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Standard Contract Form Presentation
 

Standard Contract Form Presentation

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  • We will be highlighting the key issues and changes. Please review the Open Close instructions and the Amendments Policy which have more details and examples.

Standard Contract Form Presentation Standard Contract Form Presentation Presentation Transcript

  • Web Cast for The New Standard Contract Form (Web Cast held 5/2007 - Presentation Updated 8/2007)
  • Office of the Comptroller
    • Questions and other assistance can be obtained by emailing:
    • [email_address]
  • Printing This Presentation
    • To print, under Print functions
      • Under “Print what” select “handouts”
      • Under “Color/grayscale” select “black and white”
      • Select number of slides per page (3 or less)
  • Highlights of Policy Updates
    • Amendments
    • Renewals
    • Extensions
    • Settlement and Release
    • Standard Contract Form
    • Please see Open/Close Instructions and Amendments policy for changes
  •  
  •  
  • GOALS
    • Reduce paperwork and number of forms
    • Make paperwork process more efficient
    • Make paperwork more reflective of actual performance obligations
  • State Finance Law Reminders
    • Contractors may not incur an obligation payable by the Commonwealth prior to “ legal authorization ” by a Department
  • State Finance Law Reminders
    • The “ legal authorization ” to incur an obligation is a Contract, Amendment or Extension
    • Therefore, with the exception of incidental purchases, or emergencies, Contracts, Amendments, Extensions must be “in place” prior to a Contractor incurring an obligation.
  • When is an obligation incurred?
    • Review Bill Payment Policy
  •  
  • When is an obligation incurred?
      • Goods – when order placed, payment is triggered when goods delivered
      • Services –
        • When services are authorized to begin, OR
        • For performance-based obligations, when the milestone triggering a payment obligation is delivered (when a contractor not paid for any performance until milestone achieved); OR
        • When the contractor has provided possession or committed (reserved) access to goods or services on behalf of the department for a period of time, such as rentals, leases, TELPs, on-call service or maintenance, subscriptions and hotel reservations
  • When is an obligation incurred?
      • Grants – financial assistance is not a fee-for-service for the Department)
        • When grantee incurs costs intended to be paid under the grant, OR
        • The date a grant payment is due if grant is not performance based,
        • Date milestone fulfilled for performance based grants (no payment obligation if milestone not met)
  • When is Formal Amendment Required?
    • Amendments, Suspensions and Termination Policy clarifies that a formal Amendment will be required for significant or “ material ” changes to the performance expectations or obligations in a Contract (e.g., Maximum obligation, dollars, volume of services, new services, duration.)
        • Departments can document process for minor changes as part of RFR or Contract.
  • State Finance Law Reminders
    • AMENDMENTS - OPTIONS TO RENEW
    • Amendment to renew must be executed on or before termination date
    • Failure to execute a timely Amendment will result in contract termination
    • Once a contract terminates, new performance must stop and a contract may not be “revived” retroactively back to the termination date.
    • (i.e., “ legal authorization ” must be
    • in place prior to new performance.)
  • What if Amendment may not be executed on or before termination date?
    • Provide Written Notice of Contract Extension (not to exceed 30 days) to enable execution of Amendment.
      • Not a new policy – available since 2004
      • Extension is not “effective” until d ate the Contractor confirms receipt of the notice of extension.
      • Extension provides “ legal authorization ” for new performance until Amendment is in place
  • LIMITED 30-DAY CONTRACT EXTENSION
    • Other Requirements:
    • Must be “allowable” under procurement authorization . (Unless also doing an “Interim” Contract or Grant.)
    • NOT for “new” Contracts .
    • Must be supported by sufficient funding
    • Allows MMARS encumbrance modification to add up to 30 days to current encumbrance (if payments are needed prior to Amendment)
    • Attach extension documentation to Amendment documentation when Amendment completed.
  • Updated Standard Contract and Amendment Form
    • The Standard Contract Form and Standard Contract Amendment Form have been merged into one form
      • Comment period ended May 28 th
      • Contract form live June 8, 2007
      • Limited grandfathering of old forms for contracts/amendments and procurements in process (based upon Department needs)
      • Should be used for procurements in progress if Responses have not yet been submitted.
      • Should be used for all amendments done after June 8, 2007
  • Standard Contract Form
    • Department selects box for either a:
      • New Contract (new performance not part of extension, renewal or amendment) (LEFT SIDE)
      • Amendment/Renewal (even if related contract has expired) (RIGHT SIDE)
    • Department completes required info and attaches required supporting documentation
  •  
  • Standard Contract Form Contents
    • see State Finance Law and Requirements Policy (Contracts Policies) and
    • Quick Reference for Contracts, Grants, ISAs and Chargebacks under Contract Job Aids
    • Both are being updated to reflect new Contract
  • REMINDER NEGOTIATE PROMPT PAY DISCOUNTS AND EFT DURING CONTRACT AND AMENDMENT PROCESS
    • Departments should negotiate use of Electronics Funds Transfer (EFT) and Prompt Payment Discounts whenever a Contract or an Amendment is negotiated .
    • Prompt Pay Discounts now on Standard Contract Form and separate form does not have to be obtained
  •  
  • “ Effective Date” Remains the Same
    • Legal “ Effective Date ” is still the latest date the Contract/Amendment is signed by Authorized Signatories of the Contractor, the Department, a later date listed in the Contract or Amendment or the date of any required approvals.
  • What’s New?
    • “ Effective Date” applies to Amendments (previous policy allowed amendments at any time prior to end date)
    • Therefore, Amendments must be in place (“ legal authorization to incur obligations ”) prior to obligations being incurred based upon the Amendment.
    • Timing of Amendment execution will now depend upon when the Amendment obligations start.
  • What’s New?
    • Examples:
    • Amendment to add new performance that won’t start immediately should be executed prior to the start of the new performance
    • Amendment to add additional units of performance to existing scope and budget, may be executed later in fiscal year prior to these units being obligated, but should be executed as early as possible to ensure sufficient funds are set aside and Contractor commits to performance.
  • What’s New?
    • There is a new process for:
      • Late executed “new” contracts
      • and
      • Notice of Contract Extension and Amendments (which may now still be done after the termination date of a Contract.)
  • Old Process
    • Previous restriction prohibited an extension or amendment after the termination date.
    • For lapsed contracts and for late executed “new” contracts, Departments were required to obtain:
      • a Settlement and Release Form (for obligations outside of contract), and
      • New Contract (even if renewal amendment was already executed)
    • Goals:
      • require paperwork to encourage timely compliance
      • support policy that dead contracts can not be retroactively “revived”.
      • Document performance and lock in costs for “out of scope” performance so Contractor couldn’t come back at a later date for more money.
  • What’s New?
    • New process accomplishes same goals by allowing any obligations incurred prior to Effective Date of a New Contract , or an Extension or Amendment (“outside the scope of the contract”) to be “Settled” as part of the Standard Contract Form .
  • New process does NOT prevent Audit or Quality Assurance findings for allowing performance to occur without a Contract in place
    • However, new process:
      • Provides more efficient way to document performance if an inadvertent lapse occurs;
      • Prevents lapse in performance;
      • Allows Department to continue to take advantage of prompt payment discounts since payments are not delayed;
      • Does not retroactively “revive” a contract back to the “start date” but instead includes all performance under single Contract document and MMARS encumbrance to enable payments back to the start date;
      • Documents that both Contractor and Department are admitting to performance outside scope (to encourage future compliance);
      • Protects Commonwealth from future claims for “additional costs” for Settled performance.
  • Updated Standard Contract Form
    • Departments should enter the date obligations will be incurred (or the date the legal authorization to begin performance) under “START DATE”.
      • Departments will then select either that:
        • No obligations were incurred prior to the Effective Date , OR
        • Performance incurred prior to the Effective Date is included as a “Settlement” as part of the Contract/Amendment.
  •  
  • Updated Standard Contract Form
    • Departments will enter the MMARS transaction to match which selection is made:
      • The start date in MMARS will either be the “ Effective Date ” or
      • The date obligations were incurred, if prior to the Effective Date
  • EXAMPLE #1
    • New Contract with Start date listed as 7/1/07
    • Effective date (execution dates) 6/25/07
    • Check box #1 no performance < Effective Date
    • performance actually starts 7/1/07
    • Contract timely executed
    • MMARS reflects 7/1/07 start date
  • EXAMPLE #2
    • New Contract with Start date listed as 7/1/07
    • Effective date (execution dates) 8/25/07
    • Check box #2 performance < Effective Date included as settlement
    • performance actually started 7/1/07
    • Contract not timely executed, but incorporates settlement performance from 7/1/07 - 8/25/07
    • MMARS may reflect 7/1/07 start date
    • NOTE: contract is not revived back to 7/1/07, only payments are authorized for 7/1/07-8/25/07.
  • EXAMPLE #3
    • Contract Expires 6/30/07
    • Amendment Start date listed as 7/1/07
    • Effective date (execution dates) 6/25/07
    • Check box #1 no performance < Effective Date
    • performance actually starts 7/1/07
    • Amendment timely executed
    • MMARS reflects 7/1/07 start date
  • EXAMPLE #4
    • Contract expires 6/30/07
    • Amendment with Start date listed as 7/1/07
    • Effective date (execution dates) 8/25/07
    • Check box #2 performance < Effective Date included as settlement
    • performance actually started 7/1/07
    • Amendment not timely executed, but incorporates settlement performance from 7/1/07 - 8/25/07
    • MMARS may reflect 7/1/07 start date
    • NOTE: contract is not revived back to 7/1/07, only payments are authorized for 7/1/07-8/25/07.
  • EXAMPLE #5
    • Contract expires 6/30/07
    • Amendment with Start date listed as 7/1/07
    • Effective date (execution dates) 8/25/07
    • Performance not scheduled to start under scope and does not start until Effective date
    • Check box #1 No performance < Effective Date
    • Amendment timely executed, because no performance prior to Effective Date
    • MMARS must reflect 8/25/07 as start date
  • EXAMPLE #6
    • Contract Expires 6/30/07
    • Amendment can not be done by 6/30/07
    • Department sends notice of Contract Extension through 7/31/07 an receives confirmation by 6/30/07
    • Contract properly extended through 7/31/07
    • MMARS updated to extend dates and allow payments through 7/31/07
    • Amendment Start date listed as 8/1/07
    • Effective date (execution dates) 7/25/07
    • Check box #1 no performance < Effective Date
    • Amendment timely executed
    • MMARS extends end date
  • Option #1 or Option #2?
    • Option #1 is checked only if the SCF is being executed by both the Dept and Contractor PRIOR to the Anticipated Start Date of the Contract or Amendment.
    • Option #2 is checked whenever the SCF will NOT be executed by both the Dept and Contractor PRIOR to the Anticipated Start Date of the Contract or Amendment.
  • What if?
    • QUESTION : What if I filled out Option #1 and the Contractor signed prior to the Anticipated Start Date, but my Department did not sign prior to this date?
    • ANSWER : If the Department allowed performance to begin prior to the Department signing the Contract, this performance is not covered under the Contract and the Contract/Amendment must be revised to check #2 and have this initialed by Authorized Signatories of both parties. The Contract/Amendment does not have to be resigned.
  • New Contract or Amendment?
    • QUESTION. A contract expired on June 30, 2007. Renewals are authorized under the current procurement or authorized exception. Should we do a New Contract or an Amendment for the renewal or new performance?
    • ANSWER: An Amendment. This is not a new contract but a continuing contract under the same procurement or authorization. Therefore, one contract should be done per procurement, with amendments for any renewals or changes during the procurement period. Also, the existing contract encumbrance must be modified to add the renewal line (s), rather than starting a new DOC ID.
  • Amendment Dates
    • Be sure to include accurate dates for Amendments. You must include 4 dates:
    • Current dates Prior to Amendment :
    • 1. Original start date of contract
    • 2. Date Contract terminates (prior to amendment)
    • Dates After Amendment:
    • 3. Amendment Anticipated Start date (date obligations will start)
    • 4. Contract end date (same as #2 if no change, or new termination date for renewals etc.)
  • Pre Amendment Dates (Current Contract Dates) Amendment Dates
  • Reminder MMARS MUST MATCH CONTRACT, AMENDMENT OR EXTENSION
    • MMARS considered the “official record” or “record copy” of fiscal activities and will supersede paper or other formats of the same information.
    • Contracts, Amendments and Extensions must use the same MMARS Doc ID as the contract being amended or extended to keep all documentation together.
    • The same MMARS Doc ID must be retained from year to year for the life of the contract and must appear on the top of all contract documents for Records Management and Audit purposes.
  • Reminder MMARS MUST MATCH CONTRACT, AMENDMENT OR EXTENSION
    • The Contract supporting documentation must identify all performance and costs being compensated under the Contract, including any settled obligations.
    • MMARS must match the full duration and amounts of underlying Contract, Amendment or Extension
    • Any “out year” of a multi-fiscal year contract within the total duration without payment obligations must still be reflected in MMARS
  • Updated Standard Contract Form
    • Incorporates the following “certifications” into the “Contractor Certifications” of the attached Instructions:
      • Executive Order 481 Certification
      • Northern Ireland Certification
      • Affirmative Action Certification
      • These Forms (and Prompt Payment Discount Form) will still be available if Departments want this information as part of a procurement as a basis for selection, but separate attachments no longer required.
  • CONTRACTOR CERTIFICATIONS
    • By executing this Contract, the Contractor under the pains and penalties of perjury,
      • makes all the listed certifications and
      • has provided all required documentation and disclosures (identified below with an “  ”), or shall provide any required documentation upon request,
      • and the Contractor agrees that all terms governing performance of this Contract and doing business in Massachusetts are attached to this Contract or incorporated by reference herein, including the
        • terms of the applicable Commonwealth Terms and Conditions available at OSD Forms or CTR Contract Forms ,
        • the terms of the attached Instructions ,
        • the Request for Response (RFR) or solicitation (if applicable),
        • the Contractor’s response to the RFR or solicitation (if applicable), and
        • any additional negotiated provisions:
  •  
  • Other new terms: Contractor Information must match W-9
    • Contract Legal Address and Name must now match the W-9 Legal Address and T&C Legal Address
    • This provides a way to verify that the VCUST vendor code and remittance address is accurate
    • Prompts updates when information does not match
    • Lessens returns of 1099s and IRS B-Notices for inaccurate reporting information
    • Please Check 1099I table in MMARS to verify Legal Address OR query the CIW table “dbo_M_Reference_Vendor” including the TIN Address and the Modified Date to identify the Legal Address.
    • Note: Be careful to pull the last updated record to ensure you have the most up to date record.
  • Other new terms: Carry over funds .
    • Multi-year contracts in which encumbered amounts in any fiscal year that remain unexpended at the close of the fiscal year are NOT automatically available for compensation for Contractor performance in subsequent fiscal years unless so authorized by the Department.
    • Operating funds revert (and are no longer available to spend)
    • Capital, Trust and Federal Funds balance forward, however:
      • Prudent contract management requires Departments to reconcile performance and expenditures in each fiscal year and authorizing use of carry over amounts for performance in the subsequent fiscal year(s) either as part of amendments to the scope and budget of the Contract, and underlying MMARS transactions, or as part of the original Contract performance terms and budget.
  • Other new terms: Payments .
    • Not new policy – but added to instructions
    • Electronic Funds Transfer (EFT ) (encourages sign-up).
    • Legal Payment Date identified as when the payment is issued by the Commonwealth via EFT (Electronic Funds Transfer) when issuance file is transmitted to the bank or for checks when the check is sent to the post office by the State Treasurer’s Office.
      • This is important relative to when Prompt Payment Discount dates are triggered.
  • Other new terms: Payments .
    • Intercept. All payments due the Contractor shall be subject to intercept pursuant to G.L. C. 7A, § 3 and 815 CMR 9.00 . (Language part of T&C)
    • new** Contractor may not penalize any state Department or assess late fees, or cancel a Contract or other services if funds are intercepted due to outstanding taxes, child support, or other overdue debts of the Contractor.
  • Other new terms: Payments .
    • Invoices.
      • Invoices must be submitted in accordance with the terms of the Contract and the Bill Paying Policy .
      • New - Final invoices in any fiscal year must be submitted no later than August 15th
        • Department may make payment based upon the terms and prices of the contract for the goods or services that are accepted by the Department, and the Contractors acceptance of payment shall release the Commonwealth from further claims for payment.
        • If the Contractor disputes the final payment and refuses payment, available funds may revert and may be delayed
  • New: Pandemic, Disaster or Emergency Performance .
    • In the event of a serious emergency, pandemic or disaster outside the control of the Department, the Contractor agrees the Department may request performance changes related to the Contract, or may negotiate additional performance from the Contractor to address the emergency needs of the Commonwealth (subject to appropriation), even if not contemplated under the original Contract.
    • Guidance will be issued by CTR, ANF or other appropriate authority related to the use or implementation of this language in the event of an emergency.
  • Attorney Contracts (H09, N03)
    • Please note that the AGO Form for approval of Legal Services has been updated.
    • Please use the new form posted on the CTR Web portal under “Forms” under “Contracts” and review the AGO Transmittal letter for details on procedural requirements for submission.
  • Attorney Contracts (H09, N03)
    • In addition to current requirements Departments will be asked to add:
    • In MMARS Transaction – Include in “Comments” field the Rates and Purpose of Services .
    • MMARS encumbrances for attorneys must contain in the comments section the Units and “Rates” or “Range of Rates” for the services and a brief description of the specific type of services under the engagement to enable completion of annual reporting requirements under G.L. c. 30, § 65 .
    • In comments section, in the “subject” field, please enter “rate data” to identify that you are including rates, and to standardize the quarterly query that is done.
    • Stating “Legal Services” is incomplete. Instead, include exactly what is being performed, such as “litigation matter – employment”, “Inmate complaint resolution”, “employee representation”, “bargaining unit negotiations”, “contract dispute”, “land acquisition research”.
    • Departments that fail to include this information as part of the original encumbrance will be required to modify the encumbrance to add this information to complete reporting requirements.
    • If rates or services change during an amendment, the comments must also be amended to reflect the change.
  • New Public Information and Privacy Concerns.
    • Since certain MMARS fields are a matter of public record MMARS doc IDs (encumbrances, payments, etc.), vendor invoice numbers, contract numbers, check descriptions, and any comment fields MUST NOT contain personal information (such as individual’s names, SSN numbers, bank account numbers, date of birth, addresses etc.) or other information that could jeopardize privacy or facilitate identity theft .
    • MMARS doc IDs and key comment fields may be printed on checks, sent electronically as part of remittance advice, and will appear on VendorWeb (and may be viewed related to public records requests), therefore care must be taken that individual personal information is not used.
  • Updated Department Head Signature Authorization and Electronic Signatures .
    • To MMARS and Non-MMARS users, please review the Department Head Signature Authorization Policy
    • REMINDER:
    • All individuals acting on behalf a Department Head (incurring obligations, approving payroll, approving or signing contracts or other obligations) must be designated as Authorized Signatories with a MMARS Security UAID and Authorized Signatory flag even if the individual will never touch MMARS.
  •  
  • Department Head Signature Authorization .
    • Policy has clarified that “alternate methods” of documenting “evidence” of DHSA are allowable
      • MMARS functionality is designed to support extensive use of electronic signatures for DHSA purposes.
      • Departments are encouraged to use this functionality to electronically document DHSA by encouraging signatories to access and view documents on-line and apply approvals.
      • We are trying to position the Commonwealth to be able to use “outward” facing electronic signatures, such as E-Contracts, which will be based upon electronic workflow of documents
  • Department Head Signature Authorization .
    • However, we recognize that some Departments are not in a position to fully implement all review and approvals on-line
    • Therefore, the policy has been expanded to enable DHSA signoff in a variety of ways which do not necessitate approval by the Authorized Signatory on-line in MMARS or HR/CMS directly or screen prints of MMARS or HR/CMS
  • Department Head Signature Authorization .
      • Departments can use the MMARS Document Records Management/Signature Authorization Form to approve one or multiple MMARS transactions.
      • Emails from the Department Head (or authorized signatory) with the key data elements for approval;
      • DHSA signature or initials on invoices, spreadsheets or memorandum, or other “evidence” of signoff is also sufficient.
  • Department Head Signature Authorization Evidence of DHSA Signoff
    • Departments may develop any internal process (as part of the Department Internal Control Plan) that efficiently “documents” Department Head signoff.
      • For “shared processing” models, departments should develop internal process for capturing DHSA from Parent Department (but can not blanket “in advance” approval).
    • Electronic evidence of approval such as emails must be printed and retained in order to document approval, since emails are not yet a sufficient electronic format to retain records.
    • Once the evidence of DHSA approval is obtained, electronic approval can be made in MMARS, and filed for records management, Quality Assurance and audit. purposes.
  • Department Head Signature Authorization and MMARS Security - Plan
    • We will be working with Departments to ensure that MMARS Security is aligned with Department’s intent for DHSA
    • We also plan to provide additional guidance on how to set up DHSA and MMARS Security to support Department business needs and maintain Internal Controls
    • We will be contacting Departments with “Shared Processing” models to identify and work through any issues or concerns
  • Customer Service Comments and Questions
    • We value your comments and feedback
    • Please send comments about this Webcast or questions for the Standard Contract Form or related policies to:
    • [email_address]