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DHHS Division of Contract ManagementContract Process Reviewfor Program StaffSteve Turner & Maryann Harakall

Meeting Objectives

• Ensure that all DHHS contracts contain measurable outcomes, meet clear performance targets and provide value to the people of Maine.

• Simplify and standardize the Department’s contracting process, such that drafting contracts is as straightforward as possible for DHHS staff.

• Ensure that key parties—with different areas of expertise—have the opportunity to review and sign off on all DHHS contracts.

• Create a predictable process that operates with a defined structure on an established timeline.

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Today’s Topics

• What a contract is and when it’s required• Types of contracts• Contract initiation – Preapproval

Process • Contract process• Rider A• The POCs

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What is a contract?

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What is a Contract?Contract Concepts•an enforceable agreement between two or more parties to perform a specified act• involves consideration – something of value that is exchanged by the parties• the promise in a contract is recognized by law as a duty; a remedy is prescribed if the promise is breached•ends when the terms are fulfilled (or fulfillment is not possible)

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Pacta sunt servanda (agreements shall be kept)

When is a Contract Required?• A contract is required to purchase a

service (i.e., not an item/commodity)• The law requires that procurement of

both goods and services be done through competitive bidding [5 M.R.S.A. §1825-B(1)]

• Statute also provides for very limited circumstances under which awards may be made on a non-competitive basis (sole-source)

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Purchasing ComplianceUnlawful Purchasing - is the procurement of a service or a commodity without following the State’s purchasing rules.•making open market purchases for items that are available through the warehouse or through a Master Agreement;•allowing a contractor to begin work before the contract is approved and finalized by the State Purchases Review Committee;

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Purchasing Compliance

Unlawful Purchasing - is the procurement of a service or a commodity without following the State’s purchasing rules (cont.)•allowing a contractor to continue working after a contract’s expiration date while an amendment is pending•assigning a contractor work that is not included in the scope of the contract to “use up” funds that were not needed to accomplish the original purpose

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Unlawful Purchases Statute5 MRSA §1819 - Unlawful Purchases. Whenever any department or agency of the State Government, required by chapters 141 to 155 and rules and regulations adopted pursuant thereto, applying to the purchase of services, supplies, materials or equipment through the State Purchasing Agent, shall contract for the purchase of such services, supplies, materials or equipment contrary to chapters 141 to 155 or the rules and regulations made hereunder, such contract shall be void and have no effect. If any such department or agency purchases any services, supplies, materials or equipment contrary to chapters 141 to 155 or rules and regulations made hereunder, the head of such department or agency shall be personally liable for the costs thereof, and if such services, supplies, materials or equipment are so unlawfully purchased and paid for out of state moneys, the amount thereof may be recovered in the name of the State in an appropriate action instituted therefor.

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Competitive Awards

Contracts: (When you need to RFP for a service)• $10,001 & above - Subject to Request

for Proposal (RFP)

For RFP Questions, contact

RFP.DHHS@maine.gov

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Competitive AwardsTemporary and Personal Services Contracts:• If the temporary service is more than 1000

hours/year, Chapter 155 applies (Call the Department of Administrative and Financial Services (DAFS) Division of Purchases for guidance)• If less than 1000 hours• Less than $2,500 – three telephone quotes• $2,500 – $10,000 – three written quotes• $10,001 to $25,000 – job descriptions faxed to all temp agencies• Over $25,000 – Request for Proposal

<$5k require the Information Sheet for Contracted Positions>$5k require the BP37TEMPPay only time worked (no holidays, etc.).

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Sole Source Justification

• Uniqueness: The supplies or services required are unique to a specific contractor

• Timeframe: Time is of the essence and only one known source can meet the Department’s needs within the required timeframe

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Sole Source Justification cont.

• Cost: The total cost of the acquisition is less than $10,000.00•$5,000 or less: competitive process/sole source justification NOT required•$5,001 - $10,000: • Sole Source• Letter of Solicitation • Release solicitation letter; Receive MIN of 3

bids; Pick lowest cost (DO NOT NEGOTIATE SUBSTANCE)

•$10,001+: RFP rules apply 13

Sole Source Justification cont.

• Emergency: The Bureau of General Services is authorized by the Governor or the Governor's designee to make purchases without competitive bidding because in the opinion of the Governor or the Governor's designee an emergency exists that requires the immediate procurement of goods or services

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Types of Contracts

Contract- The principal purpose of this relationship is to purchase, lease, or barter property or services for the direct benefit of the government. The relationship may be characterized as “buyer-seller”

• Services to the State (consulting, OIT, staffing, etc.)• Cooperative Agreement

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Types of Contracts

Grant – The principal purpose of this relationship is the transfer of money, property, services, or anything of value to the recipient in order to accomplish a public purpose of support – with no substantial involvement between the Department and the recipient during the performance of the activity

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Types of ContractsGrants – Settlement Methods (MAAP):• Fee for Service (no budget on state budget

pages)- A contract that is based upon a negotiated rate. Settlement is based on the rate times the number of units actually delivered.

• Cost Settled (has budget on State budget pages)- A contract that is based upon a program budget where the Department provides all or a portion of the total funding. Settlement is based on the percentage of the Department’s portion of net allowable expenses of the total program budget. 

*Maine Uniform Accounting and Auditing Practices for Community Agencies

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Types of ContractsContract Levels• Contract for Special Services (BP18)•A legally binding, written agreement between the Department and a provider used for contracting casual, intermittent or other special services for which the Department will pay the provider a maximum of $5,000 during the fiscal year; this level requires the BP18 signature form. This agreement is not renewable. 

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Types of ContractsContract LevelsContract to Purchase Services (BP54)• A legally binding, written agreement between the Department and a provider for $5,000 or more that contains a description of the services to be performed and the terms and conditions agreed to by the parties including, but not limited to, the cost of the service, payment terms, and settlement method. It may include a program budget. This level requires the BP54 signature form, Rider B and other applicable riders. An Agreement to Purchase Services is commonly referred to as an agreement and may be a contract, a grant, a cooperative agreement, or a MaineCare seed only agreement, depending on its purpose.

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Types of ContractsSettlement Type Not Subject to

MAAP ContractsCost Settled

ContractsFee for Service

ContractsService Examples Services to the

Statei.e. Consultants, coordinator, OIT

Direct client services

i.e. Crisis, HMP, Sexual Assault

Direct client servicesi.e. Case

management, rental subsidies

Reporting requirements

Program Reports, Performance Matrix

as needed

Program Reports,

Performance Metrics as

needed

Program Reports,

Performance Metrics as

neededN/A Quarterly

Financial ReportsN/A

N/A Agreement Close Out Report

(CS)

Agreement Close Out

Report (FFS)Payment Method Invoices must be

submitted based on actual cost base on: i.e. a) Allowable Expense Table  b) Deliverable Based   or  c) Rates d) other ~ please contact SPOC

Auto – equal monthly

payment based on DHHS Budget

forms

Invoices must be submitted for actual services delivered based on:  Rates

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Questions So Far?

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Contract Process

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Contract Pre-Approval ProcessAccountability Template:

• Provides an executive summary of your contract/service

• Summarizes key objectives to those outside of your field

• Supports clear and concise explanations• Confirms measurability and alignment of

objectives

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Contract Pre-Approval Process• Program will complete the tab on the spreadsheet

labeled “AT Summary Contract-RFPs”.• This form is submitted to your Office Director or

designee for approval.  Essentially, they are approving the concept for the contract and agree that it can move forward.

• Once approved by the Office Director or designee, you can begin working with us on the contract process (Rider A Outline).  We do not need to see/approve the accountability template.

• As a parallel process, the accountability template is sent to OCQI for review/feedback.

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Contract Pre-Approval Process

Rider A Outline

• Based on Rider A Template• Summarizes Deliverables• Summarizes Performance Measures• Forms basis for Rider A

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Contract Documents

All documents needed for a contract can be found on the Division of Contract Management’s website:

http://www.maine.gov/dhhs/contracts/

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Contract Process• Program drafts Rider A [2 – 4 weeks

(Steps 1 through 3)] •Draft Rider A based on approved outline• Proofread for typographical and grammatical errors

• Program determines if Rider E is applicable and establishes a payment method•Rider B—statewide terms and conditions language provided by DAFS•Rider E—program specific language

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Contract Process

Program submits Contract Package to DCM • Riders A and E (when applicable)• Payment terms• AAF* authorized by the PFO—to ensure allotment / funding is available• BP37XX

*For contracts not included in the approved allocation plan or when making a change to a contract on the plan*

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Contract Process

• DCM sends allocation letter to providers and reviews contract budget proposals for direct client service agreements [2 – 4 weeks]

• DCM Contract Relationship Manager (CRM) takes ownership of the project; partners with Program Administrator (PA) to assemble complete contract package [1 week]

• CRM and PA jointly proofread complete contract package for typographical, grammatical and formatting errors [48 hours]

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Contract ProcessCRM coordinates final review of contract package [1 -- 2 weeks] • Internal group approvals (For contracts worth more than $750,000 annually) • General Counsel (Kevin Wells or designee)• Audit Group (Herb Downs or designee)• OCQI – performance measures (Jay Yoe or

designee)• DCM Director / Deputy Director

• If contract exceeds $3 million annually, AG Office reviews [1 – 2 weeks]

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Contract Process

DCM coordinates execution of contract [4 weeks] • Send complete contract package to Provider for signature• Obtain Department signature of Provider-signed contract• Submit fully signed complete contract package to Division of Purchases• If contract exceeds $1 million on an annual basis, SPRC reviews• Once approved by DAFS (final), SPOC notifies Program and the Provider that work can begin

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Timeline For Encumbrance

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• See handout - SFY16 Contracts – Important Dates

Other Requirements

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Debarment Form• A Debarment Form is required for each vendor , per

VC number, who has a combined total of $25,000 or more in Federal funding.

FFATA Form• A completed Sub-awardee Information Form is

required for each vendor to whom we have committed a combined total of $25,000 or more in Federal funding to assure compliance with the Federal Funding Accountability and Transparency ACT (FFATA). 

Liability Insurance• Per Rider B, Section 21, Providers are required to submit a Certificate of Liability Insurance form. DCM cannot move forward in encumbering agreements until one is received.

Amendments• The Agreement Authorization Form (AAF)•Completed and sent to PFO (who validates source of funding)•Completed BP37AM and all documents being amended (typically Rider A and E) to the CRM•Any substantive change to contract terms

• Be sure to include information on any changes you’re making – i.e. changes to payment method, match requirements, deliverables, end dates etc.

• Requests for amendments must be submitted at least 30 days before the end of the contract.

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AmendmentsATTACHMENT AChanges to Agreement Terms and Conditions  Rider _ Section _ is deleted and replaced in its entirety with the following:  Rider _ Section _ is amended as follows: Original language:Revised Language:  Rider _ Section _ is amended by adding the following language after Page _ Paragraph _:

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Paperless ModificationsPaperless modifications can be done when no major changes that change any expectations/ requirements of the provider• Dollar amount does not change• End date does not change

Most common paperless modification requests are:• Changing program period• Changing unit code• Moving funding between lines (including between fiscal

years)

PAPERLESS MODIFICATIONS REQUIRE AN AAF FROM THE PFO

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Rider A

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Components of a Contract• Signature Page• Rider A - Scope of Work• Rider B – Payments and Other

Provisions• Rider D – Additional Requirements• Rider E – Program Requirements• Rider F – Budget/F1-F2• Rider G – Work Performed Abroad• Rider I – Assurance of Compliance• Rider Exceptions 39

Rider A TemplateSPECIFICATIONS OF WORK TO BE PERFORMED I. TABLE OF CONTENTS [Optional] II. DEFINITIONS III. INTRODUCTION/OVERVIEW [General description of purpose of contract with references to appropriate source materials such as grant, RFP, federal and state statutes and rules] IV. DELIVERABLES [Detailed description of specific deliverables with each deliverable under a separate subheading]

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Rider A TemplateV. PERFORMANCE MEASURES [List the acceptable results in terms of numbers, increase/decrease in numbers, percentages, increase/decrease in percentages, benchmark dates for the deliverable to be completed].

VI. REPORTS A. Detailed description of required reports. Reference and attach sample or template reports] B. The Provider shall submit reports in accordance with the specifications of the Department, according to the following schedule...

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Rider A - General Considerations

• Include essential characteristics• Exclude non-essential characteristics• Items not pertaining to this contract should not be included

• Clearly delineate vendor’s obligations•work to be performed• items to be delivered (and when)

• Clear, consistent, reproducible method for determining if requirements are met

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Rider A - General Considerations – Fuzzy Language• Support• Collaborate• Participate• Assist• Improve• Coordinate• Work closely with• In a timely manner

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Rider A - General Considerations – Fuzzy Language• Support Department in its efforts to reduce costs

• Collaborate with local agencies to improve outcomes of participants in program X

• Participate in quarterly meetings designed to assure alignment of the work of the two agencies

• Work closely with partners to meet their overall project needs

• Program language vs contract language – purpose vs activities

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Routine Considerations• The term “Provider” is used throughout• The term “Department” is used throughout• The term “Agreement” is used throughout• Acronyms are defined the first time and are used

throughout• Consistent formatting (including bulleted lists)• Page/Section numbering• Line/paragraph spacing• Spelling/punctuation

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Who to Contact

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PPOC vs OPOC

What the PPOC:• Provides a single point of contact a

specific program or service area.• Ensures that contract administrative

services are coordinated amongst the DCM team effectively and efficiently.• A translator, bridging communications

and terminology differences between program and the contract team.

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PPOC vs OPOC

What the OPOC:• Serves as liaison between DCM and

Program Office on technical issues.• Provides guidance on contract

process and procurement rules.• Directs questions to the appropriate

staff.

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Identifying the DCM Contact

• The Division of Contract Management’s website has a list of CRM and SPOCs by vendor as well as the OPOC and PPOC assignments. This list is updated weekly.

http://www.maine.gov/dhhs/contracts/contact.html

• Use the Allocation Database to search for the CRM and SPOC by provider.

Email Cheryl.Bickford@maine.gov for access. 50

Required Email Format

When sending an email requesting information or files for a new or renewal contract or an amendment to the CRM, follow these requirements:• Include the agreement number and

provider’s name in the subject line• Send one email per provider per

agreement•You can include the BP37, Rider A, etc. for the same agreement in one email, but DO NOT include documents for other agreements.

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Questions?

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