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General Purchasing Policy
Responsible Official: Chief Financial Officer
Responsible Offices: Tax and Revenue
Services
Policy Purpose
East Tennessee State University (ETSU) is required by state and federal law to establish and
maintain a system of internal control. The purpose of this policy is the establishment of
procedures for obtaining goods and services.
Policy Statement
This policy governs the purchasing process. For questions about the purchasing process you
should contact the Procurement and Contracts Office.
I. Principles
A. All purchases must comply with this policy and the laws of the State of Tennessee
for the purchase of goods and services.
B. The purchase must support the mission and purpose of the University.
C. The purchase must not be personal in nature.
D. The amount expended should be reasonable.
E. Employees of the University serve the interests of the State of Tennessee and must
comply with the University Conflict of Interest Policy (Section VI.C).
F. The President of the University has delegated authority to the Associate Vice
President for Tax and Revenue Services and the Manager/Director of Procurement
and Contracts to make purchase commitments. The President of the University has
delegated authority to the Associate Vice President for Tax and Revenue Services and
the Manager/Director of Procurement and Contracts to sign contracts for the
University when they are associated with purchase orders. No employee has authority
to make any purchase commitment, enter into any contract for goods or services, or
otherwise act with respect to third parties which may be construed as financially
binding to the University except through the authority of Tax and Revenue Services,
unless specifically authorized by other applicable University policy or in writing by the
President. This policy applies to all expenditures of funds administered by the
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University, regardless of origin. This policy does not apply to agency funds set up with
ETSU Financial Services.
G. The ETSU Standard Bid Terms and Conditions and the ETSU Code of Ethics in
Procurement and Contracting (Section VI) are adopted as minimum standards in the
procurement of goods and services.
H. Except as specifically provided in other University policies and guidelines, authority
pursuant to those policies shall not include the purchase or lease of real property, the
purchase of insurance, or purchases for capital outlay projects from any fund source
whatsoever.
I. No employee of the University responsible for initiating or approving requisitions shall
accept or receive, directly or indirectly, from any person, firm or corporation to whom
any contract may be awarded, by rebate, gift or otherwise, any money or anything of
value whatsoever, or any promise, obligation or contract for future awards or
compensation. Whenever any contract/purchase order is awarded contrary to this
provision, the contract/purchase order shall be void and of no effect, and if the
violation was intentional, the employee responsible for the purchase shall be liable
for any state funds paid contrary to this provision.
II. Purchasing
A. Planning a Purchase - In preparation of the purchase of goods and services, a clear
description of the requirements or specifications is the basis for assuring that
departmental needs will be met. The approving authority from the ordering
department must assure that funds have been appropriated and are available for the
purchase of materials, supplies, equipment or services prior to award of a contract.
The ordering department is responsible for determining that all items to be purchased
are necessary.
B. Purchase Requisition Procedures - Purchase requisitions should be submitted online
by accessing University purchasing system. Purchase requisitions are submitted by the
ordering department, approved by the appropriate officials and forwarded
electronically to the Procurement and Contracts Office for processing into a bid or a
purchase order.
C. The purchase requisition should include, but not be limited to the following:
1. Information describing the purpose of the acquisition, technical
requirements, bidder qualifications, and any other information considered
relevant to the goods or services being acquired. Whenever possible, all
specifications for materials, supplies, equipment and services shall be
worded or designed so as to permit open and competitive bidding.
2. The quantity or number of articles or services required.
3. The estimated cost of goods or services.
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D.
Additional Purchasing Methods - In addition to the purchase requisition, other
purchasing methods, such as the Procard and contract purchases may be available.
E. Competitive Bidding and Specifications - All purchases valued at $25,000 or more shall
be based upon the principles of competitive bidding except as provided herein. The
unit of analysis for application of the bidding threshold is the individual invoice, receipt,
purchase order, estimate, etc. Primary responsibility for determining a single purchase
is with the department. The Procurement and Contracts Office shall review purchases
to ensure compliance with this Policy. Departments shall not intentionally divide
invoices, receipts, purchase orders or estimates to stay below the $25,000 threshold.
Whenever possible, all specifications for materials, supplies, equipment and services
shall be worded or designed so as to permit open and competitive bidding for the
supplying of the articles, commodities or services to which they apply.
F. Bidding is required when the total purchase amount is $25,000 or more. A minimum
of three bids is required when the total purchase amount is $25,000 to $75,000.
Departmental personnel may contact sources of supply for quotes when the amount
of the total purchase is $25,000 but less than $75,000. The Procurement and Contracts
Office will assist in the development of specifications and provide capable suppliers
upon request. The Procurement and Contracts Office is also available to obtain the
bids. All bid information is to be attached as internal information on the purchase
requisition in the University purchasing system. If available, furnish with the purchase
requisition such specifications, catalog pages, brochures, or other data as will provide
an adequate basis for determining the quality and functional capabilities of the
products being requested.
G. The Procurement and Contracts Office will issue bids for goods and services $75,000
or more. Exception to this are construction contracts in which the Office of Facilities
Management as the State Procurement Agent will route any construction contracts
over $100,000 to the Office of State Architect for approval. These contracts are signed
by the President, Legal and the Chief Financial Officer.
H. The University shall actively solicit bids from small, minority, service-disabled veteran,
and woman-owned businesses in order to obtain a fair proportion of goods and
services from such businesses, whenever possible.
I. Non-Competitive Purchases - Goods and services over the bid threshold may be
procured without competitive bidding only if such purchases are justified in writing and
approved by the President, Associate Vice President for Tax and Revenue Services, or
Manager/Director of Procurement and Contracts.
J. Emergency Purchases - Requests for purchases of specific materials, supplies,
equipment, or services may be made in the open market for immediate delivery only
to meet bona fide emergencies arising from any unforeseen cause. The President must
approve all bona fide emergency purchase requests of $750,000 or more. The Chief
Operating Officer must approve all emergency purchases less than $750,000. A written
report on the circumstances of any such emergency justifying the purchase shall be
prepared by the ordering department and maintained by the University. All emergency
purchases shall, if practicable, be made on the basis of competitive bids.
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K.
Contracts and Agreements - All contracts and agreements will be in conformance with
ETSU policy on Contracts and Signature Authority and other State requirements.
L. Fiscal Review- Certain procurements/contracts require approval by the President, the
Board of Trustees, and State of Tennessee Fiscal Review Committee. (Allow a
minimum of 75 days prior to the effective date of the agreement). This includes
procurements/contracts that meet all of the following criteria:
i Contracts that are non-competitive; and
ii Contracts that have the potential of being for a period of more than one
year; and
iii Contracts that exceed $250,000 in total value (including all potential
renewals)
M. Prohibited Transactions - No personal items shall be purchased through the University
or from funds of the University for any employee of the University or any relative of
any employee. Personal gifts for employees cannot be purchased with university funds.
Whenever any contract/purchase order is awarded to the contrary to this provision,
the contract/purchase order shall be void and of no effect, and if the violation was
intentional, the employee responsible for the purchase shall be liable for any state
funds paid contrary to this provision.
III. Special Purchasing Considerations
A. Business Meals – The University may pay or reimburse properly documented meals
when the primary purpose is a business discussion. Business meals generally include
at least one non-university employee. However, occasional gatherings of University
employees may also be reimbursed as business meals. Expenses may be incurred only
for those individuals whose presence is necessary to the business discussion.
In addition to an itemized receipt, IRS rules on substantiation of business expenses
require documentation of the time, date, place, specific topic of discussion and
attendees at the meals. The documentation requirements apply to all on-campus or
off-campus business meals, regardless of payment methods. Accordingly, all on-
campus dining facilities require this documentation for all meals charged to
departmental accounts.
Under no circumstances will alcohol expenditures be reimbursed. The University will
deny reimbursement for meal expenses that lack documentation or a clear business
purpose. Gatherings that are primarily social in nature do not qualify for payment or
reimbursement as business meals.
B. Faculty/Staff Recognition Events – Institutional funds may be used to purchase food
and non-alcoholic beverages for recognition, appreciation and/or retirement events.
Expenses for these events must be reasonable. Recognition gifts and retirement
plaques are allowable up to a reasonable value limit per employee/retiree recognized.
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IV. Examples of Purchases Not Allowed with University Funds
A. Gifts and flowers except for officially sponsored events and student activities
B. Personal purchases for employees or students
1. Professional license fees examples: any Tennessee State Health Professional
Board, or other state or national professional board licenses
2. Memberships, Dues and Subscriptions examples: any personal membership,
dues, or subscriptions in the name of the individual, Any civic organizations, or
professional organizations in the name of an individual. To be allowed the fee
has to be an Institutional fee in the name of ETSU, a College, or a Department,
not an individual.
3. Purchases for office use examples: decorations for private offices, coffee
pots, microwaves, tissues, food, drinks, cups, plates, etc.
C. Employee monetary awards/rewards examples: cash, gift cards or gift certificates.
Employee awards are provided using processes established in the Foundation and
are paid through Payroll as extra compensation.
V. Permitted Transactions for Non-Employees with University Funds
A. Honoraria
B. Token of appreciation for service rendered - $50 or less per person
C. Incentives/Rewards for participating in research studies, surveys, or projects, or for
attending events
D. Promotional items for give-away in order to promote departments and
departmental programs
E. Gift cards: Gift cards are allowed to be purchased for payment to research participants
only. Non-employee and non-resident alien research participant payments are limited
to a maximum of $50 per payment and a total payment of less than $600 to any one
research participant. The department must retain a copy of the research participant
name, address, social security number and signature acknowledging receipt of the gift
card. Department must be able to show that all the gift cards were distributed. These
records are subject to audit by university and State Audit. A request to purchase gift
cards should be sent to Accounts Payable for a check to be issued to the vendor.
University Procards cannot be used to purchase gift cards.
F. Cash payments: Cash payments are allowed for research participants only. Non-
employee and non-resident alien research participant payments are limited to a
maximum of $50 per payment and a total payment of less than $600 to any one
research participant. Any individual research participant payment over $50 must be
processed through Accounts Payable via a check to the individual research participant.
Complete the Cash Payment to Research Participants form and return it to Financial
Services before any funds can be distributed. Research participant name, social
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security number, address and signature acknowledging receipt of the cash must be
obtained. Differing from the use of gift cards, the petty cash receipts are returned to
the Bursars Office when the petty cash account is closed out at the end of a grant or
when the fund is replenished. The receipts are retained in the Bursars vault and are
subject to audit by university and State Audit. Note: Whether gift cards or cash are
distributed, a method of securing cards or cash is needed.
VI. Code of Ethics in Procurement and Contracting
The code of ethics was developed by East Tennessee State University, approved by
the Board of Trustees, and shall be applicable to all ETSU employees who are
primarily responsible for the purchase of goods or services for the institution.
A. Statement of Policy
1. Employees must discharge their duties and responsibilities fairly and
impartially.
2. They also should maintain a standard of conduct that will inspire public
confidence in the integrity of the institution.
B. General Standards of Ethical Conduct
1. Any attempt to realize personal gain through public employment, inconsistent
with the responsible discharge of that public employment, is a breach of public
trust.
2. Employees shall base all purchases on the principle of competitive bidding
consistent with policies of the Board and the institution.
3. Employees shall grant all competitive bidders equal consideration, regard
each transaction on its own merits, and foster and promote fair, ethical, and
legal trade practices.
4. Employees shall not engage in bid-splitting by intentionally dividing orders for
supplies and equipment into smaller quantities to avoid policy thresholds.
5. Employees shall avoid misrepresentation and deceitful practices, and demand
honesty in sales representations whether offered through the medium of a
verbal or written statement, an advertisement, or a sample of a product.
6. Employees shall be receptive to competent counsel from colleagues, and be
willing to submit any major controversy through the appropriate appeals
processes.
7. Employees shall accord prompt and courteous reception insofar as conditions
permit to all who call on legitimate business missions.
8. Employees shall not use without consent the original designs developed by a
vendor for competitive purposes.
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C. Conflict of Interest
1. It shall be a breach of ethical standards for any employee, in the
performance of the employee’s official duties, to participate directly or
indirectly in any proceeding or application, request for ruling or other
determination, claim or controversy, or other particular matter pertaining
to any contract, or subcontract, and any solicitation or proposal thereof,
in which to the employees’ knowledge:
a. the employee or any member of their immediate family has a
substantial financial interest; or
b. a business or organization in which the employee or any member
of their immediate family has a substantial financial interest as an
officer, director, trustee, partner, or employee, is a party; or
c. any other person, business, or organization with whom the
employee or a member of their immediate family is negotiating or
has an agreement concerning prospective employment is a party.
2. Direct or indirect participation shall include but not be limited to
involvement through decision, approval, disapproval,
recommendation, preparation of any part of a purchase request,
influencing the content of any specification or purchase standard,
rendering of advice, investigation, auditing or in any other advisory
capacity.
D. Gratuities
1. It shall be a breach of ethical standards for any employee or former employee
to solicit, demand, accept, or agree to accept from another person, a gratuity
or an offer of employment, in connection with any decision, approval,
disapproval, recommendation, preparation of any part of a purchase request,
influencing the content of any specification or purchase standard, rendering
of advice, investigation, auditing, or in any other advisory capacity in any
proceeding or application, request for ruling or other determination, claim or
controversy, or other particular matter, pertaining to any contract or
subcontract and any solicitation or proposal thereof.
E. Contemporaneous Employment Prohibited
1. It shall be a breach of ethical standards for any employee who is involved
in procurement to become or be, while such an employee, the employee
of any party contracting with the particular governmental body by which
the employee is employed.
Definitions
A. Conflict of Interest - A conflict of interest occurs when the personal interests,
financial or otherwise, of a person who owes a duty to the Board of Trustees
or the University (all employees) actually or potentially diverge with the
person’s professional obligations to and the best interests of the Board of
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Trustees and University. It is a conflict of interest for any person or any
company with whom such person is an officer, a director, or an equity owner
of greater than 1% interest to bid on any public contract for products or
services for a governmental entity if such person or a relative of such person
is a member of a board or commission having responsibility for letting or
approving such contract. For purposes of this section only, "relative" means
spouse, parent, sibling, or child. It is the policy of the University that no
employee shall use their employment for personal benefit. Any appearance
of favoritism or influence in doing business is prohibited.
B. Minority-Owned Business - A continuing, independent, for-profit business
which performs a commercially useful function and is at least 51% owned and
controlled by one or more minority individuals who are impeded from normal
entry into the economic mainstream because of past practices of
discrimination based on race or ethnic background.
C. Non-Competitive Purchases and Contracts - Purchases and contracts made
when items or services are unique and possess specific characteristics that
can be filled by only one source.
D. Procard - The procurement card program available for purchases of goods
less than $5,000.
E. Service Disabled Veteran Business - Tennessee service-disabled veteran
means any person who served honorably on active duty in the Armed Forces
of the United States with at least a twenty percent (20%) disability that is
service-connected meaning that such disability was incurred or aggravated in
the line of duty in the active military, naval or air service. "Tennessee service
disabled veteran owned business" means a service disabled veteran owned
business that is a continuing, independent, for profit business located in the
state of Tennessee that performs a commercially useful function, and is at
least 51% owned and controlled by one (1) or more service-disabled veterans.
F. Small business - A business which is independently owned and operated
and is not dominant in its field of operation.
G. Surplus Property - Any University property such as movable equipment or
supplies (not real property such as land or buildings) a department
determines to be excess to its needs and for which the department has no
foreseeable requirement.
H. Unlawful Employee Activities - It is unlawful for any employee to bid on, sell,
or offer for sale, any merchandise, equipment or material, or similar
commodity, to the state of Tennessee or to have any interest in the selling of
the same to the state during that person’s term of employment and for six
months thereafter (T.C.A. § 12-4-103). Disclosure of any such transaction by
an employee or member of the employee’s family or by a business in which
an employee or member of the employee’s family has any significant (more
than 4%) ownership interest or for which an employee or employee family
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member serves as an officer is required by this policy. Family member
includes the spouse and children (both dependent and non-dependent) of a
person covered by this policy.
I. Woman - Owned Business- A women-owned business that is a continuing,
independent, for-profit business which performs a commercially useful
function, and is at least 51% owned and controlled by one or more women;
or, in the case of any publicly owned business, at least 51% of the stock of
which is owned and controlled by one or more women and whose
management and daily business operations are under the control of one or
more women.
Authority: T.C.A. § 49-8-203, et. Seq; T.C.A. § 9-2-102; T.C.A. § 9-18-102(a); Standards for
Internal Control in the Federal Government (Green Book) GAO-14-704G
Policy History
Effective Date:
Revision Date: 3/21/2022
Procedure (s)
Procedure History
Scope and Applicability
Check those that apply to this policy and identify proposed sub-category.
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