§ 39:198 — Types of contracts permitted
§198. Types of contracts permitted
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§198. Types of contracts permitted
A. The types of contracts permitted in the procurement of information technology
systems, information technology services, software, and professional services contracts and
consulting services contracts related to information technology are defined in this Part, and
the provisions of this Part supersede, with respect to such procurements, any existing
conflicting statutory provisions and supplement the provisions of R.S. 39:1551 through 1736.
B. The office of technology services, through the office of state procurement, may,
on behalf of any state agency, enter into information technology systems contracts, as well
as professional services contracts and consulting services contracts related to information
technology, in accordance with the following provisions:
(1) Contracts of this type shall be entered into using one of the methods of source
selection provided in R.S. 39:199, 200, 1594, 1595, 1600(D), 1600.2, and 1702.
(2) The term of such contracts shall not exceed five years.
C. The office of technology services, through the office of state procurement, may,
on behalf of any state agency, enter into information technology services contracts in
accordance with the following provisions:
(1) Contracts of this type shall be entered into using one of the methods of source
selection provided in R.S. 39:199, 200, 1594, 1595, 1600(D), 1600.2, and 1702.
(2) The term of such contracts shall not exceed ten years.
D. The office of technology services, through the office of state procurement, may,
on behalf of any state agency, enter into an information technology systems lease contract
for an operating lease, installment purchase, or financed lease for information technology
systems in accordance with the following provisions:
(1) All contracts of this type shall be entered into using one of the methods of source
selection provided in R.S. 39:199, 200, 1594, 1595, 1600(D), 1600.2, and 1702.
(2) The justification of such contracts must be approved by the office of technology
services prior to issuance of a request for proposals or an invitation to negotiate. Such
justification shall identify and consider all cost factors relevant to that contract.
(3) The term of such contracts shall not exceed ten years, except financed contracts
shall be for a term not to exceed the economic life of the system or ten years, whichever is
less.
(4) Upon the advance written approval of the office of technology services, state
agencies may extend operating leases of information technology systems on a
month-to-month basis for a period not to exceed one calendar year for the stated lease prices.
E. The use of a multiyear contract for information technology systems, information
technology services, and professional services contracts and consulting services contracts
related to information technology shall be in accordance with rules and regulations and under
the following conditions:
(1) The state chief information officer shall approve in writing the use of a multi-year
contract over one year, not to exceed three years.
(2) The director of the state purchasing office shall approve in writing the use of a
multi-year contract over three years, not to exceed five years.
(3) The commissioner of administration, or his designee, shall approve in writing the
use of a multi-year contract over five years.
(4) A report of all multiyear contracts shall be provided to the Joint Legislative
Committee on the Budget and the Joint Legislative Committee on Technology and
Cybersecurity no later than ninety days after the end of each fiscal year.
F. Direct order contracts. The office of technology services, through the state central
purchasing agency, shall, on behalf of all state agencies, enter into a direct order contract
with a vendor of information technology 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 technology services.
(c) Specifications shall be based on the projected needs of user agencies.
(d) Specifications for direct order contracts for the purchase or rental of information
technology 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 information technology 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 for
information technology equipment are subject to the following requirements:
(a) Direct order contracts shall be valid for not more than three fiscal years.
(b) 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.
(c) 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.
(d) Direct order contracts shall include the annual appropriation dependency clause
set forth in Subparagraph (G)(1)(d) of this Section.
(e) Direct order contracts may be extended into one additional fiscal year only under
the following conditions:
(i) Such extension of a direct order contract shall be subject to the approval of the
office of technology services.
(ii) 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.
(f) Items covered by a direct order contract may also be acquired through additional
competitive sealed bidding.
G. Multiyear contracts other than direct order contracts. Any agency of a statewide
elected official or the office of technology services, whether acting in their own capacity or
on behalf of any other state agency, through the office of state procurement, may enter into
contracts for the lease or purchase of information technology systems, information
technology services, software, and professional services contracts and consulting services
contracts related to information technology 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 using one of the methods of source
selection as provided in R.S. 39:199, 200, 1594, 1595, 1600(D), 1600.2, and 1702.
(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)(i) The term of such contract shall be in accordance with Subsections B, C, and
D of this Section.
(ii) Notwithstanding Item (i) of this Subparagraph, contracts for electronic benefits
issuance system services as required pursuant to R.S. 46:450.1 may be entered into for
periods of up to ten years. The contracts shall be for an initial contract period of six years
with the state having two options for two-year extensions up to a maximum of ten years.
(iii) Notwithstanding Item (i) of this Subparagraph and Subsection I of this Section,
contracts of this type may be entered into for periods of up to ten years with approval from
the Joint Legislative Committee on Technology and Cybersecurity. The contracts shall be
for an initial contract period of no more than six years with the state having two options for
two-year extensions up to a maximum of ten years.
(iv) Any agency of a statewide elected official or the office of technology services,
whether acting in their own capacity or on behalf of any other state agency, that is engaged
in an active multiyear contract as of August 1, 2024, shall have the option to extend those
contracts through the office of state procurement, in accordance with the provisions of Items
(i) through (iii) of this Subparagraph.
(d)(i) All such contracts shall 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."
(ii) When funds are not appropriated or otherwise made available to support
continuation of performance in the following fiscal year of a multiyear contract for
professional or consulting services, the contract for the remaining term shall be cancelled,
and the contractor shall be reimbursed in accordance with the terms of the contract for the
reasonable value of any nonrecurring costs incurred but not amortized in the price of services
delivered pursuant to the contract. The cost of cancellation may be paid from appropriations
made specifically for the payment of such cancellation costs or from unobligated funds of
the using agency.
(iii) With respect to all multiyear contracts for professional services and consulting
services pursuant to this Subsection, there shall be no provisions for a penalty to the state for
cancellation or early payment of the contract.
(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 desktop computers, server
systems, storage systems, mobile computing systems, peripheral systems, 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
Subparagraph (G)(1)(d) of this Section.
(e) Installment-payment contracts utilized in procuring microcomputer 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.
(4) Repealed by Acts 2024, No. 734, §3.
H. Rental Contracts. Upon the advance written approval of the state central
purchasing agency, state agencies may enter into contracts for the rental of information
technology 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 be permitted only 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.
I. Contracts for fiscal intermediary services. State agencies may enter into contracts
for fiscal intermediary services either by competitive sealed proposals, cooperative
purchasing, or invitation to negotiate. All contracts for fiscal intermediary services shall be
subject to approval by the Joint Legislative Committee on the Budget.
(1) If the agency uses the competitive sealed proposals procurement method, the
procurement shall be made in accordance with R.S. 39:1595, and the term of the contract
shall be one hundred twenty months. If special circumstances, as provided in Subparagraph
(h) of this Paragraph, necessitate, additional extensions of the contract for up to three years
may be granted. The award process and final contract shall include all of the following:
(a) Justification for the contract shall be submitted to the state central purchasing
agency and shall be submitted to the Joint Legislative Committee on Technology and
Cybersecurity at least forty-five days prior to the issuance of a solicitation for proposals.
Within thirty days of receipt of the justification by the Joint Legislative Committee on
Technology and Cybersecurity, the committee may conduct a public hearing on the
justification which was submitted. This justification shall include identification and
consideration of all factors, including costs, relevant to the solicitation for proposals and the
final contract.
(b) 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 that special circumstances occur, as provided in Subparagraph
(h) of this Paragraph, additional twelve-month extensions of the contract may be granted.
(c) In addition to other provisions as required by law or in the best interests of the
state, such contract shall contain provisions setting forth all of the following:
(i) The amount and requirements of the contractor's performance bond.
(ii) Penalty and enforcement provisions for the failure of the contractor to perform
in accordance with the contract documents.
(iii) Conditions for optional renewal of the contract by the state in accordance with
the provisions of this Subsection.
(iv) 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.
(d) Issuance of specifications for a solicitation for proposals on a contract for fiscal
intermediary services 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.
(e) No award of the contract shall be made until the following criteria have been
satisfied:
(i) The Louisiana Department of Health submits to the Joint Legislative Committee
on Technology and Cybersecurity a notice of intention to award the contract. The Joint
Legislative Committee on Technology and Cybersecurity may hold a public hearing
concerning the award within thirty days following the receipt of a notice of intention to
award the contract.
(ii) The Joint Legislative Committee on Technology and Cybersecurity has
conducted a public hearing concerning the award or thirty days have elapsed from the date
that the Louisiana Department of Health submitted a notice of intention to award the contract
to the Joint Legislative Committee on Technology and Cybersecurity and the committee has
not posted a public notice of meeting concerning the award of the contract.
(f) 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.
(g) No option to renew the contract shall be exercised by the state until the following
criteria have been satisfied:
(i) The Louisiana Department of Health has conducted a public hearing concerning
such renewal.
(ii) The Louisiana Department of Health submits to the Joint Legislative Committee
on Technology and Cybersecurity a notice of intention by the Louisiana Department of
Health to exercise the option to renew the contract and a copy of any public testimony which
was taken at the public hearing held by the Louisiana Department of Health. The Joint
Legislative Committee on Technology and Cybersecurity may hold a public hearing
concerning the renewal within thirty days following the receipt of a notice of intention by the
Louisiana Department of Health to exercise the option to renew the contract.
(iii) The Joint Legislative Committee on Technology and Cybersecurity has
conducted a public hearing concerning the renewal or thirty days have elapsed from the date
that the Louisiana Department of Health submitted a notice of intention to renew the contract
to the Joint Legislative Committee on Technology and Cybersecurity and the committee has
not posted a public notice of meeting concerning the renewal of the contract.
(h) In the event that the Louisiana Department of Health or the United States
Department of Health and Human Services, Centers for Medicare and Medicaid Services
proposes substantial changes in the operations of the Medicaid program that would materially
impact the services performed by the fiscal intermediary, the Louisiana Department of Health
may, subject to the approval of the Joint Legislative Committee on Technology and
Cybersecurity, approve additional extensions of the contract until 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 Louisiana Department of Health in the
transition to the new program. These functions may 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.
(2) Notwithstanding any provision of this Part to the contrary, if the agency uses the
cooperative purchasing procurement method, the procurement shall be governed exclusively
by the provisions of Part VII of Chapter 17 of Subtitle III of this Title and the applicable rules
and regulations and shall not be subject to protest under any provision of Chapter 17 of
Subtitle III of this Title.
(3) Notwithstanding any provision of this Part to the contrary, if the agency uses the
invitation to negotiate procurement method, the procurement shall be governed exclusively
by the provisions of R.S. 39:1600.2 and the applicable rules and regulations.
J. 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 information
technology 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.
K. 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. 27:405(B)(1). This contract may be awarded by the
competitive request for proposal procedures set forth in R.S. 39:1593(C).
L. 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).
M.(1)(a) No award of any contract procured for a period of more than three years,
inclusive of contract extension options, and with a cost of more than ten million dollars shall
be made until the contract is reviewed and approved by the Joint Legislative Committee on
Technology and Cybersecurity. If an extension of any contract procured for a period of more
than three years, inclusive of contract extension options, and with a cost of more than ten
million dollars would increase the total contract cost more than five percent, then the
extension shall not be executed until after the extension is reviewed and approved by the
Joint Legislative Committee on Technology and Cybersecurity.
(b) The issuing agency shall submit the contract for review and approval by the Joint
Legislative Committee on Technology and Cybersecurity. The Joint Legislative Committee
on Technology and Cybersecurity shall conduct a public hearing to consider approval of the
award no later than thirty days after the contract is submitted by the issuing agency. Any
request not approved within thirty days after the contract is submitted by the issuing agency
shall automatically be referred by the chairman of the Joint Legislative Committee on
Technology and Cybersecurity to the Joint Legislative Committee on the Budget for review
and approval.
(c) Any contract approved by the Joint Legislative Committee on Technology and
Cybersecurity pursuant to this Subsection shall be reported to the Joint Legislative
Committee on the Budget.
(d) The chairman of the Joint Legislative Committee on Technology and
Cybersecurity may, at his discretion, refer any request for review and approval directly to the
Joint Legislative Committee on the Budget.
(2) The office of technology services shall submit a monthly report of all multiyear
contracts with a cost of more than one million dollars to the Joint Legislative Committee on
Technology and Cybersecurity.
(3) No award of any contract procured through an invitation to negotiate pursuant
to this Part shall be made until after the contract has been reviewed by the Joint Legislative
Committee on Technology and Cybersecurity.
NOTE: See Acts 1985, No. 995, §3.
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