1. (a)

   1. (1) “Commodities” is a broad term that encompasses all personal property, except for those categories of personal property expressly exempted under Arkansas Procurement Law, Arkansas Code § 19-11-201 et seq.

   2. (2) The following are specifically included as “commodities” under Arkansas Procurement Law:

      1. (A) Goods, as defined in the Arkansas Uniform Commercial Code at Arkansas Code § 4-2-105;
      2. (B) Leases of goods, as defined in the Arkansas Uniform Commercial Code at Arkansas Code § 4-2A-103; and
      3. (C) Insurance.

   3. (3)

      1. (A) Arkansas Code § 19-11-203(4)(B) expressly excludes real property, leases of real property, other permanent interests in real property, capital improvements, and excluded commodities and services from being considered “commodities” for purposes of Arkansas Procurement Law.
      2. (B) Certain types of commodities that would otherwise fall within the definition of personal property are expressly exempted from the application of Arkansas Procurement Law at Arkansas Code § 19-11-203(14).
      3. (C) State agencies not authorized to procure commodities through Arkansas Procurement Law may be authorized to do so under other applicable law.
      4. (D) Exemption from Arkansas Procurement Law does not automatically exempt any state agency or officer from other laws governing the expenditure of public funds or the ethical restrictions at Arkansas Code § 19-11-701 et seq.
2. (b) “Consulting services” means services of providing professional counsel and expert advice.

3. (c)

   1. (1) “Employment agreement” means an agreement between a state agency, as employer, and its employee in which the terms and conditions of the employee’s employment are stated.
   2. (2) An independent contractor who, in the course of his, her, or its independent occupation or profession, provides services to a state agency pursuant to a contract is not an employee simply by virtue of having a contract with a state agency.

4. (d)

   1. (1) “Personal services” means services unique to the specific individual and personality providing them, as opposed to services that are fungible and could be provided by any person based on a set of skills or knowledge.
   2. (2) Personal services of visiting speakers, lecturers, and performing artists may be procured without any competitive procurement because they are expressly exempted from Arkansas Procurement Law.
   3. (3) Any personal services provided by a contract employee under an employment agreement, as defined below, are excluded by definition from being considered services.

5. (e)

   1. (1)

      1. (A) “Professional services” means services furnished by or under the supervision of a professional who has been specially trained to provide such services.
      2. (B) A “professional” is a person who belongs to a learned profession or occupation that requires a high level of training, specialized knowledge, proficiency, and often a professional license.

   2. (2)

      1. (A) “Professional services” include medical, legal, financial advisory, architectural, engineering, construction management, and land surveying services.
      2. (B) Under state law, legal, financial advisory, architectural, engineering, construction management, and land surveying services must be procured by means of a request for qualifications.
      3. (C) Absent authority from the State Procurement Director, the request for qualifications shall not be used by state agencies to procure any other professional services unless the director determines by rule or in writing that the request for qualifications process is warranted.
      4. (D)

6. (i) Note. contracts to pay physician fees and medical fees are exempt from Arkansas Procurement Law under Arkansas Code § 19-11-203(14)(H).

   1. (ii) Although contracts to pay for such fees are exempt from Arkansas Procurement Law, to the extent reasonably practicable, reasonable care should be taken to ensure that professional competence is considered with respect to such services.

      1. (iii) Consequently, the State Procurement Director recognizes a request for qualifications as a suitable method for procuring such services where reasonably possible without the need of advance approval from the director in light of the exemption provided in Arkansas Code § 19-11-203(14)(H).

7. (f)

   1. (1)

      1. (A) “Services” is defined at Arkansas Code § 19-11-203(27)(A).
      2. (B) It refers to the labor, time, or effort that a contractor furnishes under a contract as performance for separate consideration and not labor, time, or effort included in or incident to the production or sale of a commodity or commodities.
   2. (2) Labor, time, or effort are included in the production or sale of a commodity if expended within either the production or sale of the commodity and are not set apart for separate consideration outside of the purchase price of the commodity.

   3. (3)

      1. (A) Labor, time, or effort are incident to the production or sale of a commodity if they accompany the production or sale of the commodity as a minor consideration, even if a separate but relatively small fee is paid to the contractor for it.
      2. (B) For example, where the purchase of a computer includes delivery and installation for a relatively small fee, the labor, time, and effort involved in the delivery and installation of the computer are incident to the sale of the commodity.

   4. (4) After the state’s procurement and acceptance of a commodity as conforming to the contract, subsequent labor, time, or effort furnished by a contractor with respect to the commodity are considered services for purposes of Arkansas Procurement Law if:

      1. (A) They are not incident to the original procurement of the commodity; and
      2. (B) There is a separate consideration paid for those services.
   5. (5) Labor, time, or effort that a contractor furnishes for the customization, generation, configuration, or development of software, beyond that which is incident to the procurement, installation, maintenance, and routine technical support of the software, are considered services for purposes of Arkansas Code § 19-11-265.

   6. (6) Based on the exclusionary definition in Arkansas Code § 19-11-203(27)(C), the following types of contracts are excluded from being considered a contract requiring services within the meaning of Arkansas Code § 19-11-265:

      1. (A) Employment agreements;
      2. (B) Collective bargaining agreements;
      3. (C) Architectural or engineering contracts requiring approval of the Division of Building Authority or the Division of Higher Education; and
      4. (D) Other commodities and services exempted by law.

8. (g)

   1. (1) “Technical and general services” is defined at Arkansas Code § 19-11-203(34)(A).
   2. (2) It is a term that generally encompasses the broad range of services that are not professional services.

Codification Notes: This section was promulgated as R1:19-11-203 of the Procurement Rules prior to codification into the Code of Arkansas Rules.