1. (a) General requirements.

   1. (1) Commodities that are not subject to or have completed the twenty-day hold period, pursuant to 19 CAR § 1-605(a), may be offered for sale.

   2. (2)

      1. (A) Furniture or equipment may be loaned or rented to a state agency with the approval of the owning agency.
      2. (B) The rental fee or fees less applicable handling fee or fees will be remitted to the owning agency.

2. (b) Notice required.

   1. (1) Public notice of commodities sold by competitive sealed bid should be given at least five (5) days prior to the date established for the sale.
   2. (2) The notice will include publication in any electronic or printed medium.

3. (c) Public auction.

   1. (1)

      1. (A) Public auction whether electronic or traditional may be used when deemed in the best interest of the state.
      2. (B) Auction costs will be paid from proceeds.
      3. (C) In a traditional auction, if proceeds do not cover the costs, the agency requesting the auction will be responsible for any expenses not covered from the proceeds.
      4. (D) Any cost associated with an electronic auction will be covered by proceeds from the sale.

   2. (2) Procedures.

      1. (A)

4. (i) In a traditional auction a licensed auctioneer will be used.

   1. (ii) The solicitation to bidders must stipulate, at a minimum:
5. (a) (a) All terms and conditions of any sale;

6. (b) (b) That the purchaser must remove all items purchased within a stated time; and

   1. (c) (c) That the state retains the right to reject any and all bids.

      1. (B) In an electronic auction, the purchaser must pick up or otherwise cause the items purchased to be removed within a stated time.

         1. (d) Competitive sealed bidding.

   2. (1) Competitive sealed bidding will be used when:

      1. (A) The value of the item cannot be determined based on market value or past history of same or similar items sold; or
      2. (B) It is determined by the Marketing and Redistribution Section that it is in the best interest of the state.
   3. (2) Procedures. When surplus commodities are to be sold by competitive sealed bidding, the procedures followed must be in accordance with Arkansas Code §§ 19-11-204, 19-11-228, and 19-11-229, and the rules promulgated hereunder except the award will be made to the highest bidder with the state retaining the right to accept or reject any or all bids when in the best interest of the state.

7. (e) Onsite sales.

   1. (1) Definition. “Onsite sales” includes the process of:

      1. (A) Internet auctioning; and
      2. (B) Sale of commodities to the general public from the Marketing and Redistribution Section, a satellite location, and/or other agency locations when approved by the Marketing and Redistribution Section.
   2. (2) Onsite sales will be used for surplus items not purchased by other state agencies or tax supported entities.

   3. (3) Procedure. The selling price will be established by the Marketing and Redistribution Section based upon:

      1. (A) Demand;
      2. (B) Condition of commodities;
      3. (C) Past experience gained from auction or competitive sealed bid sales; and
      4. (D) Prevailing retail prices for same or similar commodities in the local market.

8. (f) Negotiated sale.

   1. (1) Negotiated sale may be used if no acceptable bids were received during the bid process and an offer is made “after the fact” for the item.
   2. (2) Offers will only be accepted from bidders that participated in the sealed bid offering the item.
9. (g) Trade-in. Surplus commodities may be traded in when the Marketing and Redistribution Manager or Assistant Marketing and Redistribution Manager determines that the trade-in value is expected to exceed the value estimated to be obtained through the sale of the commodity less administrative expenses incurred during a sale.

10. (h) Lease or donation.

    1. (1) Surplus commodities may be leased or donated to tax supported entities or nonprofit organizations when:

       1. (A) Requested in writing by the owning agency; and
       2. (B) Approved by the State Procurement Director.

    2. (2)

       1. (A) Written requests must be submitted to the manager identifying the equipment by name, serial number, property number, the benefit to the public in cases of proposed donations, and lease terms in cases of proposed property leasing.
       2. (B) The manager will estimate the property value and forward the request to the director for his or her approval/disapproval.
    3. (3) The director will respond in written communication to the requesting agency on a case-by-case basis.
    4. (4) The requesting agency must maintain a copy of the original written request and the written approval/disapproval from the director for audit purposes.

    5. (5) Copies of the request and approval/disapproval will also be maintained at the section.

       1. (i)
    6. (1) The Arkansas Department of Transportation may dispose of commodities without the assistance of the Office of State Procurement, but it must comply with the procedures outlined herein for said disposition.
    7. (2) Nothing herein is intended to prohibit the use of the office for the disposition of those commodities, and the department may request the office make the disposition.

11. (j) Excess commodities in remote locations and/or property too heavy or expensive to transport to the Marketing and Redistribution Section.

    1. (1) Excess commodities that are in remote locations and/or commodities where the cost to transport to the Marketing and Redistribution Section would be prohibitive should be reported by written communication to the Marketing and Redistribution Section with a complete description and details of the condition of the equipment.

    2. (2) The Marketing and Redistribution Section will make one (1) of the following recommendations:

       1. (A)

          1. (i) The commodity should be redistributed for state use and the Marketing and Redistribution Section will notify agencies and/or tax- supported entities that could utilize the commodity.
          2. (ii) When the property is sold, the receiving agency will be responsible for the removal of the item or items with the expense of moving being taken into consideration when price is determined; or

       2. (B)

          1. (i) The Marketing and Redistribution Section will prepare an invitation for bids or authorize the agency to prepare an invitation for bids with inspection being held at the agency location.
          2. (ii) A certificate of property disposal will be transmitted to the owning agency designated as follows:
12. (a) (a) The property identified is authorized for cannibalization by the manager who hereby authorizes the agency to perform the cannibalization;

13. (b) (b) The property identified is authorized for destruction by the manager who hereby authorizes the agency to perform the destruction;

    1. (c)
    2. (1) (c)(1) Property that has a material content of lead, copper, brass, iron, etc. will be disposed of by sale to a local scrap dealer or dealers at local prices.

    3. (2) (2) Payment or payments received are to be sent and made payable to the section with a copy of the Certificate of Property Disposal authorizing the sale; and

       1. (d)
    4. (1) (d)(1) Property with resale value that is not feasible for transport to the Marketing and Redistribution Section may be disposed of by obtaining quote bids “as is, where is”.
    5. (2) (2) Owning agencies should attempt to obtain (3) bids.
    6. (3) (3) A copy of the bid quotes, a copy of the Certificate of Property Disposal authorizing the sale, and the proceeds are to be sent and made payable to the Marketing and Redistribution Section.

14. (k) Specialized commodities may be offered for trade-in with the trade-in price offered being forwarded in a written transmission to the Marketing and Redistribution Section for determination of price acceptability.

    1. (l) If none of the above procedures are applicable, the director will make an individual determination.

Codification Notes: This section was promulgated as R2:19-11-242 of the Procurement Rules prior to codification into the Code of Arkansas Rules.