Contract Terms and Conditions

(1) The Office of the Comptroller will furnish "standard" contract terms and conditions to be used for all contingency contracts. Also the Comptroller's office will furnish "standard" terms and conditions to be used in each Interdepartmental Service Agreement required to support a contingency contract. Any modification to such standard terms and conditions requires the prior written approval of the Comptroller. (2) Contingency contracts, or Interdepartmental Service Agreements relating to contingency contracts, must be personally signed by the Comptroller. In a situation where the Comptroller's office is a party to a joint venture, the Comptroller will co-sign the contract after the signatures of relevant department heads, as members of the joint venture, are obtained. In a situation where the Comptroller's office had delegated in writing the authority to issue an RFP to other departments, the Comptroller will evidence final approval to such contracts bypersonallysigning the documents prepared by those parties. It is expected that a typical contingency contract may thus demonstrate multi-party participation and have requisite signatures from departments and the Comptroller's office. (3) All contingency contracts will specify the maximum obligation of the Commonwealth to the outside party. In addition to maximum obligation, contingency contracts may specify compensation as a percent of the increase of federal financial participation or other reimbursement only over the measurement basis. It is expected that most contingency contracts will be structured as a percent of the increase of federal financial participation or other reimbursement onlyover the measurement basis not to exceed the maximum obligation; however in some cases fee for service arrangements may be appropriate. Within the compensation structure, a differential set of percentages related to differential increments over the measurement basis is allowable. (4) All contingency contracts, including multi-year contracts will specify additional elements including but not limited to: (a) the time period for which the project or engagement will be undertaken, (b) the time period against which the measurement basis used to calculate the increased revenue associated with the contingency contract is applied, (c) an explicit (and if possible quantified) definition of the measurement basis for the contingency contract, (d) an explicit (and if possible quantified) reference to the expectations for base revenues and maximized revenues associated with the program for which the contingencyengagement is being undertaken, (e) specific performance criteria and definitions and timing of deliverables by the outside party, (f) specific criteria to determine the acceptance by the department of each deliverable, (g) an estimate of the increased revenue by source, (h) assignments of key personnel to be made by the vendor, and (i) procedures for resolving future period disallowances. (5) Each contingency contract can include as a deliverable: (a) the study of a program to evaluate and identify possible situations for federal or other revenue maximization, (b) a project to implement results of such studies, and (c) a combination of studies and implementation projects. All implementation projects must follow a study as described in 815 CMR 8.04(5)(a). (6) Contingency contracts determined by the Comptroller to be fiscal conduits are prohibited. Decisions as to the applicability of the prohibition to fiscal conduits shall be made by the Comptroller and the determination of the Comptroller in this matter will be conclusive. The Comptroller's Office may also issue supplementary guidance and individual interpretations in this matter. (7) Compensation will be paid to the outside party under a contingency contract or related interdepartmental service agreement after certification by the department, and approval by the Comptroller's Office, of both of the following steps: (a) it is determined that increased revenue over the measurement basis has been collected and such collection is confirmed through deposit to a bank account with the State Treasury, and (b) it is determined that a specified deliverable in the contract has been accepted. The amount of compensation to be paid after accomplishment of these steps will be governed by contractual terms. (8) Each contingency contract will contain explicit written directives to be applied in those circumstances, if any, when action outside the contracted time frame causes a change to the amount calculated under the measurement base. It is recognized that actions in a future period, may be applied retroactively and thus cause a change to amounts previously calculated under the measurement basis. An example of a possible future change that would decrease the initial measurement basis is the retroactive application of an audit disallowance; an example of a possible future change that would increase the initial measurement basis in the retroactive application of a rate increase. Each contingency contract must have written directives that will govern the effect of such changes on the measurement basis and thus on the compensation to the outside party.