Government & Politics
 

How to read a government contract

The city of New Orleans, like many government bodies, relies on private companies to do some of its work. When the city hires a company, it signs a contract outlining what the firm will do and how much it will be paid.

The Lens has created The Vault, a searchable database of city contracts. These form a written record of how the city spends its money.

Here’s a primer on  how to read these contracts. We’ll use two contracts as examples:

How do you tell these contracts apart?

Each contract that the city signs is identified by a “K” number. “K09-637” means this was the 637th contract signed in 2009.

Who is the city doing business with?

How was the contract awarded?

When the city wants a company to do a job, it can take two approaches: solicit bids or put out a “request for proposals.” Some jobs — buying materials and supplies, for example — must be handled through bids, which essentially requires the city to choose the lowest price.

If the city puts out a “request for proposals,” it can take other factors into account besides the price.

The contract with Signal 26 was handled through an “invitation to bid,” which essentially requires the city to take the lowest offer.


The contract with Three Fold Consulting was handled through a “request for proposals,” in which price is just one factor.


Three Fold’s contract cites the Request for Proposals number.

What work will be done?

Three Fold’s contract spells this out in the “scope of services” section, which runs more than a page long.


In the contract with Signal 26, this information is in a section called “Contractor’s Obligations.”

What statements and promises have been made?

The “representations and warranties” section of the contract contains statements of fact related to the contract and promises about the work to be covered. For instance, the Three Fold contract says no bribery took place to win the contract, which turned out to be false.

How much will the government pay?

The Three Fold contract puts a maximum amount:


It also requires that the company submit monthly invoices describing exactly what was done.


In the Signal 26 contract, this is contained in a section called “city’s obligations.”

How long does the contract last?

Are any additional documents part of the agreement?

Who signed the contract and when?

Read the full contracts

This story was updated after publication to include a link to The Vault. (June 20, 2014)

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