5.058 Purchase Order Issuance

Purpose: University Financial Policy No. 1201 authorizes the Director of Procurement and Payment Services to formulate procedures for efficient and responsible conduct of procurement. This procedure will provide instructions for the processing of University Purchase Requests to result in the issuance of University Purchase Orders on a consistent basis throughout the University.



5.0581. Delegation of Authority. Authority to bind the University through the purchasing process is delegated to individuals with titles: Buyer, Cross-functional Buyer (as authorized in writing by the Director of Purchasing), Purchasing Manager, Assistant Director of Purchasing, Associate Director of Purchasing, and Procurement Director as designated by the Director of a Procurement Center specified in University Financial Policy 1201.

5.0582. Purchase Authorization. Purchase authorization shall be in the standard printed form of a centrally issued University Purchase Order for all purchases that exceed the total amount of $500.00.

5.0583. Method of Purchase Order Issuance. All purchase orders shall be issued as a computer transaction authorized by an individual, identified under DELEGATION OF AUTHORITY (5.0581) of this procedure, using the University Accounts Payable/Purchase Order (APS/PO) System. The Purchase Order document shall be produced through the Purchasing module of the APS/PO System directed by the Administrative Information Systems Group. Authorized input of any data entry person under the supervision of an individual having DELEGATION OF AUTHORITY (5.0581) may be used to produce a Purchase Order. The “Buyer” authorization code for the authorized individual shall represent the approval authority to issue the Purchase Order.

5.0584. Release of Purchase Order. All University Purchase Orders produced as described in 5.0583 above, will be transmitted to Procurement and Payment Services and will be issued to the Vendors in hard copy document form, FAX copy form, or other electronic media from Procurement and Payment Services.  Procurement and Payment Services reserves the right and responsibility to release, suspend release, cancel, modify or alter the language and content of any University Purchase Order, if in the judgment of the Director of Procurement and Payment Services or his delegated representative, the Purchase Order does not meet the procedural requirements of the procurement process, or otherwise is not in the best interests of the University to issue.

5.0585. Requisition and Purchase Order. The University of Chicago PURCHASE REQUEST, Purchasing Form 100 must be used as the source of information for data entry. The standard University Purchase Order document (C250) will be issued by the Administrative Information System Group.

5.0586. Dollar Limit Authorization. A University Purchase Order may be issued by any individual designated in DELEGATION OF AUTHORITY (5.0581) for dollar amounts up to $24,999.99. A University Purchase Order of $25,000.00 and above must have the prior signature approval on the requisition of the Assistant Director of Procurement and Payment Services, the Associate Director of Purchasing, the Procurement Director of a Procurement Center (as limited by University Financial Policy 1201), the Director of Procurement and Payment Services, or a delegated procurement agent of the University as provided for in other Policies of the University.

5.0587. Purchase Item Selection. A University Purchase Order will be issued for approved items requested by faculty or staff of the University as presented to a Buyer on the PURCHASE REQUEST form. Items should be adequately described on the front side of the PURCHASE REQUEST so that the information entered into the computer will give the supplying vendor a complete and accurate description on the final Purchase Order document received. Clarity and attention to detail are the responsibility of the Buyer authorizing the Purchase Order. Items are to be selected for maximum functional requirements while seeking the minimum acceptable standards necessary to achieve quality of product and availability for delivery.

Market Research. The selection process, or market research effort, is a shared responsibility of the requesting individual and the Buyer. Both parties contribute to the information gathering process that leads to the complete preparation of the PURCHASE REQUEST, FORM 100. Information gathered related to the suppliers queried and the prices quoted must be written on the back side of the requisition in the “RECORD OF PURCHASE” section. This information may be gathered verbally, documented and signed by the market researcher (Buyer or otherwise) for a University Purchase Order that has a total dollar amount of less than $5,000.00.

Request for Quotation. For a University Purchase Order of $5,000.00 or more, the market research data gathered must be written supplier pricing as a response to a written Request for Quotation. The document format of a Request for Quotation used by any Buyer must be approved by the Purchasing Department prior to the solicitation if the format is other than the standard Purchasing Department form number (PFRFQ-1094). The completed written documentation basis for a Purchase Order of $5,000.00 and above shall be stapled to the PURCHASE REQUEST to Complete Purchase Request Form 100] and forwarded to the Purchasing Department to be received no later than three working days after the data entry action that issues the University Purchase Order.

5.0588. Purchase Price Analysis. Documented Price analysis is a review and examination by the Buyer of the prices proposed by suppliers to determine that for equal or alternate equivalent items they are fair and reasonable. This analysis may be weighted to favor the availability of desired functional features of the items. If the lowest offered price for an item does not result in the final selection of that item because of additional needed functional attributed at a higher price, that decision to expend an additional amount should be noted by the buyer, with explanation in sufficient detail appropriate to the dollar level of the expenditure.

Price Analysis. Required documentation shall include at least one of the following methods of price analysis in order to show that the final price is fair and reasonable:

  1. Price competition by quotation occurs when quotation offer from two or more acceptable offers can be concluded to be fair and reasonable.
  2. Copies of Catalog prices or published price list may be used as documentation of fair pricing when there has only been one acceptable offer received.
  3. Prior Price Quotation. A copy of a previous price quotation from an identical item purchase less than 90 days previous to the evaluation date shows price reasonableness, if the previous purchase was subjected to price analysis.
  4. Sales to others documentation such as a copy of the suppliers invoice of sales to others when a supplier does not publish a price list or catalog of items, by comparison to the current offer will show price reasonableness.
  5. Price information from a sole source supplier that does not publish prices of items, may be shown to be fair and reasonable if the supplier completes a Certificate of Commercial Pricing document form which is available from the University Purchasing Department.

5.0589. Required Documentation. Failure to submit the documentation necessary to justify a procurement action for Purchase Orders of $5,000.00 and above may result in cancellation by Procurement and Payment Services of an issued University Purchase Order.