DAR File No. 44058

Transportation, Administration

Rule R907-33

Department of Transportation Procurement Rules

Notice of Proposed Rule

(New Rule)

DAR File No.: 44058
Filed: 09/12/2019 08:51:40 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this new rule is to establish procedures for purchasing equipment, services, and supplies necessary to perform and exercise the Department of Transportation's (Department) functions, powers, duties, rights, and responsibilities mandated by Section 72-1-201. This rule is designed to take advantage of market competition and provide fair opportunities for vendors of all sizes hoping to do business with the Department.

Summary of the rule or change:

This new rule provides the framework and procedures the Department will follow and apply when purchasing equipment, services, and supplies. This rule requires the Department to take advantage of competition to the maximum degree practicable, but also delineates certain exceptional procedures for making purchases without following standard competition based procedures, such as in emergency situations and small purchases.

Statutory or constitutional authorization for this rule:

• Subsection 72-1-201(h)
• Subsection 63G-6a-106(3)(a)

Anticipated cost or savings to:

the state budget:

The Department anticipates this new rule will lead to cost savings by allowing the Department to purchase equipment, services, and supplies following procedures that better conform to the specialized needs of the Department, which leads to greater efficiency and flexibility. However, quantifying such savings would be speculation at present.

local governments:

The Department does not anticipate this new rule will have any fiscal impact on local governments because it does not purchase equipment, services, or supplies from or for local governments.

small businesses:

The Department does not anticipate this new rule will have any fiscal impact on small businesses. It is a procedural rule the Department will follow when purchasing from vendors of all sizes. It is designed to take advantage of market competition and provide fair opportunities for vendors of all sizes hoping to do business with the Department.

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

The Department does not anticipate this new rule will have any fiscal impact on persons other than small businesses, businesses, or local government entities. It is designed to take advantage of market competition and provide fair opportunities for vendors of all sizes hoping to do business with the Department.

Compliance costs for affected persons:

This new rule does not intentionally impose any compliance costs on affected persons. This rule is designed to take advantage of market competition and provide fair opportunities for vendors of all sizes hoping to do business with the Department.

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

This new rule should not have a fiscal impact on businesses.

Carlos Braceras, Executive Director

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

Transportation
Administration
CALVIN L RAMPTON COMPLEX
4501 S 2700 W
SALT LAKE CITY, UT 84119-5998

Direct questions regarding this rule to:

• Christine Newman at the above address, by phone at 801-965-4026, by FAX at 801-965-4338, or by Internet E-mail at cwnewman@utah.gov
• James Palmer at the above address, by phone at 801-965-4000, by FAX at 801-965-4338, or by Internet E-mail at jimpalmer@utah.gov
• Linda Hull at the above address, by phone at 801-965-4253, by FAX at , or by Internet E-mail at lhull@utah.gov
• Josh Dangel at the above address, by phone at 269-217-7091, by FAX at , or by Internet E-mail at jdangel@utah.gov
• Lori Edwards at the above address, by phone at 801-965-4048, by FAX at , or by Internet E-mail at loriedwards@utah.gov

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

10/31/2019

This rule may become effective on:

11/07/2019

Authorized by:

Carlos Braceras, Executive Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non-Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

(1) This new rule establishes procedures for purchasing equipment, services, and supplies necessary to perform and exercise the Department of Transportation's (Department) functions, powers, duties, rights, and responsibilities mandated by Section 72-1-201. It will affect every vendor that sells equipment, services, and supplies to the Department, but the effects vendors will experience because of this rule will be procedural and not likely be fiscal.

 

(2) During fiscal 2019, the Department made approximately 78,000 payments for purchases or reimbursements to approximately 3,000 unique vendors or individuals. The purchases ranged in size from $0.10 to $111,000,000 dollars. These numbers change slightly from fiscal year to the next due to fluctuations in the number and types of projects being designed or constructed during the period.

 

(3) The Department made the majority of the purchases in FY 2019 following competitive procurement procedures included in Title R33, the Division of Purchasing and General Services' rules intended for use by any public Utah entity. This new rule is intended to serve the specialized needs of the Department. The Department anticipates this new rule will provide greater flexibility and better conform to the Department's specialized needs which leads to greater efficiency in the Departments procurement processes and lower administrative costs.

 

(4) The approximately 3,000 vendors from which the Department made purchases belong to a variety of industries. Industries such as the ostensibly obvious civil engineering, highway construction, and animal carcass removal to less obvious weather forecasting, event planning, and residential property management industries.

 

(5) The approximately 3,000 vendors from which the Department made purchases in FY 2019 range in size from sole proprietors that have no employees to firms affiliated with large international holding companies with thousands of employees. For a complete list of all vendors from which the Department made purchases in FY 2019, or with which the Department has active contracts, please contact the Department directly.

 

(6) The Department does not anticipate this new rule will have a fiscal impact on any of the businesses that attempt to secure contracts with it, regardless of size, following procedures expressed in the rule. Any fiscal impact this new rule does have on a business is unforeseeable.

 

Carlos Braceras, Executive Director of the Department of Transportation, has reviewed and approved this analysis.

 

 

R907. Transportation, Administration.

R907-33. Department of Transportation Procurement Rules.

R907-33-1. Authority and Purpose.

(1) This administrative rule, R907-33, is authorized by Utah Code Subsections 63G-6a-106(3)(a), and 72-1-201(h).

(2) The purpose of this rule is to establish procedures for purchasing equipment, services, and supplies necessary to perform and exercise the department's functions, powers, duties, rights, and responsibilities mandated by Utah Code Section 72-1-201.

 

R907-33-2. Definitions.

Terms used in this rule, R907-33, are as defined in Utah Code Section 63G-6a-103 unless stated otherwise by a section or subsection of this rule, R907-33.

 

R907-33-3. Application of Rule.

This rule, R907-33 applies to all vendors that are bound by contracts with the Department, vendors competing for contracts with the Department, and to all Department divisions and work groups administrating contracts.

 

R907-33-4. Use of Similar Laws and Rules to Establish Precedent or Extrapolate Legal Intent - Title R33 Division of Purchasing and General Services.

(1) When the Department or its legal counsel determines a specific law or rule governing an issue does not exist, the executive director or designee, or the Department's legal counsel may refer to other laws similar in nature to the issue to establish a precedent or extrapolation of legal intent to assist in making a determination based on the reasonable person standard.

(2) For matters not addressed by this rule, R907-33 or rule R907-66, the applicable section or subsection of Title R33 Division of Purchasing and General Services shall apply.

 

R907-33-5. Competitive Procurement Required for Expenditure of Public Funds, Use of Public Property or Other Public Assets to Acquire Products and Services Unless Exception is Authorized, Need for Flexibility.

(1) Employees and agents conducting or administering the Department's procurement processes must maximize competition for contracts as much as practicable.

(2) Unless the executive director or a designee issues a written exception in accordance with provisions set forth in the Utah Procurement Code and applicable administrative rules documenting why a competitive procurement process is not required and why it is in the best interest of the Department to award a contract without engaging in a standard procurement process, the department must conduct a standard procurement process whenever:

(a) Public funds are expended or used to acquire a procurement item; or

(b) the Department's property, name, influence, assets, resources, programs, or other things of value are used as consideration in the formation of a contract for a procurement item.

(3) The standard of care the Department must exercise when designing, constructing, and maintaining a state highway in a reasonably safe condition for travel requires that its procurement practices are flexible enough to allow it to consider all characteristics, terms, and conditions relevant to satisfying its needs when procuring required products and services.

 

R907-33-6. Multiple Award Contracts.

(1) Multiple Award Contracts. Awarding a contract for an indefinite quantity of a product or service to more than one seller. Contracts may be entered on a multiple award basis when the manager of procurement services determines that one or more of the following criteria is applicable:

(a) It is administratively or economically impractical to develop or modify specifications for a myriad of related supplies because of rapid technological changes.

(b) The subjective nature in the use of certain supplies and the fact that recognizing this need creates a more efficient use of the item.

(c) It is administratively or economically impractical to develop or modify specifications because of the heterogeneous nature or dissimilar attributes of the product lines.

(d) There is a need for compatibility with existing systems.

(e) The department should select the contractor to furnish the supply, service or construction based upon best value or return on investment.

(f) The product or service being procured serves a purpose of preventing or forestalling a threat to public health, welfare or safety.

(2) The Department may use invitations for bids or requests for proposals to solicit for multiple award contracts.

(3) If the Department anticipates entering into a multiple award contract before issuing the invitation for bids or request for proposals, it will:

(a) State in the solicitation that the Department may enter into multiple award contracts at the end of the procurement process, and

(b) describe the methodology the Department will use to determine the number of contract awards.

 

R907-33-7. Exceptions to Competition-Based Procurement.

(1)(a) Small Purchases. The Department will conduct small purchases as required by Utah Code Section 63G-6a-506, and rules R33-5-104, R33-5-106, R33-5-106.5, and R33-5-107.

(b) The small purchase threshold for individual procurements will be $5,000 rather that the threshold for individual procurements included in rule R33-5-104(3)(a).

(c) The Department will conduct small purchases of professional service providers and consultants as required by rule R907-66.

(2) Sole Source Procurement. A contract may be awarded for a supply, service or construction item without competition if the contracting officer first determines in writing that one of the following conditions exists:

(a) Only a single contractor is capable of providing the supply, service or construction.

(b) A Federal or State statute or Federal regulation exempts the supply, service or construction from the competitive procedure.

(c) The total cost of the supply, service or construction is less than the amount established by the department for small, no-bid procurements pursuant to R33-5 relating to small procurements.

(d) The manager of procurement services determines in writing it is clearly not feasible to award the contract for supplies or services on a competitive basis.

(e) The services are to be provided by attorneys, legal services providers, or litigation consultants selected by the Attorney General's Office.

(f) The services are to be provided by expert witnesses.

(g) The services involve the repair, modification, or calibration of equipment and they are to be performed by the manufacturer of the equipment or by the manufacturer's authorized dealer provided the manager of procurement services determines in writing that bidding is not appropriate under the circumstances.

(h) The executive director or designee determines in writing the contract for supplies or services are to protect public health, welfare, or safety, or to protect the safety or security of a transportation system.

(3)(a) Pursuant to authority granted by Utah Code Subsection 63G-6a-802(3)(b)(ii), the Department is not required to publish a notice of any kind prior to making a sole source procurement.

(b) The manager of procurement services may require publication of a notice of the Department's intent to make a sole source procurement if the manager determines publishing such a notice is necessary to maintain the fair and equitable treatment of persons who deal with the Department's procurement system.

(4) Written determination and large sole source procurements. The written determination authorizing sole source procurement must be included in the contract file. For procurements over $250,000 made under subsection R907-33-7(2)(i), the determination shall be approved by the attorney general's office.

(5) Regularly scheduled audits. The executive director or a designee may require regular audits of procurements made pursuant to any subsection of this rule R907-33-7.

(6) Emergency procurement. The executive director or a designee will make or authorize others to make an emergency procurement when there exists a threat to public health, welfare or safety, or circumstances outside the control of the Department create an urgency of need that does not permit the delay involved in using formal competitive procurement methods.

(a) A written authorization to make an emergency procurement will be required.

(b) The provider of the supply, service, or construction procured pursuant to this subsection, R907-33-7(6) may be paid based on the written authorization required by subsection R907-33-7(6)(a).

(c) Procurements made according to the requirements of this section R907-33-7(6) may not to be affected by divergent terms included in other contracts.

 

KEY: procurement, contractors, purchasing, vendors

Date of Enactment or Last Substantive Amendment: 2019

Authorizing, and Implemented or Interpreted Law: 63G-6a-106(3)(a); 72-1-201(h)