Signatory Authority - The authority of specifically designated employees/representatives to sign on behalf of the University.
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1 St. Edward s University Contract Management Policy Overview Many St. Edward s employees, in the course of their regular work for the institution, are faced with the need to negotiate and execute contracts which legally bind the University. This policy and contract management guide is intended to provide those employees with a framework for understanding the specifics of the contract creation, review, and acceptance process; the essential elements which should be incorporated into all contracts to which the University is a party; and the limits, constraints, authorities, and approvals required before a contract can be executed on behalf of St. Edward s University. Reason for Policy It is essential that a standard contract management policy be established to reduce the exposure of University resources and University employees to certain statutory and legal risks. To protect SEU against these risks, it is essential that departments or individual administrators intending to enter into a contract with outside parties follow established procedures with regard to contract review and signature authority. Policy Statement Contracts entered into on behalf of St. Edward s University must be reviewed and approved by the Risk Manager and other designated University personnel to ensure compliance with established University policy regarding contract language and stipulations. Contracts may only be executed by University designated signatories as specified in this policy. These policies and procedures are the standard guidelines required by the University. Definitions Contract - For the purposes of this policy, a contract is defined as a written agreement between two or more parties intended to have legal effect, including Memorandums of Understanding, Memorandums of Agreement, Nondisclosure Agreements, and Letters of Understanding. Any questions as to whether or not an agreement is subject to the requirements of this policy should be submitted to the Risk Manager. Signatory Authority - The authority of specifically designated employees/representatives to sign on behalf of the University. Contract Requirements, Mandatory Clauses, and Contract Exclusions All contracts will be reviewed by the Risk Manager to ensure that the content is acceptable and the contract meets the criteria outlined below: Insurance The University requires certain minimum levels of insurance coverage in each of several areas for any parties contracting with St. Edward s University and contracting parties should attest to such coverage within the language of any contract, in addition to providing requisite certificates under St. Edward s insurance requirements: 1
2 General Liability including Products and Completed Operations: Minimum $1,000, Automobile Liability: Minimum $1,000,000 Combined Single Limit (if operating vehicles or driving on St. Edward s campus or St. Edward s-owned or rented property). Workers Compensation: required for all parties performing work on University-owned or rented property. The University reserves the right to request additional coverage based on the nature and scope of contracted services. Insurance amounts required may be higher for major projects with values exceeding $5,000, The University may further require that umbrella liability coverage be in place and acknowledged within contract language. The University itself may be required to provide general liability insurance when using a third party s real estate or equipment, to insure art work or equipment we are renting or leasing, or to insure vehicles we are renting. Where such insurance is required of St. Edward s University by a contract, the Risk Manager will provide guidance and prepare any necessary insurance certificates prior to executing any contract on behalf of the University. Indemnification Clause - Any contracts executed on behalf of St. Edward s University must include an indemnification clause intended to protect the University against negligent acts by the contracting third party. Such clause should contain the following language: [Contracting Party] agrees to defend, indemnify, and hold harmless St. Edward s University, Inc., its respective affiliates, contractors, officers, directors, trustees, employees and agents from and against all claims, liabilities, damages, and expenses, including attorney s and other professional s fees, arising out of or related to the intentional or negligent acts or omissions of [Contracting Party], its affiliates, contractors, officers, directors, trustees, employees or agents. Independent Contractor Clause Any contracts executed on behalf of St. Edward s University must include an independent contractor clause to ensure against the contracting party alleging employment status with the University. Such clause should contain the following language: Neither [Contracting Party], nor any person assisting [Contracting Party] in its obligations under this agreement, shall be deemed to be an employee of St. Edward s University. Furthermore, the arrangements contemplated by this agreement shall not be deemed to constitute a partnership or joint venture between [Contracting Party] and St. Edward s University. Neither [Contracting Party], nor any other person assisting [Contracting Party], shall be covered by an employee benefit program maintained by St. Edward s University including, but not limited to, health insurance, university retirement plan, and worker s compensation benefits. Identification of St. Edward s University - The University must be identified as St. Edward s University, Inc. in all contracts and agreements. The official address for the University must be listed as 3001 South Congress Avenue, Austin, Texas Contracts executed on behalf of the University should specify a 2
3 primary contact person for all subscribing parties as well as phone and fax numbers for such contact persons. Entire Agreement Clause - The University requires that contracts include an entire agreement clause that clearly states that the written contract constitutes the whole agreement and that no verbal or side agreements will be acceptable or enforceable. Force Majeure Clause - Contracts should contain a force majeure clause that addresses delay in performance or inability to perform caused by forces beyond the parties control (war, acts of god, natural disasters, etc.). Governing Law Clause - The University requires, whenever possible, that contracts specify that all contract provisions are governed by the laws of the State of Texas. Termination Clause - The University requires that contracts incorporate a termination clause that allows for termination in the event of default and termination for convenience upon no more than ninety days written notice. Such clause should define the events of a default clearly and should apply equally to both parties. The provision for written notification of termination must be included in the clause with the exact address and method of communication acceptable for such notice of termination. Additionally, such clause should contain provision(s) for remedy of default, specifying acceptable corrective action and time allowed for completion of such corrective action. Mandatory Clause Exclusions: The University will generally not execute contracts that contain the following clauses or limitations: Automatic Renewal No contract should include an automatic renewal clause Single Indemnification Clause (benefiting third party only) The University does not allow single indemnification clauses that only protect the outside contracting party Limitation of Liability No contract should contain language allowing the outside contracting party to limit their potential liability. Reimbursements Under a Contract: When the University agrees to reimburse expenses of the contracting party for such items as meals, mileage, hotels, airfares, copies and documents, third party consultants, etc., contract language should specify that such reimbursements will only be made upon presentation of full original receipts for such expenses by the primary contracting party. All travel reimbursements must be allowable under the St. Edward s Travel Expense Policy. Specific Performance: Contract language should explicitly specify the obligations of the contracting party to perform a service for St. Edward s University including defined outcomes such as operation standards for equipment or objective measures of workmanship on construction as well as absolute timeframes for completion of work. Where contracts involve the delivery of products or systems, specifications related to such products or systems should be carefully and completely defined and provisions for testing and standards for formal acceptance should be embedded in the contract language. 3
4 Contract Review and Additional Approvals All contracts must be submitted to the Risk Manager for review and approval prior to signature and execution. All addendums, schedules, and corresponding documents must be sent along with the contract. Should revisions be requested, the revised contracts must be sent to the Risk Manager for review prior to signature and execution. There are a number of contracts that require additional approvals prior to submission for signature. If a contract involves or contains a provision relating to the issues identified in the table below, approval by the indicated department/employee is required. Issue Software/Hardware Agreements Public Relations Consequences Use of University Name or Trademark International Student Travel and Study Abroad Authorizing Department/Employee Manager of Procurement & Sourcing Director of Communications Marketing Office Office of Global Initiatives Contact with outside counsel, for the purpose of contract review, will only be initiated through the Risk Manager. Review may be required if a prospective contract/agreement includes provisions: that pose substantial monetary, legal, or physical risks to the University; that contain non-standard clauses with which the University representative is not familiar or comfortable; that touch upon highly technical conditions, scope of work, or specific guarantees of performance that involve jurisdictions outside of the United States Facilities Contracts The St. Edward s Facilities Department has developed standard contracts for construction and other facilities-related projects. All facilities-related contracts must be managed through the Facilities Department. Questions regarding such contracts should be directed to the Associate Vice President for Facilities. Employment Contracts All employment contracts must be managed through the Human Resources Department. Questions regarding such contracts should be directed to the Director of Human Resources. 4
5 Signature Authority Any contract with monetary value of $20,000 and above must be signed by one of the following signatories: President Executive Vice President Vice President for Academic Affairs Vice President for Financial Affairs Vice President for Marketing Vice President for University Advancement In some cases, the Risk Manager may require that a contract be signed by a specific authorized signatory. For those cases, the contract must only be signed by that designated signatory. All other contracts can be signed by the Director, Associate Vice President or Vice President that oversees the employee initiating the contract. Contracts Prepared and Submitted by Outside Parties Administrators charged with managing contract activity for St. Edward s University will frequently find themselves faced with pre-formatted contracts prepared by vendors, their attorneys, and/or their agents and presented to St. Edward s as the terms under which they (the vendor) will perform or deliver goods and services. Managing this aspect of the contract relationship for the University is as important as negotiating a new agreement with a vendor and poses the additional difficulty of securing the interest of the University in the context of another party s contract language which often overtly favors the outside contracting party. Where vendor-submitted contracts contain language unduly favoring the outside contracting party, it is important to remember that such contracts can and should be amended to secure University interests which satisfy the contract policy requirements noted above or, alternatively, striking out unacceptable clauses which pose excessive risk to the University. In such cases, an administrator acting as the initiator or principal contact for such a proposed contract should seek the guidance of the Risk Manager. When planning to enter into a new contract, it is important to allow time for these negotiations, as it can be a lengthy process to reach agreement. Filing and Storage of Executed Contracts The initiating employee must execute each contract with at least two originals, one for each party. The initiating employee s department should permanently maintain the University s original. A copy (hard or digitized) of the signed contract must also be delivered to Risk Management where it will be on file for the life of the contract. 5
6 Training Individuals within the University who are responsible for originating contracts are required to complete an online contract management training course as part of the onboarding process for new employees. The course is provided and hosted by the University s general liability insurance carrier, United Educators, and training procedures will be provided to the employee by Human Resources during onboarding. Other Considerations It is important to emphasize that the use of common sense, careful practices, and thorough communications should be the guiding principles for personnel whose University responsibilities extend to negotiating contracts on behalf of St. Edward s. It is also important to understand that all of the aspects of good contract management defined elsewhere in this policy document will not always apply collectively in each and every situation and to each and every contract. Of paramount importance in the execution of contracts is that the standards of review and approval outlined here be adhered to in order to assure that appropriate oversight has been exercised before the University is legally bound. The guidelines that follow can be provided to third parties as a starting place for contract negotiations. 6
7 Guidelines for Contracting with St. Edward s University These guidelines provide the basic information to make available to any vendor or service provider that the University may contract with. Questions regarding these guidelines can be addressed to the Risk Manager. General Information The University must be referred to as St. Edward s University, Inc. in all contract documents. The official address for the University must be listed as 3001 South Congress Avenue, Austin, Texas The University is a not-for-profit, tax-exempt organization per Section 501(c) (3) of the Internal Revenue Code. The University is exempt from income taxes and certain State of Texas sales and use taxes. Copies of the University s Internal Revenue Service exempt organization determination letter are available upon request. Contract Requirements, Mandatory Clauses, Exclusions (1) Insurance The University requires certain minimum levels of insurance coverage: General Liability including Products and Completed Operations: Minimum $1,000, Automobile Liability: Minimum $1,000,000 Combined Single Limit (if operating vehicles or driving on St. Edward s campus or St. Edward s-owned or rented property). Workers Compensation: required for all parties performing work on University-owned or rented property. The University reserves the right to request additional coverage based on the nature and scope of work. (2) Indemnification Clause Any contracts executed on behalf of St. Edward s University must include an indemnification clause. Such clause should contain the following language: [Contracting Party] agrees to defend, indemnify, and hold harmless St. Edward s University, Inc., its respective affiliates, contractors, officers, directors, trustees, employees and agents from and against all claims, liabilities, damages, and expenses, including attorney s and other professional s fees, arising out of or related to the intentional or negligent acts or omissions of [Contracting Party], its affiliates, contractors, officers, directors, trustees, employees or agents. (3) Independent Contractor Clause Any contracts executed on behalf of St. Edward s University must include an independent contractor clause. Such clause should contain the following language: Neither [Contracting Party], nor any person assisting [Contracting Party] in its obligations under this agreement shall be deemed to be an employee of St. Edward s University. Furthermore, the arrangements contemplated by this agreement shall not be deemed to constitute a partnership or joint venture between [Contracting Party] and St. Edward s University. Neither [Contracting Party], nor any other person assisting [Contracting Party], shall be covered by an employee benefit program maintained by St. Edward s University including, but not limited to, health insurance, university retirement plan, and worker s compensation benefits. (4) Entire Agreement Clause The University requires that contracts include an entire agreement clause that clearly states that the written contract constitutes the whole agreement and that no verbal or side agreements will be acceptable or enforceable. 7
8 (5) Force Majeure Clause Contracts should contain a force majeure clause that addresses delay in performance or inability to perform caused by forces beyond the parties control (war, acts of god, natural disasters, etc.). (6) Governing Law Clause Contracts must specify that all contract provisions are governed by the laws of the State of Texas. (7) Termination Clause The University requires that contracts incorporate a termination clause that allows for termination in the event of default and termination for convenience upon no more than ninety days written notice. Such clause should define the events of a default clearly and should apply equally to both parties. The provision for written notification of termination must be included in the clause with the exact address and method of communication acceptable for such notice of termination. Additionally, such clause should contain provision(s) for remedy of default, specifying acceptable corrective action and time allowed for completion of such corrective action. (8) Mandatory Clause Exclusions The University will generally not execute contracts that contain the following clauses or limitations: Automatic Renewal Single Indemnification Clause (benefiting third party only) Limitation of Liability (language allowing the outside contracting party to limit their potential liability) Contact: Rebekah Miller Nagy Risk Manager Phone: (512) Fax: (512) rebekahn@stedwards.edu 8
9 Acknowledgement of Receipt and Review Please sign below to indicate that you agree with the following statement: I certify that I have read and understood the above Contract Management Policy and agree to adhere to this policy as I develop, negotiate, and execute contracts on behalf of St. Edward s University. Signature: Name Printed: Date of Signature: 9
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