Procurement Manual

Describe the procurement process at IEEE.
Describe the Procurement Department organization and responsibilities.
Promote the Procurement Department policy so that the instructions, procedures, and forms contained in the manual are used by all IEEE personnel throughout the procurement process.
Effect steady improvement in the quality of procurement operations.
Ensure compliance with applicable policies regarding the procurement of goods and services for IEEE and its’ related entities.
Identify the role and responsibilities of procurement management.
Serve as an educational resource.
Provide management guidance to facilitate efficient operations and clear communications.
Promote IEEE personnel's understanding of the requirements of various functions within Procurement.
Secure uniformity in the formation and administration of contracts and purchase orders
Establish responsibility and accountability for all parties throughout the contracting and procurement process.

The following aspects of Procurement operations and functions are contained in the manual:

Standard functional guidelines within the procurement functions. The manual provides material on the purchasing, contracting, expediting, and filing procedures of the entire Procurement Department, i.e., Purchasing, Contracts. For the Purchasing and Contracts groups, the manual contains a significant level of detail in the areas mentioned.
Procurement policies and procedures, interface procedures covering support for other departments, and defining relationships between departments is included.
Description of overall responsibilities of Procurement personnel.
Where appropriate, check lists for use by Procurement Manager to note significant procurement functions.
References to applicable material elsewhere in the manual.

Organization of the Manual

The manual is organized into the following sections (the number corresponds to the section):

1. Introduction

Section 1 familiarizes the reader with the manual, and provides an overview of the Procurement Department's function.

2. Policy

Section 2 describes the structure of policies and procedures that apply to Procurement, and to IEEE as a whole, and sets forth in detail the IEEE and the department's position on significant policy issues.

3. Recommended Procurement Procedures

Section 3 contains Procurement instructions on subjects relating to the formation stages for purchase orders and contracts. However, because Procurement handles the execution of contracts differently from the execution of purchase orders, sections 4 and 5 are also applicable to these topics.

Section 2 Policy

Conflict of Interest

Individuals serving the IEEE shall at all times act in a manner consistent with their fiduciary responsibilities to the IEEE and shall exercise particular care that no detriment to the IEEE results from conflicts between their interests and those of the IEEE.

For the purposes of this statement, an individual is considered to have a conflict of interest when the individual, or any of his Family or Associates (i) has an existing or potential financial or other interest which impairs or might appear to impair the individual's independence of judgment in the discharge of responsibilities to the IEEE, or (ii) may receive a material, financial or other benefit from knowledge of information confidential to the IEEE. The "Family" of an individual includes his or her spouse, parents, siblings, children and, if living in the same household, other relatives. An "Associate" of an individual includes any person, trust, organization, or enterprise of, in or with which the individual or any member of his or her Family (i) is a director, officer, employee, member, partner, or trustee, or (ii) has a financial interest that enables him or her, acting alone or in conjunction with others, to exercise control or influence policy significantly, or (iii) has any other material association.

This policy is to be interpreted and applied in a manner that will best serve the interests of the IEEE. If an individual believes that he or she may have a conflict of interest, the individual shall promptly and fully disclose the conflict to the Director of Operations Audit at the Operations Center and shall refrain from participating in any way in the matter to which the conflict relates until the conflict question has been resolved. In some cases, it may be determined that, after full disclosure to those concerned, the IEEE’s interests are best served by participation by the individual despite the conflict.

Code of Ethics

Individuals procuring goods and services on behalf of the IEEE should conduct business in a manner that is consistent with the goals of the IEEE. Procurement activities should be conducted in a professional manner. All qualified suppliers should be given equal opportunity to compete for IEEE business. Procurement decisions should be made on reasonable assessments of quality, service, competitive pricing, and technical qualifications. Efforts should be made to maintain positive and professional relations with suppliers. Business should be conducted in good faith and disputes resolved quickly and equitably. Suppliers doing business with the IEEE should be held to standards promoting sound and ethical business practices. Procurement decisions should be made with integrity and objectivity, free from any personal considerations or benefits.

Equal Employment Opportunity

IEEE fully supports the concept of Equal Employment Opportunity (EEO) and will comply with all applicable laws prohibiting discrimination because of race, gender, religion, creed, color, national origin, age, marital status, sexual orientation, disability, and other characteristics or conditions protected by applicable law. Any employee or supervisor who so discriminates against a supplier can be subject to disciplinary action, including termination.

Business Gifts

Employees of the IEEE are not permitted to receive gifts, favors, services, payments, privileges or special treatment of any kind or nature whatsoever from any individual, enterprise or organization that conducts or seeks to conduct business with the IEEE unless:

They are consistent with good business practices.
They are of a nature that could not be construed as a business inducement.
They are of nominal value (nominal value is defined as not exceeding $50).
They are limited to an annual maximum cap of $300 per enterprise/individual/organization to the IEEE.
Public disclosure of the transaction would not embarrass the IEEE.

Solicitation of gifts, gratuities or entertainment in any form for yourself or your employer is unacceptable. Nominal gifts, defined as supplier offerings of goodwill gestures, or, public relations purposes may be accepted after an evaluation to ensure that the letter and spirit of the above guidelines are being followed. Gifts should never be sent to the employees’ personal address. The employee should log all gifts of any size personally. Gifts exceeding nominal value should be:

• Returned to supplier with a polite explanation.

• Paid back to the supplier at the fair market value of the gift.

• If perishable, shared with employee population (items such as fruit baskets, etc).

When in doubt about “nominal classification” seek direction from a management council member.

Section 3 Recommended Procurement Procedures

Processing Time

Please note that processing times may be shortened if proper supporting documentation is received and procedures are followed however processing time will be delayed when proper supporting documentation is not received.

Process	Approximate Processing Time
Contracts	3 – 8 Business Days; Target 5 Business Days
Quoting	1 – 3 Business Days; Target 2 Business Days
Purchase Requisitions	1 – 5 Business Days; Target 2 Business Days
Supplier Maintenance	1 – 4 Business Days; Target 2 Business Days

Supplier Maintenance in Oracle 11i

A supplier (formerly called vendor) is considered any individual, corporation or organization receiving payment from the IEEE for a refund, expense, reimbursed service or payment for receipt of any merchandise or services rendered. In order to assist the Procurement Department to maintain accurate supplier records, provide which database the add is for (IEEE or Foundation), reason for the request (i.e. refund, expense, award, address change, etc.) and also all information available such as contact name, telephone/fax number, email/website information. When submitting any document to the Procurement Department, be sure to indicate the requestor’s name and contact information somewhere on the form in case there are questions or problems.

Updating Existing Supplier Information

When updating an existing supplier, provide supplier number and member number when applicable and email the Procurement staff at supplieradd@ieee.org. In some cases, a new tax form is required.

Email - Send updated supplier information to the Procurement Department’s email alias at supplieradd@ieee.org
Add/Change Supplier Request Form - Located on the Procurement Department’s website or in the Forms section of this manual. This form can be used to record all changes to be made to the supplier's record in the Oracle database. Upon completion, it is emailed to supplieradd@ieee.org
W8 and W9 Tax Forms - Located on the Procurement Department’s website or in the Forms section of this manual. This form would be completed with appropriate supplier tax record changes and signed by the supplier. Upon completion, it is emailed to supplieradd@ieee.org.

Tax forms are not acceptable via fax when coming directly from the supplier. The originating staff person must submit the supplier’s tax forms to the Procurement Department's email alias at supplieradd@ieee.org. The staff person’s contact information must be on all forms.

Adding New Supplier Information

New Supplier is Requesting a Refund or Expense Reimbursement

In both cases, a W8/W9 tax form is not required. Complete an Add/Change Supplier Request form and email form to supplieradd@ieee.org, along with a the reason for the addition to the database

New Supplier Doing Business with IEEE

A fully executed W8/W9 tax form signed by the supplier (IEEE units should not submit), not an IEEE employee, is required (see the Section entitled “IRS Requirements” below). The reason for the addition is required; if the reason is not provided, the addition will not be added to the Oracle supplier database.

IRS Requirements

Prior to adding a new supplier, the IEEE is required by law to obtain one of the following tax forms:

• W8 form from all nonresident and resident aliens and/or foreign companies

• W9 form from all U.S. persons, companies and government agencies

Although current versions of these tax forms can be found in Section VI of this manual, check our website periodically to obtain updated versions of these forms. Be aware that the check for payment will be made payable to the supplier name provided on their W8/W9 form. All suppliers are required by law to provide their Tax Identification Number (TIN). If a supplier does not provide this required form and number, payments to the supplier will be subject to federal income tax backup withholding. In addition, the supplier may be subject to a penalty imposed by the IRS under section 6723. Depending on the supplier’s “organization type” (individual, corporation, foreign individual, etc.), the applicable Tax Identification Number, which is their Social Security Number (SSN), Employer Identification Number (EIN) or their Individual Tax Identification Number (ITIN), must be provided. The organization type they choose determines this number:

Organization Type	Form Required	EIN	SSN	ITIN
U.S. Individual	W9		X
U.S. Sole Proprietor	W9	X	X
U.S. Partnership	W9	X
U.S. Corporation	W9	X
U.S. Government Agency	W9	X
Foreign Individual	W8			X*
Foreign Company	W8	X*

*If required, see W8 form for further instructions.

Purchase Requisition

The purchase requisition can be used for tracking purchases, providing a record of the order and for comparing items originally ordered with items received and invoiced.

Oracle 11i Electronic Purchase Requisition

The Oracle Purchasing Requisition Form is only available to individuals who have completed the mandatory Staff Learning Center Oracle Class. The Procurement Department recommends that each department have one primary person and a backup person trained to enter the department’s online requisitions and be familiar with Procurement procedures.

Supporting Document Requirements

Most Purchase Requisitions fall within the following categories and appropriate support documentation is required. The documentation must be electronically attached to the Purchase Requisition, then submitted for approvals to the Procurement Department. Requisitions received by the Procurement department lacking appropriate support documentation will not be processed into a Purchase Order and will be returned to the staff person.

Any invoice submitted as supporting documentation for material already received or for completed services or for services that have begun, will be returned to the staff person. The staff person will be directed to forward said invoice(s) to Accounts Payable for payment. Accounts Payable will contact Procurement regularly with lists of frequent offenders of Procurement policy to have an official IEEE Purchase Order to begin business with any supplier.

Type of Requisition / Value of Requisition	Requirements
Value up to $1,000	No requisition is required. Send approved invoice to Accounts Payable or pay approved invoice/authorized items with your PCard. Exceptions: See Computer Related & IC Sections Below
Value between $1001 - $4,999	Requisition required. Requisition description must include supplier’s contact information (contact name, telephone #, e-mail & website address) and quote number. Exceptions: See Computer Related & IC Sections Below
Purchase valued between $5,000 - $24,999	Requisition required and requisition description must include the quote/proposal identification number and description of the items being purchased. In addition, the contract agreement signed by supplier or the proposal/quote with explanation of services/ goods/material must be attached to the Requisition (Procurement highly recommends contracting for services at any value)
Computer Related Purchases at any $$ Value	Requisition required and requisition description must include the quote/proposal identification number, and description of the item being purchased. (If $25,000 and up, following additional requirements below)
Independent Contractor Doing Business with IEEE for Any Value	Completed and fully executed Independent Contractor Agreement (ICA) with a detailed description of proposed cost and service, and updated 'proofs'.
Purchase valued at $25,000 and above*	1. No requisition required, as the Contract Administration department will create a Purchase Order once the below requirements are met. 2. Contract Agreement with Terms and Conditions 3. Writting description or Statement of Work (SOW) from supplier and or price list 4. Complete and fully executed Contract Transmittal Form If a Contract Agreement was not submitted by the supplier, standard contract aggreement templates are available on the Contract Adminstration web site

*A minimum of 3 bids is required for any commitment of $25,000 and above. This information should be included in the Section 6, "Bid Information" of the Contract Transmittal form. The originating department should indicate the basis for the contractor selection, number of bids received and the name and title of the individual who reviewed the bids. If competitive bids were not obtained, a complete explanation is required.

The Procurement Department will contact end-users who have submitted contracts without all the necessary documentation.

Any invoice submitted as supporting documentation for material already received, completed services or services that have begun and the invoice is for payment in full, will be sent back to the requestor & he/she must forward said invoice(s) to Accounts Payable for payment. Accounts Payable will contact Procurement regularly with lists of frequent offenders of Procurement policy to have an official IEEE Purchase Order to begin business with any supplier.

Purchase Order

Other than contracts, the Purchase Order (P.O.) is the only official document authorizing an agreement between IEEE and the supplier. The P.O. is prepared according to the information obtained from the Purchase Requisition.

Guidelines

Purchase Orders are required for all orders over $1,000.00 (the Procurement Card can be used for purchases up to $1K). For a complete current list of all the Purchase Order exceptions please go to the Procurement Department’s website.

Open Purchase Orders

For specific, recurrent services, open purchase orders can be issued. The requisition must indicate a start and ending date with a dollar limitation. All open purchase orders shall be terminated at the end of the calendar year or which ever expires first, date or dollar amounts. The purchase order is then considered “closed” and no further invoices can be applied to that order.

Increases to Existing Purchase Orders

A Purchase Requisition is required to add services to an existing Purchase Order. To continue services on an existing Purchase Orders support documentation from the supplier is required, including reason for increase, revised quote, new end date for project, and necessary amendment documents when applicable.

REASON FOR P.O. Increase	Total Value of PO and Sevices/Material AFTER Increase	Procedures and Required Documentation
Continuing Service with Independent Contractors	With increase amount, the PO remains below $25,000	Oracle Purchase Requisition with the following information: Original PO Number Reason for increase New end date Original PO amount New increase total amount (for approval purposes) Fully executed ICA addendum
Continuing Service with Independent Contractors	With increase amount, the PO will exceed $25,000	No Purchase Requisition. The following must be entered in the Contract Database, and the Contract Administration department will revise the existing PO. In "Brief Description of Service' field enter: Original PO number Reason for increase End Date Fully executed ICA Addendum
Continuing Services	With increase amount, the PO remains under $25,000	Oracle requisition to include the following: Original PO number Reason for increase End date Original PO amount and new increase total amount(for approval purposes) Written description of services(i.e. quote, proposal, SOW), referencing the original agreement
Continuing Services	With increase amount, the PO exceeds $25,000	No Purchase Requisition. Addendum or SOW must be entered in the Contract Database, and the Contract Adminstration department will create the PO. In "Brief Description of Service' field enter: Original IEEE Contract number Original PO number Revised contract total value Reason for increase. Written description of services(i.e. quote, proposal, SOW) referencing the original agreement
Payment Required for Completed Services NOTE: Procurement Manager and AP Supervisor will review which may cause delay in processing*	With Increase amount, the PO remains under $25,000	Oracle Purchase Requisition with the following: Original PO number Reason for Increase, and reason why services were completed before a revised PO was created. New End Date Original PO amount New PO total amount Written description of services from supplier (i.e. quote, proposal, SOW) referencing the original agreement
Payment Required for Completed Services NOTE: Procurement Manager and AP Supervisor will review which may cause delay in processing*	With increase amount the PO exceeds $25,000	Contact contracts@ieee.org with the following: Original PO number Reason for Increase, and reason New End Date Original PO amount New PO total amount Written description of services from supplier (i.e. quote, proposal, SOW) referencing the original agreement

* NOTE: In most cases, Procurement does not increase Purchase Orders for completed services. Forward invoices to Accounts Payable

Distribution

The Procurement Department will mail, email and fax orders to the supplier as indicated on the Purchase Requisition. Any specific instructions should be indicated in the “note to buyer” field on the requisition.

Records

All departments are responsible for managing their own Procurement related records. Electronic records will be kept on the Oracle Database for 7 years. All paper records will be stored in the Procurement Department for one year and then stored at the IEEE off site storage facility for an additional 6 years.

Procurement Card/One Card / Concentration Banking Card

The IEEE Procurement Card is a MasterCard provided by JPMorganChase. The purpose of the Procurement Card is to establish a more efficient, cost-effective method to procure and pay for smaller transactions (equal to or less than $1K), such as office supplies, copying, printing, subscriptions, postage, overnight express and seminars, with a credit card. The Procurement Card will not only eliminate the standard purchase order process for most small orders, it will also significantly reduce the need for Accounts Payable payment requests.

Cards can be issued to an individual or to a department where specific individuals are responsible for the card accounts.

The IEEE One Card includes all the components of the PCard but is geared towards individuals that have a need for a card that can be used for travel and generally has a higher credit line. Any non travel related purchases made on the One Card must abide by the program’s low dollar purchase threshold (currently $1k).

All PCard and/or One Card purchases are initially charged to the cardholder’s default Expenditure Authorization Approval entity, business unit, cost center and the appropriate PCard or One Card prepaid expense account & project code, until they are reviewed, approved and updated as necessary. Each card has specific spending limits that are approved by the cardholder’s immediate supervisor and also must be consistent with the cardholder’s Expenditure Authorization Approval. In order for the IEEE to gain the most benefit from this program, cardholders should use Preferred Suppliers whenever possible.

If you are interested in learning more, please email the PCard administrator

The Concentration Banking (CB) Card is a credit card with a debit card that can be used by IEEE Units that have a Concentration Banking (CB) Account or an IEEE Custody Account for IEEE related business activities. Cards are automatically issued in the name of the Chair and/or the Treasurer and will also list the IEEE Unit name Benefits include cash access to local currency in hundreds of countries, ability to obtain cash through a bank cash machine, and will lessen the need to reimburse individuals who use personal funds for business related expenses.

If you are interested in learning more, please email the PCard administrator

Preferred Suppliers

Preferred suppliers have been selected at the IEEE through collaborative efforts with all IEEE departments. The goals of these partnerships are to:

Fully leverage the Institute’s total buying power to reduce everyone’s prices.
Consolidate the supplier base and reduce transaction-processing costs.
Provide higher levels of service and other value-added features.
Make procuring products quick, convenient and hassle free.

IEEE Procurement Department is committed to helping you get the most out of every procurement dollar. We help by establishing preferred suppliers for major commodities. Procurement Management has negotiated these partnerships with cooperation of IT and Facilities using the full benefit of IEEE’s considerable buying power. By ordering from the supplier partners whenever possible, you get lower prices and exceptional supplier service. You will also save ordering/sourcing time and reduce administrative expenses. If you wish to suggest a supplier be evaluated for preferred supplier’s status, please email us.

Independent Contractors

An Independent Contractor (I.C.) is classified as an individual, sole proprietor or partnership who contract for services (regardless of dollar amount) that result in payment from IEEE. For instructions & forms please visit the IEEE Tax Compliance & Administration Department’s website.

Taxes and Exemptions

Overview

IEEE is exempt from sales tax for products and services received or rendered in the following locations: NJ, NY, and Washington, DC. IEEE is not exempt from California sales and use tax.

State Sales Tax Exemptions

View all the states in which the IEEE is tax exempt and also download a PDF copy of the certificate. Present these certificates to a supplier if you procure goods or services in that state or they are shipped to that state for use. Most certificates need to be completed and signed. Instructions are included.

Invoice Processing

All invoices should be sent to the Accounts Payable Department. To insure that your invoices are handled promptly, please include the Purchase Order number, supplier and site number of the “remit to” address. If the supplier is new, tax information must be provided to the Procurement Department prior to the invoice being sent to the Accounts Payable Department. Please note if the supplier accepts MasterCard on the invoice so Accounts Payable can pay via their PCard.

Section 4 Guidelines on Procurement Practices

Federal Procurement Requirements that Pertain to the IEEE

Annually the IEEE receives United States Federal Grants and is required to comply with Federal procurement standards. The Office of Management and Budget's (OMB) Circular A-110 sets forth uniform administrative requirements for grants and agreements with institutions of higher education, hospitals, and non-profit organizations such as the IEEE.

The following are a few important items to note from the OMB Circular A-110:

Written procurement procedures are in place and at a minimum include:

o Avoid procuring unnecessary items.

o Analyze lease versus purchase options.

o Request for proposals (RFP) must be in detail.

Maintain written standards of conduct; also known as Codes of Conduct.
Encourage competition among suppliers.
Cost/price analysis is required on all procures.
Make certain business is not conducted with a supplier who is on the United States Federal Government’s “Debarment and Suspension” list.
When purchases exceed the United States Federal Government's small purchase threshold, currently $25,000, the following records must be kept:

o Basis for contractor selection and purchase price.

o Justification for lack of competitive bids or offers not obtained.

Every year our Federal grant purchases are audited by an external auditor according to the requirements of the OMB Circular A-133, which addresses audits of state, local governments and non-profit organizations. Additional documentation may be necessary to fulfill compliance but varies dependent on the type and scope of the grant. Each IEEE unit that receives grants is required to maintain the records required to support its purchases and provide the records to the Development Operations Manager if the audit review team requests said records. Any questions concerning Federal procurement regulations should be directed to the Development Operations Manager or you may visit the IEEE Grant Administration section. For further information regarding any of the OMB circulars mentioned in this section, please visit The Office of Management and Budget's website. To view the “Debarment and Suspension” list, please visit the Excluded Parties Listing System website.

Guidelines for Recommending Qualified Suppliers

Procurement is ultimately responsible for the final selection of any supplier. Supplier selection and evaluation is a process that can take considerable time and energy depending on the product or service, but is well worth the effort when the supplier chosen is competitively priced and responsive to the needs of the IEEE.

These are the steps in recommending suppliers to Procurement for any purchase of $1,000 or more:

The first step in selecting suppliers is often research, particularly if the product or service has not been procured before. There are a number of tools available for this initial phase:

• Check the Internet for procurement related websites.

• Consult the Yellow Pages for local suppliers.

• Consult trade publications, directories, supplier catalogues and professional journals.

• Talk to salespersons.

• Talk to colleagues in other departments who might have procured a similar product or service.

Once a list of potential suppliers has been developed, begin evaluating each supplier's capabilities. Obtaining a Dun & Bradstreet (D&B) financial report is a good place to start. For dollar purchases less than $5,000 and one-time relationships, this step is not necessary. The Credit & Collections Department can run a D&B at no charge. However, a D&B contains only publicly available information or information that the supplier chooses to provide. Some D&B’s also include brief profiles of key management personnel and historical information on the company. Requestors can also check with local Better Business Bureaus.

3. There are a number of guidelines for supplier selection.

• Investigate a supplier’s financial stability.

• Check bank references.

• If time permits and the supplier is a public company, obtain a current annual report.

• Find out how long the supplier has been in business.

• Find out who are the supplier’s primary customers and check their references.

• Tour the supplier’s facilities, is possible.

• Does the facility appear prosperous?

• Does the supplier use state of the art technology?

• Is the supplier interested in doing business with the IEEE?

These steps should narrow the field to the three to five suppliers who will be asked to bid on the particular product or service.

Procuring Capital Equipment

A Capital Equipment purchase is equal to or greater than $1,500 and has a useful life greater than one year. A fully completed & approved Capital Expenditure form must be submitted to the Accounting Department for their review of account numbers. Upon their review and approval, create a Purchase Requisition and attach all support documentation to the Purchase Requisition. For additional information regarding capital equipment purchases, contact the Procurement Department. For information on fixed assets and capitalizing equipment purchases, contact the General Accounting.

Lease or Buy

Current IEEE guidelines in place for leasing of laptops and desktops are three years. The peripherals (keyboard, monitor, mouse) are purchased, as these items do not see significant technological advances from year to year. Leasing of desktop equipment allows us to take advantage of a technological “refresh’ at lease term end and avoids disposal issues when the equipment becomes obsolete. The main purpose of leasing personal computer equipment is to help staff keep current with new software applications.

On larger server type equipment, mainly generated from the IT Department, the guidelines have been to lease this equipment for 5 years. In some cases depending on the application, an outright decision to purchase this equipment should be considered depending on what the useful life of the equipment is estimated to be, past 5 years or if recycled to a different production application. Any questions concerning lease versus buy of pc or server equipment should be directed to the Procurement Department.

Leasing of other equipment outside the pc/server area, such as mailing equipment, material handling equipment or small desktop copiers should also be directed to the Procurement Department for guidance in making this lease versus buy determination. Equipment purchases usually involve a substantial financial commitment, the purchase price of the equipment and the cost to service and repair it. Before procuring the equipment, the requestor should determine whether or not a short-term lease will satisfy the needs of the end user.

Making the Buy

Once the decision has been made to procure the equipment, the requestor should prepare the specifications, select the supplier and develop the Request for Quote (RFQ) or Request for Purchase (RFP). If the equipment is standard and requires no modifications, the requestor can use the RFQ format (Preparing and Evaluating a Bid). If the equipment requires specific modifications, the requestor should use the RFP format (Preparing and Evaluating a Bid) and clearly define the specifications and the scope of the work to be performed.

Guidelines for Shipping Capital Equipment

Negotiate the F.O.B. Point (Requisition/Purchase Order). If the terms are F.O.B. Destination, the supplier is legally responsible for the equipment until it is delivered to the specified location and if the equipment is damaged in transit, is also responsible for filing the freight claim. If the terms are F.O.B. Origin, the IEEE is legally responsible for the equipment in transit from the supplier’s warehouse or dock. IEEE would file a freight claim if the equipment were damaged in transit.

Other Issues to Address Prior to Procuring Capital Equipment

• Installation

Who will be responsible? What does this include? If the supplier’s personnel will perform the installation, make sure the supplier has adequate liability and worker’s compensation insurance. Can Facilities personnel install the equipment? How long will installation take? Is installation a separate cost or included (F.O.B. Installed)?

• Training

Is training available for end users? Where will it take place? How long will it take? Is training included in the purchase price? Is a user’s manual included, written in English, complete with parts list and schematic? Will the supplier provide on-going technical assistance if needed?

• Acceptance

The equipment is expected to conform to certain performance specifications and should be tested before the requestor or end user authorizes payment to the supplier.

• Warranties

Warranties should begin from the date of installation and training. The equipment should be operational and personnel fully trained. The requestor should avoid taking partial shipments and risk warranties on components expiring at different times. If the equipment is to be stored, arrange with the supplier for an extended warranty or have the supplier activate the warranty after the equipment has been installed and tested. Otherwise, the warranty may expire before the equipment is up and running. Requestors may find an extended preventative maintenance agreement more cost effective than whatever discounted terms the supplier is offering.

• Service and Maintenance

See Office Equipment Maintenance and Service Agreements (below).

• Payment Terms

Negotiate payment terms with the supplier and specify the terms on the purchase order. Occasionally, suppliers will request a partial payment when the order is placed, another payment when the order is shipped and final payment when the equipment is accepted. Progress payments are typically made if the equipment is expensive or have been customized to the end user’s specifications.

• Supplier Terms and Conditions of Sale

Requestors should pay particular attention to the fine print on the supplier’s written quotation. Some items may be negotiable, some may not. Review order cancellation policies carefully. Penalties for cancellation can involve a substantial portion of the purchase price, particularly if the equipment has already been customized to meet very specific requirements.

Hardware & Software Purchases

Standard Policy

In order to successfully implement and maintain a desktop standard, it is required that staff observes the Standard Desktop Services guidelines that can be located on the Information Technology department’s website. These guidelines are updated periodically to reflect technological changes and upgrades. Please contact the Information Technology department’s Standard Desktop Services team each time hardware or software is to be ordered.

Non-Standard Policy

If non-standard hardware and/or software are required for a business-specific need, the non-standard approval process must be followed. This process is designed to assist you in making appropriate technical business decisions and to ensure the IEEE does not have technology in place that can be utilized. Your order will not be processed unless all required approvals and reviews are received. Please contact the Information Technology department’s Standard Desktop Services team.

IT Support for Non-Standard Hardware or Software

The Information Technology department will not be responsible for supporting any hardware or software designated as "non-standard," even if approved for procure. We strongly suggest you discuss installation options with the Help Desk. If support is a concern, you must contact your Client Interface Manager (CIM), in advance, for information regarding obtaining support.

Preparing and Evaluating a Bid

Bid Policy

Multiple bids should be obtained for the procurement of goods or services at significant dollar levels. A minimum of 3 bids is required for any purchase of $25,000 and above. The originating department should indicate the number of bids received and the name and title of the individual who reviewed the bids. Bidding goods and services is a useful process for several reasons. The bidding process:

• Allows the requestor to comparison shop for the best pricing and service.

• Allows the requestor to make an informed and objective choice among potential suppliers.

• Encourages competition among suppliers.

• Gives the requestor a standard for comparing price, quality and service.

• Gives the requestor a list of qualified suppliers for future bids.

The bid process begins with the requestor developing a set of specifications or objectives. The requestor must do some homework and be able to define the requirements exactly. The requestor can consult colleagues, technical personnel, trade manuals and suppliers for assistance in developing specifications. The requestor then communicates the requirements to the selected supplier in writing. At this time, the IEEE does not have a standard Request for Proposal (RFP) or Request for Quote (RFQ).

The RFQ process is designed to identify the supplier who can meet the requestor requirements for the best price. The RFQ should be used for bidding familiar, standard items. Price, delivery and inventory are usually the most important elements of the RFQ. The RFQ should contain all the following information for the supplier to submit a valid quote:

• The product(s) should be described in detail.

• Specifications should be clear, concise and complete.

• Quantity, quality requirements, packaging, F.O.B. point, payment terms, warranty, delivery and inventory requirements should all be included in the RFQ.

An RFP should be used for bidding services such as consulting, advertising, publication, maintenance and computer programming. The RFP usually begins with a statement of purpose or goals and objectives. The RFP:

• should clearly define an acceptable level of performance for the supplier and a definite time frame for achieving this goal.

• should ask the supplier to describe the qualifications of those individuals who may be involved in implementing the goals and objectives of the RFP.

• should ask for all the information contained in an RFQ (see above) but also can ask for input from the supplier. The supplier might be asked how they would meet a specific objective or what unique contributions they would make toward achieving the goals outlined in the proposal and what alternative proposals they would offer. The supplier might also be asked to solve specific problems concerning time constraints, new technology or on the job training for end users. Keep in mind that “how is as important as how much”.

Tips on preparing a bid (RFQ or RFP):

• The requestor needs sufficient time to prepare a well thought out bid and the supplier needs sufficient time to respond (two to four weeks).

• All suppliers should receive identical copies of the RFQ or RFP and any subsequent changes in the bid specification.

• Specify a deadline for submitting all bids. If the deadline is extended for one supplier, it must be extended for all.

• All suppliers should be notified in writing if the bid specifications change. If the changes are substantial, it may be necessary to extend the submission deadline. All suppliers should be notified of the extension in writing.

• If the requestor receives a number of questions about the bid, the requestor should consider holding a pre-bid conference. The requestor will have an opportunity to clarify the RFQ or RFP for all the suppliers and no supplier will have the unfair advantage of additional information.

• When the bids are received, the requestor should sign, date and indicate the time that each is received. All competitive bids are confidential and should never be used as a bargaining tool.

Tips on evaluating bids:

• Take the time to review the bids carefully.

• Narrow the field by determining which suppliers are responsive. A responsive bid provides all the information asked for and addresses all the issues in the RFQ or RFP. Eliminate bidders who are unresponsive.

• Look carefully at proposed prices. Be wary of a supplier who substantially underbids the competitors. They may be “low balling” the price to win the bid but the quality of his product could suffer or he might be unable to meet the delivery requirements. A substantially lower price might also indicate that the supplier has misunderstood or misinterpreted the requirements.

• If appropriate, obtain and evaluate samples.

• If the bidding is close, ask for extended warranties (if appropriate) and compare prices.

• Consider the supplier’s past performances, technology, after-sale support and services plus the creativity used to meet the requestor’s requirements or objectives.

Negotiation Techniques

Negotiating successfully takes skill and practice and should result in a win - win situation for both the requestor and the seller. Good negotiators:

• Do their homework.

• Clearly understand their requirements and objectives.

• Develop strategies.

• Never lose sight of their goals.

• Know where they can afford to compromise and where they cannot.

• Make sure their negotiating teams have whatever expertise (technical, financial, legal) is needed to increase the chances for a successful settlement.

• Make an effort to anticipate the supplier’s strategy and to determine what the supplier hopes to gain from the negotiating process.

When to Negotiate

Requestors should negotiate when:

• The purchase involves a significant amount of money or represents an on-going effort.

• The number of suppliers available is too few to competitively bid the purchase.

• New technologies or processes are involved for which selling prices haven’t been determined yet.

• The supplier must make a substantial financial investment in equipment, technology or other resources.

• Not enough time is available to competitively bid the purchase.

Negotiation Strategies

Whenever possible, the requestor should:

• Negotiate on their own “turf”. The physical environment should be pleasant, well ventilated and lighted.

• Prepare an agenda and brief the members of the negotiating team beforehand so that their strategy isn’t compromised.

• Never lose sight of what should be gained from the negotiation.

• Have confidence in their facts and figures. Never use information that could be questioned or proven inaccurate.

• Negotiate only with supplier representatives who are empowered to make concessions.

• Leave plenty of room to maneuver. The greater the initial demands, the greater the probability for success.

• Not be afraid to be silent. Silence can be an effective negotiating tool. If the supplier fears he is losing your business, he may talk himself into offering more and better concessions than expected.

• Call a recess or lunch break if negotiations break down.

• Always withhold something for concession in return for a point the supplier is willing to concede.

• Always be fair. The supplier is entitled to a reasonable profit that will enable him to stay in business for the long run.

Negotiation Strategies to Avoid

Requestors:

• Shouldn’t reveal their strategies too early into the negotiation process.

• Should avoid getting so bogged down in details that the overall objectives are lost.

• Should never try to prove the supplier wrong. Leave the supplier room to retreat gracefully from a stated position.

• Should avoid displays of temper, frustration and anger that can handicap the negotiation process and logical thinking.

• Should not communicate anything to the supplier that reduces bargaining power. (i.e. You’re our only source, we have $21K budgeted for this purchase or I have to have it now, etc.) Be intelligent and cautious.

Managing Supplier Partnerships

The IEEE has a Supplier Partnering Program that is being managed in Business Administration. The supplier management program is based on the criteria of Quality New Jersey (QNJ). For details on this program, please contact the Procurement Department.

Maintaining good relations with a supplier should be as important to a requestor as getting the best price. A good requestor-seller relationship is a partnership, a win-win situation over the long run. A supplier who is treated with courtesy, honesty, and fairness will deliver a quality product at the best price, will provide good service, and will be responsive to emergency situations and special requests. A responsive supplier makes a requestor “look good”.
There is a public relations aspect to purchasing that should not be overlooked. An organization's public image can be a valuable asset. A supplier who is treated equitably and professionally is likely to communicate his positive experiences with your organization to his associates.
Guidelines for Successful Supplier Relationships:

• Use established supplier partnerships to best leverage the collective IEEE volume, to consolidate orders and to reduce administrative processing costs. You will receive outstanding prices and excellent service.

• Be fair. Give all qualified suppliers an equal opportunity to compete for business.

• Maintain integrity. A supplier’s pricing is confidential and should never be shared with another supplier for any reason.

• Be honest. Never inflate requirements to obtain better pricing. Negotiate in good faith. Don’t change the requirements and expect the supplier to hold his pricing.

• Be ethical. Procurement decisions should be made objectively, free from any personal considerations or benefits.

• Be courteous. A requestor should make an effort to receive sales persons to the extent that his or her work schedule permits.

• Be reasonable. A supplier is entitled to a fair profit.

• Pay promptly. The purchase order you issue to the supplier is your promise to pay for the goods and services you buy in a timely manner (usually within 30 days).

Office Equipment Maintenance and Service Agreements

The Facilities Department is the coordinator for the Office Equipment Repair Program which is set up for printers, fax machines, scanners, copy machines and multi-function machines not covered under any current service agreement. Send your repair request to fix-it@ieee.org including the brand, model number, type of equipment, and your departmental account number for billing. Facilities will contact the repair service provider and coordinate the service call. There is consultation fee (currently $40) for the visit, which will be applied toward the cost of any further repairs needed. Following the service call, Facilities will contact you and provide a written quote for any part or repairs required.

Service Agreements for printers, fax machines, scanners, copy machines and multi-function machines are not recommended for equipment values under $1,500. If a Service Agreement is desired, it should be purchased with the equipment from the supplier. All Service Agreements must be maintained by the end user departments.

Receiving Purchases

Deliveries can be made directly to the receiving dock, or other locations specified on the purchase order. All packaging should be carefully examined for any visible evidence of damage, particularly if the purchase is fragile or costly. The person receiving the purchase should make a note of the date the order was received, the name of the supplier, the quantity received, and the purchase order number. The receiving and purchase order information can be checked against the invoice to make sure that the quantities received are the same as the quantities being invoiced.

• Damaged Shipments and Shortages - Any damage to the package, no matter how slight, should be noted on the carrier and receiver’s delivery receipt.

• Initiating a Claim - The shipper’s main office should be notified in writing within 15 days of receipt of the damaged merchandise. The formal claim letter should:

• Describe the damage.

• Provide the date the shipment was received.

• Include a copy of the delivery receipt with the shipper’s signature and the receiver’s description of the damage.

• Provide the supplier’s name.

• Include a written estimate from the supplier of the cost to replace or repair the damaged items.

• Provide a copy of the supplier’s original invoice.

• Provide copies of all correspondence pertaining to the claim.

The Interstate Commerce Commission requires the shipper to acknowledge the claim within 30 days and to offer a settlement within 120 days. When terms are F.O.B. Destination, the requestor or end user should notify the supplier immediately so that the supplier can file a claim.

• Returning Goods to the Supplier - Goods should not be returned without first notifying the supplier. Some suppliers require the requestor to obtain a Return Authorization Number (RAN) or Return Merchandise Authorization (RMA) and have procedures as to how and when a return shipment should be made. Some suppliers may also charge a restocking fee to offset the cost of returning the item to inventory. The requestor or end user should keep a record of the name of the individual authorizing the return, the authorization number and date, notes of any conversations with the supplier authorizing the return, the date the shipment was returned, the name of the carrier, and the supplier’s complete address including the name of the individual receiving the returned goods. If the item being returned is expensive or fragile, it should be insured. Contact the IEEE Insurance Department for adequate insurance.

Section 5 Contracts

Execution Overview
In response to the recommendations received from the Institute's legal counsel and its external auditors, at its 8 May 2000 meeting, the Executive Committee considered several enhancements to financial controls over all IEEE units, including geographic units and conferences. After considering the possible ramifications of these items, the Executive Committee recommended that the Board of Directors approve Policy & Procedures Manual revisions that would require execution of all contracts with an expected value equal to or greater than $25,000 at the Operations Center. The Board approved this June 2000.Since the largest percentage of geographic units and conference financial operations are U.S. based, the U.S. portion of the program has been implemented first. The process that is implemented for geographic units and conferences in Regions outside of the United States may rely on independent volunteer review (possibly Regions for Section contracts or use of "Regional Offices"). This is not a reason to lessen the review process prior to contract execution, only alter it. This recommendation was made as part of an overall plan to improve the Institute's ability to achieve proper fiduciary controls over its financial operations, including those for its geographic units and conferences, and, thereby, among other things, ensure its not-for-profit status under paragraph 501(c)(3) of the Internal Revenue Service Code is retained. This action has the full support of the Institute's legal counsel and external auditors.

Policy and Process for Approvals

Procedures related to procurement and contract negotiations, approval and execution are contained in the IEEE Financial Operations Manual. (Policy 11.2.E.1(a))

For purposes of these procedures, contract value is defined by adding the maximum annual amount of receipts or expenditures, under the given contract or arrangement, for all the contract years.

Process for Approvals

Contracts, Agreements and Memorandums of Understanding with a contract value of USD25,000 or greater (as defined below), shall be reviewed by subject matter experts prior to final approval and execution. IEEE units will initially “approve” contracts.

However, contracts in excess of USD25,000 will be “executed” by authorized staff executives at the Operations Center in Piscataway, primarily within the IEEE’s Procurement function, which reports to a Staff Director with a primary responsibility for Investment Management Services, Procurement and Contract Management. IEEE Organizational Units may negotiate contracts, with a value of USD25,000 or above, based on need but shall not give final approval or “execute” contracts.

Unit approvals will be indicated on the Contract Database record and sent to the Investment Management Services, Procurement & Contract Management Department at the Operations Center in Piscataway for review and final approval. Once reviewed and approved, the contract will be executed and sent to the supplier or contractor. A memo along with a copy of the contract will be sent to the originating unit advising of the action. Fax transmittal of all documents is recommended. A dedicated fax will be provided in the Investment Management Services, Procurement & Contract Management Department at the Operations Center in Piscataway for this purpose.

Control Limits

Any contract with value limits above USD25,000 will be subject to the Investment Management Services, Procurement & Contract Management Department final review/execution processes. While any contract up to USD25,000 in value may be executed locally, a copy must be sent to the Investment Management Services, Procurement & Contract Management Department for central record retention. A database has been established to provide detailed supplier history and information.

Inability to Execute

The contract will be returned to the originator with an indication of any issues determined by the Investment Management Services, Procurement & Contract Management Department and/or IEEE’s outside counsel.

Approval and Execution Limits (USD)

Volunteer/Staff Function	Approval Authority	Final Approval & Execution Authority**
Conference Chairs	<250,000*	<25,000*
Region/Section Chairs	<250,000*	<25,000*
Society Presidents	<250,000*	<25,000*
Member, Management Council	<250,000	<25,000
Member, Mangement Council and Designated Volunteer Officer	<1,500,000	N/A
Member, Management Council (for conference hotel, caterer and convention center contracts)	<1,500,000	<25,000
Board of Directors / Alternate Approval Process	Unlimited	N/A
Manager, Procurement	<25,000	<500,000
Staff Director, Investments & Procurement	<50,000	<3,000,000
Staff Executive, Business Administration	<250,000	<5,000,000
Staff Executive, Business Adminstration and Designated Volunteer Officer	<1,500,000	N/A
IEEE Executive Director	<250,000	<10,000,000
IEEE Executive Director and Designated Volunteer Officer	<1,500,000	N/A
Treasurer and IEEE Executive Director (Jointly)	Unlimited	<25,000,000
President and IEEE Executive Director (Jointly)	Unlimited	Unlimited

*Not greater than the total Conference budget. **Not greater than the total annual unit budget.

Exception for Conference Hotel Contracts

The threshold for conference hotel contracts requiring ExCom approval prior to formal execution has been raised from $250K to one million dollars. Approval & execution limits will be followed for all other contracts as previously stated. Conference hotel contracts will continue to be included in the report provided to ExCom at each Executive Committee meeting that details all significant contracts and P.O.’s.

Alternate ExCom Approval

With the exception of conference hotel contracts under one million dollars, any contract, in excess of $250K with a business deadline prior to the next scheduled meeting of the Executive Committee, a procedure has been approved to authorize the Executive Director and either the Treasurer, IEEE President, IEEE President-Elect or the IEEE Past President to approve contracts. Subject matter experts, including legal counsel where applicable, must conduct a prior review of the contract and action reported to the Executive Committee at its next formal meeting.

Execution Process

Any contract with a value in excess of $25K will be subject to the Investment Management Services, Procurement & Contract Management Department’s final review / execution process. While any contract up to $25K in value may be executed locally, contracts $5K up to $25K must be sent to the Procurement Department for central record retention marked “For File Only”. Contract value is defined by multiplying the maximum annual amount of receipts or expenditures by the number of contract years.

Section 6 Forms

Section 7 Appendix

Personal Purchases

With the business partnerships IEEE has formed, many of our Preferred Suppliers are passing on a volume discount to IEEE employees.

Dell Personal Employee Purchase Program

Contact Dell at +1 800 695 8133 and reference our member identification #PS20833549 for information on system configurations and discounted pricing. You can configure your own system or purchase one of Dell's pre-configured systems. We recommend contacting Dell at +1 800 695 8133 for any specials or incentives. For liability concerns, no employee purchases are to be delivered to IEEE.

Staples

Visit the StaplesLink web page for purchases. Periodically we will socialize coupons provided by Staples for personal discounts that are offered to employees.

PCMall Employee Purchase Program

Please contact our account representative to obtain access to the PCMall employee purchase program website.