A. General.
A multi-term contract is a contract for the acquisition of
supplies, services, or information technology for more than one year. A
contract is not a multi-term contract if no single term exceeds one year and
each term beyond the first requires the governmental body to exercise an option
to extend or renew. A multi-term contract is appropriate when it is in the best
interest of the State to obtain uninterrupted services for a period in excess
of one year, where the performance of such services involves high start up
costs, or when a changeover of service contracts involves high phase in/phase
out costs during a transition period. The multi-term method of contracting is
also appropriate when special production of definite quantities of supplies for
more than one year is necessary to best meet state needs but funds are
available only for the initial fiscal period. Special production refers to
production for contract performance when it requires alteration in the
contractor's facilities or operations involving high start up costs.
B. Objective.
The objective of the multi-term contract is to promote economy
and efficiency in procurement by obtaining the benefits of sustained volume
production and consequent low prices, and by increasing competitive
participation in procurements which involve special production with consequent
high start-up costs and in the procurement of services which involve high
start-up costs or high phase-in/phase-out costs during changeover of service
contracts.
C. Exceptions.
This Regulation 19-445.2135 applies only to contracts for
supplies, services, or information technology and does not apply to contracts
for construction.
D.
Conditions for Use.
(1) A multi-term contract
may be used if , prior to issuance of the solicitation, the Procurement Officer
determines in writing that:
(a) Special
production of definite quantities or the furnishing of long term services are
required to meet state needs; or
(b) a multi-term contract will serve the best
interests of the state by encouraging effective competition or otherwise
promoting economies in state procurement.
(2) The following factors are among those
relevant to such a determination:
(a) firms
which are not willing or able to compete because of high start up costs or
capital investment in facility expansion will be encouraged to participate in
the competition when they are assured of recouping such costs during the period
of contract performance;
(b) lower
production cost because of larger quantity or service requirements, and
substantial continuity of production or performance over a longer period of
time, can be expected to result in lower unit prices;
(c) stabilization of the contractor's work
force over a longer period of time may promote economy and consistent
quality;
(d) the cost and burden of
contract solicitation, award, and administration of the procurement may be
reduced.
(3) The
determination must contain sufficient factual grounds and reasoning to provide
an informed, objective explanation for the decision.
E. Solicitation.
The solicitation shall state:
(1) the estimated amount of supplies or
services required for the proposed contract period;
(2) that a unit price shall be given for each
supply or service, and that such unit prices shall be the same throughout the
contract (except to the extent price adjustments may be provided in the
solicitation and resulting contract);
(3) that the multi-term contract will be
cancelled only if funds are not appropriated or otherwise made available to
support continuation of performance in any fiscal period succeeding the first;
however, this does not affect either the state's rights or the contractor's
rights under any termination clause in the contract;
(4) that the procurement officer of the
governmental body must notify the contractor on a timely basis that the funds
are, or are not, available for the continuation of the contract for each
succeeding fiscal period;
(5)
whether bidders or offerors may submit prices for:
(a) the first fiscal period only;
(b) the entire time of performance only;
or
(c) both the first fiscal period
and the entire time of performance;
(6) that a multi-term contract may be awarded
and how award will be determined including, if prices for the first fiscal
period and entire time of performance are submitted, how such prices will be
compared; and,
(7) that, in the
event of cancellation as provided in (E) (3) of this subsection, the contractor
will be reimbursed the unamortized, reasonably incurred, nonrecurring
costs.
F. Award.
Award shall be made as stated in the solicitation and permitted
under the source selection method utilized. Care should be taken when
evaluating multi-term prices against prices for the first fiscal period that
award on the basis of prices for the first period does not permit the
successful bidder or offerer to "buy in", that is give such bidder or offeror
an undue competitive advantage in subsequent procurements.
G. Maximum Contract Periods
Every contract with a total potential duration in excess of
five years must be approved as required by Section
11-35-2030(4)
or Section
11-35-2030(5).
No solicitation shall be issued for a contract with a total potential duration
in excess of five years, nor shall any contract with a total potential duration
in excess of five years be awarded pursuant to Section
11-35-1560,
until such approval is granted.
Notes
S.C. Code Regs. §
19-445.2135
Amended by State Register
Volume 23, Issue No. 5, eff May 28, 1999; State Register Volume 31, Issue No.
5, eff May 25, 2007;
State
Register Volume 43, Issue No. 08, eff.
8/23/2019;
State
Register Volume 44, Issue No. 06, eff.
6/26/2020.
