Bill 765

                    Current Status

Bill Number:               765
Ratification Number:       596
Act Number:                510
Introducing Body:          Senate
Subject:                   Amendments to the Consolidated
                           Procurement Code

(A510, R596, S765)

AN ACT TO AMEND SECTION 11-35-310, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR PURPOSES OF THE CONSOLIDATED PROCUREMENT CODE, SO AS TO REVISE CERTAIN DEFINITIONS; TO AMEND SECTIONS 11-35-1210 AND 11-35-1230, RELATING TO AUDITING AND FISCAL REPORTING, SO AS TO TRANSFER CERTAIN FUNCTIONS TO THE DIVISION OF GENERAL SERVICES; TO AMEND SECTION 11-35-1520, RELATING TO COMPETITIVE SEALED BIDDING, SO AS TO FURTHER PROVIDE FOR THE AWARDING OF BIDS WHEN TIED BIDS ARE INVOLVED AND TO PROVIDE THAT WHEN CERTAIN CONTRACTS ARE INVOLVED, ALL BIDDERS RESPONDING TO A SOLICITATION MUST RECEIVE NOTICE OF THE AWARDING OF THE BID; TO AMEND SECTION 11-35-1530, RELATING TO COMPETITIVE SEALED PROPOSALS, SO AS TO FURTHER PROVIDE FOR THE NEGOTIATION WITH RESPONSIBLE OFFERORS AND REVISIONS TO PROPOSALS AND THE AWARD OF THESE PROPOSALS; TO AMEND SECTION 11-35-1560, RELATING TO SOLE SOURCE PROCUREMENT UNDER THE CONSOLIDATED PROCUREMENT CODE, SO AS TO REVISE THE CONDITIONS UNDER WHICH SOLE SOURCE PROCUREMENT IS PERMITTED AND TO PROVIDE CERTAIN PENALTIES FOR VIOLATIONS OF THE SOLE SOURCE PROCUREMENT REQUIREMENTS; TO AMEND SECTION 11-35-1830, RELATING TO COST OR PRICING DATA, SO AS TO FURTHER PROVIDE FOR A CONTRACTOR'S CERTIFICATION OF COST OR PRICING DATA; TO AMEND SECTION 11-35-2750, RELATING TO SPECIFICATIONS PREPARED BY ARCHITECTS AND ENGINEERS, SO AS TO FURTHER PROVIDE FOR THESE SPECIFICATIONS; AND TO REPEAL SECTION 11-35-3610, RELATING TO THE DEVELOPMENT OF A STATE WAREHOUSE, DELIVERY, AND INVENTORY PLAN.

Be it enacted by the General Assembly of the State of South Carolina:

Regulations

SECTION 1. Section 11-35-1560 of the 1976 Code, added by Act 148 of 1981, is amended to read:

"Section 11-35-1560. A contract may be awarded for a supply, service, or construction item without competition when, under regulations promulgated by the board, the chief procurement officer, the head of a purchasing agency, or a designee of either officer above the level of the procurement officer, determines in writing that there is only one source for the required supply, service, or construction item.

These regulations must include the requirements contained in this paragraph. Written documentation must include the determination and basis for the proposed sole source procurement. Any delegation of authority by either the chief procurement officer or the head of a governmental body with respect to sole source determinations must be submitted in writing to the materials managment officer. In cases of reasonable doubt, competition must be solicited. Any decision by a governmental body that a procurement be restricted to one potential vendor must be accompanied by an explanation as to why no other will be suitable or acceptable to meet the need.

Any violation of these regulations by a purchasing agency shall, upon recommendation of the Division of General Services with approval of the majority of the Budget and Control Board, result in the temporary suspension not to exceed one year of the violating agency's ability to procure supplies, services, or construction items under this section."

Tied bidders

SECTION 2. Items (9) and (10) of Section 11-35-1520 of the 1976 Code are amended to read:

"(9) If two or more bidders are tied in price while otherwise meeting all of the required conditions, awards are determined as follows:

(a) If there is a South Carolina firm tied with an out-of-state firm, the award must be made automatically to the South Carolina firm.

(b) Tie bids involving South Carolina produced or manufactured products, when known, and items produced or manufactured out of the State must be resolved in favor of the South Carolina commodity.

(c) Tied bids involving South Carolina firms must be resolved in favor of the South Carolina firm located in the same taxing jurisdiction as the governmental body's consuming location.

(d) Tie bids involving South Carolina firms in the same taxing jurisdiction as the governmental body's consuming location must be resolved by the flip of a coin in the office of the chief procurement officer or the head of a purchasing agency witnessed by all interested parties.

These are the only conditions under which any in-state preference is shown.

(e) Competitive procurements made by any governmental body must be made from a responsive and responsible vendor resident in South Carolina: (i) for procurements under two million, five hundred thousand dollars, if the bid does not exceed the lowest qualified bid from a nonresident vendor by more than two percent of the latter bid, and if the resident vendor has made written claim for the preference at the time the bid was submitted; (ii) for procurements in excess of two million, five hundred thousand dollars, if the bid does not exceed the lowest qualified bid from a nonresident vendor by more than one percent of the latter bid, and if the resident vendor has made written claim for the preference at the time the bid was submitted. A vendor is considered to be a resident of this State if the vendor is an individual, partnership, association, or corporation that is authorized to transact business within the State, maintains an office in the State, maintains a representative inventory of commodities on which the bid is submitted, and has paid all assessed taxes. Preferences under this subsection do not apply to either prime contractors or subcontractors as relates to the construction industry nor to a vendor of goods whether in quantity or not when the price of a single unit of the item involved is more than ten thousand dollars.

(10) The contract must be awarded with reasonable promptness by written notice. When a contract has a total or potential value in excess of fifty thousand dollars, notice must be given to all bidders responding to the solicitation as to the agency's determination that a certain bidder is the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation for bids unless there is a compelling reason to reject one or more bids as prescribed by regulation of the board. Notice may be given by first-class mail of this intent to contract to the name and address on the bid documents. Sixteen days after notice of intent to award a contract to the lowest responsive bidder, the agency may enter a contract with this bidder in accordance with the bid solicited. A determination of responsibility must be made before award in accordance with Section 11-35-1810."

Definition

SECTION 3. Item (4) of Section 11-35-310 of the 1976 Code is amended to read:

"(4) 'Change order' means any written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity, or other provisions of any contract accomplished by mutual agreement of the parties to the contract."

Definition

SECTION 4. Item (9) of Section 11-35-310 of the 1976 Code is amended to read:

"(9) 'Contract modification' means a written order signed by the procurement officer, directing the contractor to make changes which the changes clause of the contract authorizes the procurement officer to order without the consent of the contractor."

Definition

SECTION 5. Item (13) of Section 11-35-310 of the 1976 Code is amended to read:

"(13) 'Days' means calendar days. In computing any period of time prescribed by this code or the ensuing regulations, or by any order of the Procurement Review Panel, the day of the event from which the designated period of time begins to run is not included. If the final day of the designated period falls on a Saturday, Sunday, or a legal holiday for the state or federal government, then the period shall run to the end of the next business day."

Definition

SECTION 6. Items 25 through 33 of Section 11-35-310 of the 1976 Code are amended to read:

"(25) 'Real property' means any land, all things growing on or attached thereto, and all improvements made thereto including buildings and structures located thereon.

(26) 'Request for Proposals (RFP)' means a written or published solicitation issued by an authorized procurement officer for proposals to provide supplies or services, which ordinarily result in the award of the contract to the responsible bidder making the proposal determined to be most advantageous to the State. The award of the contract must be made on the basis of evaluation factors which must be stated in the RFP, and which must include but not be controlled alone by the factor of price proposed to be charged.

(27) 'Services' means the furnishing of labor, time, or effort by a contractor not required to deliver a specific end product, other than reports which are merely incidental to required performance. This term includes consultant services other than architectural, engineering, construction management, and related services. This term does not include employment agreements or services as defined in Section 11-35-310(1)(c).

(28) 'Subcontractor' means any person having a contract to perform work or render service to a prime contractor as a part of the prime contractor's agreement with a governmental body.

(29) 'Supplies' means all personal property, including but not limited to equipment, materials, printing, insurance, and leases of real property, excluding real property or an interest in real property other than leasehold interests.

(30) 'State' means state government.

(31) 'State Engineer' means the person holding the position as the head of the State Engineer's Office.

(32) 'Suspension' means the disqualification of a person to receive invitations for bids, requests for proposals, or the award of a contract by the State, for a temporary period pending the completion of an investigation and any legal proceedings that may ensue because a person is suspected upon probable cause of engaging in criminal, fraudulent, or seriously improper conduct or failure or inadequacy of performance which may lead to debarment.

(33) 'Term contract' means a contract established by the chief procurement officer for a specific product or service for a specified time and for which it is mandatory that all governmental bodies procure their requirements for the goods and services during its term. A term contract may be a multi-term contract as provided in Section 11-35-2030.

(34) 'Using agency' means any governmental body of the State which utilizes any supplies, services, or construction purchased under this code."

Differential dollar limits

SECTION 7. Subsection (1) of Section 11-35-1210 of the 1976 Code is amended to read:

"(1) Authority. The board may assign differential dollar limits below which individual governmental bodies may make direct procurements not under term contracts. The Division of General Services shall review the respective governmental body's internal procurement operation, shall certify in writing that it is consistent with the provisions of this code and the ensuing regulations, and recommend to the board those dollar limits for the respective governmental body's procurement not under term contract."

Auditing of state procurements

SECTION 8. Subsection 1 of Section 11-35-1230 of the 1976 Code is amended to read:

"(1) Auditing. The Division of General Services through consultation with the chief procurement officers shall develop written plans for the auditing of state procurements.

In procurement audits of governmental bodies thereafter, the auditors from the Division of General Services shall review the adequacy of the system's internal controls in order to ensure compliance with the requirements of this code and the ensuing regulations. Any noncompliance discovered through audit must be transmitted in management letters to the audited governmental body, the Budget and Control Board. The auditors shall provide in writing proposed corrective action to governmental bodies. Based upon audit recommendations of the Division of General Services the board may revoke certification as provided for in Section 11-35-1210 and require the governmental body to make all procurements through the office of materials management above a dollar limit set by the board until such time as the board is assured of compliance with this code and its regulations by that governmental body."

Contractor certification

SECTION 9. Subsection (1) of Section 11-35-1830 of the 1976 Code is amended to read:

"(1) Contractor Certification. A contractor shall, except as provided in subsection (3) of this section, submit cost or pricing data and shall certify that, to the best of his knowledge and belief, the cost or pricing data submitted is accurate, complete, and current as of mutually determined specified date prior to the date of:

(a) the pricing of any contract awarded by competitive sealed proposals pursuant to Section 11-35-1530 or pursuant to the sole source procurement authority as provided in Section 11-35-1560 where the total contract price exceeds an amount established by the board regulations; or

(b) the pricing of any change order or contract modification which exceeds an amount established by the board in regulations."

Nonrestrictiveness of specifications

SECTION 10. Section 11-35-2750 of the 1976 Code is amended to read:

"Section 11-35-2750. The requirements of this article regarding the nonrestrictiveness of specifications apply to each solicitation and include, among others, all specifications prepared by architects, engineers, designers, draftsmen, and land surveyors for state contracts."

Repeal

SECTION 11. Section 11-35-3610 of the 1976 Code is repealed.

Negotiation with Responsible Offerors

SECTION 12. Subparts (6), (7), and (8) of Section 11-35-1530 of the 1976 Code are amended to read:

"(6) Negotiation with Responsible Offerors and Revisions to Proposals. As provided in the request for proposals, negotiations may be conducted with any offerors submitting a proposal, which appears to be eligible for contract award pursuant to the selection criteria set forth in the request for proposals. All apparently eligible offerors must be accorded the opportunity to submit best and final proposals if negotiations with any other offeror result in a material alteration to the RFP and such alteration has a cost consequence that may alter the order of offeror's price quotations contained in the initial proposals. In conducting negotiations, there must be no disclosure of any information derived from proposals submitted by competing offerors.

(7) Award. Award must be made to the responsive offeror whose proposal is determined in writing to be the most advantageous to the State, taking into consideration price and the evaluation factors set forth in the request for proposals. No other factors or criteria may be used in evaluation and there must be adherence to any weightings specified for each factor in the request for proposals. The contract file shall contain the basis on which the award is made and must be sufficient to satisfy external audit. Procedures for the notification of intent to award the contract and the award of the contract must be the same as those required in Section 11-35-1520(11).

(8) Other. When the proposal considered most advantageous to the State exceeds available funds as certified by the appropriate fiscal officer, and it is determined in writing by the chief procurement officer, the head of a purchasing agency, or the designee of either officer above the level of procurement officer, that time or circumstances do not permit the delay required to resolicit competitive sealed proposals, a contract may be awarded pursuant to this section.

The offeror whose proposal is determined most advantageous to the State, taking into consideration price and the evaluation factors set forth in the RFP, must be requested to accept the contract for the available funds without any change in the scope of work. If the offeror agrees, the contract must be awarded. If the offeror declines, the next offeror whose proposal is determined to be the second most advantageous to the State must be requested to accept the contract under the terms noted above. This procedure must be followed with each successive offeror until all offerors whose proposals are considered responsive to the requirement of the contract have been exhausted. If the contract has not been awarded after a request has been made to each acceptable offeror, the scope of the request for proposals may be changed to reduce the cost and all offerors must be allowed to submit their best and final offer."

Time effective

SECTION 13. This act shall take effect upon approval by the Governor.