TEMS - OIT Sole Source Justification and Certification v2.docx

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Governor’s Office of Information Technology (OIT) Sole Source Justification and Certification

A state agency shall complete this form before entering into a sole source procurement under CRS §24-103-205 and Procurement Rule R-24-103-205-01 for the purchase of goods over $10,000 and services over $25,000 and for sole source personal services contracts with a value over $100,000 in accordance with CRS §24-102-205(3)(a)(VI). Except, Sole Source Justification and Certification Forms are not required:

· Under circumstances outlined in §CRS 24-101-105 and related rules; and/or

· For interagency or intergovernmental agencies.

Procurement Rule R-24-103-205-01 states the following two criteria must be met to have a Sole Source procurement:

· There is only one good or service that can reasonably meet the need, and

· There is only one vendor who can provide the good or service.

SECTION 1 – SOLE SOURCE DETAILS: This section is to be completed by the Program Manager.

If Yes, provide details (including cost, project name, etc.):

MTS is the current provider of the Telecom Expense Management (TEM) Suite which enables the Office of Information Technology, on behalf of the State of Colorado, to collect utilization data from the telecommunications vendor (currently CenturyLink) and process monthly invoices through our Financial System -CORE to charge customers for real time telecommunications services.

B. Goods and/or Services to be Procured for this Sole Source:

(Describe in detail the goods and/or services to be procured and how they meet the State’s needs.)

To provide monthly processing of invoices from CenturyLink and provide direct input for the State’s financial system, CORE to allow for the monthly billing of customers. This includes: the validation and auditing of telecom spending; Invoice Management Services; Asset Management Services (unlimited assets); Dispute Management Services (5 hours per month); Contract Management Services (unlimited contracts); Standard Database Updates (employees and organizations) in TEM Suite Formats (monthly); Custom Accounts Payable Export File (weekly); and Payment Interface Importation.

C. Determination of Sole Source:

1. What type of Market Research was conducted?

2. If applicable, obtain manufacturer statement affirming good/service is not available through a distributor/reseller or other source:

D. Justification of Sole Source: (Provide a detailed explanation of Vendor’s sole source status – what is the basis for identifying this as a sole source - why will only this good/service fulfill the State’s need?)

The State launched a new financial system on 1 July 2014 and OIT staff, CORE staff, and MTS – IntegraTRAK, Inc. spent months of staff time and considerable funds, designing interfaces and test environments prior to go live. The financial system vendor does not have the financial or resource capacity under the existing agreement to perform this work again with a new vendor. The State is presently working on the next phase of the State financial system and cannot shift IT resources to design interfaces with another telecommunications billing vendor.

E. Conflict of Interest

If yes, please explain:

F. Pricing Evaluation: (Reference the price/cost analysis guidance when responding to the following questions)

Explanation of fair and reasonable prices/rates per CRS §24-103-403:

SECTION 2 – APPROVAL AND CERTIFICATION FOR CONTRACTS: To be completed by procurement office.

*** Approved for one time purchase as described on this request ***

Total # of Hits:

Certification – for Sole Source Personal Services Contracts over $100,000:

By signing below, we hereby certify, in accordance with CRS §24-102-205(3)(a)(VI), that we have determined that the agency has complied with CRS §24-102-205(5)(a) and has posted a sole source personal services contract on BIDS for not less than three business days.

Purchasing Agent:

Signature

Printed Name

Date

Approved:

Purchasing Director or Delegate Signature

Printed Name

Date

Use of Sole Source Form/Summary of Price and Cost Analysis Requirements:

Both sole source and emergency procurements require a written determination by the head of a purchasing agency, or a designee, of the basis for the approval. This form is designed for approval of a “sole source,” not an emergency procurement. Consult with your procurement official regarding requirements for emergency procurements.

This form should be completed and approved before formal negotiations leading to execution of an agreement with a vendor where a competitive process (documented quote, sealed bid, or competitive sealed proposal) is not used because a sole source is justified.

Normally, the actual pricing cannot be evaluated until after execution of the contract or issuance of the purchase order. The price or cost analysis (§24-103-403) should be included with the procurement file before execution of a purchase order or when the contract is routed for approval.

The methods of price cost analysis are explained in Chapter 5 of the Colorado Contract Procedures and Management Manual. Normally, price analysis is not done in competitive solicitations where “adequate competition” exists, because the competitive process takes care of the “fairness and reasonableness” of prices. However, in a sole source situation where no price competition exists, some analysis must be done to insure that the requirements of the controller’s statute are met, i.e., that prices or rates are “fair and reasonable.”

Common methods of price/cost analysis include:

a. Comparison of prices and rates to established catalog prices or market prices. In a sole source situation, there commonly are similar prices or rates, e.g., those on price agreements, that can serve as a guide to fairness or prices or rates proposed by a sole source provider. In some cases, e.g., some utilities, prices and rates are set by law or regulation (utility tariff rates).

b. Historical prices or rates for similar items or services procured in the past also serve as a guide to fair and reasonable prices.

c. In either case, even though neither historical or market prices involve the identical service, some analysis can often be done which evaluates the differences in the types of services or goods, and concludes that the nature of the differences warrant the differences in pricing. In other cases, judgments must be made that proprietary aspects of the service or commodity warrant expenditure of the prices or rates in excess of what is customary.

d. In cases where neither historical or catalog prices exist, cost analysis must be used. Vendors can be asked to provide summary level detail of materials and labor costs, as well as markups and other indirect cost rates included in the price. Technical judgments concerning labor hours can be applied to labor hour rates to evaluate the reasonableness of the overall price. Reasonable profit, of course, is another element of price. The Procurement Rules require the submission of cost or pricing data for noncompetitive acquisitions exceeding $50,000.

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