Attorney General Opinion No. 10-12

Among the statutory exceptions to the general requirement that state agencies use competitive solicitations when making acquisitions are the statutes and administrative rules relating to the State Use Committee which exists within the OMES Purchasing Division. State Use Committee contracts are mandatory contracts and whenever a state agency intends to procure a product or service included in the State Use Committee’s procurement schedule, the agency shall secure the product or service from a State Use contractor regardless of the acquisition purchase price. The only exception to the mandate is if the product or service is not available within the period required by the entity.  Pursuant to 74 O.S. §3007.B. a state agency is prohibited from evading the purchase of individual products or services listed on the State Use Committee's procurement schedule, by issuing a solicitation for products or services that is a slight variation from the standards adopted by OMES.

The proper test to apply in determining whether a solicitation by a state agency violates State Use statutes is found within the language of 74 O.S. §3007 and turns on whether a particular solicitation is for "any product or service included in the procurement schedule." This test must be applied to each solicitation on a case-by-case basis. For example, a solicitation for prepared soup is not a violation of the intent of the State Use statutes even though it includes individual items on the schedule such as pasta, peas and beans, because the product of prepared soup is not an item on the procurement schedule. Likewise, a solicitation for a comprehensive package of computer parts and services would not violate the intent of the State Use statutes even though the State Use procurement schedule includes an individual item such as toner, because the product/service of comprehensive computer services is not on the procurement schedule.

The determination of whether any purchase by a state agency violates the intent of the State Use laws is the responsibility of the State Use Committee.  See 74 O.S. §§3007 and 3009.

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Attorney General Opinion No. 09-22

Pursuant to 74 O.S. §3007, the fair market price of products and services on the procurement schedule established by the State Use Committee must be determined before procurements can be made.

Regarding products and services on the procurement schedule for which the price does not vary by agency, location or specifications, the fair market price is determined before procurement by vote of the State Use Committee upon the recommendation of the contracting officer after the market analysis required pursuant to OAC 260:120-1-4.

Regarding products and services on the procurement schedule for which the price does vary and a fair market price has not been established, the contracting officer is authorized, with the approval of the State Purchasing Director, to award a contract to a State Use supplier and establish a fair market price in accordance with the State Use Fair Market Price Policy.  The Policy is an internal policy which more specifically describes the methodology to be used by the contracting officer in conducting the market analysis required by OAC 260:120-1-4.  The fair market price is subject to ratification by the State Use Committee.

Similarly, regarding emergency purchases, with approval of the State Purchasing Director, the contracting officer may award a contract for a maximum of three months to a State Use supplier after determining a fair market price in accordance with applicable administrative rules and the State Use Fair Market Price Policy, which is subject to ratification by the State Use Committee. 

Citing the application that specific language will control over general language in statutes when there is a conflict between the two, the Opinion determined the State Use Committee has sole authority to prescribe rules which carry out the purposes of the State Use statutes and the OMES Director has the more general authority to promulgate rules governing the Purchasing Division and state agency acquisitions under the Central Purchasing Act.

Pursuant to 74 O.S. §3008, procurements made pursuant to the State Use statutes are not subject to the competitive bid requirements of the Central Purchasing Act.  No other provisions of the State Use statutes or rules require a competitive bidding process and, citing the conclusion in Attorney General Opinion 06-23, the State Use Committee does not have the authority to issue requests for proposals and contracts with State Use suppliers are not awarded through a RFP process.  Therefore, the State Use procurement process is an open market bid process and is not subject to a competitive bid process prior to procurement or the determination of a fair market price by the State Use Committee.  See 74 O.S. §§3007, 3008 and 3009 and OAC 260:120-1-4.

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Attorney General Opinion No. 06-23

The State Purchasing Director may only cancel contracts with State Use Committee suppliers for reasons specified by OAC 260:115-9-9 or as authorized by terms of the contract. The statutory authority and responsibility of the State Purchasing Director for all acquisitions used or consumed by state agencies would necessarily include the power to specify procedures agencies must follow in ordering acquisitions.  The Opinion concluded the State Purchasing Director may implement an internet-based system of purchasing goods as long as orders for products on the State Use procurement schedule are routed to State Use suppliers. However, neither the statutes nor the rules governing the State Use program expressly, or by implication, authorize or impose a requirement that State Use suppliers may be required to subcontract with the entity providing the internet-based ordering system in order to sell to state agencies. 

Unless otherwise provided by law, the State Purchasing Director has sole authority over state purchasing contracts, including the issuance of Requests for Proposals for acquisitions by state agencies. The State Use Committee does not have authority to enter into contracts or to issue or authorize Requests for Proposals. The Committee qualifies the suppliers, prepares the procurement schedule and establishes the fair market price of goods and services on the schedule but does not enter into contracts with suppliers. Contracts with suppliers on the Committee procurement schedule are between the supplier and the Purchasing Division of OMES. Contracts with State Use suppliers are not awarded through a RFP process, but rather, are awarded by the Purchasing Division after approval of the supplier by the State Use Committee and the inclusion of the supplier’s products and services on the procurement schedule. Because state agencies may purchase items on the procurement schedule from other suppliers where the items are not available from State Use suppliers within the time frame required by the agency and when the agency has a waiver from the contracting officer assigned to the State Use Committee, the State Purchasing Director may issue a RFP for items listed on the procurement schedule.

It would not be a fair competition if a bidder had advance notice of the terms of an RFP, such as would be the case if the bidder assisted in preparing the RFP. Citing Medco Behavioral Care Corp. v. State of Iowa Dep't of Human Serv., 553 N.W.2d 556 (Iowa 1996), the Opinion states "In such cases the concern is that the firm could either skew competition in favor of itself when developing the terms of the procurement, or, through its inside knowledge of the agency's requirements, gain an unfair advantage in the competitive bidding process.". Therefore, an entity may not be awarded a contract for the sale of software to a state agency if the entity has, through a professional services contract, provided assistance to the agency in developing a RFP for the purchase of such software.

Depending upon the particular facts and circumstances of the business relationship, it may be a conflict of interest for an entity to sell services to a state agency if a partner of the entity has, through a professional services contract, provided assistance to the agency in developing a RFP for the purchase of such services. If a partner of an entity that assisted in the preparation of a RFP is in a position to obtain advance information about the terms of the RFP from such entity, then the prohibition against bidding on the RFP would extend to the partner of the entity as well; however, the determination of an actual conflict of interest is a question of fact outside the scope of this Opinion. See 74 O.S. §§85.5; 3004, 3005 and 3007; OAC §§260:115-7-3, 115-7-23 and 115-9-9.

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Attorney General Opinion No. 80-94

State colleges and universities are exempt from the Central Purchasing Act. However, if any such institution chooses to utilize the central purchasing procedure, any purchase made on its behalf by the Purchasing Division would be subject to applicable Central Purchasing Act provisions in the same manner as any other purchase made on its behalf by the Division. See 74 O.S. §85.3A.

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74 O.S. § 85.7. Competitive Bid or Proposal Procedures

1. 1. Except as otherwise provided by the Oklahoma Central Purchasing Act, no state agency shall make an acquisition for an amount exceeding Fifty Thousand Dollars ($50,000.00) or the limit determined by the State Purchasing Director pursuant to rules authorized by Section 85.5 of this title, not to exceed One Hundred Thousand Dollars ($100,000.00), without submission of a requisition to the State Purchasing Director and submission of suppliers’ competitive bids or proposals to the State Purchasing Director.
   2. Any acquisition a state agency makes shall be made pursuant to the Oklahoma Central Purchasing Act and rules promulgated pursuant thereto.
      1. Split purchasing for the purpose of evading the requirement of competitive bidding shall be a felony.
      2. The State Purchasing Director may waive or increase the limit authorized for a state agency acquisition by not more than ten percent (10%) to perfect an otherwise valid acquisition inadvertently exceeding the limit due to administrative error by the state agency or unforeseeable circumstances. The state agency shall request a waiver upon the discovery of the error or circumstance to the State Purchasing Director on a form the Director requires.
      3. The State Purchasing Director shall report all requests for waivers or increases, stating the amount and whether the request was granted or denied, monthly to the Governor, President Pro Tempore of the Senate, and Speaker of the House of Representatives.
   3. 1. Contracts for master custodian banks or trust companies, investment managers, investment consultants, and actuaries for the state retirement systems, CompSource Oklahoma, Oklahoma Employees Insurance and Benefits Board, pension fund management consultants of the Oklahoma State Pension Commission and the Commissioners of the Land Office, and other professional services as defined in Section 803 of Title 18 of the Oklahoma Statutes shall be exempt from competitive bidding procedures of this section and requisition requirements of Section 85.4 of this title.
      2. Contracts with financial institutions to act as depositories and managers of the Oklahoma College Savings Plan accounts shall be exempt from competitive bidding procedures.
      3. A state agency that makes an acquisition pursuant to this paragraph shall notify the State Purchasing Director within fifteen (15) days following completion of the acquisition. The Office of Management and Enterprise Services shall compile a list of the exempt contracts and send the list to a member of the Appropriations and Budget Committee of the House of Representatives or Appropriations Committee of the Senate, if the member requests.
   4. Requisitions pursuant to this section shall not be required prior to emergency acquisitions by a state agency not exceeding One Hundred Thousand Dollars ($100,000.00). The state agency shall submit a requisition to the State Purchasing Director within five (5) days following the acquisition together with a statement of the emergency. The State Purchasing Director shall send the requisition and a written analysis to the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives specifying the facts and circumstances giving rise to the emergency requisition.
   5. Requisitions pursuant to this section for acquisitions to alleviate a serious environmental emergency shall not be required if, upon receiving a request from the Chair of the Corporation Commission and after having examined the facts and circumstances of the case, the Governor certifies in writing the existence of a serious environmental emergency. For the purposes of this section, “serious environmental emergency” means a situation within the jurisdiction of the Commission:
      1. in which serious damage to the environment will quickly occur if immediate action is not taken and the damage will be so significant that the urgent need for action outweighs the need for competitive bids, or
      2. a situation in which human life or safety is in imminent danger or significant property interests are threatened with imminent destruction.
   6. Acquisitions for repairs of equipment in emergencies, of livestock through a market agency, dealer, commission house, or livestock auction market bonded or licensed under federal or state law, the purchase or collection of semen or embryos, and the placement of embryos into recipient livestock shall not require requisitions pursuant to this section or any other provisions of the Oklahoma Central Purchasing Act.
   7. The Board of Directors of the Oklahoma Historical Society shall select suppliers for the restoration of historical sites and museums and shall not be subject to the requisition requirements of this section or any other provision of the Oklahoma Central Purchasing Act. The Board may send a requisition to the State Purchasing Director and request supplier bid or proposal submission procedures, but supplier and bid selection will be the prerogative of the Board and will be based on contractors’ documented qualifications and experience.
   8. Purchases of postage by state agencies shall be made pursuant to Sections 90.1 through 90.4 of this title.
   9. Sole source or sole brand acquisitions by a state agency or the State Purchasing Director shall comply with Section 85.45j of this title.
   10. 10.Acquisitions for the design, development, communication, or implementation of the state employees flexible benefits plan shall not be subject to the requirements of this section; provided, that the Flexible Benefits Advisory Council shall use procedures consistent with the competitive bid requirements of the Oklahoma Central Purchasing Act.
   11. 11.
       1. Any acquisition of a service which the Office of Management and Enterprise Services has approved as qualifying for a fixed and uniform rate shall be made pursuant to provisions of this paragraph.
       2. The Office of Management and Enterprise Services shall establish criteria and guidelines for those services which may qualify for a fixed and uniform rate.
       3. Fixed and uniform rate contracts authorized by this paragraph shall be limited to contracts for those services furnished to persons directly benefiting from such services and shall not be used by a state agency to employ consultants or to make other acquisitions.
       4. Any state agency desiring to have a service qualified for a fixed and uniform rate shall make a request for service qualification to the Office of Management and Enterprise Services and submit documentation to support the request. The Office of Management and Enterprise Services shall approve or deny the request. If the Office of Management and Enterprise Services approves the request, the state agency shall establish a fixed and uniform rate for the service. No contracts shall be entered into by the state agency until the rate has been approved by the state agency in a public hearing. The proposed rate shall be clearly and separately identified in the agenda of the state agency for the hearing and shall be openly and separately discussed during such hearing. The state agency shall notify the Director of the Office of Management and Enterprise Services of its pending consideration of the proposed rate at least thirty (30) days before the state agency is to meet on the proposed rate. The state agency shall deliver to the Director of the Office of Management and Enterprise Services a copy of the agenda items concerning the proposed rate with supporting documentation. The Director of the Office of Management and Enterprise Services shall communicate any observation, reservation, criticism, or recommendation to the agency, either in person at the time of the hearing or in writing delivered to the state agency before or at the time of the hearing. The Director of the Office of Management and Enterprise Services shall specifically note in the written communications whether the Director of the Office of Management and Enterprise Services has determined the rate to be excessive. Any written communication presented in the absence of the Director of the Office of Management and Enterprise Services shall be presented orally during the public hearing. Whether made in person or in writing, any comment made by the Director of the Office of Management and Enterprise Services shall be made a part of the minutes of the hearing in full.
       5. Within two (2) weeks after the convening of the Legislature, the administrative officer of the state agency shall furnish to the Speaker of the House of Representatives, the President Pro Tempore of the Senate and to any member of the House or Senate, if requested by the member, a complete list of all of the types of services paid for by uniform fixed rates, the amount of the rate last approved by the agency for the service, and the number of contracts then in existence for each type of service. Any rate which has been determined to be excessive by the Director of the Office of Management and Enterprise Services shall be specifically identified in the list by the state agency.
       6. At any time, the Director of the Office of Management and Enterprise Services may review, suspend, or terminate a contract entered into pursuant to the provisions of this paragraph if the Director of the Office of Management and Enterprise Services determines the contract is not necessary, is excessive, or is not justified.
   12. 12.Specifically prescribed nonmedical adaptive technology-related acquisitions for individuals with disabilities who are clients of the State Department of Rehabilitation Services and which are prescribed by a physician, rehabilitation engineer, qualified rehabilitation technician, speech therapist, speech pathologist, occupational therapist, physical therapist, or qualified sensory aids specialist, and other client acquisitions, shall not be subject to the requisition requirements of this section. The Commission for Rehabilitation Services shall develop standards for the purchase of such acquisitions and may elect to utilize the Purchasing Division for an acquisition. The standards shall foster economy, provide a short response time, include appropriate safeguards, require written records, ensure appropriate competition for economical and efficient purchasing, and shall be approved by the State Purchasing Director.
   13. 13.The Department of Human Services shall develop procedures for acquisitions of specifically prescribed nonmedical assistive technology-related items not exceeding the acquisition purchase amount requiring a requisition pursuant to this section for individuals under sixteen (16) years of age who are recipients of Supplemental Security Income which are prescribed by a physician, qualified sensory aids specialist or qualified special education instructor. The procedures shall reflect standards for the acquisition of such nonmedical assistive technology-related items, may provide for utilization of the Purchasing Division when appropriate, shall foster economy, provide a short response time, shall include appropriate safeguards and written records to ensure appropriate competition and economical and efficient purchasing, and shall be approved by the State Purchasing Director.
   14. 14.
       1. Structured settlement agreements entered into by the Attorney General’s office in order to settle any lawsuit involving the state, the Legislature, any state agency or any employee or official of the state shall not be subject to the competitive bidding requirements of this section if:
          1. prior to entering into any contract for the services of an entity to administer a structured settlement agreement, the Attorney General receives proposals from at least three entities engaged in providing such services, and
          2. The selection of a particular entity is made on the basis of the response to the request which is the most economical and provides the most competent service which furthers the best interests of the state.
       2. A list of any such structured settlement agreements entered into by the Attorney General with summary thereon for the previous calendar year shall be submitted to the Speaker of the House of Representatives and the President Pro Tempore of the Senate on January 31 of each year.
   15. 15.Acquisitions a state agency makes pursuant to a contract the State Purchasing Director enters into or awards and designates for use by state agencies shall be exempt from competitive bidding procedures.
   16. 16.The Commission on Marginally Producing Oil and Gas Wells shall be exempt from the competitive bid requirements of this section for contracts with local suppliers for the purpose of holding special events and exhibitions throughout the state.
   17. 17.Agreements entered into by any state agency with the United States Army Corp of Engineers in order to provide emergency response or to protect the public health, safety, or welfare shall not require requisitions and shall not be subject to competitive bidding requirements of this section.
   18. 18.Notwithstanding any other provision of law, the State Purchasing Director may exempt a procurement from the requirements of this section when in the State Purchasing Director’s discretion unusual, time- sensitive or unique circumstances exist which make such exemption in the best and immediate interest of the state. As used in this subsection, “State Purchasing Director” means the administrative head of the Purchasing Division of the Office of Management and Enterprise Services and shall not mean a designee. Any acquisitions made pursuant to this paragraph shall be described in detail and publicly posted through the transparency portal provided in Section 34.11.2 of Title 62 of the Oklahoma Statutes. The description shall include the name of the supplier, cost of the acquisition, and reason for exemption under the provisions of this subsection, the cost savings resulting from the purchase, and a description of benefits to the state. The State Purchasing Director shall take no action under the provisions of this paragraph prior to the publication of a document describing the significant savings that will be realized by the state. The document shall provide a detailed comparison of the acquisition with comparable items and clearly detail the savings.

1. Acquisitions shall be awarded to the lowest and best, or best value, bidder at a specified time and place, which shall be open to the public.
2. Bids for professional service contracts for an amount requiring submission of requisitions to the State Purchasing Director shall be evaluated by the State Purchasing Director and the state agency contracting for such service. Both cost and technical expertise shall be considered in determining the lowest and best, or best value, bid. Further, the state agency shall present its evaluation and recommendation to the State Purchasing Director. A documented evaluation report containing the evaluations of the State Purchasing Director and the state agency contracting for such service shall be completed prior to the awarding of a professional service contract and such report shall be a matter of public record.
3. When requested by CompSource Oklahoma, the Oklahoma Employees Insurance and Benefits Board, or the governing board of a state retirement system authorized to hire investment managers, the Office of Management and Enterprise Services shall assist the requesting body in the process of selecting investment managers. When requested by the Flexible Benefits Advisory Council, the Office of Management and Enterprise Services shall assist the Council in the process of selecting contracts for the design, development, communication, or implementation of the state employees flexible benefits plan.
4. Except as otherwise specifically provided by law, the acquisition of food items or food products by a state agency from a public trust created pursuant to Sections 176 through 180.56 of Title 60 of the Oklahoma Statutes shall comply with competitive bidding procedures pursuant to the provisions of this section.
5. Cooperative contracts shall not be utilized unless the purchasing cooperative and its affiliated suppliers have complied with all provisions of the Oklahoma Central Purchasing Act.