CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

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SUBSECTION 4.3.1.2
COMPETITIVE PROCUREMENT REQUIREMENTS

4.3.1.2.1 Competitive Procurement Requirements Effective Date: June 11, 1998

RCW 39.29 requires that all personal services are to be competitively procured, with few exceptions. This statute reinforces the state of Washington's strong public policy favoring competition in the purchase of its goods and services. Competition provides protection to the state in ensuring fair market pricing in purchases and provides equal opportunity for qualified firms interested in public projects. Subsections 4.3.1.1.4 and 4.3.1.2.4 list the categories of contracts which are exempt from the requirements of Chapter 39.29 RCW or which are exceptions to the competitive procurement requirements. A formal competitive process called "competitive solicitation" is required for contracts of $20,000 or greater, and an informal process called "evidence of competition" is required for contracts of $5,000 or greater but less than $20,000.

4.3.1.2.1.a Competitive Solicitation

4.3.1.2.1.a(1) Competitive solicitation for contracts of $20,000 or greater requires a formal documented solicitation process. This is accomplished through development of a written solicitation document, generally a Request for Proposals (RFP), which identifies the agency's need or problem. Interested consultants submit proposals which outline their solution to the problem or need, identify their qualifications and experience to provide the services, and state their costs or fees. Another solicitation document, a Request for Qualifications/Quotations (RFQQ), may also be appropriate. In an RFQQ the agency describes the services needed and invites consultants to provide their qualifications to perform the services and to specify their costs or fees.

4.3.1.2.1.a(2) Advertising of personal service solicitations of $20,000 or greater is required in order to provide an equal and open opportunity to qualified consultants. The requirement for advertising is satisfied when a legal notice is published in at least one statewide daily newspaper in Washington state. The agency may also publish notices in other publications or on internet sites, in addition to the statewide daily newspaper. An agency bidder's list may be used in addition to advertising the project, but it is not to be used as a substitute for advertising.

An exception to advertising in a statewide daily newspaper in Washington state is allowed when the contract services will be provided entirely outside of Washington state or states contiguous to Washington. Examples of contracts to which this applies include: out-of-state taxpayer audits or trade representatives in a foreign trade office.

4.3.1.2.1.a(3) The competitive solicitation process may vary in degrees of formality depending upon the significance and dollar amounts of the contract. For example, a competitive solicitation process should normally be more extensive for a $150,000 contract than for a $20,000 contract. Additional guidelines are provided in the OFM booklet, "A Guide to Personal Services Contracting" (see Paragraph 4.3.1.1.16).

4.3.1.2.1.a(4) Competitive selection of a consultant is to be based on a pre-established set of evaluation criteria which have been identified in the solicitation document. These criteria may include, but are not limited to, such factors as:

Consultant's comparable experience and reputation,
Consultant's fees or costs,
Consultant's ability and capacity,
Consultant's work plan,
Responsiveness to time limitations,
Responsiveness to solicitation requirements,
Quality of previous performance,
Compliance with statutes and rules relating to contracts or services, and
Other factors not unnecessarily restrictive to otherwise qualified competitors.

4.3.1.2.1.a(5) Proposals submitted by consultants are to have the date and time of receipt noted on each when received at the location specified in the solicitation document. Proposals are to be evaluated after the due date for receipt of proposals.

4.3.1.2.1.a(6) Proposals are to be evaluated strictly against the evaluation criteria set forth in the solicitation document. Weighting of the evaluation criteria should be included in the solicitation document.

4.3.1.2.1.a(7) The evaluation and selection process is to be thoroughly documented in order to substantiate that all bidders were treated equally and fairly and that an equitable and impartial competition was conducted.

4.3.1.2.1.b Evidence of Competition

4.3.1.2.1.b(1) For contracts of $5,000 or greater, but less than $20,000, the agency is to issue an informal written solicitation document. At a minimum, the document should include a description of the type of services required, the proposed project schedule, a request for information on the consultant's qualifications, a request for the costs or fees the consultant would charge to perform the service, and the due date and location for responses to be submitted. The document may be issued as a letter, a memorandum or other format which clearly sets forth the required information.

4.3.1.2.1.b(2) The agency is to solicit responses from "multiple firms" in selecting a consultant. "Multiple firms" means a reasonable number of consultants considering such factors as time, cost, and availability of qualified consultants. In most instances, this means at least three consultants. If fewer than three firms are contacted, an explanation is to be included in the contract file as to why more firms were not considered.

4.3.1.2.1.b(3) Agencies must thoroughly document the process used in selection of the consultant and retain the appropriate documents, including the following:

The names of the firms contacted and/or solicited.
A copy of the solicitation document.
Information on how the consultants responded. Indicate what services each was willing to provide, the price quoted for the services, schedule for completion, and other relevant information.
A description of the evaluation and selection process. Indicate the reason(s) for selection of the successful contractor.
A copy of the contract.

The agency must maintain auditable documentation of the competitive process in the contract file.

4.3.1.2.2 Advertising of Sole Source Contracts Effective Date: June 11, 1998

Personal service contracts in the amount of $20,000 or more, which the agency has determined are appropriate for sole source procurement, shall be advertised in either a statewide or regional newspaper. Additional advertisement in other media may also be conducted. The advertising requirement is based on the individual contract amount, and is not a cumulative total of sole source contracts with a contractor in a fiscal year.

4.3.1.2.2.a The advertisement shall include at a minimum: the name of the agency, a description of the services contemplated for sole source award, the proposed period of performance for the services, information as to how an interested party may contact the agency, and the deadline for them to make such contact. The name of the proposed contractor may also be included.

4.3.1.2.2.b If a formal response is received to the advertisement from other than the proposed contractor, and the response indicates the firm is qualified to provide the service, competitive solicitation, as set forth under item "1., a" of Subsection 4.3.1.2.1, shall be conducted. If an agency can demonstrate that the proposed contractor is the only qualified and available entity to provide the service, although another firm or individual responded, the contract can be filed with OFM as a sole source with complete explanation as to how this conclusion was reached.

4.3.1.2.2.c Exemptions from the requirement for advertising of sole source procurements include:

Contracts for services where selection of the contractor is based on a personal accomplishment or characteristic, such as guest speakers, performers, and artists. This does not apply, however, to contracts for services such as training, facilitators, etc.
Contracts for services where the funding source mandates with whom the agency shall contract and, therefore, the agency does not have discretion in making the award decision. Examples include requirements set forth in statute (RCWs), budget provisos, federal grant awards, etc.
Contracts which OFM determines are inappropriate for advertising based upon written request from the agency.
Sole source contracts under $20,000.

4.3.1.2.3 Contract Exceptions to Competitive Procurement Effective Date: June 11, 1998

All personal service contracts are to be entered into pursuant to the competitive procurement requirements set forth in Paragraph 4.3.1.2.1, except for:

Sole source contracts;
Emergency contracts;
Contract amendments;
Contracts exempted under RCW 39.29.040; and
Contracts exempted from the competitive procurement process by the Director of OFM, when it has been determined that a competitive procurement process is either not appropriate or not cost-effective.

4.3.1.2.4 Procedures for Obtaining an Exemption from the Competitive Procurement Requirements Effective Date: June 11, 1998

RCW 39.29.011(5) authorizes the Director of OFM to exempt specific contracts or classes or groups of contracts from the competitive procurement process, when it has been determined that such a process is not appropriate or cost-effective.

4.3.1.2.4.a If an agency concludes that competitive procurement is not appropriate or cost-effective for a particular category of service or type of contract, the agency may request OFM to exempt that category of contracts from the competitive procurement and filing requirements.

4.3.1.2.4.b The agency should forward a request for exemption to the Director of OFM. At a minimum, the request must include:

A description of the type of service for which an exemption is requested;
An explanation as to why an exemption is considered appropriate;
The reason(s) why competitive procurement is not appropriate or cost-effective; and
An explanation of the effect or impact of not having an exemption.

4.3.1.2.4.c OFM will provide the agency with a timely written response.

4.3.1.2.4.d In the event that OFM does exempt a specific service or class or group of contracts from competitive procurement, agencies will be notified as appropriate.

4.3.1.2.5 Guidelines for Executing an Amendment Rather Than a New Contract Effective Date: June 11, 1998

Contract amendments are to be executed with the intent of RCW 39.29 in mind, which is to establish a policy of open competition for all personal services procured by state agencies. An agency is to balance its responsibility for securing outside contractual help in the most effective and economical manner possible, with its responsibility to ensure that services are competitively procured whenever appropriate, as follows:

4.3.1.2.5.a Changes to contracts may be awarded as amendments, rather than as new contracts, only if the changes are within the general scope of work of the original contract. Work that is within the general scope of the original contract is that which would be fairly and reasonably within the contemplation and intent of the parties when the contract was entered into. If the amendment provides for services that are essentially the same as those in the original contract, the amendment would likely be within the general scope of the contract.

Changes which are within the scope of work but which represent substantial changes in the quantity, duration, cost, or nature of the work are generally not appropriate contract amendments and should be addressed in new procurements.

Changes which are not appropriate to award through contract amendment are those which are outside the general scope of the contract. Such changes would have the effect of making the work performed substantially different from the work the parties bargained for at the time the original contract was awarded.

4.3.1.2.5.b The agency must demonstrate that a proposed amendment is in the best interest of the state of Washington. Evidence to satisfy this requirement should, at a minimum, address the following: project continuity, time savings, cost effectiveness, and the learning curve for a new contractor.

By their nature contract amendments allow contractors to obtain additional work without having to compete for it. In view of the state's policy of open competition in the award of personal service contracts, agency staff are to carefully and cautiously examine the nature, extent and cost of the additional services and thoroughly justify the decision to award an amendment rather than to conduct open competition for the services.

4.3.1.2.5.c If an amendment is not clearly determined to be the best choice, the agency must execute a new contract. A new contract is generally appropriate where there is a substantial change in the scope of work, duration, nature of work, or cost, or where there is a logical break in service.

4.3.1.2.5.d Amendments to sole source and emergency contracts are to be awarded only when the circumstances surrounding the original procurement still exist and, therefore, warrant continued use of sole source or emergency services.

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4.3.1.2.1.a	Competitive Solicitation
4.3.1.2.1.a(1)	Competitive solicitation for contracts of $20,000 or greater requires a formal documented solicitation process. This is accomplished through development of a written solicitation document, generally a Request for Proposals (RFP), which identifies the agency's need or problem. Interested consultants submit proposals which outline their solution to the problem or need, identify their qualifications and experience to provide the services, and state their costs or fees. Another solicitation document, a Request for Qualifications/Quotations (RFQQ), may also be appropriate. In an RFQQ the agency describes the services needed and invites consultants to provide their qualifications to perform the services and to specify their costs or fees.
4.3.1.2.1.a(2)	Advertising of personal service solicitations of $20,000 or greater is required in order to provide an equal and open opportunity to qualified consultants. The requirement for advertising is satisfied when a legal notice is published in at least one statewide daily newspaper in Washington state. The agency may also publish notices in other publications or on internet sites, in addition to the statewide daily newspaper. An agency bidder's list may be used in addition to advertising the project, but it is not to be used as a substitute for advertising.

	An exception to advertising in a statewide daily newspaper in Washington state is allowed when the contract services will be provided entirely outside of Washington state or states contiguous to Washington. Examples of contracts to which this applies include: out-of-state taxpayer audits or trade representatives in a foreign trade office.
4.3.1.2.1.a(3)	The competitive solicitation process may vary in degrees of formality depending upon the significance and dollar amounts of the contract. For example, a competitive solicitation process should normally be more extensive for a $150,000 contract than for a $20,000 contract. Additional guidelines are provided in the OFM booklet, "A Guide to Personal Services Contracting" (see Paragraph 4.3.1.1.16).
4.3.1.2.1.a(4)	Competitive selection of a consultant is to be based on a pre-established set of evaluation criteria which have been identified in the solicitation document. These criteria may include, but are not limited to, such factors as:
	Consultant's comparable experience and reputation, Consultant's fees or costs, Consultant's ability and capacity, Consultant's work plan, Responsiveness to time limitations, Responsiveness to solicitation requirements, Quality of previous performance, Compliance with statutes and rules relating to contracts or services, and Other factors not unnecessarily restrictive to otherwise qualified competitors.
4.3.1.2.1.a(5)	Proposals submitted by consultants are to have the date and time of receipt noted on each when received at the location specified in the solicitation document. Proposals are to be evaluated after the due date for receipt of proposals.
4.3.1.2.1.a(6)	Proposals are to be evaluated strictly against the evaluation criteria set forth in the solicitation document. Weighting of the evaluation criteria should be included in the solicitation document.
4.3.1.2.1.a(7)	The evaluation and selection process is to be thoroughly documented in order to substantiate that all bidders were treated equally and fairly and that an equitable and impartial competition was conducted.

4.3.1.2.1.b	Evidence of Competition
4.3.1.2.1.b(1)	For contracts of $5,000 or greater, but less than $20,000, the agency is to issue an informal written solicitation document. At a minimum, the document should include a description of the type of services required, the proposed project schedule, a request for information on the consultant's qualifications, a request for the costs or fees the consultant would charge to perform the service, and the due date and location for responses to be submitted. The document may be issued as a letter, a memorandum or other format which clearly sets forth the required information.
4.3.1.2.1.b(2)	The agency is to solicit responses from "multiple firms" in selecting a consultant. "Multiple firms" means a reasonable number of consultants considering such factors as time, cost, and availability of qualified consultants. In most instances, this means at least three consultants. If fewer than three firms are contacted, an explanation is to be included in the contract file as to why more firms were not considered.
4.3.1.2.1.b(3)	Agencies must thoroughly document the process used in selection of the consultant and retain the appropriate documents, including the following:
	The names of the firms contacted and/or solicited. A copy of the solicitation document. Information on how the consultants responded. Indicate what services each was willing to provide, the price quoted for the services, schedule for completion, and other relevant information. A description of the evaluation and selection process. Indicate the reason(s) for selection of the successful contractor. A copy of the contract.

	The agency must maintain auditable documentation of the competitive process in the contract file.

	Personal service contracts in the amount of $20,000 or more, which the agency has determined are appropriate for sole source procurement, shall be advertised in either a statewide or regional newspaper. Additional advertisement in other media may also be conducted. The advertising requirement is based on the individual contract amount, and is not a cumulative total of sole source contracts with a contractor in a fiscal year.
4.3.1.2.2.a	The advertisement shall include at a minimum: the name of the agency, a description of the services contemplated for sole source award, the proposed period of performance for the services, information as to how an interested party may contact the agency, and the deadline for them to make such contact. The name of the proposed contractor may also be included.
4.3.1.2.2.b	If a formal response is received to the advertisement from other than the proposed contractor, and the response indicates the firm is qualified to provide the service, competitive solicitation, as set forth under item "1., a" of Subsection 4.3.1.2.1, shall be conducted. If an agency can demonstrate that the proposed contractor is the only qualified and available entity to provide the service, although another firm or individual responded, the contract can be filed with OFM as a sole source with complete explanation as to how this conclusion was reached.
4.3.1.2.2.c	Exemptions from the requirement for advertising of sole source procurements include: Contracts for services where selection of the contractor is based on a personal accomplishment or characteristic, such as guest speakers, performers, and artists. This does not apply, however, to contracts for services such as training, facilitators, etc. Contracts for services where the funding source mandates with whom the agency shall contract and, therefore, the agency does not have discretion in making the award decision. Examples include requirements set forth in statute (RCWs), budget provisos, federal grant awards, etc. Contracts which OFM determines are inappropriate for advertising based upon written request from the agency. Sole source contracts under $20,000.

	All personal service contracts are to be entered into pursuant to the competitive procurement requirements set forth in Paragraph 4.3.1.2.1, except for:
	Sole source contracts; Emergency contracts; Contract amendments; Contracts exempted under RCW 39.29.040; and Contracts exempted from the competitive procurement process by the Director of OFM, when it has been determined that a competitive procurement process is either not appropriate or not cost-effective.

	RCW 39.29.011(5) authorizes the Director of OFM to exempt specific contracts or classes or groups of contracts from the competitive procurement process, when it has been determined that such a process is not appropriate or cost-effective.
4.3.1.2.4.a	If an agency concludes that competitive procurement is not appropriate or cost-effective for a particular category of service or type of contract, the agency may request OFM to exempt that category of contracts from the competitive procurement and filing requirements.
4.3.1.2.4.b	The agency should forward a request for exemption to the Director of OFM. At a minimum, the request must include:
	A description of the type of service for which an exemption is requested; An explanation as to why an exemption is considered appropriate; The reason(s) why competitive procurement is not appropriate or cost-effective; and An explanation of the effect or impact of not having an exemption.
4.3.1.2.4.c	OFM will provide the agency with a timely written response.
4.3.1.2.4.d	In the event that OFM does exempt a specific service or class or group of contracts from competitive procurement, agencies will be notified as appropriate.

4.3.1.2.5.a	Changes to contracts may be awarded as amendments, rather than as new contracts, only if the changes are within the general scope of work of the original contract. Work that is within the general scope of the original contract is that which would be fairly and reasonably within the contemplation and intent of the parties when the contract was entered into. If the amendment provides for services that are essentially the same as those in the original contract, the amendment would likely be within the general scope of the contract. Changes which are within the scope of work but which represent substantial changes in the quantity, duration, cost, or nature of the work are generally not appropriate contract amendments and should be addressed in new procurements.
	Changes which are not appropriate to award through contract amendment are those which are outside the general scope of the contract. Such changes would have the effect of making the work performed substantially different from the work the parties bargained for at the time the original contract was awarded.
4.3.1.2.5.b	The agency must demonstrate that a proposed amendment is in the best interest of the state of Washington. Evidence to satisfy this requirement should, at a minimum, address the following: project continuity, time savings, cost effectiveness, and the learning curve for a new contractor. By their nature contract amendments allow contractors to obtain additional work without having to compete for it. In view of the state's policy of open competition in the award of personal service contracts, agency staff are to carefully and cautiously examine the nature, extent and cost of the additional services and thoroughly justify the decision to award an amendment rather than to conduct open competition for the services.
4.3.1.2.5.c	If an amendment is not clearly determined to be the best choice, the agency must execute a new contract. A new contract is generally appropriate where there is a substantial change in the scope of work, duration, nature of work, or cost, or where there is a logical break in service.
4.3.1.2.5.d	Amendments to sole source and emergency contracts are to be awarded only when the circumstances surrounding the original procurement still exist and, therefore, warrant continued use of sole source or emergency services.