2.4 Develop Procurement Strategy Plan

The Procurement Team should meet to develop a procurement strategy. The procurement strategy meeting is an important step in the planning process as it gives the team an opportunity to brainstorm and discuss the market research, once gathered. From this discussion, the Procurement Team will make decisions that drive the effective execution and management of the procurement through the remainder of the procurement lifecycle.

Some of the key topics that should be discussed at the strategy meeting include:

Project Scope and/or specifications
Project deliverables
Critical business requirements
Method of procurement
Contract type
Estimated schedule
Estimated cost/budget
Anticipated benefits
Performance measures (if applicable)
Alternatives
Key considerations
Constraints and Risks
Team assignments and procurement deadlines

Key elements of the Procurement Strategy Plan are described in this section. Some elements of the plan will be informed and refined as a result of the Market Research phase of the Procurement Lifecycle. The Procurement Officer should document the outcomes from the meeting in the Procurement Strategy Plan and provide the document to the Procurement Team for review.

2.4.1 Define Scope

A purchasing need must be fully understood in order to properly define the scope of the procurement. By defining the features and functions of the desired good, service, or construction, the agency begins to establish the scope of the procurement. The agency Procurement Officer must work to identify the scope by consulting with identified stakeholders as well as reviewing the state agency’s historical purchases or usage of the identified goods, services or construction. Without a clear scope, the agency will have difficulty in developing the detailed functional specifications for the requirement. After contract award, the agency project manager will be responsible to manage the defined requirement to the defined scope thus preventing an increase in contract scope or quantities, or the addition of functions or features not originally contemplated, or proposed.

A scope of work, sometimes called a statement of work, or scope of services, is a description of the requirements of services to be performed. The scope of work may include material requirements to perform the needed services. A scope of work should contain the following information:

Background of the procurement
Objectives to be achieved
Contractor’s tasks
Deliverables
Schedule
Department responsibilities

2.4.2 Identify Critical Business Requirements

The Procurement Officer must facilitate an open dialogue with the procurement stakeholders to define the critical business requirements. Critical business requirements are those essential functions that must be met by the provided goods, services, or construction. The Procurement Officer must encourage discussion and ask sufficient and pertinent questions to ensure the Procurement Team fully understands the critical business requirements.

Examples of the types of questions the Procurement Team should consider include:

Why are the goods/services needed?
Who/what area is impacted by this procurement?
What are the key functions the needed goods/services/construction must meet?
What factors will impact this purchase?
What is the estimated/approved budget?
When are the goods/services/construction needed?
Where will goods be delivered and/or services/construction performed?
How must services be provided?
What key approvals are necessary and who must provide this approval?
What specific quality or quantity needs must be considered?

Identifying the critical business requirements will improve the Procurement Officer’s results in conducting market analysis.

2.4.3 Determine the Method of Procurement

The choice of procurement method is a critical decision in purchasing goods, services, or construction. In some cases the purchasing agency may be able to utilize an existing price list or vendor list contract to meet their need. In other situations the purchasing agency may be required to consider their requirement and determine which method of procurement method best fits their need.

As stated above, prior to engaging in any procurement activities agency staff must be trained in the applicable procurement method and receive delegation to procure. The following narrative can help an agency Procurement Officer and the Procurement Team select the most appropriate procurement method that meets the agency’s needs. Each method of procurement is briefly described in sections 2.4.3.2 through 2.4.3.12. This section will discuss the elements that should be considered when selecting the method of procurement only. Actual procedures to conduct each method of procurement will be discussed in depth in Section 4.

2.4.3.1 Price and Vendor List Contracts, Exemptions and Sole Sources

2.4.3.1.1 Price List and Vendor List Contracts

Prior to engaging in a stand-alone procurement, agencies may want to check the existing price and vendor list contracts procured by the SPO. The SPO state-wide price list and vendor list contracts provide benefits to agencies by obtaining price discounts and other leveraged concessions through volume purchases. In addition, agency administrative, procurement, and contract management burdens are avoided. Rather than having to solicit individual contracts, resulting in multiple contracts for the same commodity or service, these processes are managed by the SPO, providing benefit to all agencies.

A price list contract is comprised of a group of common items or services competitively bid to set the prices contractually for a specified time period. A vendor awarded a price list contract is obligated to provide the specified goods or services, at the contracted price and terms, to all purchasing agencies committed to the contract.

A vendor list contract is comprised of qualified vendors that were competitively solicited to provide specified goods and/or services (i.e. NASPO ValuePoint Copiers, Printers & Related Devices, NASPO ValuePoint Computer Equipment and Services, etc.) for a specified period and usually at discounted rates from a vendor’s established catalog or product lists.

The decision to use an existing price/vendor list contract or to solicit pricing from other sources is at the discretion of the agency, unless mandatory. It is recommended that agencies utilize the price and vendor lists where possible because these contracts are the most efficient means of acquiring their procurement need. However, if an agency chooses to procure needed goods and services outside of the price and vendor list contracts available, it is subject to all requirements necessary to execute that procurement in accordance with the procurement method selected.

To utilize an existing price or vendor list contract:

A CPO jurisdiction or government agency must be listed in the price/vendor list contract; and
Personnel purchasing from a price/vendor list contract must take SPO Workshop SPO 190.

A searchable list of the available contracts, including instructions on how to place orders utilizing the contract, is available on the SPO website on the Price and Vendor List Contracts page.

2.4.3.1.2 Exempt by Statute or Rule

HRS §103D-102(b) provides a list of transactions and specific goods and services exempt from the requirements of HRS 103D. The following is a list of specific goods and services exempt by statute:

Services of expert witnesses for potential and actual litigation of legal matters involving the State, its agencies, and its officers and employees, including administrative quasi-judicial proceedings;
Works of art for museum or public display;
Research and reference materials including books, maps, periodicals, and pamphlets, which are published in print, video, audio, magnetic, or electronic form;
Meats and foodstuffs for the Kalaupapa settlement;
Opponents for athletic contests;
Utility services whose rates or prices are fixed by regulatory processes or agencies;
Performances, including entertainment, speeches, and cultural and artistic presentations;
Goods and services for commercial resale by the State;
Services of printers, rating agencies, support facilities, fiscal and paying agents, and registrars for the issuance and sale of the State’s or counties’ bonds;
Services of attorneys employed or retained to advise, represent, or provide any other legal service to the State or any of its agencies, on matters arising under laws of another state or foreign country, or in an action brought in another state, federal, or foreign jurisdiction, when substantially all legal services are expected to be performed outside this State;
Financing agreements under chapter 37D; and
Any other goods or services which the policy board determines by rules or the CPO determines in writing is available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State.

HRS §103D-102(b)(4)(L) notes the ability of the Procurement Policy Board to identify goods and services, determined to be exempt from HRS 103D competitive requirements, because while such goods and services may be available from multiple sources, their procurement by competitive means would be either not practicable or not advantageous to the State. HAR §3-120-4, Exhibit A provides a list of these goods and services that the Procurement Policy Board has identified as exempt by rule. Exemption for construction services is not allowable under HRS §103D-102(b)(4)(L).

This list is reviewed annually by the Procurement Policy Board, and requests to add or remove items from the list can be submitted to the Board by an agency’s CPO. An agency executing a procurement under this exemption authority must cite the specific authority and the exemption number from statute or Exhibit A on the contract, Purchase Order or pCard.

Agencies may also request prior CPO approval for exemption under HRS §103D-102(b)(4)(L) for requirements that may be available from multiple sources but procurement by competitive means would be impracticable or not advantageous to the State. Exemption requests for CPO approval must be submitted via the SPO Form SPO-007.

2.4.3.1.3 Procurements Approved for Sole Source

Pursuant to HRS §103D-306(c) and HAR §3-122-81, Procurements Approved for Sole Source, the Procurement Policy Board has approved the following list of sole source procurements that may be procured without obtaining a sole source approval, pursuant to Section HAR §3-122-82.

Rental of booth space for exhibits at conventions and trade shows when organized by a single sponsor. Criteria: When rental is available only through a single organizer or sponsor of the convention or trade show.
For the repair, replacement, installation (connection, activation or hookup), or relocation of public utility company equipment or facilities. Criteria: When the equipment or facilities are owned or controlled by utility companies such as an electric, telephone, gas, or cable television company.
Annual license renewal and maintenance for computer software. Criteria: When the license renewal and maintenance can be obtained from only a single source, normally the developer of the software.
Procurement of computer software conversions, modifications, and maintenance for existing programs from the manufacturer of the software. Criteria: When the conversion, modification, or maintenance can only be obtained from the manufacturer of the software.
Transcripts of court proceedings. Criteria: When the transcripts of court proceedings are only available from the respective assigned court reporter provided by the Judiciary.
Repair and maintenance services and supplies from the original equipment manufacturer or its designated representative; when the manufacturer or its designated representative is required to provide the services and supplies to retain the manufacturer’s warranty or guarantee. Criteria: When the services or supplies can only be obtained from the manufacturer or its designated representative to retain the manufacturer’s warranty or guarantee.
Procurement of equipment upgrades from the original manufacturer to existing equipment and information technology hardware, when the upgrades can only be obtained from the manufacturer. Criteria: When the upgrades are available only from the manufacturer.

The list is reviewed by the Procurement Policy Board biennially. When agencies conduct a purchase pursuant to this section they shall cite on the purchase order or on the contract the sole source authority as “Approved for Sole Source Procurement pursuant to Section 3-122-81, (cite sole source number from attached list), Hawaii Administrative Rules”.

Agencies may also request prior CPO approval for sole source requirements as described in 2.4.3.8.

2.4.3.2 Procurement Methods for Goods, Services, and Construction

There are six (6) different procurement methods available to a purchasing agency seeking to purchase goods, services or construction under HRS 103D. The following table provides the procurement methods and the statutory reference for each method:

Goods, Services and Construction (HRS 103D)
Small Purchase of Goods, Services or Construction	HRS §103D-305
Competitive Sealed Bidding	HRS §103D-302
Competitive Sealed Proposal	HRS §103D-303
Professional Services	HRS §103D-304
Sole Source Procurement	HRS §103D-306
Emergency Procurement	HRS §103D-307

2.4.3.3 Procurement Methods for Purchases of Health and Human Services

“Health and Human services” means direct services to communities, families, or individuals which are intended to maintain or improve health or social well-being. There are five (5) procurement methods available to a purchasing agency seeking to purchase health and human services under HRS 103F. The following table provides the procurement methods and the statutory reference for each method:

Health and Human Services (HRS 103F)
Small Purchase of Service	HRS §103F-405
Competitive Purchase of Service	HRS §103F-402
Restrictive Purchase of Service	HRS §103F-403
Crisis Purchase of Service	HRS §103F-406
Treatment Purchase of Service	HRS §103F-404

2.4.3.4 Small Purchases

Small Purchases Basics:

Notice:	Request for Quote (RFQ)
Vendor:	Bidder
Vendor’s Response:	Quote
Basis of Award:	Lowest-Price Responsive, Responsible Bidder
Legal Authority:	HRS §103D-305 and HAR 3-122 Subchapter 8
	HRS §103F-405 and HAR 3-146

The small purchases method of procurement was established to streamline the procurement process for purchases under certain dollar thresholds as discussed below. This method of procurement offers flexibility since less formal procedures are required. The small purchase method of procurement should be used in all purchases of goods, services and construction that fall under the dollar thresholds discussed below. In accordance with HRS §103D-305 and HRS §103F-405, Executive Branch agencies may make small purchases of less than $25,000 for health and human services, $100,000 for goods or services, and $250,000 for construction.

2.4.3.5 Competitive Sealed Bidding

Competitive Sealed Bid Basics:

Notice:	Invitation for Bids (IFB)
Vendor:	Bidder
Vendor’s Response:	Bid
Basis of Award:	Lowest-Price Responsive, Responsible Bidder
Legal Authority:	HRS §103D-302 and HAR 3-122 Subchapter 5

Competitive sealed bidding, or Invitation for Bids (IFB), is a formal, price-based procurement process. Competitive sealed bidding is the most commonly utilized method of procurement in the State and is most appropriate when:

Requirements can be described in finite and specific detail;
The contract will be awarded to the lowest responsive and responsible bidder;
The resulting contract will be firm-fixed price or lump sum;
Competition is readily available; and
Discussions with bidders is not necessary to select the winning bid.

For a detailed description of the processes related to completing the Competitive Sealed Bid method of procurement, refer to Section 4.3.

2.4.3.6 Competitive Sealed Proposals

Competitive Sealed Proposals Basics:

Notice:	Request for Proposals (RFP)
Vendor:	Offeror
Vendor’s Response:	Proposal
Basis of Award:	Responsible offeror whose proposal is most advantageous in accordance with the RFP criteria
Legal Authority:	HRS 103D-303 and HAR 3-122 Subchapter 6

Competitive sealed proposals, or Request for Proposals (RFP), is a formal value-based procurement process, and is most appropriate when:

The primary consideration in determining award may not be price;
The contract may be other than a fixed-price type;
The scope, specifications, and/or delivery requirements for the goods, services, or construction cannot be sufficiently described in the solicitation;
Oral or written discussions with offerors may be needed to gain a better understanding of the technical and price aspects of their proposals;
After discussions priority-listed offerors may need the opportunity to revise their proposals, including price; or
In order to determine the most advantageous offering to the State, a comparative evaluation wherein the allocation of point values between price, and other non-price factors such as quality, schedule and contractual considerations may be required and set for in the RFP.

For a detailed description of the processes related to completing the Competitive Sealed Proposal method of procurement, refer to Section 4.4.

2.4.3.7 Professional Services

Professional Services Basics:

Notice:	Request for Qualifications
Contractor:	Offeror
Contractor’s Response:	Statement of Qualifications
Basis of Award:	Most qualified offeror based on evaluation criteria
Legal Authority:	HRS §103D-304 and HAR 3-122 Subchapter 7

The Professional Services procurement method is strictly a qualifications-based method of procurement where price is not considered as part of the evaluation or selection process. This procurement method requires an agency to perform a multi-phased evaluation and selection process where price will be negotiated only after the most-qualified offeror is selected. Professional Services as defined by HRS Section §103D-104, are those services within the scope of the following professional practices:

Architecture
Landscape architecture
Professional engineering
Land surveying
Real property appraisal
Law
Medicine((For executive CPO jurisdiction, health and human services provided to the public as defined in HRS Chapter 103F shall be procured pursuant to HRS 103F, Professional services may not be used.))
Accounting
Dentistry((For executive CPO jurisdiction, health and human services provided to the public as defined in HRS Chapter 103F shall be procured pursuant to HRS 103F. Professional services may not be used.))
Public finance bond underwriting
Public finance bond investment banking

Any other practice defined as professional by the laws of this State or the professional and scientific occupation series contained in the United States Office of Personnel Management’s Qualifications Standards Handbook.

Architectural and engineering services furnished by licensees under HRS Chapter 464 shall be procured by this method.((Only if the emergency requirements of HRS §103D-307 are met, professional design services may also be procured utilizing the emergency procurement method.)) Other professional services may be procured in accordance with this process but may also be procured using other available methods of procurement. For a detailed description of the Professional Services procurement method, refer to Section 4.5.

2.4.3.8 Sole Source Procurements

Sole Source Basics:

Notice:	Request for Quote/Proposal
Vendor:	Sole Source
Vendor’s Response:	Quote or Proposal
Basis of Award:	Responsible source at a fair and reasonable price((In accordance with HRS §103D-312 and HAR §3-122-123 sole source awards over $100,000 require the offeror to submit certified cost and pricing data.))
Legal Authority:	HRS §103D-306 and HAR 3-122 Subchapter 9

For any goods, services or construction not contained on the list of Procurements Approved for Sole Source set forth in HAR 3-122, agencies are required to seek CPO approval by providing justification for the sole source. A Sole Source procurement is a procurement where, based on market research, there is only one (1) supplier of a good, service or construction, brought about by the unique nature of the requirements, supplier, or market conditions. Examples of sole source procurements may include, but are not limited to:

Proprietary items;
Items with compatibility to existing equipment; or
Public utility repair or construction that can only be provided by the utility company.

Examples of procurements that DO NOT meet the justification for a sole source include, but are not limited to:

Brand name: an item is referred to by an exact brand, but there are other brands that qualify as “equals”;
Restrictive Specification: an item that is unique but available from multiple suppliers, (subject to CPO approval and bidding);
Incumbent/current contractor: an incumbent contractor/vendor who has been furnishing services to an agency does not, by itself, mean that contractor is the only source for the requirement; or
Loss of funding: a potential loss of funds at the end of a fiscal year.

Procurement Teams should perform extensive market research, as discussed in Section 3, prior to determining to utilize a sole source procurement method. Sole sources are extremely unusual and are rarely approved by the CPO. If, after conducting market research, the team determines there is only one source for the goods, services, or construction required, then procedures set forth in Section 4 should be followed.

For The Executive Branch:

For any goods, services or construction not contained on the list of Procurements Approved for Sole Source set forth in HAR 3-122, Executive Branch departments are required to seek CPO approval by completing Form SPO-001, Notice and Request for Sole Source Procurement, providing justification for the sole source. The form must be signed by the HOPA and approved by the CPO prior to issuing a contract, P.O. or pCard payment.

Upon receipt of Form SPO-001, the CPO will post the form to SPO’s notices website for seven (7) days to allow vendors the opportunity to review and submit any inquiries or objections to the Request for Sole Source. If in that time no objections are received, the CPO will review the justification for the Sole Source and, if approved, return it to the agency to execute the contract. If objections are received, the CPO will place the request on hold, review the objection, and provide a written determination to the person submitting the objection and/or the requesting agency.

The CPO makes the final determination regarding the approval or disapproval of a request. If the CPO disapproves a request, the purchasing agency shall use an appropriate method of procurement to obtain the requirement.

Sole source procurements are limited to a maximum performance period of one (1) year. In accordance with HAR §3-122-123, the Procurement Officer agency is required to obtain certified cost or pricing data for sole source procurements exceeding $100,000. Reference Section 3.5 for instructions on requesting and evaluating cost and pricing data.

2.4.3.9 Emergency Procurements

Emergency Purchase Basics:

Notice:	Request for Quote (RFQ)
Vendor:	Bidder
Vendor’s Response:	Quote
Basis of Award:	As required by the emergency situation
Legal Authority:	HRS §103D-307 and HAR 3-122 Subchapter 10

HRS §103D-307, states that in the case of an emergency, an agency is given latitude to meet the purchasing needs generated by the emergency situation without having to utilize the normal competitive procurement requirements. Although an agency is not required to utilize a competitive procurement method, it is recommended that the agency seek as much competition as possible considering the emergency circumstances.

For an agency’s procurement to meet the definition of an emergency procurement under HRS §103D-307, it must meet ALL of the following three (3) conditions:

A situation of an unusual or compelling urgency creates a threat to life, public health, welfare, or safety by reason of major natural disaster, epidemic, riot, fire, or such other reason as may be determined by the head of that purchasing agency.
The emergency condition generates an immediate and serious need for goods, services, or construction that cannot be met through normal procurement methods and the government would be seriously injured if the purchasing agency is not permitted to employ the means it proposes to use to obtain the goods, services, or construction.
Without the needed good, service, or construction, the continued functioning of government, the preservation or protection of irreplaceable property, or the health and safety of any person will be seriously threatened.

An emergency procurement may only be used to address the immediate needs brought about by the emergency condition, and may not be used for subsequent non-emergency related procurement needs. Lack of planning or the potential loss of funds at the end of a fiscal year does not constitute an emergency condition.

For the Executive Branch:

Prior to the procurement, or if time does not permit, as soon as practicable thereafter, the HOPA responsible shall complete and submit Form SPO-002, Emergency Procurement, providing justification for the Emergency Procurement and requesting CPO approval.

It is recommended that the affected agency to inform the SPO of the emergency situation as soon as is practicable to ensure the greatest level of coordination and support necessary to address the procurement needs brought about by the emergency condition.

2.4.3.10 Competitive Purchase of Service – Health and Human Services

Competitive Purchase of Service Basics:

Notice:	Request for Proposals (RFP)
Provider:	Applicant
Provider’s Response:	Proposal
Basis of Award:	Most advantageous to the State
Legal Authority:	HRS §103F-402 and HAR 3-143

HRS §103F-402 is specifically used for the purchase of services from health and human services providers. It is a formal, value-based procurement process and is the most frequently used procurement method for purchasing health and human services.

For a detailed description of the processes related to completing the Competitive Purchase of Services method of procurement, refer to Section 4.6.

2.4.3.11 Restrictive Purchase of Service – Health and Human Services

Restrictive Purchase of Service Basics:

Notice:	Request of Restrictive Purchase of Service
Vendor:	Sole Provider
Vendor’s Response:	Quote
Basis of Award:	HRS 103F-403 and HAR 3-144

HRS 103F-403, Restrictive Purchase of Services is a procurement of health and human services where there is only one (1) provider of the services, brought about by geography, the unique nature of the service need, or funding limitations. Examples of Restrictive Purchase of Services procurements include, but are not limited to:

Need for a service in a geographic area available from only one provider;
Need for a service with a unique cultural approach designed for a limited target group available from only one provider; or
Only one provider satisfies limitations imposed by the funding source.

Examples of procurements that DO NOT meet the justification for Restrictive Purchase of Services include, but are not limited to:

Incumbent provider or organization: the incumbent or current provider that has been furnishing services to an agency does not, by itself, render the provider the only source for the required service;
Loss of funding: the potential loss of funds at the end of a fiscal year; or
Failure to plan: a purchasing agency’s failure to plan ahead sufficiently in order to issue a request for proposals.

For the Executive Branch:

In order to procure using the Restrictive Purchase of Services method, the agency shall complete Form SPOH-500, Notice of and Request for Restrictive Purchase of Service, providing justification for the restrictive purchase. The form must be signed by the HOPA and submitted to the CPO for approval prior to completing the procurement.

Upon receipt of Form SPOH-500, the CPO will post the request to SPO website for a minimum of seven (7) days to allow providers the opportunity to review and submit any inquiries or Notice of Protest. If in that time no protests are received, the CPO will review and take action on the request. If approved, agencies shall not award a contract until two (2) days after the protest submittal deadline.

If a protest is received, the CPO will place the request on hold, until the protest is settled or resolved. The protest shall be handled in accordance with processes detailed in HAR 3-148. Protest is also covered in Section 4.8.2.2. Based on the outcome of the protest, the CPO makes the final determination regarding the approval or disapproval of a request.

If the CPO disapproves a request, the purchasing agency shall choose an appropriate method of procurement.

2.4.3.12 Crisis Procurements – Health and Human Services

Crisis Procurement Basics:

Notice:	Request for Crisis Purchase of Service
Vendor:	Provider
Vendor’s Response:	Quote
Basis of Award:	Meets criteria for Crisis Purchase of Service
Legal Authority:	HRS §103F-406 and HAR 3-147

A crisis is defined as a condition of domestic violence, physical or mental illness or injury, homelessness, lack of food, or such other reason:

that seriously threatens life, the health, or the safety of any person;
where the condition generates an immediate and serious need for health or human services; and
where the need cannot be met through services available from the departments of health or human services, or under other available procurement methods available in HRS 103F.

The crisis method of procurement may only be used to meet current needs generated by the crisis and cannot exceed six months or, with CPO approval, for twelve months.

The HOPA shall submit a written determination to the CPO for approval that a crisis condition exists. If submission of the determination is not practicable prior to making the purchase, the HOPA may conclude the purchase and submit the request for approval after-the-fact. The determination shall include:

Nature of the crisis condition
Proposed provider name
Expenditure amount
Service description
Reason for provider selection; and
Other relevant information.

For the Executive Branch:

Prior to the procurement or, if time does not permit, as soon as practicable thereafter, the HOPA responsible shall complete and submit Form SPOH-600, Request for Crisis Purchase of Service, providing justification for the Crisis Purchase and requesting CPO approval.

It is recommended that the affected agency contact SPO to inform them of the crisis situation as soon as is practicable to ensure the greatest level of coordination and support necessary to address the procurement needs brought about by the crisis.

2.4.4 Cooperative Purchasing

Upon request of the CPO, any state or county agency may participate in, sponsor, conduct, or administer a cooperative agreement for goods and services with any other state or county agency in accordance with HRS §103D-801 and HAR 3-128. The purchases shall be made on the same terms and conditions, and under the same rules and regulations as per the agreement entered into between the participants. At this stage in the procurement process, if there is a multi-agency or state-wide need for this requirement the agency should consider entering into a cooperative purchase agreement to leverage economies of scale and to increase competition and savings.

Procurement by cooperative purchasing agreements shall be conducted in compliance with the requirements of HRS 103D, unless the procurement is initiated by an external to Hawaii procurement entity. If the purchasing agency is going to work with an external purchasing unit, it must comply with public notice requirements for the procurement method, and must ensure that the external public entity does as well, listing the purchasing agency as a participating entity.

Intra-state cooperative purchase agreements must provide that:

A procurement unit shall be designated as lead agency for the procurement;
An order for any good or service shall be placed on an as needed basis by the participating procurement units in accordance with the terms and conditions of the agreement;
Payment for any good or service shall be the exclusive responsibility of the procurement unit which placed the order;
Inspection and acceptance of any good or service shall be the exclusive obligation of the procurement unit which placed the order;
The lead agency for the procurement may terminate the cooperative agreement with a procurement unit for failure of that unit to comply with the terms of the contract;
The exercise of any warranty rights attached to any good or service obtained through a purchase order shall be the exclusive right of the procurement unit which placed the order; and
Failure of a procurement unit that is procuring the good or service from a cooperative agreement contract to secure performance from the contractor pursuant to its terms and conditions, may not necessarily preclude the remaining procurement units from obtaining goods and services from the cooperative agreement contract.

Purchasing entities should note that they are not able to enter into an existing cooperative purchasing agreement, known as piggybacking, including contracts issued by the federal government or other state or local government without prior public notice of an intent to participate.