GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	1 

SENATE BILL 418

Short Title:  Small Business Procurement Act.	(Public)

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Sponsors: Senators Shaw of Cumberland, Ballance; and Jordan.

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Referred to:  Commerce.

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March 18, 1997

A BILL TO BE ENTITLED
AN ACT TO REQUIRE THE SECRETARY OF ADMINISTRATION TO SET BUSINESS SIZE STANDARDS AND APPLY THEM TO THE PROCUREMENT PROCEDURES TO PROMOTE INCREASED PROCUREMENTS FROM SMALL AND MEDIUM-SIZED BUSINESSES.
Whereas, current procurement procedures provide for the consolidation of estimates for supplies, materials, equipment, and contractual services and provide an institutional bias towards awarding State contracts to large businesses; and
Whereas, in this era of large corporate merging, restructuring, and downsizing with the attendant employee reductions, it is the small and medium-sized businesses that are providing for the new employment opportunities and economic growth in North Carolina; and
Whereas, the development of small and medium-sized businesses should be encouraged in North Carolina; Now, therefore,
The General Assembly of North Carolina enacts:
Section 1.  G.S. 143-52 reads as rewritten:
"§ 143-52.  Competitive bidding procedure; consolidation of estimates by Secretary; bids; awarding of contracts.
As feasible, the Secretary of Administration will compile and consolidate all such estimates of supplies, materials, equipment and contractual services needed and required by State departments, institutions and agencies to determine the total requirements of any given commodity.  Where such total requirements will involve an expenditure in excess of the expenditure benchmark established under the provisions of G.S. 143-53.1 and where the competitive bidding procedure is employed as hereinafter provided, sealed bids shall be solicited by advertisement in a newspaper of statewide circulation at least once and at least 10 days prior to the date designated for opening of the bids and awarding of the contract:  Provided, other methods of advertisement may be adopted by the Secretary of Administration when such other method is deemed more advantageous for certain items or commodities.  Regardless of the amount of the expenditure, under the competitive bidding procedure it shall be the duty of the Secretary of Administration to solicit bids direct by mail from qualified sources of supply.  Except as otherwise provided under this Article, contracts for the purchase of supplies, materials or equipment shall be based on competitive bids and acceptance made of the lowest and best bid(s)	most advantageous to the State as determined upon consideration of the following criteria: prices offered; the quality of the articles offered; the general reputation and performance capabilities of the bidders; the substantial conformity with the specifications and other conditions set forth in the request for bids; the suitability of the articles for the intended use; the personal or related services needed; the transportation charges; the date or dates of delivery and performance; and such other factor(s) deemed pertinent or peculiar to the purchase in question, which if controlling shall be made a matter of record.  Competitive bids on such contracts shall be received in accordance with rules and regulations to be adopted by the Secretary of Administration, which rules and regulations shall prescribe for the manner, time and place for proper advertisement for such bids, the time and place when bids will be received, the articles for which such bids are to be submitted and the specifications prescribed for such articles, the number of the articles desired or the duration of the proposed contract, and the amount, if any, of bonds or certified checks to accompany the bids.  Bids shall be publicly opened.  Any and all bids received may be rejected.  Each and every bid conforming to the terms of the invitation, together with the name of the bidder, shall be tabulated or otherwise entered as a matter of record, and all such records with the name of the successful bidder indicated thereon shall, after the award of the contract, be open to public inspection.  Provided, that trade secrets, test data and similar proprietary information may remain confidential.  A bond for the faithful performance of any contract may be required of the successful bidder at bidder's expense and in the discretion of the Secretary of Administration.  After contracts have been awarded, the Secretary of Administration shall certify to the departments, institutions and agencies of the State government the sources of supply and the contract price of the supplies, materials and equipment so contracted for.  Prior to adopting other methods of advertisement under this section, the Secretary of Administration may consult with the Advisory Budget Commission.  Prior to adopting rules and regulations under this section, the Secretary of Administration may consult with the Advisory Budget Commission.
The Secretary shall establish business size standards for small and medium-sized businesses in this State and shall establish procedures for the division of estimates of supplies, materials, equipment, and contractual services or for allowable consolidation of bids from small and medium-sized firms to provide opportunities for these businesses to bid on State contracts while still promoting sound purchasing management."
Section 2.  G.S. 143-53(b) reads as rewritten:
"(b)	In adopting the rules authorized by subsection (a) of this section, the Secretary shall include special provisions for the purchase of goods and services, which provisions are necessary to meet the documented training, work, or independent living needs of persons with disabilities according to the requirements of the Rehabilitation Act of 1973, as amended, and the Americans with Disabilities Act, as amended. The Secretary may consult with other agencies having expertise in meeting the needs of individuals with disabilities in developing these provisions. These special provisions shall establish purchasing procedures that:
(1)	Provide for the involvement of the individual in the choice of particular goods, service providers, and in the methods used to provide the goods and services;
(2)	Provide the flexibility necessary to meet those varying needs of individuals that are related to their disabilities;
(3)	Allow for purchase outside of certified sources of supply and competitive bidding when a single source can provide multiple pieces of equipment, including adaptive equipment, that are more compatible with each other than they would be if they were purchased from multiple vendors;
(4)	Permit priority consideration for vendors who have the expertise to provide appropriate and necessary training for the users of the equipment and who will guarantee prompt service, ongoing support, and maintenance of this equipment;
(5)	Permit agencies to give priority consideration to suppliers offering the earliest possible delivery date of goods or services especially when a time factor is crucial to the individual's ability to secure a job, meet the probationary training periods of employment, continue to meet job requirements, or avoid residential placement in an institutional setting; 
(6)	Allow consideration of the convenience of the provider's location for the individual with the disability; and
(7)	Allow consideration for encouraging the use of small and medium-sized businesses through the division of requirements and the consolidation of bids from these firms.
In developing these purchasing provisions, the Secretary shall also consider the following criteria: (i)	cost-effectiveness, (ii) quality, (iii) the provider's general reputation and performance capabilities, (iv) substantial conformity with specifications and other conditions set forth for these purchases, (v) the suitability of the goods or services for the intended use, (vi) the personal or other related services needed, (vii) transportation charges, and (viii) any other factors the Secretary considers pertinent to the purchases in question."
Section 3.  G.S. 143-54 reads as rewritten:
"§ 143-54.  Certification that bids were submitted without collusion.
The Director of Administration shall require bidders to certify that each bid is submitted competitively and without collusion.  The combining of bids pursuant to rules issued under subdivision (7)	of G.S. 143-53 shall not be collusion.  False certification is a Class I felony."
Section 4.  The Department of Administration shall report to the General Assembly, prior to the 1998 Session of the General Assembly, on measures to encourage the use of small and medium-sized businesses to provide the supplies, materials, equipment, and contractual services required by the State.  The study shall consider and propose new procedures and policies to eliminate the disincentives to small and medium-sized businesses from bidding on State contracts, such as expediting the prompt payment for completed contracts and elimination of any discounts for prompt payment.
In preparing this report, the Department of Administration shall contact the General Counsel of the United States Office of Small Business Advocacy to determine what has been done in other states to encourage small and medium-sized business participation in government contracts.
Section 5.  This act is effective when it becomes law.