DAR File No. 40568

Administrative Services, Purchasing and General Services

Rule R33-21

Interaction Between Procurement Units

Notice of Proposed Rule

(Amendment)

DAR File No.: 40568
Filed: 06/30/2016 02:16:50 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to address the cooperative purchasing, which shall be conducted in accordance with the requirements set forth in Section 63G-6a-2105.

Summary of the rule or change:

Section R33-21-201e was added to this rule, which outlines the following: 1) in accordance with Section 63A-1-109.5 and Subsections 63A-2-103(3) and 63G-6a-303(2)(b), and other applicable State of Utah law, the director of the Division of Purchasing and General Services serving as the chief procurement officer of the state shall administer the state's cooperative purchasing program and may impose or assess an administrative fee on contractors and vendors on state cooperative contracts as part of its internal service fund authorization; and 2) the Division shall include a provision in each state cooperative contract prohibiting any other procurement unit from charging any type of fee, surcharge, or rebate on a state cooperative contract issued by the chief procurement officer.

State statutory or constitutional authorization for this rule:

• Title 63G, Chapter 6a

Anticipated cost or savings to:

the state budget:

There are no anticipated costs or savings that are expected as a result of the changes to this rule. The changes to this rule do not give the Division the authority to charge an administrative fee. The Division's authority to charge an administrative fee is authorized pursuant to Section 63A-1-109.5, Subsection 63G-6a-303(2)(b), and Section 63A-2-103. This rule simply clarifies that only the Division, and no other public entity, may charge an administrative fee on state cooperative contracts or contracts issued by the Chief Procurement Officer. The statutory authorization allowing the Division to charge an administrative fee to vendors on state contract has been in place for over five years. Therefore, the changes to this rule, which simply clarify that no other public entity may impose an administrative fee on state contracts, will not have any impact on the state budget.

local governments:

There are no anticipated costs or savings that are expected as a result of the changes to this rule. The changes to this rule do not give the Division the authority to charge an administrative fee. The Division's authority to charge an administrative fee is authorized pursuant to Section 63A-1-109.5, Subsection 63G-6a-303(2)(b), and Section 63A-2-103. This rule simply clarifies that only the Division, and no other public entity, may charge an administrative fee on state cooperative contracts or contracts issued by the Chief Procurement Officer. The statutory authorization allowing the Division to charge an administrative fee to vendors on state contract has been in place for over five years. Therefore, the changes to this rule, which simply clarify that no other public entity may impose an administrative fee on state contracts, will not have any impact on local government.

small businesses:

There are no anticipated costs or savings that are expected as a result of the changes to this rule. The changes to this rule do not give the Division the authority to charge an administrative fee. The Division's authority to charge an administrative fee is authorized pursuant to Section 63A-1-109.5, Subsection 63G-6a-303(2)(b), and Section 63A-2-103. This rule simply clarifies that only the Division, and no other public entity, may charge an administrative fee on state cooperative contracts or contracts issued by the Chief Procurement Officer. The statutory authorization allowing the Division to charge an administrative fee to vendors on state contract has been in place for over five years. Therefore, the changes to this rule, which simply clarify that no other public entity may impose an administrative fee on state contracts, will not have any impact on small businesses.

persons other than small businesses, businesses, or local governmental entities:

There are no anticipated costs or savings that are expected as a result of the changes to this rule. The changes to this rule do not give the Division the authority to charge an administrative fee. The Division's authority to charge an administrative fee is authorized pursuant to Section 63A-1-109.5, Subsection 63G-6a-303(2)(b), and Section 63A-2-103. This rule simply clarifies that only the Division, and no other public entity, may charge an administrative fee on state cooperative contracts or contracts issued by the Chief Procurement Officer. The statutory authorization allowing the Division to charge an administrative fee to vendors on state contract has been in place for over five years. Therefore, the changes to this rule, which simply clarify that no other public entity may impose an administrative fee on state contracts, will not have any impact on persons other than small businesses, businesses, or local government entities.

Compliance costs for affected persons:

There are no anticipated compliance costs for affected persons. The changes to this rule clarify that no other public entity may impose an administrative fee on state contracts.

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

There are no anticipated fiscal impacts that this rule will have on businesses, as a result of the changes to this rule. The changes to this rule do not give the Division the authority to charge an administrative fee. The Division's authority to charge an administrative fee is authorized pursuant to Section 63A-1-109.5, Subsection 63G-6a-303(2)(b), and Section 63A-2-103. This rule simply clarifies that only the Division, and no other public entity, may charge an administrative fee on state cooperative contracts or contracts issued by the Chief Procurement Officer. The statutory authorization allowing the Division to charge an administrative fee to vendors on state contract has been in place for over five years. Therefore, the changes to this rule, which simply clarify that no other public entity may impose an administrative fee on state contracts, will not have a fiscal impact on businesses.

Kimberly Hood, Executive Director

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

Administrative Services
Purchasing and General Services
Room 3150 STATE OFFICE BLDG
450 N STATE ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Alan Bachman at the above address, by phone at 801-538-3105, by FAX at 801-538-3313, or by Internet E-mail at abachman@utah.gov
• Kent Beers at the above address, by phone at 801-538-3143, by FAX at 801-538-3882, or by Internet E-mail at kbeers@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/15/2016

This rule may become effective on:

08/22/2016

Authorized by:

Jared Gardner, Chair, Procurement Policy Board

R33. Administrative Services, Purchasing and General Services.

R33-21. Interaction Between Procurement Units.

R33-21-101. Cooperative Purchasing.

Cooperative purchasing shall be conducted in accordance with the requirements set forth in Section 63G-6a-2105. All definitions in the Utah Procurement Code shall apply to this Rule unless otherwise specified in this Rule. This Rule provides additional requirements and procedures and must be used in conjunction with the Utah Procurement Code.

 

R33-21-201. State Cooperative Contracts.

(a) An executive branch procurement unit shall obtain procurement items from state cooperative contracts whether statewide or regional unless the chief procurement officer determines, in accordance with Section 63G-6a-[408]506(5)(b)(i), that it is in the best interest of the state to obtain an individual procurement item outside the state contract.

(b) In accordance with Section 63G-6a-2105, public entities, nonprofit organizations, and agencies of the federal government may obtain procurement items from state cooperative contracts awarded by the chief procurement officer.

 

R33-21-201e. Division May Charge Administrative Fees on State Cooperative Contracts - Prohibition Against Other Procurement Units Charging Fees on State Contracts.

(1) In accordance with Section 63A-1-109.5, 63A-2-103(3), 63G-6a-303(2)(b), and other applicable State of Utah law, the Director of the Division of Purchasing and General Services serving as the chief procurement officer of the state shall administer the state's cooperative purchasing program and may impose or assess an administrative fee on contractors and vendors on state cooperative contracts as part of its internal service fund authorization.

(2) The Division shall include a provision in each state cooperative contract prohibiting any other procurement unit from charging any type of fee, surcharge, or rebate on a state cooperative contract issued by the chief procurement officer.

 

R33-21-301. Discount Pricing for Large Volume Purchases for Items on State Contract.

(1) Eligible users of state cooperative contracts may seek to obtain additional volume discount pricing for large volume orders provided state cooperative contractors are willing to offer additional discounts for large volume orders.

(a) Eligible users may not coerce, intimidate or in any way compel vendors on state cooperative contracts to offer additional discount pricing.

(b) Eligible users seeking additional pricing discounts for large volume purchases shall issue a "Request for Price Quotations" to each vendor on a state cooperative contract for the procurement item being purchased.

(c) Executive branch procurement units without independent procurement authority shall contact the division to issue the request for price quotations.

(d) The request for price quotations shall include:

(i) a detailed description of the procurement item;

(ii) the estimated number or volume of procurement items that will be purchased;

(iii) the period of time that price quotations will be accepted, including the date and time price quotations will be opened;

(iv) the manner in which price quotations will be accepted;

(v) the place where price quotations shall be submitted; and

(vi) the period of time the price quotation must be guaranteed.

(e) Price quotations shall be kept confidential until the date and time of the opening and may not be disclosed to other vendors on state cooperative contracts until after the date and time of the opening. Email quotations are acceptable.

(f) Price quotations will be opened in the presence of a minimum of two witnesses.

(g) Price quotations will become public at the time of the opening.

(2) All terms and conditions of the state cooperative contract shall remain in effect unless the chief procurement officer approves the modification.

(3) This process may not be used for:

(a) an anti-competitive practice such as:

(i) bid rigging;

(ii) steering a contract to a preferred state cooperative contractor;

(iii) utilizing auction techniques where price quotations are improperly disclosed and contractors bid against each other's price;

(iv) disclosing pricing or other confidential information prior to the date and time of the opening; or

(v) any other practice prohibited by the Utah Procurement Code.

(4) All sales resulting from the quotations received under the process conducted in accordance with [Rule]Section R33-21-301 shall be recorded as usage under the existing state cooperative contract, are subject to the administrative fee associated with the state cooperative contract, and shall be reported to the division.

 

KEY: cooperative purchasing, state contracts, procurement units

Date of Enactment or Last Substantive Amendment: [July 8, 2014]2016

Authorizing, and Implemented or Interpreted Law: 63G-6a