Assembly Bill No. 213

Assembly Bill No. 213-Committee on Government Affairs

(On Behalf of the Purchasing Division of the
Department of Administration)

March 5, 1997
____________

Referred to Committee on Government Affairs

SUMMARY--Revises provisions governing state purchasing. (BDR 27-490)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.

AN ACT relating to public purchasing; raising the threshold for requiring formal contracts for purchases by the state; revising the considerations for determining the lowest responsible bidder on such contracts; revising provisions governing appeals by unsuccessful bidders; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

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Section 1 NRS 333.300 is hereby amended to read as follows:
333.300 1. Except as otherwise provided in NRS 333.375, the chief shall give reasonable notice, by advertising and by written notice mailed to persons, firms or corporations in a position to furnish the classes of commodities involved, as shown by its records, of all proposed purchases of supplies, materials and equipment to be purchased in accordance with a schedule prepared in conformity with the provisions of NRS 333.250.
2. All such materials, supplies and equipment, except as otherwise provided in this section, when the estimated cost thereof exceeds [$10,000,] $25,000, must be purchased by formal contract from the lowest responsible bidder after due notice inviting the submission of sealed proposals to the chief of the purchasing division at the date, hour and location set forth in the proposal, and at that date, hour and location the proposals must be publicly opened. The purchasing division may reject any or all proposals, or may accept the proposal determined best for the interest of the state. The notice must be published as outlined in NRS 333.310.
3. In case of emergencies caused by acts of God or the national defense or other unforeseeable circumstances, the provisions for advertisements on competitive bids may be waived by the chief, but every effort must be made to secure the maximum competitive bidding under the circumstances. In no case may contracts be awarded until every possible effort has been made to secure at least three bona fide competitive bids.
4. In awarding contracts for the purchase of supplies, materials and equipment, whenever two or more lowest bids are identical, the chief shall:
(a) If the lowest bids are by bidders resident in the State of Nevada, accept the proposal which, in his discretion, is in the best interests of this state.
(b) If the lowest bids are by bidders resident outside the State of Nevada:
(1) Accept the proposal of the bidder who will furnish goods or commodities produced or manufactured in this state; or
(2) Accept the proposal of the bidder who will furnish goods or commodities supplied by a dealer resident in the State of Nevada.
Sec. 2 NRS 333.330 is hereby amended to read as follows:
333.330 1. All bids on more than one item on which bids are called for by the same notice [shall] must be itemized and give a price for each item.
2. All bids [shall:] must:
(a) Be in writing [.] and signed.
(b) Be sealed [.] or, if the bid is submitted electronically, secured by an electronic equivalent of a seal, as approved by the purchasing division.
(c) Be opened and read publicly by the chief or his designated agent as they are opened.
Sec. 3 NRS 333.340 is hereby amended to read as follows:
333.340 1. Every contract or order [shall] must be awarded to the lowest responsible bidder . [, taking into consideration:
1.] To determine the lowest responsible bidder, the chief may consider:
(a) The location of the using agency to be supplied.
[2.] (b) The qualities of the articles to be supplied.
[3. Their]
(c) The total cost of ownership of the articles to be supplied.
(d) The conformity of the articles to be supplied with the specifications.
[4.] (e) The purposes for which [they] the articles to be supplied are required.
[5.] (f) The dates of delivery [.] of the articles to be supplied.
2. As used in this section, "total cost of ownership" includes, but is not limited to:
(a) The history of maintenance or repair of the articles;
(b) The cost of routine maintenance and repair of the articles;
(c) Any warranties provided in connection with the articles;
(d) The cost of replacement parts for the articles; and
(e) The value of the articles as used articles when given in trade on a subsequent purchase.
Sec. 4 NRS 333.365 is hereby amended to read as follows:
333.365 1. [Any] A person who has entered into a contract with the purchasing division and who does not perform according to the terms of the contract is liable for, in addition to any other applicable damages for breach of contract, a penalty of not more than 5 percent of the total value of the bid. The penalty must be recovered in a civil action upon the complaint of the chief in any court of competent jurisdiction. In addition to recovering the penalty and any other applicable damages, the chief may remove the name of the person from the list of bidders and refuse to accept a bid from him for not more than 2 years.
2. If the chief does not bring an action to recover the penalty prescribed by subsection 1, he may:
(a) Remove the name of the person from the list of bidders and refuse to accept a bid from him for not more than 2 years; and
(b) Impose an administrative penalty, in an amount not to exceed 5 percent of the total value of the bid. Such a penalty may be recovered only after notice is given to the person by mail.
3. If the chief has removed the name of a person from the list of bidders, that person must apply to the chief to have his name reinstated on the list of bidders.
4. A penalty imposed pursuant to subsection 1 or 2 may be deducted from any payment due the person or, if a bond has been issued or a check received, a claim may be made against the bond or check. If no payment is due and no bond was issued or check received, the chief may issue a claim for payment of the penalty. The claim must be paid within 30 days.
Sec. 5 NRS 333.370 is hereby amended to read as follows:
333.370 1. [Any] A person who makes an unsuccessful bid or proposal may file a notice of appeal with the [using agency on behalf of which the bid or proposal was solicited] purchasing division and with the hearings division of the department of administration within 10 days after:
(a) The date of award as entered on the bid record; and
(b) The notice of award has been posted in at least three public buildings, including the location of the using agency.
The notice of appeal must include a written statement of the issues to be addressed on appeal.
2. A person filing a notice of appeal [shall] must post a bond with good and solvent surety authorized to do business in this state or submit other security, in a form approved by the chief by regulation, to the [head of the using agency,] purchasing division, who shall hold the bond or other security until a determination is made on the appeal. Except as otherwise provided in subsection 3, a bond posted or other security submitted with a notice of appeal must be in an amount equal to 25 percent of the total value of the successful bid submitted.
3. If the total value of the successful bid cannot be determined because the total requirements for the contract are estimated as of the date of award, a bond posted or other security submitted with a notice of appeal must be in an amount equal to 25 percent of the estimated total value of the contract. Upon request, the chief shall provide:
(a) The estimated total value of the contract; or
(b) The method for determining the estimated total value of the contract,
based on records of past experience and estimates of anticipated requirements furnished by the using agency.
4. Within 20 days after receipt of the notice of appeal, a hearing officer of the hearings division of the department of administration shall hold a contested hearing on the appeal in substantial compliance with the provisions of NRS 233B.121 to 233B.1235, inclusive, 233B.125 and 233B.126. The successful bidder must be given notice of the hearing in the same manner as the person who filed the notice of appeal. The successful bidder may participate in the hearing . [if, within 10 days after receiving notice of the hearing, he files a notice of intent to participate in the hearing with:
(a) The hearing officer;
(b) The using agency; and
(c) The person who filed the notice of appeal.]
5. The hearing officer may cancel the award for lack of compliance with the provisions of this chapter. A cancellation of the award requires readvertising for bids and a new award in accordance with the provisions of this chapter.
6. [Any] A notice of appeal filed in accordance with the provisions of this section operates as a stay of action in relation to any contract until a determination is made by the hearing officer on the appeal.
7. A person who makes an unsuccessful bid or proposal may not seek any type of judicial intervention until the hearing officer has made a determination on the appeal.
8. The chief may make as many open market purchases of the commodities or services as are urgently needed to meet the requirements of the purchasing division or the using agency until a determination is made on the appeal. With the approval of the chief, the using agency may make such purchases for the agency.
9. Neither the State of Nevada, nor any agency, contractor, department, division, employee or officer of the state is liable for any costs, expenses, attorney's fees, loss of income or other damages sustained by a person who makes an unsuccessful bid or proposal, whether or not the person files a notice of appeal pursuant to this section.
10. If the appeal is upheld and the award is canceled, the bond posted or other security submitted with the notice of appeal must be returned to the person who posted the bond or submitted the security. If the appeal is rejected and the award is upheld, a claim may be made against the bond or other security by the purchasing division and the using agency to the hearings division of the department of administration in an amount equal to the expenses incurred and other monetary losses suffered by the purchasing division and the using agency because of the unsuccessful appeal. The hearing officer shall hold a hearing on the claim in the same manner as prescribed in subsection 4. Any money not awarded by the hearing officer must be returned to the person who posted the bond or submitted the security.