Fundamentals of Intergovernmental Agreements and Memorandums of Understanding (MOUs)

Fundamentals of Intergovernmental Agreements and Memorandums of Understanding (MOUs) Mike Boivin and Mia Graham

Intergovernmental agreements and memorandums of understanding What should you consider when drafting an Intergovernmental Agreement or MOU?

definitions Are intergovernmental agreements and MOUs contracts? Yes. What is the difference between an Intergovernmental Agreement and an MOU? An Intergovernmental Agreements is a contract between divisions of government. An MOU is a contract between two or more parties which may or maynotbe governmental entities. Can a contract fit into more than one category? Yes. It’s all a matter of terminology.

Is the prior approval of osc required? Intergovernmental Agreements over certain dollar values are sent to the Office of the State Comptroller (OSC) for prior approval under Section 112 of State Finance Law. MOUs are sent to OSC for prior approval under Section 112 as well, except when the MOU is between two or more State agencies.

Attorney general opinion On June 9, 1980, the Attorney General published the following opinion: “Agencies ... may not enter into formal contracts with each other but may execute interagency memoranda of understanding limited to matters of substance and omitting standard provisions normally included in formal contracts … It is elementary contract law that a person cannot contract with himself … there is only one entity – the State-and … the State cannot agree to indemnify itself … ”

Mirrorcheck Need Justification Cost Justification Advertising Requirements Scope of Work/ Budget Approval Potential Issues? Enabling Legislation Appendix A Requirements Board & Municipal Resolutions Signatures Attorney General and OSC Approval Agency Schedule and Timelines

Need justification Discuss Alternatives. Demonstrate for the procurement record that the chosen option is the best option.

Cost justification Market Rates Office of General Services Backdrop Contract Grant or Funding Agreement Published Rates Engineer Estimate Historical Data

Do you need a contract reporter exemption? Is this a biddable service or a contract for consultant services that could be procured using a standard procurement method?

Scope of work & budget requirements • Define the scope of the agreement and clearly identify the responsibilities of each party to the contract. • Include a not-to-exceed amount in the body of the contract. Also include a repayment schedule in the contract if the contract involves the repayment of funds to the State. • If there is enabling legislation, make sure all legislative requirements are included in the terms of the contract and have been satisfied. • Get Division of the Budget approval early in the process.

Evaluate potential issues • How will we justify the cost? • Does this contract involve any third party contracting? • Who needs to sign this contract? Will they be readily available when the time comes or do we need a plan? • Have we done a contract like this one before?Do we need to get a sample contract from another agency? • What are the timeframes like? Are there any drop-dead dates or legislative requirements that must be met?

Enabling legislation Be familiar with enabling legislation before drafting contracts; watch for restrictions and “drop dead” dates that must be met in order for the contract to be valid. Include a copy of the enabling legislation in the procurement package.

Contracts with THE FEDERAL GOVERNMENT Require the following appendix a clauses • Executory Clause • Non-Assignment Clause • Comptroller’s Approval • Records Clause

Contracts with other states require the following appendix a clauses • Executory Clause • Late Payment • Non-Assignment Clause • No Arbitration • Comptroller’s Approval • Records Clause

Board & municipal resolutions • Must be current • Must match contract • Original, raised seal or certified copy • Check the authority policy for signing requirements

signatures All non-agency signatures must be notarized. OSC must sign last.

Attorney general & osc approval Attorney General approval is required by OSC for all contracts reviewed by OSC.

Agency schedule & timelines Determine how long will it take to: • Define Scope of Work • Get In-House Approvals • Advertise and Make Selection • Draft Contract & Build Procurement Record • Conduct Legal Review & Make Necessary Changes • Assess Vendor Responsibility • Get Signatures • Obtain Attorney General Approval • Obtain OSC Approval

Contracts with other states Crown Point Bridge

Contracts with other states • Include required Appendix A clauses in contract. • Scope of Work and the responsibilities of each • party must be clearly defined for cost-sharing • purposes. • Division of the Budget form B1184 required. Funding is only encumbered once; determine if the encumbrance will be on the cooperative • agreement or on future contracts.

Contracts with the federal Government Coastal Erosion & Flood Control Projects With the Army Corp of Engineers

Contracts with the federal government • Clearly define scope of work. • Pay attention to federal reporting requirements. • Specify time and manner in which State funds will be expended. Call for interim reports on expenditures. • Include required Appendix A Clauses.

Contracts with municipalities Municipal Snow Trucks Removing Snow & Ice

Contracts with municipalities • Clearly define the scope of work. • Include maps, if applicable. • If this is going to be an ongoing relationship, • consider negotiating renewal terms and/or • multi-year agreements. • Municipal Resolutions are required. • Attach the standard Appendix A.

Contracts with not-for-profits Hudson River Walkway

Contracts with not-for-profits • Decide if you will advertise or if you need an • exemption. • Along with the standard need and cost justifications, • you will also need to complete a Vendor Responsibility • review. • Include enabling legislation in the procurement • package, if applicable.

Repayment agreements When funding is advanced to another party, the repayment schedule is memorialized in the terms of the agreement

Repayment agreements • The most important requirement for a repayment • agreement is for the repayment schedule to be • included in the body of the agreement. • Your agency’s legal counsel must review the • repayment agreement. • Most repayment agreements will have an associated • grant contract with the same contract number. The • repayment agreement will have an “F” prefix. The • grant contract will have a “C” prefix.

cooperative agreements ! High Speed Rail

Cooperative agreements • Cooperative agreements are often zero dollar • agreements that simply outline the terms of what • is going to happen. • Use engineer’s estimates for design and construction. • Use historical data for cost and revenue items.

Make a plan You will be told that yesterday is too late to get this done! One thing you can count on is a changing schedule Understand the requirements, it’s the key to success Consider you options Advertise Notify OSC when it’s a rush! Don’t worry Own the project Include a not-to-exceed amount in your contract Track the schedule!

Real property & negotiated contracts staff listing Trich Warner 473-1024 Mike Boivin 486-1293 David Schmidt 474-4245 Mia Graham 402-4591 Sharon Viscusi 486-3012 Danielle Niemitalo 486-1299 Kathy Fitzpatrick 473-6762 Krista Gardner 474-3658

Fundamentals of Intergovernmental Agreements and Memorandums of Understanding (MOUs)