Master Agreements FAQ
What is a master agreement?
Master agreements are contracts negotiated by the Office of the Treasurer (primarily by Blake Reagan) that have the following characteristics:
- No-cost contracts that contain the legal terms and conditions that will govern the transaction (good or service) between the vendor and the University;
- The master agreements themselves do not obligate the University to make purchases;
- Master agreements always allow any University department from any campus/institute/unit to order from the agreement;
- Almost always, these orders are processed by requisitioning a purchase order through the appropriate Purchasing Office (this is the University’s preference) and the purchase orders incorporate the terms and conditions of the respective master agreement.
- Note: Sometimes, vendors, such as GE Healthcare and IBM, refuse to enter into a pure master agreement because the vendor wants a short order form processed. These order forms are processed through the normal contract review process. The order forms incorporate the respective master agreement.
- Note 2: The term “master agreement” is not a proper noun and some companies or other entities may use the term differently than the University.
The University lists basic information about master agreements online (links provided below).
In short, master agreements make the contract process more efficient. For most of the master agreements, purchases can be made via purchase order, which saves time. Because the contract has already been done, you do not need to go through the contract review process if the master agreement is still in effect and if the vendor has agreed to accept only a purchase order.
Do master agreements affect signature authority?
No. Only authorized officials may sign contracts. A list of authorized officials is here: http://treasurer.tennessee.edu/contracts/contractsignature.html
Are master agreements exclusive?
No. Just because the University has a “master agreement” with a vendor, departments are not required to use those vendors. Master agreements never create exclusive relationships.
How do master agreements help?
Master agreements help improve the contract process dramatically because the need to negotiate the legal terms and conditions is usually eliminated entirely. In cases where the vendor wants an order form processed, the order form incorporates the respective master agreement, so the amount of review and negotiation by the appropriate campus contract office is reduced.
When are master agreements a good idea?
Master agreements work best with vendors with whom the University contracts regularly.
How many master agreements does the University have and where can I find a list of master agreements?
The University has around 90-100 master agreements and the University System Contract Office continuously works on more master agreements. Currently, the University System Contract Office is focused on master agreements with library vendors (we have over 60 such master agreements currently). Soon, the University System Contract Office will focus on software vendors. However, please send me the name(s) of any vendors that you would like me to approach about entering into master agreements.
Library vendors: http://treasurer.tennessee.edu/contracts/masteragreements/libmasteragree.html
General master agreements: http://treasurer.tennessee.edu/contracts/masteragreements/default.htm
Software vendors: http://treasurer.tennessee.edu/contracts/masteragreements/softwaremasteragreements.htm
Is there a reason that the University does not have a master agreement with a particular vendor?
The answer would be one of two reasons: 1) the University has not approached the vendor about this idea, or 2) the vendor refused to enter into a master agreement with the University.
Do master agreements change the need to process a bid or non-competitive justification (sole source approval)?
No. Master agreements do not change any University fiscal policies. Departments must still comply with all relevant Fiscal Policies regarding purchasing. If a proposed agreement will be $10,000 or more, the transaction (including all associated costs) is subject to the competitive bid process (or, when appropriate, non-competitive justification).
- Note: master agreements should not be confused with framework purchase orders that have been bid through a Purchasing Office.
If the cost for a good or service under a master agreement is less than $10,000.00, why do I need a purchase order?
All of these vendors previously required a contract, even if the cost for a good or service was less than $10,000. All contracts, regardless of dollar value, must be sent through the appropriate review process and can only be signed by an authorized official. So, instead of a contract, most master agreement require the vendor to accept a purchase order.