No. 41534 (Amendment): Rule R33-1. Utah Procurement Rule, General Procurement Provisions

(Amendment)

DAR File No.: 41534
Filed: 04/27/2017 03:47:10 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose for the changes to this rule is to clarify the language of the rule and to bring the rule into compliance with statutory changes made by H.B. 398 which was enacted during the 2017 General Session.

Summary of the rule or change:

The changes to this rule include correcting the use of the term "responsible", the addition of definitions of the terms "bias", "Evaluation Criteria", "Objective Criteria", and "Subjective Criteria" which are required to comply with the amendments to the Utah Procurement Code, renumbering to accommodate the additions, the correction of minor grammatical and typographical errors, and the addition of Section R33-1-2.5, which clarifies the authority of the Chief Procurement Officer or the head of a procurement unit with independent procurement authority and provides them guidance in decision making.

Statutory or constitutional authorization for this rule:

• Title 63G, Chapter 6a

Anticipated cost or savings to:

the state budget:

There are no anticipated costs or savings to the state budget as a result of the changes to this rule. The changes are to clarify the language of the rule, to bring the rule into compliance with the statutory changes, and to correct minor grammatical errors.

local governments:

There are no anticipated costs or savings to local government as a result of the changes to this rule. The changes are to clarify the language of the rule, to bring the rule into compliance with the statutory changes, and to correct minor grammatical errors.

small businesses:

There are no anticipated costs or savings to small businesses as a result of the changes to this rule. The changes are to clarify the language of the rule, to bring the rule into compliance with the statutory changes, and to correct minor grammatical errors.

persons other than small businesses, businesses, or local governmental entities:

There are no anticipated costs or savings to persons other than small businesses, businesses, or local governments as a result of the changes to this rule. The changes are to clarify the language of the rule, to bring the rule into compliance with the statutory changes, and to correct minor grammatical errors.

Compliance costs for affected persons:

There are no anticipated costs to affected persons as a result of the changes to this rule. The changes are to clarify the language of the rule, to bring the rule into compliance with the statutory changes, and to correct minor grammatical errors.

Comments by the department head on the fiscal impact the rule may have on businesses:

I have reviewed the changes to this rule, and I believe that there is no potential for fiscal impact on businesses as a result of the changes to this rule. The changes are to clarify the language of the rule, to bring the rule into compliance with the statutory changes, and to correct minor grammatical errors.

Jared Gardner, Procurement Policy Board Chair

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Administrative Services
Purchasing and General Services
Room 3150 STATE OFFICE BLDG
450 N STATE ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Alan Bachman at the above address, by phone at 801-538-3105, by FAX at 801-538-3313, or by Internet E-mail at [e-mail]
• Kent Beers at the above address, by phone at 801-538-3143, by FAX at 801-538-3882, or by Internet E-mail at [e-mail]
• Jared Gardner at the above address, by phone at 385-646-4561, by FAX at , or by Internet E-mail at [e-mail]
• Simone Rudas at the above address, by phone at 801-538-3240, by FAX at , or by Internet E-mail at [e-mail]
• Fay Tan at the above address, by phone at 801-538-3524, by FAX at , or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2017

This rule may become effective on:

06/21/2017

Authorized by:

Kent Beers, Director

RULE TEXT

R33. Administrative Services, Purchasing and General Services.

R33-1. Utah Procurement Rules, General Procurement Provisions.

R33-1-1. Definitions.

(A) Terms used in the procurement rules are defined in Sections 63G-6a-103 and 104.

(B) In addition:

(1) "Actual Costs" means direct and indirect costs which have been incurred for services rendered, supplies delivered, or construction built, as distinguished from allowable costs.

(2) "Adequate Price" Competition means:

(a) when a minimum of two competitive bids, proposals, or quotes are received from [responsive bidders or offerors]responsible vendors that have submitted responsive solicitation responses.

(3) "Acquiring Agency" is a conducting procurement unit subject to Section 63F-1-205 acquiring new technology or technology as therein defined.

(4) "Bias" means:

(a) a predisposition or a preconceived opinion that prevents an individual from impartially performing any duty or responsibility set forth in Utah Code 63G-6a or other applicable law or rule; or

(b) a prejudice in favor of or against a thing, individual, or group that results in an action or treatment that a reasonable person would consider to be unfair or have the appearance of being unfair.

(5) "Bid Bond" is an insurance agreement, accompanied by a monetary commitment, by which a third party (the Surety) accepts liability and guarantees that the bidder will not withdraw the bid. The bidder will furnish bonds in the required amount and if the contract is awarded to the bonded bidder, the bidder will accept the contract as bid, or else the surety will pay a specific amount.

([5]6) "Bid Rigging" means agreement among potential competitors to manipulate the competitive bidding process, for example, by agreeing not to bid, to bid a specific price, to rotate bidding, or to give kickbacks.

([6]7) "Bid Security" means the deposit of cash, certified check, cashier's check, bank draft, money order, or bid bond submitted with a bid and serving to guarantee to the owner that the bidder, if awarded the contract, will execute such contract in accordance with the bidding requirements and the contract documents.

([7]8) "Brand Name or Equal Specification" means a specification which uses a brand name specification to describe the standard of quality, performance, and other characteristics being solicited, and which invites the submission of equivalent products.

([8]9) "Brand Name Specification" means a specification identifying one or more products by manufacturer name, product name, unique product identification number, product description, SKU or catalogue number.

([9]10) "Collusion" means when two or more persons act together to achieve a fraudulent or unlawful act. Collusion inhibits free and open competition in violation of law.

([10]11) "Cost Analysis" means the evaluation of cost data for the purpose of arriving at estimates of costs to be incurred, prices to be paid, costs to be reimbursed, or costs actually incurred.

([11]12) "Cost Data" means factual information concerning the cost of labor, material, overhead, and other cost elements which are expected to be incurred or which have been actually incurred by the contractor in performing the contract.

([12]13) "Cronyism" is an anticompetitive practice that may violate federal and state antitrust and procurement laws. Cronyism in government contracting is a form of favoritism where contracts are awarded on the basis of friendships, associations or political connections instead of fair and open competition.

(14) "Evaluation Criteria" means the objective or subjective criteria that will be used to evaluate a vendor's response to a solicitation.

([13]15) "Include, Includes, or Including" has the same meaning as Section 68-3-12(1)(f). When used in code or rule, "include," "includes," or "including" means that the items listed are not an exclusive list, unless the word "only" or similar language is used to expressly indicate that the list is an exclusive list.

([14]16) "Mandatory Requirement" means a condition set out in the specifications/statement of work that must be met without exception.

([15]17) "Minor Irregularity" is a variation from the solicitation that does not affect the price of the bid, offer, or contract or does not give a bidder/offeror an advantage or benefit not shared by other bidders/offerors, or does not adversely impact the interests of the procurement unit.

([16]18) "New Technology" means any invention, discovery, improvement, or innovation, that was not available to the acquiring agency on the effective date of the contract, whether or not patentable, including, but not limited to, new processes, emerging technology, machines, and improvements to, or new applications of, existing processes, machines, manufactures and software. Also included are new computer programs, and improvements to, or new applications of, existing computer programs, whether or not copyrightable and any new process, machine, including software, and improvements to, or new applications of, existing processes, machines, manufactures and software.

(19)(a) "Objective Criteria" means the quantifiable requirements, standards, and specifications set forth in a solicitation by which solicitation responses from vendors will be evaluated and scored by evaluators based on the measurable and verifiable facts, evidence, and documentation provided in each vendor's solicitation response.

(b) Objective criteria is not evaluated and scored based on the personal judgement, interpretation, or opinion of evaluators. Objective criteria is evaluated and scored strictly on the observable, verifiable, and measurable facts, evidence, and documentation provided in each vendor's solicitation response.

(c) Examples of objective criteria that may be included in a solicitation:

(i) Vendors must document that they have a minimum of five years of experience on similar projects;

(ii) Vendors must have three licensed technicians on the project; and

(iii) Vendors must certify that they have an "A" rating from an accredited rating agency.

([17]20) "Participating Addendum" means an agreement issued in conjunction with a Cooperative Contract that authorizes a public entity to use the Cooperative Contract.

([18]21) "Payment Bond" is a bond that guarantees payment for labor and materials expended on the contract.

([19]22) "Person" means:

(a) an individual;

(b) an association;

(c) an institution;

(d) a corporation;

(e) a company;

(f) a trust;

(g) a limited liability company;

(h) a partnership;

(i) a political subdivision;

(j) a government office, department, division, bureau, or other body of government; and

(k) any other organization or entity.

([20]23) "Price Analysis" means the evaluation of price data without analysis of the separate cost components and profit.

([21]24) "Price Data" means factual information concerning prices for procurement items.

([22]25) "Reasonable Person Standard" means an objective test to determine if a reasonably prudent person who exercises an average degree of care, skill, and judgment would be justified in drawing the same conclusions under the same circumstances or having knowledge of the same facts.

([23]26) "Section and Subsection" refers to, as applicable, the Utah Code and the Administrative Rule.

([24]27) "Service" means labor, effort, or work to produce a result that is beneficial to a procurement unit and includes a:

(a) Professional service;

(b) Management and operation service;

(c) Consulting service;

(d) Advertising or promotional service;

(e) Concession service;

(f) Vending service;

(g) Management and operation service;

(h) Promotional service;

(i) Banking service;

(j) Credit card service;

(k) Electronic benefit transfer (EBT) card service; or

(l) Women, infants, and children (WIC) card service.

(28)(a) "Subjective Criteria" means the open-ended requirements, standards, and specifications set forth in a solicitation by which solicitation responses from vendors will be evaluated and scored by evaluators based on the personal judgement, interpretations, and opinions of the evaluators after reviewing and analyzing the information presented in each vendor's solicitation response.

(b) Subjective criteria is not evaluated and scored strictly on the observable, verifiable, and measurable facts, evidence and documentation provided in each vendor's solicitation response. Subjective criteria is also evaluated and scored based on the personal judgement, interpretation, and opinion of the evaluators after reviewing and analyzing the information presented in each vendor's solicitation response.

(c) Examples of subjective criteria that may be included in a solicitation:

(i) Vendors must describe how they will manage the project to meet the deadline;

(ii) Vendors must demonstrate that they have the knowledge, skills, and ability to accomplish the scope of work; and

(iii) Vendors must explain how their product complies with the specifications.

([25]29) "Surety bond" (performance bond) means a promise to pay one the oblige (owner) a certain amount if the principal (contractor) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the oblige (owner) against losses resulting from the principal's failure to meet the obligation. In the event that the obligations are not met, the oblige (owner), will recover its losses via the bond.

([ 26 ] 30 ) "Steering a Contract to a Favored Vendor" is defined as a person involved in the procurement process, including any phase of the procurement process, who inappropriately acts with bias or prejudice in violation of the law to favor one vendor over another vendor(s) in awarding a government contract.

(a) Steering a contract to a favored vendor includes:

(i) Taking part in collusion or manipulation of the procurement process;

(ii) Accepting any form of illegal gratuity, bribe or kickback paid by a vendor in exchange for a contract award;

(iii) Awarding a contract without engaging in a standard procurement process to a vendor without proper justification;

(iv) Involvement in a bid rigging scheme;

(v) Writing specifications that are overly restrictive, beyond the reasonable needs of the procurement unit, or in a way that gives an unfair advantage to a particular vendor without proper justification;

(vi) Intentionally dividing a purchase to avoid engaging in a standard competitive procurement process as set forth in Section 63G-6a-506(8);

(vii) Leaking bid, proposal, or other information to a particular vendor that is prejudicial to other vendors;

(viii) Improperly avoiding engaging in a standard procurement process in order to extend the duration of a vendor's existing contract through means of a contract extension; or

(ix) Participating in the procurement process while having a financial conflict of interest as set forth in Section R33-24-105.

([ 27 ]31 ) "Technology" means any type of technology defined in Section 63F-1-102(8).

R33-1-2. Applicability of Rules.

(1) Title R33 shall apply to:

(a) A procurement unit for which the Utah State Procurement Policy Board is identified in Section 63G-6a-103[(3)] as the applicable rulemaking authority, except to the extent the procurement unit has adopted its own administrative rules as authorized under Section 63G-6a-103(3); and

(b) A procurement unit with independent procurement authority or a procurement unit for which the Utah State Procurement Policy Board is not identified in Section 63G-6a-103[(3)] as the applicable rulemaking authority, and the procurement unit has adopted Title R33 or[, to the extent,] a portion of Title R33 by rule, ordinance, policy, or other authorized means.

R33-1-2.5. Use of Similar Laws and Rules to Establish Precedent or Extrapolate Legal Intent.

When making a determination and a specific law or rule pertaining to the issue does not exist, the chief procurement officer or head of a procurement unit with independent procurement authority may refer to other applicable laws that are similar in nature to the issue to establish a precedent or extrapolation of legal intent to assist in making a determination based on the reasonable person standard set forth in R33-1-1.

R33-1-3. Determinations by Chief Procurement Officer or Head of a Procurement Unit with Independent Procurement Authority.

(1) Unless specifically stated otherwise, all determinations under Utah Procurement Code and Title R33 shall be made by the chief procurement officer or head of a procurement unit with independent procurement authority.

(2) Determinations by the chief procurement officer or head of a procurement unit with independent procurement authority shall be made:

(a) In accordance with the provisions set forth in Sections 63G-6a-106 and 303 and other rules and laws if applicable; or

(b) By applying the reasonable person standard to determine:

(i) If the actions of a person involved in the procurement process would cause a reasonable person to conclude that the person has acted in violation of the Utah Procurement Code or Title R33;

(ii) If the circumstances surrounding a procurement would cause a reasonable person to conclude that a violation of the Utah Procurement Code or Title R33 has occurred; or

(iii) If the evidence presented would cause a reasonable person to conclude that certain facts associated with a procurement are true.

R33-1-4. Competitive Procurement Required for Expenditure of Public Funds or Use of Public Property or Other Public Assets to Acquire a Procurement Item Unless Exception is Authorized.

(1) Unless the chief procurement officer or head of a procurement unit with independent procurement authority issues a written exception in accordance with provisions set forth in the Utah Procurement Code and applicable Rules documenting why a competitive procurement process is not required and why it is in the best interest of the procurement unit to award a contract without engaging in a standard procurement process, a procurement unit shall conduct a standard procurement process whenever:

(a) Public funds are expended or used to acquire a procurement item; or

(b) A procurement unit's property, name, influence, assets, resources, programs, or other things of value is used as consideration in the formation of a contract for a procurement item.

R33-1-12. Mandatory Minimum Requirements in a Solicitation.

(1) Mandatory minimum requirements may be used in a solicitation to assist the conducting procurement unit in identifying the most qualified persons responding to a solicitation and to limit the number of persons eligible to move forward to subsequent stages in the solicitation or evaluation process. Examples of mandatory minimum requirements include:

(a) Ability to meet delivery deadlines;

(b) Qualifications;

(c) Certifications;

(d) Licensing;

(e) Experience;

(f) Compliance with State or Federal regulations;

(g) Type of services provided; or

(i) Availability of product, equipment, supplies, or services.

KEY: government purchasing, Utah procurement rules, general procurement provisions, definitions

Date of Enactment or Last Substantive Amendment: [August 22, 2016]2017

Notice of Continuation: July 8, 2014

Authorizing, and Implemented or Interpreted Law: 63G-6a

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