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,

(c) Payroll taxes,

(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,

(c) Payroll taxes,

(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,

(c) Payroll taxes,

(d) Holiday/vacation/sick leave benefits,

(e) Overhead/burden,

(f) Equipment,

(g) Materials/supplies,

(h) Equipment maintenance agreements, and

(k) Equipment maintenance.

(C) Exception documentation

(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