Iowa Administrative Code › Agency 11 - Administrative Services Department › Title VI - Central Procurement › Chapter 119 - Uniform Terms and Conditions for Service Contracts › Rule 11-119.4 - Uniform Terms and Conditions for Service Contracts

Current through Register Vol. 47, No. 3, July 24, 2024
All service contracts entered into by a department or
				  establishment shall include, at a minimum, the following terms:
(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.