TENNESSEE TECHNOLOGICAL UNIVERSITY

PURCHASING POLICIES AND PROCEDURES

15.  Contracts for Acquisition of Hardware, Software and Related Services

15.1   Scope

These guidelines apply to purchases, rentals, leases, licenses, trades or gifts of computer hardware (equipment) and software or related services for data processing or audio visual purposes and music performance license agreements.  Acquisition of computer systems involving the purchase of hardware with the development of application software shall be made in accordance with TBR Guideline B-030, Acquisition of Data Processing Equipment/ Software/Services, and TBR Guideline B-035, Procedures for Multi-Step Sealed Bidding.

15.2  General Rules

15.2.1  Each acquisition by the University should be documented in writing in the form of a purchase order issued by the University and/or a contractual agreement to formalize acceptance of a vendor’s bid and delivery of products or services.

15.2.2  All University acquisitions of hardware, software, and related services must comply with these guidelines. It is the responsibility of the University to negotiate changes in all vendor provided agreements so that such agreements comply with these guidelines.

If vendor does not provide an agreement, the attached standard agreement may be used for software licenses and, with appropriate adaptation, for equipment purchases. If maintenance contractors do not provide an agreement, the standard agreement for personal service contracts should be adapted for use as a maintenance contract.

The Office of General Counsel is available for assistance in negotiating modifications with the vendor. The University may wish to consult General Counsel prior to contacting the vendor regarding modification.

15.2.3  All agreements which exceed $249,999.99 or which do not comply with these guidelines shall be subject to the express approval of the Chancellor of the Tennessee Board of Regents. University must negotiate deletion of all unacceptable provisions and must attempt to secure the agreement of the vendor prior to submission to the TBR Central Office for approval.

15.2.4  The TBR Central Office has negotiated master agreements with several vendors permitting purchases thereunder by all institutions in the TBR system.  These agreements contain terms and conditions that have already been approved by the TBR Central Office. Whenever acquiring data processing related products, the University should first consult the Purchasing Office to see what may be available pursuant to any existing agreements.  Whenever acquiring audio visual related software, the University may wish to first consult the TBR media consortium.

15.2.5 Testing of Hardware, Software or Related Services

Agreements authorizing the University to conduct experimentation or testing of hardware, software or related services shall require the written approval of the Chief Information Officer in the TBR Central Office.  This category includes agreements which permit the experimental use of such products or services without warranty at little or no cost to the University and for the benefit of the vendor.  In relation to such agreements:

15.2.5.1  The University may not agree to use such experimental products or services in place of existing ones for ordinary academic or administrative purposes.

15.2.5.2 The University may not agree to hold the vendor harmless from any liability, notwithstanding the fact that the state may not be paying for the use of the experimental products or services.

15.2.6 Bidding Process

Generally, contracts for the acquisition of hardware should be awarded pursuant to the bidding process.  Service agreements are also subject to the bidding process.

15.2.6.1  All requests for proposals (bids), invitations to bid and bid specifications must comply with the University’s Purchasing Policies and Procedures, Section 1 and TBR Policy 4:02:10:00 and these guidelines and must clearly state all contractual provisions and requirements, including the mandatory provisions.

15.2.6.2  The bidding process must comply with the University’s Purchasing Policies and Procedures, Section 1 and TBR Guideline B-030. Provisions required by the University’s Purchasing Policies and Procedures and TBR Guideline B-030 must also be clearly stated in all requests for proposals (bids), invitations to bid and bid specifications.

15.2.6.3  All bid specifications must be incorporated by reference in all contracts awarded pursuant to the bidding process. The following language should be included in the contract:

The contract documents consist of this Agreement, the University's purchase order no. ______, the University's request for bids no. ________ (or University's request for proposals no. _______), Contractor’s bid dated ________________________ (or Contractor's proposal dated __________________________) and any addenda and/or amendments to this Agreement hereafter executed. In the event that provisions of the contract documents conflict, priority for interpretation shall be as follows: addenda and/or amendments (latest addendum or amendment with first priority), the Agreement, the University's purchase order, the University's request for bid (or University's request for proposals), and the Contractor's bid (or the Contractor's proposal).

15.2.6.4  All bid specifications and all other relevant contract documents must be attached to contracts that are submitted to the TBR Central Office for approval.

15.2.7 Software Licensing and Warranties

15.2.7.1  Generally, the legal right to use software is obtained in the form of a license agreement.  The permissible use of the software is governed solely by the terms and conditions stated in the license agreement. If the vendor does not provide a license agreement, departments may contact the University’s Purchasing Office for a standard form software license agreement, which should be used in this event.  Vendor provided license agreements must be amended to conform to these guidelines.

15.2.7.2   Limited warranty.  Unless internet service / access is a specific service to be paid for and provided under an agreement, no warranty regarding the internet is required, and the vendor may disclaim warranties regarding the internet.  In such a contract, the vendor must warrant something in relation to / in proportion to what is being paid for under the agreement, and the agreement cannot contain impermissible clauses other than the disclaimer regarding the internet. 

15.2.7.3   If software is provided at absolutely no cost (free), an acceptable warranty would provide that the vendor warrants that the vendor has the right to license the software as provided in the agreement.  However, the agreement cannot contain impermissible clauses other than a disclaimer of warranties (as long as the vendor warrants that the vendor has the right to license the software as provided in the agreement).

15.2.7.4   Agreements authorizing the University to conduct experimentation or testing of hardware, software or related services shall require written approval of the TBR Central Office.  This category includes agreements which permit the experimental use of such products or services without warranty, at little or no cost to the University and for the benefit of the vendor. In relation to such agreements:

a.        The University may not agree to use such experimental products or services in place of existing ones for ordinary academic or administrative purposes.

b.        The University may not agree to hold the vendor harmless from any liability, notwithstanding the fact that the state may not be paying for the use of the experimental products or services.

15.2.8  Related Services

 Agreements for related services include those for maintenance and support services.

15.2.8.1  Service agreements may be included as part of an acquisition agreement for hardware or software or may be a totally separate agreement with the same vendor or with a non-related vendor.

15.2.8.2  Service agreements are in the nature of personal services. Irrespective of the form of the service agreement, it must comply fully with Purchasing Policies & Procedures, Section 12 for personal service agreements as well as this Section.

15.2.9 Music Performance License Agreements

15.2.9.1  A music performance license agreement grants a non-exclusive license to perform publicly or permit the public performance of copyrighted musical compositions to which BMI, ASCAP, or SESAC (music licensing organizations) has the right to grant a license. Music performances which are under the sponsorship, control, authority or receive direct or indirect approval of the University will require a license.

15.2.9.2  In the event that an affiliated or non-affiliated group wishes to perform or sponsor a performance on campus of such music, the following provisions or equivalent language must be included in the contract:

a.        The performer hereby gives assurances that he/she has obtained all necessary copyright and royalty licenses from ASCAP, BMI, SESAC, any other performing rights organization or the copyright owner for the performance(s) presented under the terms of this agreement.

b.        The performer agrees to indemnify, hold harmless, and defend the University and the State of Tennessee from and against any and all claims, demands or suits which may be brought for copyright infringement allegedly arising in the course of the performance(s) presented under the terms of this agreement. Such indemnification shall extend to both criminal and civil actions and shall include any loss, damage, penalty, court costs or attorneys' fees incurred by the University.

c.        The University/state shall promptly notify the performer of any such claim brought against the state. The settlement or compromise of any claim brought against the state shall be subject to the approval of the appropriate state officials, as required by T.C.A. § 20-13-103.

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