How to buy:
Purchasing from public funds is a complicated business. The goal of this section is to clearly walk you through the process. Though complicated, it is not necessarily difficult. The process is very logical and continually returns to the foundation of public purchasing, which is the seeking of competition for the goods and services we purchase. If you keep this in mind, you will hopefully find the following information less dogmatic and more focused. Purchases may be made using one of three processes:
- a small purchase (purchased and processed for payment by the department),
- a purchase requisition (processed and ordered by the Purchasing Department, received and approved for payment by the department),
- the purchasing card (issued to the individual employee to make small purchases). In all cases the myriad of rules and regulations established at the federal, state and university levels must be followed.
Small purchases
Departments may make purchases for good and services less than $5,000. It is recommended the department obtain at least three price quotes to ensure the lowest possible price has been obtained. A record of these prices should be retained by the department for future reference. State term contracts should be used whenever possible. The item may be purchased from non-contract vendors if better pricing is available. In most cases the departmental bookkeeper will enter the purchase information into the financial system for the person making the purchase. Purchases exceeding $5,000 may not be split into multiple payments as a way to avoid sending a requisition to the Purchasing Department. Employees making small purchases are encouraged to attend a purchasing class (register).
A receipt from the vendor must be given to the departmental bookkeeper. Accounts Payable compares the small purchase entry made in the financial system to both the receipt and to the invoice received from the vendor. If everything matches, the invoice is paid.
In some cases the vendor will require a hard copy document prior to filling the order. A copy of the university's small purchase order form may be faxed to the vendor.
Each small purchase requires a category code for identification of the type of purchase. This is used for internal reporting purposes.
Purchase requisitions
When the cost of a purchase is $5,000 or above, a purchase requisition must be entered into the financial system. Employees are required to attend a class on this process (register) before access to the financial system is given. Purchase requisitions must receive two approvals (department and college) before being electronically routed to the Purchasing Department. Once received in Purchasing, the requisition will be assigned to a Purchasing Agent. See Purchase Requisition Status to determine which agent has your requisition and what commodities each agent processes.
In order to process a requisition into a bid document we need a couple of things:
- a statement of the goods to be purchased, or the scope of work to be performed, or a description of services, or specifications for competitive bidding
- a recommended list of vendors, if desired,
- a justification memorandum ,
- a waiver of competitive bidding (if required)
This information is submitted to the Purchasing Department to assist in developing a complete bid document.
One of two things happens to a purchase requisition. It may be turned into a Request for Quote, which we send directly to vendors and ask for pricing on items. Or it may be posted on the State of NC purchasing web site, which is used to seek competitive bids from vendors registered to do business with the state. Thousands of vendors are currently registered.
The university has purchasing authority up to $500,000 for goods, and no dollar limit on services. When we believe a purchase will exceed $500,000, we must forward it to the State of NC Division of Purchase and Contract for processing.
Once competition has occurred, we will forward to the department all of the quote responses that were received. The department is responsible for evaluating all responses, based on previously developed evaluation criteria for the specifications that were listed in the bid document. The department will then send us a written recommendation for award, which we review. When this is approved and references have been checked, Purchasing will issue a purchase order to the vendor.
At the time items are delivered to the department it becomes the department's responsibility to review the delivery for accuracy, inspect for damage, and enter a receiving report against the purchase order in the financial system for payment.
Accounts Payable uses a three-way system to ensure an invoice is OK to pay. They compare the purchase order, the receiving report, and the invoice from the vendor. If everything matches, the invoice is paid.
Purchasing card (Pcard)
Purchasing cards are issued directly to employees and have a single transaction limit of $2,500. In special cases, and with approval from the department head, the single transaction limit may be increased to $5,000. At the end of each monthly billing cycle the cardholder is required to reconcile all purchases for that period. This is an automated process that is significantly more efficient than the small purchase.