Management of Contracts and Memoranda of Understanding (MOUs) - Governing Policy

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Management of Contracts and Memoranda of Understanding (MOUs) - Governing Policy

Responsible officer: Vice-Chancellor and President
Designated officer: Pro Vice-Chancellor (Corporate Services) and Chief Financial Officer
Approval authority: Council
Approval: C10/28, 20 April 2010
Last amended: 22 September 2011
Effective starting date: 22 September 2011
Any policies replaced by this policy: Nil
Policy number: G31.
Related policies:

• Consultancy and Outside Work Policy – Managerial Policy
• External Research Grants Policy – Academic Policy
• Financial Management Practices – Management Policy
• Incoming Sponsorship – Managerial Policy
• Intellectual Property Policy – Governing Policy
• Records Management – Governing Policy
• Risk Management Framework – Governing Policy
• USC Delegations - Governing Policy 
• Use of the University Seal – Governing Policy

Due date for next review: 20 April 2015

Part A: Preliminary

1. Purpose of policy

This policy addresses the administration of University agreements, such as Contracts and Memoranda of Understanding (MOUs). The University is committed to ensuring that agreements are entered into by appropriately delegated officers following due consideration of risks, benefits, other relevant requirements and accountabilities, and alignment with the University’s strategic aims. This policy deals with both legally binding Contracts and Deeds, and with Memoranda of Understanding which are formal or strategic agreements but do not bind the University in a strict legal sense.

2. Application of policy

This policy applies to all staff and members of University decision-making or advisory bodies, including the University Council and its Committees. Agreements entered into on behalf of the University must be administered in a way which:

• delivers clear benefits without incurring undue risks
• incorporates probity, accountability, efficiency and effectiveness into their management
• is consistent with legislation, University policies and procedures and other compliance obligations
• is consistent with the State Procurement Policy requirements and objectives, such as the advancement of government priorities, probity and achieving value for money and
• complies with corporate governance structures.

3. Definitions

In this policy the following definitions apply:

Agreement refers to both Contracts and MOUs.

Contract means an agreement between parties intended to have legal significance and involving the transfer of consideration (that is, value – financial or some other type of benefit - flowing from the beneficiary of the transaction). Contracts generally articulate business relationships for the acquisition or supply of goods or services, for the exploitation or transfer of intellectual property rights (eg. licences) or for the provision of funding.

Some contracts will require reference to other University policies and procedures including:

• contracting capital works and related projects ( for instance USC Delegations - Governing Policy, FMPM Procedure 711 – Purchase Requisitions, Orders, Specifications and Contracts)
• provision of commercial research or consultancies (for instance Intellectual Property Policy; USC Delegations - Governing Policy, FMPM Procedure 621 – Commercial Revenue)
• appointment of consultants (for instance USC Delegations - Governing Policy, FMPM Procedure 713 – Engaging and Managing Consultants and Contractors)
• Intellectual property agreements.

Deed means a form of legally binding contract that requires a high degree of formality for its creation. The University Seal must be affixed to a deed and the deed must always be signed in accordance with the University’s Policy on the Use of the University Seal. Execution of an agreement as a deed ensures that the specified terms and conditions are legally enforceable.

Memorandum of Understanding (MOU) means a document that is intended to formalise the terms of a relationship, arrangement or understanding between the University and another party, but is not intended to be legally binding on either party. An MOU possesses moral force only, and is generally a formal, mutually agreed but diplomatic document, setting out principles, strategies and mechanisms for dealing with the common issues of the relationship. It may lead to the development of separate contracts with legal intent.

MOUs are less complex and detailed than a contract, and are limited to expressing the party’s interest in pursuing a collaboration which may lead to the development of separate contracts with legal intent. MOUs are not to be used when there is a transfer of consideration.

Part B: Policy

4. Risk Management

The University considers the integration of risk management throughout all levels of the organisation as fundamental to achieving the University’s strategic and operational objectives. Consequently, an analysis of risks and benefits must be undertaken prior to entering into an agreement, and it is the responsibility of the relevant Cost Centre Manager or financial delegate, authorised to sign the agreement, to ensure that risk management issues have been addressed. Continuous monitoring of risk during performance or over the life of the Agreement should also be undertaken and this is the responsibility of the designated Agreement Manager, as outlined Section 7 below.

5. Standard University Agreements and consultation with Advising Cost Centres

Risk is also reduced significantly when an agreement contains standard terms and conditions to ensure all relevant matters are addressed, to aid interpretation and the relevant advising cost centres are consulted. The following resources outlined in the table below should be used wherever possible:

Table One: Standard University Agreements

Type of Agreement	Agreement/MOU or guidelines location	Responsible Cost Centre	Advising Cost Centre
Procurement Contracts	Portal: Financial Services (Fin Allstaff/Procurement/Tender documentation) General Conditions of Contract for Supply – Short Form or Long Form	Commissioning Cost Centre	Financial Services
Consultancy contracts	Portal: Financial Services (Fin Allstaff / Forms / View Finance Forms). USC Consultancy Contract with USC Logo	Commissioning Cost Centre	Financial Services
University consultancies	Policy on Consultancy and Outside Work. USC Home Page/About/USC/Policies and plans	Faculty or Cost Centre of Chief Consultant	Office of Research
Minor Capital Works and Maintenance contracts	Portal: Financial Services (Allstaff/ Procurement/Tender Documentation. General Conditions of Contract for Supply – Short Form	Facilities Management	Facilities Management
Major Construction contracts	Facilities Management	Facilities Management	Facilities management
IT Contracts	Information Technology Services	Information Technology Services	Information Technology Services
Agency agreements with international organisations	USC International	USC International	International Relations
ALTC grants	Portal: Learning and Teaching Grants/ALTC Grants	Faculty or Cost Centre of Chief Investigator	Office of Learning and Teaching
Non-ALTC learning and teaching agreements (eg CASA type, HWA type)		Relevant Head of School	Office of Research
Contracts for the external delivery of non-award professional development or training services	Faculty or Cost Centre of Chief Investigator	Financial Services
External Research grants	Portal: Funding Opportunities/External Research Grants	Faculty or Cost Centre of Chief Investigator	Office of Research
External education grants (eg CASR)	Office of Engagement	Faculty or Cost Centre of Chief Consultant	Office of Engagement
Articulation Agreements	Various	Student Administration	Student Administration

Any agreement including provisions for dealing with Intellectual Property must be referred to the Intellectual Property Coordinator.

6. Legal Advice on agreements

Legal advice must be sought where so recommended by the advising cost centre, having regard to concerns such as:

• significant legal issues are involved (for instance where a guarantee or indemnity is given or if there is an exclusion or limitation of liability by the other party in respect of breaches of the agreement or for negligence)the contract is complex or may be high risk to the University, for instance relating to intellectual property, research commercialisation or consultancy, contracts with an international component or where the other party has proposed non-standard or non University mandated terms and conditions
• it is not clear whether the proposed agreement is legally binding or requires formalities for execution (such as execution under seal)
• in the case of high risk or complex contracts, the contract terms and conditions have been developed or provided by the other party.

7. Role and Responsibilities of the Agreement Manager

The delegate authorising the agreement will appoint an Agreement Manager who will normally be a University officer having expertise and/or responsibility for administration of the terms of the contract or MOU, including financial administration.

With respect to University Consultancies, External Research Grants and ALTC Grants the specific roles and responsibilities of the Agreement Manager are provided in the Procedures relating to this policy.

It is the Agreement Manager’s responsibility to ensure that contracts or MOUs are monitored and/or reported on as appropriate in cooperation with the Advising Cost Centre).

8. Authority to Sign Agreements on behalf the University

The University Council has delegated authority to enter into agreements on behalf of the University to the Vice-Chancellor and President. In line with the University Governance Framework – Governing Policy, the Vice-Chancellor and President will ensure that Council is advised of any significant risks or issues relating to a contract or MOU.

Cost Centre Managers have authority via the Schedule of Financial Delegations to sign some agreements on behalf of the University provided that the contracted value is consistent with the limit specified in their financial delegation. For full details of the University’s Schedule of Financial Delegations, see the USC Portal/Financial Services (Fin Allstaff)/Schedules/ Financial Delegation Schedule.

The following important exceptions apply to this authority level:

• Agreements with a dollar value of more than $100,000 must be signed by the Vice-Chancellor and President, except those specified below that must be signed by the Pro Vice-Chancellor (Research) up to a dollar value of $500,000
  • University consultancies and relevant outside work agreements (Consultancy and Outside Work – Managerial Policy)
  •  Commercialisation of Intellectual Property agreements
  • External Research Grants and associated agreements
•  ALTC grants must be signed by the Deputy Vice-Chancellor Agreements involving the delivery of USC services off-shore must be signed by the Vice-Chancellor and President
• Agreements with international higher education providers must be signed by the Vice-Chancellor and President
• MOUs must be signed by the Vice-Chancellor and President or the Deputy Vice-Chancellor

An agreement signed under seal must always be executed in accordance with the University’s Policy on the Use of the University Seal (Use of the University Seal - Governing Policy)

9. Records Management

Developing and retaining appropriate records of the negotiation, execution (of documentation outlining the terms and conditions) and ongoing monitoring of University agreements is vital to ensuring that the University is aware of its obligations, can protect its interests including any possible litigation, maintain corporate memory and for audit and compliance purposes. Consequently, the Agreement Manager is responsible for recording and filing contracts and/or MOUs in the University’s records management system in accordance with the Records Management policy.

END

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