25520001_-_Exhibits_A-D.pdf

California Department of Veterans Affairs Agreement Number: 25520001 Exhibit A - Scope of Work TBD

THIRD PARTY ADJUSTING SERVICES

1. INTRODUCTION/SERVICES

A. The Contractor shall provide third-party adjusting services for the California Department of Veterans

Affairs (CalVet) Headquarters, (Headquarters), located at 1227 O Street, Sacramento, CA 95814 and at the Contractor’s place-of-business or designated location(s). The Contractor shall provide all labor, materials, staff, transportation, per-diem, license, permits and every other item of expense necessary, unless otherwise stated, to provide Third Party Claims Adjusting services. Services shall be performed for the benefit of California veterans participating in the CalVet home loan program administered by the Home Loans Division.

B. All work shall be coordinated and approved by Contract Manager or designee. Services shall be performed during standard business hours, Monday through Friday unless otherwise specified. No work is to be performed on State holidays or on an overtime basis unless prior approval is received in writing from the Contract Manager, prior to this work taking place. Any and all services performed outside the scope of this Agreement or not approved by the Contract Manager, or designated representative, will be at the sole risk and expense of the Contractor.

C. Contractor must perform services under the scope of their license and in accordance with federal and state laws and regulations as well as CalVet policies and procedures.

D. The Contractor is not authorized to deliver or commence performance of services as described in the agreement until written approval has been obtained from CalVet Contract Manager and the Contractor has received an executed contract from CalVet. Any delivery or performance of service commenced prior to the Contractor obtaining all written approvals shall be considered voluntary on the part of the Contractor.

2. MINIMUM QUALIFICATIONS

A. All service performed under this Agreement shall be performed by qualified service personnel in the employ of or under the direction of the Contractor.

B. Contractor shall have a minimum of 10 years providing Third Party Adjusting (TPA) servicers.

3. CONTRACTOR’S RESPONSIBILITIES

The Contractor shall provide claims handling expertise and services to CalVet as described in the responsibilities and tasks below.

A. Claims Handling Procedures

1. Complete claims handling from the first report to issuance of a claim payment. Additionally, subrogation recovery and pursuit when applicable. CalVet reserves the right to retain subrogation recovery internally for losses incurred by public utilities companies (PUC), such as, PG&E and So Cal Edison.

Maintain a dedicated CalVet claims unit within the Contractor’s California office. Staff shall handle approximately 300 claims annually, with flexibility to scale up as needed. Staff-to-claims ratio: 80 open claims under $100,000 plus 20 large loss claims per full-time Desk Adjuster.

2. Contractor’s CalVet Claims Unit Staff Shall include:

a) Administration (Account Executive)

b) Desk Adjuster / Desk Examiner

c) Claims Manager(s)

d) Pool of Field Adjuster located in Northern, Central, and Southern California

3. Provide a claims manager(s) whose responsibility is to manage CalVet claims and respond to the needs of CalVet.

4. Receive approval in advance from the Contract Manager or designee for all required desk adjusters and / or claims managers assigned to this Agreement.

5. If any of these Contractor’s positions are unable to perform due to illness, resignation, or factors beyond the Contractor’s control, the Contractor shall immediately submit qualifications of proposed substitute staff to CalVet for approval. Failure to do so may be cause for termination of this Agreement. CalVet shall be notified of any additions or corrections to the Contractor’s list of prospective staff at least five (5) working days before the Contractor’s start date.

6. Isolate the CalVet data base from all other divisions within the Contractor’s claims operations. CalVet claims should be assigned to a specific client code for which only CalVet claims will be accessed via this specific client code.

7. Provide customized claim forms and loss run reports as needed by CalVet.

8. Shall monitor CalVet’s toll-free number (800-626-1613) for veterans to report claims. This phone line shall be in service 24-hours per day, seven (7) days per week.

9. Applicable phone scripts are to be approved by CalVet and then used by Contractor staff for efficiency and consistency.

10. Maintain administration and management of all claims in the Contractor’s place of business, and process claims according to this Scope of Work.

11. Handle all CalVet claims via the Desk Adjuster and refer to the Field Adjuster, Claims Manager and/or

Engineer, Licensed Contractor, or other licensed professional, or requested by CalVet.

12. Contractor shall administrate a Loss Fund/Claim Payment Bank Account provided by CalVet to pay claims and shall:

a) Use this bank account to write checks for claims;

b) Maintain accurate bookkeeping records of the account;

c) Provide CalVet with a monthly record of the account;

d) Advise CalVet when the account needs to be replenished, in writing.

e) Perform other related banking functions as requested by CalVet.

f) Shall pay any fees related to overdrawn accounts.

13. Utilize digital recording whenever a recorded statement is taken from the Veteran / Contract Holder

(CH).

14. Reject Proof of Loss statements if they contain any amended or added language.

15. Contractor must not deny any claims without obtaining approval from CalVet and Contractor must submit a file with complete investigation / documents with recommendation(s) to CalVet.

16. Contractor must contact CalVet to receive guidance while adjusting sensitive or specially handled claims.

17. Contractor must send Reservation of Right (ROR) letters, thirty-day (30) letters, settlement letters on all claims to the Veteran / CH. The letters must have a printed date.

B. Fire and Hazard / Disaster Indemnity Requirements

1. Contractor shall address repetitive claims with CalVet during the monthly meeting

2. Fire and Hazard - Form A / Form B: The co-payment could be increased based on the narrative in

CalVet’s Form A or B, dependent on the filing of multiple claims within a specific time frame. See coverage forms for other contract limitations.

3. Disaster Indemnity - Form D / Form C: See coverage forms for applied co-payments and other contract limitations.

View current CalVet coverage documents at: www.calvet.ca.gov/HomeLoans/Pages/Insurance.aspx

C. Loss Reporting:

1. Losses shall be reported by the Veteran / CH to the Contractor via designated telephone or email address.

2. New loss claims shall be processed by inside administrative staff and logged into the Contractor’s designated CalVet claims database.

3. Contractor’s Desk Adjuster shall provide instructions to the Veteran / CH during the initial call regarding the steps the Veteran / CH must take to mitigate their loss, contact emergency services when applicable, and document their claim.

4. Contractor must send in writing via USPS or overnight delivery, or via email if requested by the

Veteran / CH in writing, instructions provided during the initial claim filing within 24 hours.

5. All written communications shall be placed in the claims file.

6. Contractor must send an acknowledgment letter to the Veteran / CH and a copy to CalVet for all filed claims.

7. Contractor’s Administrative Staff shall prepare the file, complete the data input, and dispatch to appropriate Desk Adjuster. Administrative staff shall not discuss coverage and exclusions with the Veteran / CH, however may provide scripted information as approved by CalVet. Coverage discussions must be initiated by the Desk Adjuster.

8. Preliminary coverage indication shall be confirmed within three (3) business days of the report date by the Contractor’s Desk Adjuster or Claims Manager including pertinent policy endorsements and any policy clauses that may impact the loss. Final coverage determination may be made following applicable field investigation and cause of loss determination. At no point shall Contractor infer coverage without supporting documentation. If consideration is given, contractor shall obtain a reservation of rights, prior.

D. Claims Assignment:

1. Claims shall be assigned to a Desk Adjuster for triage. However, if the claim is significant enough to be triaged as Priority, Complex, and / or Large Loss; the Contractor’s Claims Manager may directly dispatch a Field Adjuster. The assigned Field Adjuster may be advised to handle the claim to conclusion or report to the Desk Adjuster.

2. Contractor shall credit the flat fee (as indicated on the B-1 Rate Sheet) when a loan is converted/upgraded and T&E gets charged. EQ claims both the intake fee and T&E are charged.

3. Large Loss Claim is considered any claim over $30,000.

a) The Contractor is required to advise and consult with CalVet on all large loss claims.

b) The Contractor must require a notarized Proof of Loss (POL) Statement to be completed by the Veteran / CH on all losses $30,000 (thirty thousand) and above.

c) All large loss issued checks must be made payable to and sent to CalVet via USPS or other mail services to: (1227 O Street, Rm 218, Sacramento, CA 95814).

d) As an exception, any requests for checks over $30,000 to be made payable and issued directly to the Veteran / CH and the licensed Contractor are to be approved by CalVet prior to issuance.

Authorization via email from CalVet to the Contractor shall suffice as a confirmation of such authorization.

4. Desk Adjuster shall attempt to make telephone contact with the Veteran / CH within 24 hours for triage. All telephone numbers provided shall be called and messages left until the Veteran / CH is contacted directly.

a) If Desk Adjuster is unable to make telephone contact or leave a telephone message, a Contact

Us letter shall be immediately sent via USPS and, if applicable, by electronic delivery to the Veteran / CH.

b) If the Desk Adjuster is able to leave a message, and the Veteran / CH does not return call within the subsequent 24 hours, all known telephone numbers shall be called again, and a Contact Us letter shall be sent via USPS and, if applicable, by electronic delivery within three (3) business days. CalVet is to be notified, to assist in ensuring contact with the Veteran / CH.

c) Purpose of first contact with the Veteran / CH by the Desk Adjuster is to review the initial loss report and determine basic facts, what actions have been taken, draft an activity plan, and establish reserves. Desk Adjustor must be able to assess and handle the claim upon first contact by the Veteran / CH.

d) If, following initial contact, a field inspection is determined to be needed, the Desk Adjuster shall request approval from CalVet for the field inspection. For all field adjuster assignments, either pre-approved or subsequent, notification of such should be sent to CalVet.

e) Field Adjusters shall report directly to the Desk Adjuster who shall follow through on all post-inspection activities.

f) A field inspection and a written assessment shall be completed on any claim where mold is suspected or becomes apparent. Reserves shall be broken out specifically for mold.

g) Either the Desk or Field Adjusters shall negotiate an agreed upon scope and a repair estimate with the Veteran / CH or the Veteran / CH’s designated licensed contractor, if applicable.

E. Open Claims Management:

1. Field Adjusters must contact the Veteran / CH within one (1) business day of receiving their assignment from the Desk Adjuster or Claims Manager.

2. Inspection must be completed within two (2) business days, unless the Veteran / CH specifies a longer time frame for scheduling convenience. Veteran / CH specified time frames are to be reasonable and confirmed in writing. If the inspection cannot be completed within two (2) business days, the delay will be communicated to CalVet.

3. All inspections shall include numerous detailed photographs of the following:

a) property address

b) risk from the street

c) overview of the damaged areas

d) close up of the damage areas

e) photographs documenting the cause-of-loss

f) photographs documenting origin of the loss.

g) photographs of the surrounding areas of the home.

4. All losses shall be diagrammed.

5. All appointments shall be honored timely.

6. Unforeseen delays shall be immediately communicated to the Veteran / CH and documented in the claims file.

7. Adjusters shall dress appropriately for the inspection and customer contact, and behave professionally with accepted business decorum.

8. Field Adjusters shall maintain the tools and supplies necessary to complete onsite inspections.

9. Field Adjusters are not authorized to discuss coverage with the Veteran / CH.

10. Field Adjusters must document if any verbal approval for demolition has been provided.

11. Veteran / CH shall obtain estimates for repair work from licensed contractors of their own selection.

12. If the file remains open more than 30 calendar days, the Contractor shall send a written status notice every 30-days thereafter, explaining pending issues, and listing the remaining items needed to resolve the loss.

13. Copies of all letters and emails shall be placed in the claim file.

14. All telephone messages and emails shall be returned timely, striving for one (1) business day after receipt.

15. Contractor must review and respond to reports / bids / and other similar documents from the Veteran

/ CH within no more than seven (7) Calendar days.

16. Recorded statements shall be taken by a Desk or Field Adjuster from the Veteran / CH whenever there is an apparent late notice of loss.

F. Claims/Field Adjuster Reports / File Management:

1. Field Adjusters are required to submit a written report and estimate to the Desk Adjuster within seven (7) calendar days of receiving their assignment and shall adhere to the same diary and reporting guidelines as Desk Adjusters.

2. Desk Adjuster maintains all files on a twenty-five (25) calendar day follow-up diary, unless otherwise noted in their claim file notes.

3. Diaries shall be set and closely adhered to coordinate with report deadlines set forth by the

Department of Insurance (DOI).

4. Diaries shall be set in Contractor’s case management diary system.

5. Weekly printouts of open diaries shall be supplied to all adjusters, with copies to the Contract Claim

Manager.

6. Inside Desk Adjusters shall review the diary report weekly and report to the Contract Claim Manager regarding inconsistencies or errors.

7. All adjusters are required to be thorough and use best practices in their diary management techniques to include, noting verbal communications, file documentation, file organization, regular status updates, through file closure.

8. Activities and reports shall be completed on or before the diary date.

9. Adjusters shall consult with the Contractors Claim Manager directly when any questionable or unusual circumstances are encountered on a claim.

10. Reports may be in word or in a PDF format; however, if in Word format, letter date must be typed without using the ‘today’ (month day, year) autofill formula.

11. Field Adjusters shall develop their own scope of work and complete their own written estimates, regardless if a Veteran / CH selected licensed contractor is already involved in the loss, and provide a complete copy of all written reports and photographs to the Desk Adjuster.

12. Cause & Origin (O&C) reports are required on all Fire losses with reserves of $20,000 or more. Any Fire loss under $20,000, an O&C report shall be at the discretion of the Contractor only with the approval from CalVet.

13. Resolution letters and/or emails shall be sent to the Veteran / CH on all claims within seven (7) calendar days of resolution.

14. Statement of Loss (SOL) or financial summary shall be included with resolution notice to the Veteran / CH along with a copy of the approved estimate.

15. After CalVet’s review and concurrence of denied claims, Veteran / CH to receive resolution letter and applicable documentation.

16. Financial summary, reflecting payee, amounts and dates to be documented with the Contractor’s file.

G. Reserves:

1. Reserves shall be set based on probable maximum repair/replacement cost estimate within the policy limits, less the co-payment. Reserves shall not be based on a hoped-for settlement or a worst-case scenario.

2. Reserves shall be adjusted as new information develops and/or upon review by the Desk Adjuster or Claims Manager, and any adjustment noted in the file notes.

3. Reserves shall be set proportionate to the loss at the time the Desk Adjuster first discusses the claim with the Veteran / CH so that repeated stair stepping reserve adjustments are minimized.

4. Reserves must be supported within the main claim’s file.

5. Field Adjusters must support reserves within the written assessment report.

6. Reserves are required to be reasonably accurate ninety (90) calendar days into the loss.

7. If reserves exceed $30,000, the file shall be escalated to Large Loss Handling and may be considered for re-assignment at the discretion of the Contractor Claims Manager, depending upon severity or complexity.

H. Claim Payments and Settlement Authority:

1. Before denying coverage for a loss of $5,000 or more, a Field Adjuster is required to perform an onsite inspection, unless prior approval received from CalVet.

2. If Loss is estimated to exceed $30k, Field Adjuster to notify CalVet.

3. Losses up to $2,500

a) Claims may be adjusted over the telephone with minimum of one signed estimate.

b) Checks are issued and made payable to the Veteran / CH.

c) Contractor has authority to settle claim.

4. Losses from $2,501 to $9,999

a) The Field Adjuster may only make an on-site inspection if authorized by CalVet.

b) Either two bids from licensed contractors designated by the Veteran / CH are required to be provided by them, or if an inspection is performed by the Field Adjuster, one bid from a licensed contractor and the written estimate from the Field Adjuster shall be used to negotiate the settlement of the claim.

c) All checks are issued and made payable to the Veteran / CH and the licensed contractor.

d) Contractor has authority to settle claim.

5. Losses from $10,000 to $29,999

a) If an onsite inspection is authorized by CalVet, the Field Adjuster will inspect the reported loss and make a written assessment of the loss.

b) Either two bids from licensed contractors designated by the Veteran / CH are required to be provided by them, or if an inspection is performed by the Field Adjuster, one bid from a licensed contractor and the written estimate from the Field Adjuster shall be used to negotiate the settlement of the claim.

c) All checks are issued and made payable to the Veteran / CH and the licensed contractor.

d) CalVet to approve all coverage and payments.

e) Additional work after the first inspection is required to be converted to T&E.

6. Losses $30,000 and up are considered Large Loss Category

a) The Field Adjuster is required to inspect and make a written assessment of the loss.

b) Immediate notice to CalVet is required.

c) Two bids from a licensed contractor and the written estimate from the Field Adjuster shall be used to negotiate the settlement of the claim.

d) All checks must be made payable and sent to CalVet to be held in a cash trust account.

e) Any requests for checks to be made payable and issued directly to the Veteran / CH and the licensed contractor are required to be approved by CalVet prior to issuance. Authorization via email from CalVet to the Contractor shall suffice as confirmation of such authorization.

f) CalVet to approve all coverage and payments.

7. Losses in excess of $50,000 (in addition to #5 above)

a) A recorded statement shall be taken.

b) Immediate notice to CalVet is required.

c) The Field Adjuster must review the CalVet’s Veteran / CH’s file documentation to determine the square footage of the property at the time of purchase, and any design revisions that have been reported to CalVet.

d) The Field Adjuster shall also include a Residential Building Evaluation / Veteran / CH to Value report.

I. Claims Settlement:

1. Contractor shall adhere to the ‘settlement process’ outlined in Form A. In addition, to those listed below.

2. Generally, No depreciation taken on Form “A” dwellings, to include the main garage unless home has aspects of deferred maintenance. Depreciation shall be applied to Contractor estimates on all outbuilding, plus Form “B”, Other Structures, detached from the main dwelling.

3. Contractor shall fully develop a scope of loss and repair / rebuild estimate.

4. Contractor to provide notification to the Veteran / CH that any claim repairs to be performed by the

Veteran / CH or any demo must first be approved by CalVet prior to any work being performed.

Contractor to obtain approval for any claim repair to be performed by the Veteran / CH.

5. CalVet shall have no additional liability for any costs that occurs due to overpayment, incorrect payment or claims unauthorized by CalVet.

J. Coverage Issues:

1. Reservation of Rights letters are required to be sent by the Contractor to the Veteran / CH on all claims where there are coverage issues.

2. If the loss has potential coverage issues, a recorded statement shall be taken during the Desk Adjusters first contact with the Veteran / CH, or when the coverage issue is identified based on the new information.

3. Before denying coverage on questionable claims based on causation, the claim file and all investigation materials must be submitted to CalVet for review and final decision.

K. Subrogation:

1. The Contractor shall actively pursue subrogation opportunities, excepting those losses involving PUCs unless written authorization is provided by CalVet.

2. Subrogation issues and salvage potential shall be addressed during the initial Veteran / CH’s contact and subsequent written instructions.

3. When there is subrogation potential, the Veteran / CH shall be directed to keep the broken or faulty component. The chain of custody shall be protected and the defective component given to the Field Adjuster during the onsite inspection.

4. Notice of Subrogation letters shall be sent as soon as the name and address of potential subrogates are obtained.

5. Contractor shall maintain a separate file for the Subrogation claim and document all expenditures.

This file may be audited by CalVet at any time and Contractor shall cooperate with CalVet during such audit.

6. All subrogation files must include the original loss number and original file number.

7. Contractor shall review all pending subrogation claims with CalVet at each monthly claims meeting.

8. Contractor shall contact CalVet before entering into any final settlement of a subrogation claim.

9. Subrogation Recovery - total dollars earned for each of the following subrogation percentages

a) 25% - Received on all non-litigated claims

b) 5% - Received on all litigated claims

c) Up to 15% - If the litigated subrogation claim required more of the Adjuster staff time that the equivalent dollar amount that 5% of the gross would produce, then the Contractor may recover its time and expense up to a maximum of 15% of the gross amount recovered per subrogation claim, providing that the Contractor has a separate auditable file for any matters pertaining to that specific subrogation claim. Time shall be charged at the contractual hourly rate.

d) 0% - Unless previously authorized by CalVet, Contractor shall not receive any subrogation monies from losses incurred as result of PUC’s when CalVet’s Legal Services Division, or designee, is involved, or from the sale of any subrogation rights when efforts by the Contractor have not resulted in any payment.

L. Salvage:

1. Salvage value shall be determined using Industry Standards whenever potential salvage exists.

2. Salvage efforts must be cost effective unless otherwise directed by CalVet.

3. Offset for salvage retention shall be taken whenever possible, per Industry Standards.

4. Salvage disposal shall be arranged and coordinated by the Contractor.

M. Suspected Fraud:

1. All Desk and Field Adjusters shall be trained in fraud detection.

2. Recorded statements shall be taken by a Desk or Field Adjuster whenever there is an apparent

Special Investigation Unit (SIU) red flag.

3. Potential fraudulent claims (SIU red-flags) shall be identified in each file as necessary. The Contractor shall proceed upon authorization and instruction from CalVet.

4. Claims with suspicious circumstances shall be discussed with the Claims Manager and CalVet so a detailed investigation action plan can be developed.

N. Claim Transfers between Contractor(s):

1. Contractor shall provide all reasonable assistance to CalVet in receiving claim files from prior CalVet Contractor, and in transferring claims files to any subsequent Contractor retained by CalVet, to include both open and closed files. This shall include both electronic data and physical paper files, if applicable.

2. Contractor shall, at the option of CalVet, adjust any claims transferred to the Contractor from a prior

CalVet Contractor during the transition phase and shall be paid on a Time and Expense basis.

O. Information Storage / File Access by CalVet:

1. CalVet designated users shall be granted a user name and password and shall have access to view the Contractor’s electronic file data and claim notes related to CalVet claims.

2. CalVet designated users shall have the ability to search database by claim number, CalVet contract number or V’s last name.

3. CalVet shall retain ownership of claims files and may take possession of claims files upon the termination of this Agreement.

4. Contractor shall store claims files in both hardcopy and electronic form for a minimum of five years from the date of file closure for auditing purposes. (Please refer to the State’s General Terms and Conditions (GTC 04-2017) for accessibility and records retention information.) Contractor shall notify CalVet 30 calendar days prior to any destruction of claim files in both hardcopy and electronic form.

5. All claim files, both on paper and electronic, are the property of CalVet and may be viewed at any time upon reasonable notice.

6. Upon termination of the contract, all such information shall be transferred to CalVet, or any third party they designate, or to another location as directed by CalVet. Upon request, electronic files shall be transferred as requested, and physical files and evidence transferred within 30-calendar days.

P. Meetings / Training:

1. Attend monthly claims meetings at CalVet Headquarters in Sacramento, CA, or virtually as agreed to by both parties.

2. Participation in specific claims meetings, as requested.

3. Contractor shall be prepared to discuss the claims aged 6 months or longer at the monthly claims meeting. In addition, to designated claims on the agenda.

4. Participation in seminars for the education of CalVet staff in Sacramento, CA.

Q. Travel Expenses:

1. CalVet to approve all travel expenses needed for adjusting claims.

2. Travel expenses are only for time, mileage and tolls. All travel expense outside of the large loss category and earthquake claims require CalVet’s approval.

3. Mileage to be paid at State of California Per Diem Rate. Mileage to be paid in conjunction with hourly to be approved by CalVet prior.

4. Travel expenses limited to pre-approved mileage and tolls at State per diem rates.

R. Issuance of Payments for Non-Covered Losses:

1. Issuance of payments for non-covered losses and/or in excess of limits cited in CalVet Forms A, B, C and D require CalVet approval.

2. Overpayment of claims may be the sole responsibility of the Contractor, if not previously approved by CalVet in writing.

S. Reports / Forms:

1. Contractor shall provide CalVet reports listed below or otherwise required:

a) Monthly Reports shall be received prior to the 2nd Tuesday of each month, or as directed by

CalVet.

b) Fiscal Year Reports shall be received on or before July 15th.

2. In addition to Reports, the following Forms and Services shall be provided by the Contractor:

a) Customized Claim forms as needed by CalVet

b) Fire and Police Reports

c) Ad hoc reports on an as needed basis at the request of CalVet

3. Loss Run Report:

a) Shall be provided in Access Database tables or Excel spreadsheets differentiating Fire and

Hazard and Disaster Indemnity Claims.

b) The following fields are required on the Loss Run Report:

1) Contract Number

2) Claim date of loss

3) Close date of claim

4) Open / Closed Status

5) Coverage (Cause) Code

6) Coverage (Cause) Description

7) Description loss and damage

8) Contractor claim number

9) Expenses

10) Reserves

11) Veteran / CH’s name

12) Address (property address and city)

4. Monthly Reports:

a) Loss Run Report

b) Repetitive Claims Report:

c) Contract number

d) Veteran’s name

e) List all claims ever made by Veteran / CH

f) Claim number for each claim made

g) Description of the loss

h) Reserve Amount / Amount incurred to date

i) Status of the claim

5. Open Claims Report:

a) List claims open more than 6-months

b) Contract number

c) Veteran / CH’s name

d) Description of the loss

e) Status of the claim

f) Reserve Amount / Amount incurred to date

6. Fiscal Reports:

a) Claims Paid - Separate Fire and Hazard from Disaster Indemnity

b) Claims Adjusting Fee - Separate Fire and Hazard from Disaster Indemnity

7. Subrogation Recovery - total dollars earned for each of the subrogation percentages

4. LICENSES, PERMITS, AND CERTIFICATION REQUIREMENTS

A. Prior to providing services specified in this Agreement, Contractor or Contractor’s staff shall possess and maintain throughout the term of this Agreement, all licenses, permits, and certification requirements.

B. If, during the course of this Agreement, any of the licenses and/or requirements are found to be inactive or not in compliance, CalVet may withhold payment for services rendered during the expiration period and/or immediately terminate this Agreement.

C. Assume responsibility for verifying, through the appropriate licensing boards, that no current or unresolved adverse actions have been taken by the State licensing authorities against any Contractor’s staff member(s) assigned to CalVet, and that all licenses are active and void of misconduct. CalVet may, at its discretion, verify the current status of Contractor’s staff member (s) assigned.

5. INDEPENDENT CONTRACTOR STATUS

A. The Contractor/Contractor’s staff member(s) shall be considered “Independent Contractors” in relation to

CalVet and the State. Therefore, the Contractor/Contractor’s staff member(s) shall not be considered employee(s) of the CalVet and shall not be entitled to any employee benefits from the CalVet or the State of California including, but not limited to, the following:

1. Premium Pay, Overtime Pay, or Holiday Pay

2. Medical Insurance

3. Vacation or Sick Leave

4. Worker’s Compensation

5. Other employee benefits

6. CONTACT INFORMATION

A. The project representatives during the term of this agreement will be:

1. CalVet Home Representative/Contract Manager:

Information not Available

2. Contractor Representative:

TBD

B. Project representatives, addresses, and phone/fax numbers may be changed by issuing a 20-day prior written notification and shall not require a formal amendment to this Agreement. The notifying party shall provide complete contact information for the replacement Project Representative including, name, title, mailing address, phone/fax numbers, and email address. All other changes require a formal written amendment to this agreement.

Exhibit B - Budget Detail and Payment Provisions TBD

1. STANDARD BUDGET DETAIL AND PAYMENT PROVISIONS

A. Invoicing and Payment

1. For services satisfactorily rendered, and upon receipt and approval of the invoices, the State agrees to compensate the Contractor for services rendered in accordance with the rates in Exhibit B-1.

2. Invoices shall include the Agreement Number and shall be submitted in not more frequently than monthly in arrears to:

Original Invoice Approval Copy Department of Veterans Affairs CalVet Accounting Office 1227 “O” Street Room 402 Sacramento, CA 95814 APInvoices@calvet.ca.gov

California Department of Veterans Affairs Home Loan Division Attn: TBD Home Address Home City, State, and Zip code

B. Budget Contingency Clause

1. It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall be of no further form and effect. In this event, the State shall have no liability to pay any funds whatsoever to Contractor or to furnish any other considerations under this Agreement and Contractor shall not be obligated to perform any provisions of this Agreement.

2. If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the State shall have the option to either cancel this Agreement with no liability occurring to the State, or offer an Agreement amendment to Contractor to reflect the reduced amount.

C. Prompt Payment Clause

Payment will be made in accordance with, and within the time specified in, Government Code, Chapter 4.5, commencing with Section 927.

2. SPECIAL BUDGET DETAIL AND PAYMENT PROVISIONS

Submissions of Invoices/Claims

A. All invoices/claims must be completed thoroughly and legibly, with all applicable fields completed.

Invoices/claims that are submitted to the appropriate location but have been altered, or are inaccurate, or do not provide all necessary information will not be accepted and will be returned to the Contractor for correction.

B. Any changes to this provision relating to the invoice/claim submittal process, including but not limited to an address, form, or process change, shall be an administrative change managed through the appropriate designated CalVet office and shall not require a contract amendment.

C. Contractor shall submit monthly invoices to the CalVet Contract Manager for approval and processing.

Invoices/claims submitted shall include the following information in order to be considered complete and acceptable for processing, or the invoice/claim will be returned:

1) Contractor’s Company name exactly as it appears on the Payee Data Record (STD.204)

2) Contractor’s Company address, phone number and e-mail

3) Date of invoice/claim

4) Invoice/claim number

5) CalVet location where services were performed

Exhibit B - Budget Detail and Payment Provisions TBD

6) Contract/Agreement Number

7) Date(s) of Service

8) Total dollar amount being billed

9) First and Last name of Contractor or Provider performing services, if applicable

10) Contractor’s or Provider’s Classification, whichever is applicable

11) Contractor’s final invoice must be clearly marked as “Final Invoice”

12) When applicable, Contractors shall include the following information on the invoice/claim submitted for hourly reimbursement:

a) Hourly Rate

b) Time in and time out

c) Total hours worked

d) Any other information or documentation reasonably required to verify and substantiate the provision of services and the charges for such services.

3. CONTRACTOR OVERPAYMENTS

A. If the State determines that an overpayment has been made to the Contractor, the State will seek recovery immediately upon discovery of the overpayment by: (a) calling the Contractor’s accounting office to request a refund of the overpayment amount, or (b) offsetting subsequent Contractor payments by the amount of the overpayment if Contractor repayment or credit is not received within thirty (30) days from the date of notice.

B. If Contractor discovers it has received an overpayment, Contractor must notify the State and refund the overpayment immediately.

4. DVBE Withhold

A. For contracts with DVBE subcontractors pursuant to Mil. & Vet. Code Section 999.7, ten thousand dollars ($10,000) will be withheld from the final payment, or the full final payment if less than ten thousand dollars ($10,000), until the prime contractor complies with the certification requirements of subdivision (d) of Mil.

& Vet. Code Section 999.5. Prime contractor shall be given 30 days’ notice to cure the defect. If, after 30 calendar days from the date of notice, the prime contractor refuses to comply with the certification requirements, CalVet shall permanently deduct ten thousand dollars ($10,000) from the final payment, or the full payment if less than ten thousand dollars ($10,000).

B. CalVet shall maintain all records of the information provided by the prime contractor pursuant to Section

999.5 and shall establish appropriate review procedures for those records to ensure the accuracy and completeness of the award amounts and paid amounts reported. The records shall be maintained in a manner that facilitates access and review by external auditors. Records collected pursuant to this section shall be retained for a minimum of six years after collection. (Mil. & Vet. Code Section 999.55)

Exhibit B-1- Rate Sheet TBD

THIRD PARTY ADJUSTING SERVICES

The Contractor must be able to provide services to Department of Veterans Affairs- Headquarters. Subcontractors may be used to comply with this requirement.

The rate listed below is in effect for the term of the Agreement, including any extension of the term through a formal amendment.

Description of Service

Rate per Claim

A. New claims reported (All claims) (Flat fees)

B. Claims referred for Field Adjuster (All claims) (Flat fee).

C.

Multimedia review. (Alternative to Field Adjuster and/or supplemental to claims with no assigned Field Adjuster)

Description of Service Rate per Hour

E.

Claims with reserves over Large Loss or all DIC claims (Time and Expense / T&E)

Exhibit D – Special Terms and Conditions TBD

1. EXCISE TAX

The State of California is exempt from Federal Excise Taxes, and no payment will be made for any taxes levied on employees' wages. The State will pay for any applicable State of California or local sales or use taxes on the services rendered or equipment or parts supplied pursuant to this Contract. California may pay any applicable sales or use tax imposed by another state.

2. STATUTORY AND REGULATORY PROVISIONS

A. This Contract shall be governed and construed in accordance with all applicable statutory and regulatory provisions including, but not limited to:

1) Title XVIII of the Federal Social Security Act

2) Title XIX of the Federal Social Security Act

3) Chapters 7 and 8 (commencing with Section 14000), Part 3, Division 9, Welfare and Institutions Code

4) Division 3, Title 22, California Code of Regulations (CCR)

5) Health and Safety Code Section 1340 et seq.

6) All applicable Federal provisions which regulate the administration of health care programs and budget revisions, as contained in the Code of Federal Regulations (CFR), Title 42, and Title 45, Part 74, Title 42 United States Code, Sections 1395 et seq. and 1396 et seq.

7) Sub-chapter 13 (commencing with Section 6800), Chapter 4, Part 1, Title 17, CCR; and

8) All other applicable laws and regulations.

B. Any provision of this Contract in conflict with the applicable laws and regulations is hereby amended to conform to the provisions of those laws and regulations. Such amendment of the Contract shall be effective on the effective date of the statutes or regulations necessitating it, and shall be binding on the parties even though the amendment may not have been reduced to writing and formally agreed upon and executed by the parties. If, due to amendment in laws of regulations, Contractor is unable or unwilling to comply with the provisions of the amendment(s), State or Contractor may terminate this Contract in accordance with the Termination provision of this Contract.

3. EXAMINATION AND AUDIT

A. Contractor shall allow the State and its related entities, the Comptroller General of the United States, Department of Justice (DOJ), and the Bureau of Medi-Cal Fraud, or their duly authorized representatives, to inspect or otherwise evaluate the quality, appropriateness, and timeliness of services performed under this Contract, and to inspect, evaluate, and audit any and all books, records, and facilities maintained by the Contractor and Subcontractors pertaining to services under this Contract at any time during normal business hours.

B. Contractor shall be subject to the examination and audit of the State Auditor for a period of three (3) years after final payment under this Contract in accordance with Government Code, Section 85467.7. The examination and audit shall be confined to those matters directly connected with the performance of the contract, including, but not limited to, the costs of administering the Contract.

C. Books and records include, but are not limited to, all physical records originated or prepared pursuant to the performance under this Contract, including working papers, reports, financial records, and books of account, Medical Records, prescriptions files, Subcontracts, and any other documentation pertaining to medical and non-medical services for residents of the Home. Upon request, at any time during the term of this Contract, the Contractor shall furnish any record or copy.

4. RESOLUTION OF DISPUTES

A. The Contractor may dispute and appeal a decision or action by the State arising out of the Interpretation or administration of this Contract. A written dispute notice shall be submitted to the Contract Manager within thirty (30) calendar days from the date the Contractor receives notice of the decision or action in dispute.

The Contractor’s dispute notice shall state the following, based on the most accurate information available to the Contractor:

1) That it is a dispute pursuant to this Section.

2) The date, nature, and circumstances of the conduct, which is the subject of dispute.

3) The names, telephone numbers, function, and activity of each contractor, subcontractor, State official, or employee involved in or knowledgeable about the conduct.

4) The identification of any documents and the substance of any oral communications involved in the conduct. Copies of all identified documents shall be attached.

5) The reason why the Contractor is disputing the conduct.

6) The cost impact to the Contractor directly attributable to the alleged conduct, if any.

7) The Contractor’s desired remedy.

B. The State and the Contractor agree to try to resolve all contractual issues by negotiation and mutual agreement at the Contract Manager level. The parties recognize that the implementation of this policy depends on open-mindedness, and the need for both sides to present adequate supporting information on matters in question. The Contract Manager, in a written decision stating the factual basis for the decision, will decide any disputes concerning performance of this Contract. Before issuance of the Contract Manager’s decision, informal discussions between the parties by the individuals who have not participated substantially in the matter in dispute will be considered by the parties in efforts to reach mutual agreement.

C. The Contract Manager will render a decision or request additional substantiating documentation from the

Contractor within thirty (30) days of receipt of the Contractor’s appeal. A copy of the decision will be provided to the Contractor. The decision shall be final and conclusive unless, within thirty (30) days from the date of the decision, the Contractor files a written appeal addressed to the Undersecretary, California Department of Veterans Affairs.

D. The Undersecretary’s decision shall be final and conclusive unless the decision is arbitrary, capricious, grossly erroneous or if any determination of fact is unsupported by substantiating evidence. The Undersecretary’s decision will be in writing and may encompass facts, interpretations of the Contract, and determination or application of law. The Contractor may, prior to the Undersecretary’s decision, present oral or documentary evidence, and arguments in support of the Contractor’s appeal. The decision will either:

1) Find in favor of the Contractor, in which case the Undersecretary may:

a) Countermand the earlier conduct which caused the Contractor to file a dispute; or

b) Reaffirm the conduct and, if there is a cost impact sufficient to constitute a change in obligations pursuant to the payment provisions, direct the State to comply with that Section.

2) Deny the Contractor’s dispute and, where necessary, direct the manner of future performance; or

3) Request additional substantiating documentation in the event the information in the Contractor’s dispute or appeal is inadequate to permit a decision to be made under paragraphs (1) or (2) above, advise the Contractor as to what additional information is required, and establish how that information will be furnished. The Contractor shall have thirty (30) days to respond to the Undersecretary’s request for further information. Upon receipt of this additional requested information, the

Undersecretary will have thirty (30) days to respond with a decision. Failure to supply additional information required by the Undersecretary within the time period specified above shall constitute waiver by the Contractor of all claims.

E. Attorney’s fees and costs for any dispute or subsequent trial shall be borne by the respective parties.

Both parties waive trial by jury, and any trial in superior or municipal court shall be by a judge alone. Any litigation arising out of this Contract shall be conducted in a California Court pursuant to California law.

F. Contractor shall continue with the responsibilities under this Contract during any dispute.

5. AGENCY LIABILITY (Applies only to Federally Funded Contracts)

The Contractor warrants by execution of this Contract, that no person or selling agency has been employed or retained to solicit or secure this Contract upon Contract or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the State shall, in addition to other remedies provided by law, have the right to annul this Contract without liability, paying only for the value of the work actually performed, or otherwise recover the full amount of such commission, percentage, brokerage, or contingent fee.

6. POTENTIAL SUBCONTRACTORS

For all Agreements, with the exception of Interagency Agreements and other governmental entities/auxiliaries exempt from bidding, nothing contained in this Contract or otherwise shall create any contractual relation between the State and any subcontractors, and no subcontract shall relieve the Contractor of Contractor’s responsibilities and obligations hereunder. The Contractor agrees to be as fully responsible to the State for the acts and omissions of its subcontractors and of persons either directly or indirectly employed by any of them, as it is for the acts and omissions of persons directly employed by the Contractor.

The Contractor's obligation to pay its subcontractors is an independent obligation from the State’s obligation to make payments to the Contractor. As a result, the State shall have no obligation to pay or enforce the payment of any moneys to any subcontractor.

7. REPORTING SMALL BUSINESS (SB)/MICRO BUSINESS (MB) AND /OR DISABLED VETERANS

BUSINESS ENTERPRISE (DVBE) UTILIZATION

A. If SB/MB and/or DVBE Subcontractor participation is a requirement on this Agreement, the Contractor must report the actual amount paid to certified Subcontractors. The Contractor must comply with Government Code Section 14841 and Military and Veterans Code Section 999.5(d) by reporting the actual utilization of certified Subcontractor(s) during the performance of this Agreement. The Contractor shall prepare and submit the report to the Contract Manager within 60 days from receipt of final payment.

B. Withhold: Pursuant to Mil. & Vet. Code Section 999.7, ten thousand dollars ($10,000) will be withheld from the final payment, or the full final payment if less than ten thousand dollars ($10,000), until the prime contractor complies with the certification requirements of subdivision (d) of Mil. & Vet. Code Section

999.5. Prime contractor shall be given 30 days’ notice to cure the defect. If, after 30 calendar days from the date of notice, the prime contractor refuses to comply with the certification requirements, CalVet shall permanently deduct ten thousand dollars ($10,000) from the final payment, or the full payment if less than ten thousand dollars ($10,000).

8. SUBSTITUTION OF DVBEs

A. If applicable, DVBE subcontractors shall be used per the California Code of Regulations (CCR), Title 2 §

1896.70 unless a substitution is approved in writing by the Department of General Services (DGS),Office of Small Business & Disabled Veteran Business Enterprise (OSDS). A DVBE subcontractor shall be replaced by another DVBE to perform the work originally stated. The substitution shall maintain, at minimum, the level of participation goal stated in the bid.

1) The Contractor shall simultaneously notify the DVBE and the CalVet Contract Manager of the intended substitution. The written notice shall contain the reasons for the substitution and be sent by certified mail. The Contractor shall submit the following to the CalVet Contract Manager:

i. A copy of the written notice issued to the DVBE with proof of delivery. In the absence of proof of delivery, provide the certified mail receipts.

ii. A copy of the DVBE’s consent or opposition to the substitution. In the absence of the consent or opposition, provide the returned and unopened certified mail.

iii. The name and supplier number of the business being substituted and the name and supplier number of the proposed replacement. If a DVBE cannot be identified as a replacement, the Contractor shall document the absence of DVBEs. This documentation shall include but is not limited to:

1. Contact CalVet’ SB/DVBE Coordinator regarding the absence of DVBEs to perform the specific work.

2. Search results from the DGS…