| Ten Issues to Consider When Developing Contracts
INDEX
1. What is the length of the contract (Period of Performance)?
2. What is the total amount of the contract?
3. What is the rate of pay? What are the qualifications of the contractor?
4. What is the payment schedule?
5. Is travel involved?
6. What is the scope of work? Is a budget detail required?
7. What will you require as proof of completion of the contract terms?
8. If a subcontract/subaward, were there special terms in the primary agreement?
9. Is any special documentation required from the contractor?
10. Other issues that may need to be considered
1. What is the length of the contract (Period of Performance)?
Each contract should specify the effective dates (start and end dates) of the contract. Contracts may be short-term, one year, or multi-year. In some cases, the start date is "upon execution" or "date of last signature." Start dates should NEVER be before SFA's president signs the contract.
If you know in advance that a contract will be multi-year, it is better to set up one contract for all years rather than a new contract each year. Special language can be added for annual renewal based on prior year performance and availability of funds.
For your convenience, you can enter a single Purchase Requisition to set up a multi-year Purchase Order with multiple payment lines. Funds for future years will not encumber unless and until the contract renews. Contact Purchasing for more details.
Sample Clauses
2. What is the total amount of the contract?
Be sure to specify the total amount of the contract award. In addition, be aware that if an individual's lifetime total of $25,000 in contract funds from SFA will be met over the effective period of your contract, approval by the President and posting in Texas Marketplace and the Texas Register are required. This process takes a minimum of 45 days prior to the contract start date.
The $25,000 limit is often difficult to determine because your contractor may have entered into contracts with other departments at SFA. Check with your contractor first, then with Purchasing to see how much a particular contractor has been paid to date. This will avoid potentially lengthy delays in the award of your contract. If your contractor has or will meet the $25,000 threshold, contact General Counsel for assistance with the required paperwork.
Will your individual contract exceed $100,000? If so, not only are there special requirements for awarding such a large contract, but approval is required from the SFA Board of Regents.
Refer to SFA's Purchasing Manual, pp. 6-18, for general information, policies, and procedures for contracts and the bid process.
Sample Clauses
3. What is the rate of pay? What are the qualifications of the contractor?
Rate of pay should be comparable to others performing similar services and should be reasonable. In some cases, rate of pay should be specified in the contract. In some cases, a vita may need to be attached to document the expertise of a given contractor. ORSP will be able to assist you with these issues.
Sample Clauses
4. What is the payment schedule?
Will you pay once, or will multiple payments be made on a designated timeline? Be sure to clearly outline when payments will be made and what you expect to receive in the way of products or activities before each payment is authorized. It is best if payments are tied to specific deliverables.
Sample Clauses
5. Is travel involved?
Will you pay the contractor for travel expenses in addition to a fee, or will travel be included as part of a single fee?
If travel expenses are to be paid separately, be sure to outline a reimbursement rate (contractor's, SFA's, or state of Texas travel rates) and specify if travel is in-state, out-of-state, or foreign and if per diem or actual expenses will be reimbursed. Refer to SFA's Travel Policy for additional information.
- If a contract fee states "excluding travel," travel expenses are not included in an individual's lifetime $25,000 total.
- If travel is included as part of a single fee, it will be reported on the IRS form 1099-Misc.
- If travel is paid separately on a cost-reimbursement basis, it will not be included in the total amount reported to the IRS on form 1099-Misc.
- If reimbursement for meals is on a per diem basis, it is always reported to the IRS.
- To be reported to the IRS, total reimbursements in a calendar year must exceed $600.
Non-resident aliens (non-US citizens) are required to obtain their own travel documents (passport, visa, etc.) and to provide SFA with a copy.
Sample Clauses
6. What is the scope of work? Is a budget detail required?
EVERY contract should outline what is expected from the contractor. In some cases, expectations and/or deliverables can be integrated into the body of the contract. For more extensive activities, a detailed scope of work is added as an appendix. It is best if you can tie payments to specific deliverables outlined in the scope of work.
If the contract is for development of a product for SFA that involves intellectual property (curriculum, Web site, software,
etc.), a "work for hire" statement is required.
Subawards from cost-reimbursable awards also should be cost-reimbursable and will require a detailed budget. Subawards from fixed-price awards are generally also fixed-price.
Be sure to include contact information in contracts to SFA and in subcontracts / subawards from SFA (not required in professional/consulting services agreements). ORSP should be named as the contracting contact.
Sample Clauses
7. What will you require as proof of completion of the contract terms?
If you or the Prime Sponsor will require proof of completion, be sure that you specifically outline these in the contract. Clearly outline terms that ensure you get the products or services you require.
Sample Clauses
8. If a subcontract/subaward, were there special terms in the primary agreement?
If the contract is a subaward, contract certifications, provisions, and assurances must be passed down to the subcontractor. Also, the primary agreement (a grant, cooperative agreement, or contract) could impact how you develop the statement of work and if you need any special documentation. This is particularly important for federal and state awards.
ORSP will help you to determine what you should include in your subcontract.
Sample Clauses
9. Is any special documentation required from the contractor?
Special documentation could include time sheets, effort forms, documentation of cost-share or matching requirements. Be sure to require that you actually receive any pertinent documentation before you approve contract payment.
Sample Clauses
10. Other issues that may need to be considered include:
Sample Clauses
Sample Clauses
Contract Length (Period of Performance)
This contract shall begin on _________ and shall terminate on _________.
or
The period of performance for the first contract period shall be from date of last signature
through _________ . Expenditures incurred prior to the beginning date are unallowable.
or
The period of performance shall be from _________ to ________and will be subject to
extension only by mutual agreement of the parties. Expenditures incurred prior to the
beginning date or subsequent to the termination date are unallowable.
or
This contract shall begin on _________ and shall terminate on _________. Pending
availability of grant funding and successful completion of the current year’s
activities,
the contract will automatically renew for two periods, for the terms of _________
through _________, and _________ through _________. Renewal is contingent upon
receipt of federal funding by SFASU from the Prime Contractor for each contract period
and
successful completion of the statement of work as determined by the SFASU project director.
Contract Amount, Rate of Pay, or Fees
The total contract shall not exceed $______ (_____________ dollars), exclusive of
travel and per diem. (Contractor will get fee and travel.)
or
The contractor will be paid at the rate of $___/day not to exceed ____ (__) days for a total
of $____ plus up to $_____ in personal car mileage and per diem. This contract shall not
exceed _________ dollars ($___). (Contractor will get fee and travel up to a certain limit.)
or
For the performance of this cost reimbursable Contract, SFASU shall pay the Contractor
the costs detailed in Attachment X and determined to be allowable. For the performance
of this Contract, SFASU shall reimburse the Contractor for allowable costs incurred up to
but not to exceed $_______. Reimbursement is contingent upon funds provided by the
prime funding source.
or
The contractor shall be paid at the rate of $___ (__________ dollars) per hour, not to exceed
___ hours including any or all preparation time. This contract shall not exceed $_______
(________ dollars). As an independent contractor, Contractor understands and agrees that
he/she will not be entitled to any benefits generally available to Stephen F. Austin State
University employees. (To be used for individuals.)
or
For the performance of this Contract, SFASU shall pay the Contractor a fixed cost as outlined
in the Contractor’s approved application and determined to be allowable. When the course
has been completed and contract deliverables have been approved by the SFASU Project
Director, the Contractor may request reimbursement of allowable costs incurred up to but
not to exceed $______. Reimbursement is contingent upon funds provided by the prime
funding source.
and/or
The Contractor also certifies, as documented by attachments, that he/she is qualified to
provide the specified services and/or products. Resume attached.
Travel
Stephen F. Austin State University will provide the above stated Contractor with lodging only
(room and city tax) for _____ night(s) (enter dates) at the ___________ Hotel. Additionally, the Contractor shall be reimbursed for travel expenses incurred in the pursuit of this agreement
and actual per diem. Documentation of travel costs (original receipts) shall be provided by the Contractor for all travel related expenses except mileage on personal automobile.
or
Original receipts are required for travel expenses related to car rental, commercial airlines,
parking, taxi, etc. Meals taken during the travel period will be reimbursed with documentation
(original receipts). Mileage will be tallied using the Texas Official State Mileage Guide and
shall be reimbursed at the current prevailing rate approved by Stephen F. Austin State
University Board of Regents.
or
The contractor shall bear any and all expenses related to travel incurred in the pursuit
of this contract.
or
The contractor shall be paid a fee of $______ for preparation and delivery of __________
plus reimbursement for documented travel expenses and actual per diem up to an
additional $___. Original receipts are required for travel expenses related to car rental,
commercial airlines, parking, taxi, etc. Meals taken during the travel period will be reimbursed
with documentation (original receipts). Mileage will be tallied using the Texas Official State
Mileage Guide and shall be reimbursed at the current prevailing rate approved by Stephen
F. Austin State University Board of Regents.
or
The contractor shall be reimbursed for actual mileage and per diem. Reimbursement for
actual personal vehicle mileage incurred in the pursuit of this contract requires beginning
and ending odometer readings and will be reimbursed at the current state rate. Receipts
are not required for meals; however, reimbursement for meals will not exceed $36.00/day.
Payment Terms and Schedules
The Contractor may submit invoices to SFASU not more frequently than (monthly, quarterly).
Said invoices should be properly prepared on entity letterhead, should certify that all payments requested are for appropriate purposes and in accordance with the agreements set forth
in the proposal and award documents, should itemize the costs by budget category per
Attachment X, and should be signed by Contractor’s duly authorized representative. Promptly
after receipt of each invoice, SFASU shall make payment thereof except as provided herein.
All invoices should be mailed to __________, Stephen F. Austin State University,
PO Box ______, Nacogdoches, Texas 75962. The final invoice must be submitted within
thirty (30) calendar days after the termination date of this Contract and must be marked
“FINAL” by the Contractor.
or
For the performance of this cost reimbursable Contract, SFASU shall pay the Contractor
the costs detailed in Attachment X and determined to be allowable. For the performance
of the first contract period (_______– _______), SFASU shall reimburse the Contractor for
allowable costs incurred up to but not to exceed $_______. Reimbursement is contingent
upon funds provided by the prime funding source. Funding for subsequent years is detailed
in Attachment X and is contingent upon continuation of the prime award, the availability of
funding from the U.S. Department of _______ and satisfactory performance by the Contractor.
or
Contractor may submit invoices for costs incurred no more than monthly to the Project
Director. The contractor will bill for evaluation services at a maximum daily rate of $___.
Final reimbursement depends on all certifications of contractor being submitted no later
than ____ working days after termination of the contracted services. Reimbursement is
dependent upon the contractor submitting reports certifying the services agreed to were
provided. Reimbursement will be made at the rate specified, subject to satisfactory
performance and progress having been determined by the Project Director, designated below.
or
Contractor shall receive two (2) equal payments of $________, the first payment to be
made not later than ___________. The second payment of $_______ shall be made
not later than ___________. As an independent contractor, Contractor understands and
agrees that he/she will not be entitled to any benefits generally available to Stephen F.
Austin State University employees.
or
The Contractor shall submit invoices on the payment schedule outlined above and
reports reflecting work completed to date. As an independent contractor, the Contractor
understands and agrees that he/she will not be entitled to any benefits generally
available to SFASU employees. Payment is contingent on receipt of federal funding by
SFASU from the Prime Contractor.
or
The contractor shall be paid on the following schedule. 1) $_____ after the publication
of the curriculum material to the Web site (invoice submitted by ___________);
2) $_____ at the end of the fall ____ semester (invoice submitted by _________);
3) $_____ at the end of the spring ____ semester (invoice submitted by ______).
The total contract shall not exceed $______ (___________ dollars). The Contractor
shall submit invoices on the payment schedule outlined above and reports reflecting
work completed to date.
or
Payment is to be made to the contractor immediately upon completion of the contracted service.
Scope of Work
The Contractor shall furnish the necessary personnel, materials, services, facilities,
and equipment, and otherwise do all things necessary for the performance of its work
described in Attachment X.
or
For curriculum development, Web site development, software development, etc.:
This agreement shall constitute a "work for hire" under U.S. Copyright law. Ownership
of the work shall belong to the University. The work may be edited at any time within the
University's discretion.
Document Completion of Work
All reimbursements depend on all certifications of contractor being submitted no later
than ____ working days after termination of the contracted services.
or
Reimbursement is dependent upon the contractor submitting an invoice summarizing and
certifying the services agreed to were provided. Reimbursement will be made at the rate
specified, subject to satisfactory performance and progress having been determined by the
Project Director, designated below.
or
The Contractor shall submit reports in such quantity and frequency as determined
reasonably appropriate by SFASU’s Project Director. The Contractor agrees to provide
a minimum of one written progress report to the Project Director every month for the
duration of the project. Such report shall note progress made toward achievement of the
project objectives and any deviation from the schedules, methods and tasks established
in the proposal and detailed work plan. Additionally, a final report will be required within
sixty (60) days of the completion of the project.
Special Terms in the Primary Agreement
Prime Agreement Terms and Conditions. This agreement is further governed by the
terms and conditions of the Prime Agreement between SFASU and the ____________,
Contract (award) Number ______________. Should a conflict between provisions occur,
the terms of the prime agreement shall take precedence over the terms and conditions of
this contract. The General Conditions of the Prime Agreement are attached (Attachment X).
or
Contractor shall reimburse to SFASU a sum of money equivalent to the amount of any
expenditures disallowed should the funding agency or authorized agency rule through
audit exception, or some other appropriate means, that the expenditures were not made
in compliance with the regulations of the funding agency or the provisions of this Contract.
or
The Contractor shall require the language of this certification be included in the award
documents for all subawards at all tiers (including subcontracts, subgrants, and contracts
under grants, loans, and cooperative agreements) and that all recipients shall certify and
disclose accordingly.
Special Documentation Required
The Contractor also certifies, as documented by attachments, that he/she is qualified to
provide the specified services and/or products. Resume attached.
or
Cost Sharing. Contractor shall be responsible for cost sharing for the first contract period
(______– ______) in the amount of $________ in accordance with the proposal for this
project and as detailed in Attachment X. No federal funds shall be used as the source of
this cost sharing. Cost sharing verification (source of funds and backup documentation)
shall be provided to SFASU on an annual basis and/or upon request of SFASU. The backup documentation shall include copies of payroll records, invoices or such other documentation
as to fully substantiate the cost sharing support to the satisfaction of SFASU. All original
receipts and other forms of documentation for cost sharing shall be retained by the Contractor
for a period of three (3) years after the term date of this Contract and shall be available to
any auditor of SFASU or the U. S. Department of Education upon request. Cost sharing for
subsequent years is detailed in Attachment X and is contingent upon continuation of the
prime award from the U.S. Department of Education.
Visa Required
The contractor will be responsible for obtaining a ___ (type of) visa and other travel documents.
The contractor must submit a copy of the visa to the Project Director at the time the contract
is signed by the contractor.
Contact Information
Contact Information:
The individual named below is the PERFORMING PARTY Project Representative, who is authorized to give and receive communications and directions on behalf of the PERFORMING PARTY. All communications to the PERFORMING PARTY will be addressed to the PERFORMING PARTY Project Representative or his or her designee.
For Technical Matters:
____________________________________ Telephone No.: ____________
(Name)
____________________________________ Facsimile No.: _____________
(Title)
_____________________________________________________________
(Mailing Address)
_____________________________________________________________
(City) (State) (Zip Code)
For Contractual Matters:
Carrie H. Brown, Ph.D. ___________________Telephone No.: (936) 468-6606
(Name)
Director, ORSP_________________________ Facsimile No.: (936) 468-1251
(Title)
PO Box 13024 , SFA Station_______________________________________
(Mailing Address)
Nacogdoches, Texas 75962-3074__________________________________
(City) (State) (Zip Code)
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