payable will remove the hold
status, which releases the voucher for payment according to the
payment schedule. The voucher copy is then given to Property Management
(Inventory) to update their records, and then microfilmed. If
signed voucher report is not received by Scheduled Due Date, see
Delinquent Voucher process below.
For more detailed information: Capital
Equipment and/or >$10,000 Voucher Reports.
Adjustment Voucher
An adjustment voucher is created when Accounts
Payable enters credit memos, chargebacks, and/or adjusted invoices
in the AP/PO System. Credit memos on blanket orders will create
Assumed Receipt Voucher reports and the e-mail notification will
be included with all other e-mail notifications for vouchers created
that day. For non-blanket orders, a separate e-mail notification
will be sent to the Requester by the credit staff providing voucher
number, vendor name, purchase order number, related voucher number
and dollar amount. Accounts Payable provides the voucher number,
vendor number, scheduled due date, related voucher number and
MFK information on the credit/invoice. This credit will be applied
to the next available check to this vendor. Verify your statement
of account for use.”
For more detailed information departments can access the AP/PO
Web site at www.bo.uiowa.edu/~ap-po/
or Appendix
D
Delinquent Voucher Reports
Delinquent Voucher e-mail notifications for Capital
Equipment and/or >$10,000 are sent monthly to the department
requester or designee. The email serves as notice that these vouchers
were not paid on the scheduled due date(s) and they are on hold
status. Requesters are asked to complete the receipt and equipment
information and return to AP within 10 days or provide information
as to why the voucher should not be released for payment. If the
Voucher is not returned or a reason is not given why payment should
be held, the Vouchers under $25,000 are reviewed and released
for payment by Accounts Payable. On Vouchers over $25,000 a third
follow-up is made via phone call to the requester. For questions
contact Mary Jane Stumpf
at 335-0406.
3. Department
Responsibilities
- Compare Voucher reports and invoices with
receiving records and Purchase Orders for accuracy.
- Review Voucher reports promptly to ensure
that any cash discounts are processed within the voucher payment
terms.
- Receiving records should be maintained for
3 years. Appropriate receiving records could be one of the following
dated and signed: Assumed Receipt Voucher report, delivery/packing
slip, e-mail notification, receiving log or purchase order.
- Return copy of Capital Equipment and/or >$10,000
Voucher to AP with receipt and capital equipment information
completed.
- Process on line CV for MFK changes.
- If problems occur (i.e. damaged product, short
shipments, merchandise returned, overpricing), notify Accounts
Payable to hold the Voucher, request credit and/or process adjustment
voucher.
- For returned merchandise, contact the vendor
for authorization to return. Provide the return authorization
number in writing to Accounts Payable. You may e-mail at acntpay@uiowa.edu.
See return
authorization form.
- Notify the Purchasing contact on the Purchase
Order for all purchase order changes, additions, deletions and
cancellations. You may e-mail Purchasing at purchasing-reqpo@uiowa.edu.
- Verify Statement of Account.
Questions? Before calling Accounts Payable Department,
visit the Frequently
Asked Questions page.
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