CCIT Meeting July 18, 2012 RaLea Sluga

1. CCU Frequently Asked Questions YouTube, Facebook, IGA vs. IA, CORA Q&A, Document Retention, Online Provisions, Signatures (original vs. facsimile), Fiscal Rule Waivers, Vendor Names, Vendor Registration, Changes to Contracts, Required State Controller Signature, High vs. Low Risk, Review of SOW by Controller CCIT Meeting July 18, 2012 RaLea Sluga Office of the State Controller (OSC), Central Contracts Unit (CCU) Manager

2. YouTube Terms & Conditions • As a result of the efforts of the National Association of State Chief Information Officers (NASCIO), on Jan. 1, 2012, Google, Inc., YouTube’s parent company, agreed to modify its terms of service for state government. • Apply to YouTube channel services only. • Specifically modified indemnification, governing law and jurisdiction provisions.

3. YouTube – How to Obtain Revised Terms & Conditions • Step 1- State agencies assess the Content License Agreement (CLA) in light of State requirements. • Step 2 – State agencies request a click-through link to the CLA by submitting entity name, authorized staff contact name and email addresses to State Chief Information Officer (CIO).

4. YouTube – How to Obtain Revised Terms & Conditions • Step 3 – State CIO collects requests and forwards to NASCIO. • Step 4 – NASCIO submits requests to YouTube at monthly intervals. • Step 5 – YouTube forwards click-through email operationalizing new terms to State agencies.

5. YouTube – Issues • Only the State CIO can forward requests to NASCIO. • To date, the State CIO has declined to accept the CLA.

6. YouTube – Options • Refrain from using YouTube, or • Request a Fiscal Rule waiver for acceptance of the current Google Inc. terms & conditions, which requires a waiver of: • FR 2-2; §10, FR 3-1; §6 and OSC’s Policy on “Vendor Agreements”, § 1(b), “Impermissible Provisions” and § 1(c), “Conflicting Provisions” to allow acceptance of the Google Inc. contract which includes changes to Choice of Law and Venue (both California) and a Limitation of Liability.

7. YouTube – FR waiver cont. • You will also need a Fiscal Rule waiver of: • FR 3-1; §5 to allow the State to indemnify vendor “to the extent permitted by applicable law” pursuant to the Google Inc contract. • This will require the State agency to submit a risk analysis of these risks and an assumption of such risks.

8. Facebook Terms & Conditions • As a result of the efforts of the Colorado Attorney General’s Office, National Association of Attorneys General and NASCIO, on Jan. 5, 2011, Facebook agreed to modify its terms of service for state government.

9. Facebook Terms & Conditions • The following modifications were made: • Strike the indemnity clause (except to the extent indemnity is allowed by a state’s constitution or law); • Strike language requiring that legal disputes be venued in California courts and adjudicated under California law; and • Encourage amicable resolution between public entities and Facebook over any disputes.

10. Facebook - How to Obtain Revised Terms & Conditions • Each public agency must include language directing consumers to its official Web site prominently on any Facebook page. • On your Facebook page, you must prominently display the following statement (with appropriate information completed): • If you are looking for more information about [name of agency/IHE], please visit [website URL].

11. Facebook Terms & Conditions • You can review the modified Facebook terms & conditions at: http://www.facebook.com/terms_pages_gov.php • If you are already on Facebook, these modifications will immediately apply.

12. Interagency Agreement (IA) • The CCU’s IA template is only to be used between the State of Colorado Governor’s Office, agencies and institutions of higher education. • Be aware that certain entities may appear to look like State entities, but are in fact not covered under the State’s umbrella entity. • For example, Aims Community College is an independent district.

13. IA Use • An IA cannot be used for external governmental entities, which include the following: • Federal government; • Quasi-governmental or other public entities in Colorado, such as public school districts; • Other states or their cities and counties; or • Non-profit corporations or associations.

14. IA • Use the IA for transactions in which the State does business with itself. • Because the State is not dealing with outside entities, it allows for the removal and/or reduction of various standard State provisions. • The IA is considered low risk and can be executed by State Controller delegates at the agency level.

15. IA Benefits • The IA template is 4 pages plus a Scope of Work (including a budget). • There are no Colorado Special Provisions included. • There is no statutory violation called on any IA, which means there is no penalty for pre-IA activities. • IAs are not subject to the Contract Management System (CMS) requirements.

16. IA Terms & Conditions • For disputes, the parties to an IA agree to attempt to resolve issues at the divisional level. • If this fails, disputes are referred to senior departmental management staff designated by each party. • If this fails, the executive director of each party meets and attempts resolution. • If this fails, the matter is submitted to the State Controller, whose decision is final.

17. IGA? • An Intergovernmental Agreement, which is an agreement between governmental entities, is commonly referred to as an “IGA.” • There is no State contract template specifically for use with external governmental entities. • You should use the CCU’s personal services contract or grant agreement templates for external governmental entities.

18. IGA Terms & Conditions • Few changes are necessary to make the personal services contract and grant agreement templates work for external governmental entities. • Generally, the following is requested: • Changes to or removal of Indemnification provisions in Sections 10(D) and 20(F); and • The additional of a governmental immunity clause for the external governmental entity in Section 18.

19. IGA Terms & Conditions • See the CCIT presentation, Updates from OIT and CCU, dated 7/20/2011 for guidance on removal of indemnification provisions. • All other provisions in the personal services contract and grant agreement templates should apply to external governmental entities.

20. IA and IGA websites • The IA, personal services contract and grant agreement templates are available at: http://www.colorado.gov/dpa/dfp/sco/contracts/modelcontracts.htm • CCIT presentations since 2006 are available at: http://www.colorado.gov/dpa/dfp/sco/contracts/CCIT_Meeting_Archives.htm

21. Colorado Open Records Act (CORA) • CORA provides for the inspection of public records by any person. • It applies to the custodian of public records. The “custodian” is the State. • The State must respond to CORA request within 3 days (with limited exceptions).

22. CORA Issues • We have received several requests in which a vendor has asked the State to safeguard vendors records from voluntary disclosure and/or give the vendor notice when it receives a CORA request so that the vendor may respond. • Problem – Due to the 3 day response time, it is unrealistic for the State to comply with any such request.

23. CORA Issues • Problem – If the vendor information does not qualify for an exception from disclosure under CRS 24-72-204, the CORA compliance officer has an obligation to disclose such information. • The contractual provision cannot override the statute requirements. • Any such contractual provision puts the State in the position of having a contractual breach when the information must be produced.

24. Solution for CORA Compliance • To protect vendor confidential information from disclosure and prior to execution of a contract/grant, the parties should ensure that: • The information falls within one of the protected exceptions of CRS 24-72-204, • Such information is clearly marked “Confidential and Proprietary”, and • Such information is segregated for easy removal from the contract/grant for a CORA disclosure.

25. CORA • In each agency the person deciding what is confidential is not normally the person responding to a CORA request. • As a result, do not think that you can decide what is confidential later. • If information will be generated under the contract/grant that meets the requirements for confidential treatment, the parties should make the decision up front for confidential treatment and clearly mark such information when it is generated.

26. CORA • Typically, vendor requests changes to Section 10, Confidential Information – State Records, to make it a mutual obligation and/or to remove Section 20(O), CORA disclosure. • Please contact the CCU for approved changes to these provisions.

27. Document Retention • The State Controller’s or his delegate’s copy of a contract/grant is the official “State copy” of a contract/grant, even though there may be more than one original contract executed. • Note: Deviations between original copies of the contract leave the State open to dispute. • This Controller copy is the copy that should be turned over in a CORA request.

28. Document Retention • As a result, the Controller copy should be retained until the later of the “Record Retention Period” in the provisions of the contract/grant or three years following resolution of any litigation involving the contract/grant (the “Destruction Date”). • If your agency does not track litigation on its contracts/grants, you should contact the AG’s office to confirm that there is no litigation/dispute over a contract/grant before its destruction.

29. Document Retention • Exceptions to the Destruction Date apply to the following types of contracts: • Real estate purchase/sale documents, which should be retained for the duration of the State’s ownership of such real property and for 3 years following the sale of the real estate by the State. • Securities debt documents (bonds, promissory notes, loans etc.), which should be retained for 3 years following termination of the debt. • AG comment – If your agency has a more strict document retention policy, you should follow it (the more strict policy).

30. Document Retention • Continuation of exceptions to the Destruction Date: • Securities, which should be retained for the duration of the State’s ownership of such securities and for 3 years following the State’s sale of such securities. • Note – Contracts regarding improvements to State-owned real property should be destroyed on the Destruction Date.

31. Online Provisions in Contracts • The purpose of a contract is to document the agreement of the parties. • It should provide notice to all parties of their respective obligations and duties. • When Central Approvers approve a contract, they are approving the terms and conditions presented to them at the time of execution. • The inclusion of online terms in a contract increases the risk of a contract.

32. Online Provisions in Contracts • The CCU prefers that online provisions not be included. • Options to avoid increasing risk through online provisions include: • Printing a copy of the current online provisions, making changes to such provisions (as necessary) and attaching them to the contract. • Inclusion of a click-through provision in the contract. • For large exhibits, copying an electronic version of such exhibits to a CD and attaching to the contract.

33. Online Provisions – Sample Click-Through Provision • The Parties acknowledge that Contractor’s website or software may contain a “click through” agreement which is integral to that website and/or product and which will require the State to click “I agree” or some similar action in order to proceed to use the website and/or software. However, the parties hereby expressly agree that all such click through, “shrink wrap” and any other such agreement mechanisms executed by the State in using the website and/or software are void and of no effect, do not create a binding assent by the State, do not modify this Contract, and do not in themselves create a separate contract of any kind.

34. Online Provisions in Contracts • In order to include links to online provisions in a contract, you must consider the following: • Do all parties have access to the provisions? • This includes not only the vendor and program personnel. • The Controller Delegate executing your document must know what he/she is executing. This may require you to submit a hard copy of the attachment. • Auditors may require a copy of such documents.

35. Online Provisions in Contracts • Continuation of considerations: • How long will the link be maintained? • Online provisions are part of the contract. As a result, they must be maintained for the entire Document Retention Period. • Who controls the online provisions? • State control of the link is preferred. • Federal control of a link related to a federal law, regulation or guideline can be accepted, but the party trying to enforce the obligation has the duty to ensure that the link is maintained.

36. Online Provisions in Contracts • Continuation of considerations: • Has the right to unilaterally revise online provisions been included? • Inclusion of this right on behalf of a vendor would be considered high risk. • The State’s unilateral right to alter obligations of the vendor may cause enforceability issues. • Contractual provisions which are not static make it difficult to approve a contract and may result in a contract being rejected by a Controller Delegate.

37. Online Provisions in Contracts • Continuation of considerations: • For auditing purposes and in litigation, you may be required to produce copies of online provisions applicable to the contract at any point of performance pursuant to the contract. Can you guarantee that you can meet this obligation?

38. Signatures – Original or Facsimile (scanned) • To avoid the issues to be discussed later, original signatures are the preferred form of signatures in contracts. • The OSC has approved the acceptance of facsimile/scanned signatures in limited circumstances. • Do not confuse facsimile/scanned signatures with electronic signatures. • With rare exceptions, electronic signatures are not accepted by the State in State contracting.

39. Signatures – Original or Facsimile • In order to accept facsimile/scanned signatures, the contract should include the following provision: • Acceptance of Signatures. The Parties agree that this Contract, agreements ancillary to this Contract, and related documents to be entered into in connection with this Contract will be considered signed when the signature of a Party is delivered by facsimile transmission or delivered by scanned image (e.g. .pdf or .tiff file extension name) as an attachment to electronic mail (email). Such facsimile or scanned signature must be treated in all respects as having the same effect as an original signature.

40. Problems with Facsimile/Scanned Signatures • What is the agreement of the parties? • You need one “final” version of the contract that is accepted by all parties. • If text changes between the different parties’ scanned versions of the contract used for signature, it may lead to no meeting of the minds if a dispute arises. • Generally with faxed/scanned signatures, the vendor executes all of the signature pages and emails only those pages.

41. Problems with Facsimile/Scanned Signatures • Cont. regarding vendor delivery of scanned signatures: • Signatures may be delivered separately from the full documents and they may be delivered before the final document is complete, which may lead to a dispute as to the agreement of the parties. • Some documents must be originals to be enforceable. • These “live” documents give the possessor certain rights. • Examples of live contracts include, but are not limited to, promissory notes, title documents, deeds/mortgages and securities documents (e.g. stock certificates, bonds etc.).

42. Fiscal Rule (FR) Waivers • State expenditures are subject to compliance with the FRs promulgated by the State Controller. • This applies to contracts, purchase orders and any other form of a commitment voucher. • See the following: • FR 2-2, Commitment Vouchers; • FR 3-1, State Contracts; and • FRs 4-1 through 4-3 related to Capital Construction.

43. Fiscal Rule Waivers • If you cannot meet the requirements of a FR, you need to request a FR waiver from the OSC. • The State Controller, in his sole discretion, may grant the request for a FR waiver. • This power has been delegated. • Responsibility for processing FR waivers is split between CCU and FAST in the OSC.

44. Fiscal Rule Waivers • FAST is responsible for FR waivers for: • FR 2-2; 2.7 – Encumbrance; • FR 2-2; 8 – Advance payments; and • FR 2-2; 9 – Emergencies. • CCU is responsible for all FR waivers relating to the contract, including, but not limited to, the following: • FR 2-2; 2.4 – Alternate Commitment Vouchers; • FR 2-2; 4 – Use of PO in Lieu of Contract; and • FR 3-1; 5.1.1.5 – Not to exceed amount (Maximum amount).

45. Fiscal Rule Waivers • FR waivers shall be processed through the agency’s Controller who must give his/her assent to the request. • FR waivers should include: • Support as to the benefit to the State for granting the waiver as opposed to compliance with the FR. • Ex., Advance payment FR waivers must include evidence that the advance payment is an established industry standard and/or provides a benefit to the State at least equal to the cost and risk of the advance payment (FR 2-2; 8.2).

46. Fiscal Rule Waivers • Cont. of FR waiver requirements: • If a contract is at issue, you should include a copy of the contract. • If you are requesting to use a PO in lieu of a contract, you should include the SOW. • The exact name of the vendor subject to the request. • If you reference that it is a sole source, include a copy of the approved sole source document.

47. Fiscal Rule Waivers • Cont. of FR waiver requirements: • The maximum amount of the request (if applicable) and the length of the requested FR waiver. • Generally, the OSC limits FR waivers through monetary limits and end dates for the waiver. • FAST FR waivers are generally granted for a maximum of 3 years. • CCU FR waivers are generally limited to the greater of 5 years or the term of the related contract. Some riskier waivers are granted for shorter terms or subject to additional requirements.

48. Fiscal Rule Waivers • Cont. of FR waiver requirements: • FR waivers can be submitted through email or in hard copy. • FAST FR waivers should be submitted to your assigned FAST representative and his/her backup. • CCU FR waivers should be submitted to RaLea Sluga (primary) and Robert Jaros (backup).

49. Fiscal Rule Waivers • Cont. of FR waiver requirements: • If your FR waiver includes multiple waivers that apply to both FAST and CCU, you can submit your request to one division and we will coordinate our efforts to grant one email to you with all related FR waivers that are granted.

50. Vendor Names in Contracts • The CCU has seen an increase in incorrect vendor names in contracts over the past few months. • Agencies/IHEs should ensure that the vendor name in their contracts matches the vendor name as registered with the Colorado Secretary of State and as it is listed in COFRS and CMS. • If it does not match, research why and fix it.