May 4, 2006, Introduced by Reps. Moore, David Law, Baxter, Rocca, Mortimer, Casperson and Farhat and referred to the Committee on Commerce.
A bill to amend 1984 PA 431, entitled
"The management and budget act,"
by amending sections 261 and 268 (MCL 18.1261 and 18.1268), section
261 as amended by 2005 PA 91 and section 268 as added by 1988 PA
237, and by adding section 268a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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. 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, if consistent with federal
statutes. 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 it shall use 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 bidding for all
purchases authorized pursuant to subsection (1) unless the
department
has determined that another procurement method is in
the
state's best interests an
emergency exists. If an emergency
exists, the department may use another procurement method that is
in this state's best interests.
(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 3% of its total expenditures for construction, goods, and
services to qualified disabled veterans. The department may count
toward its 3% 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 3% 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) For the purchase of goods or services, the department
shall issue a request for qualifications prior to soliciting bids
that complies with all of the following:
(a) The request for qualifications shall be published on the
department's website.
(b) The request for qualifications shall contain, at a
minimum, a description of the goods or services to be purchased
including the standard specifications and standards of performance
applicable to the purchase, the general scope of the work, the
deadline for submission of information, and how prospective bidders
may apply for consideration. The request for qualifications shall
be broadly written to maximize the number of competitive bids.
(c) The request for qualifications shall require a prospective
bidder to provide, at a minimum, all of the following information:
(i) Whether the prospective bidder is a "class 1 bidder",
"class 2 bidder", or "class 3 bidder", as those terms are defined
in section 268.
(ii) For goods, the prospective bidder's product
specifications.
(iii) For services, the prospective bidder's qualifications.
(iv) For goods and services, the prospective bidder's
experience.
(v) The prospective bidder's ability to perform the
requirements of the contract.
(d) After receipt of the responses to the request for
qualifications from prospective bidders, the department shall rank
prospective bidders in the order of most qualified to least
qualified on the basis of the information submitted by prospective
bidders. In ranking prospective bidders, preference shall be given
to a class 1 bidder over a class 2 bidder, and a class 2 bidder
over a class 3 bidder.
(e) The department shall issue an invitation to bid to at
least the 2 top-ranking prospective bidders.
(13) (12)
As used in this section:
(a) "Emergency" means an act of God, natural disaster, act of
terrorism, or act of war that has affected or is reasonably likely
to affect this state.
(b) (a)
"Qualified disabled veteran" means a
business entity
that is 51% or more owned by 1 or more veterans with a service-
connected disability.
(c) (b)
"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).
(d) (c)
"Veteran" means a person who served in the
active
military, naval, or air service and who was discharged or released
from his or her service under conditions other than dishonorable.
Sec.
268. (1) A bidder for a state contract is a Michigan
business
for the purposes of this section if it certifies that it
has
done any of the following during the 12 months immediately
preceding
the bid deadline or for the period the business has been
in
existence, if the business is newly established within the 12
months
immediately preceding the bid deadline:
(a)
Filed a Michigan single business tax return showing a
portion
or all of the income tax base allocated or apportioned to
the
state of Michigan pursuant to the Michigan single business tax
act,
Act No. 228 of the Public Acts of 1975, being sections 208.1
to
208.145 of the Michigan Compiled Laws.
(b)
Filed a Michigan income tax return showing income
generated
in or attributed to the state of Michigan.
(c)
Withheld Michigan income tax from compensation paid to the
bidder's
owners and remitted the tax to the department of treasury.
(2)
The filing or withholding shall be more than a nominal
filing
for the purpose of gaining the status of a Michigan
business,
but shall indicate a significant business presence in the
state,
considering the size of the business and the nature of its
activities.
(3)
A bidder certifying that it meets the criteria for a
Michigan
business listed in subsections (1) and (2) shall authorize
the
department of treasury to verify that the bidder has or has not
met
1 of the 3 criteria in subsection (1). This authorization shall
permit
the department of treasury to disclose the verifying
information
to the procuring agency in accordance with the
procedures
established by section 28 of Act No. 122 of the Public
Acts
of 1941, being section 205.28 of the Michigan Compiled Laws.
(1) (4)
Only a bidder that has certified that it is a
Michigan business is entitled to have the department apply a
reciprocal preference in its favor against a business that submits
a bid from a state which applies a preference law against out-of-
state bidders. A bidder that does not certify that it is a Michigan
business shall indicate in its bid the state in which it maintains
its principal place of business for the purpose of applying that
state's preference law against the bidder.
(2) (5)
If the low bid for a state procurement exceeds
$100,000.00
$25,000.00 and is from a business located in a state
which applies a preference law against out-of-state businesses, the
department shall prefer a bid from a Michigan business in the same
manner in which the out-of-state bidder would be preferred in its
home state.
(3) (6)
The department shall compile a list of states that
give preference to in-state bidders and the extent of the
preference and shall update the list at least annually. An agency
may rely on this compilation in implementing the provisions of this
act without incurring liability to any bidder.
(4) (7)
A bidder waives any entitlement to claim a
preference under this act if the bidder has not certified in its
bid that the bidder is a Michigan business and has not authorized
the department of treasury to release information necessary to
verify the entitlement.
(5) (8)
A bidder shall not fraudulently certify that it is a
Michigan business under this act or falsely indicate the state in
which it has its principal place of business for the purpose of
avoiding application of the reciprocal preference.
(6) (9)
A business, or
the principals of a business, that
purposefully or willfully submits a false certification that it is
a Michigan business or a false certification that it qualifies as a
class 1 or class 2 bidder or that falsely indicates the state in
which
it has its principal place of business is guilty of a felony
,
punishable by a fine of not less than $25,000.00.
(7) (10)
Two years after the effective date of this section,
the
department shall review the costs and consequences of
implementing
this section. The department shall solicit input from
the
business community and from state agencies receiving
initiating procurements affected by the provisions of this section,
and shall make recommendations to the legislature regarding
continuation or modification of this section.
(8) (11)
This section shall not apply to any procurement if
the provisions of this section would conflict with federal statute.
(9) Within 6 months of the effective date of the amendatory
act that added this subsection, the department shall promulgate
administrative rules under the administrative procedures act of
1969, 1969 PA 306, MCL 24.201 to 24.328, governing the procedures
for applying for and certifying a bidder's class.
(10) As used in this act:
(a) "Class 1 bidder" means either of the following:
(i) A person whose principal place of business or that of its
parent company is located in this state.
(ii) A person that, at the time it completes the request for
qualifications, employs at least 50% of its employees in this
state. A person may qualify as a class 1 bidder if, in combination
with its subcontractor or subcontractors, it employs at least 50%
of its employees in this state at the time it completes the request
for qualifications.
(b) "Class 2 bidder" means a person that, at the time it
completes the request for qualifications, employs at least 10% of
its employees in this state. A person may qualify as a class 2
bidder if, in combination with its subcontractor or subcontractors,
it employs at least 10% of its employees in this state at the time
it completes the request for qualifications.
(c) "Class 3 bidder" means a person that does not qualify as a
class 1 bidder or class 2 bidder.
Sec. 268a. The department shall report to the senate and house
of representatives committees on appropriations and the fiscal
agencies before January 30 of each year the following information
for contracts approved by the state administrative board by
department during the immediately preceding fiscal year:
(a) The total number of contracts awarded and the number of
contracts awarded to class 1 bidders, class 2 bidders, and class 3
bidders.
(b) The total value of contracts awarded and the total value
of contracts awarded to class 1 bidders, class 2 bidders, and class
3 bidders.
(c) For awards in which competing bids were submitted by at
least 1 class 1 bidder or class 2 bidder and at least 1 class 3
bidder, the total number of contracts awarded to class 1 bidders
and class 2 bidders compared to the total number of contracts
awarded to class 3 bidders, and the value of contracts awarded to
class 1 bidders and class 2 bidders compared to the total value of
contracts awarded to class 3 bidders.