3.0 To assure that the University is entitled to all protections under the Uniform Commercial Code all procurement commitments in excess of $5,000.00 should be evidenced by a written document (purchase order, agreement, independent contractor agreement, license, or other University document of standard terms and conditions for conducting business). Some commitments, even for less than $5,000.00, may involve serious legal or financial risks, and in those cases the responsible person of procurement authority should also require a written contract. Recurring purchases, even for less than $5,000.00, should be evidenced by a University agreement even though the individual releases under the agreement may fall under the $5,000.00 exemption.
The University, through the offices of Purchasing and Payment Services, will from time to time establish contracts, agreements, business relationships, and affiliations with business entities and others which will constitute the University's Contract Listing (UCL) for the exclusive benefit and use of the University and its affiliations whose funding is committed and disbursed by the University. The nature of the contracts, the announcement of their application, use and limits, is the responsibility of the Director and the Associate Vice President for Finance. All University faculty, staff and employees are required to review the UCL prior to seeking market research, acquiring goods or services under individual authority, or preparing request for procurement of goods or services. The efficient and responsible conduct of business necessitates cooperation in the procurement activity of goods and services from firms which have contracted with the University for its needs and requirements. Contracts are established to be the recommended source of goods or services. Contracts and written agreements include specific conduct of business whereby the University is legally bound in both its understanding and actions with suppliers. Some contracts and agreements may have restrictive conditions, limits on the goods or services entitled to the University, and dollar or volume threshold limits contained within the understandings of the contract or agreement and shall therefore be explained or clarified in the published Preferred Supplier Contract or the directives issued for its use. All procurement and engagement of services of the University are subject to existing contracts and agreements which therefore necessitate employee involvement and knowledgeable behavior in business matters.
3.0.1 Purchase Agreements are University contracts issued to provide convenient sources of supply under the standard business terms and conditions of the University and in the open market. Purchase Orders may be issued up to the small dollar procurement threshold and are established to meet the price reasonableness standards adhered to for this dollar threshold (see statement 7 of this POLICY). Purchase Orders above the small dollar procurement threshold may be made by comparative competition of Purchase Agreements or documentation of a particular supplier as justification of sole source. Price analysis of goods or services for this higher threshold and basis of decision may be required if such analysis was not performed at the time when the Purchase Agreement was issued because the agreement anticipated the small dollar threshold level would not be exceeded.
3.0.2 Qualified Agreements are University contracts issued pursuant to the requirements for competition in source of supply as documented in accordance with Federal regulation, or, may have been issued based upon documented justification of sole source manner acceptable for non-competition situations. These agreements are recommended sources for the acquisition of specific goods or services. Procurement dollar thresholds for acquisitions up to $200,000.00 are allowed when so stipulated at other dollar thresholds in a Preferred Supplier Contract when these agreements are referenced in the transaction record.
184.108.40.206 Manufacturer Negotiated Agreements are University contracts entered into by the University directly with the manufacturer of a product, without the involvement of a supplier or distributor. The University enters into these agreements when the desired products are not otherwise available from a competitive source offering terms and conditions as favorable as those offered by the manufacturer directly. In entering into a Manufacturer Negotiated Agreement, the University must assure itself that the manufacturer's terms and conditions do not include unacceptable commercial trade terms of the sort customarily extended by manufacturers to distributors. A Manufacturer Negotiated Agreement may result from noncompetitive negotiations with the manufacturer or from a competitive solicitation of several manufacturers having similar products required by the University that are not equivalent based upon a manufacturer's unique specifications of its products. Manufacturer Negotiated Agreements shall be considered Qualified Agreements for purposes of the nomenclature and procurement procedures of the University.
3.0.3 Preferred Agreements are University contracts with special or unique benefits to both the University and the supplier whereby the University agrees to exercise direction, discretion and control to make all best efforts to rely on the contracted supplier for all of its acquisition requirements. All procurement dollar thresholds for acquisitions are allowed.
3.0.4 Exclusive Agreements are University contracts that restrict the source of supply to the named supplier for all procurement or engagement of services. All procurement dollar thresholds for acquisitions are allowed.
3.0.5 Revenue Agreements are University contracts which involve a revenue source to the University, offset pricing by returned commissions or rebates, or involve the development of a product or service which may ultimately cause the University to benefit in payments, royalties, provisions for no-cost goods or services, or have a significant financial funding relationship to the University, and shall be solicited and executed by the Director or the Associate Vice President for Finance. Revenue Agreements include any supplier agreement which allows for the resale of products or services to the University, its students, and the general public. If a Revenue Agreement is a resale agreement that anticipates taxable sales to students or the public the operation of such agreement will be allowed only if the University has an established relationship with the State of Illinois and the City of Chicago permitting the conduct of business as a commercial enterprise of the University. Operations under revenue agreements for resale may be excluded from competitive requirements of the University if the procurements are primarily for enterprise sales to the general public. No revenue or value relationship revenue agreement or contract for trial, evaluation, testing or analysis may be issued or executed unless reviewed and authorized by the Director or the Associate Vice President for Finance. Any contract for trial, evaluation, testing or analysis not related to procurement or the engagement of services authorized by policy of the University or powers authorized elsewhere in University policies, by-laws, actions of the Board of Trustees, the President, the Provost, and others as authorized by the University are hereby excluded from this Paragraph of this POLICY. All payments of revenue to the University are to be made payable to the Associate Vice President for Finance, The University of Chicago. All non-revenue agreements or contracts that cause suppliers to perform or provide for the provisions of no-cost goods or services to the University as a requirement of the agreement or contract shall require a written report to the Director of the occurrence and manner for agreement or contract fulfillment within thirty days of the delivery or action by the supplier unless the agreement or contract specifically states reporting times that are different. No employee, department or division of the University may establish operations, understandings, agreements or contracts which permit revenue or credits to be generated for budget purposes between budget centers of the University in exchange for goods or services, including inventory and resale operations using recharge methods, without the prior written permission of the Associate Vice President for Finance.
3.0.6 Contracts or Agreements for construction, renovation, design, engineering, remodeling, or trade labor services require signature review and approval of the University Architect prior to the authorization of work to proceed in accordance with the direction of the University Architect. The University Architect may assign representative supervision to project managers and other individuals employed under the direct supervision of the Director, Facilities Services. The standard form of contracts or agreements under this paragraph shall be issued for use by the Director and the Associate Vice President for Finance. No standard form shall be modified or replaced unless changes, modifications, additions to form, content or purpose are approved by the Risk Management Department and the Office of Legal Counsel. Management of standard agreement forms and record of changes to form shall be the responsibility of the Director of Purchasing and Payment Services in accordance with directives from the Office of Legal Counsel. The Director of Purchasing and Payment Services, shall receive from the University Architect or supervisory employees assigned to a project, the request(s) for changes to contract or agreement form and the Director shall proceed to report with or without concurrence to the Associate Vice President for Finance, and CFO, if required, any requests for standard agreement form changes, deviations or discrepancies which may need review and approval relative to the established directives of the Office of Legal Counsel.
3.0.7 Independent Contractor Agreements are University contracts for the engagement of services from an independent contractor whose services are subject to the standard terms and conditions in a business relationship with the University. No independent contractor may be engaged at any dollar level unless an agreement of independent contractor services has been jointly executed by the independent contractor and an authorized procurement agent of the University. See statement 10.7 of this POLICY for requirements and payments of this engagement of services.
3.0.8 Maintenance Agreements are University contracts with an outside agency to maintain service or upgrade a system over a period of time.
3.0.9 Lease Agreements (Equipment) are University contracts covering the lease or rental of equipment such as vehicles, computers, or scientific equipment. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.
3.0.10 Lease Agreements (Space) are University contracts for the lease or rental of office storage, garage, land or other space. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.
3.0.11 License Agreements are University contracts relating to the licensing of a product. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.
3.0.12 Professional Services Agreements are University contracts relating to consulting, presenters, entertainers, or other professional service relationships. All procurement dollar thresholds for acquisitions are allowed. Agreements and/or purchase order activity are processed according to Procedure 1.072.
3.1 All contracts and agreements of any kind pursuant to which the University agrees in any way to insure or indemnify any individual, association, corporation or other organization or to release any individual, association, corporation or organization from liability to the University must be in accordance with the policies, practices and procedures established and published by the Risk Management Department and the Office of Legal Counsel. Any contract that does not include the standard terms and conditions which insure and indemnify the University must have its terms reviewed by the Office of Legal Counsel. Any contract for any amount for goods or services which is not in accordance with the University standard terms and conditions such that the University is to indemnify the Supplier must be approved for the University by the signature authorization of the CFO.
3.2 Contract modifications may pertain to initial contracts or modifications to existing contracts. Since modifications of contracts often produce disputes, it is required of all University procurement authorities to evidence all modifications by appropriate documentation which will be recorded with the Director, the Associate Vice President for Finance, or the Office of Legal Counsel. All University employees are specifically requested to avoid oral commitments, changes to commitments, and cancellation or termination of commitments that are not evidenced by a written document either in the initial contract with the supplier or in any modification thereof.