SECTION CONTENTS 1000.00 Contract Administration 1010.00 Receipt of Merchandise 1020.00 Return of Merchandise 1030.00 Payment Procedures (Banner Payment Authorization)
1000.00 Contract Administration
The goal of contract administration is to ensure the University receives
satisfactory goods and services and the Vendor receives proper compensation.
Contract administration includes all dealings between the University and Vendors
from the time the contract is awarded until the work has been completed and
accepted, payment has been made, and disputes have been resolved. As a result,
contract administration constitutes a large part of the activity in the
post-award purchasing process. Due to the level of de-centralized purchasing at
MSU, Departments are responsible for certain contract administration duties
including receipt of merchandise, return of merchandise, and payment of
invoices.
1010.00 Receipt of Merchandise
Each department is responsible for receiving and accepting incoming freight.
Departments are required to follow the procedures outlined in
Appendix T.
Departments are advised to carefully inspect the shipment upon receipt, prior to
signing the freight invoice. The freight invoice is used to document acceptance
of the shipment.
A. Damage to Merchandise
When damage to a shipment is apparent or suspected, the department
representative responsible for accepting the shipment must annotate the damages
on the freight invoice. The person responsible for delivery of the shipment must
sign all copies of the freight invoice. In order to establish carrier liability
and provide proof of evidence to support future claims, the freight invoice must
be signed by both parties. The department must contact the freight company
within 15 days to request a damage inspection report. The department should call
the MSU-PD to notify them of any damage.
B. Freight on Board (F.O.B. Point)
F.O.B. Destination: Normal business procedures at MSU require that all shipments
of goods be F.O.B. Destination. The vendor pays for all freight charges and the
title of goods transfers to MSU upon delivery and acceptance of goods.
F.O.B. Shipping Point-Collect: On occasion, the vendor expects payment for
freight upon delivery and acceptance. Departments may accept the shipment by
signing the receipt and writing the correct department charge number and
Purchase Order number on all copies of the freight bill. When using this
alternative, the department must remember to deduct the freight bill from the
invoice total; identify the deduction in the remittance information on the BPA
form; and attach one copy of the collect freight bill to the invoice copy.
C. Partial Shipment Payment Policy
Departments must promptly process all invoices for supplies and services
received as the result of a Contract. Departmental Purchase Orders, Purchase
Orders, and Contracted Services Agreements are the most common types of
contracts awarded by the University. Standard payment terms are Net 30. Unless
the contract specifies differently, invoices are to be paid within 30 calendar
days after receipt. Do not accumulate partial invoices or delay payment until
the entire order is received, unless the Purchase Order specifically states that
no payment will be made until the entire order is received.
1020.00 Return of Merchandise
If the department issued the contract, the department should make arrangements
to return the merchandise. If the MSU-PD issued the contract, arrangements must
be made through the MSU-PD. The department must submit a memo to the MSU-PD
informing them of the return. This will ensure that the returns are properly
made and the encumbrances are properly modified.
1030.00 Payment Procedures (Banner Payment
Authorization)
For current payment procedures, please see the Business Procedures Manual posted
at: http://www2.montana.edu/policy/business_manual/index.html. For questions regarding payment procedures, contact
the Montana State University-Bozeman University Business Office at 994-5727.
A. The contract number (Purchase Order #, CSA #, etc.) must be identified
on
the BPA in the box identified as " PO/ENC" (Purchase Order/Encumbrance).
This box applies to contract issued by the following Agencies:
Issued by: Contract #
State Procurement Bureau XXXX
State Print & Mail Services Bureau 0XXXXXXX
State Property & Supply Bureau 92XXXX
MSU-Bozeman Purchasing Department
Purchase Orders PXXXXXXX
Contracted Service Agreements CS0XXXXX
Contracts C0X-XXXX
B. The "P/F" (Partial/Final) column must also be completed. This
identifies if this payment is a partial payment or a final payment.
C. When the PO number is filled in correctly, the Purchase Order
encumbrance will be adjusted (reduced). If the payment is processed without the
PO number, the encumbrance is not adjusted. The MSU-PD will discover the error
and will make the appropriate changes in Banner to reconcile the account.
D. Departments are responsible and accountable for properly filling out
the BPA form. Submission of BPA's with the proper information will ensure that
the system is properly updated. please remember to enter the PO # on the BPA.
E. The "Purchase Order" box does not apply to Departmental Purchase
Orders, because the MSU-PD does not encumber DPO's issued by departments.
F. Departments are not required to send copies of Departmental Purchase
Order's to the MSU-PD. However, Departments ARE REQUIRED to retain copies of all
DPO's within their department files.
