Procurement of Goods and Services With Limitation of a Contractor's Liability

  1. Law
  2. Tennessee Code
  3. Public Property, Printing and Contracts
  4. Public Purchases
  5. Procurement With Limitation of Liability
  6. Procurement of Goods and Services With Limitation of a Contractor's Liability

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    1. The chief procurement officer may authorize the procurement of goods and services with a limitation of a contractor's liability; provided, all respondents to a solicitation had an equal opportunity to request a limitation of liability.
    2. Unless authorized under this section by the chief procurement officer, no contract shall limit a contractor's liability to the state in an amount less than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract.
    3. The chief procurement officer may authorize a limitation of liability amount of less than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract if the chief procurement officer determines that the limitation of liability amount is necessary to prevent harm to the state from failing to obtain the goods or services sought or from obtaining the goods or services at a higher price.
    4. The chief procurement officer is authorized to approve a limitation of liability amount greater than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract if the chief procurement officer determines that an increase in the liability amount is necessary to protect the state's best interests.
    5. A solicitation that includes a limitation of liability amount of less than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract shall be approved by the comptroller of the treasury before the limitation of liability amount may be included in a contract.
    6. A solicitation that does not have a maximum liability, estimated liability, or maximum revenue of a contract may have a limitation of liability if approved by the chief procurement officer and the comptroller of the treasury, and if all respondents to the solicitation had an equal opportunity to request a limitation of liability.
  2. A limitation of liability in a contract with the state shall not apply to:
    1. Liability for intellectual property or to any other liability, including, without limitation, indemnification obligations for infringement of third-party intellectual property rights;
    2. Claims covered by any specific provision in a contract with the state providing for liquidated damages; or
    3. Claims for intentional torts, criminal acts, fraudulent conduct, or acts or omissions that result in personal injuries or death.
  3. A limitation of liability included in a contract with the state shall not waive or limit the state's legal rights, sovereign immunity, or any other immunity from suit provided by law. Nothing in this section authorizes a cause of action against the state in any foreign jurisdiction.
  4. The procurement commission is authorized to promulgate rules, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, as well as policies and procedures, to implement this section.


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