12-4-109 - Contracts for state services. - Tennessee Statutes

12-4-109. Contracts for state services.

(a)  (1)  (A)  All personal services, professional services, and consultant services purchased by the agencies and departments of the executive branch of state government must be procured in the manner prescribed by regulations promulgated by the commissioner of finance and administration in consultation with the commissioners of human resources and general services and with the approval of the attorney general and reporter and the comptroller of the treasury. Such regulations shall require:

                (i)  To the greatest practicable extent, evaluation and consideration of proposers' qualifications and cost in the awarding of the contracts;

                (ii)  That major categories to be considered in the evaluation of the proposals together with the relative weight of each category shall be included in the final solicitation document; the categories shall include, whenever practicable, qualifications, experience, technical approach, and cost. The evaluation instrument in the solicitation document shall include the breakdown of any points that may be assigned within each major category; any evaluation instructions that may be developed by the procuring agency or department shall also be included in the evaluation instrument. Nothing in this subdivision (a)(1)(A)(ii), however, shall be construed to require the procuring agency or department to develop evaluation instructions or point breakdowns within major categories. Such evaluation instrument shall be included in the final solicitation document or as an addendum to the final solicitation document;

                (iii)  That proposers be given a reasonable time to consider evaluation factors set forth in the solicitation document before submitting proposals;

                (iv)  That no cost proposals may be opened until the evaluation of the non-cost sections of the proposal has been completed, unless the commissioner of finance and administration, the commissioner of the procuring agency, if applicable, and the comptroller of the treasury approve in writing that, due to the nature of the procurement, the cost proposals in the particular procurement can be opened prior to the evaluation of the non-cost sections; this exception shall be made a part of the solicitation document; and

                (v)  That procedures be implemented for the review, approval, and use of any formulas, models, or criteria that may be included in the solicitation document for the purposes of evaluating cost proposals.

          (B)  Submission of a proposal shall not create rights, interests, or claims of entitlement in any proposer, including the best evaluated proposer.

          (C)  Whenever the head of the affected department or agency proposes to reject all proposals for a certain purchase, such action shall be taken only for the following reasons:

                (i)  Unreasonably high prices or failure of all proposals to meet technical specifications;

                (ii)  Error in the request for proposals;

                (iii)  Cessation of need;

                (iv)  Unavailability of funds; or

                (v)  A determination by the affected department or agency that proceeding with the procurement would be detrimental to the best interests of the state, the reason for which must be documented and approved by the commissioner of finance and administration and filed with the comptroller of the treasury.

          (D)  The commissioner of finance and administration is authorized to purchase for any department or agency of the executive branch of state government in the open market, personal services, professional services or consultant services for immediate delivery to meet emergencies arising from unforeseen cause, including, but not limited to, delays by contractors, delays related to protests and acts of God. The authority to so purchase may be delegated by the commissioner of finance and administration to any department or agency of the executive branch of state government; provided, that a report on the circumstances of any such emergency and the activities of such department or agency thereunder shall be transmitted in writing as soon as possible by such department or agency to the commissioner of finance and administration, which report shall set forth the prices at which such services were purchased and the total amount of the purchase thereof. All emergency purchases shall, if practicable under the circumstances, be made on the basis of a competitive process. All emergency purchases shall be made by a contract document in accordance with personal service, professional service and consultant service contracts regulations.

          (E)  (i)  Any actual proposer who claims to be aggrieved in connection with a specific solicitation process authorized under this section may protest to the head of the affected department or agency. The protest shall be submitted in writing within seven (7) days after such claimant knows or should have known of the facts giving rise to the protest. Any issues raised by the protesting party after the seven-day period shall not be considered as part of the protest.

                (ii)  Signature on Protest Constitutes Certificate.  The signature of an attorney or protesting party on a request for consideration, protest, motion, or other document constitutes a certificate by the signer that the signer has read such document, that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass, limit competition, or to cause unnecessary delay or needless increase in the cost of the procurement or of the litigation. If a request for consideration, protest, pleading, motion, or other document is signed in violation of this subdivision (a)(1)(E)(ii) before or after appeal to the review committee, the review committee, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties, including the affected state department or agency, the amount of the reasonable expenses incurred because of the filing of the protest, a petition for a stay of award, pleading, motion, or other paper, including reasonable attorneys' fees.

                (iii)  Neither a protest nor a stay of award shall proceed under this section unless the protesting party posts a protest bond. The protesting party shall post, with the head of the affected department or agency, at the time of filing a notice of protest, a bond payable to the state in the amount of five percent (5%) of the lowest cost proposal evaluated. Such protest bond shall be in form and substance acceptable to the state and shall be immediately payable to the state conditioned upon a decision by the review committee that:

                     (a)  A request for consideration, protest, pleading, motion, or other document is signed, before or after appeal to the review committee, in violation of subdivision (a)(1)(E)(ii);

                     (b)  The protest has been brought or pursued in bad faith; or

                     (c)  The protest does not state on its face a valid basis for protest.

                (iv)  The state shall hold such protest bond for at least eleven (11) calendar days after the date of the final determination by the head of the affected department or agency. If the protesting party appeals the determination in accordance with subdivision (a)(1)(E)(vii), the head of the affected department or agency shall hold such protest bond until instructed by the review committee to either keep the bond or return it to the protesting party.

                (v)  At the time of filing notice of a protest of a procurement in which the lowest evaluated cost proposal is less than one million dollars ($1,000,000), a minority or small business protesting party may submit a written petition for exemption from the protest bond requirement of subdivision (a)(1)(E)(iii). Such a petition must include clear evidence of minority or small business status. On the day of receipt, the petition shall be given to the commissioner of finance and administration or the commissioner's designee. The commissioner or the commissioner's designee has five (5) business days in which to make a determination. If an exemption from the protest bond requirement is granted, the protest shall proceed as though the bond were posted. Should the commissioner deny an exemption from the requirement, the protesting party shall post the protest bond with the head of the procuring state agency as required in subdivision (a)(1)(E)(iii) within three (3) business days of the determination. For purposes of this section, “minority business” is defined as solely owned or at least fifty-one percent (51%) owned by a person or persons who control the daily operation of such business and who is disabled (a person having a physical or mental impairment that in the written opinion of the person's licensed physician, substantially limits one (1) or more of the major life activities of such person, including caring for oneself, and performing manual tasks, which include writing, walking, seeing, hearing, speaking and breathing); African American (persons having origins in any of the Black racial groups of Africa); Asian American (persons having origins in any of the original peoples of the Far East, Southeast Asia and Asia, the subcontinent, or the Pacific Islands); Hispanic American (persons of Cuban, Mexican, Puerto Rican, Central or South American, or other Spanish or Portuguese origin, culture, or descent, regardless of race); or Native American (persons having origins in any of the original peoples of North America). For purposes of this section, “small business” is defined as one which is independently owned and operated, has total gross receipts of no more than two million dollars ($2,000,000) for the most recently ended federal tax year, and employs no more than thirty (30) persons on a full-time basis.

                (vi)  The head of the affected department or agency has the authority to resolve the protest. If deemed necessary, the head of the affected department or agency may request a meeting with the protesting party during which the head of the affected department or agency may seek clarification of the protest issues. As used in this section, “head of the affected department or agency” also includes a designee of the head of the affected department or agency identified as such in writing.

                (vii)  The head of the affected department or agency shall have no longer than sixty (60) days from receipt of a protest to resolve the protest. The final determination of the head of the affected department or agency shall be given in writing and submitted to the protesting party.

                (viii)  The protesting party may request that the final determination of the head of the affected department or agency be considered at a meeting of a review committee that is composed of the commissioner of general services, the commissioner of finance and administration, and the comptroller of the treasury, or their designees. The request for consideration shall be made in writing to the committee within seven (7) days from the date of the final determination by the head of the affected department or agency.

                (ix)  In the event that the head of the affected department or agency fails to respond to a protest within fifteen (15) days of receipt of a protest or fails to resolve the protest within sixty (60) days, the protesting party may request that the review committee consider the protest at a meeting.

                (x)  Prior to the award of a contract, a proposer who has protested may submit to the head of the affected department or agency a written petition for stay of award. Such stay shall become effective upon receipt by the state. The state shall not proceed further with the solicitation process or the award of the contract until the protest has been resolved in accordance with this section, unless the review committee makes a written determination that continuation of the solicitation process or the award of the contract without delay is necessary to protect substantial interests of the state. It shall be the responsibility of the head of the affected department or agency to seek such a determination by the review committee.

                (xi)  Nothing in this subdivision (a)(1) shall be construed to require a contested case hearing as set forth in the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. The protesting party must exhaust all administrative remedies provided in this section prior to the initiation of any judicial review of the protest.

                (xii)  Should a protest be received by the state subsequent to a contract being completely executed pursuant to a solicitation process authorized under this section, the Tennessee claims commission shall have exclusive jurisdiction to determine all monetary claims against the state including, but not limited to, claims for the negligent deprivation of statutory rights under § 9-8-307(a)(1)(N).

                (xiii)  Protests appealed to the chancery court from the review committee shall be by common law writ of certiorari. The scope of review in the proceedings shall be limited to the record made before the review committee and shall involve only an inquiry into whether the review committee exceeded its jurisdiction, followed an unlawful procedure, or acted illegally, fraudulently, or arbitrarily without material evidence to support its action.

          (F)  Nothing in this subdivision (a)(1) shall be construed or have the effect of requiring or increasing the use of or request for proposals (RFP) by any state entity when use of an RFP is not otherwise required.

          (G)  (i)  All requests, in accordance with rules authorized by this subdivision (a)(1), to procure service by negotiation with only one service provider, hereinafter referred to as a “non-competitive contract”, shall be contemporaneously filed with the fiscal review committee of the general assembly and the commissioner of finance and administration. Such requests shall document the following:

                     (a)  Description of service to be acquired;

                     (b)  Explanation of the need for or requirement placed on the procuring agency to acquire the service;

                     (c)  Name and address of the proposed contractor's principal owner(s);

                     (d)  Evidence that the proposed contractor has experience in providing the same or similar service and evidence of the length of time the contractor has provided the same or similar service;

                     (e)  Explanation of whether the service was ever bought by the procuring agency in the past, and if so, what method was used to acquire it and who was the contractor;

                     (f)  Description of procuring agency efforts to use existing state employees and resources or, in the alternative, to identify reasonable, competitive, procurement alternatives (rather than to use non-competitive negotiation); and

                     (g)  Justification of why the state should acquire the service through non-competitive negotiation.

                (ii)  The provisions of subdivision (a)(1)(G)(i), relative to filing requests with the fiscal review committee, shall only apply to proposed non-competitive contracts with a term of more than one (1) year or which are renewable by either party that would extend the contract beyond twelve (12) months and which have a cumulative value, including all possible renewals, of two hundred fifty thousand dollars ($250,000) or more. The fiscal review committee shall have fifteen (15) days from receipt of the request to comment on the proposed contract. After such fifteen-day period, any such contract authorized by the commissioner may be executed.

                (iii)  All other requests to negotiate non-competitive contracts shall be reviewed by the fiscal review committee after approval by the commissioner of finance and administration. With respect to such requests, the fiscal review committee shall be provided the same information to be submitted in accordance with subdivision (a)(1)(G)(i).

          (H)  All requests, approved in accordance with rules authorized by this subdivision (a)(1), to permit an exception to the rules shall be filed with the fiscal review committee of the general assembly.

          (I)  The department of finance and administration, office of contracts review shall file a personal, professional, and consultant service contract report quarterly with the fiscal review committee of the general assembly. The report shall list contracts approved in accordance with rules authorized by this subdivision (a)(1) during the prior quarter and detail whether or not each contract procurement was competitive.

          (J)  Each procuring state agency granted a special delegated authority, pursuant to rules authorized by this subdivision (a)(1), to establish fee-for-service contracts shall report to the fiscal review committee a listing of all contracts awarded under the delegated authority. The listing of contracts awarded shall be filed quarterly and shall include, at minimum, the contractor name, contract period, contract amount, method used to select the contractor, and completion date for a monitoring review, as defined by department of finance and administration policy.

     (2)  Administrative contracts for specific service signs pursuant to title 54, chapter 5, part 11, shall be awarded to the vendor who offers the lowest responsible bid. The basis of all bids shall be the least cost to the retail user of the signs. All administrative contracts shall be awarded on an objective, competitive basis pursuant to regulations promulgated by the department.

(b)  This section does not apply to construction and engineering contracts entered into by the department of transportation pursuant to the provisions of title 54, chapter 5, or to contracts which are advertised and awarded by the state building commission in accordance with § 4-15-102, and shall not apply to contracts for procurement of services in connection with the issue, sale, purchase, and delivery of bonds, notes and other debt obligations or the administration, safekeeping, and payment after delivery of such debt obligations by the state or any of its agencies. This section does not apply to contracts to hire additional counsel for the state of Tennessee or any of its departments, institutions or agencies; provided, that all such contracts shall be made in accordance with § 8-6-106, except for legal counsel employed pursuant to any statute concerning the issuance and sale of bonds, notes, or other obligations. This section also does not apply to contracts for appraisal, relocation or acquisition services related to the acquisition of land that are entered into by the department of transportation pursuant to the provisions of title 54, chapter 5; provided, that the department of transportation will enter into such contracts utilizing the same procedures it utilizes for contracting for engineering services.

(c)  All contracts for the rendering of public relations, advertising or related services entered into by or on behalf of agencies and departments of the executive branch of state government shall be restricted to provide for only the rendition of media advertising and related design and production services, except as otherwise determined in accordance with policies established by the board of standards.

(d)  The procuring department or agency shall be responsible for the effective management of all contracts procured herein under its purview. Notwithstanding, the commissioner of finance and administration, in the manner consistent with the approval of regulations promulgated in subdivision (a)(1)(A), shall develop regulations that define service contracting fundamentals, including, but not limited to, contract management and monitoring of vendors, grants and subrecipient relationships. The regulations for monitoring shall, at a minimum, require the filing of the monitoring plan with the department of finance and administration before any contracts are approved.

(e)  The commissioner of finance and administration shall promulgate regulations pursuant to subdivision (a)(1)(A), authorizing a preference in the evaluation of proposals for state contracts requiring the performance of data entry or call center services, or both, for vendors through whom such services will be solely provided by citizens of the United States who reside within the United States, or any person authorized to work in the United States pursuant to federal law, including legal resident aliens in the United States. Any vendor who receives such a preference in the evaluation process and is ultimately awarded such a contract shall provide such periodic assurances as the state shall require, that the services are solely provided by citizens of the United States who reside within the United States, or persons authorized to work in the United States pursuant to federal law, including legal resident aliens in the United States.

[Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1976, ch. 601, §§ 3, 5; T.C.A., § 12-450; Acts 1980, ch. 741, § 5; 1980, ch. 845, § 1; 1981, ch. 279, § 1; 1983, ch. 115, § 4; 1988, ch. 696, § 5; 1993, ch. 495, §§ 1, 4; 1998, ch. 785, § 9; 1999, ch. 170, §§ 1, 2; 2000, ch. 924, §§ 6-9, 12; 2001, ch. 205, § 1; 2003, ch. 413, § 1; 2004, ch. 630, § 1; 2006, ch. 597, §§ 1, 2; 2007, ch. 114, § 1; 2008, ch. 933, § 1.]