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Editorial: Contracts not perpetual, even when with the state

In simple terms, parties enter contracts that are mutually beneficial. Most contracts have a defined term that make them subject to renewal – or not. One party or the other typically is free to explore a better opportunity with another party when a contract ends.

Just because the state is one of the parties shouldn’t change that equation and convert the contract to document in perpetuity. Because, without a termination date that actually means something, both parties would be stuck with the status quo – even if it is unsatisfactory.

So it’s interesting that New Mexico AIDS Services – having lost a portion of its $1.86 million contract with the state Health Department to provide a host of services for HIV-positive clients in Albuquerque, Farmington and Gallup – is asking a district court judge to order the restoration of $710,000 of that funding.

Health Department officials say the 30-year-old nonprofit has “demonstrated its lack of expertise and capability” in case management and awarded contracts instead to University of New Mexico Truman Health Services, Southwest CARE Center and First Nations Community Healthsource.

In petitioning the court, the attorney for New Mexico AIDS Services, Molly Schmidt-Nowara, says state officials never warned the nonprofit “in writing” that it risked losing its contract if it didn’t make changes to its case management practices. But unless it is required to do so by the contract, such notice shouldn’t be expected.

Schmidt-Nowara’s claim that NMAS clients will “suffer immeasurable harm” if the funding is not restored makes a crystal-ball prediction that the new contractors won’t be capable of fulfilling the terms of the contract.

But all are reputable, long-time New Mexico health care providers. What the voting public should want to know is whether Health Department officials received sufficient assurances from the new contractors that they would be able to meet, at a minimum, or improve upon, the services called for.

Businesses that contract with the state might like to think longevity is their ace in the hole that guarantees contract renewal but, absent some other factor, the court should make it clear that’s a really bad bet.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.

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