Purchasing decisions are business decisions made on behalf of the University and therefore should be made with the utmost consideration for what is in the best interest of the University, including appropriate stewardship of University assets, integrity when acquiring goods and services, and accountability to funding sources and stakeholders. This ensures competitive purchasing requirements and a fair and ethical process across the University's purchasing process.
Employees who have purchasing responsibility must document a commitment to ethical purchasing practices by signing a Purchasing Code of Ethics for Department Employee Responsible for Purchasing. This would apply to any University of Minnesota employee who may indirectly influence a purchasing decision by establishing specifications, testing purchased products, evaluating contracted services or otherwise having any involvement in the purchasing or contracting process. Textbooks and other course materials authored by an employee of the University are exempt from this process. Faculty may also accept free samples of textbooks and related teaching materials. The signed Purchasing Code of Ethics for Department Employee Responsible for Purchasing should be completed annually and maintained in a central departmental digital file. Purchasing Services employees must document their commitment to ethical practices by signing a Purchasing Code of Ethics.
The Purchasing Code of Ethics refers to Minnesota Statute 15.43 ACCEPTANCE OF ADVANTAGE BY STATE EMPLOYEE; PENALTY. Subdivision 1.Financial interest of agents. No employee of the state or of the University of Minnesota in direct contact with suppliers or potential suppliers to the state or the university, or who may directly or indirectly influence a purchasing decision or contract by establishing specification, testing purchased products, evaluating contracted services, or otherwise has official involvement in the purchasing or contracting process may:
- have any financial interest or have any personal beneficial interest directly or indirectly in contracts or purchase orders for goods or services used by, or purchased for resale or furnished to a department or agency of the state or the university; or
- accept directly or indirectly from a person, firm, or corporation to which a contract or purchase order has been or may be, awarded, a rebate, gift, money, or anything of value other than items of nominal value. No such employee may further accept any promise, obligation or contract for future reward.
Competitive Purchasing Requirements
Departments must purchase goods and services as economically as possible according to the specified standards of quality and service while giving responsible suppliers fair consideration. Purchases that total between $10,000 and $49,999.99 require the Price and Supplier Justification Formto be completed and attached into the EFS requisition. With few exceptions, Purchasing Services will conduct a competitive process to select suppliers for single purchases $50,000 and over, AND for repetitive purchase requirements valued at $50,000 and over annually, AND for purchases $250,000 and over from UWide contract suppliers. Splitting purchases to avoid bidding is expressly prohibited. See Bid Requirements.
Departments with repetitive annual purchases from a supplier that exceed the bid threshold must submit a Requisition to Purchasing for competitive bidding.
Individual purchases and contracts valued at $1,000,000 and over must be presented to the Board of Regents for approval after the bid/proposal process has been completed and prior to executing the purchase or contract.
All departments (other than Duluth Campus and Morris Campus) are required to use University Printing Services for all official University business cards and stationery to ensure quality, consistency, and control, as directed by University Relations. Duluth Campus should use UMD Printing Services, and Morris Campus should use UMM Duplicating Services.
Potential outsourcing activity, which creates the potential for displacing University employees, will be escalated to Executive Officers and Human Resources. For other preapproved purchase situations, see Part C of the Department Request for Exception to Board of Regents Policy: Purchasing Goods and Services and Professional Services $50,000 + and Construction Professional Services $100,00+; and Construction Services $250,000+.
Exceptions to Bid Requirement
In some instances, an exception to Bid Requirements may be in the University’s best interests. If an exception is allowable, the department should submit a completed and signed Department Request for Exception to Board of Regents Policy: Purchasing Goods and Services and Professional Services $50,000+ form to Purchasing Services for review and approval before placing order or beginning work. See the Department Request for Exception to Board of Regents Policy: Purchasing Goods and Services and Professional Services $50,000+ form for examples of purchases that meet the Exception requirements and the signature thresholds required.
Out-of-Pocket Purchase Provision
Occasionally circumstances may make it impossible to use one of the approved purchasing processes (U Market, PCard, purchase order, etc.). Employees should attempt to secure preapproval from their approving authority to make an out-of-pocket purchase. Employees will be reimbursed for approved out-of-pocket purchases if the purchase meets all other compliance and policy requirements for reasonableness. See Administrative Procedure: Purchasing Goods and Services.
Purchasing during a University Emergency
In the case of a declared University emergency, the Director of Purchasing Services may suspend normal purchasing policies and procedures, including, but not limited to competitive bidding and establish appropriate temporary procedures in order to respond to the emergency and to ensure the continuity of the University’s business. The temporary purchasing procedures may apply to purchases directly or indirectly related to or affected by the emergency. These temporary purchasing procedures will apply until such time as the Director determines that normal purchasing procedures can be resumed.
Purchasing from Targeted Group Businesses
The University strongly supports and encourages purchasing from Targeted Group Businesses as a method of stimulating economic growth in the communities served by the University. Economic growth in the communities directly affects University funding and enrollment. Employees will actively seek to increase the volume of contract awards to such businesses by incorporating goals for businesses owned by minorities, women, and people with disabilities into their overall business plan.
Separation of Duties
Units must give careful consideration to the assignment of duties to staff in regards to procurement transactions so that the same employee is not allowed to select the supplier, place an order, receive the goods/services, approve the transactions, and process the associated voucher and payments.
University libraries may purchase materials in various formats, including micro formats and electronic formats that are required for instructional or research purposes and/or become part of the library collection. University Bookstores may purchase resale items. The Office of General Counsel may purchase legal services.
The University’s Energy Management Department and the Office of Investment and Banking manage the energy procurement for the University. System campuses and departments are responsible to work with Energy Management to assure they are in alignment with their buying and energy management principles.
Purchases from Fairview University Hospital that are related to research projects will not require bidding for any dollar amount.
Purchases of goods, services and professional services between the University of Minnesota and University of Minnesota Physicians will not require review and approval from Purchasing or from the Board of Regents, but will instead be consistent with the Master Agreement for the Purchase of Goods and Services Between the University of Minnesota and University of Minnesota Physicians. The Master Agreement does not apply to lease of real property from one party to the other, or to sponsored research activities and related subcontractor relationships.
Reason for Policy
This policy will align with University procedure and processes and with State laws and statutes, Federal laws and guidelines, University policies, and Board of Regents Policy: Purchasing. This policy ensures appropriate stewardship of University assets, integrity when acquiring goods and services, and accountability to funding sources should be exercised when purchases are being made on behalf of the University of Minnesota.