Purchase Orders


10.02     Purchase Orders                                                                                Updated: January 10, 2002

1.     Definitions

        All purchases from outside vendors must be done through the issuance of a Purchase Order. A
        Purchase Order (PO) is an official order placed by the Purchasing Office to an outside vendor for
        goods or services. An outside vendor is defined as a provider of goods or services that is external to
        the University.

2.     Conflict of Interest Limitations

        Budget Heads may not authorize a purchase from a business owned by them or their family
        members. This does not preclude employees’ or their relatives’ businesses from providing goods or
        services to the University, but does mean that the selection of the vendor must be made by an
        appropriate unrelated official at the University. Questions regarding this should be directed to the
        Purchasing Agent.

3.     Initiation

        3.1    A PO is initiated with a properly completed Purchase Requisition (PR) submitted to the
                Purchasing Office.

         3.2   A PR received by the Purchasing Office will be entered into FAMIS. If the encumbrance entry
                accepts, the PR will be forwarded to the Purchasing Agent for processing; if the entry rejects,
                the PR will be returned to the requesting department for insufficient funds.

4.     The University will utilize the following thresholds for bids when making purchases:

Amount Bid Requirements
$0 – 2,000 No bids required
$2,000.01 – 10,000 Three written bids
(Faxes and e-mails acceptable)
Over $10,000 Sealed written bids.

Exceptions to the bid requirements may be approved by the Purchasing Agent. Allowable
             justifications for exceptions include:

             a.    Emergency Purchases (must also be approved by Vice President for Finance and

          b.    Sole Source Purchases
          c.    State Contract or Catalog Purchases

             Additional bid requirements may be required by the Purchasing Agent if the bids received appear
             too high.

5.     Issuance

        The Purchasing Agent will assign the approved PR to a buyer for processing. The buyer will validate
        the information on the PR, obtain bids (as required), and perform other tasks that may be necessary
        to ensure compliance with State, TAMUS or University rules and regulations. The buyer will then
        prepare and issue the PO. The PO will be mailed and/or faxed to the selected vendor and a copy will
        be forwarded to the requesting department.

6.     Purchase Violations

        Failure by an employee to follow the above procedures constitutes a purchase violation.
        Departments submitting a purchase requisition to Purchasing Office for a good or service already         ordered or received by the requesting department will be subject to the following administrative

        6.1     First Violation

                 If the purchase violation is the department’s first for the fiscal year, the Manager of
                 Procurement Services will issue a letter to the individual who signed the Purchase Requisition,
                 with a copy to the department head (if different than the signer). The letter will remind the
                 employee of the proper procurement procedures and administrative actions to be taken in the
                 event of additional violations. Additionally, a letter will be mailed to the vendor reminding them
                 of the University’s requirement of a Purchase Order for delivery of goods and services.

        6.2     Additional Violations

                  If a department has more than purchase violation in the fiscal year, the department will be
                  required to submit a memorandum to the Vice President for Finance and Administration
                  explaining why the proper procurement procedures were not followed. Based upon the
                  justification provided, the Vice President for Finance and Administration will take action(s)
                 deemed appropriate for the infraction. Possible actions include the following:

                  a.     Issue a warning letter.
                  b.     Issue a letter of reprimand.
c.     Require employee to pay for goods or services.
d.     Revoke budget head authority.

7.     Delivery of Goods or Services

        7.1    All goods delivered to the University should be delivered to the Central Receiving Warehouse,
                where a receiving report will be prepared. Upon determination of the applicable department, the
                goods are delivered as soon as possible. [Note: If the goods are received directly by the
                requesting department, it is responsible for providing proof of delivery to the Accounts Payable

        7.2    All services provided to the University are generally provided to the applicable department. The
                receiving department will provide the Accounts Payable Office with proof of delivery. Often this
                will be a signature on a copy of the invoice. In the case of a personal services contract, it will
                be a memo stating the services were provided.

       7.3     For goods delivered to departments by Central Receiving staff, departments will have 5 days
                from the date received to verify items delivered and report discrepancies. If no discrepancies
                are reported, the invoice will be processed for payment.

8.    Invoices

       8.1     Invoices or billings should be sent directly to the Accounts Payable Office by the vendor, as
                directed on the PO. However, vendors do submit invoices directly to departments at times
                and it is the responsibility of the receiving department to forward the invoice to the Accounts
                Payable Office, along with the requisite proof of delivery.

      8.2     When an invoice is received for an amount greater than the purchase order amount, the Fiscal
               Office will process them if the difference is within 10% or $250 of the purchase order amount. If
               the difference is greater, the requesting department will be required to process a purchase
               requisition for the amount of the difference before the invoice will be processed for payment.

9.    Payment

       The Accounts Payable Office will match the invoice, Purchase Order and Proof of Delivery. The
       absence of any of these documents will delay payment. If all three documents are present, a
       purchase voucher is typed and approved for payment. The purchase voucher is forwarded to the
       Accounting Office for entry into FAMIS, and a check will be generated the following business day
       (subject to statutory limitation of paying bills in less than 30 days). After the check is generated
       and signed, it is mailed to the vendor.

10.    Forms

         Purchase Requisition forms may be purchased from Central Stores.

Contacts:     Encumbrances – Purchasing Office
Purchase Order – Purchasing Office
Vendor – Purchasing Office
Payment – Accounts Payable Office
Delivery of Goods – Central Receiving


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