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Contract Administration Training

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ODU Procurement Services

on 12 July 2016

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Transcript of Contract Administration Training

At a minimum, the contract administrator is responsible for ensuring:

the review and approval of invoices submitted for payment by the Contractor,

the contract in use is still valid,

the Contractor is providing timely goods and/or services in accordance with the contract requirements,

the contract file is complete, and

the contract renewal surveys are completed.
Contract Administration Training
Presented By
The Department of Procurement Services

The Contract
Contract Administration
What needs to be in the Contract Administration File?
Contract Modifications & Change Orders
End of the Contract
Inspection
Welcome!
Topic
Information
Goods & Services
Inspection
Receiving
Shipping & Delivery
Shipping terms: The general policy of the University is to request all goods be shipped F.O.B. Destination, with all shipping charges pre-paid and allowed.
Receiving personnel, contract administrators, and vendors must comply with shipping terms contained in the purchase order or contract document.

Delivery must be made by the date specified in the contract or the Contractor may be considered to be in default.
Invoicing
Prompt Payment
Who is a Contract Administrator?
The contract administrator should generally be the end user of the contract or one who has a vested interest in the procurement and who will be responsible for the proper adherence to all contract specifications by the Contractor.

The contract administrator is responsible for ensuring that the goods or services are provided in accordance with the terms of the contract.
The Basics
Who is a Contract Administrator?
What is a Contact?
What is Contract Administration?
Contract administration includes all actions taken by the University related to a specific contract after the award is made. Its purpose is to assure that the Contractor and the University fulfill their contractual obligations.
What is Contract Administration?
No-Fault Rejection
Rejection
Over Shipments/Overruns
Sub 1
Topic
What is a Contract?
A legally enforceable agreement between two or more competent parties in which an offer is made and accepted, and lawful consideration is exchanged.
Formal contracts:
As appropriate, the procurement officer will delegate in writing a specific individual to act as the contract administrator via a Contract Administration Memo.
eVA POs: A contract administrator will generally not be designated in writing for eVA purchase orders, and the department requestor is considered the Contract Administrator.
The designated Contract Administrator is responsible for ensuring that they and any staff members having duties related to administering the contract, adhere to the policies in Article 6., Ethics in Public Contracting, as described in the Virginia Public Procurement Act, Chapter 43 of Title 2.2 of the Code of Virginia. (See link on resource page.)

Failure to follow the guidelines specifically defined and related to their role and responsibilities as Contract Administrator may result in removal as Contract Administrator, and, depending on the nature of the violation, may result in further disciplinary action.

What is the Contract Administrator Responsible for?

What is the Contract Administrator Responsible for?

After issuance of a formal contract award document, the Department of Procurement Services designates a contract administrator in writing.
Acceptance
Inspection
– Examination of goods or services delivered.

Receiving
- Personnel who receive the goods/services are responsible for appropriate inspection prior to accepting an order. They are also responsible for completing and submitting the Banner e-receiver in an accurate and timely manner.

Acceptance
- Ordering departments are responsible for accepting goods or services purchased by their department, except:
ETF purchases & other purchases that require delivery to the Property Control Warehouse. Property Control will accept & process e-receivers for these items.
Receiving
Defective Invoices - Accounts Payable must notify the Contractor within 15 days of an invoice defect or impropriety if the defect or impropriety would prevent payment by the due date.


Examples of impropriety in the invoice include missing purchase order number, changes in unit price, extension errors, totaling errors, etc.
The contract administrator’s file must contain, at a minimum:
the contract administration designation letter,
a complete copy of the contract,
contract modifications,
all related invoicing and payment records,
vendor performance documentation,
copy of completed Contractor Evaluation Survey,
signed renewal forms, and
any reports required by the contract terms.
Requests for changes affecting price, quality, quantity, delivery or cancellation require a written justification by the department.
All change orders should be evaluated for contract validity and price reasonableness.

Change orders exceeding a requestor’s delegated purchasing authority and all contract modifications require Procurement Services review and approval.

eVA users process change order requests via eVA. Non-eVA users submit requests for change orders to the appropriate Procurement Services procurement officer via email from the appropriate Budget Unit Director.

University personnel should wait to notify a Contractor that a change is approved until authorized by the appropriate Procurement Services purchasing officer.

Change orders for budget or subaccount codes should not be done in eVA. These changes should be made by IDT, ASR or budget adjustment.

Change orders are not necessary for 100% per line item or $100 per purchase order. AP is authorized to pay invoices in excess of the purchase order amount up to 100% per line item or $100 per purchase order, without the requestor processing a change order. Accounts Payable is responsible for obtaining Budget Unit Director approval for overpayment.

There is a zero tolerance for cost variation for Equipment Trust Fund purchases of any amount.
Contract Renewal

Contract Extension
Cancellation
Vendor Performance Complaints
Termination for Default
The purpose of Contract Administration is to protect the institution from risks associated with awarding contracts to persons or vendors having exhibited an inability or unwillingness to fulfill contractual requirements, and to protect the institution's interests and the integrity of the procurement process by preventing individuals or vendors which have displayed improper conduct from participating in the institution's business for specific periods of time (Commonwealth of VA Purchasing Manual for Institutions of Higher Education and their Vendors. July 2006. Pg 27-29).
Summary
For more information about purchasing at Old Dominion University, you can visit the ODU Procurement Services homepage at www.odu.edu/procurement. Here you will find links to our contract listings, forms, policies and procedures, and other helpful information.
If you have any questions regarding contract administration at Old Dominion University that cannot be answered through this online training or by reading the Contract Administration policy, please contact Procurement Services via email at procurement@odu.edu or call us at 683-3105 and we will be happy to speak with you.
Any Questions?
This training will provide an overview of Contract Administration at Old Dominion University. Contract Administrators will be held accountable for understanding and complying with the full Contract Administration Policy located at on the Procurement Services website.

Receiving personnel should not accept goods in excess of those specified on the purchase order or contract unless it is recognized as a custom of that industry (e.g. printing, cable, fabric), and is deemed acceptable by the procurement officer.

If the receiving personnel will not accept underruns or overruns, it must be stated in the terms and conditions of the purchase order or contract document or be provided to the vendor via a solicitation in advance of the contract award.

Overruns shall not exceed 10% of the purchase order amount or $500, whichever is less, and are not to be processed through change orders.

Prices for overruns shall not exceed the quoted base price per unit or the quoted price for additional units and whichever price is less will prevail.

Prices for underruns will be calculated at the quoted base price per unit.
If a satisfactory resolution has not been reached by the expiration date stated in the “Notice to Cure,” the Contract Administrator should notify Procurement Services, who will send the Contractor a Termination for Default letter and may take repurchase action.

If repurchase results in increased costs to the University, a letter will be sent to the delinquent Contractor demanding payment of the excess costs.

In no case should the Termination for Default letter be held up to obtain repurchase costs since the Contractor still has a valid contract until notification.

If a Contractor notifies the University that they refuse to or are not able to deliver or complete performance on a contract, it is not necessary to follow the procedure of using a cure notification.

In these cases, a Procurement Complaint Form should be submitted to the Contractor with a copy to Department of Procurement Services to provide a historical file for future determinations of responsibility, etc.
Debarment is action taken to exclude vendors from contracting with the institution for particular types of goods, services or construction for specified periods of time.
Goods/services that arrive damaged or do not comply with the contract should be rejected by receiving personnel.

Receiving personnel who reject some or all of a shipment or service should notify the Contractor immediately and document the action.
When warranted, receiving personnel should submit a Procurement Complaint Form to the vendor, with a copy to Procurement Services, documenting reasons for rejection and requesting prompt action to correct the problem within a reasonable timeframe.

Concealed damage or latent defects should be reported to the Contractor within 7 days of receipt and prior to removal from the point of delivery, if possible.
If latent defects are found, the Contractor is responsible for replacing the defective goods within the delivery time originally stated in the solicitation and is liable for any resulting expenses incurred by the University.
Rejection of deliveries by receiving personnel due to no fault of the Contractor may be considered breach of contract. Restocking, storage and/or additional delivery charges may be assessed. The value of these additional charges should be identified and analyzed prior to making the decision to return goods.

Code of Virginia § 8.2-710 allows the seller incidental damages after the University’s breach. Both the University and the Contractor may be guilty of breach of contract should they be responsible for violation of the terms and conditions of the contract.
Contract renewals can only be done if provided for in the original contract.
Price Increases are not automatically given at renewal. If provided for in the contract, and requested by the vendor, Procurement Services may review, negotiate and approve an increase.

Price Decreases should be considered by the Contract Administrator and/or Procurement Officer to ensure pricing is in line with market conditions.
Procurement Services may, in extenuating circumstances, extend the term of an existing contract for services up to six months to allow completion of any work undertaken but not completed during the original term of the contract. This action should be documented in writing. No additional consideration exceeding the contracted price may be paid to the Contractor.

Failure on the part of the Department to provide updated specifications in a timely manner does not justify extension of a contract.
Contract Administrator’s do not have authority to cancel contracts.

Any request for cancellation should include an explanation of the basis for the request. A Contractor may request cancellation, and the University shall grant relief, if the Contractor is prevented from specific performance including timely delivery, by an act of war, order of legal authority, act of God, or other unavoidable causes not attributed to the contractor’s fault or negligence.

Cancellation of contracts may only be authorized by Procurement Services, which shall be in writing via an appropriate change order document - purchase order or formal contract.
Complaints or discrepancies on Contractor performance should be reported as they occur using the Procurement Complaint Form. (See reference page for link.)

A Contractor is considered in default/breach if they fail to perform in accordance with the terms and conditions of the contract (e.g., late delivery, nonconformance to specifications).

Contractors are required to respond within 10 days. Failure to respond may result in cancellation of the contract, suspension or debarment.

A Cure letter is used when a Contractor has failed to perform or deliver in response to a Procurement Complaint Form. It provides the Contractor a period of time to correct or “cure” the deficiency and places the Contractor on notice as to the consequences for failure to take the required corrective action.
The University is required to pay for delivered goods or services by the required payment date. If no payment date has been established by a contract, then payment is due 30days after receipt of a proper invoice or receipt of the goods or services.
https://ww2.odu.edu/forms_admin/viewform.php?formid=6397
Now that you have completed the Old Dominion University Contract Administration Training, please use the following link to submit verification of your attendance (You will need to log in to the forms directory using your Midas ID and password):
Attendance Verification
Full transcript