Contract Frequently Asked Questions
FAQ on Stanford University Contracts Process
Compiled for current and potential King Center funding recipients
We understand that this is a complicated process, and have compiled this overview to answer frequently asked questions. If you have further questions about the contract process after reviewing this information and watching our video, please feel free to reach out to the King Center.
1. Q: What is a contract?
A: When two or more parties enter an agreement, they create a contract to document the business relationship and confirm the commitments each party is making to the other. The contract helps avoid misunderstandings and may include various components such as pricing, deliverables, and duration of business relationship, as well as legal components such as indemnification for harm or loss, data security, and intellectual property ownership.
2. Q: Who needs a contract?
A: When an individual, business unit, school, or department would like to hire a non-Stanford, outside company or individual to perform a service for Stanford using Stanford funds, a signed contract is generally required. Per Stanford policy, contracts are required for all work conducted with individuals performing work in a foreign country as an independent contractor, regardless of the amount.
3. Q: Why do I need to go through this process? Can’t I just get my research funds as a stipend and pay my vendor cash?
A: Graduate Student Research Funding provided by the King Center must follow all applicable Stanford policies, including the IRB approval process, use of Stanford travel booking channels when required, etc. While a stipend can be used to cover individual travel and living expenses, research activity involving a non-Stanford entity requires a formal agreement (contract). Contracts not only safeguard students from the risks of handling and distributing cash, they align with Stanford policy ensuring transparent, accountable, and compliant financial transactions.
4. Q: I received my award before April 2023 and there was no mention of contracts at that time. It looks like the policy for disbursement has changed. Do I have to set up a contract or am I exempt since I received funding earlier?
A: No one is exempt if they would like to hire a non-Stanford, outside company or individual to perform a service for Stanford; a contract is generally required. Per Stanford policy, contracts are required for all work conducted with international vendors, regardless of the amount.The requirement to go through contracts is not coming from a change in King Center policies, but we are now assisting students in complying with university policy.
5. Q: When should I start the contract process?
A: You should start the process as soon as you have your award letter and before you start the project because setting up a contract and paying the supplier might take two to six months. You can always consult with the King Center prior to submitting your application so that you are prepared to get started as soon as possible.
6. Q: The contract process seems to take a long time, can I work on the project in the meantime?
A: No. Starting work before the contract is approved creates liability.
7. Q: What information is required to start the contract process?
A: You will need the following information to begin the process by submitting the King Center’s Purchase Order and Contract request form. Please make sure to complete the request form as soon as possible to start the contract process.
- Your (requestor’s) contact information
- Supplier’s contact information
- Project information (location, start and end dates)
- An independent contractor check-list for hiring a research assistant or individual supplier
- Details about high risk data
- Details about involving human subjects
- Contract amount estimate (the amount you agree to pay from your Graduate Student Research Funding directly to the non-Stanford organization or an individual. Your total project cost might be higher if you have other funding sources.)
- Faculty mentor’s approval (this is required)
- Statement/Scope of work (SOW)
- Estimate or quote from service provider
- Sole Source Justification (SSJ) may be required in some cases - we will reach out if needed
- King Center Funding Award Letter
If you have questions about any of these requirements, please reach out to the King Center finance team.
8. Q: What are the contract process steps?
A: The contract process has several stages, so you should prepare for several weeks to a few months to fully go through the process.
- Pre-Step 1: Ask the King Center finance team if the collaborator you would like to use is an already established supplier in the Stanford system. If you have not yet identified a vendor for work you anticipate doing, you can also ask the King Center finance team for a list of suppliers in your country of interest who are already established suppliers in the Stanford system.
- Step 1: New projects: Set up a consultation with Global Business Services.
Existing projects: Proceed to Step 2.
- Step 2: Submit the KC Purchase Order and Contract request form to the best of your ability.
- Step 3: Set up a meeting with the King Center finance team by emailing the King Center finance team (firstname.lastname@example.org) to discuss timing, identify any missing information, and answer clarifying questions.
- Step 3a: Work with the King Center finance team to set up a new supplier or confirm the information about the existing supplier in the Stanford database. NOTE: This step might take 2-3 weeks.
- Step 3b: The King Center submits the contract for a review by the university Procurement Services Contracts team. NOTE: This step usually takes 3-4 weeks. It can take substantially more time if there are specific requirements in the contract or the supplier is not responsive or slow to respond.
- Step 4: Once the contract is approved, the Contracts team sends the contract to the supplier for a signature. The purchase order (PO) number is noted on the agreement on the top right corner of the front page as well as included in invoice provisions. This PO number must appear on all invoices in order for payment to be made.
- Step 5: After the contracted work has been completed, the vendor will submit their invoice to you. If you approve the amount and the deliverables, you will submit the invoice using the King Center Reimbursement and Financial Information form. Once the King Center receives the invoice, we will upload it to accounts payable for payment and the payment will be processed within 30 days after the invoice is submitted.
9. Q: How do I know if my supplier is already set up in the Stanford system?
A: The contract intake form will ask whether your supplier is in the Stanford system, which means they will have had other contracts with Stanford in the past. You may not know for sure whether your supplier is in the system–please put in the information you have available, and King Center staff will confirm for you. If the supplier is in the Stanford system, we will verify that all the information is accurate. If the supplier is not in the system, we must set them up, which can take some time. You can also request the King Center finance team to research for appropriate suppliers within the Stanford Financial Database.
10. Q: Why does the contract process take so long?
A: Setting up a contract is a multi-step process involving various Stanford departments. Certain contracts may require review by other departments (e.g., the Office of General Counsel, Global Business Services or Office of Technology Licensing) or pose unique circumstances/risks, which may affect processing time. Contracts with consultants or hosting services will require a review of data risk by the Information Security Office (ISO) and University Privacy Office (UPO). Additional contract terms may need to be incorporated into contracts when the supplier performs a service function or activity that may involve the use, access, transfer, or storage of moderate or high-risk data. Fiscal year end (August-September) generally sees a significant increase in the volume of contract requests and can also impact processing time.
11. Q: Is there anything I can do to speed-up the contract process?
A: Start early and be prepared. Be available to reply promptly to all requests for information from the King Center finance team. Most importantly, work with your supplier, especially international entities, as they might have difficulty accessing Stanford systems or have questions regarding the documentation required by Stanford.
12. Q: How do I identify a supplier for my project?
A: If you do not already have an established collaborator, you may want to consider one of these options:
- Leverage your faculty advisor or PI’s existing relationships/contracts, or those of others at Stanford working in similar areas. It may be possible to add your project through a contract amendment if their connection is already a supplier in the Stanford system.
- Consult with the King Center finance team or Global Business Services to identify an established local collaborator that is already in the Stanford system.
13. Q: Can I amend my contract?
A: Yes, you can amend your contract after your contract is executed in the first place. However, this does take time. Please reach out to the King Center finance team and discuss any changes as soon as possible.
14. Q: What can be amended on a contract?
A: The information that can be amended on a contract includes deliverables date, payment source, and contract amount. If the scope of work is changing significantly, a new contract may be required.
15. Q: What if I don’t know the exact amount for the contract? Is it better to have a contract for too much or too little?
A: Having a rough estimate of taxes, surcharges, payment for services, etc. is best. It is time-consuming to amend a contract to add additional funds, so it is better to have the contract for the higher estimate. NOTE: If you are planning to take some of your Graduate Student Research Funding award as a stipend you may consider not requesting the stipend right away to leave funds available for a contingency.
16. Q: How can I determine what amount is appropriate for the contract?
A: Please consider taxes, surcharges, and additional days that may be required that may add to the overall cost of the project. We suggest you consider adding a contingency amount to the budget.
17. Q: What happens to unused contract funds?
A: If both parties agree the project is completed satisfactorily and there is money left on the contract, the finance team at the King Center will close out the contract. The remaining balance will then be available to you to be used towards other expenses in your proposal (e.g., your travel costs, purchase of data, etc.), or if those expenses are covered, you can let the King Center know to close out your award and release the funds to be used for future Graduate Student Research Funding Awards.
18. Q: What if I have other funding for this project in addition to my KC Graduate Student Research Funding?
A: If you have other Stanford funding, we can add this to your contract; however,you will need to provide the funding information and account number(s) (aka PTAs) for all funding sources for your project. Any outside funds that do not have a Stanford-assigned PTA cannot be used in a Stanford contract. You need to work with any outside funding organizations on how to apply their funds to the project. If you have questions about using multiple funding sources, please contact the King Center finance team.
19. Q: What if I have not fully finished my project and I am graduating?
A: Please note that you only have access to King Center funding in the quarters in which you are enrolled; if you graduate, your funding ends at degree conferral.
20. Q: I want to hire an individual (e.g., local RA, translator, etc.); what are my options?
A: There are two options.
Option 1: You may hire non-Stanford affiliates, such as research assistants in your field location, using the Upwork platform (for more info email Upwork). The King Center has a business account with Upwork and can set up your project through this platform. Using Upwork may save you time; however, there are markup fees charged by Upwork that might affect your overall budget. For more information on Upwork, please reach out to the King Center finance team.
Option 2: You may set up a direct contract through Stanford. For more information, please reach out to the King Center finance team.
21. Q: What is the Independent Contractor Checklist (ICC)?
A: This checklist provides guiding questions to help determine if you will need to pay a consultant as an independent contractor or an employee. Please see the ICC form.
22. Q: What is the Statement of Work (SOW) form?
A: The Statement of Work (SOW) form is often also referred to as the Scope of Work. It is intended to be a general description of work being performed for a specific project or contract. Please see this sample of a SOW for a research project.
23. Q: What is the Sole Source Justification (SSJ) form?
A: When you do not obtain multiple, competitive bids, the Sole Source Justification (SSJ) form is used to document your supplier selection process and reason for hiring a particular supplier. The SJJ is required for contract amounts of $25,000 and higher. Please contact the King Center finance team if you need help with filing a SSJ.
24. Q: My supplier is going through the process of being set up in the Stanford system and told me they do not have an adequate Certificate of insurance (COI). What should I do?
A: Contact the King Center finance team. Stanford collects Certificates of Insurance (COI) to ensure that suppliers meet the minimum insurance coverage required of all suppliers doing business with Stanford. In some cases, this requirement might be subject to an exception. However, only the Risk Management Office can approve an exception to the COI amount.
25. Q: Who should I contact if I have more questions?
Last updated November 17, 2023