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Module 2: The Contract
 

Module 2: The Contract

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    Module 2: The Contract Module 2: The Contract Document Transcript

    • The Contract I. Mandatory Terms & Conditions II. Iowa Code 8F III. Contract Templates a. DHS Template b. Intergovernmental Contracts c. Letter of Agreement (LOA) IV. Scope of Work V. Bonds a. Fidelity Bond b. Performance Bond VI. Monitor, Review and Payment VII. Monitor, Review and Payment a. Monitoring Clauses b. Review Clauses c. Payment Clauses d. Performance Criteria and Measures e. Jeff Anderson-Developing Performance Measures 9:30AM VIII. Tools a. I/3 b. PCQ c. Contract File Checklist d. HIPAA and the BAA IX. The Contract File Contents & Quality Assurance a. Contract File b. Quality Assurance (QA) Bureau of Purchased Services Jon Wetlaufer 515-242-5970 Eloise Gardner 515-281-7556 P. C. Keen 515-281-7795 Fax 515-281-6237 March 7, 2007
    • You’ve gone through the procurement process, picked a vendor and now it’s time to draft the contract. The FISCPUB share can help. The Contracting Documents folder in FISCPUB has numerous contract templates. The Tools for Contracting folder has the PCQ form and directions, and other tools to assist with the contracting process. March 7, 2007
    • The Bureau of Purchased Services (BPS) recommends everyone use the Quick Guide to Services Contracting in FISCPUB. This manual has practical applications for the contracting process. The Guide contains numerous hyperlinks to all the needed forms and websites to complete the contracting process. All contracts have a contract owner and may have one or more contract managers.  The contract owner is usually a Service Area Manager (SAM), Institution Superintendent, or Division Administrator. The contract owner has overall corporate responsibility and accountability to ensure the procurement aligns with the department's strategic plan. The contract owner has the authority to sign payment authorizations and other key and binding documents. The contract owner has the authority to delegate the technical and day-to-day operational management of the contract to one or more subordinate staff. The contract owner retains responsibility for providing direction, support and guidance to those engaged in management of the procurement, and for providing leadership in the resolution of any disputes with March 7, 2007
    • contractors. Although the Director may sign a contract and other documents, the actual ownership rests with the SAM, Superintendent, or Division Administrator. In the case of formal competition, the contract owner may act as Issuing Officer for the procurement or may delegate this role to subordinate personnel or to a Decat Coordinator. Contract ownership cannot be delegated.  There may be one or more contract managers. Contract manager duties include, but are not limited to, the duties and responsibilities delegated by the contract owner which are required for the technical and day-to-day operational maintenance of the procurement process associated with contracting for services. These duties may include: o predetermination of need for the procurement o requests for exceptions to competitive selection, e.g., sole source or emergency procurements (the contract owner must initiate such requests) o acting as the issuing officer o preparation and distribution of solicitation or contracting documents o selection of, and negotiation with, vendors o implementation of both informal and formal competitive selection processes o review and approval of contractor invoices (contract owner signs) o monitoring and review of contractor performance and compliance o dispute resolution (in consultation with the contract owner) o maintenance of contract files o and other activities or duties designated by the contract owner. In some instances, staff engaged in contract management may report or be accountable to other staff, who are not the contract owner, however, a chain of accountability is established, with the contract owner in charge of, and responsible for, all activities and duties involved in the procurement's management. The total term of a contract, including all renewals, cannot exceed six years. Contracted services are not to be performed until the contract is executed by all parties, copies are distributed to the parties and the PCQ is completed and sent to Fiscal Management. March 7, 2007
    • Mandatory Contract Terms and Conditions Your contract should include all the mandatory items and most of the optional items listed in the Contract Terms & Conditions document (Attachment 4). Mandatory terms and conditions include: Identity of the Parties Duration of the Contract Scope of Services Pricing Billings Independent Contractor Choice of Law and Forum Execution If an indemnification clause is included, insurance is required. Federal funding requires clauses for: -Suspension and Debarment -Lobbying Restrictions -Tobacco Smoke Prohibited -Certified Audits -Drug Free Work Place Iowa Code 8F Iowa Code 8F provides for increased agency oversight for certain contracts. Changes were made to provide for new Iowa Code Chapter 8F and amendments were made to Iowa Code 28E.6 and 8E.208. The legislation provides for additional contract reporting and accountability requirements. The changes apply to all service contracts with a value of $500,000 or more and to all contracts in which a given contractor has two or more services contracts with an aggregate value of $500,000, unless the contract(s) fall under one of the listed exceptions. Exempt contracts include: • Transportation-related contracts; • public utilities; • retirement system; • Title XVIII, XIX, or XXI of the federal Social Security Act; • Court appointed attorneys; • A federally insured financial institution subject to mandatory reporting; March 7, 2007
    • • Vendor services defined as services or goods provided by a vendor that are required for the conduct of a state or federal program for an organization's own use or for the use of beneficiaries of the state or federal program and which are ancillary to the operation of the state or federal program under a service contract and not otherwise subject to compliance requirements of the state or federal program; and • Contracts with entities licensed by the state and regulated by the Insurance Division of the Department of Commerce. New contract provisions: • The contractor must certify that the following information is available for inspection by DHS and the legislative services agency: 1. Information documenting the legal status of the contractor, such as agreements establishing the entity pursuant to chapter 28E or other intergovernmental agreements, articles of incorporation, bylaws, or any other information related to the establishment or status of the contractor. In addition, the information shall indicate whether the contractor is exempt from federal income taxes under section 501(c), of the Internal Revenue Code. 2. Information regarding the training and education received by the members of the governing body of the contractor relating to the duties and legal responsibilities of the governing body. 3. Information regarding the procedures used by the governing body of the contractor to do all of the following: (a) Review the performance of management employees and establish the compensation of those employees. (b) Review the contractor's internal controls relating to accounting processes and procedures. (c) Review the contractor's compliance with the laws, rules, regulations, and contractual agreements applicable to its operations. (d) Information regarding adopted ethical and professional standards of operation for the governing body and employees of the contractor and information concerning the implementation of these standards and the training of employees and members of the governing body on the standards. The standards shall include but not be limited to a nepotism policy, which shall provide, at a minimum, for disclosure of familial relationships among employees and between employees and members of the governing body, policies regarding conflicts of interest, standards of responsibility and obedience to law, fairness, and honesty. March 7, 2007
    • 4. Information regarding any policies adopted by the governing body of the contractor that prohibit taking adverse employment action against employees of the contractor who disclose information about a service contract to DHS, the auditor of state, or the office of citizens' aide and that state whether those policies are substantially similar to the protection provided to state employees under Iowa Code 70A.28. The information provided shall state whether employees of the contractor are informed on a regular basis of their rights to disclose information to DHS, the office of citizens' aide, the auditor of state, or the office of the attorney general and the telephone numbers of those organizations. 5. The certification required by this section shall be signed by an officer and director of the recipient entity, two directors of the contractor, or the sole proprietor of the contract, whichever is applicable. The certification must state that the contractor is in full compliance with all laws, rules, regulations, and contractual agreements applicable to the contractor and the requirements of Iowa Code 8F. • The contractor shall file an annual report within ten months following the end of the contractor’s fiscal year. The annual report shall contain: 1. Financial information regarding the expenditure of state and federal moneys for the prior year. The financial information shall include but is not limited to budget and actual revenue and expenditure information for the year covered. 2. Financial information relating to service contracts during the preceding year, including the costs by category to provide the contracted services. 3. Reportable conditions in internal control or material noncompliance with provisions of laws, rules, regulations, or contractual agreements included in external audit reports of the contractor covering the preceding year. 4. Corrective action taken or planned by the in response to reportable conditions in internal control or material noncompliance with laws, rules, regulations, or contractual agreements included in external audit reports covering the preceding year. 5. Any changes in the information submitted in accordance with section 8F.3. 6. A certification signed by an officer and director of the recipient entity, two directors of the recipient entity, or the sole proprietor of the recipient entity, whichever is March 7, 2007
    • applicable, stating the annual report is accurate and the recipient entity is in full compliance with all laws, rules, regulations, and contractual agreements applicable to the recipient entity and the requirements of this chapter. • Prior to entering into a service contract DHS must determine whether the vendor can reasonably be expected to comply with the requirements of the service contract. If DHS is unable to determine whether the vendor can reasonably be expected to comply with the requirements of the service contract, DHS shall request additional information from the vendor to make a determination. If DHS determines from the information provided that the vendor cannot reasonably be expected to comply with the requirements of the service contract, DHS shall not enter into the service contract. • If a contract does not establish a separate legal entity to conduct the joint or cooperative undertaking, the agreement shall also include: 1. Provision for an administrator or a joint board responsible for administering the joint or co=operative undertaking. In the case of a joint board, public agencies party to the agreement shall be represented. 2. The manner of acquiring, holding and disposing of real and personal property used in the joint or cooperative undertaking. • If an entity is created, the entity or the administrator or joint board specified in the agreement shall be a governmental body for purposes of Iowa Code Chapter 21 and a government body for purposes of Iowa Code Chapter 22 unless the entity created or agreement includes public agencies from more than one state. • All proceedings of each regular, adjourned, or special meeting of the entity created or the administrator or joint board specified in the agreement, including the schedule of bills allowed, shall be published after adjournment of the meeting in a newspaper of general circulation within the geographic area served by the entity created or the administrator or joint board specified in the agreement. The entity created or the administrator or joint board specified in the agreement shall furnish a copy of the proceedings to be published to the newspaper within one week following adjournment of the meeting. The publication of the schedule of bills allowed shall include a list of all salaries paid for services performed, showing the name of the person or firm performing the March 7, 2007
    • service and the amount paid. However, the names and gross salaries of persons regularly employed by the entity created or the administrator or joint board specified in the agreement shall only be published annually. This subsection shall not apply if the entity or the administrator or joint board specified in the agreement includes public agencies from more than one state. New contract owner/manager duties include: • Track and receive certification that the following information available for inspection by DHS: 1. Information documenting the legal status of the contractor, such as agreements establishing the entity pursuant to chapter 28E or other intergovernmental agreements, articles of incorporation, bylaws, or any other information related to the establishment or status of the contractor. In addition, the information shall indicate whether the contractor is exempt from federal income taxes under section 501(c), of the Internal Revenue Code. 2. Information regarding the training and education received by the members of the governing body of the contractor relating to the duties and legal responsibilities of the governing body. 3. Information regarding the procedures used by the governing body of the contractor to do all of the following: (a) Review the performance of management employees and establish the compensation of those employees. (b) Review the contractor's internal controls relating to accounting processes and procedures. (c) Review the contractor's compliance with the laws, rules, regulations, and contractual agreements applicable to its operations. (d) Review information regarding adopted ethical and professional standards of operation for the governing body and employees of the contractor and information concerning the implementation of these standards and the training of employees and members of the governing body on the standards. The standards shall include but not be limited to a nepotism policy, which shall provide, at a minimum, for disclosure of familial relationships among employees and between employees and members of the governing body, policies regarding conflicts of interest, standards of responsibility and obedience to law, fairness, and honesty. 4. Information regarding any policies adopted by the governing body of the contractor that prohibit taking adverse employment action against employees of the contractor who disclose information about a service contract to DHS, the March 7, 2007
    • auditor of state, or the office of citizens' aide and that state whether those policies are substantially similar to the protection provided to state employees under Iowa Code 70A.28. The information provided shall state whether employees of the contractor are informed on a regular basis of their rights to disclose information to DHS, the office of citizens' aide, the auditor of state, or the office of the attorney general and the telephone numbers of those organizations. • Track and receive contractor’s annual report within ten months following the end of the contractor’s fiscal year. Verify the report contains: 1. Financial information regarding the expenditure of state and federal moneys for the prior year. The financial information shall include but is not limited to budget and actual revenue and expenditure information for the year covered. 2. Financial information relating to service contracts during the preceding year, including the costs by category to provide the contracted services. 3. Reportable conditions in internal control or material noncompliance with provisions of laws, rules, regulations, or contractual agreements included in external audit reports of the recipient entity covering the preceding year. 4. Corrective action taken or planned by the in response to reportable conditions in internal control or material noncompliance with laws, rules, regulations, or contractual agreements included in external audit reports covering the preceding year. 5. Any changes in the information submitted be in accordance with section 8F.3. 6. A certification signed by an officer and director of the recipient entity, two directors of the contractor, or the sole proprietor of the contractor, whichever is applicable, stating the annual report is accurate and the contractor is in full compliance with all laws, rules, regulations, and contractual agreements applicable to the contractor and the requirements of Iowa Code 8F. • Performance measurements must include an assessment of whether: 1. Adequate control procedures in place, 2. Control procedures are operating effectively, 3. The contractor is providing services of adequate quality, 4. Public resources are being used effectively and efficiently, and March 7, 2007
    • 5. Public resources are being used for appropriate and meaningful activities. March 7, 2007
    • Contract Templates The FISCPUB share at Hoovr3s2 has several contract shells. The shells are in the Contract Documents/Contract Templates folder. The contract template you use depends on your need. All of the templates offer a fill in the blank format. Rename and save the template to your computer or a disk. If you’ve completed the document and cannot save it, the document is in read only status, rename and then save the document to your hard drive, a disk or your share. If a contract clause or section does not apply to your contract, write “reserved” or “does not apply” and leave the rest of the section blank. Please do not leave the language in the contract document if it does not apply. Also, please remove notes within the contract that explain the need for the particular clause and that are used as prompts for users. DHS Contract Template (Attachment #1) Use the main contract template for all contracts, with or without renewal options. March 7, 2007
    • Intergovernmental Contracts (Attachment #2) Use the intergovernmental contract for contracts between the department and other governmental entities, whether federal, state, or local. There is one template. Letter of Agreement (Attachment #3) Use the Letter of Agreement when the contract amount is less than $5,000 for the term of the contract, including all renewals when contracting with cities, counties, public school districts, community action agencies, etc. Fiscal Agent Contracts A fiscal agent is a private or public entity that receives, manages, accounts for, and disburses monies on behalf of DHS. Fiscal agent services include only the core functions of receiving, accounting for, and disbursing financial resources. In addition to the core fiduciary services, the entity may provide other services including, but not limited to: carrying out human resources/personnel functions, subcontracting for direct services to customers/clients, processing provider and customer claims, quality assurance/fraud prevention and detection, data collection and reporting, and the assumption of a part or all of the administrative activities associated with an entire program. All other services other than receipt, management, accounting and disbursements are coincidental to the fiscal agent's core fiduciary duties. Fiscal agent services may be contracted for only when:  insufficient resources (e.g., money, time, office space, supplies, personnel, etc.) exist and/or,  the contract will result in material (real or significant) efficiencies or savings, and/or  state or federal statutes, regulations, or rules permit or require use of a fiduciary to provide Fiscal Agent Services. Document in the contract file:  Justification of the need for a fiscal agent  Name and location of the fiscal agent  Description of all services to be performed, both core fiduciary and coincidental  A description of the internal control procedures between the State agency and the fiscal agent. (The fiscal agent shall maintain separate bank or savings and loan association accounts to account for any money under its control.) March 7, 2007
    •  That the fiscal agent employs Generally Accepted Accounting Principles (GAAP) and appropriate internal controls to account for financial resources placed in trust. The fiscal agent’s responsibilities for receipt, management, accounting and disbursements, on behalf of DHS, and the amounts to be distributed should be included in the Scope of Work description. The amounts to be disbursed should not be specified in the contract payment clauses. Only the amount to be paid to the fiscal agent for administrative and other services should be included in the contract payment clauses. (A fiscal agent contract template is currently under construction.) Scope of Work Regardless of whether the procurement process was informal or formal and whether the contract is with an outside entity or another governmental agency, the most important part of your contract will be the scope of work. The scope of work is the blueprint that defines the services you are purchasing. During the RFP process you gathered the information, specifics, and data to write a clear and detailed scope of work. Your RFP scope of work should be clear and concise, and use common, easily understood language. You should be able to cut and paste the RFP Scope of Work and place it in your contract, with minimal modification. Your scope of work defines the activity, service or product to be provided to the customer, client, stakeholder for an intended benefit or outcome. When developing your Scope of Work, write performance work statements, or outcome-based scope of work statements. By doing so, you should be able to measure the contractor’s performance. Bonds Fidelity Bond A fidelity bond provides funds to the department in the event that the department or the State of Iowa suffers any liability, loss, damage or expense as a result of any fraudulent or dishonest act or omission of the contractor or any subcontractor or any officer, director, employee or agent of the contractor or any subcontractor or any parent or subsidiary corporation of the contractor or any subcontractor related to the performance of this contract. If you require a fidelity bond, the contractor must provide the fidelity bond within the number of days the contract specifies prior to the March 7, 2007
    • effective date of the contract and provide a copy of the bond to the department. The contractor shall pay the cost of the bond. The bond provides funds to the department in the event that the department or the State of Iowa suffers any liability, loss, damage or expense as a result of any fraudulent or dishonest act or omission of the contractor or any subcontractor or any officer, director, employee or agent of the contractor or any subcontractor or any parent or subsidiary corporation of the contractor or any subcontractor related to the performance of this contract. The bond shall be in a form customarily used in the industry, shall be written by a surety authorized to do business in Iowa and must be acceptable to the department. The bond shall be in effect at all times during the term of the contract and any extensions or renewals and for one year following the conclusion of the contract. The bond shall provide funds to the department for any fraudulent or dishonest act or omission, which occurs during the term of the bond, regardless of the date the act or omission is discovered, or a claim is made. The contractor will maintain the required fidelity bond coverage without any lapse in coverage. Failure on the part of the contractor to furnish such a bond in the time stated, or to maintain the bond in full force and effect during the term of the contract and any extension or renewals, is a material breach of the contract and shall be considered cause for the department to declare the contractor in default under this contract. The department’s receipt of such bond or other proof of coverage does not constitute approval of the bond coverage nor does the bond relieve the contractor from the faithful and honest performance of the contract. Performance Bond A performance bond protects the Department once the contract is awarded. It provides protection to the Department if the contractor fails to perform the contracted services. The performance bond on a larger contract should be approximately 20% of the contract value. The Contractor shall post a performance bond and provide a copy of the bond to the department within (10) days of execution of the contract. The contractor shall pay the cost of the bond. In the event that the contractor or any subcontractor or any officer, director, employee or agent of the contractor or any subcontractor or any parent or subsidiary corporation of the contractor or any subcontractor fails to fully and faithfully perform each material requirement of the contract, including without limitation the contractor’s obligation to indemnify the department and pay damages to the department, the performance bond shall be forfeited to the department. The bond shall be in a form customarily used in the contractor’s industry and shall be written by a surety authorized to do business in Iowa and that is acceptable to the department. The bond shall be in effect at all times during the term of March 7, 2007
    • the contract and any extensions or renewals and for one (1) year following the conclusion of the contract. The contractor will maintain the required performance bond coverage without any lapse in coverage. A lapse of the bond will be a material breach of the contract and shall be considered cause for the department to declare the contractor in default under the contract. Monitoring, Review and Payment Clauses The Accountable Government Act, requires all contracts include monitoring, review and payment clauses. Legislation and administrative rules require performance criteria with specific indicators to monitor contracts. All DHS contracts shall include monitoring clauses, review clauses, and payment clauses. Monitoring clauses describe the methods to oversee contractor compliance with the conditions of the contract. Review clauses describe the methods to review the contractor’s performance. Payment clauses describe the amount of, or the basis for, payment consideration and are dependent on monitoring clauses and any current and post-contract review procedures. Monitoring Clauses A good scope of work will help develop monitoring review clauses. Your contract should provide for regular monitoring once the contract is signed and the contractor has started the work. Monitoring is any planned, ongoing, or periodic activity that verifies the contractor’s compliance with the terms, conditions, and requirements of the contract. Monitoring includes unplanned activities as well. Your contract should include a clause requiring monitoring activities every 30 to 60 days. The monitoring activities written into the contract should include, but are not limited to: ♦ Periodic reporting ♦ Invoice reviews ♦ Periodic contact with contractor For contracts that are periodic or episodic, i.e., process server and death reviews, the contract should include a monitoring clause based on frequency of use. Review Clauses A good scope of work will help with developing review clauses. Review clauses should provide for comprehensive evaluations of performance measurements that include but are not limited to outcome measures, March 7, 2007
    • output measures, efficiency measures, quality measures, or a review plan. Performance criteria and performance measures should be defined in the contract. Review clauses should include fiscal monitoring as well as evaluation of service delivery. At a minimum, reviews should be completed semi-annually for one-year contracts and annually for multi-year contracts. Reviews can be scheduled more frequently if needed due to issues and concerns. The Contract Performance Review form (Attachment #5) is available on FISCPUB in the Tools for Contracting folder as a guide regarding review activities. Payment Clauses Payment clauses should be dependent on actual performance. The payment clause should set specific performance criteria and measures. The contract should establish clear performance criteria to determine when and how much the contractor should be paid. The contract should also state the maximum dollar amount to be paid for the term of the contract. Payment clauses should state how often invoices should be submitted and the type of sufficient detail and back-up documentation needed to verify to the appropriateness of the charges. The payment clause should specify that before authorizing payment, the department will verify that the contractor has appropriately and accurately delivered services as detailed in the contract. Performance Criteria and Performance Measures Performance criteria and performance measures act as a guide for monitoring and review activities. Performance criteria define the standards for measuring contractor performance and satisfaction with the contractor’s performance. Performance criteria should provide some of the data for needed program evaluation. Performance measures are mathematical evaluations that document the contractor’s inputs, outputs, efficiency, quality or outcome, the contractor’s success at implementing the contract. Performance measures should clearly identify the purpose of the contract, list the services/activities that are the basis for the contract, list the contract parameters, define success, list specific measures, determine reporting March 7, 2007
    • requirements and where the data will come from, and set the targets and performance thresholds. Mathematical performance measures are a part of adequate contract management. Many other aspects of contract management must be included to assure full value is received from a specific contract. Your performance criteria are the starting point for your monitoring and review contract language and activities. Questions to ask when determining performance measures and criteria are: What is the contract buying? How will you know if the contractor is taking the appropriate steps to accomplish the job or purpose of the contract? What benchmarks verify the contractor is pursuing a path that will lead to the end product you are purchasing? Tools There are several forms that should be used to document the procurement and contract activity. I-3 Prior to signing a contract, the department must determine as to whether or not the contractor has an employer/employee relationship with the State. The Department of Administrative Services, State Accounting Enterprise (DAS/SAE) makes the official determination regarding an employee/employer relationship. The Pre-Contract Questionnaire Table (PCQT) is a part of the statewide Iowa Financial Accounting System (I-3). The PCQT lists vendors providing services whose relationship with the State has been reviewed by DAS/SAE and a determination made that no employer/employee relationship with the State exists. The document, I-3 PCQT Search, can be found in FISCPUB in the Pre- Contract Questionnaire (PCQ) Information folder. It explains how to find the PCQT number on the I-3 System. The PCQT number or Vendor number is what you place on your PCQ prior to obtaining the Director’s or authorized designee’s signature. The Twenty Common Law Factors document in the PCQ folder sets the criteria used by the IRS to determine the existence of an employer/employee relationship. If a service provider is not listed on the PCQT, then prior to signing the contract, prepare and submit the original Pre-Contract Questionnaire, the services provider completed Internal Revenue Service (IRS) form SS-8, if not contracting with a corporation, March 7, 2007
    • and the proposed, unsigned contract to Barrett Harvey or Trina Brietske in DAS. The contractor may also be required to complete form W-9 to assist in determining the employer/employee relationship question and the assignment of a PCQT#. DAS will review the proposed, unsigned contract to determine if an employee/employer relationship will exist. If, after review of the Pre-Contract Questionnaire and supporting documents, DAS concludes that an employer/employee relationship will exist, the department must either select another contractor that will meet the independent contractor test, add the Contractor as an employee on payroll, or use the State's third party contract with Temporary Staffing Services to pay the contractor. After DAS/SAE review, the Pre- Contract Questionnaire (PCQ) and supporting materials will be returned. The PCQ All contracts need a Pre-Contract Questionnaire or PCQ (Attachment #6). FISCPUB has a separate folder, Pre-Contract Questionnaire (PCQ) Information that contains the form, aids and directions needed to complete the form. The PCQ applies to all contracts with State agencies, public vendors, and private vendors. The PCQ is used as the way the Department tracks services contracts. The State Accounting Enterprise uses the PCQ to document that there is no employer-employee relationship between the Department and the Contractor. A PCQ form is to be completed and submitted for every new, renewed, or amended contract regardless of the value. This requirement is for all contract formats and templates. The PCQ requirement does NOT apply to commodities purchased through the Department of Administrative Services / General Services Enterprise. All PCQs should be sent to Julie Williams, Division of Fiscal Management. The contract is recorded into a database using the information on the PCQ. The database is used by the DHS to complete responses to requests for information (RFI’s), legislative inquiries, and Auditor Office inquiries. Contract File Checklist To assist staff in assuring that they have completed all the necessary steps when contracting, the Contract File Checklist was developed. The document allows you to review each point in the contract process, the corresponding rule or requirement for that step, and provides an assessment tool for your contracting process. The documents on the list should be maintained in the contract file. The checklist is part of the March 7, 2007
    • DHS Contract Template. Please use this list when building the contract case file. HIPAA and the Business Associate Agreement Contractors with access to medical information are considered a business associate under the Health Insurance Portability and Accountability Act (HIPAA) of 1996. These contracts must also have a Business Associate Addendum or BBA (Attachment #7) with the contract. In making the determination if a contractor is a business associate determination if the contractor: 1. Represents a part of the DHS covered entity; and 2. The vendor is doing a service for, or on behalf of, DHS (in accordance with 11 IAC, Chapter 106); and 3. Protected Health Information (PHI) is being exchanged to allow the vendor to fulfill their responsibilities. If you are uncertain whether your contracted services meets the definition for a business associate agreement, contact Steve Mosena, HIPAA Privacy Office, Division of Data Management, Telephone: 515/281-8708. Contract File Contents & Quality Assurance Contract File Contents Since the beginning of your procurement project you have been acquiring lots of paper and using forms to assist in the process. Once your contract is executed your contract file should contain:  The Pre-Determination of Contracting document  A copy of the Informal Bid Selection Document or the RFP  Documentation of the TSB posting  Documentation of the eservices posting  All PCQs  The Notice of Intent to Enter into Contract Negotiations,  The RFP Mandatory Requirements Checklist, if an RFP was issued  The contract with the Contract File Checklist and any amendments  On-going items and communications. Please put all the paper acquired during your procurement process in your contract file. Quality Assurance (QA) Both the Auditor of State and BPS randomly pick contract files to review. BPS conducts an internal quality assurance reviews each month. The purpose is to identify where the contract meet the requirements, where March 7, 2007
    • the contract is lacking or weak in meeting requirements, and what is done well. The intended outcomes are to provide feedback to contract developers and to learn where additional training may be needed. The criteria for each QA review are the DAS Rules, the DAS State Accounting Enterprise (DAS/SAE) Procedure Manual, and the State of Iowa Auditor’s suggestions for best practices for services contracting. In the QA process, there are approximately thirty-two (32) areas that are reviewed for possible exception findings and each section is assigned points for scoring. If an area is not applicable, the points are given; the highest achievable score is 300 points. The review is looking for:  The necessary signatures and dates on the contract and any amendments are before the start date of the contract and/or any amendments.  PCQ signatures and dates before the start date of the contract and/or any amendments.  The reason the contract was procured, statutory changes, staff shortages, etc. A copy of the enabling legislation, notes and information regarding any circumstances surrounding the need to contract should be on file.  The procurement method used, informal or formal.  The selection method used, on what basis was the contract awarded to this particular contractor.  Proof that procurement was properly posted on the TSB and eservices website. Please note for formal procurements if the eservices posting was not done the contract is void and must be re-bid.  Monitoring and review clauses, whether they are realistic, and whether performance be measured using the clauses.  A payment clause and that payment is tied to actual performance.  Documentation that the contract is being monitored and reviewed.  Payments being made, how much and are the amounts in compliance with the terms of the contract. March 7, 2007