DJBA - Procurement Transitional Costs _ Cost-Benefit Analysis
Policy: DJBA—Procurement – Transitional Costs / Cost-Benefit Analysis
Date Adopted: 6 August 2025
Current Review / Revision: 6 August 2025
The District may award a contract for a procurement item without engaging in a standard procurement process if the Procurement Official makes a written determination that transitional costs are a significant consideration in selecting a procurement item and the results of a cost-benefit analysis demonstrate that transitional costs are unreasonable or cost-prohibitive and that awarding a contract without engaging in a standard procurement process is in the best interest of the District.
Utah Code § 63G-6a-802(1)(b) (2024)
Utah Admin. Rules R33-8-101(1)(b) (May 23, 2022)
Definitions:
“Transitional costs” mean the costs of changing from an existing provider of, or type of, a procurement item to another provider of, or type of, procurement item, including training costs, conversion costs, compatibility costs, costs associated with system downtime, disruption of service costs, staff time necessary to implement the change, installation costs, and ancillary software, hardware, equipment, or construction costs. “Transitional costs” do not include (a) the costs of preparing for or engaging in a procurement process, or (b) contract negotiation or contract drafting costs, or (c) costs associated with a trial use or testing of a procurement item under a trial use contract.
Utah Code § 63G-6a-103(95) (2024)
“Competing type of procurement item” means a type of procurement item that is the same, equivalent, or superior to the existing type of procurement item currently under contract in all material aspects including performance, specifications, scope of work, and provider qualifications, certifications, and licensing.
Utah Admin. Rules R33-8-101b(1)(a) (May 23, 2022)
“Competing provider” means another provider other than the existing provider under contract that provides a competing type of procurement item.
Utah Admin. Rules R33-8-101b(1)(b) (May 23, 2022)
“Significant,” “unreasonable or cost-prohibitive” transitional costs are defined as costs associated with changing from an existing provider of a procurement item to another provider of that procurement item or from an existing type of procurement item to another type that (a) constitute a measurably large amount that would likely have an influence or effect on the award of a contract if a competitive procurement were to be conducted for the procurement item being considered; and (b) provides a compelling justification for not conducting a competitive standard procurement process.
Utah Admin. Rules R33-8-101b(1)(c) (May 23, 2022)
Cost-benefit analysis
Before awarding a contract under the transitional costs/cost-benefit procurement process, the District shall complete a written cost-benefit analysis with regard to the procurement to determine whether the procurement is permitted. The cost-benefit analysis shall be considered by the Procurement Official before approving the procurement. This cost-benefit analysis should not be overly time-consuming to complete, nor should it involve hiring costly consultants or engaging in costly financial analysis.
Utah Admin. Rules R33-8-101b(5), (6) (May 23, 2022)
The cost-benefit analysis must consider the following transitional costs: (a) costs that are directly associated with changing from an existing provider of a procurement item to a competing provider of that procurement item or from an existing type of procurement item to a competing type of procurement item; and (b) A full lifecycle cost analysis of the existing type of procurement item and competing type of procurement items to determine which procurement item is more cost-effective.
Utah Admin. Rules R33-8-101b(2) (May 23, 2022)
The cost-benefit analysis may consider the following transitional costs: (a) any costs identified in the definition of “transitional costs” set forth above, (b) costs offered by a competing provider for a competing type of procurement item in a competitive bid or request for proposals process conducted within the last 12 months, (c) costs offered by a competing provider for a competing type of procurement item in a competitive bid or request for proposals process conducted before the most recent 12 months, updated using an applicable price index, (d) written cost estimates obtained by the District from a competing provider(s) for a competing type of procurement item, and (e) other transitional costs determined to be applicable by the Procurement Official.
Utah Admin. Rules R33-8-101b(3) (May 23, 2022)
The cost-benefit analysis may NOT consider the following costs: (a) costs excluded from the definition of “transitional costs” above, (b) data provided by the existing provider for establishing either the market value of the existing type of procurement item or a competing provider’s price for a competing type of procurement item, (c) costs associated with any other procurement item other than the existing type of procurement item or a competing type of procurement item, (d) non-monetary factors, such as the provider’s performance, agency preference, and other data or information not specific to the transitional costs associated with the existing type of procurement item or a competing type of procurement item, (e) factors other than the monetary transitional costs directly associated with changing from an existing provider of a procurement item to a competing provider of that procurement item or from an existing type of procurement item to a competing type of procurement item, and (f) other transitional costs or other information deemed inappropriate by the Procurement Official.