Tennessee Code Title 41. Correctional Institutions and Inmates § 41-24-103

(a) The commissioner is authorized to enter into contracts for correctional services only as provided in this chapter.

(b) Contracts for correctional services, may be entered into subject to the requirements and procedures of former §§ 12-4-109 and 12-4-110 and any additional requirements specified in this chapter.

(c) A contract for correctional services as defined in § 41-24-102(2)(F) is authorized only for one (1) medium security or minimum security facility opened after July 1, 1991, and only according to the requirements and procedures specified in this chapter. No contract shall be authorized for a facility intended primarily to serve special needs inmates.

(d) Any inmate sentenced to confinement in the department shall be legally eligible to be incarcerated in a facility in which a prison contractor is providing correctional services pursuant to this chapter.

(e) Contracts for correctional services may include incentives or disincentives; provided, that the incentives or disincentives are based on quantifiable measurements of performance that are described in the request for proposal and contract. The total of all incentive payments shall not exceed five percent (5%) of the total contract price per annum. This subsection (e) shall not be construed to prohibit or restrict the use of liquidated damages as a remedy for a contractor's breach of contract.