4115. State Committee for the Purchase of Products and Services of Persons with Severe Disabilities

Chapter 4115-1 Definitions

The following definitions apply to Chapters 4115-1 to 4115-7 of the Administrative Code:

(A) (1) "A person with a severe disability" for the purpose of receiving employment or vocational training pursuant to sections 4115.31 to 4115.35 of the Revised Code means an individual:

(a) Who has a severe physical, visual or mental disability resulting from an injury, disease, or congenital defect, which creates a limiting condition to the person's functional capability to engage in normal competitive employment over an extended period of time. Functional capability, including, but not limited to, such factors as mobility, communication, self-care, self-direction, work tolerance, or work skills, can be determined on a basis of an evaluation of rehabilitation potential.

(b) A person with a severe disability who is able to engage in normal competitive employment because the person has overcome his/her disability is not a person with a severe disability within the meaning of paragraph (A)(1)(a) of this rule. Capability for normal competitive employment shall be determined from information developed by an ongoing placement program conducted by the qualified nonprofit agency. Such placement programs shall include at least a pre-admission evaluation and annual review to determine each person's capability for normal competitive employment and maintenance of liaison with appropriate community services for the placement in such employment of any persons who may qualify for such placement.

(2) "A person with a severe disability" for the purpose of representing persons with severe disabilities upon the state committee for the purchase of products and services provided by persons with severe disabilities pursuant to division (A) of section 4115.32 of the Revised Code means an individual:

(a) Who has a severe physical, visual, or mental disability resulting from an injury, disease, or congenital defect, which creates a limiting condition to the person's functional capability to engage in major life activities.

(b) Who may be able to engage in normal competitive employment because the person has overcome his/her disability with respect to such employment.

(B) "Substantial barrier to employment" means that a physical or mental disability (in light of attendant medical, psychological, vocational, educational, and other related factors) impedes an individual's occupational performance, by preventing his from obtaining, retaining or preparing for employment consistent with the person's capacities and abilities.

(1) Organized under the laws of the United States or of Ohio, operated in the interest of persons with severe disabilities, and no part of the net income which inures to the benefit of any shareholder or other individual;

(2) Which is certified as a sheltered workshop or work activity center by the wage and hour division of the United States department of labor (in cases where the community rehabilitation program is not certified by the U.S. Department of labor, this requirement may be waived by the committee);

(3) Which complies with the applicable occupational health and safety standards required by the laws of the United States or of this state;

(4) Which in the manufacture of products and in the provision of services, whether or not procured under sections 4115.31 to 4115.35 of the Revised Code, the qualified nonprofit agency must employ, during the fiscal year of product production or service provision, persons with severe disabilities at a quota of not less than seventy-five per cent of the total man-hours of direct labor on all production, whether or not government related.

(D) "Committee" means the state committee for the purchase of products and services provided by persons with severe disabilities.

(E) "Central nonprofit agency" means an agency authorized by the committee and qualified nonprofit agencies to facilitate the distribution of orders among the participating qualified nonprofit agencies according to division (A) of section 4115.35 of the Revised Code.

(F) "Workshop" means a work center or work activity center for persons with severe disabilities geographically located in the state of Ohio.

(G) "Government(s)" means any state agency, political subdivision, or instrumentality of the state.

(H) "Political subdivision" means any county, township, village, school district, or special purpose district.

(I) "Instrumentality of the state" means any board, commission, authority, public corporation, college, university, or other educational institution or any other entity supported in whole or in part by funds appropriated by the general assembly.

(J) "Ordering office" means any purchasing activity of the government by which orders are placed for the procurement of any product or site-specific service on the procurement list.

(K) "Fiscal year" means the twelve-month period beginning on July first of each year.

(L) "State use program or program" means the statutory program established under sections 4115.31 to 4115.35 of the Revised Code.

(M) "NIGP code number" means the national institute of governmental purchasing code numbering system for assigning commodity codes to various products and services.

(N) "Procurement list" means a listing of all products and site-specific services approved by the committee under the authority of sections 4115.31 to 4115.35 of the Revised Code.

(O) "Determination of suitability" means the process by which the committee determines whether a product or service proposed to be furnished by a qualified nonprofit agency satisfies the criteria listed in paragraph (B) of rule 4115-7-05 of the Administrative Code.

(P) "Suitable for procurement" means that a product or service proposed to be furnished by a qualified nonprofit agency satisfies the criteria listed in paragraph (B) of rule 4115-7-05 of the Administrative Code.

(Q) "Site-specific" means services determined to be suitable by the committee for procurement including, but not limited to, janitorial and lawn care services, provided by a qualified nonprofit agency at a specific geographical location of a state agency, political subdivision or instrumentality of the state. R. C. 119.032 review dates: 05/13/2003 and 04/07/2005

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31 to 4115.35

Prior Effective Dates: 9/29/97, 10/9/97, 3/23/03

Chapter 4115-3 General Provisions

4115-3-01 Purpose.

Subject to and in accordance with division (A) of section 4115.33 of the Revised Code, the state committee for the purchase of products and services provided by persons with severe disabilities (hereinafter the "committee") hereby adopts rules under Chapters 4115-1 to 4115-7 of the Administrative Code for the purpose of directing the procurement of selected products and services by Ohio governments to qualified nonprofit agencies serving persons with severe disabilities with the objective of increasing employment opportunities for these individuals. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-3-02 Recommendations.

All individuals, particularly those concerned with procurement, are encouraged to identify and recommend to the committee any products and services which appear to be suitable for procurement by Ohio governments from qualified nonprofit agencies for persons with severe disabilities. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-3-03 Correspondence and inquiries.

Routine correspondence or inquiries concerning deliveries of products being shipped from or performance of services by qualified nonprofit agencies shall be with the central nonprofit agency. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-3-04 Notice of meetings.

(A) This rule is adopted in compliance with, and under the authority of, division (F) of section 121.22 of the revised code,

(B) Any person may request a regular meeting schedule identifying the time, and place of meetings of the committee by:

(1) Writing to: "Executive Director, state use committee, Ohio Department of Mental Retardation and Developmental Disabilities (ODMR/DD), 30 East Broad Street, Suite 1240 Columbus, Ohio 43215."

(2) Reviewing the bulletin board located at ODMR/DD, 30 East Broad Street, 12th Floor, Columbus, Ohio 43266-0415.

(C) Any representative of the news media may obtain notice of all special meetings by requesting in writing that such notice be provided. Such notice will be given, however, to only one representative of any particular publication or radio or television station. A request for such notification shall be addressed to: "Executive Director, state use committee, ODMR/DD, 30 East Broad Street, Suite 1240, Columbus, Ohio 43215."

(1) The request shall provide the name of the individual media representative to be contacted, the mailing address, and a maximum of two telephone numbers where the individual can be reached. The committee shall maintain a list of all representatives of the news media who have requested notice of special meetings pursuant to paragraph (c) of this rule.

(2) In the event of a special meeting not of an emergency nature, the committee shall notify all media representatives on the list of such meeting by doing the following:

Notifying such representatives by telephone no less than twenty-four hours prior to the special meeting; such telephone notice shall be complete if a message has been left for the representative, or if, after reasonable effort, the committee has been unable to provide such telephone notice.

(3) In the event of a special meeting of an emergency nature, the committee shall notify all media representatives on the list of such meeting by providing the notice described in paragraph (c) (2) of this rule. In such event, however, the notice need not be given twenty-four hours prior to the meeting, but shall be given as soon as possible.

(4) In giving the notice required by section 119.03 of the Revised Code, the committee may rely on assistance provided by any member of the committee and any such notice is complete if given by such member in the manner provided in this rule.

(D) The committee shall maintain a list of all persons who have requested, in writing, notice of all meetings of the committee at which specific subject matters designated by such persons are scheduled to be discussed. Any person may, upon payment of an annual fee in the amount of ten dollars, have his name placed on such list. The committee shall, no later than ten days prior to each meeting, send by first-class mail on agenda of the meeting to such persons. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 121.22, 4115.33

Rule Amplifies: 121.22, 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-3-05 Public notice: adoption, amendment or rescission of rules.

When the committee proposes to adopt, amend or rescind any rule which it is by law authorized or required to adopt under the Administrative Procedure Act, notice of public hearing shall be given pursuant to section 119.03 of the Revised Code in the register of Ohio published by the legislative service commission not less than thirty days before such hearing. Such notice shall contain the information required by section 119.03 of the Revised Code. A copy of the notice shall also be made available along with the full text of the proposed rule or rules at least thirty days prior to such hearing on the Ohio department of mental retardation and developmental disabilities web site at http://odmrdd.state.oh.us.

Eff 9-29-77; 10-11-91 (Emer.); 12-21-91; 10-9-97; 4-24-03

Rule promulgated under: RC 119.03

Rule authorized by: RC 4115.33

Rule amplifies: RC 119.03, 4115.31 to 4115.35 R. C. 119.032 review dates: 02/06/2003 and 04/07/2008

Chapter 4115-5 State Use Committee; Central Nonprofit Corporation

4115-5-01 Committee membership.

The committee shall be composed ex officio of the following persons or their designees:

(A) The director of the department of administrative services;

(B) The executive director of the rehabilitation services commission;

(D) The director of the department of commerce;

(E) The administrator of the bureau of workers' compensation;

(F) The secretary of state;

(G) The director of the department of transportation;

(H) The director of the department of natural resources;

(I) One representative of a purchasing department of a political subdivision who is designated by the governor;

(J) The director of the department of mental retardation and developmental disabilities;

(K) A person with a severe disability appointed by the governor; and

(L) Two representatives of a qualified nonprofit agency appointed by the governor.

Eff 9-29-77; 10-9-97; 4-24-03

Rule promulgated under: RC 119.03

Rule authorized by: RC 4115.33

Rule amplifies: RC 4115.31 to 4115.35 R. C. 119.032 review dates: 02/06/2003 and 04/07/2008

4115-5-02 Duties and powers of the committee for the purchase of products and services provided by, persons with severe disabilities.

(A) The committee shall:

(1) Establish rules to assure the effective and efficient administration of the program implemented by section 4115.31 to 4115.35 of the Revised Code.

(2) Establish, maintain, and publish a procurement list of all products and site-specific services pursuant to division (A) (3) of section 4115.33 of the Revised Code.

(3) Determine which products and site-specific services are suitable for procurement by government from qualified nonprofit agencies who employ persons with severe disabilities and add those items to the committee procurement list.

(4) Add or remove products or service sites from the procurement list as necessary utilizing the processes outlined in relevant sections of the rules pertaining to committee decisions, the procurement list, and determination of suitability.

(5) Utilize pricing rules to verify the fair market price for items added to the procurement list and revise those prices in accordance with changing market conditions to assure that the prices established are reflective of the market and do not recover any profit.

(6) Inform and educate governmental procurement entities regarding the statutory mandate of section 4115.34 of the Revised Code and the products and services on the procurement list and encourage and assist governmental procurement entities to identify additional products and services that can be purchased from qualified nonprofit agencies.

(7) Approve catalogues produced by the central nonprofit agencies for the purpose of marketing or educating the public about the program implemented by sections 4115.31 to 4115.35 of the Revised Code.

(8) Establish criteria, pursuant to division (A) (4) of section 4115.33 of the Revised Code, for determining what constitutes a substantial barrier to employment that prevents persons with severe disabilities from currently engaging in normal competitive employment.

(9) Certify, as provided in rule 4115-7-01 of the Administrative Code, all qualified nonprofit agencies meeting the requirements of division (B) of section 4115.31 of the Revised Code and applying for participation in the program implemented by sections 4115.31 to 4115.35 of the Revised Code.

(10) Establish procedures for the operation of each central nonprofit agency approved under section 4115.35 of the Revised Code.

(B) The committee may adopt rules in accordance with Chapter 119. of the Revised Code that do either or both of the following:

(1) Establish pilot programs to improve the administration of sections 4115.31 to 4115.35 of the Revised Code.

(2) Establish a fee structure for each central nonprofit agency approved under section 4115.35 of the Revised Code.

(C) The committee may conduct a continuing study and evaluation of its activities pursuant to division (C) of section 4115.33 of the Revised Code for the purpose of assuring effective and efficient administration of the responsibilities and duties with which it is charged. On its own or in cooperation with other public or nonprofit private agencies, the committee may study problems relating to employment of persons with severe disabilities, and to the development and adaptation of production methods which would enable greater utilization of persons with severe disabilities. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/11/91 (Emer.), 12/21/91, 10/9/97

4115-5-03 Central nonprofit agencies' responsibilities.

The central nonprofit agencies, as defined in rule 4115-1-01 of the Administrative Code, shall have the following responsibilities:

(A) Represent qualified nonprofit agencies before the committee under the state use program.

(B) Evaluate the qualifications and capabilities of qualified nonprofit agencies and provide the committee with pertinent data concerning their status as qualified nonprofit agencies, their manufacturing or service capabilities, and other information required by the committee.

(C) Recommend to the committee suitable products or services for procurement from qualified nonprofit agencies with appropriate justification for recommended prices.

(D) Distribute within the policy guidelines of the committee (by direct allocation, or any other means) orders from government purchasing entities among qualified nonprofit agencies.

(E) Maintain the necessary records and data on qualified nonprofit agencies to enable it to allocate orders equitably.

(F) Oversee qualified nonprofit agencies to insure contract compliance in the production of a product or performance of a service.

(G) As market conditions change, recommend price revisions with appropriate justification for products or site-specific services on the procurement list.

(H) Monitor, in association with the committee, the activities of qualified nonprofit agencies to ensure compliance with sections 4115.31 to 4115.35 of the Revised Code and rules 4115-1-01 to 4115-7-17 of the Administrative Code.

(I) Enter, as necessary, into contracts with government procuring entities for the furnishing of products or site-specific services provided by the qualified nonprofit agencies.

(J) Submit to the committee a comprehensive annual report for each fiscal year concerning the operations of the qualified nonprofit agencies under the act, including significant accomplishments and developments, and such other details as the central nonprofit agency considers appropriate or the committee may request. The annual report shall also include the most recent audit report on the central nonprofit agency. This report will be submitted by December twenty-sixth following the fiscal year ending the preceding June thirtieth.

(K) Pay the qualified nonprofit agencies within thirty days of receipt of an accurate invoice from the qualified nonprofit agencies.

(L) Submit to the committee an annual budget.

(M) Submit to the committee a monthly financial statement.

(N) Plan, finance, organize and hold an annual meeting of qualified nonprofit agencies, ordering offices and the committee.

(O) Serve as a resource for work-related adaptive technology to qualified nonprofit agencies.

(P) Keep logs or other documentation of technical assistance provided to qualified nonprofit agencies including, but not limited to, the cost and hours of such technical assistance.

(Q) Keep logs or other documentation detailing the dedication of hours and cost spent on public relations programs. R. C. 119.032 review dates: 04/07/2003 and 04/07/2005

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/11/91 (Emer.), 12/21/91, 10/9/97, 2/1/99

4115-5-04 Violations of the, state use program law, rules or regulations.

When it comes to the attention of the committee that any rule of the state use committee or any of the applicable sections of the Revised Code has been violated, the committee shall notify the participating qualified nonprofit agency or central nonprofit agency of the violation and afford it an opportunity to submit a statement of facts and evidence.

The committee shall conduct a hearing or designate a hearing examiner to make findings of fact and conclusions of law after investigating and analyzing together with the statements of fact and evidence from the central nonprofit agency and the qualified nonprofit agency to determine whether the qualified nonprofit agency site-specific service or product under investigation should be removed from the procurement list. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

Chapter 4115-6 Approval of Central Nonprofit Agencies

(A) An applicant for approval as a central nonprofit agency shall complete and submit to the executive director of the committee a notarized application prescribed by the committee establishing all of the following:

(1) Certification by the secretary of state as a nonprofit corporation according to sections 1702.01 to 1702.58 of the Revised Code.

(2) Certification by the "Internal Revenue Service" indicating that the organization has been accepted as a nonprofit agency for taxation purposes.

(3) Employees and/or consultant(s) sufficient in numbers, qualifications, and knowledge to provide services required to carry out the responsibilities in rule 4115-5-03 of the Administrative Code.

(4) Practical knowledge of the state use program, including but not limited to:

(a) Operation of qualified nonprofit agencies;

(b) Experience in political subdivision contracting activity;

(5) Federal identification number.

(B) The application for approval shall also include all of the following:

(1) The organization's financial statement for the past two years.

(2) A business plan which clearly demonstrates the organization's ability to provide the following:

(a) To publish and distribute an annual catalog of goods and services on the committee's procurement list;

(b) Accounting and record keeping capabilities sufficient to meet the responsibilities in rule 4115-5-03 of the Administrative Code including, but not limited to, a well-documented background in cost accounting including experience in the following:

(i) Interpreting specifications.

(ii) Preparing, documenting and justifying bills of material and the associated costs.

(iii) Preparing, documenting and justifying bills of labor and associated costs.

(iv) Preparing, documenting and justifying bills of equipment and associated costs.

(v) Providing support documentation demonstrating competitiveness of costs.

(i) Comparing actual cost to the original cost proposal and/or budget.

(ii) Tracking and assessing compliance on hours worked by employees of the qualified nonprofit agency.

(iii) Assessing compliance to labor budgets or estimates.

(iv) Explaining how the applicant will perform an audit of supplies and equipment.

(v) Detailing the manner in which compliance reviews will be performed in all sites throughout the state.

(vi) Detailing the proposed frequency of compliance reviews.

(vii) Detailing the manner in which noncompliance will be reported to the qualified nonprofit agency, ordering office and committee.

(viii) Detailing the manner in which noncompliance situations will be resolved.

(d) Computer/data processing capability sufficient to perform all the responsibilities in rule 4115-5-03 of the Administrative Code.

(e) Sufficient communication systems and written procedures to perform the responsibilities in rule 4115-5-03 of the Administrative Code.

(f) A plan for developing and marketing products, services priced as products and services on a statewide scale within the context of a noncompetitive, socioeconomic set aside program.

(g) A plan for public relations programs to educate government entities on the availability of, and advantages to, purchasing products and services through the state use program.

(h) A plan for providing technical assistance and training programs to qualified nonprofit agencies. Technical assistance shall include, but not be limited to:

(i) Product and site-specific service cost accounting;

(ii) United States department of labor requirements;

(iii) Occupational safety and health administration requirements;

(iv) Competitive sourcing of supplies and equipment;

(v) Product and service development;

(vi) Committee requirements;

(vii) Quality management;

(viii) Contract site compliance;

(ix) Invoicing procedures.

(i) A plan for continuous quality improvement.

(j) A detailed line item budget.

(k) A statement, signed by an authorized person, committing the applicant to recruit and employ qualified people with severe disabilities.

(1) A statement, signed by an authorized person, that representatives of the applicant will attend all meetings of the committee and that the applicant will notify all qualified nonprofit agencies and ordering offices of the date, location and time a pertinent business item will be brought before the committee.

(m) A statement signed by an authorized person that the applicant's board shall welcome no more than two representatives of the committee, as appointed by the committee chair, to attend all board meetings, with the opportunity to present matters to the board.

(n) A statement, signed by an authorized person, that the applicant will provide services on a statewide basis.

(C) The applicant shall have a fully functional office geographically located in central Ohio capable of meeting all the needs and requirements of the state use program.

(D) Initial approvals of central nonprofit agency(ies) shall be valid for up to five years from the date of issuance, contingent upon passing annual evaluations pursuant to rule 4115-6-04 of the Administrative Code.

Eff 2-1-99; 4-8-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 4115.33, 4115.35

Rule amplifies: RC 4115.31 to 4115.35

RC 119.032 review dates: 2/1/04, 1/23/04, 4/7/08

4115-6-02 Approval procedure for central nonprofit agency(ies).

(A) A joint subcommittee of six members shall recommend, in writing, action on applications to the committee. The joint subcommittee shall be composed of three representatives of the committee, appointed by the committee chair, and three representatives of qualified nonprofit agencies, appointed by the alliance of Ohio work centers for state use.

(B) No recommendation shall be made without a concurrence of a majority of the joint subcommittee members.

(C) Final action on applications for approval of the central nonprofit agency(IES) shall be made by the committee based upon the recommendation of the joint subcommittee.

(D) There shall be no more than two certified central nonprofit agencies at any one time.

(1) On February 1, 1999, one certification shall be available for issuance. All applications received by the deadline date set by the committee shall be considered, and the certification shall be issued to the applicant that the committee determines is the best qualified, under the procedure set forth in paragraphs (A) to (C) of this rule.

(2) A second certification may be available for issuance only upon the committee's finding that the growth of or requirements of the state use program require the existence of two certified central nonprofit agencies to efficiently and effectively meet the objectives of sections 4115.31 to 4115.35 of the Revised Code.

(E) A central nonprofit agency may, upon its discretion, surrender its certificate of approval at any time by submitting written notice to the committee, sent by certified mail, return receipt requested. The surrender shall become effective no earlier than one hundred eighty days after receipt by the committee.

(F) Upon the revocation or surrender of a certification, a replacement central nonprofit agency shall be approved in the manner provided under rules 4115-5-03, 4115-5-04, and 4115-6-01 to 4115-6-05 of the Administrative Code and shall be certified for up to a five-year term commencing on the date of its predecessor's withdrawal or termination. The replacement central nonprofit agency shall operate in compliance with the requirements of Chapters 4115-1 to 4115-7 of the Administrative Code.

Eff 2-1-99; 4-8-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 4115.33, 4115.35

Rule amplifies: RC 4115.31 to 4115.35 RC 119.032 review dates: 2/1/04, 1/23/04, 4/7/08

4115-6-03 Renewal of central nonprofit agency(ies) approval.

(A) No later than sixty days prior to expiration of approval, a central nonprofit agency shall file with the executive director of the committee a completed application for renewal on a form prescribed by the committee. An application received after the sixtieth day may be considered if the committee chair determines, based upon information filed with the executive director of the committee no later than the sixtieth day, that extenuating circumstances prevented a timely filing and the application is received no later than forty-five days prior to expiration.

(B) The joint subcommittee shall review the renewal application and recommend to the committee that a certificate of approval be either issued for a period of up to five years or denied.

(1) The joint subcommittee shall recommend issuance of an approval if the application establishes all of the following:

(a) Ordering office satisfaction;

(b) Qualified nonprofit agency satisfaction;

(2) No recommendation shall be made without a concurrence of a majority of the joint subcommittee members.

(C) Final action on applications for renewal of approval of central nonprofit agency(ies) shall be made by the committee, based upon the recommendation of the joint subcommittee. Denials of approval shall be in compliance with Chapter 119. of the Revised Code.

Eff 2-1-99; 4-8-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 4115.33, 4115.35

Rule amplifies: RC 4115.31 to 4115.35 RC 119.032 review dates: 2/1/04, 1/23/04, 4/7/08

4115-6-04 Annual evaluation of central nonprofit agency (ies).

(A) The joint subcommittee shall, prior to December thirty-first of each year, evaluate each central nonprofit agency on the following:

(1) Continued compliance with paragraph (A) of rule 4115-6-01 of the Administrative Code and Division (B) of section 4115.35 of the Revised Code;

(2) Implementation of the business plan submitted pursuant to paragraph (B)(2) of Rule 4115-6-01 of the Administrative Code;

(3) The elements of a marketing plan for the upcoming twelve month period including, but not limited to, sales projections;

(4) Ordering office satisfaction;

(5) Qualified nonprofit agency satisfaction.

(B) The joint subcommittee shall refer non-satisfactory evaluations to the committee. The joint subcommittee may, by a concurrence of a majority of its members, recommend, in writing, actions which may include, but not be limited to, the following:

(1) Adoption of a corrective action plan.

(2) Cancellation of approval of a central nonprofit agency.

(C) Final action on non-satisfactory evaluations shall be taken by the committee based upon the recommendation of the joint subcommittee. Cancellation of approval shall be made in compliance with Chapter 119. of the Revised Code. The committee's decision shall be sent to the central nonprofit agency(ies) by certified mail, return receipt requested. A cancellation of approval shall be effective one hundred eighty days following receipt of written notification by an affected central nonprofit agency. R. C. 119.032 review dates: 01/23/2004 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33, 4115.35

Rule Amplifies: 4115.31 to 4115.35

Prior Effective Dates: 2/1/99

4115-6-05 Commission fees.

(A) Each central nonprofit agency shall collect a commission fee, which may be variable, on the sale of products, services priced as products and site-specific services on the committee's procurement list.

(B) Commission fees may be received in either of the following methods:

(1) A deduction, if the ordering office payment is directed through a central nonprofit agency;

(2) Direct payment from the qualified nonprofit agency.

(C) The rate of commission fees shall be set according to a schedule, approved by the committee, and reviewed at least annually. The rate may vary based upon, but not limited to, the following criteria:

(1) Market conditions.

(2) Type of contract:

(a) Product;

(b) Site-specific service;

(3) Effort required by the central nonprofit agency:

(a) To initiate a contract;

(b) To maintain a contract;

(4) Central nonprofit agency's compliance duties required by the ordering office.

(5) Effort necessary for the central nonprofit agency(ies) to comply with invoicing requirements by the ordering office.

(D) In determining the schedule, the committee shall consider the recommendations of the central nonprofit agency(ies), qualified nonprofit agencies and ordering offices.

Replaces: 4115-7-08 R. C. 119.032 review dates: 01/23/2004 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33, 4115.35

Rule Amplifies: 4115.31 to 4115.35

Prior Effective Dates: 9/29/77, 10/9/97, 2/1/99

Chapter 4115-7 Certification of Agencies; Procurement List; Fair Market Pricing

4115-7-01 Certification of qualified nonprofit agencies.

(A) To qualify for participation under the state use program, a qualified nonprofit agency shall complete and submit to the executive director of the committee a notarized certification application provided by the committee attesting that the applicant:

(1) Is certified by the secretary of state as a nonprofit corporation according to sections 1702.01 to 1702.58 of the Revised Code.

(2) Has obtained an Internal Revenue Service certificate indicating that the corporation has been accepted as a nonprofit agency for taxation purposes.

(3) Operates in the interest of persons with severe disabilities, and that no part of its income inures to the benefit of any shareholder or other individual.

(4) Is certified as a sheltered workshop or work activity center by the wage and hour division of the United States department of labor, if applicable.

(5) Complies with applicable occupational health and safety standards required by the laws of the United States or of this state.

(6) In the manufacturing of products and in the provision of services, whether or not procured under the state use program, employs during the fiscal year of commodity production or service provision, persons with severe disabilities at a quota of not less than seventy-five per cent of the total man-hours of direct labor on all production, whether or not governmental related.

(7) Has an ongoing placement program which includes at least pre-admission evaluation and annual review to determine each persons capability for competitive employment and maintains a liaison with appropriate community services for the placement in such employment of any of its workers who may qualify for such placement.

(B) The committee shall review the notarized certification application and, if acceptable, notify the qualified nonprofit agency of its eligibility to participate in the state use program. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-02 Procurement, list.

(A) The committee shall establish, maintain, and publish a procurement list of all products and site-specific services provided by any qualified nonprofit agency that the committee determines are suitable for procurement by governments of this state.

(B) For products, the procurement list shall include the item description, price, NIGP code, and other pertinent information.

(C) For services, the procurement list shall identify the type of service to be provided, the site and/or agencies to be served, and shall include information on prices and other pertinent information.

(D) The procurement list shall be available upon request from "The committee, 30 East Broad Street, Suite 1240, Columbus, Ohio 43266-0415." R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-03 Purchase Waivers.

(A) Notice of adequate lead times shall be given by the government ordering office to the central nonprofit agency in which determination by the qualified nonprofit agency to produce and supply can be made.

(B) The central nonprofit agency shall grant a purchase waiver for a government ordering office to procure from commercial sources products or services on the procurement list when all of the following conditions are met:

(1) The product or specific service site has been approved and is on the committee procurement list and the waiver is limited to a specific time frame.

(2) The central nonprofit agency cannot furnish a product or service on the committee procurement list within the time period required by the government.

(3) The product or service on the procurement list is available from commercial sources in the quantities and at an earlier time than it is available from the qualified nonprofit agencies.

(C) When the conditions in paragraphs (B) (1) to (B) (3) of this rule are met, the central nonprofit agency shall provide a purchase waiver promptly and shall specify the quantities and the time frame covered by the waiver, and shall notify the committee of its action.

(D) The central nonprofit agency may grant a purchase waiver when the quantity involved is not sufficient for economical production or provision by the qualified nonprofit agencies.

(E) The central nonprofit agency shall inform the committee prior to issuing any purchase waiver exceeding fifteen thousand dollars.

(F) Any decision regarding the central nonprofit agency granting a purchase waiver may be appealed to the committee by the governments and by the qualified nonprofit agencies. The committee shall grant a waiver when it deems such action is appropriate. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-04 Deletion of items from the procurement list.

(A) Requests for the deletion of a product or service from the procurement list shall be made by the central nonprofit agency in writing and filed with "the committee office at 30 East Broad Street, Suite 1240, Columbus, Ohio 43266-0415." The request shall include documentation establishing that no other qualified nonprofit agency is capable of providing the service or product.

(B) Qualified nonprofit agencies will normally be required to complete production of any other orders for products on hand regardless of the decision to delete the item from the procurement list.

(C) For site-specific services, a central nonprofit agency shall notify the government involved of the intent of the qualified nonprofit agency to discontinue the performance of the service as far in advance of the termination date as possible, preferably ninety days. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 10/9/97

4115-7-05 Committee decisions pertaining to an addition to the procurement list.

(A) The committee shall consider all information presented pertaining to suitability in each case in determining if a product or service is suitable for addition to the procurement list.

(B) The committee shall determine a product or service to be suitable for procurement if all of the following criteria are satisfied:

(1) Employment potential. The proposed addition must demonstrate that it has a potential to generate employment for persons with severe disabilities and is provided by a qualified nonprofit agency for persons with severe disabilities which maintains an employment quota of persons with severe disabilities of not less than seventy-five per cent of the total man hours of direct labor on all production in accordance with division (A) (4) of section 4115.31 of the Revised Code. It is strongly encouraged that on services valued at less than fifteen thousand dollars annually, no less than fifty per cent of the direct labor should be performed by persons with severe disabilities. Likewise, on services valued at more than fifteen thousand dollars annually, it is strongly encouraged that no less than sixty per cent of the direct labor should be performed by persons with severe disabilities. Wage and leave benefits shall be paid to persons with severe disabilities in accordance with federal, state, and committee rules and regulations.

(2) Qualified nonprofit agency qualifications. The nonprofit agency proposing to furnish the product or service must qualify as a nonprofit agency serving persons with severe disabilities as outlined in division (B) of section 4115.31 of the Revised Code, paragraph (C) of rule 4115-1-01 of the Administrative Code, and rule 4115-7-01 of the Administrative Code.

(3) Capability. The qualified nonprofit agency desiring to furnish the product or service must satisfy the committee of its ability to provide the extent of the labor operations to be performed and have the ability to meet quality standards and delivery schedules of the state agency, political subdivision or instrumentality of the state by the time it assumes responsibility to provide the product or service.

(4) Fair market price. The product or service will be provided at fair market price established by committee rules.

(5) Level of adverse impact. In deciding whether the proposed addition to the procurement list would have an adverse impact on the public or private sector contractor for the specific product or service the committee will give particular attention to:

(a) Possible impact on current contractor's sales.

(b) Whether the contractor has been a continuous supplier of the product or service.

(c) Any substantive comments received as a result of the public notice received prior to the committee meeting scheduled for the consideration of the proposed addition of the product or service to the procurement list.

(C) The qualified nonprofit agency and central nonprofit agency shall demonstrate that the suitability points under this rule are met. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 10/9/97

4115-7-06 Quality of merchandise and services provided.

(A) Products furnished by qualified nonprofit agencies shall be manufactured in strict compliance with government specifications. Where no specifications exist, products produced shall be of the highest quality and comparable to similar items available on the commercial market. Products shall be inspected utilizing nationally recognized methods and procedures for sampling and inspection.

(B) Site-specific services provided by qualified nonprofit agencies shall be performed in accordance with government specifications and standards. Where no specifications or standards exist, the service shall be performed in accordance with good commercial practices.

Replaces: 4115-7-04 R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-07 Specification changes.

(A) Specifications cited in the procurement list may undergo a series of changes, indicated by revision dates, to keep current with industry changes and government needs. Since it is not feasible to show the latest revision current on the publication date, only the basic specification is referenced in the procurement list. Government ordering offices shall notify the central nonprofit agency of the latest applicable specification.

(B) When a government ordering office is changing the design or construction of a product on the procurement list, the committee and the central nonprofit agency directly connected to the product in question shall be notified of the contemplated change prior to its effective date and shall be given adequate time in which to redesign or retool to incorporate such change in its listed products.

(C) When a government ordering office is changing the specifications for a site-specific service or service priced as a product listed on the procurement list, the committee and central nonprofit agency directly connected to the service in question shall be notified of the contemplated change prior to its effective date and shall be given time in which to incorporate the specification change into the listed service.

Replaces: 4115-7-05 R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-09 Allocation and orders.

(A) Allocation is the action taken by the central nonprofit agency in designating the qualified nonprofit agency that will produce definite quantities of products or perform site specific services upon receipt of an order.

(B) Purchase orders shall contain:

(1) For products: Vendor's name, address and federal tax identification number, NIGP commodity code, latest specification, quantity, unit of measure price, item description, and place and time of delivery.

(2) For services: Type and location of service required, latest specification, work to be performed, estimated volume and time for completion.

(C) Ordering offices shall issue orders with sufficient time for the central nonprofit agency to reply, for the order(s) to be allocated, and for the qualified nonprofit agency to produce the product or provide the service.

(D) The central nonprofit agency shall make allocations to the appropriate qualified nonprofit agency upon receipt of an order from the ordering office.

(E) The central nonprofit agency shall promptly acknowledge orders. When an order provides a delivery schedule which cannot be met, the central nonprofit agency shall request a revision, which the ordering office should grant, if feasible, or the central nonprofit agency shall issue a purchase waiver authorizing procurement from commercial sources as provided in rule 4115-7-03 of the Administrative Code.

(F) The procurement list shall state for products or services lead time for purchase of materials, production or preparation, and delivery or completion.

(G) The central nonprofit agency shall keep the ordering office informed of any changes in the lead time experienced by qualified nonprofit agency(ies) in order to keep to a minimum requests for extensions once an order is placed by the ordering office. Where, due to unusual conditions, an order does not provide sufficient lead time, the central nonprofit agency may request an extension of the delivery or completion date which should be granted, if feasible. If extension of delivery or completion date is not feasible, the ordering office shall first notify the central nonprofit agency to reallocate or to issue a purchase waiver authorizing procurement from commercial sources as provided in rule 4115-7-03 of the Administrative Code.

Replaces: 4115-7-07 R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-10 Adjustment and cancellation of orders.

When the central nonprofit agency or a qualified nonprofit agency fails to comply with the terms of a government order, the ordering office shall make every effort to negotiate adjustments before taking action to cancel the order. When a government order is cancelled for failure to comply with its terms, the central nonprofit agency shall be notified, and if practicable, requested to reallocate the order. A central nonprofit agency shall notify the committee of any cancellation of an order and the reason(s) therefor.

Replaces: 4115-7-08 R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-11 Shipping and packing.

(A) Products shall be shipped freight prepaid (FOB destination). Delivery is accomplished when a shipment is received and accepted by the purchasing agency. Time of delivery is the date stated on the procuring agency purchase order.

(B) Standard pack information is as required by the procuring agency.

(C) Subject to approval by the committee, a central nonprofit agency, when it deems necessary, may request payment from procuring agencies for set-up costs or costs incurred related to unusual delivery requests of products.

Replaces: 4115-7-09 R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-12 Fair market pricing for site-specific services.

(A) Purpose

This rule prescribes the policy, guideline, and procedures to be used in verifying the fair market price for custodial, lawn maintenance, and security services. Ohio department of transportation modern roadside rest sites are exempt from the following paragraphs of this rule: (B) (1) and (B) (3), (D) (1) to (D) (5), (E) (2) (b) (i) to (E) (2) (b) (iii) and (F) (1) to (F) (2).

(B) General provisions

(1) Bid comparison shall be the preferred method to verify the fair market price for the services outlined in this rule.

(2) Cost analysis may be used to verify fair market price for the services outlined in this rule if it is established that insufficient bid comparison data is available.

(3) Same-as comparison may be used to verify fair market price for the services outlined in this rule if specification comparison can support and establish that an exact match exists between the two sites. The weight of specification comparison is also required if survey or index numbers are utilized from a professional or trade organization.

(4) The state use committee (hereinafter referred to as the "committee") shall consider all custodial, lawn maintenance, and security services for addition to the committee's procurement list on a site-by-site basis.

(5) The central nonprofit agency (hereinafter referred to as the "CNA") or the qualified nonprofit agency may file an exception to any policy or guideline contained in this rule on a case-by-case basis utilizing the procedure outlined in rule 4115-7-15 of the Administrative Code.

(1) The committee shall only consider fair market pricing on those service additions where cost elements represent usual and customary charges for the industry. These cost elements must exclude any rehabilitation-related costs.

(2) It is the intent of the committee to assure that services covered by this rule and on the procurement list are exclusively comprised of the following cost elements:

(a) Direct labor,

(b) Indirect labor,

(d) Holiday/vacation/sick leave benefits,

(e) Overhead/burden,

(f) Supplies,

(g) Equipment, and

(h) Equipment maintenance (see appendix A of this rule).

(3) Any additional cost elements would have to be considered by the committee on an exception basis as prescribed in rule 4115-7-15 of the Administrative Code.

(D) Fair market price verified by bid comparison

(1) If the service is currently being purchased competitively, the initial fair market price recommended to the committee by the qualified nonprofit agency or CNA shall be the average of those bids, adjusted for discounts received from responsive and responsible bidders, from the most recent procurement which are not more than twenty-five per cent above or below the award price.

(2) If it is found that the most recent award price was made to the lowest bidder, then the price recommended to the committee by the qualified nonprofit agency or CNA shall be the average of all bids from the most recent procurement received from responsive and responsible bidders, adjusted for discounts contained in a range not more than thirty-five per cent above the award price.

(3) If the bid information used is over one year old, the fair market price submitted may include the committee-approved, not-to-exceed inflation percentage for the appropriate year(s), for a maximum of two years factored in to compensate for bid aging.

(4) If bid comparison data is deemed insufficient, the CNA may allow the ordering office to advertise and solicit bids for the service to the private sector. The purchasing authority may make an award for a period not to exceed one year to the lowest, responsive and responsible private sector bidder. At the conclusion of the award period, the CNA shall, utilizing the bids obtained from the ordering office if they are sufficient, recommend a fair market price to the committee.

(5) The CNA shall submit the following documentation to the committee with the recommended fair market price:

(a) Bidders' list with amounts,

(b) Previous contract award price,

(d) Qualified nonprofit agency prevailing wage survey.

(E) Fair market price verified by cost analysis

(1) If the service has not recently been purchased competitively, a three year price shall be verified by the evaluation and analysis of the costs assigned to each of the elements comprising the total fair market price submission. The three year price shall be comprised of a base year price with a not-to-exceed percentage of increase or decrease for two follow along years. Each follow along year is optional with the agreement of the qualified nonprofit agency and ordering office.

(2) Using the forms, format, and procedures as prescribed by the committee, the qualified nonprofit agency or CNA shall supply the committee with cost breakdown information on each element, taking into consideration the following:

(a) Direct labor wages

Direct labor wages shall be determined by the qualified nonprofit agency through the use of a community prevailing wage survey as described by the federal department of labor and the "Fair Labor Standards Act." A copy of the prevailing wage survey shall be presented to the committee.

(b) Indirect labor

(i) Supervisory hours shall be limited to a total of eight per cent of the direct labor hours.

(ii) The wages for supervisors shall be no greater than fifty per cent above the direct labor rate.

(iii) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(i) Allowable taxes are those customary to the private sector, unless stipulated in Chapter 3309. of the Revised Code and would be paid to the workers and supervisors providing the service. The maximum allowance is twelve per cent of the hourly wage for both direct and indirect positions.

(ii) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(d) Holiday/vacation/sick leave benefits

(i) Allowable leave shall be established at one hundred twenty hours per year for each full-time equivalent position (two thousand eighty hours per year) as required for direct and indirect labor. Leave shall be prorated to cover positions that are not full-time.

(ii) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(e) Overhead/burden

(i) The qualified nonprofit agency shall recover up to fifteen per cent of the direct and indirect labor totals for overhead expenses including, but not to exceed, the payroll taxes and benefits guidelines as defined in paragraphs (E) (2) (c) and (E) (2) (d) of this rule for costs associated with business-related contract administration.

(ii) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(f) Supplies

(i) Using the forms, format, and procedures as prescribed by the committee, all expendable supplies shall be itemized, detailing unit of purchase, quantity, purchase price, and annual total cost.

(ii) If the supply is specified as a sole-source item by the ordering office, or is by nature sole-sourced, it can be explained as an exception.

(iii) For any single category expendable supply with an annual usage projected to be in excess of one thousand dollars, the qualified nonprofit agency or CNA shall supply three responsive and responsible competitive discounted quotes to the committee or present as part of the recommended fair market price supply, prices predicated upon the applicable state of Ohio general distribution contract or state term schedule. If three competitive quotations are used, the price submitted as part of the recommended fair market price shall be predicated upon the lowest responsive and responsible discounted quotation received.

(iv) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(g) Equipment allowance

(i) Using the forms, format, and procedures as prescribed by the committee, all equipment shall be itemized, detailing unit of purchase, quantity, purchase price, amortization period, and annual amortization amount.

(ii) The acquisition price of equipment in excess of one thousand dollars per individual item and one thousand five hundred dollars per series of like items calculated into the recommended fair market price shall be determined by one of the following methods:

(A) Establishing price through the state of Ohio general distribution contract,

(B) State term schedule, or

(iii) Competitive quotation shall require the solicitation and presentation to the committee of three written competitive, responsive, responsible, and discounted quotations, except as noted in paragraph (E) (2) (g) (v) of this rule. The allowable equipment cost calculated into the proposed fair market price shall be at the price represented by the lowest, responsive, and responsible competitive discounted quotation.

Common business practices shall be used for the acquisition of equipment priced under one thousand dollars per individual item and one thousand five hundred dollars per series of like items.

(iv) If the equipment is specified as a sole-source item by the ordering office, or is by nature sole-sourced, it can be explained as an exception.

(v) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(h) Equipment amortization

(i) The committee shall provide an approved useful life table and all equipment shall be amortized and the cost recovered in accordance with the table.

(ii) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(i) Equipment maintenance

(i) The committee shall provide an approved schedule for the allowance of maintenance money for equipment with an acquisition cost in excess of one thousand dollars per individual item and one thousand five hundred dollars per series of like items which have not been fully amortized.

(ii) An allowance of up to twenty per cent of one year's amortization rate for equipment with an acquisition cost in excess of one thousand dollars per individual item and one thousand five hundred dollars per series of like items may be allocated for preventative and corrective maintenance for equipment which has been fully amortized.

(iii) Any request to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(j) Equipment disposal

(i) All equipment with an acquisition cost in excess of one thousand dollars or one thousand five hundred dollars per series of like items which has been fully depreciated against and has fully recovered one hundred per cent of the original acquisition cost for the qualified nonprofit agency through state use service, shall be considered to retain a residual value of ten per cent of the original acquisition cost at the time of disposal.

(ii) The residual value amount shall be deducted from the acquisition cost of replacement equipment included with the next fair market price proposal using the forms, format, and procedures prescribed by the committee.

(iii) If it is determined that the equipment being disposed of has a residual value greater than ten per cent of the acquisition cost, the qualified nonprofit agency or CNA shall submit a bill of sale or certificate of trade-in for the amount of the residual value, to be deducted from the acquisition cost of replacement equipment included with the next fair market price proposal using the forms, format, and procedures prescribed by the committee.

(iv) If it is determined that the equipment being disposed of contains no residual value, the qualified nonprofit agency or CNA shall, using the forms, format, and procedures prescribed by the committee, document that the ordering office has inspected the equipment and certified it to be worthless.

(F) Fair market price verified by same-as comparison

(1) Site-to-site comparison

The qualified nonprofit agency and CNA must document that the requirements and specifications for the service at the site the committee is being requested to base comparison on, is exactly the same as the requirements and specifications for the service at the site the committee is considering for set aside on the procurement list.

(2) Survey and index comparison

At the discretion of the committee, industry surveys and indexes may be utilized to aid in the establishment of the fair market price. The committee shall publish a list of those surveys and indexes deemed appropriate. In no case shall the committee solely depend on an individual survey or index to arrive at a fair market price for a service site.

(G) Fair market price changes

(1) Initial price

(a) The committee shall verify the initial fair market price for a period of three years.

(b) The initial fair market price is for a period of one year.

(c) Along with the initial base year fair market price, the committee shall provide a not-to-exceed percentage of increase or decrease for each of the two follow along years.

(d) Each follow along year is optional with the agreement of the qualified nonprofit agency and ordering office.

(2) Inflation factor

The committee shall publish at the start of each state of Ohio fiscal year the allowable percentage of increase or decrease for site specific services.

(3) Mid-term revisions

If a qualified nonprofit agency, CNA, or ordering office feels that costs have increased or decreased beyond the allowable annual percentage established by the committee, the qualified nonprofit agency, CNA, or ordering office shall file an exception as outlined in rule 4115-7-15 of the Administrative Code, and shall be evaluated by the committee using cost analysis to establish the new fair market price for the site specific service.

(4) Follow along year option

If the qualified nonprofit agency and the ordering office exercise their option not to be bound by the fair market price developed for each follow along year, a new fair market price will be developed using procedures outlined in paragraph (g) (5) of this rule.

(5) Renewals

At the completion of the initial three year cycle, the CNA shall submit a new recommended fairmarket price predicated on cost analysis to the committee. The committee shall exercise its responsibility and privilege by setting a new fair market price for the service site using cost analysis. The committee shall also provide the qualified nonprofit agency and CNA a non-to-exceed percentage of increase or decrease for each of two follow along years.

Appendix A

Labor hours for Ohio department of transportation modern roadside rest sites shall be as required by the ordering office.

Replaces: 4115-7-10 (rescinded 10/9/97) R. C. 119.032 review dates: 04/07/2003 and 04/07/2005

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 2/1/98

4115-7-13 Fair market pricing for services priced as products.

(A) Purpose

This rule prescribes the policy, guidelines, and procedures to be used in verifying the fair market price for services priced as products including, but not limited to, data processing (keystroke entry), microfilming, and mailing/collating services.

(B) General provisions

(1) Bid comparison shall be the preferred method to verify the fair market price for the services priced as products outlined in this rule.

(2) Cost analysis may be used to verify the fair market price for the services priced as products outlined in this rule if it is established that insufficient bid comparison data is available.

(3) Same-as comparison may be used to verify fair market price for the services priced as products outlined in this rule if specification comparison can support and establish that an exact match exists between the service being used as the benchmark and the service priced as a product being considered for addition to the procurement list by the state use committee of Ohio (hereinafter referred to as the "committee"). The weight of specification comparison is also required if survey or index numbers are utilized from a professional or trade organization.

(4) The central nonprofit agency (hereinafter referred to as the "CNA") or the qualified nonprofit agency may file an exception to any policy or guideline contained in this rule on a case-by-case basis utilizing the procedure outlined in rule 4115-7-15 of the Administrative Code.

(1) The committee shall only consider fair market pricing on those additions where cost elements represent usual and customary charges for the industry. These cost elements must exclude any rehabilitation related costs.

(2) It is the intent of the committee to assure that services priced as products covered by this rule and on the procurement list are exclusively comprised of the following cost elements:

(a) Direct labor,

(b) Indirect labor,

(d) Holiday/vacation/sick leave benefits,

(e) Overhead/burden,

(f) Equipment,

(g) Equipment maintenance,

(h) Materials/supplies, and

(i) Freight.

(3) Any requests to exceed the guidelines put forth in this paragraph would have to be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(D) Fair market price verified by bid comparison

(1) If the service priced as a product is currently being purchased competitively, the initial fair market price recommended to the committee by the CNA or qualified nonprofit agency shall be the average of those bids from responsive and responsible bidders from the most recent procurement, adjusted for discounts received, which are not more than twenty-five per cent above or below the award price.

(2) If it is found that the most recent award price was made to the lowest bidder, then the price recommended to the committee by the CNA or qualified nonprofit agency shall be the average of the bids from the most recent procurement received from responsive and responsible bidders, adjusted for discounts contained in a range no more than thirty-five per cent above the award price.

(3) If bid comparison data is deemed insufficient, the CNA may allow the ordering office to advertise and solicit bids from the private sector. The ordering office may make an award for a period not to exceed one year to the lowest, responsive and responsible bidder. At the conclusion of the award period, the CNA shall, utilizing the bids obtained from the ordering office if they are sufficient, recommend a fair market price to the committee.

(4) If the bid information is over one year old, the fair market price submitted may include the committee-approved, not-to exceed inflation percentage for the appropriate year(s) for a maximum of two years factored in to compensate for bid aging.

(5) The CNA shall submit the following documentation to the committee with the recommended fair market price:

(a) Bidders' list with amounts,

(b) Previous contract award price,

(d) Qualified nonprofit agency prevailing wage survey.

(E) Fair market price verified by cost analysis

(1) If the service priced as a product has not recently been purchased competitively, an initial three year price shall be verified by the evaluation and analysis of the costs assigned to each of the elements comprising the total fair market price submission. The three year price shall be comprised of a base year price with a not-to-exceed percentage of increase or decrease for each of the two follow along years. Each follow along year is optional with the agreement of the qualified nonprofit agency and ordering office.

(2) Using the forms, format, and procedures as prescribed by the committee, the CNA or qualified nonprofit agency shall supply cost breakdown information on each element, taking into consideration the following:

(a) Direct labor wages

Direct labor wages shall be determined by the qualified nonprofit agency through the use of a community prevailing wage survey as described by the federal department of labor in the "Fair Labor Standards Act." A copy of the prevailing wage survey shall be presented to the committee.

(b) Indirect labor

(i) For the purposes of this rule, indirect labor wages shall be applicable to supervisory positions, quality control and inspection, material handling maintenance, janitorial, shipping and receiving, and all other positions contributing indirectly to production which do not add value and which are not recovered in burden or overhead. The qualified nonprofit agency shall document all indirect labor positions using the forms, format, and procedures prescribed by the committee.

(ii) For the purposes of this rule, indirect labor hours shall be limited to fifteen per cent of the total direct labor hours, excluding direct labor rework hours.

(iii) The wages for supervisors shall be no greater than fifty per cent above the direct labor rate. The wages for all other indirect labor positions shall normally be halfway between the average direct labor wage and the wages paid to supervisors.

(iv) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by Rule 4115-7-15 of the Administrative Code.

(i) Allowable taxes are those customary to the private sector, unless stipulated in Chapter 3309. Of the Revised Code, which would be paid to the direct and indirect positions. The maximum allowance is twelve per cent of the hourly wage rate for both direct and indirect positions.

(ii) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(d) Holiday/Vacation/Sick leave benefits

(i) Allowable leave shall be established at one hundred twenty hours for each full-time equivalent position of two thousand eighty hours per year, as required for direct and indirect labor. Leave shall be prorated to cover positions that are not full-time.

(ii) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(e) Overhead/burden

(i) The qualified nonprofit agency shall recover up to fifteen per cent of the total of the material, direct and indirect labor including taxes and holiday/vacation/sick leave benefits, equipment depreciation, equipment maintenance, and subcontract costs for overhead expenses associated with business-related contract administration, covering such cost elements as follows:

(a) Office supplies,

(b) Janitorial supplies,

(d) Rent or mortgage,

(e) Utilities,

(f) Building repairs,

(g) Insurance, and

(h) Administrative salaries, taxes, and fringe benefits.

(ii) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(f) Materials and supplies

(i) All Material and supplies applicable to production and utilized in the calculation of the fair market price proposal shall be itemized using the forms, format, and procedures prescribed by the committee. Prices for materials and supplies shall be determined by one of the following methods:

(a) State of Ohio general distribution contract,

(b) State term schedule, or

(ii) The qualified nonprofit agency and CNA shall provide three responsive and responsible competitive discounted quotations to the committee, or present, as part of the recommended fair market price, material and supply prices predicated upon the applicable state of Ohio general distribution contract or state term schedule for any single category expendable supply with an annual usage projected to be in excess of one thousand dollars. If three competitive quotations are used, the price submitted as part of the recommended fair market price shall be predicated upon the lowest responsive and responsible discounted quotation received.

(iii) If the material or supply is specified as a sole-source item by the purchasing authority, or is by nature sole-sourced, it can be explained as an exception.

(iv) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(g) Freight

The cost of freight calculated into the fair market price mix shall be presented by the qualified nonprofit agency or CNA to the committee using the forms, format, and procedures prescribed by the committee.

(h) Equipment allowance

(i) Equipment shall be depreciated and the cost included for the fair market price calculation using the forms, format, useful life tables, and procedures prescribed by the committee. Only equipment and equipment maintenance agreements utilized in production of the service shall be allowed as part of the fair market price calculation.

(ii) Total allowable equipment cost, including the cost of equipment maintenance agreements, and maintenance allowances shall be less than twenty-five per cent of the total contract.

(iii) If the qualified nonprofit agency and CNA propose a fair market price to the committee predicated on one hundred per cent consumption of the service life of a piece of equipment, acquisition shall occur as follows:

(a) The acquisition price of equipment in excess of one thousand dollars per individual item and one thousand five hundred dollars per series of like items shall be determined by one of the following methods:

(ii) Establishing the price through the state of Ohio general distribution contract,

(ii) State term schedule, or

(iii) Competitive quotation.

(b) Competitive quotation shall require the solicitation of three responsive, responsible discounted quotations, except as noted in paragraph (e) (2) (h) (iii) (C) of this rule.

(c) The allowable equipment price calculated into the proposed fair market price shall be at the price represented by the lowest, responsive, and responsible competitive discounted quotation or as represented on the general distribution contract or state term schedule.

Common business practices shall be used for the acquisition of equipment priced under one thousand dollars per individual item and one thousand five hundred dollars per series of like items.

(iv) If the equipment is specified as a sole-source item by the ordering office, or is by nature sole-sourced, it can be explained as an exception.

(v) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(i) Equipment Disposal

(j) Equipment maintenance agreements

(i) Maintenance agreements with an annual cost in excess of one thousand dollars shall require three competitive quotations, whenever possible.

(ii) If the equipment is specified as a sole-source item by the ordering office, or is by nature sole-sourced, it can be explained as an exception.

(iii) Only that portion of the cost of the equipment maintenance agreement attributable to the service priced as a product being provided for state use service shall be calculated into the recommended fair market price and shall be documented using the forms, format, and procedures prescribed by the committee.

(k) Equipment maintenance

(ii) For equipment that is fully depreciated and is not covered by equipment maintenance agreements, an allowance of twenty per cent of one year's depreciation shall be taken and shall be documented using the forms, format, and procedures prescribed by the committee.

(F) Fair market price verified by same-as comparison

(1) The CNA and qualified nonprofit agency shall justify to the satisfaction of the committee that any service priced as a product presented as a comparison shall contain exactly the same specifications, requirements, and statement of work as the service priced as a product being recommended.

(2) At the discretion of the committee, industry survey and indexes may be utilized to aid in the establishment of fair market price. The committee shall publish a list of those surveys and indexes deemed appropriate. In no case shall the committee solely depend on an individual survey to arrive at a fair market price for a service priced as a product.

(G) Fair market price changes

(1) Initial price

The committee shall verify a fair market price for a new addition to the procurement list for a period of three years. The initial fair market price is for one year. Along with the initial base year fair market price, the committee shall provide a not-to-exceed percentage of increase or decrease for each of the two follow along years. Each follow along year is optional with the agreement of the qualified nonprofit agency and ordering office.

(2) Inflation factor

The committee shall publish at the start of each state of Ohio fiscal year the allowable percentage of increase or decrease for services priced as products.

(3) Mid-term revisions

If a qualified nonprofit agency, CNA, or ordering office feels that costs have increased or decreased beyond the allowable annual percentage established by the committee, an exception as outlined in rule 4115-7-15 of the Administrative Code shall be filed with the committee by the qualified nonprofit agency, CNA, or ordering office. The exception shall be evaluated by the committee using cost analysis to establish the new fair market price for the service priced as a product.

(4) Follow along year option

If the qualified nonprofit agency and the ordering office exercises their option not to be bound by the fair market price for each follow along year, a new fair market price will be developed using the procedures as outlined in paragraph (G)(5) of this rule.

(5) Renewals

At the completion of the initial three year period, the qualified nonprofit agency and CNA shall submit a new recommended fair market price predicated on cost analysis to the committee using the forms, format, and procedures prescribed by the committee. The committee shall exercise its responsibility and privilege by setting a new fair market price for the service priced as a product using cost analysis. The committee shall also provide the CNA and qualified nonprofit agency a not-to-exceed percentage of increase or decrease to be adjusted annually for each of the two follow along years.

Replaces: 4115-7-10 (rescinded 10/9/97) R. C. 119.032 review dates: 04/07/2003 and 04/07/2005

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 2/1/98

4115-7-14 Fair market pricing for products/commodities.

(A) Purpose

This rule prescribes the policy, guidelines, and procedures to be used in verifying the fair market price for products and commodities.

(B) General provisions

(1) Bid comparison shall be the preferred method to verify the fair market price of the products and commodities outlined in this rule.

(2) Cost analysis may be used to verify the fair market price for the products and commodities outlined in this rule if it is established that insufficient bid comparison data is available.

(3) The proposed fair market price for the recommended product/commodity shall be comprised exclusively of the following cost elements:

(a) Direct labor,

(b) Indirect labor,

(d) Holiday/vacation/sick leave benefits,

(e) Materials/supplies,

(f) Freight,

(g) Equipment allowance,

(h) Equipment maintenance allowances, and

(i) Overhead/burden.

(4) Same-as comparison may be used to verify fair market price if an exact match exists for comparison.

(6) The qualified nonprofit agency or CNA must demonstrate that a significant amount of value will be added by individuals with severe disabilities through labor expended in the manufacturing, packaging or conversion of a product or commodity under consideration for addition to the procurement list.

(1) If the product or commodity is currently being purchased competitively, the initial fair market price recommended to the state use committee (Hereinafter referred to as the "committee") by the CNA or qualified nonprofit agency shall be the average of all the bids received by the ordering office on the most recent procurement award from responsive and responsible bidders, adjusted for discounts, and which are no more than thirty-five per cent above or below the award price.

(2) If it is found that the most recent procurement award was made to the lowest bidder, then the price recommended to the committee by the CNA or qualified nonprofit agency shall be the average of all the bids received from responsive and responsible bidders, adjusted for discounts, which are no more than thirty-five per cent above the award price.

(4) If the bid information is over one year old, the fair market price submitted may include the committee-approved, not-to exceed inflation percentage for the appropriate year(s), for a maximum of two years, factored in to compensate for the bid aging.

(5) The CNA shall submit the following documentation to the committee with the recommended fair market price:

(a) Bidders' list with amounts,

(b) Previous contract award price,

(d) Relevant specification data,

(e) Samples (where available), and

(f) Qualified nonprofit agency prevailing wage surveys.

(D) Fair market price verified by cost analysis

(1) If the product or commodity has not recently been purchased competitively, a three year price shall be verified by the evaluation and analysis of the costs assigned to each of the elements comprising the total fair market price submission. The three year price shall be comprised of a base year price with a not-to-exceed percentage of increase or decrease for each of the two follow along years. Each follow along year is optional with the agreement of the qualified nonprofit agency, CNA and ordering office.

(2) Using the forms, formats, and procedures as prescribed by the committee, the CNA or qualified nonprofit agency shall supply the committee with cost breakdown information on each element, taking into consideration the following:

(a) Direct labor wages

Direct labor wages shall be determined by the qualified nonprofit agency through the use of a community prevailing wage survey as described by the federal department of labor in the "Fair Labor Standards Act." The prevailing labor wage survey shall be presented to the committee.

(b) Indirect labor

(i) For purposes of this rule, indirect labor wages shall be considered supervisory positions, quality control and inspection, material handling/shipping/receiving, maintenance and repair, janitorial and building maintenance and all other positions contributing to the production of a product or commodity which do not directly add value to the end product and which are not recovered in burden or overhead.

(ii) The wages for supervisors shall be no greater than fifty per cent above the direct labor wage rate. The wages for all other indirect labor positions shall customarily be halfway between the average direct labor wage and the wages paid to supervisors.

(iii) For purposes of this rule, indirect labor hours shall be limited to fifteen per cent of the total direct labor hours, excluding direct labor rework hours.

(iv) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(i) Allowable taxes are taxes customary to the private sector, unless stipulated in Chapter 3309. of the Revised Code, and would be paid to the workers, supervisors, and indirect labor positions producing the product or commodity. The allowance is twelve per cent of the hourly wage for both direct and indirect positions.

(ii) Any requests to exceed the guidelines put forth in this paragraph would have to be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(d) Holiday/vacation/sick leave benefits

(i) Allowable leave shall be established at one hundred twenty hours per year for each full-time equivalent position of two thousand eighty hours per year as required for direct and indirect labor. Leave shall be prorated to cover positions that are not full-time.

(ii) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(e) Materials

(i) The qualified nonprofit agency and/or CNA shall provide to the committee an itemized and complete bill of material. Except as provided in paragraph (D)(2)(e)(ii) of this rule, the qualified nonprofit agency and/or CNA shall identify those materials which comprise eighty per cent of the total material costs. Three documented competitive quotations from responsive and responsible bidders are required for materials comprising eighty per cent of the total material cost. The cost submitted for analysis shall be predicated on the lowest discounted bid received from a responsive and responsible bidder.

(ii) If the material is specified as a sole-source item by the purchasing authority, or is by nature sole-sourced, it can be explained as an exception.

(iii) Any requests to exceed the guidelines put forth in this paragraph would have to be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(f) Freight

(i) Unless specified in writing by the ordering office, all freight may be considered to be less than truck load (L.T.L.), free on board (F.O.B.) at the qualified nonprofit agency.

(ii) Should the ordering office select F.O.B., their location, and the projected annual cost of freight exceeds one thousand dollars, the qualified nonprofit agency or CNA shall furnish the committee three documented and discounted competitive freight quotations from responsive and responsible bidders. The cost submitted for analysis shall be predicated upon the lowest discounted bid received from a responsive and responsible bidder.

(iii) All parcel delivery shall be made F.O.B. at the qualified nonprofit agency by the ordering office's choice of delivery service. The cost of the parcel delivery service shall be appropriate to the needs and situation of the ordering office.

(iv) Any requests to exceed the guidelines put forth in this paragraph would have to be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(g) Equipment allowance

(i) Equipment shall be depreciated and the cost included for the product or commodity using the forms, format, useful life tables and procedures prescribed by the committee. Only equipment or service contracts utilized by the qualified nonprofit agency for state use service in the production of the product or commodity shall be allowed as part of the fair market price calculation.

(ii) That portion of the service life of the equipment and the depreciation totals representative of the portion utilized by the qualified nonprofit agency for state use service in the production of the product or commodity shall be documented using the forms, format, and procedures prescribed by the committee.

(iii) If the qualified nonprofit agency and CNA submit a fair market price recommendation to the committee predicated on one hundred per cent consumption of the service life of a piece of equipment, acquisition shall occur as follows:

(a) The acquisition price of equipment in excess of one thousand dollars per individual item and one thousand five hundred dollars per series of like items calculated into the recommended fair market price shall be determined by one of the following methods:

(i) Establishing the price through the state of Ohio general distribution contract,

(ii) State term schedule, or

(iii) Competitive quotation.

(b) Competitive quotations shall require the solicitation of and presentation to the committee of three written, competitive, responsive, responsible, and discounted quotations, except as noted in paragraph (D)(2)(g)(iii)(D) of this rule. The allowable equipment cost calculated into the proposed fair market price shall be at the price represented by the lowest, responsive, and responsible competitive discounted quotation.

Common business practices shall be used for the acquisition of equipment priced under one thousand dollars per individual item and one thousand five hundred dollars per series of like items.

(c) If the equipment is specified as a sole-source item by the ordering office, or is by nature sole-sourced, it can be explained as an exception.

(d) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by rule 4115-7-15 of the Administrative Code.

(h) Equipment disposal

(iv) If it is determined that the equipment being disposed of contains no residual value, the qualified nonprofit agency or CNA shall, using the forms, format, and procedures prescribed by the committee, document that the ordering offices inspected the equipment and certified it to be worthless.

(i) Equipment maintenance allowances

(i) Maintenance agreements calculated into the fair market price mix with an annual cost in excess of one thousand dollars shall require three competitive bids, whenever possible.

(ii) The committee shall provide an approved schedule for the allowance of maintenance money for equipment with an acquisition cost in excess of one thousand dollars per individual item and one thousand five hundred dollars per series of like items which have not been fully amortized.

(iii) For equipment that is fully depreciated and that is not covered by equipment maintenance agreements, an allowance of twenty per cent of one year's depreciation shall be taken and shall be documented using the forms, format, and procedures prescribed by the committee.

(iv) Only that portion of the cost of the equipment maintenance agreement attributable to the product or commodity being produced shall be calculated into the fair market price and shall be documented using the forms, format, and procedures prescribed by the committee.

(v) If the equipment is specified as a sole-source item by the ordering office, or is by nature sole-sourced, it can be explained as an exception.

(vi) Any requests to exceed the guidelines put forth in this paragraph would have to be considered by the committee on an exception basis as prescribed by Rule 4115-07-15 of the Administrative Code.

(j) General allowances

(i) The recommended fair-market price for a product or commodity may include the following percentages as guidelines:

(a) A maximum five per cent of total direct labor as rework allowance,

(b) A maximum five per cent of total material costs as scrap/rework allowance,

(d) The cost of money on equipment.

(ii) Should money be borrowed or invested by a qualified nonprofit agency to purchase capital equipment, that portion of the cost of capital incurred by a qualified nonprofit agency used to purchase capital equipment attributable to the product or commodity being provided for state use service shall be calculated into the fair market price of the product or commodity and shall be documented using the forms, format, and procedures prescribed by the committee.

(iii) Should the qualified nonprofit agency invest money on hand to purchase capital equipment, an allowance equal to the interest rate on the ninety day treasury bill (discounted rate), times the remaining depreciation balance on the equipment depreciation form shall be taken. The interest rate in effect three months prior to the costing being presented to the committee shall be used. The interest rate and the dollar value of the remaining depreciation shall be updated on an annual basis.

(iv) Should the qualified nonprofit agency borrow money to purchase capital equipment, the qualified nonprofit agency shall document the cost of interest calculated into the recommended fair market price mix using forms, formats, and procedures prescribed by the committee.

(v) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by Rule 4115-7-15 of the Administrative Code.

(k) Overhead/burden

(i) The qualified nonprofit agency shall recover up to seventy-five per cent of the total direct labor dollars including, but not to exceed, the payroll taxes and benefits guidelines as defined in paragraphs (D) (2) (c) (i) and (D) (2) (d) (i) of this rule (not including rework, etc.) for overhead expenses associated with business-related contract administration, covering such cost elements as follows:

(a) Office supplies,

(b) Janitorial supplies,

(d) Rent or mortgage,

(e) Utilities,

(f) Building repairs,

(g) Insurance,

(h) Safety material, supplies, and training,

(i) Administrative salaries, taxes, and fringe benefits.

(ii) Any requests to exceed the guidelines put forth in this paragraph shall be considered by the committee on an exception basis as prescribed by Rule 4115-7-15 of the Administrative Code.

(iii) All costs associated with this element shall be documented using the forms, format, and procedures prescribed by the committee

(E) Fair market price verified by same-as comparison

(1) The CNA and qualified nonprofit agency shall justify to the satisfaction of the committee that any product or commodity presented as a comparison contain exactly the same specifications, requirements, product, item, and commodity code as the product or commodity being recommended to the committee for comparison.

(2) As part of the fair market price recommendation, the qualified nonprofit agency and CNA shall provide the committee the following when requesting same-as comparison:

(a) List of all identified potential vendors of the product or commodity;

(b) The price at which each vendor would supply the product or commodity to the state of Ohio if it were competitively bid;

(d) Addresses, telephone numbers, and contacts for all vendors;

(e) Details of applicable discounts and other reductions; and

(f) All catalogue and trade information.

(3) At the discretion of the committee, industry surveys and indexes may be utilized to aid in the verification of the fair market price. The committee shall publish a list of those surveys and indexes deemed appropriate. In no case shall the committee solely depend on an individual survey or index to arrive at a fair market price for a product or commodity.

(F) Fair market price changes

(1) Initial price

The committee shall verify the fair market price for a period of three years. The initial fair market price is for a period of one year. Along with the initial base-year fair market price, the committee shall provide a not-to-exceed percentage of increase or decrease for each of the two follow along years. Each follow along year is optional with the agreement of the qualified nonprofit agency, CNA, and ordering office.

(2) Inflation factor

The committee shall publish at the start of each state of Ohio fiscal year, the allowable percentage of increase or decrease for products and/or commodities.

(3) Mid-term revisions

If a qualified nonprofit agency, CNA, or ordering office feels that costs have increased or decreased beyond the allowable annual percentage established by the committee, the qualified nonprofit agency, CNA, or ordering office shall file an exception as outlined in rule 4115-7-15 of the Administrative Code. The exception shall be evaluated by the committee using cost analysis to verify the new fair market price for the product or commodity.

(4) Each follow along year option

(5) Renewals

At the completion of the initial three year cycle, the qualified nonprofit agency and CNA shall submit a new recommended fair market price predicated on cost analysis to the committee. The committee shall exercise its responsibility and privilege by setting a new fair market price for the product or commodity using cost analysis. The committee shall also provide the CNA and qualified nonprofit agency a not-to-exceed percentage of increase for each of two follow along years.

Replaces: 4115-7-10 (rescinded 10/9/97) R. C. 119.032 review dates: 04/07/2003 and 04/07/2005

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 2/1/98

4115-7-15 Exception rule for presenting justification to exceed state use committee of Ohio fair market pricing guidelines.

(A) Purpose

(1) This rule prescribes the policy and procedures for the qualified nonprofit agencies, central nonprofit agency (hereinafter referred to as "CNA"), or ordering office to present justification to the state use committee of Ohio (hereinafter referred to as "committee") to support a legitimate business necessity to exceed the committee's established guidelines for verifying fair market price for a product/commodity, site-specific service, or service priced as product through the use of cost analysis.

(2) If the qualified nonprofit agency, CNA, and ordering office feels that costs have increased or decreased beyond the allowable annual percentage established by the committee, the CNA may file an exception pursuant to this rule. The exception shall be evaluated by the committee using cost analysis to verify the new fair market price.

(B) General provisions

(1) Under rule 4115-7-12 of the Administrative Code, the committee has established cost analysis guidelines for the following cost elements to assure that site-specific services on the committees procurement list meet the suitability requirements of fair market price:

(a) Direct labor,

(b) Indirect labor,

(d) Holiday/vacation/sick leave benefits,

(e) Materials/supplies,

(f) Equipment,

(g) Overhead/burden, and

(h) Equipment maintenance.

(2) Under rule 4115-7-14 of the Administrative Code, the committee has established cost analysis guidelines for the following cost elements to assure that products/commodities on the committee's procurement list meet the suitability requirements of fair market price:

(a) Direct labor,

(b) Indirect labor,

(d) Holiday/vacation/sick leave benefits,

(e) Materials/supplies,

(f) Freight,

(g) Equipment,

(h) Equipment, maintenance, and

(i) Overhead/burden.

(3) Under rule 4115-7-13 of the Administrative Code, the committee has established cost analysis guidelines for the following cost elements to assure that services priced as products on the committee's procurement list meet the suitability requirements of fair market price:

(a) Direct labor,

(b) Indirect labor,

(d) Holiday/vacation/sick leave benefits,

(e) Overhead/burden,

(f) Equipment,

(g) Materials/supplies,

(h) Equipment maintenance agreements, and

(k) Equipment maintenance.

(1) The qualified nonprofit agency or CNA shall document, in writing, the amount of money the qualified nonprofit agency shall recover at the level established by the committee's guidelines. The qualified nonprofit agency or CNA shall document, in writing, the amount of money the qualified nonprofit agency seeks to recover as a result of the exception to the committee's guidelines. The difference between the two amounts shall be clearly documented in aggregate and in the proper unit of measure.

(2) The qualified nonprofit agency or CNA shall write a rationale based on business reasons why the committee should accept their exception as part of the fair market price calculation. Examples of business reasons can be the requirements of the specifications, time constraints, or customer-required extra administrative paperwork. The rationale must cover only extraordinary costs that would have to be covered if the sitespecific service, product/commodity, or service priced as a product were being competitively bid. the committee shall not consider rehabilitation cost to be acceptable grounds for an exception.

(3) Exceptions created as mid-term revisions shall be presented to the committee using the prescribed cost analysis forms, formats, and procedures.

(4) The qualified nonprofit agency and CNA shall to present to the committee as much written justification as required by the committee to establish the need and appropriateness of the exception.

(D) Committee consideration of a cost analysis guideline exception

The committee shall be made aware by the executive director that an exception to a guideline or mid-term revision is being requested. At the committee meeting where the addition, renewal, or revision of the site-specific service, product/commodity, or service priced as a product will be voted on, the committee shall review and consider the business item as an exception and vote on the fair market price suitability for addition to or continuation on the procurement list.

Replaces: 4115-7-10 (rescinded 10/9/97) R. C. 119.032 review dates: 04/07/2003 and 04/07/2005

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 2/1/98

4115-7-16 Payments.

Payments for products or services of persons with severe disabilities shall be made immediately after receipt of shipment or receipt of a correct invoice or voucher. All payments for products or site-specific services shall be paid to the central nonprofit agency representing the qualified nonprofit agency providing the products or site-specific services unless authorized by the committee.

Replaces: 4115-7-11 R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 9/29/77, 10/9/97

4115-7-17 Previously approved products and services.

The products, site-specific services, and services priced as products approved by the committee as suitable for addition to the procurement list prior to the effective date of this rule shall be listed on the procurement list required by division (A) (3) of section 4115.33 of the Revised Code pursuant to the following:

(A) The requirements and practices contained within Chapters 4115-1 to 4115-7 of the Administrative Code, prior to the effective date of this rule, applied to products, services priced as products and data entry pre-approvals valued at less than fifty thousand dollars sold to multiple ordering offices prior to the effective date of this rule shall remain in effect through July 31, 1999. As of August 1, 1999, the suitability criteria related to fair market price described in paragraph (B) of rule 4115-7-05 of the Administrative Code shall be applied.

(B) The requirements and practices contained within Chapters 4115-1 to 4115-7 of the Administrative Code, prior to the effective date of this rule, applied to the site-specific services, products, and services priced as products, including but not limited to microfilming, data entry and collating, prior to the effective date of this rule shall remain in effect if the ordering office indicates the continued acceptance of the requirements and practices. The continued acceptance shall be in writing, signed by a properly authorized person, and filed with the committee on or before the effective date of this rule. The ordering office may, at the time of renewal, request the application of the suitability criteria related to fair market price listed in paragraph (B) of Rule 4115-7-05 of the Administrative Code. R. C. 119.032 review dates: 04/07/2003 and 04/07/2008

Promulgated Under: 119.03

Statutory Authority: 4115.33

Rule Amplifies: 4115.31, 4115.32, 4115.33, 4115.34, 4115.35

Prior Effective Dates: 2/1/98