HB51 By Representative Hall RFD State Government Rd 1 04-FEB-20

SYNOPSIS: Under existing law, state contracts for goods and services in excess of $15,000 are generally required to be let to the lowest responsible bidder, although a state agency may award a contract to a preferred vendor, as defined, if the bid is not more than five percent greater than that of the lowest responsible bidder who is not a preferred vendor.

This bill would establish a preference for bidders on state contracts which are geographically disadvantaged business enterprises and would require state contracts for goods or services to be let to geographically disadvantaged business enterprises if the bid is within three percent of the lowest responsible bid.

This bill would require the Department of Finance to adopt rules to achieve the objectives of the bill.

A BILL TO BE ENTITLED AN ACT

Relating to the awarding of public contracts; to provide that in the letting of public contracts in which any state, county, or municipal funds are utilized, except those contracts funded in whole or in part with funds received from a federal agency, preference shall be given to the lowest responsive and responsible bidder who is a geographically disadvantaged business enterprise and whose bid is within three percent of the lowest responsible bid; to require the Department of Finance to adopt policies and procedures with the objective of increasing contracts for goods or services with geographically disadvantaged business enterprises; and to provide for awarding contracts to geographically disadvantaged business enterprises.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. As used in this act, the following words shall have the following meanings:

(1) DEPARTMENT. The Department of Finance.

(2) DIRECTOR. The Director of the Department of Finance.

(3) EXPENDITURE. A payment under a contract for goods or services where the department, or a department or agency exercising procurement authority delegated by the department, acts as the sole or primary contracting entity and has selective discretion as to the supplier, vendor, or contractor under the contract.

(4) GEOGRAPHICALLY DISADVANTAGED BUSINESS ENTERPRISE. A person or entity that satisfies one or more of the following:

a. Is certified as a HUBZone Small Business Concern by the United States Small Business Administration.

b. Has a principal place of business located within a qualified opportunity zone within Alabama.

c. More than half of its employees have a principal residence located within a qualified opportunity zone as defined by 26 U.S.C. §1400Z-1 within Alabama or work at a location within a qualified opportunity zone, or both.

(5) JOINT VENTURE. An agreement that combines two or more businesses for specified purposes involving one or more geographically disadvantaged business enterprises and one or more businesses other than a geographically disadvantaged business enterprise.

(6) SUBCONTRACT. An agreement to share a primary contract between a primary contractor that is not a geographically disadvantaged business enterprise and a geographically disadvantaged business enterprise.

Section 2. Notwithstanding any provision of law, in the letting of public contracts in which any state, county, or municipal funds are utilized, except those contracts funded in whole or in part with funds received from a federal agency, preference shall be given to the lowest responsible bidder who is a geographically disadvantaged business enterprise and whose bid is within three percent of the lowest responsible bid of a bidder who is a geographically disadvantaged business enterprise.

Section 3. The department shall be responsible for all of the following:

(1) Identifying eligible geographically disadvantaged business enterprises in cooperation with other state departments and agencies and organizations representing small businesses and reducing or eliminating barriers to participating in state procurement by geographically disadvantaged business enterprises.

(2) Adopting a procurement policy for the department, and for each department or agency exercising procurement authority, that establishes a goal that by the 2022-2023 fiscal year three percent or more of expenditures in each fiscal year shall be made to geographically disadvantaged business enterprises.

(3) Assisting in achieving the goal under subdivision (2) by requiring that contracts include provisions to accommodate subcontracts and joint ventures with geographically disadvantaged business enterprises. The provisions shall require a bidder to indicate the extent of geographically disadvantaged business enterprise participation. Only the portion of a contract that a geographically disadvantaged business enterprise participates in shall be considered in meeting the goal outlined in this section.

Section 4. (a) A person or entity seeking certification by the department as a geographically disadvantaged business enterprise shall complete a sworn affidavit in a form determined by the department that includes both of the following:

(1) A statement that the person or entity is a geographically disadvantaged business enterprise and is prepared to bid on state contracts.

(2) The basis on which the person or entity qualifies as a geographically disadvantaged business enterprise.

(b) The affidavit shall be filed with the director of the department or an individual within the department designated by the director.

(c) A geographically disadvantaged business enterprise shall comply with the same requirements applicable to other bidders, including any applicable requirements for insurance.

Section 5. A geographically disadvantaged business enterprise shall notify the department if it no longer qualifies as a geographically disadvantaged business enterprise.

Section 6. (a) The director shall adopt and enforce rules to implement this act.

(b) The director shall monitor compliance with this act and shall report a violation to the Attorney General who shall take action to enforce the requirements of this act.

Section 7. The director shall report to the Governor annually on the results of the policy required by this act, including details regarding specific contracts awarded by each department or agency and the type of business engaged in by the geographically disadvantaged business enterprise awarded the contract. The department shall make the annual report available to the public on its website.

Section 8. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Public Contracts

Finance Department

Contracts

State Agencies