HB 559-FN – AS INTRODUCED
2005 SESSION
05/10
HOUSE BILL 559-FN
AN ACT establishing a preference for New Hampshire vendors in state procurement contracts.
SPONSORS: Rep. Hinkle, Hills 19; Rep. Cloutier, Sull 4
COMMITTEE: Public Works and Highways
This bill establishes a state procurement preference for purchases of materials, equipment, supplies, and services by the director of the division of plant and property management.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05-0579
05/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT establishing a preference for New Hampshire vendors in state procurement contracts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Department of Administrative Services; Certain State Contracts; State Procurement Preference. Amend RSA 21-I by inserting after section 21 the following new section:
21-I:21-a State Procurement Preference.
I. When evaluating proposals for contracts for the purchase of materials, equipment, supplies, and services under RSA 21-I:11, the director of the division of plant and property management shall give a preference to vendors, suppliers, and contractors who have a significant presence in the state if the total value of the contract is $100,000 or more or the value of the supplies and products to be purchased is $10,000 or more. A single purchase may not be divided into multiple lots, bids, or deliveries expressly for the purpose of reducing the cost to less than $10,000, thereby exempting the purchase from this section. In determining whether a vendor, supplier, or contractor has a significant presence in the state, the director of the division of plant and property management shall consider whether the vendor, supplier, or contractor has a physical address and place of business in the state, pays the business profits tax or business enterprise tax, and meets such additional criteria as the commissioner may establish.
II. In the case of services provided in connection with a project of $100,000 or more, the vendor shall provide written certification that the work shall be performed by citizens of the United States who reside in the United States, or any person authorized to work in the United States pursuant to federal law, including legal resident aliens in the United States; provided, that they do not constitute more than 20 percent of the work force employed in providing such services to the state.
III. The director shall apply a 5 percent preference to the bid price of vendors, suppliers, and contractors who meet the criteria established in paragraph I and, if applicable, paragraph II. For proposals or bids of more than $35,000, if the provider certifies that the products, supplies, or equipment are assembled, processed, produced, mined, grown, or manufactured in New Hampshire, a 10 percent preference shall be applied.
IV. The director also shall apply a reciprocal preference policy in considering the bid price of out-of-state vendors, suppliers, and contracts. The director shall add the same percentage to such bids as would be given to an out-of-state vendor, supplier, or contractor that would be applied to an out-of-state bid in its home state.
V. If there is a tie, when price, quality, availability, and other factors are equivalent, the contract shall be awarded to the in-state bidder.
2 New Paragraph; Department of Administrative Services; Rulemaking Authority; State Procurement Preference. Amend RSA 21-I:14 by inserting after paragraph XV the following new paragraph:
XVI. Standards and procedures governing the state procurement preference established in RSA 21-I:21-a.
3 Effective Date. This act shall take effect July 1, 2005.
LBAO
05-0579
1/12/05
HB 559-FN - FISCAL NOTE
AN ACT establishing a preference for New Hampshire vendors in state procurement contracts.
FISCAL IMPACT:
The Department of Administrative Services states this bill will increase state expenditures by $3,912,500 in FY 2006 and each year thereafter. There will be no fiscal impact on state, county, and local revenue or county and local expenditures.
METHODOLOGY:
The Department estimates the state spent $293 million for goods and services in FY 2004 through the Division of Plant and Property Management. $203 million of that total was for purchases over $10,000, of which $110 million (or 54%) was expended to out-of-state companies, and $93 million (or 46%) was expended to vendors that are listed as NH companies. The Department assumes that the out-of-state purchases over $10,000 ($110M) would be assessed a five percent preference, causing the cost of those goods to increase by approximately 2.5% (median increase), or $2,750,000 annually. The Department is unable to determine the amount of purchases over $35,000 in FY 2004 that were assembled, produced, grown, or manufactured in NH. The Department assumes that 25% of the in-state transactions, or $23.25M ($93M x 25%) will be subject to a ten percent preference, and estimates an increase of approximately 5% (median increase), or $1,162,500. The Department states no assumptions were taken regarding the reciprocal preference policy due to the inability to compare this on a per time basis for each state that may have some sort of preference, and also made no assumption regarding the potential loss of business that NH companies may sustain if other neighboring states institute reciprocal preference as a result of this bill. The Department states that although many cities and towns currently take advantage of state procurement contracts, it is assumed they would seek alternative purchasing agreements rather than pay any extra costs.