Appendix H
Department
of Administrative Services [11]
CHAPTER 106
PURCHASING
STANDARDS FOR SERVICE CONTRACTS
Ch 106, p.1 Administrative Services[11] IAC 9/17/03 CHAPTER 106
PURCHASING STANDARDS FOR SERVICE CONTRACTS [Prior to 9/17/03, see 401—Chapter
12] IAC 9/17/03
11—106.1(80GA,HF534) Authority and scope. This chapter is adopted for
the purpose of establishing a system of uniform standards for purchasing
services in state government. The department of administrative services has
adopted these uniform standards in cooperation with other state agencies as
provided for in 2003 Iowa Acts, House File 534, section 29. The rules address
when departments and establishments must use competitive selection to purchase
services and when it is acceptable to use a sole source or emergency
procurement instead of a competitive selection process. The rules provide a
mechanism that allows departments and establishments to use an informal competitive
process for purchases of services when the estimated annual value of the
contract is less than $50,000 and when the estimated value of the multiyear
contract in the aggregate, including renewals, is less than $150,000. The rules
also include guidance to departments and establishments about additional
requirements and procedures they should follow when purchasing services.
1—106.2(80GA,HF534) Applicability. This chapter shall apply to all
departments and establishments purchasing services unless otherwise provided by
law.
11—106.3(80GA,HF534) Definitions. For the purposes of this chapter, the
following definitions shall apply:
“Competitive selection” means a formal or informal process engaged in by a
department or establishment to compare provider qualifications, terms,
conditions, and prices of equal or similar services in order to meet the
objective of purchasing services based on quality, performance, price, or any
combination thereof. During a competitive selection process, a department or establishment
may weigh the relevant selection criteria in whatever fashion it believes will
enable it to select the service provider that submits the best proposal. The
lowest priced proposal is not necessarily the best proposal.
“Department and establishment” and “department” or “establishment” means any
executive department, commission, board, institution, bureau, office, or other
agency of the state government, except the courts, by whatever name called,
other than the legislature, that uses, expends or receives any state funds.
“Duration” means the specific length of a service contract.
“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 establishment must act to preserve critical
services or programs or in which the need is a result of events or
circumstances not reasonably foreseeable.
“Emergency procurement” means an acquisition of a service or services resulting
from an emergency need.
“Formal competition” means a competitive selection process that employs a
request for proposal or other competitive selection process authorized by
applicable law resulting in a service contract.
“Informal competition” means a streamlined competitive selection process in
which a department or establishment makes an effort to contact at least three
prospective service providers identified by the purchasing department or
establishment as qualified to perform the work described in the scope of work
to provide bids or proposals to provide the services the department or
establishment is seeking.
“Intergovernmental agreement” means an agreement for services between a
department or establishment and any other governmental entity, department or
establishment whether federal, state, or local and any department, division,
unit or subdivision thereof.
“Private agency” or “private agencies” means an individual or any form of
business organization authorized under the laws of this or any other state or
under the laws of any foreign jurisdiction.
“Selection documents” means documents prepared for a competitive selection by a
department or establishment to purchase services. Selection documents may
include requests for proposal, invitations to bid, invitations to bid with best
value considerations, invitations to qualify, requests for strategy, auctions,
reverse auctions, negotiated selection, or any other type of document a
department or establishment is authorized to use that is designed to advise
service providers that a department or establishment is interested in procuring
services for state government.
“Service” or “services” means work performed for a department or establishment
or for its clients by a service provider and includes, but is not limited to:
1. Professional or technical expertise provided by a consultant, advisor or
other technical or service provider to accomplish a specific study, review,
project, task, or other work as described in the scope of work. By way of
example and not by limitation, these services may include the following:
accounting services; aerial surveys; aerial mapping and seeding; appraisal
services; land surveying services; construction manager services; analysis and
assessment of processes, programs, fiscal impact, compliance, systems and the
like; auditing services; communications services; services of peer reviewers,
attorneys, financial advisors, and expert witnesses for litigation;
architectural services; information technology consulting services; services of
investment advisors and managers; marketing services; policy development and
recommendations; program development; public involvement services and
strategies; research services; scientific and related technical services;
software development and system design; and services of underwriters,
physicians, pharmacists, engineers, and architects; or
2. Services provided by a vendor to accomplish routine functions. These
services contribute to the day-to-day operations of state government. By way of
example and not by limitation, these services may include the following:
ambulance service; charter service; boiler testing; bookkeeping service;
building alarm systems service and repair; commercial laundry service;
communications systems installation, servicing and repair; court reporting and
transcription services; engraving service; equipment or machine installation,
preventive maintenance, inspection, calibration and repair; heating,
ventilation and air conditioning (HVAC) system maintenance service; janitorial
service; painting; pest and weed control service; grounds maintenance, mowing,
parking lot sweeping and snow removal service; towing service; translation
services; and travel service.
“Service contract” means a contract for a service or services when the
predominant factor, thrust, and purpose of the contract as reasonably stated is
for the provision or rendering of services. 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 provision or rendering of services
with goods incidentally involved, a service contract exists and these rules
apply.
“Service contract” includes grants when the predominant factor, thrust, and
purpose of the contract formalizing the grant is for the provision or rendering
of services.
“Service provider” means a vendor that enters into a service contract with a
department or establishment. “Sole source procurement” means a purchase of
services in which the department or establishment selects a service provider
without engaging in a competitive selection process. 11—106.4(80GA,HF534) Intergovernmental
agreements. In the event another governmental entity has resources available to
supply a service sought by a department or establishment, the department or
establishment may enter into an intergovernmental agreement with the other
governmental entity and is not required to use competitive selection.
11—106.5(80GA,HF534) Use of competitive selection. Departments and
establishments shall use competitive selection to acquire services from private
agencies when the estimated annual value of the service contract is equal to or
greater than $5,000 or when the estimated value of the multiyear service
contract in the aggregate, including any renewals, is equal to or greater than
$15,000 unless there is adequate justification for a sole source or emergency
procurement pursuant to rule 106.7(80GA, HF534) or 106.8(80GA,HF534) or another
provision of law.
106.5(1) When the estimated annual value of the service contract is
equal to or greater than $50,000 or the estimated value of the multiyear
service contract in the aggregate, including any renewals, exceeds $150,000, a
department or establishment shall use a formal competitive selection process to
procure the service.
106.5(2) When the estimated annual value of the service contract is
equal to or greater than $5,000 but less than $50,000 and the estimated value
of the multiyear service contract in the aggregate, including any renewals,
does not exceed $150,000, a department or establishment, in its sole
discretion, shall use either a formal or informal competitive selection process
to engage a service provider.
106.5(3) The requirement to use competitive selection to select a
service provider when the estimated annual value of the service contract is
equal to or greater than $5,000 or when the estimated value of the multiyear service
contract in the aggregate, including renewals, is equal to or greater than
$15,000 applies even when the department or establishment purchases services
from a private entity and designates the contract it enters into with the
private entity as a 28E agreement.
11—106.6 Reserved.
11—106.7(80GA,HF534) Sole source procurements.
106.7(1) When justified. A sole source procurement shall be avoided
unless clearly necessary and justifiable. A department or establishment may
purchase services using a sole source procurement under the following
circumstances: a. A department or establishment determines that one service
provider is the only one qualified or eligible or is quite obviously the most
qualified or eligible to perform the service; or b. The services being
purchased involve work that is of such a specialized nature or related to a
specific geographic location that only a single source, by virtue of
experience, expertise, proximity to the project, or ownership of intellectual
property rights, could most satisfactorily provide the service; or c. A
department or establishment is hiring a service provider to provide peer review
services for a professional licensing board pursuant to Iowa Code chapter 272C;
or d. A department or establishment is hiring the services of experts,
advisors, counsel or consultants to assist in any type of legal proceeding
including but not limited to testifying or assisting in the preparation of
quasi-judicial or judicial proceedings; or e. The federal government or other
provider of funds for the services being purchased (other than the state of
Iowa) has imposed clear and specific restrictions on the department’s or
establishment’s use of the funds in a way that restricts the department or
establishment to only one service provider; or f. Applicable law requires,
provides for, or permits use of a sole source procurement.
106.7(2) Special procedures required for sole source procurements. a.
When the annual value of the service contract exceeds $5,000 or when the
estimated value of the multiyear service contract in the aggregate, including
renewals, is equal to or greater than $15,000, the head of a department or
establishment or designee shall sign the sole source contract or the amendment.
Use of sole source procurement does not relieve a department or establishment
from negotiating a fair and reasonable price and thoroughly documenting the
procurement action. b. When the annual value of the service contract exceeds
$5,000 or when the estimated value of the multiyear service contract in the
aggregate, including renewals, is equal to or greater than $15,000, a
department or establishment shall be required to complete a sole source
justification form. The director of the department or establishment shall sign
the sole source justification form. The claim for the first payment on a
contract requires a copy of the signed original contract, a copy of the
pre-contract questionnaire, a copy of the sole source justification form, and an
original invoice or original claimant signature. c. The contract for the sole
source procurement shall comply with 11 IAC 107.4(8,80GA,HF534), uniform terms
and conditions for service contracts, or 11 IAC 107.5(8,80GA,HF534), special
terms and conditions.
11—106.8(80GA,HF534) Emergency procurements.
106.8(1) When justified. 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 establishment may
consider price and availability of the service procured so that the department
or establishment obtains the best value for the funds spent under the
circumstances. Departments or establishments should attempt to acquire services
with as much competition as practicable under the circumstances.
106.8(2) Special procedures required for emergency procurements. a. The
head of a department or establishment shall sign all emergency contracts and
amendments regardless of value or length of term. If the head of a department
or establishment is not available, a designee may sign an emergency contract or
amendment. Use of an emergency procurement does not relieve a department or
establishment from negotiating a fair and reasonable price and documenting the
procurement action. b. When the value of the service contract exceeds $5,000, a
department or establishment shall be required to complete an emergency
justification form. The director of the department or establishment or the
director’s designee shall sign the emergency justification form. c. If an
emergency procurement results in the extension of an existing contract that
contains performance criteria, the contract extension shall comply with 11 IAC
107.4(8,80GA,HF534), uniform terms and conditions for service contracts, or 11
IAC 107.5(8,80GA,HF534), special terms and conditions.
11—106.9(80GA,HF534) Informal competitive procedures.
106.9(1) When utilizing an informal competition as defined in rule
106.3(80GA,HF534), the department or establishment may contact the prospective
service providers in person, by telephone, fax, E-mail or letter. When the
department or establishment is not able to locate three prospective service
providers, the department or establishment must justify contacting fewer than
three service providers. The justification shall be included in the contract
file.
106.9(2) A department or establishment may send copies of the scope of
work to service providers that it has identified as qualified to perform the
work described in the scope of work.
11—106.10 Reserved.
11—106.11(80GA,HF534) Duration of service contracts.
106.11(1) Each service contract signed by a department or establishment
shall have a specific starting and ending date.
106.11(2) Departments and establishments shall not sign self-renewing
service contracts that do not have a specific ending date.
106.11(3) A service contract should be competitively selected on a
regular basis so that a department or establishment obtains the best value for
the funds spent, avoids inefficiencies, waste or duplication and may take advantage
of new innovations, ideas and technology. A service contract, including all
optional renewals, shall not exceed a term of six years unless the department
or establishment obtains a waiver of this provision pursuant to rule
106.16(80GA,HF534).
11—106.12(80GA,HF534) Additional procedures or requirements.
106.12(1) Departments and establishments, whether utilizing informal or
formal competition, shall provide a notice of each procurement for services to
the targeted small business Web page located at the
106.12(2) Except in an emergency procurement, services shall not be
performed pursuant to a service contract for a department or establishment
until all parties to the contract have signed the contract.
106.12(3) At the conclusion of the competitive selection process, all
service providers shall be required to sign a service contract.
106.12(4) Each department or establishment shall maintain a contracting
file for each service contract signed by the department or establishment.
11—106.13 and 106.14 Reserved.
11—106.15(80GA,HF534) Exclusions and limitations.
106.15(1) These rules do not apply to contracts for both goods and
services when the predominant factor, thrust, and purpose of the contract as
reasonably stated is for the purchase of goods with service incidentally
involved. However, in no event shall departments and establishments designate
contracts as contracts for goods to avoid the application of these rules.
106.15(2) Nothing in this chapter is intended to supplant or supersede
the requirements adopted by the department of administrative services relating
to the processing of claims. Departments or establishments entering into
personal services contracts should refer to procedure 240.102 of the department
of administrative services, state accounting enterprise policy and procedure
manual.
11—106.16(80GA,HF534) Waiver procedure.
106.16(1) For the purpose of this chapter, a “waiver or variance” means
an action by the director of the department of administrative services that
suspends, in whole or in part, the requirements or provisions of a rule in this
chapter as applied to a department or establishment when the department or
establishment establishes good cause for a waiver or variance of the rule. For
simplicity, the term “waiver” shall include both a “waiver” and a “variance.”
106.16(2) Requests for waivers. A department or establishment seeking a
waiver shall submit a written request for a waiver to the director. The written
request shall identify the rule for which the department or establishment seeks
a waiver, the contract or class of contracts for which the department or
establishment seeks a waiver, and the reasons that the department or
establishment believes justify granting the waiver.
106.16(3) Criteria for waiver. In response to a request for a waiver
submitted by a department or establishment, 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 department or establishment has established good cause
for waiving the requirements of the rule. “Good cause” includes, but is not
limited to, 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 feasible than a six-year contract in light of the service being
purchased by the department or establishment.
11—106.17(80GA,HF534) Effective date. This chapter shall apply to
service contracts with a starting date on or after October 1, 2002. These rules
are intended to implement 2003 Iowa Acts, House File 534, sections 4 and 29.
[Filed 8/2/02, Notice 4/3/02—published 8/21/02, effective 10/1/02] [Filed
emergency 8/29/03—published 9/17/03, effective 9/2/03] IAC 9/17/03
CHAPTER 107
UNIFORM TERMS AND CONDITIONS FOR SERVICE CONTRACTS