Purchase Requisitions

Parent Policy

Procurement Policy

A Purchase Requisition is an internal document that may be necessary in supporting the purchasing process when engaging a Supplier for the supply of goods and/or services.

Puirchase Requisitions can be created in the Universitity's ERP system (SAP) or be paper based and is used to:

• Provide information by a staff member or student to a Purchasing Officer on the need to acquire goods and/or services;
• Obtain internal apporval for the purchase of centrain goos and/or services prior to a Purchase Order being raised; and
• Consolidate requests for like goods and/or services from multiple requisitions a Purchase Order for a single Supplier.

It is important to note that as a Purchase Requisition is an internal document only, it is not a binding leagal contract and should never be forwarded to a Supplier.

Where it is necessary to obtain prior internal approval for acquiring specific goods and/or services, raising a Purchase Requisition in SAP allows the required approval process, via workflow, to be executed. The required approval process has been determined by the allocation of an appropriate “Release Strategy†to the specific class of goods and/or services as defined by the material Code.

The class of goods and/or services that have a Release Strategy applied are listed in Table (A) within this document. 

Definition of terms

Authorising Officer: A University Officer who has access rights to the University’s ERP system (SAP) with a set level of financial delegation and the authority to approve Purchase Orders. The authority to approve a Purchase Order may be for a specific Purchasing Group / Cost Centre or range of Purchasing Groups / Cost Centres, as appropriate.
Buyer: The person or organisation that seeks to acquire goods and/or services from a Supplier. In the context of this document the Buyer is Monash University (the University) or an affiliated organisation bound by the University’s regulations.
Contractor Threshold Value: The level (e.g. monetary value) prescribed by the University whereby a University Buyer seeking to engage the services of a contractor or consultant must issue an RFT or RFP seeking at least three competitive Bids from Suppliers for the proposed supply of services.
Director Strategic Procurment: The head of Monash Procurement or person nominated by the Vice-President (Finance) to oversee the activities of the Procurement unit.
Extended Price: The Extended Price is the extended cost of a line item on a Purchase Order and is usually the Unit Price x the Number of Items (See Unit Price).
Issuing Officer: A University Officer, usually based in a Cost Centre level, who requires a Purchase Order to be raised. The Officer is typically the person who requires the good or service or may also be the person who has the administrator access to the ERP system or the person with financial delegation to approve the Purchase Order.
Material Code: A code, to be entered into a SAP document (Purchase Requisition and Purchase Order) and assigned to each item that is used to classify the type of good / service required. Material Codes are subsets of Material Group Codes.
Material Group Code: A code used to classify like groups of materials as defined by the Material Code. A Release Strategy is usually applied at the Material Group level.
Monash Procurement / Procurement: Monash University’s Procurement unit that co-ordinates the University’s strategic procurement activities, organises major supply agreements for common use goods and acts as an advisory body for procurement related matters.
On-going Supply Contract: A contract or agreement executed between the Buyer and Supplier that covers the on-going supply of goods / services from the Supplier over a nominated period. Individual purchases can be made against an On-going Supply Contract by either setting up standing Purchase Orders that “call-off” on the Contract or by raising individual Purchase Orders that reference products and prices contained in the Contract. An On-going Supply Contract is usually arranged between “Endorsed Suppliers” for the supp
Procurement Board: The Board of management established by Monash University to promote and oversee best practice in the processes used by the University to procure goods and services in order to achieve value for the University’s expenditure. The Procurement Board will normally receive, for approval, the recommendations from a Tender Panel on the awarding of a Tender where the value of the Tender exceeds a prescribed threshold value.
Purchasing Officer: A University Officer who co-ordinates the purchase of goods and services for a Purchasing Group. The Purchasing Officer usually has authority to raise Purchase Orders in the University’s ERP system (SAP) and has a level of financial delegation to authorise Purchase Orders and other related purchasing documents.
Purchase Order: A formal document initiated by a Buyer and forwarded to a Supplier normally used to form the basis of a one-off contract between the parties for the supply of Goods and/or services to the Buyer.
Purchasing Group: A buyer or group of buyers who has responsibility for purchasing activities. A Purchasing Group may correspond to a Cost Centre or group of Cost Centres in a faculty, department or division.
Purchase Requisition: An internal document used by a University Officer (staff member or student) to signify goods / services that they require to be ordered from a Supplier. A Purchase Requisition can be a SAP-based document or a paper-based document. Where a Release Strategy applies to the class of good / service then a Purchase Requisition must be raised and authorised in SAP.
Quotation / Quote: A submission from a Supplier that specifies the cost of supplying a good or service.
Quotation Threshold Value: The level (e.g. monetary value) prescribed by the University whereby a University Buyer must seek at least three competitive Quotes from Suppliers for the proposed supply of goods or services.
Quotation/Tender Summary Form: A pro-forma, downloadable from the Monash Procurement website, which records all Bids submitted by Suppliers in response to an RFQ, RFT or RFP. The form should be signed off by the appropriate officer(s). The form and the related submissions from Suppliers are to be retained as a formal record and may be required for audit purposes.
Requisition: Means the same as a Purchase Requisition
Release Strategy: A strategy assigned to specific Material Groups in the ERP system (SAP) requiring authorisation of the requisition, to ensure that the goods/ services, conform to University regulations in regard to safety, technical capability or statutory requirement. Where a Release Strategy is assigned to a Material Group a requisition must be approved, before the goods/services can be listed on a Purchase Order.
Request for Proposal (RFP): A formal request to seek detailed proposals on goods/services that offer a viable solution to the requirement and where competing bids vary significantly in form and price. It is usual that evaluation of bids will require clarification before the most appropriate offer is accepted. The final, negotiated price may differ from the submitted price. An RFP is more prescriptive than an RFQ and differs from an RFT in that the requirement is usually less prescriptive and not as tightly specified.
Request for Quotation (RFQ): A request to a Supplier to provide a quotation covering the cost of providing goods or services prescribed in the RFQ. An RFQ is generally issued for lower value goods and services than for an RFT or RFP and a quotation is generally provided in a shorter timeframe by a Supplier. It is usual ,provided that the good/service offered by a Supplier meets the requirement specified in the RFQ, then the lowest price bid is accepted and goods/services is purchased at the quoted price.
Request for Tender (RFT): A formal request to provide a detailed submission covering the cost of providing goods or services prescribed in the RFT and there is no variations allowed. This means that all bids must either comply with or exceed the specification. Provided that the goods/services offered meet or exceed the specification prescribed in the RFT, the lowest price bid is accepted. An RFT is more prescriptive than in an RFQ and seeks a more detailed response on the goods/services as well as overall cost factors.
SAP: The University’s ERP system used for maintaining financial and related information and for creating, recording and processing purchasing related documents such as Purchase Requisitions and Purchase Orders.
Supplier: A person or organisation that can provide goods or services to a Buyer.
Tender: A competitive process, initiated by an RFQ, RFT or RFP, used to seek Bids from a Supplier with the aim of eventually acquiring goods/services for a Buyer.
Tender Threshold Value: The level (e.g. monetary value) prescribed by the University whereby a University Buyer must issue an RFT or RFP seeking at least three competitive Bids from Suppliers for the proposed supply of goods or services.
Tender Panel: A group, of three or more persons assigned, to evaluate responses to a Tender. The panel should be established prior to issuing a tender and should approve the content of the tender documentation prior to release. The panel is charged with making the final recommendation/decision as to which supplier(s) has been successful in their bid, based on an evaluation process against specified selection criteria, and will be required to sign-off their recommendation on a Quotation/Tender Summary Form.
Unit Price: The base price of a item as listed in the Supplier’s catalogue or provided by Quotation or Tender. The Extended Price is usually the Unit Price x the Number of Items (See Extended Price).

Raising a Purchase Requisition

Responsibility

Issuing Officer or Purchasing Officer

Information required in a SAP-based Purchase Requisition

Mandatory Information

The information entered in the ERP system against a Purchase Requisition must:

• Clearly identify the goods and/or services required to be acquired with reference to Supplier's catalogue / product numbers, where available;
• Have a Material code to assist in the detailed classification of the goods and/or services being acquired; and
• Identify the goods as an asset, if applicable.

Responsibility

Issuing Officer

Other, non-mandatory information that can be added to a Purchase Requisition

The information recorded in the ERP system against a Purchase Requisition can also contain:

• The nominated Supplier (Vendor). Note that the Vendor is a mandatory field for a requisition to engage a consultant where the value will exceed $50K;
• The Unit Price and Extended Price of each good / service required;
• Details on where the intended goods should be delivered or where the services are required to be provided;
• The General Ledger code (Account Code) in order to classify the expenditure type for formal recording in the University's accounts;
• The source of funds (Cost Centre and Fund codes) to which expenditure will be recorded.

Responsibility

Issuing Officer

Authorising a Requisition

If the class of goods / services required falls within one of the mandatory groups listed in Table A, for which a Release Strategy applies, then a Purchase Requisition must be created that will require subsequent authorisation by an Authorising Officer.

The Authorising Officer must log into SAP, using their unique log in code and password, in order to approve (release) a Purchase Requisition. Prior to approving a Purchase Requisition, the Authorising Officer must be satisfied that:

• The goods / services to be acquired conform to University regulations in regard to safety, technical capability, and/or statutory obligations (i.e. where the University may hold a licence for a particular activity) as assigned under the relevant Release Strategy.
• Where required, for goods / services exceeding the Quotation Threshold Value that the Procedure for Tenders and Quotations has been properly followed to ensure a competitive process was used to select the Supplier.

Responsibility

Authorising Officer

Supporting document to accompany a Requisition

Where a Purchase Requisition has been raised with the intent of a subsequent Purchase Order being generated, and the proposed purchase of goods and/or services exceeds certain threshold monetary values, then the authorisation of a Purchase Order must be supported by associated Market Engagement documentation (RFQ, RFP, RFT) that was used to ensure that the selection of the Supplier was carried out in a competitive manner and with an appropriate level of probity in order to protect the reputation of the University. As a consequence, if required, the raising of a Purchase Requisition should also provide suitable evidence of a competitive process being completed.

Evidence that there has been a competitive process, is to be summarised on a Quotation / Tender Summary Form that must be cross-referenced to the Purchase Order and provided to the Authorising Officer.

The Quotation / Tender Summary Form must be forwarded to the Director Startegic Procurement or Procurement Board, as required, for the approval and release of high value Purchase Orders.

The University requires that a competitive process be applied, as appropriate, when seeking goods / services in excess of the Quotation Threshold Value or the higher Tender Threshold Value, as appropriate. For services requiring the engagement of a contractor or consultant the Contractor Threshold Value is applicable.

Responsibility

Issuing and/or Authorising Officer

Table (A) – Goods / Services with an applied Release Strategy

Requisitions will also be required to be raised for asset purchases >$5,000 (i.e. requisitions with an Account Assignment Category A or U).

Responsibility

Issuing and/or Authorising Officer

Contact Person: Finance Policy