1. (a)

   1. (1) 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.

   2. (2) There are two (2) 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. (A) An amendment that is a material change in contractual terms, includes without limitation:

2. (i) An increase in the contract amount;

   1. (ii) An increase in the total projected contract amount;

      1. (iii) A change in any of the essential terms of the contract; or

         1. (iv) A change in any performance-based standards stated in the contract; and

      2. (B) A material deviation by a contractor from the performance promised during the period preceding renewal or extension, such as a:

         1. (i) Default requiring the imposition of financial consequences as the result of the contractor’s failure to satisfy performance-based standards under Arkansas Code § 19–11–267 during the year preceding the renewal or extension of the contract; or
         2. (ii) Vendor performance resulting in a vendor performance report during the year preceding the renewal or extension of the contract.
   2. (3) Both of these are material changes that trigger the duty to resubmit a contract for review prior to a renewal or an extension.

   3. (4)

      1. (A) For purposes of Arkansas Code § 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.
      2. (B) Although technically distinguishable, they are functionally similar.

3. (b) Definitions.

   1. (1) “Essential terms of a contract,” also called “fundamental terms”, means provisions that must be included for an enforceable contract to exist between the parties under any applicable statute of frauds.
   2. (2) “Initial contract amount” means the amount agreed to for the initial term of a contract.
   3. (3) “Total projected contract amount” means 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 Arkansas Code § 19-11-238.

Codification Notes: This section was promulgated as R2:19-11-265 of the Procurement Rules prior to codification into the Code of Arkansas Rules.