N.M. Admin. Code § 1.12.21.14

Current through Register Vol. 35, No. 24, December 23, 2024

Section 1.12.21.14 - DEFAULT, CURE AND AWARD TERMINATION

A sponsoring body may unilaterally terminate an award only as authorized by, and subject to the requirements of, these rules.

A.Uncured material default. A sponsoring body may terminate an award based on a grantee's uncured failure to comply with or satisfy a material term of an award, including, but not limited to, failure to meet a financial, reporting, budget, performance, service level, pricing or deadline requirement.

B.Notice of default. Before terminating an award, a program administrator shall provide a grantee notice of the default and an opportunity to cure.

(1) Unless exigent circumstances justify a shorter period, a grantee shall be allowed at least 30 days to cure the noticed default.

(2) If a default presents a risk to health, life, or financial welfare of any person or to the state unless cured in fewer than 30 days, and the circumstances creating that exigency were not within the control of the program administrator or sponsoring body, the period allowed to cure a default may be less than 30 days as necessary to mitigate or eliminate the risk.

C.Additional provisions. As required by a funding source, or as necessary to meet funding deadlines or program objectives, an award may include additional termination provisions not in conflict with these rules. These rules do not apply to, or preclude mutual termination of an award.

D.Validity. A termination shall not be effective unless approved by the sponsoring body in an order or resolution, as applicable, supported by findings and conclusions.

E.Effect. Upon termination of an award, ownership and title to all tangible and intangible property purchased or created by the grantee with award funds shall be transferred as directed by the sponsoring body in the termination order or resolution. The grantee shall return all unexpended award funds to the program administrator and all unexpended and unpaid award funds shall revert to the award funding source.

F.Survival. These termination provisions shall survive award close out and apply for so long as the grantee is obligated to comply with any material provision of an award, including for the duration of any warranty, service or price level agreement. A grantee's failure to cure a material default after award closure shall have the same effect as an uncured default prior to award closure.

G.Termination alternatives. These rules do not preclude a sponsoring body from imposing a sanction other than termination, from mandating corrective action, from excusing a default or from modifying an award when termination is not in the best interests of the program.

(1) A sponsoring body shall only excuse a default or modify an award for good cause.

(2) Good cause exists when circumstances beyond the contemplation and control of the grantee and sponsoring body impede or prevent grantee from curing a material default, and the proposed forbearance or modification is consistent with program qualifications, deadlines and objectives, legal mandates and funding commitments.

N.M. Admin. Code § 1.12.21.14

Adopted by New Mexico Register, Volume XXXIV, Issue 07, April 11, 2023, eff. 4/11/2023