(a) When a governing authority initially contracts, or renews a contract, with a separate organization to manage or operate some or all of the office certified services, including the management of clinical services or the employment of managerial or clinical staff, the following requirements shall be met:

1. (1) The governing authority shall show that a proposed management contractor is a New York State corporation incorporated under the Business Corporation Law or the Not-for-Profit Corporation Law as applicable, and approved as a provider of substance use disorder services by the office.

2. (2) The governing authority shall show:

   1. (i) the necessity for the contract;
   2. (ii) the absence of feasible alternatives to the contract; and
   3. (iii) that the proposed contractor has successfully performed similar services in the past.

3. (3) Each proposed contract shall be submitted to the office and shall not be effective until the office has approved it in writing. Each contract shall:

   1. (i) be dated and signed by the authorized representatives of the governing authority and the contractor;
   2. (ii) specify each party’s responsibilities, objectives, functions, financial arrangements and charges;
   3. (iii) require compliance with all provisions of law governing such contacts, including this Title and the provisions of part 2 of title 42 of the Code of Federal Regulations;
   4. (iv) specify the powers delegated to the contractor by the governing authority consistent with budgetary limitations set by the governing authority;
   5. (v) specify that powers not specifically provided to the contractor remain with the governing authority;
   6. (vi) specify the term of the contract, the provisions governing renewal, and the provisions governing termination prior to expiration;
   7. (vii) require the contractor to provide all information required by the office and to cooperate with the office in carrying out inspections and investigations;
   8. (viii) include the following language: "Notwithstanding any other provision in this contract, the governing authority remains responsible for ensuring that any service provided pursuant to this contract complies with all pertinent provisions of Federal, State and local statutes, rules and regulations";
   9. (ix) retain in the governing authority the authority to remove any person working in the facility or unit regardless of employer or regardless of change in employment status;
   10. (x) state the terms by which the contractor may hire and discharge persons working in the facility or unit; such terms to include, but not be limited to compliance with the provisions of Part 805 of this Title; and
   11. (xi) require the principal administrators of the management contractor, and any employees of such contractor who will have the potential for, or may be permitted, regular and substantial unsupervised or unrestricted physical contact with the clients in the program, to complete a criminal history information review pursuant to Part 805 of this Title.