The University of Chicago

Financial Services

  

Policy of Procurement and Engagement of Services

The University of Chicago has authorized in accordance with University Policy 1201 that the Director of Procurement and Payment Services, (the "Director") and Associate Vice President for Finance (the "Associate Vice President for Finance") will establish, formulate, publish, maintain and interpret policies and procedures to be followed by all Procurement Centers of the University in order to provide for the efficient and responsible conduct of all University procurement and disbursement activities.

Therefore, the following Policy of Procurement and Engagement of Services (the "POLICY") is set forth to instruct and inform all faculty, staff and employees in the manner of conduct and understandings for procurement and related service activities.

1. AUTHORITY

1.0 All authority to commit, acquire or engage the services from any individual, business concern or other institution providing goods and services to, or on behalf of the University, shall be pursuant to the empowered authority of the title of agent designated by the University, or, represented by a written directive of delegation of authority. Empowered authority shall be so stated and be qualified in University policies or other statements of responsibility issued by an officer of the University. Delegation of procurement authority will be a written document issued by the Director and shall contain specific responsibilities, limits of commitment and execution authority, and, be established for a specific period of time. Such delegations will not be expandable and will not allow for further levels or limits of delegation to others.

1.1 The Executive Vice President for Administration and Chief Financial Officer has final signature approval for all purchases of goods, services, and rental/lease agreements in excess of $200,000.00 or in excess of those specific commitment levels enumerated in other policies of the University.

1.2 The University recognizes that many out-of-pocket expenditures by employees for goods and services occur at times as described in statement 9 of this POLICY. In accordance with statement 5 of University Policy 1201, the authority of any employee to incur any obligation or make any commitment not to exceed $500.00 on behalf of the University for the purchase of goods, services or equipment is hereby recognized. This authority relates to the acquisition of goods, services or equipment whose total amount does not exceed $500.00, and also makes no commitment of a continuing period of multiple event occurrences or stream of services each having chargeable events totaling less than $500.00. An employee is so empowered to act in this manner provided that such action does not conflict with, be contrary to, or circumvent this POLICY or other University Policies and Procedures or Directives issued for and on behalf of the interests of the University. This empowerment of employee authority applies when acting for business purposes of the University and does not extend to acquisitions or services for personal use. No employee is empowered to act as agent or contracting representative of the University under this paragraph of authority.

1.3 Any letter of intent, negotiation memoranda, letter contract or contract or agreement award notice must have the prior written approval of the Director, the Associate Vice President for Finance or the Office of Legal Counsel before use and/or release.

1.4 Any procurement or engagement of services performed for the interests of students of the University, students served by the University, or with funding specifically dedicated to student services as approved by University policies elsewhere shall be authorized by the Office of Student Activities and be in compliance with this POLICY. Students are authorized to use forms, processes, or benefit from agreements of the University if provided for in such agreements and performed in the conduct of business specified in the agreement and described in Preferred Supplier Contracts released by the Director. Departments may expend funds under this POLICY for the benefit of schools, divisions or special programs in the service of students and recover revenues to replace such funds under policies, guidelines and directives issued by the Associate Vice President for Finance.

1.5 Any procurement or engagement of services performed relative to a contract between the University and other institutions for Grants and Contracts administered by the University shall be authorized by the Associate Vice President for Research, or designated representative of the Office of Research Administration. Thereafter, the process of procurement or engagement of services shall follow this POLICY in the conduct of business.

1.6 Signature authority executed on any contract shall be that of an officer delegated by the President of the University, special authority assigned by the Board of Trustees in its by-laws, directives or actions, the Associate Vice President for Finance, the Director of Procurement and Payment Services, and specified individuals recorded and sustained by written delegation of authority as provided in this POLICY.

2. MARKET RESEARCH

2.0 The right to perform and engage in market research for goods and services is encouraged of all University faculty, staff and employees. Market research will be performed by procurement personnel of the University if the initiator chooses not to be involved in this aspect of procurement. The authorized acquisition action in solicitation, negotiation, commitment, purchase, or engagement of services is reserved by authority as described in statement 1 of this POLICY. Market research is defined as the information gathering from potential suppliers of estimated price, product description, features, mechanisms, operational characteristics, specifications and availability or manner of performance of goods, equipment or services that pursue the identification of, or solutions to, the needs of an employee of the University.

2.1 No employees other than members of the Office of Legal Counsel or the Department of Risk Management are to perform market research, solicitations, retain or commit to engage individuals or firms for legal services or contracts for insurance, indemnity, bonding or surety products. No employee other than the Director, Associate Vice President for Finance or the Office of Legal Counsel is to engage in discussions or negotiations for property, rental / lease of space arrangements or discussions related to properties of the University and their operations. No employees other than the Executive Vice President for Administration and Chief Financial Officer or Associate Vice President for Finance shall engage, negotiate or commit to professional services for accounting, auditing or banking, trust or money management services. No employee other than members of the Investment Office are to enter into market research, have charge of the investment of University owned or controlled funds, purchase, manage, sell or dispose of investments and investment properties, including real estate properties, and related insurance, taxes, legal matters, and collections for investments. Procurement or engagement of services requests arising out of business transactions of the University which originate with employees other than those provided for in this statement 2.1 of the POLICY shall be addressed by the Director or Associate Vice President for Finance to the Office of Legal Counsel for review, comment and instructions as to how to proceed. This Policy shall not preclude the Director of Procurement and Payment Services or appropriate Procurement and Payment Services staff from engaging in procurement activities excluded of employees in this paragraph whenever so requested by the President, the General Counsel, Executive Vice President for Administration and Chief Financial Officer or the Associate Vice President for Finance.

2.2 Market research of non-budgeted funding of equipment, materials or capital assets shall be under the authority of the Director or Associate Vice President for Finance. No employee is to solicit funding from an external source in the activities related to information gathering as allowed by Paragraph 2.0 of this POLICY. When such funding is necessary, the Director or Associate Vice President for Finance will confirm in writing that a University internal loan for funding is not available or appropriate the procurement before any external source activity is begun.

3. CONTRACTS

3.0 To assure that the University is entitled to all protections under the Uniform Commercial Code all procurement commitments in excess of $5,000.00 should be evidenced by a written document (purchase order, agreement, independent contractor agreement, license, or other University document of standard terms and conditions for conducting business). Some commitments, even for less than $5,000.00, may involve serious legal or financial risks, and in those cases the responsible person of procurement authority should also require a written contract. Recurring purchases, even for less than $5,000.00, should be evidenced by a University agreement even though the individual releases under the agreement may fall under the $5,000.00 exemption.

The University, through the offices of Purchasing and Payment Services, will from time to time establish contracts, agreements, business relationships, and affiliations with business entities and others which will constitute the University's Contract Listing (UCL) for the exclusive benefit and use of the University and its affiliations whose funding is committed and disbursed by the University. The nature of the contracts, the announcement of their application, use and limits, is the responsibility of the Director and the Associate Vice President for Finance. All University faculty, staff and employees are required to review the UCL prior to seeking market research, acquiring goods or services under individual authority, or preparing request for procurement of goods or services. The efficient and responsible conduct of business necessitates cooperation in the procurement activity of goods and services from firms which have contracted with the University for its needs and requirements. Contracts are established to be the recommended source of goods or services. Contracts and written agreements include specific conduct of business whereby the University is legally bound in both its understanding and actions with suppliers. Some contracts and agreements may have restrictive conditions, limits on the goods or services entitled to the University, and dollar or volume threshold limits contained within the understandings of the contract or agreement and shall therefore be explained or clarified in the published Preferred Supplier Contract or the directives issued for its use. All procurement and engagement of services of the University are subject to existing contracts and agreements which therefore necessitate employee involvement and knowledgeable behavior in business matters.

3.0.1 Purchase Agreements are University contracts issued to provide convenient sources of supply under the standard business terms and conditions of the University and in the open market. Purchase Orders may be issued up to the small dollar procurement threshold and are established to meet the price reasonableness standards adhered to for this dollar threshold (see statement 7 of this POLICY). Purchase Orders above the small dollar procurement threshold may be made by comparative competition of Purchase Agreements or documentation of a particular supplier as justification of sole source. Price analysis of goods or services for this higher threshold and basis of decision may be required if such analysis was not performed at the time when the Purchase Agreement was issued because the agreement anticipated the small dollar threshold level would not be exceeded.

3.0.2 Qualified Agreements are University contracts issued pursuant to the requirements for competition in source of supply as documented in accordance with Federal regulation, or, may have been issued based upon documented justification of sole source manner acceptable for non-competition situations. These agreements are recommended sources for the acquisition of specific goods or services. Procurement dollar thresholds for acquisitions up to $200,000.00 are allowed when so stipulated at other dollar thresholds in a Preferred Supplier Contract when these agreements are referenced in the transaction record.

3.0.2.1 Manufacturer Negotiated Agreements are University contracts entered into by the University directly with the manufacturer of a product, without the involvement of a supplier or distributor. The University enters into these agreements when the desired products are not otherwise available from a competitive source offering terms and conditions as favorable as those offered by the manufacturer directly. In entering into a Manufacturer Negotiated Agreement, the University must assure itself that the manufacturer's terms and conditions do not include unacceptable commercial trade terms of the sort customarily extended by manufacturers to distributors. A Manufacturer Negotiated Agreement may result from noncompetitive negotiations with the manufacturer or from a competitive solicitation of several manufacturers having similar products required by the University that are not equivalent based upon a manufacturer's unique specifications of its products. Manufacturer Negotiated Agreements shall be considered Qualified Agreements for purposes of the nomenclature and procurement procedures of the University.

3.0.3 Preferred Agreements are University contracts with special or unique benefits to both the University and the supplier whereby the University agrees to exercise direction, discretion and control to make all best efforts to rely on the contracted supplier for all of its acquisition requirements. All procurement dollar thresholds for acquisitions are allowed.

3.0.4 Exclusive Agreements are University contracts that restrict the source of supply to the named supplier for all procurement or engagement of services. All procurement dollar thresholds for acquisitions are allowed.

3.0.5 Revenue Agreements are University contracts which involve a revenue source to the University, offset pricing by returned commissions or rebates, or involve the development of a product or service which may ultimately cause the University to benefit in payments, royalties, provisions for no-cost goods or services, or have a significant financial funding relationship to the University, and shall be solicited and executed by the Director or the Associate Vice President for Finance. Revenue Agreements include any supplier agreement which allows for the resale of products or services to the University, its students, and the general public. If a Revenue Agreement is a resale agreement that anticipates taxable sales to students or the public the operation of such agreement will be allowed only if the University has an established relationship with the State of Illinois and the City of Chicago permitting the conduct of business as a commercial enterprise of the University. Operations under revenue agreements for resale may be excluded from competitive requirements of the University if the procurements are primarily for enterprise sales to the general public. No revenue or value relationship revenue agreement or contract for trial, evaluation, testing or analysis may be issued or executed unless reviewed and authorized by the Director or the Associate Vice President for Finance. Any contract for trial, evaluation, testing or analysis not related to procurement or the engagement of services authorized by policy of the University or powers authorized elsewhere in University policies, by-laws, actions of the Board of Trustees, the President, the Provost, and others as authorized by the University are hereby excluded from this Paragraph of this POLICY. All payments of revenue to the University are to be made payable to the Associate Vice President for Finance, The University of Chicago. All non-revenue agreements or contracts that cause suppliers to perform or provide for the provisions of no-cost goods or services to the University as a requirement of the agreement or contract shall require a written report to the Director of the occurrence and manner for agreement or contract fulfillment within thirty days of the delivery or action by the supplier unless the agreement or contract specifically states reporting times that are different. No employee, department or division of the University may establish operations, understandings, agreements or contracts which permit revenue or credits to be generated for budget purposes between budget centers of the University in exchange for goods or services, including inventory and resale operations using recharge methods, without the prior written permission of the Associate Vice President for Finance.

3.0.6 Contracts or Agreements for construction, renovation, design, engineering, remodeling, or trade labor services require signature review and approval of the University Architect prior to the authorization of work to proceed in accordance with the direction of the University Architect. The University Architect may assign representative supervision to project managers and other individuals employed under the direct supervision of the Director, Facilities Services. The standard form of contracts or agreements under this paragraph shall be issued for use by the Director and the Associate Vice President for Finance. No standard form shall be modified or replaced unless changes, modifications, additions to form, content or purpose are approved by the Risk Management Department and the Office of Legal Counsel. Management of standard agreement forms and record of changes to form shall be the responsibility of the Director of Purchasing and Payment Services in accordance with directives from the Office of Legal Counsel. The Director of Purchasing and Payment Services, shall receive from the University Architect or supervisory employees assigned to a project, the request(s) for changes to contract or agreement form and the Director shall proceed to report with or without concurrence to the Associate Vice President for Finance, and CFO, if required, any requests for standard agreement form changes, deviations or discrepancies which may need review and approval relative to the established directives of the Office of Legal Counsel.

3.0.7 Independent Contractor Agreements are University contracts for the engagement of services from an independent contractor whose services are subject to the standard terms and conditions in a business relationship with the University. No independent contractor may be engaged at any dollar level unless an agreement of independent contractor services has been jointly executed by the independent contractor and an authorized procurement agent of the University. See statement 10.7 of this POLICY for requirements and payments of this engagement of services.

3.0.8 Maintenance Agreements are University contracts with an outside agency to maintain service or upgrade a system over a period of time.

3.0.9 Lease Agreements (Equipment) are University contracts covering the lease or rental of equipment such as vehicles, computers, or scientific equipment. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.

3.0.10 Lease Agreements (Space) are University contracts for the lease or rental of office storage, garage, land or other space. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.

3.0.11 License Agreements are University contracts relating to the licensing of a product. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.

3.0.12 Professional Services Agreements are University contracts relating to consulting, presenters, entertainers, or other professional service relationships. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.

3.1 All contracts and agreements of any kind pursuant to which the University agrees in any way to insure or indemnify any individual, association, corporation or other organization or to release any individual, association, corporation or organization from liability to the University must be in accordance with the policies, practices and procedures established and published by the Risk Management Department and the Office of Legal Counsel. Any contract that does not include the standard terms and conditions which insure and indemnify the University must have its terms reviewed by the Office of Legal Counsel. Any contract for any amount for goods or services which is not in accordance with the University standard terms and conditions such that the University is to indemnify the Supplier must be approved for the University by the signature authorization of the CFO.

3.2 Contract modifications may pertain to initial contracts or modifications to existing contracts. Since modifications of contracts often produce disputes, it is required of all University procurement authorities to evidence all modifications by appropriate documentation which will be recorded with the Director, the Associate Vice President for Finance, or the Office of Legal Counsel. All University employees are specifically requested to avoid oral commitments, changes to commitments, and cancellation or termination of commitments that are not evidenced by a written document either in the initial contract with the supplier or in any modification thereof.

4. PROCEDURES

4.0 Procedures for the conduct of business in relation to procurement and engagement of services, the forms and procurement systems to be used, and the best practices to be following for operations shall be published from time to time as the Manual for Buyers / Contract Specialists, the University Procurement Guidelines, the Local Business Center Manual, the Directives for Procurement, the University Travel Guidelines, the University Procurement Operations Manual, and other publications, guidelines, Policy or directives as approved by the Director.

4.1 Emergencies will occur requiring purchased materials, supplies, services, equipment, etc., to be ordered, purchased, or authorized to rectify the situation. Emergencies cannot be predicted. However, when they occur, the University must provide service and support commensurate with the emergency. Actions that relate to the procurement of goods or services for an emergency must be reported within seventy-two hours to the Director or the Associate Vice President for Finance. Directives as to how to proceed in compensating the suppliers who assisted the University during the emergency will be processed under a case by case analysis depending upon the emergency and its related actions. The individual who requested emergency goods or services shall be responsible to provide information and explanations to support the obligations incurred by the University during the emergency.

5. CONFIDENTIALITY

5.0 Information related to procurement and engagement of services is matter of a confidential nature and the private business of the University. Contracts, agreements and business relationships of the University and activities related to the same are corporate relationships bound in legal understandings which prohibit public disclosure. No compilation, summation, synopsis or other presentation of business facts or trends of the University are to be released to individuals or organization outside of the University without the expressed permission of the Director, the Associate Vice President for Finance, the Office of Legal Counsel, or the President of the University. Additionally, any suggested modifications by individuals acting as agents of the University to gain modification to, or avoidance of, the written understandings of the contracts, agreements or business relationships is strictly prohibited. Requests for the use of information related to University business, its contractual arrangements and interpretations of same should be referred to the Director or the Associate Vice President for Finance. Statement 5 of this POLICY hereby defines the specific Guideline 1 of University Personnel Policy, Section U601.01, Treatment of Confidential Information, to include the subjects of this POLICY and related business conduct in the examples of confidential matters for the University.

6. CONFLICT OF INTERESTS

6.0 All employees of the University whose actions include the authorization of transaction processes in procurement and the engagement of services occurring at the level above $5,000 are required to complete written statements relative to conflict of interests on an annual basis. Such statements and related procedural instructions shall be managed by the Director under direction of the Office of Legal Counsel in accordance with University policies.

6.1 Gratuities are not to be accepted from any supplier. Any willful cooperation in gratuity acceptance for favorable personal benefit by any faculty, staff or employee of the University shall be considered serious matter relative to disciplinary procedure of the University as provided for in policies elsewhere beyond this POLICY.

6.2 Any solicitation of contributions, donations, gifts, gratuities, revenue, or value commitments to the University shall be made and managed by the University Office of Development and Alumni Relations. No employee is to engage in or negotiate for such solicitations without specific authority of the Board of Trustees, the President, the Provost or the Executive Vice President for Administration and Chief Financial Officer. No employee of the University shall allow for contributions, donations, gifts, gratuities, favors, tangible benefits, revenue, or other commitments of significant value to the University or to any employee personally to influence any business transaction decision in information gathering, recommendations to procure or engage services, or support by favorable or unfavorable recommendation the products or services of any supplier.

7. COMPLIANCE WITH FEDERAL REGULATION

7.0 The University is obligated to conduct its business operations in compliance with federal regulations for procurement standards, relative to written procedures, consistent application of policy, price reasonableness and cost analysis requirements documentation, and the requirement that no commitment of funds shall be made unless, as stated in OMB A-110 §40, "such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal Law and Executive Orders."

7.1 Section 45, A-110, requires that "Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action."

7.2 The University "small dollar procurement threshold" is established at $25,000.00 and below. Procurement documentation for this threshold shall be performed and controlled to demonstrate that the prices for goods or services requested are fair and reasonable as determined by informal assessment of readily available open market pricing information in published form, telephone quotations of price and availability, price comparisons to recent open market purchases, or, by professional, academic or administrative current market knowledge and expertise in the industry or market related to the acquisition. Such price reasonableness analysis may be certified by the employee who gathered the information or initiated the request of acquisition. Documentation will be the completion of the "RECORD OF PURCHASE" form provided on the reverse side of the University Purchase Request or "University Departmental Purchase Order or any automated procurement system method authorized by the Director or Associate Vice President for Finance." Such documentation shall serve as the procurement file for the small dollar procurement threshold. If the small dollar amount of procurement is $5,000.00 or less, no written documentation of price reasonableness is required, and the signature of the initiator in the procurement process shall serve to substantiate that informal price analysis as presented by the price shown on the requisition or order document has been determined elsewhere or by other means.

7.3 Expenditures that exceed $25,000.00 are subject to competition (in accordance with federal regulations), demonstration of price and cost analysis, and, documented for procurement files in the analysis format presented on the "Purchase Summary and Justification" form issued by the Director, or similar documentation in other media which represents the identical presentation of this documentation process. This analysis will not be required for expenditures that are determined to occur within the small dollar procurement threshold after competition has been performed.

8. PROCUREMENT PROCESSES

8.0 Procurement documents, workflow process, computer and other automation or electronic systems which support such processes, financial reporting on business information related to procurements, and business correspondence for and on behalf of the University in procurement matters are the management responsibility of the Director and the Associate Vice President for Finance . No employee is authorized to interpret the use or meaning of language in documents, modification of processes, or release of information regarding the University procurement process other than the Director or the Associate Vice President for Finance . This POLICY and changes to the POLICY from time to time will constitute the processes for procurement to be followed, adhered to and referenced for the conduct of business of the University.

9. REIMBURSEMENTS TO EMPLOYEES AND OTHERS

9.0 The University reserves the right to reimburse, delay reimbursement pending additional information or clarification, or decline reimbursement based upon determination that the items purchased, the dollar amount of reimbursement request, the manner of acquisition, or other factors may not be in accord with University policies, this POLICY, or procedures and directives for procurement and engagement of services on behalf of the University.

9.1 Expenditures for up to $500.00 made by an employee for University purposes will be reimbursed following submission of documentation which describes the goods, equipment or services that were obtained, the location of delivery of the goods or the party for which the services were performed, and appropriate evidence that payment was made to the supplier. An explanation of the purpose for the expenditure and the financial account number which is to be charged for this reimbursement is required within the documentation submitted. Explanation can be provided in allowable space on standard University forms issued for this purpose, or, may be contained in attached memos of explanation if further elaboration of explanation would be helpful to describe the need, urgency or availability circumstances related to the expenditures.

9.2 Expenditures for any amount made by a non-employee of the University on behalf of the academic or business purposes of the University may be reimbursed provided that an employee of the University submits the request for reimbursement along with explanation and documentation as required of an employee in the above paragraph of this POLICY.

9.3 It is not the intention of this POLICY to encourage employees to make out-of-pocket expenditures on a routine basis. Repeated purchases of identical goods or services should be arranged for in regular business planning to avoid the need for out-of-pocket expenses, inconveniences related to the time involved in such activity, and potential additional costs to the University in procurement of goods in services which may be more effectively obtained through Purchasing and Payment Services and other procurement centers of the University.

9.4 Reimbursements for travel expenses for employees are made in accordance with University Policy 1202: Travel Policy and Procedures for activities related to University business. All faculty, staff and employees are to be aware of the University Travel Policy and should anticipate that reimbursement will be processed in compliance with the policy. In accordance with Federal Internal Revenue Service (IRS) Policy the expenses related to travel, advance payments to employees prior to travel that are not reconciled within six months, and the use or unexplained purpose of certain expenditures related to travel and related entertainment expenses, may involve other personal income events which occur and will be included in reported taxable income to an employee if IRS regulations presented by Policy 1202 are not adhered to in this process. See statement 4. PROCEDURES of this POLICY and consult the procedures related to travel expenses for guidelines.

9.5 Reimbursements for travel expenses for non-employees shall be made in accordance with the same principles and compliance requirements that University employees are required to follow.

9.6 Reimbursements to petty-cash operations authorized by the Associate Vice President for Finance shall be made in accordance with procedures established and published by the Associate Vice President for Finance. No petty-cash operation is authorized to act contrary to or circumvent this POLICY, University Policies, or any procedures published through statement 4. PROCEDURES of this POLICY.

10. PAYMENTS

10.0 The University will pay for materials after completion of services as required or delivery of goods. If the University must agree to progress payments, any payments or progress payment schedules must be approved by the Director or the Associate Vice President for Finance prior to the commitment or agreement to the payment or progress payment schedule. When progress payments are called for in a commitment or agreement there must be a requirement that the supplier will certify completion, or scheduled partial completion, through one of its officers, credit agents, or by proof of delivery, that the work for which the progress payment is sought has been performed with satisfactory proof that all material and labor costs incurred were fully paid or discharged, or the supplier has confirmation of accepted delivery, to the satisfaction of the University, as represented by the designated receiving agent specified in the commitment or agreement. No faculty, staff or employee of the University may withhold documentation (receiving report, invoice, change order information, written understandings, etc.) which pertains to a dispute, or potential dispute, with a supplier, thereby delaying payment to the supplier for goods or services provided by the supplier under good faith efforts and in conformity with order or other agreement between the University and the supplier. All faculty, staff and employees are required to submit payment related documentation within five days to enable the Associate Vice President for Finance to avoid legal and financial risk in supplier relations, as well as, potential deterioration of the University's financial and credit worthiness standing in the business community.

10.1 The University's standard terms of payment will be Net 45, unless otherwise agreed to by agreement, contract or invoice offered payment terms more favorable to the University. This standard term shall mean the net dollar value payment of the supplier's invoice will be processed in a manner to provide delivery of payment check to arrive at the supplier's location approximately 45 days after receipt of goods or receipt of invoice, whichever was received later by the University. Prompt payment terms (invoice offered discount payment terms) for early payment will be accepted and made if payment is approved for processing prior to the standard University term of payment and the approved invoice is received at least four days prior to the prompt payment ending term date. Payment terms for the University will be determined in Directives from the Director or the Associate Vice President for Finance, or may be negotiated during contract, agreement or solicitation processes. The Associate Vice President for Finance will apply all credit memos for the University to the current indebtedness of the University to a supplier. Appropriate credits will be issued to financial accounts as related to credit memos. No employee other than the Associate Vice President for Finance is to act in reference to a credit memo application for University business.

10.2 Ownership of title to equipment, property and goods shall be contained in, and conveyed through, all understandings of approved invoices, or related orders, agreements and contracts, such that the University receives unencumbered rights for payments rendered. If payment documentation does not clearly provide for ownership as previously described the recipient of the invoice should contact the Director, Associate Vice President for Finance or University Office of Legal Counsel for advice regarding how to proceed with the obligation. Warranty and guarantees to which the University is entitled shall also be conveyed and named to the benefit of the University. Any contractor to the University shall properly convey property free and clear of all liens, claims and encumbrances arising from the performance of the Work by the contractor or its subcontractors in terms and conditions expressed in standard University contracts, or through exceptions addressed in statement 3.0.6 of this POLICY. Payments which do not conform to these ownership conditions will not be made until further satisfactory explanation is provided to the Associate Vice President for Finance.

10.3 Disputed invoices are to be sent to the Director with explanation of any unsatisfactory conditions prior to any action by faculty, staff or employees with the supplier. Disputed invoices should be forwarded to the attention of the Director within seven days of invoice receipt, or within seven days of receipt of unsatisfactory goods, or within seven days of incomplete services as determined by the agreed upon final services date. Failure to notify the Director may compromise efforts in dispute resolution if payment was rendered to the supplier in accordance with the invoice, the purchase or service order, the agreement, the contract or other valid documentation which allows for payment given that no disputed invoices were noticed to the supplier.

10.4 Invoices and credit memos issued by the University to suppliers, clients of the University, and others shall be the exclusive responsibility of the Associate Vice President for Finance. All faculty, staff and employees who provide goods, services or valued assets of any business nature to outside business entities are to request invoice or credit memo transactions through the Associate Vice President for Finance.

10.5 Invoices for direct payments may be submitted to the Associate Vice President for Finance as a result of procurement of goods or services without an agreement, contract, purchase order or any other form of previous written commitment which have become obligations of the University under statement 1.2 of this POLICY and have not been paid directly by the employee. These payments will be made by the Associate Vice President for Finance based upon original invoice documentation provided as an attachment to a Check Request (DPV) which has been prepared by the employee, along with funding identified and approved by a financial account administrator for the budget account to be expensed. Any Check Request (DPV) for an amount exceeding the maximum allowed by statement 1.2 of this POLICY requires the additional procurement documentation as described in statement 7.0 of this POLICY, as well as explanations or documents which may be required in other University Policies, Procedures or Directives to support the transaction.

10.6 Payment of invoices related to purchase orders of the University shall be made in accordance with the standard terms and conditions of purchase stated in the Supplement to Purchase Order, the terms of conditions of agreement or contract which supersede the terms of the purchase order, or under a process of electronic data interchange (EDI) mutually agreed upon by the University and the supplier.

10.7 Payments to independent contractors will be made pursuant to the written agreement or contract between the independent contractor and the University. Independent contractors shall not be entitled to any compensation other than specified in the agreement or contract, nor shall the independent contractor be entitled to any benefits that would otherwise accrue if the independent contractor were an employee of the University. The independent contractor by its relationship to the University has accepted full and complete responsibility for filing all tax returns and paying all taxes which may be required or due for payments received from the University under the terms and conditions of the agreement or contract and no modification to this responsibility is allowed. The independent contractor is fully and totally responsible for expenses incurred while completing performance in accordance with the terms and conditions of the agreement or contract. The University may withhold or deny payment if the terms and conditions of the agreement or contract are not complied with or the scope of services are not delivered or performed, however, no employee may direct the independent contractor in the manner or process to be performed as a qualification, limitation or control upon the independent contractor as a basis of payment approval. Payment requests or invoices must reference the independent contractor agreement or contract, or the purchase order authorizing the payment for services. Payments to independent contractors may be made through the Check Request (DPV)) process if documents supporting the independent contractor relationship are adequate as determined by the Associate Vice President for Finance.


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