General Process for Taking Possession of Goods and Services Purchased - 2000.1

Receiving Process

Each department determines whether or not the goods and services received are acceptable and conform to all of the terms and conditions of the Contract/PO.  The entire receiving process consists of:

Term	Definition	Example
Receiving	The act of taking possession of goods in order to stage them for inspection or place them into inventory.  Caution: Placing goods into inventory without inspection may waive future inspection rights and remedies.	A worker on the receiving dock who signs for goods provides the acknowledgement that the goods were delivered, not that they were “accepted.”
Inspecting	The act of examining goods that have been delivered to determine conformance to what was ordered via the Contract/PO.  In some cases, the acquisition may require a person with specialized skills or expertise in examining the goods to determine conformance.	For IT: The Department inspects computer goods and provides a clearance that the computer goods received conform to what is ordered via the Contract/PO. For Non-IT: The U. S. State Department of Agriculture or the California Department of Agriculture inspects fresh produce and provides a certification of inspection to the purchasing institution.
Acceptance Testing	The act of testing what is purchased, either all items delivered, or the first item delivered or by random sampling of some or all items delivered.  Testing is conducted using standard test methods and determines that the goods and services, purchased are in conformance to the contract requirements as stated in the solicitation and Contract/POs, the supplier’s and/or manufacturers published technical specification and that the goods and services performs to a satisfactory level.	A department has purchased a printer.  The solicitation document identified a 30-day acceptance-testing period, during which the printer would be required to run error-free from the first day of installation. A department purchases materials, submits samples to an independent third-party laboratory for testing where testing is performed in accordance with stated standardized test methods.
Acceptance	The legal act of documenting that the goods and services conform to the requirements of the Contract/PO terms and conditions.	After completing an inspection or performance test, the department provides written notification to the supplier confirming that the inspection/test has occurred, the equipment, materials or goods passed the inspection/test and the department accepts the product.
Rejection	The return by the buyer of the goods and the recovery of the price. This right to reject is revoked once the goods have been accepted.	After completing the inspection, the product did not pass testing. The buyer would return the good to supplier at the supplier’s expense.

Separation of Duties

Departments should maintain sufficient separation of duties in order to reduce the risk of error, fraud, or conflict of interest.  No one person should control all key aspects of an entire transaction or event. FI$Cal enforces separation of duties in the system, based on user roles.

Packaging and Shipping Standards for IT Goods

The DGS/PD General Provisions (GSPD 401IT) describes to suppliers how IT Goods will be packaged and shipped to a State facility.  Any special packaging and shipping requirements and/or instructions over and above the standard provisions must be documented in detail within the bid solicitation and the purchase document.

Shipping Multiple Containers

The General Provisions instruct a supplier shipping multiple containers to identify the shipments as follows:

• Identify the number of the container and the total number of containers in the shipment; and
• Identify the number of the container in which the packing slip has been enclosed.

Release of Purchasing Documents

Upon completion of a Contract/PO, buyers must promptly notify appropriate personnel involved in post-award activities such as receiving shipments, accepting goods or authorizing payments.  These personnel should have a current, complete and accurate Contract/PO (including but not limited to technical specifications, any questionnaires the supplier filled out, product literature, post-consumer content form if applicable, etc.) to compare shipments received to what was ordered.

Substitution of Goods

Receiving staff must notify the buyer when the products do not match the Contract/PO.  Product substitutions, over shipments or under shipments must not be accepted without being properly documented.  A Contract/PO amendment must be executed.

At a department’s discretion, a receiver may be granted a PO View Role in FI$Cal which would allow the receiver to see the original PO quantity and is then able to notify the buyer of any over/under shipments. Without this role, the receiver counts the items received and enters the quantity into FI$Cal.

Resolving Disputes when State Pays Shipping

DGS/PD Transportation Management Unit (TMU) shall be contacted at (916) 376-1888 if a department encounters disputes with freight carriers or if filing lost, over, short or damaged shipment claims against shipping agents when the state pays for shipping.  Refer to the State Administrative Manual (SAM), Section 3861.

Follow-up on Open Orders

Departments’ policies and procedures shall provide a means for buyers, contract administrators, and receiving staff to follow up on purchases of goods and services ordered and not yet received.