Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                        CHAPTER 296-H.F.No. 1109 
           An act relating to state government; concerning the 
          state procurement of goods and services from small 
          businesses; modifying geographical distribution 
          requirements and preference program limitations; 
          providing for a warranty for certain purchases; 
          amending Minnesota Statutes 1984, sections 16B.06, by 
          adding a subdivision; 16B.19, subdivisions 5, 6, 9, 
          and by adding a subdivision; 16B.21, subdivision 1; 
          16B.22; and 645.445, subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 16B.06, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [WARRANTIES.] A contract for the purchase of a 
product covered by a manufacturer's warranty must provide for 
servicing of the product under the warranty by the vendor or a 
designated agent of the vendor.  
    Sec. 2.  Minnesota Statutes 1984, section 16B.19, 
subdivision 5, is amended to read: 
    Subd. 5.  [CERTAIN SMALL BUSINESS PREFERENCES AND 
SET-ASIDES.] At least six nine percent of the value of all 
procurements shall be set aside awarded, if possible, for award 
to businesses owned and operated by socially or economically 
disadvantaged persons as defined in section 645.445 with their 
principal place of business in Minnesota.  In addition, three 
percent of the value of all procurements shall be designated for 
award under the preference program provided for below.  The 
commissioner shall designate set-aside procurements in a manner 
that will encourage proportional distribution of set-aside 
awards among the geographical regions of the state.  To promote 
the geographical distribution of set-aside awards, the 
commissioner may designate a portion of the set-aside for small 
businesses owned and operated by socially or economically 
disadvantaged persons for award to bidders from a specified 
congressional district or other geographical region specified by 
the commissioner.  The commissioner may allow small businesses 
owned and operated by socially or economically disadvantaged 
persons a five percent preference in the bid amount on selected 
state procurements.  The commissioner may promulgate rules 
relative to the set-aside and preference programs provided for 
in this subdivision To reach a goal of nine percent, the 
commissioner must set aside at least three percent of all 
procurements for bidding only by small businesses owned and 
operated by socially or economically disadvantaged persons, may 
award a five percent preference in the amount bid on selected 
state procurements to small businesses owned and operated by 
socially or economically disadvantaged persons, or may utilize 
any other bidding process authorized by this chapter.  In the 
event small businesses owned and operated by socially or 
economically disadvantaged persons are unable to perform at 
least 24 nine percent of the set-aside awards value of all 
procurements, the commissioner shall award the balance of the 
set-aside contracts remainder to other small businesses.  At 
least 50 percent of the value of the procurements awarded to 
businesses owned and operated by socially or economically 
disadvantaged persons shall actually be performed by the 
business to which the award is made or another business owned 
and operated by a socially or economically disadvantaged person 
or persons.  The commissioner may not designate more than 20 
percent of any commodity class for set-aside or preference 
awards to businesses owned and operated by socially or 
economically disadvantaged persons.  A business owned and 
operated by socially or economically disadvantaged persons that 
has been awarded more than three-tenths of one percent of the 
value of the total anticipated procurements for a fiscal year 
under this subdivision is disqualified from receiving further 
set-aside or preference advantages for that fiscal year.  
    Sec. 3.  Minnesota Statutes 1984, section 16B.19, 
subdivision 6, is amended to read: 
    Subd. 6.  [CONTRACTS IN EXCESS OF $200,000; SET-ASIDE.] The 
commissioner as a condition of awarding state procurements for 
construction contracts or approving contracts for consultant, 
professional, or technical services pursuant to section 16B.17 
in excess of $200,000 shall require that at least ten percent of 
the contract award to a prime contractor be subcontracted to a 
business owned and operated by a socially or economically 
disadvantaged person or persons or that at least ten percent of 
the contract award be expended in purchasing materials or 
supplies from said person or persons.  If there is no socially 
or economically disadvantaged person or persons or other small 
businesses able to perform the subcontract or to provide the 
supplies or materials, the construction contract or contract for 
consultant, professional, or technical services may be awarded 
notwithstanding the ten percent requirement provided that the 
ten percent requirement is made up in other such contracts 
awarded or to be awarded by the same agency.  Any subcontracting 
or purchasing of supplies and materials pursuant to this 
subdivision may not be included in determining the total amount 
of awards required by subdivisions 1, 2, and 5.  In the event 
small businesses owned and operated by socially and economically 
disadvantaged persons are unable to perform ten percent of the 
prime contract award, the commissioner shall require that other 
small businesses perform at least ten percent of the prime 
contract award.  The commissioner may determine that small 
businesses owned and operated by socially and economically 
disadvantaged persons are unable to perform at least ten percent 
of the prime contract award prior to the advertising for bids.  
Each construction contractor bidding on a project over $200,000 
shall submit with the bid a list of the businesses owned and 
operated by socially or economically disadvantaged persons that 
are proposed to be utilized on the project with a statement 
indicating the portion of the total bid to be performed by each 
business.  The commissioner shall reject any bid to which this 
subdivision applies that does not contain this information.  
Prime contractors receiving construction contract awards in 
excess of $200,000 shall furnish to the commissioner the name of 
each business owned and operated by a socially or economically 
disadvantaged person or persons or other small business that is 
performing work or supplying supplies and materials on the prime 
contract and the dollar amount of the work performed or to be 
performed or the supplies and materials to be supplied.  
    This subdivision does not apply to prime contractors that 
are themselves small businesses owned and operated by socially 
or economically disadvantaged persons, as duly certified 
pursuant to section 16B.22. 
    Sec. 4.  Minnesota Statutes 1984, section 16B.19, 
subdivision 9, is amended to read: 
    Subd. 9.  [PROCUREMENT PROCEDURES.] All laws and rules 
pertaining to solicitations, bid evaluations, contract awards, 
and other procurement matters apply equally to procurements 
designated for small businesses.  In the event of conflict with 
other rules, section 16B.18 and rules adopted under it govern if 
section 16B.18 applies.  If it does not apply, sections 16B.19 
to 16B.22 and rules adopted under those sections govern.  
    Sec. 5.  Minnesota Statutes 1984, section 16B.19, is 
amended by adding a subdivision to read: 
    Subd. 10.  [APPLICABILITY.] This section does not apply to 
construction contracts or contracts for consultant, 
professional, or technical services pursuant to section 16B.17 
which are financed in whole or in part with federal funds and 
which are subject to federal disadvantaged business enterprise 
regulations. 
    Sec. 6.  Minnesota Statutes 1984, section 16B.21, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COMMISSIONER OF ADMINISTRATION.] The 
commissioner shall submit an annual report pursuant to section 
3.195 to the governor and the legislature with a copy to the 
commissioner of energy and economic development indicating the 
progress being made toward the objectives and goals of sections 
16B.19 to 16B.22 during the preceding fiscal year.  The 
commissioner shall also submit a quarterly report to the small 
business procurement advisory council.  These reports shall 
include the following information:  
    (1) the total dollar value and number of potential 
set-aside awards identified during this period and the 
percentage of total state procurement this figure reflects;  
    (2) the number of small businesses identified by and 
responding to the set-aside program, the total dollar value and 
number of set-aside contracts actually awarded to small 
businesses with appropriate designation as to the total number 
and value of set-aside contracts awarded to each small business, 
and the total number of small businesses that were awarded 
set-aside contracts;  
    (3) the total dollar value and number of set-aside 
contracts awarded to small businesses owned and operated by 
economically or socially disadvantaged persons with appropriate 
designation as to pursuant to each bidding process authorized by 
section 16B.19, subdivision 5; the total number and value of 
set-aside these contracts awarded to each small business and to 
each category of economically or socially disadvantaged persons 
as defined by section 645.445 and agency rules, and the 
percentages of the total state procurements the figures of total 
dollar value and the number of set-asides reflect contracts 
awarded by each bidding process; and 
    (4) the number of contracts which were designated and set 
aside pursuant to section 16B.19 but which were not awarded to a 
small business, the estimated total dollar value of these 
awards, the lowest offer or bid on each of these awards made by 
the small business, and the price at which these contracts were 
awarded pursuant to the normal procurement procedures.  
    The information required by paragraphs (1) and (2) must be 
presented on a statewide basis and also broken down by 
geographic regions within the state.  
    Sec. 7.  Minnesota Statutes 1984, section 16B.22, is 
amended to read: 
    16B.22 [RULES.] 
    The commissioner shall adopt by rule standards and 
procedures for certifying that small businesses and small 
businesses owned and operated by socially or economically 
disadvantaged persons are eligible to participate under the 
requirements of sections 16B.19 to 16B.22.  The rules shall 
provide that, except for sheltered workshops and work activity 
programs, certification as a small business owned and operated 
by socially or economically disadvantaged persons will be for a 
maximum of five years from the date of receipt of the first 
set-aside award, and that after the expiration of the 
certification period the business may not again be certified for 
a five-year period.  The commissioner shall adopt by rule 
standards and procedures for hearing appeals and grievances and 
other rules necessary to carry out the duties set forth in 
sections 16B.19 to 16B.22.  
    The commissioner may make rules which exclude or limit the 
participation of nonmanufacturing business, including 
third-party lessors, jobbers, manufacturers' representatives, 
and others from eligibility under sections 16B.19 to 16B.22.  
    The commissioner may adopt rules to establish a preference 
program whereby businesses owned and operated by socially and 
economically disadvantaged persons would be allowed a five 
percent preference in the bid amount on selected state 
procurements or a preference program whereby businesses owned 
and operated by socially and economically disadvantaged persons 
would be awarded any state procurement if the business could 
meet the low bid amount for that procurement.  Each of the 
preference programs is applicable to no more than 1.5 percent of 
the value of anticipated total state procurements of goods and 
services, including construction.  Each preference program 
established by the commissioner expires on June 30, 1986, and 
the commissioner shall report to the legislature on the progress 
of the program by January 1, 1986. 
    Sec. 8.  Minnesota Statutes 1984, section 645.445, 
subdivision 5, is amended to read: 
    Subd. 5.  "Socially or economically disadvantaged person" 
means a person who has been deprived of the opportunity to 
develop and maintain a competitive position in the economy 
because of social or economic conditions.  This disadvantage may 
arise from cultural, social or economic circumstances, or 
background, physical location if the person resides or is 
employed in an area designated a labor surplus area by the 
United States department of labor, or other similar cause.  It 
includes racial minorities, women, or persons who have suffered 
a substantial physical disability.  For purposes of sections 
16B.19 to 16B.22, the definition of "socially or economically 
disadvantaged person" includes sheltered workshops and work 
activity programs. 
    Sec. 9.  [PREFERENCE PROGRAM STUDY.] 
    The commissioner shall prepare a report that examines the 
short-term and long-term effects of the preference bidding 
process on each category of businesses owned and operated by 
economically or socially disadvantaged persons.  This report 
shall be submitted to the governor and the legislature by 
February 15, 1986. 
    Approved June 4, 1985