Current through Register Vol. 48, No. 9, September 27, 2024
A. General.
(1) "Organizational conflict of interest"
occurs when, because of other activities or relationships with the State or
with other businesses:
(a) a business is
unable or potentially unable to render impartial assistance or advice to the
State, or
(b) the business'
objectivity in performing the contract work is or might be otherwise impaired,
or
(c) a business has an unfair
competitive advantage.
(2) This regulation applies to acquisitions
of supplies, services and information technology, except for acquisitions made
pursuant to Section
11-35-1550.
Unless the procurement uses a project delivery method identified in Section
11-35-3005(1)(e),
1(f), or (2)(a), this regulation does not apply to acquisitions under Article 9
(Construction, Architect-Engineer, Construction Management, and Land Surveying
Services).
(3) The general rules in
sections B (Providing systems engineering and technical direction), C
(Preparing specifications or work statements), and D (Providing evaluation of
offers) below prescribe limitations on contracting as the means of avoiding
organizational conflicts of interest that might otherwise exist in the stated
situations. Conflicts may arise in situations not expressly covered in sections
B, C, and D. Each individual contracting situation should be examined on the
basis of its particular facts and the nature of the proposed contract. The
exercise of common sense, good judgment, and sound discretion is required in
both the decision on whether a significant potential conflict exists and, if it
does, the development of an appropriate means for resolving it. The two
underlying principles are
(a) Preventing the
existence of conflicting roles that might bias a contractor's judgment;
and
(b) Preventing unfair
competitive advantage. Without limitation, an unfair competitive advantage
exists where a business competing for award of a State contract possesses (i)
proprietary information that was obtained from the State without authorization;
or (ii) source selection information (R.19-445.2010C)
that is relevant to the contract but is not available to all competitors, and
such information would assist that business in obtaining the
contract.
(4) The terms
"contractor" and "subcontractor" are defined by Section
11-35-310.
B. Providing systems engineering
and technical direction.
(1) A business shall
not be awarded a contract to supply a system or any of its major components, or
be a subcontractor or consultant, if that business, as a contractor, provided
or provides a combination of substantially all of the following activities:
(a) determining specifications or developing
work statements,
(b) determining
parameters,
(c) identifying and
resolving interface problems,
(d)
developing test requirements,
(e)
evaluating test data,
(f)
supervising design,
(g) directing
other contractors' operations, and
(h) resolving technical controversies.
(2) This section B does not
prohibit a contractor providing systems engineering and technical direction,
from developing or producing a system if the entire effort is conducted under a
single contract.
C.
Preparing specifications or work statements.
(1) If a contractor prepares and furnishes
specifications for a specific acquisition of tangible supplies or information
resources, or their components, that contractor shall not be allowed to furnish
these items, either as a contractor or as a subcontractor at any tier, for a
reasonable period of time including, at least, the duration of the initial
contract for purchase of the items.
(2) If a contractor prepares, or assists in
preparing, a work statement to be used in a specific acquisition of a system or
services-or provides material leading directly, predictably, and without delay
to such a work statement-that contractor may not supply the system, major
components of the system, or the services, either as a contractor or as a
subcontractor at any tier, unless (a) the acquisition is a sole source under
R.19-445.2105;
(b) it has participated in the development and design work; or (c) more than
one contractor has been involved in preparing the work statement.
D. Providing evaluation of offers.
If a contractor evaluates or supports the evaluation of a bid or proposal for a
contract with a governmental body, that contractor and its affiliates are
barred from performing under that contract as either a contractor or as a
subcontractor at any tier.
E.
Procurement Officer Responsibilities.
(1) The
responsible procurement officer shall (a) analyze planned acquisitions in order
to identify and evaluate potential organizational conflicts of interest as
early in the acquisition process as possible; and (b) review plans to avoid,
neutralize, or mitigate significant potential conflicts before contract
award.
(2) The responsible
procurement officer shall determine whether the apparent successful offeror has
an organizational conflict of interest. The responsible procurement officer
shall award the contract to the apparent successful offeror unless (i) a
conflict of interest is determined to exist that cannot be avoided or
mitigated, or (ii) the conflict is not waived as provided in section F. Before
determining to withhold award based on conflict of interest considerations, the
procurement officer shall notify the contractor, provide the reasons therefor,
and allow the contractor a reasonable opportunity to respond.
F. Waiver. With respect to the
award of an individual contract, the using agency may waive an organizational
conflict of interest by determining that the application of these rules in a
particular situation would not be in the State's interest. A determination to
waive a conflict of interest must be in writing, shall set forth the extent of
the conflict, and requires approval by the agency head or her designee above
the level of the agency's senior procurement official. If a waiver involves an
acquisition with a value that exceeds either the limits of the governmental
body's authority under Section
11-35-1210(1)
or one million dollars, the appropriate Chief Procurement Officer must concur
in the waiver and the written determination must be published with the notice
of intent to award. Any report required by R.19-445.2020A(2)
must include every waiver addressing a procurement during the audit
period.
G. The appropriate Chief
Procurement Officer may develop and issue procedures which shall be followed by
all agencies to identify organizational conflicts of interest and techniques to
avoid or mitigate them.
