S.B. 137

1

PROCUREMENT CODE REQUIREMENTS OF
2 HEALTH CARE BENEFITS
3 2001 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Ed P. Mayne
6 This act modifies the Utah Procurement Code by requiring certain businesses to provide
7 qualified health insurance coverage to employees as a condition for contracting with the state
8 under certain circumstances.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 AMENDS:
11 63-56-40, as enacted by Chapter 75, Laws of Utah 1980
12 63-56-48, as enacted by Chapter 75, Laws of Utah 1980
13 ENACTS:
14 63-56-20.2, Utah Code Annotated 1953
15 Be it enacted by the Legislature of the state of Utah:
16 Section 1. Section 63-56-20.2 is enacted to read:
17 63-56-20.2. Health insurance requirement.
18 (1) As used in this section:
19 (a) "Business" means a corporation, partnership, sole proprietorship, or individual whose
20 volume of business with the state exceeds $500,000.
21 (b) (i) "Contract" means a contract with a public procurement unit that is awarded by
22 sealed bid as required by Section 63-56-20 .
23 (ii) "Contract" does not mean an agreement between a business and an academic or clinical
24 researcher, institution, or subunit of an institution.
25 (c) "Employee" means an "employee," "worker," or "operative" as defined in Section
26 34A-2-14 who works at least 20 hours per calendar week.
27 (d) "Qualified health insurance coverage" means health insurance in which the employer

28 pays at least 75% of the premium for the employee and at least 50% of the premium for any
29 dependents of the employee.
30 (e) "Volume of Business" means the sum of the value of all contracts that the person or
31 entity entering the contract has with the state.
32 (2) To be eligible to contract with a public procurement unit under Section 63-56-20 , a
33 business shall provide qualified health insurance coverage to each employee.
34 (3) Within ten days of a contract being awarded under Section 63-56-20 , a business shall
35 submit documentation of current qualified health insurance coverage for its employees to the
36 public procurement unit that awarded the contract.
37 (4) The public procurement unit shall terminate a contract it has awarded and may seek
38 debarment of the contractor under Section 63-56-48 if the contracting business:
39 (a) fails to submit documentation of current qualified health insurance coverage as required
40 by Subsection (3); or
41 (b) submits documentation of current qualified health insurance coverage when none
42 exists.
43 (5) (a) If a business enters into a contract with the public procurement unit that is in effect
44 or is expected to be in effect for 60 or more days, the business shall inform the public procurement
45 unit if the business fails to provide qualified health insurance coverage to its employees for 30 or
46 more days during the term of the contract.
47 (b) (i) A public procurement unit that receives notice that a contractor is not providing
48 qualified health insurance shall terminate the contract unless:
49 (A) termination would materially harm the interests of the public procurement unit; and
50 (B) a comparable business to contract with is not readily available.
51 (ii) Before declining to terminate a contract under this Subsection (5)(b), the public
52 procurement unit shall issue a written finding detailing specifically its basis for declining to
53 terminate the contract.
54 (c) A public procurement unit that receives notice that a contractor is not providing
55 qualified health insurance may seek debarment of the contractor under Section 63-56-48 .
56 (d) A business may not terminate a contract it has with the public procurement unit
57 because the business does not provide qualified health insurance coverage to its employees.
58 Section 2. Section 63-56-40 is amended to read:

59 63-56-40. Required contract clauses -- Computation of price adjustments -- Use of
60 rules and regulations.
61 (1) Rules and regulations shall require for state construction contracts and may permit or
62 require for state contracts for supplies and services the inclusion of clauses providing for
63 adjustments in prices, time of performance, or other appropriate contract provisions, and covering
64 the following subjects:
65 (a) the unilateral right of the state to order in writing changes in the work within the scope
66 of the contract and changes in the time of performance of the contract that do not alter the scope
67 of the contract work;
68 (b) variations occurring between estimated quantities of work in a contract and actual
69 quantities;
70 (c) suspension of work ordered by the state; and
71 (d) site conditions differing from those indicated in the construction contract, or ordinarily
72 encountered, except that differing site conditions clauses required by the rules and regulations need
73 not be included in a construction contract when the contract is negotiated, when the contractor
74 provides the site or design, or when the parties have otherwise agreed with respect to the risk of
75 differing site conditions.
76 (2) Adjustments in price pursuant to clauses promulgated under Subsection (1) shall be
77 computed in one or more of the following ways:
78 (a) by agreement on a fixed price adjustment before commencement of the pertinent
79 performance or as soon thereafter as practicable;
80 (b) by unit prices specified in the contract or subsequently agreed upon;
81 (c) by the costs attributable to the events or situations under the clauses with adjustment
82 of profit or fee, all as specified in the contract or subsequently agreed upon;
83 (d) in any other manner as the contracting parties may mutually agree; or
84 (e) in the absence of agreement by the parties, by a unilateral determination by the state
85 of the costs attributable to the events or situations under the clauses with adjustment of profit or
86 fee, all as computed by the state in accordance with applicable sections of the rules and regulations
87 issued under Subsection 63-56-28 (1) and subject to the provisions of Part H of this chapter.
88 (3) A contractor shall be required to submit cost or pricing data if any adjustment in
89 contract price is subject to the provisions of Section 63-56-28 .

90 (4) Rules and regulations shall require for state construction contracts and may permit or
91 require for state contracts for supplies and services the inclusion of clauses providing for
92 appropriate remedies and covering at least the following subjects:
93 (a) liquidated damages as appropriate;
94 (b) specified excuses for delay or nonperformance;
95 (c) termination of the contract for default; and
96 (d) termination of the contract in whole or in part for the convenience of the state.
97 (5) A contract awarded under Section 63-56-20 shall include the qualified health insurance
98 requirement of Section 63-56-20.2 .
99 [(5)] (6) The contract clauses promulgated under this section shall be set forth in rules and
100 regulations. However, the chief procurement officer or the head of a purchasing agency may
101 modify the clauses for inclusion in any particular contract. Any variations shall be supported by
102 a written determination that describes the circumstances justifying the variations, and notice of any
103 material variation shall be included in the invitation for bids or request for proposals.
104 Section 3. Section 63-56-48 is amended to read:
105 63-56-48. Debarment from consideration for award of contracts -- Causes for
106 debarment.
107 (1) After reasonable notice to the person involved and reasonable opportunity for that
108 person to be heard, the chief procurement officer or the head of a purchasing agency, after
109 consultation with the using agency and the attorney general, shall have authority to debar a person
110 for cause from consideration for award of contracts. The debarment shall not be for a period
111 exceeding three years. The same officer, after consultation with the using agency and the attorney
112 general, shall have authority to suspend a person from consideration for award of contracts if there
113 is probable cause to believe that the person has engaged in any activity which might lead to
114 debarment. The suspension shall not be for a period exceeding three months unless an indictment
115 has been issued for an offense which would be a cause for debarment under Subsection (2) of this
116 section, in which case the suspension shall, at the request of the attorney general, remain in effect
117 until after the trial of the suspended person.
118 (2) The causes for debarment include the following:
119 (a) conviction of a criminal offense as an incident to obtaining or attempting to obtain a
120 public or private contract or subcontract or in the performance of such contract or subcontract;

121 (b) conviction under state or federal statutes of embezzlement, theft, forgery, bribery,
122 falsification or destruction of records, receiving stolen property, or any other offense indicating a
123 lack of business integrity or business honesty which currently, seriously, and directly affects
124 responsibility as a state contractor;
125 (c) conviction under state or federal antitrust statutes;
126 (d) failure without good cause to perform in accordance with the terms of the contract; [or]
127 (e) violation of the qualified health insurance requirement of Section 63-56-20.2 ; or
128 [(e)] (f) any other cause that the chief procurement officer, or the head of a purchasing
129 agency determines to be so serious and compelling as to affect responsibility as a state contractor,
130 including debarment by another governmental entity for any cause listed in rules and regulations.




Legislative Review Note
as of 1-12-01 10:39 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel