No. 40559 (Amendment): Rule R33-1. Utah Procurement Rules, "General Procurement Provisions," Definitions

(Amendment)

DAR File No.: 40559
Filed: 06/30/2016 01:57:55 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The reason for the changes to this rule are to comply with Title 63G, Chapter 6a, and to provide clarification regarding the definitions and applicability of the Utah Procurement Rules.

Summary of the rule or change:

The changes to the rule included adding, deleting, and clarifying the definitions of the Utah Procurement Rules. Sections R33-1-2, R33-1-3, R33-1-4, and R33-1-12 were also added. Those sections address the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

State 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. The rule simply provides definitions for the Utah Procurement rules, and addresses the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

local governments:

There are no anticipated costs or savings to local government. The rule simply provides definitions for the Utah Procurement rules, and addresses the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

small businesses:

There are no anticipated costs or savings to small businesses. The rule simply provides definitions for the Utah Procurement rules, and addresses the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

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

There are no anticipated costs or savings to persons other than small businesses, or local government entities. The rule simply provides definitions for the Utah Procurement rules, and addresses the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

Compliance costs for affected persons:

There are no anticipated compliance costs for affected persons. The rule simply provides definitions for the Utah Procurement rules, and addresses the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

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

There are no anticipated fiscal impacts that the rule may have on businesses. The rule simply provides definitions for the Utah Procurement rules and addresses the applicability of rules, determinations by the Chief Procurement Officer or Head of a Procurement Unit with independent procurement authority, 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, and mandatory minimum requirements in a solicitation.

Kimberly Hood, Executive Director

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:

• Kenneth Hansen at the above address, by phone at 801-538-3777, by FAX at 801-538-3844, or by Internet E-mail at [e-mail]
• 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]

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:

08/15/2016

This rule may become effective on:

08/22/2016

Authorized by:

Jared Gardner, Chair, Procurement Policy Board

RULE TEXT

R33. Administrative Services, Purchasing and General Services.

R33-1. Utah Procurement Rules, ["]General Procurement Provisions[," Definitions].

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.

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

(4) "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) "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) "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) "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) "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) "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) "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) "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) "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.

[(13) "Favored vendor" means, as it relates to this administrative rule, a situation wherein a procurement officer, evaluation committee member, contract administrator, or public employee unfairly, by means of deceit or in violation of law, favor one vendor over another vendor(s) in the process of awarding a public contract. Examples of ways in which public contracts are improperly steered to a "favored vendor" include, but are not limited to:

(a) Collusion or manipulation of the procurement to steer a contract award to a particular vendor;

(b) Illegal bribes or kickbacks paid by a vendor in exchange for a contract award;

(c) Unjustified sole source contract awards to a vendor;

(d) Bid rigging schemes;

(e) Writing specifications that are overly restrictive or in a way that gives an unfair advantage to a particular vendor;

(f) Improperly splitting purchases to avoid the standard competitive procurement process;

(g) Leaking bid or proposal information to a particular vendor at the exclusion of other vendors; or

(h) Not following established policies and procedures when approving changes orders.]

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

(15) "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) "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.

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

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

(19) "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) any other organization or entity.

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

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

(22) "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.

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

(24) "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.

[(22)](25) "S urety 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) "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.

[(23)](27) "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.

R33-1-3 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: [January 28, 2015]2016

Notice of Continuation: July 8, 2014

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

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