CONTRACTS EXEMPT FROM CALIFORNIA STATE CONTRACTS REGISTER ADVERTISING AND COMPETITIVE BIDDING - 1233

Competitive bidding is required unless there is a legally authorized basis for bid exemption. Key exemption categories are identified below.

A. Statutory Exemptions

1. Contracts of less than $5,000 (PCC §§ 10335(a), 10335.5(c)(5)).

2. Contracts of less than $5,000 where only per diem or travel expenses, or a combination thereof, are to be paid (PCC § 10335(a)).

3. Emergency contracts. The work or service is for the immediate preservation of the public health, welfare, safety, or protection of state property (PCC § 1102, 10340).

4. Interagency agreements. Contracts with other California state agencies, and California State University and University of California campuses (PCC §§ 10335(a),      10340(b)(3); GC § 11256; see also SCM 1, section 3.03.).

5. Contracts with other public entities, including contracts with another state, local, or federal agency, auxiliaries of CSU or the California community colleges; or an organization acting as a governmental agency under a joint powers agreement (PCC §§10335(a), 10340(b)(3); see also SCM 1, section 3.06.A).

6. Contracts solely for the purpose of obtaining expert witnesses for litigation (PCC § 10335.5(c)(3).

7. Contracts for legal defense, legal advice, or legal services by an attorney or the attorney’s staff (PCC § 10335.5(c)(4)).

8. Community Based Rehabilitation Program (CRP). Contracts with business entities operating Community Based Rehabilitation Program (CRP), that are justified under one of the exceptions in GC § 19130(b), and that meet the criteria established by Welfare and Institutions Code §1 9404 (PCC §10340). Note: Contracts with CRPs that are justified under GC § 19130(a) are required to be competitively bid.

9. Small Business/Disabled Veteran Business Enterprise (SB/DVBE) Option (GC § 14838.5; PCC §§ 10335.5(c)(6), 10340(b)(6)).

a. This option allows for an award under the following conditions:

1) The contract is awarded to a certified SB, micro-business or DVBE;

2) The contract award is greater than $5,000 and less than $250,000; and

3) Quotes were received from at least two certified SBs or micro-businesses; or two certified DVBEs.

b. An award based on receiving only one quote is not permitted under this
     method.

c. Mixing quotes (e.g. one SB and one DVBE) is not permitted under this method.

d. The code does not expressly require award to the low quote, however, if award
     will be made by other than low quote, the agency must document the business
     reasons and cost reasonableness basis for selecting the other quote.

e. No particular format or timing is required under this option. Agencies have
     discretion as to how to obtain the quotes. Agencies should provide vendors
     sufficient information about the services on which the vendors can formulate a
     quote, including copy of the proposed contract (e.g. scope, payment provisions,
     and terms).

f. The SB preference is not applicable under this method.

g. There is no protest right for this method. (GC §14838.5) Therefore agencies
     should not cite protest provisions when soliciting quotes.

h. Use of this method is capped at $250,000 for the entire contract term, including
     any option years and/or amendments. If an agency believes the contract may
     exceed $250,000, they should use a different solicitation method, such as an
     IFB or RFP. If quotes come in over $250,000, the agency would need to
     resolicit, either scaling down the project to lower the quotes or using a different
     solicitation method.

i. For public works, the dollar range for which this two-quote method can be used
     is $5,000 to $270,000 (or other project cost limit amount as may periodically be
     issued by the Director of Finance pursuant to PCC § 10105) (GC § 14838.7).

10. Contracts for the development, maintenance, administration, or use of licensing
       or proficiency testing examinations (PCC § 10340(b)(7)).

11. Other Specific Statutory Exemption. The STD 215 should identify the statutory
        citation supporting the exemption.

B. DGS Approved Exemptions (PCC §10348)

1. Non-Competitive Bid (NCB) or Special Category Request (SCR)

a. An NCB transaction (formerly “sole source”) is a contract for goods or services
     or both when only a single business enterprise is afforded the opportunity to
     provide the specified goods or services.

b. Executive Order on NCB
     The Governor’s Executive Order, D-02-55, issued effective May 20, 2002,
     rescinded the previous sole source Executive Order W-103-94 and all management
     memos related to that Executive Order.

c. The NCB form with instructions and signature requirements can be found on the
     DGS/PD website. See also SCM volume 2 (SCM 2).

d. An SCR is similar to an NCB but involves a group of related contracts rather than a
     single contract. The SCR form and further information can also be found on the
     DGS/Procurement Division website and in SCM 2.

2. DGS Categorical Exemptions (PCC § 10348; historical references: SAM Section
     1233, Management Memo (MM) 03-10).

a. Services contracts using a DGS Leverage Purchase Agreement;

b. Subvention and local assistance contracts as defined in SCM 1, section 3.17.
     This exception applies only when services are provided to the public and not
     specifically to a state agency;

c. Maintenance agreements under $250,000 per year for equipment that is under
     documented warranty, or where there is only one authorized or qualified
     representative or where there is only one distributor in the area for parts and
     services under $250,000.00 per year;

d. Contracts where the state is unable to compete and select a different contractor
     because a contractor has already been selected by a federal, state, city, county,
     or other regulatory entity to perform a service in a specific geographical area (e.g.,
     refuse and/or sewage disposal contracts where there is an exclusive franchise
     agreement that has no exception for the state);

e. Public entertainment contracts for state-sponsored fairs and expositions;

f. Contracts that can only be performed by a public entity as defined in
    Unemployment Insurance Code Section 605(b);

g. Contracts for conference or meeting facilities, including room accommodations for
     conference attendees, not to exceed $250,000;

h. Contracts for ambulance services (including but not limited to 911) when there is
     no competition because the contractor is designated by a local jurisdiction for the
     specific geographic region; (historical reference: MM 05-04.)

i. Contracts for emergency room hospitals, and medical groups, physicians, and
     ancillary staff providing services at emergency room hospitals, when a patient is
     transported to a designated emergency room hospital for the immediate
     preservation of life and limb and there is no competition because the emergency
     room hospital is designated by a local emergency medical services agency and
     medical staffing is designated by the hospital. This exemption covers only those
     services provided in response to the emergency room transport; (historical
     reference: MM 05-04.)

j. Contracts with health maintenance organizations (HMOs) through a cooperative
     agreement with the Centers for Medicare and Medicaid Services (CMS) to pay
     monthly premium payments for medical/Medicare eligible members, where
     services are essential or necessary for health and safety;

k. Proprietary subscriptions, proprietary publications and/or technical manuals
     regardless of media format, up to $250,000. This includes access to pre-existing
     proprietary research data through a non-IT services contract, however
     “subscription” is not intended to include the performance of any personal
     services (such as, but not limited to, consulting, advice, research);

l. Rental of proprietary postage meters if they are interfaced and intermembered
     with existing mailing equipment and there is only one authorized manufacturer’s
     branch or qualified dealer representative providing services for a manufacturer in
     a specified geographical area. This exemption applies only in circumstances
     where annual postage meter rental services are less than $100,000;

m. Departmental memberships in professional organizations provided it is solely a
     membership and does not include the performance of any personal services.
     Note: Memberships for represented employees are governed by applicable
     collective bargaining agreements and memberships for non-represented
     employees are governed by CalHR rules; (See SCM 1, section 3.23.)

n. Contracts for non-IT services training for state personnel if the cost of the training
     contract does not exceed $50,000 and the cost of multiple training contracts with
     a single contractor does not exceed $50,000 cumulatively in any 12-month
     period. (Historical reference: MM 11-05.) The exemption is for pre-existing
     training courses; it does not cover development of training or other personal or
     consulting services. Agencies shall not split contracts to avoid competitive
     bidding or other contract requirements. Agencies with recurring training needs
     should assess the cumulative amounts departmentally and generally should go
     out to bid if there are ongoing and/or department-wide needs.