Section 1500.2060  Duration of Contracts − General

a)         General

1)         A multi-term contract for a term of up to 10 years is authorized when determined by the Procurement Officer to be in the best interest of the State.

2)         The length of the payment term of bonds issued by or on behalf of a State agency shall be limited as provided in the statute authorizing the issuance of the bonds.

3)         A software license may have a term longer than 10 years, including for a perpetual term, provided the payment term is limited to no more than 10 years.

b)         The contractual obligation of both parties in each fiscal period succeeding the first is subject to appropriation and availability of funds.  The contract shall provide that, in the event that funds are not available for any succeeding fiscal period, the remainder of such contract shall be canceled without penalty to, or further payment being required by, the State.  This provision applies to only those contracts that are funded in whole or in part by funds appropriated by the Illinois General Assembly or other governmental entity.

c)         Conditions for Use of Multi-Term Contracts

A multi-term contract may be used when:

1)         special production of definite quantities or the furnishing of long-term services is required to meet State needs; or

2)         a multi-term contract will serve the best interests of the State by encouraging effective competition or otherwise promoting economies in State procurement.

d)         Multi-Term Contract Procedure

The solicitation shall state:

1)         the proposed term;

2)         the amount of supplies or services required for the proposed contract period;

3)         the type of pricing requested (e.g., firm for term);

4)         how award will be determined.

e)         Renewals

1)         When the original procurement specifically called for an initial term plus renewals, the renewals may be exercised without further procurement activity, provided the initial term and the exercised renewals may not exceed 10 years, the terms and conditions do not change except as provided in the contract (such as price escalations tied to an index) and the option is reserved solely to the State or is by mutual agreement.  A renewal option that requires modification to a material term or condition of the contract shall be treated as a new contract and shall be subject to competitive procurement procedures established by the Code and this Part.

2)         When the original procurement was silent as to renewals, the renewal must be procured using one of the methods of source selection authorized by the Code and this Part.  This renewal shall start a new term not to exceed 10 years.

3)         When a renewal will result in the total term, counting the initial term and any previous renewals, to exceed 10 years, the renewal must be procured using one of the methods of source selection authorized by the Code and this Part.  This renewal will start a new term that shall not exceed 10 years.