PA 08-154—SB 679

Government Administration and Elections Committee

Finance, Revenue and Bonding Committee

AN ACT CONCERNING THE PAYMENT OF CERTAIN COSTS FROM BOND FUNDS AND THE CREATION OF A RECIPROCAL PREFERENCE STATUTE

SUMMARY: When the lowest responsible qualified bidder on a state contract is an out-of-state business that receives a preference in its home state, this act requires the state contracting agency awarding the contract to increase the bid by an amount equal to the preference.

Beginning January 1, 2009, it requires the State Contracting Standards Board to publish an annual list of states that give preference to in-state bidders, including the percentage amount. The act requires that the list be made available to state contracting agencies and allows them to rely on it when determining the lowest responsible qualified bidder.

By law, the Department of Public Works (DPW) commissioner monitors agency requests for leased space and facility projects during the interim between state facility plans (see BACKGROUND). She advises the governor and Office of Policy and Management (OPM) secretary when the square footage requested or project cost exceeds, by at least 10%, the square footage of, or the cost to implement, the state facility plan.

Under prior law, the OPM secretary, State Properties Review Board, State Bond Commission, and governor had to approve the requests before the projects continued. The act requires their approval only when project costs will be paid with bond funds.

EFFECTIVE DATE: Upon passage, except the provision on preference in contracting is effective on October 1, 2009.

PREFERENCE IN CONTRACTING

By law, state construction contracts must be awarded to the lowest responsible prequalified bidder and state procurement contracts must be awarded to the lowest responsible qualified bidder.

When awarding a state contract, the act requires state contracting agencies to add to bids submitted by out-of-state businesses a percentage increase equal to any preference the business receives in its home state. If the addition results in an in-state business becoming the lowest responsible qualified bidder, the agency must award the contract to the in-state business if it agrees, in writing, to meet the original lowest responsible qualified bid. The in-state business must make the agreement within 72 hours after receiving notice that the agreement is a prerequisite to the contract award.

Under the act, out-of-state businesses are those that do not have a business address in this state and did not pay state unemployment or income taxes during the preceding calendar year. In-state businesses, in addition to paying state taxes and maintaining an in-state address, must affirmatively assert their in-state status on bid submissions.

BACKGROUND

State Facility Plan

Each state agency must determine its space needs and transmit these needs annually to OPM and DPW. In even-numbered years, these agencies project their facility needs over a five-year period and submit their proposed facility plans to OPM and DPW. DPW reviews the plans for factors such as cost, space requirements, and implementation scheduling.

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