Opinion ID: 1266394
Heading Depth: 2
Heading Rank: 3

Heading: Multi-year Contracts

Text: The Plaintiffs argue that the Installment Purchase and Use Agreement (providing for the buy-back of renovated or newly constructed school facilities) and the Base Lease and Conveyance Agreement (leasing the land on which the renovated school facilities currently sit to the Corporation) violate the procurement code's limit on the term of contracts. We disagree. Section 2-302 of the School District's procurement code generally provides that the School District may not enter into a contract for supplies or services which contains a term agreement extending beyond five years. The procurement code's definitional section defines service as the furnishing of labor, time, or effort. See id. § 1-201(22). The section defines supplies as [a]ll property including ... leases of real property, excluding land or a permanent interest in land. Id. Because the procurement code's plain terms clearly exclude land or a permanent interest in land from the definitional provisions which are subject to the code's limitations on the terms of contracts, concluding that the Base Lease and Conveyance Agreement is excluded from the procurement code's time limit is a rather elementary determination. Turning to the Installment Purchase and Use Agreement, we hold that this contract is also exempt from the procurement code's time limitation, but for a different reason. The agreement expressly provides that it is not an agreement for a multi-year term, but is instead a one-year agreement that may, at the School District's option, be renewed until the School District has completely purchased the renovated and newly constructed school facilities from the Corporation. Because this agreement is not for a multi-year term, the procurement code's time limitation on contracts does not apply. Accordingly, we hold that the School District has not violated the time limit on contracts found in its procurement code.