Technical Update vol. 29 no. 5 - Contracts in County Operations: Key Elements for Success

A contract is a written or spoken agreement, especially concerning employment, sales, or tenancy, intended to be enforceable by law. For counties, contracts are essential for conducting business with vendors, construction firms, or service providers. Consider a contract as a roadmap for any project or service, outlining expectations, responsibilities, timelines, payments, and goals. When used effectively, a contract becomes a powerful planning, accountability, and measurement tool.

SCOPE OF WORK (SOW)

The Scope of Work is a critical component of any contract, detailing the tasks, deliverables, and timelines required to complete the project. The SOW ensures clarity and alignment between all parties, reducing misunderstandings and disputes. A well-drafted SOW should include:

• Milestones: Key dates or stages for completing specific tasks, such as equipment installation or landscaping for a park construction project.
• Deliverables: The contractor must provide outputs, such as progress reports, at regular intervals.
• End Product: A description of the outcomes ensures all parties agree on project completion.
• Timeline: A schedule for task completion, allowing for accountability and progress tracking.

CONTRACT DURATION

The contract duration defines the time frame for the agreement, either in calendar days or working days. It outlines project-specific contracts' start and end dates, such as construction. For ongoing services, like office supply deliveries, the period during which the services will be provided is specified.
Key elements to consider in contract duration include:

• Start and end dates of the contract.
• Timelines for specific milestones or deliverables.
• Defined performance schedules for recurring services (e.g., weekly delivery days).

AUTHORIZED SIGNING PARTIES

Verify that contracts are signed by legally authorized individuals to maintain validity. For counties, this is typically the Board of County Commissioners or a designated representative (C.R.S. 30-11-103 and 30-11-101(d)). Confirm the accurate names and titles of both parties, and allow internal reviews by legal and financial staff to address issues before finalizing. These steps safeguard all parties and promote proper execution. 

DISPUTE RESOLUTION

 Including a dispute resolution clause in contracts helps avoid costly litigation. Such clauses often require mediation, where a neutral party facilitates an agreement, or arbitration, where a neutral arbitrator makes a binding decision. While arbitration can expedite resolution, its limited appeal options may be challenging for public entities. Organizations should clearly define their preferred dispute resolution process in the contract to avoid misunderstandings. 

OTHER ESSENTIALS

To further streamline contract execution and management:

• Point of Contact: Identify a designated representative from each party to act as the primary contact. This minimizes confusion and ensures clear communication.
• Document Management: Specify who will receive important documents related to the contract, such as insurance certificates, progress updates, and compliance reports.

WHAT THIS MEANS FOR COUNTIES 

Contracts are a fundamental aspect of conducting business at all levels of government, providing a clear roadmap for expectations, timelines, and costs. For counties, focusing on key elements such as scope of work, duration, authorized signatories, dispute resolution, and effective communication ensures confidence in navigating the complexities of contracting. A well-crafted and thoroughly reviewed contract is vital for achieving successful outcomes in projects and services. Counties should carefully review agreements and consult their county attorney to safeguard all interests. For further assistance, contact CTSI at (303) 861-0507.