Dated: 2/18/04
Replaces: NEW
Internal Policy and Procedures
Hotels, Off-campus Catering, Booth, Commercial, or Residential Space and Rental Contracts or Agreements
POLICY:
Purchasing staff that have been delegated to approve or release official purchase order(s) may also review and sign contracts/agreements specifically related to the orders they are responsible for. Signatory authority carries with it the responsibility to assure acceptability of all contract/agreement language.
PROCEDURES:
I. Review & signature process
1. All contracts will be reviewed and signed in accordance with the process defined in IPP15 . A copy of the final contract must be kept in the appropriate file by year within Purchasing Services' Vendor Files. These copies should be clearly labeled (using the designated " blue label", obtained from requisition processors, which identifies that the document is a Hotel, Off Campus Catering, etc. contract). The Delegated departments will maintain contract files, of documents signed by them, at their location in accordance with state guidelines (see reference section).
2. Prior to signing any agreement involving lodging, you need to have some information regarding how it will be paid if the State rates are not being charged. Check the UW- Madison travel page to determine the current rates.
2.1 If the Department is holding a conference and there is a registration fee being charged or if the individuals are paying for their own rooms, you can reference the waiver number on the requisition as a PRO-E-4 and proceed.
2.2 If a requisition is not attached, note this and retain a copy of the document with our record.
2.3 If they are not charging the State rates, and there is not a registration fee involved, you will be required to request competition ( PRO-D-33 ) This can be done via a simplified bid but check with the Department first because they may have done some price comparison research prior to making any arrangements.
2.4 If the money for the event was provided by a vendor that has specified the specific site, and if the meeting attendees were predominately non-university/state employees, request documentation from the Department in writing stating this and process the agreement/ contract.
2.5 Retain all justification documentation in Vendor File.
3. Prior to signing any contract or releasing a purchase order, all unacceptable contract language or terms must be edited, deleted, amended, and appropriate language substituted as per IPP15.
II. Some of the unique or common contract language problems for this type of contract/ agreement. (refer to IPP 15 for a complete list)
For any hold harmless clause or an indemnity clause which requires the University to accept liability for the negligence of anyone other than a university officer, employee or agent, substitute the following UW Madison approved clause (Monona Terrace Unique Language) . This should be attached to the contract and so labeled to identify which clause it replaces .
2. Applicable Law clause
The laws of the State of Wisconsin must be substituted for any other preferred state or country. Line out other state's name and insert Wisconsin at all locations. If a vendor will not accept a change, you are allowed to make the following offers in the sequence shown:
2.1 If they insist on their state law controlling, offer: "To the extent it does not waive the sovereign immunity of the State of Wisconsin, substantively or procedurally, this agreement shall be governed by the laws of the state of (INSERT APPROPRIATE STATE HERE.)
2.2 If they will not accept, leave the choice of law section silent: that is, agree not to have a choice of law section.
2.3 If they persist, refer to Legal Services.
3. Liquidated Damages clauseHotel and event contracts/agreements routinely have language that addresses the fees that will be imposed if an event or hotel reservation is canceled. This could also be listed as "attrition" or "liquidated damages". Frequently attempts to strike this language entirely (as per IPP15 ) is not accepted by the event organizer. Should this be the case, the word "liquidated" must be removed and the "damages" referred to must be reasonable, clearly defined, and approved by the department involved. The event organizer may need to be contacted to send an addendum, which would clearly state what the damages would be for cancellation. Also add to the agreement/contract: "If another party can purchase the rooms, the University will not be responsible for damages".
4. Entire Agreement Clause
Insert the words "and our Purchase Order" (written near where insert is to occur with an arrow to spot) to assure that the PO terms are also to be considered part of the agreement. Also reference any addendums such as the one referenced in section #3 above.
5. Incidental and Consequential Damages clause
Clauses that relieve the vendor from any responsibility are generally acceptable, but a discussion with the user department is required to determine if the UW-Madison could suffer damage or loss (e.g., loss of revenue).
6. Late Payment Fees
Line out late payment penalty fees that are in excess of Wisconsin Statutes prompt pay laws (per WI State Statue 16.528, Prompt Pay Policy). It is appropriate to change these to 1% per month and 12% per year to match the Legislation.
7. Payment Terms
Line out and correct invoice payment terms to be "Net 30 days after receipt of a properly completed invoice", unless alternate terms are in the best interest of the state.
8. Taxes
UW-Madison generally does not pay taxes unless the commodity or service is consumed in the state imposing the tax. A listing of states that offer tax-exempt status to the State of Wisconsin when the commodity or service is consumed in that State is listed at http://www.uwsa.edu/fadmin/fppp/fppp36i.htm .
If hotel rooms are to be paid by the individual registrants, then they are liable for taxation and the tax-exempt certificate should not be used. The only charges that may or may not be tax-exempt are those paid for by University check. If other fees or taxes are referenced, verify with your Supervisor if they should be included. See Tax Exempt letter for the State of Wisconsin Exemption.
9. Arbitration
Line out entire clause referring to arbitration and add our Arbitration Language.
10. Force Majeure
If this is not in the agreement/contract, please add the attached language to cover the University.
11. Insurance
If the agreement/contract requires the University to provide proof of insurance, attach the language provided by UW-Risk Management.
III. Required signatures/response
1. The Agent will determine whether a vendor response (counter signature) is required at the time contract is transmitted. If changes have been initiated or addendums added, a counter signature is required. The UW department should note on each contract/ agreement if they want us to forward it to the vendor, send back to them, or to do both. Many times the Department wants to send the contract/agreement on to the vendor. In standard cases where no contract edits were required we do not need to get a signed copy back.
2. A response is not required if the vendor has pre-signed the contract/agreement and agent has made no modifications. Based on what instructions the Department has given us, forward the original to the vendor or dept. Send one copy to Purchasing Services Vendor File using the special "blue labels" provided for these types of agreements/contracts.
3. A response is required if the vendor has not signed the agreement/contract, or if vendor has pre-signed and agent made modifications to the document. Make adequate photocopies so you may send an original and copy to vendor with the purchase order or a transmittal letter (if no purchase order). Send one copy to Purchasing Services Vendor File using the special "blue labels" provided for these types of agreements/contracts.
Vendors that accept our purchase order, are deemed to have agreed to contract terms (including modifications).
Vendors may ask that we complete their credit application form; our standard answer is that we do not. We will provide the following documentation to these vendors in a form of a letter. (for use with Hotel contracts only).
V. Disputes
If possible the original agent will handle disputes from vendors regarding edits to contracts/agreements. Issues that the agent cannot resolve should be discussed with an agent manager and may be referred to Legal Services (hereinafter referred to as "Legal") using the following process:
a.Agent consult with Legal as to how to resolve; provide a copy of the document(s) and prepare a cover memo. The memo is then given to an Agent Manager for review, approval and forwarded to the Program Assistant to the Director.
[DELEGATED AGENTS: Forward to an Agent Manager for that commodity.]
b. Program Assistant to the Director will log request on the "legal agenda" and fax or interdepartmental mail to Legal.
VI. Processing the Requisition
When processing a requisition for one of these, in the Waiver Field of the requisition, reference PRO-E-4 if the following applies:
a. If the costs will be covered by Registration Fees,
b. If the cost of the rooms and the meals are within the State of Wisconsin Guidelines,
c. If there will not be a fee charged, and the amount exceeds the State of Wisconsin Guidelines, contact the Department to find out if they had received a minimum of three price quotes. If not, we will have to do a simplified bid (see the State of Wisconsin Procurement, Manual Section PRO-D-33)
VII. Catering
If you are processing a agreement or a requisition for Off Campus catering, you must contact the Department involved to determine if the Contractor will be serving the food or not. If the vendor is dropping off the food but not serving it, we will not need an Insurance Certificate. If they are serving the food, we will need a High Risk Insurance Certificate ( see IPP 12 ) prior to the purchase order being released.
In you are processing an agreement for On-Campus catering please contact the current food commodity agent at Purchasing Services for help with the special policies relating to On-Campus catering.
REFERENCES:
State of Wisconsin Procurement Manual PRO-D-33
State of Wisconsin Procurement Manual PRO-E-4
University of Wisconsin-Madison Travel Website
University of Wisconsin System Travel Website
University of Wisconsin-Madison, Purchasing Services, IPP 12
University of Wisconsin-Madison, Purchasing Services, IPP 15