Chapter 3Contract Approval Process

Section § 38020

Explanation

Before the start of a fiscal year, departments in the Health and Welfare Agency can create service contracts to prevent delays. These contracts are only valid if funds are provided by the state budget for that year. Additionally, the contracts may have restrictions or conditions set by the Legislature. If the budget does not allocate enough money, the contracts become invalid, and neither party has any obligations or liabilities.

The term "direct service contract" refers to agreements for services in local or subvention assistance programs.

(a)CA Health and Safety Code § 38020(a)  All departments under the Health and Welfare Agency may write and execute direct service contracts prior to July 1 of any fiscal year for the mutual benefit of both parties in order to avoid program and fiscal delay which could occur if the contracts were executed after July 1.
Such contracts are valid and enforceable only if sufficient funds are made available by the Budget Act of the appropriate contract year. In addition, contracts may be subject to such additional restrictions, limitations, or conditions as enacted by the Legislature and contained in the Budget Bill or any statute enacted by the Legislature.
If the Budget Act does not appropriate sufficient funds for the program, such contracts shall be invalid and of no further force and effect. In this event, the state shall have no liability to pay any funds whatsoever to the contractor, or to furnish any other considerations under this contract and the contractor shall not be obligated to perform any provisions of this contract.
(b)CA Health and Safety Code § 38020(b)  As used in this act “direct service contract” means a contract for services contained in local assistance or subvention programs, or both.
Health and Welfare Agency direct service contracts fiscal year Budget Act funding availability budget restrictions Legislature conditions program service agreements contract validity fiscal delay prevention local assistance programs subvention programs contract enforcement liability waiver state budget appropriation
(Added by Stats. 1980, Ch. 990.)

Section § 38021

Explanation

If there's a delay in renewing a direct service contract and it's not the contractor's fault, the administrative department can ask for a 90-day extension of the current contract. This lets the contractor keep billing for three months while waiting for the new contract to be finalized.

If the renewal of a direct service contract is not approved in a timely manner through no fault of the contractor, the administrative department may request a simple 90-day extension of the existing approved contract pending final approval of the contract renewal and provide notification and the information and forms necessary for the agency contractor to bill for up to 90 days pursuant to this section.
direct service contract contract renewal delay 90-day extension contractor billing administrative department pending approval contract extension process renewal approval contract billing forms contract renewal notification service contract extension agency contractor billing extension contract approval process timely contract renewal
(Added by Stats. 1980, Ch. 990.)