The Model Vendor Contract is intended for use with contractors other than those conducting scientific research. Although each transaction and contractor will have unique requirements, certain contract provisions should appear in almost all QSSB contracts. Below is a discussion of each section of the Model Vendor Contract with guidance on when and how it may be modified. The discussion is not intended to be exhaustive. Any questions about particular provisions or contracts should be brought to QSSB’s or USB’s legal counsel. In fact, a QSSB should consult regularly with legal counsel regarding all but the most routine contracts and should have legal counsel review any substantive changes a contractor asks to make to the Model Vendor Contract or any contract presented by a contractor. 1.1    Project. This section sets forth the goods or services that will be provided and a reporting schedule. The section also provides for a list of contract deliverables. Although a list is not absolutely necessary, it is helpful for keeping track of the contractor’s obligations. The list can be included in the contract or as an attachment. Reporting requirements will differ depending on the nature of the work. 1.2    Compensation. It is useful to break out fees and expenses and provide a total for each category, as well as an overall total, in order to control costs. Separating fees and expenses, however, might not be necessary for all contracts. If fees and expenses are separated, you can list specific types of covered or prohibited expenses. 1.3    Terms of Payment. The terms of payment can be tailored to meet organizational and project requirements. Contractors, however, should be required to provide invoices with a description of services and itemized expenses. If a Contractor is providing services at an hourly rate, it should be required to provide time sheets or make them available on request. 1.4    Term. The contract can commence on a specified date or on the latest date that it is signed. If the start of the contract is contingent on an event or other factor, it should be set forth in this section. 2.1    Confidentiality. This section may vary depending on the nature of the contract. The model provision covers any information a contractor learns or receives from the QSSB. As written, the burden is on the contractor, and the QSSB does not have to designate information as confidential in order to protect it. Although a confidentiality provision should be included in most contracts, it is not necessary in all contracts. There will be circumstances in which the QSSB will share little, if any, information with the contractor. Even so, a confidentiality provision is a good protective measure in case the contractor learns sensitive information. 2.2    Change Orders. A QSSB should always reserve the right to change or stop work in progress. 2.3    Maintenance of Records. The language in this section must appear in all contracts. A contractor must be required to maintain records and make them available for inspection and audit by USB and the Secretary or their designated representatives. Subcontractors, if any, also must be required to maintain records and make them available for inspection and audit. 2.4    Indemnification. Although the exact nature of the indemnity obligation may vary depending on the contract, a contractor should always indemnify a QSSB for losses arising out of the contractor’s breach of the contract and services, particularly any negligence or willful misconduct. If the QSSB provides any indemnity at all, it should be as limited as possible. 2.5    Ownership, Releases & Consents. As a general rule, the QSSB should retain ownership of all materials and information generated by contractors. The ownership provisions in the Model Contract are not intended, however, for use in scientific research agreements. Although this Model Contract can be the basis for a research agreement, a QSSB should use the Model Research Funding Agreement and the ownership provisions contained in that agreement. This Model Contract section also protects proprietary materials used in projects and requires a contractor to obtain permission to use third parties’ proprietary materials. This section can and should be modified to meet the needs of specific projects. 2.6    Representations & Warranties. It is a good idea to have the contractor represent and warrant that it has authority to enter into the agreement and that it will not violate any laws or breach any agreements by doing so. Additional representations and warranties can and should be added to meet the specific needs of each contract. 2.7    Termination. A QSSB should be able to terminate the contract without cause with reasonable notice, which will vary depending on the project. The section also provides for termination in case of insolvency or a contract breach that is not cured. That language is useful but not necessary if the QSSB can terminate the contract without cause. The section also provides for winding up a terminated contract. At a minimum, a contract should provide for payment of undisputed amounts owed and the unconditional return of the QSSB’s property. The subcontract language is necessary only if there are subcontracts and it is based on the assumption that the QSSB must approve subcontracts (see Section 1.1(a)). 2.8    Insurance. Contractors should be required to carry commercial general liability or other appropriate insurance. The coverage amounts will vary, and it is not always necessary that the QSSB be named as an additional insured. In some cases, such as with small contracts or small contractors, insurance might not be necessary at all. 3.1    Relationship of Parties. This section states that the contractor is an independent contractor and not an agent or employee. This language protects the QSSB from certain legal liabilities arising out of relationships with agents and employees. 3.2    Waivers. Under this provision, if the QSSB waives a provision or a breach of contract, it does not waive the provision forever or any future breach. 3.3    Assignment. Contractors should not be able to assign or transfer the contract to anyone else without the QSSB’s permission. The QSSB should be able to maintain control over who provides services. 3.4    Influencing Governmental Policy. The first two sentences prohibiting contractors from using funds to lobby or allowing members of Congress to participate in the contract are required. The language regarding commissions is optional. 3.5    Modifications/Extensions. This section requires changes to be in writing. 3.6    Headings. This section deals with contract interpretation and is useful but not absolutely necessary. 3.7    Governing Law. As a general rule, the laws of the state in which the QSSB is located should govern the contract, and the contractor should consent to be sued in that state. The consent language, although not absolutely necessary, makes it easier to bring suit against an out-of-state contractor who breaches the contract. 3.8    Equal Opportunity. The language in this section, which has been drafted by USDA, must appear in all contracts. 3.9    Entire Agreement. This section should be included because it can prevent a contractor from arguing that the parties made an agreement that is different from the contract. 3.10   Force Majeure. This section deals with what happens if either party cannot perform their obligations due to a circumstance beyond its control such as an act of God, storm, flood, earthquake, labor strike, equipment failure or other similar situation. 3.11   Notices. This section determines when notices are received under the contract. It is useful in preventing and settling disputes about whether a party received a notice. 3.12   Severability. This section permits language that a court finds unlawful to be ignored without voiding the entire contract. 3.13   Counterparts. An optional section, it permits the parties to sign and exchange separate signature pages. It makes it easier to sign agreements with non-local contractors, particularly if there are more than two parties and/or time is an important factor. Each party signs two (or more) copies of the signature page, and then the parties exchange one (or more) signed signature page. Each party then has a fully executed original. This method takes less time than circulating a set of originals to all the parties for signature.