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5.1 - Creating and Approving Purchase Requisitions
5.2 - Making a Purchase with a Purchase Order
5.3 - No Charge PO for Equipment Evaluation or Supplier Loaned Equipment
5.4 - Written Agreements & Contracts
5.5 - Deliveries
5.6 - Concealed Damage
5.7 - Invoice Processing and Credit Memos
5.8 - Prompt Payment Discounts
5.9 - Purchasing Responsibilities by Organization
5.10 - Supplier Performance

A purchase requisition is an internal request for goods or services that originates from a Loyola employee. Each requisition can include many lines, generally with a distinct item on each requisition line. Each requisition line includes at least a description of the item, the unit of measure, the quantity needed, the estimated price per item, and the accounting distribution to which the employee is charging the item.

 

A purchase requisition must receive the required approvals before a Buyer can create the Lawson purchase order. A requisition is fully approved only when an employee who has enough authority (i.e. is authorized) approves it. For specifics on transactions exceeding $5,000, prior to the issuance of a commitment, please refer to . Requesters determine needs for goods or services that will be procured with a purchase order. The requester may also suggest a specific supplier for each requisition.

 

An approver reviews the requisition and has the option to reject (return to requester), approve, modify or forward the requisition to another approver. The approver can modify anything on the requisition (e.g. quantity, items, item attributes).  Note that if external funding (e.g. grant money) is being used for the purchase, Sponsored Program Accounting approval is required. Authorized approvers are responsible to ensure that the purchase is appropriate, that the correct account distribution is being used, and, when necessary, the proper departments (e.g. Purchasing, Sponsored Program Accounting, etc.) or individuals (e.g. Principal Investigator) have approved the purchase.

Once the requisition has been approved, it is placed into the Buyer’s work queue and the buyer creates the associated purchase order. 

 

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Using a purchase order (PO) to procure an item or service is common, and is a preferred method when detailed transaction data will be required at a later date.  POs can be used when detailed product specifications, Statements of Work and contracts are associated with the purchase, and can especially useful when $5,000 or more of external funding is being committed to a non-Pre-Qualified Supplier.  For small purchases, using a Pro-Card (LUC's issued procurement card) is often the fastest and cheapest way to procure items which don't need to be tracked.

 

1. Define requirements (e.g. product specifications, scope of work, etc.)
2. Contact a Buyer or Purchasing Manager if the expected amount of the purchase is $250,000 or more for advice and/or assistance with bidding.
3. Refer to the Purchasing Buyer Matrix to determine documentation required.  For example, requests to purchase items or services for $5,000 or more from a non-Pre-Qualified Supplier require three competitive quotes to be obtained, and documented on the Purchasing Checklist (submitted with requisition).  Orders $25,000 or more often require an approved Capital Budget Form.
4. When all required approvals and documentation has been submitted, the Buyer will review, and if acceptable, subsequently issue the PO to the supplier.
5. When ordered items are received, the requestor must inspect the delivered materials (identifying any damage, missing parts or shipping errors), and compare the material received to the packing list. The item(s) will then need to be received (in Lawson) before Accounts Payable can pay the associated invoice. At LUC's Health Sciences Campus, the Receiving Department (at Dock 8) receives the shipment. At LUC's Lakeshore and Water Tower campuses, the Purchasing Department may assist in the system receipt of the received items.
6. If the received items arrive damaged or need to be returned, contact the supplier to arrange for a replacement, a credit memo, or return authorization (being sure to safeguard the Return Authorization number.) Buyers can assist.

Blanket POs Blanket purchase orders can be issued when a requester plans to make similar repetitive purchases from a supplier over a period of time.

 Draw Down POs: Draw down POs (POs committing a maximum dollar amount, which will be drawn upon/down as accompanying invoices are paid.

 Pre-payment POs: Pre-payment for goods or services should be avoided whenever possible, but if necessary, can be issued (with departmental management approval.) LUC prefers to make periodic payments during the term of an order (aligned with specific milestones reached by the supplier) rather than make a “pre-payment.” A Lawson purchase order is to be used if prepayment must be made.  Note that ProCards cannot be used for a Pre/down payment.

 

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Zero Dollar Purchase Orders: Zero dollar purchase orders are normally used for transactions where there is no cost to the University, but there is a need to document the transaction for ownership, responsibility or liability reasons. For example, if a supplier intends to leave a piece of equipment or software on University property for the purpose of evaluation or for a short-term loan, it is necessary to pre-establish the ownership rights, value, the responsibility for care and use, and the liability in case of accident, loss or damage.

POs issued to suppliers for loaned materials or equipment are labeled as "no-charge" or "zero dollar" transactions by which physical custody of property is granted to the University without transfer of title or accountability. LUC may, however, accept the responsibility and liability for its proper use, protection and return.  Buyers can assist with documenting the instances where suppliers provide the University with equipment or software as a loan or an evaluation trial, often in anticipation of a future sale.   

 

The no-charge purchase order must include specific information about the loan/evaluation, including identification of the equipment or software, its value, an indemnification clause protecting University interests, the location of the equipment or software on University premises, and what the University is required to provide at the completion of the evaluation.  If a "No-charge/zero dollar" purchase order is issued, a copy is to be provided to the appropriate department as well as Accounts Payable.

“Loyola’s Request” should be used when the University is requesting equipment/products as loaned property or for evaluation purposes. In this case, the University accepts responsibility and liability for the property’s use, protection and return (possibly including shipping, usage and set-up costs). 

 

“Supplier’s Request” should be used when a supplier is attempting to sell its equipment/products to the University and wishes to loan the property for evaluation purposes. In this case, the University should accept only limited responsibility and liability for the property’s use, protection and return (shipping, usage and set-up costs should be borne by the supplier).

 

If a purchase is not made after the loan or evaluation period, the Buyer must ensure that the items are returned at the end of the agreed upon term. Supplier items received for University requested evaluation may or may not be returned depending upon whether there are any other suppliers providing equally effective items. If items under evaluation have a value in excess of the capitalization threshold, consideration of University policies regarding capital equipment must be considered; and, if items have a value equal to or in excess of $5,000, consideration of University policies regarding the establishment of competition and proper documentation must still be made.

 

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Commitments for some arrangements and services cannot always be placed solely on a purchase order or ProCard without the supplement of a written contract signed by both parties. A written contract often incorporates much more detail than a purchase order or credit card transaction alone can provide, especially related to the operating terms and conditions and the details of the transaction itself (e.g. payments under leases, escrow for software source code, liability and indemnification issues, warranty statements, export controls, etc).

 

The link to the can be found on the Purchasing Department website.

 

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For purchases delivered to LUC's mailrooms, the mailroom staff will deliver to the requester’s assigned desk (or department office if the requester doesn't have an assigned desk) on their daily mail runs. Thus, it is very important that the contact person’s name be included in the delivery instructions given to the supplier.  For liability reasons, the University does not allow personal purchases to be delivered to the University. Such purchases should only be delivered to home addresses. 

 

Inco Terms:  FOB (Freight on Board) & Shipping Costs Options

• FOB Delivered (Destination): Ownership (title) of the goods transfers to the buyer only when the item is received by Loyola University; if there is any damage, the supplier will be responsible to file a claim with the freight hauler.
• FOB Shipping Point (Origin): The buyer takes ownership of the goods at the supplier's dock. If the item(s) is damaged when received, it is the buyer's/University’s responsibility to file a claim with the freight company.

There is no significant price impact between the two FOB choices. Shipping costs are separate and are negotiable. Shipping costs can either be “allowed” (supplier will assume the cost of shipping) or “prepaid and add” (costs of shipping will be added into the invoice). The preferred choice is “allowed”. If the package is received by the Mailroom or Receiving, they will inspect the shipment for evidence of damage. If none is detected, the item(s) will be delivered to the recipient or the designated location. If there is evidence of damage or a shortage, the Mailroom may refuse the shipment and/or notate the damage on the shipping papers. If the item is returned to the seller, the recipient is notified of the problem.

 

Imports/Exports: Import and export laws and shipping terms have become very complex in the past several years. If expertise is needed in obtaining import entrance through customs or exporting items to international locations, you may contact the Purchasing Manager.  

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The originating department is responsible to contact the supplier if concealed damage is discovered when a package is opened. Buyers can assist in this process. This applies to both deliveries received directly from the supplier or from the University Mailroom. The FOB selection that was made at time of purchase will determine responsibility. If the purchase was FOB Origin (see above), the Buyer will need to file a claim with the carrier within fifteen (15) days of the original receipt by Loyola University. If assistance is needed in filing the claim, contact Purchasing.

 

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If a purchase is made using a ProCard, the supplier should send a net zero dollar invoice directly to the Cardholder indicating the purchase was paid for using the Loyola ProCard. This invoice is for the cardholder’s information only, and is not payable by the University. If a purchase order is used, the supplier should send the final invoice to Loyola Accounts Payable, which will match the invoice with the purchase order and the system receipt before scheduling payment.

The Cardholder (for ProCard purchases) or Buyer (for PO purchases) is responsible to track and ensure that credit memos issued for returned items are received from the supplier in a timely manner, and that they are credited to the correct account. Contact the ProCard Administrator if you have difficulty resolving a credit.

 

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Loyola can be offered prompt payment discounts. Payment Terms are generally net thirty (30) days, meaning that the supplier can expect to be paid in full within thirty (30) days from the date of the supplier’s acceptable invoice. Terms of "2% 10, Net 30" mean that the supplier is offering a two percent (2%) discount off the total price of the invoice if the University pays the invoice within ten (10) days of the invoice date. If early payment is not made, then the terms revert to the current payment cycle employed by Loyola Accounts Payable. The Loyola Buyer should negotiate the best payment terms acceptable to each party.

 

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The following lists the responsibilities of each organization when making University purchases.

 

• Determines need
• Prepares specifications
• Contacts a Loyola Buyer at any point, if assistance is needed
• Selects supplier and rationalizes choice
• Negotiates appropriate terms and conditions when using non Pre-Qualified Suppliers
• Determines price reasonableness
• Completes Purchasing Checklist and Bid Summary Form, as required
• Obtains appropriate approvals
• Routes completed Purchase Requisition and supporting documentation to the Purchasing Department
• Receives merchandise and compares receipt with original order
• Advises Loyola Purchasing that the product or service has been received or completed – at Lakeside, the Loyola Buyer processes the receipt of the item in the Lawson system; at the Health Sciences Campus, the Receiving Department processes the receipt
• Negotiates settlements of disputes with non Pre-Qualified suppliers (assistance from Purchasing may be provided, if desired)
• When a ProCard is used, uses the PNC system to distribute the charges
• Provides Purchasing Department with appropriate documentation supporting transactions placed on purchase orders, as appropriate
• Provides invoices and packing slips to Accounts Payable, as necessary
• Reconciles ProCard monthly transactions and retains the receipt packet documentation/packing slips in the Department
• Provides a business justification for all ProCard transactions

Responsible for Award Administration

• Post Award Accounting Unit Set-Up
• Expenditure Processing
• Billing and Collection
• Accounting Unit Close-Out
• Financial Report/Audit

For more information relative to Post-Award Grant Administration Overview, please access the SPA Training Material.

• Receives invoice from supplier
• Verifies receipt
• Schedules invoice payments
• Pays supplier once all approvals are in order
• Pays the bank for all ProCard transactions

• Provides Product Management expertise
• Operates the Pre-Qualified Supplier process and program
• Coordinates purchases to achieve maximum value
• Coordinates purchasing efforts across departmental lines
• Ensures sound and ethical business practices are followed
• Encourages consideration of small, disadvantaged, women-owned, veteran-owned, disabled veteran-owned and HUBZone businesses
• Checks and coordinates University insurance requirements
• Standardizes University procurement forms, terms & condition, and contracts
• Provides Purchase Order approval on federally funded acquisitions with non Pre-Qualified Suppliers equal to or exceeding $5,000
• Minimizes University risk/liability
• Assists department personnel at any point in the purchasing process when related to Pre-Qualified Suppliers
• Maintains the following records:
  • Purchasing Checklist and Bid Summary forms
  • Purchase order files and supporting documentation
  • Original contracts and agreements
• Periodically audits buyers and suppliers for compliance with policies, procedures, contracts and agreements
• Provides Help Desk support for purchasing processes and procedures
• Provides various training programs related to University acquisitions

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Reporting supplier performance is extremely important as it relates to the provision of information, delivery schedules/promises, on-time performance of services, warranty support, accuracy in billing/invoicing, willingness to correct deficiencies, timely responses to inquiries and willingness to negotiate the University’s special needs.

 

In an effort to be fair to suppliers who wish to continue the pursuit of University business, written documentation of deficiencies are required to be provided to the Purchasing Department in order to potentially eliminate an existing University supplier from current and future bid lists and University business. Therefore, should any End User experience unsatisfactory performances by a supplier they are using, that inadequate performance should be documented on a Loyola Supplier Performance Survey Form and transmitted to the Purchasing Department.

 

If the problem(s) appears to be isolated, Purchasing will work with the supplier to correct the deficiencies. Should problems be numerous, consistent and not be corrected in a reasonable amount of time after notification to the supplier, Purchasing may make the decision to eliminate the supplier from bid lists and continued University business.

If a requester still wishes to use a supplier who has been suspended by Purchasing, then a written justification and request for exemption must be submitted to Purchasing prior to the issuance of the commitment.

 

 

Click here to continue to section 6.0 Restricted Purchases