Current through Register Vol. XLI, No. 50, December 13, 2024
Section 99-6-10 - Contract Commencement10.1. With the exception of certain approved emergency contracts, the encumbrance date is the earliest date that a vendor may commence work on any contract. No authority may be given to the vendor or any other entity to commence work unless an encumbered contract has been processed by the division and received by the vendor. 10.1.a. In regard to construction projects, when an architectural or engineering (A/E) firm is employed, construction does not commence until such time as the division gives the contractor a Notice to Proceed. 10.2. Contract management provides for assurance that the state receives service or commodities meeting requirements before payment is made. Construction contracts are excluded by law. This function is the sole responsibility of the Purchaser.10.2.a. Except for government construction contracts, the division shall prescribe contract management procedures for contracts for commodities and services in the amount of $1 million or less. These procedures may include, but are not limited to: 10.2.a.1. establishing payment benchmarks to assure the division receives value prior to remitting payment; 10.2.a.2. conducting regular meetings between the division and vendor to assess contract performance; 10.2.a.3. training necessary division personnel to manage contracts. 10.2.b. For contracts for commodities and services in an amount exceeding $1 million, the following contract management procedures apply: 10.3. Post Award Conferences: The Director or his/her designee is responsible for administering the contract and shall hold a post award conference with the contractor to ensure a clear and mutual understanding of all contract terms and conditions and the respective responsibilities of all parties. The agenda for the conference shall include, at a minimum, the introduction of all participants and identification of the division and contractor key personnel and discussion of the following items: 10.3.a. The scope of the contract, including specifications of what the division is buying; 10.3.b. The contract terms and conditions, particularly any special contract provisions; 10.3.c. The technical and reporting requirements of the contract; 10.3.d. The contract administration procedures, including contract monitoring and progress measurement; 10.3.e. The rights and obligations of both parties and the contractor performance evaluation procedures; 10.3.f. An explanation that the contractor will be evaluated on its performance both during and at the conclusion of the contract and that such information may be considered in the selection of future contracts; 10.3.g. Potential contract problem areas and possible solutions; 10.3.h. Invoicing requirements and payment procedures, with particular attention to whether payment will be made according to milestones achieved by the contractor; and 10.3.i. An explanation of the limits of authority of the personnel of both the division and the contractor. 10.4. Monitoring: The Procurement Director shall develop a comprehensive and objective monitoring checklist which: 10.4.a. Measures outcomes; 10.4.b. Monitors compliance with contract requirements; and 10.4.c. Assesses contractor performance. 10.4.d. The division will conduct yearly audits on P-Card transactions and purchasing operations to be outlined in Appendix A. 10.5. Reports: The Procurement Director shall make the following reports to the Director on a schedule established by the Director, but not less frequently than once a year: 10.5.a. Status Reports: describe the progress of the work; track the organizational structure of the statement of work in terms of phases, segments, deliverables and products; and describe what work is complete and what work is pending and contrast that status against the contract schedule. If there are any unresolved issues that the division is contractually obligated to resolve, those issues should be included in the status report and a resolution should be requested. Weekly or Biweekly reports agreed upon by the Procurement Director and vendor. 10.5.b. Activity Reports: describe all activity on the project, regardless of whether substantial progress has been made toward completion of the project. If payment is based on the number of completed transactions, these activities must be specifically set out in the report. Monthly or as needed by the Procurement Director. 10.6. Inspection: Procurement Director reserves the right to inspect whether commodities delivered, or services provided conform to contractual requirements. 10.7. Encumbrances: The Procurement Director encumbers all purchase orders executed by the division over $25,000. Encumbrance is the process which ensures that funding is available for the payments relating to the specific purchase order or contract. 10.8. Requisitions are to include proper encumbrance information for purchase orders to be encumbered. The appropriate account(s) from which funds to pay for a contract will be documented prior to a contract being awarded, unless the contemplated contract is a type that cannot be encumbered. Open-end contracts do not need to be encumbered. 10.9. Prior to issuing a contract, the Procurement Director shall verify that the amount of funds encumbered is appropriate and that the account being encumbered matches what the Purchaser has requested. A contract or contracts must be encumbered prior to issuance in the following amounts: 10.9.a. One-time Purchases in Current Fiscal Year: A contract for onetime purchase to be completed in the current fiscal year must encumber the full contract amount. 10.9.b. Contract Spanning Multiple Years: A contract that will span multiple fiscal years must be encumbered for or in the amount of funds that will be spent under the contract in the current fiscal year; 10.9.c. Contract to Begin in a Future Year: A contract that will be awarded prior to the end of a current fiscal year but will become effective after that same fiscal year has ended is not required to encumber funds prior to issuance of the contract.10.9.d. Open-end and Statewide Contracts: An open-end or statewide contract issued by the Purchasing Division is not required to have funds encumbered prior to the issuance of the contract. 10.10. Changes and Cancellations: Occasionally, it becomes necessary to amend, clarify, change or cancel purchasing documents. 10.10.a. A contract change order is required whenever the change affects the payment provision, time for completion of the work and/or the scope of the work. 10.10.b. Changes to the original purchase order must be sequentially numbered in the appropriate space. The explanation of change to an existing contract must be described with sufficient detail and clarity that any individual could review and generally understand the contract and change. 10.10.c. Any change to existing contracts that adds work or changes contract cost, and were not included in the original contract, must be approved by the division. 10.10.d. Vendors shall not be permitted to perform work that the spending unit anticipates will be added to a contract through a change order until such time as the change order has been formally approved by the division. 10.10.e. Administrative changes to contracts may be made after the fact with subsequent approval by the division. However, it is preferred that such changes be made in advance, whenever possible. Examples of administrative changes include: 10.10.e.1. Changing a vendor name; 10.10.e.2. Changing a vendor's address; 10.10.e.3. Correction of a clerical mistake made by the state; 10.10.e.4. Adding a renewal/extension year that was originally contemplated in the contract, provided that no new commodities/services or increases in price are included; 10.10.e.5. Contract closeout where the quantity required was originally unknown or estimated, unit prices were included in the original contract, unit prices are not modified as part of the change order, and the quantity required was less than originally anticipated; 10.10.e.6. Inclusion of the Notice to Proceed documentation; and 10.10.e.7. Any other administrative change not included may be approved by the Procurement Director on a case-by-case basis. 10.10.f. Any change request of a purchase order in excess of ten percent (10%) of the original contract amount (aggregate) is strongly discouraged. The Director at his discretion, may grant a change in any amount if unforeseen circumstances have occurred and when such change is in the best interest of the division.