3210 Purchase Contracts

Responsible Official: 
Chief Procurement Officer
Responsible Office: 
Procurement
Effective Date: 
December 16, 1998
Revision Date: 
November 1, 2022

Policy Sections

3210.1 Requirement of a Written Purchase Contract for Certain Purchases

3210.2 Contract Administration Responsibilities

3210.3 Services Contracts, Generally

3210.4 Guest Speaker Contracts, Artists and Performers, and Honoraria

3210.5 Purchase Contracts for Software, Web Development Services, and Electronic Applications

3210.6 Purchase Contracts that Provide Access to Yale Data

3210.7 Purchase Contracts Involving Payment Card Processing

3210.8 Data Use Agreements

3210.9 Purchase Contracts Requiring Additional Reviews or Approvals

3210.10 Goods Contracts

3210.11 Mixed (Services/Goods) Contracts

Scope

This policy applies to all members of the Yale community making purchases on behalf of the University.  It establishes and describes the requirements and procedures that apply to University contracts to purchase goods and services (including software and data).

This policy does not apply to:

  • Subawards under a sponsored award, including clinical trials (see Policy 1307 Subrecipient – Establishing, Managing, and Monitoring);
  • Clinical contracts, which for the purposes of this Policy, are contracts pursuant to which a Supplier provides clinical services to Yale.  Clinical contracts include, but are not limited to, physician services agreements or professional services agreements whereby Yale engages a physician or entity to provide clinical coverage or on-call services.  Clinical services include any service for which a medical or other clinical license, registration or certification is required for the performance of the service.  Questions regarding clinical contracts may be directed to ymcontracts@yale.edu;
  • Engagements involving payments to post-doctoral and post-graduate fellows;
  • External individuals serving on University advisory boards; and
  • Real estate leases to which Yale is a party.  Such engagements are governed by Policy 1800 Real Estate Leases.

Policy Statement

Members of the Yale community who are responsible for making purchases on behalf of the University must ensure that the purchases comply with all University requirements, including, where applicable, the requirement that a written contract be executed.

Reason for the Policy

In support of its operations, Yale and members of its community purchase a variety of goods and services.  Depending on the nature and value of these goods and services, a written and signed Purchase Contract may be required.  This policy establishes the applicable requirements and expectations of members of the Yale community who are responsible for making purchases on behalf of the University.

Definitions

Authorized University Signatory

A Yale officer or employee who has been granted or delegated authority to sign agreements, contracts, and other legally binding documents on behalf of Yale, as described in Policy 1104 University Signature Authority.  As used in this policy, “appropriate Authorized University Signatory” means an Authorized University Signatory with authority to sign the specific Purchase Contract at issue.

Data Use Agreement

A Purchase Contract in which the University agrees to purchase the right to access or use data from an external entity.  In some cases, this type of purchase is also characterized as a license to access or use data.

Data User

Anyone who has access to or responsibilities for Yale Data.

Goods Contract

A type of Purchase Contract in which the primary benefit the University seeks to obtain under the contract is one or more physical items, such as supplies or equipment.

Honorarium

An honorarium is a non-contractual payment given to an individual (not a corporation, business, or partnership) in recognition of a special service or achievement, such as a lecture, participation in a workshop, or similar activities.  An honorarium ordinarily is given when custom or decorum preclude negotiating a fixed price for an individual’s service.  If the fee has been set by the individual or negotiated by the University, or if the University has been invoiced for the fee, it is not an honorarium, and is instead a contractual service fee.  An honorarium usually involves a single payment, and generally is not appropriate to compensate an individual for services provided over several weeks or months.  Typically, honoraria will not exceed $10,000.

Purchase Contract

A contract under which the University agrees to purchase for goods or services, or for rights in or to data or software.  Depending on the nature and value of the goods and services, Yale may form a Purchase Contract by issuing a Supplier a Purchase Order.  See the definition of “Purchase Order,” below.  In some circumstances, however, a written and signed Purchase Contract may be required. 

Purchase Order

An offer made by the University to a Supplier to purchase goods and/or services pursuant to certain terms and conditions.  When the Supplier accepts the Purchase Order, a legally binding contract is formed.

Services Contract

A type of Purchase Contract with an external individual or organization in which the primary benefit the University seeks to obtain under the contract is the individual or organization’s services, rather than goods.

Signature Authority

Permission granted or delegated (as described in Policy 1104 University Signature Authority) to sign agreements, contracts, and other legally binding documents on behalf of Yale.  Only Yale officers or employees who have been given Signature Authority by the Yale Corporation By-Laws or a resolution of the Yale Corporation, or who have been delegated Signature Authority as prescribed in such By-Laws or resolutions, may execute and deliver agreements, contracts, and other legally binding documents on behalf of Yale.

Supplier

A person or organization that provides goods or services (including data or software) to the University in exchange for a fee.  Suppliers are also referred to as “Vendors.” 

Yale Data

Yale Data are (i) data created or received by Data Users while acting on behalf of Yale, or (ii) data created or received by Yale students or trainees while providing a service to Yale or to others as part of their education or training.  Yale Data do not include intellectual property which by law or by Yale’s copyright or other policies is owned, licensed, or otherwise legally controlled by a Data User.

Policy Sections

3210.1 Requirement of a Written Purchase Contract for Certain Purchases

All purchases are expected to comply with, and must be made in accordance with, the relevant provisions of Policy 3201 General Purchasing.

Certain purchases of goods and services, as detailed in the sections below, must be memorialized in a Purchase Contract signed by the University and the Supplier. 

Procurement, in consultation with the Office of General Counsel, reserves the discretion to determine which Purchase Contract form should be used in a given transaction.  Requests to use alternative forms from those described in the sections below and the referenced procedures should be directed to Procurement.

3210.2 Contract Administration Responsibilities

It is the responsibility of the Requestor and relevant Lead Administrator (or Designee) to review all terms and conditions of a proposed Purchase Contract before sending it to the appropriate Authorized University Signatory, usually an individual in the Procurement Department, for review and approval.  This includes determining, in consultation with the appropriate University officials, that:

  • The University is ready, willing, and able to comply with all obligations the University would undertake in the proposed Purchase Contract;
  • The department or unit is ready, willing, and able to meet the financial obligations pursuant to their budget in the proposed Purchase Contract;
  • The Purchase Contract complies with all applicable University policies, sponsored award terms and conditions, and federal regulations.

The Procurement Department is responsible for:

  • Answering questions about proposed Purchase Contracts and consulting with the Office of General Counsel, as necessary;
  • Providing guidance on Purchase Contracts and related requirements and processes;
  • Reviewing, negotiating, and approving Purchase Contracts. 

The Requestor’s department is responsible for overseeing the administration of the Purchase Contract.  This includes designating one or more individuals responsible for the following:

  • Understanding the related terms and conditions of the Purchase Contract;
  • Overseeing the Supplier’s performance to ensure that it complies with the terms of the Purchase Contract;
  • Ensuring that the University complies with any obligations it has undertaken in the Purchase Contract and communicating those obligations to applicable University personnel;
  • Tracking the expiration date of the Purchase Contract and, if necessary, requesting that the appropriate Authorized University Signatory review and approve a renewal, extension, or amendment of the expiring Purchase Contract.

3210.3 Services Contracts, Generally

Members of the Yale community should engage with Suppliers and enter into Services Contracts only when University faculty or staff are not available, or do not possess the required skills, to provide the services.  Suppliers of services normally possess specialized skills, knowledge, or credentials that are not readily available among the University’s faculty and staff, and the expertise is provided on a temporary basis.

Payments must comply with all applicable governmental rules and regulations and University policies, including but not limited to, sponsored award terms and conditions, taxation, and conflict of interest.  Federal funds, including those recovered as facility and administrative costs may not be used to pay consulting or other professional fees for an individual who is employed full time by the federal government.

Members of the Yale community who wish to retain a Supplier for a Services Contract must do so in accordance with the processes detailed in Procedure 3210 PR.01 Services Contract Process.

A. Services Contracts Valued < $10,000

Subject to the exceptions enumerated in the sections below, Yale does not require a written Purchase Contract signed by the University and the Supplier for Services Contracts valued less than $10,000.  However, a Requisition should be created in Workday to authorize the purchase and a Purchase Order should be issued.  Even if a written Purchase Contract is not required by Yale’s policies, Members of the Yale community engaging in such purchases may determine that obtaining a written Purchase Contract is preferable, in which case they should consult with the Procurement Department about how to proceed.  The Procurement Department may, at its discretion, require a written Purchase Contract for these services if circumstances warrant one.

For information regarding how to process Services Contracts valued below $10,000, please consult Procedure 3210 PR.01 Services Contract Process.

B. Services Contracts Valued $10,000

Yale requires a written Purchase Contract signed by the University and the Supplier for Services Contracts valued at $10,000 and greater. A Purchase Contract is not a substitute for a Purchase Order; a Requisition should be created in Workday and a Purchase Order should be issued.

If Members of the Yale community anticipate that they will need services from the same Supplier multiple times over the course of a year, the Purchase Order should reflect the full scope of the engagement. If at any point the full scope of the engagement exceeds $10,000, a written Purchase Contract is required.

The Purchase Contract must be reviewed and approved by an appropriate Authorized University Signatory before the commencement of work.  If the Purchase Contract has not been approved by an appropriate Authorized University Signatory before the commencement of work, an Authorized University Signatory has discretion to sign the Purchase Contract and approve the transaction retroactively, but only if the engagement otherwise complies with all University policies and requirements.

For information regarding how to process Services Contracts valued at or above $10,000, please consult Procedure 3210 PR.01 Services Contract Process.

3210.4 Guest Speaker Contracts, Artists and Performers, and Honoraria

The University hosts numerous paid speakers and performers each year.  It distinguishes between contractual speaking or performance fees, which are the subject of agreements between the University and the speaker or performer, and Honoraria, which are non-contractual payments.  Please see the definition of Honorarium, above. 

Honoraria and contracts distinguished.  An Honorarium does not involve contractual obligations.  If the University has an enforceable right to demand that the services be performed, or if the speaker or performer has an enforceable right to demand that they be compensated for providing the services, the relationship is contractual, and a service fee, rather than an honorarium, must be paid.  In addition, an Honorarium can only be paid to an individual; if the payment will be made to a corporation, business, or partnership, the University must do so pursuant to an agreement. 

For engagements where the University is entering into a contract with a speaker or performer, as distinguished from an honorarium, the appropriate University forms must be used.  Please consult Procedure 3210 PR.01 Services Contract Process for additional guidance on which forms to use for speakers, performers, and other related contractors, including freelance photographers.  All engagements of paid speakers and performers must comply with all applicable guidance from the Controller’s Office, including Policy 3410 CT Income Tax Withholding for Athletes and Entertainers

3210.5 Purchase Contracts for Software, Web Development Services, and Electronic Applications

Yale requires a written Purchase Contract for software, web development services, and electronic applications if:

  • The value of the software, web development service, or electronic application and any related goods or services provided under the agreement is reasonably expected to exceed $10,000; or
  • The software, website, or electronic application is expected to be widely used by the University community; or
  • The software, website, or electronic application involves the sharing or storage of Moderate or High-Risk Yale Data, as defined in Policy 1604 Data Classification Policy, or personally identifiable information with a third party; or
  • The software, website, or electronic application provides for the processing of credit and debit card payments to Yale.

Such contracts must be reviewed and approved by an appropriate Authorized University Signatory.

Any contract for software, web development services, or electronic applications with a user interface that will be used for University business should include terms covering accessibility that have been approved by OGC, unless otherwise directed by the ITS Digital Accessibility Office or the Procurement Department.  Please refer to the requirements of Policy 1605 Web Accessibility Policy.

Members of the Yale community who wish to retain a Supplier for a Purchase Contract for software, web development services, or electronic applications must do so in accordance with the processes detailed in Procedure 3210 PR.01 Services Contract Process and Procedure 3210 PR.03 Process for Purchase Contracts for Software, Web Development Services, Electronic Applications and Data Use Agreements.

3210.6 Purchase Contracts that Provide Access to Yale Data

Any Purchase Contract that will provide a Supplier with access to Yale Data must comply with all relevant University policies and procedures governing data storage, disclosure, access, and classification, including the University’s minimum privacy and security standards.  For all such Purchase Contracts, it is the responsibility of the Requestor and/or the relevant Lead Administrator (or Designee) to determine the classification of the pertinent Yale Data under Policy 1604 Data Classification Policy and to ensure that the Purchase Contract complies with the minimum security standards for each classification.

Yale requires a written Purchase Contract signed by the University and the Supplier for all Purchase Contracts involving Supplier access to Moderate or High-Risk Data, regardless of their value.

Any Purchase Contract that would provide a Supplier with access to Moderate or High-Risk Yale Data must include confidentiality and data security provisions approved by OGC.  In addition, any Purchase Contract that would provide a Supplier with access to personally identifiable information possessed or controlled by Yale must include privacy provisions approved by the Yale Privacy Office.

Members of the Yale community who wish to retain a Supplier for a Purchase Contract that will provide a Supplier with access to Moderate or High-Risk Yale Data must do so in accordance with the processes detailed in Procedure 3210 PR.01 Services Contract Process and Procedure 3210 PR.03 Process for Purchase Contracts for Software, Web Development Services, Electronic Applications and Data Use Agreements.

3210.7 Purchase Contracts Involving Payment Card Processing

A written contract is required for all purchases that provide for the processing of credit and debit card payments to Yale.  All such engagements must comply with Policy 2820 Acceptance of Payment Cards.  Members of the Yale community who wish to retain a Supplier for a Purchase Contract that will provide for the processing of credit or debit card payments to Yale must do so in accordance with the processes detailed in Procedure 3210 PR.01 Services Contract Process and Procedure 3210 PR.03 Process for Purchase Contracts for Software, Web Development Services, Electronic Applications and Data Use Agreements.

3210.8 Data Use Agreements

Yale requires a written Purchase Contract signed by the University and the Supplier for all Data Use Agreements, regardless of the value of the data Yale is purchasing.  The Data Use Agreement must be reviewed and approved by an appropriate Authorized University Signatory.

Data Use Agreements often include detailed terms governing how the University may use third-party data and the measures the University must take to protect the data.  If the Data Use Agreement includes an obligation to keep the data confidential, the data must be treated as High Risk Data under Policy 1604 Data Classification Policy.

Members of the Yale community who wish to retain a Supplier for a Data Use Agreement must do so in accordance with the processes detailed in Procedure 3210 PR.01 Services Contract Process and Procedure 3210 PR.03 Process for Purchase Contracts for Software, Web Development Services, Electronic Applications and Data Use Agreements.

3210.9 Purchase Contracts Requiring Additional Reviews or Approvals

Purchase Contracts for certain services and goods require reviews and approvals in addition to the requirements established in the sections above (e.g., Consulting Agreements Involving Non-U.S. Payees, Use of Yale’s Name etc.).

For detailed information about purchases requiring additional approvals, please refer to section 3201.7 Purchases Requiring Additional Approvals of Policy 3201 General Purchasing.

3210.10 Goods Contracts

Yale requires a written Purchase Contract signed by the University and the Supplier for certain Goods Contracts, based on their value, as detailed in the subsections below.

Members of the Yale community who wish to retain a Supplier for a Goods Contract must do so in accordance with the processes detailed in Procedure 3210 PR.05 Goods Contracts Process.

For additional requirements applicable to Equipment purchases, refer to Policy 4209 Equipment.

A. Goods Valued < $10,000

Yale does not require a separate, signed Purchase Contract for purchases of goods, including equipment, with an aggregate value of less than $10,000.  For those purchases, the Purchase Contract consists of the University’s standard Purchase Order Terms and Conditions.  To be effective, the Purchase Order or the attachments to the Purchase Order must identify with specificity the item(s) the University wishes to purchase and the price(s), as well as the shipping/delivery terms.

B. Goods Valued $10,000 and < $100,000

Unless directed by the Procurement Department, Yale does not require a separate Purchase Contract for purchases of goods, including equipment, with an aggregate value of $10,000 or greater and less than $100,000.  For those purchases, the Purchase Contract consists of the University’s standard Purchase Order Terms and Conditions.  To be effective, the Purchase Order or the attachments must identify with specificity the item(s) the University wishes to purchase and their price(s), as well as the shipping/delivery terms.

Purchases of goods in this value range do, however, require review and approval by the Procurement Department.  The Procurement Department may require a written, signed Purchase Contract for such purchases if, for example, the Supplier will not agree to the University’s standard Purchase Order Terms and Conditions. 

C. Goods Valued $100,000

Yale requires a separate, written Purchase Contract for purchases of goods, including equipment, with an aggregate value of $100,000 or greater.  Purchases of goods of this value require approval by the Procurement Department.

The Procurement Department, in consultation with the Office of General Counsel, may decide the form of such written Purchase Contract. 

3210.11 Mixed (Services/Goods) Contracts

Many purchases involve both services and goods.  If the services provided under the Purchase Contract solely involve the design, assembly, or installation of goods, including equipment, Yale does not require a separate Services Contract, so long as the terms of the Purchase Contract adequately describe the services.  If, however, the transaction involves additional or continuing services (e.g., providing consulting and advice, or continuing training or maintenance), Yale generally requires a separate Services Contract if the aggregate value of the services is expected to meet or exceed $10,000.

Special Situations & Exceptions

Except for those exceptions this policy explicitly commits to other offices, all exceptions to this policy must be approved by the Controller’s Office, in consultation with the Office of General Counsel, or University Officer, as appropriate.

Roles & Responsibilities

Chief Procurement Officer

  • Responsible for the development, implementation, and enforcement of this policy.
  • Reviews and, as appropriate, approves and signs Purchase Contracts valued up to $5 million.

Controller’s Office

  • Interprets policy.
  • Reviews exception requests and, when appropriate, grants exceptions, in consultation with the Procurement Department and the Office of General Counsel.

Departmental Business Office

  • Responsible for supervising the administration of their Requestors’ Purchase Contracts.

Lead Administrator

  • Lead Administrator (or Designee) with the Requestor, reviews all terms and conditions of their proposed Purchase Contract before sending it to the appropriate Authorized University Signatory for review and approval.
  • Lead Administrator (or Designee) with the Requestor, ensures their proposed Purchase Contracts comply with all relevant requirements, depending on the subject matter and value of the Purchase Contract.
  • Responsible for implementing and maintaining effective internal controls and procedures over purchasing transactions and records for the unit(s)/departments they oversee.

Office of General Counsel (“OGC”)

  • Provides the standard terms and conditions for Purchase Contracts.
  • Reviews and, as appropriate, approves deviations from the standard terms and conditions for Purchase Contracts.

Procurement Department

  • Responsible for answering questions about proposed Purchase Contracts and for consulting with OGC, as necessary.
  • Provides guidance on Purchase Contracts and related requirements and processes.
  • Reviews and, as appropriate, approves Purchase Contracts.

Requestor

  • Documents the business need for goods or services and determines that the costs are reasonable and allowable in accordance, for example, with sponsored award terms and conditions, and federal regulations.
  • With their Lead Administrator (or Designee), reviews all terms and conditions of their proposed Purchase Contract before sending it to the appropriate Authorized University Signatory for review and approval.
  • With their Lead Administrator (or Designee), ensures their proposed Purchase Contracts comply with all relevant requirements, depending on the subject matter and value of the Purchase Contract.   

Vice President for Finance and Chief Financial Officer

  • Reviews and, as appropriate, approves and signs Purchase Contracts greater than $5 million.