DATE: July 3, 2000

FROM: Barry McVay, CPCM

SUBJECT: Electronic Signatures in Global and National Commerce Act "Signed" Into Law

ACTION: Enactment of Law

SYNOPSIS: On June 30, 2000, President Clinton swiped a smart card through a terminal and signed into law the Electronic Signatures in Global and National Commerce Act (Public Law 106-229). This law makes electronic signatures as valid as "normal" signatures for most documents, including contracts. This law could have a profound effect on how the federal government conducts business.

EFFECTIVE DATE: The law goes into effect October 1, 2000, except that the records retention requirements go into effect March 1, 2001.

SUPPLEMENTAL INFORMATION: The primary purposes of this act are to: (1) encourage electronic commerce by making "a signature, contract, or other record relating to such transaction" that is in an electronic form as binding as a paper signature; and (2) override state laws on electronic signatures, thus bringing uniformity to the legal standards. However, the law does not "require any person to agree to use or accept electronic records or electronic signatures."

There are a few exceptions:

A person must affirmatively consent to the use of electronic signatures, notices, and records retention. The person must be provided, prior to consenting, a clear and conspicuous statement informing him or her --

Once the person consents electronically, or confirms his or her consent electronically "in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent", the person must be notified "if a change in the hardware or software requirements needed to access or retain electronic records creates a material risk that the consumer will not be able to access or retain a subsequent electronic record that was the subject of the consent..." and the person must be given advised of the right "to withdraw consent without the imposition of any fees for such withdrawal and without the imposition of any condition or consequence that was not disclosed..."

EDITOR'S NOTE: If you thought federal contracting was rapidly changing before, wait until you see what happens when this law goes into effect! Everything will be speeded up, which means contracts will be executed quicker, and mistakes will occur faster! And, even though electronic signatures and documents are not supposed to take the place of paper versions unless all parties concur, don't count on it in federal contracts! Those who are not wired into the federal acquisition system will find that they are increasingly falling behind and losing contract opportunities, either because it takes too long for the paper version to arrive through the mail or the government is not bothering to produce paper versions at all!

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

Copyright 2000 by Panoptic Enterprises. All Rights Reserved.

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