U.T. System Administration Delegation of Authority to Sign Contracts

1. U.T. System AdministrationDelegation of Authority to Sign Contracts Dana Hollingsworth, Attorney The University of Texas System Office of General Counsel

2. Actual Authority Required • UT System is a state agency • Actual authority is required to bind a state agency • A state agency cannot legally perform obligations that are agreed to by representatives who do not have actual authority to bind the agency • At UT System actual authority is granted through written delegations of authority from the Board of Regents • Officers and employees of UT System must know whether they have actual delegated authority to act on behalf of UT System (Section 1.6, Rule 10501 of the Regents’ Rules)

3. Primary Legal Bases for Delegation of Authority to Sign Contracts • Sections 65.31 and 65.34, Education Code • Rule 10501 of the Regents’ Rules and Regulations

4. Two Categories of Delegation • Primary Delegation • Secondary Delegation

5. Primary Delegation of Authority • A primary delegate receives authority to sign contracts directly from the Board • The Board delegates primary authority through the Regents’ Rules • The Board may also delegate primary authority through minute orders

6. Examples of Primary Delegation

7. Primary Delegation to the Chancellor Subject to certain exceptions, the Board delegated to the Chancellor authority to execute and deliver on behalf of the Board, contracts and agreements of any kind or nature (Section 2.4, Rule 10501 of the Regents’ Rules)

8. Primary Delegation to the EVC for Business Affairs Subject to certain exceptions, the Board delegated to the Executive Vice Chancellor for Business Affairs authority to execute and deliver on behalf of the Board: • System Administration and System-Wide Contracts • Contracts between or among System Administration and Institutions (Sections 2.5 and 2.6, Rule 10501 of the Regents’ Rules)

9. Primary Delegation to the Vice Chancellor and General Counsel Subject to certain exceptions, the Board delegated to the Vice Chancellor and General Counsel authority to execute and deliver on behalf of the Board: • Contracts for Legal Services and Filing of Litigation • Settlements of Disputes (Sections 2.8 and 2.9, Rule 10501 of the Regents’ Rules)

10. Secondary Delegation • A secondary delegate receives authority to sign contracts from a primary delegate (not from the Board) • The primary delegate identified in the Regents’ Rules may further delegate his or her authority to sign contracts in writing unless otherwise specified in the Rules • Any secondary delegation of authority must be made in writing and the primary delegate must permanently maintain, or cause to be maintained, evidence of all such delegations (Section 1.3, Rule 10501 of the Regents’ Rules)

11. Examples of Secondary Delegation from the Chancellor

12. Examples of Secondary Delegation from the EVC for Business Affairs

13. Examples of Secondary Delegation from the VC and General Counsel

14. Secondary Delegation • A secondary delegate may not further delegate his or her authority (Section 1.3, Rule 10501 of the Regents’ Rules)

15. General Delegation Principles The primary delegate must maintain, or cause to be maintained, necessary and proper records of all contracts, agreements and documents executed and delivered pursuant to his or her delegated authority in accordance with any applicable record retention schedule or policy adopted by the Board or the U.T. institution (Section 1.4, Rule 10501 of the Regents’ Rules)

16. General Delegation Principles All authority to execute and deliver contracts is subject to the Regents’ Rules and compliance with all applicable laws and special instructions or guidelines issued by: • the Chancellor • an Executive Vice Chancellor • the Vice Chancellor and General Counsel (Section 2.1, Rule 10501 of the Regents’ Rules)

17. General Delegation Principles Delegates executing documents on behalf of the Board are responsible for assuring that they have authority to act on behalf of the Board and that such authority is exercised in compliance with applicable conditions and restrictions (Section 1.2, Rule 10501 of the Regents’ Rules)

18. Contracts Requiring Board Approval In spite of delegations of authority to sign contracts made by the Board or a primary delegate, certain contracts still require Board approval, including: • Contracts of such significance as to require the Board’s approval • Contracts Exceeding $1 Million (unless exempted) • Contracts with Foreign Governments • Contracts with Certain Officers • Certain Insurance Settlements • Certain Settlements of Disputes (Section 3, Rule 10501 of the Regents’ Rules)

19. Contracts NOT Requiring Board Approval Certain contracts within the following categories do not require Board approval regardless of contract amount: • Construction contracts and settlements • Intellectual property contracts and proposals • Contracts for replacement equipment and software, routinely purchased supplies, energy resources, and library materials • Purchases made under a group purchasing program • Contracts for approved budget items • Loans to certified non-profit health corporations (Section 2.2, Rule 10501 of the Regents’ Rules)

20. Contracts NOT Requiring Board Approval (continued) • Certain employment agreements, including athletic employment agreements • Contracts related to post season bowl games • Contracts related to a property or casualty loss Be sure to read the relevant Section of the Rules carefully to determine whether a contract falls into one of these exempt categories (Section 2.2, Rule 10501 of the Regents’ Rules)

21. The primary delegatemay further delegate his or her authority to sign contract in writing unless otherwise specified in the Regents’ Rules A secondary delegatemay not further delegate his or her authority Remember: