Iowa Admin. Code r. 11-119.4 - Uniform terms and conditions for service contracts
(1)
Payment clause. The
contract shall include a clause or clauses describing the amount or basis for
paying consideration to the party based on the party's performance under the
service contract . The payment clause(s) should be designed to work in harmony
with any monitoring clauses and any postcontract review procedures. All payment
clauses shall be consistent with Iowa Code section
8A.514.
The payment clause(s) should also be designed to work in harmony with the
outputs, outcomes or any combination thereof desired by a department or
establishment . The payment clause should be appropriate to the nature of the
contract as determined by the department or establishment . Acceptable kinds of
payment clauses include the following. However, these descriptions are not
intended to be an exhaustive or prescriptive list; they are provided as
examples.
a. A payment clause in which the
department or establishment describes the limit of the total fee to be paid,
and the fee is divided between a base fee and an at-risk fee. The base fee is
the amount of fee the service provider will earn for minimal performance in the
completion of the contract. The at-risk portion of the fee is the incremental
fee the service provider will earn as the service provider meets the
performance criteria identified in the contract. The amount of the fee in both
instances may be stated in terms of a percentage, an amount, or some other
term. Incentives and disincentives may be used to affect the payment of the
base fee and the at-risk portion of the fee. The amount of the incentive or
disincentive may be stated in terms of a percentage, an amount, or some other
term. The payment of the fee shall be based upon the outcomes or outputs
achieved or the performance criteria satisfied.
b. A payment clause based on meeting minimum
requirements for performance criteria, outcomes, or outputs with incentives and
disincentives to achieve other desired outcomes, outputs or performance
criteria. The incentives may be stated in terms of a percentage, a fixed
amount, or some other term. Up to 100 percent of the incentive may be placed at
risk in order to meet or exceed performance criteria or achieve desired
outcomes or outputs. Disincentives may be employed to achieve performance
criteria or outcomes. Disincentives may be stated in terms of a percentage, a
fixed amount, or some other term. Disincentives may include payments to the
department or establishment for performance failures up to 100 percent of the
fee the service provider expects to earn from performance of the
contract.
c. A payment clause based
on a straight contingency fee with the entire fee at risk depending on outcomes
achieved or outputs obtained or performance criteria satisfied.
d. A payment clause based on a base fee and
an amount retained by a department or establishment to ensure performance
criteria described in the contract are satisfied or outcomes are achieved or
outputs are obtained. If the vendor meets the performance criteria or outcomes
or outputs, then a department or establishment may pay some or all of the
portions of the fee retained as an incentive or disincentive and as provided
for in the contract.
e. A payment
clause based on a base fee and a contingency fee depending on the outcomes
achieved, outputs obtained, or performance criteria satisfied. The base fee may
be stated in terms of an hourly fee, a fixed-price fee, or a not-to-exceed fee.
The contingency fee may be stated in terms of a percentage of a recovery.
f. Any other payment clause
determined by the department or establishment to be suitable and appropriate
for the service contract that bases the amount or basis for paying
consideration to the service provider based on the service provider 's
performance under the service contract .
(2)
Monitoring clause. The
contract shall include a clause or clauses describing the methods to
effectively oversee the party's compliance with the service contract by the
department or establishment receiving the services during performance,
including the delivery of invoices itemizing work performed under the service
contract prior to payment. Monitoring should be appropriate to the nature of
the contract as determined by the department or establishment . Acceptable
methods of monitoring may include the following. However, these descriptions
are not intended to be an exhaustive or prescriptive list; they are provided as
examples.
a. One hundred percent
inspection.
b. Random
sampling.
c. Periodic
inspection.
d. Customer
input.
e. Invoices itemizing work
performed.
f. A monitoring plan
determined by the department or establishment to be appropriate for purposes of
the service contract and that includes methods to effectively oversee the
service provider 's compliance with the service contract by the department or
establishment .
(3)
Review clause. The contract shall include a clause or clauses
describing the methods to effectively review performance of a service contract ,
including but not limited to performance measurements developed pursuant to
Iowa Code chapter 8E. Performance measurement should be appropriate to the
nature of the contract as determined by the department or establishment . The
measures below are not intended as an exhaustive or prescriptive list; they are
provided as examples. The review clause for performance may include:
a. Outcome measures .
b. Output measures .
c. Efficiency measures .
d. Quality measures .
e. A review plan determined by the department
or establishment to be appropriate for the purposes of the service contract and
that includes methods to effectively review performance of a service contract .
(4)
Other
terms. The contract shall include:
a.
Where appropriate, a nonappropriation clause;
b. A clause describing the duration of the
contract;
c. Clauses requiring the
service provider to comply with all applicable laws;
d. Where appropriate, an insurance
clause;
e. A clause, exhibit, or
other document that describes the scope of services to be performed;
f. A termination clause;
g. A default clause, where
appropriate;
h. An independent
contractor clause;
i. Where
appropriate, a clause prohibiting inappropriate conflicts of interest on behalf
of the service provider ;
j. Other
clauses as deemed appropriate by the department or establishment entering into
a service contract .
Notes
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