Chapter 2 – Fiscal Management

22030.1 Policy

• The Department shall operate in accordance with the basic statewide materials management program policy in the SAMState Administrative Manual 3500. The Department shall practice effective purchasing methods that will minimize the quantity and type of expendable items in the Department’s inventory.

• The inventory management and control systems in use throughout the Department shall be standardized, when possible, and provide for an accountable, responsive, and financially sound materials management program.

22030.2 Purpose

• This section describes the materials management program of the Department.

22030.3 Responsibility DGS

• Every purchase of supplies or equipment in excess of $100 is subject to the approval of the DGSDepartment of General Services. DGSDepartment of General Services has delegated purchasing authority in accordance with the Public Contract Code (PCCPublic Contract Code) 10330 to the Department.

• Department’s Administrators

  • The Warden at each institution; the Deputy Directors of ASDSee Division of Administrative Services (DAS) (see ASB) and Planning and Construction (P&CDPlanning and Construction Division (see FPCM)); and the General Manager of CALPIACalifornia Prison Industry Authority (formerly PIA) direct their purchasing programs and investment of expendable goods inventories.

• Materials Manager

  • The Materials Manager in the BSS of the ASDSee Division of Administrative Services (DAS) (see ASB) shall:

    • Coordinate the materials management program.

    • Provide guidelines, training, and assistance to staff in meeting the goal and objectives of the materials management program.

    • Audit purchasing activities periodically to ensure adherence to the purchasing laws and procedures and the terms and conditions required for materials management. The Materials Manager shall work closely with the business management staff of each institution to ensure that these policies and procedures are being followed.

• Associate Warden, Business Services

  • The Associate Warden, Business Services, at each institution shall ensure that the goal and objectives of the Department’s materials management program are met and ensure that all department staff involved in purchasing are afforded the opportunity to receive the training required to adequately perform their duties.

• Purchasing Units

  • The Department’s purchasing units shall:

    • Purchase materials necessary to meet the needs of the Department in a timely manner.

    • Purchase products and services which provide the best quality for the least money.

    • Deny or reduce a requisition for items for inventory if the amount requested exceeds the maximum based on the minimum/maximum order points or requisitioning objective concept stock control method.

• Employees

  • All departmental personnel involved in purchasing shall:

    • Comply with state and departmental conflict of interest policies and procedures and the terms and conditions of the delegated purchase program. Conflict of interest statements shall be on file for the employees securing bids and quotes from vendors and those employees who approve and have authority over materials management program activities.

    • Receive purchasing training offered by either the State Office of Procurement or the Department’s materials management staff.

    • Be familiar with the Intraoffice Requisition/Procurement Worksheet, state purchasing contracts, state price schedules, Materials Services Supply Order Forms, Contract/Delegation Order Forms, and the delegated purchase program.

• No employee shall commit to a vendor for the purchase of merchandise or services prior to receiving approval and the preparation of a purchase document.

22030.4 Goal and Objectives

• The program goal is to have quality materials available where they are needed, in adequate quantities, at a minimum cost to the Department.

• The Department’s program objectives include the following:

  • Support

    • Support operations with an uninterrupted flow of material without overstocking.

      • Maintain accurate stock records with fiscal accountability.

      • Set stock levels after stock records are maintained and reset levels at least annually thereafter.

  • Improve

    • Improve service at the lowest feasible cost.

      • Chart the target and the actual inventory level of the total inventory and by material commodity group and class.

      • Chart and measure the overall service level and set goals.

  • Develop

    • Develop reliable systems which shall help prevent stock outages and provide continued program performance.

      • Determine the percentage of stock outages caused by late deliveries or inaccurate forecasts.

  • Set

    • Set an inventory turn rate goal for each commodity group.

      • Measure the annual inventory turn rate by group.

  • Maintain

    • Maintain an accurate and up-to-date book inventory.

      • Compare physical inventory counts with book inventory counts.

      • Determine the level of accuracy in posting transactions.

      • Identify the data lag by comparing the date of the inventory transaction with the date the transaction is posted.

  • Keep

    • Keep the inventory investment and the inventory losses because of deterioration and obsolescence of stock items at a minimum.

      • Determine whether or not stock is being rotated.

      • Determine the amount and value of items declared obsolete or defective.

      • Identify all items with declining demand histories before they become obsolete.

  • Buy

    • Buy competitively.

      • Secure bids and quotes from vendors to determine lowest cost.

      • Develop lists of vendors and encourage vendors to offer discounts for prompt payment of invoices.

  • Encourage

    • Encourage purchases from small, minority, or women-owned businesses.

      • Establish goals and facilitate the participation of 15 percent minority and 5 percent women owned businesses in procurement service and public works contracts.

      • Provide that the contracts let by the Department for the construction, erection, alteration, repair, or improvement of a state prison facility and for services, maintenance, and supplies be awarded to at least 15 percent minority businesses and 5 percent women-owned businesses.

      • Determine the percentage of expenditures for annual purchases awarded to small, minority, or women-owned businesses.

22030.5 Intra‑Office Requisition/Procurement Worksheet

• A CDC Form 954, Intra-office Requisition/Procurement Worksheet shall be used to provide purchase office staff with data required for the preparation of final purchase documents. One side of the form is designed for the requisitioner to list information about the bid and quote processes used to determine the vendor that shall be awarded the purchase, and the other side is used to list all pertinent purchasing data after the bids and quotes are analyzed. The CDC Form 954 shall be affixed to the file copy of the final purchase document for audit purposes.

22030.5.1 Intra‑Office Requisition Data Requirements

• The intra-office requisition data requirements are as follows:

  • Area of “Intraoffice Requisition”

    • Agency billing code-to be entered by the requester or purchase office staff.

    • Location – to be entered by the purchase office staff.

    • Contract/delegation number – enter the appropriate number found on state contracts state price schedules, or the unit’s delegated purchase program number.

    • Ship to – enter unit and person to which themerchandise or services are to be delivered.

    • Bill to – to be entered by the purchase office staff.

    • Date – enter the date the requisition is prepared by the requester.

    • Agency order number – to be entered by the purchase office staff.

    • To: (firm address) – enter name, address, and phone number of the vendor contact person who shall receive the order.

    • Vendor number – enter the appropriate number. If the vendor number is unknown or unavailable, leave blank and fill out small business code and ethnic code.

    • Small business (S/B) code – enter the appropriate information. If a vendor number is not available, do not leave this code box blank unless the vendor is known to be a “large business”.Enter S = small business, or leaved blank to indicate large business.

    • Ethnic code – enter the appropriate information when a vendor number is not available. Enter only one of the following numbers or letters:

      	Male	Female
      Black	1	A
      Asian	2	B
      Other	3	C
      Spanish-Speaking/Surnamed	4	D
      White	5	E
      Polynesian	6	F
      American Indian or Alaskan Native	7	G
      Filipino	8	H
      Unknown	Blank	Blank

    • Line no. – enter a number sequentially beginning with number one for each item being requested..

    • Quantity – enter the quantity needed in this column. Do not enter fractions, decimals, or commas. Always check the order unit and packaging requirements and adjust the quantity accordingly. Quantity ordered shall correspond with the order units.

    • Unit – enter the appropriate unit of measure ( e.g., EA, DZ, PG, etc.) that is shown in the Purchasing Information Network (PIN) Stock Item Catalog.

    • Stock item number – enter numbers as required.

    • Materials Services items – the full 12-digit PIN stock item number that is listed in the Materials Services Catalog.

    • State contract items – the full 12-digit PIN stock item number found in state contracts or the PIN stock item catalog.

    • State Price Schedule (SPSState Price Schedule) items – no numbers required for state price schedule items except for those sold by the CALPIACalifornia Prison Industry Authority (formerly PIA).

    • CALPIACalifornia Prison Industry Authority (formerly PIA) items shall be listed with the full 12-digit PIN number shown in the SPSState Price Schedule, CALPIACalifornia Prison Industry Authority (formerly PIA), or PIN catalogs.

    • Delegated purchase program items – the four-digit group/class number that is the first four numbers of the PIN stock item number shown in the PIN catalog.

    • Purchase estimate/purchase order items – enter the 12-digit PIN stock item number shown in the PIN catalog.

    • Subpurchase order (under $100) items – no number is required.

    • Subpurchase order (over $100) items – enter the four-digit group/class number that is the first four numbers of the stock item number shown in the PIN catalog.

    • Description – enter the appropriate description for the item being ordered using the key noun that best describes the item and all other descriptors that include color, size, part, or catalog number, name, etc..

    • Per unit – enter the unit price that corresponds to the quantity/unit of measure being used.

    • Total – enter the extension price. (The unit price times the quantity equals the total).

    • I hereby certify – signature and title of the employee who determines that the items requested are appropriate and required for state business.

    • Approved/title – to be entered by the purchasing officer or the person delegated authority to approve the processing of the final purchase document

22030.5.2 Procurement Worksheet Data Requirements

• The procurement worksheet data requirements are as follows:

  • Price quotes obtained by – signature of the person who obtained the required bids and quotes contained on the worksheet.

  • Vendor information – not required for state contract, state price schedule, Materials Services and subpurchase orders (under $100). For purchase estimate/purchase orders, enter the reference vendor that should be invited to bid by the Office of Procurement. Contract/delegation orders and subpurchase orders (over $100) require multiple quotations orders and subpurchase orders (over $100) require multiple quotations when purchases are made for highly competitive items (i.e., those items that are available from several sources at competitive prices). Examples of highly competitive items are automotive parts; maintenance items including electrical, plumbing, and lumber; and office supplies. Enter the appropriate vendor name, address, and phone number for each quote required in the spaces provided.

  • FOB – to be determined at the time quotes are obtained. Request “FOB destination” whenever possible. “FOB shipping point” shall be avoided as title to the materials transfers to the Department at the time of shipment. Filing claims for FOB shipping point orders and resolution of problems involved in the delivery, from the time the shipment leaves the vendor to the time of delivery, is the responsibility of the Department.

  • Term – enter the cash discount term offered by vendors to ensure timely invoice payment. Cash discounts amounting to at least $2.50 and where the discount percentage allowed is at least one-half of the percent shall require the appropriate accounting office to issue a revolving fund check to ensure the discount can be taken.

  • Delivery – enter the date the materials or services are expected to be delivered.

  • Add minority ethnic indicator – disregard. To be revised at a later date.

  • Item/quantity/unit – enter the description, number, and unit of measure for the item being ordered.

  • Unit price/extension – enter the quoted price from each vendor and the total cost of each item. Unit pricetimes the quantity equals the extension price.

  • Gender/ethnic indicator – circle one of the alpha/ numeric indicators for the vendor awarded the purchaseorder (0-8 or A-H).

22030.6 Contract /Delegation Purchase Order

• A Standard (STDStandard Form (DGS)) Form 65, Contract/Delegation Purchase Order, shall be used for the following:

  • Purchases from state contract vendors.

  • Purchases from state price schedule vendors.

  • Subpurchase order transactions.

  • Delegated purchase program transactions.

22030.6.1 State Contract Order

• The Office of Procurement, DGSDepartment of General Services, has negotiated contracts with vendors and suppliers for many of the more commonly used products and materials. Materials available on state contract shall be purchased only from the contract vendor.

• Officers and employees purchasing state contract items at higher retail prices from non-contract vendors are personally liable for the difference between the non-contract and state contract price, except in verified emergencies which shall be fully explained on the orders covering the emergency.

• There is usually a minimum order quantity on commodity contracts. If a vendor shall not accept an order that is less than the minimum order quantity, and the minimum quantity, when received, shall be in “long supply”, the item can be purchased off contract. If, upon contacting a vendor, an order for less than minimum quantity is acceptable, the following should be marked on the contract/delegation purchase order: “Agreement to accept order less than minimum authorized (date), by (vendor name).” All contracts in force are listed in the “Check List of Effective Contracts and Price Schedules” issued by the DGSDepartment of General Services, Office of Procurement.

• For purchases of filing and/or microfilm equipment, necessary approval shall be secured from the Department records management analyst in Headquarters, BSS prior to submitting to the approving agency.

• A copy of all new state contract orders shall be mailed to the Office of Procurement on a weekly basis.

22030.6.1.1 Data Requirements

• The data requirements for purchases from contract vendors are as follows:

  • Area of “Contract/Delegation Purchase Order”

    • Agency billing code – enter the correct agency billing code.

    • Contract/delegation number – enter the state contract number from the cover page of the state contract notification. Do not use the dashes when listing the number.

    • Ship to – enter address to which merchandise shall be delivered.

    • Bill to – enter name and address of the unit to receive the invoice or statement.

    • Date – enter the date the order is prepared. The month, day, and year shall be indicated with two digits (e.g., July 17, 1989 as 07 17 89).

    • Agency order number – enter the appropriate agency order number, an internal control number, from left to right.

    • Firm address – enter the name, address and phone number of the contact person of the vendor.

    • Vendor number – enter the appropriate number. When a vendor number is not shown on the state contract notification, leave blank.

    • Small business (S/B) code – enter the appropriate information when a vendor number is not available.

    • S = small business.

    • Blank = not small business or unknown shall be counted as a large business.

    • Ethnic code (ETH) – furnish the appropriate information when a vendor number is not available. Enter only one of the following numbers and letters:

      	Male	Female
      Black	1	A
      Asian	2	B
      Other	3	C
      Spanish-Speaking./Surnamed	4	D
      White	5	E
      Polynesian	6	F
      American Indian or Alaskan Native	7	G
      Filipino	8	H
      Unknown	Blank	Blank

    • Date wanted – enter the delivery date material is expected (e.g., 30 days ARO shall be converted to an exact delivery date). ASAP shall not be used in any case.

    • Ship by – used to indicate special handling or a specific method of transportation.

    • Terms – enter the terms listed in the state contract notification.

    • Quantity – enter the appropriate quantity needed.

    • Unit – enter the two digit unit of measure (e.g., EA, DZ, G, etc.).

    • Stock item number – enter the stock item number exactly as shown in the state contract.

    • Description – enter the description that is listed in the state contract notification. When the description of the item exceeds one line, the description shall be extended to the next line in the stock item column.

    • Unit price – enter the unit price that corresponds to the order unit.

    • Extension – enter the extended price which is quantity times the unit price.

    • FOB – enter the shipping point noted on the state contract notification.

    • Sales tax – enter the sales tax required for the purchase of materials.

    • Total – enter the total cost of the order. Include the subtotals from all continuation pages (STDStandard Form (DGS) Form 65A) when they are included in one agency order number.

    • Charge against – enter the program number, index code, fund title, item number, chapter number, statute, fiscal year, and object code.

    • Certification – signature of the person authorized to sign the purchase document.

    • Self-invoicing – the contract/delegation purchase order may be used as a self-invoicing form. Vendors may return “copy 1”, with the “self-invoicing” box completed, rather than send a separate invoice.

    • Completion of all other data requirements on the contract/delegation purchase order form is self-explanatory.

    • Completion of all other data requirements on the contract/delegation purchase order form is self-explanatory.

22030.6.2 State Price Schedule

• SPSs are established to permit direct ordering of primarily noncompetitive commodities by state agencies. They are not contracts and agencies are not required to purchase items from SPSState Price Schedule vendors except those listed with CALPIACalifornia Prison Industry Authority (formerly PIA). Except for items available from CALPIACalifornia Prison Industry Authority (formerly PIA), if an item of another brand or type would better meet the department’s needs and the price is lower, it shall be processed as a normal purchase transaction after notifying the Office of Procurement, Research and Analysis Section, of the intent to purchase the item from another source. Permission shall be secured to purchase materials from alternative vendors who offer the items at lower prices. A notation concerning the approval and circumstance shall be placed on the order for audit purposes.

• Purchases against an SPSState Price Schedule cannot exceed the $9,999.99 limit specified in the SPSState Price Schedule. Each time an order is placed against an SPSState Price Schedule, a copy shall be forwarded to the Office of Procurement.

• Purchases from CALPIACalifornia Prison Industry Authority (formerly PIA) have no monetary restrictions.

• Copies of SPSState Price Schedule orders shall be sent to the Office of Procurement on a weekly schedule.

22030.6.2.1 Data Requirements

• The data requirements for purchases from SPSState Price Schedule vendors are as follows:

  • Area of “Contract/Delegation Purchase Order”

    • Agency billing code – enter the correct agency billing code.

    • Contract/delegation number – enter the appropriate state price schedule number, from left to right, and omit all dashes.

    • Ship to – enter address to which merchandise shall be delivered.

    • Bill to – enter name and address of the unit to receive the invoice or statement.

    • Date – enter the date the order is prepared. The month, day, and year shall be indicated with two digits (e.g., July 17, 1989 as 07 17 89).

    • Agency order number – enter the appropriate agency order number, an internal control number, from left to right.

    • Firm address – enter the name, address and phone number of vendor contact person.

    • Vendor number – not required.

    • Small business (S/B) code – enter the appropriate information when a vendor number is not available.

    • S = small business.

    • Blank = not small business or unknown shall be counted as a large business

    • Ethnic code (ETH) – furnish the appropriate information when a vendor number is not available. Enter only one of the following numbers and letters:

      	Male	Female
      Black	1	A
      Asian	2	B
      Other	3	C
      Spanish-Speaking/Surnamed	4	D
      White	5	E
      Polynesian	6	F
      American Indian or Alaskan Native	7	G
      Filipino	8	H
      Unknown	Blank	Blank

    • Date wanted – enter the delivery date material is expected (e.g., 30 days ARO shall be converted to an exact delivery date). ASAP shall not be used in any case.

    • Ship by – used to indicate special handling or a specific method of transportation.

    • Terms – enter the terms listed in the state price schedule notification.

    • Quantity – enter the appropriate quantity needed.

    • Unit – enter the two digit unit of measure (e.g., EA, DZ, PG, etc.).

    • Stock item number – not required except for purchases from CALPIACalifornia Prison Industry Authority (formerly PIA). A 12- digit PIN stock item number is required for all CALPIACalifornia Prison Industry Authority (formerly PIA) items.

    • Description – enter the proper description shown in the state price schedule notification.

    • Unit price – enter the unit price that corresponds to the order unit.

    • Extension – enter the extended price which is quantity times the unit price.

    • FOB – enter the shipping point noted on the state price schedule notification.

    • Sales tax – enter the sales tax required for the purchase of materials.

    • Total – enter the total cost of the order. Include the subtotals from all continuation pages (STDStandard Form (DGS) Form 65A) when they are included in one agency order number.

    • Charge against – enter the program number, index code, fund title, item number, chapter number, statute, fiscal year, and object code.

    • Certification – signature of the person authorized to sign the purchase document.

    • Self invoicing – the contract/delegation POPurchase Order may be used as a self-invoicing form. Vendors may return “copy 1” as the invoice after completing the “self-invoicing” requirements.

22030.6.3 Subpurchase Order

• A “subpurchase order” is used to order merchandise where the total cost is less than $100, and for the type of items listed below. A PIN Stock Item number is not needed. Small and minority-owned business shall be vigorously sought when placing subpurchase orders.

• Additional items in the “subpurchase order” category:

  • Without monetary limits.

    • Purchases from CALPIACalifornia Prison Industry Authority (formerly PIA).

    • Purchases from the State Educational Agency for Surplus Property Subsistence.

    • Purchases from the DGSDepartment of General Services, Surplus Property.

    • Purchases of excess personal property from the federal government by qualified state agencies.

    • Inter-agency purchases.

  • Special monetary limit – less than $10,000.

    • Intravenous solutions.

    • Cadavers and live laboratory animals.

    • Prosthetic devices.

    • Purchases of books, educational films, and film strips, Library of Congress cards, film slides (35 mm, 2 x 2, etc.), microscopic slides, reproduction of art objects and paintings, phonographic records, prerecorded tapes, publications, periodicals, sheet music, test and examination booklets (such as education aptitude, achievement, personality, etc.), maps and aerial photograph (cost of publications only, not cost of preparation), and copies of documentary material prepared by governmental agencies.

  • Special monetary limit – $1,000.

    • Ice.

    • Bottled drinking water or distilled water when it has been determined that the building water supply is not fit for human consumption, or when the cost of connecting a drinking fountain to the building water supply renders it impractical (No other purchases of bottled drinking water shall be made).

22030.6.3.1 Data Requirements

• The data requirements for subpurchases order using a STDStandard Form (DGS) Form 65 are as follows:

  • Area of “Contract/Delegation Purchase Order”

    • Agency billing code – enter the correct agency billing code.

    • Contract/delegation number – not required.

    • Ship to – enter address to which merchandise shall be delivered.

    • Bill to – enter name and address of unit receiving the invoice or statement.

    • Date – enter the date the order is prepared. The month, day, and year shall be indicated with two digits (e.g., January 15, 1990 as 0115.90).

    • Agency order number – enter the appropriate agency order number, from left to right.

    • Firm address – enter name, address and contact person of the vendor.

    • Vendor number – enter appropriate number, if available.

    • Small business (S/B) code – enter the appropriate information when a vendor number is not available.

    • S = small business.

    • Blank = not small business or unknown shall be counted as a large business

    • Ethnic code (ETH) – furnish the appropriate information when a vendor number is not available. Enter only one of the following numbers and letters:

      	Male	Female
      Black	1	A
      BAsian	2	B
      Other	3	C
      Spanish-Speaking/Surnamed	4	D
      White	5	E
      Polynesian	6	F
      American Indian or Alaskan Native	7	G
      Filipino	8	H
      Unknown	Blank	Blank

    • Date wanted – enter the delivery date material is expected (e.g., 30 days ARO shall be converted to an exact delivery date). ASAP shall not be used in any case.

    • Ship by – used to indicate special handling or a specific method of transportation.

    • Terms – enter the discount the vendor may give to ensure timely invoice payment.

    • Quantity – enter the appropriate quantity needed.

    • Unit – enter the 2-digit unit of measure (e.g., EA, DZ, PG, etc.).

    • Stock item number – not required.

    • Description – enter the appropriate description for the item being ordered that includes the color, size, part number, name, etc.

    • Unit price – enter the unit price that corresponds to the order unit.

    • Extension – enter the extended price which is quantity times the unit price.

    • FOB – enter FOB destination.

    • Sales tax – enter the sales tax required for the purchase of materials.

    • Total – enter the total cost of the order. Include the subtotals from all continuation pages (STDStandard Form (DGS) Form 65A) when they are included in one agency number.

    • Charge against – enter the program number, index code, fund title, item number, chapter number, statute, fiscal year, and object code.

    • Certification – signature of the person authorized to sign the purchase document.

22030.6.4 Delegated Purchase Program

• The Office of Procurement has delegated to the Department the authority to make individual purchases up to either $2,500, $5,000, or $9,999.99 excluding sales tax and freight charges. The amount of the monetary limit depends on the results of each organization’s delegated purchase program audit. The departmental organizations listed below have been granted delegated purchase program authority:

  • Each prison/institution.

  • P&CSDParole & Community Services Division (see DAPO).

  • CALPIACalifornia Prison Industry Authority (formerly PIA).

  • ASDSee Division of Administrative Services (DAS) (see ASB).

22030.6.4.1 Program Requirements

• The requirements of the delegated purchase program are as follows:

  • All purchases shall be made in compliance with the published Materials Management Handbook developed by the Department.

  • Competitive purchases from responsible vendors shall be made to obtain materials that are properly suited to the needs of the Department both in terms of price and quality.

  • At least 25 percent of the dollar value of delegation orders shall be placed with small businesses.

  • Purchases shall not exceed the monetary limit of the authority. The monetary limit of the authority ($2,500, $5,000, or $9,999.99) is for each group/class commodity on an order. When multiple group/classes are ordered from a vendor, the total dollar value of each order cannot exceed the $9,999.99 authority limit.

  • Delegation orders shall not be split to circumvent expenditure limitations.

  • Purchases made under the delegation shall be listed on a Contract/Delegation Purchase Order. The STDStandard Form (DGS) Form 65 shall indicate the delegation number, the agency billing code, the PIN stock item number for each item and the small business identification code for the vendor.

  • Delegation holders shall forward copies of all delegation orders to the Office of Procurement on a weekly basis.

  • Auditable copies of all delegation orders shall be maintained on file and made available to the Office of Procurement upon request.

  • When appropriate, the Department shall obtain the approval of other state departments or divisions before issuing a delegation order.

    • For purchases of filing and/or microfilm equipment, necessary approvals shall be secured from the Department records management analyst in the Headquarters, Business Services Unit.

    • For the repair of motor vehicles, authorization shall be secured from the DGSDepartment of General Services’ Fleet Administration Division. The permission granted to repair motor vehicles does not authorize the Department to exceed the monetary limit of the Delegated Purchase Program for these expenses.

    • For EDPElectronic Data Processing (see IT) equipment and software, necessary approvals shall be secured from the Department Management Information System Committee, the Deputy Director, ASDSee Division of Administrative Services (DAS) (see ASB), and the Office of Information Technology, DOFDepartment Of Finance.

  • Shall Not

    • The following commodities shall not be purchased using the Delegated Purchase Program:

      • Passenger motor vehicles.

      • Trucks.

      • Tractors, tracked.

      • Tractors, wheeled.

      • Photocopiers (photocopiers in workload 1 and 2 can be purchased under delegation).

      • Earth moving equipment (e.g., grader, loader, etc.).

      • Warehouse trucks, forklifts.

      • Word processors.

      • Personal computers.

      • Carpeting.

      • Draperies.

      • Typewriters, electronic, including memory style.

      • Labels, foil printed and metal property tags.

      • Soft body armor.

      • Alcoholic beverage

22030.6.4.2 Price Quotes

• For all purchases over $100 but less than $500 using the Delegated Purchase Program, two price quotes shall be sought (from the vendor awarded the order and an alternate). For all purchases of $500 and above, a minimum of two price quotes from competitive vendors shall be secured. A copy of the price quotes shall be indicated on or attached to the audit copy of the delegation order. When the commodity to be purchased is proprietary (sole source), no quotes are necessary. However, a statement concerning the nature of the purchase (why it is proprietary) shall be included in the file. Items available through a state contract, and state price schedules, including CALPIACalifornia Prison Industry Authority (formerly PIA), may not be purchased under this delegation.

• Bids shall be solicited on a cost per item basis. When established price lists are available, percentage discounts shall be used to determine the most competitive vendor.

• A price quote that remains unchanged in a time period, not to exceed three months, can be used as a bid for repetitively purchased items. A single price quote can be used in lieu of frequent and redundant phone quotes each time the item is ordered during this time period.

22030.6.4.3 Emergency Purchases

• In the event of emergencies, when it is necessary to buy material in excess of the monetary limits, the following process shall be used:

  • The staff desiring to make the purchase shall contact the nearest DGSDepartment of General Services, Office of Procurement, and request emergency purchasing authority. An explanation shall be furnished regarding the circumstances surrounding the emergency and a complete description of the material, price, and source of supply. The Office of Procurement buyer receiving the request shall review the circumstances and, if warranted, a GSOPGeneral Services Office of Procurement Form 42, Authorization to Exceed Monetary Limits of SAMState Administrative Manual 3571.1, shall be issued.

  • In the event that it is impossible or impractical to contact the DGSDepartment of General Services, Office of Procurement, the Department shall proceed with the purchase without prior approval by the Office of Procurement. However, the Department, within five working days, shall notify the Office of Procurement of the action taken and the circumstances necessitating the action. After review and determination by the Office of Procurement that such action was warranted, a GSOPGeneral Services Office of Procurement Form 42 shall be prepared and forwarded to the unit initiating the order.

  • During any period of a natural disaster (earthquake, fire, and/or flood) the unit charged with the emergency services support shall process emergency orders. The purchase document and justification shall be submitted to the Office of Procurement within 30 days after the termination of the disaster but no more than 60 days after the emergency order was made. After review and determination by the Office of Procurement that such action was warranted, a GSOPGeneral Services Office of Procurement Form 42 shall be prepared and forwarded to the facility making the purchase.

  • Copies of the GSOPGeneral Services Office of Procurement Form 42 shall be attached to the copies of the contract/delegation purchase order which departmental staff shall prepare to complete the transaction. All such purchase orders shall be clearly identified and marked “Emergency.”

22030.6.4.4 Material Services Section (MSS) Items

• Items available from the DGSDepartment of General Services, MSSMaterial Services Section, shall be purchased from local vendors using the Delegated Purchase Program only when the following conditions are met:

  • MSSMaterial Services Section is out of stock (indicated by a back order notice).

  • The need for the item is immediate and the need can be substantiated.

• A delegated purchase order shall be used to purchase a 30-day interim supply of items not to exceed the monetary limits of the delegated authority. However, the audit copy of the delegation order shall be clearly marked with a statement referring to the MSSMaterial Services Section stock outage and affixed with a copy of the back order notice.

22030.6.4.5 Annual Audit

• Each Delegated Purchase Program shall be audited annually by the Office of Procurement to determine whether the conditions and requirements of the program are being met. Renewal of the Delegated Purchase Program shall depend on the effectiveness of the current procurement and materials management programs.

22030.6.4.6 Data Requirements

• The data requirements for orders under the Delegated Purchase Program are as follows:

  • Area of “Contract/Delegation Purchase Order”

    • Agency billing code – enter the correct agency billing code.

    • Contract/delegation number – enter the delegation number assigned by the Office of Procurement from left to right.

    • Ship to – enter address to which merchandise shall be delivered.

    • Bill to – enter name and address of the unit to receive the invoice or statement.

    • Date – enter the date the order is prepared. The month, day, and year shall be indicated with two digits (e.g., July 17, 1990 as 07 17 90).

    • Agency order number – enter the appropriate agency order number, an internal control number, from left to right.

    • Firm address – enter the name, address and phone number of vendor contact person.

    • Vendor number – enter the appropriate number. When a vendor is not known or available, leave blank and continue with the small business and ethnic codes.

    • Small business (S/B) code – enter the appropriate information when a vendor number is not available.

    • S = small business.

    • Blank = not small business or unknown shall be counted as a large business

    • Ethnic code (ETH) – furnish the appropriate information when a vendor number is not available. Enter only one of the following numbers and letters:

      	Male	Female
      Black	1	A
      Asian	2	B
      Other	3	C
      Spanish-Speaking/Surnamed	4	D
      White	5	E
      Polynesian	6	F
      American Indian or Alaskan Native	7	G
      Filipino	8	H
      Unknown	Blank	Blank

    • Date wanted – enter the delivery date materials are expected (e.g., 30 days ARO shall be converted to an exact delivery date). ASAP shall not be used in any case.

    • Ship by – used to indicate special handling or a specific method of transportation.

    • Terms – enter the discount the vendor shall give to ensure timely invoice payment.

    • Quantity – enter the appropriate quantity needed.

    • Unit – enter the two digit unit of measure (e.g., EA, DZ, PG, etc.).

    • Stock item number – enter the four digit group/class number. A complete 12-digit PIN stock item number may be used but is not required.

    • Description – enter the appropriate description for the item being ordered that is found in the PIN Stock Item Catalog. The “key noun” shall be the first descriptor used, followed by more detailed description.

    • Unit price – enter the unit price that corresponds to the order unit.

    • Extension – enter the extended price which is quantity times the unit price.

    • FOB – to be determined at the time quotes are obtained. Request “FOB destination” whenever possible.

    • Sales tax – enter the sales tax required for the purchase of materials.

    • Total – enter the total cost of the order. Include the subtotals from all continuation pages STDStandard Form (DGS) Form 65A when they are included in one agency order number.

    • Charge against – enter the program number, index code, fund title, item number, chapter number, statute, fiscal year, and object code.

    • Certification – signature of the person authorized to sign the purchase document.

22030.7 Material Services Section Supply Order

• The DGSDepartment of General Services, MSSMaterial Services Section, operates a materials distribution system and carries a stock of commonly used items in warehouses in Sacramento, North Highlands, and Fullerton, California. These items include stationery, standard state and departmental forms, housekeeping and janitorial items, and other general use commodities. MSSMaterial Services Section issues a catalog, special supplements, and interim revisions listing and describing all available stock items and providing information necessary for requisitioning commodities from MSSMaterial Services Section. Periodically, MSSMaterial Services Section issues a supplemental price list of all inventory items.

• A STDStandard Form (DGS) Form 116, Supply Order is the document used to order items from MSSMaterial Services Section. Supply orders may be forwarded to the nearest MSSMaterial Services Section warehouse or to

  • Material Services Section, P.O. Box 1015, North Highlands, CACorrectional Administrators 95660.

  • All supply orders are input into the DGSDepartment of General Services EDPElectronic Data Processing (see IT) system for the filling of orders or in the case of stock-outs, back order notices.

• When departmental staff receive back order notices, permission is granted to purchase an interim supply (30 days) of materials from local vendors. A copy of the notice of back order shall be affixed to the file copy of the purchase order to document the necessity for the interim purchase from a source other than MSSMaterial Services Section.

• A second circumstance for purchasing items from local vendors that are also offered by MSSMaterial Services Section is when the price of an item is significantly lower than the price offered by MSSMaterial Services Section. Department staff shall notify the MSSMaterial Services Section in writing of the intent to purchase these items (not to exceed the delegation limit). Within two working days after receipt of the request, MSSMaterial Services Section shall respond with approval or disapproval. All requests shall be sent to:

  • Materials Services Section Attention: Materials Manager P.O. Box 1015 North Highlands, CACorrectional Administrators 95660

    • Following the instructions printed on the STDStandard Form (DGS) Form 116 regarding typing and distribution. Do not place more than 12 items on each order. Do not combine forms, publications, and supplies on the same order.

• Retain a copy of the STDStandard Form (DGS) Form 116 to use as a stock received report. Record the date and quantity of merchandise received and route to the accounting office for payment. Retain a copy for your files.

• See Section 5 in the Materials Services Catalog when ordering publications. When ordering publications from MSSMaterial Services Section, address the order as follows:

  • Office of Procurement Publications Section P.O. Box 1015 North Highlands, CACorrectional Administrators 95660

22030.7.1 Data Requirements

• The data requirements for purchases from MSSMaterial Services Section are as follows:

  • Area of “Supply Order”

    • Ship stock to – enter address to which merchandise shall be delivered.

    • Send invoice to – enter name and address of unit receiving the invoice.

    • Signature of officer authorizing expenditure – signature of person authorized to sign a supply order.

    • Agency contact – enter name and phone number of person Materials Services Section shall contact regarding the order.

    • Date – enter the date the order is prepared.

    • Agency billing code – enter correct agency billing code.

    • Agency reference number – enter the unit’s internal control number, if possible.

    • Back order instructions – enter a mark to receive back-ordered material. No back order shall be processed when the box is unmarked.

    • Stock number – enter the stock item number found in the DGSDepartment of General Services’ Materials Services Catalog.

    • Catalog description – enter description as written in the DGSDepartment of General Services’ Materials Services Catalog.

    • Unit price – enter the unit price shown in Section 7 of the Materials Services Catalog.

    • Price extension – enter the extended price. (The unit price times the quantity equals the extended price.) Unit – use the abbreviations listed in the Materials Services Catalog.

    • Quantity – enter amount desired.

22030.8 Purchase Estimate

• The DGSDepartment of General Services, Office of Procurement, operates a centralized purchasing unit to achieve standardization, to eliminate duplication of effort and to lower prices as a result of volume buying. The Office of Procurement shall also provide effective means of acquiring equipment whether the acquisition is to be made by purchase through non-purchasing techniques (e.g., lease – conditional sales contract).

• The Department shall use the services of the Office of Procurement to competitively purchase the following:

  • Items not available from MSSMaterial Services Section, state contracts, or state price schedules.

  • Orders that exceed the monetary spending limits of the Delegated Purchase Program.

  • Food that is included in the quarterly food order.

  • Materials that require technical specifications or special requirements.

  • Equipment or other high cost items that result in reduced costs when purchased by “formal” bid.

• For purchases requiring the services of the Office of Procurement, a STDStandard Form (DGS) Form 66, PE and, when necessary, a STDStandard Form (DGS) Form 10, PE Continuation shall be used to list all ordered items. All PEs shall be typed. The original of the PE, with the required signatures of approval, shall be sent to the Office of Procurement for processing.

• Prior Approval of Another Agency

  • Do not submit purchase estimates directly to the Office of Procurement that require prior approval of another agency. Submit these estimates to the approving agencies first. Refer to the PIN Stock Item Catalog for the list of these agencies and the commodities that need prior approval. For purchases of filing and/or microfilm equipment, necessary approvals shall be secured from the Department records management analyst in the Headquarters BSS.

• Accuracy and Clarity

  • Department personnel who submit purchase estimates shall make every possible effort to ensure that these documents are not forwarded to the Office of Procurement until they have been thoroughly reviewed for accuracy and clarity.

• Specifications

  • The Specification and Quality Control Section staff of the Office of Procurement can assist Department personnel in the preparation of the description and specification of the purchase requirements. Copies of standard specifications are available upon request and assistance is available for developing descriptions of non-standard commodities. Contact the Specifications and Quality Control Section at (916) 445-0957/ATSS 485-0957 for referral to the appropriate analyst.

22030.8.1 Data Requirements

• The purchase estimate data requirements are as follows:

  • Area of “Purchase Estimate” Date prepared by agency – enter the date the PE was typed. Enter two digits in each field (e.g., September 10, 1990 shall be entered as 09 10 90).

  • Date stock wanted – this is an optional field; however, departmental staff shall enter a specific date to determine the order processing time that is reflected in inventory control supply levels, if applicable. Enter two digits for each field. Allow an adequate lead time when determining the date of delivery. The following is the recommended ordering and shipping time (OST) that shall be used for purchase estimates:

    	Amount of	Purchase
    	Up to $10,000	Over $10,000
    Internal Processing	20 days	20 days
    Special Approval/Authorization	21 days	21 days
    Office of Procurement Processing	30 days	60 days
    Specifications Review	10 days	15 days
    Purchase Order Preparation	5 days	5 days
    Vendor Shipping Time	60 days	60 days
    Total OST	146 days	181 days

  • The Department shall anticipate a lengthy OST when using this “formal” method of ordering.

  • Agency billing code – enter the appropriate agency billing code. Use only one agency billing code per estimate.

  • Purchase estimate number – use a unique estimate number designed to eliminate duplication. The remainder of the purchase estimate number provides a maximum of 15 alpha/numeric positions in which to enter each requesting unit’s reference number. The estimate or reference number shall not be duplicated in a fiscal year.

  • Page number – enter the purchase estimate page number and total number of pages. Page numbers shall be shown with two digits (e.g., page 01 of 05, 02 of 05, etc.). Do not number pages that do not have stock item numbers or codes.

  • Do not enter the page number on the purchase estimate continuation if it is used only to furnish additional description or instructions from the previous page. For example, on a two-page purchase estimate, the first page would be numbered as page 01 of 01. (The second page would not show a page number.) However, enter the page number on the continuation page when an item is listed and other required information is stated. For example, on a two-page purchase estimate, the second page would be numbered as page 02 of 02.

  • Delivery location code – circle the appropriate code which corresponds to the delivery location shown on the State of California 11 – Area Map. Multiple delivery locations may be submitted on one estimate when only one agency billing code is used.

  • Procurement Office – do not fill in this information.

  • Vendor number – enter a reference vendor. Normally, the vendor who received the previous order and provided adequate service or assistance shall be listed as the reference vendor. (All reference vendors are automatically sent invitations to bid.) Indicate the vendor’s name, address, and phone number and the name of the person authorized to provide price quotes.

  • Agency contact – enter the name and phone number of the Department representative with the most knowledge of the uses and requirements of the ordered items whom buyers may contact for additional information. Do not enter the vendor name or phone number in this space.

  • Line number – each page of a purchase estimate (including the continuation pages) is limited to a maximum of nine stock items which shall be numbered sequentially beginning with number one on each page. Enter a single digit number for each stock item listed, from 1, 2, 3, etc., up to 9. The first item on each continuation page shall always begin with number one and shall not exceed nine items per page.

  • Quantity – enter the quantity wanted in this column. Do not enter fractions, decimals, or commas. Always check the order unit and packaging requirements, and adjust the quantity accordingly. Quantity ordered shall correspond with the order unit and unit price.

  • Unit – enter unit exactly as indicated in the PIN Stock Item Catalog, except when the unit is indicated as VA. The order unit shall vary on some commodities; this is indicated by a VA in the unit column of the PIN Stock Item Catalog. In such instances, specify the appropriate unit code from the order unit table listed on the front page of the PIN Stock Item Catalog.

  • Stock item number – enter the 12-digit stock item number exactly as indicated in the PIN Stock Item Catalog. Potential vendors are invited to submit bids for the items listed on the PE when the PIN stock item number is input into the computerized vendor/stock item number file. Do not use ditto marks to repeat identical stock item numbers. Neatly underline and draw arrows down columns to note repetition of stock item numbers.

  • Each page of the PE shall contain only one group of items (the first two numbers of the stock item number). The only exceptions are:

    • When the order is for the purchase of a system, where the components are in different groups and are to be purchased together because the components must match and inter-member.

    • For the purchase of individual items that fall into different groups.

  • Continuation pages (STDStandard Form (DGS) Form 10) shall be used to list items having multiple group numbers. “Ship to” and “charge to” addresses, the reference vendor, and the delivery date if critical or unusual shall be shown on each estimate page.

  • Description – enter exactly the description provided in the PIN Stock Item Catalog. The key noun description is input into the PIN computerized system to determine whether the description/stock item number matches exactly to detect errors prior to the bid process.

  • All items shall be completely described and whenever possible a brand and corresponding catalog number shall be referenced with the notation or comparable. A complete description shall include the name of the item plus any of the following that apply:

    • Size.

    • Dimension.

    • Grade.

    • Weight.

    • Color(s).

    • The minimum acceptable technical specifications.

    • Packaging requirements.

    • Samples (in the case of forms).

    • A kit package listing of each component.

    • Installation dimensions if restrictions exist.

    • Inter-member item description of existing materials.

  • The brand referenced on the purchase estimate shall meet all required specifications. When reasonable, list all acceptable brands on the purchase estimate. Also, all unacceptable brands can be listed. It may be stipulated that alternate brands shall be submitted for evaluation prior to the awarding of the bid.

  • Unit price – always enter the unit price and extension for each item listed. The unit price shall correspond to the order unit. For example, if the order unit is gross, show the unit price per gross – not some other unit such as per dozen. Do not enter commas in this column. Align the unit price with the first line of the commodity description.

  • Subtotal – on single page estimates a subtotal is not necessary. On multiple page estimates, enter a subtotal on each page.

  • Tax and total – on single page estimates, enter the tax and total in appropriate boxes on the estimate. On multiple page estimates, enter the tax and total only on the first page of the estimate and subtotals on each continuation page.

  • Signature block – at least one original signature is required by the Office of Procurement to process estimates.

  • Charge code – enter the index number, object code, appropriation, item number, current fiscal year’s chapter number, fiscal year, and ending date of the current fiscal year.

  • Do funds expire – it shall be indicated on the purchase estimate whether funds expire at the end of the current fiscal year. Either:

  • Check yes or no in the appropriate block printed on the lower right-hand corner of the purchase estimate form; or

  • Type/stamp on the first page in bold letter, FUNDS EXPIRE ____________ or CONTINUING FUNDS if funds do not expire at the end of the current fiscal year.

22030.8.2 Purchase Estimate Description Restricting Bidding

• PEs referencing only one brand or containing specifications which have the effect of limiting or restricting bidding to one brand shall be justified by the requesting unit in a statement fully explaining why the product specified is necessary. This statement shall include at least the following:

  • The unique performance factors of the product specified.

  • The reason these specific factors are required.

  • What other products have been examined and rejected and why.

• Purchase requests submitted without adequate information in support of limiting competitive bidding shall be returned to the requesting unit.

22030.8.3 Purchase Estimate Requesting Sole Source

• The requirements listed in the DOMDepartment Operations Manual 22030.8.2 apply to sole source purchases where an item is available from only one vendor, or when the requestor wants to restrict the purchase to only one vendor.

22030.8.4 Non‑Competitive Repair Parts

• PEs for repair parts of a specific brand or type shall contain the following justification:

  • Why only one brand or part can be used to repair the equipment.

  • Whether the specified brand of repair parts is available from only the manufacturer or distributor.

22030.8.5 Non‑Competitive Equipment to Inter‑Member with Existing Equipment

• PEs for equipment of a specific brand or type to be used with equipment shall contain the following justification:

  • The quantity and value of existing equipment or parts currently on hand to be interfaced.

  • Why it is necessary that the requested equipment or parts be the same as currently owned.

22030.8.6 Pin Stock Item System

• The ability to properly complete the STDStandard Form (DGS) Form 66, PE, depends entirely on a full understanding of the PIN stock item system and the PE form.

22030.8.6.1 Stock Item Number

• The single most important element in the entire materials management system is the stock item number. A single, unique stock item number is assigned to each specific item of material used by the state.

• Stock item numbers are 12-digit numbers that are based on the federal classification and stock numbering system. A typical stock item number looks like 7920-292-2367-8. The groups of numbers represent the following:

  • First four digits – group and class of a commodity such as food, medical supplies, stationery, etc..

  • Next seven digits – specific item numbers are serially assigned with no numerical relationship between one identification number and the next in sequence.

  • Final digit – computer check or verification number.

• The 12-digit stock item numbers shall be used by all ordering units.

22030.8.6.2 Pin Stock Item Catalog

• The PIN Stock Item Catalog is a listing by stock item number and description of commodities purchased by the state on a regular basis. Products are classified in group and class number sequence; commodities within each class are listed in alphabetical key noun order. Currently, 60,000 items are listed.

• Other information contained in the PIN Stock Item Catalog is the following data:

  • Description – the stock item description field consists of a maximum of 54 characters of information which describes each stock item. The first word in the stock item description is the key noun.

• This is the noun that most accurately identifies the nature of the product (e.g., drill electric, not electric drill). All commodities are listed in alphabetical key noun sequence within each class.

  • Order unit – this is a two-character field which describes the unit of measure by which each stock item shall be ordered [e.g., EA (each), DZ (dozen), YD (yard), RL (roll), BX (box), etc.]. Refer to the order unit table listed on the front page of the PIN Stock Item Catalog.

  • Source code – this is a one-character field that indicates the usual source or method for acquiring a given stock item. The various codes and their meaning are as follows:

    A:	Office of Procurement (PE is required on all A source code items) and delegated purchase program orders.
    B:	OSPOffice of State Publishing and Office of Support Services printing orders.
    C:	MSSMaterial Services Section stock items.
    D:	Statewide contract stock items.
    E:	Limited contract stock items.
    F:	SPSState Price Schedule stock items.
    I:	CALPIACalifornia Prison Industry Authority (formerly PIA) stock items.
    M:	SPSState Price Schedule competitively bid items.

  • Special code – this is a two-character field which identifies those stock items covered by detailed product specifications. The coding scheme is as follows:

    1-99	State specifications.
    A	Federal specifications.
    B	Commodity standard.
    C	Supply operations commodity standard (SOCS).
    D	Bid specifications.
    E	Acceptable brands list.
    F	Special/other.

• Locate a Number

  • There are several ways to locate a stock item number in the PIN Stock Item Catalog:

    • Refer to the alphabetical product listing “Index to New State Materials-Classification Catalog” in the State Materials Classification (SMC) Catalog. This index lists general categories of frequently purchased products and the SMC group number. It may be used to determine the correct SMC group number for a related product. For example, although a credenza is not specifically listed, the appropriate group may be located by referring to “furniture, most types.” The key noun for each stock item is usually based on what that item is rather than its use.

    • Refer to the PIN Stock Item Catalog Index (on the front pages of the catalog) to locate the corresponding group. Next, locate the proper group class. The group and class shall provide the page number within the PIN Stock Item Catalog where a specific stock item and its number shall be found.

    • Refer to the listing of commodities by key noun in the back of the catalog. This is a listing of items in the PIN Stock Item Catalog in alphabetical order by key noun.

• Many commodity descriptions in the PIN Stock Item Catalog are very brief and may not be complete. Therefore, additional descriptive information shall be added as required in preparing the purchase order (e.g., color, size, dimensions, packaging, etc.). Except for additions to the description, no other changes or deletions shall be accepted.

22030.8.6.3 Availability of Pin Stock Item Catalog

• PIN Stock Item Catalogs are available as follows:

  Form	Contact
  Book (revision 1983 in three-ring border)	Office of Procurement Materials Management Unit 4675 Watt Avenue North Hightlands, CACorrectional Administrators 95660 (916) 973-3726 or ATSS 480-3726
  Microfiche	Office of Procurement Materials Management Unit (916) 973-3726 or ATSS 480-3726 This init also mentions a subscription list for updates of microfiche.

22030.8.7 Purchase Estimate Changes

• After the PE has been sent to the Office of Procurement, amendments to the PE may have to be made. A STDStandard Form (DGS) Form 96, Purchase Order (POPurchase Order) Alteration, is used to amend PEs when requested by the Office of Procurement, DGSDepartment of General Services, for specific estimates or when:

  (a) the cost is	(b) the amendment is	(c) and exceeds the estimate costs by
  Less than $1,000	$100 or more	25% or more
  $1,000 – $4,999	$250 or more	10% or more
  $5,000 or more	$500 or more	–

• To check the current status of a purchase estimate submitted to the Office of Procurement, contact Procurement’s Central Records at (916) 445-6241/ATSS 485-6241. The buyer shall not be contacted unless absolutely necessary, and only after calling Central Records.

22030.8.8 Purchase Order Changes

• POPurchase Order Alteration Required

  • Once a POPurchase Order has been issued to a vendor by the Office of Procurement, changes are not permitted unless authorized by the Office of Procurement. A STDStandard Form (DGS) Form 96, shall be submitted to the Office of Procurement buyer who signed the original POPurchase Order in the following instances:

    • Change in FOB point.

    • Change in terms if unfavorable to the state.

    • Change in the estimate number.

    • Change in the vendor’s name (except simple spelling corrections).

    • Increase in unit price.

    • Mathematical error over $10.

    • Addition or cancellation of any item.

    • Change in description, specifications, or substitution of any material.

    • Extension of time on “as needed” or “as required” orders. Such orders are written for units of material as required or as needed for a specific period of time (The extension of this time is what would require a POPurchase Order change).

    • Adding or changing a priority rating or certification.

    • Any overdraft of a POPurchase Order except as permitted below.

• POPurchase Order Alteration not Required

  • POPurchase Order changes are not required when:

    • Prices billed are less than the POPurchase Order amount.

    • Weight, quantity, or unit price is less than what is stated on the POPurchase Order.

    • At the time of taking a final delivery there is a balance remaining on the POPurchase Order and the final delivery does not overrun the POPurchase Order by more than 10 percent (This would apply to such items as yardage; steel; lumber; rock; asphalt; products like forms, cartons, etc. produced from roll paper stock; and other items when exact quantity is not known at the time the order is placed, including items that come in standard containers).

    • Delivery of items such as fresh vegetables varies from the weight, quantity, or count specified on the POPurchase Order (not to exceed plus or minus 10 percent of the value of the total POPurchase Order up to $1,000).

    • POPurchase Order specifies certain sized containers but other containers, which are acceptable, are delivered in their place but the total quantity and unit cost are within the limits of the POPurchase Order.

22030.9 Service and Expense Order

• Services for repair, rental of equipment, classroom space, and other minor services from private vendors, costing less than $500, can be obtained by using a CDC Form 1063, Service and Expense Order. This form shall be used in lieu of the STDStandard Form (DGS) Form 2, Standard Agreement. Prior to any service being performed and expenses incurred, approval in writing shall be obtained from business management staff. Services performed may require labor and materials. Transactions with less than 10 percent labor charges are purchases and shall be obtained on either a subpurchase or delegated purchase program order. Transactions with greater than 50 percent labor charges are services and can be obtained using the service and expense order form. Transactions with labor charges between 10 percent and 50 percent require consultation with an Office of Procurement formal bid buyer to determine the appropriate method for acquisition.

• Services of a minor nature normally do not require competitive bidding, but staff shall identify and employ cost effective methods when contracting for services from private vendors.

• General use mobile equipment (GUMEGeneral Use Mobile Equipment) having an original purchase price of $25,000 or more shall not be rented or leased from a non-state source without prior approval of the DGSDepartment of General Services, Office of Fleet Administration, after a determination that comparable state-owned equipment is not available. If obtaining such approval would endanger life or property, the transaction and justification for not having sought prior approval shall be reported immediately thereafter to the DGSDepartment of General Services. GUMEGeneral Use Mobile Equipment is defined as equipment listed in the GUMEGeneral Use Mobile Equipment inventory of the state equipment council as capable of being used by more than one agency.

22030.9.1 Data Requirements

• The data requirements for Service and Expense Order are as follows:

  • Area of “Service and Expense Order”

    • Vendor – enter the vendor name and vendor contact providing the service.

    • Bill to – enter name of facility receiving the service and name of the person the vendor is to contact.

    • S and E number – enter the unit’s service order number.

    • Work order number – optional field. When possible, reference a maintenance work order.

    • Date – enter the date the order is prepared.

    • Nature of service and expense – enter the type of expense to be incurred.

    • Location where expense to occur – enter the building number or address where the service shall be performed.

    • Start date/completion date – enter the appropriate dates (for monitoring purposes).

    • Work to be performed – enter a full description of what is to be accomplished, including the number of hours of labor.

    • Description and cost of parts – a detailed listing of parts and materials to be obtained from the vendor.

    • Accounting requirements – to be entered by accounting office staff.

    • Signature/title – signature of person authorized to sign the service and expense order. The purchasing manager or designee is the appropriate person.

22030.10 Inventory Management

• Proper inventory management minimizes the investment in inventory stock and helps maintain a stated service level objective.

22030.10.1 Stock Records

• The responsible unit shall maintain stock records on all items that are stored in the support services and maintenance warehouses. In addition, unit stock records shall be maintained for materials being warehoused in other storerooms and supply shops that exceed a working stock (30 day) supply and collectively meet any of the following criteria:

  • Gross floor space used exceeds 4,000 square feet.

  • Average annual inventory investment in expendable goods exceeds $50,000.

  • Annual issues of expendable goods exceeds $100,000.

  • Inventory consists of 400 or more stock items.

• Records Maintained

  • Stock records shall be maintained by using a manual card or computerized inventory control system. The STDStandard Form (DGS) Form 119, Stock Control Record, is available for use as a manual stock record card in recording information dealing with the management and control of warehouse inventories. This or a similar record card shall be used in all warehouses when a manual system is the only means of control. If a computerized inventory management system is used, the system shall provide the same information and data required on a stock record card.

  • The stock record, which serves as a joint purchasing/financial/ operational record, shall be kept current and accurate at all times. Stock Control Record cards are available from the Office of Procurement, MSSMaterial Services Section.

22030.10.1.1 Data Requirements

• The data requirements for the Stock Control Record card are as follows:

  • Area of “Sample Stock Control Record for Minimum/Maximum Stock Item”

  • Miscellaneous information – any miscellaneous information that is pertinent and not included in other specific sections of the stock control record shall be entered here. This information might concern minimum order or standard packs, key personnel to contact, vendor name and address, phone numbers, emergency sources of supply, or any other supplemental entry which alerts the inventory control staff of circumstances requiring attention.

  • Date – a complete history shall be established and kept current for each item that is stocked in a warehouse. The date is used in forecasting stock levels, reconciling procurement problems, confirming demands and issues, documenting physical inventories, etc.. The month, day, and year shall be entered for all transactions affecting the item, such as stock orders, stock receipts, demands and issues (non-recurring and recurring), dates of inventories, and audits.

  • Issued to or received from – this section serves a dual purpose. Record the name of the facility, unit, program, etc., to which stock is issued and/or the name of suppliers from whom stock is received. Continued activity of an item over a period of time shall provide inventory control staff and unit administrators with a use pattern which shall assist in inventory planning. This column shall also reflects those facilities that are consistent in their withdrawals as well as identify those vendors which are the most reliable.

  • Order document number – those transactions that pertain to stock issues and stock receipts shall be documented using the identifying order number. The forms that are commonly used to replenish stock for warehouses are contract/delegation purchase order, subpurchase order, supply order, and purchase estimate.

  • On order – this column shall be used whenever a stock replenishment order is placed. The quantity requested is the only entry to be made.

  • Demand – is any request for an item. Demand history provides the information necessary to decide what to stock; therefore, all demands, regardless of whether stocks are issued, shall be recorded. Each space in the demand column shall be used for a single demand.

  • Issues – the quantity issued for each demand shall be carefully and accurately entered as this directly reduces the calculated balance on hand (column 8). Occasionally, demands are made for depleted stocks. The demand shall be shown in the proper space and the quantity issued entered as zero.

  • Quantity received (+) – the quantity received (+) column is used to record the amounts or quantities of stock received as a result of a prior order. These incoming stocks shall normally be for inventory replenishment but in some cases stock relocations shall also be shown in the quantity received column.

  • The balance on hand (column 8) shall be adjusted whenever quantity received entries are made.

  • Quantity issued (-) – at any time an issue is shown in either the non-recurring or recurring columns, the total quantity issued (sum of both) shall be entered in the quantity issued (-) column. That amount shall be subtracted from the previous balance on hand and the new balance entered.

  • Balance on hand – the inventory balance on hand, both the actual bin count and the calculated balance, is the key indicator in managing inventory stock efficiently. To prevent inventories that are excessive or too low, the balance on hand shall be used to:

    • Determine when to replenish stock.

    • Identify long supply.

    • Maintain stock accountability.

    • Evaluate the efficiency of warehouse operations.

    • Balance on hand entries shall be current and accurate. Stock acquisitions and issues shall be promptly recorded on the stock control record and the balance on hand adjusted accordingly. Physical inventories which reveal a difference in the actual bin count versus the calculated balance shall be reconciled when the inventory is taken and the stock control record balance on hand changed to reflect the actual inventory in stock.

  • In long supply – long supply shall be reduced to the lowest level possible. This column provides a space to record long supply so that efforts can be undertaken to reduce it.

  • Days of supply – the days of supply shall be entered as shown in the examples of the minimum/maximum (MINMinimum/MAX) and requisitioning objective (R/O) stock records (See DOMDepartment Operations Manual 22030.10.5.2 and 22030.10.5.6 respectively).

  • Quantity of supply – for all stock items managed under the R/O or Min/MaxMaximum systems, the quantity of supply boxes shall be completed. In the reorder point block, show both the reorder point and the reorder quantity for the R/O concept.

  • Source code – the source code is a current reference to the purchase method or vendor designated by the PIN Stock Item Catalog as the primary source for a stock item. Only the approved codes as shown in the PIN Stock Item Catalog shall be used.

  • Management code – this space is used to denote whether the item is contingency (emergency) (C) stock or regular (R) stock. Use the letter C or R.

  • Stock number – the stock number identifies the item by commodity group and class. All expendable stock inventory items in the warehouse shall have an approved stock number assigned. That stock number shall be entered in the space provided.

  • Unit of measure (U/M) – the unit of measure or the unit of issue is a two-letter designation for the count, measurement, container, or form of an item of supply. It is the minimum quantity which can be ordered. The unit of measure designations to be used are shown in the PIN Stock Item Catalog.

  • Unit price – all stock items shall have a unit price entered. Use the latest price paid for the item. This is necessary for computer update and budgetary purposes.

  • Description – the descriptions currently in use in the PIN Stock Item Catalog shall be entered in the description space.

  • Color coding – this space identified any action (by colored tab) that shall be needed. The colored tab designations in these instructions shall be used to identify the type of action that is proposed or has already taken place. The following colored tabs are the only colors that are approved to flag the stock control record:

    • Red – activity during the month requiring monthly action update reporting.

    • Green – item is on order. Serves as a reminder; follow-up is the requisitioner’s responsibility.

    • Blue – needs to be reordered as stock has reached the reorder point.

    • Yellow – order received. Remove the tab when the shipment is received as ordered.

  • Contract or SPSState Price Schedule number – enter the appropriate number found on state contracts and state price schedules.

  • Vendor name/address/phone number/catalog number enter name, address and phone number of vendors submitting price quotes.

  • Minimum order quantity – enter the number of units the vendor requires to be purchased to recover the shipping and handling costs associated with the order.

  • Price per order unit – enter the price per standard unit of measure.

  • FOB terms – to be determined at the time quotes are obtained. Request FOB destination whenever possible.

  • Discount terms – enter the cash discount offered by vendors to ensure timely invoice payment. Cash discounts amounting to at least $2.50 and when the discount percentage allowed is at least one-half of one percent shall require the payment to be made in a timely manner.

  • Delivery date – enter the date the materials or services are expected to be delivered.

  • Total cost – enter the extension price (The unit price times the quantity equals the total cost).

  • This information shall assist in determining which vendor shall receive the order.

  • Inside delivery – used to determine and project the necessity for additional shipping charges associated with inside delivery of materials.

22030.10.1.2 Retention of Stock Control Record

• The Stock Control Record cards shall be retained for at least two years. One year in the active file and at least one year in the inactive file. Those stock control records that have served their purpose, such as those for discontinued stock, shall be retained for a minimum of two years.

22030.10.2 Safety Levels

• Normally, safety levels are established to minimize stock outages. To determine the level of safety stock that should be maintained, the critical need of the item shall be established based upon the following:

  • The degree of the problem if there is no stock on hand.

  • The effort, both in cost and time, necessary to secure the stock.

• Stock Outages Classified

  • Stock outages shall be classified as follows:

    • Minor – stock outage of these items shall cause little inconvenience and shall be overcome with a little extra effort, perhaps a phone call and with a short delay in processing the demand or with a back order. Work production delays are not a factor. These items are considered regular stock items and 15 days safety stock shall be sufficient.

    • Major – a stock outage of these items shall cause some inconvenience and could result in additional costs because of production delays or program disruption. Generally, these items are also considered regular stock items but an increased safety stock of 16 to 25 days is required. These are the “A” items (see source code in DOMDepartment Operations Manual 22030.8.6.2 for a description of “A” items) or items with the highest demand.

    • Critical – a stock outage of these items shall cause significant delays in production or intolerable program disruption and could result in excessive costs. These items are not available locally and a stock outage may endanger public health or safety. These items are considered contingency stock. A safety level of predetermined amount shall be set.

22030.10.3 Selecting Items for Continuing Storage

• All items carried in the warehouse shall meet the Department’s criteria for selecting items for continuing storage in DOMDepartment Operations Manual 22030.10.4. All items shall be reviewed annually by the materials management coordinator, and those items not meeting the criteria shall be discontinued.

• All items carried in the warehouse as routing stock for filling supply demands shall have levels set by using the Min/MaxMaximum or R/O inventory control concept. Stock control records shall be available for audit purposes at all times.

• Supply levels for stock items are established to accomplish the following:

  • To have an ample supply of stock items on hand but not more than is needed to meet the goal of the Department.

  • To have emergency reserves on hand in the event items due in are not received on time.

  • To know when and how much to order.

  • To build accurate records which provide for adjustments at a later date.

• Time, space, and money are wasted if supply levels are not set. The Department shall not have excessive funds tied up in unused inventory.

22030.10.4 Criteria for Selecting Items for Continuing Storage

• Demand – at least five recurring demands for each 365 days demand year. Demands must occur on a regular basis and reflect a standard usage pattern over a 365-day period.

• Volume – stable and large enough to permit significant savings from acquisition in quantity.

• Dollar – minimum issues of $50 per demand year as long as the demand criteria is met.

• QAQuality Assurance – items that require a high degree of QAQuality Assurance shall be selected for continuing storage.

• Emergency – items of an emergency nature, which may be required within hours after the need is recognized, shall be held in continuing storage.

• Specifications – only items that have established accepted standards or detailed specifications shall be considered for inventory.

• Usage – infrequently used items or those with patterns of erratic use do not make good inventory items, as large inventories are required to meet high use periods (e.g., usage patterns show more than five demands per year but all the demands occur in a restricted time period).

• Lead-time – the non-critical item that can normally be purchased from a local source within 30 days shall not be stocked.

• Items shall not be stocked merely for convenience. For non-critical items, institutions shall rely primarily on the purchase-as-needed technique. Continuing storage inventories shall be limited to only those items that are clearly justified as contingency stock for emergency needs or items that are not readily available from relatively nearby sources.

22030.10.5 Setting Levels

• Component parts of a stock objective are expressed in days of supply. The component parts consist of the following:

  • Safety level.

  • Ordering and shipping time.

  • Operating level.

• Setting levels shall assist personnel who maintain stock to have on-hand materials when they are needed. Levels are set to ensure that stock shall not be depleted. The Department shall use the MINMinimum/MAX concept to set the majority of supply levels; however, the R/O concept may be preferred for some items.

22030.10.5.1 Min/Max Concept of Setting Levels

• A simple MINMinimum/MAX supply level system provides proper inventory control. To determine MINMinimum/MAX supply levels, the following supply history is necessary:

  • The total amount of recurring issues for one demand year (365 consecutive calendar days).

  • Ordering and shipping time (used to establish minimum level).

  • Operating level (used to establish maximum level).

• Low demand stock items, regardless of their unit value, are prime candidates for the MINMinimum/MAX concept or for discontinuance.

22030.10.5.2 Guidelines for Min/Max Levels

22030.10.5.3 Purchase Order Example for Calculation of Min/Max Levels

• Example using guidelines for MINMinimum/MAX levels for items purchased by POs up to $10,000 (When a replenishment order is prepared, the quantity ordered is 90 items):

• Method 1

  • Step 1 – convert yearly demand into issues per day. Issues per day =180 items (yearly demand) – 365 days = .5.

  • Step 2 – calculate the minimum level. Minimum = ordering and shipping time (in days) x issues/days = 90 x .5 = 45 items.
    
    When the stock on hand is depleted to 45 items, a replenishment order is prepared.

  • Step 3 – calculate the maximum level. Maximum = operating level (in days) x issues/days = 180 x .5 = 90 items.

• When MINMinimum/MAX levels may also be calculated with the yearly demand divided by factors based upon ordering and shipping time (for the minimum level) and operating level (for maximum level). The division factor for the minimum level is the approximate number of days per year (360) divided by the ordering and shipping time in days. The division factor for the maximum level is an assumption of the number of orders per year (i.e., the approximate number of days per year – 360 – divided by the operating level in days). A chart that provides the division factor for different ordering and shipping times or operating levels follows:

  Ordering and Shipping Time or Operating Level (in Days)	Division Factor
  365	1
  180	2
  120	3
  90	4
  75	5
  60	6
  45	8
  30	12

• Method 2

  • Step 1 – determine the division factors. Minimum = 4 (for ordering and shipping time of 90 days). Maximum = 2 (for operating level of 180 days).

  • Step 2 – calculate the minimum level. Minimum = yearly demand ÷ division factor for ordering and shipping time = 180 ÷ 4 = 45 items (When stock on hand is depleted to 45 items, a replenishment order is prepared).

  • Step 3 – calculate the maximum level. Maximum = yearly demand division factor for operating level = 180 ÷ 2 = 90 items.
    
    Note: When a replenishment order is prepared, the quantity ordered is 90 items. The quantity to order is the maximum supply level.

22030.10.5.4 Contract Example for Calculation of Min/Max Levels

• Example using guidelines for min/max levels for items purchased from contract:

  • Yearly demand: 72 items.

  • Order and shipping time: 60 days.

  • Operating level: 90 days.

• Method 1

  • Step 1 – convert yearly demand into issues per day. Issues per day = 72 items (yearly demand) ÷ 365 days = .2.

  • Step 2 – calculate the minimum level. Minimum = ordering and shipping time (in days) x issues/days = 60 x .2 = 12 items (When the stock on hand is depleted to 12 items, a replenishment order is prepared).

  • Step 3 – calculate the maximum level. Maximum = operating level (in days) x issues/days = 90 x .2 = 18 items.

• Method 2

  • Step 1 – determine the division factor. (See chart for prior example of Method 2.) Minimum = 6 (for ordering and shipping time of 60 days). Maximum = 4 (for operating level of 90 days).

  • Step 2 – calculate the minimum level. Minimum = yearly demand ÷ division factor for ordering and shipping time = 72 ÷ 6 = 12 items (When stock on hand is depleted to 12 items, a replenishment order is prepared).

  • Step 3 – calculate the maximum level. Maximum = yearly demand ÷ division factor for operating level = 72 ÷ 4 = 18 items (When a replenishment order is prepared, the quantity to order is 18 items).

22030.10.5.5 Requisitioning Objective Method of Setting Levels

• To determine R/O supply levels, the following history is necessary:

  • The total amount of recurring issues for one demand year (365 consecutive calendar days).

  • Ordering and shipping time.

  • Operating level.

  • Safety level.

22030.10.5.6 Guidelines for Requisitioning Objective Levels

• For the R/O method, 135 days of supply is adequate for Department warehousing facilities. The number of days for each component is as follows:

  Operating Level	Ordering and Shipping Time	Safety Level
  60 Days	60 Days	15 Days
  	Total time: 135 Days

22030.10.5.7 Example for Calculation of Requisitioning Objective Levels

• An example of the R/O method follows:

  • Yearly demand: 720 items.

  • Ordering and shipping time: 60 days.

  • Operating level: 60 days.

  • Safety level: 15 days.

• Step 1 – convert yearly demand into issues per day. Issues per day = 720 items ÷ 365 = 2.

• Step 2 – calculate the number of items used during the ordering and shipping time. Number of items = ordering and shipping time (in days) x issues per day = 60 x 2 = 120 items.

• Step 3 – calculate the number of items required for the operating level. Number of items = operating level (in days) x issues per day = 60 x 2 = 120 items.

• Step 4 – calculate the number of items required for the safety level. Number of items = safety level (in days) x issues per day = 15 x 2 = 30 items.

• Step 5 – calculate the R/O. R/O = number of items for the ordering and shipping time + number of items for operating + number of items for safety level = 120 + 120 + 30 = 270 items.

• Step 6 – calculate the reorder point (ROP). ROP = number of items for ordering and shipping time + number of items for safety level = 120 + 30 = 150 items (When stock on hand is depleted to 150 items, a replenishment order is prepared).

• Step 7 – calculate the quantity to be ordered. Order quantity = R/O – RPO = 270 – 150 = 120 items (When a replenishment order is prepared, the quantity ordered is 120 items).

• This is a minimum guideline. Such things as minimum order quantities from supply sources (e.g., contract vendors) may require that an order be issued for more than the difference between the R/O and ROP. Use your own judgment ordering more items delays the need to reorder the next time but increases the amount of inventory investment to more than is required.

22030.10.6 Maximum Quantities Allowed in Inventory

• Any quantity in excess of the R/O is technically long supply. Quantities on hand and due in from outstanding orders shall not exceed the R/O unless the items can be used within the next 45 day operating period. The next reorder shall be delayed until the amount in long supply is exhausted.

22030.11 Warehousing Program

• The warehousing program shall provide for the following:

  • Establishment of warehousing facilities in line with distribution plans.

  • Storage areas, handling equipment, and warehousing methods and techniques which optimize the use of the facilities.

  • Verification that materials are received as ordered.

  • Storage of material.

  • Rotation of stock.

  • Effective distribution of material ordered by customers.

  • Maintenance of accurate records.

  • Regular survey of physical inventories.

22030.11.1 Establish Warehousing Facilities In Line With Distribution Plans

• The warehouses shall be material distribution facilities and not merely places to store supplies. Planning and layout of space are dependent upon the types of supplies being stored. At all facilities used to store and distribute materials, entry/exit controls shall be in place to restrict unauthorized personnel from having access to the inventory (except in cases involving emergencies concerning health and safety).

• Subsistence supplies shall be protected properly from extreme changes of temperature, dampness, rodents, and insect infestation. Security items shall be stored in vaults or safes. Sensitive items, subject to pilferage, shall be properly protected. Hazardous commodities, including explosives, flammables, and oxidizing agents, shall be properly segregated from each other and other types of supplies and stored in buildings designed for this purpose.

• Every effort shall be made to:

  • Use space in the most effective and efficient manner.

  • Use pallets and material handling equipment effectively.

  • Use a direct flow assembly line principle.

  • Establish an effective warehouse and storage layout plan.

22030.11.2 Effectively Received Material

• The support and/or maintenance warehouse staff shall perform all receiving duties at the institutions, including those shipments destined for other areas inside their facility. For other facilities without a formal warehousing program, an employee shall be designated to be responsible for the receiving functions.

• All facilities receiving purchased material shall maintain an open order receiving file. At least semi-monthly, the receiving file shall be monitored for overdue shipments and the orders shall be followed up to determine the status of late deliveries.

• Once it is verified that an overdue shipment has not arrived, a non-delivery letter shall be prepared. Without proper notification, a buy-out requires the original vendor to pay the difference, if any, of the price paid to the alternate bidder or any additional cost because of the inconvenience caused by the non-delivery. Buy-outs shall be coordinated by the Office of Procurement.

• The receiving agent shall verify incoming shipments against a copy of the original purchase order and packing slip. Materials received by common carrier shall be verified against the carrier’s shipping document (freight bill).

• When inmates are assisting with receiving duties, the delivery vehicle license number shall be noted on the warehouse copy of the freight bill or receiving documents (This shall aid in the identification of vehicles used in the event of inmate escapes).

• All cartons shall be inspected for correct quantity of items and visible damage. The most critical time for establishing a proper base for collection of a shortage or damage is at the time of delivery. Failure to observe correct receiving procedures at this time may well result in the carrier’s denial of a claim. For all overages, shortages, or damages (O, S, or D), an explanation of the discrepancy shall be written on all copies of the delivery documents. The delivery documents shall then be signed by both driver and receiving agent.

• Upon receipt of a shipment that is over, short, or damaged, the receiving agent shall furnish the payments unit staff, vendor, and/or the person expecting the shipment with information concerning the problem. This can be accomplished by using the O, S, or D form. This provides those involved with the O, S, or D with a written statement and actions required to resolve the problem.

• Inventory control of property shall begin immediately when delivered by the vendor. The receiving agent shall contact a property controller at the time of delivery to arrange to have property items tagged or engraved for easy identification as state-owned property before they are moved from the point of delivery.

22030.11.3 Visible Damage

• Inspect the individual pieces before accepting the delivery and signing the carrier’s delivery documents. Legally, the consignee must accept delivery of a damaged shipment.

• Notify the vendor and carrier’s representative of the damage and request an immediate inspection.

• Retain the containers and packaging material for inspection by the carrier’s representative.

• Contact the Office of Procurement, Traffic Management Unit, for assistance when damages to material exceed $100.00.

22030.11.4 Concealed Damage

• Upon discovery of concealed damage, immediately stop unpacking the shipment.

• Leave the shipment intact and do not remove it from the receiving location. Retain the internal packing, carton, or crate intact.

• Notify the carrier and vendor that concealed damage was discovered and request inspection. Try to offer reasonable evidence that concealed damage did not occur after delivery.

• Contact the Office of Procurement, Traffic Management Unit, for assistance when damages to material exceed $100.00.

22030.11.5 Stock Received Reports

• Stock received reports shall be:

  • Prepared at the time goods are received. Receiving agents may use a STDStandard Form (DGS) Form 106, Stock Received Report, or a copy of the POPurchase Order (as long as the information required on the STDStandard Form (DGS) Form 106 is shown on the copy of the POPurchase Order).

  • Processed immediately.

  • Routed to the payments unit for prompt payment of invoices. Discounted purchase order stock received documentation shall be expedited to ensure that payment is made according to the terms shown on the purchase order.

22030.11.6 Storing Material

• Accessibility shall be the first consideration when arranging stock for order processing. Fast moving, high transaction items shall be stored in locations where they can be selected and issued with the minimum amount of handling. Warehousing staff shall store bulky or difficult to handle items, when possible, near doors and main aisles leading directly to the shipping and pickup areas. Materials shall not be arranged in strict PIN stock item number sequence.

• All shelves, bins, and bulk cartons shall be stock numbered to identify the items being stored.

• A systematic stock rotation program shall exist at all warehouse storage areas. All materials in inventory shall be dated at the time of receipt. Items that carry an assigned shelf life require shelf rotation; first-in, first-out warehousing shall be used with these items. Whenever possible, the flow-through method for bulk storage items shall be used. With the flow-through method stock is selected from one end of a row or rack of a single stock item and new stock is replenished at the other end.

22030.11.7 Distribution of Material

• A catalog of items in inventory shall be provided to staff for ease of requisitioning materials.

• Materials shall be issued from warehouses on a STDStandard Form (DGS) Form 115, Order for Storeroom Supplies, or a local form that contains the same basic information as the STDStandard Form (DGS) Form 115. The requisition shall show the date of the requisition, the unit to be charged, the stock item number and description, quantity ordered, and signature of requester. The requisition shall be signed by the approving officer who shall retain the triplicate copy until the order is filled. The approving officer shall send both the original and duplicate copies of the requisition to the warehouse.

• Each approved requisition shall be numbered and listed in a central control register for reference control of material issues.

• After the order is filled, the original of the requisition shall be used to update stock records while the duplicate copy accompanies the material and serves as a packing slip.

• When the goods are received, the person who ordered them shall check the quantity received, sign the receipt portion of the triplicate copy, and send it to the warehouse for comparison of quantity filled vs. quantity received. All discrepancies shall be reported immediately. Immediate reporting shall assist in determining the steps necessary to rectify any discrepancies.

• The distribution of maintenance warehouse items shall be basically the same as distribution of all other items, except all trades staff shall stock a 30-day supply of maintenance supply items in their respective areas or vehicles to eliminate frequent trips to the warehouse. A STDStandard Form (DGS) Form 115 or similar form is required for all issues from maintenance warehouses.

• Every effort shall be made by staff to maintain accurate warehouse and inventory control records, which make the detection of losses easier.

22030.11.8 Physical Inventory of Materials

• A count of every inventory item held in storage shall be taken annually on all materials in all warehouses, storerooms, and maintenance shop storage areas. More frequent inventories are acceptable if experience indicates that reducing the interval between physical inventories shall result in less time being consumed in the reconciliation of records.

• Food shall be inventoried at least quarterly to determine the amount of supply necessary for the next quarterly food order.

22030.11.8.1 Physical Inventory Check List

• The following is a checklist of action steps that shall help to achieve a successful physical inventory:

  • Establish a firm inventory date, and provide advance notice to vendors and employees. The inventory date shall be established and approved well in advance of the proposed inventory. Cut-off times shall be determined for all operating activities which have an effect on physical inventory. This shall include interagency shipments and corresponding paperwork, issues, and vendor shipments and receipts. Determination of an inventory date shall depend on the number of items in stock, the time needed to count these items, and the established business hours. It may be beneficial to take the inventory during non-business hours to minimize disruptions to day-to-day operations. When the inventory is not centrally located, the physical inventory shall be conducted at all locations on the same day(s).

  • Assign inventory responsibilities. The supervisory responsibility for physical inventory shall be delegated to the person with the functional duties of purchasing officer, business manager, materials manager, or inventory manager. The accounting office shall fully participate in the physical inventory if the accounting office performs the inventory reconciliation.

• An inventory supervisor shall be assigned to each area to be counted to supervise the taking and reporting of the count. The functions of the inventory supervisor are:

  • Briefing. On the first day of the count, the inventory supervisor shall give the final briefing on count procedures.

  • Count control. The inventory supervisor shall maintain control of the preprinted inventory worksheets and assign worksheets for counting, supervise reconciliations, and collect the completed data.

  • Count integrity. The inventory supervisor shall maintain counting procedures, reconciliation of count data, and all other matters which affect count accuracy.

  • Inventory acceptance. The inventory supervisor has sole and final authority to accept count data as complete and accurate. The inventory supervisor may require recounting by staff, emergency overtime, etc. The inventory count is not completed until accepted by the inventory supervisor.

  • Perform inventory preparation. Before the scheduled inventory date, the warehouse manager(s) shall check all bins and bulk stock to see that the stock is clearly marked and arranged for ease of counting. All bin, shelving, and pallet rack labels shall be checked to assure that stock numbers, descriptions, and units of measure are identical to those listed on the inventory worksheets. The inventory worksheets are either computer produced or manually prepared by the inventory supervisor from the authorized stock listing (listing of items acceptable for storage). Items found in storage that are not shown on the stock listing shall be brought to the inventory supervisor’s attention for addition to the listing or disposal action.

  • Assign operating cut-off dates. Operating cut-off times for business activities and paperwork, and desired inventory preparation, shall be coordinated with the inventory date. All receiving documentation, requisitions, and shipping memos issued prior to the inventory shall be clearly marked “before inventory” and processed before the inventory is taken. All materials received after the assigned cut-off date shall be set aside, clearly identified as “after inventory,” and held until after the inventory counting is completed. All receiving and issuing documentation shall also be marked “after inventory” and not processed.

  • Determine and schedule inventory requirements for staffing, supplies, and equipment. Staffing heads the list of inventory needs. An adequate number of people shall be assigned. The types of listings, inventory tags, forms, or recording devices shall be selected. Writing tools, such as pencils, marking pens, etc., shall be provided. Masking tape, cards, wire, or string shall be obtained if tags are used. A clipboard or something similar shall be handed out to write on.

• Ladders and step stools shall be obtained ahead of time for easier counting of material on upper shelves. Equipment shall be available for stock that has to be moved during counting.

  • Provide adequate training. Schedule inventory training dates and provide advance notification to affected personnel. Conduct thorough training with inventory supervisors before instructing other inventory personnel (counters, recorders, inspectors, auditors, etc.).

• Inventory supervisors shall receive instruction a minimum of one week prior to inventory, to allow time to familiarize themselves with their area of responsibility and to make the area ready for inventory. Inventory personnel shall receive their instruction as close to the actual inventory as possible.

• Inventory training for counting personnel shall include information on why the inventory is necessary, how to count and record accurately, and how to identify materials that shall be inventoried. They shall also be informed that discovery of repeated bad counts through the audit process shall result in personnel recounting their entire area.

• An instruction booklet or inventory information sheet shall be printed and handed out to each person. The booklet or sheet might contain the purpose of the inventory, but shall illustrate and explain the method of taking inventory, reiterate certain key inventory steps to follow, list assignments and accountability, and point out certain dos and don’ts relating to inventory counting such as:

  • Do express count by the unit of measure assigned to the item being counted.

  • Don’t count partial quantities of any item where the quantity would be less than an expressed unit of measure, such as pounds, feet, or gallons.

  • Do individually count the contents of all opened packages.

  • Don’t open sealed packages to count. Use the count marked on the outside.

  • Do approximate the length of bulk items such as hoses, wire, etc., where lengths are extensive and too costly to count.

  • Don’t sight-count open – carton merchandise. Take merchandise out of containers to count.

  • Do replace boxes or packages (or items counted) back in original location after counting.

  • Don’t disturb rotation sequence of items counted that carry assigned shelf life (Add any dos and don’ts not shown above which fit the inventory being taken and delete those that have no relationship).

  • Count the inventory. The taking of a physical inventory shall be done in teams. A count team shall include a counter and recorder. As much as possible, members of count teams shall continue to work together throughout the inventory. Counting assignments shall be designated by a clearly defined physical area of the warehouse. The count teams shall count all stock within their area. The counter shall post a tag or card on all items counted to distinguish between counted and uncounted items. To make sure the correct item is being counted, the recorder shall read the complete stock item number, description, size, and color. The counter shall repeat the stock item number. Each recorder shall use a ruler as a line guide to ensure the count is entered in the proper column. The recorder shall record all numbers as neatly and legibly as possible.

• The count teams shall pay close attention to the unit of measure to ensure they are counting the correct unit of issue shown on the inventory worksheet.

• When an inventory item is not listed on the inventory worksheet, the item description, count, unit of measure, and stock item number shall be written in on the last page. All such write-ins shall be brought to the attention of the inventory supervisor.

• Filling of emergency orders during the inventory period shall be strongly discouraged. Requesters shall be asked to leave the order for filling and pickup after the inventory is completed. If the emergency is such that the order must be filled, the inventory supervisor has sole authority to approve this action.

  • Verify the count. The inventory supervisor shall assign count teams to check counts at random as well as to check on predetermined items which typically have been a counting problem in the past, have a high unit cost, or are subject to shrinkage. These counts shall be taken on approximately five percent of the stock. The person making the random counts shall record the stock item number, description, unit of measure, and quantity by area of recounted stock. The inventory supervisor shall reconcile this data to the original count; and if there is a difference, another count team shall be assigned to recount the item. If any evidence of a significant count error is detected, the original count team shall be assigned to recount all items within its assigned area.

• The audit taken during physical inventory shall ensure that all items are counted uniformly and that an accurate count is taken.

  • Perform inventory reconciliation. A report shall be issued at the conclusion of the physical inventory count which includes an explanation of any large differences between the inventory records and the physical count. Reconciliations may be required as a result of material issued from stock but not yet recorded or invoiced, materials-in-process, material on display or in separate areas, material missed during the count, or returned material and material-in-transit. The report shall contain an explanation of all attempts made to reconcile count and book differences. The book balance is the balance on hand shown on the Stock Control Record or stock status report at the inventory cut-off date.

  • Finalize the inventory. To obtain the monetary value of the inventory, the inventory items shall be priced out. Use either the average cost method or current replacement cost, whichever is lower. When the average cost method is used, the average cost shall be updated as new receipts occur, or on a periodic basis. The use of the current replacement price generally inflates the inventory value. When required, purchase, MINMinimum/MAX, or days-of-supply level and issue information shall be posted to the inventory worksheets. This information shall be used in the calculation of turn-rates and for readjustments of stock levels.

  • Prepare and submit the final physical inventory report. Prepare a copy of the inventory procedure, the final inventory monetary value, and the final physical inventory report. The report also shall contain the percentage of variance between the count and book inventories. The maximum acceptable percentage of variance is 5 percent. Generally, the difference after reconciliation shall be from 1 to 3 percent.

• Upon acceptance of the final inventory report by management, inventory records shall be changed to reflect actual on-hand balances as verified by the physical count. Units with manual systems shall indicate on the records what adjustments were made as a result of the inventory.

• Common reasons for inventory discrepancies are:

  • Lack of recording receipts or issues.

  • Accidentally placing merchandise in wrong storage areas.

  • Recording quantity received without checking actual count before stocking.

  • Pulling a larger quantity than asked for.

  • Failure to prepare needed paperwork.

  • Pilferage.

• Only a physical inventory, taken with proper audit control, can certify counts and recommend needed corrections in procedures, record keeping, or security.

22030.11.8.2 Budget Comparisons

• Inventory purchases shall be shown as a separate line item in the budget. Purchases shall be made after considering the inventory of expendable goods on hand.

• The materials manager shall make a comparison of the budgeted amount, the amount spent on purchases of expendable goods inventory, and the amount of expendable goods issued from inventory. The dollar value of amounts issued shall exceed the dollar value of amounts purchased until long supply is reduced to acceptable levels. Thereafter, the amount issued shall coincide with the amount purchased. In July of each year, the business managers shall prepare a Materials Management Inventory Expenditure Report on amounts budgeted for expendable goods inventory, amounts spent, and amounts issued. The report shall include trends in the level of inventory investment at each facility.

22030.11.8.3 Stock Record Keeping Inspection/Audit

• All institutions or facilities shall maintain stock records on inventory items. The materials manager shall visit the institutions periodically to inspect the record keeping system.

• The stock records shall be audited to ensure that:

  • The Department’s criteria for selecting items for continuing storage are used.

  • The Department’s guide for selecting items for continuing storage is followed.

  • The Department’s guide for setting stock levels is used.

• In addition to stock records, the materials manager shall audit purchase documents, property survey reports, etc., to determine if the Department’s Materials Management policies are being followed and the goal and objectives of the Materials Management program are being met.

22030.11.8.4 Comparison of Physical Inventories

• Starting with the June 30, 1986 physical inventory of support items including food, miscellaneous feeding supplies, clothing, housekeeping/janitorial, personal care, medical, and office supplies, a copy of all physical inventory data shall be sent to the materials manager. The inventories shall include a physical count, unit price, maximum supply level, annual demands, issues, receipts, and the ending book on hand.

• Starting on July 30, 1990, a maintenance item physical inventory shall be conducted and include a physical count, the unit value of each item, extensions and the total value of each item, and extensions. Subsequent inventories shall require a physical count, unit price, maximum supply level, annual demands, issues, receipts and the ending book on hand. This data shall be compared to the base inventory data, by the materials manager, to determine progress towards improved materials management.

• Over a period of seven years, the long supply of expendable materials shall be exhausted; therefore, each subsequent inventory shall indicate:

  • A reduction in the inventory investment (adjusted for the inflation rate and population fluctuations).

  • Reduction in the number and variety of different items held in warehouses and storage areas.

  • Reduction in the amount and number of items that are in long supply in the support, maintenance, and property storage areas.

22030.11.8.5 Inventory Reports Statewide Inventory Management Program (SIMP)

• In addition to the base inventory, at the end of the fiscal year, a physical inventory shall be taken and input to the DGSDepartment of General Services, Office of Procurement, SIMP. The required inventory data shall be entered on the worksheets (SLH Form 912 provided by SIMP). The completed worksheets shall be sent to the SIMP and to the Department’s Materials manager, ASDSee Division of Administrative Services (DAS) (see ASB); and a copy shall be retained by the facility.

• Each institution or facility worksheet shall list the specific items stored in that location. When the completed worksheet is received by the Office of Procurement, the inventory information shall be fed into the SIMP computer system.

• The Department’s participation in the SIMP inventory program shall be in two phases. Phase I began with a support warehouse inventory in fiscal year 1985-86. Phase II shall bring the maintenance inventories on line beginning in fiscal year 1989-90. Those facilities that now have an operational maintenance inventory control program in use shall be input first. It is anticipated that facilities that do not have an operational maintenance warehousing program shall be phased into the SIMP system during fiscal year 1990-91.

• After the second physical inventory is in the SIMP system, management reports shall be produced to monitor and measure the effectiveness of the program. This system shall provide the Department with the following information:

  • The Department’s expendable goods inventory investment, by warehouse and stock item.

  • An increase or decrease in the inventory investment and at what rate.

  • Stock turnover/ratio.

  • Identification of items in long supply or excess.

  • Deviations of physical inventory counts when compared to stock record counts.

22030.11.8.6 SLAMM Statewide Physical Inventory Report

• Guide to using the SLH Form 912, SLAMM Statewide Physical Inventory Report:

  • Area of “SLAMM Statewide Inventory Report”

    • Warehouse number – a number consisting of a five-digit agency billing code and a three-digit warehouse code. These codes are assigned by the SIMP Unit and shall be preprinted on each page of the worksheet.

    • Physical inventory date – the date of the inventory shall be entered by the SIMP analytical staff. This is a six-digit field that shall be hand-coded by the SIMP staff to ensure the inventory data is matched exactly with all previous inventories in their system.

    • Name, address, city, zip code – agency name and current address shall be preprinted on the first page of the inventory worksheet.

    • Stock number – a 12-digit PIN stock item number shall be printed in numerical sequence for each item maintained as an authorized stock item.

    • Description – a commodity description shall be printed for each stock item number from the PIN stock item master file.

    • MaxMaximum-inventory, quantity-of-supply – enter the maximum supply level quantity. The R/O entry shall list the number of days supply for each component of this supply system.

    • Mode – the unit’s current type of supply method is indicated by a preprinted X below either R/O or M/M.

    • Stock type (ST) – items determined to be either regular or contingency (emergency) stock shall be indicated by a preprinted R or C symbol.

    • Acquisition code (AC) – indicates the source or method for acquiring a stock item. The various codes and their meanings are listed in the PIN Stock Item Catalog. This information is preprinted from the PIN stock item master file.

    • Count – enter the total count on hand for each item at the time of the physical inventory. All count entries shall be in the unit of measure printed on the worksheet. Do not include fractional quantities.

    • Unit of measure (UM) – this is the standard issue unit of measure. The units of measure shall be preprinted for each stock item listed on the worksheet.

    • Unit cost – enter the latest cost for each item. Unit price shall be expressed in the same term as the unit of measure.

    • Demand – indicate the number of requests for the item for the past 12 months.

    • Issue – enter the total quantity issued for the one-year period starting on the date of the last physical inventory that was input to SIMP.

    • Receipt – enter the total quantity received during a one-year period starting on the date of the last physical inventory that was input to SIMP.

    • Book on hand (O/H) – enter the quantity shown on the Stock Control Record at the time the physical inventory begins (i.e., current balance on hand).

• When the preprinted field information is in error or differs from the information contained on your records, do not make any notations or changes on the worksheets.

• These items shall be treated as add-ons and listed separately on blank worksheets for the creation of new PIN numbers for your inventory.

22030.12 Property Management

• The property unit shall provide input data and maintain property inventory records on all items meeting the criteria for property accounting. From this data, department management shall be guided and assisted in the following:

  • Establishing equipment maintenance schedules.

  • Determining property inventory needs based on expected obsolescence or probable ending of its useful life.

  • Assisting budget staff in determining items to be budgeted.

  • Maintaining an accurate record of property held accountable to the department or unit.

  • Providing sufficient data to determine if there is surplus property and locations needing property.

  • Providing a sufficient data base to draw information for routine or special reporting.

  • Maintaining a functional inventory tool for all users.

• Stock Records

  • For departmental property inventory control purposes, unit stock records shall be maintained on all state-owned items that meet any of the following requirements:

    • Has a normal useful life of at least four years;

    • Has a unit acquisition cost of at least $500; or

    • Is defined as sensitive property.

22030.12.1 Sensitive Property

• Sensitive property is any highly desirable and portable item, including expendable material. Sensitive materials include any items that possess a value because of:

  • Procurement restrictions.

  • Restricted use or possession of the item to certain people or functions.

  • Potential for sale or barter.

  • Uniqueness.

  • Availability.

  • Ability to be transported easily without detection.

  • Desirability for personal use.

• Examples

  • Some sensitive items are the following:

    • Adding/calculating machine.

    • Binoculars.

    • Boat/canoe.

    • Breathing apparatus.

    • Calculators.

    • Calibrator, gas voltage.

    • Cameras.

    • Cutters, pipe/bolt/torch.

    • Detectors, bomb/infrared/metal.

    • Dictation equipment.

    • Drill, electric.

    • Dynamometer, hand held.

    • EDPElectronic Data Processing (see IT) hardware.

    • EDPElectronic Data Processing (see IT) software.

    • Edger, lawn.

    • Embossing machines.

    • Engraver/etcher.

    • Fluoroscope.

    • Keyboard, electronic.

    • Lens, projector/camera.

    • Light, timing (auto).

    • Microphone.

    • Microscope.

    • Microwave oven.

    • Monitor/TV audio.

    • Mower, lawn.

    • Musical instruments.

    • Ohm meter.

    • Otoscope/oscilloscope.

    • Projector (portable).

    • Paging system.

    • Player, audio/video.

    • Punch/die set (complete).

    • Recorder, audio.

    • Router.

    • Razor, electric.

    • Sander, belt/disc.

    • Saw, circular/jig/saber.

    • Scope, spotting.

    • Stop watch.

    • Strobe, camera.

    • Telescopes.

    • Televisions (portable).

    • Tool sets (complete).

    • Tester, voltage/transistor.

    • Typewriters.

    • Weapons (includes pistol, rifle, shotgun, speed leader, scopes).

22030.12.2 Budgeting for Property

• For budget purposes, property shall meet the following three requirements:

  • Have normal useful life of at least four years.

  • Have a unit acquisition cost of at least $500 (e.g., four identical assets which cost $300 each, for a $1,200 total, would not meet the requirement).

  • Be used to conduct state business.

22030.12.3 Property Identification Numbers

• Each item of state-owned property shall bear an identifying number, either by decal or engraving. The manufacturer’s serial number for typewriters, computers, calculators, etc., shall not suffice for purposes of identification.

• Property numbers are assigned to property as it is received. When the property is received from the vendor and prior to moving the item from the point of delivery, the property controller shall assign a property tag that indicates the division or unit to which the property belongs and a specific number that shall be affixed to the item.

• Property is tagged to designate the assets as belonging to the state. Property tag or engravings shall be placed so that they are in plain sight and easy to read.

• When a computerized bar code system is in effect, an optical scanning identification decal can be substituted for the traditional property tag now in use.

• To the extent possible, all property shall be tagged on the front, left-hand corner of the item. The identification number/tag shall not be changed unless transfer occurs between divisions or institutions. If the property tag is destroyed, lost, or marred beyond recognition, a substitute number shall be supplied upon request.

22030.12.4 Adhesive Tags

• This type of tag includes tags manufactured from thin gauge metal, plastic, or other materials that are attached by use of an adhesive. These tags are for general purpose use and shall be used whenever practical. All tags shall be 1 ½” x ¾” as illustrated below. Tags shall be numbered sequentially.

  • State of Calif.

  • Corrections

  • Administration

  • 15476

• Tags are not required for the following:

  • EDPElectronic Data Processing (see IT) software. However, locations having EDPElectronic Data Processing (see IT) software shall maintain an inventory listing of that software to ensure both accountability and security for state property.

  • Furniture such as desks, chairs, bookcases, file cabinets, etc. that do not meet the criteria for property accounting.

22030.12.5 Stock Records

• The Department shall maintain inventory control records on all property that meets the criteria for strict accountability. The following information shall be input into the inventory control record system when property is acquired:

  • Acquisition date.

  • Property description.

  • Property identification number.

  • Cost or other basis of valuation.

  • Owner fund.

  • Rate of depreciation (or depreciation schedule) if applicable.

• The Department shall maintain stock records of property on a STDStandard Form (DGS) Form 153A, Property Record Card or on an automated property accounting system.

• The STDStandard Form (DGS) Form 153A is a multi-part form to be used to provide information in three different sequences. They are as follows:

  • Property identification number.

  • Description, brand, serial number.

  • Location/custodian.

• The property stock records shall provide the Department with a method of determining the quantity, value, and location of property items.

22030.12.6 Physical Inventory of Property

• The Department shall conduct a physical inventory on all property and reconcile the inventory with accounting records at least every three years. Inventory counting does not need to be performed at one time. Units may take a rotating inventory according to an inventory calendar.

• Units shall develop and carry out an inventory plan that shall include:

  • Inventory taking.

    • Time schedule.

    • Count procedure (type of listing or count sheet to be used).

    • Count assignment (statement of who shall take the inventory at the times and locations scheduled).

  • Internal control.

    • Inventories shall not be exclusively controlled by the custodian of the property records.

    • Worksheets used to take inventory shall be retained for auditing purposes. The worksheets shall show the date of inventory and the name of the person taking the inventory.

    • Physical inventory records shall be retained until the inventory reconciliation is completed.

    • The person in charge of the storeroom, if one is used, shall not be in charge of maintaining the inventory records nor the taking of physical inventory in that location.

  • Reporting and approval of inventory adjustments.

    • Adjustments and reconciliation of the records shall take place after the physical count has been completed.

    • Review and approval of all inventory adjustments shall be made by the business managers at the institutions or section chiefs at all other Department facilities. This review and approval shall be documented on a STDStandard Form (DGS) Form 157, Property Listing Adjustment Sheet.

• For any move of an office from one building to another, an inventory shall be conducted on property items prior to and after the move is completed. This shall ensure that all property is accounted for and that property records are updated and the move completed as planned.

22030.12.7 Storage of Property

• At least annually, a review shall be made of all property storage areas to determine the need to maintain property and what is surplus or excess to the needs of the facility. Every effort shall be made to reduce the amount of warehoused property that could be used by another division or at another location within the Department and to reduce the amount of space required for warehousing.

• The Department may store a maximum of five complements of office furniture at any facility it leases or owns. A complement of office furniture consists of the following:

  • One desk.

  • One swivel chair.

  • Four side chairs.

  • One work table.

  • One credenza.

  • One bookcase.

  • One typewriter.

  • One calculator.

• If these amounts of furniture are exceeded, each facility shall state in writing why they need to store used office furniture, how many complements shall be stored, and how long they shall be stored.

22030.13 Surplus and Obsolete Property

• Each departmental facility maintaining warehouse inventories shall develop a viable program for disposal of surplus material.

  • Each facility shall establish a property survey board which shall determine whether items are surplus or obsolete and the methods to be used to dispose of the items.

  • The property survey board shall be composed of several section chiefs and chaired by a Correctional Administrator.

  • The board shall meet at least quarterly to make management decisions concerning disposal of surplus and obsolete material.

  • The goal of all property survey boards shall be to reduce the inventory investment and storage costs and to make storage space available for other functions.

  • A property controller shall identify and dispose of material.

• Several methods shall be employed to determine surplus, obsolete, or discontinued material.

  • Frequent inventory appraisals shall identify potential surplus conditions before they become real, by acknowledging the trend toward a slow or no activity status or an increase in inventory.

  • Stock records shall be used to determine when items are no longer in demand and should be removed from inventory.

  • Staff shall try to be aware of changing technology that contributes greatly to the stockpiling of obsolete and surplus material.

• Staff shall promote common parts usage to limit the total number of probable inventory items or urge a limitation of the variety of items.

• In plant operations, warehouse staff shall be promptly informed when equipment is pulled out of service so that repair parts for this equipment can be disposed of and removed from the inventory.

• All items identified as surplus or obsolete by the property survey boards shall be listed and submitted to the Department’s materials manager for review and analysis. The listing shall include a full description, age, condition, value at the current replacement cost, and the approximate area where the item is located in order to determine the most effective method for disposal of the property and to provide data on inventory reductions to the DGSDepartment of General Services’ Statewide Materials Inventory Management Program.

• Under no circumstances shall material, tangible or intangible, be disposed without proper documentation. A Property Survey Report, (STDStandard Form (DGS) Form 152), shall be prepared for all transactions involving material disposal and shall be approved in advance by the Department’s Materials Manager and the Office of Procurement’s State Surplus Program. The Department’s Materials Manager and the State Surplus Section shall instruct the facility to:

  • Transfer the material to another facility within the Department; or

  • Transfer the material to another state agency; or

  • Make a diligent effort to secure at least three competitive bids and sell the material.

• When materials are transferred to other state facilities including those within the Department, a STDStandard Form (DGS) Form 158, Transfer of Location of Equipment shall be prepared and distributed according to the instructions on the form.

22030.13.1 Public Sale

• Whenever public sales are conducted, a system of checks and balances shall be used. This shall, at a minimum, consist of having separate persons handle the sale and the collection of funds.

• Three methods can be used to dispose of surplus property through public sale:

  • Sealed bid.

  • Auction.

  • Fixed price.

• The best method is the sealed bid. Historically, this method had the highest monetary return. A diligent effort shall be made to secure at least three competitive bids. If three competitive bids cannot be obtained, a list of the firms or individuals that were solicited shall be prepared and signed by the employee soliciting the bids. The bid solicitation list and the bids received shall be attached to the property survey report.

• When material is to be disposed of at a public sale, public notices shall be given. The public notices shall consist of:

  • Newspaper ads.

  • Notice of sale posted in public places.

  • Mailings to interested businesses and individuals.

  • Announcements on employee bulletin boards.

• Public sales shall be announced a minimum of one week prior to the sale. Notices in newspaper ads shall run a minimum of three days.

• An ample quantity of Notice of Sale flyers for distribution to prospective bidders shall be supplied to the unit where the sale material is located. The bid due date shall be set far enough in advance to allow ample time for advertising, bidder’s inspection of items, and preparation of bids.

• State employees may participate in public sales providing they do so in the same manner as the general public. Employees shall not use their position, office, or prestige to their advantage when participating in sales of materials and shall not participate on state time.

• The terms and conditions of a proposed sale shall be prepared in advance of the sale and made available to prospective bidders at the time of the sale. A copy of the terms and conditions shall be posted at the sale site.

• The terms and conditions shall contain the following information:

  • When and where material offered for sale may be inspected.

  • Bidding procedures, including bid closing time and date.

  • Bid opening time and date including statement as to how successful bidders shall be notified.

  • How, when, and where successful bidders shall make payment including a statement regarding sales tax.

  • Time limit for successful bidders to pick up items.

  • Other bid conditions including any other relevant information and the following statement:

• The items are being sold as is and where is. Verification of the description and condition is the responsibility of the bidder. All sales are final. The State of California reserves the right to reject any or all bids or to waive any defects or irregularities therein. Minimum bid amounts, when indicated, shall be applicable.

• The State of California makes no warranty, either expressed or implied, as to the condition or completeness of the equipment being sold nor does the equipment necessarily meet CAL-OSHACalifornia Occupational Safety and Health Act Standards, Orders, or Regulations.

• After the successful bidder has paid for the items and presents their receipt, the bidder shall be requested to sign an appropriate delivery receipt to signify that they has received the property. When scrap and junk is being sold, the person taking delivery shall either sign a delivery receipt or give the agency a receipt indicating the type and quantity of material removed from the premises.

• After the sale of property is completed, the amount of cash received shall be recorded on the approved copy of the property survey report. The approved copy shall be retained by the organizational unit conducting the sale.

22030.13.2 Other Methods of Disposal

• When a transfer of material is to be made to another facility within the Department or to another agency, the following shall be clearly understood and agreed upon by both units:

  • Description of items to be shipped.

  • Quantity to be shipped.

  • Price.

  • Method of and who shall pay for shipping.

• Whenever material is disposed of by some means other than transfer or sale (junked, hauled to the dump, scrapped, dismantled for salvage) the property controller or section chief shall certify in writing that the disposition described has been accomplished. The certification may be made on the property survey report (PSR) or on a separate piece of paper that shall be attached to and filed with the PSR. When material is disposed of at a public dump site, a signature shall be obtained from the disposal site operator or attendant indicating that the property listed was disposed of at the site. If the dump site is unattended, the employee disposing of the property and the property controller shall sign and certify that the disposition described was accomplished.

• Every effort shall be made to follow state and departmental policies, guidelines, and procedures when disposing of state-owned property.

22030.14 Department Management Reports

• The materials manager shall prepare annual reports for management at each institution or facility where major materials management functions are performed. The analysis report shall be an evaluation of the effectiveness of each institution’s or facility’s materials management program and shall include recommendations for improvement, when necessary.

22030.15 Revisions

• The Deputy Director, OBSOffice of Business Services or designee, shall ensure that the content of this article is accurate and current.

22030.16 References

• GCGovernment Code §§ 11330-11335.

• GCGovernment Code § 14675.

• SAMState Administrative Manual §§ 0510, 1690, 1691, 1694, 1695, 3520, 3535, 3536, 4174, 4175, 5901, 5953, 5952, 5952, 5952, 8621, 8640, 8643, 10220.

• PCCPublic Contract Code § 10334.