CSULB Purchasing Operations Manual
Section 4: Requirements Specific to Contracts and Service Orders
In addition to the special requirements contained in this Section 4, requirements in Section 2 also apply to the procurement of contractual services and service orders.
Ed Code 89036, 89038, 89048(d), CSU Policy 400.
4.01 Informal Bidding for Services:
Competition is not required for services on transactions of an amount less than $50,000 unless the Purchasing Office or the requester determines that competition is necessary to develop sources, validate prices, or for other sound business reasons. All transactions made under the CSU procurement authority shall, however, be designed to encourage active competition among all those seeking to become providers of services to the campus. Efforts shall also be made to secure quotations and develop sources from small businesses and disabled veteran business enterprises.
CSU Policy 401.
4.02 Formal Bid Requirement Threshold of $50,000 or more:
Except in cases where it has been determined that there is but one source that can properly meet the needs of the campus, a contract for $50,000 or more must be formally bid and awarded to the competitive bidder who offers the best value to the university. Bids for services in excess of $50,000 are also advertised in the California State Contracts Register whenever possible.
CSU Policy 401.
4.03 Posting of Solicitation Notices:
Public notice of the intent to formally request services from the open market shall be posted in a location easily accessible to any bidder who may wish to participate in the competition for a contract award. Complete copies of the bid or proposal solicitation document must be maintained in the Purchasing Office and made available to any interested bidder upon request. The solicitation notice may also include an announcement in an appropriate newspaper or trade journal, including a brief description of the work to be performed, the closing date and time for bids or proposals to be received, and the location where complete copies of the solicitation document may be obtained.
CSU Policy 402.
4.03 Standard Contracting Forms:
There are standard CSU contracting forms available for use by CSULB for a variety of functional applications. These may be viewed and reproduced for use from the CS&P Contracting Resource Library on internet website. If there is any question regarding the proper form to use for a specific application, it is advisable to contact the CSU Office of General Counsel to obtain the answer. Using the wrong form or preparing a hybrid form to try to suit the occasion can lead to a myriad of potential problems, including legal ones. No deletions, additions, or significant variations from the format or content of a standard form developed and approved for systemwide use is permitted without prior authorization from the Office of General Counsel. CSU campuses, including CSULB, use a common form for the execution of most bilateral contracts. This form is patterned after the Standard Agreement Form 2 that is used by all California state agencies, but contains terminology in it that is more specific to the policies, terms, and conditions of the Trustees of the CSU. It is referred to as the CSU Standard Agreement.
CSU Policy 409; CSU CRL; PSS 94-38, 94-39.
4.05 General Provisions for Services:
There are specific minimum terms and conditions (referred to as “General Provisions” by the CSU, but sometimes called “Administrative Requirements”) to which a contractor must agree in order to provide services to the State or the CSU. These are displayed as Exhibits on the Chancellor’s Office CS&P internet website. The exact wording of these Provisions has been prescribed by the Office of General Counsel and may not be altered without pre-approval from that Office. The Provisions that are applicable to a given acquisition must become an integral part (whether referenced or stated in print) of every contract issued. For any given contract, additional provisions may be added whenever needed, and some of the General Provisions in the Exhibit selected for use may be deleted if they are not applicable. However, none of the General Provisions that appear on the set selected for use may be altered, and none that are required under statute or State regulations may be deleted.
PCC 10351(2); CSU Policy 410; CSU CRL; PSS 95-42.
4.06 The Service Order:
The Service Order may be used to obtain various kinds of services on an informal basis (the cost must be less than $50,000) whenever it is determined that there is no need to require both parties to sign a formal agreement (e.g., where minimal legal liabilities exist), or where timing or circumstances make it impractical to employ a formal agreement (such as emergency repair needs).
CSU Policy 406.
4.07 Contract Language Requirements:
Terms and conditions beyond the minimum standards (CSU Standard Agreement format and General Provisions) may be incorporated into a contract whenever there is concurrence between the campus and the contractor that such terms and conditions are necessary to convey a clear understanding of each party’s role, its obligations, and the parameters in which the activities must be carried out, under the contract. Such additional terms and conditions, whether proposed by the campus or by the contractor, must first be determined to be in concert with all applicable laws, regulations, and policies prior to the contract being executed.
Some guidelines useful in the preparation of contract language are as follows:
- Use the correct standard form.
- Be consistent in the use of terminology throughout the contract (e.g., “shall” and “will” do not mean the same thing; nor do “vendor” and “contractor”; if CSULB is used one place, do not use “campus” or “university” in another; use either the word “Agreement” or “Contract”, but not both when referring to the document at hand).
- Active voice is usually preferable to passive voice, and mixing the two together in the same contract is unacceptable.
- Clarity and simplicity are paramount.
- Exhibits, attachments, addenda, and other parts of a contract must be clearly marked, sequentially arranged, and referenced accurately throughout the text.
- State the payment terms clearly and unambiguously regarding when, how, and to whom they apply.
- Two or more persons should proofread or edit the contract carefully after it has been drafted.
CSU Policy 410, 411; PSS 94-41, 97-01.
4.08 Commencement of Work Clause:
Except in cases of emergency to protect human life or State property, work shall not commence on any contract until the contract has been approved by the appropriate authority. Any work performed by the contractor before the date of approval can be considered as having been done at the contractor’s own risk, and potentially as volunteer work.
CSU Policy 412.01.
4.09 Compensation (Pay) for Contracting Work:
Payment and consideration provisions depend on the complexity and difficulty of the project, the current rate for similar work both within and outside State service, and the qualifications and experience of the individual(s) or firm awarded the contract. Contracts will list the rate of compensation to be paid for all consideration and other expenses. Reimbursement of transportation costs and an allowance for per diem (while travelling) should be in conformance with the CSULB reimbursement policies applicable to CSULB employees.
CSU Policy 412.02.
4.10 Progress Payments:
A “progress payment” is defined as any partial payment of the contract price during the progress of the work. If a provision in the contract calls for progress payments to be made, they shall be made at clearly identifiable stages of progress, and be based upon written progress reports submitted with the contractor’s invoices. Progress payments shall not be made in advance of services rendered.
CSU Policy 412.03.
4.11 Contracts with Local Government Entities:
Where one of the contracting parties is a county, city, district, or other local public body, the contract shall be accompanied by a copy of the resolution, order, motion, or ordinance of the local governing body by law having authority to enter into the proposed contract, approve, and to authorize its execution. CSULB may wish to have such a contract undergo a review by the Office of General Counsel.
CSU Policy 412.04.
4.12 Contracts with State Boards and Commissions:
Contracts proposed by State Boards and Commissions in excess of $1,000 must be accompanied by copies of the resolution, order, or motion authorizing execution of the agreement, unless CSULB previously has been furnished with evidence of the authority of the person executing the contract, or the person has statutory authorization.
CSU Policy 412.05.
4.13 Interagency Agreements:
An Interagency Agreement is a negotiated contract between two State agencies (or an agency and the CSU) for the purpose of conveying one party’s services to the other party for a price, for exchanged services, or for some other form of authorized consideration. Generally, it may contain specific terms and conditions to which each agency has agreed, but is left devoid of indemnification clauses, hold harmless statements, and other legal protective devises routinely employed by the State in contracts with non-State entities. All Interagency Agreements exceeding $10,000 must contain a provision that the contracting parties shall be subject to the examination and audit of the State Auditor for a period of three years after final payment under the contract. The examination and audit shall be confined to those matters connected with the performance of the contract (Gov. Code Sec. 8546.7).
Gov. Code 11256-11263, 8546.7; CSU Policy 407.
4.14 Intra-Agency Agreements & MOUs:
Campuses may enter into agreement with one another for the purpose of providing reimbursed services, or an exchange of services, through the use of the standard CSU form “CSU Project Expense Agreement” or a “Memorandum of Understanding.” Both of these transaction instruments are exhibited on the internet CS&P website.
CSU Policy 408.
4.15 Contracts with Auxiliary Organizations:
CSULB may enter into non-competitive contracts with its auxiliary organizations via the use of Standard Agreements, Service Orders, or other standard CSU transaction instruments as appropriate. However, it is incumbent upon requesters for these services to be satisfied that the cost is competitive with that found in the open market for similar services.
The University Services Program (USP), which is managed by the Sacramento Office of the CSU, provides systemwide services and expertise to the CSU, its campuses, and to other State agencies by arranging for desired services to be performed by the most ostensibly qualified auxiliary organization for a specific task. There is usually a standard fee charged for this service, although some fees can be negotiated.
Contracts between State agencies (including CSU campuses) and campus auxiliary organizations are exempt from the State’s general requirement of competitive bidding prior to making award, as per PCC 10340(b)(3). The purpose of this exemption is to accommodate contracts that provide services related to research, workshops, institutes, and other educationally-related studies or projects and are generally available only from institutions of higher education or their research faculty and staff.
Where the primary responsibility for fulfilling the contractual obligations for another State agency will rest with an auxiliary organization (as opposed to the campus State-side administration), the contract must be between the State agency and the auxiliary organization—usually in the form of a Standard Agreement. A contract between a State agency and an auxiliary organization is not an interagency agreement. Where the primary responsibility to administer and fulfill the obligations of a contract with another State agency rests with the campus State-side administration (as opposed to its auxiliary organization), the campus shall execute an interagency agreement with the other State agency and then arrange its own contractual relationship with its auxiliary. In this type of arrangement, there are no legal obligations between the other State agency and the auxiliary.
Ed Code 89900 et seq.; PCC 10340(b)(3); Title 5, Sec. 42400-42700; CSU Policy 413 et seq.
4.16 Signatures for Processing Contracts:
The Purchasing Office maintains a list of “Authorized Signatures for Contractual Documents and Vehicle Inspections.” To ensure that the contract dollar amount is correct and funding source shown on a contract (and underlying requisition) is correct and adequate prior to the execution of a contract, the contract shall first be reviewed by the Procurement Officer, and then routed for certification and signature to the university controller, the contractor, and back again to the Procurement Officer (or designee). If during the course of the review a funding or cost error is detected, the error must be corrected and the revised contract be resubmitted for signatures in the same order as before.
PSS 92-10, 93-19.
4.17 Amendments to Contracts:
Contracts (or Service Agreements) awarded on the basis of competitive bidding may not be modified unless (a) the contract, or the law governing the bidding, includes a provision for amending or modifying it, or (b) unforeseen additional work becomes necessary (as confirmed by the campus).
CSU Policy 405.
4.18 California State Contracts Register:
The California State Contracts Register (CSCR, and recently re-named ECSCR to denote that it is fully “electronic”) is a Department of General Services internet publication that advertises for bids on service agreements and public works by category for State agencies (and the CSU). It provides an equal opportunity for all businesses to compete for a share of State contracts. It is promoted by the Office of Small Business Certification & Resources (OSBCR). Fees are exacted for the advertising services. The internet website that provides access is osbcr.dgs.ca.gov/cscr.
It is the systemwide policy of the CSU to advertise in the CSCR to the extent possible. The CSULB campus policy, specifically, is to advertise in the CSCR any bids for services with a dollar value of $50,000 or more whenever possible. All public works bid solicitations with an estimated dollar value of $250,000 or more shall be advertised in the CSCR. The campus requester (or the requester’s department) normally is expected to pay the advertising fee to use the CSCR. There are specific instances where advertising in the CSCR may be exempted:
- Emergency contracts necessary for the immediate preservation of life or State property (requires a written justification to be recorded);
- Contracts for the work or services of a State (via an Interagency Agreement), local, or federal agency;
- Services for which the State has entered into a California Multiple Award Schedule or a master services agreement;
- Refuse and/or sewage disposal contracts where there is no competition because the contractor is an authorized franchise dealer providing services to a specific geographical area;
- Contracts for medical care services with physicians, local community hospitals, and medical groups (this does not include offsite laboratory services);
- Subvention contracts (non-discretionary grants) with a private or nonprofit entity for the purpose of providing services to the public or segments thereof;
- Maintenance agreements for equipment that is under warranty or while the guaranteed useful life period is in effect, or agreements where the campus has determined that a local distributor or branch is the only source for parts and service;
- Proprietary software contracts;
- Leases or rentals for use as examination sites;
- Entertainment contracts for State-sponsored fairs and expositions;
- Contracts for which only per diem and travel expenses are paid and there is no payment for service rendered;
- Contracts solely for the purpose of obtaining expert witnesses for litigation;
- Contracts for legal defense, legal advice, or legal service;
- Contracts with business entities operating handicapped workshops that meet the criteria established by Section 19404 of the State Welfare and Institutions Code;
- Contracts for architectural or engineering services;
- Contracts for Guest Lecturers;
- Contracts for Guest Performers;
- Intra-agency (internal CSU) agreements;
- Contracts with CSU auxiliary organizations.
- Contracts with moving companies to relocate recruited and active employees.
All other contracts for services with a cost of $50,000 or more, and public works estimated to cost $15,000 or more, must be advertised unless a “Request for Exemption from CSCR Advertising” has been approved. Purchasing Office staff members who process requisitions may sign the exemption form up to an amount of $50,000. A Purchasing Office supervisor may approve the exemption up to an amount of $100,000. Exemption requests that are for $100,000 or more must be approved by the Director of Procurement & Support Services or the Associate Vice President for Financial Management. The criteria for the waiver of a CSCR advertisement is contingent upon factors such as the complexity of the service, the unique experience required, whether the procurement has been approved as a “sole source”, whether the required timeframe for delivery of the service precludes the possibility of advertising, and generally whether the best interests of the campus would be served. All approved waivers shall be filed with the contract.
Gov. Code 14825; CSU Policy 403; PSS 96-18, 97-18.
4.19 Departmental Copier Program (campus operated):
This is a campus charge-back support program that is administered by the Director of Procurement and Support Services as a service to faculty and staff. To assure that the program can be self-supporting and effective, the use of this service by campus employees on State business is compulsory (as opposed to the purchasing of photocopies from outside providers). Program copy machines are located in offices throughout the campus and at several satellite locations. All requests for the purchase or lease of copy equipment, or of accepting the donation of copy equipment, must first be reviewed by the Copier Program office (central reprographics) regardless of the purpose or the funding source. This office has final authority for the acceptance or rejection of such requests. Copier Program photocopiers are accessed by either an auditron key counter, a plastic copycard, or a numeric code. These access devices are issued to faculty and staff members who submit an authorized written request to the Program office.
PSS 98-13, 99-02.
4.20 Printing & Binding Orders:
The University Print Shop & Quick Copy Centers offer professional printing and binding services to the entire campus community on a charge-back basis. To assure that the program can be self-supporting and effective, the use of this service by campus employees on State business is compulsory (as opposed to having the work performed by outside providers). A “University Print Shop Work Request Form” (available from Campus Stores) referencing an authorized university account number is required for these services. When the Print Shop or its Copy Centers cannot provide the desired service, a requisition for off-campus service may be submitted to the Purchasing Office for processing. However, such requests must be reviewed and authorized by the Manager of the University Print Shop. Once approved, a request may still be subject to the CSU’s competitive bidding requirements. The requester or the Purchasing Office staff member who processes the requisition may also opt to contract with the Office of the State Printer (a Division of DGS), and without the solicitation of competitive bids, whenever it is determined that greater efficiency would be served by doing so.
CSU Policy 412.08; PSS 92-08, 96-17, 97-02, 98-20.
4.21 Monthly Billing Cut-Off Dates for University Print Shop, Campus Stores, and Departmental Copier Program:
About one week prior to the end of each month, the campus Accounting Office closes its work-in-process activities for the month in order to accommodate monthly computer data reports for the Financial Accounting System (FAS). Cut-off dates for processing transactions are established for all campus departments and programs, the University Print Shop, Campus Stores, and the Departmental Copier Program included. For the Print Shop and Campus Stores, the cut-off date is the 24th of the month. Any work request or requisition received after that day is billed to the succeeding month. For the Departmental Copier Program, copy machine readings are taken a few days prior to the 24th, but those readings must be submitted to the Accounting Office by the 24th in order to be billed for that month. Any readings submitted later than the 24th are billed to the succeeding month. If the 24th falls on a weekend or holiday, the billing cut-off date is extended to the first work day following the 24th.
PSS 97-16.
4.22 Moving Expenses:
Operating policies and procedures that govern moving expenses and relocation allowances for newly recruited university personnel and active employees are maintained by designated offices within the CSU and CSULB. The Purchasing Office involvement is minimal, normally limited to the placement of a standard agreement or service order with the household goods moving company that is specified on a departmental requisition. Negotiated systemwide Master Agreements for personnel relocation may be available for any given move and are encouraged to be used. Orders for moving expenses and relocation allowances are not subject to sole source justification and are processed as confirming orders.
PSS 96-20.
4.23 Funding of Aquisitions:
All requisitions that are intended to result in a procurement award must contain complete funding information. On the electronic purchasing system, the blank system form that appears on the computer screen provides funding data fields that are to be filled in by the preparer with the necessary funding data. If the accounts identified have the necessary funds available for the intended acquisition, the system will automatically permit the requisition to be completed. For any hard copies of requisitions submitted to the Purchasing Office, the funding data is further examined by the Purchasing Office in order to verify the accuracy of the information and the adequacy of the funds available. If a funding problem is identified on the hard copy, the requestor is notified and a revised requisition must be submitted.
PSS 94-30.
4.24 Independent Contractors and Consultants:
Service contracts between the campus and individual contractors (including “consultants”) are useful for providing the campus with certain skills and working experience that may not be available from the ranks of existing staff for a particular task or that are inaccessible at the time the task is to be performed. Supporting documentation for such contracts must confirm, however, that an independent working relationship will exist between the two parties for the entire term of the agreement. The following guidelines are provided to assist in the distinction between (a) an employer/independent contractor relationship vs. (b) an employer/employee relationship. These are based upon criteria used by the Internal Revenue Service, the State Employment Development Department, the California State Franchise Tax Board, and other public service agencies. The guidelines were summarized in State DGS Management Memo 95-18 entitled “Independent Contractor/Employee Payroll Taxes.” They included the following:
- An independent contractor generally is engaged in a distinct occupation or profession, e.g., in the business of providing consulting or other services to the job being contracted.
- Independent contractors perform independently; whereas, under an employer/employee relationship the employer retains the right to direct and control the work being performed, as well as control over the details or techniques of the work.
- The working area, supplies, and/or equipment generally are not furnished to independent contractors.
- Compensation for independent contractors is reflective of the specific work accomplished; whereas, employment relationships are generally compensated by payment of a set sum by the hour, week, or month, based upon established hours of work. Employer benefits (sick leave, vacation, insurance coverage, etc.) do not accrue to independent contractors.
- The work being performed must not be of a type that is integrated into routine or ongoing employer operations.
- The employer must not make direct payments for business, per diem, or travel expenses incurred by the independent contractor.
- An employer/employee relationship exists when the worker can quit or be terminated at any time; whereas, an independent contractor is legally obligated for failure to complete the job unless the agreement is terminated.
Bids may or may not be solicited for an independent contractor depending upon (a) whether the cost of the contract is estimated to be $50,000 or more, and (b) whether the proposed provider of the service is considered to be a sole (unique) source. If bids are not solicited, the requester for the services of a particular independent contractor must provide the contractor’s social security number or federal tax i.d. number along with the other required information on the requisition before it is transmitted to the Purchasing Office for processing. The Purchasing Office ascertains from the Payroll and Personnel Offices that the proposed contractor is not an employee of the university. A contract shall not be awarded until this determination is documented.
Contracts for personal or other services (including consultancies) that are planned to exceed six months in duration must first be submitted to the campus Employee Relations Office to meet the legally-required 120-day notification to the appropriate collective bargaining organization.
A “consultant” is a special kind of independent contractor. A “consulting services contract” is defined as an agreement with an independent contractor to have work performed that is advisory in nature, provides a recommended course of action or personal expertise, and results in an end product that is basically a transmittal of information, either written or verbal. Such a contract shall not include:
- Contracts with the federal government;
- Contracts with local agencies (as defined in Section 2211 of the U.S. Revenue and Taxation Code) as subventions to federal funds for which no matching State funds are required;
- Contracts for the development, maintenance, administration, or use of licensing or proficiency testing examinations (such as academic accreditations, program reviews, and other external evaluations);
- Contracts for public works architectural or engineering services.
Consulting agreements are subject to the same policies and procedures as service agreements in general. Additional special processing requirements to be performed whenever a campus contracts with an independent contractor serving as a consultant include:
- Conflict of Interest
If a consultant provides services for the preparation or development of recommendations for any actions required, suggested or otherwise deemed appropriate and which include the provision, acquisition or delivery of products or service; then the consultant must provide full disclosure of any financial interest including but not limited to service agreements, memos of understanding, and/or re-marketing agreements that may foreseeably allow the consultant to materially benefit from the adoption of the recommendations.
- Testifying
When a consultant is retained as an expert witness in pending litigation, the rate paid must be consistent with the complexity and difficulty of the testimony to be given, the current rate for similarly qualified consultants, and the qualifications and reputation of the particular consultant. The contract must specify exactly what the consultant is to do--submit to depositions, testify in court, make other appearances, etc.
The following applies to the preparation of consultant contracts:
- Consulting contracts shall be prepared on the CSU Standard Agreement Form.
- A “Consultancy Proposal Analysis Form” shall be prepared.
- Consultant contracts shall not be issued to University employees. The proposed consultant’s social security number must not appear on the Payroll Office’s list of active employees.
- A campus project manager shall be identified for each consulting contract. The project manager serves as the campus’s primary point of contact with the consultant and shall approve all payments to the consultant.
- Payments to the consultant shall be based upon a scheduled deliverable or task which has an itemized cost and has been approved by the project manager. Payments shall not be made based upon the number of hours worked, and shall not be paid in advance of the services performed.
- If a “progress payment” has been requested, payment shall be based upon a written progress report submitted with the consultant’s invoice. The campus shall retain at least 10% of the amount earned, pending satisfactory completion of the entire contract and the work evaluation of the consultant.
Ed Code 89036; Gov. Code 81000 et seq., 82019; CSU Policy 412.09, 412.10;PSS 92-19, 96-28.
4.25 Illegal Immigrants Contract Prohibition:
Per Executive Order W-135-96 signed on 8-27-96 by the Governor of the State of California, all State contracts must contain the following language: “If Contractor is a natural person, Contractor certifies by signing this Agreement that s/he is a citizen or national of the United States or otherwise qualified to receive public benefits under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193; 110 STAT. 2105, 2268-69.
Revenue and Taxation Code 3121(d), 6651, 6656, 6662; CSU Policy 412.11.
4.26 Liability Insurance Requirements:
Evidence of general liability insurance coverage is required for contracts involving any activities that put the State, the CSU, or the campus, at risk. Such agreements include those for custodial services, landscaping, refuse collection, elevator maintenance, shuttle bus services, pest control and fumigation, excavation or demolition work, the use or rental of cranes, and any other contracts where the services are being performed on campus by independent contractors.
Any contract that may involve risk of injury or damage to persons or property shall protect the State and the CSU against liability by requiring the contractor to carry general liability insurance in an amount no less than $1,000,000 per person, and no less than $2,000,000 aggregate per occurrence. These limits of coverage are minimum amounts, and in any situation where an unusually high risk of liability is present, the campus, in accordance with guidelines established by the Chancellor’s Office, may require the Contractor to carry insurance with higher limits.
Contracts requiring insurance coverage shall contain the following provisions:
- Contractor shall furnish to the campus prior to the commencement of work an underwriter’s endorsement with a certificate of insurance stating that there is liability insurance presently in effect for the Contractor with a combined single limit of not less than $1,000,000 per occurrence, and $2,000,000 aggregate; and that vehicle insurance (where applicable) is in effect with a minimum coverage of $1,000,000 per occurrence.
- The certificate of insurance shall provide:
- that the insurer will not cancel the policy holder’s coverage without thirty (30) days prior notice to the campus;
- that the State of California, the Trustees of the CSU, the CSU, and the employees, officers, and agents of each of them, are included as additional insureds, but only insofar as the operations under this contract are concerned;
- that the State, the Trustees, the CSU, and the employees, officers, and agents of each of them shall not be responsible for any premiums or assessments on the policy.
- Contractor agrees that the bodily injury liability insurance herein provided shall be in effect at all times during the term of this contract. In the event said insurance coverage expires at any time or times during the term of this contract, Contractor agrees to provide at least (30) days prior to said expiration date, a new certificate of insurance evidencing insurance coverage as provided herein for not less than the remainder of the term of the contract, or for a period of not less than one (1) year. New certificates of insurance are subject to the approval of the CSU, and the Contractor agrees that no work or services shall be performed prior to the giving of such approval. In the event Contractor fails to keep in effect at all times insurance coverage as herein provided, the CSU may in addition to any other remedies it may have, terminate this contract upon the occurrence of such event.
Short-term licenses issued by CSULB or one of its auxiliaries for special on-campus events shall require evidence of coverage, whenever they pose a significant level of risk. These include, but are not limited to, athletic events, automobile or motorcycle races, rodeos, thrill shows, and firework displays.
No project work or event activity may commence until the required insurance documents are on file, and it is critical that insurance be in effect for the entire contract term. If the insurance coverage expires during the contract term, new certificates must be obtained prior to the contract expiration date. The Purchasing Office shall coordinate with Facilities Management, the Housing Office, and other campus departments regarding projects that extend beyond the initial insurance period.
CSU Policy 412.06, Executive Order 743; PSS 96-30.
4.27 Contracts involving Hazardous Materials:
Contracts involving the handling, removal, or disposal of hazardous materials shall be developed in accordance with the CSU’s model contract for hazardous material removal, and comply with all State and Federal requirements. This model can be found at the CSU website address.
CSU Policy 412.07.
4.28 Requisitions for Guest Artists and Lecturers:
A requisition for a guest artist performance or lecturer’s appearance may be processed as usual by converting it into a service order. Sole source justification is not required due to the unique nature of the service. Generally, the guest or guest’s agent will provide a “contract” for signing. The “contract” must be reviewed, approved, and countersigned by the Purchasing Office prior to returning it with the service order. After execution of the “contract”, a copy of it shall be retained in the Purchasing Office’s files with a campus copy of the service order. Direct Payments may be issued to multiple guest artists or lecturers when circumstances warrant it, in which case requisitions need not be prepared at all.
PSS 96-24.
4.29 Assignment of Contract to a Different Contractor:
An Assignment is a signed legal notification that is required to transfer the responsibility for completing a contract from the original contractor to a subsequent one. This is often because the original contractor is either unable or unwilling to complete the contract, for some reason. CSULB uses a special pre-printed form having specific wording in it to accomplish this.
An Assignment is more than a simple company name change or a redirection of the payment. It is an entire transfer of the contract from one entity to another. After the Assignment is accepted (signed) by all three parties involved (the assignor, the assignee, and the CSU), the normal expectation is that the assignee is to perform the contract and receive payment. Once executed, the Assignment is to be incorporated into the contract by a formal amendment or change order. For a company name change only, an Assignment is not necessary or appropriate. This can be accomplished via an ordinary amendment or change order to the contract (the contractor must present evidence of the official name change, however, such as an approved corporate filing of a name change with the Secretary of State).
An Assignment may be necessary when one entity sells its business to another, when two entities merge into one, or when one entity purchases (or takes over) another. Fresh designations and signatures may be required on certain ancillary documents to the contract such as bonds, powers of attorney, the insurance certification, or other commitments that were originally signed by the assignor. For purposes of internal control, all Assignments, re-designations of payee, and company name changes shall be brought to the attention of the Procurement Officer.
PSS 95-13.
4.30 Contract Award Report (State Form 16):
State agencies (and the CSU) are required to give written notice at least quarterly to the Department of Fair Employment and Housing (DFEH), Office of Compliance Programs, of all contract awards (but not purchase orders) having a cost of $5,000 or more. For each contract awarded, the notice shall list the name, address, and telephone number of the contractor; the federal employee identification number; the State contract identification number; the date of contract award; the contract amount, the project location; the name of the agent who signed the contract, the name of the contract-awarding agency (or campus); and the name of the officer signing on behalf of the agency (or campus). State Form 16 is normally used for the report when awards are reported individually To DFEH. When the awards are reported quarterly rather than individually, the quarterly listing may be appended to SF 16 when it is submitted to DFEH.
Gov. Code 12990; Title 2, Sec. 8117.5; CSU Policy 404; PSS 96-22.
4.31 Americans with Disabilities Act (ADA):
All contracts must contain a condition stating that the Contractor, by signing the contract, assures the University that it complies with Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA.
42 U.S.C. 12101 et seq.; CSU Policy 228.
4.32 Child Support Compliance Act:
It is the policy of the State of California that anyone who enters into a contract with a State agency shall recognize the importance of child and family support obligations and shall fully comply with all applicable State and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with Section 5200) of Part 5 of Division 9 of the Family Code. Any contract of $100,000 or more must include the CSU General Provision that references the Child Support Compliance Act.
PCC 7110, CSU Policy 229.
4.33 Leases of Real Property:
The Trustees of the CSU are authorized, under statutes within the Education Code, to enter into real property lease agreements having provisions that are consistent with the mission of the University as described in the State legislature’s Master Plan for Higher Education (Ed Code 66000 et seq.—the Donahoe Act, and especially Sec. 66606).
Authority has been delegated to the campus President or a President’s designee to execute leases of real property as either lessor or lessee without advance approval by the Chancellor’s Office, with the following exceptions: (1) leases that support the issuance of bonds or of other promissory notes or that transfer interest via an installment sale or other form of security; (2) leases with a term of twenty years or more, or with options resulting in a potential term of twenty years or more; (3) leases that require $1 million or more as an annual payment; and (4) leases that permit any CSU real property to be used in the development of a project or enterprise.
It is recommended that the campus Purchasing Office be contacted for consultation in advance of the initiation of any action toward the development or execution of a lease on real property.
Campus as Lessee
A campus requester of non-university or Foundation space, following initial discussions and an informal proposed arrangement made with the proposed lessor, must prepare and submit to the campus Purchasing Office a completed Space Action Request (State Form 9) and a written request to negotiate a lease. These two documents constitute the lease request. The Purchasing Office reviews the request for content and form, and if it appears to be properly drawn it is submitted for further review to the Associate Vice President for Physical Planning & Facilities Management (PPFM). PPFM either approves the request as submitted or rejects it for reason, and then returns it to the Purchasing Office. The Purchasing Office then advises the requester as to the status of the request. If the request has been approved, a bid invitation must be prepared by the Purchasing Office, when one is required. If it is not required, the requester may proceed with lease negotiations and begin development of the lease, using the standard lease forms available from the Purchasing Office.
After subsequent negotiations and all terms & conditions are agreed upon between the parties to the proposed lease, the formal lease is drafted. Following pro-forma agreement of the parties to all the terms and conditions of the formal lease, four identical counterparts of it are prepared, and each counterpart is signed by the lessor. All four are then forwarded to the Purchasing Office for further review and approval (a holding copy may also be prepared and retained in file by the requester). If any changes become necessary to the terms and conditions of the lease, four newly revised counterparts of the proposed lease must be prepared and be resubmitted back to the Purchasing Office for further review prior to the final approval of the lease. If no additional changes are recommended and the lease is approved, the Purchasing Office forwards one signed counterpart back to the lessor, retains one for the file, and distributes the other two to the requester of the lease and to Accounts Payable. Additional copies of the lease are prepared and distributed as needed by the requester.
If the lease requester and lessor opt to continue the lease into a period of time beyond the stated termination date (this may be done only when an optional extension of the lease appears as a provision within its terms and conditions), the requester must submit a new requisition to the Purchasing Office to continue the funding under the amended term. The lease may also be established initially as a multi-year agreement, but because of the State’s budgetary limitations on fiscal commitments, it must be funded anew for each additional fiscal year beyond the lease’s stated term. All lease invoices shall first be approved by the requester prior to being presented to the Accounts Payable office for payment.
Leases of real property for additional campus space that are funded directly from Foundation accounts are not required to be processed in the preceding fashion. However, such leases must not commit nor obligate the Trustees of the CSU in any way, nor include the Trustees as a contracting party or as signatory.
Campus as Lessor
For the leasing of University space to outside users (including the Foundation), direct payments or reimbursements to the University are required under State law. Campus facilities may be used only for activities that are compatible with the mission of the University.
CSULB facility usage policy and guidelines have been developed by a select ad hoc campus President’s committee. They were subsequently endorsed by the campus President and adopted for general application. Executive responsibility for maintaining these and establishing user fee and service rates falls under the auspices of the Vice President for Administration and Finance. A Facilities Use Advisory Panel provides advice and counsel as needed. Day-to-day operations are carried out by a Campus Events Office.
Use of campus facilities by off-campus organizations requires a user agreement (contract) containing terms & conditions that provide legal protection and that serve to avoid misunderstandings related to the activities. The terms & conditions also routinely require evidence of liability insurance coverage. Questions of potential liability may be addressed to the campus Office of Risk Management or to the Purchasing Office.
Use of campus facilities by on-campus users generally does not require a formal contract for any events or activities associated with normal campus functions. Scheduling is arranged and the usage regulations are promulgated via the Campus Events Office. Insurance certification for campus–sponsored events and activities is usually waived from the standard requirements.
For long-term use of campus facilities or for activities that necessitate substantial terms & conditions to avoid misunderstandings or for activities that could pose significant risk to either the University or to the user, the use of a formal lease agreement is recommended. A certification of insurance coverage is also required. This kind of lease agreement normally requires the use of one of the standard forms that has been previously approved for use by the Chancellor’s Office or that appears as an Exhibit on the CS&P website
Ed Code 66000 et seq., 89046, 89048, 89048.5; C.O. Executive Order 669; PSS 94-37.
4.34 Evaluation of Contractor Performance:
The Contract/Contractor Evaluation (State Form 4) may be prepared on any contract (excluding interagency agreements or contracts with other governmental entities). If an evaluation report is prepared, the person completing it should be a campus employee with direct knowledge of the contractor’s performance. Copies of the evaluation report are to be filed in the Purchasing Office project file and in a special “Contractor Evaluation File”. This report shall be retained for a period of up to thirty-six months after the work has been completed for purposes of future reference and audits.
When performance deficiencies occur during the term of the contract, the contractor must be notified of the deficiencies in writing and be afforded an opportunity to correct them within a prescribed (yet reasonable) timeframe. Contractors (including consultants) whose performances have been determined to be unsatisfactory, as recorded by written documentation, may be temporarily suspended from bidding on further contracts for a period of at least three (3) months, but not more than one year. The contractor shall be relieved of the suspension at any time after the three-month period, upon demonstrating to the campus’s satisfaction that the deficiencies that resulted in the suspension have been corrected. Evaluations shall not be open to public inspection. In extreme cases of poor performance by a contractor, the State Department of General Services Legal Services Division may be contacted as a first step toward temporary debarment proceedings.
PCC 6109, 10303, 10367,10369, 10370, 12102(j); CSU Policy 213.02; PSS 96-29.
4.35 Year-End Tracking of Contracts through Final Approval:
During the period normally reserved for year-end closing operations, contracts may sometimes need to be developed and/or awarded prior to June 30. When this is the case, the cost of the contract (if known) is encumbered into the Financial Accounting System (FAS) prior to the close-off deadline even when all of the administrative requirements for full development of the contract have not yet been met. The Purchasing Office tracks the status of such contracts weekly on a special form designed to monitor the status of such contracts, until they are executed and in full force and effect. Contracts that have been encumbered into FAS prior to being fully executed are subject to the loss of funding if problems arise prior to execution of the contract.
PSS 94-25.
