HARRY HUGHES, Governor

2683

3-704.

EXCEPT FOR A FIRM FIXED-PRICE CONTRACT, NO CONTRACT
TYPE MAY BE USED UNLESS THE PROCUREMENT OFFICER DETERMINES
THAT THE CONTRACTOR'S ACCOUNTING SYSTEM WILL PERMIT TIMELY
DEVELOPMENT OF ALL NECESSARY COST DATA IN THE FORM REQUIRED
BY THE SPECIFIC TYPE OF CONTRACT CONTEMPLATED AND THAT THE
CONTRACTOR'S ACCOUNTING SYSTEM IS ADEQUATE TO ALLOCATE COSTS
IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

3-705.

(A)  THE DEPARTMENT MAY ENTER INTO MULTIYEAR CONTRACTS
AND SHALL, BY REGULATION, PROVIDE FOR THE REVIEW AND
APPROVAL OF CONTRACTS FOR SUPPLIES OR SERVICES WHICH EXTEND
BEYOND THE CURRENT FISCAL YEAR. AT EACH LEVEL OF THE REVIEW
AND APPROVAL PROCEDURE OF MULTIYEAR CONTRACTS, IT SHALL BE
DETERMINED:

(1)  THAT ESTIMATED REQUIREMENTS COVER THE PERIOD
OF THE CONTRACT AND 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 ECONOMIES IN STATE PROCUREMENT.

(B)  PAYMENT AND PERFORMANCE OF CONTRACTUAL OBLIGATIONS
ENTERED PURSUANT TO SUBSECTION (A) OF THIS SECTION FOR A
FISCAL YEAR OTHER THAN THE FISCAL YEAR IN WHICH THE CONTRACT
WAS APPROVED ARE SUBJECT TO THE APPROPRIATION OF FUNDS FOR
THE PAYMENT AND PERFORMANCE OF THESE OBLIGATIONS.

(C)  IF FUNDS ARE NOT APPROPRIATED FOR THE CONTINUED
PERFORMANCE OF A CONTRACT APPROVED UNDER SUBSECTION (A) OF
THIS SECTION, THE CONTRACT FOR THAT YEAR IS TERMINATED
EITHER AUTOMATICALLY OR IN ACCORDANCE WITH THE TERMINATION
CLAUSE OF THE CONTRACT, IF ANY. UNLESS OTHERWISE PROVIDED
FOR IN THE CONTRACT, THE EFFECT OF TERMINATION IS TO
DISCHARGE BOTH PARTIES FROM FUTURE PERFORMANCE OF THE
CONTRACT, BUT NOT FROM THEIR EXISTING OBLIGATIONS. 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 ANY
APPROPRIATIONS AVAILABLE FOR SUCH PURPOSES.

(D)  ALL CONTRACTS ENTERED INTO UNDER THIS ARTICLE
SHALL CONTAIN A NOTICE THAT THEY ARE SUBJECT TO TERMINATION,
EITHER AUTOMATICALLY OR IN ACCORDANCE WITH A TERMINATION
CLAUSE, IF ANY, UPON THE FAILURE OF THE GENERAL ASSEMBLY TO
APPROPRIATE FUNDS FOR THE FUTURE PERFORMANCE OF THE
CONTRACT.

SUBTITLE 8. INSPECTION OF PLANT AND AUDIT OF RECORDS

3-801.