New Mexico Register / Volume XXXIII,
Issue 12 / June 21, 2022
TITLE 1 PUBLIC
FINANCE
CHAPTER 4 EXPENDITURE
OF PUBLIC FUNDS
PART 10 GOVERNING
THE APPROVAL OF CONTRACTS FOR THE PURCHASE OF PROFESSIONAL SERVICES
1.4.10.1 ISSUING AGENCY: General Services Department (GSD).
[1.4.10.1 NMAC - N, 6/21/2022]
1.4.10.2 SCOPE:
A. The contracts review bureau of the general
services department shall review and approve all professional services
contracts which result in expenditures greater than five thousand dollars ($5,000),
including applicable gross receipts tax, and all amendments to those contracts
for all state agencies except as provided in Subsections B and C of 1.4.10.2
NMAC. Contracts expending public funds
in accordance with the Procurement Code, Sections 13-1-28 to 13-1-199 NMSA 1978
as amended are included within the scope of this rule.
B. The following state agencies are
currently exempt from submitting professional services contracts and amendments
through the contracts review bureau of the general services department:
(1) state agencies within the judicial
branch of government as defined by the New Mexico Constitution, Article VI;
(2) state agencies within the legislative
branch of government as defined by the New Mexico Constitution, Article IV;
(3) state educational institutions as
defined by the New Mexico Constitution, Article XII, Section 11 and as set
forth in Section 21-1-1 through 21-16A-1 et. seq. NMSA 1978;
(4) the state fair for only those
contracts exempted pursuant to Subsection H of Section 13-1-99 NMSA 1978;
(5) the New Mexico public school
insurance authority pursuant to Subsection F of Section 22-29-6 and 22-29-8
NMSA 1978 for contracts for procuring goods or services and paying for
insurance or insurance-related services;
(6) the New Mexico mortgage finance
authority pursuant to Section 58-18-20 NMSA 1978; and
(7) other state agencies exempt by statute.
C. Pursuant to Section 6-5-9 NMSA 1978,
the secretary of the department of finance and administration may exempt a
state agency’s contracts from the general services department contracts review
bureau review and approval when the secretary of the department of finance and
administration determines that efficiency or economy so requires. a state agency seeking an exemption must:
(1) apply in writing to the secretary of
the department of finance and administration; and
(2) meet all of
the following requirements:
(a) issue its own warrants;
(b) be exempt from
prior submission of vouchers or purchase orders to the financial control
division of the department of finance and administration;
(c) receive the
majority of its money from non-general fund sources;
(d) maintain
pre-audit and post-audit fiscal accounting controls;
(e) maintain and
operate its own administrative unit for procurement and controls its own
encumbrance of funds available for professional service contracts;
(f) provide
administrative control and review of professional services contracts through
its own administrative unit; and
(g) employs in-house
counsel to prepare, review, and approve professional services contracts for
form and legal sufficiency and to advise the state agency with respect to all
applicable laws and regulations; provided, however, that the attorney general
shall also review and approve all contracts subject to Paragraph (1) of
Subsection C of 1.4.10.10 NMAC of this rule prior to approval and execution by
the state agency.
[1.4.10.2 NMAC - N, 6/21/2022]
1.4.10.3 STATUTORY
AUTHORITY:
A. Sections 13-1-118 and 13-1-125 NMSA
1978 authorize the general services department to review professional services
contracts of state agencies as to form, legal sufficiency, and budgetary
requirements if required by its regulations.
B. Section 6-5-3 NMSA 1978 provides
that before any state agency enters into a contract
expending public funds, the financial control division of the department of
finance and administration shall determine the authority for such proposed
expenditure. After the authority for the
expenditure is determined, the appropriate fund shall be shown by the financial
control division to be encumbered to the extent of the proposed
expenditure. The financial control
division may request, and the state agency shall provide, such documentation
and other information as the financial control division deems necessary to
justify the state agency’s determination of authority. The financial control
division may disapprove the proposed expenditure if it determines that the
justification is inadequate or is not substantiated by law.
C. Section 6-5-6 NMSA 1978 requires the
financial control division of the department of finance and administration to
determine that the proposed expenditure does not exceed the state agency’s
appropriation, does not exceed the periodic allotment made to the state agency
or the unencumbered balance of funds at its disposal. The state agency shall determine that a
proposed expenditure is for a public benefit and purpose consistent with the
related appropriation and is necessary to carry out the statutory mission of
the state agency prior to committing the state to the transaction.
D. Subsection E of Section 9-1-5 and Subsection
E of Section 9-17-5 NMSA 1978 provide that after notice and hearing, the
secretary of the general services department may make and adopt such reasonable
administrative and procedural rules and regulations as necessary to carry out
the duties of the general services department and its divisions.
[1.4.10.3 NMAC - N, 6/21/2022]
1.4.10.4 DURATION: Permanent.
[1.4.10.4 NMAC - N, 6/21/2022]
1.4.10.5 EFFECTIVE DATE: June 21, 2022 unless
a later date is cited at the end of a section.
[1.4.10.5 NMAC - N, 6/21/2022]
1.4.10.6 OBJECTIVE: The purpose of
this rule is to establish the procedures state agencies must follow and the
requirements state agencies must meet in drafting, entering
into, and seeking approval of professional services contracts. These procedures ensure compliance with
Sections 6-5-3, 6-5-6, 13-1-118 and 13-1-125 NMSA 1978 as amended.
[1.4.10.6 NMAC - N, 6/21/2022]
1.4.10.7 DEFINITIONS:
A. "Bureau"
means the contracts review bureau of the general services department.
B. "Contract"
means any agreement for the provision of professional services.
C. "Contract
brief" means the bureau paper form or electronic version which shall
accompany all professional services contracts and amendments submitted to the
bureau.
D. "Contractor"
as defined in Section 13-1-43 NMSA 1978 means any business having a contract
with a state agency.
E. "Department or GSD"
means the general services department.
F. "Form" means, at a
minimum, that all contracts and amendments contain the provisions required by
the bureau, including but not limited to, a scope of work consistent with the
request for proposals issued by the state agency if the contract was procured
by a request for proposals and performance measures when required and as
defined by and in accordance with the Accountability in Government Act,
Sections 6-3A-1 through 6-3A-9 NMSA 1978 and subsequent amendments.
G. "Legal sufficiency"
means, at a minimum, that all contracts and amendments contain the provisions
required by law and that all signatures required by the bureau have been
obtained.
H. "Procurement" as
defined by Section 13-1-74 NMSA 1978 means purchasing, renting, leasing, lease
purchasing or otherwise acquiring items of personal property, services or
construction and includes all procurement functions, including but not limited
to, preparation of specifications, solicitation of sources, qualification or
disqualification of sources, preparation and award of the contract, and
contract administration.
I. "Procurement Code"
means Sections 13-1-28 to 13-1-199 NMSA 1978, as amended.
J. "Professional services"
as defined by Section 13-1-76 NMSA 1978 means the services of architects,
archaeologists, engineers, surveyors, landscape architects, medical arts
practitioners, scientists, management and systems analysts, certified public
accountants, registered public accountants, lawyers, psychologists, planners,
researchers, and persons or businesses providing similar services, including
information system resources professional services, and other such services
which may be designated as professional services by a determination issued by
the state purchasing agent or designee.
K. "Regulation" as
defined by Section 13-1-80 NMSA 1978 means any rule, order, statement
or policy, as amended, issued by a state agency or a local public body that
affects persons not members or employees of the issuer.
L. "Retroactive approval to a
contract or a contract amendment" means approval of a contract or
contract amendment that was submitted to the bureau and approved by the GSD
secretary or designee pursuant to 1.4.10.13 NMAC of this rule after the
contractor has begun work pursuant to a request to perform work from a state
agency employee or public officer with authority to make such a request.
M. "Secretary GSD" means
the secretary of the general services department.
N. "Sole source contract or
amendment to sole source contract" means a contract or amendment which
fulfills the requirements of Sections 13-1-118, 13-1-126 and 13-1-126.1 NMSA
1978, as amended.
O. "State agency" means
any department, agency, commission, council, board, advisory board, committee,
or institution of the state of New Mexico, and does not include local public
bodies.
[1.4.10.7 NMAC - N, 6/21/2022]
1.4.10.8 DELEGATION OF APPROVAL AUTHORITY:
A. The bureau shall review all
contracts and contract amendments for professional services with state agencies
as to form and budgetary requirements.
B. The bureau shall consult with the
department’s legal counsel as needed regarding any issues of legal sufficiency
of a state agency’s contracts and contract amendments for professional
services.
C. The GSD secretary shall delegate, in
writing to certain members of the bureau, the authority to approve professional
services contracts which result in expenditures greater than five thousand
dollars ($5,000), including gross receipts tax, and all amendments to those
contracts except retroactive approval to contracts and contract amendments and
sole source contracts and amendments to sole source contracts as provided
herein.
[1.4.10.8 NMAC - N, 6/21/2022]
1.4.10.9 FORM AND SUBMISSION:
A. All contracts and subsequent
amendments shall be in a form and contain such provisions and signatures as
required by the bureau, including but not limited to, a scope of work
consistent with the request for proposals issued by the state agency if the
contract was procured by a request for proposals and performance measures when
required and as defined by and in accordance with the Accountability in
Government Act, Sections 6-3A-1 through 6-3A-9 NMSA 1978 and subsequent
amendments.
B. All contracts and amendments shall:
(1) be accompanied by a contract brief
being in such form and containing such information as may be required by the bureau;
(2) be accompanied by a document
prescribed by the financial control division of the department of finance and
administration showing that funds have been encumbered to the full extent of
the contract, including any amendments to that contract; if the contract term
includes more than one fiscal year, the contract must be accompanied by an
encumbrance for the current fiscal year amount or, up to the total amount of
the current appropriation available for that contract;
(3) be accompanied by a written request
for approval from the secretary of the contracting state agency or designee if
the contract is subject to Paragraph (1) of Subsection C of 1.4.10.10 NMAC of
this rule; and
(4) comply with New Mexico law regarding
indemnification and insurance.
[1.4.10.9 NMAC - N, 6/21/2022]
1.4.10.10 REVIEW
PROCEDURES:
A. State agencies must submit to the
bureau for review:
(1) sole source contracts;
(2) amendments to sole source contracts;
(3) retroactive approval to contracts;
and
(4) retroactive approval to contract
amendments.
B. Bureau review:
(1) The bureau shall review all contracts
or contract amendments for form, budgetary requirements
and compliance with the requirements of the bureau including those prescribed
on the contract brief.
(2) No contract or contract amendment
shall become binding or effective until signed and dated by a member of the
bureau with contract approval authority.
C. Other review:
(1) Prior to the bureau’s review and at
the bureau’s request, the attorney general shall review all contracts
which may violate conflict of interest provisions of the Governmental Conduct
Act, Sections 10-16-1 to 10-16-18 NMSA 1978.
(2) The bureau may submit any contract or
amendment to the attorney general or other legal counsel for review if the
bureau is aware of legal issues concerning the contract or the amendment.
[1.4.10.10 NMAC - N, 6/21/2022]
1.4.10.11 SMALL PURCHASES: A contract
for professional services having a value over five thousand dollars ($5,000) excluding
applicable gross receipts taxes, but not exceeding the amount set forth in
Section 13-1-125 NMSA 1978 except for the services of architects, landscape
architects engineers, or surveyors for state public works projects, may be
procured in accordance with the Procurement Code, Sections 13-1-28 to 13-1-199
NMSA 1978.
[1.4.10.11 NMAC - N, 6/21/2022]
1.4.10.12 SOLE SOURCE CONTRACT OR AMENDMENT TO SOLE SOURCE CONTRACT:
A. A contract may be awarded without
competitive sealed proposals, regardless of the estimated cost, when a central
purchasing office of a contracting state agency makes a written determination,
signed by the secretary of the contracting state agency or designee, which
states that a good-faith review of available sources has been conducted and
that there is only one source for the required professional services. The written determination and the dollar
amount of the contract shall be submitted to the bureau for review and approval
by the GSD secretary or designee and shall include the following information:
(1) a detailed, sufficient explanation of
the reasons, qualifications, proprietary rights, or unique capabilities that
make the prospective contractor a sole source;
(2) an explanation of the criteria
developed and specified by the state agency as necessary to perform the
contract and upon which the state agency reviewed available sources;
(3) a description of the procedures used
by the state agency in conducting a good faith review of available sources,
including without limitation, a narrative description of all steps taken by the
state agency as evidence of the good-faith review performance such as:
(a) researching
trade publications and industry newsletters;
(b) reviewing
telephone books or other advertisements;
(c) reviewing
current contract(s);
(d) contacting
similar service providers; and
(e) reviewing the
state purchasing agents vendor list; and.
(4) a list of all businesses contacted
and an explanation of why those businesses could not perform the contract, or a
reasonable explanation of why the state agency has determined that no
businesses, besides the prospective contractor, exist.
B. The bureau must obtain written
approval of the agency's sole source determination from the GSD secretary or
designee prior to executing a sole source contract or amendment to a sole
source contract.
[1.4.10.12 NMAC - N, 6/21/2022]
1.4.10.13 RETROACTIVE APPROVAL FOR A CONTRACT OR CONTRACT AMENDMENT:
A. The Procurement Code, Section
13-1-102, NMSA 1978, as amended, requires that all non-exempt procurement
(Section 13-1-98 NMSA 1978) by state agencies shall be achieved by competitive
sealed bids or competitive sealed proposals except for small purchases, sole
source procurements, emergency procurements, existing contracts
and procurements from antipoverty program business. For professional services, the proposal and
procurement process are not complete until a written contract or contract
amendment is signed by the agency and the contractor
and any other signatory required by the bureau, and is approved by the bureau
through the GSD secretary or designee.
B. For retroactive approval of
contracts and contract amendments which fulfill all of
the requirements of this rule and the Procurement Code, GSD will approve the
date requested in writing by the agency on the brief accompanying the document
as long as the requested approval date is within thirty days of the first day
of each fiscal year.
C. For retroactive approval of
contracts and contract amendments apart from the approval given pursuant to the
provisions 1.4.10.13 NMAC of this rule, GSD may grant additional retroactive
approval to a contract or contract amendment, based upon rare and exceptional
circumstances, where all of the following conditions
are met:
(1) the professional services performed
without GSD’s prior approval of the contract did not occur as the result of
repeated agency mistakes or willful misconduct;
(2) the failure to obtain GSD’s
retroactive approval will prevent the state agency from fulfilling its
statutory obligations;
(3) the state agency provides to GSD a
written, factual, detailed explanation of the matters described in Paragraphs
(1) and (2) of Subsection C of 1.4.10.13 NMAC, certified to be true by
signature of the head of the state agency;
(4) the state agency requested, through a
public officer or employee with authority to make such a request, the
contractor to perform professional services that were then actually performed
by the contractor in good faith reliance that it would be paid for those
professional services.
D. The Procurement Code, Section
13-1-182 NMSA 1978, as amended, and the department of finance and administration’s
model of accounting practices (“MAPs”) govern situations in which GSD has
denied a request for retroactive approval of a contract or contract amendment
due to the state agency’s failure to meet the requirements of Subsections B or
C of 1.4.10.13 NMAC of this rule.
[1.4.10.13 NMAC - N, 6/21/2022]
1.4.10.14 EMERGENCY PROCUREMENT: An
emergency procurement of professional services may be made under the conditions
provided in the Procurement Code. Records of any emergency procurement of
professional services, including the written determination of the basis for the
emergency procurement being relied on by the state agency as justification for
the emergency procurement, shall be maintained by the state agency for a
minimum of three years and shall be made available by the state agency to the
financial control division upon request.
[1.4.10.14 NMAC - N, 6/21/2022]
1.4.10.15 COMPLIANCE: State agencies
must comply with federal and state statutes, rules, regulations
and policies and shall have their state agency’s legal counsel review all
contracts and contract amendments certifying in writing that they are legally
sufficient prior to submission to the bureau. Wrongful or mistaken approval by the bureau
shall not be a defense to an action brought by or against the state agency on a
contract.
[1.4.10.15 NMAC - N, 6/21/2022]
1.4.10.16 RECORDS:
A. Record inspection, record retention
and record destruction relating to contracts shall be conducted in accordance
with the Inspection of Public Records Act, Sections 14-2-1 to 14-2-12 NMSA
1978; the Public Records Act, Sections 14-3-1 to 14-3-23 NMSA 1978; and with
Section 13-1-128 NMSA pertaining to sole source and emergency procurement; and
Section 13-1-116 NMSA 1978 of the Procurement Code.
B. The bureau will retain original
contracts, any subsequent amendments, and contract briefs, whether in hard copy
or electronic formats, in accordance with provisions of the Inspection of
Public Records and Public Records Act.
[1.4.10.16 NMAC - N, 6/21/2022]
1.4.10.17 RULE FILING: This rule shall
be filed in accordance with the State Rules Act, Sections 14-4-1 to 14-4-11
NMSA 1978 and shall become effective upon publication in the New Mexico
Register.
[1.4.10.17 NMAC - N, 6/21/2022]
HISTORY OF 1.4.10 NMAC:
Pre-NMAC History: The material in this part was derived from
that previously filed with the State Records Center and Archives: DFA 2.40.2
NMAC, Governing the Approval of Contracts for the Purchase of Professional Services.
Laws of 2019, Chapter 153, Section 6 transferred DFA's Rule 2.40.2 NMAC under
the authority of the General Services Department. This new Rule 1.4.10 NMAC renumbers and
therefore replaces the prior Rule pursuant to this law.
History of Repealed Material: [RESERVED]