UCR

UCR Policies and Procedures

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Campus Policy Number: 750-54

Strategic Sourcing Program: Responsibility & Coordination - Definition & Guidelines
Policy Owner: Campus Purchasing
Effective Date: 02/04/2010

 

A.       OVERVIEW
 
Note: The Strategic Sourcing Program was formerly known as the Planned Purchasing Program. The two programs are not identical but many concepts are similar. Campus and University policies and procedures are updating to this new terminology.
 
It is the policy of the University to satisfy supply and service requirements at the lowest overall cost by consolidating and leveraging the buying power of all UC locations through strategic and collaborative sourcing, adoption of proven technologies, and supplier performance management. To this end, regional and Universitywide pool-purchases, commodity agreements and price schedules are established and utilized to the maximum practicable extent.
 
 
B.       DEFINITIONS
 
1.       Commodity Agreements - Primary agreements between the University and vendors to supply goods or services to the University. Commodity Agreements are established as a result of competitive bid and are typically for indefinite quantities, during a specified period of time, at firm prices or an established basis for prices and price changes.
 
2.       Commodity Manager – A purchasing professional in the Office of the President or on a Campus designated as the Universitywide Manager for specific commodities or groups of commodities. The Commodity Manager has responsibility, on a Universitywide basis, for coordinating standards, specification and bid development, as well as developing, negotiating and monitoring pool-purchases, commodity agreements and price schedules for assigned commodities.
 
3.       Pool-Purchase – An agreement or purchase order with a vendor, involving two or more campuses, which provides for definite or guaranteed minimum quantities of specified items to be furnished at fixed prices during a stated period.
 
4.       Price Schedules - Agreements with vendors to supply goods or services to the University. Price Schedules are developed by the University and responsible vendors when the University determines there is a consensus of need and development of such agreements will present a price or cost advantage to the University. A price schedule is an agreement created through negotiation which establishes terms, conditions and prices which have been determined to be reasonable. Although reasonable, the prices under a price schedule may not always be the absolute lowest possible for each and every item. Therefore, price schedules should not be used in lieu of competition when significant quantities or other substantive circumstances suggest competition may result in greater advantage to the University.
 
5.       Executive Director – Strategic Sourcing - Head of The Office of the President unit with facilitative, consultative and coordinative responsibility for the Strategic Sourcing and Materiel Management functions of the University.
 
 
C.       GUIDELINES
 
The economic advantages of establishing an agreement under the Strategic Sourcing Program are measured in terms of both cost and price avoidances. Cost avoidances include reductions of internal administrative costs experienced as a result of reducing duplications of effort among all campuses in securing goods and services. Price avoidance is a reduction of the price of the commodity and occurs by combining the buying power of the University, rather than each campus working independently.
 
Agreements generally have a minimum usage of $250,000 annually, but may involve a lesser amount when significant cost or price reductions can be achieved. These reductions must be greater than could be obtained by individual campuses, and exceed the cost of administering the agreement or the aggregate cost of the individual campuses.
 
Items and services must be generally acceptable to the using departments or campuses, as determined by the Commodity Manager, based on information provided by the Campus Materiel Managers.
 
Items covered by pool-purchases and commodity agreements shall not be purchased from other sources, unless an exception involves special delivery requirements which cannot be met by the pool-purchase or commodity agreement vendor, or there are substantial differences in specifications which preclude the use of the contract source or item/service. Such exceptions must be approved by the campus Director of Materiel Management. Exceptions on any basis other than the above circumstances must be approved in advance by the appropriate Commodity Manager or designee.
 
Unsatisfactory, unusual or significant supplier or product performance deficiencies should be reported to the Commodity Manager involved so that action may be taken to correct the deficiency.
 
 
D.       PROGRAM MANAGEMENT
 
1.       Executive Director – Strategic Sourcing, UCOP
 
Administers the University Strategic Sourcing Program, provides staff support for preparation of records, and reports on the performance of the Commodity Manager's administration of commodity agreements, price schedules and pool-purchases, and represents the University in its relations with the State Office of Procurement.
 
2. Commodity Manager
 
The Commodity Manager's responsibilities are to:
 
a.        Identify items for inclusion in the program which are purchased by more than one campus and in sufficient quantity to permit a price or cost reduction through consolidated purchasing.
 
b.       Develop specifications and standards through value analysis and consultation with others, and secure usage figures from those campuses that expect to participate in the consolidated purchase or resulting agreement.
 
c.        Solicit quotations, prepare and execute resulting pool-purchase orders, commodity agreements, or price schedules with the concurrence of the participants; administer and monitor performance.
 
d.       Review and evaluate existing purchase agreements for expansion or modification, schedule pool-purchases and renewal of commodity agreements and price schedules.
 
e.       Maintain up-to-date knowledge of current market conditions, as they pertain to assigned commodities, and keep campuses and laboratories informed of significant developments which could affect strategic purchasing.
 
f.         The Campus Director of Materiel Management acts as the Commodity Manager when commodities are assigned to the campus. The Commodity Manager seeks input from UC campus Purchasing Departments and end users and establishes Systemwide agreements for assigned commodities. The Commodity Manager's operational responsibilities for the program are delegated through the Campus Purchasing Manager to the Campus Strategic Sourcing Specialist.
 
3.  Campus Purchasing Manager and Strategic Sourcing Specialist
 
a.        Implement the delegated responsibilities of the Commodity Manager and provide daily operational oversight of the program.
 
 
E.         FEEDBACK
 
For questions regarding this policy or procedure, please contact the Director of Materiel Management.
 
 
 
F.        RELATED REFERENCES
 
·         UCOP Strategic Sourcing
·         BUS-43 Part 4 Planned Purchasing/Strategic Sourcing
·         Strategic Sourcing Agreements
 
 
 
G.       FREQUENTLY ASKED QUESTIONS – to be added in a future update