FAQs
My department is considering providing services to an outside party for compensation. I know that if it were a sponsored project, I would go through Sponsored Projects Administration. However, these services do not involve sponsored research, and they appear to constitute an external sale. Where should I go for help?
Refer to the External Sales Policy on the Web. In addition, you may contact the Office of External Sales at 612-625-2415. Standard contracts on the Web include Departmental Services Agreement, Technical Testing Agreement, Agreement for Lease of Equipment, Agreement for Sale of Equipment, and Consulting Agreement. These form agreements are user-friendly and are preapproved by the Office of the General Counsel if used without changes. Even if these contracts are used, you should still consult with the External Sales Office to ensure appropriate coverage of risk management, tax, and related issues.
My department is interested in purchasing services and/or goods. How should this be handled?
See the Contracts section of the OGC Website. If the price of the purchase is $50,000 or more, you must consult the Purchasing Services Department. The best way to purchase goods or services is to use the University's standard PO. That will avoid a lengthy period of negotiation. Vendors often ask us to sign their standard contract, or to change our standard form. If the price is greater than $10,000, the OGC must review the Vendor's form or changes to our form. If the price is under $10,000, and the Vendor insists on using its form or amending the University's form you must use the Addendum for Small Purchases which the OGC will send to you. Note that, depending on the dollar amount of the purchase, different levels of authority must approve the purchase. Included within Purchasing's policies are guidelines to help ensure that the University is paying a reasonable price, etc. In addition, Purchasing often enters into University-wide contracts with vendors for all campus purchases of equipment and/or services, in which case your department may not need a new contract. Finally, in certain cases Purchasing's policies encourage or require the use of a Request for Proposals before a purchase contract can be finalized. Also, be sure the final contract is signed by a person who has been expressly delegated authority to sign it. See the Delegations Library.
My department has issued the standard University Purchase Order for the purchase of certain goods, but the vendor has countered with its own form with different terms and conditions. What should I do?
Do not accept the conflicting terms and conditions of the vendor. If the vendor will not accept the terms and conditions of the University's Purchase Order, and the price is greater than $10,000, the OGC must review the Vendor's changes to our form. If the price is under $10,000, and the Vendor insists on amending the University's form you must use the Addendum for Small Purchases which the OGC will send to you.
How do I know who is authorized to sign contracts on behalf of the University?
The answer depends on the type of contract involved as well as the dollar amount of the transaction. The Regents' Reservation and Delegation of Authority (PDF) policy adopted in April 2001 establishes authorizations. The President's Delegations Library provides information on who is authorized to sign contracts.
Our department has certain equipment that it no longer needs. Can we sell it, and if so, how?
The University has a "For-Sale" policy that covers these types of transactions in the Selling Used Equipment section of the Purchasing Services Web page. Note that the procedures to be followed depend upon the fair market value of the used equipment.
What factors should I consider before entering into a contract?
The most important factor for you to consider is what are the "business" needs you have for the transaction? Consider both price and overall cost (not necessarily the same things), warranty scope and duration, specifications for the goods or services, etc. Contracts are written in the English language. You can read them and, except for legal terms of art, understand them. If you cannot, it's the contract drafter's fault, not yours. Contracts entered into using University standard contracts may require prior approval from University offices other than the General Counsel. These include Risk Management, Tax (particularly with respect to external sales), Animal Care and Usage Committee, Committee on Research Involving Human Subjects, and Patents and Technology Marketing. If you are using a standard University of Minnesota contract form, OGC review is not required. If you are not using a standard University of Minnesota contract form, please see the Contracts section of the OGC website.
If you have any question about whether you are using the proper form or should obtain any other approvals before contracting, call OGC at 612-624-4100.
My department wants to hire a consultant. In addition to price, what terms should we consider?
Consultants should be hired using the University's standard Contract for Professional Services. The most important provisions in a consulting agreement are price, scope and definition of services to be provided, ownership of intellectual property, and termination. It is imperative that the consultant and the department have the same clear, unambiguous understanding of the consultant's work. Likewise, the consultant and the department should agree upon the circumstances that would permit either party to terminate the agreement early and what happens upon termination. For example, how much should the consultant be paid if the agreement is terminated? Who owns the consultant's work product? Does the consultant warrant the quality of the completed work? Asking and answering these questions before the consultant is hired and begins working is much better from the University's and the consultant's perspectives, than afterward, when the department and the consultant may be unhappy with each other and the project.