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    TITLE VICHAPTER 117PROCUREMENT OF GOODS AND SERVICES OF GENERAL USE[Prior to 10/29/03, see 401—Chapters 7, 8, and 9][Prior to 8/18/04, see 471—Chapter 13][Prior to 8/21/13, see 11—Chapter 105]11—117.1(8A)  General provisions.    117.1(1)    Applicability.    a.    Goods and services of general use.  Under the provisions of Iowa Code chapter 8A, these rules apply to the purchase of goods and services of general use by any unit of the state executive branch including a commission, board, institution, bureau, office, agency or department, except items used by the state department of transportation, institutions under the control of the board of regents, the department for the blind, and any other agencies or instrumentalities of the state exempted by law.  b.    Services.  Procurement of services shall also meet the provisions of Iowa Administrative Code, 11—Chapters 118 and 119.  c.    Information technology.  Pursuant to Iowa Code chapter 8A, procurement of information technology devices and services by participating agencies shall also meet the requirements of rule 11—117.11(8A). Rule 11—117.11(8A) shall apply to:  (1)  The process by which the department shall ensure effective and efficient compliance with standards prescribed by the department with respect to the procurement of information technology devices and services by participating agencies, and  (2)  The acquisition of information technology devices and services by the department for the department or by the department for a participating agency that has requested that the department procure information technology devices or services on the agency’s behalf.  117.1(2)    Funding.  The department and agencies shall follow procurement policies regardless of the funding source supporting the procurement. However, when these rules prevent the state from obtaining and using a federal grant, these rules are suspended to the extent required to comply with the federal grant requirements.  117.1(3)    Electronic processing.  Notwithstanding other administrative rules, requirements for paper transactions in the procurement of goods and services shall be waived when an alternative electronic process is available. If the vendor is unable to use the electronic process, an alternative paper process may be available.Related ARC(s): 0952C, 2036C11—117.2(8A)  Definitions.  
    "Acquisition" "acquire" is defined in the same manner as “procurement,” “procure,” or “purchase.”
    "Agency" "state agency" means a unit of state government, which is an authority, board, commission, committee, council, department, examining board, or independent agency as defined in Iowa Code section 7E.4, including but not limited to each principal central department enumerated in Iowa Code section 7E.5. However, “agency” or “state agency” does not mean any of the following:
    1. The office of the governor or the office of an elective constitutional or statutory officer.
    2. The general assembly, or any office or unit under its administrative authority.
    3. The judicial branch, as provided in Iowa Code section 602.1102.
    4. A political subdivision of the state or its offices or units, including but not limited to a county, city, or community college.
    "All or none" means an award based on the total for all items included in the solicitation.
    "American-based business" means an entity that has its principal place of business in the United States of America.
    "American-made product" means product(s) produced or grown in the United States of America.
    "American motor vehicles" means those vehicles manufactured in this state and those vehicles in which at least 70 percent of the value of the motor vehicle was manufactured in the United States or Canada and at least 50 percent of the motor vehicle sales of the manufacturer are in the United States or Canada.
    "Award" means the selection of a vendor to receive a master agreement or order of a good or service.
    "Bid specification" means the standards or qualities which must be met before a contract to purchase will be awarded and any terms which the director has set as a condition precedent to the awarding of a contract.
    "Board" means the technology governance board established by Iowa Code section 8A.204.
    "Competent and qualified" means an architect or engineer who, at the sole discretion of the department, has the capability in all respects to satisfactorily perform the scope of services required by the proposed contract in a timely manner.
    "Competitive bidding procedure" means the advertisement for, solicitation of, or the procurement of bids; the manner and condition in which bids are received; and the procedure by which bids are opened, accessed, evaluated, accepted, rejected or awarded. A “competitive bidding procedure” refers to all types of competitive solicitation processes referenced in this chapter and may include a transaction accomplished in an electronic format.
    "Competitive selection documents" means documents prepared for a competitive selection by a department or agency to purchase goods and services. Competitive selection documents may include requests for proposal, invitations to bid, or any other type of document a department or agency is authorized to use that is designed to procure a good or service for state government. A competitive selection document may be an electronic document.
    "Department" means the department of administrative services (DAS).
    "Director" means the director of the department of administrative services or the director’s designee.
    "Emergency" includes, but is not limited to, a condition:
    1. That threatens public health, welfare or safety; or
    2. In which there is a need to protect the health, welfare or safety of persons occupying or visiting a public improvement or property located adjacent to the public improvement; or
    3. In which the department or agency must act to preserve critical services or programs; or
    4. In which the need is a result of events or circumstances not reasonably foreseeable.
    "Emergency procurement" means an acquisition resulting from an emergency need.
    "Enterprise" means most or all state agencies acting collectively, unless it is used in a manner such as “state accounting enterprise,” in which case it means the specific unit of the department of administrative services.
    "Fair and reasonable price" means a price that is commensurate with the extent and complexity of the services to be provided and is comparable to the price paid by the department or other entities for projects of similar scope and complexity.
    "Formal competition" means a competitive selection process that employs a request for proposals or other means of competitive selection authorized by applicable law and results in procurement of a good or service.
    "Good" "goods" means products or personal property other than money that is tangible or movable at the time of purchase, including specially manufactured goods. A contract for goods is a contract in which the predominant factor, thrust, and purpose of the contract as reasonably stated is for the acquisition of goods. When there is a contract for both goods and services and the predominant factor, thrust, and purpose of the contract as reasonably stated is for the acquisition of goods, a contract for goods exists.
    "Goods and services of general use" means goods and services that are not unique to an agency’s program or that are needed by more than one agency. This chapter applies to the purchase of goods and services of general use.
    "Governmental entity" means any unit of government in the executive, legislative, or judicial branch of government; an agency or political subdivision; any unit of another state government, including its political subdivisions; any unit of the United States government; or any association or other organization whose membership consists primarily of one or more of any of the foregoing.
    "Informal competition" means a streamlined competitive selection process in which a department or agency makes an effort to contact at least three prospective vendors identified by the department or purchasing agency as qualified to perform the work described in the scope of work to request that they provide bids or proposals for the delivery of the goods or services the department or agency is seeking.
    "Information technology device" means equipment or associated software, including programs, languages, procedures, or associated documentation, used in operating the equipment which is designed for utilizing information stored in an electronic format. “Information technology device” includes but is not limited to computer systems, computer networks, and equipment used for input, output, processing, storage, display, scanning, and printing.
    "Information technology services" means services designed to provide functions, maintenance, and support of information technology devices, or services including but not limited to computer systems application development and maintenance; systems integration and interoperability; operating systems maintenance and design; computer systems programming; computer systems software support; planning and security relating to information technology devices; data management consultation; information technology education and consulting; information technology planning and standards; and establishment of local area network and workstation management standards.
    "Iowa-based business" means an entity that has its principal place of business in Iowa.
    "Iowa product" means a product(s) produced or grown in Iowa.
    "Life cycle cost" means the expected total cost of ownership during the life of a product, including disposal costs.
    "Limited scope" means only a few specific services are required for a project. An example is a project for which all existing conditions and parameters are clearly evident or defined in a request for proposal, such as a project calling for development of specifications and bidding documents for replacement of an existing boiler.
    "Lowest responsible bidder" means the responsible bidder that is fully compliant with the requirements and terms of the competitive selection document and that submits the lowest price(s) or cost(s).
    "Master agreement" means a contract competitively bid and entered into by the department which establishes prices, terms, and conditions for the purchase of goods and services of general use. These contracts may involve the needs of one or more state agencies. Agencies may purchase from a master agreement without further competition. Master agreements (also referred to as “master contracts”) for a particular item or class of items may be awarded to a single vendor or multiple vendors. The department is the sole agency authorized to enter into master agreements for goods and services of general use.
    "Material modification" relating to an approved IT procurement means a change in the procurement of 10 percent or $50,000, whichever is less, or a change of sufficient importance or relevance so as to have possible significant influence on the outcome.
    "Negotiated contract" means a master agreement for a procurement that meets the requirements of Iowa Code section 8A.207(4)“b.”
    "Newspaper of general circulation" means a newspaper meeting the definition set forth in Iowa Code section 618.3.
    "Operational standards" means information technology standards established by the department according to Iowa Code sections 8A.202 to 8A.207 that include but are not limited to specifications, requirements, processes, or initiatives that foster compatibility, interoperability, connectivity, and use of information technology devices and services among agencies.
    "Order" means a direct purchase or a purchase from a state contract or master agreement.
    "Participating agency," applicable only to information technology purchases, means any agency other than:
    1. The state board of regents and institutions operated under its authority;
    2. The public broadcasting division of the department of education;
    3. The department of transportation’s mobile radio network;
    4. The department of public safety law enforcement communications systems and capitol complex security systems in use for the legislative branch;
    5. The Iowa telecommunications and technology commission, with respect to information technology that is unique to the Iowa communications network;
    6. The Iowa lottery authority; and
    7. A judicial district department of correctional services established pursuant to Iowa Code section 905.2.
    "Printing" means the reproduction of an image from a printing surface made generally by a contact impression that causes a transfer of ink, the reproduction of an impression by a photographic process, or the reproduction of an image by electronic means and shall include binding and may include material, processes, or operations necessary to produce a finished printed product, but shall not include binding, rebinding or repairs of books, journals, pamphlets, magazines and literary articles by a library of the state or any of its offices, departments, boards, and commissions held as a part of their library collection.
    "Printing equipment" means offset presses, gravure presses, silk-screen equipment, large format ink jet printers, digital printing/copying equipment, letterpress equipment, office copiers and bindery equipment.
    "Procurement,” “procure," "purchase" means the acquisition of goods and services through lease, lease/purchase, acceptance of, contracting for, obtaining title to, use of, or any other manner or method for acquiring an interest in a good or service.
    "Procurement authority" means an agency authorized by statute to purchase goods and services.
    "Purchasing card" means a statewide commercial credit card for electronic purchasing transactions by any agency, department, division, bureau, enterprise, unit or other state entity to facilitate the acquisition of goods, services and select travel expenses.
    "Responsible bidder" means a vendor that has the capability in all material respects to perform the contract requirements. In determining whether a vendor is a responsible bidder, the department may consider various factors including, but not limited to, the vendor’s competence and qualification for the type of good or service required, the vendor’s integrity and reliability, the past performance of the vendor relative to the quality of the good or service, the past experience of the department in relation to the vendor’s performance, the relative quality of the good or service, the proposed terms of delivery, and the best interest of the state.
    "Sealed" means the submission of responses to a solicitation in a form that prevents disclosure of the contents prior to a date and time established by the department for opening the responses. Sealed responses may be received electronically.
    "Service" "services" means work performed for an agency or its clients by a service provider. A contract for services is a procurement where the predominant factor, thrust, and purpose of the contract as reasonably stated is for services. When there is a mixed contract for goods and services, if the predominant factor, thrust, and purpose of the contract as reasonably stated is for service, with goods incidentally involved, a contract for services exists.
    "Software" means an ordered set of instructions or statements that causes information technology devices to process data and includes any program or set of programs, procedures, or routines used to employ and control capabilities of computer hardware. As used in these rules, “software” also includes, but is not limited to, an operating system; compiler; assembler; utility; library resource; maintenance routine; application; or a computer networking program’s nonmechanized and nonphysical components; arrangements; algorithms; procedures; programs; services; sequences and routines utilized to support, guide, control, direct, or monitor information technology equipment or applications; and “data processing software” as defined in Iowa Code section 22.3A(1)“e.”
    "Sole source procurement" means a purchase of a good or service in which the department or agency selects a vendor without engaging in a competitive selection process.
    "Systems software" means software designed to support, guide, control, direct, or monitor information technology equipment, other system software, mechanical and physical components, arrangements, procedures, programs, services or routines.
    "Targeted small business (TSB)" means a targeted small business as defined in Iowa Code section 15.102 that is certified by the economic development authority pursuant to Iowa Code section 15.108 and as authorized by Iowa Code chapter 73.
    "Upgrade" means additional hardware or software enhancements, extensions, features, options, or devices to support, enhance, or extend the life or increase the usefulness of previously procured information technology devices.
    "Vendor" means a person, firm, corporation, partnership, business or other commercial entity that provides services or offers goods for sale or lease.
    "Vendor on-line system" means a state computer system that enables vendors to conduct business electronically with the state through an Internet location on the World Wide Web.
    "Web" "website" refers to an Internet location on the World Wide Web that provides information, communications, and the means to conduct business electronically.
    Related ARC(s): 0952C, 2036C, 4097C, 4134C, 4182C11—117.3(8A)  Competitive procurement.  It is the policy of the state to obtain goods and services from the private sector for public purposes to achieve value for the taxpayer through a competitive selection process that is fair, open, and objective. Where feasible, common use items will be purchased cooperatively with state agencies having independent procurement authority to leverage economies of scale, add convenience, standardize common items, and increase efficiencies.  117.3(1)    Informal competition.  The department may use informal competition or formal competition for the purchase of any good or service or group of goods or services of general use costing less than $50,000.  117.3(2)    Formal competition.  The department shall use formal competition for the procurement of any good or service or group of goods or services of general use costing $50,000 or more.  117.3(3)    Construction procurement.  Formal competition shall be used for selection of a vendor for construction, erection, demolition, alteration, or repair of a public improvement when the cost of the work exceeds $100,000 or the adjusted competitive threshold established in Iowa Code section 314.1B.  117.3(4)    Purchasing services.  Thresholds for the use of formal or informal competition for the procurement of services are governed by rule 11—118.5(8A).Related ARC(s): 0952C, 1485C11—117.4(8A)  Master agreements.    117.4(1)    Use of master agreements.  The department shall enter into master agreements to procure goods and services of general use for all state agencies with the exception of those purchases made by the state department of transportation, institutions under the control of the board of regents, the department for the blind, and any other agencies exempted by law. If the department has entered into a master agreement for a good or service of general use, a state agency that is not otherwise exempt shall purchase the good or service through the master agreement, unless a comparable good or service is available from a different vendor and the quantity required or an emergency or immediate need makes it cost-effective to purchase from that vendor. If an agency or agencies routinely or on a recurring basis purchase a specific good or service not available through a master agreement, the department may establish a master agreement for that good or service in cooperation with the affected agencies.   117.4(2)    Term of master agreements.  The initial term of a master agreement shall be no more than three years. Following the initial term, a master agreement may be renewed by the department for periods of one to three years; provided, however, that a master agreement, including all optional renewals, shall not exceed a term of six years unless a waiver of this provision is granted pursuant to rule 11—117.21(8A) (goods) or rule 11—118.16(8A) (services).  117.4(3)    Master agreements available to governmental subdivisions.  Master agreements entered into by the department may be extended to and made available for the use of other governmental entities as defined in Iowa Code section 8A.101. The department shall provide a list of current master agreements to a governmental subdivision upon request. The list may be provided in an electronic format. A governmental subdivision may request a copy of a specific master agreement. The department may provide the master agreement in an electronic format and assess a copying charge when a printed copy is requested.Related ARC(s): 2036C11—117.5(8A)  Exemptions from competitive procurement.  The director or designee may exempt goods and services of general use from competitive procurement processes when the procurement meets one of the following conditions. All procurements that are exempt from competitive processes shall be recorded as such, and appropriate justification shall be maintained by the agency initiating the action. Each of the following exemptions from competitive procurement procedures require additional review and approvals.  117.5(1)    Emergency procurement.    a.    Justification for emergency procurement.  An emergency procurement shall be limited in scope and duration to meet the emergency. When considering the scope and duration of an emergency procurement, the department or agency should consider price and availability of the good or service procured so that the department or agency obtains the best value for the funds spent under the circumstances. The department and agencies shall attempt to acquire goods and services of general use with as much competition as practicable under the circumstances.  b.    Special procedures required for emergency procurements.  Justification for the emergency purchase shall be documented and submitted to the director or designee for approval. The justification shall include the good or service that is to be or was purchased, the cost, and the reasons the purchase should be or was considered an emergency.  117.5(2)    Targeted small business (TSB) procurement.    a.    Justification for TSB procurement.  Agencies may purchase from a TSB without competition for a purchase up to $25,000 if the purchase would contribute to the agency complying with the targeted small business procurement goals under Iowa Code sections 73.15 through 73.21.  b.    Special procedures for TSB procurements.  Agencies must confirm that the vendor is certified as a TSB by the economic development authority. An agency may contact the TSB directly.  c.    Reporting requirements for TSB procurement.  By December 1 of each year, each agency shall provide the department with an annual report of procurements made in the previous fiscal year pursuant to paragraph 117.5(2)“a.” The annual report will be in a format prescribed by the department.  117.5(3)    Iowa Prison Industries (IPI) procurement.    a.    Justification for IPI procurement.  If IPI manufactures or formulates a product, agencies shall purchase the product from IPI or obtain a written waiver in accordance with Iowa Code section 904.808, except as otherwise permitted in paragraphs “b” and “c.”  b.    Purchase of standard modular office systems and related components.  Purchase of standard modular office systems and related components and other furniture items shall be in accordance with 11—subrule 100.6(6).  c.    Procurement of product manufactured in Iowa.  An agency may conduct a competitive procurement for a product that IPI manufactures or formulates if the competitive procurement requires that the product must be manufactured in Iowa. In such procurements, IPI shall be allowed to submit a bid to provide the product. If a vendor other than IPI is the lowest responsible bidder, the agency shall obtain written verification that the vendor’s product is manufactured in Iowa before making the award.  d.    Special procedures for IPI purchases.  An agency may contact IPI directly.  117.5(4)    Procurement based on competition managed by other governmental entities.    a.    Justification for procurement based on competition managed by other governmental entities.  The department may utilize a current contract, agreement, or purchase order issued by a governmental entity to establish an enterprise master agreement or make a purchase without further competition. The department may join a contract or agreement let by a purchasing consortium when the department reasonably believes it is in the best interest of the enterprise and reasonably believes the contract, agreement, or order was awarded in a fair and competitive manner.  b.    Special procedures for procurement based on competition managed by other governmental entities.  The department shall notify the other governmental entity and the requesting agency of its intent to use a contract, agreement, or purchase order prior to procuring the good or service in this manner. The department may purchase goods or services from contracts let by other governmental entities provided that the vendor is in agreement and the terms and conditions of the purchase do not adversely impact the governmental entity which was the original signatory to the contract.  117.5(5)    Sole source procurement.    a.    Justification for sole source procurement.  A sole source procurement shall be avoided unless clearly necessary and justifiable. The director or designee may exempt the purchase of a good or service of general use from competitive selection processes when the purchase qualifies as a sole source procurement as a result of the following circumstances:  (1)  One vendor is the only one qualified or eligible or is quite obviously the most qualified or eligible to provide the good or service; or  (2)  The procurement is of such a specialized nature or related to a specific geographic location that only a single source, by virtue of experience, expertise, proximity, or ownership of intellectual property rights, could most satisfactorily provide the good or service; or  (3)  Applicable law requires, provides for, or permits use of a sole source procurement; or  (4)  The federal government or other provider of funds for the goods and services being purchased (other than the state of Iowa) has imposed clear and specific restrictions on the use of the funds in a way that restricts the procurement to only one vendor; or  (5)  The procurement is an information technology device or service that is systems software or an upgrade, or compatibility is the overriding consideration, or the procurement would prevent voidance or termination of a warranty, or the procurement would prevent default under a contract or other obligation; or  (6)  Other circumstances for services exist as outlined in rule 11—118.7(8A).  b.    Special procedures required for sole source procurement.  For exemption from competitive processes, the requesting agency shall submit to the director justification that the procurement meets the definition of sole source procurement. Use of a sole source procurement does not relieve the department or an agency from negotiating a fair and reasonable price, investigating the vendor’s qualifications and any other data pertinent to the procurement, and thoroughly documenting the action. The agency initiating the procurement shall maintain in a file attached to the order the justification and response from the director. The justification, response, and order shall be available for public inspection.Related ARC(s): 0952C, 2036C, 3676C, 4097C, 4845C11—117.6(8A)  Preferred products and vendors.    117.6(1)    Preference to Iowa products and services.    a.  All requests for proposals for materials, products, supplies, provisions and other needed articles and services to be purchased at public expense shall not knowingly be written in such a way as to exclude an Iowa-based company capable of filling the needs of the purchasing entity from submitting a responsive proposal.  b.  The department and state agencies shall make every effort to support Iowa products when making a purchase. Tied responses to solicitations, regardless of the type of solicitation, shall be decided in favor of the Iowa products. Tied bids between Iowa products shall be decided in accordance with subrule 117.13(4).  117.6(2)    Preference to Iowa-based businesses.  The department and state agencies shall make every effort to support Iowa-based businesses when making a purchase. Tied responses to solicitations, regardless of the type of solicitation, shall be decided in favor of the Iowa-based business. Tied bids between Iowa-based businesses shall be decided in accordance with subrule 117.13(4).  117.6(3)    American-made products.  The department and agencies shall make every effort to support American-made products when making a purchase. Tied responses to solicitations, regardless of the type of solicitation, shall be decided in favor of the American-made product. Tied bids between American-made products shall be decided in accordance with subrule 117.13(4).  117.6(4)    American-based businesses.  The department and agencies shall make every effort to support American-based businesses when making a purchase. Tied responses to solicitations, regardless of the type of solicitation, shall be decided in favor of the American-based business. Tied bids between American-based businesses shall be decided in accordance with subrule 117.13(4).  117.6(5)    Recycled product and content.  The department and agencies shall make every effort to protect Iowa’s environment in the procurement of goods. Recycled goods and goods that include recycled content shall be acquired when those goods are available and comparable in quality, performance, and price and there are not other mitigating factors. As required by Executive Order Number 56, the department and agencies shall whenever possible procure durable items that are readily recyclable when discarded, have minimal packaging, and are less toxic.  117.6(6)    Products made by persons with disabilities.  The department and agencies shall make every effort to procure those products for sale by sheltered workshops, work activity centers, and other special programs funded in whole or in part by public moneys that employ persons with mental retardation, other developmental disabilities, or mental illness if the products meet the required specifications.  117.6(7)    Targeted small businesses.  The department and agencies may buy from a targeted small business if a targeted small business is able to provide the good or service, pursuant to Iowa Code section 73.20. Related ARC(s): 0952C, 2036C, 4182C11—117.7(8A)  Centralized procurement authority and responsibilities.    117.7(1)    Centralized procurement of goods and services of general use.  The department shall procure goods and services of general use for all state agencies with the exceptions of those purchases made by the state department of transportation, institutions under the control of the board of regents, the department for the blind, and any other agencies exempted by law.  117.7(2)    Delegation of procurement authority.  The department shall establish guidelines for implementation of procurement authority delegated to agencies. The department shall assist agencies in developing purchasing and purchasing card procedures consistent with central purchasing policy and procedures and recommended governmental procurement standards.  117.7(3)    Planning, research, and development.  The director may establish advisory groups and customer councils of agency representatives appointed by the respective agency directors to assist the department in procurement planning and research and to advise on policies, procedures, and financing. This advice includes, but need not be limited to, market research, product specifications, terms and conditions; purchasing rules and guidelines; purchasing system development; and equitable financing of the enterprise purchasing system. The department will provide staff support for any advisory groups and councils that are created.The department may periodically require forecasts from state agencies and institutions regarding future procurements. When requesting forecasts, the department shall assist agencies in securing and analyzing historical information related to previous purchasing activity.  117.7(4)    Purchasing card program.  The department shall establish and administer a purchasing card program available to any state agency, department, division, bureau, enterprise, unit or other state entity to facilitate the acquisition of goods, services and select travel expenses. The department shall establish program policies and procedures in accordance with state procurement and accounting policies, and any applicable statutory and regulatory authority. Except for state vehicle fuel purchase cards assigned by the department, the purchasing card shall be the only commercial credit card authorized by the department. Related ARC(s): 0952C, 2036C, 4182C11—117.8(8A)  Notice of solicitations.    117.8(1)    General notification.    a.    Bid posting.  The department and each state agency shall provide notice of solicitations. The department and each state agency shall post notice of every formal competitive bidding opportunity and proposal to the official Internet site, bidopportunities.iowa.gov, operated by the department in accordance with Iowa Code sections 73.2, 8A.311, and 362.3. Instead of direct posting, the agency may add a link to bidopportunities.iowa.gov that connects to the website maintained by the agency on which requests for bids and proposals for that agency are posted. For the purposes of this subrule, a formal solicitation is as defined by the appropriate procurement authority. Informal competitive bidding opportunities and proposals may also be posted on or linked to the official state Internet site operated by the department.  b.    Other forms of notice.  Notice of competitive bidding opportunities and proposals may be provided by telephone or fax, in print, or by other means that give reasonable notice to vendors, in addition to the posting or linking of formal solicitations to the official Internet site operated by the department.  c.    Posting of requests for architectural and engineering services.  A request for proposals for architectural or engineering services may be posted electronically by a department or state agency in addition to other methods of advertisement required by law.  d.    Bids voided.  A formal competitive bidding opportunity that is not preceded by a notice that satisfies the requirements of this subrule is void and shall be rebid. This requirement shall be effective for formal competitive bidding opportunities issued on or after September 1, 2005.  117.8(2)    Targeted small business notification.  State agencies, when using formal competition, shall provide a 48-hour notice of each procurement for goods to the targeted small business portal located at the Iowa economic development authority’s website in conformance with Iowa Code section 73.16(2).  117.8(3)    Direct vendor notification.  All procurement opportunities shall be directly communicated to vendors registered through the state’s electronic procurement system, Vendor Self-Serve (VSS), if the vendors have indicated an interest in the type of good or service that is the subject of the solicitation. The notice shall be sent to the email or fax or other address entered on VSS by the vendor.  117.8(4)    Advertisement of construction procurement.  Construction solicitations shall be published when work is to be done and the cost of the work exceeds $100,000 or the adjusted competitive threshold established in Iowa Code section 314.1B. The department shall publish notice to bidders in accordance with Iowa Code section 26.3.  117.8(5)    Vendor intent to participate.  In the event the department elects to conduct any procurement electronically or otherwise, it may require that vendors indicate their intention to participate in the procurement process.Related ARC(s): 0952C, 1485C, 2036C, 4134C, 4182C11—117.9(8A)  Types of solicitations.  The department may use the following solicitation methods when procuring goods and services of general use for the enterprise.  117.9(1)    Informal competition.    a.    Description of solicitation.  The informal request for bids or proposals may be completed electronically, by telephone or fax, or by other means determined by the department.  b.    Response and evaluation.  Informal bids shall be tabulated, evaluated, documented and attached to the purchase order.  117.9(2)    Formal competition.    a.    Description of solicitation.  A formal request for bids or proposals shall include:  (1)  Bid due date.  (2)  Time of public bid opening.  (3)  Complete description of commodity needed.  (4)  Buyer’s name or code.  b.    Response and evaluation.  Bids submitted shall be sealed until the date and time of opening. All bids received prior to the date and time set forth on the solicitation will be publicly opened and announced at the designated time and place. All responses shall be documented, evaluated, tabulated and available for public inspection.  117.9(3)    Request for bids.  A request for bids shall be used to select the lowest responsible bidder from which to purchase goods and services of general use on the basis of price. Vendors may offer goods and services that equal or exceed the state’s specifications. Bids that do not meet specifications shall be rejected. The state will not give weight to goods and services offered which exceed specifications. When it is feasible to do so and objective data exists to support the state’s decision, the award may be made on a life cycle cost basis.  117.9(4)    Requests for proposals.    a.    Description of solicitation.  The department shall issue a request for proposals whenever a requirement exists for a procurement and cost is not the sole evaluation criterion for selection. The request for proposals shall provide information about a requirement for technical equipment or professional services that is sufficient for the vendor to propose a solution to the requirement. Elements of a request for proposals shall include, but need not be limited to:  (1)  Purpose, intent and background of the requirement.  (2)  Key dates in the solicitation process.  (3)  Administrative requirements for submitting a proposal and format for the proposal.  (4)  Scope of work and performance requirements.  (5)  Evaluation criteria and method of proposal evaluation.  (6)  Contractual terms and conditions.  (7)  Need for a vendor conference.  b.    Response and evaluation.  Proposals submitted shall be sealed until the date and time of opening. All proposals received prior to the date and time of opening will be opened, and the name of the submitting vendor will be announced. The issuing purchasing officer will review proposals for compliance with requirements before the proposals are submitted for evaluation. A request for proposals shall be evaluated according to criteria that are developed prior to the issuance of the request for proposal document and that consist of factors relating to technical capability and the approach for meeting performance requirements; competitiveness and reasonableness of price or cost; and managerial, financial and staffing capability.  117.9(5)    Best and final offer option.    a.    Description of solicitation.  The department reserves the right at its sole discretion to conduct a best and final offer process prior to making an award. The best and final offer process shall be conducted after the receipt of responses to a solicitation and prior to publicly releasing the responses. Any best and final offer process shall not allow material modification of the original solicitation requirements or of the evaluation criteria.The department shall provide to affected vendors instructions that describe in specific terms how the department intends to arrive at the final order or master agreement. The instructions may include modifying the initial offer, updating pricing based on any changes the agency has made, and any added inducements that will improve the overall score in accordance with the evaluation. Other types of solicitations described in this rule may be modified to allow for a best and final offer process.The department may enter into negotiations with the highest ranked vendor or conduct simultaneous negotiations with a number of the most highly ranked vendors whose total scores are relatively close.  b.    Response and evaluation.  A best and final offer shall arrive by the due date and time determined by the department and shall be sealed. Evaluation of best and final offers shall be conducted in the same manner as original cost proposals. Scores on the best and final offer shall replace the score achieved on the original proposal.When negotiating with the highest ranked vendor, the department may accept the vendor’s best and final offer or reject the offer and open negotiations with the next highest ranked vendor. The department shall proceed in the same manner in rank order. If the state is unable to negotiate an agreement with the highest ranked vendor, the state may negotiate a best and final offer agreement with another vendor. A best and final offer agreement accepted from a subsequent vendor must be more favorable to the state than the rejected offer or offers.When negotiating with the highest ranked group of vendors, the department shall request the best and final offer from each. The department shall issue a notice of intent to award that is in the best interest of the enterprise.  117.9(6)    Reverse auction.    a.    Description of solicitation.  The department may purchase goods and services through a reverse auction, a repetitive competitive bidding process that allows vendors to submit one or more bids, with each bid having a lower cost than the previous bid. Notice to vendors shall be given as described in this chapter. The notice shall include the start and ending time for the reverse auction and the method in which it will be conducted.  b.    Response and evaluation.  Vendors intending to participate shall provide to the department a notice of their intent to participate and of their agreement to provide goods or services equal to or exceeding specifications. The department may require vendors to prequalify to participate in a reverse auction. Prequalification may include a requirement to commit to a baseline price.  117.9(7)    Invitation to qualify (ITQ).  The department may prequalify vendors and make available to an agency a list of vendors that are capable of providing the requested service.  a.    Description of solicitation.  The department may prequalify vendors for certain classes of solicitations, including but not limited to:  (1)  Information technology consulting,  (2)  Architectural services, and  (3)  Engineering services.  b.    Notification of ITQ solicitation.  Following institution of a prequalification process, the department may select, in a competitive manner, a prequalified vendor without public notice and without further negotiation of general terms and conditions. A solicitation may be restricted only to prequalified vendors, in addition to the TSB notification required by subrule 117.8(2).  c.    Not an award.  Vendor prequalification is not an award and does not create an obligation on the part of the department.  d.    Purpose.  The department shall use an invitation to qualify process for the purpose of facilitating a subsequent solicitation that uses one of the other methods described in these rules. The purposes of using an invitation to qualify process include but are not limited to the following:  (1)  Standardize state terms and conditions relating to the type of procurement, thereby avoiding repetition and duplication.  (2)  Ensure that prequalified vendors are capable of performing work in a manner consistent with operational standards developed and adopted by the department.  (3)  Implement a pay-for-performance model directly linking vendor payments to defined results as required by Iowa Code section 8.47.  (4)  Consolidate records of vendor qualifications and performance in one location for reference and review.  (5)  Reduce time required for solicitation of proposals from vendors for individual procurements.  e.    Evaluation criteria.  The department shall develop criteria for vendor qualification based upon its own expertise, the recommendations of its advisors, information and research, and the needs of agencies. The department shall develop and specify evaluation criteria for each invitation to qualify. Examples of evaluation criteria may include but are not limited to the following:  (1)  Affirmative responses to a mandatory agreement questionnaire.  (2)  Ratings of at least average on a professional/technical personnel questionnaire.  (3)  Scores in a specified range for each client reference survey.  (4)  Competitive cost data by type of service.  (5)  Acceptable vendor financial information.  f.    Issuance of open invitation.    (1)  The department shall issue invitations to qualify on an as-needed basis.  (2)  The department shall specify the period of time that the invitation to qualify will remain open and the time period for applicability.  (3)  Vendors may apply for eligibility on a continuous basis during the time period that the invitation to qualify remains open.  g.    Response and evaluation.    (1)  Vendors seeking to qualify shall be required to meet all the criteria established by the department for a particular category or type of solicitation.  (2)  The department shall continuously evaluate vendor applications for placement on a prequalified-vendor list during the period that the invitation to qualify remains open.  h.    Acceptable performance levels.    (1)  The department shall establish and notify prequalified vendors of minimum acceptable performance levels and institute a performance tracking mechanism on each prequalified vendor.  (2)  An approved vendor remains qualified for the period specified by the department unless the vendor does not meet minimum acceptable performance levels.  (3)  If a vendor’s performance falls below the minimum acceptable level, the vendor shall be removed from the prequalified list.  (4)  A vendor that does not prequalify or that is removed from the prequalified list due to the vendor’s performance has the right to appeal in accordance with rule 11—117.20(8A).  i.    Information technology purchases from a prequalified vendor.  Before a participating agency may acquire an information technology device or service from a prequalified vendor, the agency must obtain all of the required approvals from the department pursuant to rule 11—117.11(8A).  117.9(8)    Other types of solicitations.  The department may use other types of competitive solicitations not outlined in these rules if the following conditions are met:  a.  The solicitation method has been clearly described in public notice.  b.  The solicitation method includes fair and objective criteria for determining the award.  117.9(9)    Request for information (RFI).  A request for information (RFI) is a nonbinding method an agency may use to obtain market information from interested parties for a possible upcoming solicitation. Information may include, but is not limited to, best practices, industry standards, technology issues, and qualifications and capabilities of potential suppliers. Agencies considering the use of an RFI shall contact the department for information and guidance in using this process.Related ARC(s): 0952C, 2036C11—117.10(8A)  Procurement of architectural and engineering services.    117.10(1)    Qualifications.  As part of the competitive selection process, the department shall determine whether an architect or engineer is competent and qualified. In making this determination, the department may consider the following factors:
    1. Professional licensing or registration credentials,
    2. Integrity and reliability,
    3. Past performance relative to the quality and timeliness of service on similar projects,
    4. Past experience with the state in relation to services provided,
    5. Quality and timeliness of the services provided,
    6. The proposed terms of delivery, and
    7. The best interests of the state.
      117.10(2)    Fair and reasonable price.  As part of the competitive selection process, the department may request, in addition to the architect’s or engineer’s qualifications, pricing information that may include a total fee for the specified services, hourly rates, or other pricing measures that will help the department establish a fair and reasonable price.  a.  The department shall request a fee proposal(s) as part of the competitive selection process only when the services required are of limited scope, limited duration or otherwise clearly defined. An award shall not be made solely on the basis of the lowest price.  b.  When a fee is not requested as part of the competitive selection process, other pricing factors shall be requested, and the firm deemed most qualified will be asked to negotiate a fee using the pricing factors included in the firm’s proposal. If a fair and reasonable price for the work cannot be negotiated, the department shall reject the firm’s proposal and begin negotiations for a fair and reasonable price with the next most qualified firm.Examples of fair and reasonable pricing factors include:  (1)  Hourly rates and anticipated hours,  (2)  A lump sum fee,  (3)  Any other costs the department determines to be fair and reasonable.  c.  If reimbursable expenses are included in the price proposal, rates shall not exceed those in procedure 210.245, “Travel-in-state—board, commission, advisory council, and task force member expenses,” of the department’s state accounting enterprise’s Accounting Policy and Procedures Manual.  d.  The fee proposal or other pricing information shall serve as a basis for contract negotiations.    Related ARC(s): 0952C, 2036C, 4134C11—117.11(8A)  Procurement of information technology devices and services.  This rule applies to the procurement of information technology devices and services by participating agencies.  117.11(1)    Approval of participating agency information technology procurements.    a.  All procurement of information technology devices and services must meet operational standards prescribed by the department.  b.  With the exception of requests for proposals (RFPs) which are approved by the technology governance board, procurement of all information technology devices and services, projects and outsourcing of $50,000 or more or a total involvement of 750 participating agency staff hours or more must receive prior approval from the office of the chief information officer (OCIO) before a participating agency issues a competitive selection document or any other procurement document or otherwise seeks to procure information technology devices or services or both through the department or on its own purchasing authority. The participating agency’s approval request shall be in a form prescribed by the department.  c.  Participating agencies shall notify the technology governance board in writing on a quarterly basis that technology purchases made during the previous quarter were in compliance with the technology governance board’s procurement rules and information technology operational standards.  d.  Participating agencies shall not break purchasing into smaller increments for the purpose of avoiding threshold requirements of this subrule.  117.11(2)    Review process for proposed procurements.    a.  With the exception of requests for proposals (RFPs) which are approved by the technology governance board, the department shall review a proposed information technology procurement of a participating agency regardless of funding source, method of procurement, or agency procurement authority.  b.  The department shall review a proposed procurement for compliance with operational standards established by the department.  c.  Once procurement is approved, ongoing approval by the department is not required provided that the procurement or scope of work remains consistent with the previously approved procurement or scope of work.  d.  Participating agencies shall obtain the department’s approval anytime a material modification of the procurement or the scope of work is completed. Review and approval by the department is required prior to implementation of a material modification to a previously approved proposed procurement by a participating agency or by the department on behalf of a participating agency.  e.  After approval of the procurement is forwarded to the agency contact person and appropriate procurement authority contacts, the procurement may proceed.  f.  When a procurement is not approved, the agency contact will be notified of available options, which include modification and resubmission of the request, cancellation of the request, or requesting a waiver from the director on the recommendation of the technology governance board pursuant to subrule 117.11(3).  g.  The department may periodically audit procurements made by a participating agency for compliance with this rule and operational standards of the department. When the audit determines that inconsistencies with established operational standards or with this rule exist, the participating agency shall comply with technology governance board directives to remedy the noncompliance.  h.  Information technology devices and services not complying with applicable operational standards shall not be procured by any participating agency unless a waiver is granted by the director on the recommendation of the technology governance board.  i.  Upon request by a participating agency, the department may procure, as provided by these rules, any information technology devices or information technology services requested by or on behalf of an agency and accordingly bill the agency through the department’s regular process for the information technology devices or information technology services or for the use of such devices or services.  j.  The department may provide pertinent advice to a procurement authority or participating agency regarding the procurement of information technology devices or services, including opportunities for aggregation with other procurements.  117.11(3)    Waiver requests for operational standards.    a.  Waiver requests. In the event a participating agency is advised that its proposed procurement is disapproved and the participating agency seeks a waiver of operational standards, it must file its written waiver request with the department within five calendar days of the date of the disapproval. The waiver request shall be filed pursuant to rule 11—25.6(8A).  b.  Hearing. The department may conduct a hearing with the participating agency regarding the waiver request. Additional evidence may be offered at the time of the hearing. Oral proceedings shall be recorded either by mechanized means or by a certified shorthand reporter. Parties requesting that the hearing be recorded by a certified shorthand reporter shall bear the costs. Copies of tapes of oral proceedings or transcripts recorded by certified shorthand reporters shall be paid for by the requester.  c.  Burden of proof. The burden of proof is on the participating agency to show that good cause exists to grant a waiver to the participating agency to complete the proposed procurement.  d.  The director shall notify the participating agency in writing of the decision to grant or deny the waiver. In the event a waiver is denied, the participating agency may appeal pursuant to Iowa Code section 679A.19.Related ARC(s): 0952C, 2036C, 2267C11—117.12(8A)  Specifications in solicitations.  All specifications used in solicitations shall be written in a manner that encourages competition.  117.12(1)    Limitations on brands and models.  Specifications shall be written in general terms without reference to a particular brand or model unless the reference is clearly identified as intending to illustrate the general characteristics of the item and not to limit competition. A specific brand or model may be procured only when necessary to maintain a standard required or authorized by law or rule or for connectivity or compatibility with existing commodities or equipment.  117.12(2)    Recycled content and products.  When appropriate, specifications shall include requirements for the use of recovered materials and products. The specifications shall require, at a minimum, that all responses to a solicitation include a product content statement that describes the percentage of the content of the item that is reclaimed material.The department shall revise specifications developed by agencies if the specifications restrict the use of alternative materials, exclude recovered materials, or require performance standards that exclude products containing recovered materials unless the agency seeking the product can document that the use of recovered materials will impede the intended use of the product.Specifications shall support the following procurements:  a.  Products containing recovered materials, including but not limited to lubricating oils, retread tires, building insulation materials, and recovered materials from waste tires.  b.  Bio-based hydraulic fluids, greases, and other industrial lubricants manufactured from soybeans in accordance with Iowa Code section 8A.316.  117.12(3)    Life cycle cost and energy efficiency.  The department and agencies shall utilize life cycle cost and energy efficiency criteria in developing standards and specifications for procuring energy-consuming products except for passenger vehicles; light, medium-duty, and heavy-duty trucks; passenger and cargo vans; and sport utility vehicles.  117.12(4)    All or none solicitations.  A solicitation may specify whether or not responses will be accepted on an all or none basis. Only when this statement appears on the solicitation may it be included in the response. The department may award either by item or by lot, whichever is to the advantage of the enterprise.  117.12(5)    Financial security.  The department may require bid, litigation, fidelity, and performance security as designated in the solicitation documents. When required, a security may be by certified check, cashier’s check, certificate of deposit, irrevocable letter of credit, bond, or other security acceptable to the department.When required, a security shall not be waived. The security provided by vendors shall be retained until all provisions of the solicitation have been met. The security will then be returned to the vendor.  117.12(6)    Vehicle procurement.    a.  Specifications for procurement of all non-law enforcement, light-duty vehicles, excluding those purchased and used for off-road maintenance work or to pull loaded trailers, shall be for flexible fuel vehicles when an equivalent flexible fuel model is available.  b.  Use of specifications for hybrid-electric or other alternative fuel vehicles is encouraged. Procurement of hybrid-electric or other alternative fuel vehicles may be dependent upon whether the cost of the vehicle is equivalent to a non-alternative fuel vehicle or non-flexible fuel vehicle (a vehicle with a gasoline E10 engine).  c.  The average fuel efficiency for new passenger vehicles and light trucks that are purchased in a year shall equal or exceed the average fuel economy standard for the vehicles’ model years as published by the United States Secretary of Transportation.  117.12(7)    Bulk diesel fuel procurement.  Specifications for procurement of all bulk diesel fuel shall ensure that all bulk diesel procured has at least 5 percent renewable content by 2007, 10 percent renewable content by 2008, and 20 percent renewable content by 2010, provided that fuel that meets the American Society for Testing and Materials (ASTM) D-6751 specification is available. Bulk diesel fuel that is used exclusively for emergency generation is exempt from the renewable content requirement.Related ARC(s): 0952C, 2036C, 4137C11—117.13(8A)  Awards.  The department shall select a vendor on the basis of criteria contained in the competitive selection document.  117.13(1)    Intent to award.  After evaluating responses to a solicitation using formal competition, the department shall notify each vendor submitting a response to the solicitation of its intent to award to a particular vendor or vendors subject to execution of a written contract(s). Documentation of awards for solicitations using informal competition will be made available to interested parties upon request. This notice of intent to award does not constitute the formation of a contract(s) between the state and successful vendor(s). If a vendor is not registered on the vendor on-line system and does not provide an email address or fax number, the notice will be mailed.  117.13(2)    Rejection of bids.  The department reserves the right to reject any or all responses to solicitations at any time for any reason. New bids may be requested at a time deemed convenient to the department and agency involved.  117.13(3)    Minor deficiencies and informalities.  The department reserves the right to waive minor deficiencies and informalities if, in the judgment of the department, the best interest of the state of Iowa will be served.  117.13(4)    Tied bids and preferences.  If an award is based on the highest score and there is a tied score, or if the award is based on the lowest cost and there is a tied cost, the award shall be determined by a drawing. Whenever it is practical to do so, the drawing will be held in the presence of the vendors with the tied bids. Otherwise, the drawing will be held in front of at least three noninterested parties. All drawings shall be documented.  a.  Notwithstanding the foregoing, whenever a tie involves an Iowa vendor and a vendor outside the state of Iowa, first preference will be given to the Iowa vendor. Whenever a tie involves one or more Iowa vendors and one or more vendors outside the state of Iowa, the drawing will be held among the Iowa vendors only. Tied bids involving Iowa-produced or Iowa-manufactured products and items produced or manufactured outside the state of Iowa will be resolved in favor of the Iowa product. If a tied bid does not include an Iowa vendor or Iowa-produced or Iowa-manufactured product, preference will be given to a vendor based in the United States or products produced or manufactured in the United States over a vendor based or products produced or manufactured outside the United States.  b.  In the event of a tied bid between Iowa vendors, the department shall contact the Iowa Employer Support of the Guard and Reserve (ESGR) committee for confirmation and verification as to whether the vendors have complied with ESGR standards. Preference, in the case of a tied bid, shall be given to Iowa vendors complying with ESGR standards.  117.13(5)    Consideration of life cycle costs.  When appropriate to the procurement, life cycle costs shall be considered during the award process.  117.13(6)    Trade-ins.  When applicable and in the best interest of the state, the department may trade in devices or services to offset the cost of devices or services in a manner consistent with procurement practices to ensure accountability with the state’s fixed asset inventory system.Related ARC(s): 0952C, 2036C11—117.14(8A)  Agency purchasing authority and responsibilities.    117.14(1)    Purchase of goods.  An agency may acquire goods not otherwise available from a master agreement in accordance with the procurement threshold guidelines in 11—117.15(8A).  117.14(2)    Purchase of services.  An agency may procure services unique to the agency’s program or used primarily by that agency and not by other agencies. The department will assist agencies with these procurements upon request. Procurement of services by an agency shall comply with the provisions of 11—Chapters 118 and 119.  117.14(3)    Procurement of printing.    a.  As the first step in the printing procurement process, an agency may provide its request to state printing. State printing may produce the printing internally or procure the printing for the agency.  b.  An agency may procure printing. Procurement of printing by an agency shall utilize formal or informal competitive selection, pursuant to 11—117.3(8A). The agency’s internal procedures and controls for competitive selection of a printing vendor shall be consistent with the requirements of the department and the state auditor.  117.14(4)    Procurements requiring additional authorization.  Except where exempted by statute, the following purchases require additional approval.  a.  Information technology devices, software and services, as required in Iowa Code sections 8A.202 and 8A.206 and rule 11—117.11(8A).  b.  Vehicles, as prescribed in Iowa Code sections 8A.361 and 8A.362.  c.  Architectural and engineering services, except for agencies with independent authority, as prescribed in Iowa Code sections 8A.302, 8A.311, 8A.321, 218.58, and 904.315.  d.  Legal counsel, as prescribed in Iowa Code section 13.7.  e.  Telecommunications equipment and services, as required by Iowa Code chapter 8D and the rules of the telecommunications and technology commission.  117.14(5)    Establishment of agency internal procedures and controls.    a.  Agencies shall establish internal controls and procedures to initiate purchases, complete solicitations, make awards, approve purchases, and receive goods. The procedures shall address adequate public recordings of the purchases under the agency’s authority consistent with law and rule. Internal controls and security procedures that are consistent with the requirements of the department and state auditor, including staff authority to initiate, execute, approve, and receive purchases, shall be in place for all phases of the procurement.  b.  Agencies participating in the department’s purchasing card program shall comply with the program policies and procedures in accordance with state procurement and accounting policies, and any applicable statutory and regulatory authority.   c.  If an agency develops internal policies and procedures specific to its use of purchasing cards, the policies and procedures may be more, but not less, restrictive than the department’s. In the event of a conflict between the agency and department policies and procedures, the department’s shall take precedence.  117.14(6)    Agency receipt of goods.  Agencies receiving goods shall:  a.  Inspect or otherwise determine that the goods received meet the specifications, terms and conditions within the order or master agreement,  b.  Initiate timely payment for goods meeting specifications, and  c.  Document the receipt of goods electronically in a manner prescribed by the department.All provisions of 11—117.19(8A) shall apply to agency receipt of goods.  117.14(7)    Partial orders.  Agencies may accept partial orders and await additional final receipt or may accept a partial order as a final order. The agency shall notify the vendor of its decision. An agency may pay a vendor a prorated amount for the partial order.  117.14(8)    Items not meeting specifications.  An agency shall not approve final receipt when goods appear not to meet specifications. An agency shall approve final receipt only when satisfied that the goods meet or exceed the specifications and terms and conditions of the order or master agreement. When an agency and vendor are unable to agree as to whether the specifications, terms and conditions are met, the department shall make the decision.Agencies shall notify the department and the vendor when apparent defects are first noticed. The department will assist the agency with negotiating a satisfactory settlement with the vendor.  117.14(9)    Payment to vendors following final receipt.  An agency shall not unreasonably delay payment on orders for which final receipt is accepted. Except in the case of latent defects in goods, payment to the vendor by the agency signifies agreement by the agency that the goods received are satisfactory. Payment to vendors may be made by any commercially acceptable method, including a state procurement card, in accordance with state financial requirements.Related ARC(s): 0952C, 2036C, 4182C11—117.15(8A)  Thresholds for delegating procurement authority.    117.15(1)    Agency direct purchasing—basic level.  An agency may procure non-master agreement goods costing not greater than $15,000 without competition.   117.15(2)    Agency direct purchasing—advanced level.  An agency may procure non-master agreement goods up to $50,000 per transaction in a competitive manner using either informal or formal competition provided the agency personnel engaged in the purchase of goods have completed enhanced procurement training established by the director or designee. If an informal process is chosen, the agency shall follow the process described in the definition of “informal competition” in rule 11—117.2(8A). The agency shall document the quotes, or circumstances resulting in fewer than three quotes, in an electronic file attached to the order or in another format.  117.15(3)    Preference to targeted small businesses.  Agencies shall search the TSB directory on the Iowa economic development authority’s website and may purchase a good or service directly from the TSB source if the cost is equal to or less than the spending limit set forth in paragraph 117.5(2)“a.” Agencies shall comply with the TSB notification requirements in subrule 117.8(2).  117.15(4)    Misuse of agency authority.    a.  Purchasing authority delegated to agencies shall not be used to avoid the use of master agreements. The agency shall not break purchasing into smaller increments for the purpose of avoiding threshold requirements in subrule 117.5(2), 117.15(1) or 117.15(2).  b.  As a remedy, the department may recover administrative fees appropriate to the improper execution of procurement.  c.  This rule is not intended to prohibit agencies from aggressively seeking competitive prices. Agencies may purchase outside of master agreements under subrule 117.4(1).  d.  The department may rescind delegated authority of an agency that misuses its authority or uses the authority to procure goods or services already available on a master agreement.  e.  This rule does not prohibit agencies from dividing procurements into contract award units of economically feasible production runs to facilitate offers or bids from targeted small businesses consistent with subrule 117.5(2) and Iowa Code section 73.17(1).Related ARC(s): 0952C, 1485C, 2036C, 2267C, 4182C, 4845C, 6263C11—117.16(8A)  Printing.  This rule provides guidelines for the letting of contracts for public printing by the department and by state agencies, including the enforcement by the department of contracts for printing, except as otherwise provided by law.  117.16(1)    Competitive selection for printing.  The department and state agencies shall procure printing by competitive selection according to the rules of this chapter except when the printing is produced by state printing, pursuant to rule 11—102.4(8A) or the procurement is otherwise exempt from competitive selection pursuant to rule 11—117.5(8A). When an agency elects to purchase printing by competitive selection rather than using the services of state printing or a TSB, state printing and TSBs shall be part of the bidding process.  117.16(2)    Specifications for printing.    a.    Preparation of written specifications.  The department or a state agency shall procure printing by preparing a competitive selection document with written specifications and issue the same to bidders. The bid specifications shall become a part of the printing contract.  b.    Inspection of specifications.  All specifications shall be held on file in the department’s printing division office or the office of the state agency conducting the solicitation and shall be available for inspection by prospective bidders.  117.16(3)    Notification of solicitation for printing.  The department or a state agency conducting the solicitation shall provide notification of the solicitation for printing to vendors.  117.16(4)    Bid bonds for printing.    a.    When applicable.  Security in the form of a bid bond or a certified or cashier’s check may be required from printing vendors.  b.    Amount of bonds.  If a bid bond is required, each formal bid for printing must be accompanied by a certified or cashier’s check for the amount stated in the specifications. An annual bid bond in an amount set by the department may be deposited with the department by the bidder to be used in lieu of a certified or cashier’s check. The amount of the bond is fixed annually and bonds are dated from July 1 to June 30 of the following year.  c.    Return of bid bonds.  Checks of unsuccessful bidders will be returned when the printed item is contracted. The check of the successful bidder will be returned when the performance bond is received and accepted by the department or by the state agency conducting the solicitation.  d.    Performance bonds.  When required by the specifications, the successful bidder must deposit with the department or with the state agency conducting the solicitation a performance bond equal to 10 percent of the contract price unless otherwise stated in the specifications. The performance bond must be deposited within 21 days of the date the contract or bond paperwork is issued to the vendor by the department or agency.  e.    Forfeiture of bid bond.  Failure to enter into a contract by the successful bidder within ten days of the award may result in forfeiture of 10 percent of the bid bond or the certified or cashier’s check, if a check is on deposit in lieu of a bond.Related ARC(s): 0952C, 2036C11—117.17(8A)  Vendor registration and approval.  Every vendor wishing to do business with the state shall register as a vendor. Every vendor shall register prior to submitting a response to a solicitation except in the case of an emergency procurement when the vendor shall register prior to filling an order or as soon as practicable. Only properly registered vendors are entitled to payment.  117.17(1)    Vendor on-line registration.  Vendors are encouraged to register electronically using the vendor on-line system. Vendors that are registered on the vendor on-line system are eligible for all services at the site, including receiving electronic notices of solicitations and submitting an electronic response to a solicitation.Information from vendors completing registration through the vendor on-line system shall be protected through the use of uniquely identifying information known only to the department and the vendor to confirm the identity of the vendor for all subsequent actions, including responses to solicitations.The department may take action to restrict or deny use of the vendor on-line system in response to inappropriate use of the site. The department may edit or delete a vendor’s posting on the vendor bulletin board if the posting is not appropriate to the business of state purchasing.  117.17(2)    Alternate vendor registration.  A vendor may register by directly contacting the department or an agency initiating a procurement.  117.17(3)    Vendor registration information maintenance.  Vendors are responsible for maintaining current and accurate registration information. If registered on the vendor on-line system, the vendor shall update the vendor’s account whenever information changes. If registered in an alternate manner, the vendor is responsible for notifying the department or agency of any change in information. This information includes, but is not limited to, company name or type, payment address, procurement address and other contact information.Related ARC(s): 0952C, 2267C11—117.18(8A)  Vendor performance.    117.18(1)    Review of vendor performance.  The department, in cooperation with agencies, shall periodically, but at least directly prior to renewal of a master agreement, review the performance of vendors. Agencies are encouraged to document vendor performance throughout the duration of the contract and report any problems to the department as they are identified. Performance reviews shall be based on the specifications of the master agreement or order, and shall include, but need not be limited to:
    1. Compliance with the specifications,
    2. On-time delivery, and
    3. Accuracy of billing.
    This review will help determine whether the vendor is a responsible bidder for future projects.      117.18(2)    Vendor suspension or debarment.  Prior performance on a state contract may cause a vendor to be disqualified or prevent the vendor from being considered a qualified bidder. In addition, a vendor may be suspended or debarred for any of the following reasons:  a.  Failure to deliver within specified delivery dates without agreement of the department or the agency.  b.  Failure to deliver in accordance with specifications.  c.  Attempts to influence the decision of any state employee involved in the procurement process.  d.  Evidence of agreements by vendors to restrain trade or impede competitive bidding. Such activities shall in addition be reported to the attorney general for appropriate action.  e.  Determination by the civil rights commission that a vendor conducts discriminatory employment practices in violation of civil rights legislation and executive order.  f.  Evidence that a vendor has willfully filed a false certificate with the department.  g.  Debarment by the federal government.  117.18(3)    Correcting performance.  The department shall notify in writing any vendor considered for suspension or debarment and provide the vendor an opportunity to cure the alleged situation. If the vendor fails to remedy the situation after proper notice, the department director may suspend the vendor from eligibility for up to one year or debar the vendor from future business depending on the severity of the violation. The appeal provisions of this chapter shall apply to the decision of the director.  117.18(4)    Remedies for failure to deliver or for delivery of nonconforming goods or services.  If a vendor fails to remedy the situation after the opportunity to cure is provided, the department or agency may procure substitute goods or services from another source and charge the difference between the contracted price and the market price to the defaulting vendor. The attorney general shall be requested to make collection from the defaulting vendor.    Related ARC(s): 0952C11—117.19(8A)  General instructions, terms and conditions for vendors.  The following instructions, terms and conditions shall apply to all solicitations unless otherwise stated in the solicitation.  117.19(1)    Instructions for vendors.  The vendor must follow all instructions in the manner prescribed and furnish all information and samples as stated in the solicitation. Minor deficiencies and informalities may be waived if, in the judgment of the department, the best interests of the state will be served.  117.19(2)    Deadline for submission of bid or proposal.  It is the responsibility of the vendor to submit a response to a solicitation according to time, date, and place stated in the solicitation documents. Late responses will be rejected. Unfamiliarity with a geographical location, weather events, labor stoppages, failure of a carrier to meet promised delivery schedules, mechanical failures, and similar reasons are not sufficient justifications for the department to accept a late bid or proposal. At its sole discretion, the department may accept a late response if the delay is due to a catastrophic event and acceptance by the department does not result in an advantage to a competitor.  117.19(3)    Confidential information in a solicitation response.  Unless material submitted in response to a solicitation is identified as proprietary or confidential by the vendor in accordance with Iowa Code section 22.7, all submissions by a vendor are public information. To facilitate a fair and objective evaluation of proposals, submissions by vendors will not be released to competitors or the public prior to issuance of the notice of intent to award. If a vendor’s claim of confidentiality is challenged by a competitor or through a request by a citizen to view the proposal, it is the sole responsibility of the vendor to defend the claim of confidentiality in an appropriate venue. The department will not release the subject material while the matter is being adjudicated.  117.19(4)    Recycled products.  A vendor shall be required to include for all applicable procurements a product content statement providing the percentage of the content of the item that is reclaimed material.  117.19(5)    Modifications or withdrawal of a solicitation response.  A solicitation response may be withdrawn or modified prior to the time and date set for opening. Withdrawal or modification requests shall be in writing. With the approval of the director or designee, a bid or proposal may be withdrawn after opening only if the vendor provides prompt notification and adequately documents the commission of an honest error that might cause undue financial loss. The department may contact a vendor to determine if an error occurred in the vendor’s proposal.  117.19(6)    Security.  The department may require bid or proposal security in accordance with subrule 117.12(5). When required, security shall not be waived.  117.19(7)    Assignments.  A vendor may not assign an order or a master agreement to another party without written permission from the department.  117.19(8)    Strikes, lockouts or natural disasters.  A vendor shall notify the department promptly whenever a strike, lockout or catastrophic event prevents the vendor from fulfilling the terms of an order or contract. The department and affected agency may elect to cancel an order or master agreement at their discretion.  117.19(9)    Subcontractors or secondary suppliers.  Vendors shall be responsible for the actions of and performance of their subcontractors or secondary suppliers. Vendors shall be responsible for payment to all subcontractors or secondary suppliers. Vendors awarded a state construction contract shall disclose the names of all subcontractors within 48 hours after the award of the contract and advise the department of changes in the names of subcontractors throughout the duration of the project.  117.19(10)    Material and nonmaterial compliance.  At its sole discretion, the department reserves the right to waive technical noncompliance with instructions when such noncompliance, as viewed by a reasonable and prudent person, did not result in an advantage to the vendor submitting the apparent lowest bid or best proposal or would not result in a disadvantage to other vendors submitting competing bids or proposals.  117.19(11)    Item and pricing.  Price information shall be submitted in response to a solicitation as stated in the instructions. In the case of an error, unit price shall prevail. Unless otherwise stated, all prices shall be submitted with free-on-board (FOB) destination including freight and handling costs.Prices for one-time purchases must be firm, and preference will be given to firm prices in multiple award contracts. If the department believes it is in the best interest of the state, an economic price adjustment clause based on an acceptable economic indicator may be included in multiple delivery contracts.  a.  Price during testing. Items may require testing either before or after the final award is made. In these cases, the vendor must guarantee the price through the completion of testing.  b.  Unless otherwise contained in the specifications, all items for which a vendor submits a quotation shall be new, of the latest model, crop year or manufacture and shall be at least equal in quality to those specified.  c.  Escalator clauses. Unless specifically provided for in the solicitation document, a response containing an escalator clause that provides for an increase in price will not be considered.  d.  Discounts. Only cash discounts that apply to payment terms of 30 days or more will be considered in determining awards. Other payment terms will not be considered. The state will attempt to earn any discounts offered and will compute the period from the latest of the following:  (1)  From date of invoice.  (2)  From the date the complete order is received.  (3)  From the date the vendor’s certified invoice is received.When additional testing of a product is required after delivery, the discount period shall not begin until testing is completed and final approval made.  117.19(12)    Notice of intent to award.  After evaluating responses to a solicitation, the department shall notify each vendor submitting a response to the solicitation of its intent to award to a particular vendor or vendors subject to execution of a written contract(s). This notice does not constitute the formation of a contract(s) between the state and the vendor(s) to which the notice of intent to award has been issued.If a vendor is not registered on the vendor on-line system and does not provide an email address or fax number, the notice will be sent by ordinary mail.  117.19(13)    Time of acceptance of award.  If a time is not stated in the competitive selection document, the vendor may state the length of time that the state has to accept the vendor’s offer. This period shall not be less than 10 days for informal quotations or less than 30 days for formal bids. If the vendor states no minimum time period, the offer shall be irrevocable for 90 days. The department may require a longer evaluation period for technical equipment.  117.19(14)    Delivery.    a.    Delivery date.  A vendor shall show in a response to a solicitation the earliest date on which delivery can be made. The department may include in a solicitation the acceptable delivery date for a commodity. The department may consider delivery dates as a factor in determining to which vendor the notice of intent to award shall be issued. Goods in transit remain the responsibility of the vendor.  b.    Notice of rejection.  The reason for any rejection of a shipment, based on apparent deficiencies that can be disclosed by ordinary methods of inspection, will be given by the receiving agency to the vendor and carrier within a reasonable time after delivery of the item with a copy of this notice provided to the purchasing section. Notice of latent deficiencies that would make items unsatisfactory for the intended purpose may be given at any time after acceptance.  c.    Disposition of rejected item.  The vendor must remove at the vendor’s expense any rejected item. If the vendor fails to remove the rejected item within 30 days of notification, the department or an agency may dispose of the item by offering it for sale, deduct any accrued expense and remit the balance to the vendor.  d.    Testing after delivery.  Laboratory analysis of an item or other means of testing may be required after delivery. In such cases, vendors will be notified in writing that a special test will be made and that payment will be withheld until completion of the testing process.  e.    Risk of loss or damage.  Risk of loss or damage remains with the vendor until delivery and acceptance by the agency at the destination shown on the order.  f.    Vendor responsibility for removal of trade-ins.  Whenever the purchase of an item of equipment has been made with the trade-in of equipment, it shall be the vendor’s responsibility to remove the traded equipment within 30 days of the final acceptance of the purchased equipment by the agency, if not otherwise specified in the competitive selection document. The department or agency will not assume responsibility for equipment that is not removed within this time period and may cause the equipment to be removed by and shipped to the vendor and may bill the vendor for all packing, crating and transportation charges.  117.19(15)    Master agreement and purchase order modifications.  When consistent with the purpose and intent of the original master agreement or order, amendments or modifications may be issued. All modifications shall be documented and approved by the department or agency and the vendor before modifications take effect. Modifications shall not be used unreasonably to avoid further competition.  117.19(16)    Federal and state taxes.  The state of Iowa is exempt from the payment of Iowa sales tax, motor vehicle fuel tax and any other Iowa tax that may be applied to a specified commodity or service. A vendor shall be furnished a revenue department exemption letter upon request.Related ARC(s): 0952C, 2036C11—117.20(8A)  Vendor appeals.    117.20(1)    Filing an appeal.  Any vendor that filed a timely bid or proposal and that is aggrieved by an award of the department may appeal the decision by filing a written notice of appeal before the Director, Department of Administrative Services, Hoover State Office Building, Third Floor, Des Moines, Iowa 50319, within five calendar days of the date of award, exclusive of Saturdays, Sundays, and legal state holidays. The department must actually receive the notice of appeal within the specified time frame for it to be considered timely. The notice of appeal shall state the grounds upon which the vendor challenges the department’s award.  117.20(2)    Procedures for vendor appeal.  The vendor appeal shall be a contested case proceeding and shall be conducted in accordance with the provisions of the department’s administrative rules governing contested case proceedings, unless the provisions of this rule provide otherwise.  a.  Notice of hearing. Upon receipt of a notice of vendor appeal, the department shall contact the department of inspections and appeals to arrange for a hearing. The department of inspections and appeals shall send a written notice of the date, time and location of the appeal hearing to the aggrieved vendor or vendors.The presiding officer shall hold a hearing on the vendor appeal within 60 days of the date the notice of appeal was received by the department.  b.  Discovery. The parties shall serve any discovery requests upon other parties at least 30 days prior to the date set for the hearing. The parties must serve responses to discovery at least 15 days prior to the date set for the hearing.  c.  Witnesses and exhibits. The parties shall contact each other regarding witnesses and exhibits at least 10 days prior to the date set for the hearing. The parties must meet prior to the hearing regarding the evidence to be presented in order to avoid duplication or the submission of extraneous materials.  d.  Amendments to notice of appeal. The aggrieved vendor may amend the grounds upon which the vendor challenges the department’s award no later than 15 days prior to the date set for the hearing.  e.  If the hearing is conducted by telephone or on the Iowa communications network, the parties must deliver all exhibits to the office of the presiding officer at least 3 days prior to the time the hearing is conducted.  f.  The presiding officer shall issue a proposed decision in writing that includes findings of fact and conclusions of law stated separately. The decision shall be based on the record of the contested case and shall conform to Iowa Code chapter 17A. The presiding officer shall send the proposed decision to all parties by first-class mail.  g.  The record of the contested case shall include all materials specified in Iowa Code subsection 17A.12(6).  (1)  Method of recording. Oral proceedings in connection with a vendor appeal shall be recorded either by mechanized means or by certified shorthand reporters. Parties requesting that certified shorthand reporters record the hearing shall bear the costs.  (2)  Transcription. A party may request that oral proceedings in connection with a hearing in a case or any portion of the oral proceedings be transcribed. A party requesting transcription shall bear the expense of the transcription.  (3)  Tapes. Parties may obtain copies of tapes of oral proceedings from the presiding officer at the requester’s expense.  (4)  Retention time. The department shall file and retain the recording or stenographic notes of oral proceedings or the transcription for at least five years from the date of the decision.  117.20(3)    Stay of agency action for vendor appeal.    a.    When available.    (1)  Any party appealing the issuance of a notice of award may petition for stay of the award pending its review. The petition for stay shall be filed with the notice of appeal, shall state the reasons justifying a stay, and shall be accompanied by an appeal bond equal to 120 percent of the contract value.  (2)  Any party adversely affected by a final decision and order may petition the department for a stay of that decision and order pending judicial review. The petition for stay shall be filed with the director within five days of receipt of the final decision and order, and shall state the reasons justifying a stay.  b.    When granted.  In determining whether to grant a stay, the director shall consider the factors listed in Iowa Code section 17A.19(5)“c.”  c.    Vacation.  A stay may be vacated by the issuing authority upon application of the department or any other party.  117.20(4)    Review of proposed decision.    a.  The proposed decision shall become the final decision of the department 15 days after mailing the proposed decision, unless prior to that time a party submits an appeal of the proposed decision in accordance with the provisions of this subrule.  b.  A party appealing the proposed decision shall mail or deliver the notices of appeal to the Director, Department of Administrative Services, Hoover State Office Building, Third Floor, Des Moines, Iowa 50319. Failure to request review will preclude judicial review unless the department reviews the proposed decision on its own motion. If the department reviews the proposed decision on its own motion, it will send notice of the review to all parties participating in the appeal.  c.  A party appealing the proposed decision shall mail a copy of the notice of appeal to all other parties. Any party may submit to the department exceptions to and a brief in support of or in opposition to the proposed decision within 15 days after the mailing of a notice of appeal or of a request for review. The submitting party shall mail copies of any exceptions or brief it files to all other parties to the proceeding. The director shall notify the parties if the department deems oral arguments by the parties to be appropriate. The director will issue a final decision not less than 30 days after the notice of appeal is filed.  d.  The department shall review the proposed decision based on the record and issues raised in the hearing. The department shall not take any further evidence and shall not consider issues that were not raised at the hearing. The issues for review shall be specified in the party’s notice of appeal. The party appealing the proposed decision shall be responsible for transcribing any tape of the proceeding before the presiding officer and filing the transcript as part of the record for review. The party appealing the proposed decision shall bear the cost of the transcription regardless of the method used to transcribe the tape.  e.  Each party shall have the opportunity to file exceptions to the proposed decision and present briefs in support of or in opposition to the proposed decision. The department may set a deadline for submission of briefs. When the department consents, oral arguments may be presented. A party wishing to make an oral argument shall specifically request it. The department in its sole discretion may schedule oral arguments regarding the appeal. The department shall notify all parties in advance of the scheduled time and place for oral arguments.  f.  The director shall issue a final decision by the department. The decision shall be in writing and shall conform to the requirements of Iowa Code chapter 17A.Related ARC(s): 0952C11—117.21(8A)  Waiver procedure.    117.21(1)    Definition.  For the purpose of this chapter, a “waiver” means an action by the director that suspends, in whole or in part, the requirements or provisions of a rule in this chapter as applied to a state agency when the state agency establishes good cause for a waiver of the rule.   117.21(2)    Requests for waivers.  A state agency seeking a waiver shall submit a written request for a waiver to the director. The written request shall identify the rule for which the state agency seeks a waiver or the contract or class of contracts for which the state agency seeks a waiver and the reasons that the state agency believes justify the granting of the waiver.   117.21(3)    Criteria for waiver.  In response to a request for a waiver submitted by a state agency, the director may issue an order waiving in whole or in part the requirements of a rule in this chapter if the director finds that the state agency has established good cause for the waiving of the requirements of the rule. “Good cause” includes, but is not limited to, the following: (1) the desired good or service is available from one source only, (2) the time frame required is such that an expedient purchase is in the best interest of the agency, or (3) a showing that a requirement or provision of a rule should be waived because the requirement or provision would likely result in an unintended, undesirable, or adverse consequence or outcome. An example of good cause for a waiver is when a contract duration period of longer than six years is more economically or operationally feasible than a six-year contract in light of the service being purchased by the state agency.Related ARC(s): 2036C, 5391CThese rules are intended to implement Iowa Code sections 8A.201 to 8A.203, 8A.206, 8A.207, 8A.301, 8A.302, 8A.311, 8A.341 to 8A.344, 73.1 and 73.2.    Related ARC(s): 0952C, 1485C, 2036C, 2267C, 3676C, 4097C, 4134C, 4137C, 4182C, 4845C, 5391C, 6263C