Procurement Procedures:

3.7 - Blanket Purchase Agreements

PURPOSE

To define the term "Blanket Purchase Agreement" and "Blanket Purchase Order" and the policy and procedure pertaining to their creation and use.

DEFINITION

Blanket Purchase Agreement: An agreement with a vendor for purchasing commodities or services of low dollar value and high volume, repetitive activity. A Blanket Purchase Agreement does not encumber funds and cannot exceed $100,000 over the term of the agreement. The agreement must be for a specified term, not to exceed five years in total.

Blanket Purchase Order: An order that is placed with a vendor based upon the Blanket Purchase Agreement; this is the actual contract between the vendor and Rensselaer.

WHEN TO USE

• Total spend over the term will not exceed $100,000
• Funds are not encumbered
• Vendors from which numerous individual purchases are likely to be made during a given period of time
• Where practical, Blanket Purchase Agreements should be established with more than 1 vendor providing the same commodity or service

A Blanket Purchase Agreement must include:

• Statement of commodities or services to be provided
• Individual purchase limitations
• Thirty day written notice statement to cancel
• Statement listing individuals authorized to purchase from Blanket Purchase Agreement
• Specifications as to when each order becomes a binding contract (eg issuance of the order, acceptance of the order in a specified manner, or failure to reject the order within a certain number of days)

POLICY

The authority to commit Rensselaer to blanket purchase agreements and orders lies only within the Purchasing Department.

The Purchasing Department will consolidate like commodities and services into single blanket purchase agreements to the maximum extent possible without jeopardizing quality or delivery requirements.

Blanket purchase agreements may be reviewed periodically to ensure the established pricing and terms are fair and reasonable. Additionally, the blanket purchase agreements will be audited periodically for compliance with monetary caps and restrictions that have been stipulated by the Purchasing Department.

Individual commitments to vendors will be authorized by individuals based on Rensselaer’s Delegation of Contractual Authority. Approval authority is based on individual authority and not the aggregate of commitments.

PROCEDURE

A. Identification

1. Purchasing will identify Blanket Purchase Agreement opportunities based upon Institute activity
2. A department can request a Blanket Purchase Agreement in accordance with the above definition. Purchasing will in turn review such requests in accordance with but not limited to the following:
• Vendor volume - past, current and anticipated dollar volume and frequency of use.
• Similar order existence - ascertain whether another department(s) has a similar need and/or if an order already exists with which this request could be combined.
3. If the request is found to be valid, Purchasing will issue a Request for Quote, and select a vendor as per Vendor Solicitation Policy 2.2 and create a Blanket Purchase Agreement.

B. Blanket Purchase Agreements Processing

1. Blanket purchase agreement information will be entered into the ERP system.
2. The blanket purchase agreement number is assigned by a Purchasing Agent.
3. The blanket purchase agreement does not commit the Institute to expend funds or encumber funds. An estimated dollar amount is entered onto the computer system. As commitments are authorized, departmental budgets are charged and the total order amount is decremented from the department budget. When the order amount has been depleted or a proposed commitment would cause an overrun, a change order may be issued by the Purchasing Department if adequate justification is provided by the Requesting Department. A Purchasing Agent will then make necessary changes to increase the funding.
4. The blanket purchase agreement has a termination date. Payment of invoices cannot be made if goods are received or services performed after the termination date.
5. The blanket purchase agreement is printed in the Purchasing Department and signed by a Purchasing Agent.

C. Blanket Purchase Agreement Distribution

1. The white copy will be mailed or faxed to the vendor.
2. The pink copy (departmental file copy) will be mailed to the Requesting Department, unless the blanket order has been created by Purchasing for campus-wide use.
3. The green copy is to be used as a Receiving Report.
4. The yellow copy remains with the Purchasing Department file containing documentation associated with the order.

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Revised 3/02, 9/02, 7/04, 2/05