FREQUENTLY ASKED QUESTIONS

Selling Goods and Services to External Customers FAQ

  1. When can I use a Standard University Contract to execute an external sales transaction?

    The Office of the General Counsel has approved the contracts listed below. These contracts can be used for any approved external sales activity.

  2. How can we extend a contract without starting all over again?

    The use of the Amendment form allows the extension of a contract without renegotiations. It allows for changes to description of services, compensation and term of the contract.

  3. Where can I find the Amendment form?

    Contact External Sales at extsales@umn.edu for a copy of the form along with the instructions. You will be asked to return the filled out copy of the Amendment along with a copy of the original agreement to External Sales for review prior to seeking signatures.

  4. How do I know who should sign the contract for the University?

    The Office of Institutional Compliance has a website for determining the proper Delegation of Authority: http://compliance.umn.edu/delegationSearchForm.asp

    Start with "Authority" "FN02" for Authority for External Sales of Goods & Services.

  5. What is an IESAF?

    The IESAF is an acronym for Internal/External Sales Approval Form (Form UM 1608)

    This form is used for approval of Internal or External Sales activity. This approval is necessary before any Internal or External Sales can begin.

  6. Should our department work directly with OGC if we know there will be changes to the standard terms and conditions?

    No. All External Sales contracts need to go through the External Sales Office first. We will review the changes and set priorities for the OGC legal reviews.

  7. Can contracts be made for longer than one year?

    Currently, contracts can be made for up to three years without OGC approval. Longer terms can be considered.

  8. When would I use a Confidentiality Agreement (SC205) vs a Confidentiality Addendum (SC106 or SC107)?

    If you are only in the negotiation stage and no work is currently pending, use the “stand-alone” Confidentiality Agreement SC205. If work is pending and a Service Agreement is being created, then use the SC106 or SC107 Confidentiality Addendum to the Services Agreement.

  9. How do I decide when to use a Lab Use Agreement (SC104) vs a Services Agreement (SC102)?

    If University employees are doing the work for the customer, use a Services Agreement. If the Customer is doing the work, use a Lab Use Agreement.

  10. Do I automatically add a fixed overhead to my Internal costs to arrive at my External Sales price?

    No. The goal of External Sales pricing is to match “market price” or what the outside market will bear. The University does not want to compete unfairly in the market by under-charging customers. First, determine your direct costs. Then compare that cost to the market price to see the difference. Ideally, you would want to cover both your direct & indirect costs in your External price and possibly add additional revenue to reach market price.

  11. Do I need to provide a rate development even though the department IESAF, which has rates, has been approved

    Yes, labor and fringe rates change annually and approved IESAFs can be several years old.

  12. Do all transactions need a contract?

    No, low risk contracts, as determined by the risk assessment survey do not necessarily need a contract.

  13. When can I use the Short Form Services Agreement?

    The criteria must be low risk as defined by Administrative Policy: Selling Goods and Services to External Customers. It cannot be used for international customers and the form cannot be modified, changed or amended. Total contract value should be $10,000 or less.

  14. Does the External Sales Office require a signed copy of the agreement?

    No. Keep the signed copy in your department records.

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