(a) Notwithstanding any other provision of this chapter to the contrary, no contract for correctional services as defined in § 41-24-102(2)(F), shall be entered into unless the following requirements are met:

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Terms Used In Tennessee Code 41-24-107

  • Commissioner: means the commissioner of correction. See Tennessee Code 41-24-102
  • Contract: A legal written agreement that becomes binding when signed.
  • contractor: means any entity entering a contractual agreement with the commissioner to provide correctional services to inmates under the custody of the department. See Tennessee Code 41-24-102
  • Correctional services: means the following functions, services and activities, when provided within a prison or otherwise:
    (A) Education, training and jobs programs. See Tennessee Code 41-24-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(1) The contractor provides audited financial statements for the previous five (5) years or for each of the years the contractor has been in operation, if fewer than five (5) years, and provides other financial information as requested; and
(2) The contractor provides an adequate plan of insurance, specifically including insurance for civil rights claims, as determined by an independent risk management or actuarial firm with demonstrated experience in public liability for state governments. The firm shall be selected by the commissioner of commerce and insurance with the concurrence of the board of claims. In determining the adequacy of the plan, the firm shall determine whether:

(A) The insurance is adequate to protect the state from any and all actions by a third party against the contractor or the state as a result of the contract;
(B) The insurance is adequate to protect the state against any and all claims arising as a result of any occurrence during the term of the contract; that is, the insurance is adequate on an occurrence basis, not on a claims-made basis;
(C) The insurance is adequate to assure the contractor’s ability to fulfill its contract with the state in all respects and to assure that the contractor is not limited in this ability because of financial liability that results from judgments; and
(D) The insurance is adequate to satisfy such other requirements specified by the independent risk management or actuarial firm.
(b) The sovereign immunity of the state shall not apply to the contractor. Neither the contractor nor the insurer of the contractor may plead the defense of sovereign immunity in any action arising out of the performance of the contract.
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