Inside Iowa State: Iowa State University

January 16, 2004

When's the last time you called purchasing?

Nancy Brooks, associate director of the purchasing department. Photo by Bob Elbert.

by Anne Krapfl
Furniture for the new Gerdin Business Building. Livestock for ISU research farms. A steam turbine generator for the power plant. Health and dental coverage for ISU Plan participants. Pallets of beakers for campus laboratories.

Iowa State's purchasing agents have contracted for everything on this list -- and a whole lot more, a record $211 million in goods and services for campus units last year.

But they'd like to do more.

"We encourage departments to use our purchasing department to the fullest extent," said Nancy Brooks, associate director of purchasing. "We have a lot of expertise in negotiating contracts, finding quality products and services, managing vendors and following up with compliance issues. Purchasing agents bring a wealth of commodity knowledge and experience to the process.

"We are a partnership, a support service for the campus," she said. "Tell us what you want to accomplish and we can help you. We want our customers to be successful."

Brooks said a central purchasing unit isn't just about saving money. It also saves people time. The proverbial wheel doesn't need to be redesigned every time an Iowa Stater receives a grant or needs to hire a consultant, she noted.

"Most people on this campus have expertise in a particular area, and we want them to be able to focus on their primary functions," Brooks said. "Our strengths in purchasing are that we know what's available in the global industry, what our rights are in contracts, how to write contracts, how to protect you from bad business decisions or unethical business people, how to demand compliance."

A central purchasing unit also makes it possible to combine like requests from all corners of the campus -- or beyond -- and seek savings through high-volume purchases. For example, all the regents institutions and a non-profit buying consortium share a scientific equipment and supply contract. The result of this competitively bid contract is low prices and many value-added components.

Iowa State's purchasing agents have developed areas of expertise. A "who to contact" list is included on the department's Web site (see "procurement" and then "product index").

Agents frequently field questions that include the following:

Do you charge for your services?
The ISU purchasing department provides its services at no charge to departments. There are no regular commissions or fees charged to campus clients. And, the savings generated by purchasing -- more than $5 million last year -- are retained in the departments.

I'm in the process of putting together a grant proposal that will include both lab equipment purchases and some ongoing, off-site testing services. I'm uncertain about the costs for these items. Can the purchasing department help me, even if I don't have a grant yet?
Yes, an ISU purchasing agent can distribute a request for quote, which will secure prices for use in your grant proposal, but doesn't obligate you to purchase anything unless and until the grant is awarded. When the grant notice arrives, you're ready to proceed.

How do I know whether I ought to seek help from a purchasing agent, or simply apply for a purchasing card?
Purchasing cards (essentially a VISA credit card) may be used to buy goods costing up to $2,000. Items higher than that require you to work with a purchasing agent. Policy set by the Board of Regents, State of Iowa, requires an open and competitive bid process for purchases above $10,000. For acquisitions between $2,000 and $10,000, the university's policy is that the purchasing agent decides whether it is appropriate or in ISU's best interest to bid.

Company QRST has offered to give my research team $25,000 of lab equipment, which would be a big boost to our current project. The only hitch is that we have to purchase another $85,000 of equipment from the company in the next year. Can we go ahead and do this?
The short answer is "no." The purchasing department follows rules for open and fair competition. Those standards preclude the department from basing future purchases on a donation. What it can do, legally, is include donations as part of the bidding process. In an open request for bids, ISU purchasing would spell out the equipment needs for a lab and then ask if the bidding company would like to donate any portion of it as part of its offer.

If I know what equipment I want, can I just specify a brand name and model number?
If the item is to be competitively bid, a purchasing agent needs to write functional specifications -- or what a product needs to do. This is the way to fairly and accurately assess varying products from different companies. From these specifications, the agent also spells out the criteria to be used in making a selection. The criteria become part of the public bidding process and the basis for the "best value" determination.

My perception is that Iowa State is obligated to select the lowest price on bid projects. Frankly, I'm just not willing to sacrifice quality to save a few dollars.
Cost is one of the factors an ISU purchasing agent looks at, but best value drives the decision. In the "best value" evaluation, factors such as demonstrated experience, ability to meet the functional specifications, warranty and a company's compliance history are studied as well.

"If we can defend and articulate a decision that is other than low bid, we'll do it," Brooks said. "We're about best value, not lowest cost."

I need to hire a consultant to work on a portion of my project. Can I select someone I'm comfortable with and pay him or her by the hour?
Iowa's Accountable State Government Act of 2001 requires the university to award and monitor performance-based contracts, which essentially establish standards for quality and define the contract period. Departments should use the "Professional Services Contractual Agreement" (PSA), available from the purchasing department's Web site (under "procurement" and "forms") to hire a consultant. All PSAs should be reviewed by a purchasing agent, as there are many issues to be considered, such as conflict of interest. ISU employees are encouraged to call a purchasing agent before they start this process to determine if the consultant would be acting as an independent contractor or employee.

Professional services of more than $25,000 require a competitive process.

I've been working with a testing service company for some time now, and they're just not doing what they told me they could and would do for me. Do I have any recourse?
If ISU purchasing was involved in writing the contract, yes. There should be language in the contract that spells out what happens when either party doesn't comply with the terms of the contract and how to remedy any problems. ISU's purchasing agents have expertise in issues of non-compliance. For example, this fall the purchasing department negotiated a $195,000 settlement for an ISU department with a company that did not repair an instrument to function as specified in the contract.

I need a very customized piece of equipment for my lab, but I'm fairly certain it doesn't exist anywhere in the market. Can purchasing help me in this situation?
Even if a product doesn't exist, a purchasing agent can help you with a bid process to find out who's interested in creating a product or service for you, and at what cost. As plans for the butterfly house at Reiman Gardens evolved, curator Mary Harris sought a special emergence chamber for the chrysalides. The competitive bid process identified a manufacturer for the chamber. That company now is planning to market the once-custom item.

At my previous university, I bought all my equipment from Company QRST. I'm comfortable working with them, I know their products and I feel a certain loyalty to them. Can I just bypass the purchasing department and continue my buying relationship with this company?
There are several answers to that question. First, an individual working with a supplier may have a lot less buying power and negotiating influence than Iowa State purchasing. Purchasing agents, Brooks said, represent you and protect you from hasty decisions or possible misrepresentations by overzealous salespeople.

Depending on the value of what you're purchasing, the bid process or ISU's competitive volume buying could result in your continuing to work with the same company, if it proves to offer the best value. But Iowa State is committed to open and competitive purchasing processes, so favoritism can't be a consideration. "I like doing business with them" isn't enough.

That said, there can be instances in which equipment capability or research compatibility would compel an exception to this policy and allow a purchasing agent to negotiate for you with a single source.