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Contracts for Goods or Services

I. Scope

 

Long Island University engages in various transactions for goods and services throughout the calendar year. In addition to contracts for goods or services, University agreements include academic and clinical affiliations with third party organizations; the purchase, sale or lease of real property; University license or facility use arrangements; research commitments; articulation or exchange agreements involving the transfer of credits; special services such as immunization clinics or sports camps; entertainment, theatrical or speaking engagements; student events, consultancy and independent contractor contracts, and so forth.

All University contracts for goods or services with total anticipated costs greater than $25,000 per year must be reviewed and approved by the Vice President for Legal Services and the Vice President for Finance, and may be signed only by the Vice President for Finance or the University President.

University contracts for goods or services between $5,000 and $25,000 must be reviewed by the Vice President for Legal Services but may be signed by the operational area's Vice President or Provost.

II. Contract Review

 

Contracts in any of the following categories MUST be reviewed by the Office of University Counsel before signature:

  • for goods or services (including 'maintenance' agreements) in excess of $5,000 per year;
  • total anticipated payments in excess of $25,000 over the term of the contract;
  • for any use of University facilities or property (including media access);
  • for the use of University intellectual property (trademarks, logos, copyrighted material);
  • when the University must provide indemnification or insurance to an outside party;
  • when members of the University community are engaging in high-risk activities, or may be exposed to high risk situations (e.g. overseas travel, reality TV, construction);
  • the lease, purchase or sale of real estate;
  • the University provides off-campus educational programs;
  • construction projects in excess of $25,000 per year;
  • software and information technology contracts, or
  • consultant services.

Contracts in the following categories may be signed without review by University Counsel:

  • Construction contracts in which the University agrees to pay less than $25,000 over the term of the contract (unless the contract falls into one of the other categories set forth above);
  • Appointment letters issued by Human Resources or a University Officer pursuant to approval processes already in place;
  • Grant proposals monitored by the Office of Sponsored Research;
  • Contracts in a format developed by the University, approved by Counsel's Office within the last 3 years, which have not been materially modified.

III. University Purchasing Policy

 

The University's competitive bidding threshold is $25,000 for construction projects and $5,000 for all other purchases. Above those levels, before the University may contract for any goods or service, competitive pricing achieved by obtaining at least three written bids or quotes from competing vendors is required.

Competition insures a mix of quality, service and price that will best match the University's needs. The University's Purchasing Department coordinates the bid preparation and vendor selection process. All purchases of goods or services greater than $50,000 require a formal competitive bidding process facilitated by the Purchasing Department. This process includes preparation of a formal bid request- typically a Request for Information (RFI), Request for Proposal (RFP) or Request for Quotes (RFQ), as described below.

A. Determination of Need

The Purchasing Department has developed a list of preferred suppliers who are committed to providing the University with specified goods and services at discounted rates. Before creating a Request for Information, Proposal or for Quotes, contact Purchasing to determine if departmental needs can be met by a University supplier, an existing contract or by using internal University resources (print shop, food services, marketing).

For all other purchases, if the dollar value of the purchase exceeds the University's competitive bidding thresholds, the initiating department, working with Purchasing, must obtain at least three competitive bids or quotes in writing. The formality of the bidding process is determined by the level of financial commitment and discussions between the department and Purchasing. When an RFP or RFQ is contemplated, formulation of the bid solicitation request should begin at least three (3) months before the product or service's estimated delivery or start date.

Regardless of the acquisition method used, documentation, authorization, compliance with University procedures and conflict of interest integrity is the responsibility of the initiating department, as is responsibility for verifying the actual receipt of goods or services, in the quantity, quality or manner ordered.

B. Preparation of the Bid Request

As a general matter, RFPs are used when departmental needs can be met in several ways, the ultimate product is uncertain, or the scope of work could change. An RFP allows competing vendors to price and describe proposed methodologies or processes for meeting the department's stated need. Most service purchases should use an RFP to request competitive bids. An RFQ should be used when a purchase has clearly defined parameters and the scope of work is unlikely to change. RFQs provide clear specifications for the desired good or service, thus are most appropriate when the item sought is standardized and supplier products are very similar.

With Purchasing's assistance, the following baseline bid request data should be developed:

  • A clear and accurate description, including specifications, of the requested product or service, as a whole or broken out by components
  • Professional skills and qualifications
  • Deliverables, timetables, schedules
  • Technical or business requirements
  • Software or hardware functionality
  • Warranty / fitness for use expectations
  • Anticipated associated service (installation, maintenance, training, upgrades, handling fees)
  • Payment terms

If the lease of property is being considered, the department and Purchasing must work with the Finance Office to determine if a lease or purchase is the better financial option for the University to entertain.

C. Vendor Selection

Federal regulations and best business practices require that awards be made to vendors whose responses to solicitations are the most advantageous to the University, based on quality, price and other relevant factors. Accordingly, an analysis of the cost of goods or services sought must be performed by the requesting department and documented as part of the vendor selection record. Any personal interest or relationship between a vendor and any LIU employee involved in the acquisition process must be disclosed.

Every effort should be made to utilize suppliers who can certify that they meet federal and state standards for small, disadvantaged, minority and/or women-owned vendors.

Bids and quotes submitted to the University are to be held in strictest confidence. Under no circumstances should vendors be given information about bids or quotes from competing sources.

D. University Contracts

To expedite the procurement process, the University has developed a series of contracts for use when the goods or services in question require total payments in excess of $5,000, or $25,000 for construction work. Form A is for professional or consultancy services of any kind; Form B is for computer software and information technology services. Form C is the University's standard contract for construction projects. Other useful forms are located in the Purchasing Department database.

Some situations will require modification of a University form or approval from the operational area's University Officer or Director. For example, the Vice President for Academic Affairs authorizes academic affiliations and off-campus course offerings; if a financial account is needed to receive or distribute funds, the Vice President for Finance also must approve. The Office of Sponsored Research approves agreements funded by public or private grants that require substantive work by investigators at LIU or elsewhere. Campus Facilities manage architectural, general contracting, engineering and other services for construction, renovation, maintenance and alteration projects for the University.

In other situations, a University contract may not suffice. Whenever a vendor or third party proposes a new agreement or lease, it must be reviewed by Counsel's Office to ensure that that all necessary provisions are included, and that risk is not inappropriately transferred to LIU. The review process for contracts requiring review by Counsel's Office, the Finance Office or Risk Management should be started at least one (1) month before the anticipated effective date.

The types and level of insurance coverage required by the University's contracts and indemnification riders have been determined by the University's Risk Manager, Counsel and the Vice President for Finance, but may be modified to fit the circumstances of a particular engagement. Indemnification provisions establish the circumstances in which parties to the contract will hold each other harmless, should a claim or suit arise out of the transaction, activity or services specified in the contract.

All agreements – whether a University contract or not – must be signed by an authorized representative of the vendor, certificates of insurance produced and the agreement reviewed and formally approved by the appropriate University officials BEFORE any work, the delivery of goods or services, or the usage of any University facilities may commence.

IV. The Contract Review Process

 

Any and all proposed contracts or leases must be forwarded to the Office of University Counsel with a completed Contract Approval Page (CAP) form. The CAP checklist helps ensure that all relevant provisions are incorporated into the draft contract, and that this document has been reviewed carefully by the department or unit wishing to acquire the goods or services in issue.

Contracts received for review are logged in and tracked on a spreadsheet in the Office of University Counsel. Contracts received without a completed contract CAP form checklist or valid certificate of insurance will be returned without review.

On approval, contracts valued at $25,000 or less may be counter-signed by the operational area Vice President or Provost. Only the Vice President for Finance and the Vice President for Legal Services are authorized to sign University contracts or leases for goods or services valued at $25,000 or more. Agreements involving the expenditure or receipt of more than $250,000 may only be signed by the President.

Up to $25,000 Area Vice President or Provost
$25,001 to $250,000 Vice President for Finance*
$250,001 and above President

*In the event of absence or unavailability, University Counsel may sign.

Fully executed contracts and leases are kept on file in the University Finance Office.