26313-1 - SMALL PURCHASE PROCEDURES MANUAL (still 2600-103-26.9)
Issuing Office:  OA/AM/SPP  496-5214
Release Date:  5/16/83
_________________________________________________________________
                             Part I
                        General Policies
 
               A.   Purpose
 
               B.   Small Purchase Methods
 
               C.   Definitions
 
               D.   Compliance with Procurement Procedures
 
               E.   Code of Ethics
 
               F.   Fund Availability
 
               G.   Restricted Items
 
               H.   Capitalized Equipment (Accountable Property)
 
               I.   Buy American Act
 
               J.   Requesting Delegated Authority
 
               K.   Forms
 
               L.   Inquiries
 
Part II        Telephone Charge Order System
 
Part III       Cash Method
 
Appendices     Appendix 1, Public Law 95-507--Small Business Act
               Amendment
 
               Appendix 2, Listing by Commodity and TCO Supplier
 
               Appendix 3, Alphabetical Listing of TCO Suppliers
 
                             PART I
                        GENERAL POLICIES
 
A.   Purpose  This manual provides information and instructions
     relating to simplified small purchasing methods.  The
     objective of the Telephone Charge Order (TCO) and cash
     systems are to (1) advantageously serve the needs of the NIH
     Community; (2) reduce the processing time and costs of small
     purchases; and (3) expedite the receipt of required
     materials.
 
     1.   It is responsibility of the Procurement Branch,
          Division of Administrative Services (DAS), NIH to
          obtain equipment and supplies which will meet the
          exacting requirements of the National Institutes of
          Health by the most effective procurement method, at the
          lowest possible cost, and as rapidly as feasible.
 
B.   Small Purchase Methods
 
     Telephone Charge Order (TCO) and cash procedures permit fast
     and efficient methods for handling orders for small dollar
     requirements.  An emergency situation is not a justification
     for violating the procedures of this manual, i.e., splitting
     requirements, ordering restricted items, or failing to
     obtain proper clearances. An emergency requirement that
     cannot be ordered under this authority will be handled in
     accordance with NIH Manual Issuance 2600-103-26.3, Emergency
     Purchases.
 
C.   Definitions
 
     The following definitions are for purposes of this manual
     only:
 
     1.   Approving Official - An individual granted ordering
          authority by the Procurement Branch.
 
     2.   Authorized Orderer - An individual authorized by the
          approving official to contact suppliers to obtain
          information relative to price, item availability,
          discounts, etc.  The procedure for granting this
          authority is the responsibility of the Institute or
          Division.
 
     3.   Cash or TCO Bearer - An individual designated by the
          approving official as a messenger for the pick up of a
          purchase.  In most instances, this individual should be
          someone other than the requisitioner or the consignee.
          The cash bearer will only disburse the cash to the
          supplier specified in the "payee" block of Standard
          Form 44 (SF-44).  Cash bearers need not be bonded if
          only occasionally making purchases.  Bonding of regular
          cash bearers may be requested by memorandum from the
          approving official to the Chief, Operations Accounting
          Branch, Division of Financial Management (DFM).
 
     4.   Consignee - An individual authorized to sign acceptance
          documents.  The consignee must be an individual other
          than the approving official.
 
     5.   Covered - An item, product, supply, etc., which is
          required to be obtained from a General Services
          Administration (GSA) Federal Supply Schedule (FSS)
          contract or Other Government Agency (OGA) contract.
          This term includes like items which have "a similar
          end-use function" to the required item.
 
     6.   NIH Messenger - An official bonded messenger of the
          Transportation Branch, DAS, who performs
          off-the-reservation pick up and delivery services.
          Requests for this service should be made to the Vehicle
          Dispatch and Shuttle Section, Building 1, Room 29A,
          (Tube Station AT-O).  The telephone number may be found
          in the yellow pages of the NIH Telephone Directory
          under "Messenger Service."
 
     7.   Ordering Authority - The authority delegated by the
          Procurement Branch to certain individuals to obtain
          supplies by methods set forth in this manual.  (See
          paragraph J below for instruction on requesting
          delegated authority.)
 
     8.   Split Purchase - A split purchase occurs when a known
          requirement(s) is (are) divided and placed as separate
          orders because the total dollar value would have
          exceeded the established dollar limitation.  This
          includes (1) large quantity single item requirements
          that are divided into smaller quantity orders, and (2)
          requirements consisting of several items that are
          broken into individual orders to avoid the dollar
          limitation.  Such actions are prohibited whether the
          orders are placed with one, or with several suppliers.
 
     9.   TCO Suppliers - An approved TCO supplier is one which
          has entered into a written agreement with the
          Procurement Branch enabling the supplier to accept
          TCO's while legally imposing certain obligations upon
          the supplier's performance in a TCO transaction.
 
          a.   Appendix 3 of this manual lists the suppliers
               currently approved to receive Telephone Charge
               Orders.
 
          b.   Ordering offices desiring the addition of a
               supplier to the approved list must submit a
               memorandum to the Procurement Branch, Building 31,
               Room 3C39, indicating the reason(s) the new
               supplier should be added.
 
     10.  Open Market Item - An item not covered by a mandatory
          source of supply such as GSA/FSS contracts.
 
D.   Compliance With Procurement Procedures
 
     1.   It is the responsibility of the Procurement Branch to
          assure that ordering offices comply with (a) the United
          States Codes and regulations as published in the
          Federal Procurement Regulations (FPR), Federal Property
          Management Regulations, PHS Procurement and Material
          Management Regulations, (b) NIH Manual Issuances, and
          (c) all other laws and regulations pertaining to
          government procurement.
 
     2.   The Procurement Branch will (a) conduct random
          assistance inspections of activities having delegated
          ordering authority and (b) review selected individual
          actions as they are processed through the system to
          ensure that actions taken under the delegated authority
          comply with this manual.
 
     3.   Approving officials will be kept apprised of actions
          which, upon review, appear to be in conflict with the
          procedures set forth in this manual.  NIH Form 421-2,
          "Procurement Discrepancy in Decentralized Small
          Purchasing" will be prepared and forwarded to them by
          the Procurement Branch.  The report will describe the
          apparent deviation and provide the approving official
          the opportunity to review the action and either (a)
          take corrective action to prevent a recurrence, or, (b)
          describe the circumstances which demonstrate that the
          order was proper.  In compliance with instructions from
          the Department, copies of the discrepancy reports and
          reports of assistance inspections together with the
          responses will be made a part of the Procurement Branch
          delegation of authority file for that activity.
 
     4.   The procurement of preference items should be avoided.
          Preference items can be defined as those items in which
          one has a preference for a particular item over a
          similar item that would serve the same functional
          end-use purpose.  Personal preference without other
          substantive considerations is not acceptable as
          sufficient justification to procure other than the
          lowest priced item.
 
     5.   Failure to comply with the requirements of this manual
          will result in the withdrawal of delegated ordering
          authority and may subject the individual(s) to
          disciplinary action.
 
     6.   Public Law 95-507  (Note:  This is a new requirement.).
          The law states in part:  "Each contract for the
          procurement of goods and services which has an
          anticipated value of less than $10,000 and which is
          subject to small purchase procedures shall be reserved
          exclusively for small business concerns unless the
          contracting officer is unable to obtain offers from two
          or more small business concerns that are competitive
          with market prices and in terms of quality and delivery
          of the goods or services being purchased."  Under the
          TCO program, whenever an item is available from both a
          small and a large business, the purchase MUST be made
          from the small business unless one of the following
          conditions apply:
 
     a.   The item to be procured is a Federal Supply Schedule or
          other Government Agency contract item and a mandatory
          supplier is being used (see Part II, Para. A.2 of this
          manual).
 
     b.   The small business concern cannot meet the 10-day
          required shipping time and the large business concern
          supplying the same item is able to meet this
          requirement.
 
     c.   The price offered by the small business concern is not
          reasonable or competitive with market prices.
 
     If you proceed with b or c, you must make a note on the
     ordering form as to why you ordered from a large business.
     To aid you in fulfilling this requirement, we have added an
     asterisk (*) beside the name of each small business supplier
     in the commodity listing (Appendix 2) and written out the
     size of business next to each supplier's name in the
     alphabetical listing in Appendix 3.
 
E.   Code of Ethics
 
     NIH purchasers should be guided by form HEW 539,  "Standards
     of Conduct" in dealings with suppliers.  Acceptance of
     favors or gifts, purchases from government employees, etc.,
     are prohibited.  Administrative officers can provide copies
     of form HEW 539.
 
F.   Fund Availability
 
     Prior to placing orders under the TCO or cash systems,
     approving officials must insure that sufficient funds are
     available.
 
G.   Restricted Items
 
     1.   Ordering of the following items is prohibited under the
          decentralized ordering procedures set forth in this
          manual:
 
          a.   Clearance required - those items specified in NIH
               Manual 2600-103-26.2, "Clearance Requirements for
               Controlled Commodities and Services Prior to
               Purchase."
 
          b.   Items Stocked by NIH - items available from the
               NIH Central Store Supply System.  (Use form NIH
               20, Stock Requisition.)
 
               Note:
 
               (1)  If the specification of an item stocked by
                    the NIH Central Store Supply System does not
                    meet your requirements, and you need to order
                    a similar item from an outside source, do the
                    following:
 
                    i.   Type a short justification on the
                         ordering form which will demonstrate
                         that this particular item is needed and
                         that the NIH centrally stocked item is
                         not suitable, and
 
                    ii.  Have the responsible approving official
                         sign the ordering form authorizing the
                         purchase.
 
               (2)  If you need a NIH Central Store supply item
                    that is out of stock, call the Inventory
                    Management Section, Supply Operations Branch,
                    496-3395, to obtain approval.  The
                    justification and the name of the individual
                    who granted the approval must appear on all
                    copies of the TCO.
 
          c.   Items available from the GSA stock.  FPMR requires
               that purchases must be made from GSA stock when
               the single line item cost is $25 or more.  If
               copies of the GSA Supply Catalogs are not
               available in your immediate area, please contact
               your Administrative Officer to determine if the
               item is available from the GSA stock catalog.
 
          d.   Drugs under the jurisdiction of the controlled
               Substances Act of 1970 (Public Law 91-513, as
               amended).  Lists are published in Title 21, Code
               of Federal Regulations and Amendments are
               published in the Federal Register.  (See NIH
               Manual 1345, Controlled Substances (Narcotics and
               Dangerous Drugs).
 
          e.   Pesticides, including pesticide "strips"
 
          f.   Publications; e.g., magazines, newspapers,
               pamphlets or periodicals.
 
          g.   Services of all types including leases or rentals,
               maintenance, repair, professional or technical.
 
     2.   Personal appeal items are those items which can be used
          for official duties as well as for personal use.  When
          buying such items:  (a) type a short justification on
          the ordering form which will demonstrate that this item
          is needed for a legitimate NIH purpose, and (b) have
          the responsible approving official sign the ordering
          form authorizing the purchase.  Following are examples
          of these items:
 
                    Adding machines, calculators, typewriters, etc.     
                    Brief cases (attache and similar type items)
                    Cameras and accessories
                    Hair dryers
                    Radios
                    Thermos, carafes
 
               Note:  Under no circumstances will appropriated
               funds be used for the purchase of coffee makers,
               cups, and other accessories.  Individuals using or
               authorizing appropriated funds for such purchases
               will be required to reimburse the government the
               full amount.  (Ref:  Comptroller General Decision
               B-163764 rendered May 17, 1968).
 
H.   Capitalized Equipment (Accountable Property)
     Capitalized equipment is usually defined as equipment valued
     at $300 or more.  Such equipment must be identified and
     carried in an agency's property inventories.  Capitalized
     equipment may be purchased up to $500, within the
     limitations set forth below, PROVIDED that all purchases of
     capitalized equipment over $300 be reported by making and
     sending a copy of the TCO order to the Personal Property
     Branch, Building 13, Room 2E59, Attention:  Mr. George
     Gilkenson.
 
               Authorized for TCO purchase:
 
                    (1)  equipment not otherwise restricted which
                    has a total dollar value of less than $500
                    (see above for purchases over $300).
 
                    (2)  replacement parts for capitalized
                    equipment provided the total dollar value of
                    the item does not exceed the amount
                    authorized for TCO.
 
I.   Buy American Art
 
     Many of the distributors listed in Appendix 3 sell foreign
     made products for which there are domestic equivalents.  As
     a general rule, when the authorized orderer is aware that
     the item is foreign made, domestic products must be procured
     unless one of the following conditions apply:
 
     1.   The cost of the American made product is at least 12%
          more than the foreign made product.
 
     2.   The foreign product is the only one suitable for
          reasons such as:  formula, packaging immediate
          availability, continuity of experiments, etc.  Ordering
          personnel must cite the reason(s) on the TCO form.
 
J.   Requesting Delegated Authority
 
     1.   Requests for delegation of ordering authority shall be
          completed  and forwarded in accordance with the
          procedures set forth in NIH Manual 1131-1 "Requests for
          Delegation of Procurement Authority."
 
     2.   B/I/D's should exercise restraint on their number of
          delegations.  Individuals for whom such authority is
          requested must (a) be familiar with the requirements
          and restrictions set forth in this manual, (b) be in a
          responsible position.
 
                            PART III
                        SF-44 CASH METHOD
In addition to the General Policies and Procedures prescribed in
Part I, the following policies and procedures apply specifically
to Cash Purchases:
 
A.   CONDITIONS FOR USE
 
The SF-44 is designed to be used for small purchases that are not
available from a mandatory source, a TCO supplier, or required to
be obtained through other procurement procedures.  This procedure
should not be used, however, to rectify poor management methods.
Cash purchases may not exceed $150.00 for any one transaction,
except that under emergency conditions, the amount for any one
transaction may be increased not to exceed $300, unless otherwise
authorized through special delegations of authority.  (Emergency
justifications should be cited on the SF-44, if possible, or be
attached to it).
 
All of the following conditions must be met before the SF-44 cash
purchase procedure can be used:
 
     1.  The material is not a restricted item (refer to Part I,
     General Policies, Paragraph G. RESTRICTED ITEMS).
 
     2.  The cost of the supplies does NOT exceed the dollar
     limitation established for cash purchases.
 
     3.  The required item does not involve a cash deposit on a
     shipping container.
A memorandum is not usually required for the use of the SF-44.
However, if an item fails to meet any of the above conditions,
approval from the Programs and Analysis Staff, Procurement
Branch, DAS, must be requested by memorandum, prior to
preparation of the SF-44.  A copy of the approval must be
furnished to the Agent Cashier before the cash will be dispersed.
Any questions concerning the necessity for obtaining approval for
the use of a SF-44 should be directed to that office on extension
496-5321 or 496-5401.
 
B.   PROCEDURE FOR NIH PICK UP
 
     APPROVING OFFICIAL  1.  Obtains SF-44 book.
 
     AUTHORIZED ORDERER  2.  Calls the supplier, asks if the
                         material is available.  If so, obtains
                         Government price, gives the supplier the
                         order number and asks to have the item
                         packaged and held for pickup.
 
                         3.  Prepares SF-44 (refer to Instruction
                         1 for completing SF-44) and records
                         purchase on the "Record of Purchase",
                         inside cover of the SF-44 book.
 
     APPROVING OFFICIAL  4.  Signs all copies of the SF-44, in
                         space marked "Ordered By" and returns
                         all copies to the Authorized Purchaser.
 
     AUTHORIZED ORDERER  5.  Retains green copy and gives
                         remaining copies (plus memorandum of
                         approval, if any), to the Cash Bearer or
                         forwards them to the NIH Messenger
                         Service, Vehicle Dispatch and Shuttle
                         Section, Transportation Branch, Building
                         1, Room 29A, Tube Station AT-O.
 
     NIH MESSENGER OR    6.  Takes the SF-44 to the Cashier
     CASH BEARER         either in Building 31, Room B1B23 or
                         Building 10, Room 1N259.
 
     CASHIER             7.  Has messenger or bearer sign for the
                         funds on the reverse side of pink and
                         white copies.  Gives the white copy to
                         the messenger or bearer and retains the
                         remaining copies.  When appropriate,
                         requests and retains a copy of the
                         memorandum of approval.
 
     NIH MESSENGER       8.  Goes to Seller as shown on the
     OR CASH BEARER      SF-44, receives merchandise and sales
                         ticket or cash register receipt,
                         (trading stamps when offered), and pays
                         only for those items received.
 
     VENDOR              9.  Signs the white copy of the SF-44 in
                         space marked "Seller," enters date,
                         checks "Payment Received" box and
                         indicates exact amount of money
                         received.
 
     NIH MESSENGER       10.  Delivers merchandise to the
     CASH BEARER         designated ordering office ("Furnish
                         Supplies or Services to").
 
     AUTHORIZED ORDERER  11.  Signs the white copy of the SF-44,
     /COSIGNEE           indicating title in the appropriate
                         space.
 
     NIH MESSENGER       12.  Returns the signed white copy to
     OR CASH BEARER      the Agent Cashier along with the sales
                         ticket and/or cash register receipt,
                         trading stamps (whenever received) and
                         all monies not spent.
 
     CASHIER             13.  Destroys the blue copy as its use
                         is not prescribed for cash transactions
                         and distributes the remaining copies as
                         follows:
 
                              a.  White copy to Accounts Payable
                              Section, DFM, Building 31, Room
                              B1B10.  (Attaches memorandum of
                              approval, if any.)
 
                              b.  Salmon copy to the Programs and
                              Analysis Staff, Procurement Branch,
                              DAS, Building 31, Room 3C-39.
 
                              C.  Pink copy to the "Authorized
                              Orderer" to be retained with green
                              copy for three(3) years, at which
                              time it may be destroyed.
 
C.   C.O.D. PROCEDURES
 
     APPROVING OFFICIAL  1.  Obtains SF-44 book.
 
     AUTHORIZED ORDERER  2.  Calls the supplier, asks if the
                         material is available.  If so, obtains
                         Government price, gives the supplier the
                         order number and asks to have the item
                         packaged and held for C.O.D.
                         confirmation.  (You must assure funds
                         are available before making a
                         commitment.)
 
                         3.  Prepares SF-44 (refer to Instruction
                         1 for completing SF-44) and records
                         purchase on the "Record of Purchase",
                         inside cover of the SF-44 book.
 
     APPROVING OFFICIAL  4.  Assures funds are available, signs
                         all copies of the SF-44 in space marked
                         "Ordered By", and returns all copies to
                         the Authorized Purchaser.
 
                         5.  Calls supplier and confirms C.O.D.
 
     AUTHORIZED ORDERER  6.  Retains green copy and takes
                         remaining copies (plus memorandum of
                         approval, if any), to the Cashier in
                         Building 31, Room B1B23 or Building 10,
                         room IN259.
 
     NIH MESSENGER OR    6.  Takes the SF-44 to the Cashier
                         either
     CASH BEARER         in Building 31, room B1B23 or Building
                         10, Room IN259.
 
     CASHIER             7.  Has Authorized Purchaser sign for
                         the funds on the reverse side of pink
                         and white copies.  Gives the white copy
                         to the Authorized Purchaser and retains
                         the remaining copies.  When appropriate,
                         requests and retains a copy of the
                         memorandum of approval.
 
     AUTHORIZED ORDERER  8.  Receives merchandise and sales
                         ticket or cash register receipt,
                         (trading stamps when offered), and pays
                         only for those items received.
 
     SUPPLIER's DELIVERY 9.  Signs the white copy of the SF-44 in
     PERSON              space marked "Seller," enters date,
                         checks "Payment Received" box and
                         indicates exact amount of money
                         received.
 
                         10.  Signs the white copy of the SF-44,
                         indicating title in the appropriate
                         space.
 
     AUTHORIZED ORDERER  11.  Returns the signed white copy to
                         the Agent Cashier along with the sales
                         ticket and/or cash register receipts,
                         trading stamps (whenever received) and
                         all monies not spent.
 
     CASHIER             12.  Destroys the blue copy as its use
                         is not prescribed for cash transactions
                         and distributes the remaining copies as
                         follows:
 
                              a.  White copy to Accounts Payable
                              Section, DFM, Building 31, Room
                              B1B10. (Attaches memorandum of
                              approval, if any.)
 
                              b.  Salmon copy to the Programs and
                              Analysis Staff, Procurement Branch,
                              DAS, Building 31, Room 3C-39.
 
                              c.  Pink copy to the "Authorized
                              Orderer" to be retained with green
                              copy for three(3) years, at which
                              time may be destroyed.
 
The Purchase Order-Invoice-Voucher, SF-44, shall be completed as
follows (refer to illustration 1 for sample format):
 
     1.  DATE OF ORDER: Enter the date the order is placed.
 
     2.  NAME AND ADDRESS OF SELLER:  Enter the complete name and
     address of the Seller.
 
     3.  FURNISH SUPPLIES OR SERVICES TO: Enter the Name,
     building and Room Number of the consignee.
 
     4.   SUPPLIES OR SERVICES:  Enter an unabbreviated
     description of each item.
 
     5.  QUANTITY:  Enter the number of units orderer of each
     item
 
     6.  UNIT PRICE: enter the price of the item per unit
     ordered.
 
     7.   AMOUNT: Enter the total price for each item.
 
     8.  TOTAL: Enter the total cost of the order.
 
     9.  PURPOSE AND ACCOUNTING DATA:  Enter the appropriate
     Common Account Number (CAN) and identify the
     Institute/Division requiring activity (e.g., NINCDS).
 
     10.  ORDERED BY: Enter the title and secure the signature of
     the Approving Official.
 
          within the B/I/D, and (c) have a bonafide need for the
          ordering authority.  The authority to place orders
          carried with it obligations to protect public funds and
          to insure that the best interests of the government are
          being served.
 
     3.   Form NIH 1167-2, Request for Delegation or Recision of
          Procurement Authority, is used to request a delegation
          of procurement authority.  Part I of the form should be
          completed and forwarded to the Programs and Analysis
          Staff, Building 31, Room 3C-39 or 496-5401.
 
     4.   Part II of form NIH 1167-2 will, if approved, be signed
          by the Chief of the Procurement Branch and returned to
          the requesting official.  Disapproved requests will be
          returned to the requester by memorandum explaining the
          reason for denial.
 
K.   Forms - The following forms are used in connection with
     decentralized ordering procedures:
 
     1.   Form NIH 421-1, "Telephone Charge Order," is an
          unnumbered order form.  TCO order numbers are issued to
          designated administrative officers through the
          automated document numbering system.  A TCO order
          number must be obtained by the authorized purchaser
          prior to placing an order.  These forms are not
          accountable and may be obtained through the NIH Central
          Stores.  Anyone having NIH-20 requisitioning authority,
          or the authority to use a NIH Central Stores charge
          plate, may secure them from those sources.
 
     2.   Form NIH 421-2, "Procurement Discrepancy in
          Decentralized Small Purchasing," is used by the
          Procurement Branch to alert approving officials of
          actions which appear to be in conflict with the
          provisions of this manual.  It is not available from
          NIH Central Stores.
 
     3.   Form NIH 421-3, "Cancellation/Amendment of Telephone
          Charge Order," may be obtained through the NIH Central
          Store supply.  As these are not accountable forms,
          anyone having NIH-20 authority or the authority to use
          a NIH charge plate may secure them from those sources.
 
     4.   SF-44, "Purchase Order-Invoice-Voucher," may be
          requisitioned from the NIH Central Store supply by
          approving officials.  The SF-44 is an accountable form
          and must be kept in a locked cabinet or safe.
          Transaction records, including any voided forms, are to
          be kept for three (3) years with the hard cover of the
          SF-44 book.
 
L.   Inquiries - Questions concerning these small purchasing
     methods and procedures should be directed to the Programs
     and Analysis Staff on 496-5321 or 496-5401
 
                Refer to Hardcopy Illustration 1
                Refer to Hardcopy Illustration 2