Settlement and Resolution of Contract and Breach of Contract Controversies

Section 1300 Section 1300.5530  Settlement and Resolution of Contract and Breach of Contract Controversies a)         Authority to Settle or Resolve Controversies The Procurement Officer who established the contract shall have authority to settle and resolve controversies but the Attorney General may set limits on such authority given to the Purchasing Officer. b)         Authority of Using Agency The OAG has the authority to accept delivery of goods or services in accordance with contract requirements as satisfactory adjustment of a complaint. c)         Substitution of Terms/Price Reduction If the vendor proposes to make an adjustment by: 1)         substituting an alternative specification, or 2)         reducing the contract price by a certain amount to compensate for some failure to provide full performance under the contract, such proposal must be referred to and approved by the Procurement Officer. d)         Cancellation for Breach of Contract In any of the following cases the Procurement Officer shall have the right to terminate or rescind any contract entered into under this Part: 1)         The successful bidder fails to furnish a satisfactory performance bond within the time specified; 2)         The vendor fails to make delivery at the place or within the time specified in the contract or as ordered by the OAG; 3)         Any goods or services provided under the contract are rejected (for example not meeting specifications, not conforming to sample, or not being in good condition when delivered) and are not promptly replaced by the vendor.  If there are repeated rejections of the vendor's goods or services, this shall be grounds for termination or rescission, even though the vendor offers to replace the goods or services promptly; 4)         The vendor is guilty of misrepresentation (for example, misbranding of food or drugs) in connection with another contract for the sale of goods or services to the OAG such that he cannot reasonably be depended upon to fulfill his obligations as a responsible vendor under any of his contracts with the OAG; 5)         The vendor: A)        is adjudged bankrupt or enters into a general assignment for the benefit of his creditors or receivership due to insolvency; or B)        disregards laws and ordinances, rules or instructions of a contracting officer; or C)        acts in violation of any provision of the contract or this Part; 6)         The contract conflicts with any statutory or constitutional provision of the State of Illinois or of the United States; or 7)         Any other breach of contract or other unlawful act by the vendor. e)         Cancellation for Fraud, Collusion, Illegality, Etc. The OAG may cancel any contract it established if there is sufficient evidence to show that: 1)         the contract was obtained by fraud, collusion, conspiracy, or other unlawful means; or 2)         the contract conflicts with any statutory provision of the State of Illinois or of the United States. f)         Withholding Money to Compensate State for Damages If a contract is terminated or rescinded under this Section, the OAG may deduct from whatever is owed the vendor on that or any other contract an amount sufficient to compensate the State of Illinois for any damages suffered by it because of the vendor's breach of contract or other unlawful act on his part on which the cancellation is based. g)         Damages The damages for which the OAG may be compensated as provided in this Section or by a suit on the vendor's performance bond or by other legal remedy shall include, but are not limited to, the following: 1)         the additional cost of goods or services bought elsewhere; 2)         cost of repeating the procurement procedure; 3)         any expenses incurred because of delay in receipt of goods or services; and 4)         any other damages caused by the vendor's breach of contract or unlawful act.