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Policy: VII.C.1x3 inactive

Issued: July 1, 1996

Owner: Director of Procurement Services

Latest Revision: October 15, 2004



For Current Policies:
Policy Table of Contents


1.0 Purpose

This policy outlines the rules for purchasing goods and services from outside vendors as well as the specific purchasing methods that must be used in particular cases.

2.0 Policy [Top]

2.1 Introduction

Transactions charged to University accounts must be made in accordance with Federal and State laws and Federal, State and University regulations, policies, and procedures.

University resources may be used for official University of Virginia purchases only. All purchases of goods or services made with University funds must be necessary, reasonable, and directly related to the goals and mission of the University. Under no circumstances may University financial resources be used for personal expenditures.

University employees who make an unauthorized purchase may have their purchasing responsibilities suspended or revoked, may face additional administrative disciplinary action including termination of employment, and may be held personally liable for any charges incurred.

State law requires that specific types of purchases be handled in different ways to ensure the integrity of the procurement process. The main factors determining how a procurement is handled are the anticipated dollar amount of the purchase, the type of good or service being sought, and the time frame in which a particular item or service must be obtained.

2.2 Purchase of Goods and Services: up to $4,999.99

It is expected that departments will seek the maximum value for each expenditure and that no excessive or unnecessary purchases will be made.

Departments may use a Limited Purchase Order (LPO) to purchase non-restricted goods and services costing less than $5,000 directly from a vendor. An LPO may not be used, however, to make purchases on Medical Center accounts or to purchase any item on the list of restricted goods or services (see below).

Departments may not split a purchase costing $5,000 or more into a series of smaller individual purchases for the purpose of circumventing the rules governing competition. They also may not place multiple orders with a non-contract vendor that exceed $5,000 during any 12-month period.

The University Purchasing Card may be used to purchase goods and services up to the individual card holder's limit which may be set as high as $4,999 for individual transactions. The Purchasing Card may not be used, however, to purchase any item on the list of restricted goods and services (see below) regardless of amount. For information on the University Purchasing Card, please see Use of the University Purchasing Card Policy VII.C.3 and Procedure 7-105.

When a Purchasing Unit makes or anticipates direct purchases of more than $5,000 in goods and/or services from a single non-contract vendor within a 12-month period, the purchases may no longer be made by the department on a Limited Purchase Order (LPO) or the Purchasing Card, but must be made by Procurement Services from a requisition submitted by the department.

2.3 Restricted Goods and Services in Any Amount
Restricted goods and services may not be purchased with the University Purchasing Card or with a Limited Purchase Order. If purchase of a restricted item is necessary, departments must submit a Purchase Requisition to Procurement Services regardless of the amount. In addition, some restricted goods and services are on the Demand Payment list and may be paid with a Payment Voucher if the purchase does not require a vendor-supplied contract and is within the dollar limit specified.
The following goods and services are restricted. Departments seeking to purchase any of the items on this list will have to use a Purchase Requisition or Demand Payment as indicated:
  • Alcoholic beverages
  • Demand Payment*
  • Ammunition
  • Purchase Requisition
  • Carpet
  • Purchase Requisition
  • Car rental expenses outside the University's motor pool
  • Demand Payment*
  • Firearms
  • Purchase Requisition
  • Flowers
  • Demand Payment*
  • Framing
  • Demand Payment*
  • Furniture
  • Purchase Requisition
  • Gifts
  • Demand Payment*
  • Lodging
  • Demand Payment*
  • Prescription drugs
  • Purchase Requisition
  • Radioactive materials
  • Purchase Requisition
  • Renovation/construction services
  • Purchase Requisition
  • Restaurant meals
  • Demand Payment*
  • Window treatments
  • Purchase Requisition

    *The complete Demand Payment list with spending limits may be found on the
    Procurement Services web site or in "Use of the Payment Voucher and Demand Payments", Policy VI.F.4.


    2.4 Purchase of Goods and Services: $5,000 to $49,999.99

    Procurement Services buyers must seek formal competition when departments want to purchase goods or services costing $5,000 or more.

    For purchases of goods and services from $5,000 to $49,999.99, departments typically submit a Purchase Requisition to Procurement Services. Procurement Services' Buyer Managers assign specific Purchase Requisitions to individual Buyers. If the Purchase Requisition is consistent with University policy, Procurement Services' Buyers will turn the Purchase Requisition into a Purchase Order, determine the appropriate method of competition required in a particular case, and contact prospective vendors to obtain pricing and other information.

    Departments may recommend that Procurement Services buy the requested goods or services from a particular vendor. Moreover, departments themselves may even solicit bids for the purchase of goods and services that cost between $5,000 and $49,999.99.

    For purchases costing between $5,000 and $29,999.99, the competition requirement may be met by soliciting three bids by telephone, in writing, or by informal on-site bidding.

    For purchases costing between $30,000 and $49,999.99, the competition requirement must be met by soliciting four quotes in writing.

    Please see Procedure 7-102 for instructions on Preparing Purchase Requisitions.

    Exceptions to the competition requirement are made in the following cases:

    2.5 Purchases of Goods and Services: $50,000 and Above

    For purchases of goods and services costing $50,000 or more, Procurement Services solicits a minimum of six bids in writing through either the Invitations for Bid or Requests for Proposal process.

    The Invitations for Bid (IFB) process is used when price is the sole basis of selection. An IFB lists the precise specifications and all contractual terms and conditions for a planned purchase.

    The Requests for Proposals (RFP) process is used when price is not the sole basis of selection. An RFP describes all mandatory terms and conditions, describes in general terms what will be purchased, and specifies the criteria which will be used to evaluate proposals.

    All Invitations for Bid (IFB) and Requests for Proposal (RFP) are posted on the Procurement Services web site and the Virginia Business Opportunities (VBO) web site for a minimum of 10 calendar days. Any vendor can view any IFB or RFP and submit a bid or proposal.

    Departments should allow six weeks to process non-emergency procurements costing $50,000 or more.

    2.6 Emergency Purchases

    In an emergency situation, formal competitive requirements may be waived to purchase a good or service costing $5,000 or more. Emergency purchases are those required to protect life and/or property, or to prevent substantial economic loss or the interruption of a vital service. Emergency procedures may be utilized only to purchase that quantity of a good or service which is necessary to cover the emergency. Subsequent requirements shall be obtained using normal purchasing procedures.

    Departments are urged to call Procurement Services immediately when an emergency arises. Procurement Services requires that departments submit written justification describing the nature of the emergency. See Procedure 7-102 for instructions on preparing a Purchase Requisition as an Emergency procurement.

    Note: If an emergency occurs during other than business hours and procurement action is taken, the department should notify Procurement Services the next business day.

    All Emergency procurements of $50,000 or more are posted on the Procurement Services web site.

    2.7 Sole Source Purchases

    Sole Source means the item desired is available from only one vendor. Sole Source procurements are justified when only one firm can satisfy the University's requirements. The department must provide written justification when requisitioning a Sole Source purchase of $5,000 or more. For purchases in excess of $10,000 Procurement Services conducts a market survey and reference checks. Procurement Services reports Sole Source purchases in excess of $10,000 to the Secretary of Education on a quarterly basis.

    The ability of a particular vendor to deliver a good or service in the least amount of time is not a valid basis upon which to process a purchase as a Sole Source procurement.

    A purchase restricted to a stated brand available from more than one distributor or manufacturer is a proprietary purchase. Such a purchase restricts the requirements to the brand name and solicits bids from vendors selling that brand name product. Proprietary purchases are not Sole Source purchases; competition is still possible.

    All sole source purchases of $50,000 or more are posted on the Procurement Services web site for 10 days.

    See Procedure 7-102 for instructions on preparing a Purchase Requisition as a Sole Source procurement.

    2.8 Execution of Contracts

    All purchasing related contracts, including vendor-supplied contracts and contract renewals, must be signed by the Director of Procurement Services. If an individual University employee signs a contract he or she may be held personally liable for its terms and conditions. To purchase goods or services with vendor-supplied agreements, regardless of dollar amount or type of purchase, complete a Purchase Requisition and forward the requisition and vendor-supplied agreement to Procurement Services.

    2.9 Standing Orders

    Procurement Services recommends the establishment of a standing order for goods or services purchased on a regular basis. Standing orders can be established based on time frames or dollar limits.

    2.10 Merchandise Returns

    Departments should work directly with vendors on merchandise returns and credits. Departments should notify Procurement Services if they experience difficulties in returning items.

    2.11 Vendor Relations

    Procurement Services encourages the rotation of small dollar orders among vendors and encourages the use of minority vendors for small dollar orders (Reference Policy VII.C.4).

    If departments experience problems with vendors they are encouraged to call a buyer in Procurement Services immediately. Procurement Services can help build a legally defensive case from the outset if it appears the problem may escalate.

    Departments are under no obligation to meet with vendors, and are encouraged to refer vendors to Procurement Services.

    Procurement Services follows the National Association of Educational Buyers Code of Ethics. Departments are asked to follow this Code in dealing with vendors. Following this Code while conducting purchasing transactions helps ensure that vendors are provided fair access to the University's business and that all purchases are conducted in an ethical manner.

    2.12 National Association of Educational Buyers' Code of Ethics

    1. Give first consideration to the objectives and policies of my institution.

    2. Strive to obtain the maximum value for each dollar of expenditure.

    3. Decline personal gifts or gratuities.

    4. Grant all competitive suppliers equal consideration insofar as State or federal statute and institutional policy permit.

    5. Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.

    6. Demand honesty in sales representation whether offered through the medium of a verbal or written statement, an advertisement, or a sample of the product.

    7. Receive consent of originator of proprietary ideas and designs before using them for competitive purchasing purposes.

    8. Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a supplier; and/or be willing to submit any major controversies to arbitration or other third party review, insofar as the established policies of my institution permit.

    9. Accord a prompt and courteous reception insofar as conditions permit to all who call on legitimate business missions.

    10. Cooperate with trade, industrial and professional associations, and with governmental and private agencies for the purposes of promoting and developing sound business methods.

    11. Foster fair, ethical and legal trade practices.

    12. Counsel and cooperate with NAEB members and promote a spirit of unity and a keen interest in professional growth among them.

    National Association of Educational Buyers Adopted July 1, 1985.

    3.0 Definitions [Top]

    4.0 References [Top]

    Purchasing guidelines under the Code of Virginia are outlined in the Purchasing Manual for Institutions of Higher Education and their Vendors. The manual can be accessed on the Procurement Services web site.

    The main procedures that correspond to various parts of this policy are:

    5.0 Approvals and Revisions [Top]

    Previous version in effect from 7/2/01 to 10/3/03 available in policy archive.

    Previous version in effect from 10/3/03 to 10/15/04 available in policy archive.

    Maintained by University Comptroller
    © 2001 by the Rector and Visitors of the University of Virginia