Financial Affairs

MASTER SERVICE AGREEMENTS



Preferred Vendors

Competitive Bidding

Commodity Types
Training Programs

Overview
A master agreement ("MA") is a special type of contract that is commonly used when utilizing a vendor to purchase goods or services multiple times over a longer period of time, but the specifics (e.g. quantity, specifications) of each order are not known up front.  Combining these types of purchases under an MA may provide better leverage on pricing and other terms and as such, an MA should be used in these circumstances whenever possible.

The MA covers various general legal and business terms so that a contract does not have to be negotiated for each specific order.  Typical business terms include price (by part, hour, etc.), quality of service expectations, included services (warranty, shipping, etc.) and other key items.  A quote and purchase order is then generated, referencing the MA, for specific orders that includes what products or services are being ordered. 

All new MAs, where orders would require a purchase order, with an actual or estimated value over $2,500 require review and approval by Procurement Services prior to execution and may be subject to the same policies and restrictions as a purchase order.  Procurement will generally require an estimate of anticipated expenses under the MA as part of the review process.

Master Agreements over $25,000 are also subject to the Competitive Bidding policy. However, projects that fall under the scope of the MA are not required to be bid, provided the contract is in compliance.

In addition, like any contract, MAs are subject to the Contract Requirements and Procedures policy and require legal review by the Office of the General Counsel (OGC) if their anticipated value over the life of the agreement is $50,000 or more, or if they involve an item of “special risk” as defined by the policy.

Examples
By way of example, an MA may be used for a general contractor, who is on campus many times and it would be impractical to sign a new contract for each job. Rather, an MA is created that covers the legal terms and key business items including hourly rates and performance standards, while a purchase order is generated off a proposal or quote that contains the specific information about the construction project (statement of work). The PO also contains a line stating that the terms of the MA are in effect for this order.

Additional examples include:

New Master Agreements
Items to consider when deciding to create or entering into a new master agreement:

If you have specific questions regarding the business terms of an MA, contact Procurement Services directly at x2-7510 or procurement@depaul.edu.

If you have questions regarding the legal terms of an MA, contact the OGC directly at x2-8865 or contractreview@depaul.edu.