Ala. Admin. Code r. 355-4-3-.14

Current through Register Vol. 43, No. 1, October 31, 2024

Section 355-4-3-.14 - Multi-Year Contracts

(1) Duration. Multi-year contracts may not exceed five years in duration, including any extensions or renewals, unless determined otherwise in writing by the Chief Procurement Officer.

(2) Multi-Year Contract Procedure.

(a) Solicitation. The solicitation shall state:

1. the amount of supplies or services required for the proposed contract period;

2. that a unit price shall be given for each supply or service, and that such unit prices shall be the same throughout the contract (except to the extent price adjustments may be provided in the solicitation and resulting contract);

3. that the multi-year contract will be cancelled only if funds are not appropriated or otherwise made available to support continuation of performance in any fiscal period succeeding the first; however, this does not affect either the State's rights or the contractor's rights under any termination clause in the contract;

4. whether bidders or offerors may submit prices for:

(i) the first fiscal period only;

(ii) the entire time of performance only; or

(iii) both the first fiscal period and the entire time of performance;

5. that a multi-year contract may be awarded and how award will be determined including, if prices for the first fiscal period and entire time of performance are submitted, how such prices will be compared

(b) Award. Award shall be made as stated in the solicitation and permitted under the source selection method utilized. Care should be taken when evaluating multi-year prices against prices for the first fiscal period that award on the basis of prices for the first period does not permit the successful bidder or offeror to "buy in", that is, give such bidder or offeror an undue competitive advantage in subsequent procurements.

(c) Cancellation.

1. "Cancellation," as used in multi-year contracting, means the cancellation of the total requirements for the remaining portion of the contract because funds were not appropriated or otherwise make available. The contract for the first fiscal period shall not be cancelled, except in the event of proration declared by the Governor. Cancellation results when the Procurement Officer notifies the contractor of nonavailability of funds for contract performance for any fiscal period subsequent to the first.

2. These provisions on cancellation of multi- year contracts do not limit the rights of the State or the contractor under any termination clause of the contract if the contract is terminated pursuant to that clause rather than cancelled as provided in this Subsection.

(3) Multiple Award.

(a) General. A multiple award is an award of an indefinite quantity contract for one or more similar supplies or services to more than one bidder or offeror when the State is obligated to order all of its actual requirements for the specified supplies or services from those contractors. The obligation to order the State's actual requirements is limited by the provisions of Uniform Commercial Code Section 2-306(1).

(b) Limitations on Use. A multiple award may be made when award to two or more bidders or offerors for similar products is necessary for adequate delivery, service, or product compatibility. Any multiple awards shall be made in accordance with the provisions of Rule 355-4-3-.02 (Competitive Sealed Bidding), Rule 355-4-3-.03 (Competitive Sealed Proposals), Rule 355-4-3-.04 (Qualification-Based Selection), Rule 355-4-3-.05 (Small Purchases), and Rule 355-4-3-.07 (Emergency Procurement), as applicable. Multiple awards shall not be made when a single award will meet the State's needs without sacrifice of economy or service.

(c) Contract and Solicitation Provisions. All eligible users of the contract shall be named in the solicitation, and it shall be mandatory that the actual requirements of such users that can be met under the contract be obtained in accordance with the contract, provided, that:

1. the State shall reserve the right to take bids separately if a particular quantity requirement arises which exceeds its norm or an amount specified in the contract;

2. the State shall reserve the right to take bids separately if the Chief Procurement Officer or the head of a Purchasing Agency approves a finding that the supply or service available under the contract will not meet a nonrecurring special need of the State; and

3. the contract shall allow the State to procure supplies produced, or services performed, incidental to the State's own programs, such as industries of correctional institutions, when such supplies or services satisfy the need.

(d) Intent to Use. If a multiple award is anticipated prior to issuing a solicitation, the State shall reserve the right to make such an award and the criteria for award shall be stated in the solicitation.

Ala. Admin. Code r. 355-4-3-.14

Adopted by Alabama Administrative Monthly Volume XLI, Issue No. 06, March 31, 2023, eff. 5/15/2023.

Rule renumbered from Rule 355-4-3-.13

Author: Department of Finance, Legal Division

Statutory Authority:Code of Ala. 1975, § 41-4-144.