Contract General Guidelines

 This procedure is issued to establish effective guidelines for the contract processing procedures and applicable laws and regulations.

Definitions

 "Agreement" or "Contract" – These terms are used interchangeably and defined as any kind of terms or conditions to which a contractor/vendor requires for the University to be bound.

 "OGC" – University of Texas System Office of General Counsel

 "Board of Regents" - The government of the University System is vested in a board of nine regents appointed by the governor with the advice and consent of the Senate. The "Board" may provide for the administration, organization, and names of the institutions and entities in The University of Texas System in such a way as will achieve the maximum operating efficiency of such institutions and entities. (See Texas Education Code Sections 65.11 et seq.)  

 "Docketing" - The docket for The University of Texas System is a list of items in a consistent summary format. These items require reporting to the Board based on recommendations following their administrative approval by the appropriate System Administration Official. Dockets become a part of the official minutes of The University of Texas System Board of Regents’ Meetings.

 "RFP" - Request for Proposal

 "RFQ" - Request for Qualifications

 "RFO" - Request for Offer

 "SOW" - Scope of Work - terms and conditions that the contractor and University have agreed upon as mutually acceptable.  

Overview

 In determining the need for a formal contract, several issues must be reviewed. In general, the Contract process is much less efficient than the procedures used when issuing Purchase Orders. Purchase Orders however, may not protect the University from potential risks in the same manner as a formal contract. In determining the need for a formal contract as opposed to a Purchase Order, buyers must weigh several factors such as risk, complexity, dollar amount, and efficiency.

 The proper procurement method must first be determined. Most contracts are established as the result of an RFP, RFQ, or RFO process (which allows for negotiation), rather than from a bid. A primary rationale for establishing any contract is to finalize the actual SOW. The bid process assumes all terms, scope, and/or specifications are extremely clear in the procurement stage. Acceptance of the services or commodities resulting from a bid, as opposed to an RFP for instance, should simply be a matter of “awarding” to a vendor precisely what was stated in the bid documents. Considering these factors, a complete understanding of the contractual process is not possible without a thorough knowledge of the RFP procedures. Buyers must therefore, familiarize themselves with the details of the RFP process. A sample contract should always be included with the RFP solicitation if a contract will be implemented.

 Financial Risks: All procurements must follow the delegation of authorities  and UTS 145 - Processing of Contracts. Note: When establishing the monetary value, the full estimated amount of the contract must be considered rather than merely the financial commitment per fiscal year. 

Examples/Guidelines necessitating possible contracts.

1. If the complexity of the procurement is such that a purchase order will not sufficiently protect the University from the potential risks.
2. Procurements involving extensive and prolonged use of campus facilities by the contractor (i.e. temporary services contracts).
3. Procurements exceeding the delegated authority of the Purchasing Office and/or the President’s delegation.
4. Revenue – Generating Contracts
5. Auxiliary Services Contracts 
6. Space Lease Contracts 

If it is deemed that a purchase order or Notice to Proceed is sufficient and a contract is not necessary, the award must reference the terms and SOW in the RFP solicitation.