S.C. Code Regs. § 19-445.2141 - Commercial Products
A.
Definitions.
(1) Commercial product has the
meaning stated in Section
11-35-1410,
and does not include printing or insurance.
(2) Commercially available off-the-shelf
product ("COTS") has the meaning stated in Section
11-35-1410,
and does not include printing or insurance.
B. General.
(1) Agencies shall conduct market research to
determine whether commercial products or COTS are available that could meet
agency requirements, and should endeavor to acquire commercial products or COTS
when they are available to meet agency needs (see R.19-445.2140D
(Preference for commercially available products)).
(2) Consistent with Section
11-35-1535(A)(2),
the competitive negotiations source selection method may not be used to acquire
only commercially available off-the-shelf products.
C. Price reasonableness.
(1) An advantage of COTS is that a
competitive market, evidenced by substantial commercial sales, helps to
determine price reasonableness. Substantial sales of a COTS product may
establish catalog prices (see Section
11-35-1410
) and market prices. Market prices are current prices that are established in
the usual and ordinary course of trade between buyers and sellers (see
R.19-445.2120A(3)).
A characteristic of both catalog prices and market prices is that they can be
substantiated from sources independent of the offeror-for example, through
market research.
(2) "Items
customarily sold in bulk" means products that are loaded and carried in bulk
without mark or count. COTS does not include bulk materials, like fuel and
grain, because the prices for those items fluctuate, making it difficult or
impossible to rely on short-term pricing to establish price reasonableness for
purchase contracts that may be for a longer term.
D. Purchase description or specification.
The agency's purchase description must contain sufficient detail for potential offerors of commercial products or COTS to know which products may be suitable. Generally, an agency's specification for COTS should describe the type of product to be acquired and explain how the agency intends to use the product in terms of function to be performed, performance requirement or physical characteristics. Describing the agency's needs in these terms allows offerors to propose products that will best meet the State's needs.
E. Simplified
purchasing procedures for COTS.
(1) Section
11-35-1550(2)(b)
authorizes the use of simplified procedures for the acquisition of supplies and
information resources in amounts up to $100,000, if the responsible procurement
officer reasonably expects, based on the nature of the supplies or information
resources sought, and on market research, that offers will include only COTS.
The purpose of these simplified procedures is to vest procurement officers with
additional procedural discretion and flexibility, so that COTS acquisitions in
this dollar range may be solicited, offered, evaluated, and awarded in a
simplified manner that maximizes efficiency and economy and minimizes burden
and administrative costs for both the State and industry (see
R.19-445.2100).
(2) The procurement
officer should be aware of customary commercial terms and conditions when
pricing COTS. COTS prices are affected by factors that include, but are not
limited to, speed of delivery, length and extent of warranty, limitations of
seller's liability, quantities ordered, length of the performance period, and
specific performance requirements. The procurement officer should review the
using agency's standard contract terms and conditions, along with commercial
terms appropriate for the acquisition of the particular item. The procurement
officer should consider avoiding terms inconsistent with commercial practice,
unless those terms are required by law (see R.19-445.2143)
or are essential to the using agency's requirements.
(3) Section
11-35-2040 provides that COTS
purchases made using any of the simplified procedures of Section
11-35-1550
are exempt from a number of statutory provisions that vendors have complained
are overly burdensome. The procurement officer should consider Section
11-35-2040 and R.19-445.2143
when preparing the solicitation or written request for quotes.
(4) Regulation
19-445.2120B(3)
prohibits requiring cost or pricing data when acquiring a commercial product,
including COTS, unless the purchase or modification exceeds the thresholds
established in that section and the procurement officer determines in writing
that no other basis exists to establish price reasonableness.
F. The appropriate Chief
Procurement Officer may develop and issue guidance, including solicitation
forms, which may be used by agencies acquiring COTS using small purchase
procedures.
Notes
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