A Requisition is not a legally binding document. A requisition is the recognition of a need for a good or service within a department. Approval of a requisition by a budget holder is the agreement that the need should be satisfied and that the budgeted funds are available. The approved requisition is an authorization to theProcurement Services group to purchase the specified materials or services.
The Purchase Order or the fully executed contract is the document that legally binds the university. A purchase order or fully executed contract is the purchaser's offer to purchase and authorization used to formalize a purchase transaction with a supplier.
After-the Fact (ATF) purchases happen when university departments order goods or services directly from a supplier without issuing a requisition or using a p-card. This results in delayed or rejected payment to the supplier. ATF purchases violate Pennsylvania procurement law, cause embarrassment, and frustrate suppliers. They can be avoided by planning purchases in advance and involving Procurement Services prior to any order placement.
No contract can be implemented or any supplies, services, or construction be accepted or work begun on any contract not processed, executed, and approved by legal counsel.
Emergency Contracts are permissible in circumstances that are a threat to public health, safety, and welfare.
- Where possible, discuss with University Legal Counsel.
- Two bids are required.
- Work can begin before the legal process is completed; however, the legal approval process is still required.
Dollar Limits
- $0.00 Service Contracts, MOUs, and LOAs require University Legal approval.
- $5,000.01 For Service Contracts, requires University Legal approval.
- $10,000.01 Requires approval by University Finance.
- $20,600.01 Requires Advertising and Bid process.
- $20,000.01 For Service Contracts, requires the Office of Attorney General approval.
- $500,000.01 For Service Contracts, requires the Office of General Counsel approval.
Sole Source implies that there is only one person or company that can provide the contractual services needed. A bid process would result in that one person or company able to meet the need.
- The maximum time period for a contract is five years, unless prior approval is received from the Chancellor's Office.
Prohibited Contracts
- Employee/employer relationships
- Contracts for the purchase of insurance. An exception to the rule is collision insurance for rental vehicles.
- Attorney services
Prohibited Contract Clauses
- Assignment: No assignment without the prior written consent of the university.
- Legal Jurisdiction: The laws of the Commonwealth of Pennsylvania must govern.
- Attorney Fees, Court Costs, Entry of Judgment: The university may not voluntarily pay the contractor's court costs or legal fees, nor may it allow a contractor to confess judgment on its behalf.
- Indemnity and Hold Harmless: Removed from every Commonwealth contract because it compromises the greatest protection afforded the Commonwealth entities: sovereign immunity.
- Arbitration: Resolution of disputes by binding arbitration in contracts for goods and servicesis prohibited. The Board of Claims has exclusive jurisdiction.
- Payment in Advance: Prohibited except as justified in writing.
- Purchase of Insurance: State System of Higher Education universities may not purchase insurance. Vehicle rentals are an exception.
- Labor and Industry approval must be obtained for the addition or movement of utilities. Permits take an average of eight weeks to obtain. When purchasing new equipment, Engineering and Construction should be notified.
- IUP Logos must be approved by the Division of Marketing and Communications PRIOR to order placement.
- Miscellaneous:
- Memorandum of Understanding (MOU): Agreement between IUP and other state agencies. Must be reviewed by University Legal Counsel.
- Letter of Understanding (LOU): An agreement between Pennsylvania State System schools. It is not a contract and cannot take the appearance of a contract. Must be issued by Procurement Services and approved by University Legal Counsel.