Section 1500.01  Title

This Part may be cited as the Office of the Governor Procurement Rules.

Section 1500.05  Policy

All procurements by the Office of the Governor (OG) shall be accomplished in the most economical, expeditious and commercially reasonable manner that is in accordance with statute, this Part and other applicable rules.

Section 1500.10  Application

a)         Articles 1, 15, 20, 25, 35, 40, 45, 50, and 53 of the Illinois Procurement Code [30 ILCS 525] (the Code) will be referenced herein as though applicable to the OG, and all procurements of goods or services conducted by the OG or by CMS on behalf of the OG shall be substantially in accordance with those provisions of the Code, except to the extent otherwise provided in this Part.

b)         For the purposes of the Code and this Part, any reference to Chief Procurement Officer (CPO) means the Governor or his designee except that for the purpose of issuing State debt, the Director of the Bureau of the Budget shall be the CPO.  The Governor may appoint one or more designees.

c)         The Code and this Part apply to those procurements for which the vendors were first solicited on or after July 1, 1998.

d)         Procurements for which vendors were first solicited on or before June 30, 1998, shall be conducted pursuant to legal requirements in effect at the time of the solicitation.  The terms and conditions and the rights and obligations under contracts resulting from such procurements shall not be impaired.

e)         A solicitation occurs on or before June 30, 1998, as follows:

1)         When advertising was required in the Official State Newspaper, the first advertisement must run no later than June 30, 1998.

2)         When advertising was not required:

A)        if the procurement was advertised, even though advertising was not required, the first advertisement must have run no later than June 30, 1998;

B)        if the procurement was by direct solicitation by mail, the solicitation must have been postmarked or placed in the control of a private carrier no later than June 30, 1998;

C)        if the procurement was by direct solicitation by fax, the fax must show a transmission date no later than June 30, 1998;

D)        if the procurement was solicited in-person or by telephone, the solicitation must have occurred no later than June 30, 1998, and the State officer or employee who made the solicitation must state in writing when the procurement was discussed and must name the party with whom the discussion took place.

3)         In all circumstances, the solicitations must be for the procurement of particular needs.  A general discussion to determine if there is any interest on the part of a State agency in the supplies or services of a vendor or vendors, or on the part of a vendor or vendors in providing the supplies or services, is not considered a solicitation.

f)         The Code and this Part do not apply to:

1)         contracts between the State and its political subdivisions or other governments, or between State governmental bodies except as specifically provided in the Code.  (For purposes of this subsection (f)(1), "governmental bodies" includes the State universities and their governing boards, community colleges and their governing boards, community colleges and their governing boards and school districts. This provision applies to contracts between governmental entities; it does not allow State agencies to utilize contracts established by other governmental entities and school districts.);

2)         grants;

3)         hiring of an individual as employee and not as an independent contractor, whether pursuant to an employment code or policy or by contract directly with that individual;

4)         collective bargaining contracts;

5)         purchase of real estate; or

6)         contracts necessary to prepare for anticipated litigation, enforcement actions, or investigations, provided that the chief legal counsel to the Governor shall give his or her prior approval. [30 ILCS 500/1-10] Anticipated litigation is that which the OG may prosecute or defend before a court or administrative body and actions necessary to prepare for and conduct the effective legal prosecution or defense of litigation, including, but not limited to, contracting for expert witnesses.

Section 1500.15  Definition of Terms Used in This Part

As used throughout this Part, terms defined in the Illinois Procurement Code shall have the same meaning as in the Code and as further defined below, and each term listed in this Section shall have the meaning set forth below unless its use clearly requires a different meaning.  Terms may be defined in particular Sections for use in that Section.

            "Bid" − The response to an Invitation for Bids.

            "Bidder" − Any person who submits a bid.

            "Brand Name or Equal Specification" − A specification that uses one or more manufacturer's names or catalogue numbers to describe the standard of quality, performance, and other characteristics needed to meet State requirements, and that allows the submission of equivalent products.

            "Brand Name Specification" − A specification limited to one or more items by manufacturers' names or catalogue numbers.

            "Code" − The Illinois Procurement Code [30 ILCS 500].

            "Concession" − The right or a lease to engage in a certain activity for profit on the lessor's premises (e.g., a refreshment or parking concession).

            "Consulting services" − services provided by a business or person as an independent contractor to advise and assist an agency in solving specific management or programmatic problems involving the organization, planning, direction, control or operations of a State agency.  The services may or may not rise to the level of professional and artistic as defined in the Code and this Part.

            "Contract" − A contract may be in written or oral form.  The term contract as used in the Code and this Part includes any agreement or lease that requires the payment of State funds by the OG in exchange for goods or services but it does not include bonds issued by or on behalf of any State agency or contracts relating to bonds issued by or on behalf of a State agency when the contractor or vendor is neither selected nor paid by the State agency.

            "Contractor" or "Vendor" − The terms contractor and vendor are used  interchangeably for purposes of the Code and this Part.

            "Day" − Calendar day.  In computing any period of time, the day of the event from which the designated period of time begins to run shall not be included, but the last day of the period shall be included unless it is a Saturday, Sunday, or a State holiday, in which event the period shall run to the end of the next business day.

            "Items" − Anything that may be procured under this Code.

            "Invitation for Bids" or "IFB" − The process by which a purchasing agency  requests information from bidders, including all documents, whether attached or incorporated by reference, used for soliciting bids.  [30 ILCS 500/1-15.45]

            "Procurement Officer" − The Chief Procurement Officer (CPO) or appropriate State Purchasing Officer (SPO) who conducts the particular procurement, or a designee of either.

            "Proposal" − The response to a Request for Proposals.

            "Qualified Products List" − An approved list of supplies described by model or catalogue numbers that, prior to competitive solicitation, the State has determined will meet the applicable specification requirements.

            "Request for Proposals" or "RFP" − The process by which a purchasing agency requests information from offerors, including all documents, whether attached or incorporated by reference, used for soliciting proposals.  [30 ILCS 500/1-15.75]

            "Responsive Bidder" − A person who has submitted a bid that conforms in all material respects to the Invitation for Bids.  [30 ILCS 500/1-85]

            "Responsible Offeror" − A person who has submitted an offer that conforms in all material respects to the Request for Proposals.

            "Service" − The furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports or supplies that are incidental to the required performance  [30 ILCS 500/1-15.90] and the financing thereof.

            "Specification" − Any description of the physical, functional, or performance characteristics, or of the nature of, a supply or service. A specification includes, as appropriate, requirements for inspecting, testing, or preparing a supply or service item for delivery. Unless the context requires otherwise, the terms "specification" and "purchase description" are used interchangeably throughout this Part.

            "Specification for a Common or General Use Item" − A specification that has been developed and approved for repeated use in procurements.

            "State Agency" − Includes all boards, commissions, agencies, institutions, authorities, and bodies politic and corporate of the State, created by or in accordance with the constitution or statute, of the executive branch of State government and does include colleges, universities, and institutions under the jurisdiction of the governing boards of the University of Illinois, Southern Illinois University, Illinois State University, Eastern Illinois University, Northern Illinois University, Western Illinois University, Chicago State University, Governors State University, Northeastern Illinois University, and the Board of Higher Education.  However, this term does not apply to public employee retirement systems or investment boards that are subject to fiduciary duties imposed by the Illinois Pension Code or to the University of Illinois Foundation.  "State Agency" does not include units of local government, school districts, community colleges under the Public Community College Act, and the Illinois Comprehensive Health Insurance Board.  [30 ILCS 500/1-15.100]

            "Supplies" − All personal property, including but not limited to equipment, materials, printing, and insurance, and the financing of those supplies. [30 ILCS 500/1-15.110]

            "Unsolicited Offer" − Any offer other than one submitted in response to a  solicitation.

Section 1500.25  Property Rights

Receipt of an Invitation for Bids or other procurement document, or submission of any response thereto, or other offer, confers no right to receive an award or contract, nor does it obligate the State in any manner.

Section 1500.525  Rules

Procurement under the jurisdiction of the OG shall be conducted substantially in accordance with the Code and in accordance with this Part except as provided in this Section.  The OG may, in the same manner as State agencies under the jurisdiction of the CPO of CMS, without soliciting independent bids, proposals, or responses, procure goods and services from Master Contracts or other centralized purchasing arrangements established by CMS from vendors selected by CMS in accordance with a competitive selection process established by CMS under the Code.

Section 1500.1005  Exercise of Procurement Authority

a)         The CPO shall ensure that all procurements of the OG are in accordance with the Code and this Part and are in the best interests of the State.  For procurements other than for issuance of State debt, the CPO may request that CMS conduct such procurements on behalf of the OG.  Such procurements conducted by CMS on behalf of the OG shall be carried out in accordance with the Code and rules adopted by CMS thereunder. Additionally, the CPO may delegate to the CPO of CMS the authority to exercise on behalf of the CPO or any Purchasing Officer any right, responsibility, duty or obligation vested in the CPO or any Procurement Officer under the Code or this Part.

b)         The CPO may appoint one or more employees under his direction and supervision to serve as a SPO.

Section 1500.1510  Illinois Procurement Bulletin

a)         Notice of any procurement action, by or on behalf of the OG, that would be required by the Code to be published in the Illinois Procurement Bulletin if the OG were a "State Agency" will be forwarded to CMS for inclusion in the appropriate volume of the Bulletin.

b)         The Bulletin may be supplemented at the discretion of the OG with  publication elsewhere, including in the Official State Newspaper selected by CMS.

c)         The notice shall contain at least the following information:

1)         the Office of the Governor;

2)         a brief purchase description;

3)         a procurement reference number, if used;

4)         the date the procurement is first offered;

5)         the date, time, and location for making submissions;

6)         the method of source selection;

7)         the name of the Procurement Officer in charge; and

8)         instructions on how to obtain detailed information.

d)         Notice of each contract awarded that was subject of a notice in subsection (b) above shall  be placed in the Bulletin.  This notice shall contain at least the following information:

1)         the information published in subsection (b) above;

2)         the name of the vendor selected for award;

3)         the contract price;

4)         the number of unsuccessful responsive vendors; and

5)         other disclosures required to be published in the Bulletin.

e)         The following information regarding emergency procurements shall be published in the Bulletin within 14 days after commencement of performance under the emergency contract:

1)         name of the procuring agency (and using agency, if different);

2)         name of the vendor selected for award;

3)         brief description of what the vendor will do or provide;

4)         total price (if only an estimate is known, it shall be published, but a subsequent notice repeating all required information shall be published when the final amount is known);

5)         reasons for using the emergency method of source selection; and

6)         name of the Procurement Officer in charge.

f)         The following information in regard to sole source procurements shall be published in the Bulletin at least 14 days prior to entering into the contract with the designated sole source vendor:

1)         name of the procuring agency (or using agency, if different);

2)         name of the vendor;

3)         brief description of what the vendor will do or provide; and

4)         name of the Procurement Officer in charge.

Section 1500.1570  Error in Notice

When a required publication contains an error, the error may be corrected by a single notice published in the Bulletin.

Section 1500.1580  Direct Solicitation

In addition to giving notice in the Bulletin, OG may directly contact prospective vendors by providing copies of Invitations for Bids, Requests for Proposals, or other procurement information. Direct solicitation may be oral or in writing, but care should be taken to ensure that all vendors solicited in this manner receive the same information as provided to others. No direction solicitation shall be made prior to the date any required notice first appears in the Bulletin.

Section 1500.2005  General Provisions

a)         Late Bids or Proposals, Late Withdrawals and Late Modifications

1)         Definition.  Any bid or proposal received after the time and date for receipt, and at other than the specified location, is late.  A bid that is delivered to the wrong location but that is subsequently delivered to the correct location by the date and time specified shall be considered, but the agency shall not be responsible for ensuring such subsequent delivery.  Any withdrawal or modification of a bid or proposal received after the time and date set for opening of bids or proposals is late. If received at other than the specified location, the submission is late.

2)         Treatment.  No late bid or proposal, late modification, or late withdrawal will be considered unless the CPO, and not a designee, determines it would have been timely but for the action or inaction of State personnel directly serving the procurement activity (e.g., providing the wrong address).

3)         Records.  Records shall be made and, in accordance with the State Records Act [5 ILCS 160], kept for each late bid or proposal, late modification, or late withdrawal.

4)         Other Submissions.  Any other submission that has a time or date deadline shall be treated in the same manner as a late bid.

b)         Extension of Time

1)         The CPO may, prior to the date or time for submitting or modifying a bid or proposal, extend the date or time for the convenience of the State.

2)         After opening bids or proposals, the CPO may request bidders or offerors who submitted timely bids or proposals to extend the time during which the State may accept the bids or proposals, provided that, with regard to bids, no other change is permitted.  This extention does not provide an opportunity for others to submit bids or proposals.

c)         Electronic and Facsimile Submissions

1)         The Invitation for Bids or Request for Proposals may state that electronic and facsimile machine submissions will be considered if they are received at the designated office by the time and date set for receipt.  Any required attachments will be submitted as stated in the IFB or RFP.

2)         Electronic submissions authorized by specific language in the IFB or RFP will be opened in accordance with electronic security measures in effect at the purchasing agency at the time of opening. Unless the electronic submission procedures provide for a secure receipt, vendor assumes risk of premature disclosure due to submission in unsealed form.

3)         Fax submissions authorized by specific language in the IFB or RFP will be placed in a sealed container upon receipt and opened as other submissions. Vendor assumes risk of premature disclosure due to submission in unsealed form.

d)         Intent to Submit

The Invitation for Bids or the Request for Proposals may require that vendors submit, by a certain time and date, a notice of their intent to submit a bid or proposal in response to the IFB or RFP.  Bids and proposals submitted without complying with the notice of intent requirement may be rejected.

e)         Only One Bid or Proposal Received

If only one bid or proposal is received, an award may be made to the single bidder or offeror if the Procurement Officer finds that the price submitted is fair and reasonable, and that either other prospective bidders had reasonable opportunity to respond or there is not adequate time for resolicitation.  Otherwise:

1)         new bids or offers may be solicited, including under sole source (Section 1500.2025) or emergency (Section 1500.2030) procedures; or

2)         the procurement may be canceled.

f)         Alternate or Multiple Bids or Proposals

1)         Alternate bids or proposals may be accepted if:

A)        permitted by the solicitation and in accordance with instructions in the solicitation; or

B)        only one vendor responded, in which case the alternate submission may be evaluated and treated in accordance with Section 1500.2025 (Sole Economically Feasible Source Procurement) of this Part; or

C)        the low bidder, who has met all requirements of the solicitation, has provided a lower cost alternative that meets all of the material requirements of the specifications.

2)         Multiple bids or proposals may be accepted if:

A)        permitted by the solicitation and submitted in accordance with instructions in the solicitation; or

B)        only one vendor responded; then, one or more of the submissions may be evaluated, provided that, in the case of bids, only the lowest cost bid meeting specifications may be considered.

3)         If a vendor clearly indicates a primary submission among alternate or multiple bids or proposals, then that primary submission shall be considered for award as though it were the only bid or proposal submitted by the vendor.

g)         Multiple Items

An Invitation for Bids or Request for Proposals may call for pricing of multiple items of similar or related type with award based on individual line item, group total of certain items, or grand total of all items.

h)         "All or None" Bids or Proposals

All or none bids or proposals may be accepted if the evaluation shows an all or none award to be the lowest cost or best value of those submitted.

i)          Conditioning Bids or Proposals Upon Other Awards

Any bid or proposal that is conditioned upon receiving award of the particular contract being solicited and one or more other State contracts shall:

1)         be rejected unless the vendor removes the condition; or

2)         be evaluated and award made to that vendor if the vendor is also independently evaluated as the winner of the other IFBs or RFPs, provided the agency need not delay procurement actions to accommodate the vendor's all or none condition.

j)          Unsolicited Offers

1)         Processing of Unsolicited Offers.  The CPO may consider unsolicited offers.

2)         Conditions for Consideration.  An unsolicited offer must be in writing and must be sufficiently detailed to allow a judgment to be made concerning the potential utility of the offer to the State.

3)         Award.  An award may not be made based on an unsolicited offer in place of the notice and competition requirements of the Code and this Part except if that unsolicited offer meets the requirements for a small (Section 1500.2020), sole source (Section 1500.2025), or emergency (Section 1500.2030) procurement.

k)         Clarification of Bids and Proposals

The CPO may request that a vendor clarify its bid or proposal as a part of the evaluation process.  A vendor shall not be allowed to materially change its bid or proposal in response to a request for clarification.  A clarification is not an opportunity to make changes or for submission of best and finals as authorized elsewhere in this Part.

l)          Extension of Time on Indefinite Quantity Contracts

The time of performance of an indefinite quantity contract may be  extended upon agreement of the parties, provided the extension is for 90 days or less and the Procurement Officer determines in writing that it is not practical to award another contract at the time of such extension.

m)        Increase in Quantity on Definite Quantity Contracts

1)         The quantity that may be ordered from a definite quantity contract without additional notice and competition may be increased by up to 20% provided the CPO determines that separate bidding for the additional quantity is not likely to achieve lower pricing.  A particular procurement may specify a different percentage.

2)         The quantity may be increased by any percentage provided the dollar value of the increase does not exceed the applicable small purchase (Section 1500.2020) threshold.

n)         Subsequent Purchase Request

If, within 30 days after making an award to a particular vendor pursuant to a competitive sealed bid by or on behalf of the OG, the OG wishes to make another purchase request for the same item and for the same or lesser quantity, the CPO may contract with that vendor on the same terms and conditions, including price, without additional notice and competition, if such contract is acceptable to the vendor.

o)         Assignment, Novation or Change of Name

1)         Assignment.  No State contract is transferable, or otherwise assignable, without the written consent of the CPO, provided, however, that a vendor may assign money receivable under a contract after due notice to the State. Assignment may require the execution of a contract with the assignee and in such cases the assignee must meet all requirements for contracting with the State.

2)         Recognition of a Successor in Interest; Novation.  When in the best interest of the State, a successor in interest may be recognized in a novation agreement in which the transferor and the transferee agree that:

A)        the transferee assumes all of the transferor's obligations;

B)        the transferee meets all requirements for contracting with the State;

C)        the transferor waives all rights under the contract as against the State; and

D)        unless the transferor guarantees performance of the contract by the transferee, the transferee shall, if required by the State, furnish a satisfactory performance bond.

3)         Change of Name.  A vendor may submit a written request to change the name in which it holds a contract with the State. The name change shall not alter any of the terms and conditions of the contract or the obligations of the vendor.

4)         Reports.  All change of name or novation agreements under this subsection (o) shall be reported to the CPO within 30 days after the date the agreement becomes effective so that the bid list may be updated.

p)         Contracting for Installment Purchase Payments, Including Interest Contracts may provide for installment purchase payments, including interest charges, over a period of time.  The interest rate may not exceed that established by law, including the Bond Authorization Act [30 ILCS 305].

q)         Use of Source Selection Method that is Not Required

If the OG uses a method of source selection that it is not, by law, required to use (e.g., use of a competitive sealed bid for a small purchase), it is not bound to strict compliance with the Code and rules governing the method of source selection used.

r)          Vendor Signature

A bid or proposal submitted unsigned will be evaluated if the vendor submits a written signature acceptable to the Procurement Officer within the time specified by that officer.

s)         Stringing

Dividing or planning procurements to avoid use of competitive procedures (stringing) is prohibited.

t)          Confidential Data

Vendors must clearly identify any information that is exempt from the disclosure requirement of the Illinois Freedom of Information Act [5 ILCS 140] and must request special handling of that material.

Section 1500.2010  Competitive Sealed Bidding

a)         Application

Competitive sealed bidding is the required method of source selection except as allowed by the Code and this Part.  The provisions of this Section apply to every procurement required to be conducted by competitive sealed bidding.

b)         The Invitation for Bids

1)         Use.  The Invitation for Bids is used to initiate a competitive sealed bid procurement.

2)         Content.  The Invitation for Bids shall include, at a minimum, the following:

A)        instructions and information to bidders concerning the bid submission requirements, including the time and date set for receipt of bids, the address of the office to which bids are to be delivered, and the maximum time for bid acceptance;

B)        the purchase description, evaluation factors, delivery or performance schedule, and such inspection and acceptance requirements as are not included in the purchase description; and

C)        the contract terms and conditions, including warranty and bonding or other security requirements, as applicable.

3)         Incorporation by Reference.  The Invitation for Bids may incorporate documents by reference provided that the Invitation for Bids specifies where such documents can be obtained.

c)         Bidding Time

Bidding time is the period of time between the date of notice or distribution of the Invitation for Bids and the time and date set for receipt of bids.  In each case, bidding time will be set to provide bidders a  reasonable time to prepare their bids. A minimum of 14 days shall be provided unless a shorter time is authorized by the Code or this Part.

d)         Bidder Submissions

1)         Bid Form.  The Invitation for Bids may include a form or format for submitting bids.  If a form or format is specified, vendor shall submit bids as instructed.

2)         Bid Samples and Descriptive Literature

A)        Bid samples or descriptive literature may be required when it is necessary to evaluate required characteristics of the items bid.

B)        Unsolicited bid samples or descriptive literature is submitted at the bidder's risk, may not be examined or tested, will not be deemed to vary any of the provisions of the Invitation for Bids, and may not be utilized by the vendor to contest a decision or understanding with the OG.

e)         Public Notice

1)         Publication.  Every procurement for supplies and services in excess of the small purchase amount that must be procured using an Invitation for Bids shall be publicized in the Illinois Procurement Bulletin (see Section 1500.1510).

2)         Public Availability.  A copy of the Invitation for Bids shall be made available for public inspection.

3)         Distribution.  Invitations for Bids or Notices of the Availability of Invitations for Bids may be mailed or otherwise furnished to a sufficient number of bidders for the purpose of securing competition.  Notices of Availability shall, at a minimum, indicate where Invitations for Bids may be obtained; generally describe what is needed; and indicate the due date for bids.  Where appropriate, the Procurement Officer may require payment of a fee or a deposit for supplying the Invitation for Bids.

f)         Pre-Bid Conference

A pre-bid conference may be conducted to enhance understanding of the procurement requirements.  The pre-bid conference shall be announced as a part of the Invitation for Bids notice.  The conference may be designated as "attendance mandatory" or "attendance optional".  The conference should be held long enough after the Invitation for Bids has been issued to allow bidders to  become familiar with it, but sufficiently before bid opening to allow consideration of the conference results in preparing their bids. Nothing stated at the pre-bid conference shall change the Invitation for Bids unless a change is made by written modification to the Invitation for Bids. Amendments shall be supplied to all those prospective bidders known to have received an Invitation for Bids.  If the conference is mandatory, the amendment shall be supplied to attendees only.

g)         Amendments to Invitations for Bids

1)         Form.  Amendments to Invitations for Bids shall be clearly identified and shall reference the portion of the IFB it amends.

2)         Distribution.  Amendments shall be made available to all prospective bidders known to have received an Invitation for Bids.

3)         Timeliness.  Amendments shall be made available within a reasonable time to allow prospective bidders to consider them in preparing their bids.  If the time and date set for receipt of bids will not permit such preparation, the amendment shall extend the response time.  If necessary, the response time may be extended by fax or telephone and confirmed in the amendment.

h)         Pre-Opening Modification or Withdrawal of Bids

1)         Procedure.  Bids may be modified or withdrawn by written notice received in the office designated in the Invitation for Bids prior to the time and date set for bid opening.

2)         Disposition of Bid Security.  If a bid is withdrawn in accordance with this Section, the bid security, if any, shall be returned to the bidder.

3)         Records.  All documents relating to the modification or withdrawal of bids shall be made a part of the appropriate procurement file.

i)          Receipt, Opening and Recording of Bids

1)         Receipt.  Upon its receipt, each bid and modification shall be time-stamped but not opened and shall be stored in a secure place until the time and date set for bid opening.  If a bid is opened in error, the file shall so state.

2)         Opening and Recording

A)        Bids and modifications shall be opened publicly at the time, date, and place designated in the Invitation for Bids. Opening shall be witnessed by a State employee or any other person present, but the person opening bids shall not serve as witness.  The name of each bidder, the bid price, and such other information as is deemed appropriate by the Procurement Officer shall be recorded and the name of each bidder read aloud or otherwise made available. The name of the witness shall also be recorded at the opening.

B)        The winning bid shall be available for public inspection after award, along with the record of each unsuccessful bid.

j)          Bid Evaluation and Award

1)         General.  The contract is to be awarded to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the Invitation for Bids, except as permitted in the Code and this Part.  The Invitation for Bids shall set forth the requirements and criteria that will be used to determine the lowest responsive bidder.  No bid shall be evaluated for any requirements or criteria that are not disclosed in the Invitation for Bids.

2)         Responsibility.  Responsibility of prospective vendors is covered by Section 1500.2045 (Responsibility) of this Part.

3)         Responsiveness.  A bid must conform in all material respects to the Invitation for Bids.

A)        Product or Service Acceptability.  The Invitation for Bids shall set forth any evaluation criteria to be used in determining product or service acceptability.  It may require the submission of bid samples, descriptive literature, technical data, references, licenses, or other information or material.  It may also provide for accomplishing any of the following prior to award:

i)          inspection or testing of a product or service prior to award for such characteristics as quality or workmanship;

ii)         examination of such elements as appearance, finish, taste, or feel;

iii)        other examinations to determine whether it conforms with any other purchase description requirements.

B)        The acceptability evaluation is not conducted for the purpose of determining whether one bidder's product or service capability is superior to another, but only to determine that a bidder's offering is acceptable as set forth in the Invitation for Bids.  Any bidder's offering that does not meet the acceptability requirements shall be rejected.

4)         Determination of Lowest Bidder.  Following determination of product or service acceptability as set forth in this subsection (j), bids will be evaluated to determine which bidder offers the  lowest cost to the State in accordance with the evaluation criteria set forth in the Invitation for Bids. Only objectively measurable criteria that are set forth in the Invitation for Bids shall be applied in determining the lowest bidder.  Examples of such criteria include, but are not limited to, transportation cost and ownership or life-cycle cost formulas.  Evaluation factors need not be precise predictors of actual future costs, but to the extent possible such evaluation factors shall be reasonable estimates based upon information the State has available concerning future use and shall provide for the equitable treatment of all bids.  Pricing for optional supplies or services, or for renewal terms, may be considered, particularly when the pricing for such items or terms is unbalanced when compared to other pricing in the bid.

5)         Price Negotiation. Negotiations are permitted with the low bidder to obtain a lower price for the item bid.

k)         Documentation of Award

Following award, a record showing the successful bidder shall be made a part of the procurement file.

l)          Award to Other Than Low Bidder

1)         The Procurement Officer may award to other than the lowest responsible and responsive bidder upon a written determination that award to another bidder is in the State's best interest.  The name of the bidder selected, pricing, and the reasons for selecting this bidder instead of the low bidder must be published in the Bulletin.

2)         This action may be appropriate when the difference in quality or speed of delivery is so great as compared to the difference in price, and considering the needs of the agency, that a best value award is justified.  However, if the difference in price is significant, the Procurement Officer may not utilize this provision.

m)        Publicizing Award

The successful bidder shall be notified of award and such notification may be in the form of a letter, purchase order or other clear communication.  In procurements over the small purchase limit set in Section 1500.2020 (Small Purchases) of this Part, notice of award shall be published in the Bulletin.

Section 1500.2012  Multi-Step Sealed Bidding

a)         Definition.  Multi-step sealed bidding is 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 the 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.

b)         Conditions for Use.  The multi-step sealed bidding method may be used when it is not practical to prepare initially a definitive purchase description that will be suitable to permit an award based on price. Multi-step sealed bidding may be used when it is considered desirable:

1)         to invite and evaluate possible diverse technical offers to determine their acceptability to fulfill the purchase description requirements; and

2)         to conduct discussions for the purposes of facilitating understanding of the technical offer and purchase description requirements and, where appropriate, obtain supplemental information, permit amendments of technical offers, or amend the purchase description.

c)         Pre-Bid Conference in Multi-Step Sealed Bidding

Prior to the submission or evaluation of unpriced technical offers, a pre-bid conference as contemplated by Section 1500.2010(f) (Pre-Bid Conference) may be conducted by the Procurement Officer.

d)         Procedure for Phase One of Multi-Step Sealed Bidding

1)         Form.  Multi-step sealed bidding shall be initiated by the issuance of an Invitation for Bids in the form required by Section 1500.2010 (Competitive Sealed Bidding), except as hereinafter provided.  In addition to the requirements set forth in Section 1500.2010, the multi-step Invitation for Bids shall state:

A)        that unpriced technical offers are requested;

B)        whether priced bids are to be submitted at the same time as unpriced technical offers; if they are, such priced bids shall be submitted in a separate sealed envelope;

C)        that it is a multi-step sealed bid procurement, and priced bids will 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 Procurement Officer may conduct oral or written discussions of the unpriced technical offers;

F)         that the item being procured shall be furnished generally in accordance with the bidder's technical offer as found to be finally acceptable and shall meet the requirements of the Invitation for Bids.

2)         Amendments to the Invitation for Bids.  After receipt of unpriced technical offers, amendments to the Invitation for Bids shall be distributed only to bidders who submitted unpriced technical offers, and they shall be permitted 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 Invitation for Bids may be canceled in accordance with Section 1500.2040 (Cancellation of Solicitation; Rejection of Bids or Proposals) of this Part and a new Invitation for Bids issued.

3)         Receipt and Handling of Unpriced Technical Offers. Unpriced technical offers submitted by bidders shall be opened in the presence of at least one witness.  Such offers shall not be disclosed to unauthorized persons.

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 Invitation for Bids.  The unpriced technical offers shall be categorized as:

A)        acceptable;

B)        potentially acceptable, that is, reasonably susceptible of being made acceptable; or

C)        unacceptable, in which case the Procurement Officer shall record in writing the basis for finding an offer unacceptable, notify the vendor and make it part of the procurement file.

5)         The Procurement Officer may initiate phase two of the procedure if, in the Procurement Officer's opinion, there are sufficient acceptable unpriced technical offers to assure effective price competition in the second phase without technical discussions. If the Procurement Officer finds discussion of the technical offers is necessary, the Procurement Officer shall commence discussions of the unpriced technical proposals.

6)         Discussion of Unpriced Technical Offers.  The Procurement Officer may conduct discussions with any vendor who submits an acceptable or potentially acceptable technical offer. During the course of such discussions, the Procurement Officer shall not disclose any information derived from one unpriced technical offer to any other bidder.  Any such bidder may submit supplemental information amending its technical offer at any time until the closing date established by the Procurement Officer. Such submission may be made at the request of the Procurement Officer or upon the bidder's own initiative.

7)         Unacceptable Unpriced Technical Offer.  When the Procurement Officer determines a bidder's unpriced technical offer to be unacceptable, such offeror shall not be afforded an additional opportunity to supplement its technical offer.

e)         Procedure for Phase Two

1)         Initiation.  Upon the completion of phase one, the Procurement Officer shall either:

A)        open priced bids submitted in phase one (if priced bids were required to be submitted) from bidders whose unpriced technical offers were found to be acceptable; or

B)        if priced bids have not been submitted, invite each acceptable bidder to submit a priced bid.

2)         Conduct.  Phase two shall be conducted as any other competitive sealed bid procurement except:

A)        no public notice need be given of this invitation to submit priced bids because such notice was previously given;

B)        after award, the unpriced technical offer of the successful bidder shall be disclosed as follows:  The Procurement Officer shall examine written requests of confidentiality for trade secrets and proprietary data in the technical offer of such bidder to determine the validity of any such requests.  If the parties do not agree as to the disclosure of data, the Procurement Officer shall reject the offer.  Such technical offer shall be open to public inspection subject to any continuing prohibition on the disclosure of confidential data; and

C)        unpriced technical offers of bidders who are not awarded the contract shall not be open to public inspection.

Section 1500.2015  Competitive Sealed Proposals

a)         Competitive Sealed Proposals may be used whenever permitted by the Code and as described in this Part.

b)         The Competitive Sealed Proposal method of source selection may be used to procure the following categories (note that the following services, if they are professional and artistic, must be procured pursuant to Section 1500.2035 of this Part):

1)         electronic data processing equipment, software, and services;

2)         telecommunications equipment, software, and services;

3)         consulting services; and

4)         employee benefits and management of those benefits.

c)         Competitive Sealed Proposals may be used on a case-by-case basis when it is determined by the Procurement Officer that competitive sealed bidding is either not practicable or not advantageous.

1)         "Practicable" Distinguished from "Advantageous."  As used in Section 20-15 (Competitive Sealed Proposals) of the Illinois Procurement Code and in this Section, "practicable" denotes what may be accomplished or put into practical application, and "advantageous" connotes a judgmental assessment of what is in the State's best interest.  Competitive sealed bidding may be practicable, that is, reasonably possible, but not necessarily advantageous, that is, in the State's best interest.  Before a procurement may be conducted by competitive sealed proposals, the Procurement Officer shall determine in writing that competitive sealed bidding is either not practicable or not advantageous to the State.

2)         General Discussion

A)        If competitive sealed bidding is not practicable or is not advantageous, competitive sealed proposals should be used.

B)        The key element in determining whether use of a proposal is advantageous is the need for flexibility.  The competitive sealed proposal method differs from competitive sealed bidding in two important ways:

i)          it permits discussions with competing offerors and changes in their proposals, including price; and

ii)         it allows comparative judgmental evaluations to be made when selecting among acceptable proposals for award of the contract.

C)        Where evaluation factors involve the relative abilities of offerors to perform, including degrees of experience or expertise, where the types of supplies or services may require the use of comparative, judgmental evaluations to evaluate them adequately, or where the type of need to be satisfied involves weighing aesthetic values to the extent that price is a secondary consideration, use of competitive sealed proposals is the appropriate procurement method.

3)         When Competitive Sealed Bidding Is Not Practicable.  Competitive sealed bidding is not practicable unless the nature of the procurement permits award to a low bidder who agrees by its bid to perform without condition or reservation in accordance with the purchase description, delivery or performance schedule, and all other terms and conditions of the Invitation for Bids. Factors to be considered in determining whether competitive sealed bidding is not practicable include:

A)        whether the contract needs to be other than a fixed-price type;

B)        whether oral or written discussions may need to be conducted with offerors concerning technical and price aspects of their proposals;

C)        whether offerors may need to be afforded the opportunity to revise their proposals, including price;

D)        whether award may need to be based upon a comparative evaluation, as stated in the Request for Proposals, of differing price, quality, and contractual factors in order to determine the most advantageous offering to the State.  Quality factors include technical and performance capability and the content of the technical proposal; and

E)        whether the primary consideration in determining award may not be price.

4)         When Competitive Sealed Bidding Is Not Advantageous.  A determination may be made to use competitive sealed proposals if it is determined that it is not advantageous to the State, even though practicable, to use competitive sealed bidding.  Factors to be considered in determining whether competitive sealed bidding is not advantageous include:

A)        if prior procurements indicate that competitive sealed proposals may result in more beneficial contracts for the State; and

B)        whether the factors listed in subsection (c)(3) of this Section are desirable, in conducting a procurement, rather than necessary; if they are, then such factors may be used to support a determination that competitive sealed bidding is not advantageous.

d)         Content of the Request for Proposals

The Request for Proposals shall be prepared in accordance with Section 1500.2010 (Competitive Sealed Bidding), provided that it shall also include:

1)         a statement that discussions may be conducted with offerors who submit proposals determined to be reasonably susceptible of being selected for award, but that proposals may be accepted without such discussions; and

2)         a statement of when and how price should be submitted.

e)         Receipt and Registration of Proposals

1)         Proposals and modifications shall be opened publicly at the time, date and place designated in the Request for Proposals.  Opening shall be witnessed by a State employee or by any other person present, but the person opening proposals shall not serve as witness.  A record shall be prepared that shall include the name of each offeror, the number of modifications received, if any, and a description sufficient to identify the supply or service item offered. The record of proposals shall be open to public inspection after award of the contract.

2)         Proposals and modifications shall be opened in a manner to avoid disclosing contents to competitors.  Only State personnel and contractual agents may review the proposals prior to award.

f)         Evaluation of Proposals

1)         Evaluation Factors in the Request for Proposals.  The Request for Proposals shall state all of the evaluation factors, including price, and their relative importance.

2)         Evaluation.  The evaluation shall be based on the evaluation factors set forth in the Request for Proposals.  Factors not specified in the Request for Proposals shall not be considered.  Numerical rating systems may be used but are not required.

3)         Classifying Proposals.  For the purpose of conducting discussions, proposals may be initially classified as:

A)        acceptable;

B)        potentially acceptable, that is, reasonably susceptible of being made acceptable; or

C)        unacceptable. Offerors whose proposals are unacceptable shall be so notified promptly.

g)         Proposal Discussions with Individual Offerors

1)         "Offerors" Defined.  For the purposes of Section 20-15(f) (Competitive Sealed Proposals, Discussion with Responsible Offerors and Revisions to Proposals) of the Illinois Procurement Code and of this Section, the term "offerors" includes only those businesses submitting proposals that are acceptable or potentially acceptable.  The term shall not include businesses that submitted unacceptable proposals.

2)         Purposes of Discussions.  Discussions are held to:

A)        promote understanding of the State's requirements and the offerors' proposals; and

B)        facilitate arriving at a contract that will be most advantageous to the State, taking into consideration price and the other evaluation factors set forth in the Request for Proposals.

3)         Conduct of Discussions.  Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussions and revisions of proposals. If during discussions there is a need for any substantial clarification of, or change to, the Request for Proposals, the Request shall be amended to incorporate such clarification or change.  Auction techniques (revealing one offeror's price to another) and disclosure of any information from competing proposals are prohibited.  Any substantial oral clarification of a proposal shall be reduced to writing by the offeror.

4)         Best and Final Offers.  The Procurement Officer may request best and final offers from those offerors deemed acceptable after completion of any discussions.  Best and final offers shall be submitted by a specified date and time.  The Procurement Officer may conduct additional discussions or change the State's requirements and require another submission of best and final offers.  The scope of the best and final and the number of vendors allowed to participate shall be defined by the Procurement Officer. If an offeror does not submit either a notice of withdrawal or another best and final offer, that offeror's immediately previous offer will be construed as its best and final offer.

h)         Award

An award shall be made by the Procurement Officer pursuant to a written determination showing the basis on which the award was found to be most advantageous to the State, based on the factors set forth in the Request for Proposals.

i)          Publicizing Awards

The successful offeror shall be notified of award and such notification may be in the form of a letter, purchase order or other clear communication. When the award exceeds the small purchase limit set in Section 1500.2020 of this Part, notice of award shall be published in the Bulletin.

Section 1500.2020  Small Purchases

a)         Application

1)         Procurements of $25,000 or less for supplies or services, other than professional and artistic, and $30,000 or less for construction may be made using the method of source selection determined by the Procurement Officer to be most appropriate to the circumstances.

2)         Procurements of less than $20,000 for professional and artistic services and that have a non-renewable term of one year or less may be made using the method of source selection determined by the Procurement Officer to be most appropriate to the circumstances.

3)         Any change identified by the United States Department of Labor in the Consumer Price Index, as certified by CMS, for All Urban Consumers for the period ending December 31, 1998, and for each year thereafter shall be used to adjust the small purchase maximums that shall be applicable for the fiscal year beginning July 1, 1999.  The small purchase maximums shall be likewise recalculated for each July 1 thereafter.

b)         In determining whether a contract is under the limit, the value of the contract for the full term and all optional renewals, determined in good faith, shall be utilized. The stated value of the supplies or services, plus any optional supplies and services, shall be utilized.  Where the term is calculated month-to-month or in a similar fashion, the amount shall be calculated for a twelve month period.

c)         If only a unit price or hourly rate is known, the contract shall be considered small and shall have a not to exceed limit applicable to the type of procurement (see subsection (a) above).

d)         If, after signing the contract, the actual cost of completing the contract is determined to exceed the small purchase amount, and the Procurement Officer determines that a supplemental procurement is not economically feasible or practicable because of the immediacy of the agency's needs or other circumstances, the Procurement Officer must follow the procedures for sole source or emergency procurement, whichever is applicable, to complete the contract.

e)         Procurement requirements shall not be artificially divided to avoid using the other source selection methods set forth in Section 20-5 of the Illinois Procurement Code.

f)         If there is a repetitive need for small procurements of the same type, the Procurement Officer shall consider issuing a competitive sealed bid or proposal for procurement of those needs.

(Source:  Added at 23 Ill. Reg. 7740, effective June 29, 1999)

Section 1500.2025  Sole Economically Feasible Source Procurement

a)         Application

The provisions of this Part apply to procurement from a sole economically feasible source (referred to as sole source) unless the estimated amount of the procurement is within the limit set in Section 1500.2020 (Small Purchases) or unless emergency conditions exist as defined in Section 1500.2030 (Emergency Procurements) of this Part.

b)         Conditions for Use of Sole Source Procurement

Sole source procurement is permissible when a requirement is available from only a single supplier or when only one supplier is deemed economically feasible.  A requirement for a particular proprietary item does not justify a sole source  procurement if there is more than one potential bidder or offeror authorized to provide that item.  The following are examples of circumstances that could necessitate sole source procurement:

1)         the compatibility of equipment, accessories, replacement parts, or service is a paramount consideration;

2)         a sole supplier's items are needed for trial use or testing;

3)         a sole supplier's item is to be procured for commercial resale;

4)         public utility regulated services are to be procured;

5)         the item is copyrighted or patented and the item or service is not available except from the holder of the copyright or patent;

6)         the procurement of the media for advertising;

7)         the procurement of art or entertainment services; and

8)         changes to existing contracts (see subsection (c) below).

c)         Changes

1)         Changes to an existing contract that are germane and reasonable in scope and cost in relation to the original contract or program, that are necessary or desirable to complete the contract or program, and that can be best accomplished by the contract holder may be procured under this Section when the Procurement Officer determines that the cost of delay or disruption to the contract or program, and the cost of a new solicitation, clearly indicate that the existing vendor is the sole economically feasible source.

2)         A change (whether in cost or rate) that does not exceed the applicable small purchase limit as defined in Section 1500.2020 of this Part or that is an emergency as defined in Section 1500.2030 of this Part may be made in accordance with procedures governing those Sections and need not comply with these sole source procedures.  A change in the length of the contract that does not exceed 30 days and other minor, immaterial changes to the scope or administrative provisions of a contract shall not be considered changes subject to these sole source procedures.

d)         Procurement Officer to Determine

The determination as to whether a procurement shall be made as a sole source shall be made by the Procurement Officer.  Such determination and the basis therefore shall be in writing.  Such officer may specify the application of such determination and the duration of its effectiveness.

e)         Publication of Sole Source Notice

The Procurement Officer shall submit to CMS for publication in the Bulletin notice of intent to contract with that vendor at least 14 days prior to execution of the contract.

1)         If no challenge to this determination is made by a vendor within the 14 day period, the Procurement Officer may execute a contract with that vendor.

2)         If a challenge is received, the Procurement Officer shall consider the information and shall commence a competitive procurement if the Procurement Officer determines that more than one economically feasible source may be available and the sole source designation is, therefore, not appropriate, unless an emergency situation exists.

f)         Negotiation in Sole Source Procurement

The Procurement Officer shall conduct negotiations, as appropriate, to reach contract terms, including price, and shall maintain a record of each sole source procurement showing:

1)         the vendor's name;

2)         the amount and type of the contract;

3)         what was procured; and

4)         the identification number of the contract file.

Section 1500.2030  Emergency Procurements

a)         Applications

The provisions of this Part apply to every procurement over the small purchase limit set in Section 1500.2020 (Small Purchases) of this Part and that is not a sole source procurement under Section 1500.2025 of this Part made under emergency, including quick purchase, conditions.

b)         Definition of Emergency Conditions

Procurements may be made under this Section 1500.2030 in the following circumstances:

1)         Traditional circumstances include but are not limited to:

A)        public health or safety, including the health or safety of any particular person, is threatened;

B)        immediate repairs are needed to State property to protect against further loss or damage to State property, or to prevent loss or damage to State property;

C)        immediate action is needed to prevent or minimize serious disruption in State services;

D)        action is needed to ensure the integrity of State records;

E)        equipment or services are necessary in the furtherance of covert activities lawfully conducted by a State agency.  Any required disclosures shall be made so as not to jeopardize those covert activities;

F)         immediate action is necessary to avoid lapsing or loss of federal or donated funds;

G)        availability of rare items such as books of historical value;

H)        extending an existing contract for such period of time as is needed to conduct a competitive method of source selection where terminating or allowing the contract to terminate would not be advantageous to the State; or

I)         the need for items to protect or further State interests is immediate and use of other competitive source selection procedures under the Code and this Part cannot be accomplished without significant risk of causing disadvantage to the State.

2)         After Unsuccessful Competitive Sealed Bidding or Proposals or Request for Proposals.  When bids or proposals received pursuant to a competitive sealed bid or competitive sealed proposal method are unreasonable or noncompetitive, or the price exceeds available funds, and time or other circumstances will not permit the delay required to resolicit competitive sealed bids or proposals, and if emergency conditions exist after an unsuccessful attempt to use competitive sealed bidding, an emergency procurement may be made.

3)         Extension to Allow Completion.  Extending an existing contract for such period of time as is needed to conduct a competitive method of source selection where terminating or allowing the contract to terminate would not be advantageous to the State.

4)         Quick Purchase.

A)        A supplier announces bankruptcy, cessation of business, or loss of franchise, or gives other similar reason such that making a purchase immediately is more advantageous to the State than instituting a competitive procurement under the provisions of this Part for the supplies or services;

B)        Items are available on the spot market or at discounted prices for a limited time so that good business judgement mandates a purchase immediately to take advantage of the availability and price;

C)        availability of rare items such as books of historical value.

c)         Scope of Emergency Conditions

Emergency procurements shall be limited to the items, quantity and term necessary to meet the emergency need.

d)         Source Selection Methods

Any method of source selection, whether or not identified in this Part, may be used to conduct the procurement in emergency situations.  The  procedure used shall be selected to assure that the required items are procured in time to meet the emergency.  Such competition as is practicable shall be obtained.

e)         Determination and Record of Emergency Procurement

1)         Determination.  The Procurement Officer shall make a written determination stating the basis for an emergency procurement and for the selection of the particular vendor.  Such determinations shall be kept in the contract file of the Procurement Officer.

2)         Record.  An affidavit of each emergency procurement shall be filed with the Auditor General within 10 days after the procurement and shall include the following information:

A)        the vendor's name;

B)        the amount and type of the contract, provided that if only an estimate of the amount is available immediately, the record shall be supplemented with the final amount once known;

C)        a description of what the vendor will do or provide;

D)        the reasons for using the emergency method of source selection.

3)         Notice of the emergency procurement shall be published in the Bulletin in accordance with Subpart D of this Part.

Section 1500.2035  Competitive Selection Procedures for Professional and Artistic Services

a)         Application

1)         The provisions of this Section apply to every procurement of professional and artistic services except those subject to the Architectural, Engineering and Land Surveying Qualifications Based Selection Act [30 ILCS 535] and except as provided in subsection (e) below.

2)         "Professional and artistic services" means those services provided under contract to a State agency by a person or business, acting as an independent contractor, qualified by education, experience, and technical ability [30 ILCS 500/1-15.60].

b)         Professional and artistic services are further defined as follows:

1)         "Qualified by education" means the individual who would perform the services must have obtained the level of education specified in the Request for Proposals.

2)         "Qualified by experience" means the individual who would perform the services must have the level of general experience specified in the Request for Proposals.

3)         "Qualified by technical ability" means the individual who would perform the services must demonstrate a high degree of skill or ability in performing services that are the same, similar or closely related in nature to those specified in the Request for Proposals.

4)         An essential element distinguishing professional and artistic services from other services is confidence, trust, and belief in not only the ability, but the talent, of the individual performing the service.  These services are primarily for intellectual or creative skills.  Contracts for services primarily involving manual skills or labor are not professional and artistic services contracts. (See Illinois Attorney General Opinion S-256, January 20, 1971.)

5)         If the professional or artistic contract is with a firm or other business entity, the individuals whose education, experience and technical ability provided the basis on which the firm or other business entity was selected must meet the qualifications.

c)         The categories of services enumerated below shall be considered and procured as professional and artistic services.  With regard to other services, the CPO may determine whether the factors identified in subsection (b), when applied to particular services to be procured, require such services to be procured as professional and artistic under these competitive selection procedures, or as services that are subject to one of the other methods of source selection authorized by the Code and this Part.  The following categories are examples of disciplines that would always be professional and artistic services:

1)         law;

2)         accounting;

3)         medicine;

4)         dentistry; and

5)         clinical psychology.

d)         Architect, engineering and land surveying services shall be procured pursuant to the procedures of the Architectural, Engineering, and Land Surveying Qualifications Based Selection Act [30 ILCS 535].  Such procurements are not subject to the procedures for other professional services established in the Code or this Part.

e)         Conditions for Use of Competitive Selection Procedures

Except as authorized under Section 20-25 (Sole Source Procurement) or Section 20-30 (Emergency Procurements) of the Code, these competitive selection procedures shall be used for all procurements of professional and artistic services of $20,000 or more.  Services of less than $20,000 and for a nonrenewable term of one year or less may be procured in accordance with Section 1500.2020 (Small Purchases) of this Part.

f)         Prequalification

The CPO may use the list of prequalified professional and artistic vendors maintained by CMS.  Persons may amend statements of qualifications at any time by filing a new statement.  Failure of a professional and artistic vendor to prequalify shall not be cause for rejection of a proposal provided that the responsive offeror supplies with its proposal all information defined by the prequalification process.

g)         Public Notice of Competitive Selection Procedures

1)         Notice of the need for professional and artistic services shall be made by the Procurement Officer in the form of a Request for Proposals.

2)         Notice shall be given as provided in Section 1500.2010 (Competitive Sealed Bidding) of this Part.

3)         Notice shall also be distributed to prequalified persons interested in performing the services required by the proposed contract.

h)         Request for Proposals

1)         Contents.  The Request for Proposals shall be in the form specified by the CPO and shall contain at least the following information:

A)        the type of services required;

B)        a description of the work involved;

C)        an estimate of when and for how long the services will be required;

D)        the type of contract to be used;

E)        a date by which proposals for the performance of the services shall be submitted;

F)         a statement of the minimum information that the proposal shall contain, which may, by way of example, include:

i)          the name of the offeror, the location of the offeror's principal place of business and, if different, the place of performance of the proposed contract;

ii)         if deemed relevant by the Procurement Officer, the age of the offeror's business and average number of employees over a previous period of time, as specified in the Request for Proposals;

iii)        the abilities, qualifications, and experience of all persons who would be assigned to provide the required services;

iv)        a listing of other contracts under which services similar in scope, size, or discipline to the required services were performed or undertaken within a previous period of time, as specified in the Request for Proposals;

v)         a plan explaining how the services will be performed;

G)        price (to be submitted in a separate envelope in the proposal package and not mentioned elsewhere in the proposal package); and

H)        the factors to be used in the evaluation and selection process and their relative importance.

2)         Evaluation.  Proposals shall be evaluated only on the basis of evaluation factors stated in the Request for Proposals.  Price will not be evaluated until ranking of all proposals and identification of the most qualified vendor.  The relative importance of the evaluation factors will vary according to the type of services being procured.  The minimum factors are:

A)        the plan for performing the required services;

B)        ability to perform the services as reflected by technical training and education, general experience, specific experience in providing the required services, and the qualifications and abilities of personnel proposed to be assigned to perform the services;

C)        the personnel, equipment, and facilities to perform the services currently available or demonstrated to be made available at the time of contracting; and

D)        a record of past performance of similar work.

i)          Pre-Proposal Conference

A pre-proposal conference, if appropriate, shall be conducted in accordance with Section 1500.2010(f) (Pre-Bid Conference).  Such a conference may be held anytime prior to the date established for submission of proposals.

j)          Delivery, Receipt and Handling of Proposals

1)         Proposals shall be submitted to and opened by the CPO.

2)         Public Opening

A)        Proposals and modifications shall be opened publicly at the time, date and place designated in the Request for Proposals.

B)        Opening shall be witnessed by a State employee or by any other person present, but the person opening proposals shall not serve as witness.  A record shall be prepared that shall include the name of each offeror, the number of modifications received, if any, and a description sufficient to identify the supply or service item offered. The record of proposals shall be open to public inspection after award of the contract.

C)        Proposals and modifications shall be opened in a manner designed to avoid disclosing contents to competitors.  Only State personnel and contractual agents may review the proposals prior to award.

D)        Proposals of offerors who are not awarded the contract shall not be open to public inspection.

k)         Discussions

1)         Discussions Permissible.  The Procurement Officer may conduct discussions with any offeror to:

A)        determine in greater detail  such offeror's qualifications; and

B)        explore with the offeror the scope and nature of the required services, the offeror's proposed method of performance, and the relative utility of alternative methods of approach. The Procurement Officer may allow changes to the proposal based on those discussions.

2)         No Disclosure of Information.  Discussions shall not disclose any information derived from proposals submitted by other offerors, and the agency conducting the procurement shall not disclose any information contained in any proposals until after award of the proposed contract has been made.  The proposal of the offeror awarded the contract shall be open to public inspection except as otherwise provided in the contract.

l)          Selection of the Best Qualified Offerors

After conclusion of validation of qualifications, evaluation, and discussion, the Procurement Officer shall rank the acceptable offerors in the order of their respective qualifications.

m)        Evaluation of Pricing Data

Pricing submitted for all proposals timely submitted shall be opened and ranked.

1)         If the low price is submitted by the most qualified vendor, the Procurement Officer may award to that vendor.

2)         If the price of the most qualified vendor is not low and if it does not exceed $25,000, the Procurement Officer may award to that vendor.

3)         If the price of the best qualified vendor exceeds $25,000, the Procurement Officer must state why a vendor other than the low priced vendor was selected and that determination shall be published in the Bulletin.

n)         Negotiation and Award of Contract

1)         General.  The Procurement Officer shall attempt to negotiate a contract with the best qualified offeror for the required services at fair and reasonable compensation. The Procurement Officer may, in the interest of efficiency, negotiate with other vendors, while negotiating with the best qualified vendor.

2)         Elements of Negotiation. At a minimum, contract negotiations shall be directed toward:

A)        making certain that the offeror has a clear understanding of the scope of the work, specifically, the essential requirements involved in providing the required services;

B)        determining that the offeror will make available the necessary personnel and facilities to perform the services within the required time; and

C)        agreeing upon compensation that is fair and reasonable, taking into account the estimated value of the required services and the scope, complexity, and nature of such services.

3)         Successful Negotiation of Contract with Best Qualified Offeror

A)        If compensation, contract requirements, and contract documents can be agreed upon with the best qualified offeror, the contract shall be awarded to that offeror, unless the procurement is canceled.

B)        Compensation must be determined in writing to be fair and reasonable.  Fair and reasonable compensation shall be determined by the Procurement Officer based on the circumstances of the particular procurement, including but not limited to the nature of the services needed, qualifications of the offerors, consideration of range of prices received in the course of the procurement, and the agency's identified budget.

4)         Failure to Negotiate Contract with Best Qualified Offeror

A)        If compensation, contract requirements, or contract documents cannot be agreed upon with the best qualified offeror, a written record stating the reasons therefore shall be placed in the file.  The Procurement Officer shall advise such offeror of the termination of negotiations.

B)        Upon failure to negotiate a contract with the best qualified offeror, the Procurement Officer may enter into negotiations with the next most qualified offeror.

C)        Nothing in this Section shall prohibit the Procurement Officer from making a selection that represents the best value, qualifications, price and other relevant factors established in the request for proposals being considered. The Procurement Officer may, in considering best value, determine the proposal from a fully qualified vendor that submitted the lowest price to be the best value without further evaluation.

o)         Multiple Awards

The Procurement Officer may enter into negotiations with the next most qualified vendor or vendors when the purchasing agency has a need that requires multiple vendors under contract.

p)         The Procurement Officer procuring professional and artistic services, including those under an exception described in subsection (e), shall provide to CMS the information necessary for publication in the Bulletin.

q)         Notice of Award

Written notice of award shall be public information and made a part of the contract file. Publication shall be in the next available issue of the Bulletin.

r)          Small, sole source and emergency procurements of professional and artistic services under the jurisdiction of an SPO do not require approval of the CPO to proceed.  Any notices shall be published by the SPO.

s)         Post Performance Review

The Purchasing Officer shall provide a synopsis of the contract and shall rate the vendor's performance.  A copy of the completed form shall be maintained in the files of the CPO.

Section 1500.2036  Other Methods of Source Selection

a)         Split Award

1)         An award of a definite quantity requirement may be split between bidders or offerors.  Each portion shall be for a definite quantity and the sum of the portions shall be the total definite quantity required.  A split award may be used only when award to more than one bidder or offeror for different amounts of the same item are necessary to obtain the total quantity or the required delivery.

2)         The Procurement Officer shall make a written determination setting forth the reasons for the split award, which determination shall be made a part of the procurement file.

b)         Multiple Award

1)         A multiple award is an award of an indefinite quantity contract to more than one bidder or offeror when the State is obligated to order all of its actual requirements from those vendors.

2)         A multiple award may be made when award to two or more bidders or offerors for similar products is necessary for adequate delivery, service, or product compatibility.  Any multiple award shall be made in accordance with the provisions of Section 1500.2010 (Competitive Sealed Bidding), Section 1500.2015 (Competitive Sealed Proposals), Section 1500.2020 (Small Purchases), and Section 1500.2030 (Emergency Procurements), as applicable. Awards shall not be made for the purpose of simply dividing the business or to select products or suppliers to allow for user preference unrelated to utility or economy.  Any such awards shall be limited to the least number of suppliers necessary to meet the valid requirements of State agencies.

3)         The OG shall reserve the right to take bids separately if a particular quantity requirement arises that exceeds its normal requirement or an amount specified in the contract.

4)         If a multiple award is anticipated, the solicitation shall state this fact as well as the criteria for award.

5)         In a multiple award situation, one vendor may be designated as the primary recipient of orders.  The other awardees may receive orders in the event the primary vendor is unable to deliver or for other reasons as determined by the Procurement Officer.

c)         Term and Condition Contracts

1)         A term and condition contract contains agreed contractual terms and conditions established for the convenience of the parties to be used in conjunction with a subsequent procurement and processed in accordance with the requirements of the Code and this Part.  A term and condition contract is not a procurement.  It creates no obligation on the part of the OG to procure from the vendor.

2)         Orders may be placed against term and condition contracts without use of any prescribed method of source selection for convenience of processing sole source, emergency or small procurements.

d)         Auction

Purchases may be made at auction in accordance with the procedural requirements applicable to the particular auction.  Notice and competition is not required and the amount payable shall be the amount bid and accepted plus any required buyer's premium.

e)         Federal Requirements

The Procurement Officer receiving federal aid funds, grants or loans or otherwise subject to federal entity requirements may conduct procurements in accordance with federal requirements that are necessary to receive or maintain those federal aid funds, grants or loans or to remain in compliance with federal requirements.

f)         Donations

1)         When a procurement will have the majority of funding from a donation, the terms of which donation require use of particular procurement or contracting procedures, the Procurement Officer may follow those procedures, but shall follow the Code and this Part whenever practicable.

2)         Donations may be acknowledged by the donee agency in a manner appropriate to the type of donation and the program activity associated with the donation.  Acknowledgment may include, but need not be limited to, public announcement at the event or in donee agency publications, and inviting the donor to attend the program activity associated with the donation.

Section 1500.2037  Tie Bids and Proposals

a)         Tie bids or proposals are those from responsive and responsible vendors that are identical in price or evaluation and represent the low price.

b)         Tie bids or proposals will be treated as follows:

1)         If the tied vendors include an Illinois resident vendor, the Illinois resident vendor shall be given the award.  In all other situations, including if two or more Illinois resident bidders are tied, the decision shall be made in accordance with this subsection (b). "Illinois resident vendor" has the meaning given in Section 1500.4510 (Resident Bidder Preference) of this Part.

2)         If there is a significant difference in responsibility (including ability to provide the service or deliver in the quantity and at the time required), the award will be made to the vendor who is deemed to be the most responsible.  A vendor who has had experience in contracting with the State shall be given additional consideration in determining responsibility if the Procurement Officer determines that dealing with a vendor that has knowledge of State requirements, contracts, job sites, payment practices and such other factors and with which there has been favorable past experience increases the likelihood of successful performance.

3)         If there is no significant difference in responsibility, but there is a difference in the quality of the supplies or services offered, the vendor offering the best quality will be accepted.

4)         If there is no significant difference in responsibility and no difference in quality of the supplies or services offered, the vendor offering the earliest delivery time will be accepted in any case in which the solicitation specified that the needs of the agency require delivery as early as possible.

5)         If the bids or proposals are equal in every respect, the award shall be made by lot unless the Procurement Officer determines that splitting the award among two or more of the tied bidders is in the best interest of the State. Awards may be split if all affected bidders agree, if splitting is feasible given the type of supplies or services requested, if overall pricing would not increase, if delivery would be better ensured, or if necessary or desirable to promote future competition.

c)         Record

Each SPO shall provide a report to the CPO on a quarterly basis of all procurements on which tie bids or proposals were received.  The report shall provide at least the following information:

1)         the identification number of the solicitation;

2)         a description of what was procured; and

3)         a listing of all the bidders and the prices submitted.

Section 1500.2038  Mistakes

a)         General

Corrections to bids, proposals or other procurement processes are allowed, but only to the extent not contrary to the best interest of the State or the fair treatment of other bidders.

b)         Mistakes Discovered Before Opening

A vendor may correct mistakes discovered before the time and date set for opening by withdrawing or correcting as provided in this Section.

c)         Confirmation of Mistake

When the Procurement Officer knows or has reason to conclude that a mistake has been made, such officer shall request the vendor to confirm the information.  Situations in which confirmation should be requested include obvious or apparent errors on the face of the document or a price unreasonably lower than the others submitted.  If the vendor alleges a mistake, the bid or proposal may be corrected or withdrawn if the conditions set forth in this Section, as applicable, are met.

d)         Mistakes in Bids Discovered After Opening but Before Award

This subsection (d) sets forth procedures to be applied in situations in which mistakes in bids are discovered after the time and date set for bid opening but before award.

1)         Minor informalities.  A minor informality or irregularity is one that is a matter of form or pertains to some immaterial or inconsequential defect or variation of a bid from the exact requirement of the Invitation for Bids, the correction or waiver of which would not be prejudicial to the State (i.e., the effect on price, quality, quantity, delivery, or contractual conditions is negligible). The Procurement Officer shall waive such informalities or allow the bidder to correct them depending on which is in the best interest of the State.  Examples of minor informalities as to form include the failure of a bidder to:

A)        return the number of signed bids required by the Invitation for Bids;

B)        acknowledge receipt of an amendment to the Invitation for Bids, but only if:

i)          it is clear from the bid that the bidder received the amendment and intended to be bound by its terms; or

ii)         the amendment involved had a negligible effect on price, quantity, quality, or delivery.

2)         Mistakes Where Intended Correct Bid Is Evident.  If the mistake and the intended correct bid are clearly evident on the face of the bid document, the bid shall be corrected to the intended correct bid and may not be withdrawn.  Examples of mistakes that may be clearly evident on the face of the bid document are typographical errors, errors in extending unit prices, transposition errors, and arithmetical errors.

3)         Mistakes Where Intended Correct Bid Is Not Evident.  A bidder may be permitted to withdraw a low bid if:

A)        a mistake is clearly evident on the face of the bid document but the intended correct bid is not similarly evident; or

B)        the bidder submits proof of evidentiary value that clearly and convincingly demonstrates that a mistake was made.

e)         Mistakes in Proposals Discovered After Receipt, but Before Award

This subsection (e) sets forth procedures to be applied in four situations in which mistakes in proposals are discovered after receipt of proposals but before award.

1)         During Discussions; Prior to Best and Final Offers.  Once discussions are commenced with any offeror or after best and final offers are requested, any offeror may freely correct any mistake prior to the date set for conclusion of discussions or for receipt of best and final offers.

2)         Minor Informalities.  Minor informalities, unless otherwise corrected by an offeror as provided in this Section, shall be treated as they are under subsection (d).

3)         Correction of Mistakes.  If discussions are not held or if the best and final offers upon which award will be made have been received, mistakes may be corrected and the intended correct offer considered only if:

A)        the mistake and the intended correct offer are clearly evident on the face of the proposal, in which event the proposal may not be withdrawn; or

B)        the mistake is not clearly evident on the face of the proposal, but the offeror submits adequate proof that clearly and convincingly demonstrates both the existence of a mistake and the intended correct offer, and such correction would not be contrary to the fair and equal treatment of other offerors.

4)         Withdrawal of Proposals.  If discussions are not held, or if the best and final offers upon which award will be made have been received, the offeror may be permitted to withdraw the proposal if:

A)        the mistake is clearly evident on the face of the proposal and the intended correct offer is not;

B)        the offeror submits proof of evidentiary value that clearly and convincingly demonstrates that a mistake was made but does not demonstrate the intended correct offer; or

C)        the offeror submits adequate proof that clearly and convincingly demonstrates the intended correct offer, but to allow corrections would be contrary to the fair and equal treatment of other offerors.

f)         Mistakes Discovered After Award

Mistakes shall not be corrected after award of the contract except where the Procurement Officer finds it would be unconscionable (e.g., if the mistake resulted in a windfall to the State) not to allow the mistake to be corrected.

g)         Determinations Required

When a proposal is corrected or withdrawn, or correction or withdrawal is denied, a written determination shall be prepared showing that relief was granted or denied in accordance with this Part.  The Procurement Officer shall prepare the determination.

Section 1500.2040  Cancellation of Solicitations; Rejection of Bids or Proposals

a)         Scope of this Section

The provisions of this Section shall govern the cancellation of any solicitations whether issued by the State under competitive sealed bidding, competitive sealed proposals, small purchases, or any other source selection method, and rejection of bids or proposals in whole or in part.

b)         Policy

Any solicitation may be canceled when the Procurement Officer believes cancellation to be in the State's best interest.  Nothing shall compel the award of a contract.

c)         Cancellation of Solicitation; Rejection of All Bids or Proposals Prior to Opening

1)         As used in this Section, "opening" means the date set for opening of bids, receipt of unpriced technical offers in multi-step sealed bidding, or receipt of proposals in competitive sealed proposals.

2)         Prior to opening, a solicitation may be canceled in whole or in part when the Procurement Officer determines in writing that such action is in the State's best interest for reasons including, but not limited to:

A)        the OG no longer requires the supplies or services;

B)        the OG no longer can reasonably expect to fund the procurement; or

C)        proposed amendments to the solicitation would be of such magnitude that a new solicitation is desirable.

3)         When a solicitation is canceled prior to opening, notice of cancellation shall be sent to all businesses that responded to the solicitation.

4)         The notice of cancellation shall:

A)        identify the solicitation;

B)        briefly explain the reason for cancellation; and

C)        where appropriate, explain that an opportunity will be given to compete on any resolicitation or any future procurements of similar supplies or services.

d)         Cancellation of Solicitation; Rejection of All Bids or Proposals After Opening

1)         After opening but prior to award, all bids or proposals may be rejected in whole or in part when the Procurement Officer determines in writing that such action is in the State's best interest.  Such reasons may include, but are not limited to:

A)        the supplies or services being procured are no longer required;

B)        ambiguous or otherwise inadequate specifications were part of the solicitation;

C)        the solicitation did not provide for consideration of all factors of significance to the State;

D)        prices exceed available funds and it would not be appropriate to adjust quantities to come within available funds;

E)        all otherwise acceptable bids or proposals received are at clearly unreasonable prices; or

F)         there is reason to question whether the bids or proposals may not have been independently arrived at in open competition, may have been collusive, or may have been submitted in bad faith.

2)         When the solicitation is canceled or when all bids or proposals are rejected, all vendors who submitted bids or proposals shall be sent a notice upon request informing them of the reasons for the cancellation or rejection.

e)         Documentation

The reasons for cancellation or rejection shall be made a part of the procurement file and shall be available for public inspection.

f)         Rejection of Individual Bids or Proposals

1)         General.  This subsection (f) applies to rejections of individual bids or proposals in whole or in part.

2)         Notice in Solicitation.  Each solicitation shall provide that any bid or proposal may be rejected in whole or in part when in the best interest of the State as provided in this Section.

3)         Reasons for Rejection.  Reasons for rejecting a bid or proposal may include, but are not limited to:

A)        the business that submitted the bid or proposal is nonresponsible as determined under Section 1500.2045 (Responsibility) of this Part;

B)        the bid or proposal is not responsive, that is, it does not conform in all material respects to the solicitation;

C)        the proposal ultimately (that is, after any opportunity has passed for altering or clarifying the proposal) fails to meet the announced requirements of the State in some material respect;

D)        the supply or  service item offered in the bid is unacceptable by reason of its failure to meet the requirements of the specifications or permissible alternates or other acceptability criteria set forth in the Invitation for Bids; or

E)        the proposed price is clearly unreasonable.

4)         Notice of Rejection.  Upon request, unsuccessful bidders or offerors shall be advised of the reasons for rejection.

Section 1500.2043  Suppliers

a)         The OG may contract with any qualified source of supply, but should give preference to Directed Sources, and should consider the following Special Sources.

b)         Directed Sources − State-Produced Supplies or Services

1)         Correctional Industries.  The CPO, after consulting with the Department of Corrections, shall determine the type and extent of the preference OG shall give to supplies produced or services performed by Correctional Industries.  Factors to be considered in determining the preference include, but are not limited to, the ability of Correctional Industries to meet the OG's requirements, the price charged and the reason for the Correctional Industries program.

2)         Central Services.  Supplies and services available from the program operations of CMS shall be utilized unless the CPO authorizes procurement from other sources.

c)         Special Sources

1)         Prior to any equipment procurement, the OG will consider property available from the State and Federal Surplus Warehouses, which are under the jurisdiction of CMS.

2)         Various supplies and services are available from qualified workshops for the disabled and procurement from these workshops is encouraged.  Notice and competition is not required pursuant to Section 45-35 of the Code.

3)         Various supplies and services are available from State agencies and other governmental units.  These may be procured without notice and competition.

Section 1500.2045  Responsibility

a)         Application

Contracts are to be made only with responsible vendors unless no responsible vendor is available to meet the State's needs.  If there is doubt about responsibility, and if a bond or other security would adequately protect the State's interests, then that vendor may be awarded a contract upon receipt of the bond or other security.

b)         Standards of Responsibility

1)         Standards.  Factors to be considered in determining whether the standard of responsibility has been met may include, but not limited to, whether a prospective vendor:

A)        has available the appropriate financial, material, equipment, facility, and personnel resources and expertise (or the ability to obtain them) necessary to indicate its capability to meet all contractual requirements (the Procurement Officer may designate a level of financial resource below which the vendor will be deemed "not responsible");

B)        is able to comply with required or proposed delivery or performance schedules, taking into consideration all existing commercial and governmental commitments;

C)        has a satisfactory record of performance.  Vendors who are or have been deficient in current or recent contract performance in dealing with the State or other customers may be deemed "not responsible" unless the deficiency is shown to have been beyond the reasonable control of the vendor;

D)        has a satisfactory record of integrity and business ethics. Vendors who are under investigation or indictment for criminal or civil actions that bear on the particular procurement or that create a reasonable inference or appearance of a lack of integrity on the part of the vendor may be declared not responsible for the particular procurement;

E)        is qualified legally to contract with the State;

F)         has supplied all necessary information in connection with the inquiry concerning responsibility;

G)        has a current Public Contracts number from the Illinois Department of Human Rights, pursuant to 44 Ill. Adm. Code 750.210, if required.  Proof of application prior to opening of bids or proposals will be sufficient for an initial determination;

H)        pays prevailing wages, if required by law; and

I)         is current in payment of all State of Illinois taxes, including the unemployment insurance tax.

2)         Information Pertaining to Responsibility.  The prospective vendor shall supply information requested by the Procurement Officer concerning the responsibility of such vendor.  The State may supplement this information from other sources and may require additional documentation at any time. If such vendor fails to supply the requested information, the Procurement Officer shall base the determination of responsibility upon any available information, or may find the prospective vendor nonresponsible.

c)         Ability to Meet Standards

The prospective vendor may demonstrate the availability of necessary financing, equipment, facilities, expertise, and personnel by submitting upon request:

1)         evidence that such vendor possesses such necessary items;

2)         acceptable plans to subcontract for such necessary items; or

3)         a documented commitment from, or explicit arrangement with, a satisfactory source to provide the necessary items.

d)         Duty Concerning Responsibility

Before awarding a contract, the Procurement Officer must be satisfied that the prospective vendor is responsible.  Responsibility can be proven until time of  contract execution unless the solicitation or other law requires that the vendor submit information necessary to determine responsibility by a stated date or time.

e)         Written Determination of Nonresponsibility Required

If a vendor who otherwise would have been awarded a contract is found nonresponsible, a written determination of nonresponsibility setting forth the basis of the finding shall be prepared by the CPO or the SPO.   The final determination shall be made part of the procurement file.

f)         Bond for Responsibility

Vendors not having a history of performance may be considered  responsible if no other disqualifying factors exist.  A bond or other security may be required of such vendors.

g)         Affiliated Companies

Vendors who are newly formed business concerns having substantially the same owners, officers, directors, or beneficiaries as a previously existing vendor that has been determined not responsible will also be determined not to be responsible unless the new organization can prove it was not set up for the purpose of avoiding an earlier determination of nonresponsibility.

Section 1500.2047  Security Requirements

a)         A Procurement Officer may require that a vendor furnish bid, proposal, or performance security on OG contracts.  Whenever security is required, except as provided herein, the procurement document will clearly indicate the type and amount of security.

b)         Security, unless otherwise specified, may be in the form of cashier's check, certified check, money order, irrevocable letter of credit or bond.  Any bond must be issued by a surety company authorized to do business in the State of Illinois.

c)         Unless the amount is set by law, the Procurement Officer will determine the amount, in dollars or percentage of contract price, that will adequately protect the State's interests.  That amount will vary depending on the type of procurement and the risks and potential losses associated with delay or failure to complete the project, and for other such reasons.

d)         A vendor may be required to furnish up to 100% performance security at any time during contract performance and at its cost, if it appears that delivery or production schedules cannot be met, quality is poor, responsibility is questioned and for similar reasons.

e)         Bid or proposal security will be returned to unsuccessful vendors as soon after award as possible.  The bid or proposal security of the successful vendor will be returned after contracts have been signed and performance security, if any, submitted.  Performance security will be returned upon full performance.

Section 1500.2050  Specifications

a)         The OG may use specifications or qualified products lists established or used by CMS.

b)         Brand Name or Equal Specification

1)         Brand name or equal specifications may be used when the Procurement Officer determines in writing that:

A)        no specification for a common or general use specification or qualified products list is available;

B)        time does not permit the preparation of another form of specification, not including a brand name specification;

C)        the nature of the product or the nature of the State's requirement makes use of a brand name or equal specification suitable for the procurement; or

D)        use of a brand name or equal specification is in the State's best interest.

2)         Brand name or equal specifications shall seek to designate more than one brand as "or equal", and shall further state that substantially equivalent products to those designated will be considered for award.

3)         Unless the Procurement Officer determines that the essential characteristics of the brand names included in the specifications are commonly known in the industry or trade, brand name or equal specifications shall include a description of the particular design, functional, or performance characteristics that are required.

4)         Where a brand name or equal specification is used in a solicitation, the solicitation shall contain explanatory language that the use of a brand name is for the purpose of describing the standard of quality, performance, and characteristics desired and is not intended to limit or restrict competition.  "Or equal" submissions will not be rejected because of minor differences in design, construction or features that do not affect the suitability of the product for its intended use.  Burden of proof that the product is equal is on the bidder.

c)         Brand Name Only Specification

1)         Determination.  A brand name only specification may be used only when the Procurement Officer makes a written determination that only the identified brand name item or items will satisfy the State's needs.

2)         Use.  Brand name alone may be specified in order to fill medical prescription needs, to stock State retail-type operations, to ensure compatibility in existing systems, to preserve warranty, to ensure maintenance, or as authorized in writing by the CPO.  An agency may, pursuant to an authorized competitive procedure, select a particular vendor to provide supplies or services for a specified period of time, and for that period the supplier of additional, related and updated supplies and services may be limited to the selected vendor or the brand initially selected.

3)         Competition.  The Procurement Officer shall seek to identify sources from which the designated brand name item or items can be obtained and shall solicit such sources to achieve whatever degree of competition is practicable.  If only one source can supply the requirement, the procurement shall be made under Section 1500.2025 (Sole Economically Feasible Source Procurement) of this Part.

4)         Small and Emergency Procurements.  Brand name only specifications may be used when procuring items under the small (see Section 1500.2020 of this Part) and emergency (see Section 1500.2030 of this Part) provisions of this Part.

d)         Proven Products

The supply or service may be rejected if it has not been offered to other governmental or commercial accounts for at least one year.  Specifications may require that the supply or services have been used in business or industry for a specified period of time to be considered.

Section 1500.2055  Types of Contracts

a)         Scope

This Section contains descriptions of types of contracts and limitations as to when they should be utilized by the State in its procurements. Types of contracts not mentioned in this Section may also be utilized.

b)         Prohibition of Cost-Plus-a-Percentage-of-Cost Contracting

The cost-plus-a-percentage-of-cost contract is prohibited by Section 20-55 of the Illinois Procurement Code.  This type of contracting may not be used alone or in conjunction with an authorized type of contract.  A cost-plus-percentage-of-cost contract is one in which the vendor selects the supply or service on which the vendor's percentage is applied.

1)         A percentage mark-up from an agreed price list is not a cost-plus-a-percentage-of-cost contract.

2)         A percentage mark-up from the price of a supply or service selected by the State or another vendor under contract to the State is not a cost-plus-a-percentage-of-cost contract.

c)         Types of Fixed-Price Contracts

1)         Firm Fixed-Price Contract.  A firm fixed-priced contract provides a price that is not subject to adjustment because of variations in the vendor's cost of performing the work specified in the contract.

2)         Fixed-Price Contract with Price Adjustment

A)        A fixed-price contract with price adjustment provides for variation in the contract price under special conditions defined in the contract, other than customary provisions authorizing price adjustments due to modifications to the work.  The formula or other basis by which the adjustment in the vendor's price can be made shall be specified in the solicitation and the resulting contract.  Adjustment allowed may be upward or downward only, or both upward and downward.  Examples of conditions under which adjustments may be provided in fixed-price contracts are:

i)          changes in the vendor's labor agreement rates as applied to an industry or area (such as are frequently found in contracts for the purchase of coal);

ii)         changes due to rapid and substantial price fluctuations that can be related to an accepted index (such as contracts  for gasoline, heating oils, and dental gold alloy); and

iii)        in requirement contracts, where a vendor is selected to provide all of the State's needs for the items specified in the contract, when a general price change applicable to all customers occurs, or when a general price change alters the base price (such as a change in a manufacturer's published price list or posted price to which a fixed discount is applied pursuant to the contract to determine the contract price).

B)        If the contract permits unilateral action by the vendor to bring about the condition under which a price increase may occur, the State shall have the right to reject the price increase and terminate without cost the future performance of the contract.

d)         Cost-Reimbursement Contracts

1)         Determination Prior to Use

A)        A cost-reimbursement type contract may be used only when the Procurement Officer determines in writing that such a contract is likely to be less costly to the State than any other type or that it is impracticable to obtain the items.

B)        Reimbursement of travel expenses in accordance with applicable travel control board regulations is authorized without further determinations.

2)         Cost Contract.  A cost contract provides that the vendor will be reimbursed for allowable costs incurred in performing the contract, but will not receive a fee.

3)         Cost-Plus-Fixed-Fee Contract.  This is a cost-reimbursement type contract that provides for payment to the vendor of an agreed fixed fee in addition to reimbursement of allowable incurred costs.  The fee is established at the time of contract award and does not vary if the actual cost of contract performance is greater or less than the initial estimated cost established for such work.  Thus, the fee is fixed but not the contract amount because the final contract amount will depend on the allowable costs reimbursed.  The fee is subject to adjustment only if the contract is modified to provide for an increase or decrease in the scope of work specified in the contract.

4)         Cost Incentive Contracts

A)        General.  A cost-incentive type of contract provides for the reimbursement to the vendor of allowable costs incurred up to the ceiling amount and establishes a formula whereby the vendor is rewarded for performing at less than target cost (that is, the parties' agreed best estimate of the cost of performing the contract will vary inversely with the actual, allowable costs of performance and consequently is dependent on how effectively the vendor controls cost in the performance of the contract).

B)        Fixed-Price Cost-Incentive Contract.  In a fixed-price cost-incentive contract, the parties establish at the outset a target cost, a target profit (that is, the profit that will be paid if the actual cost of performance equals the target cost), a formula that provides a percentage increase or decrease of the target profit depending on whether the actual cost of performance is less than or exceeds the target cost, and a ceiling price.  After performance of the contract, the actual cost of performance is arrived at based on the total incurred allowable costs as provided in the contract.  The final contract price is then established in accordance with the formula using the actual cost of performance.  The final contract price may not exceed the ceiling price.  The vendor is obligated to complete performance of the contract, and, if actual costs exceed the ceiling price, the vendor suffers a loss.

C)        Cost-Reimbursement Contract with Cost-Incentive Fee.  In a cost-reimbursement contract with cost-incentive fee, the parties establish at the outset a target cost; a target fee; a formula for increase or decrease of fee depending on whether actual cost of performance is less than or exceeds the target cost, with maximum and minimum fee limitations; and a cost ceiling that represents the maximum amount that the State is obligated to reimburse the vendor.  The vendor continues performance until the work is complete or costs reach the ceiling specified in the contract, including any modification thereof, whichever first occurs.  After performance is complete or costs reach the ceiling, the total incurred, allowable costs reimbursed as provided in the contract are applied to the formula to establish the incentive fee payable to the vendor.

e)         Performance Incentive Contracts

In a performance incentive contract, the parties establish at the outset a pricing basis for the contract, performance goals, and a formula that varies the profit or the fee if the specified performance goals are exceeded or not met.  For example, early completion may entitle the vendor to a bonus, while late completion may entitle the State to a price decrease.

f)         Time and Materials Contracts; Labor Hour Contracts

Time and materials contracts provide an agreed basis for payment for materials supplied and labor performed.  Labor hour contracts provide only for the payment of labor performed.  Such contracts shall, to the extent possible, contain a stated ceiling or an estimate that shall not be exceeded without prior State approval.

g)         Definite Quantity and Indefinite Quantity Contracts

1)         Definite Quantity.  A definite quantity contract is a fixed-price contract that provides for delivery of a specified quantity of supplies or services either at specified times or when ordered.

2)         Indefinite Quantity.  An indefinite quantity contract is a contract for an indefinite amount of supplies or services to be furnished at specified times, or as ordered, that establishes unit prices of a fixed-price type.  Generally an approximate quantity or the best information available as to quantity is stated in the solicitation. The contract may provide a minimum quantity the State is obligated to order and may also provide for a maximum quantity provision that limits the State's obligation to order.

3)         Requirements Contracts.  A requirements contract is an indefinite quantity contract for supplies or services that specifically obligates the State to order all the actual requirements of designated State agencies during a specified period of time.

h)         Leases

A lease is a contract for the use of supplies or real property under which title will not pass to the State at any time, except pursuant to an option to purchase.

i)          Recovery Contracts

Contracts may provide for payment to the vendor of a percentage of the amount the vendor recovers or collects on behalf of the State.  The percentage may be fixed or may vary depending on amount of recovery or other factors, and the percentage may be paired with a fixed price or cost reimbursement method.

j)          Option Provisions

1)         Contract Provision.  When a contract is to contain an option for renewal, extension, or purchase, notice of such provision shall be included in the solicitation.  These options may be exercised without taking other procurement action when the option is established for exercise at the OG's option, and there is no material change in the terms and conditions or any such change is dependent on a fixed formula or standard established in the original contract.

2)         Lease with Purchase Option.  A purchase option in a lease may be exercised only if the lease containing the purchase option was awarded under competitive sealed bidding or competitive sealed proposals, the leased supply or facility is the only supply or facility that can meet the State's requirements, the purchase option price is less than the small purchase limit or emergency conditions exist.

k)         State Produced Supplies and Services

Notwithstanding any provision in any contract, supplies or services available from the State's own programs, such as Correctional Industries, may be ordered without violating any contract.

l)          Extraordinary Quantities

Notwithstanding any provision in any contract, the State reserves the right to take bids separately if a particular quantity requirement arises that exceeds the State's normal needs or ordering requirements.

m)        Energy Conservation

The CPO may authorize an IFB, RFP or sole source negotiation for energy conservation measures whereby the OG would make payment based on utility cost savings.  Such contract shall require a clearly defined baseline of energy usage and method of measuring cost savings taking into account at least differing weather conditions, changes in facility, usage and cost of energy.

Section 1500.2060  Duration of Contracts − General

a)         General

1)         A multi-term contract for a term of up to 10 years is authorized when determined by the Procurement Officer to be in the best interest of the State.

2)         The length of the payment term of bonds issued by or on behalf of a State agency shall be limited as provided in the statute authorizing the issuance of the bonds.

3)         A software license may have a term longer than 10 years, including for a perpetual term, provided the payment term is limited to no more than 10 years.

b)         The contractual obligation of both parties in each fiscal period succeeding the first is subject to appropriation and availability of funds.  The contract shall provide that, in the event that funds are not available for any succeeding fiscal period, the remainder of such contract shall be canceled without penalty to, or further payment being required by, the State.  This provision applies to only those contracts that are funded in whole or in part by funds appropriated by the Illinois General Assembly or other governmental entity.

c)         Conditions for Use of Multi-Term Contracts

A multi-term contract may be used when:

1)         special production of definite quantities or the furnishing of long-term services is required to meet State needs; or

2)         a multi-term contract will serve the best interests of the State by encouraging effective competition or otherwise promoting economies in State procurement.

d)         Multi-Term Contract Procedure

The solicitation shall state:

1)         the proposed term;

2)         the amount of supplies or services required for the proposed contract period;

3)         the type of pricing requested (e.g., firm for term);

4)         how award will be determined.

e)         Renewals

1)         When the original procurement specifically called for an initial term plus renewals, the renewals may be exercised without further procurement activity, provided the initial term and the exercised renewals may not exceed 10 years, the terms and conditions do not change except as provided in the contract (such as price escalations tied to an index) and the option is reserved solely to the State or is by mutual agreement.  A renewal option that requires modification to a material term or condition of the contract shall be treated as a new contract and shall be subject to competitive procurement procedures established by the Code and this Part.

2)         When the original procurement was silent as to renewals, the renewal must be procured using one of the methods of source selection authorized by the Code and this Part.  This renewal shall start a new term not to exceed 10 years.

3)         When a renewal will result in the total term, counting the initial term and any previous renewals, to exceed 10 years, the renewal must be procured using one of the methods of source selection authorized by the Code and this Part.  This renewal will start a new term that shall not exceed 10 years.

Section 1500.2560  Prevailing Wage

a)         For the following classifications and if competition exists, no bidder will be awarded a contract unless its employees are paid wages and benefits and are working under conditions prevalent in the location where the work is to be performed.

1)         Public works

2)         Printing

3)         Janitorial services, window washing and security guard services having a monthly contract price of at least $200 or a yearly price of at least $2,000.

b)         Prevailing wage and conditions prevalent means the hourly wage rate, overtime, holiday pay, pension, welfare, premium differential, vacation pay and other benefits received by employees and the environmental conditions under which they work.

c)         Prevailing Wage Rates

1)         Prevailing wage rates, benefits and conditions will be those in effect on the first date of the contract, provided that, if the rate changes during the contract term and the amount of change is known before execution of the contract, then the contract rate will vary in like amount.

2)         If the change in the collective bargaining agreement cannot be determined in advance, the contract will be changed by the amount of the change in wage rate and all components of price that are dependent on the usage rate, such as payroll taxes, worker's compensation insurance, vacation, sick days, and pension, provided that profit shall not increase due to prevailing wage increases.  The OG shall have the option to cancel the contract if the new price is unacceptable.

3)         If the initial prevailing wage, etc., cannot be determined prior to execution, contracts may be entered into and will remain valid for the stated term.

d)         If a collective bargaining agreement is in effect governing the type of printing, janitorial, window washing or security guard service sought, that agreement will define minimum wages, benefits and conditions that must be paid in order for a bidder to be considered responsible.

e)         For public works, location means the county where the physical work upon public works is performed, except that if there is not available in the county a sufficient number of competent skilled laborers, workers and mechanics to construct the public works efficiently and properly, "locality" includes any other county nearest the one in which the work or construction is to be performed and from which such persons may be obtained in sufficient numbers to perform the work.

f)         For printing contracts, location means one of the following areas:

1)         Location

A)        Cook County;

B)        Boone, Bureau, Carroll, Champaign, DeKalb, DeWitt, DuPage, Ford, Fulton, Grundy, Hancock, Henderson, Henry, Iroquois, Jo Daviess, Kane, Kankakee, Kendall, Knox, Lake, LaSalle, Lee, Livingston, Logan, Marshall, Mason, McDonough, McHenry, McLean, Mercer, Ogle, Peoria, Piatt, Putnam, Rock Island, Schuyler, Stark, Stephenson, Tazewell, Vermilion, Warren, Whiteside, Will, Winnebago, and Woodford counties;

C)        Adams, Alexander, Bond, Brown, Calhoun, Cass, Christian, Clark, Clay, Clinton, Coles, Crawford, Cumberland, Douglas, Edgar, Edwards, Effingham, Fayette, Franklin, Gallatin, Greene, Hamilton, Hardin, Jackson, Jasper, Jefferson, Jersey, Johnson, Lawrence, Macon, Macoupin, Madison, Marion, Massac, Menard, Monroe, Montgomery, Morgan, Moultrie, Perry, Pike, Pope, Pulaski, Randolph, Richland, Saline, Sangamon, Scott, Shelby, St. Clair, Union, Wabash, Washington, Wayne, White, and Williamson counties.

2)         Where the printing is performed in a plant outside the jurisdiction of this State, it shall be deemed produced in the Illinois locality in which delivery of the printing ordered is required to be made. Where such printing is required to be delivered to more than one Illinois locality, such printing shall be deemed produced in the Illinois locality to which the largest dollar volume of printing under the contract is to be delivered.

g)         For janitorial services, window washing and security guard services, location means the county in which the work is to be  performed.

h)         Prevailing wages, benefits and conditions will be determined by the Illinois Department of Labor.

Section 1500.2570  Equal Employment Opportunity; Affirmative Action

a)         Public Contracts.  Every party to a public contract and every eligible bidder shall:

1)         Refrain from unlawful discrimination and discrimination based on citizenship status in employment and undertake affirmative action to assure equality of employment opportunity and eliminate the effects of past discrimination;

2)         Comply with the procedures and requirements of the Department of Human Rights (DHR) regulations concerning equal employment opportunities and affirmative action;

3)         Provide such information, with respect to its employees and applicants for employment, and assistance as DHR may reasonably request;

4)         Have written sexual harassment policies that shall include, at a minimum, the following information:

A)        the illegality of sexual harassment;

B)        the definition of sexual harassment under State law;

C)        a description of sexual harassment, utilizing examples;

D)        the vendor's internal complaint process, including penalties;

E)        the legal recourse, investigative and complaint process available through DHR and the Human Rights Commission;

F)         directions on how to contact DHR and the Commission; and

G)        protection against retaliation as provided by Section 6-101 of the Illinois Human Rights Act (IHRA) [775 ILCS 5].

            A copy of the policies shall be provided to the Department of Human Rights upon request.

b)         Section 7-105A of the IHRA authorizes the Department of Human Rights to promulgate policies, rules and regulations to implement the provisions of the IHRA applicable to eligible bidders and public contractors.  DHR has promulgated rules, 44 Ill. Adm. Code 750, that establish public contractor and eligible bidder duties, obligations, and reporting requirements.  Those rules require that certain employers register with DHR in order to be eligible for the award of certain public contracts (44 Ill. Adm. Code 750.Appendix A).

Section 1500.2800  All Costs Included

The IFB or RFP and any resulting contract should define whether prices cover transportation, transit insurance, delivery, installation, taxes, and any other costs.

Section 1500.4505  Procurement Preferences

The procurement preferences identified in Article 45 of the Code must be considered in developing procurement documents, conducting evaluations and drafting contracts. When any such preference is utilized, the Invitation for Bids, Request for Proposals, or other procurement request shall identify the preference and the conditions associated withv such use.  Subsequent Sections of this Subpart M identify conditions for the use of certain of the statutory preferences.

Section 1500.4510  Resident Bidder Preference

a)         "Illinois resident vendor" as used in this Section means a person authorized to transact business in this State and having a bona fide establishment for transacting business within this State at which it was actually transacting business on the date when any competitive solicitation for a public contract was first advertised or announced, including a foreign corporation duly authorized to transact business in this State that has a bona fide establishment for transacting business within this State at which it was actually transacting business on the date when any competitive solicitation for a public contract was first advertised or announced.

b)         In breaking a tie, an Illinois resident vendor shall be given the award.

c)         In all procurements involving out-of-state vendors, the CPO shall consult a list of states with in-state preference that shall be maintained by CMS.

Section 1500.4530  Correctional Industries

a)         The CPO shall consult a listing, maintained by CMS, of supplies or services available from the Department of Corrections.

b)         Procurement Officers are authorized to procure from Corrections without seeking competition or giving public notice.

Section 1500.4535  Sheltered Workshops for the Disabled

a)         Use of Sheltered Workshop

The Procurement Officer may determine to contract with a sheltered workshop on the list maintained by CMS, and may do so without notice or competition.

b)         Conditions for Use

The CPO shall, in consultation with the State Use Committee created by the Code (Section 45-35), determine which articles, materials, services, food stuffs and supplies that are produced or manufactured by persons with disabilities in State use sheltered workshops shall be given preference by purchasing agencies procuring those items.  The CPO shall use procedures established by CMS for implementing this Section.

c)         Sheltered Workshop List

The CPO shall use the list of all qualified sheltered workshops and the supplies and services each qualified sheltered workshop provides, which is maintained by CMS.

d)         Pricing Approval

1)         While notice and competition is not required prior to contracting with a sheltered workshop, prices must be reasonable.  Whether a price is reasonable will be determined based upon current market prices, historical prices, prices received by other State agencies for similar supplies or services, the policy of the Code to promote procurements from sheltered workshops, and other such relevant factors.

2)         The State Use Committee, established under Section 45-35 of the Code, must approve contracts for reasonableness of price if:

A)        the supply or service would ordinarily be subject to competitive sealed bidding or competitive sealed proposals methods of source selection; or

B)        the supply or service is bid and the sheltered workshop is selected even though not the lowest responsible bidder.

3)         State Use Committee approval is not required if:

A)        the contract does not exceed the bid limit set in Section 1500.2020 of this Part and no bidding was conducted; or

B)        the contract is let to the sheltered workshop under a competitive procedure.

4)         When Committee approval is required, it will be given or denied in an expeditious manner so as not to disrupt procurement activities. Consideration will be at regularly scheduled meetings or through special telephone meetings conducted between regular meetings.

Section 1500.4540  Small Business

a)         Set-Aside

The CPO may determine categories of supplies or service procurements that will be set aside for small business located in Illinois.   The set-aside designation may be made for current and future procurements of a specific supply, service or construction, or for a class of like supplies, services or construction.  A set-aside designation may last indefinitely or for a stated period of time.

b)         Small Business List

The CPO may use the list, maintained by CMS or other appropriate State agency, of responsible vendors that meet the criteria of small business.  A business that fits the definition of small on the day of bid or proposal opening will be considered small for the duration of the contract.

c)         Required Use

If a Procurement Officer wishes to make a procurement covered by a set-aside designation, the solicitation must note responses are limited to those from  responsible small businesses.  Bids or proposals received from large businesses will be rejected as nonresponsive.

d)         Withdrawal of Set-Aside

If the Procurement Officer determines that acceptance of the best bid or proposal will result in the payment of an unreasonable price, the Procurement Officer shall reject all bids or proposals and withdraw the designation of small business set-aside for the procurement in question. When a small business set-aside is withdrawn, notification shall be published in the Illinois Procurement Bulletin with an explanation.  After withdrawal of the small business set-aside, the procurement shall be conducted in accordance with the limitations of the Code and this Part.

e)         Criteria for Small Business

Unless the CPO provides a definition for a particular procurement that reflects industrial characteristics, a small business is one:

1)         Independently owned and operated.

2)         Not dominant in its field of operations.  This means the business does not exercise a controlling or major influence in a kind of business activity in which a number of business concerns are primarily engaged.  In determining dominance, consideration shall be given to all appropriate factors, including volume of business, number of employees, financial resources, competitive status or position, ownership or control of materials, processes, patents, license agreements, facilities, sales territory, and nature of business activity.

3)         With annual sales for most recently ended fiscal year no greater than:

A)        $7,500,000 for wholesale business;

B)        $3,000,000 for construction business; or

C)        $1,500,000 for retail business.

4)         With no more than 250 employees if a manufacturing business.

A)        A manufacturing business shall calculate how many people it employs by determining its average full-time equivalent employment, based on the number of persons employed on a full-time, part-time, temporary or other basis, for its most recently ended fiscal year.

B)        If a manufacturing business has been in existence for less than a full fiscal year, its average employment should be calculated for the period through one month prior to the bid or proposal due date.

5)         If the business is any combination of retailer, wholesaler or construction business, then the annual sales for each component may not exceed the amounts shown in subsection (e)(3).  For example, a business that is both a retailer and wholesaler may not have total sales exceeding $9,000,000 and the retail component may not exceed $1,500,000 and the wholesaler component may not exceed $7,500,000.  If the business is also a manufacturer, in addition to meeting the annual sales requirement, the number of manufacturing employees may not exceed the number shown in subsection (e)(4).

6)         When computing the size status of a vendor, the number of employees and annual sales and receipts, as applicable, of the vendor and all affiliates shall be included.  Concerns are affiliates when either one directly or indirectly controls or has the power to control the other, or when a third party or parties controls or has the power to control both.  In determining whether concerns are independently owned and operated and whether affiliation exists, consideration shall be given to all appropriate factors, including use of common facilities, common ownership and management and contractual arrangements.  However, a franchise relationship shall not affect small business status if the franchise has the right to profit commensurate with ownership and bears the risk of loss or failure.

f)         Vendors desiring to submit bids or proposals or to otherwise contract for items set aside for small businesses shall submit information verifying that the vendor qualifies as a small business or rely on such procedures established by other State agencies.  The CPO may establish procedures for verifying such information.

Section 1500.4570  Contracting with Businesses Owned and Controlled by Minorities, Females and  Persons with Disabilities

a)         Introduction

The Business Enterprise Act for Minorities, Females, and Persons with Disabilities [30 ILCS 575] (Act) sets a goal (minimum 12%) for contracting with businesses owned or controlled by minorities, females, or persons with disabilities.

b)         Upon direction of the CPO, the OG may establish set-asides and other such preferences for vendors certified under that Act.

c)         Certification

Certification procedures are set forth in rules governing the Business Enterprise Act (44 Ill. Adm. Code 10).

d)         The CPO may refer to the list of businesses that have been certified and maintained by CMS.

Section 1500.5013  Conflicts of Interest

a)         This Section does not apply to those elected to local government, including school districts, nor does it apply to those elected to federal offices in this State. This Section does apply to those elected to an office of Illinois State government.

b)         An individual has a direct pecuniary interest in a contract when the individual is owed a payment or otherwise receives a direct financial benefit in conjunction with performance of a contract, including finders fees and commission payments.

c)         Distributable income means the income of a company after payment of all expenses, including employee salary and bonus, and retained earnings, which is distributed to those entitled to receive a share of such income. In the  case of a for-profit corporation, distributable income means "dividend". When calculating entitlement to distributable income the entitlement shall be determined at the end of the company's most recent fiscal year.

d)         This Section does not apply to contracts with licensed professionals provided such contracts are competitively bid.  For purposes of this Section, "bid" means procured pursuant to the competitive procedures identified in Subpart E of this Part.

Section 1500.5015  Negotiations for Future Employment

a)         It is unlawful for any person employed in or on a continual contractual relationship with any of the offices or agencies of State government to participate in contract negotiations on behalf of that office or agency with any firm, partnership, association, or corporation with whom that person has a contract for future employment or is negotiating concerning possible future employment.  [30 ILCS 500/50-15(a)]

b)         An individual who performs services pursuant to a contract and who meets the requirements of an "employee" as opposed to an independent contractor is in a "continued contractual relationship" from the effective date of the contract until such time as the contract is terminated.

c)         An individual who performs services pursuant to a contract and who meets the requirements of an "independent contractor" as opposed to an "employee" is in a "continued contractual relationship" if the contract term is indefinite, is automatically renewed, is renewable at the individual's option, is renewable unless the State must act to terminate, or has a definite term of at least three months.

Section 1500.5020  Exemptions

If the Procurement Officer finds a conflict of interest under Section 50-13 of the Code with the vendor selected for award or contract negotiations, the Procurement Officer, if other than the CPO, shall forward to the CPO the name of the vendor and a description of the proposed contract and of the potential conflict, and shall state why an exemption  should be granted. The CPO shall submit the files to the Board of Ethics for its determination and with the approval of the CPO, the Board of Ethics may exempt named individuals from the prohibitions of Section 50-13 of the Code when, in its judgment, the public interest in having the individual in the service of the State outweighs the public policy evidenced in that Section  [30 ILCS 500/50-20].

Section 1500.5030  Revolving Door

Effective January 15, 1999, the CPO shall identify in writing the designees whose jobs, or whose position descriptions, are at least 51% directly related to State Procurement.  The following activities are directly related to State Procurement:  drafting specifications, preparing Invitations for Bids and Requests for Proposals, evaluating responses to Invitations for Bids and Requests for Proposals, negotiating contracts and supervising any of the foregoing.  The CPO shall maintain that information for a period of at least two years following the end or revocation of the designation.

Section 1500.5035  Disclosure of Financial Interests and Potential Conflicts of Interest

a)         For purposes of Section 50-35(a) of the Code, an "offer from responsive bidders or offerors" means only those offers that are received using an Invitation for Bids or Request for Proposals under Sections 20-10, 20-15 and 20-35 or Article 35 of the Code.  Disclosures are not required in small, sole source or emergency procurements.

b)         For purposes of:

1)         Section 50-35(b) of the Code, "parent entity" means a person who owns 100% of the bidding entity.

2)         Section 50-35(b)(1) of the Code, "contractual employment of services" means any contract to provide services to the State, whether as independent contractor or employee, that is by and between the State and the named individual.

c)         Distributable or distributive income means the income of a company after payment of all expenses, including employee salaries and bonuses, and retained earnings, which is distributed to those entitled to receive a share of such income.

d)         Personal services shall be any contract for services subject to this Code, including, for example, professional and artistic services, repair services, cleaning and guard services, but excludes contracts with employees who are exempt from the Code under Section 1-10(b)(4).

e)         "Competitively bid" means a contract let pursuant to Sections 20-10, 20-15 and 20-35 of the Code.

f)         "Subject to federal 10K reporting" means subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934.  "10K disclosure" means a report required under Section 13 or 15(d) of the Securities Exchange Act of 1934.

g)         Once a disclosure is made in relation to a particular contract, the disclosure need not be repeated if the contract is amended.

h)         10K Disclosures

1)         Any vendor subject to federal 10K reporting requirements may submit its 10K to the State in satisfaction of the disclosure requirement of Section 50-35(b) of the Code provided the vendor also identifies the specific sections or parts in the 10K disclosure where the State may find information, if any, pertaining to those who have an ownership interest or an interest in the distributable income of the vendor or its parent, or other information that the vendor knows or reasonably should know identifies a potential conflict of interest with the State.  If the financial interest or conflict of interest information requested by the State is not in the 10K, but is in a document referenced in the 10K, or in a document that may be submitted to the SEC in conjunction with or in lieu of the 10K, then that additional documentation shall be provided as well.

2)         10K disclosures are available for public review.  Any potential conflict of interest identified by the public and brought to the attention of the CPO or SPO shall be investigated.

3)         In circumstances where a vendor may submit a 10K disclosure in lieu of the specific disclosure requirements of the Code and for purposes of the Procurement Officer's duty to consider any conflict or potential conflict of interest that may exist, but that is not subject to specific disclosure requirements of the Code and this Part, and that is not personally known by the Procurement Officer, the duty of the Procurement Officer "publicly known or reasonably available to the public" shall be satisfied by taking into consideration information identified by the vendor in the 10K disclosure and any information disclosed pursuant to public review of the 10K disclosure.

Section 1500.5510  Complaints Against Vendors

a)         The purpose of this Section is to document performance of vendors.

b)         Whenever a vendor fails to meet contract requirements, including but not limited to failure to deliver on time or meet specifications, the OG shall take appropriate action to initiate a complaint to the vendor.

c)         For relatively minor infractions, the OG may initiate contact by telephone or in person.  If not resolved by this action, a written complaint shall be made.

d)         For other infractions, the OG shall send a written complaint to the vendor detailing the problem.

e)         A copy of all written complaints and the resolution or status shall be filed with CMS.

Section 1500.5520  Suspension

The OG may recommend to CMS that a vendor be suspended from doing business with the State, with one or more agencies, or for specific types of supplies or services.  Suspensions will be governed by 1 Ill. Adm. Code 1.5510 through 1.5550.

Section 1500.5530  Resolution of Contract Controversies

a)         Authority to Resolve Controversies

The Procurement Officer shall have authority to resolve controversies.

b)         Authority of the OG

The OG has the authority to accept delivery of supplies or services in accordance with contract requirements as satisfactory adjustment of a complaint.

c)         Substitution of Terms/Price Reduction

If the vendor proposes to make an adjustment by:

1)         substituting an alternative specification, or

2)         reducing the contract price by a certain amount to compensate for some failure to provide full performance under the contract,

such proposal must be referred to and approved by the Procurement Officer.

d)         Cancellation for Breach of Contract

In any of the following cases the Procurement Officer shall have the right to terminate or rescind any contract entered into under this Part:

1)         The successful bidder fails to furnish a satisfactory performance bond within the time specified.

2)         The vendor fails to make delivery at the place or within the time specified in the contract or as ordered by the OG.

3)         Any supplies or services provided under the contract are rejected (for not meeting specification, not conforming to sample, or not being in good condition when delivered) and are not promptly replaced by the vendor.  If there are repeated rejections of the vendor's supplies or services, this shall be grounds for termination or rescission, even though the vendor offers to replace the supplies or services promptly.

4)         The vendor is guilty of misrepresentation (for example, misbranding of food or drugs) in connection with another contract for the sale of supplies or services to the OG such that the vendor cannot reasonably be depended upon to fulfill his obligations as a responsible vendor under any of his contracts with the OG.

5)         The vendor should be adjudged bankrupt; enter into receivership or make a general assignment for the benefit of creditors due to insolvency; disregard laws, rules, or instructions of the Procurement Officer; or act in violation of any provision of the contract; or if the contract conflicts with any statutory or constitutional provision of the State of Illinois or of the United States.

6)         Any other breach of contract or other unlawful act by the vendor.

e)         Cancellation for Fraud, Collusion, Illegality, Etc.

The OG may cancel any contract it established if there is sufficient evidence to show that:

1)         The contract was obtained by fraud, collusion, conspiracy, or other unlawful means; or

2)         The contract conflicts with any statutory provision of the State of Illinois or of the United States.

f)         Withholding Money to Compensate State for Damages

If a contract is terminated or rescinded under this Section, the OG may deduct from whatever is owed the vendor on that or any other contract an amount sufficient to compensate the State of Illinois for any damages suffered by it because of the vendor's breach of contract or other unlawful act on the vendor's part on which the cancellation is based.

g)         Damages

The damages for which the OG may be compensated as provided in this Section or by a suit on the vendor's performance bond or by other legal remedy shall include, but are not limited to, the following:

1)         the additional cost of supplies or services bought elsewhere;

2)         cost of repeating the procurement procedure;

3)         any expenses incurred because of delay in receipt of supplies or services; and

4)         any other damages caused by the vendor's breach of contract or unlawful act.

Section 1500.5540  Violation of Statute or Rule

a)         Determination that Solicitation or Award Violates Law

If the Purchasing Officer finds that the solicitation or proposed award is in violation of statute or rule, the Purchasing Officer may cancel the solicitation or proposed award, or make modifications to correct the violation, if such correction may be legally accomplished.

b)         Determination that Contract Violates the Code or this Part

Contracts based on awards or solicitations that were in violation of law shall be terminated at no cost to the OG unless statute or rule allows the OG to modify, ratify or take other corrective action.

c)         Effect of Declaring a Contract Null and Void

In all cases in which a contract is voided, the OG shall endeavor to return those supplies delivered under the contract that have not been used or distributed. No further payments shall be made under the contract.

Section 1500.5550  Protests

a)         Protest Resolution by the Procurement Officer

An actual or prospective bidder, offeror, or vendor that may be aggrieved in connection with a procurement may file a protest on any phase of solicitation or award, including but not limited to specifications preparation, bid solicitation, or award.

b)         Complaint to Procurement Officer

Complainants should seek resolution of their complaints initially with the office that issued the solicitation.  Such complaints may be made verbally or in writing.

c)         Filing of Protest

1)         Protests shall be made in writing to the Procurement Officer, if applicable, and shall be filed within 7 calendar days after the protester knows or should have known of the facts giving rise to the protest. A protest is considered filed when physically received by the Procurement Officer.  Protests filed after the 7 calendar day period shall not be considered.  In regard to a protest regarding specifications, the protest must be received within 7 calendar days after the date the solicitation was issued, and in any event must be received by the OG at the designated address before the date for opening of bids or proposals.

2)         To expedite handling of protests, the envelope should be labeled "Protest". The written protest shall include as a minimum the following:

A)        the name and address of the protester;

B)        appropriate identification of the procurement and, if a contract has been awarded, its number;

C)        a statement of reasons for the protest; and

D)        supporting exhibits, evidence, or documents to substantiate any claims unless not available within the filing time, in which case the expected availability date shall be indicated.

d)         Requested Information; Time for Filing

Any additional information requested by the OG shall be submitted within the time periods established by the requesting source in order to expedite consideration of the protest.  Failure of the protesting party to comply expeditiously with a request for information by the Procurement Officer may result in resolution of the protest without consideration of that  information.

e)         Stay of Procurements During Protest

When a protest has been timely filed and before an award has been made, the Procurement Officer shall make no award of the contract until the protest has been resolved.  If timely received but after award, the award shall be revoked without penalty and no award made until the protest has been resolved.  In either case the Procurement Officer may make the award or reinstate the award upon a determination that the needs of the OG require an immediate award and performance under the contract.

f)         Decision by the Procurement Officer

A decision on a protest shall be made by the Procurement Officer as expeditiously as possible after receiving all relevant requested information. If a protest is sustained, the available remedies include, but are not limited to, reversal of award and cancellation or revision of the solicitation.

g)         Effect of Judicial or Administrative Proceedings

If an action concerning the protest has commenced in court, the Procurement Officer shall not act on the protest, but shall refer the protest to the Attorney General unless otherwise directed by the Attorney General.

Section 1500.6500  General

In an effort to make the procurement process more efficient, OG and other governmental units (including not-for-profit entities authorized by law to participate in joint purchasing) may agree to utilize each others' procurement contracts. This authority is governed by this Subpart and the Governmental Joint Purchasing Act [30 ILCS 525].  Only the CPO may enter into contracts under the Act when the OG is a party to the contract.

Section 1500.6510  No Agency Relationship

In any joint procurement situation, the other governmental unit must issue its own purchase order, accept its own deliveries and make its own payments.  The State of Illinois shall have no obligation to the vendor for payment of orders placed by other governmental units.

Section 1500.6520  Obligations of Participating Governmental Units

If governmental units determine to use contracts established by the OG or by CMS on behalf of the OG, they must:

a)         provide to the CPO a copy of the ordinance or resolution passed by the governing body of the governmental unit giving authority to make purchases from contracts issued by the State of Illinois;

b)         make all purchases under the State contracts for public use only and specifically prohibit personal use or consumption by any individual, public employee or official;

c)         make payment to the vendor within 30 days after receipt of supplies or services;

d)         place orders with the supplier directly using their own purchase order forms.  A copy of the purchase order must also be sent to the CPO.  This copy will be used for statistical  purposes and will serve as notice that the governmental unit has complied with the bid action;

e)         inspect all items immediately for compliance with the contract specifications and report to the CPO any failure of suppliers to comply with contract requirements; and

f)         attempt to resolve disputes with the vendor before involving the CPO.

Section 1500.7000  Severability

If any provision of this Part or any application thereof is held invalid, such invalidity shall not affect other provisions or applications of this Part that can be given effect without such invalid provision or application.

Section 1500.7010  Government Furnished Property

If the OG provides any property to the vendor in furtherance of the contract, such property shall remain the property of the State but may be consumed by the vendor if necessary to complete the contract.  Vendor will issue a receipt for the property and will be responsible for its safekeeping and for return of unused property to the State.

Section 1500.7015  Inspections

a)         Inspection of Plant or Site

The OG may enter, or authorize CMS to enter, a vendor's or subcontractor's plant or place of business to:

1)         inspect supplies or services for acceptance by the State pursuant to the terms of a contract;

2)         audit the books and records of any vendor or subcontractor pursuant to Section 1500.7020 (Records and Audits) of this Part;

3)         investigate an action to debar or suspend a person from consideration for award of contracts pursuant to the Code;

4)         determine whether the standards of responsibility have been met or are capable of being met;

5)         determine if the contract is being performed in accordance with its terms; and

6)         accomplish any other purpose permitted by law.

b)         Inspection and Testing of Supplies and Services

1)         Solicitation and Contractual Provisions.  Contracts of the OG may provide for the inspection of supplies and services at the vendor's or subcontractor's facility and performance tests to determine whether the supplies or services conform to solicitation requirements, or, after award, to contract requirements, and are therefore acceptable.  Such inspections and tests shall be conducted in accordance with the terms of the solicitation and contract and may be conducted by CMS on behalf of the OG.

2)         Procedures for Trial Use and Testing.  The Procurement Officers may establish operational procedures, or may rely on such procedures established by CMS, governing the testing and trial use of equipment, material, and other supplies by the OG, and the application of resulting information and data to specifications or procurements.

c)         Conduct of Inspections

1)         Inspectors.  Inspections or tests shall be performed so as not to unduly delay the work of the vendor or subcontractor.  No inspector other than the Procurement Officer may change any provision of the specifications or the contract without written authorization of the Procurement Officer.  The presence or absence of an inspector shall not relieve the vendor or subcontractor from any requirements of the contract.

2)         Location.  When an inspection is made in the plant or place of business of a vendor or subcontractor, such vendor or subcontractor shall provide without charge all reasonable facilities and assistance for the safety and convenience of the person performing the inspection or testing.

3)         Time.  Inspection or testing of supplies and services performed at the plant or place of business of any vendor or subcontractor shall be performed at reasonable times.

d)         Inspection of Construction Projects

On-site inspection of construction shall be performed in accordance with the terms of the contract.

Section 1500.7020  Records and Audits

a)         Retention of Books and Records

Books and records that relate to performance of a contract, including subcontracts, and that support amounts charged to the OG, shall be maintained:

1)         by a vendor, for three years from the date of final payment under the prime contract;

2)         by a subcontractor, for at least three years from the date of final payment under the subcontract; and

3)         by a vendor and subcontractor for such longer period of time as is necessary to complete ongoing or announced audits.

b)         Contract Audit

1)         Types of Contracts Audited.  The type of contract under which books and records should be audited is that in which price is based on costs or is subject to adjustment based on costs, or that in which auditing would be appropriate to assure satisfactory performance, such as a time and materials contract.

2)         Situations in which an audit may be warranted include, but are not limited to, when a question arises in connection with:

A)        the financial condition, integrity, and reliability of the vendor or subcontractor;

B)        any prior audit experience;

C)        the adequacy of the vendor's or subcontractor's accounting system;

D)        the number or nature of invoices or reimbursement vouchers submitted by the vendor or subcontractor for payment;

E)        the use of federal assistance funds;

F)         the fluctuation of market prices affecting the contract; or

G)        any other situation in which the Procurement Officer finds that such an audit is necessary for the protection of the State's best interest.

Section 1500.7025  Written Determinations

a)         Preparation and Execution

When the Code or this Part requires a written determination, the officer required to prepare the determination may delegate its preparation, but the responsibility for and the execution of the determination shall not be delegated.

b)         Content

Each written determination shall set out sufficient facts, circumstances, and reasoning as will substantiate the specific determination that is made.

c)         Obtaining Supporting Information

While an officer is responsible for the execution of the written determination, other State personnel, particularly technical personnel and appropriate personnel in the purchasing agency, are responsible for furnishing to the cognizant official, in an accurate and adequate fashion, the information pertinent to the determination.  When requested, such information shall be furnished in writing to the cognizant official who shall have the authority to decide the final form and content of the determination and to resolve any questions or conflicts arising with respect to the determination.

d)         Forms

The CPO is authorized to prescribe methods and operational procedures to be used in preparing written determinations.

e)         Retention

Each written determination shall be filed in the solicitation or contract file to which it applies, shall be retained as part of such file for so long as the file is required to be maintained, and, except as otherwise provided by statute or rule, shall be open to public inspection.

Section 1500.7030  No Waiver of Sovereign Immunity

Nothing in this Part shall be deemed to be a waiver of sovereign immunity.