Division 3. Prohibited Types of Contracts

No cost-reimbursement contract may be made unless the Purchasing Agent determines or approves a using agency's determination that such contract is likely to be more beneficial to the County than any other type of contract.

Each contractor under a cost-reimbursement type contract shall obtain approval of the County, as provided for in the contract, before entering into:

Except with respect to firm fixed-price type contracts, no contract type shall be used unless the proposed contractor's accounting system will permit timely development of all necessary cost data in the form required by the specific contract type contemplated and that the contractor's accounting system is adequate to allocate costs in accordance with generally accepted accounting principles.

All cost-reimbursement type contracts shall contain a provision that only costs determined to be allowable, in accordance with established cost principles as defined in the regulations, will be reimbursable.

A contract for supplies or services which extends beyond the current fiscal year may be entered into for periods not in excess of the time set forth in the Invitation for Bids or Request for Proposals (inclusive of any options exercisable thereunder), if funds for the first fiscal year of the contemplated contract are available at the time of contracting. Payment and performance obligations for succeeding fiscal years shall be subject to the availability of funds therefor. The exercise of each contract's option year requires that the Purchasing Agent and the using agency review the contract to determine whether the option should be exercised or if the contract should be re-bid. If an option on a multi-year contract has expired, the contract shall be re-bid. Factors in this determination can include, but are not limited to, the following:

If funds are not appropriated for the continued performance of a contract approved under this Section, the contract for that year is terminated either automatically or in accordance with the termination clause of the contract. Unless otherwise provided for in the contract, the effect of termination is to discharge both parties from future performance of the contract, but not from their existing obligations.

All contracts entered into under this Section shall contain a notice that they are subject to termination, either automatically or in accordance with a termination clause, upon the failure of the County Council to appropriate funds for the future performance of the contract.