Public Contract Code section 12112.1
(a)
Software license contracts allowing the use of the software for a specified time period with recurring payments may be paid in advance subject to the procedures, terms, and conditions that the controlling department, as specified in Section 12100, deems necessary to protect the state’s interests.(b)
If an agreement combines the purchase of software with contracted personnel, this section may be applied only to the software purchase and payment in advance for contracted personnel is prohibited. “Contracted personnel” includes, but is not limited to, consulting services, instructor-led training, and other personal services.(c)
A single payment for a lifetime license is permitted.(d)
Advance payments authorized under this section shall not exceed three years.(e)
Procedures, terms, and conditions shall address, at minimum, all of the following:(1)
Annual advance payment provisions for multiyear agreements.(2)
Encouraging suppliers to develop higher levels of service and support.(3)
Financial risk, including supplier’s financial stability.(4)
The supplier’s prior record of performance.(5)
Reassignment of licenses within the contract term.(6)
A cancellation clause to protect the state’s interests.(f)
Acquisitions shall be accomplished in accordance with this chapter.
Source:
Section 12112.1, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PCC§ionNum=12112.1. (updated Jul. 13, 2026; accessed Jul. 27, 2026).
