Oregon State University

402: Contract Types

Procurement and Contract Services Policy & Procedures Manual
Section 400: Contracts
Effective: 7/01/2010


OSU will strive to be consistent in the naming and use of certain agreement types defined in these policies in order to maintain consistency and continuity within the university.  The agreements will be written in a manner that clearly establishes the roles, responsibilities and obligations of the parties involved.  Any financial obligations should be clearly detailed including amounts and terms.  The following are some of the types of contracts and their intended use.


402-001: Interdepartmental Agreements

Interdepartmental agreements are intended to document agreements between OSU departments.  Interdepartmental agreements can be processed and signed by the departments.


402-002: Interagency Agreements (IAA)

Interagency Agreements are intended to formalize agreements or understandings between State of Oregon agencies.  Interagency agreements require review, approval and signature by the Contracts Office.


402-003: Intergovernmental Agreements (IGA)

Intergovernmental Agreements are intended to be used between OSU and other governmental agencies when an Interagency Agreement isn’t applicable.  Intergovernmental Agreements with agencies outside the State of Oregon may require review to insure compliance with ORS Chapter 190.  Intergovernmental Agreements require review, approval and signature by the Contracts Office.


402-004: Memorandums of Understanding (MOU)

A Memorandum of Understanding (a.k.a Memorandum of Agreement and Letter of Intent) is a document describing an intended common line of action and does not create a legally enforceable contract.  These are informal and understood as precursors to a formal legally binding contract.  Memorandums of Understanding require review, approval and signature by the Contracts Office.


402-005: Purchase Orders (PO)

Purchase Orders are contracts and are issued for the purchase of goods or services.  Purchase orders are legally binding contracts.


402-006: Personal Services Contracts

Personal Services Contracts (PSC) are used to contract for infrequent, technical or unique services performed by contractors with specialized, technical or scientific expertise of a professional nature.  Examples of professional services contractors include:

  • Accountants
  • Actuaries
  • Attorneys
  • Brokerage firms
  • Grant writers
  • Physicians
  • Public relations consultants
  • Recruiters

Personal Services Contracts must be issued when the dollar threshold will exceed $5000 cumulatively in one academic year for a department.  However, Personal Services Contracts may be used at any dollar level, and are highly recommended when detailed expectations or obligations are necessary.  The PSC must be used at any dollar level for Non Resident Aliens. 

Personal Services Contracts may not be issued to OSU Employees, OUS Employees, State of Oregon Employees or Federal Employees.

Contractors performing work on a PSC may not:

  • Supervise OSU personnel or other contractors; 
  • Be listed as an instructor of record for an OSU for credit course;
  • Be in contact with minors until contractor has passed a criminal background check as required in OAR 580-023;
  • Represent themselves as OSU or make promises on behalf of OSU;
  • Drive OSU vehicles; or
  • Transport students, unless specifically authorized to do so in the contract.  If authorized, contractor must meet OSU minimum driving standards in accordance with OAR 125-155.


402-007: Speakers and Entertainers

Under Devlopment.


402-008: Honoraria

Under Development.


402-009: Capital and Operating Leases

Equipment or real property leases can be very complex as there are various types of leases and OSU has strict rules it must follow in how leases are defined, structured, paid and reported.  The complexity of leases, even of minor, low dollar value equipment, is quite high.   For purposes of this Policy leases described herein apply to those leases in which OSU is the Lessee. 

There are two types of equipment leases, Operating Leases and Capital Leases.  OUS Policy .200 A. lists criteria that differentiates Capital Leases from Operating Leases:  http://www.ous.edu/cont-div/fpm/acco.05.281.php#.200

A Operating Lease (also called a Municipal or non-finance lease) is more like a fixed-term rental where the item has a residual value close to its market value at the end of the lease term.  OSU may enter into these types of leases at any dollar level.

A Capital Lease (also called a Finance lease) means that OSU will own the personal or real property which exceeds the $5,000 capitalization threshold at the inception of the date of the lease, with a minimal buy-out, at the end of the lease term.  OSU only has authority to enter into these types of leases up to $100,000.

Capital Leases exceeding $100,000 are particularly complicated and can take up to a year or longer to process.  Because of the associated complexities, necessary resources it takes to process and administrative costs involved, Capital Leases are highly discouraged.  Any Capital Lease exceeding $100,000 and meeting the following criteria shall be managed by the Oregon Department of Administrative Services and Oregon Department of Justice and must be reported to the Oregon University System: 

  • The agreement transfers ownership of property to OSU when the agreement ends.
  • The agreement contains a nominal or bargain purchase option.  A nominal or bargain purchase is a price less than fair market value at the time of purchase.
  • The term of the agreement is 75% or more of the economic useful life of the property.
  • The present value of the minimum payments under the agreement is at least 90% of the current fair market value of the property.  Minimum agreement payments include any penalty for terminating the agreement.

The OUS Fiscal Policy Manual states how all OSU lease accounting and fiscal management shall be managed:  http://www.ous.edu/cont-div/fpm/acco.05.281.php

The OUS Controller’s Division states how all leases shall be reported: http://www.ous.edu/cont-div/closing08_09/detailed_instructions.php#ci

Regardless of lease type, all equipment leases must follow the Property Management Policies and Procedures: 204: Lease Purchase, 205: Operating Lease and a copy of the final lease must be sent to Inventory Control to ensure the property is recorded on Banner records as required.


402-010:  Sponsorship Agreements

Sponsorship agreements are intended to document a vendor’s support of a specific event or activity.  In return the vendor typically received acknowledgement of the sponsorship and other benefits at the event.  The value of the sponsorship should be equivalent to or greater than the acknowledgement or other benefits received. 

Manual Contact Web Site 541-737-2067

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