Contract Administration

1
Contract Administration

• Workshop
• Presented by
• Lorie Messer

2
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

3
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.

4
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.

5
Contract Administration Built Upon Six Questions

• 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.
• How is this project to be accomplished?
• Involvement must be present from the start.
• Does a certain sequence need to be performed in
  an orderly fashion?
• Yes, through the Procurement Cycle sequence
  needs to be identified.

6
Contract Administration Built Upon Six Questions

• When should these objectives or steps be
  satisfied?
• During the term of the Contract.
• Who are the responsible parties?
• The party responsible for delivering the goods.
• What is the cost payment terms?
• Important Know how the cost was calculated.
• Terms are net 30 days after receipt of goods.

7
6- Factors to create a Contract

• An offer Acceptance
• Legal Purpose
• Mutuality of Obligation, also known as meeting
  of the minds
• Consideration
• Certainty of Competent Parties
• Subject matter

8
(No Transcript)
9
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.

10
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

11
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 its 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.

12
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
• DONT FORGET TO SET UP THE VENDOR IN FAMIS
  SYSTEM!
  

13
TAMU-CC Contract Addendum Formto Vendors
Contract

• Used to expedite vendors Contracts
• Has all TAMU-CC Terms Conditions
• Legally binding
• Can be found in our Website
• http//falcon.tamucc.edu/purchase/

14
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.

15
An Employee is

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

16
Independent Contractor

• ?Is an individual engaged by the University to
  perform a specific task who is free to perform
  this task completely at the individuals own
  discretion with regard to means methods.

17
Definition of Contract Workforce

• The State of Texas defines Contract
• Workers as
• ? Independent Contractors
• ? 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.
  

18
Contract Workforce RequirementsContinuation P-2

• ?The contractors 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

19
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!!!

20
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

21
Areas where Contract Administrators are involved

• Meets Milestones
• Avoid Risk Regarding Liabilities
• Communicate Internally and Externally
• Maintain a Professional Relationship

• Ensuring Compliance of the Contract

22
Ethics in Administering a Contract

• Integrity
• Fair Dealings
• Confidentiality
• Keep Favorable the Relationship
• Maintain Impartiality -

23
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 -

24
Compensation Section

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

25
Contract Termination

• Termination
• Failure to Meet Contractual Obligation
• Goes into Bankruptcy
• Upon Tender of Notice to Seller
• Conveniences
• Default -

26
Satisfactory Completion

• Prepare Final Contract closeout and Inspection
• Properly Close File w/all required documents
• Notify Purchasing Department of Contractors
  Performance

27
Delegated Authority TAMU-CC
Sponsored Programs
Services Goods
Certain Contracts Must be Approved by the Board
of Regents Refer to TAMUS Policy 2507)
28
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/

29
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

30
Texas AM 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

31
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.

32
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.

33
Texas AM UniversityContract Administration
Need?

• Contact
• Lorie Messer
• Contract Coordinator
• Lorie.messer_at_tamucc.edu
• Tel [phone], Fax [phone]

34
The End

• Texas AM University-Corpus Christi
• Purchasing Department
• Judy Harral, Purchasing Director
• 361-825-5936
• Lorie Messer, Contract Coordinator
• 361-825-2166

http//falcon.tamucc.edu/purchase/