44 Ill. Adm. Code 500.700
Types of Contracts
Section 500
Section 500.700 Types of
Contracts
a) Subject to the limitations of this Section and unless
otherwise authorized by law, any type of contract that will promote the best
interests of the State may be used.
b) Prohibition of Cost-Plus-a-Percentage-of-Cost Contracting
The
cost-plus-a-percentage-of-cost contract is prohibited. This type of
contracting may not be used alone or in conjunction with an authorized type of
contract. A cost-plus-percentage-of-cost contract is one in which the vendor
selects the supply or service on which the vendor's percentage is applied.
1) A percentage mark-up from an agreed price list is not a
cost-plus-a-percentage-of-cost contract.
2) A percentage mark-up from the cost of a supply or service
selected by the State or another vendor under contract to the State is not a
cost‑plus-a-percentage-of-cost contract.
3) A percentage mark-up from the cost of parts needed in relation
to a contract for services does not convert the services contract to a
prohibited cost-plus-a-percentage-of-cost contract, provided the parts supplied
under the cost-plus-a-percentage-of-cost method do not exceed 20% of the value
of the contract.
c) A cost-reimbursement contract may be used only when a
determination is made in writing that a cost-reimbursement contract is likely
to be less costly to the State than any other type or that it is impracticable
to obtain the item required except under that type of contract.
d) Option Provisions
When a
contract is to contain an option for renewal, extension or purchase, notice of
such provision shall be included in the solicitation. These options may be
exercised without taking other procurement action when the option is
established for exercise at the OAG's option or by mutual agreement.
e) State Produced Supplies and Services
Notwithstanding
any provision in any contract, supplies or services available from the State's
own programs, such as Correctional Industries, may be ordered without violating
any contract.