500: Basic Policy
Last Revised: September 2009
The NSHE Procedures Manual Chapter 5, Section 3 specifies all contracts entered into by NSHE, and all of its components, are to be in accordance with the policies and procedures delineated in the manual and repeated here.
A contract is an agreement between two or more persons (or entities), which creates an obligation to do or not to do a particular thing. It's essential components are competent parties (persons or entities legally capable of contracting), subject matter (the purpose of the contract), a legal consideration (the inducement to contract, usually money or something of value, but also including mere promises to perform something or refrain from doing something), mutuality of agreement (all parties must voluntarily enter into the contract) and mutuality of obligation (all parties are obligated to do something or no to do something they otherwise have a right to do).
A contractual obligation is a legal obligation. Adherence to policies and procedures is necessary to limit financial and other types of liability for NSHE. It is essential that all NSHE officers and employees follow these policies and procedures.
The contracting party for all NSHE contracts is the Board of Regents. To be valid, the agreement must state that it is entered into only by the BOARD OF REGENTS OF THE NEVADA SYSTEM OF HIGHER EDUCATION on behalf of the institution and sub-unit of the institution. Similarly, the signature block should read: BOARD OF REGENTS OF THE NEVADA SYSTEM OF HIGHER EDUCATION on behalf of (name of the institution and college or sub-unit, if necessary).
The contracting officer for NSHE is the Chancellor.
Contracts that must always be sent to the Chancellor for signature are:
- All contracts that must be approved by the Board of Regents by law. Including but not necessarily limited to:
- The sale or purchase of real property or the long-term lease of real property owned by the NSHE, including most easements over real property (NRS 396.430). "Long-term" is defined as in excess of four years. Approval of these contracts must be placed on a Board of Regents' Investment and Property Committee agenda for approval with final approval by the Board of Regents.
- All contracts with an open-ended or indefinite term.
- All contracts that provide for the hiring of outside attorneys for legal services require written approval of the NSHE's Chief Counsel.
- Except for standard form federal grants and contracts and for NSHE purchase orders, all contracts:
- Which require consideration (cash, property, or services) valued in excess of $1,000,000, calculated by adding the total cumulative payments, delivery or performance over the entire term of the contracts, OR
- Which are for terms in excess of five years or which provide the right to renew for terms that exceed five years in the aggregate.
- All contracts which, in the judgment of the president of an NSHE institution, have such a serious political, social, or financial impact on the NSHE or the public that the Board of Regents' or the Chancellor's review is necessary.
- All contracts for private security services (BOR Handbook, Chapter 1, Section 12, item 3).
- All other contracts for which signature authority has not been delegated by the Chancellor as provided in NSHE Procedures Manual Chapter 5, Section 3.
The Board of Regents' bylaws authorize the Chancellor to delegate certain contract-related responsibilities. In the NSHE Procedures Manual Chapter 5, Section 3 the Chancellor delegated signature authority for the following contracts to the presidents of the NSHE institutions or to the presidents' designee.
- Contracts which require consideration (cash, property, or services) valued at $1,000,000 or less, calculated by adding the total cumulative payments, delivery or performance over the entire term of the contract, AND which are for terms of five years or less or which provide the right to renew for terms and do not exceed five years in the aggregate.
- Cost overruns and change orders which in the aggregate do not exceed 10 percent of the base contract amount.
- All standard form federal grant applications, grants, contracts, modifications and release forms.
- All purchase orders in which the purchase contract is awarded to the "lowest responsive and responsible bidder," in accordance with the purchasing policy set forth in Title 4, Chapter 10, of the Board of Regents Handbook are delegated to the Vice President for Finance at the appropriate institution or his or her designee. Exceptions to the established purchasing policy must be presented to the Board of Regents for approval.
Any contract signed in violation of the policies stated herein, is void and of no effect whatsoever.