OVERVIEW

State agencies can enter into a grant program contract using a fixed term agreement, a straight multiyear agreement, or a simplified renewal agreement. The purpose of this section is to present standard contract language for each of those types of agreements for grant contracts, and to provide guidance for their use.

As detailed in the New York State Grants Management Budget Bulletin, the Division of Budget (DOB) requires the use of the State of New York Contract for Grants for all grant contracts, renewals or amendments over $10,000. The Master Grant Contract is located at the Grants Management website. The Office of the State Comptroller (OSC) recommends that agencies not subject to New York State Grants Management Budget Bulletin still adopt the recommended standardized contract formats. The use of standard contract language results in efficiencies for both the State and the contractor, including reduced paperwork and processing time.

FIXED TERM AGREEMENTS

For grant transactions, a fixed term agreement is generally used for project based contracts (e.g. construction or research) when no renewals are anticipated. Since there are no renewals, the contract term and the contract period are the same (see the Grants Management website for additional information). The total dollar value of the contract is known and budgeted for in the original contract transaction. A formal amendment is required to extend the duration (time), change the dollar value (cost), or both (time and cost). Unlike simplified renewals, annual formal renewals and annual budget and workplan negotiations are not required.

MULTIYEAR AGREEMENTS

A multiyear agreement is generally used for service delivery contracts, in lieu of annual renewals, when the scope of the program services and the budget will remain consistent for each year of the program. In order to use the multiyear agreement, an agency must be able to predict, at the start of the multiyear term, the total amount of the contract for the entire multiyear period. The scope of the contract must be established at the start of the contract and remain unchanged for the full period of the contract (see the Grants Management website for additional information). Unlike simplified renewals, annual formal renewals and annual budget and workplan negotiations are not required.

SIMPLIFIED RENEWAL AGREEMENTS

For grant program contracts that do not meet the criteria for multiyear agreements, due to the need for flexibility in establishing annual work plans and/or budgets, simplified renewal agreements should be used. Use of the simplified renewal agreement offers service providers increased confidence that the State intends to continue the contract beyond the initial period, when a multiyear term agreement is not appropriate. Subject to the availability of funds, a simplified renewal agreement requires the successful negotiation of the workplan and budget for each formal annual renewal (see the Grants Management website for additional information).

REQUIREMENTS

To use the fixed term agreement, multiyear agreement, or simplified renewal agreement for grant program contracts, the agency must comply with the following requirements:

• Any proposed increase in contract amount, change in contract term, or change in scope of worknot previously approved by OSCrequires a contract amendment, and may require either a Contract Reporter Exemption, or a new procurement.
  • The agency must submit a proposed amendment to OSC for any such proposed change; and
  • scope changes requested of OSC after the fact may be denied.
• The agency must comply with all relevant requirements of State Finance Law Article 11-B.
• Funds reservation and expenditures must be made against the proper fiscal year’s appropriations.
• Any proposed modification to a contract that will result in a transfer of funds among program activities or budget cost categories, but does not affect the amount, consideration, scope or other terms of such contract, must be submitted to OSC for approval when:
  • The amount of the modification is equal to or greater than ten percent of the total value of the contract for contracts of less than five million dollars.
  • The amount of the modification is equal to or greater than five percent of the total value of the contract for contracts of more than five million dollars.
• The agency must monitor its contracts and budgets regularly.

In addition, when using a multiyear agreement:

• The contract must include language that allows the State to terminate the contract for convenience.
• The agreement must include a projected budget and projected program workplan for each year of the full multiyear term, and must provide sufficient information to allow the agency to make a determination that, for each year of the multiyear agreement, the contract is proceeding as agreed.

The specific form of this information may vary depending upon the program. For example:

• If the contractor’s program is fully operational and the services and related budget will remain unchanged from year to year, the agreement may include a projected budget and program workplan for each budget period; or
• for a program which is expected to experience changes during the multiyear period, e.g. the first year will be primarily for start-up, with increases in actual service delivery over the contract term, the agreement must include annual budget and workplan information reflecting the anticipated changes over the life of the contract.

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AGENCY PROCEDURES

The following procedures must be followed when the agency is not using the Grant Master contract.

A. CONTRACT TERMS AND CONDITIONS

Multiyear Agreement

A multiyear agreement must contain certain terms and conditions, described below and must include the following:

• Language which identifies the full multiyear term of the agreement and specifies the maximum liability of the State for the entire multiyear period.
• Language which allows the State to terminate for convenience. Such language should be in addition to any contract language allowing the agency to terminate: (i) for unavailability of funds; (ii) for cause; or (iii) upon mutual consent.

Sample termination for convenience clauses are provided below:

Sample 1:“The State may terminate this Agreement without cause with ninety (90) days prior written notice. In the event of such termination, the parties will adjust the accounts due and the contractor will undertake no additional expenditures not already required. Upon any such termination, the parties shall endeavor in an orderly manner to wind down activities hereunder.”

Sample 2:“The State shall have the right to terminate this contract for convenience. The State may only invoke its right to terminate for convenience on each anniversary date of the start date of the contract (except for the contract expiration date) provided that the State has given written notice to the contractor no later than 90 days prior to the anniversary date.”

Simplified Renewal Agreement

The simplified renewal agreement’s contract term consists of annual periods within an established multiyear period, and standard contract appendices are incorporated to establish workplans and budgets for each of the annual periods. The use of this standardized boilerplate can expedite the development and negotiation of an agreement and its renewals and will expedite the OSC review process.

Contract Format

The uniform use of appendices supports an efficient review by OSC by facilitating the location of specific information. The State Attorney General and OSC must approve changes to agency appendices, e.g. Appendix A-1, that affect terms and conditions prior to the contracting agency’s use of the appendix.

The documents and appendices for both agreement types are:

• Face Page
• Signature Page
• New York State Standard Terms and Conditions
• Appendix A: Standard Clauses for New York State Contracts
• Attachment A-1: Agency Specific Terms and Conditions
• Attachment A-2: Program Specific Terms and Conditions
• Attachment A-3: Federally Funded Grants and Requirements Mandated by Federal Laws
• Attachments B-1: Expenditure Budget; B-2: Performance Based Budget; B-3: Capital Budget; B-4: Net Deficit Budget
• Attachment C: Work Plan
• Attachment D: Payment and Reporting
• Other attachments, including, but not limited to, the request for proposal or program application, if incorporated by reference on the Face Page.

Other appendices can be incorporated as needed to meet the agency’s needs.

B. CONTRACT HEADER FIELDS IN SFS

Guide to Financial Operations

REV. 2/29/2024