No. 41545 (Amendment): Rule R33-9. Cancellations, Rejections, and Debarment

(Amendment)

DAR File No.: 41545
Filed: 04/27/2017 03:50:51 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

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

Summary of the rule or change:

The changes to this rule include the updating of terms to be consistent with changes to the Code; the deletion of Section R33-9-203 which is now unnecessary due to changes to the Code; and the addition of Section R33-9-105 which was created to clarify changes to the Code; and to clarify the process for cancelling contracts, as well as to comply with code changes.

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 regarding processes or are language clarifications.

local governments:

There are no anticipated costs or savings to local government as a result of the changes to this rule. The changes are regarding processes or are language clarifications.

small businesses:

There are no anticipated costs or savings to small businesses as a result of the changes to this rule. The changes are regarding processes or are language clarifications.

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 governmental entities as a result of the changes to this rule. The changes are regarding processes or are language clarifications.

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 regarding processes or are language clarifications.

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 impacts on businesses because the changes are regarding processes or are language clarifications.

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.

R33-9. Cancellations, Rejections, and Debarment.

R33-9-101. [General Provisions]Cancellation Before Opening.

(1) [An Invitation for Bids, a Request for Proposals, or other solicitation ]A solicitation under a standard procurement process may be canceled prior to the deadline for receipt of[bids, proposals, or other submissions,] a solicitation response when it is in the best interests of the procurement unit as determined by the issuing procurement unit. In the event a solicitation is cancelled, the reasons for cancellation shall be made part of the procurement file and shall be available for public inspection and the procurement unit shall:

(a) re-solicit new [bids or proposals ]responses to a solicitation using a standard procurement process using the same or revised specifications; or,

(b) withdraw the requisition for the procurement item(s).

 

R33-9-102. Re-solicitation.

(1) In the event there is no [initial ]response to an initial solicitation, the chief procurement officer or head of a procurement unit with independent procurement authority may:

(a) contact the known supplier community to determine why there were no responses to the solicitation;

(b) research the potential vendor community; and,

(c) based upon the information in (a) and (b) require the conducting procurement unit to modify the solicitation documents.

(2) If the conducting procurement unit has modified the solicitation documents and after the re-issuance of a solicitation, there is still no competition or there is insufficient competition, the chief procurement officer or head of a procurement unit with independent procurement authority, shall:

(a) require the conducting procurement unit to further modify the procurement documents; or,

(b) cancel the requisition for the procurement item(s).

(3) An executive branch procurement unit may not reissue a canceled solicitation unless:

(a) The chief procurement officer determines that all of the issues identified in the written justification for canceling the solicitation set forth in R33-9-103 have been resolved.

 

R33-9-103. Cancellation Before Award But After Opening.

(1) [When it is determined before award but after opening that the specifications, scope of work or other requirements contained in the solicitation documents were not met by any bidder or offeror the solicitation shall be cancelled.

(2) ]A solicitation under a standard procurement process may be cancelled before award but after the opening [all bids or offers]of solicitation responses when the issuing procurement unit determines in writing that :[an infraction of code, rule, or policy has occurred or that there is other good cause including:]

(a) the scope of work or other requirements contained in the solicitation documents were not met by any person and all solicitation responses have been determined to be either nonresponsive or not responsible;

(b) an infraction of code, rule, or policy has occurred;

(c) inadequate, erroneous, or ambiguous specifications or requirements were cited in the solicitation;

([b]d) the specifications in the solicitation have been or must be revised;

([c]e) the procurement item(s) being solicited are no longer required;

([d]f) the solicitation did not provide for consideration of all factors of cost to the procurement unit, such as cost of transportation, warranties, service and maintenance;

([e]g) [bids or offers ]solicitation responses received indicate that the needs of the procurement unit can be satisfied by a less expensive procurement item differing from that in the solicitation;

([f]h) except as provided in Section 63G-6a-607, all otherwise acceptable [bids or offers]solicitation responses received are at unreasonable prices, or only one [bid or offer]solicitation response is received and the chief procurement officer or head of a procurement unit with independent procurement authority cannot determine the reasonableness of the bid price or cost proposal;

[(g) the responses to the solicitation were not independently arrived at in open competition, were collusive, or were submitted in bad faith; or,

(h) no responsive bid or offer has been received from a responsible bidder or offer;]

(i) other reasons specified in 63G-6a or Administrative Rule; or

(j) other circumstances deemed to constitute reasonable cause by the chief procurement officer or head of a procurement unit with independent procurement authority.

(3) Notwithstanding the above, a procurement unit may not cancel and reissue a solicitation:

(a) To steer a contract to a favored vendor; or

(b) Except as permitted under the protest and appeal provisions set forth in Utah Code 63G-6a, Parts 16 and 17, to make a vendor who was previously disqualified or rejected in a solicitation for the procurement item eligible for a contract award for the same procurement item.

 

R33-9-104. Alternative to Cancellation.

In the event administrative difficulties are encountered before award but after the deadline for [submissions]receipt of solicitation responses that may delay award beyond the bidders' , [or ]offerors' , or person's acceptance periods, the bidders , [or ]offerors , or persons should be requested, before expiration of their [bids or offers]solicitation responses, to extend in writing the acceptance period (with consent of sureties, if any) in order to avoid the need for cancellation.

 

R33-9-105. Award of a Contract After Cancellation for Cause or by Mutual Agreement.

(1) If a contract awarded through a standard procurement process is cancelled for cause or by mutual agreement within the first twelve months of the contract term and the procurement item is still needed by the procurement unit, the chief procurement officer or head of a procurement unit with independent procurement authority shall make a determination as to whether it is in the best interest of the procurement unit to award a contract for the balance of the scope of work, as set forth in the solicitation, to:

(a) the responsible vendor with a responsive solicitation response, meeting all minimum score thresholds set forth in the solicitation:

(i) having the next lowest bid in an invitation for bids procurement process and in accordance with the provisions set forth in Utah Code 63G-6a, Part 6 and Administrative Rule R33; or

(ii) with the next highest total score or other authorized method to award a contract in accordance with the provisions of:

(A) the request for proposals procurement process set forth in Utah Code 63G-6a, Part 7 and Administrative Rule R33;

(B) the approved vendor list procurement process set forth in Utah Code 63G-6a-507 and R33; or

(C) the design professional procurement process set forth in Utah Code 63G-6a, Part 15 and Administrative Rule R33; or

(b) issue a new solicitation for the procurement item.

(2) The chief procurement officer or head of a procurement unit with independent procurement authority shall consider the following when making a determination under Subsection (1):

(a) the fair and equitable treatment of all persons currently involved or that may be involved in the procurement process pertaining to the procurement item;

(b) the length of time that has passed between the initial procurement and cancellation of the awarded contract;

(c) the applicability and competitiveness of prices submitted in response to the initial procurement;

(d) the willingness of the vendor to maintain prices submitted in the vendor's initial response to the solicitation for the full scope of work or, as applicable, remaining proportionate scope of work;

(e) the vendor's availability and ability to perform the work;

(f) the existence of additional or new vendors who may be available and willing to submit responses to a new solicitation for the procurement item;

(g) costs and time delays to the procurement unit associated with conducting a new procurement; and

(h) other applicable issues unique to the solicitation or procurement item.

(3) This rule may not be used:

(a) If a contract is cancelled by a procurement unit for convenience;

(b) To extend the contract beyond the contract period identified in the solicitation; or

(c) If a contract is cancelled after the first twelve months of the contract period.

 

R33-9-201. Rejection[s and Debarments] of a Solicitation Response.

An issuing procurement unit may reject any or all [bids, offers or other submissions]solicitation responses, in whole or in part, as may be specified in the solicitation, when it is in the best interest of the procurement unit. In the event of a rejection of any or all bids, offers or other submissions, in whole or in part, the reasons for rejection shall be made part of the procurement file and shall be available for public inspection.

 

R33-9-202. Conformity to Solicitation Requirements.

(1)(a) Any [bid or offer]solicitation response that fails to conform to the essential requirements of the solicitation shall be rejected.

(b) Any [bid or offer]solicitation response that does not conform to the applicable specifications shall be rejected unless the solicitation authorized the submission of alternate [bids or offers]solicitation responses and the procurement item(s) offered as alternates meet the requirements specified in the solicitation.

(c) Any [bid or offer]solicitation response that fails to conform to the delivery schedule or permissible alternates stated in the solicitation shall be rejected.

(2) A [bid or offer]solicitation response shall be rejected when the bidder or offeror imposes conditions or takes exceptions that would modify requirements or terms and conditions of the solicitation or limit the bidder or offeror's liability [to]for the procurement, since to allow the bidder or offeror to impose such conditions or take exceptions would be prejudicial to [other bidders or offerors]another person. For example, [bids or offers]solicitation responses shall be rejected in which the [bidder or offeror]person:

(a) for commodities, protects against future changes in conditions, such as increased costs, if total possible costs to the procurement unit cannot be determined;

(b) fails to state a price and indicates that price shall be the price in effect at time of delivery or states a price but qualifies it as being subject to price in effect at time of delivery;

(c) when not authorized by the solicitation, conditions or qualifies a bid by stipulating that it is to be considered only if, before date of award, the bidder or offeror receives (or does not receive) an award under a separate solicitation;

(d) requires that the procurement unit is to determine that the bidder or offeror's product meets applicable specifications; or

(e) limits rights of the State under any contract clause.

[(3) A bidder or offeror may be requested to delete objectionable conditions from a bid or offer provided doing so is not prejudicial to other bidders or offerors, or the conditions do not go to the substance, as distinguished from the form, of the bid. A condition goes to the substance of a bid or offer where it affects price, quantity, quality, or delivery of the procurement item(s) offered.]

 

[R33-9-203. Unreasonable or Unbalanced Pricing.

(1)(a) Any bid or offer may be rejected if the chief procurement officer or head of a procurement unit with independent procurement authority determines in writing that it is unreasonable as to price. Unreasonableness of price includes not only the total price of the bid or offer, but the prices for individual line items as well.

(b) Any bid or offer may be rejected if the prices for any line items or subline items are materially unbalanced. Unbalanced pricing may increase performance risk and could result in payment of unreasonably high prices. Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more line items is significantly over or understated as indicated by the application of cost or price analysis techniques. The greatest risks associated with unbalanced pricing occur when:

(i) startup work, mobilization, procurement item sample production or testing are separate line items;

(ii) base quantities and option quantities are separate line items; or

(iii) The evaluated price is the aggregate of estimated quantities to be ordered under separate line items of an indefinite-delivery contract.

(c) All bids or offers with separately priced line items or subline items shall be analyzed to determine if the prices are unbalanced. If cost or price analysis techniques indicate that an offer is unbalanced, the procurement unit shall:

(i) consider the risks to the procurement unit associated with the unbalanced pricing in determining the competitive range and in making the source selection decision; and

(ii) consider whether award of the contract will result in paying unreasonably high prices for contract performance.

(d) A bid or offer may be rejected if the procurement unit and the chief procurement officer or head of a procurement unit with independent procurement authority determine that the lack of balance poses an unacceptable risk to the State.]

 

R33-9-204. Rejection for Nonresponsibility or Nonresponsiveness.

(1) [Subject to Section 63G-6a-903, the chief procurement officer or head of a procurement unit with independent procurement authority shall reject a bid or offer from a bidder or offeror determined to be nonresponsible. A responsible bidder or offeror is defined in Section 63G-6a-103(42).]The chief procurement officer or head of a procurement unit with independent procurement authority:

(a) Shall, subject to Section 63G-6a-903 and, as applicable, Section 63G-6a-604, reject a bid if the bid is determined not responsive or the bid is submitted by a bidder determined to be not responsible;

(b) May reject a solicitation response to any other type of standard procurement process if the solicitation response is determined to be not responsive or the solicitation response is submitted by a person determined to be not responsible; and

(c) Subsections (a) and (b) shall be conducted in accordance with the definitions of Responsible and Responsive set forth in Section 63G-6a-103.

(2) [In accordance with Section 63G-6a-604(3) the chief procurement officer or head of a procurement unit with independent procurement authority may not accept a bid that is not responsive. Responsiveness is defined in Section 63G-6a-103(43).

(3) ]When a bid security is required and a bidder fails to furnish the security in accordance with the requirements of the invitation for bids, the bid shall be rejected.

([4]3) [The originals of a]All [rejected bids, offers, or other submissions, and all ]written findings with respect to such rejections[,] shall be made part of the procurement file and available for public inspection.

 

R33-9-301. Rejection for Suspension/Debarment.

[Bids, offers, or other submissions,]Solicitation responses received from any person that is suspended, debarred, or otherwise ineligible as of the [due date]deadline for receipt of [bids, proposals, or other submissions]solicitation responses shall be rejected.

 

KEY: government purchasing, cancellations, rejections, debarment

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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