Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of Statutes

16C.05 CONTRACT MANAGEMENT; VALIDITY AND REVIEW.
    Subdivision 1. Agency cooperation. Agencies shall fully cooperate with the commissioner
in the management and review of state contracts.
    Subd. 2. Creation and validity of contracts. (a) A contract is not valid and the state is
not bound by it and no agency, without the prior written approval of the commissioner granted
pursuant to subdivision 2a, may authorize work to begin on it unless:
(1) it has first been executed by the head of the agency or a delegate who is a party to the
contract;
(2) it has been approved by the commissioner; and
(3) the accounting system shows an encumbrance for the amount of the contract liability.
(b) The combined contract and amendments must not exceed five years without specific,
written approval by the commissioner according to established policy, procedures, and standards,
or unless otherwise provided for by law. The term of the original contract must not exceed two
years unless the commissioner determines that a longer duration is in the best interest of the state.
(c) Grants, interagency agreements, purchase orders, work orders, and annual plans need
not, in the discretion of the commissioner and attorney general, require the signature of the
commissioner and/or the attorney general. A signature is not required for work orders and
amendments to work orders related to Department of Transportation contracts. Bond purchase
agreements by the Minnesota Public Facilities Authority do not require the approval of the
commissioner.
(d) Amendments to contracts must entail tasks that are substantially similar to those in the
original contract or involve tasks that are so closely related to the original contract that it would
be impracticable for a different contractor to perform the work. The commissioner or an agency
official to whom the commissioner has delegated contracting authority under section 16C.03,
subdivision 16
, must determine that an amendment would serve the interest of the state better
than a new contract and would cost no more.
(e) A fully executed copy of every contract, amendments to the contract, and performance
evaluations relating to the contract must be kept on file at the contracting agency for a time equal
to that specified for contract vendors and other parties in subdivision 5.
(f) The attorney general must periodically review and evaluate a sample of state agency
contracts to ensure compliance with laws.
    Subd. 2a. Emergency authorization. The commissioner may grant an agency approval to
authorize work to begin on a contract prior to the full execution of the contract in the event of an
emergency as defined in section 16C.10, subdivision 2.
    Subd. 3. Exception. The requirements of subdivision 2 do not apply to contracts of the
Department of Employment and Economic Development distributing state and federal funds
for the purpose of subcontracting the provision of program services to eligible recipients. For
these contracts, the commissioner of employment and economic development is authorized to
directly enter into agency contracts and encumber available funds. For contracts distributing state
or federal funds pursuant to the federal Workforce Investment Act, United States Code, title
29, section 2911 et seq., or section 116L.17, the commissioner of employment and economic
development in consultation with the Job Skills Partnership Board is authorized to directly enter
into agency contracts and encumber available funds to ensure a rapid response to the needs of
dislocated workers. The commissioner of employment and economic development shall adopt
internal procedures to administer and monitor funds distributed under these contracts. This
exception also applies to any contracts entered into by the commissioner of education that were
previously entered into by the commissioner of employment and economic development.
    Subd. 4. Contract administration. A contracting agency shall diligently administer and
monitor any contract it has entered into, pursuant to a delegation of duties from the commissioner.
The commissioner may require an agency to report to the commissioner at any time on the status
of any contracts to which the agency is a party.
    Subd. 5. Subject to audit. A contract or any pass-through disbursement of public funds to a
vendor of goods or services or a grantee made by or under the supervision of the commissioner
or any county or unit of local government must include, expressed or implied, an audit clause
that provides that the books, records, documents, and accounting procedures and practices of the
vendor or other party, that are relevant to the contract or transaction, are subject to examination by
the contracting agency and either the legislative auditor or the state auditor, as appropriate, for a
minimum of six years. If the contracting agency is a local unit of government, and the governing
body of the local unit of government requests that the state auditor examine the books, records,
documents, and accounting procedures and practices of the vendor or other party pursuant to
this subdivision, the contracting agency shall be liable for the cost of the examination. If the
contracting agency is a local unit of government, and the grantee, vendor, or other party requests
that the state auditor examine all books, records, documents, and accounting procedures and
practices related to the contract, the grantee, vendor, or other party that requested the examination
shall be liable for the cost of the examination. An agency contract made for purchase, lease, or
license of software and data from the state is not required to contain this audit clause.
    Subd. 6. Authority of attorney general. The attorney general may pursue remedies
available by law to avoid the obligation of an agency to pay under a contract or to recover
payments made if services performed or goods received under the contract are so unsatisfactory,
incomplete, or inconsistent that payment would involve unjust enrichment. The contrary opinion
of the contracting agency does not affect the power of the attorney general under this subdivision.
    Subd. 7. Contracts with Indian tribes and bands. Notwithstanding any other law, an
agency may not require an Indian tribe or band to deny its sovereignty as a requirement or
condition of a contract with an agency.
History: 1998 c 386 art 1 s 6; 1999 c 86 art 1 s 11; 1999 c 230 s 1; 2000 c 488 art 2 s 1;
1Sp2001 c 8 art 2 s 10; 1Sp2001 c 10 art 2 s 37; 2003 c 130 s 12; 1Sp2003 c 1 art 2 s 48,49;
2004 c 206 s 7