835 R.I. Code R. 835-RICR-30-00-1.4

Current through December 3, 2024

Section 835-RICR-30-00-1.4 - Negotiation

1.4.1Procedures for Negotiation

A. The objective of negotiation shall be to secure advantageous terms and conditions and/or to exact improvements in terms and conditions offered to the NBC to reduce potential costs to the NBC.

B. Negotiation shall be used to establish or modify contractual provisions in all cases where:

1. Fixed pricing is not the sole determinant for award;

2. Responses to competitive bidding or requests for proposal suggest that lower pricing, or other improvements in offers, are achievable;

3. Sole source purchases are made;

4. Responses to the competitive bidding or requests for proposal do not permit effective comparison, due to the differing nature of the responses;

5. The scope of a contract changes during the performance period, such that modification of price or of other provisions may be warranted;

6. The Chief Purchasing Officer has determined in writing that a product or the market in which a product is sold is noncompetitive in nature; or

7. The Chief Purchasing Officer has determined in writing that the NBC is in need of special services.

C. The Chief Purchasing Officer may delegate authority for directing and negotiating change orders to subordinate personnel. Such delegation shall be in accordance with specific limitations defined by the Chief Purchasing Officer.

D. Competitive Negotiation

1. Contracts may be competitively negotiated when it is determined in writing by the Chief Purchasing Officer that the bids or proposals received by competitive sealed bidding or sealed request for proposals are either unreasonable as to all or part of the requirements or were not independently reached in open competition and for which:

a. Each responsible / responsive bidder or proposer has been notified of the intention to negotiate and is given reasonable opportunity to negotiate; and

b. The negotiated price is lower than the lowest rejected bid price or proposal price by any responsible / responsive bidder or proposer; and

c. The negotiated price is the lowest negotiated price offered by any responsible / responsive bidder or proposer.

2. Competitive negotiation may be used in any case where the scope, term, or other requirements of the purchase have not been determined at the time that a requisition is issued, or where optional bids or proposals are desired and encouraged, or where the value of the purchase has not been definitively established.

3. Procedures: Requests for Proposals in Competitive Negotiations:

a. Public Notice: Unless the invitations for bid are accessible under the provisions of R.I. Gen. Laws § 37-2-17.1, adequate public notice of the request for proposals (RFP) shall include publication in a newspaper of general circulation in the State of Rhode Island and may include other publications as determined by the NBC not less than seven (7) days nor more than twenty-eight (28) days before the date set for the opening of the RFP. In the event that the NBC determines that there is a need to waive the twenty-eight (28) day limitation, the NBC shall make a written determination stating the reasons why the limitation is being waived and shall state the number of days, giving a minimum and maximum, before the date set for the opening of RFP when public notice is to be given.

b. The RFP shall describe and enumerate the item(s) covered, their specification(s), contract term(s), and any other special provisions or requirements. The RFP shall indicate the relative importance of the evaluation factors including price.

c. At a public opening of responses to the RFP, the Chief Purchasing Officer shall not be required to reveal any information other than the names of those responding. The nature of responses shall not be subject to public disclosure until a contract has been awarded.

d. Review and Discussion: Written or oral discussion shall be conducted with all responsible and responsive proposers who submit proposals determined in writing to be potentially selected for award. Discussions shall not disclose any information derived from proposals submitted by competing proposers. Discussion need not be conducted under the following circumstances:

(1) With respect to prices, where such prices are fixed by law or regulation, except that consideration shall be given to competitive terms and conditions; or

(2) Where time of delivery or performance will not permit discussions; or

(3) Where it can be clearly demonstrated and documented from the existence of adequate competition or accurate prior cost experience with the particular supply, service equipment, or construction item, that acceptance of an initial proposal without discussion may result in fair and reasonable prices and the RFP notifies all proposers of the possibility that the award may be made on the basis of the initial offers.

e. Evaluation: Responses to the request for proposals shall be evaluated:

(1) To determine nonresponsive proposals, which shall be eliminated from further consideration; and

(2) To determine the lowest cost combination of options, terms, and conditions, establishing a base-line; and

(3) To establish a cost ranking of responses to that base-line.

f. Where there is more than one proposer, competitive negotiations shall be conducted with the three (two if there are only two) proposers who have been determined in writing to be the lowest responsive and responsible proposers to the RFP. Such competitive negotiations shall be conducted under the following restrictions:

(1) All potential proposers shall have equal opportunity to take part in discussions pertaining to the revision of the scope of services in a contract.

(2) In a case where a revised request for proposals is requested, it shall be issued as promptly as possible and shall demand a diligent response to the revised requirements. The award shall be granted upon the basis of the lowest evaluated proposed price submitted by any responsive and responsible proposer.

(3) In the event that all proposals submitted pursuant to this article result in offers in excess of the funds available for the purchase and the lowest proposal is ten percent (10%) greater than the next lowest price offer then the Chief Purchasing Officer has the option of accepting the lowest cost bid rather than negotiating.

g. The Chief Purchasing Officer is not prohibited from negotiating with vendors who maintain a General Service Administration Price Agreement with the United States of America, the State of Rhode Island, or any agency thereof, provided, however, that no contract executed under this provision shall authorize a price higher than is contained in the contract between the General Service Administration or the State of Rhode Island and the vendor affected.

h. Request for Best and Final Proposal

(1) On the basis of discussions with proposers, a request for best and final proposal, which describes the requirements of the purchase in the final form, shall be issued to all proposers still under consideration.

(2) Each proposer shall submit a best and final proposal, which defines their best price and other terms, for the purchase.

(3) Best and final proposals shall be evaluated and awarded to the responsible proposer whose proposal is determined in writing to be the most advantageous to the NBC taking into consideration price and the evaluation factors set forth in the RFP.

E. Noncompetitive Negotiation

1. In the event that all sealed bids submitted through a formal solicitation result in bid prices in excess of the funds available for the purchase, and the Chief Purchasing Officer determines in writing that there are no additional funds available from any source so as to permit an award to the lowest responsive and responsible bidder, and the best interest of the NBC will not permit the delay attendant to a re-solicitation under revised specification or for revised quantities under competitive sealed bidding, then a negotiated award may be made as set forth in this section.

2. Noncompetitive negotiation may be used to improve the price offered on the lowest evaluated bid price that is both responsive and responsible to any competitive bid.

3. The Chief Purchasing Officer may authorize the award of a contract on the basis of noncompetitive negotiation, where it has been determined in writing that:

a. Sole source purchasing is appropriate; or

b. The product or market in which a product is sold is noncompetitive in nature; or

c. Deceptive or exclusionary selling practices are in evidence.

4. Noncompetitive negotiation may be used to modify a contract during its performance, provided that no attempt is made to reduce the contractual obligations of the supplier, vendor, or contractor or the contract term is not extended except in response to a request by the supplier, vendor, or contractor in consideration for other substantive changes and where such extension of the contract term is determined in writing by the Chief Purchasing Officer to be in the NBC's best interest.

5. In all negotiations, the noncompetitive negotiation process, including, but not limited to: issues discussed, options considered, the rationale applied to decisions made, and agreements reached shall be documented in summary form and placed in the purchase order file.

1.4.2Truth in Negotiations: Requirement Cost or Pricing Data

A. A vendor/contractor shall submit cost or pricing data and shall certify that, to the best of his/her knowledge and belief, the cost or pricing data submitted is accurate, complete, and current as of a mutually determined date. The cost or pricing data is necessary when:

1. The pricing of any negotiated contract where the total contract price is expected to exceed fifty thousand dollars ($50,000); or

2. The pricing of any change order or contract modification which is expected to exceed twenty-five thousand dollars ($25,000) or such lesser amount in either instance as may be prescribed by the Chief Purchasing Officer and approved by the Board.

B. Applicability

1. The requirements of § 1.4.2(A) of this Part apply to all purchase order supplements over twenty-five thousand dollars ($25,000) incorporating an aggregate of changes equal to this value, e.g., an additive change of twenty thousand dollars ($20,000) and a deductive change of eleven thousand dollars ($11,000) are equal to an aggregate change value of thirty-one thousand dollars ($31,000) and this is subject to the requirements of § 1.4.2 of this Part.

2. The requirements of § 1.4.2 of this Part need not be applied to contracts where the price negotiated is based on adequate price competition, established catalogue or market prices of commercial items sold in substantial quantities to the general public, prices met by law or regulation, or in exceptional cases where it is determined in writing by the Chief Purchasing Officer that the requirements of §1.4.2 of this Part may be waived and the reasons for such waiver are stated in writing.

C. Cost or pricing data may include such verifiable factors as all vendor quotations, nonrecurring cost, changes in production methods and production of purchasing volume, data in support of contractor projection of business prospects and objectives, together with related costs of operations, unit cost trends such as those associated with labor efficiency, make-or-buy decisions and estimated resources to attain business goals, and any other management decisions that reasonably could be expected to have a significant bearing on cost under a proposed contract.

D. The requirement for submission of cost or pricing data is met when all data reasonably available to the vendor/contractor has been submitted or identified in writing at the time of agreement on price. The availability of books, records, and other documents without specific identification and explanation shall not be considered submission for the purpose of verification and agreement.

1.4.3 Subcontracting Requirements

A. Prime contractors shall require subcontractors to submit cost or pricing data for purchases in excess of fifty thousand dollars ($50,000) unless exempted herein.

B. Certification: Prime contractors shall require subcontractors to certify that cost and pricing data submitted are accurate, complete, and current as of the date of agreement on price.

C. Any contract, change, or modification thereto under which a certificate is required shall contain a provision that the price to the NBC, including profit or fee, shall be adjusted to exclude any significant sums by which the Chief Purchasing Officer finds that such price was increased because the contractor furnished cost or pricing data, as of the date agreed upon between the parties, which was inaccurate, incomplete, or not current.

D. Prime contractors must agree that the prime contract price shall be reduced in any significant amount by which the prime contract price was overstated because a subcontractor did not submit accurate, complete, and current cost or pricing data when required by law.

1.4.4Guidelines in Negotiations

A. The Chief Purchasing Officer shall be responsible for preparing a written statement at the conclusion of each negotiation phase setting forth the principal elements of the price negotiations.

1. Sufficient detail shall be recorded to reflect the most significant considerations controlling the establishment of the price.

2. If cost and pricing data were not required, a statement detailing the basis for determining that the price was fair and reasonable and the extent to which the data submitted was not a factor in the price negotiated shall be recorded.

B. All contracts shall contain a clause providing for a post award audit to be undertaken when, after an award, the NBC obtains information that submitted data was inaccurate, incomplete, not current, or if the data was not adequately verified at the time of negotiations.

C. To the extent possible, contracts shall contain language that provides for unit pricing of potential change orders.

D. The NBC may conduct or may obtain price analyses to ascertain whether the price quoted is fair and reasonable in relation to comparable purchases when the absence of open market competition precedes the use of sealed bidding.

E. In the negotiation of settlements of contracts that have been terminated:

1. Contract settlement shall be made in accordance with the terms specified in the purchase order.

2. In the absence of appropriate contract language, the vendor shall be paid a reasonable profit plus costs incurred from the effective date of the contract until the contract was terminated.

3. Penalties due to the NBC in accordance with a contract may be deducted from any payment to which a vendor is entitled.

F. Under contract provisions that provide for the reimbursement of costs, reimbursement shall be made only upon the presentation of documented, demonstrative evidence to the NBC that the vendor has incurred an eligible expense.

1.4.5 Modifications of Bids:

A. Correction or withdrawal of bids will be allowed only in the following circumstances:

1. A bidder will not be permitted to correct a bid mistake after bid opening that would cause such bidder to have the low bid unless the mistake is clearly evident from the bid documents and verified by the NBC, for example, an error in addition.

2. An otherwise low bidder may be permitted to correct a material mistake of fact in its bid, including price, when the intended bid is obvious from the bid document or is otherwise supported by proof that has evidentiary value. A low bidder will not be permitted to correct a bid for mistakes or errors in judgment.

3. In lieu of bid correction, a low bidder alleging a material mistake of fact will be permitted to withdraw its bid when there is reasonable proof, as determined by the NBC, that a mistake was made and the intended bid cannot be ascertained with reasonable certainty.

4. After bid opening, an otherwise low bidder shall not be permitted to make exceptions to the bid condition or specifications that affect price or substantive obligation; however, such bidder shall be permitted the opportunity to furnish other information called for by the invitation for bids and not supplied due to oversight, so long as it does not affect responsiveness.

835 R.I. Code R. 835-RICR-30-00-1.4