PO vs Contract

• Contractors
• Subrecipients
• Independent Contractors
• Consultants
• Vendors
• Service Providers

All of the above fall under one (somewhat confusing) name: CONTRACTOR.

Contractors provide ancillary (secondary) goods or services that are needed to conduct business or research efforts at UT. And those goods and services are obtained in more than one way. Examples include (but are not limited to):

• Expert advice or consulting
• Non-university labor or services paid a “fee for service”
• Commercially available supplies and expendable materials
• Equipment and/or component parts for fabricated equipment

Though we call all these different types of goods and service providers contractors, there are some key points that help determine which category of contractor each falls under and which PURCHASING MECHANISM we use to obtain these goods and services. Those key points often have a lot of 'it depends' aspects to them... 

CONTRACTS

Use of a contract for the procurement of services or deliverable goods is the way to go when there is a complex scope of work with multiple deliverables or deadlines built into the process.

A business contract is any written agreement or contract that includes the university’s standard terms and conditions (required because we are a state institution) and is signed by the university and the vendor. 'Signed by the university' in this case is an authorized official with signing authority.

• The university typically doesn't sign for procurement of goods and services that can be handled by a purchase order, but if vendor insists on obtaining signature, the purchasing mechanism changes from a purchase order to a contract.
   
  • If a signature is required (by either party), then a contract is needed. (which typically takes longer to complete) And how do you know if a signature is required? Well... you ask.
  • In the interest of saving time, a purchase order is the way to go whenever possible, but you go with a contract when a purchase order is not possible.
     

A Business Contract will always be required if the individual providing services is a current UT employee, due to audit restrictions. And the same for individuals providing services who do not have a U.S. tax number (SSN or ITIN) in the vendor record (VID types 3 & 4), due to audit restrictions aka tax considerations. <-- this is why we have a lot of contract activity when dealing with individuals doing work on our sponsored projects: Independent contractors

If factors such as data security, intellectual property or personal, health or safety data are a part of the services required, a business contract will probably be the best way to proceed. You can contact the university's Purchasing Office if you need help determining the best course of action.

It's also worth noting that contracts that need special handling require additional groups at UT to be involved, which typically results in a longer process. This includes foreign agreements, revenue-generating agreements, certain software and technology agreements, special procedure agreements and agreements that require UT System Board of Regents prior-approval.

• All that to say... the more complicated it is, the longer it takes - when you head into the contract process for faculty members in your unit, manage expectations realistically; make sure you don't over-promise and under-deliver regarding how long it takes to finalize a contract.

PURCHASE ORDERS

Use a Purchase Order (PO) for purchase of deliverable goods, continuing services (e.g., copy machine maintenance) and software licenses (including software subscription services and renewals).

When the university makes a purchase by issuing a purchase order, the university standard terms and conditions (the same ones included in signed contracts) are incorporated into the purchase by reference. Every purchase order has a clause that states “Order Terms and Conditions are online at: [LINK]” This clause means that the linked university standard terms and conditions are incorporated and made a part of every purchase.

When a vendor ships goods, or provides services, in response to a purchase order, they are legally agreeing to the university standard terms and conditions. So... even a purchase order is like a contract, but one that is streamlined, and sped up mostly because it doesn't involve obtaining signatures.

The UT Business Contracts Office now maintains a webpage that addresses Purpose & Standard T&C directly.

CONTRACT REQUIRED

• Focus Groups/Market Research (in person or phone surveys)
• Hotel Agreements
• Speakers/Guest Lecturers - If presentation is being recorded
• Storage Facility Rental

CONTRACT or PURCHASE ORDER - 'It Depends'

• Catering services
• Marketing Services
• Performers (musicians, actors, etc.)
• Purchasing Data for Research (like LiDAR Data)
• Repair/Maintenance for buildings/campus (custodial, windows, grounds)
• Rentals for Events, such as meeting space, AV needs, etc.
• Software purchases
• Uniform cleaning/rental
• Utility Cart/Golf Cart Rental
• Website Hosting Services
• Bus Service/Transportation

 

A Master Agreement is in Place through 6/30/2024 for the following services:

• Photography
• Videography
• Drone services

University Master agreements can dictate how UT-based requests proceed when procuring certain goods and services, and often include specific vendors, which means using vendors outside of the agreement may not be allowed. Master agreements are designed to makes it faster to obtain services, often include multiple vendors, but they can also limit the selection. Selecting a vendor outside of a master agreement may require additional approval on an exception-basis.

PURCHASE ORDER GOODS & SERVICES

• Copyediting, proofreading, transcribing, written translating (not interpreters)
• External review of Units
• Graphic Design
• IT Work (database, app, online course module development, testing)
• Purchase of Goods w/UT name, logo, image
• Purchase of Used Goods
• Research Services (data manipulation, analysis, collection, advise on programmatic or grant reports, proposals, methods, etc., general advising and collaborating)
• Research Study Participants
• Speakers/Guest Lecturers/Instructors (when receiving honorarium payment)
• Training/development of faculty or staff
• Vehicle/Utility Cart/Golf Cart Purchase
• Workshops or Seminars - Participants
• Workshops or Seminars - Speakers 

 

The Business Contracts Office (BCO) maintaines a list of goods and services and associated acquisition methods.

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