Contracting with the DNRC Water Operations Bureau

The State of Montana Dept. of Administration has a standard contract that state agencies are required to use.  This standard contract has three components:

1. Standard language required for all contracts. 
2. Optional language that may need to be included depending on contract.
3. Scope of Work and Payment specific to contract intent.

DNRC encourages contractors to review the state boiler plate contract early on in the negotiation process.  To make this process easier, the Dam Safety Program and Floodplain Program have tailored the state required templates for common Program activities.

DNRC's Contractual Review Process

1. Contractor and DNRC agree on scope of work and payment
2. DNRC develops draft contract and submits to Contractor for review and comment
3. Contractor returns draft contract with their comments and the following:
   • Insurance certificate
   • If contract uses federal funds, forms AD1048 and NDAA_889
   • If contract is $100,000 or greater, Firearms Disclosure form
4. DNRC will finalize contract and route for internal DNRC review including:
   • Water Resource Division Fiscal - verifies funding is authorized
   • Water Operations Bureau Chief - approves scope of work and payment
   • DNRC legal counsel - approves contract language
   • DNRC Procurement / Dept. of Administration Procurement - verifies contract is in compliance with state laws.
5. DNRC Procurement will send the approved document to the Contractor for signature via DocuSign
6. DNRC will then sign the contract, also via DocuSign.  High dollar contracts require approval from senior DNRC leadership.
7. A final executed contract is sent via DocuSign to both signers and DNRC contract liaisons.

Few Notes:

• Currently, the DNRC review process can take up to a month, due to vacancies
• Sometimes emails from DocuSign go into Spam folders.  Be on the lookout if you are expecting a contract for signature

The Dam Safety Program has 3 primary contract categories:

External Engineering Assistance

The Dam Safety Program annually hires engineers to review engineering designs submitted as part of the construction permitting process.  Click link below to download a contract template that is tailored to external engineering review.

External Engineering Assistance Contract Template

Education and Outreach
The Dam Safety Program uses education and outreach as compliance tools to inform dam owners of their responsibilities, and to keep engineers abreast of industry advances.  Click link below to download a contract template that is tailored to education and outreach of dam owners and engineers.

Dam Owner & Engineer Education and Outreach Contract Template

Five-Year Dam Safety Evaluation Contracts

FEMA has provided funds to conduct the Safety Evaluation portion of the Five Year Dam Evaluation required to renew dam operation permits.  In order to utilize these funds, DNRC will need to contract with the engineer conducting the safety evaluation.  Click the link below to download a contract template that is tailored to safety evaluations.

Safety Evaluations Contract Template

Check back soon, additional information forthcoming.

IT Contract Template 2022-2

• Commercial General Liability Insurance: should be required when contractors perform work on state premises or property, other than the routine delivery of supplies. This coverage should also be required where bodily injury or property damage may occur as a result of the service being provided and in most traditional (i.e. accountants, architects, engineers, doctors, lawyers, ) professional liability contracts

• Automobile Insurance: should be required if the contractor will be transporting state employees, state guests, state clients, or state products as part of the contract.

•  Professional Liability Insurance: should be required in most traditional professional liability contracts (i.e. accountants, architects, doctors, engineers, lawyers, etc.) and in all other miscellaneous professional liability contracts where errors and omissions may result in significant economic damages for anyone who gives advice or provides services on which others have reason to rely and may be subject to legal action if the advice or service proves faulty.

•  Property Insurance: should be required in any contract that involves renovation or construction of state buildings.

•  Workers’ Compensation insurance or an exemption: should be required in all contracts

Insurance Limits

The Risk Management and Tort Defense Division recommends that state contracts require limits of $1,000,000 per occurrence /$2,000,000 per aggregate since these limits most closely coincide with the state’s tort damage caps. 

Note:  the level of risk may vary within the same contract if more than one type of insurance is required. The insurance limits stated in these specifications are recommended minimums and may need to be increased or reduced to reflect the risk associated with performance of the contract.

Many of the Water Operations Bureau Contracts use federal money from grants awarded to the DNRC.  Contracts using federal dollars must contain the following two forms as attachments.  Contractor should fill these out and provide to DNRC when contract discussions begin.

AD1048  certifies that neither the firm nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency;

NDAA_889  Section 889 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019 (P.L. 115-232 [PDF, 789 pages]) and the Federal Acquisition Regulation (FAR) Case 2018-017 prohibit the purchase of covered telecommunications equipment and services from vendors who sell products containing spyware

Note

• These need to be filled out and submitted to DNRC annually
• Forms are applicable to all DNRC contracts, so if submitted for a Floodplain Program Contract, it also will apply to a Dam Safety Program Contract.
• Form AD1048 asks for project name, we recommend putting something general that applies to all contracts, such as Water Operations Bureau Engineering Services. 

New Contractors - in order to execute a contract with the State of Montana, there are a few one-time activities: 

• Register in the Montana Acquisition and Contracting System (eMACS) as a Vendor 2 profile.  This is different than the Vendor 1 profile you may have filled out earlier in order to be notified of RFQ's and RFPs. 
• Fill out the a Federal W-9 Form Request for Taxpayer Identification and supply to your contract liaison:  Federal Form W-9

Federal Fund Contracts

• Early in the contract negotiation process, fill out required federal forms AD1048 & NDAA_889.  These forms are attached to the final contract before signature.  These forms are NOTORIOUS for delaying contract execution so to avoid delay, fill out as soon as possible.  

Contractor Legal Review of Boiler Plate Template

• We recommend sending the boiler plate contract template appropriate for the work to contractor legal review while you concurrently work on the Scope of Work and Payment sections.  If for some reasons, you cannot enter into a contract with the State of Montana due to language in the standard contract, this will be identified early saving everyone time and allowing DNRC to move to the next prequalified contractor.

• DNRC needs a copy of the required insurance certificates before the contract is signed.  This has caused recent delays in getting approval from procurement.  We respectively request that the insurance certificate be provided before DNRC routes the contract for State approval, to avoid delays.

Firearm Disclosure Form (for contracts > $100,000)

• The following form needs to be signed by a representative from the company and will be filed with the contract:  Disclosure of Nondiscrimination Against Firearms and Trade Associations

Can I request changes to boiler plate contract language?

No, DNRC is not allowed to accept changes proposed by the Contractor.  The Dept of Administration developed the standard contract language to assure consistency among state agencies.  Special provisions are included in the Warranty and Hold Harmless/Indemnification clauses to accommodate architecture, engineering and environmental service contracts.  One purpose of this website is to provide potential contractors the opportunity to review the standard boiler plate contract language in advance of contract negotiations.  

DNRC has approved minor changes to the warranty and insurance changes in the past. Can I request these same changes?

No. Following further discussions with the Dept. of Administration, DNRC legal counsel has adopted a policy of no changes to the boiler plate contract language, regardless of allowing variances in the past.   

What about noting clauses in the contract that do not apply to the contact work as "not applicable"  is that acceptable? 

There are sections within the boiler plate contract that can be noted as not applicable.  For example, if the contractor is not developing a product for distribution, then noting Section 18. patent and copyright protection as "Not Applicable" is acceptable.  Project specific contract templates are provided above with commentary on sections where it is appropriate to note "Not Applicable". 

The scope of work is arguably the most important part of the contract.  Some tips:

• Clearly define tasks in scope of work, noting intermediate deliverables.
• Consider phasing the work if some initial work is needed before secondary work can be scoped.  For example, write the scope to delineate Phase I tasks.  Phase II activities can be easily added with an amendment.
• Do not include DNRC review as a task in the Scope or Work; the contract is not intended to dictate DNRC activities.  Rather, include a task such as "Provide the State 10 days to comment on task 1 deliverables".  If the State fails to provide comments within the specified days, the contractor is cleared to move on with the work (although we encourage both parties to discuss reasons and options). 
• Often times, as a contractor moves forward with the work, a task may change.  If this is anticipated, consider adding language in the Scope of Work that provides this flexibility, such as "Modifications to Tasks 1 through 4 is allowed with prior written approval of the State".

The Water Operation Bureau's Qualification Based Selection process follows MCA 18-8-205 Negotiation of Contract for Services.  Engineering and surveying contractors are carefully chosen in compliance with MCA 18-8-204 Procedures for Selection. The Dam Safety Program and Floodplain program prequalify engineers every two years following the law, in a process long established by the Dept. of Transportation. Our engineering contractors are prequalified to provide non construction engineering services to the Floodplain Mapping and Dam Safety Program based on their qualifications and service area expertise.  This process eliminates the need to develop and advertise an RFQ and evaluate multiple SOQs for an individual project, thus saving considerable time for all. Below is an excerpt from our most recent request for qualifications, that describes the selection process in more detail:

Evaluation and Selection Process

All legitimate and complete SOQ proposals that follow the RFQ instructions will be evaluated by a committee selected by the Department. Evaluation will be made based on qualifications, experience and other criteria established by MCA 18-8-204. Following the review, evaluation, and rating of all proposals, a roster of the individual firms will be developed with rankings by category (1 - being the highest ranking in a category). Once approved by the Department, firms will be informed of their rankings in the categories for which they applied. A high ranking (e.g. 1, 2, 3…) in a category does not guarantee that a firm will receive any project work during the 2-year pre-qualification period.

 As new projects are deployed, the DNRC will select firms from the pre-qualification roster for the applicable project categories on an as-needed basis. Up to three firms may be considered and evaluated for each project. For certain projects, we may request equally qualified firms to provide additional information on their proposed approach to achieving project goals. The best-suited firm for the project will then be asked to review DNRC’s proposed scope and schedule and submit a cost proposal. An agreement will be made with the firm following successful negotiations per MCA 18-8-205. If an agreement cannot be reached with the first firm, the Department will begin negotiating with one of the alternate firms.

DNRC’s Dam Safety program has been partnering with the Federal Emergency Management Agency (FEMA) to accomplish its mission of maintaining safe dams.  FEMA annually provides DNRC grant funding under the National Dam Safety Act Assistance to States grant program to accomplish specific tasks.   DNRC outlines these tasks each year in May and presents a detailed work plan and budget to FEMA for approval. Funding to accomplish approved tasks is generally available in early August.  The funding level varies, depending on congressional appropriation and the number of dams reported by Montana to the National Inventory of Dams program.  Limited state general funds and funding through interagency agreements may also be used to complete select projects.

Projects can be divided into 5 general categories. 

• Dam Safety Engineering Peer Review and Technical Support
• Dam Safety Training / Development of Education and Outreach Materials
• Information Technology Assistance / Engineering Databases
• Emergency Preparedness
• Dam owner outreach and education

All activities related to the biennial prequalification are handled through the States online Acquisition and Contracting System (eMACS) https://spb.mt.gov/eMACS-Resources  More information and frequently asked questions regarding eMACS is discussed below. 

eMACS, or the electronic Montana Acquisition and Contracting System, is the eProcurement software solution utilized by the State of Montana that provides vendor management services, bid and procurement processes, and contract management tools, as well as the ability to track contract spend. 

Profile 1 - A basic registration that adds vendors to the vendor list. Vendors will receive notifications of State bidding opportunities and are able to respond to these opportunities online.

Announcements of upcoming Qualification Based Selection are sent to all registered vendors, who have expressed interest in engineering services opportunities.  

Profile 2 - Vendors awarded contracts are required to complete a Profile 2 registration. This level of registration requires vendors to provide not only the necessary company information but additional information such as payment and tax information, and insurance information.

To download instructions on completing a Profile 2: Creating a Vendor 2 profile in emacs 

For emacs assistance:

https://spb.mt.gov/eMACS-Resources
406-444-2575 General Assistance
emacs@mt.gov Email
vendorportal.mt.gov to register!
Vendor Registration and Data Management Handbooks

Most of the Water Operations Bureau Contract work is for engineering and related services.  Montana Code Annotated MCA 18-8-2  Architectural, Engineering, & Land Surveying Services applies. 

MCA 18-8-204 The statute provides procedures for selection and contract negotiations specific to engineering services. The Water Operation Bureau prequalifies engineers carefully adhering to the procedures outlined in this law.

MCA 18-8-212 This law provides an exception, allowing the Water Operations Bureau to directly contract for engineering services without following the procedures outlined in MCA 18-8-204, as long as the total contract value does not exceed $50,000.  Please note that in fairness to the engineering firms that go through the Qualification Based Selection Process, the Water Operations Bureau will only be using this exception for Five Year Safety Evaluation contracts (i.e. dam owners choose the engineer). 

Accrual Definitions

As we near the State fiscal year end, contractors will hear staff mention accruals.  Accruals allow the State to secure funding that has been obligated from the previous fiscal year.  There are two types of accruals:

B-Accrual: Otherwise known as a "Before Accrual", if a contractor has provided goods or services on or before June 30, 20XX, and the payment will not be made prior to closing fiscal year end, this will be a B-Accrual.  

A-Accrual: Otherwise known as an "After Accrual", if a contract is in place for services to be received after June 30, 20XX, or a grant agreement that is valid beyond June 30, 20XX, the funds allocated under this contract are considered to be an A-Accrual. 

Notes: A-Accruals cannot be established for continuing appropriations. B-Accruals should be established for continuing appropriations for merchandise or service received on or before June 30, 20XX.

Accruals are only required for the state fund portions of a contract.  Accruals are not required for federal funds where the contract spans fiscal year end.