Process & Policies

All purchases of goods and services must be made in accordance with university policies and procedures (see SPG 507.01). Adherence to these policies and procedures ensures that procurement activities will be done in an open and competitive environment and that all prices paid by the university will be fair and reasonable.

Procurement Services provides oversight for all purchasing activities conducted by academic and administrative employees. Purchasing activities require proper transaction documentation, fiscal responsibility, ethical behavior, adherence to federal and state government regulations, and compliance with university bylaws and policies.

Failure to comply with procurement policies and procedures may result in suspension of use of the M-Pathways online procurement system, PCard and non-PO voucher system, and/or disciplinary action, which may include discharge.

Authority for the procurement of goods and services lies with the U-M Regents who have delegated this authority, through the Executive Vice President and Chief Financial Officer, to Procurement Services. See SPG 507.01 for additional information on procurement authority.

Faculty and staff are authorized to commit funds on behalf of the university for the purchase of goods and services totaling less than $10,000 per transaction. Contact Procurement Services for exceptions to this transaction limit. See SPG 507.01, Section XI Competitive Bid Process for information on procuring goods and services costing $10,000 and more.

Procurement Services maintains signature authority for all procurement contracts and agreements. Contracts and agreements (e.g., licenses and maintenance) requiring a university signature, regardless of dollar amount, must be forwarded to Procurement Services for processing. University employees who sign contracts or agreements may incur a personal liability. See SPG 601.24 for additional information.

Procurement Services staff is available to assist you with:

Competitive Bid Requirement and Process

The U-M Regents require that all transactions $10,000 and greater be competitively bid. Competitive bidding is the process that allows Procurement Services to properly survey the marketplace and evaluate a number of factors in addition to the purchase price. SPG 507.01 details responsibilities required of both the purchasing unit and Procurement Services. Exceptions to the $10,000 bid limit include orders placed under some Strategic Contracts.

Choosing the Appropriate Buying Method

Before you buy, consider which buying method is most appropriate. The buying methods are listed below in the preferred order of use.

Receiving Goods

Departments are responsible for making sure that the suppliers send their orders to the proper location. All end users are assigned a Ship To value based on Department ID as part of M-Pathways security set up. The Ship To value is the delivery address and includes the room number. This information resides in a database of all university owned or occupied space and will automatically populate the ePro requisitions that are created via M-Pathways and M-marketsite.

M-Pathways and M-marketsite users should set up their profiles using this Ship To value. The purchase order sent to the supplier will then include the proper address including room number to ensure proper delivery of goods.

Shipping to a non-university address is typically not allowed, unless there is an appropriate business purpose to do so. Departments must receive prior approval from Procurement Services to ship goods to a location other than an official university address.

Returns and Damaged Goods

Departments should handle their own returns and report damaged goods to the supplier. If the damage is visible, the delivery personnel should note it on the paperwork at the time of delivery and leave a signed copy with you. Concealed damage needs to be reported to the trucking company as soon as it is discovered. See SPG 507.01 for further information.

Strategic Supplier Sourcing

Strategic Supplier Sourcing is a collaborative approach used by Procurement Services to consolidate and leverage the university’s spend to reduce costs while maintaining or improving quality of the goods and services the university buys.

Fiscally Responsible Procurement

University faculty and staff are responsible and accountable for all transactions they make or authorize others to make.

  • Plan your purchases.
  • Choose the appropriate buying method.
  • Spend within your budget and spending limit.
  • All transactions should be reconciled to the statement of activity on a timely basis.
  • Maintain proper separation of duties in your unit, i.e., the person responsible for buying goods should not be the same person who reconciles the statement of activity.
  • Use the knowledge and experience of Procurement Services’ procurement agents, who are here to assist you with the procurement process.

Socially Responsible Procurement

The university strongly supports supplier diversity, socially responsible procurement, and sustainability. Diversifying the university’s supplier portfolio means better prices and higher-quality products and services through increased competition. Procurement helps the university community by promoting suppliers who embody the characteristics we value.

Contract Monitoring

Please see the Contract Monitoring document for more details on the responsibility of both the unit and Procurement Services based on the different contract types. 

Restricted Commodities

The university prohibits some goods and services from being purchased; other purchases require special approvals. Procurement agents review each transaction request and route them to the appropriate unit for approval, at which time the transaction can be processed. 

Purchase of a restricted commodity or service made without obtaining proper approval is considered an unauthorized purchase and will be reported to the U-M Regents.

List of restricted goods and services and those that require special approval.

Conflict of Interest

Conflict of Interest is a legal matter, not just a university policy.  The State of Michigan Conflict of Interest Statute (MCLA 15.322 et seq.) states that the university may not enter into a contract with any of its employees (or a company in which an employee has an interest), without first disclosing certain information, and receiving approval by a two-thirds vote of the U-M Regents, before completing the transaction.

HIPAA Compliance

HIPAA, the Health Insurance Portability and Accountability Act of 1996 requires the university to sign confidentiality agreements with all business associates. Business associates are people or suppliers that do not work for the university but who need access to our patients’ protected health information (PHI). Procurement Services will assist departments in this process.

Tax Exempt Status

The university is exempt from the payment of sales and use taxes. The Michigan Sales and Use Tax Certificate of Exemption, can be used in accordance with SPG 502.03 for university business.

Information Technology Security & Privacy

The use of third-party service providers can offer opportunities for cost savings and added value services, but it can also increase risk to the university if those service providers have access to university data. The university attempts to mitigate those risks in several ways including a security addendum and a third-party vendor security and compliance assessment.

Procurement Services facilitates the execution of the security addendum and the appropriate use of the vendor security and compliance assessment.

Non-ink Signatures & Electronic Affirmation

Delegation of authority represents the legal power to act in the name of the U-M Regents or to bind the university to an obligation or promise.  Delegations of authority are detailed in SPG 601.24.  For those university employees with delegated authority; when signing on behalf of the university they must always use their title as contained in Table 1 of SPG 601.24, and always sign their own name in ink, except when using an approved electronic affirmation and non-ink signing procedure.

Approved Affirmation and Non-Ink Signing Procedures:

Unless otherwise prohibited by applicable law, ink signatures or seals that have been scanned into PDF formats (with the copies maintained in appropriate records, including digital storage options) or sent through traditional facsimile methods are accepted and approved by Procurement Services for all signature uses at the University of Michigan.  The use of other electronic signatures is permitted only if such signatures are permitted by applicable law and are obtained through the (1) university’s approved electronic signature software application (currently Sign Now), (2) use of the DocuSign software application when the document being signed originates outside the university, or (3) use of other software applications when the document being signed originates outside the university and the document can be downloaded, including signatures, in order for the university to maintain a copy for its records.

Other than the affirmation and non-ink signing procedures specifically set forth above, no other means of electronic signature are allowed without prior written approval from Procurement Services.