3201 General Purchasing
This policy addresses the ethical practices and procurement requirements associated with purchasing methods, supplier selection, comparative pricing, approval of purchasing transactions, signing authority, receipt of goods and services acknowledgment, and sales tax issues.
Yale University personnel must purchase goods and services in accordance with this policy and applicable federal and state laws. Purchases with University funds must be supported by a valid business reason. Furthermore, goods and services purchased with sponsored funds must comply with the sponsor’s terms and conditions. In addition, if procuring goods and services on a federal prime or federal pass-through award, the University must avoid the acquisition of unnecessary or duplicative items.
University personnel should purchase goods and services using the University Preferred Suppliers in Yale’s E-Procurement Solution in support of key relationships, simplification, and better pricing (University Preferred Suppliers are identified in the University Buying Guide). Purchase Requisitions should be created prior to the receipt of goods or services.
Certificate of Insurance
Proof of insurance provided by a supplier.
The process of procurement through which the purchaser compares multiple pricing sources for a good or service and evaluates them to determine which is most advantageous. Comparative Pricing carries different requirements for procurement, depending upon the dollar value and source of funding (see Section 3201.4, below, for further detail).
One of several methods of Comparative Pricing. It is the process of procurement by publicly soliciting requests for bids wherein Yale identifies all evaluation factors and their importance. Yale considers all proposals, conducts a technical evaluation, and awards a procurement contract to a supplier whose proposal is most advantageous. Competitive Bidding is required on all purchases greater than $250,000 charged to federal awards and federal pass-throughs.
A supplier that meets the standards for small, disadvantaged, minority, and/or women-owned suppliers, as defined by the federal Small Business Administration.
Environmentally Preferable Purchasing (“EPP”)
The purchases of products and services that have a reduced effect on human health and the environment when compared with competing products that serve the same purpose. This comparison should consider raw materials acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance, or disposal of the product.
A purchase of goods or services less than $10,000.
Procurement Conflict of Interest (“PCOI”)
When a Yale employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a supplier considered for a Yale purchasing transaction.
An offer made by the University to a Supplier to purchase goods and/or services pursuant to certain terms and conditions. When the Supplier accepts the Purchase Order, a legally binding document is formed.
A department-generated internal source document required to initiate a Purchase Order. Purchase requisitions include a description of Yale requirements, valid charging instructions, delivery instructions, and the required departmental approval. A Purchase Order is automatically generated by the Yale E-Procurement Solution when the Purchase Requisition process is completed.
Purchasing Card (“PCard”)
A University-liability charge card issued by Yale to qualified employees for payment of business-related purchases in accordance with this policy and Policy 3215 Yale Purchasing Card.
Simplified Acquisition Threshold
This acquisition threshold is set by the federal government and applies to purchases greater than $250,000.
Small Purchase Threshold
This acquisition threshold is set by the federal government and applies to purchases greater than or equal to $10,000 and less than or equal to $250,000.
The concept of selecting a Supplier for an agreement/engagement without a competitive process, based on one or more of the following:
- a justification that a good or service is unique or proprietary (e.g., specialized and unique laboratory equipment, specialized software, patented materials or techniques);
- if a supplier has an exclusive agreement or territorial limitation;
- the federal awarding agency or pass-through entity expressly authorized noncompetitive proposals in response to Yale’s written request;
- the requirement will not meet the criteria for competition; or
- public exigency or public emergency (i.e., imminent threat to persons or property) for the requirement will not permit a delay resulting from competitive solicitation.
A person or organization that provides goods or services to the University. The term supplier is used interchangeably with the term vendor.
University Preferred Supplier
A Supplier with whom the Procurement Department has established a special arrangement to maximize the purchasing power of the University and reduce the overall cost of goods and services by establishing a University-wide master contract. These arrangements offer numerous features and provide an overall best value for the University. Departments utilizing contracts with Preferred Suppliers, as long as the contract is still in effect, are exempt from participating in the competitive bidding process.
A person or organization that provides goods or services to the University. The term vendor is used interchangeably with the term supplier.
Yale’s E-Procurement Solution
The Workday feature called Create Requisition is a web-based tool that supports the University’s procurement functionality when utilizing purchase requisitions for procuring goods and services. Catalogs and contract pricing are available via the Connect to Supplier Website option.
Yale’s Expense Management Solution
The processing, creation, and submission of expense reports for the following expenditures: travel and business-related expenses and miscellaneous small dollar purchases < $2,000 incurred on a PCard or with the use of personal funds (out-of-pocket expenses) for business-related purchases. The expense management solution supports requesting and clearing of cash advances for travel and business-related expenses, as well as study subject advances.
Conflict of Interest
A. Purchases related to federal awards or federal pass-through subawards
All University employees who participate in the selection, award, or administration of a purchasing transaction (e.g., Purchase Orders, Purchasing Agreements, Purchasing Contracts, PCard Transactions or others) related to a federal award or federal pass-through sub-award must be free from real or apparent Purchasing Conflicts of Interest (as defined in the Definitions above). If such a conflict exists, the purchase of goods or services from the supplier directly or indirectly (e.g., buying from a supplier through an intermediary company) is prohibited. The Procurement Department may, at its direction, determine that there is not a Purchasing Conflict of Interest if the financial interest is not substantial.
B. Purchases from all other non-federal University funds
For purchases using non-federal University funds, including but not limited to, gifts, endowment, and non-federal sponsored funds, no Yale employee, officer or agent who has a Purchasing Conflict of Interest (as defined in the Definitions above) may be involved in the selection, award, or administration of a purchasing transaction (e.g., Purchase Orders, Purchasing Agreements, Purchasing Contracts, PCard Transactions or others) without the approval of the relevant chair, department head, or dean, and the approval of the Chief Procurement Officer, or their designee. Any such approval must be obtained prior to placing the order or entering any contractual arrangement with the proposed supplier.
To protect a supplier’s right to confidentiality and the University’s interests, competing suppliers must not be told the prices, terms, or conditions quoted by other suppliers. All University employees must respect confidentiality in all procurement activities.
Acceptance of Supplier Gifts, Business Meals, or Other Forms of Gratuity
University employees and members of their immediate family may not accept personal gifts, entertainment, or other form of gratuity from any supplier by any means, directly or indirectly, at any time of the year. This includes, but is not limited to, items of value, quasi-social invitations, credits for supplier promotions, etc.
A business meal may not be paid for by a supplier except when individuals:
- authorized to issue purchase orders visit the supplier’s business as part of a review of the supplier’s capability to service the University or to review a new product or new facilities; or
- perceive that continuing discussions with a supplier through mealtime has merit, they may continue the meeting at the expense of the supplier or the expense of the authorized employee. Repetitive mealtime meetings are not appropriate and should be discouraged.
Please refer to Policy 2201 Gifts from External Parties to Employees for more information on acceptance of gifts.
Separation of Duties
Departments must separate the duties of purchasing, receiving, and authorizing payment for goods and services by distributing these duties among two or more people. If staff limitations require one person to be responsible for these functions, a supervisor must accept responsibility for monitoring and verifying the transactions.
The University’s two preferred and recommended methods to obtain goods and services to conduct University business are the issuance of electronic purchase requisitions and using PCards. Refer to Procedure 3201 PR.01 Purchase Order Process and the University Buying Guide and Policy 3215 Yale Purchasing Card regarding the appropriate purchasing methods.
Electronic purchase requisitions are required for procuring most common goods and services. See the University Buying Guide for a list of commodities and the recommended purchasing methods.
Purchase Requisitions are expected to be created prior to the commencement of work and the receipt of goods or services. In the rare instance where a Purchase Requisition has not been created prior to the commencement of work and/or the receipt of goods or services, members of the Yale community should seek assistance from the Procurement Department. The Procurement Department may, at its discretion, determine that a Purchase Order is required or that additional steps need to be taken to memorialize the transaction and ensure compliance.
Yale Purchasing Card (PCard)
Individuals authorized to use a Yale Purchasing Card (PCard) may use the card to pay for travel and entertainment expenses in accordance with their transaction limit and authorization level. In limited situations, with valid business reasons, individuals authorized to use a PCard may use the card to pay for miscellaneous, small dollar business-related goods and services (<$2,000). PCard purchases of miscellaneous, business-related goods and services under $2,000 of a unique or complex nature (e.g., eBay purchases, used computers or equipment, furniture, etc.) require an exception in accordance with the Special Situations/Exceptions section.
All PCard transactions must be processed and approved in a timely manner using Yale’s expense management solution. Refer to Procedure 3215 PR.01 Yale Purchasing Card Procedure for more details.
In very limited circumstances, business-related small dollar purchases may be made using personal funds. Reimbursement for purchases of this type should be done via Yale’s expense management system.
The University requires and encourages competition among suppliers in providing goods and services to the University. Competition assures a mix of quality, service, and price that matches the stated needs of the University. Accordingly, those involved in supplier selection have the responsibility to search broadly and completely for viable suppliers. The Procurement Department is available to assist in the supplier selection process.
Exclusions from Comparative Pricing
While the overall policy must be followed, the specific requirement for Comparative Pricing or Sole Source documentation is waived for the following categories of goods and services:
- Lecturers and guest speakers;
- Portrait artists, musical professionals, theatrical artists involved in the production or performance of a live event;
- Publishing fees;
- Museum artifacts and art collections, rare books, and other rare collection materials;
- Professional dues and memberships; and
- Payments to government agencies for permits, applications, licenses, and fees; engagement of state/municipal law enforcement for security services.
University Preferred Suppliers (listed in the University Buying Guide) have already undergone a competitive bidding process conducted by the Procurement Department. Therefore, it is unnecessary for a department to initiate a competitive bidding process for these suppliers.
All necessary steps should be taken to use Diversity Suppliers when possible. These are suppliers who can certify they meet the standards for small, disadvantaged, minority, and/or women-owned suppliers set by the federal Small Business Administration.
Please refer to the Yale Sustainability website for the latest guidance on the University’s efforts to monitor and reduce the University’s environmental impact. This site identifies products with reduced environmental impacts. Please review the guidance provided before making purchasing decisions and supplier selections and consider the Sustainable Procurement Standards guidelines for buying sustainable products or services.
University Service Providers
Yale’s University Service Providers (“USPs”) furnish a substantial number of goods and services to the University. For information on procurement through USPs, refer to Policy 1410 University Service Providers.
Suspended or Debarred Suppliers
The Federal Government suspends or debars contractors to protect its interests. Yale shall not enter into a procurement contract with a supplier that is debarred, suspended, or proposed for debarment by any federal executive agency, unless there is a legally allowable reason to do so as determined by the Office of General Counsel.
Micro-Purchases (< $10,000)
Micro-Purchases may be made without soliciting competitive quotes, so long as the requisitioner has evaluated the price and determined it to be reasonable. To the extent practicable, Yale distributes micro-purchases equitably among qualified suppliers.
Small Purchase Threshold (≥ $10,000 and ≤ $250,000)
In order to purchase goods or services from a supplier that is not a University Preferred Supplier (listed in the University Buying Guide) that exceeds the Small Purchase Threshold but does not exceed $250,000, price or rate quotations must be obtained from an adequate number of qualified sources. To accomplish this, the University requires that at least one of the following actions occur:
- Submission of 2 or more Quotes: Quote documentation can include a supplier price list, an Internet search of supplier websites to determine market and published prices, or prices provided in writing directly from the supplier. Use Form 3201 FR.05 Pricing Documentation (Comparative Pricing & Competitive Bidding);
- Comparison of recent (within 12 months) quotations for the same service/product. Use Form 3201 FR.05 Pricing Documentation (Comparative Pricing & Competitive Bidding);
- Conducting a competitive bidding process: 2 or more bids/quotes are compared for reasonableness and responsiveness to the request for quote/bid. Use Form 3201 FR.05 Pricing Documentation (Comparative Pricing & Competitive Bidding); or
- Sole source justification: Document justification for sole source purchases. Use Form 3201 FR.06 Sole Source Documentation.
Purchases > $250,000 NOT on Federal and Federal Pass-through Awards
In order to purchase goods or services not on federal or federal pass-through awards from a supplier that is not a University Preferred Supplier (listed in the University Buying Guide) that exceeds $250,000, price or rate quotations must be obtained from an adequate number of qualified sources. To accomplish this, the University requires that at least one of the following actions occur:
- Submission of 2 or more (3 preferred) Quotes: Quote documentation to be provided in writing directly from the supplier. Use Form 3201 FR.05 Pricing Documentation (Comparative Pricing & Competitive Bidding);
- Conducting a competitive bidding process: 2 or more (3 preferred) bids/quotes are compared for reasonableness and responsiveness to the request for quote/bid. Use Form 3201 FR.05 Pricing Documentation (Comparative Pricing & Competitive Bidding); or
- Sole source justification: Document justification for sole source purchases. Use Form 3201 FR.06 Sole Source Documentation.
Purchases > $250,000 on Federal and Federal Pass-through Awards
For purchases greater than $250,000 on federal and federal pass-through awards, the Requestor must make an independent estimate before receiving bids or proposals. To do so, use Form 3201 FR.04 Independent Cost Estimate.
Procurement shall perform one of the following actions:
- Conducting a competitive bidding process: 2 or more (3 preferred) bids/quotes are compared for reasonableness and responsiveness to the published request for quote/bid. Use Form 3201 FR.05 Pricing Documentation (Comparative Pricing & Competitive Bidding); or
- Sole source justification: Document justification for sole source purchases. Use Form 3201 FR.06 Sole Source Documentation.
As a recipient of Federal funding, Yale must perform a price or cost analysis in connection with every procurement action in excess of $250,000 including contract modifications charging a federal or federal pass-through award. The purpose of either analysis is to ensure the price for the goods or services is fair and reasonable and to avoid charging the Federal Government excessive costs for major procurement contracts. The method and degree of analysis may vary depending on the facts surrounding the particular procurement situation.
Prohibition on Transaction Splitting
It is prohibited to “split” a transaction into multiple transactions to purposely evade any requirement of this or any other University policy. For example, if a purchase of goods and/or services from a Supplier is anticipated to equal or exceed $10,000, it is not permitted to split the goods and/or services purchase into multiple separate transactions of less than $10,000 in order to purposely evade approval thresholds or the requirements associated with the Small Purchase Threshold.
Note: If a transaction is expected to be less than a certain dollar threshold (e.g., $10,000) and later equals or exceeds that dollar threshold (including change orders to POs), the unit making the purchase must fulfill any obligations associated with the new total dollar threshold (e.g., sole source/comparative pricing).
Deposits and Prepayments
University personnel should not pay in advance for goods or services, except in limited circumstances. For example, partial advance payments or deposits may be appropriate where the Supplier needs to incur costs (e.g., for manufacturing or procuring goods) prior to beginning work. All deposits, down payments, and prepayments equal to or greater than $25,000 must be approved by the Director of Strategic Sourcing & Category Management.
Policy 3220 Purchase of Restricted Items outlines specific requirements and guidelines for the purchase of restricted goods and services and must be followed for purchases.
Restricted items include, but are not limited to:
- Hazardous Materials;
- Safety-Critical Equipment;
- Radioactive Materials;
- Controlled Substances in Research;
- Non-Taxable Ethyl Alcohol; and
- Covered Telecommunications Equipment or Services
Purchases for certain specialized services fall under the purview of particular Yale offices and follow different requirements and processes than otherwise described in this policy.
A. Construction, Renovation, and Alteration Projects
Only the Facilities department (Central or School of Medicine) is authorized to procure and manage architectural, general contracting, engineering, and any other services for construction, renovation, maintenance, and alteration projects. Departments and schools must work with the Facilities department directly for these types of services.
B. Legal Services
All legal services provided by external attorneys must be arranged through the Office of General Counsel (OGC). Departments may not obtain legal services directly from external attorneys without prior written approval from OGC.
C. External Public Accountants and Auditors
The Vice President for Finance and Chief Financial Officer and the Corporation Audit Committee are responsible for retaining external public accountants who perform audits of the University or its specific subdivisions. All other services performed by accounting firms should go through the regular procurement process.
D. Investment Management Services
Yale University Investment Office is responsible for managing investment management services. Investment management services (expenses uniquely and specifically related to investment asset management) may include but are not limited to: in-depth performance and risk analytics; specialized IT support and software for trading systems and platforms; confidential printing services; market and business studies; and research management).
The Office of Risk Management is the authorized office for procuring and managing insurance services.
F. Real Estate
Real Estate purchases and leases are managed by University Properties and according to Policy 1800 Real Estate Leases.
Purchases of certain goods or services require an authorization or additional approvals.
A. Environmental Health and Safety
Purchases involving the provision of environmental, occupational, or other health and safety services to the University must be approved by the Office of Environmental Health and Safety, as specified in Policy 3220 Purchase of Restricted Items.
B. Consulting Agreements Involving Non-U.S. Payees
For Service Contracts involving non-U.S. citizens, non-U.S. lawful permanent residents, or entities organized and/or located outside the U.S., it is the responsibility of the Requestor and/or the relevant Lead Administrator to ensure that the Service Contract reflects all guidance and requirements of the International Tax Office.
C. University Intellectual Property
Purchase Contracts that provide for the license or transfer of intellectual property rights that may be owned by the University must be approved by the Office of Cooperative Research.
D. Office of Sponsored Projects
The Office of Sponsored Projects must review and approve Services Agreements if they are funded by a sponsored award and any of the following conditions are met:
- The Service Provider is responsible for the design, conduct or reporting of the research;
- Human and/or animal subjects are involved; or
- The agreement exceeds $10,000 (including all anticipated amendments).
E. Use of Yale’s Name
Yale does not allow Suppliers to use Yale’s name, logo, trademarks, or service marks in any manner that appears to promote, endorse, sponsor, or otherwise approve of Suppliers or any of their goods and services, regardless of the status of the Supplier’s relationship with Yale. Purchases that provide for or may result in a Supplier’s use of Yale’s name, logo, trademarks, or service marks must be approved by the Department of Marketing and Trademark Licensing.
Guidance and requirements on the Use of Yale’s Name can be found at Yale Trademark Licensing.
Departments are responsible for verifying the actual receipt of goods and services. A receipt of goods acknowledgement confirms that purchased goods and services were received/provided in the manner and quantity ordered. Prior to authorizing payment, the lead administrator or designee is responsible for verifying and acknowledging the receipt of goods/service, when required as provided in the chart below.
Receipt of Goods
Packing slip, e-mail, written record of direct knowledge/observation
Packing slip, verbal confirmation, e-mail, direct knowledge/observation (Note: not required for payments resulting from invoice/PO match)
Packing slip, verbal confirmation, e-mail, direct knowledge/observation
Invoice approval (Note: not required for payments resulting from invoice/PO match)
Submission and approval of an Expense Report
Submission and approval of an Expense Report
* Preferred method of documentation storage is electronic, but may be in hard copy, as necessary.
Yale University qualifies for sales tax exemptions in many states when purchasing goods or services, including meals and lodging. To obtain an exemption, the payment must be made directly to the Supplier by the University. If out-of-pocket payments are used, the University will reimburse for sales tax paid. For guidance on the available exemptions, refer to the University Tax Department website.
Only Yale officers and employees assigned or delegated signature authority by the Yale Corporation can sign contracts, agreements, or other official documents to purchase goods or services on behalf of the University.
Exceptions to this policy must be approved by the Controller’s Office, in consultation with the Provost’s Office, General Counsel, or an Officer of the Corporation, as appropriate.
Violation of Policy
This University policy is intended to maximize the University’s buying power, streamline business practices and reduce potential institutional risks associated with contracting and other procurement related activities.
If a Yale University employee believes that his/her actions have, or may have, violated University policy, he/she is advised to disclose the policy violation to his/her supervisor at the earliest possible opportunity. The supervisor is then further advised to consult with either the Procurement Department or Controller’s Office to review and address the issue.
If a Yale University employee suspects that a violation of policy has been committed by another employee or a Yale University supplier, s/he is advised to promptly and confidentially report the concern to the Chief Procurement Officer or the Controller’s Office. The suspecting employee is advised NOT to confront the individual concerned directly. By following this process, confidentiality will be maintained and the matter will be investigated promptly and appropriately.
Violation of University policies may carry disciplinary consequences, up to and including dismissal.
Roles and Responsibilities
- Approves the purchase of goods or services.
- Through the approval process, the approver acknowledges that the goods or services are in accordance with University policies and procedures, sponsor’s terms and conditions, and are charged to the appropriate account.
- Verifies, through inquiries or direct knowledge, that the goods were received or the services were performed.
Buyer/Strategic Sourcing Manager
- Performs supplier analyses, obtains bids and quotes, conducts negotiations, reviews and signs purchase contracts and approves purchase orders based on internal approval limits and signature authority delegation.
Chief Procurement Officer
- Oversees all activities across Procurement including Sourcing, Buying, Accounts Payable and Procurement Operations.
- Approves purchase orders and signs purchase contracts based on internal approval limits and signature authority delegation.
Director of Strategic Sourcing and Category Management
- Oversees daily operations within Purchasing Services.
- Approves purchase orders and requisitions, and signs purchase contracts based on internal approval limits and signature authority delegation.
- Prepares or places orders for goods and services based on direction from the Requestor.
Lead Administrators (or designee)
- May initiate, approve, and delegate purchasing transactions, on behalf of their department, for the dollar limits defined in the Controller’s Office Fact Sheet.
- Assures that receipt verification and acknowledgement of goods and services occurs and is documented within his/her department, as set forth in Section 3201.8, above.
- For the unit(s)/departments for which they have oversight, responsible for implementing and maintaining effective internal controls and procedures over purchasing transactions and records, in accordance with this policy.
Office of Sponsored Projects
- Provides guidance and approvals regarding purchases related to sponsored awards.
Office of Risk Management
- Provides guidance regarding insurance requirements for suppliers.
Principal Investigator (“PI”)
- Initiates procurement transactions in support of and benefitting sponsored awards. The PI may delegate this responsibility to a qualified individual.
- Provides purchasing expertise and support to the Yale community, including negotiating strategic and other contracts on behalf of the University, reviewing required documentation, issuing authorized purchasing orders, and paying suppliers.
- Documents the need for goods or services and determines that the costs are reasonable and allowable.
- If the intended purchase is supported with federal prime or pass-through funds, the Requestor is making a determination of benefit to the intended sponsored award.
Supplier Compliance Unit
- Establishes and maintains the supplier database.