Procurement Methods

(1) Procurement Methods-Generally (a) A procurement method for a given good or service shall be chosen based on the following considerations and minimum requirements: 1. All goods or services shall be procured by a method that the Chief Procurement Officer has determined to be in the State’s best interests. (i) Contracts shall be procured on a competitive basis where practicable, however, there are situations where a contract for goods or services on terms and conditions most favorable to the State cannot be procured using a competitive procurement method. In such an event, the Chief Procurement Officer may use a non-competitive procurement method if doing so is in the State’s best interests. The request and justification to use a non-competitive procurement method must be documented as prescribed by Central Procurement Office Policy. (ii) The Central Procurement Office or Delegated State Agency shall document and retain a record of the procurement process, including any negotiations upon which each contract is based, as prescribed by Central Procurement Office Policy. (iii) All responses, irrespective of procurement method chosen, shall be evaluated in accordance with the terms of the solicitation. (2) Request for Proposals (“RFP”). (a) An RFP shall comply with the following requirements: 1. The Central Procurement Office or Delegated State Agency shall prepare and issue an RFP and evaluate proposals in accordance with these Rules and Central Procurement Office Policy. The Chief Procurement Officer, in his or her sole discretion, shall determine whether an RFP that does not comply with these Rules and Central Procurement Office Policy requires rejection of the responses or cancellation of the RFP and rejection of all responses. (i) A RFP shall contain the major categories to be considered in the evaluation of proposals together with the relative weight of each category. Those criteria shall include qualifications and experience, technical approach, and price as prescribed by Central Procurement Office Policy. (ii) The Central Procurement Office or Delegated State Agency shall carefully consider all persons involved with the development, formulation, drafting, or review of a RFP and safeguard against any perceived or actual conflicts of interest. (iii) The Central Procurement Office, Delegated State Agency, or other necessary State officials or entities, as required by applicable law, shall approve all RFPs and any addenda, amendments, and clarifications to RFPs before their public release. Except as otherwise delegated, a RFP or COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE its revisions shall be approved by the Central Procurement Office based on the following: (I) Application of the requirements of these Rules and Central Procurement Office Policy; (II) Adequacy of the scope description; and (III) Adequacy of the RFP’s assurance of: I. Fairness to respondents; II. Clear, fair and open competition; III. Achievement of procurement objectives; and IV. Protection of the State’s interests. (iv) Upon approval, the Central Procurement Office or Delegated State Agency shall post the solicitation on the designated website of the Central Procurement Office. The posting of the solicitation on the designated website of the Central Procurement Office is the official public notice. All other forms of notice are merely a courtesy to the public and do not constitute official notice of a solicitation. (v) After the technical proposal evaluation is completed, the cost proposal may be opened and evaluated, and the scores of both proposals may be combined to arrive at a total evaluation score. The Central Procurement Office may, as approved by the Chief Procurement Officer, determine the instances where a cost proposal may be evaluated contemporaneously with or prior to evaluation of the technical proposal. (vi) Proposal evaluations shall be impartial and ensure that all material requirements of the RFP have been met. (I) Proposals shall be evaluated consistent with these Rules and Central Procurement Office Policy. (II) Prior to reviewing proposals, each Proposal Evaluation Team member shall review a list of persons making proposals and determine if the member has a conflict of interest with serving on the Proposal Evaluation Team. Each member shall sign a conflict of interest statement as required by Central Procurement Office Policy. The conflict of interest statement shall be retained in the procurement file. (III) Proposals shall be evaluated based on criteria set forth in the RFP and on the basis of factors pertinent to the goods or services being procured. (IV) The Central Procurement Office or Delegated State Agency shall award a contract to the respondent whose response receives the highest evaluation score. COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE (V) Contract awards to a respondent other than the respondent receiving the highest evaluated score may only be awarded pursuant to Central Procurement Office Policy. Justification for the contract award and approvals shall be documented in the procurement file maintained by the Central Procurement Office. (3) Invitation to Bid. (a) The Central Procurement Office or Delegated State Agency may issue an invitation to bid that requests sealed bids. All procurements utilizing an invitation to bid method of procurement shall be conducted in accordance with these Rules and Central Procurement Office Policy. (4) Informal Written, Verbal or Telephone Quotations. (a) Informal procurement methods through use of written, verbal or telephone quotations for one-time purchases or contracts with a total value not to exceed current statutory maximum amounts may be utilized by a Delegated State Agency subject to approval or delegation in accordance with these Rules and Central Procurement Office Policy. Any such bid, proposal or record of the quotation shall be made part of the procurement file. (5) Emergency Purchases. (a) The Central Procurement Office or Delegated State Agency may make purchases of goods or services in the open market to meet emergencies arising from an unforeseen cause. Emergency purchases shall be made by contract in accordance with Central Procurement Office Policy and utilize competitive procurement methods or negotiations whenever practicable. The procuring agency shall maintain a procurement file that addresses the following: (b) The circumstances leading to the emergency procurement; (c) Procurement-related actions taken in response to the emergency, including procurement methods used; and (d) A complete list of goods or services procured, including prices paid and total purchase amount. (6) Sole Source Procurement. (a) Whenever practicable, procurements should be competitive. Sole source procurements may be made when an item or service possesses specific characteristics that can only be filled by a single source or where exclusive rights exist. Sole source procurements shall require the State Agency to provide advance justification to the Central Procurement Office in accordance with Central Procurement Office Policy. Whenever practicable, competitive procurement methods, including competitive negotiation, should be used. All sole source procurements, regardless of the dollar amount, require the Chief Procurement Officer’s prior approval. Reporting of sole source procurements shall be provided to the Comptroller of the Treasury in such form and time period as prescribed in Central Procurement Policy. The Chief Procurement Officer in approving the use of a sole source method of procurement shall consider and adequately document in the procurement file the following: COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE 1. Whether the vendor possesses exclusive or predominant capabilities or the item or service contains features providing a superior utility not obtainable from similar vendors; 2. Whether the product or service is unique and available from only one source; 3. Whether the program requirements can be modified so that competitively procured goods or services may be used; 4. Whether items must be interchangeable or compatible with in-place items; 5. Whether or not it is in the State’s best interests to conduct a pilot program for a defined period of time; or 6. Whether the economics, technical aspects, or other facts and circumstances of the procurement in question make the use of a sole source procurement method a more prudent choice than a competitive procurement method. (7) Proprietary Procurement. Proprietary Procurement. (a) Proprietary procurements may be made for a service or a product that is manufactured and marketed by a person or persons having the exclusive right to provide the service or manufacture or sell the product in which resellers are granted the right to sell. The State Agency shall provide justification to the Central Procurement Office in accordance with Central Procurement Office Policy. All proprietary procurements, regardless of the dollar amount require the Chief Procurement Officer’s prior approval. All proprietary procurements shall be executed using procurement methods consistent with these Rules and Central Procurement Office Policy. Reporting of proprietary procurements shall be provided to the Comptroller of the Treasury in such form and time period as prescribed in Central Procurement Policy. (8) Competitive Negotiation. (a) A contract may be procured by competitive negotiation when the needed goods or services cannot be procured by competitive sealed bid. All negotiations and communications shall be conducted in accordance with these Rules and Central Procurement Office Policy. The Chief Procurement Officer and the Comptroller of the Treasury shall approve the use of competitive negotiation as a method of procurement. Once the negotiations have been concluded, a recommendation shall be made by the negotiating team to the Chief Procurement Officer and the Comptroller of the Treasury prior to entering into a contract. (9) Direct Negotiation-General Services Administration. (a) When a vendor maintains a General Services Administration agreement with the United States of America, or any agency thereof, the Chief Procurement Officer may directly negotiate with that vendor. The price shall not be higher than that contained in the contract between the General Services Administration and the vendor affected. (10) Utility Contracts. (a) The Central Procurement Office shall purchase or contract for all telephone, telegraph, electric light, gas, power, postal, or other services for which a rate has been established by a public authority. All such contracts shall be procured in such a manner as the Chief Procurement Officer deems to be in the best interests of the State of Tennessee. Each such purchase or contract shall be made on a competitive basis, COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE where practicable, in accordance with these Rules and Central Procurement Office Policy. If the Chief Procurement Officer determines that such procurement is only available from a single source or is proprietary, the use of a sole source or proprietary method of procurement may be utilized. Authority: T.C.A. §§ 4-56-102, 4-56-105, 12-3-501, § 12-3-502, 12-3-504, 12-3-505, 12-3-506, § 12-3- 507, and 12-3-508. Administrative History: Original rule filed February 5, 1982; effective June 1, 1982. Amendment filed January 24, 1986; effective April 15, 1986. Repeal and new rule filed November 25, 1987; effective February 28, 1988. Repeal and new rule filed October 22, 2013; effective January 20, 2014. 0690-03-01.06 PROCUREMENT PROCESS-ELEMENTS OF SOLICITATION DOCUMENT AND PROCESS PRIOR TO AWARD. (1) Solicitations-Elements. Each written solicitation shall contain the following elements at a minimum: (a) The description of the technical requirements for the goods or scope of services to be procured; (b) Terms and conditions that clearly state the requirements for response and language to bind the parties in the event of award; (c) Clear and definitive technical requirements and scope that allow for open competition where practicable; (d) The solicitation shall contain directions regarding the submittal of proposals; (e) Instructions for packaging, shipping, and delivering commodities purchased and instructions for storage by the vendor, where applicable or appropriate; (f) Any requirements for proposal, performance or payment bonds; (g) A timeline of the solicitation process that specifies the solicitation deadlines; A detailed description of the evaluation factors to be considered in evaluating the proposals, e.g., by way of example only, proposer qualifications, experience, technical approach, and cost; (h) A declaration of whether the contract award is subject to successful contract negotiation; (i) A statement that the Chief Procurement Officer shall have the sole discretion to amend a solicitation in writing at any time prior to award; and (j) An estimate of the purchase requirements for the current contract period, if applicable and for the new contract period if the solicitation will result in an agency or statewide term contract. (2) Inspection of Solicitation File. (a) Each solicitation shall contain a schedule indicating the dates and times for solicitation opening, the timeline for evaluation and the anticipated Award date. Once the state issues the Notice of Intent to Award, the Open File Period begins. The solicitation file shall be open for public inspection for seven (7) calendar days upon request. The Central Procurement Office or a Delegated State Agency shall give the requestor a COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE reasonable opportunity to inspect the solicitation file. If there is no protest of the Notice of Intent to Award, the State will proceed with the contract award. (3) Cancellation of Solicitation or Rejection of Responses. (a) The Chief Procurement Officer shall have the discretion to cancel a solicitation in its entirety and reissue the solicitation in whole or in part as documented and approved by any other approval authority of the original solicitation. (b) The Chief Procurement Officer shall have the discretion to reject any and all responses. 1. Any response that does not meet the requirements of a solicitation may be considered nonresponsive and the response may be rejected. 2. Any response that restricts the rights of the State or otherwise qualifies the proposal may be considered nonresponsive and the response may be rejected. 3. All responses may be rejected by the Chief Procurement Officer or Delegated State Agency for the following reasons: (i) Unreasonably high prices or failure of all responses to meet technical specifications; (ii) Error or defect in the solicitation; (iii) Cessation of need; (iv) `Unavailability of funds; (v) Lack of adequate competition; or (vi) A determination by the State Agency, with the concurrence of the Chief Procurement Officer and any other approval authority, that proceeding with the procurement would be detrimental to the best interests of the State. 4. Rejection of all responses and any approvals required shall be documented and an explanation shall be provided as to the reasons for the rejection of all responses. 5. A report of rejected responses and cancelled solicitations shall be reported in such format and timetable as requested by the Comptroller of the Treasury. Authority: T.C.A. § 4-56-102, 4-56-105, 12-3-305, and 12-3-502. Administrative History: Original rule filed February 5, 1982; effective June 1, 1982. Amendment filed January 24, 1986; effective April 15, 1986. Repeal and new rule filed November 25, 1987; effective February 28, 1988. Repeal and new rule filed October 22, 2013; effective January 20, 2014. 0690-03-01.07 PROCUREMENT PROCESS-PROPOSAL AND PERFORMANCE BONDS. (1) Proposal Bond. (a) The Chief Procurement Officer may require, in his or her sole discretion, a proposal bond issued by a surety company licensed to do business in the State of Tennessee. All proposal bond amounts shall be stated as a set amount or as a percentage of the COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE contract value. In no event shall the proposal bond amount exceed five percent (5%) of the estimated value of the contract. Proposal bonds submitted by unsuccessful respondents shall be returned upon contract award. Personal checks shall not be accepted in the place of proposal bonds. Other forms of security to guarantee a proposal bond may include an irrevocable letter of credit or a certificate of deposit or cashier’s check from a state or national bank or a state or federal savings and loan association or other financial institution having a physical presence in Tennessee. The terms and conditions of all forms of security to guarantee a proposal bond shall be approved by the Chief Procurement Officer before they are accepted as security for the respondent’s performance. (2) Performance Bond. (a) The Chief Procurement Officer may require, in his or her absolute discretion, a performance bond issued by a surety company licensed to do business by the State of Tennessee. All performance bond amounts shall be stated as a set amount or as a percentage of the contract value, and the amount may be reduced proportionately as performance under the contract successfully moves forward. Performance bonds must be filed with the State of Tennessee within fourteen (14) calendar days after receipt of request by the Chief Procurement Officer or a Delegated State Agency. Personal checks shall not be accepted in the place of performance bonds. Other forms of security to guarantee performance may include an irrevocable letter of credit or a certificate of deposit or cashier’s check from a state or national bank or a state or federal savings and loan association or other financial institution having a physical presence in Tennessee. The terms and conditions of all irrevocable letters of credit or certificates of deposit shall be approved by the Chief Procurement Officer before they are accepted as security for the Contracting Party’s performance. Authority: T.C.A. §§ 4-56-102, 4-56-105, and 12-3-502. Administrative History: Original rule filed February 5, 1982; effective June 1, 1982. Amendment filed January 24, 1986; effective April 15, 1986. Repeal and new rule filed November 25, 1987; effective February 28, 1988. Repeal and new rule filed October 22, 2013; effective January 20, 2014. 0690-03-01.08 PROCUREMENT PROCESS-COMMUNICATION AND NEGOTIATION. (1) To ensure a transparent, consistent and equitable process in accordance with Central Procurement Office Policy, the Chief Procurement Officer may conduct communications as he or she determines to be in the best interests of the State, provided that any communication, clarification, or negotiation that may take place regarding any procurement or contract shall be conducted in a manner so as not to disclose any information that would give one or more respondents an unfair advantage or unfairly enable one or more respondents to improve their responses as a result and documented in the procurement file to support the final determination based on the information requested. Authority: T.C.A. §§ 4-56-102 and 4-56-105. Administrative History: Original rule filed February 5, 1982; effective June 1, 1982. Amendment filed January 24, 1986; effective April 15, 1986. Repeal and new rule filed November 25, 1987; effective February 28, 1988. Repeal and new rule filed October 22, 2013; effective January 20, 2014. COMPREHENSIVE RULES AND REGULATIONS OF THE CHAPTER 0690-03-01 CENTRAL PROCUREMENT OFFICE 0690-03-01.09 PROCUREMENT PROCESS–DETERMINING NON-RESPONSIVENESS. (1) If the Central Procurement Office determines that a respondent has provided, for consideration in a contractor selection process or in negotiations, information that does not meet the technical requirements of the solicitation, where the respondent knew or should have known the submitted information was materially defective due to the omission of information or the submission of incorrect information, the subject response may be determined nonresponsive and rejected as prescribed in Central Procurement Policy. Authority: T.C.A. §§ 4-56-102, 4-56-105, 12-3-502. Administrative History: Original rule filed February 5, 1982; effective June 1, 1982. Amendment filed January 24, 1986; effective April 15, 1986. Repeal and new rule filed November 25, 1987; effective February 28, 1988. Repeal and new rule filed October 22, 2013; effective January 20, 2014. 0690-03-01.10 PROCUREMENT PROCESS-AMENDMENT OR WITHDRAWAL OF RESPONSES. (1) A respondent may withdraw or amend a response in writing prior to its opening. After responses are opened, a respondent may only withdraw all or a portion of a response where the enforcement of the response would impose an unconscionable hardship on the respondent or as prescribed in Central Procurement Office Policy. Any decision to allow withdrawal or amendment of a response shall be documented in the solicitation file.