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Contract Performance

A contractor must supply goods and services conforming to the specifications of the solicitation and award. Failure to perform according to the specifications within the stated time may cause contract cancellation and may create liability for costs the state incurs in correcting deficiencies or obtaining replacement goods and services.

Inspection 

All goods/services received are subject to inspection and testing. If goods/services are defective or fail to meet the bid specifications, the state shall have the right to reject the goods/services or to correct the defects. The vendor shall pay the state for expenses incurred in correcting defects.

 

The state will provide notice to the vendor, refuse delivery or hold rejected goods for forty-five days after delivery awaiting instructions from the vendor. After the forty-five-day period, the state will dispose of the goods without further liability to the state. The vendor is responsible for the costs of handling, packing, and transportation incurred in returning or disposing of defective or nonconforming goods. If the inspection shows that the vendor is in default, the state may immediately cancel the contract or purchase order and hold the vendor responsible for any excess costs in procuring a replacement.

Complaints from State Agencies 

A state agency should initially make verbal or written contact with the vendor regarding a performance problem or defective product. If the problem remains unresolved, the agency initiates a formal compliant to vendor called a "Vendor Performance Summary" and sends the contractor a printed copy. The vendor performance summary will include a statement of the problem, the attempted resolution including any agreements between agency and contractor, and time-line to comply with the contract. DTMB-Procurement will become involved and may initiate an investigation when a vendor fails to satisfactorily address agency complaints.

 

DTMB-Procurement may take any of the following actions when it finds an agency's complaint is justified:

  • Suspension. DTMB-Procurement may temporarily cease using a contract/purchase order for a specified period of time.
  • Notice to Cure. DTMB-Procurement may issue a notice to cure specifying the deficiencies and the time period for remedial action to be taken.
  • Cancellation. DTMB-Procurement may cancel the contract/purchase order, assess the vendor for any damages, and consider the firm nonresponsive and ineligible for participation in any subsequent contract/purchase order rebid.
  • Debarment. After notice to the vendor and the opportunity for the vendor to cure the performance complaint, DTMB-Procurement may debar a vendor for cause from future contract/purchase order awards.

Complaints from Vendors 

If a vendor experiences payment problems, or requests by agency personnel beyond the terms and conditions of the contract, they should first attempt to resolve the problems with the agency. If these efforts are not successful, the contractor should contact DTMB-Procurement.

Authority To Modify Contracts 

If a change in price, performance, or terms is necessary only, DTMB-Prcourement may issue a Contract Change Notice or Advice of Change. The requesting agency has no authority to approve contract changes. A contractor rendering modified performance without an Advice of Change or Contract Change Notice issued by Purchasing Operations risks being found in default, and may not be paid.

Payment Procedure 

Businesses which provide goods and services to the State of Michigan are entitled to be paid promptly. The Prompt Payment Act (Public Act 279 of 1984) requires state departments to pay for goods and services within 45 days (unless otherwise agreed to). Vendors should work with the agency which received the goods or services regarding required documentation and payment issues.

Assignment 

The State issues warrants and electronic fund transfers (EFTs) in payment for goods and services in the name of the business who was awarded a purchase order or contract. The business, should they desire to assign payment jointly or to a third party, must furnish DTMB-Procurement and the user agency with an executed authorization which includes the name and address of the assignee. The contractor may not assign the right to receive money due under the contract without the prior written consent of DTMB-Procurement. The assignment will remain in force until formally revoked by the business that authorized it initially.