3201 General Purchasing

Responsible Official: 
Chief Procurement Officer
Responsible Office: 
Procurement
Effective Date: 
July 1, 1998
Revision Date: 
July 29, 2019

Policy Sections

3201.1 Ethical Practices

3201.2 Purchasing Methods

3201.3 Competition and Supplier Selection

3201.4 Pricing Justification

3201.5 Issuance and Authorization of Purchasing Transactions

3201.6 Secondary Authorization

3201.7 Receipt of Goods Acknowledgment

3201.8 Tax Issues

3201.9 Contract Signing Authority

Scope

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.    

It should be noted that, when procuring or incurring the following types of expenditures, refer to Table 2 in Section 3201.5 for assistance: investment management, legal, tax, accounting, auditing, architectural, engineering, construction, insurance, employee travel, employee benefits, real estate, and licensing of intellectual property. 

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: investment management services (expenses uniquely and specifically related to investment asset management.  These 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), legal 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.

Policy Statement

Yale University personnel shall purchase goods and services using practices that are compliant with federal and state laws and aligned with Yale’s effective practices.  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 for synergies, 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. 

Definitions

Certificate of Insurance

Proof of insurance provided by a supplier.

Comparative Pricing

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).

Competitive Bidding

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 $150,000 charged to federal awards and federal pass-throughs.

Diversity Suppliers

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.

Micro-purchase

A purchase of goods or services less than $10,000, as defined by the 2017 National Defense Acquisition Act. 

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.

Purchase Order

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 contract is formed.

Purchase Requisition

The Yale department-generated source document required to initiate a Purchase Order.  Purchase requisitions include a description of customer requirements, valid charging instructions and delivery instructions, and the required departmental approval.

Purchasing Card (“PCard”)

A corporate-liability charge card issued by Yale to qualified employees to use to support Yale business only and in accordance with this policy.

Simplified Acquisition Threshold

This acquisition threshold is set by the federal government.  The simplified acquisition threshold is currently $150,000 and is periodically adjusted for inflation. 

Small Purchase Procedures Threshold

This acquisition threshold is set by the federal government.  This threshold is currently set for purchases greater than or equal to $10,000 and less than $150,000.

Sole Source

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.

Supplier

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.

Vendor

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 personal funds (out-of-pocket expenses).  The expense management solution supports requesting and clearing of cash advances for travel and expenses, as well as study subject advances.

Policy Sections

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.  This policy does not apply if the financial interest in the supplier 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 the Director of Purchasing Services.  Any such approval must be obtained prior to placing the order or entering into any contractual arrangement with the proposed supplier. 

Confidentiality

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 Requisition Process and the University Buying Guide regarding the appropriate purchasing methods.

Purchase Requisitions

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 should be created prior to the receipt of goods or services.  If all goods or services have not been received in full and additional goods or services remain outstanding, a Purchase Requisition can be created to cover the remaining goods or services.

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.

Out-of-Pocket Expenses

In very limited circumstances, 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.

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.

Diversity Suppliers

Every effort must be made to utilize diversity suppliers.  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.

Sustainable Procurement

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.

Internal Service Providers

Yale’s internal service providers (“ISPs”) furnish a substantial number of goods and services to the University.  For information on procurement through ISPs, refer to Policy 1410 Internal Service Providers.

Suspended or Debarred Suppliers

The Federal Government suspends or debars contractors to protect its interests.  Other than a procurement contract for the purchase of a commercially available off-the-shelf item, Yale shall not enter into a procurement contract in excess of $35,000 with a supplier that is debarred, suspended, or proposed for debarment by any federal executive agency, unless there is a compelling reason to do so.

Micro-Purchases (< $10,000)

Micro-Purchases may be made without soliciting competitive quotes, so long as the requisitioner considers the price to be reasonable.  To the extent practicable, Yale distributes micro-purchases equitably among qualified suppliers.

Small Purchase Procedures Threshold (≥ $10,000 and ≤ $150,000)

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 Procedures Threshold but does not exceed $150,000, 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 > $150,000 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 $150,000, 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 > $150,000 on Federal and Federal Pass-through Awards

For purchases greater than $150,000 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 $150,000 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.

Departmental Authorizations

Only the Authorized Office listed in Table 1 have the authority to purchase those restricted goods and services, and any other restricted goods and services under Policy 3220 Purchase of Restricted Items.

Table 1: Purchasing Authorities for Restricted Goods & Services

Authorized Purchasing Delegations

Restricted Goods or Services

Sole Authorized Office

Alcohol for research (purchased under license, held by stockroom manager, and released per Department request)

Traffic, Receiving, and Stores

Animals and animal cages for YARC (refer to Policy 3220 Purchase of Restricted Items)

Yale Animal Resources Center (YARC)

Architectural and engineering services

Office of Facilities

Construction and contractors

Office of Facilities

Equipment Maintenance

Procurement Department

Furniture, carpeting, and window coverings

Procurement Department

Telecommunications services and equipment

Procurement Department

Boats

Procurement Department

Biological hoods

Procurement Department

Leased or rented equipment

Procurement Department

Financed agreements

Procurement Department

Fuel (oil and natural gas)

Procurement Department

Hazardous materials, Chemicals and radioisotopes

Procurement Department

Office of Environmental Health and Safety

Pharmaceuticals and controlled substances

Procurement Department

Only the departments listed in Table 2 below are authorized to create departmental orders for the specific goods and services delegated to them as follows:

Table 2: Purchasing Requisition Delegations

Purchases Not Covered

Department & Contact Information

Investment Management Services

Yale University Investments Office

203-432-0120

Legal Services

Office of General Counsel

Tax Services

Tax Compliance and Planning

Accounting Services

General Accounting & Accounting Services 

Auditing Services

Auditing 

Architectural

Facilities 

Engineering & Construction Services

Facilities 

Insurance

Risk Management

Employee Travel Costs

Yale Travel Management

Employee Benefits Program

Benefits

Real Estate

University Properties

Licensing of Intellectual Property Rights

Office of Cooperative Research

Purchase Requisitions

Purchase Requisitions with an aggregate value greater than $10,000 must be approved by the Lead Administrator (or delegate).

Purchase Requisitions for Professional Services and Contracting Agreements (“PSCA”) charged to a sponsored award must also be approved by the Office of Sponsored Projects if the:

  • PSCA exceeds $10,000 (including all amendments);
  • Consultant is identified as being responsible for the design, conduct or reporting of the research (regardless of the dollar threshold of the PSCA); or
  • Scope of work covered by the PSCA involves human/animal subject research (regardless of the dollar threshold of the PSCA).

Purchase Orders

Purchase Order approvals are as follows:

PO Value

Approver

$10,000 - $1,000,000

Director Purchasing Services, or designee

$1,000,000 - $5,000,000

Chief Procurement Officer, or designee

Over $5,000,000

Vice President for Finance and Chief Financial Officer, or designee

Deposits and Prepayments

All deposits, down payments, and prepayments equal to or greater than $25,000 must be approved by the Director of Purchasing Services.

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

< $5,000

≥ $5,000

Documentation*:
How approver should record/document that goods have been received

Not required

Packing slip, e-mail, written record of direct knowledge/observation

Confirmation:
How approver should satisfy him/herself that goods have been received

Assumed with payment approval

Packing slip, verbal confirmation, e-mail, direct knowledge/observation

Acknowledgement:
How approver should tell Shared Services (AP) that goods have been received

No acknowledgement required

Invoice approval

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 using a University PCard or check.  If a personal credit card is used for expenses, 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. 

Please refer to Policy 1104 Signature Authority, Delegation Approval Authority and Access for Financial Transactions.  Please also refer to the online Signature Authority Tool.

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.

If an employee does not feel comfortable speaking with the Chief Procurement Officer or the Controller’s Office, the employee may contact the Yale University Hotline.

Violation of University policies may carry disciplinary consequences, up to and including dismissal.

Roles and Responsibilities

Approver

  • 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

  • Performs supplier analyses, obtains bids and quotes, and approves purchase orders based on internal approval limits.

Chief Procurement Officer

  • Oversees all activities across Purchasing Services and Electronic Commerce.
  • Approves purchase orders and professional service and other agreements.

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 3201.7, above.
  • Instructs and reminds transaction requestors of their responsibility to create a Purchase Requisition before goods or services are delivered.

Office of Sponsored Projects

  • Provides guidance and approvals regarding purchases related to sponsored awards.

Requestor

  • 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.

Office of Risk Management

  • Provides guidance regarding insurance requirements for suppliers.

Initiator

  • Prepares or places orders for goods and services based on direction from the requestor.

Principal Investigator (“PI”)

  • Initiates procurement transactions in support of and benefitting sponsored awards.  The PI may delegate this responsibility to a qualified individual.

Purchasing Services Director

  • Oversees daily operations within Purchasing Services.
  • Approves purchase orders and requisitions for the dollar limits defined in the Controller’s Office Fact Sheet.

Procurement Department

  • Provides purchasing expertise and support to the Yale community, including negotiating strategic and other contracts on behalf of the University, reviewing required documentation, and issuing authorized purchasing orders.

Supplier Compliance Unit

Establishes and maintains the supplier database.