| HOME | SEARCH | ABOUT US | CONTACT US | HELP | ||
 |
 |
|
|
| Montana Administrative Register Notice 2-5-488 | No. 24 12/26/2013 | |
|
||
| Prev | Next | ||
|
BEFORE THE DEPARTMENT OF ADMINISTRATION OF THE STATE OF MONTANA
TO: All Concerned Persons
1. On Friday, February 21, 2014, at 9:00 a.m., the Department of Administration will hold a public hearing in Room 53 of the Mitchell Building, 125 North Roberts Street, Helena, Montana, to consider the proposed amendment of the above-stated rules.
2. The Department of Administration will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact Department of Administration no later than 5:00 p.m. on February 14, 2014, to advise us of the nature of the accommodation that you need. Please contact Jodi Gollehon, Department of Administration, P.O. Box 200135, Helena, Montana 59620-0135; telephone (406) 444-7210; fax (406) 444-2529; or e-mail [email protected].
3. The rules proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
2.5.201 DEFINITIONS In (1) through (6) remain the same. (7) "Central Stores Program" means the program within the State Procurement Bureau (8) "Controlled items" means those supplies and services (9) through (17) remain the same. (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) and (20) remain the same. (21) "Noncontrolled items" means all supplies and services that do not fall under the definition of "controlled items." (21) through (23) remain the same, but are renumbered (22) through (24).
(25) through (33) remain the same. (34) "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.
(35) and (36) remain the same, but are renumbered (36) and (37).
(39) "Surplus Property Program" means the program within the State Procurement Bureau that is responsible for managing the state and federal surplus property. (38) and (39) remain the same, but are renumbered (40) and (41). (42) "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. (40) and (41) remain the same, but are renumbered (43) and (44). (45) "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. (42) and (43) remain the same, but are renumbered (46) and (47).
IMP: 18-4-221, MCA
STATEMENT OF REASONABLE NECESSITY: During a 2011 Legislative Audit, the auditors recommended to the General Services Division (division) the closing of the central stores warehouse and replacing it with a direct delivery office supply system. Following that recommendation, the division proposed to reduce the office supply administrative fee from 20 percent to 2 percent within House Bill 2, which was passed in the 2013 legislative session. This rate change effectively closed the central stores warehouse and created the Central Stores Program. Additionally, the Property and Supply Bureau, which included the central stores warehouse, has transitioned into the smaller, restructured Surplus Property Program. Consequently, both the Central Stores Program and the Surplus Property Program were transferred to the State Procurement Bureau. The proposed deletion of (24), the proposed changes to (7), and the proposed addition of the new (39) reflect the effects of these transitions. The changes to (18) and (35) and the addition of (34) and (45) are being proposed by the division to ensure that all computer maintenance agreements procured pursuant to ARM 2.5.604(6)(d) fall within the scope of the original contract. The division has faced situations where the previous definition of maintenance did not adequately describe what can or cannot be included in a maintenance agreement. The proposed changes will resolve that confusion. Specifically, the definitions of "software" and "upgrade" are industry-standard definitions. The division saw no need to deviate from these standard definitions. For the definition of "software maintenance," the proposed use of the word "patches" reflects how the industry refers to enhancements and fixes of software. The division proposes to add the definitions of "noncontrolled items" and "term contract" under new (21) and (42), respectively. The division believes these definitions are necessary because both terms are found within ARM, but their definitions are not self-evident. Specifically, "noncontrolled items" is referenced in ARM 2.5.301(1) and "term contract" is referenced in ARM 2.5.603(4). The term "term contract" is well-established within the state and is an industry-standard term commonly used to describe indefinite government contracts. The proposed changes to (8) simplify the definition and update it to reflect the division's current list of items that state agencies must purchase through the division. All other proposed changes are grammatical.
2.5.301 DELEGATION OF PURCHASING AUTHORITY (1) remains the same. (2) Delegation and competitive procedures are not necessary for goods and services listed in 18-4-132(3), MCA. Additional exempted (a) remains the same. (b) fees for those professions exempted by statute (c) through (i) remain the same. (j) (k) remains the same.
(n) and (o) remain the same, but are renumbered (m) and (n).
AUTH: 18-4-221, MCA IMP: 18-4-132, 18-4-221, 18-4-222, 18-4-302, MCA
STATEMENT OF REASONABLE NECESSITY: Rules may not unnecessarily repeat statutory language. 2-4-305(2), MCA. The "training" language in (2)(j) is being removed as it is already specified as an exemption under (2)(i). The language in (2)(l) being removed is already specified by statute. The changes to (2)(m) are being proposed by the division to ensure that agencies understand which advertising costs are exempt from competitive solicitations and which are not. While fees for placing an advertisement are exempt, the costs associated with the development of the advertisement are not exempt under this proposed rule. The proposed changes clarify this distinction. All other proposed changes are grammatical.
2.5.302 REQUISITIONS FROM THE AGENCIES TO THE DIVISION (1) All agencies
(2) and (3) remain the same, but are renumbered (4) and (5).
(a) and (b) remain the same. (c) has no evidence of approvals required in (d) remains the same. (5) remains the same, but is renumbered (7).
AUTH: 18-4-221, MCA IMP: 18-4-221, MCA
STATEMENT OF REASONABLE NECESSITY: Requisitions are no longer required to be combined on one form. This was a requirement from a prior computer system that was recently upgraded. The new system is not dependent upon the separation of billing and shipping addresses for each purchase order. The proposed changes to (1) represent that change in internal procedure. As detailed in the reasonable necessity statement explaining the proposed changes to ARM 2.5.201, the Property and Supply Bureau has transitioned into the smaller, restructured Surplus Property Program. The proposed deletion of (1)(a) reflects that transition. All other proposed changes are grammatical.
2.5.303 ENFORCING THE CONTRACT (1) Except for items purchased and warehoused by the division's Surplus Property Program (2) and (3) remain the same.
AUTH: 18-4-221, MCA IMP: 18-4-221, MCA
STATEMENT OF REASONABLE NECESSITY: As detailed in the reasonable necessity statement explaining the proposed changes to ARM 2.5.201, the Property and Supply Bureau has transitioned into the smaller, restructured Surplus Property Program. The proposed changes reflect that transition.
2.5.404 BID AND PROPOSAL PREPARATION (1) Any exceptions to the specifications on the part of the bidder or offeror must be clearly (2) remains the same. (3) The price for each item must be stated and (4) Alternate bids may be accepted if the bidder (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 (6) Unless stated otherwise in the solicitation, payment will be due 30 calendar days from: (a) and (b) remain the same. (7) Vendors may quote a cash discount based on early payment (8) Vendors (9) Unless otherwise specified in the solicitation
AUTH: 18-4-221, MCA
STATEMENT OF REASONABLE NECESSITY: The changes proposed in (1) are necessary to clarify to vendors when and to whom they must notify of any exceptions to the solicitation they are disputing. The division has experienced situations in which vendors have taken exception to a solicitation only after the solicitation has closed and evaluations are in progress. This has resulted in numerous setbacks within the procurement process, causing contracts to be postponed and/or solicitations to be reissued to the detriment of the contracting agency. All other proposed changes are grammatical or provide clearer or simpler language.
2.5.406 (1) (2) The department may exercise its discretion
(3) remains the same.
STATEMENT OF REASONABLE NECESSITY: The proposed addition of "Bidder, Offeror, or Contractor" to the rule catchphrase is necessary because the rule applies to more than just vendors; the rule also applies to bidders, offerors, and contractors. The division also proposes to strike the repetitive language from the rule. Rules may not unnecessarily repeat statutory language. 2-4-305(2), MCA. The language that is being proposed for removal is already specified by statute. The proposed additional language in (1) provides clarification to protestors that they must submit their protest to both the division and the issuing agency, if different. If the division does not handle the protest, the division believes that the issuing agency should receive its own copy of the protest to allow for greater efficiency and quicker processing. All other proposed changes provide clearer language.
2.5.408 RECIPROCAL PREFERENCE (1) through (5) remain the same. (6) Reciprocal preferences do not apply to term contracts.
STATEMENT OF REASONABLE NECESSITY: Federal statute prohibits the use of reciprocal preferences when federal funding is involved. Term contracts are contracts entered into on behalf of all state agencies, the majority of which receive federal funds. It is impractical to apply reciprocal preferences to a solicitation in which agencies that receive federal funding may or may not use the term contract at some point during the contract term. The proposed addition of (6) will prevent the division from having to separate term contracts that will be utilizing federal funds from those that could potentially be utilizing federal funds, a virtually impossible undertaking.
2.5.502 BID, PROPOSAL, AND CONTRACT PERFORMANCE SECURITY (1) through (7) remain the same. (8) (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
(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.
STATEMENT OF REASONABLE NECESSITY: The proposed addition of (8)(b) is intended to provide a comprehensive list of those situations in which security would expire outside of the contract end date. The division believes this is important because state agencies are in need of clarification as to what their duties are when closing out contract security. The proposed addition of (9) is intended to provide agencies with a deadline for providing notification of contract security expiration. The proposed deadline will allow the division to promptly return all negotiable contract securities (cashier's checks, CDs, etc.) at the conclusion of the contract. It is critical that the division return those negotiable securities in which it no longer has a financial interest. All other proposed changes are grammatical.
2.5.601 COMPETITIVE SEALED BIDS (1) through (11) remain the same. (12) In the case (13) through (15) remain the same.
AUTH: 18-4-221, MCA IMP: 18-4-303, MCA
STATEMENT OF REASONABLE NECESSITY: The proposed change to this rule is necessary to make a grammatical correction.
2.5.602 COMPETITIVE SEALED PROPOSALS (1) and (2) remain the same. (3) The request for proposals must be prepared in accordance with ARM 2.5.601 and must (a) a statement (b) and (4) remain the same. (5) Facsimile transmission of a proposal is only acceptable on an exception basis with prior approval (6) remains the same. (7) After the time established for receipt of proposals, a procurement officer shall open (8) For the purpose of conducting discussions, proposals (a) Proposals may be found nonresponsive at any time during the procurement process if: (i) and (ii) remain the same. (iii) the proposal (b) remains the same. (9) Discussions including oral presentations, interviews, demonstrations, responses to specific questions, modifications, and (a) through (11) remain the same. (12) The evaluation (13) The department reserves the right to refine a contract before execution if doing so is (14) through (16) remain the same.
AUTH: 18-4-221, MCA IMP: 18-4-304, MCA
STATEMENT OF REASONABLE NECESSITY: The proposed changes to (13) are the result of an internal policy shift away from contract negotiations to the more objective approach of contract refinement. The difference between contract refinement and negotiation is one of materiality. To negotiate a contract implies that substantial changes are being made to the contract, and the scope of contract has been affected. Refining a contract, however, implies minor, nonmaterial changes to the terms of the contract, such as a change in delivery dates or acceptance criteria. The department's experience in the past has been that the term "negotiating" is too broad and could undermine the procurement process by allowing contractors the opportunity to negotiate costs or additional work not included in the original bid or proposal. All requirements listed within a solicitation must remain neutral throughout the solicitation process in order to keep it fair and equitable. All other proposed changes provide clearer or simpler language.
2.5.604 SOLE SOURCE PROCUREMENT (1) (2) remains the same. (3) For purchases with a total contract value greater than $5,000, the determination (4) remains the same. (5) For the purpose of complying with 18-4-306, MCA, a record of sole source procurements greater than $5,000 shall be maintained by the procuring agency using the "Sole Source Procurement Justification" form provided by the (6) remains the same. (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).
AUTH: 18-4-221, MCA IMP: 18-4-306, MCA
STATEMENT OF REASONABLE NECESSITY: The addition of proposed new (7) is to clarify the requirement that state agencies provide justification for all sole source contract extensions and renewals, not just new sole source requests. The division has experienced issues with sole source requests no longer meeting the justification requirements at the time of renewal or extension. Requiring agencies to provide new justification for all sole source contract renewals and extensions allows the division to review each request relative to the current market for the good or service. It will provide for a more fair and open procurement process, which is required under the Montana Procurement Act. 18-4-122, et seq., MCA. All other proposed changes are grammatical or provide minor clarifications.
2.5.610 COOPERATIVE PURCHASING (1) remains the same. (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 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 or receive public funds. (4) Participation in any cooperative solicitation or contract is permitted if the following conditions are met: (a) the division is able to provide adequate public notice of the solicitation to interested vendors; and (b) any contract that the division opts to participate in must include all the statutorily required terms and conditions. (5) If the conditions of (4)(a) and (4)(b) are not met, the division may reject participation in the cooperative solicitation or contract.
AUTH: 18-4-221, MCA
STATEMENT OF REASONABLE NECESSITY: The division is proposing to update the cooperative purchasing rule to ensure fair and equitable treatment of entities that participate in the procurement system while providing increased economy in contract pricing. To meet these goals, the division is proposing to more clearly define the types of organizations that are allowed to purchase from state contracts. State contracts are entered into with the specific purpose of saving taxpayer money. The division is proposing to clarify the statutory definition of "local procurement unit" as those organizations that are affiliated with the political subdivisions of the state (e.g., counties, cities, and towns) and that expend public funds. Only those organizations that fit the proposed definitions will be allowed to benefit from state contracts. The division is proposing this clarification because it is currently unclear and ambiguous as to which entities are permitted to participate in cooperative purchasing. For example, the statutory definition of "local public procurement unit" includes an "educational, health, or other institution." The phrase "other institution" is not defined, leaving both the division and prospective entities uncertain who would qualify under this phrase. In arriving at the definition of "other institution," the division reviewed the Montana Procurement Act's legislative history and accepted definitions of the word "institution." The legislative history did not shine light on the term. The Montana Procurement Act was modeled after the American Bar Association's Model Procurement Code for State and Local Governments. The commentary for that part of the model code that addresses cooperative purchasing does not explain the meaning of "other institution." Under Montana law, words and phrases used in a statute are construed according to the context and the approved usage of the language. 1-2-106, MCA. Therefore, the division researched the definition of "institution." Generally, "institution" is defined as an organization, foundation, or the like devoted to the promotion of a particular cause or program, especially one of a public, charitable, or educational nature. See, e.g., Black's Law Dictionary; Dictionary.com. The division bases its proposed definition of "other institution" on the accepted definition of institution. The Montana Procurement Act also includes as a local public procurement unit "any other entity that expends public funds for the procurement of supplies and services." 18-4-401, MCA. The division is proposing to define the phrase "any other entity" as an Internal Revenue Code 501(c)(3) organization. Such an organization is exempt from federal taxation if it exists for exempt purposes. These exempt purposes are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. To qualify as a "local public procurement unit" the 501(c)(3) organization must also expend public funds for the procurement of supplies and services. The division is proposing to use the 501(c)(3) organization as the exemplar entity because generally these organizations fit well within the scope of the other listed entities that exist to promote the public interest and welfare and that expend public funds for services and supplies to accomplish their missions. The proposed addition of (3) will ensure that the division is complying with the statute's public funding requirement. Finally, the division is proposing to limit the type and volume of cooperative contracts in which the state may participate. Broad-based competition must be balanced with a fair promotion of Montana and tribal businesses, large and small, to ensure the quality and integrity of the state's procurement system and that all statutorily required terms and conditions are included in any resulting contract. The decision to cooperatively purchase from/with a public procurement unit must be made after the state is assured that these purposes have been met. If the proposed rule change is adopted, it will not affect any entity already admitted into the cooperative purchasing program nor will it affect any cooperative contract currently being utilized by the state. The proposed amendments will implement 18-4-401, MCA, so it is necessary to add that as an implemented statute.
2.5.701 AUTHORITY TO DISPOSE OF SUPPLIES (1) State agencies may not transfer, sell, trade, or otherwise dispose of supplies owned by the state without written authorization of the Surplus Property Program (2) remains the same.
AUTH: 18-4-226, MCA IMP: 18-4-226, MCA
STATEMENT OF REASONABLE NECESSITY: As previously explained, the Property and Supply Bureau has transitioned into the smaller, restructured Surplus Property Program, necessitating this rule change.
4. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Jodi Gollehon, Department of Administration, P.O. Box 200135, Helena, Montana 59620-0135; telephone (406) 444-7210; fax (406) 444-2529; or e-mail [email protected], and must be received no later than 5:00 p.m., February 21, 2014.
5. Jodi Gollehon, Department of Administration, has been designated to preside over and conduct this hearing.
6. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 4 above or may be made by completing a request form at any rules hearing held by the department.
7. An electronic copy of this proposal notice is available through the department's web site at http://doa.mt.gov/administrativerules.mcpx. The department strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that if a discrepancy exists between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.
8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
9. With regard to the requirements of 2-4-111, MCA, the department has determined that these proposed rule amendments will not significantly and directly impact small businesses.
By: /s/ Sheila Hogan By: /s/ Michael P. Manion Sheila Hogan, Director Michael P. Manion, Rule Reviewer Department of Administration Department of Administration
Certified to the Secretary of State December 16, 2013.
|
A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact [email protected].
