Chapter 25 - IT Contract Formation

There are certain types of contracts or potential suppliers which are prohibited by the Code of Virginia (refer to § 2.2-4321.1). Those contracts and/or suppliers are as follows:

• No state agency shall contract for goods or service with a supplier or any affiliate of the supplier if the supplier fails or refuses to collect and remit sales tax or fails or refuses to remit any tax due. This will not apply if the supplier has entered into a payment agreement with the Department of Taxation to pay the tax and is not delinquent under the terms of the agreement or has appealed the assessment of the tax and the appeal is pending. Agencies may contract with these suppliers in the event of an emergency or if supplier is the sole source of needed goods and services. The Department of General Services shall post public notice of all prohibited sources on its public internet procurement website and on other appropriate websites.

• A public contract may include provisions for modification of the contract during performance, but no fixed price contract may be increased by more than 25% of the amount of the contract or $50,000, whichever is greater.

• Any public body may extend the term of an existing contract for services to allow completion of any work undertaken but not completed during the original term.

• Contract pricing arrangements: Public contracts may be awarded on a fixed price or cost reimbursement basis. Except in the case of emergency affecting the public health, safety or welfare, no public contract shall be awarded on the basis of cost plus a percentage of cost.

Additionally, an agency may not award a contract to a supplier, including its affiliates and all subcontractors if they are excluded on the federal government's System for Award Management (SAM) at https://www.vita.virginia.gov/supply-chain/sam; or, who is not registered in eVA at time of award.

Section 2.2-5514 of the Code of Virginia prohibits agencies from using, whether directly or through work with or on behalf of another public body, any hardware, software, or services that have been prohibited by the U.S. Department of Homeland Security for use on federal systems.