Procurement Code Act 1988
TITLE 44 – GOVERNMENT PROCUREMENT
CHAPTER 1 - PROCUREMENT CODE
sRepublic of the Marshall Islands
Jepilpilin Ke Ejukaan
PROCUREMENT CODE ACT 1988
Arrangement of Sections
Section Page
PART I - PRELIMINARY 7
§101. Short Title. ............................................................................................................................. 7
PART II- GENERAL PROVISIONS 7
DIVISION 1 - INTERPRETATION 7
§102. Interpretation. ....................................................................................................................... 7
DIVISION 2 - PURPOSES, CONSTRUCTION AND APPLICATION 10
§103. Purposes. ............................................................................................................................. 10
§104. Supplementary General Principles of Law Applicable. ................................................ 11
§105. Requirement of Good Faith............................................................................................... 11
§106. Application of this Act. ...................................................................................................... 11
§107. Severability. ......................................................................................................................... 11
§108. Specific Repealer. ................................................................................................................ 12
§109. Construction Against Implicit Repealer. ......................................................................... 12
DIVISION 3 - DETERMINATION 12
§110. Determinations. .................................................................................................................. 12
PART III - PROCUREMENT ORGANIZATION 12
DIVISION 1 - GOVERNMENT PROCUREMENT POLICY OFFICE 12
§111. Creation and Membership of the Government Procurement Policy Office. .............. 12
§112. Authority and duties of the Policy Office. ...................................................................... 13
DIVISION 2 - CHIEF PROCUREMENT OFFICER 13
§113. Creation of the Office of the Chief Procurement Officer. ............................................. 13
§114. Appointment and Qualifications. .................................................................................... 13
§115. Authority of the Chief Procurement Officer. ................................................................. 13
§116. Delegation of Authority by the Chief Procurement Officer......................................... 14
DIVISION 3 - ORGANIZATION OF PUBLIC PROCUREMENT 14
§117. Centralization of Procurement Authority. ..................................................................... 14
§118. Authority to Contract for Certain Services..................................................................... 14
§119. Exemptions. ........................................................................................................................ 14
DIVISION 4 - PROCUREMENT REGULATIONS 15
§120. Procurement Regulations. ................................................................................................ 15
DIVISION 5 - COORDINATION 15
§121. Collection of Data Concerning Public Procurement. .................................................... 15
DIVISION 6 - DUTIES OF THE ATTORNEY-GENERAL 16
§122. Duties of the Attorney-General. ....................................................................................... 16
PART IV - SOURCE SELECTION AND CONTRACT FORMATION 16
DIVISION 1 - DEFINITIONS 16
§123. Definition of terms used in this Part. .............................................................................. 16
DIVISION 2 - METHODS OF SOURCE SELECTION 17
§124. Methods of Source Selection. ........................................................................................... 17
§125. Competitive Sealed Bidding. ............................................................................................ 17
§126. Competitive Sealed Proposals. ......................................................................................... 19
§127. Small Purchases. ................................................................................................................. 20
§128. Sole Source Procurement. ................................................................................................. 20
§129. Emergency Procurement. .................................................................................................. 20
§130. Competitive Selection Procedures for Services Specified in Section 18. .................... 21
DIVISION 3 - CANCELLATION OF INVITATION FOR BIDS OR REQUESTS FOR
PROPOSALS 22
§131. Cancellation of Invitations for Bids or Requests for Proposals. .................................. 22
DIVISION 4 - QUALIFICATIONS AND DUTIES 22
§132. Responsibility of Bidders and Offerors........................................................................... 22
§133. Pre-qualification of Suppliers. .......................................................................................... 22
§134. Cost or Pricing Data. .......................................................................................................... 22
DIVISION 5 - TYPES OF CONTRACTS 23
§135. Types of Contracts. ............................................................................................................ 23
§136. Approval of Accounting System. .................................................................................... 24
§137. Multi-Term Contracts. ....................................................................................................... 24
DIVISION 6 - INSPECTION OF PLANT AND AUDIT OF RECORDS RIGHT TO
INSPECT PLANT. 25
§138. Right to Inspect Plant. ........................................................................................................ 25
§139. Right to Audit Records. ..................................................................................................... 25
DIVISION 7 - DETERMINATIONS AND REPORTS 25
§140. Finality of Determinations. ............................................................................................... 25
§141. Reporting of Anti-competitive Practices. ........................................................................ 26
§142. Retention of Procurement Records. ................................................................................. 26
§143. Record of Procurement Actions Taken Under Section 128 and Section 129. ............. 26
PART V - SPECIFICATIONS 26
DIVISION 1 - DEFINITIONS 26
§144. Definitions of terms used in this Part. ............................................................................. 26
DIVISION 2 - SPECIFICATIONS 27
§145. Duties of the Policy Office. ................................................................................................ 27
§146. Duties of the Chief Procurement Officer. ........................................................................ 27
§147. Exempted Items. ................................................................................................................. 27
§148. Relationship with using Agencies.................................................................................... 27
§149. Maximum Practicable Competition. ................................................................................ 27
§150. Specifications prepared by Architects and Engineers. .................................................. 27
PART VI- PROCUREMENT OF CONSTRUCTION, ARCHITECT
ENGINEER AND LAND SURVEYING SERVICES 28
DIVISION 1 - DEFINITIONS 28
§151. Definitions of terms used in this Part. ............................................................................. 28
DIVISION 2 - MANAGEMENT OF CONSTRUCTION CONTRACTING 29
§152. Responsibility for selection of methods of Construction Contracting
Management. ...................................................................................................................... 29
DIVISION 3 - BONDS 29
§153. Bid Security. ........................................................................................................................ 29
§154. Contract performance and payment bonds. ................................................................... 30
§155. Bond Forms and Copies. ................................................................................................... 31
DIVISION 4 - CONSTRUCTION CONTRACT CLAUSES AND FISCAL
RESPONSIBILITY CONTRACT CLAUSES AND THEIR ADMINISTRATION. 32
§156. Contract Clauses and Their Administration. ................................................................. 32
§157. Fiscal Responsibility. .......................................................................................................... 34
DIVISION 5 - ARCHITECT-ENGINEER AND LAND SURVEYING SERVICES 34
§158. Architect-Engineer and Land Surveying Services. ........................................................ 34
PART VII- MODIFICATION AND TERMINATION OF CONTRACTS FOR
SUPPLIES AND SERVICES 36
§159. Contract Clauses and Their Administration. ................................................................. 36
PART VIII- COST PRINCIPLES 38
§160. Cost Principles Regulations Required. ........................................................................... 38
PART IX - SUPPLY MANAGEMENT 38
DIVISION 1 - DEFINITIONS 38
§161. Definitions of terms used in this Part. ............................................................................. 38
DIVISION 2 - REGULATIONS REQUIRED 39
§162. Supply Management Regulations Required. ................................................................. 39
DIVISION 3 - PROCEEDS 39
§163. Allocation of Proceeds from Sale or Disposal of Surplus Supplies. ........................... 39
PART X - LEGAL AND CONTRACTUAL REMEDIES 39
DIVISION 1 - PRE-LITIGATION RESOLUTION OF CONTROVERSIES 39
§164. Authority to resolve protested solicitations and awards. ............................................ 39
§165. Authority to Debar or Suspend........................................................................................ 40
§166. Authority to resolve contract and breach of contract controversies. .......................... 42
DIVISION 2 - SOLICITATIONS OR AWARDS IN VIOLATION OF LAW 43
§167. Applicability of this Division. .......................................................................................... 43
§168. Remedies prior to an award. ............................................................................................ 43
§169. Remedies after an award. ................................................................................................. 43
DIVISION 3 - INTEREST 44
§170. Interest. ................................................................................................................................ 44
DIVISION 4 - JURISDICTION LIMITATION ON ACTIONS 44
§171. Jurisdiction. ......................................................................................................................... 44
§172. Time limitations on actions. ............................................................................................. 45
PART XI- INTERGOVERNMENTAL RELATIONS 45
DIVISION 1 - DEFINITIONS 45
§173. Definitions of terms used in this Part. ............................................................................. 45
DIVISION 2 - COOPERATIVE PURCHASING 46
§174. Cooperative Purchasing Authorized. ............................................................................. 46
§175. Sale, Acquisition, or Use of Supplies by a Public Procurement Unit. ........................ 46
§176. Cooperative Use of Supplies or Services. ....................................................................... 47
§177. Joint Use of Facilities. ......................................................................................................... 47
§178. Supply of Personnel, Information, and Technical Services. ......................................... 47
§179. Use of Payments Received by a Supplying Public Procurement Unit. ....................... 48
§180. Public procurement units in compliance with code requirements. ............................ 48
§181. Review of Procurement Requirements. ........................................................................... 49
DIVISION 3 - CONTRACT CONTROVERSIES 49
§182. Contract Controversies; Public Procurement Unit Subject to Part X. ......................... 49
PART XII - PREFERENCES 49
§183. Definitions of Terms Used in this Part. ........................................................................... 49
§184. Preference; General. ........................................................................................................... 50
§185. Preference; Construction. .................................................................................................. 50
PART XIII - ETHICS IN PUBLIC CONTRACTING 51
DIVISION 1 - DEFINITIONS 51
§186. Definitions of Terms Used in this Part. ........................................................................... 51
DIVISION 2 - STANDARDS OF CONDUCT STATEMENT OF POLICY. 52
§187. Statement of Policy. ............................................................................................................ 52
§188. General Standards of Ethical Conduct. ........................................................................... 53
§189. Criminal Sanctions. ............................................................................................................ 53
§190. Employee Conflict of Interest. .......................................................................................... 53
§191. Employee Disclosure Requirements. ............................................................................... 54
§192. Gratuities and Kickbacks. .................................................................................................. 54
§193. Prohibition Against Contingent Fees. ............................................................................. 55
§194. Restrictions on Employment of Present and Former Employees. ............................... 55
§195. Use of Confidential Information. ..................................................................................... 57
§196. Civil and Administrative Remedies Against Employees Who Breach Ethical
Standards. ............................................................................................................................ 57
§197. Civil and Administrative Remedies Against Non-Employees Who Breach
Ethical Standards. ............................................................................................................... 58
§198. Recovery of Value Transferred or Received in Breach of Ethical Standards. ............ 59
DIVISION 3 - ETHICS COMMISSION 59
§199. Ethics Commission. ............................................................................................................ 59
§1100. Appeal of Decisions of the Ethics Commission. ............................................................ 60
TITLE 44 – GOVERNMENT PROCUREMENT
CHAPTER 1 - PROCUREMENT CODE
sRepublic of the Marshall Islands
Jepilpilin Ke Ejukaan
PROCUREMENT CODE ACT 1988
AN ACT to establish a procurement system and for purposes related thereto.
Commencement: November 28, 1988
Source: P.L. 1988-33
Amended By: P.L. 2009-28
PART I - PRELIMINARY
§101. Short Title.
This Chapter may be cited as the “Procurement Code (Act) 1988".[P.L. 1988-33, §1.]
PART II- GENERAL PROVISIONS
DIVISION 1 - INTERPRETATION
§102. Interpretation.
In this Chapter, unless the context in which they are used clearly requires a
different meaning, or a different definition is prescribed for a particular Part
or provision:
(a) “business” means any corporation, partnership, individual,
sole proprietorship, joint stock company, joint venture, or any
other private legal entity;
(b) “change order” means a written order signed by the
Procurement Officer, directing the contractor to make changes
which the Changes clause of the contract authorized the
Procurement Officer to order, with or without the consent of
the contractor;
(c) “Chief Procurement Officer” means the person holding the
position created in Section 113 of this Act, as head of the
central procurement office of the Government;
(d) “construction” means the process of building, altering,
repairing, improving, or demolishing any public structure or
building, or other public improvements of any kind to any
public real property. It does not include the routine operation,
routine repair, or routine maintenance of existing structures,
buildings, or real property;
(e) “contract” means all types of Government agreements,
regardless of what they may be called, for the procurement or
disposal of supplies, services, or construction;
(f) “contract modification” means any written alteration in
specifications, delivery point, rate of delivery, period of
performance, price, quantity, or other provisions of any
contract accomplished by mutual action of the parties to the
contract;
(g) “contractor” means any person having a contract with a
governmental body;
(h) “data” means recorded information, regardless of form or
characteristic;
(i) “designee” means a duly authorized representative of a
person holding a superior position;
(j) “employee” means an individual drawing a salary from a
governmental body, whether elected or not, and any non-
compensated individual performing personal services for any
governmental body;
(k) “government” means the executive, legislative and judicial
branch of the Government of the Republic of the Marshall
Islands and all its political subdivisions, including Local
Government Councils;
(1) “Governmental Body” means any department, commission,
council, board, bureau, committee, institution, legislative
body, agency, statutory corporation, or other establishment or
official of the Government, except that it does not include
private corporations in which the Government has an interest;
(m) “grant” means the furnishing by the Government of
assistance, whether financial or otherwise, to any person to
support a program authorized by law. It does not include an
award whose primary purpose is to procure an end product,
whether in the form of supplies, services, or construction; a
contract resulting from such an award is not a grant but a
procurement contract;
(n) “person” means any business, individual, union, committee,
club, other organization, or group of individuals;
(o) “procurement” means buying, purchasing, renting, leasing, or
otherwise acquiring any supplies, services, or construction. It
also includes all functions that pertain to the obtaining of any
supply, service, or construction, including description of
requirements, selection and solicitation of sources, preparation
and award of contract, and all phases of contract
administration;
(p) “Procurement Officer” means any person duly authorized to
enter into and administer contracts and make written
determinations with respect thereto. The term also includes an
authorized representative acting within the limits of authority;
(q) “public funds” means all Government monies, except that it
does not include funds exceeded by private corporations in
which the Government has an interest;
(r) “purchasing agency” means any governmental body other
than the Chief Procurement Officer which is authorized by this
Act or its implementing regulation, or by way of delegation
from the Chief Procurement Officer, to enter into contracts;
(s) “regulation” means a governmental body’s statement, having
general or particular applicability and future effect, designed
to implement, interpret, or prescribe law or policy, or
describing organization, procedure, or practice requirements;
(t) “services” means the furnishing of labor, time, or effort by a
contractor, not involving the delivery of a specific end product
other than reports which are merely incidental to the required
performance. This term shall not include employment
agreements or collective bargaining agreements;
(u) “supplies” means all property, including but not limited to
equipment, materials, printing, insurance, and leases of real
property, excluding land or a permanent interest in land; and
(v) “Using Agency” means any governmental body of the
Government which utilizes any supplies, services, or
construction procured under this Chapter. [P.L. 1988-33, §2.]
DIVISION 2 - PURPOSES, CONSTRUCTION AND APPLICATION
§103. Purposes.
(1) This Code shall be construed and applied to promote its underlying
purposes and policies.
(2) The underlying purposes and policies of this Chapter shall be:
(a) to simplify, clarify, and modernize the law governing
procurement by the Government;
(b) to permit the continued development of procurement policies
and practices;
(c) to make as consistent as possible the procurement laws among
the various jurisdictions;
(d) to provide for increased public confidence in the procedures
followed in public procurement;
(e) to ensure the fair and equitable treatment of all persons who
deal with the procurement system of the Government;
(f) to provide increased economy in Government procurement
activities and to maximize to the fullest extent practicable the
purchasing value of public funds of the Government;
(g) foster effective broad-based competition within the free
enterprise system; and
(h) to provide safeguards for the maintenance of a procurement
system of quality and integrity. [P.L. 1988-33, §3.]
§104. Supplementary General Principles of Law Applicable.
Unless displaced by the particular provisions of this Chapter, the principles
of law and equity, including the law merchant, and law relative to capacity
to contract, agency, fraud, misrepresentation, duress, coercion, mistake, or
bankruptcy shall supplement the provisions of this Chapter. [P.L. 1988-33, §4.]
§105. Requirement of Good Faith.
This Code requires all parties involved in the negotiation, performance, or
administration of Government contracts to act in good faith. [P.L. 1988-33, §5.]
§106. Application of this Act.
(1) This Chapter applies only to contracts solicited or entered into after
the effective date of this Chapter unless the parties agree to its
application to a contract solicited or entered into prior to the effective
date of this Chapter.
(2) This Chapter shall apply to every expenditure of public funds
irrespective of their source by this Government, acting through a
governmental body as defined herein, under any contract, except that
this Chapter shall not apply to either grants, or contracts between the
Government and its political subdivisions or other governments,
except as provided in Part XI of this Chapter. It shall also apply to the
disposal of Government supplies. Nothing in this Chapter or in
regulations promulgated hereunder shall prevent any governmental
body or political subdivision from complying with the terms and
conditions of any grant, gift, bequest, or cooperative agreement.
(3) This Chapter and its accompanying regulations shall apply to all
political subdivisions, including Local Government Councils, and
other local public agencies of this Government, except that the Policy
Office may permit optional use of selected portions of the
regulations. [P.L. 1988-33, §6.]
§107. Severability.
If any provision of this Chapter or any application thereof to any person or
circumstances is held invalid, such invalidity shall not affect other
provisions or application of this Chapter which can be given effect without
the invalid provisions or application, and to this end the provisions of this
Chapter are declared to be severable. [P.L. 1988-33, §7.]
§108. Specific Repealer.
All other acts and parts of acts inconsistent herewith are hereby repealed,
and all regulations heretofore promulgated with respect to procurement or
to disposal of supplies are hereby repealed. [P.L. 1988-33, §8.]
§109. Construction Against Implicit Repealer.
Since this Chapter is a general Act, no part of it shall be deemed to be
impliedly repealed by subsequent legislation if such construction of the
subsequent legislation can be reasonably avoided. [P.L. 1988-33, §9.]
DIVISION 3 - DETERMINATION
§110. Determinations.
Written determinations required by this Chapter shall be retained in the
appropriate official contract file of the Chief Procurement Officer or the
Purchasing Agency. [P.L. 1988-33, §10.]
PART III - PROCUREMENT ORGANIZATION
DIVISION 1 - GOVERNMENT PROCUREMENT POLICY OFFICE
§111. Creation and Membership of the Government Procurement Policy
Office.
(1) There is hereby created in the Office of the Chief Secretary the
government Procurement Policy Office which is referred to
hereinafter as the Policy Office.
(2) The Department of Finance and Office of the Auditor General are
authorized to provide such services as the Policy Office may request,
on such basis, reimbursable or otherwise, as may be agreed upon
between the Department of Finance and Office of the Auditor
General and the Policy Office. [P.L. 1988-33, §11.]
§112. Authority and duties of the Policy Office.
Except as otherwise provided in this Chapter, the Policy Office shall have
the authority and responsibility to promulgate regulations, consistent with
this Chapter, governing the procurement, management, control, and
disposal of any and all supplies, services, and construction to be procured
by the Government. The Policy Office shall consider and decide matters of
policy within the provisions of this Code including those referred to it by
the Chief Procurement Officer. The Policy Office shall have the power to
audit and monitor the implementation of its regulations and the
requirements of this Chapter, but shall not exercise authority over the award
or administration of any particular contract, or over any disputes, claim, or
litigation pertaining thereto. [P.L. 1988-33, §12.]
DIVISION 2 - CHIEF PROCUREMENT OFFICER
§113. Creation of the Office of the Chief Procurement Officer.
There is hereby created an Office of the Chief Procurement Officer, headed
by the Chief Procurement Officer. [P.L. 1988-33, §13.]
§114. Appointment and Qualifications.
The Public Service Commission, in consultation with the Policy Office, shall
appoint the Chief Procurement Officer. The Chief Procurement Officer shall
have the experience and qualifications necessary to perform the duties of his
office as set forth herein. [P.L. 1988-33, §14.]
§115. Authority of the Chief Procurement Officer.
(1) The Chief Procurement Officer shall serve as the central procurement
officer of the Government.
(2) Consistent with the provisions of this Chapter, the Chief Procurement
Officer may adopt operational procedures governing the internal
functions of the Office of the Chief Procurement Officer.
(3) Except as otherwise specifically provided in this Chapter, the Chief
Procurement, Officer shall, in accordance with regulations
promulgated by the Policy Officer:
(a) procure or supervise the procurement of all supplies, services,
and construction needed by the Government;
(b) exercise general supervision and control over all inventories of
supplies belonging to the Government; and
(c) establish and maintain programs for the inspection, testing,
and acceptance of supplies, services, and construction.[P.L. 1988-33, §15.]
§116. Delegation of Authority by the Chief Procurement Officer.
Subject to the regulations of the Policy Office, the Chief Procurement Officer
may delegate authority to designees or to any department, agency, or
official. [P.L. 1988-33, §16.]
DIVISION 3 - ORGANIZATION OF PUBLIC PROCUREMENT
§117. Centralization of Procurement Authority.
Except as otherwise provided in this Part, all rights, powers, duties, and
authority relating to the procurement of supplies, services, and construction,
and the management, control, warehousing, sale, and disposal of supplies,
services, and construction now vested in, or exercised by, any governmental
body under the several statutes relating thereto are hereby transferred to the
Policy Office and the Chief Procurement Officer, as provided in this
Chapter. [P.L. 1988-33, §17.]
§118. Authority to Contract for Certain Services.
(1) For the purpose of procuring the services of accountants, clergy,
physicians, lawyers, and dentists, any governmental body of the
Government may act as a Purchasing Agency and contract on its own
behalf for such services, subject to this Chapter and regulations
promulgated by the Policy Office. The Purchasing Agency shall
consult with the Chief Procurement Officer or a designee of such
officer when procuring such services.
(2) No contract for the services of legal counsel may be awarded without
the approval of the Attorney-General. [P.L. 1988-33, §18.]
§119. Exemptions.
(1) Unless otherwise ordered by regulation of the Policy Office, the
following supplies, services, and construction need not be procured
through the Office of the Chief Procurement Officer, but shall
nevertheless be procured by the appropriate Purchasing Agency
subject to the requirements of this Chapter and the regulations
promulgated by the Policy Office:
(a) bridge, highway, or other heavy specialized construction;
(b) works of art for museum and public display;
(c) published books, maps, periodicals, and technical
pamphlets; and
(d) architect-engineer and land surveying services as defined in
Section 151 of this Chapter.
(2) Supplies, services, and construction procured by the local
government council, the Marshall Islands Development Authority, or
the Kwajalein Atoll Development Authority need not be procured
through the Office of the Chief Procurement Officer, but shall
nevertheless be procured by the appropriate Purchasing Agency
subject to the requirements of this Chapter and the regulations
promulgated by the Policy Office. [P.L. 1988-33, §19.]
DIVISION 4 - PROCUREMENT REGULATIONS
§120. Procurement Regulations.
(1) Regulations shall be promulgated by the Policy Office in accordance
with the applicable provisions of the Administrative Procedure Act.
(2) The Policy Office shall not delegate its power to promulgate
regulations.
(3) No regulation shall change any commitment, right, or obligation of
the Government or of a contractor under a contract in existence on
the effective date of such regulation. [P.L. 1988-33, §20.]
DIVISION 5 - COORDINATION
§121. Collection of Data Concerning Public Procurement.
The Chief Procurement Officer shall cooperate with the Department of
Finance., Office of Planning, Budget Officer, and the Auditor-General in the
preparation of statistical data concerning the procurement, usage, and
disposition of all supplies, services, and construction, and shall be provided
such trained personnel by the Public Service Commission as may be
necessary to carry out this function. All Using Agencies shall furnish such
reports as the Chief Procurement Officer may require concerning usage,
needs, and stocks on hand, and the Chief Procurement Officer shall, with
the approval of the Secretary of Finance and the Attorney-General, have
authority to prescribe forms to be used by the Using Agencies in
requisitioning, ordering, and reporting of supplies, services, and
construction. [P.L. 1988-33, §21.]
DIVISION 6 - DUTIES OF THE ATTORNEY-GENERAL
§122. Duties of the Attorney-General.
The Attorney-General, or such officer as the Attorney-General may
designate, shall serve as legal counsel and provide necessary legal services
to the Policy Office and the Chief Procurement Officer. [P.L. 1988-33, §22.]
PART IV - SOURCE SELECTION AND CONTRACT FORMATION
DIVISION 1 - DEFINITIONS
§123. Definition of terms used in this Part.
As used in this Part:
(a) “cost-reimbursement contract” means a contract under which
a contractor is reimbursed for costs which are allowable and
allocable in accordance with the contract terms and the
provisions of this Chapter, and a fee, if any;
(b) “established catalogue price” means the price included in a
catalogue, price list, schedule, or other form that:
(i) is regularly maintained by a manufacturer or
contractor;
(ii) is either published or otherwise available for inspection
by customers; and
(iii) states prices at which sales are currently or were last
made to a significant number of any category of buyers
or buyers constituting the general buying public for the
supplies or services involved;
(c) “Invitation for Bids” means all documents, whether attached
or incorporated by reference, utilized for soliciting bids;
(d) “purchase description” means the words used in a solicitation
to describe the supplies, services, or construction to be
purchased, and includes specifications attached to, or made
part of, the solicitation;
(e) “Request for Proposals” means all documents, whether
attached or incorporated by reference, utilized for soliciting
proposals;
(f) “responsible bidder or offeror” means a person who has the
capability in all respects to perform fully the contract
requirements, and the integrity and reliability which will
assure good faith performance; and
(g) “responsive bidder” means a person who has submitted a bid
which conforms in all material respect to the Invitation for
Bids. [P.L. 1988-33, §23.]
DIVISION 2 - METHODS OF SOURCE SELECTION
§124. Methods of Source Selection.
Unless otherwise authorized by law, all Government contracts shall be
awarded by competitive sealed bidding, pursuant to Section 125 of this
Chapter, except as provided in Sections 126, 127, 128, 129, 130, or 1l9(1)(d) of
this Chapter. [P.L. 1988-33, §24, modified.]
§125. Competitive Sealed Bidding.
(1) Contracts shall be awarded by competitive sealed bidding except as
otherwise provided in Section 124 of this Act.
(2) An Invitation for Bids shall be issued and shall include a purchase
description, and all contractual terms and conditions applicable to the
procurement.
(3) Adequate public notice of the Invitation for Bids shall be given a
reasonable time prior to the date set forth therein for the opening of
bids, in accordance with regulations promulgated by the Policy
Office. Such notice may include publication in a newspaper of
general circulation for a reasonable time prior to bid opening.
(4) Bids shall be opened publicly in the presence of one or more
witnesses at the time and place designated in the Invitation for Bids.
The amount of each bid, and such other relevant information as may
be specified by regulation, together with the name of each bidder
shall be recorded. The record and each bid shall be open to public
inspection.
(5) Bids shall be unconditionally accepted without alteration or
correction, except as authorized in this Chapter. Bids shall be
evaluated based on the requirements set forth in the Invitation for
Bids, which may include criteria to determine acceptability such as
inspection, testing, quality, workmanship, delivery, and suitability
for a particular purpose. Those criteria that will affect the bid price
and be considered in evaluation for award shall be objectively
measurable, such as discounts, transportation costs, and total or life
cycle costs. The Invitation for Bids shall set forth the evaluation
criteria to be used. No criteria may be used in bid evaluation that are
not set forth in the Invitation for Bids.
(6) Correction or withdrawal of inadvertently erroneous bids before or
after award, or cancellation of awards or contracts based on such bid
mistakes, shall be permitted in accordance with regulations
promulgated by the Policy Office. After bid opening no changes in
bid prices or other provisions of bids prejudicial to the interest of the
Government or fair competition shall be permitted. Except as
otherwise provided by regulation, all decisions to permit the
correction or withdrawal of bids, or to cancel awards or contracts
based on bid mistakes, shall be supported by a written determination
made by the Chief Procurement Officer or head of a
Purchasing Agency.
(7) The contract shall be awarded with reasonable promptness by
written notice to the lowest responsible and responsive bidder whose
bid meets the requirements and criteria set forth in the Invitation for
Bids. In the event all bids for a construction project exceed available
funds as certified by the appropriate fiscal officer, and the low
responsive and responsible bid does not exceed such funds by more
than five percent (5%), the Chief Procurement Officer, or the head of
a Purchasing Agency, is authorized in situations where time or
economic considerations preclude re-solicitation or work of a reduced
scope, to negotiate and adjust the bid price including changes in the
bid requirements, with the low responsive and responsible bidder, in
order to bring the bid within the amount of available funds.
(8) When it is considered impractical to initially prepare a purchase
description to support an award based on price, an Invitation for Bids
may be issued requesting the submission of unpriced offers to be
followed by an Invitation for Bids limited to those bidders whose
offers have been qualified under the criteria set forth in the first
solicitation. [P.L. 1988-33, §25.]
§126. Competitive Sealed Proposals.
(1) When, under regulations promulgated by the Policy Office, the Chief
Procurement Officer, the head of a Purchasing Agency, or a designee
of either officer above the level of the Procurement Officer,
determines in writing that the use of competitive sealed bidding is
either not practicable or not advantageous to the Government, a
contract may be entered into by competitive sealed proposals. The
Policy Office may provided by regulation that it is either not
practicable or not advantageous to the Government to procure
specified types of supplies, services, or construction by competitive
sealed bidding.
(2) Proposals shall be solicited through a Request for Proposals.
(3) Adequate public notice of the Request for Proposals shall be given in
the same manner as provided in Section 125(3) of this Chapter.
(4) Proposals shall be opened so as to avoid disclosure of contents to
competing offerors during the process of negotiation. A Register of
Proposals shall be prepared in accordance with regulations
promulgated by the Policy Office, and shall be open for public
inspection after contract award.
(5) The Request for Proposals shall state the relative importance of price
and other evaluation factors.
(6) As provided in the Request for Proposals, and under regulations
promulgated by the Policy Office, discussions may be conducted with
responsible offerors who submit proposals determined to be
reasonably susceptible of being selected for award for the purpose of
clarification to assure full understanding of, and responsiveness to.
the solicitation requirements. Offerors shall be accorded fair and
equal treatment with respect to any opportunity for discussion and
revision of proposals, and such revisions may be permitted after
submission and prior to award for the purpose of obtaining best and
final offers. In conducting discussions, there shall be no disclosure of
any information derived from proposals submitted by competing
offerors.
(7) Award shall be made to the responsible offeror whose proposal is
determined in writing to be the most advantageous to the
Government taking into consideration price and the evaluation
factors set forth in the Request for Proposals. No other factors or
criteria shall be used in the evaluation. The contract file shall contain
the basis on which the award is made. [P.L. 1988-33, §26.]
§127. Small Purchases.
Any procurement not exceeding $25,000, or a lesser amount established by
regulation, may be made in accordance with small purchase procedures
promulgated by the Policy Office; provided, however, that procurement
requirements shall not be artificially divided so as to constitute a small
purchase under this Section. [P.L. 1988-33, §27.]
§128. Sole Source Procurement.
A contract may be awarded for a supply, service, or construction item
without competition when, under regulations promulgated by the Policy
Office, the Chief Procurement Officer, the head of a Purchasing Agency, or a
designee of either officer above the head of a Purchasing Agency, or a
designee of either officer above the level of the Procurement Officer
determines in writing that there is only one source for the required supply,
service, or construction item. [P.L. 1988-33, §28.]
§129. Emergency Procurement.
Notwithstanding any other provision of this Chapter, the Chief
Procurement Officer, the head of a Purchasing Agency, or a designee of
either officer may make or authorize others to make emergency
procurement when there exists a threat to public health, welfare, or safety
under emergency conditions as defined in regulations promulgated by the
Policy Office; provided, that such emergency procurement shall be made
with such competition as is practicable under the circumstances. A written
determination of the basis for the emergence and for the selection of the
particular contractor shall be included in the contract file. [P.L. 1988-33, §29.]
§130. Competitive Selection Procedures for Services Specified in
Section 18.
(1) The service specified in Section 118(1) of this Chapter, shall be
procured in accordance with this Section, except as authorized under
Section 128 or Section 129 of this Chapter.
(2) Persons engaged in providing the types of services specified in
Section 118(1) of this Chapter, may submit statements of
qualifications and expressions of interest in providing such types of
services. The Procurement Officer may specify a uniform format for
statements of qualifications. Persons may amend these statements at
any time by filing a new statement.
(3) Adequate notice of the need for such services shall be given by the
Purchasing Agency through a Request for Proposals. The Request for
Proposals shall describe the Services required, list the type of
information and data required of each offeror, and state the relative
importance of particular qualifications.
(4) The head of the Purchasing Agency or a designee of such officer may
conduct discussion with an offeror who has submitted a proposal to
determine such offeror’s qualifications for further consideration.
Discussion shall not disclose any information derived from proposals
submitted by other offerors.
(5) Award shall be made to the offeror determined in writing by the
head of the Purchasing Agency or a designee of such officer to be best
qualified based on the evaluation factors set forth in the Request for
Proposals, and negotiation of compensation determined to be fair and
reasonable. If compensation cannot be agreed upon with the best
qualified offeror, then negotiations will be formally terminated with
the selected offeror. If proposals were submitted by one or more
other offerors determined to be qualified, negotiations may be
conducted with such other offeror or offerors, in the order of their
respective qualification ranking, and the contract may be awarded to
the offeror then ranked as best qualified if the amount of
compensation is determined to be fair and reasonable. [P.L. 1988-33, §30.]
DIVISION 3 - CANCELLATION OF INVITATION FOR BIDS OR REQUESTS FOR
PROPOSALS
§131. Cancellation of Invitations for Bids or Requests for Proposals.
An Invitation for Bids, a Request for Proposals, or other solicitation may be
canceled, or any or all bids or proposals may be rejected in whole or in part
as may be specified in the solicitation, when it is in the best interests of the
Government in accordance with regulations promulgated by the Policy
Office. The reasons therefore shall be made part of the contract file.[P.L. 1988-33, §31.]
DIVISION 4 - QUALIFICATIONS AND DUTIES
§132. Responsibility of Bidders and Offerors.
(1) A written determination of non-responsibility of a bidder or offeror
shall be made in accordance with regulations promulgated by the
Policy Office. The unreasonable failure of a bidder or offeror to
promptly supply information in connection with an inquiry with
respect to responsibility may be grounds for a determination of non-
responsibility with respect to such bidder or offeror and such bidder
or offeror shall be disqualified.
(2) Information furnished by a bidder or offeror pursuant to this Section
shall not be disclosed outside of the Office of the Chief Procurement
Officer or the Purchasing Agency without prior written consent by
the bidder or offeror. [P.L. 1988-33, §32.]
§133. Pre-qualification of Suppliers.
Prospective suppliers may be prequalified for particular types of supplies,
services, and construction. Solicitation mailing lists of potential contractors
shall include but shall not be limited to such prequalified suppliers.[P.L. 1988-33, §33.]
§134. Cost or Pricing Data.
(1) A contractor shall, except as provided in Subsection (3) of this
Section, submit cost or pricing data and shall certify that, to the best
of its knowledge and belief, the cost or pricing data submitted was
accurate, complete, and current as of a mutually determined specified
date prior to the date of:
(a) the pricing of any contract awarded by competitive sealed
proposals under Section 126 of this Chapter, or pursuant to the
sole source procurement authority under Section 128 of this
Chapter, where the total contract price is expected to exceed an
amount established by Policy Office regulations; or
(b) the pricing of any change order or contract modification which
is expected to exceed an amount established by Policy Office
regulations.
(2) Any contract, change order, or contract modification under which a
certificate is required shall contain a provision that the price to the
Government, including profit or fee, shall be adjusted to exclude any
significant sums by which the Government finds that such price was
increased because the contractor-furnished cost or pricing data was
inaccurate, incomplete, or not current as of the date agreed upon
between the parties.
(3) The requirements of this Section need not be applied to contracts:
(a) where the contract price is based on adequate price
competition;
(b) where the contract price is based on established catalogue
prices or market prices;
(c) where the contract prices are set by law or regulation; or
(d) where it is determined in writing in accordance with
regulations promulgated by the Policy Office that the
requirements of this Section may be waived, and the reasons
for such waiver are stated in writing. [P.L. 1988-33, §34.]
DIVISION 5 - TYPES OF CONTRACTS
§135. Types of Contracts.
Subject to the limitations of this Section, any type of contract which will
promote the best interests of the Government may be used; provided, that
the use of a cost-plus-a percentage-of-cost contract is prohibited. A cost-
reimbursement contract may be used only when a determination is made in
writing that such contract is likely to be less costly to the Government than
any other type or that it is impracticable to obtain the supplies, services, or
construction required except under such a contract. [P.L. 1988-33, §35.]
§136. Approval of Accounting System.
Except with respect to firm fixed-price contracts, no contract type shall be
used unless it has been determined in writing by the Chief Procurement
Officer, the head of a Purchasing Agency, or a designee of either officer that:
(a) the proposed contractor’s accounting system will permit
timely development of all necessary cost data in the form
required by the specific contract type contemplated; and
(b) the proposed contractor’s accounting system is adequate to
allocate costs in accordance with generally accepted
accounting principles. [P.L. 1988-33, §36.]
§137. Multi-Term Contracts.
(1) Unless otherwise provided by law, a contract for supplies or services
may be entered into for any period of time deemed to be in the best
interests of the Government provided the term of the contract and
conditions of renewal or extension, if any, are included in the
solicitation and funds are available for the first fiscal period at the
time of contracting. Payment and performance obligations for
succeeding fiscal periods shall be subject to the availability and
appropriation of funds therefor.
(2) Prior to the utilization of a multi-term contract, it shall be determined
in writing:
(a) that estimated requirements cover the period of the contract
and are reasonably firm and continuing; and
(b) that such a contract will serve the best interests of the
Government by encouraging effective competition or
otherwise promoting economies in Government procurement.
(3) When funds are not appropriated or otherwise made available to
support continuation of performance in a subsequent fiscal period,
the contract shall be canceled and the contractor shall be reimbursed
for the reasonable value of any non-recurring costs incurred but not
amortized in the price of the supplies or services delivered under the
contract. The cost of cancellation may be paid from any
appropriations available for such purposes. [P.L. 1988-33, §37.]
DIVISION 6 - INSPECTION OF PLANT AND AUDIT OF RECORDS RIGHT TO
INSPECT PLANT.
§138. Right to Inspect Plant.
The Government may, at reasonable times, inspect the part of the plant or
place of business of a contractor or any subcontractor which is related to the
performance of any contract awarded or to be awarded by the Government.[P.L. 1988-33, §38.]
§139. Right to Audit Records.
(1) The Government may, at reasonable times and places, audit the
books and records of any person who has submitted cost or pricing
data pursuant to Section 134 of this Chapter to the extent that such
books and records relate to such cost or pricing data. Any person
who receives a contract, change order, or contract modification for
which cost or pricing data is required, shall maintain such books and
records that relate to such cost or pricing data for three (3) years from
the date of final payment under the contract, unless a shorter period
is otherwise authorized in writing.
(2) The Government shall be entitled to audit the books and records of a
contractor or any subcontractor under any negotiated contract or
subcontract other than a firm fixed-price contract to the extent that
such books and records relate to the performance of such contract or
subcontract. Such books and records shall be maintained by the
contractor for a period of three (3) years from the date of final
payment under the prime contract and by the subcontractor for a
period of three (3) years from the date of final payment under the
subcontract, unless a shorter period is otherwise authorized in
writing. [P.L. 1988-33, §39.]
DIVISION 7 - DETERMINATIONS AND REPORTS
§140. Finality of Determinations.
The determinations required by Sections 125(6), 126(1), 126(7), 128,129,
130(5), 132(1), 134(3), 135, 136, and 137(2) of this Act, are final and conclusive
unless they are clearly erroneous, arbitrary, capricious, or contrary to law.[P.L. 1988-33, §40.]
§141. Reporting of Anti-competitive Practices.
When for any reason collusion or other anti-competitive practices are
suspected among any bidders or offerors, a notice of relevant facts shall be
transmitted to the Attorney-General. [P.L. 1988-33, §41.]
§142. Retention of Procurement Records.
All procurement records shall be retained and disposed of in accordance
with records retention guidelines and schedules approved by the Attorney-
General. All retained documents shall be made available to the Attorney-
General or a designee upon request and proper receipt therefor.[P.L. 1988-33, §42.]
§143. Record of Procurement Actions Taken Under Section 128 and
Section 129.
(1) The Chief Procurement Officer shall maintain a record listing all
contracts made under Section 128 or Section 129 of this Chapter, for a
minimum of five (5) years. The record shall contain:
(a) each contractor’s name;
(b) the amount and type of each contract; and
(c) a listing of the supplies, services, or construction procured
under each contract.
(2) A copy of such record shall be submitted to the Nitijela on an annual
basis. The record shall be available for public inspection. [P.L. 1988-33, §43.]
PART V - SPECIFICATIONS
DIVISION 1 - DEFINITIONS
§144. Definitions of terms used in this Part.
“Specification”, means any description of the physical or functional
characteristics, or of the nature of a supply, service, or construction item. It
may include a description of any requirement for inspecting, testing, or
preparing a supply, service, or construction item for delivery. [P.L. 1988-33, §44.]
DIVISION 2 - SPECIFICATIONS
§145. Duties of the Policy Office.
The Policy Office shall promulgate regulations governing the preparation,
maintenance, and content of specifications for supplies, services, and
construction required by the Government. [P.L. 1988-33, §45.]
§146. Duties of the Chief Procurement Officer.
The Chief Procurement Officer shall prepare, issue, revise, maintain, and
monitor the use of specifications for supplies, services, and construction
required by the Government. [P.L. 1988-33, §46.]
§147. Exempted Items.
Specifications for supplies, services, or construction items procured under
Section 118 or exempted pursuant to Section 119 of this Chapter, may be
prepared by a Purchasing Agency in accordance with the provisions of this
Part and regulations promulgated hereunder. [P.L. 1988-33, §47.]
§148. Relationship with using Agencies.
The Chief Procurement Officer shall obtain expert advice and assistance
from personnel of Using Agencies in the development of specifications and
may delegate in writing to a Using Agency the Authority to prepare and
utilize its own specifications. [P.L. 1988-33, §48.]
§149. Maximum Practicable Competition.
All specifications shall seek to promote overall economy for the purpose
intended and encourage competition in satisfying the Government ‘s needs,
and shall not be unduly restrictive. [P.L. 1988-33, §49.]
§150. Specifications prepared by Architects and Engineers.
The requirements of this Article regarding the purposes and non-
restrictiveness of specifications shall apply to all specifications, including,
but not limited to, those prepared by architects, engineers, designers, and
draftsmen for public contracts. [P.L. 1988-33, §50.]
PART VI- PROCUREMENT OF CONSTRUCTION, ARCHITECT
ENGINEER AND LAND SURVEYING SERVICES
DIVISION 1 - DEFINITIONS
§151. Definitions of terms used in this Part.
As used in this Part:
(a) “Architect-Engineer and Land Surveying Services” are those
professional services within the scope of the practice of
architecture, professional engineering, or land surveying, as
hereinafter defined;
(b) “the practice of architecture”, means any professional service
such as consultation, investigation, evaluation, planning,
design, including aesthetic and structural design, or
responsible supervision of construction or operation, in
connection with any private or public buildings, structures, or
projects or the equipment or utilities thereof, or the accessories
thereto, wherein the safeguarding of life, health, or property is
concerned or involved, when such professional service
requires the application of the art and science of construction
based upon the principles of mathematics, aesthetics, and the
physical sciences;
(c) “the practice of professional engineering”, means any
professional service such as consultation, investigation,
evaluation, planning, design, or responsible supervision of
construction or operation, in connection with any public or
private utilities, structures, buildings, machines, equipment,
processes, works, or projects, wherein the safeguarding of life,
health, or property is concerned or involved when such
professional service requires the application of engineering
principles and data;
(d) “the practice of land surveying”, means the making of
cadastral surveys of areas for their correct determination and
description, either for conveyancing of or the establishment or
reestablishment of land boundaries or the plotting of lands
and subdivisions thereof. [P.L. 1988-33, §51.]
DIVISION 2 - MANAGEMENT OF CONSTRUCTION CONTRACTING
§152. Responsibility for selection of methods of Construction Contracting
Management.
The Policy Office shall promulgate regulations providing for as many
alternative methods of construction management as it may determine to be
feasible. These regulations shall:
(a) set forth criteria to be used in determining which method of
construction contracting management is to be used for a
particular project;
(b) grant to the Chief Procurement Officer, or the head of the
Purchasing Agency responsible for carrying out the
construction project, the discretion to select the appropriate
method of construction contracting management for a
particular project; and
(c) require the Procurement Officer to execute and include in the
contract file a written statement setting forth the facts which
led to the selection of a particular method of construction
contracting management for each project. [P.L. 1988-33, §52.]
DIVISION 3 - BONDS
§153. Bid Security.
(1) Bid security shall be required for all competitive sealed bidding for
construction contracts when the price is estimated by the
Procurement Officer to exceed $100,000. Bid security shall be a bond
provided by a United States Treasury listed surety company, or the
equivalent in cash, or otherwise supplied in a form satisfactory to the
Policy Office. Nothing herein prevents the requirement of such bonds
on construction contracts under $100,000 when the circumstances
warrant.
(2) Bid security shall be in an amount equal to at least 5% of the amount
of the bid.
(3) When the Invitation for Bids requires security, noncompliance
requires that the bid be rejected unless, pursuant to Policy Office
regulations, it is determined that the bid fails to comply in a non-
substantial manner with the security requirements.
(4) The Cabinet may exempt the required bid security by waiving in part
or in its entirety the amount of security in such cases where waiver of
such requirement will enable a local qualified firm to undertake such
construction contract won through bidding.
(5) After the bids are opened, they shall be irrevocable for the period
specified in the Invitation for Bids, except as provided in
Section 125(6) of this Chapter. If a bidder is permitted to withdraw its
bid before award, no action shall be had against the bidder or the bid
security. [P.L. 1988-33, §53.]
§154. Contract performance and payment bonds.
(1) When a construction contract is awarded in excess of $100,000, except
where the Cabinet has exempted under Section 153(4) of this Chapter,
bid security, the following bonds or security shall be delivered to the
Government and shall become binding on the parties upon the
execution of the contract:
(a) a performance bond satisfactory to the Government, executed
by a United States Treasury listed surety company, or other
surety acceptable to the Government, for an amount equal to
100% of the price specified in the contract; and
(b) a payment bond satisfactory to the Government, executed by a
United States Treasury listed surety company, or other surety
acceptable to the Government for the protection of all persons
supplying labor and material to the contractor or its
subcontractors for the performance of the work provided for in
the contract. The bond shall be in an amount equal to 100% of
the price specified in the contract.
(2) The Policy Office may promulgate regulations that authorize the
Chief Procurement Officer or head of a Purchasing Agency to reduce
the amount of performance and payment bonds to 50% of the
contract price for each bond.
(3) Nothing in this Section shall be construed to limit the authority of the
Government to require a performance bond or other security in
addition to those bonds, or in circumstances other than specified in
Subsection (1) of this Section.
(4) Every person who has furnished labor or material to the contractor or
its subcontractors for the work provided in the contract, with respect
to which a payment bond is furnished under this Section, and who
has not been paid in full therefor before the expiration of a period of
ninety (90) days after the day on which the last of the labor was done
or performed by such person or material was furnished or supplied
by such person for which such claim is made, shall have the right to
sue on the payment bond for the amount, or the balance thereof,
unpaid at the time of institution of such suit and to prosecute said
action for the sum or sums justly due such person; provided,
however, that any person having a direct contractual relationship
with a subcontractor of the contractor, but no contractual relationship
express or implied with the contractor furnishing said bond, shall
have a right of action upon the payment bond upon giving written
notice to the contractor within ninety (90) days from the date on
which such person did or performed the last of the labor or furnished
or supplied the last of the material upon which such claim is made,
stating with substantial accuracy the amount claimed and the name
of the party to whom the material was furnished or supplied or for
whom the labor was done or performed. Such notice shall be
personally served or served by mailing the same by registered or
certified mail, postage prepaid, in an envelope addressed to the
contractor at any place the contractor maintains an office or conducts
its business.
(5) Every suit instituted upon a payment bond shall be brought in the
High Court of the Marshall Islands, but no such suit shall be
commenced after the expiration of one year after the day on which
the last of the labor was performed or material was supplied by the
person bringing suit. The obligee named in the bond need not be
joined as a party in any such suit. [P.L. 1988-33, §54.]
§155. Bond Forms and Copies.
(1) The Policy Office shall promulgate by regulation the form of the
bonds required by this Part.
(2) Any person may request and obtain from the Government a certified
copy of a bond upon payment of the cost of reproduction of the bond
and postage, if any. A certified copy of a bond shall be prima facie
evidence of the contents, execution, and delivery of the original.[P.L. 1988-33, 55.]
DIVISION 4 - CONSTRUCTION CONTRACT CLAUSES AND FISCAL
RESPONSIBILITY CONTRACT CLAUSES AND THEIR ADMINISTRATION.
§156. Contract Clauses and Their Administration.
(1) The Policy Office shall promulgate regulations requiring the
inclusion in Government construction contracts of clauses providing
for adjustments in prices, time of performance, or other contract
provisions, as appropriate, and covering the following subjects:
(a) the unilateral right of the Government to order in writing:
(i) changes in the work within the scope of the
contract; and
(ii) changes in the time of performance of the contract that
do not alter the scope of the contract work;
(b) variation occurring between estimated quantities of work in a
contract and actual quantities;
(c) suspension of work ordered by the Government; and
(d) site conditions differing from those indicated in the contract,
or ordinarily encountered, except that differing site conditions
clauses promulgated by the Policy Office need not be included
in a contract:
(i) when the contract is negotiated;
(ii) when the contractor provides the site or design; or
(iii) when the parties have otherwise agreed with respect to
the risk of differing site conditions.
(2) Adjustments in price pursuant to clauses promulgated under
Subsection (1) of this Section shall be computed in one or more of the
following ways:
(a) by agreement on a fixed price adjustment before the
commencement of the pertinent performance or as soon
thereafter as practicable;
(b) by unit prices specified in the contract or subsequently agreed
upon;
(c) by the costs attributable to the events or situations under such
clauses with adjustment of profit or fee, all as specified in the
contract or subsequently agreed upon;
(d) in such other manner as the contracting parties may mutually
agree; or
(e) in the absence of agreement by the parties, by a unilateral
determination by the Government of the costs attributable to
the events or situations under such clauses with adjustment of
profit or fee, all as computed by the Government in accordance
with applicable sections of the regulations promulgated under
Part VIII and subject to the provisions of Part X of
this Chapter.
A contractor shall be required to submit cost or pricing data if any
adjustment in contract price is subject to the provisions of Section 134
of this Chapter.
(3) The Policy Office shall promulgate regulations requiring the
inclusion in Government construction contracts of clauses providing
for appropriate remedies and covering the following subjects:
(a) liquidated damages as appropriate;
(b) specified excuses for delay or nonperformance;
(c) termination of the contract for default; and
(d) termination of the contract in whole or in part for the
convenience of the Government.
(4) The Chief Procurement Officer or the head of a Purchasing Agency
may vary the clauses promulgated by the Policy Office under
Subsections (1) and (3) of this Section, for inclusion in any particular
Government construction contract; provided, that any variations are
supported by a written determination that states the circumstances
justifying such variations, and provided that notice of any such
material variations be stated in the Invitation for Bids or Request for
Proposals. [P.L. 1988-33, §56.]
§157. Fiscal Responsibility.
Every contract modification, change order, or contract price adjustment
under a construction contact with the Government shall be subject to prior
written certification by the fiscal officer of the entity responsible for funding
the project or the Contract, or other official responsible for monitoring and
reporting upon the status of the costs of the total project budget or contract
budget, as to the effect of the contract modification, change order, or
adjustment in contract budget. In the event that the certification of the fiscal
officer or other responsible official discloses a resulting increase in the total
project budget and/or the total contract budget, the Procurement Officer
shall not execute or make such contract modification, change order, or
adjustment in contract price unless sufficient funds are available therefor, or
the scope of the project or contract is adjusted so as to permit the degree of
completion that is feasible within the total project budget and/or total
contract budget as it existed prior to the contract modification, change order,
or adjustment in contract price under consideration; provided, however,
that with respect to the validity, as to the contractor, of any executed
contract modification, change order, or adjustment in contract price which
the contractor has reasonably relied upon, it shall be presumed that there
has been compliance with the provisions of this Section. [P.L. 1988-33, §57.]
DIVISION 5 - ARCHITECT-ENGINEER AND LAND SURVEYING SERVICES
§158. Architect-Engineer and Land Surveying Services.
(1) Architect-Engineer and land surveying services shall be procured as
provided in this Section except as authorized by Sections 127, 128,
and Section 129 of this Chapter.
(2) It is the policy of this Government to publicly announce all
requirements for architect-engineer and land surveying services and
to negotiate contracts for architect-engineer and land surveying
services on the basis of demonstrated competence and qualification
for the type of services required, and at fair and reasonable prices.
(3) In the procurement of architect-engineer and land surveying services,
the Chief Procurement Officer or the head of a Purchasing Agency
shall encourage firms engaged in the lawful practice of their
profession to submit annually a statement of qualifications and
performance data. Except as provided in Subsection (5) of this
Section, the Chief Procurement Officer or the head of a Purchasing
Agency, the Chief Planner, and the Procurement Officer shall
comprise the Architect-Engineer Selection Committee for each
architect-engineer and land surveying services contract over $25,000.
The Selection Committee for architect-engineer and land surveying
services contracts under this amount shall be established in
accordance with regulations promulgated by the Policy Office. The
Selection Committee shall evaluate current statements of
qualifications and performance data on file with the Government,
together with those that may be submitted by other firms regarding
the proposed contract. The Selection Committee shall conduct
discussions with no less than three (3) firms regarding the contract
and the relative utility of alternative methods of approach for
furnishing the required services, and then shall select therefrom, on
order of preference, based upon criteria established and published by
the Selection Committee, no less than three (3) of the firms deemed to
be the most highly qualified to provide the services required.
(4) The Procurement Officer shall negotiate a contract with the highest
qualified firm for architect-engineer or land surveying services at
compensation which the Procurement Officer determines in writing
to be fair and reasonable to the Government. In making this decision,
the Procurement Officer shall take into account the estimated value,
the scope, the complexity, and the professional nature of the services
to be rendered. Should the Procurement Officer be unable to
negotiate a satisfactory contract with the firm considered to be the
most qualified, at a price the Procurement Officer determines to be
fair and reasonable to the Government, negotiations with that firm
shall be formally terminated. The Procurement Officer shall then
undertake negotiations with the second most qualified firm. Failing
accord with the second most qualified firm, the Procurement Officer
shall formally terminate negotiations. The Procurement Officer shall
then undertake negotiations with the third most qualified firm.
Should the Procurement Officer be unable to negotiate a contract at a
fair and reasonable price with any of the selected firms, the
Procurement Officer shall select additional firms in order of their
competence and qualifications, and the Procurement Officer shall
continue negotiations in accordance with this Section until an
agreement is reached.
(5) The Kwajalein Atoll Development Authority and the Marshall
Islands Development Authority are exempt from the requirements of
this Section concerning members of the Architect-Engineer Selection
Committee. The Board of Directors of each of the Kwajalein Atoll
Development Authority and the Marshall Islands Development
Authority shall constitute the Architect-Engineer Selection
Committee for contracts for Architect-Engineer and Land Surveying
services awarded by such authorities. Except as provided in the
preceding sentence, the Kwajalein Atoll Development Authority and
the Marshall Islands Development Authority shall follow the
provisions of this Section. [P.L. 1988-33, §58.]
PART VII- MODIFICATION AND TERMINATION OF
CONTRACTS FOR SUPPLIES AND SERVICES
§159. Contract Clauses and Their Administration.
(1) The Policy Office may promulgate regulations permitting or
requiring the inclusion of clauses providing for adjustments in prices,
time of performance, or other contract provisions as appropriate
covering the following subjects:
(a) the unilateral right of the Government to order in writing:
(i) changes in the work within the scope of the
contract; and
(ii) temporary stopping of the work or delaying
performance; and
(b) variations occurring between estimated quantities of work in a
contract and actual quantities.
(2) Adjustments in price pursuant to clauses promulgated under
Subsection (1) of this Section shall be computed in one or more of the
following ways:
(a) by agreement on a fixed price adjustment before
commencement of the pertinent performance or as soon
thereafter as practicable;
(b) by unit prices specified in the contract or subsequently
agreed upon;
(c) by the costs attributable to the events or situations under such
clauses with adjustment for profit or fee, all as specified in the
contract or subsequently agreed upon;
(d) in such other manner as the contracting parties may mutually
agree; or
(e) in the absence of agreement by the parties, by a unilateral
determination by the Government of the costs attributable to
the events or situations under such clauses with adjustment of
profit or fee, all as computed by the Government in accordance
with applicable sections of the regulations promulgated under
Part VIII and subject to the provisions of Part X of
this Chapter.
A contractor shall be required to submit cost or pricing data if any
adjustment in contract price is subject to the provisions of Section 134
of this Chapter.
(3) The Policy Office may promulgate regulations including, but not
limited to, regulations permitting or requiring the inclusion in
Government contracts of clauses providing for appropriate remedies
and covering the following subjects:
(a) liquidated damages as appropriate;
(b) specified excuses for delay or nonperformance;
(c) termination of the contract for default; and
(d) termination of the contract in whole or in part for the
convenience of the Government.
(4) The Chief Procurement Officer or the head of a Purchasing Agency
may vary the clauses promulgated by the Policy Office under
Subsections (1) and (3) of this Section, for inclusion in any particular
Government contract; provided, that any variations are supported by
a written determination that states the circumstances justifying such
variation and provided that notice of any such material variation be
stated in the Invitation for Bids or Request for Proposals. [P.L. 1988-33, §59.]
PART VIII- COST PRINCIPLES
§160. Cost Principles Regulations Required.
The Policy Office shall promulgate regulations setting forth cost principles
which shall be used to determine the allowability of incurred costs for the
purpose of reimbursing costs under contract provisions which provide for
the reimbursement of costs, provided that if a written determination is
approved at a level above the Procurement Officer, such cost principles may
be modified by contract. [P.L. 1988-33, §60.]
PART IX - SUPPLY MANAGEMENT
DIVISION 1 - DEFINITIONS
§161. Definitions of terms used in this Part.
As used in this Part:
(a) “excess supplies” means any supplies other than expendable
supplies having a remaining useful life but which are no
longer required by the Using Agency in possession of the
supplies;
(b) “expendable supplies” means all tangible supplies other than
nonexpendable supplies;
(c) “non-expendable supplies” means all tangible supplies having
an original acquisition cost of over $100 per unit and a
probable useful life of more than one year;
(d) “supplies” means, for purposes of this Part, supplies owned by
the Government-see Section 2(u) of this Chapter;
(e) “surplus supplies” means any supplies other than expendable
supplies no longer having any use to the Government, this
includes obsolete supplies, scrap materials, and non-
expendable supplies that have completed their useful life
cycle. [P.L. 1988-33, §61.]
DIVISION 2 - REGULATIONS REQUIRED
§162. Supply Management Regulations Required.
The Policy Office shall promulgate regulations governing:
(a) the management of supplies during their entire life cycle;
(b) the sale, lease, or disposal of surplus supplies by public
auction, competitive sealed bidding, or other appropriate
method designated by regulation; provided, that no employee
of the owning or disposing agency shall be entitled to
purchase any such supplies; and
(c) transfer of excess supplies. [P.L. 1988-33, §62.]
DIVISION 3 - PROCEEDS
§163. Allocation of Proceeds from Sale or Disposal of Surplus Supplies.
Unless otherwise provided by law, proceeds from the sale, lease, or disposal
of surplus supplies shall be paid into the General Fund. [P.L. 1988-33, §63.]
PART X - LEGAL AND CONTRACTUAL REMEDIES
DIVISION 1 - PRE-LITIGATION RESOLUTION OF CONTROVERSIES
§164. Authority to resolve protested solicitations and awards.
(1) Any actual or prospective bidder, offeror, or contractor who is
aggrieved in connection with the solicitation or award of a contract
may protest to the Chief Procurement Officer or the head of a
Purchasing Agency. The protest shall be submitted in writing within
fourteen (14) days after such aggrieved person knows or should have
known of the facts giving rise thereto.
(2) The Chief Procurement Officer, the head of a Purchasing Agency, or a
designee of either officer shall have the authority, prior to the
commencement of an action in court concerning the controversy, to
settle and resolve a protest of an aggrieved bidder, offeror, or
contractor, actual or prospective, concerning the solicitation or award
of a contract. This authority shall be exercised in accordance with
regulations promulgated by the Policy Office.
(3) If the protest is not resolved by mutual agreement, the Chief
Procurement Officer, the head of a Purchasing Agency, or a designee
of either shall promptly issue a decision in writing. The decision shall
state the reasons for the action taken.
(4) A copy of the decision under Subsection (3) of this Section shall be
mailed or otherwise furnished immediately to the protestant and any
other party intervening.
(5) A decision under Subsection (3) of this Section shall be final and
conclusive, unless fraudulent, or any person adversely affected by the
decision commences an action in court in accordance with
Section 171(1) of this Chapter.
(6) In the event of a timely protest under Subsection (1) of this Section
and action under Section 171(1) of this Chapter, the Government shall
not proceed further with the solicitation or with the award of the
contract until the Chief Procurement Officer, after consultation with
the head of the Using Agency or the head of the Purchasing Agency,
makes a written determination that the award of the contract without
delay is necessary to protect substantial interests of the Government.
(7) In addition to any other relief, when a protest is sustained and the
protesting bidder or offeror should have been awarded the contract
under the solicitation but is not, then the protesting bidder or offeror
shall be entitled to the reasonable costs incurred in connection with
the Solicitation, including bid preparation costs other than attorney’s
fees. [P.L. 1988-33, §64.]
§165. Authority to Debar or Suspend.
(1) After reasonable notice to the person involved and reasonable
opportunity for that person to be heard, the Chief Procurement
Officer or the head of a Purchasing Agency, after consultation with
the Using Agency and the Attorney-General shall have authority to
debar a person for cause from consideration for award of contracts.
The debarment shall not be for a period of more than three (3) years.
The same officer, after consultation with the Using Agency and the
Attorney-General, shall have authority to suspend a person from
consideration for award of contracts if there is probable cause for
debarment. The suspension shall not be for a period exceeding three
(3) months. The authority to debar or suspend shall be exercised in
accordance with regulations promulgated by the Policy Office.
(2) The causes for debarment or suspension include the following:
(a) conviction for commission of a criminal offense as an incident
to obtaining or attempt to obtain a public or private contract or
subcontract, or in the performance of such contract or
subcontract;
(b) conviction under Marshall Islands statutes for cheating,
embezzlement, theft, forgery, bribery, falsification or
destruction of records, receiving stolen property, or any other
offense indicating a lack of business integrity or business
honesty which currently, seriously, and directly affects
responsibility as a Government contractor;
(c) conviction under Marshall Islands unfair business practices or
antitrust statutes arising out of the submission of bids or
proposals;
(d) violation of contract provisions, as set forth below, of a
character which is regarded by the Chief Procurement Officer
or the head of a Purchasing Agency to be so serious as to
justify debarment action:
(i) deliberate failure without good cause to perform in
accordance with the specifications or within the time
limit provided in the contract; or
(ii) a recent record of failure to perform or of unsatisfactory
performance in accordance with the terms of one or
more contracts; provided, that failure to perform or
unsatisfactory performance caused by acts beyond the
control of the contractor shall not be considered to be a
basis for debarment;
(e) any other cause the Chief Procurement Officer or the head of a
Purchasing Agency determines to be so serious and
compelling as to affect responsibility as a Government
contractor, including debarment by another governmental
entity for any cause listed in regulations of the Policy Office;
and
(f) for violation of the ethical standards set forth in Part XIII of
this Chapter.
(3) The Chief Procurement Officer or the head of a Purchasing Agency
shall issue a written decision to debar or suspend. The decision shall
state the reasons for the action taken.
(4) A copy of the decision under Subsection (3) of this Section shall be
mailed or otherwise furnished immediately to the debarred or
suspended person and any other party intervening.
(5) A decision under Subsection (3) of this Section shall be final and
conclusive, unless fraudulent, or the debarred or suspended person
commences an action in court in accordance with Section 171(2) of
this Chapter. [P.L. 1988-33, §65.]
§166. Authority to resolve contract and breach of contract controversies.
(1) This Section applies to controversies between the Government and a
contractor and which arise under, or by virtue of, a contract between
them. This includes without limitation controversies based upon
breach of contract, mistake, misrepresentation, or other cause for
contract modification or rescission.
(2) The Chief Procurement Officer, the head of a Purchasing Agency, or a
designee of either officer is authorized, prior to commencement of an
action in a court concerning the controversy, to settle and resolve a
controversy described in Subsection (1) of this Section. This authority
shall be exercised in accordance with regulations promulgated by the
Policy Office.
(3) If such a controversy is not resolved by mutual agreement, the Chief
Procurement Officer, the head of a Purchasing Agency, or the
designee of either officer shall promptly issue a decision in writing.
The decision shall state the reasons for the action taken.
(4) A copy of the decision under Subsection (3) of this Section shall be
mailed or otherwise furnished immediately to the contractor.
(5) The decision under Subsection (3) of this Section shall be final and
conclusive, unless fraudulent, or the contractor commences an action
in court in accordance with Section 171(3) of this Chapter.
(6) If the Chief Procurement Officer, the head of a Purchasing Agency, or
the designee of either officer does not issue the written decision
required under Subsection (3) of this Section within 120 days after
written request for a final decision, or within such longer period as
may be agreed upon by the parties, then the contractor may proceed
as if an adverse decision had been received. [P.L. 1988-33, §66.]
DIVISION 2 - SOLICITATIONS OR AWARDS IN VIOLATION OF LAW
§167. Applicability of this Division.
The provisions of this Division apply where it is determined
administratively, or upon an administrative or judicial review, that a
solicitation or award of a contract is in violation of law. [P.L. 1988-33, §67.]
§168. Remedies prior to an award.
If prior to award it is determined that a solicitation or proposed award of a
contract is in violation of law, then the solicitation or proposed award
shall be:
(a) canceled; or
(b) revised to comply with the law. [P.L. 1988-33, §68.]
§169. Remedies after an award.
If after an award it is determined that a solicitation or award of a contract is
in violation of law, then:
(a) if the person awarded the contract has not acted fraudulently
or in bad faith:
(i) the contract may be ratified and affirmed, provided it is
determined that doing so is in the best interests of the
Government; or
(ii) the contract may be terminated and the person awarded
the contract shall be compensated for the actual
expenses reasonably incurred under the contract, plus a
reasonable profit, prior to the termination;
(b) if the person awarded the contract has acted fraudulently or in
bad faith:
(i) the contract may be declared null and void; or
(ii) the contract may be ratified and affirmed if such action
is in the best interests of the Government, without
prejudice to the Government’s rights to such damages
as may be appropriate. [P.L. 1988-33, §69.]
DIVISION 3 - INTEREST
§170. Interest.
Interest on amounts ultimately determined to be due to a contractor or the
Government shall be payable at the statutory rate applicable to judgments
from the date the claim arose through the date of decision or judgment,
whichever is later. [P.L. 1988-33, §70.]
DIVISION 4 - JURISDICTION LIMITATION ON ACTIONS
§171. Jurisdiction.
(1) The High Court shall have jurisdiction over an action between the
Government and a bidder, offerror or contract, prospective or actual,
to determine whether a solicitation or a award of contract is in
accordance with the Constitution of the Marshall Islands, statutes
regulations, and terms and conditions of the solicitation. The High
Court shall have such jurisdiction, whether the actions are at law or
in equity, and whether the actions are for monetary damages or for
declaratory, injunctive, or other equitable relief.
(2) The High Court shall have jurisdiction over an action between the
Government and a person who is subject to a suspension or
debarment proceeding, to determine whether the debarment or
suspension is in accordance with the Constitution of the Marshall
Islands, statutes, and regulations. The High Court shall have such
jurisdiction, whether the actions are at law or in equity, and whether
the actions are for declaratory, injunctive, or other equitable relief.
(3) The High Court shall have jurisdiction over an action between the
Government and a contractor, for any cause of action which arises
under, or by virtue of, the contract, whether the action is at law or in
equity, whether the action is on the contract or for a breach of the
contract, and whether the action is for monetary damages or
declaratory, injunctive, or other equitable relief.
(4) In any judicial action under this Section, factual or legal
determinations by employees, agents, or other persons appointed by
the Government shall have no finality and shall not be conclusive,
notwithstanding any contract provision, regulation, or rule of law to
the contrary, except to the extent provided in Section 140 of this
Chapter. [P.L. 1988-33, §71.]
§172. Time limitations on actions.
(1) Any action under Section 171(1) of this Chapter, shall be initiated as
follows:
(a) within thirty (30) days after the aggrieved person knows or
should have known of the facts giving rise to the action; or
(b) within fourteen (14) days after receipt of a final administrative
decision pursuant to Section 164(3) of this Chapter.
(2) Any action under Section 171(2) of this Chapter, shall be commenced
within six (6) months after receipt of the decision of the Chief
Procurement Officer or head of a Purchasing Agency under
Section 165(3) of this Chapter, or the decision of the Ethics
Commission under Section 197(2)(c) of this Chapter, whichever
is applicable.
(3) The statutory limitations on an action on a contract or for breach of
contract shall apply to any action commenced pursuant to
Section 171(3) of this Chapter. [P.L. 1988-33, §72.]
PART XI- INTERGOVERNMENTAL RELATIONS
DIVISION 1 - DEFINITIONS
§173. Definitions of terms used in this Part.
As used in this Part:
(a) “cooperative purchasing” means procurement conducted by,
or on behalf of, more than one Public Procurement Unit, or by
a Public Procurement Unit with an External Procurement
Activity;
(b) “External Procurement Activity” means any buying
organization not located in this Republic which, if located in
this Republic, would qualify as a Public Procurement Unit. An
agency of the Federated States of Micronesia, Republic of
Palau and the United States is an External Procurement
Activity;
(c) “Government Public Procurement Unit” means the office of
the Chief Procurement Officer and any other Purchasing
Agency of this Government;
(d) “Local Public Procurement Unit” means any Local
Government Council or public agency of any Local
Government Council, public authority, educational, health, or
other institution, and to the extent provided by law, any other
entity which expends public funds for the procurement of
supplies, services, and construction, and any nonprofit
corporation operating a charitable hospital.
(e) “Public Procurement Unit” means either a Local Government
Public Procurement Unit or a National Government Public
Procurement Unit. [P.L. 1988-33, §73.]
DIVISION 2 - COOPERATIVE PURCHASING
§174. Cooperative Purchasing Authorized.
Any Public Procurement Unit may either participate in, sponsor, conduct, or
administer a cooperative purchasing agreement for the procurement of any
supplies, services, or construction with one or more Public Procurement
Units or External Procurement Activities in accordance with an agreement
entered into between the participants. Such cooperative purchasing may
include, but is not limited to, joint or multi-party contracts between Public
Procurement Units and open-ended Government Public Procurement Unit
Contracts which are available to Local Public Procurement Units.[P.L. 1988-33, §74.]
§175. Sale, Acquisition, or Use of Supplies by a Public Procurement Unit.
Any Public Procurement Unit may sell to, acquire from, or use any supplies
belonging to another Public Procurement Unit or External Procurement
Activity independent of the requirements of Parts IV and IX of this Chapter.[P.L. 1988-33, §75.]
§176. Cooperative Use of Supplies or Services.
Any Public Procurement Unit may enter into an agreement, independent of
the requirements of Parts IV and IX of this Chapter, with any other Public
Procurement Unit or External Procurement Activity for the cooperative use
of supplies or services under the terms agreed upon between the parties.[P.L. 1988-33, §76.]
§177. Joint Use of Facilities.
Any Public Procurement Unit may enter into agreements for the common
use or lease of warehousing facilities, capital equipment, and other facilities
with another Public Procurement Unit or an External Procurement Activity
under the terms agreed upon between the parties. [P.L. 1988-33, §77.]
§178. Supply of Personnel, Information, and Technical Services.
(1) Any Public Procurement Unit is authorized, in its discretion, upon
written request from another Public Procurement Unit or External
Procurement Activity, to provide personnel to the requesting Public
Procurement Unit or External Procurement Activity. The Public
Procurement Unit or External Procurement Activity making the
request shall pay the Public Procurement Unit providing the
Personnel the direct and indirect cost of furnishing the personnel, in
accordance with an agreement between the parties.
(2) The informational, technical, and other services of any Public
Procurement Unit may be made available to any other Public
Procurement Unit or External Procurement Activity; provided, that
the requirements of the Public Procurement Unit tendering the
services shall have precedence over the requesting Public
Procurement Unit or External Procurement Activity. The requesting
Public Procurement Unit or External Procurement Activity shall pay
for the expenses of the services so provided, in accordance with an
agreement between the parties.
(3) Upon request, the Chief Procurement Officer may make available to
Public Procurement Units or External Procurement Activities the
following services, among others:
(a) standard forms;
(b) printed manuals;
(c) product specifications and standards;
(d) quality assurance testing services and methods;
(e) qualified products lists;
(f) source information;
(g) common use commodities listings;
(h) supplier pre-qualification information;
(i) supplier performance ratings;
(j) debarred and suspended bidders lists;
(k) forms for Invitations for Bids, Requests for Proposals,
Instructions to Bidders, General Contract Provisions, and other
contract forms; and
(l) contracts or published summaries thereof, including price and
time of delivery information.
(4) The Government, through the Chief Procurement Officer, may
provide the following technical services, among others:
(a) development of product specifications;
(b) development of quality assurance test methods, including
receiving, inspection and acceptance procedures;
(c) use of product testing and inspection facilities; and
(d) use of personnel training programs.
(5) The Chief Procurement Officer may enter into contractual
arrangements and publish a schedule of fees for the services
provided under Subsections (3) and (4) of this Section. [P.L. 1988-33, §78.]
§179. Use of Payments Received by a Supplying Public Procurement Unit.
All payments from any Public Procurement Unit or External Procurement
Activity received by a Public Procurement Unit supplying personnel or
services shall be available as authorized by law. [P.L. 1988-33, §79.]
§180. Public procurement units in compliance with code requirements.
Where the Public Procurement Unit or External Procurement Activity
administering a cooperative purchase complies with the requirements of
this Chapter, any Public Procurement Unit participating in such purchase
shall be deemed to have complied with this Chapter. Public Procurement
Units may not enter into a cooperative purchasing agreement for the
purpose of circumventing this Chapter. [P.L. 1988-33, §80.]
§181. Review of Procurement Requirements.
To the extent possible, the Chief Procurement Officer may collect
information concerning the type, cost, quality, and quantity of commonly
used supplies, services, or construction being procured or used by
Government Public Procurement Units. The Chief Procurement Officer may
also collect such information from Local Public Procurement Units. The
Chief Procurement Officer may make available all such information to any
Public Procurement Unit upon request. [P.L. 1988-33, §81.]
DIVISION 3 - CONTRACT CONTROVERSIES
§182. Contract Controversies; Public Procurement Unit Subject to Part X.
Under a cooperative purchasing agreement, controversies arising between
an administering Public Procurement Unit and its bidders, offerors, or
contractors shall be resolved in accordance with Part X. [ P.L. 1988-33, §82.]
PART XII - PREFERENCES
§183. Definitions of Terms Used in this Part.
As used in this Part:
(a) “Marshall Islands Contractor” means a natural person who is a
citizen of the Marshall Islands or a company or other entity
doing business in the Marshall Islands, the assets of which are
at least sixty percent (60%) owned and controlled in fact by
natural persons who are citizens of the Marshall Islands; and
(b) “United States Contractor” means a natural person who is a
citizen of the United States or a company or other entity doing
business in the United States, the assets of which are at least
sixty percent (60%) owned and controlled in fact by natural
persons who are citizens of the United States and/or citizens of
the Marshall Islands. [P.L. 1988-33, §83.]
§184. Preference; General.
All contracts bid under Section 125 of this Chapter, for the procurement of
services, supplies, material and equipment, other than contracts for the
construction, alteration, or repair of any building or public work, shall be
awarded to the Marshall Islands contractor with the lowest qualified bid;
provided, that the bid of said Marshall Islands contractor does not exceed
110 percent of the amount of the lowest qualified bid from a non-Marshall
Islands contractor for such contract. [P.L. 1988-33, §84.]
§185. Preference; Construction.
(1) All contracts bid under Section 125 of this Chapter, for the
procurement of construction, alteration, or repair of any building or
public work with a project cost estimated by the Purchasing Agency
to be $200,000, or less, shall be awarded to the Marshall Islands
contractor with the lowest qualified bid; provided, that the bid of said
Marshall Islands contractor does not exceed 110 percent of the
amount of the lowest qualified bid from a non-Marshall Islands
contractor for such contract.
(2) Subject to Section 185(3) of this Chapter, all contracts bid under
Section 125 of this Act, for construction, alteration, or repair of any
building or public work with a project cost estimated by the
Purchasing Agency to be greater than $200,000 shall be awarded to
the Marshall Islands Contractor or the United States Contractor with
the lowest qualified bid; provided, that the bid of such contractor
does not exceed 110 percent of the amount of the lowest qualified bid
from a non-Marshall Islands or non-United States contractor for such
contract.
(3) The preference provided to United States Contractors under
Section 185(2) of this Act, shall be effective upon, and subject to,
implementation of the agreement referred to in Section 8 of Nitijela
Resolution Number 62 and Section 106(b) of United States Public Law
99-239. [P.L. 1988-33, §85.]
PART XIII - ETHICS IN PUBLIC CONTRACTING
DIVISION 1 - DEFINITIONS
§186. Definitions of Terms Used in this Part.
As used in this Part:
(a) “blind trust” means an independently managed trust which
the employee beneficiary has no management rights and in
which the employee beneficiary is not given notice of
alterations in, or other dispositions of, the property subject to
the trust;
(b) “confidential information” means any information which is
available to an employee only because of the employee’s status
as an employee of this Government and is not a matter of
public knowledge or available to the public on request;
(c) “conspicuously” means written in such special or distinctive
format, print, or manner that a reasonable person against
whom it is to operate ought to have noticed it;
(d) “direct or indirect participation” means involvement through
decision, approval, disapproval, recommendation, preparation
of any part of a purchase request, influencing the content of
any specification or procurement standard, rendering of
advice, investigation, auditing, or in any other advisory
capacity;
(e) “financial interest” means:
(i) ownership of any interest or involvement in any
relationship from which, or as a result of which, a
person within the past year has received, or is presently
or in the future entitled to receive, more than $100,000
per year, or its equivalent;
(ii) ownership of such interest in any property or any
business as may be specified by the Ethics Commission;
or
(iii) holding a position in a business such as an officer,
trustee, partner, employee, or the like, or holding any
position of management;
(f) “gratuity” means a payment, loan, subscription, advance,
deposit of money, services, or anything of more than nominal
value, present or promised, unless consideration of
substantially equal or greater value is received;
(g) ”“immediate family” means a spouse, children, parents,
brothers and sisters, and such other relatives as may be
designated by the Ethics Commission;
(h) “official responsibility” means direct administrative or
operating authority, whether intermediate or final, either
exercisable alone or with others, either personally or through
subordinates, to approve, disapprove, or otherwise direct
Government action; and
(i) “purchase request” means that document whereby a Using
Agency requests that a contract be entered into for a specified
need, and may include, but is not limited to, the technical
description of the requested item, delivery schedule,
transportation, criteria for evaluation, suggested sources of
supply, and information supplied for the making of any
written determination required by this Act. [P.L. 1988-33, §86.]
DIVISION 2 - STANDARDS OF CONDUCT STATEMENT OF POLICY.
§187. Statement of Policy.
Public employment is a public trust. It is the policy of the Government to
promote and balance the objective of facilitating the recruitment and
retention of personnel needed by the Government. Such policy is
implemented by prescribing essential standards of ethical conduct without
creating unnecessary obstacles to entering public service.
Public employees must discharge their duties impartially so as to assure fair
competitive access to governmental procurement by responsible contractors.
Moreover, they should conduct themselves in such manner as to foster
public confidence in the integrity of the Government procurement
organization.
To achieve the purpose of this Part, it is essential that those doing business
with the Government also observe the ethical standards prescribed herein.[P.L. 1988-33, §87.]
§188. General Standards of Ethical Conduct.
(1) Any attempt to realize personal gain through public employment by
conduct inconsistent with the proper discharge of the employee’s
duties is a breach of a public trust.
In order to fulfill this general prescribed standard, employees must
also meet the specific standards, set forth in: Sections 190, 191, 192,
193, 194, and 195, of this Act.
(2) Any effort to influence any public employee to breach the standards
of ethical conduct set forth in this Section and Sections 190 through
Section 195 of this Chapter is also a breach of ethical standards.[P.L. 1988-33, §88.]
§189. Criminal Sanctions.
To the extent that violations of the ethical standards set forth in this Part
constitute violations of the Criminal Code, they shall be punishable as
provided therein. Such sanctions shall be in addition to the civil remedies
set forth in this Part. [P.L. 1988-33, §89.]
§190. Employee Conflict of Interest.
(1) It shall be a breach of ethical standards for any employee to
participate directly or indirectly in a procurement when the employee
knows that:
(a) the employee or any member of the employee’s immediate
family has a financial interest pertaining to the procurement;
(b) a business or organization in which the employee, or any
member of the employee’s immediate family, has a financial
interest pertaining to the procurement; or
(c) any other person, business, or organization with whom the
employee or any member of the employee’s immediate family
is negotiating or has an arrangement concerning prospective
employment is involved in the procurement.
(2) Where an employee or any member of the employee’s immediate
family holds a financial interest in a blind trust or a Government-
sponsored corporation wherein the Government holds an interest, the
employee shall not be deemed to have a conflict of interest with
regard to matters pertaining to that financial interest; provided, that
disclosure of the existence of the blind trust has been made to the
Ethics Commission.
(3) Upon discovery of an actual or potential conflict of interest, an
employee shall promptly file a written statement of disqualification
and shall withdraw from further participation in the transaction
involved. The employee may, at the same time, apply to the Ethics
Commission in accordance with Section 199(4) of this Chapter, for an
advisory opinion as to what further participation, if any, the
employee may have in the transaction.
(4) Notice of this prohibition shall be provided in accordance with
regulations promulgated by the Ethics Commission. [P.L. 1988-33, §90.]
§191. Employee Disclosure Requirements.
(1) Any employee, who has, or obtains any benefit from, any
Government contract with a business in which the employee has a
financial interest shall report such benefit to the Ethics Commission:
provided, however, that this Section shall not apply to a contract with
a business where the employee’s interest in the business has been
placed in a disclosed blind trust.
(2) Any employee who knows or should have known of such benefit,
and fails to report such benefit to the Ethics Commission, is in breach
of the ethical standards of this Section.
(3) Notice of this requirement shall be provided in accordance with
regulations promulgated by the Ethics Commission. [P.L. 1988-33, §91.]
§192. Gratuities and Kickbacks.
(1) It shall be a breach of ethical standards for any person to offer, give,
or agree to give any employee or former employee, or for any
employee or former employee to solicit, demand, accept, or agree to
accept from another person, a gratuity or an offer of employment in
connection with any decision, approval, disapproval,
recommendation, preparation of any part of a program requirement
or a purchase request, influencing the content of any specification or
procurement standard, rendering of advice, investigation, auditing,
or in any other advisory capacity in any proceeding or application,
request for ruling, determination, claim or controversy, or other
particular matter, pertaining to any program requirement or a
contract or subcontract, or to any solicitation or proposal therefor.
(2) It shall be a breach of ethical standards for any payment, gratuity, or
offer of employment to be made by or on behalf of a subcontractor
under a contract to the prime contractor or higher tier subcontractor
or any person associated therewith, as an inducement for the award
of a subcontract or order.
(3) The prohibition against gratuities and kickbacks prescribed in this
Section shall be conspicuously set forth in every contract and
solicitation therefor. [P.L. 1988-33, §92.]
§193. Prohibition Against Contingent Fees.
(1) It shall be a breach of ethical standards for a person to be retained, or
to retain a person, to solicit or secure a Government contract upon an
agreement or understanding for a commission, percentage,
brokerage, or contingent fee, except for retention of bona fide
employees or bonafide established commercial selling agencies for
the purpose of securing business.
(2) Every person, before being awarded a Government contract, shall
represent. in writing, that such person has not retained anyone in
violation of Subsection (1) of this Section. Failure to do so constitutes
a breach of ethical standards.
(3) The representation prescribed in Subsection (2) of this Section shall be
conspicuously set forth in every contract and solicitation therefor.[P.L. 1988-33, §93.]
§194. Restrictions on Employment of Present and Former Employees.
(1) Except as may be permitted by regulations or rulings of the Ethics
Commission, it shall be a breach of ethical standards for any
employee who is participating directly or indirectly in the
procurement process to become or be, while such an employee, the
employee of any person contracting with the governmental body by
whom the employee is employed. Notice of this provision shall be
provided in accordance with regulations promulgated by the Ethics
Commission.
(2) It shall be a breach of ethical standards for any former employee
knowingly to act as a principal, or as an agent for anyone other than
the Government, in connection with any:
(a) judicial or other proceeding, application, request for a ruling,
or other determination;
(b) contract;
(c) claim: or
(d) charge or controversy, in which the employee participated
personally and substantially through decision, approval,
disapproval, recommendation, rendering of advice,
investigation, or otherwise while an employee, where the
Government is a party or has a direct and substantial interest.
(3) It shall be a breach of ethical standards for any former employee,
within one year after cessation of the former employee’s official
responsibility, knowingly to act as a principal, or as an agent for
anyone other than the Government, in connection with any:
(a) judicial or other proceeding, application, request for a ruling,
or other determination;
(b) contract;
(c) claim; or
(d) charge or controversy, in matters which were within the
former employee’s official responsibility, where the
Government is a party or has a direct or substantial interest.
(4) It shall be a breach of ethical standards for a business in which an
employee has a financial interest knowingly to act as a principal, or
as an agent for anyone other than the Government, in connection
with any:
(a) judicial or other proceeding, application, request for a ruling,
or other determination;
(b) contract;
(c) claim; or
(d) charge or controversy, in which the employee either
participates personally and substantially through decision,
approval, disapproval, recommendation, the rendering of
advice, investigation, or otherwise, or which is the subject of
the employee’s official responsibility, where the Government
is a party or has a direct and substantial interest.
(5) It shall be a breach of ethical standards for any former employee,
unless the former employee’s last annual salary did not exceed
$30,000, to engage in selling or attempting to sell supplies, services, or
construction to the Government for one year following the date
employment ceased.
The term “sell” as used herein means signing a bid, proposal, or contract;
negotiating a contract; contacting any employee for the purpose of
obtaining, negotiating, or discussing changes in specifications, price, cost
allowances, or other terms of a contract; settling disputes concerning
performance of a contract; or any other liaison activity with a view toward
the ultimate consummation of a sale although the actual contract therefor is
subsequently negotiated by another person; provided, however, that this
Section is not intended to preclude a former employee from accepting
employment with private industry solely because the former employee’s
employer is a contractor with this Government, nor shall a former employee
be precluded from serving as a consultant to the Government.[P.L. 1988-33, §94.][threshold changed from $25,000 to $30,000 by P.L.2009-28]
§195. Use of Confidential Information.
It shall be a breach of ethical standards for any employee or former
employee knowingly to use confidential information for actual or
anticipated personal gain, or for the actual or anticipated personal gain of
any other person. [P.L. 1988-33, §95.]
§196. Civil and Administrative Remedies Against Employees Who Breach
Ethical Standards.
(1) Civil and administrative remedies against employees which are in
existence on the effective date of this Chapter shall not be impaired.
(2) In addition to existing remedies for breach of the ethical standards of
this Part or regulations promulgated hereunder, the Ethics
Commission may impose any one or more of the following:
(a) oral or written warnings or reprimands;
(b) suspension with or without pay for specific periods of
time; and
(c) termination of employment.
(3) The value of anything received by an employee in breach of the
ethical standards of this Part or regulations promulgated hereunder
shall be recoverable by the Government as provided in Section 198 of
this Chapter.
(4) All procedures under this Section shall be in accordance with due
process requirements and existing law. In addition, notice and an
opportunity for a hearing shall be provided prior to imposition of any
suspension or termination of employment. [P.L. 1988-33, §96.]
§197. Civil and Administrative Remedies Against Non-Employees Who
Breach Ethical Standards.
(1) Civil and administrative remedies against non-employees which are
in existence on the effective date of this Chapter shall not be
impaired.
(2) In addition to existing remedies for breach of the ethical standards of
this Part or regulations promulgated hereunder, the Ethics
Commission may impose any one or more of the following:
(a) written warnings or reprimands;
(b) termination of transactions; and
(c) debarment or suspension from being a contractor or
subcontractor under Government contracts.
(3) The value of anything transferred in breach of the ethical standard of
this Article or regulations promulgated hereunder by a non-
employee shall be recoverable by the Government as provided in
Section 198 of this Chapter.
(4) Debarment or suspension may be imposed by the Ethics Commission
in accordance with the procedures set forth in Section 165 of this
Chapter, for breach of the ethical standards of this Part; provided,
that such action may not be taken without the concurrence of the
Attorney-General.
(5) All procedures under this Section shall be in accordance with due
process requirements, including, but not limited to, a right to notice
and an opportunity for a hearing prior to imposition of any
termination, debarment, or suspension from being a contractor or
subcontractor under a Government contract. [P.L. 1988-33, §97.]
§198. Recovery of Value Transferred or Received in Breach of Ethical
Standards.
(1) The value of anything transferred or received in breach of the ethical
standards of this Part or regulations promulgated hereunder by an
employee or a non-employee may be recovered from both the
employee and non-employee.
(2) Upon a showing that a subcontractor made a kickback to a prime
contractor or a higher tier subcontractor in connection with the award
of a subcontract or order thereunder, it shall be conclusively
presumed that the amount thereof was included in the price of the
subcontract or order and ultimately borne by the Government and
will be recoverable hereunder from the recipient. In addition, said
value may also be recovered from the subcontractor making such
kickbacks. Recovery from one offending party shall not preclude
recovery from other offending parties. [P.L. 1988-33, §98.]
DIVISION 3 - ETHICS COMMISSION
§199. Ethics Commission.
(1) There is hereby created an Ethics Commission of three (3) members
which shall include the Secretary of Foreign Affairs, Secretary of
Finance and the Attorney-General.
(2) The Ethics Commission shall promulgate regulations to implement
this Part and shall do so in accordance with the applicable provisions
of the Administrative Procedure Act.
(3) On written request of employees or contractors, the Ethics
Commission may render written advisory opinions regarding the
appropriateness of the course of conduct to be followed in proposed
transactions. Such requests and advisory opinions must be duly
published in the manner in which regulations of this Government are
published. Compliance with requirements of a duly promulgated
advisory opinion of the Ethics Commission shall be deemed to
constitute compliance with the ethical standards of this Part.
(4) On written request of an employee, the Ethics Commission may grant
an employee a written waiver from the application of Section 190 of
this Act, and grant permission to proceed with the transaction to such
extent and upon such terms and conditions as may be specified. Such
waiver and permission may be granted when the interests of the
Government so require or when the ethical conflict is insubstantial or
remote. [P.L. 1988-33, §99.]
§1100. Appeal of Decisions of the Ethics Commission.
(1) Except as provided under Subsection (2) of this Section, a decision of
the Ethics Commission under Sections 196 or Section 197 of this
Chapter, shall be reviewable in accordance with the Administrative
Procedure Act.
(2) A decision of the Ethics Commission regarding debarment or
suspension under Section 197(2)(c) of this Chapter shall be
reviewable as provided in Section 172(2) of this Chapter.[P.L. 1988-33, §100.]