- Operational Services Division
When Statewide Contracts approach their expiration dates, OSD Staff receive questions from buyers and vendors about whether a contract includes extend beyond language and the circumstances under which it may be used. We recently sat down with Steven Barros from the OSD Legal Unit to give some context and details related to this useful provision.
What is extend beyond language?
Extend beyond language gives Statewide Contract users a limited period of time to continue their engagements with vendors after the expiration of a Statewide Contract. That language permits contract obligations to extend beyond the expiration of the Statewide Contract term. These periods usually are short in duration, ranging from a few months to a few years, and engagements may not extend beyond the expiration of the extend beyond period itself.
Not every Statewide Contract provides an extend beyond period, but, when one is provided, buyers and vendors should note in their documentation that the term of their engagements extends into the extend beyond period. For example, if a buyer is leasing equipment from a vendor, the term of the lease may end at some point during the extend beyond period.
Why do certain contracts allow for extend beyond agreements while others do not?
An extend beyond provision may be a useful tool, depending on the nature of the procurement. Buyers may find it useful, or even critical, to continue engagements through the expiration of a Statewide Contract to prevent an interruption in services, such as specialized IT staffing. Also, multi-year leases would become impossible to procure toward the end of a Statewide Contract term without extend beyond provisions.
However, for certain Statewide Contracts, such as those for goods, an extend beyond provision may be unnecessary. In those circumstances, it would be in the best interest of the buyer to purchase under the successor Statewide Contract since it will have the most up-to-date negotiated terms and offerings.
How do you know if a particular contract accommodates extend beyond agreements?
To have an extend beyond period, a Statewide Contract must have a section in the Request for Response (RFR) that explicitly provides one. That section would have language that specifies the period of time beyond which written agreements are permitted to extend past the expiration of the Statewide Contract. Contract User Guides reflect extend beyond periods provided in RFRs.
What transactions are and are not allowable?
New engagements under a Statewide Contract are not permitted during an extend beyond period; they only may be entered into during the term of the Statewide Contract. Extend beyond periods enable buyers to continue ongoing engagements, not start new ones. Extend beyond periods allow for the completion of service orders, product deliveries, and payments to close out engagements started during a Statewide Contract’s term.
To take advantage of an extend beyond period, buyers and vendors should properly document that the term length of their engagement extends into the extend beyond period. If they do not document the use of an extend beyond period and the Statewide Contract expires, the buyer and vendor may not agree to continue the engagement into the extend beyond period.
Please share a few situations where buyers might use extend beyond accommodations.
Buyers may take advantage of extend beyond periods in a variety of situations. For example, if a buyer needs to lease equipment, but the relevant Statewide Contract will expire in a month, the buyer and vendor may enter into a lease for a term that extends beyond the expiration of the Statewide Contract and into the extend beyond period, but not to exceed the length of the extend beyond term.
Under ITS75 Software and Services, for example, buyers may have acquired IT solutions that are critical to their operations. Negotiations for IT solutions often become protracted, and, as a result, a particular product may not be immediately available after the original Statewide Contract expires. In that situation, an extend beyond period provides buyers the ability to continue using their existing IT solutions while negotiating new engagements under the successor Statewide Contract.
For Executive Departments, how do extend beyond allowances affect MMARS encumbrances?
Statewide Contracts with extend beyond periods are set up to have an end date in MMARS that matches the last day of the extend beyond period. OSD Category Managers input this information at the start of the Statewide Contract. Departments may encumber until that time; however, as a reminder, Departments may not enter new engagements after the expiration of the Statewide Contract.
In short, what should buyers and vendors take away from our discussion?
- A contract’s extend beyond period allows existing engagements to continue past a contract’s expiration.
- New engagements are not permitted during an extend beyond period.
- Buyers and vendors should document the use of extend beyond terms in agreements which will continue past a contract’s expiration.
Who should buyers or vendors contact if they have questions?
Reach out to the Category Manager(s) listed on page one of the applicable Contract User Guide.
