CONTRACT Q&A

Revised November 2007

Note:  For links to policies and forms discussed in the Q&A see the Contract Administration home page. 

                                                                       HOME PAGE

 

  1. I determined I need a contract.  What is my first step?
  2. Who can I discuss contract needs with at the university?
  3. What is the contract process?
  4. Is a contract required for every instance?
  5. Do all consulting services require a contract?
  6. How do I know if an individual is an employee or a contractor?
  7. How long will it take to process my contract?
  8. I do not have a signed contract.  Can I have the vendor start services and complete the contract later?
  9. Do all contracts require legal review?
  10. Am I authorized to sign a contract?
  11. Can I sign a vendor sales order authorization or confirmation…it doesn’t look like a contract?   
  12. What are standardized contracts?
  13. What are the originating department’s responsibilities for a contract?
  14. Can I pay the vendor the day services are completed?
  15. Is there a way to schedule payments for partially completed services?
  16. Where are the original contracts kept for the University?
  17. Where can I find more information?

 

 

 

1.  Q.  I determined I need a contract.  What is my first step?

 

A.  The first step is always the same.  If a contract is required complete the Contract Coversheet, complete and submit via campus mail or deliver to Business Services, UW 107C.

 

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2.  Q.  Who can I discuss contract needs with at the university?

 

A.    The Department of Business Services coordinates contract administration at the university for UHV, UHSSL and UHSCR.  Contract administration includes assisting the originating department, the initial review of each contract, helping to insure that policy and procedures are complied with including obtain necessary legal review.  Contact Business Services motals@uhv.edu or call x-826.

 

 

 

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3.  Q.  What is the contract process?

 

A.  University contract policy and procedures are set forth in university policy E-12 Contract Administration and UHS Administrative Memorandum 03.A.05.  Once the Contract Coversheet is received, Business Services will coordinate the process from that point.  Business Services may consult with Accounts Payable, HR, UH Legal and other university officials as part of the process.  You will be contacted if additional information is necessary.

 

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4.  Q.  Is a contract required for every instance?

 

A.  No.  Departments are delegated authority for up to $3,000 for the purchase of most, but not all, types of gods and services.  There are some exceptions.  For example, if consulting services are involved, then a consulting contract is always required regardless of the dollar amount or source of funds.  If the desired procurement is simple and straight forward then the department can arrange for payment directly through the voucher or ProCard process without a contract or purchase order, up to the $3,000 limit.  However, a contract should be used if it makes good business sense to do so.  For example, are there terms and conditions or various reimburseables involved?  If you are unsure whether a contract is needed, contact Business Services motals@uhv.edu or call x-826 before you obligate the University.

 

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5.  Q.  Do consulting services require a contract?

 

A.  Yes.  Regardless of the dollar amount or source of funds, all external consulting services require a formal consulting agreement; OGC Consulting Form S-98-6 has been standardized for this purpose.

 

 

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6.  Q.  How do I know if an individual is an employee or a contractor?

 

A.  Contact Human Resources or Business Services for assistance in this matter.  As a guideline, you can review the Employee versus Contractor outline and answer the series of questions to help make a determination. 

 

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7.  Q.  How long will it take to process my contract?

 

A.  The answer varies and is dependent upon the type of contract.  Standardized contracts can be handled in house without further legal review and are usually processed within 10 days or less.  Non-standard agreements (requiring OGC review) may take 30 days or more to process.  For guidance, refer to the Contract Execution Timeline on the home page.

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8.  Q.  I do not have a signed contract.  Can I have the vendor start services and complete the contract later?

 

A.  No.  System and campus policy states that no services can start until the contract has been properly reviewed and executed by all parties.

 

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9.  Q.  Do all contracts require legal review?

 

A.  No.  The Office of General Counsel (OGC) has approved various standardized contracts that do not require legal review as long as there are no substantive changes to approve the contract language.  However, all vendor-provided contracts require mandatory legal review.

 

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10.  Q.  Am I authorized to sign a contract?

 

A.  You can determine if you have been delegated this authority by reviewing the contract signatory delegation authorization letters on the contract administration home page.  No employee has the authority to bind the university contractually unless that individual has been delegated that authority and the contract has been properly reviewed prior to execution.

 

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11. Q.  Can I sign a vendor sales order authorization or confirmation…it doesn’t look like a contract? 

 

A.    It depends. The department is delegated up to $3,000.  However if the vendor form includes binding terms and conditions and requires the signature of both parties then you are probably dealing with a vendor contract that will require legal review.  If you are unsure, contact Business Services motals@uhv.edu or call x-826, first. 

 

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12. Q.  What are standardized contracts?

 

A.  The Office of General Counsel has approved a variety of commonly used types of contractual agreements for the purpose of simplifying and expediting the contract process.  These pre-approved standardized contracts do not require OGC review.  If you want to use one of these contracts, submit a Contract Coversheet and Business Services will prepare the appropriate contract.  To view a listing of the various standardized contracts, go to the Contract Administration home page.

 

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13.  Q.  What are the originating department’s responsibilities for the contract?

 

A.  The originating unit assumes primary responsibility for a contract, from inception to completion of the transaction.  The originating department is responsible for monitoring and assuring performance in accordance with provisions of the contract.  The originating department is also responsible for processing contractor payments in a timely manner, according to the contract terms and payment schedule.  At the time of contract execution, the employees responsible for executing and monitoring the contract will sign a Contract Monitoring Acknowledgement form.

 

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14.  Q.  Can I pay the vendor on the day the service is completed?

 

A.  No, except in rare circumstances.  Generally payments should not be earlier than 10 days after the completion of services to allow the university adequate time for voucher processing. Payments in less than 10 days should be discussed with UHV Finance Office jozwiakd@uhv.edu first.  Payment should not be made in advance.  Payment in advance is not good business practice conflicts with the State of Texas payment recommendations and leaves the university vulnerable in the event of vendor default. 

 

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15.  Q.  Is there a way to schedule payments for partially completed services?

 

A.  Contractual payments can be scheduled over the life of the contract.  Departments often question how to schedule payments when a vendor submits an invoice for a portion of the total work to be performed.  Staff at the Expenditure Assistance and Audit (EAA) section of the Comptroller's office offers the following guidance:

 

Agencies may enter into contracts where a vendor must provide all services before the agency initiates the payment.  Agencies may also enter into contracts where the vendor bills in stages of completion for services.  Once a stage is complete, in accordance with the contract, and the vendor provides an undisputed invoice for that portion, the agency may schedule the payment.  Either arrangement – payment for completed services or payment for a completed stage of a service contract – complies with payment scheduling policy. 

 

Here’s an example of billing for portions of a service.  Your agency hires a consultant to study your agency’s operations and recommend ways to reduce costs.  The contract stipulates that the consultant will provide three reports:  a preliminary report due February 1, 2007; a full report due May 1, 2007; and an implementation plan due August 1, 2007.  The contract also stipulates that the consultant will bill your agency $15,000 after each report is delivered. 

 

The consultant delivers the preliminary report on February 1, 2007 as the contract requires.  Your agency receives a correct invoice on February 5, 2007.  The payment due date is March 7, 2007 – 30 days after both the service and invoice are received.  The same logic would apply to the two subsequent payments.  To see the State Comptroller’s prompt payment ad payment scheduling site visit UHV Contract Administration home page.

 

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16.  Q.  Where are original contracts kept for the University?

 

A.     The Department of Business Services is the repository for original contract documents with the exception of the following:

·         Employee contracts retained in Human Resources

·         Grant agreement retained in Research Department

Original contracts and supporting documentation executed prior to 9/1/07 are retained in accordance with the approved UHS Record Retention schedule.  Contracts and supporting documentation executed after 9/1/07 (FY08 and beyond) are scanned into LaserFiche and retained in electronic document format.  Original hard copy documents will be retained for 1 year after electronic conversion.

 

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17.  Q.  Where can I find more information?

 

A.  Go to the Business Services home page and click on Contract Administration and see the section titled Other Related Links.

 

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