Purchasing (including Policy and Regulations)
The leadership for the purchasing of goods and services at the University of Toronto is primarily the responsibility of Procurement Services. Authority to make most purchases below $25,000 per transaction is delegated to departments, within the guidelines set out by Procurement Services.
The overriding objective is to acquire goods and services in a manner that results in the best overall value to the University.
The primary approach in meeting this goal for high value purchases and institutional supply agreements is the selection of suppliers through an open, competitive, and non-discriminatory process. Therefore, once qualified suppliers have been identified, competitive bids are sought by invited tenders or written quotations. Outline agreements are negotiated with suppliers to give all University units optimal procurement terms.
Cost Effective Purchasing
The Purchasing Process
Cost Effective Purchasing
Cost effective purchasing involves making the best use of administrative resources to carry out this function. The role of Procurement Services is to direct the strategic purchasing activities of the University by providing leadership in procurement functions. Procurement Services negotiates procurement arrangements with suppliers and enters into outline agreements with these suppliers so that all departments benefit from the full purchasing power of the University.
Departments and divisions can make purchases up to $24,999.99 directly with suppliers. Purchase orders are not required for purchases under $5,000. Procurement Services recommends uSOURCE or the Purchasing Card for lower value purchases.
Buying centres are certified by the Chief Financial Officer on the recommendation of Procurement Services. Buying centres are staffed with qualified purchasing staff, and have authority to purchase goods and services with a higher dollar limit ($300,000), involving a higher degree of specialization and/or complexity.
1. General Policy Objectives
The University of Toronto must maintain high legal, ethical, managerial, and professional standards in the management of the resources entrusted to it as a publicly and privately funded institution. We must ensure that goods and services are acquired in a manner that ensures the University:
- obtains value for money by incurring the lowest cost in the fulfillment of specified needs with appropriate levels of quality and service;
- uses a fair and open process when calling for, receiving, and evaluating quotations and tenders;
- meets its statutory, legal and ethical obligations in the acquisition of goods and services by purchase or lease; and
- employs trained staff skilled in purchasing techniques including negotiating, contractual terms and conditions, cost reduction techniques, and cooperative buying processes.
As an “In Scope Recipient” of funding from the Ministry of Training, Colleges and Universities, the University must follow the standards and metrics of the Ontario Broader Public Sector (BPS) Procurement Directive (issued April 1, 2011). The University has adopted the Supply Chain Code of Ethics as required by the BPS Procurement Directives. See the Procurement Code of Ethics on the Procurement website.
2. Purchasing Principles
Goods and services shall be acquired according to the following principles:
- Planning – Goods and services should be acquired after consideration of needs, alternatives, timing, and availability of funds.
- Sourcing – The process by which suppliers compete for University business shall be open, fair, consistent, and non-discriminatory.
- Purchasing – Goods and services shall be acquired competitively from qualified suppliers to meet specified needs and to achieve the best value for money expended.
- Accountability – Approvals shall be obtained and documentation shall be retained for review and auditing.
3. Scope and Policy Application
This policy governs the acquisition of goods and services, by purchase or lease, with University funds from all sources including the operating, research, capital and ancillary funds and all other funds held in trust or at its disposal. Procurement Services has overall responsibility for administering this policy under the general direction of the Chief Financial Officer.
4. Purchasing authority and process
Goods and services shall be acquired according to the following principles:
All purchases require a purchase order or a written agreement, except for purchases of $4,999.99 * or less, or in rare situations where the Chief Financial Officer or the Director of Procurement Services approves an exemption.
* Note that any amounts in this policy are before taxes and refer to the total value of the package / group / bundle of goods being purchased over the scope of a project. It is NOT acceptable to split the purchase into small parcels in order to avoid obtaining quotations or avoid using an approved supplier (e.g. splitting a purchase of six pieces of equipment with a total value of $27,000 into six purchases of $4,500 each).
Purchases up to $4,999.99
When the purchase is up to $4,999.99 there is no requirement for a purchase order, though the department has the option of issuing a departmental purchase order. It is recommended that purchases less than $5,000 should be made through uSOURCE. Use of the departmental purchasing card is also recommended. Placing an order with a vendor and requesting an invoice for payment is permitted but not recommended where uSOURCE or the purchasing card may be used (see certified invoices). Vendor quotations are not a requirement.
Purchases from $5,000 to $24.999.99
When the purchase is $5,000 to $24,999.99, at least two quotations shall be obtained. Quotations must be attached to a copy of the purchase order and kept on file by the department. Oral quotations are accepted, but not recommended. Any notes relevant to the oral quotation such as date received, vendor contact, and terms and conditions must also be kept on file for future reference. Upon vendor selection, a purchase order is issued by the appropriate person in the department or Buying Centre. Note that if a department uses uSOURCE, no quotations are required within this purchase threshold. Contact Procurement Services for additional information or direction.
Purchases from $25,000 to $99,999.99
Goods or services $25,000 and higher are considered high value purchases and therefore require a minimum of three written quotations. Note that if a department uses uSOURCE, no quotations are required within this purchase threshold. Departments are responsible for issuing a written invitation to suppliers requesting quotations (which could be a request for quotation or a request for proposal). All suppliers must receive an identical invitation. Upon vendor selection, your department must enter a purchase requisition into FIS, and send all documentation to Procurement Services where it is reviewed and a purchase order created. Your purchase order will automatically print on your departmental printer – it is not necessary to request a fax copy. For departments at U of T Mississauga and U of T Scarborough, please forward the appropriate documentation to your respective Buying Centre. In some instances, the nature of your purchase may require the issuance of a request for proposal. Please contact Procurement Services, or your buying centre, if you require assistance in determining the appropriate method of procurement for high value purchases.
Purchases $100,000 and above
Procurement transactions for goods, services, construction and renovations of this value require an open public competition (often generically called a Request for Proposal (RFP). Contact Procurement Services for assistance with transactions of this magnitude. Due to the nature of purchases in this category, you should allow sufficient time to gather the information required to create the tendering document’s specifications, as well as time to post this tender on a public tendering board allowing sufficient time for vendors to create their responses. Purchase orders of this value can only be issued by the U of T Mississauga Buying Centre, U of T Scarborough Buying Centre or Procurement Services.
Purchases under Contract
Additional competitive quotations and tenders are not required for goods or services where there exists a contract that was executed following the purchasing policy.
Competitive quotations and tenders are not required for goods or services where:
- the only supplier is a department, agency, or utility of the federal, provincial, regional, or municipal government;
- a regulatory authority has approved the price or rate; or
- the purchase is for media advertising time or space.
Where the acquisition of scientific equipment of a highly specialized nature is available from only one supplier, one quotation is acceptable provided the acquisition of such equipment from that supplier without competitive quotations is approved by a Principal, Dean, or Vice-Dean of Research (or equivalent). For a complete listing of sole sourcing criteria, see Non-Competitive Procurement.
The Chief Financial Officer or the Director of Procurement Services must approve all other exceptions to the requirements for quotations and tendering.
5. Consulting Services
The BPS Procurement Directive provides the following definitions for consultants/consulting services:
“Consultant” means a person or entity that under an agreement, other than an employment agreement, provides expert or strategic advice and related services for consideration and decision-making.
“Consulting Services” means the provision of expertise or strategic advice that is presented for consideration and decision-making.
If a person/firm you are contracting provides expertise or strategic advice that you use to assist in decision making, then they would fit the definition of a consultant. You then must get 3 quotations for any amount of services if you anticipate the fees to be less than $100,000, or go through a full RFP process if you anticipate the fees going beyond that amount over the entire scope of the project.
Please note that purchasing policy has been updated to include the BPS Expenses Directive, which clearly indicates that you must also ensure that under no circumstances can food, beverage, gratuities, laundry, dry cleaning and personal telephone calls be itemized and paid as part of any contract between the University and a consultant or separately reimbursed. Business related travel and accommodation expenses must be pre-approved and written into the contract.
Refer to Employee versus Contractor / Taxation of Payments for guidance in determining whether payments to an individual are considered employment or non-employment in nature.
Presidential Authorization – The Ontario BPS Procurement Directive provides the provision for the President to authorize a non-competed consulting contract. It should be noted that Presidential authorization does not rectify the non-compliance of the contract. Therefore, it is not a recommended practise. Contact Procurement Services for advice if considering this process.
Contracts over $1,000,000 – For consulting contracts above $1,000,000, Business Board authorization is required.
6. Professional Services
Professional services are the services provided by licensed engineers, architects, land surveyors, lawyers, veterinarians, dentists, pharmacists, nurses and medical doctors. The Directive has a provision that allows us to use these professional services non-competitively (i.e. not requiring quotes or issue RFPs.) However, we now must have documentation each time we contract one of these professional services under this provision. This documentation can be achieved by selecting the “licensed professional” condition in the sole source form and having both the sponsor and one-up signoff.
For additional clarification, care must be exercised when using professional services. When you use a professional service through the licensed professional provision, they must not perform functions that fit the definition of a consultant. If they do, then they are, as defined by the Provincial Directive, consultants. You must then obtain quotes or go through an RFP for that service as required for the contracting of consultants.
7. Conflict of Interest
University employees are governed by policies on conflict of interest which prohibit the acceptance of gifts in any form from suppliers doing business with, or soliciting business from, the University. Refer to Policy on Conflict of Interest – Academic Staff, Policy on Conflict of Interest – Librarians, or the Human Resources and Equity web site for conflict of interest policies for other employee groups.
8. Personal Acquisitions
The use of University procurement processes or resources for the purchase of personal items or services is not permitted under any circumstances. The use of the University’s identity for personal reasons is also not permitted.
The Purchasing Process
“The Purchasing Cycle at the University of Toronto – Understanding the components and the process…” is a document which provides an overview of the Purchasing cycle at the University of Toronto, and provides useful links to relevant sections in this Guide as well as the Procurement Services website.
In addition, see “How to Purchase Goods & Services” on the Procurement Services website for both graphical and table versions of purchasing policy transaction levels and authorities for the purchasing of goods and services.
Last revision: January 14, 2013