CONTRACT MANAGEMENTat

William & Mary

04/17/14

Board of Visitors By-Laws delegates signature authority for all transactions to the President and specific areas to the Provost, Vice President for Administration and Vice President for Finance. They have authority to sub-delegate.

Sub-delegations may include contract type and dollar limits as defined by the individual delegating.

All sub-delegations are subject to review and approval by the President, Provost, Vice President for Administration or Vice President for Finance.

SIGNATURE AUTHORITY

The President has the authority to conduct the business of the university and, as such, has the authority to sign any contract, unless reserved to the Board of Visitors.

The Provost holds the principal signature authority for:

◦ sponsored projects (grants and contracts)◦ employment contracts and letters of intent◦ articulation agreements◦ intellectual property rights◦ student or faculty exchange agreements◦ financial aid agreements◦ any other contracts or agreements necessary to carry out and support the

operations of the College, with the exception of matters reserved by the Board of Visitors and those matters delegated to the Vice President for Finance and the Vice President for Administration

Specific delegations from the Board of Visitors

The Vice President for Finance holds the principal signature authority for:

◦ the transfer, conversion, endorsement, sale, purchase, assignment, conveyance and delivery of any and all shares of stocks, bonds, debentures, notes, and subscriptions warrants, cash or equivalent assets, and evidence of indebtedness.

◦ the purchase of real estate and other property or other securities or assets now or hereafter standing in the name of or owned by the BOV or bearing any similar designation indicating ownership by the College. The sale of real property requires the approval of the Board of Visitors.

◦ agreements that set terms for acceptance of gifts◦ any other contracts or agreements necessary to carry out and support the

operations of the College, with the exception of matters reserved by the Board of Visitors and those matters delegated to the Provost and the Vice President for Administration

Specific delegations from the Board of Visitors

The Vice President for Administration holds the principal signature authority for :

◦ agreements for the purchase or rental of services, supplies and equipment, including software and hardware

◦ construction and professional services◦ nondisclosure or confidentiality agreements◦ real estate and property leases or rental agreements◦ capital leases◦ easements◦ equipment leases or (fixed asset) rental agreements◦ student room contracts◦ licensing and trademark agreements◦ any other contracts or agreements necessary to carry out and support the operations of

the College, with the exception of matters reserved by the Board of Visitors and those matters delegated to the Provost and the Vice President for Finance

Specific delegations from the Board of Visitors

Procurement-goods, equipment and/or services◦ Contracts over $5000 total spend must be processed through

procurement office◦ Contracts under $5000 delegated authority must follow

contracting and signatory authority policies. Office of Sponsored Programs (OSP)-sponsored

funding (grants), external funding and research collaborations

Technology Transfer Office –NDAs and data transfer Office of Administration- Property Leases University Counsel-all others

AREAS OF RESPONSIBLITY

By signing a contract you are obligating the university to any and all terms of the agreement◦ Internal consequences-you are accountable for acting in the best

interest of the university including the financial considerations◦ External consequences-your official capacity makes you a formal

representative of the university to the business community

Thus……. Contracting and Signature Authority Policy To sign a contract an employee must have written delegation

to do so. Delegation is granted to specific position & individual and Training is required to receive and retain authority

With authority comes responsibility!

A university contract is any agreement between the university, or any of its subunits (such as the Mason School of Business or the Department of Physics), and a third party that involves a commitment on the part of the university regardless of the source of funds. An agreement is a document that has legal effect, regardless of whether it is called a “contract.”

A contract may involve a commitment of university funds, facilities, employees, or other resources, and/or the use of the university’s name. It may be a commitment for the university to give up a right it otherwise may have.

DEFINITION OF A CONTRACT

OFFER An offer is a proposal to do a thing or pay an amount anticipating acceptance or a counter-offer.

ACCEPTANCE is active or inactive demonstration of acceptance of the offer.

MUTUAL CONSIDERATION exists when each party to a

contract gives up something of legal value.

LEGAL ELEMENTS OF A CONTRACT

IN WRITING?◦ To be enforceable, certain contracts must be in writing

Contracts for the sale of goods over $500 Contracts for the sale of real property Contracts that cannot be completed in one year Promises to answer for or discharge the debts of another

◦ COLLEGE practice demands all contracts are in writing

BUT◦ Courts can and do enforce contracts that are not in writing◦A written contract is presumed to contain all the terms of

the contract.

LEGAL ELEMENTS OF A CONTRACT cont.

A contract by any other name………◦ If there has been an offer and acceptance, mutual

consideration and it is in writing, it is a binding agreement.◦ College examples of contracts are called

Agreement Memorandum of Understanding License Statement Of Intent Covenant Lease Understanding Arrangement

LEGAL ELEMENTS OF A CONTRACT cont.

Anything and everything that matters! Clearly and completely lay out expectations ◦Who◦What◦When◦Where◦Why◦How◦How much◦What If◦Says who

WHAT SHOULD A CONTRACT INCLUDE?

The College of William and Mary in Virginia◦ That is the legal name of the College◦ Various Schools, Departments, Offices Centers are not legal entities and thus

do not possess the authority to contract.

The other party’s legal name◦ Individual◦ Sole proprietorship◦ Partnership◦ Limited Liability Partnership (L.L.P.) or Company (L.L.C.)◦ Corporation◦ Governmental entity

State Corporation Commission: www.scc.virginia.gov

WHO-THE PARTIES

This is the heart of the contract-what the parties will do Clear-who is supposed to do what Complete◦ Everything that matters◦ Everything that should or should not happen◦ Think about what is not in the contract but should be◦ If it is not in the contract, it can not be enforced.

WHAT-THE RIGHTS AND DUTIES

Clarity of College’s expectation of timing

◦Window of performance or◦ Deadline or◦ Specified date

If meeting a deadline is critical, the contract should specify “Time is of the essence.”

WHEN-DURATION AND DEADLINES

Be specific Include enough detail that there is no

misunderstanding of where the activity takes place

WHERE THE PERFORMANCE TAKES PLACE

Not always necessary to include

Often used to define the objective◦ Goal◦ Purpose◦ Context

WHY-BACKGROUND OR PURPOSE

Expectation of how work is performed If nothing is mentioned, contractor can do as they

please and the College cannot compel otherwise Can also be in terms of prohibiting a certain type of

activity without specifying how work is done

HOW-THE METHOD OF PERFORMANCE

Amount◦ Fixed cost◦ Term◦ Cap

Manner◦ Hourly◦ Job◦ Time and materials

Timing-standard Commonwealth terms are Net 30 upon completion and receipt of invoice in Accounts Payable

Down payments and/or deposits are normally unacceptable.

HOW MUCH-AMOUNT AND TERMS

Termination clause necessary◦ Nonperformance or substandard work◦ How to deal with external factors such as weather◦ Ability to terminate contract with notice◦ Define procedure and obligations◦ Typical termination clause

Written notice Opportunity to cure Right to terminate

What if-Performance and Termination

For the College-Those who have signatory authority! Unauthorized individuals who sign contractual agreements on behalf of The College may be held personally liable for those contracts.

For the contractor- must be someone with authority to bind the contractor to the terms and conditions of the contract.

Says Who-Signatures

College form contracts◦ Independent Contractor/Consultant◦ Hotel addendum◦ Standard addendum◦ Speakers◦ Entertainmenthttp://www.wm.edu/offices/procurement/forms/index.php

Contractor form contracts◦ Prefer not to use but if they insist require college addendum

Form Contracts

The required clauses protect the College

Entire agreement-number the pages Sovereign Immunity Modification Applicable Law and Choice of Forum-Virginia Force Majeure Remedies Collection and Attorneys fees

REQUIRED CLAUSES

Indemnification/Hold Harmless Insurance-insured by Commonwealth Arbitration Confidentiality-subject to FOIA Liquidated Damages/lost profits Limited Liability Modification without our written approval

Complete list in Contracting Guidebook

PROHIBITED CLAUSES

Read the contract! ID critical clauses, Terms and Conditions ID team members and responsibilities

Contract AdministrationInitial Steps

Identify deliverables◦Quality, quantity, price, place, time

Understand responsibility for deliverables◦W&M’s and the contractor’s

Assign actions to meet deliverables Track the frequency of the actions needed◦ Daily, weekly, quarterly, etc.

Contract AdministrationAction Plan

Coordinate contract start up Inspect and evaluate progress◦ Coach by pointing out noncompliance◦ Start documentation process

Note needed contract improvements◦ Request contract changes through Procurement Services

Initiate remedial action if necessary Excludes changes to contract provisions Excludes terminating a contract Excludes supervising contractor’s personnel

Contract AdministrationAdministrator’s Responsibilities

Contracts executed by Procurement◦ Answer questions◦Mediate problems◦Modify contract terms◦ Renew contracts◦ Terminate contracts

Contracts executed under delegated signatory authority◦ Answer questions◦Mediate problems◦ Assist with modifying contract terms and renewing or

terminating contracts

Contract AdministrationProcurement Services Responsibilities

Do not assume that:◦ Previous contractor left at required performance level◦ Contractor knows procurement laws or policies◦ Contractors will police themselves◦ Contractor will remember or even understand all the

contractual terms◦ Contractor shares our culture

Contract AdministrationCommon Pitfalls

If the parties intend the agreement to be binding, and not merely a promise that need not be kept, it is a contract.

A written delegation of authority is required to sign a contract.

As an agency of the Commonwealth, W&M is subject to the laws of the Commonwealth.

If it is not written in the contract, it probably is not enforceable.

The details matter. When in doubt – ask the Procurement Office or University

Counsel first. It saves time and trouble.

KEY TAKEAWAYS