CONFERENCE CONTRACTS FREQUENTLY ASKED QUESTIONS
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1 CONFERENCE CONTRACTS FREQUENTLY ASKED QUESTIONS Table of Contents I.REVIEW PROCESS... 2 II.DETERMINING CONTRACT VALUE... 3 III.INSURANCE... 4 IV.PCI COMPLIANCE... 7 V.MISC. QUESTIONS
2 I.REVIEW PROCESS Why do contracts have to be submitted to IEEE for review? In June 2000 Policy 11.2.E.1 (a) was established: Contracts with a contract value of $25,000 USD or greater shall be reviewed by subject matter experts prior to final approval and execution. What is the purpose of the review? Contracts are usually written in favor of the vendor. IEEE wants to ensure that contracts are fair to both parties. When we review a contract our goal is to: Eliminate Ambiguity Ensure Contract is Mutual Minimize Financial Liability Qualify the terms of sale What types of contracts have to be submitted to IEEE for review? All contracts with a value of $25,000 USD or greater. Example of Contract: Hotel Convention Center Meeting Management Company Registration Management Company Audio Visual (AV) Food and Beverage (F&B) Exhibition Decorator DMC/ Tour company Transportation Miscellaneous Venues (Aquarium, Museum, etc.) Printer (Proceeding, CD, Programs, etc.) Security Vendors What clauses are required by Procurement? Mutual Indemnification Mutual Insurance Mutual Cancellation Mutual Force Majeure 2
3 Will Procurement sign a contract without the required clauses? Procurement requires acknowledgement in writing from the Organizer that they understand the risk of not having the clauses included in the contract. The contract will then be sent to the Managing Director of Technical Actives for approval. Based on those two approvals, Procurement will sign the contract as long as there are no other harmful clauses. II.DETERMINING CONTRACT VALUE How do you know if the value of the contract is $25,000 USD or greater? The value of a contract is determined in two ways: Cost of Services Cost of Risk/exposure (applies to registration management contracts) Cost of Services This is the actual/estimated cost quoted by the vendor to provide a service. It is clearly spelled out in the contract. In a Hotel Contract, the value is determined by the commitment the Group makes to the hotel: The number of sleeping rooms plus F&B guarantee plus Meeting Room Rental. Cost of Risk/exposure If a registration company deposits Conference registration income into their bank account there is a risk of exposure (A third party is holding the Conference funds and the Conference does not have direct access to their money). This risk (estimated number of registrants multiplied by the average registration fee) needs to be added to the value of the contract. For Example Vendor ABC is charging a total of $12,000 for registration services. The Conference funds collected by Vendor ABC will be deposited into their bank account. The conference has budgeted for 300 attendees at an average registration fee of $395 The value of the contract is: 300 X $395 = $118,500 PLUS $12,000 for the cost of service = $130,500 3
4 III.INSURANCE Why do we need an Insurance and Indemnification clause in the contract? If something goes wrong, a contract identifies who will be financially responsible. The answer to who pays is found in the Insurance and Indemnification provision of the contract. What is Indemnification [hold harmless]? Indemnification is the act of compensation for loss or damage. To indemnify means to reimburse a loss that someone has suffered because of another s act or fault. It does not guarantee payment in the event the party is unable to pay. What is a Certificate of Insurance (COI)? A COI is a document issued by the vendor s insurance company that verifies that the vendor has purchased an insurance policy. Why do we ask vendors to name IEEE as an additional insured? As an additional insured the IEEE has coverage under the vendors insurance policy. The Additional Insured coverage provides that the IEEE will have legal representation for a claim or lawsuit in which the IEEE is named, but is not negligent. When do we have to ask to be added as an additional insured on a vendor s insurance policy? IEEE should be added to all vendors insurance policies if a vendor is hired to perform a service on behalf of IEEE (e.g. AV, Tour Company, Bus Transportation, Dinner/Boat Cruise, Meeting Manager, caterers) What type of insurance is required? How much insurance is required? It depends on the vendor and the nature/size of the event. At a minimum, ALL vendors should carry One Million Dollars ($1,000,000.00) in general liability insurance. When liquor is being served add: [Name of Vendor] agrees to carry a minimum of One Million Dollars ($1,000,000.00) in liquor liability insurance and represents and warrants that all of its employees and agents performing services under this Agreement shall at all times comply with federal, state and local laws pertaining to the sale, service or furnishing of alcoholic beverages. 4
5 INSURANCE CONTUNUED Hotel Contract Request evidence of general liability and if liquor is being served, liquor liability insurance Registration Company Request evidence of general liability and fidelity bond (also known as Employee Theft or Comprehensive Crime insurance) coverage in an amount equal to One Million Dollars $1,000,000. [If Registration Company is reasonably expected to be handling, at any time, registration or exhibit income exceeding $1,000,000, the bond amount needs to be increased accordingly.] Meeting Management Company Request evidence of general liability and if handling Conference funds, fidelity bond coverage. Bus/Transportation Companies Request evidence of general liability and auto liability insurance naming IEEE as an additional insured. Boat/Diner Cruise Request evidence of general liability and protection and indemnity (commonly referred to as P&I) insurance naming IEEE as an additional insured. Destination Management Company (DMC) Request evidence of general liability and auto liability insurance (if applicable) naming IEEE as an additional insured. Since DMC s often engage other vendors to perform services on behalf of the IEEE, a special indemnification clause is required. Indemnification clause to use with DMCs Group shall indemnify, defend and hold harmless the [INSERT NAME OF VENDOR], its officers, directors, employees and agents, from any and all claims, actions, causes of action, demands or liabilities of whatsoever kind and nature including judgments, interest, attorneys' fees, and all other costs, fees, expenses and charges which the [INSERT NAME OF VENDOR], its officers, directors, employees, and agents, may incur but only in proportion to and to the extent such liability, loss, damage or claims are caused by or result from the Group s negligence or misconduct. The terms of this provision shall survive the termination or expiration of this Agreement. 5
6 Indemnification clause continued The [INSERT NAME OF VENDOR] shall indemnify, defend and hold harmless the Group, its officers, directors, employees, volunteers and agents, from any and all claims, actions, causes of action, demands or liabilities of whatsoever kind and nature including judgments, interest, attorneys' fees, and all other costs, fees, expenses and charges which Group, its officers, directors, employees, volunteers and agents, may incur to the extent arising out of the breach of this Agreement by [INSERT NAME OF VENDOR] or the negligence or misconduct of the [INSERT NAME OF VENDOR], its officers, directors, employees, agents, contractors, or any other person or organization hired by the [INSERT NAME OF VENDOR]. The terms of this provision shall survive the termination or expiration of this Agreement. 6
7 IV.PCI COMPLIANCE What is PCI DSS? PCI DSS stands for Payment Card Industry Data Security Standard. These standards were created by all of the major credit card companies to protect cardholders credit card transaction information. Why should I be concerned about credit card security? If registration is collected via credit card payment online, your conference could be a target for hackers and can be highly vulnerable. Web applications that give attendees access to services and information are difficult to secure and it is important to make sure the vendor adheres to the latest PCI Security Standards. How do I know if the vendor is PCI compliant? Ask the question. If the vendor is PCI complaint, they will have a certificate issued to them from their security consultant. What if the vendor is not PCI compliant? If the vendor is not PCI compliant, IEEE requires a letter from the vendor s merchant bank stating why they are not compliant. 7
8 V.MISC. QUESTIONS What happens if a contract does not have a cancellation clause? A cancellation clause is a provision in a contract that outlines damages to be paid to the noncancelling party if cancellation occurs. A party may always cancel a contract, the issue is whether damages are owed for the cancellation and if so, how much. The absence of a liquidated damage provision (amount of money to be paid) does not mean that either or both parties may cancel without liability, but means that the canceling party is liable for the other party s actual damages to be proven in court or through arbitration. Can the contract be in the name of the IEEE OU? All contracts have to be between the vendor and The Institute of Electrical and Electronics Engineers Incorporated, a New York not-for-profit corporation ( IEEE ), on behalf of the IEEE Organizational Unit since the IEEE is the legal entity. Do Letters of Intent have to be submitted to procurement for signature? Letters of Intent have to be submitted for signature only if the vendor is asking IEEE to commit to payment of $25,000 USD or greater How are Hotel Contracts from outside of North America different then contracts for North American Properties? When dealing with hotels outside of North America: Meeting room rental is not complimentary Meeting rooms are not held on a 24 hour hold Deposits are required with signed contracts Full payment of contract is required prior to the start of the event, with the balance due on the last day of the event. F&B it is usually a "package. The package can consist of breaks, lunch, room rental and minimal AV Payment for entire stay might be required when reservations are made Hotels limit the number of complimentary sleeping room nights offered, usually 3 to 5 maximum 8
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