2001 Legislation
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SENATE BILL NO. 1025 – Purchasing, state, electronic bids

SENATE BILL NO. 1025

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S1025......................................................by STATE AFFAIRS
PURCHASING - STATE - Amends existing law to revise the state procurement
statutes to permit certain notices and solicitations to be posted
electronically; to permit bids to be submitted electronically; to remove
the vendor registration requirement; and to allow vendors to register
online to be notified of bid opportunities.
                                                                        
01/18    Senate intro - 1st rdg - to printing
01/19    Rpt prt - to St Aff
02/01    Rpt out - rec d/p - to 2nd rdg
02/02    2nd rdg - to 3rd rdg
02/06    3rd rdg - PASSED - 33-0-1(1 vacant)
      AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
      Burtenshaw, Cameron, Danielson, Darrington, Davis, Deide, Dunklin,
      Frasure, Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough,
      King-Barrutia, Lee, Lodge, Noh, Richardson, Sandy, Schroeder,
      Sorensen, Stegner, Stennett, Thorne, Wheeler, Whitworth, Williams,
      NAYS -- None
      Absent and excused -- Risch
      Vacant -- Dist. #4
    Floor Sponsor -- Richardson
    Title apvd - to House
02/07    House intro - 1st rdg - to St Aff
02/16    Rpt out - rec d/p - to 2nd rdg
02/19    2nd rdg - to 3rd rdg
02/22    3rd rdg - PASSED - 61-0-9
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Bolz,
      Bradford, Bruneel, Callister, Campbell, Chase, Clark, Collins, Crow,
      Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13),
      Field(20), Hadley, Harwood, Henbest, Higgins, Hornbeck, Jaquet,
      Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader,
      Marley, McKague, Meyer, Mortensen, Moss, Moyle, Pearce, Pischner,
      Pomeroy, Raybould, Roberts, Robison, Sali, Schaefer, Sellman,
      Shepherd, Smith, Smylie, Stevenson, Stone, Tilman, Trail, Wheeler,
      Young
      NAYS -- None
      Absent and excused -- Boe, Gagner, Gould, Hammond, Montgomery,
      Ridinger, Swan, Wood, Mr. Speaker
    Floor Sponsor -- Smylie
    Title apvd - to Senate
02/23    To enrol
02/26    Rpt enrol - Pres signed
02/27    Sp signed
02/28    To Governor
03/06    Governor signed
         Session Law Chapter 36
         Effective: 07/01/01

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1025
                                                                        
                                 BY STATE AFFAIRS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE DIVISION OF PURCHASING; AMENDING SECTION 67-5716, IDAHO  CODE,
  3        TO  REVISE DEFINITIONS AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
  4        67-5717, IDAHO CODE, TO REVISE POWERS AND DUTIES OF THE  ADMINISTRATOR  OF
  5        THE  DIVISION  OF  PURCHASING AND TO MAKE A TECHNICAL CORRECTION; AMENDING
  6        SECTION 67-5718, IDAHO CODE, TO REVISE  PROCEDURES  FOR  REQUISITIONS  FOR
  7        PROPERTY;  AMENDING  SECTION  67-5718A, IDAHO CODE, TO DELETE REFERENCE TO
  8        AND DEFINITIONS RELATED TO INFORMATION TECHNOLOGY,  TO  PROVIDE  THAT  THE
  9        ADMINISTRATOR MAY AWARD MULTIPLE CONTRACTS UNDER SPECIFIED CRITERIA AND TO
 10        MAKE A TECHNICAL CORRECTION; AMENDING SECTION 67-5720, IDAHO CODE, TO PRO-
 11        VIDE PROCEDURES FOR ACQUISITION OF PROPERTY IN THE OPEN MARKET, TO PROVIDE
 12        FOR  EMERGENCY  PURCHASES AND TO REVISE NOTICE REQUIREMENTS; AMENDING SEC-
 13        TION 67-5722, IDAHO CODE,  TO  DELETE  REFERENCE  TO  REGISTERED  VENDORS;
 14        AMENDING  SECTION  67-5726,  IDAHO CODE, TO DELETE REFERENCE TO REGISTERED
 15        VENDORS AND TO MAKE A GRAMMATICAL CORRECTION; AMENDING  SECTION  67-5727A,
 16        IDAHO  CODE, TO DELETE REFERENCE TO REGISTERED VENDORS AND TO MAKE A TECH-
 17        NICAL CORRECTION; AMENDING SECTION 67-5729, IDAHO CODE, TO  DELETE  REFER-
 18        ENCE  TO REGISTERED VENDORS AND TO PROVIDE TECHNICAL CORRECTIONS; AMENDING
 19        SECTION 67-5730, IDAHO CODE, TO REVISE PROCEDURES PROVIDING FOR  A  QUALI-
 20        FIED  VENDOR, TO PROVIDE CRITERIA FOR HOW A VENDOR MAY BE DISQUALIFIED, TO
 21        DELETE THE REQUIREMENT OF AND REFERENCE TO A REGISTERED VENDOR AND TO MAKE
 22        A TECHNICAL CORRECTION; AMENDING SECTION 67-5732, IDAHO CODE,  TO  PROVIDE
 23        FOR  RULES  ADDRESSING SPECIFICATIONS DEVELOPMENT, PERFORMANCE TESTING AND
 24        SUBMISSION AND EVALUATION OF BIDS; AND  AMENDING  SECTION  67-5733,  IDAHO
 25        CODE, TO REVISE THE APPEALS PROCESS.
                                                                        
 26    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 27        SECTION  1.  That  Section 67-5716, Idaho Code, be, and the same is hereby
 28    amended to read as follows:
                                                                        
 29        67-5716.  DEFINITIONS OF TERMS. (1) Acquisition. The process of  procuring
 30    or purchasing property by the state of Idaho.
 31        (2)  Procurement.  Obtaining property for state use by lease, rent, or any
 32    manner other than by purchase or gift.
 33        (3)  Property. Goods, services, parts, supplies and equipment, both tangi-
 34    ble and intangible, including, but nonexclusively, designs,  plans,  programs,
 35    systems, techniques and any rights and interests in such property.
 36        (4)  Goods. Items of personal property, not qualifying as equipment, parts
 37    or supplies.
 38        (5)  Services.   Personal  services,  in  excess  of  personnel  regularly
 39    employed for whatever duration and/or covered by personnel  system  standards,
 40    for  which  bidding is not prohibited or made impractical by statute, rules or
 41    generally accepted ethical practices.
 42        (6)  Parts. Items of personal property acquired for repair or  replacement
 43    of unserviceable existing items.
                                                                        
                                           2
                                                                        
  1        (7)  Supplies.  Items of personal property having an expendable quality or
  2    during its their normal use is are consumed and  which  requires  or  suggests
  3    acquisition in bulk.
  4        (8)  Equipment. Items of personal property which have a normal useful life
  5    expectancy of two (2) or more years.
  6        (9)  Component.  An  item  of property normally assembled with other items
  7    into a unified productive whole at the site of  use,  which  items  belong  to
  8    functional  classes  that may be interchangeable units of similar function but
  9    differing operational or productive capabilities.
 10        (10) Vendor. A person or entity  capable  of  supplying  property  to  the
 11    state.
 12        (11) Bidder.  A  registered  vendor  who has submitted a bid on a specific
 13    item or items of property to be acquired by the state.
 14        (12) Lowest responsible bidder. The responsible bidder whose bid  reflects
 15    the  lowest acquisition price to be paid by the state; except that when speci-
 16    fications are valued or comparative performance  examinations  are  conducted,
 17    the  results  of such examinations and the relative score of valued specifica-
 18    tions will be weighed, as set out in the specifications,  in  determining  the
 19    lowest acquisition price.
 20        (13) Contractor. A bidder who has been awarded an acquisition contract.
 21        (14) Registered vendor. A qualified vendor registered with the administra-
 22    tor of the division of purchasing.
 23        (15) Agency.  All  officers, departments, divisions, bureaus, boards, com-
 24    missions and institutions of the state, including the public utilities commis-
 25    sion, but excluding other legislative and judicial branches of government, and
 26    excluding the governor, the lieutenant governor, the secretary of  state,  the
 27    state  controller, the state treasurer, the attorney general, and the superin-
 28    tendent of public instruction.
 29        (165) Bid. A written offer to perform a contract  to  purchase  or  supply
 30    property  or services in response to an invitation for bid or request for pro-
 31    posal.
 32        (176) Recyclable. Materials that still have useful physical,  chemical  or
 33    biological  properties  after  serving their original purposes and can, there-
 34    fore, be reasonably reused or recycled for the same or other purposes.
 35        (187) Recycled-content product. A product  containing  postconsumer  waste
 36    and/or secondary waste as defined in this section.
 37        (198) Postconsumer waste. A finished material which would normally be dis-
 38    posed of as a solid waste, having completed its life cycle as a consumer item.
 39        (2019) Secondary  waste.  Fragments  of products or finished products of a
 40    manufacturing process, which has converted a virgin resource into a  commodity
 41    of real economic value and may include a postconsumer waste.
                                                                        
 42        SECTION  2.  That  Section 67-5717, Idaho Code, be, and the same is hereby
 43    amended to read as follows:
                                                                        
 44        67-5717.  POWERS AND DUTIES OF THE ADMINISTRATOR OF THE DIVISION  OF  PUR-
 45    CHASING. The administrator of the division of purchasing:
 46        (1)  Shall acquire, according to the provisions of this chapter, all prop-
 47    erty for state agencies;
 48        (2)  Shall  acquire all property, unless excepted, by competitive bid, and
 49    shall specifically require competitive bids for property to be rented,  leased
 50    or purchased through a deferred payment plan;
 51        (3)  Shall  determine, based upon the requirements contained in the speci-
 52    fication and matter relating to responsibility, the lowest responsible  bidder
 53    in all competitively bid acquisition contracts;
                                                                        
                                           3
                                                                        
  1        (4)  Shall  enter into all contracts and agreements, and any modifications
  2    thereto, for the acquisition of any and all property in on behalf  of  and  in
  3    the name of the state;
  4        (5)  Shall, when economically feasible and practical, consolidate requisi-
  5    tions  and  acquire property in amounts as large as can be efficiently managed
  6    and controlled;
  7        (6)  May, in the evaluation of paper product bids, give those  items  that
  8    meet  the  recycled content standards as specified by the administrator a five
  9    percent (5%) purchasing preference. As such, those qualifying  paper  products
 10    may  be  considered  to  cost  five percent (5%) less when choosing the lowest
 11    responsible bidder;
 12        (7)  May appoint a deputy, who shall have power to act for him and in  his
 13    place while absent, which deputy shall be bonded to the state of Idaho as pre-
 14    scribed by chapter 8, title 59, Idaho Code;
 15        (8)  May  require from any contractor the submission of a performance bond
 16    for such sum as will, in the  opinion  of  the  administrator,  guarantee  the
 17    faithful performance of such contract, and the amount and requirement therefor
 18    shall be set out in the specifications;
 19        (9)  May  enter  into  open contracts for the acquisition of property com-
 20    monly used by the various agencies, based upon actual  or  estimated  require-
 21    ments;
 22        Unless  an  acquiring agency can show a substantial difference between the
 23    required capabilities and the capabilities provided by such property available
 24    on open contract, all agencies must utilize such property  available  on  such
 25    contracts  and failure to comply with this provision will subject the officers
 26    responsible for the acquisition to the penalties set forth in this chapter;
 27        (10) May enter into contracts, including leases and rentals,  for  periods
 28    of time exceeding one (1) year provided that such contracts contain no penalty
 29    to  or restriction upon the state in the event cancellation is necessitated by
 30    a lack of financing for any such contract or contracts;
 31        (11) Is authorized and empowered to formulate rules in the conduct of  the
 32    office  of the division of purchasing, subject to the approval of the director
 33    of the department of administration;
 34        (12) In accordance with established rules of the division, may accept com-
 35    petitive sealed proposals and enter into negotiations  for  acquisitions;  for
 36    which  competitive  sealed  bidding  is not practicable or advantageous to the
 37    state;
 38        (13) May inspect property delivered by a contractor to  determine  whether
 39    it meets minimum bid specifications;
 40        (14) May  classify,  after  review with the various agencies, the require-
 41    ments of the state for all property which may be acquired and adopt  standards
 42    of  quality  for  property, and establish standard specifications for acquisi-
 43    tion. Each standard specification shall, until  revised  or  rescinded,  apply
 44    alike  in  terms and effect to each future acquisition of the classified prop-
 45    erty.
                                                                        
 46        SECTION 3.  That Section 67-5718, Idaho Code, be, and the same  is  hereby
 47    amended to read as follows:
                                                                        
 48        67-5718.  REQUISITIONS FOR PROPERTY -- NOTICE -- FORM -- GUARANTEE -- PRO-
 49    CEDURE FOR BIDDING. (1)  The administrator of the division of purchasing shall
 50    not make or cause to be made any acquisition until a requisition for the prop-
 51    erty to be acquired has been filed in submitted to his office, and such requi-
 52    sition must bear the certificate of the head of the agency making the requisi-
 53    tion  by  the  requisitioning  agency,  certifying  to the satisfaction of the
                                                                        
                                           4
                                                                        
  1    administrator that there are proper funds or sufficient balance in  appropria-
  2    tions  out of which the amount of the requisition may lawfully be paid, except
  3    as provided to the contrary under provisions of this  chapter  allowing  emer-
  4    gency purchases.
  5        If  the  property  to  be  acquired  may reasonably be expected to cost in
  6    excess of twenty-five thousand dollars ($25,000) if purchased, or one thousand
  7    dollars ($1,000) per month if procured, there must be accompanying the  requi-
  8    sition  a copy of the specifications proposed for use in the acquisition. Upon
  9    receipt of the requisition, notice  must  be  commenced  within  a  reasonable
 10    period  of  time and must allow not less than ten (10) days from notice to bid
 11    opening date.
 12        Provided, however, that in cases where the total value of the property  to
 13    be acquired is not in excess of twenty-five thousand dollars ($25,000) if pur-
 14    chased,  or  one thousand dollars ($1,000) per month if procured, the adminis-
 15    trator shall notify registered vendors in such manner as he deems appropriate.
 16    To enhance small business bidding opportunities, the administrator shall  seek
 17    a minimum of three (3) bids from registered vendors having a significant Idaho
 18    economic presence as defined in the Idaho Code. If he finds that it is imprac-
 19    tical  or impossible to obtain three (3) bids for the proposed transaction, he
 20    may acquire the property in any manner he deems best. For any acquisition  not
 21    otherwise  requiring specifications, the same may be required by rule drawn by
 22    the administrator.
 23        Provided further, however, that in connection with the award of  any  con-
 24    tract for the placement of any order for state printing, binding, engraving or
 25    stationery  work,  the  provisions  of sections 60-101 and 60-103, Idaho Code,
 26    shall apply to the extent that the same may be inconsistent with any  require-
 27    ments contained in this section.
 28        (2)  Notice  shall be sent to each registered vendor of the property to be
 29    acquired, except that if there are more than ten (10) registered  vendors  for
 30    the  property  to be acquired, the administrator of the division of purchasing
 31    may, in his discretion, limit the notices sent to ten (10). Nothing shall pre-
 32    vent all registered vendors from bidding on the property to be acquired posted
 33    of all acquisitions of property, unless otherwise excepted  by  rules  of  the
 34    division.  The  notice  may  be posted electronically. The administrator shall
 35    also cause all invitations to bid and requests for proposals to be posted man-
 36    ually in a conspicuous place in his the office.  The notice shall describe the
 37    property to be acquired in sufficient detail to apprise a bidder of the  exact
 38    nature  or  functionality  of  the  property required; and shall give the time
 39    when, and the place where, bids will be opened. The bid opening date shall  be
 40    set  forth  in  the  specifications.  Each bid shall be in writing, sealed and
 41    marked, "sealed bid for ...., to be opened ...., 19.." and shall be mailed  or
 42    delivered  to the office of the administrator of the division of purchasing at
 43    Boise, Idaho set forth the bid opening date, time and location.
 44        (3)  To enhance small business bidding  opportunities,  the  administrator
 45    shall seek a minimum of three (3) bids from vendors having a significant Idaho
 46    economic presence as defined in section 67-2349, Idaho Code.
 47        (4)  All sealed bids received shall be opened at the time and place speci-
 48    fied, in the invitation for bids, and in the public view, and a record of each
 49    bid  shall  then  and  there be made. Contracts shall be awarded to and orders
 50    placed with the lowest responsible bidder. If the competitive sealed  proposal
 51    method  is  used,  award shall be made to the lowest responsible bidder on the
 52    basis of initial proposals received or, if applicable, following  receipt  and
 53    evaluation  of  best and final offers or negotiations. The administrator shall
 54    have the right to reject any and all bids pursuant to  rules  established  for
 55    the division.
                                                                        
                                           5
                                                                        
  1        (5)  Where  both  the  bids  and quality of property offered are the same,
  2    preference shall be given to property of local  and  domestic  production  and
  3    manufacture  or  from  bidders having a significant Idaho economic presence as
  4    defined in the Idaho Code. In connection with the award of  any  contract  for
  5    the  placement  of any order for state printing, binding, engraving or statio-
  6    nery work, the provisions of sections 60-101 and  60-103,  Idaho  Code,  shall
  7    apply  to  the  extent that the same may be inconsistent with any requirements
  8    contained in this section.
  9        (6)  As used in this section, the word "sealed" does not  preclude  accep-
 10    tance of electronically sealed and submitted bids in addition to bids manually
 11    sealed and submitted.
                                                                        
 12        SECTION  4.  That Section 67-5718A, Idaho Code, be, and the same is hereby
 13    amended to read as follows:
                                                                        
 14        67-5718A.  ACQUISITION OF INFORMATION TECHNOLOGY PROPERTY BY  CONTRACT  --
 15    AWARD  TO MORE THAN ONE BIDDER -- STANDARDS FOR MULTIPLE AWARDS -- APPROVAL BY
 16    ADMINISTRATOR. (1) Notwithstanding any provision of this chapter to  the  con-
 17    trary,  the administrator of the division of purchasing may make an award of a
 18    contract to two (2) or more bidders to furnish the same or similar information
 19    technology property where more than one (1) contractor is necessary:
 20        (a)  To furnish the types of property and  quantities  required  by  state
 21        agencies;
 22        (b)  To provide expeditious and cost-efficient acquisition of property for
 23        state agencies; or
 24        (c)  To enable state agencies to acquire property which is compatible with
 25        property previously acquired.
 26        (2)  As used in this section:
 27        (a)  "Information  technology  property"  includes, but is not limited to,
 28        all present and future forms of computer hardware, computer  software,  or
 29        services  used or required for automated data processing, computer related
 30        office automation or telecommunications.
 31        (b)  "Telecommunications" includes, but is not limited to, all present and
 32        future forms of hardware, software or services used or required for trans-
 33        mitting voice, data, video or images over a distance.
 34        (3)  No award of a contract to multiple bidders shall be made  under  this
 35    section unless the administrator of the division of purchasing makes a written
 36    determination  showing  that multiple awards satisfies satisfy one (1) or more
 37    of the criteria set forth in this section.
 38        (43)  Where a  contract  for  information  technology  property  has  been
 39    awarded  to  two  (2) or more bidders in accordance with this section, a state
 40    agency shall make purchases from the contractor  whose  terms  and  conditions
 41    regarding price, availability, support services and delivery are most advanta-
 42    geous to the agency.
 43        (54)  A  multiple  award of a contract for information technology property
 44    under this section shall not be made when a single bidder can reasonably serve
 45    the acquisition needs of state agencies. A multiple award of a contract  shall
 46    only be made to the number of bidders necessary to serve the acquisition needs
 47    of state agencies.
                                                                        
 48        SECTION  5.  That  Section 67-5720, Idaho Code, be, and the same is hereby
 49    amended to read as follows:
                                                                        
 50        67-5720.  ACQUISITION OF MINOR ITEMS IN  OPEN  MARKET  --  EMERGENCY  PUR-
 51    CHASES. (1) The administrator may allow, under rules prescribed,:
                                                                        
                                           6
                                                                        
  1        (a)  Tthe purchase of minor items of property in the open market, provided
  2        such  items are not available from the maintenance of stocks authorized by
  3        section 67-5727, Idaho Code,. When where the administrator  finds  that  a
  4        particular  savings to the state may be had through the use of educational
  5        discounts, acquisition of federal surplus or excess property, reverse pub-
  6        lic auctions, where there is only one (1) vendor for the  property  to  be
  7        acquired  or  under  other  circumstances  approved by the director of the
  8        department of administration.
  9        (b)  The purchase of property by open purchase when  immediate delivery of
 10        property is required by the public exigencies and the administrator of the
 11        division of purchasing has declared that an emergency exists, the property
 12        required may be acquired by open purchase, but at all times such purchases
 13        shall be made under the direction of the administrator. The  administrator
 14        may, in his discretion, declare an emergency when he finds that particular
 15        savings  to the state may be had through the use of educational discounts,
 16        acquisition of federal surplus or excess property, when there is only  one
 17        (1)  vendor  for the property to be acquired, or under other circumstances
 18        approved by the director of the department of administration.
 19        (2)  When there is only one (1) vendor for the property  to  be  acquired,
 20    unless  the  property is required for a life-threatening situation or a situa-
 21    tion that is immediately detrimental to the public welfare or property, notice
 22    of a sole source procurement shall be published. in a public, statewide publi-
 23    cation at least ten (10) working days prior to the award of the  contract  The
 24    notice  may  be  electronic.  Payment vouchers for emergency acquisitions must
 25    contain upon their faces the justification for such purchases.
                                                                        
 26        SECTION 6.  That Section 67-5722, Idaho Code, be, and the same  is  hereby
 27    amended to read as follows:
                                                                        
 28        67-5722.  SALE,  TRADE-IN OR EXCHANGE OF STATE PERSONAL PROPERTY. Whenever
 29    any agency owns any property no longer economical to use, the administrator of
 30    the division of purchasing may dispose of such property by exchanging the same
 31    in part payment for new property, as provided for in this section. The  admin-
 32    istrator of the division of purchasing shall include in his request for bids a
 33    full  description  of  the  property to be exchanged as part payment and shall
 34    permit each registered vendors to examine the same, and the contract shall  be
 35    awarded on the basis of net cost to the state after allowance for the property
 36    to  be  exchanged in part payment. In addition, the administrator of the divi-
 37    sion of purchasing may permit an exchange of property in part payment for  new
 38    property acquisitions from contracts for the same or similar property.
 39        Exchange  of  property will be permitted only when it is determined by the
 40    administrator of the division of purchasing that all other methods of disposal
 41    of the property sought to be exchanged will yield a lesser monetary return  to
 42    the state.
 43        In  accordance  with  the  internal  management  policies,  guidelines  or
 44    instructions  of the board of examiners, the head of any agency may declare as
 45    surplus any item of personal property.
                                                                        
 46        SECTION 7.  That Section 67-5726, Idaho Code, be, and the same  is  hereby
 47    amended to read as follows:
                                                                        
 48        67-5726.  PROHIBITIONS.  (1)  No contract or order or any interest therein
 49    shall be transferred by the contractor or vendor  to  whom  such  contract  or
 50    order  is  given  to  any  other party, without the approval in writing of the
 51    administrator. Transfer of a contract without approval shall cause the  annul-
                                                                        
                                           7
                                                                        
  1    ment of the contract so transferred, at the option of the state. All rights of
  2    action,  however,  for  any breach of such contract by the contracting parties
  3    are reserved to the state. No member of the  legislature  or  any  officer  or
  4    employee  of any branch of the state government shall directly, himself, or by
  5    any other person in trust for him or for his use or benefit or on his account,
  6    undertake, execute, hold or enjoy, in whole or in part, any contract or agree-
  7    ment made or entered into by or on behalf of the state of Idaho, if  made  by,
  8    through, or on behalf of the department in which he is an officer or employee;
  9    or  if  made  by, through or on behalf of any other department unless the same
 10    are is made after competitive bids.
 11        (2)  Except as provided by section 67-5718,  Idaho  Code,  no  officer  or
 12    employee  shall influence or attempt to influence the award of a contract to a
 13    particular registered vendor, or to deprive or attempt to deprive  any  regis-
 14    tered vendor of an acquisition contract.
 15        (3)  No officer or employee shall conspire with a vendor or its agent, and
 16    no  vendor  or its agent shall conspire with an officer or employee, to influ-
 17    ence or attempt to influence the award of a contract, or to deprive or attempt
 18    to deprive a registered vendor of an acquisition award.
 19        (4)  No officer or employee shall fail to utilize an open contract without
 20    justifiable cause for such action. No officer or employee shall  accept  prop-
 21    erty  which  he  knows  does not meet specifications or substantially meet the
 22    original performance test results.
 23        (5)  Deprivation, influence or attempts thereat shall not include  written
 24    reports,  based  upon  substantial  evidence, sent to the administrator of the
 25    division of purchasing concerning matters relating to  the  responsibility  of
 26    registered vendors.
 27        (6)  No  vendor  or related party, or subsidiary, or affiliate of a vendor
 28    may submit a bid to obtain a contract to provide property to the state, if the
 29    vendor or related party, or affiliate or subsidiary was paid for services uti-
 30    lized in preparing the bid specifications or if the  services  influenced  the
 31    procurement process.
                                                                        
 32        SECTION  8.  That Section 67-5727A, Idaho Code, be, and the same is hereby
 33    amended to read as follows:
                                                                        
 34        67-5727A.  PARTICIPATION IN GROUP DISCOUNT PURCHASING. (1) In addition  to
 35    other  means of procuring stocks of commonly used items, the division adminis-
 36    trator may authorize an agency to become a participating  member  of  a  group
 37    discount purchasing organization, if the administrator finds that:
 38        (a)  The items to be acquired are at lease least equal in quality to simi-
 39        lar items or the same items that the agency uses;
 40        (b)  The  items  to  be  acquired  are  less  costly  to the state than if
 41        acquired by other means authorized in this chapter;
 42        (c)  The state's participation in the  organization  is  formalized  by  a
 43        written  contract  that extends for no longer than one (1) year at a time;
 44        and
 45        (d)  The state's entrance fee, or participation fee, in  the  organization
 46        is  based  on  criteria  applied to all other members of the organization,
 47        provides no ownership rights; and
 48        (e)  The supplier is a registered vendor.
 49        (2)  Any contract entered into under the provisions of this section  shall
 50    be  maintained  on file with the division, as well as with the agency entering
 51    into the contract.
 52        (3)  Items acquired shall be used solely by state departments and agencies
 53    and may not be transferred from state ownership until useful  life  is  extin-
                                                                        
                                           8
                                                                        
  1    guished  and may not be provided to individuals except those in the custody of
  2    the state or to those receiving direct personal services from the state.
                                                                        
  3        SECTION 9.  That Section 67-5729, Idaho Code, be, and the same  is  hereby
  4    amended to read as follows:
                                                                        
  5        67-5729.  APPLICATION  OF  ADMINISTRATIVE  PROCEDURE ACT. All rules of the
  6    division of purchasing shall be adopted in accordance with the  provisions  of
  7    chapter 52, title 67, Idaho Code. Only purchase appeals conducted as contested
  8    cases  pursuant to section 67-5733(1)(c)(iii), Idaho Code, shall be subject to
  9    the judicial review provisions of chapter 52, title 67, Idaho Code. This  sec-
 10    tion  shall  not  impair any contract right or contract remedy which may exist
 11    between the state and a properly licensed or registered contractor or vendor.
 12        The determinations officer provided in section 67-5733, Idaho  Code,  this
 13    chapter may subpoena witnesses and evidence and administer oaths.
 14        In  the  event  that a determinations officer is appointed pursuant to the
 15    provisions of section 67-5733, Idaho Code, any registered vendor who has  sub-
 16    mitted a bid in the process under review shall, notwithstanding any other dis-
 17    ability,  have  standing  to  intervene  in the proceeding as a party and such
 18    intervenor may participate in the purchase appeal or  appeal  from  any  final
 19    order  entered in a contested case conducted under section 67-5733(1)(c)(iii),
 20    Idaho Code.
                                                                        
 21        SECTION 10.  That Section 67-5730, Idaho Code, be, and the same is  hereby
 22    amended to read as follows:
                                                                        
 23        67-5730.  REGISTRATION  QUALIFICATION OF VENDORS -- RULES AND PROCEDURE --
 24    FAILURE TO BID -- DISQUALIFICATION OF VENDORS -- NOTICE  --  APPEALS.  (1)  No
 25    vendor  shall  be allowed to submit a bid unless such vendor is qualified. and
 26    has registered prior to the time of the bid opening. All vendors are qualified
 27    unless disqualified. Qualified vendors shall be registered at  any  time  upon
 28    request and submission of information required by rule of the administrator of
 29    the  division  of  purchasing  which shall include, but not be limited to, the
 30    following: name of the vendor, an official address  and  telephone  number  at
 31    which  to receive notices from the administrator of the division of purchasing
 32    and a list of the property which the vendor would sell or supply to the state,
 33    and this list may be stated in terms of a general class of property  in  place
 34    of  a  specific  itemization.  A ten dollar ($10.00) biennial registration fee
 35    shall accompany the request, which moneys shall be deposited  in  the  general
 36    account of the state treasury.
 37        Notice  of renewal shall be mailed to the registered vendor at least sixty
 38    (60) days prior to the expiration date of the vendor's  registration.  Failure
 39    to  renew  the registration and pay the biennial registration fee shall result
 40    in removal of the vendor from the list of qualified vendors.
 41        Registered vendors may be removed from the list of registered vendors  for
 42    failure  to  participate  by submitting a bid in five (5) consecutive acquisi-
 43    tions of property which such vendor is registered to supply to the state,  and
 44    for which the vendor has been notified of intended acquisition; provided, how-
 45    ever,  that submission of a no-bid response shall not be deemed failure on the
 46    part of the vendor to participate. A vendor so removed shall be  given  notice
 47    of removal and shall be eligible for re-registration at any time unless other-
 48    wise disqualified.
 49        (2)  Vendors may be disqualified for any of the following reasons:
 50        (a)  Failure to perform according to the terms of any agreement;
 51        (b)  Attempts  by whatever means to cause acquisition specifications to be
                                                                        
                                           9
                                                                        
  1        drawn so as to favor a specific vendor;
  2        (c)  Use of the provisions of this chapter  to  obstruct  or  unreasonably
  3        delay  acquisitions  by the state. Obstruction is hereby defined as a lack
  4        of success in more than fifty per cent percent (50%) of the  specification
  5        challenges  made  in  each  of three (3) different acquisitions during any
  6        twenty-four (24) month period;
  7        (d)  Perjury in a vendor disqualification hearing;
  8        (e)  To knowingly violate the provisions of this chapter; or
  9        (f)  Debarment, suspension or ineligibility from  federal  contracting  of
 10        the vendor, its principals or affiliates.
 11        (3)  A vendor shall be notified by registered mail within ten (10) days of
 12    disqualification  and  may,  within  thirty  (30)  days of the receipt of such
 13    notice, request of the director of the department of administration a  hearing
 14    before a determinations officer. Any hearings shall be held in accordance with
 15    chapter 52, title 67, Idaho Code.
 16        (4)  In lieu of disqualification, the determinations officer may recommend
 17    to the director of the department of administration specific conditions to the
 18    vendor's continued participation in acquisitions by the state.
 19        (5)  Disqualification  or  conditions  may  be imposed for a period of not
 20    less than six (6) months or not more than five (5) years.
                                                                        
 21        SECTION 11.  That Section 67-5732, Idaho Code, be, and the same is  hereby
 22    amended to read as follows:
                                                                        
 23        67-5732.  RULES.  In addition to any other rules promulgated by the admin-
 24    istrator, he shall adopt rules which shall serve to enhance the intent of this
 25    chapter. Among the subjects addressed shall be rules addressing specifications
 26    development, performance testing and the submission and evaluation of bids.:
 27        (1)  Rules requiring specifications to  be  in  writing,  to  contain  all
 28    requirements  including  alternatives, to set forth all methods and procedures
 29    to be used in the submission and evaluation of bids, and such other matters as
 30    are necessary to facilitate the bidding process;
 31        (2)  A rule providing a means for interested vendors to  cause  alteration
 32    of   any   specification   issued   if   such   alteration  will  improve  the
 33    competitiveness of bidding;
 34        (3)  Rules establishing the procedures for performance tests, where  prac-
 35    tical  and advisable, and requiring equipment tested during the bidding proce-
 36    dure to substantially meet or exceed those test results prior to acceptance by
 37    the state;
 38        (4)  Rules controlling acquisition of components which shall prevent  sub-
 39    stantial  changes  in the performance of equipment through multiple successive
 40    acquisitions;
 41        (5)  Rules requiring, when practical, specifications to describe the func-
 42    tion sought, the end results desired and the effect  to  be  achieved  by  the
 43    property to be acquired;
 44        (6)  Special  rules  for  specific categories of property, that because of
 45    the nature of the property and its  distinguishability  from  other  types  of
 46    property,  require  specialized  treatment  to insure a more effective bidding
 47    process.
                                                                        
 48        SECTION 12.  That Section 67-5733, Idaho Code, be, and the same is  hereby
 49    amended to read as follows:
                                                                        
 50        67-5733.  DIVISION OF PURCHASING -- APPEALS.
 51        (1)  (a)  There  shall  be, beginning with the day of receipt of notice, a
                                                                        
                                           10
                                                                        
  1        period of not more than ten (10) working days in which any vendor,  regis-
  2        tered  as  qualified and able to sell or supply the items to  be acquired,
  3        may notify in writing the administrator of the division  of purchasing  of
  4        his intention to challenge the specifications and shall specifically state
  5        the  exact  nature of his challenge. The specific challenge shall describe
  6        the location of the challenged portion or clause in the specification doc-
  7        ument, unless the challenge concerns an omission, explain why  any  provi-
  8        sion  should  be  struck,  added or altered, and contain suggested correc-
  9        tions.
 10             Upon receipt of the challenge, the administrator of the  division  of
 11        purchasing  shall either deny the challenge, and such denial shall be con-
 12        sidered the final agency decision, or he shall present the matter  to  the
 13        director of the department of administration for appointment of a determi-
 14        nations  officer.  If  the  director  of  the department of administration
 15        appoints a determinations officer, then all registered  vendors,  who  are
 16        invited to bid on the property sought to be acquired, shall be sent a copy
 17        of both the notice to challenge notified of the appeal and the appointment
 18        of  determinations  officer and may indicate in writing their agreement or
 19        disagreement with the challenge within five (5) days. The  notice  to  the
 20        vendors  may  be electronic.  Any registered vendor may note his agreement
 21        or disagreement with the challenge. The determinations officer may, on his
 22        own motion, refer the challenge portion and any related  portions  of  the
 23        challenge  to  the  author  of  the specification to be rewritten with the
 24        advice and comments of the registered vendors  capable  of  supplying  the
 25        property;  rewrite the specification himself and/or reject all or any part
 26        of any challenge. If specifications are to be rewritten, the matter  shall
 27        be  continued until the determinations officer makes a final determination
 28        of the acceptability of the revised specifications.
 29             The administrator shall reset the bid opening no later  than  fifteen
 30        (15)  days after final determination of challenges or the amendment of the
 31        specifications. If the administrator denies the challenge,  then  the  bid
 32        opening date shall not be reset.
 33             The  final decision of the determinations officer or administrator on
 34        the challenge to specifications shall not be considered a  contested  case
 35        within  the  meaning  of the administrative procedure act; provided that a
 36        vendor disagreeing with specifications may include such disagreement as  a
 37        reason  for asking for appointment of a determinations officer pursuant to
 38        section 67-5733(1)(c), Idaho Code.
 39        (b)  There shall be, beginning with the day following receipt of notice of
 40        rejection, a period of five (5) working days in which a bidder  whose  bid
 41        was  found  nonresponsive  may appeal such decision to the director of the
 42        department of administration. A nonresponsive bid, within the  meaning  of
 43        this  chapter,  is a bid which does not comply with the bid invitation and
 44        specifications and shall not apply to a vendor whose bid is considered but
 45        who is determined not to be the lowest responsible bidder  as  defined  in
 46        this chapter. The director shall:
 47             (i)  Deny the application; or
 48             (ii) Appoint a determinations officer to review the record and submit
 49             a  recommended  order  to  the  director  to  affirm  or  reverse the
 50             administrator's decision of bid nonresponsiveness.
 51        The director shall, upon receipt of  a  written  recommendation  from  the
 52        determinations  officer,  sustain,  modify  or reverse the administrator's
 53        nonresponsive bid decision. An appeal conducted under  the  provisions  of
 54        this  subsection shall not be considered a contested case and shall not be
 55        subject to judicial review  under the provisions of chapter 52, title  67,
                                                                        
                                           11
                                                                        
  1        Idaho Code.
  2        (c)  A  vendor  whose  bid is considered may, within five (5) working days
  3        following receipt of notice that he is not the lowest responsible  bidder,
  4        apply  to the director of the department of administration for appointment
  5        of a determinations officer. The application shall set forth  in  specific
  6        terms  the reasons why the administrator's decision is thought to be erro-
  7        neous. Upon receipt of the application, the director  shall  within  three
  8        (3) working days:
  9             (i)   Deny  the  application, and such denial shall be considered the
 10             final agency decision; or
 11             (ii)  Appoint a determinations officer to review the record to deter-
 12             mine whether the administrator's  selection of the lowest responsible
 13             bidder is correct; or
 14             (iii) Appoint a determinations officer with authority  to  conduct  a
 15             contested  case  hearing in accordance with the provisions of chapter
 16             52, title 67, Idaho Code.
 17             A   determinations   officer   appointed    pursuant    to    section
 18        67-5733(1)(c)(ii), Idaho Code, shall inform the director by written recom-
 19        mendation  whether,  in  his opinion, the administrator's selection of the
 20        lowest responsible bidder is correct. The determinations officer in making
 21        this recommendation may rely on the documents  of  record,  statements  of
 22        employees  of  the state of Idaho participating in any phase of the selec-
 23        tion process, and statements of any vendor submitting a bid.  A  contested
 24        case hearing shall not be allowed and the determinations officer shall not
 25        be  required  to  solicit  statements from any person. Upon receipt of the
 26        recommendation from the determinations officer, the  director  shall  sus-
 27        tain, modify or reverse the decision of the administrator on the selection
 28        of  the lowest responsible bidder or the director may appoint a determina-
 29        tions officer pursuant to section 67-5733(1)(c)(iii), Idaho Code.
 30             A   determinations   officer   appointed    pursuant    to    section
 31        67-5733(1)(c)(iii), Idaho Code, shall conduct a contested case hearing and
 32        upon conclusion of the hearing shall prepare findings of fact, conclusions
 33        of  law  and  a  recommended  order  for the director of the department of
 34        administration. Upon receipt of the findings of fact, conclusions  of  law
 35        and  recommended order, the director shall enter a final order sustaining,
 36        modifying or reversing the decision of the administrator on the  selection
 37        of the lowest responsible bidder.
 38        (d)  In  the case of a sole source procurement, there shall be a period of
 39        not more than five (5) working days from the last date of public notice in
 40        which any vendor, able to sell or supply the item(s) to be  acquired,  may
 41        notify the administrator of the division of purchasing, in writing, of his
 42        intention to challenge the sole source procurement and briefly explain the
 43        nature of the challenge.
 44             Upon  receipt of the challenge, the director shall appoint a determi-
 45        nations officer to hear the challenge and, upon  receipt  of  the  written
 46        recommendation  of  the determinations officer, sustain, modify or reverse
 47        the approval for the sole source procurement. If unregistered, the  vendor
 48        issuing  the  challenge  shall  be required to register as a vendor to the
 49        state either:
 50             (i)  Deny the application; or
 51             (ii) Appoint a determinations officer to review the record and submit
 52             a recommended  order  to  the  director  to  affirm  or  reverse  the
 53             administrator's sole source determination.
 54             The director shall, upon receipt of a written recommendation from the
 55        determinations  officer,  sustain,  modify  or reverse the administrator's
                                                                        
                                           12
                                                                        
  1        sole source determination. An appeal conducted  under  the  provisions  of
  2        this  subsection shall not be considered a contested case and shall not be
  3        subject to judicial review under the provisions of chapter 52,  title  67,
  4        Idaho Code.
  5        (e)  The  administrator of the division of purchasing may, on his own ini-
  6        tiative, file a complaint with the director for a hearing before a  deter-
  7        minations officer. The director shall appoint a determinations officer who
  8        shall  make written recommendations to the director and the director shall
  9        render whatever decision is necessary to resolve the complaint.
 10        (2)  The director of the department of administration is hereby authorized
 11    and directed to appoint a determinations officer whenever one is  required  by
 12    this  chapter.  The  officer  shall  meet and render whatever determination is
 13    called for. When a complaint is filed pursuant to section 67-5733(1)(b), Idaho
 14    Code, no bid may be awarded until the final decision is rendered by the direc-
 15    tor of the department of administration; provided  that  in  all  other  cases
 16    where  a  determinations  officer  is  appointed by the director, the director
 17    shall have the power to allow the acquisition contract to be  awarded  to  the
 18    successful bidder prior to or after the decision of the determinations officer
 19    if  he  determines  such  award  to  be in the best interest of the state. Any
 20    determinations officer appointed pursuant to this chapter section shall  exist
 21    only  for the duration of unresolved complaints on an acquisition and shall be
 22    dismissed upon resolution of all such complaints. The  determinations  officer
 23    shall  be  guided  in  his determination by the best economic interests of the
 24    state for both the near future and more extended periods of time. In  addition
 25    to  the  powers  conferred  on the determinations officer, the director of the
 26    department of administration may: impose the  penalty  prescribed  by  section
 27    67-5734(3),  Idaho  Code;  enjoin  any  activity  which violates this chapter;
 28    direct that bids be rejected, or  sustained;  direct  that  specifications  be
 29    rejected, sustained or modified; and direct further legal action.
 30        (3)  Challenges   or   appeals   filed   conducted   pursuant  to  section
 31    67-5733(1)(a), (1)(b), (1)(c)(i) or (1)(c)(ii), Idaho Code, shall not be  con-
 32    sidered  to  be a contested case as that term is defined in the administrative
 33    procedure   act.   An   appeal   filed   conducted   pursuant    to    section
 34    67-5733(1)(c)(iii), Idaho Code, shall be conducted as a contested case accord-
 35    ing to the provisions of chapter 52, title 67, Idaho Code.

Statement of Purpose / Fiscal Impact


                     STATEMENT OF PURPOSE
                         RS 10517C1

The current statutes governing the Division of Purchasing 
have not been significantly changed since their enactment 
in 1974.  In their current form, certain of these statutes 
no longer serve their original goals of promoting competition 
and obtaining the best value for the state, often because 
they have not kept pace with real-world business developments, 
including technology.The proposed legislation will modernize 
the procurement statutes in limited but fundamental areas.  
These changes will allow the state to take advantage of new 
technologies enabling agencies to operate more effectively 
in today's marketplace.  They include:

      permitting certain notices and solicitations to be 
posted electronically;
      permitting bids to be submitted electronically, thus 
allowing the state and its vendors to use and take advantage 
of certain new technology; and
      removing the statutory vendor registration requirement; 
vendors will be able to "register" on-line to be notified of 
bid opportunities.

The proposed changes will make participation by vendors easier, 
thus encouraging added competition which results in lower prices 
and better values to government and its taxpayers. 

The transformation to "digital purchasing" that the proposed 
changes will support will not be immediate.  The paper system 
will be maintained to accommodate vendors' needs during the 
transformation.  

                     FISCAL IMPACT

Approximately $40,000 decrease per year to the General Fund by 
the elimination of the registered vendor requirement that will 
need to be replaced in the Division of Purchasing budget with 
General Fund moneys.  However, it is anticipated that the 
administrative efficiencies that will result from this legislation 
will result in cost savings to the State and its agencies.

CONTACT
Name:  Joanna L. Guilfoy, Deputy Attorney General
Agency:  Department of Administration
Phone: 332-1832

Statement of Purpose/Fiscal Note            S102