Senate committee passes amended purchasing rule

A rule that could give the Idaho state purchasing department more latitude to negotiate bids with vendors, particularly in computer services, has passed a Senate committee after having one component removed due to complaints from vendors.

Rule 38-0501-1801 passed Senate State Affairs on Jan. 25, after losing in House State Affairs on Jan. 7. Because it is a rule, as opposed to a bill, it needs to pass only one body to take effect.

“There are a number of good provisions that I hope will ultimately move forward,” said administrator Sarah Hilderbrand.

In addition to housekeeping items, the rule added an “invitation to negotiate” contract, which would be more solution-driven and iterative, and allow the state to negotiate with multiple bidders during the process. The department will create a working group with representatives from state agencies and the vendor community to define the process, though no more rules are likely, Hilderbrand told the House committee.

The House State Affairs committee rejected the rule after the Information Technology Alliance for the Public Sector (ITAPS) sent a letter criticizing one provision of the rule, section 114, which said that the state would not comply with so-called “clickwrap” agreements. Clickwrap agreements are invoked through “I agree” click boxes and comparable mechanisms by users. The federal government imposed a similar rule against clickwrap agreements in 2013. The purchasing department wants to forbid such agreements because Idaho code requires contracts to be in writing and signed by both parties, Hilderbrand explained to the committee.

The House State Affairs committee also heard testimony from Kate Haas, a partner of Boise-based lobbying firm Kestrel West, which represents some ITAPS members. ITAPS objected to the rule because the state has not yet come up with a cloud services purchasing agreement, which ITAPS thought should happen first, she said. Representatives from ITAPS were not available by press time.

The committee could have chosen to reject just that single section, but Rep. Brent Crane, R-Nampa, moved to reject the entire rule.

“While we anticipated, based on testimony related only to section 114, that the committee would move the amendments forward, perhaps excluding that section, Rep. Crane made a motion to reject the entire docket, which passed,” said Hilderbrand, who serves on the board of directors for the National Organization of State Procurement Officials.

Consequently, when the rule was heard by the Senate State Affairs, the department decided to pull that section and work on it some more, Keith Reynolds, deputy director of the department of administration, told the committee. The committee then passed the rule.

Committee members from both bodies also criticized the purchasing department for not having gone to more effort to get comments from vendors, particularly major ones like Google and Microsoft. In the past few years, the Legislature has said that agencies should work more closely with industry on creating rules, a process called negotiated rulemaking.

In particular, Sen. Mary Souza, R-Coeur d’Alene, said the purchasing department should have sent postcards to all of its vendors. That would have amounted to thousands of postcards, so electronic notifications were more efficient, Hilderbrand responded to the committee.

“We published notices of all four of our scheduled negotiated rulemaking hearings on our website (all summer long), discussed the proposed rules with various vendors at other meetings we had with individual vendors on other topics, alerted vendors to the proposed rules at our annual Vendor Outreach Day in November, and certainly would have arranged for special meetings with any vendors (or any other interested party) that contacted us,” Hilderbrand said in an email. “The Rules were also published in the Bulletin (online on the State’s Rules page) beginning in June, for anyone to review and provide comments to me, as the listed contact.”

Hilderbrand also expressed willingness to the committee to meet with anyone. “My door is always open,” she told Senate State Affairs. “In fact, I don’t have a door.”