260:115-9-1. Contract performance, payment, disputes and termination

  1. Delivery.
    A supplier shall deliver acquisitions to a state agency within time periods the contract specifies.
  2. Inspection and payment.
    A state agency must establish quality assurance procedures that ensure timely and thorough inspection of acquisitions delivered to the agency. The state agency in receipt of an acquisition shall inspect the acquisition within a reasonable time after supplier delivery. The state agency shall not pay for acquisitions a supplier has yet to deliver, unless otherwise authorized by law or administrative rule. State agency payment to a supplier for an acquisition may not constitute final acceptance of the acquisition by the state agency. If subsequent state agency inspection affirms that the acquisition does not meet or exceed the specifications of the contract, or that the acquisition has latent defects, the state agency shall notify the supplier. The supplier shall retrieve and replace the acquisition at the supplier's expense or the supplier shall refund payment received if the supplier is unable to replace the acquisition.
  3. Rejection.
    The state agency shall reject acquisitions from the supplier that do not meet specifications or other terms and conditions of the contract. The supplier shall pay costs to retrieve and replace acquisitions that do not meet specifications with a conforming item or service. Whenever a supplier provides a state agency with defective products or fails to perform in accordance with contract requirements, a state agency shall notify the supplier in writing of the deficiency and include information necessary for the supplier to resolve the problem. If the state agency and supplier are unable to resolve the dispute, the state agency shall submit a written request for dispute resolution to the State Purchasing Director.
  4. Acquisition title.
    Title to an acquisition shall not pass from the supplier to a state agency until the state agency receives, inspects and accepts the items. The state agency shall document, at a minimum, the date of delivery, the name and address of the supplier, a description of the goods received and, as applicable, the signature of the receiving agency employee. Following transfer of title of an acquisition to a state agency, the supplier shall submit invoices to the state agency.
  5. Subcontractor performance.
    A supplier shall be responsible for the performance of subcontractors. The supplier shall provide a single point of contact for the state agency when the supplier uses subcontractors. The supplier shall obtain the prior written approval of the acquiring agency before utilizing a subcontractor.
  6. Contract modifications.
    If a supplier determines modifications to a contract, are needed the supplier shall notify the acquiring agency. No modifications shall be effective prior to the written approval of the acquiring agency via an addendum or revised purchase order when a purchase order is used instead of a written contract.
  7. Contract assignment.
    A supplier shall not assign any portion of a contract except as set forth in the contract terms and conditions.
  8. State agency submission of supplier performance evaluation form.
    A state agency may request the State Purchasing Director seek dispute resolution by submitting a Supplier Performance Evaluation, whenever a supplier:
    1. fails to timely retrieve and replace an acquisition that does not meet or exceed contract specifications;
    2. does not refund payment for an acquisition that does not meet or exceed contract specifications; or,
    3. fails to resolve any other problem that conflicts with the contract specifications or terms and conditions in a timely manner.
  9. State Purchasing Director dispute resolution action.
    The State Purchasing Director shall notify the state agency and supplier the outcome of dispute resolution efforts and if the dispute is resolved, the notice shall include any dispute resolution terms and conditions.
    1. Supplier fails to meet terms or conditions.
      If the supplier fails to meet specifications or terms or conditions of the dispute resolution or the terms and conditions of the contract if dispute resolution efforts are not successful, the State Purchasing Director is authorized to terminate the contract between the supplier and the state agency, and may suspend the supplier.
    2. State agency fails to meet conditions.
      If the state agency fails to meet conditions of the dispute resolution or the terms and conditions of the contract, the State Purchasing Director is authorized to order an audit of the state agency's acquisitions.
  10. Reasons for contract termination.
    An acquiring agency may terminate a contract in its entirety or any portion thereof if:
    1. a supplier fails to post, or allows to expire, a required bid bond, performance bond, or other type of surety bond;
    2. a supplier fails to deliver an acquisition pursuant to the contract;
    3. a supplier fails timely to replace at the supplier's expense, acquisitions that fail to meet the requirements of the contract or have latent defects;
    4. a supplier misrepresents the supplier's ability to provide an acquisition;
    5. a supplier's financial or other condition, including but not limited to, bankruptcy or other evidence of insolvency which may affect the supplier's ability to perform;
    6. a supplier commits an unlawful act or an act that impairs the supplier's ability to perform;
    7. a supplier commits an act that could result in the supplier's suspension or debarment from the Supplier List;
    8. an administrative error occurs prior to contract performance; or,
    9. if sufficient appropriations are not made by the Legislature or other appropriate governing entity or intended funding source to pay amounts due for multiple year agreements.
  11. Supplier responsible for damages.
    If an acquiring agency terminates a contract, the Attorney General of the State of Oklahoma, the State Purchasing Director, or the acquiring agency, as applicable, may seek damages from the supplier. In addition to damages set forth in a contract, direct damages foreseeable at the time of contracting and payable by the supplier shall include additional cost to obtain the acquisition from another supplier, the cost of re-bidding the acquisition and the cost of acquisition receipt delay.