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Chapter 10 - General IT Procurement Policies

10.12 Prohibited contracts

The Code of Virginia prohibits the Commonwealth from entering into certain types of contracts and to contract with individuals or businesses who have defaulted on some obligation to the Commonwealth. These prohibitions are as follows:

Section 2.2-4331 of the Code of Virginia provides that no contract shall be awarded by the Commonwealth on the basis of cost plus a percentage of cost except in the case of emergency affecting the public health, safety or welfare. Contracts may be awarded on a fixed price or cost reimbursement basis, or any other basis that is not prohibited.

Section 2.2-4321, § 2.2-4321.1, and § 2.2-4311.2 of the Code of Virginia prohibit agencies from contracting with any supplier or affiliate of the supplier who:

  • Fails or refuses to collect and remit sales tax
  • Fails or refused to remit any tax due unless 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. The determination of whether a source is a prohibited source shall be made by the Department of Taxation after providing the prohibited source with notice and an opportunity to respond to the proposed determination. The Department of Taxation shall notify the Department of General Services of its determination.
  • Is not authorized to transact business in the commonwealth.
  • Is included on the Commonwealth of Virginia’s Debarment List at the time of award.



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, 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.

Except for the § 2.2-5514 prohibitions specified above, agencies may contract with these sources in the event of an emergency or if contractor is the sole source of needed goods and services.