Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 12-0462.02 Bob Lackner x4350 HOUSE BILL 12-1113 HOUSE SPONSORSHIP Lee, SENATE SPONSORSHIP (None), House Committees Senate Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning the creation of certain procurement preferences to be applied in the state procurement process. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Preference where contract to be performed by mostly Colorado residents. On and after July 1, 2012, if a state agency (agency) or governmental body (body) issues an invitation for bids or a request for proposals for a construction contract for a public project (construction contract) or for a services contract that is, in either case, worth more than $500,000, the agency or body must grant a 3% preference to the bidder or offeror (contractor) if the contractor certifies that at least 90% of the employees who will perform the requirements of the contract are Colorado residents. With respect to a construction contract, an agency or body must also grant a contractor who receives the 3% preference: An additional 1% preference if the contractor certifies that it offers health care and retirement benefits to the employees who will perform the contract requirements; and An additional 1% preference if the contractor certifies that the employees who will perform the contract requirements have access to a federally qualified apprenticeship training program. With respect to a services contract, an agency or body must also grant a contractor who receives the 3% preference an additional 2% preference if the contractor certifies that it offers health care benefits and retirement benefits to the employees who will perform the requirements of the contract. An agency or body may not allow any of the preferences to a noncompliant contractor, and the contractor may not use the preference to satisfy a minimum requirement of a contract. A contractor that seeks a preference for a bid or offer must certify its eligibility for the preference to the agency or body that issued the invitation for bids or request for proposals. The agency or body may rely on the certification but may also require the contractor to submit substantiating documentation or other information needed to verify the contractor's eligibility for the preference. The executive director of the department of personnel (department) must promulgate rules for the administration of each preference, including processes for a contractor to certify and an agency or body to verify the contractor's eligibility for the preference. Veterans' preference. When a contract for supplies or services is to be awarded though competitive sealed bidding or through competitive sealed best value bidding, the bill requires an amount equal to 2.5% of the bid price to be subtracted from the bid of each bidder that is a veteran or a veteran business. When a contract for supplies, services, or professional services is to be awarded through a request for competitive sealed proposals, the bill requires that one of the evaluation factors stated in the request is whether the offeror is a veteran or a veteran business. The relative weight assigned to the offeror's status as a veteran or as a veteran business is 2.5%. The bill defines "veteran" to mean a person who is a resident of the state of Colorado, who was separated under honorable conditions, and who, other than for training purposes, served in any branch of the armed forces of the United States, including, without limitation, service in the armed forces reserve or National Guard, and "veteran business" to mean a continuing independent, for-profit business located in the state in which one or more veterans hold an ownership interest of at least 51%. The bill requires any person that requests a veterans' preference to complete an application for the purpose of certifying the person's status as a veteran or a veteran business. Upon the satisfaction of the department of personnel (department) that the person is entitled to the preference, the department is required to issue the person a distinctive identification number that, when submitted as part of a bid, offer, or other purchasing documents, entitles the person to the preference. Any person who has obtained the necessary certification is required to notify the department within 30 days after the occurrence of any event that affects the person's ability to qualify as a veteran business, including, without limitation, a change in the ownership of the business. If the department determines that a person that received a preference no longer satisfies the requirements applicable to a veteran business at any time during the pendency of the contract, the executive director of the department (executive director) may reject the bid or offer submitted by the person or assess a civil penalty against the person. The department is required to revoke the certification of a veteran business for a period of not less than 12 months upon making a determination that the business has failed to notify the department of a change in the status of the business. During the 12-month revocation period, a veteran business whose certification has been revoked may submit a bid or offer on a state contract but is not eligible for the preference. The bill specifies the manner in which certification may be restored after the completion of the revocation period. The bill specifies penalties that are applicable if the department determines that a person has made a material misrepresentation or otherwise committed a fraudulent act in obtaining a veterans' preference. Any person against whom the department has imposed a sanction may apply to the executive director for a review of the decision. The executive director or the executive director's designee has the authority to promulgate rules to implement the veterans' preference. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 24-92-102, amend (6) as follows: 24-92-102. Definitions. As used in this article, unless the context otherwise requires: (6) "Low responsible bidder" means any contractor who has bid in compliance with the invitation to bid and within the requirements of the plans and specifications for a public project, who is the low bidder after any preferences allowed pursuant to this article have been applied, and who has furnished bonds or their equivalent as required by law. SECTION 2. In Colorado Revised Statutes, add 24-92-103.5 as follows: 24-92-103.5. Preferences for contractors that employ Colorado residents - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Apprenticeship training program" means a program that is registered with the United States department of labor, office of apprenticeship and training. (b) "Colorado resident" means an individual whose domicile is in Colorado. (c) "Domicile" means an individual's true, fixed, and permanent home and place of habitation. It is the place where he or she intends to remain and to which he or she expects to return when he or she leaves without intending to establish a new domicile elsewhere. (d) "Health care benefits" means a health care plan provided by an employer to an employee that conforms to all requirements of federal law and regulations including, but not limited to, the "Patient Protection and Affordable Care Act", Pub.L. 111-148, as amended by the "Health Care and Education Reconciliation Act of 2010", Pub.L. 111-152, and as may be further amended, and its implementing regulations. (e) "Retirement benefits" means a pension plan or other retirement plan provided by an employer to an employee that conforms to all requirements of federal law and regulations, including, but not limited to, the "Employee Retirement Income Security Act of 1974", Pub.L. 93-406, as amended, and its implementing regulations, and that does not require a greater monetary contribution from an employee than it does from the employer. (2) An agency of government that issues an invitation for bids on or after July 1, 2012, for a construction contract for a public project for which appropriation or expenditure of moneys is reasonably expected to exceed five hundred thousand dollars in the aggregate shall provide one or more preferences to a contractor that responds to the invitation for bids as follows: (a) The agency shall subtract an amount equal to three percent of the bid price from the bid of each contractor that certifies that at least ninety percent of the employees who will perform the requirements of the contract are Colorado residents; (b) For a contractor that is allowed a preference pursuant to paragraph (a) of this subsection (2), the agency shall subtract an additional amount equal to one percent of the bid price from the contractor's bid if the contractor certifies that it offers health care benefits and retirement benefits to all of the employees who will perform the requirements of the contract; and (c) For a contractor that is allowed a preference pursuant to paragraph (a) of this subsection (2), the agency shall subtract an additional amount equal to one percent of the bid price from the contractor's bid if the contractor certifies that the employees who will perform the requirements of the contract have access to an apprenticeship training program. (3) A noncompliant bidder is not eligible for the preferences allowed pursuant to subsection (2) of this section. A contractor may not use said preferences to satisfy any applicable minimum requirements of a contract. (4) A contractor that seeks to have a preference specified in subsection (2) of this section allowed for a bid shall certify its eligibility for the preference to the agency of government that issued the invitation for bids. The agency may rely on the certification but may also require the contractor to submit substantiating documentation or other information that will enable the agency to verify that the contractor is eligible for the preference. (5) The executive director of the department of personnel shall promulgate rules for the administration of this section, including a process for a contractor to certify its eligibility for a preference allowed pursuant to subsection (2) of this section and a process by which an agency of government may verify such a certification. The executive director shall promulgate rules pursuant to the "State Administrative Procedure Act", article 4 of this title. SECTION 3. In Colorado Revised Statutes, 24-93-106, amend (4) as follows: 24-93-106. Requests for proposals - evaluation and award of integrated project delivery contracts. (4) After obtaining and evaluating proposals according to the criteria and procedures set forth in the request for proposals in accordance with the requirements specified in subsection (1) of this section and after applying any preference allowed pursuant to section 24-93-109, an agency may accept the proposal that, in its estimation, represents the best value to the agency. Acceptance of a proposal shall be by written notice to the participating entity that submitted the accepted proposal. SECTION 4. In Colorado Revised Statues, add 24-93-109 as follows: 24-93-109. Preferences for participating entities that employ Colorado residents - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Apprenticeship training program" means a program that is registered with the United States department of labor, office of apprenticeship and training. (b) "Colorado resident" means an individual whose domicile is in Colorado. (c) "Domicile" means an individual's true, fixed, and permanent home and place of habitation. It is the place where he or she intends to remain and to which he or she expects to return when he or she leaves without intending to establish a new domicile elsewhere. (d) "Health care benefits" means a health care plan provided by an employer to an employee that conforms to all requirements of federal law and regulations including, but not limited to, the "Patient Protection and Affordable Care Act", Pub.L. 111-148, as amended by the "Health Care and Education Reconciliation Act of 2010", Pub.L. 111-152, and as may be further amended, and its implementing regulations. (e) "Retirement benefits" means a pension plan or other retirement plan provided by an employer to an employee that conforms to all requirements of federal law and regulations, including, but not limited to, the "Employee Retirement Income Security Act of 1974", Pub.L. 93-406, as amended, and its implementing regulations, and that does not require a greater monetary contribution from the employee than it does from the employer. (2) An agency that issues a request for proposals on or after July 1, 2012, for an IPD contract for a public project for which appropriation or expenditure of moneys is reasonably expected to exceed five hundred thousand dollars in the aggregate shall provide one or more preferences to a participating entity that responds to the request for proposals as follows: (a) The agency shall assign a relative weight of three percent to a participating entity that certifies that at least ninety percent of the employees who will perform the requirements of the contract are Colorado residents; (b) For a participating entity that is allowed a preference pursuant to paragraph (a) of this subsection (2), the agency shall assign a relative weight of an additional one percent to the participating entity if the participating entity certifies that it offers health care benefits and retirement benefits to all of the employees who will perform the requirements of the contract; and (c) For a participating entity that is allowed a preference pursuant to paragraph (a) of this subsection (2), the agency shall assign a relative weight of an additional one percent to the participating entity if the participating entity certifies that the employees who will perform the requirements of the contract have access to an apprenticeship training program. (3) A noncompliant participating entity is not eligible for the preferences allowed pursuant to subsection (2) of this section. A participating entity may not use said preferences to satisfy any applicable minimum requirements of a contract. (4) A participating entity that seeks to have a preference specified in subsection (2) of this section allowed for a bid shall certify its eligibility for the preference to the agency that issued the request for proposals. The agency may rely on the certification but may also require the participating entity to submit substantiating documentation or other information that will enable the agency to verify that the participating entity is eligible for the preference. (5) The executive director of the department of personnel shall promulgate rules for the administration of this section, including a process for a participating entity to certify its eligibility for a preference allowed pursuant to subsection (2) of this section and a process by which an agency of government may verify such a certification. The executive director shall promulgate rules pursuant to the "State Administrative Procedure Act", article 4 of this title. SECTION 5. In Colorado Revised Statutes, 24-103-101, amend (3) as follows: 24-103-101. Definitions. As used in this article, unless the context otherwise requires: (3) "Low responsible bidder" means any person who has bid in compliance with the invitation to bid and within the requirements of the plans and specifications for a public contract who is the low bidder after any preferences allowed pursuant to this article have been applied and who has furnished bonds or their equivalent if required by law. SECTION 6. In Colorado Revised Statutes, add 24-103-210 and 24-103-211 as follows: 24-103-210. Preferences for persons that employ Colorado residents - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Colorado resident" means an individual whose domicile is in Colorado. (b) "Domicile" means an individual's true, fixed, and permanent home and place of habitation. It is the place where he or she intends to remain and to which he or she expects to return when he or she leaves without intending to establish a new domicile elsewhere. (c) "Health care benefits" means a health care plan provided by an employer to an employee that conforms to all requirements of federal law and regulations including, but not limited to, the "Patient Protection and Affordable Care Act", Pub.L. 111-148, as amended by the "Health Care and Education Reconciliation Act of 2010", Pub.L. 111-152, and as may be further amended, and its implementing regulations. (d) "Retirement benefits" means a pension plan or other retirement plan provided by an employer to an employee that conforms to all requirements of federal law and regulations, including, but not limited to, the "Employee Retirement Income Security Act of 1974", Pub.L. 93-406, as amended, and its implementing regulations, and that does not require a greater monetary contribution from the employee than it does from the employer. (2) A governmental body that issues an invitation for bids for a services contract on or after July 1, 2012, for which appropriation or expenditure of moneys is reasonably expected to exceed five hundred thousand dollars in the aggregate shall provide one or more preferences to a person that responds to the invitation for bids as follows: (a) The governmental body shall subtract three percent of the bid price from the bid of each person that certifies that at least ninety percent of the employees who will perform the requirements of the contract are Colorado residents; and (b) For a person that is allowed a preference pursuant to paragraph (a) of this subsection (2), the governmental body shall subtract an additional amount equal to two percent of the bid price from the person's bid if the person certifies that it offers health care benefits and retirement benefits to all of the employees who will perform the requirements of the contract. (3) A governmental body that issues a request for proposals for a services contract on or after July 1, 2012, for which appropriation or expenditure of moneys is reasonably expected to exceed five hundred thousand dollars in the aggregate shall provide one or more preferences to a person that responds to the request for proposals as follows: (a) The governmental body shall assign a relative weight of three percent to a person that certifies that at least ninety percent of the employees who will perform the requirements of the contract are Colorado residents; and (b) For a person that is allowed a preference pursuant to paragraph (a) of this subsection (3), the governmental body shall assign a relative weight of an additional two percent to the person if the person certifies that it offers health care benefits and retirement benefits to all of the employees who will perform the requirements of the contract. (4) A noncompliant bidder or offeror is not eligible for the preferences allowed pursuant to subsections (2) and (3) of this section. A bidder or offeror may not use said preferences to satisfy any applicable minimum requirements of a contract. (5) A person that seeks to have a preference specified in subsection (2) or (3) of this section allowed for a bid or offer shall certify its eligibility for the preference to the governmental body. The governmental body may rely on the certification but may also require the person to submit substantiating documentation or other information that the governmental body needs to verify that the person is eligible for the preference. (6) The executive director shall promulgate rules for the administration of this section, including a process for a person to certify its eligibility for a preference allowed pursuant to subsection (2) or (3) of this section and a process by which a governmental body may verify such a certification. The executive director shall promulgate rules pursuant to the "State Administrative Procedure Act", article 4 of this title. 24-103-211. Veterans' preference - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Veteran" means a person who is a resident of the state of Colorado, who was separated under honorable conditions, and who, other than for training purposes, served in any branch of the armed forces of the United States, including, without limitation, service in the armed forces reserve or National Guard. (b) "Veteran business" means a continuing independent, for-profit business located in the state in which one or more veterans hold an ownership interest of at least fifty-one percent. (2) When a contract for supplies or services is to be awarded though competitive sealed bidding pursuant to section 24-103-202 or through competitive sealed best value bidding pursuant to section 24-103-202.3, an amount equal to two and one-half percent of the bid price shall be subtracted from the bid of each bidder that is a veteran or a veteran business. (3) When a contract for supplies, services, or professional services is to be awarded through a request for competitive sealed proposals pursuant to section 24-103-203, one of the evaluation factors stated in the request shall be whether the offeror is a veteran or a veteran business. The relative weight assigned to the offeror's status as a veteran or as a veteran business shall be two and one-half percent. (4) (a) Any person that requests the preference made available by this section for a veteran or a veteran business shall complete an application on a form prepared by the department for the purpose of requesting certification of the person's status as a veteran or a veteran business. The person shall submit the form to the department prior to the awarding of any contract to the person in which the person desires to be given a preference under subsection (2) or (3) of this section. Upon the department's satisfaction that the person is entitled to the preference, the department shall issue the person a distinctive identification number that shall be valid until it may be revoked in accordance with paragraph (c) of this subsection (4) and which, when submitted as part of a bid, offer, or other purchasing documents, entitles the person to the preference under subsection (2) or (3) of this section. The department may require the applicant to provide such additional documentation as will satisfy the department that the applicant is a veteran or a veteran business. (b) Any person who has obtained certification under paragraph (a) of this subsection (4) shall notify the department within thirty days after the occurrence of any event that affects the person's ability to satisfy the requirements of paragraph (b) of subsection (1) of this section, including, without limitation, a change in the ownership of the business. (c) (I) If the department determines that a person that received a preference under subsection (2) or (3) of this section no longer satisfies the requirements of paragraph (b) of subsection (1) of this section at any time during the pendency of a contract for which the preference was obtained, the executive director may reject the bid or offer submitted by the person or assess a civil penalty against the person in an amount that does not exceed five percent of the person's bid or offer on the contract. (II) The department shall revoke the certification of a veteran business for a period of not less than twelve months upon making a determination that the business has violated the requirements of paragraph (b) of this subsection (4). During the twelve-month revocation period, a veteran business whose certification has been revoked may submit a bid or offer on a state contract but is not eligible for the preference made available under subsection (2) or (3) of this section. (III) A veteran business whose certification has been revoked in accordance with the provisions of subparagraph (II) of this paragraph (c) may apply for certification at the conclusion of the twelve-month revocation period by complying with the requirements applicable to the initial certification. (d) (I) If the department determines that a person has made a material misrepresentation or otherwise committed a fraudulent act in obtaining the preference created in subsection (2) or (3) of this section, the person shall thereafter be permanently prohibited from: (A) Obtaining or receiving the preference created in subsection (2) or (3) of this section; or (B) Submitting a bid or offer in connection with a state contract. (II) Any person against whom the department has imposed a sanction specified in subparagraph (I) of this paragraph (d) may apply to the executive director for a review of the decision imposing said sanction in accordance with review procedures promulgated by the department. (5) The executive director or the executive director's designee may promulgate such rules as in the judgment of the executive director are necessary to achieve the effective implementation of this section. Such rules shall be promulgated in accordance with the "State Administrative Procedure Act", article 4 of this title. SECTION 7. Effective date - applicability. This act takes effect July 1, 2012, and applies to invitations for bids or requests for proposals issued on or after said date. SECTION 8. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.