CASBO October 4, 2002

www.cityofmiddletown.com

CASBO October 4, 2002

Phyllis Prokop, CPPBSupervisor of Purchases

City of Middletown, Connecticut


Contracts- basic Contracts- basic overviewoverview

For Purchasing Professionals-- Contracts and contract administration is the most difficult but necessary aspect of the job

A CONTRACT is the written document signifying an agreement between two parties—it details the promises or agreements for which the law has enforceable duties and remedies

CONTRACT ADMINISTRATION- the process by which purchasing ensures that the contract is performed in accordance with the stipulated terms


Contracts- continuedContracts- continuedContracts- continuedContracts- continued Contracts can be both Express or

Implied EXPRESS CONTRACT—can be written or

oral and must have elements of a formal contract

IMPLIED IN FACT CONTRACT – the elements occur through actions/conduct rather than words

PURCHASE ORDER is considered a contract


ESSENTIAL ELEMENTS OF A ESSENTIAL ELEMENTS OF A

CONTRACTCONTRACT CONSIDERATION OFFER and ACCEPTANCE OBLIGATION LEGALITY

COMPETENCY DEFINITIVENESS


TYPES OF CONTRACTSTYPES OF CONTRACTS

CONSTRUCTION SERVICE COMMODITY TERM TIME AND MATERIALS CONSULTANTS


UCC ENACTED 1952UCC ENACTED 1952

Contracts are regulated by UCC -provide uniformity in laws among states to support interstate commerce

All contracts over $500 - must be in writing deals only with sale and purchase of goods or sale

/purchase of REAL ESTATE— does not apply to services or intangibles

Duration must be greater than 1 year Application of reasonableness Distinguishes between Merchant and Non- Merchant PAROLE EVIDENCE RULE


Common law generally provides one remedy for a mistake

--- if mistake is not obvious, the party making the mistake is required to perform the contract if the other party wants it.

The party making the mistake may be relieved of the obligation to perform it under certain conditions

--- party accepting the offer may not enforce it if the offer contained is a mistake that was obvious or should have been obvious or detected.

MISTAKES IN MISTAKES IN CONTRACTSCONTRACTS


DUTIES AND OBLIGATIONS DUTIES AND OBLIGATIONS OF RECEIVEROF RECEIVER

Inspection : buyer must inspect goods in a timely fashion , defects must be reported promptly

Buyer has several options 1.) reject all goods 2) Accept all goods 3.) reject non conforming goods 4.) accept conforming goods

Latent Defects


PAROLE EVIDENCE RULEPAROLE EVIDENCE RULE

court will not admit evidence, either written or oral, of prior understandings or negotiations to vary or contradict the contract’s terms

***Verbal commitments cannot be used to modify or contradict a written contract.


IMPLIED WARRANTY—that the goods will meet certain standards, that they will perform as they are intended.

IMPLIED WARRANTY FOR A PARTICULAR PURPOSE—seller knows about the buyers needs , buyer is relying on sellers expertise /knowledge to provide product to fit purpose

Merchant and Non- Merchant– the UCC rule becomes extremely important in this scenario.

WARRANTIESWARRANTIES


BREACH OF CONTRACTBREACH OF CONTRACT

when party fails to perform in accordance with the contracts terms, the breach gives the other party a legal basis to pursue monetary damages

Lawsuits / Mediation Liquidated Damages Clause: they specify

a predetermined dollar amount assessed usually per day of delay

Performance Bonds


CONTRACT CLOSEOUTCONTRACT CLOSEOUT

Contract closeout requires the following:1. Contractual issues must be settled2. All changes incorporated into final document3. All deliverables items received4. All borrowed equipment returned5. All classified documents must be returned6. Final payment must be made

Contract Administrator must write formal closure document for file


CASBO October 4, 2002

Phyllis Prokop, CPPBSupervisor of Purchases

City of Middletown, Connecticut


TRENDS IN PURCHASINGTRENDS IN PURCHASING

AUTOMATION COMPUTERIZATION E-COMMERCE EBULLETIN BOARDS ONLINE BIDDING



RULES MUST BE ENFORCED LATE BID IS LATE- DO NOT

ACCEPT INCREASED EFFICIENCIES COST SAVINGS



PROCUREMENT CARDS Accepted widely Easy to use Financial controls Reporting/ Financial

integration



Misconception-Stumbling Block

Diverse Functions Responsive to Customers-

internal/external Broad Knowledge



Resourceful: DODGE REPORTS /

THOMAS REGIONALS Networking: PPAC- Public Purchasing

Association of CT- 100+members


NATIONAL INSTITUTE OF GOVERNMENTAL PURCHASING- (N.I.G.P) http://www.nigp.org/

A PREMIER TRAINING AND CERTIFICATION ORGANIZATION FOR PUBLIC PURCHASING OFFICIALS

PROVIDES OVERSIGHT FOR PUBLIC PROCUREMENT ETHICS AND POLICY

CONVENES BEST PRACTICES FOR PUBLIC SECTOR PURCHASING

PROVIDES CERTIFICATION FOR PUBLIC PURCHASING AGENCIES



State of CT- DAS CT Gov Center--Orderlink CRCOG—cooperative

contracts (natural gas) U.S. COMMUNITIES- ECONOMIES

OF SCALE- multi-state contracts



KEY CONTACTS

Web Information: www.nigp.org www.das.state.ct.us www.StateGovCenter.com www.uscommunities.org

Documents

CASBO October 4, 2002