University of Minnesota  FAQ

Selling Goods and Services to External Customers

  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 I extend a contract without starting all over again?

    The use of the Amendment form (SC112) allows the extension of a contract without renegotiations. It allows for additions to description of services, compensation and length of the contract.

  3. Where can I find the Amendment to the Service Agreement?

     In the OGC Contracts Library. Send the completed amendment along with a copy of the original agreement to the Internal/External Sales Office for review prior to seeking signatures.

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

    Use the Delegations of Authority Search Form to determine who has the authority for the unit.
    Search on Authority FN02 for Authority for External Sales of Goods & Services and AD16 Confidentiality Agreements (non-research).

  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. If I know there will be changes to the standard terms and conditions, should I work directly with OGC?

    No, any changes or modifications to an external sales contract is reviewed by External Sales. External Sales will engage with OGC as appropriate.

  7. Can the duration of a contract be for longer than one year?

    Yes, the duration of a contract can be for up to five years. Contracts for durations less than five years can be amended for up to five years. Longer terms may be considered, contact the External Sales Office to discuss.

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

    If you are only in the negotiation stage and no work is currently pending, use the” Confidentiality Agreement SC205. If work is pending and a service agreement is being created, then use the SC102CI 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 add additional revenue to reach market price.

  11. Do all external sales transactions need a contract?

    For Low risk activity as determined by the risk assessment survey units have the discretion as to the method used to communicate the terms and conditions of the activity. For any dollar amount, units must choose to either use a University-approved standard short form contract to convey the terms and conditions of the agreement or rely on the standard terms and conditions on the EFS invoice. For mangaged risk, an OGC approved contract is required.

  12. 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 or changed but can be amended. Total contract is for any value.

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

    No. Keep the signed copy in your department records and add to the EFS contract as an attachment.