Procurement Policy

Policy Category: 
Financial
Approved By: 
Board of Governors
Effective Date: 
19 November 1987 [Revised 21 January 2004;15 June 2007;31 March 2012 (Replaced Purchasing Policy), 1 Feb 2013]


1. Rationale  

1.1 Lakehead University procures supplies, equipment and services.
It is the policy of Lakehead University that the procurement of supplies, equipment and services shall be made through a central purchasing authority.  
 
2. Purpose and Scope  
 
2.1  This Policy supports the Supply Chain Code of Ethics of the Government of Ontario by ensuring that Lakehead University engages in sourcing, contracting and procurement activities that are ethical, efficient and accountable.  This Policy and related procedures apply to all members of the University community and to all procurement and supply chain activities.
 
2.2  It is the policy of Lakehead University to adhere to the Ontario Government's Broader Public Sector Procurement Directive and to spend the funds entrusted to it in a cost effective manner.
 
2.3  This will be accomplished by establishing procedures and standards for the sourcing and procurement of products and services in adherence to the mandatory requirements outlined in the Ontario Ministry of Finance's most current edition of the Broader Public Sector Procurement Directive.
 
2.4  Sourcing, contracting, and procurement procedures must be structured to meet all federal and provincial laws that govern competitive bidding practices in Canada, to protect both the University and the individual purchaser from potential liability that could result from a challenge of a contract award, and to ensure a compliance with provincial, national and international trade agreements and other applicable legislative requirements.  
 
2.5 As per Ontario Regulation 191/11 - Integrated Accessibility Standards, Part I, Section 5 designated public sector organizations (i.e. Lakehead University) shall incorporate accessibility criteria and features when procuring or acquiring goods, services or facilities except where it is not practicable to do so. Where it is deemed not practicable to procure or acquire goods, services or facilities that incorporate accessibility criteria and features, the University shall, upon request, provide an explanation.
 
3.Definitions
 
3.1  Supply Chain Code of Ethics: 
 
The Supply Chain Code of Ethics defines acceptable behaviours and standards that should be common for everyone involved in supply chain activities such as planning, purchasing, contracting, logistics and payment.
 
3.2  Broader Public Sector Procurement Directive: 
 
The Broader Public Sector Procurement Directive is a set of standards and procedures that has been prepared to support and improve Broader Public Sector (BPS) supply chain activities. It has two major elements: a supply chain code of ethics and a procurement policies and procedures standard.
 
3.3  Consulting Services:
 
The provision of expertise or strategic advice that is presented for consideration and decision making.  In accordance with Ontario Government's BPS Procurement Directive, under no circumstances can hospitality as defined by the BPS, gratuities, laundry, dry cleaning and personal telephone calls be itemized and paid as part of any contract between the university and a consultant.
 
4.  The Policy
 
4.1   Generally, this policy of procurement through a central authority is intended to apply to the acquisition of all goods and services from suppliers, particularly where competition in the market place may prove to be financially beneficial to the University. Certain items which are mainly of a non-competitive nature such as taxes, utilities, postage and memberships may be excluded from this Policy.   Similarly, certain transactions will be excluded if they have been approved by the Board of Governors, such as those involving real estate. Also excluded are orders placed for books and periodicals by the University Library.
 
4.2  In accordance with Lakehead University's Animal Care Policy, all animal purchases corresponding to approved animal utilization protocols must be ordered through the centralized animal ordering system.  Requests for animals must be submitted to the attention of the Research Ethics and Administration Officer in the Office of Research.  Animals to be used in teaching or research cannot be charged to Purchasing Procurement cards.
 
4.3  Specific authority to issue a purchase order which commits the University is delegated to the Purchasing Manager. This does not prevent the Purchasing Manager from delegating some of his/her responsibilities to members of his/her Department, but at all times the Purchasing Manager remains responsible and accountable for the results.
 
4.4  The Purchasing Department shall attempt to maintain a competitive atmosphere among suppliers and ensure that each is treated fairly and without preference.
 
4.5  Maximum value should be obtained for budgetary expenditures on supplies, equipment and services. The lowest priced product will be purchased provided quality, service, delivery and other relevant factors are deemed equal to those of competitive products.
 
4.6  The Purchasing Manager is responsible for sale or disposal of surplus supplies and equipment.
 
4.7  Liability for any purchase made without proper authorization (please see University Approval Authority Policy) falls on the person purchasing and not the University.
 
4.8  All amounts referred to in this policy are exclusive of applicable taxes.
 
4.9  Procurement up to but not exceeding  $5,000 - Any one item, or an accumulation of items not exceeding  $5,000 in value may be purchased based on the requisitioner's knowledge and experience with the supplier, knowledge of last purchase price or verbal quotation.  Procurement up to $5,000 should be made on the LU Purchasing Card.  Please refer to the Purchasing Card Program Procedures Guide which is part of this Policy.  In the event that a supplier requires a Purchase Order (hereinafter "PO") to be issued, the requisitioning department should obtain a quotation, and forward the quotation plus any other original documentation to the Purchasing Department, prior to the issuance of a PO.
 
4.10  The Purchasing Manager is authorized to purchase in the open market, goods and contractual services provided such purchases have been approved in accordance with the University Approval Authority Policy.  PO's to suppliers may be issued by the Purchasing Department on the authority of an approved electronic purchase requisition.
 
4.11  Procurement over $5,000, and up to $100,000 - Any one item, or an accumulation of items over $5,000 but not exceeding $100,000 in value should be purchased on the basis of written competitive quotations from no fewer than three (3) suppliers except in cases where provisions of section 8 below apply.  If the requisitioning department obtains the quotations, all original quotations must be forwarded to the Purchasing Department, prior to the issuance of a PO.
 
4.12  The Purchasing Manager may request that any item or related items be tendered or more quotations be secured by the Purchasing or Requisitioning Department before a PO will be issued.  The Purchasing Manager may also request the posting of tenders electronically and/or in the newspaper when appropriate.
 
5. Deposits and Prepayments
 
5.1  The University does not encourage the use of deposit/prepayments.  This is to ensure that the University is not held at risk, should the supplying vendor fail, or be placed in the position of being the banker.
 
6. Conflict of Interest
 
6.1 A conflict of interest exists with respect to a particular transaction when an employee can make personal gains from an outside interest by their ability to influence dealings for the University or when the impartiality of the employee's business judgment is otherwise inhibited. Consequently, the University as a general rule does not enter into purchasing contracts with students, faculty, and staff or members of their immediate families.  For additional information please refer to Lakehead University's Conflict of Interest Policy (http://policies.lakeheadu.ca/policy.php?pid=36), and the Employee Code of Conduct (http://policies.lakeheadu.ca/policy.php?pid=212).
 
6.2 Acquisitions from a business in which a student, faculty member, staff member or member of their immediate family has an interest are prohibited unless full disclosure of the background facts are presented to the Purchasing Manager. This information is reviewed by the Purchasing Manager for a decision on whether a conflict of interest is present and, if so, what course of action is to be taken.
 
7. Gifts and Gratuities
 
7.1 In serving the interests of the University, no employee shall use his/her authority of office for personal benefit. To preserve the image and integrity of the employee and the University, business gifts other than items of small intrinsic value should not be accepted. Reasonable hospitality is an accepted courtesy of a business relationship. However, the frequency and nature of the gifts or hospitality accepted should not be allowed whereby the recipient might be or might be deemed by others to have been influenced in making a business decision as a consequence of accepting such hospitality or gifts.  Further information can be obtained from sub-section 2.1.4.5 of Lakehead University's Employee Code of Conduct (http://policies.lakeheadu.ca/policy.php?pid=212).
 
8. Non-competitive Procurement - Exceptions to Competitive Pricing - Sole/Single Sourcing
 
8.1 Lakehead University will utilize open competitive process as required and whenever possible to increase the possibility of achieving the greatest value for money.  However, in some specific situations as described in this section, competitive procurement processes may not be reasonable and so may not be required.
 
8.2  Exceptions to Competitive Pricing
 
8.2.1  Sole Sourcing: Acquisition of unique goods or non-consulting services from the only source of supply available in a given market area.
 
8.2.2  Single Sourcing: Acquisition of goods or non-consulting services from one vendor without extending the opportunity to others equally qualified to supply the same goods or services in a given market.  Single sourcing will be used only in narrowly defined circumstances, such as urgent need, necessity to match existing equipment, or difficulty in or impossibility of obtaining three bids.
 
8.3  Circumstances in which sole or single sourcing may be considered must be justified and documented in advance by the requisitioner on the Sole or Single Source Certification Form, (available from the Purchasing Department or online on the Financial Services website under Forms http://finance.lakeheadu.ca/uploads/Single_Source_Certification.pdf).  The Sole or Single Source Certification Form must receive prior approval by the Account Approver and the Account Approver's superior in accordance with Lakehead's Approval Authority Policy.  In the event that the Requestor/Originator and the Account Approver are the same individual, the approval of the superior of the Account Approver's superior will be required in accordance with Lakehead's Approval Authority Policy.
 
8.4  For non-competitive consulting services, the Sole or Single Source Certification Form must receive prior approval in accordance with Lakehead's Approval Authority Policy.  Where the value of the consulting service is less than $1 million the President's approval will be required and where the value is greater than $1 million the approval of the Board of Governors will be required.
 
9. Sustainability
 
9.1 The University will endeavour to support environmentally positive initiatives.  Consideration will be given to products that are proven to have less negative impact on the environment than other products of the same or similar quality.  Development of commodity specifications for construction tenders valued over $10,000 should reference environmental considerations such as reduction, re-use and recycling measures.  The University will always consider environmentally superior product choices in its procurement decisions.
 
10. Emergency Situations
 
10.1 The procedures of this policy are superseded if the matter is one of preserving life/limb or the likelihood of substantial damage to property or equipment.
 
11. Review
 
11.1 The Vice-President (Administration & Finance) will review this policy within five years to ascertain if any amendments are necessary.
 
Competitive Procurement Thresholds
 
Goods, Non-Consulting Services and Construction 
Total Procurement Value 
Means of Procurement 
$0.00 up to $5,000 
Procurement Card (P-Card) 
Greater than $5,000 up to $100,000
Purchase Order required, Invitational competitive procurement process (minimum of 3 suppliers are invited to submit a bid). 
Greater than $100,000
Purchase Order required, Open competitive procurement process via electronic national tendering system (Merx). 
 
 
Consulting Services 
Total Procurement Value 
Means of Procurement 
$0.00 up to $99,999.99 
Purchase Order required, Invitation or open competitive procurement process 
$100,000 and greater 
Purchase Order required, Open competitive procurement process via electronic national tendering system (Merx). 
 
 
Purchasing Card Program
 
PROCEDURES GUIDE
 
The purchasing card program operates as an addendum to the Purchasing Policy.
 
TABLE OF CONTENTS
1. Introduction
2. Getting a Purchasing Card
3. Types of Purchases
4. P-Card Purchases
5. Taxes
6. Statement Reconciliation & Payment
7. Supervisory Approval
8. Dispute Process
9. Cardholder Transfers, Terminations & Cancellations
10. Lost or Stolen Cards
11. Key Contacts
12. Card Acknowledgement Form
13. Instructions to Register with US Bank for Online Access
 
1. Introduction
 
This Purchasing Card Guideline covers the use and administration of the Lakehead University Purchasing Card ("P-card").
 
The program consists of a card issued in both your name and that of Lakehead University.
 
It includes having access to your visa statement via the internet (US Bank Access Online).
 
Policy Objectives
 
To provide a convenient method of procuring and paying for low value goods and services by simplifying the procurement process, reducing paperwork, speeding up vendor payments and empowering faculty and staff.
 
Policy Statement
 
It is the University policy to use purchasing cards for departmental and research procurement and payment of goods and services (within the levels of procurement authority delegated) where it is efficient, economical and operationally feasible to do so. The purchasing card is not to be used for travel and/or hospitality related expenditures.
 
Control of the Card
 
Your card is the property of the issuing financial institution, US Bank Canada
 
Cards are assigned to the cardholder and are not to be loaned to others.
 
All charges will be paid by the University and are to be charged to the account under the control of the cardholder or the budget officer who assigned the card to the cardholder.
 
Cardholders must return their card to the Office of Financial Services if requested by the Purchasing Card Administrator.
 
Personal use or wilful misuse of the card will subject the cardholder to disciplinary action.
 
Responsibility
 
You are responsible for all purchases made with your card and you must produce all supporting documents such as original receipts/invoices and/or proof of the transaction.
 
You must arrange for the statement (with attached documents) to be approved by the next highest level of budget signing authority and to ensure all documents are forwarded to the Purchasing Card Site Coordinator.
 
Research Grants & Contracts
  • For staff reporting to the grantee, the statement is to be approved by the grantee or principal investigator.
  • For the grantee or principal investigator, the statement is to be independently reviewed and approved by the department chair, director or dean (in the case of Business Administration, Forestry and Education). 

2. Getting a Purchasing Card
 
If you need a card, contact the Purchasing Card Site Coordinator in the Office of Financial Services or obtain an application on the Financial Services web page.
 
Authorizations
 
Your supervisor reviews your card application and authorizes the need for a card and the appropriate credit limits.
 
Acknowledgements
 
By signing the Card Acknowledgement Form on the last page of this document, you are acknowledging your understanding of the terms, conditions and regulations regarding the use of the card as defined in these guidelines, and accept responsibility for the card in your possession. The signed acknowledgement will be kept on file in the Office of Financial Services.
 
Receipt of Card
 
You should receive your card within approximately 7-10 working days.
 
The Purchasing Card Site Coordinator will advise you in the use of your card and on using the Access Online Website.
 
Card Activation
 
Sign the back of your card immediately, and keep it in a secure place.
 
Before using your card for the first time, activate it by calling the 1-800 number indicated on the card sticker.
 
 
3. Types of Purchases
 
Use your P-card to purchase and pay for most low dollar value goods and services.
 
Restricted Purchases
 
The card is to be used for purchasing low dollar value supplies and services, but it is not to be used for:
Cash advances
Purchases greater than $5,000
Hazardous chemicals or materials
Contributions to Political Fundraisers
Laboratory or research animals
Leasing or rental of equipment in excess of 60 days
Maintenance contracts/long term agreements
Personal use
Radioactive materials
Salaries, wages or consulting
Vehicle rentals or leasing (use Corporate Travel Card)
 
Card Limits
The card is to be used only for transactions which in total are $5,000 or less (excluding all taxes). A transaction cannot be split into 2 or more transactions to bypass the single transaction dollar limit. The regular purchasing process is to be followed for orders which exceed the $5,000 value.
 
Do NOT exceed the maximum purchase credit limits established for your card. If your monthly limit needs to be reviewed, contact the Purchasing Card Site Coordinator.
 
Types of Cards
In order to better control the types of expenditures that are charged to the Procurement Card three types of cards exist whereby different types of vendors are blocked on each card.
 
Type 1 is the "Standard" card - all airlines, car rentals, hotels, restaurants, travel agencies/services, other travel including cruise lines, Manual/ATM Cash/Courtesy Cheques and Miscellaneous Financial Services are blocked from use by these card holders. The corporate travel card must be used for travel and hospitality related expenditures.
 
Type 2 is the "Administrative Assistant" card - all car rentals, Manual/ATM Cash/Courtesy Cheques and Miscellaneous Financial Services are blocked from use by these card holders. Administrative Assistants need to arrange travel for Visiting Lecturers and recruitment purposes. This type of card can be used to book such travel and will be issued to Administrative Assistants for these purposes only. The corporate travel card must be used for all other travel and hospitality related expenditures.
 
Type 3 is the "Research Field Work" card - all airlines, car rentals, travel agencies/services, other travel including cruise line, Manual/ATM Cash/Courtesy Cheques and Miscellaneous Financial Services are blocked from use by these card holders. This gives the Researcher working in the field for periods greater than one month the ability to charge living type of expenses to the card and have them paid by LU during the time they are in the field and may not be in a position to pay the corporate card. The Manager of Accounting Research is responsible for advising the Purchasing Card Site Coordinator of which Researchers receive the Type 3 card. The corporate travel card must be used for all other travel and hospitality related expenditures.
 
U.S. or International Purchases
 
The card may be used for U.S. or international purchases up to $5,000 equivalent Canadian Dollars providing the cardholder arranges to clear the shipment through Customs. If the cardholder does not wish to clear items through Customs, then the current procedure should be followed where the requisition is prepared and forwarded to Purchasing, who will place the order and arrange to clear the shipment.
 
Government Regulations
 
Government regulations require that all electrical equipment purchased outside of Canada must be C.S.A. (Canadian Standards Association) and/or Electrical Safety Authority approved and marked accordingly. Some acceptable markings are ULC and CUL.
 
4. P-card Purchases
 
You can use your P-card to make purchases in person, by phone, on-line, mail or fax.
 
Supplier Instructions
 
Contact the supplier directly, and arrange for purchase and delivery to required location.
 
Instruct the supplier:
  • to send a receipt or packing slip directly to you and NOT to Accounts Payable
  • on how to ship the goods
 
Returning Goods
 
You are responsible for the return of goods, and for obtaining a credit against your card number.
 
Do NOT accept a cash refund.
 
Declined Transaction
 
If a transaction is declined, you should contact the US Bank Commercial Card Centre at 1-800-588-8065 to determine the reason.
 
5. Taxes
 
Items purchased with your P-card anywhere in Canada should normally include applicable sales taxes.
 
The amount of sales tax shown on your statement is calculated by the software based on the total price and province of vendor.
 
6. Statement Reconciliation & Payment
 
The cycle cut-off date is the 27th of each month. Shortly after, you will have access to your electronic statement identifying all purchases posted to the previous billing cycle. Your electronic statement will be available one day after the cycle date; however, if the cycle date falls on a weekend or a holiday, your statement will cycle on the next working day and your statement will therefore be available one day after the program cycles.
 
You have until the last business day of the month (i.e. a January statement will be due on the last day of February) to complete the verification, reallocation and reconciliation process and to forward the statement to the Office of Financial Services
 
Statement Reconciliation
As part of the statement reconciliation process, you are responsible for verifying the completeness and accuracy of the statement as follows:
 
  • verify that all transactions listed on the statement are valid;
  • update as necessary, any account codes
  • attach supporting documentation & receipts for each transaction 
  • Finally, sign the Cardholder Statement, forward to your immediate supervisor for signature and forward to the Purchasing Card Site Coordinator .
7. Supervisory Approval
 
As part of the statement reconciliation process, your immediate supervisor is responsible to sign your monthly Purchasing Card Cardholder Statement acknowledging the review and approval of all your expenditures during the past billing cycle.
 
The supervisory approval of expenditures is a primary control essential to the success of the Purchasing Card program.
 
Under no circumstances may an employee approve his/her own statement.
 
8. Dispute Process
 
In the event that an item on the activity statement does not agree with your records and/or receipts, contact the supplier immediately to resolve the difference.
 
If a credit is required, and the supplier agrees to credit your account, make note that the credit is still pending resolution.
 
If the supplier does NOT agree that an error has been made:
 
  • Notify US Bank Visa Customer Service immediately at 1-800-588-8065; confirm the notification by fax and advise the Purchasing Card Site Coordinator.

The amount of the next invoice will be reduced by the amount of the disputed item until the question is resolved.
 
Disputed charges must be identified in writing to the bank within 60 days of the statement date. Disputes will then be resolved by the bank within 90 days.
 
9. Cardholder Transfers, Terminations & Cancellations
 
Transfers
 
If you are transferred to another department please contact the Purchasing Card Site Coordinator.
 
Terminations & Cancellations
 
If you terminate, retire or wish to cancel your card, send your card to your immediate supervisor. Your supervisor is responsible to collect your card, cut it in half, and send it to the Purchasing Card Administrator.
 
Leave of Absence
 
If you are taking a leave of absence, send your card to your immediate supervisor. Your Purchasing Card Administrator will decide whether to cancel your card or to de-activate it.
 
10. Lost or Stolen Cards
 
If your card is lost or has been stolen (or you suspect it is lost or stolen):
 
  • notify US Bank Visa Emergency Card Replacement  immediately at 1-800-588-8067;
  • and advise the Purchasing Card Site Coordinator.

Upon receipt of your call, further use of your card will be blocked. Prompt action in these circumstances can reduce the University's liability for fraudulent charges. A replacement card will be issued directly to you as soon as possible.
 
Liability
 
The University is liable for all debt up to a maximum of $50.00 resulting from the loss or theft of your card before the time you contact the bank.
 
The University is NOT liable for any debt resulting from the loss or theft of your card after the time you contact the bank.
 
11. Key Contacts
 
US Bank Visa Commercial Card Centre:
Lost/Stolen Reporting
1-800-588-8067
Emergency service is provided 24 hours per day, 365 days a year as follows:
 
1. to report lost or stolen cards; and
2. to arrange for an emergency card replacement
 
Customer Service:
1-800-588-8065
Normal hours of service are 8:00 am - 8:00 pm E.S.T. for following:
 
1. Resolving problems on any purchases (including dispute process)
2. Answering questions about account balances
3. Activating new cards
 
Lakehead University
Purchasing Card Administrator: Associate Vice-President Financial Services 343-8526
Purchasing Card Site Coordinator: the Administrative Assistant to the Associate Vice-President Financial Services 343-8243
 
12. Card Acknowledgement Form
 
13. Instructions to Register with US Bank for Online Access