Purchasing Updates

Faculty and Staff PresentationFall, 2010

http://www.entertonement.com/search?keywords=twilight+zone+theme

Senate Bill 51: welcome to area 51

Recent Changes in Procurement State Law What and Why You Need to Know

• WHAT has changed – top five:1. Prior Contract Authorization2. Sole Source Purchase Requirements3. Vendor Authorizations & Certifications4. Material Communications Reporting5. Organizational Structure/Authority/Governance

Recent Changes in Procurement State Law What and Why You Need to Know

• WHY you need to know– Added procedures and time to complete procurements.• Ensure your faculty and staff understand the new

requirements—and that what could be rushed or managed as a last minute purchase is no longer possible • Help us help you by contacting your departmental

business person and the Purchasing Office as soon as possible

– Failure to comply with new requirements could lead to termination of employment

1. Prior Contract Authorization

• Purchase Requisitions entered into the Banner system after the goods or services have been received are “Non-Conforming” orders. They violate the requirement for prior contract authorization

• A new process is in place for managing “Non-Conforming” orders• Under new law, in certain circumstances, the University may not be able

to make payment for goods and services received without prior contract authorization

Ensure faculty and staff understand a Purchase Order or executed Contract must be complete before goods or services are received from a vendor. Note – all orders in iBuy automatically create Purchase Orders in Banner. Voyager POs reference procurement code

“Vendors shall not be paid for goods that were received or services rendered before the contract was reduced to writing and signed by all parties.”

2. Sole Source Purchase Requirements

• Sole Source hearings are held on a regular schedule every other Wednesday

• There is a new required Sole Source Justification Form• Training for the new Sole Source process will be provided to faculty

and staff later this fall• Naming of a product or service in a grant proposal does not

constitute justification for a Sole Source: Library must comply

Ensure faculty and staff understand the added time and requirements for all Sole Source procurements. In some cases, this could be a month or MORE as vendors may not return paperwork.

All Sole Source purchases must be posted to the Procurement Bulletin for 14 days prior to a required public hearing.

3. Vendor Authorizations & Certifications

• Business registration requirement – Must be a legal entity authorized to do business in Illinois

prior to submitting a bid, offer or proposal or LICENSE– Similar to Board of Elections registration, but now a fee

applies • Financial disclosure by vendors for all purchases that exceed

$25K• Business Enterprise Program (BEP) utilization plan (if

applicable) for minority and female owned businessesThe new requirements for vendors may result in the University

not being able to make purchases from vendors who have not complied, even if we have purchased from them in the past.

New requirements for businesses to register with the State of Illinois and disclose certain information in order to be a vendor for the University.

4. Material Communications Reporting

• The Executive Ethics Commission of the State of Illinois is responsible for coordination and training related to this requirement. We don’t know the final details of this yet.

• Web-based tool will provide reports to the Procurement Policy Board (PPB)

• All material communications for current or potential procurement opportunities with a vendor must be reported

Caution faculty and staff about talking with vendors or potential vendors; consider contacting vendors through the Purchasing Office. Negotiation for library materials is handled centrally

Beginning January 1, 2011, ALL State employees must enter a report of communications with vendors into a Web-based system.

5. Organizational Structure/Authority/Governance

• University procurements are approved by the Chief Procurement Officer (CPO) for Higher Education

• CPO is now selected by the Executive Ethics Committee for a five year appointment

• State Procurement Officer (SPO) for UIUC is Maxine Sandretto, Assistant Vice President for Business and Finance

• New role of Procurement Compliance Monitor

The Chief Procurement Officer shall exercise all procurement authority created by the Illinois Procurement Code.

Details of Legislative Changes• Senate Bill 51/ Public Act 96-0795

– Effective 07/01/2010– The major state agencies (IDOT, CMS, CDB, Higher Ed) formed

subcommittees to review the requirements and provide recommendations and interpretation

• Several subsequent Public Acts– PA 96-0920 - requires financial disclosures from vendors for all

purchases over $25K, delays material communications reporting– PA 96-1064 – requires reporting of disadvantaged business

utilization plans

*Procurement Policy Board 30 day review period

University Responses• Informing and educating faculty and staff

– Scheduling presentations to department faculty (request department business staff be present for the presentation).

– Preparing Sole Source process training– Developing “Purchasing 101” class to cover all current

purchasing requirements• Implementing a University-wide Contract Management

System (all contracts except those for sponsored research)• Initiating a new program to place trained Purchasing Office

staff in shared services units within departments and colleges

Library summary

• Do NOT initiate an order outside of a valid purchase order process: there will be repercussions

• PLAN ahead if looking at large expenditures: examples– sole source hearing process and maybe the bid process

• Remember that we need to have vendor paperwork completed for anything that requires signature if over 5K licenses included and that is difficult paperwork

• Vendor negotiation is now formal and documented: use common sense

What Can I Sign?

• Other than your paycheck – you are not authorized to sign anything on behalf of the University.

• Not even Paula has signature authority.• If in doubt ask Kathie, Rod, or Susan.