Puchase Orders

Blanket Orders

A Blanket Purchase Order is a type of purchase order designed to consolidate repetitive small purchases from a single supplier. It is essentially a form of open account which is limited in terms of the things which can be ordered, who can place the orders, the period for which it is to be open, and the total amount which can be ordered. This form of purchase order is useful for departments that have repetitive supply needs.

When To Use It

This method of procurement is to be used for repetitive non-capital purchases (e.g., maintenance parts, laboratory animals, gases, etc.)

When Not To Use It

Any department anticipating spending less than $2,500.00 for particular supplies during a one-year period should use the University Corporate Purchasing Card to make such purchases as needs arise. Because only certain types of repetitive purchases are suited to these methods of purchase, and because Blanket Orders do not generally provide for item-by-item priced checks, the issuance of Blanket Orders must be limited to situations where departmental needs clearly justify.

Blanket Orders may not be used to purchase capital equipment.

How To

To have Corporate Purchasing consider a Blanket Order for a particular situation, call Corporate Purchasing to discuss your requirements. A Requisition #312 is required for a Blanket Order. Make sure you specify the type of goods or materials needed, the total estimated dollar value of purchases over a one or two-year period, the date to begin the order, and the University employees authorized to initiate releases under the Blanket Order. Note*** Blanket Orders for supplies < $10,000 will have a two-year termination date.

Generally, Corporate Purchasing seeks competitive proposals or makes comparative market checks before issuing each Blanket Order. The Order specifies the type of materials which are to be furnished, shows dollar limits for both individual shipments and for the total order, and includes a list of the University's employees authorized to request delivery ("release") of materials under the order. The order also indicates the discount that is to apply, sets a schedule for the submission of invoices (usually once a month), and provides a suitable record for audit.

In establishing the Blanket Order, Corporate Purchasing, when possible and practical, seeks proposals from several qualified suppliers and will assign the order to the one whose prices, inventory and services are most likely to satisfy the requirements. If only one supplier is suitable, the Manager makes sure that the supplier's established price lists and discount will apply to each release or shipment under that Order.

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Consultant/Independent Contractor Purchase Order (Request for Services)

Personnel Policy/Procedure #122

Employee/Employer Relationships vs. Independent Contractors will govern the decision to determine whether or not an individual may be engaged as a Consultant or Independent Contractor. All staffing requirements are to be considered employee/employer relationships and paid through the University payroll process unless proven otherwise. In unique situations, departments may purchase services from independent contractors (individuals or firms).

When To Use It

NOTE: This process is applicable to individuals who are hired by the University as contractors, including sole proprietorships. The process is NOT applicable where the University is engaging the services of larger companies, such as a temporary employment agency.”

Consultants and Independent Contractors may be engaged when:

  • The required knowledge or expertise is not available at the University, or—
  • The required knowledge or expertise exists but may not be available to the department, or—
  • The services are only required for a one time task and short period of time.

Consultant/Independent Contractor relationship may exist if:

  • The individual or firm is engaged to independently perform a specific task or service for a stated rate or total fee.
  • The individual or firm is solely responsible for determining the manner and details of performance.
  • The University defines the final result or end products only.
  • All the individual's or firm's activities are done at his own risk. (The University Will Require Proof Of Minimum Insurance Prior To Performance.)
  • The individual or firm may elect to perform the required activities on or off-site.

In certain situations where an independent contractor will not be paid on a recurring basis, it may be appropriate to request payment for the contractor via a Request for Payment to Accounts Payable.

How to Request a Consultant/Independent Contractor Purchase Order

Note:  This paperwork should be submitted at least four (4) weeks prior to requesting or starting services.

  • The Submission Of These Forms Does Not Insure That A Purchase Order Will Be Issued. Departments will be notified if a review indicated that a Consultant/Independent Contractor agreement is not appropriate. If a contract is not the appropriate method for obtaining the services requested, Human Resources should be contacted concerning the employment process. Approval must be obtained prior to commencement of work. Offers extended without prior approval of human resources and/or Corporate Purchasing may be rescinded.

Process

Responsible Person

Recipient

1

If this is a new supplier, they are required to complete the Supplier Qualification Process.   This is required four weeks prior to submitting a 312 for the issuance of a Purchase Order.

https://www.urmc.rochester.edu/purchasing/supplier/qualification.cfm

Independent Contractor

Department Administrator can notify Independent Contractor to complete this process

Submit completed information to Corporate Purchasing

2

Complete and submit a 312 requisition

http://www.urmc.rochester.edu/purchasing/how-to-purchase/requisition-312.cfm

Department Administrator

Submit completed requisition to Purchasing at Box 278901

3

Complete and submit an Initial Assessment Questionnaire

http://www.urmc.rochester.edu/purchasing/documents/Initial_Assessment_QuestionnaireICvEE.pdf

Department Administrator

Submit completed Initial Assessment Questionnaire to Purchasing at Box 278901

4

Complete and submit an Independent Contractor Certification Form http://www.urmc.rochester.edu/purchasing/documents/Independent_Contractor_Certification_Form.pdf

Part  1: Independent Contractor

Part II:  Independent Contractor

Part III:  Dept Administrator

Submit completed Independent Contractor Certification Form to Purchasing at Box 278901

5

Professional Services Agreement

http://www.urmc.rochester.edu/purchasing/documents/Professional_Services_Agreement2.pdf

As designated in the Signature Authority Policy

http://internal.rochester.edu/counsel/ContractPolicy.pdf

Submit completed Professional Services Agreement to Purchasing at Box 278901

6

W-9 Request for Taxpayer Identification Number and Certification (only if Consultant/Independent Contractor is an individual.

http://www.irs.gov/pub/irs-pdf/fw9.pdf

Independent Contractor

Submit completed W-9 to Purchasing at Box 278901

The documents will initiate a review by Corporate Purchasing in consultation with Human Resources and legal counsel as appropriate of the proposed relationship to determine independent contractor/consultant or an employer/employee status in accordance with I.R.S. Regulations, Personnel Policy #122 and Finance Department policy on Taxable Payments to Individuals.

Worker Classification Guidelines

STATEMENT OF COMMITMENT

The University of Rochester is committed to hiring individuals who perform services to the University in accordance with applicable laws and regulations which govern the proper classification of individuals as either independent contractors or as employees. A primary purpose of these guidelines is to provide departments with a better understanding of why properly classifying workers (as employees or independent contractors) is so important in the first place. Another second primary purpose of these guidelines is to provide clearer University policy and process requirements for purposes of determining the proper employment or contract status of individuals who provide professional services to the University.

WHY IS PROPER WORKER CLASSIFICATION IMPORTANT?

Proper classification of workers is extremely important for purposes of compliance with federal and state laws governing worker classification, taxation, payroll, and unemployment. If it is determined that the University incorrectly classified a worker as an independent contractor when the individual should have been classified as an employee, the University can be held responsible for back payroll taxes (including FICA), back unemployment taxes, plus interest, and also be subject to significant monetary penalties. It is therefore critical that an analysis be undertaken prior to an individual beginning any work of whether the individual is an independent contractor or an employee. The individual’s own preference as to how he or she wants to be classified or hired should never be permitted to be the deciding factor in determining proper classification. To the contrary, except as otherwise provided in the guidelines below, a meaningful analysis and case-by-case review must be engaged in before simply deciding that an individual is truly an independent contractor.

GENERAL CRITERIA USED IN DETERMINING WORKER CLASSIFICATION

Generally, an employer/employee relationship exists under the common law when a worker is subject to the right of control and direction by an employer as to what work shall be done and how the work will be done. There are three primary focuses in assessing worker classification – behavioral control, financial control, and the relationship of the parties. The following chart provides some general guidelines in distinguishing between a true independent contractor and an employee:

Independent Contractor (IC)

Employees (EE)

An IC determines when, where and how work will be performed and can subcontract work or parts of the project to others and can decide what tools to use and what work must be performed to complete the project.

An EE is instructed on when, where, and how the work is performed and cannot hire or subcontract others to assist in completing the project without permission from the employer. An EE uses the employer’s tools, supplies, offices, etc.

An IC advertises services to the general pubic and may provide these services to multiple entities.

An EE might be recruited to work on a project but does not normally provide the services for anyone other than the employer.

An IC risks financial profit or loss (i.e., sets a price for services and risks loss if investment exceeds price estimate). A written contract would always be in place prior to any services being rendered.

An EE is paid by the hour and does not invest in the project. An EE consequently has no risk of financial loss as a result of working on a project.

An IC has liability insurance and is not covered by the employer’s workers compensation coverage in the event of a work-related injury; an IC also is not eligible for unemployment when a job ends.

An EE is covered by the employer’s worker’s compensation insurance and also can apply for unemployment when a job ends.

An IC’s services will almost always fall outside the normal work done within the employer’s business (i.e., the IC offers particular or unique services or expertise that no worker of the employer has and this is why the IC’s services are needed).

An EE does work that is connected to key aspects of the employer’s regular business (e.g., teaching/instructing, research, patient services, administrative functions to run the university and college, and work related to these key missions should be performed by employees).

An IC who quits before the end of a project or assignments risks a breach of contract claim.

Most EEs are at will (except for faculty members on a term contract) can resign in the middle of a project and also can be terminated by the employer at any time.

The IRS provides a 20-Factor Test for assisting in worker classification determinations. The University has adapted a version of this test (i.e., an Initial Assessment Questionnaire) strictly for internal use in assisting with assessing proper worker classification. https://www.urmc.rochester.edu/purchasing/documents/Initial_Assessment_QuestionnaireICvEE.pdf. The University also has developed a certification form to be completed by any individual who either requests independent contractor status or who, after internal assessment, has been determined to qualify as an independent contractor. This Independent Contractor Certification Form https://www.urmc.rochester.edu/purchasing/documents/Independent_Contractor_Certification_Form.pdf must be completed by the individual in advance of performing any services and an appropriate Professional Services Agreement (“PSA”) https://www.urmc.rochester.edu/purchasing/documents/Professional_Services_Agreement.pdf (describing the nature of the services and scope of work to be performed) entered into between the University and the individual.

As set forth in the University’s revised Policy and Procedure on Independent Contractors, effective July 1, 2013, the IC Certification Form and appropriate PSA must have been completed, along with the appropriate tax form and other required paperwork (e.g., a Business Associate Agreement is also required if the individual will have access to HIPAA-protected information), in order for payment to be issued to the independent contractor.

Predetermined worker classifications appropriate as Independent Contractors:

For additional assistance in assessing worker classification, the University has identified several situations in which an individual would be an independent contractor and use of the internal assessment and certification forms will normally not be required:

  • Performers, professional entertainers, and professional athletes who provide services to the University for a fee (e.g., professional singers or musicians, DJs, bands, comedians, magicians, clowns, motivational speakers). (However, individuals who are employed by the University as music professionals should be paid through extra compensation for individual performances and student employees who are musicians should be paid as student employees.)
  • Announcers, commentators, and sporting officials and athletic events.
  • Non-UR guest speakers and non-UR lecturers who provide services on a one-time basis for a class or audience for a fee or honorarium
  • Trainers who provide specialized subject matter expertise otherwise not available internally
  • Consultants who provide specialized subject matter expertise (e.g., engineers or attorneys hired for specific projects).
  • Academic program review consultants (including accreditation team members)

Individuals NOT typically classified as Independent Contractors:

The University also has identified several scenarios in which the individual should be considered employees and not independent contractors:

  • Individuals providing instruction or teaching services. (Education is one of the primary missions of the University and therefore performing instruction or teaching services is almost always going to qualify the individual as an employee, even if of a temporary or TAR nature.)
  • Employees performing work or services related to regular job duties.
  • Former employees performing work or services related to former job duties (but a former employee who is working in an entirely different role [an attorney working as a caterer] or a role unlike that any other current employee is performing may possibly qualify for independent contractor status depending on the outcome of a status).
  • Any individual performing work or routine services the same as or similar to work or services currently being performed by a University employee.
  • Individuals performing administrative, clerical, secretarial, housekeeping, maintenance, temporary or seasonal laborers, and event workers (e.g., cashiers, ticket takers, wait staff, parking attendants, ushers, etc.).
  • University of Rochester faculty, staff or students performing work/services for the University regardless of the source of payment (i.e., whether from departmental funds, grant funding, foundation funding, corporate funding, etc.).

Other Situations Requiring Special Caution

If an individual is a sole proprietorship with its own EIN, it does not mean that the individual automatically qualifies for independent contractor status. In such cases, the internal assessment tool and IC Certification Form must be completed and an assessment of appropriate status determined. If, for example, the University is the sole proprietorship’s only client and/or the individual does not do similar work for other entities, the individual is more likely properly classified and hired as an employee.

Assistance with Determining Appropriate Status

There are many resources available to you for assistance in determining the appropriate worker classification of an individual who is going to perform services for the University, including in the Human Resources Employment Center (275-5821), a department’s assigned Human Resource Business Partner or representative, and Purchasing & Supply Chain (275-2002). These individuals will consult with the Office of Counsel as necessary.

Corporate Purchasing will review the information submitted, and if the relationship qualifies as an Independent Contract/Consultant relationship, Corporate Purchasing will draft and issue the Purchase Order and Consultant/Contractor Contract.

Notes

The University must retain a sufficient element of control over the level and context of work performed to insure that it receives adequate value for its money. The method described above is necessary to assure that the Consultant or Independent Contractor classification is appropriate, the scope of work is clearly defined, the University receives what it contracted for, the contractor is paid for services rendered, there is no actual or apparent wrong-doing or conflict of interest, and adequate records are maintained to withstand the scrutiny of an audit.

When Not To Use It

It is critical that the designation of Independent Contractor/Consultant is properly applied to avoid IRS tax liability and associated fines. An Independent Contractor/Consultant agreement should not be used when an Employer-Employee relationship exists.

An Employer-Employee relationship exists when:

  • The University (which includes) any Faculty or Staff members acting in an official capacity) has the ultimate right to direct and control the way an individual works. The control need not be exercised but is maintained by the University.
  • The University controls both final results and the details of when, where, and how the work is done.
  • The services are ones that can be performed by an employee.

Examples:

  • An individual working for the University is required to comply with instruction about when, where, and how to complete the work.
  • An individual is involved in activities that place him/her within the University's general direction and supervision.
  • An individual who has established working hours must perform certain tasks at certain times, is paid a regular amount at stated intervals, can be discharged, or has the right to terminate a relationship without incurring liability.

Notes

When an individual is a current employee, the person must be paid through the University Payroll process.

Staff recruitment, selection, and hiring guidelines and procedures are outlined in Personnel Policy #133, "Recruitment and Selection." Call the Employment Center at 275-4989 for the appropriate forms and assistance.

Student employment follows similar guidelines and procedures. Call the Student Employment Office at x5-2138 for assistance.

Temporary assistance can be used if the position is to be filled for no more than 4 months. Contact the Employment Center at 275-4989.

Call Temporary Services Program/Strong Staffing, a division of the Human Resources Department at x5-7873 for assistance. Temporary Services maintains a pool of employees for clerical, support services, and professional services. They can also arrange for the hiring of professional employees on a temporary basis through temporary employment agencies.

Time as Reported (TAR). This mechanism can be used when an individual does not have a weekly work schedule or where one has a weekly work schedule of less than 17.5 hours.

 

Notice of Order Expiration for Blanket and Standing Orders

These orders are designed to consolidate repetitive small purchases from a single vendor. To remind University departments of their expiration, Corporate Purchasing will send a Blanket/Standing Order Notice of Order Expiration to solicit departments to either cancel or renew their Orders with the exception of Maintenance Contract Standing Orders (see below). The Notice is generated by our PMM system and IS SENT OUT ONLY ONCE, APPROXIMATELY THREE MONTHS PRIOR TO THE EXPIRATION MONTH. It is mailed to the requisitioner of the Order. It is important for University departments to respond promptly to the notice.

Maintenance Contract Standing Orders

Follow the same procedure as noted above. It is imperative that departments respond in a timely fashion to avoid cancellation of orders they wish to continue.

For Maintenance Contract information contact the capital group at x5-5543. Contracts will generally be negotiated for a period of 1 - 3 years.

How To

When the Blanket/Standing Order Notice of Order Expiration is received, indicate whether the order should be renewed or canceled by checking the appropriate box.

To cancel: Sign authorization line on form and return the Blanket/Standing Order Notice of Order Expiration at least (6) weeks prior to the expiration date (top portion on Notice of Order Expiration).

To renew the Blanket/Standing Order

Attach completed Requisition #312 per the instructions on the Blanket/Standing Order Notice of Order Expiration. All Requisition(s) #312 must have at least one account number. If the Blanket/Standing Order is to be renewed, please submit a Requisition #312 AT LEAST SIX (6) WEEKS prior to the expiration date (top portion on Blanket/Standing Order Notice of Order Expiration) and comply with the steps outlined on the Blanket/Standing Order Notice of Order Expiration. Include maintenance quotation(s) you may receive from the supplier with your requisition. Quotations will assist us in identifying correct equipment configuration.

IMPORTANT NOTICE: As of January 2, 2002 the following changes were implemented with regard to blanket orders:

  • All supply blanket orders under $10,000 will be renewed for 2 years
  • All supply blanket orders $10,000 and over will be renewed for 1 year. For further information concerning your Blanket/Standing Order Notice of Order Expiration, please contact the appropriate Manager in Corporate Purchasing.

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Regular Purchase Order

The Purchase Order (Regular) is the basic purchasing system for making single instance purchases. It is a contract providing for the delivery by a specific date of listed goods or services at a predetermined price, and subject to University Terms and Conditions.

All Purchase Orders are created and requisitions are tracked on our ESI Purchasing System. Customer Service staff are able to look up a Requisition #312 or Purchase Order and provide UR departments with information pertaining to the transaction's status.

When To Use It

The Purchase Order (Regular) is generally used for transactions, which are over $1,000.00, and for smaller purchases, which entail arrangements unsuited for a Purchasing Card, for instance where, delivery in a single lot may not be possible.

When Not To Use It

A purchase Order (Regular) is not used for releases under existing Systems Contracts (found on Corporate Purchasing's Intranet site) or for small dollar purchases which are more appropriately acquired by using the Purchasing Card or for repetitive purchases which are more appropriately acquired through a Systems Contract, or on a Blanket or Standing Order.

How To

You initiate a Purchase Order (Regular) by submitting a Requisition #312. The Purchase Order (Regular) is reviewed by a Buyer in Corporate Purchasing based on the information provided in the requisition, supplemented by information obtained by the Buyer in checking prices, and obtaining competitive bids.

Generally, purchases of under $2,500 are quickly price-checked with usually several, but at least two suppliers by the Buyer through use of current catalogs, price and discount lists of manufacturers and distributors, or by telephone. For orders, which are likely to cost more than $2,500, it is the Buyer's responsibility to obtain competitive bids, generally in writing from three or more suppliers.

The Purchase Order (Regular) states the details of the Agreement for a particular purchase, lease, or rental as negotiated with the supplier by the Buyer, who is the agent for the department and the University. It includes the quantity, identification of the item(s), specifications, price, delivery date required, and shipping instructions. If the purchase is extraordinary, the University's standard business terms will be enhanced with additional terms and conditions that better protect the University's interests. The Purchase Order (Regular) is a legally binding obligation when accepted by the supplier. Acceptance may be evidenced either by a delivery or by supplier notifying Corporate Purchasing of acceptance of the order. Copies of the Purchase Order (Regular) notify all affected departments of the details of the transaction, including Accounts Payable, which ultimately will receive an invoice for the purchase. Thus, when a department receives a copy of the Purchase Order (Regular), it is an indication that the order has been placed, the terms of the transaction are established, and delivery may be expected on the date indicated. It is important to review the copy of the Purchase Order you receive and if there are any errors, contact the Buyer immediately.

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Standing Order

A Standing Purchase Order is purchasing method used in purchasing leases (e.g. auto, property and equipment), and equipment maintenance. Generally speaking, equipment maintenance orders are set up for one year. Standing orders for leases should be created for the term of the lease.

When To Use It

This method of procurement is to be used for the purchase of equipment maintenance and vehicle, property and equipment leases, with scheduled payments over a specified period of time (one, two or three years).

How To

To have Corporate Purchasing consider a Standing Order for a particular situation, call Corporate Purchasing to discuss your requirements. A Requisition #312 is required for a Standing Order. Make sure you specify the type of services needed and the date to begin the order.

Generally, Corporate Purchasing seeks competitive proposals or makes comparative market checks before issuing each Standing Order. The Order specifies the type of services that are to be furnished and specified payment schedule. Any prepayment discount offered will be noted on the order

In establishing the Standing Order, Corporate Purchasing, when possible and practical, seeks proposals from several qualified suppliers and will assign the order to the one whose prices and services are most likely to satisfy the requirements.

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