UH SYSTEM PURCHASING GUIDELINES

Applicability

These guidelines apply to the procurement of the following types of goods and services for all University of Houston System (UHS) components.

Also, these guidelines apply to all methods of procurement, including contracts (revenue and expense), purchase orders, non-PO vouchers, and Procurement Card payments. “Purchases” in these guidelines refers to any and all of these methods of procurement.

ReasonforPurchasing Guidelines

The TexasEducationCode 51.9335providesageneral descriptionoftherequirementsforthe acquisitionofgoodsandservicesby institutions of higher education and the UHS PurchasingGuidelines are intended to help UHS components comply with these and other state and federal regulationsthrough more specific procurement procedures. These guidelines are intended to be in compliance with UH System Board of Regents (BOR) Policy 55 – Finance; System Administrative Memorandum (SAM) 03.A.01, Expenditure of all Funds Administered by the University of Houston System; SAM 03.A.04, University Credit Cards; SAM 03.A.05, Contract Administration; SAM 03.B.01, Purchasing Guidelines; SAM 03.B.02, Contracting with Historically Underutilized Businesses (HUBs). If there is any discrepancy between these guidelines and the BOR Policy or SAMs, the BOR Policy and SAMs take precedent.

PurchasingGuidelines

1.GENERAL

1.1All purchases made using funds paid through UHScost centers, except for agency funds (fund 9xxx), must comply with these procedures. Agency funds do not belong to UHS and are not subject to these procedures. However, as the custodian of those funds, the responsible UHS department must ensure that expenditures on agency funds are reasonable, necessary, properly documented, and in accordance with the fund’s purpose.

All purchases with UHS fundsmustbefullydocumentedwithalldocuments retained in accordancewith the UHSrecords retention schedule. On purchases above departmental delegation, departments should contact the Purchasing Department to receive advice on procedures to follow when researching a purchase.

1.2Procurement Statutes

UH System is subject to the following procurement statutes:

  1. Texas Education Code 51.923, Qualifications of Certain Business Entities to Enter into Contracts with an Institution of Higher Education
  2. TexasEducationCode 51.9335, Acquisition of Goods and Services
  3. Texas Education Code 51, Subchapter T, Construction and Repair of Permanent Improvements
  4. Texas Government Code 572.069, Certain Employment for Former State Officer and Employee Restricted
  5. Texas Government Code 2254, Subchapter A, Professional Services
  6. Texas Government Code 2254, Subchapter B, Consulting Services
  7. Texas Government Code 2161, Historically Underutilized Businesses
  8. Title 34, Texas Administrative Code, Chapter 20, Historically Underutilized Businesses
  9. Human Resources Code, Chapter 122, State Use Program
  10. Title 40, Texas Administrative Code, Chapter 189, State Use Program
  11. General Appropriations Act (only applies to state-appropriated funds)
  12. Texas Government Code 2261, Subchapter F, Ethics, Reporting, and Approval Requirements for Certain Contracts
  13. Texas Government Code 2054.008, Notification Requirements for Major Information Systems Exceeding $1,000,000
  14. Texas Government Code 2166.2551, Notification Requirements for Construction Projects Exceeding $14,000
  15. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, OMB Circular A-81 (only applies to federal funds)

1.3PurchasingProcess for Non-Federal Funds

When only non-federal funds will be used, thepurchasingprocesses and dollar thresholds are as follows:

a.Purchasesup to and including $5,000, which are considered spot purchases and do not require competition;

b.Purchases processeddirectlythrough and bythe Purchasing Department that are over $5,000 and up to and including $25,000, which require informal bids;

c.Purchases processeddirectlythrough and bythe Purchasing Department that are over $25,000, which require formal bids and posting on the State of Texas Electronic State Business Daily (ESBD).

1.4Purchasing Process for Federal Funds

Purchases involving federal funds must comply with OMB Circular A-81, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards:

When any federal funds will be used, the purchasing processes and dollar thresholds are as follows:

  1. Purchases up to and including $3,000, which are considered spot purchases and do not require competition;
  2. Purchases processed directly through and by the Purchasing Department that are over $3,000 and up to and including $150,000, which require informal bids;
  3. Purchases processeddirectlythrough and bythe Purchasing Department that are over $150,000, which require formal bids and posting on the State of Texas Electronic State Business Daily (ESBD).

A list of federal fund codes are posted on the Finance References page: Purchases may not be split to avoid a more restrictive procurement process whether they involve federal funds or not.

1.5Purchases Funded by a Restricted Gift, Contract, or Grant

Purchasesmade pursuanttoa restrictedgift,contractorgrantmay be further restricted by procurementrequirementsoutlined inthe sponsoror donor restrictions and regulations. It is the originating department’s responsibility to follow the sponsor or donor’s restrictions and regulations when initiating a purchase.

1.6Purchases Funded by State-Appropriated Funds

Purchases funded by state-appropriated funds are further restricted by the General Appropriations Actand rules published by the Comptroller’s Office in its online purchasing guide, eXpendit:

1.7Best Value Requirement

In accordance with TexasEducationCode 51.9335,UH System purchases, regardless of dollar amount,shallbe basedona “bestvalue” andshall consider:

  • list purchase price;
  • reputationofthevendor andofthevendor’s goodsorservices;
  • quality of the vendor’s goodsor services;
  • extent towhich the goodsor servicesmeetUHS’ needs;
  • the vendor’spastperformance withUHS;
  • impacton the ability ofUHS to complywithlaws andrulesrelatingtoHistorically Underutilized Businesses (HUBs) and tothe procurement of goods and services frompersonswithdisabilities;
  • totallong-term costtoUHSof acquiring vendor’s goods and services;
  • use of material in constructionor repairtoreal property thatisnotproprietary toasinglevendorunlessUHSprovidesa writtenjustificationin therequestforbidsoftheuniquematerialspecified;
  • ability of the vendor’s proposal to meet the requirements of the institution’s solicitation document, so that any vendor proposal that is non-responsive to the criteria set forth in the solicitation document shall be rejected;
  • and anyotherrelevantfactorthataprivatebusiness entity would considerinselecting avendor.

Each solicitation is unique and will list the best value criteria for that purchase.

1.8HUB Program

In accordance with Texas Government Code 2161 and Title 34 of the Texas Administrative Code, Chapter 20, UH System is committed to having a robust Historically Underutilized Business (HUB) program for all of its components to encourage HUB participation in UHS contracts, as well as comply with state HUB requirements.

Each component university HUB Coordinator will develop proceduresto comply with state HUB requirements. UH HUB Program Guidelines are posted on the UH HUB website:

1.9State Use Program

In accordance with Human Resources Code, Chapter 122, and Title 40 of the Texas Administrative Code, Chapter 189, UH System departments shall purchase goods, whenever possible, from persons with disabilities (Texas Industries for the Blind and Handicapped (TIBH)) when using state-appropriated funds.

When a requisition is created using state funds to purchase a good or service that might be available from TIBH, the requisition creator must confirm whether TIBH sells the good or service and, if so, why the good or service is not being purchased from TIBH. This information is recorded on the requisition and in a table that can be queried for monthly TIBH reporting. See the State Use Program FAQs for detailed processing instructions:

Each component Purchasing Department is responsible for completing monthly TIBH reporting. TIBH contracts may be viewed at the following website:

2.PURCHASE OF GOODS OR COMMODITIES

2.1Purchases of $3,000 or Less with Federal Funds or $5,000 orLess with Non-Federal Funds - Spot purchases

  1. Quotes:
  2. Authority to make purchases without competitive bids for $3,000 or less with federal funds or $5,000 or less with non-federal funds (including freight) is delegated by each component’s policies. For purchases of $3,000 or less (federal funds) or $5,000 or less (non-federal funds) that will be invoiced by the vendor, departmentsmust obtain a quote from the vendor prior to the purchase to ensure the items and amount charged on the invoice match the quote.
  3. This quote must be uploaded to the voucher (in addition to the invoice)or requisition as backup documentation.
  4. Quotes are not required for direct purchases of $3,000 or less (federal funds) $5,000 or less (non-federal funds), such as over-the-counter purchases or purchases with a credit card. See component’s policy on departmental delegation.
  5. Departments are encouragedtoobtainmultiple quotes(if they have departmental delegation) for purchases of $3,000 or less (federal funds) $5,000 or less (non-federal funds),whenever possible, to help them determine which vendor provides the best value.
  6. Splitting Orders: Purchasesmaynotbeseparatedintosmallerdollarpurchasesinorderto remain within the departmental authorized dollar limit.
  7. Unauthorized Purchases: Inthe eventapurchaseorseriesofpurchases(that appropriatelyshould have been combinedintoasinglepurchase) aremadeexceedingthe departmental delegated authority amount,the departmentshallsubmita letter of justification along with the request for payment to the Chief Financial Officer (CFO) or designee for approval. (The department must follow the component’s procedures for requesting an exception to policy.)
  8. Payment Methods: Purchases under each component’s delegated amount may be done using procurement card, payment directly to vendor by voucher or reimbursement to employee by voucher.

2.2General Requirements for Purchases over$3,000 with Federal Funds or over $5,000 with Non-Federal Funds

  1. Competition: Unlessspecifically exempted(seeSection 4.5), procurementmethodsforpurchases over $3,000 with federal funds or over $5,000 with non-federal funds mustinclude:competitive bidding;competitive sealed proposals;group purchasing;and/oralternatemethods relevant to the specific application ofgoods or services purchased.
  2. Documentation for Requisition: Departments must submit a vendor’s quote along with the purchase requisition to the Purchasing Department. The quote must include a detailed description of the type and quantity of items to be purchased. Purchasing will use this information as the basis for conducting a competitive bidding process and creating the purchase order. If applicable, the department will also submit a Sole Source Justification Form with the requisition, which will be reviewed and approved by Purchasing.
  3. Documentation for Purchase Order or Contract: For all purchases over $3,000 with federal funds or over $5,000 with non-federal funds, documentation must be attached to the purchase order or contract that substantiates (a) basis for contractor selection; (b) justification for lack of competition when competitive bids or offers are not obtained; and (c) basis for award cost or price. This requirement applies to all university funds, including grants transferred from other institutions. It does not apply to agency funds, which do not belong to the university.
  4. Payment Method: All payments for purchase orders must be made on a PO voucher with the appropriate invoice attached.

2.3.Purchases between$3,000 and $150,000 paid in part with federal funds and between $5,000 and $25,000 paid entirely with non-federal funds - Informal bids

  1. All items in section 2.2 apply.
  2. Most purchases between $3,000 and $150,000 paid in part with federal funds or between $5,000 and $25,000 paid entirely with non-federal funds will involve an informal bidding process. Purchasing will send a minimum of three (3) telephone, e-mail or fax bids to vendors. A minimum of two (2) State of Texas certified Historically Underutilized Businesses (HUBs) will be contacted if available for that purchase.

2.4Purchases over $25,000 paid entirely with non-federal funds or over $150,000 paid in part with federal funds- Formal bids

  1. All items in section 2.2 apply.
  2. Purchasing will post bids on the State of Texas Electronic State Business Daily (ESBD).
  3. Purchasing will check the Excluded Parties List System (EPLS) website to make sure vendor is not on the excluded list and upload a screen print of the EPLS website to the purchase order.

2.5Purchases over $100,000

  1. All items in sections2.2and 2.4 apply.
  2. A HUB Subcontracting Plan is required with bidding documents, if the Purchasing Department determines that subcontracting opportunities are likely.

2.6Purchases over $1,000,000

  1. All items in sections 2.2, 2.4, and 2.5 apply.
  2. All revenue and expense contractsover $1,000,000 must be approved by the UHS Board of Regents, as well as all construction and renovation projects costing $10,000,000 or more. Following BOR approval, the Texas Higher Coordinating Board must also review any construction or renovation projects over $10,000,000 before a contract is signed.
  3. See “Construction Procurement Process Over $1 Million (Narrative)” and “Non-Construction Procurement Process Over $1 Million (Narrative)” on the UH Purchasing page for detailed procurement procedures. The narrative and a flowchart for each process are located at:

2.7Requirements that applyregardless of dollar amount

  1. Radioactive materials, x-ray machines, Class 3b and 4 lasers, biological safety cabinets and other hazardous materials must be purchased through the Purchasing Department and must be pre-approved by the campus Environmental Safety Officer.
  2. Vehicles, including “golf carts” used on campus, must be purchased through the Purchasing Department and must be pre-approved by the campus Fleet Coordinator.
  3. UHS shall provide equal opportunity and access to all vendors for the purchase of goods and commodities. The Purchasing Department and/or HUB Department will assist in identifying HUBs for any purchase. A list of Central Master Bidders List (CMBL) and HUB vendorsregistered with the Comptroller may be found at:
  4. The State of Texas has awarded term contracts that are available for use by all state agencies and institutions of higher education. Information, regarding what items are available on state term contracts, may be foundat: highly encouraged to review and utilize the state contracts whenever possible. When using a state term contract a requisition must be submitted to the Purchasing Department regardless of dollar amount.
  5. There are several contracts available that UHS can use when purchasing items. When using these contracts it is not necessary to bid the purchase. However, Purchasing may bid items if it is considered in the university’s best interest. Some examples of contracts are: UHS, E&I Cooperative Service Inc., Department of Information Resources (DIR), TXMAS, U.S. Communities, and The Cooperative Purchasing Network (TCPN). Contact the Purchasing Department for more details.

2.8.Vendor Interviews

Some types of procurement (especially Request for Proposals and Request for Qualifications) may include vendor interviews by a selection committee. The vendor interview is intended to provide additional information about the vendor’s proposal or qualifications to help the selection committeemake a more informed evaluation. The only individuals who may attend vendor interviews are (1) representatives from the vendor, (2) members of the selection committee, and (3) representatives from Purchasing, who oversee the procurement process.

3.EMERGENCY PURCHASES

3.1Anemergencypurchaseisdefinedasapurchaseofgoodsorservicesthatifnot securedimmediately,UHSwillsufferfinancialoroperationaldamage.

a.Inthecaseofanisolated emergency that affects a particular department,the departmentmustnotify the Purchasing Departmentimmediately.Iftheemergency happensafternormalbusinesshours,the department shall notifythe Purchasing Departmenton thenext business day. A written justification is required (see component Purchasing website for form) and must be attached to the requisition.

b.In the case of a campus-wide emergency, such as a natural disaster that causes extensive property damage, the Purchasing Department may implement campus emergency procurement procedures that may include offline purchase requests, if the online purchasing system is not available, suspension of competitive bidding rules to expedite emergency purchases, and increased delegated authority to departments to make some emergency purchases themselves. Purchasing may also require departments to maintain or upload additional documentation related to these purchases for insurance purposes.

4.PURCHASE OF SPECIFIC GOODS OR SERVICES

4.1Lease and rentalofmachines andequipmentthatdonot include anoperator are considered goodsand must be routed through the Purchasing Department on a purchase requisition regardless of dollar amount. Lease and rental of machines and equipment thatinclude anoperator provided bythe supplier are considered services and must utilize a contract regardless of dollar amount.

4.2Printing Services

a.State Funds: Thepurchaseofprintingserviceswith state funds costing more than $1,000 must be routed through the Purchasing Department on a purchase requisition for competitive bidding, unless the department uses a UHS or UHS-contracted printing service. Printing services purchased with state funds that cost $1,000 or less may be purchased by the department on a voucher or P-Card without competitive bidding. Authority to make departmental purchases is delegated by each component’s policies.

b.Local Funds: The purchase of printing services with local funds costing more than $3,000 with federal funds or more than $5,000 with non-federal, non-state funds must be routed through the Purchasing Department on a purchase requisition for competitive bidding, unless the department uses a UHS or UHS-contracted printing service. Printing services purchased with federal funds that cost $3,000 or less or with non-federal, non-state funds that cost $5,000 or less may be purchased by the department on a voucher or P-Card without competitive bidding. Authority to make purchases for $3,000 or less with federal funds or $5,000 or less with non-federal funds (including freight) is delegated by each component’s policies.

4.3Leaseof Space

Alllease-of-space requestsfor UHS (where UHS is the lessee),regardlessof the dollar amount,mustbe submitted tothe UHS Contract Administration Department for contract compliance and the Chancellor’s approval.This is not a delegated item to component university Presidents.

a.State Funds: The Texas Facilities Commission must be given the opportunity to obtain leased space if the lease will be paid from state funds. The UHS Facilities Planning and Construction (FP&C) Department and UHS Contract Administration Office will coordinate the required activities with Texas Facilities Commission after obtaining approval of the Chancellor.

b.Local Funds: The UHS FP&C Department and the UHS Contract Administration Office will work together to ensure compliance with all legal and administrative requirements.

4.5Exempt Purchases

Thefollowing goods and servicesareexemptfromcompetitivebiddingrequirementsand maybepurchased bydepartments regardless of dollar amount:

a.Membership fees anddues. However, memberships paid with state funds must be on the UHS approved membership list:

b.Newspaper and magazine subscriptions

c.Registration fees

d.Utilities. However, some utility services are contracted by UHS FP&C and all UHS departments must utilize the contracted vendor.

e.Library payments for materials and subscriptions that are utilized by library patrons.