Purchasing Rules & Regulations

1. Purchasing Rules & Regulations Overview of UO Purchasing & Contracting Rules, Regulations and Policies Presented by: Greg Shabram

2. Purchasing Rules & Regulations This training is required to obtain and exercise Level 1 and Level 2 Contracting Authority

3. UO Purchasing & Contracting Policy • Based on Oregon University System Oregon Administrative Rules (“OAR(s)”) • OUS OARs are still in full force and effect even though the Governance Transition occurred July 1st • Approved Forms Use Required • All Forms were updated as part of the Governance Transition – please go to PCS’ Website

4. Oregon Administrative Rules • Chapter 580 – Divisions 61 & 62 • OUS Code of Ethics • Annual Statement – still required • UO Procurement Evaluation Declaration • Participation in Competitive Procurement • Family Members • UO Employees & Former Employees • Gifts from Vendors

5. Fundamental Concepts • Ethics Requirements – OAR 580-061-0000 • Conflicts of Interest • Family Relationships & Employment Conflicts of Interest • Gifts • Internal Controls • Fraud Factors • Segregation of Duties • Management Review

6. OUS Code of Ethics https://casitweb.uoregon.edu/pcsforms/code-of-ethics PCS Policy Page 1

7. UO Procurement Evaluation Declaration of No Conflict of Interest http://pcs.uoregon.edu/sites/pcs.uoregon.edu/files/Procurement%20Evaluation%20Committee%20Member%20No%20Conflict%20Form_081314_cds_0.pdf

8. Conflicts of Interest • ORS 244.040(1) – Prohibits an UO employee from using employee’s position to obtain personal financial gain for the employee or a relative if the personal financial gain would not otherwise be available for UO employee’s position. • ORS 244.120 – Concerns handling actual and potential conflicts of interest. An “actual conflict of interest” means any action, decision, or recommendation by an UO employee while acting in the capacity as an UO employee which would be to the private pecuniary benefit of that employee or that employee’s relative. A “potential conflict of interest” means any action, decision, or recommendation by an UO employee while acting in the capacity as an UO employee which could be to the private pecuniary benefit of that employee or that employee’s relative.

9. Family Relationships and Employment • OAR 580-22-0055(2) – No academic staff member, without permission of the immediate supervisor, shall participate in employment decisions, supervision or grievance adjustment concerning or involving the staff member’s spouse, child or stepchild. • UO Policy – No members of the faculty or administration shall participate in making recommendations or decisions involving employment, compensation, promotion, leave of absence, grievance adjustment, termination, or in the supervision of their relatives without prior permission of their immediate supervisor.

10. Ethics Rules • Possible to violate the law not just by receiving something of financial value but also by giving or providing something of financial value to a public official. • The civil penalties for non-compliance are substantial, and the individual is personally liable for such penalties.

11. Gifts • During a calendar year, a University employee or a relative or member of the household of the employee may not solicit or receive, directly or indirectly, any gift or gifts with an aggregate value in excess of $50 from any single source that could reasonably be known to have legislative or administrative interest in the University.

12. Activity 1Class Materials Purchase • Department X is purchasing curriculum materials required for a specific class at value of $500. • The vendor set-up process reveals that the owner of the company is a current UO employee. • Can UO purchase from this vendor? Would the result be different if this vendor was also teaching a workshop?

13. Internal Controls • More than one person involved in purchase transaction • Determine applicable policies & procedures • Consult staff/campus for advice • Collect maintain documentation • Staff Training

14. Fraud Triangle

15. Opportunity • Access to funds • Access to inventory • Ability to process transactions

16. Segregation of Duties • Department Purchasing Profile • Examples of Duties: • Commit Funds • Approve Purchases • Receive Goods/Services • Process Invoice Payment • Approve Invoices • Management Review

17. Importance of Management Review • Perception of detection is directly correlated to the occurrence of occupational fraud. • Management plays a key role in the perception level of any operation they are over.

18. Authorities Authority to Commit Department Funds (to allow use of budget funds) vs. Contracting Authority (enter into a written or oral contract)

19. Authority to Commit Departmental Funds Authority to internally allow use of department funds (i.e. who allows the purchase within your department – not who actually makes the purchase.)

20. Authority to Commit Departmental Funds, Cont. • Authority designated from Budget Authority (Dean, Director or Department Head) • Part of Internal Controls • No PCS required training • NOT contracting authority or authority to enter into a contract.

21. Authority to Commit Departmental Funds, Cont. • Examples of Authority to Commit Funds • Department director approves a staff member to spend $1,500 in dept funds for the purchase a laptop computer • Department director approves a staff member to submit a hotel agreement for the department’s upcoming seminar to PCS for processing and approval

22. Authorities Designation to Commit Funds Budget Authority Department Staff

23. Contracting Authority Authority to enter into an oral or written contract on behalf of UO

24. ContractingAuthority, cont. • Examples of Contracts • Proposals/Quotes/Estimates/Letter Agreements submitted to UO by a contractor for official acceptance • Contracts/Agreements/MOU • Purchase Orders • Personal Services Agreements (PSC) • Phone & Internet Orders

25. AuthoritiesUO Contract Officers • Chain of Delegation • University Board • UO Contracting Authority Delegated to Contract Officers by UO’s VP of Finance and Administration • August 30, 2012 Memorandum regarding Delegation of Signature Authority (still effective) https://pcs.uoregon.edu/content/commitment-funds-and-delegated-signature-authority

26. AuthoritiesLevel 1 and Level 2 Contracting Authority • Delegated by PCS Director • Level 1 Contracting Authority (L1CA) • Less than or equal to $5,000 • Purchase Order, Direct Billing Invoice • Must use Approved PO Form • Level 2 Contracting Authority (L2CA) • Less than or equal to $25,000 • Approved level 2 contract forms Delegated Department Personnel Delegated Department Personnel Delegated Department Personnel

27. UO Department Approval Authorization Obtain by completing the Department Approval Authorization Form Available online at: https://casitweb.uoregon.edu/pcsforms/

28. Activity 2Software Renewal • Department X receives a renewal notice and contract amendment from the vendor to renew the software they use for managing their projects. • The original purchase was $15,000, the renewal amendment gives them the option to renew for an additional 3 years at $5,000/year. • The Director of Department X tells the Project Manager he approves the 3 year renewal. • The Project Manager has Level 2 Contracting Authority.

29. UO Purchasing & Contracting Responsibilities Programmatic Review Budgetary Review Compliance Review

30. UO Purchasing & Contracting Responsibilities • Programmatic Review • Does the purchase have a business purpose that relates to department’s objectives and supports UO’s mission? • Review and confirmation is the primary responsibility of Department’s Budget Authority and their designees.

31. University Purchasing & Contracting Responsibilities • Budgetary Review • Are funds available for purchase? • Budgetary review is the primary responsibility of the Department’s Budget Authority and their designees. • Departments must ensure funds are available and properly budgeted prior to making any purchasing commitment.

32. UO Purchasing & Contracting Responsibilities • Compliance Review • Proposed purchase or contract meets all applicable laws, regulations, policies, procedural requirements and that the purchase or contract is completed using good business practices. • Compliance review and confirmation is a shared responsibility of PCS and a Department’s Budget Authority and their designees.

33. Contracting with Individuals • All individuals must be Independent Contractors. - No UO direction and control - Rarely UO employees (requires PCS review and approval) - External review when services are provided in foreign countries - Must complete Independent Contractor Certification (See Supplement)

34. Policies • Qualified Rehabilitation Facilities (QRF) • Minority, Women Owned, Emerging Small Business (MWESB) • Printing and Mailing • Catering • Confidential Recycling • Property Control • Surplus Property Disposal • High Risk Equipment Tracking • Public Records

35. Internal Approvals • See Approvals List • Sponsored Projects Services (SPS (formerly ORSA)) • Information Technology (CIO Approval) • Business Affairs Office • Furniture Purchases • Design and Editing Services • Marketing and Brand Management • UO General Counsel Review – Only secured by PCS

36. Activity 3 Temporary Services • Department X needs to hire or obtain temporary services for a two week project. • Temps, Inc. provides temporary workers with hourly rates of $13/hour. • Temps-r-Us, Ltd., a Qualified Rehabilitation Facility (QRF), provides temporary workers with hourly rates of $14/hour. • Which vendor will Department X need to work with to hire the temporary worker?

37. What Dollar Level Requires a Written Contract? • Personal Services – ANY $ amount • Personal Services are services requiring specialized skills, knowledge, and resources. Examples include: physician, consultant, artist, etc. • Personal Services Contract template appropriate • Goods and Trade Services - $5,000+ • Trade services generally do not require specialized skill and certification. Examples include: janitor, photocopier maintenance, etc. • Purchase Order template appropriate

38. UO Purchasing Methods • Invoice – under $5k • Direct Billing Account – under $5k • Purchase Order – required over $5k • UO Custom Contracts • UO Contract Forms • Vendor Contracts

39. Procurement Thresholds • Direct Procurement ≤ $25,000 • Informal Procurement $25,000.01 to $150,000 • Formal Procurement $150,000.01 + • Alternative Procurement

40. When Competition is not Required • Price Agreements: When competitive requirements have been fulfilled & the contract is open for UO to use. • State of Oregon Contracts - ORPIN • Other Public Entity Price Agreements • Retainer Contracts • Cooperative Agreements

41. When Competition is not Required, Cont. • Emergency Contracts • Sole Source • Special Entity Note: PCS review and approval of ANY Emergency or Sole Source contract is required before proceeding with procurement.

42. When Competition is not Required, Cont. • Exemptions from Competition • Department internally reviews and determines if an exemption applies and if using the exemption is in the best interest of the department and UO • PCS available for assistance and support • PCS review and approval of exemptions required before proceeding with procurement

43. Activity 4Computer Purchase • Department X is purchasing 20 computers for an estimated value of $1,500 per computer. • What considerations or steps need to be taken when proceeding with this procurement.

44. Activity 5Subscription Purchase • Department X is excited as they are purchasing enterprise-wide software including hiring a consultant to customize, install and deploy the software in the amount of $300,000. The department just learned that there is an exemption from competition for software purchases. • What approvals are required to complete the purchase?

45. Required Records • Minimum specifications • All award criteria • Solicitation documents • Documentation of advertisement • Vendor communications • Vendor quotes • Copy of purchase document • Documentation of all required approvals • Documentation of purchase completion • Documentation of purchase payment • Notes page to document vendor performance or department satisfaction

46. Required Records, cont. • Individual departments are the department of record for purchasing and contracting transactions • UO Archives Record Retention Schedule http://libweb.uoregon.edu/records/schedule/sections.html

47. Activity 6Public Records Request • 3 year contract for hiring temporary personnel is expiring. • A potential vendor has submitted a public records request to the Public Records Office to obtain copies of the documentation for the prior solicitation and all records related to the current contract. • The Public Records Office has requested these records. What is your role in responding to the request from the Public Records Office?

48. Activity 8Hosting Conference • Director of Department X tells his assistant they will be hosting a conference at the Red Lion and lunch will be covered as part of the conference. • The Director asks the assistant, who has Level 2 Contracting Authority, to place the reservation and confirm attendance. • The Red Lion sends over a letter with the menu and attendance confirmation to be signed.

49. Activity 9Consultant Purchase • Department X is hiring a consultant to analyze data generated via a campus survey and is funded with grant $’s. The contract may exceed $35,000 for year one and they would like to have the option for two additional years. • A firm was named in the grant to perform this work. • Is competition required? If no, why not? If yes, what type?

50. Tools & Support • Policy • Practitioners Guide • Training • Templates • Written Procedures and Instructions • Website • Direct assistance from PCS Staff via phone, email and in-person meetings; and • Central Emails: • contract@uoregon.edu • purchaseorder@uoregon.edu • pcard@uoregon.edu • competitionsupport@uoregon.edu