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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 254-S.F.No. 2971 
                  An act relating to state government; state 
                  procurement; codifying references relating to 
                  competitive bidding for building and construction 
                  contracts; amending Minnesota Statutes 2000, section 
                  16C.25; proposing coding for new law in Minnesota 
                  Statutes, chapter 16C. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 16C.25, is 
        amended to read: 
           16C.25 [BUILDING AND CONSTRUCTION CONTRACTS.] 
           Notwithstanding any contrary law, the provisions of 
        Minnesota Statutes 1996, section 16B.07, 16B.08, 16B.09, and all 
        other laws applicable to competitive bidding for building and 
        construction contracts on June 30, 1998, sections 16C.06 and 
        16C.10, sections 16C.26 to 16C.29, and other provisions of law 
        not inconsistent with the provisions of sections 16C.26 to 
        16C.29 apply to building and construction contracts entered into 
        on or after July August 1, 1998 2002. 
           Sec. 2.  [16C.26] [COMPETITIVE BIDS.] 
           Subdivision 1.  [APPLICATION.] Except as otherwise provided 
        by sections 16C.26 and 16C.27, all contracts for building and 
        construction or repairs must be based on competitive bids. 
           Subd. 2.  [REQUIREMENT CONTRACTS.] Standard requirement 
        price contracts for building and construction must be 
        established by competitive bids as provided in subdivision 1.  
        The standard requirement price contracts may contain escalation 
        clauses and may provide for a negotiated price increase or 
        decrease based upon a demonstrable industrywide or regional 
        increase or decrease in the vendor's costs or for the addition 
        of similar products or replacement items not significant to the 
        total value of existing contracts.  The term of these contracts 
        may not exceed five years including all extensions. 
           Subd. 3.  [PUBLICATION OF NOTICE; EXPENDITURES OVER 
        $15,000.] If the amount of an expenditure is estimated to exceed 
        $15,000, sealed bids must be solicited by public notice inserted 
        at least once in a newspaper or trade journal not less than 
        seven days before the final date of submitting bids.  The 
        commissioner shall designate the newspaper or trade journal for 
        that publication and may designate different newspapers or 
        journals according to the nature of the purchase or contract.  
        The commissioner shall also solicit sealed bids by sending 
        notices by mail to all prospective bidders known to the 
        commissioner and by posting notice on a public bulletin board in 
        the commissioner's office at least five days before the final 
        date of submitting bids.  All bids must be sealed when they are 
        received and must be opened in public at the hour stated in the 
        notice.  All original bids and all documents pertaining to the 
        award of a contract must be retained and made a part of a 
        permanent file or record and remain open to public inspection. 
           Subd. 4.  [BUILDING AND CONSTRUCTION CONTRACTS; $15,000 OR 
        LESS.] All contracts, the amount of which is estimated to be 
        $15,000 or less, may be made either upon competitive bids or in 
        the open market, in the discretion of the commissioner.  So far 
        as practicable, however, they must be based on at least three 
        competitive bids which must be permanently recorded.  
           Subd. 5.  [STANDARD SPECIFICATIONS, SECURITY.] Contracts 
        must be based on the standard specifications prescribed and 
        enforced by the commissioner under this chapter, unless 
        otherwise expressly provided.  Each bidder for a contract must 
        furnish security approved by the commissioner to ensure the 
        making of the contract being bid for. 
           Subd. 6.  [NONCOMPETITIVE BIDS.] Agencies are encouraged to 
        contract with small targeted group businesses designated under 
        section 16C.16 when entering into contracts that are not subject 
        to competitive bidding procedures. 
           Sec. 3.  [16C.27] [BIDS NOT REQUIRED.] 
           Subdivision 1.  [SINGLE SOURCE OF SUPPLY.] Competitive 
        bidding is not required for contracts clearly and legitimately 
        limited to a single source of supply, and the contract price may 
        be best established by direct negotiation. 
           Subd. 2.  [NEGOTIATED CONTRACTS.] In lieu of any of the 
        other requirements of sections 16C.26 to 16C.28, the 
        commissioner may negotiate a contract for public work to be 
        performed at a state-owned institution or installation if the 
        cost does not exceed $15,000 and if the head of the affected 
        state agency requests the commissioner to do so.  The 
        commissioner shall have prepared whatever plans and 
        specifications for the public work deemed necessary by the 
        commissioner to protect the public interest.  Contractor's bonds 
        or security pursuant to chapter 574 are not required for 
        contracts entered into under this subdivision. 
           Subd. 3.  [EMERGENCY PURCHASES.] In emergencies, the 
        commissioner may, without calling for bids, contract directly 
        for the repair, rehabilitation, and improvement of a state-owned 
        structure or may authorize an agency to do so.  An emergency for 
        the purposes of this subdivision is an unforeseen occurrence or 
        combination of circumstances which calls for immediate action in 
        the public interest. 
           Sec. 4.  [16C.28] [CONTRACTS; AWARD.] 
           Subdivision 1.  [LOWEST RESPONSIBLE BIDDER.] All state 
        building and construction contracts entered into by or under the 
        supervision of the commissioner or an agency for which 
        competitive bids are required must be awarded to the lowest 
        responsible bidder, taking into consideration conformity with 
        the specifications, terms of delivery, the purpose for which the 
        contract is intended, the status and capability of the vendor, 
        and other considerations imposed in the call for bids.  The 
        commissioner may decide which is the lowest responsible bidder 
        for all contracts and may use the principles of life cycle 
        costing, where appropriate, in determining the lowest overall 
        bid.  The head of the interested agency shall make the decision, 
        subject to the approval of the commissioner.  Any or all bids 
        may be rejected.  In a case where competitive bids are required 
        and where all bids are rejected, new bids, if solicited, must be 
        called for as in the first instance, unless otherwise provided 
        by law. 
           Subd. 2.  [ALTERATIONS AND ERASURES.] A bid containing an 
        alteration or erasure of any price contained in the bid which is 
        used in determining the lowest responsible bid must be rejected 
        unless the alteration or erasure is corrected under this 
        subdivision.  An alteration or erasure may be crossed out and 
        the correction printed in ink or typewritten adjacent to it and 
        initialed in ink by the person signing the bid. 
           Subd. 3.  [SPECIAL CIRCUMSTANCES.] The commissioner may 
        reject the bid of any bidder who has failed to perform a 
        previous contract with the state.  In the case of identical low 
        bids from two or more bidders, the commissioner may use 
        negotiated procurement methods with the tied low bidders for 
        that particular transaction so long as the price paid does not 
        exceed the low tied bid price.  The commissioner may award 
        contracts to more than one bidder in accordance with subdivision 
        1, if doing so does not decrease the service level or diminish 
        the effect of competition. 
           Subd. 4.  [RECORD.] A record must be kept of all bids, 
        including names of bidders, amounts of bids, and each successful 
        bid.  This record is open to public inspection. 
           Subd. 5.  [PREFERENCES NOT CUMULATIVE.] The preferences 
        under sections 16B.121, 16C.06, subdivision 7, and 16C.16 apply, 
        but are not cumulative.  The total percentage of preference 
        granted on a contract may not exceed the highest percentage of 
        preference allowed for that contract under any one of those 
        sections. 
           Sec. 5.  [16C.29] [CONTRACT MANAGEMENT AND REVIEW.] 
           The commissioner must develop procedures to audit agency 
        personnel to whom the commissioner has delegated contracting 
        authority, in order to ensure compliance with laws and 
        guidelines governing issuance of contracts, including laws and 
        guidelines governing conflicts of interest. 
           Sec. 6.  [EFFECTIVE DATE.] 
           This act is effective August 1, 2002. 
           Presented to the governor March 20, 2002 
           Signed by the governor March 22, 2002, 2:01 p.m.