Contract Protocol Policy
Policy Number: OGC-3 Effective Date: July 2002
Revisions: January 2002, June 2002, May 2007, June 2011
Responsible Officer: General Counsel
The University enters into contractual agreements each year with third parties that involve a wide array of activities, including goods and services, consulting, maintenance, supplies, performances, facility use, construction, gifts, research, intellectual property and publications, among others. Contractual agreements can take many forms, including emails and letters, as well as more formal documents, such as leases, licenses, memoranda of understanding or letters of intent. This Policy sets forth the protocol that members of the University community must follow before entering into contractual agreements that are intended to be binding upon the University.
This Policy applies to any type of contractual agreement that obligates the University to provide or receive payment, services, goods, gifts or use of University property, facilities or other resources, to or from a third party. For the purpose of this policy, "University" refers to Drexel University, its colleges, schools, affiliates, divisions and subsidiaries except Philadelphia Health & Education Corporation, doing business as Drexel University College of Medicine.
III. APPLICABLE MEMBERS
This Policy applies to all University trustees, officers and employees who have the authority to enter into any type of contract or agreement on behalf of the University (the "Applicable Members"). The scope of an individual’s authority to enter into a contract or agreement on behalf of the University shall be determined in accordance with the University’s signature authority approval process.
Except as specifically outlined below, any contractual agreement binding the University must be reviewed and approved in writing by the Office of the General Counsel ("OGC") prior to execution by University personnel. Contractual agreements requiring OGC review include any and all deeds, leases, letters, correspondence, or memoranda and contracts obligating the University to provide or receive payment, services, goods, gifts or use of University property, facilities or other resources, to or from a third party. Any amendment or revision to an existing contractual agreement must also be reviewed and approved in writing by the OGC unless an exception applies. Additionally, any contracts (1) involving any governmental or quasi-governmental agency official, employee or designee in his/her personal capacity, or any entity owned in whole or in part by such person, or (2) involving partnerships, transactions or arrangements with community organizations that include funding of such organization by the University, or (3) involving a trustee or a family member of a trustee, or an entity owned in whole or in part by a trustee or a family member of a trustee, must be reviewed and approved in writing by the OGC prior to execution by University personnel.
Any contractual agreements or sets of related contractual agreements that involve the University incurring costs of $250,000 or more over the life of the contract(s), as to which such expenditures have not been previously budgeted for, must also be reviewed and approved in writing by the Office of the Senior Vice President, Finance, Treasurer & CFO.
Any contractual agreements that pertain to activities considered unrelated to the University's core mission of research and education may also be subject to taxation. This tax is called Unrelated Business Income Tax (“UBIT”). Such agreements must first be reviewed and approved by the University’s Tax Office. Examples may include contracts where the University derives income from sources such as:
- sales of merchandise or services;
- advertising and marketing;
- renting or leasing of University space or facilities (such as buildings, auditoriums, meeting space, dorms, apartments and other facilities) to outside entities;
- operation of parking lots;
- memberships sold to the general public to University groups or clubs (such as the Recreation Center);
- research agreements where the results are not freely publishable or constitute “fee for service” types of arrangements;
- certain summer sports camps
These are common examples of where UBIT may arise and is not a comprehensive list. When in doubt as to what constitutes UBIT, please consult with the Tax Office. Please see http://www.drexel.edu/depts/compt/tax/ for contact information for the University Tax Office.
The following categories of contractual agreements are excepted from OGC review only (not necessarily Office of the Senior Vice President, Finance, Treasurer & CFO or Tax Office review, as described above):
A. Academic Appointments. Academic appointments are subject to prior review by the Provost’s Office, in consultation with the Department of Human Resources, and therefore do not require OGC review.
B. Employment Agreements. Standard employee offer letters or employment agreements which do not materially deviate from OGC-approved templates or terms.
C. Research Agreements. Research agreements administered by the Office of Research Administration are subject to the contract protocol developed for that office in consultation with the OGC. Research contracts that are not administered through the Office of Research Administration are subject to OGC review unless such contracts do not materially deviate from OGC-approved templates or terms.
D. Purchases of Goods/Services through Procurement. The Office of University Procurement will process procurement requests including orders for goods and services, hotel special event agreements, blanket purchase orders, procurement of office supplies, furniture and fixtures, office and operating equipment, computer hardware, software and computer supplies, and equipment maintenance contracts. University Procurement will notify the OGC about the contracts associated with such requests and the OGC, in consultation with University Procurement, will determine when such contracts require legal or risk management review.
E. OGC Templates. The OGC has developed, and will develop, OGC-approved templates for certain commonly used types of contracts. Applicable Members may use those templates without further review by the OGC, as long as the templates remain materially unchanged (e.g., filling in blanks, where applicable). The most up-to-date commonly used templates are available on the OGC website (http://www.drexel.edu/generalcounsel). Departments may develop standard form contracts or letter agreements for particular types of transactions, matters or vendors for approval by the OGC. The OGC will work with departments to develop such standard approved forms upon request.
Notwithstanding the exceptions outlined above, the OGC reserves the right to review any contract as it deems necessary and appropriate.
V . VIOLATION OF THIS POLICY:
Any violation of this Policy or failure to comply with its provisions may result in disciplinary action.
Inquiries regarding this Policy can be directed to the Office of the General Counsel at 215-895-1433.