CHAPTER 4 PURCHASING

Supplies and services that are not stocked or supplied must be procured by an activity to fulfill its assigned mission.

The material presented in this chapter is not intended to be comprehensive. It does not contain everything an AK involved in purchasing needs to know; therefore, if your duties involve purchasing in any capacity, you should refer to the applicable sections of the NAVSUP manuals along with pertinent instructions and regulations. In addition, you should study NAVSUP P-560 carefully.

PURCHASING REGULATIONS

Detailed instructions and guidelines concerning the purchase or procurement of material or services from commercial suppliers are contained in the Navy Supply Acquisition Regulation Supplement (SUPARS), NAVSUP P-560. Fleet fast pay procedures are contained in applicable fleet accounting and disbursing center (FAADC) instructions.

The NAVSUP P-560, together with the Navy Acquisition Regulation Supplement (NARSUP), the Department of Defense Federal Acquisition Regulation Supplement (DFARS), and the Federal Acquisition Regulation (FAR), is used by all Navy activities for basic purchasing and contracting guidance.

TRAINING

All personnel involved in the purchasing function such as contracting officers, storekeepers, and buyers must attend a NAVSUPauthorized small purchase course. In addition, the management of all activities performing a purchasing function must make sure personnel are adequately trained to maintain and improve the quality of the purchasing function.

STANDARDS OF CONDUCT

All personnel engaged in purchasing and related functions occupy positions of public trust. Such personnel must, therefore, conduct themselves with absolute fidelity to the government. Accordingly, a person must not allow himself or herself to be placed in a position in which a conflict of interests may arise or in which he or she may justifiably be suspected.

Accepting gratuities or favors or engaging in any other action that would result in financial profit or influence strict impartiality must absolutely be avoided.

Information concerning proposed purchasing actions may not be made available to particular suppliers unless such information is made available to all competing suppliers.

There are certain statutes that make it a crime for an agent of the government to engage in practices or activities that are at variance with the high standard of personal conduct that a person owes to the United States as such an agent. A digest of applicable provisions of these statutes is set forth in SECNAVINST 5370.2. Any person engaged in purchasing should make it a particular point to acquaint themselves with the provisions of the applicable statutes.

METHODS OF PURCHASE

The acquisition of supplies or nonpersonal services from commercial sources in the amount of $25,000 or less is referred to as small purchase. Open market requirements in excess of $25,000 must be procured through formal contracting procedures.

Small purchase and other simplified purchase procedures of open market purchases can be made only when requirements cannot be obtained from a mandatory government source of supply. The mandatory sources are as follows:

Defense/federal supply systems for material assigned an NSN

Excess personal property from other agencies

Federal prison industries

National industries for the blind or other severely handicapped

Mandatory GSA federal supply schedule contracts

Optional GSA federal ^{supply schedule} contracts

OPEN MARKET PURCHASES

The methods for making small purchases and corresponding dollar limitations are as follows:

Small business-small purchase set-aside. Each purchase with small business concerns must be $10,000 or less.

Blanket purchase agreement (BPA). Each BPA call may not exceed $10,000 (except $25,000 for inventory control points [ICPs]) with an unlimited amount for subsistence.

Imprest fund (IF). Each purchase using the IF may not exceed $500.

Purchase order. Each purchase order may not exceed $25,000.

Purchase invoice. The purchase invoice method using the Standard Form 44 may not exceed $2,500 (except $10,000 for aviation fuel and oil purchased by pilots).

SMALL PURCHASE PROCEDURES

A purchase request (PR) must be prepared and approved before the contracting officer starts a purchase action. A PR includes the various MILSTRIP requisitions, a Request for Contractual Procurement, NAVCOMPT Form 2276, or the Military Interdepartmental Purchase Request, DD Form 448.

Purchase Request

All PRs received must be receipt dated, screened, routed for recording, and assigned a control or route sheet. The initial screening includes an authorized signature; accounting information; a priority designator and a required delivery date; clearance and approval; and an attached statement of work, technical specifications, drawings, or blueprints.

A final screening of all PRs is conducted by the buyer or storekeeper for adequacy. When a PR is determined to be inadequate, it is returned to the originator for modification or cancellation.

Each contracting office establishes minimum standards for requirements data that must be included as a part of each PR before it is considered adequate. The minimum level of information needed to determine adequacy should include, but not necessarily be limited to, the following:

1. Funding

2. Plain English (adequate purchase descrip tion or specification or statement of work)

3. Part number and corresponding CAGE code

^4. Quantity

5. Required delivery date or period of performance and priority designator

6. Place of delivery with proper consignment instructions, if applicable

7. Previous buys and prices paid for the same or similar item or, when no history exists, a price estimate and the basis upon which the estimate was established

8. Sole source justification, if required

9. A point of contact for technical information

10. Any unique requirements such as marking, packing, or transportation accounting codes

11. Document number