There are several aspects of contracts that are important for you to know when purchasing goods and service.
State employees must create a commitment document (called a commitment voucher) before they can create a liability for the state of Colorado. Commitment vouchers come in two forms: purchase orders and contracts. Failure to have one of these documents properly executed before a commitment is made is a violation of state law and could subject the violator to penalties.
A purchase order is an offer by the state of Colorado to do business on the terms contained in the document and needs no attorney or controller review if the amounts is within the limits prescribed by regulations (up to $25,000). No other documents should be executed. If a vendor wants to add terms or change terms on the purchase order you must use a state approved contract.
A contract (whether it is called a contract, an agreement or a memorandum or letter of understanding) must be reviewed by a designee of the attorney general (currently Daniel R. Satriana, Jr., Deputy General Counsel) and approved by a designee of the state controller (currently Michelle Quinn, University Controller.) Without the signatures of these two on behalf of the state, the contact is not valid. If a provider of goods or services requests a signature on a document that commits state funds or could create a liability for the state then a state approved contract must be created, no matter how much money is involved. Each state-approved contract must include the Colorado Special Provisions. The Special Provisions insure that the contract complies with Colorado law and regulations. Only the State Controller (not his designees) can waive a part of the Special Provisions.
There are a several contract issues that are absolutely forbidden in state approved contracts. The state of Colorado will not voluntarily bring itself under the jurisdiction or the laws of another state. The state will not indemnify a contractor. There is a specific statute, which applies to claims against the state, which is in lieu of an indemnification provision. Finally, expenditure contacts can only be made for one year. A state entity can not bind the legislature to appropriate funds in the future. These items are covered in the special Conditions.
Except for purchase orders and interagency agreements, an attorney review is required for all other documents requiring a signature which commit funds or create liabilities. The purpose of the review is not only to insure that the document meets state laws and regulations, but to take a broader view of the "deal." Does it make sense; what does the state get for its money or potential liability; are the requirements of both parties specific enough and enforceable; are the payment provisions defined?
Finally, nothing happens until the State Controller designee approves
and signs. Any agreement, which requires or even allows something
to happen before the controller's signature is void and illegal.