Procedures for Contract Approval
Policy Section VII - Legal Affairs
Procedures Implementing LSCS Policy
Policy Section VII - Legal Affairs
I. GENERAL PROVISIONS
A. The President, Vice President, Chancellor or Vice Chancellor leading the department originating the transaction must:
i. Review the contractual documents for accuracy, appropriateness, availability of funds, and compliance with LSCS policy;
ii. Certify approval of the contractual documents and transaction by signing the Contract Cover Sheet (attached as Addendum A);
iii. Obtain any documents referenced in the contract, such as proof of insurance, exhibits, or attachments, and forward copies with contracts to the Office of General Counsel.
iv. Develop and maintain a contract management system to ensure that the terms and conditions of each contract are performed in an appropriate manner.
B. The Office of General Counsel processes and maintains contractual instruments covered under this policy and shall receive and review all standard affiliation agreements and non-standard contracts and shall provide training for all LSCS departments to facilitate compliance with this policy.
C. Office of General Counsel (OGC): The OGC will advise and assist the System regarding the most appropriate contract form for the purpose specified and related legal issues. All non-standard contracts are to be forwarded to the General Counsel or Associate General Counsel for legal review, recommendations, and/or revisions. The OGC may prepare and designate certain contracts as "standard" whereby further OGC review and approval as to form is not necessary, so long as the standard form of agreement has not been altered.
D. Legal Review: All non-standard contracts require review and approval as to form by the OGC prior to execution by the System. See Section III.C for a discussion of standard contracts.
E. Duration:The duration of any contractual transaction cannot be specified in a contractual instrument to extend beyond a cumulative period of five consecutive years, including renewal terms. The official with delegated authority must approve exceptions to this time period in writing.
F. Execution: Contracts are legally binding on the System only upon execution of the contract by the System official with delegated contractual signatory authority, as set out in the System Board Policy Section III.D.2.04.
G. Historically Underutilized Business (HUBs): The LSCS will comply fully with the letter and spirit of Chapter 2161 of the Texas Government Code regarding HUBs.
H. Record Retention: The Office of General Counsel and each contracting party shall retain one executed original in their respective files. The originating department retains a copy of the executed contract in its files.
I. Audit Clause: All revenue-generating contracts and all contracts where payment by the System is contingent upon records processed and maintained by another party to the contract shall contain an audit clause. This clause shall give the System the right to access and audit any and all documents pertaining to the contractual relationship held by any party to the contract.
J. Contracts Requiring Board Approval: Board approval must be obtained in an open meeting for the following contracts (refer to System Board Policy Manual Section III.D.2.02):
i. Employment contracts;
ii. Finance agreements;
iii. Purchases or sales of real property;
iv. Contracts, excluding legal services, and leases with a term exceeding one year (including options to renew) that have a cumulative expenditure of $100,000 or more over the contract term;
v. Contracts involving the sale of intellectual property or technology transfer, including software licenses, owned in whole or in part, by the System.
II. SPECIAL CONTRACTING REQUIREMENTS
A. Competitive Procurement Requirements (Tex. Education Code 44.031): The System may acquire goods or services by the method that provides the best value, including competitive bidding; competitive sealed proposals; a request for proposals, for services other than construction services ; an interlocal contract; a design/build contract; a contract to construct, rehabilitate, alter, or repair facilities that involves using a construction manager; a job order contract for the minor construction, repair, rehabilitation, or alteration of a facility; or the reverse auction procedure as defined by Section 2155.062(d) of the Texas Government Code. The following criteria shall be considered in determining best value: the purchase price; the reputation of the vendor and of the vendor's goods or services; the quality of the vendor's goods or services; the extent to which the goods or services meet the needs of the System; the vendor's past relationship with the System; the impact on the ability of the System to comply with laws and rules relating to historically underutilized businesses and to the procurement of goods and services for persons with disabilities; the long-term cost to the System of acquiring the vendor's goods or services; any other relevant factor that a private business entity would consider in selecting a vendor.
B. If System equipment or a part of a campus facility or personal property is destroyed or severely damaged or, as a result of an unforeseen catastrophe or emergency, undergoes major operational or structural failure, and the Board determines that the delay posed by the methods provided for in this section would prevent or substantially impair the conduct of classes or other essential school activities, then contracts for the replacement or repair of the equipment or the part of the school facility may be made by methods other than those required by this section.
C. Contracts for Legal Services:Originating department cannot initiate contracts for legal services. All contracts for legal services are initiated only by the Office of General Counsel.
D. Agreements With Other State and Local Government Entities: The System may contract with another state agency for the provision of necessary and authorized services and resources by Interagency Agreement, subject to the requirements of this policy. Assistance may be requested from the Office of General Counsel.
III. CONTRACT PREPARATION
A. Necessary Information: In order to prepare documents necessary for a transaction, the originating department should obtain the following information:
i. the name, street address, city, state, of the non-System party;
ii. the name and title of the person(s) who will sign on behalf of the non- System party, if the party is a corporation;
iii. the amount that will be paid for the goods or services;
iv. a detailed description of goods or services that the System is procuring or providing (if a revenue-generating contract);
v. the start date for rendition of services or delivery of goods or the effective date/start date upon which the term of the contract will commence;
vi. the date on which the services will be completed or the goods will be delivered or the term of the contract will expire.
B. Contract Review Request and Procurement Certification (Addendum A): The System Office, College or department originating the transaction should complete the Contract Review Request and Procurement Certification, including obtaining all required signatures after OGC approval.
i. Amendments: If submitting an amendment to a contract, a Contract Review Request and Procurement Certification for the amendment must be prepared. The amendment must be accompanied by copies of the original contract (and all addenda) with its Contract Review Request and Procurement Certification and prior amendments, if any, and with a Contract Review Request and Procurement Certification submitted for each amendment.
ii. Amendment Authorized Signatories: The authorized representatives of the System and the contractor who signed the original contract or their replacement must sign the amendment. If, however, the amendment significantly increases the total amount of funds expended by the System, then the next level administrator may be the appropriate System signatory, or Board approval may be necessary.
C. Standard Contracts: Standard contracts are forms that have been approved as such by the Office of General Counsel. Such forms are available from the Office of General Counsel and may be accessed through the OGC website.
i. Use: Review by the Office of General Counsel is unnecessary for a standard contract unless substantive changes have been made in the new agreement. Examples of "non-substantive changes" include changes in the names of the parties, amount of consideration, and the date of entry of the agreement. Substantive changes include the addition of attachments or addenda to a standard agreement or purchase order that contains additional terms and conditions. Requests for a standard contract designation may be made to the Office of General Counsel.
ii. Limitations: Unless a contract has been designated as a standard contract by the Office of General Counsel, the contract must be reviewed and approved as to legal form by the Office of General Counsel before execution. For the purpose of this section, a contract includes but is not limited to any document, which purports to create binding obligations, rights and/or duties between the System or its component entities and any third party. Contracts requiring Office of General Counsel review and approval includes documents entitled: "Agreement," "Memorandum of Understanding," "Statement of Intent," or similar designations. Prior review and approval is also required for any addenda or additions to a standard contract or a standard System purchase order or other similar documents that contain additional terms and conditions that have not been reviewed by the Office of General Counsel.
iii. The System Office, College or department originating the agreement is responsible for ensuring that the wording in standard contracts has not been altered from that approved by the Office of General Counsel. If wording has been altered, the contract must be forwarded to the Office of General Counsel for review and approval as to form.
D. Non-Standard Contracts: Some non-System parties prefer to use their contract for a transaction. If a non-standard contract will be used for a transaction, then the contract will be routed to the Office of General Counsel for review.
E. Description: The contract must contain enough detail so that the respective responsibilities of the parties are clearly delineated.
F. Contract Completion: An originating department should complete the appropriate contract template by either downloading the electronic file of the template and completing the contract on a word processor or copying the template and typing the information onto the hard copy of the document. Contracts should not contain handwritten information. A contract is a legal document; therefore, only the parties' signatures should be handwritten. If necessary, the Office of General Counsel may make handwritten changes to an agreement if the agreement is in final form.
G. Contract Documents: The completed Contract Cover Sheet, and two originals (one for the Office of General Counsel and non LSCS party) must be submitted to the Office of General Counsel for processing, with any exhibits or attachments to the contract. The Office of General Counsel will forward a copy of the executed contract to the department.
H. Processing Time Frames
i. Processing Time: Contracts should be processed as far in advance as possible before the effective date/start date of the contract or before the start date for rendition of services, delivery of goods, or occupancy of leased space.
ii. Effective Date/Start Date: The effective date/start date of the contract and/or the start date for rendition of services, for delivery of goods, for occupancy of leased space, or for use of leased equipment should be specified as follows: ''upon execution by the authorized representatives of the parties." In the alternative, the effective date/start date should be no sooner than the date on which all applicable administrative and legal reviews have been completed and signed by all parties prior to commencement of any duties/actions by the parties as stipulated in the contract.
iii. Competitive Procurement Requirements: All System contractual procurements, whether for goods and services are subject to Section III.D.4 of the Board Policy Manual.
iv. Board Approval: Contracts requiring Board approval, as specified in Section I.J., must be submitted for processing to the Office of General Counsel and to the Vice Chancellor for Administration and Finance a minimum of 30 calendar days prior to the date of the Board meeting at which approval will be sought.
v. Affiliation Agreements: All affiliation agreements should be submitted to the Office of General Counsel at least 30 calendar days prior to the effective date/start date of the contract.
vi. Non-Standard Contracts: All non-standard contracts should be submitted for processing to the Office of General Counsel at least 30 calendar days prior to the effective date/start date. The additional time is needed for legal review.
IV. Alternative Dispute Resolution Clause
Contracts not prepared by the Office of General Counsel for goods or services which encounter an expense for Lone Star College System should submit an Alternative Dispute Resolution Clause form with the submitted contract for review.