ASIAN INSTITUTE OF TECHNOLOGY
POLICY AND PROCEDURE STATEMENT
Financial and Business Affairs
TITLE:
I.
FB
Issued By
PRESIDENT
Section
3
Responsible Officer
OPIA Director
Serial No. No. of Pages
1-1 16
Date Issued Date Revised
5 August 2003 29 August 2022
PURCHASING
PURPOSE A. B. C. D. E.
II.
Reference
To describe the functions, responsibilities and authority of the Purchasing Unit. To set forth the definition, policies and procedures of purchasing goods and contracting for work / services. To describe the policies, procedures, responsibilities and format of the documents used for the acquisition of goods and services. To describe the procedure and documents to be used for the issue of an order for purchasing goods or contracting for work / services for credit. To present the procedure and documents to be used where cash purchases have been made against properly executed purchase requests.
FUNCTIONS, RESPONSIBILITIES AND AUTHORITY OF THE PURCHASING UNIT The Office of Procurement, Inventory and Assets (OPIA) has the authority to issue purchase requests (see Point IV below The Purchase Request), being responsible for the following: A.
acquiring materials, supplies, equipment and services for the Institute as and when required;
B.
acquiring such items at the lowest possible price consistent with quality, sound business practice and ethical procedures;
C.
purchasing all goods and services required by the Institute except Library books, travel and accommodation, customs and shipping and utility services such as electricity, telephone rental, and textbooks and foodstuffs;
D.
negotiating all agreements for the maintenance of equipment;
E.
inviting tenders/quotations for the supply of all goods and services, where considered appropriate;
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III.
F.
selecting the appropriate vendor in consultation with the requisitioner;
G.
issuing Purchase/Cash Purchase orders, and the acquisition of goods for cash;
H.
checking and receiving the invoices of goods for payment;
I.
establishing and maintaining records which are necessary for the efficient operation of the Purchasing function;
J.
providing periodic reports on the operation of the Purchasing Unit as required by the management; and
K.
disposing of property and material in excess to the Institute needs.
PURCHASING GOODS AND CONTRACTING FOR WORK / SERVICES A.
DEFINITION Purchasing refers to the acquisition of materials, supplies, equipment and contracting for work / services, as and when required, at the lowest possible price consistent with the desired quality, and following sound management practices and ethical procedures.
B.
C.
POLICIES 1.
The Office of Procurement, Inventory and Assets (OPIA) has responsibility for purchasing of all goods and contracting for work / services required by the Institute; the invitation of tenders or quotations for the supply of all goods and contracted services where considered appropriate; the selection of the appropriate vendor in consultation with the requestor; the issuance of purchase orders, cash purchase orders and the acquisition of goods for cash; and the disposal of property and materials in excess to the Institute.
2.
The purchasing of all goods and contracting for work / services required by the Institute excludes library books and periodicals, travel and accommodation, customs and shipping, services provided by utilities (e.g. electricity, telephone rental and the like), and foodstuffs.
3.
Purchasing of all goods and contracting for work / services required for implementing projects is to comply with this statement.
PROCEDURES 1.
Purchasing of Goods and Contracting for Works / Services The purchasing of goods or contracting for works / services may be carried out in any of the following four (4) methods:
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a. Price agreeing (negotiating) method The method of purchasing of goods or contracting for work / services by a price agreeing method shall apply in the case of a single contract of not more than THB-100,000 (incl. VAT). At least one (1) written quotation shall be obtained. b. Price inquiry (selective tendering) method The method of purchasing of goods or contracting for work / services by a price inquiry method shall apply in the case of a single contract of more than THB-100,000 (incl. VAT) but not more than THB2,500,000 (incl. VAT). At least three (3) written quotations shall be obtained. c. Competitive bidding (open tendering) method The method of purchasing of goods or contracting for work / services by a competitive bidding method shall apply in the case of a single contract of more than THB-2,500,000 (incl. VAT). Normally at least three (3) written sealed bids shall be obtained and should remain sealed until opened with the endorsement from the Bidding Committee. The Bidding Committee shall be appointed and chaired by the President or his delegated representative to oversee the bidding process, including the preparation of bid documents, selection of vendors to be invited for bidding, review of bid proposals, and making recommendations regarding the winning bid. d. Special (limited tendering) method The method of purchasing of goods or contracting for work / services by a special method shall apply only under any of the following circumstances, where the individual contract value exceeds THB100,000 (incl. VAT): i.
for materials that are sold by public auction by government agency, state enterprise, international organization or foreign agency,
ii.
for materials and work / services that have to be purchased urgently where delay may cause detriment to the Institute,
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iii.
for materials and work / services that are required for use in a necessary or urgent situation, or for the benefit of the Institute and is necessary to repeat the order,
iv.
for materials that have to be purchased directly from abroad or managed through international institutes,
v.
for materials where the brand name has to be specified due to its utilizing nature or technical limitations, like spare parts,
vi.
for materials where purchasing by other methods has been performed, without successful results,
vii.
for work /services requiring special knowledge, specific expertise, modern technology such as professional consultation, genuine handicraftsman, research and development, design and consultation, media and communication, advertising etc.
viii.
for work /services that require the removal of all parts to check, before estimating the repairing cost i.e. the repairing work for a machine, mechanical equipment, motor engine, electric or electronic equipment, etc.
ix.
for work /services where the contracting by other methods has been conducted, without successful results,
x.
in the situation where bidding is not to the advantage of the Institute, e.g. threat to Institute security, confidentiality, legal issues and insurance etc.
xi.
in circumstances not indicated in above (items i.-xii), the collective consent of AIT Management should be obtained. A Task Force comprising relevant experts shall be formed by the President to negotiate the terms and conditions with the service provider.
2.
The separation of the purchasing of goods or contracting for work / services, in order to reduce the amounts prescribed in any method above, is not permitted.
3.
In all instances where donors restrictions are more stringent than above stated, the donor restrictions shall take precedence.
4.
It is the responsibility of the OPIA to document the circumstances warranting a deviation from the above.
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5.
Acquisition of Goods and Services (except Library Books and Periodicals, Foodstuffs, Travel and Accommodation, Customs and Shipping, and Services Provided by Utilities)
6.
A purchase request form should be completed and properly authorized before forwarding to the OPIA. The requester may indicate shipping instructions, suggested vendor(s) (particularly if single source), indication of the price, and any other special instructions required.
7.
Forward planning should be used as much as possible so that sufficient time is available for the purchase of goods without incurring additional costs.
8.
In emergency situations, necessitating the purchase of goods and services without any purchase request, the purchased goods and services must be reported to the concerned Dean, Director, and the OPIA at the first opportunity, preferably within the same day. A purchase request should be prepared and submitted to the President for approval.
9.
Authority for Purchasing of Goods or Contracting for Work / Services The authority to sign the purchasing order and related documents is as follows: Authorized signatory President Vice President or equivalent Director OPIA
10.
Purchasing Value Up to 50,000,000 ≤ Bht.5,000,000 ≤ Bht.2,500,000
Types of Purchasing Documents a. The following types of purchasing documents are required for the purchasing of goods or contracting for work /services: Amount to be purchased ≤ Baht 100,000 ≤ Baht 5,000,000 > Baht 5,000,000
Type of Purchasing Documents Quotation, Purchase Order Purchase Order Contract/Agreement
b. It is the responsibility of the OPIA to draw up all purchasing documents. c. A purchase order shall be used to document all purchasing of goods or contracting for work / services. A purchase order may only be issued from a properly prepared and executed purchase request, which bears the required approval.
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d. After signature and issuance of the purchase order, no alterations whatsoever shall be made to the order unless authorized by the OPIA. e. Any cancellation of a purchase order should be conveyed to the OPIA by the requester, in writing citing the reason for cancellation f. The vendor must also be advised in writing of any cancellation, unless the cancellation is at the vendor’s request. 11.
Receiving of Goods and Services a. On receipt of goods and services, the requestor will check that the consignment is in accordance with the invoice, before signing “in good order” on the invoice. This invoice must then be forwarded to OPIA. Any obvious damage or discrepancy in the consignment should be immediately reported to the vendor/carrier and noted on the invoice, or the invoice should include a qualified acceptance, depending on the nature of the discrepancy. b. OPIA will check the invoice against the purchase order. If everything is correct, OPIA will enter “Receipts” in the ERP Receiving System and then forward the invoice with a copy of the order to the Finance Office for payment.
12.
Open Call for Proposal and Evaluation / Selection with Bidding for the Sub-Award of a Sponsored/Contracted Project (SCP), and Concessionaire Contracts a. An evaluation/selection committee for the sub award of a SCP must consist of at least one member other than, or in addition to, the SCP Principal Investigator(s) (PIs), and additional members must preferably not be from any of the PIs’ School / Field of Study / Unit. b. A member of the evaluation/selection committee must disclose, in writing, to all members of the evaluation/selection committee any actual and potential conflict of interest before commencement of the evaluation / selection, and be excluded in the concerned evaluation / selection process. Any violation shall lead to disciplinary action against the concerned member of the evaluation/ selection committee. c. A bidder must disclose, in writing, to all members of the evaluation/selection committee, any actual and potential conflict of interest in their proposal. Any violation shall have the bidder disqualified from the bidding process, and a public notification of the violation shall be made.
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d. A bidder must disclose any affiliation with any AIT employee, for information and record. e. A maximum purchasing value of the bid price must be noted in the call for proposals. This maximum purchase value of the bid price shall be used to determine the appropriate bidding procedure in accordance with those described in IV. C. above.
IV.
THE PURCHASE REQUEST A.
DEFINITION The following describes the policies, procedures, responsibilities and format of the documents used for the acquisition of goods and services. A properly executed and issued Purchase Request (ERP Form - Annex I) will be used for the acquisition of all goods and services, except library books, textbooks, foodstuffs for the AIT Conference Center and the cafeteria, travel and accommodation, customs and shipping, and utility services (e.g., electricity, telephone rental).
B.
PROCEDURES 1.
Action in Cost Center a. The ERP form may be initiated by any member of the AIT community, including a student, provided that it is properly authorized by the President, Vice President, Dean, or Director before dispatch to the Office of Procurement, Inventory, and Assets (OPIA). b. The originator of the form will complete the following: i. ii. iii. iv. v. vi.
vii. viii.
the date; Cost Center followed by sequential number; account to be charged; realistic date of delivery required; delivery point for the goods; complete information on the goods or services must be included in the Purchase Request including quantity, unit of measure, and a complete description including catalogue number, where known; an actual cost must also be included; and where equipment IS being purchased, appropriate operating and service manuals should also be specified in the Purchase Request.
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c. The requestor of the ERP form may indicate the following: i. ii. iii. iv. 2.
suggested shipping instructions; suggested vendor, particularly if single source; whether price referral is required before issuing the purchase order; and any other special instructions or requirements.
Action in Office of Finance (OFIN) a. The Accounts Section of the OFIN will check the validity of the account and authority nominated in the Purchase Request and will also check that sufficient funds are available in that account to allow the purchase to proceed.
3.
Initial Action in OPIA a. OPIA will review the Purchase Request in the electronic ERP and will issue the Purchase Order, the Purchase Order number will automatically be created once the Purchase Request turns into the Purchase Order.
4.
Further Action in OPIA a. The Purchase Request will be completed in OPIA, with the insertion of the unit rate, the total cost and the number(s) of the Purchase/Cash Order(s) issued against the Purchase Request. b. Details of the action taken in the Purchasing Unit will be recorded in the online ERP and will then be filed in the Purchasing Unit in numerical order. c. The Purchase/Cash Order(s) copy is then sent to the appropriate Cost Center.
V.
THE PURCHASE ORDER A.
DEFINITION The following describes the procedure and documents to be used for the issue of an order for purchasing goods or services for credit. A purchase order shall be used to document and procure all goods and services on credit.
B.
PROCEDURES A purchase order may only be issued from a properly prepared and executed Purchase Request that bears the required approval. When issued, the order must
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contain full information to allow the correct supply of the goods being ordered including the following: 1. 2. 3. 4. 5. 6.
the "Ship To" address, which depends on the method of dispatch; the complete name and address of the selected vendor; the date of issue; the originating unit and its identifying number; the source and account code; the vendor's reference number, particularly where overseas orders are involved; 7. the quotation reference and date where the order is being issued pursuant to a written quotation; 8. a complete description of the items being ordered including catalogue number where known, quantities, unit of measure and the total value; 9. the amount of freight, packaging and insurance charges must be shown, or if they are unknown, an estimated cover value must be given in the case of overseas orders; 10. the Purchase Order should include the supply of operating and maintenance manuals, where items of equipment are being ordered; 11. the Purchase Order must be checked in every detail against the Purchase Request; 12. details of the order issued should be entered in the Purchase Request Log Book and in the case of overseas orders details should also be recorded in the overseas Order Log Book; 13. after signature and issue of the Purchase Order no alterations whatsoever shall be made to the order, unless authorised in writing by the Purchasing Unit; 14. should cancellation of an order be necessary due to incorrect preparation, one Purchasing Unit numerical copy must be retained for later reference, suitably endorsed as to the reason for cancellation; 15. should cancellation be necessary after issue, then the Purchasing Unit (Vendor and Numerical) copies must be endorsed and a memorandum must be sent to Accounts and the Unit concerned advising the reason for the cancellation and quoting the account and the Unit Request Number; 16. the Vendor must also be advised in writing of any cancellation unless the cancellation is at the vendor's request. C.
GENERAL Purchase Orders are negotiable instruments and must be kept under proper security at all times to prevent fraudulent or improper use. They should be locked away securely at the close of business each day.
D.
ORDER COPY DISTRIBUTION Purchase Orders will be prepared in four parts, distributed as below: -
ORIGINAL: COPY:
White Green
Forward to Vendor Accounts - Encumbrance/Settlement (Encumbrance then Disbursement)
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-
VI.
COPY:
Pink
Unit - Advice of action taken
CONTRACT MANAGEMENT A.
DEFINITION AIT enters into a variety of contracts for goods and services with many that are significant in value, duration, and complexity. The nature and extent of contract management will thus depend on the size, nature, complexity, and risk profile of each contract. With a high priority on the value of green purchasing, this contract management practice will describe the transparent process of contract management that ensures all parties involved in the contract/agreement meet their respective obligations as efficiently and effectively as possible, delivering the business and operational outputs required, and providing value in terms of return on investment. The procedures regarding contract management will follow 3 phases:
B.
PROCEDURES 1.
2.
Pre-award management 1.1
Stakeholders are to define the requirement by providing a scope of work to OPIA
1.2
Stakeholders should consult OPIA regarding the list of potential suppliers who will participate in the RFQ (request for quotation) or RFP (request for proposal) process
Award management 2.1
OPIA to provide potential suppliers the RFQ (request for quotation) or RFP (request for proposal) which contains all documentation and details from 1.1 above. OPIA will be the only one channel to submit the official scope of work to all potential suppliers, while stakeholders will ensure their availability to clarify all technical questions to suppliers if needed.
2.2
OPIA to negotiate multiple quotations/proposals submissions by supplier(s), as and if appropriate.
2.3
OPIA to consult stakeholders to ensure potential suppliers are proposed and approached that have the best capacity and capability and who are able to provide goods and services that meet stakeholder’s needs and satisfaction within the required timeframe.
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3.
VII.
2.4
OPIA will immediately notify the selected and awarded supplier via suitable channels such as email or letter. Other suppliers who are not selected and awarded will also be notified.
2.5
OPIA to ensure all awarded contracts are approved and signed.
Post-award management 3.1
Stakeholders to monitor supplier’s performances and all execution.
3.2
Stakeholder to provide feedback to OPIA in order to provide insight and guideline that support the decision whether or not to continue using the supplier after the end of contract.
3.3
OPIA to centralize the original copy of each contract, filing all contract and related documents, updating the contract list, and monitoring the validity of contract(s).
GREEN PURCHASING A.
DEFINITION To encourage and achieve green purchasing, which forms part in the AIT sustainability policy, OPIA is required to strictly commit, act, and align with 10 purchasing principles, in the areas of human rights, labour relations, the environment, and anti-corruption.
B.
PROCEDURES 1.
Human rights Principle 1: Principle 2:
2.
support and respect the protection of internationally proclaimed human rights not be complicit in human rights abuses
Labour Principle 3: Principle 4: Principle 5: Principle 6:
uphold the freedom of association and the effective recognition of the right to collective bargaining the elimination of all forms of forced and compulsory labour the effective abolition of child labour the elimination of discrimination in respect of employment and occupation
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3.
Environment Principle 7: Principle 8: Principle 9:
4.
support a precautionary approach to environment challenge(s) undertake initiatives to promote greater environmental responsibility encourage the development and diffusion of environmentally friendly technology
Anti-corruption Principle 10: work against corruption in all forms, including extortion and bribery
VIII.
CASH PURCHASES A.
DEFINITION The following describes the procedure and documents to be used where cash purchases have been made against properly executed Purchase Requests. The Payment Request Form for Cash Purchase Summary (Annex II) is to be used to record details of every cash purchase made by various units.
B.
C.
PROCEDURES 1.
After purchases have been made and signatures for receipt of the goods have been obtained on the invoice receipt from the Cost Center concerned, the Unit staff member involved will prepare the summary from the information available on the Purchase Requests and invoices or receipts involved.
2.
All receipts, and invoices where applicable, will be attached to the Payment Request for Cash Purchase Summary in the correct sequence as listed on the Summary and will then be transmitted to the Accounts Section of the Finance Office for reimbursement action.
3.
On receipt of the reimbursement, the Unit staff member involved will sign the Payment Request in the space provided.
4.
One copy will be retained for Purchasing Unit records
CASH PURCHASES BY NON-PURCHASING UNIT STAFF 1.
The maximum reimbursable purchase through Petty Cash Vouchers is Baht-2,000.
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2.
Cash purchases of over Baht-2,000 must have the prior approval of the Unit Head. Reimbursement for cash purchases of over Baht-2,000 will require the Unit to issue a Payment Request for Cash Purchase Summary.
3.
Cash purchases by non-Purchasing Unit staff are to be discouraged and are appropriate only for inexpensive, highly technical or most urgently needed items.
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1st Revision
Modification History:
Related Policies Keywords
19 June 2006 AIT Management (29 Aug 2022; 16 Dec 2020; 5 Nov 2015; 2/30 Apr 2015; 21 Aug 2014; 24 Apr 2014; 17 Oct Reviewed By: 2013) AIT Governing Team (4 Jul 2022; 2 Nov 2020) P&P Task Force, PAC, KPMG Auditors 2nd Revision 21 November 2006 3rd Revision 1 November 2010 (Head-CMO; Head-Finance; President) 4th Revision 3 May 2011 5th Revision 17 October 2013 6th Revision 24 April 2014 7th Revision 21 August 2014 8th Revision 30 April 2015 9th Revision 5 November 2015 (Head-OPIA) 10th Revision 16 December 2020 11th Revision 29 August 2022 FB-3-1-2 Purchase Unit: Authority and Responsibility ●
29 August 2022 o Added new sections on Contract Management (VI) and Green Purchasing (VII)
●
(Nov/Dec 2020) o Merged the following P&Ps: ▪ FB-3-1-1 Purchasing of Goods and Contracting for Work / Services ▪ FB-3-1-2 Purchasing Unit: Authority and Responsibility ▪ FB-3-2-1 The Purchase Request ▪ FB-3-2-2 The Purchase Order ▪ FB-3-2-3 Summary of Cash Purchases o Maximum contract value by price inquiry (selective tendering) and competitive bidding (open tendering) methods increased from 2 million Baht to 2.5 million Baht. o At least three (3) written quotations shall be obtained for price inquiry (selective tendering) method. o The purchasing value under the authorized signatory of OPIA Director was increased from 2 million Baht to 2.5 million Baht. (5 Nov 2015) Added new sections on (a) methods and (b) authority for purchasing of goods and contracting for works / services; as well as (c) types of purchasing documents. (2/30 Apr 2015) Added IV.E.4. as stipulation for bidders to disclose any affiliation they may have with AIT employees. (21 August 2014) Added IV.C.2. as stipulation where bidding is not to the advantage of the Institute. (24 April 2014) Added IV.E.: Open Call for Proposal and Evaluation / Selection with Bidding for the Sub-Award of a Sponsored/Contracted Project (SCP). (17 October 2013) Added III.2.: Purchasing of all goods and services required for implementing projects is to comply with this policy and procedure statement. (3 May 2011) Contract amount for price search for single item/order raised to THB-500,000 (missed out to match the approved changes of 1 November 2010) Contract amount for formal bidding raised to THB-500,000 Administrative restructuring
Rationale for Revisions: ● ● ● ● ● ● ● ●
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Annex I - Purchase Request Form
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Annex II - Cash Purchase Request Form
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