Purchasing

To provide procedures that will be in compliance with the objectives as stated in the Lone Star College System Policy Manual, Sections CF (Legal & Local).

The scope of this section is to outline specific procedures necessary to direct the purchasing and contract practices of the District in order to provide the best value to the District and to be in compliance with Texas State Law. These procedures will identify and outline the specific steps to be followed, when those steps are appropriate and the designated responsible individuals involved from both the College and District Offices.

The responsibility and authority for District purchases varies with the amount and kind of purchase. These various levels are detailed below in Board Policy Relative To Purchase Transactions. Additionally, in some instances, the authority for limited purchases may be specifically delegated by the State.

The responsibility for assuring that this Board Policy is adhered to belongs to the Chief Financial Officer or designee.

The Purchasing Manager and the Purchasing Department, under the direction of the Director of Business Affairs, implements, directs, controls and oversees the purchasing function.

Authorized District Employees in charge of a Department or College budget may purchase items included in their approved budget, in accordance with administrative procedures, unless state law or Board policy specifically requires the Board to make or approve a purchase (Lone Star College System Board Policy, Section CFA - Local: Authorized Purchases).

1. All supplies and equipment shall be purchased in accordance with established written policies or addenda to the written policies.

2. The law shall be strictly followed in regard to purchasing, and bids shall be sought from firms located both within and outside of the District.

3. Unless there is just cause for other action, the low bid or quotation meeting specifications shall be accepted for all purchases.

4. Purchasing shall be handled in such a manner as to assure fair competition between bidders.

5. The District may not make any purchases of services or goods from individuals/firms owned by any current member of the Board of Trustees.

6. Purchases of services or goods from District employees are discouraged. Reference is made to Board Policy DHA (Local), Sections 2 & 3, "All employees shall avoid personal investments that could reasonably be expected to create a substantial conflict between the employee’s private interest and the public interest."

7. If merchandise is obtained from an unauthorized person or in a manner that does not follow established, written procedures, the individual making the purchase will be considered to have entered into a private transaction. Payment for any unauthorized purchase shall be the responsibility of the person placing the order (Lone Star College System Board Policy CFA - Local: Responsibility For Debts).

The Board of Trustees has divided purchase transactions into classifications and established methods of securing quotations or bids and making awards proportionate to the value involved.

1. Under $2,500

   1. All purchases under $2,500 shall be made in a manner that will be most advantageous to the District. Prices and vendors may be selected by the Originating Department. Shopping for best value is encouraged.

   2. Division of purchase requisitions issued to a single vendor will not be accepted. Lone Star College System Board Policy Section CFC (Legal) states "A Trustee or employee shall not intentionally or knowingly make or authorize separate, sequential, or component purchases to avoid the competitive bidding requirements set out in this policy. (et.al) Violation of this provision is a Class B misdemeanor and an offense involving moral turpitude, conviction of which shall result in removal from office or dismissal from employment". Separate, sequential or component purchases, in this application, means more than one purchase, each less than $2,500, that in normal purchasing practices would be made in one purchase, totaling over $2,500.

2. Purchases $2,500 through $9,999

   1. The Originating Department shall solicit at least three (3) written quotes for all purchases $2,500 through $9,999.

   2. A written quotation is defined as "a document received from a vendor that bears their name, address, telephone number, current date and the vendor representative’s signature." A form provided by the Originator for the purpose of receiving a quotation is also acceptable. This form must also bear the name, address, telephone number, current date and the vendor representative’s signature. Clippings from magazines, etc., WILL NOT be considered valid quotations. A written quotation will be considered valid if it is processed within 30 days of its date, or if additional price extension time is indicated in writing on the quotation.

   3. The quotations must be for identical equipment or supplies and be written for easy comparison.

   4. The Originating Department shall receive the quotations, make tabulations and secure any essential technical information.

   5. At least three (3) written quotes and a formal recommendation shall accompany each purchase requisition that totals $2,500 through $9,999.

   6. The written quotations will be reviewed and accepted by the Vice President of Administrative Services, Business Manager or Purchasing Manager.

   7. The requisition, with appropriate approvals, the written quotes and recommendation are sent to the College Business Office or Purchasing Department (for District requisitions) for processing. (Refer to Section 6.4.2 Requisitions, below, for electronic requisitioning procedures.)

3. Purchases of $10,000 through $24,999

   1. Purchases of personal property with a value of $10,000 through $24,999, in the aggregate for the District for a twelve month period and single purchases of $10,000 through $24,999 shall be made in one of the following methods, that provides the best value to the District (Texas Education Code, Section 44.033).

      1. competitive bidding;

      2. competitive sealed proposals;

      3. request for proposals;

      4. a catalog purchase - as provided by Subchapter V, Chapter 2157, Government Code;

      5. an interlocal agreement; or

      6. a design/build contract.

   2. Competitive Bidding, Competitive Sealed Proposals and Requests for Proposal

      Competitive Bid - A formal document that defines specific needs and requests specific prices for supplies, equipment or services for a specified project or period. Included in the document are all of the conditions relating to the need and specifications which have been carefully crafted to insure fair and competitive bidding from all bidders. Bids from prospective bidders are sealed and are not to be opened until a public meeting is held at a pre-determined location, date and time. Bidders and bids are read aloud and recorded in the public meeting. Competitive bids require advertising in local newspapers.

      Competitive Sealed Proposal - A formal document similar in nature to the competitive bid. The reference to Bid or Bidders is changed to Offer and Offerers. References addressing the finality of an offer is disregarded because proposals are negotiable. Competitive sealed proposals are not to be opened until a public meeting is held at a pre-determined location, date and time. Only the names of the offerers submitting proposals are read aloud and recorded. Offers are not disclosed. Competitive sealed proposals require advertising in local newspapers.

      Request for Proposal - A formal document that is less structured and in which specific needs are less narrowly defined and prospective proposers are able to respond with a proposal that is intended to address the need. In a request for proposal, proposers have the flexibility to craft their proposal to the need that has been identified. Request for proposals are sealed, not to be opened until a public meeting is held at a pre-determined location, date and time. Only the names of the proposers submitting proposals are read aloud and recorded. Proposals are not disclosed. Request for proposals require advertising in local newspapers.

      1. Each purchase requiring competitive bidding, competitive sealed proposals or request for proposal valued $10,000 through $24,999 shall be advertised in one local newspaper for two successive issues, with the last advertisement at least two weeks before the selected bid opening date.

      2. A sample bid document is available from the District Purchasing Department or the College Business Office.

      3. The Originating Department shall complete the sample bid document and send it along with a suggested vendor list for the bid to the College Business Office or Purchasing Department (for District purchases) for review of appropriateness of the purchase and funds availability. The College Business Office will send this bid document to the District Office, Purchasing Department for processing.

      4. The Purchasing Department will process the bid document and secure sealed, competitive bids on the selected bid opening date. Bids will be opened and tabulated. Copies of the bids and the bid tabulation form will be provided for evaluation to the Originating Department.

      5. The Originating Department, with assistance from the College Business Office, when appropriate, and the District Office Purchasing Department will evaluate the bids received and will select the bid from the vendor that provides the best value to the District.

      6. The Purchasing Department will prepare the necessary documentation and submit for approval to the Vice Chancellor for District Services or designee.

      7. The Purchasing Department will notify the Originating Department of the approval.

      8. The selected vendor is notified by the Purchasing Department, and the purchase order is issued.

   3. Catalog Purchases
      Catalog purchases may be made only from vendors that have catalogs that have been approved by the General Services Commission of the State of Texas. These vendors are identified by the GSC as Qualified Information Systems Vendors. Purchases of $10,000 through $24,999, as defined by Subchapter V, Chapter 2157 of the Government Code, may be made from Qualified Information Systems Vendors for computer and computer related items and are not advertised as indicated in Item (b) above.

   4. Interlocal Agreements and Design/Build Contracts
      Contact the Purchasing Department for availability.

4. Purchases of $25,000 or more

   1. All College contracts valued at $25,000 or more in the aggregate for the District for each 12 month period and single purchases valued at $25,000 or more shall be made in one of the following methods that provides the best value to the District (Texas Education Code, Section 44.031).

      1. competitive bidding;

      2. competitive sealed proposals;

      3. request for proposals

      4. a catalog purchase - as provided by Subchapter V, Chapter 2157, Government Code;

      5. an interlocal agreement; or

      6. a design/build contract.

   2. All contracts valued at $25,000 or more must have Lone Star College System Board of Trustees approval.

   3. Competitive Bidding, Competitive Sealed Proposals and Requests for Proposals (see definitions, above, in section 6.3.3.3.b)

      1. Each purchase requiring competitive bidding, competitive sealed proposals or request for proposal valued at $25,000 or more shall be advertised by Purchasing in one local newspaper for two weeks with a seven day interval, with the last advertisement at least two weeks before the selected bid opening date.

      2. Same procedures should be followed as in 6.3.3.3.b, 2-8.

      3. The Originating Department shall then forward their formal recommendation indicating their selection to the College Business Office or Purchasing Department (for District purchases).

      4. College Business Offices will communicate this recommendation to the District Office Purchasing Department to formalize the recommendation for approval of the Vice Chancellor for District Services, the Chancellor and the Board of Trustees.

      5. Upon Board of Trustees approval, a purchase order is issued by the Purchasing Department.

   4. Catalog Purchases

      1. Catalog purchases may be made only from vendors that have catalogs that have been approved by the General Services Commission of the State of Texas. These vendors are identified by the GSC as Qualified Information Systems Vendors. Purchases of $25,000 or more, as defined by Subchapter V, Chapter 2157 of the Government Code, may be made from Qualified Information Systems Vendors for computer and computer related items and are not advertised as indicated in Item (c) above.

      2. Catalog purchases of $25,000 or more made from Qualified Information Systems Vendors do not require Board of Trustees approval.

   5. Interlocal Agreements and Design/Build Contracts
      Contact the Purchasing Department for availability.

5. Construction projects valued at $10,000 through $24,999

   1. When a contract for the construction, repair or renovation of a structure, road or an improvement or addition to real property, and the value is $10,000 through $24,999, the purchase will be made using the competitive bid process using procedures in 6.3.3.3.b, 2-8, will be followed.

   2. Each purchase requiring competitive bidding, competitive sealed proposals or requests for proposal valued $10,000 through $24,999 shall be advertised by the Purchasing Department in one local newspaper for two weeks with a seven day interval, with the last advertisement at least two weeks before the selected bid opening date.

   3. The District shall require the contractor receiving the award to certify that he provides worker’s compensation insurance coverage on all employees. A sub-contractor shall provide such certification to a general contractor.

   4. The District requires bid surety in the amount of 10% of the contractor’s bid for projects valued $10,000 through $24,999. Bid surety may be in the form of a cashier’s check or bid bond.

   5. The District does not require payment and performance bonds for construction projects valued $10,000 through $24,999.

6. Construction projects valued at $25,000 or more

   1. Same procedures should be followed as in 6.3.3.3.b, 2-8.

   2. Each contract deemed to have a value of $25,000 or more shall be advertised by the Purchasing Department in one local newspaper for two weeks with a seven day interval, with the last advertisement at least two weeks before the selected bid opening date.

   3. )The District shall require the contractor receiving the award to certify that he provides worker’s compensation insurance coverage on all employees. A subcontractor shall provide such certification to a general contractor.

   4. The District requires bid surety in the amount of 10% of the contractor’s bid. The bid surety may be in the form of a cashier’s check or bid bond.

   5. The District requires Payment and Performance Bonds for projects valued at $25,000 or more.

   6. A recommendation based on the vendor selected by the Originating Department is communicated to the District Office Purchasing Department to formalize the recommendation for approval by the Vice Chancellor for District Services, the Chancellor and the Board of Trustees.

   7. Upon Board of Trustees approval, a purchase order is issued by the Purchasing Department to the contractor.

The College District is exempt from Federal, State and City taxes except in certain prescribed cases. An exemption certificate will be furnished to any supplier upon request.

This does not include City taxes for Hotel charges when traveling on official College business. All local Hotel taxes must be paid when traveling inside the State of Texas and all taxes must be paid to hotels outside the State of Texas. Refer to the Accounts Payable section 5.3.3, in this manual, for a more complete discussion.

All Vendors must have a properly filled out and signed W-9 on file with the District (see Forms Appendix 6.6, for an example).

1. Bid Specifications

   1. The employee requesting bids will submit specifications suitable for duplication and distribution. The Purchasing Department will assist with specifications when necessary.

   2. Specifications should describe the supply item, service or work to be done, clearly and with sufficient detail. It must provide for open competition in bidding and should, insofar as is possible, permit the procurement of standard products rather than items of special manufacture. Consideration should also be given to the availability of parts and of local repair facilities.

      Specifications for items to be fabricated must include exact and detailed information as to materials, dimensions of major component design features, performance standards, and methods of manufacture, inspection and approval. Scale drawings may be required.

2. Evaluation of Bids - The process/flow for evaluating bids shall be completed as outlined in 6.3.3.3.

   1. If the Originator recommends acceptance of other than low bid, written justification must be furnished to the Purchasing Manager and the College Vice President of Administrative Services to support the non-low bid recommendation.

   2. The justification, in memorandum form, must be approved by the Vice Chancellor for District Services or designee, after review with Purchasing. Incomplete or inadequate justification may be returned to the person requesting the bid for further review and additional justification.

1. A Requisition Form (see Forms Appendix 6.6 - Form 1, for an example) must be prepared to initiate four types of transactions.

   1. Purchase Order - a request to purchase equipment, furniture, supplies, long-term service, etc. No purchases may be made without a purchase order (Lone Star College System Board Policy, Section CFA - Local: Purchase Commitments).

      Grant equipment purchases need prior approval from the District Director of Resource Development.

   2. Check Request - a request that has a limited number of uses such as: payment for registration fees, small equipment repair (typewriter, personal computer, etc.), reimbursement over $50, cash advance for travel, etc. (refer to the Accounts Payable section 5.4.1.2, in this manual)

   3. Airline Ticket Purchase - a request for airline tickets is to be obtained from the authorized travel agent of the District. (refer to the Accounts Payable section 5.4.2.1, in this manual)

   4. Petty Cash Reimbursement - purchases under $75 may be made when necessary and reimbursement secured from petty cash (Lone Star College System Board Policy, Section CFB). The appropriate documents must be filled out and signed by the Department Supervisor. (see Forms Appendix 6.6 - Form 2, for an example). (refer to the Accounts Payable section in this manual)

2. Preparation of Requisition Form

   1. The Requisition process is available by two methods:

      1. A printed two-part form; the white copy to be forwarded to the College Business Office or Purchasing Department (for District purchases), yellow copy kept by the Originator, or;

      2. An on-line electronic form.

   2. All requests should be the largest possible quantity consistent with need, storage space, and available funds. Small orders should be avoided to eliminate delivery charges, etc. and processing costs that may exceed the value of the merchandise.

   3. Commodity Codes - Commodity codes will be input on the requisition, by the Originator, to allow the Purchasing Department to track historical data (amount, frequency, etc.). A list of commodity codes is available either on-line in the Purchasing section of Datatel or from the District Purchasing Department in paper form.

3. Requisition Processing

   The normal flow of a requisition, for either the printed or electronic form, is as follows:

   a. Originator:
   Determine need and prepare form. Forward to Supervisor, as outlined below.

   b. Supervisor:

   For Instructional Areas:

   1. Associate Dean:

      Review/approve and send to Dean (where appropriate).

   2. Dean: (where appropriate)

      Review/approve and send to
      College Business Office.

   3. College Bus Office:

      Check budget/approve. Forward to District Purchasing Department.

   For Non-Instructional (College):

   1. Supervisor:

      Review/approve and send
      to Department Head.
      

   2. Department Head:
      Review/approve and send to College Business Office.

   
   

   3. College Bus Office:
      Check budget/approve. Forward to District Purchasing Department.

   
   For District Office:
   

   1. Supervisor:
      Review/approve and send to Department Head.

   
   

   2. Department Head:
      Review/approve and send to District Purchasing Dept.

   
   

   c. Purchasing Department:
   Complete appropriate process.

   Note: Office of Resource & Development (for Grants):
   Review/approve; attach written prior approval (if equipment purchase) and forward to District Purchasing Department.

   For electronic requisitioning: All supporting documentation (i.e. written quotes, etc.) must be forwarded to the District Purchasing Department with a cover memo that references the Vendor name and purchase order number. The purchase process will not be completed until this documentation is received.

(see Forms Appendix 6.6 - Form 2, for a sample)

1. Regular or Standard Purchase Order
   These are issued for the purchase of equipment, supplies, services, etc. when a single delivery and subsequent single payment is expected. These Purchase Orders are issued with a number beginning with the prefix letter P.

2. Blanket Purchase Order
   These are issued to facilitate the purchasing process by minimizing the quantity of Purchase Orders issued to a vendor when:
   
   1. more than one delivery;
   2. more than one invoice;
   3. more than one payment is expected for a supply or service; OR
   4. payments are expected to reoccur on a monthly basis for a determined period of time.
   Examples: Contracts for supplies and services, general construction and renovation contracts, utility payment and some supply purchases.

   In addition, Blanket Purchase Orders may be issued up to $2,500 for supply purchases ONLY when, because of circumstances, a variety of unknown items may be needed for a short term. They WILL NOT be issued for supply purchases that can be planned, defined and described. Blanket Purchase Orders are issued with a number beginning with the prefix letter B.
   

   Blanket purchase orders for supplies will not be increased. A Purchase Order Change Notice must be issued to close out a blanket purchase order that has a small balance that will not or cannot be used. Utilities are the exception.

1. The necessity of planning for equipment and supply requirements cannot be over-emphasized. The time required to process a Requisition from initiation by the individual to issuance of a Purchase Order may vary from a few days to weeks. The Requisition, paper and electronic forms, must travel from the originator through approval channels to the Purchasing Department. Each Requisition will be time stamped upon arrival at the College Business Office or District Office Purchasing and will be processed as expeditiously as possible.

2. Requisitions covering materials for which special funding or reimbursement (such as grants)is expected must be identified by the proper agency or program designation (Title III, etc.) and project number. This information should be entered in the upper left hand corner of the Requisition.

3. Issuing Purchase Orders

   1. When competitive prices have been obtained and the vendor selection has been completed, Purchase Orders will be issued by District Purchasing.

      1. Documentation is received from College Business Offices and District Departments on a daily basis.

      2. Purchasing will verify the accuracy of input and print purchase orders.

      3. Purchase Orders will be matched to documentation, reviewed and approved by the Purchasing Manager.

      4. No Purchase Order relating to Grant Equipment purchases is to be released unless the appropriate Grant Manager approval is attached to the documentation.

   2. Distribution of the five (5) part Purchase Order (see Forms Appendix 6.6 - Form 2, for a sample) is as follows:

      1. White - Vendor

      2. Yellow - District Accounts Payable, filed alphabetically

      3. Pink - District Purchasing filed numerically

      4. Blue - Originator

      5. Goldenrod - Receiving Department

   3. Once a Purchase Order has been issued, only the District Purchasing Department will contact the vendor to make changes in quantities or prices.

      1. When a change is required on a Purchase Order, District Purchasing should be notified immediately. Any changes should be made before the vendor has filled the order if possible.

      2. Any adjustments to Purchase Orders; i.e. price increase, etc. must be backed up with a Purchase Order Change Notice (see Forms Appendix 6.6 - Form 3, for a sample), sent through the proper channels to District Purchasing.

      3. The originator of the requisition is responsible for issuing the Purchase Order Change Notice and forwarding it through the same approval process as the original requisition.

4. Follow-up and Expediting

   1. If items ordered are not received when expected, the Originator may make follow-up inquiries as designated below.

      1. If a Requisition has been submitted but no purchase order copy has been received by the cost center, inquiry should be made through the College Business Office or Purchasing Department (for District purchases).

         1. The Originating Department should provide the College Business Office or Purchasing Department (for District purchases) with information as to the vendor, date of issuance, and department budget code.

         2. If sufficient information is not available in the College Business Office, District Purchasing should be contacted furnishing vendor, budget code and date on which requisition was forwarded to purchasing.

      2. If a Purchase Order has been issued and the merchandise or services ordered have not been provided in a timely manner, inquiry should be made through the College Receiving Department or Purchasing Department (for District purchases).

         1. The purchase order number and vendor name should be furnished to Receiving Department.

         2. If the Receiving Department has no record of receipt of order, and has no status information, the Receiving Department may transmit the inquiry to District Accounts Payable.

         3. If a review of the files indicates that no invoice or specific shipping data has been received, Accounts Payable will provide Purchasing with necessary files and records to enable the Purchasing Department to contact the vendor.

   2. When requests are made for Purchase Order follow-up, Purchasing will contact the vendor, obtain information and relay the information to the person making the request by the same channels through which the inquiry was received.

   3. If information obtained is unsatisfactory, the Originating Person may request alternative action through the College Business Office or Purchasing Department (for District purchases). If the Purchasing Department recommends to the Director of Business Affairs that an alternative action is warranted, action may be initiated in a manner that follows established procedures; i.e. accepting a substitute, or if Purchasing believes that the vendor has defaulted, cancellation of the order and reordering from another vendor.

   4. If the Purchasing Department/Director of Business Affairs determines that a vendor follows a pattern of non-performance or unsatisfactory performance, that vendor may be disqualified from future opportunities for an indefinite or a specified period of time, the duration being determined by the Purchasing Manager/ Director of Business Affairs.

5. Payment of Invoices

   1. In order for payment to be made for merchandise or services received, the vendor’s original invoice and a verification of receipt from the Originating Department must be received by District Accounts Payable.

   2. Yellow copies of all Purchase Orders are held by Accounts Payable awaiting receipt of the original invoice and the goldenrod copy of the Purchase Order from the Receiving Department.

   3. Purchase Orders state that all original invoices should be mailed to the District Accounts Payable office. If an original invoice is received by the Receiving Department or the Originating Department, it should be forwarded to District Accounts Payable immediately.

   4. If an order is shipped directly to the Originating Department, it is the responsibility of the department to notify Receiving that shipment has been received. The goldenrod copy should be signed by the Originator and forwarded to District Accounts Payable.

   5. Payment will be made after the original invoice and goldenrod copy have been matched and checked (Grant equipment purchases will also need prior approval). After payment, all supporting documentation is retained in District Accounts Payable by check date , along with the original invoice and goldenrod copy.

1. A situation may exist when any delay due to competitive pricing requirements or normal procedures would be detrimental to the mission of the District.

2. For emergency purchases at the District Office, the Purchasing Department must be consulted.

3. The College Vice President for Administrative Services is authorized to make emergency purchases for the College in amounts not to exceed $2500.

   1. Generally, an emergency purchase under $2500 will be appropriate if, because of unforeseen occurrences, immediate purchase is necessary to return the instructional environment back to normal.

   2. When an emergency purchase order number has been released to a vendor, "CONFIRMING - MERCHANDISE ORDERED" will be added to the Purchase Order.

4. If the value of merchandise or service required exceeds $2500, the District Purchasing Department should be contacted.

   1. If time permits, a Requisition will be completed and hand-delivered to the College Business Office.

   2. This Requisition should be completed as usual, except that the word "EMERGENCY" should appear at the top of the form.

   3. Justification for emergency action must be shown on the form.

   4. The Requisition should be entered and District Purchasing notified of the emergency, securing authorization from the Purchasing Manager for a purchase order number.

   5. If time is critical, the College Vice President for Administrative Services should contact District Purchasing directly (with budget code, vendor name and dollar amount).

   6. District Purchasing will make necessary arrangements to issue a Purchase Order, and will inform the College Vice President for Administrative Services.

   7. The original Requisition should be forwarded to District Purchasing with complete and detailed justification for the emergency action.

5. When the amount of an emergency purchase exceeds $10,000, approval of the Chief Financial Officer must be secured before the purchase is made and a full record of the transaction must be presented to the Board of Trustees at the next regular meeting for approval.

1. Examination of Incoming Merchandise

   1. The Receiving Department will receive all incoming shipments and verify the number of cartons received and the apparent condition. This will not certify the condition and quantity of the contents of each package.

   2. If the Receiving Department finds a shortage or overage in the number of cartons or pieces received, a notation should be made on the carrier’s freight bill or delivery receipt. The carrier’s driver will verify the discrepancy by signing all copies of the delivery receipt.

2. Inspection for Damage

   1. While the driver is present, each carton should be carefully examined for damage.

      1. If damage is visible, a notation of that damage should be made on the freight bill or delivery receipt and the signature of the driver obtained.

      2. If the contents of a carton appears to be damaged, the carton should be opened in the presence of the driver, and a joint inspection made of the contents. Any concealed damage discovered should be noted on the shipping documents.

   2. When the Originating Department receives the merchandise, the carton should be opened immediately and examined for concealed damage.

   3. If damage is discovered, follow procedures outlined below.

3. Signing for Merchandise

   1. Responsibility of Receiving Department

      1. The Receiving Department is responsible for the original inspection of incoming merchandise and for a preliminary check as to the condition of goods received.

      2. After the number of containers has been verified and a check for damage has been completed, the Receiving Department will deliver the merchandise to the Originating Department.

         1. Delivery should be made in a timely manner, normally within twenty-four (24) hours after receipt.

         2. If delivery is not made within twenty-four (24) hours, the Receiving Department will notify the Originating Department of the shipment and the reason for non-delivery.

      3. The Originating Department will verify the contents against the packing slips and goldenrod copy of the Purchase Order.

         1. Goldenrod copy of the purchase order will be signed, dated and marked "Merchandise Received".

         2. Goldenrod copy should be forwarded to the Receiving Department.

      4. The Receiving Department’s signature on the receiving report and goldenrod copy of the Purchase Order is the official authorization that the merchandise has been received and that payment should be made.

      5. After receipt and verification has been made, the signed goldenrod copy of the Purchase Order will be immediately forwarded to District Accounts Payable.

   2. Responsibility of Originating Department

      1. The Originating Department is responsible for final verification and approval, in a timely manner, of incoming merchandise.

         1. Whenever possible, a joint verification should be made by the Originator and the Receiving Department upon delivery.

         2. If a joint verification is not possible, the Originator will check the shipment and notify Receiving of any discrepancies with forty-eight (48) hours of receipt. Any complaint by the Originator of concealed damage, incorrect items or quantities should be made within this period.

      2. If the merchandise is delivered to the Originating Department other than by the Receiving Department, the Originator must notify the Receiving Department immediately.

   3. Partial Deliveries

      1. If the incoming shipment constitutes only a portion of the items ordered, the Originating Department will prepare a Partial Receiving Report Form (see Forms Appendix 6.6 - Form 4, for an example) listing the purchase order number, vendor, date of receipt, number of cartons, mode of shipment, and specific items and quantities received.

      2. The report should be signed and forwarded to the Receiving Department, along with any packing lists, delivery memos, or freight bills pertaining to the shipment.

      3. The Receiving Department will forward all documentation to District Accounts Payable to authorize a partial payment of the Purchase Order. Prompt forwarding of all records is imperative, as payment cannot be made until the Partial Receiving Report Form has been received.

   4. Complete Deliveries

      1. When all merchandise has been received, or any unshipped portion of a Purchase Order has been canceled, the goldenrod copy of the Purchase Order must be signed, dated and forwarded to District Accounts Payable immediately. Prompt forwarding of all records is imperative, as payment cannot be made until the goldenrod copy of the Purchase Order has been received.

   5. Reporting Discrepancies

      1. A vendor cannot be compelled to correct errors which are not reported immediately after receipt of shipment.

      2. When a discrepancy exists as to the items or quantities received, the Receiving Department must notify District Accounts Payable and forward a written "Discrepancy" memo. This memo, along with the Partial Receiving Report (see Forms Appendix 6.6, Form 4 for an example), the packing slip, and all other shipping documents must be forwarded to District Accounts Payable.

4. Damaged Merchandise

   1. If shipping damage is discovered, the shipment or the damaged articles must not be refused. When a shipment is rejected and returned to the shipping point, the carrier cannot make inspection and the right to file a claim is lost.

   2. When visible or concealed damage has been found, the damaged items will be held in the receiving location. All containers and inner packing materials will be kept until an inspection has been made by a carrier inspector.

      1. The Receiving Department will immediately notify the carrier of damage and request an inspection.

      2. The Receiving Department will notify the District Purchasing Department of the damage and date that the inspection was requested. If an inspection has not been made within five (5) days of request to the carrier, Purchasing should be notified to make a second request for inspection, in writing.

   3. The inspector will be allowed to examine any damaged items, cartons, inner packing materials and shipping documents.

      1. The inspection report will not be signed by the Receiving Department unless all facts and conclusions are valid, fair and accurate. The inspection report is used as the basis for claim settlement.

      2. If repair to damaged articles cannot be completed satisfactorily, the inspector will be informed that replacement is desired.

   4. After an inspection, damaged items cannot be used or disposed of without written permission from the carrier. If damaged merchandise is surrendered to the carrier for salvage, a receipt must be obtained.

5. Filing A Claim

   1. Terms of Shipment

      1. Purchase Orders state that all orders are "F.O.B. Destination." The shipper retains title to and is responsible for merchandise until it is delivered in acceptable condition at Lone Star College System, unless other arrangements have been made.

      2. If items are shipped under any terms other than "F.O.B. Destination", Lone Star College System assumes title to the material when the shipper releases the goods to a carrier at the point of origin of the shipment.

   2. Claims Filed by the Supplier

      1. If damage occurs in a shipment that is received on the basis of "F.O.B. Destination", the responsibility for filing a claim and for repairing or replacing the merchandise rests with the supplier.

      2. It is the District’s responsibility to provide the vendor with timely notification of damage, to furnish the Bill of Lading and freight bill, and to hold the damaged articles and all packing materials until disposition of the goods has been determined.

      3. The District Purchasing Department is responsible for conducting all negotiations with the vendor for filing of claims and replacement of goods.

   3. Claims Filed by the District

      1. If damage occurs in a shipment that is received on any basis other than "F.O.B. Destination", the District is responsible for all claims-filing procedures. In such cases, the purchase order will state "F.O.B. Shipping Point", "F.O.B. Factory", or "Prepay and Add".

      2. The College Receiving Department will obtain claim forms from the carrier’s claims agent and forward them, along with the inspection report and all shipping documents, to District Purchasing.

      3. District Purchasing will prepare the appropriate claims forms and send them, along with the invoice, bill of lading, freight bill, and other supporting documents, to the claims section of the delivering carrier by Certified Mail.

      4. Receiving will retain all merchandise and packing materials until notified by District Purchasing of the disposition of the claim by the carrier.

      5. District Purchasing will add to the claim any extra costs incurred as a result of transportation loss or damage. These extra costs may include a reasonable amount of overhead; cost of replacement; labor to repair, dismantle or reassemble; freight; and travel expenses. District Purchasing shall be notified of all costs applicable to shipping damage so that it may be taken into account in filing the claim with the carrier. (It is illegal to attempt to make any kind of profit from transportation losses, but the consignee is entitled under the law to regain the same financial position before the loss or damage occurred.)

      6. If the amount of loss or damage is insignificant (i.e. under $25.00), filing a claim should not be pursued.

6. Collect Shipments

   1. Whenever possible, all orders specify "F.O.B. Destination.", requiring the shipper to prepay and absorb all shipping costs. The freight bill for such orders will be marked "Prepaid" and the carrier will invoice the shipper for all charges.

   2. It may be necessary to place an order for a shipment on a "collect" basis. The freight bill will be designated "Collect" and charges will be billed to the District by the carrier. Some carriers will accept payment on delivery. A check request should be processed in advance and the check will be held in the College Business Office until the merchandise is received.

   3. Receiving will examine all freight bills to determine if an incoming shipment was forwarded on a prepaid or collect basis.

   4. Most collect shipments are through the shipper’s error and should be prepaid.

      1. A shipment which is received "Collect" in error will not be refused if there is an open purchase order for the goods.

      2. If the Purchase Order states "F.O.B. Destination" and freight bill is marked "Collect", the Receiving Department will take shipment in the normal manner and notify District Purchasing of the problem.

      3. The Receiving Department will forward the freight bill to District Purchasing.

      4. District Purchasing will notify the carrier and the vendor of the error and make arrangements for the vendor to assume the full responsibility for payment of the freight charges.

   5. When an order is placed on a "Collect" basis, District Purchasing will note the terms of shipment on the purchase order and notify the Receiving Department to expect this manner of shipment.

      1. When a "Collect" shipment has been received, all paperwork will be forwarded to the College Business Office to be held until receipt of billing copy of the freight bill.

      2. Upon receipt of the billing copy of the freight bill, the College Business Office will process a check request for payment .

1. Purchase Requisition

2. Purchase Order

3. Purchase Order Change Notice

4. Partial Receiving Report Form

5. W-9, Request for Tax Payer Identification Number and Certificate - sample