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Cmwg contract breaches presentation

Cmwg contract breaches presentation






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  • Examples: reduced appropriation, suspected or known malfeasance by contractor, contractor indicates inability to perform
  • Acceptance of unsatisfactory deliverables by default can’t be fixed

Cmwg contract breaches presentation Cmwg contract breaches presentation Presentation Transcript

  • Contract BreachesAssessment of Violations and Enforcement
  • General Provisions • Government immunity • Not liable for tortious actions, except those outside the scope of employment or wanton and willful actions • Available funds • Can only pay on the contract to the extent we have appropriated funds
  • General Provisions • Billing procedures • Important to set a standard for billing/ invoices, and review for appropriate payment • Intellectual Property • We own what we pay for, can/should get it all back at the end of the contract
  • General Provisions • Confidential information • Contracts are public documents, documentation received from vendor likely public • CORA exemption for confidential commercial, financial, or trade secret information
  • General Provisions • Conflict of interest • Vendor can’t engage in conflicting business • Must disclose
  • General Provisions • Records maintenance, performance monitoring and audits • Vendor must keep all records and allow us to inspect for up to (6) years following termination • Can get all documents back at contact end
  • General Provision • Inspection and Acceptance of Services • Can inspect at any time • May require contractor to redo • Watch for acceptance deadlines in contract • If have passed deadline for inspection, can’t later reject services/goods provided • If unacceptable and can’t reperform • Require contractor to correct in future • Equitably reduce payment due
  • General Provisions • Modifications • May need to adjust price, must be mutually agreeable • All modifications must be in writing • Annual Audits • Required for vendors expending $500,000 or more in federal funds – good source of information for potential performance issues
  • Special Provisions • Controller’s Approval • Can’t begin work until received – statutory violation for which the employee can be held responsible if payment rendered
  • Additional Provisions • Customize your requirements • Timeframes for deliverables • If performance of later deliverables contingent upon successful completion of earlier deliverables, so note this in the additional provisions and ensure that you adequately and timely inspect earlier deliverables for acceptance
  • Notice of Breach • Failure to timely complete a deliverable, or material breach of a term of the K • Missed a project deadline • Provides unsatisfactory deliverables • Bills inappropriately • Double bills for services • Lacks adequate supporting documentation • Bills for services not included in SOW
  • Notice of Breach • Process • Notify in writing of alleged breach within (10) business days of either date of breach or date you become aware of breach • Contractor has (10) business days to respond • Failure to respond entitles you to pursue any and all remedies
  • Notice of Breach • Contract allows for dispute resolution between parties to the K, to be elevated to senior management, then to the ED • Breaching contractor liable for damages to the State
  • Remedies • Withhold $ until satisfactory performance • Correct future performance • Require removal of incompetent or unacceptable employees of contractor • Deny payment for unperformed services or services that have no value for State
  • Remedies • Suspend performance pending corrective action – no contractor entitlement to cost adjustments • Modify or recover payments to correct an error due to omission, error, fraud and/or defalcation • Terminate the K
  • Stop Work Order• Written order by Controller’s delegee, telling the contractor to stop performing• Must be for a specified period of time• Contractor must take reasonable steps to minimize further costs• If SWO is cancelled, contractor may be entitled to an amended delivery schedule and/or contract price
  • Termination • Default (for cause) • Only reimburse for accepted work received up to date of termination • Can withhold final payment until audit completed • If ultimately found not to have defaulted, termination converts to term for convenience • Get your stuff back!!!
  • Termination• Convenience • At any time, can terminate with (20) day advance written notice • Should only be used when mutually agree to terminate, or an outside, intervening event essentially makes performance impossible or renders the service wholly unnecessary • Cannot use simply to get same services from another vendor at a lesser price
  • Termination• Convenience • Contractor can submit a claim within (10) days of termination for: • Costs of accepted work • Reasonable costs associated with preparing to perform work that was later terminated • Reasonable profits on completed but undelivered work • Settlement of claims by subs • Reasonable administrative costs
  • Termination • Immediate • When health, safety or welfare is in jeopardy • Fraud or other illegal acts • Funds not appropriated, or otherwise become unavailable
  • Enforcement• Work with fiscal officers, contracts and purchasing, internal auditors, and legal affairs to determine steps necessary to cite for breach• Can institute a SWO prior to notice of breach• May need site visits to review documentation to support breach findings
  • Enforcement• Important to look throughout the Department for other programs with contracts with the same vendor• Document, document, document!!! • Phone calls must be followed up with written correspondence noting problems• Stay on top of your monitoring obligations• Set deadlines for corrective measure