12/18/2017
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Procurement Contracts Training
Presented by Procurement Services
Agenda
Purpose of the Training
Total Contract Manager
FIU Contracts Policy
Contract Procedures
Contract Administration
Contract Amendments, Renewals and Extensions
Additional Resources
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Purpose of the Training
This training is designed for:
Understanding basic procurement contracts
Knowing how Total Contract Manager (TCM) affects the
contractual process
This training provides the tools to effectively review,
negotiate, and process contracts
Training of Procurement Contracts and Total Contract
Manager (TCM) are required in order to gain access to
TCM
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Contract Defined
“An agreement between two or more persons
which creates an obligation to do or not to do a
particular thing.” [Black’s Law Dictionary, 6
th
ed.]
In other words…
A legally enforceable promise
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Contracts can have many names,
such as…
Agreements
Memorandum of
Understanding/Agreement
Appointment Letters
Letter of Understanding
Click-Through Agreements
Purchase Orders
Terms & Conditions
Proposal Acceptance
Licenses
Non-Disclosure
Agreements
Sponsorship Agreements
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How Can You Tell if it is a
Contract?
If it creates an obligation to do something OR not to do
something on either or both parties
It’s a contract
While contracts can be made verbally, if a signature is
required to create the obligation
It’s likely a contract
A PO is a form of a contract
Formal contract is needed when both parties require a
signed agreement
If you have any questions, don’t guess. Contact
[email protected] for assistance.
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Why Does FIU Enter into Contracts?
Many reasons, some of which include…
Further our mission (education and research)
Buy goods or services
Sell goods or services
Employ faculty, staff, teaching assistants, etc...
Establish affiliations
Generate revenue
Lease or rent space
Remember this training focuses on procurement contracts
(i.e., buying goods or services)
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Total Contract Manager (TCM)
TCM is FIU’s online contract management tool used for all
Procurement Contracts
Reduces risk through compliance questionnaire in workflow
Improves visibility and contract accessibility
Central contract repository
Contract Status
Eliminates Contract Intake Form
No more Business Unit Approver
Contract Manager in TCM has been approved by Executive Leadership
If a PO is needed, the requisition will go through the workflow approval process,
and the draft contract can be attached
If method of payment is not a PO, then an internal approval process for contracts
may be needed if required by individual departments
Procurement Services will no longer be the contract initiator, but instead
will serve as a workflow approver and gatekeeper.
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Goals of Total Contract Manager (TCM)
One software system to execute, manage, and view all procurement
contracts - including the electronic signature feature via DocuSign
Provide contract visibility to system users, and view what stage the
contract is in within the approval workflow process
Ensure that internal compliance issues are taken care of via electronic
approval workflow before the contract is executed
Examples: IT Compatibility, Export Controls, Tax Compliance, Privacy
Obligations, and procurement Regulation Compliance
Provide a systematic process to ensure that contract deliverables are
documented
Delegated Contract Managers are responsible for submitting the
contract for execution, distributing the contract to appropriate parties
in the department, and managing the contract post-execution.
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Total Contract Manager (TCM)
Only individuals designated as a Contract Manager can submit
a contract for approval and signature in TCM
Once the Contract Manager attaches the final draft contract
(including any relevant documentation) and submits it for
approval, the following automated processes will occur:
• Routes to all required approvers based on the Contract Manager’s
responses to the compliance questions
• Provides statuses of the contract through the workflow approval
process
• Notifies the Contract Manager once all approvals are obtained
• Sends the contract to Supplier and the FIU Authorized Signatory
for electronic signatures using DocuSign
Once electronic signatures are obtained, the Contract Manager
is notified and the work can commence
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Contract Manager
Approved by management (check with Controller@ fiu.edu or
Procurement Services website)
Processes all procurement contracts (including renewals,
amendments, and extensions) in TCM
Contract Manager will process all contracts except for Service,
Entertainment and Performance Agreement which should be emailed to
[email protected] who will process in TCM
See Allowable Unencumbered Payment List and Process at
http://finance.fiu.edu/controller/Forms.html
If contract is in TCM and a renewal, amendment, or extension is needed,
please contact [email protected].
Utilizes the appropriate OGC agreement templates and supplemental
addenda: https://generalcounsel.fiu.edu/contract-forms
/
Accurately answers a series of in depth compliance questions
Responsible for contract administration during the life of the contract
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FIU Contracts Policy
Office of the General Counsel (OGC) policy states that OGC
will conduct a legal review for procurement contracts when:
The contract value is over $75K OR
It is a software agreement regardless of value
Contract Manager’s responsibility is to:
Review all contracts (even if the OGC will be reviewing them)
Know what type of goods/services are being contracted
Answer all TCM compliance questions correctly
Obtain a fully executed contract with the authorized signatory
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Step 1: Review the Contract
Define the Scope Of Work (SOW)
Clearly define the type of goods and/or services need
Contracts should include specific statements of your
requirements, obligations, and expectations. This includes:
Timing, date, place and description of performance or service
Deadlines, timelines, deliverables and due dates
Warranties and guarantees
Ownership of any intellectual property created
Quantity and quality of product
Read the entire contract
Revise as necessary
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Step 1: Reviewing Contracts
Determining the Proper Procurement Method
Per the FIU procurement Regulation FIU-2201:
Take the total value of the contract for initial term
PLUS all renewal costs
Renewal period may not exceed 5 years or twice the term of the original contract ,
which ever is longer
Determine if the contract is over $74,9999
Can’t divide the procurement contract to avoid the requirement of a competitive
process (i.e., staying under $75K)
Example One: Example Two:
Initial contract is $50K Initial contract is $50K
ALL renewals are $10K ALL renewals are $50K
$60,000 $100K
Total is below the formal bid, Total is above the formal bid threshold,
but requires 3 quotes threshold. Contact procurement!
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Step 1: Review the Contracts
Determining the Proper Procurement Method
Categories of procurement methods:
Emergency – As defined in the Board of Trustees (BOT) Policy FIU-
2201
The Emergency Request Form is located at:
http://finance.fiu.edu/controller/Forms
Sole Source
Review Annual Certification for Sole Source Purchases prior to
requesting a sole source purchase at:
http://finance.fiu.edu/procurement/2procedures1.html
Under $75K – Send an email with justification to the Director of
Procurement Services
$75K or more - Attach a completed Sole Source Request form located at:
http://finance.fiu.edu/procurement/Docs/solesource.pdf
Refer to the Sole Source flow chart for a quick review of the process at:
http://finance.fiu.edu/procurement/Docs/Sole_Source-Flowchart
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Step 1: Review the Contracts
Determining the Proper Procurement Method
Exempt – As defined in Section 6(d) of BOG procurement Regulation
18.001: http://www.flbog.edu/about/regulations/regulations.php -
22 exemptions
Competitive solicitation is optional
Exceptional - As defined in BOG 18.001 (4)
4 exceptional purchases
Competitive solicitation is optional
Piggy-back/Cooperative: A contract awarded through a competitive
process which allows FIU to purchase the same services or goods at
the same contracted terms.
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Step 1: Review the Contracts
Determining the Proper Procurement Method
Competitive Solicitation: Openly inviting all interested suppliers to
submit a quotation, bid or proposal to supply the procurement need
of the University.
Informal Competitive Process - Purchases with a total cost under $75,000
can be obtained through an informal competitive process by obtaining:
one quote for purchases under $14,999
two or more quotes for purchases over $15K
three or more quotes for purchases over $30K
Formal Competitive Process - Purchases of goods, services, or deferred
payment contracts in an excess of $75K shall be obtained through a formal
competitive process, unless otherwise exempt.
Competitive Solicitation Form must be completed:
http://finance.fiu.edu/procurement/Docs/Contract_Intake_FormCS.p
df
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Step 2: Choose the Proper Contract Template
Option 1: OGC Contract Template
If, at all possible, use the OGC Contract Template:
Independent Contractor Agreement (for professional
services)
See: https://generalcounsel.fiu.edu/contract-forms/
If not applicable, go to the next option…
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Step 2: Choose the Proper Contract Template
Option 2: Supplier Contract
applicable supplemental addendum:
General (which contains our standard terms & conditions)
Entertainment-Performance
Hotel-Meeting Space
Library Subscription
Software License
See Supplemental Addenda:
https://generalcounsel.fiu.edu/contract-forms/
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Step 2: Choose the Proper Contract Template
Option 2: Supplier Contract (Cont.)
If possible, obtain a Word version of the supplier contract so
that changes can be redlined
If a Word version is not available, revisions can be made to a
PDF document electronically or to a print-out of the contract
by hand
Please ensure all handwritten revisions are in legible
print
Any revision to a PDF document must be marked by the
department, as any changes will require the initials of the
supplier and the FIU authorized signatory
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Step 2: Choose the Proper Contract Template
Option 2: Supplier Contract (Cont.)
Revise the contracting name: “The Florida International
University Board of Trustees”
This is important to change because this is our legal name
Incorporate the Supplemental Addendum by adding the
language: “The attached Supplemental Addendum is
hereby incorporated by reference.”
This must be done above the signature line
If you fail to do this, the Supplemental Addendum (with
all of our terms and conditions) will not be part of the
agreement
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Step 2: Choose the Proper Contract Template
Option 3: Click-Thru Agreements
University employees should not accept click-thru agreements
If a click-thru is necessary, follow these steps in this order:
If possible, provide the supplier with written notice of that
we cannot accept the agreement as presented
Try to obtain an email address for the supplier or their
website
Request that they allow us to print, review, revise as
necessary so that both parties sign the contract
Follow our standard supplier contracting process
If the supplier is uncooperative, continue to the next one
procedure…
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Step 2: Choose the Proper Contract Template
Option 3: Click-Thru Agreements (Cont.)
After you have provided the supplier written notice that FIU does not
accept click-thru agreements & the supplier is still not cooperating
Obtain department head approval (i.e., Director, Dean or VP)
Email the supplier either directly if you have an email address or
an email address on their website) advising them:
You are not an authorized signatory for FIU and do not have the
authority to enter into agreements on behalf of the University
AND
The agreement is not enforceable
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Step 2: Choose the Proper Contract Template
Option 3: Click-Thru Agreements (Cont.)
Additionally refer them to the Signature Delegation page on the
procurement website for the formal notice:
http://finance.fiu.edu/procurement/2sig_delegation.html
This webpage states that only those individuals with signature
authority can bind the University, even with click-thru agreements
This email to the supplier puts them on notice about this
You should keep the email and any additional documentation on
file for your records
You will need it if ever audited for ProCard usage
After all these steps are done, you can proceed with the
click-thru purchase
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Step 2: Select the Proper Contract Template
Option 4: Hotel Agreements
FIU has Master Agreements with a number of hotels
Use these hotels because the negotiating work has already been done
All hotel agreements, addendum templates, and the agreement
procedure are available on the Procurement Services website at
http://finance.fiu.edu/procurement/4contra_master_hotel_agree
ments.html.
If the hotel you want to use is not on the list, follow the supplier
contract process
OGC has an addendum for hotel-meeting space:
https://generalcounsel.fiu.edu/wp-
content/uploads/sites/26/2014/07/Hotel-Meeting-Space.pdf
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Step 2: Select the Proper Contract Template
Attachments
Attach contracts and any relevant documentation in TCM
Identify what documents you want to print with full contract
If the contract is already an attachment in TCM and changes are
needed, you will need to edit properties
Upload all revised versions of the contract in TCM
TCM will track the different versions
Mark the contract document you are working on as the Main
Document in TCM
Identify the attachment correctly ( i.e. contract name, addenda #,
amendment, extension, etc…)
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Step 3: Choose the Proper Payment Method
Option 1: The ProCard
Is this a transaction that you would be permitted to
use Option One: the ProCard?
Check the Departmental Card Guidelines &
Procedures Manual:
http://finance.fiu.edu/controller/Docs/Commodit
y_Card_Manual.pdf
If not applicable, go to the next option…
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Step 3: Choose the Proper Payment Method
Option 2: The Unencumbered Process
Is this transaction eligible for the Unencumbered
Process?
Check the Allowable Unencumbered Payment List:
http://finance.fiu.edu/controller/Forms.html
If eligible, complete the Unencumbered Request Form,
and follow the unencumbered payment procedures
Note: If the service being purchased is
entertainment or a performance, use the OGC
Contract Template
If not applicable, go to the next option…
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Step 3: Choose the Proper Payment Method
Option 3: Purchase Order (PO)
If the supplier does not require a signed contract by both
parties, a PO can be issued
Our PO has terms and conditions included in it
The FIU PO is NOT a proper form for a transaction with a
complex scope and/or extensive deliverables
If not applicable, go to the next option…
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Step 4: Submit the Contract for
Approval/Signature
Do you have a Services-Entertainment-Performance
Agreement?
Yes Email the completed contract, signed by the
Contractor to [email protected] for the Director of Procurement
Services to sign on behalf of the Florida International University
Board of Trustees
Do you have an Independent Contractor Agreement or a
supplier agreement?
Yes A Contract Manager in your department must
submit the contract in TCM for approval and signature by an
authorized FIU signatory
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Step 4: Submit the Contract for
Approval/Signature
For Independent Contractor Agreements and supplier agreements, select
the appropriate FIU signatory from the dropdown menu
• The Director of Procurement Services provides signatory for purchases
under $100K
• Go to OGC’s website to determine who has FIU Signature Authority
https://generalcounsel.fiu.edu/signature-authority/
Not everyone has the authority to sign a contract
Unauthorized individuals who sign contracts on behalf of FIU expose
themselves to possible personal liability and having the contract voided
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Step 4: Submit the Contract for
Approval/Signature (Cont.)
Once all the approvals have been obtained in TCM, the Contract
Manager must submit the contract for electronic signatures using
DocuSign technology
If a contract is over $100K, and it requires the signature of either the
Provost, CFO, or President, a who, what and when explanation needs to be
included in the Approval Details window in TCM
If a contract is over $1M, the President’s Cover Sheet is needed, and either
the Provost or CFO will need to initial the contract
Changes to the contract can not be made in DocuSign
Supplier should email the Contract Manager the changes
Contract Manager will return contract to draft, check out the contract,
attach the updated contract and upload it as a new version
The final version will be routed for approval and sent out for signature via
DocuSign
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Contract Administration
Once a contract has been executed, the department is responsible for
the contract administration
Below is a list of examples of contract administration activities:
Ensuring all supplier deliverables are completed and delivered to FIU
Ensuring all FIU deliverables are completed and delivered to supplier
All deadlines are met and timelines adhered to
Payments are made as outlined in the contract
Issue amendments if services exceed the term of the contract
Exercising renewals or extensions, as needed
Insurance certificates are maintained up-to-date and on file by department
during the term of the contract
Appropriately addressing supplier non-compliance
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Contract Administration
Renewal options are defined in your solicitation and/or
contract and can not be exceeded.
An extension can be up to 12 months, once all renewal options
have be exhausted and the extension is approved by the
Director of Procurement Services
Terminations will be handled by Procurement Services. Please
email request to [email protected].
All contract administration activities can be managed in TCM,
such as renewals and obligations (deliverables, bonds,
insurance deadlines, payment terms - Phase 2 of TCM
Training)
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Contract Renewals, Extensions or
Amendments
An amendment is a written change to the terms and conditions of a
contract and signed by appropriate signature authorities
Administrative
Non-substantial
SOW
Schedule
Budget
Substantial changes
Within the SOW, but may not be appropriate as a contract amendment
Must be mutually agreed upon by both parties, as long as it is within
scope of the original contract
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Why does an amendment make the
most business sense?
Project Continuity
Time Savings
Cost Effectiveness
New Contract Learning Curve
Amendment is Time Only
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Additional dollars = additional deliverables or service timeframe
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New Contract or Amendment?
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Consider the following criteria:
Change in Scope
Change in Price Factor
Contractor Ability
Change in Competitive Factors
Contract Length
Aggregate Spend exceeds the bid threshold
No Renewals or Extension
Contract Expired
Contract Administration in TCM
All renewals, extensions and amendments will be processed in TCM
Contract Managers will process them as a new contract if contract is not in TCM.
Include all contract documentation as separate attachments.
Use a common naming convention such as PUR#, then Amen#, or Ren#
Procurement Services will process contracts if they are in TCM. Please email
renewals, extensions, and amendments to [email protected]
Extensions and amendments should utilize OGC’s template
Changes to OGC templates requires the approval of OGC
Extensions cannot exceed 12 months, and requires the approval of the Director of
Procurement Services
Renewals are normally processed using suppliers template
Procurement Services will process competitive solicitations over $75K
A list of FIU contracts that may require addendums can be found at
http://finance.fiu.edu/procurement/3contra_fiu_contracts.html
FIU enterprise contracts may not be in TCM, but the addendums can still be processed in
TCM
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Additional Resources
Procurement Services Website:
http://finance.fiu.edu/procurement/
Procurement Manual:
http://finance.fiu.edu/controller/QL_ControllerProceed.html
OGC Forms:
https://generalcounsel.fiu.edu/contract-forms/
Office of the Controller Contact List:
http://finance.fiu.edu/controller/ContactUsDept.html
Office of the Controller Forms:
http://finance.fiu.edu/controller/Forms.html
Signature Delegation:
https://generalcounsel.fiu.edu/signature-authority/
One-on-One Contract Questions/Assistance:
Email: [email protected]
TCM User Handbook and Training Schedule
http://finance.fiu.edu/controller/FinSysandSup2.html
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