Supplier Basics

Doing business with the university

Suppliers who would like to do business with the university should become familiar with the following important information.

Procurement authority

Procurement Services is the sole agency authorized to make commitments against university accounts for the procurement of goods and services. Only Procurement Services has the authority to negotiate and sign agreements and to change agreements.

For goods and services of $10,000 or less, purchasing authority has been delegated to individual university departments. Departments may make one-time purchases of less than $10,000 per transaction.  However, departments have not been delegated signature authority and do not have the authority to sign agreements.

Some types of purchases are restricted (for example, some types of lab supplies) and will need to be reviewed by other university departments, regardless of the dollar amount.

Terms and conditions for purchases

Tax exempt

The university is a tax-exempt institution, granted such status by authorized taxing units of the state of Michigan, and is exempt from Federal Excise Tax and Michigan General Sales Tax (see Michigan Public Act 167 of 1933, section 4 as amended).

Bidding process

It is U-M policy to bid any good or service that costs $10,000 or more. Procurement Services is the only organization authorized to conduct the competitive bidding process. Decisions to award purchase orders are based on many factors, including service, price, location, delivery, terms and conditions, and a supplier's compliance with university specifications, among others. Competitive bidding allows the university to properly survey the marketplace and purchase goods and services at fair and reasonable prices. Competitive bidding also ensures that the university is in compliance with federal, state, and university requirements.

Units may also request that Procurement Serives conduct a competitive bid process for transactions of $10,000 or less. See SPG 507.01 for more information.

Invoicing requirements

Suppliers should submit invoices to:

Accounts Payables at the Shared Services Center (SSC)
accounts.payable@umich.edu

Email is the preferred option for U-M to receive invoices, and will expedite payment. However, if email is not an option, suppliers may mail invoices to:

SSC Accounts Payable
3003 S. State Street
Ann Arbor, MI 48109-1282

Suppliers are advised to invoice against the purchase order they receive.

For more information related to invoicing requirements, visit the Shared Services website and click on Payments: Pay an invoice.

Payment terms and methods

Standard Payment Terms

Payment shall not be due prior to thirty (30) days (a) from the date the invoice is received by the university at the address indicated in the “Bill To” field on the face of the purchase order and is further qualified by the applicable purchase terms and conditions listed at the following page: http://procurement.umich.edu/purchase-terms. The standard payment method is by check issued by the university.

 

Alternate Card Based Payment Methods

The university offers several alternate electronic card based payment methods through its banking partners. Each of these programs are available with accelerated university payment terms of net15 and eliminates check payments. Two programs are available through American Express, Buyer Initiated Payment (BIP) and a virtual card program Synaptic/Paygenus. JP Morgan Chase offers the Single Use Account virtual card program. Please refer to the linked endorsement letters for additional details and information for enrolling in any of these programs.  The university does not charge any fees to suppliers for participation, any fees to suppliers associated with these programs would be governed by a supplier’s respective merchant agreement with the bank.

 

EFT-ACH or Wire Transfer

EFT-ACH payment is available to suppliers with negotiated supplier agreements and may require deferred and discounted payment terms. Wire transfers are available for select international payments, fees associated with the transfers are charged to the originating department.

Supplier code of conduct

The university has a longstanding commitment to sound, ethical, and socially responsible practices, and the ideal university-supplier partnership is one founded on such mutually agreeable and important goals. To ensure that such practices are clearly delineated for university suppliers, the President’s Task Force on Purchasing Ethics and Policies developed the University of Michigan Vendor Code of Conduct.

Healthcare Suppliers

Suppliers doing business with university colleges, schools and other units that provide healthcare services are required to comply with federal and state laws designed to prevent and detect fraud, waste, and abuse. Promptly notify appropriate university officials via the U-M Compliance Hotline if you have any compliance-related concerns.

Detailed information about university compliance standards for suppliers are posted on the U-M Health System Vendor Ethics and Compliance website. The site lists the various policies on conflict of interest disclosure and management, patient privacy, supplier/staff interactions, and appropriate conduct that suppliers are expected to comply with.

Questions about the university's healthcare compliance policies may be directed to the UMHS Chief Compliance Officer by phone at (734) 615-4400 or by e-mail at Compliance-Group@med.umich.edu.

Suppliers doing business with and accessing the University of Michigan Hospital and Health Centers (UMHHC) must register with the UMHHC Vendor Credentialing System prior to visiting the facility. When representatives visit any University of Michigan Hospital and Health Centers location, they are required to register at the designated check-in area. The representative will have to have an up to date profile in the Vendor Credentialing System to check-in and access the location.

Please advise the person responsible for managing your organization’s relationship with the University of Michigan Health System to register.

HIPAA compliance

The Health Insurance Portability and Accountability Act of 1996, or HIPAA, is the federal law that governs patient privacy. Suppliers doing work for the university who have access to our patients’ protected health information (PHI) are considered business associates and are therefore required to complete a Business Associate agreement with the University of Michigan. For more information regarding HIPAA compliance, please visit our HIPAA section.

Conflict of interest

It is the policy of both University of Michigan Procurement Services and UMHS Contracts and Procurement to address potential or actual conflicts of interest with suppliers promptly and fairly in order to ensure that they are reduced, managed, or eliminated as appropriate in accordance with SPG 507.01.

The state of Michigan statute, MCLA 15.322 et seq., has been in effect since 1984, and was last amended in 1992. It 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 Board of Regents before completing the transaction. This disclosure is made a matter of public record in the Regents’ Proceedings.

Supplier Certification (Substitute W-9) Form

Suppliers (both new and existing) may periodically need to provide a completed Substitute W-9 form to Procurement Services in order to make a purchase or for payment of goods or services.
For more information on filling out or submitting the Substitute W-9, please contact the Supplier Management team at supplier.maintenance@umich.edu at the Shared Services Center (SSC), or if you are already working with Procurement Services, contact the UM Procurement Solutions team at procurement.services@umich.edu.

Insurance Requirements

Supplier insurance requirements can be found in Section 8.0 of Basic Terms and Conditions.

Supplier Terminology

Request for Information (RFI)

An informal process for solicitation of information or presentation of ideas from suppliers. Requests for pricing are for budgetary purposes only.

Request for Proposal (RFP)

A formal process for obtaining pricing and proposals from a supplier for goods or services. Evaluations of proposals are made against established criteria and may include supplier presentations and interviews. Proposal selection may be based on a variety of factors, including price.

Request for Quotation (RFQ)

A formal process for soliciting pricing and delivery information on goods or services. Detailed specifications and delivery requirements are provided in the RFQ documentation. Supplier responses are evaluated against the specifications. The award is based on the most competitive bid that complies with the university’s specifications.

MSupplier

MSupplier enables suppliers under contract with the university to:

  • submit electronic invoices — cXML or flat file
  • review orders, invoices, and payment information
  • maintain supplier information, including contacts, addresses, and user access IDs

Diversity & Small Business program

Procurement Services practices developing supplier diversity and also welcomes opportunities for small businesses to participate in the university’s procurement of goods and services. For more information on this, please visit the MConnect program.