Budget, Fiscal, Procurement and Contracting Regulations
CHAPTER 69. State Procurement
Subchapter I. General Provisions
The purpose of this chapter is to:
(1) Create a more efficient procurement process to better enable the State to obtain the highest quality goods, materials and services at the best possible price, thereby maximizing the purchasing value of public moneys; and
(2) Create a single forum in which the procurement needs of state agencies and the technical and legal requirements of the Government Support Services are addressed simultaneously so as to increase mutual understanding, respect, trust and fair and equitable treatment for all persons who deal with the state procurement process.70 Del. Laws, c. 601, § 2; 73 Del. Laws, c. 143, § 5; 75 Del. Laws, c. 88, § 22(4);
As used in this chapter:
(1) “Agency” means every board, department, bureau, commission, person or group of persons or other authority which directly receives moneys under any budget appropriation act or supplemental appropriation act and which was created and now exists or hereafter is created to:
a. Execute, supervise, control and/or administer governmental functions under the laws of this State; and/or
b. To perform such governmental functions under the laws of this State, or to perform such other duties as may be prescribed; and/or
c. To collect and/or use any taxes, fees, licenses, permits or other receipts for service or otherwise for the performance of any function or related to or supported in whole or in part by the laws of this State; and/or
d. To administer any laws providing for the collection of taxes, fees, permits, licenses or other forms of receipts from any sources whatsoever for the use of the State or any agency of the State.
“Agency” shall include Delaware Technical and Community College and the Delaware State University but shall not include any local government unit or agency receiving only grants-in-aid appropriations from the State and no other appropriations, as described herein, the University of Delaware, volunteer ambulance/rescue companies, volunteer fire departments and the Delaware Transit Corporation. Nothing in this paragraph shall be deemed to exempt any entity that is otherwise required to comply with § 6960 of this title.
(2) “Agency head” means the top official in an agency whether elected, appointed or otherwise. The agency head may delegate duties under this chapter to a designee within the agency.
(3) “Agency official” means any employee, consultant, person in the category of other personal service or any other person receiving compensation from the State, its agencies, municipalities, political subdivisions or school boards.
(4) “Compensation” means the total amount paid by an agency for professional services, including reimbursed expenses, unless otherwise stated in the contract.
(5) “Contractor” means any person, partnership, firm, corporation, nonprofit agency or other business association who has a contract with an agency.
(6) “Covered agency” means any agency except school districts, Delaware Technical & Community College, the Delaware State University and the Legislative Branch of State government.
(7) “Craft training” means an apprenticeship program approved by and registered with any Delaware apprenticeship agency or the United States Department of Labor. The Secretary of the Department of Labor shall maintain a list of crafts for which there are approved and registered training programs.
(8) “Director” means, for the purposes of this chapter, the Director of the Office of Management and Budget, except as provided by § 6960 of this title, in which case it shall mean the Secretary of the Department of Labor.
(9) “Electronic bid” means the bidder, in response to an advertised invitation to bid, submits all documentation, except for information and documents specified in the invitation to bid, only through an electronic process to an identified secure electronic mail account that will not be opened by the Office or an agency until the close of the bidding period. In this process, no hard copy documentation shall be submitted to the Office or an agency prior to the award of the contract.
(10) “Electronic procurement advertising system” means the advertising system on which all state agencies must submit public notice of contracts subject to the public advertising requirements of this chapter.
(11) “Electronic submission” means the vendor, in response to an advertised request for proposal, submits all documentation, unless specified in the request for proposal, only through an electronic process to an identified secure electronic mail account that will not be opened by the Office or an agency until the close of the request for proposal submittal period. In this process, no hard copy is to be submitted to the Office or an agency after the close of the request for proposal submittal period unless specifically requested by the Office or agency.
(12) “Firm” means a person, organization, partnership, limited partnership, corporation, association, nonprofit agency or other business association.
(13) “Internet” means the international computer network of both federal and nonfederal interoperable packet switched data networks, including the graphical subnetwork called the world wide web.
(14) “Labor supply ratio” means the number of skilled crafts persons per unskilled workers employed on a public works project. Any person who has completed a federal apprenticeship program, an apprenticeship program approved by the Delaware Department of Labor under Chapter 2 of Title 19, or has otherwise documented 8 years of experience in a particular craft, is deemed to be a skilled crafts person for the purposes of this definition.
(15) “Lifecycle costing analysis” means the contracting agency’s evaluation of costs associated with the cost of acquisition, the cost of energy consumption required for operation, the cost of maintenance and the cost of consumables that affect the State’s overall cost of ownership of equipment or public works projects. Such evaluation is used by the contracting agency or project architect or project engineer for the development of contract specifications.
(16) “Local government unit” means any municipality incorporated in this State under the authority of the General Assembly and any of the 3 counties.
(17) “Materiel” means materials, equipment, tools, supplies, or any other personal property, but does not include real property or electric, gas, water, telephone or similar utilities.
(18) “Office” means the Office of Management and Budget; as provided in § 6960 of this title, “Department” shall mean the Department of Labor.
(19) “On-line bidding method” means a procurement process in which the Office or an agency receives vendors’ bids electronically over the Internet as either a substitute for a hard copy bid submission or in a real-time, competitive bidding event.
(20) “Professional services” means services which generally require specialized education, training or knowledge and involve intellectual skills. Examples of professional services include, but are not limited to, engineering, environmental engineering, environmental monitoring, land surveying, landscape architecture, geology, architectural, archaeologists, architectural historians, historians, educational consultants, management, medical, teaching, planning, computer information management, financial, accounting, auditing, construction management and arbitration services. Professional services subject to the provisions of § 2507 of this title or which require compliance with Delaware Supreme Court Rule 52 or a substantially similar rule of another state shall not be included in this definition and shall not be subject to this chapter.
(21) “Public building” means any edifice or building which is or is to be constructed, reconstructed, altered or repaired pursuant to a public works contract. It does not mean the act or process itself of constructing, reconstructing, altering or repairing.
(22) “Public funds” means funds of the State, of any agency within the State, of any public school district, of or from the United States government or of or from any department or representative body thereof.
(23) “Public works contract” means construction, reconstruction, demolition, alteration and repair work and maintenance work paid for, in whole or in part, with public funds.
(24) “Reverse auctioning” means an on-line procurement method wherein bidders bid on specified goods and nonprofessional services through real-time electronic competitive bidding, with the award being made to the lowest responsive and responsible bidder. During the bidding process, bidders’ prices are public and are revealed electronically, and bidders shall have the opportunity to modify their bid prices for the duration of the time period established for the auction.
(25) “Section” means the Section of Government Support Services in the Office of Management and Budget.
(26) “Third tier contractor” means a firm that has contracted with a subcontractor to provide services and/or materiel in connection with a public works contract.
(27) “User group” means 2 or more agency or nonagency representatives, one of whom shall be an agency representative who provides technical advice to the Government Support Services concerning the requirements of certain materiel and nonprofessional services contracts. Nonagency representatives shall be limited to expected users of the materiel and/or services being procured and/or persons having technical expertise deemed necessary by the agency. In no event shall nonagency representatives be affiliated with a vendor or prospective vendor of the contract.
(28) “Volunteer ambulance/rescue companies” means a volunteer ambulance or rescue company certified as such by the State Fire Prevention Commission.
(29) “Volunteer fire department” means a volunteer fire department recognized as such by the State Fire Prevention Commission.
(30) “Z score” means a calculation used to assess a bidder’s fiscal health. The calculation is based on the following weighted ratios: return on total assets, sales to total assets, equity to debt, working capital to total assets, and retained earnings to total assets.29 Del. C. 1953, § 6901; 54 Del. Laws, c. 106, § 2; 61 Del. Laws, c. 386, § 1; 62 Del. Laws, c. 306, § 1; 66 Del. Laws, c. 298, § 1; 70 Del. Laws, c. 601, § 3; 71 Del. Laws, c. 4, § 1; 71 Del. Laws, c. 309, §§ 1-3; 72 Del. Laws, c. 133, § 2; 73 Del. Laws, c. 143, § 5; 73 Del. Laws, c. 416, §§ 1-3; 73 Del. Laws, c. 438, § 1; 74 Del. Laws, c. 359, § 1; 74 Del. Laws, c. 373, § 1; 74 Del. Laws, c. 419, §§ 1, 2; 75 Del. Laws, c. 88, §§ 16(5), 22(4); 78 Del. Laws, c. 288, § 1; 81 Del. Laws, c. 298, § 1; 82 Del. Laws, c. 36, § 1;
(a) Any person, who, with intent to avoid compliance with this chapter, wilfully fragments or subdivides any contract for the purchase of materiel, nonprofessional services, public works or professional services, shall be subject to the penalties listed in this section.
(b) Each contract entered into by an agency for professional services shall contain a prohibition against contingency fees as follows:
(1) The firm offering professional services swears that it has not employed or retained any company or person, working primarily for the firm offering professional services, to solicit or secure this agreement by improperly influencing the agency or any of it employees in any professional service procurement process;
(2) The firm offering the professional service has not paid or agreed to pay any person, company, corporation, individual or firm, other than a bona fide employee working primarily for the firm offering professional services, any fee, commission, percentage, gift or any other consideration contingent upon or resulting from the award or making of this agreement; and
(3) For the violation of this provision, the agency shall have the right to terminate the agreement without liability and, at its discretion, to deduct from the contract price, or otherwise recover the full amount of such fee, commission, percentage, gift or consideration.
(c) Any agency official who offers to solicit or secure, or solicits or secures, any agency or central contract and in connection therewith is paid any fee, commission, percentage, gift or any other consideration, shall be subject to the penalties listed in this section.
(d) Any individual or firm who offers, agrees or contracts to improperly influence any agency or its employees in the procurement of any agency or central contract and who is paid or is to be paid a fee, commission, percentage, gift or any other consideration contingent upon or resulting from the award or the making of an agency or central contract, shall be subject to the penalties listed in this section.
(e) Any individual or firm offering materiel and/or services which shall offer to pay to an agency official, representative or employee or is paid any fee, commission, percentage, gift or any other consideration contingent upon or resulting from the award or making of any agency or central contract shall be subject to the penalties listed in this section.
(f) Except for § 6960 of this title, for which the penalties and remedies enumerated in that section shall apply, any individual or firm which commits a violation of this chapter, as listed in this section, shall be punished by a fine of not less than $1,000 and not more than $2,000 or by imprisonment for not more than 6 months, or both, and upon a second or subsequent conviction thereof, shall be punished by a fine of not less than $2,000 and not more than $5,000 or by imprisonment for not more than 1 year, or both. The Superior Court for the State shall have exclusive original jurisdiction over offenses listed in this section.
(g) The remedies and penalties provided for in this section are not exclusive and shall be in addition to any other procedures, rights or remedies which exist with respect to any other provisions of law including but not limited to state and/or federal criminal prosecutions or common law or statutory actions brought by private parties and/or the provisions and penalties defined in Chapter 58 of this title.70 Del. Laws, c. 601, § 4; 71 Del. Laws, c. 4, §§ 2-4;
(a) If any provision of this chapter conflicts or is inconsistent with any statute, rule or regulation of the federal government applicable to a project or activity, the cost of which is to be paid or reimbursed in whole or in part by the federal government, and due to such conflict or inconsistency the availability of federal funds may be jeopardized, such provision shall not apply to such project or activity. If any provisions of this chapter conflict or are inconsistent with Chapter 40 of Title 31, the provisions of Chapter 40 of Title 31 shall prevail and govern.
(b) This chapter shall not apply to any purchase of materials or services from the federal government or from the government of the State including any agency of the State, as defined in § 6902 of this title.
(c) This chapter shall not apply to contracts for the transportation of school children. Such contracts shall be submitted to the Secretary of Education through the Department of Education Transportation Office for approval.
(d) This chapter shall not apply to any purchase of library materials such as books, periodicals, subscriptions and software by libraries of any agency, nor shall this chapter apply to the purchase of services by libraries of any agency pursuant to Chapter 66 of this title.
(e) If no state contract exists for a certain good or service, covered agencies may procure that certain good or service under another agency’s contract so long as the arrangement is agreeable to all parties. Agencies, other than covered agencies, may also procure such goods or services under another agency’s contract when the arrangement is agreeable to all parties.
(f) Where, because of changed situations, unforeseen conditions, strikes or acts of God, a change order is determined to be necessary and is requested by the agency and not specified in the agency’s solicitation or advertisement for bids and in the contract, as awarded, the awarding agency may issue a change order setting forth the change, addition or extra work required to be undertaken by the contractor on a contract, which shall not:
(1) Be subject to the competitive bidding requirements of this chapter; or
(2) Invalidate the contract; provided, that such change is within the scope of the contract as set forth in the standard specifications, special provisions or similar publication of the agency.
(g) All material required by any agency shall be purchased, except where hereinafter provided, and all work of a nonprofessional nature, except as hereinafter provided, which is not to be performed by employees of the agency shall be performed under a contract entered into pursuant to this subchapter and after competitive bidding as provided for in this section except that an agency may purchase material or contract for work to be performed without competitive bidding in the following instances:
(1) When the purchased material will be used by the Delaware Industries for the Blind within the Department of Health and Social Services as raw material for goods and services which the program manufactures and provides for resale or the purchased material will be used by the Business Enterprise Program of the Division for the Visually Impaired as supplies to operate the vending stands in the program;
(2) When material or services are on the procurement list published by the commission for the purchase of products and services of the blind and other severely disabled individuals those materiel or services shall be purchased in accordance with the procedure described in § 9605 of Title 16; or
(3) Where the purchased material or work which is the subject of the contract is necessary to enable the Department of Natural Resources and Environmental Control to engage in the preservation of the beaches of the Atlantic Ocean and Delaware Bay shoreline of Delaware in accordance with the Beach Preservation Act, Chapter 68 of Title 7. Notwithstanding the foregoing, any such purchase must be approved by the Budget Commission prior to the commencement of any purchase of material or work.
(h) This chapter shall not apply to purchases of historical artifacts or art for the purpose of public display.
(i) A contract may be awarded without competition if the agency head, prior to the procurement, determines in writing that there is only 1 source for the required contract. Sole source procurement shall not be used unless there is sufficient evidence that there is only 1 source for the required contract and no other type of goods or service will satisfy the requirements of the agency. The agency shall examine cost or pricing data prior to an award under this subsection. Sole source procurement shall be avoided, except when no reasonable alternative sources exist. A written determination by the agency for the sole source procurement shall be included in the agency’s contract file.
(j) This chapter shall not apply to any purchase of educational materials and supplies by post-secondary educational institutions participating in and benefiting from special educational discount and cooperative programs.
(k) This chapter shall not apply to the Wilmington Housing Authority in the procurement of goods and/or services when such goods and/or services are provided by primarily Wilmington Housing Authority resident-owned businesses.
(l) This chapter shall not apply to the office of the Commissioner of Elections or the several departments of elections in the purchase of material or work which is the subject of the contract and which is necessary to enable the Department of Elections to conduct a primary, general, special election or voter registration pursuant to Title 15.
(m) This chapter shall not apply to the Department of Education in the procurement of goods and/or services from the University of Delaware, Delaware State University and Delaware Technical and Community College.
(n) This chapter shall not apply to contracts entered into by the Board of Pension Trustees, authorized pursuant to § 8308(c)(5) of this title, with respect to the procurement of financial services, including advisory, management and investment services relating to any fund administered by the Delaware Public Employees’ Retirement System.
(o) [Repealed.]70 Del. Laws, c. 601, § 4; 71 Del. Laws, c. 4, § 5; 71 Del. Laws, c. 132, § 368; 71 Del. Laws, c. 378, § 112; 73 Del. Laws, c. 310, § 23; 76 Del. Laws, c. 80, § 67; 82 Del. Laws, c. 248, § 2; 82 Del. Laws, c. 248, § 3;
If any firm entering into a contract under the authority of this chapter neglects or refuses to perform or fails to comply with the terms thereof, the agency which signed the contract may terminate the contract and proceed to award a new contract in accordance with this chapter or may require the surety on the performance bond to complete the contract in accordance with the terms of the performance bond.29 Del. C. 1953, § 6906; 54 Del. Laws, c. 106, § 2; 70 Del. Laws, c. 601, § 4;
(a) Notwithstanding the provisions of this title, all passenger vehicles, including sedans, station wagons, passenger and utility vans, off-road vehicles, police-type cars and station wagons and trucks rated 10,000 GVW or less purchased for State use by any agency/school district must be approved by the Director of the Office of Management and Budget and purchased by contracts administered by the Government Support Services. All other vehicles purchased for State use by any agency/school district must be purchased from contracts administered by the Government Support Services.
(b) Notwithstanding the provisions of this title, the purchase of special purpose vehicles by any agency/school district in excess of the restrictions set forth in subsection (a) of this section, without the written approval of the Director of the Office of Management and Budget and the Controller General, is prohibited.
(c) Used vehicles employed by any agency for undercover operations may be purchased by negotiation rather than by competitive bidding as provided in this section, provided that the negotiated prices are approved by the Director of the Office of Management and Budget and the Controller General.
(d) Except for the Governor’s car, cars rented while on out-of-state business and those cars leased by the Government Support Services, no agency/school district may lease passenger vehicles except from the Government Support Services.
(e) Passenger vehicles may not be transferred from one agency/school district to another agency/school district without the approval of the Director of the Office of Management and Budget.
(f) The procurement of vehicles by the New Castle County Police shall be exempt from the provisions of this section.
(g) The procurement of vehicles by Sussex County shall be exempt from the provisions of this section.69 Del. Laws, c. 136, § 1; 69 Del. Laws, c. 277, § 1; 70 Del. Laws, c. 601, § 3; 71 Del. Laws, c. 4, § 9; 73 Del. Laws, c. 143, §§ 5, 6; 75 Del. Laws, c. 88, §§ 16(5), 21(13), 22(4), 28, 29;
(a) An agency head may waive any or all provisions of this chapter to meet the critical needs of the agency as required by emergencies or other conditions where it is determined to be in the best interest of the agency. The agency head may determine an emergency condition exists by reason of extraordinary conditions or contingencies that could not reasonably be foreseen and guarded against. An emergency condition creates an immediate and serious need for materiel and/or nonprofessional services that cannot be met through normal procurement methods for the protection of public health, safety or property.
(1) Any procurement pursuant to this subsection shall be limited to those materials and/or nonprofessional services necessary to satisfy the emergency.
(2) Any public works project contracted pursuant to this subsection shall be subject to § 6960 of this title.
(3) Any public works project contracted pursuant to this subsection shall be subject to § 6962(d)(4)b. of this title.
(4) A copy of each emergency determination processed under this procedure shall be kept on file by the agency.
(b) In addition to the waiver provisions provided for in subsection (a) of this section, an agency head may waive any or all provisions of subchapter VI of this chapter to meet a critical need of the agency as required by an emergency or other condition where it is determined to be in the best interest of the agency. The agency head may determine a critical need exists by reason of conditions or contingencies that could not reasonably be foreseen and guarded against. A critical need creates a need for professional services that cannot be met through normal procurement methods.
(1) Any procurement pursuant to this subsection shall be limited to those professional services necessary to satisfy the critical need.
(2) A copy of each critical need determination processed under this procedure shall be kept on file by the agency.70 Del. Laws, c. 601, § 5;
(a) In addition to the powers and duties prescribed by other sections in this chapter, the Section shall do all of the following:
(1) Review and recommend improvements to the State’s procurement process.
(2) Function as the contracting agent in central or joint contracting for state agencies provided, that, at a minimum, all contracts are awarded in conformance with the requirements of this chapter. The Section is required to meet or exceed the requirements of the agencies.
(3) Function as a resource for state agencies by providing, on request, procurement information and assistance.
(4) Serve as a clearinghouse for procurement information for materiel and services for both agencies and vendors.
(5) Promulgate rules and regulations to effect this chapter. Such rules and regulations shall be promulgated according to the Administrative Procedures Act in Chapter 101 of this title and shall be approved by the Contracting and Purchasing Advisory Council.
(6) Establish procedures through which all public works contracts, which are paid in whole or in part through public funds, include provisions requiring the contractor, its agents, and employees to implement a mandatory drug testing program for all employees or agents working on the job site in nonclerical positions. Provisions governing mandatory drug testing shall be incorporated into all public works contracts and the rules governing the administration of such tests by the contractor shall be promulgated by the Director pursuant to this subsection.
(7) Administer on behalf of all agencies the State’s centralized procurement computer system or software that is used for contract development, solicitation, evaluation, and contract administration. The Section may, with written approval of the Director, authorize an agency to operate, with approved integration, a separate bidding or contract administration platform provided that all information is readily shared with the statewide portal managed by the Section.
(8) Assume such other powers, duties, and functions as the Director of the Office may assign which are not otherwise inconsistent with the laws of this State.
(b) The Office shall not charge any agency any fee for central contracting services. The Director of the Office may charge any agency of this State local government unit or volunteer fire departments within the State for which the Office makes purchases, supplies, contractual services or to which it distributes materiel a reasonable service charge. The Office shall deposit such charges into a special account to be used to effectuate the purposes of the Office.70 Del. Laws, c. 601, § 5; 75 Del. Laws, c. 88, §§ 16(5), 22; 75 Del. Laws, c. 283, § 1; 81 Del. Laws, c. 298, § 2;
All contracts covered under this chapter shall make provisions for all federal and state anti-pollution, conservation and environmental statutes, rules and regulations and county ordinances which will be involved in the execution of the contract.70 Del. Laws, c. 601, § 5; 74 Del. Laws, c. 419, § 3;
(a) In the case of small and large public works contracts awarded under § 6961, § 6962 or § 6965 of this title, the contracting agency shall require the project architect or project engineer to perform lifecycle costing analysis on equipment, systems, materiel and design elements for public works projects when said equipment, systems, materiel and design elements have the potential to reduce operating, maintenance or energy costs over the useful life of the public works project. On the basis of said analysis, the project architect or the project engineer shall incorporate in the public works contract specifications the equipment, systems, materiel, and design elements for the public works project that have the lowest total cost of ownership and operation over the useful life of the public works project. The use of lifecycle costing analysis may be waived by the agency head, in writing, if any of said equipment, systems, materiel or design elements are not appropriate for lifecycle costing analysis.
(b) In the case of contracts awarded under §§ 6922, 6923, 6924, 6925, 6933, 6934 and 6938 of this title, the contracting agency shall perform lifecycle costing analysis on equipment that has the potential to reduce operating, maintenance or energy costs over the useful life of the equipment. On the basis of said analysis, the contracting agency shall incorporate specifications in the contract for equipment that has the lowest total cost of ownership and operation over the useful life of the equipment. The use of lifecycle costing analysis may be waived by the agency head, in writing, if the equipment is not appropriate for lifecycle costing analysis. In the case of central contracts, and public works contracts awarded by the Office, only the Director may waive the use of lifecycle costing analysis.74 Del. Laws, c. 419, § 4; 75 Del. Laws, c. 88, § 16(5);
The State shall include in all formal solicitations a section stating the State does not consider the criminal record, criminal history, credit history, or credit score of an applicant for state employment during the initial application process unless otherwise required by state and/or federal law, and vendors doing business with the State are encouraged to adopt similar policies.79 Del. Laws, c. 227, § 3;