webrev: 09/2006           

CHAPTER III  [PDF]

BUSINESS AND FINANCE

A.    AUTHORIZATION  [PDF]

 

3-101 Accounts and Fund Depositories (PDF)

1. Each university may deposit its funds only in accounts authorized by the Board. These accounts must be in banks or other financial institutions which have been approved in advance by the Board of Regents as acceptable depositories for university funds.

3-102 Authorized Agents (PDF)

1. University officers designated by the president of the university, as certified to the Executive Director, are authorized to open accounts with approved depositories and to endorse in the name of the university for the purpose of deposit and collection in and with said banks, checks, drafts, notes and other like obligations belonging to or coming into the possession of the university. Endorsements for deposit and collection may be by the written or stamped endorsement of the university without designation of the party making the endorsement.

2. University officers designated by the president of the university, as certified to the Executive Director, are authorized to sign in the name of the university checks drawn upon university funds on deposit with depositories approved under Section 3-101 of these policies. The president of the university is authorized to establish procedures and dollar limitations for dual signature requirements for withdrawal of university funds from fund depositories and for appropriate use of facsimile signatures of authorized university officers.

3. University officers designated by the president of the university, as certified to the Executive Director, are authorized to:

1. Endorse for negotiation, negotiate and receive the proceeds of any negotiable instruments or orders for money payable to or belonging to or in the possession of the university, for accommodation (without recourse or obligation) or otherwise to identify, approve the endorsement of any payee or endorser on any negotiable instruments or orders for the payment of money and to endorse the same;

2. Sell, transfer and endorse for sale or for transfer any and all securities, registered bonds, stock certificates, interim participation and other certificates of said university, and to identify and/or guarantee signatures and endorsements thereon, or on bond and/or stock powers of attorney executed in connection therewith;

3. Withdraw, receive and receipt for and to withdraw upon trust receipt on the responsibility of, and at the risk of the university, and to exchange any and all collateral securities, or property pledged, assigned, transferred or otherwise held for its account, it being intended that such withdrawals, substitutions or exchanges may also be made by the bearer of any order or receipt so signed; 

4. Sign, execute and deliver applications and agreements for the purchase or sale of foreign exchange, letter of credit and traveler's checks, and to receive the receipt for and sign receipts and trust receipts therefore, and agreements with respect thereto containing such provisions as to him/her or them shall seem proper.

4. University officers designated by the president of the university, as certified to the Executive Director, are authorized, without the concurrence of any other officer to:

1. Identify, approve and/or guarantee the endorsement of any payee or endorser on any checks or drafts drawn by the university;

2. Waive presentment, demand, protest and/or notice of dishonor or protest;

3. Give instructions in regard to the handling or delivery of any negotiable or non﷓negotiable papers or documents involved in any of said transactions.

5. University officers designated by the president of the university, as certified to the Executive Director, are authorized to sign documents and transact other business on behalf of the university with the office of the state Treasurer and with the state Department of Administration.

3-103 Signing of Documents on Behalf of the Board (PDF)

1. University officers designated by the president of the university, as certified to the Executive Director, are authorized to execute contracts and other written instruments on behalf of the Board. In addition, the President of the University may delegate his/her authority to execute contracts and other written instruments to appropriate university officials without certification to the Executive Director in the following circumstances: (1) The value of the university's obligation under the contract or other written instrument is $10,000 or less; and (2) the delegation of authority is warranted to improve efficiency and effectiveness of university operations and does not unduly expose the Board or the university to financial loss.

2. Officers of the central staff approved by the Board of Regents are authorized to execute and deliver in behalf of the Board all instruments incidental, convenient or necessary to the transaction of business between said Board and the Department of Administration of the State of Arizona.

3. The president, secretary, or assistant secretary of the Board, or the secretary to said Board, is authorized to certify to depositories approved pursuant to Section 3-101 the following:

1. A copy of the relevant Board policies.

2. A copy of Board actions taken to implement the policies in Chapter III.

3. A copy of the names and signatures of Board or university officers or employees authorized to act in the premises.

B.    CONTRACTS, GRANTS AND PURCHASING   [PDF]

3-201 Contracts for Services or Materials (PDF)

In the negotiation of contracts for services or materials the universities shall conform to all applicable state and federal laws such as A.R.S. §38-511, Arizona Executive Order No. 75-5, and Federal Executive Order 11246. The Board may not enter into the internal affairs, such as labor and management controversies, of the other contracting party.

3-202 Contracts Involving Classified Material (PDF)

The Board may appoint a classified material management group at each institution. The classified material management group shall be responsible for the negotiation, execution, and administration of user agency contracts involving classified material, and each member of the classified material management group shall have an appropriate security clearance. At least one member of the Board shall be designated to obtain appropriate security clearance in order to review classified materials on behalf of the Board.

3-203 Research and Public Service Agreements (PDF)

1. A research or public service agreement of an initial amount less than $1,000,000 may be executed without Board approval provided the agreement does not require the expenditure or commitment of any institutional funds, personnel, or other resources in any way not included in the original budgeting of such resources whether it be through the use of appropriated funds or of local funds. Continuation of less than an additional $1,500,000 for previously executed agreements will not require Board approval.

2. New agreements in excess of $1,000,000 and continuation of existing agreements involving more than $1,500,000 shall be brought to the Board for approval.

3. Each university shall submit an annual report describing all ongoing research or public service agreements, including those agreements that did not require Board approval. These reports shall be submitted in a format approved by the Executive Director.

3-204 Intergovernmental Agreements (PDF)

1. Each university may enter into intergovernmental agreements, and renewals and modifications thereof, without seeking approval from the Board of each individual agreement in accordance with the following guidelines:

1. The agreement shall provide for the provision of services or for the joint exercise of powers consistent with the statutory framework authorizing intergovernmental agreements (A.R.S. §11-952);

2. The value of the contract does not exceed $1,000,000 for the term of the agreement or any renewal period.

3. Prior to execution, the agreement shall be submitted to university counsel, who shall determine whether the agreement is in proper form and is within the powers and authority of the Board; and

4. The agreement shall be executed by the president of the university or by the president's designee.

2. All agreements with another state agency or political subdivision of the State of Arizona which exceed the $1,000,000 threshold described above require approval of the Board prior to execution and shall be submitted to university counsel for approval as to form and compliance with statutory requirements.

3. Any intergovernmental agreement which provides for the transfer of real property shall be carried out in a manner consistent with ABOR Policy 7-203 (Purchase of Real Property), 7-204 (Sale of Real Property), and 7-205 (Exchanges of Real Property).

3-205 Purchase of Materials (PDF)

Repealed

3-206 Agreements With Agencies of Foreign Countries (PDF)

All agreements, however characterized, to which the Board or a university is a party and which involves a foreign country or an agency of a foreign country, or in which the university will be acting in a foreign country, must provide an assurance that participation by university personnel or students in any activities relating to the agreement shall not be denied to any individual on the basis of race, color, religion, national origin, age, non-disqualifying handicapping condition, veteran status, or sex. Each university shall establish procedures to monitor compliance with this requirement, which shall include an annual certification by the President that the nondiscrimination requirements have been satisfied.

New agreements in excess of $1,000,000 and continuation of existing contracts involving more than $1,500,000 shall be brought to the Board for approval.

3-207 Acceptance of Grants (PDF)

1. Gifts and grants may be accepted by a university without Board approval except that Board approval will be required if such gift requires the expenditure or commitment of any institutional funds, personnel, or other resources in any way not included in the original budgeting of such resources whether it be through the use of appropriated funds or of local funds.

2. The president, or the president's designee, may accept grants and enter into agreements pertaining thereto on behalf of the Board upon the concurrence of the president of the Board or the Executive Director, in those instances where a delay in securing approval of the Board might operate to the prejudice of such institution. Such agreements shall be presented to the Board at its next meeting for review and ratification.

3-208 Arbitration Provisions (PDF)

1. A university may include a provision providing for arbitration in a contract or agreement of the following types:

1. Purchase of goods and services;

2. Grants, research projects to be performed by a university unit or employee, intergovernmental agency agreements, and similar agreements wherein the university is not obligated to contribute or disburse any university or state funds.

2. Except as otherwise provided by law, a university shall make appropriate use of arbitration, mediation, or other alternative dispute resolution mechanisms to resolve contract disputes in a timely and efficient manner.

3-209 Purchasing Procedures (PDF)

Repealed

3-210 Standard Medical Agreement Form (PDF)

Repealed

C.    INVESTMENTS   [PDF]

3-301 University Investments (PDF)

1. It is the intent of the Arizona Board of Regents to provide flexibility for investment of university funds consistent with the scope of the Arizona State Treasurer’s investment policy for investment of university funds. ABOR used the Arizona State Treasurer’s authorizing statutes and investment policy as a guide for this policy.

2. Consistent with ABOR Policies 3-102 and 3-103, university officers designated by the president of the university, as certified to the Executive Director, shall be authorized and empowered, jointly or severally, for and on behalf of the university and/or the Arizona Board of Regents, a body corporate, to purchase, invest in, or otherwise acquire securities through commercial banks or through brokers who are members of the New York Stock Exchange and/or the National Association of Security Dealers, from funds in the accounts of the university and by checks drawn on such accounts, and to sell, possess, transfer, exchange or otherwise dispose of or turn to account of, or realize upon and generally deal in and with any and all forms of securities.

3. University officers and such other individuals designated by the president of each university as reported to the Board of Regents shall serve as the investment committee for that university. The investment committee shall advise those designated in section B in the exercise of their authority to purchase and sell securities and otherwise invest and reinvest university funds. Committee recommendations for investments and reinvestments will be reported to the president or president’s designee.

4. Each university shall make appropriate arrangements for the safekeeping of securities from a bank or other financial institution approved by the Board of Regents through an approved custodial or similar agreement. University officers designated by the president of the university and approved by the Board of Regents shall be authorized to deposit or withdraw securities from the custodian.

5. Each university may invest funds as follows:

   1. Gift and endowment funds normally received for scholarship and student loan purposes will be invested according to the conditions stipulated by the donor, but if no conditions are imposed, such funds may be invested under the direction of the investment committee of the university in such a manner as to obtain the most
      favorable rate of return and income stability commensurate with safety of principal.

   2. Except as provided in subsection E.1, university operating funds may be invested in the following instruments in addition to any other instruments as may be permitted by the State Treasurer’s investment policy for investment of university funds:

      1. Obligations issued or guaranteed by the United States or any of its agencies, sponsored agencies, corporations, sponsored corporations or instrumentalities.

         1. Repurchase agreements and tri-party repurchase agreements, collateralized at no less than 102 percent by securities or 100 percent by cash, purchased from securities dealers that make markets in those securities listed in subsection E.2.a. Repurchase agreements and tri-party repurchase agreements collateralized by mortgage-backed securities shall be collateralized at no less than 105 percent. In all cases, collateral must be delivered to the university’s custody institution, or held in an account for the benefit of the university in an institution meeting the requirements of an eligible depository. In the case of tri-party repurchase agreements, the eligible depository may price and verify collateral but is required to provide a report of pricing and adequacy of collateral to the university within 24 hours of settlement. The university will measure the volatility and make a professional judgment on appropriateness of the collateral.

      2. Bonds or other evidences of indebtedness of the State of Arizona or any of its counties or incorporated cities, towns or duly organized school districts which carry as a minimum a Baa (Investment Grade) or better rating of Moody’s Investors Service or a BBB (Investment Grade) or better rating of Standard and Poor’s Rating Service or Fitch Ratings, or their successors.

      3. Arizona State Treasurer’s warrant notes issued pursuant to A.R.S. §35-185.01 or registered warrants of a county issued pursuant to A.R.S. §11-605, if the yield is equal to or greater than yields on eligible investment instruments of comparable maturities.

      4. Arizona State Transportation Board Funding Obligations, subject to A.R.S. §35-313(D), delivered pursuant to A.R.S. §28-7678.

      5. Commercial paper rated by at least two nationally recognized statistical rating organizations (NRSO’s). The three current NRSO’s include Standard & Poor’s, Moody’s, and Fitch. The ratings assigned by at least two NRSO’s must be of the two highest rating categories for short-term obligations. All commercial paper must be issued by entities organized and doing business in the United States.

      6. Bills of exchange or time drafts known as bankers acceptances which are issued by commercial banks chartered and doing business in the united States with ratings as outlined in subsection E.2.e, and/or long-term debt rating of Baa (Investment Grade) or better by Moody’s Investors Service or BBB (Investment Grade) or better rating of Standard and Poor’s Reporting Service or Fitch Ratings, or their successors.

      7. Negotiable certificates of deposit issued by a nationally or state chartered bank or savings and loan association which carry as a minimum a Baa (investment Grade) or better rating of Moody’s Investors Service or a BBB (Investment Grade) or better rating of Standard and Poor’s Rating Service or Fitch Ratings, or their successors.

      8. Bonds, debentures and notes issued by corporations organized and doing business in the United States which carry as a minimum a Baa (Investment Grade) or better rating of Moody’s Investors Service or a BBB (Investment Grade) or better rating of Standard and Poor’s Rating Service or their successors.

      9. Securities of or any other interests in any open-end management type investment company or investment trust registered under the Investment Company Act of 1940 (54 Stat. 789; 15 United States Code §§80a-1 through 80a-64), as amended, if all of the following are stated to be the investment company’s policy:

         1. The investment company or investment trust takes delivery of the collateral for any repurchase agreement either directly or through an authorized custodian.

         2. The investment policy of the investment company or investment trust includes seeking to maintain a net asset value of one dollar.

      10. In the event a university elects to invest in an instrument not specifically identified in section 2.a-i, but as allowed under section 2 because it is permitted under the State Treasurer’s investment policy for investment of university funds, the university shall report such an election prior to making such investment to the Board’s Executive Director, who will have delegated authority to authorize the university to proceed with such an investment.

6. The final maturity of any fixed-rate security or of any variable-rate security shall not exceed five years from the settlement date of the purchase, except as provided in section E.1.

7. Each university may contract to loan securities to the financial or dealer community, through its securities custodian, if the borrower transfers collateral to the university or its custodian in the form of cash or securities specified in subsection E.2. Collateral posted in the form of cash shall be in an amount equal to at least 100 percent of the market value of the loaned securities as agreed. Collateral posted in the form of securities shall be in an amount of no more than 110 per cent of the market value of the loaned securities as established from time to time by the university. The loaned securities shall be valued as to market value daily, and, if necessary, the borrower shall post additional collateral, as agreed, to ensure that the required margin is maintained. The university may collect from the borrower all dividends, interest, premiums, rights and other distributions to which the lender of securities would otherwise be entitled. The university may terminate the contract on not less than five business days’ notice, as agreed, and the borrower may terminate the contract on not less than two business days’ notice, as agreed.

8. It is the intent of this policy to diversify each university’s investment portfolio to minimize losses due to various circumstances. The circumstances include, but are not limited to: issuer defaults, market price changes, non-earning assets, technical complications leading to temporary lack of liquidity, risks resulting from an over-concentration of assets in a specific maturity, a specific issuer, a specific geographical distribution, or a specific class of securities. No more than five percent of each university’s total investment portfolio (defined as five percent of the prior month’s ending amortized book value on the date purchased), or five percent of the issues outstanding, whichever is less, shall be invested in securities issued by a single corporation and its subsidiaries/affiliates. Securities issued by the federal government or its agencies, sponsored agencies, corporations, sponsored corporations or instrumentalities are exempted from this provision.

9. Each university is specifically prohibited from investing operating funds in the following instruments or in similar types of instruments:

   1. Reverse repurchase agreements (unless otherwise authorized under a securities lending agreement with a second party)

   2. Futures, contractual swaps, options

   3. Inverse floaters

   4. Interest-only securities

   5. Forward contracts

   6. Interest-bearing securities that have a possibility of not accruing current income

   7. Closed-end management type companies

   8. Securities whose yield/market value is based on currency, commodity or non-interest indices

   9. Bearer-form securities

10. Each university shall submit annually to the Board central office a report on the investment of its operating and endowment funds. The Board’s Strategic Planning, Budget and Finance Committee will adopt an appropriate reporting mechanism, including a schedule.

D.    BUDGETS   [PDF]

3-401 Legislative Budget Request and Detailed State Operating Budget Request (PDF)

1. Each university will prepare a legislative budget request for Board review and approval before submission to the Governor and Legislature. The universities will develop these requests in accordance with guidelines developed cooperatively by the Central Office and the universities, and submit them on a schedule adopted by the Board.

2. Following legislative appropriation and in support of the all-funds budget approved by the Board, each university will prepare a detailed state operating budget, and make a copy available to the Central Office for informational purposes.

3-402 Detailed Local Fund Operating Budget (PDF)

In support of the all-funds budget approved by the Board, each university will prepare a detailed local fund operating budget, and make a copy available to the Central Office for informational purposes.

3-403 All-Funds Operating Budget (PDF)

No later than September 1st of each year, each university will submit to the central office an all-funds budget allocation for consideration by the Board. These allocations should include estimated expenditures from the state general fund, unrestricted local funds, and restricted gifts, grants and contracts, and outline the estimated expenditures within at least the following programs:

Each program allocation will:

1. Include a narrative that demonstrates linkage to the Board-approved strategic plan;

2. Identify all major program changes, whether funded from new revenues or from a reallocation of existing revenue; and

3. Include aggregate estimates of tuition and fee revenues, indirect cost recoveries, investment income, auxiliary enterprises and gifts, grants and contracts, and any other revenues or income.

3-404 Reports Included in the All-Funds Operating Budget (PDF)

Each all-funds budget proposal will include the following reports:

1. The June 30th balance in all funds;

2. Actual interest rates and actual interest income during the prior July 1 - June 30 period, and an income projection for the next 12 month period.

3. Actual indirect cost recoveries received during the prior July 1 - June 30 period, and an income projection from this source for the next 12 month period; and

4. Actual income from gifts, grants and contracts during the prior July 1 - June 30 period, presented by program category and funding source, and income projections from these funding sources for the next 12 month period.

3-405 Expenditure Authority Transfers Between Programs (PDF)

The president of each university, or designee, is authorized to transfer expenditure authority between programs within the state operating budget; unrestricted local funds budget; and restricted gifts, grants and contracts budget, without prior Board approval, subject to the following limitations.

1. State operating budget, individual transfers of more than $1.0 million require Board approval.

2. Unrestricted local funds, transfers to fund a new activity that costs more than $250,000 require Board approval.

3. Restricted gifts, grants and contracts, transfers to accommodate changes in priority or volume of business in previously approved activities are subject to the provisions of Section 3-203 of this manual.

4. Transfers to the plant fund are subject to the provisions of Section 3-409 of this manual.

5. Increases in aggregate expenditure authority by program shall be reported consistent with Section 3-407 of this manual.

3-406 Contingency Funds (PDF)

A university president may establish a contingency fund within the all-funds budget to cover emergencies and other unforeseen items necessary for the continued operation of the institution.

3-407 Budget Updates (PDF)

No later than the Resources Committee meetings of the Board in November and March, or as close thereto as possible, each university shall provide the Central Office with an all-funds budget update. These updates should reflect any changes in revenue and expenditures and projected balance for the fiscal year.

3-408 Account Deficits (PDF)

If a university incurs or projects a year end deficit of $100,000 or more in any account, it will submit a management plan to eliminate the deficit for Resources Committee review. A financial update of the management plan will be provided to the Resources Committee with the November and March budget updates.

3-409 Planning for Plant Fund Budgets (PDF)

1. The following policies in this section are for budget planning purposes. Once a project is ready to go to bid, a university will comply with the provisions of Chapter VII of the Policy Manual.

2. Each university will prepare a master list of all estimated revenues to be placed in the plant fund for the next fiscal year. This list should include appropriations, grants, transfers and other revenues.

3. Each university will prepare a master list of all plant fund projects, estimated allocations and expenditures for each project for the fiscal year. All projects of $250,000 or more will be listed individually but smaller projects may be aggregated to avoid undue detail.

3-410 Annual Financial Reports (PDF)

Each November, or as close thereto as possible, each university will provide the Resources Committee of the Board with the following reports for review.

1. The university's audited annual financial report.

2. A financial ratio analysis prepared from the audited financial reports in a form developed cooperatively by the Central Office and the universities. This analysis should address a ten-year record, including the current year, with data for the nine prior years drawn from the audited annual financial reports.

3-411 Annual Report on Debt Capacity (PDF)

Prior to the Board's meeting in September, each university will provide the Board with an annual report on its debt capacity. The annual report on debt capacity will be submitted with the annual capital improvement plan (see Chapter VII).

3-412 Administration of Technology and Research Initiative Fund (PDF)

1. Authority

As authorized by Proposition 301 approved by the voters in November 2000, the Board shall establish and administer a technology and research initiative fund (TRIF), beginning July 1, 2001. The TRIF will consist of sales tax revenues generated through Proposition 301 and other private or public sources of funding which are received by the Board for purposes which are consistent with the proposed uses described herein.

2. Funding Criteria

The TRIF will be used to support projects and initiatives that meet one or more of the following criteria:

1. Promote university research, development and technology transfer related to the knowledge based global economy;

2. Expand access to baccalaureate or post-baccalaureate education for time-bound and place-bound students;

3. Implement final recommendations from the Governor's Task Force on Higher Education and/or the Arizona Partnership for the New Economy.

4. Develop programs that will prepare students to contribute in high technology industries located in Arizona.

3. Calendar and Guidelines

The Board shall establish an annual calendar for the allocation of Proposition 301 funding, including guidelines for the submission and evaluation of proposals, and final decisions by the Board. The calendar will incorporate a process to receive and consider input from the Arizona Partnership for the New Economy (APNE) or a successor agency as may be designated by the Governor.

4. Formats for Submission of Proposals

Funding requests shall be submitted by the university Presidents, or prepared by the Central Office on behalf of the Board, in a format to be approved by the Executive Director, to include the following elements:

1. A description of the proposed need, purpose and goals for each proposed project or activity, an explanation as to the ways in which the project promotes the purposes of the legislation, and/or an explanation of the relationship of the proposed project or activity to the foundation or clusters which are part of the state's overall economic development program;

2. The requested duration of the proposed project or activity;

3. Proposed detailed performance measures, desired outcomes, and proposed methodology for evaluating progress in attaining the desired outcomes; and

4. A detailed budget for each proposed project or activity, including the identification of funds which are intended to be either continuing, multi-year, or one time only.

5. Special Factors

The Board shall take into account several additional factors in determining its allocations from this fund:

1. Priority shall be given to proposals that involve collaboration between and among the universities and/or collaboration with private industry or public sector agencies.

2. The Board may authorize awards for an annual or multi-year basis, but in no event will the Board make an award on a multi-year basis without incorporating specific requirements regarding periodic review and assessment or progress in implementing the proposed project or activity and in attaining the desired outcomes.

3. Funding may be used to pay salaries only for persons directly involved in projects or activities funded under this program that would otherwise not be funded through general fund appropriations.

4. The Board may allocate up to 20% of annual funding for capital projects relating to new economy initiatives, including the payment of debt service; capital projects must be clearly identified with each university's submission of proposals.

5. The Board will honor the legislative intent as described in Proposition 301 that a portion of the revenues in the fund shall be allocated on an annual basis to pay Certificates of Participation costs for lease-purchase of buildings and associated infrastructure at ASU East and West campuses.

E.    BONDS   [PDF]

3-501 Board Action Required (PDF)

Matters relating to revenue bonds, including issuance, sale, appointment of bond counsel, appointment of financial consultant, appointment of trustee, and all other incidents connected with revenue bonds shall be presented for Board action.

F.    GENERAL PROVISIONS   [PDF]

3-601 Miscellaneous Receipts (PDF)

1. The proceeds derived from the sale of products of the University of Arizona experiment station farms may be applied to Hatch Sales for the use of farm operations.

2. Vending Machine Revenue

1. An amount of not more than fifty percent of the gross proceeds of vending machine operations at each institution may be distributed by the institution to the gifts and endowment funds of the institution.

2. Nothing in this section shall apply to the use or distribution of revenues derived from vending machines owned and operated by the student union of an institution where the income from such vending machines is deposited directly to the student union account.

3. Receipts from University Physicians, Inc.

The funds received by the dean of the College of Medicine under the provisions of the Medical Service Plan of 1985 and any amendments thereto, shall be subject to the budgeting and accounting procedures established by the university.

3-602 Institutional Equipment (PDF)

1. Each institution shall establish procedures to be approved by the Board for the disposal of excess or obsolete equipment.

2. Each institution may authorize the loan of institutional equipment on occasions when the interests of the institution will be best served by such action.

3-603 Guidelines for Out-of-State Travel (PDF)

1. Approval

All requests for out﷓of﷓state travel by university employees are subject to approval of the president of the university or the president's designee. Persons traveling out of state must submit travel orders/requests sufficiently in advance of the departure date to allow for the orderly review of the request.

2. Means of Transportation

1. Commercial Air Carrier - approval will normally be granted for air coach/economy fares only. If other than coach/economy travel is requested, a written statement of justification must accompany the travel order.

2. Private Automobile - approval of private automobile use out of state will be granted subject to the following conditions:

1. Mileage reimbursement will not exceed the lesser of the air coach fare for the trip or the prevailing mileage reimbursement allowance.

2. Per diem will not be allowed for more than the amount which would have been allowed had the traveler used air transportation and work days away not covered by per diem to be counted as annual leave unless specifically approved by the president or the president's designee.

3. Proof of insurance coverage consistent with State of Arizona requirements.

3. Rented or Chartered Aircraft - chartered aircraft may be used when other means of transportation are not economical or convenient. Written justification must accompany the travel order.

4. Rented Automobiles - Not State-Owned - rented or leased automobiles may be used for ground transportation at the point of destination when it is in the best interests of the state to do so. Leased vehicles should not be used when taxis, buses and other alternatives are more economical.

5. State-Owned Vehicles - state-owned vehicles may be used for out-of-state travel when no other means of transportation is available or when such use is in the best interest of the state. Such requests must be made in writing and require the approval of the president or the president's designee.

3. Representation/Attendance

Out-of-State - representation by employees of a university at a convention or meeting outside the state is to be held to a minimum, usually one (1) person. Attendance by more than two (2) persons from a single academic or administrative unit or department, will be justified in writing and considered on a case-by-case basis.

4. Out-of-state travel by university employees is subject to whatever additional policies are extant at each institution, as well as applicable state statutes and regulations.

3-604 Reimbursement to Overseas Personnel for Personal Loss (PDF)

Certain programs in the Arizona University System may require some employees to spend prolonged periods of time in foreign countries. Conditions may arise that require university personnel to evacuate a country under circumstances that make it impossible for the employees to take personal property with them. These employees may submit claims for reimbursement for personal property abandoned in a foreign country provided the following criteria are met:

1. The employee must be in the country on assigned official business of the university.

2. Departure from the country must be as a result of a United States Department of State ordered evacuation of U.S. citizens.

3. Claims for reimbursement must be supported by shipping documents showing shipment of the items to the foreign country. Claims for items purchased in the country must be supported by proof of purchase.

4. No reimbursement will be made for items covered by personal insurance.

5. Reimbursement will be made in accordance with the scheduled amounts provided for Agency for International Development employees in the A.I.D. policy manual.

6. Reimbursement must be made from funds available under the contract or grant which required the employee's presence in the foreign country and in no case will be made from general university funds.

3-605 Payroll Deductions for Charitable Contributions (PDF)

1. Payroll deductions may be authorized for the purpose of contributing to a university fund raising campaign, or to a club for faculty or staff, or both, if the payroll deduction program is recognized by the university president and authorized by the Board of Regents.

2. Each university president shall approve payroll deductions for dues in any recognized association comprised of at least twenty-five per cent of the faculty, or of the staff employees of the university.

3. Each university president shall approve payroll deductions for contributions made to a charitable organization provided that a fund drive by such organization shall be applicable to all state agencies and further provided that no individual may have more than one payroll deduction for charitable purposes to be in effect at the same time. Contributions under 3-605 A. above are not contributions for charitable purposes under this paragraph.

4. Each university shall promulgate written procedures for implementing paragraphs A, B and C above. Said procedures shall provide for the approval of any fund raising campaign for the university or contributions to a club for faculty or staff by the president and the Board of Regents prior to implementing the payroll deduction program.

3-606 Allocation of Land Fund Income (PDF)

All income derived from those land funds specified in A.R.S. §15-1662 and appropriated to the Board for each fiscal year, shall be allocated among the universities as follows:

1. Universities Land Fund

Beginning with the 1998-99 fiscal year, the universities land fund shall be known as the eminent scholars matching grant fund as that term is defined in A.R.S. §15-1663B. The eminent scholars matching grant fund shall be allocated proportionately among the three universities based upon the total student credit hours in the Fall of the previous fiscal year, from the university's fall 21-day enrollment report.

2. Normal School Land Fund

The income shall be allocated equally among the three universities.

3. Agricultural and Mechanical Colleges Land Fund

1. One-half of the income shall be allocated to the University of Arizona.

2. One-half of the income shall be allocated proportionately among the three universities based upon the student credit hours in the fall of the previous fiscal year generated in engineering programs at each university.

4. School of Mines Land Fund

The income shall be allocated solely to the University of Arizona.

5. Military Institutes Land Fund

The income shall be allocated proportionately among the three universities based upon the student credit hours in the fall of the previous fiscal year generated in ROTC or military science programs at each university.

3-607 Lease-Purchase Acquisition (PDF)

Acquisitions of personal property in the amount of $1 million and greater by means of a lease-purchase shall be submitted through the Resources Committee for approval by the Board. Minimum information required is:

1. Description and purpose of the acquisition.

2. The total cost of the acquisition.

3. Names of the other parties.

4. Proposed funds source.

5. Interest rate.

6. Period of lease.

G.   INTERNAL AUDITS   [PDF]

3-700 Audit Committee Charter (PDF)

1. Purpose

To assist the Board of Regents in fulfilling its oversight of the university system’s internal control structure, accounting and financial reporting practices.

2. Organization

The Audit Committee will consist of the President of the Board of Regents, the past President of the Board of Regents, the chair of the Resources Committee, and the voting Student Regent. One member of the committee will be appointed as chair.

3. Policy

The Audit Committee will assist the Board of Regents in discharging its system-wide oversight and monitoring responsibilities by:

1. Promoting a coordinated, efficient, and effective audit function.

2. Promoting an effective and continuously improving system of internal control for achieving the university system’s goals and objectives.

3. Promoting coordination in the Central Office auditors’ and the University system auditors’ risk assessments to plan audit coverage meeting local and system-wide needs.

4. Serving as a voice on the Board of Regents and other standing Board committees by relaying an audit perspective when related issues are brought before Board committees.

5. Providing a direct channel of communication to the Board of Regents for the State’s Auditor General and University Presidents regarding audit matters.

4. Meetings

The Audit Committee will meet no fewer than four times per year and more often as needed.

5. Responsibilities

Responsibilities of the Audit Committee will include the following:

1. Review and recommend possible changes or additions to the existing Board policy framework regarding external and internal audits of the University System functions and activities.

2. Facilitate the coordination of the Central Office, Universities’ and other audit activities to assure adequacy of coverage, avoidance of redundant audit work, and the effective use of audit resources.

3. Receive and act on the following from Central Office Audit Services:

1. Periodically review and revise the department’s charter as needed.

2. Approve the annual plan for audits and related services and monitor progress quarterly.

3. Review and accept audit reports when issued.

4. Review audit finding status reports quarterly.

4. Receive and review the following from each university president:

1. University audit plans (annually),

2. University audit reports (when issued), and

3. University audit finding status reports (quarterly)

5. Provide feedback to the Executive Director and University Presidents on the quality and adequacy of audit coverage provided.

6. Discuss with the Executive Director and with University Presidents any limits on auditors’ objectivity and independence, any difficulties encountered, or scope restrictions. Ensure auditors have full, free and unrestricted access to information.

7. Meet privately with the chief auditors of the Central Office and Universities at least annually to discuss any matters that the Committee or auditors believe should be discussed privately.

8. Review State of Arizona Office of the Auditor General reports which will include the annual audits of the universities’ financial statements.

9. Resolve disagreements about audit recommendations between internal or external auditors and management.

10. Oversee adherence to ethical standards within the University System by reviewing and refining Board policies related to:

1. compliance with laws and regulations,

2. ethics,

3. conflicts of interest,

4. disclosures of substantial interest,

5. the investigation of misconduct and fraud.

11. Require immediate notification be made to the Audit Committee by the Executive Director and the University Presidents and review actions taken or being taken in their respective organizations, relative to:

1. significant frauds,

2. significant violations of laws or regulations,

3. other significant issues raised by university or Central Office staff auditors, state or federal auditors, or any other audit agency.

12. Report at least annually to the Board of Regents on the Audit Committee’s activities.

3-701 Authority and Responsibility - Internal Audits (PDF)

1. Nature

The Arizona Board of Regents audit staff performs an independent appraisal activity which reviews operations as a service to the Board of Regents and university administrators. Internal auditing is a managerial control which functions by measuring and evaluating the effectiveness of other controls.

2. Objective and Scope

The objective of internal auditing is to assist the Arizona Board of Regents and university administrators in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations and pertinent comments concerning the activities reviewed. The attainment of this overall objective involves such activities as:

1. Reviewing and appraising the soundness, adequacy, and application of accounting, financial, and other operating controls, and promoting effective control at reasonable cost.

2. Ascertaining the extent of compliance with established policies, plans and procedures.

3. Ascertaining the extent to which assets are accounted for and safeguarded from losses of all kinds.

4. Ascertaining the reliability of management data developed within the organization.

5. Conducting special examinations and reviews at the request of the Arizona Board of Regents and university administrators.

6. Recommending operating improvements.

3. Authority

The internal audit staff is authorized to conduct a comprehensive program of internal auditing. Authorization is granted for internal auditors’ unrestricted access to the central office and university functions, records (irrespective of medium), property and personnel relevant to a review.

4. Responsibility

The internal audit staff has a responsibility to report to the Arizona Board of Regents and university administrators on the areas examined. The information furnished to the Board and to university administrators may differ in format and detail, depending upon the requirements and requests of university administration and the Arizona Board of Regents. In meeting these responsibilities, the internal audit staff will develop and execute a comprehensive audit program and comply with applicable professional auditing standards.

The Assistant Executive Director for audit services reports to the Executive Director and Deputy Executive Director regarding day-to-day activities. Additionally, he/she attend regularly scheduled audit committee meetings and presents the audit services annual audit plan for approval and audit reports for acceptance.

The Assistant Executive Director for audit services shall confer with the Audit Committee of the Board of Regents at least annually, outside the presence of central office and university officials, on any subject germane to internal audit’s area of responsibility. In addition, if the circumstances ever warrant such action, the Assistant Executive Director for audit services may communicate directly with the Chair of the Audit Committee.

In performing their functions, the internal audit staff has no direct responsibility for, or authority over, any of the activities reviewed.

3-702 Audit Findings or Recommendations (PDF)

Repealed
  

H.    UNIVERSITY PROCUREMENT CODE   [PDF]

3-801 General Provisions (PDF)

1. Applicability

1. This Article H (University Procurement Code) shall consist of rules prescribing procurement policies and procedures for the Arizona Board of Regents and the institutions under the Board's jurisdiction in accordance with the requirements of A.R.S.§41‑2-501D and E.  Such rules shall be known as the "University Procurement Code."

2. This Code shall apply only to procurements initiated after the effective date of this Article unless the parties agree to its application to procurements initiated before the effective date.

3. Except as provided in ABOR Policy 3-801A. 4. AND 5 (General Provisions, Applicability) below, this Code shall apply to every expenditure of public monies, including federal assistance monies (subject to requirements of federal law as referred to in ABOR Policy 3‑808H (Intergovernmental Procurement)), by the Board or any institution under its jurisdiction.  This Code also applies to the disposal of university materials.

4. This Code does not apply to the following:

1. To either grants or contracts between the Board and either other state governmental units or other governments except as provided in ABOR Policy 3‑808 (Intergovernmental Procurement).

2. To contracts for professional witnesses if the purpose of such contracts is to provide for professional services or testimony relating to an existing or probable judicial proceeding in which the Board or one of its institutions is or may become a party or to a contract for special investigative services for law enforcement purposes.

3. To agreements negotiated by legal counsel representing the Board or a university in settlement of litigation or threatened litigation.

4. To internal cooperative agreements or consortium agreements existing solely between and among the Board and/or any institution under the jurisdiction of the Board.

5. To items purchased by a university for resale.

5. Nothing in this Code shall prevent the Board or its institutions from complying with the terms and conditions of any grant, gift, bequest or cooperative agreement.

2. Written Determinations

1. Written determinations required by this Code shall be filed and retained in the appropriate official records file maintained by each university relative to the solicitation or contract to which the determination refers.

2. Each written determination shall specify the reasons for the determination made.

3. Definitions

In this Code:

1. “Architect Services" means those professional architect services that are within the scope of architectural practice as provided in A.R.S., Title 32, Chapter 1.

2. "Board" means the Arizona Board of Regents.

3. "Business" means any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture, limited liability company or any other private legal entity.

4. "Change Order" means a written order signed by a procurement officer which directs the contractor to make changes that the changes clause of the contract authorizes the procurement officer to order.

5. "Code" means the University Procurement Code.

6. "Construction":

1. means the process of building, altering, repairing, improving, demolishing or site preparation for any public structure or building, or other public improvements of any kind to any public real property.

2. does not include:

(1) the routine operation, routine repair or routine maintenance of existing facilities, structures, buildings or real property.

(2) the investigation, characterization, restoration or remediation due to an environmental issue of existing facilities, structures, buildings or real property.

7. “Construction-Manager-at-Risk" means a project delivery method in which:

1. There is a separate contract for design services and a separate contract for construction services.

2. The contract for construction services may be entered into at the same time as the contract for design services or at a later time.

3. Design and construction of the project may be in sequential phases or concurrent phases.

4. Finance services, maintenance services, operations services, preconstruction services and other related services may be included.

8. “Construction Services" means either of the following for construction-manager-at-risk, design-build and job-order-contracting project delivery methods:

1. Construction, excluding services, through the construction-manager-at-risk or job-order-contracting project delivery methods.

2. A combination of construction and, as elected by the university, one or more related services, such as finance services, maintenance services, operations services, design services and preconstruction services, as those services are authorized in the definitions of construction-manager-at-risk, design-build or job-order-contracting in this section.

9. "Contract" means all types of agreements entered into by the Board, regardless of what they may be called, for the procurement of materials, services, construction or construction services, or the disposal of materials.

10. "Contract Modification" means any written alteration in the terms and conditions of any contract accomplished by mutual action of the parties to the contract.

11. "Contractor" means any person who has a contract with the Board.

12. "Counsel” means Counsel to the Arizona Board of Regents.

13. "Data" means documented information, regardless of form or characteristic.

14. "Days" means calendar days as computed pursuant to A.R.S. §1‑243.

15. “Design-Bid-Build" means a project delivery method in which:

1. There is a sequential award of two separate contracts.

2. The first contract is for design services.

3. The second contract is for construction.

4. Design and construction of the project are in sequential phases.

5. Finance services, maintenance services and operations services are not included.

16. “Design-Build" means a project delivery method in which:

1. There is a single contract for design services and construction services.

2. Design and construction of the project may be in sequential phases or concurrent phases.

3. Finance services, maintenance services, operations services, design services, preconstruction services and other related services may be included.

17. "Design Consultant" means a person providing the services of an architect, engineer, land surveyor, assayer, geologist, interior design consultant, and/or landscape architect within the scope of the practice of those respective professional services but does not include special or consulting services not required for the design of the project.

18. “Design Requirements":

1. means at a minimum the university’s written description of the project or service to be procured, including:

(1) The required features, functions, characteristics, qualities and properties, including, when applicable, programming, planning, and site and building development guidelines.

(2) The anticipated schedule, including start, duration and completion.

(3) The estimated budgets applicable to the specific procurement for design and construction and, if applicable, for operation and maintenance.

2. may include:

(1) Drawings and other documents illustrating the scale and relationship of the features, functions and characteristics of the project, which shall all be prepared by an architect or engineer, as appropriate, who is registered pursuant to A.R.S. §32-121.

(2) Additional design information or documents that the university elects to include.

19. “Design Services" means architect services, engineer services or landscape architect services.

20. "Designee" means a duly authorized representative of a university president.

21. "Employee" means an individual drawing a salary or wage from a university or from the Board, whether elected or not, and any noncompensated individual performing personal services for any university or the Board.

22. “Engineer Services" means those professional engineer services that are within the scope of engineering practice as provided in A.R.S., Title 32, Chapter 1.

23. “Finance Services" means financing for a construction services project.

24. "Grant" means the furnishing by the State, the Board or an institution under the jurisdiction of the Board of assistance, whether financial or otherwise, to any person to support a program authorized by law.  Grant does not include an agreement whose primary purpose is to secure a specific end product, whether in the form of materials, services or construction.  A contract resulting from such an agreement is not a grant but a procurement contract.

25. “Job-Order-Contracting"

1. The contract is a requirements contract for indefinite quantities of construction.

2. The construction to be performed is specified in job orders issued during the contract.

3. Finance services, maintenance services, operations services, preconstruction services, design services and other related services may be included.

26. “Landscape Architect Services" means those professional landscape architect services that are within the scope of landscape architectural practice as provided in A.R.S., Title 32, Chapter 1.

27. “Maintenance Services" means routine maintenance, repair and replacement of existing facilities, structures, buildings or real property.

28. "Materials"

1. means all property, including equipment, supplies, printing, insurance and leases of property.

2. does not include land or a permanent interest in land or real property.

29. “Operations Services" means routine operation of existing facilities, structures, buildings or real property.

30. "Person" means any business, individual, union, committee, club, other organization or group of individuals.

31. “Preconstruction Services" means advice during the design phase.

32. "President" or "university president" means the president of a university or the executive director of the central office of the Board.

33. "Procurement":

1. means buying, purchasing, renting, leasing or otherwise acquiring any materials, services, construction or construction services.

2. includes all functions that pertain to obtaining of any materials, services, construction, or construction services, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration.

34. "Procurement officer" means a university's procurement officer as designated by its president.  For any university, the procurement officer may differ depending upon the type of procurement.

35. "Professional Design Services" means the services of a design consultant or a professional programmer.

36. “Professional Services" means architect services, engineer services, landscape architect services, assayer services, geologist services and land surveying services and any combination of those services.

37. "Responsible bidder or offeror" means a person who has the capability, including necessary experience, to perform the contract requirements; who has the integrity and reliability which will ensure good faith performance and appropriate quality of the materials, services, construction or construction services, to be provided; and who is in compliance with any and all licensing requirements of the State of Arizona.

38. "Responsive bidder or offeror" means a person who submits a bid which conforms in all material respects to the invitation for bids, or request for proposals or request for qualifications.

39. "Services"

1. means the furnishing of labor, time or effort by a contractor which does not involve the delivery of a specific end product other than required reports and performance.

2. does not include employment agreements or collective bargaining agreements.

40. “Small business” means a concern, including its affiliates, which is independently owned and operated and which either (a) employs one-hundred full-time employees or fewer, or (b) had gross annual receipts of four million dollars or less  in its last fiscal year.

41. “Specific single project” means one or more facilities at a single location, at a common location or, if for a single purpose, at multiple locations.

42. "State governmental unit" means any department, commission, council, board, bureau, committee, institution, agency, government corporation or other establishment or official of the executive branch or corporation commission of this State except the Board and the institutions under its jurisdiction.

43. “Subcontractor" means a person who contracts to perform work or render service to a contractor or to another subcontractor as part of a contract with a university.

44. "University" means an institution governed by and under the jurisdiction of the Board.  The term also refers to the Central Office staff of the Arizona Board of Regents to the extent that the Central Office is directly involved in procurement activities on behalf of the Board or the universities.

4. Miscellaneous Provisions

1. The term "may" denotes the permissive.  The term "shall" denotes the imperative.

2. To the extent that the provisions of this Code are inconsistent with or conflict with other policies of the Board, the provisions of this Code shall control.

3. Unless displaced by the particular provisions of this Code, the principles of law and equity, including the Uniform Commercial Code of this state, the common law of contracts as applied in this state and law relative to agency, fraud, misrepresentation, duress, coercion, and mistake supplement the provisions of this Code.

4. A university president may designate an individual or individuals to act on behalf of the procurement officer in the absence or unavailability of such officer.

3‑802  Procurement Authority (PDF)

1. Authority of Procurement Officer

1. The procurement officer at each university functions under the direction of the university president or the president's designee and has the authority to commit university funds for the procurement of materials, services, construction and construction services on behalf of the university and the Arizona Board of Regents.

2. The procurement officer at each university shall promulgate written procedures, consistent with this Code and other Board policies, governing the procurement and management of materials, services, construction and construction services to be procured by the university and the disposal of materials.  Such procedures are subject to review and/or modification by the Board at its discretion.

3. Notwithstanding ABOR Policy 3-802A. 1. and 2. (Procurement Authority, Authority of Procurement Officer), the authority of the procurement officer is subject to such limitations as may exist in other Board policies.

4. The procurement officer at each university has the authority to determine that specifications are appropriate for the intended purpose.

2. Authority to Pay for Services

1. Services having an aggregate cost of $50,000 or greater procured under this Code, including services described in ABOR Policy 3‑803.E (Bidding and Source Selection Procedures, Competitive Selection Process for Clergy, Certified Public Accountants, Financial Advisors and Consultants, Physicians, Dentists and Legal Counsel), shall not be made unless pursuant to a fully approved written contract.

2. Payment for any services having an aggregate cost less than $50,000 shall be made consistent with established university procurement policies.

3. Impact of Rules Promulgated under Code

1. Except by mutual consent of the parties, no rules promulgated by the Board under this Code may change any commitment, right or obligation of the Board or a university or of a contractor under contract in existence on the effective date of the rule.

2. Except by mutual consent of the parties, no procedure promulgated by any procurement officer pursuant to ABOR Policy 3‑802A.2. (Procurement Authority, Authority of Procurement Officer) may change any commitment, right or obligation of the Board or a university or of a contractor under a contract in existence on the effective date of the procedure.

3‑803  Bidding and Source Selection Procedures (PDF)

1. Definitions

In ABOR policies 3‑803 (Bidding and Source Selection Procedures and 3-804 (Professional Services and Construction Services):

1. "Bidder prequalification" means determining, in accordance with procedures adopted by a procurement officer consistent with this Code, that a prospective bidder or offeror satisfies the criteria established for being included on a university bidder's list.

2. "Bid sample" means a sample to be furnished by bidder to show the characteristics of the item offered in the bid.

3. "Cost‑reimbursement contract" means a contract under which a contractor is reimbursed for costs which are reasonable, allowable and allocable in accordance with the contract terms and the provisions of this Code, and a fee, if provided in the contract.

4. "Discussions" as used in source selection means negotiation during which the seller or buyer may alter or otherwise change the terms, price or other provisions of the proposed contract.  Discussions can be conducted under competitive sealed proposals procurements, request for qualifications procurements, sole source procurements and emergency procurements; such discussions are not permissible under competitive sealed bidding except to the extent allowed in the first phase of multi‑step bidding.

5. "Established catalog price" means the price included in a catalog, price list, schedule or other form that:

1. Is regularly maintained by a manufacturer, distributor or contractor.

2. Is either published or otherwise available for inspection by customers.

3. States prices at which sales are currently or last made to a significant number of any category of buyers or buyers constituting the general buying public for the materials or services involved.

6. "Invitation for bids" means all documents, whether attached or incorporated by reference, which are used for soliciting bids in accordance with the procedures prescribed in ABOR Policy 3-803.B (Bidding and Source Selection Procedures, Competitive Sealed Bidding).

7. "Multi‑step sealed bidding" means a two‑phase process consisting of a technical first phase consisting of one or more steps in which bidders submit unpriced technical offers to be evaluated by the university, and a second phase in which those bidders whose technical offers are determined to be acceptable during the first phase have their price bids considered.

8. "Offer" means a proposal or submission of qualifications, as applicable, when a procurement is made by a source selection method other than competitive sealed bidding.

9. "Offeror" means a person submitting a proposal or statement of qualifications, as applicable, when a procurement is made by a source selection method other than competitive sealed bidding.

10. "Opening" means the date and time set for unsealing bids, receipt of unpriced technical offers in multi‑step bidding, or receipt of proposals and competitive sealed proposals.

11. “Paper" means newspaper, high grade office paper, fine paper, bond paper, offset paper, xerographic paper, duplicator paper and related types of cellulosic materials containing not more than ten percent by weight or volume of non-cellulosic material such as laminates, binders, coatings or saturates.

12. “Paper Product" means paper items or commodities, including paper napkins, towels, corrugated paper and related types of cellulosic products containing not more than ten percent by weight or volume of noncellulosic materials such as laminates, binders, coatings or saturates.

13. “Post-Consumer Material" means a discard generated by a business or residence that has fulfilled its useful life.  Post-consumer materials does not include discards from industrial or manufacturing processes.

14. "Purchase description" means the words used in a solicitation to describe the materials, services, construction or construction services for purchase and includes plans and specifications attached to, or made a part of, the solicitation.

15. “Recycled Paper" means paper products which have been manufactured from materials otherwise destined for the waste stream and which contain at least forty percent recovered wastepaper with ten percent of that being post-consumer material.

16. "Request for proposals" means all documents, whether attached or incorporated by reference, which are used in soliciting proposals in accordance with procedures prescribed in ABOR Policy 3-803 C (Bidding and Source Selection Procedures, Competitive Sealed Proposals) or ABOR Policy 3-804B.6 (Professional Services, Construction and Construction Services).

17. “Request for Qualifications" means all documents, whether attached or incorporated by reference, which are used in soliciting statements of qualifications in accordance with procedures prescribed in ABOR Policy 3-803E (Bidding and Source Selection Procedures, Competitive Selection Process for Clergy, Certified Public Accountants, Financial Advisors and Consultants, Physicians, Dentists and Legal Counsel), or ABOR Policy 3-804B.3.b (Professional Services, Construction and Construction Services, Procurement), or any other appropriate provision of the University Procurement Code.

18. "Requirements contract" means a term contract covering estimated quantities of materials or services or indefinite quantities of job-order-contracting construction services, or maximum and/or minimum quantities and with delivery on demand.

19. "Solicitation" means an invitation for bids, a request for proposals, a request for quotations, a request for qualifications, or any other requests by a university for the purpose of soliciting bids or proposals or qualifications to perform a contract to be entered into by the Board.

20. "Technical offer" means solicited or unsolicited submission of written information from a prospective contractor that states how that party intends to perform certain work; its technical and business qualifications; and its proposed delivery, warranty, and other terms and conditions as those might differ from or supplement the university's solicitation requirements.  It shall include such pricing information as may be required.

21. “Technical Proposal" means a technical proposal under ABOR Policy 3-804B.6 (Professional Services, Construction and Construction Services, Procurement).

22. “Wastepaper" means recyclable paper and paperboard, including high grade office paper, computer paper, fine paper, bond paper, offset paper, xerographic paper, duplicator paper and corrugated paper.

2. Competitive Sealed Bidding

1. Contracts shall be awarded by competitive sealed bidding except as provided by this code in accordance with the following sections:

1. 3‑803C            ‑   Competitive Sealed Proposals

2. 3‑803D.1        ‑    Procurement not exceeding $50,000

3. 3‑803D.2        ‑    Sole Source Procurement

4. 3‑803D.3        ‑    Emergency Procurement

5. 3-803D.4.        -    Procurement of livestock, animals, feed, etc.

6. 3-803D.5.        -    Procurement of materials at auction or at     commodity index - excluding real property

7. 3-803D.6.        -    Simplified construction procurement program

8. 3-803.D.7        -    Federal government general services administration contracts for materials or services

9. 3-803E.1        ‑    Competitive selection process for Clergy, Certified Public Accountants, Financial Advisors and Consultants, Physicians, Dentists and Legal Counsel

10. 3‑804B            -    Professional Services, Construction and Construction Services, Procurement of Professional Services and Construction Services

11. 3‑808G            ‑    ARCORs and Arizona Industries for the Blind

2. An invitation for bids shall be issued and shall include a purchase description and contractual terms and conditions applicable to the procurement.

3. Adequate public notice of the invitation for bids shall be given a reasonable time before the date set forth in the invitation for the opening of bids.  The notice may include publication one (1) or more times in a newspaper of general circulation a reasonable time before bid opening.  If the invitation for bids is for the procurement of services other than those described in ABOR Policy 3-803E (Bidding and Source Selection Procedures, Competitive Selection Process for Clergy, Certified Public Accountants, Financial Advisors and Consultants, Physicians, Dentists and Legal Counsel), the notice shall include publication in a newspaper of general circulation within this state.  The publication shall be not less than two (2) weeks before bid opening.  The notice may also be posted at a designated site on a worldwide public network of interconnected computers.

4. Bids shall be opened publicly, in the presence of one or more witnesses, at the time, date and place designated in the invitation for bids.  The amount of each bid, and such other relevant information as may be specified by the procurement officer, together with the name of each bidder shall be recorded.  This record shall be open to public inspection at the bid opening in a manner prescribed by the procurement officer.  The bids shall not be open for public inspection until after a contract is awarded.  To the extent the bidder designates and the university concurs, trade secrets or other proprietary data contained in the bid documents shall be maintained as confidential, all other information contained in such documents shall become public information following contract award.

The procurement officer shall examine the bids to determine the validity of any requests for nondisclosure of trade secrets and other proprietary data identified in writing.  If the parties do not agree as to the disclosure of data, the procurement officer shall inform the bidder in writing what portions of the bids will be disclosed and that unless the bidder protests under ABOR Policy 3‑809 (Legal Remedies) of this Code the bids will be disclosed.  After a contract is awarded, the bids shall be open to public inspection subject to any continuing prohibition on the disclosure of confidential data.

5. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this code.  Bids shall be evaluated based on the requirements set forth in the invitation for bids.  The university may include criteria to determine acceptability, such as inspection, testing, quality, workmanship, delivery and suitability for a particular purpose.  The invitation for bids shall set forth the evaluation criteria, including the weighting of identified criteria.  Evaluation criteria shall not be used for construction and no criteria may be used in bid evaluation that are not set forth in the invitation for bids.

6. Correction or withdrawal of erroneous bids before or after bid opening, based on bid mistakes, may be permitted by the procurement officer in accordance with procedures promulgated by the procurement officer.  After bid opening, no corrections in bid prices or other provisions of bids prejudicial to the interests of a university or fair competition shall be permitted.  Except as otherwise provided by this Code, all decisions to permit the correction or withdrawal of bids, or to cancel awards or contracts based on bid mistakes, shall be supported by a written determination made by the procurement officer.  Mistakes shall not be corrected after the award of the contract.

7. The contract shall be awarded to the lowest responsible and responsive bidder whose bid conforms in all material respects to the requirements and criteria set forth in the invitation for bids.  The amount of any applicable transaction privilege or use tax of a political subdivision of this state is not a factor in determining the lowest bidder.  If all bids for a construction project exceed available monies as certified by the appropriate fiscal officer, and the low responsive and responsible bid does not exceed such monies by more than five percent (5%), the procurement officer may in situations in which time or economic considerations preclude resolicitation of work of a reduced scope negotiate an adjustment of the bid price, including changes in the bid requirements, with the low responsive and responsible bidder, to bring the bid within the amount of available monies.

8. The multi‑step sealed bidding method may be used if the procure­ment officer determines that it is not practical to initially prepare a definitive purchase description which is suitable to permit an award based on competitive sealed bidding.  An invitation for bids may be issued requesting the submission of technical offers to be followed by an invitation for bids limited to those bidders whose offers are determined to be technically acceptable under the criteria set forth in the first solicitation, except that the multistep sealed bidding method may not be used for construction contracts.

9. If the price of a recycled paper product which conforms to specifications is within five percent (5%) of a low bid product which is not recycled and the recycled product bidder is otherwise the lowest responsible and responsive bidder, the award shall be made to the bidder offering the recycled product.  The university may adopt rules requiring a five percent (5%) preference for other products made from recycled materials.

3. Competitive Sealed Proposals

1. If the procurement officer determines in writing that the use of competitive sealed bidding is either not practicable or not advantageous to the university, a contract for materials or services may be entered into by competitive sealed proposals.  This subsection does not apply to procurement of construction or construction services or professional services pursuant to ABOR Policy 3-804.B.3 (Professional Services, Construction and Construction Services, Procurement of Professional Services and Construction Services).  Construction, construction services and professional services shall be procured as prescribed in ABOR Policy 3-804A (Professional Services, Construction and Construction Services, Project Delivery Methods

1. Factors to be considered in determining whether competitive sealed bidding is not practicable include:

(1) Whether the contract needs to be other than a fixed price type;

(2) Whether oral or written discussions may need to be conducted with offerors concerning technical and price aspects of their proposals;

(3) Whether offerors may need to be afforded the opportunity to revise their proposals, including price;

(4) Whether an award may need to be based upon a comparative evaluation as stated in the request for proposals of differing price, quality, and contractual factors in order to determine the most advantageous offering to the university.  Quality factors include technical and performance capability and the content of the technical proposal; and

(5) Whether the primary consideration in determining award may not be price.

2. Factors to be considered in determining whether competitive sealed bidding is not advantageous include:

(1) If prior procurements indicate that competitive sealed proposals may result in more beneficial contracts for the university; and

(2) Whether the factors listed in ABOR Policy 3-803C.1.a.(2) through (4) (Bidding and Source Selection Procedures, Competitive Sealed Proposals) are desirable in conducting a procurement rather than necessary.

2. Proposals shall be solicited through a request for proposals.

3. Adequate public notice of the request for proposals shall be given in the same manner as provided in ABOR Policy 3-803B.3 (Bidding and Source Selection Procedures, Competitive Sealed Bidding).

4. Proposals shall be opened publicly at the time, date and place designated in the request for proposals.  The name of each offeror, and such other relevant information as is specified by the procurement officer, shall be publicly read and recorded.  All other information contained in the proposals shall be confidential so as to avoid disclosure of contents prejudicial to competing offerors during the process of negotiation.  The proposals shall be open for public inspection after contract award.  To the extent that the offeror designates and the university concurs, trade secrets or other proprietary data contained in the offer documents shall be maintained as confidential, all other information contained in such documents shall become public information following contract award.

The procurement officer shall examine the offers to determine the validity of any requests for nondisclosure of trade secrets and other proprietary data identified in writing.  If the parties do not agree as to the disclosure of data, the procurement officer shall inform the offeror in writing what portions of the offer will be disclosed and that unless the offeror protests under ABOR Policy 3-809 (Legal Remedies) the offer will be disclosed.  After a contract is awarded, the offers shall be open to public inspection subject to any continuing prohibition on the disclosure of confidential data.

5. The request for proposals shall state all of the evaluation factors, including price, and their relative importance.  Specific numerical weighting is not required, but may be used.

6. As provided in the request for proposals, and under procedures promulgated by the procurement officer, discussions may be conducted with responsible offerors who submit proposals determined to be reasonably susceptible to being selected for award for the purpose of clarification to assure full understanding of, and responsiveness to, the solicitation requirements.  Offerors shall be accorded fair treatment with respect to any opportunity for discussion and revision of proposals, and such revisions may be permitted after submissions and before award for the purpose of obtaining best and final offers.  If discussions are conducted, all offerors who have submitted proposals that are determined by the procurement officer to be in the competitive range shall be invited to submit a final revised proposal.  In conducting discussions, there shall be no disclosure of any information derived from proposals submitted by competing offerors.

7. The award shall be made to the responsive and responsible offeror whose proposal is determined to be the most advantageous to a university taking into consideration the evaluation factors set forth in the request for proposals.  No other factors or criteria may be used in the evaluation.  The amount of any applicable transaction privilege or use tax of a political subdivision of this state is not a factor in determining the most advantageous proposal.  The contract file shall contain a written determination showing the basis on which the award is made.

8. Notwithstanding any other provision in this Article H (University Procurement Code), a contract for the services of any financial consultant under circumstances not covered in ABOR Policy 3‑803.D (Bidding and Source Selection Procedures , Exceptions to Competitive Selection) shall be awarded through competitive sealed proposals.

1. Prospective financial consultants may be prequalified pursuant to ABOR Policy 3‑803.F.3 (Bidding and Source Selection Procedures, Additional Provisions Related to Source Selection).  The universities may use a uniform questionnaire for this purpose.

2. For any such contract, a university may use another method of procurement consistent with this Code upon prior approval of the Board.

4. Exceptions to Competitive Selection

1. Procurement Not Exceeding $50,000

Any procurement which does not exceed an aggregate dollar amount of fifty thousand dollars may be made in accordance with procedures promulgated by the procurement officer, except that the procurements shall be made with such competition as is practicable under the circumstances.  Any procurement which does not exceed the aggregate dollar amount of fifty thousand dollars shall be restricted, if practicable, to small businesses. The procurement officer shall rotate the small businesses solicited to compete for any procurement of fifty thousand dollars or less.  If it is impracticable to restrict a particular procurement to small businesses, the procurement officer shall make a determination setting forth the reasons and place it in the contract file. Procurement requirements shall not be artificially divided or fragmented so as to constitute a purchase under this subsection and to circumvent the source selection procedures required by ABOR Policy 3-803.B (Bidding and Source Selection Procedures, Competitive Sealed Bidding) or ABOR Policy 3-803.C (Bidding and Source Selection Procedures, Competitive Sealed Proposals) or ABOR Policy 3-804.B (Professional Services, Construction and Construction Services, Procurement of Professional Services and Construction Services

2. Sole Source Procurement

A contract may be awarded for a material, service, construction or construction services without competition if the procurement officer determines in writing that there is only one source for the required material, service, or construction item or construction services.  The procurement officer may require the submission of cost or pricing data in connection with an award under this ABOR Policy 3-803D.2 (Bidding and Source Selection Procedures, Exceptions to Competitive Selection, Sole Source Procurement).  Sole source procurement shall be avoided except when no reasonable alternative source exists.  A written determination of the basis for the sole source procurement shall be included in the contract file.  Professional services may be procured under this subsection.

3. Emergency Procurements

Notwithstanding any other provisions of the Code, a university president or the president's designee may make emergency procurements if there exists a threat to public health, welfare or safety, or if a situation exists which makes compliance with ABOR Policy 3-803B (Bidding and Source Selection Procedures, Competitive Sealed Bidding), ABOR Policy 3-803C (Bidding and Source Selection Procedures, Competitive Sealed Proposals) or ABOR Policy 3-804B (Professional Services, Construction and Construction Services, Procurement of Professional Services and Construction Services) impracticable, unnecessary or contrary to the public interest, except that such emergency procurements shall be made with such competition as is practicable under the circumstances.  A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file.

4. Procurement of Livestock, Animals, Feed, etc.

The procurement officer shall be authorized to purchase livestock, animals, and feed through “order buyers" who may attend auctions in order to purchase cattle that meet agreed upon size and other specifications and based upon the current market value of the cattle at the