# Presentation: 861675

## Contract AdministrationCSP

*USDA is an equal opportunity provider and employer.*

##  If you can smile when things go wrong, you probably have thought of someone else you can blame it on.

-  If you can smile when things go wrong, you probably have thought of someone else you can blame it on.

## Conservation Program Contracting

**Conservation Program Contracting**

- CPM part 512
**Policy for installing conservation treatment under Conservation Program Contracts administered through ProTracts**
**Subpart F – Contract Administration**

## Conservation Security Program

**Conservation Security Program**

- CPM part 518
**Program specific policy**
**Subpart K – Contract Administration**

## Contract Administration

**Contract Administration**

**Contract Modifications**
- Improvement Modifications
- Maintenance Modifications
**Land Transfers**
- With Successor
- Without Successor
**Canceling vs. Terminating**
**Cost Recovery**** **

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## Contract Modifications

**Contract Modifications**

- 518.100 A (1)
**Due to the unique nature of CSP... **
- 	CPM, Part 518, Subpart K will contain the primary guidance for CSP contract modifications.

## Modification Process

**Modification Process**

- Requested by participant
- Developed in ProTracts
- Signed by participant
- Approved by NRCS

## CSP Modification Approval

**CSP Modification Approval**

- NB 300-7-19
**CSP modifications which change any CSP contract obligation, either positive or negative, regardless of the amount, must be approved by the State Conservationist or Assistant State Conservationist as delegated.**
- Enforced with ProTracts Permissions
- Necessary for accountability

## Maintenance Modifications

**Maintenance Modifications**

- 518.102 – Generally limited to changes that do not involve Contract Items
- Contract Transfers
- Changes in Participant Information
- Payment shares
- Banking information
- Cancel and Terminate
- To be completed prior to the _next_ annual payment cycle to ensure proper payment

## Decreases in Obligations

**Decreases in Obligations**

- NB 300-7-19
- Potential contract violations
- Must be elevated to StC for a determination on contract termination and/or cost recovery

## Deleting Contract Items

**Deleting Contract Items**

- 518.100 D (7)
- The participant agrees to maintain at least the level of stewardship identified in the benchmark inventory for the entire contract period. A participant is expected to carry out all scheduled conservation treatment.  There must be valid reasons not adverse to the Government's interest and conservation objectives for deleting any contract item.  Each modification must include sound justification for the deletion;

## Statute

**Statute**

- Public Law 107-171
**2002 Farm Bill**
- Defines the CSP purpose as the “conservation and improvement of the quality of soil, water, air, energy, plant and animal life,...”

## Regulation

**Regulation**

- 7 CFR Part 1469
**Amendment to Interim Final Rule**
- 1469.21 (a)  “Among other provisions, the participant agrees to maintain at least the level of stewardship identified in the benchmark inventory for the portion of land being enrolled for the entire contract period, as appropriate, and implement and maintain any new practices or activities required in the contract.”

## Regulation

**Regulation**

- 7 CFR Part 1469
**Amendment to Interim Final Rule**
- 1469.21 (e) (3) (i) Participant required to—“Implement and maintain the practices as identified and scheduled in the conservation stewardship plan, ...”

## Caution on Deleting Items

**Caution on Deleting Items**

- Requirements of Statute, Regulation and Policy
- Maintain at least benchmark level of treatment
- Implement and maintain as scheduled
- Therefore, requests to allow reduced level of treatment is not allowed

## Request to waive policy

**Request to waive policy**

**518.1 C    Authority to Waive Administrative Procedures**
- (1)  The NRCS Director, Financial Assistance Programs Division, may waive any administrative procedural provision in this manual:
- (i)  Unless prohibited by statute or regulation; and
- (ii)  If the waiver is justified and will not defeat the purposes of the CSP, or any other conservation program administered by USDA.

## Waiver Not Justified

**Waiver Not Justified**

- Requests to waive policy and allow reduced level of treatment is:
- counter to the purpose of the statue and
- prohibited by regulation

## Contract Improvement Modifications

**Contract Improvement Modifications**

- 518.101
- Tier Transitions
- Adding Land
- Adding Enhancements
- Only during announced request period
- NRCS will make no assurance to participants of the potential to add contract improvements by modification

## Increases in Obligations

**Increases in Obligations**

- NB 300-7-19
**Increases in Obligations are Contract Improvement Modifications**
- Only allowed during an announced contract improvement modification period
- Cannot accommodate uncontrolled obligations

## Contract Administration

**Contract Administration**

- Contract Modifications
- Land Transfers
- Canceling vs. Terminating
- Cost Recovery

## Loss of Control

**Loss of Control**

- 518.103
- Land will be considered “transferred” if the participant loses control of the acreages for any reason.

## Transfer of Land Under Contract

**Transfer of Land Under Contract**

- 518.103
**With Successor in Interest**
- Contract must remain intact to be transferred
- NRCS must be notified within 60 days of transfer
- Transferee must be eligible

## Transfer of Land Under Contract

**Transfer of Land Under Contract**

- 518.103
**With Successor in Interest **_**without**_** existing contract**
- Contract must remain intact
- Transferee must be eligible
- Add new participant to existing contract
- Remove payment shares of original participant
- Print NRCS-CPA-152

## Transfer of Land Under Contract

**Transfer of Land Under Contract**

- 518.103
**With Successor in Interest **_**with**_** existing contract**
- All of the land must be transferred
- Transferred land must meet transferee’s tier
- Terminate the transferred contract
- Modify the transferee's (existing) contract to add the transferred land and original required conservation treatments

## Conditions of Transfer

**Conditions of Transfer**

- All of the conditions of the transferee’s contract will apply
- Tier
- Contract length
- Variable payment rate
- Payment limitations

## Transfer of Land Under Contract

**Transfer of Land Under Contract**

- 518.103
**Without Successor in Interest**
- Contract Violation and subject to forfeiture of payments, refund of payments received and liquidated damages

## Contract Administration

**Contract Administration**

- Contract Modifications
- Land Transfers
- Canceling vs. Terminating
- Cost Recovery

## Termination vs. Cancellation

**Termination vs. Cancellation**

- 512.57
- Termination is NRCS action
- Adverse to participant
- Cancellation is at participant’s request
- Hardship
- Natural disaster
- Major illness
- Death

## Termination

**Termination**

- For Cause
- By NRCS
- Includes Consideration of Cost Recovery

## Cause to Terminate

**Cause to Terminate**

- Participant or Land becomes ineligible
- Transfer of Land or Loss of Control
- Failure to correct violations
- Failed to meet terms and conditions
- Threat to health or safety of NRCS
- Fraud, scheme or device

## Ineligible Participant or Land

**Ineligible Participant or Land**

- HEL/WC violations
- Enrolled land into other program

## Failure to correct potential violations

**Failure to correct potential violations**

- Practices and activities must meet or exceed applicable standards or instructions
- Must maintain applied practices and activities

## Failed to install or maintain practices/activities

**Failed to install or maintain practices/activities**

- Items may not be deleted to avoid non-compliance with contract requirements
- Needed to meet contract objectives
- May have effected ranking/selection
- Established Benchmark level of treatment (CSP)

## Threat to health or safety of NRCS

**Threat to health or safety of NRCS**

- Must allow access to the land under contract for monitoring progress

## Misrepresentation of Facts

**Misrepresentation of Facts**

- Scheme and Device
- Fraud
- Falsification of certification for LR/B participation
- Falsification of tenant/landlord interest
- Falsification of Ag Operation Delineation

## Termination Letter (512.91 L)

**Termination Letter (512.91 L)**

- Reason
- Regulatory basis
- Failure to correct within reasonable time
- Consequences
- Adverse actions to be taken
- Termination
- Cost Recovery
- Liquidated Damages
- Forfeit of future payments
- Appeal rights

***Not the first Step!***

## What must NRCS do prior to termination?

**What must NRCS do prior to termination?**

- Determine there is a problem
- Annual Contract Review
- Let participant know there is a problem
- Formal Status Review (NRCS-CPA-13)
- Give them a chance to correct the problem
- Agreement Covering Non-compliance with Provisions of Contract (NRCS-CPA-153)

## How do you determine there is a potential violation? 

**How do you determine there is a potential violation? **

- _Quality Assurance_
- GM 450 part 407
- Documentation, Certification and Spot Checking
- GM 340 part 404
- Oversight & Evaluation
- NPPH
- Step 9 = Evaluate the Plan
- State Quality Assurance Plan
- National Food Security Act Manual
- Conservation Program Manual

## Annual Reviews vs. Contract Reviews

**Annual Reviews ****vs. ****Contract Reviews**

- 512.55
- Evaluation of Contract Implementation

## Annual Reviews

**Annual Reviews**

- Does not require participant
- NRCS-CPA-13 not required
- Schedule
- Success of applied practices
- O&M

## How do you notify participant of the potential violation?

**How do you notify participant of the potential violation?**

- _Contract Review_
- If Annual Review indicates that the provisions of the contract are not being followed
- Not on schedule
- Failed practice
- Lack of O&M
- Conduct a Formal Contract (Status) Review with the Participant
- NRCS-CPA-13 provided to participant
- NRCS-CPA-153 signed by participant with reasonable timeframe to comply

## How do you give them a chance to correct the potential violation?             

**How do you give them a chance to correct the potential violation?             **

- _NRCS-CPA-153_
- Details of non-compliance
- Document all actions that need to be taken
- Reasonable Timeframe to comply
- Signature

## Failure to Remedy

**Failure to Remedy**

- Proceed with Termination
- Termination Notification Letter (512.91L)
- Reason
- Regulatory basis
- Reasonable time to correct not met
- Consequences
- Adverse actions to be taken
- Termination
- Cost Recovery
- Liquidated Damages
- Forfeit of future payments
- Appeal rights

## Contract Administration

**Contract Administration**

- Contract Modifications
- Land Transfers
- Canceling vs. Terminating
- Cost Recovery

## Cost Recovery

**Cost Recovery**

- Generally seek recovery of costs when terminated
- Refer to CPC Appendix for applicability
- Includes
- Liquidated Damages (Cost of NRCS TA)
- Not a penalty
- Refund of FA

## Assessment of Damages

**Assessment of Damages**

- STC may reduce the amount of money owed
- All or Part
- If requested by participant
- With justification
- Supported by substantial evidence
- If acting in good faith
- Must be granted consistently
- Within the state _and_ among states
- Inconsistency causes appeals

## Liquidated Damages

**Liquidated Damages**

- Recovery of NRCS administrative and technical services
- Up to 20% of total *FA** *funds obligated
- National model is general guidance
- StC may consider full amount allowed by the specific program contract appendix
- StC may follow table in CPM 512.58 for applicable programs
- StC may reduce amount in part or in full

## Guidance

**Guidance**

- All contract violations must be handled using guidance in specific program regulations
- Statute
- Rule
- CPC Appendix
- Manual
- NB’s and other policy guidance

## Contract Administration

**Contract Administration**

- Contract Modifications
- Land Transfers
- Canceling vs. Terminating
- Cost Recovery

##  Some days all you can do is smile and wait for some kind soul to come pull you out of the bind you’ve gotten yourself into.

-  Some days all you can do is smile and wait for some kind soul to come pull you out of the bind you’ve gotten yourself into.

## Equal Opportunity

**Equal Opportunity**

- "The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer."