SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 1 of 8

REQUEST FOR SPECIAL PROCUREMENT No. REQ-DASOBO-00025294

PART A. Requesting Agency must complete Items 1 through 13.

1. Requesting Agency Name: State of Oregon Department of Environmental Quality (“DEQ”)

2. Date of Request: 5/19/2022 3. Agency Number: 34000

4. Agency Contact Name: Christina Dell 5. Phone: 971-323-7233

6. Type of Request: Class Special Procurement __X___ Contract-specific Special Procurement

7. Time Period Requested: From: 10/24/2022 To: 10/31/2027

8. Total Estimated Cost: $1,100,000

Note: This Special Procurement (“SP”) Request seeks an increase of $1,100,000 to the current Contract Maximum Not-to-Exceed (“NTE”) Compensation of $1,036,820. With approval of this SP Request, the cumulative Contract Maximum NTE Compensation will be $2,136,820.

9. Title: Supplies and/or Services to be Acquired:

Waters™ Instruments and related-Software, Parts, Consumables, and Services including:

a. Existing Instruments

Annual Service Plans and Support Services (collectively “Services”) – including:

o Access to Waters™ Certified Field Service Engineers and Specialists o Priority Technical Remote Support o Onsite Support for Annual Preventative Maintenance o Onsite Support for Major Repairs o Training

Original equipment manufacturer (“OEM”) Parts and Consumables

Software (firmware) – including Updates and Upgrades

b. New Instrument

One (1) new LC/MS-MS Mass Spectrometer

All related-Software, Parts, Consumables, and Services as set out in Section 9.a above

10. Request, Background, Current Need, and Proposed Contracting Procedure:

a. Request:

DEQ requests approval of this SP Request #REQ-DASOBO-00025294 to amend Contract #13-127 (aka DEQ-1265-12) (“Contract”) issued to Waters Technologies Corporation (“Waters” or “Contractor”), a subsidiary of Waters Corporation, as follows:

Extend the Contract up to five (5) additional years

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 2 of 8

Increase the Maximum NTE Compensation an additional $1,100,00.00

Acquire, through purchase or lease, (1) new LC/MS-MS Mass Spectrometer Instrument, in accordance with Delegation of Procurement Authority Agreement #REQ-DASOBO-00023197, Amendment #4.

o If DEQ purchases (buys) the new Mass Spectrometer, the Instrument and related-Software, Parts, Consumables, and Services will be amended into the existing Contract.

o If DEQ leases the new Mass Spectrometer, it will result in a Lease Agreement that is separate from the Contract.

The Lease will be subject to the Time Period Requested and within the Total Estimated Cost set out in Sections 7 and 8 above.

The Instrument’s related-Software, Parts, Consumables, and Services as set out in Section 9.a above, may be amended into the Contract if not included in the Lease Agreement.

b. Background:

DEQ is responsible for keeping Oregon’s waters safe and healthy for many uses such as drinking, recreation and agriculture as well as for ensuring fish populations can thrive. Water Quality Monitoring provides critical information for understanding how well these goals are being met and for identifying emerging water quality concerns, planning wastewater and industrial permit limits, assessing compliance with environmental regulations, developing effective watershed pollution reduction strategies, and understanding trends in water quality statewide.

DEQ’s Water Monitoring Program meets these needs by:

Planning and coordinating environmental data collection efforts to ensure the right data is collected to answer the question at hand.

Collecting representative, valid environmental data through physical, chemical, and biological sampling and assessment.

Managing environmental data to ensure availability of accurate and complete data for agency programs and the general public.

Analyzing and interpreting water quality related data to produce reports which identify water quality conditions, identify threats to water quality

Water samples are processed in DEQ’s accredited laboratory using the following water Instrumentation:

Waters™ Quattro LC/MS-MS: a powerful Quadrupole Mass Spectrometer used to detect residual chemical compounds, confirmatory identification of small organic molecules, and confirmation and quantitation of contaminants and adulterants in pharmaceutical and food samples.

Waters™ AutoSpec HR/GC-MS: an Instrument with High Resolution Gas Chromatography (“HRGC”) coupled with High Resolution Mass Spectrometry (“HRMS”) that is used to detect, quantify, and analyze dioxins and furans; a family of toxic substances that all share a similar chemical structure.

Waters™ Acquity UPLC: an Acquity Ultra Performance Liquid Chromatography (“UPLC”) multi-detector tool that provides faster and more detailed analysis of polymer analysis.

Waters™ Xevo LC/MS-MS: a benchtop mass spectrometry Instrument designed for the analysis of a wide range of compounds in complex and challenging samples.

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 3 of 8

These Instrument systems are highly specialized. Service personnel must have vast knowledge of the operating procedures and technical expertise to ensure the equipment performance is maintained to the manufacturer’s operating specifications.

Contract History:

2004: Oregon Department of Administrative Services (“DAS”), State Procurement Office (“SPO”) (now DAS Procurement Services or “DAS PS”), on behalf of DEQ, issued Request For Proposal (“RFP”) #34000008-04 on the Vendor Information Program (“VIP”), the state’s eProcurement system of record at that time. The RFP sought a liquid chromatography tandem quadrupole mass spectrometer system (Quattro LC/MS-MS) and related-Services including annual equipment maintenance and support for years two through five (2 – 5) after the initial 1-year warranty period.

Waters prevailed with the contract award and Price Agreement (“PA”) #4150 was issued.

PA 4150 expired in accordance with its terms on September 30, 2009.

2008: DAS SPO, on behalf of DEQ, issued Invitation To Bid (“ITB”) #102-1381-08 on May 8, 2008 via the Oregon Procurement Information Network (“ORPIN”), the state’s eProcurement system of record at that time. The ITB sought one (1) High Resolution Gas Chromatography/High Resolution Mass Spectrometer (AutoSpec HR/GC-MS) including related-Services, and a minimum of one (1) year OEM warranty.

May 23, 2008: The ITB closed with two (2) timely submitted, responsive bids, which were evaluated in accordance with the Best Value process set out in the ITB. Waters prevailed as the successful Bidder.

June 18, 2008: Contract #102-1324-08 was issued and expired in accordance with its terms on September 4, 2013.

2010: DEQ submitted Sole Source (“SS”) Request #SS-336-10 to DAS PS, seeking the ability to directly contract with Waters for continued Software, Parts, Consumables, and Services for existing DEQ laboratory Waters™ Instrumentation. DEQ also documented its procurement file with a sole source letter provided by Waters, further justifying DEQ’s request to conduct a sole source procurement.

May 17, 2010: SS-336-10 was approved.

May 10, 2010: Public Notice #DEQ-1222-10 advising of the approved SS-336-10 was issued on ORPIN, the State’s eProcurement system of record at that time. The 7-day Public Notice closed without protest on May 17, 2010.

October 24, 2012: DEQ issued the Contract to Waters with a Maximum NTE Compensation of $29,528.20 for the initial annual Service agreement. This amount did not include the cost for additional Goods and Services, which were to be delivered at the rates and prices set out in the Contract. The Contract also established an initial Term of 1-year (10/24/2012 – 10/23/2013) with options to extend for up to four (4) additional years. DEQ and Contractor exercised those options as set out in the following Table 10.b.1.

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 4 of 8

TABLE 10.b.1

Amendment No.

Contract Term Amended Compensation

(Amount added to Contract)

Cumulative Contract Maximum NTE Compensation

Contract at Execution

Year 1: 10/24/2012 – 10/23/2013 -- $34,528.20

1 Year 2: 10/24/2013 – 10/23/2014 $90,259.97 $124,788.17

2 Year 3: 10/24/2014 – 9/12/2016 $129,824.75 $254,612.92

3 Year 4: 9/12/2016 – 10/23/2016 $101,249.41 $355,862.33

4 Year 5: 10/24/2016 – 10/23/2017 $94,137.67 $450,000.00

2013: Contract Amendment #1, which was executed September 13, 2013, added the AutoSpec HR/GC-MS to the Statement of Services.

2014: In accordance with Oregon Administrative Rule (“OAR”) 125-247-0288(9), Special Procurements;

By Rule, and Delegation of Procurement Authority #790-14, DEQ conducted research, obtained quotes for used (refurbished) LC/MS-MS and UPLC Instruments, and determined the Waters™ Xevo LC/MS-MS and Acquity UPLC Instruments were in the best interest of the State.

April 7, 2014: DEQ issued Public Notice #DEQ-1129-14 on ORPIN, advising of its intention to directly contract with Waters for the Xevo LC/MS-MS and the Acquity UPLC Instruments.

May 1, 2014: DEQ issued contract #DEQ-1119-14 (aka DEQ Purchase Order #14-416) to Waters for both Instruments, related-services, and a one (1) year warranty period.

October 22, 2014: Contract Amendment #2 was executed, adding the Xevo LC/MS-MS and the Acquity UPLC to the Statement of Services.

2017: Pursuant to its delegation of procurement authority (Delegation #505-10, Amendment #3), DEQ conducted Sole Source procurement #SS-590-17, seeking continued access to Waters™ Software, Parts, Consumables, and Services under the Contract for existing DEQ laboratory Waters™ Instrumentation.

October 10, 2017: DEQ issued Public Notice #DEQ-1343-17 on ORPIN advising of its intent to amend and extend the Contract Term and increase the Contract Maximum NTE Compensation.

The Public Notice closed without protest on October 16, 2017.

October 23, 2017: Contract Amendment #5 was executed, which effectively amended the Contract as follows:

o Extended the Contract Term through October 23, 2022 o Added $586,820 to the Contract, increasing the Maximum NTE Compensation from $450,000 to $1,036,820.

c. Current Need:

The Contract will expire October 23, 2022. DEQ must have continued access to Software, Parts, Consumables, and Services for its existing Waters™ Instrumentation. This equipment is vital to DEQ’s ability to carry out its duties and responsibilities successfully.

DEQ must also retire a legacy Waters™ Mass Spectrometer that is no longer supported. To ensure cross-functional efficiency among the existing Instruments, DEQ seeks approval in this SP Request to procure a new (replacement) Waters™ Mass Spectrometer.

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 5 of 8

The following Table 10.c.1 demonstrates DEQ’s best estimates for the Instruments, related-Software, Parts, Consumables, and Services set out in Section 9 (above) over the 5-year time period requested in this SP Request.

TABLE 10.c.1

Description Estimated Cost

Services – Existing Instrumentation:

Year 1: 10/24/2022 – 10/23/2023 $142,447.25

Year 2: 10/24/2023 – 10/23/2024 (Quattro LC/MS-MS not supported after Year 1)

$110,606.30

Year 3: 10/24/2024 – 10/23/2025 (AutoSpec HR/GC-MS not supported after Year 2)

$55,201.55

Year 4: 10/24/2025 – 10/23/2026 $56,857.60

Year 5: 10/24/2026 – 10/23/2027 $58,563.25

Subtotal – Services: $423,675.95

Parts & Consumables:

5-Year Estimate $26,000.00

New Instrument:

Waters™ LC/MS-MS Mass Spectrometer & Services $650,000.00

Total Estimated 5-Year Cost: $1,099,675.95

d. Proposed Contracting Procedure: In accordance with its delegated procurement authority, DEQ will:

1. Issue a public notice (“Notice”) on the OregonBuys eProcurement system for a period of seven (7) calendar days, as required by OAR 125-247-0287, regarding approval of this SP Request.

2. The Notice will include provisions that any affected party may protest approval of the SP.

3. DAS PS, working with DEQ, will respond to and resolve all protests received, if any.

4. If no protests to this approved SP are received and sustained, DEQ will proceed with:

a. amending the Contract as set out in Section10.a above.

b. negotiating and executing a Lease Agreement as set out in Section 10.a above, if necessary

5. DEQ will work with DAS Enterprise Information Services (“EIS”) and obtain its endorsement prior to executing the Contract amendment(s), if required.

6. Pursuant to OAR 137-045-0015, DEQ will work with Oregon Department of Justice (“DOJ”) and obtain legal sufficiency approval prior to executing the Contract amendment(s) and Lease Agreement, as required.

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 6 of 8

11. Justification for use of Special Procurement: Describe the circumstances that justify the use of a Special Procurement.

Although DEQ has not officially established Waters™ Instrumentation as a state standard, DEQ has primarily utilized Waters™ Instruments for the last 18+ years to conduct its water quality monitoring processes – including testing, analysis, and reporting. Aside from retiring the legacy Waters™ Mass Spectrometer, DEQ has no plans to replace all of its Waters™ Instruments at this time, which would be a massive and costly undertaking.

Waters has confirmed that it is the sole manufacturer and distributor of the Instruments and sole provider of the related-Services detailed in this SP Request (see “SP Attachment-1”).

o Waters currently provides specialized Services under the Contract that are unique to Waters™ Instrumentation (e.g., only qualified Waters’ trained Service Engineers can provide support training to DEQ).

o Provision of Services for all DEQ Waters™ Instruments collectively can only be delivered by Waters.

If the current Contract lapses, a costly evaluation would be required to confirm the condition of the equipment.

12. Findings to Satisfy the Required Standards: This proposed special procurement:

__X____ (a) will be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts because:

1. The Contract was established through a Sole Source procurement process in accordance with Oregon statutes and administrative rules.

2. Approximately 50% of all waters HPLC and UPLC parts are manufactured by Waters directly. The majority of these parts cannot be alternatively sourced. Waters manufactures its parts using specific quality standards, packaged under proprietary critical clean conditions.

3. Waters is the only Contractor that can provide the requisite Services holistically to DEQ’s existing network of Waters™ Instrumentation systems. See SP Attachment-1 for additional information.

and

______ (b)(i) will result in substantial cost savings to the contracting agency or to the public because:

or

___X___ (b)(ii) will otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with the requirements of ORS 279B.055, 279B.060, 279B.065, or 279B.070, or any rules adopted thereunder because:

The Instruments detailed above in Section 10.b are vital to the day-to-day activities of DEQ’s Water Program and the discharge of its state and federal responsibilities.

ORS Chapter 468B sets out the requirements imposed on DEQ regarding Oregon’s water quality.

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 7 of 8 o ORS 468B.035(1), Implementation of federal Water Pollution Control Act; rules, provides in part: “The Environmental Quality Commission may perform or cause to be performed any acts necessary to be performed by the state to implement within the jurisdiction of the state the provisions of the Federal Water Pollution Control Act…”

Every two years, DEQ is required to assess water quality and report to the U.S. Environmental Protection Agency (“EPA”) on the condition of Oregon's waters. DEQ prepares an Integrated Report using, in part, data generated by the network of Waters™ Instrument systems, to meet the requirements of the federal Clean Water Act for Sections 305(b) and 303(d).

o Section 305(b) requires a report on the overall condition of Oregon's waters.

o Section 303(d) requires identifying waters that do not meet water quality standards and where a Total Maximum Daily Load pollutant load limit needs to be developed.

DEQ’s water quality monitoring promotes public interest by ensuring Oregon’s waters are safe and healthy for many things such as human consumption, water contact recreation, irrigation, livestock watering, and fishing.

13. Signature: The actual signature of the Agency Head or designee (e.g., Designated Procurement Officer) is not required on the Request if it is submitted through OregonBuys. Agency may elect to attach a signed Request.

Signature: e.g. Electronically in OregonBuys _________________ Type Name: Date:

SP_REQ-DASOBO-00025294, Waters Technologies Instruments & Services Page 8 of 8

PART B. The Department of Administrative Services completes Part B.

STATUTORY AND RULE AUTHORITY:

ORS 279B.085(2) states the Director of the Department of Administrative Services may approve a special procurement if the Director finds that a written request submitted under ORS 279B.085(4) demonstrates that the use of a special procurement as described in the request, or an alternative procedure prescribed by the Director will:

(a) Be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and

(b)(A) Result in substantial cost savings to the contracting agency or to the public; or

(B) Otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 279B.055, 279B.060, 279B.065 or 279B.070 or under any rules adopted thereunder.

OAR 125-246-0170 delegates the authority of the Director of the Department of Administrative Services to approve special procurements to the State Chief Procurement Officer. OAR 125-247-0285 through 125- 247-0288 implement ORS 279B.085.

OAR 125-247-0700(2) Protests and Judicial Review of Special Procurements designates the State Chief Procurement Officer as the Contract Review Authority.

FINDINGS: The findings are accepted, adopted, and incorporated by reference herein.

CONDITIONS OF APPROVAL:

1. Notice Period. The Authorized Agency shall post the Public Notice on ORPIN. The Special

Procurement may not be used until after the completion of the seven (7) day notice period required pursuant to OAR 125-247-0287(4), and either:

a. No Written protests are received by the Contract Review Authority, State Chief Procurement Officer, from an Affected Person in response to the notice, or

b. If any protest is received during the notice period, then not until:

i. the State Chief Procurement Officer or delegate issues a written disposition of the protest in accordance with ORS 279B.400 and OAR 125-247-0700 and OAR 137-047-0700, and

ii. confirms in writing the first possible date of use of the Special Procurement.

2. ORS 279A.165 Requirements. Authorized Agency shall comply with the requirements of ORS 279A.165 and OAR 125-247-0287(12) regarding a report about this Special Procurement. Agency shall use a form and follow the instructions provided by the State Chief Procurement Officer or delegate.

3. Authorized Agency shall comply with all Enterprise Information Services (“EIS”) conditions and requirements prior to contract, lease agreement, or contract amendment execution, if any.

APPROVED:

Kelly Mix, State Chief Procurement Officer, Date Department of Administrative Services