Evaluation and risk assessment
Contracts generally involve a risk and it is important that the risk is identified and managed as part of good governance.
You should undertake an analysis of risks and benefits prior to negotiations and the contract being concluded. Continuous evaluation over the life of the project will also help to ensure that risk during performance is mitigated.
As part of your contract documentation you must complete the Risk Assessment form provided, addressing Risk Identification and Risk Rating and submit it with your request for a contract.
Any Risk Rating that you consider to be above a minor risk (ie of potential loss greater than $50,000 will need to be referred through to the Legal Office).
Below are a number of questions that will help you to formulate a risk position with respect to your project.
If you require assistance with respect to any of the following or are unsure how they may apply to your proposal please call the Legal Office on 2066.
What commitments based on time, money and resources, is USQ being asked to make?
If the value of the project significantly outweighs the commitment of time, money or resources then this poses a risk to USQ and you will need to evaluate it in accordance with the scale provided.
Have you carried out a due diligence check on the other contracting party?
This involves checking the bona fides of the other side, for example, are they financially viable? Finance can help you to run a credit check if you require. If the company is not financially viable then you run the risk that USQ will not receive payment and this needs to be risk evaluated bearing in mind the value of the project.
Does your proposed transaction include an international entity?
Contracting with an international entity always requires a thorough investigation of the reputation and status of that entity and can pose a moderate financial or reputational risk for USQ. Finance or the Legal Office can assist you with the investigation process.
Have you ascertained the legal status of the other contracting party?
The other contracting party must be a legal entity and you must always obtain the ABN. Remember a Business Name registration is not a legal entity. Go to the ASIC website to determine the status of your contracting party. Contracting with a business name or a non-existant entity can be a major risk to the University depending on the value of the project.
Does the agreement require USQ to give an indemnity or guarantee?
Indemnities and guarantees need to be reviewed by the Legal Office. If the contract requires USQ to give an indemnity other than in circumstances of our negligence or breach of contract then this can constitute a significant risk to USQ, depending on the nature of the project. For example, if you are undertaking an environmental study you may be asked to indemnify the other side against all environmental risks arising out of the use of the results. This could have a major financial impact especially as you will have no control over how the results are used.
Is there a risk of physical injury to any person?
This can be a major risk and must be assessed by the Legal Office and Finance bearing in mind USQ's insurance.
- Are there any reputational risks for USQ?
Loss of USQ's reputation could be a major risk factor and no transaction should be considered where any loss of reputation is concerned.
- Is there a risk of the proposal breaching legislation?
You should make every attempt to identify relevant legislation and regulations that pertain to your proposal. Breach of legislation or regulation can be a major risk depending on the circumstances. This must be identified at an early stage in your negotiations.
You can access a full explanation of the Risk Management process at USQ.
If your proposal involves you or other University personnel working at a site away from a USQ campus (including any overseas location) you will also need to fill out a Risk Management Plan and forward it to USQ Safe.
Your Risk Assessment consists of an identification by you of the consequence of the risks associated with the project and likelihood of an occurrence.
If you need help in making an evaluation of the risks relating to your proposal please call the Legal Office. Once you have conducted your risk assessment go to Unit Costing Approval.