Policy 741 Updates LVO Guidelines

UCLA Policy 741 replaced UCLA Procedure 740.1 on July 1, 2010, ushering in a number of significant new guidelines for low-value purchases.

Key Policy Updates

The low-value order (LVO) threshold remains $5,000 per vendor per account per day, before shipping and sales tax, and is intended to be used for purchases not covered by existing agreements.

Policy 741 highlights include:

Policy 741 Feature	Details
Strategic Sourcing Agreements	Use of these agreements — offering added service and economies of scale — is strongly encouraged. Since the inception of the Strategic Sourcing program, which leverages campus and systemwide spend, the campus has purchased over $500 million in goods and services from these strategic contracts and saved in excess of $100 million. EVC Scott Waugh's Restructuring Steering Committee, formed to achieve cost savings, has emphasized: The use of FedEx for expedited mail in almost all categories over UPS and DHL Global. The purchase of deeply discounted standard configuration personal computers, especially HP Super Savers available through KST Data. The use of Software Central to aggregate the purchase of software licenses for the campus. More than 170 Strategic Sourcing agreements have been established, typically including multiple suppliers within a category to allow for choice, good value and the convenience of ready-to-use agreements, often with higher release limits to facilitate purchases. Strategic Sourcing agreements can be found in the Vendor Agreements List.
Reimbursements	Use of employees' personal funds and reimbursements for procurement of goods and services is discouraged. With the release of this new LVO Policy 741, a $1,000 limit has been established for reimbursements for purchases other than travel, entertainment, conference registrations, tuition reimbursement, journal publication fees and maintaining professional credentials. Travel and entertainment are covered in UC policies G-28 (Travel) and BUS-79 (Entertainment), and are reimbursed, along with conference registrations, through the Express system. The purpose of the reimbursement restriction is to focus purchases on goods and services covered by University agreements and use standard University processes for the approved methods identified above. Appropriate business purchases using the approved purchasing methods are not being restricted. This $1,000 maximum on reimbursements takes effect June 1, 2012.
Policies & Legal Restrictions	Departments need to be aware of federal funding requirements, conflict of interest policy and law, and restrictions on LVOs and the use of University funds.

Policy 741 Feature

Details

Strategic Sourcing Agreements

Use of these agreements — offering added service and economies of scale — is strongly encouraged. Since the inception of the Strategic Sourcing program, which leverages campus and systemwide spend, the campus has purchased over $500 million in goods and services from these strategic contracts and saved in excess of $100 million.

EVC Scott Waugh's Restructuring Steering Committee, formed to achieve cost savings, has emphasized:

The use of FedEx for expedited mail in almost all categories over UPS and DHL Global.
The purchase of deeply discounted standard configuration personal computers, especially HP Super Savers available through KST Data.
The use of Software Central to aggregate the purchase of software licenses for the campus.

More than 170 Strategic Sourcing agreements have been established, typically including multiple suppliers within a category to allow for choice, good value and the convenience of ready-to-use agreements, often with higher release limits to facilitate purchases.

Strategic Sourcing agreements can be found in the Vendor Agreements List.

Reimbursements

Use of employees' personal funds and reimbursements for procurement of goods and services is discouraged.

With the release of this new LVO Policy 741, a $1,000 limit has been established for reimbursements for purchases other than travel, entertainment, conference registrations, tuition reimbursement, journal publication fees and maintaining professional credentials. Travel and entertainment are covered in UC policies G-28 (Travel) and BUS-79 (Entertainment), and are reimbursed, along with conference registrations, through the Express system.

The purpose of the reimbursement restriction is to focus purchases on goods and services covered by University agreements and use standard University processes for the approved methods identified above. Appropriate business purchases using the approved purchasing methods are not being restricted. This $1,000 maximum on reimbursements takes effect June 1, 2012.

Policies & Legal Restrictions

Departments need to be aware of federal funding requirements, conflict of interest policy and law, and restrictions on LVOs and the use of University funds.

Ways to Buy

Campus departments may purchase goods and services using various approved methods, including:

Low-Value Orders (LVOs)
Procurement cards (Pcards") for most types of LVOs, but at lower limits
BruinBuy electronic catalog purchases
Purchase orders
Department blanket orders
Campuswide and UC-wide Strategic Sourcing agreements

LVO Terms

Standard LVO concepts continue to apply:

Departments do not have the authority to sign purchase contracts as this delegation resides with Purchasing.
The time to issue an LVO is at the time of commitment to the supplier, using the "fax to vendor" functionality in BruinBuy to present UC terms and conditions.
Repetitive requirements should be addressed by establishing purchase orders or blanket orders through Purchasing, not with multiple LVOs.
Orders should not be split to stay below the LVO threshold.