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First Substitute H.B. 476

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Thu, Mar 10, 2011 at 11:10 PM by lwells. --> PLEASE NOTE:

March 10, 2011

Madam Speaker:

    The Senate passed 1st Sub. H.B. 476, PROCUREMENT CODE AMENDMENTS, by Representative B. Last, with the following amendments:

1.    Page 1, Line 9 :    

             9          This bill amends Title 63G, Chapter 6, Utah Procurement Code   and another procurement provision   , to address procurement

2.    Page 10, Lines 287 through 288 :    

             287           (1) Administrative rules shall be [promulgated] issued   in accordance with Title 63G,
             288      Chapter 3, Utah Administrative Rulemaking Act,  
to govern the preparation, maintenance, and

and it is transmitted to the House for consideration.


        Annette B. Moore
        Secretary of the Senate

16 hb0476s01.wpd 11:06 pm RLR/lwells

Representative Bradley G. Last proposes the following substitute bill:




Chief Sponsor: Bradley G. Last

Senate Sponsor: Wayne L. Niederhauser

             7      LONG TITLE
             8      General Description:
             9          This bill amends Title 63G, Chapter 6, Utah Procurement Code, to address procurement
             10      of technology and changes to the State Procurement Policy Board.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    amends provisions relating to the State Procurement Policy Board to:
             15              .    designate the executive director of the Department of Technology Services and
             16      the chief procurement officer as voting members;
             17              .    change board member terms; and
             18              .    designate an employee of the Division of Purchasing and General Services as
             19      the secretary;
             20          .    requires that specifications for purposes of procurement provisions include
             21      specifications for technology;
             22          .    requires the State Procurement Policy Board to make rules governing technology;
             23      and
             24          .    makes technical and conforming changes.
             25      Money Appropriated in this Bill:

             26          None
             27      Other Special Clauses:
             28          None
             29      Utah Code Sections Affected:
             30      AMENDS:
             31          63F-1-205, as last amended by Laws of Utah 2008, Chapters 352 and 382
             32          63G-6-103, as renumbered and amended by Laws of Utah 2008, Chapter 382
             33          63G-6-201, as last amended by Laws of Utah 2010, Chapter 286
             34          63G-6-202, as last amended by Laws of Utah 2009, Chapter 132
             35          63G-6-301, as renumbered and amended by Laws of Utah 2008, Chapter 382
             36          63G-6-302, as last amended by Laws of Utah 2008, Chapter 352 and renumbered and
             37      amended by Laws of Utah 2008, Chapter 382
             39      Be it enacted by the Legislature of the state of Utah:
             40          Section 1. Section 63F-1-205 is amended to read:
             41           63F-1-205. Approval of acquisitions of information technology.
             42          (1) (a) Except as provided in Title 63M, Chapter 1, Part 26, Government Procurement
             43      Private Proposal Program, in accordance with Subsection (2), the chief information officer
             44      shall approve the acquisition by an executive branch agency of:
             45          (i) information technology equipment;
             46          (ii) telecommunications equipment;
             47          (iii) software;
             48          (iv) services related to the items listed in Subsections (1)(a)(i) through (iii); and
             49          (v) data acquisition.
             50          (b) The chief information officer may negotiate the purchase, lease, or rental of private
             51      or public information technology or telecommunication services or facilities in accordance with
             52      this section.
             53          (c) Where practical, efficient, and economically beneficial, the chief information
             54      officer shall use existing private and public information technology or telecommunication
             55      resources.
             56          (d) Notwithstanding another provision of this section, an acquisition authorized by this

             57      section shall comply with rules made by the State Procurement Policy Board under Title 63G,
             58      Chapter 6, Utah Procurement Code.
             59          (2) Before negotiating a purchase, lease, or rental under Subsection (1) for an amount
             60      that exceeds the value established by the chief information officer by rule in accordance with
             61      Section 63F-1-206 , the chief information officer shall:
             62          (a) conduct an analysis of the needs of executive branch agencies and subscribers of
             63      services and the ability of the proposed information technology or telecommunications services
             64      or supplies to meet those needs; and
             65          (b) for purchases, leases, or rentals not covered by an existing statewide contract,
             66      provide in writing to the chief procurement officer in the Division of Purchasing and General
             67      Services that:
             68          (i) the analysis required in Subsection (2)(a) was completed; and
             69          (ii) based on the analysis, the proposed purchase, lease, rental, or master contract of
             70      services, products, or supplies is practical, efficient, and economically beneficial to the state
             71      and the executive branch agency or subscriber of services.
             72          (3) In approving an acquisition described in Subsections (1) and (2), the chief
             73      information officer shall:
             74          (a) establish by administrative rule, in accordance with Section 63F-1-206 , standards
             75      under which an agency must obtain approval from the chief information officer before
             76      acquiring the items listed in Subsections (1) and (2);
             77          (b) for those acquisitions requiring approval, determine whether the acquisition is in
             78      compliance with:
             79          (i) the executive branch strategic plan;
             80          (ii) the applicable agency information technology plan;
             81          (iii) the budget for the executive branch agency or department as adopted by the
             82      Legislature; and
             83          (iv) Title 63G, Chapter 6, Utah Procurement Code; and
             84          (c) in accordance with Section 63F-1-207 , require coordination of acquisitions between
             85      two or more executive branch agencies if it is in the best interests of the state.
             86          (4) (a) Each executive branch agency shall provide the chief information officer with
             87      complete access to all information technology records, documents, and reports:

             88          (i) at the request of the chief information officer; and
             89          (ii) related to the executive branch agency's acquisition of any item listed in Subsection
             90      (1).
             91          (b) Beginning July 1, 2006 and in accordance with administrative rules established by
             92      the department under Section 63F-1-206 , no new technology projects may be initiated by an
             93      executive branch agency or the department unless the technology project is described in a
             94      formal project plan and the business case analysis has been approved by the chief information
             95      officer and agency head. The project plan and business case analysis required by this
             96      Subsection (4) shall be in the form required by the chief information officer, and shall include:
             97          (i) a statement of work to be done and existing work to be modified or displaced;
             98          (ii) total cost of system development and conversion effort, including system analysis
             99      and programming costs, establishment of master files, testing, documentation, special
             100      equipment cost and all other costs, including overhead;
             101          (iii) savings or added operating costs that will result after conversion;
             102          (iv) other advantages or reasons that justify the work;
             103          (v) source of funding of the work, including ongoing costs;
             104          (vi) consistency with budget submissions and planning components of budgets; and
             105          (vii) whether the work is within the scope of projects or initiatives envisioned when the
             106      current fiscal year budget was approved.
             107          (5) (a) The chief information officer and the Division of Purchasing and General
             108      Services shall work cooperatively to establish procedures under which the chief information
             109      officer shall monitor and approve acquisitions as provided in this section.
             110          (b) The procedures established under this section shall include at least the written
             111      certification required by Subsection 63G-6-204 (8).
             112          Section 2. Section 63G-6-103 is amended to read:
             113           63G-6-103. Definitions.
             114          As used in this chapter:
             115          (1) "Architect-engineer services" are those professional services within the scope of the
             116      practice of architecture as defined in Section 58-3a-102 , or professional engineering as defined
             117      in Section 58-22-102 .
             118          (2) "Business" means any corporation, partnership, individual, sole proprietorship,

             119      joint stock company, joint venture, or any other private legal entity.
             120          (3) "Change order" means a written order signed by the procurement officer, directing
             121      the contractor to suspend work or make changes, which the appropriate clauses of the contract
             122      authorize the procurement officer to order without the consent of the contractor or any written
             123      alteration in specifications, delivery point, rate of delivery, period of performance, price,
             124      quantity, or other provisions of any contract accomplished by mutual action of the parties to the
             125      contract.
             126          (4) (a) "Construction" means the process of building, renovation, alteration,
             127      improvement, or repair of any public building or public work.
             128          (b) "Construction" does not mean the routine operation, routine repair, or routine
             129      maintenance of existing structures, buildings, or real property.
             130          (5) (a) "Construction Manager/General Contractor" means any contractor who enters
             131      into a contract for the management of a construction project when that contract allows the
             132      contractor to subcontract for additional labor and materials that were not included in the
             133      contractor's cost proposal submitted at the time of the procurement of the Construction
             134      Manager/General Contractor's services.
             135          (b) "Construction Manager/General Contractor" does not mean a contractor whose only
             136      subcontract work not included in the contractor's cost proposal submitted as part of the
             137      procurement of construction is to meet subcontracted portions of change orders approved
             138      within the scope of the project.
             139          (6) "Contract" means any state agreement for the procurement or disposal of supplies,
             140      services, or construction.
             141          (7) "Cooperative purchasing" means procurement conducted by, or on behalf of, more
             142      than one public procurement unit, or by a public procurement unit with an external
             143      procurement unit.
             144          (8) "Cost-reimbursement contract" means a contract under which a contractor is
             145      reimbursed for costs which are allowed and allocated in accordance with the contract terms and
             146      the provisions of this chapter, and a fee, if any.
             147          (9) (a) "Design-build" means the procurement of architect-engineer services and
             148      construction by the use of a single contract with the design-build provider.
             149          (b) This method of design and construction can include the design-build provider

             150      supplying the site as part of the contract.
             151          (10) "Established catalogue price" means the price included in a catalogue, price list,
             152      schedule, or other form that:
             153          (a) is regularly maintained by a manufacturer or contractor;
             154          (b) is either published or otherwise available for inspection by customers; and
             155          (c) states prices at which sales are currently or were last made to a significant number
             156      of any category of buyers or buyers constituting the general buying public for the supplies or
             157      services involved.
             158          (11) "External procurement unit" means any buying organization not located in this
             159      state which, if located in this state, would qualify as a public procurement unit. An agency of
             160      the United States is an external procurement unit.
             161          (12) "Grant" means the furnishing by the state or by any other public or private source
             162      assistance, whether financial or otherwise, to any person to support a program authorized by
             163      law. It does not include an award whose primary purpose is to procure an end product, whether
             164      in the form of supplies, services, or construction. A contract resulting from the award is not a
             165      grant but a procurement contract.
             166          (13) "Invitation for bids" means all documents, whether attached or incorporated by
             167      reference, utilized for soliciting bids.
             168          (14) "Local public procurement unit" means any political subdivision or institution of
             169      higher education of the state or public agency of any subdivision, public authority, educational,
             170      health, or other institution, and to the extent provided by law, any other entity which expends
             171      public funds for the procurement of supplies, services, and construction, but not counties,
             172      municipalities, political subdivisions created by counties or municipalities under the Interlocal
             173      Cooperation Act, the Utah Housing Corporation, or the Legislature and its staff offices. It
             174      includes two or more local public procurement units acting under legislation which authorizes
             175      intergovernmental cooperation.
             176          (15) "Person" means any business, individual, union, committee, club, other
             177      organization, or group of individuals, not including a state agency or a local public
             178      procurement unit.
             179          (16) "Policy board" means the procurement policy board created by Section
             180      63G-6-201 .

             181          (17) "Preferred bidder" means a bidder that is entitled to receive a reciprocal preference
             182      under the requirements of this chapter.
             183          (18) "Procurement" means buying, purchasing, renting, leasing, leasing with an option
             184      to purchase, or otherwise acquiring any supplies, services, or construction. It also includes all
             185      functions that pertain to the obtaining of any supply, service, or construction, including
             186      description of requirements, selection, and solicitation of sources, preparation, and award of a
             187      contract, and all phases of contract administration.
             188          (19) "Procurement officer" means any person or board duly authorized to enter into and
             189      administer contracts and make written determinations with respect thereto. It also includes an
             190      authorized representative acting within the limits of authority.
             191          (20) "Public procurement unit" means either a local public procurement unit or a state
             192      public procurement unit.
             193          (21) "Purchase description" means the words used in a solicitation to describe the
             194      supplies, services, or construction to be purchased, and includes specifications attached to or
             195      made a part of the solicitation.
             196          (22) "Purchasing agency" means any state agency other than the Division of Purchasing
             197      and General Services that is authorized by this chapter or its implementing regulations, or by
             198      delegation from the chief procurement officer, to enter into contracts.
             199          (23) "Request for proposals" means all documents, whether attached or incorporated by
             200      reference, used for soliciting proposals.
             201          (24) "Responsible bidder or offeror" means a person who has the capability in all
             202      respects to perform fully the contract requirements and who has the integrity and reliability
             203      which will assure good faith performance.
             204          (25) "Responsive bidder" means a person who has submitted a bid which conforms in
             205      all material respects to the invitation for bids.
             206          (26) "Sealed" does not preclude acceptance of electronically sealed and submitted bids
             207      or proposals in addition to bids or proposals manually sealed and submitted.
             208          (27) "Services" means the furnishing of labor, time, or effort by a contractor, not
             209      involving the delivery of a specific end product other than reports which are merely incidental
             210      to the required performance. It does not include employment agreements or collective
             211      bargaining agreements.

             212          (28) "Specification" means any description of the physical or functional characteristics,
             213      or of the nature of a supply, service, technology, or construction item. It may include a
             214      description of any requirement for inspecting, testing, or preparing a supply, service,
             215      technology, or construction item for delivery.
             216          (29) "State agency" or "the state" means any department, division, commission,
             217      council, board, bureau, committee, institution, government corporation, or other establishment,
             218      official, or employee of this state.
             219          (30) "State public procurement unit" means the Division of Purchasing and General
             220      Services and any other purchasing agency of this state.
             221          (31) "Supplies" means all property, including equipment, materials, and printing.
             222          (32) "Using agency" means any state agency which utilizes any supplies, services, or
             223      construction procured under this chapter.
             224          Section 3. Section 63G-6-201 is amended to read:
             225           63G-6-201. Creation of procurement policy board.
             226          (1) (a) There is created a state procurement policy board.
             227          (b) The policy board shall consist of [eight] 10 members [who shall be appointed] as
             228      follows:
             229          (i) an employee of a state institution of higher education, appointed by the board of
             230      regents;
             231          (ii) an employee of the Department of Human Services, appointed by the executive
             232      director of that department;
             233          (iii) an employee of the Department of Transportation, appointed by the executive
             234      director of that department;
             235          (iv) an employee of a school district appointed by a cooperative purchasing entity for
             236      school districts;
             237          (v) an employee of the Division of Facilities Construction and Management appointed
             238      by the director of that division;
             239          (vi) an employee of a county, appointed by the Utah Association of Counties;
             240          (vii) an employee of a city, appointed by the Utah League of Cities and Towns; [and]
             241          (viii) an employee of a local district or special service district, appointed by the Utah
             242      Association of Special Districts[.];

             243          (ix) the executive director of the Department of Technology Services or the executive
             244      director's designee; and
             245          (x) the chief procurement officer or the chief procurement officer's designee.
             246          (c) Members of the policy board shall be knowledgeable and experienced in, and have
             247      supervisory responsibility for, procurement in their official positions.
             248          [(2) Members shall be appointed to four-year staggered terms.]
             249          [(3) When a vacancy occurs in the membership for any reason, the replacement shall be
             250      appointed for the unexpired term.]
             251          (2) A board member shall serve as long as the member meets the description in
             252      Subsection (1)(b) unless removed by the person or entity who appointed the board member.
             253          [(4)] (3) (a) The policy board shall:
             254          (i) adopt rules of procedure for conducting its business; and
             255          (ii) elect a chair to serve for one year.
             256          (b) The chair may be elected to succeeding terms.
             257          (c) The chief procurement officer shall designate an employee of the Division of
             258      Purchasing and General Services to serve as the nonvoting secretary to the policy board.
             259          [(5)] (4) A member may not receive compensation or benefits for the member's service,
             260      but may receive per diem and travel expenses in accordance with:
             261          (a) Section 63A-3-106 ;
             262          (b) Section 63A-3-107 ; and
             263          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             264      63A-3-107 .
             265          Section 4. Section 63G-6-202 is amended to read:
             266           63G-6-202. Powers and duties of board.
             267          (1) Except as otherwise provided in Section 63G-6-104 and Subsection
             268      63G-6-208 (1)(b), the policy board shall:
             269          (a) make rules, consistent with this chapter, governing the procurement, management,
             270      and control of any and all supplies, services, technology, and construction to be procured by the
             271      state; and
             272          (b) consider and decide matters of policy within the provisions of this chapter,
             273      including those referred to it by the chief procurement officer.

             274          (2) (a) The policy board may:
             275          (i) audit and monitor the implementation of its rules and the requirements of this
             276      chapter;
             277          (ii) upon the request of a local public procurement unit, review that procurement unit's
             278      proposed rules to ensure that they are not inconsistent with the provisions of this chapter; and
             279          (iii) approve the use of innovative procurement methods proposed by local public
             280      procurement units.
             281          (b) The policy board may not exercise authority over the award or administration of:
             282          (i) any particular contact; or
             283          (ii) over any dispute, claim, or litigation pertaining to any particular contract.
             284          Section 5. Section 63G-6-301 is amended to read:
             285           63G-6-301. Rules for specifications of supplies.
             286          [Rules and regulations]
             287           (1) Administrative rules shall be [promulgated] issued in accordance with Title 63G,
             288      Chapter 3, Utah Administrative Rulemaking Act, to govern the preparation, maintenance, and
             289      content of specifications for supplies, services, [and] construction, and technology required by
             290      the state. [Rules and regulations]
             291           (2) The administrative rules described in Subsection (1) shall determine the extent to
             292      which a nonemployee who has prepared specifications for use by the state may participate in
             293      any state procurement using such specifications.
             294          Section 6. Section 63G-6-302 is amended to read:
             295           63G-6-302. Duty of chief procurement officer in maintaining specifications.
             296          (1) The chief procurement officer shall prepare, issue, revise, maintain, and monitor the
             297      use of specifications for supplies, services, [and] construction, and technology required by the
             298      state.
             299          (2) The chief procurement officer shall obtain expert advice and assistance from
             300      personnel of using agencies in the development of specifications and may delegate in writing to
             301      a using agency the authority to prepare and utilize its own specifications.
             302          (3) For a procurement process under Title 63M, Chapter 1, Part 26, Government
             303      Procurement Private Proposal Program, any delegation by the chief procurement officer under
             304      this section shall be made to the Governor's Office of Economic Development.

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