section vii. legal affairs contract review procedures

1ContractReviewProcedures

SectionVII.LegalAffairsContractReviewProcedures

TheseproceduressupplementandclarifySectionVII.oftheLoneStarCollegeSystemDistrictPolicy Manual (“Policy Manual”) last revised by the Board of Trustees on February 5,2015—settingouttheCollege’spoliciesregardingtheOfficeoftheGeneralCounsel(“OGC”).

ThePolicyManual controlswhena conflict arisesbetween it and theproceduresbelow.TheseprocedureswereadoptedonAugust 2018.ThenoticeandcommentperiodfortheseprocedureswasopentothepubliconlinefromJune27,2018toJuly27,2018.

1. ScopeofProcedures. The procedures below are intended to apply to all Collegecontractsexceptforemploymentcontractsandcontractsforlegalservices.

2. Definitions

a. ContractmeansawrittendocumentintendedtocreatebindingrightsandobligationsbetweentheCollege(oroneormoreofitscolleges)andanyotherpersonorentity,including but not limited to any amendment, addendum, schedule, renewal, orextensiontoanothercontract.

b. StandardContractmeansthecurrentversionofaformcontractpre‐approvedbyOGC with no subsequent modifications, including page additions, except for theappropriate information entered into the empty, designated fields. The language,“StandardFormApprovedbyLoneStarCollegeOfficeoftheGeneralCounsel”inthefooteroftheformcontractdenotesaStandardContract.

c. Non‐standardContractmeansanycontractthatisnotastandardcontract,includinganymodifiedStandardContract.

3. DoesOGCNeedtoReviewthisContract?ToprotecttheCollegefromlegalrisk,OGCmust reviewall contracts—regardless of the contract’s value—absent awritten variancefrom the General Counsel. However, unmodified standard contracts totaling less than$50,000ofCollegeexpensesdonotrequireadditionalOGCreview.Collegeemployeesmaydownloadcurrentversionsofstandardcontractsat:

https://intranet.lonestar.edu/OGC/SharedDocuments/Forms/AllItems.aspx.

Downloadthecurrentversioneachtimeyouuseastandardcontract;oldversionsarenotapprovedforusewithoutadditionalOGCreview.TheoriginatingdepartmentmustreviewFormVII.1. Contract Review Checklist included in the appendix to these procedures. Allstandard contracts must satisfy the criteria within that checklist, and the originatingdepartment is responsible for any failure to verify the criteria therein. The originatingdepartmentshouldreviewallcontractprovisionsandcorrespondingdocumentstoensurethatallinformationisaccurateandthattheintendedbusinessoutcomeislikelytoresult.Thechecklistisfortheoriginatingdepartment’srecordsandshouldnotbesenttoOGC.

Standardcontractstotaling$50,000ormoreofCollegeexpensesandnon‐standardcontractsrequire specificOGC review regardless of the sum at issue. Some example scenarios are

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2ContractReviewProcedures

included intheappendixto theseprocedures. IfunsurewhetheracontractrequiresOGCreview,pleasesubmititforOGCreview.

4. HowtoSubmitaContractforOGCReview.

a. Pre‐SubmissionChecklist.

Before submitting a contract for OGC review, the originating department must reviewFormVII.1. ContractReview Checklist included in the appendix to these procedures. Theoriginating department is responsible for any failure to verify the criteria therein. Theoriginatingdepartmentshouldreviewallcontractprovisionsandcorrespondingdocumentstoensurethatallinformationisaccurateandthattheintendedbusinessoutcomeislikelytoresult.Thechecklistisfortheoriginatingdepartment’srecordsandshouldnotbesenttoOGC.

b. SubmittingaContractforOGCReview.

TosubmitacontractforOGCreview,pleasefollowthestepslistedintheappendixtotheseproceduresentitled“SubmittingaRequestforContractReviewinServiceNow.”

5. OGCContractReview.

TheassignedOGCattorneywillreviewtheproposedcontractforlegalissuesandrisks.Theattorney will either approve the contract or respond to the requester explaining whatchanges are recommendedby theOGCattorney to theproposed contract. The requestermustthenasktheotherpartywhetheritwillagreetotherequestedchanges,independentof the OGC attorney’s email to the requestor. This is NOT done by forwarding theattorney’sconfidentialemailtotheotherparty.

6. Variances.OGCrecognizesthattheCollege’soperationalneeds,asdeterminedbytheCollege’sseniorleadership,willsometimesrequiretheCollegetoenterintocontractswithprovisions that vary from the College’s standard contractual terms and conditions,presentinglegalriskstotheCollege.IftheotherpartywillnotagreetothecontractualtermsandconditionsrequestedbyLoneStarCollege,theCollege(oroneormoreofitscolleges)may not execute that contract unless the Chancellor’s Cabinet member ultimatelyresponsibleforthatcontractapprovesacontractvarianceinwritingafterconsideringOGC’sadvice regarding the legal risks that the contract presents. OGCwill coordinate contractvariancereviewwiththeappropriateseniorleadership.

7. Execution.StandardcontractsnotrequiringadditionalOGCreviewmaybeexecutedbyauthorizedrepresentativesofbothparties.Insuchcases,OGCdoesnotneedtoseethecontract before or after it is executed unless and until a dispute later arises under thatcontract, but the originating department should retain a copy (electronic is fine) of thecontractinitsfilesforreferenceforatleastfouryears,oraslongasotherwiserequiredbylaw,afterthecontracttermhasended.

ForcontractsrequiringspecificOGCreview,oncethepartieshaveagreedonalltermsandconditions,anOGCattorneywillstampthecontract,signalingOGCreviewofthedocument,

3ContractReviewProcedures

fortheCollege’sauthorizedrepresentativetosign.Whenpossible,theothercontractpartyshould sign the contract before the College representative signs. Once all parties haveexecutedthecontract,theoriginatingdepartmentshouldretainacopy(electronicisfine)initsfilesandsendacopytoOGCandtotheotherpartyifitdoesnotalreadyhaveacopyofthefullyexecutedcontract.

ForOGC’spurposes,electroniccopiesofcontractsaresufficient.Occasionally,anotherpartywillrequestanoriginal“wetink”signatureonitscopyofthecontract.OGCwillcoordinatewiththerequestorwhenwetinksignaturesarerequested.Notarysignaturesandnotarizedsignaturesmustbeoriginallysignedinperson,butelectroniccopiesofsuchsignaturesaresufficientonceoneoriginalhasbeensigned.

Whenacontractauthorizescounterpartsignatures, theparties’ representativesneednotplace their signatures on the same signature page of the contract; theymay each sign asignaturepage,andthecombinedsignaturepagesarethecontract’ssignaturepage.

Ifacontractrequiresthepartiestoinitialanyspecificclausesthathavebeenmodifiedoradded,bothparties’authorizedrepresentativesmustinitialwhereindicatedforthecontracttobefullyexecuted.

8. DelegationofContractAuthority.Contractsdonot bind theCollegeunless theyhavebeensignedbytheparties’authorizedrepresentatives.OnlyindividualswithexpresslydelegatedcontractauthoritymaysigncontractsontheCollege’sbehalf,andnoindividualmaycontractuallybindtheCollege(oritscolleges)beyondthelimitofhisorherdelegatedauthority.ContractauthorityisdelegatedbypolicyandbyBoardactionfromtheBoardofTrustees to the Chancellor. The Chancellor may delegate contract authority in any sumwithin the Chancellor’s authority to one or more College employees and may permitadditionalsub‐delegationofcontractauthority.Thoseempoweredtosub‐delegatecontractauthority may do so. Individuals who have received delegated contract authority areresponsiblefortheiruseofthatauthority.

DelegationsofcontractauthorityarenoteffectiveunlesstheyarewrittenandsubmittedtoOGCusingFormVII.2.DelegationofContractAuthority included in theappendix to theseprocedures.

The delegator may amend or revoke delegations of contract authority at any time bydeliveringwrittennoticetoOGC.Adelegationofcontractauthorityisautomaticallyrevokedwhen the delegator’s or delegee’s College employment is terminated, suspended, ortransferred to another position.When a delegation of contract authority is revoked, allsub‐delegationsofcontractauthoritymadeundertheformer(nowrevoked)delegationarealsorevoked.

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APPENDIX&FORMS

DoesOGCNeedtoReviewThisContract?—Examples

Example1:Acollegedepartmentplanstouseastandardcontracttoobtain$10,000ofservices.Anaddendumisattachedtoexplaintheservicestheotherpartywillprovide.OGCmust review this contract because the addendum is amodification thatmakes thecontractanon‐standardcontract.

Example 2: A college department plans to purchase goods for $30,000 using thevendor’s contract. OGC has reviewed this vendor’s contract in the past and approved itwithoutchanges.OGCmustreviewthecontractagaineachtimethevendor’scontractisusedbecauseitisanon‐standardcontract.

Example 3: A college plans to execute a “Memorandum of Understanding”with anon‐profitentitytoaccomplishasharedobjective.OGCmustreviewthiscontract.

Example4:Acollegedepartmentplanstouseastandardcontracttopurchasefourmonthsofservicesforatotalof$44,000.OGCdoesnotneedtoreviewthiscontractifthereare nomodifications to the approved form other than filling in blankswith appropriateinformationsuchastheotherparty’sname,thepurchaseprice,andthedateofthecontract.

Example5:ThesameasExample4,exceptthatthecontractincludesanaddendumdescribing the services to be performed. OGC must review this contract because theaddendummakesthecontractanon‐standardcontract.

Example6:ThesameasExample4,exceptthatthedepartmentwantstoextendthecontractforanothermonth,bringingthetotalcostto$55,000.OGCmustspecificallyreviewthiscontractbecauseitisformorethan$50,000.

Example7:Acollegedepartmentplanstouseanon‐standardcontractthatincludesonlinetermsandconditionsthatmustbeacceptedthroughthevendor’swebsite.OGCmustreview those online terms and conditions, aswell as thenon‐standard contract, prior tocontractexecution.

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SubmittingaRequestforContractReviewinServiceNow

1. GototheServicePortal(lonestar.service‐now.com/sp).

2. Select“OGCServices.”

3. Select“Contracts.”

4. Select“ContractRequest.”

5. Fillintheformfieldsasfollows:

a. Acknowledgment Checkbox: Check the box marked “I acknowledge” toacknowledgethatyouhavereadthenoteatthetopsaying,“Thissubmissioncontains certifications that may give rise to personal, criminal, and civilpenaltiesunderTexaslaw.”(Thistextwillbemovedtothecheckboxinfutureupdates.)

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b. RequestedBy:Thepersonsubmittingtheformisthe“Requestedby”person.Thisshouldauto‐populatewithyourname.

c. RequestedFor:Ifyouaresubmittingtherequestonbehalfofsomeoneelse,selectthatpersoninthe“RequestedFor”field.

d. ShortDescription:Thisshouldbrieflyclarifywhothecontract iswithandwhat the contract is for. Example: “WillyWonka Chocolate Factory—TourLiabilityReleaseAgreement.”

e. Fulldescription:AnyinformationaboutthecontractwhichtheOGCattorneyneedstoknowtoreviewit.

f. Selectyourcollege/center:Thisisyourlocation,notnecessarilythelocationofthecontract.Thiswillselectwhomustcertifytherequest.

g. Verification.Checktheboxmarked“Iverify”toverifythattherequestorsandcertifiershaveobtained theproperprocurementapprovals for thecontractpriortosubmittingtoOGCforreview.

h. Contractstartdate:Ifunknownor“uponexecution,”itisokaytoestimateatimeinthefuture.Pleasemakethisselectionusingthecalendar.Donotenterthedateastext.AbuginServiceNow(whichwillbefixedinthenextsystemupdate)willpreventthedatefrombeingvisibletousifyoudonotusethecalendardropdown.

i. Contractenddate:Similarly,pleaseestimateifyoudon’thaveanexactdate,andpleaseusethecalendar.

j. Amount:Thetotalcontractcostoveritsfullterm.Ifnone,put“0”(notN/A).

k. Contractwith:Thenameoftheotherparty/company.

l. BoardContractCheckbox:SelectthisifthecontractrequiresBoardapproval,andbesuretoattachtheBoardAgendaItem.

m. File Type: Self‐explanatory; for any contract that is not an affiliation orfacilitiesagreement,select“Non‐StandardAgreement.”IfyouareusinganOGCstandardform,youdonotneedtosubmitittoOGCforreviewunlessyouorthe other party has made changes to the form (including adding anyattachment,addendum,exhibit,etc.)orunlesstheagreementisformorethan$50,000orfortheChancellor’ssignature.

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n. Rush:Ifyouneedthiscontractveryquickly,select“yes”andenterareasonfor the rush request. We cannot provide exact estimates of contractturnaroundtime.PleasecontacttheassignedOGCattorneyorparalegalforastatusupdate.Pleasealsorecognize thatOGC isresponsible forhelping theentire systemandyour rushcontractmustbeweighedrelative toallotherrushes.Pleasetrytousetherushoptionsparingly.Wheneverycontractfromyourdepartmentisarush,itsetsabadprecedent.

6. Attachacopyoftheagreement(includingallpages,amendments,exhibits,etc.)andallsupportingdocumentation(emails,BoardAgendaItems,vendorproposals,etc.)requiredforreview.Youmaydothiseitherbydragginganddroppingfilesontothewindoworbyclicking“Addattachments”atthebottomoftheform.

7. Afteryouhavedouble‐checkedallinformation,click“Submit.”

8. Therequestwillbesubmittedfirsttothe“Requestedfor”individualforapproval(ifnot the same as the “Requested by”) and then to the Certifier (generally theChancellor’sCabinetMemberoveryour locationorarea).Oncecertified, itwillbesubmitted toOGCandassigned toanattorney.Amatter isnotreceivedbyOGCunlessanduntilitiscertified,andOGCisnotresponsibleforgettingcertifierstocertifyorrejectamatter.Youwillbeabletotrackthestatusofthematterbyaccessing“MyTickets”ontherightsideofthetopnavigationbartheServicePortal.

9. If OGC requires any further information from you, you will receive an emailnotificationandthemattermayshowas“WaitingonClient.”

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FormVII.1:ContractReviewChecklist DONOTSUBMITTHISFORMTOOGC.Thisisonlyheretohelpyou.As provided in the College’s Contract Review Procedures, a contract’soriginatingdepartmentandtheOfficeoftheGeneralCounsel(OGC)usethiscontract checklist to ensure that College contracts complywith relevantlawsandCollegepoliciesandprocedures.Before submitting a contract forOGC review, orwhen consideringuse of anunmodifiedstandardcontractnotrequiredtobesubmittedforOGCreview,theoriginatingdepartmentisresponsibleforensuringthatacontractsatisfiesthecriteriainthischecklist.Thechecklistisfortheoriginatingdepartment’srecordsanddoesnotneedtobesenttoOGC.

1. The contract ___ requires or ___doesnot require (mark one) Board of Trusteesapproval.BoardPolicyManualSectionIII.D.1.3.listsmosttypesofcontractsthatrequireBoardapproval.IfyouhavequestionsregardingtheapplicabilityofBoardapprovaltoyour matter, please contact OGC. Note: The Board of Trustees delegates signatureauthoritytotheChancellorordesigneeforcontractsrequiringBoardapproval.

2.IfthecontractdoesnotrequireBoardapproval,identifytheindividualwithdelegatedauthoritywhowillsignthecontractontheCollege’sbehalf.

3.Ifapplicable,theCollegehascompliedwithalllegallyrequiredcompetitiveprocessesbefore selecting the other party to this contract. If you have questions regardingapplicablecompetitiveprocesses,pleasecontacttheCollege’sProcurementdepartment.

4.Isthiscontractasolesourcepurchasefor$50,000ormore?Ifso,hasasolesourceaffidavitbeenexecuted?

5.WillgrantfundsawardedtotheCollegebespentunderthisagreement?Ifso,hastheCollege’sResourceDevelopmentAdministrationteambeeninvolveduptothispoint?Ifnot,pleasecontactthembeforeprocessingthecontractanyfurther.

6.Thefollowinginformationabouttheotherpartyisaccurate:

LegalName StreetAddress

7.Theotherparty’sidentity(foranindividual)orlegalstatus(foranentity)hasbeenverified.

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8.Ifpaymentswillbemade,theCollegeisthe___payoror___payee(markone)underthisproposedcontract.

9.Thefollowinginformationabouttheproposedtransactionisaccurate:GeneralSumtobepaid Contractstartdate Contractenddate GoodsDescriptionofgoods

Deliverydate ServicesDescriptionofservices

Servicestartdate Serviceenddate

10.Theoriginatingdepartmenthasreviewedallcontractprovisionsandcorrespondingattachmentsandexhibitsandhasensuredthatallinformationthereinisaccurateandthattheintendedbusinessoutcomesarelikelytoresult.

11.Theproposedcontractclearlyidentifiestheparties’rightsandobligations,includinganytimeframesforperformingsuchobligations.Theoriginatingdepartmentshouldwork out any adjustments in a contract’s business terms before submitting acontractforOGCreview.

12. The College can reasonably fulfill its obligations under the contract within thespecifiedtimeframe.

13.ThecontractwouldprovidevaluetotheCollegeandwouldensureadequatereturnforanypublicfundstobespentand/orpublicpropertytobeusedduringthecontract.

14. The contract’s termdoesnot exceed a cumulativeperiod of five years, includingrenewalterms.ContractsfortheCollegetopurchasegoodsandservicesmaynotexceedfiveyearsunderBoardpolicy.

15.TheCollegeemployeesworkingonthiscontractknowofnoillegalityorunethicalconductassociatedwiththecontract.

FormVII.2:DelegationofContractAuthority Delegee: __________________________________________________________________ NameandTitle __________________________________________ SignatureDelegator: __________________________________________________________________ NameandTitle __________________________________________ Signature

Date: ______________________________

Subject: DelegationofAuthoritytoApproveandExecuteContractsLoneStarCollegePolicyManual—AuthoritytoPurchaseGoodsandServices

UndertheCollege’sPolicyManualandChancellor’sProcedures,thismemorandumconfirmsthatthedelegeenamedabovehasdelegatedauthorityfromthedelegatortoapproveandexecute contracts that are less than $___________________ within the delegee’s area ofresponsibility.Thisdelegation___includesor___doesnotinclude(markone)authoritytosub‐delegatecontractauthorityunderestablishedprocedures.Thisdelegationsupersedesandwillgovernanypriordelegationofauthorityissuedtothedelegee.Thisdelegationofauthoritywill continueas longasyouareanemployeeof theCollegeunlessamendedorrevokedatthesolediscretionofthedelegatororthedelegator’ssupervisor(s)orbyautomaticrevocationunderrelevantChancellor’sProcedures.Further, thisdelegationandyour approval andexecutionof contracts are subject to andlimitedby(i)existingand/or futureBoardofTrusteepolicies; (ii)existingand/or futureChancellor’sProcedures;and(iii)reviewandapprovalofallproposedcontractsastolegalformbytheOfficeoftheGeneralCounsel.

cc:MarioK.Castillo,GeneralCounsel