Official Policy

The official version of the Purchasing Policy.

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Purchasing Guidelines

I. Purchasing Process Introduction

The method in which a department uses to purchase will often vary depending on the product or service needed. It is our goal to provide all University staff, faculty and personnel the information necessary to make informed decisions about their acquisition process. The following information will assist end users in understanding the complete purchasing process from vendor selection through payment.

All purchases made with University funds must comply with the following policies, procedures and/or guidelines in order to ensure efficient payment of goods and to avoid unnecessary costs.

• UA Spending Policy (Accounts Payable)
• P-Card Policy and Procedures (P-Card Services)
• Professional Service Guidelines (Contract Management)

The flowchart linked below is intended to identify the appropriate method of order placement and payment based on the type and value of goods or services.  The subsequent content on this page will provide additional detail and information to support the purchasing process flowchart.

UA Purchasing Process Flowchart

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II. Vendor Selection Process

Before one can select a vendor, it is important to understand the primary State law that affects the acquisition process for goods and services on campus. Per Article 5 of Section 41-4 of the Code of Alabama, any purchase request or contract for like or similar products and/or services that exceeds the University’s small dollar purchase threshold of $75,000 must be competitively bid (with limited exceptions). A purchase request or contract cannot be split up to avoid the $75,000 bid threshold. Review Alabama’s Competitive Bid Law.

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Utilizing Approved Contracts

“Approved Contracts” is a phrase used to describe agreements that have been competitively bid by the University, its System Affiliates, the State of Alabama Purchasing Department or a Cooperative Agency. By use of these contracts, departments gain access to the best negotiated prices, terms and dedicated support teams, while also complying with the State of Alabama Bid Law. The first step in the purchasing process is to determine if the good or service is available through a current UA Approved Contract. Approved Contracts should be used whenever possible.

See below for types of Approved Contracts listed in order of preferred use:

1. University of Alabama or System Affiliate Approved Contracts:

The UA Purchasing Department currently maintains more than 250 competitively bid contracts in categories ranging from promotional t-shirts to medical supplies. These contracts have been competitively bid by the UA Purchasing Department or a UA System affiliated Purchasing Department. Users may search Approved Contracts by vendor name, category, commodity, or keyword. If a user is unable to utilize a UA Approved Contract for their purchase and the cost is more than $75,000, please contact the appropriate Buyer for guidance on how to proceed.

Purchases from UA Approved Contract vendors do not require approval from a Buyer as long as the good or service is covered within the contract terms. For questions concerning the specifics of a contract, contact the appropriate Buyer.

2. State of Alabama Approved Contracts

As an agency of the State of Alabama, the University qualifies to utilize State of Alabama contracts. Information on current statewide contracts is available through the Alabama Department of Finance website and may be used for the acquisition of goods and services in most cases.

3. Cooperative Approved Contracts

A cooperative contract is one that has been competitively bid by any group or consortium of governmental entities or a group purchasing organization with the goal of complying with standard procurement practices and state bid laws. Cooperative contracts leverage the purchasing power of large volume commitments by allowing multiple entities to purchase from a single contract. The UA Purchasing Department reviews available cooperative contracts on a regular basis to identify contracts that may address a specific need or fill gaps between existing contracts. Once beneficial contracts have been identified, they are fully vetted to confirm they meet all applicable competitive bid requirements before being made available to campus partners. The University currently partners with more than sixteen cooperative agencies and the most commonly used contracts are included on the UA Approved Contract list.

Contact the appropriate Buyer for assistance with utilizing System Affiliate, State of Alabama or Cooperative Contracts as review and approval will be required.

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Purchases of Goods or Services From Non-Contract Vendors < $75,000

Purchases for less than $75,000 are considered small dollar purchases and do not require competitive sealed bidding.  Campus partners have the freedom to select a preferred vendor.  Researching pricing from multiple vendors is highly encouraged to ensure lowest cost.

Please note: Approval from the appropriate Buyer is required only when like or similar items are typically available from a contract vendor to ensure Approved Contract Vendors are used whenever possible. For P-Card purchases, any approvals should be included in the P-Card holder’s electronic expense report.

If you are unsure of the UA purchasing process or question the use of a vendor, we encourage you to contact the appropriate Buyer to confirm no approvals or special requirements apply to your non-contract purchase.

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Purchases of Goods or Services From Non-Contract Vendors > $75,000

Competitive Bid is Required If:

• Purchase value is $75,000 or more
• Good or service is not available from an Approved Contract Vendor
• Good or Service can be acquired from more than one source

Basic Competitive Bid Process:

1. Develop Product or Service Specifications – Provide to Purchasing
2. Purchasing will Solicit for Bids – (2) Two Week Minimum required
3. Purchasing will Award Contract to Lowest Bidder that Meets the Minimum Specifications

See the Competitive Bid Process page for more details.

Competitive Bid is Not Required if:

Sole Source Purchase

• Applies to purchases over $75,000 that can only be supplied by one source, to the best of the requester’s knowledge.
• A sole source cannot be based on price.
• A sole source cannot be based on quality as this is a subjective evaluation based on opinion.
• A sole source justification letter must be completed and signed by the requesting faculty member, principal investigator, or researcher. The Purchasing Department is vested with the authority to approve a sole source letter and associated purchase.

Justification letter guidelines

• Must be sufficient in detail so that a person not familiar with the situation is able to understand the need to forego the normal purchasing procedure.
• Should be typed on letterhead signed and dated by the principal investigator.
• Is only valid for one calendar year.
• Must state that there are no other companies or distributors that can provide the product or service.

The Purchasing Department will not consider a sole source letter from the vendor as the primary justification, but may use it as additional information when considering the request.

The following questions should be considered when preparing the justification for a sole source purchase:

• What is the product and what does the product do?
• Where will the product be located on campus? Building / room number
• Will installation and/or on-site training by the vendor be required?
• Do other manufacturers make similar products that will do the same job or meet the same goals?
• How is this product unique from all others?
• What existing equipment or supplies are, or must be, compatible with the product?
• Why are the unique characteristics of this product critical for your mission?
• How will this purchase or failure to purchase the specifically proposed equipment impact the associated research? (If Applicable)
• Will the failure to purchase the specifically proposed equipment affect the continuity or validity of the associated research? (If Applicable)

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III. Order Placement & Methods of Payment

Before selecting an order placement method, it is important to become familiar with Procurement’s Expenditure Matrix resource. The acquisition process at the University can be completed through a variety of methods, funding sources and payment options…and, can be a little confusing at times! The Expenditure Matrix is intended to assist campus partners in identifying the appropriate method of payment for common expenditures. Please refer to the expenditure matrix in conjunction with the methods detailed below. If you are unable to locate your good or service on the matrix, please contact the appropriate Buyer for assistance.

The following Order Placement Methods are Listed in Order of Preference

1. Orders placed with Catalog Vendors in the buyBAMA marketplace using a University P-Card

Through buyBAMA, the University’s eProcurement system, users can browse vendor catalogs, add items to a shopping cart, and submit orders electronically in a similar manner to typical online retailer websites. The growing number of marketplace vendors available through buyBAMA are commonly referred to as “Catalog Vendors.” All Catalog Vendors are Approved Contract vendors.  When possible, users should make purchases through Catalog Vendors which ensures competitive contract pricing and terms are applied to the transaction. For transactions over $10,000, the single purchase P-Card limit increase (when needed) is automated through the workflows in buyBAMA. Each transaction is reviewed and approved at the departmental level before being routed to Purchasing for compliance review (including business purpose review, if necessary) and approval. Once all approvals are complete, the transaction is then routed to P-Card Services to process the increase (when needed). If a monthly limit increase is also required, the limit is increased by enough to cover the single purchase. Due to the approval workflow for the transaction, no pre-purchase steps are necessary to increase limits. You can request buyBAMA access, view online training videos, reference material and find FAQ’s at the buyBama webpage on the Purchasing website.

Just because an item is available through buyBama catalog vendors does not automatically mean it is an allowable purchase. All purchases through buyBama catalogs are still subject to all applicable University policies and guidelines.

2. Orders Placed Outside of buyBAMA Using a University P-Card

While some vendors are available through the buyBAMA marketplace, most vendors who accept the P-Card will require order placement through their website, in-person or by phone.

Campus partners are encouraged to use their P-Card whenever accepted by vendors for all allowable purchases in compliance with Procurement Services policies.  Please note that P-Cards should not be used for payment of professional services.  See Professional Services Guidelines for associated payment information.

The standard single purchase limit for the University P-Card is $25,000, although limits will vary by department and P-Card holder. Temporary increases are required for purchases outside of buyBAMA that exceed the P-Card holder’s single purchase limit. See P-Card Policies and Procedures for temporary increase procedures.

Approval requirements for P-Card purchases outside of buyBAMA

• Approved Contract Vendors – Approval is not required as long as the item is covered within the contract terms.
• Non-Contract Vendors – Approval is required from the appropriate Buyer when like or similar items are typically available from an Approved Contract Vendor to ensure Approved Contract vendors are used whenever possible.  Approval should be included in the P-Card holder’s electronic expense report.

If you are not sure if approval is required for your P-Card purchase, please contact the appropriate Buyer for guidance.

3. Orders Placed Through BuyBama Using a University Issued Purchase Order

This order placement method is appropriate for the following scenarios:

• When order authorization to vendor is needed in advance of order fulfillment
• When encumbrance of funds is needed in advance of order fulfillment
• Services or installation of equipment by a non-contract vendor that may require insurance review
• When it is beneficial to apply University General Terms and Conditions to an order placement with a non-contract vendor

Purchase order requests must be submitted to the UA Purchasing Department for approval through BuyBama using a “Non-Catalog” purchase request. Requests are routed electronically through an approval workflow resulting in less paperwork and improved efficiencies. All vendor invoices should be submitted directly to Accounts Payable per the invoicing instructions on the purchase order once the order has been fulfilled and received in buyBAMA.

4. “Other” Goods and Services Paid via Concur Invoice Payment Requests

This category primarily applies to goods and services unallowable on the P-Card and not applicable to the purchase order process. Examples of types of payments generally made on a Payment Request are gifts, entertainment, conferences and meetings, professional services and awards. See Spending Policy for additional detail. Please contact the appropriate Buyer for guidance if you believe your transaction would fit this category.

Order Placement and Method of Payment Summary

(in order of preferred method)

Transaction Type	Placement Method	Payment Method
Orders placed with Catalog Vendors in the buyBAMA marketplace using a University P-Card		P-Card
Orders placed outside of buyBAMA using a University P-Card	In-Store or through vendor websites	P-Card
Orders placed through buyBAMA using a University issued Purchase Order		Invoice to Accounts Payable
"Other" goods or services that do not fit purchase order process and/or vendors do not accept P-Card	Varies	Invoice Payment Request

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IV. Other Things to Know

Professional Services
Professional Services are customized services consisting of specialized intellectual or creative expertise based on personal skills or ideas provided for a fee. Professional Services are exempt from competitive bidding unless determined otherwise by the University’s Chief Procurement Officer. Please refer to Contract Management website for guidance on Professional Services as special requirements apply, depending on the situation.

Software and Technology Acquisitions

• Always check UA OIT’s software catalog first to see if the software you are seeking, or a similar tool, is already available.
• If not available through OIT, please check to see if available through a UA Approved Contract vendor.
• Most software companies require the licensee (UA in this case) to sign an agreement of some type.  Any agreement that requires a signature will need to be submitted through Contract Management’s Procurement Contract Portal for review and execution.
• As part of Contract Management’s review process, OIT typically reviews all technology agreements prior to execution; however, it may be beneficial to seek their guidance early in the process to ensure there are no concerns with support for your acquisition before getting too far into the process. Contact Cathy Rainey with any questions.  OIT recommends reviewing and adhering to their IT Use Guidelines for Software as a Service (SAAS) acquisitions.
• Once you have identified the proper UA Approved Contract vendor or have executed an agreement through Contract Management, use the procurement or payment method for software found in the expenditure matrix.

Board Approval Thresholds
Certain contracts may require approval by the Board of Trustees depending on cost and nature.  See summary of primary thresholds below:

• All contracts for goods and services involving an expenditure of $1,000,000 or more, for the term of the agreement/contract, not procured through a competitive process.
• All consulting and/or professional services contracts involving an expenditure of $250,000 or more, for the term of the agreement/contract, and regardless of whether the contracts result from a competitive process.
• All information technology contracts or projects, not included in the annual technology plans, involving an expenditure of $750,000 or more for the term of the contract or project (including any extensions, renewals, upgrades or expansions to existing technology contracts or projects), regardless of the source of funds.
• All revenue-generating contracts involving the receipt of $1,000,000 or more for the term of the contract (including all option, renewal, or extension periods).
• Purchases or leases of individual items of equipment equal to $750,000 or more shall be submitted to the Board for approval in accordance with Attachment C.

If  you are not familiar with the Board submittal process or are not sure if your contract requires such approval, contact Purchasing for guidance.  See Board Manual for complete context of approval thresholds.

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