DAR File No. 28186

School and Institutional Trust Lands, Administration

R850-11

Procurement

NOTICE OF PROPOSED RULE

DAR File No.: 28186
Filed: 08/31/2005, 11:07
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The agency is proposing to streamline procurements of professional services by modifying the obligation to solicit bids, eliminate the requirement of consultation with the State Division of Purchasing on certain contracts, and make technical corrections to the rule.

Summary of the rule or change:

The rule is being modified to allow the agency to enter into noncompetitive contracts for professional services costing less than $20,000 without the necessity of a Request for Proposal (RFP). The contractor would be selected from a list of prequalified contractors, solicited through annual advertising, or other qualified contractors. For professional services contracts over $20,000, an RFP would be required and the winning bidder would be selected by the agency based on written findings of competence, ability to perform, past performance, and a determination that the proposed fees are reasonable. Standard sealed bidding could be utilized if it was determined that it was advantageous. Another modification to the rule is to raise the threshold for required competitive bidding for procurements other than professional services from the current $2,000 to $3,000. This modification is meant to keep a reasonable threshold in light of inflation since this rule was enacted. The third modification to this rule eliminates a general provision governing contracts whose scope is unknown and eliminates the requirement of consultation with the Division of Purchasing for construction contracts over $50,000. The need for this consultation process has caused significant delays in letting various construction contracts in the past, which could potentially bring about a substantial loss to the trust.

State statutory or constitutional authorization for this rule:

Subsection 53C-1-201(3)

Anticipated cost or savings to:

the state budget:

It is anticipated that there will be some unquantified savings to the state as a result of not having to prepare RFPs on smaller procurements and in being able to take advantage of good markets as they present themselves.

local governments:

It is not anticipated that there would be either a cost or savings to local government as a direct result of these rule changes because local governments rarely provide the professional services that we would be seeking under this rule.

other persons:

It is anticipated that there could be some unquantified savings to other persons based on a reduction in the amount of time required to respond to multiple RFPs soliciting professional services.

Compliance costs for affected persons:

The compliance costs for affected persons will most likely be reduced because of the reduction in the number of RFPs soliciting professional services to which they will need to respond.

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

The effect of this rule amendment is to streamline the procurement process employed by the Trust Lands Administration. Consequently, it is anticipated that modest savings could accrue to the business community due to a reduction in their efforts to submit duplicate proposals to enter into contracts to provide goods and services. Kevin S. Carter, Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

John W. Andrews at the above address, by phone at 801-538-5180, by FAX at 801-355-0922, or by Internet E-mail at jandrews@utah.gov

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:

10/17/2005

This rule may become effective on:

10/18/2005

Authorized by:

Kevin S. Carter, Director

RULE TEXT

R850. School and Institutional Trust Lands, Administration.

R850-11. Procurement.

R850-11-100. Authorities.

This rule is authorized by Sections 6, 8, 10, and 12 of the Utah Enabling Act; Articles X and XX of the Utah Constitution, and [Section 53C-1-201(3)(a)(iv)]Subsection 53C-1-201(3)(e).

R850-11-150. Purposes.

[Section 53C-1-201(3)(a)(iv)]Subsection 53C-1-201(3)(e) permits the agency to be exempted from the Utah Procurement Code upon board approval and adoption of alternative procurement procedures. This rule provides alternative procurement procedures that the agency may follow when procuring any goods and services related to the administration of the agency or the management, development, leasing or sale of trust lands. Nothing in this rule shall be deemed to prevent the agency from procuring goods and services pursuant to the Utah Procurement Code or other applicable law whenever deemed advisable by the agency, or in circumstances where this rule is not applicable.

R850-11-200. Definitions.

For the purposes of this rule:

1. Provider: means an individual or firm engaged in the business of providing goods or services deemed necessary by the agency.

2. Professional Services: any professional services related to the administration of the agency or the management, development, leasing or sale of trust lands, including management consulting, accounting, auditing, legal, engineering, [construction]land planning, marketing, environmental, geological, mining engineering, architectural, [survey]surveying, appraisal, archaeological, real estate brokerage, planning, or such other services as needed.

R850-11-300. [Statements of Qualification by Providers]Professional Services.

1. The agency may from time to time request providers of professional services to submit a statement of qualifications containing information that the agency deems relevant to the provider's ability to provide quality [goods or ]services and the provider's hourly rates. At least once annually, the agency will advertise statewide its intent to accept statements of qualifications, and will maintain a [log of providers who have submitted statements of qualifications for particular goods or services]list of qualified providers with approved rates.

2. The purpose of prequalification is to provide the agency with basic information regarding providers for the agency's convenience. The agency is not required to solicit each or any prequalified provider for a particular [good or ]service when it undertakes a procurement.

3. When the procurement of professional services is estimated to cost less than $20,000, the agency may select the provider directly from either the list of providers who have submitted annual statements of qualifications, or from other qualified providers if necessary.

4. When the procurement is estimated to exceed $20,000, a written request for proposal (RFP) shall be prepared which describes the agency's requirements and sets forth the evaluation criteria for the procurement. Consideration shall be given to publishing the RFP in a newspaper of general circulation or otherwise advertising the RFP to elicit additional responses from potential providers. The agency shall select the provider offering, as determined in the discretion of the director, the best combination of price, expertise, and other relevant factors. The director shall make a written determination, supported by the following reasons, that the selected provider is best qualified to provide the particular services being procured by the agency:

(a) competence to perform the services as reflected by technical training and education, general experience, experience in providing the required services and the qualifications and competence of persons who would be assigned to perform the services;

(b) ability to perform the services as reflected by workload and the availability of adequate personnel, equipment, and facilities to perform the services expeditiously;

(c) past performance as reflected by the services of the firm with respect to factors such as responsiveness, control of costs, quality of work, and an ability to meet deadlines; and

(d) a determination that the provider's fees are reasonable.

5. The agency may in its discretion issue contracts for professional services by competitive bid pursuant to R850-11-400 or R850-11-500 instead of utilizing the procedures in this section.

R850-11-400. Bidding Procedures - [Small]Other Procurements.

1. Competitive bids are not required for procurements under [$2,000]$3,000 unless the responsible agency staff member believes that the potential financial benefit to the trust beneficiaries from obtaining bids outweighs the staff time and costs associated with soliciting bids.

2. For procurements over [$2,000]$3,000 and less than $20,000, except for procurements of professional services undertaken pursuant to R850-11-300, the responsible agency staff member shall seek to obtain no less than two competitive bids. Bids may be solicited and received by telephone, but shall be noted in writing by the responsible agency staff member.

3. The provider offering the lowest bid shall be selected unless the director [or responsible assistant director ]makes a written determination that a provider submitting a higher bid is better qualified to provide the particular services being procured by the agency.

4. Nothing in this rule shall prevent the agency from using existing statewide contracts for supplies, services and construction as set forth in R33-3-301(2).

R850-11-450. Bidding Procedures - Large Contracts.

1. For procurements [of services ]anticipated to exceed $20,000, except for procurements of professional services undertaken pursuant to R850-11-300, the agency shall prepare a written request for proposals (RFP) or invitation to bid describing information required by the agency in evaluating the proposal, which may include a description of the services required, a statement of the provider's experience and qualifications, any performance schedule or deadlines, billing rates, bid specifications, and other information relevant to the particular project.

2. The responsible agency staff member shall seek to obtain at least three written responses to the RFP. Consideration shall be given to publishing the RFP in a newspaper of general circulation or otherwise advertising the RFP to elicit additional responses from potential providers.

3. The provider offering the lowest bid shall be selected unless the director [or the responsible assistant director ]makes a written determination, supported by detailed reasons, that a provider submitting a higher bid is better qualified to provide the particular services being procured by the agency.[

4. For contracts involving the provision of services where the scope or duration of the services have not been determined at the time of procurement, the agency shall select the provider offering, as determined in the discretion of the director or the responsible assistant director, the best combination of price, expertise, and other relevant factors. The director or the responsible assistant director shall make a written determination, supported by detailed reasons, that the selected provider is best qualified to provide the particular services being procured by the agency.

5. For all procurements of construction anticipated to exceed $50,000, the agency shall consult with the Division of Purchasing in advance of public dissemination of the RFP or bid documents.]

R850-11-500. Sole Source Procurements.

Where the agency has identified a provider that has special familiarity or qualifications with respect to a project, or that has previously worked on a related project, the agency may hire the provider without soliciting bids from other providers if the director [or responsible assistant director ]finds in writing that hiring the particular provider is in the best interests of the trust beneficiaries, and that the provider's fee is reasonable.

R850-11-600. Real Estate Brokerage Services.

1. The agency is not required to solicit bids for real estate brokerage services, and may list trust lands with a licensed Utah broker as it sees fit.

2. Where the agency has not listed a property with a broker, but has undertaken internal marketing efforts, the agency is authorized but not obligated to pay a commission or finder's fee no greater than the prevailing market rates in the area to real estate brokers who have previously registered their client as directed by the agency, and who are the procuring cause of:

(a) the sale of trust lands; or

(b) a development transaction entered into by the agency pursuant to R850-140.

3. Commission amounts will be determined in the discretion of the agency based on type of transaction, prevailing market conditions, and any other relevant factors.

R850-11-700. Debt and Equity Investments.

Debt and equity investments made by the agency shall be exempt from the Utah Procurement Code, provided that such investments are part of a development transaction [approved]reviewed by the board and entered into by the agency pursuant to R850-140.

R850-11-800. Documentation.

The agency will determine, based on the type of service requested and complexity of the project, the level of contractual documentation necessary in order to adequately protect the best interests of the trust. Formal contract documentation shall be subject to approval as to form by a representative of the attorney general's office.

R850-11-900. Bonding for Construction Services.

1. For construction services costing $50,000 or higher, the agency shall require the chosen provider to deliver to the agency a performance bond and a payment bond in amounts equal to 100% of the price specified in the contract and executed by a surety company authorized to do business in this state or in any other form satisfactory to the agency;

2. For construction services costing less than $50,000, the agency may require a performance bond and a payment bond as described in R850-11-700(1) if it determines that requiring such bonds is in the best interests of the trust.

R850-11-1000. Conflicts of Interest.

The agency shall not enter into any contract with a provider which violates or, on account of the factual circumstances or person involved, gives the appearance of a conflict of interest or a potential violation of the Utah Public Officer's and Employee's Ethics Act.

R850-11-1100. Appeals.

Appeals of agency procurement decisions shall be governed by Part H of Title 63, Chapter 56. All initial appeals shall be directed to the director of the agency, with a copy to the Director of the Division of Purchasing. The disposition of any appeal shall take into account the intended purpose of [Section]Subsection 53C-1-201(3)(a)(iv), which is to provide the agency with broad discretion and flexibility in procurement to facilitate businesslike management of trust lands.

KEY: government purchasing

[March 17, 2000]October 18, 2005

Notice of Continuation April 24, 2002

[53C-1-201(3)(a)(iv)]53C-1-201(3)

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact John W. Andrews at the above address, by phone at 801-538-5180, by FAX at 801-355-0922, or by Internet E-mail at jandrews@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.