2014 -- S 2470

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LC003346

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- STATE PURCHASES

     Introduced By: Senator Michael J.McCaffrey

     Date Introduced: February 27, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 37-2-2, 37-2-7 and 37-2-18 of the General Laws in Chapter 37-2

entitled "State Purchases" are hereby amended to read as follows:

     37-2-2. General provisions. -- (a) This chapter shall be liberally construed and applied to

promote its underlying purposes and policies.

      (b) The underlying purposes and policies of this chapter are to:

      (1) Simplify, clarify, and modernize the law governing purchasing by the state of Rhode

Island and its local public agencies;

      (2) Permit the continued development of purchasing policies and practices;

      (3) Make as consistent as possible the purchasing laws among the various states;

      (4) Provide for increased public confidence in the procedures followed in public

procurement;

      (5) Insure the fair and equitable treatment of all persons who deal with the procurement

system of the state;

      (6) Provide increased economy in state and public agency procurement activities by

fostering effective competition;

      (7) Provide safeguards for the maintenance of a procurement system of quality, integrity

and highest ethical standards; and

      (8) Ensure that a public agency, acting through its existing internal purchasing function,

adheres to the general principles, policies and practices enumerated herein.

     (c) The awarding authority shall award contracts pursuant to this chapter in that it is the

intention of this chapter that all contracts governed by this chapter shall be awarded to the lowest

responsive and responsible bidder pursuant to § 37-2-18. Provided, that “palpable abuse of

discretion” shall not be a standard in consideration of any bid protests pursuant to any provision

of this chapter.

     37-2-7. Definitions. -- The words defined in this section have the meanings set forth

below whenever they appear in this chapter, unless the context in which they are used clearly

requires a different meaning or a different definition is prescribed for a particular section, group

of sections, or provision:

      (1) "Business" means any corporation, partnership, individual, sole proprietorship, joint

stock company, joint venture, or any other legal entity through which business is conducted.

      (2) "Change order" means a written authorization signed by the purchasing agent

directing or allowing the contractor to proceed with changes, alterations, or modifications to the

terms, conditions, or scope of work on a previously awarded contract

      (3) "Chief purchasing officer" shall mean: (i) for a state agency, the director of the

department of administration, and (ii) for a public agency, the executive director or the chief

operational officer of the agency.

      (4) "Construction" means the process of building, altering, repairing, improving, or

demolishing any public structures or building, or other public improvements of any kind to any

public real property. It does not include the routine maintenance or repair of existing structures,

buildings, or real property performed by salaried employees of the state of Rhode Island in the

usual course of their jobs.

      (5) "Contract" means all types of agreements, including grants and orders, for the

purchase or disposal of supplies, services, construction, or any other item. It includes awards;

contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for

the issuance of job or task orders; leases; letter contracts; purchase orders; and construction

management contracts. It also includes supplemental agreements with respect to any of the

foregoing. "Contract" does not include labor contracts with employees of state agencies.

      (6) "Contract amendment" means any written alteration in the specifications, delivery

point, rate of delivery, contract period, price, quantity, or other contract provisions of any existing

contract, whether accomplished by unilateral action in accordance with a contract provision, or by

mutual action of the parties to the contract. It includes bilateral actions, such as supplemental

agreements, and unilateral actions, such as change orders, administrative changes, notices of

termination, and notices of the exercise of a contract option.

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      (7) "Contractor" means any person having a contract with a governmental body.

      (8) "Data" means recorded information, regardless of form or characteristic.

      (9) "Designee" means a duly authorized representative of a person holding a superior

position.

      (10) "Employee" means an individual drawing a salary from a state governmental entity.

      (11) "State governmental entity" means any entity created as a legislative body or a

public or state agency by the general assembly or constitution of this state, except for municipal,

regional, or county governmental entities.

      (12) "May" means permissive.

      (13) "Negotiation" means contracting by either the method set forth in section 37-2-19,

37-2-20, or 37-2-21.

      (14) "Person" means any business, individual, organization, or group of individuals.

      (15) "Procurement" means the purchasing, buying, renting, leasing, or otherwise

obtaining of any supplies, services, or construction. It also includes all functions that pertain to

the obtaining of any supply, service, or construction item, including a description of

requirements, selection and solicitation of sources, preparation, and award of contract, and all

phases of contract administration.

      (16) "Public agency" shall mean the Rhode Island industrial recreational building

authority, the Rhode Island economic development corporation, the Rhode Island industrial

facilities corporation, the Rhode Island refunding bond authority, the Rhode Island housing and

mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island

public transit authority, the Rhode Island student loan authority, the Howard development

corporation, the water resources board corporate, the Rhode Island health and education building

corporation, the Rhode Island higher education assistance authority, the Rhode Island turnpike

and bridge authority, the Blackstone Valley district commission, the Narragansett Bay water

quality management district commission, the Rhode Island telecommunications authority, the

convention center authority, the Channel 36 foundation, the Rhode Island lottery commission

their successors and assigns, any other body corporate and politic which has been or will be

created or established within this state excepting cities and towns, and the board of governors for

higher education for all purchases which are funded by restricted, sponsored, or auxiliary monies.

      (17) "Purchase request" or "purchase requisition" means that document whereby a using

agency requests that a contract be entered into to obtain goods and/or services for a specified

need, and may include, but is not limited to, the technical description of the requested item,

delivery requirements, transportation mode request, criteria for evaluation of proposals, and/or

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preparation of suggested sources of supply, and information supplied for the making of any

written determination and finding required by section 37-2-6.

      (18) "Purchasing agency" means any state governmental entity which is authorized by

this chapter, its implementing regulations, or by way of delegation from the chief purchasing

officer to contract on its own behalf rather than through the central contracting authority of the

chief purchasing officer.

      (19) "Purchasing agent" means any person authorized by a governmental entity in

accordance with procedures prescribed by regulations, to enter into and administer contracts and

make written determinations and findings with respect to contracts. The term also includes an

authorized representative acting within the limits of authority. "Purchasing agent" also means the

person appointed in accordance with section 37-2-1.

      (20) "Services" means the rendering, by a contractor, of its time and effort rather than the

furnishing of a specific end product, other than reports which are merely incidental to the required

performance of services. "Services" does not include labor contracts with employees of state

agencies.

     (21) "Shall" means imperative and shall not be modified, limited or conditioned or

replaced by the “palpable abuse of discretion” standard of review, or otherwise rendered other

than an imperative.

      (22) "State" means the state of Rhode Island and any of its departments or agencies and

public agencies.

      (23) "Supplemental agreement" means any contract modification which is accomplished

by the mutual action of the parties.

      (24) "Supplies" means all property, including, but not limited to, leases of real property,

printing, and insurance, except land or permanent interest in land.

      (25) "Using agency" means any state governmental entity which utilizes any supplies,

services, or construction purchased under this chapter.

      (26) As used in section 37-2-59, "architect" or "engineer" services means those

professional services within the scope of practice of architecture, professional engineering, or

registered land surveying pertaining to construction, as defined by the laws of this state.

"Consultant" means any person with whom the state and/or a public agency has a contract which

contract provides for the person to give direction or information as regards a particular area of

knowledge in which the person is a specialist and/or has expertise.

      (27) For purposes of sections 37-2-62 -- 37-2-70, "directors" means those members of a

public agency appointed pursuant to a statute who comprise the governing authority of the board,

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commission, authority, and/or corporation.

      (28) "State agency" means any department, commission, council, board, bureau,

committee, institution, or other governmental entity of the executive or judicial branch of this

state not otherwise established as a body corporate and politic, and includes, without limitation,

the board of governors for higher education except for purchases which are funded by restricted,

sponsored, or auxiliary moneys and the board of regents for elementary and secondary education.

      (29) "Governmental entity" means any department, commission, council, board, bureau,

committee, institution, legislative body, agency, or government corporation of the executive,

legislative, or judicial branches of state, federal, and/or local governments.

      (30) "Construction management at-risk" or "construction management at-risk services"

or "construction management at-risk delivery method" is a construction method wherein a

construction manager at-risk provides a range of preconstruction services and construction

management services which may include cost estimation and consultation regarding the design of

the building project, the preparation and coordination of bid packages, scheduling, cost control,

and value engineering, acting as the general contractor during the construction, detailing the trade

contractor scope of work, holding the trade contracts and other contracts, evaluating trade

contractors and subcontractors, and providing management and construction services, all at a

guaranteed maximum price, which shall represent the maximum amount to be paid by the using

agency for the building project, including the cost of work, the general conditions and the fee

payable to the construction management at-risk firm.

      (31) "Construction manager at-risk" or "construction management at-risk firm" is a

person or business experienced in construction that has the ability to evaluate and to implement

drawings and specifications as they affect time, cost and quality of construction and the ability to

coordinate and deliver the construction of the project within a guaranteed maximum price, which

shall represent the maximum amount to be paid by the using agency for the building project,

including the cost of the work, the general conditions and the fee payable to the construction

management at-risk firm. The construction manager at-risk provides consultation services during

the preconstruction and construction phases of the project. The project engineer, architect or

owner's program manager may not serve as the construction manager at-risk.

      (32) "Owner's program manager" shall be an entity engaged to provide project

management services on behalf of a state agency for the construction and supervision of the

construction of a building project. The owner's program manager acts as the owner's agent in all

aspects of the construction project, including, but not limited to, architectural programming,

planning, design, construction, and the selection and procurement of an appropriate construction

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delivery method. The owner's program manager shall have at least seven (7) years experience in

the construction and supervision of construction of buildings of similar size and complexity. The

owner's program manager shall not have been employed during the preceding year by the design

firm, the construction firm, and/or the subcontractors associated with the project.

     37-2-18. Competitive sealed bidding. -- (a) Contracts exceeding the amount provided by

section 37-2-22 shall be awarded by competitive sealed bidding unless it is determined in writing

that this method is not practicable or that the best value for the state may be obtained by using an

electronic reverse auction as set forth in section 37-2-18.1. Factors to be considered in

determining whether competitive sealed bidding is practicable shall include whether:

      (1) Specifications can be prepared that permit award on the basis of either the lowest bid

price or the lowest evaluated bid price; and

      (2) The available sources, the time and place of performance, and other relevant

circumstances as are appropriate for the use of competitive sealed bidding.

      (b) The invitation for bids shall state whether the award shall be made on the basis of the

lowest bid price or the lowest evaluated or responsive bid price. If the latter basis is used, the

objective measurable criteria to be utilized shall be set forth in the invitation for bids, if available.

All documents submitted in response to the bid proposal are public pursuant to chapter 38-2 upon

opening of the bids. The invitation for bids shall state that each bidder must submit a copy of their

bid proposal to be available for public inspection upon the opening of the bids. The burden to

identify and withhold from the public copy that is released at the bid opening any trade secrets,

commercial or financial information, or other information the bidder deems not subject to public

disclosure pursuant to chapter 38-2, the Access to Public Records Act, shall rest with the bidder

submitting the bid proposal.

      (c) Unless the invitations for bid are accessible under the provisions as provided in

section 37-2-17.1, public notice of the invitation for bids shall be given a sufficient time prior to

the date set forth therein for the opening of bids. Public notice may include publication in a

newspaper of general circulation in the state as determined by the purchasing agent not less than

seven (7) days nor more than twenty-eight (28) days before the date set for the opening of the

bids. The purchasing agent may make a written determination that the twenty-eight (28) day

limitation needs to be waived. The written determination shall state the reason why the twenty-

eight (28) day limitation is being waived and shall state the number of days, giving a minimum

and maximum, before the date set for the opening of bids when public notice is to be given.

      (d) Bids shall be opened and read aloud publicly at the time and place designated in the

invitation for bids. Each bid, together with the name of the bidder, shall be recorded and an

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abstract made available for public inspection.

      (e) The chief purchasing officer shall adopt and file regulations governing the bidding of

highway and bridge construction projects in the state not later than December 31, 2011.

      (f) Immediately subsequent to the opening of the bids, the copies of bid documents

submitted pursuant to subsection 37-2-18(b) shall be made available for inspection by the public.

Any objection to any bid on the grounds that it is nonresponsive to the invitation for bids must be

filed with the purchasing agent within five (5) business days of the opening of the bids. The

purchasing agent shall issue a written determination as to whether the subject bid is

nonresponsive addressing each assertion in the objection and shall provide a copy of the

determination to the objector and all those who submitted bids at least seven (7) business days

prior to the award of the contract. If a bid is nonresponsive to the requirements in the invitation to

bid, the bid is invalid and the purchasing agent shall reject the bid. The purchasing agent shall

have no discretion to waive any requirements in the invitation to bid which are identified as

mandatory. Nothing in this section shall be construed to interfere with or invalidate the results of

the due diligence conducted by the division of purchasing to determine whether bids are

responsive and responsible.

      (g) Subsequent to the awarding of the bid, all documents pertinent to the awarding of the

bid that were not made public pursuant to subsection 37-2-18(e) shall be made available and open

to public inspection, pursuant to chapter 38-2, the Access to Public Records Act, and retained in

the bid file. The copy of the bid proposal provided pursuant to subsection 37-2-18(b) shall be

retained until the bid is awarded.

      (h) The contract shall be awarded with reasonable promptness by written notice to the

responsive and responsible bidder whose bid is either the lowest bid price, lowest evaluated, or

responsive bid price.

      (i) Correction or withdrawal of bids may be allowed only to the extent permitted by

regulations issued by the chief purchasing officer.

      (j) As of January 1, 2011, this section shall apply to contracts greater than one million

dollars ($1,000,000); on January 1, 2012 for all contracts greater than seven hundred fifty

thousand dollars ($750,000); on January 1, 2013 for all contracts greater than five hundred

thousand dollars ($500,000); and on January 1, 2014 for all contracts awarded pursuant to this

section.

     SECTION 2. Sections 45-55-1, 45-55-4 and 45-55-5 of the General Laws in Chapter 45-

55 entitled "Award of Municipal Contracts" are hereby amended to read as follows:

     45-55-1. Legislative findings. -- It is declared that a need exists to establish a uniform

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system for the award of contracts by municipalities, utilizing open cooperative bids. The

awarding authority shall award contracts pursuant to this chapter in that it is the intention of this

statute that all contracts under this chapter shall be awarded to the lowest responsive and

responsible bidder as noted in this chapter. Further, palpable abuse of discretion shall not be a

standard in consideration of any bid protests pursuant to any provision of this chapter.

     45-55-4. Definitions. -- The words defined in this section have the following meanings

whenever they appear in this chapter, unless the context in which they are used clearly requires a

different meaning or a different definition is prescribed for a particular section, group of sections

or provision.

      (1) "Business" means any corporation, partnership, individual, sole proprietorship, joint

stock company, joint venture, or any other legal entity through which business is conducted.

      (2) "Change order" means a written order signed by the purchasing agent, or contractor

directing or allowing the contractor to make changes which the changes clause of the contract

authorizes the purchasing agent or contractor to order without the consent of the contractor or

purchasing agent.

     (3) “Purchasing Officer” means the person designated in each municipality or quasi-

public agency pursuant to § 45-55-3.

      (3)(4) "Construction" means the process of building, altering, repairing, improving, or

demolishing any public structures or building, or other public improvements of any kind to any

public real property. It does not include the routine maintenance or repair of existing structures,

buildings, or real property performed by salaried employees of the municipality in the usual

course of their job.

      (4)(5) "Contract" means all types of agreements, including grants and orders, for the

purchase or disposal of supplies, services, construction, or any other item. It includes awards;

contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for

the issuance of job or task orders; leases; letter contracts, purchase orders, and construction

management contracts. It also includes supplemental agreements with respect to any of the

preceding. "Contract" does not include labor contracts with employees of the municipality.

      (5)(6) "Contract modification" means any written alteration in the specifications,

delivery point, rate of delivery, contract period, price, quantity, or other contract provisions of

any existing contract, whether accomplished by unilateral action in accordance with a contract

provision, or by mutual action of the parties to the contract. It includes bilateral actions, as

supplemental agreements, and unilateral actions, as change orders, administrative changes,

notices of termination, and notices of the exercise of a contract option.

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      (6)(7) "Contractor" means any person having a contract with a municipality.

      (8) "Data" means recorded information, regardless of form or characteristic.

      (8)(9) "Designee" means a duly authorized representative of a person holding a superior

position.

      (9)(10) "Employee" means an individual drawing a salary from a municipality, whether

elected or not, and any nonsalaried individual performing personal services for any municipality.

      (10)(11) "May" means permissive.

      (11)(12) "Municipality" means the individual cities and towns of the state of Rhode

Island.

      (12)(13) "Negotiation" means contracting by either of the methods described in sections

45-55-6, 45-55-7, and 45-55-8.

      (13)(14) "Person" means any business, individual, organization, or group of individuals.

      (14)(15) "Procurement" means the purchasing, buying, renting, leasing, or otherwise

obtaining of any supplies, services, or construction. It also includes all functions that pertain to

the obtaining of any supply, service, or construction item, including description of requirements,

selection and solicitation of sources, preparation and award of contract, and all phases of contract

administration.

      (15)(16) "Purchasing officer" means the person designated in each municipality or quasi

public agency pursuant to section 45-55-3.

      (16)(17) "Regulations" means rules and regulations adopted by the individual cities or

towns, concerning the implementation of the provisions of this chapter.

      (17)(18) "Services" means the rendering, by a contractor, of its time and effort rather

than the furnishing of a specific end product, other than reports which are merely incidental to the

required performance of services. "Services" does not include labor contracts with employees of

governmental agencies.

      (18)(19) "Shall" means imperative, and shall not be modified, limited or conditioned or

replaced by the “palpable abuse of discretion” standard of review or otherwise rendered other

than an imperative.

      (19)(20) "Supplemental agreement" means any contract modification which is

accomplished by the mutual action of the parties.

      (20)(21) "Supplies" means all property, including, but not limited, to leases of real

property, printing and insurance, except land or permanent interest in land.

     45-55-5. Competitive sealed bidding. -- (a) Contracts exceeding the amount provided by

section 45-55-9 shall be awarded by competitive bidding unless they are professional

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engineering/architectural services pursuant to section 45-55-8.1 and it is determined in writing

that this method is not practicable. Factors to be considered in determining whether competitive

sealed bidding is practicable shall include whether:

      (1) Specifications can be prepared that permit award on the basis of either the lowest

qualified bid price or the lowest qualified evaluated bid price; and

      (2) The available sources, the time and place of performance, and other relevant

circumstances as are appropriate for the use of competitive sealed bidding.

      (b) The invitation for bids shall state whether award shall be made on the basis of the

lowest bid price or the lowest evaluated or responsive bid price. If the latter basis is used, the

objective measurable criteria to be utilized shall be stated in the invitation for bids, if available.

      (c) Adequate public notice of the invitation for bids shall be given a sufficient time prior

to the date stated in the notice for the opening of bids. Notice may include publication in a

newspaper of general circulation in the state as determined by the purchasing officer for the

municipality not less than seven (7) days nor more than twenty-one (21) days before the date set

for opening of the bids. The purchasing officer may make a written determination that the twenty-

one (21) day limitation needs to be waived. The written determination shall state the reason why

the twenty-one (21) day limitation is being waived and shall state the number of days, giving a

minimum and maximum, before the date set for the opening of bids when public notice is to be

given.

      (d) Bids shall be opened publicly in full view of the public at the time and place

designated in the invitation for bids. Each bid, together with the name of the bidder, shall be

recorded and an abstract made available for public inspection. Subsequent to the awarding of the

bid, all documents pertinent to the awarding of the bid shall be made available and open to public

inspection and retained in the bid file.

      (e) The contract shall be awarded with reasonable promptness by written notice to the

responsive and responsible bidder whose bid is either the lowest bid price, or lowest evaluated or

responsive bid price.

      (f) Correction or withdrawal of bids may be allowed only to the extent permitted by

regulations issued by the purchasing officer.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- STATE PURCHASES

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     This act would require the state and municipalities to award bids for purchases of goods

or services to the lowest responsive and responsible bidder whose bid is the lowest price.

     This act would take effect upon passage.

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