Management of Contracts and Memoranda of Understanding (MOUs) Procedures

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Management of Contracts and Memoranda of Understanding (MOUs) Procedures

Parent policy: Management of Contracts and Memoranda of Understanding (MOUs) - Governing and Institutional Operating Policy
Responsible officer:  Vice-Chancellor and President
Designated officer:  Pro Vice-Chancellor (Corporate Services) and Chief Financial Officer
Approval authority:  Vice-Chancellor and President
Approval date:  29 April 2010 
Last amended date:  19 September 2011
Effective starting date:  30 April 2010
Procedures replaced by these procedures:  Nil
Date of review:  24 April 2015

These procedures are provided to assist in the management of University agreements such as contracts of Memoranda of Agreement (MOUs) and address the following areas:

• Risk management
• Use of standard University agreements
• Legal advice on agreements
• Role and responsibilities of the Agreement Manager
• Authority to sign agreements on behalf the University
• Records management
• Agreement management

1. Risk management

The University considers the integration of risk management throughout all levels of the organisation as fundamental to achieving the University’s strategic goals and operational objectives, as outlined in the University’s Risk Management Framework – Governing Policy. 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 over the life of the agreement should also be undertaken and this is the responsibility of the designated Agreement Manager.

2. Managing risk in University agreements

The following table is provided to assist in managing the risks in executing an agreement on behalf of the University. See also, Appendix One – Agreement Check List. This check list is to be completed, signed and provided to the financial delegate with responsibility to execute the agreement. In addition to this check list, a simple workflow diagram is provided as Appendix Two – Finalising a University Agreement,

Table one: Agreement risk assessment

Risk assessment issue	Action required
1. Has an Agreement Manager been appointed for this Agreement?	Appoint an Agreement Manager
2. Is the agreement necessary in order for the University to receive the benefits?	Consider necessity of agreement if this lessens risk overall
3. Has the capacity of the other party to the agreement to meet its contractual requirements been considered?	Consider other party’s capacity to meet agreement terms and conditions
4. Does the agreement serve a valid purpose such as reduce risks to the University, lock in scope, resources or timeframe of a particular project)?	Consider purpose of agreement
5. Are there conditions in the agreement that the University may not be able to fulfil, or require support or approval from other Cost Centres?	Discuss University’s ability to meet agreement terms and conditions, with all relevant Cost Centre Managers
6. Are there any milestones, standards or timelines relating to implementation and/or monitoring of the agreement?	Agreement Manager to develop a schedule to ensure progress of performance under agreement is completed
7. What commitments will this agreement require of the University and over what time period?	Consider resource implications related to the agreement
8. What due diligence checks have been carried out on the other party or parties to the agreement?	Consider checks that have been completed and if further checks are necessary
9. Is there adequate insurance cover related to the agreement	If unsure, refer to Manager, Finance (Operations, Risk and Procurement)
10. Are there any research implications or is this associated with any research grants?	Seek advise from the Manager, Office of Research - Teaching and Research Services
11. Are there any legal issues that require clarification, in particular granting of indemnities or guarantees?	Follow the directives relating to legal advice which are contained in the Management of contracts and MOUs policy
12. Are there any financial implications that may require further consideration? Are the University’s standard payment terms of 30 days by EFT included?	Seek advice from the Pro Vice-Chancellor (Corporate Services) and Chief Financial Officer
13. Does the agreement contain an Indemnity clause	Discuss deletion of clause with Manager, Finance (Operations, Risk and Procurement)
14. Have all GST implications been considered?	Discuss with Manager, Finance (Operations, Risk and Procurement)
15. Are there any space management considerations or physical risk (eg workplace health and safety) considerations relating to the agreement?	Discuss with Director, Facilities Management
16. Is the agreement related to the leasing of property?	Seek approval of related agreement from Director, Facilities Management
17. Are there any human resource implications?	Discuss with Director, Human Resources
18. Are there any marketing implications (eg. impact on University’s reputation, positive or negative?	Discuss with Director, Marketing and Communications
19. Has compliance with legislation or other relevant University policies and procedures been considered?	Discuss with Cost Centre Manager
20. Has the Agreement been signed by the non-University party?	Ensure agreement is executed by other party in first instance
21. Is this a subcontracting of services that USC is required to deliver under a head contract?	Seek approval from the Cost Centre Manager who has responsibility for the head contract to ensure the head contract is not infringed by any terms within the proposed subcontract
22. Does the agreement contain provisions impacting on the Intellectual Property rights and obligations of USC or USC staff or students (eg copyright, publishing, confidentiality, inventions, innovations, patents, trademarks, designs, plant breeding rights, circuit layouts	Discuss with the USC Intellectual Property Coordinator

Note: If the execution of an agreement is likely to rated as a Moderate, Significant or High risk to the University, a Risk Identification Form should be completed, as provided in the University’s Risk Management Procedures and sent to the Pro Vice-Chancellor (Corporate Services) and Chief Financial Officer for consideration before the agreement is finalised. To assess a risk rating, refer to the University’s Risk Management Procedures.

3. Use of 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 Table Two: Standard University Agreements should be used wherever possible:

Table two: Standard University agreements

Type of agreement	Agreement name/location	Responsible Cost Centre	Advising Cost Cenrtre
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	Teaching and Research Services
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 – Project Management Office	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	Teaching and Research Services
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	see Portal:/Funding Opportunities/ External Research Grants	Faculty or Cost Centre of Chief Investigator	Teaching and Research Services
External Education Grants (eg CASR)	Office of Regional Engagement	Faculty or Cost Centre of Chief Consultant	Office of Regional Engagement
Articulation Agreements	Various locations	Student Administration	Student Administration

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

4. Legal advice on agreements

Legal advice must be sought where so recommended by the advising cost centre having regards 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

The University utilises a panel of preferred suppliers for legal advice on Agreements. Details of the University’s preferred suppliers can be obtained from Financial Services

5. 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

The Agreement Manager is responsible for:

• managing the negotiation process for the agreement;
• ensuring that, in the case of an agreement for the supply of goods or services, the contracted goods and/or services are delivered in accordance with the terms of the agreement;
• ensuring compliance by the University and the other party with the terms and conditions of the agreement;
• assessing the risks related to the project before the contracting for services to determine the extent of monitoring appropriate to the agreement;
• ensuring the contractor has a clear understanding of how the agreement will be managed and monitored;
• recording and filing the agreement in the University’s records management system in accordance with the University’s Records Management policy
• performance monitoring and review of the agreement, in accordance with the terms of the agreement, and in cooperation with the Advising Cost Centre;
• resolving issues or problems that arise during the term of the agreement;
• performance reporting to the Cost Centre Manager

In relation to University Consultancies, External Research Grants and ALTC Grants, the roles and responsibilities of the Agreement Manager, and Teaching and Research Services, are as follows:

(a) Teaching and Research Services is responsible for the establishment of project accounts; invoicing for external funds; formal liaison with the granting body, including any contract variations and reporting; acquittal of project accounts at the conclusion of the project; and disbursement of any remaining funds according to the terms of the cover sheet for the project

(b)  The Agreement Manager is responsible for monitoring project accounts; paying invoices; initiating any contract variations and preparing and providing timely reports

6. 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
  • Commercialisation of Intellectual Property agreements
  • External Research Grants and associated agreements 
• 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
• ALTC grants must be signed by 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

7. Records management

Retaining appropriate records of the negotiation, execution (of documentation outlining the terms and conditions) and ongoing monitoring of University agreements is vital in ensuring that the University is aware of its obligations, can protect its interests including any possible litigation, maintain corporate memory and can meet audit and compliance requirements. 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 University’s Records Management policy

An official file should be created at the commencement of negotiations for any agreement through the Cost Centre Records Liaison Officer and the file reference should be quoted on all documents relating to the agreement

All documentation must be attached to the official University file and managed within the University’s record management system in accordance with Section 4 of the Records Management Procedures

When an agreement is executed, the original is to be forwarded to Records Management Services by the Cost Centre’s Records Liaison Officer for recording and managing in accordance with the University’s Records Management Procedures

University files containing original agreement documents are to be securely stored in accordance with the Records Management Policy

8. Agreement management

8.1 The following University databases should be updated after execution of the agreement where appropriate:

• Contractors and Consultants database for capital works and maintenance related services;
• Research database for research, associated consultancies and commercial services worldwide; and
• Standing Offer (SOA) and Preferred Supplier (PSA) Arrangements registered by Financial Services database of Preferred Supplier arrangements

8.2 Where the above database are not required, such as for general consultancies, a Cost Centre should maintain a database of its agreements to meet business needs, legal requirements and other compliance obligations

8.3 The Agreement Manager should ensure that the contract is monitored for performance, that all University obligations under the agreement are being met and that the agreement is reviewed prior to expiry

8.4 The following details of the agreement must be recorded by the Agreement Manager:

• Official University file reference number;
• Names of the parties involved;
• Agreement Manager name and position;
• A record of any decisions by a USC employee, on behalf of USC, in relation to an Agreement by USC, whether made orally or in writing
• Description of the goods and/or services provided (where applicable) or, in the case of MOUs, a description of the objectives of the agreement and the actions to be undertaken by the University;
• Known or estimated dollar value (where applicable);
• Period of the agreement, including review and extension options (as appropriate);
• Date of commencement (if applicable);
• Specified outcomes/benefits to be achieved for the University (optional);
• Negotiated variations to terms and conditions after signing of original agreement
• Letters of termination or extension

Appendix One: Agreement check list

• Agreement check list (PDF 28KB)

Appendix Two: Finalising a University agreement

• Finalising a University agreement (PDF 22KB)

END

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