Contract Issues
Who Can Sign Contracts?
To conduct business and obtain services, the U of A enters into a wide variety of contracts with other organizations, businesses, agencies, and individuals. Authority to sign contracts on behalf of the U of A is limited to the units listed below. All university contracts must be routed through one of these offices prior to contacting RM&S for assistance with insurance provisions in the contract.
- The University Contracting Office 626-3919
This is the primary department involved with reviewing, processing and signing university contracts for most business transactions.
- Office of Research & Contracts Analysis (ORCA) 626-3050
ORCA works specifically with university research agreements, including clinical trial agreements, confidential disclosure agreements, and material transfer agreements.
- AHSC Contracting Office 626-6070
This office works with Arizona Health Sciences Center colleges and departments to negotiate academic affiliation and preceptor agreements for medical student and residency training rotations between the U of A and other institutions and health care providers.
- Other U of A officials with contract signature authority include the President, Senior Vice President for Business Affairs, and the Director of Intercollegiate Athletics.
Insurance Issues in University Contracts
Most business contracts include language that specifies insurance requirements for one or both parties, and may assign or limit responsibility of either party for injuries. There may be additional provisions that have insurance or legal implications that must be reviewed and often modified to protect the university's business interests and limit liability.
Insurance and indemnification provisions in university contracts are governed by Arizona Board of Regents policy, the Arizona Administrative Code, and Arizona Revised Statutes. Compliance with these provisions and negotiation of alternative language is one reason why the U of A has centralized contract review and signature authority.
The following types of contract clauses often require deletion or modification before the contract can be approved for signature:
- Indemnification or Hold Harmless Provisions
As a state entity, the U of A is generally prohibited from offering to indemnify or hold harmless other non-state entities. However, this is a very common provision in many contracts, particularly those where the university uses the property of others such as in leases and facility use agreements. RM&S will work with the contracting officer to identify acceptable alternative language, or if necessary to request state approval for authority to enter into an indemnification agreement.
- Additional Insured Status
When the university is asked to provide evidence of liability insurance to another entity, such as a facility owner, a common request is for the other party to request to be named as an additional insured. This is a common transaction with commercial liability insurance, and it extends specific insurance rights and coverage to the other party. However, because the university's liability coverage is statutory self-insurance, we are prohibited from naming other entities as an additional insured.
- Waivers of Subrogation or Limits on Recovery
Some contracts include language which waives or limits one or both party's right to pursue full recovery of their loss from the other party. In effect, each party is agreeing to rely on their own insurance coverage for losses, and not "go after the other guy." The U of A is prohibited from entering into a contract that waives subrogation rights without prior state approval. Non-compliance with this restriction would directly jeopardize the university's insurance coverage from the state for losses associated with the contract.
The examples listed above are the most common insurance issues that arise during negotiation of university contracts. Contact RM&S for additional information or guidance.
