N.M. Admin. Code § 1.12.21.14 - DEFAULT, CURE AND AWARD TERMINATION
A sponsoring body may unilaterally terminate an award only as authorized by, and subject to the requirements of, these rules.
A.
Uncured material default. A
sponsoring body may terminate an award based on a grantee's uncured failure to
comply with or satisfy a material term of an award, including, but not limited
to, failure to meet a financial, reporting, budget, performance, service level,
pricing or deadline requirement.
B.
Notice of default. Before terminating an award, a program
administrator shall provide a grantee notice of the default and an opportunity
to cure.
(1) Unless exigent circumstances
justify a shorter period, a grantee shall be allowed at least 30 days to cure
the noticed default.
(2) If a
default presents a risk to health, life, or financial welfare of any person or
to the state unless cured in fewer than 30 days, and the circumstances creating
that exigency were not within the control of the program administrator or
sponsoring body, the period allowed to cure a default may be less than 30 days
as necessary to mitigate or eliminate the risk.
C.
Additional provisions. As
required by a funding source, or as necessary to meet funding deadlines or
program objectives, an award may include additional termination provisions not
in conflict with these rules. These rules do not apply to, or preclude mutual
termination of an award.
D.
Validity. A termination shall not be effective unless approved by
the sponsoring body in an order or resolution, as applicable, supported by
findings and conclusions.
E.
Effect. Upon termination of an award, ownership and title to all
tangible and intangible property purchased or created by the grantee with award
funds shall be transferred as directed by the sponsoring body in the
termination order or resolution. The grantee shall return all unexpended award
funds to the program administrator and all unexpended and unpaid award funds
shall revert to the award funding source.
F.
Survival. These termination
provisions shall survive award close out and apply for so long as the grantee
is obligated to comply with any material provision of an award, including for
the duration of any warranty, service or price level agreement. A grantee's
failure to cure a material default after award closure shall have the same
effect as an uncured default prior to award closure.
G.
Termination alternatives.
These rules do not preclude a sponsoring body from imposing a sanction other
than termination, from mandating corrective action, from excusing a default or
from modifying an award when termination is not in the best interests of the
program.
(1) A sponsoring body shall only
excuse a default or modify an award for good cause.
(2) Good cause exists when circumstances
beyond the contemplation and control of the grantee and sponsoring body impede
or prevent grantee from curing a material default, and the proposed forbearance
or modification is consistent with program qualifications, deadlines and
objectives, legal mandates and funding commitments.
Notes
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