Business Contracts Office
Departmental Contract Administration
Cost-Benefit Analysis Required for State Funded Contracts
Any department that utilizes state appropriated funds (“14” Accounts) to pay for contracted services must prepare and maintain on file the following documentation:
- Verification that the department conducted a cost benefit analysis confirming that it is more cost-effective to contract for outside services versus hiring full-time employee(s).
- If the department does not have a written cost benefit analysis, a justification memo must exist that verifies the contract is being entered into because either:
- The work involves a special expertise that is not available in your department and that is not likely to be used again or will only be used on a random basis; or
- The deadline for completing the project is such that the work cannot be completed by full-time employees due to their current workload or the training required.
- The department must also maintain documentation on file describing how the contracted workers relate to the staffing plan of the department’s division, area, or college (or the University Strategic Staffing Plan).
Departmental Guide for Contract Administration
Critical Importance of Contract Administration: Upon completion of the procurement process and contract negotiations, the subsequent phase of contracting is administration. Regardless of how well a contract is drafted, the contract will be ineffective if proper contract administration is not performed.
Ensuring Compliance: As the user department, the department is clearly in the best position to ensure compliance with the contractual requirements. Each departmental administrator’s contract responsibilities include:
- verifying that the contractor complies with all of the terms and conditions of the agreement;
- ensuring that all services have been received to your specification prior to authorizing payment; or that all revenue generated pursuant to the terms of the business contract are paid to the University; and
- ensuring the collection of renewal documentation related to any required certificates of insurance, worker's compensation insurance, or performance bonds