Northern Arizona University
Purchasing Policy and Procedure
Definitions

Terms in the manuals are defined as follows:

ABOR - The Arizona Board of Regents.

ADVANTAGE - College and University Financial System.

AGREEMENT - Written Contract.

BID - A firm offer from a vendor to provide goods and/or services meeting specific requirements in response to a request for quotation issued by the University.

BID SPECIFICATIONS - See "SPECIFICATIONS."

BLANKET ORDER - A contract for a specified period between the University and a vendor to furnish the commodities specified in the order on a periodic release basis and, generally, at predetermined prices.

BRAND NAME OR EQUAL - A method of describing an item to be purchased by using an actual brand, make, or model as a guide for comparison.

BUY OUT - Make full payment on an installment contract before the end of the contract period.

COMPETITIVE BIDDING - The total process of requesting multiple vendors to provide price quotations on an item or service.

COMPETITIVE SEALED BID - A formal bid submitted by a vendor in a sealed envelope that is to be opened publicly in front of witnesses at a designated place, time, and date.

CONSORTIUM CONTRACT - A contract entered into by a group of agencies or institutions that act as one agency for the benefit of all the institutions or agencies.

COOPERATIVE CONTRACT - See "CONSORTIUM CONTRACT."

DEPARTMENTAL PURCHASE ORDER (PD) - A purchase order available to departments for purchases up to $5000.

EMERGENCY - A situation that endangers lives, property, or the continuation of vital programs and that requires immediate, on-the-spot procurement of equipment, materials, supplies, or services.

F.O.B. - Free on board. A shipping term defining the point at which title to goods passes from the seller to the buyer. It is used when establishing responsibility for filing damage claims with the carrier.

FORMAL SEALED BID - See "SEALED BID."

FUNDING OUT CLAUSE - A clause in an installment or other multi-year contract that allows the University to terminate a contract without penalty if funds are not appropriated for the purpose stated in the contract.

GSA - The General Services Administration of the federal government.

PO3 - Interdepartmental Purchase Order.

INDEMNIFY - Hold the other party to a contract harmless from penalty.

INDEPENDENT CONTRACTOR - An individual or organization contracted to perform a particular service and/or produce an agreed-upon outcome, where there is no right to specifically control and direct the manner in which the job is done.

INSTALLMENT CONTRACT - An agreement that requires specific performance by one or both parties at predetermined intervals and is common use for payment in specific increments over a specific period. (Title to goods passes to the buyer upon final payment.)

INTERDEPARTMENTAL BILLING - An accounting transaction which transfers funds from the buying department’s account to the selling department’s account.

INTERDEPARTMENTAL PURCHASE ORDER - A request submitted by a department that authorize an on-campus servicing department to charge the requesting department for goods or services. The request is made using a PO3. An interdepartmental purchase order creates an encumbrance transaction.

LEASE - An agreement for the right to use property for a specified period at a specified cost. Title remains with the lessor. At no time does the lessee build equity in the property.

LEASE/PURCHASE - An agreement for the right to use property for a specified period at a specified cost. During the term of the lease, the lessee builds equity at a specified rate so that at the end of the lease period, the lessee has the option of purchasing the property at a specified amount. Title to the property usually remains with the lessor until the lessee exercises the option to purchase.

MINOR INFORMALITY - A minor deviation from the proscribed form that, when corrected, is not prejudicial to other bidders nor does it harm the University in any way.

NON-RESPONSIVE BIDDER - A bidder whose bid or proposal fails to conform in all material respects to the solicitation.

NORMAL PROCESSING TIME - The time required from receipt of a properly prepared purchase requisition by the Purchasing Office until issuance of a purchase order or contract. This time will vary according to the complexity of the procurement. Normal processing time for a requisition that does not require bidding is generally 2 - 6 working days. For more complex or costly items and those that require competitive bidding, the processing time is generally 10 - 28 working days. Requests for Proposal take 8-10 weeks.

PERSONAL SERVICES - A subcategory of services performed by an individual or organization for a specific study, project, or task with performance criteria dependent upon the expertise of the individual or organization.

PC - Commodity purchase order issued by Purchasing Services.

PD - Departmental purchase order

PO3 - On-line Interdepartmental Purchase Order.

PROFESSIONAL SERVICES - A subcategory of personal services requiring a high degree of knowledge and training. Frequently, the individual or organization providing the service (s) is professionally licensed.

PROPOSAL - An offer from a vendor to provide goods and/or services falling within general guidelines enumerated in a request for proposal issued by the University.

PROPRIETARY INFORMATION - Information that is submitted by a vendor who claims exclusive ownership of that information and that is not to be disclosed publicly.

PUBLIC INFORMATION - All information in Purchasing Services files, except proprietary information, having bearing on the award of an order or contract.

PURCHASE ORDER - An order issued by Purchasing Services (PC) or issued by a University department (PD), using the University's standard Purchase Order form, for the procurement of goods and/or services that, when accepted by the vendor, becomes a contract.

RC - On-line receiving report document.

RECEIVING REPORT - Department's acceptance of goods/services.

REAL PROPERTY - Land and permanently affixed buildings and improvements.

REQUEST FOR PROPOSAL (RFP) - A written document, issued by Purchasing Services requesting pricing and a proposed method of accomplishing the objective for an item or service for which definitive specifications cannot be written and only the desired end result can be specified, or for purchases where price is not the only basis for evaluation.

REQUEST FOR QUOTATION - A written document, issued by Purchasing Services, requesting bids on a specified item or service.

REQUISITION - Purchase request which creates a pre-encumbrance transaction. (RX document)

RESPONSIBLE BIDDER OR PROPOSER - A bidder or proposer who has the capability, experience, integrity, and reliability that will ensure good faith performance and appropriate quality of the goods or services provided.

RESPONSIVE BIDDER OR PROPOSER - A bidder or proposer who conforms in all material respects to the Request for Quotation or request for proposal.

RX - On-line requisition.

SALES TAX - A tax imposed on the vendor for the privilege of doing business in Arizona that is passed on to the buyer.

SERVICES - The furnishing of labor, time, or effort that does not involve the delivery of a specific end product other than required reports and performance.

SET ASIDES - Funds that are designated for the purchase of items from a particular vendor or group of vendors and for which other vendors cannot compete.

SMALL BUSINESS - A concern that is independently owned and operated, is not dominant in its field of operation, and (with its affiliates) meets the size standards set by the U.S. Small Business Administration.

SMALL BUSINESS (ARIZONA) - (Arizona Revised Statutes §631 (1982 & West Supp. 1987)) A business that is independently owned and operated, is not dominant in the field, and that employs fewer than 100 full-time employees or that had gross annual receipts of less than $4,000,000 in its last fiscal year.

SMALL BUSINESS (FEDERAL) - (15 United States Code §631 ( 1982 & West Supp. 1987)) A business that is independently owned and operated, is not dominant in the field of operations in which it is quoting on purchases, and, with its affiliates, does not exceed 500 full-time employees.

SMALL DISADVANTAGED BUSINESS - Any small business that is at least 51 percent owned by one or more socially and economically disadvantaged individuals or by a woman or women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more socially and economically disadvantaged individuals; and whose management and daily business operations are controlled by one or more of such individuals.

DISADVANTAGED PERSON - An individual who is both socially and economically disadvantaged. Such an individual is normally considered to be a minority.

SOCIALLY DISADVANTAGED - Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Such groups include, but are not limited to, Black, Hispanic, and Native Americans (i.e., American Indians, Eskimos, Aleuts, and Native Hawaiians); Asian-Pacific Americans ( i.e., U.S. citizens whose origins are from Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, the U.S. Trust Territories of the Pacific, Northern Marianas, Laos, Cambodia, and Taiwan); and other minorities; or any individuals found to be disadvantaged pursuant to Section 8a of the Small Business Act, 15 United States Code §637 (a) (1982).

ECONOMICALLY DISADVANTAGED - Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired because of diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged. In determining the degree of diminished credit and capital opportunities the Small Business Administration shall consider among other things, the assets and net worth of such socially disadvantaged individuals.

SOLE SOURCE ITEM - An item available for purchase from a single source only ( e.g., an item to match other items, a unique piece of equipment manufactured by one company only, an original work of art).

SOLICITATION - A request for proposal, or any other request for prices, including all specifications, plans, and other supporting documents.

SPECIFICATIONS - Descriptive information used to procure specific goods or services that may include performance requirements, physical characteristics, packaging requirements, and operating parameters of goods.

STATE PURCHASING OFFICE - The office responsible for administering the State of Arizona procurement function.

SUBCONTRACTORS LIST - A list submitted by a general or prime contractor indicating those subcontractors who will perform specified portions of the contract.

UNIVERSITY PROCUREMENT CODE - Policy adopted by the Arizona Board of Regents in compliance with Arizona Revised Statues §41-2501. This statute requires the Board of Regents to adopt rules prescribing procurement policies and procedures that are substantially equivalent to the policies and procedures prescribed in Arizona Revised Statutes §41-2501 (D) and (E).

USE TAX - A tax imposed on the purchaser for purchases made from out-of-state suppliers who are not registered with the State of Arizona to collect sales tax.

VENDOR - An individual or firm outside the University that sells goods or services.