Introduction to Service Contracts
When a written agreement is required between the University of Illinois and a second party, it is necessary to execute a two-party contract. A “Contract” is a legally binding document intended to set forth a written agreement or obligation between the University and a second party. Whether or not a contract is necessary depends on many factors, including how the services are being obtained, the complexity or risk level of the transaction, the contract amount, etc. Often, a contract is requested by the second party. The contract must be fully executed before any services or products are provided or paid for.
Types of Service Contracts:
Services Under $10,000
When a requisition is submitted for the types of services that were previously handled on the Contract for Services Under $10,000 template, the resulting purchase order will serve as the contract. So there will not be a need for a separate mutually executed contract, nor for the department head to sign a separate template, and the robust purchase order terms and conditions will apply.
This update only applies to purchases that previously would have been handled on the Contract for Services Under $10,000 template. In situations where a mutually executed contract is still required, the University recommends utilizing the Contract for Procurement of Supplies and Services template, which must be processed by Purchasing.
General Services (other than Professional and Artistic)
Contracts for the purchase of useful manual skills or labor that may or may not produce a tangible commodity. Examples of these services include, but are not limited to: security guard services, transportation services, clothing rental and cleaning, laundry, film processing, janitorial work, window washing, rubbish and waste removal, and service and repairs to equipment.
Professional and Artistic Services
Professional and Artistic Services means those services provided under contract to the University by a business firm or individual acting as an independent contractor and qualified by education, experience and/or technical ability as defined below.
An essential element distinguishing professional services from other services is confidence, trust and belief in not only the ability but also the talent of the individual(s) performing the services.
Professional and artistic services are primarily for intellectual or creative skills. Contracts for services involving primarily manual skills or labor are not considered professional and artistic services contracts.
If the professional or artistic services contract is with a business entity, the individuals whose education, experience, and technical ability provided the basis on which the business entity was selected must meet the required qualifications.
The following are examples of Professional and Artistic Services as defined by the Illinois Procurement Code:
- Clinical Psychology
- Custom Produced Art
When utilizing a Professional and Artistic Service, a two-party contract and a posting to the Illinois Procurement Bulletin will always be required.
Contracts used to procure construction related services are usually obtained through the University Office of Capital Programs and Real Estate Services (UOCPRES), or the campus Facilities Management unit, https://www.uocpres.uillinois.edu/.
How to Contract for Services
Standard contract forms have been reviewed and approved by the Office of University Counsel. Please work with the Purchasing and Contract Management Office to draft a contract that meets your needs. Please see the glossary for definitions regarding the different types of contracts available to you.
The System Comptroller is the general fiscal officer of the Board of Trustees of the University of Illinois System and is authorized to approve and execute, on behalf of the Board, contracts not expressly requiring prior, specific Board authorization. The Comptroller may delegate contract execution authority. Delegates who sign contracts on behalf of the Comptroller must have express authority to do so. Comptroller delegates are responsible for ensuring all required approvals are received and appropriate legal review is complete, before affixing the Comptroller’s signature to a contract.
Warning: If you sign a contract and are not an authorized delegate, the university is not a party to the contract unless it decides to ratify your unauthorized act. “Apparent Authority” does not generally apply to transactions involving the State of Illinois. If authorized university officials decline to ratify a contract, the other party’s remedy for any breach or recovery on a contract claim will be from the person who signed without authority.