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Shelly G. Gonzalez, Policy Officer
Warrensburg, MO 64093
REVIEW AND APPROVAL OF CONTRACTS, REAL ESTATE AND CAPITAL PROJECTS PROCEDURE
Approval: Approved by the President on July 21, 2010.
Authority: Board of Governors Policy 4.1.010
Responsibility: University President
The Board of Governors has delegated to the president of the university the ability to approve expenditures and commitment of university resources as set out in BOG Policy 4.1.010, that have been approved by the board as part of the university’s budget. The board will fulfill its fiduciary duty by reviewing the proposed budget prior to annually adopting the same, assuring that internal and independent audits are performed annually, and reviewing the audit results. If any changes are thought necessary by the Board of Governors the president will be so advised.
This procedure defines the general parameters through which a university contract might be created, the necessary administrative review process and designates who, within the university, are authorized to sign contracts on behalf of the university.
II. University Property and Services
A. The Board of Governors has not delegated its authority regarding the purchase or sale of university property (all real property matters require Board of Governors approval) or services in excess of Two Hundred Thousand and no/100 Dollars ($200,000), regardless of the source of funding; or the lease of real property for the university’s use when the lease is for a term longer than one year or the rental over the entire term exceeds $200,000, regardless of the source of funding. Any contracts that exceed the $200,000 authorization limit without Board of Governor approval shall be submitted to the Office of the General Counsel for appropriate action.
B. The university president may delegate decision-making authority to lease university real property to outside parties to the provost or vice president whose division manages said realty if the lease is for a term of one calendar year or less and less than $200,000. The delegation of authority must be set out in the delegate’s position description or by written delegation. A copy of the job description or letter of delegation must be on file with the Office of the General Counsel.
C. Utility and other easements may be approved by the vice president for administration and finance if the university president has delegated such authority to him or her in writing. The letter of delegation must be on file with the Office of the General Counsel.
III. Purchase Authority
A. Expenditures up to $150,000.00 The president delegates to the provost, the vice presidents and the university directors, the ability to approve expenditures up to $150,000, over the entire term of the expenditures, so long as the purchase will be completed within the fiscal year and the authorizing official has the funds, is satisfied with the terms and conditions and confident that the division has the ability to fulfill the obligations assumed. This authority may be delegated on these or more limited terms, in writing or by position description, to persons reporting directly to the president, provost or vice president.
B. Expenditures over $150,000.00 Any expenditure over $150,000 must be executed or approved by the president who will require a written rationale in support of the expenditure. Before approving an expenditure over $150,000 or any other expenditure that has been delegated by the board and exceeds vice presidential or university directorial approval authority, the president will require evidence that the proposed expenditure is a result of sound business judgment, is prudent and university policies and procedures have been followed.
IV. University Contract Defined
For the purposes of this procedure, a "university contract" is defined as an agreement between two (2) or more parties, one of which is the university or any of its subunits, intended to have legal effect. There must be a common understanding among the parties as to the essential terms, there must be mutual obligations, and there must be "legal considerations," meaning that something of value is exchanged. The term "university contract," as defined in this procedure, does not include agreements between different units within the university.
Examples of university contracts include, but are not limited to: agreements for the purchase or rental of goods or services; nondisclosure agreements; agreements that set terms for acceptance of gifts; a sale, lease, or donation of university goods or services; liability waivers; settlement of disputes; licenses; memoranda/letters of understanding or cooperation; contracts with hotels, convention centers or other facilities which require a written agreement; instructional agreements; assignment of the right of a person, group, or agency to use the university's name, logo or resources; construction contracts and related change orders; grants and sponsored programs proposals and awards; etc.
The above list is not all-inclusive. Some contracts may be oral; others must be written to be enforceable. An agreement may be a binding contract even though one party provides something of value to the other party at no charge. There must be a university interest at stake. While acting in the scope of your employment, if you are entering into an agreement which requires legal considerations or a commitment of university resources, it is best to presume that you are negotiating a "university contract."
In general, agreements are not university contracts if they are entered into solely on behalf of the University of Central Missouri Foundation, a student organization, or purely private interests.
V. Administrative Review
Persons wishing to enter into contract negotiations such as those described above, must begin with these Procedures to determine what initial actions need to be taken. Persons wishing to enter into contracts for the acquisition of goods, services, or capital projects should begin with the Office of Procurement & Materials Management. Persons wishing to enter into agreements for grants or sponsored programs should begin with the Office of Sponsored Programs.
All university contracts prior to the execution thereof shall be approved as to legal form and validity by the university general counsel. Such approval is to be endorsed in writing on the contract, provided that such approval and endorsement shall not be required with respect to individual contracts or extensions or renewals thereof if the form has prior approval by the university general counsel as a standard and contains no substantive changes, deletions or additions other than those pertaining solely to the description of the project, the amount involved, and the term of the contract or extension; provided, however, such form contracts must be sent to the Office of the General Counsel for contract control purposes.
More specifically, the party initiating the contract for the university is responsible for reading the contract entirely and determining that:
• the contract language accurately reflects the current state of negotiations;
• the contract meets programmatic and university mission requirements;
• the contract is in the best interests of the university;
• he can ensure compliance with the obligations it places on the university;
• the contract is sufficiently clear and consistent;
• the contract is signed by person(s) with authority;
• a conflict of interest does not exist; and
• funds have been allocated.
After being satisfied with the form and content of the contract, the initiating employee must submit the contract to the relevant office for administrative review. The Attorney General's Office has issued instructions mandating that certain "prohibited clauses" may not be included in any contracts into which a state agency enters. The Office of the University General Counsel will review each contract to ensure that:
• it does not contain any of the prohibited clauses;
• it is consistent with federal and/or state laws;
• it is consistent with the university's rules and regulations;
• risk management concerns have been reasonably addressed; and
• it is consistent with any predecessor documents.
The Office of the University General Counsel shall determine what other institutional reviews are necessary prior to submission of the contract for signature and will coordinate obtaining the appropriate reviews.
VI. Authorizing Signatures
Authority for contract negotiations and signature approval should include persons in the department that has the responsibility for performance of any part of the agreement. Any contract related to the acquisition of a good or service must be routed through the Office of Procurement & Materials Management. Negotiations with university contractors or vendors should be handled by the Office of Procurement & Materials Management. As a general rule, only the president, the provost, and certain vice presidents and university directors have the authority to contract for the university. Delegation of authority to these persons or others will be reviewed by the university president and university general counsel. Delegation of authority is required to be set out in position descriptions or in writing signed by the university president with a copy to be submitted to the Office of the General Counsel. Anyone else who enters into a contract that purports to bind the university or its subunits is acting without authority and could be held personally liable for the contract.
VII. Record Retention
An original or photocopy of all fully executed contracts shall be forwarded to the Office of the General Counsel. If a copy rather than the original fully executed contract is submitted to the Office of the General Counsel the custodian of the contract should be aware of the retention schedule for such documents.
Links to additional UCM policies and procedures: (1) Board of Governors Policy 4.1.010: Approval of Contracts, Real Estate and Capital Projects Policy; (2) Board of Governors Policy 1.2.040: Delegation of Authority to the University President; (3) Procurement Operating Policies and Procedures Manual; and (4) Office of Sponsored Programs.