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SOP-PURCH-12: Purchasing Contracts and Signature Authority

SOP-PURCH-12: Purchasing Contracts and Signature Authority

Number: SOP-PURCH-12

Subject: Purchasing Contracts and Signature Authority

Summary: Defines when a Purchasing contract is required and who is allowed to sign purchasing-related agreements.

Source: University Procurement Services

Date of Issue: 02/20/2019

Date of Revision: 02/07/2025

Disclaimer

The information provided in this Standard Operating Procedure (SOP) is designed to provide helpful information on this procedure. The Office of Procurement Services reserves the right to determine on a case-by-case basis if a SOP should be adjusted for a particular situation. This SOP is not intended to cover each and every situation nor can it anticipate specific circumstances.

Rationale

A contract is a legally binding agreement between at least two parties. IU faculty, staff, and students do not have signatory authority and may not sign agreements on behalf of IU unless it is delegated to them by the Board of Trustees. If you have not been explicitly told that you are able to sign a contract on behalf of the university, assume you cannot legally sign the document.

Several IU offices have been delegated signatory authority. If you are presented with an agreement and are not sure which office to work with, review the Signature Decision Tree. Purchasing staff have been delegated signatory authority for purchasing agreements in accordance with policy FIN-PURCH-02.

In the case of purchasing contracts, it is imperative that Purchasing be involved as soon as possible when discussing arrangements with a supplier. Initial discussions, regardless of how informally they take place, can be legally binding. Submit a BUY.IU Requisition and necessary documentation, as described in this SOP, as soon as possible so Purchasing may begin the contract review and/or negotiation process.

A final note: IU Staff can sign agreements between IU departments. Common examples include space rental on IU campuses and hospitality agreements with IU-based catering.

Procedure

Situations That Require a Contract

A contract is required in the following situations:

The supplier provides a contract for the goods or services being provided. This includes transactions initially paid for with IU funds but ultimately reimbursed by IU Foundation funds.
Services that will be performed domestically, totaling $10,000 or more.
Purchases made in BUY.IU that involve the following high-risk situations, regardless of the value of the transaction:
- Ownership of products that IU has paid to create including, but not limited to, photography, videos, or apps.
- Licensing of products.
- Free software, free trials of software or equipment, demonstrations of software or equipment.
- High-risk entertainment. Examples of high-risk entertainment include but are not limited to bounce houses, events with animals present, food stands, and service of unwrapped food.
- Programs involving children (PIC). PIC events must be registered with IU Public Safety at least 14 days prior to the event. Include event registration confirmation when submitting the Contract Request Form and Requisition in BUY.IU.
- Critical or restricted data usage.
Services that will be performed internationally, or involve a non-US individual or entity, and total $5,000 or more. Situations include:
- Services performed outside of the US by either a US based or a non-US individual or entity.
- Services performed inside of the US by a non-US based individual or entity.

This is not an exhaustive list. If you are unsure if a contract is required for your situation, submit a Purchasing support form using the options listed below. Purchasing staff will review the situation and share their recommendation.

On the Support Form, select:

I currently work with Indiana University: in a department
I need help with: Contracts
Choose a topic: Do I need a contract?

Request Purchasing Develop a Contract or Submit a Supplier-Provided Contract

To request that Purchasing:

Develops a contract
Reviews a supplier-provided contract

Submit a BUY.IU Contract Request Form and use the PO Purchasing Contract Review template.

Contracts related to:

P-Card purchases.
Transactions that involve a contract related to an event between IU and an external entity that does not involve a Purchase Order.

Must be submitted for review and signature via a BUY.IU Contract Request Form and use the NO PO Purchasing Contract Review template in BUY.IU.

The Contracts and Signatures Documentation Library contains training documentation on submitting any of these types of requests.

Quotes that Require a Signature

Departments may request quotes from suppliers; however, departments may not sign supplier-provided quotes. Quotes often contain terms and conditions which much be reviewed, approved, and signed by Purchasing.

When a supplier provides a quote that requires a signature:

Attach the quote in the Comments or Attachments section of the BUY.IU Requisition.
Check the box next to “Order Restricted?” and select the Order Restricted Reason “Quote With Signature Line” in the General section of the Requisition.

The Requisition will route to Purchasing who will review the quote.

Definitions

Contract:: A legally binding agreement between at least two parties. More specifically, between an individual or group representing Indiana University and a party external to IU.
High-risk entertainment:: An event or activity that may pose a security concern based on the number of guests or an increased possibility of injury to attendees due to the activity being performed.
Non-US entity:: Any individual, business, or other group that is not legally organized in the United States.
Quote:: A document provided by a supplier that outlines the terms and conditions of a potential purchase.
Signatory authority:: The ability to legally sign an agreement on behalf of an organization. At IU, signatory authority is held by the Board of Trustees and delegated to specific IU staff.
US entity:: Any individual, business, or other group that is legally organized in the United States.

References

Change Log

Change Log Table
Date	Change description	Completed by
02/07/2025	Complete rework. Added list of scenarios of when contract is required. Removed step-by-step instructions for completing BUY.IU processes. Instructions moved to Contracts and Signatures Documentation Library linked in References.	Dawn Bodle, Sarah Chavez, Michelle Dugger, Jason Dunn, Kathi Sipes