Supply, Equipment and Service Purchasing
The preferred methods of purchasing are the University Credit Cards (PCard/TCard), UMarket, and Purchase Orders (PO's). Supply and equipment purchases should be only be paid for in rare emergencies. Original receipts are required and the justification must include the reason for reimbursement as opposed to a preferred method. For more help on deciding on a purchasing method see Making the Most Common Purchases and University Purchasing Methods.
We encourage tipping as we want to make sure those doing us a service are properly compensated but when large catering orders come in, percentage tips can get expensive fast. Please check out our new departmental Tipping Guidelines for our limits.
See below for more information on the following:
- Contract Professional Services (CPS)
- Sales Tax on University Purchases
- Purchasing Computers
- Capital Equipment
A contract for service is used when hiring a company or individual (not a University employee) to provide some specific service, such as consulting or computer services. There is a specific contract document that must be fully signed by all parties involved BEFORE any work begins.
This process MAY take time as other departments MAY need to be involved depending on the magnitude or type of work as payment procedures, tax implications, or other issues are reviewed. So please do NOT wait until the last minute to begin the process.
Choosing a Type of CPS
Formerly VCPS - Now Processed as Non-PO Payment
- Professional services with non-recurring payments under $3,000 can be now processed without a requisition/purchase order
- Payments over $600 annually require a supplier ID to be set up in EFS
- If an invoice is not provided a Check Request Form (UM 1659) may be substituted
Quick Contract for Professional Service (QCPS)
- The contract does not require a vendor to sign the contract before beginning work but does require the contract to be approved and dispatched before the work begins.
Contract for Professional Service (CPS)
- $50,000 and over
- RFP or Exception to Regents Purchasing Policy Form is required
- Must be signed by the vendor and the University BEFORE work begins.
Performance Contract for Professional Service (PCPS)
- Used to contract with entertainers, speakers, and performers when the contract value is $3,000 or more.
- Includes special terms and conditions for performers.
- Must be signed by the vendor and the University BEFORE work begins.
See Contract For Professional Services for more information.
See CPS Grid for more information on required documentation.
Note: If grant-related, please ensure the services to be purchased should be a Contract for Professional Services versus a “sub-award” administered by SPA. If unsure, please check with Sarah Jahn or Liz Gates.
Questions regarding contract for services can be directed to Holley Locher (625-7852 | [email protected]).
The UMN can purchase many items exempt from state and local sales taxes. In the state of Minnesota, this exemption does not apply to lodging, prepared food, candy, soft drinks, motor vehicles, waste disposal services, or alcohol. It is the buyer's responsibility to understand which items the University can purchase exempt from MN sales tax. The procedure for making University tax-exempt purchases in Minnesota is simple:
- Use your University Purchasing Card
Minnesota state statute requires that the University of Minnesota DIRECTLY PAY for any items purchased with the University's tax exemption. This means that the only acceptable forms of payment are the University issued purchasing card, University purchase order, and University issued check. The exemption CANNOT be used when an employee pays for items with their own personal funds (cash, check, or credit card) EVEN IF they will be reimbursed by the University later. Nor can the exemption be used with gift cards or gift certificates. Penalty for improper use of the University's tax exemption may be a fine to the user in the amount of $100 per transaction. An official U of M check is also considered direct payment. If the retailer will invoice the University or accept a purchase order, those payments will also be made via University check and are acceptable ways to purchase items exempt. Cash is never an acceptable tender when using the MN sales tax exemption, even if the cash was provided by the U of M department or through a cash advance.
- Bring an ST3 Form
The ST3 Form is the Minnesota Department of Revenue Certificate of Exemption. You can download and print a copy of this certification that is signed by the University Tax Director. Fill in the seller's name and address as appropriate. DO NOT change the address or name, though you may wish to draw the vendor's attention to the note regarding the billing/correspondence address at the bottom of the page.
- Check for exemption numbers, accounts, or special procedures for some popular retailers.
Some retailers have their own additional processes for verifying tax-exempt sales. Please review this list of some known retailers that have assigned the University customer codes or other important numbers, or who require specific procedures to be followed.
- Inform the cashier of your tax-exempt status.
This step is often missed. Remember to inform the cashier of your tax status before beginning your sale.
Additional Tax Information
o order new equipment, please email Carla Bates ([email protected] | [email protected]) with your request. In order to streamline the process, please include as much information in that initial email as possible:
- Laptop or desktop
- Mac or PC
- Future use (e.g. if a laptop, will it be a travel laptop or used for gathering data in the field or to replace your desktop)
- Ballpark funds available
- Any other relevant details
Purchasing a Computer on a Grant
Auditors are looking more and more closely at computer purchases on grants and are often removing those costs if the justifications do not address what is described below.
- Was there computer or computing-related language written into the proposal and approved in the award?
- If so, SPA suggests that the justification include "This cost was justified in the proposal and accepted by the sponsor."
- If not, please see Sarah Jahn or Liz Gates, before proceeding if you feel it is required for the grant.
- Because computers are rarely used 100% for research on a project (they are used for administration, email, word processing for other things besides the grant, web browsing), it is imperative that the justification include language to ensure the allowability and allocability as a direct cost to the project. SPA now recommends that at least 1% of the cost be charged to a non-sponsored account string to allow for a small portion of non-grant related work such as email. Some criteria that should be met are:
- It must be necessary for and provide direct benefit to the project: The computer must be essential for project activities and its use should be sufficiently tracked during the life of the project.
- It must be allowable: The computer is functioning as or is in direct support of specialized scientific equipment (and scientific equipment is an allowable expense according to the sponsor's terms and conditions of the award), and the principal use of the computer is to support the project's programmatic activities and would not have been purchased other than to support the goals of the project.
- It must be directly allocable: The principal use of the computer must be identified specifically with the purpose, goals and activities of the sponsored project. If a computer is directly charged to a project and is used other than incidentally for general administrative purposes, the appropriate allocation of the cost is required. A computer may be allocated to one or more projects unless the sponsor's terms and conditions of the award prevent such an allocation. The allocation requires that the computer be used primarily to conduct the research of each project. The determination of the allocation to more than one project must be explained in the justification.
- It must be reasonable: There must be an informed, prudent decision regarding the cost, utility, and value of the computer to the sponsored project or program.
- It must be non-personal in nature.
- According to A-21, the cost must be allocated based on usage.
- If more than one project is being charged for the computer, there should be a description of the formula used to determine the allocation based on usage.
- If a cost benefits more than two projects, it is suggested that the computer be charged to a non-sponsored account instead of the grant.
- SPA has indicated that if the computer purchased is simply to be used as a work computer for an employee on the project, that is not sufficient use on the project and the computer should not be charged to a project. To be charged to a project, the justification must indicate how the computer is used for the research on the project and must also address the issues above.
If there are any questions concerning this, please feel free to talk to Sarah Jahn or Liz Gates, or see these related policy links:
- Transaction Justification/Documentation Standards For All Non-Sponsored and Sponsored Transactions Policy
Capital equipment is defined as:
- Any movable, nonexpendable personal property equipment item
- Not permanently affixed to a building
- Life expectancy of more than one-year Acquisition cost of $5,000 or more per unit.
- Includes the invoice price and the cost of any modifications, insurance, freight (to or from the University) and is reduced by any trade-in. Installation is also included when those costs can easily be identified with the equipment acquisition. Includes improvements that increase the value or extend the useful life of the equipment.
- University Policy on Managing Capital Equipment
- Capital equipment can NOT be purchased using the UMN Purchasing Card.
- Modular furniture for an office could in total cost $5,000 or more, but if individual components ordered are not $5,000 or more, this purchase should not be treated as capital equipment
- Purchase orders are required for the acquisition of new capital equipment.
- Extra requirements must be met if the purchase is over $10,000.
- Capital equipment requires special receiving instructions including asset inventory tagging. Please see Accounting or the UMN Policy on Managing Capital Equipment link noted above.
- Donated capital equipment or capital equipment transferred from another institute require special handling. Please see Holley Locher ([email protected]) for further direction.
Disposal and/or Transfers
Before conducting disposal or transfer, see the administrator as follows:
- Computers/servers, see Carla Bates ([email protected]) ensure hard drives data and other HIPPA procedures comply.
- For other capital equipment see Holley Locher ([email protected]).
Capital Asset Forms
- Capital Equipment Asset Disposal: BA 1393, GS92343
- Capital Equipment Asset Fabrication: UM 1601
- Capital Equipment Asset Trade-In: UM 1744
- Capital Equipment Asset Transfer: UM 1556
- Capital Equipment Assets Donated to University Report: UM 1561
- Capital Equipment Assets Off-Campus Request: UM 1677
- Capital Equipment Assets Transferred from Another Institution Report: UM 1675
- Property Loss Notice - Laptop Computer Program: UM 1532