1. DHHS COE Meeting Agenda Contract Compliance Reporting Contract Update Questions and Answers

2. Office of Procurement & Contract Services Quarter 2 – SFY 2016 Contract Report for Center of Excellence

3. Q2 - Average Number of Days Contract or Amendment Approvals (RFPs not included)

4. Q2 - Average Number of Days Contract or Amendment Approvals

5. Q1 & Q2 - Department Timely Approvals

6. Department Timely Approvals Q2 - Monthly Comparison Received for approval On or After the Effective Date

7. Q2 - Contract and Amendment Approval Times (RFPs not included)

8. Q2 - Divisions submitting all contracts prior to the effective date Division of Vocational Rehabilitation

9. Q2 - Compliance Rating Monthly Comparison In Compliance % 28 %

10. Q2 - Compliance Rating

11. Divisions with a Compliance Rating above 90% None Divisions with a Compliance Rating above 75% None Division with the highest Compliance Rating: Division of Public Health = 32%

13. Q1 & Q2 – Areas of Compliance ( RFPs not included) Areas of Compliance 2016Q1Q2 I - Timeliness Timely Approvals77%55% II - Approval Process Division Approvals98%100% Department Approvals98%90% III - Document Review Contractor Forms99%98% Worksheets90%100% IV - Contract Review General Cover97%84% Scope of Work75%53% Performance Measures82%86% Other Edits100%96% HR Salary & Fringe99%100% Contractor Budget92%100% Funding100% Other97%99% V - RFA,Q,P RF? Main Record99%100% RF? Evaluation Section100% RF? Contract Generation100%

14. SCOPE OF WORK The work to be performed under a contract or subcontract in the completion of a project. The description of the work to be performed is typically broken out into specific tasks with schedules and deadlines. Make a clear-cut division of responsibility between government and contractors The next several slides feature important scope elements for all contracts grant/procurements. Though some may be more applicable to certain contract types. Understanding and successfully applying these elements will produce a successful contract or agreement that you can be proud to sign and administer.

15. SCOPE OF WORK The scope of work should consist of highly tailored statements that answer the following questions: What is to be done? What are the deliverables? Who is going to do it? When is it going to be done? How will it be done? How can you tell when it is done? How much will it cost

16. SCOPE OF WORK Duties and Responsibilities Define the duties and responsibilities of both the entity awarding the contract and the subrecipient. Do not forget to include and clearly define the responsibility and authority of the employees that are charged with the administration of the contract or management of the project or both.

17. SCOPE OF WORK Timeframes Some contacts are unsuccessful not because the contractors fail to meet their objectives, but because they fail to do so in a timely manner, or within the agreed upon deadlines. Time schedules in any contract are as important as deliverables or payments. Always clearly specify contractor submission requirements. This technique prevents errors and misunderstanding. Examples of time frames are: –Within thirty calendar days after contract execution –Within five working days after the end of every month –Ten days after receipt of Agency recommendations –Specific date –Completed within one year from receipt of authorization

18. SCOPE OF WORK Tasks Tasks are the activities and milestones that need to be completed to accomplish the contract objectives. Tasks are the narrative description of the spectrum of services to be rendered or work to be performed. Tasks can be structured by milestones, deliverables, or process. Clear definition of the tasks is a must in order to reduce scope creep. Describes everything about the work that needs to be done under the task. Define all detailed requirements that are required in the delivered product or service.

19. SCOPE OF WORK Milestones Milestones are frequently used to monitor progress. It can be used for any contract but are primarily used with projects and IT related contracts. Milestones are tools used in project management to mark specific points along a project timeline. These points may signal anchors such as a project start and end date, a need for external review or input and budget checks, among others. In many instances, milestones do not impact project duration. Instead, they focus on major progress points that must be reached to achieve success. Milestones are like dashboard reviews of a project. Number of activities which were planned at the beginning of the project with their individual timelines are reviewed for their status. It also gives an opportunity to check the health of the project

20. SCOPE OF WORK Deliverables Deliverables are the “outputs” or the “end products” of the contract and are evidence of a contractor’s performance in meeting the contract requirements. Most deliverables take the form of a tangible product (written report, hardware, software, data, etc.). Deliverables should always be defined in the contract or in a separate mutually agreed document incorporated by reference in the contract. Since the definition of the deliverables is the primary yardstick for contractor performance, all other contractual protections rely upon this definition. Primary deliverables for grant contracts are usually reports. Deliverables should be: –Specific –Have clear instructions regarding their submission –Clearly define the manner and standards by which the Agency will determine whether they are acceptable

21. SCOPE OF WORK Outcomes, Changes Expected, End Results To the maximum extent practicable use the performance-based approach when acquiring services. Perhaps even more important is the basic premise of PBC: We should not be buying 'end products,' but rather the results of the products. This is especially true for information technology. We are not buying financial management software, for example, we are buying the results of that software - clean audits, closing the books within xx days of the end of a period, the ability to run ad hoc inquiries, etc.

22. SCOPE OF WORK Outcomes, Changes Expected, End Results Cont.’ Following this line of thinking, we can change the 'end product' to outcomes that measure the underlying reasons/ objectives for which the product was being acquired Another example is "software as a service" (SAAS), where instead of paying a software license fee, the agency pays for the results the product enables. Buy results, not things.

23. SCOPE OF WORK Writing Tips The following writing tips should help you produce high-quality documents that are clear and unambiguous: Be clear, precise and complete Choose one term to define the contractor’s obligations and use it consistently thereafter (e.g., “Subcontractor agrees...”). Use short sentence length. Use active voice, task oriented statements

24. SCOPE OF WORK Writing Tips Cont.’ Limit the length of a statement to three sentences or less. Avoid abbreviations, acronyms and words that have special meaning as much as possible, or define them in the definitions section of the contract, and then be consistent thereafter. Avoid using “any”, “either”, “and/or” and “never”.

25. SCOPE OF WORK Line Item Budget/Budget Narrative All grant contracts required a line item budget and a budget narrative. The Budget Narrative is the justification of ‘how’ and/or ‘why’ a line item helps to meet the program deliverables. It is also used to determine if the cost in the contract are reasonable and permissible. Milestone Payment, Deliverable Based Payments Milestone payment - % payment made according to progress or milestone Deliverable based payment - Payment made upon final outcome or deliverable The above types of payment methods are primarily used with procurement contracts

26. REMINDERS Peak contract season is approaching. To ensure that your anticipated start date is met please submit all contracts requiring review to OPCS at least 30 days prior to the start date. Review is done FIFO (First In First Out). Prior to Contracting Verify the Following: Contractor is active with the NC SOS. Contractor is not on the Suspension of Funding list managed by OSBM. Contractor is not debarred through State and Federal debarment list. New contractor or change is added to OW.

27. REMINDERS Please be reminded that contracts determined to be a purchase of service should fall in the account code of 532XXXX; whereas, those classified as a financial assistance should fall into the 536XXX account code. Always build and review your contract prior to submission to ensure that all selections, information and documents are complete. Reload is your Friend! Some of the compliance issues are generated from missing documents and information that you have entered but do no pull to the contract package due to a series of different actions you may have taken along the way. Accordingly, always review the entire contract and reload if necessary for a complete contract package.

28. Please manage your contracts. Do not allow your contracts to lapse. Please run reports and update your contracts to reflect the appropriate status (Draft, In Process, or Executed). Once the contract has been executed, a copy of the executed contract shall be uploaded in OW. Contracts with an IT Exception as listed below must be submitted to DHHS IT on the approved form along with supporting documentation and justification. DHHS IT will review and obtain approval from DIT. –Contract Beyond 3 Years –Limited Waiver (Brand Specific) –Waiver (Sole Source) –Used Another Agency Contract/Cooperative Agreement –Other

29. REMINDERS THE REQUESTOR SHALL NOT BUILD PROCUREMENT CONTRACTS IN OW. However, continue to create a shell and generate a system number in OW for your procurement contracts. Once the contract has been awarded you are to enter the remaining data elements and upload the executed contract. Using the OW system to build procurement contracts will cause rework and a delay in the contract review and approval process. Based on dollar delegation, these contracts are often required to be submitted to P&C and DIT in a specific format (MS WORD). Accordingly, you will need to send a hard copy of the contract/approval package and an electronic copy in word to OPCS.

30. UPDATES Please note the new proposed rules for Title 9 NCAS 03M: Uniform Administration of State Awards of Financial Assistance. Effective Date: June 1, 2016. http://www.ncoah.com/rules/register/Volume%2030%20Issue%2014%20J anuary%2015,%202016.pdf http://www.ncoah.com/rules/register/Volume%2030%20Issue%2014%20J anuary%2015,%202016.pdf Please refer to the UNC/NC DHHS Master Agreement handout for treatment of contracts under the Uniform Guidance, 2 CFR Part 200. This is especially helpful for the Application of F&A to NC DHHS Contracts. Note: The handout did not include indirect cost for “other funds” including receipts, local, private, endowments, etc. This guidance will be appended to also allow 10% on receipts unless there are caps or other restrictions on the funding source. All contracts should be “In -Process” not “Draft” when ready for final signature routing. Contracts in “Draft” will not be reviewed.

31. UPDATES Many of you have taken several of the procurement courses offered at State P&C. This is excellent as they have some really great classes. However, note that while some of their training is useful for both grant and procurement contracts, most of their training applies to procurement contracts Accordingly, prior to initiating a RFQ or RFP or major sole source, please contact OPCS upfront to discuss. Procurements are separate from Grants. Procurements will be routed to a dedicated procurement specialist. To help us better facilitate review and tracking of these contracts please clearly identify your submission package as a “Grant “or “Procurement”. Difference between Contracts and Grants http://science.energy.gov/grants/about/grants-contracts-differences/

32. NCAS For contracts requiring OPCS to Encumber or Encumbrances Outside of the Division Delegation. Always send a NCAS Header Sheet. If the contract has several funding streams/account lines, etc. please break out this information on a separate spreadsheet so that OPCS encumbrance officer will know how the PO lines are to be set up. Notify OPCS for Multi year contracts or contracts whereby funding will need to be encumbered passed SFY 2017. Please provide the correct NC Grant Code.

33. Open Window Division Contract Managers should report all issues or problems in the system to OW Support. If we do not know about the issue, it cannot be corrected and likely will also be a problem in other contracts. We understand it takes time to report the issue properly and have it resolved, but it’s important to correct issues as soon as they come up. When reporting an issue, we will need the contract number, preferably a screen shot of the page you are having the issue on and a detailed account of what you did to get you to the point you found the problem. Please remember to leave the contract record alone once an issue has been reported. In many instances, we cannot research or pinpoint the actual problem that is happening unless we can see it in action. Once a record is modified, unless we can recreate the problem, we may not be able to identify how to correct the issue.

34. NEW ON THE HORIZON ONE STEP RFA – Many of you were enthusiastic from the lean contract workgroup about having a one step RFA vs. the two step approach. It is in the final stages and will be released in the next couple of weeks. Remember, the template serves as a framework. Feel free to append as needed. Those of you who prefer to use two- step approach can continue to do so. OPCS website now features information for State Term and Agency Specific Contracts. These are contracts frequently used by the division and managed by State P&C or DHHS that will make it easier for you to contract. We are continuing to build this information, but hope to have it current over the next couple of weeks.