(a) Contract negotiations.      
        (1) A contract that is subject to §9.34 of this subchapter (relating to Non-federal Process) or §9.35 of this subchapter (relating to Federal Process) will be negotiated in accordance with this subsection.       
        (2) The department will enter negotiations with a selected prime provider to establish a satisfactory contract containing a fair and reasonable price for the services.       
        (3) A selected prime provider shall submit to the department the actual salary rates for the proposed team members and the non-salary costs, generated internally, to be billed directly. The department will reference this information in the negotiations.       
        (4) The department anticipates that a satisfactory contract containing a fair and reasonable price for the services may be negotiated within 30 days after the date that a selected prime provider is notified of the selection. If an RFP specifies that more than one contract will be awarded, the time for negotiating the contracts is automatically extended by a period equal to the number of additional contracts to be awarded under that RFP multiplied by five days. The department may grant additional extensions as required. The RFP may specify a shorter or longer time for the negotiations.       
        (5) If the department determines that a fair and reasonable price cannot be negotiated, the department will terminate negotiations with the selected prime provider and proceed under this paragraph.                  (A) Single contract selection. The department will begin negotiations with the next highest-ranked prime provider. This process will continue as necessary through the three highest-ranked prime providers. If a fair and reasonable price cannot be negotiated with any of the three highest-ranked prime providers, the proposed contract shall be canceled. If the proposed contract is canceled, it may be re-advertised.                   (B) Multiple contract selection. The department will begin negotiations with the next highest-ranked prime provider not selected for a contract. This process will continue as necessary through the short-listed prime providers. If a fair and reasonable price cannot be negotiated with any of the short-listed prime providers, the proposed contract shall be canceled. If the proposed contract is canceled, it may be re-advertised.         
      (b) Emergency contract negotiations.      
        (1) Contracts subject to §9.38 of this subchapter (relating to Emergency Contract Process) will be negotiated in accordance with this subsection.       
        (2) The department will enter negotiations with the selected provider to establish a satisfactory contract containing a fair and reasonable price for the services.       
        (3) If the department determines that a fair and reasonable price cannot be negotiated, the department will terminate negotiations with the provider and begin negotiations with the next highest-ranked provider. This process will continue as necessary through the notified firms.       
        (4) If a fair and reasonable price cannot be negotiated with any of the notified firms, the department may take any measure necessary to identify and solicit a firm that is able to perform the services.       
      (c) Urgent and critical negotiations. The department will negotiate with the selected firm to establish a fair and reasonable price and the executive director will execute any agreement.     
      (d) Indefinite deliverable work authorization negotiations.      
        (1) Indefinite deliverable work authorizations will be negotiated in accordance with this subsection.       
        (2) The department will enter negotiations with a selected prime provider to establish a satisfactory work authorization containing a fair and reasonable price for the services.       
        (3) If the department determines that a fair and reasonable price cannot be negotiated, the department will terminate negotiations with the prime provider and begin negotiations with another prime provider with an indefinite deliverable contract.       
     Source Note:        The provisions of this §9.40 adopted to be effective October 17, 2013, 38 TexReg 7122; amended to be effective November 17, 2021, 46 TexReg 7806