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006.27.3-R2:19-11-265. Material Changes to Contracts for Services

AR ADC 006.27.3-R2:19-11-265Arkansas Administrative Code

West's Arkansas Administrative Code
Title 006. Department of Finance and Administration
Division 27. Office of State Procurement (Refs & Annos)
Rule 3. Procurement Rules
Ark. Admin. Code 006.27.3-R2:19-11-265
006.27.3-R2:19-11-265. Material Changes to Contracts for Services
(a) A contract that has previously been presented for review does not need to be presented for legislative review again upon its renewal or extension unless it introduces a “material change.” There are two classes of material changes that trigger a duty to resubmit a contract for review at either renewal of a contract or extension of a contract term:
(1) an amendment that is a material change in contractual terms, including, without limitation:
(A) An increase in the contract amount;
(B) An increase in the total projected contract amount;
(C) A change in any of the essential terms of the contract;
(D) A change in any performance-based standards stated in the contract; and
(2) a material deviation by a contractor from the performance promised during the period preceding renewal or extension, such as a:
(A) default requiring the imposition of financial consequences as the result of the contractor's failure to satisfy performance-based standards under Ark. Code Ann. § 19--11--267 during the year preceding the renewal or extension of the contract; or
(B) vendor performance resulting in a vendor performance report during the year preceding the renewal or extension of the contract.
Both of these are “material changes” that trigger the duty to re-submit a contract for review prior to a renewal or an extension.
For purposes of Ark. Code Ann. § 19-11-265, renewal refers to re-establishing an existing contract for another term, whereas extension is extending the term of an existing contract that would otherwise expire. Although technically distinguishable, they are functionally similar.
(b) Definitions.
1. “Essential terms of a contract,” also called fundamental terms, are provisions that must be included for an enforceable contract to exist between the parties under any applicable statute of frauds.
2. “Initial contract amount” refers to the amount agreed to for the initial term of a contract.
3. “Total projected contract amount” refers to the total amount that the state is projected to expend under the contract over the entire life of the contract, which can be no more than seven (7) years under Ark. Code Ann. § 19-11-238.

Credits

Adopted Jan. 1, 1999.
Current with amendments received through January 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.27.3-R2:19-11-265, AR ADC 006.27.3-R2:19-11-265
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