PROCUREM ENT SERVICES OFFICE
Service Purchase Contract (SPC) Procedures
SECTION 1: OVERVIEW
1.1
What is a Service Purchase Contract?
A Service Purchas Contract (SPC) is a written form of agreement between the University and a contractor.
It commits both parties to the acceptance of providing a specific action on the part of the vendor for the
payment of a specific amount by the University in return for said service.
Any form of contractual agreement must be signed in advance of the service being given and received.
Sufficient time should be allowed for the preparation, revision and signature of a contract prior to the
anticipated commencement date.
All contracts/agreements must be signed by an authorized contracting officer, or their designee, as
indicated in the University President’s Delegation of Authority memo. Any university personnel
signing an agreement - who is not an authorized signatory - may be held personally liable for the cost of
the service and may also experience some disciplinary action.
1.2
Types of Service Contracts:
There are various types of contracts available for the purchase of a service. The most frequently used
forms are as follows:
1.2.1
SAP Generated Service Purchase Contracts (SPC)
These types of contracts can be one time agreements, multiple year agreements, or blanket
contracts where the full amount of the contract is encumbered for a fiscal year.
1.2.2
SAP Generated “Outline Agreements” (OA)
These types of contracts are typically used for “as needed” requirements for maintenance or repairs
by requesting departments. They are blanket contracts that do not encumber the full amount of the
agreement upfront. Each time a service is requested a requisition is entered into SAP and cross
references the contract number.
1.2.3
Blueback Contracts (BB)
This type of agreement is typically for longer terms, contain more complex arrangements and
required a more detailed scope of work.
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1.2.4
Examples of Service Purchases can include but not limited to those indicated below:
Consultants or External
Reviewers
Guest Speakers or
Entertainers
IT/Technical
ConsultantsDesign &
Development
Photographers or
Freelance Writers or
Proof Reading/Editing
Services
Outside Coaches & Officials
for Athletic Camps
Chartered Buses
for University
Sponsored Trips
Interpreters or
Captioning Services
Workshops or
Training on
University
Premises
Property Leases or
Property Appraisals
Fine Arts
Models
1.3
1.4
Equipment
Equipment Rentals
Maintenance/Repairs
(including Tents)
Or Annual Inspections
Misc.
Services/
Installations
Why is a Service Purchase Contract needed?
1.3.1
The PA State Procurement Code, Act 57, requires that a fully signed contract document must be in
place before a service has taken place.
1.3.2
This document needs to clearly define the scope of work and expectations of the contractor. It
provides the University and the contractor: with legal recourse and protection if the work is not
performed properly, property damages occur, or if someone is hurt in the process of executing the
service.
1.3.3
An SPC document provides the framework and limits the University’s liability for independent
contractors on premises (individuals or corporate).
1.3.4
The term “contracts” and “agreements” are used interchangeably and are to be considered the
same. They provide the same degree of obligations, liability and legal enforcement.
1.3.5
Kutztown University requires that any “honorarium” for guest speakers with a fee in excess of
$600 must be covered by a signed SPC.
What is the process for initiating a SPC at KU?
The purchase of services follows the same rules, regulations and dollar limits imposed for bidding, request
for quotes, sole sour requests, and the entering of requisitions that are used for the purchase of supplies &
equipment. Purchase requisitions for services need to provide a greater level of detailed information than
those for the purchase of a commodity.
1.4.1
A requesting department or individual identifies a need and enters a requisition into the SAP
Financial System for approvals.
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1.4.2
The requisition needs to provide a complete description of the services in the SAP TEXT field that
includes the following information:
1.4.2.a WHO: Vendors full name, address (not just a PO box), phone & fax numbers, e-mail
address, point of contact, Federal ID number or Social Security Number, and KU
assigned vendor number (VENLST).
1.4.2.b WHAT: A detailed scope of work or description of the service required, an itemized cost
breakdown (Time & Material or fixed) and any attachments from the vendor. This must
be explicit enough to be enforceable in the event of a dispute.
Attachments and Terms & Conditions: Requesting departments should forward to the
Procurement Services Office any vendor issued quotations, descriptive attachments, or a
listing of vendor-issued terms and conditions. These items will be incorporated into any
Service Purchas Contract (SPC) and made a part of the contract where deemed
appropriate by the contracting Officer.
1.4.2.c WHERE: Location where the service is to take place and the name of the department
needing the service. If the service is to support university-owned equipment, a complete
description and location of the equipment is needed for this requirement (manufacturer,
model, serial number, etc.).
1.4.2.d WHEN: The start and end dates/times of the service needed. Will this Contract be
renewed in the future?
1.4.3
Vendor Provided Terms and Conditions:
1.4.3.a If a contractor presents any terms and conditions (Ts & Cs) to the university person
requesting the service, that person must attach a copy of the contractor’s Ts & Cs to the
requisition.
1.4.3.b Procurement Services will review these Ts & Cs to ensure they are in accordance with PA
State rules and regulations. Terms may need to be modified and will be negotiated with
the vendor.
1.4.4
Blanket SPCs:
1.4.4.a Blanket contracts are created to provide users with on-going needed services.
1.4.4.b Requestors need to enter requisitions for a blanket contracts with a “not to exceed dollar
amount” by putting the total dollars in quantity field and $1.00 in the unit cost field. This
will allow the Accounts Payable Office to make multiple payments against one contract.
1.4.5
Travel expenses associated with a service contract:
1.4.5.a If a contractor indicates that his/her travel expenses are to be paid for by the university,
the cost should be included in the actual service contract which will eliminate the need
for the department to initiate an additional requisition & purchase order.
1.4.5.b If a contractor indicates that the travel expenses are to be considered separate from their
fee for service, the end user should include this fee on a separate line within the same
requisition.
1.4.6
Contractors must submit invoices for any and all services provided. The appropriate contract
number must appear on the invoice in order to expedite processing and accounts payable to render
payment. All requests for payment for services provided must be approved by the department.
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1.4.7
If payment for a service is required on the day it is provided, the individual or department must
submit an approved invoice, and make arrangements with Accounts Payable to pick up the check
prior to the date of the event.
SECTION 2: ROLES AND RESPONSIBILITIES
2.1
Requisitioner: Roles and Responsibilities
2.1.1
Contract Preparation:
2.1.1.a identification of need
2.1.1.b identification of funding source
2.1.1.c obtain the necessary vendor information to provide service
2.1.1.d composing a complete, clear, and concise statement of the service to be provided
2.1.1.e providing any additional T/C provided by the vendor
2.1.1.f submitting a requisition to purchase the service through the SAP system
2.1.1.g requisition arrives in Procurement Services for contract processing
2.1.1.h administering/managing the contract after it has been issued
2.1.2
Contract Administration Responsibilities:
2.1.2.a The initiating department or individual responsible for requesting a services is typically
given the responsibility of “managing the contract”.
2.1.2.b Contract management begins after a contract has been fully signed and approved and does
not end until the service has been provided and the final acceptance of the work has been
given. At that point the contract will be closed when the final payment has been issued to
the contractor.
2.1.2.c The obligations of the contractor are stated in the contract, however, contractors may not
always perform to the University’s expectations. It is essential that the designated contact
person monitors the contractor’s performance to assure that the University is provided
exactly what it has contracted for in terms of quality, timeliness and costs.
2.1.2.d Duties and responsibilities of a contact person include, but are not limited to the
following:
• Ensure the contractor is performing work as required by contract.
• Immediately contact Procurement Services Office if contractor is not performing
satisfactorily, or if terms are being violated.
• Accept and evaluate quality of service provided; if performance does not meet contract
requirements, advise Procurement of identified deficiencies, so remedial action can be
taken before final payment is made.
• Approve invoices (with signature) and submit to Accounts Payable for payment.
Note: Invoices must be submitted in order for Accounts Payable to render payment.
If payment is required on the date that service is provided, contact person must
make arrangements with Accounts Payable in advance.
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2.2
2.3
Procurement: Roles and Responsibilities
2.2.1
Procurement Services (PS) is responsible for reviewing all requisitions to purchase services to
ensure that the requests contains complete information.
2.2.2
PS will work with the requesting department/individual to identify and clarify the scope of the
service to be performed.
2.2.3
PS will review any contractor provided terms and conditions for compliance with PA State
guidelines and negotiate with the contractor any conflicting terms not in compliance.
2.2.4
PS will develop the actual SPC and process the contracts for signatures in a timely manner.
2.2.5
PS will send copies of the fully executed contract to vendor and requesting department.
Vendor/Contractor: Roles and Responsibilities
2.3.1
Contractor will provide a clear, concise description of the service to be provided.
2.3.2
Contractor will also need to provide any additional terms and conditions required by their
company.
2.3.3
Contractor should also prepare and submit a completed W9 form if they are new to doing business
with Kutztown University.
2.3.4
Contractors are responsible for the timely review, signing, and return of the SPC.
2.3.5
Contractors need to provide the requested service in timely manner in accordance with the terms of
the agreement.
2.3.6
Contractors are required to submit invoices in accordance with the terms of the contracts.
SECTION 3: CONTRACTING AUTHORIZATION
3.1
A contract is not fully approved until all signatures required by the PA State Procurement Code have been
acquired.
3.2
No contract shall be implemented, nor shall any supplies, services or construction be accepted, or work
begun on any contract not processed, approved and executed in accordance within established policy and
procedures.
3.3
Only those persons indicated as Contracting Officers in the University President’s Delegation of Signature
Authority memo, are authorized to enter into contracts, agreements, leases and licenses for the University.
3.4
Any University employee not listed in the President’s memo is not authorized to sign or execute contract
or enter into agreements of any kind.
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3.5
Any person accepting supplies, services or construction before a contract is fully approved is in violation
of commonwealth law, and may be held personally and financially responsible. (See Act 57 memo)
SECTION 4: TIME REQUIREMENTS
4.1
For a complete list of the timelines required for the processing of requests to purchase both commodities
and services please refer to the Procurement Planning Guide found on the Procurement Services web
page:
Amount of Service
< $600
$601 to $5,000
$5001 to $20,000 *
$20,001 to $500,000 **
>$500,000 ***
4.2
Time Required to Process
Approximately 7 days
Approximately 14 to 21 days
Approximately 21 to 40 days
Approximately 45 to 60 days
Approximately 45 to 90 days
Additional review and signatures are required at the certain dollar thresholds indicated above and
described below:
*
requires University Legal Counsel Approval
**
requires University Legal Counsel and the Office of Attorney General
***
requires University Legal Counsel, Office of Attorney General, and Office of General Counsel
NOTE: The above timeframes given above are general guidelines only. Occasionally contract terms &
conditions must be negotiated, which may dramatically increase the time required to process the SPC.
Please consider the above guidelines as minimum time-periods.
SECTION 5: CITIZENSHIP
Please indicate on the requisition if an individual is a U.S. citizen or a non-U.S. citizen. If the person is a nonU.S. citizen, the department must provide a copy of the individual’s visa and/or employment card or a
permanent resident card to Procurement Services via an e-mail or 610-683-4831. The purchasing agent will
confirm the proposed consultant/speaker/entertainer is not on the Specially Designated Nationals List by
checking the federal consolidated list available at the US Treasury SDN List.
Proposed consultant/speakers/entertainers whose names appear on this list cannot be awarded a contract by
the university.
Please note that all non-U.S. citizens will have 30 percent withholding taxes applied to their fee.
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SERVICE CONTRACT FLOW CHART
START
PURCHASE REQ. CREATED
BY REQUESTING DEPT.
PURCHASE REQ.
APPROVED/RELEASED
PROCUREMENT SVCS
CREATES THE SPC
SPC SENT TO VENDOR
FOR SIGNATURE
UPON RETURN OF SPC,
PROCUREMENT OFFICE
COUNTERSIGNS SPC
SPC IS
$5000.00
OR LESS
FULLY APPROVED SPC
DISTRIBUTED TO
VENDOR, ACCTS
PAYABLE, AND
REQUESTING DEPT.
SPC
OVER
$5000.00?
SPC FORWARDED TO
LEGAL COUNSEL FOR
REVIEW & APPROVAL.
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