(a)        Contract Time and Continuity. –

(1)        In efforts to support the continuity of services provided by nonprofit grantees receiving state and federal funds, the Department of Health and Human Services (Department) shall enter into a minimum of a two-year contract agreement with nonprofit grantees/recipients if all of the following requirements are met:

a.         The nonprofit grantee/recipient is receiving nonrecurring funding for each year of a fiscal biennium.

b.         The nonprofit grantee/recipient is receiving recurring funding.

c.         Multiyear contracts are not otherwise prohibited by the funding source.

(2)        Nonprofit grantees/recipients receiving recurring federal grant funding shall have the option to extend the contract up to one additional year at the end of the contract’s initial term if all of the following requirements are met:

a.         The extension is mutually agreed upon by the Department and the nonprofit grantee, through a written amendment as provided for in the General Terms and Conditions.

b.         Funding for the contract remains available.

(3)        The Department shall allow any nonprofit grantee/recipient receiving recurring or nonrecurring state and/or federal funding for each year of a fiscal biennium to automatically activate limited-time extensions of up to three months for continuity of services when a formal extension or renewal process has not been completed within 10 business days of the subsequent contract start date if all of the following requirements are met:

a.         The nonprofit grantee/recipient is receiving recurring funding or nonrecurring state and/or federal funding for each year of a fiscal biennium.

b.         The nonprofit grantee/recipient has received an unqualified audit report on its most recent financial audit when an audit is required by N.C. Gen. Stat. § 159-34 or 09 NCAC 03M.

c.         The nonprofit grantee/recipient has a track record of timely performance and financial reporting to the Department as required by the contract.

d.         The nonprofit grantee/recipient has not been identified by the Department as having a record of noncompliance with requirements of any funding source used to support the contract and has not received an undisputed notice of such noncompliance from the Department. For purposes of this requirement, noncompliance does not include issues stemming from late execution of a contract or mutually agreed upon changes to scope of work or deliverables, and undisputed notice of noncompliance does not include notice of noncompliance where the grantee has provided written evidence of actual compliance to the Department within 30 days of receipt of notice of noncompliance.

e.         The nonprofit grantee/recipient has been in operation for at least five years.

(b)        Negotiated Overhead Rates. – The negotiation, determination, or settlement of the reimbursable amount of overhead under cost-reimbursement type contracts is accomplished on an individual contract basis and is based upon the federally approved indirect cost rate. For vendors who do not have a federally approved indirect cost rate, in accordance with 2 C.F.R. § 200.414(f), the de minimis rate of ten percent (10%) of modified total direct costs shall apply. ?(2022-52, s. 2(a), (c).)