Policy Name: Procurement Services Policies and Reconfiguration
Policy Number: 03-02-001
Version Effective Date: January 1, 2012
Last reviewed on: January 1, 2019
Policy Applies To: University Wide
Responsible Office: Business Services
INTRODUCTION AND STATEMENT OF PURPOSE
New Jersey City University's ("NJCU") Procurement Services Department, (Purchasing & Accounts Payable), is charged with the responsibility of ordering all supplies, equipment and services necessary for the operation of NJCU. The process starts with the user department and ends with accounts payable. Procurement Services is responsible for monitoring all purchases for compliance with applicable regulations and for paying NJCU's bills.
The Procurement Services Department is committed to meeting the needs of NJCU and its departments and to ensure that state laws and University regulations are followed. Laws regarding the use of public funds are very specific, so it is important that University procedures be carefully followed. All expenditures must be prudent and directly benefit NJCU. NJCU will assume no liability for the payment of purchases that were not made through the approved Procurement Services purchasing procedures.
This policy is intended to be the official method to assist all University employees in understanding NJCU's procurement process. It has also been developed in accordance with New Jersey State statutes and University polices. As a public institution, we are required to follow these regulations in the conduct of our day-to-day business.
To establish NJCU's policies regarding the procurement and payment for goods and services.
This policy applies to all faculty and staff and uniformly to all funds administered by NJCU such as departmental budgets, capital funds and restricted accounts including federal, state, and local grants, contracts and specially funded programs.
The Procurement Services Department is responsible for making the final determination of source and supply of goods and services. These decisions will be made in conjunction with the department's user, as appropriate. The Procurement Services Department serves as the exclusive channel through which all bids and quotations are handled. University departments may correspond with suppliers in cases where informal prices are needed or where technical details are necessary. In such cases, proper communication and coordination with the Procurement Services Department is required prior to committing to such purchases.
NJCU's procurement policy is intended to be consistent with Generally Accepted Accounting Principals (GAAP), which provides guidelines for the timing and reporting of transactions at the time it occurs. The Purchasing Department is also obligated to follow the guidelines of the laws of the State of New Jersey relating to Executive Order #134, the Procurement Reform Restrictions on Political Contributions and the Business Registration Certificate for all vendors.
NJCU's Accounts Payable Department is responsible for processing all non-payroll payments including purchase order invoices, special handling requests and employee travel reimbursements in a timely and efficient manner while maintaining NJCU's policies and procedures.
It is NJCU departments' responsibility to ensure that each transaction is classified as an allowable
expenditure on a specific account and that funds are available accordingly.
New Jersey Executive Order #134
Executive Order #134 imposes restrictions on State departments, agencies and authorities to insulate the negotiation and award of State contracts from political contributions that pose the risk of improper influence, purchase of access or the appearance thereof. State departments, agencies and authorities are prohibited from entering into a contract that exceeds $17,500 with an individual or entity that has made a political contribution to a candidate committee and/or election fund of any candidate or holder of the public office of Governor, or to any State or County political party committee. Executive Order #134 certification and disclosure forms are required to be submitted by a vendor as part of the procedure for publicly advertised bids.
Business Registration Certificate
All New Jersey and out of State business organizations that conduct business with NJCU are required to be registered with the State and provide proof of that registration before entering into a contract with NJCU. The purpose of contractor registration is to ensure that all businesses and their subsidiaries receiving government contracts pay appropriate sales and use, and other taxes. While sales and use taxes are not paid on government contracts, the requirement to register to obtain government contracts obligates them to comply with the law on non-government contracts.
Businesses, particularly out-of-state businesses, competing with New Jersey based businesses often do not pay the required taxes. Thus, unregistered businesses take unfair advantage of New Jersey businesses and deprive the State of its rightfully due taxes. Business Registration Certificates are required to be submitted by a vendor as part of the procedure for publicly advertised bids. Failure to submit such valid business registration certificate with a bid will render the bid materially non-responsive. The Purchasing Department will update NJCU community periodically as changes in the New Jersey law are enacted.
For further information on Business Registration Certificate visit the website:
NJCU's Purchasing and Accounts Payable Departments have implemented the PeopleSoft E-Procurement module. Departmental requesters will use the online requisition functionality in the PeopleSoft E-Procurement module to initiate a request for purchase. The identification of where the expense should be charged will be done on the requisition and will carry forward automatically through the Purchase Order (PO) then to the Voucher (vendor payment). Online workflow approval and receiving processes replace the manual signature approval.
There are five levels of approval depending on the criteria:
The requisition does not get routed to the next approval level until its predecessor is approved. Once the requisition is fully approved, it will be routed to Purchasing to generate a purchase order, which is the official authorization to purchase goods or services. The requestor/user is responsible for monitoring their requisitions and knowing when a purchase order has been generated and purchase authorized.
Vendors are required to send invoices directly to the Accounts Payable department for processing. Authorization to pay is confirmed via online receiving and acceptance of the goods or services by the departments. Accounts Payable will enter the invoices from the vendors, as vouchers, into the PeopleSoft payables system in the order they are received. PeopleSoft will match vouchers to the purchase order and receipts. Any exceptions to the matching process (quantity or price variances) over predefined tolerances are routed to purchasing or the departments for resolution. Once the vouchers are successfully matched, the PeopleSoft system will generate payments when due based on payment terms and invoice dates. The user/requestor is responsible for monitoring the life cycle of their requisitions. For further information please see the EPRO Training Manual at http://www.njcu.edu/dept/controller/index.html#purchasing.
Commitment Control is a delivered system functionality that allows for budgeting controls. It is a module within the PeopleSoft Financial System which can track and potentially control expenditures and purchasing. The purpose of this is to prevent overspending of a set budget for non-salary operating expenses. If an amount is requisitioned which causes the non-salary budget portion of the budget of the department budget to be exceeded, a budget error message will be generated if the department cannot resolve the issue, contact the Budget Office for assistance and to determine the cause of the over-expenditure. If there are insufficient funds in the account, the department head must consult with the Dean/Vice President to determine if additional funds are available.
All requisitions are initiated by authorized personnel from departments requiring goods and/or services. In most cases goods are tangible items (eg. shirts, equipment, books, etc) that can be received on line individually and are entered by quantity. Services are non-tangible items and are usually received by amount only. (eg. consulting, repairs, etc.)
A purchase order is defined as a contract between NJCU and a vendor for goods and/or services. The primary purchasing tool is the PeopleSoft Financials system which utilizes the use of E-Procurement with on-line requisitions. Using a purchase order to initiate every purchase provides the means to insure that each transaction is covered by a proper contract and that the funds are encumbered. A contract details commodities, prices, and terms and conditions specifying each party's rights and obligations. Generally, a contract's terms and conditions specifying each party's rights and responsibilities are questioned only when a dispute arises. However, as the dollar amount of a transaction rises or the level of risk in the activity (such as potential for injury) increases, so does the likelihood for major disputes and, therefore, the need for written contracts.
The dollar amount and the type of purchase and/or commodity being acquired is the basis for determining the correct purchasing procedure. These procedures, using sound business practices, provide the basis for prudent purchasing at any dollar value.
A purchase order must be issued at the time NJCU incurs a liability for any type of good or service.
Types of Purchase Orders
Business-to-Business (B2B) relationships have been, and are continuing to be established with select high-volume vendors in an effort to facilitate the ordering, invoicing and payment processes for the departmental user, the vendor and NJCU. Currently NJCU's main (B2B) vendor is OfficeMax for office supplies. In the up coming year, other (B2B) vendors will be added.
Contract and Direct Vendors
Direct Contracts have been established with GOURMET DINING for food services and BARNES & NOBLE for the bookstore. You may request goods and services directly with these vendors. A process has been implemented with these particular vendors whereby authorized personnel can request and sign a work order form for goods or services from either vendor which streamline the normal E-Procurement process. Upon approval of purchases, GOURMET DINING and BARNES & NOBLE will submit their billings to accounts payable on a monthly basis for payment. See Exhibit C Magazine subscriptions are currently available through EBSCO Subscription Services and are renewed on an annual basis. Please notify the purchasing department of any changes or additions. Do not submit subscription renewal and payments directly to the vendor unless otherwise notified by purchasing.
Departmental credit cards are to be used to purchase goods/services with a dollar value under $500 and in instances where either the transaction is for a one-time/exceptional purchase, the vendor does not accept purchase orders, or credit cards are the industry standard payment. The departments are responsible for all receipts and paperwork regarding the transactions and are subject to periodic audits.
See the P-Card Policy at: http://www.njcu.edu/dept/controller/index.html#purchasing for further details. Procurement Services has been issued PCards for approved purchases as needed with different limits.
Miscellaneous reimbursements typically occur when it is necessary to reimburse for approved
departmental expenses when a purchase order, e-commerce vendor or a departmental credit card could not be used. These types of reimbursements follow the guidelines of Travel Reimbursements and Special Handling Requisitions.
Reimbursements for all related travel expenses such as:
See the Travel Reimbursement Policy at: http://www.njcu.edu/dept/controller/Accounts_Payable.html#travel.
Special Handling Requisitions
Allowable items to be submitted through Special Handling in PeopleSoft form consist of the following:
All purchases through Special Handling in PeopleSoft need to be completed via a purchase requisition prior to any commitment made to the vendor. If the respective purchase satisfies any of the above categories, please submit a Special Handling requisition through PeopleSoft:
Purchase Order Cancellation and Change
Any request to modify or cancel an order should be directed to the Purchasing Department in writing via email or interoffice with the vendor name, purchase order number and the reason for the cancellation or change. The Purchasing Department will then act in the best interest of NJCU and advises all parties accordingly. Please note that a purchase order is a binding contract between NJCU and the vendor and therefore it cannot be modified or cancelled unilaterally.
The general rule for payment of requisitioned goods and services is to pay after the receipt of the item(s) or service(s). In some situations where a pre-payment may be required, attach documentation from the vendor to a purchase or special handling requisition, as applicable, with justification and forward accordingly. It is the end users responsibility to be aware of duplicate requests for payment. The Purchasing and Accounts Payable Department are available for assistance in researching requests.
Merchandise Returns and Repairs
Merchandise to be returned or repaired to a vendor for adjustment or credit should be cleared through the Purchasing Department. The Purchasing Department will work with the requisitioning department and the vendor to make arrangements for the return. In some cases, if the vendor is not at fault for sending the incorrect merchandise, they may charge a restocking fee.
The Purchasing Department has the authority to obligate NJCU for the purchase of goods and services. Any purchases made outside this policy will become the sole liability of the individual making the purchases.
Copiers (Multi-Function Devices)
NJCU's fleet copiers are currently under warranty and maintenance agreement with Stewart Industries. All toner and parts are included, except for staples which must go through the purchase order process. You should contact Stewart Industries in case of any copier repairs and toner needs. (For service call 800-583-4996, for supplies call 800-322-5584)
Items Ordered on a "Preview" or "Trial Basis"
An internal purchase requisition must be completed and sent to Purchasing for all items that are ordered on a "trial basis" or are ordered for "review". Please indicate in comments that the item is a demo. At the end of the "trial period" it is the user department's responsibility to notify Purchasing of the decision to keep or return the items. It is customary for vendors to bill for the merchandise automatically after the trial period; therefore timely notification is required.
NJCU Purchasing department will determine when competitive bids for goods and services are required in accordance with New Jersey State College Contract Law.
All purchases, exceeding $2,500 but less than $30,700 will be awarded using the competitive bidding procedures. We need to obtain at least three competitive bids (quotes) as dictated by the dollar amount. Please contact the Purchasing Department for assistance.
Purchases over $30,700 (effective July 1, 2011)
The Purchasing Department may solicit bids and place orders for goods and services based upon the requirements of University departments. A supplier cannot be used by NJCU once the threshold amount of $30,700 is reached. The bid threshold is cumulative for each supplier during each fiscal year.
The exceptions to bidding thresholds are as follows:
Procedures for Publicly Advertised Bids
Individuals are identified in each of the departments with the authority to initiate requests for purchases of goods and services. The following dictates the total commitment/expenditure that each individual at the various levels at NJCU is authorized to approve. These are the minimum guidelines that NJCU must follow in order to purchase goods and services. Higher approval levels can be obtained as dictated by individual departmental policies.
Office Supplies (OfficeMax) On-Line Purchases
All office supplies purchases are processed in PeopleSoft through Direct Connect. The standard approval process applies and is routed through workflow.
Purchasing Card Purchases
Individual transaction limit of $500 except Deans/Director and Associate Vice Presidents limit of
$1,000 and Vice Presidents limit of $1,000. Total monthly limit varies based on need. See Purchasing Card Policy at: http://www.njcu.edu/dept/controller/documents/pcard_documetns/pcard_poli....
Overnight Travel - President
Local Travel - Dean/Director
Special Handling Requests
Same as Operating Expense
In budget - Same as Operating Expense
In budget - Same as Operating Expense
Same as Operating Expense
Same as Operating Expense with Project Manager's approval
Same as Operating Expense operating with Grant Manager's approval
Contracts and Agreements