East Tennessee State University
Financial Procedures 

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FP-4

PURCHASING POLICIES & PROCEDURES

Contents

I.  GENERAL
II.  PROCUREMENT OF GOODS, MATERIALS AND SUPPLIES / SERVICES
III. REQUISITIONS FOR PURCHASE
IV. PURCHASE ORDERS
V.  DEPARTMENTAL PURCHASE ORDERS
VI. PROCUREMENT CARDS
VII. GRANT FUND PURCHASES
VIII. FOUNDATION PURCHASES
IX. COMPETITIVE BIDDING AND SPECIFICATIONS
X. INVITATIONS TO BID AND REQUESTS FOR PROPOSAL
XI. MINIMUM NOTICE AND NUMBER OF BIDS
XII. BID WITHDRAWAL, BID REVISION, AND BID REJECTION
XIII.  ACCEPTANCE OF BIDS
XIV. PROTESTED BIDS
XV. TIE BIDS
XVI. RECEIVING REPORTS AND AUTHORIZATION FOR PAYMENT OF INVOICES
XVII. VENDOR LIST
XVIII. REMOVAL FROM VENDORS LIST
XIX. STATE MANUFACTURED ARTICLES AND SERVICES
XX. PURCHASES FROM STATE SURPLUS PROPERTY
XXI. PURCHASES FROM SMALL AND MINORITY OWNED BUSINESSES
XXII. EMERGENCY PURCHASES
XXIII. SPECIAL PURCHASE CATEGORIES
XXIV. MULTI-STEP SEALED BIDS
XXV. COMPETITIVE NEGOTIATION
XXVI. CONTRACTS AND AGREEMENTS
XXVII.  UTILITY CONTRACTS
XXVIII.  COORDINATION OF PURCHASING FUNCTIONS AMONG SYSTEM INSTITUTIONS AND SCHOOLS
XXIX.  LIFE CYCLE COSTS
XXX. DISPOSAL OF SURPLUS PERSONAL PROPERTY
XXXI. PROHIBITED TRANSACTIONS
XXXII.  REPORTS
XXXIII. COUNCIL OF BUYERS
XXXIV. CODE OF ETHICS IN PROCUREMENT AND CONTRACTING
XXXV. EXCEPTIONS

I. GENERAL

The following policies and procedures, General Bid Conditions (www.etsu.edu/purchasing/) and Code of Ethics in Procurement of Contracting are adopted as minimum standards for the exercise by the president of East Tennessee State University (ETSU), governed by the Tennessee Board of Regents (TBR), of his/her delegated authority to purchase materials, supplies, equipment and services. The authority of the President pursuant to these policies and procedures shall not include the purchase or lease of real property or data processing equipment, the purchase of insurance or professional or consultant services, or purchase for capital outlay projects from any fund source whatsoever, unless approved by the Chancellor or President in accordance with TBR policies and guidelines. Goods and services may be procured without competitive bidding only if such purchases are justified in writing and approved by the President or Chancellor as required by TBR policies and guidelines. In cases where the TBR policies and procedures do not address a specific procedure for purchase of a particular item, the Department of General Services' rules and regulations will govern, if applicable. The Chancellor or President may delegate approval authority as specified in this policy to his/her designees. Time periods specified in this policy shall be calculated by excluding the first day and including the last, unless the last day is a Saturday, a Sunday, or a legal holiday, and then it shall also be excluded.
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II. PROCUREMENT OF GOODS, MATERIALS AND SUPPLIES / SERVICES

A. Goods

Goods, materials, and supplies (cumulatively called "goods") should be awarded to the lowest responsive and responsible* bidder pursuant to a Request for Quotation, sometimes called an Invitation to Bid (ITB).

*"Responsive" means that the bid meets the requirements and criteria set forth in the Invitation to Bid or Request for Proposal (RFP). "Responsible" means that the bidder is capable of performing or is not otherwise disqualified. In the event a bidder is not either responsive or responsible, then the bid is to be disqualified.

B. Goods and Services

Certain services or a combination of goods and services may be procured as a "good", based on an Invitation to Bid rather than a Request for Proposal, if the end product is more important than the service that goes toward its production or where the vendor has little discretion in determining its actual content or form.

1. Examples of this type of service include, but are not limited to: (a) pest control, (b) security services; (c) moving and hauling; (d) refuse collections; (e) charter-services; (f) printing services; and (g) maintenance services.

2. Mischaracterization of an item to be procured as a good or service shall not constitute an error in the procurement if the requirements of this policy are met, but it may be grounds for the Institution to terminate the procurement process. For competitive procurement of goods, and Invitation to Bid (or Request for Quotation) is appropriate, and in general, a purchase order may be used to finalize the purchase. For competitive procurement of services, a Request for Proposal is more appropriate, and a purchase order is generally not sufficient to serve as the written contract for the services.

C. Services

A contract for personal service, professional service, or consulting service shall be used when the vendor's discretion or the form of the end product or service is critical to the performance. All purchases of personal, professional, and consultant services should be based, to the maximum extent practicable, on evaluation and consideration of vendor qualifications and cost. Detailed information regarding service contracts is provided in TBR Guideline G-030.

A contract for consulting services hereunder which exceeds $10,000 shall not be allowed unless it is determined by the President or his/her designee or Chancellor for TBR, in writing that the services are in fact needed and that they cannot be satisfactorily or economically performed by a state agency. The President shall report, in writing to the Chancellor regarding all consulting contracts exceeding $10,000 executed during the preceding quarter.

D. Outsourcing

1. TBR Institutions are encouraged to determine whether some services can be delivered more economically by the private rather than the public sector. The following process is hereby permitted and encouraged:

2. The State's cost of the service may be ascertained and kept confidential as part of the evaluation process. This cost must be finally determined and provided to the President or his/her designee, in a sealed envelope prior to bid/proposal due date.

3. The service may be the subject of an ITB/RFP, as appropriate, which approximately describes the services heretofore provided by the TBR/Institution.

4. The ITB/RFP may require that if the proposer's/bidder's price exceeds the State's confidential cost, the proposal/bid may be rejected.
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III. REQUISITIONS FOR PURCHASE

The Departmental Requisition is to be submitted in typewritten form, completing the spaces for the DEPARTMENT, DATE, ACCOUNT NUMBER, and ADDRESS OF SUGGESTED VENDOR. A complete description and estimated cost, if known, are to be included in the space provided. If applicable, a reference to the last purchase order number for the same item(s) should be made in the REMARKS section. A separate requisition must be furnished for each article or group of articles. (A sample Departmental Requisition is located at www.etsu.edu/purchasing/Forms/forms_main.htm).

Requisitions for departmental purchases must be approved in accordance with the provisions of FP-20, Signature Authorization Process.

Approval of requisitions certifies that:

A. The requisitioned items are needed by the requisitioning department,

B. That, when the total budgeted funds for the requisitioning department and other department needs are considered, the filling of the requisition would represent the best expenditure of fund for the department, and,

C. Funds are available within the departmental budget for the approximated expenditure.

Upon approval by the appropriate administrative officer(s) the requisition is to be forwarded to the Purchasing Department for processing into a University purchase order.
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IV. PURCHASE ORDERS

Purchase orders are the legal documents used by the University to order goods and services and also serve as the instruments that obligate the University to pay for such goods and services. No employee may obligate the University for material, equipment, supplies, or services except through the procedures described in this policy.

Purchase orders are issued to vendors only after a properly completed and approved requisition is submitted to the Purchasing Department and after the procedure described in Minimum Notice and Number of Bids (Section XI) and Requisitions for Purchase (Section III), are completed where applicable. The purchase order is a four (4)-part document and copies are distributed in the following manner:

White

Vendor

Yellow

Accounts Payable Department

Blue

Purchasing Department

Goldenrod

Requisitioning Department

Purchase orders are also maintained electronically on the University’s purchasing system.

Cancellations or amendments to outstanding purchase orders are made on the purchase order and marked as "Change Order". Either the vendor or the University may initiate cancellations or amendments to purchase orders.

A. Vendor requests to cancel or amend will be considered by the Director of Purchasing. Such requests confer no right on the part of the vendor to withdraw an offer and the University may, or may not, concur. The best interest of the University will be the prime consideration.

B. University requests to cancel or amend will be considered by the Director of Purchasing after receipt of request from the original requisitioner or other appropriate administrative officer. Departmental requests to cancel or amend a purchase order must be written and bear the appropriate authorizing signatures. Such requests confer no right on the part of the University to withdraw its contract to purchase; however, vendors generally are willing to cancel or amend orders if shipment is not in process.
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V. DEPARTMENTAL PURCHASE ORDERS

Departmental Purchase Orders (DPO’s) may be used for certain purchases when the total amount is less than $2,000. The department completes a DPO. The order is placed directly with the vendor by the department. Delivery of goods may be made directly to the department or to Central Receiving. After receipt of the goods ordered on the DPO, the authorized invoice is sent to Accounts Payable as proof that the items were received according to the order. Invoices are processed according to Receipt of Material and Approval of Invoices for Payment. (FP-5).

(A sample Departmental Purchase Order is located at www.etsu.edu/purchasing/Forms/forms_main.htm).
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VI. PROCUREMENT CARDS

The University procurement card may be used for certain purchases when the total amount is less that $2,000. Procurement cards are available for restricted and unrestricted accounts when properly authorized. Procards are issued in accordance with the Procurement Card Manual (www.etsu.edu/purchasing/Table1Titles/procard_manual.htm). The cardholder places orders directly with the vendor. The cardholder maintains the procurement card log. The person responsible for the account verifies monthly summary statements. Records for the Procard purchases are maintained in the department.
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VII. GRANT FUND PURCHASES

Purchases from Grant funds shall follow all applicable University policies and procedures.
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VIII. FOUNDATION PURCHASES

Purchases from Foundation funds shall follow all applicable University policies and procedures.
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IX. COMPETITIVE BIDDING & SPECIFICATIONS

All purchases shall be based upon the principle of competitive bidding except as provided herein. All bids are to be formally acquired through the Purchasing Department. 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. It will be considered open and competitive bidding by utilizing one of the following purchasing techniques:

A. Specifications based on brand names and product numbers- reference to brand names, trade names, model numbers or other descriptions peculiar to specific brand products is made to establish a required level of quality and functional capabilities; it is not intended to exclude other products of that level. Comparable products of other manufacturers will be considered if proof of comparability is contained in the bid. Vendors are required to notify the Chief Purchasing Officer whenever specifications are not open and/or procedures are not desirable. All suggestions or objections shall be made in writing and received by the Chief Purchasing Officer at least three (3) working days prior to the bid opening. It shall be the responsibility of the vendors, including vendors whose product is referenced, to furnish with the bid such specifications, catalog pages, brochures or other data as will provide an adequate basis for determining the quality and functional capabilities of the product offered. Failure to provide this data may be considered valid justification for rejection of a bid;

B. Specifications based on standard specifications;

C. Specifications based on qualified products list;

D. Specifications based on catalogs, price lists, or price schedules;

E. Multi-step sealed bidding - the use of a multi-step sealed bidding process is required in the acquisition of institutional computer systems involving the purchase of hardware and the development of application software. The multi-step bidding process may also be used for the procurement of other products or services, when it is not practical to prepare initially definitive specifications, which will be suitable to permit an award based on price. (TBR Guideline B-035, Procedures for Multi-Step Sealed Bidding).

Purchase of materials or services, for which the State of Tennessee Department of General Services, Purchasing Division has awarded a contract (SWC) to a vendor through the competitive bidding process, will be made without adherence to Minimum Notice and Number of Bids (Section XI), provided the vendor meets the bid specifications. This section does not preclude the University from utilizing the SWC as a bid in accordance with the competitive bidding process outlined in Minimum Notice and Number of Bids (Section XI), if so desired.
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X. INVITATIONS TO BID AND REQUESTS FOR PROPOSAL

Invitations to bidders shall specify:

A. the time and place that bids will be received and opened,

B. the articles or services for which such bids are to be submitted and the specifications for such articles or services,

C. the amount or number of articles or services required,

D. the time of delivery,

E. the amount, if any, of bid bond or certified check to accompany the bid,

F. the amount, if any, of any performance bond which will be required if the vendor is the successful bidder,

G. the date the bid evaluation is available for viewing,

H. if applicable, whether other TBR institutions and/or the University of Tennessee (UT) may purchase from the contract,

I. any other requirements, conditions or information in reference to the purchase deemed necessary.
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XI. MINIMUM NOTICE AND NUMBER OF BIDS

The number of bids required and the notice to bidders for solicitation shall be as follows:

A. If the estimated amount of the purchase (or revenue) is $10,000 or more, written sealed bids must be solicited from fifteen (15) vendors or the number of vendors on the Vendor List -- whichever is less. (The Chief Purchasing officer must approve the solicitation of less than 15 bids). The invitation to bid must be mailed at least fourteen (14) days (ten (10) days where all vendors are local vendors) before the date the bids are scheduled to be opened.

B. If the estimated amount of the purchase (or revenue) is at least $2,000 but less than $10,000, written, telephone, or electronic communication bids must be solicited from at least three (3) qualified vendors. A written record of the bidders and amounts bid shall be maintained.

C. If the estimated amount of the purchase is less than $2,000.00, the purchase may be negotiated.

The "splitting" or "artificial separation" of departmental requisitions into two or more proposed transactions where the motive for such action is to circumvent the bid process shall not be permitted.
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XII. BID WITHDRAWAL, BID REVISION AND BID REJECTION

Before bid opening, a vendor may be permitted to withdraw a bid entirely and/or submit a substitute bid. The vendor making such a request must submit suitable identification.

After bid opening, a vendor will be permitted to withdraw a bid only where there is obvious clerical error in the bid such as a misplaced decimal point, or where enforcement of the bid would impose unconscionable hardship due to an error in the bid resulting in a quotation substantially below the other bids received. Withdrawal will be considered only upon written request from the vendor.

In cases of errors in the extension of prices in the bid, the unit price will govern.

A bid may not be revised after bid opening.

After evaluation is complete and the successful bidder/proposer selected, negotiations may occur which serve to alter the bid/proposal in a way favorable to the Institution. For example, prices may be reduced, time requirements may be revised, the bid/proposal may be revised to supply omitted terms etc. In no event shall negotiations increase the cost or amend the proposal such that the apparent successful proposer no longer offers the best proposal.

When it becomes necessary to reject all bids, the reason for such rejection must be set out in complete detail and made available to all bidders who submitted a bid. Action to reject all bids shall be taken only for unreasonably high prices, errors in the invitation to bid, cessation of need, unavailability of funds, failure of all proposals to meet technical specifications, a determination that the goods/services can be more economically delivered pursuant to an agreement with another TBR institution or state agency, or a determination that proceeding with the procurement would be detrimental to the best interests of the institution, the reason for which must be documented and or any other reason approved by the President or his/her designee.
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XIII. ACCEPTANCE OF BIDS / NO RIGHTS CREATED

Notwithstanding any provision contained herein or in any solicitation document, submission of a bid or a proposal shall not create rights, interests or claims of entitlement in any bidder or proposer, including the successful bidder or proposer. Notwithstanding any action or agreement to the contrary, no such right, interest, or claim shall exist unless and until a purchase order has been issued or a contract is fully executed.

Bids must be received in the specified location on or before the date and hour designated for bid opening. Late bids will not be considered in contract award.

All bids received shall be publicly opened and examined by a designated University representative at the time and place specified in the invitation to bidders. All bids conforming to the invitation together with the name or the bidder shall be recorded, become a matter of public record, and remain open to public inspection after award. Where protected by the Public Records statutes, a vendor’s financial information disclosed in his bidder’s qualifications shall not be disclosed to the public.

Each bid should give the full name and business address of the bidder. Each bid must be signed in ink by the vendor’s authorized agent. Unsigned bids will be rejected. The person signing the bid must show his title, and if requested by the University, must furnish satisfactory proof of his or her authority to bind his or her company in contract. Bids must be written with typewriter or ink, otherwise they may not be considered. Purchase orders will be issued to the firm name appearing on the bid.

Where more than one item is specified in the invitation to bid, the institution shall provide in the invitation to bid that it has the right to determine the low vendor(s) either on the basis of each individual item, a group of items, or the total of all items.

All material, supplies, and equipment offered and furnished must be new unless the invitation to bid specifically permits offers of used or reconditioned items. Invitations to bid which specifically permit offers of used or reconditioned items shall require a warranty, except that the President or his/her designee shall have the authority to waive this requirement.

All bids shall be subject to rejection by the University. If awarded, the contract for purchase shall be awarded to the lowest qualified and responsible bidder, taking into consideration quantifiable factors including but not limited to apparent ability of the bidder to perform the proposed contract, the conformity of the articles or services to the specifications, any discount allowed for prompt payment or for any other reason, transportation charges, and the date of delivery specified in the invitation to bidders.

A bond for the faithful performance of any contract may be required at the discretion of the University.

A complete written record of all procedures and justifications shall be maintained on each purchasing transaction in order to provide a clear audit trail on the purchase.

Alternate bids will not be considered unless specifically called for in the bid.
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XIV. PROTESTED BIDS

A. Right to Protest

1. Any actual proposer who claims to be aggrieved in connection with a specific solicitation process may submit a protest in writing to the Chief Purchasing Officer within seven (7) calendar days after he or she knows or should have known the facts giving rise to the protest.

2. Signature on Protest Constitutes Certificate. The signature of an attorney or protesting party on a request for consideration, protest, motion, or other document constitutes a certificate by the signer that the signer has read such document, that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass, limit competition, or to cause unnecessary delay, or needless increase in the cost of the procurement or of the litigation. If a request for consideration, protest, pleading, motion, or other document is signed in violation of this subsection before or after appeal to the Chancellor, the Chancellor upon motion or upon his/her own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties, including the affected institution, the amount of the reasonable expenses incurred because of the filing of the protest, a petition for a stay of award, pleading, motion, or other paper, including reasonable attorneys’ fees.

3. Neither a protest nor a stay of award shall proceed under this section unless the protesting party posts a protest bond. The protesting party shall post, with the purchasing agent of the institution, at the time of filing a notice of protest, a bond payable to the institution in the amount of five percent (5%) of the lowest cost proposal evaluated or five percent (5%) of the highest revenue proposal evaluated. Such protest bond shall be in form and substance acceptable to the institution and shall be immediately payable to the institution conditioned upon a decision by the Chancellor that:

a. A request for consideration, protest, pleading, motion, or other document is signed, before or after appeal to the Chancellor, in violation of subsection XIV A.2.

b. The protest has been brought or pursued in bad faith, or

c. The protest does not state on its face a valid basis for protest.

4. The institution shall hold such protest bond for at least eleven (11) calendar days after the date of the final determination by the Chief Business Officer of the institution. If the protesting party appeals the determination in accordance with subdivision VI.B., the Chief Business Officer of the institution shall hold such protest bond until instructed by the Chancellor to either keep the bond or return it to the protesting party.

5. At the time of filing notice of a protest of a procurement in which the lowest evaluated cost proposal is less than one million dollars ($1,000,000), or in which the highest evaluated revenue proposal is less than one hundred thousand dollars ($100,000), a minority or small business protesting party may submit a written petition to the Chief Purchasing Officer for exemption from the protest bond requirement of subsection XIV.A.3. Such a petition must include clear evidence of minority or small business status. On the day of receipt, the petition shall be given (may be faxed) to the Chancellor or his or her designee. The Chancellor has five (5) business days in which to make a determination. If an exemption from the protest bond requirement is granted, the protest shall proceed as though the bond were posted. Should the Chancellor deny an exemption from the requirement, the protesting party shall post the bond with the purchasing agent of the institution as required in subsection XIV.A.3. within three (3) business days of the determination. For the purposes of this section, "minority business" is defined as solely owned or at least fifty-one percent (51%) owned by a person or persons who control the daily operation of such business and who is disabled (a person having a physical or mental impairment that in the written opinion of the person’s licensed physician, substantially limits one (1) or more of the major life activities of such person, including caring for oneself, and performing manual tasks, which include writing, walking, seeing, hearing, speaking, and breathing); African American (persons having origins in any of the Black racial groups of Africa); Asian American (persons having origins in any of the original peoples of the Far East, Southeast Asia and Asia, the subcontinent, or the Pacific Islands); Hispanic American (persons of Cuban, Mexican, Puerto Rican, Central or South American, or other Spanish or Portuguese origin, culture, or descent, regardless of race,); or Native American (persons having origins in any of the original peoples of North America). For purposes of this section, "small business" is defined as one which is independently owned and operated, has total gross receipts of no more than two million dollars ($2,000,000) for the most recently ended federal tax year, and employs no more than thirty (30) persons on a full-time basis.

B. Authority to Resolve Protest

1. The Chief Purchasing Officer of the institution has the authority to resolve the protest. If deemed necessary, the Chief Purchasing Officer may request a meeting with the protesting party to seek clarification of the protest issues.

2. The final determination of the Chief Purchasing Officer shall be given in writing and submitted to the protesting party.

3. The protesting party may request that the final determination of the Chief Purchasing Officer be considered by the Chief Business Officer of the Institution. The request for consideration shall be made in writing to the Chief Business Officer within seven (7) calendar days from the date of the final determination by the Chief Purchasing Officer.

4. The Chief Business Officer has the authority to review and resolve the protest. If deemed necessary, the Chief Business Officer may request a meeting with the protesting party to seek clarification of the protest issues. The final determination of the Chief Business Officer shall be given in writing and submitted to the protesting party.

5. The protesting party may request that the final determination of the Chief Business Officer be considered by the President or Director of the institution. The request for consideration shall be made in writing to the President or Director within seven (7) calendar days from the date of the final determination by the Chief Business Officer.

6. The institution shall have no longer than sixty (60) calendar days from receipt of the protest to resolve the protest.

7. The protesting party may request that the final determination of the Chief Business Officer by considered by the President or Director of the institution. The request for consideration shall be made in writing to the President or Director within seven (7) calendar days from the date of the final determination by the Chief Business Officer.

8. In the event that the institution fails to acknowledge receipt of a protest within fifteen (15) days of receipt of a protest or fails to resolve the protest within sixty (60) calendar days, the protesting party may request that the Chancellor consider the protest at a meeting.

C. Stay of Award

Prior to the award of a contract, a proposer who has protested may submit to the Chief Business Officer a written petition for stay of award. Such stay shall become effective upon receipt by the Chief Business Officer. The Chief Purchasing Officer shall not proceed further with the solicitation process or the award of the contract until the protest has been resolved in accordance with this section, unless the Chancellor makes a written determination that continuation of the solicitation process or the award of the contract without delay is necessary to protect substantial interests of the institution. It shall be the responsibility of the Chief Business Officer to seek such determination by the Chancellor.

D. Protest Subsequent to Award

The Tennessee Claims Commission has exclusive jurisdiction to determine all monetary claims against the state for the negligent deprivation of statutory or constitutional rights.
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XV. TIE BIDS

A tie bid exists when two or more bidders offer products that meet all specifications, terms and conditions at identical prices, including cash discount offered. In such case, a tie bid will be broken by the following methods, in descending order of preference.

A. In-state business.

B. Small and minority business.

C. Award item(s) to vendor who was low bidder on other item(s) being bid per the same requisition.

D. By lot or coin toss (properly witnessed and documented).
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XVI. RECEIVING REPORTS AND AUTHORIZATION FOR PAYMENT OF INVOICES

When any supplies, equipment or materials are received by the University, the receiving agent thereof shall make a written certification that the supplies, equipment or materials received were equal in quantity to those ordered. Complete records on all receiving reports shall be maintained in order to provide for a clear audit trail on the receipt of all purchases.

Supplies, materials, and equipment may be shipped to Central Receiving, or they may be shipped directly to requesting department.

C.O.D. charges are not accepted.
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XVII. VENDOR LIST

A vendor list is maintained in the Purchasing Department. The list includes the types or classes of materials, supplies, equipment or services which the vendor is willing and able to furnish the University to submit sufficient information to demonstrate ability to perform any future commitment prior to inclusion on the list of bidders.
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XVIII. REMOVAL FROM VENDORS LIST

Vendors who fail to respond to a reasonable number of bids or fail to provide adequate goods or services shall be removed from the Vendors List. Reported failure to comply with bids, awards, and/or orders becomes a part of the bidder's application file. If a qualified bidder repeatedly fails to respond to Invitations to Bid, the bidder will be removed from all commodity groups. Examples of failure to comply include but are not limited to:

Overshipments
Undershipments
Early Shipments
Late Shipments
Damaged Products
Defective Products
Shipments Not in Conformance with Specifications
Unauthorized Substitutions
Billing Errors
Service Deficiencies
Failure to Ship

Other principal causes for temporary or permanent removal from the bid list are:

Conflict of Interest
Unethical Practices
Misrepresentation of Merchandise

Failure of a vendor to perform satisfactorily in any of the above areas may result in a vendor's liability for damages to the University.
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XIX. STATE MANUFACTURED ARTICLES AND SERVICES

The University is required to purchase items and services from other State agencies, e.g., Department of Correction, Blind Services, whenever such items or services are available therefrom and meet the desired conditions and standards.
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XX. PURCHASING FROM STATE SURPLUS PROPERTY

Requests to purchase material from the State Surplus Property System may be made in the form of an official memorandum to the University Comptroller. If approved, a letter, which must be hand carried by the employee to the Surplus Property Office, will be issued to the Division of Surplus Property requesting property be released to the requesting employee in the name of East Tennessee State University.
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XXI. PURCHASES FROM SMALL AND MINORITY OWNED BUSINESS

The University shall actively solicit bids from small and minority owned businesses in order to obtain a fair proportion of goods and services from such businesses, whenever possible. In accordance with TCA 12-3-808, quarterly purchasing information related to small and minority-owned businesses will be filed with the Tennessee Board of Regents.

For reporting purposes under this section, a "minority owned business" means a business which is solely owned, or at least fifty-one percent (51%) of the assets or outstanding stock of which is owned, by an individual who personally manages and controls the daily operations of such business and who is impeded from normal entry into the economic mainstream because of: (a) past practices of discrimination based on race, religion, ethnic background, or sex; (b) a disability as defined in TCA 4-26-102; or (c) past practices of racial discrimination against African-Americans. A "small business" means a business which is independently owned and operated and is not dominant in its field of operation. The State of Tennessee shall design and implement procedures to identify small businesses and to monitor purchases from those businesses. The State shall establish criteria for consideration as a small business, which shall include, but not be limited to, number of employees and annual gross sales.
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XXII. EMERGENCY PURCHASES

Purchases of specific materials, supplies, equipment or services for immediate delivery may be made in the open market without competitive bidding only to meet bona fide emergencies arising from any unforeseen cause. All bona fide emergency purchases must be approved by the president or his/her designee, and a written report of the circumstances of any such emergency justifying the purchase shall be prepared and maintained by the University. All emergency purchases shall, if practicable, be made on the basis of competitive bids.
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XXIII. SPECIAL PURCHASE CATEGORIES

A. Sole source or proprietary purchases may be allowed pursuant to the following:

Sole Source Procurement - Sole source purchases are made only when items are unique and possess specific characteristics that can be filled by only one source.

Proprietary Purchase - A proprietary product is one that is manufactured and marketed by a person or persons having the exclusive right to manufacture and sell the product. Marketing is generally controlled by franchises that may include competitive sales at wholesale or retail levels. When it is found that bids may be obtained from different franchises, bid invitations must be issued.

Factors to be considered in sole source and proprietary purchases include the following:

1. Whether the vendor possesses exclusive and/or predominant capabilities or the items contain a patented feature providing superior utility not obtainable from similar products.

2. Whether the product or service is unique and easily established as one of a kind.

3. Whether the program requirements can be modified so that competitive products or services may be used.

4. Whether the product is available from only one source and not merchandised through wholesalers, jobbers, or retailers.

5. Whether items must be interchangeable or compatible with in-place items.

6. Whether the cost of conversion, including but not limited to disruption, re-training, and replacement precludes bidding competitively.

7. Whether the product is to be used in an instructional setting and the intent is to provide instruction on the specific product or diversity of products.

8. Other justifications as approved by the Chancellor or his/her designee.

All authorized sole source procurements must be approved by the President or his/her designee and may be procured utilizing non-competitive negotiations.

Whenever specifications are not worded or designed to provide competitive bidding, or specify a single brand, the person responsible for the recommendation shall be required to justify the necessity for the specification in writing, and the request shall be approved by the President or his/her designee. (Sole Source/Proprietary Request form is located at www.etsu.edu/purchasing/Forms/forms_main.htm).

B. Purchases For Resale In Auxiliary Enterprises

Purchases of items for resale shall be made as follows:

1. Textbooks and other course related materials may be purchased without adherence to the section of this policy, Minimum Notice and Number of Bids. All textbook ordering lists and authorization forms must be maintained for audit purposes.

2. Certain items for resale for which customers have expressed a preference, and/or promotional items procured under accepted retail merchandising practices, may be purchased without adherence to the section of this policy, Minimum Notice and Number of Bids (Section XI). All textbook ordering lists and authorization forms must be maintain for audit purposes.

C. Purchases For Libraries, Excluding Materials And Supplies Identified For Consumption By The Library

Purchase of materials for additions to a library collection include cost of books, catalogs, periodicals, binding, audio- visual media, and other general publications. These items are capital expenditures. These purchases may be made without formal bids or quotations, and appropriate documentation shall be maintained on these purchases to support sole source procurement.

D. Acquisition or Lease of Information Technology Equipment

Acquisition or lease of information technology and ancillary equipment are to follow the following approval processes:

  1. Standard equipment
    a. Department Chair/ Budget Supervisor
    b. Finance and Administration (COM only)
    c. Dean / Director
    d. Vice President / Designate
    e. Budget Director
  2.  Non-Standard equipment
    a. Department Chair/ Budget Supervisor
    b. Information Technology
    c. Finance and Administration (COM only)
    d. Dean / Director
    e. Vice President / Designate
    f. Budget Director

E. Acquisition or Lease of Administrative Systems

Acquisition or lease of information technology equipment, software or services which interface with ETSU's Enterprise Resource Planning system (banner) must follow the following approval process:

  1. Department Chair/ Budget Supervisor
  2. Information Technology
  3. Administrative Technology Subcommittee
  4. Information Technology Governance Committee
  5. Finance and Administration (COM only)
  6. Dean / Director
  7. Vice President / Designate
  8. Budget Director

F. Acquisition of Computer Systems

Acquisition of computer systems involving the purchase of hardware with the development of application software shall be made in accordance with TBR Guideline B-030, Acquisition of Data Processing Equipment/Software/Services, and Guideline B-035, Procedure for Multi-Step Sealed Bidding.

G. Maintenance Contracts

Requisitions to purchase maintenance contracts are to be submitted to the Purchasing Department. In submitting requests, consideration should be given to the necessity for recalibration of sensitive scientific equipment, the age of the equipment, current and replacement values, ability of University personnel to perform repairs and assurance that the new equipment warranty has expired.

H. Requests For Repairs

Requisitions to repair University property shall be submitted to the Purchasing Department. The item(s) to be repaired should be accurately shown on the requisition, including, if applicable, the serial number and ETSU inventory number, and briefly describe the repairs needed.

In order to maintain inventory control of property, all shipments of property for repair, adjustments and calibration, etc., shall be made through the Central Receiving Warehouse. Repairs that can be made through local vendors may be picked up by the vendor or hand carried to the repair center.

Repairs of an emergency nature may be handled through the procedures described in Emergency Purchases (Section XXII).

I. Blanket/Term Contracts

Term contracts for the furnishing of items costing less than $2,000.00 not obtainable on State or University Contracts. Examples of such contracts may include parts, hardware items, office supplies, etc. Term contracts for other items may be entered into, but only when based upon the competitive bidding procedure.

J. Items for Pre-View or Trial

Films, equipment and/or supplies may be requested for pre-view or trial directly from a prospective vendor for the purpose of determining before purchase the quality, contents, suitability or desirability of the item. It is recommended that a University purchase order be created to cover the trial. If suitable, the item may then be requisitioned through the procedures described in Requisitions for Purchase (Section III); however, if unsuitable for use, there is no obligation to purchase such items without an official purchase order. It is suggested that this policy be made known to any vendor before requesting items for pre-view or trial.

K. Purchases utilizing federal funding are to follow federal guidelines regarding such purchases. Purchases for goods or services shall not be made from vendors on the List of Parties Excluded From Federal Procurement and Nonprocurement Programs.
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XXIV. MULTI-STEP SEALED BIDS

A. In the invitation to bid, the Purchasing Department shall provide the bidder with information describing the functional requirements of the system, purpose of the procurement, technical requirements, bidder qualifications, and any other information considered relevant to the goods and services being acquired.

B. The bidder shall submit a technical offer sufficient in detail so as to constitute the technical specifications of the purchase.

C. As specified in the invitation to bid, all technical offers must be received at the University at the designated time and will be opened in the same manner as a competitive bid. Technical offers shall not be made public until the inspection period following evaluation of the bids submitted with prices.

D. Acceptability of technical offers shall be determined by an evaluation team appointed by the President, or his/her designee. All technical offers will be evaluated based on the criteria of the invitation to bid and other information learned during the technical evaluation process. Vendors whose technical offers are deemed acceptable will be invited to participate in a confidential discussion of unpriced technical offers. Offers not deemed acceptable will not proceed to the pricing phase.

E. Bid Price. At the conclusion of the evaluation phase of the multi-step sealed bidding process, bidders will be required to submit a bid price clearly defining the cost of their technical offer in accordance with the invitation to bid.

F. Award. Each contract shall be awarded to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation to bid.
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XXV. COMPETITIVE NEGOTIATION

A contract may be entered into by competitive negotiation only in cases when the University is unable to obtain needed goods and/or services by the competitive bid process. The President shall prescribe the procedures under which negotiation is to be conducted. These procedures shall provide for the safeguarding of the information and provide fairness to the vendors in the negotiation process. In the event it appears the competitive negotiation process is to be implemented, such an action must be approved by the President. Once the negotiations have been concluded, a recommendation shall be made by the negotiation team to the President, and he/she shall approve the results prior to entering into a contact.
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XXVI. CONTRACTS AND AGREEMENTS

All contracts and agreements will be in conformance with TBR Guideline G-030, and Contracts and Agreements (FP-14).

A. All agreements and contracts involving or related to the purchase or lease of real property, exceeding $15,000 per year or for more than five (5) years, the purchase or lease of data processing equipment exceeding $100,000, and the purchases related to capital outlay projects, shall be expressly subject to the approval of the Chancellor.

B. Requests for lease-purchase agreements and for the lease of real property are to be submitted to the University contract officer, who will obtain any necessary approvals and shall draw or approve the lease. Leases (rentals) of equipment for short periods of time to complete specific needs are made by the Purchasing Department and are made when it is economically impractical to permanently purchase.

C. Requests for personal, professional or consultant services are to be submitted to the appropriate Vice President. If approved, a contract, drafted in the format prescribed by the Tennessee Board of Regents, will be drawn and submitted to the University contract officer for review (FP-14). Payment for services will be made in accordance with the terms of the contract and shall follow the procedures as described in Receiving Reports and Authorization for Payment of Invoices (Section XVI).

D. No agreement of any nature which requires the expenditure of funds shall extend beyond the end of fiscal year in which it is entered into unless expressly subject to the condition that the University shall have the right to terminate the agreement at the end of any fiscal year in the event that sufficient funds are not appropriated by the General Assembly and/or budgeted for continuation of the agreement.

E. No agreement of any nature shall be entered into which:

1. provides the University shall indemnify or hold harmless any other party;

2. provides that the University shall pay taxes of any nature;

3. provides for the payment of interest, late charges, or penalties of any nature by the University;

4. contains any provision concerning default by the University, commencement of any legal proceeding, or payment of attorney's fees.

F. All agreements, contracts and subcontracts shall contain all necessary nondiscrimination requirements provided by Federal or State laws and regulations.

G. Contract Limitations

No contract for purchase of materials, supplies, equipment or services shall be awarded pursuant to these procedures unless funds have been appropriated and are available for the purchase. No contract shall be entered into in addition to the contract resulting from acceptance of a bid and issuance of a purchase order except to TBR Policy No. 1:03:02:10, Approval of Agreements.

H. Contracts containing no financial consideration may be negotiated.
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XXVII. UTILITY CONTRACTS

The University shall purchase or contract for all telephone, telegraph, electric light, gas, power, postal and other services for which a rate for the use thereof has been established by a public authority in such manner as the Commissioner deems to be in the best interest of the State of Tennessee. Each such purchase or contract shall be made on a competitive basis, whenever possible, in accordance with the TBR Purchasing Policy, unless it has been determined that such purchase is single source as determined by Special Purchasing Categories (Section XXIII).
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XXVIII. COORDINATION OR PURCHASING FUNCTIONS AMONG SYSTEM INSTITUTIONS AND SCHOOLS

In all contracts and other bid processes consideration should be given to such wording that would allow member institutions and schools to purchase under the terms and conditions of the bid of the individual institution or school. In all appropriate circumstances, consideration should also be given to wording that would allow UT institutions to purchase under the terms and conditions of the bid of a TBR institution. TBR institutions shall also be permitted to purchase under the terms and conditions of a bid of the UT system if the bid authorizes TBR institutions to do so.
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XXIX. LIFE-CYCLE COSTS

The University shall, in a case where the State Board of Standards has adopted a rule requiring life-cycle costs to be used by the Commissioner of the Department of General Services in contracting for major energy-consuming products, and may, in a case where a life-cycle cost and/or energy efficiency standard has been developed for a product by the federal government, apply such life-cycle cost and/or energy efficiency standard in the determination of the lowest qualified and responsible bidder under Acceptance of Bids (Section XIII).
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XXX. DISPOSAL OF SURPLUS PERSONAL PROPERTY

Surplus property is personal property, which has been determined obsolete, outmoded, unusable or no longer usable by the University, or property for which future needs do not justify the cost of maintenance and/or storage. Disposal of such property must be in accordance with TBR Policy No. 4:02:20:00, Disposal of Surplus Personal Property.
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XXXI. 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. 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 is awarded contrary to the provisions of these policies and procedures, the contract 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 these policies and procedures.

A. The University cannot buy from or sell to University employees or immediate relations of employees during the terms of their employment or within six (6) months after termination of employment.

B. Purchases of used equipment or supplies are not made without the approval of the Director of Purchasing.

C. Purchases are not made on an installment basis. (This does not include Lease/Purchase agreements.)

D. The University, in no instance, will be held responsible for borrowed equipment from any outside agency unless it is obtained on loan through the requisition process and approved by the University Comptroller.
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XXXII. REPORTS

A report of Minority, Women, Disabled-owned and Small Businesses required by Tennessee Code annotated 13-2-808 shall be transmitted to the Vice Chancellor for Business and Finance on a quarterly basis (January-March, April-June, July- September, and October-December). Other reports will be provided upon request.
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XXXIII. COUNCIL OF BUYERS

A representative from Purchasing will participate in the Council of Buyers, which is composed of a representative from each TBR institution and a representative form the TBR staff. The council meets at least semi-annually, or upon request of the Chancellor or his designee, and shall have the responsibilities including but not limited to the following:

A. Development of uniform procedures, forms and general conditions governing purchasing which may be feasible and practicable for use by all institutions and technology centers in the System, including affirmative action and equal opportunity provisions, for review and approval by the Chancellor.

B. Formulation of standard specifications for purchase of specific materials, supplies, and equipment which may be feasible and practicable for use by the institutions and technology centers for review and approval by the Chancellor.

C. Consideration of the feasibility and advantages of possible term contracts for the System, of designation of certain institutions or technology centers as responsible purchasing agents for specific materials, supplies or equipment for the System, and of the possibility of coordinating purchasing functions among institutions and technology centers within geographic areas, with recommendations to be submitted to the Chancellor.

D. Formulation of a uniform code of ethics for governing the professional conduct of employees responsible for purchasing (Section XXXIV).

Any other matters referred to the Council by the Chancellor.
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XXXIV. CODE OF ETHICS IN PROCUREMENT AND CONTRACTING

The code of ethics was developed by the TBR Council of Buyers, approved by the Chancellor, and shall be applicable to all employees of East Tennessee State University who are primarily responsible for the purchase of goods and services for the University.

A. Statement of Policy

Employees must discharge their duties and responsibilities fairly and impartially. They also should maintain a standard of conduct that will inspire public confidence in the integrity of the University.

B. General Standards of Ethical Conduct

1. Any attempt to realize personal gain through public employment, inconsistent with the responsible discharge of that public employment, is a breach of public trust.

2. Employees shall base all purchases on the principle of competitive bidding consistent with policies of the Board and the University.

3. Employees shall grant all competitive bidders equal consideration, regard each transaction on its own merits, and foster and promote fair, ethical and legal trade practices

4. Employees shall avoid misrepresentation and sharp practices, and demand honesty in sales representations whether offered through the medium of a verbal or written statement, an advertisement, or a sample of a product.

5. Employees shall be receptive to competent counsel from colleagues, and be willing to submit any major controversy through the appropriate appeals processes.

6. Employees shall accord prompt and courteous reception insofar as conditions permit to all who call on legitimate business missions.

7. Employees shall not use without consent the original designs developed by a vendor for competitive purposes.

C. Conflict of Interest

It shall be a breach of ethical standards for any employee, in the performance of his or her official duties, to participate directly or indirectly in any proceeding or application, request for ruling or other determination, claim or controversy, or other particular matter pertaining to any contract, or subcontract, and any solicitation or proposal thereof, in which to his or her knowledge:

1. He or she or any member of his or her immediate family has a substantial financial interest; or

2. A business or organization in which he or she or any member of his or her immediate family has a substantial financial interest as an officer, director, trustee, partner or employee, is a party; or

3. Any other person, business, or organization with whom he or she or a member of his or her immediate family is negotiating or has an arrangement concerning prospective employment is a party.

A substantial financial interest shall include, but not be limited to: (1) ownership of ten percent (10%) or more of the outstanding stock of a corporation; (2) any interest in a partnership; or (3) receipt of salary or other payment for services rendered from any organization.

Direct or indirect participation shall include but not be limited to involvement through decision, approval, disapproval, recommendation, preparation of any part of a purchase request, influencing the content of any specification or purchase standard rendering of advice, investigation, auditing or in any other advisory capacity.

D. Gratuities

It shall be a breach of ethical standards for any employee or former employee to solicit, demand, accept, or agree to accept from another person, a gratuity or an offer of employment, in connection with any decision, approval, disapproval, recommendation, preparation of any part of a purchase request, influencing the content of any specification or purchase standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any proceeding or application, request for ruling or other determination, claim or controversy, or other particular matter, pertaining to any contract or subcontract and any solicitation or proposal thereof.

E. Contemporaneous Employment Prohibited

It shall be a breach of ethical standards for any employee who is involved in purchasing to become or be, while such an employee, the employee of any party contracting with the particular governmental body by which the employee is employed.
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XXXV. EXCEPTIONS

Any exception to the policies and procedures established herein shall be subject to the approval of the Chancellor.
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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
Last review: June 6, 2005


Web page last updated 07/06/07

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