Need to Know

  • A contract by any other name is still a contract.

  • Let's start at the beginning. What is a contract? Regardless of what a document is called, if it is intended to create or modify an obligation, right or liability that is legally enforceable, it is a contract. Other commonly used terms that are used on documents (which, although called something else, are most often still contracts) include: agreement, deed, lease, liability waiver, license, material transfer agreement (MTA), memorandum of agreement (MOA), memorandum of understanding (MOU), purchase order (PO), settlement, sales order (SO), subscription, terms and conditions (T&C), term sheet.

    To ensure compliance with applicable laws, regulations, and policies, contracts are reviewed at various levels and may only be executed by authorized officials of the University.

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  • Who's on first? Meet the players involved in contracting at Mizzou.

  • There are a number of offices on campus that are involved with contracting, so it is understandable that you may be confused about where to go for assistance. Here's an overview to help you get started:

    • Advancement (formerly Development)

      Advancement coordinates activities/documents associated with gifts given to the University. Gifts are generally defined as any item of value given by a donor who expects nothing of significant value in return, other than recognition and disposition of the gift in accordance with the donor's wishes.

    • Campus Facilities

      CF's Planning, Design & Construction manages contract processes related to construction projects, including contracts for construction, architectural and engineering services.

    • Division of Finance (formerly Business Services)

      In a nutshell, Division of Finance handles the contracts that are not managed by any of the other contracting offices. These include consulting and professional services agreements, use of facilities (both University use of outside facilities and outside use of University-owned facilities), athletic competition agreements, clinical experience/practicum agreements, leases, performance agreements, purchase or sale of real estate, easements, etc. Division of Finance also provide advice to departments and other contracting offices regarding University policy and best practices in contracts processing and management.

    • Health System Managed Care and System Contracting

      Health System Managed Care and System Contracting coordinates managed care and other revenue generating contract activities for the University of Missouri Health System, as well as clinical experience arrangements for educational programs wishing to place students (other than University of Missouri students) at University of Missouri health care facilities for clinical experiences.

    • Office of Technology Management and Industry Relations

      OTMIR identifies, assesses, protects and markets commercially viable intellectual property (IP) developed at MU and promotes economic development by facilitating the commercialization of IP. They receive invention disclosure forms, and facilitate patent and copyright activities. They also handle non-disclosure/confidentiality agreements (NDA's) and material transfer agreements (MTA's).

    • Sponsored Program Administration (OSPA)

      OSPA handles externally funded research, teaching and service activities. Sponsored Programs involve use of University resources where the sponsor will receive some benefit (which could range from a single technical and financial report through extensive material benefits). Any activity funded from Federal funds (either directly or flow-through) are handled by OSPA. Activities commonly handled by OSPA include grants, subawards (including subcontracts), and academic fee-for-service activities. OSPA also handles consulting, speaker/lecturer agreements, etc. that are funded from grants.

    • UM Supply Chain Services (formerly Procurement)

      UMSC facilitates the acquisition of goods and services readily available in the marketplace. UMSC also manages the non-purchase order contracting process (i.e., consulting agreements, temporary use of facilities- including hotel agreements, etc.) for the University of Missouri Health System. Show-Me Shop (SMS) is the preferred method for buying many items, including scientific products, office products, computers, peripherals, lab supplies, maintenance and custodial supplies and books. Other methods include the procurement card (P-card), for transactions $5,000 or less that are not available through SMS. Purchases that exceed $5,000 not available through SMS are usually processed through PeopleSoft requisitioning system. For transactions >$10,000, bids or proposals are generally required. See http://www.umsystem.edu/ums/rules/ppm for more information regarding purchasing policies.

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  • Why can't I just sign?

  • We know it's tempting. But there is a very good reason why you shouldn't. At the University, ONLY AUTHORIZED OFFICIALS MAY SIGN CONTRACTS. All contracts regardless of dollar value (receivables, zero dollar, or payables) can only be signed by an authorized official. Chapters 70, 80, 85, 90, and 100 of the Collected Rules and Regulations (CRRs) delineate the delegations of authority that have been authorized by the Board of Curators of the University of Missouri to certain officers of the University by position (http://www.umsystem.edu/ums/rules/collected_rules/business). As permitted by the CRRs, those officers have the authority, by written authorization, to delegate all or partial authority to sign specific instruments on behalf of the University. The UM Office of the Vice President for Finance maintains the official record for those additional formal delegations of authority. No one else can sign contracts of any type.

    There are consequences for executing a contract on behalf of the university without authorization. Under the University's defense and protection policies, employees seeking protection must submit a request to the UM President and provide evidence they were acting within the scope of their official duties and in good faith (http://www.umsystem.edu/ums/rules/collected_rules/benefit/ch490/490.010_defense_and_protection_of_employees). Only those employees with written delegations of authority to execute contracts are deemed to be acting within the scope of their official duties. Any others run the serious risk of being held personally liable for any contracts they have signed without authorization.

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  • The life of a contract

  • Okay, so now that you know who some of the players are, now what? Let's review the contract life cycle.

    1. Contract Conception and Creation:

      Each party has specific goals/objectives they want to achieve by forming a relationship that is documented by a contract. From that, the process of actually creating a contract begins.

      1. Use a University Standard Contract Form whenever possible.

        There are a number of activities that are routine and for which standard contract forms have been developed by the University. To expedite the contract creation and review process, departments should use standard contract forms whenever possible. The delegation of authority for standard form contracts is streamlined. Log in to the Contracts Wizard athttp://contract.missouri.edu to see standard form contract currently available for use. If you do not have access please contact your division fiscal officer or MU Finance for assistance. Some of the standard forms are used campus-wide. Some have been developed specifically for a school, college or division to facilitate activities unique to them, but still routine. After creating your standard form contract through the Contracts Wizard web portal, the internal review and approval process is automated. You can pass directly to Step 3 - Contract Execution!

        What do you do if the other party does not want to accept the University's standard contract form? It can be helpful to explain to them that using the University's standard form significantly expedites the contract process. Our standard forms have been drafted to ensure compliance with our obligations as a governmental entity, but we've also tried to be very even-handed and fair. The other party can propose changes or additions to our standard form contracts, but doing so does require additional review/approval steps and lengthens the review and signature process. Any proposed changes should be redlined by the other party to expedite the review and negotiation process.

        If the other party still insists on using their form of agreement, it can, of course, be done if they are willing to negotiate language that is problematic for the University, a governmental entity with contracting parameters proscribed by laws and regulations. All parties just need to be aware that the review and signature process involves more steps and will likely take longer.

      2. Contact the relevant contracting office if a standard contract form is not available.

        Often, we may be aware of a similar project conducted by another school/college/division and can provide sample agreement forms for your consideration. You may also have peers outside the organization who regularly engage in similar activities who would be willing to share sample documents with you; if not, the other party may have its own contract form. Your contracting office will work with you and UM General Counsel's Office to ensure an appropriate form of contract is developed which meets the interests and requirements of all parties to the contract.

    2. Contract Collaboration and Negotiation:

      If you are using a University Standard Contract Form and creating it via the Contracts Wizard web portal , you likely will not ever have to engage in this step in the process. (See 1.a. above for more information.) If you are not able to use a University Standard Contract Form for your activity, there may be additional internal reviews (determined by the subject matter of the contract) which may need to occur before the contract is ready to be signed.

      1. Internal Reviews. Examples of internal reviews include legal, risk management, environmental health and safety, IT, etc. Your contracting office usually coordinates these reviews for you. In addition, some contracts (primarily because of the dollar amount involved) require UM System or formal approval by the Board of Curators of the University of Missouri. Again, the contracting office coordinates this process for you, if applicable. It is best to have internal reviews completed before final negotiations/review with the other party, to minimize the number of rounds and frustration which can result from numerous back and forths.

      2. External Review/Negotiations. There may be one or more round(s) of review and negotiation with the other party(ies) to reach a contract that is mutually agreeable. These are often managed via email, phone or fax. For more complicated or financially significant transactions, face to face meeting(s) may be helpful to build the relationship and ensure the parties reach a mutually agreeable set of terms and conditions. Your contracting office will work with you to determine how best to manage negotiations, if needed, to achieve your desired results.

    3. Contract Execution:

      Once the parties have agreed upon the language and any required internal approvals have been obtained/documented, the contract may be executed.

      1. University Standard Contract Form. If you use the Contracts Wizard web portal to create a University Standard Contract Form, the internal review and signature process is automated. When you hit 'Submit,' your contract will automatically be submitted electronically according to the process established by your College/School/Division (if you have an internal review process), then on to the appropriate contracting office for signature. You will receive an email confirming your document has been submitted. If your contract is grant-funded and PI approval is required, your contract will automatically be submitted to the PI you identified during the create process, then on to the Office of Sponsored Programs Administration for signature. You will receive a separate email which includes a PDF of your contract once the agreement has been electronically signed by the relevant contracting office. Pay attention to that email! It will include further instructions regarding the final important steps in the process of finalizing your contract.

      2. Other Contract Forms. The process is efficient, but not quite as slick as the University's Standard Contract Form review and approval process. Final documents can be submitted either via email, campus mail, or delivered by hand for most contracting offices. The University generally accepts digital or verified electronic signatures. If you are unsure about whether original signature is required or how to submit your contract form for signature, please contact the relevant contracting office. See Who's on First? Meet the Players Involved in Contracting at Mizzou for more information regarding Contracting Offices and

    4. Contract Management.

      Once a contract has been fully-signed, it must be monitored and cared for to make sure the parties actually get what they bargained. It is also important that any subsequent changes in terms/conditions are properly documented. It is ultimately the responsibility of the sponsoring department (yes, that means you) to ensure the parties perform as intended. If not, you should work with the relevant contracting office to ensure the University's best interests are protected and, if and when necessary, the contract is properly terminated and closed out. After all is said and done, it is important to analyze the relationship to make sure we learn from any mistakes and benefit from any opportunities to improve the process/relationship.

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