2013 -- S 0253

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LC00755

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- STATE PURCHASES

     Introduced By: Senator Michael J. McCaffrey

     Date Introduced: February 13, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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

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

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

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promote its underlying purposes and policies.

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

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

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Island and its local public agencies;

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

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

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

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procurement;

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

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system of the state;

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

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fostering effective competition;

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

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and highest ethical standards; and

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

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

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

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

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

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

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of this chapter.

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

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

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

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of sections, or provision:

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

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

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

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

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

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

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

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operational officer of the agency.

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

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

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

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

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usual course of their jobs.

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

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

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

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

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

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

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

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

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

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

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

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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.

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

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

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position.

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

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

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

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regional, or county governmental entities.

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      (12) "May" means permissive.

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

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

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

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

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

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

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

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phases of contract administration.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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chief purchasing officer.

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

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

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

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

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

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

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

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

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agencies.

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

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

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than an imperative.

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

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public agencies.

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

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by the mutual action of the parties.

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

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

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

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services, or construction purchased under this chapter.

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

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

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

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

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

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

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

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

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commission, authority, and/or corporation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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payable to the construction management at-risk firm.

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

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

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

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

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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

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

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

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determining whether competitive sealed bidding is practicable shall include whether:

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

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price or the lowest evaluated bid price; and

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

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

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

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

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

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

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

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

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

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

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

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submitting the bid proposal.

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

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

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

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

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

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

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

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

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

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

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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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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responsive and responsible.

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

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

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

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

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retained until the bid is awarded.

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

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

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responsive bid price.

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

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regulations issued by the chief purchasing officer.

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

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

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

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

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section.

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

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

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     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

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

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

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

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

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

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

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

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or provision.

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

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

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

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

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

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purchasing agent.

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

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public agency pursuant to section 45-55-3.

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

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

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

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

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course of their job.

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

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

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

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

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

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

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

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

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

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

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

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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.

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

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

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position.

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

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

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

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

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Island.

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

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

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

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

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

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

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

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administration.

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

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public agency pursuant to section 45-55-3.

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

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

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

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

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

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governmental agencies.

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

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

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than an imperative.

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

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accomplished by the mutual action of the parties.

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

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

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

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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

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

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sealed bidding is practicable shall include whether:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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given.

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

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

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

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

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inspection and retained in the bid file.

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

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

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responsive bid price.

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

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regulations issued by the purchasing officer.

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     SECTION 3. This act shall take effect upon passage.

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LC00755

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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

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

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     This act would take effect upon passage.

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LC00755

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