Rice University Research Policy No. 814

 

RICE UNIVERSITY PURCHASING POLICY

I. Overview

This policy framework is intended to provide for the procurement of goods and services necessary to support the mission, goals and objectives of Rice University, while ensuring that University resources are protected and maximized and that requirements of the sponsoring agency are met for sponsored research procurements.  The following are the basic principles of these purchasing policies:

• Support the University’s primary goal of teaching and research in the most effective manner,
• Procure quality goods and services at the best price and delivery terms that will meet the needs of the purchaser,
• Allow purchases and payments to be made and approved by those with direct knowledge of, and responsibility for, the transaction,
• Provide for free and open access wherever reasonable and feasible, and
• Allow for sole source purchases where necessary.

Please refer to the Rice Purchasing and Payment Manual for detailed procedures.

II.  General Information

Rice does not have a centralized purchasing and receiving operation.  This structure means that each individual unit, that procures goods or services in order to conduct its activities, must ensure that basic control procedures are observed. The controls mandated by the University are outlined in this policy statement.  Detailed implementation guidelines are provided in the Rice Purchasing and Payment Manual.  All contracts or purchase orders for the purchase of goods or services must also comply with the University’s Signature and Approval Authority for Contracts Policy No. 810. 

When the University negotiates favorable terms and conditions for the purchase of goods and services, it will make this information available to the campus.
Rice University is exempt from state sales tax in Texas.  Tax Exempt Certificates should be used only when the purchase is being made directly for the University. Rice University’s exemption does not extend to student groups or organizations without appropriate authorization from the director of student activities nor does it extend to personal purchases.

III. Requisitioning and Purchasing

A. Required Approvals for Purchases

Purchases must be approved by a Rice University employee who has direct knowledge of, and responsibility for, the transaction. See the Signature and Approval Authority for Contracts Policy No. 810.  Each department chair/head, dean and division head has responsibility for defining and delegating approval authority for expenditure of funds, subject to the limitation of their authority and approved budgets. Approval authority is defined and delegated through completion of a University signature authorization form available in Payment Solutions. Delegation of approval or signature authority does not relieve the department chair/head of responsibility for ensuring compliance with University purchasing policies and procedures or any other regulatory constraints and/or requirements.  Purchases must not be approved unless adequate funds are available within the identified funding source.

B. Conflict of Interest

Any actual or perceived conflict of interest by either the person initiating the request for goods or services or by an individual approving the request must be disclosed to the department chair/head or dean/division head prior to a commitment to purchase goods or services. This includes, but is not limited to, any circumstances which may provide financial gain to the Rice employee or a member of his or her family or household or to a business partner. Refer to the Conflicts of Interest Related to the Purchasing of Supplies, Services, and Equipment Policy (No. 838) and the Outside Activities of Faculty and Faculty Fellows Policy (No. 216) for detailed requirements.

Each authorized signer should review the Conflicts of Interest Related to the Purchasing of Supplies, Services and, Equipment Policy (No. 838) at least annually and should ensure that each procurement transaction that he/she approves is in compliance with this policy.

C. Small Business, Minority and Women Vendors

The University is committed to promoting opportunities for small business, minority and women vendors to participate in the university’s purchasing of goods and services.

Efforts should be made to:

Ensure that small business, minority-owned firms, and women’s business enterprises are used to the fullest extent practicable,

Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women’s business enterprises,

Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women’s business enterprises,

Encourage contracting with consortiums of small businesses, minority-owned firms and women’s business enterprises when a contract is too large for one of these firms to handle individually, and

Use the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women’s business enterprises.

Some sponsored research contracts/grants may stipulate specific purchasing requirements regarding small business, minority and women vendors. Contact the Office of Sponsored Research or Research Accounting for specific contract/grant requirements.

 D.  Bidding

University purchasers should solicit bids for goods and services whenever it is to the benefit of the University to do so. The bidding process is used to ensure that Rice receives quality goods and services at the best price and delivery terms possible. A minimum of three documented bids or justification for sole sourcing is required for all purchases totaling $25,000 or more. Specific sponsored contracts/grants may require bids or justification for sole sourcing for lesser purchase amounts. Contact the Office of Sponsored Research or the Research Accounting Office for specific requirements.

E. Equipment Leasing

In order to promote stewardship of the University’s resources and to protect the interests of the University’s funding sources, University purchasers are responsible for obtaining information necessary to evaluate leasing and buying options and determining the most cost beneficial method for procuring equipment. A decision to lease should be made only when it is determined that leasing would ensure the most economical and practical use of University and/or sponsored funds.

Leases are legal contracts and should be entered into only after serious consideration by the individual department chair/head. The Office of the General Counsel is available to review leases as requested by the department and must be consulted for any leases requiring legal review under the Signature and Approval Authority for Contracts Policy (No. 810). For details regarding whether special accounting rules may apply, please contact the Controller’s Office. For further details regarding leases, please refer to the Payment Solutions Purchasing and Payment Manual.

Specific sponsored contracts/grants may have additional restrictions in regards to equipment leasing. Contact the Office of Sponsored Research or the Research Accounting Office for specific requirements.

F. Purchasing Card

For purchases of less than $5,000, the purchasing card is the preferred method of procurement. The purchasing card program is designed to streamline the ordering of purchases of less than $5,000 in total cost. Refer to the Purchasing Card Manual, available from the Payment Solutions Department, for further details.

G. Purchase Orders

A Rice University purchase order is required for all purchases $5,000 and above except those noted below. A purchase order should be completed and approved prior to a purchasing commitment being made. For purchases less than $5,000, a purchase order is not necessary, and a purchasing card should be used. Exceptions to the purchase order requirements must be approved by the vice president for administration. In those situations, a written communication must be submitted to the vendor regarding the purchase terms and conditions.

Invoices for maintenance agreements and professional services do not require a purchase order provided a prior written agreement or contract has been negotiated and approved. In some cases, departments are required to work with the Office of the General Counsel to review written agreements and contracts prior to these documents being approved. When an agreement or contract is executed by an authorized signer, the purchase order is necessary to provide approved funding information and does not need to be signed. Please refer to the Signature and Approval Authority for Contracts Policy (No. 810).  A professional services agreement will suffice for professional services paid to an individual (rather than a firm).

Examples of professional services include:

• Accountants
• Attorneys
• Architects
• Consultants
• Engineers
• Guest lecturers/speakers

Note:  No University department may retain or use outside legal counsel without the approval of the Office of the General Counsel.

IV. Receiving

For all purchases $5,000 or more, acknowledgement of receipt of goods and services must be performed by a Rice employee other than the employee who authorized the purchase of goods.  For all purchases less than $5,000, it is desirable that acknowledgement of receipt of goods and services be performed by a Rice employee other than the employee who authorized the purchase.

V.  Payment

A.  Purchasing Card

For purchases of less than $5,000, the purchasing card is the preferred method of payment. Other forms of payment, including invoice billing, check requests and petty cash transactions should be used only when payment via the purchasing card is not accepted by the vendor. Refer to the Purchasing Card Manual, available from the Payment Solutions Department, for further details.

B.   Invoices

An invoice for a single purchase totaling less than $5,000 requires only coding and an authorized signature for payment.

C.   Purchase Orders

When Payment Solutions receives an active purchase order AND the departmental receiving copy has also been received within the Payment Solutions Department, the invoice will be paid.

Invoice totals different from the amount of the purchase order will be paid if the total invoice difference is less than 10 percent of the total purchase order. In all other situations, the invoice will be referred to the appropriate department personnel for resolution and payment authorization.

D.   Check Requests

Check request forms are used to authorize payment to vendors who do not prepare invoices, for expense reimbursement to Rice employees/students, and for payment of honoraria to non-Rice employees and students. (Honoraria paid to non-U.S. residents may be subject to withholding in accordance with Internal Revenue Service (IRS) regulations for citizens of the applicable country.)

Check requests should be used ONLY when no other payment process will suffice.

Check requests used to reimburse expenses cannot be approved by the individual seeking reimbursement. Approval for reimbursement must be approved by:

• The principal investigator (PI), or designee, if research funds are being charged, AND
• The appropriate person as noted in the chart below. Note: The approver may never report to the individual for whom the expense is incurred.

Expense incurred on behalf of:	Approval by:
Department faculty/staff including principal investigators	Department Chair/Head or designee*
Department Chair/Head or Director	Dean or division head or designee*
Deans and administrators reporting to the Provost	Provost or designee*
Provost, Vice Presidents and administrators reporting to the President	President or designee*
Vice President for Investments and Treasurer	Controller
President’s Office	Vice President for Investments and Treasurer or designee

 
 *as defined on the Rice University signature authorization form

E. Petty Cash

Purchases of $100 or less that cannot be made with a University purchasing card should be made or reimbursed from petty cash.

VI. Vendors

A. Approved Vendors

The policy of Rice University is to pay appropriately authorized vendor invoices within the terms specified on the invoice and to take cash discounts as allowable by the vendor. Refer to the Payment Solutions Purchasing and Payment Manual for details regarding the setup of new vendors. New vendors must supply an IRS Form W-9 to Rice before the payment authorization process can be completed. The W-9 form can be submitted with the payment request. The W-9 form enables Rice University to comply with IRS regulations by providing Form 1099 to each noncorporate entity (sole proprietor, partnerships, etc.) for reportable payments made in the calendar year to these entities.

B. Preferred Vendors

Preferred vendors are those with whom the University has negotiated special terms and conditions beneficial to the Rice community. As preferred vendors are identified, University purchasers are encouraged to work with these vendors.

VII. Specific Procurement Transactions

A. Equipment

All equipment items in the custody of Rice University, regardless of how acquired, must be accounted for at all times. Please refer to the Property Control Policy (No. 809) for an equipment definition and further requirements. The overall University property accountability and controls are administered by the property accountant in the Controller’s Office. Department chairs/heads and administrative officials of the University are responsible for the accountability and control of equipment within their department. Refer to the Research Equipment Policy (No. 331) and Personal Use of University Property Applies to: Faculty, Staff and Students Policy (No. 831) for specific definitions and control requirements.

B. Research Procurement

Research equipment may be purchased only when the equipment is essential to a research project and is not already reasonably available and accessible elsewhere on campus.

Purchases from research funds for supplies, equipment and services must be in accordance with the terms and conditions of the award. For specific requirements, see the Federal Acquisition Regulations, OMB Circular A-21, OMB Circular A-110, OMB Circular A-133, and the appropriate agency and individual contract/grant terms.

Contact Research Accounting for guidelines and additional information on definitions and requirements.

C. Hazardous Materials, Select Agents and Controlled Substances

Hazardous Materials, Select Agents and Controlled Substances may only be ordered by individuals who have completed the Environmental Health and Safety training course.  Select Agents and Controlled Substances may only be ordered by individuals who have the authorization by appropriate federal and state registration and approval from the director of environmental health and safety to do so.  The use and purchase of Select Agents and Controlled Substances must be authorized by the department chair and director of environmental health and safety or dean/vp.  Select agents cannot be ordered, purchased or used without the prior written approval of the vice provost for research and graduate studies.  Quantities of materials purchased should not exceed the amount which will be used in the immediate future in order to minimize the cost and risks of storage and disposal.  For further details, contact the Environmental Health and Safety Department.

D. Research Animals

Research Mammalians may only be purchased through the Animal Resource Facility.  All mammals purchased will be delivered to the facility and not to the individual investigator or laboratory.  Invertebrate or cold blooded animals may be purchased directly by the investigator.  For more information contact the Animal Resource Facility Manager.

______________________
David W. Leebron, President

Policy No. 814

April 18, 2007

Issued:  May 20, 1993
Revised:  February 15, 2000
Revised May 10, 2000
Revised:  February 12, 2003