Bill Summaries: S894 CONTRACT REFORM/DHHS.

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  • Summary date: May 27 2022 - View Summary

    Provides the following directives for the Department of Health and Humans Services regarding its nonprofit contractors and grant recipients. Directs DHHS to allow nonprofit grantees and contractors to automatically activate limited-time extensions up to six months for continuity of services when a formal extension or renewal process has not been completed within 10 business days of the subsequent contract start date. Requires DHHS to use multi-year contracts when allowable by the originating federally-funded grant. Additionally, requires DHHS to set a standard 60-day timeframe to the contract process and require key performance indicators and contract deliverables in contracts to be sued for performance monitoring. 

    Directs DHHS to establish a system of training, continuing education, and certification for agency purchasing and contract monitoring personnel, including ethics training. Requires DHHS to establish and offer training to vendors on applicable laws, rules, regulations, and contract performance monitoring. Grants DHHS rulemaking authority to administer the require trainings. Requires that all DHHS purchase and monitoring personnel receive training and continuing education from the Department of Administration, Division of Purchase and Contract, on procurement rules, including an ethics component provided by the State Ethics Commission. Appears to intend participation in DHHS purchase and contract monitoring is limited to personnel who have received the required training. Limits training requirements for nonprofit contractors or grantees to the extend trainings and meetings are directly related to the services provided under the grant or contract or necessary for the contract's administration. 

    Requires DHHS to reimburse requests and invoices within 30 days of receipt, requesting feedback as applicable within 10 business days, without which an invoice is deemed valid. Allows charges to be disallowed until resolved if the contractor or grantee does not address DHHS's requested feedback. Establishes that requests for additional information on disputed charges does not interrupt the 30-day contractual payment requirement. Directs DHHS to make payments based on actual expenditures, as defined, pursuant to the approved budget on filed. 

    Sets an interest rate on late or wrongfully withheld payments to nonprofit contractors or grant recipients at 3%, payable within 10 business days of any interest accrued. Establishes that the negotiation, determination, or settlement of the reimbursable amount of overhead under cost-reimbursement type contracts is accomplished on an individual contract basis and is based upon the federally approved indirect cost rate. Adds that for vendors who do not have a federally approved indirect cost rate, in accordance with 2 CFR 200.414(f), the de minimis rate of 10% of modified total direct costs applies. Bars DHHS making material amendments to contracts after execution unless required to comply with changes to federal or state laws. 

    Establishes the 8-member Advisory Committee on State Contracting with Human Service Provider Nonprofits (committee), consisting of legislatively appointed members. Provides for committee meetings. Directs the committee to update State procurement and contracting procedures and regulations for contracts and grants with human service provider nonprofits. Requires the committee to work with the Department of Administration and the Department of Public Safety. Charges the committee with studying issues related to nonprofit human service providers that contract with DHHS, including two described categories. Requires the committee to annually report to the the Secretary of Administration, specified NCGA leaders and clerks, and the Governor. 

    Appropriates $110,000 in recurring funds from the General Fund to DHHS for 2022-23 to fund a support position for contractors and grantees with reporting and compliance requirements for directed grants and contracted awarded under procedures of the act. 

    Effective July 1, 2022.