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CONTRACT MANAGEMENT GUIDE. Contract Administration Office of the Vice President for Finance and Administration Texas A&M Health Science Center. CONTRACT APPROVED. Mission .
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CONTRACT MANAGEMENT GUIDE Contract Administration Office of the Vice President for Finance and Administration Texas A&M Health Science Center
CONTRACT APPROVED Mission Contract Administration's mission is to guide our campus clients through the complex contracting processes to achieve their contract needs.
Contract Management • Planning • Procurement • Contract Formation • Rate/Price Establishment • Contract Administration
Contract Management There is no single “right” way to contract.
Contracting Management Framework • Planning:Identify contracting objectives and contracting strategy. • Procurement:Fairly and objectively select the most qualified contractors. • Contract Formation: Ensure the contract contains provisions that hold the contractor accountable for producing the desired results. • Rate/Price Establishment:Establish processes that are cost-effective and aligned with the cost of providing the goods and services. • Contract Administration/Oversight: Monitor and enforce the terms of the contract.
Number of New ContractsProcessed in FY 2007 BCD 72 CBHEC 85 COM 52 HSC 88 IBT 18 PHARM 59 SRPH 22 Total: 396
Contract Management Guide • Transactions involving furthering research projects must be processed through the Office of the Vice President for Research and Graduate Studies. • New process – Contract Administration to serve as single point of submission of all contracts. Research Research
Applicability This Contract Management Guide is intended to supplement A&M System policies and regulations on contracts and provide guidance in complying with: SPRM 25.07: Contract Administration SPRM 25.07.01: Contract Administration Procedures and Delegations SPRM 25.99.02: Component Purchasing Authority TAMUS Procurement Code State of Texas Contract Management Guide State of Texas Procurement Manual
Purchase Order or Contract? • If vendor/other party accepts HSC term and conditions and does not require a signed contract, a purchase order may be used to obtain commonly available goods and services in excess of $5,000.00. • If the subject matter of the transaction involves human performance, such as rendition of services, then a contract should be used.
Best Value in Contracting • The HSC member department may acquire goods or services by the procurement method that provides the best value, including competitive bidding and competitive sealed proposals. • ALL purchases of goods in excess of $5,000.00, and services in excess of $5,000.00 per year, must go through HSC Procurement Services regardless of contract document form. • The Recommendation for Award must provide information pertinent to procurement method, price tabulations outlining the acquisition process, basis of best value to the HSC member department and name of the preferred vendor.
CONTRACT APPROVAL PROCEDURESFLOWCHART Originator negotiates with one or more other parties to create contract. Contract originals (two originals) may be sent to Contracts Administration with Transmittal Form. Contract entered into database. Contract Administration reviews contract. If contract found not sufficient. Originator returns contract to Contracts Administration for further review. Contract found sufficient. Originator asked to make changes.
CONTRACT APPROVAL PROCEDURESFLOWCHART Is contract over $50,000? Is contract developed by other party? If the answer to one of the questions is yes. Contract is forwarded to the HSC Chief Legal Officer for review. If contract is found not sufficient. Contract found sufficient Contract returned to Contracts Administration. Originator asked to make recommended changes. Originator returns contract to Contracts Administration for further review. Contract Administration updates database.
CONTRACT APPROVAL PROCEDURESFLOWCHART Contract found sufficient Contract Administration advises originator the contract is ready to begin routing. A transmittal form needs to be completed by the originator. Two unsigned originals of the contract should be attached to the transmittal form. Originator obtains necessary signatures for the transmittal form up to Dean/Director level and returns contract and transmittal form to Contracts Administration. Contracts Administration routes to appropriate HSC signatories and to the other party for signature. After final signature is received, HSC Contracts Administration keeps one fully executed original and if necessary sends the other fully executed original back to the other party. One PDF copy of the fully executed contract is forwarded to the originator for recordkeeping.
Proper Contract Form • Standard Form of Agreements: Standard agreements are forms that have been approved as such by the A&M System Office of General Counsel (OGC). Review by OGC is unnecessary for a standard form of agreement for three years unless substantive changes have been made to the agreement. • Other Contracts:Other parties prefer to use their contract for a transaction. If a non-standard contract will be used for a transaction, the contract must be submitted for review to HSC Chief Legal Officer and/or OGC as to form and legal sufficiency.
Completing the Contract • All contracts must be submitted to the HSC Office of Contract Administration for compliance review. • All contracts must be complete and all necessary information must be type written. • Attach all necessary contract addenda. • After compliance review, the signatures of persons or officials with delegated authority must be obtained.
Completing the Contract • No contract shall be routed to the other party for review or signing without prior approval from HSC Contracts Administration. • All contracts must have applicable contract administrative and legal reviews and appropriate signatures prior to performance by the parties as set forth within the contract.
Signatures of Authorized Representatives of the Parties • Signatures. No person has the authority to bind the HSC contractually except in accordance with A&M System policy. Else, the person could be held personally liable. • Contracts are legally binding on the HSC only upon signature by an HSC official with delegated contractual signatory authority (Delegation of Authority Matrix).
Processing Contracts • The following must be submitted to the Office of Contracts Administration: • Twooriginals of the contract; • At least two originals of all other contract addenda that are required for processing the contract, as discussed in this Management Guide, if not included within the body of the contract itself; and • Completed Contract / Agreement Transmittal Approval Form.
Processing Contracts • When the Office of Contracts Administration receives contracts: • The contracts / agreement transmittal approval form is date stamped. • The contract is issued a contract number. • A file folder is created. • The formal review process commences. • Upon completion of legal / administrative review, the contract is then routed to the appropriate HSC official(s) for signature.
Processing Contracts X • After the contract has been signed by all parties: • Contracts Administration will keep one fully signed copy for its file - Contract Repository. • One fully signed original kept by or returned to the other party. • One PDF copy of the contract forwarded to the originating department for recordkeeping. Document Management System Laserfiche
Processing Time Frames • All forms of agreements less than $50,000 must be submitted to the HSC Office of Contracts Administration at least 30 business days prior to start date. • Contracts originating from other party must be submitted at least 45 business days prior to start date.
Processing Time Frames Contracts for Consulting Services (Payment of more than $15,000 will be made) • Submitted at least 60 business days prior to the start date for services. Why? The additional time is to notify the Governor's Office of Budget Planning and Policy/Legislative Budget Board and to publish a request for proposal for the consulting services.
Processing Time Frames Contracts for Professional Services (As defined by state law for which the amount of the contract exceeds $14,000) • Contract must be submitted at least 60 days prior to the start date for services. Why? The additional time is to notify the Legislative Budget Board and to publish a request for proposal for the professional services.
Processing Time FramesContracts for which Vice President Recommended/Approval Must be Obtained (Less than $100,000.00) Barry C. Nelson, Ph.D. Vice President for Finance & Administration David S. Carlson, Ph.D. Vice President for Research & Graduate Studies Alicia Dorsey, Ph.D. Vice President for Communications & Program Development Roderick McCallum, Ph.D. Vice President for Academic Affairs David Cantrell, M.A., M.B.A., M.P.A. Vice President for Information Technology and Chief Information Officer NOTE: Rayellen Milburn, CPA, Senior Associate Vice President for Finance & Administration, has delegated authority to sign contracts less than $50,000.00
Processing Time FramesContracts for which President Approval Must Be Obtained ($100,000.00 to $199,000.00) • The contract will require Vice President‘s approval before processing to the President for approval. • Approval by the President may take one week minimum. President and Vice Chancellor for Health Affairs Nancy W. Dickey, M.D.
Processing Time FramesContracts for which Chancellor Approval Must Be Obtained ($200,000.00 to $299,000.00) • The contract will require HSC President‘s approval before processing to the Chancellor for approval. • The Chancellor approval process usually takes at least two weeks minimum. Chancellor Michael McKinney
Processing Time FramesContracts for which A&M System Board of Regents Approval Must be Obtained ($300,000.00 or greater and/or term of contract longer than five years) • HSC member business administrator should contact the Office of Contracts Administration for guidance with Agenda Items for contracts that must be approved by the Board of Regents. The Board of Regents approval process usually takes at least two months. The Texas A&M University System Board of Regents
The Elements of Contract Drafting • Offer and Acceptance • Consideration • Indefiniteness • Enforceability • Capacity • Parol Evidence • Interpretation • Mistake • Force Majeure • Promise and Condition • Modification and Discharge • Warranties • Damages • Operative Language and Boilerplate • Third Parties
Contract Processing Sooner than Later!