Or. Admin. Code § 125-247-0110 - Feasibility Determination, Cost Analysis and Department Report
(1) The Table of
Contents for this Rule is as follows:
(a)
Section 2: Generally
(b) Section 3:
Feasibility Determination
(c)
Section 4: Cost Analysis: Estimation of Agency and Contractor Data
(d) Section 5: Decision: Comparison of
Compensation and Other Costs
(e)
Section 6: Decision: Comparison of Agency and Contracting Costs
(f) Section 7: Department Evaluation and
Report
(2) Generally.
(a) Before conducting a Procurement for
Services, a State Contracting Agency, as defined in ORS 279A.010, (for purposes
of this Rule, Agency) must, in the absence of a Feasibility Determination under
Section (3) of this Rule, conduct a Written Cost Analysis under sections (4)
through (6) of this rule (Cost Analysis).
(b) Responsibilities for the Conduct of the
Cost Analysis.
(A) An Agency with Authority
must conduct the Cost Analysis for its Agency-specific Procurements;
(B) An Agency without Authority must conduct
the Cost Analysis for its Agency-specific Procurements to be procured by the
Department;
(C) At the Department's
request, an Agency must contribute to the Cost Analysis for statewide Price
Agreement Procurements; and
(D) The
Department must conduct the Cost Analysis for statewide Price Agreement
Procurements and Department-specific Procurements.
(c) This Rule applies to a Procurement for
Services that the Agency estimates will result in one or more Contracts with a
value that exceeds $250,000 for the estimated term of the Contract(s) (Value),
including incidental costs related to the Services, and Amendments. Agencies
must not fragment to avoid this threshold (see OAR 125-246-0630).
(d) If a Procurement is conducted in
accordance with this Rule, an Award is made, and one or more Amendments then
increase the estimated contract's value over $250,000, a Cost Analysis is not
required at that time.
(e)
"Services" has the meaning as defined in OAR 125-246-0110, except that for
purposes of this Rule only:
(A) "Services"
does not include the services of an Architect, Engineer, Photogrammetrist,
Transportation Planner, Land Surveyor or Provider of Related Services as
defined in ORS 279C.100 as defined in ORS 279C.100; and
(B) "Services" does not include Client
Services, defined in OAR 125-246-0110, as follows:
(i) "Client" means any individual, family or
Provider:
(I) For whom an Agency must provide
Services and incidental or specialized Goods, in any combination thereof
("Services and Incidental Supplies"), according to state, federal law, rule,
and policy. Those Services and Incidental Supplies include but are not limited
to treatment, care, protection, and support without regard to the proximity of
the services being provided;
(II)
Who in fact receives and utilizes services provided by an Agency primarily for
that individual's or family's benefit;
(III) Who is under the custody, care, or both
of the Agency; or
(IV) Who provides
direct care or Services and is a proxy or representative of the non-Provider
Client.
(ii) "Client
Services" means any Services that directly or primarily support a Client,
whether the Client is the recipient through the provision of voluntary or
mandatory Services. Client Services also means any Goods that are incidental or
specialized in relation to any Services defined in this Subsection. Client
Services may include but are not limited to (where these terms are used in
another statute, they must have that meaning):
(I) Housing, including utilities, rent or
mortgage or assistance to pay rent, mortgage or utilities;
(II) Sustenance, including
clothing;
(III) Employment training
or Skills training to improve employability;
(IV) Services for people with
disabilities;
(V) Foster care or
foster care facilities;
(VI)
Residential care or residential care facilities;
(VII) Community housing;
(VIII) In-home care including home delivered
meals;
(IX) Medical care, services
and treatment, including but not limited to:
(aa) Medical, Dental, Hospital,
Psychological, Psychiatric, Therapy, Vision;
(bb) Alcohol and drug treatment;
(cc) Smoking cessation;
(dd) Drugs, prescriptions and
non-prescription;
(ee) Nursing
services and facilities;
(X) Transportation or relocation;
(XI) Quality of life, living skills training;
or
(XII) Personal care;
or
(XIII) Legal services and expert
witnesses services;
(XIV) Religious
practices, traditions and services, separately or in any combination thereof;
and
(XV) Educational
services.
(iii) The term
"Client Services" does not include benefits or services provided as a condition
of employment with an Agency.
(3) Feasibility Determination. An Agency may
proceed with the Procurement of Services without conducting a Cost Analysis if
the Agency makes Written findings that one or more of the Special Circumstances
described in subsection (3)(b) make the Agency's use of its own personnel and
resources to provide the Services not feasible (Feasibility Determination).
(a) Approval of Feasibility Determination.
(A) The Designated Procurement Officer or
delegate (DPO) of an Agency must approve the Feasibility Determination for its
Procurement;
(B) The DPO of an
Agency without Authority must approve the Feasibility
Determination for an Agency-specific Procurement to be procured by the
Department on behalf of that Agency;
(C) The State Chief Procurement Officer must
approve the Feasibility Determination for a statewide Price Agreement
Procurement or Department-specific Procurement. At the Department's request,
DPOs must cooperate with the Department to prepare the findings for the
Feasibility Determination for a statewide Price Agreement
Procurement.
(b) Special
Circumstances. Special Circumstances include any circumstances, conditions or
occurrences that would make the Services, if performed by the Agency's
employees, incapable of being managed, utilized or dealt with successfully in
terms of the quality, timeliness of completion, success in obtaining desired
results, or other reasonable needs of the Agency. Special Circumstances may
include, but are not limited to, the follow circumstances:
(A) Expertise. The DPO approves a
determination that the Agency lacks the specialized capabilities, experience,
or technical or other expertise necessary to perform the Services. In making
the finding, the Agency must compare the Agency's capability, experience or
expertise in the field most closely involved in performing the Services with a
potential contractor's capability, experience or expertise in the same or a
similar field.
(B) Funding
Requirement. The terms under which the Agency receives a grant or other funds
for use in a Procurement require the Agency to obtain Services through an
independent contractor;
(C) Law
Requirement. Other state or federal law requires the Agency to procure Services
through an independent contractor;
(D) Real or Personal Property. The
Procurement is for Services that are incidental to a contract for purchasing or
leasing real or personal property, including service and maintenance agreements
for equipment that is leased or rented;
(E) Conflict of Interest; Unbiased Review.
The Agency cannot accomplish policy, administrative or legal goals, including
but not limited to avoiding conflicts of interest or ensuring independent or
unbiased findings in cases when using the Agency's existing personnel or
persons the Agency could hire through a regular or ordinary process would not
be suitable;
(F) Emergency
Procurement. The Procurement is for Services to which the provisions of ORS
279B.080 apply;
(G) Delay. The
Procurement is for Services, the need for which is so urgent, temporary or
occasional that attempting to perform the Services with the Agency's own
personnel or resources would cause a delay that would frustrate the purpose for
obtaining the Services; and
(H)
Services Completed within Six Months. The Services that the Agency intends to
procure will be completed within six months after the date on which the
contract for the Services is executed.
(c) Procurement File. All written
determinations required in this section (3) must be made a part of the
Procurement File in accordance with OAR 125-246-0556.
(4) Cost Analysis: Estimation of Agency and
Contractor Data.
(a) Costs of Using Agency's
Own Personnel and Resources. The Agency must estimate the Agency's cost of
performing the Services and consider cost factors that include:
(A) Salaries or Wages and Benefits. The
salary or wage and benefit costs for the employees of the Agency who would be
directly involved in performing the Services, to the extent those costs reflect
the proportion of the activity of those employees in the direct provision of
the Services. These costs include those salary or wage and benefit costs of the
employees who inspect, supervise or monitor the performance of the Services, to
the extent those costs reflect the proportion of the activity of those
employees in the direct inspection, supervision or monitoring of the
performance of the Services.
(B)
Material Costs. The material costs necessary to the performance of the
Services, including the costs for space, energy, transportation, storage, raw
and finished materials, equipment and supplies used or consumed in the
provision of the Services.
(C)
Related Costs.
(i) Costs incurred in planning
for, training for, starting up, implementing, transporting and delivering the
Services.
(ii) Any costs related to
stopping and dismantling a project or operation because the Agency intends to
procure a limited quantity of Services or to procure the Services within a
defined or limited period of time.
(iii) The miscellaneous costs related to
performing the Services, including but not limited to reasonably foreseeable
fluctuations in the costs for the items identified in this subsection (4)(a)
over the expected duration of the Procurement. These costs exclude the Agency's
indirect overhead costs for existing salaries or wages and benefits for
administrators and exclude costs for rent, equipment, utilities and materials,
except to the extent the cost items identified in this sentence are attributed
solely to performing the Services and would not be incurred unless the Agency
performed the Services.
(D) Other Information. The Agency's costs
described in this subsection (4)(a)(A) do not constitute an exclusive list of
cost information. An Agency may consider other reliable information that bears
on the cost to the Agency of performing the Services. For example, if the
Agency has accounted for its actual costs of performing the Services under
consideration, or reasonably comparable Services, in a relatively recent
Services project, the Agency may consider those actual costs in making its
estimate.
(b) Costs a
Potential Contractor Would Incur. The Agency must estimate the cost a potential
Contractor would incur in performing the Services and consider cost factors
that include:
(A) Salaries or Wages and
Benefits. The estimated salary or wage and benefit costs for a potential
Contractor and potential Contractor's employees who work in the business or
industry most closely involved in performing the Services; and who would be
necessary and directly involved in performing the Services or who would
inspect, supervise, or monitor the performance of the Services.
(i) The Agency may, but is not required to,
communicate with any actual Contractor for information related to this estimate
(see OAR 125-246-0635).
(ii) The
Agency may consider in making this estimate any public source of information,
including but not limited to:
(I) Other
Contracts of the Agency or another Agency for reasonably comparable
services;
(II) Trade or other
marketplace websites;
(III)
Industry or professional associations and publications;
(IV) The Oregon Bureau of Labor and
Industries or an agency of another jurisdiction that performs comparable
functions; and
(V) A survey of
Persons who provide reasonably comparable services by means, including but not
limited to, Internet or telephone searches.
(B) Material Costs. The material costs
necessary to the performance of the Services, including the costs for space,
energy, transportation, storage, raw and finished materials, equipment and
supplies used or consumed in the provision of the Services.
(C) Related Costs. The miscellaneous costs
related to performing the Services. These miscellaneous costs include but are
not limited to reasonably foreseeable fluctuations in the costs listed in
subsections (4)(b)(A) through (C) over the expected duration of the
Procurement.
(D) Other Information.
The potential Contractor's costs described in subsections (4)(b)(A) through (C)
do not constitute an exclusive list of cost information. An Agency may consider
other reliable information that bears on the costs a potential Contractor would
incur. For example, if in the recent past, the Agency conducted a Solicitation
that required cost information or permitted negotiation of price based on a
cost analysis for Services reasonably comparable to the current Services, the
Agency may use that cost information in estimating the costs of current
Services.
(5)
Decision: Comparison of Compensation and Other Costs.
(a) The Agency must compare:
(A) The Agency's estimated costs under
Subsection (4)(a) and
(B) The
Contractor's estimated costs under subsection (4)(b).
(b) Decision. If the Agency's costs exceed
the Contractor's costs under Subsection (5)(a) for the sole reason that the
Contractor's costs for salaries or wages and benefits under Subsection
(4)(b)(A) are lower than the Agency's costs for salaries or wages and benefits
under subsection (4)(a)(A), then the Agency may not conduct the
Procurement.
(6)
Decision: Comparison of Agency and Contracting Costs.
(a) If subsection (5)(b) does not apply, the
Agency must compare:
(A) The Agency's
estimated costs under Subsection (4)(a) and
(B) The total estimated costs that the Agency
would incur in procuring the Services from a Contractor (Contracting
Costs).
(b) Profit
Included. Contracting Costs include the Agency's estimate of Contractor's
profit in addition to the estimate of Contractor's costs under subsection
(4)(b). If the Agency, in the reasonably near past, received Bids or Proposals
for the performance of the Services under consideration, or reasonably
comparable services, the Agency may consider the pricing offered in those Bids
or Proposals in making its estimate. Similarly, the Agency may consider what it
actually paid under a Contract for the same or similar services. For the
purposes of these examples, the reasonably near past is limited to Contracts,
Bids or Proposals entered into or received within the five (5) years preceding
the date of the cost estimate. The Agency must take into account, when
considering the pricing offered in previous Bids, Proposals, or Contracts,
adjustments to the pricing in light of measures of market price adjustments
that apply to the Services, such as the Consumer Price Indexes.
(c) Decision. If the Agency's Contracting
Cost under this section is lower than the Agency's cost under subsection
(4)(a), the Agency may conduct the Procurement. If the Agency's Contracting
Cost is higher than the Agency's cost under subsection (4)(a), the Agency may
not conduct the Procurement, unless the Exception of subsection (6)(d)
applies.
(d) Exception Based on
Lack of Agency Personnel and Resources; Reporting. If the Agency determines
that it would incur less cost in providing the Services with its own personnel
and resources, the Agency may still conduct the Procurement if, at the time the
Agency intends to conduct the Procurement, the Agency determines that it lacks
personnel and resources to perform the Services within the time the Agency
requires the Services (Exception). When an Agency conducts a Procurement under
this Exception, the Agency must:
(A) Make and
keep a Written determination that it lacks personnel and resources to perform
the Services within the time the Agency requires the Services and the basis for
the Agency's decision to conduct the Procurement;
(B) Obtain the Written approval by the DPO of
the Agency of the Exception before conducting an Agency-specific Procurement or
the Written approval by the CPO of the Exception before the Department conducts
a Procurement.
(C) Provide to the
Emergency Board, each calendar quarter, copies of each Cost Analysis,
Exception, and any other records described in this Subsection (6)(d);
(D) Prepare a request to the Governor for an
appropriation and authority necessary for the Agency to hire personnel and
obtain resources necessary to perform the Services that the Agency procured
under this Subsection (6)(d). The request must include a copy of the records
that the Agency provided to the Emergency Board under Subsection
(6)(d)(C).
(7) A State Contracting Agency that conducts
a cost analysis in accordance with ORS 279B.033 or makes a determination under
ORS 279B.036 in connection with a procurement for services related to
information technology must provide the State Chief Information Officer and the
Legislative Fiscal Office with copies of the final cost analysis the state
contracting agency prepared under ORS 279B.033 or the final determination the
state contracting agency made under ORS 279B.036. For purposes of this
subsection, information technology is defined in ORS 291.045(1) and includes,
but is not limited to, all present and future forms of hardware, software, and
services for data processing, office automation, and
telecommunications.
(8) The
requirement to provide the materials described in subsection (7) to the State
Chief Information Officer does not apply to the Secretary of State or the State
Treasurer.
Notes
Statutory/Other Authority: ORS 279A.065(5)(a) & 279A.070
Statutes/Other Implemented: ORS 279B.030, 279B.033, 279B.036 & Or Laws 2016, ch 16 (SB 1539)
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