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Section 6: Small Purchases


As outlined in Utah System of Higher Education (USHE), R571-6.5.1, Small Purchases, Utah State University has established a small purchase limit of $100,000. Small Purchases include Purchase Cards (P-Card), Requests for Quotations (RFQ), Small-dollar Purchase Orders, Reimbursements, and Petty Cash.

Purchasing and Contract Services may prescribe the proper method for purchasing any item going forward. Employees will follow the purchasing method prescribed.  

USHE R571-6.5.2.1 requires rules governing low-dollar transactions and the Code of Federal Regulations, 2 CFR 200.6, Micro-Purchases set a limit at $5,000. Utah State University adopts the $5,000 dollars as the low dollar limit. Purchasing and Contract Services encourages employees authorized to expend funds to follow Federal Regulations to “equitably” distribute micro-purchases among qualified suppliers.

Utah State University standard purchasing methods are P-Card and EZ-Buy process and in rare instances reimbursements. Personnel will find P-Card and EZ-Buy procedures, rules, and training on the Purchasing and Contract Services web site.

University employees shall use and foster fair, ethical, and legal trade practices to maximize the value of a procurement that promotes public trust in Utah State University and the system of higher education.  Individuals must discharge their duties impartially to assure fair competitive access to procurement.

Barter/trade is a system of exchange by which goods or services are directly exchanged for other goods or services without using money. If engaging in barter/trade, personnel shall follow Utah State University procurement policy and procedures regarding fair, open competition, transparency etc… as outlined herein. They shall follow these steps;

1.      Offer barter/trade to all procurement parties,

2.      Fully disclose the fair market value of the transaction in writing.

3.      Record the transaction as though it was conducted using currency.

Quid pro quo means one thing in return for another or something that is given or taken in return for something else; substitute. To avoid the “appearance of impropriety” and maintain ethical, impartial and transparent procurement processes, Utah State University regards the use of “quid pro quo” as barter or trade.

 

University employees shall use standard procurement processes as outlined in Table 1 – Low Dollar & Small Purchases.

Table 1

In seeking competition when practicable, Purchasing and Contract Services may solicit quotes from two or more vendors.

(1) Requests for Quote may include a wide range of information, including:

(i)  availability of a procurement item;

(ii) delivery schedules;

(iii) industry standards and practices;

(iv)  product specifications;

(v)   training;

(vi)  new technologies;

(vii) cost and quantity discounts,

(viii) capabilities of potential providers of a procurement item; and

(ix)   alternate solutions.

(2) Requests for Quote shall:

(A) state the period of time during which Quotes will be accepted,

(B) describe the manner in which the Quote shall be submitted – phone, fax, or email.

(3) Purchasing and Contract Services may select or reject the Quotes rendered.

(1) When purchases are between $5,000 - $100,000 USD (this includes multiple purchases for similar items or services):

(A) Employees will utilize Purchasing and Contract Services in the process and

(B) Purchasing and Contract Services may use Quotes, Bids, or RFPs.

(2) When purchases exceed $100,000 USD, Purchasing and Contract Services will obtain either Bids or RFPs.

(1) Violations of Utah State University Policy 529 and this procedure are subject to University disciplinary action up to and including termination and may be subject to other penalties under Utah State code.   

(2) It is against Utah State Policy and procedures for a person to intentionally or knowingly divide a procurement into one or more smaller procurements with the intent to make a procurement qualify as a low dollar or small purchase, if, before dividing the procurement, it would not have qualified as a low dollar or small purchase.

(3) It is  prohibited for a low-dollar or small purchase procurement to do any of the following with the intent or knowledge to divide a procurement event – including:

(A) making two or more separate purchases;

(B) dividing an invoice or purchase order into two or more invoices or purchase orders; or

(C) making smaller purchases over a period of time.

(4) Violations related to small purchases should be reported in a timely manner to the Director of Purchasing and Contract Services or Utah State University’s Controller.

(1) A person who divides a small purchase is guilty of:

(A) a felony of the second degree if the total value of the divided procurements is $1,000,000 or more;

(B) a felony of the third degree if the total value of the divided procurements is $250,000 or more, but less than $1,000,000;

(C) a class A misdemeanor if the total value of the divided procurements is $100,000 or more, but less than $250,000; or

(D) a class B misdemeanor if the total value of the divided procurements is less than $100,000.