Subd. 1. Duties of commissioner.

1. (a) Contract management. The commissioner shall perform all contract management and review functions for state contracts, except those functions performed by the contracting agency, and the attorney general. All agencies shall fully cooperate with the commissioner in the management and review of state contracts. A delegation of the commissioner's duties under this section to the head of an agency or a designated subordinate must be filed with the secretary of state and may not, except with respect to delegations within the department of administration, exceed two years in duration.
2. (b) Purchasing. The commissioner shall purchase, rent, or otherwise provide for the furnishing of all supplies, materials, equipment, and utility services. The commissioner may lease, rent, or sell supplies, equipment, and services to agencies. The commissioner shall purchase from the state correctional institutions, the University of Minnesota, and other state institutions all articles manufactured by them which are usable by the state. All purchase orders must be prepared in a format prescribed by the attorney general.

Subd. 2. Validity of state contracts.

1. (a) A state contract or lease is not valid and the state is not bound by it until:

   1. (1) it has first been executed by the head of the agency or a delegate which is a party to the contract;
   2. (2) it has been approved by the commissioner or a delegate, under this section;
   3. (3) it has been approved by the attorney general or a delegate as to form and execution; and
   4. (4) the account system shows an allotment or encumbrance balance for the full amount of the contract liability.
2. (b) Paragraph (a), clause (2), does not apply to contracts between state agencies, contracts awarding grants, or contracts making loans by the department of trade and economic development.
3. (c) The head of the agency may delegate the execution of specific contracts or specific types of contracts to a designated subordinate within the agency if the delegation has been approved by the commissioner of administration and filed with the secretary of state. The fully executed copy of every contract or lease must be kept on file at the contracting agency.

Subd. 2a. Exception.

The requirements of subdivision 2 do not apply to state contracts of the department of economic security and the department of children, families, and learning, to the extent that the department of children, families, and learning is administering programs transferred from the department of economic security, that distribute state and federal funds for the purpose of subcontracting the provision of program services to eligible recipients. For these contracts, each department is authorized to directly enter into state contracts and encumber available funds. For contracts distributing state or federal funds pursuant to the federal Economic Dislocation and Worker Adjustment Assistance Act, United States Code, title 29, section 1651 et seq.; or Minnesota Statutes, sections 268.9771, 268.978, 268.9781, and 268.9782, the commissioner of economic security is authorized to directly enter into state contracts with approval of the workforce development council and encumber available funds to ensure a rapid response to the needs of dislocated workers. Each department shall adopt internal procedures to administer and monitor funds distributed under these contracts.

Subd. 3. Contract administration.

Upon entering into a state contract, an agency bears full responsibility for the diligent administration and monitoring of the contract. The commissioner may require an agency to report to the commissioner at any time on the status of any outstanding state contract to which the agency is a party.

Subd. 3a. Warranties.

A contract for the purchase of a product covered by a manufacturer's warranty must provide for servicing of the product under the warranty by the vendor or a designated agent of the vendor.

Subd. 4. Subject to audit.

A contract or any disbursement of public funds to a provider of services or a grantee made by or under the supervision of the commissioner, an agency, or any county or unit of local government must include, expressly or impliedly, an audit clause that provides that the books, records, documents, and accounting procedures and practices of the contractor or other party, relevant to the contract or transaction are subject to examination by the contracting agency, and either the legislative auditor or the state auditor as appropriate. If the contracting agency is a local unit of government, and the governing body of the local unit of government requests that the state auditor examine the books, records, documents, and accounting procedures and practices of the contractor or other party pursuant to this subdivision, the contracting agency shall be liable for the cost of the examination. If the contracting agency is a local unit of government, and the grantee, contractor, or other party requests that the state auditor examine all books, records, documents, and accounting procedures and practices related to the contract, the grantee, contractor, or other party that requested the examination shall be liable for the cost of the examination. A state contract made for purchase, lease, or license of software and data from the state is not required to contain that audit clause.

Subd. 5. Authority of attorney general.

The attorney general may sue to avoid the obligation of an agency to pay under a state contract or to recover payments made if services performed under the contract are so unsatisfactory, incomplete, or inconsistent with the price that payment would involve unjust enrichment. The contrary opinion of the contracting agency does not affect the power of the attorney general under this subdivision.

Subd. 6. Contracts with Indian tribes and bands.

Notwithstanding any other law, the state may not require an Indian tribe or band to deny their sovereignty as a requirement or condition of a contract with the state or an agency of the state.

Subd. 7. Compliance.

The commissioner must develop procedures to audit agency personnel to whom the commissioner has delegated contracting authority, in order to ensure compliance with laws and guidelines governing issuance of contracts, including laws and guidelines governing conflicts of interest.