Policies & Procedures Manual - Elizabeth City State University

400.1.37Adopted: 06/14/05ELIZABETH CITY STATE UNIVERSITYMaintenance and Service ContractsMaintenance Service ContractsFor some types of equipment, such as specialized scientific apparatus, it is often most economical toarrange for a service or maintenance contract with the manufacturer or service agency. The costs ofservice on this equipment must be borne by the using department and usually involves a service callcharge, labor, and parts charges each time repair or maintenance is required. While parts and suppliesare usually not covered in the service contract, the savings on service calls and labor charges canmake the lump sum payment for a service contract very reasonable. Maintenance Service contractscan also be established for computer software and electronic on-line data subscriptions. The initialpurchase of software often requires the establishment of a software “license” which usually includesa written agreement.Purchase Requisitions RenewalsA service or maintenance contract is initiated by submitting a Purchase Requisition to the PurchasingDepartment. Expendable parts are not usually covered under a maintenance agreement, and a separateconfirming Purchase Requisition must be issued and submitted to the Purchasing Department forcharges not covered by a contract. The continuation of established maintenance service contracts tosubsequent years may be accomplished by submitting a new requisition to the Purchasing Department60 days prior to the expiration of an existing contract. Each renewal requisition must clearly makereference to the existing purchase order number established for the original agreement/contract. Anew written agreement need not be included with the requisition if . the previous written agreementon file in the Purchasing Department has been subject to legal review and has not been changed by thevendor. When the written agreement is included with the requisition, it must be signed by thedepartment before it is sent to the Purchasing Department.Legal ReviewAll written contracts/agreements in excess of $5,000 must be reviewed by the University’s legalcounsel prior to the issuance of a purchase order. Upon any subsequent renewal of a maintenanceservice contract, legal review of the written agreement is not required unless changes were made tothe agreement by the vendor.