The rockefeller university

Prepayments or deposits are generally not required or appropriate for goods or services acquired using a purchase order. However, in some instances, prepayments or deposits are appropriate and warranted. Examples include:

• There are custom production requirements;
• The University has no buying history with the supplier;
• There is a long production lead time and the supplier requests progress payments;
• The supplier requires it as a means of reducing the risk of cancellation;
• The prepayment is a negotiating tool for the University.

Prepayment in these cases is generally in the range of 10-80% (there are some cases where a vendor requires 100% prepayment and these circumstances are subject to approval from the Director of Materials Management & CPO) of the total price.

Prepayments or deposits are inappropriate for the purchase of routine consumable supply products, are prohibited for the purposes of extending purchasing power past the expiration of a funding source, and should not be made when there is no justifiable benefit to the University or requirement by the supplier.

Requests for prepayment should be presented to Purchasing. Justification for prepayments may be reviewed by the Director of Materials Management & CPO and other Administrative officials as appropriate.