(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.