Nebraska Attorney General Opinion 26-002 — Lawfulness of Transition Periods in State Contracts

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NEBRASKA DEPARTMENT OF JUSTICE

Opinion No. 26-002— February 6, 2026
OPINION FOR THE STATE AUDITOR

Lawfulness of Transition Periods in
State Contracts

Summary: Neb. Rev. Stat. § 73-812(2) prohibits state agencies from
amending contracts to extend their duration for a term longer than
half of the original contract period. A contractual “transition period,”
wherein a contractor continues to provide services after the
expiration of a contract to help the State transition to a new
contract, does not violate § 73-812. Such period, if exercised in good
faith, is neither an amendment nor an extension to the contract.

You requested our opinion “regarding the proper
interpretation of” Neb. Rev. Stat. § 73-812(2). Specifically,
your request concerned the application of that statute to a
potential “transition period” under the contract between
the State Records Board (the “Board”) and Nebraska
Interactive, LLC (the “Interactive Contract” or the
“Contract”) for the management and administration of the
State’s online information portal (the “Portal”).

i.

At the outset, I write to explain the issuance of this
opinion in the first instance, as it is a request from a single
member of a multiple-member board. As State Auditor, you
are statutorily designated as a member of the Board. Neb.
Rev. Stat. § 84-1204(2)(c). The other members of the Board
are: (1) the Secretary of State, designated as the State
Records Administrator; (2) the Governor or his or her
designee; (3) the Attorney General or his or her designee;
(4) the State Treasurer or his or her designee; (5) the

DEPT. OF JUSTICE
STATE OF NEBRASKA

OFFICIAL

FEB 06 207
Mikes Hi ley

MIGHAEL T. HILGERS

Op. Att’y Gen. No. 26-002 (Feb. 6, 2026)

Director of Administrative Services or his or her designee;
(6) three representatives appointed by the Governor to
represent banking, insurance, and law groups; and (7)
three representatives appointed by the Governor
representing libraries, the general public, and professional
members of the Nebraska news media. Neb. Rev. Stat. §§
84-1208, 84-1204(2).

In the case of multi-member boards or commissions,
our policy has been—as a general matter—to issue
opinions only if formal action is taken by the body to
request our opinion. See Op. Att’y Gen. No. 23-010 (Dec. 15,
2023). With respect to such boards or commissions, we
represent and advise the body, not each individual
member. Thus, everything else being equal, we usually do
not provide an opinion based on the request of an
individual member.

Everything, however, is not equal. The Attorney
General is required to give “his or her opinion in writing
upon all questions of law submitted to him or her by the
Governor, head of any executive department, Secretary of
State, State Treasurer, Auditor of Public Accounts, Board
of Educational Lands and Funds, State Department of
Education, Public Service Commission, or the Legislature
.... Neb. Rev. Stat. § 84-205(4). We issue opinions to
executive branch officials and agencies “upon questions of
law which arise ‘in the discharge of their duties.” See Op.
Att’y Gen. No. 137 at 1 (Dec. 24, 1985) (quoting Follmer v.
State, 94 Neb. 217 (1913)) (explaining this requirement as
applied to members of the Legislature). And where, as
here, a request emanates from an office created under our
Constitution and is related to the office’s constitutional
duties, we find we have authority to issue a formal opinion.
See, e.g., Op. Att'y Gen. No. 15-010 (Aug. 10, 2015) Gssuing
a formal opinion to the Treasurer respecting the authority
of the Records Board); Op. Att’y Gen. No. 09-003 (Jan. 27,
2009) (same). At a minimum, we conclude that your

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Lawfulness of Transition Periods in State Contracts

request relates to your duties as State Auditor. See
generally Op. Atty Gen. No. 93-012 (Mar. 4, 1993)
(explaining the inherent constitutional duties of the State
Auditor).

II.

Having addressed the propriety of issuing this
written opinion, we now turn to the question itself. Your
request inquired about the proper interpretation and
application of Neb. Rev. Stat. § 73-812(2), which is part of
the State Procurement Act. Specifically, you asked:

Would exercising a contract extension or a
renewal option, or both, provided in the
original agreement preclude ... subsequent
utilization of a “transition period” also
authorized by the original agreement? ...
The same question is posed regarding the
propriety of exercising the “transition
period” provision after a contract renewal,
whether alone or in conjunction with a
consecutive or successive extension.

We analyze only the legal question presented to us. This
opinion does not address the policy question of whether the
Board should exercise a contract extension or transition
period under the Interactive Contract or any other
contract.

We find that Neb. Rev. Stat. § 73-812(2) does not
preclude the Board from exercising a contractual
“transition period,” including after a contract has already
been extended. Neb. Rev. Stat. § 73-812(2) provides that no
state “contract shall be amended to extend the duration of
the contract for a period of more than fifty percent of the
initial contract term.” The same section clarifies that it
“does not prohibit the exercise of any renewal option

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Op. Att’y Gen. No. 26-002 (Feb. 6, 2026)

expressly provided in the original contract.” Id. The
Department of Administrative Services has explained the
difference between a “renewal” and an “extension”: a
“renewal” “must be specifically named in the original
solicitation or contract,” where “extensions’ are available
to all State of Nebraska Contracts,” regardless of whether
contemplated by the original terms of the contract. State
Purchasing Bureau Policy 24-04, DAS (July 18, 2024),
https://perma.cc/W6X8-GPCP.

A “transition period” is not mentioned in Nebraska
statute but is a creature of contract. Under the Interactive
Contract, the Board can require Nebraska Interactive to
continue operating the Portal for up to 30 months after
expiration of the Contract. The purpose is to ensure “the
Portal remain[s] fully operational during the transition to
a Subsequent Contractor upon termination or expiration”
and to facilitate an “orderly transition of services.”
Interactive Contract, § R at 36.

For at least two reasons, we find that the Board’s
use of the transition period (even after an extension) would
not violate Neb. Rev. Stat. § 73-812(2). First, the transition
period is contemplated by the terms of the Contract. Like
a renewal option, the transition clause was hammered out
during the bid and negotiation process. The “transition”
would not extend performance under the Contract beyond
what was bid and negotiated; thus, it is not an
“amend[ment] to extend” the Contract under Neb. Rev.
Stat. § 73-812(2). Second, the transition period occurs after
the contract “terminatles] or expir[es],” as opposed to an
extension which delays the termination or expiration of the
Contract. Courts have recognized that “phase-in, phase-out
services” do not “extend” contracts beyond termination, nor
do they cause a contract’s duration to extend beyond legal
limits. See Arko Exec. Serus., Inc. v. United States, 553 F.3d
1375, 1380-81 (Fed. Cir. 2009); Comerica Bank v. Glob.
Payments Direct, Inc., No. CIV.A. 9707-CB, 2014 WL

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Lawfulness of Transition Periods in State Contracts

3567610, at *11 (Del. Ch. July 21, 2014). Indeed, federal
regulations expressly permit a transitional period for
federal contracts. See 48 C.F.R. § 37.111. For good reason.
When a government contract terminates or expires, it
could harm the government if contractor services had to
immediately shut down. Here, the State could lose access
to the Portal. Thus, a transition period (exercised in good
faith) is not an attempt to extend a contract beyond
statutory limits, but prudent planning to ensure continuity
of valuable government services from one contract to the
next.

The analysis does not change if the “transition
period” is utilized after a contract renewal. As mentioned,
the transition period is triggered only after expiration or
termination of the Contract. If the Contract expires or
terminates after a renewal, we see no reason why a
“transition period” would transform into an “extension” of
the Contract. Whether after a renewal, an extension, or
both, a negotiated period of transition is not an
“amend[ment] to extend” a contract and does not trigger
until after expiration or termination of the contract.

To be sure, merely labeling something as a
“transition period” does not free the State from § 73-
812(2)’s requirements. The State Procurement Act
provides an anti-loophole provision: “State agencies shall
not structure contracts to avoid any of the requirements of
the State Procurement Act.” Neb. Rev. Stat. § 73-812(3).
So, for example, if an agency agreed mid-contract to an
indefinite “transition period” that allowed the parties to
extend the contract in perpetuity, that would likely be an
unlawful work-around of the duration limits under § 78-
812(2). But where, as under the Interactive Contract, the
“transition period” is a good-faith transition from one
contract to the next, we do not think the period violates
§ 73-812(2).

Op. Att’y Gen. No. 26-002 (Feb. 6, 2026)
IIT.

A contractual “transition period’—bargained for
and exercised in good faith—is not an amendment to

extend the contract. Thus, it does not violate Neb. Rev.
Stat. § 73-812(2).

MICHAEL T. HILGERS
Attorney General of Nebraska