A new Standard Practice Guide covering various aspects of U-M’s procurement process includes an increased bid limit, a defined signature authority system, and measures to manage institutional risk.
The new SPG took effect Jan. 1 and was approved at the December Board of Regents meeting, replacing a policy originally issued in 2004.
It also provides details on restricted commodities, explains unit-level responsibilities, and includes information about ethical conduct when purchases are made on behalf of the university.
“Many changes, ranging from significantly increased bid limits to technological advances, have occurred in higher education purchasing over the past 10 years and the new SPG was developed against that backdrop,” said Colin Anderson, interim director of procurement services.
Anderson also noted that the new Procurement SPG was developed collaboratively with input from several units across the university, including the Stamps School of Art & Design, College of Engineering, LSA, Athletics, UM-Dearborn, the Stephen M. Ross School of Business, UMHS Ambulatory Care, and Architecture, Engineering, and Construction, as well as a number of others.
Based on feedback from these units, as well as a benchmarking survey of other Big Ten universities, the formal bid limit has been raised from $5,000 to $10,000. The single-transaction limit for P-Card purchases will remain at $5,000.
“While the bid limit is now higher, units can always request that the Procurement Services Department conduct a formal bid, regardless of the dollar amount. Units should continue their efforts to obtain the best value for the university when making purchases,” Anderson said.
Units can also choose to establish a lower dollar threshold for their bids, whether they’re conducted at the local level or through the Procurement Services Department. The Procurement Services Department will continue to serve as the exclusive signatory for all vendor contracts with the university.
Other significant enhancements or additions to the new Procurement SPG include:
• If a P-Card is used to make a purchase from a supplier that uses a payment system like PayPal or Google Wallet, a detailed receipt must be obtained.
• Updated IT security and privacy requirements.
• Every actual or potential conflict of interest must be disclosed in writing.
• Procurement Services must formally pre-approve all communications with outside parties regarding procurement relationships.
• Any vendor helping to prepare bid documents cannot bid unless an exception is granted by Procurement Services.
• University employees involved in proposal evaluations or contract activities may be required to sign a confidentiality agreement, a conflict of interest disclosure or both.
“Creating this new Procurement SPG was really a collective effort that involved a number of dedicated employees from across the university,” said Anderson. “And on behalf of Procurement Services, I want to thank them for helping develop an SPG that offers a fair amount of flexibility at the unit level while enhancing protection of the university’s resources.”