2011 Louisiana Laws
Revised Statutes
TITLE 39 — Public finance
RS 39:198 — Types of contracts permitted


LA Rev Stat § 39:198 What's This?

§198. Types of contracts permitted

The types of contracts permitted in the procurement of data processing equipment, related services, and software are defined herein, and the provisions of this Part supersede, with respect to such procurements, any existing conflicting statutory provisions.

A. Direct order contracts. The division of administration, through the state central purchasing agency, shall, on behalf of all state agencies, enter into a direct order contract with a vendor of data processing equipment for the purchase, rental, or both, of such equipment in accordance with the following provisions:

(1) Specifications for direct order contracts. Specifications for direct order contracts shall be developed in advance and shall conform to the following requirements:

(a) Specifications for direct order contracts shall cover a specific class of equipment and may include all features associated with that class.

(b) Specifications in the invitation for bids for direct order contracts shall be developed by the office of data processing.

(c) Specifications shall be based on the projected needs of user agencies.

(d) Specifications for direct order contracts for the purchase and/or rental of data processing equipment may include specifications for the maintenance of the equipment desired.

(2) Procurement of direct order contracts. The initial procurement of a direct order contract, and procurement of equipment by using agencies under a direct order contract, shall be as defined herein:

(a) Direct order contracts shall be awarded by competitive sealed bidding.

(b) A using agency may procure required data processing equipment available under a direct order contract through release of a purchase order for the required equipment to the vendor holding a direct order contract. However, such procurement by purchase order shall be accomplished in accordance with the procedures and regulations prescribed by the state central purchasing agency in the Division of Administration and shall be subject to all other statutory requirements.

(3) The final authority for entering into direct order contracts shall rest with the Division of Administration, and such contracts shall be executed by the purchasing office, in accordance with procedures and regulations defined by the Division of Administration.

(4) Terms and conditions of direct order contracts. Direct order contracts shall include the following terms and conditions:

(a) Direct order contracts for data processing equipment are subject to the following requirements:

(i) Direct order contracts shall be valid for not more than three fiscal years.

(ii) The prices stated in such contract shall be firm for the period of the contract; except that, all such contracts shall include a clause granting to the state the benefit of any general price reductions effected by the vendor during the term of the contract.

(iii) Individual items of computer hardware which may be included under a direct order contract may not have a purchase price greater than seventy-five thousand dollars or a monthly rental price greater than two thousand dollars. Such price shall not include costs of maintenance, taxes, or transportation.

(iv) Direct order contracts shall include the annual appropriation dependency clause set forth in Subparagraph B(1)(d) of this Section.

(v) Direct order contracts may be extended into one additional fiscal year only under the following conditions: (aa) Such extension of a direct order contract shall be subject to the approval of the office of data processing. (bb) The vendor may increase rental prices for the term of the additional fiscal year by an amount equal to the lesser of any increase permitted by that vendor's contract with the General Services Administration of the United States Government for such equipment, or any increase in that vendor's published list prices for such equipment, during that fiscal year; provided that, such increase may not exceed ten percent, and the increase must have been authorized by the initial direct order contract.

(vi) Items covered by a direct order contract may also be acquired through additional competitive sealed bidding.

B. Multiyear contracts other than direct order contracts and contracts for fiscal intermediary services in processing claims of health care providers. State agencies may enter into contracts for the lease or purchase of data processing equipment or software when the term of such lease or purchase is greater than twelve months or involves more than one fiscal year in accordance with the following provisions:

(1) General terms and conditions for multiyear contracts shall be as follows:

(a) All contracts of this type shall be entered into through competitive sealed bidding.

(b) The justification of such contracts must be presented to the state central purchasing agency prior to issuance of an invitation for bids. Such justification shall identify and consider all cost factors relevant to that contract.

(c) The term of such contract shall not exceed sixty months.

(d) All such contracts must contain the following annual appropriation dependency clause:

"The continuation of this contract is contingent upon the continuation of an appropriation of funds by the legislature to fulfill the requirements of the contract. If the legislature fails to appropriate sufficient monies to provide for the continuation of a contract or if such appropriation is reduced by the veto of the governor or by any means provided in the Appropriation Act or Title 39 of the Louisiana Revised Statutes of 1950 to prevent the total appropriations for the year from exceeding revenues for that year or for any other lawful purpose and the effect of such reduction is to provide insufficient monies for the continuation of the contract, the contract shall terminate on the date of the beginning of the first fiscal year for which funds are not appropriated."

(e) The state central purchasing agency in the Division of Administration shall maintain a list of all multi-year contracts. This list must show at a minimum the name of the vendor, the annual cost of each contract, and the term of the contract.

(f) All such contracts for lease must contain a clause granting to the state the benefit of any general price reduction effected by the vendor during the term of the contract.

(g) With respect to all such contracts for purchase, there shall be no provisions for a penalty to the state for the early payment of the contract.

(2) Provisions relating to multi-year contracts for software:

(a) Contracts for software which extend for periods greater than twelve months or which cover all or a portion of more than one fiscal year, but which require only a single payment by the state to the vendor, may be entered into by any state agency, without regard to the specific requirements of Paragraph (1) of this Subsection.

(3) Provisions relating to multi-year contracts for the installment payment of financing for certain equipment, including but not limited to data processing, word processing, micro computers, software, and related services are as follows:

(a) Installment-payment contracts will be entered into with vendors of the defined equipment by the Division of Administration through the state central purchasing agency on behalf of all state agencies in accordance with rules and regulations adopted by the director of central purchasing.

(b) Installment-payment contracts may serve as amendments to and be incorporated into the vendor purchase contracts.

(c) The installment-payment contract may serve as a financing agreement and may contain only those provisions pertinent to the payment obligation, including but not limited to payment schedule and rate, provisions of default, assignment of payment stream, early payment, passage of title, and insurance coverage.

(d) Each contract shall contain an annual dependency clause, as defined in R.S. 39:198(B)(1)(d).

(e) Installment-payment contracts utilized in procuring micro computer equipment, word processing, software, and maintenance through brand name contracts shall contain a fixed interest for the term, which will generally be defined as one fiscal year, of the brand name contract. The interest rate is to be bid by the vendor, accepted by central purchasing, and approved by the State Bond Commission.

(f) Interest rates for individual procurements of equipment either through the competitive sealed bid process or under the terms of the applicable brand name contract shall be fixed for the term of the multi-year contract specific to that individual procurement.

(g) The term of an installment-payment contract utilized for the equipment defined herein shall not exceed sixty months.

C. Rental Contracts. Upon the advance written approval of the state central purchasing agency, state agencies may enter into contracts for the rental of data processing equipment and related services on a month to month basis for a period not to extend beyond the end of the fiscal year in which the contract is made. All such contracts shall be entered into only as a result of competitive sealed bidding procedures.

(1) Equipment currently installed, or installed at the beginning of a fiscal year under a valid rental contract, may be retained at the end of the fiscal year by renewing or extending the existing rental contract for one additional term, not to exceed twelve months, without competitive sealed bidding procedures, subject to the following provisions:

(a) All prices under a fiscal year rental contract shall be no greater than the supplier's established catalogue price and shall be firm for the fiscal year in which the contract is made, with the exception that the state shall be entitled to any general price reductions effected by the supplier during the term of the contract.

(b) All rental contracts shall have a notice of termination provision in favor of the state not to exceed ninety days and shall allow termination of the contract as it applies to specific equipment or services without termination of the entire contract.

(c) Renewal of a rental contract shall be subject to the advance review and recommendation of the procurement support team and to the advance written approval of the state central purchasing agency and shall only be permitted if any proposed price increases do not exceed the supplier's current published list prices.

(2) Termination of a rental contract may be effected, in addition to any other legal reasons, by the state central purchasing agency, which shall have authority to direct a user agency to terminate, with adequate notice, a rental contract for the failure of any party to comply with the provisions herein, and to initiate competitive sealed bidding procedures in order to retain or replace the equipment affected by termination.

D. Contracts for fiscal intermediary services in processing claims of health care providers. State agencies may enter into contracts for fiscal intermediary services in processing claims of health care providers. The term of such a contract shall be one hundred twenty months. In the event special circumstances, as provided in Paragraph (9), necessitate, additional one-year extensions of the contract may be granted. The award process and final contract shall include the following:

(1) Contracts for fiscal intermediary services in processing claims of health care providers shall be awarded by a competitive selection process which shall list in the solicitation for proposals the method by which the contract shall be awarded and include all criteria to be used and the weights assigned to each criterion. The procedure for issuance of the solicitation for proposals shall be in accordance with guidelines published by the state central purchasing agency. The selection of the contractor shall be made by the head of the using agency only in accordance with the method and criteria as set forth in the solicitation for proposals and in accordance with the recommendation of the procurement support team.

(2) Justification for the contract shall be submitted to the state central purchasing agency and shall be submitted to the House and Senate committees on health and welfare at least forty-five days prior to the issuance of a solicitation for proposals. Within thirty days of receipt of the justification by the House and Senate committees on health and welfare, either committee may convene a meeting separately or jointly for the purpose of conducting a public hearing on the justification which was submitted. Such justification shall include identification and consideration of all factors, including costs, relevant to the solicitation for proposals and the final contract.

(3) The one-hundred-twenty-month term of such contract shall be divided into one period of between thirty-six months and sixty months, immediately followed by successive twelve-month periods. The state shall have an option to renew such contract for each of the twelve-month periods. If the state does not exercise its option to renew, the contract shall be terminated. In the event special circumstances occur, as provided in Paragraph (9), additional twelve-month extensions of the contract may be granted.

(4) In addition to other provisions as required by law or in the best interests of the state, such contract shall contain provisions setting forth, (a) the amount and requirements of the contractor's performance bond, (b) penalty and enforcement provisions for the failure of the contractor to perform in accordance with the contract documents, (c) conditions for optional renewal of the contract by the state in accordance with the provisions of this Subsection, and (d) requirements for termination of the contract by the state at any time, or for cause, or upon the refusal of the state to exercise an option to renew such contract.

(5) Issuance of specifications for a solicitation for proposals on a contract for fiscal intermediary services in processing claims of health care providers shall be made at least twelve months prior to the termination date of an existing contract, unless the contract termination is for cause or due to the refusal of the state to exercise an option to renew.

(6) No award of the contract shall be made until the House and Senate committees on Health and Welfare, meeting jointly or a joint subcommittee thereof has conducted a public hearing concerning such award.

(7) No award of the contract shall be made later than eight months prior to the termination date of an existing contract, unless the contract termination is for cause or due to the refusal of the state to exercise an option to renew.

(8) No option to renew such contract shall be exercised by the state until the following criteria have been satisfied:

(a) The Department of Health and Hospitals has conducted a public hearing concerning such renewal.

(b) The Department of Health and Hospitals submits to the House and Senate committees on health and welfare a notice of intention by the Department of Health and Hospitals to exercise the option to renew such contract and a copy of any public testimony which was taken at the public hearing held by the Department of Health and Hospitals. The House and Senate committees on health and welfare, meeting separately or jointly, may hold a public hearing concerning such renewal within thirty days following the receipt of a notice of intention by the Department of Health and Hospitals to exercise the option to renew such contract.

(c) The House and Senate committees on health and welfare, meeting separately or jointly, have conducted a public hearing concerning such renewal or thirty days have elapsed from the date the Department of Health and Hospitals submitted a notice of intention to renew such contract to the House and Senate committees on health and welfare and neither committee has posted a public notice of meeting concerning the renewal of such contract.

(9) In the event the Department of Health and Hospitals and/or the United States Department of Health and Human Services, Health Care Financing Administration propose substantial changes in the operations of the Medicaid program that would materially impact the services performed by the fiscal intermediary, the Department of Health and Hospitals may, subject to the approval of the House and Senate committees on health and welfare, approve additional extensions of the contract until such time as it is practical to prepare a solicitation for proposals describing the revised services that would be performed by the fiscal intermediary. During the time frame covered by any extension beyond the original one-hundred-twenty-month period, the fiscal intermediary may be required to perform additional functions to assist in preparing the Department of Health and Hospitals in the transition to the new program. Such functions shall include existing fiscal intermediary services as well as efforts to control fraud and abuse, program reports, beneficiary enrollment and program information services, encounter data, and annual managed care negotiation data.

E. Master Agreements. The state director of purchasing may enter into master agreements with vendors with which the state conducts substantial business over a period of time.

(1) Such agreements shall set forth those terms and conditions of specific legal import which relate to the basic provisions according to which procurement activity will be conducted, and shall meet the following requirements:

(a) Such agreements may be for any term up to sixty months.

(b) All agreements must contain a clause providing that any changes mandated by state or federal law, whether legislative or judicial, will be incorporated; however, if such a change is not acceptable to either party, the affected term or terms of the contract shall be renegotiated and, if agreement cannot be reached, shall be stricken from the contract.

(c) A specific provision of any such agreement may be waived or changed only once during the term of the agreement, by mutual consent, expressed in writing.

(d) Each master agreement must be negotiated by a procurement support team and executed on behalf of the state by the state director of purchasing.

(2) Vendors may refer to the master agreement on file with the state director of purchasing when responding to invitations for bids for specific items of data processing equipment, related services, or software. Such bid responses must include a proposed schedule incorporating the terms of the master agreement and further detailing the items and prices bid. The selected vendor and the procuring agency shall sign the schedule and submit it to the state central purchasing agency for approval.

(3) The state director of purchasing, subject to the approval of commissioner of administration, shall have authority for determining when and if master agreements may be used. Notwithstanding any other provisions of this Part, master agreements shall not be used to circumvent the competitive bid process otherwise required by law.

F. The Department of Public Safety and Corrections may enter into a multiyear contract not to exceed ten years when contracting for the Video Gaming Monitoring System for the purposes described in R.S. 27:302(A)(5)(o). This contract may be awarded by the competitive request for proposal procedures set forth in R.S. 39:1593(C).

G. The Department of Wildlife and Fisheries may enter into a multiyear contract not to exceed ten years when contracting for the issuance of hunting and fishing licenses through an electronic issuance system as authorized by R.S. 56:30.1. This contract may be awarded by the competitive request for proposal procedures set forth in R.S. 39:1593(C).

Acts 1981, No. 628, §1, eff. July 20, 1981. Amended by Acts 1982, No. 855, §2; Acts 1983, No. 478, §2, eff. July 6, 1983; Acts 1984, No. 754, §2, eff. July 13, 1984; Acts 1985, No. 995, §1, eff. July 23, 1985; Acts 1993, No. 812, §1, eff. July 1, 1993; Acts 1995, No. 40, §1, eff. June 1, 1995; Acts 2001, No. 634, §1, eff. June 22, 2001; Acts 2003, No. 810, §1; Acts 2004, No. 353, §1, eff. June 18, 2004; Acts 2007, No. 85, §1; Acts 2010, No. 539, §1.

NOTE: See Acts 1985, No. 995, §3.

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