the dirty dozen - region one esc...the dirty dozen (more or less) eric e. muñoz tasbo 2017 annual...

Notintendedasanexhaustivediscussionofallrelevantlaws,orassubstitutefortheadviceofanattorney.Pleasecontactyourattorneyforanyspecificquestions.

THE DIRTY DOZEN (More or Less)

Eric E. Muñoz TASBO 2017

Annual Conference

Critical contract issues and how to deal with them


Local Government Code § 271.152 Waiver of Immunity to Suit for Certain Claims

A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter.


Local Government Code § 271.151 Definitions

(2) “Contract subject to this subchapter” means:

(A) a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity;


Local Government Code § 271.153 Limitations on Adjudication Awards

(a) Except as provided by Subsection (c), the total amount of money awarded in an adjudication [] is limited to the following:

(1) the balance due and owed by the local governmental entity under the contract [], including any amount owed as compensation for the increased cost to perform the work as a direct result of owner-caused delays or acceleration; (2) the amount owed for change orders or additional work the contractor is directed to perform by a local governmental entity in connection with the contract; (3) reasonable and necessary attorney's fees that are equitable and just; and (4) interest as allowed by law[]


Local Government Code § 271.153 Limitations on Adjudication Awards

(b) Damages awarded in an adjudication brought against a local governmental entity arising under a contract subject to this subchapter may not include:

(1) consequential damages, except as expressly allowed under Subsection (a)(1); (2) exemplary damages; or (3) damages for unabsorbed home office overhead.


#1ProcessAnoteonprocess…• Battleoftheforms• Whosigns?• Disclosures


#2Whatisthecontract?

• Merger/Incorporation

• Think“previous”

• Documents

• Conversations

• E-mails




• Think“previous”

• Documents

• Conversations

• E-mails

“This Agreement represents the final expression ofthe agreement between the parties with respect to thesubject matter hereof and supersedes any and allprior agreements, communications…”




• Incorporationbyreference

• Exhibits

• Addenda

• Onlinetermsandconditions!?!?!





• Exhibits

• Addenda


• Contractmodification

• Amendment


Tips:

StructureyourprocessRespectthecontractFindallexhibits,

schedules,andaddendaRequirewritten

amendmentsignedbybothparties




• Exhibits

• Addenda


• Contractmodification

• Amendment


#3Arewelegal?

•Whatisrequired?Ex.:• CertificateofInterestedParties?•Workers’compinsurance?

• Prevailingwage?• P&Pbonds?• Engineerreview(energysavings)?

• Certificatere:plans/specs(purchasingcooperativeconstruction)?

Authority?

Procurement?

Disclosures?

CriminalHistory?


#4Whatisthe“term”?

• Whendoesthecontractstart?

• Effectivedates

• Doesitmatter?

• Whendoesitend?

• Renewal


#5LimitationsofLiability

• Transfersrisktotheschooldistrict

• Don’tthinkprice;thinkpotentialdamage

• Sometimeshidden


#6NoticeProvisions

• Disputes

• Dissatisfactionwithservice

• Verbalisalmostneverenough(NEVERrelyonverbalcommunications)

• E-mails?USMail?FedEx?Hand-delivery?


#6NoticeProvisions

• Disputes

• Dissatisfactionwithservice

• Verbalisalmostneverenough(NEVERrelyonverbalcommunications)

• E-mails?USMail?FedEx?Hand-delivery?

WRITTEN NOTICENotice shall be deemed to have been duly served ifdelivered in person to the individual, to a member ofthe firm or entity, or to an officer of the corporationfor which it was intended; or if delivered at, or sent byregistered or certified mail or by courier serviceproviding proof of delivery to, the last businessaddress known to the party giving notice.


#7PaymentProcedures

• Whattriggerspaymentobligation?

• Invoice?

• Pre-setschedule?

• Unevenlytimedduties

• Abilitytowithholdpayment?


#7PaymentProcedures


• Invoice?




§2251.021.TimeforPaymentbyGovernmentalEntity

(a) ExceptasprovidedbySubsection(b),apaymentbyagovernmentalentityunderacontractexecutedonorafterSeptember1,1987,isoverdueonthe31stdayafterthelaterof:(1)thedatethegovernmentalentityreceivesthegoodsunderthecontract;(2)thedatetheperformanceoftheserviceunderthecontractiscompleted;or(3)thedatethegovernmentalentityreceivesaninvoiceforthegoodsorservice.

(b) ApaymentunderacontractexecutedonorafterSeptember1,1993,owedbyapoliticalsubdivisionwhosegoverningbodymeetsonlyonceamonthorlessfrequentlyisoverdueonthe46thdayafterthelatereventdescribedbySubsections(a)(1)through(3).


#7PaymentProcedures


• Invoice?





#7PaymentProcedures


• Invoice?




§ 2251.042. Disputed Payment

(a) A governmental entity shall notify a vendor of an error in an invoice submitted for payment by the vendor not later than the 21st day after the date the entity receives the invoice. (b) If a dispute is resolved in favor of the vendor, the vendor is entitled to receive interest on the unpaid balance of the invoice submitted by the vendor beginning on the date under Section 2251.021 that the payment for the invoice is overdue. (c) If a dispute is resolved in favor of the governmental entity, the vendor shall submit a corrected invoice that must be paid in accordance with Section 2251.021. The unpaid balance accrues interest as provided by this chapter if the corrected invoice is not paid by the appropriate date.


#7PaymentProcedures


• Invoice?





#7PaymentProcedures


• Invoice?




§ 2251.051. Vendor Remedy for Nonpayment of Contract

(a) A vendor may suspend performance required under a contract with a governmental entity if: (1) the governmental entity does not pay the vendor an undisputed amount within the time limits provided by Subchapter B; and (2) the vendor gives the governmental entity written notice: (A) informing the governmental entity that payment has not been received; and (B) stating the intent of the vendor to suspend performance for nonpayment. (b) The vendor may not suspend performance under this section before the later of: (1) the 10th day after the date the vendor gives notice under Subsection (a)…


#7PaymentProcedures


• Invoice?





#8Termination

• Howdowegetoutofthis?• Convenience?

• Howmuchwillitcost?• Terminationexpenses?• Contractbalance?

• Isitworthit?


Possible Solutions

Hopefully,yourPIApersonnelarefriendlywithyourpurchasingpersonnel…Flagcontractswithconfidentiality

clausesinyourvendor/contracttrackingsoftware,andgiveyourPIAofficeraccesstothatlistWorktoeliminateconfidentialityclauses

fromyourcontracts(thisisagoodideaanyway!)Makevendors/contractorsclearlymark

submissions(individualpages!)thatcontainconfidentialinformation

#9Confidentiality

• PublicInformationAct

• Boeing

• Obligatedtonotify3rdparty?


§ 552.104 Competition or Bidding

(a) Information is excepted from the requirements of Section 552.021 if it is information that, if released, would give advantage to a competitor or bidder. (b) The requirement of Section 552.022 that a category of information listed under Section 552.022(a) is public information and not excepted from required disclosure under this chapter unless expressly confidential under law does not apply to information that is excepted from required disclosure under this section.

Possible Solutions





#9Confidentiality


• Boeing



Possible Solutions





#9Confidentiality


• Boeing



#9Confidentiality


• Boeing



#10DisputeResolution

• Venue/GoverningLaw

• Arbitration

• Mediation

• JuryTrial

• Attorneys’fees


#11ThirdParties

• Beware“Third-PartyBeneficiaries”

• Unanticipatedlawsuits

NO THIRD-PARTY BENEFICIARIES.

There are no third party beneficiaries to this Agreement. The parties do not intend that any non-party have any right to enforce any part of this Agreement.


#12StrategiesforNegotiation

• Contractisnotsetinstone

• Tiltthefieldinyourfavor

• Sometimesit’sagive-and-take

• butsometimesjustneedclarity


Questions?ContactUs

EricMuñ[email protected]

(800)488-9045