Appendix H
Department
of Administrative Services [11]
CHAPTER 106
PURCHASING
STANDARDS FOR SERVICE CONTRACTS
11—106.1(8A) Authority and scope. This chapter is adopted for the purpose of establishing a system
of uniform standards for purchasing services in state government. The department of administrative
services has adopted these uniform standards in cooperation with other state agencies.
The rules address when state agencies must use competitive selection to purchase services and when
it is acceptable to use a sole source or emergency procurement instead of a competitive selection process.
The rules provide a mechanism that allows state agencies to use an informal competitive process for
purchases of services when the estimated annual value of the contract is less than $50,000 and when the
estimated value of the multiyear contract in the aggregate, including renewals, is less than $150,000. The
rules also include guidance to state agencies about additional requirements and procedures they should
follow when purchasing services.
11—106.2(8A) Applicability. This chapter shall apply to all state agencies purchasing services unless
otherwise provided by law.
106.2(1) When a state agency that is also a “participating agency” as defined by rule 11—105.2(8A)
intends to procure “information technology services” as defined by rule 11—105.2(8A), the provisions
of rule 11—105.10(8A) shall also apply to procurement of the services.
106.2(2) When a state agency that is subject to the applicability requirements of rule 11—105.1(8A)
intends to procure “services of general use” as defined by rule 11—105.2(8A), the provisions of
11—Chapter 105 shall apply to the procurement.
11—106.3(8A) Definitions. For the purposes of this chapter, the following definitions shall apply:
“Agency” or “state agency” means a unit of state government, which is an authority, board,
commission, committee, council, department, examining board, or independent agency as defined in
Iowa Code section 7E.4, including but not limited to each principal central department enumerated in
Iowa Code Supplement section 7E.5. However, “agency” or “state agency” does not mean any of the
following:
1. The office of the governor or the office of an elective constitutional or statutory officer.
2. The general assembly, or any office or unit under its administrative authority.
3. The judicial branch, as provided in Iowa Code section 602.1102.
4. A political subdivision of the state or its offices or units, including but not limited to a county,
city, or community college.
“Competitive selection” means a formal or informal process engaged in by a state agency to
compare provider qualifications, terms, conditions, and prices of equal or similar services in order to
meet the objective of purchasing services based on quality, performance, price, or any combination
thereof. During a competitive selection process, a state agency may weigh the relevant selection criteria
in whatever fashion it believes will enable it to select the service provider that submits the best proposal.
The lowest priced proposal is not necessarily the best proposal.
“Duration” means the specific length of a service contract.
“Emergency” includes, but is not limited to, a condition:
1. That threatens public health, welfare or safety; or
2. In which there is a need to protect the health, welfare or safety of persons occupying or visiting
a public improvement or property located adjacent to the public improvement; or
3. In which the state agency must act to preserve critical services or programs or in which the need
is a result of events or circumstances not reasonably foreseeable.
“Emergency procurement” means an acquisition of a service or services resulting from an emergency
need.
“Formal competition” means a competitive selection process that employs a request for proposal or
other competitive selection process authorized by applicable law resulting in a service contract.
Ch 106, p.2 Administrative Services[11] IAC 7/2/08
“Informal competition” means a streamlined competitive selection process in which a state agency
makes an effort to contact at least three prospective service providers identified by the purchasing state
agency as qualified to perform the work described in the scope of work to provide bids or proposals to
provide the services the state agency is seeking.
“Intergovernmental agreement” means an agreement for services between a state agency and
any other governmental entity whether federal, state, or local and any department, division, unit or
subdivision thereof.
“Private agency” or “private agencies” means an individual or any form of business organization
authorized under the laws of this or any other state or under the laws of any foreign jurisdiction.
“Selection documents” means documents prepared for a competitive selection by a state agency
to purchase services. Selection documents may include requests for proposal, invitations to bid,
invitations to bid with best value considerations, invitations to qualify, requests for strategy, auctions,
reverse auctions, negotiated selection, or any other type of document a state agency is authorized to
use that is designed to advise service providers that a state agency is interested in procuring services
for state government.
“Service” or “services” means work performed for a state agency or for its clients by a service
provider and includes, but is not limited to:
1. Professional or technical expertise provided by a consultant, advisor or other technical or
service provider to accomplish a specific study, review, project, task, or other work as described in the
scope of work. By way of example and not by limitation, these services may include the following:
accounting services; aerial surveys; aerial mapping and seeding; appraisal services; land surveying
services; construction manager services; analysis and assessment of processes, programs, fiscal
impact, compliance, systems and the like; auditing services; communications services; services of
peer reviewers, attorneys, financial advisors, and expert witnesses for litigation; architectural services;
information technology consulting services; services of investment advisors and managers; marketing
services; policy development and recommendations; program development; public involvement
services and strategies; research services; scientific and related technical services; software development
and system design; and services of underwriters, physicians, pharmacists, engineers, and architects; or
2. Services provided by a vendor to accomplish routine functions. These services contribute
to the day-to-day operations of state government. By way of example and not by limitation, these
services may include the following: ambulance service; charter service; boiler testing; bookkeeping
service; building alarm systems service and repair; commercial laundry service; communications
systems installation, servicing and repair; court reporting and transcription services; engraving service;
equipment or machine installation, preventive maintenance, inspection, calibration and repair; heating,
ventilation and air conditioning (HVAC) system maintenance service; janitorial service; painting; pest
and weed control service; grounds maintenance, mowing, parking lot sweeping and snow removal
service; towing service; translation services; and travel service.
“Service contract” means a contract for a service or services when the predominant factor, thrust,
and purpose of the contract as reasonably stated is for the provision or rendering of services. When there
is a contract for both goods and services and the predominant factor, thrust, and purpose of the contract as
reasonably stated is for the provision or rendering of services with goods incidentally involved, a service
contract exists and these rules apply. “Service contract” includes grants when the predominant factor,
thrust, and purpose of the contract formalizing the grant is for the provision or rendering of services.
“Service provider” means a vendor that enters into a service contract with a state agency.
“Sole source procurement” means a purchase of services in which the state agency selects a service
provider without engaging in a competitive selection process.
11—106.4(8A) Intergovernmental agreements. In the event another governmental entity has
resources available to supply a service sought by a state agency, the state agency may enter into an
intergovernmental agreement with the other governmental entity and is not required to use competitive
selection.
IAC 7/2/08 Administrative Services[11] Ch 106, p.3
11—106.5(8A) Use of competitive selection. State agencies shall use competitive selection to acquire
services from private entities when the estimated annual value of the service contract is equal to or greater
than $5,000 or when the estimated value of the multiyear service contract in the aggregate, including any
renewals, is equal to or greater than $15,000 unless there is adequate justification for a sole source or
emergency procurement pursuant to rule 106.7(8A) or 106.8(8A) or another provision of law.
106.5(1) When the estimated annual value of the service contract is equal to or greater than $50,000
or the estimated value of the multiyear service contract in the aggregate, including any renewals, exceeds
$150,000, a state agency shall use a formal competitive selection process to procure the service.
106.5(2) When the estimated annual value of the service contract is equal to or greater than $5,000
but less than $50,000 and the estimated value of the multiyear service contract in the aggregate, including
any renewals, does not exceed $150,000, a state agency, in its sole discretion, shall use either a formal
or informal competitive selection process to engage a service provider.
106.5(3) The requirement to use competitive selection to select a service provider when the estimated
annual value of the service contract is equal to or greater than $5,000 or when the estimated value of
the multiyear service contract in the aggregate, including renewals, is equal to or greater than $15,000
applies even when the state agency purchases services from a private entity and designates the contract
it enters into with the private entity as a 28E agreement.
11—106.6 Reserved.
11—106.7(8A) Sole source procurements.
106.7(1) When justified. A sole source procurement shall be avoided unless clearly necessary and
justifiable. A state agency may purchase services using a sole source procurement under the following
circumstances:
a. A state agency determines that one service provider is the only one qualified or eligible or is
quite obviously the most qualified or eligible to perform the service; or
b. The services being purchased involve work that is of such a specialized nature or related to a
specific geographic location that only a single source, by virtue of experience, expertise, proximity to
the project, or ownership of intellectual property rights, could most satisfactorily provide the service; or
c. A state agency is hiring a service provider to provide peer review services for a professional
licensing board pursuant to Iowa Code chapter 272C; or
d. A state agency is hiring the services of experts, advisors, counsel or consultants to assist in
any type of legal proceeding including but not limited to testifying or assisting in the preparation of
quasi-judicial or judicial proceedings; or
e. The federal government or other provider of funds for the services being purchased (other than
the state of Iowa) has imposed clear and specific restrictions on the state agency’s use of the funds in a
way that restricts the state agency to only one service provider; or
f. Applicable law requires, provides for, or permits use of a sole source procurement.
106.7(2) Special procedures required for sole source procurements.
a. When the annual value of the service contract exceeds $5,000 or when the estimated value of
the multiyear service contract in the aggregate, including renewals, is equal to or greater than $15,000,
the head of a state agency or designee shall sign the sole source contract or the amendment. Use of
sole source procurement does not relieve a state agency from negotiating a fair and reasonable price and
thoroughly documenting the procurement action.
b. When the annual value of the service contract exceeds $5,000 or when the estimated value of
the multiyear service contract in the aggregate, including renewals, is equal to or greater than $15,000,
a state agency shall be required to complete a sole source justification form. The director of the state
agency shall sign the sole source justification form. The claim for the first payment on a contract requires
a copy of the signed original contract, a copy of the precontract questionnaire, a copy of the sole source
justification form, and an original invoice or original claimant signature.
c. The contract for the sole source procurement shall comply with 11 IAC 107.4(8,8A), uniform
terms and conditions for service contracts, or 11 IAC 107.5(8,8A), special terms and conditions.
Ch 106, p.4 Administrative Services[11] IAC 7/2/08
11—106.8(8A) Emergency procurements.
106.8(1) When justified. An emergency procurement shall be limited in scope and duration to meet
the emergency. When considering the scope and duration of an emergency procurement, the state agency
may consider price and availability of the service procured so that the state agency obtains the best value
for the funds spent under the circumstances. State agencies should attempt to acquire services with as
much competition as practicable under the circumstances.
106.8(2) Special procedures required for emergency procurements.
a. The head of a state agency shall sign all emergency contracts and amendments regardless
of value or length of term. If the head of a state agency is not available, a designee may sign an
emergency contract or amendment. Use of an emergency procurement does not relieve a state agency
from negotiating a fair and reasonable price and documenting the procurement action.
b. When the value of the service contract exceeds $5,000, a state agency shall be required to
complete an emergency justification form. The director of the state agency or the director’s designee
shall sign the emergency justification form.
c. If an emergency procurement results in the extension of an existing contract that contains
performance criteria, the contract extension shall comply with 11 IAC 107.4(8,8A), uniform terms and
conditions for service contracts, or 11 IAC 107.5(8,8A), special terms and conditions.
11—106.9(8A) Informal competitive procedures.
106.9(1) When utilizing an informal competition as defined in rule 106.3(8A), the state agency may
contact the prospective service providers in person, by telephone, fax, E-mail or letter. When the state
agency is not able to locate three prospective service providers, the state agency must justify contacting
fewer than three service providers. The justification shall be included in the contract file.
106.9(2) A state agency may send copies of the scope of work to service providers that it has
identified as qualified to perform the work described in the scope of work.
11—106.10 Reserved.
11—106.11(8A) Duration of service contracts.
106.11(1) Each service contract signed by a state agency shall have a specific starting and ending
date.
106.11(2) State agencies shall not sign self-renewing service contracts that do not have a specific
ending date.
106.11(3) A service contract should be competitively selected on a regular basis so that a state
agency obtains the best value for the funds spent, avoids inefficiencies, waste or duplication and may take
advantage of new innovations, ideas and technology. A service contract, including all optional renewals,
shall not exceed a term of six years unless the state agency obtains a waiver of this provision pursuant
to rule 106.16(8A).
11—106.12(8A) Additional procedures or requirements.
106.12(1) State agencies, whether utilizing informal or formal competition, shall provide a notice of
each procurement for services to the targeted small business Web page located at the Iowa department
of economic development’s Web site in conformance with Iowa Code section 73.16(2).
106.12(2) Except in an emergency procurement, services shall not be performed pursuant to a service
contract for a state agency until all parties to the contract have signed the contract.
106.12(3) At the conclusion of the competitive selection process, all service providers shall be
required to sign a service contract.
106.12(4) Each state agency shall maintain a contracting file for each service contract signed by the
state agency.
11—106.13 and 106.14 Reserved.
IAC 7/2/08 Administrative Services[11] Ch 106, p.5
11—106.15(8A) Exclusions and limitations.
106.15(1) These rules do not apply to contracts for both goods and services when the predominant
factor, thrust, and purpose of the contract as reasonably stated is for the purchase of goods with service
incidentally involved. However, in no event shall state agencies designate contracts as contracts for
goods to avoid the application of these rules.
106.15(2) Nothing in this chapter is intended to supplant or supersede the requirements adopted by
the department of administrative services relating to the processing of claims. State agencies entering into
personal services contracts should refer to procedure 240.102, Miscellaneous—Services Contracting, of
the department of administrative services, state accounting enterprise policy and procedure manual.
11—106.16(8A) Waiver procedure.
106.16(1) For the purpose of this chapter, a “waiver or variance” means an action by the director
of the department of administrative services that suspends, in whole or in part, the requirements or
provisions of a rule in this chapter as applied to a state agency when the state agency establishes good
cause for a waiver or variance of the rule. For simplicity, the term “waiver” shall include both a “waiver”
and a “variance.”
106.16(2) Requests for waivers. A state agency seeking a waiver shall submit a written request for
a waiver to the director. The written request shall identify the rule for which the state agency seeks a
waiver, the contract or class of contracts for which the state agency seeks a waiver, and the reasons that
the state agency believes justify granting the waiver.
106.16(3) Criteria for waiver. In response to a request for a waiver submitted by a state agency, the
director may issue an order waiving in whole or in part the requirements of a rule in this chapter if the
director finds that the state agency has established good cause for waiving the requirements of the rule.
“Good cause” includes, but is not limited to, a showing that a requirement or provision of a rule should
be waived because the requirement or provision would likely result in an unintended, undesirable, or
adverse consequence or outcome. An example of good cause for a waiver is when a contract duration
period of longer than six years is more economically feasible than a six-year contract in light of the
service being purchased by the state agency.
11—106.17(8A) Effective date. This chapter shall apply to service contracts with a starting date on or
after October 1, 2002.
These rules are intended to implement Iowa Code Supplement sections 8A.101, 8A.104, 8A.301,
8A.302, and 8A.311.
[Filed 8/2/02, Notice 4/3/02—published 8/21/02, effective 10/1/02]
[Filed emergency 8/29/03—published 9/17/03, effective 9/2/03]
[Filed 6/2/04, Notice 4/28/04—published 6/23/04, effective 7/28/04]
[Filed 10/22/04, Notice 9/15/04—published 11/10/04, effective 12/15/04]
CHAPTER 107
UNIFORM TERMS AND CONDITIONS FOR SERVICE CONTRACTS