December 23, 2008

INDIANA BULLETIN NO. IN300-9-2

SUBJECT:  LTP — 2009 Farm Bill Program Contract Cancellation/Termination Process

Purpose:  To issue the Indiana policy for canceling or terminating contracts in the farm bill programs EQIP, WHIP, and CSP.

Effective Date:  January 2, 2009

Expiration Date:  September 30, 2009

Background:

The responsibility for making contract cancellations and terminations lies with NRCS for the farm bill programs administered by the Agency.  Specifically, these programs are the Environmental Quality Incentives Program (EQIP), the Wildlife Habitat Incentives Program (WHIP), and the Conservation Security Program (CSP).  Within Indiana the past decision was that all contract cancellations and terminations would be processed by the Assistant State Conservationist for Programs (ASTC-P) who would then submit to State Conservationist for approval. 

Contract Cancellation versus Contract Termination

Part 512.57(A) of the Conservation Programs Manual defines cancellations and terminations.  In short, cancellations are requested by the contract participant whereas terminations are an action initiated by NRCS due to a breach of the contract requirements by the participant.  Cancellation requests must be in a written format from the participant and they require that NRCS concur with the request.  Terminations do not require the concurrence of the participant.  Both cancellations and terminations allow for NRCS to collect cost recovery and/or liquidated damages in accordance with the year of the contract and specific programmatic policies (e.g., 1997-2008 WHIP contracts do not have provisions to assess liquidated damages but 2009 WHIPs will).

As allowed in the Conservation Program Contracting manual, the Indiana State Conservationist will waive cost recovery and liquidated damage assessments that total $1,000 or less as being in the public interest (512.58(E)(1)(i) Amend. 40 – November 2007).

DIST:  0
Procedure for Cancelling a Contract

In Indiana the cancellation procedure is as follows:

1)      District Conservationist will –

o       Receive the written cancellation request from the participant.  Participant must complete Attachment C, Conservation Program Contract (CPC) Participant Request for Cancellation form to ensure all information is provided;

o       Initiate the cancellation process by compiling all required information;

o       Complete the Indiana Farm Bill Program Cancellation/Termination Request Form (Attachment A to this bulletin);

o       Send the following materials no later than 30 days of receipt of the request to the AC:

§         Attachment C of this bulletin; and

§         The completed Indiana Farm Bill Program Cancellation/Termination Request Form (reference Attachment A to this bulletin) and all required materials specified in the form.

2)      AC will –

o       Review the FO cancellation/termination packet to ensure that it is complete and take action no later than 30 days of receiving it.

o       Cancellation based on hardship.  If the cancellation request is a result of a “documented” case of family death, family illness, bankruptcy, or divorce, the AC has the delegated authority to write the cancellation letter (writing the letter may be delegated to the DC, but the AC must review it and make any necessary edits before sending it) and send to the participant.  In these situations there will be no liquidated damages or cost recovery sought.  The AC will send the following information to the ASTC-P:

§         A copy of the cancellation letter through listing as a carbon copy recipient.

§         Copies of all documents used to document hardship.

o       The ASTC-P will cancel the contract in ProTracts no later than 30 days of notification.

o       Cancellation based on something other than one of the hardships listed above.  If the cancellation request is because of an undocumented case of hardship or any other reason, the following process will be used.  The AC will make a recommendation on the Indiana Farm Bill Program Cancellation/Termination Form (Attachment A of this bulletin) and write the draft cancellation letter (writing the letter may be delegated to the DC, but the AC must review it and make any necessary edits before submitting to the ASTC-P).  The following materials will be forwarded to the ASTC-P:

§         Completed Indiana Farm Bill Program Cancellation/Termination Form;

§         An electronic copy of the cancellation letter; and

§         Send a hard copy of the documentation used and an explanation for the basis of making the recommendation.

3)      The ASTC-P will -

o        Review the cancellation recommendations with the State Conservationist (STC) for final decision and signature;

o       Mail letters;

o       Cancel the contract in ProTracts; and

o       Follow up on obtaining cost recovery if needed.

Procedure for Terminating a Contract

In Indiana the termination procedure is as follows:

1) District Conservationist will –

o       Complete the Indiana Farm Bill Program Cancellation/Termination Request Form (Attachment A to this bulletin); and

o       Send the following materials within 30 days of making the termination decision to the AC:

§         The completed Indiana Farm Bill Program Cancellation/Termination Request Form and all required materials specified in the form.

§         The “Indiana Corrective Action Plan” signed by the DC and the participant.   (Attachment D)

2) AC will –

o       Review the FO termination packet to ensure that it is complete.

o       The AC will make a recommendation on the Indiana Farm Bill Program Cancellation/Termination Form and prepare the draft termination letter (writing the letter may be delegated to the DC, but the AC must review it and make any necessary edits before submitting to the ASTC-P).  The following materials will be forwarded to the ASTC-P within 30 days of receipt of the packet:

§         Completed Indiana Farm Bill Program Cancellation/Termination Form and all required materials specified in the form.

§         The signed “Indiana Corrective Action Plan”

§         An electronic copy of the termination letter.

3) The ASTC-P will –

o        Review the termination recommendations with the STC for final decision and signature;

o       Mail letters;

o       Terminate the contract in ProTracts ; and

o       Follow up on obtaining cost recovery if needed.

For additional information, please contact your APS.  APSs may contact Jim Dunaway, EQIP Program Specialist, at 317-290-3200 #334; MaryJo Woodruff, WHIP/CSP Program Specialist, at 317-290-3200 #311 or Teresah Caire, Assistant State Conservationist for Programs, at 317-290-3200 # 320.

/s/

JANE E. HARDISTY

State Conservationist

Attachments A, B, C, and D

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