OAR 125-249-0630: Findings, Notice and Hearing

(1) General. ORS 279C.335(1) requires that all Public Improvement Contracts be based on competitive bidding, unless excepted or exempted. ORS 279C.335(2) permits the Director of DAS or the delegate of the Director of DAS under ORS 279A.075, as the public contract review authority for the State, to grant exemptions from the requirement for competitive bidding. In OAR 125-246-0170(3), the Director of DAS delegated Authority to the State Chief Procurement Officer to conduct hearings, approve Agency or State Agency Findings, approve exemption requests and issue exemption orders under ORS 279C.335. This Rule provides guidance to the Agencies for making a request for an Exemption to the State Chief Procurement Officer in accordance with ORS 279C.335 and OAR 125-246-0170(3)(a). (2) Findings: Required Information. (a) "Findings" is defined in ORS 279C.330, and for purposes of this Rule, ORS 279C.345, and 279C.350, means the justification for an Agency or State Agency conclusion that includes, but is not limited to, information regarding: (A) Operational, budget and financial data; (B) Public benefits; (C) Value engineering; (D) Specialized expertise required; (E) Public safety; (F) Market conditions; (G) Technical complexity; and (H) Funding sources. (b) For purposes of this Rule and ORS 279C.335, “Findings” is defined in ORS 279C.330, and means the justification for a conclusion that an Agency or State Agency, in seeking an exemption from the competitive bidding requirement of ORS 279C.335(1), reaches based on the considerations set forth in ORS 279C.335(2). (c) For purposes of this Rule and ORS 279C.335, “State Agency” is defined in ORS 279A.010 and means the executive department, except the Secretary of State and the State Treasurer in the performance of the duties of their constitutional offices. (d) An Agency or State Agency seeking an exemption must submit the following Findings for approval: (A) The exemption is unlikely to encourage favoritism in awarding Public Improvement Contracts or substantially diminish competition for Public Improvement Contracts; and (B) Awarding a Public Improvement Contract under the exemption will likely result in substantial cost savings and other substantial benefits to the Agency seeking the exemption. In approving a Finding under this paragraph, the Director of DAS shall consider the type, cost and amount of the Contract and, to the extent applicable to the particular Public Improvement Contract or class of Public Improvement Contracts, the following: (i) How many Persons are available to bid; (ii) The construction budget and the projected operating costs for the completed Public Improvement; (iii) Public benefits that may result from granting the exemption; (iv) Whether value engineering techniques may decrease the cost of the Public Improvement; (v) The cost and availability of specialized expertise that is necessary for the Public Improvement; (vi) Any likely increases in public safety; (vii) Whether granting the exemption may reduce risks to the Contracting Agency, the State Agency or the public that are related to the Public Improvement; (viii) Whether granting the exemption will affect the sources of funding for the Public Improvement; (ix) Whether granting the exemption will better enable the Contracting Agency to control the impact that market conditions may have on the cost of and time necessary to complete the Public Improvement; (x) Whether granting the exemption will better enable the Contracting Agency to address the size and technical complexity of the Public Improvement; (xi) Whether the Public Improvement involves new construction or renovates or remodels an existing structure; (xii) Whether the Public Improvement will be occupied or unoccupied during construction; (xiii) Whether the Public Improvement will require a single phase of construction work or multiple phases of construction work to address specific project conditions; and (xiv) Whether the Contracting Agency or State Agency has, or has retained under Contract, and will use Contracting Agency or State Agency personnel, Consultants and legal counsel that have necessary expertise and substantial experience in alternative contracting methods to assist in developing the alternative contracting method that the Contracting Agency or State Agency will use to award the Public Improvement Contract and to help negotiate, administer and enforce the terms of the Public Improvement Contract. (C) As an alternative to the Finding described in paragraph (B), if an Agency or State Agency seeks an exemption that would allow the Agency or State Agency to use an alternative contracting method that the Agency or State Agency has not previously used, the Agency or State Agency may make a Finding that identifies the project as a pilot project for which the Agency or State Agency intends to determine whether using the alternative contracting method actually results in substantial cost savings to the Agency or State Agency. The Agency or State Agency must include an analysis and conclusion regarding actual cost savings, if any, in the evaluation required under ORS 279C.355. (3) Specificity of Findings. (a) Method. Findings supporting a competitive bidding exemption must describe with specificity the alternative contracting method to be used in lieu of competitive bidding, including, but not limited to, whether a one step (Request for Proposals) or two step (beginning with Requests for Qualifications) solicitation process will be utilized. (b) Project(s). The Findings must clearly and generally identify the project with respect to its defining characteristics. Those characteristics must include at least: project descriptions, locations, anticipated time periods, anticipated contract values or the range of values, and other significant factors that distinguish the project(s) from an Agency's overall construction program. (c) Contract. The Findings may also describe anticipated characteristics or features of the resulting Public Improvement Contract. The parameters of the Public Improvement Contract are those characteristics or specifics that are announced in the Solicitation Document. (d) Basis for an Order. The State Chief Procurement Officer relies upon the representations and accuracy of the Agency’s Findings, which form the basis for and are incorporated by reference in any subsequent exemption order. (4) Prior Review of Draft Findings. Agencies must submit draft Findings to the State Chief Procurement Officer for review and concurrence prior to advertising the public hearing required by ORS 279C.335(5). Agencies must also submit draft Findings to the Department of Justice for review and comment prior to advertising the public hearing. (5) Class Exemptions. In making the Findings supporting an exemption for a class of Public Improvement Contracts, the Agency must clearly identify the class with respect to its defining characteristics. Those characteristics must include some combination of project descriptions or locations, time periods, contract values or method of Procurement or other factors that distinguish the limited and related class of projects from the Agency's overall construction program. Classes must not be defined solely by funding sources, such as a particular bond fund, or by method of Procurement, but must be defined by characteristics that reasonably relate to the exemption criteria set forth in ORS 279C.335(2). (6) Public Hearing. Before final adoption of Findings exempting a Public Improvement Contract or class of Contracts from the requirement of competitive bidding, an Agency must give notice and hold a public hearing as required by ORS 279C.335(5). The hearing must be for the purpose of receiving public comment on the Agency's draft Findings. (7) In granting an exemption under ORS 279C.335(2), the State Chief Procurement Officer shall: (a) If appropriate, direct the use of alternative contracting methods that take account of market realities and modern practices and are consistent with the public policy of encouraging competition. (b) Require and approve or disapprove Written Findings by the agency that support awarding a particular Public Improvement Contract or a class of Public Improvement Contracts, without the competitive bidding requirement of ORS 279C.335(1). The Findings must show that the exemption complies with the requirements of ORS 279C.335 (2). (c) Require an Agency that procures Construction Manager/General Contractor (“CM/GC”) Services to conduct the Procurement in accordance with the CM/GC contracting requirements contained in the DOJ Model Rules for CM/GC procurements in OAR 137-049. (d) Require an Agency that procures Design-Build services to conduct the Procurement, to the extent feasible and consistent with the exemption, in accordance with the Design-Build contracting requirements contained in OAR 125-249-0600 through 125-249-0670 and in the DOJ Model Rules for Design-Build procurements in OAR 137-049.