House File 2548
HOUSE FILE
BY COMMITTEE ON GOVERNMENT
OVERSIGHT
(SUCCESSOR TO HSB 623)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to competitive bidding requirements for state
2 agencies and establishing purchasing goals from certain
3 businesses located in this state.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 5934HV 80
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PAG LIN
1 1 Section 1. NEW SECTION. 7D.36 REVIEW OF CONTRACTS.
1 2 Every purchase by an agency, department, commission, board,
1 3 committee, officer, or other governing body of the state in
1 4 excess of twenty=five thousand dollars shall be reviewed by
1 5 the executive council, regardless of the existence of any
1 6 master contract or agreement that may otherwise be available
1 7 for that purchase, unless that purchase was made through a
1 8 competitive bidding procedure as defined in section 8A.301,
1 9 subsection 2. Every purchase in excess of fifty thousand
1 10 dollars shall be reviewed by the executive council. The
1 11 council shall promulgate rules, pursuant to chapter 17A, to
1 12 establish a procedure for the review of contracts for
1 13 purchases pursuant to this section.
1 14 Sec. 2. Section 8A.311, unnumbered paragraph 1, Code
1 15 Supplement 2003, is amended to read as follows:
1 16 The director shall adopt rules establishing competitive
1 17 bidding procedures. The term of any master contract for the
1 18 purchase of equipment, supplies, or services shall be for no
1 19 longer than one year, and may be extended for one additional
1 20 year. In order to extend a master contract beyond the second
1 21 year, the department shall, not less than thirty days prior to
1 22 the intended extension, post notice of an intent to extend a
1 23 master contract on a centralized internet website provided and
1 24 maintained by the department. Following this notification
1 25 process a master contract may be annually extended up to two
1 26 times.
1 27 Sec. 3. Section 8A.311, subsection 1, Code Supplement
1 28 2003, is amended to read as follows:
1 29 1. a. All equipment, supplies, or services procured by
1 30 the department shall be purchased by a competitive bidding
1 31 procedure. For purposes of this section, unless the context
1 32 otherwise requires, "services" shall not include construction
1 33 services or professional services for which a license,
1 34 certification, registration, or similar credential, issued by
1 35 the state of Iowa, is required to provide the service.
2 1 However, the director may exempt by rule purchases of
2 2 noncompetitive items and purchases in lots or quantities too
2 3 small to be effectively purchased by competitive bidding.
2 4 Preference shall be given to purchasing Iowa products and
2 5 purchases from Iowa=based businesses if the Iowa=based
2 6 business bids submitted are comparable in price to bids
2 7 submitted by out=of=state businesses and otherwise meet the
2 8 required specifications. The department shall also give
2 9 preference to a small business, as defined in section 15.102,
2 10 if the bids are comparable in price to other bids submitted
2 11 and otherwise meet the required specifications. If the laws
2 12 of another state mandate a percentage preference for
2 13 businesses or products from that state and the effect of the
2 14 preference is that bids of Iowa businesses or products that
2 15 are otherwise low and responsive are not selected in the other
2 16 state, the same percentage preference shall be applied to Iowa
2 17 businesses and products when businesses or products from that
2 18 other state are bid to supply Iowa requirements.
2 19 b. Every purchase in excess of twenty=five thousand
2 20 dollars, regardless of the existence of any master contract or
2 21 agreement that may otherwise be available for that purchase,
2 22 including purchases otherwise authorized in subsection 8,
2 23 shall be made in compliance with the following procedure,
2 24 unless that purchase was made through a competitive bidding
2 25 procedure:
2 26 (1) Not less than thirty days prior to making the purchase
2 27 the department shall post notice of the terms of the intended
2 28 purchase on a centralized internet website provided and
2 29 maintained by the department.
2 30 (2) The department shall consider any proposal, received
2 31 up to and including thirty days following the posting of the
2 32 notice, from a vendor who proposes to meet the terms and
2 33 conditions of that proposed purchase at a price that is lower
2 34 than that specified in the notice.
2 35 (3) If the department wishes to complete the purchase
3 1 using the initial vendor, the department shall submit the
3 2 terms and conditions of that proposed purchase, along with any
3 3 other pertinent information, to the state auditor for review.
3 4 The auditor shall provide a recommendation concerning that
3 5 purchase to the executive council.
3 6 c. Any purchase in excess of twenty=five thousand dollars
3 7 made pursuant to paragraph "b", subparagraph (3), and any
3 8 purchase in excess of fifty thousand dollars must be reviewed
3 9 by the executive council as provided in section 7D.36.
3 10 Sec. 4. Section 8A.311, subsection 8, unnumbered paragraph
3 11 1, Code Supplement 2003, is amended to read as follows:
3 12 The Except as otherwise provided in this section, the
3 13 director shall adopt rules providing that any state agency
3 14 may, upon request, purchase directly from a vendor if the
3 15 direct purchasing is as economical or more economical than
3 16 purchasing through the department, or upon a showing that
3 17 direct purchasing by the state agency would be in the best
3 18 interests of the state due to an immediate or emergency need.
3 19 The rules shall include a provision permitting a state agency
3 20 to purchase directly from a vendor, on the agency's own
3 21 authority, if the purchase will not exceed five thousand
3 22 dollars and the purchase will contribute to the agency
3 23 complying with or exceeding the targeted small business
3 24 procurement goals under sections 73.15 through 73.21.
3 25 Sec. 5. Section 10A.104, subsection 8, Code Supplement
3 26 2003, is amended to read as follows:
3 27 8. Establish by rule standards and procedures for
3 28 certifying that targeted small businesses are eligible to
3 29 participate in the procurement program established in sections
3 30 73.15 through 73.21. Any Iowa business which has been
3 31 certified through the federal small business administration's
3 32 certification process as a small disadvantaged business is
3 33 automatically certified to participate in the procurement
3 34 program. The procedure for determination of eligibility shall
3 35 not include self=certification by a business. The director
4 1 shall maintain a current directory of targeted small
4 2 businesses that have been certified pursuant to this
4 3 subsection.
4 4 Sec. 6. Section 73.1, Code 2003, is amended by adding the
4 5 following new unnumbered paragraph:
4 6 NEW UNNUMBERED PARAGRAPH. All requests for proposals for
4 7 materials, products, supplies, provisions, and other needed
4 8 articles and services to be purchased at public expense shall
4 9 not knowingly be written in such a way as to exclude an Iowa=
4 10 based company capable of filling the needs of the purchasing
4 11 entity from submitting a responsive proposal.
4 12 Sec. 7. NEW SECTION. 73.12 SOFTWARE AND INFORMATION
4 13 TECHNOLOGY PURCHASES BY STATE.
4 14 1. PREFERENCE FOR IOWA COMPANIES. Every agency,
4 15 department, commission, board, committee, officer, or other
4 16 governing body of this state shall in good faith consider
4 17 purchasing software or information technology=related goods or
4 18 services supplied by companies located in this state. The
4 19 department of administrative services shall, on an annual
4 20 basis, provide a report to the government oversight committee
4 21 by January 1 each year. This report shall set out the dollar
4 22 value of software and information technology=related goods and
4 23 services supplied to the state entities or officers by
4 24 companies located in this state as compared to the value of
4 25 the total amount of such goods and services purchased for
4 26 state entities and officers.
4 27 2. PURCHASING SOFTWARE AND INFORMATION TECHNOLOGY.
4 28 a. Purchases of software and information technology goods
4 29 or services over fifty thousand dollars must be made using a
4 30 request for proposals and shall not be made using a master
4 31 contract without first seeking competitive bids. All master
4 32 contracts for purchases of software and information technology
4 33 goods or services shall be limited to two years in duration
4 34 and shall be nonrenewable.
4 35 b. When issuing a request for proposals for software or
5 1 information technology goods or services, all agencies,
5 2 departments, commissions, boards, committees, and other
5 3 governing bodies of this state shall post the request for
5 4 proposals on a centralized internet website provided and
5 5 maintained by the department of administrative services and
5 6 report all subsequent contract awards as a result of each
5 7 request for proposals on the website. The department of
5 8 administrative services shall provide an electronic
5 9 notification feature on the website that allows qualified
5 10 vendors to receive e=mail notification when a new request for
5 11 proposals is posted and awarded. Responses to and awards
5 12 relating to requests for proposals not posted on this site
5 13 using the required timeline for notification are
5 14 unenforceable.
5 15 Sec. 8. Section 216B.3, Code Supplement 2003, is amended
5 16 by adding the following new subsection:
5 17 NEW SUBSECTION. 12A. Make purchases of equipment,
5 18 supplies, and services in accordance with this subsection.
5 19 Every purchase in excess of twenty=five thousand dollars,
5 20 regardless of the existence of any master contract or
5 21 agreement that may otherwise be available for that purchase,
5 22 shall be made in compliance with the following procedure,
5 23 unless that purchase was made through a competitive bidding
5 24 procedure as defined in section 8A.301, subsection 2:
5 25 a. Not less than thirty days prior to making the purchase
5 26 the commission shall post notice of the terms of the intended
5 27 purchase on a centralized internet website provided and
5 28 maintained by the department of administrative services.
5 29 b. The commission shall consider any proposal, received up
5 30 to and including thirty days following the posting of the
5 31 notice, from a vendor who proposes to meet the terms and
5 32 conditions of that proposed purchase at a price that is lower
5 33 than that specified in the notice.
5 34 c. If the commission wishes to complete the purchase using
5 35 the initial vendor, the commission shall submit the terms and
6 1 conditions of that proposed purchase, along with any other
6 2 pertinent information, to the state auditor for review. The
6 3 auditor shall provide a recommendation concerning that
6 4 purchase to the executive council.
6 5 Any purchase in excess of twenty=five thousand dollars made
6 6 pursuant to paragraph "c" and any purchase in excess of fifty
6 7 thousand dollars must be reviewed by the executive council as
6 8 provided in section 7D.36.
6 9 Sec. 9. Section 262.9, Code Supplement 2003, is amended by
6 10 adding the following new subsection:
6 11 NEW SUBSECTION. 4A. Adopt rules, pursuant to chapter 17A,
6 12 that establish policies for fully competitive purchasing
6 13 systems that serve the best interests of the state, the board
6 14 of regents, and the regents institutions in accordance with
6 15 best practices. These policies shall address preferences for
6 16 Iowa products and suppliers, purchasing thresholds,
6 17 contracting provisions, qualifications of vendors, competitive
6 18 conditions, and cooperative purchasing. These policies are
6 19 not subject to the provisions of sections 7D.36 and 73.12.
6 20 Sec. 10. Section 307.21, subsection 4, paragraph a, Code
6 21 Supplement 2003, is amended to read as follows:
6 22 a. Provide centralized purchasing services for the
6 23 department, in cooperation with the department of
6 24 administrative services. Every purchase by the department in
6 25 excess of twenty=five thousand dollars, regardless of the
6 26 existence of any master contract or agreement that may
6 27 otherwise be available for that purchase, shall be made in
6 28 compliance with the following procedure, unless that purchase
6 29 was made through a competitive bidding procedure as defined in
6 30 section 8A.301, subsection 2:
6 31 (1) Not less than thirty days prior to making the purchase
6 32 the administrator shall post notice of the terms of the
6 33 intended purchase on a centralized internet website provided
6 34 and maintained by the department of administrative services.
6 35 (2) The department shall consider any proposal, received
7 1 up to and including thirty days following the posting of the
7 2 notice, from a vendor who proposes to meet the terms and
7 3 conditions of that proposed purchase at a price that is lower
7 4 than that specified in the notice.
7 5 (3) If the department wishes to complete the purchase
7 6 using the initial vendor, the department shall submit the
7 7 terms and conditions of that proposed purchase, along with any
7 8 other pertinent information, to the state auditor for review.
7 9 The auditor shall provide a recommendation concerning that
7 10 purchase to the executive council.
7 11 Any purchase in excess of twenty=five thousand dollars made
7 12 pursuant to subparagraph (3) and any purchase in excess of
7 13 fifty thousand dollars must be reviewed by the executive
7 14 council pursuant to section 7D.36.
7 15 PARAGRAPH DIVIDED. The administrator shall, when the price
7 16 is reasonably competitive and the quality as intended,
7 17 purchase soybean=based inks and plastic products with recycled
7 18 content, including but not limited to plastic garbage can
7 19 liners, and shall purchase these items in accordance with the
7 20 schedule established in section 8A.315. However, the
7 21 administrator need not purchase garbage can liners in
7 22 accordance with the schedule if the liners are utilized by a
7 23 facility approved by the environmental protection commission
7 24 created under section 455A.6, for purposes of recycling. For
7 25 purposes of this subsection, "recycled content" means that the
7 26 content of the product contains a minimum of thirty percent
7 27 postconsumer material.
7 28 EXPLANATION
7 29 This bill requires that certain purchases by state
7 30 agencies, regardless of their organization, be reviewed by the
7 31 executive council. The requirement applies to purchases over
7 32 $25,000 that were not made using a competitive bidding
7 33 procedure and every purchase in excess of $50,000. The bill
7 34 limits the period of master contracts, executed by the
7 35 department of administrative services, to one year, with one
8 1 annual extension allowable. If an additional extension is
8 2 desired, a notice of that proposed extension must be published
8 3 not less than 30 days prior to the extension. Following this
8 4 notice, the contract may be extended for two additional annual
8 5 extensions.
8 6 Code section 8A.311 generally requires that the department
8 7 of administrative services purchase equipment, supplies, and
8 8 services using a competitive bidding procedure. The bill
8 9 exempts services provided by certain licensed professionals
8 10 from this requirement.
8 11 The bill requires the department of administrative
8 12 services, the department for the blind, and the state
8 13 department of transportation to follow a specific process for
8 14 purchases in excess of $25,000, unless a competitive bidding
8 15 procedure was used for that purchase. Under this process, a
8 16 notice of the intended purchase must be posted on an internet
8 17 website not less than 30 days prior to making the purchase.
8 18 The agency must consider any proposal by a vendor who offers
8 19 to provide the good or service at a better price. If the
8 20 agency chooses to complete the sale using the initial vendor,
8 21 that sale must be reviewed by the state auditor as well as the
8 22 executive council. The bill also requires the state board of
8 23 regents to develop detailed procurement policies by rule.
8 24 The bill revises the Iowa preference law, Code chapter 73.
8 25 The certification of targeted small businesses is expanded to
8 26 include an Iowa business certified by the federal small
8 27 business administration. The bill prohibits any governmental
8 28 body in Iowa from deliberately drafting a request for
8 29 proposals in such a way as to exclude an Iowa=based business.
8 30 The bill adds a new Iowa preference for software and
8 31 information technology purchases by state agencies, requiring
8 32 them to in good faith consider making these purchases from
8 33 Iowa companies. All purchases of software and information
8 34 technology by state agencies over $50,000 must utilize a
8 35 request for proposals. That request for proposals must be
9 1 published on an electronic website.
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