Current through Register Vol. 50, No. 9, March 1, 2024
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
45A.035 authorizes the secretary of the
Finance and Administration Cabinet to promulgate administrative regulations for
the implementation of the Kentucky Model Procurement Code (KRS Chapter 45A).
This administrative regulation implements a multistep bidding process under the
provisions of
KRS
45A.080.
Section
1. Definitions.
(1) "Acceptable"
means the unpriced technical offer is compliant with technical specifications
described in the solicitation.
(2)
"Multistep sealed bidding" means a two (2) phase process consisting of a
technical first phase composed of one (1) or more steps in which bidders may
submit unpriced technical offers to be evaluated by the purchasing agency, 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.
(3) "Potentially
acceptable" means the unpriced technical offer.
(4) "Prebid conference" means a meeting or
discussion with the purchasing officer and interested bidders.
(5) "Reverse auction" means a real-time,
structured bidding process, usually lasting less than one (1) hour and taking
place during a previously scheduled time and Internet location, during which
multiple suppliers, anonymous to each other, submit revised, lower bids to
provide the solicited good or service.
(6) "Unacceptable" means the unpriced
technical offer is not materially compliant with the technical specifications
described in the solicitation to such an extent that there is no reasonable
assurance that, by amendment, the offer will meet or exceed the specifications
and other requirements.
Section
2. General Terms.
(1) Except for
the variations described in this administrative regulation, the provisions of
200 KAR
5:306 shall apply to multistep bidding.
(2) Reverse auction may be used as a form of
competitive bidding in a multistep bidding process, and as an alternative to
sealed bidding if it is determined by the purchasing officer that it is in the
best interest of the commonwealth.
(3) A contract resulting from multistep
bidding shall not be awarded for an amount greater than the published price in
an existing fixed-price contract with the commonwealth for a substantially
similar good or service that was solicited through competitive sealed
bids.
Section 3.
Multistep Sealed Bidding.
(1) The multistep
sealed bidding method may be used if the procurement officer determines in
writing that:
(a) Definite criteria exist for
evaluation of technical proposals and more than one (1) technically qualified
source is expected to be available; or
(b) A reverse auction is in the best interest
of the commonwealth; and
(c) It
will be advantageous to the purchasing agency to:
1. Invite and evaluate technical offers to
determine their acceptability to fulfill the purchase description
requirements;
2. Conduct
discussions for the purposes of facilitating understanding of the technical
offer and, if appropriate, obtaining supplemental information, permitting
amendments of technical offers, or amending the purchase description;
3. Accomplish paragraphs (a) and (b) of this
section prior to soliciting priced bids; and
4. Award the contract to the responsive and
responsible bidder providing the best value to the commonwealth.
(2) Prebid conferences
in multistep sealed bidding. Prior to the submission of unpriced technical
offers, the procurement officer may conduct a prebid conference. If a reverse
auction shall be part of Phase Two, the process shall be explained during the
prebid conference. The issuing agency may respond to questions and concerns
during the conference, but the official response from the issuing agency shall
be in writing and shall be provided to all potential bidders who attended the
prebid conference.
Section
4. Procedure for of Multistep Sealed Bidding.
(1) Multistep sealed bidding shall be
initiated by the issuance of a solicitation as required by
KRS
45A.080 and FAP 111-35-00, incorporated by
reference in
200 KAR
5:021. The multistep solicitation shall state:
(a) That unpriced technical offers are
requested;
(b) Whether price bids
are to be submitted at the same time as unpriced technical offers or if a
reverse auction shall be conducted. If a price bid is required with the
unpriced technical offer, the price bids shall be submitted in a separate
sealed envelope;
(c) That it is a
multistep sealed bid procurement, and priced bids shall be considered only in
the second phase and only from those bidders whose unpriced technical offers
are found acceptable in the first phase;
(d) The criteria to be used in the evaluation
of the unpriced technical offers;
(e) That the purchasing agency, to the extent
the procurement officer finds necessary, may conduct oral or written
discussions of the unpriced technical offers in accordance with subsection (5)
of this section;
(f) That bidders
may designate those portions of the unpriced technical offers which contain
trade secrets or other proprietary data that are to remain
confidential;
(g) That the good or
service being procured shall be furnished generally in accordance with the
bidder's technical offer as found to be finally acceptable; and
(h) The manner in which the second phase
reverse auction shall be conducted, if applicable.
(2) Amendments to the solicitation. After
receipt of unpriced technical offers, amendments to the solicitation shall be
distributed only to bidders who submitted unpriced technical offers, and those
bidders shall be allowed to submit new unpriced technical offers or to amend
those submitted. If, in the opinion of the procurement officer, a contemplated
amendment will significantly change the nature of the procurement, the
solicitation shall be canceled in accordance with
KRS
45A.105, and a new solicitation
issued.
(3) Receipt and handling of
unpriced technical offers. Unpriced technical offers shall be opened publicly,
identifying only the names of the bidders. Technical offers and modifications
shall be time stamped upon receipt and held in a secure place until the
specified date and time. After the date established for receipt of bids, a
register of bids shall be open to public inspection and shall include the name
of each bidder. Prior to the completion of phase two of the multi-step bidding
process, documents related to the bid evaluation process shall be considered
preliminary and may only be disclosed to authorized state personnel and those
involved in the evaluation process who have a legitimate interest in a
particular matter.
(4) Evaluation
of unpriced technical offers. The unpriced technical offers submitted by
bidders shall be evaluated solely in accordance with the criteria set forth in
the solicitation. A bidder shall submit a technical offer in sufficient detail
so as to substantially comply with the technical specifications of the
solicitation. The unpriced technical offers shall be categorized as:
(a) Acceptable;
(b) Potentially acceptable; or
(c) Unacceptable.
(5) If the unpriced technical offer is
categorized as "potentially acceptable," the bidder shall amend the offer by
the specified date. If the offer is not amended by the specified date, the
offer shall be classified as unacceptable.
(6) Discussion of unpriced technical offers.
(a) The procurement officer may hold a
conference with all bidders at any time during the evaluation of the unpriced
technical offers. The purchasing officer may discuss with bidders, including
any subcontractor or supplier of goods or services, acceptable and potentially
acceptable bids. Discussions may be conducted for the purposes of facilitating
understanding of technical offers and specifications and may include:
1. Obtaining supplemental
information;
2. Amendments to the
technical offer;
3. Amendments to
the solicitation; or
4. A
potentially-acceptable offer being amended to become an acceptable
offer.
(b) During the
course of these discussions the procurement officer shall not disclose any
information derived from one (1) unpriced technical offer to any other bidder.
Once discussions have begun, any bidder who has submitted an offer found
acceptable or potentially acceptable may submit supplemental information
modifying or otherwise amending its technical offer at any time until the
closing date established by the procurement officer. The procurement officer
shall notify all acceptable or potentially acceptable bidders in writing when
no additional supplemental information may be submitted.
(7) Technical evaluation. The evaluation of
technical offers shall be in writing. If the solicitation is for computer
hardware, software and related services, the purchasing agency shall comply
with FAP 111-15-00(2), incorporated by reference in
200 KAR
5:021. A written record shall be maintained and become
a part of the bid file.
(8)
Unacceptable unpriced technical offer. The procurement officer shall record in
writing the basis for finding an offer unacceptable and make it part of the
procurement file. A bidder whose technical offer is determined to be
unacceptable shall not be allowed to amend or supplement the technical
offer.
(9) The procurement officer
may initiate Phase Two of the multistep bidding if, in the procurement
officer's opinion, there are sufficient acceptable unpriced technical offers to
assure effective price competition in the second phase without modification or
alteration of the offers. If the procurement officer finds that there are not
sufficient acceptable unpriced technical offers to assure effective price
competition in the second phase without modification or alteration of the
offers, the procurement officer shall issue an amendment to the solicitation or
engage in technical discussions as set forth in subsection (5) of this
section.
(10) Mistakes during
multistep sealed bidding. Mistakes may be corrected or bids may be withdrawn
during:
(a) Before unpriced technical offers
are evaluated;
(b) After any
discussions have commenced under subsection (5) of this section;
(c) If responding to any amendment of the
solicitation; or
(d) In accordance
with
200 KAR
5:306 and FAP 111-35-00, incorporated by reference in
200 KAR
5:021.
Section 5. Procedure for Phase Two of
Multistep Sealed Bidding.
(1) Upon the
completion of the multistep bidding process, public notice shall not be
required for Phase Two. The procurement officer shall either:
(a) Open price bids submitted in from bidders
whose unpriced technical offers were found to be acceptable; if the offers have
remained unchanged and the solicitation has not been amended;
(b) Invite each bidder whose technical offer
was determined to be acceptable to submit a price bid; or
(c) Conduct a reverse auction.
(2) If in the best interest of the
commonwealth, the reverse auction shall be an open and interactive process
where pricing is submitted, made public immediately, and bidders are given
opportunity to submit revised, lower bids, until the bidding process is
closed.
(3) The solicitation of
price bids for a reverse auction shall establish a date and time for the
beginning and close of the reverse auction. The closing date and time may be a
fixed point in time or may remain dependent on a variable specified in the
solicitation.
(4)
(a) Following receipt of the first bid after
the beginning of the reverse auction, the lowest bid price shall be posted
electronically, and updated as other bidders submit bids.
(b) At any time before the closing date and
time, a bidder may submit a lower bid.
(5) Mistakes during reverse auctions.
(a) Withdrawal. If a mistake in a bid is
attributable to an error in judgment, the bid may not be withdrawn. If a
mistake in a bid is inadvertent, withdrawal or correction may be permitted to
the extent it is not contrary to the interest of the purchasing agency or the
fair treatment of other bidders. If a bid is withdrawn, a later bid submitted
by the same bidder may not be for a higher price. If the lowest responsive bid
is withdrawn due to an inadvertent mistake after the closing date and time, the
procurement officer shall determine in writing whether to:
1. Award the contract to the next lowest
responsive vendor;
2. Cancel the
solicitation; or
3. Reopen Phase
Two bidding to all bidders whose technical offers were determined acceptable
during.
(b) If Phase Two
bidding is reopened, the procurement office shall notify all other bidders
whose technical offers were determined acceptable during of the new date and
time for the beginning and close of Phase Two bidding.
(c) Confirmation of bid. If it appears from a
review of the bid that a mistake has been made, the bidder shall be requested
to confirm the bid. Situations in which confirmation shall be requested include
obvious, apparent errors on the face of the bid or a bid unreasonably lower
than the other bids submitted. If the bidder alleges mistake, the bid may be
corrected or withdrawn if the conditions set forth in subsection (5)(a) of this
section are met.