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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 firstname.lastname@example.org • Barbara Sohnen, Contract Specialist (303) 866-2862 email@example.com 25
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