Contract Administration

WorkshopPresented by: Lorie Messer

Objectives of the Workshop

Definition & basics of a contract Responsibilities of the Department Success & Challenges of Contract

Administration How to review a contract Different types of contract forms Contract *Delegation of Signature

Authority

Definition of Contract

A binding agreement between two or more persons or parties; especially: One legally enforceable.

A business arrangement for the supply of goods or services at a price.

Contracts are agreements which create an obligation to do or not do a particular thing.

Written contracts should be executed whenever TAMU-CC enters into a binding agreement with another party that involves any stated or implied consideration.

Definition of Contract Continuation Contracts are construed to include, but not be limited to,

the following: Purchase Orders, Agreements, Cooperative

agreements, Memorandums of Understanding, Interagency contracts, Grants, Loans, Easements, Licenses, Leases, Permits & Restrictions on acceptances of gifts, Stipends & Bequests (will).

Other parties include, but are not limited to:Federal, state and local agencies, non-profit

organizations, private businesses, partnerships & individuals.

“Contract Administration” Built Upon Six Questions

1. What is to be accomplished by this agreement?Ensure the contract contains provisions that hold the contractor accountable for producing desired results. Stay within budget. Has to be clearly understood & defined.

2. How is this project to be accomplished?Involvement must be present from the start.

3. Does a certain sequence need to be performed in an orderly fashion?Yes, through the Procurement Cycle sequence needs to be identified.

“Contract Administration” Built Upon Six Questions

4. When should these objectives or steps be satisfied?During the term of the Contract.

5. Who are the responsible parties?The party responsible for delivering the goods.

6. What is the cost & payment terms?Important: Know how the cost was calculated.Terms are net 30 days after receipt of goods.

6- Factors to create a Contract1. An offer & Acceptance

2. Legal Purpose

3. Mutuality of Obligation, also known as “meeting of the minds”

4. Consideration

5. Certainty of Competent Parties

6. Subject matter

Contract Administration

Contract Administration is often one of the most neglected parts of the procurement process.

Good Contract Administration requires dedication and persistence.

The intensity and manner of contract administration will depend of the type of contract involved. Small dollar contracts with short durations or procurements for a one-time purchase may take less administration than those for large dollar projects of a lengthy duration.

Contract Administration is a critical element in the procurement cycle, and must be carried out in all public purchasing operations.

Contract Routing Cycle Read Contract and have a full

understanding If it involves $$$ - Create a limited or

Requisition in FAMIS & route for approval If no $$$ involved – Fill out Contract

Transmittal form & have department head sign

Route Contract to Purchasing Dept for review

Cont… Contract Coordinator will review and/or

modify, & contact the Company with any changes.

Reviewed contract will be given to the Buyer if it is encumbered in a Requisition or send back to the Dept. if it’s on a Limited.

If the Contract is encumbered on a Requisition, the Purchasing Dept. will mail out to the vendor for signature and provide the Dept. with a copy.

Contract Management Plan: Identify contracting objectives & contracting

strategies Procurement: Fairly & objectively select the most

qualified contractors Contract Formation: Ensure the contract contains

provisions that hold the contractor accountable for producing desired results

Rate/Price Establishment: Establish processes that are cost-effective & aligned with the cost of providing the goods & services

Contract Oversight: Monitor & enforce the terms of the contract and completion of contract

DON’T FORGET TO SET UP THE VENDOR IN FAMIS SYSTEM!

TAMU-CC Contract Addendum Form

to Vendor’s Contract

Used to expedite vendor’s Contracts Has all TAMU-CC Terms & Conditions Legally binding Can be found in our Website

http://falcon.tamucc.edu/~purchase/http://falcon.tamucc.edu/~purchase/

Determining TAMU-CC Employee

or ‘Independent Contractor’ (20 Factor test form)

Must fill out 20 Factor Test FORM to make the determination

20 Factor Test form needs to be routed through Purchasing Dept.

An Employee is

An individual who performs a service for the University and is working under the direction & control of the University & its employees.

Independent Contractor

☻Is an individual engaged by the University to perform a specific task & who is free to perform this task completely at the individual’s own discretion with regard to means & methods.

Definition of Contract Workforce

The State of Texas defines “ContractWorkers” as:

▪ Independent Contractor’s▪ Temporary workers (supplied by staffing company)▪ Contract company workers▪ Consultant (means the practice of studying & advising a University in a manner not involving the traditional employer/employee relationship).

If a contract is over $10,000 & using “State funds”, a Contract Work force analysis form must be completed & sent to the Purchasing Department.

Contract Workforce RequirementsContinuation P-2

●The contractor’s “Work force analysis form” could be audited & reviewed by the State Auditors Office in Austin.

●Must ensure that the contract worker fits into the Universities goals & objectives including:● Compensation cost● Productivity● Nature of services to be provided ● The workload

TAMU-CC Contract/Agreement Short Form Used for Contracts under $50,000 Page -1- Must fill out All the information Page -2- to Enter Detail Costs if not lump

sum Page -3- Instructions for completing the

form Can be found in our website!!!

Misc. Contract Information

Dept. Heads can sign up to $5,000 ONLY if using “TAMU-CC Contract Form”

Should not exceed Five (5) Years If Contract exceeds 5-years, must be

approved by the “Board of Regents” If over $50,000 needs Legal Review Real Estate, regardless of $ needs to

go through TAMUS for review

Areas where Contract Administrators are involved: Ensuring

Compliance of the Contract

Meets Milestones Avoid “Risk”

Regarding Liabilities Communicate

Internally and Externally

Maintain a Professional Relationship

Ethics in Administering a Contract

Integrity Fair Dealings Confidentiality Keep Favorable the Relationship Maintain Impartiality -

Reasons for Problems in Contract Administration Lack of Effective Communication Inadequate Record keeping Improperly Developed Specifications “Fuzzy” Language Lack of Timely Notices Unable to Meet Terms Poor Selection of Contractors Improper Reimbursement Methods -

Compensation Section

Price set amount Fixed Price Contract Cost Plus Expenses Hourly Rate -

Contract Termination

TerminationFailure to Meet Contractual ObligationGoes into BankruptcyUpon Tender of Notice to Seller

Conveniences Default -

Satisfactory Completion

Prepare Final Contract closeout and Inspection

Properly Close File w/all required documents

Notify Purchasing Department of Contractor’s Performance

Delegated Authority TAMU-CC

PRESIDENTOVER $200,000

VICE-PRESIDENT&

PROVOST$100,000 - $200,000

EXECUTIVE VICEPRESIDENT

FOR FINANCE & ADMINISTRATION$100,000 -$200,000

PURCHASING DIRECTOR&

HUB PROGRAMSPurchase Orders & other contracts

$0 - $100,000

GRADUATE DEAN &

ASSOCIATE VICE-PRESIDENTFOR RESEARCH

Grants & Sponsored programs$0 – 100,000

Certain Contracts Must be Approved by the Board of Regents

Refer to TAMUS Policy 2507)

SponsoreSponsoredd

ProgramsPrograms

Services &Services &

GoodsGoods

Delegation of Authority

To determine who is “authorized” to sign any type of Contracts refer to the 2007 TAMU-CC Delegation of Authority for Contract Administration.

This form can be found in our Website:

http://falcon.tamucc.edu/%7Epurchase/

ARAMARK CONTRACT Has “exclusive” rights for campus food &

catering READ Food Services “Campus Food

services Rules” for exemptions MUST fill out form – and be Approved

before you can be exempt For more info Contact: Liz Atkinson X-5710

Texas A&M University-Corpus Christi “Contract/Agreement" Form Approved by the Office of General Counsel “Template” to use for TAMU-CC agreements-

Fill in the blanks (i.e., Scope of Services) Make sure you select the correct information

that applies (i.e., Reimbursement for travel, etc.)

Has all TAMU-CC terms & conditions

TAMU-CC Contract Review Checklist Form

This is suggested as a useful tool for your

department.

It is not mandatory.

It is intended as a guide only.

TAMU-CC Contract Review Checklist Form

This is suggested as a useful tool for your

department.

It is not mandatory.

It is intended as a guide only.

Texas A&M UniversityContract Administration

Contact: Lorie Messer Contract Coordinator

Lorie.messer@tamucc.edu

Tel: 825-2166, Fax 825-2772

Need

The End

Texas A&M University-Corpus Christi

Purchasing Department

Judy Harral, Purchasing Director

361-825-5936

Lorie Messer, Contract Coordinator

361-825-2166http://falcon.tamucc.edu/http://falcon.tamucc.edu/

~purchase/~purchase/