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Purchasing Policy

POLICY TITLE:	Carnegie Mellon University Purchasing Policy
POLICY OWNER:	Office of the Vice President for Finance and Chief Financial Officer
RESPONSIBLE OFFICE:	Procurement Services
CONTACT INFORMATION:	Procurement Services: 412-268-4309
PERTINENT DATES:	This Policy was approved on May 8, 2018. Administrative changes were made on September 14, 2018 and February 21, 2022.
APPROVED BY:	This Policy was approved by the president of Carnegie Mellon University.
ENTITIES AFFECTED BY THIS POLICY:	All academic or administrative departments, divisions and other business units of the university who make purchases on behalf of the university.
WHO NEEDS TO KNOW ABOUT THIS POLICY:	All CMU employees and any personnel responsible for the acquisition of goods and services for the university, unless otherwise exempted in accordance with this Policy.
GLOSSARY:	Definitions of terms used in this Policy.
FORMS / INSTRUCTIONS:	Conflict of Interest Disclosure and Anti-kickback Agreement Form Purchasing Checklist and Bid Summary Form
RELATED INFORMATION:	Business and Travel Expense Policy Code of Business Ethics and Conduct Compliance with Financial Conflict of Interest Requirements in Research Policy Conflict of Interest/Commitment Policy Finance Division Forms Financial Records Retention Policy Foreign Corrupt Practices Act Gift Acceptance, Counting and Reporting Policy Office of the General Counsel OMB Uniform Guidance Procurement Standards Petty Cash Policy Supplier Directory Procurement Manual Property Management Policies and Procedures Responsibilities for Managing Carnegie Mellon University Financial Assets Policy Statement Signature Authority for Legally Binding Commitments and Documents Policy Subcontracts University Contracts Office
REASON FOR POLICY / PURPOSE:	This Policy supports the need to procure goods and services for the university in a timely and cost-effective manner, while ensuring compliance with applicable regulations, requirements which the university must satisfy, and appropriate business processes.
ABSTRACT:	This Policy intends to meet the procurement requirements contained in the OMB Uniform Guidance Procurement Standards and applies to all CMU employees and any personnel responsible for the acquisition of goods and services for the university, unless otherwise exempted in accordance with this Policy.

Policy Statement

The Carnegie Mellon University Purchasing Policy supports the need to procure goods and services for the university in a timely and cost-effective manner, while ensuring compliance with applicable regulations, requirements which the university must satisfy, and appropriate business processes. This Policy intends to meet the procurement requirements contained in the OMB Uniform Guidance Procurement Standards and applies to all CMU employees and any personnel responsible for the acquisition of goods and services for the university, unless otherwise exempted in accordance with this Policy. This Policy applies to all purchases made from external suppliers and not to Carnegie Mellon University suppliers (e.g., bookstore, computer store or art store). Adherence to this Policy will mitigate risk, ensure compliance to requirements, drive effective procurement processes, and deliver benefits to CMU. Failure to comply with the directives in this Policy are a direct violation of the University Code of Business Ethics and Conduct and may result in disciplinary action up to and including termination of employment.

This Policy and corresponding policies and manuals have been implemented to meet the procurement requirement contained in Part 200 – Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards Subpart D (2 CFR 200 Subpart D) issued on December 26, 2013 amended on November 12, 2020.

Procurement Services (PS) is the single point of contact for all centralized university procurement policies and procedures. Any exception requests and/or clarifications to this Policy should be directed to PS.

Roles and Responsibilities

Considerable authority is delegated to academic and administrative units to make purchasing decisions. This requires that employees involved at every step of the process take full responsibility for understanding university policies and procedures regarding purchasing, payment and vendor relations. Purchasing decisions are business decisions made on behalf of Carnegie Mellon University and therefore should be made with the utmost consideration for what is in the best interest of the university.

Buyer Responsibilities
1. Abide by this Policy and any related government, sponsor, or university policies, procedures, guidelines and/or business requirements as applicable.
2. Complete required training and all applicable forms, statements and/or certifications.
3. Use the appropriate university purchasing method for procuring goods and/or services.
4. Comply with plans on the utilization of small, disadvantaged, women-owned, veteran-owned, service disabled veteran-owned and HUB Zone businesses, and preferred suppliers.
5. Document and reconcile purchases in accordance with Carnegie Mellon policies, business requirements and/or government or sponsor regulations.
6. Maintain security of purchasing methods.
7. Ensure departmental buyers are aware of budgeted funds prior to making a purchase, and purchases fall in line with allotted funds.
8. Obtain appropriate approvals and documentation prior to purchase.
9. Ensure goods or services are necessary and avoid acquisitions of unnecessary or duplicative items.
10. Ensure personal purchases are prohibited and reported promptly to Procurement Services if found.
Department Authorizer Responsibilities
1. Identify departmental buyers to procure goods and service on behalf of the university.
2. Ensure departmental buyers make the best efforts to utilize small/disadvantaged businesses and preferred suppliers.
3. Ensure departmental buyers meet responsibilities identified in this Policy, and receive required training.
4. Retain documentation to support transactions in accordance with university policies, business requirements and/or government regulations.
5. Approve purchases as required and ensure availability of funds from departmental budgets/grants.
6. Ensure personal purchases are prohibited and reported promptly to Procurement Services if found.
7. Ensure departmental buyers are aware of budgeted funds prior to making a purchase, and purchases fall in line with allotted funds.
8. Ensure goods or services are necessary and avoid acquisitions of unnecessary or duplicative items.
Procurement Services Responsibilities
1. Set and maintain university’s Purchasing Policy, including any clarifications and approval of exceptions to the Policy.
2. Provide a Procurement Manual detailing procedures.
3. Provide purchasing and small business utilization training, documentation, tools and forms.
4. Oversee buyer adherence to the university’s standard of conduct surrounding conflict of interest in procurement.
5. Establish and maintain preferred supplier list, travel program and a strategic sourcing program.
6. Regularly reevaluate preferred suppliers for performance, price adherence and customer satisfaction.
7. Make efforts to locate, solicit and contract small/disadvantaged businesses for the preferred supplier program.
8. Provide information related to locating all categories of small businesses.
9. Provide guidance on the use of the proper method of purchase based on the purchase amount.
10. Mediate supplier-customer disputes.
11. Approve purchase orders as required.

Supplier Preferences

There are numerous considerations when selecting a supplier when the university needs to purchase a good or services, including but not limited to, cost, timeframe, quality, relationship with the university, etc. The university has identified the following supplier categories that take these considerations into account:

Preferred Suppliers

This designation indicates that the university has negotiated commercial pricing and legal terms and conditions in place with the supplier. Not all suppliers may be considered preferred. This status requires work between the supplier and PS. PS is the only university entity able to authorize and designate a supplier as preferred. Use of a preferred supplier for procurements within the Simplified Acquisition Threshold does not require any further competition and documentation.

The use of preferred suppliers has many benefits, including maximizing the best value to the university, ease of ordering, savings due to leveraging volume, improved access to information, and a higher level of service due to the strong commitment the supplier has to the university. Additionally, using a preferred supplier improves productivity and efficiency of departmental personnel by reducing the time used to source bids and negotiate pricing and contractual terms, as the work has already been done by PS.

PS maintains a list of preferred suppliers in the supplier directory found on the PS website.

Questions regarding preferred suppliers and the way a supplier becomes preferred should be directed to PS.
Internal Suppliers
The university has elected to provide the option to purchase certain goods and services through internal suppliers (e.g., bookstore, computer store, facilities management). Administrative and academic units should consider the use of such internal suppliers before looking for an external supplier. Advantages of using internal suppliers may include eliminating the need for POs or PCard transactions and the associated administrative burdens. Transactions with these internal suppliers are not subject to purchasing thresholds established in this Policy, and therefore can be utilized without added sourcing requirements to use an external supplier.
Responsible Suppliers
To be eligible to receive a university contract, or PO, a supplier must be determined to be a responsible supplier during the bid/evaluation process. Responsible means the supplier, whether a company or an individual, has appropriate legal authority to do business, a satisfactory record of integrity, appropriate financial, organizational and operational capacity and controls, and acceptable performance on previous governmental and/or private contracts, if any. Examples of non-responsible suppliers include, but are not limited to, a supplier's history of nonperformance or performance problems on other contracts (public or private) and/or a record of financial difficulty, business instability, criminal sanctions, civils sanctions and/or tax delinquency.

Buyers should be aware of suppliers who are federally suspended or debarred, and check their Office of Foreign Assets Control (OFAC) clearance via the System for Award Management (formerly the Excluded Parties List System) before engaging a vendor.
Small/Disadvantaged Suppliers
As a recipient of federal funds, Carnegie Mellon has responsibility to utilize small/disadvantaged business enterprises. Carnegie Mellon has established goals, which can be found in the Procurement Manual, for disadvantaged, women-owned, veteran-owned, service disable veteran-owned and HUB Zone business enterprise participation. Awards from government or other sponsoring agencies may mandate different participation goals.

Procurement Thresholds

Procurement must be conducted in a manner that provides all suppliers the same opportunity to compete openly and fully and Carnegie Mellon must not take any arbitrary actions that would provide suppliers an unfair competitive advantage.

All proposals and quotations received will be evaluated based on quality, service, compliance to specifications and price and all awards will be made in the best interest of the university. Any or all proposals may be rejected at the discretion of Carnegie Mellon and will be documented for future reference by PS.

Any procurement must be accompanied by the proper documentation, and the procurement threshold will dictate the procurement method. Failure to attach the required documentation will result in a rejection of the procurement request, and may be deemed non-compliant with this Policy.

The following thresholds apply to competitive sourcing of goods and services at Carnegie Mellon:

Micro-Purchases: $5,000 or less ($2,000 or less for construction awards where the Davis-Bacon Act applies)
Competition and/or cost/price analysis are not required if the price is considered reasonable by the buyer.
Small Purchase/Simplified Acquisition: Greater than $5,000 — less than $150,000
Price and rate quotes must be obtained via informal methods and documented on a Purchasing Checklist & Bid Summary Form from a minimum of two (three or more are recommended) qualified sources to establish competition, if not utilizing a preferred supplier or university internal supplier.
Preferred Supplier Purchases: Less than $150,000
No bidding or documentation is required if a preferred supplier is utilized. All support documentation for preferred suppliers is maintained by PS.
Sealed Bids: $150,000 and above (recommended method for construction)
Bids must be formally solicited and documented from two (three or more recommended) or more responsible bidders by or in conjunction with PS unless specifically delegated in writing by Procurement Services. A firm fixed price contract is awarded principally based on price to a responsible bidder.
Competitive Proposals/Requests for Proposals (RFP): $150,000 and above
Used when a sealed bid is not appropriate or the sealed bid conditions cannot be met, such as the condition to award only based on price to a responsible bidder. RFP are used with competitive proposals, must identify all evaluation factors and their relative importance and be solicited from two or more qualified sources by or in conjunction with PS. Contracts must be awarded to the responsible firm whose proposal is most advantageous to Carnegie Mellon by scoring the identified evaluation factors.
Noncompetitive Proposals (i.e., sole-source or single source procurements)
Procurement that meets the requirements for competition (above micro-purchase threshold), but a bid or proposal is solicited from only one non-preferred source. Non-competitive proposals are used only if the good or service is available from one source, the need for the requirement will not permit a delay resulting from competitive solicitation, the government or sponsoring awarding agency or pass-through entity expressly authorizes noncompetitive proposals and/or after solicitation of several sources, competition is determined inadequate.

Purchasing Methods

The following are the primary purchasing methods employed by the university. Any method beyond those listed below requires PS approval. All purchases, except for those made with internal suppliers must comply with this Purchasing Policy, the Procurement Manual, the Business and Travel Expense Policy and all other university policies.

This Policy outlines the expectation that individuals who have a procurement need will utilize the recommended procurement methods of a PO, PCard or Travel Card to ensure compliance with state, federal, sponsor and institutional purchasing policies and to minimize institutional risk. Any questions regarding the types of items and the method through which they should be purchased should be directed to PS. All procurement exceptions must be approved by PS in advance of transacting a purchase or conducting the applicable university business.

Use of any purchasing method for personal purchases may be considered misappropriation of university funds and disciplinary action will be taken in accordance with university policy up to and including the termination of employment.

Purchase Order (PO)
A purchase order (PO) is completed and approved through the university financial system and then issued to a supplier indicating types, quantities, and agreed prices for the products or services the supplier will provide to Carnegie Mellon. Certain purchases or services (e.g., hazardous materials, live animals, lasers and other radioactive devices), require oversight and regardless of amount, must be placed on a PO. POs may be used for any procurement, but must be accompanied by a contract if for a service.

POs should be issued prior to the receipt of goods or services from a vendor. It is imperative to complete a PO prior to the receipt of the invoice to create a legal contract between the supplier and the university and to ensure goods/services are delivered in accordance to university terms and conditions or an applicable contract. The PO released to the vendor will reference the terms and conditions, which state that payment should not be remitted to any invoice that does not reference a PO number. Even if a contract containing all legal and commercial terms and conditions exists, a PO is required to facilitate billing and proper accounting.
Purchasing Card (PCard)
A credit card issued to authorized employees to make allowable micro-purchases of goods and certain services, if accompanied by a contract, on behalf of the university.

PCards are intended to replace small dollar purchase orders. PCard holders are personally responsible for their assigned PCards, must not allow others to use their PCards and should diligently secure the PCard at all times (i.e., guard against fraud and unauthorized use of the PCard).
Hazardous Materials (HazMat) Card
A type of Purchasing Card issued to authorized employees primarily to make allowable purchases of select hazardous materials on behalf of the university.

Hazmat Cards are intended to replace small dollar purchase orders. Hazmat Card holders are personally responsible for their assigned Hazmat Cards, must not allow others to use their Hazmat Cards and should diligently secure the Hazmat Card at all times (i.e., guard against fraud and unauthorized use of the Hazmat Card).
Travel Card
Department and individual Travel Cards are issued by the university and are designed to simplify and streamline the process of paying for business travel expenses. Business travel charges on the Travel Card are billed to and paid by the university.

For faculty and staff who frequently travel in the performance of their business role with the university, individual Travel Cards may be issued via Procurement Services to be used for official university business travel expenses only. Travel Card holders are personally responsible for their assigned Travel Cards, must not allow others to use their Travel Cards and should diligently secure the Travel Card at all times (i.e., guard against fraud and unauthorized use of the Travel Card).
Expense Reimbursements
Use of personal funds is allowed for the purchase of goods when logistical or extenuating circumstances occur that preclude use of a PO or PCard. The purchase of individual goods in excess of the micro-purchase threshold with personal funds is discouraged. Services may not be procured with personal funds.

All purchases made with personal funds shall be submitted in accordance with applicable requirements in accordance with the Business and Travel Expense Policy.
Petty Cash
While not recommended, use of university petty cash is allowed for the purchase of small and/or nominal goods only when logistical or extenuating circumstances occur that preclude use of a PO or PCard. All petty cash requests must be submitted in accordance with applicable requirements, as detailed in the university Petty Cash Policy. Services may not be procured via petty cash.

Purchasing Ethical Standards

Ethical business standards, as well as adherence to university Code of Business Ethics and Conduct, shall govern all procurement transactions. Infractions of university policy must be reported to PS. Disciplinary action for those violating ethical business standards will be taken in accordance with university policy up to and including the termination of employment.

Conflict of Interest
Buyers, department authorizers and members of the university community with procurement responsibilities or the ability to influence purchasing decisions, the negotiation or formation of contracts and/or the management of ongoing supplier relationships must avoid unethical conduct and conflicts of interest when purchasing goods and services. When members of the university community, associates or their immediate family members have financial interests in a business or are involved in a business as an owner, operator, employee or officer, all parties must be alert to the possibility that a real or perceived conflict of interest may arise. Under no circumstance will individuals review, approve, control or influence purchases for contracts or business relationships where they may personally gain or benefit. This pertains to a contract or business relationship between the university and a business in which the individual or their immediate family member(s), spouse or partner has a financial interest, or when the individual or their immediate family member(s) is an employee of the business and is directly involved with activities pertaining to the university.

Government regulations require Carnegie Mellon to have explicit procedures for addressing incidents in which there are allegations of improprieties or conflicts of interest in purchasing. Real, perceived or potential purchasing conflicts of interest must be reported to PS. This Purchasing Policy works in tandem with the Conflict of Interest/Commitment Policy and Compliance with Financial Conflict of Interest Requirements in Research Policy.

Questions regarding actual or perceived conflicts of interest should be referred to PS for evaluation and guidance. Carnegie Mellon's Conflict of Interest Disclosure Form is distributed annually to Carnegie Mellon Buyers for signature by PS.
Purchasing Code of Ethics
In addition to the standards and values established in the Code of Business Ethics and Conduct, Carnegie Mellon subscribes to the intent of the National Association of Educational Procurement (NAEP) Code of Ethics. Carnegie Mellon's Buyer Code of Ethics is distributed annually to Carnegie Mellon Buyers.
Anti-Kickback Clause
The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) prohibits any person from: providing or attempting to provide or offering to provide any kickback; soliciting, accepting or attempting to accept any kickback; or including, directly or indirectly, the amount of any kickback in the contract price. The Act imposes criminal and civil penalties on any person who knowingly and willfully engages in the prohibited conduct addressed in the Act [FAR 3.502-2 (b) and (c)].

Carnegie Mellon's Anti-Kickback Clause is distributed annually to Carnegie Mellon Buyers by PS for signature as required by the Office of Naval Research (ONR), Carnegie Mellon's cognizant agency.
Supplier Gratuities and Gifts
Gifts and entertainment can be used to build goodwill between the university and our business partners; however, some gifts and entertainment may conflict with the university's values of integrity and social responsibility. For example, gifts of money or cash equivalents cannot be accepted at any time from a supplier or potential supplier. Likewise, if an unsolicited gift of any value is accompanied with a request by the supplier for preferential treatment, the gift must be immediately returned and Procurement Services must be notified. This is inclusive of any subcontractors or sub-tier suppliers.

However, individuals may accept unsolicited nominal personal gifts, meals, entertainment and other normal social amenities no greater in value than $75 per occurrence from a single source (individual or business), provided the source is not participating in a competitive bid for university business or is not in negotiations with the university for a contract award. If the supplier is participating in a competitive bid for university business, or is in negotiations with the university for a contract award, then Procurement Services should be contacted.

General questions about the value or appropriateness of a gift or invitation, or approval of any exceptions of the requirements noted in this Policy should be directed to, and reviewed with, an immediate supervisor. If, following consultation with Procurement Services (as set forth above), or after discussions with an immediate supervisor, there remain any questions or concerns about a matter relating to this policy, the Office of the General Counsel should be contacted for additional review of such issue and approval prior to taking any action.

All gifts given in support of an institutional mission must be directed through University Advancement offices in accordance with the Gift Acceptance, Counting, and Reporting Policy.

Procurement Activities Related to Students

Staff and faculty are responsible to ensure any student assigned purchasing responsibilities adhere to this Policy. Any violation of these requirements may be subject to disciplinary action as outlined in the university’s Code of Business Ethics and Conduct.

Use of University Assets

Members of the university are required to act in accordance with applicable university procedures regarding the procurement of goods and service and the use and control of tangible and intangible university assets, including confidential and privileged information. Unauthorized use of university assets in connection with any external activity is prohibited. Identification of the university as one’s employer and of one’s position at the university is permitted.