1. The Procurement and Supply Manager’s Desk Reference Second Edition
Chapter 5
Contracts and the Legal Aspects of Procurement

2. Topics – Chapter 5 Contract Essentials Contract Requirements
Contract Types
Other Contract Types
Methods of Exchange
Other Contract Elements
Legal Authority and the Buyer’s Responsibilities
Reviewing Contracts for Legal Requirements
Aligning Contracts and Practices with Policy
Maintaining Procurement Documents and Records

3. Contract Essentials Contracts cover the purchase of goods and services
Chapter 5
Contracts cover the purchase of goods and services
Can be written or oral…equally enforceable
Some require validation in writing
Identification of responsible party
Signature
Clearly defined subject matter
Specific terms and conditions
Identification of the consideration

4. Basic Contract Requirements
Chapter 5
Offer and Acceptance Mutual agreement Legality Consideration Capacity …legally competent
One way to think of consideration is by referring to the Latin term quid pro quo. Translated literally, quid pro quo means “this for that” or “something for something.” While we generally consider this to mean something of equal value, it is also generally considered that value is subjective and must be determined by the parties to the exchange.

5. Basic Contract Types Purchase Orders
Chapter 5
Purchase Orders
Indefinite Delivery/Indefinite Quantity
Definite Quantity
Fixed-Price Contracts
Cost Reimbursable Contracts

6. Fixed-Price Types
Chapter 5
Firm Fixed Price Fixed Price with Incentive Fixed Price with Economic Price Adjustment Fixed Price with Price Redetermination Fixed Price, Level of Effort
Who is at risk?

7. Cost-Reimbursable Contracts
Chapter 5
Cost Plus Fixed Fee Cost Plus Incentive Fee Cost Plus Award Fee Cost Sharing Cost Only Time and Materials

8. Other Types
Chapter 5
Letter of Intent Consigned Goods Contract Master Purchase Agreement Master Services Agreement Non-disclosure Agreement Commercial Lease

9. Methods of Exchange
Chapter 5
Offer and acceptance Battle of the forms Mirror image rule Acceptance of oral agreement Revocation Change orders Disputes

10. Legal Authority Agency Authority Apparent authority Ratification
Chapter 5
Agency
Authority
Apparent authority
Limited authority
Ratification
Financial responsibility

11. Contract Review Legal requirements Intellectual property
Legal venue
Assignability
Insurance
Reviews and claims
Parol evidence
Reservation of rights
Liability limitations
Liquidated damages
Regulated materials
Force majeure

12. Aligning Contracts and Practices with Policy
Chapter 5
Conformance to law
Ethical principles
Conflict of interest
Bribery
Personal purchases
Proprietary information

13. Procurement Documents and Records
Chapter 5
POs and contracts Supplier qualification records and reviews Catalogs Inventory records Project files

14. Summary