Purchasing

Approving Authority:	University Council
Establishment Date:	27 February 2003
Date Last Amendment:	11 August 2005
Nature of Amendment:	General revision
Date Last Reviewed:	August 2005
Publication Reference:	23 August 1999
Contact Officer:	Director, Financial Services

Introduction

Purchasing is a decentralised function at Flinders University and accordingly a wide range of personnel may find themselves involved in the purchasing process.

6.1 Purchasing Policy

6.1.1 General

The University will conduct purchasing with the aim of achieving ‘value for money’ whilst using ‘fair trading’ practices.

• ‘Value for money’ describes purchases that have the best compromise between a variety of attributes which include but are not limited to:

– fitness for purpose
– whole of life costs
– fair market price
– timely delivery
– post delivery support
– effective warranty
– conformity to law including, Occupational Health and Safety
– time taken to make the purchase
– environmental protection

• ‘Fair trading’ means that there is open and effective competition and that purchasing is undertaken with integrity and fair dealing.

6.1.2 Risk Management

Managing risk is fundamental to good purchasing and contracting. Staff involved in procurement decision making are expected to include identifying, analysing, evaluating, treating and monitoring risks as part of the procurement process in accordance with the University’s Risk Management Policy.

6.1.3 Conflict of Interest

Staff shall ensure that they are not, or are not perceived to be in a conflict of interest with any supplier. Those staff who have, or may be perceived to have, a vested interest in the outcome of the purchase should disclose any conflict to their supervisor and discuss whether they should exclude themselves from any role in the purchase

6.1.4 Segregation of duties

The University adopts system controls to minimise risk as follows;

• Staff with responsibility to create purchase orders will not have the access to create vendors or process invoices
• Staff with responsibility to create vendors and/or process invoices will not have the access to create purchase orders

6.2 Purchasing Procedures

6.2.1 Acquisition Planning

Procurement is no different to other management functions and planning is essential to ensure the best outcome. The officer responsible for initiating a requirement to purchase a service or goods >$100,000 shall prepare an acquisition plan for approval by the delegated officer or committee responsible for authorising the expenditure. Submission of an acquisition plan for purchases <$100,000 shall be at the discretion of the officer responsible.
The Acquisition plan shall address the following elements –

1. consultation process related to acquisition
2. reason for acquisition
3. supply market research
4. business case for acquisition
5. risk assessment
6. development procedure for specification of the acquisition
7. form of contract to be used
8. process for seeking quotes or tenders
9. management process for contract.

There are a variety of processes which may be adopted for acquisition of goods and services as indicated in the table below:

Processes for acquisition

Purchase/payment method	Intended for purchase of
Petty cash	Sundry items to the value of $50.00
Credit cards	• Consumable items normally in the range of $50.00 – $2,000 • Travel and accommodation charges • Subscriptions • Computer software (minor)
Fuel cards (Mobil)	Purchase of fuel for vehicles
Purchase orders	Acquisition of: • Expensive consumables • Assets • Goods and services where a long lead time is anticipated • Items > $2000 where credit card is not used • Inventory stocks • Hazardous goods
Contracts	• Acquisition of major assets • Agreement for construction of assets, eg. buildings, equipment • Service agreements • Maintenance agreements • Significant consulting agreements

The process chosen will be appropriate to the nature and value of the goods and services required. Personnel are encouraged to use the process which (for them) is the most efficient and effective whilst being the most appropriate within the framework of these guidelines.

Expenditure authorisation must be in accordance with the University Financial Delegation.

The University is able to make purchases under Commonwealth and South Australian State Government supply contracts as well as common use contracts arranged by the university eg. stationery.

Staff authorised under the provisions of the University Policy on Delegations of Authority to Enter into Contracts can authorise contracts on behalf of the University. Advice on the management of contracts can be found at the University’s Contract Management site.

These procedures apply to both internal and external transactions.

6.2.2 Selecting a Supplier

The process of selecting a supplier must ensure that ‘value for money’ is obtained and ‘fair trading’ is observed. A number of options exist and the process to be used will depend upon the nature and the value of the items to be purchased.

Any conflict of interest must be declared when selecting a supplier as per 6.1.3.

Value thresholds used in this section relate to the total estimated cost of a purchase and not to individual line items.

Splitting of requisitions or purchase orders is not permitted.

It is recognised that there will be occasions where there are insufficient suppliers to meet the purchase requirements. In such cases this should be recorded and quotations should be obtained from the available suppliers.

If purchasing under a University common use contract or a Government Contract, where the price is considered acceptable, no further offer is required.

The selected methods of supplier selection are :

Value	Alternatives
<$5,000	Single oral or written quote
$5,000 to < $10,000	Two oral or written quotes
$10,000 to < $15,000	Two written quotes
$15,000 to < $100,000	Three written quotes
> $100,000	Tender or RFP unless otherwise exempted.

Method	Alternatives	Considerations
Request for Proposal (RFP)	open request	used where suppliers are not generally known and where there is a need to test the market thoroughly
	selective request	used where there is a known set of suppliers likely to be able to satisfy requirements
Tender	open tender	used where market is not known and value exceeds $100,000
	selective tender	used where market is known and where there is a set of preferred suppliers of the goods or services and value exceeds $100,000

The Request for Proposal and Tender processes are more complex processes used where the value of the acquisition is large and where there may be considerable details involved in the specification of the goods and/or services required. Both require detailed specifications to be drawn up before proceeding.

The Tender process shall be carried out in accordance with the requirements of the Flinders University Tender Board.

The University has established a Tender Board for the purpose of awarding tenders. The Board members are the Vice-Chancellor, Executive Director of Administration, Manager, Buildings and Property and Manager, Information Services Division.

An open RFP may be used as a means of short-listing prior to a closed Tender.

For high-valued acquisitions (greater than $100,000) an RFP or Tender is required unless exemption has been obtained in writing from the Executive Director of Administration. Grounds for exemption may include the following: incumbent supplier, common standard, preferred supplier.

Tenders may be called for acquisitions of lower value than $100,000 where it is believed that this is more appropriate to achieve financial or other benefit to the University.