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G/6.1 Policy on management of contracts and MOUs |
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6.1.1 Policy scope and objectives 6.1.1 Policy scope and objectivesThis policy addresses the administration of contracts and other types of agreements such as memoranda of understanding (MOUs). QUT is committed to ensuring that contracts and agreements are entered into by appropriately delegated officers following due consideration of risks, benefits, other relevant requirements and accountabilities, and alignment with QUT's strategic ambitions and top-level plans (where applicable). This policy deals with both legally binding contracts and deeds, and with memoranda of understanding which are formal or strategic agreements but do not bind QUT in a strict legal sense. Contracts and MOUs entered into on behalf of QUT must be administered in a way which:
The employment of staff is addressed separately under the University's Enterprise Bargaining Agreements and associated Human Resources policies. 6.1.2 DefinitionsDifferent delegations and accountabilities will apply depending on whether an agreement executed on behalf of QUT is a contract or a memorandum of understanding. There are two types of legally binding agreements, contracts and deeds. In contrast, memoranda of understanding are not legally binding. The following definitions will assist in distinguishing a contract (or deed) from a memorandum of understanding. In this policy, the general term “ agreement ” is used where the requirements relate to both contracts and MOUs. A contract is an agreement between parties intended to have legal significance and involving the transfer of consideration (that is, value – financial or some other type of benefit - flowing from the beneficiary of the transaction). Contracts generally articulate business relationships for the acquisition or supply of goods or services, for the exploitation or transfer of intellectual property rights (eg licences) or for the provision of funding. Some contracts require reference to other University policies and procedures including:
A deed is also a form of legally binding or contractual document, but requires a greater degree of formality for its creation. The QUT Seal must be affixed to a deed and the deed must always be signed by the Vice-Chancellor (or Chancellor) and Registrar (for further details see MOPP A/1.4 ). Execution of an agreement as a deed ensures that the specified terms and conditions are legally enforceable, even in the absence of consideration or where a unilateral promise or commitment is made. A memorandum of understanding (MOU) is a document intended to formalise the terms of a relationship, arrangement or understanding between QUT and another party, but is not intended to be legally binding on either party. An MOU possesses moral force only, and is generally a formal, mutually agreed but diplomatic document, setting out principles, strategies and mechanisms for dealing with the common issues of the relationship. It may lead to the development of separate contracts with legal intent. 6.1.3 Risk managementQUT is committed to managing the risks associated with contracts and other types of agreements in a systematic way (see MOPP A/2.5 and QUT's Risk Management Framework ). Consequently, an analysis of risks and benefits must be undertaken prior to entering into the agreement, and it is the responsibility of the delegate authorised to sign the agreement to ensure that risk management issues have been addressed. Continuous evaluation of risk during performance or over the life of the agreement should also be undertaken and this is the responsibility of the designated contract or MOU manager (for further detail on the role of the contract or MOU manager, see section G/6.1.5 below). Guidelines, including a checklist of issues which should be addressed to reduce risk, information to be included in the documents to be executed and the sources of relevant advice, have been developed and are published on the Registrar's website . (a) Addressing risk prior to entering into the contract or MOU QUT should enter an agreement only after the following issues have been addressed:
(b) Standard terms and conditions Risk is mitigated when the legal effect of the contract or MOU is clear from its terms. For instance, if an arrangement is intended to be or is legally binding, it must never be referred to as an MOU. If the document is diplomatic or strategic only, it must always be referred to as a MOU and must include a clause or specific statement to the effect that it is not intended to create legally binding obligations. Risk is also reduced significantly when a contract contains standard terms and conditions to ensure all relevant matters are addressed and to aid interpretation. The following resources should be used wherever possible:
In low or medium risk contracts, non-standard contractual terms and conditions should be compared against the standard suite of contracts available from these sources and QUT standard terms added where necessary. For high risk contracts, legal advice must be obtained. (c) Obtaining advice on terms, conditions or the effect of a contract Legal advice must be sought from either the Office of Commercial Services or via the Registrar's Office where:
A contract containing a clause in which QUT indemnifies third parties can only be executed if the conditions specified in MOPP A/7.1 are met. Advice concerning indemnities can be obtained through the Division of Finance and Resource Planning. Advice on all procurement or research and other commercial contracting should be directed to Strategic Procurement, Department of Financial Services, and Office of Commercial Services, Division of Research and Commercialisation, respectively. (d) Management of risk over the life of the contract or agreement A key aspect of managing risk during the performance of the contract or agreement is the appointment of a designated contract or MOU manager. The responsibilities of the contract or MOU manager are listed in section G/6.1.5 below. Additionally, the use of appropriate records management strategies for retention of the contract or agreement documentation (records of negotiations, the signed document and later interactions with the other party/ies to the agreement) is also essential to controlling risk (see section G/6.1.6 below). 6.1.4 Delegation of authority to enter into agreementsQUT Council has delegated authority to enter/sign all contracts or agreements on behalf of the University to the Vice-Chancellor. Except in the case of University-level strategic agreements, contracts where the financial worth cannot be valued or is in excess of $1,000,000, the Vice-Chancellor has further delegated this authority to nominated senior officers of the University. Different delegations apply depending on:
A legally binding contract may be signed by a delegate provided that the contract value is consistent with the financial value or expenditure limit specified in the delegation. MOUs may only be signed by the Vice-Chancellor, the Deputy Vice-Chancellor (International and Development), the Deputy Vice-Chancellor (Research and Commercialisation), the Registrar or the executive dean of a faculty, depending on the nature of the MOU. A document under seal must always be executed by the Vice-Chancellor (or Chancellor) and Registrar. For full details, consult the Schedule of Authorities and Delegations, MOPP Appendix 3. Specific requirements for execution under seal are explained in MOPP A/1.4 . 6.1.5 Role and responsibilities of the contract or MOU managerThe delegate authorising the contract or MOU is responsible for the appointment of a contract or MOU manager. The contract or MOU manager will not normally be the authorised delegate, but another University officer having operational or administrative responsibility for matters within the scope of the document. The contract or MOU manager is responsible for:
6.1.6 Records management, storage and retentionDeveloping and retaining appropriate records of the negotiation, execution (of documentation outlining the terms and conditions) and ongoing monitoring of QUT's contracts and MOUs is vital to ensuring that the University is aware of its obligations, can protect its interests including in possible litigation, maintain corporate memory and for audit and compliance purposes. Consequently, the contract or MOU manager is responsible for ensuring that these types of records are kept. (a) Records registration The following QUT secured records management systems should be used where possible:
Where the above registers are not utilised, faculties and divisions must maintain a register of their contracts and MOUs to meet business needs, legal requirements and other compliance required by QUT policies and procedures. The following details of the contract or MOU must be registered:
To support these details, the following documentation must be managed within a recordkeeping system:
(b) Records storage The minimum level of original documentation to be stored is based on the risk / value of the contract, per the table below:
The above risks, levels and values are defined in QUT's Risk Management Framework ( A/2.5 ) and QUT's Purchasing Policy ( G/5.3 ). The mandatory periods for retention of documentation are defined in the Queensland State Archives General Retention and Disposal Schedule for Administrative Records (for contracts) or the QUT General Records Disposal Schedule (for MOUs) (refer to http://www.governance.qut.edu.au/rms/retention_disposal/ for further details). 6.1.7 Performance monitoring and periodic reviewThe contract or MOU manager must ensure that the contract or MOU is monitored and reviewed periodically over its life. For contracts, a review should not only consider the performance of suppliers against the agreed supplier SLA or KPIs, but also the performance of the contract against the benefits planned for QUT. The contract must be reviewed prior to finalisation or any extension. A contract checklist has been developed to assist contract managers in analysing and monitoring progress of the contract. A copy of the checklist can be obtained from http://www.frp.qut.edu.au/forms/contract_checklist.doc . Payments should be linked to performance as defined in the contract terms and conditions. In the case of MOUs, the MOU manager must ensure that the MOU continues to fulfil its objectives, and that all parties to the MOU continue their commitment to the relationship. An MOU should always include a time period after which a review of the agreement will be undertaken. The review should examine benefits to QUT and alignment with QUT strategic ambitions and top-level plans. Related DocumentsMOPP A1/4 QUT Seal MOPP A/2.5 Risk management MOPP A/7.1 Indemnity and insurance MOPP D/7.1 Outside work - academic staff MOPP F/8.1 Records management policy MOPP I/3.1 International institutional agreements MOPP Appendix 3 - Schedule of Authorities and Delegations QUT Financial Management Practice and Procedures Manual - chapters 1E and 4H Guidelines For Signing Contractual Documents And Memoranda Of Understanding ( Registrar's website ) QUT Insurance arrangements - http://www.frp.qut.edu.au/services/insurance/ Standing Offer (SOA) and Preferred Supplier (PSA) Arrangements Register - http://www.frp.qut.edu.au/services/procurement/ QUT General Records Disposal Schedule - http://www.governance.qut.edu.au/rms/retention_disposal/ Queensland Purchasing Better Purchasing Guides :
Australian National Audit Office Better Practice Guides - http://www.anao.gov.au/ Modification History
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