Equipment, Products and Services (continued)

11. Requesting and Evaluating an Invitation to Tender and Accepting a Tender

Where a formal invitation to tender process is required to be undertaken you must contact the Procurement Division for assistance. The relevant Procurement Advisor will work with you to explain and agree/confirm the process and assist in putting together the necessary documentation.

The Procurement Division will lead in the administration of the process; assist you with the formal tender assessment and evaluation; undertake the administration of the Contract Award Decision process and arrange for the Contract to be signed by an authorised representative of the University.

The evaluation of the Tenders will take into account the aspects referred to in section 8 but this will be formalised into more specific Award Criteria which will form the basis of the Contract Award Decision.

Please note that tender processes governed by the Public Contracts Regulations have specific minimum time scales associated with them. It is therefore essential that you plan any procurement that is subject to a competitive tender process and in particular those captured by the Regulations and allow adequate time in your overall planning for the receipt of the equipment, products or services to accommodate the tendering process.

 

12.Protecting Cardholder Data (PCI DSS)

PCI DSS (Payment Card Industry Data Security Standards) is concerned with protecting our customer cardholder data and is a requirement of our Merchant Services Agreement. Therefore when procuring new software the University must ensure the system and processes are compliant before implementing otherwise we risk losing our compliant status and could incur fines and other penalties.

Where a new system (or process) involves cardholder data it is your responsibility to contact the PCI Team at; pcidss@contacts.bham.ac.uk, which must be done prior to procuring software to seek advice on how to proceed.

Please be aware that as a matter of course, Procurement will refer all software services that involve accepting monies to the Income Processing section for their review. Should PCI DSS compliance be affected the University cannot approve a requisition or commence a tender process until approval to continue has been issued from the PCI Team.

Therefore, key things that need to be considered within a contract of any size would be;

  • Does this involve accepting money? For example, a new till or system that links to the internet to accept online payments?
  • If the answer is “yes” this needs to be highlighted with the PCI Team to confirm if this is acceptable and compliant, or requires a review prior to awarding a contract.


13. Raising a Requisition

Most Colleges require that Requisitions are raised setting out the details of the propose purchase, these are then sent to the College Finance Office for the Purchase Order to be created. Details of the Requisitioning process used by your College can be obtained from the College Finance Office.

The University has an E-Marketplace in operation, this allows for many suppliers and products to be available to the University via a full E-Catalogue, The University is keen to get as many routine products as possible purchased via the E-Marketplace as a £37.00 per order saving can be claimed for the University via its EMM annual returns. The link to the list of suppliers on the marketplace is: https://intranet.birmingham.ac.uk/finance/documents/public/Current-suppliers.pdf

The link to the training materials is:

https://intranet.birmingham.ac.uk/finance/fs-tutorials/Marketplace/marketplace-requisitioning.aspx

 

The training video to use the E-Marketplace can be found at; http://www.download.bham.ac.uk/finance/the%20requisitioner_demo.htm

14. Creating the Purchase Order 

Where possible, individual officers should use suppliers already set up on the PROACTIS system. This saves considerable time as setting up new suppliers requires several additional checks to meet Audit requirements. Also constantly creating new suppliers makes the database gradually unmanageable and then requires a “clean down”, therefore using where possible existing suppliers (or if this cannot be achieved use a Purchasing Card) will help to keep the supplier database at a manageable level.

All purchasing transactions undertaken on behalf of the University with the exception of those undertaken using the University Purchasing Card (see section 18) must have a Purchase Order and Purchase Order number as previously noted under no circumstances should you make any sort of commitment unless and until a Purchase Order has been authorised/signed by an authorised person.

The University uses an electronic Purchase Order Processing system (Proactis) and there are generally at least two levels of Purchase Order authorisation within Colleges and Corporate Services – the person responsible for Budgetary Control and Management within the College and then the person responsible for creating and issuing the Purchase Order (which is usually a person in the College or Corporate Services Department Finance Office).

Where the value of a Purchase Order exceeds £25,000 ex-VAT in value it is also routed to the Procurement Division for further authorisation. Once authorised electronically by the Procurement Division, the Purchase Order must be printed off locally and sent to the Procurement Division together with all relevant documentation to enable a Contract to be negotiated (see section 8).

If you do not have a valid account code it will not be possible to create the Purchase Order and you will not be able to progress the transaction.

If the supplier is not an Approved Supplier or is not set up or available for use on Proactis you will need to request that a new supplier record is created or that the supplier record is activated.

Generally the College/Corporate Services Departmental Finance Office will assist with this or undertake to administer this process.

Further details on the process for requesting and setting up a New Supplier and re-activating a Supplier record can be found at: http://www.birmingham.ac.uk/forms/finance/newsupplierform.aspx

It is important to ensure that the full and complete information is included on any Purchase Order issued by the University whether by electronic media or in paper format.

 

15. Who can make Commitments and sign Purchase Orders and Contracts?

For purposes of probity and to maintain standards of governance (and to ensure that those involved in the expenditure of University funds are protected) the Financial Rules require that at least two people are involved in the purchasing process. This is generally the person that generates the demand/raises the Requisition and the person that creates and signs off the Purchase Order.

There are generally three ways in which a commitment to purchase can be made:

  • Using the University Purchasing Card; there are a limited number of these Cards allocated to each College and only the individual named on the Purchasing Card can make commitments and undertake transactions using the Card, however, the University is now promoting this as the preferred method for small ad hoc requirements (see section 18);
  • Issuing a Purchase Order; each College/Corporate Services Department will have staff that are authorised to authorise expenditure against certain Budget Codes but this is authorisation to commit the spend, it is not authority to authorise and sign the Order. Purchase Orders up to a certain value can be authorised and signed within the College/Corporate Services Department, further information on who has the relevant authority within each College/Corporate Services Department can be obtained from the College/Corporate Services Departmental Finance Office. However, any Purchase Order where the value exceeds £25,000 ex-VAT will be routed by the Proactis system to the Procurement Division for authorisation and, unless otherwise advised by the Procurement Division, must be sent to the Procurement Division for signature before any commitment is made;
  • Signing a Contract; the University’s Financial Rules require that all contracts for the purchase of products and services should be signed by the Director of Finance or delegated authority. Currently that authority has been delegated to the Procurement Division. All contracts for the purchase of equipment, products and services where the value is in excess of £25,000 ex-VAT must be sent to the Procurement Division for review and signature. For contracts below £25,000 ex-VAT, if signing on suppliers terms and conditions you may wish to consider contacting the Procurement Division for advice on the terms and conditions prior to placing an order.

Purchase Orders are optional where the purchase is being processed using the Purchasing Card, but a Purchase Order must be issued where a contract is being signed to ensure that payment can be properly processed.

 

16. Claiming VAT Zero Rating or VAT Exemption

The VAT regime within which the University operates is complex and advice should initially be sought from your College or Corporate Services Departmental Finance Office if you are contemplating claiming that a purchase is VAT zero rated or VAT exempt (and this is equally important if you are putting together a bid for a research grant). Expert advice is available from the Finance Office; Treasury Management Team (the University’s VAT Advisor is Carol Norfolk – extn 46076, email: C.Norfolk@bham.ac.uk).

Further information on VAT can be found at: https://intranet.birmingham.ac.uk/finance/vat/index.aspx

Key points to note regarding VAT are:

  • specific certificates have to be completed for VAT zero rated purchases on an Order by Order basis – “blanket” zero rated certificates are not currently recognised or accepted by HMRC (the relevant forms are available on the Proactis system and are completed as part of the Purchase Order process). Signed hard copy certificates are required as HMRC does not currently accept electronic documents;
  • VAT is payable on purchases made from overseas (and this may be in addition to Duty). For the EU and some purchases outside of the EU the VAT will be “reverse charged” that is the VAT has to be “collected” by the University rather than the supplier on behalf of HMRC. This is achieved by the University “charging itself” and accounting for the VAT in that manner – even in these cases if VAT relief is being sought then the relevant certificates have to be completed;17
  • for the majority of purchases made from countries outside the EU, VAT (and Duty if applicable) is paid at port of entry to the UK and goods will not be released until VAT and Duty has been paid;
  • there are substantial penalties that HMRC can apply if the University “gets it wrong” and in some cases there is personal liability, hence it is essential to do everything possible to apply VAT correctly.

 

[Equipment, products and services continued...]