SF 1597

1st Unofficial Engrossment - 87th Legislature (2011 - 2012)

Posted on 04/23/2012 12:43 p.m.

1.1A bill for an act 1.2relating to veterans; modifying certain Department of Transportation contracting 1.3requirements; authorizing counties to provide a bid preference for awarding 1.4contracts to veteran-owned small businesses;amending Minnesota Statutes 1.52010, section 161.321; proposing coding for new law in Minnesota Statutes, 1.6chapter 375. 1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.8ARTICLE 1 1.9DEPARTMENT OF TRANSPORTATION CONTRACTING 1.10    Section 1. Minnesota Statutes 2010, section 161.321, is amended to read: 1.11161.321 SMALL BUSINESS CONTRACTS. 1.12    Subdivision 1. Definitions. For purposes of this section the following terms have 1.13the meanings given them, except where the context clearly indicates a different meaning is 1.14intended. 1.15(a) "Award" means the granting of a contract in accordance with all applicable laws 1.16and rules governing competitive bidding except as otherwise provided in this section. 1.17(b) "Contract" means an agreement entered into between a business entity and the 1.18state of Minnesota for the construction of transportation improvements. 1.19(c) "Subcontractor" means a business entity which enters into a legally binding 1.20agreement with another business entity which is a party to a contract as defined in 1.21paragraph (b). 1.22(d) "Targeted group business" means a business designated under section 16C.16, 1.23subdivision 5 . 2.1(e) "Veteran-owned small business" means a business designated under section 2.216C.16, subdivision 6a . 2.3    Subd. 2. Small new text begin targeted group business, small new text end business set-asides new text begin ; contract new text end 2.4 new text begin preferences new text end . (a) The commissioner may award up to a six percent preference in the 2.5amount bid for specified construction work to small targeted group businesses and 2.6veteran-owned small businesses. 2.7(b) The commissioner may designate a contract for construction work for award only 2.8to small targeted group businesses if the commissioner determines that at least three small 2.9targeted group businesses are likely to bid. The commissioner may designate a contract for 2.10construction work for award only to veteran-owned small businesses if the commissioner 2.11determines that at least three veteran-owned small businesses are likely to bid. 2.12(c) The commissioner, as a condition of awarding a construction contract, may 2.13set goals that require the prime contractor to subcontract a portion of the contract to 2.14small targeted group businesses and veteran-owned small businesses. The commissioner 2.15must establish a procedure for granting waivers from the subcontracting requirement 2.16when qualified small targeted group businesses and veteran-owned small businesses 2.17are not reasonably available. The commissioner may establish financial incentives for 2.18prime contractors who exceed the goals for use of subcontractors and financial penalties 2.19for prime contractors who fail to meet goals under this paragraph. The subcontracting 2.20requirements of this paragraph do not apply to prime contractors who are small targeted 2.21group businesses or veteran-owned small businesses. 2.22(d) new text begin (c) new text end The commissioner may award up to a four percent preference in the amount 2.23bid on procurement new text begin for specified construction work new text end to small businesses located in an 2.24economically disadvantaged area as defined in section 16C.16, subdivision 7. 2.25     new text begin Subd. 2a. new text end new text begin Small targeted group business; subcontracting goals. new text end new text begin (a) The new text end 2.26 new text begin commissioner, as a condition of awarding a construction contract, may set goals that new text end 2.27 new text begin require the prime contractor to subcontract portions of the contract to small targeted new text end 2.28 new text begin group businesses. Prime contractors must demonstrate good faith efforts to meet the new text end 2.29 new text begin project goals. The commissioner shall establish a procedure for granting waivers from new text end 2.30 new text begin the subcontracting requirement when qualified small targeted group businesses are not new text end 2.31 new text begin reasonably available. The commissioner may establish (1) financial incentives for prime new text end 2.32 new text begin contractors who exceed the goals set for the use of subcontractors under this subdivision; new text end 2.33 new text begin and (2) sanctions for prime contractors who fail to make good faith efforts to meet the new text end 2.34 new text begin goals set under this subdivision. new text end 2.35 new text begin (b) The small targeted group business subcontracting requirements of this new text end 2.36 new text begin subdivision do not apply to prime contractors who are small targeted group businesses. new text end 3.1     new text begin Subd. 2b. new text end new text begin Veteran-owned small business; contract preferences. new text end new text begin (a) The new text end 3.2 new text begin commissioner may award up to a six percent preference in the amount bid for specified new text end 3.3 new text begin construction work to veteran-owned small businesses, except when prohibited by the new text end 3.4 new text begin federal government as a condition of receiving federal funds. When a bid preference is new text end 3.5 new text begin provided under this subdivision, the percentage of preference in bid amount may not be new text end 3.6 new text begin less than the percentage of bid preference provided to any small targeted group business new text end 3.7 new text begin under subdivision 2. new text end 3.8 new text begin (b) When a bid preference is provided under this subdivision, the commissioner new text end 3.9 new text begin must be as inclusive as possible in specifying contracts for construction work, as well new text end 3.10 new text begin as for construction-related professional and technical services, available under this bid new text end 3.11 new text begin preference program for veteran-owned small businesses. The term "construction" must be new text end 3.12 new text begin given broad meaning for purposes of specifying and letting contracts for veteran-owned new text end 3.13 new text begin small businesses and must include, but is not limited to, preplanning, planning, and all new text end 3.14 new text begin other construction-related professional and technical services. new text end 3.15 new text begin (c) When a bid preference is provided under this subdivision, the commissioner new text end 3.16 new text begin must strive to ensure that contracts will be awarded on a proportional basis with contracts new text end 3.17 new text begin awarded under subdivision 2. new text end 3.18 new text begin (d) The commissioner may designate a contract for construction work for award new text end 3.19 new text begin only to veteran-owned small businesses, if the commissioner determines that at least three new text end 3.20 new text begin veteran-owned small businesses are likely to bid. new text end 3.21     new text begin Subd. 2c. new text end new text begin Veteran-owned small business; subcontracting goals. new text end new text begin (a) The new text end 3.22 new text begin commissioner, as a condition of awarding a construction contract, may set goals that new text end 3.23 new text begin require the prime contractor to subcontract portions of the contract to veteran-owned small new text end 3.24 new text begin businesses, except when prohibited by federal law or rule as a condition of receiving new text end 3.25 new text begin federal funds. Prime contractors must demonstrate good faith efforts to meet the project new text end 3.26 new text begin goals. The commissioner shall establish a procedure for granting waivers from the new text end 3.27 new text begin subcontracting requirement when qualified veteran-owned small businesses are not new text end 3.28 new text begin reasonably available. The commissioner may establish (1) financial incentives for prime new text end 3.29 new text begin contractors who exceed the goals set for the use of subcontractors under this subdivision; new text end 3.30 new text begin and (2) sanctions for prime contractors who have not been granted a waiver and fail new text end 3.31 new text begin to meet goals set under this subdivision. new text end 3.32 new text begin (b) The subcontracting requirements of this subdivision do not apply to prime new text end 3.33 new text begin contractors who are veteran-owned small businesses. new text end 3.34    Subd. 3. new text begin Small targeted group business subcontract new text end awards to small businesses. 3.35At least 75 percent of subcontracts awarded to small targeted group businesses must be 4.1performed by the business to which the subcontract is awarded or another small targeted 4.2group business. 4.3     new text begin Subd. 3a. new text end new text begin Veteran-owned small business; subcontract awards. new text end At least 75 4.4percent of subcontracts awarded to veteran-owned small businesses must be performed by 4.5the business to which the subcontract is awarded or another veteran-owned small business. 4.6    Subd. 4. new text begin Contract new text end awards, limitations. Contracts awarded pursuant to this 4.7section are subject to all limitations contained in rules adopted by the commissioner 4.8of administration. 4.9     new text begin Subd. 4a. new text end new text begin Small targeted group business; limited duration and reevaluation. new text end 4.10 new text begin The commissioner shall cooperate with the commissioner of administration to periodically new text end 4.11 new text begin reevaluate the targeted group businesses to determine whether there is a statistical disparity new text end 4.12 new text begin between the percentage of construction contracts awarded to businesses owned by targeted new text end 4.13 new text begin group members and the representation of businesses owned by targeted group members new text end 4.14 new text begin among all businesses in the state in the construction category. The commissioner of new text end 4.15 new text begin administration shall designate targeted groups pursuant to section 16C.16, subdivision 5. new text end 4.16    Subd. 5. Recourse to other businesses. If the commissioner is unable to award 4.17a contract pursuant to the provisions of subdivisions 2 and 3 new text begin to 4a new text end , the award may be 4.18placed pursuant to the normal solicitation and award provisions set forth in this chapter 4.19and chapter 16C. 4.20    Subd. 6. Rules new text begin ; eligibility new text end . new text begin (a) new text end The rules adopted by the commissioner of 4.21administration to define small businesses and to set time and other eligibility requirements 4.22for participation in programs under sections 16C.16 to 16C.19 apply to this section. The 4.23commissioner may promulgate other rules necessary to carry out this section. 4.24 new text begin (b) In addition to other eligibility requirements, a small targeted group business or new text end 4.25 new text begin veteran-owned small business is eligible for the bid preferences under this section only for new text end 4.26 new text begin eight years following the latest of: new text end 4.27 new text begin (1) the effective date of this section; new text end 4.28 new text begin (2) for a targeted group business, the date of initial certification by the commissioner new text end 4.29 new text begin of administration, as provided under section 16C.19; new text end 4.30 new text begin (3) for a veteran-owned small business, the date of initial certification by the United new text end 4.31 new text begin States Department of Veterans Affairs, as provided under section 16C.19, paragraph (d); or new text end 4.32 new text begin (4) for a veteran-owned small business, the release or discharge of any one of the new text end 4.33 new text begin owners from military active service, as defined in section 190.05, subdivision 5, lasting for new text end 4.34 new text begin a period of 179 days or longer. new text end 4.35    Subd. 7. Noncompetitive bids. The commissioner is encouraged to purchase 4.36from small targeted group businesses and veteran-owned small businesses designated 5.1under section 16C.16 when making purchases that are not subject to competitive bidding 5.2procedures. 5.3    Subd. 8. Report by commissioner new text begin Reporting new text end . new text begin (a) new text end The commissioner of 5.4transportation shall report to the commissioner of administration on compliance with this 5.5section. The information must be reported at the time and in the manner requested by the 5.6commissioner new text begin of administration new text end . 5.7 new text begin (b) By February 1 of each even-numbered year, the commissioner of transportation new text end 5.8 new text begin shall submit a report to the chairs and ranking minority members of the legislative new text end 5.9 new text begin committees with jurisdiction over transportation policy and finance and veterans policy new text end 5.10 new text begin and finance concerning contract awards during the preceding biennium under this section. new text end 5.11 new text begin At a minimum, the report must include: new text end 5.12 new text begin (1) a summary of the program; new text end 5.13 new text begin (2) a review of the use of preferences for contracting during the preceding biennium, new text end 5.14 new text begin including frequency of establishment of a preference and frequency and amount of new text end 5.15 new text begin contract awards to: new text end 5.16 new text begin (i) small targeted group businesses; and new text end 5.17 new text begin (ii) veteran-owned small businesses; new text end 5.18 new text begin (3) a review of goals and good faith efforts to use small targeted group businesses new text end 5.19 new text begin and veteran-owned small businesses in subcontracts, including analysis of methods used new text end 5.20 new text begin for, and effectiveness of, good faith efforts; new text end 5.21 new text begin (4) a summary of any financial incentives used or sanctions imposed; new text end 5.22 new text begin (5) agency commentary on any perceived impediments, whether statutory, new text end 5.23 new text begin administrative, or otherwise, that may be limiting the participation of small targeted new text end 5.24 new text begin group businesses and veteran-owned small businesses in the agency's contract preference new text end 5.25 new text begin program; new text end 5.26 new text begin (6) information on each reevaluation under subdivision 4a, including details on the new text end 5.27 new text begin methodology for reevaluation; and new text end 5.28 new text begin (7) any recommendations for legislative or programmatic changes. new text end 5.29     new text begin Subd. 9. new text end new text begin Veteran-owned small business; purpose. new text end new text begin The purpose of the state new text end 5.30 new text begin contracting bid preference program for veteran-owned small businesses is to facilitate new text end 5.31 new text begin the healthy transition of veterans from military to civilian life, and to help compensate new text end 5.32 new text begin veterans for their sacrifices including, but not limited to, their sacrifice of health and new text end 5.33 new text begin time to the state and nation during their military service, as well as to enhance economic new text end 5.34 new text begin development within Minnesota. new text end 5.35 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 5.36 new text begin and applies to contracts let on or after July 1, 2012. new text end 6.1ARTICLE 2 6.2AUTHORIZING COUNTIES FOR BID PREFERENCE FOR 6.3VETERAN-OWNED SMALL BUSINESSES 6.4    Section 1. new text begin [375.771] VETERAN-OWNED SMALL BUSINESS CONTRACTS. new text end 6.5     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) The definitions in this subdivision apply to this new text end 6.6 new text begin section. new text end 6.7 new text begin (b) "Award" means the granting of a contract in accordance with all applicable laws new text end 6.8 new text begin and rules governing competitive bidding, except as otherwise provided in this section. new text end 6.9 new text begin (c) "Contract" means an agreement entered into between a business entity and the new text end 6.10 new text begin county for procurement of goods and services including both technical and nontechnical new text end 6.11 new text begin goods and services, printing, and construction. new text end 6.12 new text begin (d) "County board" or "board" has the meaning given in section 375.01. new text end 6.13 new text begin (e) "County purchasing department" has the meaning given in section 375.72. new text end 6.14 new text begin (f) "Director of purchasing" has the meaning given in section 375.74. new text end 6.15 new text begin (g) "Subcontractor" means a business entity that enters into a legally binding new text end 6.16 new text begin agreement with another business entity that is a party to a contract as defined in paragraph new text end 6.17 new text begin (c). new text end 6.18 new text begin (h) "Veteran" has the meaning given in section 197.447. new text end 6.19 new text begin (i) "Veteran-owned small business" means a business designated under section new text end 6.20 new text begin 16C.16, subdivision 6a. new text end 6.21     new text begin Subd. 2. new text end new text begin Policy; purpose; director. new text end new text begin (a) A county board may establish a program new text end 6.22 new text begin within the county in accordance with this section to provide a bid preference for new text end 6.23 new text begin awarding contracts to designated veteran-owned small businesses for the procurement of new text end 6.24 new text begin technical and nontechnical goods and services including, but not limited to, printing and new text end 6.25 new text begin construction, broadly defined to include all phases of the construction process. new text end 6.26 new text begin (b) The purpose of this program is to facilitate the transition of veterans from new text end 6.27 new text begin military to civilian life, and to help compensate veterans for their sacrifices including, but new text end 6.28 new text begin not limited to, their sacrifice of health and time to the community, state, and nation during new text end 6.29 new text begin their military service, as well as to enhance economic development throughout Minnesota. new text end 6.30 new text begin (c) The county board may direct the county director of purchasing, or other new text end 6.31 new text begin designated official within the county purchasing department, to administer this program in new text end 6.32 new text begin accordance with county policy established by the board. new text end 6.33     new text begin Subd. 3. new text end new text begin Small business set-asides. new text end new text begin (a) The county director of purchasing may new text end 6.34 new text begin award up to a six percent preference in the amount bid for procurement of goods and new text end 6.35 new text begin services including, but not limited to, technical and nontechnical goods and services, new text end 7.1 new text begin printing, and construction to veteran-owned small businesses having their principal place new text end 7.2 new text begin of business in Minnesota. new text end 7.3 new text begin (b) The board, as a condition of awarding a construction contract, may set goals that new text end 7.4 new text begin require the prime contractor to subcontract a portion of the contract to veteran-owned new text end 7.5 new text begin small businesses. The board must establish a procedure for granting waivers from the new text end 7.6 new text begin subcontracting requirement when qualified veteran-owned small businesses are not new text end 7.7 new text begin reasonably available. The board may establish financial incentives for prime contractors new text end 7.8 new text begin who exceed the goals for use of veteran-owned small business subcontractors and new text end 7.9 new text begin financial penalties for prime contractors who fail to meet goals under this paragraph. The new text end 7.10 new text begin subcontracting requirements of this paragraph do not apply to prime contractors who are new text end 7.11 new text begin veteran-owned small businesses. new text end 7.12     new text begin Subd. 4. new text end new text begin Awards to small businesses. new text end new text begin At least 75 percent of subcontracts awarded new text end 7.13 new text begin to veteran-owned small businesses must be performed by the business to which the new text end 7.14 new text begin subcontract is awarded or another veteran-owned small business. new text end 7.15     new text begin Subd. 5. new text end new text begin Awards, limitations. new text end new text begin Contracts awarded under this section are subject to new text end 7.16 new text begin all limitations adopted by the board. new text end 7.17     new text begin Subd. 6. new text end new text begin Recourse to other businesses. new text end new text begin If the director is unable to award a contract new text end 7.18 new text begin under subdivisions 3 and 4, the award may be placed under normal solicitation and award new text end 7.19 new text begin statutes and rules. new text end 7.20     new text begin Subd. 7. new text end new text begin Noncompetitive bids. new text end new text begin The board is encouraged to purchase from new text end 7.21 new text begin veteran-owned small businesses designated under section 16C.16, subdivision 6a, when new text end 7.22 new text begin making purchases that are not subject to competitive bidding procedures. new text end 7.23     new text begin Subd. 8. new text end new text begin Report to board. new text end new text begin At the request of the county board, the county treasurer new text end 7.24 new text begin shall report to the board on compliance with this section. The information must be new text end 7.25 new text begin reported at the time and in the manner requested by the board. new text end 7.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012, for contracts awarded new text end 7.27 new text begin by counties on or after that date. new text end