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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

February 21, 2012
June 10, 2014
Purchasing

 

Part 7. Purchasing - Table of Contents


7.7.12. PURCHASE OF LICENSED SOFTWARE

A. Introduction

These procedures apply to the acquisition of software that is installed on local computers or servers where the software provider requires that a Software License Agreement (SLA) be accepted by The University of Texas at Austin. The assistant vice president and director of procurement and payment services has delegated authority to enter into software licenses on behalf of the university.

B. Procedure

For these situations, departments must follow the appropriate procedures listed below.

  • For Purchases of $5,000 or Less
    Schools and departments can issue a purchase order for the purchase of the software, but must have the SLA reviewed and approved by the assistant vice president and director of procurement and payment services. A Software License Intake Form must be completed and forwarded to the Purchasing Office. Payment must be completed with a *DEFINE VP1 document.
  • For Procard Purchases of $1,000 or Less
    Schools and departments can pay for software on a ProCard for amounts up to $1,000. Low dollar software is generally less risky and often requires acknowledgement of the license via a clickthrough agreement. These agreements should be reviewed by the software purchasers to make sure that they understand the terms of compliance.
  • For Purchases Greater than $5,000
    Schools’ and departments’ purchasing requisitions are routed to the Purchasing Office for approval. All supporting documents, such as quotations or sole source justifications, must be forwarded to the department’s buyer team in the Purchasing Office. In addition, a Software License Intake Form must be completed and forwarded to Purchasing. Payment must be completed with a *DEFINE VP1 document.
  • No-Charge Software
    A Software License Intake Form must be completed and forwarded to the Purchasing Office. If the software provider requires an SLA, it must be reviewed and approved by the assistant vice president and director of procurement and payment services.

C. Software License Intake Form

The form provides the Purchasing Office with the necessary information regarding the planned use of the software in order to determine if additional review and approval is required by other university offices such as:

  • Information Security Office (security)
  • Office of Community Engagement and Diversity (accessibility)
  • Legal Affairs (privacy)

D. Software License Agreement (SLA) Processing

  1. Departments review the license and confirm that they are able to comply with the business terms of the SLA (e.g., user restrictions, vendor access, intellectual property, and renewal procedures). Any anticipated issues should be noted on the Software License Intake Form. Forward the completed Software License Intake Form and SLA to the Purchasing Office.
  2. The SLA is reviewed in accordance with a checklist of requirements provided by the UT System Office of General Council. Based on the review, a determination is made regarding terms and conditions that must be negotiated with the software provider.
  3. The Purchasing Office determines if there are additional reviews/approvals required and makes arrangements to initiate those processes if necessary.
  4. When all requirements have been met and the SLA terms and conditions are finalized with the software provider, the SLA is reviewed and signed by the assistant vice president and director of procurement and payment services.
  5. The SLA must be fully executed by both the University and the software manufacturer prior to issuing a purchase order.

E. Payments for Renewal and Maintenance Fees

Subsequent invoices for periodic renewals, maintenance fees, and other charges associated with the license are to be paid on a *DEFINE VP2 document using the original SLA as supporting documentation. No additional purchase order is required. If the Licensor requires a signed document for the renewal/maintenance, the document must be reviewed and signed by the assistant vice president and director of procurement and payment services. If there is no approved SLA associated with the charges, the department issues a purchase order and makes payment on a *DEFINE VP1 document.

F. Hosted Software Applications and Cloud-based Applications

Software applications hosted by the provider or a third party require a business contract and are processed by the Business Contracts Office.

G. Donated Software

Software that is being donated to the university must be reviewed by the Development Office to determine how the donation is to be valued and recognized. Donated software does require a Software License Intake Form to be completed to determine if additional reviews and approvals are required. If the software provider requires an SLA, it must be reviewed and approved by the assistant vice president and director of procurement and payment services.