5.7 Contracts

Objective #

To provide policies and guidance on the University of Tennessee Foundation’s (UTFI) contracting process.

Applicability #

These policies apply to all contracts except the following: (1) real property acquisition and disposition contracts (see 5.20 Real Estate Disposition); (2) contracts for legal services; and (3) gift agreements (see 6.1 Gift Acceptance, particularly the section on gift agreements)

General Policies #

1. 1. The contracting process should allow a minimum of two weeks to have fully executed
   2. Departments shall determine that the services are necessary.
   3. Contracts will generally only be entered into with independent contractors. Independent contractors are individuals or firms that (1) are engaged to perform specific services for a stated fee or contracted amount, (2) provide services to the public, and (3) are subject to UTFI control only as to the end results, and not the methods of obtaining them. NOTE: For purposes of this policy, contracts of employment are not considered to be for personal, professional, or consultant
   4. UTFI may require the contractor to furnish a performance bond or other proof of insurance coverage.
   5. Any service /contract in excess of $10,000 must go through the UTFI contract process.
   6. A formal contract is not required when the cost of the service to be provided is $10,000 or less. Any service / contract from $0-$9999 that requires a signature, must be forwarded to the UTFI Business Office Contracts and Purchasing Coordinator for evaluation
   7. Deposits and prepayments are discouraged and should be avoided at all costs (see 5.2 Advance Payments ).

Term of Contracts #

Under ordinary circumstances, contracts shall not be executed for longer than one year; however, longer-term contracts of five years or less may be executed when substantial savings can result, when a special project requires continuing a particular contractor’s services for a longer term, or if UTFI’s President Chief Financial Officer approves the contract. In addition, contracts exceeding five years may be executed if the contract is with an agency of the state of Tennessee or other governmental unit, if the contract requires no expenditure of funds by UTFI, or if any statutes or regulations specifically authorize a longer-term contract in a particular case. Automatic renewals with cancellation requirements should be avoided.

Prohibitions #

1. Employees may not receive, directly or indirectly, any amount of the contract as wages, compensation, or gifts in exchange for acting as an officer, agent, employee, subcontractor, or consultant relative to the contract.
2. Contracts with former employees are prohibited for six months after termination. However, this restriction does not apply to individuals who are classified as “friends” or individuals who have a “special appointment” and who have not been paid in the last six months.
3. Contracts with a company or corporation in which an employee(s) of UTFI, the University of Tennessee, Board of Regents, or other agency of the state of Tennessee holds a controlling interest are prohibited during such employment and for six months beyond termination. (An individual with controlling interest owns or controls the largest number of outstanding shares owned by a single individual or corporation, TCA 12-4-101.)
4. Contracts are prohibited with a firm, company, or corporation in which a UTFI employee, his or her spouse, or dependent children has more than a five percent financial interest (excluding stocks or bonds in a publicly held corporation) and when the employee may directly or indirectly influence vendor selection.

Exceptions to Policy #

Certain conditions exist for which these policies do not apply, including in certain cases, the president or CFO (or designee) may make exceptions to the rules and procedures in this policy and may direct or approve alternate forms of negotiations for service contracts, provided a statement of the reasons is submitted with the executed contract and maintained in the permanent document files.

Soliciting Proposals #

When soliciting formal, written proposals from potential vendors (firms), departments will consult with UTFI Contracts and Purchasing Coordinator to either prepare such proposals or make suggestions in preparing a Request For Proposal.

Verbal Negotiation #

When two or more sources can provide the desired services, verbal negotiation of the terms of a contract is encouraged and should be referenced in the contract process. Any verbal negotiations that may take place shall be conducted in a manner so as not to disclose any information from a competitor’s proposed terms that would unfairly enable another proposer to improve his proposal as a result. No other information shall be given to a proposer that would provide an unfair advantage over others.

Non-Competitive Contracting #

1. Contracts shall be let on a competitive basis whenever possible.
2. For contracts $10,000 or higher, departments must justify their vendor choice by providing a detailed explanation of the selection process including price comparisons between vendors if applicable.
3. Reasons for a non-competitive contract:
   1. When only one product or service can meet the specific need and the product or services is available from only one source.
   2. Urgent need prevents competitive methods.
   3. Compatibility or consistency with past acquisitions of products or services is essential (e.g. avoiding additional costs by changing the supplier of product or service).
   4. The contract is for services from a governmental unit, such as a state or federal agency or from a college or university.

Drafting Contracts #

If a contract is needed and the vendor does not supply one, the Contracts and Purchasing Coordinator can draft a contract.

Reviewing Contracts #

All contracts must be reviewed before being executed (signed) on behalf of UTFI. This does not prohibit departments from obtaining the signature of the contracting party prior to approval by UTFI. The president or CFO, and affected parties will review the contract. For contracts with corporations, UTFI may require either or both of the following documentation before approval of the contract: Proper authorization to conduct business as a corporation, including a copy of the corporate charter. Appropriate evidence that the individual signing on behalf of the corporation has authority to bind the corporation.

Executing Contracts #

All contracts must be executed by the, President and/or Executive Vice President or CFO as provided in Article X, Section 3 of the UTFI Bylaws (or by other parties who are granted authority to execute contracts by the UTFI board). NOTE: An official otherwise authorized to execute a contract on behalf of UTFI may not do so for contracts involving entities in which that individual is also an officer. Faxed and photocopied contracts from the other party are acceptable and will be considered the equivalent of an original by UTFI.

Contractors and Conflict of Interest #

Individuals and entities that contract with UTFI shall avoid at all times any conflict of interests between their duties and responsibilities as contractors and their interests outside the scope of any current and future contracts. Also, a contractor’s outside financial interests shall not affect the design, conduct, or reporting of research. Contractors must certify that they have no conflicts of interests and have disclosed in writing their applicable interests and interests of other individuals such as their partners and relatives.

Data Confidentiality and Security #

All information, in any form, about UT alumni and UT/UTFI donors, donor prospects, and friends is confidential. Any vendor that will have access to this confidential information must sign UTFI’s Data Confidentiality and Security form. (see Policy 1.1.3)

Non-Discrimination/Illegal Immigrants #

The successful vendor must agree to the following non-discrimination clause: No person on the grounds of disability, age, race, color, religion, sex, national origin, military veteran status or any other classification protected by applicable Federal and/or Tennessee State law shall be excluded from participation in, or be denied benefits of, or be otherwise subjected to discrimination in the performance of this Contract. The Contractor shall, upon request, show proof of such non-discrimination, and shall post in conspicuous places, available to all employees and applicants, notice of nondiscrimination. This contractor and subcontractor shall abide by the requirements of 41 CFR 471.2(b) and 29 CFR Part 471, Appendix A to Subpart A. (Required for all contracts) This contractor and subcontractor shall abide by the requirements of 41 CFR 60-741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities. (Required for contracts $10,000 or more) This contractor and subcontractor shall abide by the requirements of 41 CFR 60-300.5(a). This regulation prohibits discrimination against qualified protected military veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans. (Required for contracts $100,000 or more) The Contractor hereby attests that the Contractor shall not knowingly utilize the services of an illegal immigrant in the United States in the performance of this Contract and shall not knowingly utilize the services of any subcontractor who will utilize the services of an illegal immigrant in the United States in the performance of this Contract. (Required for all contracts). 
Updated: June 1, 2021