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end-user agreements are superseded by a master contract or a state term contract;however, there are times when language must be included in purchase orders tospecifically void the automated end-user agreement’s terms and conditions thatconflict with state law.Major IT projects, or “Large IT” projects, require the appointment of an executivesteering committee in accordance with N.D.C.C. § 54-59-32. It is imperative thatagencies procuring these IT goods or services consult assigned legal counsel fordetermination as to the applicability of N.D.C.C. § 54-59-32.Certain ITPurchasingInformationis found at:contracts for goods and services are negotiated as CooperativeContracts and are managed by the OMB State Procurement Office.specific to these Cooperative Purchasing Contracts and IT nt/it-procurement.STATE TERM CONTRACTS AND COOPERATIVE PURCHASING CONTRACTSThe OMB State Procurement Office maintains certain “State Term Contracts” underits Cooperative Purchasing authority in accordance with N.D.C.C. § 54-44.4-13. Thisauthority provides for the OMB State Procurement Office to enter into agreementson behalf of multiple state agencies (and other specified entities) when similar goodsor services are being procured by those agencies.Cooperative Purchasing Contracts require OMB to be a party to the contract. Thesecontracts should contain specific language from OMB informing the parties to thecontract and potential participating entities of the contract that it is a CooperativePurchasing agreement. OMB Procurement Office will provide this language forinclusion when required.A list of active State Term contracts is found -contracts.CONTRACTS FOR PUBLIC IMPROVEMENTS (CONSTRUCTION CONTRACTS)Because of the complexity involved in public improvement contracting, the industrystandard of using contracts drafted by the American Institute of Architects (AIA ) orthe Engineers Joint Contract Documents Committee (EJCDC ) should beacceptable to the agency. However, these contracts are drafted in favor of architectsand engineers and contain terms and conditions to which a state agency is withoutauthority to agree.Agencies should ensure that AIA contracts being used are the most current versionof that document. For example: AIA B105 -2017 should not be used rather thanan AIA B105 -2007. AIA contracts often reference additional AIA documents4

as being incorporated into the contract. It is imperative that the agency review ALLdocuments prior to executing the AIA contract and State’s Addendum.It is imperative that these standard contracts be reviewed andsupplemented with a State Addendum that is prepared by theagency’s assigned legal counsel or the Office of Attorney General.The contracting process for public improvement projects is subject to numerousrequirements in N.D.C.C. ch. 48-01.2. All bids and proposals for public improvementcontracts must include a copy of the license or certificate of renewal thereof issued bythe Secretary of State enclosed in the required bid bond envelope showing thecontractor is licensed as provided in N.D.C.C. ch. 43-07. N.D.C.C. § 43-07-12.Contractors with the state also must file a certificate showing the contractor has paidall applicable state taxes. N.D.C.C. § 43-07-11.1.A bidder's bond and a contractor's or performance bond are required for many publicimprovement and construction projects. N.D.C.C. ch. 48-01.2, N.D.C.C.§§ 48-01.2-05, 48-01.2-10. A bidder's bond generally must guarantee execution ofboth a contract and a contractor's or performance bond within ten (10) days afterreceiving notice that the contract has been awarded. A contractor's or performancebond must guarantee the contractor's performance of the contract and payment of allbills arising during the performance of the contract. A contractor's or performancebond must include requirements that:1.2.all bills or claims for labor or material be paid, including interest underN.D.C.C. § 13-01-14, for bills which are not paid within 90 days; andthe contractor will file a payroll report with workforce safety and insuranceand pay all required premiums. N.D.C.C. § 65-04-10.All construction contracts, except those involving federal aid or where a preferencewould be contrary to law, must include a clause requiring the contractor to givepreference to North Dakota residents in hiring, with preference given first toveterans. N.D.C.C. § 43-07-20.With some exceptions, any retention of amounts (i.e. retainage) due a contractorunder a public improvement contract is subject to 10% of each estimate presenteduntil the project is 50% complete, at which time retainage is based on thecontractor’s performance. N.D.C.C. §§ 43-07-23, 48-01.2-13.The public improvement (construction) contract checklist is Appendix 2 to thismanual.5

LEASES OF BUILDINGS OR REAL PROPERTYAll leases and rental agreements for office space, regardless if the role of the stateagency is as Landlord or Tenant, must be reviewed for legal sufficiency by theAttorney General and approved by the OMB. N.D.C.C. § 54-21-24.1.OMB’s procedure for completing a state office lease may be found ice-space.The standard lease checklist and lease template, wherein the state agency is thetenant, are Appendix 3-a-1 and Appendix 3-a-2 to this manual.The standard lease checklist and lease template, wherein the state agency is thelandlord, are Appendix 3-b-1 and Appendix 3-b-2 to this manual.INTERAGENCY LEASESInteragency leases are those executed between two or more state agencies.Because state agencies, by their very existence as such, are subject to a number ofstatutory requirements it is unnecessary to include all standard lease terms andconditions that would be included in a lease between a state agency and an outsidetenant or landlord.The interagency lease checklist and lease template are Appendix 3-c-1 andAppendix 3-c-2 to this manual.LEASES OF EQUIPMENTLeases of equipment can be converted to rental purchase agreements with theapproval of OMB, as long as the conversion is to the financial advantage of the stateand the agreement does not commit the state to payments beyond the currentbiennium. N.D.C.C. § 54-06-17. OMB has created a form to assist with thisdetermination, found -vspurchase-analysis.6

INTERAGENCY AGREEMENTSInteragency agreements, often referred to as a Memorandum of Agreement orMemorandum of Understanding, are those executed between two or more stateagencies. Because state agencies, by their very existence as such, are subject to anumber of statutory requirements it is unnecessary to include all standard contractterms and conditions that would be included in a contract between a state agencyand an outside vendor or entity.The interagency agreement checklist and agreement template are Appendix 4-a andAppendix 4-b to this manual.JOINT POWERS AGREEMENTSJoint powers agreements are a special category of contracts in which a state agencyenters into a binding agreement with another state agency or with a politicalsubdivision of the state of North Dakota. N.D.C.C. chs. 54-40 and 54-40.3 authorizestate agencies and political subdivisions to enter into joint powers agreements whenother, specific statutory authority may not exist.Joint powers agreements may be used for a number of purposes, including:acquiring, constructing, and maintaining any building for the joint use of thecontracting government agencies; the use of buildings under the control of the state;and the joint exercise of any power or function that any of the parties to theagreement is authorized to perform. See generally N.D.C.C. chs. 54-40, 54-40.3.N.D.C.C. § 54-40.3-01 is very broad; it authorizes political subdivisions and stateagencies to enter into joint powers agreements to cooperate or jointly administer anypower or function that only one of the parties to the agreement is obligated. Jointpowers agreements do not relieve the agency of its statutory duties, but actual andtimely performance of those duties by another party created by the joint powersagreement is sufficient. N.D.C.C. § 54-40.3-01(3) and N.D.A.G. 94-F-08.Joint powers agreements authorized under N.D.C.C. ch. 54-40 must contain certainprovisions. Joint powers agreements authorized under N.D.C.C. ch. 54-40.3 have norequired form, but a number of suggested contract topics are listed in N.D.C.C.§ 54-40.3-01(1). The Attorney General must determine that joint powers agreementsthat involve state agencies are legally sufficient. See N.D.C.C. §§ 54-40-08,54-40.3-01(2), and 54-40.3-04.The joint powers agreement checklist is Appendix 5 to this manual.AGREEMENTS WITH INDIAN TRIBES7

Some agreements between a public agency and an Indian tribe are governed byN.D.C.C. ch. 54-40.2. If N.D.C.C. ch. 54-40.2 applies, the state agency involvedmust publish notice of the agreement and, if requested, hold a public hearing. Theseagreements must be approved by the Governor and by the governing body of thetribes involved. N.D.C.C. § 54-40.2-04. In addition, agreements with an Indian tribemay implicate federal statutes and regulations. The Natural Resources and IndianAffairs Division of the Attorney General’s office has an assistant attorney generalwho is available for consultation on these agreements.8

CHAPTER 3 - PROCUREMENT AND PUBLIC IMPROVEMENTSGOODS AND SERVICESGoods and services purchased by OMB State Procurement Office on behalf of stateagencies under N.D.C.C. ch. 54-44.4, or pursuant to purchasing authority delegatedby OMB, are usually purchased under a competitive procurement procedure. TheOMB State Procurement Office develops specifications, receives bids, and mayreject any bids or negotiate for a lower price with the successful bidder. Termcontracts and multiple awards for certain contracts are also authorized underN.D.C.C. § 54-44.4-05. For more information regarding the bidding process, see nd.gov/omb/agency/procurement.BIDSFor certain contracts, competitive bids are required. Examples of these contractsinclude:1.2.3.4.5.Contracts for construction of public improvements if the estimated costexceeds 150,000. N.D.C.C. § 48-01.2-02.1.Concessions in public buildings or on public grounds. N.D.C.C.§ 48-09-01.Highway construction contracts exceeding 20,000. N.D.C.C. § 24-02-17.State printing contracts. N.D.C.C. ch. 46-02.State purchasing contracts. N.D.C.C. § 54-44.4-05.An agency subject to bidding requirements should be very careful to review andfollow all requirements set out in law and administrative rule.PROPOSALSA request for proposals (RFP) is similar to the bid process but gives the agencyadditional flexibility after receiving proposals from potential contractors. Frequently,the process includes competitive negotiation with the bidders based on acomparison of the proposals received by the agency.REQUESTS FOR PROPOSALS AND INVITATIONS FOR BIDWhen preparing an RFP or Invitation for Bid (IFB), the agency should specify boththe terms and conditions it will require in the contract and those that areunacceptable. This gives potential contractors notice of the state's contractingrequirements. Solicitation templates are available at the OMB State ProcurementOffice website at:9

https://www.nd.gov/omb/agency/procurement.Some RFP’s, specifically IT-related, contain provisions requiring the potentialcontractor to affirmatively agree, disagree or propose new language for eachcontract clause contained in the state’s contract template specific to that solicitation.Proposals that fail to respond to these provisions may be deemed non-responsiveand be rejected by the procuring agency. The intent of requiring responses specificto the contract language is to be up front about negotiation positions and to ensureall parties are negotiating contract terms in good faith.ARCHITECT, ENGINEER, AND L AND SURVEYING SERVICESThe procurement of architect, engineer, and land surveying services is governed byN.D.C.C. ch. 54-44.7. Standard engineering and architectural contracts drafted bythe Engineers Joint Contract Documents Committee (EJCDC ) and AmericanInstitute of Architects (AIA ) favor engineers and architects and contain terms towhich a state agency may not agree.It is imperative that these standard contracts be reviewed andsupplemented wit

The contract manual is a guide for drafting and reviewing contracts into by an entered agency of the State of North Dakota. It has been written so that a preliminary draft of a proposed contract could be prepared by a non-attorney for review by the agency’s assigned legal counsel, either an File Size: 1MBPage Count: 115