Public Property and Works

State Purchases

SECTION 37-2-33

§ 37-2-33 Multi-year contracts.

(a) Unless otherwise provided in the statute making appropriations therefor, multi-year contracts for supplies and services may be entered into for periods extending beyond the end of the fiscal year in which the contract was made, if funds for the first fiscal year of the contemplated contract are available at the time of contracting and the contract states that payment and performance obligations for succeeding fiscal years shall be subject to the availability of funds therefor.

(b) Prior to the utilization of a contract as described in subsection (a) of this section, it shall be determined, in writing, by the chief purchasing officer:

(1) That estimated requirements cover the period of the contract, are reasonably firm, and continuing; and

(2) That the contract will serve the best interests of the state by encouraging effective competition or otherwise promoting economics in state procurement.

(c) When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent year of a contract as described in subsection (a) of this section, the contract for the subsequent year may be cancelled and the contractor shall be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the supplies or services delivered under the contract. The cost of cancellation may be paid from:

(1) Appropriations currently available for performance of the contract;

(2) Appropriations currently available for procurement of similar supplies or services and not otherwise obligated; or

(3) Appropriations made specifically for the payment of cancellation costs.

History of Section.
(P.L. 1989, ch. 526, § 2; P.L. 1999, ch. 367, § 1.)