UNIVERSITY OF DENVER

DISCLAIMER • The University of Denver Office of University Counsel has prepared this training module for general information and use by University of Denver employees only. The pages are not intended to provide legal advice for any particular situation. Legal advice can be provided only in the course of an attorney-client relationship with reference to all the facts of a specific situation. Accordingly, this information must not be relied on as a substitute for obtaining legal advice from a licensed attorney. © 2007 University of Denver

Contract Review Process: Background • Board Approved Policy 2.10.030 regarding Limits of Authority was adopted by the Board of Trustees on October 18, 1993. • Last amended with respect to designating specific individuals with signing authority on April 14, 2007. See http://www.du.edu/bfa/policy/index.html © 2007 University of Denver

Contract Review Process: Background • Policy 2.10.030 requires the review of “contracts” that have (1) performance by University of obligations over a period of one year or more; or (2) University commitments in an amount of $20,000 or more; or (3) possible indemnification or reimbursement by the University or the creation of a University liability (including from a lawsuit) in an amount of $20,000 or more. © 2007 University of Denver

Contract Review Process: Background • Policy 2.10.030 defines “CONTRACTS” as any contract or agreement, whether written or oral, which is intended to create a University obligation. © 2007 University of Denver

Contract Review Process : Background • It is not the name or description given to a document or the specified amount that dictates the University’s requirement for contract review. It is the intention of the document, i.e. to create an obligation for the University that meets the threshold established by the Board of Trustees. © 2007 University of Denver

Contract Review Process : Background • In general, obligations that should be submitted for contract review include, but are not limited to: • Goods and services • Real estate • Employment • Professional and consultant services • Affiliations (i.e. memoranda of understandings) • Amendments of existing contracts • Assumption of risk and releases • Registration forms for events © 2007 University of Denver

Contract Review Process: Limits of Authority • Chancellor (unlimited) • Vice Chancellor for Business and Financial Affairs (unlimited) • Provost (up to $250,000) • Controller (up $250,000, up $1.5 million related to sponsored programs) • Assistant Vice Chancellor for Business and Financial Affairs ( up to $50,000) • Director of Sponsored Programs (up to $500,000 related to Sponsored Programs) • Vice Chancellor for Communications (up to $50,000 for media and publications) • Vice Chancellor for University Technology Services (up to $50,000 for computer related activities) © 2007 University of Denver

Contract Review Process: Limits of Authority • University Counsel (up to $50,000 for engagement letters for legal or litigation services) • Director of Athletics (up $100,000 for contracts for athletic participation) • Vice Chancellor of University Advancement (up $500,000 for IRS form 8283- Non-cash Charitable Contribution Form) • Director of University Events (up to $250,000 for matters involving University events) • Executive Director, Newman Center for Performing Arts (up to $100,000 relating to the Newman Center) • Associate Vice Chancellor of University Advancement (up $500,000 for IRS form 8283- Non-cash Charitable Contribution Form) © 2007 University of Denver

Contract Review Process: Limits of Authority • Deans and Vice Chancellors and one other departmental designee (other than the Budget Officer) up to $50,000. • The Vice Chancellor for Business and Financial Affairs may designate others in writing with the amounts determined annually. • Requests for additional Authority must be made through the Office of University Counsel. © 2007 University of Denver

CONTRACT REVIEW PROCESS • Policy 2.10.030 requires the Controller, or Controller’s Designee (Budget Officers) to review each contract to confirm that (1) funds are available for any payment obligations; and (2) insurance or similar coverage is available for insurable risks, in cooperation with Risk Management. © 2007 University of Denver

CONTRACT REVIEW PROCESS • UNIVERSITY INSURANCE POLICIES AND PROCEDURES • University requires a 3rd Party to have at a minimum general liability coverage of $1 Million per occurrence and $2 Million aggregate and to name the University as an “additional insured.” • Contracts with more inherent risks may require additional insurance coverage, i.e. workers’ compensation, automobile liability, liquor liability. © 2007 University of Denver

CONTRACT REVIEW PROCESS • UNIVERSITY INSURANCE POLICIES AND PROCEDURES • Tenant User Liability Insurance (TULIP), is available for 3rd parties who do not have insurance that are using University facilities. TULIP is event specific and does not provide continuous coverage for the 3rd party. TULIP provides a $1 Million layer of protection to the University for General Liability coverage. © 2007 University of Denver

CONTRACT REVIEW PROCESS • UNIVERSITY INSURANCE POLICIES AND PROCEDURES • The University’s insurance requirements should always be part of the initial negotiation of a contract. For additional information go to www.du.edu/risk © 2007 University of Denver

CONTRACT REVIEW PROCESS • UNIVERSITY INSURANCE POLICIES AND PROCEDURES • Modification and/or waiver of the requirement of insurance may be approved by the appropriate Dean or Vice Chancellor if after discussion with Risk Management and University Counsel it is shown that the activity or project serves the best interest of the University and the risk to the University is otherwise mitigated. © 2007 University of Denver

CONTRACT REVIEW PROCESS • Policy 2.10.030 requires University Counsel, or University Counsel’s Designee (Assistant University Counsel or outside counsel), to review each contract to confirm that (1) the contract accomplishes the intended purposes; and (2) does not present any burdensome or unintended liability risks. © 2007 University of Denver

CONTRACT REVIEW PROCESS • Policy 2.10.030 further requires • Controller and University Counsel to endeavor to conduct reviews on a timely basis and that the University employee initiating the contract, whenever possible, to provide a reasonable period of time for such review. © 2007 University of Denver

Contract Review Process • University Counsel approval is only one step in the University Contract Review Process • Other administrative review and approval may be required by University rules, policies, and procedures, i.e. New Technology Application, Capital Improvements, Sponsored Programs. • It is the responsibility of the Originator to ensure adherence to such rules, policies and procedures. • Not complying with other administrative or departmental reviews will delay review of the contract by University Counsel. www.du.edu/bfa © 2007 University of Denver

3rd Party End End Approved? Contract revisions? Proposes contract revisions? Accepts contract revisions? Paperwork complete? * NOTE: If 3rd party does not provide contract, Originator works with Budget Officer and University Counsel to draft a DU-originated contract for review by the 3rd party. N Signs and returns to Originator at DU Provides DU with contract * N Y Y Revises contract Y Originator Obtains authorized DU signatures Identifies need; discusses feasibility with stakeholders and administrative reviewers Identifies 3rd Party & conducts initial discussion of service (product) to provide or to be provided (creates relationship) Obtains & completes paperwork (including contract routing form) with assistance of Budget Officer Obtains departmental signatures Obtains authorized DU & 3rd party signatures N Sends signed contract to Budget Officer (department or division keeps original) Reviews contract terms. Completes contract routing form checklist and confirms receipt of entire contract. If an addendum, attach copy of original contract. Further review by Budget Officer & Originator If required, (1) obtains competitive bids and/or (2) completes specific reviews mandated by the University’s Board of Trustees BEFORE a contract is initiated with a 3rd party (e.g., new technology application review, capital projects review, etc.) Budget Officer Performs budgetary and insurance review Assists originator with paperwork (including contract routing form), if necessary Sends copy of contract to Purchasing for processing, if necessary, and final copy to University Counsel Office of University Counsel performs legal review (includes review by other experts as needed) Counsel approves contract and signscontract routing form Risk Mitigation (formal reviewers) Stakeholders and administrative reviewers advise originator of feasibility of product, service, program, event, etc. Retains copy for files Y N Y N © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • Originator submits contract to Office of University Counsel for review • Contract logged in and referred to attorney for review (University Counsel, Assistant University Counsel or outside counsel) • Confirmation of receipt of contract for review sent to Originator © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • University Counsel reviews contract • If no changes required, contract approved. • If changes required, University Counsel prepares modification memo or revises contract. © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • University Counsel reviews contracts for form and legal sufficiency, for example • What is the contract term? • Are the deliverables clearly outlined? • When is payment due? • What are the termination provisions? © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • Other considerations: • Does the person signing the contract have authority to sign it? • Does it contain dispute resolution provision? • Does the contract require the University to do something it cannot legally do or is against University policy? © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • University Counsel does not determine the substance of a contract, e.g. • The deliverables. • The amount of fees to be paid. • When services will be performed (the term). © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • University Counsel review ensures that specific contract provisions protecting the University are included in the contract • University Counsel may draft a contract and, if needed, participate in the negotiation of contract terms • Modification Memo and/or contract returned to Originator for changes and approval of changes by 3rd party © 2007 University of Denver

CONTRACT REVIEW PROCESSUniversity Counsel Procedures • Originator is responsible for making or submitting to 3rd party changes to the contract and the return to University Counsel of the revised contract for approval • If all changes are not made, University Counsel returns contract to originator for additional changes • If all changes are made, contract and approved contract routing form forwarded to Originator to obtain authorized signature • Once approved, contract may be sign by authorized signatory © 2007 University of Denver

CONTRACT REVIEW PROCESS • Form contracts that have been previously reviewed and approved by University Counsel do not have to be submitted for review before each execution unless substantive changes have been made. • Please confirm with University Counsel regarding the use and execution of approved form contracts. © 2007 University of Denver

CONTRACT REVIEW PROCESS • Consequences of failure to follow policy: • Contract may be void or voidable • Employee may be subject to disciplinary action and/or personal liability • University subject to audit findings (an area of potential control weakness, policy violation, financial misstatement, or other issue identified during the University’s audit and reported to the Board of Trustees.) © 2007 University of Denver

CONTRACT REVIEW PROCESSFor more information • The Contract Review policies and procedures are located at the Office of University Counsel’s website at: http://www.du.edu/counsel © 2007 University of Denver

UNIVERSITY OF DENVER