Contracts are a binding business agreement between two or more
parties for the supply of goods or services at an agreed upon price.
Leases are agreements by which one party conveys equipment, facilities,
or real estate for a specified term and cost to another party.
To ensure timely and appropriate formulation and internal review of
contracts and leases entered into by Seton Hall University. To
maintain proper business practices, inventory control, cost
containment, and accounting treatment through the effective adherence
to this policy.
Overview - Review and Approval Process
Contracts and leases will generally involve either the University’s obtaining or supplying of goods or services. Depending on the planned arrangements, contracts or leases may have been preceded by a Request for Proposal (RFP) and both may require review and revision by Business Affairs, Procurement, Compliance and General Counsel. Contracts or leases for goods or services totaling over $500,000 must be approved by the University’s Board of Regents. Standard contracts (as defined below) for practicums, affiliations, honorariums, internships and other academic functions that have an expenditure of $10,000 or less may be approved and signed by the Provost. Standard contacts for speakers, performers, entertainers and other special services related to student development activities that have an expenditure of $10,000 or less may be approved and signed by the Vice President for Student Affairs. The Director of Business Affairs, from time to time, may determine that it is appropriate to have a standard contract reviewed more closely and signed as a non-standard contract. Only the President, the Executive Vice President for Administration and the Vice President for Finance and Technology shall have authority to sign: a) non-standard contracts or lease agreements and b) standard agreements with expenditures in excess of $10,000. Contracts and leases shall not be entered into by any other employee on behalf of Seton Hall University and no agreement consummated outside these guidelines herein shall be recognized by the University. Appropriate time frames need to be incorporated into planning processes leading up to contract or lease signing, as discussed herein.
Agreements and Contracts
In addition to contracts or leases involving the purchase or supply or
goods or services, other examples may involve the maintenance of
capital equipment or affiliation with another organization.
Contracts or leases can also involve, but are not limited to, the
following: licensing arrangements; property leases; research,
articulation or exchange agreements involving transfer of credits;
contracts involving special services such as immunization clinics;
event-related arrangements or agreements with speakers being brought to
the University; commitments involving entertainers including
individuals, groups of performers and/or musicians, or theater groups;
and agreements involving consultants or other “independent
In general, all types of contracts or leases mentioned above will
hereby be classified into two (2) main types:
- Standard -
those entered into by Seton Hall University that will contain standard
terms and conditions as developed by the university and previously
approved by Legal Counsel, Compliance Office and Business Affairs.
- Non-standard - those
entered into that do not contain standard terms and conditions as
developed by Seton Hall University. These are typically
agreements where the vendor selected presents their own terms and/or
agreement to the university for review and approval.
When formulation of a contract or lease is preceded by a Request for
Proposal (RFP), a formal bidding process will take place. The
need for bidding will be determined by the level of financial
commitment in question, and on the outcome of discussions between the
requesting department and the Procurement Department. If an RFP
is contemplated in connection with a business arrangement that will
result in a contract, discussions with Procurement and initial
formulation of the RFP needs to begin at least three (3) months prior
to the planned effective date of the contract, so as to ensure
appropriate time frames for review by the Board of Regents (if
required), Procurement, General Counsel and Business Affairs.
Bid policy for the university is as follows:
All acquisitions of goods or services (with or without a contract or
lease involved) that total over $10,000 must be transacted with at
least two (2) bids being obtained. It is recommended, however,
that for orders over $25,000 that a total of between three (3) to five
(5) bids be obtained, but two (2) shall be the minimum. Bidding
can be waived if the item or service being provided is being provided
by a university preferred vendor (i.e. a vendor listed on the
Procurement Department's preferred vendor list) or if the vendor is a
sole provider of the good or service in question. Additionally,
bids involving contracts or leases that total over $250,000 must be
approved by the President of the University and bids involving
contracts or leases that total over $500,000 must be approved by the
Board of Regents.
The type(s) and levels of insurance coverage required for a given
contract or lease will be determined based on discussion between the
requesting department and Business Affairs. The Compliance
Officer is also available for technical assistance, in determining
appropriate terms of insurance and indemnification.
The University intends to transfer certain risk associated with its
ownership of property, activities, repair and construction projects.
Most non-insurance transfers are accomplished through provisions in
contracts designed specifically for risk control transfer. The contract
can contain indemnity and hold harmless agreements that can protect the
The indemnification provision of a contract or lease outlines the
management and transfer of risk, by establishing the circumstances in
which parties to the contract will hold each other harmless in the
event of a claim or suit that results from the activities or
transactions specified in the contract. Typically each party to
the contract or lease agrees to hold the other party harmless if it is
determined that the issue that triggered the claim or suit was the
result of the sole negligence of one or another signatory to the
contract. The wording of an indemnification provision will be
determined through discussion between the requesting department and
Business Affairs, and, in turn, with the Compliance Office and General
Each department head is responsible for the proper wording of the
contract and its ramifications.
Steps to be Taken Prior to Contract or Lease Signing
- The first step in initiating a contract or lease is to determine if
bids are required. To make that determination, review the bid
policy terms mentioned above or contact the Procurement Department for
assistance. If a lease is requested, the department and
Procurement must additionally work with the Controller to determine if
a lease or purchase is the better financial option for the university
to entertain. After conducting the bid process (if necessary), a vendor
is selected and contracted for product/services using either a
non-standard university agreement or a standard university agreement.
- If If a contract to be entered into is a standard university contract, the agreement should be forwarded to the Office of Business Affairs for review and approval. Any and all “standard contracts” or leases must be completed and attached to a Contract Review Routing Folder (see Attachment B). Since the agreement is of standard format and has been previously approved by General Counsel, a Contract Review Checklist is not necessary. All standard contracts should be signed by the contracting parties prior to final approval and signature by the Provost, Vice President for Student Affairs or other authorized University division head. The Director of Business Affairs, from time to time, may determine that it is appropriate to have a standard agreement reviewed more closely and signed as a non-standard agreement. If the standard agreement provides for expenditures that exceed $10,000, then the Business Affairs Office will direct the agreement to the President, the Executive Vice President for Administration or the Vice President for Finance and Technology for approval and signature.
- If a non-standard
university agreement is entered into, a discussion concerning
the intended business arrangement should take place with the Office of
Business Affairs. That office will assist relative to contract
language/format, and clarify, if required, the contract review
process. Any and all proposed
“non-standard contracts” or leases must be forwarded with a completed
Contract Review Checklist (see Attachment A), attached to a Contract
Review Routing Folder (see Attachment B) and sent to the Director of
Business Affairs. The Checklist assists contract
originator in ensuring that all relevant and necessary contract
provisions have been incorporated into the draft document. The
Director of Business Affairs will forward all non-standard contracts or
leases to the university's Office of General Counsel for review.
A concurrent financial review will be carried out by Procurement and
the University Controller if necessary. If the contract or lease
is for goods or services over $500,000, it must additionally be
approved by the university's Board of Regents.
Upon completion of review, the General
Counsel will forward the non-standard contract to the Office of the
Vice President for Finance and Technology for signature. Only the
President, the Executive Vice President for Administration or the Vice
President for Finance and Technology are authorized to enter into and
sign non-standard contracts or leases for goods or services.
4. Original signed contracts or leases
and pertaining documents are to be kept on file in Business
Affairs. Copies of all signed contracts or leases are to be
forwarded to the Office of General Counsel and the University
Frames for Steps Pertaining to the Review Process
Planning for a contract or lease requires adherence to the following
If it is planned that a Request for Proposal will precede the review
process, it should be anticipated that a period of lead time of at
least three (3) months prior to the expected contract or lease start
date would be appropriate to begin bidding, but contact the Procurement
Department for assistance and advice.
The review process for a standard university contract or
lease in which standard contract language (as currently approved
by the Office of General Counsel) is used does not require Legal,
Business Affairs or Compliance review but should commence at least two
(2) weeks prior to the anticipated effective date of the contract.
The review process for a non-standard university contract or
lease for a new agreement that does require Legal Counsel,
Business Affairs or Compliance review needs to commence at least one
(1) month prior to the anticipated effective date of the contract.
Amended and Approved
Board of Regents
November 25, 2008
November 25, 2008
September 1, 2005