A contract exists whenever a Commonwealth agency enters into an arrangement with another party under which there are obligations or exchanges of consideration. Arrangements, such as affiliation agreements, might or might not require a university to pay money or receive money, but are still considered contracts. With limited exceptions, University Legal Counsel is required by the Commonwealth Attorneys Act to review and approve contracts and agreements entered into by the State System of Higher Education.
Legal review and approval is required for any contract between a university and another party unless the contracts are less than $1,500.00. Some university personnel have expressed the view that if the university is not expending funds, it is merely engaged in an "agreement" and not a contract. All contracts/agreements unless specifically exempted, are subject to legal review.
Contracts are submitted to the Office of University Legal Counsel for review and signature. It is the policy of the Office of University Legal Counsel to sign and forward or return contracts within two business days. Once signed by University Legal Counsel, contracts are generally forwarded for review to the Office of the Attorney General. The Office of Attorney General may take up to thirty days to approve or reject a contract.
If required, after review and approval by University Legal Counsel, a contract may first be sent to the Office of General Counsel (OGC). As of the date of last revision of this manual, only contracts in excess of five hundred thousand dollars ($500,000.00) must be sent to OGC. This limit is subject to change, and a notice will be issued if and when changes occur. At least an extra thirty days should be added by the university for the processing of contracts that require the additional approval from OGC.
No action by a contractor regarding a tentative contract should be taken until all parties have executed it including all appropriate legal entities. “After-the-fact” contracts (i.e., contracts submitted after the goods and services have been provided) will be rejected unless the contract meets the strict statutory requirements of an emergency contract. This is extremely important because the Attorney General will not give legal approval to late contracts and neither can University Legal Counsel. Additionally, since no Commonwealth agency can pay on an unlawful contract, the contractor’s only alternative is to proceed against the university in the Pennsylvania Board of Claims.
Pursuant to Act 57 (the New Procurement Code), no contract shall be effective until executed by all necessary Commonwealth officials as provided by law.