Mississippi Administrative Code › Title 36 - Technology › Part 2 - Information Systems Services › Chapter 7 - Procurement Types › Rule 36-2-7-207.2 - 013-030 Procurement Types: Sole Source

Current through June 25, 2024
ITS enabling legislation requires that information
				  technology equipment and services be acquired in a manner that insures the
				  maximum of competition among all manufacturers and suppliers of such equipment
				  and services. Accordingly, ITS promotes full and open competition through the
				  issuance of open specifications and the objective evaluation of vendor
				  proposals to determine the lowest and best offering to meet an agency's or
				  public university's business requirements. True competition protects the
				  integrity and credibility of purchasing in the public sector and is essential
				  in providing best value and adequate contractual protection for the purchasing
				  entity.
Mississippi Public Purchasing Law (Section
				  31-7-13)
				  specifies that noncompetitive items available only from one source may be
				  exempted from bid requirements (sole-sourced). ITS statute, in Section
				  25-53-5(p),
				  permits ITS to utilize provisions in Public Purchasing law or regulations, when
				  applicable. In certain limited situations, with appropriate written
				  documentation and proper approval, information technology acquisitions may be
				  sole-sourced.
A Sole Source Certification Request is an agency's or public
				  university's statement, with accompanying documentation, that there is no
				  competition in the marketplace for the requested product or service. Single
				  source acquisitions awarded without competition are exceptions that can only be
				  certified after thorough marketplace research. ITS applies a strict
				  interpretation of the single source definition and is a strong advocate for
				  conducting a competitive process unless the reasons for not competing are
overwhelming and incontrovertible
.
ITS Sole Source Procedure
The ITS Sole Source procedure is designed to allow agencies
				  and public universities to submit requests to ITS instead of to DFA when
				  approval of sole source information technology acquisitions is required per
				  Section
				  31-7-13
				  of the Mississippi Code. The ITS Sole Source Procurement Request Form, in
				  conjunction with the Sole Source Certification signed by the agency head or
				  public university CIO, has been designed to collect the necessary justification
				  and certification for an information technology sole source acquisition. A Sole
				  Source Certification Request Form should be completed for all information
				  technology sole source acquisition requests other than those delegated to the
				  agency or institution (See Section 015-010: State Agencies, and Section
				  015-020: IHLs for specific dollar limits for the delegation of Sole Source
				  approval to Agencies and Institutions of Higher Learning, as applicable).
Submit the Sole Source Certification Request to ITS rather
				  than to DFA. It is not necessary to submit duplicate paperwork to the DFA
				  Office of Purchasing, Travel, and Fleet Management (OPTFM) for approval of sole
				  source acquisitions. A copy of the Sole Source Certification Request Form is
				  available in PDF or Word format on the ITS website. Customers may also submit
				  sole source requests via ITS' online procurement request system. All sole
				  source certifications must be signed by the Executive Director of the agency or
				  the CIO of the public university, or that person's designee. Designees must be
				  identified by the agency or public university through formal written
				  correspondence to the ITS Executive Director.
ITS thoroughly reviews Sole Source Certification Requests,
				  determining if competing products and/or services exist. If so, ITS will
				  conduct a competitive procurement. If ITS' review confirms the sole source,
				  then a Sole Source advertisement will be issued, giving interested parties,
				  like other vendors, an opportunity to identify competing products and/or
				  services. Based upon the results of the Sole Source advertisement, ITS will
				  either certify the request as a sole source or conduct a competitive
				  procurement.
A CP-1 Acquisition Approval Document issued by ITS for the
				  amount of the sole source acquisition. Agencies that issue purchase orders
				  through DFA should note that this CP-1 is uploaded by ITS into MAGIC to
				  authorize payment of the sole source purchase.
Sole Source Criteria and Required Documentation
1. The product or services being
				purchased must perform a function for which no other product or source of
				services exists,
2. The purchaser
				must be able to show specific business objectives that can be met only through
				the unique product or services, AND
3. The product or services must be available
				only from the manufacturer and NOT through resellers who could submit
				competitive pricing for the product or services.
The purchasing agency or public university is responsible
				  for documenting its business needs in the sole source request, as well as the
				  ways in which the requested product or services meets those needs. In addition,
				  the purchaser should document why other products or services cannot
				  substantially meet the documented needs. If similar products or services exist
				  in the marketplace, the business case for the unique functionality or
				  characteristics of the sole-sourced item must be compelling for the procurement
				  to be sole-sourced under state statute.
The purchasing agency/public university should obtain and
				  submit to ITS a written proposal from the sole source provider. This proposal
				  should clearly document the exact product and services to be provided,
				  timeframes for delivery or service provision, and all associated pricing
				  information, including retail price, discount structure, volume-related tiered
				  pricing structures, ongoing support costs, and price escalation caps. If the
				  purchasing agency/public university prefers, the ITS staff assigned to the sole
				  source request can work with the vendor to obtain this information.
In addition to the above documentation from the purchaser,
				  certification from the manufacturer should accompany the Sole Source
				  Certification Request. This documentation supplements the sole source
				  justification but does not replace the purchaser's documentation of business
				  need. The manufacturer must certify, on company letterhead, the unique features
				  of the product or service within the marketplace and must also certify that the
				  product or service is available only through the manufacturer or from a single
				  specified distributor or reseller.
Additionally, acquisitions of IT services must include the
				  following information to be authorized as sole source:
1. An explanation about why the amount to be
				expended is reasonable, and
2. An
				explanation regarding the efforts by the purchaser to obtain the best possible
				price.
Per Mississippi Code annotated Section
				  25-9-120(3),
				  purchasers requesting sole source approval of services must provide an
				  explanation of why the amount to be expended for the service is reasonable, and
				  an explanation of the efforts to obtain the best possible price for the
				  service. Section 25-9 directs the efforts of the Personal Services Contract
				  Review Board and by policy and procedure, ITS follows similar documentation
				  requirements.
The following factors do
NOT
constitute valid
				  criteria for sole source designations:
*
Quality of the product or
				  services:
The competitive process has been established to
				  determine the lowest and best offering.
*
Price of the product or
				  services
: The competitive process has been established to
				  determine the lowest and best offering.
*
Product that performs in a unique
				  way but does not provide unique functionality
: A unique algorithm
				  or patented search process is not a sole source unless there is significant
functionality
that is only available through the requested
				  product.
*
Project timetable or other
				  scheduling constraints
: The emergency purchase statute was
				  established for situations meeting the statutory definition of "emergency," in
				  which the delay incident to following a competitive process would be
				  detrimental to the interests of the state. See 013-060 Emergency Purchases. In
				  some situations in which the need is immediate but an emergency purchase cannot
				  be justified, ITS can assist the purchasing entity in acquiring a temporary or
				  interim solution until a competition can be conducted.
*
Incumbent products or service
				  providers
: An award from a competitive process for the acquisition
				  of products or services does not constitute a permanent purchasing mechanism.
				  All products and services are re-evaluated from time to time to determine when
				  a full competition and potential replacement are warranted. For service
				  providers, this competition may include a reasonable learning curve for time
				  required by non-incumbents to become acclimated to the particular customer,
				  product, and/or environment.
*
Sole source designation by other
				  states:
Mississippi's sole source requirements are more stringent
				  than those in many other states.
Remember: The law says
single
source, not
best
source. Competition is used to
				  determine best source.
Benefits of Soliciting Proposals
It is always acceptable, and usually preferable, to solicit
				  bids or proposals for an acquisition even if the product or services requested
				  are believed to be unique in the marketplace. The benefits of soliciting
				  proposals for a sole source item include:
*
The purchaser develops a written statement of
				  requirements against which to evaluate the sole source offering
*
The vendor submits a written statement of
				  commitments and pricing for both initial and ongoing costs, against which the
				  purchaser can evaluate vendor and product performance and which can be
				  incorporated into a negotiated contract
*
The solicitation of written proposals
				  increases the potential of reduced price offerings and/or written guarantees
				  against excessive price escalation for a set contract period
Agency/Public University Responsibility
The purchasing agency/public university is responsible for
				  providing all necessary documentation and justification required to support a
				  sole source acquisition, as described above. If adequate documentation is not
				  provided with the request, ITS staff will work with the requestor's staff to
				  obtain sufficient information to certify the sole source. Note that ITS must
				  charge an hourly rate for the time required to obtain this additional
				  documentation.
The purchasing agency/public university is responsible for
				  making the sole source procurement within the amount and from the vendor
				  specified on the CP-1 Acquisition Approval Document.
Delegation of Sole Source Certification
State Agencies:
For state agencies,
				  approval of all technology purchases with a lifecycle cost of $5,000 or less,
				  including sole source purchases, has been delegated to the agency. The ITS
				  Procurement Limits Policies for Agencies require a minimum of two competitive
				  written bids or proposals for technology purchases with a lifecycle cost over
				  $5,000 but not over $50,000 (not over $25,000 for projects funded by the
				  American Recovery and Reinvestment Act). Since, for single source items, the
				  procuring agency will be unable to obtain two written bids, ITS must approve
				  all sole source acquisitions of information technology with a lifecycle cost
				  greater than $5,000.
IHLs
: Institutions of Higher
				  Learning (IHLs) or public universities have been delegated the authority to
				  certify sole source procurements up to $250,000 lifecycle cost under the ITS
				  Procurement Limits Policies for IHLs using the sole source procedures outlined
				  in this Handbook. For the certification of sole source procurements delegated
				  to the CIOs at public universities, the public university must follow ITS' Sole
				  Source Procedure, including advertisement of the intent to award as sole
				  source, as outlined in this chapter. Institutions certifying a sole source
				  purchase must ensure the criteria listed above are met and documented in
				  writing by the institution and the vendor prior to certifying a product or
				  service as sole source. Sole source documentation must be reviewed and approved
				  by the IHL's CIO for any sole-source certification above $5,000. The ITS sole
				  source procedure requires that sole sources be advertised in a newspaper of
				  statewide circulation for 2 consecutive weeks prior to award. Additionally,
				  Registers of Objectors and Notifications of Award must be posted, and a
				  post-purchase comparison of the award to the purchase documents must be
				  conducted by the IHL CIO. All sole source documentation should be retained in
				  the public university's procurement file. Sole source requests above $250,000
				  lifecycle cost require ITS approval. For purposes of periodic recertification
				  of sole sources, the delegated limit of $250,000 is for each certification
				  period, as opposed to a cumulative total.
Other than the delegations outlined above, all sole source
				  technology procurements must be certified by ITS. ITS cannot exempt a sole
				  source request--the ITS Exemption Request and ITS Sole Source Request are
				  mutually exclusive.
Refer to 009-001 ITS Procurement Process Flows for
				  additional information, specifically the flow labeled Sole Source
				  Certifications.
25-53-5 (p); 31-7-13;
				  25-9-120