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Modifications of Contracts

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					Modifications of Contracts
        Part 1 – Use of Contract
             Amendments



 Office of State Controller, Central Contracts Unit (CCU)
                     February 16, 2011
  Contract Amendment Template
• CCU contract amendment template found in State
  Controller Policy, Modifications of Contracts – Tools
  and Forms at:
  http://www.colorado.gov/dpa/dfp/sco/contracts
  /contractpolicies.htm
• Office of the State Architect has its own contract
  amendment templates, which can be found at:
  http://www.colorado.gov/cs/Satellite/DPA-
  EO/DEO/1247524014223

                                                          2
   What is a contract amendment?
Contract amendments:
• modify, delete from, or add to the provisions of the
  original contract.
• are bilateral documents requiring the same reviews,
  approvals and signatures as the original contracts they
  modify.
   – Check with HR to determine if you need to update
     personal services review .
• can be used any time prior to termination or expiration of
  the original contract in place of other modification tools.
You cannot amend a terminated or expired
  contract!
                                                            3
   Contract Amendment header
Amendment #       Original Contract Amendment
                  CMS (CLIN) #      CMS #
• Box 1 identifies the amendment number. If this is the
  first amendment, enter “Amendment # 1.”
• Box 2 is used to cross reference the contract
  amendment to the original contract. Enter CMS/CLIN
  # and, if necessary to properly identify the original
  contract, enter your specific routing #.
• Box 3 should contain the CMS # for this contract
  amendment. Enter CMS # and, if necessary to properly
  identify this contract amendment, enter your specific
  routing #.
                                                      4
             Section 1 - Parties
• Enter the complete name of the Contractor as it is
  registered with the Colorado Secretary of State. This
  should match the Contractor’s name on the original
  contract, in COFRS and in CMS.
• If the Contractor’s name does not match in all
  places, you need to determine why and, if necessary,
  correct the appropriate information.


                                                      5
          Section 1 - Continued
• If the original contract has no CMS/CLIN or routing
   number, you must amend the first sentence as follows:
  “This Amendment to the Original Contract dated
   _________ between Insert Contractor's Full Legal
   Name(“Contractor”), and the STATE OF COLORADO
   (“State”) acting by and through the Insert Name of
   Agency/IHE, Insert Division Name or delete if not
   applicable, (“Insert acronym or abbreviated name for
   the Agency/IHE, Division, etc.”) (“Contract”) is entered
   into by and between Contractor and the State.”

                                                          6
      Section 2 – Effective Date and
             Enforceability
• Section 2 of the contract amendment template matches
  the Section 2 of the CCU’s personal services contract
  template.
• The contract amendment is not enforceable until is it
  approved and executed by the State Controller or
  designee (the “Effective Date”).
• The State is not liable for performance incurred prior
  to the Effective Date. Please note that for federal contracts
  which provide for retroactive reimbursement, you may need to
  modify this provision, which will require prior CCU approval.

                                                                  7
     Section 3 – Factual Recitals
• Enter a short description of the purpose of the
  original contract.
• Generally, the Effective Date of the original contract
  is included.
• Ex. “The Parties entered into the contract on June
  30, 2010 to enable CDOT to issue a grant to
  Contractor to conduct DUI enforcement activities
  approved for fiscal year 2010-2011.”

                                                       8
Section 4 – Consideration /Colorado
          Special Provisions
• If your original contract already contains the current
  version of the Colorado Special Provisions, you may
  remove the provisions agreeing to replace such
  Special Provisions and remove the reference to the
  Special Provisions in the header.
• The provision acknowledging adequate
  consideration for the contract amendment is
  necessary and should not be removed.

                                                       9
       Section 5 - Limits of Effect
• The purpose of this provision is to incorporate this
  contract amendment into the original contract.
• In addition, it states that the original contract and all
  prior amendments will remain in full force and
  effect, except as specifically modified by this
  contract amendment.




                                                          10
       Section 6 - Modifications
• This section is the meat & potatoes of the contract
  amendment where you specifically identify what
  you want to modify in the contract and how.
• Each modification should include the following:
   – A reference to the specific provision in the
     original contract being modified or if it is a new
     provision being added, identify the new section
     number being added to the original contract.


                                                          11
       Section 6 - Modifications
• Continuation of modification requirements:
  – When modifying a provision from the original
    contract, clearly state how the original provision is
    modified. Stating that “The contract is modified as
    follows” is not sufficient.You need to state how it is
    modified. Is the provision being deleted and
    replaced?
     • For example, “Section 5 of the Contract is hereby
       deleted in its entirety and replaced with the
       following:”
                                                         12
  Section 6 – Modifications cont.
• Continuation of modification requirements:
  – When adding a new provision, clearly state that
    the new provision is being added.
     • For example, “The following new Section 26 is
       being added to the Contract:”




                                                   13
  Section 6 – Modifications cont.
• Continuation of modification requirements:
  – If you are adding new exhibits to a contract using an
    OSC template, you need to:
      • In Definitions, amend the definition of “Exhibits
        and other Attachments” to add the new exhibit.
      • In General Provisions, amend the Order of
        Precedence to include the new exhibit, if
        necessary.
      • As directed above, clearly state that the new
        exhibit is being added to the Contract.
                                                            14
  Section 6 – Modifications cont.
• Continuation of modification requirements:
  – So that a third party can understand what the
    contract amendment is supposed to accomplish, you
    should include the reason for the change.
     • See example on next slide.




                                                    15
 Section 6 – Modifications cont.
• The parties want to add additional services to be performed and to
  increase the contract amount by $50,000. As a result:
   – Section 4(a) is hereby deleted in its entirety and replaced
     with the following:
     A. Maximum Amount. The maximum amount payable
     under this Contract to Contractor by the State is $100,000,
     as determined by the State from available funds. Payments
     to Contractor are limited to the unpaid obligated balance of
     the Contract set forth in Exhibit B.
   – Exhibit A is hereby deleted in its entirety and replaced with
     the attached Exhibit A-1 attached hereto and incorporated
     by reference into the Contract.
                                                                       16
  Section 6 – Modifications cont.
• Remember: you should only have one contract with
  one set of terms and conditions.
• All modifications in contract amendments should
  relate back to the original contract and its terms.




                                                    17
  Section 6 – Modifications cont.
• Think of your original contract like a puzzle:
                      1. Identify which piece you need
                           to replace or add.
                      2. Cross reference to the specific
                           piece being replaced or where
                           to insert the new piece.
                      3. If you cannot identify what is
                           being changed/added, you
                           need to use more specificity.
                                                           18
  Section 6 – Modifications cont.
• Do you need to replace the entire
  section/paragraph/exhibit?
   – For best practices, yes.
   – However, if you can properly identify the section of
     the puzzle piece being replaced so that a third-party
     could understand it, you can limit the replacement
     to such section.
   – If there is any question as to what is being amended,
     you should replace the entire
     section/paragraph/exhibit.
                                                             19
          Section 7 – Start Date
• Remember that the start date of an amendment
  cannot be earlier than the date it is executed by the
  State Controller.
• If you do not want the contract amendment to take
  effect on a later date, you should remove the phrase
  “Month, Day,Year” from the provision.




                                                          20
 Section 8 – Order of Precedence
• As written, except for the Special Provisions, the
  contract amendment elevates the provisions of the
  contract amendment over the provisions in the
  original contract.
• As written, the contract amendment automatically
  elevates the Special Provisions to the top of the
  order of precedence.
• If your contract includes ARRA, FFATA or other
  federal provisions, you may need to amend this
  provision.
                                                       21
     Section 9 – Available Funds
• This provision duplicates the “Fund Availability”
  Colorado Special Provision.
• Its primary purpose is to put all parties on notice of
  the limitations on the State’s financial obligations.




                                                       22
                Signature Page
• Contract amendments require the same approvals
  and signatures as the original contracts they modify.
• See the State Controller Policy, Signature Page – Form
  of, for permitted modifications to the template
  signature page and the State Controller Policy,
  Vendor Signature Authority, for requirements related
  to the authority of signatories.
• With few exceptions, the State Controller always
  signs last.

                                                       23
                     Exhibits
• Exhibits to contract amendments must meet the
  same requirements as exhibits to the original
  contract. They must:
  – Include “Exhibit ___” to “Amendment CMS # ___” or
    use some other appropriate method of cross reference to
    the document to which they are attached.
  – Include proper page numbering.
  – Manual changes to exhibits must adhere to standard
    contracting rules (Ex. Initial changes by parties and no
    whiteout or stickers).

                                                           24
                     Questions
  Office of the State Controller
  Central Contracts Unit
  633 17th Street, Suite 1500
  Denver, Colorado 80202
• RaLea Sluga, Central Contracts Unit Manager
  (303) 866-2127
  ralea.sluga@state.co.us
• Barbara Sohnen, Contract Specialist
  (303) 866-2862
  barbara.sohnen@state.co.us

                                                25

				
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