The President’s Delegation of Authority for Contract Administration (SAP 25.07.01.M1.01) outlines the types of contracts we process for the University, who is authorized to sign on behalf of the University, and up to what dollar values those signatories are authorized.
Certain authorized signers may have delegated their signing authority to authorized representatives in writing. Before signing anything, ensure a proper delegation is on file and in writing.Legal and Financial Liability:
Unauthorized signatories expose themselves and the university to legal and financial risks. Contracts entered into without proper authority may be deemed void or unenforceable, leading to potential legal disputes and financial repercussions.
An individual executing a contract on behalf of a state agency, without the authority to do so may be personally liable for damages flowing from repudiation of the contract. See Thomas, Richardson, Runden & Company, Inc. v. State of Texas, 683 S.W.2d 100 (Tex. App. - Tyler 1985 writ ref d n.r.e.).
In Thomas, an employee of the Texas Railroad Commission was found personally liable for a contract he signed that he was not authorized to sign. The Railroad Commission repudiated the contract and the vendor sued the State of Texas and the Railroad Commission. The court found that the employee was liable due to the employee's "implied warranty" of authority to execute the contract. The court ordered the employee to pay for the value of the services performed by the vendor and court costs.
Breach of Policy and Governance:
Signing contracts without authorization is a direct violation of our university's policies, procedures, and governance structure. This breach undermines the established processes in place to ensure compliance, transparency, and accountability, risking the university's reputation and standing.
Misalignment with Institutional Goals:
Contracts are strategic instruments that must align with the institution's goals and objectives. Unauthorized signings may result in agreements that do not serve the best interests of the university, compromising our ability to achieve our mission and strategic objectives.
Reputational Damage:
Public universities are held to high standards of integrity and accountability. Any perception of impropriety or irregularity in contract signings can tarnish the university's reputation, potentially affecting relationships with stakeholders, partners, and the community.
Regulatory Compliance:
Public institutions are subject to numerous regulations and compliance requirements. Unauthorized signings may lead to non-compliance with System, state or federal laws, triggering investigations and regulatory actions that could have severe consequences.
To mitigate these risks, it is imperative that all employees exercise diligence and ensure they have the appropriate authority before signing any contracts on behalf of the university. If there are uncertainties regarding authorization, individuals should seek guidance from Contract Administration by reaching out to contracts@tamu.edu.
- Submit a requisition if the purchase exceeds $25,000 or if it is software (regardless of value).
- Submit a requisition regardless of dollar value if the funds are to be encumbered.
- Submit a contract request if the purchase is not software, less than $25,000 and the funds will not be encumbered.
- Submit a contract request for revenue generating and non-monetary agreements.
To help expedite the payment process, we encourage the use of a requisition whenever the university will be paying an outside vendor. Not only does this ensure proper routing and approval; it reduces the opportunity to pay prompt pay interest if the invoice matches the requisition.
There is no situation where a contract request AND a requisition are both required. If a requisition is submitted and a contract is attached for review, check the “Route to Procurement Services” checkbox on the requisition. Procurement Services will forward the contract to Contract Administration for review.
