Sourcing products and services from external vendors is a fundamental technique for efficiently pursuing Harvard’s teaching and research mission. Responsible creation and management of vendor relationships, especially the critical risks accompanying the involvement of non-Harvard controlled parties in University activities, is important to ensure successful and uninterrupted business operations.
Beyond the obvious advantages of using qualified external providers over creating highly specialized internal teams, procurement risks, such as over-dependence on a single supplier, inconsistent or substandard quality, supplier bankruptcy, fulfillment interruptions, unanticipated price volatility, etc., can easily outweigh these benefits and divert vital financial and administrative resources. Additionally, the risk of theft, loss or damage to Harvard’s property (including intellectual property and confidential data), or injury to its students, faculty, staff and visitors from vendor negligence can impose a costly legal liability onto the University. Ensuring appropriate and effective risk mitigation measures are part of the sourcing process is the responsibility of every associate engaged in the solicitation, evaluation, and retention of an external vendor. Exercising due care in selecting vendors and independent contractors and negotiating suitable product and performance warranties/guarantees into every vendor agreement are the basic building blocks of a comprehensive supply chain risk management program.
Departments are strongly encouraged to utilize the expert central administration resources positioned to advise on proper procurement practices and/or to assume sourcing duties on their behalf, especially for those departments with limited resources or sourcing expertise. The Office of Strategic Procurement's website and Procure-to-Pay Guide contains details on how to maximize procurement dollars, especially by utilizing one of the preferred/partner vendors from a comprehensive listing. Additionally, the Office of General Counsel's website contains helpful advice on ways to identify and avoid compliance risks as well as model contracts/agreements for use in sourcing external consultants. Naturally, all of their web-based resources are complimented by expert staff able to customize agreements to meet individual needs and circumstances.
For those University departments with the desire and expertise to self-manage their sourcing activities, the pages and tools on this site are here as guidance on effective mitigation techniques in the areas of risk transfer and risk financing. Buyers should incorporate the recommended practices into whatever base agreement form presented by the provider if not able to utilize the model agreement templates available on the OGC website.
- Basic Guidelines for Contracts and Contract Risk Management
- Insurance Standards for Core Goods and Services Agreements (Harvard as buyer)
- Insurance Standards for Professional Services Agreements (Harvard as buyer)
- Insurance Standards for Real Estate Lease Agreements (Harvard as Lessor)
- Insurance Standards for Professional Services Agreements (Harvard as supplier)
As part of the negotiation process related to insurance requirements, buyers should also check the Insurance Standards for Special Situations section to verify that there are not additional considerations or special requirements applicable to the particular type of service being performed and/or the provider under consideration. [NOTE: the above insurance standards are not applicable to construction agreements on capital projects. Contractors providing construction services and firms providing building design or engineering services for capital projects (as defined by Harvard CAPS) should instead comply with the minimum insurance types and amounts specified in Harvard's Standard Construction and Design contracts which are available on the Capital Projects (CAPS) website.]