(1) As used in this section:

1. (a) "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.

2. (b) "Transitional costs" include:

   1. (i) training costs;
   2. (ii) conversion costs;
   3. (iii) compatibility costs;
   4. (iv) system downtime;
   5. (v) disruption of service;
   6. (vi) staff time necessary to put the transition into effect;
   7. (vii) installation costs; and
   8. (viii) ancillary software, hardware, equipment, or construction costs.

3. (c) "Transitional costs" do not include:

   1. (i) the costs of preparing for or engaging in a procurement process; or
   2. (ii) contract negotiation or contract drafting costs.

(2) The division or a procurement unit with independent procurement authority may award a contract for a procurement item without competition if the procurement officer, the head of the procurement unit, or a designee of either who is senior to the procurement officer or the head of the procurement unit, determines in writing that:

1. (a) there is only one source for the procurement item; or
2. (b) the award to a specific supplier, service provider, or contractor is a condition of a donation that will fund the full cost of the supply, service, or construction item.

(3) Circumstances under which there is only one source for a procurement item may include:

1. (a) where the most important consideration in obtaining a procurement item is the compatibility of equipment, technology, software, accessories, replacement parts, or service;
2. (b) where a procurement item is needed for trial use or testing;
3. (c) where transitional costs are unreasonable or cost prohibitive; or
4. (d) procurement of public utility services.

(6) The division or a procurement unit with independent procurement authority may extend a contract for a reasonable period of time without engaging in a standard procurement process, if:

1. (a) the award of a new contract for the procurement item is delayed due to a protest or appeal;
2. (b) the standard procurement process is delayed due to unintentional error;
3. (c) changes in industry standards require significant changes to specifications for the procurement item;
4. (d) the extension is necessary to prevent the loss of federal funds;
5. (e) the extension is necessary to address a circumstance where the appropriation of state or federal funds has been delayed; or
6. (f) the extension covers the period of time during which contract negotiations with a new provider are being conducted.