Shenandoah University

Requisition and Purchasing Policy

Replacement of Policy: Requisition and Purchasing Procedure approved May 11, 1987

Proposed by: Controller

Approved by: President and the Vice-President for Administration & Finance

Effective date: April 19, 2001

Amendment Date(s): July 1, 2004 (Bid Section)

November 1, 2004 (Media Services Approval Requirements)
July 9, 2007 (Additional Approvals section K)
November 9, 2007 (Approvals – Office of Controller)
July 1, 2016 (Approvals)

Part I. Policy

It is the intent of the administration of Shenandoah University to promote the basic

objectives of an educational institution by providing faculty and staff members with the
necessary supplies, equipment, and services to perform in an effective, efficient and
timely manner. The requisition and purchasing function shall be centralized through the
Accounts Payable Office in order to meet these needs in an organized manner while at
the same time provide for the accountability of all institutional expenditures.

The University does not pay sales tax on purchases of tangible property. Employees
should obtain a Purchase Order from the Accounts Payable Office for supply and
equipment purchases to get the sales tax exemption. The Accounts Payable Office will
send a tax exemption certificate to vendors when requested. The University reserves the
right to deny the employee’s reimbursement for sales tax paid on orders unless there was
not any other reasonable alternative for the purchase.

The University is required by the Internal Revenue Service to report nonpayroll

expenditures to noncorporate entities, individuals, and partnerships for personal services
and rentals on Form 1099-MISC. The only payments reportable to corporations are
medical and health care payments and attorneys’ fees. Prizes and awards for services
performed by nonemployees or prizes and awards that are not for services performed
must also be reported. The government requires the name, address, and taxpayer
identification number for each individual or entity receiving these payments. This
information needs to be provided to the Accounts Payable Office on a W-9 Form.
Corporate payees must also complete and submit a W-9 form for personal services and

1
rentals to certify their exemption from 1099-MISC reporting prior to receiving a check
from the University. If the individual or entity is from a foreign country, research will
need to be done by the Controller’s Office to see if a tax treaty exists for an exemption
and to identify the applicable forms that need to be completed.

All funds deposited with the institution, regardless of source, are the institution's funds
and must be handled in accordance with institutional policy. Although departments are
allocated funds in their budgets, this allocation is only an authority to requisition, not to
purchase. Purchase Orders are required for almost every business transaction that a
department conducts. The Purchase Order serves the following purposes:
1. Permission from the University for the department to make the purchase
2. A contract with the vendor that defines the details of the items or services to
be purchased including the cost, payment terms, and shipping information

The purchasing policy and coordination thereof is the responsibility of the Controller.
The President and the Vice-President for Administration & Finance must approve any
amendments to this policy.

Part II. Procedures

A. Competitive Bid Process

The University requires the employee to use competitive pricing for products and/or
services which total $5,000.00 or more. This includes purchase requests for similar items
that cumulatively total $5,000.00 or more within a fiscal year period and can be bid under
a term contract. Term contracts are to be bid annually by the department for
items/services of a repetitive nature if a fixed price type contract or a unit priced
requirements type contract can be obtained. A copy of all bids received for term contracts
and the completed Bid Information Form outlining the vendor selected for the term
contract for each fiscal year must be submitted to the Controller’s Office for review
before any orders are made that fall under the term contract. The guidelines for
conducting bids for term contracts are the same as outlined below for non-repetitive
purchases. A department must not split or parcel purchases over a period of time for the
purpose of evading competitive bidding.

The following bid guidelines must be used for requesting goods or services:
1. The department must solicit the minimum written quotations from different
vendors for the requested purchase. The chart below indicates the minimum
number of bids required according to the estimated purchase amount.

2
 Estimate Purchase Amount # of Bids
$1.00-$4,999.99 One (1) verbal or written quotation
$5,000-$14,999.99 Two (2) written quotations
$15,000-$99,000.00 Three (3) written quotations
>=$100,000.00 (non-construction) Request for Information (RFI) to at least
three (3) vendors
>=$100,000.00 (construction) See requirements below

Construction contract requirements: The department must facilitate a

competitive negotiation using a Request for Proposal (RFP) document.
This document must describe the scope of services to be provided, list
vendor requirements, identify evaluation criteria and include any other
pertinent information. A performance bond for 100% of the contract price
may be required for construction contracts. The performance bond, if
required, must be obtained from companies holding certificates of
authority as acceptable sureties. The RFP document should contain a
technical section and a time-cost section. In the technical section, the
vendor should include time-lines, projected required personnel, and
schedules for completing the project. In the time-cost section, the vendor
must detail the time and costs that will be required to complete the project.
The standard time to allow for responses is thirty (30) days. Unlike a
competitive sealed bid, there is no public bid opening and all responses to
the RFP and discussions with prospective offers remain confidential until
a contract is awarded.
2. The department must complete a Bid Information Form that outlines the
reasons for the vendor selection. If the department solicited the required
number of bids and could not obtain the minimum number of bids, then the
solicitation process must be documented in detail on the Bid Information
Form.
3. The quotations may be by letter or email and must include the following:
Vendor Identification: Product Information:

1. Name 1. Date of quote

2. Address 2. Description of goods/services

3. Phone # 3. Terms

4. Contact person 4. Amount

3
4. The completed and signed Bid Information Form and the applicable RFP,
RFI, and vendor proposals/quotations must be attached to the Requisition
form.
5. If a service purchase, consider the following:
a) Verify vendor liability insurance if work is performed on University
owned or leased property
b) Verify business/contractor’s license
c) Check references
6. Exceptions to competitive pricing include:
1. Accounting services
2. Advertising services
3. Architectural and engineering services
4. Consulting services
5. Design/Construction projects as approved by Board of Trustees
6. Employment services
7. Investment management services
8. Legal services
9. Personal Services
10. Purchases for the purpose of resale
11. Utilities
12. The lease, sale, purchase, transfer, disposal or any other action
involving an interest in real property
13. Sole Source procurement (see details below for this exception)
14. Emergency procurement: see Part II Section F

Sole Source Procurement: The Department must take reasonable steps to avoid
using sole source procurement except in circumstances where it is both necessary
and in the best interests of the Institution. The department must explain on the
Bid Information Form in a direct and concise manner the following four points:

1. Explain why this is the only product or service that can meet your needs
2. Explain why this vendor is the only available source
3. Explain why the price is considered reasonable
4. Describe the efforts that were made to conduct competitive pricing for this
product or service

Federal Funding Exception Clause: If the procurement is being made from

Federal funds, the department must adhere to any additional procurement
standards as outlined the federal regulations per the granting agency.

4
B. Requisition for Purchases

The employee must complete the Requisition form to request merchandise or services
unless the purchase is classified as one of the types of purchases in Part II, Section K.
The Requisition form is used by the Accounts Payable Office to generate Purchase
Orders or payments to the vendors. The Requisition form must be completed in its
entirety and written in a clear, concise manner before proceeding through the approval
process. Confirming orders with vendors is not permitted unless authorized in advance by
the Office of the Controller.

C. Requests for Checks

Requests for checks on the Requisition form include payments for dues, conference
registrations, subscriptions, college fairs, maintenance and service agreements,
employment testing, licenses, liability insurance, property taxes, postage, shipping, bank
fees, contract agreements for the payments as outlined in Part II Section K (5), cash
advances for travel, and hotel accommodations if Purchase Orders are not accepted.

All requests for checks must have supporting documentation attached for the issuance of
a check, i.e. invoice from the vendor, conference/event registration form, dues or
insurance renewal form, contract agreement, travel details for the cash advance requests.
Advance payments can be made for merchandise or events because the vendor will not
accept a Purchase Order. But, if the order or event is cancelled or the employee doesn’t
receive the goods, the employee must notify the Accounts Payable Office as soon as
possible so a refund check can be requested from the vendor.

D. Requisition Approval Process

All Requisition forms for purchases must contain the proper signatures in order to assure
the purchase itself as well as proper payment. The signed Requisition form is the
authorization for Accounts Payable to commit the funds of a particular budget account
for that expenditure and to enter into a contract with the vendor by producing a Purchase
Order.

Department and division head approval requirements are determined as noted in

Addendum A: Signature Approval Requirements.

5
Additional Requisition Approval guidelines are noted below:
1. All requisitions require at least two signatures
2. Requisitions for capital projects need approvals from the Budget Officer and
the Vice-President for Administration & Finance.
3. Due to the specific nature of some purchases or specific expertise
requirements, some requisitions require additional approvals as follows:
A. Printed materials and advertising (excluding personnel advertising)
need approval from the Chief Marketing & Creative Officer.
B. Personnel advertising in the academic area need approval from the
Director of Human Resources and the Vice-President for Academic
Affairs.
C. Personnel advertising in the administrative area need approval from
the Director of Human Resources and the Vice-President for
Administration & Finance.
D. Furniture requests and building construction (including updates and
repairs) need approval from the Director of Physical Plant.
E. Computer technology and software requests need approval from the
Director of Institutional Computing.
F. Office equipment requests (copiers and fax machines) need approval
from the Director of Auxiliary Services.
G. Media services (audio visual equipment and classroom media
equipment), excluding the TV Station and the Recording Studio, need
approval from the Media Services Coordinator (Staff/Administration)
or Director for Academic Computer Technology (Faculty) as
appropriate.
H. Any payment/purchase request that is payable to the requestor or is for
the benefit of the requestor, must be approved by someone else. For
example, reimbursements through Accounts Payable or Petty Cash,
cash advance request and reconciliation, professional membership,
subscriptions and credit card reconciliation. Below is the required
signature for these:
Requestor Approval Required
Administrative Staff or Faculty Member Applicable Budget Officer
Budget Officer Applicable Dean or Vice President
Dean Vice President for Academic Affairs
Vice President for Academic Affairs VP for Admin. & Finance or President
Vice President for Admin. & Finance President
President Vice President for Admin. & Finance

The completed and approved requisition must then be forwarded to the Accounts Payable
Office. The Accounts Payable Office will get the additional approval from the Controller
or Assistant Comptroller as stated below:

Thresholds Signatures Required

$1,000 - $5,000 Assistant Comptroller
$5,001 and above Controller

6
E. Purchase Order

All purchases of materials and supplies require a Purchase Order except as outlined in
Part II, Section K. The Purchase Order is prepared by the Accounts Payable Office once
a Requisition form has been approved. It is then emailed to the vendor confirming the
order and a copy routed to the person responsible for tracking the order as denoted on the
Requisition form. The Purchase Order will be faxed, mailed or hand carried to the vendor
by the purchaser. Purchase Orders are done daily for all complete and approved requests
received by 3:00pm the previous day.

If changes are needed to a Purchase Order, the department must complete a Purchase
Order Change Request form and send it to the Accounts Payable Office. This request
will follow the same approval process as the Requisition form for a Purchase Order
request.

F. Emergency Purchases

The need for occasional emergency purchases is recognized. Emergency purchases will
only be made with the authorization of the budget officer. A properly completed
Requisition must be submitted to the Accounts Payable Office the following workday.
Emergency purchases should be made when it is clearly evident that failure to do so
would be detrimental to the University. A written basis and justification for the
emergency procurement including the date the emergency first became known must be
attached to the Requisition form to substantiate the exclusion from the competitive
pricing requirement. The practice of emergency purchases should be curtailed as much as
possible by anticipating needs in time for the use of regular purchasing procedures. Good
planning practices will minimize the need for emergency purchases.

G. Receipt of the Goods

Upon receipt of the goods or services, an employee of the University must notify the
Accounts Payable Office via email that all items or what partial items have been received
by referencing the appropriate purchase order number and vendor name in the email. An
invoice cannot be processed for payment until these items are received. In cases of
damage or shortage of shipment, the Accounts Payable Office should be notified in
writing, including all details regarding the incident. Failure to comply with this procedure
could result in a disallowment of any claim.

H. Invoices

All invoices should be sent directly to the Accounts Payable Office unless otherwise
approved by the Controller or outlined in Part II, Section K. In the event that a
department receives an invoice, it should immediately be forwarded to the Accounts
Payable Office so delays in the payment can be avoided. Past due invoices are very costly
to the institution. The vendor must prepare an invoice on a company form or letterhead
with the proper address of the company; this invoice must be numbered, dated and list all
of the items purchased with the prices for each item.

7
I. Purchase Order Payments
The Accounts Payable Office must receive written confirmation from the requestor that
the items or services were received before payment can be made. The Accounts Payable
Office will compare the Purchase Order with the invoices and packing slips to verify that
items, quantities, and prices are accurate before processing payment.

Major Construction & Capital Projects: The Physical Plant Director, Vice President for
Administration and Finance and Controller will approve all purchase order payments on
construction items prior to payment being made.

J. Payment Schedule
The Accounts Payable Office will produce checks to be available each Thursday at 2pm.

Vouchers will be processed for all completed and approved payment requests
(reimbursements, vendor payments, purchase order payments, etc) received in the
Accounts Payable Office by 5pm on the previous Friday.

The due date for each payment is based on published vendor terms. If a vendor has not
elected to publish other payment terms, the 30 day standard vendor term will be used.

K. Other Approved Purchasing Methods

The University recognizes the need for other types of purchasing methods due to the
nature of the types of purchases that occur. The approved methods are as follows:

1. Blanket Purchase Order- The Controller approves requests from departments to

set up Blanket Purchase Orders when the department uses the vendor on a regular
basis. The employee must complete a Blanket Purchase Order Requisition form
each fiscal year. The Blanket Purchase Order is for a limited dollar amount and if
the purchases during the fiscal year exceed the Blanket Purchase Order amount,
the employee must complete a Purchase Order Change Request form to obtain
authorization before making additional purchases. Accounts Payable will provide
a copy of the Blanket Purchase Order to the requestor when established. Invoices,
confirmation of services received, and authorization to pay should be provided to
Accounts Payable immediately upon receipt. The Accounts Payable Office will
review Blanket Purchase Orders semi-annually (December and May) to determine
if any adjustments are needed. Adjustments will be approved by the Controller.
2. Library Acquisitions- All library acquisition orders for the University are placed
by the Librarian. Invoices are sent directly to the Library from the vendors and the
Librarian must verify the accuracy of the invoices. An Invoice Payment Data
Entry Form and invoice is sent to the Accounts Payable Office for payment.
3. Personal Service Payments- Examples of service payments include honoraria,
consultants, lawyers, investment counselors, collection agencies, auditors, athletic
officials, medical service providers, technology support service providers,
professional services, and entertainers. The payee may provide a written contract
for the services to be performed. If such a contract agreement exists, it must
accompany a Requisition form and a W-9 form before payment is made. In

8
 addition to required approvals noted in Addendum A: Signature Approval
Requirements, the Vice-President for Administration & Finance (or designee)
must sign all vendor drafted contracts.

A Shenandoah University Contract for Independent Contractors & Honoraria

form must be completed for personal service payments if the University or the
payee has not written a contract for the services to be performed. If this form is
used in lieu of another contract agreement, a W-9 form is not required since this
serves as a substitute W-9 form also. This form falls under approval requirements
noted in Addendum A: Signature Approval Requirements

4. Food Service Requests to the University’s Contracted Vendor- The University

contracts with a third party for food services. The University grants the third
party the exclusive right to direct, manage, operate and control the food services
requested by the University for the benefit of the University’s students, faculty,
staff and guests on the University’s premises. Departments may request food
service for University events from the third party vendor by entering into a food
service contract with the vendor. The budget officer is responsible for using the
proper account number, for having sufficient funds in that account to cover the
purchase, and for the content of the order. After the Food Service Contract has
been fulfilled, the food service vendor will submit the invoice along with the Food
Service Contract to the Director of Auxiliary Services for approval. The Food
Service Contract and invoice are sent to the Accounts Payable Office for
payment.

5. Standard Reoccurring Payments- The Accounts Payable Office will automatically

pay standard reoccurring invoices after obtaining appropriate authorizations in
accordance with Addendum A: Signature Approval Requirements. Authorizations
are renewed when prior contract expires and kept on file in the Accounts Payable
Office. All contracts must be on file in the Accounts Payable Office in order for
payments to be made to the vendor. Examples of standard reoccurring payments
include utilities, maintenance & service agreements, rental & lease agreements,
medical service providers, pagers, principal & interest payments on debt
agreements, life insurance premiums, and annuity agreements.

6. Payroll Withholdings- The Payroll Office submits a Payroll Generated Invoice

form to the Accounts Payable Office after each payroll period for all payments of
health insurance, retirement, garnishments, state taxes, etc.

7. Purchasing Cards- See Purchasing Card Policy & Terms.

9
Exhibits:
Bid Information Form
Requisition
Purchase Order
Purchase Order Change Request
Blanket Purchase Order Requisition
Invoice Payment Data Entry Form
Contract for Independent Contractors & Honoraria
W-9 Form
Food Service Contract

10