Procurement

Contracts

GENERAL CONTRACT GUIDELINES

 

  1. What Is A University Contract?

A university “contract” is any written agreement, which creates a University obligation, whether or not it is entitled “contract.” Contracts include, but are not limited to, Personal Services Agreements, lectures, consulting or performance agreements, licenses, memoranda of understanding or agreement, and real property-related transactional documents. An agreement may be a binding contract even though one party provides something of value to the other party at no charge. Therefore, the University may have an interest even though there is no financial transaction.

All contracts to which DSU is a party must be reviewed and approved by appropriate University officials and in consultation with the Office of the General Counsel and/or Attorney General. Signing a contract on behalf of DSU may have legal implications for the individual signatory and for the University. Therefore, contracts signed without obtaining legal approval may, if the University chooses not to honor the contract, result in personal liability for the individual who signs the contract. University administrators, faculty, staff, or students who enter into unauthorized agreements may also be subject to disciplinary action, including dismissal.

 

  1. Preparation of University Contracts

Departmental Responsibility: It is the responsibility of all University departments to negotiate the business concerns of their contracts with the contracting parties before submitting contracts for review and approval.  Also, contractors must be made aware that the State of MS requires various contract provisions, affidavits, and certifications depending on the type, term, and amount of a contract.

Importance of planning: Pursuant to University policy, all draft or final contracts should be uploaded to ContractSafe and emailed (through ContractSafe) to approval levels including Procurement for approval. No services may begin until your contract is signed and executed by the Vice President for Finance & Administration. Therefore, you need to build in sufficient time for your contract to be approved by the University.  This may take several weeks if legal opinion or approval is required.

  1. Board approval is required if the contract falls into the following categories:
    1. Contract for the sale of real property; (See IHL Policy 905(B) for all property contract requirements);
    2. Contract for land acquisitions that exceeds $100,000;
    3. Contract for the execution of an easement or lease that exceeds $100,000 (non-oil, gas and mineral leases or easement less than $100,000 is delegated to the IHL Commissioner);
    4. Contract for the sale of timber that exceeds $500,000 (contracts for less than $500,000 is delegated to the chair of the Real Estate Committee);
    5. Contract for oil, gas and mineral leases regardless of amount;
    6. Contract for bookstores, food services, or athletic concessions projected to generate aggregate total revenues exceeding $250,000 (IHL Commissioner may approval renewal revenue contracts where the contract results in additional revenues to the institution);
    7. Contract for all other land, personal property, and services that requires an aggregate total expenditure of $250,000 or more (IHL Commissioner may approve renewals of service expenditure contracts if the original contract was previously approved by the Board of Trustees, and if the contract amount does not exceed 110% of the current contract).
  2. Legal review of any contract that meets the following criteria is required:
  1. The contract has a value of ten percent (10%) or more than the highest authorized levels of the aggregate total expenditures authorized (the current 10% threshold is $25,000); and
  1. University personnel should look for the following items in all contracts:

 

  1. Steps to prepare a contract.
    1. Prepare Draft Contract:

The department works with the vendor/party to obtain or develop a contract draft using the Submission Checklist as a guide to determine required and/or special provisions including state-mandated affidavits and certification forms.

  1. The correct legal name of the University must appear on all contracts as, “Delta State University.”
  2. Is the contracting party licensed and currently in good standing with the Mississippi Secretary of State to conduct business in Mississippi? To determine the contractor’s status, check the Mississippi Secretary of State’s Office’s website under “Business Search.”  Some exceptions may apply.
  3. Are the parties identified by full name and contact information? And, are the parties identified correctly throughout the contract?
  4. Is the contract purpose clearly stated? Is there clear understanding of what each party will give and receive under the contract?
  5. Is the contract start and end date (“term”) clearly stated?
    1. Delete any reference to “automatic renewals.” A contract may be renewed only upon mutual agreement of both parties.
    2. A contract should not exceed five (5) total years.
  • The “effective date” in the introduction or signature page should be consistent with the start date of the contract.
  1. Does the contract provide a termination clause?
    1. If possible, the university should be allowed to terminate the contract with 30 to 90 notice.
    2. If not, the method(s) for terminating the agreement should be clearly stated.
  2. Does the contract clearly and accurately define the payment terms?
    1. If possible, include reference the following: “All payments will be made in accordance with Miss. Code Ann. 37-7-301, et. seq.”
    2. No payments should be considered late until 45 days after receipt of invoice.
  • The university may not pay more than a 1.5% late fee per month after 45 days.
  1. See IHL Board Policy No. 707.03 regarding pre-payments.
  2. If possible, include a non-availability of funds clause that provides for termination by the university in the event the funds used to pay for the contract become unavailable.
  3. Delete any provision requiring the university to pay taxes. The university is tax exempt.  (See Miss. Code Ann. 27-65-105)
  1. Delete any clauses that require the university to indemnify or hold harmless the other party.
  2. Delete any clauses that limit the other party’s liability to the university. The exception is an expressed limitation for breach of implied warranties of merchantability and fitness for a particular purpose concerning computer hardware, software.
  3. Delete any arbitration clauses.
  4. The contract is to be governed by the laws of the State of Mississippi. If the other party will not agree to such provision, delete the choice of law provision entirely.
  5. Delete any requirement that the university obtain insurance. The university is self-insured under the Mississippi Tort Claims Act.  Any insurance provisions may be reviewed by the IHL Director of Risk Management.
  6. Delete any clause requiring the university to limit the time frame in which it may bring suit, change the statute of limitations, or waive its right to a jury trial.
  7. Delete any clause requiring the university to pay another party’s attorney’s fees.

 

  1. Delete any clause allowing another party to control any defense of the university. The Mississippi Attorney General must represent or approve counsel to represent the university.
  2. The contract should contain a force majeure clause that allows for termination of the contract in the event either party is unable to perform due to acts of God.
  3. If the contract contains a confidentiality clause, it should also reference that the university is subject to the Mississippi Public Records Act, Miss. Code Ann. 25-61-1, et. seq. and Mississippi Accountability and Transparency Act of 2008, Miss. Code Ann. 27-104-151, et. seq.
  4. If the agreement is for software, it should contain appropriate data protections.
  5. The contract should contain an E-Verify clause.
  6. If the University’s Standard Terms and Conditions Addendum is attached to the contract, it should be referenced in the “entire agreement” clause.
  7. The contract should include a provision that provides the appropriate contact for notice to both parties.
  8. All exhibits and attachments should be referenced and attached to the contract.

Share the draft with pertinent departmental administrators to ensure all business terms are vetted and acceptable.

While most University agreements involve an exchange of funds, some exchange only services or goods.  Regardless, they may include impermissible language that should be reviewed.

To ensure correct form and legal sufficiency, all University contracts, agreements or documents may be submitted for pre-review to the Office of Procurement by you or your contract liaison via our online submission through ContractSafe.

All contracts must include the university addendum.  The addendum must be signed by the vendor prior to contract execution.

  1. Submit for Pre-Review (if needed):

It is advised that you send a copy of your contract to contracts@tdwang.net for pre-review prior to uploading your contract in ContractSafe.  Taking advantage of this step facilitates discussion and negotiation saves time in the end and helps prevent rejection after execution by the parties.  It is also advised that the precontract checklist and the signed addendum be included with the contract to decrease the time to review and approve the contract.

  1. Upload the Signed Copy to Contract Safe

A signed original contract must be uploaded to contract safe for signature.  The following documents are required to be uploaded with the signed original contract.

  1. A copy of the signed addendum
  2. A copy of the filled out precontract checklist

 

  1. Distribute Completed Contract:

When the department receives the fully executed contract, it is the department’s responsibility to (1) retain an original or copy of the contract and supporting documents and (2) return an executed original or copy to the contractor. It is important to remember that ContractSafe will calendar the contract expiration date to anticipate deadlines for amendment or extension.

Be aware that times for submitting and approving can vary depending on several factors.  Once a contract is submitted for approval, the legal review and approval timeframe is determined by whether the submitting University department has:

  • anticipated the need to negotiate any impermissible contractor terms and sought advice before execution;
  • reviewed carefully to ensure the terms are consistent throughout, clear and concise;
  • included all the required state contract provisions; and
  • provided a completed Precontract Checklist and appropriately executed contractor affidavits;

*In cases where it is anticipated your contract may require time-consuming negotiation with the contractor, a new contract needs to be drafted, or there is an impending deadline, you are encouraged to invite your University contract liaison into the process as early as possible for pre-review of your draft contract before execution.

  1. Performance

The department is responsible for the contract performance.  Any obligations indicated in the contract will remain with the department and University.  When receiving revenue from a contract, a Contract Revenue form should be submitted to procurement. When rendering a payment, a contract payment form should be completed and submitted to procurement. Audits, reports, payments, and important obligations can be tracked after the contract is entered into ContractSafe.  Each user will have access to the ContractSafe dashboard.  At the conclusion of the contract, a post contract review is required of the department.  The post contract review checklist will be required to be submitted to close out the contract.  All agreed upon terms, deliverables and conditions must be met for the contract to be concluded.  It is the department’s responsibility to monitor the performance of the contract through to ensure that the vendor performs all agreed upon items.

ContractSafe is managed by the Procurement Department and will have access to all contracts. This will ensure that all filed payments have a copy of the contract attached to the P.O. in Banner.