The City University of New York (CUNY) including its constituent colleges is a New York state entity subject to restrictions on its contracting activities that are not applicable to a private university or company.  Some clauses typically found in commercial contracts cannot be accepted by CUNY.  CUNY also is required to include certain terms and conditions in all of its contracts with suppliers, vendors, and consultants.  The basis of these restrictions and required terms and conditions are laws and regulations of New York State and guidance from the New York State Attorney General (OAG), the New York State Comptroller (OSC), and the New York State Office of General Services (OGS).

The Office of the General Counsel (CUNY OGC) is CUNY’s system-wide resource for legal advice and representation; CUNY OGC reviews contracts for a variety of business transactions.  CUNY OGC has prepared this document as an educational tool, and it summarizes certain provisions that are often included in vendor agreements but to which CUNY cannot agree or for which limitations apply.  This document also sets forth certain provisions that must be included in contracts that CUNY signs.  This document is intended for the use and benefit of internal clients and the business community.

Your understanding of the unique challenges and the special rules that apply to CUNY as a public entity in New York State in the contract process is appreciated, and, we believe, will be well worth the effort.  While the following is not an exhaustive list of key provisions that CUNY may not agree to or must require, they are the most common.  CUNY OGC will provide the final determination on what contract provisions are acceptable to CUNY in a given situation.  The final determination and “approval as to form” provides the basis for delegated authority to sign contracts.  Unless a contract is approved as to form, no one at CUNY is authorized to sign it.

A. Common Contract Provisions that Present Concerns:

New York regulation 2 NYCRR 7.2(b), requires the current version of The Standard Clauses for New York State Contracts to be incorporated into any CUNY contract for goods or services.  These clauses are commonly called Appendix A, and this document refers to them as Appendix A.  In addition, the terms and conditions of CUNY’s Purchase Order (PO) are incorporated into all CUNY contracts unless CUNY has negotiated a specific contract with a supplier that excludes certain PO terms.

  1. Governing Law and Venue. CUNY cannot agree to governing law or venue of any state (or jurisdiction) other than New York.  See Appendix A, Sections 14 and 16.
  2. No Arbitration. CUNY cannot agree to arbitration to resolve disputes under a contract. See Appendix A, Section 16.
  3. Indemnification and/or hold harmless – Provisions that require CUNY to pay losses incurred by another party. The OAG has prohibited CUNY from agreeing to indemnify vendors or third-parties.  The only (and specific) indemnity that the OAG has authorized CUNY  to provide is:

    Subject to the availability of lawful appropriations and consistent with Section 8 of the State Court of Claims Act, the University shall hold the [supplier/vendor] harmless from and indemnify it for any final judgment of a court of competent jurisdiction to the extent attributable to the negligence of the University or of its officers or employees when acting with the course and scope of their employment.

  4. Requirements that CUNY release vendors from liability for claims and/or claims for direct damages. CUNY cannot agree to waive any warranties available at law (such as warranties of merchantability or fitness for a particular purpose) or as may be provided by contract.  Suppliers/vendors are responsible for their products and services as provided by law and as set forth in a solicitation, Request for Quotes, and/or its contract with CUNY.
  5. Requirements that CUNY pay certain costs, such as taxes, interest, penalty fees, acceleration costs, cancellation charges, litigation costs, or attorney’s fees.
    1. Interest and Late Payment Fees. CUNY cannot agree to vendor’s standard interest and late payment fees. NYS Finance Law sets forth the interest and late payment fees that the State permits CUNY to pay.  See Appendix A (Section 15)
    2. Penalty Fees/Cancellation Charges/Acceleration. OSC has directed that CUNY cannot make payments unless it has received goods and services (in exchange for those payments).  Therefore, CUNY cannot pay fees such as penalties, cancellation charges, and costs associated with acceleration for which CUNY is not receiving additional goods or services.
    3. Taxes. As a State entity, CUNY is exempt from the payment of certain taxes.  The NYS Department of Taxation and Finance has determined that CUNY is exempt from New York State sales and use taxes.  CUNY also is exempt from taxes in states that do not charge tax to government entities.  CUNY will not agree to reimburse a vendor for the payment of taxes.  CUNY will agree to pay taxes lawfully imposed upon it.
    4. Attorney’s Fees. CUNY cannot pay attorney’s fees in the absence of express statutory authority that permits these payments.
  6. Provisions Contrary to Law. The OAG has directed that CUNY cannot agree to give up rights granted by law or common law, including: statutes of limitations, trial by jury, limitation of remedies, requirements to post bond for injunctions, to sue, or to limit liability of contract parties.
  7. Provisions that Waive Potential Claims against the Contracting Party. The OAG prohibits CUNY from agreeing to waive its right to sue or to limit the remedies of CUNY against contracting parties.
  8. Disclaimer of Warranties. CUNY cannot agree to terms that disclaim all warranties of performance by the vendor. Vendors must represent and warrant that their products and services:  (a) meet or exceed published standards, including any particular standards set forth in the contract; and (b) will be provided in a timely, professional manner with the level of care, skill, practice, and judgment consistent with industry standards and practices for similar services.  All warranties provided by law also apply.
  9. Risk of Loss to CUNY prior to or during delivery. CUNY does not accept risk of loss prior to or during delivery of commodities; all deliveries of products must be FOB Destination.
  10. Automatic Renewals. CUNY cannot enter into agreements without appropriated funds available.  CUNY cannot promise that funds available today will be available at the beginning of any particular contract renewal period.  For this reason, CUNY can enter into agreements for up to five (5) years only if cost increases are clearly stated and if CUNY has the option to cancel at any time without further obligation.  See Appendix A (Section 1).
  11. Confidentiality of Contract Documents and Contract Prices.  All agreements that CUNY enters into are public contracts and subject to disclosure.  Therefore, CUNY cannot agree to any clause that requires agreements to which it is a party to be confidential; however, proprietary information in a contract may be kept confidential, subject to NYS Public Officers Law.
  12. Requirements that CUNY provide endorsement of a vendor or a product.  CUNY is prohibited by New York State Public Officers Law from providing endorsements.  Vendors may not use the CUNY name or logo or any College name or logo to imply endorsement by CUNY.
  13. Exclusivity.  CUNY cannot grant exclusivity to any vendor unless there has been a public solicitation for the contract.

B. Requirements for Specific Types of Contracts

  1. Contracts that include services to store or process personal non-public information.
    1. Indemnity. Vendors must indemnify CUNY for any third-party claims for breach of confidentiality of non-public information, including attorney fees and all costs that CUNY incurs for statutorily required notifications. See Appendix A, Section 22.
    2. FERPA language. FERPA language must be included in contracts involving student non-public information.  The following language must be included in these contracts:

      The Services will require [Contractor] to have access to certain personally identifiable information regarding the University’s students.  The University hereby appoints [Contractor] as its agent for the sole purpose of assuming duties in connection with the processing of student records that would otherwise be provided by the University.  As the agent of the University, [Contractor] is subject to and shall comply with the Family Educational Rights and Privacy Act (FERPA) (20 U.S.C. § 1232g; 34 CFR Part 99) and its prohibitions against disclosure of personally identifiable information regarding students to third parties, except where permitted by the regulations of the United States Department of Education.

    3. General Data Protection Regulation (GDPR) – Contracts that include services to store or process European Union Citizen non-public information.
      Vendors who provide services to store or process European Union Citizen non-public information are subject to the General Data Protection Regulation (GDPR) (EU 2016/679).  The following language must be included in these contracts:[Vendor] has been advised that data stored in the Product by [Licensee and its Authorized Users] in accordance with the permitted uses hereunder may include personal data subject to the requirements of the General Data Protection Regulation (GDPR) (EU 2016/679).  [Vendor] has also been advised that any data it collects from [Licensee or its Authorized Users] may include personal data subject to the requirements of the GDPR. [Vendor] certifies that whether it acts hereunder as a Controller or a Processor of such data, it has implemented appropriate technical and organizational measures in such a manner that processing will meet the requirements of the GDPR and ensure the rights of individuals whose personal data is subject to the GDPR.
    4. Contracts that include technology products or services for student use.
      Vendors who provide technology products or services for student use must provide a Voluntary Product Accessibility Template (VPAT) that clearly indicates the product is WCAG 2.0 AA compliant, and compliance must be independently be verified by CUNY or a third-party hired by CUNY.  The following language must be included in these contracts:

CUNY hereby reaffirms its commitment to ensure that people with disabilities have an opportunity equal to that of their nondisabled peers to participate in the CUNY System’s programs, benefits, and services, including those delivered through electronic and information technology, except where doing so would impose an undue burden or create a fundamental alteration.As a result, the accessibility of online content and functionality will be measured according to the W3C’s Web Content Accessibility Guidelines (WCAG) 2.0 Level AA, which shall incorporated by reference.Adherence to these accessible technology standards is one way to ensure compliance with the CUNY System’s underlying legal obligations to ensure:  that people with disabilities are able to acquire the same information, engage in the same interactions, and enjoy the same benefits and services within the timeframe as their nondisabled peers, with substantially equivalent ease of use; that they are not excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in any CUNY System programs, services, and activities delivered online, as required by Section 504 and Title II of the ADA and their implementing regulations; and that they receive effective communication of the CUNY System’s programs, services, and activities delivered online.

  • Contracts for Software.
    1. Contracts are subject to the Policies of CUNY’s Computer and Information Systems Department.
    2. Software license terms. CUNY includes, in its public solicitations and requests for quotes, the software license terms it must receive for the price offered. Any license terms or conditions returned with a bid submission or quote, or any time thereafter, shall not modify or supersede the CUNY included terms.
    3. Off-shoring is prohibited in contracts for services that store or host data. Vendors must perform all services, and all CUNY data must be stored within the Continental United States.  The following language must be included in these contracts:
      All Data shall remain in the Continental United States (“CONUS”).  Any Data stored, or acted upon, must be located solely in Data Centers in CONUS.  Services that directly or indirectly access Data only may be performed from locations within CONUS.  All Data in transit must be handled in accordance with FIPS-140-2 or TLS1 or TLS2 (or successor). Support Services. All helpdesk, online and support services which access any Data must be performed within CONUS.  At no time will any Follow the Sun support be allowed to access Data directly, or indirectly, from outside CONUS.
      Infrastructure Support Services. Infrastructure support services that do not directly or indirectly access Data may be provided in a Follow the Sun format, if expressly outlined within the Authorized User Agreement.
    4. Contracts for Intellectual Property
      The following indemnity language must be included in these contracts:

[Vendor] shall indemnify and hold harmless the University from and against any and all damages, expenses ( including reasonable attorneys’ fees), claims, judgements, liabilities, and costs that may be incurred or assessed against the University in any action of infringement of a patent, or of any copyright, trademark, trade secret or other third party proprietary right in connection with the Service.If use of the [Programs] shall be enjoined for any reason or if [Vendor] believes that it may be enjoined, [Vendor] shall have the right, at its own expense to take action to 1) procure for the University the right to continue use of the [Programs], 2) modify the [Programs] so that use becomes non-infringing, and is of at least equal quality and performance; 3) replace the [Programs] with non-infringing [Programs] of at least equal quality and performance; or 4) refund to the University any amounts paid for the period in which use of the [Programs] was not feasible.