FP-4 Purchasing Policies and Procedures

I.   General
II.  Principles

III. Definitions
IV. Procedures

I.  General 

Purchases made with University funds must adhere to sound, ethical business practices. No financial commitment may be made by any employee of the University without specific written authority of the President. University officials authorized to approve purchases of goods and services must exercise prudent judgment when expending funds or determining if an expenditure is appropriate.
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II. Principles

 1.   The purchase must comply with this policy, the laws of the State of Tennessee, and TBR Policy 4:02:10:00, Purchasing Policy and Procedures, for the purchase of goods and services.

2.   The purchase must support the mission and purpose of the University.

3.   The purchase must not be personal in nature.

4.   The amount expended should be reasonable.

5.   Employees of the University serve the interests of the State of Tennessee and must comply with TBR Policy 1:02:03:10 Conflict of Interest.

The President of the University has delegated authority to the Associate Vice President for Administrative Services and the Purchasing Manager to make purchase commitments. The President of the University has delegated authority to the Associate Vice President for Administrative Services to sign contracts for the University when they are associated with purchase orders. No employee has authority to make any purchase commitment, enter into any contract for goods or services, or otherwise take action with respect to third parties which may be construed as financially binding to the University except through the authority of Procurement and Contract Services, unless specifically authorized by other applicable University policy or in writing by the President. This policy applies to all expenditures of funds administered by the University, regardless of origin. This policy does not apply to agency funds set up with ETSU Financial Services.

The TBR Council of Buyers Minimum General Bid Conditions and the TBR Code of Ethics in Procurement and Contracting are adopted as minimum standards in the procurement of goods and services.

Except as specifically provided in TBR policies and guidelines, authority pursuant to those policies shall not include the purchase or lease of real property, data processing equipment over $249,999, the purchase of insurance, or purchases for capital outlay projects from any fund source whatsoever.

No employee of the University responsible for initiating or approving requisitions shall accept or receive, directly or indirectly, from any person, firm or corporation to whom any contract may be awarded, by rebate, gift or otherwise, any money or anything of value whatsoever, or any promise, obligation or contract for future awards or compensation. Whenever any contract/purchase order is awarded contrary to this provision, the contract/purchase order shall be void and of no effect, and if the violation was intentional, the employee responsible for the purchase shall be liable for any state funds paid contrary to this provision.
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III. Definitions 

Banner Finance System - A computerized on-line system used to produce and maintain the University's financial records for the eBucs System. The Banner Finance System is the official system of record for all procurement transactions created in eBucs.

Conflict of Interest - A “conflict of interest” occurs when the personal interests, financial or otherwise, of a person who owes a duty to the Tennessee Board of Regents (TBR) and University (all employees) actually or potentially diverge with the person’s professional obligations to and the best interests of the TBR and University (TBR Policy 1-02-03-10). It is the policy of the East Tennessee State University that no employee shall use his/her employment for personal benefit. Any appearance of favoritism or influence in doing business is prohibited.

It is unlawful for any employee to “bid on, sell, or offer for sale, any merchandise, equipment or material, or similar commodity, to the state of Tennessee” or “to have any interest in the selling of the same to the state” during that person’s term of employment and for six months thereafter (TCA 12-4-103). Disclosure of any such transaction by an employee or member of the employee’s family or by a business in which an employee or member of the employee’s family has any significant (more than 4%) ownership interest or for which an employee or employee family member serves as an officer is required by this policy. “Family member” includes the spouse and children (both dependent and non-dependent) of a person covered by this policy. 

It is a conflict of interest for any person or any company with whom such person is an officer, a director, or an equity owner of greater than 1% interest to bid on any public contract for products or services for a governmental entity if such person or a relative of such person is a member of a board or commission having responsibility for letting or approving such contract. For purposes of this section only, "relative" means spouse, parent, sibling, or child (TCA 12-3-106(b)(2003). 

eBucs System - A computerized electronic procurement (eProcurement) system used to manage the University's procurement process online. The eBucs application includes modules that address each step in the procurement process: shop and compare, create requisition, requisition approval process, create and distribute purchase order, process invoices, and receipt management. 

Minority-Owned business – A continuing, independent, for-profit business which performs a commercially useful function and is at least 51% owned and controlled by one or more minority individuals who are impeded from normal entry into the economic mainstream because of past practices of discrimination based on race or ethnic background in accordance with the provisions of T.C.A § 12-3-802.

Non-Competitive Purchases and Contracts - Purchases and contracts made when items or services are unique and possess specific characteristics that can be filled by only one source. 

Procard – The procurement card program available for purchases of goods less than $5,000.  

SciQuest Higher Markets - The University’s eProcurement software vendor and host of the eBucs System. 

Service Disabled Veteran business - Tennessee service-disabled veteran means any person who served honorably on active duty in the Armed Forces of the United States with at least a twenty percent (20%) disability that is service-connected meaning that such disability was incurred or aggravated in the line of duty in the active military, naval or air service. "Tennessee service disabled veteran owned business" means a service-disabled veteran owned business that is a continuing, independent, for profit business located in the state of Tennessee that performs a commercially useful function, and is at least 51% owned and controlled by one (1) or more service-disabled veterans in accordance with the provisions of T.C.A § 12-3-802

Small business – A business which is independently owned and operated, in accordance with the provisions of T.C.A § 12-3-802, and is not dominant in its field of operation. 

Surplus Property - Any University property such as movable equipment or supplies (not real property such as land or buildings) a department determines to be excess to its needs and for which the department has no foreseeable requirement. 

Woman-Owned business – A women-owned business that is a continuing, independent, for-profit business which performs a commercially useful function, and is at least 51% owned and controlled by one or more women; or, in the case of any publicly owned business, at least 51% of the stock of which is owned and controlled by one or more women and whose management and daily business operations are under the control of one or more women in accordance with the provisions of T.C.A § 12-3-802.
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IV.  Procedures  

Planning a Purchase - In preparation of the purchase of goods and services, a clear description of the requirements or specifications is the basis for assuring that departmental needs will be met. The approving authority from the ordering department must assure that funds have been appropriated and are available for the purchase of materials, supplies, equipment or services prior to award of a contract. The ordering department is responsible for determining that all items to be purchased are necessary. 

Purchase Requisition Procedures - Purchase requisitions should be submitted on-line by accessing the eBucs system. Purchase requisitions are submitted by the ordering department, approved by the appropriate officials and forwarded electronically to Procurement and Contract Services for processing into a bid or a purchase order. 

The purchase requisition should include, but not be limited to the following: 

•   Information describing the purpose of the acquisition, technical requirements, bidder qualifications, and any other information considered relevant to the goods or services being acquired. Whenever possible, all specifications for materials, supplies, equipment and services shall be worded or designed so as to permit open and competitive bidding.

•   The quantity or amount of articles or services required.

•   The estimated cost of goods or services. 

Additional Purchasing Methods - In addition to the purchase requisition, other purchasing methods, such as the Procard and contract purchases may be available. 

Competitive Bidding and Specifications - All purchases valued at $10,000 or more shall be based upon the principles of competitive bidding except as provided herein. Whenever possible, all specifications for materials, supplies, equipment and services shall be worded or designed so as to permit open and competitive bidding for the supplying of the articles, commodities or services to which they apply. Bid thresholds are set by the State of Tennessee and the Tennessee Board of Regents to establish the minimum dollar amount for which any purchase of goods or services must be competitively bid. Currently the bid threshold is $10,000. 

Bidding is required when the total purchase amount is $10,000 or more. A minimum of three bids is required when the total purchase amount is $10,000 to $50,000. Departmental personnel may contact sources of supply for quotes when the amount of the total purchase is $10,000 but less than $50,000. Procurement Services will assist in the development of specifications and provide capable suppliers upon request. Procurement Services is also available to obtain the bids. All bid information is to be attached as internal information on the purchase requisition in eBucs. If available, furnish with the purchase requisition such specifications, catalog pages, brochures, or other data as will provide an adequate basis for determining the quality and functional capabilities of the products being requested. 

Procurement Services will issue bids for goods and services $50,000 or more. 

The University shall actively solicit bids from small, minority, service-disabled veteran, and woman-owned businesses in order to obtain a fair proportion of goods and services from such businesses, whenever possible. 

Non-Competitive Purchases - Goods and services over the bid threshold may be procured without competitive bidding only if such purchases are justified in writing and approved by the President or Purchasing Manager or designee. 

Emergency Purchases - Requests for purchases of specific materials, supplies, equipment, or services may be made in the open market for immediate delivery only to meet bona fide emergencies arising from any unforeseen cause. The President or designee must approve all bona fide emergency purchase requests, and a written report on the circumstances of any such emergency justifying the purchase shall be prepared by the ordering department and maintained by the University. All emergency purchases shall, if practicable, be made on the basis of competitive bids. 

Contracts and Agreements - All contracts and agreements will be in conformance with TBR Policy 1:03:02:10, Approval of Agreements, TBR Guideline G-030, Contracts and Agreements, and ETSU Policy FP-14 Contracts and Agreements

Contracts in excess of $250,000 and greater require approval by the President and TBR. Non-competitive contracts of $250,000 or more and for a term greater than one (1) year require approval by the President, TBR and State of Tennessee Fiscal Review Committee. (Allow a minimum of 75 days prior to the effective date of the agreement). 

Prohibited Transactions - No personal items shall be purchased through the University or from funds of the University for any employee of the University or any relative of any employee. Personal gifts for employees cannot be purchased with university funds. Whenever any contract/purchase order is awarded to the contrary to this provision, the contract/purchase order shall be void and of no effect, and if the violation was intentional, the employee responsible for the purchase shall be liable for any state funds paid contrary to this provision.

Examples of Purchases Not Allowed with University Funds -

  • Gifts and flowers except for officially sponsored events and student activities (FP -21)
  • Personal purchases for employees or students
    • Professional license fees
    • Memberships and license fees– examples: civic organizations or professional organizations
    • Subscriptions
    • Purchases for office use – examples: decorations for private offices, coffee pots, microwaves, tissues, food, drinks, cups, plates, etc.
  • Employee awards/rewards
  • Gift cards: Non-employee and non-resident alien participant payments are limited to a maximum of $50 per payment and a total payment of less than $600 to any one participant. The department must retain a copy of the name, address, social security number and signature acknowledging receipt of the gift card. Department must be able to show that all the gift cards were distributed. These records are subject to audit by University and State Audit. A request to purchase gift cards should be sent to Accounts Payable for a check to be issued to the vendor. University Procards cannot be used to purchase gift cards.
  • Cash payments: Non-employee and non-resident alien participant payments are limited to a maximum of $50 per payment and a total payment of less than $600 to any one participant. Any individual participant payment over $50 must be processed through Accounts Payable via a check to the individual participant. Complete the Cash Payment to Research Participants form and return it to Financial Services before any funds can be distributed. Participant name, social security number, address and signature acknowledging receipt of the cash must be obtained. Differing from the use of gift cards, the petty cash receipts are returned to the Bursar’s Office when the petty cash account is closed out at the end of a grant or when the fund is replenished. The receipts are retained in the Bursar’s vault and are subject to audit by University and State Audit.

Allowed Transactions for Non-Employees with University Funds -

  • Honoraria
  • Token of  appreciation for service rendered - $50 or less per person
  • Incentives/Rewards for participating in studies, surveys, research projects or attending events
  • Promotional items for give-away in order to promote departments and departmental programs

Note: Whether gift cards or cash are distributed, a method of securing cards or cash is needed. 

Deliveries to Departments – To maintain a safe campus environment delivery trucks are generally limited to Central Receiving vehicles. Most deliveries of goods will be made to Central Receiving.   

Receiving Reports - When any supplies, equipment, or materials are delivered to the ordering department, the ordering department shall make a written or electronic certification that the supplies, equipment, or materials received were equal in quality and quantity to those requisitioned. Complete records on all receiving reports shall be maintained in order to provide a clear audit trail on the receipt of all purchases. 

Disposal of Surplus Personal Property - Surplus property is personal property (not real property such as land or buildings) owned by the University which has been determined by a department to be obsolete, outmoded, unusable or no longer needed for which future needs do not justify the cost of maintenance and/or storage. 

In some instances, other University departments may want to utilize personal property declared surplus to the needs of another department. Items may be transferred between departments or to surplus property for disposal by accessing the University's auction site
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Original effective date: April 9, 1982
Revised: September 1, 1989; January 2, 1992; October 1, 1993; September 19, 2001; August 28, 2002; November 4, 2002; June 6, 2005; October 1, 2013


Last review: October 1, 2013