SENATE BILL No. 410

 

 

August 20, 2019, Introduced by Senator GEISS and referred to the Committee on Economic and       Small Business Development.

 

 

 

     A bill to amend 1984 PA 431, entitled

 

"The management and budget act,"

 

by amending sections 241 and 261 (MCL 18.1241 and 18.1261), section

 

241 as amended by 2012 PA 430 and section 261 as amended by 2017 PA

 

21.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 241. (1) Except for the contracts permitted in section

 

240, a contract shall not be awarded for the construction, repair,

 

remodeling, or demolition of a facility unless the contract is let

 

pursuant to a bidding procedure that is approved by the board. The

 

department shall issue directives prescribing procedures to be used

 

to implement this section. The procedures shall require a

 

competitive solicitation in the award of any contract for

 

construction, repair, remodeling, or demolition of a facility.

 


     (2) The department may award or approve the award, if the

 

board approves, of construction contracts to construct a project

 

for which the director is the agent and may expend, for the

 

purposes and in the manner set forth, the amounts appropriated. The

 

director is not the agent for a community college or institution of

 

higher education, but may act in that capacity upon the specific

 

request of a community college or institution of higher education.

 

     (3) In awarding a contract under this section, the department

 

shall give a preference of up to 10% of the amount of the contract

 

to a qualified disabled veteran, as defined in section 261. If the

 

qualified disabled veteran otherwise meets the requirements of the

 

contract solicitation and with the preference is the lowest bidder,

 

the department shall enter into a construction contract with the

 

qualified disabled veteran under this act. If 2 or more qualified

 

disabled veterans are the lowest bidders on a contract, all other

 

things being equal, the qualified disabled veteran with the lowest

 

bid shall be awarded the contract under this act.

 

     (4) Subject to subsection subsections (3) and (5), for

 

projects funded in whole or part with state funds, the construction

 

contract award shall be made to the responsive and responsible best

 

value bidder. As used in this subsection, "responsive and

 

responsible best value bidder" means a bidder who meets all the

 

following:

 

     (a) A bidder who complies with all bid specifications and

 

requirements.

 

     (b) A bidder who has been determined by the department to be

 

responsible by the following criteria:


     (i) The bidder's financial resources.

 

     (ii) The bidder's technical capabilities.

 

     (iii) The bidder's professional experience.

 

     (iv) The bidder's past performance.

 

     (v) The bidder's insurance and bonding capacity.

 

     (vi) The bidder's business integrity.

 

     (c) A bidder who has been selected by the department through a

 

selection process that evaluates the bid on both price and

 

qualitative components to determine what is the best value for this

 

state. Qualitative components may include, but are not limited to,

 

all of the following:

 

     (i) Technical design.

 

     (ii) Technical approach.

 

     (iii) Quality of proposed personnel.

 

     (iv) Management plans.

 

     (5) In awarding a contract under this section, if consistent

 

with federal statutes and all other things being equal, the

 

department and all state agencies in which the department has

 

delegated procurement authority under this act, shall give

 

preference to a geographically disadvantaged business enterprise in

 

the same manner as provided in section 261. A "geographically

 

disadvantaged business enterprise" means that term as defined in

 

section 261.

 

     Sec. 261. (1) The department shall provide for the purchase

 

of, the contracting for, and the providing of supplies, materials,

 

services, insurance, utilities, third party financing, equipment,

 

printing, and all other items as needed by state agencies for which


the legislature has not otherwise expressly provided. If consistent

 

with federal statutes, in all purchases made by the department, all

 

other things being equal, preference shall be given to products

 

manufactured or services offered by Michigan-based firms or by

 

facilities with respect to which the operator is designated as a

 

clean corporate citizen under part 14 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.1401 to

 

324.1429, to geographically disadvantaged business enterprises, or

 

to biobased products whose content is sourced in this state. The

 

department shall solicit competitive bids from the private sector

 

whenever practicable to efficiently and effectively meet the

 

state's needs. The department shall first determine that

 

competitive solicitation of bids in the private sector is not

 

appropriate before using any other procurement method for an

 

acquisition.

 

     (2) The department shall make all discretionary decisions

 

concerning the solicitation, award, amendment, cancellation, and

 

appeal of state contracts.

 

     (3) The department shall utilize competitive solicitation for

 

all purchases authorized under this act unless 1 or more of the

 

following apply:

 

     (a) Procurement of goods or services is necessary for the

 

imminent protection of public health or safety or to mitigate an

 

imminent threat to public health or safety, as determined by the

 

director or his or her designated representative.

 

     (b) Procurement of goods or services is for emergency repair

 

or construction caused by unforeseen circumstances when the repair


or construction is necessary to protect life or property.

 

     (c) Procurement of goods or services is in response to a

 

declared state of emergency or state of disaster under the

 

emergency management act, 1976 PA 390, MCL 30.401 to 30.421.

 

     (d) Procurement of goods or services is in response to a

 

declared state of emergency under 1945 PA 302, MCL 10.31 to 10.33.

 

     (e) Procurement of goods or services is in response to a

 

declared state of energy emergency under 1982 PA 191, MCL 10.81 to

 

10.89.

 

     (f) Procurement of goods or services is within a state

 

agency's purchasing authority delegated under subsection (4), and

 

the state agency has established policies or procedures approved by

 

the department to ensure that goods or services are purchased by

 

the state agency at fair and reasonable prices.

 

     (4) The department may delegate its procurement authority to

 

other state agencies within dollar limitations and for designated

 

types of procurements. The department may withdraw delegated

 

authority upon a finding that a state agency did not comply with

 

departmental procurement directives.

 

     (5) The department may enter into lease purchases or

 

installment purchases for periods not exceeding the anticipated

 

useful life of the items purchased unless otherwise prohibited by

 

law.

 

     (6) The department shall issue directives for the procurement,

 

receipt, inspection, and storage of supplies, materials, and

 

equipment, and for printing and services needed by state agencies.

 

The department shall provide standard specifications and standards


of performance applicable to purchases.

 

     (7) The department may enter into a cooperative purchasing

 

agreement with 1 or more other states or public entities for the

 

purchase of goods, including, but not limited to, recycled goods,

 

and services necessary for state programs.

 

     (8) In awarding a contract under this section, the department

 

shall give a preference of up to 10% of the amount of the contract

 

to a qualified disabled veteran. If the qualified disabled veteran

 

otherwise meets the requirements of the contract solicitation and

 

with the preference is the lowest bidder, the department shall

 

enter into a procurement contract with the qualified disabled

 

veteran under this act. If 2 or more qualified disabled veterans

 

are the lowest bidders on a contract, all other things being equal,

 

the qualified disabled veteran with the lowest bid shall be awarded

 

the contract under this act.

 

     (9) It is the goal of the department to award each year not

 

less than 5% of its total expenditures for construction, goods, and

 

services to qualified disabled veterans. The department may count

 

toward its 5% yearly goal described in this subsection that portion

 

of all procurement contracts in which the business entity that

 

received the procurement contract subcontracts with a qualified

 

disabled veteran. Each year, the department shall report to each

 

house of the legislature on all of the following for the

 

immediately preceding 12-month period:

 

     (a) The number of qualified disabled veterans who submitted a

 

bid for a state procurement contract.

 

     (b) The number of qualified disabled veterans who entered into


procurement contracts with this state and the total value of those

 

procurement contracts.

 

     (c) Whether the department achieved the goal described in this

 

subsection.

 

     (d) The recommendations described in subsection (10).

 

     (10) Each year, the department shall review the progress of

 

all state agencies in meeting the 5% goal with input from statewide

 

veterans service organizations and from the business community,

 

including businesses owned by qualified disabled veterans, and

 

shall make recommendations to each house of the legislature

 

regarding continuation, increases, or decreases in the percentage

 

goal. The recommendations shall be based upon the number of

 

businesses that are owned by qualified disabled veterans and on the

 

continued need to encourage and promote businesses owned by

 

qualified disabled veterans.

 

     (11) To assist the department in reaching the goal described

 

in subsection (9), the governor shall recommend to the legislature

 

changes in programs to assist businesses owned by qualified

 

disabled veterans.

 

     (12) Beginning October 1, 2017, the department and all state

 

agencies may not enter into a contract with a person to acquire or

 

dispose of supplies, services, or information technology unless the

 

contract includes a representation that the person is not currently

 

engaged in, and an agreement that the person will not engage in,

 

the boycott of a person based in or doing business with a strategic

 

partner.

 

     (13) The following records are exempt from disclosure under


the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246,

 

as provided in this subsection:

 

     (a) A bid, quote, or proposal submitted in connection with the

 

authority granted under this section, and records created in the

 

preparation for and evaluation of the bid, quote, or proposal until

 

the time of final notification of award of the contract.

 

     (b) Records containing a trade secret as defined under section

 

2 of the uniform trade secrets act, 1998 PA 448, MCL 445.1902, or

 

financial or proprietary information submitted in connection with

 

the authority granted under this section.

 

     (14) It is the goal of the department to award each year not

 

less than 5% of all state agency total expenditures for

 

construction, goods, and services to geographically disadvantaged

 

business enterprises. The department may count toward its 5% yearly

 

goal described in this subsection that portion of all procurement

 

contracts in which the business entity that received the

 

procurement contract subcontracts with a geographically

 

disadvantaged business enterprise. Each year, the department shall

 

report to each house of the legislature on all of the following for

 

the immediately preceding 12-month period:

 

     (a) The number of geographically disadvantaged business

 

enterprises who submitted a bid for a state procurement contract.

 

     (b) The number of geographically disadvantaged business

 

enterprises who entered into procurement contracts with this state,

 

a description of the contracted goods or services, and the total

 

value of those procurement contracts.

 

     (c) Whether the department achieved the goal described in this


subsection.

 

     (d) The recommendations described in subsection (15).

 

     (15) Each year, the department shall review the progress of

 

all state agencies in meeting the 5% goal with input from

 

geographically disadvantaged business enterprises and from the

 

business community, and shall make recommendations to each house of

 

the legislature regarding continuation, increases, or decreases in

 

the percentage goal.

 

     (16) To assist the department in reaching the goal described

 

in subsection (15), the governor shall recommend to the legislature

 

changes in programs to assist geographically disadvantaged business

 

enterprises.

 

     (17) (14) As used in this section:

 

     (a) "Biobased product" means a product granted the United

 

States Department of Agriculture certified biobased product label.

 

     (b) "Boycott" means refusal to have dealings with, divest

 

from, or otherwise engage with a person. Boycott does not include 1

 

or more of the following:

 

     (i) A decision based on bona fide business or economic

 

reasons.

 

     (ii) A boycott against a public entity of a foreign state when

 

the boycott is applied in a nondiscriminatory manner.

 

     (iii) Conduct necessary to comply with applicable law in the

 

person's home jurisdiction.

 

     (c) "Financial or proprietary information" means information

 

that has not been publicly disseminated or which is unavailable

 

from other sources, the release of which might cause the submitter


of the information competitive harm.

 

     (d) "Geographically disadvantaged business enterprise" means a

 

person or entity that satisfies 1 or more of the following:

 

     (i) Is certified as a HUBZone small business concern by the

 

United States Small Business Administration.

 

     (ii) Has a principal place of business located within a

 

qualified opportunity zone within this state.

 

     (iii) More than half of its employees have a principal

 

residence located within a qualified opportunity zone within this

 

state.

 

     (e) "HUBZone small business concern" means that term as

 

defined under 13 CFR 126.103.

 

     (f) (d) "Person" means any of the following:

 

     (i) An individual, corporation, company, limited liability

 

company, business association, partnership, society, trust, or any

 

other nongovernmental entity, organization, or group.

 

     (ii) Any governmental entity or agency of a government.

 

     (iii) Any successor, subunit, parent company, or subsidiary

 

of, or company under common ownership or control with, any entity

 

described in subparagraph (i) or (ii).

 

     (g) (e) "Qualified disabled veteran" means a business entity

 

that is 51% or more owned by 1 or more veterans with a service-

 

connected disability.

 

     (h) "Qualified opportunity zone" means that term as defined in

 

26 USC 1400Z-1.

 

     (i) (f) "Service-connected disability" means a disability

 

incurred or aggravated in the line of duty in the active military,


naval, or air service as described in 38 USC 101(16).

 

     (j) (g) "Strategic partner" means a strategic partner

 

described in 22 USC 8601 to 8606.

 

     (k) (h) "Veteran" means an individual who meets both of the

 

following:

 

     (i) Is a veteran as defined in section 1 of 1965 PA 190, MCL

 

35.61.

 

     (ii) Was released from his or her service with an honorable or

 

general discharge.