S.B. 101

1

PROCUREMENT CODE REQUIREMENTS OF
2 HEALTH CARE BENEFITS
3 2003 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
8 state 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
20 whose 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
24 clinical researcher, institution, or subunit of an institution.
25 (c) "Employee" means an "employee," "worker," or "operative" as defined in Section
26 34A-2-104 who works at least 20 hours per calendar week.
27 (d) "Qualified health insurance coverage" means health insurance in which the

28 employer pays at least 75% of the premium for the employee and at least 50% of the premium
29 for any 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
35 shall submit documentation of current qualified health insurance coverage for its employees to
36 the 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
40 required 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
44 effect or is expected to be in effect for 60 or more days, the business shall inform the public
45 procurement unit if the business fails to provide qualified health insurance coverage to its
46 employees for 30 or 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;
50 and
51 (B) a comparable business to contract with is not readily available.
52 (ii) Before declining to terminate a contract under this Subsection (5)(b), the public
53 procurement unit shall issue a written finding detailing specifically its basis for declining to
54 terminate the contract.
55 (c) A public procurement unit that receives notice that a contractor is not providing
56 qualified health insurance may seek debarment of the contractor under Section 63-56-48 .
57 (d) A business may not terminate a contract it has with the public procurement unit
58 because the business does not provide qualified health insurance coverage to its employees.

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

90 (3) A contractor shall be required to submit cost or pricing data if any adjustment in
91 contract price is subject to the provisions of Section 63-56-28 .
92 (4) Rules and regulations shall require for state construction contracts and may permit
93 or require for state contracts for supplies and services the inclusion of clauses providing for
94 appropriate remedies and covering at least the following subjects:
95 (a) liquidated damages as appropriate;
96 (b) specified excuses for delay or nonperformance;
97 (c) termination of the contract for default; and
98 (d) termination of the contract in whole or in part for the convenience of the state.
99 (5) A contract awarded under Section 63-56-20 shall include the qualified health
100 insurance requirement of Section 63-56-20.2 .
101 [(5)] (6) The contract clauses promulgated under this section shall be set forth in rules
102 and regulations. However, the chief procurement officer or the head of a purchasing agency
103 may modify the clauses for inclusion in any particular contract. Any variations shall be
104 supported by a written determination that describes the circumstances justifying the variations,
105 and notice of any material variation shall be included in the invitation for bids or request for
106 proposals.
107 Section 3. Section 63-56-48 is amended to read:
108 63-56-48. Debarment from consideration for award of contracts -- Causes for
109 debarment.
110 (1) After reasonable notice to the person involved and reasonable opportunity for that
111 person to be heard, the chief procurement officer or the head of a purchasing agency, after
112 consultation with the using agency and the attorney general, shall have authority to debar a
113 person for cause from consideration for award of contracts. The debarment shall not be for a
114 period exceeding three years. The same officer, after consultation with the using agency and the
115 attorney general, shall have authority to suspend a person from consideration for award of
116 contracts if there is probable cause to believe that the person has engaged in any activity which
117 might lead to debarment. The suspension shall not be for a period exceeding three months
118 unless an indictment has been issued for an offense which would be a cause for debarment
119 under Subsection (2) of this section, in which case the suspension shall, at the request of the
120 attorney general, remain in effect until after the trial of the suspended person.

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




Legislative Review Note
as of 1-6-03 7:24 AM

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

Office of Legislative Research and General Counsel