U-M’s Strategic Supplier Program involves establishing relationships with certain suppliers that provide negotiated discounts on a wide variety of products and services to the university community. The program enables U-M to reduce costs, enhance supplier/contract management, reduce the number of competitive bids, and provide better customer service to purchasers at the university. Examples of some items covered by the program include office supplies, lab equipment, catering, and computer hardware and software. On an annual basis, the Strategic Supplier Program saves units across the university millions of dollars.
The Strategic Supplier Program includes a two-percent program fee that is charged to participating suppliers. An internal review of U-M’s accounting practices for federal sponsored projects determined that the program fee is actually a discount that should be passed onto any federal organizations that sponsor research and other activities.
U-M began passing the program fee discount onto federal sponsored projects on April 1, 2019. There will be a separate credit transaction on the Statement of Activity by Project/Grant Voucher Detail Expense Report. This transaction will reflect the applicable percentage discount, original transaction date, and original transaction voucher ID in the Invoice ID and Reference fields.
The university self-reported the issue to the federal government in February 2019 and is awaiting a response.
The program fee funds the cost of the Strategic Supplier Program, which includes, among other things, software, hardware, and personnel. The program fee represents two percent of the invoice price and is charged to suppliers participating in the Strategic Supplier Program.
In 2018, a team in Finance conducted an internal review of U-M’s accounting practices for federal sponsored projects and determined that the program fee is actually a discount that should be passed onto any federal organizations that sponsor research and other activities.
May 1, 2019
U-M leadership is currently evaluating ways to apply the program fee discount to all purchases made under the Strategic Supplier Program.
Review this linked document for detailed information on how to prepare a JE for these transactions. If you have further questions after reviewing the document, contact your Sponsored Programs Customer Service Coordinator.
If you have other questions, please contact the Procurement Solutions Team at (734) 764-8212, prompt 2, or procurement.services@umich.