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Minnesota Legislature

Office of the Revisor of Statutes

HF 1106

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 03/04/2015 01:42pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/19/2015
1st Engrossment Posted on 03/04/2015

Current Version - 1st Engrossment

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A bill for an act
relating to state government; requiring the commissioner of administration to
ensure that service-disabled, veteran-owned businesses receive a percentage of
state procurement; providing bid preferences; proposing coding for new law
in Minnesota Statutes, chapter 16C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [16C.165] DESIGNATION OF PROCUREMENTS FROM
SERVICE-DISABLED, VETERAN-OWNED BUSINESS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given them, unless the context clearly indicates otherwise.
new text end

new text begin (b) "Service-disabled, veteran-owned business" means any entity, including a
sole proprietorship, partnership, limited liability partnership, limited liability company,
or corporation, including a not-for-profit corporation that has been certified by the
commissioner as an entity, that:
new text end

new text begin (1) is a resident vendor;
new text end

new text begin (2) does not exercise a controlling influence on an industry in its field of operation;
new text end

new text begin (3) is at least 51 percent owned by one or more service-disabled veterans and such
ownership is not limited by conditions precedent, conditions subsequent, executory
agreements, voting trusts, restriction on or assignments of voting rights or other
arrangements of voting rights, or other arrangements causing or potentially causing
ownership benefits to go to another entity;
new text end

new text begin (4) has and exercises the authority to control the day-to-day business decisions
of the entity, and such control means that service-disabled, veteran-owned business
enterprises or their managers have expertise specifically in the business's field of operation
in controlling the overall destiny and in controlling the day-to-day operations of the
business enterprise; and
new text end

new text begin (5) is a "small business," as defined in rules adopted for purposes of section 16C.16.
new text end

new text begin (c) "Service-disabled veteran" means a veteran as defined in section 197.447, who
has received a compensation rating of ten percent or greater from the United States
Department of Veterans Affairs or from the United States Department of Defense because
of a service-connected disability incurred in the line of duty.
new text end

new text begin Subd. 2. new text end

new text begin Service-disabled, veteran-owned business certification. new text end

new text begin The
commissioner shall certify a business as a service-disabled, veteran-owned business if
the business meets the qualifications in subdivision 1, paragraph (b), upon request of the
business. After certification, the business must report any change in ownership structure
or control that would impact the eligibility of the business under this section. If the
commissioner finds the business is no longer eligible, it shall be uncertified.
new text end

new text begin Subd. 3. new text end

new text begin Service-disabled, veteran-owned business procurements. new text end

new text begin The
commissioner must solicit and encourage service-disabled, veteran-owned businesses
to submit responses or bids when the commissioner is entering into master contracts.
If cost-effective, when entering into a master contract, the commissioner must
attempt to negotiate contract terms that allow agencies the option of purchasing from
service-disabled, veteran-owned businesses, particularly service-disabled, veteran-owned
businesses that are geographically proximate to the entity making the purchase.
new text end

new text begin Subd. 4. new text end

new text begin Professional or technical procurements. new text end

new text begin Every state agency must for
each fiscal year designate for awarding to service-disabled, veteran-owned businesses at
least six percent of the value of anticipated procurements of that agency for professional
or technical services. The set-aside under this subdivision is in addition to that provided
by section 16C.16, but must otherwise comply with section 16C.08.
new text end

new text begin Subd. 5. new text end

new text begin Purchasing methods. new text end

new text begin (a) The commissioner shall award up to a six
percent preference in the amount bid for specified goods or services to service-disabled,
veteran-owned businesses.
new text end

new text begin (b) The commissioner may grant a partial or total waiver, but shall not grant any
automatic waivers, from the preference requirement for the purchase of goods or services
for award in consideration of the following factors:
new text end

new text begin (1) the number and types of certified service-disabled, veteran-owned business
enterprises available to perform any work under the contract;
new text end

new text begin (2) the total dollar value of the state contract;
new text end

new text begin (3) the contract scope of work to be performed;
new text end

new text begin (4) the project size;
new text end

new text begin (5) the project term;
new text end

new text begin (6) the availability of other business enterprises qualified to do the work to be
performed; and
new text end

new text begin (7) the extent to which the contractor's own actions, including but not limited to
any failure by the contractor to discharge the contractor's duties pursuant to this section,
contributed to contractor's inability to meet the maximum feasible portion of the contract
goals.
new text end

new text begin (c) The commissioner, as a condition of awarding a construction contract or
approving a contract for professional or technical services, may set goals that require the
prime contractor to subcontract a portion of the contract to service-disabled, veteran-owned
businesses. The commissioner must establish a procedure for granting waivers from the
subcontracting requirement when qualified service-disabled, veteran-owned businesses are
not reasonably available. The commissioner may establish financial incentives for prime
contractors who exceed the goals for use of service-disabled, veteran-owned business
subcontractors and financial penalties for prime contractors who fail to meet the goals
under this paragraph. The subcontracting requirements of this paragraph do not apply to
prime contractors who are service-disabled, veteran-owned businesses.
new text end

new text begin Subd. 6. new text end

new text begin Service-disabled, veteran-owned businesses. new text end

new text begin The purpose of this
designation is to facilitate the transition of service-disabled veterans from military to
civilian life and to help compensate veterans for their sacrifices, including but not limited
to their sacrifice of health and time, to the state and nation during their military service, as
well as to enhance economic development within Minnesota.
new text end

new text begin Subd. 7. new text end

new text begin Surety bonds. new text end

new text begin Surety bonds guaranteed by the federal Small Business
Administration and second party bonds are acceptable security for a construction award
under this section. "Second party bond" means a bond that designates as principal or
guarantor, or both, a person or persons in addition to the person to whom the contract is
proposed for award.
new text end

new text begin Subd. 8. new text end

new text begin Limits. new text end

new text begin At least 75 percent of the value of the subcontracts awarded
to service-disabled, veteran-owned businesses under this section must be performed
by the business to which the subcontract is awarded or by another service-disabled,
veteran-owned business.
new text end

new text begin Subd. 9. new text end

new text begin Procurement procedures. new text end

new text begin All laws and rules pertaining to solicitations,
bid evaluations, contract awards, and other procurement matters apply equally to
procurements designated for service-disabled, veteran-owned businesses. In the event of
conflict with other law, this section shall govern.
new text end

new text begin Subd. 10. new text end

new text begin Applicability. new text end

new text begin This section does not apply to construction contracts or
contracts for professional or technical services under section 16C.08, that are financed in
whole or in part with federal funds and that are subject to federal disadvantaged business
enterprise regulations.
new text end