Chapter 2

Question 1

Definition of a Contract

Answer 1

“A contract is an agreement to do or not to do a certain thing.” (CC § 1549.)

-It’s an obligation or legal duty enforceable in an action at law
-Contract = Agreement (in SCM)

Question 2

Elements of a Valid Contract

Answer 2

-Identification of the parties

-Term for the performance or completion of contract

-Encumbrance of funds

-Consideration (must clearly express the maximum amount to be paid and the basis on which payment is to be made)

-Scope and deliverables (The work, service, or product to be performed, rendered, and/or delivered)

-Other general or unique terms and conditions of the agreement

-Signature by a person for each party who is authorized to bind that party

Question 3

Authority to sign a Contract

Answer 3

A State agency’s authority to contract is limited to those officers who either have statutory authority or have been duly authorized in writing by one who has statutory authority.

-Anyone signing should have sufficient knowledge in the area of contracting and the goods or services being procured.

Question 4

Audit by State Auditor

Answer 4

When required: All contracts over $10,000

Law/Statue: GC § 8546.7

Question 5

Nondiscrimination clause

Answer 5

When required: All contracts

Law/Statue: GC § 12990

Question 5

Audits and access to records

Answer 5

When required: For contracts subject to DVBE goals

Law/Statue: PCC § 10115, et seq. 2 CCR § 1896.60, et seq.

Question 6

Antitrust Claims

Answer 6

When required: All competitively bid contracts

Law/Statue: GC § 4550, et. seq.

Question 6

Statement of compliance

Answer 6

When required: Contracts $5,000 or over when not in bid documents

Law/Statue: 2 CCR § 11109

Question 7

Americans with Disabilities Act (ADA)

Answer 7

When required: All contracts

Law/Statue: 2 CCR § 11109

Question 8

National Labor Relations Board

Answer 8

When required: All contracts

Law/Statue: PCC § 10296

Question 9

Drug-free workplace

Answer 9

When required: All contracts

Law/Statue: GC § 8350, et seq.

Question 10

Progress payments

Answer 10

When required: All contracts where progress payments will be made

Law/Statue: PCC § 10346

Question 11

Recycled Content Products

Answer 11

When required: All contracts

Law/Statue: PCC §§ 6615, 12201(c), 12205

Question 12

Termination & Amendments

Answer 12

When required: All contracts

Law/Statue: GC § 11010.5

Question 13

Expatriate Corporations

Answer 13

When required: All contracts

Law/Statue: PCC § 10286.1

Question 14

Priority hiring considerations

Answer 14

When required: Contracts in excess of $200,000

Law/Statue: W&I §§ 11200, 11349 PCC § 10353
2 CCR § 1896.30

Question 15

Resolution of contract disputes

Answer 15

When required: All service contracts should; consulting services must; public works contracts may

Law/Statue: PCC §§ 10381, 22200, et seq.

Question 16

Validity

Answer 16

When required: All contracts requiring DGS approval

Law/Statue: PCC §§ 10295, 10335

Question 17

Subject to availability of funds

Answer 17

When required: All contracts signed before approval of budget

Law/Statue: State and Federal budgets