Procedure for the Evaluation of Contractual Commitments – May 25, 2020

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PROCEDURE FOR THE EVALUATION OF

CONTRACTUAL COMMITMENTS

Procedure

Type:

Management

Initially

Approved:

May 25, 2020

Procedure

Sponsor:

General

Counsel &

University

Secretariat

Last Revised:

May 25, 2020

Administrative

Responsibility:

Associate

General

Counsel

Review

Scheduled:

October 2025

Approver:

Executive Leadership Team

PROCEDURES

EVALUATION OF CONTRACTUAL COMMITMENTS AND RISKS

1.1

Authorities are expected to review the Contractual Commitments in full prior to

Approval of any Contractual Commitments. Authorities will exercise due care and

attention to ensure that the Contractual Commitments are in the best interest of the

University and that, at the time of the Approval:

a. the Contractual Commitments are consistent with the University’s strategic plan;

b. Contractual Risks have been considered and either mitigated or the potential

adverse impact to the University consciously accepted in accordance with

section 1.2 below;

c. the University is capable of meeting its Contractual Commitments

d. sufficient and approved budgetary resources have been allocated to the activity

undertaken under the Contractual Commitments to address any Financial

Commitments and indirect costs;

e. the University has not issued any directives prohibiting the type of spending

undertaken in the Contractual Commitments;

f. the Authority is satisfied that the other parties to the Contractual Commitments

are capable of meeting their obligations;

g. proper consultation has taken place with any other Department who may be

impacted by the Contractual Commitments;

h. where other Departments are required to contribute resources to fulfill the

obligations of the University under the Contractual Commitments, the

appropriate Authority within that Department has Approved the terms of the

Contractual Commitments that are relevant to the Department’s contribution;

and

i. the Contractual Commitments are compliant with applicable laws and University

policies.

Procedure for the Evaluation of Contractual Commitments – May 25, 2020

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1.2

Authorities should review and consider Contractual Risks in accordance with the

following principles:

a. Contractual Commitments should only be Approved where the benefit to the

University of entering the Contractual Commitments outweighs the potential

negative impact of the Contractual Risks;

b. Contractual Risks should only be accepted after reasonable attempts have been

made to identify methods of mitigating the Contractual Risks;

c. the University should seek to negotiate Contractual Commitments which fairly

allocate Contractual Risks between the University and the other party; and

d. Contractual Risks that are accepted should be similar to other types of risk the

University accepts or is inherently subject to, in the course of its normal

operations.

1.3

Where an Authority is uncertain about the effect of the Contractual Commitments or

the nature of the Contractual Risks that may arise from the Contractual

Commitments, the Authority will seek the support of the Office of the General

Counsel and / or other appropriate subject matter expert, to review and provide

recommendations regarding the Contractual Commitments prior to their Approval.

1.4

Authorities should endeavor to enter into Contractual Commitments that are based

on templates that have been provided by the Office of General Counsel wherever

possible.

NEGOTIATION OF CONTRACTUAL COMMITMENTS AND RISKS

2.1

Employees who do not have contractual signing authority may negotiate terms of

Contractual Commitments on behalf of the University or submit a proposal which

may form the basis of Contractual Commitments, provided that they have received

the Approval of the Authority who would have contractual signing authority over the

proposed Contractual Commitments.

2.2

In the circumstances described in section 2.1, the Employee negotiating the terms

of the Contractual Commitments will, prior to the Approval of the Contractual

Commitments, provide the Authority with a written description of:

a. the activities underlying the Contractual Commitments;

b. the Contractual Risks relating to the Contractual Commitments and whether

those Contractual Risks have been mitigated or not; and

c. the University’s operational needs addressed by the Contractual Commitments.

2.3

Authorities remain accountable for the Contractual Commitments that they have

Approved, but which were negotiated by another Employee.

Procedure for the Evaluation of Contractual Commitments – May 25, 2020

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DEFINITIONS

(1)

Approve /

Approval:

refers to the act of the University entering into Contractual

Commitments in accordance with this Policy. Contractual

Commitments may receive approval in many ways, such as

by an Authority signing or executing a contract, submitting

a binding proposal, accepting or issuing a purchase order

or quotation, agreeing to terms of use, or accepting online

terms and conditions

(2)

Authority:

means the Board of Governors or an Employee who has

contractual signing authority over Contractual

Commitments on behalf of the University in accordance with

the Policy and Procedure

(3)

Board of

Governors:

means the Board of Governors of Mount Royal University

(4)

Contractual

Commitments:

means the binding legal commitments that are established

between the University and one or more third parties

through a contract. For clarity, Contractual Commitments

exclude any legal commitments that may arise through the

establishment of a trust or endowment

(5)

Contractual Risks:

means the risks that arise as a result of the University

entering into Contractual Commitments and includes, but is

not limited to, the inherent risks of the activities that will be

undertaken as a result of the Contractual Commitments, the

risks which arise from the contractual relationship itself and

the risks which may arise if the Contractual Commitments

are breached by either party

(6)

Department:

means a faculty within the Academic Division or a

department outside of the Academic Division

(7)

Division:

means a division of the University that is led by a Vice-

President or the President

(8)

Employees:

means individuals who are engaged to work for the

University under an employment contract, including but not

limited to faculty, staff, exempt, casual and management

employees

(9)

Financial

Commitments:

means the total value of all payments, taxes or any other

fees paid by one party to another as a result of Contractual

Commitments. For clarity, this includes the value of all

payments made over the full term of the Contractual

Commitments, but excludes non-mandatory renewals or

optional extensions. For Contractual Commitments of

indefinite duration, the value is calculated as the greater of

either (i) the sum of the estimated payments that will be

made over the first five years of the contract or (ii) the cost

of terminating the contract on a without cause basis. For

clarity, all Financial Commitments are stated in Canadian

Dollars

Procedure for the Evaluation of Contractual Commitments – May 25, 2020

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(10)

Policy:

means the Contractual Signing Authority Policy

(11)

Procedure:

means this Procedure for the Evaluation of Contractual

Commitments of the Policy

(12)

PSLA:

means the Post-secondary Learning Act of Alberta, as

amended

(13)

Senior Leaders:

means either (i) any Employee who both reports to a Vice-

President or President and leads a Department and (ii) any

other person designated as a Senior Leader by the

Executive Leadership Team

(14)

University:

means the legal entity continued under the PSLA as “The

Board of Governors of Mount Royal University” and which

operates under the name “Mount Royal University”

RELATED POLICIES

•

Code of Conduct Policy – Board

•

Code of Conduct Policy – Employees

RELATED LEGISLATION

•

Post-secondary Learning Act of Alberta

RELATED DOCUMENTS

•

Contractual Signing Authority Policy

•

Procedure for the Approval of Contractual Commitments

•

Procedure for the Sub-Delegation of Contractual Signing Authority

•

Schedule 1 – General Authorities

•

Schedule 2 – Specific Authorities

•

Schedule 3 – Controls

REVISION HISTORY

Date

(mm/dd/yyyy)

Description of

Change

Sections

Person who

Entered Revision

(Position Title)

Person who

Authorized Revision

(Position Title)

04/20/2023

Editorial

Definitions

Policy Advisor

General Counsel and

University Secretary