A.R.S. tit. 41 ch. 23 — Arizona Revised Statutes Title 41 Chapter 23 — Arizona Procurement Code

41-2501. Applicability A. This chapter applies only to procurements initiated after January 1, 1985 unless the parties agree to its application to procurements initiated before that date. B. This chapter applies to every expenditure of public monies, including federal assistance monies except as otherwise specified in section 41-2637, by this state, acting through a state governmental unit, under any contract, except that this chapter does not apply to either grants, or contracts between this state and its political subdivisions or other governments, except as provided in chapter 24 of this title and in article 10 of this chapter. This chapter also applies to the disposal of state materials. This chapter and rules adopted under this chapter do not prevent any state governmental unit or political subdivision from complying with the terms of any grant, gift, bequest or cooperative agreement. C. All political subdivisions and other local public agencies of this state may adopt all or any part of this chapter and the rules adopted pursuant to this chapter. D. Notwithstanding any other law, sections 41-2517 and 41-2546 apply to any agency as defined in section 41-1001, including the office of the governor. E. The Arizona board of regents and the legislative and judicial branches of state government are not subject to this chapter except as prescribed in subsections F and G of this section. F. The Arizona board of regents shall adopt rules prescribing procurement policies and procedures for itself and institutions under its jurisdiction. The rules must be substantially equivalent to the other policies and procedures prescribed in this chapter, including sections 41-2576 and 41-2577. G. The judicial branch shall adopt rules prescribing procurement policies and procedures for itself and institutions under its jurisdiction. The rules must be substantially equivalent to the policies and procedures prescribed in this chapter. H. The Arizona state lottery commission is exempt from this chapter for procurement relating to the design and operation of the lottery or purchase of lottery equipment, tickets and related materials. The executive director of the Arizona state lottery commission shall adopt rules substantially equivalent to the policies and procedures in this chapter for procurement relating to the design and operation of the lottery or purchase of lottery equipment, tickets or related materials. All other procurement shall be as prescribed by this chapter. I. The Arizona health care cost containment system administration is exempt from this chapter for provider contracts pursuant to section 36-2904, subsection A and contracts for goods and services, including program contractor contracts pursuant to title 36, chapter 29, articles 2 and 3 and contracts with regional behavioral health authorities pursuant to title 36, chapter 34. All other procurement, including contracts for the statewide administrator of the program pursuant to section 36-2903, subsection B, shall be as prescribed by this chapter. J. Arizona correctional industries is exempt from this chapter for purchases of raw materials, components and supplies that are used in the manufacture or production of goods or services for sale entered into pursuant to section 41-1622. All other procurement shall be as prescribed by this chapter. K. The state transportation board and the director of the department of transportation are exempt from this chapter other than sections 41-2517 and 41-2586 and are subject to title 28, chapter 20 and 2 Code of Federal Regulations section 200.317 for the procurement of the following: 1. All items of construction, reconstruction, rehabilitation, preservation or improvement undertaken on highway infrastructure. 2. Engineering services and any other work or activity to carry out engineering services related to highway infrastructure. 3. Right-of-way services related to land titles, appraisals, real property acquisitions, relocation services, property management and facility design. 4. Any other construction, reconstruction, rehabilitation, preservation or improvement work or activity that is required pursuant to title 28, chapter 20. L. The Arizona highways magazine is exempt from this chapter for contracts for the production, promotion, distribution and sale of the magazine and related products and for contracts for sole source creative works entered into pursuant to section 28-7314, subsection A, paragraph 5. All other procurement shall be as prescribed by this chapter. M. The secretary of state is exempt from this chapter for contracts entered into pursuant to section 41-1012 to publish and sell the administrative code. All other procurement shall be as prescribed by this chapter. N. This chapter does not apply to contracts for professional witnesses if the purpose of such contracts is to provide for professional services or testimony relating to an existing or probable judicial proceeding in which this state is or may become a party or to contract for special investigative services for law enforcement purposes. O. The head of any state governmental unit, in relation to any contract exempted by this section from this chapter, has the same authority to adopt rules, procedures or policies as is delegated to the director pursuant to this chapter. P. Agreements negotiated by legal counsel representing this state in settlement of litigation or threatened litigation are exempt from this chapter. Q. This chapter is not applicable to contracts entered into by the department of economic security: 1. With a provider licensed or certified by an agency of this state to provide child day care services. 2. With area agencies on aging created pursuant to the older Americans act of 1965 (P.L. 89-73; 79 Stat. 218; 42 United States Code sections 3001 through 3058ff). 3. For services pursuant to title 36, chapter 29, article 2. 4. With an eligible entity as defined by Public Law 105-285, section 673(1)(A)(i), as amended, for designated community services block grant program monies and any other monies given to the eligible entity that accomplishes the purpose of Public Law 105-285, section 672. R. The Arizona health care cost containment system may not require that persons with whom it contracts follow this chapter for the purposes of subcontracts entered into for the provision of the following: 1. Mental health services pursuant to section 36-189, subsection B. 2. Services for the seriously mentally ill pursuant to title 36, chapter 5, article 10. 3. Drug and alcohol services pursuant to section 36-141. S. The department of health services may not require that persons with whom it contracts follow this chapter for the purpose of subcontracts entered into for the provision of domestic violence services pursuant to title 36, chapter 30, article 1. T. The department of health services is exempt from this chapter for contracts for services of physicians at the Arizona state hospital and contracts to provide medically necessary physical health care to individuals under the care of the Arizona state hospital. U. Contracts for goods and services approved by the board of trustees of the public safety personnel retirement system are exempt from this chapter. V. The Arizona department of agriculture is exempt from this chapter with respect to contracts for private labor and equipment to effect cotton or cotton stubble plow-up pursuant to rules adopted under title 3, chapter 2, article 1. W. The Arizona state parks board is exempt from this chapter for purchases of guest supplies and items for resale such as food, linens, gift items, sundries, furniture, china, glassware and utensils for the facilities located in the Tonto natural bridge state park. X. The Arizona state parks board is exempt from this chapter for the purchase, production, promotion, distribution and sale of publications, souvenirs and sundry items obtained and produced for resale. Y. The Arizona state schools for the deaf and the blind are exempt from this chapter for the purchase of textbooks and when purchasing products through a cooperative that is organized and operates in accordance with state law if such products are not available on a statewide contract and are related to the operation of the schools or are products for which special discounts are offered for educational institutions. Z. Expenditures of monies in the morale, welfare and recreational fund established by section 26-153 are exempt from this chapter. AA. Notwithstanding section 41-2534, the director of the state department of corrections may contract with local medical providers in counties with a population of less than four hundred thousand persons for the following purposes: 1. To acquire hospital and professional medical services for inmates who are incarcerated in state department of corrections facilities that are located in those counties. 2. To ensure the availability of emergency medical services to inmates in all counties by contracting with the closest medical facility that offers emergency treatment and stabilization. BB. The department of environmental quality is exempt from this chapter for contracting for procurements relating to the water quality assurance revolving fund program established pursuant to title 49, chapter 2, article 5. The department shall engage in a source selection process that is similar to the procedures prescribed by this chapter. The department may contract for remedial actions with a single selection process. The exclusive remedy for disputes or claims relating to contracting pursuant to this subsection is as prescribed by article 9 of this chapter and the rules adopted pursuant to that article. All other procurement by the department shall be as prescribed by this chapter. CC. The motor vehicle division of the department of transportation is exempt from this chapter for third-party authorizations pursuant to title 28, chapter 13, only if all of the following conditions exist: 1. The division does not pay any public monies to an authorized third party. 2. Exclusivity is not granted to an authorized third party. 3. The director has complied with the requirements prescribed in title 28, chapter 13 in selecting an authorized third party. DD. This section does not exempt third-party authorizations pursuant to title 28, chapter 13 from any other applicable law. EE. The state forester is exempt from this chapter for purchases and contracts relating to wildland fire suppression and pre-positioning equipment resources and for other activities related to combating wildland fires and other unplanned risk activities, including fire, flood, earthquake, wind and hazardous material responses. All other procurement by the state forester shall be as prescribed by this chapter. FF. The cotton research and protection council is exempt from this chapter for procurements. GG. The Arizona commerce authority is exempt from this chapter, except article 10 for the purpose of cooperative purchases. The authority shall adopt policies, procedures and practices, in consultation with the department of administration, that are similar to and based on the policies and procedures prescribed by this chapter for the purpose of increased public confidence, fair and equitable treatment of all persons engaged in the process and fostering broad competition while accomplishing flexibility to achieve the authority's statutory requirements. The authority shall make its policies, procedures and practices available to the public. The authority may exempt specific expenditures from the policies, procedures and practices. HH. The Arizona exposition and state fair board is exempt from this chapter for contracts for professional entertainment. II. This chapter does not apply to purchases of water, gas or electric utilities. JJ. This chapter does not apply to professional certifications, professional memberships and conference registrations. KK. The department of gaming is exempt from this chapter for problem gambling treatment services contracts with licensed behavioral health professionals. LL. This chapter does not apply to contracts for credit reporting services. MM. This chapter does not apply to contracts entered into by the department of child safety: 1. With a provider of family foster care pursuant to section 8-503. 2. With an eligible entity as defined by Public Law 105-285, section 673(1)(A)(i), as amended, for designated community services block grant program monies and any other monies given to the eligible entity that accomplishes the purpose of Public Law 105-285, section 672. 3. For services pursuant to title 36, chapter 29, article 1 and as set forth in the approved medicaid state plan. NN. This chapter does not apply to contracts entered into by the department of economic security with a financial institution to serve as a program manager and depository under section 46-903. 41-2502. Determinations Written determinations required by this chapter shall be retained in the appropriate official records file of the director. 41-2503. Definitions In this chapter, unless the context otherwise requires: 1. "Architect services" means those professional architect services that are within the scope of architectural practice as provided in title 32, chapter 1. 2. "Business" means any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture or other private legal entity. 3. "Change order" means a written order that is signed by a procurement officer and that directs the contractor to make changes that the changes clause of the contract authorizes the procurement officer to order. 4. "Construction": (a) Means the process of building, altering, repairing, improving or demolishing any public structure or building or other public improvements of any kind to any public real property. (b) Does not include: (i) The routine operation, routine repair or routine maintenance of existing facilities, structures, buildings or real property. (ii) The investigation, characterization, restoration or remediation due to an environmental issue of existing facilities, structures, buildings or real property. 5. "Construction-manager-at-risk" means a project delivery method in which: (a) There is a separate contract for design services and a separate contract for construction services, except that instead of a single contract for construction services, the purchasing agency may elect separate contracts for preconstruction services during the design phase, for construction during the construction phase and for any other construction services. (b) The contract for construction services may be entered into at the same time as the contract for design services or at a later time. (c) Design and construction of the project may be either: (i) Sequential with the entire design complete before construction commences. (ii) Concurrent with the design produced in two or more phases and construction of some phases commencing before the entire design is complete. (d) Finance services, maintenance services, operations services, preconstruction services and other related services may be included. 6. "Construction services" means either of the following for construction-manager-at-risk, design-build and job-order-contracting project delivery methods: (a) Construction, excluding services, through the construction-manager-at-risk or job-order-contracting project delivery methods. (b) A combination of construction and, as elected by the purchasing agency, one or more related services, such as finance services, maintenance services, operations services, design services and preconstruction services, as those services are authorized in the definitions of construction-manager-at-risk, design-build or job-order-contracting in this section. 7. "Contract" means all types of state agreements, regardless of what they may be called, for the procurement of materials, services, construction, construction services or the disposal of materials. 8. "Contract modification" means any written alteration in the terms and conditions of any contract accomplished by mutual action of the parties to the contract. 9. "Contractor" means any person who has a contract with a state governmental unit. 10. "Data" means documented information, regardless of form or characteristic. 11. "Department" means the department of administration. 12. "Design-bid-build" means a project delivery method in which: (a) There is a sequential award of two separate contracts. (b) The first contract is for design services. (c) The second contract is for construction. (d) Design and construction of the project are in sequential phases. (e) Finance services, maintenance services and operations services are not included. 13. "Design-build" means a project delivery method in which: (a) There is a single contract for design services and construction services, except that instead of a single contract for design services and construction services, the purchasing agency may elect separate contracts for preconstruction services and design services during the design phase, for construction and design services during the construction phase and for any other construction services. (b) Design and construction of the project may be either: (i) Sequential with the entire design complete before construction commences. (ii) Concurrent with the design produced in two or more phases and construction of some phases commencing before the entire design is complete. (c) Finance services, maintenance services, operations services, preconstruction services and other related services may be included. 14. "Design professional" means an individual or firm that is registered by the state board of technical registration pursuant to title 32, chapter 1 to practice architecture, engineering, geology, landscape architecture or land surveying or any combination of those professions and any person employed by the registered individual or firm. 15. "Design requirements": (a) Means at a minimum the purchasing agency's written description of the project or service to be procured, including: (i) The required features, functions, characteristics, qualities and properties. (ii) The anticipated schedule, including start, duration and completion. (iii) The estimated budgets applicable to the specific procurement for design and construction and, if applicable, for operation and maintenance. (b) May include: (i) Drawings and other documents illustrating the scale and relationship of the features, functions and characteristics of the project, which shall all be prepared by a design professional who is registered pursuant to section 32-121. (ii) Additional design information or documents that the purchasing agency elects to include. 16. "Design services" means architect services, engineer services or landscape architect services. 17. "Designee" means a duly authorized representative of the director. 18. "Director" means the director of the department of administration. 19. "Employee" means an individual drawing a salary from a state governmental unit, whether elected or not, and any noncompensated individual performing personal services for any state governmental unit. 20. "Engineer services" means those professional engineer services that are within the scope of engineering practice as provided in title 32, chapter 1. 21. "Finance services" means financing for a construction services project. 22. "General services administration contract" means contracts awarded by the United States government general services administration. 23. "Grant" means the furnishing of financial or other assistance, including state funds or federal grant funds, by any state governmental unit to any person for the purpose of supporting or stimulating educational, cultural, social or economic quality of life. 24. "Job-order-contracting" means a project delivery method in which: (a) The contract is a requirements contract for indefinite quantities of construction. (b) The construction to be performed is specified in job orders issued during the contract. (c) Finance services, maintenance services, operations services, preconstruction services, design services and other related services may be included. 25. "Landscape architect services" means those professional landscape architect services that are within the scope of landscape architectural practice as provided in title 32, chapter 1. 26. "Maintenance services" means routine maintenance, repair and replacement of existing facilities, structures, buildings or real property. 27. "Materials": (a) Means all property, including equipment, supplies, printing, insurance and leases of property. (b) Does not include land, a permanent interest in land or real property or leasing space. 28. "Operations services" means routine operation of existing facilities, structures, buildings or real property. 29. "Owner" means a state purchasing agency or state governmental unit. 30. "Person" means any corporation, business, individual, union, committee, club, other organization or group of individuals. 31. "Preconstruction services" means services and other activities during the design phase. 32. "Procurement": (a) Means buying, purchasing, renting, leasing or otherwise acquiring any materials, services, construction or construction services. (b) Includes all functions that pertain to obtaining any materials, services, construction or construction services, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration. 33. "Procurement officer": (a) Means any person duly authorized to enter into and administer contracts and make written determinations with respect to the contracts. (b) Includes an authorized representative acting within the limits of the authorized representative's authority. 34. "Purchasing agency" means any state governmental unit that is authorized by this chapter or rules adopted pursuant to this chapter, or by way of delegation from the director, to enter into contracts. 35. "Services": (a) Means the furnishing of labor, time or effort by a contractor or subcontractor that does not involve the delivery of a specific end product other than required reports and performance. (b) Does not include employment agreements or collective bargaining agreements. 36. "Significant procurement role": (a) Means any role that includes any of the following duties: (i) Participating in the development of a procurement. (ii) Participating in the development of an evaluation tool. (iii) Approving a procurement or an evaluation tool. (iv) Soliciting quotes greater than ten thousand dollars for the provision of materials, services or construction. (v) Serving as a technical advisor or an evaluator who evaluates a procurement. (vi) Recommending or selecting a vendor that will provide materials, services or construction to this state. (vii) Serving as a decision maker or designee on a protest or an appeal by a party regarding an agency procurement selection or decision. (b) Does not include making decisions on developing specifications and the scope of work for a procurement if the decision is based on the application of commonly accepted industry standards or known published standards of the agency as applied to the project, services, goods or materials. 37. "State governmental unit" means any department, commission, council, board, bureau, committee, institution, agency, government corporation or other establishment or official of the executive branch or corporation commission of this state. 38. "Subcontractor" means a person who contracts to perform work or render service to a contractor or to another subcontractor as a part of a contract with a state governmental unit. 39. "Using agency" means any state governmental unit that uses any materials, services or construction procured under this chapter. 41-2504. Supplementary general principles of law applicable Unless displaced by the particular provisions of this chapter, the principles of law and equity, including the uniform commercial code of this state, the common law of contracts as applied in this state and law relative to agency, fraud, misrepresentation, duress, coercion and mistake supplement the provisions of this chapter. 41-2511. Authority of the director A. Except as otherwise provided in this chapter, the director may adopt rules, consistent with this chapter, governing the procurement and management of all materials, services and construction to be procured by this state and the disposal of materials. B. The director shall serve as the central procurement officer of this state. C. Except as otherwise provided in this chapter, the director shall, in accordance with rules adopted under this chapter: 1. Procure or supervise the procurement of all materials, services and construction needed by this state. 2. Establish guidelines for the management of all inventories of materials belonging to this state. 3. Sell, trade or otherwise dispose of surplus materials belonging to this state. 4. Establish and maintain programs for the inspection, testing and acceptance of materials, services and construction. 5. Establish and maintain programs to ensure procurement compliance with this chapter and applicable rules. 6. Establish and maintain a mandatory procurement training and certification program to ensure consistency in procurement practices for those authorized to perform procurement functions under this chapter. 7. Employ staff as necessary to perform the duties prescribed in this chapter. 8. Establish procurement offices as the director determines necessary to maintain an effective and efficient program of procurement administration. 9. Provide consultation to state agency management in all aspects of procurement to increase efficiency and economy in state agencies by improving the methods of procurement with full recognition of the requirements and needs of management. 10. Enter into agreements with any state government unit or political subdivision of this state or agency of a political subdivision of this state to furnish procurement administration services and facilities of the department. Unless monies have been appropriated by the legislature for this purpose, any agreement shall provide for reimbursement to this state of the actual cost of the services and facilities furnished, as determined by the director. 11. Enter into agreements with the attorney general for dedicated legal resources to support any state governmental unit in procurement legal matters, including negotiations, protests and appeals. 41-2512. Delegation of authority or functions by the director The director may delegate authority or specific procurement functions to any state governmental unit. 41-2513. Authority to contract for certain services A. For the purpose of procuring the services of clergy, certified public accountants, legal counsel pursuant to section 41-192, subsection D, physicians or dentists as defined by the laws of this state, any state governmental unit may act as a purchasing agency and contract on its own behalf for such services, subject to this chapter and rules adopted by the director. B. In accordance with section 41-192, subsection D and notwithstanding any contrary statute, no contract for the services of legal counsel may be awarded without the approval of the attorney general. C. The auditor general shall approve state agency contracting for financial and compliance auditing services except if specific statutory authority is otherwise provided. The auditor general shall ensure that such contract audits are conducted in accordance with generally accepted governmental auditing standards. An audit shall not be accepted until it has been approved by the auditor general. D. The department may approve all information technology purchases exceeding twenty-five thousand dollars for a budget unit as defined in section 18-101. Purchases shall not be artificially divided to avoid review. E. Payment for any services, including those services described in subsections A, B and C of this section, procured under this chapter shall not be made unless pursuant to a fully approved written contract. 41-2514. State procurement rules A. The director may adopt and issue rules pursuant to chapter 6 of this title to carry out the purposes of this chapter. B. Except by mutual consent of the parties to the contract, no rule promulgated under this chapter may change any commitment, right or obligation of this state or of a contractor under a contract in existence on the effective date of the rule. 41-2515. Collection of data concerning public procurement All using agencies shall furnish such reports as the director may require concerning usage, needs and stocks on hand, and the director may prescribe forms and procurement systems for use by the using agencies in requisitioning, ordering and reporting of materials, services and construction. 41-2516. Procurement advisory groups or evaluation committees A. The director may appoint advisory groups or evaluation committees to assist with respect to specifications, solicitation evaluations or procurement in specific areas and with respect to any other matters within the authority of the director. B. Members of advisory groups or evaluation committees are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2. 41-2517. Procurement officers and procurement employees; violation; classification; exception A. It is unlawful for a procurement officer or an employee having a significant procurement role to accept any position or have employment discussions with a person or firm lobbying or potentially responding to the solicitation beginning on signature of the first nondisclosure agreement pertaining to a particular solicitation or at the time of request for a sole source procurement or competition impracticable procurement and ending at the time of contract award. It is unlawful for a procurement officer or an employee having a significant procurement role to accept any position or have employment discussions with the successful offeror or offerors and their lobbyists beginning on signature of the first nondisclosure agreement pertaining to a particular solicitation or at the time of request for a sole source procurement or competition impracticable procurement and ending one year after the purchased materials are delivered or the purchase of services or construction begins, if the procurement officer or employee had a significant procurement role in the particular procurement. B. It is unlawful for a procurement officer or an employee having a significant procurement role to solicit an employment opportunity, regardless of who would receive such an opportunity, from any person or firm lobbying or potentially responding to a solicitation for the procurement of materials, services or construction beginning on signature of the first nondisclosure agreement pertaining to a particular solicitation or at the time of request for a sole source procurement or competition impracticable procurement and ending at the time of contract award. It is unlawful for a procurement officer or an employee having a significant procurement role to solicit an employment opportunity, regardless of who would receive such an opportunity, from the successful offeror or offerors and their lobbyists beginning on signature of the first nondisclosure agreement pertaining to a particular solicitation or at the time of request for a sole source procurement or competition impracticable procurement and ending one year after the purchased materials are delivered or the purchase of services or construction begins, if the procurement officer or employee had a significant role in the particular procurement. C. It is unlawful for a person or firm lobbying or potentially responding to a solicitation for the procurement of materials, services or construction to offer employment to a procurement officer, a procurement employee or an employee having a significant procurement role beginning on signature of the first nondisclosure agreement pertaining to a particular solicitation or at the time of request for a sole source procurement or competition impracticable procurement and ending at the time of contract award. It is unlawful for the successful offeror or offerors and their lobbyists to offer employment to a procurement officer, a procurement employee or an employee having a significant procurement role beginning on signature of the first nondisclosure agreement pertaining to a particular solicitation or at the time of request for a sole source procurement or competition impracticable procurement and ending one year after the purchased materials are delivered or the purchase of services or construction begins, if the procurement officer or employee had a significant role in the particular procurement. D. The director of the department of administration may waive any or all of the waiting period required pursuant to subsections A, B and C of this section in excess of twenty-four months for a procurement officer or an employee with a significant procurement role if the period of time that follows the signature of the nondisclosure agreement exceeds twenty-four months. A procurement officer or an employee seeking a waiver shall make a written request to the officer's or employee's state governmental unit director, and the director of the state governmental unit shall forward the request with a written recommendation to the director of the department of administration. The director of the department of administration shall provide a written decision and justification within fifteen business days after the receipt of the complete request. The director of the department of administration may not approve waiver requests for matters still in evaluation or within six months following the contract award. If the requesting party is the director or a deputy director of a state governmental unit, the request for a waiver and all written materials, including a director recommendation, must be forwarded to the governor for a final decision, except that the director may not make any recommendation or determination on the director's own request. E. In response to a written request from an employee seeking clarification on whether the employee has played a significant role in a procurement, the director shall issue a determination in writing within fifteen days after receiving the request. The director may make a determination in writing that this section and section 41-753, subsection D do not apply if a particular solicitation, sole source procurement or competition impracticable procurement has been canceled or is associated with the privatization of existing state services that would result in the elimination of the position in state service of an employee with a significant procurement role. The director may delegate the authority to make determinations pursuant to this subsection to a director of a state agency. An agency director or agency deputy director may request a determination from the office of the governor regarding whether the agency director or agency deputy director played a significant role in a particular procurement for the purposes of the one-year employment restriction, and the office of the governor shall make a determination within thirty days after the receipt of the written request. F. It is unlawful for a procurement officer or an employee who was previously employed by a person or firm responding to a solicitation to serve in a significant procurement role for a period of one year following the person's previous employment. G. Beginning October 1, 2014, if an agency uses a qualified vendor list of persons or entities that are eligible to be selected to design, develop, implement or construct any form of project associated with the list, any procurement officer who was assigned to work evaluating or approving the vendor list or any employee having a significant procurement role in developing the vendor list shall not accept an offer of employment from or have employment discussions with a vendor on the list within one year after the initial publication of the list or accept an offer of employment from or have employment discussions with a newly added vendor within one year after the vendor is added to the original list. If a vendor from an approved list of qualified vendors is awarded a contract that is associated with the list, a procurement officer involved in selecting the vendor or an employee having a significant procurement role in selecting the vendor shall not accept an offer of employment from or have employment discussions with that vendor within one year after that vendor is awarded the contract. H. On signature of a nondisclosure agreement pertaining to a particular solicitation, or at the time of a request for a sole source or competition impracticable procurement, a procurement officer or an employee having a significant role in the procurement shall provide written disclosure of any financial interest the officer or employee, or the spouse of the officer or employee, may hold. I. A person who knowingly violates this section is guilty of a class 2 misdemeanor. On conviction the person is ineligible for appointment to or employment in a position in the state personnel system for a period of five years and, if the person is an employee of this state at the time of conviction, is subject to suspension for not less than ninety days or dismissal. J. This section does not apply to a procurement officer or employee who in good faith relies on a determination issued by the director pursuant to subsection D of this section that the procurement officer or employee has not had a significant procurement role. 41-2531. Definitions In this article, unless the context otherwise requires: 1. "Bidder prequalification" means determining in accordance with rules adopted pursuant to this chapter that a prospective bidder or offeror satisfies the criteria for being included on the bidder's list. 2. "Cost-reimbursement contract" means a contract under which a contractor is reimbursed for costs which are reasonable, allowable and allocable in accordance with the contract terms and the provisions of this chapter, and paid a fee, if provided for in the contract. 3. "Demonstration project" means a project in which a vendor supplies a service or material to this state for which the state does not pay but for which this state may be obligated to provide routine support such as utility cost and operating personnel. 4. "Established catalogue price" means the price included in a catalogue, price list, schedule or other form that: (a) Is regularly maintained by a manufacturer, distributor or contractor. (b) Is either published or otherwise available for inspection by customers. (c) States prices at which sales are currently or were last made to a significant number of any category of buyers or buyers constituting the general buying public for the materials or services involved. 5. "Invitation for bids" means all documents, whether attached or incorporated by reference, which are used for soliciting bids in accordance with the procedures prescribed in section 41-2533. 6. "Multistep sealed bidding" means a two phase process consisting of a technical first phase composed of one or more steps in which bidders submit unpriced technical offers to be evaluated by this state and a second phase in which those bidders whose technical offers are determined to be acceptable during the first phase have their price bids considered. 7. "Paper" means newspaper, high grade office paper, fine paper, bond paper, offset paper, xerographic paper, duplicator paper and related types of cellulosic material containing not more than ten per cent by weight or volume of noncellulosic material such as laminates, binders, coatings or saturants. 8. "Paper product" means paper items or commodities, including paper napkins, towels, corrugated paper and related types of cellulosic products containing not more than ten per cent by weight or volume of noncellulosic material such as laminates, binders, coatings or saturates. 9. "Post-consumer material" means a discard generated by a business or residence that has fulfilled its useful life. Post-consumer material does not include discards from industrial or manufacturing processes. 10. "Purchase description" means the words used in a solicitation to describe the materials, services or construction for purchase and includes specifications attached to, or made a part of, the solicitation. 11. "Recycled paper" means paper products which have been manufactured from materials otherwise destined for the waste stream and which contain at least forty per cent recovered wastepaper with ten per cent of that being post-consumer material. 12. "Request for information" means all documents issued to vendors for the sole purpose of seeking information about the availability in the commercial marketplace of materials or services. 13. "Request for proposals" means all documents, whether attached or incorporated by reference, which are used for soliciting proposals in accordance with procedures prescribed in section 41-2534. 14. "Responsible bidder or offeror" means a person who has the capability to perform the contract requirements and the integrity and reliability which will assure good faith performance. 15. "Responsive bidder" means a person who submits a bid which conforms in all material respects to the invitation for bids. 16. "Unsolicited proposal" means a written proposal that is submitted on the initiative of the offeror for the purposes of obtaining a contract with this state and that is not in response to a formal or informal request from this state. 17. "Wastepaper" means recyclable paper and paperboard, including high grade office paper, computer paper, fine paper, bond paper, offset paper, xerographic paper, duplicator paper and corrugated paper. 41-2532. Methods of source selection Unless otherwise authorized by law, all state contracts shall be awarded by competitive sealed bidding as provided in section 41-2533 or as provided in sections 41-2534 through 41-2538 and sections 41-2554, 41-2558, 41-2559, 41-2572, 41-2578, 41-2579, 41-2581 and 41-2636. 41-2533. Competitive sealed bidding A. Contracts shall be awarded by competitive sealed bidding except as otherwise provided in section 41-2532. B. An invitation for bids shall be issued and shall include a purchase description and all contractual terms and conditions applicable to the procurement. C. Adequate public notice of the invitation for bids shall be given a reasonable time before the date set forth in the invitation for the opening of bids, in accordance with rules adopted by the director. The notice may include publication one or more times in a newspaper of general circulation a reasonable time before bid opening. If the invitation for bids is for the procurement of services other than those described in sections 41-2513, 41-2578, 41-2579 and 41-2581, the notice shall include publication in a single newspaper or in multiple newspapers within this state. The publication shall be not less than two weeks before bid opening and shall be circulated within the affected governmental jurisdiction. The notice may also be posted at a designated site on a worldwide public network of interconnected computers. D. Bids shall be opened publicly at the time and place designated in the invitation for bids. The amount of each bid, and such other relevant information as may be specified by rule, together with the name of each bidder shall be recorded. This record shall be open to public inspection at the bid opening in a manner prescribed by rule. The bids shall not be open for public inspection until after a contract is awarded. To the extent the bidder designates and the state concurs, trade secrets or other proprietary data contained in the bid documents shall remain confidential in accordance with rules adopted by the director. E. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this chapter. Bids shall be evaluated based on the requirements set forth in the invitation for bids, including criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery and suitability for a particular purpose, as prescribed in rules adopted by the director. Evaluation criteria shall not be used for construction and no criteria may be used in bid evaluation that are not set forth in the invitation for bids. F. The correction or withdrawal of erroneous bids before or after bid opening, based on bid mistakes, may be permitted in accordance with rules adopted by the director. After bid opening, no corrections in bid prices or other provisions of bids prejudicial to the interest of this state or fair competition shall be permitted. Except as otherwise provided by rule, all decisions to permit the correction or withdrawal of bids, or to cancel awards or contracts based on bid mistakes, shall be supported by a written determination made by the director. G. The contract shall be awarded to the lowest responsible and responsive bidder whose bid conforms in all material respects to the requirements and criteria set forth in the invitation for bids. The amount of any applicable transaction privilege or use tax of a political subdivision of this state is not a factor in determining the lowest bidder. If all bids for a construction project exceed available monies as certified by the appropriate fiscal officer, and the low responsive and responsible bid does not exceed such monies by more than five per cent, the director may in situations in which time or economic considerations preclude resolicitation of work of a reduced scope negotiate an adjustment of the bid price, including changes in the bid requirements, with the low responsive and responsible bidder, to bring the bid within the amount of available monies. H. The multistep sealed bidding method may be used if it is not practicable to initially prepare a definitive purchase description that is suitable to permit an award based on competitive sealed bidding. An invitation for bids may be issued requesting the submission of technical offers to be followed by an invitation for bids limited to those bidders whose offers are determined to be technically acceptable under the criteria set forth in the first solicitation, except that the multistep sealed bidding method may not be used for construction contracts. I. If the price of a recycled paper product that conforms to specifications is within five per cent of a low bid product that is not recycled and the recycled product bidder is otherwise the lowest responsible and responsive bidder, the award shall be made to the bidder offering the recycled product. The director may adopt rules requiring a five per cent preference for other products made from recycled materials. 41-2534. Competitive sealed proposals A. A contract for materials or services may be entered into by competitive sealed proposals. This section does not apply to procurement of construction, construction services or specified professional services pursuant to section 41-2537, 41-2578, 41-2579 or 41-2581. Construction services shall be procured pursuant to section 41-2537, 41-2578 or 41-2579. B. Proposals shall be solicited through a request for proposals. C. Adequate public notice of the request for proposals shall be given in the same manner as provided in section 41-2533. D. Proposals shall be opened publicly at the time and place designated in the request for proposals. The name of each offeror shall be recorded in accordance with rules adopted by the director. All other information contained in the proposals shall be confidential so as to avoid disclosure of contents prejudicial to competing offerors during the process of negotiation. The proposals shall be open for public inspection after contract award. To the extent the offeror designates and the state concurs, trade secrets or other proprietary data contained in the offer documents shall remain confidential in accordance with rules adopted by the director. E. The request for proposals shall state the relative importance of price and other evaluation factors. Specific numerical weighting is not required. F. As provided in the request for proposals, and under rules adopted by the director, discussions may be conducted with responsible offerors who submit proposals determined to be reasonably susceptible to being selected for award for the purpose of clarification to ensure full understanding of the solicitation requirements and to permit revision of offers. Offerors shall be accorded fair treatment with respect to any opportunity for discussion. Revisions may be permitted after submission and before award. If discussions are conducted, all offerors who have submitted proposals that are determined by the procurement officer to be reasonably susceptible to being selected for award shall be invited to submit a best and final offer. In conducting discussions, there shall be no disclosure of any information derived from proposals submitted by competing offerors. G. The award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to this state taking into consideration the evaluation factors set forth in the request for proposals. No other factors or criteria may be used in the evaluation. The amount of any applicable transaction privilege or use tax of a political subdivision of this state is not a factor in determining the most advantageous proposal. The contract file shall contain the basis on which the award is made. 41-2535. Procurements not exceeding a prescribed amount; small businesses; simplified construction procurement program A. Any procurement that does not exceed the aggregate dollar amount of one hundred thousand dollars may be made in accordance with rules adopted by the director, except that the procurements shall be made with such competition as is practicable under the circumstances. B. Any procurement that does not exceed the aggregate dollar amount of less than one hundred thousand dollars shall be restricted, if practicable, to small businesses as defined in rules adopted by the director. The procurement officer shall rotate the small business solicited to compete for any procurement of less than one hundred thousand dollars. If it is impracticable to restrict a particular procurement to small businesses, the procurement officer shall make a determination setting forth the reasons and place it in the contract file. C. Procurement requirements shall not be artificially divided or fragmented so as to constitute a purchase under this section and to circumvent the source selection procedures required by section 41-2533 or 41-2534 or be artificially combined to circumvent this section. D. A procurement involving construction not exceeding one hundred thousand dollars may be made pursuant to rules adopted by the director in accordance with this section that shall be known as the simplified construction procurement program. At a minimum the rules shall require that: 1. A list be maintained of persons who desire to receive solicitations to bid on construction projects to which additions shall be permitted throughout the year. 2. The list of persons be available for public inspection. 3. Agreements for construction be on forms approved by the director. 4. All information submitted by bidders pursuant to this section be confidential according to section 41-2533, subsection D. 5. All bids for construction be opened at a public opening. 6. All persons desiring to submit bids be treated equitably and the information related to each project be available to all eligible persons. 7. Competition for construction projects under the simplified construction procurement program be encouraged to the maximum extent possible. 41-2536. Sole source procurement A contract may be awarded for a material, service or construction item without competition if the director determines in writing that there is only one source for the required material, service or construction item. The director may require the submission of cost or pricing data in connection with an award under this section. Sole source procurement shall be avoided, except when no reasonable alternative sources exist. A written determination of the basis for the sole source procurement shall be included in the contract file. 41-2537. Emergency procurements Notwithstanding any other provision of this chapter, the director may make or authorize others to make emergency procurements if there exists a threat to public health, welfare or safety or if a situation exists which makes compliance with section 41-2533, 41-2534, 41-2578, 41-2579 or 41-2581 impracticable, unnecessary or contrary to the public interest as defined in rules adopted by the director, except that such emergency procurements shall be made with such competition as is practicable under the circumstances. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file. 41-2538. Competitive selection procedures for certain professional services A. The services specified in section 41-2513 shall be procured in accordance with this section, except as authorized under section 41-2535, 41-2536 or 41-2537. B. Persons engaged in providing the types of services specified in section 41-2513 may submit statements of qualifications and expressions of interest in providing such types of services. The director may specify a uniform format for statements of qualifications. Persons may amend these statements at any time by filing a new statement. C. Adequate notice of the need for such services shall be given by the purchasing agency through a request for proposals. The request for proposals shall describe the services required and list the type of information and data required of each offeror. D. The head of the purchasing agency or a designee of such officer may conduct discussions with any offerors who submit a proposal to determine the offeror's qualifications for further consideration. Discussions shall not disclose any information derived from proposals submitted by other offerors. E. The award shall be made to the offeror determined in writing by the head of the purchasing agency or a designee of such officer to be best qualified based on the evaluation factors set forth in the request for proposals and after a written determination that the compensation is fair and reasonable. Selection may be made pursuant to the provisions of this section without requiring priced proposals, but if price is included in proposals submitted, no contract may be awarded solely on the basis of price. 41-2539. Cancellation of invitation for bids or requests for proposals An invitation for bids, a request for proposals or other solicitation may be cancelled or any or all bids or proposals may be rejected in whole or in part as may be specified in the solicitation if it is in the best interests of this state. The reasons for the cancellation or rejection shall be made part of the contract file. 41-2540. Responsibility of bidders and offerors A. A written determination of nonresponsibility of a bidder or offeror shall be made in accordance with rules adopted by the director. The unreasonable failure of a bidder or offeror to promptly supply information in connection with an inquiry with respect to responsibility shall be grounds for a determination of nonresponsibility with respect to the bidder or offeror. A finding of nonresponsibility shall not be construed as a violation of the rights of any person. B. Information furnished by a bidder or offeror pursuant to this section shall not be disclosed outside of the office of the director or the purchasing agency without prior written consent by the bidder or offeror except to law enforcement agencies. 41-2541. Prequalification of contractors Prospective contractors may be prequalified for particular types of materials, services and construction. Prospective contractors have a continuing duty to provide the director with information on any material change affecting the basis of prequalification. Solicitation mailing lists of potential contractors shall include the prequalified contractors. 41-2542. Bid and contract security The director may require, in accordance with rules adopted by the director, the submission of security to guarantee faithful bid and contract performance. In determining the amount and type of security required for each contract, the director shall consider the nature of the performance and the need for future protection to this state. The requirement for security must be included in the invitation for bids or request for proposals. 41-2543. Cost or pricing data A. The submission of current cost or pricing data may be required in connection with an award in situations in which analysis of the proposed price is essential to determine that the price is reasonable and fair. A contractor shall, except as provided in subsection C, submit current cost or pricing data and shall certify that, to the best of the contractor's knowledge and belief, the cost or pricing data submitted was accurate, complete and current as of a mutually determined specified date before the date of either: 1. The pricing of any contract awarded by competitive sealed proposals or pursuant to the sole source procurement authority, if the total contract price is expected to exceed an amount established by department rules. 2. The pricing of any change order or contract modification which is expected to exceed an amount established by department rules. B. Any contract, change order or contract modification under which a certificate is required shall contain a provision that the price to this state shall be adjusted to exclude any significant amounts by which this state finds that the price was increased because the contractor-furnished cost or pricing data was inaccurate, incomplete or not current as of the date agreed on between the parties. Such adjustment by this state may include profit or fee. C. The requirements of this section need not be applied to contracts if any of the following applies: 1. The contract price is based on adequate price competition. 2. The contract price is based on established catalogue prices or market prices. 3. Contract prices are set by law or rule. 4. It is determined in writing in accordance with rules adopted by the director that the requirements of this section may be waived, and the reasons for the waiver are stated in writing. 41-2544. Types of contracts Subject to the limitations of this section, any type of contract that will promote the best interests of this state may be used, except that the use of a cost-plus-a-percentage-of-cost contract is prohibited. 41-2546. Multiterm contracts A. Unless otherwise provided by law, a contract for materials or services may be entered into for a period of time up to five years and a contract for job-order-contracting construction services may also be entered into for a period of time up to five years, as deemed to be in the best interest of this state, if the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and monies are available for the first fiscal period at the time of contracting. N