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The Oregon Administrative Rules contain OARs filed through January 15, 2010

DEPARTMENT OF ADMINISTRATIVE SERVICES

DIVISION 249

PUBLIC CONTRACTS FOR CONSTRUCTION SERVICES

General Provisions

125-249-0100

Application; Federal Override; Effective Date

(1) In addition to the general requirements set forth in Division 246 of these Rules, the Rules in this Division 249 apply to Public Improvement Contracts. Only specific Rules in this Division 249 apply to Public Contracts for Ordinary Construction Services as described in OAR 125-249-0140. In the event of conflict or ambiguity, the more specific requirements of the Rules in this Division 249 take precedence over the more general requirements of the Rules in Division 246.

(2) The Rules as a whole implement the Oregon Public Contracting Code (Code), as defined in ORS 279A.010. This Division 249 of the Rules specifically addresses matters covered in ORS Chapter 279C.005, 279C.010, 279C.300 through 279C.870. Rules related to Architectural, Engineering, Land Surveying, and Related Services are found in Division 248.

(3) According to OAR 125-246-0100 and except as otherwise expressly provided in ORS 279C.800 through 279C.870, applicable federal statutes and regulations govern when federal funds are involved and the federal statutes or regulations require additional conditions or conflict with the Code or with these Rules.

(4) These Division 249 Rules apply only to the above-described Public Contracts first advertised on or after March 1, 2005, and to unadvertised Public Contracts entered into on or after March 1, 2005.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279A.065
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0110

Policies

In addition to the policies of the Code as set forth in ORS 279A.015, the policy on competition as provided in ORS 279C.300 applies to this division, except as provided in ORS 279C.335. The policy on least-cost for Public Improvements applies as described within ORS 279C.305.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.300 & 279C.305
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0120

Definitions

The definitions for this Division 249 are found in OAR 125-246-0110, except the following Rule and definitions apply only to this Division 249: Capitalized terms used in this Division 249 of the Rules must have the meaning set forth below or within the Sections in which they appear (such as the Section on Alternative Contracting Methods beginning at OAR 125-249-0600, and if not defined there, then the meaning set forth in division 246 of the rules, and if not defined there, then the meaning set forth in the Code at ORS 279A.010 (general definitions) or 279C.330 (for the term Findings).

(1) "Competitive Range" means the number of Proposers with whom the Authorized Agency will conduct Discussions or Negotiations if the Authorized Agency intends to conduct Discussions or Negotiations in accordance with OAR 125-249-0390. The size of the Competitive Range must be stated in the Solicitation Document, but will be decreased if the number of Proposers that submit Proposals is less than the specified number, or may be increased by the Authorized Agency in accordance with OAR 125-249-0390.

(2) "Conduct Disqualification" means a Disqualification according to ORS 279C.440.

(3) "Disqualification" means the preclusion of a Person from contracting with an Authorized Agency for a period of time. Disqualification may be a Conduct Disqualification or DBE Disqualification. An Authorized Agency is authorized to disqualify a Person in accordance with OAR 125-249-0370.

(4) "Foreign Contractor" means a Contractor that is not domiciled in or registered to do business in the State of Oregon. See OAR 125-249-0490.

(5) "Notice" means any of the alternative forms of public announcement of Procurements, as described OAR 125-249-0210.

(6) "Responsible Offeror" (also, Responsible Bidder or Responsible Proposer, as applicable) means a Person that has submitted an Offer and meets the standards set forth in OAR 125-249-0390(2) and that has not been disqualified by the Authorized Agency under OAR 125-249-0370. When used alone, "Responsible" means meeting the aforementioned standards.

(7) "Responsive Offer" (also, Responsive Bid or Responsive Proposal, as applicable) means an Offer that substantially complies in all material respects with applicable Solicitation procedures and requirements and the Solicitation Document. When used alone, "Responsive" means having the characteristic of substantially complying in all material respects with applicable Solicitation procedure and requirements and the Solicitation Document.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0130

Competitive Bidding Requirement

An Authorized Agency must solicit Bids for Public Improvement Contracts by Invitation to Bid ("ITB"), except as otherwise allowed or required according to ORS 279C.335 on competitive bidding exceptions and exemptions, ORS 279A.030 on federal law overrides, or ORS 279A.100 on affirmative action. Also see OAR 125-249-0600 to 125-249-0690 regarding the use of Alternative Contracting Methods and the exemption process.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.335
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0140

Contracts for Construction Other Than Public Improvements

(1) Procurement under ORS Chapter 279B. According to ORS 279C.320, Public Contracts for ordinary construction Services that are not Public Improvement Contracts, may be procured and amended as general Trade Services under the provisions of ORS Chapter 279B rather than under the provisions of ORS Chapter 279C and these Division 249 Rules. Emergency Contracts for construction Services are not Public Improvement Contracts and are regulated under ORS 279B.080.

(2) Application of ORS Chapter 279C and Division 249 Rules to Ordinary Construction Services. Non-procurement provisions of ORS Chapter 279C and these Division 249 Rules may still be applicable to the resulting Contracts for ordinary construction Services. See, for examples, particular statutes on Disqualification (ORS 279C.440, 445 and 450); Legal Actions (ORS 279C.460 and 465); Required Contract Conditions (ORS 279C.505, 510, 515, 520, 525, and 530); Hours of Labor (ORS 279C.540 and 545); Retainage (ORS 279C.550, 555, 560 and 565); Subcontracts (ORS 279C.580 and 279C.585); Action on Payment Bonds (ORS 279C.600, 610, 615, 620 and 625); Termination (ORS 279C.650, 655, 660, 665 and 670); and all of the Prevailing Wage Rates requirements (ORS 279C.800 through 870) for Public Works Contracts.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.320
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0145

Contracts for Oversight of Public Contracts

(1) Application.

(a) This Rule does not apply to a Procurement that qualifies as a construction manager/general contractor procurement or a design-build procurement, both as defined on August 4, 2009, in OAR 125-249-0610, as follows:

(A) "Construction Manager/General Contractor" (CM/GC) means a form of Procurement that results in a Public Improvement Contract for a Construction Manager/General Contractor to undertake project team involvement with design development; constructability reviews; value engineering, scheduling, estimating and subcontracting services; establish a Guaranteed Maximum Price to complete the Contract Work; act as General Contractor; hold all subcontracts, self-perform portions of the Work as may be allowed by the Authorized Agency under the CM/GC Contract; coordinate and manage the building process; provide general Contractor expertise; and act as a member of the project team along with the Authorized Agency, architect/engineers and other Consultants. CM/GC also refers to a Contractor under this form of Contract, sometimes known as the "Construction Manager at Risk."

(B) "Design-Build" means a form of Procurement that results in a Public Improvement Contract in which the construction Contractor also provides or obtains specified design Services, participates on the project team with the Authorized Agency, and manages both design and construction. In this form of Contract, a single Person provides the Authorized Agency with all of the Personal Services and Work necessary to both design and construct the project.

(b) This Rule applies to:

(A) Procurements first advertised or otherwise solicited on or after January 1, 2010; or

(B) Contracts entered into on or after January 1, 2010.

(2) Definitions. For the purposes of this Rule only,

(a) “Personal Services” means Personal Services as defined in OAR 125-246-0110.

(b) “Affiliate” means a Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Contractor who is a party to a Public Contract that is subject to oversight by means of a Public Contract for Personal Services.

(3) Requirements.

(a) If an Authorized Agency has contracted with a firm to provide construction services or Architectural, Engineering and Land Surveying Services or Related Services, the Authorized Agency may not contract with that same firm or an affiliate of that firm to provide Personal Services for administering, managing, monitoring, inspecting, evaluating compliance with, or otherwise providing oversight of the construction services or Architectural, Engineering and Land Surveying Services or Related Services.

(b) An Authorized Agency may not contract with a firm to perform construction services or Architectural, Engineering and Land Surveying Services or Related Services and then use the contract with that firm, through a subcontract, to contract with a Person to provide Personal Services for administering, managing, monitoring, inspecting, evaluating compliance with, or otherwise providing oversight of that firm.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: OL 2009, Ch 880
Hist.: DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0150

Emergency Contracts; Bidding and Bonding Exemptions

(1) Emergency Declaration. An Authorized Agency may declare that Emergency circumstances exist that require prompt execution of a Public Contract for Emergency construction or repair Work. The declaration must be made at an administrative level consistent with the Authorized Agency's internal policies, by a Written declaration that describes the circumstances creating the Emergency as that term is defined at ORS 279A.010(1)(f), and the anticipated harm from failure to enter into an Emergency Contract. The Emergency declaration must be kept on file as a public record.

(2) Competition for Emergency Contracts. According to ORS 279C.320(1), Emergency Contracts are regulated under ORS 279B.080, which provides that, for an emergency procurement of construction services, the Authorized Agency must ensure competition that is reasonable and appropriate under the Emergency circumstances, and may include Written requests for Offers, oral requests for Offers, or direct appointments without competition in cases of extreme necessity, in whatever Solicitation time periods the Authorized Agency considers reasonable in responding to the Emergency.

(3) Emergency Contract Scope. Although no dollar limitation applies to Emergency Contracts, the Scope of the Contract must be limited to Work that is necessary and appropriate to remedy the conditions creating the Emergency as described in the declaration.

(4) Emergency Contract Modification. Emergency Contracts may be modified by change order or Amendment to address the conditions described in the original declaration or an amended declaration that further describes additional Work necessary and appropriate for related Emergency circumstances.

(5) Excusing Bonds. According to ORS 279C.380(4) and this Rule, the Emergency declaration may also state that the Authorized Agency waives the requirement of furnishing a performance bond and payment bond for the Emergency Contract. After making such an Emergency declaration those bonding requirements are excused for the Procurement.

(6) State and Federal Economic Stimulus Programs. Sections (1) through (5) of this Rule do not apply to Procurements and Contracts under any state economic stimulus program or any federal economic stimulus program administered by the Department or an Authorized Agency. See OAR 125-247-0280.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279B.080, 279C.320 & 279C.380(4)
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 5-2009(Temp), f. & cert. ef. 2-13-09 thru 8-12-09; DAS 9-2009, f. & cert. ef. 8-11-09

125-249-0160

Intermediate Procurements; Competitive Quotes and Amendments

(1) General. Public Improvement Contracts estimated by the Authorized Agency not to exceed $100,000 (Threshold), may be Awarded in accordance with intermediate level procurement procedures for Competitive Quotes established by this Rule.

(2) Selection Criteria. The selection criteria may be limited to price or some combination of price, experience, specific expertise, availability, project understanding, Contractor capacity, responsibility and similar factors.

(3) Request for Quotes. Authorized Agencies must utilize Written requests for Quotes whenever reasonably practicable. Written request for Quotes must include the selection criteria to be utilized in selecting a Contractor and, if the criteria are not of equal value, their relative value or ranking. When requesting quotations orally, prior to requesting the price quote the Authorized Agency must state any additional selection criteria and, if the criteria are not of equal value, their relative value. For Public Works Contracts, oral quotations may be utilized only in the event that Written copies of the prevailing wage rates are not required by the Bureau of Labor and Industries.

(4) Number of Quotes; Record Required. Authorized Agencies must seek at least three (3) competitive Quotes, and keep a Written record of the sources and amounts of the Quotes received. If three (3) Quotes are not reasonably available the Authorized Agency must make a Written record of the effort made to obtain those Quotes.

(5) Award. If awarded, the Authorized Agency must Award the Contract to the prospective Contractor whose quote will best serve the interests of the Authorized Agency, taking into account the announced selection criteria. If Award is not made to the Offeror offering the lowest price, the Authorized Agency must make a Written record of the basis for Award.

(6) Price Increases. Intermediate level Public Improvement Contracts obtained by Competitive Quotes may be increased above the original amount of Award by the Authorized Agency issuance of a Change to the Work or Amendment, according to OAR 125-249-0910, within the following limitations:

(a) Up to an aggregate Contract Price increase of 25% over the Original Contract amount, when an Authorized Agency's Designated Procurement Officer determines that a price increase is warranted for additional reasonably related Work;

(b) Up to an aggregate Contract Price increase of 50% over the Original Contract amount, when an Authorized Agency's Designated Procurement Officer determines that a price increase is warranted for additional reasonably related Work and the head of the Authorized Agency or supervisor of the Designated Procurement Officer approves the increase; and

(c) An unlimited increase over the Original Contract amount, when the aggregate amount of the Contract, including all Changes to the Work and Amendments, does not exceed the Threshold stated in Section (1).

(7) Amendments. Amendments of intermediate level Public Improvement Contracts that exceed the Threshold stated in Section (1) are specifically authorized by the Code, when made in accordance with this Rule and OAR 125-249-0910. Accordingly, such Amendments are not considered new Procurements and do not require an exemption from competitive bidding.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279C.412
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 9-2005, f. & cert. ef. 8-3-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

Formal Procurement Rules

125-249-0200

Solicitation Documents; Required Provisions; Assignment or Transfer

(1) Solicitation Document. According to ORS 279C.365 and this Rule, the Solicitation Document must include the following:

(a) General Information.

(A) Identification of the Public Improvement project, including the character of the Work, and applicable plans, Specifications and other contract documents;

(B) Notice of any pre-Offer conference as follows:

(i) The time, date and location of any pre-Offer conference;

(ii) Whether attendance at the conference will be mandatory or voluntary; and

(iii) That statements made by the Authorized Agency's representatives at the conference are not binding upon the Authorized Agency unless confirmed by Written Addendum.

(C) The deadline for submitting mandatory prequalification applications and the class or classes of Work for which Offerors must be prequalified if prequalification is a requirement;

(D) The name and title of the Authorized Agency Person designated for receipt of Offers and contact Person (if different);

(E) Instructions and information concerning the form and submission of Offers, including the address of the office to which Offers must be delivered, any Bid or Proposal security requirements, and any other required information or special information, e.g., whether Offers may be submitted by Facsimile or electronic means (See OAR 125-249-0300 regarding Facsimile Bids or Proposals and OAR 125-249-0310 regarding electronic Procurement);

(F) The time, date and place of Opening;

(G) The time and date of Closing after which an Authorized Agency will not accept Offers, which time must be not less than five (5) Days after the date of the last publication of the advertisement. Although a minimum of five (5) Days is proscribed, Authorized Agencies are encouraged to use at least a (fourteen) 14 Day Solicitation period when feasible. If the Authorized Agency is issuing an ITB that may result in a Public Improvement Contract with a value in excess of $100,000, the Authorized Agency must designate a time of Closing consistent with the first-tier subcontractor disclosure requirements of ORS 279C.370(1)(b) and OAR 125-249-0360. For timing issues relating to Addenda, see OAR 125-249-0250;

(H) The office where the Specifications for the Work may be reviewed;

(I) A statement that each Bidder to an ITB must identify whether the Bidder is a "resident Bidder", as defined in ORS 279A.120;

(J) If the Contract resulting from a Solicitation will be a Contract for a Public Work subject to ORS 279C.800 to 279C.870 or the Davis-Bacon Act (40 U.S.C. 3141 to 3148), a statement that no Offer will be received or considered by the Authorized Agency unless the Offer contains a statement by the Offeror as a part of its Offer that "Contractor agrees to be bound by and will comply with the provisions of ORS 279C.838, 279C.840 or 40 U.S.C. 3141 to 3148;

(K) A statement that the Authorized Agency will not receive or consider an Offer for a Public Improvement Contract unless the Offeror is registered with the Construction Contractors Board, or is licensed by the State Landscape Contractors Board, as specified in OAR 125-249-0230;

(L) Whether a Contractor or a subcontractor under the Contract must be licensed under ORS 468A.720 regarding asbestos abatement projects;

(M) Contractor's certification of nondiscrimination in obtaining required subcontractors in accordance with ORS 279A.110(4). (See OAR 125-249-0440(3));

(N) How the Authorized Agency will notify Offerors of Addenda and how the Authorized Agency will make Addenda available (See OAR 125-249-0250); and

(O) When applicable, instructions and forms regarding First-Tier Subcontractor Disclosure requirements, as set forth in OAR 125-249-0360.

(b) Evaluation Process.

(A) A statement that the Authorized Agency may reject any Offer not in compliance with all prescribed Public Contracting procedures and requirements, including the requirement to demonstrate the Bidder’s responsibility under ORS 279C.375(3)(b), and may reject for good cause all Offers after finding that doing so is in the public interest ;

(B) The anticipated Solicitation schedule, deadlines, protest process, and evaluation process, if any;

(C) Evaluation criteria, including the relative value applicable to each criterion, that the Authorized Agency will use to determine the Responsible Bidder with the lowest Responsive Bid (where Award is based solely on price) or the Responsible Proposer or Proposers with the best Responsive Proposal or Proposals (where use of Competitive Proposals is authorized under ORS 279C.335 and OAR 125-249-0620), along with the process the Authorized Agency will use to determine acceptability of the Work;

(i) If the Solicitation Document is an Invitation to Bid, the Authorized Agency must set forth any special price evaluation factors in the Solicitation Document. Examples of such factors include, but are not limited to, conversion costs, transportation cost, volume weighing, trade-in allowances, cash discounts, depreciation allowances, cartage penalties, and ownership or life-cycle cost formulas. Price evaluation factors need not be precise predictors of actual future costs; but, to the extent possible, such evaluation factors must be objective, reasonable estimates based upon information the Authorized Agency has available concerning future use;

(ii) If the Solicitation Document is a Request for Proposals, the Authorized Agency must refer to the additional requirements of OAR 125-249-0650.

(c) Contract Provisions. The Authorized Agency must include all contract terms and conditions, including warranties, insurance and bonding requirements, that the Authorized Agency considers appropriate for the Public Improvement project. The Authorized Agency must also include all applicable contract provisions required by Oregon law as follows:

(A) Prompt payment to all Persons supplying labor or material; contributions to Industrial Accident Fund; liens and withholding taxes (ORS 279C.505(1));

(B) Demonstrate that an employee drug testing program is in place (ORS 279C.505(2));

(C) If the Contract calls for demolition Work described in ORS 279C.510(1), a condition requiring the Contractor to salvage or recycle construction and demolition debris, if feasible and cost-effective;

(D) If the Contract calls for lawn or landscape maintenance, a condition requiring the Contractor to compost or mulch yard waste material at an approved site, if feasible and cost effective (ORS 279C.510(2);

(E) Payment of claims by public officers (ORS 279C.515(1));

(F) Contractor and first-tier subcontractor liability for late payment on Public Improvement Contracts according to ORS 279C.515(2), including the rate of interest;

(G) Person's right to file a complaint with the Construction Contractors Board for all Contracts related to a Public Improvement Contract (ORS 279C.515(3));

(H) Hours of labor in compliance with ORS 279C.520;

(I) Environmental and natural resources regulations (ORS 279C.525);

(J) Payment for medical care and attention to employees (ORS 279C.530(1);

(K) Maximum hours, holidays and overtime (ORS 279C.540);

(L) Time limitation on claims for overtime (ORS 279C.545);

(M) Prevailing wage rates (ORS 279C.800 to 279C.870);

(i) BOLI Public Works bond (ORS 279C.830(2));

(N) Retainage (ORS 279C.550 to 279C.570);

(i) Prompt payment policy, progress payments, rate of interest (ORS 279C.570);

(O) Contractor's relations with subcontractors (ORS 279C.580);

(P) Notice of claim (ORS 279C.605);

(Q) Contractor's certification of compliance with the Oregon tax laws in accordance with ORS 305.385; and

(R) Contractor's certification that all subcontractors performing Work described in ORS 701.005(2) (i.e., construction Work) will be registered with the Construction Contractors Board or licensed by the State Landscape Contractors Board in accordance with ORS 701.035 to 701.055 before the subcontractors commence Work under the Contract.

(2) Assignment or Transfer Restricted. Unless otherwise provided in the Contract, the Contractor must not assign, sell, dispose of, or transfer rights, or delegate duties under the Contract, either in whole or in part, without the Authorized Agency's prior Written consent. Unless otherwise agreed by the Authorized Agency in Writing, such consent must not relieve the Contractor of any obligations under the Contract. Any assignee or transferee must be considered the agent of the Contractor and be bound to abide by all provisions of the Contract. If the Authorized Agency consents in Writing to an assignment, sale, disposal or transfer of the Contractor's rights or delegation of Contractor's duties, the Contractor and its surety, if any, must remain liable to the Authorized Agency for complete performance of the Contract as if no such assignment, sale, disposal, transfer or delegation had occurred unless the Authorized Agency otherwise agrees in Writing.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279A.110, 279A.120, 279C.365, 279C.370, 279C.390, 279C.505 - 580, 279C.605, 305.385, 468A.720, 701.005, 701.055
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0210

Notice and Advertising Requirements; Posting

(1) Notice and Distribution Fee. An Authorized Agency must furnish “Notice,” as set forth below in Section (2), to a number of Persons sufficient for the purpose of fostering and promoting competition. The Notice must indicate where, when, how, and for how long the Solicitation Document may be obtained and generally describe the Public Improvement project or Work. The Notice may contain any other appropriate information. The Authorized Agency may charge a fee or require a deposit for the Solicitation Document.

(2) Advertising. According to ORS 279C.360 and this Rule, an Authorized Agency must advertise on ORPIN every Solicitation for competitive Bids or competitive Proposals for a Public Improvement Contract, unless the Chief Procurement Officer has exempted the Solicitation from the advertisement requirement as part of a competitive bidding exemption under ORS 279C.335.

(a) The Authorized Agency must furnish Notice using ORPIN and may use any additional method determined to foster and promote competition, including:

(A) Mailing notice of the availability of the Solicitation Document to Persons that have expressed an interest in the Authorized Agency’s Procurements;

(B) Placing a Notice on the Authorized Agency’s Internet World Wide Web site; or

(b) Authorized Agencies must publish advertisements utilizing ORPIN as required under Sections (2)(a). Authorized Agencies may also publish advertisements utilizing other forms of Electronic Advertisement, such as Authorized Agency and general circulation web sites, as permitted under Section (2)(a). Authorized Agencies may also publish advertisements utilizing at least one (1) newspaper of general circulation in the area where the Contract is to be performed and in as many additional issues and publications as the Authorized Agency determines to be necessary or desirable to foster and promote competition.

(c) An Authorized Agency may publish by Electronic Advertisement if the Authorized Agency posts in its business office a notice that the Authorized Agency will publish advertisements for Offers by Electronic Advertisement. The notice must include the World Wide Web location (i.e., Uniform Resource Locator or URL) where the Authorized Agency publishes Electronic Advertisements or alternatively, to the Web location where the Authorized Agency publishes information on accessing the Electronic Advertisement via Telnet; and

(d) In addition to the Authorized Agency's publication required under Subsection 2(a) or 2(b), the Authorized Agency must also publish advertisement for Offers in at least one (1) trade newspaper of general statewide circulation if the Contract is for a Public Improvement with an estimated cost in excess of $125,000.

(e) All advertisements for Offers must set forth:

(A) The Public Improvement project;

(B) The office where Contract terms, conditions and Specifications may be reviewed;

(C) The date that Persons must file applications for prequalification under ORS 279C.430, if prequalification is a requirement, and the class or classes of Work for which Persons must be prequalified;

(D) The scheduled Closing, that must not be less than five (5) Days after the date of the last publication of the advertisement;

(E) The name, title and address of the Authorized Agency Person authorized to receive Offers;

(F) The scheduled Opening; and

(G) If applicable, that the Contract is for a Public Work subject to ORS 279C.800 to 279C.870 or the Davis-Bacon Act (40 U.S.C. 3141 to 3148).

(3) Availability of Written Advertisement for Offers. Upon the request of any member of the public, the Authorized Agency must provide a copy of each advertisement for Offers and all supporting documents, to be located in the Procurement File or an identified repository.

(4) Minority, Women Emerging Small Business. State Authorized Agencies must provide timely notice of all Solicitations to the Advocate for Minority, Women and Emerging Small Business if the estimated Contract Price exceeds $5,000. See ORS 200.035.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.360 & 200.035
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0220

Prequalification of Offerors

(1) Prequalification. According to ORS 279C.430 and this Rule, two types of prequalification are authorized:

(a) Mandatory Prequalification. An Authorized Agency may, by rule, resolution, ordinance or other regulation, require mandatory prequalification of Offerors. An Authorized Agency must indicate in the Solicitation Document if it will require mandatory prequalification. Mandatory prequalification is when an Authorized Agency conditions a Person's submission of an Offer upon the Person's prequalification. The Authorized Agency must not consider an Offer from a Person that is not prequalified if the Authorized Agency required prequalification.

(b) Permissive Prequalification. An Authorized Agency may prequalify a Person for the Authorized Agency's Solicitation list, but in permissive prequalification the Authorized Agency must not limit distribution of a Solicitation to that list.

(2) Prequalification Presumed. If an Offeror is currently prequalified by either the Oregon Department of Transportation or the Department to perform Contracts, the Offeror must be rebuttably presumed qualified to perform similar Work for other Authorized Agencies.

(3) Standards for Prequalification. A Person may prequalify by demonstrating to the Authorized Agency's satisfaction:

(a) That the Person's financial, material, equipment, facility and Personnel resources and expertise, or ability to obtain such resources and expertise, indicate that the Person is capable of meeting all contractual responsibilities;

(b) The Person's record of performance;

(d) The Person is qualified to contract with the Authorized Agency. (See OAR 125-249-0390(2) regarding standards of responsibility).

(4) Notice of Denial. If a Person fails to prequalify for a mandatory prequalification, the Authorized Agency must notify the Person and specify the reasons under Section (3) of this Rule and inform the Person of the Person's right to a hearing under ORS 279C.445 and 279C.450.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.430 & 279C.435
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0230

Eligibility to Bid or Propose; Registration or License

(1) Construction Contracts. An Authorized Agency must not consider a Person's Offer to do Work as a Contractor, as defined in ORS 701.005(2), unless the Person has a current, valid certificate of registration issued by the Construction Contractors Board at the time the Offer is made.

(2) Landscape Contracts. An Authorized Agency must not consider a Person's Offer to do Work as a landscape Contractor as defined in ORS 671.520(2), unless the Person has a current, valid landscape Contractors license issued according to ORS 671.560 by the State Landscape Contractors Board at the time the Offer is made.

(3) Noncomplying Entities. The Authorized Agency must deem an Offer received from a Person that fails to comply with this rule nonresponsive and must reject the Offer as stated in ORS 279C.365(1)(k), unless contrary to federal law or subject to different timing requirements set by federal funding Authorized Agencies.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365, 671.530 & 701.055
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0240

Pre-Offer Conferences

(1) Purpose. An Authorized Agency may hold pre-Offer conferences with prospective Offerors prior to Closing, to explain the procurement requirements, obtain information, or to conduct site inspections.

(2) Required Attendance. The Authorized Agency may require attendance at the pre-Offer conference as a condition for making an Offer. Unless otherwise specified in the Solicitation Document, a mandatory attendance requirement is considered to have been met if, at any time during the mandatory meeting, a Person identifying themselves as a representative of an offering firm is present.

(3) Scheduled Tme. If an Authorized Agency holds a pre-Offer conference, it must be held within a reasonable time after the Solicitation Document has been issued, but sufficiently before the Closing to allow Offerors to consider information provided at that conference.

(4) Statements Not Binding. Statements made by an Authorized Agency's representative at the pre-Offer conference do not change the Solicitation Document unless the Authorized Agency confirms such statements with a Written Addendum to the Solicitation Document.

(5) Authorized Agency Announcement. The Authorized Agency must set forth notice of any pre-Offer conference in the Solicitation Document in accordance with OAR 125-249-0200(1)(a)(B).

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365 & 279C.370
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0250

Addenda to Solicitation Documents

(1) Issuance; Receipt. The Authorized Agency may change a Solicitation Document only by Written Addenda. An Offeror must provide Written acknowledgement of receipt of all issued Addenda with its Offer, unless the Authorized Agency otherwise specifies in the Addenda or in the Solicitation Document.

(2) Notice and Distribution. The Authorized Agency must notify prospective Offerors of Addenda consistent with the standards of Notice set forth in OAR 125-249-0210(1). The Solicitation Document must specify how the Authorized Agency will provide notice of Addenda and how the Authorized Agency will make the Addenda available (see, OAR 125-249-0200(1)(a)(N). For example, "The Authorized Agency will not mail notice of Addenda, but will publish notice of any Addenda on the Authorized Agency's Web site. Addenda may be downloaded off the Authorized Agency's Web site. Offerors should frequently check the Authorized Agency's Web site until closing, i.e., at least once weekly until the week of Closing and at least once daily the week of the Closing,"

(3) Timelines; Extensions. The Authorized Agency must issue Addenda within a reasonable time to allow prospective Offerors to consider the Addenda in preparing their Offers. The Authorized Agency may extend the Closing if the Authorized Agency determines prospective Offerors need additional time to review and respond to Addenda. Except to the extent required by public interest, the Authorized Agency must not issue Addenda less than 72 hours before the Closing unless the Addendum also extends the Closing.

(4) Request for Change or Protest. Unless a different deadline is set forth in the Addendum, an Offeror may submit a Written request for change or protest to the Addendum, as provided in OAR 125-249-0260, by the close of the Authorized Agency's next business day after issuance of the Addendum, or up to the last day allowed to submit a request for change or protest under OAR 125-249-0260, whichever date is later. The Authorized Agency must consider only an Offeror's request for change or protest to the Addendum; the Authorized Agency must not consider a request for change or protest to matters not added or modified by the Addendum, unless the Offeror submits the request for change or protest before the deadline for the Authorized Agency's receipt of request for change or protests as set forth in OAR 125-249-0260(2) and (3).

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065 & 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0260

Request for Clarification or Change; Solicitation Protests

(1) Clarification. Before the deadline for submitting a Written request for change or protest, an Offeror may request that the Authorized Agency clarify any provision of the Solicitation Document. The Authorized Agency's clarification to an Offeror, whether orally or in Writing, does not change the Solicitation Document and is not binding on the Authorized Agency unless the Authorized Agency amends the Solicitation Document by Addendum.

(2) Request for Change.

(a) Delivery. An Offeror may request in Writing a change to the Specifications or contract terms and conditions. Unless otherwise specified in the Solicitation Document, an Offeror must deliver the Written request for change to the Authorized Agency not less than ten (10) Days before Closing;

(b) Content of Request for Change.

(A) An Offeror's Written request for change must include a statement of the requested change(s) to the contract terms and conditions, including any Specifications, together with the reason for the requested change.

(B) An Offeror must mark its request for change as follows:

(i) "Contract Provision Request for Change"; and

(ii) Solicitation Document number (or other identification as specified in the Solicitation Document).

(3) Protest.

(a) Delivery. An Offeror may protest Specifications or contract terms and conditions. Unless otherwise specified in the Solicitation Document, an Offeror must deliver a Written protest on those matters to the Authorized Agency not less than ten (10) Days before Closing;

(b) Content of Protest.

(A) An Offeror's Written protest must include:

(i) A detailed statement of the legal and factual grounds for the protest;

(ii) A description of the resulting prejudice to the Offeror; and

(iii) A statement of the desired changes to the contract terms and conditions, including any Specifications.

(B) An Offeror must mark its protest as follows:

(i) "Contract Provision Protest"; and

(ii) Solicitation Document number (or other identification as specified in the Solicitation Document)

(4) The Authorized Agency Response. The Authorized Agency is not required to consider an Offeror's request for change or protest after the deadline established for submitting such request or protest. The Authorized Agency must provide notice to the applicable Person if it entirely rejects a protest. If the Authorized Agency agrees with the Person's request or protest, in whole or in part, the Authorized Agency must either issue an Addendum reflecting its determination under OAR 125-249-0260 or cancel the Solicitation under 125-249-0270.

(5) Extension of Closing. If an Authorized Agency receives a Written request for change or protest from an Offeror in accordance with this Rule, the Authorized Agency may extend Closing if the Authorized Agency determines an extension is necessary to consider the request or protest and issue an Addendum, if any, to the Solicitation Document.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.345 & 279C.365
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0270

Cancellation of Solicitation Document

(1) Cancellation in the Public Interest. An Authorized Agency may cancel a Solicitation for good cause if the Authorized Agency finds that cancellation is in the public interest. The Authorized Agency's reasons for cancellation must be made part of the Solicitation file.

(2) Notice of Cancellation. If the Authorized Agency cancels a Solicitation before Opening, the Authorized Agency must provide Notice of cancellation in accordance with OAR 125-249-0210(1). Such notice of cancellation must:

(a) Identify the Solicitation;

(b) Briefly explain the reason for cancellation; and

(3) Disposition of Offers.

(a) Before Offer Opening. If the Authorized Agency cancels a Solicitation before Offer Opening, the Authorized Agency will return all Offers it received to Offerors unopened, provided the Offeror submitted its Offer in a hard copy format with a clearly visible return address. If there is no return address on the envelope, the Authorized Agency will open the Offer to determine the source and then return it to the Offeror.

(b) After Offer Opening. If the Authorized Agency rejects all Offers, the Authorized Agency will retain all such Offers as part of the Authorized Agency's Solicitation file.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0280

Offer Submissions

(1) Offer and Acceptance. The Bid or Proposal is the Bidder's or Proposer's offer to enter into a Contract.

(a) In competitive bidding and competitive Proposals, the Offer is always a "Firm Offer," i.e., the Offer must be held open by the Offeror for the Authorized Agency's acceptance for the period specified in OAR 125-249-0410. The Authorized Agency may elect to accept the Offer at any time during the specified period, and the Authorized Agency's Award of the Contract to a Bidder constitutes acceptance of the Offer and binds the Offeror to the Contract.

(b) Despite the fact that a competitive Proposal is a “Firm Offer” for the period specified in OAR 125-249-0410, the Authorized Agency may elect to discuss or negotiate certain contractual provisions, as identified in these rules or in the Solicitation Document with the Proposer. See OAR 125-249-0650 on Requests for Proposals and OAR 125-249-0290 on Bid or Proposal Security. Where negotiation is permitted by the rules or the Solicitation Document, Proposers are bound to an obligation to negotiate in good faith and only on those terms that the rules or the Solicitation Document has reserved for negotiation.

(2) Responsive Offer. An Authorized Agency may award a Contract only to a Responsible Offeror with a Responsive Offer.

(3) Contingent Offers. Except to the extent that an Offeror is authorized to propose certain terms and conditions according to OAR 125-249-0650, an Offeror must not make an Offer contingent upon the Authorized Agency's acceptance of any terms or conditions (including Specifications) other than those contained in the Solicitation Document.

(4) Offeror's Acknowledgement. By signing and returning the Offer, the Offeror acknowledges they have read and understand the terms and conditions contained in the Solicitation Document and that they accept and agree to be bound by the terms and conditions of the Solicitation Document. If the Request for Proposals permits proposal of alternative terms under OAR 125-249-0650, the Offeror's Offer includes the nonnegotiable terms and conditions and any proposed terms and conditions offered for Negotiation upon and to the extent accepted by the Authorized Agency in Writing.

(5) Instructions. Offerors must submit and Sign their Offers in accordance with the Solicitation Document. Offerors must initial and submit any corrections or erasures to their Offers before the Opening in accordance with the requirements for submitting an Offer under the Solicitation Document.

(6) Forms. Offerors must submit their Offers on the form(s) provided in the Solicitation Document, unless Offerors are otherwise instructed in the Solicitation Document.

(7) Documents. Offerors must provide the Authorized Agency with all documents and Descriptive Literature required under the Solicitation Document.

(8) Facsimile or Electronic Submissions. If the Authorized Agency permits facsimile or electronic Offers in the Solicitation Document, the Offeror may submit facsimile or electronic Offers in accordance with the Solicitation Document. The Authorized Agency must not consider facsimile or electronic Offers unless authorized by the Solicitation Document.

(9) Product Samples and Descriptive Literature. An Authorized Agency may require Product Samples or Descriptive Literature if it is necessary or desirable to evaluate the quality, features or characteristics of the offered items. The Authorized Agency will dispose of Product Samples, or return or make available for return Product Samples to the Offeror in accordance with the Solicitation Document.

(10) Identification of Offers.

(a) To ensure proper identification and handling, Offers must be submitted in a sealed envelope appropriately marked or in the envelope provided by the Authorized Agency, whichever is applicable.

(b) The Authorized Agency is not responsible for Offers submitted in any manner, format or to any delivery point other than as required in the Solicitation Document.

(11) Receipt of Offers. The Offerors are responsible for ensuring that the Authorized Agency receives their Offers at the required delivery point before the Closing, regardless of the method used to submit or transmit the Offer.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279C.365, 279C.375
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0290

Bid or Proposal Security

(1) Security Amount. If an Authorized Agency requires Bid or Proposal security, it must be not more than 10% or less than 5% of the Offeror's Bid or Proposal, consisting of the base Bid or Proposal together with all additive alternates. An Authorized Agency must not use Bid or Proposal security to discourage competition. The Authorized Agency must clearly state any Bid or Proposal security requirements in its Solicitation Document. The Offeror must forfeit Bid or Proposal security after Award if the Offeror fails to execute the Contract and promptly return it with any required any required proof of insurance. See ORS 279C.365(5) and 279C.385.

(2) Requirement for Bid Security (Optional for Proposals). Unless an Authorized Agency has otherwise exempted a Solicitation or class of Solicitations from Bid security according to ORS 279C.390, the Authorized Agency must require Bid security for its Solicitation of Bids for Public Improvements. This requirement applies only to Public Improvement Contracts with a value, estimated by the Authorized Agency, of more than $100,000. See ORS 279C.365(6). The Authorized Agency may require Bid security even if it has exempted a class of Solicitations from Bid security. Authorized Agencies may also require Proposal security in RFPs. See ORS 279C.400(5).

(3) Form of Bid or Proposal Security. An Authorized Agency may accept only the following forms of Bid or Proposal security:

(a) A surety bond from a surety company authorized to do business in the State of Oregon;

(b) An irrevocable letter of credit issued by an insured institution as defined in ORS 706.008; or

(4) Return of Security. An Authorized Agency must return or release the Bid or Proposal security of all unsuccessful Offerors after a Contract has been fully executed and all required bonds and insurance have been provided, or after all Offers have been rejected. The Authorized Agency may return the Bid or Proposal security of unsuccessful Offerors prior to award if the return does not prejudice Contract Award and the security of at least the Bidders with the three (3) lowest Bids, or the Proposers with the three (3) highest scoring Proposals, is retained pending execution of a Contract.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365 & 279C.375
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0300

Facsimile Bids and Proposals

(1) The Authorized Agency Authorization. An Authorized Agency may authorize Offerors to submit facsimile Offers. If the Authorized Agency determines that Bid or Proposal security is or will be required, the Authorized Agency must not authorize facsimile Offers unless the Authorized Agency has established a method for receipt of such security. Before authorizing the submission of facsimile Offers, the Authorized Agency must determine that the Authorized Agency's equipment and personnel are capable of receiving the size and volume of anticipated Offers within a short period of time. In addition, the Authorized Agency must establish administrative procedures and controls:

(a) To receive, identify, record and safeguard facsimile Offers;

(b) To ensure timely delivery of Offers to the location of Opening; and

(2) Provisions to be Included in Solicitation Document. In addition to all other requirements, if the Authorized Agency authorizes a facsimile Offer for Bids or Proposals, the Authorized Agency must include in the Solicitation Document (other than in a request for Quotes) the following:

(a) A provision substantially in the form of the following: “A ‘facsimile Offer’, as used in this Solicitation Document, means an Offer, modification of an Offer, or withdrawal of an Offer that is transmitted to and received by the Authorized Agency via a facsimile machine”;

(b) A provision substantially in the form of the following: “Offerors may submit facsimile Offers in response to this Solicitation Document. The entire response must arrive at the place and by the time specified in this Solicitation Document.”;

(d) A provision substantially in the form of the following: “The Authorized Agency reserves the right to award the Contract solely on the basis of the facsimile Offer. However, upon the Authorized Agency's request the apparent successful Offeror must promptly submit its complete original Signed Offer.”;

(e) The data and compatibility characteristics of the Authorized Agency's receiving facsimile machine as follows:

(A) Telephone number; and

(B) Compatibility characteristics, e.g., make and model number, receiving speed, communications protocol; and

(f) A provision that the Authorized Agency is not responsible for any failure attributable to the transmission or receipt of the facsimile Offer including, but not limited to the following:

(A) Receipt of garbled or incomplete documents;

(B) Availability or condition of the receiving facsimile machine;

(D) Delay in transmission or receipt of documents;

(E) Failure of the Offeror to properly identify the Offer documents;

(F) Illegibility of Offer documents; and

(G) Security and confidentiality of data.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0310

Electronic Procurement

(1) General. Authorized Agencies may utilize Electronic Advertisement of Public Improvement Contracts in accordance with ORS 279C.360(1), provided that advertisement of such Contracts with an estimated Contract Price in excess of $125,000 must also be published in a trade newspaper of general statewide circulation, and may post notices of intent to award electronically as provided by ORS 279C.410(7).

(2) Alternative Procedures. In the event that an Authorized Agency desires to direct or permit the submission and receipt of Offers for a Public Improvement Contract, by electronic means, as allowed under ORS 279C.365(1)(d), it must first promulgate supporting procedures substantially in conformance with OAR 125-247-0330 (Electronic Procurement under ORS Chapter 279B), taking into account ORS Chapters 279C requirements for Written bids, opening bids publicly, bid security, first-tier subcontractor disclosure and inclusion of prevailing wage rates.

(3) Interpretation. Nothing in this Rule must be construed as prohibiting Authorized Agencies from making Procurement Documents for Public Improvement Contracts available in electronic format as well as in hard copy when Bids are to be submitted only in hard copy. See ORS 279C.365(2).

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 9-2005, f. & cert. ef. 8-3-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0320

Pre-Closing Modification or Withdrawal of Offers

(1) Modifications. An Offeror may modify its Offer in Writing prior to the Closing. An Offeror must prepare and submit any modification to its Offer to the Authorized Agency in accordance with OAR 125-249-0280, unless otherwise specified in the Solicitation Document. Any modification must include the Offeror's statement that the modification amends and supersedes the prior Offer. The Offeror must mark the submitted modification as follows:

(a) Bid (or Proposal) Modification; and

(b) Solicitation Number (or Other Identification as specified in the Solicitation Document).

(2) Withdrawals.

(a) An Offeror may withdraw its Offer by Written notice submitted on the Offeror's letterhead, Signed by an authorized representative of the Offeror, delivered to the location specified in the Solicitation Document (or the place of Closing if no location is specified), and received by the Authorized Agency prior to the Closing. The Offeror or authorized representative of the Offeror may also withdraw its Offer in Person prior to the Closing, upon presentation of appropriate identification and satisfactory evidence of authority;

(b) The Authorized Agency may release an unopened Offer withdrawn under Subsection 2(a) to the Offeror or its authorized representative, after voiding any date and time stamp mark;

(A) Bid (or Proposal) Withdrawal; and

(B) Solicitation Number (or Other Identification as specified in the Solicitation Document).

(3) Documentation. The Authorized Agency must include all documents relating to the modification or withdrawal of Offers in the appropriate Solicitation file.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.360(2), 279C.365, 279C.375 & 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06

125-249-0330

Receipt, Opening and Recording of Offers; Confidentiality of Offers

(1) Receipt. An Authorized Agency must electronically or mechanically time-stamp or hand-mark each Offer and any modification upon receipt. The Authorized Agency must not open the Offer or modification upon receipt, but must maintain it as confidential and secure until Opening. If the Authorized Agency inadvertently opens an Offer or a modification before the Opening, the Authorized Agency must return the Offer or modification to its secure and confidential state until Opening. The Authorized Agency must document the resealing for the Procurement File in accordance with OAR 125-246-0556 (e.g. "The Authorized Agency inadvertently opened the Offer due to improper identification of the Offer").

(2) Opening and Recording. An Authorized Agency must publicly open Offers including any modifications made to the Offer according to OAR 125-249-0320. In the case of Invitations to Bid, to the extent practicable, the Authorized Agency must read aloud the name of each Bidder, the Bid price(s), and such other information as the Authorized Agency considers appropriate. In the case of Requests for Proposals or voluminous Bids, if the Solicitation Document so provides, the Authorized Agency will not read Offers aloud.

(3) Availability. After Opening, the Authorized Agency must make Bids available for public inspection, but according to ORS 279C.410 Proposals are not required to be available for public inspection until after notice of intent to award is issued. In any event Authorized Agencies may withhold from disclosure those portions of an Offer that the Offeror designates as trade secrets or as confidential proprietary data in accordance with applicable law. See ORS 192.501(2); 646.461 to 646.475. To the extent the Authorized Agency determines such designation is not in accordance with applicable law, the Authorized Agency must make those portions available for public inspection. The Offeror must separate information designated as confidential from other non-confidential information at the time of submitting its Offer. Prices, makes, model or catalog numbers of items offered, scheduled delivery dates, and terms of payment are not confidential, and must be publicly available regardless of an Offeror's designation to the contrary.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365, 279C.375 & 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0340

Late Bids, Late Withdrawals and Late Modifications

Any Offer received after Closing is late. An Offeror's request for withdrawal or modification of an Offer received after Closing is late. An Authorized Agency must not consider late Offers, withdrawals or modifications except as permitted in OAR 125-249-0350 or 125-249-0390.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.365, 279C.375 & 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0350

Mistakes

(1) Generally. To protect the integrity of the competitive Procurement Process and to assure fair treatment of Offerors, an Authorized Agency should carefully consider whether to permit waiver, correction or withdrawal of Offers for certain mistakes.

(2) The Authorized Agency Treatment of Mistakes. An Authorized Agency must not allow an Offeror to correct or withdraw an Offer for an error in judgment. If the Authorized Agency discovers certain mistakes in an Offer after Opening, but before Award of the Contract, the Authorized Agency may take the following action:

(a) An Authorized Agency may waive, or permit an Offeror to correct, a minor informality. A minor informality is a matter of form rather than substance that is evident on the face of the Offer, or an insignificant mistake that can be waived or corrected without prejudice to other Offerors. Examples of minor informalities include an Offeror's failure to:

(A) Return the correct number of Signed Offers or the correct number of other documents required by the Solicitation Document;

(B) Sign the Offer in the designated block, provided a Signature appears elsewhere in the Offer, evidencing an intent to be bound; and

(C) Acknowledge receipt of an Addendum to the Solicitation Document, provided that it is clear on the face of the Offer that the Offeror received the Addendum and intended to be bound by its terms; or the Addendum involved did not affect price, quality or delivery.

(b) An Authorized Agency may correct a clerical error if the error is evident on the face of the Offer or other documents submitted with the Offer, and the Offeror confirms the Authorized Agency's correction in Writing. A clerical error is an Offeror's error in transcribing its Offer. Unit prices must prevail over extended prices in the event of a discrepancy between extended prices and unit prices.

(c) An Authorized Agency may permit an Offeror to withdraw an Offer based on one or more clerical errors in the Offer only if the Offeror shows with objective proof and by clear and convincing evidence:

(A) The nature of the error;

(B) That the error is not a minor informality under this Subsection or an error in judgment;

(D) That the Offeror acted in good faith in submitting an Offer that contained the claimed error and in claiming that the alleged error in the Offer exists;

(E) That the Offeror acted without gross negligence in submitting an Offer that contained a claimed error;

(F) That the Offeror will suffer substantial detriment if the Authorized Agency does not grant the Offeror permission to withdraw the Offer;

(G) That the Authorized Agency's or the public's status has not changed so significantly that relief from the forfeiture will Work a substantial hardship on the Authorized Agency or the public it represents; and

(H) That the Offeror promptly gave notice of the claimed error to the Authorized Agency.

(d) The criteria in Subsection (2)(c) of this Rule must determine whether an Authorized Agency will permit an Offeror to withdraw its Offer after Closing. These criteria also must apply to the question of whether an Authorized Agency will permit an Offeror to withdraw its Offer without forfeiture of its Bid bond (or other Bid or Proposal security), or without liability to the Authorized Agency based on the difference between the amount of the Offeror's Offer and the amount of the Contract actually awarded by the Authorized Agency, whether by Award to the next lowest Responsive and Responsible Bidder or the best Responsive and Responsible Proposer, or by resort to a new Solicitation.

(3) Rejection for Mistakes. The Authorized Agency must reject any Offer in which a mistake is evident on the face of the Offer and the intended correct Offer is not evident or cannot be substantiated from documents submitted with the Offer.

(4) Identification of Mistakes after Award. The procedures and criteria set forth above are Offeror's only opportunity to correct mistakes or withdraw Offers because of a mistake. Following Award, an Offeror is bound by its Offer, and may withdraw its Offer or rescind a Contract entered into according to this division 249 only to the extent permitted by applicable law.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.375 & 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0360

First-Tier Subcontractors; Disclosure and Substitution; ITB

(1) Required Disclosure. Within two (2) Working hours after the Bid Closing on an ITB for a Public Improvement having a Contract Price anticipated by the Authorized Agency to exceed $100,000, all Bidders must submit to the Authorized Agency a disclosure form as described by ORS 279C.370(2), identifying any first-tier subcontractors (those Entities that would be contracting directly with the prime Contractor) that will be furnishing labor or labor and materials on the Contract, if Awarded, whose subcontract value would be equal to or greater than:

(a) Five percent (5%) of the total Contract Price, but at least $15,000; or

(b) $350,000, regardless of the percentage of the total Contract Price.

(2) Bid Closing, Disclosure Deadline, and Bid Opening. For each ITB to which this rule applies, the Authorized Agency must:

(a) Set the Bid Closing on a Tuesday, Wednesday or Thursday, and at a time between 2 p.m. and 5 p.m., except that these Bid Closing restrictions do not apply to an ITB for maintenance or construction of highways, bridges or other transportation facilities, and provided that the two (2) hour disclosure deadline described by this Rule would not then fall on a legal holiday;

(b) Open Bids publicly immediately after the Bid Closing; and

(c) Consider for Contract Award only those Bids for which the required disclosure has been submitted by the announced deadline on forms prescribed by the Authorized Agency.

(3) Bidder Instructions and Disclosure Form. For the purposes of this Rule, an Authorized Agency in its Solicitation must:

(a) Prescribe the disclosure form that must be utilized, substantially in the form set forth in ORS 279C.370(2); and

(b) Provide instructions in a notice substantially similar to the following: "Instructions for First-Tier Subcontractor Disclosure." Bidders are required to disclose information about certain first-tier subcontractors (see ORS 279C.370). Specifically, when the contract amount of a first-tier subcontractor furnishing labor or labor and materials would be greater than or equal to: 5% of the project Bid, but at least $15,000, or $350,000 regardless of the percentage, the Bidder must disclose the following information about that subcontract either in its Bid submission, or within two (2) hours after Bid Closing:

(A) The subcontractor's name,

(B) The category of Work that the subcontractor would be performing, and

(C) The dollar value of the subcontract. If the Bidder will not be using any subcontractors that are subject to the above disclosure requirements, the Bidder is required to indicate "NONE" on the accompanying form.

"THE AUTHORIZED AGENCY MUST REJECT A BID IF THE BIDDER FAILS TO SUBMIT THE DISCLOSURE FORM WITH THIS INFORMATION BY THE STATED DEADLINE."

(4) Submission. A Bidder must submit the disclosure form required by this Rule either in its Bid submission, or within two working hours after Bid Closing in the manner specified by the ITB.

(5) Responsiveness. Compliance with the disclosure and submittal requirements of ORS 279C.370 and this Rule is a matter of Responsiveness. Bids which are submitted by Bid Closing, but for which the disclosure submittal has not been made by the specified deadline, are not Responsive and must not be considered for Contract Award.

(6) Authorized Agency Role. Authorized Agencies must obtain, and make available for public inspection, the disclosure forms required by ORS 279C.370 and this Rule. Authorized Agencies must also provide copies of disclosure forms to the Bureau of Labor and Industries as required by ORS 279C.835. Authorized Agencies are not required to determine the accuracy or completeness of the information provided on disclosure forms.

(7) Substitution. Substitution of affected first-tier subcontractors must be made only in accordance with ORS 279C.585. Authorized Agencies must accept Written submissions filed under that statute as public records. Aside from issues involving inadvertent clerical error under ORS 279C.585, Authorized Agencies do not have a statutory role or duty to review, approve, or resolve disputes concerning such substitutions. See ORS 279C.590 regarding complaints to the Construction Contractors Board on improper substitution.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.370, 279C.585, 279C.590 & 279C.835
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0370

Disqualification of Persons

(1) Authority. An Authorized Agency may disqualify a Person from consideration of Award of the Authorized Agency's Contracts after providing the Person with notice and a reasonable opportunity to be heard in accordance with Sections (2) and (4) of this Rule.

(a) Standards for Conduct Disqualification. As provided in ORS 279C.440, an Authorized Agency may disqualify a Person for:

(A) Conviction for the commission of a criminal offense as an incident in obtaining or attempting to obtain a public or private Contract or subcontract, or in the performance of such Contract or subcontract.

(B) Conviction under state or federal statutes of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty that currently, seriously and directly affects the Person's responsibility as a Contractor.

(D) Violation of a contract provision that is regarded by the Authorized Agency to be so serious as to justify Disqualification. A violation under this Subsection 2(d) may include but is not limited to material failure to perform the terms of a Contract or an unsatisfactory performance in accordance with the terms of the Contract. However, a Person's failure to perform or unsatisfactory performance caused by acts beyond the Person's control is not a basis for Disqualification.

(b) Standards for DBE Disqualification. As provided in ORS 200.065, 200.075 or 279A.110, an Authorized Agency may disqualify a Person's right to submit an Offer or to participate in a Contract (e.g. subcontractors) as follows:

(A) For a DBE Disqualification under ORS 200.065, the Authorized Agency may disqualify a Person upon finding that:

(i) The Person fraudulently obtained or retained or attempted to obtain or retain or aided another Person to fraudulently obtain or retain or attempt to obtain or retain certification as a disadvantaged, minority, women or emerging small business enterprise; or

(ii) The Person knowingly made a false claim that any Person is qualified for certification or is certified under ORS 200.055 for the purpose of gaining a Contract or subcontract or other benefit; or

(iii) The Person has been disqualified by another Authorized Agency according to ORS 200.065.

(B) For a DBE Disqualification under ORS 200.075, the Authorized Agency may disqualify a Person upon finding that:

(i) The Person has entered into an agreement representing that a disadvantaged, minority, women, or emerging small business enterprise, certified according to ORS 200.055 ("Certified Enterprise"), will perform or supply materials under a Public Improvement Contract without the knowledge and consent of the Certified Enterprise; or

(ii) The Person exercises management and decision-making control over the internal operations, as defined by ORS 200.075(1)(b), of any Certified Enterprise; or

(iii) The Person uses a Certified Enterprise to perform Work under a Contract to meet an established Certified Enterprise goal, and such enterprise does not perform a commercially useful function, as defined by ORS 200.075(3), in performing its obligations under the Contract.

(iv) If a Person is Disqualified for a DBE Disqualification under ORS 200.075, the affected Authorized Agency must not permit such Person to participate in that Authorized Agency's Contracts.

(C) For a DBE Disqualification under ORS 279A.110, an Authorized Agency may disqualify a Person if the Authorized Agency finds that the Person discriminated against minority, women, or emerging small business enterprises in awarding a subcontract under a Contract with that Authorized Agency.

(2) Notice of Intent to Disqualify. The Authorized Agency must notify the Person in Writing of a proposed Disqualification personally or by registered or certified mail, return receipt requested. This notice must:

(a) State that the Authorized Agency intends to disqualify the Person;

(b) Set forth the reasons for the Disqualification;

(c) Include a statement of the Person's right to a hearing if requested in Writing within the time stated in the notice and that if the Authorized Agency does not receive the Person's Written request for a hearing within the time stated, the Person must have waived its right to a hearing;

(d) Include a statement of the authority and jurisdiction under which the hearing will be held;

(e) Include a reference to the particular Sections of the statutes and rules involved;

(f) State the proposed Disqualification period; and

(g) State that the Person may be represented by legal counsel.

(3) Hearing. The Authorized Agency must schedule a hearing upon the Authorized Agency receipt of the Person's timely request. The Authorized Agency must notify the Person of the time and place of the hearing and provide information on the procedures, right of representation and other rights related to the conduct of the hearing before the hearing.

(4) Notice of Disqualification. The Authorized Agency will notify the Person in Writing of its Disqualification, personally or by registered or certified mail, return receipt requested. The notice must contain:

(a) The effective date and period of Disqualification;

(b) The grounds for Disqualification; and

(c) A statement of the Person's appeal rights and applicable appeal deadlines. For a Conduct Disqualification or a DBE Disqualification under ORS 279A.110, the Disqualified Person must notify the Authorized Agency in Writing within three (3) business days after receipt of the Authorized Agency's notice of Disqualification if the Person intends to appeal the Authorized Agency's decision.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 200.065, 200.075, 279A.110, 279C.440, 279C.445 & 279C.450
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0380

Bid or Proposal Evaluation Criteria

(1) General. A Public Improvement Contract, if Awarded, must be Awarded to the Responsible Bidder submitting the lowest Responsive Bid, or to the Responsible Proposer submitting the best Responsive Proposal. See OAR 125-249-0390, and Rules for Alternative Contracting Methods at OAR 125-249-0600 to 125-249-0690.

(2) Bid Evaluation Criteria. Invitations to Bid may solicit lump-sum Offers, unit-price Offers, or a combination of the two.

(a) Lump Sum. If the ITB requires a lump-sum Bid, without additive or deductive alternates, or if the Authorized Agency elects not to award additive or deductive alternates, Bids must be compared on the basis of lump-sum prices, or lump-sum base Bid prices, as applicable. If the ITB calls for a lump-sum base Bid, plus additive or deductive alternates, the total Bid price must be calculated by adding to or deducting from the base Bid those alternates selected by the Authorized Agency, for the purpose of comparing Bids.

(b) Unit Price. If the Bid includes unit pricing for estimated quantities, the total Bid price must be calculated by multiplying the estimated quantities by the unit prices submitted by the Bidder, and adjusting for any additive or deductive alternates selected by the Authorized Agency, for the purpose of comparing Bids. Authorized Agencies must specify within the Solicitation Document the estimated quantity of the Procurement to be used for determination of the low Bidder. In the event of mathematical discrepancies between unit price and any extended price calculations submitted by the Bidder, the unit price must govern. See OAR 125-249-0350(2)(b).

(3) Proposal Evaluation Criteria. If the State Procurement Office has exempted the Procurement of a Public Improvement from the competitive bidding requirements of ORS 279C.335(1), and has directed the Authorized Agency to use an Alternative Contracting Method under ORS 279.335(4), the Authorized Agency must set forth the evaluation criteria in the Solicitation Documents. See OAR 125-249-0650, ORS 279C.335 and 279C.405.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.335
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06

125-249-0390

Bid or Proposal Evaluation Criteria

(2) Bid Evaluation Criteria. Invitations to Bid may solicit lump-sum Offers, unit-price Offers, or a combination of the two.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.335
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06

125-249-0395

Notice of Intent to Award

(1) Notice. At least seven (7) days before the Award of a Public Improvement Contract, the Authorized Agency must issue to each Offeror, or post electronically or otherwise, a notice of the Authorized Agency’s intent to Award the Contract. See ORS 279C.375(2). This requirement does not apply to a Public Improvement Contract:

(a) Excepted or exempted from competitive bidding under ORS 279C.335; or

(b) Awarded through an Intermediate Procurement (informal competitive quotes) with a value up to $100,000.

(2) Form and Manner of Posting. The form and manner of posting notice must conform to customary practices within the Authorized Agency’s procurement system, and may be made electronically.

(3) Finalizng Award. The Authorized Agency’s Award is not final until the later of the following:

(a) Seven (7) Days after the date of the notice, unless the Solicitation Document provided a different period for protest; or

(b) The Authorized Agency provides a Written response to all timely-filed protests that denies the protests and affirms the Award.

(4) Prior Notice Impractical. Posting of notice of intent to award is not required when the Authorized Agency determines that it is impractical due to unusual time constraints in making prompt Award for its immediate procurement needs, documents the Procurement file as to the reasons for that determination, and posts notice of that action as soon as reasonably practical.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279A.065(5)(a), 279A.070, 279C.375
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0400

Documentation of Award; Availability of Award Decisions

(1) Basis of Award. After Award, the Authorized Agency must make a record showing the basis for determining the successful Offeror part of the Authorized Agency's Solicitation file.

(2) Contents of Award Record for Bids. The Authorized Agency's record must include:

(a) Bids.

(b) Completed Bid tabulation sheet; and

(3) Contents of Award Record for Proposals. Where the use of Requests for Proposals is authorized as set forth in OAR 125-249-0650, the Authorized Agency's record must include:

(a) Proposals.

(b) The completed evaluation of the Proposals;

(c) Written justification for any rejection of higher scoring Proposals or for failing to meet mandatory requirements of the Request for Proposal; and

(d) If the Authorized Agency permitted Negotiations in accordance with OAR 125-249-0650, the Authorized Agency's completed evaluation of the initial Proposals and the Authorized Agency's completed evaluation of final Proposals.

(4) Contract Document. The Authorized Agency must deliver a fully executed copy of the final Contract to the successful Offeror.

(5) Bid Tabulations and Award Summaries. Upon request of any Person the Authorized Agency must provide tabulations of Awarded Bids or evaluation summaries of Proposals for a nominal charge which may be payable in advance. Requests must contain the Solicitation Document number and, if requested, be accompanied by a self-addressed, stamped envelope. Authorized Agencies may also provide tabulations of Bids and Proposals Awarded on designated Web sites.

(6) Availability of Solicitation Files. The Authorized Agency must make completed Solicitation files available for public review at the Authorized Agency.

(7) Copies from Solicitation Files. Any Person may obtain copies of material from Solicitation files upon payment of a reasonable copying charge.

(8) Minority, Women, Emerging Small Business. Agencies must provide timely notice of Contract Award to the Advocate for Minority, Women, Emerging Small Business if the estimated Contract Price exceeds $5,000. See ORS 200.035 and any applicable Department Policy.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065(5)(a) & 279A.070
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06

125-249-0410

Time for Authorized Agency Acceptance; Extension

(1) Time for Offer Acceptance. An Offeror's Bid, or Proposal submitted as a Firm Offer (see OAR 125-249-0280), is irrevocable, valid and binding on the Offeror for not less than thirty (30) Days from Closing unless otherwise specified in the Solicitation Document.

(2) Extension of Acceptance Time. An Authorized Agency may request, orally or in Writing, that Offerors extend, in Writing, the time during which the Authorized Agency may consider and accept their Offer(s). If an Offeror agrees to such extension, the Offer must continue as a Firm Offer, irrevocable, valid and binding on the Offeror for the agreed-upon extension period.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.375
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0420

Negotiation With Bidders Prohibited

(1) Bids. Except as permitted by ORS 279C.340 and OAR 125-249-0430 when all bids exceed the cost estimate, an Authorized Agency must not negotiate with any Bidder before Contract Award. After Award of the Contract, the Authorized Agency and Contractor may only modify the Contract by change order or Amendment to the Contract in accordance with OAR 125-249-0860.

(2) Requests for Proposals. An Authorized Agency may only conduct Discussions or Negotiations with Proposers in accordance with the requirements of OAR 125-249-0650.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.340 & 279C.375
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0430

Negotiation When Bids Exceed Cost Estimate

(1) Generally. In accordance with ORS 279C.340, if all Responsive Bids from Responsible Bidders on a competitively Bid Project exceed the Authorized Agency's Cost Estimate, before Contract Award the Authorized Agency may negotiate Value Engineering and Other Options with the Responsible Bidder submitting the lowest, Responsive Bid in an attempt to bring the Project within the Authorized Agency's Cost Estimate. The subcontractor disclosure and substitution requirements of OAR 125-249-0360 do not apply to Negotiations under this Rule.

(2) Definitions. The following definitions apply to this Rule:

(a) "Cost Estimate" means the Authorized Agency's most recent pre-Bid, good faith assessment of anticipated contract costs, consisting either of an estimate of an architect, engineer or other qualified professional, or confidential cost calculation Worksheets, where available, and otherwise consisting of formal planning or budgetary documents.

(b) "Other Options" means those items generally considered appropriate for Negotiation in the RFP process, relating to the details of contract performance as specified in OAR 125-249-0650, but excluding any material requirements previously announced in the Solicitation process that would likely affect the field of competition.

(d) "Value Engineering" means the identification of alternative methods, materials or systems which provide for comparable function at reduced initial or life-time cost. It includes proposed changes to the plans, Specifications, or other contract requirements which may be made, consistent with industry practice, under the Original Contract by mutual agreement in order to take advantage of potential cost savings without impairing the essential functions or characteristics of the Public Improvement. Cost savings include those resulting from life cycle costing, which may increase or decrease absolute costs over varying time periods.

(3) Rejection of Bids. In determining whether all Responsive Bids from Responsible Bidders exceed the Cost Estimate, only those Bids that have been formally rejected, or Bids from Bidders who have been formally disqualified by the Authorized Agency, must be excluded from consideration.

(4) Scope of Negotiations. Authorized Agencies must not proceed with Contract Award if the scope of the Project is significantly changed from the original Bid. The scope is considered to have been significantly changed if the pool of competition would likely have been affected by the change; that is, if other Bidders would have been expected by the Authorized Agency to participate in the Bidding process had the change been made during the Solicitation process rather than during Negotiation. This Rule must not be construed to prohibit Solicitation of trade subcontracts.

(5) Discontinuing Negotiations. The Authorized Agency may discontinue Negotiations at any time, and must do so if it appears to the Authorized Agency that the apparent low Bidder is not negotiating in good faith or fails to share cost and pricing information upon request. Failure to re-bid any portion of the project, or to obtain subcontractor pricing information upon request, must be considered a lack of good faith.

(6) Limitation. Negotiations may be undertaken only with the lowest Responsive, Responsible Bidder according to ORS 279C.340. That statute does not provide any additional authority to further negotiate with Bidders next in line for Contract Award.

(7) Public Records. To the extent that a Bidder's records used in contract Negotiations under ORS 279C.340 are public records, they are exempt from disclosure until after the negotiated Contract has been awarded or the Negotiation process has been terminated, at which time they are subject to disclosure according to the provisions of the Oregon Public Records Law, ORS 192.410 to 192.505.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.340
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0440

Rejection of Offers

(1) Rejection of an Offer.

(a) An Authorized Agency may reject any Offer upon finding that to accept the Offer may impair the integrity of the Procurement Process or that rejecting the Offer is in the public interest.

(b) The Authorized Agency must reject an Offer upon the Authorized Agency's finding that the Offer:

(A) Is contingent upon the Authorized Agency's acceptance of terms and conditions (including Specifications) that differ from the Solicitation Document, or

(B) Takes exception to terms and conditions (including Specifications), or

(C) Attempts to prevent public disclosure of matters in contravention of the terms and conditions of Solicitation Document or in contravention of applicable law; or

(D) Offers Work that fails to meet the Specifications of the Solicitation Document; or

(E) Is late; or

(F) Is not in substantial compliance with the Solicitation Documents; or

(G) Is not in substantial compliance with all prescribed public Solicitation procedures.

(A) Has not been prequalified under ORS 279C.430 and the Authorized Agency required mandatory prequalification; or

(B) Has been Disqualified; or

(C) Has been declared ineligible under ORS 279C.860 by the Commissioner of Bureau of Labor and Industries and the Contract is for a Public Work; or

(D) Is listed as not qualified by the Construction Contractors Board, if the Contract is for a Public Improvement; or

(E) Has not met the requirements of ORS 279A.105 if required by the Solicitation Document; or

(F) Has not submitted properly executed Bid or Proposal security as required by the Solicitation Document; or

(G) Has failed to provide the certification required under Section 3 of this Rule; or

(H) Is not Responsible. See OAR 125-249-0390(2) regarding Authorized Agency determination that the Offeror has met statutory standards of responsibility.

(2) Form of Business. For purposes of this Rule, the Authorized Agency may investigate any Person submitting an Offer. The investigation may include that Person's officers, Directors, owners, affiliates, or any other Person acquiring ownership of the Person to determine application of this Rule or to apply the Disqualification provisions of ORS 279C.440 to 279C.450 and OAR 125-249-0370.

(3) Certification of Non-Discrimination. The Offeror must certify and deliver to the Authorized Agency Written certification, as part of the Offer that the Offeror has not discriminated against minority, women or emerging small business enterprises in obtaining any required subcontracts. Failure to do so must be grounds for disqualification.

(4) Rejection of all Offers. An Authorized Agency may reject all Offers for good cause upon the Authorized Agency's Written finding it is in the public interest to do so. The Authorized Agency must notify all Offerors of the rejection of all Offers, along with the good cause justification and finding.

(5) Criteria for Rejection of All Offers. The Authorized Agency may reject all Offers upon a Written finding that:

(a) The content of or an error in the Solicitation Document, or the Solicitation process unnecessarily restricted competition for the Contract;

(b) The price, quality or performance presented by the Offerors is too costly or of insufficient quality to justify acceptance of the Offer;

(c) Misconduct, error, or ambiguous or misleading provisions in the Solicitation Document threaten the fairness and integrity of the competitive process;

(d) Causes other than legitimate market forces threaten the integrity of the competitive Procurement Process. These causes include, but are not limited to, those that tend to limit competition such as restrictions on competition, collusion, corruption, unlawful anti-competitive conduct, and inadvertent or intentional errors in the Solicitation Document;

(e) The Authorized Agency cancels the Solicitation in accordance with OAR 125-249-0270; or

(f) Any other circumstance indicating that Awarding the Contract would not be in the public interest.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.105, 279A.110, 279C.375, 279C.380 & 279C.395
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0450

Protest of Contractor Selection, Contract Award

(1) Purpose. An adversely affected or aggrieved Offeror must exhaust all avenues of administrative review and relief before seeking judicial review of the Authorized Agency's Contractor selection or Contract Award decision.

(2) Notice of Competitive Range. Unless otherwise provided in the RFP, when the competitive proposal process is authorized under OAR 125-249-0650, the Authorized Agency must provide Written notice to all Proposers of the Authorized Agency's determination of the Proposers included in the Competitive Range. The Authorized Agency's notice of the Proposers included in the Competitive Range must not be final until the later of the following:

(a) Ten (10) Days after the date of the notice, unless otherwise provided therein; or

(b) Until the Authorized Agency provides a Written response to all timely-filed protests that denies the protest and affirms the notice of the Proposers included in the Competitive Range.

(3) Notice of Intent to Award. The Authorized Agency must provide Written notice to all Offerors of the Authorized Agency's intent to award the Contract as provided by OAR 125-249-0395.

(4) Right to Protest Award.

(a) An adversely affected or aggrieved Offeror may submit to the Authorized Agency a Written protest of the Authorized Agency's intent to award within seven (7) Days after issuance of the notice of intent to award the Contract, unless a different protest period is provided under the Solicitation Document.

(b) The Offeror's protest must be in Writing and must specify the grounds upon which the protest is based.

(c) An Offeror is adversely affected or aggrieved only if the Offeror is eligible for Award of the Contract as the Responsible Bidder submitting the lowest Responsive Bid or the Responsible Proposer submitting the best Responsive Proposal and is next in line for Award, i.e., the protesting Offeror must claim that all lower Bidders or higher-scored Proposers are ineligible for Award:

(A) Because their Offers were non-responsive; or

(B) The Authorized Agency committed a substantial violation of a provision in the Solicitation Document or of an applicable procurement statute or administrative rule, and the protesting Offeror was unfairly evaluated and would have, but for such substantial violation, been the Responsible Bidder offering the lowest Bid or the Responsible Proposer offering the highest-ranked Proposal.

(d) The Authorized Agency must not consider a protest submitted after the time period established in this Rule or such different period as may be provided in the Solicitation Document. A Proposer may not protest an Authorized Agency's decision not to increase the size of the Competitive Range above the size of the Competitive Range set forth in the RFP.

(5) Right to Protest Competitive Range.

(a) An adversely affected or aggrieved Proposer may submit to the Authorized Agency a Written protest of the Authorized Agency's decision to exclude the Proposer from the Competitive Range within seven (7) Days after issuance of the notice of the Competitive Range, unless a different protest period is provided under the Solicitation Document. (See procedural requirements for the use of RFPs at OAR 125-249-0650.)

(b) The Proposer's protest must be in Writing and must specify the grounds upon which the protest is based.

(c) A Proposer is adversely affected only if the Proposer is responsible and submitted a Responsive Proposal and is eligible for inclusion in the Competitive Range, i.e., the protesting Proposer must claim it is eligible for inclusion in the Competitive Range if all ineligible higher-scoring Proposers are removed from consideration, and that those ineligible Proposers are ineligible for inclusion in the Competitive Range because:

(A) Their Proposals were not responsive; or

(B) The Authorized Agency committed a substantial violation of a provision in the RFP or of an applicable procurement statute or administrative rule, and the protesting Proposer was unfairly evaluated and would have, but for such substantial violation, been included in the Competitive Range.

(6) Authority to Resolve Protests. The head of the Authorized Agency, or such Person's delegatee, may settle or resolve a Written protest submitted in accordance with the requirements of this Rule.

(7) Decision. If a protest is not settled, the head of the Authorized Agency, or such Person's delegatee, must promptly issue a Written decision on the protest. Judicial review of this decision will be available if provided by statute.

(8) Award. The successful Offeror must promptly execute the Contract after the Award is final. The Authorized Agency must execute the Contract only after it has obtained all applicable required documents and approvals.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.375, 279C.380, 279C.385 & 279C.460
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0460

Performance and Payment Security; Waiver

(1) Public Improvement Contracts. Unless the required performance bond is waived under ORS 279C.380(1)(a), excused in cases of emergency under ORS 279C.380(4), or unless the State Procurement Office exempts a Contract or classes of Contracts from the required performance bond and payment bond according to ORS 279C.390, the Contractor must execute and deliver to the Authorized Agency a performance bond and a payment bond each in a sum equal to the Contract Price for all Public Improvement Contracts. This requirement applies only to Public Improvement Contracts with a value, estimated by the Authorized Agency, of more than $100,000. See ORS 279C.380(5). Under ORS 279C.390(3)(b) the Director of the Oregon Department of Transportation may reduce the performance bond amount for Contracts financed from the proceeds of bonds issued under ORS 367.620(3)(a). Also see OAR 125-249-0815 and BOLI rules in OAR Chapter 839, division 25, regarding the separate requirement for Public Works bond.

(2) Other Construction Contracts. An Authorized Agency may require performance security for other construction Contracts that are not Public Improvement Contracts. Such requirements must be expressly set forth in the Solicitation Document.

(3) Requirement for Surety Bond. The Authorized Agency must accept only a performance bond furnished by a surety company authorized to do business in Oregon unless otherwise specified in the Solicitation Document (i.e. the Authorized Agency may accept a cashier's check or certified check in lieu of all or a portion of the required performance bond if specified in the Solicitation Document). The payment bond must be furnished by a surety company authorized to do business in Oregon, and in an amount equal to the full Contract Price.

(4) Time for Submission. The apparent successful Offeror must promptly furnish the required performance security upon the Authorized Agency's request. If the Offeror fails to furnish the security as requested, the Authorized Agency may reject the Offer and award the Contract to the Responsible Bidder with the next lowest Responsive Bid or the Responsible Proposer with the next highest-scoring Responsive Proposal, and, at the Authorized Agency's discretion, the Offeror must forfeit its Bid or Proposal security.

(5) Public Improvement Contracts Under $100,000. An Authorized Agency having delegated purchasing authority according to OAR 125-246-0170 may, in its discretion, waive the bid security requirements and performance and payment requirements if the amount of the Contract for the Public Improvement is less than $100,000.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.375, 279C.380 & 279C.390
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0470

Substitute Contractor

If the Contractor provided a performance bond, the Authorized Agency may afford the Contractor's surety the opportunity to provide a substitute Contractor to complete performance of the Contract. A substitute Contractor must perform all remaining contract Work and comply with all terms and conditions of the Contract, including the provisions of the performance bond and the payment bond. Such substitute performance does not involve the Award of a new Contract and must not be subject to the competitive procurement provisions of ORS Chapter 279C.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279C.365, 279C.370, 279C.375, 279C.380, 279C.390
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0490

Foreign Contractor

If the Contract Price exceeds $10,000 and the Contractor is a Foreign Contractor, the Contractor must promptly report to the Oregon Department of Revenue on forms provided by the Department of Revenue, the Contract Price, terms of payment, contract duration and such other information as the Department of Revenue may require before final payment can be made on the Contract. A copy of the report must be forwarded to the Authorized Agency. The Authorized Agency Awarding the Contract must satisfy itself that the above requirements have been complied with before it issues final payment on the Contract.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.120
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

Alternative Contracting Methods

125-249-0600

Purpose

These OAR 125-249-0600 to 125-249-0690 Oregon Administrative Rules are intended to provide guidance to Authorized Agencies regarding the use of Alternative Contracting Methods for Public Improvement Contracts, as may be directed by the State Procurement Office under ORS 279C.335. Those methods include, but are not limited to, Design-Build, Energy Savings Performance Contract (ESPC) and Construction Manager/General Contractor (CM/GC) forms of contracting. As to ESPC contracting, these OAR 125-249-0600 to 125-249-0690 Rules implement the requirements of ORS 279C.335 pertaining to the adoption of Rules appropriate for use by all Authorized Agencies to govern the procedures for entering into ESPCs.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065, 279C.335 & 351.086
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0610

Definitions for Alternative Contracting Methods

The following definitions must apply to these OAR 125-249-0600 to 125-249-0690 Rules, unless the context requires otherwise:

(1) "Alternative Contracting Methods" mean innovative procurement techniques for obtaining Public Improvement Contracts, utilizing processes other than the traditional method of Design-Bid-Build (with Award based solely on price, in which a final design is issued with formal Bid documents, construction services are obtained by sealed Bid Awarded to the lowest Responsive, Responsible Bidder, and the project is built in accordance with those documents). In industry practice, such methods commonly include variations of Design-Build contracting, CM/GC forms of contracting and ESPCs, which are specifically addressed in these OAR 125-249-0600 to 125-249-0690 Rules, as well as other developing techniques such as general "performance contracting" and "cost plus time" contracting, for which procedural requirements are identified under these OAR 125-249-0600 to 125-249-0690 Rules.

(2) "Construction Manager/General Contractor" (CM/GC) means a form of Procurement that results in a Public Improvement Contract for a Construction Manager/General Contractor to undertake project team involvement with design development; constructability reviews; value engineering, scheduling, estimating and subcontracting services; establish a Guaranteed Maximum Price to complete the Contract Work; act as General Contractor; hold all subcontracts, self-perform portions of the Work as may be allowed by the Authorized Agency under the CM/GC Contract; coordinate and manage the building process; provide general Contractor expertise; and act as a member of the project team along with the Authorized Agency, architect/engineers and other Consultants. CM/GC also refers to a Contractor under this form of Contract, sometimes known as the "Construction Manager at Risk."

(3) "Design-Build" means a form of Procurement that results in a Public Improvement Contract in which the construction Contractor also provides or obtains specified design Services, participates on the project team with the Authorized Agency, and manages both design and construction. In this form of Contract, a single Person provides the Authorized Agency with all of the Personal Services and Work necessary to both design and construct the project.

(4) "Energy Conservation Measures" (ECMs, also known as Energy Efficiency Measures) means, as used in ESPC Procurement, any equipment, fixture or furnishing to be added to or used in an existing building or structure, and any repair, alteration or improvement to an existing building or structure that is designed to reduce energy consumption and related costs, including those costs related to electrical energy, thermal energy, water consumption, waste disposal, and future contract-labor costs and materials costs associated with maintenance of the building or structure. For purposes of these OAR 125-249-0600 to 125-249-0690 Rules, use of either or both of the terms "building" or "structure" must be deemed to include existing energy, water and waste disposal systems connected or related to or otherwise used for the building or structure when such system(s) are included in the project, either as part of the project together with the building or structure, or when such system(s) are the focus of the project. Maintenance Services are not Energy Conservation Measures, for purposes of these OAR 125-249-0600 to 125-249-0690 Rules.

(5) "Energy Savings Guarantee" means the energy savings and performance guarantee provided by the ESCO under an ESPC Procurement, which guarantees to the Authorized Agency that certain energy savings and performance will be achieved for the project covered by the RFP, through the installation and implementation of the agreed-upon ECMs for the project. The Energy Savings Guarantee must include, but must not be limited to, the specific energy savings and performance levels and amounts that will be guaranteed, provisions related to the financial remedies available to the Authorized Agency in the event the guaranteed savings and performance are not achieved, the specific conditions under which the ESCO will guarantee energy savings and performance (including the specific responsibilities of the Authorized Agency after final completion of the design and construction phase), and the term of the energy savings and performance guarantee.

(6) "Energy Savings Performance" Contract (ESPC) means a Public Improvement Contract between an Authorized Agency and a Qualified Energy Service Company for the identification, evaluation, recommendation, design and construction of Energy Conservation Measures, including a Design-Build Contract, that guarantee energy savings or performance.

(7) "Guaranteed Maximum Price" (GMP) means the total maximum price provided to the Authorized Agency by the Contractor, and accepted by the Authorized Agency, that includes all reimbursable costs of and fees for completion of the contract Work, as defined by the Public Improvement Contract, except for material changes in the Scope of Work. It may also include particularly identified contingency amounts.

(8) "Measurement and Verification" (M & V) means, as used in ESPC Procurement, the examination of installed ECMs using the International Performance Measurement and Verification Protocol (IPMVP), or any other comparable protocol or process, to monitor and verify the operation of energy-using systems pre-installation and post-installation.

(9) "Project Development Plan" means a secondary phase of Personal Services and Work performed by an ESCO in an ESPC Procurement when the ESCO performs more extensive design of the agreed-upon ECMs for the project, provides the detailed provisions of the ESCO's Energy Savings Guarantee that the fully installed and commissioned ECMs will achieve a particular energy savings level for the building or structure, and prepares an overall report or plan summarizing the ESCO's Work during this secondary phase of the Work and otherwise explaining how the agreed-upon ECMs will be implemented during the design and construction phase of the Work; The term "Project Development Plan" can also refer to the report or plan provided by the ESCO at the conclusion of this phase of the Work.

(10) "Qualified Energy Service Company" (ESCO) means, as used in ESPC Procurement, a company, firm or other legal Person with the following characteristics: demonstrated technical, operational, financial and managerial capabilities to design, install, construct, commission, manage, measure and verify, and otherwise implement Energy Conservation Measures and other Work on building systems or building components that are directly related to the ECMs in existing buildings and structures; a prior record of successfully performing ESPCs on projects involving existing buildings and structures that are comparable to the project under consideration by the Authorized Agency; and the financial strength to effectively guarantee energy savings and performance under the ESPC for the project in question, or the ability to secure necessary financial measures to effectively guarantee energy savings under an ESPC for that project.

(11) "Technical Energy Audit," as used in ESPC Procurement, means the initial phase of Personal Services to be performed by an ESCO that includes a detailed evaluation of an existing building or structure, an evaluation of the potential ECMs that could be effectively utilized at the facility, and preparation of a report to the Authorized Agency of the ESCO's Findings during this initial phase of the Work; the term "Technical Energy Audit" can also refer to the report provided by the ESCO at the conclusion of this phase of the Work.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065 & 279C.335
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06

125-249-0620

Use of Alternative Contracting Methods

(1) Competitive Bidding Exemptions. ORS Chapter 279C requires a competitive bidding process for Public Improvement Contracts unless a statutory exception applies, a class of Contracts has been exempted, or an individual Contract has been exempted in accordance with ORS 279C.335 and any applicable Authorized Agency rules. Use of Alternative Contracting Methods may be directed by the State Procurement Office as an exception to the prescribed Public Contracting practices in Oregon, and their use must be justified in accordance with the Public Contract law and these OAR 125-249-0600 to 125-249-0690 Rules. See OAR 125-249-0630 regarding required Findings and restrictions on class exemptions.

(2) Energy Savings Performance Contracts. Unlike other Alternative Contracting Methods covered by these OAR 125-249-0600 to 125-249-0690 Rules, ESPCs are exempt from the competitive bidding requirement process for Public Improvement Contracts according to ORS 279C.335(1)(f), if the Authorized Agency complies with the procedures set forth in these OAR 125-249-0600 to 125-249-0690 Rules related to the Solicitation, Negotiation and contracting for ESPC Services. If those procedures are not followed, an ESPC procurement may still be exempted from competitive bidding requirements by following the general exemption procedures within ORS 279C.335.

(3) Post-Project Evaluation. ORS 279C.355 requires that the Authorized Agency prepare a formal post-project evaluation of Public Improvement projects in excess of $100,000 for which the competitive bidding process was not used. The purpose of this evaluation is to determine whether it was actually in the Authorized Agency's best interest to use an Alternative Contracting Method. The evaluation must be delivered to the Director of the Department as applicable within thirty (30) Days of the date the Authorized Agency "accepts" the Public Improvement project, which event is typically defined in the Contract. In the absence of such definition, acceptance of the Project occurs on the later of the date of final payment or the date of final completion of the Work. ORS 279C.355 describes the timing and content of this evaluation, with three (3) required elements:

(a) Financial information, consisting of cost estimates, any Guaranteed Maximum Price, changes and actual costs;

(b) A narrative description of successes and failures during design, engineering and construction; and

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065, 279C.335 & 351.086
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0630

Findings, Notice and Hearing

(1) General. This Rule provides guidance to the Agencies for making a request for an Exemption to the Chief Procurement Officer in accordance with ORS 279C.335 and OAR 125-246-0170(3)(c).

(2) Findings: Required Information. The statutory definition of "Findings" at ORS 279C.330 means the justification for an Agency’s conclusion that includes, "but is not limited to," information regarding eight identified areas.

(3) Findings Addressing Cost Savings. When Findings are required under ORS 279C.335 to exempt a Contract or class of Contracts from competitive bidding requirements, the "substantial cost savings" criterion at ORS 279C.335(2)(b) allows consideration of the type, cost, amount of the Contract, number of Entities available to Bid, and "such other factors as may be deemed appropriate." Accordingly, when the Contract or class of Contracts under consideration for an exemption contemplates the use of Alternative Contracting Methods, the "substantial cost savings" requirement may be addressed by a combination of:

(a) Specified Findings that address the factors and other information specifically identified by statute, including an analysis or reasonable forecast of future cost savings as well as present cost savings; and

(b) Additional Findings that address industry practices, surveys, trends, past experiences, evaluations of completed projects required by ORS 279C.355 and related information regarding the expected benefits and drawbacks of particular Alternative Contracting Methods. To the extent practicable, such Findings must relate back to the specific characteristics of the project or projects at issue in the exemption request.

(c) As an alternative to the “substantial cost savings” requirement where an Alternative Contracting Method has not been previously used, the Authorized Agency may make a Finding that identifies the project as a “pilot project” under ORS 279C.335(2)(c).

(4) Findings Regarding Favoritism and Competition. The criteria at ORS 279C.335(2)(a) that it is "unlikely" that the exemption will "encourage favoritism" or "substantially diminish competition" may be addressed in contemplating the use of Alternative Contracting Methods by specifying the manner in which an RFP process will be utilized, that the Procurement will be formally advertised with public notice and disclosure of the planned Alternative Contracting Method, competition will be encouraged, Award made based upon identified selection criteria and an opportunity to protest that Award.

(5) 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 Authorized 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 Chief Procurement Officer relies upon the representations and accuracy of the Authorized Agency’s Findings in subsections (a) and (b), which form the basis for and are incorporated by reference in any subsequent Exemption Order.

(6) Prior Review of Draft Findings. Agencies must submit draft Findings to the State Procurement Office 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.

(7) Class Exemptions. In making the findings supporting a class exemption the Authorized 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 an Authorized 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).

(8) Public Hearing. Before final adoption of Findings exempting a Public Improvement Contract or class of Contracts from the requirement of competitive bidding, an Authorized 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 Authorized Agency's draft Findings.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279A.065, 279C.335
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08

125-249-0640

Competitive Proposals; Procedure

Authorized Agencies may utilize the following RFP process for Public Improvement Contracts, allowing flexibility in both Proposal evaluation and contract Negotiation, only in accordance with ORS 279C.400 to 279C.410 and OAR 125-249-0600 to 125-249-690, unless other applicable statutes control an Authorized Agency's use of competitive Proposals for Public Improvement Contracts. Also see the Subdivision of Rules in this Division entitled Formal Procurement Rules, OAR 125-249-0200 to 125-249-0490, and RFP related Rules under the Alternative Contracting Methods Subdivision at OAR 125-249-0640 to 125-249-0660. For ESPCs, the following RFP process must be utilized if an Authorized Agency desires the Procurement Process to be exempt from the competitive bidding requirements of ORS 279C.335. The RFP process for the Alternative Contracting Methods identified in OAR 125-249-0600 to 125-249-0690 includes the following steps:

(1) Proposal Evaluation. Factors in addition to price may be considered in the selection process, but only as set forth in the RFP. For ESPC Proposal evaluations, the Authorized Agency may provide in the RFP that qualifications-based evaluation factors will outweigh the Authorized Agency's consideration of price-related factors, due to the fact that prices for the major components of the Work to be performed during the ESPC process contemplated by the RFP will likely not be determinable at the time of Proposal evaluation. Proposal evaluation must be as objective as possible. Evaluation factors need not be precise predictors of future costs and performance, but to the extent possible such evaluation factors must:

(a) Be reasonable estimates based on information available to the Authorized Agency;

(b) Treat all Proposals equitably; and

(c) Recognize that public policy requires that Public Improvements be constructed at the least overall cost to the Authorized Agency. See ORS 279C.305.

(2) Evaluation Factors.

(a) In basic negotiated construction contracting, where the only reason for an RFP is to consider factors other than price, those factors may consist of firm and personnel experience on similar projects, adequacy of equipment and physical plant, sources of supply, availability of key personnel, financial capacity, past performance, safety records, project understanding, proposed methods of construction, proposed milestone dates, references, service, and related matters that affect cost or quality.

(b) In CM/GC contracting, in addition to (a) above, those factors may also include the ability to respond to the technical complexity or unique character of the project, analyze and propose solutions or approaches to complex project problems, coordination of multiple disciplines, the time required to commence and complete the improvement, and related matters that affect cost or quality.

(c) In Design-Build contracting, in addition to (a) and (b) above, those factors may also include design professional qualifications, specialized experience, preliminary design submittals, technical merit, design-builder team experience and related matters that affect cost or quality.

(d) In ESPC contracting, in addition to the factors set forth in Subsections (a), (b) and (c) above, those factors may also include sample Technical Energy Audits from similar projects, sample M & V reports, financial statements and related information of the ESCO for a time period established in the RFP, financial statements and related information of joint venturers comprising the ESCO, the ESCO's capabilities and experience in performing energy baseline studies for facilities (independently or in cooperation with an independent third-party energy baseline Consultant), past performance of the ESCO in meeting energy guarantee contract levels, the specific Person that will provide the Energy Savings Guarantee to be offered by the ESCO, the ESCO's management plan for the project, information on the specific methods, techniques and equipment that the ESCO will use in the performance of the Work under the ESPC, the ESCO's team members and Consultants to be assigned to the project, the ESCO's experience in the Energy Savings Performance contracting field, the ESCO's experience acting as the prime Contractor on previous ESPC projects (as opposed to a subcontractor or Consultant to a prime ESCO), the ESCO's vendor and product neutrality related to the development of ECMs, the ESCO's project history related to removal from an ESPC project or the inability or unwillingness of the ESCO to complete an ESPC project, the ESCO's M & V capabilities and experience (independently or in cooperation with an independent third-party M & V Consultant), the ESCO's ability to explain the unique risks associated with ESPC projects and the assignment of risk in the particular project between the Authorized Agency and the ESCO, the ESCO's equipment performance guarantee policies and procedures, the ESCO's energy savings and cost savings guarantee policies and procedures, the ESCO's project cost guarantee policies and procedures, the ESCO's pricing methodologies, the price that the ESCO will charge for the Technical Energy Audit phase of the Work and the ESCO's fee structure for all phases of the ESPC.

(3) Contract Negotiations. Contract terms may be negotiated to the extent allowed by the RFP and OAR 125-249-0600 to 125-249-0690, provided that the general Work Scope remains the same and that the field of competition does not change as a result of material changes to the requirements stated in the Solicitation Document. See OAR 125-249-0650. Terms that may be negotiated consist of details of contract performance, methods of construction, timing, assignment of risk in specified areas, fee, and other matters that affect cost or quality. In ESPC contracting, terms that may be negotiated also include the Scope of preliminary design of ECMs to be evaluated by the parties during the Technical Energy Audit phase of the Work, the Scope of services to be performed by the ESCO during the Project Development Plan phase of the Work, the detailed provisions of the Energy Savings Guarantee to be provided by the ESCO and Scope of Personal Services and Work, methodologies and compensation terms and conditions during the design and construction phase and M & V phase of the Work, consistent with the requirements of OAR 125-249-0680 below.

Stat. Auth.: ORS 279C.335 & 279A.065
Stats. Implemented: ORS 279A.065, 279C.335 & 351.086
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0645

Requests for Qualifications (RFQ)

As provided by ORS 279C.405(1), Authorized Agencies may utilize Requests for Qualifications (RFQs) to obtain information useful in the preparation or distribution of a Request for Proposals (RFPs). When using RFQs as the first step in a two (2) step solicitation process, in which distribution of the RFPs will be limited to the firms identified as most qualified through their submitted statements of qualification, Authorized Agencies must first advertise and provide notice of the RFQ in the same manner in which RFPs are advertised, include the RFP, specifically state that RFPs will be distributed only to the firms selected in the RFQ process and also provide within the RFQ a protest provision substantially in form of OAR 125-249-0450(5) regarding protests of the competitive range. Thereafter, Authorizing Agencies may distribute RFPs to the selected firms without further advertisement of the Solicitation.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279C.405
Hist.: DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0650

Requests for Proposals (RFP)

(1) Generally. The use of competitive proposals must be specially authorized for a Public Improvement Contract under the competitive bidding requirement of ORS 279C.335(1), OAR 125-249-0130 and 125-249-0600 to 125-249-0690. Also see ORS 279C.400 to 279C.410 for statutory requirements regarding competitive Proposals, and OAR 125-249-0640 regarding competitive Proposal procedures.

(2) Solicitation Documents. In addition to the Solicitation Document requirements of OAR 125-249-0200, this Rule applies to the requirements for Requests for Proposals. RFP Solicitation Documents must conform to the following standards:

(a) The Authorized Agency must set forth selection criteria in the Solicitation Document. Examples of evaluation criteria include price or cost, quality of a product or service, past performance, management, capability, personnel qualification, prior experience, compatibility, reliability, operating efficiency, expansion potential, experience of key personnel, adequacy of equipment or physical plant, financial wherewithal, sources of supply, references and warranty provisions. See OAR 125-249-0640. Evaluation factors need not be precise predictors of actual future costs and performance, but to the extent possible, such factors must be reasonable estimates based on information available to the Authorized Agency;

(b) When the Authorized Agency is willing to negotiate terms and conditions of the Contract or allow submission of revised Proposals following Discussions, the Authorized Agency must identify the specific terms and conditions in or provisions of the Solicitation Document that are subject to Negotiation or Discussion and authorize Offerors to propose certain alternative terms and conditions instead of the terms and conditions the Authorized Agency has identified as authorized for Negotiation. The Authorized Agency must describe the evaluation and Discussion or Negotiation process, including how the Authorized Agency will establish the Competitive Range;

(c) The anticipated size of the Competitive Range must be stated in the Solicitation Document, but may be decreased if the number of the Proposers that submit responsive Proposals is less that the specified number, or may be increased as provided in OAR 125-249-0650(4)(a)(B);

(d) When the Authorized Agency intends to award Contracts to more than one Proposer, the Authorized Agency must identify in the Solicitation Document the manner in which it will determine the number of Contracts it will Award. The Authorized Agency must also include the criteria it will use to determine how the Authorized Agency will endeavor to achieve optimal value, utility and substantial fairness when selecting a particular Contractor to provide Supplies and Services from those Contractors Awarded Contracts.

(3) Evaluation of Proposals.

(a) Evaluation. The Authorized Agency must evaluate Proposals only in accordance with criteria set forth in the RFP and applicable law. The Authorized Agency must evaluate Proposals to determine the Responsible Proposer or Proposers submitting the best Responsive Proposal or Proposals.

(A) Clarifications. In evaluating Proposals, an Authorized Agency may seek information from a Proposer to clarify the Proposer's Proposal. A Proposer must submit Written and Signed clarifications and such clarifications must become part of the Proposer's Proposal.

(B) Limited Negotiation. If the Authorized Agency did not permit Negotiation in its Request for Proposals, the Authorized Agency may, nonetheless, negotiate with the highest-ranked Proposer, but may then only negotiate the:

(i) Statement of Work; and

(ii) Contract Price as it is affected by negotiating the statement of Work.

(iii) The process for Discussions or Negotiations that is outlined and explained in Subsections (5)(b) and (6) of this Rule does not apply to this limited Negotiation.

(b) Discussions; Negotiations. If the Authorized Agency permitted Discussions or Negotiations in the Request for Proposals, the Authorized Agency must evaluate Proposals [and establish the Competitive Range, and may then conduct Discussions and Negotiations in accordance with this Rule.

(A) If the Solicitation Document provided that Discussions or Negotiations may occur at the Authorized Agency's discretion, the Authorized Agency may forego Discussions and Negotiations and evaluate all Proposals in accordance with this Rule.

(B) If the Authorized Agency proceeds with Discussions or Negotiations, the Authorized Agency must establish a Negotiation team tailored for the acquisition. The Authorized Agency's team may include legal, technical and negotiating personnel.

(c) Cancellation. Nothing in this Rule must restrict or prohibit the Authorized Agency from canceling the Solicitation at any time.

(4) Competitive Range, Protest, Award.

(a) Determining Competitive Range.

(A) If the Authorized Agency does not cancel the Solicitation, after the Opening the Authorized Agency will evaluate all Proposals in accordance with the evaluation criteria set forth in the Request for Proposals. After evaluation of all Proposals in accordance with the criteria set forth in the Request for Proposals, the Authorized Agency will determine and rank the Proposers in the Competitive Range.

(B) The Authorized Agency may increase the number of Proposers in the Competitive Range if the Authorized Agency's evaluation of Proposals establishes a natural break in the scores of Proposers indicating a number of Proposers greater than the initial Competitive Range are closely competitive, or have a reasonable chance of being determined the best Proposer after the Authorized Agency's evaluation of revised Proposals submitted in accordance with the process described in this Rule.

(b) Protesting Competitive Range. The Authorized Agency must provide Written notice to all Proposers identifying Proposers in the Competitive Range. A Proposer that is not within the Competitive Range may protest the Authorized Agency's evaluation and determination of the Competitive Range in accordance with OAR 125-249-0450.

(c) Intent to Award; Discuss or Negotiate. After the protest period provided in accordance with these Rules expires, or after the Authorized Agency has provided a final response to any protest, whichever date is later, the Authorized Agency may either:

(A) Provide Written notice to all Proposers in the Competitive Range of its intent to award the Contract to the highest-ranked Proposer in the Competitive Range.

(i) An unsuccessful Proposer may protest the Authorized Agency's intent to award in accordance with OAR 125-249-0450.

(ii) After the protest period provided in accordance with OAR 125-249-0450 expires, or after the Authorized Agency has provided a final response to any protest, whichever date is later, the Authorized Agency must commence final contract Negotiations with the highest-ranked Proposer in the Competitive Range; or

(B) Engage in Discussions with Proposers in the Competitive Range and accept revised Proposals from them, and, following such Discussions and receipt and evaluation of revised Proposals, conduct Negotiations with the Proposers in the Competitive Range.

(5) Discussions; Revised Proposals. If the Authorized Agency chooses to enter into Discussions with and receive revised Proposals from the Proposers in the Competitive Range, the Authorized Agency must proceed as follows:

(a) Initiating Discussions. The Authorized Agency must initiate oral or Written Discussions with all of the Proposers in the Competitive Range regarding their Proposals with respect to the provisions of the RFP that the Authorized Agency identified in the RFP as the subject of Discussions. The Authorized Agency may conduct Discussions for the following purposes:

(A) Informing Proposers of deficiencies in their initial Proposals;

(B) Notifying Proposers of parts of their Proposals for which the Authorized Agency would like additional information; and

(C) Otherwise allowing Proposers to develop revised Proposals that will allow the Authorized Agency to obtain the best Proposal based on the requirements and evaluation criteria set forth in the Request for Proposals.

(b) Conducting Discussions. The Authorized Agency may conduct Discussions with each Proposer in the Competitive Range necessary to fulfill the purposes of this Section, but need not conduct the same amount of Discussions with each Proposer. The Authorized Agency may terminate Discussions with any Proposer in the Competitive Range at any time. However, the Authorized Agency must offer all Proposers in the Competitive Range the opportunity to discuss their Proposals with the Authorized Agency before the Authorized Agency notifies Proposers of the date and time according to this Section that revised Proposals will be due.

(A) In conducting Discussions, the Authorized Agency:

(i) Must treat all Proposers fairly and must not favor any Proposer over another;

(ii) Must not discuss other Proposers' Proposals;

(iii) Must not suggest specific revisions that a Proposer should make to its Proposal, and must not otherwise direct the Proposer to make any specific revisions to its Proposal.

(B) At any time during the time allowed for Discussions, the Authorized Agency may:

(i) Continue Discussions with a particular Proposer;

(ii) Terminate Discussions with a particular Proposer and continue Discussions with other Proposers in the Competitive Range; or

(iii) Conclude Discussions with all remaining Proposers in the Competitive Range and provide notice to the Proposers in the Competitive Range to submit revised Proposals.

(c) Revised Proposals. If the Authorized Agency does not cancel the Solicitation at the conclusion of the Authorized Agency's Discussions with all remaining Proposers in the Competitive Range, the Authorized Agency must give all remaining Proposers in the Competitive Range notice of the date and time by which they must submit revised Proposals. This notice constitutes the Authorized Agency's termination of Discussions, and Proposers must submit revised Proposals by the date and time set forth in the Authorized Agency's notice.

(A) Upon receipt of the revised Proposals, the Authorized Agency must score the revised Proposals based upon the evaluation criteria set forth in the Request for Proposals, and rank the revised Proposals based on the Authorized Agency's scoring.

(B) The Authorized Agency may conduct Discussions with and accept only one revised Proposal from each Proposer in the Competitive Range unless otherwise set forth in the Request for Proposals.

(d) Intent to Award; Protest. The Authorized Agency must provide Written notice to all Proposers in the Competitive Range of the Authorized Agency's intent to award the Contract. An unsuccessful Proposer may protest the Authorized Agency's intent to award in accordance with OAR 125-249-0450. After the protest period provided in accordance with that Rule expires, or after the Authorized Agency has provided a final response to any protest, whichever date is later, the Authorized Agency must commence final contract Negotiations.

(6) Negotiations.

(a) Initiating Negotiations. The Authorized Agency may determine to commence Negotiations with the highest-ranked Proposer in the Competitive Range following the:

(A) Initial determination of the Competitive Range; or

(B) Conclusion of Discussions with all Proposers in the Competitive Range and evaluation of revised Proposals.

(b) Conducting Negotiations and Scope. The Authorized Agency may negotiate:

(A) The statement of Work;

(B) The Contract Price as it is affected by negotiating the statement of Work; and

(C) Any other terms and conditions reasonably related to those expressly authorized for Negotiation in the Request for Proposals. Accordingly, Proposers must not submit, and the Authorized Agency must not accept, for Negotiation any alternative terms and conditions that are not reasonably related to those expressly authorized for Negotiation in the Request for Proposals.

(c) Terminating Negotiations. At any time during Discussions or Negotiations that the Authorized Agency conducts in accordance with this Rule, the Authorized Agency may terminate Discussions or Negotiations with the highest-ranked Proposer, or the Proposer with whom it is currently discussing or negotiating, if the Authorized Agency reasonably believes that:

(A) The Proposer is not discussing or negotiating in good faith; or

(B) Further Discussions or Negotiations with the Proposer will not result in the parties agreeing to the terms and conditions of a final Contract in a timely manner.

(d) Continuing Negotiations. If the Authorized Agency terminates Discussions or Negotiations with a Proposer, the Authorized Agency may then commence Negotiations with the next highest scoring Proposer in the Competitive Range, and continue the process described in this Rule until the Authorized Agency has either:

(A) Determined to award the Contract to the Proposer with whom it is currently discussing or negotiating; or

(B) Completed one round of Discussions or Negotiations with all Proposers in the Competitive Range, unless the Authorized Agency provided for more than one round of Discussions or Negotiations in the Request for Proposals.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.400 - 279C.410
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0660

RFP Pricing Mechanisms

(1) A Request for Proposals may result in a lump sum Contract Price, as in the case of competitive bidding. Alternatively, a cost reimbursement Contract may be negotiated.

(2) Economic incentives or disincentives may be included to reflect stated Authorized Agency purposes related to time of completion, safety or other Public Contracting objectives, including total least cost mechanisms such as Life Cycle Costing according to OAR 125-247-0170.

(3) A Guaranteed Maximum Price (GMP) is used as the pricing mechanism for CM/GC where a total Contract Price is provided in the design phase in order to assist the Authorized Agency in determining whether the project Scope is within the Authorized Agency's budget, and allowing for design changes during preliminary design rather than after final design Work has been completed.

(a) If this collaborative process is successful, the Contractor must propose a final GMP, which may be accepted by the Authorized Agency and included within the Contract.

(b) If this collaborative process is not successful, and no mutually agreeable resolution on GMP can be achieved with the Contractor, then the Authorized Agency must terminate the Contract. The public Authorized Agency may then proceed to negotiate a new Contract (and GMP) with the firm that was next ranked in the original selection process, or employ other means for continuing the project under ORS Chapter 279C.

(4) When cost reimbursement Contracts are utilized, regardless of whether a GMP is included, the Authorized Agency must provide for audit controls that will effectively verify rates and ensure that costs are reasonable, allowable and properly allocated.

125-249-0670

Design-Build Contracts

(1) General. The Design-Build form of contracting, as defined at OAR 125-249-0610(3), has technical complexities that are not readily apparent. Authorized Agencies must use this contracting method only with the assistance of knowledgeable staff or Consultants who are experienced in its use. In order to use the Design-Build process, the Authorized Agency must be able to reasonably anticipate the following types of benefits:

(a) Obtaining, through a Design-Build team, engineering design, plan preparation, value engineering, construction engineering, construction, quality control and required documentation as a fully integrated function with a single point of responsibility;

(b) Integrating value engineering suggestions into the design phase, as the construction Contractor joins the project team early with design responsibilities under a team approach, with the potential of reducing contract changes;

(c) Reducing the risk of design flaws, misunderstandings and conflicts inherent in construction Contractors building from designs in which they have had no opportunity for input, with the potential of reducing contract claims;

(d) Shortening project time as construction activity (early submittals, mobilization, subcontracting and advance Work) commences prior to completion of a "Biddable" design, or where a design solution is still required (as in complex or phased projects); or

(e) Obtaining innovative design solutions through the collaboration of the Contractor and design team, which would not otherwise be possible if the Contractor had not yet been selected.

(2) Authority. Authorized Agencies must utilize the Design-Build form of contracting only in accordance with the requirements of these OARs 125-249-0600 to 125-249-0690 Rules. See particularly 125-249-0620 on "Use of Alternative Contracting Methods" and 125-249-0680 pertaining to ESPCs.

(3) Selection. Design-Build selection criteria may include those factors set forth above in OAR 125-249-0640(2)(a), (b), (c) and (d).

(4) QBS Inapplicable. Because the value of construction services predominates the Design-Build form of contracting, the qualifications based selection (QBS) process mandated by ORS 279C.110 for Authorized Agencies in obtaining certain Consultant services is not applicable.

(5) Licensing. If a Design-Build Contractor is not an Oregon licensed design professional, the Authorized Agency must require that the Design-Build Contractor disclose in its Written Offer that it is not an Oregon licensed design professional, and identify the Oregon licensed design professional(s) who will provide design services. See ORS 671.030(2)(g) regarding the offer of architectural services, and ORS 672.060(11) regarding the offer of engineering services that are appurtenant to construction services.

(6) Performance Security. ORS 279C.380(1)(a) provides that for Design-Build Contracts the surety's obligation on performance bonds, or the Bidder's obligation on cashier's or certified checks accepted in lieu thereof, includes the preparation and completion of design and related professional services specified in the Contract. This additional obligation, beyond performance of construction services, extends only to the provision of professional services and related design revisions, corrective Work and associated costs prior to final completion of the Contract (or for such longer time as may be defined in the Contract). The obligation is not intended to be a substitute for professional liability insurance, and does not include errors and omissions or latent defects coverage.

(7) Contract Requirements. Authorized Agencies must conform their Design-Build contracting practices to the following requirements:

(a) Design Services. The level or type of design services required must be clearly defined within the Procurement Documents and Contract, along with a description of the level or type of design services previously performed for the project. The services to be performed must be clearly delineated as either design Specifications or performance standards, and performance measurements must be identified.

(b) Professional Liability. The Contract must clearly identify the liability of design professionals with respect to the Design-Build Contractor and the Authorized Agency, as well as requirements for professional liability insurance.

(c) Risk Allocation. The Contract must clearly identify the extent to which the Authorized Agency requires an express indemnification from the Design-Build Contractor for any failure to perform, including professional errors and omissions, design warranties, construction operations and faulty Work claims.

(d) Warranties. The Contract must clearly identify any express warranties made to the Authorized Agency regarding characteristics or capabilities of the completed project (regardless of whether errors occur as the result of improper design, construction, or both), including any warranty that a design will be produced that meets the stated project performance and budget guidelines.

(e) Incentives. The Contract must clearly identify any economic incentives and disincentives, the specific criteria that apply and their relationship to other financial elements of the Contract.

(f) Honoraria. If allowed by the RFP, honoraria or stipends may be provided for early design submittals from qualified finalists during the Solicitation process on the basis that the Authorized Agency is benefited from such deliverables.

Stat. Auth.: ORS 279C.335 & 279A.065
Stats. Implemented: ORS 279A.065, 279C.110, 279C.335 & 351.086
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06

125-249-0680

Energy Savings Performance Contracts (ESPC)

(1) Generally. These OAR 125-249-0600 to 125-249-0690 Rules include a limited, efficient method for Authorized Agencies to enter into ESPCs outside the competitive bidding requirements of ORS 279C.335 for existing buildings or structures, but not for new construction. If an Authorized Agency chooses not to utilize the ESPC Procurement method provided for by these OAR 125-249-0600 to 125-249-0690 Rules, the Authorized Agency may still enter into an ESPC by complying with the competitive bidding exemption process set forth in ORS 279C.335, or by otherwise complying with the procurement requirements applicable to any Authorized Agency not subject to all the requirements of ORS 279C.335.

(2) ESPC Contracting Method. The ESPC form of contracting, as defined at OAR 125-249-0610(6), has unique technical complexities associated with the determination of what ECMs are feasible for the Authorized Agency, as well as the additional technical complexities associated with a Design-Build Contract. Authorized Agencies must only utilize the ESPC contracting method with the assistance of knowledgeable staff or Consultants who are experienced in its use. In order to utilize the ESPC contracting process, the Authorized Agency must be able to reasonably anticipate one or more of the following types of benefits:

(a) Obtaining, through an ESCO, the following types of integrated services: facility profiling, energy baseline studies, ECMs, Technical Energy Audits, project development planning, engineering design, plan preparation, cost estimating, life cycle costing, construction administration, project management, construction, quality control, operations and maintenance staff training, commissioning services, M & V services and required documentation as a fully integrated function with a single point of responsibility;

(b) Obtaining, through an ESCO, an Energy Savings Guarantee;

(c) Integrating the Technical Energy Audit phase and the Project Development Plan phase into the design and construction phase of Work on the project;

(d) Reducing the risk of design flaws, misunderstandings and conflicts inherent in the construction process, through the integration of ESPC services;

(e) Obtaining innovative design solutions through the collaboration of the members of the ESCO integrated ESPC services team;

(f) Integrating cost-effective ECMs into an existing building or structure, so that the ECMs pay for themselves through savings realized over the useful life of the ECMs;

(g) Preliminary design, development, implementation and an Energy Savings Guarantee of ECMs into an existing building or structure through an ESPC, as a distinct part of a major remodel of that building or structure that is being performed under a separate remodeling Contract; and

(h) Satisfying local energy efficiency design criteria or requirements.

(3) Authority. Authorized Agencies desiring to pursue an exemption from the competitive bidding requirements of ORS 279C.335 (and, if applicable, ORS 351.086), must utilize the ESPC form of contracting only in accordance with the requirements of these OAR 125-249-0600 to 125-249-0690 Rules.

(4) No Findings Required. An Authorized Agency is only required to comply with the ESPC contracting procedures set forth in these OAR 125-249-0600 to 125-249-0690 Rules in order for the ESPC to be exempt from the competitive bidding processes of ORS 279C.335. No Findings are required for an ESPC to be exempt from the competitive bidding process for Public Improvement Contracts according to ORS 279C.335, unless the Authorized Agency is subject to the requirements of ORS 279C.335 and chooses not to comply with the ESPC contracting procedures set forth in these OAR 125-249-0600 to 125-249-0690 Rules.

(5) Selection. ESPC selection criteria may include those factors set forth above in OAR 125-249-0640(2)(a), (b), (c) and (d). Since the Energy Savings Guarantee is such a fundamental component in the ESPC contracting process, Proposers must disclose in their Proposals the identity of any Person providing (directly or indirectly) any Energy Savings Guarantee that may be offered by the successful ESCO during the course of the performance of the ESPC, along with any financial statements and related information pertaining to any such Person.

(6) Qualifications Based Selection (QBS) Inapplicable. Because the value of construction services predominates in the ESPC method of contracting, the qualifications based selection (QBS) process mandated by ORS 279C.110 for Authorized Agencies in obtaining certain Consultant services is not applicable.

(7) Licensing. If the ESCO is not an Oregon licensed design professional, the Authorized Agency must require that the ESCO disclose in the ESPC that it is not an Oregon licensed design professional, and identify the Oregon licensed design professional(s) who will provide design services. See ORS 671.030(5) regarding the offer of architectural services, and ORS 672.060(11) regarding the offer of engineering services that are appurtenant to construction services.

(8) Performance Security. At the point in the ESPC when the parties enter into a binding Contract that constitutes a Design-Build Contract, the ESCO must provide a performance bond and a payment bond, each for 100% of the full Contract Price, including the construction and design and related professional services specified in the ESPC Design-Build Contract, according to ORS 279C.380(1)(a). For ESPC Design-Build Contracts, these "design and related professional services" include conventional design services, commissioning services, training services for the Authorized Agency's operations and maintenance staff, and any similar professional services provided by the ESCO under the ESPC Design-Build Contract before final completion of construction. M & V services, and any services associated with the ESCO's Energy Savings Guarantee are not included in these ORS 279C.380(1)(a) "design and related professional services." Nevertheless, an Authorized Agency may require that the ESCO provide performance security for M & V services and any services associated with the ESCO's Energy Savings Guarantee, if the Authorized Agency so provides in the RFP.

(9) Contracting Requirements. Authorized Agencies must conform their ESPC contracting practices to the following requirements:

(a) General ESPC Contracting Practices. An ESPC involves a multi-phase project, which includes the following contractual elements:

(A) A contractual structure which includes general contract terms describing the relationship of the parties, the various phases of the Work, the contractual terms governing the Technical Energy Audit for the project, the contractual terms governing the Project Development Plan for the project, the contractual terms governing the final design and construction of the project, the contractual terms governing the performance of the M & V services for the project, and the detailed provisions of the ESCO's Energy Savings Guarantee for the project.

(B) The various phases of the ESCO's Work will include the following:

(i) The Technical Energy Audit phase of the Work;

(ii) The Project Development Plan phase of the Work;

(iii) A third phase of the Work that constitutes a Design-Build Contract, during which the ESCO completes any plans and Specifications required to implement the ECMs that have been agreed to by the parties to the ESPC, and the ESCO performs all construction, commissioning, construction administration and related services to actually construct the project; and

(iv) A final phase of the Work, whereby the ESCO, independently or in cooperation with an independent Consultant hired by the Authorized Agency, performs M & V services to ensure that the Energy Savings Guarantee identified by the ESCO in the earlier phases of the Work and agreed to by the parties has actually been achieved.

(b) Design-Build Contracting Requirements in ESPCs. At the point in the ESPC when the parties enter into a binding Contract that constitutes a Design-Build Contract, the Authorized Agency must conform its Design-Build contracting practices to the Design-Build contracting requirements set forth in OAR 125-249-0670(7).

(A) A fixed price for each phase of the services to be provided by the ESCO;

(B) A cost reimbursement pricing mechanism, with a maximum not-to-exceed price or a GMP; or

(C) A combination of a fixed fee for certain components of the services to be performed, a cost reimbursement pricing mechanism for the construction services to be performed with a GMP, a single or annual fixed fee for M & V services to be performed for an identified time period after final completion of the construction Work, and a single or annual Energy Savings Guarantee fixed fee payable for an identified time period after final completion of the construction Work that is conditioned on certain energy savings being achieved at the facility by the ECMs that have been implemented by the ESCO during the project (in the event an annual M & V services fee and annual Energy Savings Guarantee fee is utilized by the parties, the parties may provide in the Design-Build Contract that, at the sole option of the Authorized Agency, the ESCO's M & V services may be terminated before the completion of the M & V/Energy Savings Guarantee period and the Authorized Agency's future obligation to pay the M & V services fee and Energy Savings Guarantee fee will likewise be terminated, under terms agreed to by the parties).

(d) Permitted ESPC Scope of Work. The Scope of Work under the ESPC is restricted to implementation and installation of ECMs, as well as other Work on building systems or building components that are directly related to the ECMs, and that, as an integrated unit, will pay for themselves over the useful life of the ECMs installed. The permitted Scope of Work for ESPCs resulting from a Solicitation under these OAR 125-249-0600 to 125-249-0690 Rules does not include maintenance services for the project facility.

Stat. Auth.: ORS 279C.335 & 279A.065
Stats. Implemented: ORS 279A.065, 279C.110, 279C.335 & 351.086
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0690

Construction Manager/General Contractor (CM/GC)

(1) General. The CM/GC form of contracting, as defined at OAR 125-249-0610(2), is a technically complex project delivery system. Authorized Agencies must use this contracting method only with the assistance of knowledgeable staff or Consultants who have a demonstrated capability of managing the CM/GC process in the necessary disciplines of engineering, construction scheduling and cost control, accounting, legal, Public Contracting and project management. Unlike the Design-Build form of contracting, the CM/GC form of contracting does not contemplate a "single point of responsibility" under which the Contractor is responsible for successful completion of all Work related to a performance Specification. The CM/GC has defined contract obligations, including responsibilities as part of the project team along with the Authorized Agency and design professional, although in CM/GC there is a separate contract between the Authorized Agency and design professional. In order to utilize the CM/GC method, the Authorized Agency must be able to reasonably anticipate the following types of benefits:

(a) Time Savings. The Public Improvement has significant schedule ramifications, such that concurrent design and construction are necessary in order to meet critical deadlines and shorten the overall duration of construction. The Authorized Agency may consider operational and financial data that show significant savings or increased opportunities for generating revenue as a result of early completion, as well as less disruption to public facilities as a result of shortened construction periods;

(b) Cost Savings. Early Contractor input during the design process is expected to contribute to significant cost savings. The Authorized Agency may consider value engineering, building systems analysis, life cycle costing analysis and construction planning that lead to cost savings. The Authorized Agency must specify any special factors influencing this analysis, including high rates of inflation, market uncertainty due to material and labor fluctuations or scarcities, and the need for specialized construction expertise due to technical challenges; or

(c) Technical Complexity. The Public Improvement presents significant technical complexities that are best addressed by a collaborative or team effort between the Authorized Agency, design professionals and Contractor, in which the Contractor will assist in addressing specific project challenges through pre-construction services. The Authorized Agency may consider the need for Contractor input on issues such as operations of the facility during construction, tenant occupancy, public safety, delivery of an early budget or GMP, financing, historic preservation, difficult remodeling projects and projects requiring complex phasing or highly coordinated scheduling.

(2) Authority. Authorized Agencies must use the CM/GC form of contracting only in accordance with the requirements of these Rules. See particularly OAR 125-249-0620 on "Use of Alternative Contracting Methods."

(3) Selection. CM/GC selection criteria may include those factors set forth above in OAR 125-249-0640(2)(b).

(4) Basis for Payment. The CM/GC process adds specified Construction Manager services to traditional General Contractor services, requiring full contract performance within a negotiated Guaranteed Maximum Price (GMP). The basis for payment is reimbursable direct costs as defined under the Contract, plus a fee constituting full payment for Work and services rendered, which together must not exceed the GMP. See GMP definition at OAR 125-249-0610(7) and Pricing Mechanisms at OAR 125-249-0660.

(5) Contract Requirements. Authorized Agencies must conform their CM/GC contracting practices to the following requirements:

(a) Setting the GMP. The GMP must be set at an identified time consistent with industry practice, after supporting information reasonably considered necessary to its use has been developed, and the supporting information must define with particularity both what is included and excluded from the GMP. A set of drawings and Specifications must be produced establishing the GMP scope.

(b) Adjustments to the GMP. The Contract must clearly identify the standards or factors under which changes or additional Work will be considered outside of the Work scope that warrants an increase in the GMP, as well as criteria for decreasing the GMP. The GMP must not be increased without a concomitant increase to the scope defined at the establishment of the GMP or most recent GMP Amendment.

(c) Cost Savings. The Contract must clearly identify the disposition of any cost savings resulting from completion of the Work below the GMP; that is, under what circumstances, if any, the CM/GC might share in those cost savings, or whether they accrue only to the Authorized Agency's benefit. (Note that unless there is a clearly articulated reason for sharing such cost savings, they should accrue to the Authorized Agency.)

(d) Cost Reimbursement. The Contract must clearly identify what items or categories of items are eligible for cost reimbursement within the GMP, including any category of "General Conditions" (a general grouping of direct costs that are not separately invoiced, subcontracted or included within either overhead or fee), and may also incorporate a mutually-agreeable cost-reimbursement standard.

(e) Audit. Cost reimbursements must be made subject to final audit adjustment, and the Contract must establish an audit process to ensure that Contract costs are allowable, properly allocated and reasonable.

(f) Fee. Compensation for the CM/GC's services must be paid on the basis of a fee that is inclusive of profit, overhead and all other indirect or non-reimbursable costs. Costs determined to be included within the fee should be expressly defined wherever possible. The fee, first expressed as a proposed percentage of all reimbursable costs, must be identified during and become an element of the selection process. It must subsequently be expressed as a fixed amount when the GMP is established.

(g) Incentives. The Contract must clearly identify any economic incentives, the specific criteria that apply and their relationship to other financial elements of the Contract (including the GMP).

(h) Controlled Insurance Programs. For projects anticipated to exceed $75 Million, the Contract must clearly identify whether an Owner Controlled or Contractor Controlled Insurance Program is anticipated or allowable. If so, the Contract must clearly identify:

(A) Anticipated cost savings from reduced premiums, claims reductions and other factors;

(B) The allocation of cost savings; and

(i) Early Work. The RFP must clearly identify, whenever feasible, the circumstances under which any of the following activities may be authorized and undertaken for compensation prior to establishing the GMP:

(A) Early Procurement of materials and supplies;

(B) Early release of Bid packages for such things as site development; and

(j) Subcontractor Selection. The Contract must clearly describe the methods by which the CM/GC must publicly receive, open and record Bids or price quotations, and competitively select subcontractors to perform the Contract Work based upon price, as well as the mechanisms by which the Authorized Agency may waive those requirements. The documents must also describe completely the methods by which the CM/GC and its affiliated or subsidiary entities may compete to perform the Work, including, at a minimum, advance notice to the public of the CM/GC's intent to compete and a public Opening of Bids or quotations by an independent party.

(k) Subcontractor Approvals and Protests. The Contract must clearly establish whether the Authorized Agency must approve subcontract awards, and to what extent, if any, the Authorized Agency will resolve procurement protests of subcontractors and suppliers. The related procedures and reporting mechanisms must be established with certainty, including whether the CM/GC acts as the Authorized Agency's representative in this process and whether the CM/GC's subcontracting records are considered to be public records. In any event, the Authorized Agency must retain the right to monitor the subcontracting process in order to protect the Authorized Agency's interests.

(l) CM/GC Self-Performance. Whenever feasible, the Contract must establish the elements of Work the CM/GC may self-perform without competition, including, for example, the Work of the job-site general conditions. In the alternative, the Contract must include a process for Authorized Agency approval of CM/GC self-performance.

(m) Socio-Economic Programs. The Contract must clearly identify conditions relating to any required socio-economic programs (such as Affirmative Action or Prison Inmate Labor Programs), including the manner in which such programs affect the CM/GC's subcontracting requirements, the enforcement mechanisms available, and the respective responsibilities of the CM/GC and the Authorized Agency.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 297C.335 & 279C.380(2)
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

Contract Provisions

125-249-0800

Required Contract Clauses

Except as provided by OAR 125-249-0150 and 125-249-0160, Authorized Agencies must include in all Solicitation Documents for Public Improvement Contracts all of the ORS Chapter 279C required Contract clauses, as set forth in the checklist contained in OAR 125-249-0200(1)(c) regarding Solicitation Documents. The following series of rules provides further guidance regarding particular Public Contract provisions.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 297C.505 - 279C.545, 279C.800 - 279C.870
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0810

Waiver of Delay Damages Against Public Policy

Authorized Agencies must not place any provision in a Public Improvement Contract purporting to waive, release, or extinguish the rights of a Contractor to damages resulting from an Authorized Agency's unreasonable delay in performing the Contract. However, Contract provisions requiring notice of delay, providing for alternative dispute resolution such as arbitration (where allowable) or mediation, providing other procedures for settling contract disputes, or providing for reasonable liquidated damages, are permissible.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.315
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0815

BOLI Public Works Bond

According to ORS 279C.830(2), the specifications for every Public Works Contract must contain a provision stating that the Contractor and every subcontractor must have a Public Works bond filed with the Construction Contractors Board before starting Work on the project, unless otherwise exempt. This bond is in addition to performance bond and payment bond requirements.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279C.830
Hist.: DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0820

Retainage

(1) Withholding of Retainage. Except to the extent an Authorized Agency's enabling laws require otherwise, an Authorized Agency must not retain an amount in excess of five percent (5%) of the Contract Price for Work completed. If the Contractor has performed at least fifty percent (50%) of the contract Work and is progressing satisfactorily, upon the Contractor's submission of Written application containing the surety's Written approval, the Authorized Agency may, in its discretion, reduce or eliminate retainage on any remaining progress payments. The Authorized Agency must respond in Writing to all such applications within a reasonable time. When the contract Work is ninety seven and one half percent (97-1/2%) completed, the Authorized Agency may, at its discretion and without application by the Contractor, reduce the retained amount to one hundred percent (100%) of the value of the remaining unperformed contract Work. An Authorized Agency may at any time reinstate retainage. Retainage must be included in the final payment of the Contract Price.

(2) Form of Retainage. Unless an Authorized Agency that reserves an amount as retainage finds in writing that accepting a bond or instrument described in part (a) or (b) of this Section poses an extraordinary risk that is not typically associated with the bond or instrument, the Authorized Agency, instead of withholding moneys from payment, must accept from the Contractor:

(a) Bonds, securities or other instruments that are deposited and accepted as provided in Subsection (4)(a) of this Rule; or

(b) A surety bond deposited as provided in Subsection (4)(b) of this Rule.

(3) Deposit in Interest-bearing Accounts. Upon request of the Contractor, an Authorized Agency must deposit cash retainage in an interest-bearing account in a bank, savings bank, trust company, or savings association, for the benefit of the Authorized Agency. Earnings on such account must accrue to the Contractor. State Authorized Agencies must establish the account through the State Treasurer.

(4) Alternatives to Cash Retainage. Instead of cash retainage to be held by an Authorized Agency, the Contractor may substitute one of the following:

(a) Deposit of bonds, securities or other instruments:

(A) The Contractor may deposit bonds, securities or other instruments with the Authorized Agency or in any bank or trust company to be held for the benefit of the Authorized Agency. If the Authorized Agency accepts the deposit, the Authorized Agency must reduce the cash retainage by an amount equal to the value of the bonds and securities, and reimburse the excess to the Contractor.

(B) Bonds, securities or other instruments deposited or acquired instead of cash retainage must be of a character approved by the Department, including but not limited to:

(i) Bills, certificates, notes or bonds of the United States.

(ii) Other obligations of the United States or agencies of the United States.

(iii) Obligations of a corporation wholly owned by the Federal Government.

(iv) Indebtedness of the Federal National Mortgage Association.

(v) General obligation bonds of the State of Oregon or a political subdivision of the State of Oregon.

(vi) Irrevocable letters of credit issued by an insured institution, as defined in ORS 706.008.

(C) Upon the Authorized Agency's determination that all requirements for the protection of the Authorized Agency's interests have been fulfilled, it must release to the Contractor all bonds and securities deposited instead of retainage.

(b) Deposit of Surety Bond. An Authorized Agency, at its discretion, may allow the Contractor to deposit a surety bond in a form acceptable to the Authorized Agency instead of all or a portion of funds retained or to be retained. A Contractor depositing such a bond must accept surety bonds from its subcontractors and suppliers instead of retainage. In such cases, retainage must be reduced by an amount equal to the value of the bond, and the excess must be reimbursed.

(5) Recovery of Costs. An Authorized Agency may recover from the Contractor all costs incurred in the proper handling of retainage, by reduction of the final payment.

(6) Additional Retainage When Certified Payroll Statements Not Filed. According to ORS 279C.845(7), if a Contractor is required to file certified payroll statements and fails to do so, the Authorized Agency must retain 25 percent of any amount earned by the Contractor on a Public Works Contract until the Contractor has filed such statements with the Authorized Agency. The Authorized Agency must pay the Contractor the amount retained under this provision within 14 days after the Contractor files the certified statements, regardless of whether a subcontractor has filed such statements (but see ORS 279C.845(1) regarding the requirement for both contractors and subcontracts to file certified statements with the Authorized Agency).

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.560, 279C.570 & 701.420
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0830

Contractor Progress Payments

(1) Request for Progress Payments. Each month the Contractor must submit to the Authorized Agency, their Written request for a progress payment based upon an estimated percentage of Contract completion. At the Authorized Agency's discretion, this request may also include the value of material to be incorporated in the completed Work, which has been delivered to the premises and appropriately stored. The sum of these estimates is referred to as the "value of completed Work." With these estimates as a base, the Authorized Agency will make a progress payment to the Contractor, which must be equal to:

(a) The value of completed Work;

(b) Less those amounts that have been previously paid;

(d) Less the appropriate amount of retainage.

(2) Progress Payments Do Not Mean Acceptance of Work. Progress payments must not be construed as an acceptance or approval of any part of the Work, and must not relieve the Contractor of responsibility for defective Workmanship or material.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.570
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0840

Interest

(1) Prompt Payment Policy. An Authorized Agency must pay promptly all payments due and owing to the Contractor on Contracts for Public Improvements.

(2) Interest on Progress Payments. Late payment interest must begin to accrue on payments due and owing on the earlier of thirty (30) Days after receipt of invoice or fifteen (15) Days after Authorized Agency approval of payment (the "Progress Payment Due Date"). The interest rate must equal three times the discount rate on ninety (90)-Day commercial paper in effect on the Progress Payment Due Date at the Federal Reserve Bank in the Federal Reserve district that includes Oregon, up to a maximum rate of thirty (30) percent.

(3) Interest on Final Payment. Final payment on the Contract Price, including retainage, must be due and owing no later than thirty (30) Days after Contract completion and acceptance of the Work. Late-payment interest on such final payment must thereafter accrue at the rate of one and one-half percent per month until paid.

(4) Settlement or Judgment Interest. In the event of a dispute as to compensation due a Contractor for Work performed, upon settlement or judgment in favor of the Contractor, interest on the amount of the settlement or judgment must be added to, and not made part of, the settlement or judgment. Such interest, at the discount rate on ninety (90)-Day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve District that includes Oregon, must accrue from the later of the Progress Payment Due Date, or thirty (30) Days after the Contractor submitted a claim for payment to the Authorized Agency in Writing or otherwise in accordance with the contract requirements.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.570
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0850

Final Inspection

(1) Notification of Completion; Inspection. The Contractor must notify the Authorized Agency in Writing when the Contractor considers the contract Work completed. Within fifteen (15) Days of receiving Contractor's notice, the Authorized Agency will inspect the project and project records, and will either accept the Work or notify the Contractor of remaining Work to be performed.

(2) Acknowledgment of Acceptance. When the Authorized Agency finds that all Work required under the Contract has been completed satisfactorily, the Authorized Agency must acknowledge acceptance of the Work in Writing.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.570(8)
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0860

Public Works Contracts

(1) Generally. ORS 279C.800 to 279C.870 regulates Public Works Contracts, as defined in ORS 279C.800(6), and requirements for payment of prevailing wage rates. Also see administrative rules of the Bureau of Labor and Industries (BOLI) at OAR chapter 839.

(2) Required Contract Conditions. As detailed in the above statutes and Rules, every Public Works Contract must contain the following provisions:

(a) Authorized Agency authority to pay certain unpaid claims and charge such amounts to Contractors, as set forth in ORS 279C.515(1).

(b) Maximum hours of labor and overtime, as set forth in ORS 279C.520(1).

(c) Employer notice to employees of hours and days that employees may be required to Work, as set forth in ORS 279C.520(2).

(d) Contractor required payments for certain services related to sickness or injury, as set forth in ORS 279C.530.

(e) Requirement for payment of prevailing rate of wage, as set forth in ORS 279C.830(1).

(3) Requirements for Specifications. The Specifications for every Public Works Contract, consisting of the procurement package (such as the project manual, Bid or Proposal booklets, request for quotes or similar procurement Specifications), must contain the following provisions:

(a) The prevailing rate of wage, as required by ORS 279C.830(1)(a);

(A) physically contained within or attached to hard copies of procurement Specifications;

(B) included by a statement incorporating the applicable wage rate publication into the Specifications by reference, in compliance with OAR 839-025-0020; or

(C) when the rates are available electronically or by Internet access, the rates may be incorporated into the Specifications by referring to the rates and providing adequate information on how to access them in compliance with OAR 839-025-0020.

(b) If applicable, BOLI determines (in a separate publication) the federal prevailing rate of wage and information concerning whether the state or federal rate is higher in each trade or occupation in each locality. The same options for inclusion of wage rate information stated in Subsection (3)(a) of this Rule apply. See BOLI rules at OAR 839-025-0020 and 0035.

Stat. Auth.: ORS 279A.065(5)(a), 279A.070
Stats. Implemented: ORS 279C.800 - 279C.870
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 6-2008, f. & cert. ef. 7-2-08; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0870

Specifications; Brand Name Products

(1) Generally. The Authorized Agency's Solicitation Document must not expressly or implicitly require any product by brand name or mark, nor must it require the product of any particular manufacturer or seller, except according to an exemption granted under ORS 279C.345(2).

(2) Equivalents. An Authorized Agency may identify products by brand names as long as the following language: "approved equal"; "or equal"; "approved equivalent" or "equivalent," or similar language is included in the Solicitation Document. The Authorized Agency must determine, in its sole discretion, whether an Offeror's alternate product is "equal" or "equivalent.”

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.345
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0880

Records Maintenance; Right to Audit Records

(1) Records Maintenance; Access. Contractors and subcontractors must maintain all fiscal records relating to Contracts in accordance with generally accepted accounting principles ("GAAP"). In addition, Contractors and subcontractors must maintain all other records necessary to clearly document:

(a) Their performance; and

(b) Any claims arising from or relating to their performance under a Public Contract. Contractors and subcontractors must make all records pertaining to their performance and any claims under a Contract (the books, fiscal records and all other records, hereafter referred to as "Records") accessible to the Authorized Agency at reasonable times and places, whether or not litigation has been filed as to such claims.

(2) Inspection and Audit. An Authorized Agency may, at reasonable times and places, have access to and an opportunity to inspect, examine, copy, and audit the Records of any Person that has submitted cost or pricing data according to the terms of a Contract to the extent that the Records relate to such cost or pricing data. If the Person must provide cost or pricing data under a Contract, the Person must maintain such Records that relate to the cost or pricing data for 3 years from the date of final payment under the Contract, unless a shorter period is otherwise authorized in Writing.

(3) Records Inspection; Contract Audit. The Authorized Agency, and its authorized representatives, must be entitled to inspect, examine, copy, and audit any Contractor's or subcontractor's Records, as provided in Section 1 of this Rule. The Contractor and subcontractor must maintain the Records and keep the Records accessible and available at reasonable times and places for a minimum period of 3 years from the date of final payment under the Contract or subcontract, as applicable, or until the conclusion of any audit, controversy or litigation arising out of or related to the Contract, whichever date is later, unless a shorter period is otherwise authorized in Writing.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.030, 279C.375, 279C.380 & 279C.440
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0890

Authorized Agency Payment for Unpaid Labor or Supplies

(1) Contract Incomplete. If the Contract is still in force, the Authorized Agency may, in accordance with ORS 279C.515(1), pay a valid claim to the Person furnishing the labor or services, and charge the amount against payments due or to become due to the Contractor under the Contract. If an Authorized Agency chooses to make such a payment as provided in ORS 279C.515(1), the Contractor and the Contractor's surety must not be relieved from liability for unpaid claims.

(2) Contract Completed. If the Contract has been completed and all funds disbursed to the prime Contractor, all claims must be referred to the Contractor's surety for resolution. The Authorized Agency must not make payments to subcontractors or suppliers for Work already paid for by the Authorized Agency.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.515
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05

125-249-0900

Contract Suspension; Termination Procedures

(1) Suspension of Work. In the event an Authorized Agency suspends performance of Work for any reason considered by the Authorized Agency to be in the public interest other than a labor dispute, the Contractor must be entitled to a reasonable extension of contract time, and to reasonable compensation for all costs, including a reasonable allowance for related overhead, incurred by the Contractor as a result of the suspension.

(2) Termination of Contract by Mutual Agreement for Reasons Other Than Default

(a) Reasons for termination. The parties may agree to terminate the Contract or a divisible portion thereof if:

(A) The Authorized Agency suspends Work under the Contract for any reason considered to be in the public interest (other than a labor dispute, or any judicial proceeding relating to the Work filed to resolve a labor dispute); and

(B) Circumstances or conditions are such that it is impracticable within a reasonable time to proceed with a substantial portion of the Work.

(b) Payment. When a Contract, or any divisible portion thereof, is terminated according to this Section (2), the Authorized Agency must pay the Contractor a reasonable amount of compensation for preparatory Work completed, and for costs and expenses arising out of termination. The Authorized Agency must also pay for all Work completed, based on the Contract Price. Unless the Work completed is subject to unit or itemized pricing under the Contract, payment must be calculated based on percent of Contract completed. No claim for loss of anticipated profits will be allowed.

(3) Public Interest Termination by the Authorized Agency. An Authorized Agency may include in its Contracts terms detailing the circumstances under which the Contractor must be entitled to compensation as a matter of right in the event the Authorized Agency unilaterally terminates the Contract for any reason considered by the Authorized Agency to be in the public interest.

(4) Responsibility for Completed Work. Termination of the Contract or a divisible portion thereof according to this Rule must not relieve either the Contractor or its surety of liability for claims arising out of the Work performed.

(5) Remedies Cumulative. The Authorized Agency may, at its discretion, avail itself of any or all rights or remedies set forth in these Rules, in the Contract, or available at law or in equity.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279C.650, 279C.655, 279C.660, 279C.665 & 279C.670
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 5-2006, f. & cert. ef. 5-31-06; DAS 11-2009 f. 12-30-09 cert. ef. 1-1-10

125-249-0910

Changes to the Work and Contract Amendments

(1) Definitions. As used in this Rule:

(a) "Amendment" means a Written modification to the terms and conditions of a Public Improvement Contract, other than by Changes to the Work, within the general Scope of the original Procurement that requires mutual agreement between the Agency and the Contractor.

(b) "Changes to the Work" means a mutually agreed upon change order, or a construction change directive or other Written order issued by the Agency or its authorized representatives to the Contractor requiring a change in the Work within the general Scope of a Public Improvement Contract and issued under its changes provisions in administering the Contract and, if applicable, adjusting the Contract Price or contract time for the changed Work.

(2) Changes Provisions. Changes to the Work are anticipated in construction and, accordingly, Agencies must include changes provisions in all Public Improvement Contracts that detail the Scope of the changes clause, provide pricing mechanisms, authorize the Agency or its authorized representatives to issue Changes to the Work and provide a procedure for addressing Contractor claims for additional time or compensation. When Changes to the Work are agreed to or issued consistent with the Contract's changes provisions they are not considered to be new Procurements and an exemption from competitive bidding is not required for their issuance by Agencies.

(3) Change Order Authority. Agencies may establish internal limitations and delegations for authorizing Changes to the Work, including dollar limitations. Dollar limitations on Changes to the Work are not set by these Rules, but such changes are limited by the above definition of that term.

(4) Contract Amendments. Contract Amendments within the general Scope of the original Procurement are not considered to be new Procurements and an exemption from competitive bidding is not required in order to add components or phases of Work specified in or reasonably implied from the Solicitation Document. Amendments to a Public Improvement Contract may be made only when:

(a) They are within the general Scope of the original Procurement;

(b) The field of competition and Contractor selection would not likely have been affected by the contract modification. Factors to be considered in making that determination include similarities in Work, project site, relative dollar values, differences in risk allocation and whether the original Procurement was accomplished through competitive bidding, competitive proposals, Competitive Quotes, sole source or emergency contract;

(c) In the case of a Contract obtained under an Alternative Contracting Method, any additional Work was specified or reasonably implied within the findings supporting the competitive bidding exemption; and

(d) The Amendment is made consistent with this Rule and other applicable legal requirements.

Stat. Auth.: ORS 279A.065(5)(a) & 279A.070
Stats. Implemented: ORS 279A.065 & 279C.400(1)
Hist.: DAS 4-2004, f. 11-23-04, cert. ef. 3-1-05; DAS 9-2005, f. & cert. ef. 8-3-05; DAS 5-2006, f. & cert. ef. 5-31-06

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