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- How Do You Know It’s a Contract? »
- When Do You Get the Contracts Team Involved? »
- How to Submit a Purchase Contract for Review »
- The Review Process »
- Timeline to Review »
- Contract Execution »
- Contract Administration »
General
When purchasing goods or services, vendors may present documents as a condition to doing business. Examples of purchase contracts are as follows:
- Purchase Agreement
- Letter Agreement
- License Agreement (Software, Equipment)
- Consulting Agreement
- Professional Services Agreement
- Artist Agreement
- Facility or Equipment Rental Agreement
- Quote
- Order Form
- Scope of Work (SOW), or
- Memorandum of Understanding (MOU).
How Do You Know It’s a Contract?
A contract is any legally enforceable agreement, whether or not it’s called a contract. Contracts are between two or more parties, create rights and duties for each party, and usually require signatures of one or both parties. A well-written contract will
✔ state in clear terms what each party must do,
✔ create a process to make decisions, and
✔ provide a mechanism to resolve disputes that arise.
Some contracts may not require VCU to issue payment; for example:
- Revenue generating contracts,
- Non-Disclosure Agreements (NDAs), and
- Memoranda of Understanding (MOUs)
Even when a payment is not required, a contract may still be involved.
When Do You Get the Contracts Team Involved?
✔ Any time a vendor asks you to sign a document OR
✔ Any time a vendor gives you a purchase contract.
TIP: Contracts must be reviewed, prior to:
✔ the start of any work,
✔ the issuance of purchase orders,
✔ Pcard transactions, or
✔ the approval/issuance of invoice payments.
How to Submit a Purchase Contract for Review
Contracts Over $10,000
Contracts over $10,000 should be submitted to the Purchasing Team by submitting a requisition through the RealSource system. All relevant documents and key information associated with the purchase, including the contract, should be attached to the requisition.
Once the contract is attached, it is automatically routed to the appropriate Category Manager or Senior Buyer. They will guide you through the competition requirements and assist you in determining the correct procurement method. A member of the Contracts Team will be provided pertinent information and contract documents by the Category Manager or Senior Buyer when it’s time to negotiate the contract.
Helpful Links
Make a Purchase over $10,000
RealSource User Help-Guide
Procurement Methods Quick Guide
Buying Something $10K or Less
Approach One
- Review vendor document(s); e.g. SOW, quote, order form or contract, to make sure it reflects what you wish to purchase.
- Create a Requisition and attach vendor document(s).
- Obtain Requisition approvals and issue a Purchase Order.
Do NOT sign any vendor documents.
Approach Two
- If vendor rejects the Purchase Order because a signature is required, then submit vendor documents through the Contracts+ module in RealSource.
- The Contracts team will negotiate and finalize the contract.
Pcard Purchases: Pcard rules and thresholds must be followed.
- If vendor is not requiring a signature, then pay with the pcard.
- If vendor is requiring a signature, then send documents through the Contracts+ module in RealSource.
- The Contracts team will negotiate and finalize the contract.
Reminders
The Vendor MSAs spreadsheet, available on the Procurement Services web site, provides guidelines for making purchases with specific local vendors.
TIPS:
✔ To expedite your contract review request, provide all vendor documents including hyperlinked documents. You may need to click the vendor’s hyperlink and copy and paste terms and conditions into a Word document.
✔ Sometimes, your contract will require review or input from other departments. We call these pre-requisites. For example, if a vendor is going to have access to or store VCU’s confidential data, then the IT Governance Team may need to evaluate the vendor’s data security practices.
✔ See the Contracts section in the RealSource User Help-Guide.
Helpful Links
For more information on pre-requisites: Prerequisite Quick Guide
Checklist for contract review requests: Contract Submission Checklist
For information on: Hotel/Event Contracts Processing Procedures
Buying Something $10k or Less Quick Guide
The Review Process
Contracts include terms and conditions (T&Cs). The Contracts Team is responsible for reading contract documents to make sure the T&Cs accurately reflect what you are buying, as well as certain legal requirements. This is why we ask questions of the contract stakeholder; we need to make sure you are getting what you purchased. Additionally, VCU is a public university which means there are certain legal requirements our contracts must meet by state law to be effective.
Common Terms Negotiated by the Contracts Team
✔ The Basics: Who are the parties? What is being purchased? What is the Cost?
✔ Term, Termination, and Renewals
✔ Representations and Warranties
✔ Allocation of Risk
✔ Insurance
✔ Governing Law
✔ Confidentiality
All of these terms are reviewed, redlined, and negotiated by the Contracts Team. We may identify certain risks that should be considered by the department prior to executing the contract. In addition, there are many university policies established by other departments that identify various university requirements that must be met prior to executing purchase contracts. It is helpful when departments consider these requirements prior to submitting a contract for review.
Timeline to Review
The review period varies based on the following:
✔ the complexity of the contract,
✔ whether the contract is written from scratch or negotiated from the vendor’s form contract,
✔ the vendor’s willingness to negotiate, and
✔ the review and input required from other university departments.
Ideally, vendors understand the legal requirements VCU must meet based on our status as a state agency. However, not all vendors are willing to negotiate with VCU, which may cause significant delays or at times, make the purchase impossible.
On average, vendor contracts can be reviewed and executed within 2 weeks. However, some contracts may take a month or longer.
TIP: Include the Contracts Team in your early planning activities, especially where tight timelines have been set.
Contract Execution
University policy dictates that purchase contracts may only be executed by the Director of Procurement Services or the Chief Financial Officer, or their designee. The Purchasing and Contracts Teams coordinate the execution of all contracts, including obtaining the signature of the vendor.
Authority to Sign Purchase Contracts
By university policy, only certain individuals on campus are permitted to sign purchase contracts. See Delegation of Signatory Authority.
Generally, departments do NOT have the authority to sign purchase contracts. Noncompliance with the policy noted above may result in disciplinary action up to and including termination of employment.
Contract Repository
The fully executed contract will be returned to the department, or you will receive a notification from RealSource letting you know the contract is available in the repository. The Contracts Team or Purchasing Team will add your contract to the Contracts+ repository where it can be accessed by any RealSource user at any time. See the following link for more information about the Contracts+ repository: RealSource User Help-Guide
Contract Administration
After the contract is executed, it is the department’s responsibility to monitor the vendor’s performance to ensure compliance with the contract as it is written. More information about Contract Administration can be found here.
For More Information
Questions relating to contract reviews, signatures, changes, renewals, or vendor non-performance should be emailed to the appropriate Contracts Manager (Buyer) as provided in the contract record in Contracts+. General questions about contracts may be sent to contracts@vcu.edu.
For technical questions about Contracts+ or RealSource, please submit a Cherwell service ticket.