Policy

.01

APPLICABILITY

This Service Contracting Policy is applicable to all executive branch contracts under the purview of the Rules of the Department of Finance and Administration (F&A), Chapter 0620-3-3.  The various departments, institutions, boards, commissions, and agencies of the legislative and judicial branches of state government may elect to conform with their own or F&A regulations.  The Central Procurement Office is involved with the processing of contract documents initiated by an agency this is either subject or chooses to be subject to DGS regulations.

see Rule: 0620-3-3-.01

.01a

F&A REGULATIONS VS. GENERAL SERVICES REGULATIONS

If there is a question as to whether a procurement should be subject to Department of General Services (DGS) or F&A regulations, the Chief Procurement Officer will resolve the issue. 

see Rule: 0620-3-3-.01(2)

.01b

PURCHASE LESS THAN $1,000

An Authorization to Vendor Less Than $1,000 shall NOT apply to a(n):

• Endowment Grant,

• delegated authority (of any type),

• No Cost Contract,

• Revenue Contract, or

• Department of Transportation construction and engineering procurement made in accordance with the provisions of Tennessee Code Annotated, Sections 54-5-113, et. seq..

An Authorization to Vendor Less Than $1,000 may NOT be used to reimburse or compensate an individual or contractor for travel.

An Authorization to Vendor Less than $1,000 format, properly completed pursuant to Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html), may be used (instead of a standard contract) for a purchase ONLY when ALL of the following are true:

(1)    the purchase is subject to the Rules of F&A, Chapter 0620-3-3;

(2)    the total cost of the service is LESS THAN $1,000;

(3)    the purchase did NOT result from procurement requirements being artificially divided in order to make the purchase by means of an Authorization to Vendor Less than $1,000;

(4)    the procuring agency's annual needs for the subject service are not likely to exceed the total cost of $1,000;

(5)    the procuring agency's annual needs for the subject service could not otherwise be more advantageously met with a fee-for-service contract;

(6)    the procurement does NOT require expenditures from more than one fiscal year;

(7)    the purchase does NOT involve buying financial management, auditing, accounting, management services of all types, management studies, planning services, public relations, evaluations, systems designs, data processing, engineering, or architectural services;

(8)    the amount authorized as payment for the subject services does NOT include a specified reimbursement or other compensation for travel;

(9)    the authorized service provider is a Vendor (as defined by OMB Circular A-133);

(10)   the authorized service provider is NOT, or within the past six months has NOT been, a state employee OR an entity in which a controlling interest is held by an individual who is, or within the past six months has been, a state employee (note: an individual shall be deemed a state employee until such time as all compensation for salary, termination pay, and annual leave has been paid); AND

(11)   the state will make ONLY ONE (1) payment after the delivery of service.

see Rule: 0620-3-3-.01(6)

.01c

CONTRACT FOR LEGAL SERVICES

see Rule: 0620-3-3-.01(7)

.01c-1

State Legal Consultation

The Attorney General, Governor, and Chief Procurement Officer must approve a contract for the provision of legal services, consultation, or advice to the state of Tennessee.  Contracting agency staff must obtain those required signatures by submitting the contract document to:  (1) the Attorney General;  (2) the Governor's Legal Counsel; and (3) F&A's General Counsel. 

Only after the Attorney General, Governor, and Chief Procurement Officer have approved the contract document, the contracting agency may submit it to the Central Procurement Office for Contract Number assignment, data collection, funding certification, coordination with the Comptroller as necessary, and state accounting system release.

The Summary Cover service description field for such a contract should specifically detail that the contract was approved in compliance with Tennessee Code Annotated, Section 8-6-106.

.01c-2

Third Party Legal Consultation

A contract for the provision of legal services, consultation, or advice to clients or beneficiaries of state programs (and NOT to the state of Tennessee) must be procured and drafted in accordance with F&A Service Contracting regulations.

.02

CPO REVIEW

The Central Procurement Office is responsible for processing documents (including the review of service procurement documentation, contracts, and associated requests for approval) initiated by an agency that is either subject or chooses to be subject to CPO regulations. 

The CPO address for messenger mail is:

Department of General Services

Central Procurement Office
3rd Floor, William R. Snodgrass Tennessee Tower
Nashville, Tennessee 37243

If document hand delivery is elected, contracting agency staff must hand deliver the document(s) to the Drop Box located in reception area at the address above (so that they are properly logged, tracked, and acted upon).  Contracting agency staff should NEVER hand deliver documents directly to CPO staff. 

If formal request e-mail delivery is elected, contracting agency staff must e-mail the request to the Central Procurement Office in compliance with the following requirements:

• Each request document (completed as prescribed in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html)) must be signed by or on behalf of the contracting agency head and in accordance with the agency's Signature Certification and Authorization on file with CPO.

• Each request document and any associated attachments must be scanned to ONE (1) PDF file. 

• The resulting PDF document must be completely clear, legible, and without background color.

• Each request document (ONLY ONE) must be attached to its own, separate e-mail.

• Each formal request e-mail must be sent to: Shay.Oliphant@tn.gov
  (do NOT send these e-mails (or copies) to any other staff e-mail address).

see Rule: 0620-3-3-.02

.02a

CONTRACT NUMBERING

Upon receipt of a contract or delegated authority submitted for approval processing, the Central Procurement Office will assign the document a Contract Number comprised of the following components:

(1)    a prefix identifying the type of contract document (as indicated below)

(2)    a 2-digit number identifying the contract start date fiscal year

(3)    a 5-digit number uniquely identifying the subject contract

Additionally, a 2-digit suffix (e.g., 01, 02, 03) will be added to identify the subject contract document as a contract amendment as may be appropriate (a "00" may be added to the number of a base contract).

Examples: 

A base, fee-for-service contract with a term beginning in FY 1998 may be numbered: FA9812345.

The first amendment of this example contract would be numbered:  FA9812345-01.

.02b

MODELS AND FORMATS

Models and formats detailed in the Service Contracting Models (posted on the State Intranet at www.intranet.tn.gov/finance/sourcing/model.html) constitute the policy for drafting professional service contracting documents against which CPO staff will review each document, respectively.

.02c

PROFESSIONAL SERVICE CONTRACTING DATA

Central Procurement Office staff will collect selected data from contracting documents routed for approval and will report and make said data available as appropriate.

.02d

SERVICE CONTRACTING COORDINATOR

Each state agency head must designate a Service Contracting Coordinator and up to three alternate RFP Coordinators, and provide contact information for each to the Central Procurement Office.  The designated Service Contracting Coordinator is responsible for all of her/his agency's service procurements, contracts and delegated authorities. The Service Contracting Coordinator serves as her/his agency's primary RFP Coordinator.  The Service Contracting Coordinator is also responsible for all agency communications with Central Procurement Office staff as well as for disseminating service contract information to appropriate agency staff.  

Refer to policy section .03a-1a below for RFP Coordinator qualifications and responsibilities.

.03

PROCUREMENT METHODS

A procurement method is the process by which the contracting agency selects a party with whom it will contract and is applicable to no cost, revenue, and fee-for-service contract types (a grantee selection process, determined at the discretion of the grantor agency, is the process by which the state makes a grant award).  

The following table details threshold, contract amounts and the simplest procurement methods that the contracting agency may use to buy service.  The procuring state agency may use the procurement method indicated or a more formal, structured method.

see Rule: 0620-3-3-.03

.03a

REQUEST FOR PROPOSALS (RFP)

An RFP process MUST follow ALL of the requirements detailed in the text of the approved RFP document as may be amended. 

The following guidelines provide a supplemental resource to assist Service Contracting Coordinators and RFP Coordinators in guiding a standard RFP processes (in which contract award is based upon the responsive and responsible Proposer offering the best evaluated combination of general qualifications and experience, technical approach, and cost).  Except those that are only fitting for the standard RFP or that are clearly not applicable to a given procurement, these guidelines also support the implementation of a cost-based award RFP as well as an RFP to award either a No Cost or Revenue contract.

see Rule: 0620-3-3-.03(2)

.03a-1

Roles & Responsibilities

Soon after the contracting agency identifies a service need, it should determine who will be involved in the procurement process.  Each player in the process should understand his or her responsibilities and be both willing and able to meet them.

.03a-1a

RFP Coordinator.  The experience, influence, and consistency of RFP Coordinators are critical to the successful completion of RFP processes.  RFP Coordinator responsibilities include:

(1)    support program staff in drawing the RFP;

(2)    manage the RFP process;

(3)    instruct the Proposal Evaluation Team regarding the RFP process, the terms of the subject RFP, and the evaluation process detailed in the RFP so that team members understand the RFP process and their responsibilities in it;

(4)    manage proposal evaluations;

(5)    oversee proposal reviews for responsiveness to requirements;

(6)    coordinate any consultations and financial reviews;

(7)    oversee proposal scoring calculations; and

(8)    maintain the procurement file with all relevant documents.

An RFP Coordinator should NOT serve as a member of a Proposal Evaluation Team.

.03a-1b

Proposal Evaluation Team.  The number of Proposal Evaluation Team members may vary but should consist of at least three members.  Only state employees may serve as members.  Each member selected by the procuring state agency to analyze proposals submitted in response to an RFP should have sufficient technical knowledge to be able to effectively evaluate the technical proposals (or an assigned portion thereof).

Before the commencement of the evaluation process, the Proposal Evaluation Team should review RFP-related DGS Rules and Service Contracting Policy as well as the subject RFP document.  All team members should understand the general RFP requirements and the specific requirements of the subject RFP.

Only Proposal Evaluation Team members are permitted to score proposals (or find a proposal non-responsive or unsuitable for further evaluation).

see Rule: 0620-3-3-.03(2)(h)1

.03a-1c

Proposal Evaluation Counsel.  The RFP Coordinator and other consultants may review proposals and offer Proposal Evaluation Team counsel during an RFP process.  However, the input of those who are not members of the Proposal Evaluation Team must be limited to reporting advice and conclusions to the team for its consideration.  Any such advice or conclusions must be documented in writing.

.03a-2

Conflict Of Interest

NO individual, company, or other entity involved in assisting with the development or drafting of an RFP or the associated scope of service should have a financial interest in a potential contractor or have the appearance of a conflict of interest with regard to the RFP or potential proposers.  Further, NO RFP Coordinator, Proposal Evaluation Team member, or consultant in an evaluation process should have a financial interest in or have any other apparent conflict of interest with regard to an actual proposer.

Ensuring the independence of each person assisting with the development or drafting of an RFP, the associated scope of service, or the evaluation of proposals is the contracting agency's responsibility.  The contracting agency may use the standard RFP Conflict of Interest Disclosure Statement format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) for the purpose of documenting the independence of each person involved with an RFP.

see Rule: 0620-3-3-.03(2)(c) & Rule: 0620-3-3-.03(2)(h)2

.03a-3

RFP Document

The contracting state agency must comply with the RFP and related Service Contracting Models  (www.intranet.tn.gov/finance/sourcing/model.html) to draft an RFP document. 

Deviations from the model language that are not specifically permitted by relevant regulations or instructions may require an approved written exception to rules 0620-3-3-.03(2)a and 0620-3-3-.05.  The Rule Exception Request (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the CPO will return the documentation that contracting agency staff must later submit to CPO services staff along with the first draft of the RFP.

see Rules: 0620-3-3-.03(2)(a)&(b)

.03a-3a

Standard RFP Evaluation Criteria.  The proposal evaluation criteria detailed within an RFP should be designed to provide for a reasonable determination of whether and to what extent each proposer can perform the scope of service as required.  The requirements within each evaluation area must be detailed in the RFP so that each proposer will understand and provide the necessary information.  The areas of evaluation usually include:

(1)    mandatory requirements (these minimum requirements for responsiveness may not be arbitrary);

(2)    general qualifications and experience (i.e., organization background, resources, proposer background with the subject service, key staff experience, and past work performed for the state and other clients);

(3)    technical approach (i.e., project understanding, approach, and management); and

(4)    cost.

The model RFP language for the technical proposal section was NOT drafted to include all technical components necessary for a procurement and the effective evaluation of proposals.  Accordingly, contracting agency program staff should critically review the model RFP technical approach section and revise it as appropriate to best meet the needs of the procurement.

Once the evaluation criteria and specific requirements are drafted, contracting agency staff must assign weights to the major areas of evaluation depending upon the nature of the subject service and may also assign additional weights within a major area as indicated in RFP model instructions.

.03a-4

RFP Document Approval

Contracting agency staff must comply with the following steps to obtain RFP document approval.

(1)    Obtain endorsement documentation applicable to the service sought (as indicated in the table below), and submit the signed endorsement documentation to CPO staff along with the first RFP draft submitted for approval processing.  (The procurement endorsement request formats in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) for this required documentation.) 

(2)    Submit a draft RFP document to the Central Procurement Office for approval processing at least thirty (30) days before the contracting agency's desired release date.  (Notwithstanding compliance with this deadline and the fact that reviewers will make efforts to accommodate the desired release date, circumstances may necessitate a delay of the release date.)

(3)    Submit the draft to the Central Procurement Office as a digital file, in DOC format, attached to an e-mail to the CPO examiner assigned to the contracting agency.  (The examiner will log the RFP draft, review it, and confer with contracting agency staff by means of review notes and redrafts exchanged by e-mail.)

(4)    Address and redraft the RFP per each set of CPO review notes.  (Upon finding a draft acceptable, the CPO examiner will e-mail the RFP draft to Comptroller staff.  Comptroller staff will review it and confer directly with contracting agency staff by means of review notes and redrafts exchanged by e-mail.) 

(5)    Address and redraft the RFP per each set of Comptroller staff review notes.  (Comptroller staff will e-mail release approval notice to both the contracting agency and CPO when a draft is found acceptable for release.)

(6)    Prepare the approved RFP draft for public release by removing any review process highlighting, changing all text to an appropriate color, removing any draft number or other extraneous notations, and combining (or separating, as may be necessary due to file size or clarity) the document.

(7)    On the business day before the date approved for public release, e-mail the approved RFP final document to the CPO examiner assigned to the contracting agency.  The document must be comprised by one or more (clearly and logically separated component) digital files in PDF or DOC format (additionally, if pre-approved, the cost proposal attachment may be submitted for public release in XLS, spreadsheet format).

(8)    Confirm that CPO staff has properly posted the digital document(s) for public review via the Internet at: http://tn.gov/generalserv/cpo/sourcing/rfp.shtm.

.03a-5

RFP Amendment & Clarification

Before public release, the contracting agency must obtain CPO approval of each RFP amendment (including the state's written responses to proposer questions and issues which constitute an RFP amendment).

If a proposed amendment involves one or more substantive RFP revisions, the Central Procurement Office will require that approval is also subject to Comptroller staff approval.

Contracting agency staff must send a copy of each RFP amendment to the Comptroller's Office of Management Services at the time of the amendment's public release.

.03a-6

Proposal Solicitations

The contracting agency is responsible for compiling a list of potential contractors to whom an RFP or RFP notice will be sent (to solicit proposals). 

.03a-6a

Internet Posting.  On the business day before the scheduled public release, contracting agency staff must submit to the Central Procurement Office a digital copy of the approved RFP (including all attachments) as ONE (1) electronic file in PDF format.  The CPO will post each RFP on the Internet at: http://tn.gov/generalserv/cpo/sourcing/rfp.shtml.

Likewise, on the business day before the scheduled public release, contracting agency staff must submit to the CPO a digital copy of each approved RFP Amendment (including all attachments) as ONE (1) electronic file in PDF format.  CPO will post each RFP amendment with the associated RFP on the Internet.

Contracting agency staff may send an e-mail notice to potential proposers referring them to the Internet address above (rather than using state funds to print and send the entire RFP document or amendment by mail).  The sample RFP Notice format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) may be used for this purpose.

.03a-6b

Solicitation of Minority, Disadvantaged, and Small Businesses.  Notwithstanding the fact that a contracting agency is not required to send out more than fifteen (15) proposal solicitations for each procurement, the contracting agency must solicit proposals from ALL minority, disadvantaged, and small businesses identified by or known to the contracting agency as having the ability to deliver the subject service.

.03a-7

Cancellation (Rejection Of All Proposals)

The contracting agency must obtain written, Chief Procurement Officer approval before cancelling a publicly released RFP.  The RFP Cancellation Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request must be signed and dated by the contracting agency head (or authorized signatory) and submitted to CPO. 

The justification to cancel an RFP must meet the requirements of Tennessee Code Annotated, Section 12-4-109(a)(1)(C).

.03a-8

Proposal Opening & Evaluation

The contracting agency must hold all proposal information in confidence until evaluations are completed.  Notwithstanding the foregoing, upon request, the contracting agency may publicly release a list of actual proposers that submitted timely proposals directly following the proposal deadline.

Contracting agency staff must conduct the evaluation process as specified by the RFP document and according to the timeline detailed in the RFP schedule of events.

.03a-8a

Standard RFP Technical Proposal Evaluation.  A Proposal Evaluation Team may be organized so that all members evaluate all portions of the technical proposals or so that at least three members evaluate specifically assigned portions of the technical proposals.

The RFP Coordinator should provide each Proposal Evaluation Team member with scoring sheets that indicate the maximum number of points to be awarded within each evaluation area (and any points that may be assigned to individual requirements).  Proposal Evaluation Team members should evaluate responsive proposals against the proposal evaluation criteria detailed in the RFP and complete a scoring sheet for each. 

Scoring sheets, as part of the procurement record, must be available for public inspection at the appropriate time.

.03a-8b

Nonresponsive, Rejected Proposal.  If the Proposal Evaluation Team determines that a proposal is nonresponsive or rejects a proposal for any reason, the state should not complete the proposal evaluation or open the associated cost proposal.

.03a-8c

Event of Only One Proposal.  In the event that the procuring state agency receives only one proposal by the proposal deadline, the state may elect one of the following actions:

(1)    The contracting agency head may request Chief Procurement Officer approval to cancel the RFP based upon insufficient competition, provided that the proposal received is NOT opened.

(2)    The contracting agency may open the technical proposal to determine whether it meets minimum requirements.  If it does not meet minimum requirements, the contracting agency head may request Chief Procurement Officer approval to cancel the RFP.  If the proposal meets minimum requirements, the contracting agency may open the cost proposal and negotiate with the proposer.  (In which case, the contracting agency head may also request Chief Procurement Officer approval to cancel the RFP if the cost resulting from these negotiations is deemed excessive.)

.03a-8d

Cost Proposal Evaluation.  The RFP Coordinator must open cost proposals in accordance with the RFP Schedule of Events (and no earlier) and after all technical evaluations are completed with the results are properly documented.  The RFP Coordinator must, then, calculate each cost proposal score add the cost proposal score to the associated, average of technical proposal scores. The total will determine the apparent best-evaluated proposal. 

If the apparent best-evaluated Proposer is deemed non-responsive and the proposal is rejected after Cost Proposals are opened, the RFP Coordinator will re-calculate scores for each remaining, responsive Cost Proposal to determine the new, apparent best-evaluated Proposer.  

.03a-8e

Evaluation Review.  The contracting agency head is responsible for considering the proposal evaluation results.  Proposal evaluation documentation for such review may include pertinent information (learned from sources other than those disclosed in the RFP process) that might affect the contracting agency head's judgment as to the appropriateness of an award to the apparent best-evaluated proposer.  Additionally, any team member with concerns or objections with regard to the evaluation process or its results should provide a written statement of such along with the documentation submitted to the contracting agency head.

Contractor selection is the contracting agency head's decision, subject to the approval of state officials in accordance with applicable state laws and regulations.  The agency head may choose to:

(1)    authorize contract negotiations with the apparent best-evaluated proposer;

(2)    seek Chief Procurement Officer and Comptroller approval to award the contract to a proposer OTHER than the apparent best-evaluated proposer (by means of a written request and justification submitted to the Central Procurement Office); OR  

(3)    seek Chief Procurement Officer approval to reject all proposals and cancel the RFP (by means of a written request and justification submitted to Central Procurement Office).

.03a-9

Evaluation Notice

By 9:00 a.m. on the date detailed in the RFP Schedule of Events, the contracting agency must notify all proposers of the apparent best-evaluated proposer to which the state will likely award the contract (refer to the RFP Evaluation Notice sample in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html).

.03a-10

Procurement File & Public Inspection

It is the contracting agency's responsibility to maintain the official procurement file for each RFP process.  When the RFP Evaluation Notice is issued, the RFP file including all proposals and associated materials must be open for review by the public in accordance with applicable law and any applicable agency regulations. 

In making documents available, the contracting agency may elect to only meet minimum requirements in accordance with applicable law and any applicable agency regulations or render enhanced service provided that the contracting agency extends uniform courtesy to all making similar requests with regard to an RFP file (e.g., copies at no cost, mailed copies either at a cost or no cost, et cetera).

.03a-10a

Standard RFP File.  An RFP file properly open for public inspection will include, but is not limited to, the following:

(1)    conflict of interest disclosure documentation;

(2)    the RFP and any amendments or clarifications thereof;

(3)    a list of all service providers that the state directly solicited (by sending an RFP or RFP notice);

(4)    documentation of any decision to determine a proposal nonresponsive to the RFP along with a copy of the subject technical proposal;

(5)    a copy of each evaluated proposal;

(6)    evaluation sheets and notes completed by each Proposal Evaluation Team member for each evaluated proposal;

(7)    a Cost Proposal & Scoring Guide completed with the total evaluation cost amount and score for each evaluated proposal;

(8)    a Proposal Score Summary Matrix completed with the sum of the averaged technical scores and the cost score of each evaluated proposal;

(9)    a copy of the Evaluation Notice;

(10)   a copy of any approved rule exception request related to the RFP; and

(11)   documentation of the exact dollar amount of the protest bond that is required should a proposer wish to protest the RFP process (the amount must be determined in accordance with Tennessee Code Annotated, Section 12-4-109(a)(1)(E)(iii)).

.03a-11

Contract Award

A contract resulting from an RFP process must be substantially the same as the pro forma contract in the RFP document.  However, the state may clarify, add terms and conditions, or revise contract requirements in the State's best interests subsequent to this RFP process, PROVIDED THAT NO such terms and conditions or revision of requirements shall materially affect the basis of proposal evaluations or negatively impact the competitive nature of the RFP process.

If the selected proposer fails to sign and return a contract drawn pursuant to an RFP within the period required by the RFP Schedule of Events (i.e., between the date contract signing is permitted and the contract signature deadline date), the state may determine that the proposer has failed to enter into a contract as required and may determine, at its sole discretion, that the Proposer is nonresponsive to the terms of this RFP and reject the proposal. 

If the State determines that the apparent best evaluated Proposer is nonresponsive and rejects the proposal after opening Cost Proposals, refer to policy section .03a-8d above.

see Rule: 0620-3-3-.03(2)(I)

.03b

COMPETITIVE NEGOTIATION

A contracting agency may NOT begin any Competitive Negotiation process before written Chief Procurement Officer approval. 

Prior to seeking Chief Procurement Officer approval, the contracting agency must obtain endorsement documentation depending upon the nature of service to be procured (as indicated in the table below), and submit the signed endorsement documentation with the procurement method request.  The procurement endorsement request formats in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) are used for this required documentation.

Then, the Competitive Negotiation Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for the purpose of obtaining Chief Procurement Officer approval of the proposed procurement method.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the CPO will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval. 

Upon receipt of approval documentation, the contracting agency may begin the service procurement according to the approved request and service contracting rules and policy.

NOTE:  To permit time to complete another procurement process (such as an RFP) as might be required, each request should be submitted to the Central Procurement Office at least sixty (60) days before the proposed contract start date.  Any request received by the Central Procurement office less than sixty (60) days before a specifically proposed contract start date will require an additional memorandum of explanation from the contracting agency head.

see Rule: 0620-3-3-.03(3)

.03b-1

Solicitation of Minority, Disadvantaged, & Small Businesses

In addition to the Rule 0620-3-3-.03(3)(c)1 requirement that the contracting agency must contact at least three (3) potential service providers, for a Competitive Negotiation, the contracting agency must contact ALL minority, disadvantaged, and small businesses known to the contracting agency and identified as having the ability to deliver the subject service.

.03c

ALTERNATIVE COMPETITIVE PROCUREMENT METHOD

A contracting agency may NOT begin any Alternative Procurement Method before written Chief Procurement Officer and Comptroller of the Treasury approval. 

Prior to seeking said approval, the contracting agency must obtain endorsement documentation depending upon the nature of service to be procured (as indicated in the table below), and submit the signed endorsement documentation with the procurement method request.  The procurement endorsement request formats in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) are used for this required documentation.

Then, the Alternative Procurement Method Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for the purpose of obtaining approval of the proposed procurement method.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the CPO will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval. 

Upon receipt of approval documentation, the contracting agency may begin the service procurement according to the approved request and service contracting rules and policy.

NOTE:  To permit time to complete another procurement process (such as an RFP) as might be required, each request should be submitted to the Central Procurement Office at least sixty (60) days before the proposed contract start date.  Any request received by the CPO less than sixty (60) days before a specifically proposed contract start date will require an additional memorandum of explanation from the contracting agency head.

see Rule: 0620-3-3-.03(4)

.03c-1

Solicitation of Minority, Disadvantaged, & Small Businesses

The contracting agency must solicit proposals from ALL minority, disadvantaged, and small businesses known to the contracting agency and identified as having the ability to deliver the subject service, provided that doing so is not inconsistent with the approved, Alternative Procurement Method Request.

.03d

NON-COMPETITIVE NEGOTIATION

Prior, written, Chief Procurement Officer approval to use Non-Competitive Negotiation to establish a contract or initiate an amendment (refer to policy section .07a-1a below for an explanation of Non-Competitive Amendment) is required EXCEPT when:

(1)    the total cost of the proposed contract will not exceed $5,000;
(NOTE:  In awarding a non-competitive contract that will not exceed $5,000, the contracting agency head should endeavor to award the contract to a minority, disadvantaged, or small business identified by the contracting agency as having the ability to deliver the subject service.)

(2)    the contractor is an entity of the federal government; OR

(3)    the contractor is a Tennessee state agency, a local government, or quasi-government entity OTHER THAN an entity of the University of Tennessee or Tennessee Board of Regents systems (a contract with which shall NOT be exempt from prior CPO approval requirements).

see Rule: 0620-3-3-.03(5)

.03d-1

Non-Competitive Procurement Request

A contracting agency should never submit a non-competitive procurement request before making substantive efforts to identify reasonable, competitive, procurement alternatives. 

Contracting agency staff may communicate to obtain information in support of a non-competitive procurement request, provided that any such communication remains general and does not involve the disclosure of information that would give the service provider an unfair advantage if a competitive procurement is required.  However, a contracting agency may NOT formally initiate a non-competitive contract or a non-competitive amendment before written Chief Procurement Officer approval.  (Refer to policy section .07a-1b below for an explanation of non-competitive amendment.)

Further, prior to seeking Chief Procurement Officer approval, the contracting agency must obtain endorsement documentation depending upon the nature of service to be procured (as indicated in the table below), and submit the signed endorsement documentation with the procurement method request.  The procurement endorsement request formats in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) are used for this required documentation.

Then, either the Non-Competitive Contract Request or the Non-Competitive Amendment Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for the purpose of obtaining Chief Procurement Officer approval of the proposed non-competitive procurement.  The properly completed request format MUST be signed and dated by the ACTUAL contracting agency head (signature by an authorized signatory will be accepted only in documented exigent circumstances) and submitted to the Central Procurement Office.  If approved, the Central Procurement Office will return the documentation that contracting agency staff must later attach to the subject contract or amendment when it is submitted for approval. 

Upon receipt of approval documentation, the contracting agency may begin the service procurement according to the approved request and service contracting rules and policy.

NOTE:  A non-competitive procurement request should always be made sufficiently in advance to allow time for completing both any required 15-day, Fiscal Review Committee comment period (refer to policy section .03d-2 below) and a competitive contractor selection process if such is required.  Each request should be submitted to the CPO at least sixty (60) days before the proposed contract start date.  Any request received by the CPO less than sixty (60) days before a specifically proposed contract start date will require an additional memorandum of explanation from the contracting agency head.

.03d-2

Fiscal Review Committee Comment Period

If a non-competitive procurement request meets applicable statutory criteria, contracting agency staff must submit a copy of the request to the Fiscal Review Committee of the General Assembly (FRC) at the same time that the request is submitted to the Central Procurement Office for Chief Procurement Officer approval.  The contracting agency staff must submit a request directly to the FRC if, upon Chief Procurement Officer approval, the request would permit a non-competitive contract or a non-competitive amendment that:

(1)    specifically provides for a possible contract period longer than 12 months; AND

(2)    has a total contract maximum liability of $250,000.00 or more.

Direct all FRC-related communications regarding a non-competitive contract or a non-competitive amendment request to:

      Fiscal Review Committee
320 Sixth Avenue North
8th floor, Rachel Jackson Building
Telephone:  741-2564 

Tennessee Code Annotated, Section 12-4-109 (a)(1)(G)(ii) gives the FRC 15 days from receipt of a request to review and comment on the matter.  As applicable, the Central Procurement Office will delay consideration of a request until the 15-day comment period has ended.

.04

RFP PROTEST

The contracting state agency should notify the Central Procuerment Office upon knowledge of a potential protest under Tennessee Code Annotated, Section 12-4-109.

At the time of filing a protest, the protesting party must submit a protest bond in an amount and form acceptable to the state.  So that all actual proposers have sufficient notice of the required protest bond amount, when a procurement file is opened for public inspection, the procurement file must include documentation of the exact dollar amount of the protest bond that is required should a proposer wish to protest the RFP process (the amount must be determined in accordance with Tennessee Code Annotated, Section 12-4-109(a)(1)(E)(iii)).  F&A Rule 0620-3-3-.13 provides an acceptable Protest Bond format (refer to Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) for a copy).

see Rule: 0620-3-3-.04 & Rule: 0620-3-3-.13

.05

CONTRACT FORM

Each contracting-related document submitted to the Central Procurement Office must reference a unique Agency Tracking Number comprised as follows:

Contracting Agency Business Unit #  +  a unique, 5-digit tracking #  (e.g., 31701-12345)

Contracting agency staff must properly complete a Summary Cover as required by relevant Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) and use it to cover each contract or delegated authority document copy (paper or electronic file).

Digital Contracting Documents:

Each contract document, covered by the required Summary Cover and including all attachments, must be submitted for approval routing as ONE (1) file in PDF format.  Supporting documentation must be routed as separate, PDF-format files.

Paper Contracting Documents:  

A contract should be legibly printed ONLY on ONE (1) side of 8.5 by 11 inch paper.

The contracting agency should submit one (1) original and three (3) copies of a paper contract for approval routing. 

Each paper contract original and copy (each with all attachments) should be stapled in the upper left-hand corner. 

Colored backing attached to a contract document is NOT required. 

The contracting agency must submit each paper contract original and copy for approval processing with a reference tab on the signature page (only properly tabbed pages will be signed).

All copies of the same contract (along with associated documentation) should be bound together with a BINDER CLIP or RUBBER BAND (envelopes and paper clips do not adequately prevent the loss of documents).

see Rule: 0620-3-3-.05

.05a

MODEL LANGUAGE

F&A Rule 0620-3-3-.05 requires that the form and content of a service contract or delegated authority must conform with the language and instructions of applicable Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html). 

Immediate compliance with current model will expedite approval processing.  However, at the discretion of CPO staff, compliance with each most recent revision may not be mandatory for a "grace" period of time after the release of a model revision.

A revision of contract language not specifically permitted by the applicable model language or associated instructions requires Chief Procurement Officer pre-approval of a rule exception.  The Rule Exception Request in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the CPO will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval.

NOTE:  The CPO does not recommend approval of "blanket" exceptions.  Thus, each rule exception approved typically will be applicable to only one instance at one point in time.

.05b

SCOPE OF SERVICE

It is the responsibility of the contracting agency staff to draft each contract scope of services so that it clearly, specifically, and definitively details duties, responsibilities, and associated performance requirements.  The Central Procurement Office review will substantially rely on the contracting agency head's signature on a contract document as certification and assurance that the proposed scope of services is: 

• clear and correct,

• adequate for all legal and enforcement purposes, and

• sufficiently detailed to ensure contractor accountability and results. 

.05c

SIGNATURES & APPROVALS

Signatures of an authorized representative of the contractor and of the contracting state agency head are always required for a contract or an amendment.  

Paper Document Submitted For Approval Processing:

If a paper contract document is to be submitted for approval processing, the contracting agency should draft it to include signature lines for each state official that must sign it.

Original signatures of all required contract signatories should be affixed to at least one copy of each paper contract document submitted for approval processing (remaining copies may be submitted for approval signed, stamped with a signature stamp, or with a photocopy of the signed contract signature page). 

.06

CONTRACT APPROVAL

A contracting agency should initiate each contract or delegated authority in sufficient time to ensure that it can be approved before the begin date.

see Rule: 0620-3-3-.06

.06a

PROCUREMENT DOCUMENTATION

Along with each base contract presented to the Central Procurement Office for approval, the contracting agency must submit copies of procurement documentation (depending upon the procurement method used to select the contractor as indicated below).

.06a-1

Request for Proposals

(1)    the RFP along with any amendments or clarifications;

(2)    a list of all service providers that the state directly solicited (by sending an RFP or RFP notice);

(3)    a Cost Proposal & Scoring Guide completed with the total evaluation cost amount and score for each evaluated proposal;

(4)    a Proposal Score Summary Matrix completed with the sum of the averaged technical scores and the cost score of each evaluated proposal; AND,

(5)    documentation of any decision to determine a proposal nonresponsive to the RFP along with a copy of the subject technical proposal.

.06a-2

Competitive Negotiation

(1)    the request, approved by the Chief Procurement Officer, to use Competitive Negotiation;

(2)    a list of service providers (names and addresses) solicited; AND,

(3)    summary documentation of the Competitive Negotiation process with a summary matrix of all proposals and evaluations and the reasons for the contractor selection.

.06a-3

Alternative Procurement Method

(1)    the request, approved by the Chief Procurement Officer, to use an Alternative Procurement Method;

(2)    a list of service providers (names and addresses) solicited; AND,

(3)    summary documentation of the Alternative Competitive Procurement process with a summary matrix of all proposals and evaluations and the reasons for the contractor selection.

.06a-4

Non-Competitive Negotiation (contract or amendment)

(1)    the request, approved by the Chief Procurement Officer, to use Non-Competitive Negotiation; AND,

(2)    summary documentation of the Non-Competitive Negotiation process indicating that the contracting agency negotiated the best possible terms and price with the service provider.

.06b

SUPPORTING DOCUMENTATION

The contracting agency must retain a comprehensive a record, for each professional service contract, of all relevant supporting documentation in addition to documents relating to the procurement process and negotiations upon which each contractor selection and contract award is based.  Selected supporting documents must be presented with a contract, delegated authority, or an amendment of either when it is submitted for contract approval.

.06b-1

FA-Type Contract Information

Each fee-for-service contract, regardless of whether it was competitively or non-competitively procured, must be submitted to F&A for approval with a completed FA Contract Information Supplement format found in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html).

.06b-2

Employer/Employee Relationship Analysis

If a proposed contractor or the individual who owns controlling interest in a proposed contractor receives TCRS retirement benefits, the contracting agency legal counsel must document and sign an analysis of the subject procurement using TCRS Analysis Guidelines copied in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html).

Further, if it is unclear whether a proposed contract constitutes hiring an employee (prohibited by F&A Rule 0620-3-3-.07(12)), the Central Procurement Office may require that the contracting agency legal counsel document and sign an analysis of the subject procurement using TCRS Analysis Guidelines.

.06b-3

Amendment Support

The contracting agency must submit an amendment to the Central Procurement Office for approval with a copy of the base contract or delegated authority document and all prior amendments.

Refer to policy section .07a-1b below for required non-competitive amendment documentation.

Refer to policy section .07a-3 below for required contractor name/FEIN change amendment documentation.

.06c

OVERSIGHT APPROVALS

Each contract, delegated authority, or an amendment of either must be signed by or on behalf of the contracting state agency head and, in the case of a contract or contract amendment, the other contracting party.  Additionally, the oversight approval of selected state officials must be recorded as required by the state for each contract, delegated authority, or amendment.

.06c-1

Pre-Approval Required for Selected Contracts

Pre-approval is required for a contract depending upon the nature of the proposed contract scope of service (as indicated in the table below).  Before submitting a contract involving the services described for other oversight approval routing, the contracting agency must obtain signed endorsement documentation as indicated.  The contracting agency must submit that documentation with the proposed contract and other supporting documentation when it is routed for formal oversight approval processing.  The pre-approval endorsement request formats in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) are used for this required documentation.

.06c-2

F&A Funding Certification

The Chief Procurement Officer must certify funding availability for each contract or delegated authority, and F&A Budget Division review may be required for such certification.  

the Central Procurement Office will coordinate the F&A Budget review of paper documents submitted for approvals processing.

.06c-3

Other Contract and Delegated Authority Document Approvals Required As Indicated

.06c-4

Amendment Approvals

Each amendment requires the approval of the same state officials required for approval of the base contract.  If an amendment changes the scope or the terms of the base contract in such a manner as to require the oversight review by one or more state officials (in addition to those that previously approved the contract), the amendment and all subsequent amendments of the contract will require that approval.

.07

GENERAL REQUIREMENTS

see Rule: 0620-3-3-.07

.07a

AMENDMENTS

A contract amendment must be within the scope, intent, and purpose of the base contract or a logical extension thereof, and the contracting agency must draft a contract amendment in accordance with the Central Procurement Office model language to clearly detail the additions, deletions, and modifications to the contract.  

It is NOT possible to amend a contract start date.

.07a-1

Fee-For-Service Contract Amendment

The terms and conditions and procurement method of a fee-for-service contract dictates the extent to which an amendment is contemplated and may:

(1)    add to the scope of the base contract;

(2)    increase payment rates;

(3)    change contract terms and conditions; OR

(4)    extend the term of a base contract.

.07a-1a

Contemplated Amendment.  A standard amendment may ONLY alter the terms and conditions of a contract consistent with and specifically permitted or contemplated by the text of the base contract, prior amendment, or the procurement document that resulted in the subject contract (and NOT alter the contract Payment Methodology OR diminish the terms or requirements of the contract from those that are clearly and specifically provided).  Examples of such amendment are:

• an amendment to exercise a specified option to extend the contract period

• an amendment to revise the terms, conditions, or requirements of the contract in such a way that clearly benefits of the state (e.g., decrease payment rates with no change in service requirements, add service deliverables or increase service requirements at no additional cost to the state)

• an amendment to change the contractor name or FEIN (as approved by the state)

• an amendment to increase the maximum liability of a contract providing for a clearly variable volume of service units (as authorized by the state) and contractor remuneration limited to unit rate payments (e.g., such an amendment would be necessary when an existing maximum liability amount was not adequately estimated by the state to cover the cost of the actual volume of service required by the state)

NOTE:  Unless the contract specifically states that the maximum liability amount shall constitute the entire compensation due the Contractor, the maximum liability is intended only to limit state's liability to a state-estimated amount for which the Chief Procurement Officer certified funding availability, and the state-authorized service volume paid at the contract-specified unit rate(s) "shall constitute the entire compensation due the Contractor." 

Prior Chief Procurement Officer approval is NOT required for a contracting agency to initiate a standard amendment that is consistent with and specifically permitted or contemplated by the text of the base contract, prior amendment, or the procurement document that resulted in the subject contract. 

Notwithstanding the foregoing, the Comptroller of the Treasury (in cooperation with FRC staff) may impose additional requirements to obtain Comptroller approval for amendments of this type.

.07a-1b

Non-Competitive Amendment.  A non-competitive amendment changes the terms, conditions, or requirements of the contract from those that are clearly and specifically documented, provided, or permitted in the text of the base contract, prior amendments, or the procurement document that resulted in the subject contract.  (A procurement document is the associated RFP or the approved procurement method request including all information, limits, requirements, and procedures detailed therein.)

Chief Procurement Officer approval is required BEFORE a contracting agency may initiate a non-competitive amendment (refer to policy sections .03d-1 & 2 above).

.07a-2

Expired or Terminated Contract Amendment - Prohibited

If a contract is to be amended, the amendment should always be signed and all approvals recorded BEFORE the end date of the subject contract.

.07a-3

Contractor Name/FEIN Change Amendment

A contract amendment is required to change a contractor's name or Federal Employer Identification Number (FEIN) set forth in a contract document as may be necessary pursuant to a change for some reason such as merger, acquisition, or assignment (standard contract terms require state approval of any assignments).  Such an amendment should comply with the sample, name change amendment detailed in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) and must be submitted for approval processing with documentation that details the legitimacy of the contractor name or FEIN changes along with other documentation required of all contract amendments.

.07a-4

Grant Budget Amendment

A grant contract amendment is required to increase a grant's total budget amount or to revise a service unit or milestone rate.  However, an amendment is NOT required to revise a grant budget line item amount (refer to relevant model language which permits the grantor to revise amounts of grant budget line items without a contract amendment as long as the total budget remains unchanged; and, provided that the grantor documents the approval and revision terms).

.07a-5

Contract Document Revision - NOT Amendment

Signed and oversight approved contract documents are properly altered ONLY by amendment.

Prior to oversight approval (either before or after the document is signed by the contract parties), each contract revision must also document authorization for the change.  For example, each change to a contract document indicated by a "strike-through," "correction tape" or "white out," must be initialed and dated by the contract parties.  Notwithstanding the foregoing, "correction tape" and "white out" of any type is NOT recommended.  An initialed and dated "strike-through" is preferred if such a revision is necessary.  Likewise, each contract document revision by adding or replacing pages after the document is signed by the contract parties must be initialed and dated by the contract parties on the face of each added or replaced page, and the resulting document must maintain sequential page numbers.

Contract documents that include faxed copies of pages documenting authorization of a contract revision may be accepted (although original documents are preferred).

.07a-5

Summary Cover Revision

During the course of a contract, it may become necessary to change, add, or delete contract information documented by the contract summary cover.  In which case, the procuring state agency's Fiscal Officer may approve a revised summary cover and submit it to the Central Procurement Office to effect a revision of records that do NOT involve an amendment of the subject contract.  Refer to the Summary Cover Revision Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) for specific requirements and the model used for this purpose.

.07b

AUTHORIZATION TO BEGIN WORK

No state official or employee, except the Chief Procurement Officer, may authorize a contractor to begin providing service before the subject contract is properly approved.  If a contractor is improperly directed to begin providing service, the contracting agency head may be held personally liable should it be necessary to pay for service provided in good faith without a valid, approved contract (refer to Tennessee Code Annotated, Section12-3-105, et seq.). 

.07c

CONTRACT PERIOD

If a contract period longer than sixty (60) months is in the best interests of the state, the contracting agency head may submit to the Central Procurement Office a written request for Chief Procurement Officer approval of an exception from Rule 0620-3-3-.07 (5).  The Rule Exception Request format in Service Contracting Models  (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the Central Procurement Office will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval.

see Rule: 0620-3-3-.07(5)

.07d

CONTRACT WITH A GOVERNMENTAL ENTITY

F&A Rule 0620-3-3-.07(7) provides:  "An agreement between [TN] state agencies may be drafted as a contract complying with Department of Finance and Administration Office of Contracts Review Policy Guidelines or may be executed by means of some other instrument to effect the understanding."

The appropriate Service Contracting Models (at www.intranet.tn.gov/finance/sourcing/model.html) is applicable to a contract with or grant to a government entity that is processed for approval through the Central Procurement Office.

Interdepartmental.  The following are applicable to an interdepartmental contract (or grant) between state agencies (except a contract with a Tennessee state college, or university):

• ID-Type, Fee-For-Service Contract Model

• ID-NC-Type, No Cost Contract Model

• IG-Type, Cost Reimbursement Grant Model

State Higher Education.  The following are applicable to a contract with (or grant to) the University of Tennessee or State Board of Regents systems of colleges and universities:

• ED-Type, Fee-For-Service Contract Model

• ED-NC-Type, No Cost Contract Model

• ED-RV-Type, Revenue Contract Model

• EG-Type, Cost Reimbursement Grant Model

Federal or Tennessee Government.  The following are applicable to a contract with (or grant to) a federal or Tennessee governmental entity (EXCEPT a Tennessee state agency, college, or university):

• GU-Type, Fee-For-Service Contract Model

• GU-NC-Type, No Cost Contract Model

• GU-RV-Type, Revenue Contract Model

• GG-Type, Cost Reimbursement Grant Model

Another State Government Entity, Subdivision, or Instrumentality.  The following are applicable to a contract with (or grant to) a government entity of another state:

• FA-Type, Fee-For-Service Contract Model

• NC-Type, No Cost Contract Model

• RV-Type, Revenue Contract Model

• GR-Type, Cost Reimbursement Grant Model

.07e

CONTRACTOR REGISTRATION

BEFORE submitting a contract for approval processing, contracting agency staff must ensuring that each professional service provider awarded a contract or grant is properly registered as a state vendor (contact F&A Division of Accounts staff for instructions as necessary). 

State registration is NOT required for professional service providers to receive or respond to a professional service procurement solicitation.

.07f

LIMITATION OF LIABILITY

Notwithstanding Rule 0620-3-3-.07 (13),  Tennessee Code Annotated, Section 12-4-119 provides that "agencies and departments of the executive branch of state government may allow limitations of liability and limitations of warranty in contracts for personal services, professional services, and consultant services in accordance with F&A Rule 0620-3-7.  Accordingly, a contracting agency head may limit contractor liability without prior Chief Procurement Officer approval unless the limitation is to an amount less than two times the contract value (in which case, prior Chief Procurement Officer approval is required). 

The Limitation of Liability Request format in Service Contracting Models  (www.intranet.tn.gov/finance/sourcing/model.html) is used for the purpose of obtaining Chief Procurement Officer approval when it is required.  The request must be signed and dated by the contracting agency head (or authorized signatory).  If such a request results in an approval, the Central Procurement Office will provide documentation that contracting agency staff must later attach to the subject contracting documents submitted for approval processing.

see Rule: 0620-3-3-.07(13)

.07g

PAYMENT IN ADVANCE

A payment in advance of the completion of a commensurate portion of required service (or an "advance payment") is generally prohibited in fee-for-service contracts.

Notwithstanding the foregoing, an advance payment provision in a contract with the federal government may be considered. (Lending the state's credit to the United States government is not prohibited by the State Constitution (Malone v. Peay, 17 S.W.2d 901, 159 Tenn. 321 (S.Ct.1928)).

A grant contract providing for an advance payment will be considered for approval on a case-by-case basis taking into account the amount of the advance payment, the scope of service, and the grantee.  Generally, a provision for an advance payment will only be approved in a grant contract with a government or non-profit entity or in an endowment grant.  Further, pursuant to Chief Procurement Officer directive, an advance payment will not be approved for "start-up" costs.

These advance payment guidelines do not affect block grants as described in Tennessee Code Annotated, Section 9-4-5401, et seq. and do not affect contract payment terms that are ordered by a court of competent jurisdiction.

see Rule: 0620-3-3-.07(15)

.07h

PROOF OF INSURANCE

The contracting agency must determine the amount and type of any insurance required in due consideration of the service to be procured and the potential liability involved with the subject contract.

.07i

SIGNATURE AUTHORITY

Each state agency head must submit to the Central Procurement Office a completed Signature Certification and Authorization for each calendar year of applicability.  The Signature Certification and Authorization format in Service Contracting Models  (www.intranet.tn.gov/finance/sourcing/model.html) is used to document signature certification and authorizations.

An Signature Certification and Authorization filed with the Central Procurement Office will be effective immediately and supersede previous authorizations.  As any changes occur in personnel authorized to sign contracting documents, the subject agency must provide new documentation to the Central Procurement Office.

see Rule: 0620-3-3-.07(9)&(20)

.07j

TRAVEL PAYMENT/REIMBURSEMENT

A contract must indicate whether there shall be any payment/reimbursement for travel expenses under the contract.  Any compensation or reimbursement for travel, meals, or lodging SHALL be subject to amounts and limitations specified in the "State Comprehensive Travel Regulations," as they are amended from time to time.

The State Comprehensive Travel Regulations limitations shall be the policy of the state regardless of the source of contract funding (even if the contract represents a simple pass through of federal funding, or the contractor is another governmental entity with its own travel regulations).

The limits and rules set forth in the State Comprehensive Travel Regulations shall be construed to provide for the reimbursement of travel expenses incurred with in the state of Tennessee at in-state rates and for the reimbursement of travel expenses incurred outside the state of Tennessee at out-of-state rates.

.08

SPECIAL CASES

see Rule: 0620-3-3-.08

.08a

NO COST CONTRACT

A No Cost Contract shall provide NO monetary payment obligation between the contract parties.

see Rule: 0620-3-3-.08(2)

.08a-1

No Cost Contract Pre-Approval & Procurement Basis

A No Cost Contract with a federal or Tennessee state or local government entity or education institution does NOT require a No Cost Contract Request pre-approval or competitive contractor selection.

A state agency must obtain prior Chief Procurement Officer written approval before initiating a No Cost Contract with any other individual or entity.  Additionally (except as indicated above), the contracting agency must propose a competitive or impartial selection of the other party with which the state will contract.  The No Cost Contract Request format in Service Contracting Models  (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.

Competitive or "Equal Opportunity" No Cost Contract - if the No Cost Contract Request proposes a clearly competitive or equitable contractor selection process, notwithstanding any policy section to the contrary, only the approved No Cost Contract Request will be required (in lieu of a procurement method request).

Non-Competitive, No Cost Contract - if the procuring agency proposes a Non-Competitive, No Cost Contract, it must submit a Non-Competitive Contract Request in accordance with policy section .03d above attached to the completed No Cost Contract Request.

If approved, the Central Procurement Office will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval.

.08a-2

HIPAA-Related Agreements

The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104-191, requires the establishment of Business Associate Agreements (BAAs) in certain instances.  A BAA involves no monetary obligation between the parties of the agreement (i.e., the Covered Entity and the Business Associate); must be drafted to "stand alone" and independently establish the rights, responsibilities, and obligations of both the Covered Entity and the Business Associate with regard to HIPAA requirements as may be related to the relationship(s) established through another contract with the state; and, shall NOT alter, amend, or modify any contractual relationships, duties, or obligations of either the Covered Entity and the Business Associate established through another contract with the state.  Similarly, a Trading Partner Agreement (TPA) exists solely to define the manner of electronic transactions to be exchanged pursuant to an existing, approved contract.  A TPA shall NOT alter, amend, or modify any contractual relationships, duties, or obligations of either party. 

A "HIPAA-related" agreement that meets the foregoing definitions and requirements is NOT subject to F&A review, however it must be found acceptable by the applicable state agency's legal counsel.  (The applicable state agency serves as the official repository for these agreements that do not require F&A review.)

Any agreement characterized as a "Business Associate Agreement," a "Trading Partner Agreement," or a similar agreement existing solely to meet HIPAA legal requirements that does NOT meet the foregoing definitions and requirements shall be subject to all applicable laws, regulations, and requirements including but not limited to F&A review and approval. 

.08b

REVENUE CONTRACT

A Revenue Contract is a contract in which the state has NO monetary payment obligation to the other contract party, BUT the other contract party is obligated to the state for monetary payment(s) as specified in the contract.  Such amount(s) payable to the state by the other contract party may include (but are not limited to):

• compensation for deliverables provided by the state to the other contract party

• a specified portion of fees collected on behalf of the state by the other contract party

• a specified commission relating to amounts that the state has authorized the other contracting party to charge third parties for a particular service (e.g., for taking a licensure test).

A contract is NOT considered a Revenue Contract if it obligates BOTH the state for monetary payments to the other contracting party AND the other contract party for payments to the state.

see Rule: 0620-3-3-.08(3)

.08b-1

Revenue Contract Pre-Approval & Procurement Basis

A Revenue Contract with a federal or Tennessee state or local government entity or education institution does NOT require a Revenue Contract Request pre-approval or competitive contractor selection.

A state agency must obtain prior Chief Procurement Officer written approval before initiating a Revenue Contract with any other individual or entity.  Additionally (except as indicated above), the contracting agency must propose a competitive or impartial selection of the other party with which the state will contract.  The Revenue Contract Request format in Service Contracting Models  (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.

Competitive or "Equal Opportunity" Revenue Contract - if the Revenue Contract Request proposes a clearly competitive or equitable contractor selection process, notwithstanding any policy section to the contrary, only the approved Revenue Contract Request will be required (in lieu of a procurement method request).

Non-Competitive, Revenue Contract - if the procuring agency proposes a Non-Competitive, Revenue Contract, it must submit a Non-Competitive Contract Request in accordance with policy section .03d above attached to the completed Revenue Contract Request.

If approved, the Central Procurement Office will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval.

.09

DELEGATED AUTHORITY

A Delegated Authority to make specific professional service agreements without further approval will not be effective until approved by the Chief Procurement Officer and the Comptroller of the Treasury.  No purchase, grant, loan, or agreement of any type may be initiated and no obligation may be incurred before the subject state agency's receipt of approval documentation.

Each request for a delegated authority will be considered for approval on a case-by-case basis.  Approval of a requested delegated authority is NOT guaranteed, assured, or otherwise implied by any previous approval of the same or a similar delegated authority. 

Notwithstanding the foregoing, if a delegated authority with the same purpose and similar to one proposed was approved in the prior year, the contracting agency must submit a copy of that previously approved delegated authority when a new delegated authority is submitted for approval processing.

see Rule: 0620-3-3-.09

.09a

STANDARD DELEGATED PURCHASE, GRANT, OR LOAN AUTHORITY

The current, appropriate delegated authority application format in the Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used to obtain required approvals for a delegated authority.

.09b

SPECIAL DELEGATED AUTHORITY

Pursuant to F&A Rule 0620-3-3-.09(4), "Upon the establishment of specific guidelines, criteria, and procedures, other forms of Delegated Authority may be used to give approval allowing a state agency to enter agreements for an individual program within specified limits and guidelines.  Notwithstanding the foregoing, all delegated authorities shall conform with the policy expressed in these rules."  A Special Delegated Authority is, therefore, unique and there is typically no standard, governing model for the application documents (the application document should be drafted in consultation with the Central Procurement Office staff).

.09c

FEDERAL OR STATE DECLARED DISASTER SPECIAL DELEGATED AUTHORITY

The Special Delegated Authority for a Declared Disaster format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used by TEMA to obtain approval of a Special Delegated Authority to issue agreements relating to funding awarded for the response to and recovery from a disaster formally declared by the federal government or the Governor of Tennessee

.10 

CONTRACT MANAGEMENT

Each procuring state agency is responsible for the management of its contracts, grants, and delegated authorities.

see Rule: 0620-3-3-.10

.11

CONTRACT TERMINATION

Chief Procurement Officer written approval is required before a state agency may terminate a contract (either for convenience or cause) prior to the contract end date.  The Contract Termination Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the Central Procurement Office will return documentation to the contracting agency, which will be responsible for notifying the contractor of the contract termination in writing in accordance with the contract.

see Rule: 0620-3-3-.11

.12

RULE EXCEPTIONS

Chief Procurement Officer written approval is required for an exception to the rules governing service contracts.  The Rule Exception Request format in Service Contracting Models (www.intranet.tn.gov/finance/sourcing/model.html) is used for this purpose.  The properly completed request format must be signed and dated by the contracting agency head (or authorized signatory) and submitted to the Central Procurement Office.  If approved, the Central Procurement Office will return the documentation that contracting agency staff must later attach to the subject contract when it is submitted for approval.

see Rule: 0620-3-3-.12