Section 423.506 - Effective date and term of contract(a)Effective date. The contract is effective on the date specified in the contract between the Part D plan sponsor and CMS.(b)Term of contract. Each contract is for a period of 12 months.(c)Qualification to renew a contract. In accordance with 423.507, an entity is determined qualified to renew its contract annually only if the Part D plan sponsor has not provided CMS with a notice of intention not to renew and CMS has not provided the Part D organization with a notice of intention not to renew.(d)Renewal of contract contingent on reaching agreement on the bid. Although a Part D plan sponsor may be determined qualified to renew its contract under this section, if the sponsor and CMS cannot reach agreement on the bid under subpart F, no renewal takes place, and the failure to reach agreement is not subject to the appeals provisions in subpart N of this part.(e) The provisions of this section do not apply to fallback entities.70 FR 4525, Jan. 28, 2005, as amended at 72 FR 68732, Dec. 5, 2007