Contract Management Handbook

The University of Texas at El Paso
CONTRACT
MANAGEMENT
HANDBOOK
The University of Texas at El Paso Page 1 Contract Management Handbook

TABLE OF CONTENTS
Chapter 1 Introduction .......................................................................................................... 4

1.1 Purpose
1.2 Definitions
1.3 Acronyms
1.4 Training for Purchasing Personnel and Contract Managers
1.5 Ethics Standards and Policies
1.6 Conflict of Interest
1.7 Ethics Requirements from Senate Bill 20 (2015)
1.8 Disclosure of Interested Parties
Chapter 2 Planning .............................................................................................................. 22

2.1 Contract Management Team
2.2 Determining Competitive Procurement Method
2.3 Planning for Contract Content
2.4 Information Security; Access to Electronic and Information Resources
2.5 Record Retention
Chapter 3 Preparing the Solicitation .................................................................................... 47

3.1 Historically Underutilized Business (HUB) Requirements
3.2 Contract Term
3.3 Background Information
3.4 Proposal Submission Requirements
3.5 Evaluation of Proposals
3.6 Solicitation Requirements
3.7 Payment Types
Chapter 4 Publication of the Solicitation .............................................................................. 65

4.1 Advertising
4.2 Solicitation Announcements
4.3 Communication with Respondents
4.4 Written Questions
4.5 Pre-Proposal Conferences
4.6 Solicitation Submission and Opening
Chapter 5 Evaluation and Award ......................................................................................... 72

5.1 Evaluation Team
5.2 Scoring Matrix
5.3 Responsive Proposals
5.4 Evaluation Team(s) Training
5.5 Single Responses
5.6 Proposal Evaluation
5.7 References
5.8 Oral Presentations/Discussions
5.9 Best and Final Offers
5.10 Negotiations
5.11 Award
Chapter 6 Contract Formation ............................................................................................. 86

6.1 Approach to Contract Formation
6.2 Legal Elements of a Contract
6.3 Drafting the Contract
6.4 Planning for Contract Preparation
6.5 Form of the Contract
6.6 Contract Terms
6.7 State Contracting Standards/Oversight

6.8 Authority to Sign Contracts
6.9 Required Check of Vendor Hold Status
6.10 Execution of Institution Contracts
Chapter 7 Contract Administration..................................................................................... 102

7.1 Planning
7.2 Performance Monitoring
7.3 Contract Reporting Obligations
7.4 Invoices and Payments
7.5 Change Management Process
7.6 Dispute Resolution Process
7.7 Termination
7.8 Contract Close-Out
Version History ................................................................................................................ 129
APPENDICES
APPENDIX 1 Contract Management Best Practices Matrix
APPENDIX 2 Summary of 2015 Procurement and Contracting Legislation
APPENDIX 3 Sample Executive Approval Memo
APPENDIX 4 Summary of UT Procurement Guidelines
APPENDIX 5 Exclusive Acquisition Justification Form
APPENDIX 6 Sample Non-Disclosure Statement
APPENDIX 7 Sample Pre-Proposal Conference Guidelines
APPENDIX 8 Sample Proposal Score Sheet
APPENDIX 9 Sample Administrative Review Checklist
APPENDIX 10 Evaluation Team Guidelines and Purchasing Office Responsibilities
APPENDIX 11 Sample Reference Check Form
APPENDIX 12 Sample Best Value Award Justification
APPENDIX 13 Sample Contract Terms
APPENDIX 14 Sample Contract Monitoring Worksheet
APPENDIX 15 Sample Contract Close-Out Checklist

CHAPTER 1
INTRODUCTION
1.1 Purpose
The purpose of this Contract Management Handbook (Handbook) is to offer contract
managers, purchasing personnel and other administrators at University of Texas
institutions recommendations on documenting existing contract management processes
and practices in connection with the procurement of goods/services.
This Handbook does not govern real estate transaction contracts (even if the transaction is
a lease under which an Institution provides services in exchange for compensation),
sponsorship agreements under which Institutions receive compensation is exchange for
recognition of the sponsor, sponsored research contracts or other intellectual property
agreements where Institutions convey an interest in intellectual property. Construction
contracts are governed by separate statutory requirements and are also not addressed in
this Handbook. However, this Handbook may provide helpful information useful in
connection with contracts that are not governed by the Handbook.
Use of this Handbook does not relieve Institutions and contractors of their responsibility to
comply with Applicable Laws and University Rules related to specific programs and
funding sources.
For purposes of this Handbook, contract management includes the coordination and
administration of four core processes:
 Planning;
 Procurement of goods or services (including complying with HUB laws and policies);
 Contract Formation (including scope of work, specification of contract price or rate
and other relevant terms and conditions); and
 Contract Administration.
The nature and level of risk associated with each of these contract management elements
vary depending on the type of contract and the business relationship between the
Institution and contractor. It is the responsibility of the chief business officer of each
Institution to assign responsibilities, assure appropriate training and oversight, and monitor
the processes so that each procurement achieves best value for the Institution.
Fully implemented contract management requires coordinating and administering the

four core processes.
The contract manager or lead for the contract management team assigned to any
particular contract is responsible for assuring that all necessary and appropriate
disciplines are engaged and their work with respect to the contract coordinated to assure
compliance with this Handbook, including meeting legal contract requirements. Various
types of contracts are subject to different statutory standards, practices, processes, and
strategies for successful implementation. The suggestions, comments, techniques,
examples and recommendations included in this Handbook are not appropriate for every
type of contract.
This Handbook:
 Summarizes certain mandatory statutory, regulatory and policy compliance

requirements related to Institution contracting activities that are evidenced by

Handbook references to the applicable statute, regulation, or policy.
 Provides practical suggestions and best practices related to Institution contracting

activities which are encouraged but not mandatory. Taking into consideration the
complexity of the contract on which the Institution is working, Institutions should
exercise reasonable business judgment when applying practical suggestions and
best practices. Recognizing that the needs of each Institution and the requirements
of each contract are different, the information in this Handbook is intended to be
applied flexibly, not mechanically. This Handbook provides a framework for making
contracting decisions that are in the best interest of the Institution.
 Provides a Contract Management Best Practices Matrix attached as APPENDIX 1

that includes a summary of best practices designed to help Institutions determine
where a contract management program currently stands in relation to generally
accepted contract management best practices. This matrix offers a number of best
practices in several key contract management areas and may be used to improve
practices and to implement the best contract management program possible. The
matrix is intended to assist Institutions with organizing contract management
programs and leveraging technology, metrics, training and lessons learned for the
purpose of minimizing risks throughout the overall supply chain. The matrix also
includes a reference section that points to the applicable Chapters of this Handbook
related to each contract management component.
 Describes the duties of t h e contract management team, including how to solicit and
select a contractor, develop and negotiate a contract, and monitor contractor and
subcontractor performance.
 Supplements (but does not replace) Applicable Laws and University Rules. Each
Institution is independently responsible for developing sound business policies and
procedures in accordance with Applicable Laws and University Rules.
 Discusses many general legal principles; however, these general principles include
many exceptions. This Handbook is not intended to be a manual on the law of
contracts or constitute legal advice. Contract managers should consult with the
Institution’s legal office with regard to any legal questions that arise with respect to
contracts.
 Includes model contract provisions and indicates whether each provision is essential
or recommended.
 Addresses the permitted extent of contract changes that may be made before a new
competitive solicitation may be needed.
 Suggests time frames for the solicitation, evaluation, negotiation and awarding of a
major contract.
 Establishes the procedure for attempting to determine why a single response was
received in reply to a procurement solicitation.
This Handbook does not constitute specific legal advice on any particular issue that may
arise. Feel free to consult with appropriate legal advisors as necessary.
Where can I go for more information?
APPENDIX 1 – Contract Management Best Practices Matrix

1.2 Definitions
Addendum: An addition, change, or supplement to a solicitation issued prior to the
opening date.
Advertise: A public announcement of the intention to purchase goods/services.
Amend or Amended: Status change to an RFP, ITB, RFI, RFQ or contract that indicates
a modification to that document.
Amendment: Written addition or change to a contract, including modifications, renewals

and extensions.
Applicable Laws: All applicable federal, state or local, laws, statutes, regulations,
ordinances and orders.
Assignment: Transfer of contractual rights from one party to another party.
Best Value: Factors to be considered in determining best value in making certain

purchases of goods/services (ref. Texas Education Code, §§51.9335).
Best Value Invitation to Bid (ITB): Procurement process used when the requirements
are clearly defined, negotiations are not necessary and price is the primary determining
factor for selection (also known as best value Invitation to Bid or ITB). The mandatory
evaluation criteria that must be used to evaluate bids are specified by the Best Value
Statutes.
Best Value Statutes: The laws that authorize Institutions to use the specified best value
procurement procedures for goods/services, but not professional services. (ref. Texas
Education Code, §§ 51.9335).
Bid: An offer to contract with the state, submitted in response to an ITB.
Bidder: An individual or entity that submits a bid. The term includes anyone acting on
behalf of the individual or other entity that submits a bid, such as agents, employees and
representatives (see Proposer and Respondent).
Biennium: The two (2) year period in which the Texas Legislature appropriates funds.
The biennium begins on September 1st of odd numbered years.
Board of Regents: The Board of Regents of The University of Texas System.
Bond: Note or other form of evidence of obligation issued in temporary or definitive form,
including a note issued in anticipation of the issuance of a bond and renewal note.
Business Entity: An entity (other than a governmental entity or state agency) through
which business is conducted with an Institution, regardless of whether the entity is a for-
profit or nonprofit entity.
Certificate of Filing: The disclosure acknowledgement issued by the Texas Ethics

Commission to the filing Business Entity.
Competitive Sealed Proposals: Process of advertising a request for proposal (RFP),

the evaluation of submitted proposals and awarding of the contract.
Consultant: A person that provides or proposes to provide a consulting service.
Consulting Service: Practice of studying or advising a state agency under a contract

that does not involve the traditional employer/employee relationship (ref. Texas
Government Code, §2254.021 Definitions).
Contract: An agreement (including a purchase order) where a contractor provides

goods/services to an Institution and the Institution pays for such goods/services in
accordance with the established price, terms and conditions, as well as an agreement
under which a contractor is given an opportunity to conduct a business enterprise on an
Institution’s premises in exchange for compensation to the Institution (i.e., auxiliary
enterprise contracts).
Contract Administration: This generally refers to the processes that occur after a
contract is signed and is explained in detail in Chapter 7.
Contract Advisory Team: The team created to assist state agencies in improving
contract management practices (ref. Texas Government Code, Chapter 2262 Statewide
Contract Management, Subchapter C Contract Advisory Team).
Contract Management: The entire contracting process from planning through contract
administration, including contract close-out.
Contract Manager: A person who is employed by an Institution and has significant

contract management duties for the Institution.
Contractor (or Vendor): A business entity or individual that has a contract to provide
goods/services to an Institution.
Controlling Interest: (1) an ownership interest or participating interest in a Business

Entity by virtue of units, percentage, shares, stock or otherwise that exceeds 10 percent;
(2) membership on the board of directors or other governing body of a Business Entity of
which the board or other governing body is composed of not more than 10 members; or
(3) service as an officer of a business entity that has 4 or fewer officers, or service as one
of the 4 officers most highly compensated by a Business Entity that has more than 4
officers.
Deliverable: A unit or increment of work required by a contract, including such items as

goods, services, reports, or documents.
Electronic State Business Daily (ESBD): The electronic marketplace where State of
Texas bid opportunities are posted (ref. Texas Government Code, §2155.083 State
Business Daily; Notice Regarding Procurements). Pursuant to Texas Government Code,
§2155.083(n), IHEs to which Texas Education Code, §§ 51.9335 applies is not subject to
§2155.083.
Emergency: A purchase made when an unforeseen and/or a sudden unexpected

occurrence creates a clear and imminent danger, requiring immediate action to prevent
or mitigate the loss or impairment of life, health, property, or essential public services.
Exclusive Acquisition: Purchase of goods/services that exceed the authorized direct

procurement dollar threshold (typically $15,000 for Institutions) from a single vendor,
without soliciting competitive offers or proposals. The term includes proprietary/sole
source purchases.
Executive Sponsor: A high-level individual with primary responsibility for implementation

and operation of the project. In some instances, the executive sponsor may be the
executive head of the Institution. In other instances, the executive sponsor may be the
division or program director with overall project responsibility.
Financial Advisors or Service Providers: Persons or business entities who act as a

financial advisor, financial consultant, money or investment manager, or broker.

Goods: Supplies, material, or equipment, including a transportable article of trade or
commerce that can be bartered or sold. Goods do not include construction services or
real property.
Group Purchasing Organization (GPO): A purchasing program established by (1) a

state agency that is authorized by law to procure goods/services for other state agencies,
such as the Texas Procurement and Support Services Division of the Texas Comptroller
of Public Accounts and the Texas Department of Information Resources, or any
successor agencies, respectively; or (2) a group purchasing organization the University
utilizes in accordance with the Board of Regents of The University of Texas System GPO
accreditation process; or (3) the UT System Supply Chain Alliance.
Handbook: The University of Texas at El Paso Contract Management Handbook.
Historically Underutilized Business (HUB): A minority-owned, woman-owned or

certain disabled veteran-owned businesses as defined by Texas Government Code, Title
10, Subtitle D, Chapter 2161. (http://www.window.state.tx.us/procurement/prog/hub/).
Institutions of Higher Education: Institutions of higher education as defined by Texas

Education Code, §61.003(8).
Institution: UT System and the institutions comprising UT System as listed in Regents’

Rule 40601.
Interested Party: (1) a person who has a Controlling Interest in a Business Entity with
whom an Institution contracts; or (2) a person who actively participates in facilitating the
contract or negotiating the terms of the contract with the Institution, including a broker,
intermediary, adviser, or attorney for the Business Entity.
Intermediary: A person who actively participates in the facilitation of the contract or

negotiating the contract, including a broker, adviser, attorney, or representative of or
agent for the Business Entity who:
(1) Receives compensation from the Business Entity for the person’s participation;
(2) Communicates directly with the Institution on behalf of the Business Entity
regarding the contract; and
(3) Is not an employee of the Business Entity.
Negotiations: A consensual bargaining process in which the parties attempt to reach

agreement on a disputed or potentially disputed matter. In a contractual sense,
negotiation means the “dealings conducted between two or more parties for the purpose
of reaching an understanding.”
Payment Bond: A bond executed in connection with a contract which secures the
payment requirements of contractor.
Performance Bond: A surety bond that provides assurance of a contractor’s

performance of a certain contract. The amount for the performance bond is based on the
value of the contract.
Pre-proposal Conference: A meeting chaired by Institution personnel that is designed to

help potential bidders/proposers/respondents understand the requirements of a
solicitation. Also known as a pre-bid conference.
Professional Services: Services directly related to professional practices as defined by

the Professional Services Procurement Act (Texas Government Code, §2254.002).
These include services within the scope of the practice of: accounting; architecture;
optometry; medicine; land surveying; and professional engineering. Services provided by
professionals outside the scope of their profession (for example, management consulting

services provided by accounting firms) are not considered professional services.
Contracted services provided by professionals that fall outside their scope of practice are
governed by the Best Value Statutes applicable to the purchase of goods/services.
Proposal: An executed offer submitted by a respondent in response to a Request for

Proposals (RFP) and intended to be used as a basis to negotiate a contract award.
Proposer: An entity submitting a proposal in response to a solicitation. The term includes

anyone acting on behalf of the individual or other entity that submits a proposal, such as
agents, employees and representatives (see Respondent).
Proprietary Purchase: (see Exclusive Acquisition)
Purchasing Office: The office designated to purchase goods/services above the direct
procurement dollar threshold for an Institution.
Regents’ Rules: The Rules and Regulations of the Board of Regents of The University
of Texas System.
Renewal: Extension of the term of an existing contract for an additional time period in
accordance with the terms and conditions of the original or amended contract.
Request for Information (RFI): A general invitation to contractors requesting

information for a potential future competitive solicitation. The RFI is not a competitive
solicitation and a contract may not be awarded as the result of an RFI. An RFI is typically
used as a research and information gathering tool for preparation of a competitive
solicitation.
Request for Proposal (RFP): A solicitation requesting submittal of a proposal in

response to the required specifications and SOW and usually includes some form of a
cost proposal. The RFP process allows for negotiations between a respondent and the
Institution. The mandatory evaluation criteria that must be used to evaluate proposals are
specified by the Best Value Statutes.
Request for Qualifications (RFQ): A solicitation requesting submittal of qualifications or

specialized expertise in response to the scope of services required. No pricing is solicited
with an RFQ.
Responsive: A respondent or proposal that complies with all material aspects of the
solicitation, including submission of all required documents.
Respondent: An entity submitting a proposal in response to a solicitation. The term

includes anyone acting on behalf of the individual or other entity that submits a proposal,
such as agents, employees and representatives (see Proposer).
Responsible: A respondent that is capable of fully performing and delivering

goods/services in accordance with the contract requirements. The Institution may include
past performance, financial capabilities and business management as criteria for
determining if a respondent is capable of satisfying the contract requirements.
Scope of Work (SOW): An accurate, complete, detailed, and concise description of the
work to be performed by the contractor.
Service: The furnishing of skilled or unskilled labor by a contractor which may not include
the delivery of a tangible end product. In some cases, services and goods may be
combined (such as film processing). In these instances, Institutions should determine
whether labor or goods is the primary factor. In the case of film processing, the labor to
process the film is the primary factor, therefore film processing is considered a service.

Sole Source: (see Exclusive Acquisition)
Solicitation: A document requesting submittal of bids, proposals, quotes or qualifications

for goods/services in accordance with the advertised specifications.
Specification: Any description of the physical or functional characteristics or of the

nature of goods/services to be purchased. It may include a description of any
requirements for inspecting, testing, or preparing goods/services for delivery.
State: The State of Texas.
State Agency: An agency of the State of Texas as defined in Texas Government Code,
§2056.001 (excluding Institutions).
Statute: A law enacted by a legislature.
Sub-recipient: A non-federal entity that expends federal awards received from a pass-
through entity to carry out a federal program, but does not include an individual that is a
beneficiary of such a program. A sub-recipient may also be a recipient of other federal
awards directly from a federal awarding agency.
Surety: A person or entity providing a bond to a contractor to indemnify the Institution

against all direct and consequential damages suffered by failure of contractor to perform
the contract and to pay all lawful claims of subcontractors, materials vendors and
laborers as applicable.
University Rules: The Regents’ Rules at http://www.utsystem.edu/board-of-

regents/rules; the policies of UT System at http://www.utsystem.edu/board-of-
regents/policy-library; and the Institutional rules, regulations and policies of the applicable
Institutions.
UT System: The University of Texas System.
Vendor (or Contractor): A business entity or individual that has a contract to provide
goods/services to an Institution.

1.3 Acronyms
BAFO: Best and Final Offer
CPA: State of Texas Comptroller of Public Accounts
DIR: State of Texas Department of Information Resources
EIR: Electronic and Information Resources
ESBD: Electronic State Business Daily
GPO: Group Purchasing Organization
HSP: HUB Subcontracting Plan
HUB: Historically Underutilized Business
ITB: Best Value Invitation to Bid
IHE: Institution of Higher Education
IR: Information Resources
LBB: Texas Legislative Budget Board
OGC: The University of Texas System Office of General Counsel
RFI: Request for Information
RFP: Request for Proposal
RFQ: Request for Qualifications
SAO: State of Texas Auditor’s Office
SOW: Scope of Work
TAC: Texas Administrative Code
TPSS: Texas Procurement and Support Services Division of CPA
UTEP: The University of Texas at El Paso

1.4 Training for Purchasing Personnel and Contract Managers
Institutions must train officers and employees authorized to execute contracts for the
Institution or to exercise discretion in awarding contracts, including training in ethics,
selection of appropriate procurement methods, and information resources purchasing
technologies (ref. Section 51.9337(b)(5), Texas Education Code).
Institutions must also comply with purchasing personnel training requirements set out in
UTS156 Purchaser Training and Certification. Institutions will also comply with local
policies and procedures related to training.
In addition, Institutions are encouraged to assure that contract managers receive training
that covers topics related to:
(1) Fair and objective selection and negotiation with the most qualified contractor;
(2) Establishing prices that are cost-effective and that reflect the cost of providing the
service;
(3) Inclusion of provisions in a contract that hold the contractor accountable for results;
(4) Monitoring and enforcing a contract;
(5) Making payments consistent with the contract;
(6) Compliance with any requirements or goals contained in the contract management
guide; and
(7) Use and application of advanced sourcing strategies, techniques, and tools.
Texas Education Code §51.9337(b)(5)

UTS156 Purchaser Training and Certification Policy

1.5 Ethics Standards and Policies
Institution officers and employees are responsible for maintaining the high ethical
standards required for our stewardship of public monies. All Institution officers and
employees should pursue a course of conduct that does not create a conflict of interest.
Institution purchasing personnel must adhere to the highest level of professionalism in

discharging their official duties. The nature of the procurement function makes it
critical that everyone in the purchasing a n d c o n t r a c t i n g process remain
independent and free from the perception of impropriety. Any erosion of public
trust or any shadow of impropriety is detrimental to the integrity of the purchasing
process. Clear, established guidelines and rules provide credibility for a purchasing
program. Such guidelines are designed to prevent current and potential vendors from
influencing Institution officers or employees in discharging their official duties. In
addition, these guidelines will help prevent Institution officers’ and employees’
independent judgment from being compromised.
With these principles in mind and in accordance with state law, Institution officers and
employees will adhere to the following policies and procedures, as well as Applicable
Laws and University Rules.
1.5.1 Institution Ethics Policy

Institution officers and employees may not have a direct or indirect interest, including
financial and other interests, engage in a business transaction or professional activity, or
incur any obligation of any nature, that is in substantial conflict with the proper
discharge of the officer’s or employee’s duties in the public interest.
1.5.2 Standards of Conduct

An Institution officer or employee will not:
 Accept or solicit any gift, favor, or service that might reasonably tend to influence the
officer or employee in the discharge of official duties or that the officer or employee
knows, or should know, is being offered with the intent to influence the officer’s or
employee’s official conduct;
 Accept other employment or engage in a business or professional activity that the

officer or employee might reasonably expect would require or induce the officer or
employee to disclose confidential information acquired by reason of the official
position;
 Accept other employment or compensation that could reasonably be expected to

impair the officer’s or employee’s independence of judgment in the performance of
their official duties;
 Make personal investments that could reasonably be expected to create a

substantial conflict between the officer’s or employee’s private interest and the public
interest; or
 Intentionally or knowingly solicit, accept or agree to accept any benefit for having
exercised the officer’s or employee’s official powers or performed their official duties
in favor of another.
An Institution may not use appropriated money to compensate a state employee who
violates a standard of conduct.

1.5.3 Prohibition of Economic Benefit
In accordance with the Texas Constitution, an officer or employee of the state may not,
directly or indirectly, profit by or have a pecuniary interest in the preparation, printing,
duplication, or sale of a publication or other printed material issued by a department or
agency of the executive branch. A person who violates this Section may be dismissed
from Institution employment.
Regents’ Rule 30104 Conflict of Interest, Conflict of Commitment, and Outside Activities
UTS159 Purchasing Policy
UTS180 Conflicts of Interest, Conflicts of Commitment, and Outside Activities Policy
OGC Ethics Home Page

1.6 Conflict of Interest
To avoid conflicts of interest, UTEP requires all potential contractors bidding or proposing
to provide goods or services in response to a competitive procurement to disclose, in
their responses to solicitations, any actual or potential conflicts of interest in their
proposed provision of goods/services or other performance under any contracts. To help
ensure debarred Respondents or Respondents with debarred principals are not awarded
contracts, Solicitation documents must require Respondents to indicate whether the
Respondent or any of its principals (i.e. owner, proprietor, sole or majority shareholder,
director, president, managing partner, etc.) have been debarred.
The Institution should also require respondents to:
 Represent and warrant that their provision of services or other performance under the
contract will not constitute an actual or potential conflict of interest.
 Disclose any proposed personnel who are related to any current or former employees
of the Institution.
 Warrant that they have not given, nor intend to give, at any time hereafter, any
economic opportunity, future employment, gift, loan, gratuity, special discount, trip,
favor or service to an officer or employee of Institution in connection with the
solicitation.
Contractors should not be allowed to assign any portion of the contract or their
performance, to others, for example, subcontractors, without the prior written consent of
the Institution. Contractors should remain responsible for the performance of the contract
notwithstanding any such assignment or subcontract. This ensures that the evaluated
and selected entity will actually be responsible for performance and that proposed
transactions may be reviewed for compliance with the conflict of interest and related party
provisions.
1.6.1 Financial Advisors

When soliciting and contracting for the services of financial advisors, Institutions will
comply with Texas Government Code, Chapter 2263, regarding conflict of interest
and related party provisions applicable to those advisors.
Financial advisors or service providers must disclose in writing to the administrative head
of the Institution and SAO the following:
 any relationship the financial advisor or service provider has with any party to a
transaction with the Institution, other than a relationship necessary to the investment
or funds management services that the financial advisor or service provider performs
for the Institution, if a reasonable person could expect the relationship to diminish the
financial advisor’s or service provider’s independence of judgment in the performance
of the person’s responsibilities to the Institution; and
 all direct or indirect pecuniary interests the financial advisor or service provider has in
any party to a transaction with the Institution, if the transaction is connected with any
financial device or service the financial advisor or service provider provides to the
entity or member, in connection with the management or investment of Institution
funds.
The statute further provides that financial advisors or service providers:
 will disclose a relationship (described above), without regard to whether the

relationship is a direct, indirect, personal, private, commercial, or business

relationship;
 will file an annual statement with the administrative head of the governmental entity
and with SAO disclosing the relationships outlined above;

If no relationship existed during the disclosure period, the annual statement will state
this fact affirmatively. In addition, and the annual statement will be filed no later than
April 15th (for the previous calendar year period) on a form prescribed by the entity.
Texas Education Code §51.923

Texas Government Code, Chapter 551

1.7 Ethics Requirements from Senate Bill 20
The passage of Senate Bill 20 in the 84th Legislature (SB 20) has established a
number of provisions related to ethics and purchasing. A Summary of 2015 Procurement
and Contracting Legislation is attached as APPENDIX 2.
SB 20 creates a new Texas Government Code, Chapter 2261, Subchapter F. In

connections with ethics, Chapter 2261 requires that:
 Each Institution officer or employee who is involved in procurement or in contract

management for the Institution will disclose to the Institution any potential conflict of
interest specified by state law or Institution policy that is known by the employee or
official with respect to any contract with a private vendor or bid for the purchase of
goods/services from a private vendor by the Institution.
 Institutions may not enter into a contract for the purchase of goods/services with a
private vendor with whom any of the following employees or officials have a financial
interest:
 the governing official, executive director, general counsel, chief procurement

officer, or procurement director of the agency; or
 a family member related to an employee or official described above within the

second degree of affinity or consanguinity.
 An Institution employee or official has a financial interest in a private vendor if the

employee or official:
 owns or controls, directly or indirectly, an ownership interest of at least one

percent in the person, including the right to share in profits, proceeds, or capital
gains; or
 could reasonably foresee that a contract with the person could result in a
financial benefit to the employee or official.
 A financial interest prohibited by this Section does not include a retirement plan, a
blind trust, insurance coverage, or an ownership interest of less than one percent in a
corporation.
Best value purchasing authority held by institutions of higher education in Texas

Education Code, §§51.9335, 73.115 and 74.008 is conditional on satisfying the
requirements of new §51.9337 (see Section 2.2 of this Handbook). Of these
requirements, some relate to ethics. The ethics-related requirements the Board of
Regents must adopt are:
 A code of ethics for the Institution's officers and employees, including provisions
governing officers and employees authorized to execute contracts for the Institution
or to exercise discretion in awarding contracts, including
 general standards of conduct and a statement that each officer or employee is

expected to obey all federal, state, and local laws and is subject to disciplinary
action for a violation of those laws;
 policies governing conflicts of interest, conflicts of commitment, and outside

activities, ensuring that the primary responsibility of officers and employees is to
accomplish the duties and responsibilities assigned to that position;

 a conflict of interest policy that prohibits employees from having a direct or
indirect financial or other interest, engaging in a business transaction or
professional activity, or incurring any obligation that is in substantial conflict with
the proper discharge of the employee's duties related to the public interest;
 a conflict of commitment policy that prohibits an employee's activities outside the

Institution from interfering with the employee's duties and responsibilities to the
Institution;
 a policy governing an officer's or employee's outside activities, including

compensated employment and board service, that clearly delineates the nature
and amount of permissible outside activities and that includes processes for
disclosing the outside activities and for obtaining and documenting Institutional
approval to perform the activities;
 a policy that prohibits an officer or employee from acting as an agent for another
person in the negotiation of the terms of an agreement relating to the provision of
money, services, or property to the Institution;
 a policy governing the use of Institutional resources; and
 a policy providing for the regular training of officers and employees on the code
of ethics and policies discussed therein.
 policies for the internal investigation of suspected defalcation, misappropriation, and

other fiscal irregularities and an Institution or system-wide compliance program
designed to promote ethical behavior and ensure compliance with all applicable
policies, laws, and rules governing higher education, including research and health
care to the extent applicable.
 training for officers and employees authorized to execute contracts for the Institution
or to exercise discretion in awarding contracts, including training in ethics, selection
of appropriate procurement methods, and information resources purchasing
technologies.
Finally, Texas Government Code, Chapter 572, includes a revolving door provision for
Institution officers and employees involved in procurement. Under Texas Government
Code, Section 572.069, a former state officer or employee of a state agency who, during
the period of state service or employment participated on behalf of a state agency in a
procurement or contract negotiation, may not accept employment from that vendor or
service provider before the second (2nd) anniversary of the date the officer's or
employee's service or employment with the state agency ceased.
Senate Bill 20 - 84th Legislature

Texas Government Code, Chapter 2261, Subchapter F
Texas Government Code §572.069
Regents’ Rule 30104 Conflict of Interest, Conflict of Commitment, and Outside Activities
UTS159 Purchasing Policy
UTS180 Conflicts of Interest, Conflicts of Commitment, and Outside Activities Policy
APPENDIX 2 - Summary of 2015 Procurement and Contracting Legislation

1.8 Disclosure of Interested Parties
Institutions must comply with the “Disclosure of Interested Parties” requirements
mandated by Section 2252.908, Government Code, as implemented by the Texas Ethics
Commission. Briefly stated, Institutions may not execute a contract for goods or services
exceeding $1 million unless the Business Entity presents the Institution with a signed form
disclosing interested parties to the contract. Business Entities may be unaware of these
requirements and successful implementation may require some outreach and education
by the Institution so that the contracting process can be successfully navigated and large
contracts executed timely.
Specific Disclosure requirements include:
 Before a UT institution may execute certain contracts exceeding $1 million, the

Business Entity with which a UT institution is contracting must submit FORM 1295 to the
Institution at the same time the Business Entity submits the signed contract to the
Institution. Note that “Business Entity” is defined as an entity (other than a governmental
entity or state agency) through which business is conducted, regardless of whether the
entity is for-profit or non-profit.
 This requirement applies to contracts [including contract amendments, renewals and

extensions] that:
 Require action or vote by the Board of Regents before the contract may be
signed, or
 Have a value of at least $1 million (Institutions should value each contract as
described by Rule 10501, Section 3.1.1), not including (1) sponsored research
contracts; (2) interagency contracts; or (3) contracts related to health and human
services if the value cannot be determined at the time the contract is executed
and any qualified vendor is eligible for the contract.
1.8.1 Automated Disclosure Process

The Texas Ethics Commission provides an automated electronic disclosure process that
both the Business Entity and the Institution must use to comply with the Disclosure
requirements. Access to the electronic disclosure process is posted at
https://www.ethics.state.tx.us/tec/1295-Info.htm, which currently contains a link to FORM
1295 and other related information.
1.8.2 Current Disclosure Process

Step #1 – Business Entity completes FORM 1295 in electronic format on the Texas Ethics
Commission website.
Step #2 – Upon receipt of a completed Disclosure, Texas Ethics Commission issues a
Certification of Filing to Business Entity and Business Entity downloads, signs and
notarizes FORM 1295.
Step #3 – When Business Entity submits the signed and notarized FORM 1295 to
Institution with the signed contract, Business Entity also submits the Certificate of Filing.
Step #4 – Not later than the 30th day after the date the contract has been signed by all
parties, Institution must notify the Texas Ethics Commission (in electronic format) of the
receipt of (1) FORM 1295, and (2) the Certification of Filing.
Step #5 – Not later than the 7th business day after receipt of notice from Institution, Texas
Ethics Commission makes the Disclosure available to the public by posting the Disclosure
on its web site.

1.8.3 Contents of Disclosure
FORM 1295 requires Business Entity to provide the following information:
1. Name of Business Entity;

2. Address of Business Entity place of business;
3. Name of Institution;
4. Identification number used by Institution to identify the contract;
5. Description of goods or services provided under the contract;
6. Name, address and nature of interested parties (Controlling Interest and/or
Intermediary);
7. If none, a representation that there are no Interested Parties;
8. Signature of authorized representative of Business Entity; and
9. Acknowledgement by a Notary Public.
Texas Government Code, Section 2252.908 (“Disclosure of Interested Parties” Statute)

Texas Administration Code, Title 1, Sections 46.1 through 46.3 (“Disclosure of Interested
Parties” Regulations)
Texas Ethics Commission “Disclosure of Interested Parties” Web Page
Texas Ethics Commission Form 1295, Certificate of Interested Parties
Regents’ Rule 10501, Section 3.1.1

CHAPTER 2
PLANNING
The first step in contract management is planning. Planning is crucial to the successful
outcome of any procurement. With proper planning, Institutions are more likely to
successfully achieve contracting objectives. Planning assists Institutions in determining
and documenting need, preparing the SOW, choosing the appropriate procurement type,
soliciting for responses, negotiating the terms of the responses, drafting the contract,
administrating and overseeing the contract, and monitoring the contractor. If the
procurement cannot be handled simply through the development of a straight-forward ITB
and purchase order, these steps can be complex and there are many opportunities for
error to be introduced into the process. Proper planning will reduce or eliminate the risk of
error.
During the planning phase each of the following elements of contract management will be
considered:
Plan
Procurement
Contract
Management
Contract
Oversight
Contract Formation/
Rate/Price Establishment
Plan – Identify contracting objectives and contracting strategy.
Procurement – Fairly and objectively select the most qualified contractor(s).
Contract Formation/Rate/Price Establishment – Ensure the contract contains

provisions that hold contractor(s) accountable for producing desired results, including all
relevant terms and conditions as well as establishing processes that are cost-effective
and aligned with the cost of providing the goods/services.
Contract Oversight – Monitor and enforce the terms of the contract.

The level of risk associated with each of these elements varies depending on the type of
business relationship between the Institution and the contractor. For example, the nature
and extent of contract monitoring will vary considerably between fee for service and cost
reimbursement types of relationships.
Contract planning includes several preliminary steps, including development of a contract

management team, developing a communication plan, determining the procurement
method, developing the specifications and SOW for the goods/services, assessing
contracting risk and developing a cost estimate.
2.1 Contract Management Team
For purchases requiring competitive procurement, each contract management initiative

should include a stakeholder, an evaluation committee/program staff, contract
management staff, Purchasing Office staff, and HUB office staff to assist in the contract
management process, as applicable.
The extent and degree of executive sponsorship and participation should be directly
related to the level of risk associated with the procurement. For some contracts, written
approval of the executive sponsor should be obtained. A Sample Executive Approval
Memo is attached as APPENDIX 3.
The contract manager should be experienced with the proposed type and size of
contract.
Certified purchasers will be familiar with this Handbook, even though the purchaser may
not be the designated contract manager. Purchasing personnel will review all
procurements above the competitive threshold to ensure that Applicable Laws and
University Rules relating to procurement processes are followed and that the
procurement method is appropriate.
The HUB office will review contracts that may exceed $100,000 in value to ensure
compliance with HUB laws and regulations.
The program staff will provide input as to the technical requirements and serve as the
subject matter experts for the procurement. Often, program staff may be tasked with
primary contract administration and any reporting or other necessary actions following
contract formation.
If the Institution lacks internal resources or expertise for a particular procurement, the
Institution may contract for development of the SOW as necessary and appropriate.
2.1.1 Contract Risk Assessment

The contract manager will initiate the contract risk assessment process on procurements
above the competitive threshold and determine the appropriate level of risk analysis for
the procurement. The contract risk assessment process includes: 1) risk identification,
2) risk analysis, 3) risk evaluation, 4) risk mitigation and contingency planning and 5)
risk monitoring. Contract risks are as varied as the types of contracts. Risk categories
common to contract management include product risk, process risk, business continuity
risk, financial risk and schedule risk.
Risk determination is based on subjective experience. Several factors that may be

useful in identifying the level of risk may include:

 Whether vendor will create, receive from or on behalf of Institution, or have access to,
the Institution’s records or record systems which will require compliance with
UTS165 Information Resources Use and Security Policy;
 Whether vendor will provide electronic and information resources which will require
compliance with UTS150 Access by Persons with Disabilities to Electronic and
Information Resources Procured or Developed by The University of Texas System
Administration and The University of Texas System Institutions;
 The complexity and subject matter of the procurement;
 The dollar amount of the procurement, and whether the procurement will result in a
major contract;
 The anticipated payment methodology;

 The experience the Institution staff have with the type of procurement;
 Whether the results of the procurement will impact the public or only impact the
Institution;
 Time constraints or the expected duration of the procurement; and
 The type, availability or experience of staff resources required to implement the
objectives of the procurement.
A low risk contract, such as routine purchases of goods/services, does not typically
require the significant participation or sponsorship of Institution executive management.
Risk assessment is an ongoing process. For complex, long-term contracts, risk should be
reviewed and re-evaluated by the contract manager on a continual basis until the contract
is fully performed, final payment is made, and the contract is closed-out.
Texas Education Code §51.9337(b)(3) and (d)

Texas Government Code, Section 2261.256
UTS150 Access by Persons with Disabilities to Electronic and Information Resources
Procured or Developed by The University of Texas System Administration and The
University of Texas System Institutions
UTS165 Information Resources Use and Security Policy (including Standards 1, 21, and 22)
Chapter 7 - Contract Administration
APPENDIX 3 - Sample Executive Approval Memo

2.2 Determining Procurement Method
The Best Value Statutes authorize Institutions to acquire goods/services (not professional
services by the method that provides the best value to the Institution). Section 51.9337,
Texas Education Code, provides that an Institution may not exercise the best value
procurement authority for goods and services granted by the Best Value Statutes, unless
the Board of Regents promulgates policies covering:
 Code of Ethics for officers and employees related to executing contracts or

awarding contracts (ref. Section 51.9337(b)(1) and (c));
 Policies for internal investigation of suspected fiscal irregularities (ref. Section
51.9337(b)(2) and (c));
 Compliance program to promote ethical behavior and compliance with applicable
laws, rules and policies (ref. Section 51.9337(b)(2));
 Contract management handbook covering contracting policies, contract review
and risk analysis (ref. Section 51.9337(b)(3) and (d));
 Contracting delegation guidelines (ref. Section 51.9337(b)(4), (e) and (f));
 Training for officers and employees authorized to execute contracts or exercise
discretion in awarding contracts (ref. Section 51.9337(b)(5)); and
 Internal audit protocols (ref. Section 51.9337(b)(6), (g), (h), (i) and (j)).
An Institution’s chief auditor must annually assess whether the Institution has adopted
rules and policies required by Section 51.9337, Education Code, and report the finding to
the State Auditor. If the State Auditor determines that the Institution has not adopted rules
and policies required by Section 51.9337, the State Auditor shall report that failure to the
Legislature and to the Board of Regents and work with the Institution to develop a
remediation plan. Failure by the Institution to comply with the remediation plan within the
time specified by the State Auditor will result in a finding that the Institution is
noncompliant. That finding will be reported to the Legislature and CPA.
An Institution that is not in compliance with Section 51.9337, Education Code, is subject
to the laws governing the acquisition of goods and services by other state agencies,
including Subtitle D, Title 10, Government Code and Chapter 2254, Government Code.
Always, keep best value considerations in mind when selecting the procurement method.
The lowest cost is not necessarily the best value for all procurements. For example, a
commodity or service of higher quality, such as a longer life span, may be a better value
and investment for the Institution, even if the initial cost is more. Institutions should think
strategically when considering their procurement needs. Do not make the mistake of
purchasing for the immediate needs without considering these questions:
“What is the desired outcome of the procurement?”

“What is the best way to achieve this outcome?”
For example, in connection with the purchase of a heating and air conditioning unit,
consider the total cost of ownership. Average life span, electricity consumption,
maintenance record and parts availability are just a few considerations when analyzing
total cost of ownership. Additional considerations include qualifications and availability of
the service technicians and the vendor’s performance history.
In addition to the requirements of Applicable Laws, note that University Rules require
Institutions to follow certain procedures in connection with certain procurements. A
Summary of UT Procurement Guidelines is attached as APPENDIX 4.

Texas Education Code §51.9335 (Institutions except MD Anderson)

APPENDIX 4 – Summary of UT Procurement Guidelines
2.2.1 Calculating Contract Value

Pursuant to Rule 10501, Section 3.1.1, contract value means the total cost or monetary
value of the contract, including all potential contract extensions or renewals whether
automatic or by operation of additional documentation. In addition, Rule 10501 specifies
that any contract with unspecified cost or monetary value and a term of greater than four
(4) years, is presumed to have a total value of greater than $1 million.
The contract value calculation will include the value for the original term and all renewal
terms (whether automatic or by operation of additional documentation).
Value estimates will be based on best business practices, state fiscal standards,
Applicable Laws and University Rules.
Procurements of similar goods/services and resulting contracts with a particular vendor

will generally be aggregated together to determine contract value for purposes of Rule
10501.
Regents’ Rule 10501, Section 3.1.1
2.2.2 Dollar Thresholds for Direct and Competitive

Procurement
Purchasing personnel and program staff will first refer to any Applicable Laws or
University Rules that may direct the use of a specific procurement method. If Applicable
Laws or University Rules do not direct a specific method, purchasing personnel and
program staff will use the following contract value thresholds to determine whether
direct/spot market, informal or formal procurement methods should be used:
Estimated Procurement Activities

Spend
<$15,000 No competitive procurement required.
$15,000 to Informal quotes from three or more potential vendors are required
$50,000 (Institutions may allow end users to secure these quotes directly).
Two (2) HUB quotes must be obtained from HUSB, if available.
>$50,000 Formal procurement by the Institution directly or via another state
agency or a GPO. The Institution’s Purchasing Office, not
program staff, must take lead responsibility for conducting or
overseeing the procurement, unless the procurement is led by the
UT System Supply Chain Alliance.
NOTE: A large purchase may not be divided into small lot purchases to
meet the contract value thresholds prescribed by this Section.

2.2.3 Competitive Procurement Exemptions
In limited circumstances, some purchases may not require competitive procurement
processes and exclusive acquisition may be authorized. An exemption from competitive
procurement processes does not exempt the purchase from HUB requirements if the
value of the purchase is $100,000 or more.
2.2.3.1 Emergency Purchases – Emergencies occur as the result of unforeseeable

circumstances that suddenly and unexpectedly cause an Institution to need
goods/services (for example, the issuance of a court order, new legislation or
a natural disaster). Delay or negligence on the part of the Institution does not
qualify as an emergency.
If an unforeseen situation arises in which compliance with normal

procurement practice (including, normally Applicable Laws and University
Rules) is impracticable or contrary to the public interest, an emergency
purchase may be warranted to prevent a hazard to life, health, safety,
welfare, property or to avoid undue additional cost to the Institution.
Notwithstanding the immediate nature of an emergency purchase, all

procurements conducted as emergencies should be made as competitively
as possible under the circumstances.
In addition, emergency purchases should not exceed the scope or duration of

the emergency.
Institutions must comply with University Rules regarding determination,

authorization and documentation of emergency purchases, including a
written exclusive acquisition justification and a written best value justification.
2.2.3.2 Exclusive Acquisitions (also known as Sole Source or Proprietary

Purchases) – University Rules establish requirements applicable to
purchases of goods/services that exceed the authorized direct (sometimes
called spot market or open market) procurement dollar threshold (typically
$15,000) from a single vendor, without soliciting offers or proposals from
other vendors. These purchases are sometimes called exclusive acquisitions
or sole source or proprietary purchases.
University Rules establish policies and procedures applicable to excusive

acquisitions. As always, Institutions must acquire all goods/services in a
manner designed to achieve and document best value to the Institution. If
exclusive acquisitions are made in excess of the competitive threshold,
Institutions must be careful to demonstrate the achievement of best value,
despite the exclusive acquisition approach.
With this in mind, an exclusive acquisition justification form (for internal use
only) for an exclusive acquisition should clearly:
 Describe how the purchased goods/services would be used;

 Explain why the distinctive characteristics of the goods/services or
distinctive conditions of purchase are necessary to accomplish the
objectives of the Institution;
 Explain why these characteristics or conditions require that the
goods/services be obtained only from the exclusive source;
 Name other sources and alternative goods/services that have been
considered and evaluated, and explain individually why the other
identified sources and products/services would not meet the
requirements of the Institution; and

NOTE: In doing this, be careful to focus on the unique
or specialized nature of the goods/services to be
procured. If there is, in fact, an alternative that would
meet the Institution’s requirements, exclusive acquisition
may not be justified, even if the alternative source
received lower evaluation scores.
 Confirm that the Institution signatories do not have a conflict of interest in
connection with the procurement.

After all appropriate approvals and signatures, the exclusive acquisition
justification form should be retained in the procurement file.
All exclusive acquisitions must comply with Applicable Laws and University
Rules.
A sample Exclusive Acquisition Justification Form is attached as APPENDIX

5.
Texas Education Code §51.9335 (higher education, generally [including UTMB])

APPENDIX 5 – Sample Exclusive Acquisition Justification
2.2.3.3 Purchases from Persons with Disabilities – Applicable Laws (including the
Best Value Statues) require Institutions to comply with Applicable Laws
related to the Purchases from Persons with Disabilities program.
The Purchases from Persons with Disabilities program (1) furthers the state's
policy of encouraging and assisting persons with disabilities to achieve
maximum personal independence by engaging in useful productive
employment activities; and (2) provides state agencies, departments, and
institutions and political subdivisions of the state with a method for achieving
conformity with requirements of nondiscrimination and affirmative action in
employment matters related to persons with disabilities.
Subject to certain exceptions, Applicable Laws require Institutions to

purchase, on a non-competitive basis, the products made and services
performed by persons with disabilities, which have been approved by the
state agency pursuant to Applicable Laws.
Institutions must report any exceptions taken.

Texas Government Code §§2155.069, 2155.138 and 2155.441
Texas Administrative Code, Title 40, Part 20, Chapter 806
Texas Human Resources Code §§122.008, 122.0095, 122.016 and 122.029 (ref.
also entire Chapter 122)

2.2.3.4 Group Purchasing – Institutions will comply with the following
clarifications/modifications related to the procurement of goods/services
through GPOs (and as used in this handbook, “GPO” includes state agencies
performing GPO functions):
 Use of GPOs. When total spend under a contract is anticipated to

exceed $50,000 (requiring a formal procurement under Section 2.2.2),
Institutions may use a contract procured by a GPO only if the GPO uses
sourcing processes accredited by UT System as meeting minimum
procurement standards. GPOs presently accredited by UT System are
listed on the UT System Office of Business Affairs website:
http://www.utsystem.edu/offices/business-affairs/group-
purchasing-organization-gpo-accreditation-program
In using any contract procured by an external GPO, Institutions should

remember that UT System policies apply to these procurements. The
specifics of how policy compliance should be handled in practice will
require the exercise of sound business judgment. When an external
GPO has a national focus, the GPO is unlikely to require proposers to
comply with specifications that are unique to UT System or the State of
Texas. For example, when an Institution conducts a procurement in
house, it may require proposers to commit to very specific insurance
coverage recommended by the Institution’s risk management activity.
The external GPO, however, may not have required proposers to do so.
In that case, the Institution should use good business judgment to decide
whether it would be appropriate to impose these requirements, after the
fact, on the proposer to which the external GPO has made its contract
award.
 Comparison of Multiple Contract Awards.
 If the Institution proposes to use a contract procured by a UT

System-accredited GPO other than the UT System Supply Chain
Alliance or Premier, and the GPO has made a multiple award, the
Institution must obtain a minimum of three valid proposals (or two, if
there are only two vendors in the category) from contracted vendors
in order to identify “best value.”
 If the Institution proposes to use a contract procured by Premier, the

Institution will obtain a minimum of three valid proposals (or two, if
there are only two vendors in the category) from contracted vendors,
in order to identify “best value,” but only if the spend is anticipated to
exceed the applicable spend threshold shown below.
 $1.0 million for UTPB, UTRGV, UTT and UTHSCT;
 $2.0 million for UTA, UTD, UTEP, UTSA; and
 $3.0 million for UTAUS, UTHSCH, UTHSCSA, UTMB,
UTSWMC, and UT System.
 $5.0 million for UTMDACC
If the Institution proposes to use a contract procured by the UT System Supply

Chain Alliance, the Institution generally does not need to obtain and compare
proposals from multiple contracted vendors, in order to identify “best value,”
because in most cases the UT System Supply Chain Alliance makes a contract
award to only a single vendor for particular goods/services. If the Alliance does
make a dual contract award, any requirement to compare bids from both
vendors will be specified in the Alliance’s contract launch brief.

 Exclusive Acquisition Justification for Single Awards.
 When a UT System-accredited GPO is used for a procurement, and
an award has been made to only a single vendor in a given category,
it is not necessary to justify the purchase as an exclusive acquisition,
because it is presumed that the GPO conducted a competitive
procurement.
 Review of Certain Purchases under GPO Contracts.
 If the Institution proposes to use a contract procured by a UT

System-authorized GPO, and total contract spend is anticipated to
exceed the applicable spend threshold below, a summary of the
contract must be submitted, on the prescribed form, to the UT
System Executive Vice Chancellor for Business Affairs (via
lloyd@utsystem.edu), who will forward the summary to the UT
System Deputy Chancellor, the General Counsel to the Board of
Regents, and the UT System Chief Audit Executive. If no member of
that committee, within two business days, raises a question about
the contract or asks that it be submitted to the entire Board of
Regents for review and approval, no further Board review or
approval of the contract will be required:
 $1.0 million for UTPB, UTRGV, UTT and UTHSCT;
 $2.0 million for UTA, UTD, UTEP, UTSA; and
 $3.0 million for UTAUS, UTHSCH, UTHSCSA, UTMB,
UTSWMC, and UT System.
 $5.0 million for UTMDACC
 Use of DIR-Procured Contracts. DIR adopted regulations (1 Texas

Administrative Code 212) clarifying that the restrictions in Texas
Government Code Chapter 2157 do not apply to institutions of higher
education. Under those regulations, Institutions do not need to comply
with restrictions governing other state agencies in connection with
Chapter 2157 commodity item purchases and statements of work.
2.2.3.5 Direct Purchases – Unless Applicable Laws or University Rules direct the
use of a specific procurement method, University Rules authorize direct
purchases (sometimes called spot market or open market purchases) for
goods/services with a contract value of less than $15,000 (see Section
2.2.2). The direct purchase method does not require an informal or formal
competitive process. Direct purchases may be directed to a single vendor
without the need for competition.
Texas Government Code §§ 2157.068 and 2157.0685

Regents’ Rule 10501 Delegation to Act on Behalf of the Board
APPENDIX 2 – Summary of 2015 Procurement and Contracting Legislation
2.2.4 Informal Competitive Offers

The informal competitive offers method requires a minimum of three (3) informal written
quotes. Of the three (3) or more written quotes, at least two (2) quotes must be from
HUBs, when available. If an Institution is unable to locate two HUB vendors, the
Institution should make a written notation in the procurement file of all HUB listings and
resources the Institution used in an attempt to locate two HUBs. For more information

regarding HUB requirements, see Section 3.1 of this Handbook.
In addition to the three (3) informal quotes, Institutions should also attempt to obtain an
offer from the last vendor who held the contract, as may be applicable and appropriate.
The Best Value Statutes specify the mandatory criteria that Institutions must use to
evaluate the offers and determine best value to the Institution. When using the informal
competitive offers method, Institutions must prepare a best value justification and retain
the justification in the procurement file.
2.2.5 Formal Competitive Procurements

If a formal procurement method is appropriate, the type of formal procurement method
used will be a significant factor in the contract planning process. Each formal
procurement process has unique features. For example, some methods permit
negotiation with respondents and some do not. In addition, the procurement lead time for
some methods is longer than for others.
2.2.5.1 Best Value Invitation to Bid (ITB) – The bes t va lue competitive sealed
bid method uses the ITB solicitation document. T he ITB is generally used
when the requirements for the goods/services are clearly defined,
negotiations are not necessary, and price is the primary evaluation criterion
(for example > 50 percent) for selection.
The Best Value Statutes specify the mandatory criteria that Institutions must
use to evaluate responses to ITBs and determine best value to the
Institution.
2.2.5.2 Request for Qualifications (RFQ) – An RFQ is generally used to procure

professional services.
An Institution may not select a provider of professional services or a group or

association of providers or award a contract for the professional services on
the basis of competitive bids, but must generally make the selection and
award on the basis of demonstrated competence and qualifications to
perform the services for a fair and reasonable price.
However, the procurement of architectural, engineering, or land surveying

services is an exception to the general rule. For architectural, engineering
and land surveying services, an Institution shall:
 first select the most highly qualified provider of those services on the
basis of demonstrated competence and qualifications (no consideration
of price at this point); and
 then attempt to negotiate with that provider a contract at a fair and
reasonable price.
If a satisfactory contract cannot be negotiated with the most highly qualified

provider of architectural, engineering, or land surveying services, the
Institution shall:
 formally end negotiations with that provider;

 select the next most highly qualified provider; and

 attempt to negotiate a contract with that provider at a fair and reasonable
price.
The Institution must continue this process to select and negotiate with
providers until a contract is awarded.
When preparing an RFQ, please use the OGC RFQ templates posted at
https://www.utsystem.edu/ogcprotected/sampledocs.htm (UT Authentication
Required).
2.2.5.3 Request for Proposal (RFP) – An RFP is generally used when best value
competitive sealed bidding is not practicable or advantageous. For example,
an RFP may be used when price is not the primary evaluation criterion and
factors other than price receive significant weight (for example >50%). An
RFP may also be used when subjective (rather than objective) criteria for the
goods/services are used. One of the key differences between the ITB and the
RFP formal solicitation methods is that negotiations are allowed under the
RFP method, but not under the ITB. The RFP method permits Institutions to
enter into discussions with respondents and solicit best and final offers.
The Best Value Statutes specify the mandatory criteria that Institutions must
use to evaluate responses to RFPs and determine best value to the
Institution.
NOTE: When making procurements under the Best Value Statutes,

Institutions are not subject to the Texas Government Code, Chapter 2254,
Subchapter B, requirements related to the procurement of consulting
services and Institutions will follow the Best Value Statutes applicable to
goods/services.
When preparing an RFP, please use the OGC RFP templates posted at
https://www.utsystem.edu/ogcprotected/sampledocs.htm (UT Authentication
Required).
Texas Government Code, Chapter 2254, Subchapter A, Professional Services

“Sample Documents” web page at OGC Purchasing Council web site (UT Authentication
Required)
2.2.6 Request for Information

If the Institution does not have sufficient information with which to develop the solicitation,
the Institution may issue an RFI to gather the necessary data.
An RFI is not a competitive procurement solicitation and a contract may not be awarded
based on an RFI.
An RFI is used primarily as a planning tool to gather information to be used to prepare a

complete and accurate competitive procurement solicitation (including the specifications,
the SOW and other sections of the solicitation) when the Institution does not have the
necessary data. RFI’s are used to identify industry standards, best practices, potential
performance measures, and cost or price structures. RFI’s may also be used to gauge
the level of interest of prospective vendors. An RFI usually includes a description of the
program objectives and a general description of the proposed SOW.
Institutions may not use an RFI to award a contract, but may use the information
developed from RFI responses to develop a formal competitive procurement solicitation.

Institutions are not required to incorporate any of the information provided by RFI
respondents; however, the hope is that RFI respondents will provide information useful in
the solicitation development process.
An RFI sample is posted at https://www.utsystem.edu/ogcprotected/sampledocs.htm (UT

Authentication Required).
If Applicable Laws and University Rules do not direct a specific formal procurement
method, the following chart may provide assistance in selecting the most appropriate
method.

Formal Procurement Methods
Procurement Method Use When Advantages Disadvantages
Best Value ITB Requirements for Award is made to Price is the primary
goods/services must the bidder offering evaluation criterion
be clearly defined. the best value to (> 50%); however,
the Institution. all criteria
Goods/services are mandated by the
available from more Evaluation and Best Value Statutes
than one source. award process are must be
simpler. considered.
Strong competition
for the Does not permit
goods/services negotiations.
exists.
Does not encourage
innovation.
RFQ Selection is made based Emphasizes the Contractor is selected

on qualifications of the competency of the before price is
[Required by Applicable professional in proposed contractors. negotiated.
Laws for professional accordance with
services.] Subchapter A, Chapter
2254, Texas
Government Code
RFP When factors other Permits consideration Lead times for

than price are of factors other than procurement are
evaluated. price. greater than for an
ITB.
Ability to negotiate is Encourages innovations
desirable. and allows customized Evaluations are more
proposals suggesting complex and
Vendor is expected to different approaches to subjective than for an
provide innovative the same business ITB.
ideas. need.
Permits negotiation with

respondents to obtain
the best value for the
Institution.

Texas Government Code, Chapter 2254, Subchapter A, Professional Services
“Sample Documents” web page at OGC Purchasing Council web site (UT Authentication
Required)

2.3 Planning for Contract Content
Clearly identifying general contract objectives, assumptions, and constraints is an

important step in the contracting process. This step may seem obvious, but when
a contract fails, it often fails because expectations were not met and there was
not a true meeting of the minds. A clear understanding of the contract objectives is
essential to success. Sometimes a contract will be part of a larger organizational project.
Institutions must carefully consider how the objectives, assumptions and constraints
integrate into the larger organizational project. Program staff are encouraged to identify
and document potential integration risks so that a strategy for mitigating or
managing those risks may be developed, as practicable.
2.3.1 Needs Assessment

The purpose of the needs assessment is to ensure the contract management team
plans for the correct contract objective. A clear definition provided by program staff of
the contract objectives and purpose will assist in the development of the SOW,
preparing the solicitation, negotiating and drafting contracting documents, and
verifying the performance of the contractor. The SOW, as such, is developed by the end
user, with assistance from the Purchasing Office. This assessment should incorporate
the initial needs assessment conducted by program staff when the determination was
made to contract out for the service.
If the contract purpose is to implement, change or support an Institution’s statutory

duties, it is useful for program staff to identify Applicable Laws, University Rules and
business processes that will be impacted by the contract. If business processes are
not documented, it is often useful to document the business processes. After the legal
requirements and business processes are clearly identified the Institution can assess
how these duties or processes will be changed or impacted. Formal solicitations will be
reviewed by the contract management team, and OGC (when requested by UTEP)
to review concerns or risks identified by the assessment so that the changes and risks
can be managed or mitigated in the contract documents.
The success of many contracts is dependent upon how well business requirements are
documented, communicated and understood by the contractor. Do not assume that the
contractor understands the business of the Institution. Detailed Institution business
processes are frequently incorporated into the SOW in a contract, so Institution program
staff plays a key role in planning and developing the SOW and during contract
administration (including acceptance of deliverables and contract close-out).
2.3.2 Well Formed Procurement Objectives and Purpose

A well-formed statement of the procurement objectives should provide a general
understanding of what will be accomplished by the contractor. Well-formed objectives will
help guide the procurement and contracting process focused and on track.
2.3.3 Technique
Defining the procurement objectives, assumptions, and constraints may sound simple
and straightforward, but this definition process can be complex. Institutions may find
that individuals on the contract management team hold different views as to the
procurement’s objectives. The following questions are intended to assist the team in
clarifying and harmonizing potential divergent objectives and interests. Answering the
following three questions will aid program staff in defining and refining the procurement
objective:
 What goods/ services does the Institution/program specifically need?
 What will fulfilling this need accomplish for the Institution/program?

 How will the Institution/program know when the need has been met?
Each procurement is different. The description of the objective, assumptions and

constraints will vary. A good measure of the quality of the SOW is whether the
procurement objectives, assumptions and constraints make sense and are readily
understandable to an individual that is not familiar with the procurement.
2.3.4 Research
The contract management team may assist program staff in contacting and interviewing
people within the Institution and at other IHEs who have developed solicitations, drafted
contracts and engaged in contract administration for similar procurements, as needed.
For significant and high-risk procurements, document the strengths, weaknesses,
problems and the lessons learned in the interviews. The Internet may be used to search
for copies of solicitations, contracts and oversight documents or products used by others,
review websites for useful information, and check with trade associations and
professional organizations to identify industry practices, methods, standards and rules
that will deliver the goods or perform the services.
Another approach to identifying information regarding the availability, features or

measures for the purchase of goods/services is to publish an RFI. Potential contractors
may respond to the RFI with information that will assist the Institution during the contract
management process.
2.3.5 Business Model

If applicable, a business model should represent a high-level view of how a proposed
significant or high-risk business transaction is expected to work. The business model
may include plans relating to a contract strategy, contract administration (including
the contractor performance monitoring approach), as well as financial assumptions and
limitations. The business model, based on the needs and desired objectives of the
program, should be reflected in the SOW.
2.3.6 Cost Estimates

During the planning stage of the procurement, program staff will develop an estimated
cost of goods/services. The cost estimate will assist program staff and purchasing
personnel in determining which type of procurement method to use. Even if limited by
budget restraints, an estimated cost will provide an idea of the range and duration of
services that the Institution can include in the SOW.
Program staff or purchasing personnel should contact someone within the Institution who
has knowledge in the subject area to assist with the cost estimate. However, if unable to
find anyone with knowledge in the subject area, the Institution may choose to contact
several contractors to obtain pricing information. In obtaining price estimates from
potential contractors, great care should be taken to avoid sharing information that would
provide any contractor with a competitive advantage.

2.3.7 Procurement Lead Time
The table below is provided to assist Institutions and program staff in the planning
process.
SUGGESTED LEAD TIME

TASK FROM CONTRACT START EXAMPLE
DATE
Begin Preparation of Solicitation – 120 to 180 days March 1
Program staff works with
Purchasing Office to develop SOW
and contract language
Submit final solicitation with 90 to 150 days April 1

required approvals to the
Purchasing Office
Advertise and Issue Solicitation 75 to 120 days May 1
Receipt of Responses 90 days June 1
Evaluation of Responses 30 days July 1
*Contract Negotiation (if allowed) 30 to 60 days August 1

and Formation
Contract Execution – all signatures 15-days August 15

are obtained
Performance Begins (generally the 0 days September 1

effective date)
*the time required for contract negotiation and formation may vary widely
To complete procurement, contract formation and execution in a timely manner, program

staff should plan as far ahead as possible for their business needs, contact purchasing
personnel to assist in early planning with respect to an anticipated procurement, and be
committed to timely completion of contract management team tasks.
The lead times above are shown as ranges and are suggestions only. Actual lead times
will vary depending on the specific requirements of the Institution and the complexity of
the procurement. Less complex procurements may be accomplished in less time, while
more complex procurements may require more time. Contact the Institution Purchasing
Office to ascertain more specific lead time requirements. Keep the following points in
mind with regard to lead time:
 During preparation of the solicitation is where the planning and research discussed
earlier pays off. Some Institution employees are more adept at writing SOWs and
solicitation documents. Using experienced employees for these tasks will reduce the
time required to prepare the SOW and solicitation. If possible, the Purchasing Office
should provide program staff with templates to assist in preparation of solicitations. A
link to sample solicitation documents is included in this Handbook. However,
Institutions should modify the templates to meet the Institution’s needs and
requirements.
 The time required for the Purchasing Office to finalize and publish the solicitation can
vary depending on how well the SOW and the solicitation are written by the program

staff. The Purchasing Office will take steps necessary to assure the development of a
complete solicitation with a reasonably acceptable SOW. Purchasing personnel will
also assure that the process allows for necessary competition, and complies with
Applicable Laws and University Rules.
 A 30-day solicitation period is typical for most RFPs. ITBs usually require a 14 to 21-
day solicitation period. That time may be reduced or increased, at the discretion of
the Institution, depending on the complexity of the procurement and the requirements
for the response. For example, if the procurement (including the SOW) is unusual or
complex and requires respondents to submit significant documentation and/or
complicated pricing, additional time for the solicitation period should be allowed. In
addition, if the procurement is unusual or complex, the Institution may receive
requests from respondents for an extension of the submittal deadline.
 Evaluation of the proposals may take more or less time, depending on the size of the
evaluation team and the complexity of the solicitation. The evaluation period could
also increase if oral presentations, discussions or best and final offers are utilized.
 Contract negotiation and formation timeframes will vary significantly depending on

the complexity of the procurement and the cooperation and responsiveness of the
proposer.
 The contract execution timeframe may also differ significantly between a purchase
order and a contract. Depending on the signature requirements of the Institution and
contractor, the contract execution lead time may need to be adjusted.
2.3.8 Technology Contracts

Many of the IR projects initiated by Institutions involve procurement of technology-related
goods/services. Technology-based procurement projects present a unique level of
complexity that requires specific contract management practices, processes, and
strategies.
2.3.8.1 Project Management Practices – As required by Texas Government

Code, Chapter 2054, Subchapter G, Institutions must manage IR projects
based on project management practices that are consistent with DIR
guidelines set forth in Texas Administrative Code, Title 1, Chapter 216,
Subchapter C. DIR guidelines require Institutions to:
1. implement, approve, and publish an operating procedure that

communicates an Institution-wide approach for project management
practices that at a minimum will:
 identify components and general use of project management

practices, citing sources of reusable components adopted from a
state agency or another institution of higher education that satisfy
requirements specified under 1 TAC §216.21; and
 be approved by the president or chancellor of the Institution or

designee.
2. manage IR projects based on project management practices that meet

the following criteria:
 include a method for delivery of IR projects that solve business

problems;
 include a method for governing application of project management

practices;
 be documented, repeatable, and include a single reference source

(e.g., handbook, guide, repository) that communicates how to
effectively apply use of the project management practices
components;
 include a project classification method developed by DIR (ref.

http://publishingext.dir.texas.gov/portal/internal/resources/Document
Library/Project Classification Method.pdf), the Institution, or another
source that:
 Distinguishes and categorizes projects according to level of

complexity and risk (e.g., technology, size, budget, time to
deliver); and
 Defines how to use the project classification method to establish,

scale, and execute the appropriate level of processes;
 include a method to periodically review, assess, monitor, and

measure the impact of project management practices on the
Institution's ability to achieve its core mission;
 accommodate use of other practices and methods that intersect with

application of project management practices; and
 be reviewed and updated at least annually to help ensure continuous

process improvement.
3. identify and adopt one or more standards as a basis for project

management practices to meet project requirements in a minimum of the
following knowledge areas:
 integration management;
 scope management;
 schedule management;
 cost management;
 quality management;
 resources management;
 communications management;
 risk management;
 procurement (acquisition) management; and
 stakeholder management
2.3.8.2 Texas Project Delivery Framework – Institutions must comply with the
Texas Project Delivery Framework (Framework) set forth in Texas
Government Code, Chapter 2054, Subchapter J, when procuring either of the
following types of technology contracts:

 a major IR project, as defined in Texas Government Code
§2054.003(10) to mean:
 any IR technology project whose development costs exceed $1

million and that:
 requires one year or longer to reach operations status;
 involves more than one state agency; or
 substantially alters work methods of state agency personnel or

the delivery of services to clients; and
 any IR technology project designated by the legislature in the

General Appropriations Act as a major IR project; or
 a major contract, defined by Texas Government Code §2054.301(b), to

mean a contract that has a value of at least $1 million under which a
vendor will perform or manage an outsourced function or process.
If necessary, Institutions may contact the Chief Information Officer on

the applicability of Framework requirements to a specific major
contract. Institutions may refer to this page on the DIR website for
detailed information regarding the Framework, including guidance and
tools.
2.3.8.3 Special Procurement Considerations for Technology Contracts –

Institutions must comply with the following specific legal and regulatory
requirements for technology contracts:
4. Please be aware that temporary information technology (IT) staffing

services and certain IT goods (e.g., printer paper) may be available
through TIBH Industries. If so, Texas law may require an Institution to
procure such services or goods from TIBH Industries. For more
information, please see Section 2.2.3.3 of this Handbook.
5. Other best practices and legal requirements applicable to the

procurement of IT are set forth in the “Software Procurement Issues”
guide available as one of the training presentations available from the UT
Purchasing Council website.
6. Before procuring IR technologies under an interagency contract with

another state agency or IHE, an Institution needs to ensure that it has
complied with specific legal requirements which may require the
Institution to first conduct an RFP or ITB for those technologies. These
legal requirements are set forth in Section 2054.119, Texas Government
Code, and 1 TAC Chapter 204. Such requirements are addressed in
more detail in the “Software Procurement Issues” guide identified in the
preceding paragraph.
7. When procuring EIR, Institutions are required to ensure compliance with

state EIR accessibility requirements set forth in Title 1, Section 206.70
and Chapter 213, Subchapter C of the Texas Administrative Code. For
more information, see OGC Bulletin 2006-1 for procured EIR (including
outsourcing) on OGC’s Contracting & Procurement Practice Group
website. (Please note that when procuring EIR, Institutions must require
the vendor to provide applicable accessibility information, as set forth in
1 TAC §213.38(b)).

8. If purchasing or leasing computer equipment (defined to include desktop
or notebook computers, as well as computer monitors or other display
devices that do not contain a tuner), then pursuant to Section 361.965,
Texas Health and Safety Code:
(1) Institutions must require each prospective respondent that offers

to sell or lease computer equipment to certify the respondent's
compliance with the Computer Equipment Recycling Program set forth in
Chapter 361, Subchapter Y, Texas Health and Safety Code (a
prospective respondent’s failure to provide the certification renders that
respondent ineligible to participate in the procurement process);
(2) in considering responses to solicitations for computer equipment,

Institutions must, in addition to any other preferences provided under
Texas law, give special preference to a manufacturer that has a program
to recycle the computer equipment of other manufacturers, including
collection events and manufacturer initiatives to accept computer
equipment labeled with another manufacturer's brand; and
(3) Institutions must require contractors from which Institutions buy

or lease computer equipment to include the following state Computer
Equipment Recycling Program Certification in the contract between the
contractor and the Institution:
State of Texas Computer Equipment Recycling

Program Certification. Pursuant to Section 361.965,
Texas Health and Safety Code, Contractor certifies that
it is in full compliance with the State of Texas
Manufacturer Responsibility and Consumer
Convenience Computer Equipment Collection and
Recovery Act set forth in Chapter 361, Subchapter 7,
Texas Health and Safety Code, and the rules adopted by
the Texas Commission on Environmental Quality under
that Act as set forth in Title 30, Chapter 328, Subchapter
I, Texas Administrative Code. Contractor acknowledges
that this Agreement may be terminated and payment
may be withheld if this certification is inaccurate.
9. Similar requirements apply if Institutions purchase or lease covered

television equipment, which is defined as the following equipment
marketed to and intended for consumers: (a) a direct view or projection
television with a viewable screen of nine inches or larger whose display
technology is based on cathode ray tube, plasma, liquid crystal, digital
light processing, liquid crystal on silicon, silicon crystal reflective display,
light-emitting diode, or similar technology; or (b) a display device that is
peripheral to a computer that contains a television tuner.
Specifically, pursuant to Section 361.991, Texas Health and Safety

Code:
(1) Institutions must require each respondent offering to sell or lease

covered television equipment to certify the respondent's compliance with
the Television Equipment Recycling Program set forth in Chapter 361,
Subchapter Z, Texas Health and Safety Code, before the Institution may
accept the respondent's proposal;
(2) In considering proposals for television equipment, Institutions

must, in addition to any other preferences provided under Texas law,
give special preference to a television manufacturer that (1) through its
recovery plan collects more than its market share allocation; or (2)
provides collection sites or recycling events in any county located in a
council of governments region in which there are fewer than six
permanent collection sites open at least twice each month; and
(3) Institutions must require a contractor selling or leasing covered

television equipment to agree to include the following state Television
Equipment Recycling Program Certification in its contract with the
Institution:
State of Texas Television Equipment Recycling

Program Certification. Pursuant to Section 361.991,
Texas Health and Safety Code, Contractor certifies that
it is full compliance with the Television Equipment
Recycling Program set forth in Chapter 361, Subchapter
Z, Texas Health and Safety Code, and the rules adopted
by the Texas Commission on Environmental Quality
under that Act as set forth in 30 TAC Chapter 328,
Subchapter J. Contractor acknowledges that this
Agreement may be terminated and payment may be
withheld if this certification is inaccurate.
As required by Section 2054.130, Texas Government Code, Institutions must

permanently remove data from data processing equipment before disposing of or
otherwise transferring the equipment to a person who is not a state agency or other agent
of the state. This requirement applies only to equipment that will not be owned by the
state after the disposal or other transfer. To comply with this requirement, Institutions
should follow (1) DIR’s Security Controls Standards Catalog
[http://publishingext.dir.texas.gov/portal/internal/resources/DocumentLibrary/Security
Control Standards Catalog.docx] established under 1 TAC 202.76; and (2) UTS165
Information Resources Use and Security Policy.
Both the DIR Security Controls Standards Catalog and UTS165 set forth requirements for
the removal of data from data processing equipment that exceed the requirements of
Section 2054.130, Texas Government Code.

Texas Government Code, Chapter 2262, Subchapter C Contract Advisory Team
Texas Government Code, §§ 2262.001(5) and 2262.002(a)
Texas Government Code, Chapter 2054, Subchapter G
Texas Government Code, Chapter 2054, Subchapter J

Texas Government Code §2054.003(10)
Texas Government Code §2054.301(b)
Texas Administrative Code, Title 1, Chapter 216, Subchapter C
Texas Administrative Code, Title 1, §216.21
Texas Administrative Code, Title 1, Chapter 213, Subchapter C
Texas Administrative Code, Title 1, §213.38(b)
Texas Administrative Code, Title 30, Chapter 328, Subchapter I
Texas Administrative Code, 30, Chapter 328, Subchapter J
Texas Health and Safety Code §361.965
Texas Health and Safety Code, Chapter 361, Subchapter Y
Texas Health and Safety Code §361.991
Texas Health and Safety Code, Chapter 361, Subchapter Z
Texas Department of Information Resources – Project Delivery Framework web page
Texas Department of Information Resources – Project Management Practices Project
Classification Method
Texas Department of Information Resources – Security Control Standards Catalog
UTS165 Information Resources Use and Security Policy
OGC Bulletin 2006-1 at OGC Purchasing Council web site (UT authentication required)
OGC Purchasing Council web site (some areas require UT authentication)
2.3.9 Exempt from Contract Advisory Team

Institutions are exempt from statutes related to contract advisory team review of
procurement solicitations and contracts.
Texas Government Code, Chapter 2262.002

Texas Government Code, Chapter 2262, Subchapter C Contract Advisory Team

2.4 Information Security; Access to Electronic and
Information Resources
Contracts of any kind (including purchase orders, memoranda of understanding, letters of
agreement or other legally binding agreements) that involve current or future third-party
access to, or creation of, Institution information resources or data, must comply with
UTS165 Information Resources Use and Security Policy (see link below).
In addition, contracts of any kind that relate to electronic and information resources must
comply with UTS150 Access by Persons with Disabilities to Electronic and Information
Resources Procured or Developed by The University of Texas System Administration
and The University of Texas System Institutions.

UTS165 Information Resources Use and Security Policy
Appendix 13 – Sample Contract Terms
Section 6.6 – Contract Terms

2.5 Record Retention
Each Institution must retain in its records each contract entered into by the Institution and
all contract solicitation documents related to the contract. An Institution may destroy the
contract and solicitation documents only after the seventh (7th) anniversary of the date:
(a) the contract is completed or expires; or (b) all issues that arise from any litigation,
claim, negotiation, audit, open records request, administrative review, or other action
involving the contract or documents are resolved.


CHAPTER 3
PREPARING THE SOLICITATION
For procurements above the competitive threshold (see Section 2.2.2 of this Handbook),
after the Institution completes the procurement planning activities, the preparation of the
solicitation document(s) will be coordinated.
 Before attempting to draft a solicitation, purchasing personnel will review Applicable

Laws and University Rules to identify each applicable requirement.
 In addition, before Institution employees involved in the procurement begin work, the
signed non-disclosure statements and conflict of interest statements from those
employees will be obtained. A Sample Non-Disclosure Statement is attached as
APPENDIX 6.
APPENDIX 6 – Sample Non-Disclosure Statement

3.1 Historically Underutilized Business (HUB)
Requirements
HUB requirements are an integral part of the procurement process and are intended to
promote full and equal business opportunity for all businesses. Institutions considering
entering into a contract with an expected value of $100,000 or more, will determine
whether subcontracting opportunities are probable under the proposed contract before
publishing the solicitation and before entering into the contract.
Institutions are required to make a good faith effort to utilize HUBs in state contracts in
accordance with the goals specified in the 2009 State of Texas Historically Underutilized
Business Disparity Study. These goals may be achieved directly by contracting with
HUBs or indirectly through subcontracting opportunities in accordance with Chapter
2161, Subchapter F, Texas Government Code, and 34 TAC Chapter 20, Subchapter B.
If subcontracting opportunities are probable and the contract value may be $100,000 or
more, the solicitation documents will state that subcontracting is probable and require
respondents to submit an HSP.
For all contracts where subcontracting is probable and the anticipated value of the
contract is $100,000 or more, each respondent is required to complete HUB
subcontracting forms and return the completed forms with the response to the solicitation,
or the solicitation will be considered non-responsive as provided in 34 TAC §20.12(28)
Note that for all contracts where subcontracting is not probable, but the respondent
intends to subcontract, the respondent is required to complete the HUB subcontracting
forms and return the completed forms with the response to the solicitation, or the
solicitation will be considered non-responsive as provided in 34 TAC §20.12(28).
Specific HUB procedures are detailed in Rule 20701 Use of Historically Underutilized
Businesses, UTS137 Historically Underutilized Business (HUB) Program and the HUB
Subcontracting Plan documents posted at http://www.utsystem.edu/offices/historically-
underutilized-business/hub-forms.

Texas Administrative Code, Title 34, Part 1, Chapter 20, Subchapter B
Texas Administrative Code, Title 34, Part 1, Chapter 20, Subchapter B, Rule §20.12(28)
Texas Administrative Code, Title 34, Part 1, Chapter 20, Subchapter B, Rule §20.14
The State of Texas Disparity Study 2009 at Texas Comptroller website
Regents’ Rule 20701 Use of Historically Underutilized Businesses
UTS137 Historically Underutilized Business (HUB) Program
HUB Forms at The University of Texas System HUB Office website
The University of Texas System HUB Office website

3.2 Contract Term
A reasonable contract term compliant with Applicable Laws and University Rules should
be included in the solicitation. Individual business needs may inform the decision
regarding length of contract term. Contract terms exceeding five (5) years, including
renewal periods, should be justified based on compelling business needs.
See Section 6.6 of this Handbook for a list of provisions that should be included in a
contract that results from the solicitation, including essential provisions as well as
recommended provisions.
Chapter 6 – Contract Formation

3.3 Background Information
Subject to Applicable Laws and University Rules, the solicitation will provide potential
respondents with all appropriate background information to assist respondents’
understanding of the procurement.
The solicitation will detail any relevant background data and work previously performed
on which the anticipated SOW will build. Previously performed work may be made
available to respondents during the solicitation phase of the procurement, via the Open
Records request process. The solicitation will also specify that the data or work is
provided for information purposes only and respondents are responsible for verifying the
accuracy of the information to the extent necessary to respond to the solicitation and
perform the SOW.
In some solicitations, it may be important to describe existing business processes. If the

existing process will change as a result of the contract, then it may be important to also
describe that modified process.
In addition, it is recommended that all Institutions include the following group purchase
provision in every solicitation:
Group Purchase Authority
Texas law authorizes institutions of higher education (defined by Section

61.003, Education Code) to use the group purchasing procurement method
(ref. Sections 51.9335, 73.115, and 74.008, Education Code). Additional
Texas institutions of higher education may therefore elect to enter into a
contract with the successful Proposer under this RFP. In particular,
Proposer should note that University is part of The University of Texas
System ("UT System"), which is comprised of fourteen institutions
described at http://www.utsystem.edu/institutions. UT System institutions
routinely evaluate whether a contract resulting from a procurement
conducted by one of the institutions might be suitable for use by another,
and if so, this could give rise to additional purchase volumes. As a result,
in submitting its proposal in response to this RFP, Proposer should
consider proposing pricing and other commercial terms that take into
account such higher volumes and other expanded opportunities that could
result from the eventual inclusion of other institutions in the purchase
contemplated by this RFP.

3.4 Proposal Submission Requirements
The solicitation should include one section listing all of the required information that
respondents must submit with their proposal. This will assist respondents to confirm that
all required documentation is submitted. Additionally, any recommended or required
proposal formats should be specified in this section, such as page number limitations,
size of paper, number of hard copies, and number of electronic storage copies.

3.5 Evaluation of Proposals
3.5.1 Criteria
The solicitation will advise respondents how proposals will be evaluated.
The Best Value Statutes require Institutions to use the following mandatory evaluation
criteria to evaluate proposals for goods/services:
 Threshold Criteria Not Scored:

 Ability of University to comply with laws regarding HUBs; and
 Ability of University to comply with laws regarding purchases from persons with
disabilities.
 Scored Criteria:
 Cost of goods/services;
 Reputation of respondent and of respondent's goods/services (“Reputation
Criterion”);
 Quality of respondent's goods/services;
 Extent to which the goods/services meet the University's needs;
 Respondent's past relationship with the University;
 Total long-term cost to the University of acquiring respondent's goods/services;
 Use of material in construction or repair to real property that is not proprietary to
a single vendor unless the Institution provides written justification in the
solicitation for use of the unique material specified [applies only when the
Institution specifies in the solicitation material to be used in construction or repair
of real property in the solicitation]; and
 Any other relevant factors that a private business entity would consider in
selecting a contractor (“Other Relevant Factors Criterion”).
In connection with the Reputation Criterion, CPA administers a Vendor Performance

Tracking System for use by all state agencies. Best practice indicates that Institutions
should use the CPA Vendor Performance Tracking System to evaluate past vendor
performance for the state.
Under the Other Relevant Factors Criterion, Institutions should include additional
evaluation criteria that reflect the essential qualities or performance requirements
necessary to achieve the objectives of the contract. In addition, Institutions should include
a criterion that permits evaluations of any of respondent’s exceptions to the contract
terms and conditions required by the solicitation.
The language within the solicitation will determine the evaluation criteria and the
determinations the evaluation team will make when evaluating proposals, so the
evaluation criteria should not be unduly restrictive. Criteria not included in the solicitation
may not be used in evaluation of proposals, ranking of proposals or selection of a
contractor.
The criteria should allow the evaluation team to fairly evaluate the proposals. The criteria
may take a variety of sources of information into consideration such as respondent’s
written response, oral presentation, past performance and references relevant to the
contract. To ensure fairness in evaluation, the evaluation criteria should reflect only those
requirements specified in the solicitation.
Texas Education Code, §51.9335 (higher education, generally [including UTMB])

CPA Vendor Performance Tracking System web page at Texas Comptroller website

3.5.2 Scoring Weight
There are several schools of thought on how much information to provide respondents
regarding the evaluation criteria. At a minimum, the solicitation will identify the criteria.
Institution policy may require that the solicitation include the scoring weight assigned to
each criterion. Some Institutions may prefer to give more detailed information as to how
each criterion is broken down into smaller units or they may include a copy of the
evaluation scoring sheets with the solicitation. These approaches are also acceptable
options.
When establishing the scoring weight of each criterion, cost may be the most significant
criterion. However, there are solicitations in which the skills and experience of contractor
or other factors may be more important than cost. For example, if a trainer needs a
specific set of skills, the Institution may be willing to pay more for those skills. When
establishing the scoring weight, consider the importance of each criterion to the overall
project. The criteria deemed most important by the Institution should be weighted
higher than the other criteria. The following diagram demonstrates the relationship of
the evaluation criteria and the level of importance.
H IG H H IG H
Skill , Expertise,
Price Independent
Judgment
Level of Importance
Level of Importance
Skill, Expertise, Price

Independent
Judgment
LO W LOW
3.5.3 Requests for Information

Consider the information and other submissions that the Institution requests in
connection with each evaluation criterion. Request that the proposals contain all
information necessary to effectively evaluate each criterion. Specific sections of the
requested proposal may be designed to directly relate to each criterion.

Ensure that the solicitation requests information with which to evaluate each criterion. For
example:
Evaluation Criteria Solicitation Requirement Submission Requirement
Contractor Qualifications Licensed Accountant. Copy of License.
Contractor Experience Minimum of five (5) projects of Detailed information regarding size,
similar size and scope. dollar amount and scope of project for
each individual project and any
additional information necessary to
evaluate contractor experience.
Financial Capability Financially capable of Copy of latest financial statements,

handling a project of this size including balance sheets, Dunn and
and scope. Bradstreet report, etc.
Proposed Services Service delivery strategy Plan should include the number of staff
for how proposed resources and experience level,
services will be implementation strategy, reporting
performed. requirements, response times, etc.
Conversely, all information requested by the solicitation should relate to one of the criteria
to be evaluated. Information that does not relate to at least one of the evaluation criteria
may not be considered.

3.6 Solicitation Requirements
The solicitation will notify respondents of all requirements and clearly state the
consequence of failing to meet these requirements (for example, reduction in evaluation
score or disqualification).
Consider carefully any requirements that may disqualify a proposal. For example, the
HSP is required by Applicable Laws and University Rules; Institutions have no choice but
to disqualify respondent if respondent does not submit the HSP or if the respondent’s
HSP does not demonstrate that respondent used a good faith effort to prepare the plan.
However, if respondent fails to submit a copy of a license, for example, that failure may or
may not be a valid business reason for disqualification and respondents can be given the
opportunity to cure technical deficiencies in some proposal requirements.
3.6.1 Contractor Qualifications

The solicitation should specify the minimum qualifications required for contractor.
Typically, in an RFP, contractor qualifications are less stringent than in an ITB where
price is the primary criterion. At a minimum, the solicitation should require that contractor
have a specified level of experience in providing the type of goods/services solicited.
3.6.2 Posting Security

Institutions must advise respondents in the solicitation if respondents will be required to
post security and, if so, what forms of security are acceptable (e.g., third party bond,
irrevocable letter of credit or cashier’s check). When considering whether or not to require
security, remember that the cost of the security is typically passed on to the Institution by
respondents.
Bonds are one form of security. The three most common forms of bonding are solicitation
response bonds or deposits, performance bonds and payment bonds. Some bonds are
required by statute for specific types of contracts. For example, some contracts with
auxiliary enterprises require bonds.
Texas Government Code, Chapter 2252 Contracts with Governmental Entity, Subchapter
C Private Auxiliary Enterprise Providing Services to State Agencies or Institutions of
Higher Education
Texas Government Code, Chapter 2253 Public Work Performance and Payment Bonds
3.6.3 Monitoring and Oversight

It is important to develop effective contract monitoring strategies appropriate for each
contract to be procured. The methods used to monitor contractor performance should be
outlined in the solicitation because those methods will become important contract terms.
The SOW should set specific deadlines for completion of tasks and a schedule for
submittal of deliverables, required meetings, presentations or other activities. Monitoring
strategies ensure contractor performs as specified in the SOW.
Monitoring is usually the responsibility of program staff and should be balanced and
adequate to meet the Institution’s needs, but limited in type, scope and frequency
sufficient to achieve the desired result, without unnecessarily increasing costs. Overly
restrictive monitoring may interfere with contractor’s ability to perform the work and may
unnecessarily and inadvertently increase costs for the Institution.
Further discussion of contract monitoring and oversight is covered in Chapter 7.

Chapter 7 – Contract Administration

3.6.4 Scope of Work
The Scope of Work is very important as it forms the basic framework for the resulting
contract. The needs assessment discussed in Chapter 2 is the foundation for the SOW.
The SOW is a detailed description of what is required f o r contractor to satisfactorily
perform the work. The SOW should provide a clear and thorough description of the
goods/services to be procured. If appropriate, describe the relevant environment where
the goods/services will be used.
The success or failure of a contract can often be linked to the adequacy or inadequacy
of the planning, analysis and thoroughness of the SOW. Time spent planning, analyzing,
and drafting the SOW will ultimately save time, resources, and money and improve the
quality of the goods/services procured.
It is important that the SOW:
 Be clearly defined;
 Be unbiased and non-discriminatory so that all potential respondents have a level
playing field;
 Encourage innovative solutions to the requirements described, if appropriate;
 Allow for free and open competition to the maximum extent reasonably possible; and
 Secure the best value goods/services for the Institution.
3.6.4.1 Organization – One way to organize the SOW is to divide each of the
procurement objectives into logical parts, such as phases. Phases may
include (1) planning, development, implementation, operation, and
management or (2) planning, equipment installation, testing, operation and
maintenance. The specific phases should support the subject matter and
purpose of the contract. Phases may be further divided into smaller
segments of work.
3.6.4.2 Define Institution’s Role – The contract, not the SOW, should clearly define
the role the Institution will play in the work to be performed and any specific
contributions or resources the Institution will provide.
The contract (not the SOW) should also define the roles of Institution staff that
will administer the contract and monitor contractor’s progress.
3.6.4.3 Specification Types – Specifications are the primary means of

communication between an Institution and a vendor. A specification is a
description of the goods/services an Institution seeks to procure. A
specification also describes goods/services that must be proposed to be
considered for an award. Specifications should include deliverables. Each
deliverable should include the following elements:
 Description of the work.

 Standard for performance.
 Test condition, method or procedure to verify that the deliverable meets
with the standard.
 Method or process to monitor and/or ensure quality of the deliverable.
 Acceptance process for each deliverable.
 Compensation structure that is consistent with the type and value of work
performed.
 Contractual remedy, if appropriate.

Specifications control quality of the goods/services, the suitability of the
goods/services for the business purpose, and the method of evaluation used
in determining best value and in making a contract award.
3.6.4.4 Characteristics of Effective Specifications –
SIMPLE: Avoid unnecessary detail and complexity, but be complete

enough to ensure that goods/services procured will satisfy the intended
purpose.
CLEAR: Use terminology that is understandable to the Institution and

potential respondents. Use correct spelling and appropriate sentence
structure to eliminate confusion. Avoid legalese and jargon when possible.
ACCURATE: Use measuring units that are compatible with industry

standards. All quantities and packing requirements should be clearly
identified.
COMPETITIVE: Identify at least three (3) commercially available brands,

makes, or models (whenever possible) that will satisfy the intended
purpose. Avoid unneeded “extra” features that could reduce or eliminate
competition and increase cost.
FLEXIBLE: Avoid inflexible or narrow specifications which prevent the

acceptance of a response that could offer greater performance for fewer
dollars. Whenever possible, use approximate values for dimensions,
weight, speed, etc., if the approximations will satisfy the intended purpose.
3.6.4.5 Performance-Based, Design and Mixed Specifications – Performance-

based specifications focus on outcomes or results of the required
goods/services rather than how the goods/services are produced.
Conversely, design specifications outline exactly how contractor must make
the goods or perform the services. Performance-based specifications allow
respondents to bring their own expertise, creativity and resources to the
procurement process without restricting respondents to predetermined
methods or detailed processes. This may allow respondents to provide the
goods/services at lower cost. Performance-based specifications also shift
some risk to contractor. For example, if an Institution utilizes a design
specification for a unit of laboratory equipment and the equipment ultimately
does not satisfy the business need for which it was procured, then the results
may be the fault of the Institution’s specifications. However, if the Institution
used performance-based specifications, the unit must perform in accordance
with the specifications. If the equipment does not perform, then contractor
may be at fault.
Performance-based specifications may permit respondents maximum

flexibility when satisfying the requirements of a solicitation. Design
specifications may limit respondent’s flexibility.
Mixed specifications include both performance-based specifications and

design specifications. Consider the purchase of media and advertising
services:
 Performance-Based Specification: Contractor shall provide Institution

media services which shall increase applicants by a minimum of 3
percent in the next fiscal year. Out-of-state applicants shall increase a
minimum of 10 percent. These figures will be measured based on the
Institution’s prior year applications data-base.

 Design Specifications: Contractor shall conduct at least seven (7)
media campaigns during the fiscal year. Three of these campaigns must
be directed to out-of-state applicants.
 Mixed Specifications: Contractor shall provide Institution media

services which shall include a minimum of seven media campaigns
during the fiscal year. Media services shall result in a minimum increase
in applicants of 3 percent in the next fiscal year based on the Institution’s
prior year applications data-base.
Performance-based specifications focus on results. Design specifications

focus on resources. If the Institution uses design specifications only,
contractor may provide all seven campaigns, but the desired result of
increased applicants may or may not occur.
As with all performance measures, Institutions must ensure that performance

specifications are reasonable and measurable. Note that performance-based
specifications clearly outline how the results will be measured. While
performance-based specifications are sometimes preferable, the expertise
required to conduct the contract planning, procurement and management
may be different than the expertise needed for design specifications.
Design specifications are appropriate for simple purchases of goods such as

paper, pens, furniture, and services such as temporary staff. Usually these
purchases are accomplished by defining specific quantities and
specifications for the goods/services, such as price per unit as well as
requirements for the time, place and manner for delivery and acceptance.
Institutions may include performance incentives in contract terms. Incentives

may be used for superior performance that exceeds contract goals. In the
prior example, if Institution applicants increased by 5 percent, the contract
may provide a pre-established monetary incentive for increases above the
required 3 percent.
It is not always beneficial to use performance-based specifications. Consider

the following examples of when to use performance and design
specifications:
 New installation, entire system provided by one vendor: Consider

using performance-based specifications to allow the contractor to provide
the system that provides best value to the Institution.
 New installation of multiple system components provided by

various vendors: Consider using design specifications to ensure that
all of the components (for example, HVAC controls, chillers and boilers)
that must work together will work together.
 Expansion of an existing installation: Consider using design

specifications because the new equipment must connect and integrate
with the existing system.
3.6.4.6 Quantify Goods/Services – Quantify the volume, amount, and frequency

required for goods/services to meet specifications.
3.6.4.7 Standards for Goods/Services – The SOW should identify the quality of
goods/services required for acceptable performance. For example: All
dusting must be performed so as to ensure cleanliness of surfaces, as

determined through inspection by the contract administrator.
3.6.4.8 Established Industry Standards – If established industry standards

(international, national, state, local) are available, those standards may be
used to define the contract performance requirements. Examples of national
and international standards include American National Standards Institute
(ANSI), American Society for Testing and Materials (ASTM) and International
Organization for Standardization (ISO). Using established standards provides
consistency in measuring acceptability, quality or accuracy of contractor’s
performance.
Contracts will often incorporate by reference “standards” maintained by

entities representing particular industries such as Generally Accepted
Accounting Principles (GAAP), Institute of Electrical and Electronic Engineers
(IEEE) or ISO. If a standard is incorporated by reference, consider
specifically identifying by number the standards of performance that relate to
each activity, task, work product or deliverable. Simply referring to “industry
standards” is usually inadequate.
Warranty Standards – An express warranty is a standard that is expressly

included in the contract language to establish a performance standard for the
work. The contract does not generally need to use the words “warrant” or
“guarantee” to create an express warranty. Neither does contractor need to
have the specific intention to make a warranty. A simple affirmation of the
value of the goods/services or a statement merely purporting to be
contractor’s opinion or commendation of the goods/services does not create
a warranty.
Unless disclaimed, excluded or modified by the language of the contract,

warranties or standards may be implied in a contract by a statute or by case
law. For example, in the sale or lease of some types of goods there may be
implied statutory warranties, such as: a warranty of title, a warranty that the
goods will be merchantable, or a warranty that the goods are fit for a
particular purpose. If an implied warranty is important to the quality of the
goods/services, the best practice is to make the implied warranty an express
warranty by including the warranty in the language of the contract.
Include clear standards for contractual performance or an express warranty

describing the standard of performance in the SOW or contract.
3.6.4.9 Reporting – Status reporting, performance and activity reporting are terms
used to describe information that a contractor must provide to show the
status of a contract. These terms must be defined in the SOW or the
contract, and the definition of each should include content, frequency and
audience for each report.
A status report describes the level of completion of the work and/or the cost
of the contract. Percent complete is often used to describe status. For the
report to be useful, a baseline should be established for timelines and
budgeting.
If deliverables are specified, include the format of the deliverable and the
number of copies required. For example, if a deliverable is a final project
report, state how many copies of the report are needed and specify the
format of the electronic copy. State all items that must be included in the
report. These requirements are usually addressed in the SOW within the
solicitation.

If vendor-provided information is anticipated to be reported as part of the
Institution’s performance measures, ensure that there are requirements that
allow for data verification and that the data corresponds with the data
required for the performance measures.
If possible, include in the solicitation the desired format or a sample of any

required reports.
3.6.4.10 Inspection and Testing – The SOW should provide for inspection and
testing. The Institution should include inspection and testing of
goods/services purchased under the contract to ensure compliance with the
specifications of the solicitation and the contract.
Testing should be performed on samples submitted with the proposal and

samples taken from regular shipments. All costs of inspection and testing
should be borne by contractor. In the event the goods/services tested fail to
meet or exceed all conditions and requirements of the solicitation and
contract, the goods/services should be rejected in whole or in part at
contractor’s expense. Latent defects may result in cancellation of a contract
at no expense to the Institution. Institutions should contact legal counsel with
any questions regarding latent defects.
3.6.4.11 Final Acceptance – The SOW should clearly define how the Institution will
determine that the contract has been satisfactorily completed. The SOW sets
a standard for acceptance of the deliverable and establishes a procedure to
receive or reject the deliverable based on specific factors.
Tracking the status of several phases, segments and deliverables, where

each deliverable may have multiple tasks, activities, and products, can be
challenging. A formal acceptance process for each step in a contract allows
the contract manager and the contractor to know the conditions of contract
performance.

3.6.4.12 Additional Considerations – Listed below are additional issues which
should be considered when preparing the SOW. These items may affect
pricing, so it is important that respondents are aware of these requirements.
The SOW answers – who, what, when, where, why and how. If these
questions are answered, it is a reasonable assumption that the SOW is
complete.
 Data security and privacy requirements;
 Accessibility of electronic and information resources requirements;
 Licenses or permits required;
 Use of Institution equipment;
 Storage space for contractor materials/supplies, including space license

(if appropriate);
 Intellectual property/use of marks/copyright issues;
 Access to the Institution’s premises;
 Subcontractor requirements;
 Insurance requirements; and
 Conflicts of interest/organizational restrictions.

“Scope of Work Issues” Training Presentation at OGC Purchasing Council web site (UT
Authentication required)
APPENDIX 13 – Sample Contract Terms
Chapter 2 - Planning
Section 6.6 – Contract Terms

3.7 Payment Types
As with specification types, there are also various payment types. Payment method
should be consistent with the goods/services delivered. Payments should be structured to
fairly compensate contractor and encourage timely and complete performance of work.
As a general rule, payment should be approximately equal to the value of the completed
work.
Institutions may not pay for goods/services not received.
Institutions also may not use funds in or outside of the state treasury to pay the vendor if
CPA is prohibited from issuing a warrant or initiating an electronic funds transfer to the
vendor (ref. Section 403.055 and Section 2107.008, Government Code).
Institutions may only make prepayments if the appropriate Institution authority analyzes
the facts surrounding the transaction and makes a written determination that (1) there is,
in fact, a public purpose for any pre-payments required by the contract, and (2) there are
sufficient controls over the pre-payments, contractual or otherwise, to ensure that the
public purpose is actually achieved. This written determination must identify the facts
supporting the determination and be retained in the procurement file.
The following table illustrates the various common types of payments and how each
applies to various types of contracts:

COMMON PAYMENT METHODS
Payment Type Commonly used for: Payment based on:

Cost Interagency Cooperation Agreements Reimbursement of allowable costs in accordance
with the approved budget.
Reimbursement Interlocal Cooperation Agreements
Some contracts may combine payment methods
and include cost reimbursement of contractor’s
expenses (see Note 1 below).
Cost Plus Materials contract where the materials are unknown Contractor’s cost plus a percentage of cost or cost
at the time of contract award. plus fixed fee.
Incentives
Example: Job order contracts. This payment method is discouraged because
there is no incentive for contractor to minimize
costs.
Fee For Service Contracts where a fee can be established per unit of Number of completed good/service units.
goods/services.
Example: When providing flu shots to employees,

unit of service may be one flu shot.
Firm Fixed Contracts where a firm fixed price can be Firm fixed price agreed upon at the time the
established for goods/services to be provided. contract is awarded.
Price
SOW must provide clear and accurate specifications. In this pricing method, contractors carry any pricing
risk because the fee does not change, regardless
Examples: Contracts for common goods/services, of costs incurred by contractor to provide the
including office supplies and furniture. goods/services. This risk may cause contractors to
inflate the quoted price to protect themselves from
fluctuations in material/labor costs.
Firm Fixed Contracts where a firm fixed price can be Firm fixed price subject to escalation based on a
established for goods/services to be provided, fixed percentage or an index such as the
Price with including longer term contracts and contracts where Consumer Price Index.
Escalator the costs of materials/labor are subject to market
fluctuations. Contractors are less likely to inflate the quoted
price to protect themselves against possible
Examples: Lumber, steel, fuel and paper contracts. increases in materials/labor because the contract
allows for market adjustments to the price.
Progress Contracts where the SOW is completed in phases or Pre-established deliverables.

stages.
Payments Deliverables must be measurable (see Note 2
Examples: Consulting services and construction. below).
Time and Service contracts under which the volume of labor/ Number of hours worked for a specific SOW plus
materials required to perform the work are difficult to cost of materials subject to maximum fee cap.
Materials with forecast.
Fee Cap Also consider establishing fixed labor fees for
Examples: Electrician, plumber and carpenter specific units of labor such as “installation of 120
services. volt outlet.”
Note 1: Institutions may reference the state Travel Allowance Guide

published by CPA at https://fmx.cpa.state.tx.us/fm/pubs/travallow/index.php
when including travel costs as an allowable expense within a contract.
Note 2: For example, a contractor is hired to conduct an analysis of a

specific business process and prepare a report with recommendations
for improvement. Contractor will be paid 30 percent of the contract
amount upon receipt and acceptance of the analysis and the remaining
70 percent upon receipt and acceptance of the report and
recommendations. The contract must specify what documentation will be
required to evidence completion of each deliverable, such as paper and
electronic copies of the analysis and the report. Be careful not to shift the
financial risk to the Institution by paying contractor for more than the
amount (or percentage) of work contractor has actually completed.

Also consider the importance of the deliverable. In this example, the Institution
could be asked to pay contractor 80 percent of the contract amount upon
completion of the analysis because the analysis takes a significant amount of
labor. This increase in the payment for the analysis shifts financial risk to the
Institution because the Institution may pay for 80 percent of the work, but will
have nothing to show for the dollars spent if contractor fails to complete and
submit the report and recommendations.
Best practice suggests that each payment should reflect the value and
importance of the work completed. Institutions should manage financial risk by
dividing the overall contract payments into smaller amounts that each reflects a
small increment of the work as it is completed. If there is a dispute, the scope of
the dispute may be contained to a discrete deliverable (rather than the entire
contract) since the amount of money associated with each deliverable is known
and limited. Keep in mind that each of the deliverables has the ability to shift risk
between the Institution and contractor.
Texas Government Code §§ 403.055 and Section 2107.008

Travel Allowance Guide (Textravel) at Texas Comptroller website
Chapter 6 – Contract Formation
Section 6.9 – Required Check of Vendor Hold Status
Section 7.4 – Invoices and Payments

CHAPTER 4
PUBLICATION OF THE SOLICITATION
4.1 Advertising
Solicitations will be posted publically on the Internet via the Electronic State Business
Daily (ESBD) (an Internet based website for posting state procurement opportunities).
The ESBD is available on the Internet at http://esbd.cpa.state.tx.us. Solicitations are also
posted on The University’s Sourcing Manager website at
https://adminapps.utep.edu/sourcing/.
When marketing a solicitation, the Purchasing Office will consider the types of
goods/services being procured. For example, effective advertising for goods/services
may be different from effective advertising for professional services. The Purchasing
Office should refer to Applicable Laws and University Rules to ensure compliance.

Texas Government Code, §§ 2155.083 and 2155.083(n)

4.2 Solicitation Announcements
Announcements are an efficient way to reduce mailing costs when publishing large
solicitations. An announcement is a brief notification sent by the Institution to potential
proposers (including potential HUB proposers) advising of the upcoming procurement
opportunity and providing a link to the solicitation.
The Institution’s HUB Coordinator should be notified of significant procurements so that

announcements can be shared within the HUB community.

4.3 Communication with Respondents
All communication with potential respondents should be made only through the
Purchasing Office or the HUB coordinator. The solicitation should provide only
Purchasing Office and HUB coordinator points of contact with acceptable forms of
communication such as email and address. Although purchasing staff or HUB coordinator
may not be able to answer technical questions, they will obtain the responses from the
appropriate program staff and ensure that the information is communicated to all potential
respondents.
Program staff should not have contact with potential respondents outside of the pre-
proposal conference. If a potential respondent contacts program staff, program staff
should politely decline to discuss the solicitation and forward the inquiry to the purchasing
department.
A respondent that contacts someone other than designated staff in the purchasing
department or the HUB office regarding the solicitation may be disqualified so long as the
solicitation notifies respondents of this possible penalty.
Sample Solicitation Templates on “Sample Documents” web page of OGC Purchasing

Council web site (UT Authentication required)
OGC Purchasing Council web site

4.4 Written Questions
The solicitation may invite respondents to submit written questions. This option may
be in addition to or in lieu of a pre-proposal conference. The date and time for
submission of written questions should be specified in the solicitation. Written
questions must be submitted by mail, facsimile, email or hand delivery.
If the solicitation is posted on the Internet (including ESBD), the questions and
answers should be posted, in the form of a written addenda, with the solicitation as they
become available.


4.5 Pre-Proposal Conferences
Institutions may conduct either voluntary or mandatory pre-proposal conferences.
Carefully consider the use of mandatory conferences. Mandatory conferences may raise
concerns because requiring respondents to be at a certain place at a given time may limit
competition. Conferences should be mandatory only if there is a reasonable business
justification for the requirement. For example, a mandatory pre-proposal conference may
be appropriate if (1) an on-site visit is required to have a full understanding of the
procurement or (2) the solicitation is so complex that attendance is critical for potential
respondents to fully understand the procurement. Institutions should document the
justification for a mandatory conference in writing.
 Pre-proposal conferences provide a forum for Institution staff (including Purchasing

Office and HUB office staff) to explain the solicitation (including HUB requirements)
and respond to questions regarding the solicitation. Conferences provide a forum for
Institutions to provide additional information, schematics, plans, reports, or other data
that is not easily transferable or distributed through hard copy.
 Conferences allow potential respondents to address specific questions or concerns
with the solicitation, including questions about HUB compliance.
 Conferences are especially important when there is a need for an on-site visit prior to
submitting proposals. Note that, in lieu of a conference, in some cases site
photographs or a slide show may be sufficient. Photographs or a slide show may also
be an alternative to taking respondents to multiple physical locations. Copies of
photographs and slide shows should be provided to all respondents and posted on
the Internet.
 If issues are identified at the conference, the Institution may need to publish an
addendum to the solicitation.
 All potential respondents must receive the same information.
 Subcontracting relationships may develop through the contacts established by
potential respondents at the conference.
The solicitation must indicate the date, time and location of the conference. The
conference is usually held approximately ten (10) days after the solicitation is published.
All conference attendees should be documented through a sign-in sheet. A sign-in sheet
is especially important if the conference is mandatory because the sign-in sheet is the
document used by the Institution to verify respondent attendance at the conference.
The Purchasing Office should facilitate and conduct the conference, in coordination with
the program staff. The Purchasing Office should answer procurement related questions,
while the program staff should respond to the technical questions. If it is not possible to
answer all questions at the conference, unanswered questions should be answered in
writing as soon after the conference as possible. Depending on the significance of the
questions asked and answers given, the Purchasing Office may consider posting the
questions and answers for the benefit of potential respondents unable to attend the
conference. If clarification of the solicitation is necessary, addenda to the solicitation may
be issued.
4.5.1 Written Addenda

All changes to solicitations must be made through written addenda. Each addendum
must be provided to all conference attendees and posted on the Internet where it may be
accessed by all other potential respondents.
When issuing an addendum, consider the amount of time remaining until the opening
date of the solicitation. It may be necessary to extend the proposal deadline – which must
also be done through a written addendum.

4.5.2 Sample Agenda
A typical agenda for a pre-proposal conference follows:
 Opening. Institution representatives introduce themselves and explain their role in

the procurement.
 Introductions. Attendees introduce themselves and identify the company they

represent.
 Solicitation Review. Solicitation is reviewed section by section. It is not necessary or

recommended to read the entire document, but the entire document should be
covered. Questions should be answered as each section is discussed.
 HUB Requirements. HSP requirements and resources for answering HUB questions
should be discussed.
 Closing. Summarize any solicitation changes to be included in an addendum. List

any unanswered questions requiring written response after the conference. Remind
attendees that verbal comments or discussions about the solicitation are not binding
and that all changes to the solicitation must be in the form of a written addendum.

APPENDIX 7 –Sample Pre-Proposal Conference Guidelines

4.6 Solicitation Submission and Opening
The solicitation must indicate the submission deadline (including date and time) and
location for submission.
The solicitation should also indicate whether or not the Institution will hold a public
opening of proposals. The Institution may choose not to hold a public opening.
Depending on the solicitation, a public opening may include a public reading of
respondent names or pricing tabulations prior to award of the contract.


CHAPTER 5
EVALUATION AND AWARD
Institutions must evaluate responses in a fair and impartial manner consistent with the
solicitation, Applicable Laws and University Rules. As discussed in Chapter 3, the
solicitation should include a general description of the evaluation process, the evaluation
criteria and, at the Institution’s discretion, the scoring weight.

5.1 Evaluation Team
The evaluation team should be comprised of individuals who are stakeholders in the
goods/services being procured and/or individuals who have necessary technical or
program expertise. The evaluation team will include a representative of the Purchasing
Office who is usually the evaluation team leader and serves as a non-voting member.
The evaluation team members are typically recommended by program staff. It is
important to select members who understand the needs of the program office and the
Institution, and who understand the desired outcome of the procurement. The evaluation
team should bring together as much knowledge as possible to ensure selection of the
vendor that provides the best value to the Institution.
The Purchasing Office will coordinate with evaluation team members to assure that they
have the opportunity to participate in preparing the solicitation, especially the evaluation
criteria and assigned scoring weights. The members should fully understand the
requirements of the solicitation and must be able to critically read and evaluate
responses and document their judgments clearly, concisely and consistently in
accordance with the evaluation guide.
The recommended size of an evaluation team is three to five members. To avoid

potential individual bias, the team should not be less than three members. Complex
projects may require more than five members or even additional teams. Coordination and
management of the evaluation process becomes more difficult as the size and number of
teams increase.

5.2 Scoring Matrix
The scoring matrix, which should be a part of a well-developed evaluation guide, is used
by the evaluation team members to score the individual responses based on the
evaluation criteria defined in the solicitation. The scoring matrix should be completed
prior to publishing the solicitation because, when developing the scoring matrix, it may
become apparent that the solicitation needs to be supplemented or revised. If time does
not permit the scoring matrix to be completed prior to publication, the scoring matrix must
be completed prior to the opening and review of the solicitation responses. Failure to
complete the scoring matrix before the opening of responses may subject the
procurement to protests.
A Sample Proposal Score Sheet is attached as APPENDIX 8.
Chapter 3 – Preparing the Solicitation

APPENDIX 8 - Sample Proposal Score Sheet

5.3 Responsive Proposals
Prior to opening proposals requiring HSPs, the HUB office will review the HSPs for
compliance with HUB requirements. If an HPS is not compliant, the proposal should be
returned unopened to the respondent. If an HSP is compliant, the HUB office will notify
the Purchasing Office and the proposal may then be opened.
After all HUB compliant proposals are opened and recorded, the Purchasing Office
determines if the proposals submitted are r esponsive. This is sometimes referred to
as an administrative review. At a minimum, this includes review of the signed
execution of offer, responses to respondent questions or similar documents, HSP and
any other required documents such as bonds and certificates of insurance. In
addition, the Purchasing Office will review the proposals to ensure that minimum
qualifications are met. The Purchasing Office is responsible for assuring that all
appropriate reviews necessary to determine responsiveness are completed.
An administrative review checklist is a good tool for ensuring the proposals are
responsive. A Sample Administrative Review Checklist is attached as APPENDIX 9.
The evaluation team will only be provided with those proposals deemed responsive.
APPENDIX 9 - Sample Administrative Review Checklist

5.4 Evaluation Team(s) Training
In advance of receiving responses, the Purchasing Office will provide training for the
evaluation team to outline the team’s duties and responsibilities in accordance with the
material contained in a well-developed evaluation guide. This may be a separate meeting
or may be held in conjunction with and just prior to the evaluation. Evaluation Team
Guidelines and Purchasing Office Responsibilities are attached as APPENDIX 10.
Team members should be instructed on their responsibilities including the critical nature
of confidentiality to the integrity of the evaluation process.
Each evaluation team member should submit a signed Non-Disclosure Statement to the
Purchasing Office prior to engaging in any discussion about, or having access to
response documents. A Sample Non-Disclosure Statement is attached as APPENDIX
6.
The Purchasing Office will review all evaluation criteria with the team members and
explain how the evaluation process will be conducted.
Communication between team members during the evaluation must be limited to asking
questions of the Purchasing Office and, if authorized, obtaining information from technical
experts (for example, insurance and accounting experts) to better understand the
response contents and requirements.
Each response must be evaluated individually against the requirements of the solicitation.
Each solicitation is considered independently of all other solicitations.
APPENDIX 6–Sample Non-Disclosure Statement

APPENDIX 10 – Evaluation Team Guidelines and Purchasing Office Responsibilities

5.5 Single Responses
 To determine why an Institution receives only one response to a competitive
solicitation, the Purchasing Office or other appropriate employee of the Institution
should re-review the solicitation for any unduly restrictive requirements.
 Potential respondents may be contacted to determine why they did not submit a
response
If it is determined that there were unduly restrictive requirements in the solicitation, the
Institution may decide to re-advertise the solicitation.
Otherwise, the Institution should consider the reasons that other responses were not
received and determine if it is in the best interest of the Institution to make an award, to
re-advertise with a revised solicitation, or to determine if an exclusive acquisition
justification is required.

5.6 Proposal/Bid Evaluation
Once responses have been reviewed and found to be responsive by the Purchasing
Office, the Purchasing Office will provide members of the evaluation team copies of the
qualified responses. Some evaluations are conducted with the evaluation team in the
same room evaluating the responses at the same time. This may facilitate questions by
team members to purchasing staff or technical experts.
Alternatively, evaluation team members may work from their respective workspaces. In
that case, purchasing staff and technical experts need to be available to answer technical
questions regarding responses. All questions must be presented to the Purchasing
Office. The Purchasing Office may seek out the answers to questions. Evaluation team
members should only ask questions in the areas related to the evaluation criteria
presented in the solicitation.
Once the evaluations are complete, the Purchasing Office will collect all of the evaluation
score sheets and the responses. The Purchasing Office totals the score sheets and
verifies the accuracy of calculations for input into the final evaluation formula.
If it is apparent that one or more team members’ evaluations differ significantly from the
majority, the Purchasing Office will contact the team member(s) to discuss the situation to
ensure the criteria were clear and that information was not overlooked or misunderstood.
If after this discussion, a team member feels that he/she did not understand the criteria,
the requirement, or missed information that was included in the response, the member, at
his own discretion, may revise his evaluation score. Under no circumstances should any
team member attempt to pressure other members to change evaluation scores.
It is recommended that the cost or price information be scored by the Purchasing Office
as cost/price is an objective criterion that should be calculated through predetermined
formulas outlined in a spreadsheet.
A Sample Proposal Score Sheet is attached as APPENDIX 8.
APPENDIX 8 - Sample Proposal Score Sheet

5.7 References
The evaluation team may verify references included in the response and conduct any
other reference or credit check deemed appropriate. Or, reference verifications may be
performed by the Purchasing Office that would contact all references and attempt to
obtain answers to questions developed by the evaluation team.
All reference checks should be documented in writing. The same script or format of
questions should be used when conducting reference checks so that the results are
consistent and fair to all respondents. A Sample Reference Check Form is attached as
APPENDIX 11.
Sometimes it is difficult to obtain information from references, either because references

have a policy of not providing information or because they cannot be reached in a timely
manner.
Depending on the importance of the procurement, Institutions may want to consider using
the following statement in the solicitation in lieu of checking references for all
respondents:
Institution reserves the right to check references prior to award.

Any negative responses received may be grounds for
disqualification of the proposal.
By including this statement, Institutions are not required to check references but may
choose to do so. Whether or not to check references as part of the evaluation is at the
discretion of the Institution based on the individual procurement. Note that if references
are verified for one respondent, then references should be verified for all respondents.
Best practice indicates that the evaluation team may use the CPA Vendor Performance
Tracking System at http://comptroller.texas.gov/procurement/prog/vendor_performance
as a helpful tool to evaluate past vendor performance for the state.
Vendor Performance Tracking System at Texas Comptroller web site

APPENDIX 11 - Sample Reference Check Form

5.8 Oral Presentations/Discussions
Oral presentations or discussions are conducted at the option of the Institution. Oral
presentations and discussions provide an opportunity for respondents to highlight the
strengths and unique aspects of their response and to provide answers to questions
the Institution may have regarding the response.
Demonstrations of product functionality are recommended, when appropriate.

Demonstrations may be useful for information technology procurements.
Oral presentations and demonstrations should be fair to all parties. The time allowed and
the format should be the same for all presenters.
5.8.1 Determining Competitive Range

Oral presentations and demonstrations may be scheduled for all respondents or limited
to only the top ranked vendors in the competitive range. The Institution should look for a
“natural break” in the scores that will determine the competitive range. The competitive
range should consist of those responses determined to be reasonably considered for
award.
An example of how to determine competitive range is demonstrated below:
Evaluation Evaluation Evaluation

Scores - Scores Scores -
Scenario 1 - Scenario 2 Scenario 3
97 97 97
93 93 96
90 82 90
89 81 89
88 79 88
65 68 85
NOTE: In Scenario 1, the top five respondents are in the competitive

range.
In Scenario 2, the competitive range could include the top two

respondents or the top five respondents.
In Scenario 3, there is a six-point difference between the 2nd and 3rd

score, with the remaining scores close behind. Therefore, the best option
is to include all six respondents.

5.9 Best and Final Offers
After oral presentations or demonstrations are completed, discussions between the
Institution and respondent may be held. If discussions are held and the Institution intends
to permit respondents to revise their responses, all respondents within the competitive
range and that participated in oral presentations or demonstrations will be given equal
opportunity to discuss and submit revisions to their responses.
Revisions of proposals are normally accomplished by formally requesting best and final
offers. The request sets a deadline for receipt of BAFO responses and provides
instructions regarding information and documentation that should be submitted.

5.10 Negotiations
Before negotiating with respondents, Institutions should closely review the terms of the
solicitation to confirm that negotiation is permitted. The ITB procurement method does
not generally allow negotiations. However, the RFP and RFQ methods generally do allow
negotiations.
During negotiations Institutions may not use “technical leveling” and/or “technical
transfusion” techniques. “Technical leveling” means helping a respondent bring their
proposal up to the level of other proposals through successive rounds of discussion,
usually by pointing out proposal weaknesses. “Technical transfusion” means disclosing
technical information or approaches from one respondent’s proposal to other competitors
in the course of discussion.
In addition, the following disclosures are prohibited:
 disclosing competing respondents’ cost/prices (even if the disclosure is made without

identifying the vendor by name); and
 advising a respondent of its price standing relative to other respondents.
Care must be taken to avoid making substantial changes to the Institution’s contracting
objectives, requirements and specifications set out in the solicitation. If the contracting
objectives, requirements or specifications are substantially changed through the
negotiation process, the pool of contractors who may have been interested in submitting
a response may change. Additional contractors may have competed, if the changed
objectives, requirements and specifications were included in the original solicitation.
Whenever it appears that contracting objectives, requirements or specifications may have
been changed, legal counsel should be consulted before proceeding further.
Institutions may continue with negotiations until the best value for the Institution is
achieved and an award to one or more respondents is made.
NOTE: A request for a respondent to clarify its proposal is not the same as negotiation of
the terms of respondent’s proposal. However, when seeking clarifications, Institutions
should not give one respondent an advantage over another and should extend the same
opportunity to each respondent.
5.10.1 Negotiation Strategies

Negotiation strategy should be tailored to suit the particular facts and circumstances of
the specific procurement. When establishing negotiation strategy, care should be taken to
avoid giving the respondents a cost or price that must be met to proceed in the selection
process. Suggesting a cost or price could keep the competitive process from generating
the cost or price that is the best value to the Institution. Also, be mindful that disclosing
competitor costs or prices is not allowed, even if done without tying the cost or price to
the specific vendor. In addition, a respondent cannot be told its price standing relative to
other competitors.
Negotiation is based on the willingness of each party to compromise. In any contract,

there are usually terms or conditions that each party may be willing to relinquish. Before
conducting negotiations, the Institution should identify those terms or conditions that are
essential and those that are desirable but negotiable. Like other parts of the contract
management process, planning is essential to conducting a successful negotiation.
The best practice is to meet with members of the contract management team and
divide the terms and conditions into groups. Identify the terms and conditions that are
essential to the contract. These are the terms or conditions upon which the Institution
is either unable or unwilling to compromise. Then identify and prioritize the terms and
conditions that are desirable, but not essential to the contract and which the Institution is
willing to compromise or relinquish.

5.10.2 Negotiation Techniques
There is not a single approach to negotiation. A discussion of one method to facilitate a
successful negotiation effort follows:
Designate a lead negotiator to establish an organized and controlled negotiating

environment that ensures the Institution’s efforts are efficient, coordinated and unified.
The lead negotiator should control the meeting and ensure everyone is hearing and
discussing the same issue. Side discussions are distracting and may inadvertently
provide information to the respondent to the disadvantage of the Institution. If available,
provide a private side room for the negotiation team to use for private conversations or to
“caucus” during negotiations.
Do not provide the list of essential or other prioritized issues to the respondent because
the list will offer a negotiating advantage. On the other hand, before meeting with the
respondent, if objections to terms and conditions were not a part of a complete response,
the Institution should request a list of respondent’s objections to any contract terms and
conditions and an explanation regarding why respondent is objecting to each term or
condition.
Be prepared to explain why a particular term or condition is essential or objectionable and

place the burden on respondent to identify an alternative solution that meets Institution
needs. Do not feel pressured to agree or disagree to a single term or condition without
considering the impact of the entire group of negotiated terms and conditions within the
context of a final contract. When the entire group of negotiated terms and conditions is
completed, consider any new risks, costs or benefits. Take frequent breaks to discuss
suggestions, options or alternatives, outside of the presence of respondent. Write down
or use a laptop to record the exact language of any proposed or alternative terms and
conditions, so that the team evaluates the exact language that will be included in the
contract.
Negotiations can reach an impasse over conflicting terms thought to be essential to each
party. The following three-question approach used to assist in identifying the contracting
objectives may be useful to assist the parties in clarifying and harmonizing potentially
divergent objectives and interests. The three questions are:
1. What does the party want, specifically?
2. What will having what the party wants, specifically, do for the party?
3. How will the party know, specifically, when the party has received what it wants?
The second question, “What will having what the party wants, specifically, do for the
party?” may provide common ground to explore options to meet the needs of both
parties. If an agreement is not reached, consider beginning negotiations with the next
ranked respondent or re-soliciting.
“Training” web page on OGC Purchasing Council web site (UT Authentication required)
UT Purchasing Council web site

5.12 Award
An Institution will award a contract for the purchase of goods/services that provides the
best value for the Institution pursuant to the mandatory evaluation criteria required by the
Best Value Statutes and specified in the solicitation.
The Institution will complete a best value award justification that addresses each
evaluation criteria and retain the justification in the contract file. A Sample Best Value
Award Justification is attached as APPENDIX 12.
Upon award of a contract, the contract manager is responsible for assuring that any
notifications required by Applicable Laws or University Rules are made to announce the
award of the contract.
In addition, the HUB office should be informed of the contract award in order to track all
subcontracting associated with the contract.
APPENDIX 12 - Sample Best Value Award Justification

CHAPTER 6
CONTRACT FORMATION
The information in this chapter is not intended to provide legal advice. This chapter
includes general rules regarding contract formation.
Texas courts define a contract as a promise or a set of promises to which the law
attaches legal obligation. The law regards the performance of these promises as a duty
and provides a remedy for the breach of that duty.
Contracts that deviate substantially from the Institution’s requirements and specifications
defined in the solicitation are subject to protest by unsuccessful respondents.

6.1 Approach to Contract Formation
Fundamentally, the purpose of any written contract is to (1) create a legal, binding and
enforceable obligation, and (2) serve as a reference document that records the terms of
an agreement to prevent misunderstanding and conflict as to those terms at a later date.
Most often, conflicts over contracts arise well into a contract period – when memories
fade and prove to be unreliable. With this in mind, clarity of the terms and completeness
of the issues addressed are of primary importance. The person who drafts the contract
must (1) know the subject matter and the concerns of the parties thoroughly enough to
anticipate potential areas of disagreement and confusion, and (2) specifically address
those areas in the contract.
Thoroughness and precision are necessary in determining the scope of a contract

because contract law does not allow parties to add terms not part of the original contract
without the consent of both parties. This rigidity in contract law is mostly seen as an
advantage to both parties. However, this advantage may become a liability if the
Institution does not include all necessary terms and conditions in the contract.
Creating contracts for the state is an exercise in balancing potentially conflicting interests.
These interests include (1) the state’s requirements, fiscal constraints, and statutory
requirements, and (2) the contractor’s requirements. The primary concern should always
be the benefit of the contract to the state as a whole, or more specifically, the taxpayers
of the state.
Negotiating the best contract for the state does not necessarily mean taking advantage of
the contractor. While onerous and unnecessarily harsh provisions may be legal, they
usually have negative future consequences that outweigh the initial gains. Contractors
who feel they have been aggrieved by the state are less likely to provide good service
and are more apt to engage in legal action. Or, these contractors may decide to never
contract with the state again, thus limiting future competition on state contracts. In
addition, contractors who have been informed by other contractors of bad experiences
with the state, may demand more money on future contracts to do the same work to
offset that perceived risk.

6.2 Legal Elements of a Contract
The essential elements necessary to form a binding contract are usually described as:
 An Offer;
 An Acceptance (in strict compliance with the terms of the offer);
 Legal Purpose/Objective;
 Mutuality of Obligation (also known as the “meeting of the minds”);
 Consideration; and
 Competent Parties.
6.2.1 Offer
An offer is considered the indication of one party of a willingness to enter into a bargain
made in a manner that justifies the other parties’ belief that assent to the bargain is
invited and will create an obligation.
6.2.2 Acceptance
Acceptance of an offer can occur in several ways. Acceptance of an offer is a
manifestation of assent to the terms thereof made by the offeree in a manner invited or
required by the offer. An acceptance may not change the terms of an offer. If it does, the
offer has not been accepted and has been rejected. However, an acceptance with a
material change in a proposed offer also creates a counteroffer, which, before a contract
is formed, must be accepted by the other party.
6.2.3 Legal Purpose

The objective of the contract must be for a legal purpose. A contract for an illegal purpose
is not binding. For example, a contract for illegal distribution of drugs is not a binding
contract because the purpose of the contract is illegal.
6.2.4 Mutuality of Obligation

Mutuality of obligation is also known as a “meeting of the minds.” Mutuality of obligation
refers to the parties’ mutual understanding of and assent to the terms of their agreement.
The parties must agree to the same thing, in the same sense, at the same time. The
determination of a meeting of their minds, and thus offer and acceptance, is based on the
objective standard of what the parties said and did and not their subjective state of mind.
Unexpressed subjective intent is irrelevant. In determining whether mutual assent is
present, a court looks to the communications between the parties and to the facts and
circumstances surrounding those communications. The offer must be clear and definite,
just as there must be a clear and definite acceptance of all terms contained in the offer.
Where a meeting of the minds is contested, the determination of the existence of a
contract is a question of fact. If a court determines that one party reasonably drew the
inference of a promise from the other party’s conduct, that promise will be given effect in
law.
To be enforceable, the parties must have agreed on the essential terms of the contract.
Full agreement on all contractual terms is the best practice and should be the norm.
However, parties may agree upon some contractual terms, understanding them to be an
agreement and leave other non-essential contract terms to be agreed upon later. Use
caution when leaving contract terms to be agreed upon in the future because when an
essential term is left open for future negotiation there is nothing more than an
unenforceable agreement to agree. Such an agreement is void as a contract.
6.2.5 Certainty of Subject Matter

In general, a contract is legally binding only if its terms are sufficiently definite to permit a

court to understand the parties’ obligations. Material terms of an offer cannot be accepted
to form a contract unless the terms are reasonably definite. Material contract terms are
those that are essential to the understanding between the parties. The material terms of a
contract must be agreed before a court can enforce the contract. The unique facts and
circumstances surrounding each contract are considered to determine which contract
terms are material.
As a general rule, an agreement to enter into negotiations for a contract later does not
create an enforceable contract. However, as previously discussed, parties may agree on
the material terms of a contract and understand them to be an agreement, and leave
other immaterial portions of the agreement to be established later.
When immaterial terms are omitted from contracts, a court may imply or supply the term
to preserve the enforceability of the contract. A court may uphold an agreement by
supplying missing immaterial terms. Historically, Texas courts prefer to validate
transactions rather than void them. However, courts may not create a contract where
none exists. Therefore, courts will not insert or eliminate material terms. Whether or not a
court will imply or supply missing contract terms will depend on the specific facts of the
transaction. An example of terms that have been implied or supplied by a court are time
and place of performance.
Consideration
Consideration is an essential element of any valid contract. Consideration is a present
exchange bargained for in return for a promise. It may consist of some right, interest,
profit, or benefit that accrues to a party, or alternatively, of some forbearance, loss or
responsibility that is undertaken or incurred by a party. Consideration is not required to be
monetary.
6.2.6 Competent Parties

Parties to a contract must be competent to enter into a binding contract. In Texas, a
person typically must be eighteen years of age and of sound mind to be competent.

6.3 Drafting the Contract
The contract should fully describe the actual agreement of the parties. Except for contract
terms that are contrary to public policy (that may be void, voidable or severable from a
contract), the types of contract terms that may be included in a contract are only limited
by the creativity of the drafter. There are several types of provisions that are usually
included in contracts, including:
 Administrative provisions;
 Financial provisions;
 Risk allocation provisions;
 Scope of work (including deliverables);
 Contract term, termination and dispute resolution provisions; and
 Work product and intellectual property ownership and rights provisions.
When drafting a contract, consider using an OGC Standard Contract (see link below) if
available and appropriate. Using a suitable OGC Standard Contract will usually expedite
legal review and reduce the number of legal changes to the contract because the
Standard Contracts contain the applicable Essential Provisions and Recommended
Provisions discussed in Section 6.6 of this Handbook. If an OGC Standard Contract is not
available or appropriate, please consider using one of OGC’s Model Contracts and
Agreements (see link below), if suitable. OGC’s Model Contracts and Agreements also
include the applicable Essential Provisions and Recommended Provisions.
When drafting a contract, also consider the OGC General Procedure Contract Checklist
(see link below) that provides information regarding topics like compliance with
purchasing laws, policies and procedures; form of the agreement; parties to the
agreement; effective date, term and termination; consideration and payment terms;
representations, warranties, duties and obligations; insurance; remedies; software and
database licenses; compliance with privacy laws, policies and procedures; and statutory
contract provisions.
UTS145 Processing of Contracts

OGC Standard Contracts
OGC Model Contracts and Agreements
OGC General Procedure Contract Checklist

6.4 Planning for Contract Preparation
Just like other contract management processes, the Institution should plan for drafting of
the contract. A common practice is to include a draft of the applicable OGC (or Institution)
contract template in the solicitation or to use an OGC solicitation template that includes
UT standard terms and conditions. This allows a respondent to make an offer with
knowledge of the proposed contractual terms and conditions.
During the procurement process always allow adequate time to draft, review and
negotiate the final contract. In addition, be sure to include sufficient time for HUB
compliance and legal review of the contract.
The Institution should begin its contract planning effort by collecting and reviewing OGC
or Institution contract templates, as well as similar contracts that have been previously
approved by OGC, if any. The Institution may also want to review similar contracts
entered into by other Institutions. Studying risks, contracting objectives, assumptions and
constraints in other contracts may be helpful. However, do not automatically adopt terms
and conditions from another contract without a thorough and independent review of how
the terms and conditions relate to the current procurement.
The Institution may also want to prepare (and compare to the appropriate OGC contract
templates and OGC-approved samples) an outline containing headings for the major
terms, conditions and provisions. This makes it easier to group related terms and
conditions. An outline will also illustrate gaps in the structure of the contract.


6.5 Form of the Contract
Evidence of an agreement or a contract may be documented in different formats,
including a “four-corner” contract, a purchase order, or an exchange of correspondence.
The term “four-corner” contract means a single document that includes all of the terms
and conditions within the four-corners of a single document.
Each form of contract has advantages and disadvantages. Determining which form to use
should be based on an assessment of the risks involving contract construction or
interpretation.
6.5.1 “Four-corner” Contracts

A “four-corner” contract offers the greatest opportunity to avoid conflicting provisions,
because all of the provisions are contained in one document. Contract management is
sometimes easier when all of the provisions regarding the duties, obligations and
responsibilities of each party are logically organized and easily found. On the other hand,
“four-corner” contracts require more time to plan and prepare. Notwithstanding the
additional time required, in a major or complex transaction, a “four-corner” contract is the
best format to clearly document an agreement.
6.5.2 Purchase Orders

Purchase orders are also contracts. For example, Contractor delivers an offer, in a form
requested by the Institution, and the Institution indicates acceptance of the offer by
issuing a purchase order. The documents that comprise the offer and acceptance are the
evidence of the contractual agreement. In addition, a contract may be formed if an
Institution issues a purchase order and Contractor accepts that offer through
performance.
A purchase order uses a layered approach (i.e., the purchase order usually relies on a
number of documents that in combination, comprise the contract). The Institution may
publish a solicitation that includes product specifications, contractor qualifications and
other terms and conditions. Contractor’s response may condition the offer on terms and
conditions that are different from or in conflict with the solicitation. When using a
purchase order, the Institution should take care that contractor’s terms and conditions do
not become the basis of the agreement.
Despite the potential for conflicting or additional terms, when used properly, a purchase
order is often relatively fast, efficient and rarely has problems. When using a purchase
order as evidence of a contract, the Institution should insure the inclusion of the
Institution’s standard terms and conditions rather than blindly accepting terms the
contractor proposes. All final terms and conditions that vary from either the offer or the
acceptance must be contained in a written document signed by both parties. OGC has
posted sample purchase order terms and conditions on the Purchasing Council web site
(see link below).

Sample Purchase Order Terms and Conditions on “Sample Documents” web page of
OGC Purchasing Council web site (UT Authentication required)

6.6 Contract Terms
Contracts include a variety of routine terms and conditions often referred to as
‘boilerplate’ or ‘standard’ terms and conditions. Generally accepted terms and conditions
for use by all Institutions are provided on the UT System Purchasing Council web site.
These are recommended terms and conditions. Unless required by Applicable Laws or
University Rules, the recommended terms and conditions may be modified to meet the
Institution’s needs.
During the development of the contract, devote careful attention to the details. Below is a
list of certain provisions that are essential and should be included in all contracts as well
as some provisions that are recommended for inclusion in some contracts depending on
specific facts and circumstances. Sample Contract Terms are attached in APPENDIX
13.
Consult with the Institution’s legal counsel regarding additional contract terms that may
be required by Applicable Laws and University Rules for particular situations.
Essential Provisions:
Scope of Work State Auditor’s Office

Schedule Limitation of Liability
Term of Contract Survival of Provisions
Contractor's Obligations Breach of Contract Claims
HUB Requirements Undocumented Workers
Contract Amount Limitations
Payment Terms Ethics Matters; No Financial Interest
Ownership and Use of Work Material State of Texas Computer Equipment
Default and Termination Recycling Program Certification
Indemnification Enforcement
Relationship of the Parties Access by Individuals with Disabilities
Insurance HIPAA Compliance
Assignment and Subcontracting Historically Underutilized Business
Texas Family Code Child Support Subcontracting Plan
Certification Responsibility for Individuals Performing
Loss of Funding Work; Criminal Background Checks
Entire Agreement; Modifications Quality Assurance
Force Majeure EIR Environment Specifications
Governing Law Security Characteristics and Functionality of
Waivers Proposer’s Information Resources
Confidentiality and Safeguarding of Payment Card Industry Standards
University Records; Press Releases; Public External Terms
Information FERPA Compliance
Binding Effect Group Purchasing Organization (GPO)
Records Notices

Recommended Provisions:
Contract Title (Including Bid Number)

Use of Marks
Tax Certification
Payment of Debt or Delinquency to the State
Captions
Severability
Drug Free Workplace Policy
Order of Precedence of Contract Documents
Security/Parking Access
Smoking Policy

Sample Purchase Order Terms and Conditions on “Sample Documents” web page of
OGC Purchasing Council web site (UT Authentication required)
Appendix 13 – Sample Contract Terms

6.7 State Contracting Standards/Oversight
Institutions are subject to Texas Government Code, Chapter 2261, Subchapter F Ethics,
Reporting, and Approval Requirements for Certain Contracts, except to the extent that
Subchapter F conflicts with Texas Education Code, §51.9337 Purchasing Authority
Conditional; Required Standards. Institutions are not subject to other Subchapters of
Chapter 2261.
To the extent applicable, Texas Government Code, Chapter 2261, Subchapter F,

provides Institutions guidance regarding multiple contract matters including conflicts of
interest (see Section 1.7 of this Handbook), Internet posting (see Section 6.7.1 of
this Handbook), monitoring (see Section 6.7.3 and Chapter 7 of this Handbook),
reporting (see Section 6.7.4 of this Handbook), risk analysis (see Section 7.1.6 of
this Handbook), and management (see Chapter 7 of this Handbook).
6.7.1 Enhanced Transparency

Except with regard to memoranda of understanding, interagency/interlocal contracts or
contracts for which there is not a cost, Institutions must post on the Internet (until the
contract expires or is completed) (a) a summary of each contract (including purchase
orders) the agency enters for the purchase of goods/services from a private vendor
(including “sole source” contracts), (b) statutory or other authority for exclusive acquisition
purchases, and (c) the RFP related to competitively bid contracts (ref. Texas Government
Code, Section 2261.253).
6.7.2 Enhanced Management

Each Institution must (1) publish a contract management handbook that is consistent with
Rule 20901, the UT System Sample Contract Management Handbook, and CPA’s
contract management guide, (2) post the Institution’s handbook on the Institution’s
Internet and (3) submit the Institution’s handbook link to CPA for re-posting on CPA’s
web page.
6.7.3 Enhanced Monitoring

Except with regard to memoranda of understanding, interagency/interlocal contracts or
contracts for which there is not a cost, Institutions must (1) establish procedures to
identify contracts that require enhanced contract or performance monitoring and submit
information on those contracts to the Board of Regents, and (2) report serious issues or
risks with respect to monitored contracts to the Board of Regents (ref. Texas Government
Code, Section 2261.254).
In addition, Institutions must develop and comply with a purchasing accountability and
risk analysis procedure providing, among other things, for (1) assessment of risk of fraud,
abuse or waste in the procurement and contracting process, and (2) identification of
contracts that require enhanced monitoring (ref. Texas Government Code, Section
2261.256).
In connection with contracts for the purchase of goods/services with a value exceeding
$5 million, Texas Government Code, Section 2261.255 requires the contract
management office or procurement director to verify in writing that the solicitation process
complies with state law and Institution policy and submit to the Board of Regents
information on any potential issue that may arise in the solicitation, purchasing or
contractor selection process.

6.7.4 Enhanced Reporting
Institutions must develop contract reporting requirements for contracts for the purchase of
goods/services with a value exceeding $1 million (ref. Texas Government Code, Section
2261.254).
In addition, among other statutory and regulatory reporting requirements, Institutions

must provide notice including the nature of the goods or services, the term, amount and
vendor name, to the LBB for all contracts (a) with a maximum value over $10 million, and
(b) contracts with a value over $1 million that are not competitively procured. Institutions
must also provide an attestation to the LBB on this form consistent with the specific
requirements of Section 7.12 of HB 1 (2015). These requirements apply without regard to
source of funds or type of contract or purchase order.
Note: This Handbook does not attempt to identify all applicable reporting requirements.
Section 7.12 of HB 1 (2015)

Section 6.7.1 – Enhanced Transparency
Section 6.7.3 – Enhanced Monitoring
Section 6.7.4 – Enhanced Reporting
Chapter 7 – Contract Administration
Section 7.1.6 – Risk Management

6.8 Authority to Sign Contracts
6.8.1 Actual Authority, not Apparent Authority
As state agencies, Institutions have only the power and authority that is granted by law or
that may be reasonably inferred from law. An Institution, just like a corporation or other
business entity, acts through its officers and employees. In the case of a private business,
an officer or employee with apparent authority may commit the business to legal
obligations. Actual authority is not required.
On the contrary, only Institution representatives with actual authority may commit the
Institution to legal obligations, including contracts. It is important for Institution officers and
employees to know whether they have delegated authority to act on behalf of the
Institution because Institutions cannot legally perform obligations that are agreed to by
representatives who do not have actual authority to do so. For example, if an invoice is
submitted to an Institution under a contract that is signed by an employee who lacks
actual authority, the Institution may not pay the invoice. This situation may embarrass the
Institution and damage the Institution’s business reputation. In addition, Institution
representatives who enter into obligations on behalf of the Institution, but do not have
actual authority to do so, may be personally responsible for those obligations.
The Texas Education Code gives the Board of Regents the authority to govern and operate
the UT System. The Texas Education Code also authorizes the Board of Regents to
delegate any power or duty to a committee, officer, or employee. In many instances, the
Board of Regents has delegated its authority to officers pursuant to the Regents’ Rules.
Subject matter generally determines which officer receives delegated authority from the
Board of Regents to bind an Institution. It is not the purpose of this overview to cover all
delegations; however, Institutions may refer to the OGC Delegations of Authority web page
(http://www.utsystem.edu/ogc/contracts/delegation.htm) for charts summarizing current
delegations at Institutions.
Pursuant to Rule 10501, Section 2.1, the Board conditions its delegation of authority to
sign contracts on the delegate’s compliance with applicable laws and special instructions
or guidelines issued by the Board, the Chancellor, the Deputy Chancellor, an Executive
Vice Chancellor and/or the Vice Chancellor and General Counsel. As an example,
special instructions or guidelines issued by the Vice Chancellor and General Counsel
include the OGC Contract Review Procedures posted on the OGC website (see link
below).

Regents' Rules and Regulations
Flow Chart of Steps 1 through 9 for UTS145 (UT Authentication required)
OGC Delegations of Authority web page
Contract Review Procedures at OGC Purchasing Council web site
6.8.2 Authority to Sign Contracts

Two important types of delegations to be aware of are: (1) the authority to sign contracts,
and (2) the authority to approve the expenditure of funds from budget accounts. It is
important to note that authority to authorize the expenditure of funds does not authorize
an employee to sign contracts.

With regard to authority to sign contracts, the Board of Regents delegates (through the
Regents’ Rules and Board of Regents meeting minute orders) to the chancellor, Institution
presidents, and certain other officers, the authority to sign certain contracts so long as
those contracts conform to the requirements of UTS145 Processing of Contracts. UTS145
includes a flowchart that details the nine (9) steps of required contract review established
by UTS145, including:
Step 1: System Approval Required before Legal Review;

Step 2: Determine if Contract is on Standard Contract Form;
Step 3: Determine if Contract is a Special Procedure Contract;
Step 4: Determine Value of Contract;
Step 5: Legal Review by OGC;
Step 6: System Approvals Required after Legal Review;
Step 7: Determine whether Contract must be listed on the Consent Agenda;
Step 8: Follow Proper Consent Agenda Procedures; and
Step 9: Execution of Contract.
In conjunction with UTS145, OGC has developed the OGC General Procedure Contract
Checklist (see link below) that must be used to review certain contracts as indicated in
UTS145. The OGC General Procedure Contract Checklist covers topics including
compliance with purchasing laws; policies and procedures; form of the agreement; parties
to the agreement; effective date, term and termination; consideration and payment terms;
representations, warranties, duties and obligations; insurance; remedies; software and
database licenses; compliance with privacy laws, policies and procedures; and statutory
contract provisions.
6.8.2.1 Primary and Secondary Delegates - Only officers who receive authority to
sign contracts directly from the Board of Regents (Primary Delegates),
including the chancellor and Institution presidents, may further delegate their
authority to sign contracts to other Institution employees (Secondary
Delegates). In some cases, Primary Delegates have further delegated
authority to sign contracts to Secondary Delegates. Secondary Delegates
may not further delegate their authority. All delegations of authority must be in
writing.
Before signing a contract, Primary Delegates and Secondary Delegates must

process that contract in accordance with UTS145 Processing of Contracts
(including the OGC Contract Review Procedures). UTS145 helps Institutions
evaluate contracts that will be signed on behalf of the Board of Regents.
6.8. OGC Contract Review Procedures - UTS145 includes the required OGC
Contract Review Procedures. Those procedures are a way for OGC to
provide Institutions with general information about contracts. However, those
procedures cannot provide specific legal advice for any particular situation.
As a result, Institutions must not rely on that information as a substitute for
obtaining legal advice from the Institution's legal counsel, if needed. Use of
the OGC Contract Review Procedures means that the Institution complied
with OGC’s requirements for review of the contract, but it does not mean that
OGC has "approved" the contract in the same way OGC would approve a
contract if OGC actually reviewed the contract. If the Institution feels the
OGC Contract Review Procedures are not adequate for the Institution’s
needs, consult the Institution’s legal counsel directly.

6.8.2.3 Verification of Delegated Authority - Before taking any action on behalf of
an Institution or signing any contract or other document that would bind an
Institution, Institution employees must verify that (1) they have received a
written delegation of authority to do so, and (2) the Institution has complied
with the requirements of UTS145 Contract Review Procedures.
Neither Primary Delegates nor Secondary Delegates should sign a contract

unless the Institution has complied with UTS145 Contract Review
Procedures in connection with the specific contract to be signed.
Texas Education Code, §65.31(a) & (g)

Texas Government Code, §660.024
Regents' Rules and Regulations
Flow Chart of Steps 1 through 9 for UTS145 (UT Authentication required)
OGC Delegations of Authority Web Page
UT System Administration Delegation Signature Authority Form for Expenditure of Funds
The University of Texas at El Paso Delegation of Authority Chart

6.9 Required Check of Vendor Hold Status
Not earlier than the seventh (7th) day before and not later than the date of entering into
the contract, Institutions must determine whether a payment law prohibits CPA from
issuing a warrant or initiating an electronic funds transfer to the vendor (“vendor hold
status”). The determination must be made in accordance with the comptroller's
requirements no later than the date the Institution signs the contract. (ref. Section
2252.903, Texas Government Code)
Institutions must also check the vendor hold status before making each payment under
the contract. (See Sections 3.7 and 7.4 of this Handbook; ref. Section 2107.008, Texas
Government Code)
Texas Government Code 2252.903

Texas Government Code 2107.008
Section 3.7 – Payment Types
Section 7.4 – Invoices and Payments

6.10 Execution of Institution Contracts
Signatures of Primary Delegates or Secondary Delegates with written authority to bind
the Institution are the way through which a contract usually becomes a binding obligation
of the Institution. See Section 6.8.2 Authority to Sign Contracts in this Handbook for more
information regarding delegated authority to bind the Institution to a contract.
Only contractor’s employees authorized to bind the contractor to contract terms may sign
the contract on behalf of the contractor.
Section 6.8.2 – Authority to Sign Contracts

CHAPTER 7
CONTRACT ADMINISTRATION
Contract administration and oversight includes the following seven (7) general processes:
 Planning
 Monitoring Performance
 Change Management
 Payment Approval
 Dispute Resolution
 Termination
 Contract Close-out
The primary tasks of contract administration include:
 Verifying contractor performance for purposes of payment;

 Identifying any material breaches of the contract by assessing the difference between
contractor’s actual performance and contract requirements;
 Determining if corrective action is necessary and taking action, if required; and
 Developing a completion plan for contractor exit requirements, including acceptance
of the goods/services, final payment, and contract close-out.

7.1 Planning
As previously mentioned, planning for contract administration should be simultaneous

with drafting of the SOW for the solicitation. Procedures for contract administration should
be described in the solicitation. At the same time, the Institution should appoint,
coordinate and schedule resources for the contract administration team that will assist
the contract manager with performance of contract administration procedures.
To properly plan for contract administration, the program staff must thoroughly
understand all of the components of the solicitation and the contract. Examples include:
 Proposed contract outcomes and related performance measures.

 Scheduling for deliverables, if applicable.
 Links between the payment schedule and significant deliverables.
 Total contract cost, including any indirect cost allocation for the goods/services to be
provided under the SOW.
 Identification and management of potential contract risks.
 When, where, and how the contract is to be performed, including delivery of
goods/services.
 Institution’s right to inspect and accept or reject the goods/services, as well as any
conditions related to acceptance or rejection.
 Effective date, completion date, contract term extension options, and other dates
applicable to contract performance.
 Contractor’s contact information for correspondence, payment and notice (including
address, email, telephone and fax and other contact information).
Chapter 2 - Planning
7.1.1 Scope of Work

Before the solicitation is issued, contract administration begins with the development of a
clear and concise SOW. The SOW is the roadmap for contract administration. The goal
of contract administration is to ensure the contract is satisfactorily performed by
contractor and the responsibilities of the contract parties are properly discharged.
Effective contract administration helps to minimize (or eliminate) problems, disputes and
claims.
“Scope of Work Issues” Training Presentation on OGC Purchasing Council web site (UT
Authentication required)
7.1.2 Communication
Communication is a critical factor in successful contract administration. It is essential for
contract administrators to (1) understand the provisions of the contract, (2) communicate
contractual obligations to all parties involved, and (3) closely monitor contract
performance over the entire term of the contract. The contract manager’s role includes
ensuring, to the extent possible, that the contract requirements are satisfied, that the
goods/services are delivered in a timely manner, and that the financial interests of the
Institution are protected.

7.1.3 Familiarity with Contracting Principles
Contract managers must be aware of and understand general contracting principles
because those principles impact the Institution’s responsibilities in administering the
contract.
7.1.4 Central Contract Repository

Institutions should maintain a copy of all contracts on file in a central repository, which
may be an electronic repository. A central repository will facilitate reporting, audits and
responses to requests for public information, as well as allow contract managers access
to useful information in past and present contracts.
7.1.5 Master Contract Administration File

Ideally, the Institution should keep one complete master contract administration file. That
file will provide a basis for responding to questions and resolving contract issues, if any.
Throughout the life of the contract, the contract administration file may include the
following:
 A copy of the current contract and all amendments (including amendments made by
letter);
 A copy of all specifications, drawings, manuals, terms posted on the Internet or other
documents incorporated into the contract by reference;
 A list of all prior contracts with the same contractor (if those contracts offer valuable
historical data);
 If the goods/services were competitively procured, documentation evidencing the
Institution’s need for the goods/services, the solicitation, contractor’s proposal, the
proposal scoring sheet summarizing the scores for all proposals to be used as criteria
for justification of best value for the successful proposal, and the notice of award;
 If the goods/services were not competitively procured, documentation evidencing the
Institution’s need for the goods/services, the exclusive acquisition justification, the
best value justification for the procurement;
 A list of contractor work product submittal requirements and deliverables;
 An inventory of Institution furnished property or services;
 An inventory of all institution information furnished to contractor;
 A copy of the post-award conference summary, if conducted;
 A copy of the compliance review schedule, if applicable;
 A copy of all correspondence related to the contract;
 The originals of all contractor work product data and report submittals;
 A copy of all routine reports required by the contract, including sales reports, pricing
schedules, approval requests, and inspection reports;
 A copy of all notices to proceed, to stop work, to correct deficiencies and other
notices;
 A copy of all Institution approvals, including approvals of contractor’s materials,
quality control program and work schedules, if applicable;
 The sign-in sheet, agenda and handouts for meetings with contractor, or internal
meetings
 A copy of all contractor invoices and supporting documentation, including information
regarding prompt payment discounts, contract deductions and fee adjustments;
 Copies of original HSP and revisions, if any;
 Copies of HUB Progress Assessment Reports.

7.1.6 Risk Management
To help manage contract risk for significant contracts, the Institution should complete a
preliminary risk assessment to (1) document the Institution’s initial perception of the level
of risk, (2) identify specific risks, (3) determine the level, type and amount of management
oversight and resources needed to plan and implement the contract from beginning to
end, and (4) identify and assign experienced Institution risk personnel to assist with the
contract management process.
As the risk associated with a particular contract increases, the level and degree of
executive management sponsorship, participation and oversight should be increased by
a corresponding level.
7.1.6.1 Assessment of Contract Risk - Risks are inherent in all the stages of the
contract. Limited resources (time and money) necessitate the use of
contractual risk assessment tools because there is not sufficient time to
oversee all aspects of every contract. An effective risk assessment model
will help focus contract monitoring resources on contractors with the
highest risk of noncompliance.
The contract risk assessment is a dynamic process that should be

updated regularly to reflect the actual results of the contract monitoring
program. For example, if a contractor has fallen significantly behind
schedule in delivering goods/services, the risk assessment should be
updated to indicate that elevated risk. The elevated risk should be
incorporated into the contract monitoring program. Likewise, if a contractor is
well ahead of schedule in delivering goods/services, the risk assessment
and the contract monitoring program should be updated to indicate that
lower level of risk.
7.1.6.2 Risk Factors, Weights and Rating - Risk factors are indicators that assess
the risk to the Institution if the contract or project objectives are not
achieved. General risk factors may include:
 Contractor’s past performance (and past performance of similar

contractors);
 Contractor’s turnover in key personnel;
 Dollar value of the contract;
 Information obtained from contract monitoring, such as the variance
between contractor’s expected and actual performance;
 Significant problems with contractor’s invoices;
 Results of previous contractor monitoring site visits;
 Results of site visits completed by other divisions within the same
Institution or by other state agencies, that contract with the same
contractor;
 Length of time since the last site visit; and
 Contractor’s experience performing the specific work.
Once the risk factors are identified, assign weights to each factor. Weights
indicate how significant each factor is in identifying contractors who should
be monitored. However, weights can also be designed to ensure statutory
or policy requirements. For example, if a policy requires a site visit every
three years, the assigned weight would be indicative of the period since the
last site visit.
Next, rate each contractor on the risk factors. Consider using a three-point
scale, where 3 is high risk, 2 is medium risk and 1 is low risk. Institutions
should define their own past performance risk factors and weights.

Risk analysis may be used to identify contractors with the highest risk level
that should be monitored more closely. Risk analysis may also be used
to identify specific areas of risk within a contract that should be monitored.
7.1.6.3 Sample Risk Assessment - Assumptions:
 The Institution has contracts with many vendors providing the same
service. (Only three contractors are rated in this example but there are
many contractors providing this service.)
 Risk factors evaluated are (1) contract dollar value, (2) contractor’s past
performance, and (3) contractor’s experience.
 Dollars:
 40 percent of contractors receive less than $100,000 from the
Institution per year.
 50 percent receive between $100,000 and $250,000.
 10 percent receive more than $250,000.
 Experience:
1. High Risk – the vendor has never done this type of work before.
2. Medium Risk – the vendor has contracted with the Institution
before but not for this type of work.
3. Low Risk – the vendor has previously contracted with the
Institution for the same type of work.
 Past Performance:
 If contractor has at least one (1) significant finding from a prior
contract monitoring program or three (3) less significant findings,
contractor is considered high risk.
EXAMPLE – RISK ASSESSMENT ANALYSIS
Contractor Dollars Experience Past Performance Total

Risk
Amount Risk Risk x Results Risk Risk x Results Risk Risk x
Weight Weight Weight
(0.2) (0.5) (0.3)
#1 $300K 3 .6 Held 1 .5 3 minor 2 .6 .6 +
previous findings
.5 +
contract with
.6 =
the state
1.7
#2 $75K 1 .2 New to 3 1.5 New – no 1 .3 .2 +
type of findings
1.5 +
work
.3 =
2.0
#3 $125K 2 .4 Used before 2 1.0 Previous 3 .9 .4 +
– but not year 1.0 +
for this type finding .9 =
of work regarding 2.3
safety
NOTE: In this example, Contractor #3 has the highest risk, followed by

Contractor #2 and #1, respectively.
Contractor #3 has been used by the Institution before with one

monitoring finding in regard to safety. Safety is the key area for close
monitoring during the contract term.
Typically, there will be more than three different risk elements. This is a

simple example for illustration purposes only.
7.1.7 Contract Manager Responsibilities

The primary responsibilities of the contract manager, and in some cases, in conjunction
with the Purchasing Office, include:
 Developing the contract management team.

 Participating in developing the solicitation and drafting the sample contract. Contract
administration processes must be considered during development of the solicitation
and the sample contract.
 Consulting with legal counsel to address any legal issues related to the sample
contract.
 Reviewing solicitation responses to determine if contractor’s compensation structure
is appropriate for the SOW.
 Serving as contractor’s official point of contact with the Institution for the contract.
 Receiving and responding to communications between contractor and the Institution.
 Consulting with the HUB office regarding HSP changes.
 Managing, approving, and documenting all amendments to the contract.
 Managing any Institution property (including computers, telephones, equipment,
furniture, and identification badges) used by contractor when performing its duties
and obligations under the contract. This responsibility is primarily managed by UTEP
Technology Support and Asset Management.
 Identifying and resolving issues and disputes with contractor in a timely manner.
 Implementing a quality assurance process.
 Maintaining appropriate contract records (see Section 2.5 of this Handbook).
 Documenting significant contract events.
 Monitoring contractor’s progress and performance of the SOW to ensure
goods/services conform to contract requirements.
 Exercising appropriate Institution contract remedies when contractor’s performance is
deficient.
 Inspecting and approving the final goods /SERVICES. Approval should be
documented in writing. This responsibility is primarily managed by the department
end user.
 Monitoring the Institution budgeting and accounting process to ensure sufficient
funds are available to pay contractor. This responsibility is primarily managed by the
department end user.
 Verifying accuracy of invoices and authorizing payments consistent with contract
terms. This responsibility is primarily managed by the department end user.
 Performing contract close-out process, including ensuring the contract file contains all
necessary contract documentation, formal acceptance documentation, and
documented lessons learned.
7.1.8 Developing the Contract Management Team

The number of participants in the contract management process will vary in number from
one person to several people depending on the dollar value, term, level of risk and
complexity of the contract. At the beginning of solicitation development, the Institution
should identify a single contract manager and others to assist the contract manager. The
contract manager, in consultation with executive management, should assign roles and
responsibilities to each member of the contract management team, including:
 Determining the sequence of activities, dependencies, required or desired outcomes,

and acceptable performance levels.
 Developing a timetable (with start and end dates) for each performance component,
including milestones with accompanying timeframes, and monitoring and reporting
requirements.
 Monitoring and documenting contractor activity on a specified frequency to identify

any problem areas.
 Meeting with contractor on a regular basis to review progress, discuss problems and
consider necessary changes.
 Providing access to state facilities, equipment, data, staff, materials and information.
 Contacting other staff as necessary to obtain equipment and data.
 Establishing scope of authority, clear lines of communication and reporting protocol
for individuals who will interact directly with contractor.
 Establishing control of correspondence, data and reports.
 Identifying potential problems and solutions.
 Defining terms or conditions of default.
 Establishing a procedure, identifying a responsible person and establishing for
handling noncompliance.
 Establishing a procedure and timeframe and identifying a responsible person for
making necessary contract decisions, amendments, modifications, and changes.
NOTE: Most contract managers do not have authority to:
 Instruct contractor to start work before the contract is fully executed (signed by both
parties);
 Change the terms or scope of the contract without a formal written amendment;
 Direct contractor to perform work that is not specifically described in the SOW and
funded by the contract;
 Extend the term of the contract without a formal written amendment; or
 Allow contractor to incur costs in excess of the cap or limit set by the contract.
Generally, contract managers who take those actions are acting outside the course and
scope of their employment.
7.1.9 Post Award Conference
7.1.9.1 Informal or Formal Conference – The Institution may hold an informal or a

formal post-award conference with contractor personnel responsible for
administering the contract. Although contractor personnel involved in the
procurement process should already be aware of the contract requirements,
the post-award conference ensures that contractor personnel who were not
involved in the procurement, but will be responsible for contract
administration, understand the contract requirements. The conference should
be held as soon after award as practical. The conference will help identify
contract requirements and avoid potential misunderstandings early in the life
of the contract. The post-award conference should NOT be used to change
contract requirements.

Not every contract will require a formal post-award conference; however, for
every contract there should be some form of discussion after award between
the Institution and contractor personnel responsible for performing the
contract, to review the applicable performance requirements and
administration procedures.
For less complex, low risk, low-value contracts, a telephone call to contractor
may be sufficient. During the telephone conversation, the Institution should
review major contract requirements with contractor (including the value of
contract, major performance milestones [deliverables, reports, and meetings]
and time and place of delivery).
Factors used to determine the need for a formal post-award conference

include:
 Type of contract;
 Level of risk associated with the contract;
 Contract value and complexity;
 Term of contract, period of performance and/or delivery requirements;
 Institution’s procurement history for the goods/services;
 Experience and expertise of contractor;
 Urgency of delivery schedule;
 Institution’s prior experience with contractor;
 Any special or unusual contract requirements; and
 Any special or unusual payment requirements.
7.1.9.2 Agenda – The post-award conference agenda should include the following:
 Introduction. Introduce all conference attendees and identify Institution

and contractor points of contact.
 Purpose. Clearly communicate the purpose of the meeting: to identify

contract requirements. Specify that contract requirements will not be
revised or re-negotiated at the conference.
 Scope. Review the goods/services to be delivered under the contract.
 Terms. Summarize contract terms and conditions, including unique and

important provisions. Summarizing terms and conditions will provide
attendees a better understanding of contract requirements and help
reduce misunderstandings.
 Requirements. Discuss contractor’s technical requirements and

reporting obligations under the contract. Emphasize the importance of
timely compliance with reporting requirements.
 Administration. Discuss applicable contract administration procedures,

including contract monitoring and progress measurement.
 Rights. Discuss other rights and obligations of the Institution and

contractor. Summarize Institution’s contractor performance evaluation
procedures, including evaluation of performance during the term and at
the conclusion of the contract. Mention that performance evaluations
may be considered in the award of future contracts.
 Potential Problems. Address potential contract problems and possible

solutions.

 Payment. Discuss invoicing requirements and payment procedures,
including any payments based on milestones achieved by contractor.
 Authority. Identify the roles and responsibilities of contract managers,

contract administrators, project managers, key personnel leads, and
other staff. Explain limits of authority for Institution personnel. Obtain the
limits of authority for contractor personnel.
The contract manager should summarize the conference in writing and retain
the agenda and summary in the contract file. The summary should include
topics covered at the conference, attendees, and action items with
responsible individuals and due dates. Copies of the conference summary
should be distributed to all conference attendees.

7.2 Performance Monitoring
Performance monitoring is a key function of proper contract administration that helps the
Institution (1) confirm that contractor is performing all if its duties and obligations in
accordance with the terms of the contract, and (2) identify and address any developing
problems or issues. Contract monitoring may be viewed as:
 A preventive function;
 An opportunity to determine contractor’s need for technical assistance; and
 A valuable source for information concerning the effectiveness and quality of
goods/services being provided.
Performance monitoring tools should be specified in the solicitation and included in the
contract. Reporting and testing are examples of contract monitoring tools. Institutions
may not be able to enforce reporting or testing requirements that are not adequately
documented in the contract.
A Sample Contract Monitoring Worksheet is attached as APPENDIX 14.
7.2.1 Monitoring Program

Not all contracts will require extensive monitoring. The level of monitoring will depend on
many factors including the dollar value of the contract, the complexity of the
goods/services, the level of contract risk, and the Institution’s experience with contractor.
7.2.2 Determining What to Monitor

When determining what aspects of a contract or of contractor’s performance to monitor,
consider the following questions:
 How will the Institution know it is receiving the goods/services it paid for?
 How will the Institution know that contractor is complying with contract requirements?
 How will the Institution know contractor’s performance under the contract is complete
and the contract may be closed?
Review the SOW and other contract terms, including contractor compliance
requirements. Design the monitoring program to focus on contract requirements that are
most important to the Institution. Generally, this means monitoring contractor’s progress
on the SOW, including deliverables. For example, include monitoring tools that will
identify the following issues:
 Whether the Institution is receiving the goods/services as required by the contract,

including:
 Confirming the Institution does not receive less goods/services than required by
the contract; and
 Confirming the Institution does not receive the wrong goods/services.
 Whether the Institution is accurately charged for the goods/services, including:
 Confirming allowable contractor expenses are not used for non-allowable costs
(i.e. gifts, etc.); and
 Confirming contractor accurately reports its progress on providing the
goods/services.
 Whether contractor makes satisfactory corrections to goods/services identified as not
meeting contract requirements.
 Whether contractor protects Institution assets.
Also consider the impact the contract payment methodology will have on the monitoring
program. For example, if payment is based on a firm fixed-price (a specific amount of
money for a unit of the goods/services), it is not necessary to verify contractor’s expenses
since contractor’s expenses are not relevant to this type of contract. For example, if the
Institution is buying a box of pencils, the Institution knows what they are buying and the

cost per pencil. It is irrelevant what contractor pays for travel or advertising because the
Institution pays a firm fixed price for the pencils regardless of contractor’s expenses.
Under a firm fixed-price contract, the Institution should ensure that:
 The invoiced quantity of goods/services equals actual quantity received;

 The invoiced quantity and price are the same as the contract quantity and price; and
 The goods/services meet or exceed contract specifications.
If the contract is a cost reimbursement contract (Institution pays contractor’s cost plus a
percentage of overhead and profit), the Institution should consider including in its
monitoring program tools to monitor the following:
 Were the invoiced goods/services actually purchased by contractor?

 Were the invoiced good/services used by contractor to fulfil the contract?
 Were the goods/services necessary and reasonable to fulfil the contract?
 Did the goods/services meet contract quality and quantity specifications?
 Was the Institution charged for the goods/services more than one time (for example,
in both overhead and profit)?
 Were the goods/services included in contractor’s Institution-approved budget?
The Institution should review the contract to see how the costs are reimbursed. Many
contracts require that all costs be included in the original budget provided by contractor
and approved by the Institution in writing. In some cases, the contract may specify that
certain costs (such as the purchase of a vehicle or use of a subcontractor) require
approval by the Institution prior to purchase.
NOTE: If the Institution receives grant money to pay for goods/services,

the Institution must consider the nature of the relationship with
contractor. Is the relationship a vendor relationship or a sub-recipient
relationship? See OMB Circular A-133, Section 210, posted at
https://www.whitehouse.gov/omb/circulars_default for guidance on this
relationship determination. If the relationship is that of a sub-recipient,
then federal guidelines and cost principles must be followed. The
Uniform Grant Management Standards published by CPA at
http://comptroller.texas.gov/procurement/catrad/ugms.pdf provides
additional guidance.
OMB Circular A-133, Section 210 at Office of Management and Budget web site
Uniform Grant Management Standards at Texas Comptroller web site
7.2.3 Monitoring Tools

The Institution should establish expectations so that Institution and contractor personnel
understand (1) the contract requirements that will be monitored, and (2) the evaluation
criteria for each contract requirement.
Monitoring tools include:
7.2.3.1 Site Visit – Contracts that are complex or have a high degree of risk may
require visits to contractor’s facilities. Site visits may be used to verify that
contractor’s performance complies with the contract schedule and other
contract requirements (for example, dedication of sufficient resources and
appropriately qualified personnel to performance of the work). Site visits help
emphasize to contractor the importance the Institution places on the contract.
Site visits also provide enhanced communication between the Institution and

contractor.
Site visits may be comprehensive (full scope) or limited to particular issues

(limited scope). Full scope site visits are typically scheduled visits to
contractor’s place of business. They are based on risk assessment and cover
a broad range of contract compliance and performance issues. Limited scope
site visits typically focus on a specific problem. Examples of some typical
reasons for considering a limited scope site visit include the following:
 Contractor is responsible for administering funds from two sources and one funding
source has noted serious problems with the way contractor used the funds.
 Other contractors have failed to comply with a particular contract
requirement and there is an indication this contractor might also have
failed to comply.
 Inconsistencies in invoices are identified and clarification from supporting
documents is necessary.
 Contractor has proposed a corrective action plan for a contract
compliance problem, but the Institution is not certain the proposed
solution will resolve the problem.
To perform a site visit, the Institution should:
 Develop a comprehensive and objective site monitoring checklist that:
 Focuses on desired contract outcomes, but also includes contract

compliance requirements. Site monitoring criteria should reference
the applicable contract requirement.
 Assists the Institution in assessing contractor performance

consistently. For example, minor or inconsequential noncompliance
should be identified. List contractor noncompliance and errors that
will be considered minor or inconsequential. Also, identify contract
compliance areas where monitors may exercise judgment.
 Specifies the number of items or documents that will be reviewed to

evaluate each element of the monitoring checklist. Do not disclose
specifics of sample sizes or the monitoring checklist to contractor.
For example, the Institution may indicate it will review invoices and
supporting documents those invoices, but should not disclose the
Institution will review invoices and supporting documents for
December 2015.
 Allows the site monitor to focus on the highest risk areas of the
monitoring checklist.
 Establish standards, procedures and documentation requirements. For

example:
 Describe the standards, procedures and documentation required for

the site monitor to bypass an area of the monitoring checklist. For
instance, the checklist may specify that if the site monitor determines
that no errors in contract reporting have been noted for the past two
years, then, with concurrence from the contract manager, the site
monitor may omit the contract reporting portion of the monitoring
checklist for the current site visit. The site monitor must document
the justification for omitting the contract reporting portion of the
checklist on the site monitoring checklist by including the following
note “No problems identified prior two years - not monitored this

year.”
 Allow space on the checklist (or on a separate document) to record

results of the site visit. For instance, if the monitoring checklist
requires review of invoices for five months, then the documentation
should include the identification of the months monitored and the
results of the review for each month.
 Sampling and Population:
 Ensure the population is complete by including all files relevant to the

contract. Contractor should never be the one to select the samples
for review.
 If contractor submits the names of the clients as part of the normal

expenditure draw, then the sample can be selected from the client
list. Ensure that the clients on the list are paid for by the Institution.
 If contractor cannot locate the sample item selected, it may or may

not indicate a problem. Before agreeing to substitute an alternate file,
consider the circumstances of the “lost” sample item and determine if
the explanation is reasonable or if the site monitor suspects that
contractor did not want the site monitor to see the file.
 Tailor the site monitoring checklist for each contractor and each contract.
While there will be standard items the Institution will review for all
contractors, each contractor and contract should be reviewed for specific
site monitoring requirements unique to that contract or contractor. In
addition, consider the following:
 Review specific contract requirements to determine if these merit site

monitoring.
 Look for items that fall just below an amount requiring additional
approval.
 Consider problems contractor has had in the past or what is likely to

cause problems for this contractor. Are parts of the contract new to
contractor? For example, contractor may be providing the same
services but to a different population during this contract.
 What types of items do not need to be monitored and why? For

example, if contractor uses an information database the Institution
tested under previous contracts, then the risk associated with that
database may be low and may not need to be reviewed this year.
 Has another Institution or another department of the same Institution

conducted a site visit? If so, the Institutions or departments could
coordinate and conduct only one site visit instead of two.
 Site Visit Reports. The site visit report is a written record of the site visit
work and should be retained in the Institution’s contract file. A copy of the
report or a summary may be sent to contractor.
Even if contractor corrects a problem detected during the site visit while
the site monitor is at contractor’s facilities, the site monitor is obligated to
include the problem in the site visit report. The notation in the site visit
report will remind the site monitor to follow up on the problem on future

visits to confirm the problem has been corrected.
Include what has been learned during this site visit in the risk
assessment and contract requirements in the next procurement. If the
site monitor or contractor recommends changes for the next
procurement, include the recommendations in the site monitoring
reports.
7.2.3.3 Desk Review – A desk review includes a review of reports submitted by

contractor to the Institution. A desk review should include:
 Comparison of contractor’s actual performance against contract

requirements to confirm contractor is performing in accordance with the
contract requirements.
 Comparison of contractor’s actual expenditures to the Institution-

approved budget to confirm contractor is complying with the approved
budget.
 Comparison of the current reporting period to prior reporting periods to

identify any unexplained trends and determine whether contractor is
performing work significantly different during this reporting period than
during the prior reporting period.
 Comparison of contractor’s reports to reports from other contractors

performing similar work.
 Comparison of relationships between key components of the reports

such as:
 Cost per unit of goods/services against percentage of fees charged
to the contract;
 Change in variable costs for each unit of goods/services; and
Reported salaries against the contract staffing plan.
 Comparison of the report to known elements of contractor’s operating

environment to determine, for example, if a weather emergency in
contractor’s geographic area increased the cost of supplies or caused a
temporary reduction in units of goods/services provided.
7.2.3.3 Expenditure Document Review – An expenditure document review

includes analysis of contractor invoices (including fees for goods/services
and expenses) to determine (1) if the fee rates and expenditure items are
permitted under the terms of the contract, and (2) if the supporting
documentation (including cost reports, third party receipts for expenses, and
detailed client information) adequately support the invoice. If contractor
consistently provides improper invoices or supporting documentation is
insufficient to support the invoices, consider implementing additional
monitoring such as site visits.
7.2.4 Use of Contract Monitoring Findings

An Institution should design the monitoring program to include appropriate follow up on
contract monitoring findings. Monitoring reviews, audits, and investigations should be
routinely used to:
 Ensure contractor takes corrective action;

 Identify common problem areas for training opportunities; and
 Improve future procurements.

Follow up helps bring contractor back into compliance with contract requirements. Follow
up is essential since problems will not correct themselves through identification and
reporting alone.
Contract monitoring findings should also be used to improve the contract requirements
for future procurements. Unnecessary constraints or inadequate specifications should be
noted for incorporation into future solicitations.
7.2.5 Monitoring by Third Parties

In some instances, the obligation of monitoring the progress of a contract is assigned to
another contractor. This is also known as independent oversight. For highly technical
work, third-party subject matter experts may perform monitoring services independently
or in conjunction with Institution staff.
APPENDIX 14 –Sample Contract Monitoring Worksheet

7.3 Contract Reporting Obligations
Contract reporting obligations include (1) contractor reports to the Institution contract
administrator, (2) Institution contract administrator reports to executive management, and
(3) Institution reports to other state agencies.
There are generally three report types: Status Reports, Activity Reports, and Vendor
Performance Reports. All serve useful functions.
7.3.1 Status Reports

Status reports describe the progress of the work. The content of the status report should
be consistent with and track the organizational structure of the SOW (i.e. phases,
segments, deliverables and products). A status report should describe status of
completed work and pending work. The current status should be compared to the
contract schedule. Only work that has been verified as completed and accepted should
be categorized as complete. If there are any unresolved issues, those issues should be
included in the status report and a resolution should be requested. If the SOW has been
amended in accordance with the terms of the contract, status reports should track the
original contract schedule unless the amendment included a revised contract schedule.
If the contract does not require contractor to provide periodic status reports, the Institution
should routinely confirm that sufficient progress on the work is being made by contractor.
Confirmation of work status may be accomplished by requesting a status update from
contractor or scheduling a site visit to review progress.
7.3.2 Activity Reports

Activity reports describe all activity on the project. Project activity is not the same as a
work status. A project may have a great deal of activity without making substantive
progress. Note that activity reporting may also be a core feature of managing certain
contracts. For example, contractor payments for outsourcing contracts may be based on
the number of completed transactions. In that situation, activity reporting would be critical
to contract administration of Institution payments under the contract.
7.3.3 Vendor Performance Reports

Best practice suggests that upon termination or expiration of a contract, an Institution
should file a Vendor Performance Report as permitted by CPA in accordance with 34
TAC §20.108(b). A Vendor Performance Report may be completed and submitted to the
TPSS web portal. Reporting contractor performance may facilitate resolution of contract
dispute issues between Institution and contractor. In addition, the Vendor Performance
Report database provides a resource for all state agencies when reviewing proposals
submitted in connection with subsequent solicitations.
Texas Administrative Code, Title 34, Part 1, §20.108(b)

7.4 Invoices and Payments
7.4.1 Invoices
Invoices submitted by contractor must comply with the contract rate schedule. Invoices
should be reviewed to ensure that contractor’s invoices correspond with contractor’s
progress on the work. Contractor’s progress should be measurable because cost
incurred or invoices submitted, in and of themselves, are insufficient indicators of
contractor’s progress.
Prior to payment, invoices must be approved by program staff familiar with the work and
the current status of the work. If the contract manager believes that the invoice exceeds
contractor’s progress, the contract manager should request and receive contractor’s
explanation prior to approval of the invoice for payment. Payment should be withheld
pending the Institution’s approval of contractor’s progress.
All invoices should be reviewed to ensure:
 Contractor is billing the Institution only for goods/services actually received by the
Institution;
 Goods/services have been inspected and accepted by the Institution;
 The invoice is correct and complies with the pricing terms and other contract
requirements; and
 Total payments by the Institution to contractor do not exceed the contract cap or fee
limit.
 Institution has received HSP Progress Assessment Reports, if required.
The Institution should give contractor written notice of invoice deficiencies not later than
21 days after receipt by the Institution as required by the Texas Prompt Payment Act,
Section 2251.042(a), Government Code.
7.4.2 Payments
Payments must be made in accordance with Applicable Laws, including the Texas
Prompt Payment Act, Chapter 2251, Texas Government Code, the vendor hold
requirements of Section 6.9 of this Handbook, and University Rules. The Texas Prompt
Payment Act requires that correct invoices be paid within 30 days after the date the
correct invoice was received or services were performed and goods received, whichever
is later. Under some circumstances, the Institution may be obligated to pay contractor
interest on late payments.
Texas Government Code §2251.042(a)

Section 6.9 – Required Check of Vendor Hold Status
7.4.3 Institution Contracts providing Services to Third

Parties
Contracts under which contractor provides goods/services to a third party (not the
Institution) are unique in that acceptance of goods/services by the third party is not an
indicator that an invoice should be paid. Problems with third party goods/services
contracts generally surface after invoices are paid. Contract managers handling third
party goods/services contracts should incorporate contract mechanisms that ensure the
Institution is able to exercise remedies against contractors for poor performance and
withhold future payments until performance deficiencies are corrected.

7.4.4 Withholding Payment
Institution employees must protect the interests of the Institution. Under appropriate
circumstances, it may be necessary for the Institution to withhold payments from
contractors. Such circumstances include:
 Material breach of the contract by contractor;

 Invoicing errors;
 Invoices that lack sufficient supporting documentation, including an HSP Progress
Assessment Report (if required);
 Offset for prior overpayments to contractor under the same contract; and
 Contractor performance does not comply with contract requirements.

7.5 Change Management Process
During the term of the contract it may be necessary to amend the contract. Possible
modifications include changes to notice addresses, pricing or delivery schedule.
There are two types of amendments. A bilateral amendment requires the agreement of all
parties to amend the contract. A unilateral amendment requires only the agreement of
one party to amend the contract. Terms and conditions in the original contract may
specify when a bilateral (agreement of all parties) or a unilateral (agreement of one party)
amendment is required. If the contract is silent, then bilateral amendment (agreement of
all parties) is required.
The Institution should implement an effective change management process. Failure to

manage and control contract changes can result in unintentional modification of the
SOW, extension of the schedule, increase in contract cost, circumvention of management
controls or decrease of contractor accountability.
An effective change management process includes:
 Procedures to avoid an informal undocumented change process;

 Documentation of all proposed changes and approval/disapproval;
 Evaluation of the impact of each change to contracting objectives, deliverables,
schedule, cost, overhead, work-in-progress, completed work, standards, and
acceptance criteria;
 Planning for requests and approvals of draws against any contingency allowance;
 Single point of contact for recommendation and authorization of all changes;
 Formal, written approval of all changes prior to contract amendment. A Sample
Executive Approval Memo is attached as APPENDIX 3);
 Monitoring of the HSP;
 Documentation of all changes, no matter how small;
 Documentation of impact of changes on the contract (including the HSP); and
 Notification of contract amendment.
NOTE: The Institution should not verbally authorize contractor to alter performance
under the contract before the formal change management process is complete, including
full analysis of the change, written approval of the change, and documentation of the
change through a written contract amendment.
7.5.1 Impact of Substantial Changes to Solicited Scope of

Work
The contract resulting from a solicitation issued by an Institution must be consistent with
the specifications and requirements of that solicitation. Contracts that are not consistent
with the related solicitation may violate competitive procurement principles, Applicable
Laws and University Rules.
If a contract change is needed, the change should also be consistent with the
specifications and requirements set out in the original solicitation. A significant difference
between the revised SOW and the solicited SOW would be a material or substantial
change to the scope of the solicitation and may not be allowed because the revised
scope was not originally subjected to fair competition. To permit such a change would go
against the ideas of competition and a fair playing field for all vendors. Transparency in
government procurement is a key government responsibility. As a result, Applicable Laws
require that Institutions conduct a competitive procurement process before making
substantial contract changes. The specific method of competition may vary based on the
type of goods/services needed.
By way of example, if a contract to buy 10 desks is amended to include 300 file cabinets,

the change is outside the scope of the original contract solicitation because vendors did
not previously have the opportunity to compete for the sale of 300 file cabinets. Additional
vendors may have competed had they known that file cabinets were being solicited. The
large volume of file cabinets (as compared to desks) may also have had an impact upon
which vendors submitted offers and competed for the opportunity. Vendors not interested
in the smaller solicitation may have been interested in the larger solicitation.
In determining whether a proposed amendment constitutes a significant change in scope

of the original solicitation, the primary issue is generally whether the proposed change is
a material or substantial change.
Material or substantial changes are not measured by the number of changes made to the
original specifications. Rather, material or substantial changes are measured by whether
the proposed changes would so substantially alter the original solicitation specifications
that, if the Institution does not re-advertise the revised specifications, a procurement
opportunity would be denied to a vendor who may have been able to respond, or who
may have been interested in responding, to the revised specifications. If the proposed
changes are material or substantial, then the proposed changes will be treated as a new
procurement and a new solicitation is needed to ensure compliance with Applicable Laws
related to competitive procurement.
Materially changing solicitation specifications after receipt of responses denies an

opportunity to all vendors that might have be interested in the changed specifications to
participate in the solicitation. As a result, all contract amendments are required to be
within the scope of the solicitation underlying the original contract.
It is important to remember that application of the above principles will depend upon your
particular facts and circumstances.
Before proceeding with a contract amendment, consult the Institution’s legal counsel for
more information regarding the extent to which a contract may be changed.
APPENDIX 3 –Sample Executive Approval Memo
7.5.2 Administrative Changes

Administrative changes to a contract are changes that are within the scope of the
contract and do not affect or alter the rights of the parties. Examples of administrative
changes include:
 Changes in billing instructions or contact information;

 Corrections of typographical errors not affecting the substance of the contract;
 Changes permitted by the specific contract language; and
 Changes in Institution or contractor representatives assigned to the contract.
7.5.3 Substantive Changes

Substantive changes are contractual changes that affect the rights of both parties.
Examples of substantive changes may include:
 Change in the price of goods/services under the contract;

 Change in the delivery schedule;
 Change in the quantity of goods/services;
 Change in specifications for goods/services;
 Change in the HSP;
 Change of key personnel assigned to work on the contract; and

 Change of any terms and conditions.
7.5.4 Constructive Changes

Constructive changes to the contract may occur if an Institution directs contractor to
perform in a manner that differs from the terms of the contract. For example, if contractor
perceives that work that exceeds the scope of the contract was ordered by the Institution,
contractor may claim that the contract was “constructively” changed. Contractor may be
entitled to additional compensation as a result of constructive changes. Constructive
changes may occur when Institution personnel:
 Provide suggestions to a contractor;

 Accelerate the delivery schedule;
 Direct that the work under the contract be performed in a manner that differs from the
contract requirements;
 Change the sequencing of the work;
 Delay accepting or rejecting deliverables;
 Delay reviewing invoices and approving payment; and
 Interfere with or hinder contractor’s performance.

7.6 Dispute Resolution Process
Appropriate dispute resolution is an essential contract management skill. Early
identification of issues, effective communication with contractor, and providing contractor
with written notice of issues raised by the Institution (including a formal request to cure or
a less formal written process) is crucial.
The goal of the dispute resolution process is to resolve contract issues through direct
negotiation of Institution and contractor representatives, before the issues need third
party resolution. To avoid escalation of contract issues and to ensure the Institution does
not alienate contractor representatives, it is imperative that Institution personnel respond
promptly to all contractor inquiries. Initial steps to be taken are:
1. Identify the Issue. Many times what appears to be an issue can be resolved before
the issue becomes a problem by providing contractor with information or clarification.
2. Research Facts. When investigating contract issues, the Institution should obtain as
much factual information as possible from as many relevant sources as possible,
including the project manager and contractor.
3. Evaluation. The Institution should review all of the factual information and the
contract requirements. After discussing with all decision makers, the Institution
should determine an appropriate course of action.

7.7 Termination
Contract termination should be the last resort and should be rare. Contract termination
reflects a failure by all parties to the contract.
When the contract terms permit termination, the parties are no longer obligated to
continue performance of their duties and obligations under the contract. Depending on
the specific contract terms, parties may terminate without cause (Termination for
Convenience), with cause (Termination for Default) or for force majeure.
7.7.1 Termination for Convenience

If the contract permits the Institution to terminate for convenience (also known as no-fault
termination), the Institution may terminate the contract at any time in its sole discretion, if
termination is in the best interest of the Institution.
7.7.1.1 Notice - When terminating, the Institution must comply with the contract
terms which will most likely require the Institution to provide contractor written
notice specifying the date of termination. The termination notice should be
provided to contractor in accordance with the contract terms. A termination
notice may include wording similar to the following:
Pursuant to Section _____ [Insert Section number for

Institution’s right to terminate without cause], which permits
Institution to terminate without cause, this contract is hereby
terminated effective [date]. Contractor must immediately stop
all work, terminate subcontracts, and place no further orders.
In accordance with this Notice of Termination, Contractor

must:
1. Retain adequate records of Contractor’s compliance with

this notice, including the extent of completion of the work
on the date of termination.
2. Immediately notify all subcontractors and suppliers, if

any, of this notice of termination.
3. Notify the Institution Contract Administrator [name], of

any and all matters that may be adversely affected by
this termination; and
4. Take any other action required by the Institution to

expedite this termination.
7.7.1.2 Final Payment - Contractor will generally be paid for fees and allowable
costs incurred up to the termination date. The Institution will not be
responsible for payments to contractor related to work performed or costs
incurred after the termination date.
When the Institution receives the final invoice from contractor for work
performed prior to the termination date, the Institution should thoroughly
review the invoice to ensure that all charges are appropriate and comply with
the terms of the contract as altered by notice of termination.
7.7.2 Termination for Cause

An Institution may be able to terminate a contract for cause if contractor failed to perform
its duties and obligations under the contract and did not cure the failure within any cure
period specified by the contract. A failure to perform may also be referred to as a breach

or a default. If program staff consider terminating the contract for cause, the contract
manager will contact the Institution’s legal counsel for guidance and assistance.
The Institution is not required to terminate a contract even though the circumstances
permit termination. The Institution may determine that it is in the Institution’s best interest
to pursue an alternate resolution. Examples of alternatives may include extending
contractor’s delivery or completion date, allowing contractor to continue working, or
working with contractor’s surety (company that issued contractor’s performance bond) to
complete the outstanding work.
Termination for cause should be used only to protect the interests of the Institution and
should be used only as a last resort.
Factors to consider prior to terminating for cause include:
 Has the Institution done everything within reason to assist contractor in curing the
contractual failure?
 The specifications, terms and conditions of the contract, Applicable Laws and
University Rules.
 The nature of the contractual failure and the explanation provided by contractor for
the failure.
 The urgency of the Institution’s need for the goods/services.
 The advantages and disadvantages of allowing contractor to continue performance.
 The availability of the goods/services from other sources.
 The time required to obtain the goods/services from another source (including the
solicitation process) as compared to the additional time the current contractor needs
to complete the work.
 The availability of funds to re-purchase the goods/services.
7.7.2.1 Potential for Damages – If a contract is terminated for failure to perform,

contractor may be liable for damages. However, the contract may limit the
damages the Institution may recover. The Institution may attempt to include
re-procurement costs and other expenses in the calculation of damages it
seeks to recover from contractor. However, obtaining an award of damages
may require protracted legal action. If the Institution is awarded damages,
contractor may not be financially capable of paying and the Institution may
never recover the damages.
7.7.2.2 Cure Notice – When terminating for cause, the Institution must comply with
applicable contract terms. In most situations, the contract will require the
Institution to provide contractor written notice (1) specifying contractor’s
default that authorizes the Institution to terminate the contract, and (2)
indicating that if contractor does not cure the default within the cure period
specified by the contract, the Institution intends to terminate the contract.
This notice is sometimes referred to as a cure notice.
The format for a cure notice may be as follows:
Contractor is notified that the Institution believes contractor

breached the contract as follows: [specify failures of
contractor to perform its duties and obligations under the
contract].
Unless contractor cures [this/these] breach(es) within _____

days after the date of this letter, the Institution may exercise
its rights under the contract and applicable laws, including
termination of the contract for cause in accordance with
Section ____.

Another format for a cure notice is:
Because contractor failed to perform its duties and

obligations under the contract within the time required by the
contract terms, the Institution is considering terminating the
contract under Section(s) _______.
Pending a final decision, the Institution is asking contractor

to submit written information, if any, regarding whether
contractor’s failure to perform was the result of force majeure
or other excusable causes. Please submit this information to
the Institution within ____ days after the date of this notice. If
contractor fails to submit this information within _____ days,
Institution may exercise its remedies under the contract and
applicable laws, including termination of the contract.
Any assistance provided to contractor by the Institution in

connection with the contract or any acceptance by the
Institution of goods/services that do not comply with contract
requirements will be solely for the purpose of mitigating
damages. It is not the intention of the Institution to condone
any delinquency or to waive any rights the Institution may
have under the contract.
7.7.2.3 Notice of Termination - If contractor fails to cure the default or provide a

satisfactory explanation as requested, the contract may be terminated. The
Notice of Termination should contain the following:
 Contract number, if any;

 Contract date;
 Effective date of termination;
 Reference to the contract Section under which the contract is being
terminated;
 Statement of the facts justifying the termination; and
 Statement indicating that the Institution may pursue all remedies
available under Applicable Laws.

7.7.3 Force Majeure or Other Excusable Causes for Failure
to Perform
An Institution may not be able to terminate a contract for cause when contractor’s failure
to perform is the result of force majeure or other excusable causes. In order to qualify as
an excusable cause, the cause must be beyond the control of and without the fault or
negligence of contractor. Excusable causes for failure to perform duties and obligations
under a contract generally include:
 Acts of God or of the public enemy;

 Acts of the Institution;
 Fires;
 Floods;
 Epidemics;
 Strikes;
 Freight embargoes;
 Unusually severe weather. *
*Severe weather, although beyond contractor’s control, may not generally

constitute an excusable delay if it is not considered “unusually severe weather.”
For example, a snow storm in Amarillo in February would not be considered
unusual, while it would be considered unusual in Austin. On the other hand, a
snow storm in Amarillo in June would indeed be unusual.
If contractor’s failure to perform is due to the default of a subcontractor, in order to qualify

as an excusable cause, the default must arise out of causes beyond the control and
without the fault or negligence of both contractor and the subcontractor. Even if this
requirement is met, the cause will not be excusable if the goods/services to be provided
by the subcontractor could have been obtained from other sources in time to meet the
contract delivery schedule.

7.8 Contract Close-Out
A contract is completed when all goods/services have been received and accepted; all
reports have been delivered and accepted; all administrative actions have been
accomplished; all Institution-furnished equipment and material have been returned; and
final payment has been made to contractor.
The contract close-out process is usually a simple but detailed administrative procedure.
Purposes of the close-out process include (1) verification that all parties to the contract
have fulfilled their contractual duties and obligations and there are no remaining
unperformed duties or obligations; and (2) assessment of the success of the contract and
lessons learned for use in future contracting.
A contract is ready for close out when:
 All deliverables (including reports) have been delivered to and accepted by the
Institution. The contract manager should compare actual performance against
contractual performance measures, goals and objectives to determine whether all
required work has been completed;
 Final payment has been made;
 All monitoring issues have been resolved;
 All property inventory and ownership issues are resolved, including disposition of any
equipment or licenses purchased under the contract;
 The Institution has acceptance all of the work;
 The Institution has advised contractor of, and contractor is in compliance with,
records retention requirements (see Section 2.5 of this Handbook);
 The Institution’s plan for contract file maintenance is in place; and
 Deficiencies noted during the contract close-out process are documented and
communicated to all appropriate parties.
A sample Contract Close-Out Checklist is attached as APPENDIX 15.
Section 2.5 – Records Retention

APPENDIX 15 - Sample Contract Close-Out Checklist

VERSION HISTORY
Release/ Contract Management Description

Revision Date Handbook Version
December 2016 Version 1 Original UTEP Contract Management
Handbook

APPENDICES

APPENDIX 1
Contract Management Best Practices Matrix
COMPONENT POOR AVERAGE BEST PRACTICE

Processes No standard processes for contracting or Contract processes are defined at the Contracting process standardized
compliance management division level, but are sporadically followed Institution-wide
Sporadic compliance enforcement
Results in labor-intensive processes, Proactive compliance enforcement
duplication of effort, and poorly written Contract templates utilized sporadically or
solicitations and contracts limited availability of templates Formal templates utilized for all
solicitations and contracts
No contract or solicitation document Limited formal, repeatable process for
templates. Every contract or solicitation consistent solicitation development Formal, repeatable process (e.g., project
document looks different management methodology) for consistent
Contract managers assigned after award is solicitation development
No formal, repeatable process for made
consistent solicitation development Contract managers are involved in writing
Contract Management Handbook is used solicitation, negotiating contract, managing
Contract managers not involved from sporadically to address specific questions or contract and contract close-out
“cradle to grave” concerns
The Contract Management Handbook
Contract Management Handbook is Undocumented “lessons learned” and “best serves as a roadmap to guide the
ignored or not consulted practices” incorporated into processes contracting process
No effort to capture “lessons learned” and Limited planning to determine solicitation Active collection of “lessons learned” and
“best practices” efforts, re-solicitation strategies “best practices” are leveraged for
continuous improvement
No structured business planning process to Contracting processes that overlap with
determine sourcing and re-solicitation existing project management practices are Active, formal business planning process
strategy defined, but are sporadically followed
Standardized Institution-wide contracting
No contracting processes that overlap with process is comprehensively integrated with
existing project management practices are existing standardized Institution- wide
defined project management practices
Organization No structured contract management  Contract managers assigned not always the  Contract managers within each division
group person with the expertise or knowledge possess technical and/or programmatic
 expertise and knowledge or have expertise
Contract decisions made and contracts  Contracting decisions coordinated at division and knowledge readily available to them
managed by divisions/personnel “not in level, but not consistently 
the know”   Contracting decisions involve all relevant
 Sporadic coordination between contract parties
No coordination between divisions manager, legal, procurement, etc. 
involved in the procurement and   Coordination and input from all relevant
contracting process divisions to minimize risk and maximize
 Supporting team members (financial, legal,
and purchasing, etc.) for any given contract compliance
Supporting team members (financial, 
assigned “ad hoc”
legal, and purchasing, etc.) are not  Contract management team members

available to assist the contract manager remain engaged through entire process –
 Limited involvement of the end
user/customer as subject matter expert same staff assigned
No involvement of the end user/customer
during solicitation requirements gathering 
as subject matter expert during solicitation
 Active involvement of the end
requirements gathering
 Executive support but limited involvement user/customer as subject matter expert
during solicitation requirements gathering
No executive support and involvement

 Executive support and active involvement
Technology No contract repository or very basic Contracts repository supported at division Contract automation system that is
automated folders for contract storage level by basic storage system with little to no searchable and allows for the uploading,
reporting capabilities monitoring and automated reporting of
Manual compliance reviews contracts
Developing high-level reports with quality Limited ability to track compliance
contract information is nonexistent or is very High level reports have to be manually Independent and formal mechanisms in
labor intensive created from contract status reports or place to track compliance for contract
contract repository managers
Amendments can be approved, uploaded,

and tracked online

COMPONENT POOR AVERAGE BEST PRACTICE
Performance No involvement from contract manager or  Deliverables/SOW developed by legal or  Division and/or contract manager solely
Metrics division when developing purchasing offices with minimal input from responsible for developing deliverables
deliverables/SOW contract manager or division with input from Legal, Procurement, etc.
 
Poorly written, unclear or immeasurable  Unclear distinction between specifications,  Clear distinction of well-developed
deliverables and unclear performance requirements and deliverables and deliverables and performance metrics as
metrics, remedies or incentives performance metrics and associated well as associated remedies or incentives
remedies or incentives 
Compliance and performance measured  Compliance and performance measured
sporadically or inconsistently Compliance and performance measured consistently (at least monthly)
quarterly (less often than monthly)
Vendor Improper or excessive communication  Communication with vendors during the  Properly routed communication with
Relations with vendors immediately preceding and solicitation potential vendors (i.e., through the
during an active solicitation  purchaser) during the solicitation
 Sporadic communication between contract 
Little to no communication between manager and vendor during an active  Frequent communication between contract
contract manager and vendor during an contract term manager and vendor pertaining to all
active contract term  aspects of contract, including issues,
Contract issues improperly reported and/or technical assistance and overall progress
No clear lines of communication of contract resolution sporadically enforced of the work
issues or dispute resolution 
 Dispute resolution or contract issue
procedures clearly defined

Advanced notice of upcoming solicitation
posted in accordance with requirements of
University Rules
Fiscal Contract manager has little or no fiscal  Contract manager approves payments  Contract manager approves all invoices,
oversight capabilities  budget changes or fiscal amendments
 Contract manager keeps copies of approved 
No contract manager monitoring or invoices in contract file  Contract manager keeps a written payment
written log of payments to vendor  log of all payments and deliverables
Contract manager communicates with associated with each payment
No communication between Accounts Accounts Payable when there is a problem 
Payable and contract manager Contract manager routinely interacts with
accounts payable office regarding all fiscal
contract matters, disputes, non-payment,
etc.
Legal Terms and conditions required by Applicable Some terms and conditions required by All terms and conditions required by
Laws or University Rules are not present Applicable Laws or University Rules are not Applicable Laws or University Rules are
present or regularly updated included in the contract and regularly
reviewed and updated by relevant staff
Training Contract manager and/or purchasing staff Purchasing staff has certification required by Contract managers are trained as required
do not have training required by University University Rules, including UTS156 by University Rules and purchasing staff
Rules, including UTS156 Purchaser Training Purchaser Training and Certification, but hold certifications required by University
and Certification contract managers are not trained Rules, including UTS156 Purchaser
Training and Certification

APPENDIX 2
Summary of 2015 Procurement and Contracting Legislation

APPENDIX 3
Sample Executive Approval Memo

APPENDIX 4
Summary of UT Procurement Guidelines

APPENDIX 5
Exclusive Acquisition Justification Form - Professional Services

Exclusive Acquisition Justification Form – Sole Source Requisition Form

Exclusive Acquisition Justification Form – Emergency Requisition Form

APPENDIX 6
Sample Non-Disclosure Statement
MONTH, DAY, YEAR
MEMORANDUM
TO: Proposal Evaluation Team:

NAME TITLE
Non-Voting Members:
NAME TITLE
FROM: NAME
SUBJECT: Obligations related to Request for Proposal (“RFP”) – Selection of a vendor to provide [GOOD
AND/OR SERVICE] for The University of Texas at El Paso. Project; RFP No. [###-####-#####]
In accordance with Texas law, The University of Texas at El Paso will issue the RFP to select a vendor to
[GOOD AND/OR SERVICE] pursuant to a competitive procurement process. Responses to the RFP will be due
ASAP. One (1) copy of each proposal received in response to the RFP will be available for review for members of
the Proposal Evaluation Team at the Evaluation Committee meeting tentatively scheduled for MONTH, DAY,
YEAR. You have received this memorandum in connection with your appointment to the Proposal Evaluation
Team.
To ensure that competitive procurement processes are equitable for all respondents, the employees,
representatives, and agents of The University of Texas at El Paso may not participate in or assume any
responsibility for procurement decisions of The University of Texas at El Paso if such participation would
constitute a conflict of interest. A conflict of interest could result if you are currently employed by, or are receiving
any compensation from, or have been the recipient of any present or future economic opportunity, employment,
gift, loan gratuity, special discount, trip, favor, or service in connection with (1) any proposal to be submitted in
response to the RFP or (2) any respondent participating in the RFP procurement process, in return for favorable
consideration.
In addition, The University of Texas at El Paso and the employees, representatives, and agents of The
University of Texas at El Paso may not (1) solicit proposals, (2) furnish information, or (3) take any action, which
could be construed to give a direct or indirect advantage or disadvantage to any respondent to the RFP.
The disclosure of information pertaining to the contents, status, or ranking of any proposal submitted in
response to the RFP, to respondents or other non-university personnel could give direct or indirect advantage or
disadvantage to a respondent of the RFP. Such disclosures include, but are not limited to, (1) the delivery of a
reproduction of all or any part of any proposal submitted in response to the RFP or other information pertaining to
the contents, status, or ranking of any such proposal, and (2) the verbal communication of any information about
or contained in any proposal or other information pertaining to the contents, status, or ranking of any proposal.
Section 1.5 of Appendix One of the RFP specifically states that “University will use commercially
reasonable efforts to avoid public disclosure of the contents of a proposal prior to selection of the Vendor.”
If you have any questions or comments regarding your duties and obligations related to your role in the
RFP process, please to not hesitate to call me at 915-747-5488. I will be happy to discuss these matters with you.

Please acknowledge your receipt of this memorandum and your understanding of its contents by signing
and dating on the lines provided below. In addition, kindly email a signed copy of this memorandum to me at
[EMAIL] on or before end of business Thursday, MONTH, DAY, YEAR.
Thank you very much for your assistance with this RFP process.
Acknowledge:
Signature___________________________ Date: ________________
Print Name _________________________

APPENDIX 7
Sample Pre-Proposal Conference Guidelines
Objective: A pre-proposal conference is sometimes required to clarify specifications.

Typically, program staff, in conjunction with the Purchasing Office, determines if a pre-
proposal conference is necessary. If a pre-proposal conference is necessary, the
solicitation must include:
 Exact physical location, including room number.

 Date and time of conference. The date must allow sufficient time for respondents to
receive and review the solicitation prior to the conference. Typically, this is
approximately 10 days after the solicitation is published.
It may be essential for potential respondents to inspect the site prior to submitting a response
to the solicitation; therefore, include in the solicitation:
 Institution contact information for scheduling appointments for site inspections.
If the conference is mandatory, the following statement must be included in the

solicitation:
"Failure to attend the pre-bid/proposal conference will result in disqualification of the

response."
If a mandatory conference is required, consider adding additional conference dates,

especially if the expected attendee count will be large.
Typically, Purchasing Office conducts the conference. The Purchasing Office provides:
 A recording device (optional)

 A sign-in sheet for attendees
 Extra copies of the solicitation
The conference begins as follows:
 Purchasing Office opening remarks, including the purpose of the conference,

solicitation number and title of the solicitation.
 Inform attendees that the conference is being recorded, if applicable.
 Advise attendees to turn off or turn to vibrate any cell phones or pagers.
 Remind attendees to sign in, especially for mandatory conferences.
 Inform attendees that, whenever possible, the Institution will provide answers to
questions raised at the conference, but any answer which changes or affects the
solicitation requirements will be reviewed and published in an Addendum to the
solicitation.
 Advise attendees that potential respondents may not rely on verbal answers to
questions that differ from the solicitation requirements.
 Introduce Institution representatives.
 Introduce attendee's (optional depending on number attending conference).
 Review solicitation by section or page and ask for questions regarding each section
or page. (Do not read the solicitation word for word – summarize and allow for
questions.)

 Take notes of any items that need to be addressed through an addendum and other
significant discussions.

 Depending on the circumstances, site inspections may be conducted prior to or after
the solicitation review, but prior to the end of the conference. After site inspections all
attendee's should return to conference room to ask any questions as a result of the
site inspection. Summarize the conference, Confirm the issues to be addressed in an
addendum. Confirm that answers to all documented questions will be provided in
writing, if any. Remind attendees that verbal changes to the solicitation are not valid or
binding until the changes are made by an addendum.
 Collect sign-in sheets. Note: Usually attendees want copies of the sign-in sheets. If
possible, make copies for attendees prior to the end of the conference.
After the conference:
 Keep any recording of the conference in the contract file as official documentation of
the meeting. The recording may or may not be transcribed.
 Purchasing Office and program staff will work together to prepare any addenda,
including any written questions with answers.
 Purchasing Office will determine if there is sufficient time for potential respondent to
prepare proposals before the submittal deadline or if the submittal deadline should be
extended.
 Email, mail or fax any addenda to attendees.
 Provide any addenda to program staff.
 Post addendum on the ESBD, if required by University Rules.
Revised 12/28/2015

APPENDIX 8
Sample Proposal Score Sheet

APPENDIX 9
Sample Administrative Review Checklist
[Solicitation No.]
[Solicitation Title]
[Respondent Name]
Yes No
1. Execution of Proposal – Signed
2. HUB Subcontracting Plan
3. Submitted original and required # of copies
4. Addenda Acknowledged
5. Mandatory Pre-Bid Conference Attendance (if applicable)

Proposal Content
6. Company Information
Experience and Qualifications
Compensation and Fees
References
Licenses/Certificate
Yes No
SOLICITATION RESPONSIVE
Revised 01/08/2016

APPENDIX 10
Evaluation Team Guidelines and
Purchasing Office Responsibilities
These are general guidelines for Institutions to use and may be customized to meet individual Institution
needs. Institutions should establish internal policies and procedures related to solicitation response
evaluation teams.
Prior to the Evaluation Team meeting:
Establish date and time for the team to meet. This should be done within one (1) week of publishing the solicitation.
Reserve an adequate size conference room or ensure that the program office has done so. Review responses to
ensure all are responsive, meet all minimum requirements and provide all required information to be considered for
evaluation.
Prepare sufficient copies of the technical evaluation matrix for each team member (depending on the number of
responses received).
Assemble copies of all responses for each team member. Remove pricing information from responses because
scores for pricing are calculated by the Purchasing Office and are not typically provided to the evaluators.
Send Non-Disclosure Statement (2 copies for each member) to each team member.
Evaluation Team Meeting:

Before sharing responses with team members, collect a signed Non-Disclosure Statement from each member. Each
team member should also keep a copy of the statement for their records and as a reminder of the team member’s
responsibilities. For members not in attendance, the signed Non-Disclosure Statement will also be received prior to
providing responses for evaluation. Check statement to ensure it is signed and has not been modified.
Distribute evaluation resources to each member, including:

 The solicitation and any addenda. Prior to this meeting, the members should become familiar with these
documents.
 Copy of all responsive proposals received.
 Evaluation Matrix (appropriate number of copies – depending on the number of responses received).
Review the evaluation matrix to ensure each member understands how the matrix works and how the
responses will be evaluated. Explain the scoring process. Team members should be reminded to compare the
responses to the requirements set forth in the solicitation and not to each other.
Advise members that evaluations are subject to the Texas Public Information Act and should be aware of information
that is written on the matrix. However, it is helpful in the de-briefing process if the members write in the comment
section – especially if the score is unusually low or high. This allows respondents to know where their proposal’s
strengths and weaknesses were so the respondent may improve its responses on future solicitations.
Team members should consult with the Purchasing Office for any needed clarifications of a response. The
Purchasing Office may need to will contact the respondent, obtain an explanation, and prepare a written response for
the team members. All members will be provided a copy of the response to the request for clarification.
Generally, a representative of the Purchasing Office remains during the evaluation team meeting to answer any
questions which may arise and to ensure proper procedures are followed. Sometimes, due to time constraints,
remote location of team members or other circumstances, it is not possible for all members to be together for
the evaluation. However, gathering all team members in one location for the meeting is the preferred method. If
the evaluation team conducts their evaluation remotely, the Purchasing Office will provide a deadline for return
of the evaluation scores to the Purchasing Office.

Scores will not be divulged between team members. Members may ask questions of the Purchasing Office if
they are unable to find information, do not understand information in a proposal or require the technical
assistance.
After evaluations are completed, all evaluation scores will be submitted to the Purchasing Office.
After the Evaluation Team Meeting
The Purchasing Office verifies and calculates technical scores, adds the technical scores to the price score, and
calculates the total score.
The Purchasing Office (with any necessary input from the Institution’s legal office) recommends negotiations,
discussions and/or award.
All team members will continue to refer any questions about the solicitation, the evaluation and award process to the
Purchasing Office.
Revised 06/24/2011

APPENDIX 11
Sample Reference Check Form
Respondent Name:
Solicitation Number:
Goods/Services:
Reference Name:
Company Name:
Telephone Number:
Introduction: Hello, my name is [caller’s name] with [Institution name]. We are currently evaluating
vendor proposals for [solicitation title] and are checking vendor references. [respondent name]
provided us your name and number as a reference for [respondent name]. Do you have a few minutes to
answer some questions?
1. How long has your company done business with [respondent name]?
2. How many different projects has [respondent name] worked on for your company?
3. How many different contractors …
a. Has your company used in the past?
b. Is your company currently using?
4. On a scale of 1 to 10, with 10 being completely satisfied and 1 being completely

unsatisfied, how would you rate [respondent name]’s:
Rating
a. Ability to perform the work?
b. Ability to ___________?
c. Reliability?
d. Ability to meet timelines or deadlines?
e. Quality of work?

f. Personnel experience level?
Rating
g. Attitude regarding customer service?
h. Ability to resolve problems?
i. Overall performance?
5. On a scale of 1 to 10, with 10 being “absolutely would” and 1 being “absolutely

would not,” would you recommend [respondent name] to another Institution or
company? Rating
6. In your opinion, what are [respondent name]’s
a. Strengths?
b. Weaknesses?
7. Do you have any additional comments?
Total Rating
[Signature of person conducting reference checks]
Revised 12/28/2015

APPENDIX 12
Sample Best Value Award Justification
BEST VALUE AWARD JUSTIFICATION
Section 51.9335, Texas Education Code, states that an institution of higher education may acquire goods or services by the method
that provides the best value to the institution. Section 51.9335 states that, in determining what is the best value to an institution of
higher education, the institution shall consider specific evaluation criteria.
UT [Identify institution name] has determined that a purchase of [Identify goods or services purchased] from [Identify vendor
name] will provide the best value to UT [Identify institution name] based on the institution’s consideration of such evaluation
criteria as documented below:
(1) The purchase price of the goods or services:

___________________________________________________________
___________________________________________________________
___________________________________________________________
(2) The reputation of the vendor and of the vendor's goods or services:
___________________________________________________________
___________________________________________________________
___________________________________________________________
(3) The quality of the vendor's goods or services:

___________________________________________________________
___________________________________________________________
___________________________________________________________
(4) The extent to which the vendor’s goods or services meet UT [Identify institution name]’s needs:
___________________________________________________________
___________________________________________________________
___________________________________________________________
(5) The vendor's past relationship with UT [Identify institution name]:

___________________________________________________________
___________________________________________________________
___________________________________________________________
(6) The impact on the ability of UT [Identify institution name] to comply with laws and rules relating to historically underutilized
businesses and to the procurement of goods and services from persons with disabilities:
___________________________________________________________
___________________________________________________________
___________________________________________________________
(7) the total long-term cost to UT [Identify institution name] of acquiring the vendor's goods or services:
___________________________________________________________
___________________________________________________________
___________________________________________________________
(8) the following other relevant factor(s) that a private business entity would consider in selecting such a vendor:
___________________________________________________________
___________________________________________________________
___________________________________________________________
[Use the following item (9) only if procurement is for construction or repair to real property.]
(9) the use of material in construction or repair to real property that is not proprietary to a single vendor unless the institution
provides written justification in the request for bids for use of the unique material specified:
_________________________________________________________________________________________________________
___________________________________________________________________________
APPROVED:
___________________________
Name:
Title:

APPENDIX 13
Sample Contract Terms
OGC’s Agreement between University and Contractor Template includes OGC’s suggested terms and
conditions that should be included in most Institution contracts.
OGC’s Agreement between University and Contractor Template is posted at:

https://www.utsystem.edu/ogcprotected/sampledocs.htm [UT Authentication Required].
The Institution must consider whether these terms and conditions are appropriate and sufficient based on
the particular circumstances related to the contract or whether additional terms and conditions are
necessary. Please consult the Institution’s legal counsel with questions regarding applicability of any of
the sample terms and conditions.
If the goods and services being procured will be funded with federal money or included in the calculation
of overhead charged to federal projects, consult with the Institution’s legal counsel or the Institution’s
Office of Sponsored Research regarding the need for additional contract provisions required by federal
law or the specific terms of the grant or sponsored research contract.

APPENDIX 14
Sample Contract Monitoring Worksheet
DRAFT – SAMPLE Division:

CONTRACT Information
MONITORING Services
WORKSHEET Division
To be Included in
Contract
Monitoring Binder;
References to
Tabs are to
Location in Binder
Contractor Specific Performance Responsible Monitoring Monitoring Results of Results of Monitoring Uses Communicated Use
Type of Monitoring Method Individual Activity Activity Monitoring (include follow up to
Contract Activities to including for Each Frequency Documentation Activity requirements)
Be information Monitoring Method Communicated
Performed sources to Activity to
be used
Acme Consultants,
PC;
Consulting
Services
Review of Compare Jane Doe Quarterly E‐mail Report Betty Jo, IT Routine status reports by Betty Board of Regents, Reallocate funds
Consultant's Draft Division Jo, IT Division Manager, to Exec Office of Finance
Quarterly Report to Manager Management; acceptance or
Draft Reports Contract rejection of draft
for Contract R equirement report deliverables as provided
Compliance s in Contract; Review milestone
[this is only invoices prior to approval for
one example payment;
of what will Require redelivery of draft report
be many deliverables; Terminate
monitoring contractor for nonperformance;
activities] Solicit replacement services
Revised 1/8/2016

APPENDIX 15
Sample Contract Close-Out Checklist
Project Name
Prepared by (Print) Date Prepared
Customer Contract
Contract Telephone/E-mail
yes no n/a All products and services required were provided to the buyer
yes no n/a Documentation adequately shows receipt and formal acceptance of all contract terms.
yes no n/a No claims or investigations are pending on this contract.
yes no n/a Any buyer furnished property or information was returned to the buyer.
yes no n/a All actions related to contract price revisions and changes are concluded.
yes no n/a All outstanding subcontracting issues are settled.
yes no n/a If a partial or complete termination was involved, action is complete.
yes no n/a Any required contract audit is now complete.
Notes:

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The University of Texas at El Paso

The University of Texas at El Paso Page 1 Contract Management Handbook

Chapter 1 Introduction .......................................................................................................... 4

Chapter 2 Planning .............................................................................................................. 22

Chapter 3 Preparing the Solicitation .................................................................................... 47

Chapter 4 Publication of the Solicitation .............................................................................. 65

Chapter 5 Evaluation and Award ......................................................................................... 72

Chapter 6 Contract Formation ............................................................................................. 86

The University of Texas at El Paso Page 2 Contract Management Handbook

Chapter 7 Contract Administration..................................................................................... 102

Version History ................................................................................................................ 129

APPENDIX 2 Summary of 2015 Procurement and Contracting Legislation

APPENDIX 3 Sample Executive Approval Memo

APPENDIX 4 Summary of UT Procurement Guidelines

APPENDIX 5 Exclusive Acquisition Justification Form

APPENDIX 6 Sample Non-Disclosure Statement

APPENDIX 7 Sample Pre-Proposal Conference Guidelines

APPENDIX 8 Sample Proposal Score Sheet

APPENDIX 9 Sample Administrative Review Checklist

APPENDIX 10 Evaluation Team Guidelines and Purchasing Office Responsibilities

APPENDIX 11 Sample Reference Check Form

APPENDIX 12 Sample Best Value Award Justification

APPENDIX 13 Sample Contract Terms

APPENDIX 14 Sample Contract Monitoring Worksheet

APPENDIX 15 Sample Contract Close-Out Checklist

The University of Texas at El Paso Page 3 Contract Management Handbook

Fully implemented contract management requires coordinating and administering the

 Summarizes certain mandatory statutory, regulatory and policy compliance

The University of Texas at El Paso Page 4 Contract Management Handbook

 Provides practical suggestions and best practices related to Institution contracting

 Provides a Contract Management Best Practices Matrix attached as APPENDIX 1

Where can I go for more information?

APPENDIX 1 – Contract Management Best Practices Matrix

The University of Texas at El Paso Page 5 Contract Management Handbook

Advertise: A public announcement of the intention to purchase goods/services.

Amendment: Written addition or change to a contract, including modifications, renewals

Assignment: Transfer of contractual rights from one party to another party.

Best Value: Factors to be considered in determining best value in making certain

Bid: An offer to contract with the state, submitted in response to an ITB.

Board of Regents: The Board of Regents of The University of Texas System.

Certificate of Filing: The disclosure acknowledgement issued by the Texas Ethics

Competitive Sealed Proposals: Process of advertising a request for proposal (RFP),

Consultant: A person that provides or proposes to provide a consulting service.

Consulting Service: Practice of studying or advising a state agency under a contract

The University of Texas at El Paso Page 6 Contract Management Handbook

Contract: An agreement (including a purchase order) where a contractor provides

Contract Manager: A person who is employed by an Institution and has significant

Controlling Interest: (1) an ownership interest or participating interest in a Business

Deliverable: A unit or increment of work required by a contract, including such items as

Emergency: A purchase made when an unforeseen and/or a sudden unexpected

Exclusive Acquisition: Purchase of goods/services that exceed the authorized direct

Executive Sponsor: A high-level individual with primary responsibility for implementation

Financial Advisors or Service Providers: Persons or business entities who act as a

The University of Texas at El Paso Page 7 Contract Management Handbook

Group Purchasing Organization (GPO): A purchasing program established by (1) a

Handbook: The University of Texas at El Paso Contract Management Handbook.

Historically Underutilized Business (HUB): A minority-owned, woman-owned or

Institutions of Higher Education: Institutions of higher education as defined by Texas

Institution: UT System and the institutions comprising UT System as listed in Regents’

Intermediary: A person who actively participates in the facilitation of the contract or