SF 1126

as introduced - 87th Legislature (2011 - 2012) Posted on 03/22/2012 04:25pm

A bill for an act
relating to transportation; modifying provisions relating to contract bid
preferences for highway construction projects; making clarifying changes;
amending Minnesota Statutes 2010, section 161.321.

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

Section 1.

Minnesota Statutes 2010, section 161.321, is amended to read:

161.321 SMALL BUSINESS CONTRACTS.

Subdivision 1.

Definitions.

For purposes of this section the following terms have
the meanings given them, except where the context clearly indicates a different meaning is
intended.

(a) "Award" means the granting of a contract in accordance with all applicable laws
and rules governing competitive bidding except as otherwise provided in this section.

(b) "Contract" means an agreement entered into between a business entity and the
state of Minnesota for the construction of transportation improvements.

(c) "Subcontractor" means a business entity which enters into a legally binding
agreement with another business entity which is a party to a contract as defined in
paragraph (b).

(d) "Targeted group business" means a business designated under section 16C.16,
subdivision 5.

(e) "Veteran-owned small business" means a business designated under section
16C.16, subdivision 6a.

new text begin Subd. 1a. new text end

new text begin Legislative findings. new text end

new text begin The legislature finds as follows:
new text end

new text begin (1) at the time of these findings, businesses that are operated and majority-owned by
nonminority women, by persons with any substantial physical disability, or by members of
a specific minority group are underutilized in Minnesota highway construction contracts;
new text end

new text begin (2) at the time of these findings, evidence demonstrates that race-neutral measures
are ineffective to correct the impact of past discrimination that exists in highway
construction and must be supplemented with race- and gender-conscious measures; and
new text end

new text begin (3) the state has a compelling interest to remedy the effects of past or present
discrimination in the Minnesota highway construction industry through the implementation
of a targeted group business program that meets state and federal constitutional guidelines.
new text end

Subd. 2.

Small business set-asides new text begin ; procurement and construction contract
preferences new text end .

(a) The commissioner may award up to a six percent preference in the
amount bid for specified construction work to small targeted group businesses and
veteran-owned small businesses.

(b) The commissioner may designate a contract for construction work for award only
to small targeted group businesses if the commissioner determines that at least three small
targeted group businesses are likely to bid. The commissioner may designate a contract for
construction work for award only to veteran-owned small businesses if the commissioner
determines that at least three veteran-owned small businesses are likely to bid.

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

deleted text begin (d) deleted text end The commissioner may award up to a four percent preference in the amount
bid deleted text begin on procurement deleted text end new text begin for specified construction work new text end to small businesses located in an
economically disadvantaged area as defined in section 16C.16, subdivision 7.

new text begin Subd. 2a. new text end

new text begin Subcontracting goals. new text end

new text begin (a) The commissioner, as a condition of awarding
a construction contract, may set goals that require the prime contractor to subcontract
portions of the contract to small targeted group businesses and veteran-owned small
businesses. Prime contractors must demonstrate good faith efforts to meet the project
goals. The commissioner shall establish a procedure for granting waivers from the
subcontracting requirement when either qualified small targeted group businesses or
veteran-owned small businesses, or both, are not reasonably available. The commissioner
may establish (1) financial incentives for prime contractors who exceed the goals set for
the use of subcontractors under this subdivision and (2) sanctions for prime contractors
who fail to make good faith efforts to meet the goals set under this subdivision.
new text end

new text begin (b) The small targeted group business subcontracting requirements of this
subdivision do not apply to prime contractors who are small targeted group businesses.
The veteran-owned small business subcontracting requirements of this subdivision do not
apply to prime contractors who are veteran-owned small businesses.
new text end

Subd. 3.

new text begin Subcontract new text end awards to small businesses.

At least 75 percent of
subcontracts awarded to small targeted group businesses must be performed by the
business to which the subcontract is awarded or another small targeted group business.
At least 75 percent of subcontracts awarded to veteran-owned small businesses must be
performed by the business to which the subcontract is awarded or another veteran-owned
small business.

Subd. 4.

new text begin Contract new text end awards, limitations.

Contracts awarded pursuant to this
section are subject to all limitations contained in rules adopted by the commissioner
of administration.

new text begin Subd. 4a. new text end

new text begin Limited duration and reevaluation. new text end

new text begin The commissioner shall cooperate
with the commissioner of administration to periodically reevaluate the targeted group
businesses to determine that there is a statistical disparity between the percentage of
construction contracts awarded to businesses owned by targeted group members and the
representation of businesses owned by targeted group members among all businesses in
the state in the construction category. The commissioner of administration shall designate
targeted groups pursuant to section 16C.16, subdivision 5.
new text end

Subd. 5.

Recourse to other businesses.

If the commissioner is unable to award
a contract pursuant to the provisions of subdivisions 2 deleted text begin and 3 deleted text end new text begin to 4a new text end , the award may be
placed pursuant to the normal solicitation and award provisions set forth in this chapter
and chapter 16C.

Subd. 6.

Rules.

The rules adopted by the commissioner of administration to define
small businesses and to set time and other eligibility requirements for participation in
programs under sections 16C.16 to 16C.19 apply to this section. The commissioner may
promulgate other rules necessary to carry out this section.

Subd. 7.

Noncompetitive bids.

The commissioner is encouraged to purchase
from small targeted group businesses and veteran-owned small businesses designated
under section 16C.16 when making purchases that are not subject to competitive bidding
procedures.

Subd. 8.

Report by commissioner.

The commissioner deleted text begin of transportation deleted text end shall
report to the commissioner of administration on compliance with this section. The
information must be reported at the time and in the manner requested by the commissioner new text begin
of administration new text end .