AGENCY CONTRACT MANAGEMENT CERTIFICATION TRAINING February 2010 1
Welcome & Introductions n Name, Program Area I am in this class because …. n The best job I ever had was …. n The worst project I ever worked on was …. n 2
TRAINING SCHEDULE n Day 1 – – – – Procurement and Contract Tracking System (PACTS) Procurement Methods Role of the Information Technology Office Role of Financial Services Doing Business with Minority Business Enterprises Role of the General Counsel’s Office How to Write Contracts 3
TRAINING SCHEDULE CONTINUED……. n Day 1 (continued) – Contract Review Process – Developing and Processing Contracts, Amendments Renewals and Extensions – Managing Contract Files – Programmatic & Contract Monitoring n Day 2 – “Contract Management in Florida” presented by Walter Sachs, DCF Staff Director, Contract Administration Perform Examination Review 4
Organizational Chart Cynthia R. Lorenzo Director Kevin Thompson, Director of Agency Support Services Robert Monroe General Services Officer Bridgett Jackson General Services Specialist Laura Jennings General Services Purchasing Manager Eleanor “Fran” Shewan Purchasing Supervisor Christina Harrell Purchasing Analyst – Contract Administration /CMBE Coordinator Sonja Stokes Purchasing Specialist 5
Guiding Principles and Responsibilities Legality and Ethics n Effective Services n Efficiency n Economy n Fairness & Open Competition n Diversity n 6
Authority n Authority – Chapter 287, Florida Statutes – Chapter 60 A-1, Florida Administrative Code n Other Related References – AWI Purchasing Policy, 4. 02 – “Purchasing and Contracting Procedures Manual” – DMS State Purchasing Memorandums – Department of Financial Services » » » Reference Guide for State Expenditures CFO Memorandums Agency Addressed Memorandums – Federal Regulations 7
s. 287. 001, F. S. - Legislative Intent n Ensure the following: – – – – Fair and open competition Reduce the appearance and opportunity for favoritism Inspire Public Confidence Awarded Equitably and Economically Effective Monitoring Mechanisms Uniform procedures are followed Detailed Justification of the Agency Decisions Ethical Behavior 8
PROCUREMENT AND CONTRACT TRACKING SYSTEM (PACTS) OVERVIEW Laura I. Jennings Purchasing Manager Agency for Workforce Innovation 9
PACTS n WHY WAS IT CREATED: – The PACTS database was created to track: » the process of administering a contract from the initial stages of identifying the program area need » through the procurement of a provider to deliver those commodities or contractual services, » track the routing of contract documents through the agency review process, and » to document the contract history (start/end dates, increases/decreased, amendments, renewals, and extensions) 10
Purpose of PACTS n n n To assist the Agency in complying with applicable state and federal laws, rules and regulations. To provide a resource to the Agency for proactively manage and track the history of Agency two-party contracts. Program Areas have view access for tracking expiration dates http: //intra. awi. state. fl. us/pacts/ 11
METHODS OF PROCUREMENT Laura I. Jennings Purchasing Manager Agency for Workforce Innovation 12
Types of Procurement n Three Main Types – Small Purchases » Discretionary n < $2, 500 – Requires only one (1) quote » Informal n n $2, 500 - $14, 999. 99 – Requires two (2) or more quotes >$15, 000 - $24, 999. 99 – Requires three (3) written quotes – Non-Competitive » » » Emergency Purchases DMS Authorized Agreements (STC, ACS & SPA) Single Source Exempt Continuing Education PRIDE and RESPECT – Competitive Solicitations >$25, 000 » Invitation to Bid » Request for Proposal » Invitation to Negotiate 13
Procurement Cycle n n n n n Identified Need Specification Development Determine Method of Procurement Obtain Quotes or Conduct Formal Solicitation Agency Selection & Award Contract Development (MFMP DO or Two-Party) Delivery of Services Invoice and Payment Monitoring Contract Performance Contract Closeout 14
Internal and External Requirements n Internal – – – – Cost Price Analysis Vendor vs Subrecipient Conflict of Interest IRA OCO Facility Services Routing Process n External – DMS CSA Telecommunication Single Source >$150, 000 – DFS – Council of Efficient Government – TRW 15
Invitation to Bid – ITB n n Commodity or service is easily identified; Bidders offer pricing based on set requirements (i. e. , manufacturer, model, size, color, etc. ); Bidder qualifications and commodity/service will be compared to the requirements of the ITB, but not to each other; Award will be made to the responsive and responsible bidder offering the lowest price. 16
Request for Proposal - RFP n n n Written determination why ITB is not practicable, to be approved. Defined scope of work with multiple solutions. The vendor qualifications, experience and quality of service are more important than price. Proposals will be compared to each other. Award to Respondent that receives the highest total points for technical and cost. 17
Invitation to Negotiate - ITN ■ Scope of Work cannot be completely and accurately defined. n Two Step process 1. Evaluation Scoring/Ranking Highest to Lowest a. Shortlisted Vendors Move Forward 2. Negotiation Phase a. Negotiations are conducted to level the playing field b. Responses are compared to each other c. Qualifications and quality of service may be considered more important than price d. Vendor is selected on “Best Value” 18
INFORMATION TECHNOLOGY’S ROLE IN PROCUREMENT AND CONTRACT MANAGEMENT Parker Cape IT Contract Manager Agency for Workforce Innovation 19
Objectives n Discussion of Five Topics: – Definition of Information Technology – Information Resource Authorizations (IRA) – Security Considerations – Early Involvement – Contract Review Process 20
Information Technology Definition n s. 282. 0041(16), F. S. , means “Information Technology” equipment, hardware, software, firmware, programs, systems, networks, infrastructure, media, and related material used to automatically, electronically, and wirelessly collect, receive, analyze, evaluate, process, classify, manipulate, manage, assimilate, control, communicate, exchange, convert, converge, interface, switch, or disseminate information of any kind or form. 21
Information Technology Definition continued…. n Equipment – – – n Server/Terminal/Thin Client Storage/Tape/Virtual Tape UPS/Surge Suppression/Batteries Firewalls/Infrastructure Equipment/VPN Desktop/Laptops Software – Licenses/renewals/maintenance n Services – IT Consulting/Staff Augmentation – Data Circuits 22
Information Resource Authorization (IRA) n n What is an IRA? An IRA is a request for acquisition of information technology or services, including those procured through a contract. Why an IRA? It is the responsibility of the Information Technology Unit to ensure that AWI is procuring information technology (hardware, software, services, etc. ) that can integrate and interconnect with our existing IT systems and services and is consistent with AWI policies and Florida Statutes. 23
Information Resource Authorization (IRA) continued…. A completed IRA Form must accompany all IT related acquisitions. n It is required via the Agency’s Information Technology Purchasing Policy 5. 01. (Revision Pending) n http: //www. floridajobs. org/Policies/IT/itequip_%20 purch_repairpolicy 5. 01. pdf 24
Security Considerations Information System Security Plan (ISSP) Policy 5. 02 ■ Know Confidentiality Rules – Adopted 11/06 – http: //intra. awi. state. fl. us/info_sec/index. htm n Security is EVERYONE’s responsibility! Build security in from the beginning ■ Contract and bid language should contain security requirements ■ Positions of Special Trust 1. 08 − Reaffirmed 2/09 − http: //www. floridajobs. org/policies/Director/Policy%201. 08%20 Special_Trust_Positions. pdf ■ Always evaluate the risk of your decisions! 25
Early Involvement n In any contract acquisition involving technology, bring IT into the process with you…. . the earlier the better! – All new projects require a project definition form to be submitted to your IT Application Manager » » n Carlton Bassett – Workforce Services Patrick Greene – Administration Jill Conley – Office of Early Learning Allen Northrup – Unemployment Compensation Things to consider – – – Long term, recurring cost of IT support staff (5 to 10 Years) Licensing fees and renewals Mandatory upgrades (hardware and software) Total cost of ownership Existing Agency infrastructure Warranty period 26
IRA Submission Process 27
FINANCIAL SERVICES ROLE IN PROCUREMENT AND CONTRACT MANAGEMENT Alisa Roberson Disbursements Supervisor Agency for Workforce Innovation 28
The Disbursement Unit’s Role n n n n Set up of the Contract number in FLAIR Entry of the Encumbrance in FLAIR so spending and budget can be tracked and verified by the program offices In accordance with CFO Memorandum #1 (2007 -08) all contracts require DFS review prior to the initial payment request http: //myfloridacfo. com/aadir/cm 070801. pdf Submission of contracts to the Department of Financial Services (DFS) for a pre-audit 10 days prior to the first request for payment being made Review of all payment requests to ensure compliance with terms of contract, all applicable regulations and to request payment through DFS Maintenance of the original documentation of payments made through FLAIR (NOT those originating in MFMP) Mail-out of warrants issued to the vendor/contractor 29
What F&A Needs From Contract Managers n For all contracts: – A copy of the completed, signed contract when executed – The contract number referenced on any and all correspondence about your contract – A signed and dated Contract Summary Form accompanying a signed and dated invoice http: //www. fldfs. com/aadir/summary_csa. htm – Any accounting code changes (grant, org, etc. ) or any warrant mailing/handling instructions at the time of invoice processing – Documentation to support the invoice » » A detail of the charges, if summarized on the invoice Reviewed to ensure it matches the contractual rates/fee 30
What F&A Needs from Contract Managers (Continued) n For contracts entered into MFMP: – The contract number included on the Requisition at time of creation – Reference to the contract number on the Invoice Reconciliation (IR) if it’s not “chosen” at the time of requisition – All documents (contract, attachments, etc. ) scanned and attached to the Requisition – The Contract Summary Form scanned and attached on all IRs – Additional supporting documentation scanned and attached to the IR, as requested by DFS, especially if not on the original Requisition 31
How Contract Managers Can Help Themselves n n n Track all disbursements to ensure adequate contract balance and accurate encumbrances Enter MFMP Change Orders for any permanent changes in accounting codes Communicate with your Grant Manager and Budget Analyst frequently Follow-up with vendors to ensure invoices are received timely Review the encumbrance report provided by F&A to ensure accuracy 32
DOING BUSINESS WITH MINORITY BUSINESS ENTERPRISES Christina Harrell Contract Administrator Agency for Workforce Innovation 33
Minority Requirement n When contracting the first thought should be “Is there a minority business that can provide the goods or services that I’m about to purchase? ” 34
What is a Certified Minority? n Business that has been certified through the Department of Management Services, Office of Supplier Diversity, as a certified minority business enterprise for the purposes of doing business with the state. n What is a Minority Business? – Businesses owned by: » » » H -African American I - Hispanic American J - Asian/Hawaiian American K - Native American M - American Woman W – Service Disabled Veteran – Must be domiciled in FL to be eligible to become a Certified Minority Business Enterprise. 35
How Do I Find a Minority Company? n Certified Minority Vendor On-Line Directory – https: //vendorstrator. dms. myflorida. com/directory Contact Purchasing for Assistance n Attend the AWI Purchasing & CMBE Monthly Meeting held on the 4 th Wednesday in Room B-49 n 36
Sample Purchasing Types Where Minority Vendors May Be Utilized Contracting/Subcontracting n Advertising n Printing n Office Furniture n Travel n 37
How Do I Report My Minority Subcontracting Dollars? n The CMBE Subcontractor Expenditure Report is to be utilized by the Contract Manager as a reporting mechanism for all subcontractor dollars. http: //www. floridajobs. org/generalservices/Certified%20 Minority%20 Business%20 Sub. Contractor%20 Expenditure%20 Report%20 Form. xls n This form is to be submitted to the MBE Coordinator for the Agency (Christina Harrell) via e-mail to: christina. harrell@flaawi. com no later than the 5 th of each month. 38
How Can I Exceed Last Year’s Minority Expenditures Monitor Monthly Reports in FLAIR/FIS. n Ensure STC purchases are completed with a Certified MBE Authorized Reseller, if applicable. n Ensure your office is using a CMBE Travel Agent vs. going direct. n Submit monthly adjustments to the CMBE Coordinator to receive proper credit for miscoded expenditures. n Contact Purchasing for Assistance. 39 n
Agency Minority Reporting 90 Day Spending Plans n Quarterly 3 rd Tier Adjustments – WFI, RWBs and ELCs n Monthly Agency Contractor/Subcontracting 2 nd Tier Adjustments n Annual Small Business Participation Plan n 40
LEGAL’S ROLE IN PROCUREMENT AND CONTRACT ADMINISTRATION Mike Marschall, Attorney General Counsel Agency for Workforce Innovation 245 -7155 41
AWI OFFICE OF GENERAL COUNSEL (OGC) Contacts: n Rosa Mc. Naughton, General Counsel All areas; 245 -7150 n Jim Landsberg, Deputy General Counsel All areas & Workforce Services; 245 -7156 n John Perry, Assistant General Counsel UC Services; 245 -7152 n Kristin Harden, Assistant General Counsel Early Learning; 245 -7161 42
WHAT IS A CONTRACT? “An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable as law. ” Black’s Law Dictionary. 43
WHAT IS A CONTRACT? (continued) » Agreement and obligations – means a set of promises exchanged between the parties. » Enforceable – means that if a party fails to do what they promised to do (breach), a court of law will enter an order to remedy the breach, i. e. , make the offended party whole. 44
WHAT IS A CONTRACT? (continued) For a contract to be enforceable, the parties must have reached a meeting of the minds, or in other words, agree on the same terms, conditions, and subject matter. Therefore, contracts must be clearly written and must clearly communicate the terms and conditions, i. e. , obligations; promises. The terms, conditions, and obligations must be consistent throughout the document or an explanation given as to why they are not and which controls (i. e. , order of precedence list). 45
WHAT IS A CONTRACT? (continued) Contracts also include: » Grants. » Direct orders (formerly known as purchase orders). 46
WHAT IS A CONTRACT? (continued) Each Contract is Unique » The results of legal review of one contract do not automatically translate to another contract – even the same contract year to year. » What applies in one situation does not necessarily mean that the same will apply in another situation. » Each contract must be written with the circumstances of the specific procurement in mind and tailored to that situation. 47
THE ROLE OF THE OGC IN THE PROCUREMENT/CONTRACT PROCESS » To provide legal advice when questions arise during the procurement or contract process. Purchasing and program areas are encouraged to contact the OGC early in the process when questions arise, but may contact the OGC at any time during the process. 48
THE ROLE OF THE OGC IN THE PROCUREMENT/CONTRACT PROCESS (continued) » To review procurement actions for legal sufficiency. For example, the OGC will review: ITBs, RFPs, RFQs, ITNs, SSs » To review contracts for legal sufficiency. 49
THE ROLE OF THE OGC IN THE PROCUREMENT/CONTRACT PROCESS (continued) Legal Review Includes: » Determination that the procurement document or contract contains provisions required by federal and state law. » Determination that the contract is legally sound, legally enforceable, and legally defensible in order to protect the interests of the Agency and reduce risk to the Agency. 50
THE ROLE OF THE OGC IN THE PROCUREMENT/CONTRACT PROCESS (continued) The OGC does not make determinations or decisions regarding certain areas but may question or make recommendations regarding the following: » » » » A determination as to whether the purchase is the best buy. How long the term of the contract should be. Deliverables or the schedule for their delivery. Cost Price analysis. What a program area needs, what best suits the program needs. When invoices should be submitted or detail of invoices. While grammatical and typographical errors may be caught, this is not a primary purpose of legal review. Purchasing and program areas are responsible for proofing their own documents. 51
Agency Contracts Components of the Agency Contract: » The Agency Core; » The Scope of Work (Attachment 1 to the Core) written by the program area; and » Other Attachments as required or needed. 52
Agency Core Contract » » » The standard core contract developed by the Agency for use in procurements requiring a two party contract. Developed by the OGC, and may be downloaded from the Purchasing intranet site. The core contract is a template containing standard, general contract provisions that are required in most contracts. (Any provisions not applicable or changed should be done through the Scope of Work. ) The core contract is a protected template with fields to be filled in as appropriate. 53
Agency Core Contract (continued) 3 Versions of the Agency Core Contract » Vendor Core Contract (11/18/09) » Sub-Recipient Procured (11/06/09) » Sub-Recipient Exempt Procured (11/06/09) Most recent version date is located in the lower left hand corner of core contract; always use most recent version. 54
Agency Core Contracts Determining Vendor vs. Sub-recipient Relationship » To determine which core to use, you must first determine if there is a vendor or sub-recipient relationship. » Federally Funded Projects: Utilize Agency Vendor vs. Sub-recipient check list – available on the Purchasing intranet webpage. 55
Agency Core Contracts (continued) Determining Vendor vs. Sub-recipient Relationship (continued) Federally Funded Projects (continued) Vendor Indicators » » » Provides the goods and services within normal business operations. Provides similar goods or services to many different purchasers. Operates in a competitive environment. Provides goods and services that may be ancillary to the operation of a program. Is not subject to the Federal compliance requirements of the federal program. (Source: 29 C. F. R. 99. 210 (c) (1)-(5)) 56
Agency Core Contracts (continued) Determining Vendor vs. Sub-recipient Relationship Federally Funded Projects (continued) Sub-recipient Indicators » » » Determines eligibility. Has its performance measured against the objectives of the program. Has responsibility for programmatic decision-making. Has responsibility for adherence to applicable federal program compliance requirements (for example, regulations). Uses funds to carry out a program of the organization as opposed to providing goods or services for a program. (Source: 29 C. F. R. 99. 210 (b) (1)-(5)) 57
Agency Core Contracts (continued) Determining Vendor vs. Sub-recipient Relationship (continued) State Funded Projects: » Must use Department of Financial Services Florida Single Audit Act Checklist, Form # DFS-A 2 -NS, July 2005. » Use of this form is required by Rule 69 I-5. 006, Florida Administrative Code. 58
Agency Core Contracts (continued) Determining Vendor vs. Sub-recipient Relationship (continued) Once the vendor vs. sub-recipient relationship has been identified, use the appropriate Agency Core Contract, i. e. , Vendor Core, Sub-recipient Procured Core, or Sub-recipient Exempt Procured Core. 59
Agency Core Contracts (continued) Vendor Core Contract » » To be used when: - There is a vendor relationship. For example, Contractor is providing 100, 000 widgets. Requires use of: - Attachment 1 (Scope of Work); - Attachment 2 (Certifications); and - ARRA Supplemental Provision (if applicable). 60
Agency Core Contracts (continued) Sub-Recipient Procured » To be used when: – There is a sub-recipient relationship. For example, the contractor is running a program, determining eligibility, enrolling students; and – The purchase was procured. For example, an RFP was used to obtain proposals from several entities. » Requires the following attachments: – Attachment 1, “Scope of Work” – Attachment 2, “Certifications” – Attachment 3, “Assurances” – Attachment 4, “Audit Requirements” – ARRA Special Conditions, if applicable 61
Agency Core Contracts (continued) Sub-Recipient Exempt-Procured » To be used when: – There is a sub-recipient relationship; and – The purchase was exempt from procurement requirements. For example, when the contractor is statutorily exempt, such as a university that is a sub-recipient. » Requires the following attachments: – Attachment 1, “Scope of Work” – Attachment 2, “Certifications” – Attachment 3, “Assurances” and – Attachment 4, “Audit Requirements” – ARRA Special Conditions, if applicable NOTE: Attachment 1, Scope of Work, does not include the language incorporating the solicitation documents. This is because there will be no solicitation documents because there was no procurement. 62
Agency Core Contracts (continued) Core Contract Template Fields 1. Contract # - provided by purchasing. 2. Contractor Name – insert. 3. Type of Contract – drop down menu with following options: fixed price, fixed rate, cost reimbursement, fixed price/cost reimbursement, and fixed unit price. 63
Agency Core Contracts (continued) Core Contract Template Fields (continued) 4. Begin date of contract – insert month, day, year. 5. End date of contract – insert month, day and year. 6. Contract amount – insert. 64
Agency Core Contracts (continued) Core Contract Template Fields (continued) 7. Contract Renewal Term – insert (must be 1 of the following: (a) for a period not to exceed 1 year; (b) for a period not to exceed 2 years; (c) for a period not to exceed 3 years; (d) for a period not to exceed the original term of the Contract; or (e) may not be renewed. This provision should also explain how the contract may be renewed, e. g. , for 3 one year terms. 65
Agency Core Contracts (continued) Core Contract Template Fields (continued) 8. Payee & Contract Manager contact information – insert. 9. Total number of pages – insert with total number of pages including attachments. 10. Signatory information – insert. 66
Agency Core Contracts (continued) Core Contract Template Fields (continued) 11. Contractor Federal Employer Identification Number – insert. 12. Reference to solicitation document – insert appropriate ITB, RFP, RFQ, or SS #. 13. Scope of Work – insert tailored scope of work. 67
Agency Core Contracts (continued) Scope of Work Attachment 1 to core contract. Prepared by the program area. Contents may include but are not limited to: Deliverables The manner in which deliverables are to be provided Location where work is to be performed Timeline Performance Measures Reporting/Monitoring requirements Method of Payment Liquidated Damages Special provisions How to draft a scope of work and the required contents will be presented later. 68
Agency Core Contracts (continued) Other Attachments » Certifications (Attachment 2) – Required for all contracts Debarment and Suspension Lobbying Drug Free Workplace Nondiscrimination & Equal Opportunity Certification Regarding Public Entity Crimes 69
Agency Core Contracts (continued) Other Attachments (continued) » Assurances (Attachment 3) – Required for all sub-recipients. – Federal law requires that the sub-recipient give assurances that it will comply with certain federal laws. These include laws against discrimination, laws limiting political activities when the contract is funded with federal money, safety standards, fair labor standards, environmental laws, and compliance with controlling OMB Circulars regarding audits. 70
Agency Core Contracts (continued) Other Attachments (continued) » Audit Requirements (Attachment 4) – Required for all sub-recipients – Details audit requirements for federally and state funded contracts. – Details Certain Financial Reporting Requirements 71
Subcontracting by the Contractor » Allowed only with prior approval of the agency. » Anticipated subcontract agreements known at the time of proposal submission and the amount of the subcontract must be identified in the proposal. If a subcontract has been identified at the time of proposal submission, a copy of the proposed subcontract must be submitted to the agency. » No subcontract that the contractor enters into with respect to performance under the contract shall in any way relieve the contractor of any responsibility for performance of its contract responsibilities with the agency. » The agency reserves the right to request and review information in conjunction with its determination regarding a subcontract request. » The use of minority subcontractors is strongly encouraged. (See 72 Minority Subcontract Report Form Attached).
CONDUCT » Integrity and public confidence in a competitive procurement process is essential, and » As a state employee involved in the procurement process, you must maintain complete independence and impartiality in dealings with vendors, both in fact and appearance. 73
CONDUCT (continued) Always remember to follow statutes and regulations regarding ethics in procurement. For example, » Section 112. 313(2), F. S. , Solicitation or acceptance of gifts. » Section 112. 313(3), F. S. , Doing business with one’s agency. » Section 112. 313(4) F. S. , Unauthorized compensation. » Section 112. 313(6) F. S. , Misuse of public position. » Section 112. 313(7), F. S. , Conflicting employment or contractual relationship. » Section 112. 313(8), F. S. , Disclosure or Use of Certain Information. 74
CONDUCT (continued) Section 112. 3148, F. S. , Prohibiting: » a procurement employee for the state from soliciting any gift from a political committee, committee of continuous existence, lobbyist who has lobbied his or her agency within the past 12 months, or the partner, firm, employer, or principal of such a lobbyist; » a procurement employee for the state from knowingly accepting, directly or indirectly, a gift worth over $100. 00 from such a lobbyist, from a partner, firm employer, or principal of the lobbyist, or from a political committee or committee of continuous existence. 112. 3149: Prohibits a procurement employee for the state from soliciting an honorarium which is related to his or her public office or duties; and » a procurement employee for the state from knowingly accepting an honorarium from a political committee, committee of continuous existence, lobbyist who has lobbied the person’s agency within the past 12 months, or the partner, firm, employer, or principal of such a lobbyist. 75
CONDUCT (continued) » Make decisions based upon the law and the best interests of the agency and the public. » Disregard personal relationships and preferences, and avoid personal gain. » Act in ways you would be comfortable seeing in the press, discussing with your family, and defending before a judge. 76
CONCLUSION When in doubt… contact the Office of General Counsel at 245 -7150 77
WRITING THE CONTRACT Laura I. Jennings Purchasing Manager 78
Contractual Services n s. 287. 058(4), F. S. – states that every procurement of contractual services in excess of Category Two ($25, 000) threshold shall be evidenced by a written agreement or purchase order – Internal Agency Threshold n n $25, 000 but <$50, 000 requires MFMP Direct Order >$50, 000 requires a Two-Party Written Agreement – One exception – State Term Contracts Note: Agencies are allowed to use the PCard for contractual services direct billings that do not exceed $75, 000 in a State fiscal year 79
WRITING THE CONTRACT Basic Core Contract Layout n Attachment 1 Recommended Format for the Statement of Work. n Include Performance Specifications. n – Measures – Definition – Measurement Methodology n Include Method of Payment 80
Attachment 1 (Statement of Work) n Services to be Provided (What) n Manner of Service Provision (How) n Method of Payment (How and When) n Special Provisions (Any additional clauses that were not previously addressed in the core contract, solicitation or Attachment 1) 81
A. Services to be Provided 1 Definition of Terms a) Contract Terms b) Program or Service Specific Terms 2 General Description a) b) c) d) General Statement Authority Scope of Service Major Program Goals 3 Service Recipients a) b) c) d) General Description Recipient Eligibility Recipient Determination Contract Limits 82
B. Manner of Service Provision 1) Service Tasks 2) Staffing Requirements a) b) c) d) Staffing Levels Professional Qualifications Staffing Changes Subcontractors 3) Service Location & Equipment a) Service Delivery Location b) Service Times c) Change in Location and Times d) Equipment 83
B. Manner of Service Provisions Continued…. 4) Deliverables a) Service Unit b) Reports c) Records and Documentation 5) Performance Specifications a) Outcomes and Outputs/Accountability - Outcomes: i. e. , reductions in adverse conditions, scores, etc. Outputs: i. e. , specific number of activities that need to be completed. b) Standards Definitions c) Monitoring and Evaluation Methodology d) Performance Definitions 84
B. Manner of Service Provisions Continued…. 6. Provider Responsibilities a) Provider Unique Activities b) Coordination with Other Providers and/or Entities 7. Agency Responsibilities a) Agency Obligations b) Agency Determinations 85
CONTRACT DEVELOPMENT AND REVIEW PROCESS Laura Jennings Purchasing Manager Agency for Workforce Innovation 86
Contract Development n Section Two, Part I of the Purchasing and Contracting Procedures Manual – Contract Development Process » Basic Core Contract » Scope of Work » Certifications » Other Attachments – Types of Contracts – Contract Review, Approvals, Execution, Distribution and File Set Up 87
Review & Approval Process n s. 287. 057 (19), F. S. – Contractual Services >$50, 000 – Each agency shall establish a review and approval process for all contractual services contracts costing more than the threshold amount provided for in s. 287. 017 for Category Three which shall include but not be limited to: n Program n Financial, and n Legal review and approval. Such review and approvals shall be obtained before the contract is executed. 88
Contract Routing Review Process Program Area n Purchasing Manager n IT Manager, if applicable n Grant Manager n Budget Manager n General Counsel n Executive Management Level Authority n 89
AMENDMENTS, RENEWALS AND EXTENSIONS 90
Contract Amendments n There are two types of contract amendments: – Those that result in a Minor Revision » A technical change that does not alter the contract objectives n Examples – Misspelled words – Word omissions – Transposed numbers – Those that result in a Major Revision » A major revision is a substantive change to the contract. n Example – Budget Modification – New Clause – Change in timeframes for completing objectives 91
Processing a Minor Revision Make a pen and ink change to the contract. n All signers on the original contract must initial and date each change. n Never “white out” or scratch out” text; simply draw a single line through the text. The original language must be legible. n 92
Processing a Major Revision n Requires a Contract Amendment. – An amendment is a document which makes substantive changes to any part of an executed contract. A request to amend a contract may be initiated by either the Agency or the contractor. For example…. » Method of Payment » Time period of the contract » Cost of Services » Services to be delivered. 93
Development of an Amendment n Meet with the contractor to discuss any proposed changes – If the contractor initiated the request, please have them submit the request in writing. – Determine why the contract needs to be changed; changes should only be made when there is sufficient justification for doing so. – Assess the implications of the proposed change on the delivery of services, service units, cost of services, the ability of the contractor to render quality services, and the effect the change will have on the clients served by the contractor. 94
Developing an Amendment Continued…. Conduct a cost/price analysis to justify changes in contract amount. n Draft an amendment based upon amendment format. n 95
Amendment Review Process n Amendments must go through the same review process as contracts. – – – n Complete the Contract Review Form. Attach draft copy of amendment for review and approval. Attach copy of previously executed amendments and a copy of the executed original contract. Remember: – – An amendment may not be retroactive. Expired contracts may not be amended. Amendments must be executed prior to the effective date. Amendments are to be signed by original contract signers. 96
RENEWALS 97
Contract Renewals n s. 287. 057(14)(a), F. S. , states: – Contingent upon satisfactory performance evaluation – Subject to the availability of funds. ” n s. 60 A-1. 048(b), F. A. C. , states: – Justification that the renewal is in the best interest of the State – Maintain a copy of the justification in the contract file – Contingent upon satisfactory performance evaluation – Authorized by mutual agreement in writing n Purchasing and Contracting Procedures Manual – Page 86 incorporates the requirements listed above 98
Renewal Performance Evaluation n See revised Renewal Template, dated 4/18/09 http: //www. floridajobs. org/forms/Renewal_Boilerplate. doc 99
Contract Renewals n n Contracts for commodities or contractual services may be renewed on a yearly basis for a period up to 3 years after the original contract, or for a period no longer than the term of the original contract, whichever is longer. Renewal language must be included in the original contract (and bid/proposal/reply) Renewal is subject to same terms and conditions of the original contract. Renewal must be executed before the expiration date of the contract. 100
Renewal Exceptions n A Renewal may not be processed for the following contracts: – Contracts resulting from an emergency procurement. – Single Source procurement contracts. – Contracts procured competitively if the costs of contemplated renewals was not included in the initial ITB, RFP or ITN. 101
Processing a Renewal n n Complete, sign and date the Contract Routing Review Sheet. Do not change contract start date, only update the ending date. Attach draft copy of renewal amendment and renewal performance evaluation to a copy of the fully executed contract, along with a copy of the vendor vs. sub-recipient checklist, and any previous amendments/renewals and forward to Purchasing (Contract Administrator) for agency review and approval. REMEMBER: Renewals must be executed prior to the expiration date of the original contract. 102
EXTENSIONS 103
Contract Extensions An extension is an increase in the length of the contract time period. It is processed by preparing an amendment. n An extension does not allow for an expansion of the scope of services. n 104
Reasons for Extending a Contract The Agency or the Contractor under estimated the time necessary to complete the contract. n Arrival of a crucial piece of equipment needed to complete a task is delayed. n Legitimate delay in contract start-up date results in unmet contract objectives and funds not being fully expended by the contract expiration date. n 105
Conditions of Contract Extensions n n Amendment for extension must be executed before the contract expires. Extension period shall not exceed six months. Extended contract subject to same terms and conditions of initial contract. Extension granted only once, unless failure to meet the criteria set forth in the contract for completion of the contract is due to events beyond the control of the contractor. 106
CONTRACT MANAGEMENT Laura Jennings Purchasing Manager Agency for Workforce Innovation 107
Who is a Contract Manager? n Chapter 287. 057(15), F. S. , provides that “For each contractual services contract, the Agency shall designate an employee to function as a contract manager who shall be responsible for negotiating, administering, monitoring and enforcing the terms and conditions”. 108
Roles and Responsibilities n n n n n Enforcing the terms and conditions of the contract. Carrying out the preparations for contracting. Developing the Scope of Work (SOW). Developing evaluation tools for bid analysis. Negotiating contract, amendments, etc. . Reviewing and approving invoices. Monitoring provider’s performance and corrective action plans, as necessary. Maintains a comprehensive Contract Manager File. Performing contract close out procedures. 109
Monitoring Responsibilities Compliance with Terms and Conditions, n Getting what we pay for, n Track fiscal responsibilities (are funds being used appropriately), n Detect non-compliance, problem resolution, n Corrective Action Plans, and follow-up, n Acceptable level of services is being provided n 110
Monitoring Plan n n Every Contract Manager is required to establish a written Contract Monitoring Plan, and it requires their Supervisor’s review and approval Written Plan should include the following: – Periodic Reporting – Contract Deliverables by On-site Reviews and Observations » Develop a checklist when deliverables are due (i. e. , insurance certificates) » Minimum annual review – – – Client Surveys Other periodic contact and on-going monitoring Review of Audit Report Review and approval of invoice payments Signed Statement of Independence 111
Contract Closeout Process Begin 60 days prior to contract expiration. n Documents Success or Failure. n Reference point for future procurements. n Complete the AWI Contract Manager’s Contract Closeout Guide check list. n http: //www. floridajobs. org/forms/AWI_Contract_Closeout_Guide. doc 112
What is the Contract Manager File? A tool used by the Contract Manager to keep pertinent information related to a contract in a logical and coherent manner. n The files are maintained for a period of 6 years following contract closeout or resolution of pending action. n 113
Purpose of Contract Manager’s File n n State law requires that a file be maintained for every contract. Ensure that documentation exists to protect the agency, as well as, to clarify events, should a protest, audit or other situation arise. Provides pertinent information related to a contract. Provides required documentation on decisions and events related to the contract. 114
Contract Manager’s File n Consists of two sub-files: – The procurement file: The procurement file contains all documentation and information regarding the providers selection process before the contract is executed. – The contract file contains all pertinent information related to a contract from the time it is awarded until contract closeout. – General Services keeps the AGENCY CONTRACT ADMINISTRATOR’S originals. However, each Contract Manager should also maintain copies for their records. 115
Contract Manager’s File should be neat, complete and organized. The following table is a DFS example in a multi-leaf file folder organized into six main sections and the respective, relevant contents. # Section Title Contents 1 Contract Record Quick reference info (provider name, address, phone, email); contact sheet detailing agreement history (meeting notes, phone contact documentation); calendar showing all reporting dates, payment dates, renewal dates, deliverables schedules. 2 Authoritative Original agreement & amendments; Single Audit Act documentation; Florida Statutes, Florida Administrative Code, department rules, appropriation language; subcontracts/subgrants and associated ITB/RFP/ITN document; provider certifications. 3 Payment History Spreadsheet with running payment balance, warrant copies, voucher copies. 4 Payment Request Invoices, deliverables schedule, deliverables documentation. 5 Verification Site visit documentation, independent documentation supporting deliverables, expense validation, audit reports & findings resolution, reconciliation of audit report expenses versus invoiced expenses, client surveys. 6 Correspondence All correspondence documentation – letters, email copies, vendor-related media copies, etc. 116
Resources n n n Florida Statutes Florida Administrative Code AWI Agency Addressed Memoranda DMS State Purchasing Memoranda DFS Reference Guide to State Expenditures DFS CFO Memoranda DFS Best Practices for Contract and Grant Management OMB Circulars My. Florida. Market. Place Tool Kit Internet AWI Intranet Contract Monitoring Tool 117
PROGRAMMATIC MONITORING John Herndon Unemployment Compensation Services 118
Monitoring Overview The Need for Monitoring n Types of Monitoring n Elements of Monitoring n Monitoring Methods and Tools n Programmatic Monitoring n Contract Monitoring n 119
The Need for Monitoring n n Monitoring—what is it? An objective, on-going and reasonable evaluation that occurs throughout the contract period to ensure compliance with applicable laws, rules, regulations, policies, and contractual provisions. Why monitor? – It is required. – Ensures contractor’s compliance with the terms and conditions of the contract and applicable laws, rules, and regulations. – Ensures Program area is getting what it needs and is only paying for what it contracted for. – Enables early detection/prevention of non-compliance by identifying and resolving potential problems through constructive, timely feedback. – Ensures necessary, timely, and appropriate corrective actions are taken. – Ensures fiscal responsibilities--costs are allowable, allocable and documented. 120
Types of Monitoring n Programmatic Monitoring – Evaluates the contractor’s performance in meeting program areas’ contract scope of work. – Evaluates contractor performance quality. – Establishes historical data for potential future contracts with the Contractor. n Contract Monitoring – Ensures Agency compliance with federal and state requirements. – Provides Agency oversight and ensures best practices, concerns and problems are shared throughout the Agency. – Verifies payments are within the limits of the contract. 121
Elements of Monitoring n n n Maintaining well documented, current contracting files. Identifying, reviewing, and analyzing Contractor reports. Tracking project milestones and timelines, contractor performance, and costs. Reviewing, approving, processing, and tracking invoices. Reconciling invoice payments. Monitoring Plans: A formalized means of defining appropriate and specific monitoring methods. Determined by the type of contract, level of risk, amount of award, complexity of program, etc. – Tailor monitoring plans and activities to the particulars of each contract. n Documentation! 122
Monitoring Methods and Tools n Determine monitoring methods and tools. – May be impacted by the type of contract or funding and may include documentation, observations, surveys, interviews, tests, etc. – Determine the nature, timing and extent of monitoring. » Program complexity: Complex programs have a higher risk of non-compliance and require more rigorous monitoring. » Vendor/Sub-Recipient Risk: Prior history, personnel changes, new systems and the status of the contract relationship impacts the level and frequency of monitoring. » Amount of Contract Award: The larger the contract award, the greater the risk and need for more rigorous monitoring. – Identify the tools to be used to measure and assess performance and compliance. 123
Programmatic Monitoring n Programmatic Monitoring deals with contract and program compliance requirements. – Should answer the question “are we getting” what we contracted for? – Includes both primary contractor and any sub-contractors. n n n Evaluates and documents Contractor/sub-contractor performance. May be met by making on-site visits, reviewing contractor documentation, conducting periodic or client reviews, personal observations, conducting tests, reviewing state/agency audits, or any other activities that provides assurances of satisfactory contractor performance and project requirements are met as scheduled. Must be documented. 124
METHODS OF PROGRAMMATIC MONITORING n n Documentation – may be written reports from the contractor, acceptance tests, client surveys, audit reports, invoices, e-mails, letters, and other forms of documentation etc. Observation – includes on-site reviews to the contractors’ location or other locations where the services are being provided to evaluate progress, processes, and documentation first hand. 125
Tips for Effective Programmatic Monitoring n n n n Determine monitoring requirements, methods, tools, etc. . Ideally, this should be done during the RFP and contract development process. Maintain regular, effective contractor dialogue and review contractor performance and progress on a regular basis. When possible, conduct on-site reviews and interview contractor staff to determine their understanding or contractual requirements, review key documentation and observe operations. If applicable, conduct client surveys to determine service delivery quality and satisfaction and require the contractor to resolve complaints. Ensure the contractor complies with the AWI Program standards, regulations and contract provisions. Document monitoring results and ensure that appropriate corrective action is taken for any deficiencies. Follow-up to ensure that deficiencies have been timely and satisfactorily corrected. 126
Summary of Programmatic Monitoring The Contract Manager is responsible for the ongoing management of the contract. n Maintaining a well organized contract managers’ file is a reflection of you. n Effective programmatic monitoring ensures your contracts and the services meet your program’s objectives. n 127
CONTRACT MONITORING Financial Management Systems Assurance Section Henrietta “Penny” Lee (FMSAS) 128
Contract Monitoring n n n n n Why do we have contract monitoring? What information will be reviewed? How do we complete the contract monitoring process? Who will be monitored during FY 09 -10? When will the monitoring take place? Where will the monitoring take place? 08 -09 Observations 08 -09 Overview – Findings. Other Suggested Best Practices. 129
Why do have contract monitoring? n n n AWI is charged by state and federal regulations with oversight of the funds it expends for contracted services. Contract monitoring encompasses administrative and performance standards expected to be met by the Agency’s contractors according to their contracts and applicable federal & state rules, regulations and instructions. AWI’s contract monitoring procedures are subject to audit by state and federal agencies. 130
What information will be Reviewed? Contract/Direct Order n Scope of Work n Invoices and invoice process. n Other file documentation that supports “due diligence” over the contract by AWI staff n Other documentation outside of the contract file. (AWI policy, program rules, federal/state procurement instructions) n 131
How do we complete the contract monitoring process? n n n Entrance Meeting – Meet with program staff Review the contract Ensure the contract and contract file meet the minimum federal, state and AWI’s procedure requirements Ensure the scope of work and deliverables are met based on contract language Review the invoices to ensure they are paid within and according to the terms and conditions of the contract Ensure that expenditures were made in accordance with applicable laws, rules and regulations; were authorized by the agreement; were directly related to the project; and were properly supported 132
How do we complete the contract monitoring process? (Continued) n n n n Identify and summarize testing results and any deficiencies noted Identify and summarize testing results and any best practices found Exit Conference on draft program summary report Additional input from contract managers is required (if needed) to perform any follow-up as we finalize test results Complete the AWI draft report AWI management review and approval of report Send out final approved report to program areas Corrective action plan processing performed, if needed 133
Who will be Monitored FY 09 -10 n n AWI has a Monitoring Plan that assists in the determination which Contracts will are selected to be monitored. Five contracts and four direct orders have been selected for monitoring at this time. – – – n Three full contract monitoring process Two contract monitoring for ARRA only Four Direct Orders processes AWI Management may make changes to this sample list. 134
When will the monitoring take place? Starting March 1, 2010 and completion is targeted by June 30, 2010. n Each Project Manager/Contract Manager will be contacted by e-mail with more information. n 135
Where will monitoring take place? n n n Contract-related data request memos will be sent to the program areas. All testing material will be scheduled and data items will be reviewed by FMSAS staff. Question/Answer sessions are currently underway with Project Managers or Contract Managers. The review process continues from FMSAS office. Summary results are performed from our office. 136
08 -09 Overview – Observations n n n n Missing approval documentation in files Subrecipient vs vendor checklist in the file but incomplete Missing file information Missing deliverable approval from file Inconsistent or incomplete supporting documentation in files Contents of contract file incomplete and/or disorganized See handouts 137
08 -09 Overview – Findings n n AWI could not provide a comprehensive two-party contract listing. An employee was conducting contract manager duties but was not an AWI certified contract manager. AWI’s contract renewal process was not followed as specified in the AWI’s policy and procedures manual. Contract Managers did not conduct the contract close-out procedures. 138
08 -09 Overview – Findings (Con’t) n Contract managers did not document payment reconciliation to FLAIR (state accounting system) in the contract files. 139
Other Suggested Best Practices n n A checklist has been developed to ensure that the contract renewal process has complete minimum agency requirements. A checklist has been developed to determine and document the subrecipient vs vendor relationship for all contracts. Coordinate with other AWI staff as needed to share guidance information, technical assistance or other available reference materials. Continue/expand management training for contract/program staff. 140
American Recovery and Reinvestment Act (stimulus) n Additional/enhanced monitoring will be required in 2009 -10 for grant funds disbursed under the American Recovery and Reinvestment Act. We anticipate additional monitoring requirements will apply. We’re currently waiting on further guidance and instructions from the federal awarding agencies and OMB. We are advising contract managers that have contract with stimulus dollars, have there contract files and all pertinent documentation readily available for monitoring purposes. 141
QUESTION AND ANSWER SESSION 142
Day Two 143
“Contract Management in Florida” presented by Walter Sachs, DCF Staff Director Contract Administration 144
Thank you 145
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