Purchasing General

I. Policy Title: Purchasing – General

II. Who Does This Policy Affect

All Board of Trustees, HFC employees, and suppliers/contractors.

III. Purpose

To provide clear direction to all HFC employees and to the contracting community on the College’s procurement process; to ensure compliance with other Board policies and with required local, state and federal laws and regulations; and to execute the procurement function under principles of ethics, integrity, and sound business practices to best serve the interests and mission of the College.

IV. Policy Statement

1. Scope

This policy applies to all purchases for materials, supplies, equipment, services, contracts, service and maintenance agreements, and leases made from all College funds controlled by the Board of Trustees, including those funds received under grants and contracts and those originating with the HFC Foundation and other outside sources. Purchases made for contracts or grants shall follow this policy, or the contract or grant, whichever is most restrictive. This policy does not apply to the following:

A. Banking Services
B. Temporary Staffing Services
C. Utility Services
D. Honorariums
E. Federally Funded Purchases (see HFC Purchasing Policy for Federally Funded Purchases)

2. Authority

Under the Michigan Community College Act (Public Act 331 of 1966, MCL 389.103 and 121 - 126), the Board has the authority and power to make plans for, to promote, or to acquire, construct, own, develop, maintain, and operate the College. The Board delegates its authority for the acquisition of goods and services and the disposition of property to the College’s President, Vice President of Financial Services, and Purchasing Director.

3. General Procurement Standards

A. Underlying Goals of the Procurement Function:
i. Give first consideration to the objectives and policies of the College.
ii. Strive to obtain the maximum value for each dollar of expenditure.
iii. Obtain required goods and services in the specified form, quality, quantity and time-frame required, and delivered at the most advantageous price.
iv. Ensure competitive bids for the purchase of equipment, materials, and services.
v. Give all recognized and responsible suppliers equal opportunity in furnishing goods and services.
vi. Allow immediate action when conditions pose an imminent threat to the welfare and safety of people or the on-going operations of the College.
vii. Execute purchasing with sound professional business practices necessary to serve the interest of the institution and the interest of the public.
viii. Avoid the intent and appearance of unethical or compromising practice in relationships, actions, and communications.
ix. Promote positive supplier relationships through professionalism, courtesy and impartiality.
x. Achieve efficient and effective management of purchasing affairs, seeking to minimize the cost of purchasing operations.

B. Non-Discrimination
When soliciting and selecting suppliers, Purchasing shall not in any way discriminate against any supplier because of age, race, color, religion, marital status, sex/gender, pregnancy, sexual orientation, gender identity, gender expression, gender transitioning, height, weight, national origin, disability, perceived disability, political affiliation, familial status, veteran status, genetics or other characteristic protected by law. Nor shall the College patronize or continue to patronize suppliers known to practice any such form of discrimination.

C. Accessibility
All products and services must be universally accessible to all members of the College community regardless of mobility, vision, hearing, cognitive, developmental ability level or diagnosis that substantially limits daily life activity as mandated by the Americans with Disabilities Act as Amended (2008) and Section 508 of the Rehabilitation Act (1973).

D. Conflict of Interest and Ethics
i. No employee, officer, or agent of HFC may participate in the selection, award, or administration of a contract if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, his or her close business or personal associate, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. HFC officers, employees, and agents may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, HFC may set standards for situations in which the financial interest is not substantial, or the gift is an unsolicited item of nominal value. This policy does not prohibit the ownership of stock in large publicly owned companies whose stock is listed and sold on a recognized stock exchange. Refer to Board Policies for “Conflicts of Interest, Conflicts of Commitment, Nepotism, and Outside Activities” and “Standards of Conduct and Civility.”

ii. Board members and College employees involved in the procurement process are expected to maintain and follow the highest personal and professional standards of integrity, truthfulness, honesty, and diligence. In order to serve the College community and to maintain public confidence and trust in College operations, these individuals must observe and continuously practice the following Board policies:
(1) Conflicts of Interest, Conflicts of Commitment, Nepotism, and Outside Activities
(2) Standards of Conduct and Civility

iii. While the HFC Office of Development (Foundation) may solicit for philanthropic support from the community and suppliers, at no time will contract awards be based on whether a contribution is received. Purchasing staff shall not participate in soliciting suppliers for contributions.

E. Economical Purchasing
i. All expenditures shall be within the limitations of the approved budget.
ii. Prior to issuing final approval on a requisition, the operating department manager must review the proposed purchase to avoid acquisition of unnecessary or duplicative items.
iii. When determining the proper solicitation method, Purchasing shall consider either consolidating or sub-dividing procurements to obtain a more economical purchase.
iv. The use of state and local intergovernmental and inter-entity agreements for common or shared goods and services is encouraged (e.g. publicly bid and awarded consortia agreements).
v. The use of local, state, or federal excess and surplus property in lieu of purchasing new equipment is encouraged.

F. Supplier Selection
i. Bids and proposals from potential suppliers shall be strictly evaluated based upon the merit of requested bid specifications. Contracts shall be awarded only to responsible and responsive bidders with the ability to perform successfully under the terms and conditions of a proposed procurement.
ii. Consideration shall be given to contractor integrity, compliance with public policy, record of past performance, and financial and technical resources when awarding.
iii. HFC shall not award a contract to any entity debarred, suspended, or otherwise excluded from or ineligible for participation in state or federal procurements.

G. Record Retention
i. Bids and Quotes: Awarded Year + 7 Years. These files may include the Invitation to Bid, the bid documents that are submitted, the reviewer documentation, etc..
ii. Contracts: Expiration Date + 6 Years. These files may include contracts, correspondence with the supplier, warranties, copies of purchase orders, etc.
iii. Payment Records: Fiscal Year + 7 Years. These files document the payment for goods and services. They may include purchase orders, packing slips, requisitions, invoices, etc.

4. Competition

A. All procurement transactions must be conducted in a manner providing full and open competition consistent with the sound business practices and within the scope of federal and state laws, local ordinances, and Board of Trustees policies.

B. The use of state or local geographical preferences in the evaluation of bids or proposals is discouraged, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws.

Note: When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.

C. All solicitations must:
i. Include clear and accurate descriptions of the technical requirements for the material, product, or service to be procured.
(1) Descriptions must not contain features that unduly restrict competition.
(2) Unreasonably restrictive product specifications should be avoided if at all possible.
(3) Descriptions may include a statement of the qualitative nature of the material, product or service desired and, when necessary, set forth those minimum essential characteristics and standards to which it must conform to satisfy its intended use.
(4) When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define the requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated.
ii. Identify all requirements that suppliers must fulfill and all other factors to be used in evaluating bids or proposals.

D. All prequalified lists of persons, firms, or products used in acquiring goods and services shall be kept current and include enough qualified sources to ensure maximum open and free competition. Potential bidders shall be allowed to qualify during the solicitation period.

5. Procurement Instruments

The College shall allow various means to purchase goods and services. Such procurement instruments may include:
A. Requisitions – Requisitions offer a means for decentralized departments to enter purchasing requests directly into the College’s business management software system (Colleague). Requisitions are entered by the operating department, approved online, and then turned into purchase orders or blanket purchase orders by Purchasing staff.
B. Purchase Order (PO) – Purchasing may use POs to order any good or service that is quantifiable in number and/or description. After the College receives and pays for the item(s) ordered, the PO closes. POs are issued for most of purchases made by the College.
C. Blanket Purchase Order (BPO) – Purchasing may use BPOs for repetitious payments for: obtaining more favorable pricing through annual volume commitments; ordering frequently used, low dollar value goods or services; ordering standard materials or maintenance supplies which require numerous shipments; contractual services; leased equipment or property; annual renewals of software licenses or other agreements; construction or renovation projects requiring progressive payments; and for other purchases of goods or services deemed appropriate by Purchasing.

i. Purchases against a BPO shall be made in accordance with provisions of Section 6, Procurement Methods, in this policy.
ii. BPOs shall be valid for a maximum of one fiscal year and closed at the end of each fiscal year. BPOs may be re-issued for the following fiscal year if requested by the operating department.
iii. At the beginning of each fiscal year, Purchasing shall present a listing of Blanket Purchase Orders to the Board for approval. Such report shall include the supplier’s name, a description of the order, the dollar limit of the order, and the department and division responsible for the purchase.
iv. During the fiscal the year, Purchasing may issue new BPOs as needed and when needed in order to maintain College operations and programs. Such BPOs shall be issued in accordance with the provisions of Section 6, Procurement Methods, in this policy.

D. Check Request – The Accounts Payable department may issue a direct payment to an entity for certain items that do not require or cannot use the purchase order or receiving process. College employees may also use the Check Request process to pay for items that include without limitation:
i. Dues, memberships, subscriptions, speakers’ fees, professional & consulting fees, registration fees, and non-travel employee reimbursements.
ii. Items that get resold at the College Store, Food Service, Hospitality, or other College operations.

E. Purchasing Card (P-Card) – Financial Services may issue P-Cards to approved employees as an alternate method of purchasing eligible business-related goods or services. The P-Card is a business credit card issued by a bank or financial institution the College with named user.
i. P-Cards may not be used for personal expenses.
ii. P-Cards are intended to supplement the procurement instruments listed above and create efficiencies in both the Purchasing and Accounts Payable Departments.
iii. All P-Card purchases are subject to Purchasing policies and guidelines.
iv. P-Card users must abide by the procedures, rules and guidelines established by Financial Services.

6. Procurement Methods

A funded and approved electronic requisition is required for all purchases before a purchase order, blanket purchase order, or a competitive bid solicitation can be issued.

Every attempt shall be made to accumulate volume within normal processing time to obtain the best price. Purchases of integrated items shall be treated as one (1) expenditure for the purposes of determining the controls which should be applied to such expenditure.

Subject to the dollar limits defined below, Purchasing shall use the following procurement methods. At Purchasing’s discretion, a more restrictive method may be used.

A. Direct Buy < $10,000 *– Purchases less than this limit may be awarded without soliciting competitive quotations if the price is considered reasonable. Orders in this dollar range must be approved by Purchasing staff.

B. Informal Quotes < $50,000 * – Purchases that total more than the Direct Buy limit but less than the Sealed Bids limit require a minimum of three (3) competitive quotes from qualified sources. If it is not possible to obtain three sources for informal quotes, those quotes obtained may be considered sufficient. Orders in this dollar range must be approved by the Purchasing Director.

C. Sealed Bids > $50,000 * – Purchases that total more than the Informal Quotes limit require solicitations through a Sealed Bid or a Request for Proposals (RFP) process. If a minimum of three (3) qualified bidders cannot be found, fewer bidders may be used provided suitable written verification is made that other bidders are not available. This written verification must be approved by the President or Vice President of Financial Services. Orders in this dollar range must be approved by the Purchasing Director and the Vice President of Financial Services or designee.
i. Sealed Bids
(1) Sealed Bids may be used when the following conditions are present:
(a) a complete, adequate, and realistic specification or purchase description is available;
(b) two or more responsible bidders are willing and able to compete effectively for the business; and
(c) the procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
(2) The following guidelines apply to Sealed Bids:
(a) Bids must be publicly advertised in a newspaper;
(b) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids;
(c) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
(d) All bids will be opened at the time and place prescribed in the invitation for bids and the bids must be opened publicly;
(e) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken.

ii. Request for Proposals (RFP)
(1) RFPs may be used when conditions do not support the use of a Sealed Bid, such as:
(a) when procuring services, including without limitation: auditing, architectural and engineering services, management consultants, and technology consultants;
(b) when the desired outcome can be identified but the methods to achieve that result cannot be completely defined; or
(c) when the procurement requires negotiations with the provider.
(2) The following guidelines apply to RFPs:
(a) The RFP must be publicly advertised, as more fully described in section iv below.
(b) Proposals must be solicited from an adequate number of qualified sources;
(c) All evaluation factors and their relative importance should be identified;
(d) The method for conducting evaluations of the proposals received and for selecting recipients should be identified;
(e) Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and
(f) HFC may use competitive proposal procedures for qualifications-based procurement of professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. This method, where price is not used as a selection factor, can only be used in procurement of professional services.

iii. Independent Architect/Engineer
(1) Competitive proposals for services on architectural projects shall be required where the architectural/engineering fees are estimated to be $350,000* or more, or the construction costs are $5 million* or more.

(2) The Board reserves the right, by majority vote of the full Board, to interview final bidders on a major project.
iv. Advertisements for Sealed Bids or Proposals – A Request for Sealed Bids or Proposals shall be advertised publicly in at least two (2) local newspapers or trade publications having a circulation within the College district. Such advertisement shall contain a statement of the time and place where all bids received pursuant to such notice will be publicly opened and read. All bids shall be publicly opened and read at the time and place so specified. At least ten (10) days shall elapse between the publication of such advertisement and the date specified for the opening and reading of bids.

D. **Board Approval: > $50,000*** – Purchases above this dollar limit must receive prior approval by the Board.

To expedite the purchasing process to enable timely delivery of goods and services to the College, students and employees, prior Board approval is not required for the College to enter into contracts with a purchase price of $50,000 or less. The President, or designee, has the right to enter into these contracts provided all applicable law, regulations, and purchasing practices are followed.

E. Sole Source – Purchases under circumstances where only one source, regardless of marketplace, possesses a unique and singularly available capability to meet the required need.
i. Sole source procurements may be used only when:
(1) The item is available only from a single source (proprietary) and obtaining competitive bids is impossible; or
(2) Substitutes have been ascertained to be unacceptable after conducting a good faith review of applicable sources; or
(3) Competition is determined inadequate after soliciting bids from an adequate number of sources.
ii. Sole source purchases over the Direct Buy maximum (see Paragraph A) must include proper justification detailing why competitive bids would not be appropriate and that there is only one source for supplying the requested goods, service or construction item.
iii. The sole source justification does not relieve the responsibility of the Requisitioner or Purchasing to obtain a fair and reasonable price.
iv. The sole source award must be approved by the President or Vice President of Financial Services.

F. Reserved Rights –
i. The College reserves the right to accept, reject, modify, and/or negotiate any or all submittals, or any part thereof.
ii. The College reserves the right to award by item, combination of items, or lot.
iii. The College reserves the right to waive any defect or informality in the submittals as deemed necessary in the best interests of the College.
iv. The College reserves the right to reject any submittal that the College determines to be incomplete, conditional, obscure, or has irregularities of any kind.
v. The College reserves the right to award a contract to the respondent or respondents that, in the College’s sole opinion, will best satisfy the College’s long-term needs.

G. Exemptions – The following procurements are exempt from the procurement methods listed in paragraphs (A) through (C) of this section.
i. Advertising – Contracts for creative professional services for purposes of advertising and promotion do not require competitive quotations under paragraph (B) of this section.
ii. Consortia Agreements – Purchases made under a cooperative agreement where the College is a member and where a documented, competitive solicitation process has been followed. Examples include: Educational and Institution Cooperative Services (E&I), National Intergovernmental Purchasing Alliance (National IPA), Regional Educational Media Center Association of Michigan (REMC), State of Michigan Extended Purchasing Program (MiDEAL), U.S. Communities Government Purchasing Alliance, and other appropriate consortium competitive bidding programs.
iii. Emergency Purchases – Purchases that require immediate action due to emergencies involving the safety and welfare of persons, the protection of property, or the restoration of services to minimize interruption of College activities. Purchases made using the emergency purchase provision require the prior approval of the President or Vice President of Financial Services, or if neither is available, the operating department’s Executive Cabinet member.
iv. Instruction Related – Purchases of textbooks, contracted instructional services, single-source instructional items, or artistic performance contracts.
v. Legal Services for Board of Trustees – The Board shall select legal counsel to represent the Board in all matters upon which the Board determines legal counsel would be of assistance.
vi. Maintenance Contracts – Maintenance or service agreements purchased from the producer or supplier of the specific item to be serviced may be made with or without competitive bidding depending on the availability of alternative suppliers and with the approval of the Purchasing Director.
vii. Professional Services – The President and designated staff will review the status of professional service agreements at appropriate intervals no longer than every five years and make recommendations regarding whether to seek competitive proposals or to continue with the existing providers.
(1) Professional services shall be defined as those services rendered by an independent contractor possessing advanced, specialized types of knowledge, expertise, or training customarily acquired by a prolonged course of study.
(2) Examples include without limitation: accountants, attorneys, architects, physicians, engineers, legislative advisors, and other professionals.
viii. Real Estate Transactions – All transactions relating to the acquisition, purchase, sale, or lease of real estate must be recommended by the President and approved by the Board. The College may enter into initial negotiations to purchase and sell land, but final approval must be given by the Board.
ix. Resale Items – Purchases of beverages, food and merchandise resold to the public by Hospitality and Culinary Arts, Food Services, The College Store or other auxiliary operations.
x. Uniformity and Consistency – The Board recognizes the benefits of purchasing equipment, fixtures, and furniture that match existing, similar, and like items where appropriate. This will: facilitate cross-training of employees; reduce the inventories of various parts and supplies; and assure quality, durability, suitability, and cost requirements. The Purchasing Department is authorized to make matching purchases without seeking substitute equipment, fixtures, and furniture. Competitive bids should be sought from suppliers who can furnish the exact specified items.

H. Transaction Splitting – Purchases may not be subdivided into separate orders with the intent to avoid purchasing policy. Activity inconsistent with Board Policy, Purchasing Policy and applicable laws and regulations will be reported to the Vice President of Financial Services for investigation and disposition.

7. Contracts

A. The Purchasing Department pursuant to delegation by the Board of Trustees shall act as the College’s agent for entering into contracts for the purchase of goods and services.

B. The Purchasing Department is empowered to purchase or contract for the supplies, materials, equipment, printing, and services needed by College departments; develop and prescribe standard specifications; enforce compliance with those specifications; supervise and control the advertisement of bids; make recommendations for awards of College purchases; and regulate the making of purchase contracts by College departments.

C. A contractual commitment is only created by the issuance of a purchase order or the signing of a contract by the President, Vice President of Financial Services, Purchasing Director, or duly authorized employee. Each supplier is responsible for knowing the legal authority of College staff to enter into a contract. Contracts entered without proper authority and appropriate legal documents are null and void.

D. Non-authorized personnel who sign or execute purchase contracts financially committing the College assume personal liability.

E. The College may terminate any contract with any supplier by providing said supplier with a maximum of ninety (90) days written notice of intent to terminate. A termination provision shall be included in all contracts that are bid; however, failure to include such a provision in each contract does not relinquish the College’s right to terminate a contract.

F. Unauthorized purchase agreements or contracts may be disallowed by the Board of Trustees, President or designee, Vice President of Financial Services, or Purchasing Director.

G. Refer to the Board’s Contract Review Policy.

8. Surplus Property Disposal

The Purchasing Department shall be responsible for the disposal of surplus, obsolete, and inoperable equipment.

A. Methods to dispose of vehicles and other equipment shall include:
i. Include as a trade-in when purchasing a new or replacement product;
ii. Offer to other College departments;
iii. Offer to Dearborn Public Schools;
iv. Offer to the public at a public sale;
v. Offer to a scrap dealer;
vi. Place in a dumpster or appropriate waste container.

B. Purchasing shall take into consideration the most efficient and expeditious method to dispose of surplus property.

C. Requirements for Public Sales of Surplus Property:
i. Purchasing shall place ads for a Surplus Property Sale in at least two (2) local newspapers having a circulation within the College district. A minimum of 10 days must pass between the advertisement date and the bid due date.
ii. Purchasing shall prepare the Surplus Property Sale notices and bid documents, shall receive any bids submitted, and shall conduct a public bid opening at the specified due date and time.
iii. The surplus property shall be sold on an “as is - where is” basis with no warranty of any kind. The bidder is responsible for inspecting and assessing the physical condition of the property. All sales are final upon acceptance of the best reasonable offer.
iv. The winning bidder shall generally be given 48 hours to make full payment at the Cashier’s Office by cash, credit card, certified check, cashier’s check, or money order.
v. Upon acceptance of the bid offer, the property becomes the responsibility of the bidder and must be removed from the College generally within ten business days. If the bidder fails to remove the property within the allotted time, the College may dispose of the equipment at its discretion; no refunds will be made.
vi. The proceeds from surplus property sales shall be deposited into the General Institutional - Miscellaneous Revenue account.

D. The College shall not "give away" or "donate" surplus public property unless approved by the President or Vice President of Financial Services. This method of property disposal can be abused by individuals who make a surplus designation for their own benefit or the benefit of their friends, family, and associates.

9. Donations and Sponsorships

College resources may not be used to make charitable donations or purchase sponsorships unless authorized in advance by the President or designee.

10. Small and Minority Businesses

A. HFC shall take affirmative steps to include certified Disadvantaged Business Enterprises (DBEs) in the procurement process.

B. DBEs are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations. African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed by the government to be socially and economically disadvantaged. (U.S. Department of Transportation, Office of Civil Rights)

C. Affirmative steps include:
i. Placing qualified DBEs on solicitation lists;
ii. Assuring that DBEs are solicited whenever they are potential sources;
iii. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by DBEs;
iv. Establishing delivery schedules, where the requirement permits, which encourage participation by DBEs;
v. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration, the Minority Business Development Agency of the U.S. Department of Commerce; and the Michigan Minority Supplier Development Council.
vi. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (i) through (v) above.

11. Bonding Requirements

Construction or facility improvement projects, greater than the Board of Trustee approval limit set in Section 6 of this policy, require the following bonds:

A. Bid guarantee (bid bond or certified/cashier’s check) equivalent to 5% of the total bid price.

B. Performance bond equivalent to 100% of the contract price.

C. Payment (Labor & Material) bond equivalent to 100% of the contract price.

12. Bid Appeal Procedure

Bidders, who have submitted a quote, bid or proposal, may appeal an award decision. A bidder who submits a "No Bid Response" cannot appeal an award. To appeal an award, a bidder must:

A. Request an appeal of the award, in writing, to the Purchasing Director within (48) forty-eight hours of the award.

B. The appeal should contain the bid number, description of the bid, a clear and concise statement of the reason and supporting evidence for the appeal and the desired remedy that the bidder is seeking.

C. The following issues are not considered to be appealable issues:
i. Failure to properly submit a bid per the bid instructions.
ii. Failure to submit a bid on or before the due date and time.
iii. Failure of a bidder to provide the required bid deposit, payment bond, or performance bond by the date and time specified.

D. Following an investigation and review, the Purchasing Director will provide a written decision.

13. Waiver of Policy

Waiver of the provisions of this policy, other than those delineated above, may only be approved by the Board of Trustees or the President. Reasons for such variations will be set forth in writing and will be kept on file in the Purchasing Department.

V. Definitions

1. Accounts Payable: The value of goods or services received from suppliers and other creditors for which invoices have been received but not yet paid by the buying organization. Also, that branch of an organization which receives invoices and processes payments to suppliers and creditors.
2. Bid: A legally binding offer to sell or to buy. In public-sector purchasing, a bid is an offer in a sealed bidding process.
3. Bid Bond: A surety bond or certified payment included in a bid response that protects the buying organization if the winning bidder fails to undertake the contract under the terms at which they bid.
4. Blanket Purchase Order: A term commitment (usually one year or more) to a supplier for certain goods or services over a predetermined period at predetermined prices, or at prices to be determined based on market or other conditions.
5. Competitive Bidding: A common method of selecting sources for contract awards. Suppliers interested in participating in the process are asked to submit information on prices and other specified elements of performance. Major public-sector purchases commonly are awarded on a sealed bid basis, with the law requiring that the award be made to the lowest responsive and responsible bidder.
6. Consortium: When several organizations combine their purchasing power for selected items to gain leverage in the marketplace and reduce costs. They may form or utilize a centralized buying service or cooperate informally.
7. Disadvantaged Business Enterprise (DBE): Any legal entity, organized to engage in commercial transactions, that is at least 51% owned and controlled by one or more minority persons who are American citizens. Ownership interest in the organization must be real, substantial and continuing.
8. Honorarium: A payment granted in recognition of a special service or distinguished achievement for which custom or propriety forbids any fixed business price to be set.
9. Payment Bond: A surety bond that protects the buying organization against liens that may be filed against the sourcing organization if the prime supplier does not pay its suppliers, subcontractors or employees.
10. Performance Bond: A surety bond that secures the performance and fulfillment of all the undertakings, covenants, terms, conditions and agreements contained in the contract. It is normally accompanied by a payment bond (particularly in a construction contract) and is provided after the submission of a bid bond.
11. Procurement: Organizational function that includes specifications development, value analysis, supplier market research, negotiation, buying activities, contract administration, inventory control, traffic, receiving and stores.
12. Proposal: Submission by a supplier, often made in response to a purchasing organization's request, that forms the basis for negotiations, prior to the creation of a contract. The law may treat a proposal as a binding offer.
13. Purchase: To acquire goods or services by the payment of money or its equivalent; buy.
14. Purchase Order (PO): A legally binding document prepared by a purchaser to describe the terms and conditions of a purchase.
15. Purchasing: A major function of an organization that is responsible for acquisition of required materials, services and equipment.
16. Purchasing Card (P-Card): A payment method whereby requisitioners receive permission to order directly from suppliers for limited dollar value purchases that could not otherwise be made through the purchasing system by using a credit card issued by a bank or major credit card provider.
17. Requester/Requisitioner: The person who initiates a purchase requisition.
18. Requisition: A written or computerized request from an internal user/customer to purchasing for the procurement of goods or services from suppliers.
19. Responsible Bidder: Offerors responding to invitations to bid or requests for proposals who are determined to be capable of fully performing the contract requirements.
20. Responsive Bidder: Offerors responding to an invitation to bid or request for proposal who have submitted a bid that conforms to the invitation for bid.
21. Supplier: An organization that provides goods and/or services to a purchasing organization.

VI. Responsible Party for Administration and Enforcement

Vice President of Financial Services
Purchasing Director

VII. Related Documents
Board Policy Operations Policy on Compliance Lobbying and Supplanting of Funds and other Federal and State Laws, Rules, and Regulations | HFC Policies (hfcc.edu)
Board Policy 6300 Disposition of Surplus Property 6300 Disposition of Surplus Property | HFC Policies (hfcc.edu)
Board Policy on Conflicts of Interest, Conflicts of Commitment, Nepotism, and Outside Activities Conflict of Interest, Conflicts of Commitment, Nepotism and Outside Activities | HFC Policies (hfcc.edu)
Board Policy on Contract Review Contract Review Policy | HFC Policies (hfcc.edu)
Board Policy on Payment of College Obligations Payment of College Obligations | HFC Policies (hfcc.edu)
Board Policy on Standards of Conduct and Civility Standards of Conduct and Civility | HFC Policies (hfcc.edu)
Purchasing Current Year Bidding Limits and Thresholds
Purchasing Policy for Federally Funded Purchases
Michigan Community College Act of 1966 (Public Act 331 of 1966, MCL 389.1 - 389.195) mcl-act-331-of-1966.pdf (mi.gov)
 
VIII. Policy History:

a. Current Policy Adopted by Board: November 25, 2024

This policy supersedes and replaces any and all policies or guidelines related to this subject: