This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) The State Employees' Charitable Giving Campaign (SECGC) may procure supplies and services costing $25,000 or less using a purchase technique that best meets the campaign's needs.

In this chapter, words and terms shall have the same meaning as defined in Title 18, chapter 4, MCA, and, unless the context clearly requires otherwise or a different meaning is prescribed for a particular rule, the following definitions apply:

(1) "Agency" means an agency, bureau, commission, committee, council, department, governmental corporation, institution, legislative body, or other entity, instrumentality, or official of the executive, legislative, or judicial branch of state government, including the Board of Regents and the Montana University System.

(2) "Advantageous" means a judgmental assessment of what is in the state's best interest.

(3) "Alternate bid" means a bid submitted in knowing variance from the specifications, terms, conditions, or provisions of the solicitation. Such a bid is acceptable only when the variance is deemed immaterial.

(4) "Alternate procurement method" means a method of procuring supplies or services in a manner not specifically described in law, but instead authorized by the department under 18-4-302, MCA, following the requirements of 18-4-122, MCA.

(5) "Bid" means the executed document in response to an invitation for bid. "Bidder" means a person submitting a bid.

(6) "Brand name specification" means a specification that cites a brand name, model number, or some other designation that identifies a specific product as an example of the desired characteristics and/or quality of merchandise.

(7) "Commodity code" means a number designated to include a specific type of supply or service. The commodity codes provide a means for vendors registered with State Procurement Bureau to easily define the supplies and/or services they offer and for agencies to target specific vendors when issuing solicitations.

(8) "Controlled items" means those supplies and services an agency must purchase through the division, unless exempted via an agency delegation agreement. These include items from the "requisition time schedule," supplies and services available through exclusive term contracts, printing, and new vehicles.

(9) "Days" mean calendar days. In computing any period of time prescribed or allowed by these rules, the day of the event after which the designated period of time begins to run is not to be included, but the last day of the period so computed is to be included, unless it is a Saturday, Sunday, or a legal holiday, in which event the period runs until the end of the next business day.

(10) "Debar" or "debarment" means an action taken or decision made by the department, other than temporary determinations of nonresponsibility or suspension, that prohibits a vendor from proposing, bidding on, or receiving state contracts for a specific period of time or until certain conditions have been met.

(11) "Department" means the Department of Administration.

(12) "Descriptive literature" means information available in the ordinary course of business which shows the characteristics, construction, or operations of an item and enables the state to consider whether the item meets its needs.

(13) "Director" means the director of the Department of Administration.

(14) "Division" means the State Financial Services Division of the Department of Administration.

(15) "Exclusive contract" means that state agencies must obtain the specified supply or service from the contract holder(s), unless the contract allows otherwise.

(16) "Exigency" means a purchase made without following normal purchasing procedures due to a sudden and unexpected happening or unforeseen occurrence or condition which requires immediate action.

(17) "FOB" or "f.o.b." means free on board, a term used in conjunction with an identified physical location to determine:

(a) the responsibility and basis for payment of freight charges; and

(b) the point at which title for the shipment passes from seller to buyer. Deliveries are usually "FOB destination" which means a shipment is to be delivered to the destination designated by the buyers.

(18) "Hardware maintenance" means repairs, upgrades, or installation of hardware required for the hardware to continue to operate as originally specified in the contract or purchase order.

(19) "Highest scoring offeror" means the responsive and responsible offeror having the highest score at the completion of the procurement process for a request for proposals.

(20) "Lease-purchase agreement" means a lease contract containing a purchase option in which the lessee's periodic payments or parts thereof may be applied to serve both as the rental obligation and as installments for acquiring ownership of the property upon lessee exercising the purchasing option; a conditional sales contract.

(21) "Minor enhancements" means routine operations and maintenance support activities that include corrective, adaptive, and perfective changes, and that do not introduce new major functional capabilities.

(22) "Noncontrolled items" means all supplies and services that do not fall under the definition of "controlled items."

(23) "Nonexclusive contract" means that state agencies are not required to purchase this supply or service from the contract holder(s) and may obtain the necessary supply or service from a different source following the requirements of Title 18, MCA, and their agency procurement delegation agreement.

(24) "Offer" means proposal. "Offeror" means a person submitting a proposal when a procurement is made by a request for proposal process.

(25) "Office supply" means a consumable product or supply used on a recurring basis in general business and office operations. An office supply under this definition includes, but is not limited to, fax and copy paper, writing tools, erasers, toner, fasteners (paper clips, rubber bands, binding clips, etc.), calculators, staplers, adhesives (tape, glue, etc.), scissors, rulers, tape dispensers, pencil sharpeners, notepads and sticky notes, nonprinted envelopes, calendars and planners, rubber stamps, disposable batteries, clocks, portable shredders, desk accessories and organizational aids, data processing and storage media (CDs, USBs, etc.), minor computer peripherals (monitors, individual external hard drives, keyboards, etc.), document filing and organizers (binders, clipboards, dividers, file folders, file labels, storage boxes, etc.), bulletin boards, marker and chalk boards, office mats (chair, antifatigue, etc.), cleaning equipment and supplies, first aid supplies, individual hand sanitizer, dish soap, disposable gloves, coarse paper products, trash can liners, and disposable food service products. An office supply does not include office furniture, computer equipment (except as noted above), items available through State Print and Mail, facility and industrial supplies and tools, lab equipment, photocopiers, software, or food and beverage items.

(26) "Procurement" means acquisition with or without cost, buying, purchasing, renting, leasing, or otherwise acquiring any supplies or services. It includes all functions that pertain to the obtaining of any supply or service, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration. It does not include the acquiring of supplies or services by gift.

(27) "Purchase order" means a document used to formalize a purchase contract with a vendor.

(28) "Receiving" means inspecting the supply or service and checking it against the contract to ensure it is acceptable, complete, and complies with the contract terms.

(29) "Request for information" means a document used to informally solicit information about a market or type of available supply or service where there is not enough information readily available to write an adequate specification or work statement.

(30) "Requisition" means the document used to request that a contract be entered into for a specific need, and may include, but is not limited to, the description of the requested item, delivery schedule, transportation data, criteria for evaluation, suggested sources of supply, and information supplied for the making of any written determination required by Title 18, chapter 4, MCA, or these rules.

(31) "Requisition time schedule" means a schedule issued by the State Procurement Bureau each year which designates the dates by which certain categories of controlled items must be requested from the bureau.

(32) "Resident bidder" means a bidder that meets the requirements of 18-1-103, MCA.

(33) "Responsible bidder or offeror" means a person who has the capability in all respects to fully perform the contract requirements and the integrity and reliability that will ensure good faith performance.

(34) "Responsive bidder or offeror" means a person who has submitted a bid or offer that conforms in all material respects to the invitation for bids or request for proposals.

(35) "Restrictive specification" means specifications that unnecessarily limit competition by eliminating supplies and services that would be capable of satisfactorily meeting actual needs.

(36) "Software" means the collection of computer programs and related data that provide the instructions telling a computer what to do. Program software performs the function of the program it implements, either by directly providing instructions to the computer hardware or by serving as input to another piece of software.

(37) "Software maintenance" means patches, support, or upgrades and minor enhancements allowing the software to continue to perform its functional purposes as originally specified in the statement of work, contract, or other procurement agreements.

(38) "Solicitation" means an invitation for bid, a request for proposal, or any other document issued by the state for the purpose of soliciting bids or proposals to enter into a state contract.

(39) "Specifications" mean a detailed description of what the purchaser requires and what a bidder or offeror must offer to be considered for an award.

(40) "State Print and Mail" means the General Services Division bureau responsible for all public printing for state agencies, and handling and processing of state mail for the capitol complex.

(41) "State Procurement Bureau" means the division's bureau responsible for procuring or supervising the procurement of all supplies and services needed by the state, excluding those services procured by State Print and Mail.

(42) "Surplus Property Program" means the General Services Division program responsible for managing state and federal surplus property.

(43) "Surplus supplies" are supplies no longer needed by an agency for its use in the discharge of its duties and responsibilities, excluding books.

(44) "Suspension" means an action taken by the division that temporarily prohibits a vendor from proposing, bidding on, or receiving state contracts.

(45) "Term contract" means a contract in which supplies or services may be purchased through a list of prequalified vendors or at a predetermined unit price or discount for a specific period of time.

(46) "Total contract value" means the entire potential monetary worth of the project from beginning to completion, including the initial contract period and any options to renew.

(47) "Unit price" means the price of a selected unit of a supply or services; e.g., price per ton, foot, box.

(48) "Upgrade" means a replacement of hardware, software, or firmware with a newer version in order to bring the system up to date or to improve its characteristics.

(49) "Vendor" means a seller of supplies or services.

(50) "Vendors list" means a list maintained by the division listing the names and addresses of suppliers of various supplies and services from whom bids or proposals can be solicited. 

(1) The department is responsible for all procurements of all state supplies and services. All activities, including procedures, manuals, and forms, which govern such procurements will be prepared by or under the supervision of the department.

(2) The division will establish a vendors list, determine eligibility for residence preference of vendors for purchases made under Title 18, chapter 4, MCA, investigate complaints against vendors, and remove vendors from the state list as described in ARM 2.5.401, 2.5.402, and 2.5.407.

(3) The division shall process requisitions for agencies for items not delegated in accordance with ARM 2.5.302.

(4) Except as indicated in ARM 2.5.301, the division will identify and purchase all controlled items.

(5) The department is responsible for the review and approval of the following equipment or service procurements regardless of delegated authority:

(a) all printing-related equipment involving duplicating, printing, bindery, and graphic arts for state agencies within a ten-mile radius of the capitol area–approval by Print and Mail Services is required;

(b) information technology resources, including hardware, software, and associated services and infrastructure used to store or transmit information in any form, including voice, video, and electronic data–approval by the Information Technology Services Division is required, except as provided in 2-17-516, MCA;

(c) communications equipment and systems–approval by Information Technology Services Division is required; and

(d) mail equipment to be used within a ten-mile radius of the capitol area–approval by Print and Mail Services is required.

(6) The division delegates its procurement authority as follows:

(a) except for controlled items, or as specified in (5), authority is delegated to all agencies for the procurement of supplies and services with a total value of less than $10,000;

(b) authority to purchase supplies and services when the total contract value is expected to be $10,000 or more may be granted or revoked after consideration of the following factors:

(i) the expertise of the potential delegate in terms of procurement knowledge and any specialized knowledge pertinent to the authority to be delegated;

(ii) the past experience of the potential delegate in exercising similar authority;

(iii) the degree of economy and efficiency to be achieved in meeting the state's requirements if authority is delegated; and

(iv) the consistency of delegation under similar circumstances.

(c) delegation of $10,000 or more will be given through a written delegation agreement with the State Procurement Bureau. The written delegation shall specify:

(i) the activity or function authorized;

(ii) any limits or restrictions on the exercise of the delegated authority;

(iii) whether the authority may be further delegated; and

(iv) the duration of the delegation.

(7) The division will provide training to agencies on purchasing in accordance with delegated responsibilities.

(8) The division may perform reviews of agency purchasing procedures to ensure compliance with the delegation agreement, these rules, and Title 18, chapter 4, MCA.

(9) The department's Property and Supply Bureau will dispose of, or supervise the disposal of, all surplus supplies belonging to the state as provided in ARM 2.5.701 and 2.5.702.

(1) Agencies may exercise authority to purchase noncontrolled items with a total contract value of less than $10,000. Agencies may exercise delegated purchasing authority of $10,000 or more and for exigency purchases in accordance with written delegation agreements described in ARM 2.5.202, with the Montana Procurement Act, and with these rules.

(2) Delegation and competitive procedures are not necessary for goods and services listed in 18-4-132(3), MCA. Additional exempted purchases include:

(a) salaries;

(b) fees for those professions exempted by statute;

(c) travel and per diem;

(d) retirement and social security payments;

(e) freight;

(f) landfill charges;

(g) supplies or services whose prices are regulated by the Public Service Commission or other governmental authority;

(h) pastoral services;

(i) training;

(j) conference space rental and catering;

(k) fresh fruits and vegetables;

(l) fees for placing an advertisement in a publication or on radio, television, or other electronic media sources; fees for the development, design, and distribution of the advertisement are not included in this exception;

(m) educational instructors and guidance counselors for inmates under the supervision of the Department of Corrections; and

(n) books and periodicals.

(1) All agencies shall complete the division's requisition form when a state purchase order or contract is required from the division. The requisition must be signed or electronically approved by an authorized agency official, and it must be accompanied by specifications as described in ARM 2.5.501.

(2) Requisitions for printing must be forwarded to the Print and Mail Services Bureau.

(3) Requisitions for all supplies and services falling outside an agency's delegated authority must be forwarded to the State Procurement Bureau.

(4) Agencies must obtain written approval as required for equipment described in ARM 2.5.202. Written approval must accompany the requisition.

(5) Upon receipt of a requisition, the division will initiate and schedule the solicitation.

(6) The division may cancel a requisition if deemed appropriate for reasons such as, but not limited to, the following. The requisition:

(a) does not contain sufficient specifications;

(b) cannot be processed in a timely manner;

(c) has no evidence of approvals required in (4); or

(d) does not comply with all requirements of these rules.

(7) Requisitions for supplies and services to be purchased with funds from a given fiscal year must be submitted to the division by:

(a) April 1 of that fiscal year for a request for proposals; and

(b) May 1 of that fiscal year for an invitation for bids.

(1) Except for items purchased and warehoused by the department's Surplus Property Program, agencies are responsible for receiving supplies and services and documenting acceptance or rejection.

(2) Agencies shall comply with the provisions of the Contract Management policy regarding documentation of "significant contract complaints, disputes, and terminations." The department adopts and incorporates by reference the Contract Management policy effective November 25, 2015. The policy may be found on the Montana Operations Manual web site at https://montana.policytech.com/docview/?docid=692&public=true&fileonly=true.

(3) For contracts established by the division on behalf of an agency, the division shall investigate complaints and attempt to resolve the problem to the agency's satisfaction. The division shall notify the complaining agency of any action taken as a result of the complaint.

(4) The state of Montana reserves the right to assess liquidated damages for failing to comply with delivery requirements indicated in the bid or proposal. This sum may be deducted from vendor payment for failure to deliver when specified. Liquidated damages should not be punitive and should only be used where it is difficult to determine actual damages at the time of contracting.

(1) Prior to issuing a contract renewal, an agency must provide a written justification outlining the basis for renewal. Reasons illustrating justification for renewal may include, but are not limited to:

(a) acceptable or outstanding performance of contract specifications;

(b) cost-effectiveness of continuation of the contract; and/or

(c) the requirements of the contract remain significantly the same.

(a) the division, if the contract was established through the State Procurement Bureau; or

(b) the agency's contracting office, if the contract was established under the agency's delegated authority.

(2) This written notification shall be provided:

(a) not later than 30 days after the ending date of the contract; or

(b) if a warranty period that extends beyond the end of the contract term is specified in the contract, not later than 30 days after the ending date of the warranty.

(3) The required notification shall include, at a minimum, the following information:

(a) whether the contract has been successfully performed and, if a warranty is specified in the contract, that no claims are pending under the warranty; and

(b) whether the agency waives all rights and claims to the contract security.

(4) If the contract was not satisfactorily completed, and a claim against the performance security is being considered, timely notification of such a situation shall be made to:

(a) the division, if the contract was established through the State Procurement Bureau; or

(b) the agency's contracting office, if the contract was established under the agency's delegated authority.

(1) The State Financial Services Division maintains an online vendors list for all supply and service commodities. Names and addresses on the vendors list are available for public inspection; however, this list may not be used for private promotional, commercial, or marketing purposes as described in 2-6-1017, MCA.

(2) To be placed on the vendors list, a vendor must register with the division online at http://vendorresources.mt.gov/. Each vendor is responsible for keeping their information current, including selection of the commodity codes to identify the supplies or services the vendor provides. 

(1) The division has the authority to temporarily suspend a vendor from consideration for further contracts with the state if the division has probable cause to believe that the vendor has engaged in activities that could lead to debarment from contract eligibility. The causes for debarment include the following:

(a) submission of a false affidavit for Montana residency;

(b) vendor is not responsible or responsive as defined in 18-4-301, MCA, and ARM 2.5.201 and 2.5.407;

(c) deliberate failure, without good cause, to perform in accordance with the specifications or within the time limit provided in a contract;

(d) a recent record of failure to perform or of unsatisfactory performance in accordance with the terms of one or more contracts;

(e) failure to comply with the provisions of the Unemployment Insurance Law, Title 39, chapter 51, MCA;

(f) failure to comply with the provisions of the Workers' Compensation Act, Title 39, chapter 71, MCA; or

(g) any other cause that the division determines to be so serious and compelling as to affect responsibility as a state contractor, including debarment by another governmental entity.

(2) Debarment may apply to either a firm or an individual.

(a) In the case of a firm, it may be applied against any or all businesses in which a firm has involvement or over which it has ownership or control.

(b) In the case of an individual, debarment may be applied to and enforced against any and all businesses in which the individual has any level of interest, ownership, or control.

(3) If there is probable cause to believe that any of the situations in (1) exist, the division shall mail a notice of suspension to the affected vendor or individual. The notice must state that:

(a) the suspension is for the period it takes to complete an investigation into possible debarment;

(b) bids or proposals will not be accepted from the suspended vendor or contracts awarded to the suspended vendor during the period of suspension; and

(c) the suspension is effective upon the date of issuance of the notice of suspension and, unless the suspension is terminated by the division or a court, remains in effect for a period not to exceed 90 calendar days.

(4) If the division's investigation confirms a cause for debarment and the director agrees with the division's determination, a notice will be served upon the vendor by certified mail, return receipt requested. The notice will include:

(a) the pertinent facts supporting the alleged cause for debarment and the division's intent to remove the vendor from eligibility to contract with the state;

(b) notification of the vendor's right to a contested case hearing on the matter in accordance with the procedures set forth in Title 2, chapter 4, part 6, MCA; and

(c) the term of the debarment and to what extent affiliates are affected. The debarment will be for a specific period of time or until certain conditions are met, at the discretion of the division.

(5) A written request for hearing must be received by the director from the vendor within 20 calendar days after the date of the mailing of the notice of debarment. Failure to timely request a hearing will constitute a waiver by the vendor of the opportunity for a contested case hearing and appeal and will result in the director or director's designee entering an order supporting the vendor's debarment.

(6) Upon timely receipt of a written request for a contested case hearing, the director shall appoint a hearing examiner in accordance with the procedures set forth in Title 2, chapter 4, part 6, MCA, to hear evidence in the matter and come to a determination as to whether the facts support the decision to debar the vendor.

(7) The division shall maintain a list of debarred vendors on its web site at

This rule has been repealed.

(1) Any exceptions to the specifications on the part of the bidder or offeror must be clearly identified and communicated to the procurement officer consistent with the instructions listed within the solicitation. Exceptions may be rejected.

(2) Each item on which a bidder or offeror submits a quotation must be new and unused and of the latest model or manufacture unless otherwise specified by the state. It shall be equal in quality and performance characteristics to that indicated in the invitation for bid or request for proposal.

(3) The price for each item must be stated and clearly listed in the bid. Only one unit price may be shown for each item unless a specific provision for an optional figure is provided. The price of each item must be extended to show the total price for the quantity requested. In case of error in extension, the unit price prevails.

(4) Alternate bids may be accepted if the bidder is the lowest responsive bidder on its primary bid and the bids are clearly marked "primary" or "alternate."

(5) Item-by-item unit price bids must be submitted and will receive primary consideration for award. All-or-none bids may be submitted as alternatives and will be considered if in the best interest of the state.

(6) Unless stated otherwise in the solicitation, payment will be due 30 calendar days from:

(a) the receipt of a properly executed claim; or

(b) upon satisfactory receipt of the merchandise or service, whichever is later.

(7) Vendors may quote a cash discount based on early payment. Such discounts may not be considered; however, in determination of low bid or contract award, payment terms will remain as stated in (6) unless the bid or proposal provided otherwise.

(8) Vendors shall guarantee their bid price for 30 calendar days after a bid opening or 120 calendar days after a proposal opening, pending award unless otherwise provided for in the solicitation.

(9) Unless otherwise specified in the solicitation, all bids and proposals must show the delivered price FOB destination to the agency, including all transportation and handling charges.

(1) A blind person wishing to claim the vending facility preference provided in 18-5-502, MCA, must complete the determination form provided by the State Procurement Bureau. The form must be completed by an ophthalmologist, physician skilled in diseases of the eye, or a Department of Public Health and Human Services visual services counselor.

(2) A determination form shall be submitted with each individual bid. The determination form shall be valid for six months. At the end of the six-month period, a new determination form will be required or submitted with bids. A new determination form will be required for renewal of a contract if the contract renewal date exceeds six months from the completion date of the original determination form.

(1) All protests must be in writing and state in detail all of the protestor's objections and allegations of violations of the Montana Procurement Act. The complete protest must be submitted to the�State Financial�Services Division, P.O. Box 200135, Helena, MT 59620-0135, and to the agency that issued the solicitation, if different, no later than the close of business 14 calendar days after the execution of the contract in question.

(2) The department may exercise its discretion in deciding what is in the best interest of the state.

(3) Any agency which exercises delegated authority from the department to engage in purchasing activities is responsible for responding to a protest or contested case hearing concerning the solicitation, award, or administration of a contract within their authority.

(1) The procurement officer will make the final determination of responsiveness for both bids and offers.

(2) A determination of responsiveness may be made at any time during the procurement process.

(3) If a determination of nonresponsiveness is made, nonresponsive bids or offers are disqualified and eliminated from further consideration.

(4) Factors that may be considered in determining whether the standard of responsibility has been met are whether a bidder or offeror:

(a) has available the appropriate financial, material, equipment, facility, and personnel resources and expertise, or the ability to obtain them, necessary to indicate capability to meet all contractual requirements;

(b) has a satisfactory record of integrity;

(c) is qualified legally to contract with the agency;

(d) has not failed to supply any necessary information in connection with the inquiry concerning the responsibility; and

(e) has a satisfactory record of past performance. Nothing shall prevent the procurement officer from establishing additional responsibility standards for a particular procurement, provided that these additional standards are set forth in the solicitation, or from using past performance with the state of Montana as a reference.

(5) If requested, a bidder or offeror must supply information concerning responsibility to the procurement officer in a timely and convincing manner. If the bidder or offeror fails to supply the requested information, the procurement officer may base a determination of responsibility upon any available information, or may find the bidder or offeror nonresponsible.

(6) The bidder or offeror may demonstrate the availability of necessary financing, equipment, facilities, expertise, and personnel by submitting upon request:

(a) evidence that the bidder or offeror possesses the necessary items;

(b) acceptable plans to subcontract for the necessary items; or

(c) a documented commitment from, or explicit arrangement with, a satisfactory source to provide the necessary items.

(7) For both bids and offers, a determination of nonresponsibility may be made at any time during the procurement process.

(8) If a bidder or offeror who otherwise would have been awarded a contract is found nonresponsible, a written determination of nonresponsibility setting forth the basis of the finding must be prepared by the procurement officer. The determination must be made part of the procurement file and a copy of the determination mailed to the affected bidder or offeror.

(1) Section 18-1-102, MCA, requires a state agency to apply a reciprocal preference to the bid of a nonresident bidder equal to the percent of the preference given to the bidder in the state or country in which the bidder is a resident.

(2) A reciprocal preference is applied only to an invitation for bids for supplies and printing, or an invitation for bids for nonconstruction services for public works as defined in 18-2-401, MCA, but only in the event that federal funds are not involved in the anticipated purchase. In addition, a reciprocal preference is only applied if it will benefit a Montana resident bidder as defined in 18-1-103, MCA.

(3) If it is determined that the lowest responsive and responsible bidder would receive a percent preference in its resident state, that percent is added to the bid of the nonresident bidder. If the nonresident bidder is still the lowest responsive and responsible bidder after the preference adjustment has been made, the contract price is the price bid, not the adjusted price.

(4) A resident bidder must complete a bidder affidavit to verify resident eligibility. This affidavit must be on file with the department before a bid award can be made.

(5) The business name and federal identification number on the Montana resident affidavit must match the business name and federal identification number on the submitted bid documents in order to be considered for the application of reciprocal preference.

(6) Reciprocal preferences do not apply to term contracts unless the term contract is applicable only to agencies that do not receive federal funding.

(1) Specifications shall clearly describe the state's requirements and allow for the procurement of a supply or service that is adequate, suitable, and cost-effective for the state. Specifications may take into account, to the extent practicable, the costs of ownership and operation as well as initial acquisition costs and shall permit maximum practicable competition consistent with this purpose.

(2) Specifications shall, to the extent practicable, emphasize functional or performance criteria and limit design or other detailed physical descriptions to those necessary to meet the needs of the state. An agency shall include, as a part of their requisition, the principal functional or performance needs to be met, and any compatibility requirements.

(3) In developing specifications, accepted commercial standards shall be used and unique requirements shall be avoided, to the extent practicable.

(4) Brand name items or descriptions may be used to indicate standards of quality, performance, and/or use desired.

(5) Restrictive specifications shall not be used unless no other manner of description will suffice. In that event, a written determination shall be made that it is not practicable to use a less restrictive specification.

(6) A specification for a specific brand of supplies or services may be used if the requesting agency has a documented need to maintain a standard of performance and compatibility with existing supplies, equipment, or staff experience.

(7) The suggested format for specifications is as follows:

(a) name of commodity;

(b) purpose/use for commodity;

(c) description of commodity;

(i) Each item of the description should fulfill a functional or physical requirement.

(ii) If brand names are necessary to indicate quality levels, list an acceptable brand name.

(iii) Justification shall be provided and attached if a single brand is necessary.

(iv) Justification shall be provided and attached if the commodity is to be a sole source purchase.

(d) description of other requirements, such as warranty, training, parts, manuals, service, etc.;

(e) description of any unusual conditions, such as installation, field tests, fiscal year funding source, etc.;

(f) date commodity is to be delivered;

(g) location where commodity is to be delivered;

(h) name, address, and phone number of agency contact person; and

(i) acceptance procedures (if testing, sampling, or other evaluation will be performed when commodity is delivered to determine acceptability) must be described.

(1) If an agency requires bid or proposal security and/or contract performance security, the types of security that may be used are those specified in 18-4-312, MCA.

(2) The department will supply bid and proposal security bond forms and contract performance security bond forms when security is required. These are the only acceptable forms for surety bond or irrevocable letter of credit submission.

(3) Facsimile or photocopy copies of bid or contract security are not acceptable.

(4) Certificates of deposit or money market certificates will not be accepted as security for bid, proposal, or contract security unless the certificates are assigned only to the state.

(5) Factors to consider in requiring bid/proposal security and in determining the amount of the security include:

(a) type of commodity;

(b) past state experience;

(c) labor required to perform contract;

(d) materials required to perform contract.

(6) All negotiable instruments provided as bid security and proposal security will be returned to the unsuccessful bidders/offerors within 30 days from date of the award.

(7) Factors to consider in requiring contract performance security and in determining the amount of security include:

(a) type of commodity;

(b) past state experience;

(c) labor required to perform contract;

(d) materials required to perform contract;

(e) amount and number of subcontracts;

(f) damages chargeable to the state if the contractor defaults; and

(g) estimated dollar amount of total contract.

(8) All contract performance security, except bonds, must be returned to the contractor:

(a) upon completion of the contract;

(b) if a warranty period is specified in the contract and no claims are pending under the warranty, then upon expiration of the warranty period; and

(c) if the agency waives all rights and claims to the performance security as described in ARM 2.5.305.

(9) If the contract was established by the division, agencies requiring contract security shall provide written notification to the division within 30 calendar days from the expiration of the contract stating that:

(a) the contract has been successfully performed;

(b) if a warranty period is specified in the contract, that no claims are pending under the warranty; and

(c) the agency waives all rights and claims to the contract security.

(10) If the contract was established within an agency's delegated authority, the notification must be provided to the agency's contracting office. 

(1) Invitation for bids and request for proposals shall be mailed, posted electronically, or otherwise furnished to a sufficient number of bidders or offerors required to secure competition.

(2) In the interest of economy, notices of availability of invitations for bids and requests for proposals may be mailed, faxed, or e-mailed to a selection of vendors obtained from the purchasing vendors list and/or provided by the purchasing agency.

(3) Where appropriate, the state may require payment of a fee or a deposit for supplying the invitation for bids or request for proposals.

(4) In the event that it is either not practicable or not advantageous to the state to furnish solicitations to all the vendors listed on the central vendors list for a specific supply or service, the purchasing agency may elect to shorten the list by selecting a sample of bidders or offerors.

(5) Notice of public meetings conducted to evaluate requests for proposals must be posted to the division's web site no less than 72 hours in advance of the meeting.

This rule has been repealed.

(1) The procurement officer may allow a bidder or offeror to correct minor mistakes in a bid or offer if the mistake is clearly not attributed to an error in judgment, and the mistake and the intended correct bid or offer is clearly evident on the form of the document. Examples of correctable mistakes include, but are not limited to:

(a) typographical errors;

(b) errors in extending unit prices;

(c) transposition errors;

(d) arithmetical errors;

(e) failure to sign and return an acknowledgment of addendum; or

(f) signature omitted.

(2) The procurement officer may permit a bidder or offeror to withdraw a low bid or proposal if:

(a) a mistake is clearly evident on the face of the document but the intended correct information is not similarly evident; or

(b) the bidder or offeror submits proof of evidentiary value which clearly and convincingly demonstrates that a mistake was made.

(3) The division administrator of the�State Financial�Services Division or designee may waive minor variations in a bid, offer, or solicitation.

This rule has been repealed.

(a) a need exists to limit a solicitation to those vendors who meet statutory or licensing requirements applicable to the solicitation; or

(b) a need exists to minimize the time necessary to verify vendor qualifications which otherwise would jeopardize the timely award of contracts.

(2) The documentation for vendor prequalification must reflect the capability of the selected vendor(s) to adequately perform the contract. The criteria for prequalification include, but are not limited to, technical expertise, experience, quality of performance, location, availability, rates, prices, financial stability, past performance, catalogs, or other criteria relevant to a particular procurement.

(3) Prequalification must be approved by the division.

(4) Prequalification of a prospective vendor does not necessarily represent supply or service acceptability or a finding of responsibility.

(2) Late bids and proposals will not be opened and may be returned to the vendor at the expense of the vendor or destroyed if requested.

(1) "Sealed bid" is the preferred method of competitive procurement for state supply contracts and service contracts estimated to exceed the amount designated in ARM 2.5.603 as a small purchase or a limited solicitation. Sealed bids shall be solicited with an invitation for bid.

(2) The invitation for bid shall include the following:

(a) instructions and information to bidders concerning the bid submission requirements, including the time and date established for bid opening, the address of the office to which bids are to be delivered, and any other special information;

(b) the purchase description, delivery or performance schedule, and any inspection and acceptance requirements not included in the purchase description; and

(c) the contract terms and conditions, including warranty and bonding or other security requirements, as applicable.

(3) The invitation for bid may incorporate documents by reference if the invitation for bid specifies where such documents can be obtained.

(4) Where a brand name specification is used in a solicitation, the solicitation shall contain explanatory language that the use of a brand name is for the purpose of describing the standard of quality, performance, and characteristics desired, and is not intended to limit or restrict competition. When bidding an "or equal" product, the burden of persuasion is on the bidder to convince the procurement officer that their product is, in fact, equal to the one specified. The procurement officer is given the responsibility and judgment for making a final determination of whether a proposed substitution is equal to the brand name specified.

(5) Addenda, if any, will be provided to all vendors who received an invitation for bid, or notice of the addenda will be placed in the electronic format designated for giving public notice.

(6) Upon receipt of a bid or a facsimile transmission of a bid, an employee of the agency other than the procurement officer will cause it to be time-stamped and stored in a secure place until the time and date set for bid opening. In order to be considered timely, a complete printed bid response must be delivered to the specified destination by the specified time.

(7) Bids shall be opened publicly at the time, date, and place designated in the invitation for bid.

(8) The division may request state agencies to perform tests or to provide technical expertise to determine product or service acceptability on bids received.

(9) Following determination of product acceptability, bids will be reviewed to determine which bidder offers the lowest cost to the state in accordance with the specifications set forth in the invitation for bids, including the reciprocal preference provisions described in ARM 2.5.408.

(10) Nothing in this rule shall be deemed to permit contract award to a bidder submitting a higher quality item than that designated in the invitation for bid if such bidder is not also the lowest bidder as determined under (9).

(11) Multiple award contracts are allowable if determined to be in the best interest of the state.

(12) In the case of a tie bid, the discretion of the division or the head of a purchasing agency will be used to resolve such bids, except that a bidder offering American-made products or supplies must be given preference.

(13) A supplier's currently advertised or established catalog price, which is available to the public, may be accepted as a bid subject to the following conditions:

(a) The advertisement or established catalog price must be received and time-stamped by the procurement officer authorized to enter into contracts prior to or at the bid opening. In no event will catalog or advertised prices be accepted after a bid opening.

(i) a copy of the catalog or advertised price and specifications may be attached to the requisition received by the procurement official; or

(ii) the procurement official or the requesting agency may locate catalog or advertised prices; or

(iii) a vendor may submit catalog or advertised prices as a bid.

(b) The catalog or advertised price must meet or exceed the specifications, terms, and conditions and be the lowest acceptable bid.

(14) The currently advertised or established catalog price is tabulated and recorded as a bid from the supplier for the inspection of all bidders.

(15) Only the procurement official of the division or purchasing agency can make the final determination of acceptance or rejection of the bids or publicly advertised or established catalog prices.

(1) "Competitive sealed proposal" is a procurement option allowing the award to be based upon an evaluation process using stated criteria to arrive at a contract that will be the most advantageous to the state.

(2) Competitive sealed proposals, solicited through a request for proposals, may be practical when one or more of the following conditions exist:

(a) the contract needs to be other than a fixed-price type;

(b) oral or written discussions may need to be conducted with offerors concerning technical and price aspects of their proposal;

(c) offerors may need to be afforded the opportunity to revise their proposal, including prices;

(d) award may need to be based upon a comparative evaluation as stated in the request for proposals of differing price, quality, and contractual factors in order to determine the most advantageous offering to the state. Quality factors include technical and performance capability and the content of the technical proposal; or

(e) price will only be one of the criteria considered in determining an award.

(3) The request for proposals must be prepared in accordance with ARM 2.5.601 and must include:

(a) a statement allowing for optional discussions with one or more offerors who submit proposals; and

(b) the criteria that will be used to evaluate the proposals.

(4) An evaluation committee may be utilized to evaluate the proposals.

(5) Facsimile transmission of a proposal is only acceptable on an exception basis with prior approval from the procurement officer.

(6) Proposals shall be time-stamped upon receipt and held in a secure place by an employee of the agency until the due date specified in the request for proposals.

(7) After the time established for receipt of proposals, a procurement officer shall open and inspect the proposals for material not available for public inspection pursuant to 18-4-304 and 18-4-308, MCA. The procurement officer shall remove this material and release the remainder of the proposal for public inspection. Offerors submitting a proposal containing a claim of confidentiality pursuant to 18-4-304, MCA, shall include a statement that attests to the offeror's acceptance of the legal and financial responsibility for defending the claim. A claim to shield trade secret material must be made by an offeror's legal counsel using the affidavit form prescribed by the division.

(8) For the purpose of conducting discussions, proposals must be initially classified as responsive or nonresponsive.

(a) Proposals may be found nonresponsive at any time during the procurement process if:

(i) any of the required information is not provided;

(ii) the submitted price is found to be excessive or inadequate as measured by criteria stated in the request for proposals; or

(iii) the proposal does not conform to the specifications described and required in the request for proposal.

(b) Nonresponsive proposals will be eliminated from further consideration.

(9) Discussions including oral presentations, interviews, demonstrations, responses to specific questions, modifications, and contract refinement may be held with one or more offerors to:

(a) promote understanding of the state's requirements and the offerors' proposals; and

(b) facilitate arriving at a contract that will be most advantageous to the state taking into consideration all criteria set forth in the request for proposals.

(10) At the discretion of the procurement officer, one or more offerors may be provided an opportunity to submit a best and final offer if additional information is required in order to reach a final decision. Unless the request for proposals so states, a best and final offer may not be requested from the offeror(s) on price alone.

(11) References and the credit and financial responsibility of the offerors may be verified as appropriate.

(12) The evaluation must be based on the evaluation criteria set forth in the request for proposals. In assigning points or value to a proposal, the evaluation requires the exercise of the evaluators' discretion, involving a judgmental assessment of the evaluation criteria. If an award is made, it must be made to the responsive and responsible offeror whose proposal best meets the evaluation criteria.

(13) The department reserves the right to refine a contract before execution if doing so is advantageous to the state. The department reserves the right to reject any or all proposals.

(14) Interested parties are responsible for making their own arrangements to make copies of proposal materials.

(15) Multiple award contracts are allowable if determined to be in the best interest of the state.

(16) The state may create a roster of contractors to provide supplies and/or services on an "as needed, if needed" basis. In this situation, contractors have no guarantee that any supplies or services will be purchased by the state. The solicitation document will establish the method to be used to select contractors for the roster.

(1) The division or state agency may procure supplies or services when the total contract value will be less than $10,000 using a purchase technique that best meets the agency's needs, including the use of electronic online auctions.

(2) The payment method used for small purchases should be the state's purchasing card, except for interagency purchases.

(3) The division or state agency, if authorized in a written delegation agreement, may procure supplies or services with a total contract value of $10,000 or more and less than $100,000, using a limited solicitation procedure. This procedure requires a minimum of three viable written or oral quotations, if available. The limited solicitation procedure must be documented and, wherever practical, use the department's vendor list.

(4) This rule does not apply to controlled items purchased through exclusive term contracts, requisition time schedules, or State Print and Mail unless specifically delegated in a written delegation agreement to the agency.

(5) Procurements shall not be artificially divided or sequenced to avoid using the other source selection methods set forth in Title 18, chapter 4, MCA.

(6) If approved by the agency procurement officer, and except for new or used vehicles, a state agency may participate in electronic online auctions for limited solicitations under the following conditions:

(a) the procurement officer must review and approve the terms of the participation in the auction for compliance with state law;

(b) two quotes must first be obtained from viable sources and the lowest of the two quotes must be the amount that the auction price may not exceed;

(c) the auction price must include all fees associated with participating in the auction, including shipping and handling; and

(d) the terms of the purchase must include a right to return.

(1) This rule applies to all sole source procurements of $10,000 or more unless exigency procurements described in ARM 2.5.605 are necessary.

(2) Sole source procurement is permissible under the following circumstances:

(a) the compatibility of current services or equipment, accessories, or replacement parts is the paramount consideration;

(b) there is no existent equivalent product; or

(c) only one source is acceptable or suitable for the supply or service item.

(3) For purchases with a total contract value of $10,000 or more, the determination as to whether a procurement shall be made as a sole source shall be made by the division, unless specifically authorized in a written agency delegation agreement. In cases of reasonable doubt, competition should be solicited. A request by a state agency to the division that a procurement be restricted to one vendor must be accompanied by a written justification using the "Sole Source Procurement Justification" form referenced in (5).

(4) The procurement officer may conduct negotiations, as appropriate, as to price, delivery, and terms.

(5) For the purpose of complying with 18-4-306, MCA, a record of sole source procurements of $10,000 or more shall be maintained by the procuring agency using the "Sole Source Procurement Justification" form provided by the division.

(6) The following items do not require sole source justification and shall be purchased directly by the agency regardless of delegated authority:

(a) professional licenses;

(b) dues to associations;

(c) renewal of software license agreements;

(d) purchase or renewal of maintenance agreements for software or hardware; and

(e) publications available only from a single supplier.

(7) If an extension or renewal of a sole source contract is required, the agency shall provide the division with a justification form as provided in (5).

(1) An exigency procurement of $10,000 or more shall be limited to those supplies or services necessary to meet the exigency, as defined in ARM 2.5.201.

(2) The determination as to whether a procurement shall be made as an exigency procurement shall be made by the agency. The determination must be in writing and must state the basis for an exigency procurement and for the selection of a particular vendor.

(3) The procedure used shall be selected to assure that the required supplies or services are procured in time to meet the exigency. However, such competition as is practicable shall be obtained.

(4) A record of each exigency procurement shall be made as soon as practicable and shall set forth:

(a) the vendor's name;

(b) the amount and type of the contract;

(c) a listing of the supplies or services procured under the contract; and

(d) the written documentation required in (2).

(1) Purchase of used equipment is allowable if in the best interest of the state.

(2) Unless justified as sole source or exigency, the award of the contract will be made by identifying the requirements and proceeding with the competitive bidding or proposal process, pursuant to ARM 2.5.601.

(3) Criteria to consider in making this determination include:

(a) consideration of the type, use, and life expectancy of new versus used equipment;

(b) comparing the purchase price of new and used equipment;

(c) comparing the price and general condition of used equipment among several vendors;

(d) consideration of the freight charges and FOB point;

(e) investigation of manufacturer or brand and availability of warranty, maintenance, and parts; and

(f) clarification of payment terms.

(1) State agencies may purchase supplies and services from sheltered workshops as defined in 18-5-101, MCA. Such purchases are exempt from competitive bidding laws and rules and may be made directly.

(2) The division maintains a list of certified sheltered workshops or work activity centers, as defined in 18-5-101, MCA, located in the state. The list includes the supplies and services provided by each. The list is available on the division's web site at https://emacs.mt.gov/ShelteredWorkshops.

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(1) When none of the responses to invitations for bids or requests for proposals received in response to a valid solicitation are from a responsible and responsive bidder or offeror, as defined in 18-4-301, MCA, the procurement officer may:

(a) cancel and reissue the solicitation. If the procurement officer reissues the solicitation, the procurement officer shall attempt to increase the number of potential vendors and may modify any specification in the original solicitation to enhance vendor participation; or

(b) if approved by the department, directly negotiate with a vendor or vendors if the procurement officer determines that a second or subsequent solicitation would also be unsuccessful. The procurement officer may conduct negotiations as appropriate, as to price, delivery, and terms.

(2) Subject to conditions in (1) and the intent of 18-4-122, MCA, the determination as to whether a procurement will be made by direct negotiation must:

(a) be in writing;

(b) state the basis for the direct negotiation and for the selection of a particular vendor; and

(c) be approved by the department.

(1) An agency may request authorization from the division to pursue an alternative procurement method for obtaining a supply or service.

(2) If an alternative procurement method is approved, the division shall:

(a) conduct the procurement on behalf of the agency;

(b) notify potential vendors of the alternative procurement method being used for the supply or service; and

(c) make a written determination as to the success of the method.

(1) The department or using agency may use federal supply schedules as one source of a bid, provided the federal supply schedule supplier has agreed to extend the pricing to the department or using agency. The federal supply schedule item must meet or exceed the specifications, terms, and conditions of the invitation for bid and must be the lowest acceptable bid in order to be selected. The pertinent supply schedule must be recorded as a bid from the supplier for the inspection of all bidders.

(2) For the purposes of complying with 18-4-221, MCA, the following definitions apply:

(a) "public authority" means an entity of a political subdivision of the state that is authorized to spend or receive public funds to further public interests;

(b) "educational institution" means any school system operating within the state that expends public funds for the procurement of supplies and services;

(c) "health institution" means an entity of a political subdivision of the state organized for the purpose of providing health care and related services and that expends public funds for the procurement of supplies and services;

(d) "other institution" means an entity of a political subdivision of the state that operates for a particular public purpose and that expends public funds for the procurement of supplies and services; and

(e) "any other entity that expends public funds for the procurement of supplies and services" means an Internal Revenue Code 501(c)(3) organization, as that statute reads on May 23, 2014, that expends public funds for the procurement of supplies and services.

(3) Nonprofit corporations that wish to enter into an agreement with the state for the cooperative use of supplies or services shall provide the division with documentation that they are or will be lawfully authorized to spend public funds.

(4) An agency may participate in a cooperative contract if the following conditions are met:

(a) the division provided adequate public notice of the solicitation; and

(b) the contract or purchase order includes all statutorily required terms and conditions.

(5) If an agency wishes to participate in a cooperative contract, and (4)(a) has not been met, the division shall provide adequate opportunity for public participation by either:

(a) issuing a solicitation for the supply or service and including the cooperative contract as a response; or

(b) providing notice of the intent to purchase from the cooperative contract and allowing interested vendors a reasonable time to submit a response to the notice.

(6) The division may exempt an agency from the requirements of (4)(a) and (5) if it is shown to be in the best interests of the state.

This rule has been transferred.

This rule has been transferred.

This rule has been transferred.