Revision: March 10, 2010, midnight
SB 495-FN – AS INTRODUCED
2010 SESSION
05/10
SENATE BILL 495-FN
AN ACT relative to state competitive bidding practices.
SPONSORS: Sen. Cilley, Dist 6; Rep. Nord, Rock 1
COMMITTEE: Executive Departments and Administration
This bill requires the department of administrative services, division of plant and property management and division of public works design and construction to award contracts to the lowest responsible bidder.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
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STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT relative to state competitive bidding practices.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Administrative Services; Division of Plant and Property Management. RSA 21-I:11, III and III-a are repealed and reenacted to read as follows:
III. Requiring competitive bidding before making any purchase for the state pursuant to the laws of the state applicable to the director of plant and property management. Contracts shall be awarded to the lowest responsible bidder. In determining the lowest responsible bidder, in addition to price, the following shall be considered:
(a) The ability, capacity, and skill of the bidder to perform the contract or provide the service required;
(b) Whether the bidder can perform the contract or provide the service promptly, or within the time specified, without delay or interference;
(c) The character, integrity, reputation, judgment, experience and efficiency of the bidder;
(d) The quality of performance of previous contracts or services;
(e) The previous and existing compliance by the bidder with laws and ordinances relating to the contract or service;
(f) The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service;
(g) The quality, availability, and adaptability of the supplies or contractual services to the particular use required;
(h) The ability of the bidder to provide future maintenance and service for the use of the subject of the contract;
(i) The number and scope of conditions attached to the bid.
III-a. The competitive bidding requirements in paragraph III shall not apply:
(a) When the best interests of the state would be served thereby and the purchase involves a total expenditure of not more than $2,000 or is a purchase in an approved class;
(b) When after reasonable investigation, it appears that any required unit or item of supply, or brand of such unit or item, is procurable by the state from only one source;
(c) When, after reasonable investigation, it appears that any required service, unit or item of supply, or brand of such unit or item, has a fixed market price at all sources available to the state;
(d) When, in the opinion of the governor, an emergency exists of a nature which requires the immediate procurement of supplies, he may authorize the director of plant and property management to make a purchase without competitive bidding; and where the rates filed with and approved by the insurance commissioner are uniform, the purchase of state insurance and public state official and employee bonds are specifically excluded from competitive bidding as to price; provided, however, that nothing contained in this subparagraph shall preclude the director of plant and property management from inviting plans of insurance coverage from any resident licensed insurance agent.
2 Administrative Services; Public Works Design and Construction. Amend the introductory paragraph of RSA 21-I:80, I to read as follows:
I. Each state project whose estimated cost is more than $25,000 shall be built under contracts awarded to the lowest [qualified] responsible bidder who meets all project specifications through competitive bidding. The following are excluded from this competitive bidding requirement:
3 Administrative Services; Public Works Design and Construction. RSA 21-I:81 is repealed and reenacted to read as follows:
21-I:81 Competitive Bidding. Any project subject to the competitive bidding requirements of RSA 21-I:80 shall be awarded to the lowest responsible bidder.
I. In determining the “lowest responsible bidder”, in addition to price, the following shall be considered:
(a) The ability, capacity and skill of the bidder to perform the contract or provide the service required;
(b) Whether the bidder can perform the contract or provide the service promptly, or within the time specified, without delay or interference;
(c) The character, integrity, reputation, judgment, experience and efficiency of the bidder;
(d) The quality of performance of previous contracts or services;
(e) The previous and existing compliance by the bidder with laws and ordinances relating to the contract or service;
(f) The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service;
(g) The quality, availability, and adaptability of the supplies or contractual services to the particular use required;
(h) The ability of the bidder to provide future maintenance and service for the use of the subject of the contract;
(i) The number and scope of conditions attached to the bid:
II. The commissioner shall prepare a contract of acceptance of the lowest responsible bid within 60 days from the opening of bids. He or she shall execute the contract in the name of the state. After the contract is executed by the lowest responsible bidder, the form of it approved by the attorney general, and the availability of funds approved by the commissioner, the commissioner shall transmit the contract to the governor and council. Upon approval by the governor and council, it shall become a valid contract of the state.
III. The state reserves the right to reject any and all bids or to negotiate with the lowest responsible bidder who meets all project specifications.
IV. If the commissioner decides that for just cause shown the lowest cost bid submitted does not otherwise meet the criteria of paragraph I and should be rejected, he or she shall promptly transmit to the governor and council the recommendation for rejection including reasons. The governor and council shall review the recommendation and any other facts available to them, and make such determination as in their judgment shall be for the best interest of the state. They shall require a public hearing upon request of any bidder or on their own motion to fully establish such facts. Their determination shall be entered upon the records of the secretary of state.
V. If not more than one bid is received on any state project advertised for contract construction, the commissioner may negotiate a contract for such construction upon terms which he or she may deem most advantageous to the state, subject to the approval of the governor and council. For projects built with federal aid, if any provision of this section is inconsistent with the requirements of applicable federal law and regulations, the latter shall control.
4 Effective Date. This act shall take effect 60 days after its passage.
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SB 495-FN - FISCAL NOTE
AN ACT relative to state competitive bidding practices.
FISCAL IMPACT:
The Department of Administrative Services states this bill will increase state general fund expenditures by $920,668 in FY 2011, $913,222 in FY 2012, $960,274 in FY 2013, and $1,010,379 in FY 2014. There is no fiscal impact on state, county, and local revenue or county and local expenditures.
METHODOLOGY:
The Department of Administrative Services states this bill requires the Department’s division of Plant and Property Management to award contracts to the lowest responsible bidder. The Department states this bill has an impact on 3 of its bureaus: Purchase and Property, Public Works Design and Construction, and Graphic Services. The Department’s basic assumption is that this bill will increase the amount of time it takes to process requests for bids (RFB), requests for proposals (RFP), and requests for quotes (RFQ), hereafter referred to as ‘requests’. Currently, the Department estimates the eight employees of the Purchase and Property bureau, each assumed to work 230 days per year, process roughly 1,300 RFBs, RFPs, and RFQs each year, which translates to approximately 1.41 employee days to process each request ((8 employees × 230 working days) ÷ 1,300 documents). The Department estimates this bill’s requirements would add another day of processing time to each request, so the Purchase and Property bureau would need an additional six purchasing agents (labor grade 24) to comply with the proposed legislation ((1,300 documents × 1 additional day) ÷ 230 working days per year = 5.6 ≈ 6 additional employees).
The Department estimates its Graphic Services bureau, which has one full-time employee and processes an average of 169 requests annually, would also need an additional purchasing agent (labor grade 24) in order to meet the requirements of this bill.
The Department states it currently utilizes the Contract Administration section at the Department of Transportation to prequalify and award construction and renovation contracts. If the proposed bill were to become law, the Department states it would continue to use this DOT section to prequalify contractors, however it assumes the bill’s changes to contract award
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criteria would require creation of its own contracts unit within the Public Works Design and Construction bureau, as the Department of Transportation criteria would now be different from the Public Works Design and Construction criteria. The Department states the new unit would modify requests, evaluate responses to requests, and create the eventual final contracts. To establish the new unit, the Department estimates it would need to hire a business administrator III (labor grade 27) to oversee the unit, a purchasing agent (labor grade 24) to customize bids and create contract documents, and three project manager III positions (labor grade 27) to serve as part of a team reviewing and evaluating all responses received. In total for the three bureaus, the Department estimates it will need to hire 12 additional employees (8 purchasing agents at labor grade 24, 3 project managers at labor grade 27, 1 business administrator at labor grade 27). For each of these employees, the Department also estimates annually $1,200 for phone, postage, and supplies, $2,700 for leased office space, $3,100 for equipment, and $300 for in-state mileage reimbursement. The Department also assumed the business administrator and the eight purchasing agents would each need $1,300 for computer hardware and software in the first year and $250 for software renewals each year thereafter, and the three project managers would each need $2,400 for CADD hardware and software in the first year and $600 for software renewals each year thereafter. The Department estimates the total fiscal impact related to the 12 additional full-time employees as follows:
2011 2012 2013 2014
Salaries $ 537,810 $ 561,678 $ 586,326 $ 612,144
Benefits 276,358 297,094 319,498 343,785
Supplies, postage, etc. 14,400 14,400 14,400 14,400
Office space 32,400 32,400 32,400 32,400
Equipment 37,200 0 0 0
Computer hardware 10,800 0 0 0
Computer software 8,100 4,050 4,050 4,050
In-state travel 3,600 3,600 3,600 3,600
Total $ 920,668 $ 913,222 $ 960,274 $ 1,010,379