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Capital Equipment Management -Definition & Years of Life |
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| Definition
of Capital Equipment |
| Scope |
| Procedure |
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Evaluation
and Selection |
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Negotiation
and Purchasing |
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| DEFINITION
OF CAPITAL EQUIPMENT: |
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A.
Capital equipment is defined as a single piece of equipment
with a cost of $5,000.00 or more and with a useful life of 2
years or more. The cost of an individual piece of equipment
with an acquisition cost less than $5,000 will be capitalized
if it is included as part of a system ( i.e. computer printer)
and dependent upon the system to operate. If the equipment cannot
operate as a standalone piece of equipment it will be capitalized
even though its cost is less than $5,000.00 |
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B.
Furniture or equipment construction over $5,000. |
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C.
Equipment purchases that are below the limits set in A are to
be considered minor equipment and expensed |
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D. Equipment-like
items used to repair or as a replacement part for the existing
equipment will not be considered minor equipment and expensed.
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| SCOPE:
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All capital equipment
purchases will be coordinated by the Purchasing Department,
with involvement of the requesting department, administration,
finance and others as needed to make a selection. The decision
team will review equipment effectiveness, pricing, training,
service support, warranty and terms and conditions of the
purchase.
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| PROCEDURE:
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1. EVALUATION
AND SELECTION
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It
is everyone's responsibility to insure the University receives
the best possible product for any moneys spent. The Department
Director is to contact the Purchasing Department when a capital
equipment purchase is contemplated. The Purchasing & Contracts
will develop the strategy for the acquisition. This request
should be at least 90 days prior to the planned purchase date
to allow purchasing to adequately research the product.
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2.
NEGOTIATION AND PURCHASING |
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A.
Once the evaluation of the equipment has been completed, the
Purchasing & Contracts will be responsible for obtaining
valid quotations or proposals from the agreed upon vendors.
Valid quotations include the following information: payment
terms, freight; delivery date; warranty; training cost, if any;
and the prices for each; total price. In addition, the quote
must be on manufacturer letterhead, typewritten and signed by
an authorized agent of the company. Quotes that do not follow
this format or have hand written changes will not be accepted
Purchasing & Contracts. |
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B.
Department personnel are not to conduct negotiations prior to
the designated negotiating team having discussed and agreed
upon a strategy. The Purchasing Department is the sole responsibility
to solicit quotations from vendors. |
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C.
The Purchasing & Contracts will obtain an analysis on quotations
for all eligible equipment. A Purchase Order will not be issued
unless a price analysis has been received. A pricing analysis
takes 3 work days for completion. The price analysis provides
a basis to compare the proposal to other proposals for purchases
at other hospitals and universities. |
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D.
Upon receipt of the pricing analysis, Purchasing & Contracts
will distribute a copy of the information to all appropriate
personnel on the negotiating team. Team members will then decide
upon the most effective steps to continue the negotiations.
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E.
After all negotiations are finalized, the Purchasing Department,
after receipt of all approvals can place the order for the designated
equipment.
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