University Secretariat and Legal Counsel

University Secretariat and Legal Counsel

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Revenue Generating Service Contracts Procedures

Contact Officer:  Controller, Financial Services


Purpose

The purpose of this document is to outline procedures for Revenue Generating Service Contracts. 

Procedure - Organizational Unit

Step 1:  Identification of a Revenue Generating Service Contract.

Revenue Generating Service Contracts are separate from Research Contracts. 

The table below provides a non-exhaustive list to assist in determining if a Contract is a Research Contract and must be routed through Vice-Principal Research Portfolio (Industry Partnerships - Research Contracts Unit) using the Research Contracts Procedure.

Research Contract Non-Research Contract
Collaborative approach to defining scope and objectives Scope of work defined by project owner
Rights and processes for Queen's to publish outcomes of work No expectations that outcomes would be publishable
Primary goal is to generate research outcome(s) as per the agreement Primary goal is to solve "project owner" identified problem or generate data of limited application
Agreement has strategies to manage / commercialize Intellectual Property No expectation that Contract will generate patents
Engagement of students to undertake the work The work must not detract from nor form the basis of the student's  academic program (if applicable)

Where there is uncertainty about whether a contract is a Revenue Generating Service Contract or a Research Contract, Industry Partnerships – Research Contracts Unit may be consulted to assist with a determination.

Step 2:  Prepare the Revenue Generating Service Contract Transmittal Form

All Revenue Generating Service Contracts must be reviewed and approved in accordance with the Revenue Generating Service Contract Transmittal Form.  Detailed information for certain sections of the form follow.

Transmittal Form - Section 3

Pricing

Business units must ensure that Revenue Generating Service Contracts are priced appropriately and the final price should reflect the greater of cost or market to ensure Queen's University is competing fairly for services it provides in the open market. Revenue Generating Service Contract pricing elements are described below and illustrated in the Revenue Generating Service Contract Pricing Template example. 

Direct costs

Direct costs include both Salary and Non Salary related costs and are university expenditures incurred in the conduct of Revenue Generating Service Contracts that can accurately be identified and itemized. For example, Salary Costs include both the salary and benefits of Students, Assistants, and Technical Support Staff.  Non-Salary costs could include equipment and supplies costs, travel, and the cost of technical consultants.

Indirect Costs

Indirect costs (also commonly referred to as Overheads) include expenditures that may not be directly attributable to one specific Contract.  Indirect costs provide general support for the university such as libraries and computer networks and may or may not be measurable.  Examples are occupancy costs (such as heat, light, energy, and waste management), financial administrative support, insurance, and human resource management.   The recovery of indirect costs must be considered when determining the price of a Revenue Generating Service Contract. For consistency purposes, the Indirect Cost of Research Policy can be referenced for guidance.

After the total price is calculated, a determination will need to be made to decide if the calculated price is lower than market price for the same service. If market price is higher, the market price should represent the final Contract price. This is an important step as it ensures that Queen's University is competing fairly in providing its services in the open market.

The Revenue Generating Service Contract Pricing Template is available to help assist contact originators to estimate the value of and ensuring Revenue Generating Service Contracts are priced appropriately.  The most important consideration is that direct and indirect costs (if/where) applicable to a Contract are considered in the price of the Contract.  

The pricing template used to develop the price of the Contract must accompany the Transmittal form for the Signing Authority's information.  

Business units must consider whether HST needs to be included in the overall price of the Contract.  For further guidance on HST applicability, please visit the Financial Services website at: http://www.queensu.ca/financialservices/procedures.html

Transmittal Form - Section 4

Alignment with the Mission of the Unit and the university

The alignment of revenue generating activities with the business unit and university mission must be clearly documented.  This alignment is important for the status of the university as a charitable, non-profit organization, as well as for insurance reasons. 

Section 4 of Transmittal Form requires the originator to document this information in addition to a clear description of how the Contract is expected to impact the business unit from a capacity and capability perspective.

Transmittal Form - Section 5

Risk Assessment

All Contracts have an inherent level of risk and reward associated with them. Section 5 of the Transmittal Form addresses specific risk areas including International Contracts, Contracts with Non-Standard Terms and Conditions and/or Environmental Health and Safety (EHS).

If the Contract originator requires additional guidance in determining whether or not a Contract poses any Environment Health and Safety Risk, the following link(s) provide additional information to assist with the assessment in the area of:

As identified on the transmittal form, should the Contract:

  • site foreign EHS regulation;
  • include a clause relative to Workers Compensation;
  • include the use of Queen's equipment by the third party; or
  • pose any other EHS issues,

The Contract must be forwarded to Environmental Health and Safety department for review and approval.  If you have a question about a potential EHS issue associated with a Revenue Generating Service Contract, please call the EHS department for assistance at 613-533-2999 or safety@queensu.ca 

Standard Terms and Conditions

Revenue Generating Service Contracts must follow the Service Agreement - Standard Terms and Conditions as developed by University Counsel. These terms and conditions help protect the University from risk and improve the efficiency of contract administration.  

Should a Revenue Generating Service Contract not follow Standard Terms and Conditions, or should the Contract introduce new unapproved conditions, University Counsel review and approval is required.

In summary, the Revenue Generating Service Contract originator is responsible to ensure Revenue Generating Service Contracts are reviewed and approved in accordance with the Revenue Generating Service Contract Transmittal Form. 

 
 
Review and Approval

Required

Condition
University Counsel Dispute resolution jurisdiction outside of Ontario  (See Risk Assessment Section 5 of Transmittal form)
Non-standard Terms and Conditions are used and they have not been previously reviewed by University Counsel ( See Risk Assessment Section 5 of Transmittal form)
Environmental Health and Safety Contract poses potential EHS risk (see Risk Assessment under Section 5 of Transmittal form)

 

Step 3:  Execute Revenue Generating Service Contract

The Revenue Generating Service Contract must be executed in accordance with the Policy on Approval and Execution of Contracts and Invoices.


Date Approved:  May 8, 2015

Approval Authority: Vice-Principals' Operational Committee 

Date of Commencement: May 2015

Amendment Dates:

Date for Next Review:

Related Policies, Procedures and Guidelines: