016.14.06 Ark. Code R. 003

Current through Register Vol. 49, No. 10, October, 2024

Rule 016.14.06-003 - Contract Manual for Professional / Consultant Services Contracts and Intra-Agency Agreements

AASIS	Arkansas Administrative Statewide Information System
ABA	Arkansas Building Authority
A.C.A.	Arkansas Code Annotated
ACO	Administrative Compliance Officer
AP	Accounts Payable, Office of Finance and Administration, Department of Health and Human Services
AR	Accounts Receivable, Office of Finance and Administration, Department of Health and Human Services
BAA	Business Associate Agreement
GrO----------	-Contract OfficerCAP Contracting Automation Platform
CAS	Contract Archival SystemGAP------------------Corrective Action Plan
CB	Competitive Bid
GFDA-------	-Catalog of Federal Domestic Assistance
CMU	Contract Management Unit, Contract Support Section, Office of Finance and Administration, Department of Health and Human Services
COUGAR	-Contract and Grant Management, Tracking, and Reporting system
CPO	Certified Procurement Official
CPU	Commodities Purchasing Unit, Contract Support Section, Office of Finance and Administration, Department of Health and Human Services
GRU---------	-Contract Review Unit, Contract Support Section, Office of Finance and Administration, Department of Human Services
CSP	Competitive Sealed Proposal
CSS	Contract Support Section, Office of Finance and Administration, Department of Health and Human Services
CSU	Central Support Unit, Contract Support Section, Office of Finance and Administration, Department of Health and Human Services
DAAS	Division of Aging and Adult Services, Department of Health and Human Services
DBH	Division of Behavioral Health, Department of Health and Human Services
DCCECE	Division of Child Care and Early Childhood Education, Department of Health and Human Services
DCFS	Division of Children and Family Services, Department of Health and Human Services
DCO	Division of County Operations, Department of Health and Human Services
DDS	Division of Developmental Disabilities Services, Department of Health and Human Services
DFA	Department of Finance and Administration
DHHS	Department of Health and Human Services, United States Government
BHS---------	-Department of Human Services
DMS	Division of Medical Services, Department of Health and Human Services
DOH	Division of Health, Department of Health and Human Services
DOV	Division of Volunteerism, Department of Health and Human Services
DSB	Division of Services for the Blind, Department of Health and Human Services
DYS	Division of Youth Services, Department of Health and Human Services
EEO	Equal Employment Opportunity
EOS----------	-Electronic Data Systems
EO	Executive Order
FH-----------	-Federal Early Intervention
FY	Fiscal Year

FOU--------	-----Field Operations Unit, Contract Support Section, Office of Finance and Administration, Department of Human Services
GSA	General Service Administration, United States Government
HIPAA	Health Insurance Portability and Accountability Act
IG	Intergovernmental
IRS	Internal Revenue Service, United States Government
MOA	Methods of Administration
OCC	Office of Chief Counsel, Department of Health and Human Services
OFA	Office of Finance and Administration, Department of Health and Human Services
OSP	Office of State Procurement, Department of Finance and Administration
OST	Office of Systems and Technology, Department of Health and Human Services
PASOS	Provider Audit Sign-off Sheet
PCS	Professional/Consultant Services
PEER	Performance Evaluation and Expenditure Review
PHI	Protected Healthcare Information
PO	Purchase Order
RFP	Request for Proposal
RFQ	Request for Qualifications
RMU	Records Management Unit, Contract Support Section, Office of Finance and Administration, Department of Health and Human Services
SSBG	Social Services Block Grant
TEA--------	-----Transitional Employment Assistance
TIN	Taxpayer Identification Number
TWC	Together We CanVMX------------------Voice Mail Exchange

CHAPTER ONE INTRODUCTION

To carry out some aspects of its mission, the Arkansas Department of Health and Human Services (DHHS) uses a statewide network of contracted service providers, ii

The purpose of this Contract Manual (hereinafter referred to as "this Manual") is to provide a common frame of reference for the development of Professional and Consultant Services (PCS) contracts and intra-agency agreements . It is based on federal and state directives, as well as "best practices" which have been standardized for use by DHHS program divisions/offices (hereinafter referred to as "divisions").

The essential elements of each agreement are based on mutually binding obligations between the two i parties: the service provider eiie and the applicable DHHS division/office, using funds appropriated to carry out the

nrnnram re[LESS THAN]:nrtn[LESS THAN]:ihilitip[LESS THAN]: nfthat Hiviginnip

The Office of Chief Counsel (OCC) provides legal advisory concerning procurement methods, service performance provisions, and any unique terms and conditions or other proposed deviations from standard practices described in this Manual.

The Office of Finance and Administration (OFA) provides administrative direction to facilitate the successful completion of agreements so that they iiiiliiil iiil meet requirements for coordination through the Office of State Procurement (OSP), Department of Finance and Administration (DFA) and review by the Arkansas state legislature, if necessary. OFA also provides financial advisory and technical assistance through a network of divisional Chief Fiscal Officers to assure compliance with the Financial Management Guidee iee and the Accounting and Budgetary Procedures Law.

The Central Support Unit (CSU) of the Contract Support Section (CSS) of OFA provides this Manual as an element of technical assistance. Please direct all suggestions for corrections, additions and/or updates to:

Contract Support Section/Slot W345

P.O. Box 1437

Little Rock, AR 72203

Telephone: (501) 682-6293

CHAPTER TWO CONTRACTING FORMATS

I. Definitions (from Rules and Regulations Implementing Governor's Executive Order (EO) | 98-04 and Act 34 of 1999)

Ai-------"Contract shall mean any agreement entered into by and between a |

state agency and an individual or entity pursuant to which the agency agrees to purchase or lease tangible personal property, real property, or services, or any agreement for the disposal of commodities and services. Contract includes, but is not limited to, awards and notices of award; contracts of a fixed price, cost, or incentive type; contracts providing for the issuance of job or task orders, leases, lease purchase agreements, letter contracts, purchase orders, and professional or consultant services contracts. Contract also includes supplemental agreements with respect to any of these categories."

II. Contracting Formats for Services

A purchase of services contract is a legally binding agreement, enforceable by law, between DHHS and a provider of services. A provider of services may be a private entity (i.e., an individual, partnership, or corporation) or a public entity (i.e., a governmental agency or entity). The agreement contains mutually binding obligations and a description of the services to be provided with payment contingent on delivery of services. The acceptable e contracting formats include:eeee |

A. PCS Contracts

1. PCS contracts are governed by Arkansas Procurement Law and applicable statutes (as found in the Arkansas Code Annotated [A.C.A.]) and regulations, including but not limited to the following:

a. A.C.A. § 19-11-101 et seq. General Provisions

b. A.C.A. § 19-11-201 et seq. Procurement Law

c. A.C.A. § 19-11-701 et seq. Ethics in Public Contracting

d. A.C.A. § 19-11-801 et seq. Procurement of Professional Services

e. A.C.A. § 19-11-1000 et seq. Professional and Consultant Services

f. A.C.A. § 15-4-301 ets eq. Minority Procurement

2.Professional Services contracts are for the purchase of services which are professional in nature and generally require that the provider have some type of specialized training or license/certification (e.g., medical services, social work, therapy, counseling, etc.). A.C.A. § 19-11-203(14), as amended in 2003, exempts certain professional services from compliance with the purchasing law.

3.Consultant Services contracts are utilized when the service to be rendered is primarily the giving of advice by the contractor on a particular problem facing the agency.

4. PCS Contract Formats

a. PCS contracts for which the total compensation exceeds $25,000.00 per vendor, per fiscal year, per cost center shall be executed on the Professional/Consultant Services Contract form (Form OSP-1) | and are commonly referred to as "standard PCS contracts."

b. PCS contracts for which the total compensation does NOT exceed $25,000.00 should be executed on the purchase order (PO) format, in which case they are referred to as "stand-alone PO's." A division may, however, execute a PCS contract that does not exceed $25,000.00 in compensation as a "standard PCS contract" on the Form OSP-1, if circumstances warrant.

5. PCS contracts are addressed in Chapter Ten of this Manual.

B. Intra-agency Agreements

1. Intra-agency agreements are used when one DHHS division purchases services from another DHHS division.

2. Intra-agency Agreements are addressed in Chapter Eleven of this Manual.

C. Technical Services Contracts

1. Contracts for technical services are governed by the Arkansas Procurement Law and applicable statutes and regulations, including but not limited to the following:

a.	A.C.A. § 19-11-101 etseq.	General Provisions
b.	A.C.A. § 19-11-201 etseq.	Procurement Law
c.	A.C.A. § 19-11-301 etseq.	Bidding - State Industry Priority Goods
d.	A.C.A. § 19-11-601 etseq.	Federal Government Surplus Property
e	A.C.A. § 19-11-701 etseq.	Ethics in Public Contracting
f.	A.C.A. § 15-4-301 etseq.	Minority Procurement
g-	A.C.A. § 19-11-901 etseq.	Purchases of Workshop Made Products and Services
h.	A.C.A. § 15-4-301 etseq.	Minority Procurement

DHS Administrative Procedures Manual, Chapter 604, DHS Purchasing Authority-Contracts and Leases, also governs cContracts for technical | services.

2. "Technical services" are described by A.C.A. §19-11 -203(34) as:

a. Work accomplished by skilled individuals involving time, labor, and a degree of expertise, in which performance is evaluated based upon the quality of the work and the results produced;

b. Work performed to meet a demand, including, but not limited to, work of a recurring nature that does not necessarily require special skills or extensive training, or;

c. The furnishing of labor, time, or effort by a contractor or vendor, not involving the delivery of any specific end product other than reports that are incidental to the required performance.

3. Examples of services that are llypically considered technical in nature include drug screening, criminal background checks, elevator service, janitorial service, pest control service, translator service, nursing, occupational therapy, physical therapy, speech therapy, housekeeping, training, and office machine maintenance.

4. When in doubt if a particular service should be considered technical or professional, consult with Commodities Purchasing Unit (CPU) ii or CSU.

5. Technical services are not within the scope of this Manual. For assistance on the development of technical services contracts, consult with CPU.

D. Interlocal Agreements

1. Interlocal Agreements are authorized under A.C.A. § 25-20-104.

2. The purpose of Interlocal Agreements is to facilitate cooperation and sharing of resources at the local level between state agencies.

3. For information regarding Interlocal Agreements, consult with CSS prior to development

4. Interlocal Agreements are for highly specific situations and the details on their development are not within the scope of this Manual.

III. Other Agreement Types

A. Medicaid Provider Agreements

1. Medicaid Provider Agreements establish an individual or entity as a Medicaid provider and are specific to each service being provided. Contractors may have multiple contracts if they provide more than one of the approximately forty available services.

2. Medicaid Provider Agreements are managed by the Division of Medical Services (DMS) and are governed by Medicaid regulations and rates.

3. Medicaid Provider Agreements are not within the scope of this Manual.

B. Sub-grants

1. Sub-gGrants are written agreements to provide money or property to eligible | recipients under specific federal or state legislation authorizing such assistance.

2. The sub-grant award process complies with the Accounting and Budgetary Procedures laws of Arkansasiiiiili iiiiiieleie.

3. In accordance with A.C.A. § 19-4-2201 and 2202, the Review Subcommittee and the Legislative Council must review non-exempt iei | discretionary sub-grants prior to implementation.

4. Some of the factors to consider when determining if a particular situation warrants a sub-grant or a contract include the following:

a. Sub-grants are for ASSISTANCE while contracts are for ACQUIRING (PURCHASING) SOMETHING.

b. Sub-grants are often considered to be an award of resource assistance to fulfill the SUB-GRANTEE'S mission, while contracts are often put in place to fulfill DHHS' mission.

c. If performance indicators are needed, with the extra degree of specificity regarding what is to be done and remedies for failure to perform, a contract is probably more appropriate than a sub-grant.

d. Just because the funding comes to DHHS as a sub-grant from the federal government does NOT necessarily mean DHHS should put it out to the vendor as a sub-grant.

5. Sub-grants are not within the scope of this Manual.

NOTE:

If there is doubt as to whether a sub-grant or a contractil i is the most appropriate agreement format, consult with CSS.

D. Construction Contracts

1. Construction contracts are developed and approved in accordance with Arkansas Building Authority (ABA) regulations.

2. For details on construction contracts, consult with CSU.

3. Construction contracts are not within the scope of this Manual.

CHAPTER THREE DISCLOSURE

I. Policy

A. IMPORTANT TO NOTE:

1. Any non-exempt contract which exceeds $25,000.00 total (compensation plus reimbursable expenses) sbaW-requires the contractor to disclose information as required under the terms of eie eEO) 98-04, Act 34 of 1999, and regulations developed by DFA. (Note: Contracts with another government entity such as a state agency, public education institution {[public school)], federal government entity, or body of a local government are exempt from disclosure requirements.)

2. All amendments to non-exempt contracts greater than $25,000.00 total (compensation plus reimbursable expenses) require disclosure.

3. Subcontractors receiving greater than $25,000.00 are required to disclose.

4. For non-exempt contracts, the The-Contract and Grant Disclosure and Certification Form, Form PCS-D, - shall be used for the purpose of disclosing. Disclosure is required of any of the following, whether current or former (former is defined as within two years of entering into a contract):

a. constitutional officer

b. board or commission member

c. state employee

d. the immediate family member, including the spouse, of any of the above, or

e. any entity in which any person designated in (a) through (d) above:

(1.) holds any position of control, or

(2.) holds any ownership interest of 10% or greater

B. Any contract ith a Constitutional Officer or his/her spouse requiressbaW reqwethe contractor ee o disclose.

C. The failure of any person or entity to disclose as required under any term of EO 98-04 or Act 34 of 1999, or the violation of any regulation or policy promulgated by DFA pursuant to the order, shall be considered a material breach of the terms of the agreement and shall subject the party failing to disclose or in violation to all legal remedies available to DHHSiiii.

II. Procedures

A. The contract developer shall inform each potential contractor who desires to enter into a contract that is not exempt from the disclosure requirements that disclosure is a condition of the contract and that the agency cannot enter into any such contract for which disclosure is not made.

B. Required Language in Contracts and Subcontracts:

1. The following language shall be included in the terms of every contract with any individual or entity, for which the total consideration is greater than $25,000.00, for services funded through a contract:

"Failure to make any disclosure required by Governor's Executive Order 98-04, or any violation of any rule, regulation, or policy adopted pursuant to that Order, shall be a material breach of the terms of this contract. Any contractor, whether individual or entity, who fails to make the required disclosure or who violates any rule, regulation, or policy shall be subject to all legal remedies available to the agency."

2. Any agreement between the contractor and a subcontractor for which the total consideration is greater than $25,000.00 shall contain the following language:

"Failure to make any disclosure required by Governor's Executive Order 98-04, or any violation of any rule, regulation or policy adopted pursuant to that Order, shall be a material breach of the terms of this subcontract. The party who fails to make the required disclosure or who violates the rule, regulation, or policy shall be subject to all legal remedies available to the contractor."

C. For each non-exempt contract that exceeds $25,000.00 total, the contract developer shall ensure that the contractor completes the Form PCS-D ile eiii and shall include it in the contract.

1. Each contract shall also include a completed Form PCS-D Grant-ile-and-eiii--for any non-exempt subcontractors receiving greater than $25,000.00 total per subcontract and shall include a statement containing the dollar amount of the subcontract. (According to DFA interpretation, Therapeutic Foster Care parents are considered as subcontractors for the purpose of disclosure.) If Form(s) PCS-

D -and--ile-and-eiii--for | subcontract(s) are required but are not submitted with the contract, they shall be submitted to DFA within ten days of subcontract execution.

2. All amendments to non-exempt contracts greater than $25,000.00 total require disclosure on the contractor and on all subcontractors receiving over $25,000.00 total who are affected by the amendment.

D. During the development phase of the contract, the contract developeiiiie shall determine

1. That the Form(s) PCS-Dile eiii has/have been completed, signed, and included in the contract, AND

That the contract is not prohibited or subject to approval, OR

b. If subject to approval, that the required approval has been obtained.

E. PCSII CONTRACTS BETWEEN AGENCIES AND CONSTITUTIONAL OFFICERS SUBJECT TO PRIOR APPROVAL

Constitutional officers, including members of the General Assembly, or their spouses may enter into PCSeil leie contracts with agencies only | upon the prior approval of the Joint Budget Committee during legislative sessions, or the Legislative Council between sessions, and the Governor.

F. CONTRACTS SUBJECT TO COMPETITIVE SEALED BID OR COMPETITIVE SEALED PROPOSAL (CSP), also known as REQUEST FOR PROPOSAL (RFP), |

1. An agency may enter into, extend, or renew a contract, lease, or sub-grant with a constitutional officer, including members of the General Assembly, the spouse of a constitutional officer, or an entity in which the officer or spouse holds an ownership interest greater than ten percent (10%) if

a. the contract is the result of competitive sealed bidding or a CSPa eel and

b. such officer played no role, directly or indirectly, in the administrative determination of specifications for the bid or proposaleel, in the administrative evaluation or consideration of bid or proposall, or in the administrative decision to accept the bid or fer-proposal.

2. An agency may enter into, extend, amend, or renew a contract, lease, or purchase agreement with a board or commission member, state employee, the immediate family member of any of these, or any entity in which any of these persons has an ownership interest of 10% or greater if the contract is the result of competitive sealed bidding or a CSPeel. |

G. CONTRACTS GREATER THAN $25,000.00 TOTAL AND NOT SUBJECT TO COMPETITIVE SEALED BIDDING OR CSP REQUIRE APPROVAL.

An agency must obtain approval in order to enter into, extend, amend, or renew a contract, lease, or purchase agreement not subject to competitive sealed bidding or a CSPeel, as follows: |

1. If the total consideration for the contract is greater than $25,000.00 the approval of the Chief Fiscal Officer of the State is required if the potential contractor or lessee is one of the following:

a. a state employee or the employee's immediate family member;

b. a board or commission member or the member's immediate family member;_T or

c.any entity in which a state employee or board or commission member, or an immediate family member of any of these:

(1.) holds any position of control, or

(2.) holds any ownership interest of 10% or greater.

2. If the total consideration for the contract is greater than $25,000.00 and the potential contractor or_T lesseeee is a constitutional officer, including a | member of the General Assembly, the spouse of a constitutional officer, or a corporation, limited liability company, partnership, or any other legal entity of which a constitutional officer or the officer's spouse has an ownership interest of at least ten percent (10%), the contract or_T lease must receive the prior | approval of the Joint Budget Committee during legislative sessions, or the Legislative Council between sessions, and the Governor.

H. SUBCONTRACTS

A constitutional officer including members of the General Assembly, the spouse of a constitutional officer, or a corporation, limited liability company, partnership, or any other legal entity of which a constitutional officer or the officer's spouse has an ownership interest of at least ten percent (10%) may not receive any subcontract? or assignment of lease from a state agency unless:

1. the constitutional officer, spouse, or legal entity is disclosed as ee subcontractor in the competitive bid or CSPl, or

2. for contracts not requiring competitive bidding or a CSPl, prior approval is obtained from the Joint Budget Committee during legislative sessions, or the Legislative Council between sessions, and the Governor.

III. Quarterly Report

A. All state agencies are required to submit a quarterly report to DFA/OSP itemizing the disclosures that were identified during the calendar quarter for all transactions covered by EO 98-04. Those disclosures required to be reported include:

1. Sub-gGrants, contracts, or leases awarded to a Constitutional Officer or his/her spouse, including members of the General Assembly, or to an entity in which a Constitutional Officer or spouse holds 10% ownership interest, IF the sub-grant, contract, or lease WAS procured competitively;- and

2. Contracts, leases, or purchase agreements awarded to state employees, board or commission members or their immediate family members, or to legal entities in which the individual holds 10% ownership interest, IF the contract, lease, or purchase agreement WAS NOT procured competitively-.

B. For PCS contracts, janitorial contracts, and equipment leases, CSS captures the data necessary for the report.

C. For sub-grants, voucher programs, and other purchase agreements, the administering divisions must submit the reportable disclosure data to CSS for inclusion in the report. The division should submit the information to CSS Program Coordinator no later than the 5^th working day following the last day of the quarter.

CHAPTER FOUR PROCUREMENT

I. POLICY

Policy governing procurement is addressed in A.C.A. § 19-11-204, § 19-11-229 through 234, § 19-11-301 through 319, and § 19-11-801 through 806.

This policy applies to all PCS contracts, whether the contract is executed as a standard PCS contract (on Form OSP-1) or as a stand-alone PO.

"Small Procurements", defined as those procurements not exceeding $5,000.00, may be procured without a competitive procurement process. Ceompetition should, however, be used to the maximum extent possible.

Procurements exceeding $5,000.00 must be competitively procured unless OSP approves a Sole Source selection (except for exempt commodities and services as defined in A.C.A. § 19-11-203 (14]).

Refer to the DHHS Procurement Manual for Professional and Consultant Services on

DHHS-Gold for additional detail on the procurement of PCS services.

NOTE:

* It is DHHS policy to use open and competitive public procurement methods to promote cost effectiveness and fairness of opportunity among all prospective providers of service.

* Open, competitive procurement practices should also be applied to the greatest extent practicable in contract offers to other state agencies if there is more than one state agency which might have the capability to perform the required service(s).

II. PI

A. Service source selection activities in each division must be carried out by qualified procurement officials. All Issuing Officers shall be certified by CSS as Certified Procurement Officials (CPO's) before exercising their procurement activities.

B. Once the divisionie staff-identifies the need for contracted professional or consultant services, they should set an allocation (funding amount) and begin procurement procedures using one of the following eightftioe methods as identified in Arkansas Code:

1. Small Procurement;

2. Competitive Bid or Competitive Sealed Bid (CB);

3. CSPiill -, also known as RFP;l

4. Request for Qualifications (RFQ);

5. Sole Source;

6. ABAiliiiei criteria;

7. Intergovernmental (IG); or

8. Emergency

C. For standard PCS contracts, all elements requiring legal review should be forwarded to OCC in accordance with the "Professional/Consultant Services Contract Deadlines" to allow OCC sufficient time for review and response. These elements include:

1.Procurement proposals prior to public release (i.e., CB, CSP, RFQ);

2.Financial terms, if they depart from DHHS-standard options: fixed rate; final negotiated rate; actual cost, or scheduled ireimbursement; and

3.Terms and Conditions, if they depart from the standard, OCC-approved Terms and Conditions.

D. Initial standard PCS contracts shall not extend past the end of the biennium. However, up to six (6) years' worth of eie e-e extension options can be exercised if such extension options are explicitly stipulated in the original competitive procurement AND in the original contract, i.e. initial contracts can be extended m e-e eei for a total time period no longer than seven (7) years. The extension option should only be exercised if service performance under the existing contract has been satisfactory.

The state standard is for the initial contract and each successive extension period to not exceed one (1) year (i.e., the initial contract should normally not exceed one year and the contract should be amended to extend for no more than one year at a time).

If circumstances warrant deviation from the state standard, divisions should consult with CSS.

E. A NEW procurement requires a NEW contract (i.e., an existing contract cannot be amended to incorporate the terms of a NEW procurement.)

The procurement/development/approval process can be very time-intensive, especially during the high-volume "surge" period preceding the beginning of the state fiscal year. The essential elements may be required for presentation to OCC as much as five months prior to proposed contract implementation, to allow for remediation, procurement process completion, contract development, and review through DFA and the Arkansas State Legislature, if required. Program planning must anticipate a long lead-time from the initial decision-making and commitment of resources to the point of actual initiation of services under the contract.

F. Procurement Methods

NOTE: The A.C.A. reference is provided for each procurement method for more detail on the specific requirements. The information indicated below only highlights the key areas but does NOT represent a comprehensive repeat of ALL the requirements found in the A.C.A. and relevant Regulations.

The following procurement options are allowable for PCS contracts (A.C.A. § 19-11-203 |[GREATER THAN]14] lists those commodities and services that are exempt from the procurement requirements):

1.Small Procurement

a. Refer to A.C.A. §19-11 -204 and §19-11 -231.

b. Small Procurements are defined as those that do not exceed $5,000.00 total (compensation plus reimbursable).

c. Procurement requirements shall not be artificially divided so as to constitute a Small Procurement.

d. Competitive procurement is not required for Small Procurements but is STRONGLY encouraged.

e. A contract that does not exceed $5,000.00 should normally be executed as a stand-alone PO.

2.CB

a. Refer to A.C.A. §19-11 -234 and §19-11 -229.

b. At a minimum, contracts exceeding $5,000.00 total but not exceeding $25,000.00 total must be procured by the CB method unless OSP approves an alternate procurement method, lliContracts within this range may, however, be procured by the more formal Competitive Sealed Bid method at the division's discretion.

c. The CB method of procurement requires obtaining bids by:

(1.) Direct mail;

(2.) Telephone;

(3.) Telegraph;

(4.) Written form;_T and/or

(5.) Electronic media

Note: Written requests and written responses are far preferable.

d. Sufficient solicitation should be conducted to elicit three bids. 4f-lf, however, three bids are not received, the division must document that at least three firms were contacted OR explain why three were not contacted. Only firms that could logically provide the service to be procured should be contacted.

e. The CB request should specify in detail the project objectives, results expected, and desired qualifications.

f. The contract shall be awarded to the qualified bidder responding with the lowest bid.

g. At a minimum, contracts exceeding $25,000.00 total must be procured by the more formal Competitive Sealed Bid. Contracts exceeding $25,000.00 total may, however, be procured by an alternate method with OSP approval.eiie elel

h. Competitive Sealed Bid procurement requires public solicitation and public opening of responses.

i. The Competitive Sealed Bid statutes and regulations are much more detailed than those for non-sealed CBeiie i and far more numerous than space here permits. Referral to the A.C.A. is critical.

3. eiie elel CSP), also known as eel (RFP)

a. Refer to A.C.A. § 19-11-230.

b. The CSP eee iiee method of procurement is often more appropriate for PCS contracts because it allows for factors in addition to cost to be considered in the evaluation of responses. Use of the CSP method, however, requires prior iliii approval of OSP coordinated through CSS.

(1.) To request OSP approval to conduct a CSP procurement, the division Director should submit an electronic (e-mail) request on division letterhead to CSU Manager for coordination to OSP.

(2.) The request should include the following information:

(a.) The nature of the proposed service(s);

(b.) The term of the proposed initial contract and the number of extension options, if applicable;

(c.) The reason(s) why a CB procurement is not practical or advantageous; and

(d.) The factors in addition to cost that should be considered in the evaluation of responses.

c. The CSP method is appropriate when the evaluation involves the relative abilities of respondents to perform, including the degree of technical or professional experience, and price is not the only consideration.

d. Notice inviting bids shall be given no fewer than five nor more than thirty calendar days preceding the date for the opening of responses.

e. Notice shall be posted at least one time in at least one newspaper having general circulation in the state or posted by electronic media. The DHHS standard procedure is to post the notice on the DHHS website for ten working days. In addition, staff may publish a notice in a newspaper having statewide circulation and/or post on their division website a link to the DHHS website in order to promote full awareness of the competitive procurement opportunity to all potential service providers.

f. The division/office should evaluate proposals by an evaluation committee consisting of three or more members in accordance with the requirements set forth in the CSP.

g. The division/office should review and evaluate all accepted proposals and award the contract to the respondent that provides the most effective solution for the price quoted.

h. The division/office should be prepared to address, in the legislative review process, their criteria for selection of contractor(s), particularly if the contract(s) was/were awarded to respondent(s) who did not provide the lowest cost proposal.

i. Act 1814 of 2003 requires that ALL CSP's contain language that encourages minority participation. The following approved language shall be included in ALL CSP's:

MINORITY BUSINESS POLICY:

Minority participation is encouraged in this and all other procurements by state agencies. "Minority" is defined by Arkansas Code Annotated § 1-2-503 as "black or African American, Hispanic American, American Indian or Native American, Asian, and Pacific Islander." The Division of Minority Business Enterprise of the Department of Economic Development conducts a certification process for minority businesses. Bidders unable to include minority-owned businesses as subcontractors "may explain the circumstances preventing minority inclusion."

j. The CSP statutes and regulations are much more detailed than space here permits. Referral to the A.C.A. is critical.

4.RFQ

a. Refer to A.C.A. § 19-11-802.

b. This procurement option is, in the absence of sole source justification, the procurement method recommended when contracting for architectural, engineering, land surveying and legal services.

c. This option may also be used, to a limited extent, with prior approval from DFA/OSP, for other services when it is determined to be the most suitable method of contracting. Divisionseie should consult with CSS ei lii before considering this option.

d. The RFQ method is typically limited to those situations where le eeeethere is a set rate for the service being procured.

e. Utilization of the RFQ method must be prior approved by DFA/OSP, except for architecture, engineer, land surveying, and legal services, as indicated above.

f. Act 1814 of 2003 requires that ALL RFQ's contain language that encourages minority participation. The following approved language shall be included in ALL RFQ's:

MINORITY BUSINESS POLICY:

g. Architect and engineer contracts for construction projects are NOT indicated as RFQ on the Form OSP-1 as these contracts are subject to ABA criteria and should, therefore, reflect "ABA Criteria" as the procurement option.

5.Sole Source

a. Refer to A.C.A. § 19-11-232.

b. The sole source method shall be used only as a last resort, and only when the other procurement methods are clearly not applicable. Exceptions can be requested only if based on statutory requirements or profound programmatic imperatives. The division/office should expect detailed questioning in the legislative review process for all sole source proposals.

c.Sole Source PCS contracts canmay be executed under the following circumstances:

(1.)Sole Source, Exempt by Law

This refers to a contract with a specific provider that results from a mandate by the court system or from state or federal law.

(2.)Sole Source, Intent to Award

This refers to those contracts that are awarded where there is only one apparent source AND only after legal public notice of intent has been published in a newspaper of statewide circulation and no other potential contractors have come forth expressing interest in the contract.

The public notice shall be given no less than five nor more than 30 calendar days preceding the date of contract initiation. The public notice should run for a minimum of one day.

OCC approval is required for Sole Source, Intent to Award.

(3.) Sole Source, Justification Approved by OSP

Except for those contracts that are "Sole Source, Exempt by Law" or "Sole Source, Intent to Award" and those contracts that are for performing artists and lecturers, new sole source contracts ee eele e iel ei require a written narrative justification, which must be approved in advance by DFA/OSP. The written justification will also be provided to legislators for consideration and discussion during review by sub-committees and approval by the Legislative Council. (EXCEPTION: DFA/OSP prior approval is not required foreft | contracts with state agencies.)

The procedures for the division/office to request sole source approval ee are as follows:

(a.) Division iie Director shall prepare a-a memorandume from division Director on division letterhead to Director of OSP to in accordance with the sample Request for Sole Source Procurement memorandum in the Appendix, addressing the following six questions:

(1.) Why is this service needed?

(2.) What method(s) were used to determine that a lack of responsible/responsive competition exists for this service?

(3.) How was it determined that this provider possesses exclusive capabilities?

(4.) Why is this service unique?

(5.) Are there patent or proprietary rights that make the required service unavailable from other sources?

(6.) What would the agency do if the provider/service were no longer available and what, if any, program considerations make the use of a Sole Source critical to the successful completion of the agency's task?

NOTE:

* If the division intends for the original contract to exceed one (1) year, the division must make that evident in their request.

* If the division intends to amend the contract to extend for a multi-year period, the division must also include in the request an indication of the number of extension options the contract will have.

* The maximum length of time that a Sole Source contract can continue without re-approval by OSP is seven (7) years.

(b.) All six questions must be addressed in the memorandum, even if the proper response is "not applicable."

(c.) The memorandum shall be prepared as a Word®

format document suitable for electronic transmission.

(d.) Division/office shall submit the memorandum as an attachment via e-mail to iiie CSU Manager for coordination/approval.

(e.) ii CSU Manager shall ill coordinate approval with DFA/OSP.

(f.) CSU Manager shall ill forward DFA's approval or disapproval to the requesting division/office via e-mail. |

(g.) In its submittal of the applicable contract authorization to F-OUCSS, the division/office shall include a copy of the e iil requesting memorandum as well as a ie copy of DFA's approval message.

6.iliiBA)

a. Refer to Architectural Section 6-100 of State Building ServicesBS Standards and Criteria - Professional Selection Procedures for State Agencies.

b. The guidelines and procedures established by the ABA shall be used in selecting architects, land surveyors, and engineers for state construction projects.

7.Ieeel IG)

a. Refer to A.C.A. § 19-11-203(14).

b. IGeeel- contracts are those involving agreements between | two or more Arkansas governmental entities. A contract with an Arkansas governmental agency is considered an IG contract even though the contractor may have been selected by a CSP or a CB. State agencies outside Arkansas are NOT considered IG for the purposes of PCS contract procurement.

c. All IG contracts with a total dollar value | (compensation plus reimbursement) that exceeds $25,000.00 are required to be reviewed by the Performance Evaluation and Expenditure Review (PEER) subcommittee prior to the execution date of the contract.

d. IG contracts do not require EO 98-04 disclosure | forms.

e. IG contracts are exempt from the Arkansas Procurement Law. Program | agencies should, however, be able to justify, if the question arises, the selection of a particular agency if there is more than one state agency that might have the capability to perform the required service(s).

8.Emergency

a. Refer to A.C.A. § 19-11-233.

b. Emergency procurements may only be requested by the agency Chief Fiscal Officer or equivalent or Director, Division Director or Deputy Director. This option is to be used VERY SPARINGLY.

c. The Emergency procurement process allows a contract to be implemented prior to review by the full Legislative Council. (Unless critical, Emergency procurements should be made using some form of competitive bid process.)

CHAPTER FIVE PROVIDER EXCLUSION RULE

I. Policy

It is the policy of DHHS to conduct business only with responsible participants/contractors. Participants will be excluded from participation in DHHS programs, if necessary, to protect public funds, the integrity of publicly funded programs, and public confidence in those programs (refer to DHHS Administrative Policy 1088 and A.C.A. § 19-11-245).

II. DHHS Exclusion List

A. The DHHS Exclusion List is a listing of recipients or contractors determined by DHHS to be excluded from contracting with DHHS.

B. Upon determination that an entity is to be excluded, the DHHS Director shall issue a written decision to exclude and state the reasons for the action taken. A copy of that decision shall be mailed or otherwise furnished to the excluded entity or designee within five days of issuance. That decision shall be final and conclusive.

C. Exclusion shall be for a period of not less than one year.

D. Exclusion of a participant in one program of DHHS shall apply to all programs administered by DHHS.

E. The notification of DHHS Director's decision shall be forwarded to OFA, which shall

1. Notify DHHS executive staff, payment staff, and contracting staff

2. Update current list of excluded participants on DHHS Gold

III. List of Parties Excluded from Federal Procurement and Non-procurement Programs

A. The General Service Administration (GSA) maintains the List of Parties Excluded from Federal Procurement and Non-procurement Programs.

B. This is a listing of firms and individuals that have been suspended, debarred, or otherwise excluded by the federal government from participating in federal programs.

C. This listing is available on the Internet, the address for which can be obtained from CSSFOU. |

D. Search of the list is executed by name of the firm or individual in question.

IV.All State Agencies Suspended/Debarred Vendors List

A. The All State Agencies Suspended/Debarred Vendors List is a listing of entities suspended or debarred by the State of Arkansas.

B. DFA/OSP maintains this listing.

V.Procedure When Developing PCS Contracts

A. Division/office should consult the DHHS Exclusion List and the GSA list during the procurement process AND prior to the developing and awarding of any contracts.-of eieiill ee liie liee eii elee

B. Upon receipt of notification that an entity has been added to the DHHS Exclusion List, CSS shall initiate action to terminate all existing contracts ith that | entity.

CHAPTER SIX PROVIDER AUDIT REQUIREMENT

I. Policy

DHHS Audit Guidelines and OCC Audit Section determine provider audit requirements and the resolution of provider audit findings.

II. Procedures

A. Upon receipt of an independent audit report, OCC Audit reviews the report for any findings and recommendations.

B. If there are findings and recommendations, OCC Audit ensures that there is a Corrective Action Plan and, if necessary, comments on the CAP-Corrective | Action Plan.

C. OCC Audit forwards the findings and recommendations, the Corrective Action PlanAP, and any comments to the divisionie and to CSS administrative staff.e e CSS administration e eshall -distributes copies of the findings and recommendations to Administrative Compliance Officers (ACO's) ie to use in their site visits.

1. Upon receipt of the above information from OCC Audit, the division/office shall determines the course of action to be taken.

2. If the divisioni determines that recoupment from the provider | or additional payment to the provider is indicated the following action shall be taken.

a. If the ie contract is no longer in effect, the division/office shall forwards its determination to OFA/Accounts Receivable (AR) for recoupment or to OFA/Accounts Payable (AP) for payment, with copies forwarded to CSS and OCC Audit.

b. If the i contract is still in effect, the divisionishall forwards its determination to CSS for payment adjustment, with copies forwarded to OCC Audit.

3. If the divisioni determines that no recoupment or additional payment is required, the division/office shall forward s-that information to CSS with a copy to OCC Audit.

D. For every contractor, contract developer shall verify that the contractor's audit status is current.

1. Every standard PCS contract should have on file in Contracting Automation Platform (CAP) an electronic Provider Audit Sign-off Sheet (PASOS) on which OCC Audit has indicated that the contractor's audit status is "current."

2. If there is no current audit on file in CAP, developer shall submit to OCC Audit a PASOS requesting verification of audit status. Developer should review the returned PASOS to determine contractor's audit status.

3. If the status is "current", developer shall file the PASOS in CAP.

4. If the status is "not current",

developer should contact contractoee to determine if audit has been submitted, to determine when it will be submitted, or to otherwise resolve the delinquency. When the developel determines the audit has been | submitted to OCC Audit, he/she should submit another PASOS to OCC Audit.

CHAPTER SEVEN PERFORMANCE BASED CONTRACTING

I. Policy

Refer to DHS Policy 1066 "Performance Based Contracting Policy" and A.C.A. § 19-11-1010.

These policies are applicable to every PCS contract and PCS contract amendment to which DHHS is a party except as listed below:

A. PCS contracts which are procured by the Sole Source by Law method;

B. PCS contracts which are executed as Emergency contracts;

C. PCS contracts for Architectural and Engineering services that are awarded using ABA criteria; or

D. PCS contracts for $10,000.00 total (compensation plusaod reimbursable) or less

NOTE: DHS STRONGLY ENCOURAGES the use of performance indicators for ALL PCS contracts regardless of the dollar value or procurement method unless the DHS division/office Director determines performance evaluation would not be cost effective).

II. Procedures

A. The division/office shall prepare proposed performance-based standards for each PCS contract el except for exclusions listed previously.

B. The division/office preparing performance based standards shall submit the proposed standards to CSS for review and approval. ee e iei

C. CSS shallwtU review the proposed performance based standards to determine if they violate any law or regulation applicable to DHHHS and that the contract terms will be enforceable. CSS shallwtll indicate their approval electronicallyiiiliil.

D. Form DHS-1366-A illustrates the required format for performance based standards. The performance based standardsii included in the contract are required to | specify the following:

1. Goals (also known as program deliverables or benchmark objectives)

2. Performance Indicators

3. Acceptable performance levels

4. Remedies for unacceptable performance

E. There is no need for legal review by CSS if the contracting division certifies the following:

1. The contract is identical to an existing contract that has received OCC approval except as to contractor

and

2. The existing approved performance terms are satisfactory and have accomplished the outcomes desired.

Performance Based Contracting Certification, Form DHS-1366, can be used for this certification.

F. Inclusion of Performance Indicators in PCS Contracts

1. Standard PCS Contracts

a. Performance Indicators l shall be made legal | attachments to the Form OSP-1 in standard PCS contracts.

b.CSS approval and dDivision certification shall be included with the | contract but not made a legal attachment.

2. Stand-alone PO's for Professional and Consultant Services

a. For each and every non-exempt PCS contract that is executed as a stand-alone PO, and for which performance based standards are required, division/office shall obtain the contractor's signature on the Contractor Certification Concerning Performance, Forms DHS-9353 or DHS-9354, to which shall be attached a copy of the performance indicators.

b. The Form DHS-9353 or DHS-9354 eiii

ei-ee-sbalJ-bsshall be retained in the

III. Performance Evaluation

A. During the term of the contract, the division/office shall complete sufficient | performance evaluation(s) to determine if the contractor's performance is satisfactory or unsatisfactory.

B. Justification for the division'si ultimate determination should be retained in the divisioni files for a minimum of five years from the expiration date of the contract.

IV. Contract Amendments

A. When amendments are executed on a PCS contract with performance | indicators, except in certain circumstances listed below, the key elements of the amendment should be furnished to CSS for review. CSS will review the | information to insure there is no material change in the terms that could render any portion of the contract unenforceable.

B. The above review by CSS for amendments is not required if the contracting division/office certifies that:

1. The amendment changes only quantity, price, or duration, and

2. The existing approved performance terms have previously been approved by CSS, are satisfactory, and have accomplished the outcomes desired.

Form DHS-1366 can be used for this certification.

Note, in addition:

1. CSS approval is not required for previously CSSOGC-approved performance indicators being utilized in a new contract. Division/office certification IS required, however.

2. Neither CSS approval nor division/office certification is required for | amendments that terminate a contract.

3. CSS approval and division/office certification may be submitted by | electronic mail.

C.Any changes to performance indicators require approval by CSS. |

D. If an amendment changes some but not all of the performance indicators in a standard PCS contract, CSS approval should be obtained for those that are changing and the division/office should certify for those that are not changing.

CHAPTER EIGHT MATCHING FUNDS

I. Policy

A. Matching requirements are based on federal or state legislation or DHHS policy decisions. If required by the terms of the contract, the contractoee | may certify that specific amounts of money, property, or services are available to match funds, e e eie (See Financial Guidelines for Purchased Services, Section 3SQ&3700, for more information)

B. Certain funding sources (e.g., Social Services Block Grant [SSBG]) have specific requirements regarding the source(s) of match that are available for utilization. (See Social Services Block Grant Program Manual, Section 5100)

II. Procedures

A. For all agreements that require matching funds, the terms (including associated percentages of state, local, or certified levels of participation) should be specified in the agreement. (NOTE: A section for the required match information is | included in the standard, OCC-approved Terms and Conditions.)

B. When specified© limits are exceeded or match rate changes, an amendment to the agreement should be executed.

CHAPTER NINE RATE INCREASE APPROVAL

I. Policy

A.C.A.§ 20-75-110 and § 20-77-110 govern rate increases to DHHS contractors in certain circumstances.

II. Requirements

A. In many situations, it is prohibited to increase the contractor's reimbursement rate without first obtaining the approval of the Governor of Arkansas and the Chief Fiscal Officer, DFA.

B. New contracts procured through a competitive process (i.e., CB, CSP, or RFQ) are not subject to this requirement.

C. Some fixed rates that function as ceiling rates can allow for increases in payments that do not constitute a rate increase above the ceiling rate.

D. Administrative contracts or other PCSeil eie contracts entered into by the Medicaid program with individuals or corporations not as providers of medical service do not come within the scope of this regulation. These contracts already have a review process established which includes DFA and the legislature.

E. When a Medicaid rate increase is approved for a service that is in a PCS contract, DHHS can pay the increased rate without having to request a rate increase through the Governor IF and only if the contract contains the following language:

(Listing of services') are Medicaid reimbursable services and the reimbursement rate will be equal to the Medicaid rate in effect at any given time."

F. In those cases where the Governor's approval is required, the implementation of rate increase will not be approved prior to the date of his signature on the eieee Iee l - Reimbursement Rate Increase Approval Form, Form DHS-1951).

III. Procedures

A. To request an increase in the reimbursement rate(s) foref service(s), the division/office sbouldshall complete Form DHS-1951 and submit it to CSS along with justification and supporting documentation. The Form DHS-1951 requires an original signature by the division/office Director. One form should be completed for | each contractor.

B. CSS shall process the requestee leee ie eei and forward hrough DHHSOFA Chief Fiscal Officer to DHHS Director.

C. Upon his approval, DHHS Director shall routes the request and the letter to the Governor's Office for approval. If he does not approve, DHHS Director shall returns the request to CSS.

D. Upon his approval, the Governor will returns the signed request to CSS. CSS shall notifyi the requesting division and ACO of the Governor's approval or disapproval.

NOTE:

For rate increase requests that relate solely to Medicaid and that are strictly under the auspices of DMS, the request originates within DMS for coordination through OFA and the DHHS Director's Office to DFA, Office of Budget and on to the Governor. These requests do NOT flow through CSS.

All other rate increase requests SHOULD flow through CSS as outlined above.

CHAPTER TEN PROFESSIONAL/CONSULTANT SERVICES CONTRACTS

I. Policy

See A.C.A. § 19-11-200 etseq., § 19-11-700 et seq., and § 19-11-1000 etseq.

II.PCS Contracting Requirements

A. PCS Contracting Formats

1. Standard PCS Contracts

a. All PCS contracts that exceed $25,000.00 in compensation (per contractor, per fiscal year, per cost center) shall be executed on the Form OSP-1. (All PCS contracts executed on the Form OSP-1 are referred to in this Manual as "standard PCS contracts.")

b. Standard PCS contracts that exceed $25,000.00 in compensation must be submitted to DFA for review and approval.

c. Standard PCS contracts that do NOT exceed $25,000.00 in compensation require DFA review and approval ONLY IF THEY ARE SOLE SOURCE OR EMERGENCY CONTRACTS.

d. Standard PCS contracts that exceed $25,000.00 total (compensation plus reimbursable) must also be reviewed by the Legislative Council (or Joint Budget Committee when legislature is in session).

(1.) Those contracts with state agencies must be presented to the Performance Evaluation and Expenditure Review (PEER) Subcommittee prior to approval by DFA and prior to the execution date of such contract.

(2.) Those contracts with non-state agencies must be presented to the Review Subcommittee prior to approval of DFA and prior to the execution date of such contract.

(3.) The Legislative Council or the Joint Budget Committee may elect to review or exempt any contract or group of contracts.

2. Stand-alone PCS PO's

a. All PCS contracts that DO NOT exceed $25,000.00 in compensation should be executed on the PO format and are referred to in this Manual as "stand-alone PO's". Agencies shall not, however, split known quantities into smaller ($25,000.00 and below) amounts to avoid a standard contract.

A division may execute a PCS contract that does not exceed $25,t000.00 in compensation as a standard PCS contract on the Form | OSP-1, if circumstances warrant.

b. Stand-alone PO's require neither DFA review and approval nor legislative reviewr u-nless they exceed $25,000.00 total (compensation plus reimbursable). -However, multiple PO's to the same contractor in the same fiscal year from the same cost center MUST be reported to OSP to assist OSP in determining whether an agency is issuing multiple PO's in an attempt to circumvent the requirement of establishing a standard PCS contract. (See A.C.A. §19-11 -1012)

B. Timeframes

1. All standard PCS contract proposals should be negotiated, developed, and submitted to CSS in sufficient time to allow for a thorough compliance review by CSS, approval by the division, and signature by the contractor. This | review, approval, and signature is required prior to the routing of the proposal to DFA, if applicable,elile and prior to the effective date of the | contract action.

2. For specific deadlines for the submission of authorizations to F-OUCSS and | signed contracts to DFA, refer to the Professional/Consultant Services Contract Deadlines that is available from CSS--l. | Cooperation in meeting the published deadlines will avoid possible delays in service and Suspension of the Rules.

3. Contracts requiring legislative review that are submitted to DFA after the due date must be accompanied by a Suspension of the Rules letter from the DHHS Director (see sample letter in Appendix). This letter should contain the following:

a. Contractor's name

b. Request for suspension of the rules

c. Explanation for failure to submit the contract under regular procedures

d. Description of the service(s) being purchased

e. Consequences if the request is not granted

C. General requirements for all PCS contracts include, but are not limited to, the following:

1.DHHS standard is that initial contracts shall not extend past the end of the fiscal year. Requests for initial contracts to extend past the end of the fiscal year will be considered by CSS on a case by case basis. In any case, the initial term of a PCS contract shall not extend past the end of the biennium.

2. PCS contracts may be amended to extend for a total period of no more than seven (7) years.

3. PCS cContracts with individuals and sole proprietorships are prohibited unless approved by OCC and are, in any case, strongly discouraged. (A sole proprietor is one who owns all of the assets of the business and is solely liable for all the debts of the business.)

4. In many situations, it is prohibited to increase the contractor's reimbursement rate without first obtaining the approval of the Governor of Arkansas and the Chief Fiscal Officer, DFA. Note: New contracts procured through a competitive process are not subject to this requirement. Also, some fixed rates that function as ceiling rates for services can allow for increases in payments that do not constitute a rate increase above the ceiling rate. (See Chapter Nine of this Manual.)

5. For all contracts that were competitively procured and that exceed $25,000.00, the contractor must submit (or have on file with CSS) a copy of its Equal Employment Opportunity (EEO) policy. Contractors that do not have an established EEO policy must submit a written statement attesting that they

do not have an EEO policy. This EEO policy, or statement, shall be made a part of the contract file and shall be submitted to DFA, if necessary.

6. Certain PCS contracts require additional approval beyond the normal procedure.

a. Construction-related contracts require review by and approval from CSU and ABA.

b. PCS contracts for information systems technology and services (including the Ppurchase of computer equipment) i ee requires review by and approval memo from the DHHS Office of Systems and Technology (OST) prior to the development of the contract (see iiil il DHS Policy 1022 for details.- Re-approval is required for all amendments to applicable contracts.

c. Contracts for legal services require review by and approval from OCC.

7. Standard PCS contracts are not binding, and no payments will be made, until they are approved afld-i-by both contracting parties (the contractoii and the lil division iDdirector), as well as by a representative of DFA when applicable. Standalone PO's are considered effective and, therefore, binding upon the contractor's acceptance of the terms.

8. Funding amounts based on Final Negotiated or Fixed unit rates should be computable to an even number of units whenever practical. If the contract amount cannot be computed into an even number of units, the number of full units possible should be indicated, with a notation made that payment cannot exceed the contract total. Funding amounts based on budgets should be exact, not rounded. Contract totals that include more than one funding source should reflect the exact total of the funding sources, not a rounded amount.

9. The prior written approval of OCC is required for the contractor to assign the contract in whole or in part or any payment arising out of it.

10. To be considered valid and binding, a stamped or automated signature by a contracting party must be:

a. Unique;

b. Capable of being verified; and

c. Under the sole control of the signatory.

11. Contractors shall insure non-discrimination and equal opportunity by | subcontractors in compliance with all applicable federal laws, regulations, executive orders and civil rights rules and regulations.

12. Standard PCS contracts with out-of-state vendors ("foreign corporations") who | are transacting business in Arkansas shall include verification of the vendor's Certificate of Authority from the Arkansas Secretary of State.

D. Ethics in Public Contracting

1. Ethics in public contracting is addressed in A.C.A. § 19-11-701 through 717.

2. DHHS shall conform to high professional standards and stringent procurement practices to sustain public trust in their functions. Public employees must discharge their duties impartially so as to assure fair competitive access to governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a manner as to foster public confidence in the integrity of the state procurement process.

E. Reimbursement Guidelines

The contractor and division/office should agree upon the method of reimbursement before a contract is developed. The following methods are acceptable (see Financial Guidelines for Purchased Services for greater detail): liie

1. Fixed Rates

a. Fixed rates are based on a rate schedule approved by DHHS and standardized for a particular service or group of services. Rate schedules are developed by the divisioni funding the program. The division/office should adhere to the DHHS criteria for a cost study.

b. The contractor rates should fall within the range of allowable rates shown on the approved rate schedule. Amendments to revise rates ithin this range are completed on a prospective basis from | the effective date of the contract amendment. Fixed rates based on federal approved rates such as Medicaid may be effective on the date of approval by the federal agency.

c. All payments are final and no settlement will be made upon expiration of the contract.

2. Final Negotiated Rates

There are a variety of approved methods to determine an estimate of reasonable and necessary expenditures per unit of service being purchased. These include, but are not limited to, the following:

a. A total operational budget allocated to service component;

b. The published rates of the contractor for non-contract clients;

c. The established community rate for a similar service;

d. The previous year's audit; and e. The contractor's cost study.

3. Actual Cost

a. Actual cost reimbursement is based on a complete itemized listing of allowable program expenses.

b. The total itemized listing should equal the total DHHS funding in the contract.

4. Scheduled Reimbursement

a. Scheduled reimbursement - actual cost basis

(1.) Scheduled reimbursement on an actual cost basis is based on a schedule of costs or a line-item budget that is on file with the divisioni. Schedule shall include a statement | identifying the basis for reimbursement.

(2.) The schedule should include the total dollar amount allocated | to each program with compensation and reimbursable indicated.

(3.) The schedule should clearly indicate that payments are based | on actual expenditures incurred and no advance payments are allowed.

(4.) The schedule should indicate the anticipated date and amount | of each payment.

(5.) Invoicing requirements, expenditure reporting and payment adjustments shall be addressed in the sSchedule as applicable. |

b. Scheduled reimbursement-fee basis

(1.) The schedule shall include a statement identifying the basis for | reimbursement.

(2.) The schedule should sets payment limits for the funding | sources listed.

(3.) Contractors should submit invoices with documentation of services provided applicable to each of the funding sources. Payment on each invoice is limited to the corresponding amount on the payment schedule.

(4.) The schedule should indicate the anticipated date of payment, | amount of each payment, and total applicable funding

(5.) Payment adjustments shall be addressed in the Schedule if applicable.

F. Payment Limitations

The division/office may impose payment limitations on certain funding sources m o be able to maintain payment capabilities to all contractorsi and/or to levelize payments to contractors throughout the contract period. Payment cuts to contractors necessitated by payment limitations are restored in subsequent payments within the contract period. Common payment limitations include Monthly Cumulative and Quarterly Cumulative.

1. Monthly Cumulative

Payment to the contractoie is limited to 1/11 or 1/12 (to be determined by the division/office) of the maximum annual contract liability for each month of the contract on a cumulative basis- (e.g., at the end of the first month of a 12 month contract, the payment limitation is 1/12 of the contract liability; at the end of the second month the payment limitation for the two month period is 2/12 of the maximum liability, etc.)

2. Quarterly Cumulative

Payment to the icontractor is limited to one quarter of the maximum contract liability for each quarter of the contract on a cumulative basis (e.g., at the end of the first quarter, the payment limitation is 25% of the contract liability, at the end of the second quarter the payment limitation for the six month period is 50% of the maximum liability, etc.)

III. Development of Standard PCS Contracts (those executed on the Form OSP-1)

A. The DHHS standard is that CSS FOU-develops -all standard PCS contracts upon receipt of iiil authorizations from the DHHS divisionsierequesting such contracts.

NOTE:

CAPis the electronic system through which contracts are authorized, developed, reviewed, approved, and signed.

* The division requesting contract development shall submit ALL authorizations to CSS in electronic format.

* CSS shall develop and review contracts electronically.

* Division Director or designee shall review contracts and indicate approval of such electronically.

* ACO shall print contracts for manual signature by the contractors following electronic review and approval by division Director or designee.

B. The following procedures apply to development actions executed by CSS (for development actions executed by the division, proceed to C. below).

1. Division shall include the following in its authorization:eie eleeiieel ile

a. Completed lee Contract Authorization/Input Form, Form DHHS-9190

(1.) ar Most contracts must be entered into Arkansas Administrative Statewide Information System (AASIS) as an outline agreementa PO.

(a.) If the contract is to be entered into AASIS as a PO and 4f the division is doing itsth#if own AASIS entry, the division shall create the outline agreement in AASIS and enter the outline agreement number on the Form DHHS-9190 as the contract number.

(b.) If the contract is to be entered into AASIS as a PO and CSSeei i is doing the division's AASIS entry, the division shall leave blank the contract number field on the Form DHHS-9190. ll e ll

(2.) Some Medicaid-related contracts are paid through a third party and are NOT entered into AASIS as outline agreements, in which case the division shall leave the contract number field blank. CSS shall enter a unique, division-specific, ten-digit contract number on the Form DHHS-9190 upon receipt of the authorization. The contract number shall be in the following format:

* 3-digit agency number (710 or 645)

* 2-digit division identifier (as identified in Form DHHS-9190 instructions, e.g., DM, etc.)

* 2-digit fiscal year (FY) identifier (e.g., FY05 would be "05", FY06 would be "06", etc.)

* 3-digit sequential numerical identifier starting with 001

(3.) Division shall clearly identify the geographical service coverage area in the "Purpose of the Action" portion of the form. Division shall identify the area in terms of actual counties served or geographical portion of the state (ex., northwest quadrant, etc.) as opposed to division-specific areas (ex., DCFS Area V, etc.) If the contract covers services for the entire state, division shall identify "statewide" as the service coverage area.

b. CSS approved performance indicators and evidence of CSS approval or division certification;

c. A copy of the contractor's EEO policy (or approved alternate statement), if the contract were competitively procured and exceeds $25,000.00.

d. Any other legal attachments, including required financial information;

e. Any additional information necessary concerning billing, forms the iecontractor -is required to use, procurement documentation, etc.

2. Upon receipt of the authorization, assigned CSS individual(s) shall review the authorization, consult with the contractor, complete the contract proposal, and review the completed proposal for technical compliance and completeness.

C.The complete standard PCS contract shall include the following items:

1.Form OSP-1;

a.it is ABSOLUTELY CRITICAL that the funding tally to the penny, that the funding split is accurate, and that the procurement methodology is correctly indicated !!! Failure to have 100% accuracy in any of these three crucial areas will result in the legislative review staff rejecting the contract!!

b. The contract name should be the complete, legal name of the contractor as opposed to the "doing business as" name. For incorporated entities, the legal name is found on the contractor's incorporation papers and on the Arkansas Secretary of State website (for Arkansas incorporated entities). The contract address should be the address of the legal headquarters, as opposed to the "remit to" address.

2.All attachments referenced on Form OSP-1;

All attachments should be numbered in sequential and consistent form. |

3.Form PCS-Dile eiii-Df (for applicable contracts over $25,000.00);

a. All disclosures requiring pre-approval by DFA should be resolved prior to completion of the contractiiiiii.

b. The Form PCS-Dile eiii

shall not be made a legal attachment.

4.Performance Indicators (Required for applicable PCS contracts over $10,000.00l ee);

a. Performance indicators require approval of CSS according to DHHS Policy 1066. This approval shouldeaft be in the form of electronic mail submission, in which case a copy of the e-mail submitting it should be attached to the approval.

b. For amendments or contracts using previously approved performance indicators, the division/effoe shallwiW provide certification of | performance indicators, in accordance with DHHS Policy 1066. If the division/office certifies for performance indicators previously approved by CSS (prior to the development of this contract), a copy of CSS's approval shall also be included e.

c.Performance indicators approval shall be made a legal attachment. CSS' approval and division certification should be included in supporting documentsee iil ll e e lel eiiiie eiile il ii.

5.Terms and Conditions, Forms DHHS-9193 and DHHS-9194;

a. This document contains the legal and financial terms of the contract. Form DHHS-9193 is for contracts with a non-state agency; Form DHHS-9194 is for contracts with a state agency.

NOTE: The state agency version (Form DHHS-9194) is applicable to contracts with other states' agencies (ex., OK, TX, MS, etc.).not just Arkansas' state agencies.

b. The Form DHHS-9193 or Form DHHS-9194 shalle

iil be the current version provided by CSS (as will be evidenced by the release date at the bottom of each page of the formii). Referral to and/or consultation with OCC is required if an alternate version eii is to be utilized.

c.This document shall be made a legal attachment.

6.Budget/Rate Information;

a. For contracts reimbursed on an Actual Cost basis

(1.) An itemized listing of allowable program expenses and justification are required elements. The total itemized listing should equal the total DHHS funding in the contract.

(2.) Each line-item expense should be identified as either compensation or reimbursable expense, and the total compensation and total reimbursable expense should be indicated on the itemized listing.

(a.) If subcontractor costs are included in the contractor's budget AND if those subcontractors are reimbursed on an Actual Cost basis, the subcontractor costs should be split between compensation and reimbursable as well, based on the subcontractor's budget that must be included in the contract. If subcontractor costs are paid on a fee basis, they shall be considered compensation.

(b.) Indirect Costs should normally be split between compensation and reimbursable by the same percentages by which the Direct Costs are split between compensation and reimbursable.

(3.) If the contract identifies purchased services to DHHS clients, (i.e. indicates or refers to service(s) by service name and service code on the Form DHHS-9190) the itemized listing should include:

(a.) service name(s);

(b.) service code(s); and

(c.) service unit definition(s).

(4.) The itemized listing of expenses shall be indicated on the Form OSP-1 or made a legal attachment.

b. For contracts reimbursed on a Fixed or Final Negotiated Rate basis

(1.) The contracted fee/rate schedule 4S-shall be included

(2.) If the contract identifies purchased services to DHHS clients, (i.e. indicates or refers to service(s) by service name and service code on the Form DHHS-9190) the itemized listing should include:

(a.) service name(s);

(b.) service code(s);

(c.) service unit definition(s); and

(d.) unit rate(s).

(3.) The schedule should indicate the number of units per service to be purchased, if applicable.

If the number of units per service cannot be evenly computed, the number of whole units possible should be indicated, along with a notation that payment cannot exceed the maximum liability.

(4.) For budget-based Final Negotiated rates, the rate schedule should include a notation that it is based on a budget that is on file with the divisionie. |

(5.) For non-budget-based Final Negotiated rates, the basis for the rate should be noted in the rate schedule.

(6.) Subcontractor |

costs should normally be considered as compensation for Fixed or Final Negotiated rate contracts.

(7.) The fee/rate schedule shall be indicated on the Form OSP-1 or | made a legal attachment.

Note: If the division/office has a specific request and justification for | including program-specific budgets and/or a full-disclosure budget as a part of the contract, they may be added as legal attachments. CSS will review the program-specific budgets, but not | the full-disclosure budgets.

c. For contracts reimbursed on a Scheduled Reimbursement basis

(1.) The schedule shall include a statement indicating the basis for the scheduled reimbursement (actual cost or fee basis).

(2.) For scheduled reimbursement on an actual cost basis, the total amount allocated to each program shall be indicated, with compensation and reimbursable identified.

(3.) The schedule shall indicate the total amount of applicable ifunding, the amount of each payment, and the dates of | payments. The first payment should be no earlier than three weeks after the effective date of the contract.

(4.) The schedule of payments should include expenditure reporting requirements and payment adjustment conditions, if applicable.

(5.) The schedule shall be indicated on the Form OSP-1 or made a legal attachment.

d. The method of reimbursement shall be correctly identified on the Form DHHS-9193 or Form DHHS-9194

D. Other elements may be required to complete the standard PCS contract. They include, but are not limited to:

1.Sole Source Justification;

Sole Source PCS contracts, except for those for performing artists and lecturers, must be justified.

a. For "Sole Source by law," reference the mandating legislation or the court order on page 1 of Form OSP-1.

b. For "Sole Source by Intent to Award", include a copy of OCC's approval, the advertisement, and the iie e dates the | advertisement ran.

c. For "Sole Source by Justification Approved by OSP," includeattacb | a copy of OSP's approval of the six-point justification.

d. The advertisement or justification and approvals shall not be made a legal attachment.

2. Prior Approval for CSP or RFQ Selection;

a. Prior approval from DFA is required for CSP and RFQ procurements (except for contracts for architect, engineer, land surveying, or legal services, in the case of RFQ.)

b. This prior approval shall not be made a legal attachment.

3.EEO Policy

a.Contracts that were competitively procured and that exceed $25,000.00 must include a copy of the contractor's EEO policy, or a statement from the contractor attesting that they do not have an EEO policy.

b.This information shall not be made a legal attachment.

4.Certification Regarding Lobbying, Form DHHS-9350;

a. Certification is required for all contractors that receive in excess of $100,000.00 in federal funds per Federal fund source per fiscal year. This pertains to all federal funds received by the contractor, not just the federal funds in this contract.

b. Certification should be indicated on Form DHHS-9350eiiieii, unless provided elsewhere in the contract, i.e., on the Form DHHS-9193 or Form DHHS-9194.iieii

c. Certification requires an original signature and date by the contractor.

d. Certification shall be made a legal attachment to the contract.

5.Funding Availability;

a. A Funding Availability statement should be added to any contract that has funding within the contract with effective dates (beginning and/or ending dates) that differ from that of the overall contract.

b. The Form DHHS-9196, Funding Availability, or any similar format that clearly states the necessary information may be used for this purpose.

c. The Form DHHS-9196 (or alternate format for the same purpose) iililiee shall be made a legal attachment to | the contract.

6.Matching Terms;

a. Specification of matching terms is required when funds included in the contract have a required match from state and/or local funds. (If the standard, OCC-approved Form DHHS-9193 or Form DHHS-9194 eii are utilized, no additional documentation | regarding matching arrangements is required.)

b. This specification shall be made a legal attachment.

7.Reimbursement Rate Increase Approval, Form DHHS-1951;

a. Rate increase approvals are not effective until the date of signature by the Governor of Arkansas on the Form DHHS-1951.

b. An approved Form DHHS-1951 is required for rate increases for services. Note exceptions in Chapter Nine of this Manual.

c. The Form DHHS-1951 shall not be made a legal attachment.

8.Independent Contractor Checklist, Form DHHS-9356; -

a. This form should be completed by divisioni if contractor is an individual or sole proprietor contracting to provide services.

b. This form is used to assess the status of the individual or sole proprietor as an independent contractor rather than a DHHS employee.

c. The Form DHHS-9356 shall not be made a legal attachment.

9.Waivers of Policy;

a. The requesting division/office Director or designee should obtainsufemit ee approvals for waivers of any DHHS promulgated policy tofrom the DHHS /OFA/Chief Fiscal Officer or designee l.

b. Waiver approvals shall not be made legal attachments.

10.Certificate of Authority from the Secretary of State; |

a. The Certificate of Authority or documentation of its issuance is required for contracts with out-of-state corporations transacting business in Arkansas, (see "Foreign Corporations Transacting Business in Arkansas" in Appendix)

b. If the out-of-state contractor does not provide services in Arkansas or is otherwise exempt -(see "Foreign Corporations Transacting | Business in Arkansas" in Appendix), a Certificate of Authority is not necessary.

c. This certificate shall not be made a legal attachment.

11.Suspension of the Rules Letter (see sample letter in Appendix); |

a. This letter is required for all contracts requiring legislative review that are submitted to DFA after the due-date due to DFA. |

b. This letter shall not be made a legal attachment.

12.Business Associate Agreement (BAA), Form DHS-4001;

a. BAA's, when required, are to be signed by the contractor to demonstrate their compliance with the Health Insurance Portability and Accountability Act (HIPAA) and included as legal attachments to the standard PCS contract.

b. BAA's are required for ALL new standard PCS contracts with the following divisions:

(1.) Division of Children and Family Services (DCFS);

(2.) Division of Developmental Disabilities Services (DDS);

(3.) Division of Behavioral Health (DBH);

(4.) Division of Health (DOH)

(5.) Division of Youth Services (DYS); and

(6.) DMS.

c. BAA's are required for new standard PCS contracts with the following divisions ONLY IF those contracts deal with protected healthcare information (PHI)t:

(1.) DHHS

(2.) OFA

(3.) OCC

d. BAA's are NOT required for new standard PCS contracts with the following divisions:

(1.) Division of Childcare and Early Childhood Education (DCCECE);

(2.) Division of Services for the Blind (DSB);

(3.) Division of Volunteerism (DOV);

(4.) Division of County Operations (DCO); and

(5.) Division of Aging and Adult Services (DAAS).

13.Tobacco Settlement Attachment. |

In accordance with Act 1586 of 2003, standard PCS contracts funded by Tobacco Settlement funds (which shall be clearly identified on the Forms OSP-1 - and categorized as "Other"), shall include a legal attachment stating:

"The Division of______________is not obligated to continue funding this contract paid from the proceeds of the Tobacco Settlement in the event that Tobacco Settlement funds are not sufficient to finance the contract. State funds will not be used to replace Tobacco Settlement funds when such funds expire unless appropriated by the General Assembly and authorized by the Governor."

IV.Signing and Routing of Standard PCS Contracts

A. The division shall secure electronic approval of the division Director or designee on the contract proposal.

B. CSS ACO shall secure the signature of the contractor on the contract proposal.

C. CSS shall route the signed contract to Records Management Unit (RMU) for processing.

D. RMU shall route to DFA those contracts for which DFA review is required.

V.Legislative and DFA Review of Standard PCS Contracts |

A. Following their review of the standard PCS contract, DFA will forward those | contracts that are over $25,000.00 for legislative review at the next regularly scheduled Review or PEER subcommittee meeting.

a. Review Subcommittee usually meets the first Wednesday of each month.

b. PEER Subcommittee usually meets the first Thursday of each month.

B. It is very important for the division to have knowledgeable representatives | in attendance at the committee meeting to answer programmatic and budgetary questions about the specific contracts on the agenda as well as more general questions concerning the entire program. Typical questions that can be anticipated include:

1. What was the procurement method?

2. If the procurement were Sole Source, why was a competitive method not utilized?

3. If the procurement were competitive, how many responses were received and | how did the other responses compare to that of the selected entity (including, at times, the relative comparison of cost proposals)?

What are the services being provided and how will contractor performance be monitored?

5. Where are the services provided?

6. What source of funding is being utilized, and what are the future plans for this program?

7. lf an out-of-state contractor were selected, what steps were made to find a qualified in-state vendor?

C. Upon completion of their review, the Review and PEER Subcommittees will send | their recommendations to the Legislative Council for consideration.

D. Legislative Council, which usually meets the third Friday of each month, reviews the | contract and provides OSP a report on their review and their findings as to the propriety of the contract.

E. Following receipt of the Legislative Council's reporti, DFA will approves or denyies the PCS contract.

VI.Entry of Standard PCS Contracts into AASIS

A. For athese standard PCS contracts over $25,000.00 e eilie eee iI:_T

1. Upon approval of the contract by DFA, division shall approve the outline agreement, if necessary.

2. CSS shall coordinate OSP's approval of the outline agreement.

3. Contract Management Unit (CMU) or the division shall create the PO, if applicable.

4. CSS shall coordinate OSP's approval of the PO, for those PO's CMU creates.

B. For a standard PCS contracts $25,000.00 and under: |

1. Upon approval of the contract by DFA, division shall approve the outline agreement, if necessary.

2. CMU or the division shall create the PO, if necessary.

NOTE: The PO must ele accurately reflect the standard PCS contract in every | aspect, including the compensation/reimbursable breakout, contractor name and address, and total funding.

VII. Distribution of Standard PCS Contracts

A. Upon approval of the contract by DFA, RMU shall ill receive the original approved contract from DFA and post it to the DHHS Contract Archival System (CAS).

B. RMU shall distribute a copy of the signed contract to the contractor.

C. RMU shall notify the division, the CSS Supervisor, and CMU that the contract is available on CAS.

D. RMU shall maintain the T-he-original contract le iie on file iin the Records Room. All requests for contract information from the RMURecords Room should reference the contract number.

VIII. Amendments to Standard PCS Contracts

A. Timeframes

Amendments to standard PCS contracts should adhere to the same timeframes outlined for the development of new contracts.

B.General Amendment Requirements

1. Amendments to standard PCS contracts are required when any element on the Form OSP-1 or any of the legal attachments is revised to the extent that it materially affects the contractor or DHHS in any way. The contracting parties shall mutually agree upon amendments.

2. Contracts can NOT be amended to add services that are outside the realm of the procurement for the original contract (ex., a division CANNOT procure for counseling services, develop a contract for counseling services, then add therapy services to the contract at a later date just because the need arises.)

3 Minor revisions or administrative corrections that affect only the internal administration of a contract do not require an amendment; these may be accomplished as "change" actions.

4. Changing a contractor's Taxpayer Identification Number (TIN) cannot be accomplished as a -change- or an amendment. To change a contractor's TIN, the contract with the former TIN must be closed and a new contract with the new TIN must be created.

For this to be allowable without re-procuring, however, iethatr-the new contractor must be is-stiW-virtually the same as the former in every respect except for the TIN. The new contractor shall complete a Form PCS-D, if required, -aftand an individual authorized by the contractor shall signsigfis an affidavit attesting to the following:

a. {44 There has been no material change in ownership and the new contractor, although its corporate name may be different, is the same as the former contractor except for the TIN, AND

b. T[GREATER THAN] The new contractor will abide by all terms stated in the underlying | procurement document(s) and any response(s) made by the original contractor.

If the new contractor is NOT virtually the same as the former contractor and/or the new contractor does not sign the affidavit, the divisioneshallmust re-procure.

5. PCS contracts that have expired cannot be amended.

6. An amendment to extend a standard PCS contract is allowable only if the original contract contains language supporting the extension (the extension clause is found in Section 12 of the Form OSP-1) AND if the procurement included information relative to the extension possibility.

NOTE: The extension period added to a contract by an amendment should not cross the biennium.

7. All amendments to standard PCS contracts that add money require an amendment to the corresponding outline agreement and PO in AASIS, if applicable.

8. For every amendment to applicable PCS contracts over $25,000.00, a current signed and dated Form PCS-Dile eiii- shall be submitted for the contractor and all subcontractors receiving over $25,000.00 who are affected by this amendment.

9. Amendments to PCS contracts are not binding until they are approved and ie by the DHHSOHS Director or designee and contractor and approved by DFA, if applicable.

10. The effective date of an amendment to extend an otherwise expiring contract shall be no later than the expiration date of the expiring contract.

11. Divisions should initiate all amendments, except for those necessitated for administrative purposes only and for amendments to contracts for the Together We Can (TWC) program.

12. For every amendment, the division should submit an electronic authorization to CSS to develop the amendment. (In those instances where the division developed their own PCS contract, they shall also develop the amendments to that contract.)

C. Development of Amendments to Standard PCS Contracts

1. The following procedures apply to amendment development actions executed by CSS (for amendment development actions executed by the division, proceed to 2. below).

a. The amendment authorization from the division is required to include:

(1.) Completed Form DHHS-9190

(2.) Any revised or additional attachments to the Form OSP-1, if applicable

(3.) Approval/certification of performance indicators |

(a.)Performance Based Contracting Certification

completed by division/office staff, for current, unchanged performance indicators (the Form DHS-1366 may be used for certification.)

(b.) CSS approval for new or revised performance | indicators

b. Upon receipt of the amendment authorization, assigned CSS | individual(s) shall review the authorization, consult with the contractor, complete the amendment proposal, and review the completed amendment proposal for technical compliance and completeness.

2.The complete amendment package shall include:

a.Amendment to Professional or Consultant Services Contract, (Form OSP-1A)

NOTE: It is ABSOLUTELY CRITICAL that, if applicable, the funding tally to the penny and that the funding split is accurate !!! Failure to have 100% accuracy in either of these crucial areas will result in the legislative review staff rejecting the amendment!!!

3. Other elements that may be required to complete the amendment include but are not limited to the following:

a.Form PCS-D

All amendments to non-exempt standard PCS contracts greater than $25,000.00 require disclosure on the contractor and on all subcontractors receiving over $25,000.00 who are affected by the amendment.

b.Performance Based Contracting Certification

This is required from divisioni for current performance | indicators not changed by this amendment. Form DHHS-1366 may be used for this purpose.

Note: New or revised performance indicators require current CSS approval.

c. New or Revised Attachments

Any new or revised attachments to the Form OSP-1 should be included and referenced appropriately on the Form OSP-1 A.

(1.) An attachment is considered "new" when it is being added to the contract with this amendment. A new attachment "stands on its own" and does not replace any attachment that is already in the contract. A new attachment should be numbered consecutively in accordance with the existing attachments and should reflect an effective date commensurate with the effective date of the amendment.

(2.) An attachment is considered a "revision" when it replaces an attachment that is already in the contract. It should be assigned the same attachment number as the attachment it replaces and should reflect an effective date commensurate with the effective date of the amendment.

(3.) An attachment is considered an "addendum" to an existing attachment when it is being added to the contract with this amendment. An addendum is similar to a "new" attachment in that it does not replace any existing attachment BUT it closely relates to an existing attachment to which it is made an addendum. An addendum should be numbered as a subset of the relative attachment (ex., Attachment 1a, or Attachment 1, Addendum 1.) An addendum should reflect an effective date commensurate with the effective date of the amendment.

Reimbursement Rate Increase Approval,

d.Form (DHHS-1951)

An approved Form DHS-1951 is required if the amendment increases rates for services. Note exceptions in Chapter Nine of this Manual.

e.Suspension of the Rules Letter

This letter is required for all amendments requiring legislative review that are submitted to DFA after the dye-date to DFA (see sample letter | in Appendix).

f.Certification Regarding Lobbying, Form DHHS-9350eiiieii

This certification is required if the amendment results in contractor's funding exceeding $100,000.00 in federal funds per federal fund source per fiscal year. Certification should be indicated on Form DHHS-9350, unless provided elsewhere in the contract, i.e., on the Form DHHS-9193orFormDHHS-9194.

4. Signing and Routing of Amendments to Standard PCS Contracts Same as for standard PCS contracts above.

5. Legislative and DFA Review of Amendments to Standard PCS Contracts

An amendment to a standard PCS contract requires review and approval by DFA, and review by the Review or PEER Subcommittee if, and only if:

a. The original contract required review and the amendment increases the dollar amount to a resultant total that is higher than any amount previously approved by DFA; or

b. The original contract did not require review but the amendment increases the total to exceed $25,000.00.

6. Entry of Amendment to Standard PCS Contracts into AASIS

Upon approval of the amendment, CMU or division shall revise the outline agreement and PO accordingly, if necessary.

7. Distribution of Amendment

a. Upon approval of the contract by DFA, RMU shall receive the original approved amendment from DFA and post it to CAS.

b. RMU shall distribute a copy of the signed amendment to the contractor.

c. RMU shall notify the division, the CSS Supervisor, and CMU that the contract is available on CAS.

d. RMU should maintain the original contract on file in the Records Room. All requests for contract information from the RMU Records Room should reference the contract number.

IX. Changes to Standard PCS Contracts

A. Minor revisions or administrative corrections may be accomplished by aft iii -change- action. -Change- actions affect only the internal administration of a contract and do not materially affect the contractor or DHHS in any way.

1. Any change in financial amount (either an increment or decrement in total obligation or a zero-sum reallocation of compensation and reimbursable expenses) MUST be executed as an amendment action.

2. Any change in the percentage of state/federal funds MUST be executed as an amendment action.

3. Any change that creates a material impact on either contracting party MUST be executed as an amendment action.

B. CSS shalleel develop -change- actions for all standard PCS contracts upon receipt of iiil authorizations from the divisionierequesting such -change- actions. For those contracts that are developed by the division/office, e--e l the division/office shall develop the -change-action.

C. The following procedures apply to change actions executed by CSS (for change actions executed by the division, proceed to D. below).

1. Division shall submit authorizations electronically. Required elements for the authorization for CSS to develop a change action include:

a.Form DHHS-9190; and

b. Explanatory memo explaining change, if necessary,

2. Upon receipt of the authorization, assigned CSS individual(s) shall review the authorization, notify the contractor of the change, complete the change proposal, and review the completed proposal for technical compliance and completeness.

D. The complete -change- packet shallii include, at a minimum:

1.iiI Form (DHHS-9190;)

2. Copy of written notification to the contractor advising of the change; and

3. Explanatory memo from division/office requesting change, if applicable. |

E.E-.- ACO should submit the completed change proposal to CMU and should notify Supervisor/designee of completion of the assignment. Ieelee eilie il ee -iii-lliiliil il

F. Upon receipt of the change packet, CMU should:

1. Verify completeness of the -change- packet (andl-----forward

Il incomplete change proposals l to the CMU Manager for resolution);

2. Input the -change- into the system_T and initial the Form DDHSHHS-9190;

3. Forward the original -change- packet to RMU for inclusion in the contract; and

4. Forward a copy of the initialed Form DHHS-9190 to the ACOCOv's Supervisor, upon which .-Supervisor shall wtW-forward copies to the ACOCOv and the division.

X. Line Item Adjustments to Standard PCS Contracts

A. Policy

1. Line item adjustments pertain to actual cost reimbursement contracts only and do NOT«©t changeaffect the total reimbursable expenses, total | compensation expenses, or total liability of the contract.

2. Line item adjustments should have prior approval from CSSeeiee before adjustments are implemented.

3. If deviation from the amount budgeted will not exceed $500.00 or 10% of the line item from which funds are being moved (whichever is greater), no line item adjustment is necessary.

4. An amendment, rather than a line item adjustment, -is required for any | budget revision that:

a. Affects the total liability of the agreement;

b. Affects the overall rate per unit of service;

c. Changes totals of compensation and/or reimbursable expenses;

d. Adds a new fund source (fund, fund center, or commitment item); or

e. Affects the contractoie or DHHS in a material way. I

B. Procedure

1. Line item adjustments should be initiated by the divisionie or by the contractor (in which case the division/office should indicate approval on the line item adjustment authorization.)

2. CSS shalll develop line item adjustments for all PCS contracts that CSS developed upon receipt of electronic iiil authorizations from the divisionsie requesting such line item adjustments. For those contracts that wereafe developed by the divisioniee--e l, the division/office shall develop the line item adjustments.

3. The following procedures apply to line item adjustments executed by CSS (for line item adjustments executed by the division, proceed to 4. below).

a. Division shall submit authorizations for line item adjustment electronically. Required elements for the authorization for CSS to develop a line item adjustment include:

(1.) Request from the division; and

(2.) Revised budget reflecting the adjustment.

b. Upon receipt of the line item adjustment authorization, assigned CSS individual(s) shall review the authorization, consult with the contractor, review the revised budget for technical compliance and completeness

4. The completed line item adjustment shall include:

a. Division's request for a line item adjustment;

b. Revised budget with indication of CSS' approval added

5. CSS shall distribute approved line item adjustment as follows:

a. Original shall be submitted to RMU;

b. Copy shall be sent to contractor;

c. Copy shall be sent to ACO.

XI. Stand-alone PO's for Professional and Consultant Services

A. General requirements for stand-alone PO's for professional and consultant services÷

1. Divisions typically negotiate with the contractor the terms of the stand-alone PO's.

2. Any PCS contract that DOES NOT exceed $25,000.00 in compensation | should be executed in the stand-alone PO format. A division may, however, if circumstances warrant, execute a PCS contract that does not exceed $25,000.00 as a "standard PCS contract" on the Form OSP-1.

Agencies shall NOT split known quantities into smaller | ($25,000.00 and below) amounts to avoid a standard contract.

3. Stand-alone PO's require neither DFA review and approval nor legislative | review. However, multiple PO's to the same contractor in the same fiscal year from the same cost center MUST be reported to OSP to assist OSP in determining whether an agency is issuing multiple PO's in an attempt to circumvent the requirement of establishing a standard PCS contract.

4. Procurement regulations apply to stand-alone PO's just as they do to standard PCS contracts, including the requirement for prior approval by OSP foref any procurement method other than CB.

5.Performance lindicators

a. Performance indicators are required for stand-alone PCS PO's except for those which are as followslieel:

(1.) -li Procured by the Sole Source by Law method;

(2.) -le ie Eexecuted as Emergency | contracts;

(3.) -l- Ffor Architectural and Engineering | services, which are awarded using ABA criteria; or

(4.) -l Ffor $10,000.00 or less

b. Performance indicators shall beam added to stand-alone PO's in the following manner:

(1.) The division/office shall review the Contractor Certification Concerning Performance,- (Form DHHS-9353

for a PO with a state agency or Form DHHS-9354 for a PO with a non-state agency) with the contractor and secure the contractor's signature on the Form DHHS-9353 or DHHS-9351 eiii. (A Form DHHS-9353 or DHHS-

9354eiii with an original signature is required for each and every stand-alone PO for professional and consultant services above $10,000.00.)

(2.) Division shall attach aA copy of the applicable performance indicators ll o the Form DHHS-9353 or DHHS-9354eiii as Attachment I to the PO. (-l CSS approval of performance indicators is required, as it is for standard PCS contracts.)

(3.) Division shall retain tThe original Form DHS-9353 or DHS-9354eiiill i in the division/office files.

5. For those stand-alone PO's for professional and consultant services funded by SSBG, the division/office shall obtain the contractor's signature on the Certification of Compliance for Social Services Block Grant (SSBG) Funding, Form DHHS-9357.

a. One signature per contractor per fiscal year is sufficient. If a contractor has more than one PO with SSBG funding, a copy of the signed certification for each subsequent PO is sufficient. Faxed signatures are acceptable.

b. The division/office shall retain the original Form DHHS-9357eiii in their files, giving a copy to the contractor.

c. In creating the PO in AASIS, the creator shall add the following text: "Vendor must adhere to all State and Federal laws and regulations applicable to Social Services Block Grant funding."

6. Stand-alone PO's for professional and consultant services require BAA's | under the following conditions:

a. Those for the following divisions require BAA's IF the PO deals with PHI:

-DCFS-

-DDS

-DBMHS

-DOH

DYS

-DMS

-OFA

-OCC

* OST eie Ie eliee

ele ii

b. Those for the following division do NOT require BAA's:

DCCECE

-DSB_T

D-DOV

* -DCO

DAAS i*

7. For sStand-alone PO's for professional and consultant services that contain Tobacco Settlement funding-, division shall add the e e following text eo the PO in AASIS:

B.Development of Stand-alone PO's for Professional and Consultant Services

1. Upon selection of a contractor through appropriate procurement means and after direct communication with the contractor concerning the terms of the agreement reached, the division/office shall enter a requisition into AASIS | reflecting all of the details that need to be incorporated into the PO.

2. Division/office shall create their own PO in AASIS from the requisition or forward the requisition in AASIS to CSSMU for the creation of the PO.

XII. Site Visits for PCS Contracts |

A. Definition

Site visits are a means of on-site contract monitoring by CSSF-OU of the following:

1. All ose-PCS contracts over $5,000.00 developed by CSS; and

2. Tthose PCS contracts over $5,000.00 liiiie hat contain SSBG funding which are developed by the division.

Site visits are not required for ABA-related PCS contracts.

B. Purpose

The purpose of site visits is to monitor contract activitys and assist contractors in achieving and maintaining compliance with billing and client eligibility requirements of the contracts. Site visits address fiscal, administrative and legal | advisories and eligibility/billing audits.

C. Policy

For each applicable PCS contract requiring a site visit, ACOCOr should make a minimum of one site visit per contract year. This pertains to standard PCS contracts as well as stand-alone PCS PO's.

XIII. Billing for PCS Contracts |

ArFor those PCS contracts developed by CSS, CSS shall:

A. Provide instructions on billing, if necessary;

B. Explain any special requirements for specific funding sources (ex., SSBG);

C. Supply billing forms or letter bill format, if necessary

XIV. Records Retention for PCS Contracts

A. DHHS should retain all PCS contract information for a minimum of five years after the contract ends or is terminated. Contracts containing HIPAA-related information must be retained for a minimum of six years. This includes, but is not limited to, the following information:

1. Original contract, amendments, and all related documents, correspondence, etc.;

2. Contractor billings;

3. Site visit reports;

4. Audit reports and findings; and

5. Procurement documentation.

B. In the event any audit, litigation, or other action is initiated before the end of the five year period, records should be retained until all issues arising out of the action are resolved or until the end of the five (or six) year period, whichever is later.

CHAPTER ELEVEN INTRA-AGENCY AGREEMENTS

I. Policy

A. Intra-agency agreements are used when one DHHS division purchases services from another DHHS division.

B. In accordance with ACA 19-11-203, intra-agency agreements are exempt from the Arkansas Procurement Law and Regulations.

C. Intra-agency agreements require neither DFA nor Legislative review or approval.

D. General requirements for all intra-agency agreements include, but are not limited to, the following:

1. The initial term of an intra-agency agreement shall not extend past the end of the biennium.

2. Intra-agency agreements may be amended to extend for a total period of no more than seven (7) years.

E. Intra-agency agreements are NOT entered into AASIS as PO's. Instead, the service division is paid by the funding division by the funds transfer mechanism.

II. Procedures

A. The DHHS standard is that CSS develops all intra-agency agreements upon receipt of authorizations from the funding division requesting such actions.

B. The authorization from the funding division is required to include:

1. Completed Contract Authorization/Input Form, Form DHS-9190

2. If desired by the funding division, CSS-approved performance indicators and evidence of CSS approval or funding division certification; and

3. If desired by the funding division, any other legal attachments

C. Upon receipt of the authorization from the funding division, assigned CSS individual(s) shall review the authorization, consult with the service division, complete the agreement proposal, and review the completed proposal for technical compliance and completeness.

D. The complete intra-agency agreement shall include the following items:

1. Form DHHS-9197, Intra-agency Agreement

2. Any legal attachments required by the funding division

CHAPTER TWELVE

GRANTS

I. Procedures

A. For those contract payments processed through CMU, It takes approximately seven to ten working days from the time an invoice reaches CMU for a warrant to be printed and ready to mail. Before any invoice is approved for those payments processed through CMU, the following requirements must be met:

1. CMU should have access to the legal document for use in monitoring the payment request. All original signed contracts should be on file in the CSS Records Room and available in the archival system.

2. Each contractor should have a Request for Taxpayer Identification Number and Certification form (W-9) on file with OFA before payment can be processed. W-9 Forms may be obtained from the Internal Revenue Service office.

3. Providers should comply with the DHHS audit requirements as outlined in Arkansas Department of Health and Human Services Audit Guidelines. Copies may be obtained from

Arkansas Department of Health and Human Services Office of Chief Counsel Audit Section P.O. Box 1437-Slot S270 Little Rock, Arkansas 72203-1437

4. Invoices should be submitted to the division with which the contractor has a legal agreement unless the contractor is given other instructions.

5. The division should check all invoices and indicate their approval with a full, legible signature, date, and the words "Approved to Pay". These should be routed to CMU as soon as possible for processing.

B. Summary of DHHS Invoice Procedures

1.An original invoice is required to process a payment. If the invoice is handwritten (smaller companies), the invoice must have an original signature, title, and date.

2.The name of the company or payee must be on each invoice.

3.All services must be paid by way of a PO.

4.The PO number shall be indicated on the invoice.

5. All invoices must be billed to the agency.

6. The invoice must have a complete description of the goods or services being billed.

7. Invoices for services must have the date(s) of service.

8. The invoice must have the unit price and number of units billed or the lump sum price being billed; this information must agree with the terms of the |

applicable contract or sub-grant. The invoice must also include the total amount billed.

9. If two or more names, corporate entities and/or addresses are printed on the invoice (for example, in the case of collaboratives, coalitions, etc.) the letterhead used for invoices must be that specifically of the payee, matching the applicable Form W-9 and AASIS vendor number.

10. The invoice must not contain abbreviations. These are not standardized and may cause AP staff to return the invoice for explanation.

11. If the invoice is to be paid by direct deposit, the invoice should include the notation "DIRECT DEPOSIT" in the upper right hand corner.

12. If the invoice is to be paid separate and apart from other invoices, the invoice should include the notation "SEPARATE PAYMENT" in the upper right hand corner.

13. For contracts reimbursed on an actual cost basis, the invoice should identify all expenses as compensation or reimbursable.

14. CMU staff will correct payment requests submitted without all of the above information if possible. All verbal changes agreed to by the program division and the contractor/sub-grantee should be documented on the invoice. The CMU staff person should indicate "Approved to Pay," sign and date the request, and forward to AP.

15. Prior to the end of the state's fiscal year, CMU should submit information to all contract service providers and to all divisions regarding instructions for end-of-year billings.

II. Contractor Expenditure Reports

A. Contractors may be required by the terms of the contract to submit periodic expenditure reports. These reports should be submitted as required or payment requests will be held in a pending status. The format of the expenditure report should agree with the budget in the contract. Reports should be mailed to

Arkansas Department of Human Services Contract Support Section P.O. Box 1437-Slot W205 Little Rock, Arkansas 72203-1437

B. For contracts reimbursed on a scheduled reimbursement basis, CMU may reconcile actual expenditures against the payment schedule and offset scheduled payments, if required by the terms of the contract.

III. Monitoring for Contract Compliance

Requests for payment not complying with all terms of the signed agreement will be held in pending status by CMU or AP until resolved.

IV. Recovery of Overpayments

All recognized overpayments should be forwarded to the Accounting Supervisor, CMU. The Accounting Supervisor will draft collections correspondence for signature by the Assistant Director, CSS, and route recovery of funds through AR.

V. Settlements

All agreements that require settlement should be reconciled as soon as possible following expiration of the agreement. Each contractor should be notified in writing of all amounts payable or receivable requirements and the procedures necessary to accomplish the settlement.

VI. Internal Revenue Service (IRS) Levies

All IRS levies will be forwarded to CMU. The CMU Accounting Supervisor will receive and forward all payments specified to the IRS until notified that the levy has been satisfied or released.

State of Arkansas SECRETARY OF STATE

State Capitol Little Rock, Arkansas 72201-1094

FOREIGN CORPORATIONS TRANSACTING BUSINESS IN ARKANSAS

A foreign corporation may not transact business in this state until it obtains a Certificate of Authority from the Secretary of State.

The following activities, among others, do not constitute transacting business as stated in A.C.A. § 4-27-1501(B):

1. Maintaining, defending, or settling any proceeding;

2. Holding meetings of the board of directors or shareholders, or carrying on other activities concerning internal corporate affairs;

3. Maintaining bank accounts;

4. Maintaining offices or agencies for the transfer, exchange, and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities;

5. Selling through independent contractors;

6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

7. Creating or acquiring indebtedness, mortgages, and security interests in real or personal property;

8. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;

9. Owning, without more, real or personal property;

10. Conducting an isolated transaction that is completed within thirty (30) days and that is not one in the course of repeated transactions of a like nature;

11. Transacting business in interstate commerce.

Corporations which fail to obtain a Certificate of Authority may not maintain a proceeding in any court in this state based on a cause of action arising from the transaction of business and may be found liable for civil penalties ranging from $100 to $5,000.

For information regarding the application seeking authorization to do business in this state please write,

Secretary of State

Corporation Department

Room 058

State Capitol

Little Rock, Arkansas 72201-1094

(501) 682-3409

(DHHS letterhead)

DISCLOSURE PRE-APPROVAL SAMPLE LETTER

(date) |

Office of State Procurement

Arkansas Department of Finance and Administration

P.O. Box 2940

Little Rock, AR 72203

RE: Executive Order 98-04 Disclosure Requirements

Dear (name of reviewing party);

Attached is a copy of the Disclosure Form for: (provider's name).

This form indicates the following disclosure requiring pre-approval of DFA:

This agreement is a: (sub-grant or Professional/Consultant Services contract)

The terms of the agreement are: (beginning and ending dates)

The amount of the agreement is: (maximum liability)

The procurement method for this agreement was: (IFB, RFP-CSP, RFQ, Sole Source, QtheEmergency, Request for Application [for sub-grants]).fr If Sole Source or EmergencyQther-, indicate brief explanation for the Sole Source or EmergencyQther- determination.)

Please make a determination as to whether an agreement with this provider is | prohibited under EO-98-04. Please forward your response to: (sender's name, title, address, and FAX#.)

Thank you.

Sincerely,

(name)

(title) |

(telephone number)

I(DHHS Letterhead) REQUEST FOR

SOLE SOURCE PROCUREMENT FOR PCS CONTRACTS SAMPLE MEMORANDUM (must be in electronic format)

MEMORANDUM

TO: Joe Giddis, Director

DFA Office of State Procurement

FROM: Division Directoii

Director of (division name)______________iiii

DATE: (cu rre nt d ate)

SUBJ: Request for Sole Source Procurement

(re: Contract with American Center for the Study of Widget Policy)

1.Why is this service needed? Federal court enforcement of a settlement agreement which stipulated that a nationally-recognized "watchdog" organization be contracted for a five-year period to monitor this state's implementation of standardized protocols for the delivery of widget services to eligible clients.

2. What method(s) were used to determine that a lack of responsible/responsive competition exists for this service? Binding federal arbitration resulting from a class action lawsuit.

3. How was it determined that this provider possesses exclusive capabilities? During federal arbitration, plaintiff counsel recommended this organization as the most qualified. The recommendation was accepted by defense counsel, validated by the arbitrator, and included in the resultant federal court decree.

4. Why is this service unique? It is a mandatory element of judicial enforcement of a binding federal arbitration agreement.

5. Are there patent or proprietary rights that make the required service unavailable from other sources? No.

6. What would the agency do if the provider/service were no longer available and what, if any, program considerations make the use of a Sole Source critical to the successful completion of the agency's task? Coordinate through the assigned federal arbitrator to determine a replacement oversight agency acceptable to the plaintiffs counsel. If DHS fails to uphold the federal court decree pertaining to oversight of widget services, it will be held in contempt by the U.S. 8^th Circuit Court of Appeals. Sanctions might include loss of the state's share of federal funding from the Widget Service Block Grant ($2,947,368 for FFY02), as well as assessment of actual and punitive damages to aggrieved clients.

(DHHS Letterhead)

(date) SUSPENSION OF THE RULES

SAMPLE LETTER

The Honorable_______________, Co-Chairman

Committee on Review Arkansas Legislative Council 315 State Capitol Building Little Rock, AR 72201

SUBJECT: REQUEST FOR SUSPENSION OF THE RULES (CONTRACTOR NAME)

Dear Co-Chairmen:

I am requesting a suspension of the rules in conjunction with the required review process for the attached Professional Services contract because negotiation of the terms delayed its submission. Consequently a suspension of the rules is necessary in order to expedite the contract's effective date of_____________.

This contract, developed by the Department of Health and Human Services, Division of

______________________, proposes to provide

___________________ - (service)_____________________________

(Provide a clear explanation of the critical nature of the contract and the reason it could not be processed within the established timeframes)

Your favorable consideration and review of this contract is appreciated. Sincerely,

- (DHHS Director)

016.14.06 Ark. Code R. 003

2/22/2006