You may choose to extend a contract for an additional period if there is a continuing need for the goods or services.
You can only extend a contract if all the following conditions are met:
1. the contract contains an (unused) option to extend
2. it is value for money to extend the contract and
3. the contract has not yet expired.
If you choose to extend a contract, you should follow the process for extension contained in the contract.
If you do not meet the conditions for contract extension, seek legal advice. You may have the option to:
• Put in place a short-term contract to cover the period until you complete a new procurement process and establish a new contract.
• Extend a contract by contract variation before the contract end date for a short period of time where:
a. the procurement process for a replacement contract is still ongoing and continuity of the supply of goods or services is essential or
b. the scope and the value of the contract remains largely the same. This can allow for finalisation of the contract when experiencing minor delays.
Your entity must report contract extensions on AusTender within 42 days of amending the contract if it is valued at or above the CPRs reporting threshold of $10,000.
| Key steps in this process are: | |
| a. | Determining whether there is an ongoing need for the goods or services. |
| b. | Determining whether the existing contract has an option to extend. Warning: You cannot legally extend an expired contract. This means that once the end date of the contract has passed, you cannot exercise an extension option, even if one exists, or extend through a contract variation. |
| c. | Considering whether extending the existing contract would represent value for money, and if so, gain necessary approvals and follow the extension process contained in the contract. |
| d. | Initiating contract renewal in a timely manner. If the contract does not have an option to extend or all extension options have been used, but the goods or services are still required, seek legal advice. You may need to initiate a new procurement process that will need to follow your entity's policies and processes for procurement, including procurement thresholds and delegations, and must also comply with the Commonwealth Procurement Rules. |
| e. | Keeping appropriate records for all decisions made in relation to extending or renewing a contract. |