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Loyola University Chicago

Purchasing

Introduction to the Purchasing Function

TABLE OF CONTENTS

1.1 - About This Manual
1.2 - Who Should Read This Manual
1.3 - Overview of Purchasing at the University
1.4 - Definitions
1.5 - Contacts


1.1 About This Manual

This Manual identifies the procedures applicable to the purchase of goods and services at Loyola University Chicago. It was developed to promote the use of good business practices, to ensure that the University meets appropriate government requirements, and to limit the University's risk and liability exposure. It is important that all buyers and government funding recipients understand government rules and regulations pertaining to purchasing with government funds, as well as University purchasing policies and procedures, and University accounting policies and procedures.

Buyer compliance with the guidelines contained herein is imperative in providing a more efficient, effective and consistent purchasing process, achieving related University goals and determining responsibility and accountability.

CONTENTS: Following is a brief description of the information contained in the sections of this manual:

Section 1 - Introduction to the Purchasing Function has a brief overview of University purchasing, and includes definitions for terms used in the manual and contact information for the Purchasing Department.

Section 2 - General Policies on Ethics, Conflict of Interest and Gifts contains those University policies and guidelines regarding ethical practices buyers and users of Purchasing services are responsible to follow when making a purchase. It includes the Buyers' Code of Ethics, gift guidelines for employees, the anti-kickback clause, and the University's policy regarding conflict of interest.

Section 3 - University and Purchasing Policies and Guidelines contains Loyola University Chicago policies/ procedures and federal requirements related to the purchasing function, including policies on the University’s credit card, University Environmental Sustainability initiatives, and small, disadvantaged, woman-owned, veteran-owned, service disabled veteran-owned and HUBZone businesses programs.

Section 4 - Supplier Selection contains an explanation of the Pre-Qualified Supplier Program, and the process for determining and contracting with a Pre-Qualified Supplier; sole and single sourcing, bid solicitations; and supplier qualifications and suspension criteria.

Section 5 - Purchasing Options and Services, details procedures for making purchases with other vehicles besides the Procurement Card (i.e., purchase orders, blanket purchase orders, prepayments, etc.), and other University services related to the purchasing function.

Section 6 - Restricted Purchases deals with such things as buying carpeting and furniture, using sponsored research funds, leasing equipment, acquiring services, and several other restricted purchasing activities that require involvement of other organizations and special procedures. 

Section 7 - Forms/ Tools lists standardized documents, forms and supplementary material which can be found on the Purchasing website.

1.2 Who Should Read This Manual

University purchasing policies and procedures apply to all employees who plan or make acquisitions of products, equipment, supplies and/or services with funds held in the custody of the University. This includes purchases made with a University Procurement Card, purchase orders, check requisition, or electronic commerce.

1.3 Overview of Purchasing at the University

Because of the widely varied nature of the University’s activities, all of the commitment activity cannot be performed efficiently by either a completely centralized procurement office or by a completely decentralized operation.

At Loyola University Chicago, a large percentage of buying decisions are made by faculty and staff in the various schools and departments with the assistance and guidance of the Purchasing Department. The University expects all employees to make sound purchasing and contracting decisions that will ensure the continued and efficient operation of the University.

When an acquisition is initiated, University controlled funds are being committed and the buyer is assuring the University that:

• A legitimate University need for the purchase has been identified;
• Pre-Qualified Suppliers have been selected, whenever prudent and possible;
• Sponsored program procurement requirements have been met, when required;
• The University's conflict of interest policy, buyers' code of ethics, gift guidelines for employees, and the anti-kickback clause have been complied with;
• Purchases have been competitively bid or negotiated, when prudent or when required;
• Suppliers are dealt with in a professional manner, consistent with good business practices;
• Purchases will be inspected upon receipt;
• Using small, disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUBZone business concerns and environmentally friendly products have been considered;
• Documentation requirements to support the purchase have been met; and all purchases, once input into the University’s automated financial system, have been reconciled; and acquisitions are fully in compliance with all rules, regulations, policies and procedures, as applicable. 

There are four primary means of purchasing goods and services at the University: Lawson purchase orders, the University Procurement Card (ProCard), Check Requisitions, and web-based ordering. Purchase orders should be utilized when the ProCard use is restricted (non-acceptance by a supplier, or restricted by University or government directive), or when the vendor has imposed their terms and conditions of sale, or standard university terms and conditions are modified through negotiations. The use of personal funds or personal credit cards for the procurement of travel or business related expenses are specifically governed by Loyola’s policy for Travel and Business Related Expenses. Other purchasing means may be required for new campus operations on an interim basis, as approved by the Senior VP for Finance and CFO or his/her designee.

KEY POINTS: For detailed descriptions of the following points, refer to the specific policies and procedures contained in this manual.

• Purchasers are strongly encouraged to use Pre-Qualified Suppliers whenever possible to acquire goods or services.
• The University is committed to considering the use of small, disadvantaged, woman-owned, veteran-owned, service disabled veteran-owned and HUBZone businesses and environmentally sensitive products.
• University employees who make purchases are required to complete all related paperwork and/or electronic processing (Lawson, Web-ordering, Purchasing Checklists with supporting documentation, receipt submittal, source selection justification, price analyses, etc.) in a timely and expeditious manner per the Buyer Actions Matrix. The Purchasing Department can assist with this process.
• Every individual goods transaction of $5,000 or greater requires the establishment of competition (or a written source justification) and the submission of a Purchasing Checklist/Bid Summary Form when a non Pre-Qualified Supplier is used.
• Employees making purchases for the University are prohibited from accepting or receiving gifts, incentives and/or kickbacks from anyone supplying goods and/or services to the University outside of the University Purchasing Policy.
• Personal purchases with a purchase order, University ProCard and/or University funds are prohibited.
• Personal funds or personal credit cards should not be used for the purchase of University goods and services except for those transactions as defined in this manual, or the University Travel and Business Expense Policy. In other instances, if a purchase is made with personal funds, and sales tax is paid, the University will not reimburse the tax portion of the purchase without appropriate documentation of extenuating circumstances. The Senior Vice President for Finance and CFO, or designee, will make the determination if an extenuating circumstance warrants an exception.

1.4 Definitions

The following definitions apply to terms used in this manual:

Accounting Unit / Account
A six digit Lawson Budget accounting unit with an accompanying four digit account identifier, i.e. 100100 (Biology) 6100 (Supplies).

Accounts Payable (AP)
The department responsible for processing supplier invoices, credit memos, check requests, travel and non-travel expense reimbursements. Department is also responsible for administering the University’s Procurement Card Program, as well as establishing and ensuring compliance of policies and procedures related to Procurement Card use.

Acknowledgment
A written confirmation of a sales agreement that the supplier sends to the buyer. Note that this document could alter agreed upon terms and conditions, and in such a case, must be addressed prior to shipment of any acquired goods or services.

Adequate Price Competition
Two or more responsible suppliers/providers competing independently, and submitting priced offers that satisfy the University’s expressed requirements.

Authorized Buyer
A person appointed by the Loyola Purchasing Manager or Procurement Card Administrator to procure goods and services in the name of the University for departments, faculty and staff. The buyer(s) has been trained to initiate and administer purchase orders in the Lawson System, or execute and reconcile purchases with a Loyola ProCard or Check Requisition.

Blanket Order
A purchase order placed with a supplier for goods and/or services that covers a predetermined period of time; often includes Acknowledgment-negotiated fixed prices or discounts associated with specific groups of items.

Buyer Actions Matrix
This matrix indicates Buyer’s necessary actions when spending University Entrusted funds. This form indicates dollar ranges applicable to Pre-Qualified and non Pre-Qualified Suppliers and the necessary steps that must be taken regarding the purchase(s) and its documentation requirements.

Cardholder
An employee authorized to make University purchases using a Loyola Procurement Card.

Change Notice
A written documentation of a contractual change agreed to by a buyer and supplier.

Check Requisition
A form completed by a requesting department asking Accounts Payable to process for the payment of a product or services. The policies for the issuance of a Check Requisition must be followed. Check Requisitions (Payment Requisition) instructions can be found here

Code of Ethics
An agreement by Authorized Buyers to comply with University purchasing ethics when making a purchase with University Entrusted funds.

Commodity Management
A procurement process meant to ensure greater University benefits from the coordination of purchasing activity, where appropriate. Buyers benefit from Acknowledgment-negotiated Pre-Qualified Supplier agreements for frequently purchased items.

Competitive Bid
Two (2) responsible and comparable bids (solicitation of three or more preferred) obtained for a specific purchase; required when a purchase is $5,000 or greater, and a Pre-Qualified Supplier is not used; or when a purchase is $150,000 or more and a Pre-Qualified Supplier is used. The bids should contain price, quantity, description and supplier’s terms and conditions (if not accepting standard university terms and conditions) and reference to a request for quote (RFQ) or proposal (RFP). Supporting documentation of price/cost analysis must be attached to a Purchasing Checklist and Bid Summary Form and forwarded to the Purchasing Department for central retention and auditing purposes.

Confirming Order
A written confirmation of a sales agreement that the buyer sends to the supplier (i.e., copy of the Purchase Order or e-mail).

Conflict of Interest Disclosure Form
An agreement between an Authorized Buyer and the University, to adhere to the University's conflict of interest policy when executing his/her duties as an authorized purchasing agent of the University.

Consortium Supplier
Supplier under one of the purchasing consortiums to which the university belongs, that offers competitively solicited and awarded contracts to university buyers and procurement cardholders. These contracts offer substantial price discounts and other advantages with no buyer time or effort required to solicit other suppliers. These organizations include: E&I (Educational & Institutional Cooperative); the Association of Jesuit Colleges and Universities (AJCU); U.S. Communities; and the Horizon Resource Group.

Contract
A lawfully binding agreement between two or more parties for performing, or refraining from performing, some specified act(s) in exchange for lawful consideration. Contracts can be various types of documents (Purchase Orders, agreements, leases, licenses, letters, etc.) that place the University into a legally binding relationship with another party.

Encumbrance
A commitment of University entrusted funds recorded when a requisition or purchase order is entered into the Lawson system. An encumbrance is relieved when a corresponding invoice is entered into the Lawson system and the actual expense is recognized, or the purchase order or line item is closed.

FOB (Freight On Board) Delivered (Destination)
The ownership (title) of goods transfers to the buyer when the item is received by Loyola University. This is significant when there is a shortage or damage to the goods. It means the supplier will be responsible to file a damage claim with the freight hauler. Note: Motor carrier regulations require that claims for damage must be filed/initiated within a short time frame of the receipt of the shipment.

FOB Shipping Point (Origin)
The buyer takes ownership of the goods at the supplier's dock. If the item(s) is damaged when received, it is the buyer's responsibility to file a claim with the freight company.

HUBZone Business
A HUBZone is defined as a Historically Underutilized Business Zone, which is an area located within one or more qualified census tracts, qualified non-metropolitan counties, or lands within the external boundaries of an Indian reservation. A HUBZone Business is defined as a small business concern that appears on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration (SBA) – Central Contract Registration (CCR).

Legal Counsel (In-house)
The department that handles all of the University's legal matters.

Pre-Qualified Supplier
A supplier that completes a formalized, documented process and establishes a contractual relationship with the University for supplying goods and/or services to the campus community.
A Pre-Qualified Supplier:

  1. completes a formalized, competitive selection process directed by the Purchasing Department and documented for audit purposes;
  2. generally accepts the University’s Procurement Card, Lawson PO, or payment by wire transfer;
  3. signs a contract that details contractual conditions of sale, and guarantees the University pricing, quality, reduction of risk and customer service for a specified period of time;
  4. allows the University to retain the right to compete any single requirement that equals or exceeds either $20,000 or $50,000 depending upon the commodity; and,
  5. agrees to comply with all federal, state, local and University laws, rules, regulations and guidelines.

Pre-Qualified Supplier Listing
The University's directory of current Pre-Qualified Suppliers, listed by the type of goods and/or services provided is located on the Purchasing Department’s website.

Procurement Credit Card (ProCard)
The University's corporate liability credit card, issued by a banking institution, to which a specific employee is assigned use and responsibility for making acquisitions of goods and services, and the reconciliation thereof. (Currently PNC Bank utilizing a Visa Card).

Purchasing Department
The department responsible for administering the University's procurement process for most goods and services, as well as establishing policies and procedures for purchase order and contract use.

Purchasing Manager
A Purchasing Department employee who acts as an agent for the University and a resource for faculty, staff and students; leads Commodity Management Teams, negotiates Pre-Qualified Supplier agreements, and resolves Pre-Qualified Supplier – University disputes.

Purchase Order
An on-line form within the University’s automated purchasing system (Lawson), used to formally document the purchase of goods and/or services when the Procurement Card is not used

Purchase Requisition
A request for goods and/or services forwarded to the Purchasing Department by the Originating Department.

Purchasing Checklist and Bid Summary Form
A form that must be completed and submitted to the Purchasing Department if a single transaction commits funds of $5,000 or greater using a non Pre-Qualified Supplier, or commits $150,000 or greater using a Pre-Qualified Supplier. Whenever a non Pre-Qualified single source, sole source or consultant is used at or above the previously identified dollar levels, an explanation of why that source was selected must be provided. Evidence of acceptable price/cost analysis must also be included whenever
this form is used.

Request for Information (RFI)
A method of solicitation used for gathering information without intent to purchase at the end of the solicitation process.

Request for Proposal (RFP)
A method used to assist the University in gathering information and ascertaining supplier’s intentions regarding products and/or services that contain some unknown elements, without making a commitment until the best source is identified, the specification is finalized, and a contract has been negotiated.

Request for Quote (RFQ)
A method used to have suppliers offer, for a set period of time and for specific items or services, prices, quantities and delivery factors to be used in selecting the supplier.

Risk Management
The department responsible for procuring all institutional insurance, processing claims where applicable, establishing appropriate levels of insurance for suppliers (especially those working on campus), and securing certificates of insurance.

Single Source
One source, among others in a competitive marketplace, which, for justifiable reason (i.e., immediate past experience [performance or contractual], delivery capability, contract or grant identification of specific items(s), compatibility with existing equipment or supplies, specific design or performance features essential in maintaining experimental or administrative continuity, availability of parts or maintenance, or for lack of time in emergency situations) the buyer determines to be most advantageous for the purpose of contract award.

Small Business (SB)
An independently owned and operated concern, including its affiliates, that is not dominant in the field of operation in which it is bidding on US government grants/contracts, and qualified as a small business under the criteria and size standards in 13 CFR Part 121 (see FAR Part 19).

Small Disadvantaged Business (SDB)
A small business concern, that is at least 51% owned and controlled by individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51% of its stock unconditionally owned by one or more socially and economically disadvantaged and whose management and daily business is controlled by one or more such individuals. Foreign branch campuses will abide by these guidelines, to the extent possible, given local law and funding directives.

Small Women-owned Business (SWB)
A small business concern in which at least 51% of the concern is owned and day-to-day managed and controlled by women, or in the case of a publicly owned business, at least 51% of the stock is owned by women, with one or more women managing and controlling the daily operation of the business.

Small Veteran-owned Business (SVB)
A small business concern in which at least 51% of the concern is owned and day-to-day managed and controlled by veterans, or in the case of a publicly owned business, at least 51% of the stock is owned by veterans, with one or more veterans managing and controlling the daily operation of the business.

Small Service Disabled Veteran-owned Business (SDVB)
A small business concern in which at least 51% of the concern is owned and day-to-day managed and controlled by service disabled veterans, or in the case of a publicly owned business, at least 51% of the stock is owned by service disabled veterans, with one or more veterans managing and controlling the daily operation of the business.

Sole Source
The one and only source, regardless of the marketplace, possessing a unique and singularly available performance capability or product for the purpose of contract award.

Supplier/Vendor
Either an internal or external provider of goods or services.

University Entrusted Funds
Funds generated during the course of normal University business proceedings (tuition, gifts/donations, product sales, etc.) and those funds held in trust from granting or contracting agencies or sources (federal, state, and local governments, corporations, foundations, or via subcontract, etc.).

1.5 Contacts

Loyola Purchasing is available to answer any questions about the content of this manual. Purchasing will also negotiate agreements under the Pre-Qualified Supplier Program and provide information on University-wide Pre-Qualified Supplier agreements, assist in identifying other qualified suppliers, assist in preparing bid requests and requests for proposals, aid in resolving problems with Pre-Qualified Suppliers, review purchase and contract terms and conditions for acceptability, coordinate the signing of contractual commitments and assist with any other aspect of the acquisition process. Purchasing is responsible for coordinating external acquisition activities for the University. In addition, Purchasing:

Contact the Purchasing Manager at any phase of the procurement process for information, assistance, consultation or guidance.

Purchasing Department
820 N. Michigan Avenue
7th Floor, Lewis Towers
Chicago, Illinois 60611
(312) 915-8780
(312) 915-8788 FAX
sperry@luc.edu

Click here to continue to section 2.0 General Policies on Ethics, Conflicts of Interest and Gifts

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