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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


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