Procurement Services 201: Limited Purchase Orders

Purpose

To enable employees to use the Limited Purchase Order method for small dollar purchases

Reference

University of Alaska Procurement Manual (not available online) Board of Regents Regulation 05.06.400

Definitions

Limited Purchase Orders: Limited Purchase Orders (LPO's) are a purchasing method consisting of a four part form that can be used like a blank check. They may be taken to a local business and filled out to purchase items totaling up to $2,500. LPO's should be treated as a blank check and kept in a secure place. 

Policy

Where You Can Use LPO's
You can use an LPO at any local business that agrees to accept a Limited Purchase Order from the University of Alaska Anchorage. Many businesses are familiar with this method and will readily accept an LPO.

What You Can Purchase With LPO’s
LPO's are designed as a convenient method for University employees to “shop” for non-repetitive use, in-stock items or same-day services not exceeding $2,500. LPO's may only be used at businesses located within the State of Alaska. Think of them as a “cash and carry” tool, meaning that you spend your LPO and pick up your merchandise at the same time. For example, a university employee performing field research or traveling on university business within the state may use an LPO for items required for his or her university business as long as the purchase is made on the “same day” and within Alaska. Although competition is not required, it is expected that the best possible price be obtained and that no favoritism be shown in selecting suppliers.

What Food Purchases May Be Made With LPO’s
LPO’s may be used for food purchases that qualify for the use of the 3008, 4008, or 8115 object codes. Nonrepresentational purchases are carefully monitored and must be documented by a blanket authorization letter or a representational/non-representational form.

What Cannot Be Purchased With LPO’s
  1. Any capital equipment item
  2. Anything with a cost of over $2,500. Note: LPO's may not be combined for a single purchase to avoid the limit.
  3. Items placed on order
  4. Items that must be “back ordered”
  5. Items purchased from an out-of-state vendor
  6. Personal items
  7. Weapons
  8. Hazardous materials or chemicals
  9. Computers
  10. Contract items from a noncontract vendor
  11. Pharmaceuticals
Advantages of LPO’s
  1. Departments can "shop" for items directly from a vendor. This is especially advantageous for “rush” items that are authorized for purchase on an LPO.
  2. LPO’s reduce paperwork for small dollar, large volume purchases
Disadvantages of LPO’s
  1. Use is limited to in-state and local vendors.
  2. Total of purchases must not exceed $2,500.
  3. Items must be off-the-shelf and in stock.
  4. No back orders are allowed
How to Get LPO’s
Prepare a brief memo in the following format. Fax it to Procurement Services at 786-6519. Call 786-6500 with questions about LPO's.

TO:       Procurement Services         FAX: x 6519
FROM:   You and your Dept
RE:       LPO’s
 
Please prepare (how many--up to a limit of ten) LPO's. No specific dollar value is required. Then list:
  1. Department
  2. Contact person
  3. Department phone number
  4. Department org number (account number)
    Note: Fund 2 accounts need the prior approval of Grants & Contracts.
  5. Account code (object code)
  6. When the LPO’s are needed. (If you need the LPO the same day as you send the memo, call Procurement Services to see if the LPO can be prepared immediately.)
  7. The memo must be signed by someone with signature authority on the specified budget
How to Spend LPO’s
The employee making the purchase is given the four-part LPO. Take the LPO to the business. Make your purchase of in-stock items and present the LPO as payment. Fill in the vendor name and address. Fill in the items purchased—be as specific as space allows. Verify that the amount charged on the LPO is correct. Sign at the bottom at “Signature of Purchaser”. The clerk will process it and give you a receipt. The business should get the top, white, original LPO copy. The UAA employee keeps all other copies and the receipt to submit for final processing.