How to Manage Contracts

Time Frames for Contract Initiation and Review

Contracts may require months to prepare, modify, and/or review, depending on their complexities. Contract development should begin as soon as the need for a contract is clear and a vendor has been selected. Although it is preferable to obtain a signed contract prior to the effective date of the relationship it memorializes, letters of agreement and memoranda of understanding can sometimes be drafted to guide the exchange of goods and services in the interim. The director of risk management can assist in developing pre-contract documents.

If a request for proposal (RFP) must precede the contract development or review process, or if any type of competitive bidding is anticipated, initiators and reviewers should allow a lead time of six to twelve weeks prior to the expected start date of the negotiations of the contract to complete the RFP and bidding process. College employees seeking advice on RFPs or competitive bidding should contact the director of Risk Management for assistance.

Performance during Contract Negotiations and Prior to Contract Authorization

Whenever possible, a definitive agreement should be signed prior to the effective date of the relationship it memorializes. The College may lose bargaining power by conducting business without a signed contract, and such a course of action may increase the likelihood of misunderstandings and disputes between the parties.

If a contract cannot be signed prior to its effective date, provisions or understandings guiding business behavior during negotiations should be documented and agreed upon by both parties. This documentation should be generated prior to exchanging goods and services or beginning any work. If this is not possible, during contract negotiations College personnel should transact business in accordance with 1) contract provisions agreed to by the vendor and the College (even if the full contract is not signed); or 2) provisions requested by the College, even though the vendor may be negotiating or disputing those provisions. When the contract is signed, the contract should be dated as to the actual date signed even when the contract period pre-dates the signing date.

Managing the Contract

All contracts should be assigned to a contract administrator, who may or may not be the contract initiator or the signature authority. The contract administrator is the administrator responsible for performing or tracking the performance of the contract and addressing any other issues that arise under the contract.

All contract files must contain:

A copy of the final, fully-executed contract.
All correspondence or other documents related to the contract. If there are performance problems with the contract, the problems should be documented in memos to the file or in correspondence to the vendor.
All changes (including change orders and work orders) to the agreement should be formally executed in accordance with the terms of the contract and attached to the agreement.
Any extensions to the agreement should be formally executed in accordance with the terms of the agreement and attached to the agreement.
All certificates of insurance should be kept in the file.
A diary or tickler "compliance" file should be established to keep all certificates of insurance up to date, verify timely performance if time is of essence to the agreement, and to allow timely renewal, if applicable, of the agreement.

At the conclusion of the term of the contract, the administrator responsible for managing the contract is responsible to close the agreement and ensure that it is properly stored, as outlined below.

Completed Agreements: Storage

Hampshire College does not have an official repository for executed contracts.

Business Contracts

The department that is responsible for the contract is responsible for keeping the original contract and its accompanying file for a period of seven (7) years from the end of the contract period unless the agreement was "written and under seal", in which case the agreement must be kept for twenty-one (21) years from the end of the agreement period.

The department responsible for the contracts should maintain a log documenting the vendor's name, type of contract, period of contract, amount, signatory, and date signed. The contract initiator is responsible for ensuring that the department retains the file of the signed contract.

If the College is involved in a dispute with the other party at the end of these stated periods, the contract must be retained until its destruction is approved by the vice president for finance and administration on advice of the College's legal counsel.

Waivers

Waivers must be kept by the department initiating the event for which the waiver was issued and collected. Waivers must be kept for a period of three years from the end of the event or period for which the waiver was issued. If any claim is made against the College by a person who signed a waiver for the activity, the department will be responsible to provide the waiver documentation to the College risk manager or attorney in defense of said claim.