Authority to Formulate and Sign Contracts Policy

Purpose

To protect the interests and manage the risks of the University of Dayton in its agreements with third parties, the University has established who may execute contracts on its behalf as well as the appropriate review of such contracts.

Scope

All members of the University of Dayton community and its affiliates, including but not limited to faculty, staff, students, contractors, visiting scholars, visiting researchers, consultants, volunteers and other individuals who work for or visit the University. 

Policy History

I.  Effective Date:  October 17, 1974

II.  Approval:  January 30, 2024

III.  Policy History: 

• Approved in its original form:  October 17, 1974
• Approved as amended:  June 12, 2000
• Approved as amended:  August 18, 2014
• Approved as amended:  September 9, 2021
• Approved as amended:  January 30, 2024

IV.  Maintenance of Policy: Vice President and General Counsel, Office of Legal Affairs

Policy

1.  Consistent with the expenditure levels approved by the Finance & Facilities Committee or Executive Committee of the Board of Trustees and any applicable requirements of the University’s governing documents, the President of the University shall execute contracts between the University and other entities, agencies and individuals to effectuate transactions and may delegate in writing this authority.

2.  The President of the University, prior to signing a contract, proposal, etc., which commits major resources which is sensitive to the Board’s prerogatives or which is significant from a policy viewpoint, shall refer the matter to the Board with the President’s recommendation.

3.  By separate written instrument or by specific mention on a position description, the President may delegate authority to sign contracts, proposals, and related documents on behalf of the University to Executive Officers, including the Provost or Vice Presidents, or any subordinate official consistent with overarching expenditure levels as approved from time to time by the Finance & Facilities Committee, the Executive Committee of the Board of Trustees or the full Board of Trustees.

4.  If an Executive Officer or someone else with delegated signature authority desires that a subordinate official should have the authority to execute certain types of contracts and similar documents, that individual should so recommend to the President, specifying the types of documents and any limitation or, alternatively, follow any steps to effectuate such sub-delegation that are set forth in the contract review guidelines linked as a resource document to this policy.  The further delegation, if approved, does not relieve the Executive Officer, the President, other delegating individual, or even the Board of Trustees of responsibility.

5.  Any official of the University to whom the President or another authorized official has delegated this type of authority, prior to signing a contract, proposal, etc., which commits considerable resources, which is sensitive to the President’s prerogatives or interests, or which may be questionable from a policy viewpoint, will refer the matter to the Office of the President (in consultation with the Office of Legal Affairs, if appropriate).

6.  Each person to whom the authority to sign a contract is delegated must maintain an official document, e.g., a letter from the President, position description or the University’s contract review guidelines (which shall be available from the Office of Legal Affairs and is linked below as a reference document) approved by the President, as evidence that that individual has been delegated such authority.

7.  Contracts binding the University must be reviewed by the Office of Legal Affairs and other units on campus (e.g., Procurement & Payable Services, UDit, the Treasurer’s Office, UDRI-Contracts & Grants [for sponsored research], etc.), depending on the issues and interests implicated in a contract and using designated processes.  Exceptions to the review process shall be specified in the University’s contract review guidelines, available from the Office of Legal Affairs and linked as a reference document indicated below; a high-level summary of the key points of the guidelines, including the basic steps and the types of contracts encompassed, is included in the Appendix to this policy.  University personnel submitting a contract for review are expected to be knowledgeable about the contract and to provide accurate information regarding the contract.  A University signatory authority should not sign a contract without having received requisite documentation or confirmation that the contract has completed the appropriate review steps.  Anyone taking steps to bind the University to a contract without following appropriate review steps may be subject to discipline, as further detailed in paragraph 10 of this policy.

8.  Contracts signed by personnel without proper authority are not binding upon the University, and such personnel may be subject to discipline, as further detailed in paragraph 10 of this policy.

9.  Certain categories of contracts may be reviewed outside the standard contract review process, such as contracts of a particularly sensitive nature (e.g., employment contracts) and contracts that are part of larger overall transactions (e.g., real estate deals, bond issuances, etc.).  Reviews of such contracts should be coordinated with Legal Affairs.

10.  Whether someone will face discipline and the nature of such discipline for a violation of paragraph 7 or paragraph 8 of this policy will depend on the particular facts and circumstances at hand, including but not limited to:

• Whether processes and policies were intentionally ignored or circumvented;
• Whether there exists a pattern (i.e., more than one) of such violation(s);
• Whether the violation indicates in inability to follow processes or otherwise carry out job responsibilities;
• The risk associated with the lack of review or appropriate signatory/oversight;
• The nature of the transaction (e.g., was it procurement-like and arguably not clearly a candidate for formal contract review), etc.

Such conduct or omission may be referred to another policy, e.g., the Staff Corrective Action Policy, the Policy Prohibiting Illegal, Fraudulent, Dishonest, and Unethical Conduct, etc.

11.  Individuals with any degree of responsibility for the University under this policy are expected to act with the University’s mission, integrity, efficiency and good stewardship of resources in mind, as well as respect for other demands on community members’ time.  As such, care should be taken to work with those units on campus (e.g., Procurement & Payable Services, UDit, etc.) that may be best equipped to identify whether similar services or products are already in use on campus.  Additionally, planning a transaction should be conducted in such a way so as allow the appropriate time needed for the proposed transaction to be vetted without unduly burdening or taxing other units.

Reference Documents

1. University of Dayton Code of Regulations
2. Resolution, Board of Trustees, October 17, 1974
3. Minutes, President’s Council, November 2, 1974
4. Guidelines for Contract Review and Signature Authority

Appendix

To assist the University community in understanding the contract review process and requirements, this Appendix addresses the key steps to the review process and also provides examples of what types of contracts must go through the review process.  Additional guidance is available online in the “Guidelines for Contract Review and Signature Authority” listed as a Reference Document to the policy.  Any question should be directed to legalaffairs@udayton.edu.

Basic Steps to Contract Review Process

Since July 1, 2019, the University has used a TeamDynamix workflow for purposes of contract review.  The basic process – including certain “pre” steps – to begin the review of a contract is:

a.  Consult with Procurement* to negotiate price, find the appropriate vendor, etc. Might be iterative with step (b).

b.  Make sure that everyone within your unit is supportive of entering into the contract. That is, the unit’s leadership should approve that it is a good business decision before you start the TeamDynamix workflow. 

c.  Once you’ve decided on the vendor and have a draft contract, read it to make sure it reflects what you understand the business deal to be.

d.  Know who your authorized signer/signatory will be.

e.  Go to go.udayton.edu/contractreview to upload your contract so that it can begin the workflow journey. There is a 250MB limit.

f.  The workflow will begin and will notify appropriate individuals across campus.

g.  Meanwhile, and offline, a Legal Affairs attorney will review the terms and conditions of the contract and recommend changes, if appropriate. You will be the one to reach out to the other party, as needed, to reach agreement on the language of the contract. 

h.  Once the workflow is complete and once contract language has been finalized, the UD attorney will create an “execution version” of the contract.  Take proof of the workflow’s completion plus the final execution version of the contract to the authorized signatory, for execution. 

i.  Obtain the other party’s signature too.

j.  Upload a copy of the fully executed contract into TeamDynamix under your ticket number.  (As an alternative to uploading the contract directly to the ticket, the executed contract can be added to the ticket by attaching it to an email in reply to the TDX approving/resolving the contract for signature.)

* Such consultation might not be necessary for securing a known expert/consultant in a field, unique speaker, etc.  However, in such situations, Procurement can still lend expertise in negotiating price.

Guidance Regarding Contracts That Must Go Through the Review Process

Contracts that must go through the review process are contracts that are beyond a “mere procurement” agreement (which simply require payment for a good or service with no additional terms).  Some examples are:

Contracts Requiring Review

• Contracts with terms and conditions binding the University to obligations beyond mere payment.
• An expenditure contract + exclusivity (that is, only use X for this type of service or product).
• An expenditure contract + cloud storage of UD information.
• An expenditure contract + accessibility through our web.
• An expenditure contract + foreign entity is the other party.
• An expenditure contract + access to our systems / facilities.
• An expenditure contract + ability to advertise on UD space or sell their products on UD space.
• An expenditure contract that is in the form of a lease for an "asset" (i.e., an individual item is worth ≥ $5000).
• Software contracts (and extensions) that have any element of UD system access or data storage should almost always go through the contract review workflow.

Mere Expenditures (No Review Required)

• An expenditure where only obligation on UD is to pay for the item.
• Hotel stay at a known hotel franchise.
• Booking of event space (unless in Europe, and unless one of the add-ons in the Contract Review list applies).
• Database access (unless database in turn receives UD information or requires access to UD systems).  As an example, a subscription to a magazine's website to be able to look up consumer ratings on various items and services.

Renewals

Renewals of existing agreements that have been reviewed through the workflow relatively recently, and are relatively short-term and low cost, may not need to go through the workflow again; please consult with Legal Affairs to determine whether review is appropriate.  However, in most cases a renewal should go through the workflow, particularly if:

• It adds new terms.
• It was not reviewed at the time of the original contract.
• Significant time has passed since the original contract was entered.
• The other party is not a U.S. entity or the contract covers services or events not in the U.S.
• The cost of the renewal reflects a five percent (5%) or more increase from the prior term.
• The cost associated with the renewal term is $25,000 or more.
• The renewal term is for a term of three (3) years or greater.

Contracts That Require Review Outside of the Workflow

• Employment contracts should not be submitted to the contract review workflow because of the sensitive information they contain (e.g., salary information).  Because salary information can often be gleaned from search firm contracts (i.e., because they contain a formula tied to anticipated salary), search firm contracts similarly should not go through the workflow.
• Contracts that are part of larger, complex transactions need not go through the workflow, so long as counsel is engaged in the overall transaction.