Policy & Procedure / Policy No.
Effective Date
PROCUREMENT POLICY / Page / 1
Revised
1.Only the CEO may commit the Health Centerto purchasescosting greater than $5000 per board approval of this policy. All other purchases may be approved by the Chief Financial Officer.Purchases greater than $100,000 must be competitively bid per HRSA requirements.
2. Contracts and agreements of any nature that commit [Type Health Center Name Here] to a purchasing liability may only be signed by specifically authorized executive staff. Where such contracts and agreements will be issued in conjunction with a purchase order, they may be signed by authorized Procurement personnel, but only to the limit of their purchasing authority.
In relation to service contracts; the health center will maintain overall authority for all contractual agreements to ensure that none of the health center requirements are prohibited. For any required services provided by contract, the service will be documented in the appropriate section of HRSA Form 5A. Operating policies will include how the health center will provide the service regardless of patient’s ability to pay or reasonable efforts to secure this commitment from partner entities, and what applicable procedures apply for tracking and referral.
3.It is the responsibility of the CEO and/or CFO to negotiate to the best interest of the Health Center with regards to pricing and terms under which purchases are made and to sign and issue purchase orders as authorized.
4.It is the responsibility of the CEO and/or CFO for determining either the quality or quantity of items to be procured with the advice and recommendation of the department heads. Procurement is available to assist in the selection of vendors.
5.It is the responsibility of [Type Health Center Name Here] to give proper consideration to factors such as competition; utilization of small business concerns; small business concerns; utilization of minority, women-owned, and handicapped owned business concerns; and utilization of business concerns located in labor surplus areas when selecting sources of supply. To this end, the Chief Financial Officer will establish, maintain and execute appropriate Affirmative Action Procurement Plans applicable to all purchases.
6.It is the responsibility of the Finance Department to document purchasing activities to satisfy [Type Health Center Name Here] and government audit and procurement review requirements.
7.Occasionally a new item may be appraised effectively only by having it for a trial use. Vendors will usually agree to a trial loan on a rental or no-charge basis. In such cases, both the [Type Health Center Name Here] and vendor should be protected by the issuance of an [Type Health Center Name Here] purchase order specifying the terms of the loan.
8.This purchasing policy does not preclude any individual from contacting sources of supply for preliminary information concerning price, quality, or usage of anything in which he/she is interested, the Procurement Office will cooperate in such discussions and suggest the names of potential vendors of commodities upon request. Such preliminary contacts are not to produce commitments beyond the current limits established for ABC Health Center’s automated systems.
Authority
Buying agents are restricted to purchasing action within their individual authorization and in accordance with the health center’s purchasing policies and procedures. Furthermore, no buying agent is to issue an order if he/she is not confident that the costs thereunder are allowable costs under contract and grant accounts or appropriate costs under[Type Health Center Name Here] .
Allowable Costs are costs which the sponsor (DHHS, WIC, FQHC, etc) will reimburse under the contract or grant to which they are charged. In general, a cost is allowable if it is (1) reasonable, (2) applicable to contract or grant work, and (3) in conformity with the requirements and limitations of the contract or grant. A cost that requires the sponsor’s prior consent is not an allowable cost until that consent has been obtained.
Similarly, Appropriate Costs are costs that are (1) reasonable, (2) applicable to the work of a department within a primary care setting, and (3) in conformity with [Type Health Center Name Here] purchasing policies and procedures.
All requisitions for purchases is initiated by department heads or designee and approved by the CEO and CFO prior to purchases.
Organization
Organization chart on file in the Chief Financial Officer/HR Representative’s Office
Electronic Catalogs (ECAT)
ECAT is a Web based electronic catalog ordering system designed for use with [Type Health Center Name Here] ’s selected Partners. Any authorized ECAT user will be able to place orders for their desktop. ECAT Requisitions are created on the LAP top of Nurses and routed to obtain the proper authorizations within the department and then converted into a purchase order. In order to create an order using ECAT an individual must have an ID. The costs account number from the chart of account is applied at the time of payment.
Procurement Card (Credit Card)
The company Credit Card is a charge card that enables the Cardholder to make small dollar purchases of $3,000 or less. The charges incurred through this method of purchasing will be available for review by the CEO and the CFO prior to any purchases by a requisition form that documents the method of payment.
Requisition
Requisitions are created at the department level, routed to attain the proper authorizations and then forwarded to the appropriate buyer. The buyer will review the request for compliance with Purchasing Policies and Procedures and forward to the CEO and CFO for approval. Properly executed requisitions will be converted into purchase orders. Once the PO number is assigned, a buyer will then place the order.
INDICATORS
There are several indicators available for review in order to determine the type of order, which the Finance Department and who created the order.
Purchase Order Numbers
Purchase Orders have alpha digits at the beginning of the purchase order number that represents the type of order. Below is a list of the various alpha digits and the corresponding order type(s):
Axxxxxxxx / Medical Purchase Orders (Does not include maintenance and repairs)Bxxxxxxxx / Laboratory Purchase Orders (Does not include maintenance and repairs)
Exxxxxxxx / Dental Purchase Order(Does not include maintenance and repairs)
Kxxxxxxxx / Administrative Purchase Order (Does not include maintenance and repairs)
Lxxxxxxxx / Facility Purchase Orders (Supplies and maintenance and repairs)
Txxxxxxxx / Clinical Front Desk (Receptionist/Cashier)
Wxxxxxxxxx / WIC (Does not include maintenance and repairs)
Purchasing Buyer ID
All Purchase Orders have a buyer code assigned to it that represents the individual that created the order. This is a two digit code that is assigned to the end of the Purchase Order by the first and last name initials of the buyer and is directly tied to the buyer who created the order. All orders are assigned the same buyer code which signifies authorized buyer.
Document Type
There are several document types established for Requisitions and Purchase Orders. The document types that are in active use at this time are listed below with their corresponding reference:
Requisition Document Types:
CH / ChangeTL / Telephone
RT / Return
EC / Electronic
HC / Hard Copy
VD / Void
Purchase Order Document Types:
CH / ChangeTP / Telephone
RT / Return
EC / Electronic
HC / Hard Copy
VD / Void
Buyer’s Responsibilities
The following are the responsibilities of the Procurement Office:
• To negotiate in the best interest of the [Type Health Center Name Here] , the prices and terms under which purchases are made and to sign and issue purchase orders as authorized.
• To obtain maximum value for money expended for purchases - quality, delivery, price and other essential factors considered.
• To give proper consideration to factors such as competition and utilization of small business concerns as sources of supply. Small Business Concerns, for the purpose of this manual are defined as one or more of the following; Small, Minority-Owned, Women-Owned, Veteran-Owned, Service-Disabled Veteran-Owned, HubZone or otherwise disadvantaged as defined in the Federal Acquisition Regulations (FAR).
• Assist in the selection of vendors - although the Buyer is NOT responsible for determining either the quality or quantity of items to be procured except in an advisory capacity.
• To document its actions to satisfy[Type Health Center Name Here] and audit and procurement review requirements.
Supervisor must:
• Provide guidance, direction, review and follow-up necessary to facilitate and ensure that buying agents properly carry out the procedures of this manual and the activities under their cognizance.
Buying Agents and Supervisors must:
• Provide guidance, direction, review and follow-up necessary to facilitate and ensure that their subordinates properly carry out the procedures of this manual and the activities they have been assigned.
1.7 Code of Ethics
Personnel involved in the acquisition function are in a position to provide or withhold substantial business from suppliers who serve [Type Health Center Name Here] . They constantly operate under pressure from conflicting sources and must have a highly developed sense of professional ethics to resist these pressures in order to serve [Type Health Center Name Here] in an honorable way.
To strengthen ethical awareness, and to provide guidelines for its members, the [Type Health Center Name Here] has established a code of ethics which is printed below, and is to be observed by all personnel who are involved in the acquisition function.
CODE OF ETHICS
1. Give first consideration to the objectives and policies of my institution.
2. Strive to obtain the maximum value for each dollar of expenditure.
3. Decline personal gifts or gratuities.
4. Grant all competitive suppliers equal consideration insofar as state or federal statute and institutional policy permit.
5. Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.
6. Demand honesty in sales representation whether offered through the medium of a verbal or written statement, an advertisement, or a sample of the product.
7. Receive consent of originator of proprietary ideas and designs before using them for competitive purchasing purposes.
8. Make every reasonable effort to negotiate an equitable and mutually agreeable settlement of any controversy with a supplier; and/or be willing to submit any major controversies to arbitration or other third party review, insofar as the established policies of my institution permit.
9. Accord a prompt and courteous reception insofar as conditions permit to all who call on legitimate business missions.
10. Cooperate with trade, industrial and professional associations, and with governmental and private agencies for the purposes of promoting and developing sound business methods.
11. Foster fair, ethical, and legal trade practices.
NOTE: This section is jointly owned and observed by the Finance Department and Administrative Office. The Finance Department is responsible for maintenance of the section.
Health Center Policies on Gifts and Gratuities
In the course of doing business, it is quite natural to develop close relationships with suppliers. This may lead to expressions of friendship or appreciation in the form of personal gifts or gratuities from vendors, subcontractors, and contractors (referred to in this section as "suppliers").
It is the [Type Health Center Name Here] ‘s objective to award business to suppliers based on considerations such as quality, service, competitive pricing, and technical abilities. Acceptance of personal gifts or gratuities from suppliers that could be construed as a means of inducing business with the Health Center is totally inconsistent with this objective. [Type Health Center Name Here] ‘s policy prohibits employees from accepting personal gifts or gratuities of any kind from suppliers. This includes the use of property or facilities, gift certificates, entertainment, or other favors of value extended to employees or their families.
Federal regulations, which govern procurement under contracts and grants, impose a like prohibition mandated by Public Law 99-634 (41 U.S.C. 51-58), known as the "Anti- Kickback Enforcement Act of 1986." "Kickback" is defined as any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind that is provided by a supplier, directly or indirectly, to any employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with procurement under a federal contract or grant. Any violations of the Act may result in both criminal and civil penalties.
ABC health center will maintain sufficient control and oversight over all contracted services in accordance with required HRSA guidance. This will include annual monitoring of contracts by the CFO to determine impact on the patients/community, and amending contracts, as needed.
Affirmative Action in Procurement and Construction
[Type Health Center Name Here] , will continue the following course of action, which has enabled us to achieve a solid and expanding position in the utilization of minority and women-owned business concerns for Health Center procurement:
Aims and Plan of Action
[Type Health Center Name Here] ‘s policy on affirmative action with respect to procurement requires that minority and women-owned business concerns shall have the maximum practicable opportunity to participate as suppliers of Health Center requirements for goods and services, including construction, whether purchased with contract, grant, or Health Center funds. This policy requires that:
a. Those making requisitions to the health center, as well as buying agents assume an affirmative obligation with respect to placing business with those providing care to underserved populations.
b.New procedures be developed to secure maximum participation of minorityand women-owned business concerns in [Type Health Center Name Here] ‘spurchasing, and, to this end, an Affirmative Action Procurement Program be established, executed, and maintained.
Affirmative Action Procurement Program
a. The Chief Financial Officer will:
1. Administer, guide, monitor, and update the Program.
2. Train and motivate the managers and buying agents of the Finance Department regarding the affirmative use of minority and womenowned business concerns for Health Center procurement.
3. Represent a central contact for minority and women-owned business concerns that are seeking [Type Health Center Name Here] business, but are not familiar with the organization and the location of its Finance Department.
4. Disseminate information to Finance Department and select departments on the products and services that are available from minority and women-owned business concerns that are new to the Organization.
5. Compile and provide to managers and buying agents listings of minority and women-owned business concerns, which contain potential [Type Health Center Name Here] suppliers.
Approved By Board of Directors:
______
Board Chair
______
Date
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Revision Date
Procurement Policy 1