1000.00 Contract Administration
- Table of 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 Procurement & Contract Services 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 Procurement & Contract Services issued the contract,
arrangements must be made through the Procurement & Contract Services. The department
must submit a memo to the Procurement & Contract Services 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 Section 1030 of the Business Procedures Manual https://www.montana.edu/policy/purchasing/purch1000.html#1030. For questions regarding payment procedures, contact the 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 #
MSU-Bozeman Procurement & Contract Services
Purchase Orders PXXXXXXX
Contracts CS0XXXXX
Contracts KXX-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. Procurement Services 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 Procurement & Contract Services does not encumber DPO's issued by departments.
F. Departments are not required to send copies of Departmental Purchase Order's to the
Procurement Services. However, Departments ARE REQUIRED to retain copies of all DPO's
within their department files and must submit a copy of the DPO or CSA with payments
to vendors.