Contract Review and Delegation of Signature Authority

Administrative Leadership GroupSeptember 26, 2019

• Veronica Dure, Contracts Manager, Strategic Purchasing, Contracts &

Insurance (SPCI)

• Beth Gentry, Assistant Vice President, Business & Financial Services

• Jeanne Hebert, Senior Director, Strategic Purchasing, Contracts &

Insurance (SPCI)

• John Luipold, Vice President Real Estate & Strategic Initiatives

• Luba Niemann, Manager, Administrative Operations and Special

Projects

• Yolanda Lamboy, Associate Counsel, Office of General Counsel

Kathy Santos, Executive Assistant to the Vice President for Finance &

CFO

Contracts

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“CONTRACTS, LIKE HEARTS, ARE MEANT TO BE BROKEN.” -RAY KROC.

⚫ Drafted Signature of Delegation Authority for Contracts:

Approved by Corporation

Distributed March, 2019

Codifies previous Corporation approvals

Applies to all University operations and projects.

⚫ Confirms Corporation requirements governing review, signature and financial approval authority for execution for all contracts.

⚫ Shifted primary responsibility for routine contract review and approval from OGC to Strategic Purchasing, Contracts & Insurance.

Background (Spring 2019)

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Background (cont.)

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● Working Group to clarify & operationalize establishedpolicies:

Updated & Revised Delegation of Signature AuthorityDocument (approved by Corp.);

- clarified document terms

- revised dollar limits and authorized signers.

Purchasing established/filled Contract Managerposition;

Signature Authority & Contract Execution policies havenot been consistently been followed.

Back to Basics● What is a contract?

● Why is a contract important?

● Who is responsible for contract review & approval?

● How should contracts be managed by business unit?

● Who is authorized to sign a contract, what type of contractand at what dollar limits?

● What are the key takeaways for managing contracts?

● 90/10 Rule – there will always be unique contractsituations.

What is a “Contract”?

Contract / Not a contract?

Professional Service Agreement

Are the following contracts?

• Verbal Agreement to purchase goods – it depends• Brown’s Professional Services Agreement - YES• Letter of Intent - possibly• Brown’s Purchase Order - YES

What is a “Contract”

Contract

Legal Purpose

Mutual Agreement

Consideration

Competent Parties

Genuine Assent

Format

• Contract – a legally bindingagreement between two ormore parties to do (or notdo) a particular thing.

• Consideration – somethingof value is exchanged.

• Although contracts can beverbal - All Browncontracts must be inwriting.

Why are Contracts Important?Contracts are a critical part of the University’s operation:

⚫ Establish University’s financial exposure.

⚫ Define deliverables of a relationship between contractingparties.

⚫ Define conditions under which you, yourdepartment and the University are liable for risksand/or damages.

⚫ Define roles and responsibilities including securitymeasures taken to protect data, injury to parties involved,and intellectual property rights.

7Please invite OGC to visit your department or office for a Contracts 101 Presentation

This is not optional. Unless you are signing a standard Brown template with no revisions you must engage one of these parties for contract review.

Who is responsible for contract review and approval?

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● Strategic Purchasing, Contracts & Insurance(SPCI)

● Office of General Counsel (OGC)

● Computing & Information Services (CIS)

● Office of the Vice President for Research (OVPR)

SPCI

OVPR

OGC

CIS

Not to scale

● More often than not, SPCI is likely to be your primaryresource.

● Not just purchase orders.

● Responsible to review and approve contracts for goodsand services (except for those specifically handled byOGC & CIS ).

● New contract manager, Veronica Dure.

● Contracts submitted to SPCI not under SPCI purview willbe routed to the correct office.

Strategic Purchasing, Contracts & Insurance (SPCI)

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● Most contracts are for goods or services.

● Goods are tangible objects that satisfy University businessrequirements.

Examples: supplies, machinery, equipment, furniture,vehicles, etc.

● A service is an action that a person or business does forthe benefit of the University.

Examples: consultants, architects, engineers, guestspeakers, musical performance, maintenance serviceagreements, etc.

Goods & Services

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● Reviews all contracts not under the oversight of SPCI, CIS and OVPR.

● Provides support to SPCI, OVPR, CIS as needed.

● Only OGC can draft new agreements including templates.

● Only OGC can change a template.

● OGC created templates are considered pre-approved and can be executed without review (provided that no changes have been made).

Office of General Counsel (OGC)

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● Conducts data security assessments (Risk level 1-3) for all contracts which involve the sharing of, or access to Brown data with another entity.

● Reviews all IT contracts (in addition to data security assessments).

Computing & Information Services (CIS)

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Computing & Information Services (CIS)

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IT contracts include

• software products (e.g. database systems, educationalsoftware, computer programs),

• cloud services and IT professional services,

• networking devices, cell phones, wireless devices,

• personal computers, workstations, mainframes,minicomputers,

• any associated peripherals and software, regardless ofwhether used for administration, research, teaching orother purposes.

● Office of Sponsored Projects reviews and approves research-related proposals and awards for sponsored grants,contracts, cooperative agreements, and sub-awards.*

● Industry Engagement & Commercial Venturing reviews andapproves industry research related contracts, including:

● NDA’s/CDA’s

● Material transfer agreements

● Office of Research Integrity reviews and approves data useagreements.

Office of Vice President of Research (OVPR)

14* BioMed Research Administration reviews and approves proposals for external grants.

Business Unit Negotiation

Engage SPCI, OGC, CIS or OVPR/OSP

Contract Negotiation

Execution

How Should Contracts be Managed

This is a Process – Plan Accordingly!

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Time

Sometimes contracts are urgent, but not every contract can be an emergency.

How to get started? (non-OVPR)Step 1: Determine

Reviewing Authority Step 2: Business Unit Review Step 3: Submit Your Request

Is this purchase of goods and services?

Is this contract IT related?

Do you need a contract or template drafted?

YES

YES

YES

NO

Ensure the scope of services reflect the departments

understanding.

Does the contract reflects the departments understanding of the goods or services to

be provided?

Can your dept. comply with the terms and conditions?

Is there appropriate funding?

Complete and submit the contract review form on the

OGC Website

Complete and submit the CIS IT Contract Form

Complete and submit the SPCI Contract Review Form

NO

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● Even routine contracts can take weeks.

● There are many customers – with competing priorities.

● Provide as much detail as possible.

● A vendor quote or proposal with specific terms & conditionsattached should be reviewed before acceptance.

Things to Consider

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● Commerce Committee review required if credit card acceptance is part of any initiative (PCI-DSS Compliance)

● Don’t forget the Data Security Review (contact CIS)

● Does your contract take in revenue that could be considered UBIT (contact Controller’s office)?

● Check SPCI's Preferred Supplier site– a University wide contract may already exist.

● This does not supplant Brown’s competitive bid process requirements for the purchase of goods and services.

● Electronic signatures (PDF, Adobesign, Docusign) are OK.

Things to Consider

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Who Can Sign a ContractBrown University Code of Conduct

Section 9. We Comply with the Law

a. Contractual ObligationsAccepting an agreement or contract, including sponsoredproject funding, may create a legal obligation on the part ofBrown University. We must comply with the terms andconditions of the agreement as well as applicable laws andregulations. Therefore, only if you have authority delegatedby an appropriate University official can you enter intoagreements or contracts on behalf of the University;otherwise, you cannot sign an agreement.

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President General Authority to sign all contracts

Provost & Executive Vice President for Finance & Administration

General Authority to sign all contracts

Senior Officers $1,000,000 >$500,000 must be countersigned by Provost or Executive Vice President for Finance and Administration

Divisional Unit Officers $100,000 May delegate up to $50,000to their manager-level subordinate

Operational Unit Officers $50,000 May delegate up to $10,000 to their manager-level subordinate for PSA’s only

Delegations of Signature Authority

What Can You Sign?

OGC Contract Process Site

All contracts of greater than $500,000 in value must be countersigned by Provost or Executive Vice President for Finance and Administration.

Approved Modifications (examples – not comprehensive):

● OVPR grants and proposals

● Advancement Gift Agreements

● Real Estate Leases, Purchase & Sale Agreements (morerestrictive)

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Countersignature Requirements

⚫ Execute contract outside of signature delegationauthority limits.

⚫ Submit an already executed contract to OGC orSPCI….and then ask for review & approval.

⚫ Draft your own contract form or modify a template.

⚫ Execute IT related contract without a data securityreview or contract review by CIS.

⚫ Request immediate contract review.

Real Life Examples of What Not to Do

23All of this has happened in the last 45 days!

• This is confusing - when in doubt - ask questions.• Contracts are vital to the University’s operation.• A Purchase Order is a contract! It is not only a payment mechanism.• Contracts can be very complex legal arrangements which may

expose Brown to significant risks & liability.• Brown’s policies regarding contract review, approval and execution

apply to all departments and employees without exception.• Be responsible to understand this process:

Learn your limits (contract amount & type). Unauthorized execution of contracts are a violation of

Brown’s Code of Conduct and can result in personalliability.

• SPCI, OGC, CIS and OVPR are key colleagues.

Takeaways

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• This is an evolving process to be continuously reviewed &improved.

• Please provide feedback.• Ongoing evaluation of unique contractual requirements.• Implement Contract Management Software.• More University outreach:

AAIM Chairs & Directors Working Labs @ SSL

What’s Next

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Questions / Feedback

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