HOUSE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY FOLMER, VOGEL, RAFFERTY, ERICKSON, ORIE, SMUCKER, FARNESE, PILEGGI, ALLOWAY, BROWNE, WAUGH, FERLO, YUDICHAK, BOSCOLA, MENSCH AND PICCOLA, JULY 21, 2011

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, OCTOBER 15, 2012   

AN ACT

Amending Title 62 (Procurement) of the Pennsylvania Consolidated

Statutes, providing for public access to procurement records;

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and further providing for competitive sealed proposals, for 

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sole source procurement and for emergency procurement; 

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providing for small business reserve program, for oversight

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and responsibility AND for contracting with veteran-owned

small businesses; and imposing duties on the Department of

General Services and other Commonwealth purchasing agencies.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Sections 515 and 516 of Title 62 of the

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Pennsylvania Consolidated Statutes are amended to read:

Section 1.  Title 62 of the Pennsylvania Consolidated

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Statutes is amended by adding a section to read:

§ 106.1.  Public access to procurement records.

(a)  General rule.--Records concerning a procurement shall be

made public, consistent with the act of February 14, 2008

(P.L.6, No.3), known as the Right-to-Know Law.

(b)  Access for noncompetitive contracts.--If a procurement

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is to be made under section 513 (relating to competitive sealed

proposals), 515 (relating to sole source procurement), 517

(relating to multiple awards), 518 (relating to competitive

selection procedures for certain services), 519 (relating to

selection procedure for insurance and notary bonds) or 905

(relating to procurement of design professional services), seven

calendar days prior to execution by the contracting official the

purchasing agency shall post the proposed contract and any

written determination made by the contracting officer which is

related to the contract on its publicly accessible Internet

website.

(b)  Public posting and availability of procurement

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information.--The purchasing agency shall post the following

procurement documents on the department's, or in the case of an

independent agency, its own publicly accessible Internet website

or otherwise made available in the manner indicated below:

(1)  Public notice of an invitation for bids or request

for proposals may be given in accordance with section 512(c)

(1) (relating to competitive sealed bidding) or 513(b)

(relating to competitive sealed proposals) by posting the

invitation for bids or request for proposals, including if

applicable, the written determination required by section

513(a), on the date issued and until the closing date for

receipt of bids or proposals.

(2)  Bid tabulations recording the name of each bidder

and bid amount in accordance with section 512(d) shall be

posted as soon as practicable after bid opening, unless the

purchasing agency elects to cancel the invitation for bids.

(3)  Notices of award pursuant to an invitation for bids

shall be posted as soon as practicable after the purchasing

agency elects to make an award in accordance with section

512(g).

(4)  The written determination required by section 513(g)

shall be posted upon receipt of the final negotiated contract

signed by the selected offeror. Subject to proper redaction

under the Right-to-Know Law, responsive proposals received by

the purchasing agency and until fully executed, the final

negotiated contract, are not required to be posted but shall

be made available to the public upon request.

(5)  Requests to award a contract pursuant to section

515(a)(1), (2), (4) and (10) (relating to sole source

procurement) shall be posted for seven calendar days for

public comment prior to approval of the request by the

department or independent purchasing agency. Upon approval of

a request by the department or independent purchasing agency,

the signed and written determination required under section

515(b) shall be posted.

(6)  The written determinations required by section 516

(relating to emergency procurement) shall be posted in

advance, if feasible, but no later than seven calendar days

after authorization by the department or independent

purchasing agency.

(7)  All contracts resulting from a procurement under

this part shall be posted as soon as practicable upon their

full execution by the Commonwealth.

(8)  Requests pursuant to section 515 or 516 to extend a

contract for which no further options, renewals or extensions

are available in the contract shall be posted for seven

calendar days for public comment prior to approval of the

request by the department or independent purchasing agency.

Upon approval of a request by the department or an

independent purchasing agency, the signed and written

determination required under section 515(b) or 516 shall be

posted.

(c)  Access and retention.--Procurement documents specified

under subsection (b) must be accessible on the Internet website

for a minimum of 30 days from posting and further retained in

accordance with section 563 (relating to retention of

procurement records) and applicable agency record retention

policies.

Section 2.  Sections 513(e), 515 and 516 of Title 62 are

amended to read:

§ 513.  Competitive sealed proposals.

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(e)  Evaluation.--The relative importance of the evaluation

factors shall be fixed prior to opening the proposals. A

Commonwealth agency is required to invite its comptroller to

participate in the evaluation as a nonvoting member of any

evaluation committee. No individual who has been employed by an

offeror within the last two years may participate in the

evaluation of proposals.

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§ 515.  Sole source procurement.

(a)  General rule.--A contract may be awarded for a supply,

service or construction item without competition if the

contracting officer first determines in writing that one of the

following conditions exists:

(1)  Only a single contractor is capable of providing the

supply, service or construction.

(2)  A Federal or State statute or Federal regulation

exempts the supply, service or construction from the

competitive procedure.

(3)  The total cost of the supply, service or

construction is less than the amount established by the

department for small, no-bid procurements under section 514

(relating to small procurements).

(4)  It is clearly not feasible to award the contract for

supplies or services on a competitive basis.

(5)  The services are to be provided by attorneys or

litigation consultants selected by the Office of General

Counsel, the Office of Attorney General, the Department of

the Auditor General or the Treasury Department.

(6)  The services are to be provided by expert witnesses.

(7)  The services involve the repair, modification or

calibration of equipment and they are to be performed by the

manufacturer of the equipment or by the manufacturer's

authorized dealer, provided the contracting officer

determines that bidding is not appropriate under the

circumstances.

(8)  The contract is for investment advisors or managers

selected by the Public School Employees' Retirement System,

the State Employees' Retirement System or a State-affiliated

entity.

(9)  The contract is for financial or investment experts

to be used and selected by the Treasury Department or

financial or investment experts selected by the Secretary of

the Budget.

(10)  The contract for supplies or services is in the

best interest of the Commonwealth.

(b)  Posting of determination on Internet.--For procurements

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made under subsection (a)(1), (2), (4) and (10),  a

determination to support the finding that the condition exists

shall be posted on the purchasing agency's publicly accessible

Internet website for seven calendar days for public comment

prior to Commonwealth execution of the contract.

(c) (b)  Written determination.--The written determination

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authorizing sole source procurement shall be included in the

contract file. For procurements over $250,000 $100,000 made

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under subsection (a)(10), the determination shall be signed by

the head of the purchasing agency.

(d) (c)  Approval required by board of commissioners of

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public grounds and buildings.-- With the exception of small

procurements under section 514 and emergency procurements under

section 516 (relating to emergency procurement), if the sole

source procurement is for a supply, except for computer software

updates under $50,000, for which the department acts as

purchasing agency, it must be approved by the Board of

Commissioners of Public Grounds and Buildings prior to the award

of a contract.

§ 516.  Emergency procurement.

The head of a purchasing agency may make or authorize others

to make an emergency procurement when there exists a threat to

public health, welfare or safety or circumstances outside the

control of the agency create an urgency of need which does not

permit the delay involved in using more formal competitive

methods. Whenever practical, in the case of a procurement of a

supply, at least two [bids] quotes shall be solicited. A written

determination of the basis for the emergency and for the

selection of the particular contractor shall be included in the  

[contract file.] procurement file and shall be posted on the

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purchasing agency's publicly accessible Internet website within

seven calendar days after the emergency procurement is

authorized and shall remain on the website for a minimum of 30

days. No written contract shall be required. The supplier of the

supply, service or construction may be paid based on the

emergency approval and approved invoice.

Section 3.  Title 62 is amended by adding SectionS to read:

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§ 2109.  Small business reserve program.

(a)  Establishment.--The department shall establish a small

business reserve program for the purpose of increasing economic

opportunities for small and disadvantaged businesses, including

veteran-owned small businesses, and affording such small and

disadvantaged businesses the opportunity to bid on State

government contracts without competing with larger businesses.

All procurement by the department shall be eligible for

designation for the small business reserve program, and shall be

published in the same manner as required for a request for

proposal or an invitation for bid.

(b)  Reserve account.--Notwithstanding any other provision of

this title to the contrary, the department shall structure its

procurement procedures to reserve up to 5% of the total dollar

value of its procurement contracts, including public works,

construction and professional services and designed professional

services contracts, to be made directly to qualified small and

disadvantaged businesses, including veteran-owned small

businesses. However, the total dollar value of procurements by

the department shall not include the value of any contract to

which this subsection would not apply because of a conflict with

Federal law.

(c)  Eligibility.--To participate in the small business

reserve program, a small and disadvantaged business, including a

veteran-owned small business, that has been certified by the

department or self-certified, as the case may be, to participate

in Commonwealth procurement activities must meet the following

eligibility requirements:

(1)  The business must be an independently owned, for-

profit, United States business.

(2)  The business must not be dominant in its field of

operation.

(3)  The business may not employ more than 100 employees.

(4)  If the business has operated for three or more

years, it, by type or classification, may not exceed the

following three-year average gross sales:

(i)  Twenty million dollars for contracts to provide

goods.

(ii)  Twenty million dollars for procurement

services.

(iii)  Twenty million dollars for construction or

public works contracts.

(iv)  Seven million dollars for building design

contracts and other designed professional services or

professional services contracts.

(v)  Twenty-five million dollars for information

technology contracts and other such contracts for the

procurement of technology goods or services.

(vi)  If the business has been in operation for less

than three years, the average gross sales shall be

computed for the period of time during which the business

has been fully operational.

(vii)  If the business is a newly created small and

disadvantaged business or a veteran-owned small business,

average gross sales shall be based on projected gross

sales.

(d)  Limit.--Notwithstanding the provisions of subsection

(c), for a small and disadvantaged business or a veteran-owned

small business to operate in more than one general business

classification, its combined operations must not exceed the

lowest three-year average gross sales for the business types

selected.

(e)  Awards.--The department shall award a procurement

contract designated for the small business reserve program to

the small and disadvantaged business or veteran-owned small

business that submits a bid or proposal that meets one of the

following requirements:

(1)  Is the lowest bid price.

(2)  Is the lowest evaluated bid price, if the invitation

for bid or request for proposal so provides.

(3)  Is in the best interest of the Commonwealth.

(f)  Commonwealth agencies.--

(1)  A Commonwealth agency may collaborate with the

department to structure its procurement procedures to provide

for a small business reserve program which shall be subject

to the requirements of this act.

(2)  Upon request, the department shall assist the

purchasing unit of a Commonwealth agency with the development

and implementation of a small business reserve program.

(g)  Construction and application.--

(1)  This section shall not be construed to preclude any

small and disadvantaged business or veteran-owned small

business from competing for any other contract that is not

specifically designated for the small business reserve

program.

(2)  This section shall apply to any eligible "small

business" and "disadvantaged business" as those terms are

defined under section 2102 (relating to definitions) and

shall include any eligible veteran-owned small business and

service-disabled veteran-owned small business under this

chapter. Any reference to veteran-owned small business in

this section shall be interpreted to include any service-

disabled veteran-owned small business.

(h)  Regulations.--The department shall adopt and promulgate

regulations to carry out the requirements of this section. The

regulations shall:

(1)  Establish a comprehensive bidder's list of eligible

small and disadvantaged businesses and veteran-owned small

businesses.

(2)  Provide procedures for updating and maintaining the

list in paragraph (1).

(3)  Provide procedures for small and disadvantaged

businesses and veteran-owned businesses to register with the

department and self-certify as a small business.

(4)  Establish criteria to ensure that Pennsylvania-based

small and disadvantaged businesses and veteran-owned small

businesses are given priority for program participation,

whenever feasible.

(5)  Include any other information the department

determines necessary and appropriate to carry out the

requirements of this section.

(i)  Reporting requirements.--

(1)  On or before December 31, 2014, and on or before

each December 31 thereafter, the department shall submit a

report to the Chief Clerk of the Senate and the Chief Clerk

of the House of Representatives on the operation and

effectiveness of the small business reserve program. The

report shall include the following:

(i)  The total number and dollar value of payments

the department and other Commonwealth agencies made to

small and disadvantaged businesses and veteran-owned

small businesses pursuant to designated small business

reserve contracts.

(ii)  The total number and dollar value of payments

the department made to small and disadvantaged businesses

and veteran-owned small businesses that were not

designated as small business reserve contracts.

(iii)  The total dollar value of payments made by the

department under procurement contracts.

(iv)  Information on any Commonwealth agency that

implemented a small business reserve program, including

information required under subparagraphs (i), (ii) and

(iii).

(v)  Any other information or recommendation the

department determines necessary.

(2)  Nothing in this section shall be construed to

prevent the department from consolidating the reports

required under section 2107 (relating to report to General

Assembly) with the report required under this section or to

prevent the department from transmitting such reports by

electronic mail.

(j)  Definitions.--For the purposes of this section, the term

"Commonwealth agency," shall have the meaning given to it in

section 103 (relating to definitions) and shall include any

other agency for which the department acts as the purchasing

agency.

§ 2110.  Oversight and responsibility.

(a)  Identification of best practices.--

(1)  The department shall identify and adopt best

practices for use by Commonwealth agencies to determine the

most effective means for promoting, increasing and sustaining

procurement opportunities for disadvantaged businesses.

(2)  The department and each Commonwealth agency awarding

contracts in accordance with the applicable provisions of

this title, including construction, public works, designed

professional services and professional services contracts,

shall adopt the best practices identified by the department

in accordance with paragraph (1) in order to increase

oversight, transparency and accountability in contracting and

subcontracting and promote, increase and sustain procurement

opportunities for disadvantaged businesses. The best

practices shall include, but not be limited to, the

following:

(i)  Uniform templates, including templates for

procurement planning, submitting proposals and bids,

contracting and contract management, including standard

forms, reports and other knowledge-based tools.

(ii)  (A)  Verifiable goals for participation by

disadvantaged businesses of not less than 5% of the

total dollar value of State contracts entered into by

each Commonwealth agency during the calendar year,

including construction, public works, designed

professional services, professional services

contracts and sole source contracts. In the case of

construction contracts, the participation goal shall

apply to a local agency or other public or private

entity that receives a Commonwealth appropriation or

grant funds for the performance of a construction or

reconstruction project, including a construction or

reconstruction project performed by a private entity

on a facility to be leased or purchased by the

Commonwealth. Existing contracts with an optional

renewal clause that did not include the disadvantaged

business participation goal established under this

subparagraph shall be subject to the participation

goal and other disadvantaged business review and

inclusion requirements prior to renewal of the

contract by the department or a Commonwealth agency.

(B)  The department or a Commonwealth agency may

attain participation goals by, where appropriate,

directly designating prime contracts for

disadvantaged businesses or by requiring that a

portion of a prime contract, which is not directly

designated for disadvantaged businesses, be

subcontracted to disadvantaged businesses.

(C)  The department and each Commonwealth agency

shall make a good faith effort to attain the goals

established in this paragraph.

(b)  Duties of department.--The department shall:

(1)  Ensure that disadvantaged business participation is

a component of its and each Commonwealth agency's strategic

procurement priorities through the identification of

measurable goals and objectives.

(2)  Develop a best practices manual for use by

Commonwealth agencies. The manual shall provide procedures

for the uniform implementation of procurement policies, best

practices and participation goals for disadvantaged

businesses.

(3)  Establish and require a comprehensive quarterly and

annual reporting process for Commonwealth agencies. Such

reports shall include data on contract award amounts and

actual spending for contractors, subcontractors, vendors,

suppliers and professional services contractors, including

consultant services.

(4)  Designate a single point of contact to implement,

monitor and report work force utilization and contractor

participation in disadvantaged business programs.

(5)  Create a coordinated cross-agency, integrated

disadvantaged business support system. The support system

shall be designed to provide training in the areas of

information management, business management, technical

assistance and other such developmental assistance to

disadvantaged businesses.

(6)  Identify and adopt uniform monitoring, enforcement,

tracking and reporting procedures, guidelines or policy

statements.

(7)  Expand its ability to quantify and measure the

effectiveness of Commonwealth procurement programs.

(8)  Use the department's e-marketplace system to provide

public notice of contracting, subcontracting and grant

opportunities.

(9)  Continue to connect disadvantaged businesses to

other entities, such as the Small Business Development

Centers, Minority Business Enterprise Centers and

Professional Technical Assistance Centers for developmental

assistance.

(10)  Identify and adopt guidelines that will ensure

accountability and transparency in the procurement process.

The guidelines shall include, but not be limited to,

documentation requirements to be used throughout the

procurement process, reporting and disclosure requirements,

treatment of confidential information and procedures for

reporting and resolving complaints.

(11)  Identify and adopt best practices to ensure that

the procurement process is properly structured and managed to

ensure probity and provide fairness and equal treatment for

all contractors, including disadvantaged businesses.

(12)  Adopt, implement and adhere to all contract

compliance requirements, policy statements, guidelines,

regulations and applicable laws pertaining to procurement by

disadvantaged businesses.

(c)  Monitoring, enforcement and sanctions.--The following

shall apply:

(1)  The department shall administer this section and

shall adopt and implement best practice guidelines to monitor

and enforce the provisions of this section as they relate to

the Commonwealth's disadvantaged business program.

(2)  Each Commonwealth agency shall provide mandatory

quarterly and annual reports on the utilization of

disadvantaged businesses on procurement contracts and

subcontracts. An evaluation of a prime contractor's

performance on contracts shall include a review of good faith

efforts in the oversight of disadvantaged business

procurement, timely payment, as provided under Subchapter D

of Chapter 39 (relating to prompt payment schedules), and

continued commitment to the utilization of disadvantaged

subcontractors.

(3)  Sanctions for failure to demonstrate good faith

efforts in the oversight, timely payment and commitment to

disadvantaged businesses and subcontractors shall include

withholding of payments to the prime contractor and

suspension or debarment from participation in Commonwealth

procurement for no less than 12 months or more than 36

months. The department and any other Commonwealth agency may

also institute any appropriate and necessary administrative,

legal, judicial or other proceedings after inquiry, review or

investigation if it finds that any person, contractor or

grantee has failed to comply with or has violated any

requirement or action set forth in this title or regulations

promulgated under this title.

(d)  Construction.--Nothing in this section shall be

construed to authorize the department or a Commonwealth agency

to discriminate in the awarding of any contract or subcontract

or to authorize a contractor or any other person or entity to

discriminate in the solicitation or acceptance of bids or offers

for contracting or subcontracting in any procurement authorized

under this title.

Section 4.  Title 62 is amended by adding a chapter to read:

CHAPTER 22

VETERAN-OWNED SMALL BUSINESSES

Sec.

2201.  Definitions.

2202.  Regulations.

2203.  Veteran-owned small business participation goals.

2204.  Duties of department.

2205.  Bonding and progress payments.

2206.  (Reserved).

2207.   Reports.

2208.  Compliance with Federal requirements.

§ 2201.  Definitions.

Subject to section 2202 (relating to regulations), the

following words and phrases when used in this chapter shall have

the meanings given to them in this section unless the context

clearly indicates otherwise:

"Service disabled."  A veteran who possesses either a

disability rating letter issued by the United States Department

of Veterans Affairs or a disability determination from the

United States Department of Defense.

"Service-disabled veteran-owned small business."  A small

business owned and controlled by a service-disabled veteran or

veterans or, if approved by the Department of General Services,

a surviving spouse or permanent caregiver of a service-disabled

veteran.

"Small business."  A business that does not exceed the

limitation on revenue or number of employees established by the

Department of General Services for designation as a small

business.

"Veteran."  A person who served on active duty in the United

States Armed Forces, including any of the following:

(1)  A reservist or member of the National Guard who was

discharged or released from the service under honorable

conditions.

(2)  A reservist or member of the National Guard who

completed an initial term of enlistment or qualifying period

of service.

(3)  A reservist or member of the National Guard who was

disabled in the line of duty during training.

"Veteran-owned small business."  A small business owned and

controlled by a veteran or veterans.

§ 2202.  Regulations.

The department shall establish policy in accordance with this

chapter for executive agencies and independent agencies and may

promulgate regulations establishing detailed definitions of the

words and phrases defined in section 2201 (relating to

definitions) using, in addition to the criteria set forth in

section 2201, other criteria as it deems appropriate, including

the number of employees and the dollar volume of business.

State-affiliated entities shall implement the policy for their

procurement programs.

§ 2203.  Veteran-owned small business participation goals.

Each purchasing agency shall have an annual goal of not less

than 5% participation by veteran-owned small businesses in all

contracts entered into by the purchasing agency. The

participation goal shall apply to the overall dollar amount

expended by the purchasing agency with respect to the contracts.

§ 2204.  Duties of department.

The department shall have the following duties:

(1)  Where feasible, provide appropriate staff who shall

be responsible to the department and who shall serve within

designated Commonwealth agencies to assist veteran-owned 

small businesses and service-disabled veteran-owned small

businesses in this Commonwealth in learning how to do

business with Commonwealth agencies.

(2)  Give special publicity to procurement procedures and

issue special publications designed to assist veteran-owned 

small businesses and service-disabled veteran-owned small

businesses in learning how to do business with Commonwealth

agencies.

(3)  Compile, maintain and make available source lists of

veteran-owned small businesses and service-disabled

veteran-owned small businesses for the purpose of encouraging

procurement from veteran-owned small businesses.

(4)  Include veteran-owned small businesses and

service-disabled veteran-owned small businesses on

solicitation mailing lists.

(5)  Assure that veteran-owned small businesses and

service-disabled veteran-owned small businesses are solicited

on each procurement for which the businesses may be suited.

(6)  Develop special training programs to assist veteran-

owned small businesses and service-disabled veteran-owned

small businesses in learning how to do business with

Commonwealth agencies.

(7)  Assure that participation by veteran-owned small 

businesses and service-disabled veteran-owned small

businesses is appropriately factored into the evaluation of

proposals for supplies, services or construction when a

purchasing agency uses the competitive sealed proposals

method under section 513 (relating to competitive sealed

proposals).

(8)  Certify businesses that have been identified as

veteran-owned small businesses and service-disabled

veteran-owned small businesses.

§ 2205.  Bonding and progress payments.

(a)  Bonding.--Notwithstanding other provisions of this part:

(1)  Except as provided in paragraph (2), a purchasing

agency may reduce the level or change the types of bonding

normally required or accept alternative forms of security to

the extent reasonably necessary to encourage procurement from

veteran-owned small businesses and service-disabled

veteran-owned small businesses.

(2)  For contracts under $50,000, veteran-owned small

businesses and service-disabled veteran-owned small

businesses shall be exempt from any bonding requirements.

(b)  Progress payments.--A purchasing agency may make special

provisions for progress payments as it deems reasonably

necessary to encourage procurement from veteran-owned small 

businesses and service-disabled veteran-owned small businesses.

§ 2206.  (Reserved).

§ 2207.  Reports.

(a)  Report to Department of General Services.--By August 15,

2013, and each August 15 thereafter, each executive and

independent agency shall submit an annual report for the period

of July 1 to June 30 to the Department of General Services on

actual utilization of veteran-owned small businesses and

service-disabled veteran-owned small businesses as contractors,

subcontractors, suppliers and professional service providers.

(b)  Report to standing committees.--The department and each

State-affiliated entity shall annually, before October 1, report

in writing to the Veterans Affairs and Emergency Preparedness

Committee of the Senate and the Veterans Affairs and Emergency

Preparedness Committee of the House of Representatives

concerning total contract dollars awarded to veteran-owned small

businesses and service-disabled veteran-owned small businesses 

by the purchasing agency during the preceding fiscal year. The

report shall include a list of all veteran-owned small

businesses and service-disabled veteran-owned small businesses

that participated as contractors, subcontractors or suppliers

during the preceding fiscal year. The department and State-

affiliated entity initial reports shall be submitted to the

standing committees under this section on or before October 1, 

2012, or on or before October 1 at least 12 months after the

effective date of this section, whichever is later.

§ 2208.  Compliance with Federal requirements.

If a procurement involves the expenditure of Federal

assistance or contract funds, the purchasing agency shall comply

with Federal law and authorized regulations that are mandatorily

applicable and that are not presently reflected in this part.

Section 2 3 5.  This act shall take effect in 60 days.

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