Contract Administration

Contract Administration Understanding the Policies and Procedures (Fall 2008)

Today’s Session • What’s on the Horizon? • Overview of Contracting Process • Basic Contract “No Can Do’s” • FAQ’s • Quick Walk Through the Contracting Process • Key Things to Remember • Questions and Answers • Contracting Quiz

Today’s Session • What’s On the Horizon? • Overview of the Contracting Process • Basic Contract “No Can Do’s” • FAQ’s • Quick Walk Through the Contracting Process • Key Things to Remember • Questions and Answers • Contracting Quiz

What’s On the Horizon? • New Contracting Website (February 2009) • Website more efficient and user friendly • http://devstaging.uhd.edu/facultyandstaff/contracts/ • Heightened Focus on MySafeCampus • Anonymous reporting system for fraud/questions • http://www.mysafecampus.com/ • Contract Requirement for P-Card Usage • Updated Policy Statement 05.C.09 General Procurement/ Procurement Card (final approval pending)

What’s On the Horizon?New Contracting Website (February 2009) • The Contracting Website was redesigned to provide more information and allow “one click” access to frequently used documents from the home page. • Center Section: Basic contracting information • Right Hand Section: Quick access to frequently used documents and frequently asked questions • MySafeCampus Icon: Information and instructions on filing an anonymous report or asking an anonymous question about fraud • Sliding Bars on the Left: Detailed contracting information and links • http://devstaging.uhd.edu/facultyandstaff/contracts/

What’s On the Horizon?Heightened Focus on MySafeCampus • MySafeCampus is an anonymous and confidential reporting system that allows individuals to ask questions, clarify issues and report suspected fraud at UHD. • Fraud is the use of your occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets. Fraud is normally considered to be a criminal act. • Examples of fraud include: • Awarding contracts to friends or relatives • Seeking or accepting gifts or favors from vendors or contractors in exchange for placing orders or awarding contracts

What’s On the Horizon?Heightened Focus on MySafeCampus • Examples of fraud not related to contracting include: • Falsifying timesheets • Falsifying expense reimbursements • Stealing property or supplies • Personal use of university assets (occasional local phone calls are okay) • Outside employment that conflicts with university employment • Awarding scholarships/grants based on personal or financial relationships as opposed to merit • Purposefully falsifying financial statements • Stealing cash or checks • Personal use of university credit cards or long distance codes • http://www.mysafecampus.com/

What’s On the Horizon?P-Card Usage • UHD Policy Statement 05.C.09 “General Procurement/Procurement Card had been updated (final approval pending) to include the following: • P-Card payments on contract items require a copy of contract as supporting documentation (4.3 Supporting Documentation – paragraph A.) • 3.12.B Unauthorized and inappropriate use of the Procurement Card include: • 3.12.4 - Consulting Services • 3.12.11 – Transactions greater than $5,000. Splitting purchases between two of more transaction to stay under the $5,000 purchase limit is prohibited • 3.12.20 - Items charged to contracts/grants that are not allowed by the sponsor

Today’s Session • What’s On the Horizon? • Overview of Contracting Process • Basic Contract “No Can Do’s” • FAQ’s • Quick Walk Through the Contracting Process • Key Things to Remember • Questions and Answers • Contracting Quiz

Overview of the Contracting Process • Terms and Conditions • Leases • Letters of Agreement • Memoranda of Understanding • Letters of Intent • Interagency or Intra-system Agreements • What is a Contract? An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable by law. This includes but is not limited to:

Overview of the Contracting Process • The UHD contracting process was developed based upon UHS and UHD policies which incorporates state regulations. The two key documents (part of the hand-out package) are: • System Administrative Memorandum (SAM) 03.A.05 Contract Administration • UHD Policy Statement 05.A.06 Contract Administration Policy

Overview of the Contracting Process • Predefined consequences for violation of contracting policy - At a minimum: • Tier 1: Notification to employee regarding corrective action provided throughout the contracting process • Tier 2: Accounts Payables "Violation of UHD Policy Statement" • Serious Violation/Fraud: Disciplinary action up to and including termination

Overview of the Contracting Process (cont.) • The Contract Cover Sheet is an internal document, the beginning of the contracting process and has a two-fold purpose: • Page 1: Summarizes the information about the contract for the Contract Administration Office and the UHD signatory • Page 2: Serves as a questionnaire to inform the user of the steps required to be in alignment with UHS and UHD policy The Contract Cover Sheet is updated on an ongoing basis as related policies and new situations occur. Effective 3/25/08, the revision date was included on the cover sheet.

Basic Contract “No Can Do” • You cannot contract on a retroactive basis University of Houston System Administrative Memorandum 03.A.05 Contract Administration 2. POLICY 2.3. All contracts shall have all applicable administrative and legal reviews completed and be signed by all parties prior to commencement of any duties/actions by the parties as stipulated in the contract.

Basic Contract “No Can Do” • You cannot contract with a UHS employee or someone who has been employed by UHS in the past twelve months University of Houston System Administrative Memorandum 02.A.24 Employees and Independent Contractors 3.2. Under provisions of State and federal law, an individual may not be hired as an independent contractor when currently on the payroll of any component university. Similarly, State law requires that an individual may not be hired as a consultant on an independent contractor basis if employed by any component of the System during the previous twelve month period.

Basic Contract “No Can Do” • You cannot sign a contract for UHD unless you have written authorization from the UHD President to do so UH-Downtown Policy Statement 05.A.06 Contract Administration Policy 2. POLICY/PROCEDURES 2.1 All delegations of contracting authority must be made in writing, approved by the President, and filed with the Board. No employee, officer, or agent of the University shall have the authority to execute contracts unless expressly delegated such authority pursuant to this policy.

Basic Contract “No Can Do” • All contracts have to be reviewed by the Office of General Counsel and signed by all authorized individuals before work or service begins University of Houston System Administrative Memorandum 03.A.05 Contract Administration 2. POLICY 2.3. All contracts shall have all applicable administrative and legal reviewscompleted and be signed by all parties prior to commencement of any duties/actions by the parties as stipulated in the contract..

Basic Contract “No Can Do” • You cannot place an order with a vendor or pay the contracted amount for services to a vendor if the vendor is “On Hold” with the State of Texas (i.e., owes the State of Texas money) State Law (Texas Government Code 403.0551) § 403.0551. DEDUCTIONS FOR REPAYMENT OF CERTAIN DEBTS OR TAX DELINQUENCIES. (a) Except as provided by Subsections (b) and (d), the comptroller may deduct the amount of a person's indebtedness to the state or tax delinquency from any amount the state owes the person or the person's successor.

FAQ’s - Do I Need a Contract? • A contract is required if the subject matter of the transaction involves: • Human performance that renders a service on campus; or • An off-campus event that requires facilities, catering or service specifically for the University.

FAQ’s - Do I Need a Contract? (cont.) • A contract is not required if the purchase: • Is for commonly available goods, such as office supplies • Is for a nominal service such as a typewriter repair • Can be made through Texas Comptroller of Public Accounts or DIRect (DIR) [Note: Contact the Purchasing Department (713) 221-8607 to determine the availability of this option.]

FAQ’s - Do I Need a Contract? (cont.) • A contract is not required if the purchase: • Is off-campus, not associated with a major UHD event and not specifically for UHD, i.e., is available to the general public at the same time. (This includes food ordered from a menu at an off-campus restaurant and taking a group to a public facility such as a museum.) • Is for travel arrangements made through UHD's Travel Office for a guest speaker or consultant, AND no additional monies will be paid or reimbursed to the individual.

FAQ’s - Who Can Sign a Contract? • Persons who have written authorization from the UHD President can sign a contract for UHD • Authorized signatories are listed on the Contract and Guidelines website as follows: UH-Downtown Policy Statement 05.A.06 Contract Administration Policy 2. POLICY/PROCEDURES 2.1 All delegations of contracting authority must be made in writing, approved by the President, and filed with the Board. No employee, officer, or agent of the University shall have the authority to execute contracts unless expressly delegated such authority pursuant to this policy.

FAQ’s - Who Can Sign a Contract?

FAQ’s - Who Can Sign a Contract? (cont.)

FAQ’s - Is Competitive Bidding Required? • Competitive Bidding isrequired on all: • Service prior to execution of the contract if the value of the contract is expected to equal or exceed $5,000 in state or local funds. Contact Purchasing at (713) 221-8062 for assistance in the bidding process

FAQ’s - Is Competitive Bidding Required?(cont.) • Competitive Bidding is not required for: • Services that cost less than $5,000 • Professional or Consulting services • Proprietary/Sole Source or “One-of-a-kind” services • Workshops, training or seminars • Advertising • Hotels for special events • Internal repairs • Interagency agreements

FAQ’s - Do I Need a Purchase Requisition? • For contracting, a Purchase Requisition is always required for: • Higher Education Assistance Funds (HEAF) transactions • Software purchases • State contract items • Otherwise, a purchase requisition is required if the cost of the service is equal to or expected to exceed $5,000

FAQ’s - Which Contract Should I Use? During FY08: • (43%) Purchasing Agreement for Goods and Services • Used for businesses that do not require insurance (i.e. lecturers, guest speakers or individuals performing a service) • (13%) Vendor Contracts • Require OGC review and approval • (12%) Job Order • Used to put a contract in place for future maintenance, repairs and installation on an as needed basis. Once the contract is fully executed, the Job Order – Exhibit A is used to contract for specific jobs under the contract

FAQ’s - Which Contract Should I Use?(cont.) During FY08: • (7%) Letter of Contract • Used for construction, repairs and rehabilitation • (6%) Independent Contractor Agreement • Used for businesses or vendors providing a service that require insurance coverage • (6%) Performer Agreement • Used for musicians, singers, clowns, magicians, etc. The remaining 13% of contracts were either department specific or used infrequently

FAQ’s - What Special Requirements Should I Know About? • Texas Market Place - Procurements of $25,000 or more must be posted for: • 14 days if the entire bid or proposal solicitation package is posted, or • 21 days if the entire bid or proposal solicitation package is not posted Expect the process to take a minimum of 30 calendar days prior to the start date of services

FAQ’s - What Special Requirements Should I Know About?(cont.) • Consulting Services Contracts over $25,000 (was $14,000) require: • Legislative Budget Board (LBB) and Governor’s Office of Budget and Planning (OGBP) notification through OGC. OGBP must provide a “finding of fact” that indicates the service is necessary. • The request for consulting services must be published in the Texas Register a minimum of 30 days prior to execution of the contract. (Process typically takes 6 weeks.) • Notice must be filed with the LBB for contracts over $14,000 no later than 10 days after entering into the contract, renewal, extension or amendment. Reference: Texas Administrative Code, Title 34, Part 1, Chapter 5, Subchapter E, Section 5.54.

Quick Walk Through the Contracting Process • The process begins with the Contract Cover Sheet • Check the “No Can Do” list before you begin the process • Use the most current Contract Cover Sheet (dated and posted on the website) • Be sure to read through and answer the questions on page two • Be sure to attach a vendor verification form • Get the appropriate signatures on the Contract Cover Sheet • The Contract Cover Sheet is a UHD internal document reviewed by our office. Suggestions/revisions/corrections are communicated and a contract number assigned

Quick Walk Through the Contracting Process (cont.) • For OGC approved contracts on the website, select and complete the correct contract: • Include the assigned contract number • Include a clear and specific description of the scope of work in the contract • Our office will be happy to review your contract before it is forwarded to the vendor • Your office will work with the vendor and forward a fully executed original signature contract to the Contract Administration Office (3 original signature contract packages)

Quick Walk Through the Contracting Process (cont.) • For non-standard, vendor or revisions to contracts that went through OGC, the Contract Administration Office will handle the process and return a fully execute contract to your office • We will need the completed and signed Contract Cover Sheet and preferably an electronic copy of the vendor contract The Contract Administration Office will be happy to address any questions or concerns you have regarding the contract or the contracting process

Key Things to RememberContract Timing • Allow your self enough time to complete the contracting process • Departments should have all standard contract documents in order and submitted for UHD authorized signature at least 5 business days prior to the start date for services if using an OGC standard form of agreement • The contract must be fully executed on or before the date when services begin • The earliest day a contract can begin is the “date of full execution of the agreement”

Key Things to RememberContract Timing (cont.) • Allow your self enough time to complete the contracting process (cont.) • Texas Market Place ($25,000 or more): Expect the procurement process to take a minimum of 30 calendar days prior to the start date of services • Consulting contracts over $25,000 must be published in the Texas Register a minimum of 30 days prior to execution of the contract (Processed through the Office of General Counsel)

Key Things to RememberOGC Contract Review • All non-standard (vendor contracts) or revised contracts must be reviewed by the Office of General Counsel (OGC) • OGC is allowed 20 days to review the contract, but in some instances, it may take longer • Allow enough time for the contract to be approved, revised and be fully executed by the requested date. You cannot add to, change or delete the terms of an OGC approved contract

Key Things to RememberFacsimile Contracts • Executing contracts through facsimiles should only be done in certain limited situations. If the contract is executed via fax: • An original signature contract must be submitted to the administrative file within 10 business days after the faxed contract has been executed (SAM - 3. General Provisions and 3.1 Contract Management) • University of Houston System Administrative Memorandum • 03.A.05 Contract Administration • 3. GENERAL PROVISIONS • 3.1. Contract Management: • a. “… Although original and signed contracts are required by this document, certain limited situations exist…that may require facsimile copies of the contract and contract signatures so that contract performance may begin. In these rare and limited situations, original signed agreements (not facsimiles) must be forwarded to the originating unit within 10 business days from the date the contract facsimile is received and processed by the originating unit and/or applicable contracting office.”

Key Things to RememberFacsimile Contracts (cont.) • Executing contracts via fax: • The same signatories who signed the faxed contract must sign the original signature contracts • The original signature contract must have the same signature date that appears on the faxed contract– please verify the date The contracting package is not complete until an original signature contract, with the correct signatories and the correct signature dates has been received by the Contract Administration Office

Key Things to RememberAmending the Contract • The general rules for amending a contract are: • The contract must still be in effect (You cannot amend an expired contract) • You can increase the dollar value of the contract by 25% (Beyond that dollar value, you are more than likely contracting for a substantially different scope of work) • The amendment must go through the same process as the original contract • The amendment must be executed by the same signatories (or same signatory position)

Key Things to Remember Miscellaneous • Complete three (3) sets of original signature contract packages (One each for the vendor, your office and the Contract Administration Office) • Consider multiple year contracting if you contract for the same service from the same vendor on an annual basis (You can sign contracts for up to five (5) years) • The Nonresident Alien form is attached to the contract and signed only if it is applicable to the person

Key Things to Remember Miscellaneous • There should be no “white-outs” on the contracts • Other than initialing OGC revisions, the signature and the date, there should be no hand writing on the contracts • The earliest start date for a contract is “the date of full execution of the contract (i.e., the date all required and authorized parties have signed the contract)

Questions ? ? ? ? ?

Contracting QuizMark all correct answers • Questions may have more than one correct answer • Each correct answer for questions 1 through 10 is worth 2 points • Each correct bonus questions is worth 10 points

Contracting QuizMark all correct answers • The UHD contracting process: • Was developed based upon UHS policy • Was developed based upon UHD policy • Was designed to meet State of Texas regulations • Was designed to be user friendly • All of the above

Contract Administration