Pennsylvania Statutes Title 62 Pa.C.S.A. Procurement § 542. Multiterm contracts

(a) Specified period.--A contract for supplies, construction or services may be entered into for a period of time deemed to be in the best interests of the Commonwealth. The term of the contract and conditions of renewal or extension, if any, shall be included in the solicitation, and funds shall be available for the first fiscal period at the time of contracting. Payment and performance obligations for succeeding fiscal periods shall be subject to the availability and appropriation of funds.

(b) Cancellation for unavailability of funds in succeeding fiscal periods.--When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be canceled, and the contractor shall be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the supplies, services or construction delivered under the contract. Such reimbursement shall not include loss of anticipated profit, loss of use of money or administrative or overhead costs. The cost of cancellation may be paid from any appropriations available for that purpose. The contractor shall not be entitled to any reimbursement where the Commonwealth elects not to exercise a renewal or extension option provided for in the contract.