Contracting on Behalf of the University
The establishment of properly authorized contracts based on sound business practices, prepared in accordance with State of Illinois Procurement Code and Comptroller’s guidelines, provides the University with the necessary documentation to insure delivery of materials and services while adhering to State purchasing requirements.
Two-party contracts are required for consulting and professional and artistic services that are $5,000 in expected cost; or construction, supply or other services that are $10,000 or greater in expected cost. They are used regardless of funding source: i.e., grants, local or general revenue funds. A contract is issued in conjunction with the purchase order to outline and define a supplier’s specific service responsibilities and obligations. The contract documents the specific terms and conditions of the expected services and ensures that potential disputes will be minimized.
It is in the best interest of the University to construct our contracts with a vendor with as much specific information pertaining to the service expectations as possible. A written contract contains the terms and conditions that will determine the rights and duties of the parties and provides the basis for resolving disputes. It spells out specific certification clauses required by State law. It is forward looking and contemplates future conduct with an eye toward the risk of supplier nonconformance or non-completion of the contract terms and conditions.
Contents of a Contract
A very common type of contract for services is a consulting contract. A well-constructed consulting contract should spell out such things as:
• A scope statement of the work to be performed
• When the task will begin and end
• How satisfactory completion of the work is to be determined
• A project timeline with a statement of performance deliverables and reporting requirements
• A breakdown of costs by hourly rates; fixed costs; reimbursable expenses; and “not to exceed” amounts
• The method, determination, and frequency of progress payments
• Insurance or bonding requirements, if applicable
• The University contact person
• The responsibilities of the University
• Conditions of termination
• Provide an option for post contract performance review
In addition, the contract should specifically refer to any documents that were issued to create the final understanding of the service to be provided. These documents may include the following:
• A copy of the Request for Proposal, or copy of the expected performance specification
• A copy of the supplier proposal
• Copies of any referenced price sheets; discounts; or hourly labor and service rates
• Negotiation results
• Meeting minutes
• Last minute changes
• Specifications or drawings
• Certificate of insurance or performance bond, if applicable
• Letters of reference and credentials
A well written contract is essential to the execution of a smooth relationship with the supplier.
Nothing should be left to chance. The contract should reduce to writing anything that was part of a verbal understanding or a handshake agreement. The contract must include the necessary performance; the baseline for measuring performance; reviews; reporting requirements, and deliverables required for payment. Both parties must understand their rights and obligations in
Each University contract must be signed by one of the University representatives specifically authorized to sign contracts on behalf of the University. To insure compliance with this requirement, unsigned contracts must be sent to the Purchasing Department for signature. If a purchase order is required in conjunction with the contract, the purchase order can not be issued until contract approval is attained. The State of Illinois requires by statutory authority that all contracts be filed with the Illinois Comptroller’s Office within 15 days of the signing of the contract.
Additionally, contracts in the amount of $19,999.99 or greater may require advertisement on the Illinois Public Higher Education Procurement Bulletin for competitive sealed bidding. Sufficient time must be allowed for this process. Each University contract must also be signed by one of the University representatives specifically authorized to sign contracts on behalf of the University. To insure compliance with these requirements, unsigned contracts may be sent to Purchasing for determination of bid or to facilitate the signing of the contract by an authorized University representative.