House Bill No. 139
Introduced By swanson
By Request of the Department of Administration
A Bill for an Act entitled: An Act generally revising the law relating to public contracts; amending Montana Procurement laws; modernizing state procurement procedure by providing options for source selection, clarifying terms and procedures, and streamlining the state procurement process; providing exclusive remedies for unlawful solicitations or awards; providing for the procurement of consulting services in the same manner as other services are procured; amending sections 18-1-101, 18-4-122, 18-4-123, 18-4-126, 18-4-132, 18-4-133, 18-4-141, 18-4-224, 18-4-241, 18-4-242, 18-4-302, 18-4-303, 18-4-304, 18-4-305, 18-4-309, 18-4-310, 18-4-312, 18-4-402, 18-8-211, and 60-2-112, MCA; repealing sections 18-4-131, 18-4-225, 18-8-101, 18-8-102, 18-8-103, 18-8-104, 18-8-105, 18-8-106, 18-8-111, and 18-8-112, MCA; and providing effective dates and a retroactive applicability date.
WHEREAS, the Montana Supreme Court held in ISC Distributors, Inc. v. Trevor, 273 M 185, 903 P2d 170 (1995), that an unsuccessful bidder on a state contract may sue the state for money damages under Title 18, chapter 4, MCA, commonly known as the Montana Procurement Act; and
WHEREAS, a judgment for damages in a state contract suit brought pursuant to the Montana Procurement Act makes Montana taxpayers pay twice for the same product; and
WHEREAS, in enacting the Montana Procurement Act, the Legislature did not intend to allow disappointed bidders on state contracts to be awarded damages under the Montana Procurement Act, but rather intended that the exclusive remedies of a disappointed bidder be the remedies provided in section 18-4-242, MCA, which do not include the award of money damages to an unsuccessful bidder; and
WHEREAS, the Montana Supreme Court held in Meech v. Hillhaven West, Inc., 238 M 21, 776 P2d 488 (1989), that no fundamental right to a particular cause of action or remedy exists under Montana law and that Article II, section 16, of the Montana Constitution requires only that some remedy be provided for every wrong, and the Supreme Court held in Continental Oil Co. v. Montana Concrete Co., 63 M 223, 207 P 116 (1922), and General Agriculture Corp. v. Moore, 166 M 510, 534 P2d 859 (1975), that the Legislature may repeal a statutory cause of action or remedy during the pendency of a civil action invoking the remedy; and
WHEREAS, according to section 1-2-110, MCA, a statute may be repealed at any time by the Legislature, and persons acting under any statute are considered to be acting in contemplation of the Legislature's power to repeal the statute; and
WHEREAS, it is the intent of the Legislature by enacting [sections 2, 10, and 23] and repealing section 18-4-131, MCA, to reverse the holding of the Supreme Court in the ISC case as to the availability of the remedy of money damages; and
WHEREAS, it is the intent of the Legislature by enacting [section 23] to make the reversal of the ISC case apply retroactively, unless a complaint was filed in district court prior to January 1, 1992, as provided in [section 23].
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 18-1-101, MCA, is amended to read:
(1)(1) Unless the context requires otherwise, in this title "department" "department" means the
department of administration provided for in Title 2, chapter 15, part 10. (2) Unless the context requires otherwise, in this part the following definitions apply: (a) "Goods" means supplies, equipment, materials, commodities, and specially manufactured products. (b) "Montana-made" means manufactured or produced in this state and made with the: (i) use of parts, materials, or supplies of which 50% or more were manufactured or produced in this state; or (ii) employment of persons of whom 50% or more are bona fide residents of Montana as defined in 18-2-401. (c) "Nonresident bidder" means a bidder whose residence is not in this state as determined under 18-1-103. (d)(2) Unless the context requires otherwise, in this part, the following definitions apply:
(A) "Goods" means supplies, equipment, materials, commodities, and specially manufactured products.
(b) "Montana-made" means manufactured or produced in this state and made with the:
(i) use of parts, materials, or supplies of which 50% or more were manufactured or produced in this state; or
(ii) employment of persons of whom 50% or more are bona fide residents of Montana as defined in 18-2-401.
(c) "nonresident bidder" means a bidder whose residence is not in this state as determined under 18-1-103.
(d) "Public agency" means a department, commission, council, board, bureau, committee, institution, agency, government corporation, or other entity, instrumentality, or official of the legislative, executive, or judicial branch of this state and its political subdivisions, including the board of regents and the Montana university system.
(e) "Resident bidder" means a bidder whose residence is in this state as determined under 18-1-103.
(e) "Resident bidder" means a bidder whose residence is in this state as determined under 18-1-103.
(f) "Written" means that whenever written or in-writing determinations or documents are required, the public agency responsible for the procurement may specify an appropriate visual medium, such as by computer transmission or by facsimile machine transmission, in the specifications, contract, or rules of the public agency."
Section 2. Section 18-4-122, MCA, is amended to read:
"18-4-122. Purpose. The underlying purposes and policies of this chapter are to:
(1) simplify, clarify, and modernize the law governing procurement by the state of Montana;
(2) permit the continued development of procurement policies and practices;
(3) make as consistent as possible the procurement laws among the various jurisdictions;
(4) provide for increased public confidence in the procedures followed in public procurement;
ensure the fair and equitable treatment of all persons who deal with the procurement system of the state; ensure the fair
and equitable treatment of all persons who deal with the procurement system of the state;
(6) provide increased economy in state procurement activities and maximize to the fullest extent practicable the purchasing value of public funds of the state;
(7) foster effective, broad-based competition within the free enterprise system
; and (8) provide safeguards for the maintenance of a procurement system of quality and integrity
(8) provide safeguards for the maintenance of a procurement system of quality and integrity; and
(9) provide the exclusive remedies for unlawful bid solicitations or contract awards."
Section 3. Section 18-4-123, MCA, is amended to read:
"18-4-123. Definitions. In this chapter, unless the context clearly requires otherwise or a different meaning is prescribed for a particular section, the following definitions apply:
(1) "Business" means a corporation, partnership, individual, sole proprietorship, joint-stock company, joint venture, or other private legal entity.
(2) "Change order" means a written order, signed by an authorized department representative, directing the contractor to make changes which the changes clause of the contract authorizes the department to order without the consent of the contractor.
(3) "Contract" means all types of state agreements, regardless of what they may be called, for the procurement or disposal of supplies or services.
(4) "Contract modification" means a written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity, or other provisions of a contract accomplished by mutual action of the parties to the contract.
(5) "Contractor" means a person having a contract with a governmental body.
(6) "Data" means recorded information, regardless of form or characteristic.
(7) "Department" means the department of administration.
(8) "Designee" means
a duly an authorized representative of a person holding a superior position.
(9) "Director" means the director of the department of administration.
(10) "Employee" means an individual drawing a salary from a governmental body, whether elected or not, and any noncompensated individual performing personal services for a governmental body.
(11) "Governmental body" means a department, commission, council, board, bureau, committee, institution, legislative body, agency, government corporation, or other entity, instrumentality, or official of the executive, legislative, or judicial branch of this state, including the board of regents and the Montana university system.
(12) "Grant" means the furnishing by the federal government of assistance, whether financial or otherwise, to a person or
agency to support a program authorized by law. It does not include an award whose primary purpose is to procure an end
product, whether in the form of supplies or services. A contract resulting from
such an award is not a grant but a
(13) "Person" means any business, individual, union, committee, club, other organization, or group of individuals.
(14) "Printing" means the reproduction of an image from a printing surface generally made by a contact impression that
causes a transfer of ink or the reproduction of an impression by a photographic process and includes graphic arts,
typesetting, binding, and other operations necessary to produce a finished printed product. Printing does not include
rebinding or repair by a library or an office, department, board, or commission
thereof of books, journals, pamphlets,
magazines, and literary articles held as a part of its library collection.
(15) "Procurement" means buying, purchasing, renting, leasing, or otherwise acquiring any supplies or services. It also includes all functions that pertain to the obtaining of any supply or service, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration.
(16) "Procurement officer" means any person
duly authorized to enter into and administer contracts and make written
determinations with respect thereto to contracts. The term also includes an authorized representative acting within the limits
of his the representative's authority.
(17) "Purchasing agency" means any governmental body, other than the department,
which that is authorized by this
chapter or its implementing rules or by way of delegation from the director to enter into contracts.
(18) "Services" means the furnishing of labor, time, or effort by a contractor
, not involving the delivery of a specific end
product other than reports which are merely incidental to the required performance. The term does not include consulting
services as defined in 18-8-102, those services listed in 18-8-103, employment agreements or collective bargaining
agreements, the provision by providers of human services regulated by a state agency administered by the department of
public health and human services, or services related to construction contracts.
(19) "Supplies" means all property except as otherwise provided by law, including but not limited to equipment, materials, printing, and commodities, and excluding land or any interest in land.
(20) "Using agency" means any governmental body of the state
which that utilizes uses any supplies or services procured
under this chapter.
(21) "Vendor" means a person who offers or may offer supplies or services to a public agency."
Section 4. Section 18-4-126, MCA, is amended to read:
"18-4-126. Public access to procurement information -- records -- retention. (1) Procurement information is a public writing and must be available to the public as provided in 2-6-102 and 18-4-304.
(2) All procurement records must be retained, managed, and disposed of in accordance with the state records management program, Title 2, chapter 6.
(3) Written determinations required by this chapter must be retained in the appropriate official contract file of the department or the purchasing agency administering the procurement in accordance with the state records management program."
Section 5. Section 18-4-132, MCA, is amended to read:
"18-4-132. Application. (1)
Except as provided in 18-4-313, which applies retroactively to telecommunications
equipment and systems and data processing equipment acquired under existing contracts, leases, or rental agreements, and
subject to the terms of such agreements, this chapter applies only to contracts solicited or entered into after January 1, 1984,
unless the parties agree to its application to a contract solicited or entered into prior to January 1, 1984. (2) This chapter applies to expenditure of public funds irrespective of their source, including federal assistance money, by
this state acting through a governmental body, as defined in 18-4-123, under any contract ;. but this This chapter does not
apply to either grants or contracts between the state and its political subdivisions or other governments, except as provided
in part 4. This chapter also applies to the disposal of state supplies. Nothing in this This chapter or in rules adopted
thereunder pursuant to this chapter prevents do not prevent any governmental body or political subdivision from complying
with the terms and conditions of any grant, gift, bequest, or cooperative agreement. (3)(2) This chapter does not apply to construction contracts. (4)(3) This chapter does not apply to expenditures of or the authorized sale or disposal of equipment purchased with
money raised by student activity fees designated for use by the student associations of the university system. (5)(4) This chapter does not apply to contracts entered into by the Montana state lottery that have an aggregate value of
less than $250,000.
(5) This chapter does not apply to employment of:
(a) a registered professional engineer, surveyor, real estate appraiser, or registered architect;
(b) a physician, dentist, pharmacist, or other medical, dental, or health care provider;
(c) an expert witness hired for use in litigation, a hearings officer hired in rulemaking and contested case proceedings under the Montana Administrative Procedure Act, or an attorney as specified by executive order of the governor;
(d) consulting actuaries;
(e) a private consultant employed by the student associations of the university system with money raised from student activity fees designated for use by those student associations;
(f) a private consultant employed by the Montana state lottery;
(g) a private investigator licensed by any jurisdiction; or
(h) a claims adjuster."
Section 6. Section 18-4-133, MCA, is amended to read:
"18-4-133. Purchases exempt from general requirements. (1)
Fresh fruits and vegetables, other than potatoes, may not
be included in the supplies to be purchased as provided in this chapter. The department may allow a state agency or
institution to purchase fresh fruits and vegetables. An itemized account must be kept of these purchases, and the account
must be furnished to the department. (2) When immediate delivery of articles or performance of service is required by the public exigencies, the articles or
service required may be procured by open purchase or contract at the place and in the manner in which the articles are
usually bought and sold or the services engaged between individuals but under the direction of the department. (3)(2) The department of administration may exempt the department of corrections and the department of public health and
human services from the provisions of this chapter for the purchase of suitable clothing by the department of corrections
and the department of public health and human services for residents of its institutions and community-based programs. (4)(3) As used in this section, "suitable clothing" means styled, seasonable clothing, which will allow the resident to make
a normal appearance in the community."
Section 7. Section 18-4-141, MCA, is amended to read:
"18-4-141. Contract transfers and collusion prohibited -- violations and penalty. (1)
No A contract or order or any
interest therein in a contract or order may not be transferred, assigned, or subcontracted by the party to whom the contract
or order is given to any other party without the express written approval of the state, and the state may declare void any
unapproved transfer, assignment, or subcontract. No approval of a transfer, assignment, or subcontract may release the
original obligor or his sureties from their obligations to the state under the contract or order.
(2) Collusion or secret agreements between bidders for the purpose of securing any advantage to the bidders as against the state in the awarding of contracts is prohibited. The state may declare the contract void if the department finds sufficient evidence after a contract has been let that the contract was obtained by a bidder or bidders by reason of collusive or secret agreement among the bidders to the disadvantage of the state.
(3) All rights of action for a breach of a contract by the contracting parties are reserved to the state.
(4) A person who violates the provisions of 2-2-201 or this section, or both, is guilty of a misdemeanor and shall be fined not less than $500 or more than $5,000, and the state of Montana may at its option declare any contract in violation of the provisions of 2-2-201 or this section, or both, void ab initio."
Section 8. Section 18-4-224, MCA, is amended to read:
"18-4-224. Contract clauses -- rules. (1) The department may
adopt rules permitting or requiring, in its discretion, permit
or require the inclusion of clauses providing for adjustments in prices, time of performance, or other appropriate contract
provisions relating to the following subjects:
(a) the unilateral right of the state to order in writing:
(i) changes in the work within the scope of the contract; and
(ii) temporary work stoppage or delay of performance; and
(b) variations occurring between estimated quantities of work in a contract and actual quantities.
(2) Adjustments in price pursuant to clauses established under subsection (1) must be computed in one or more of the following ways:
(a) by agreement on a fixed price adjustment before commencement of the pertinent performance or as soon
commencement of performance as practicable;
(b) by unit prices specified in the contract or subsequently agreed upon;
(c) by the costs attributable to the events or situations under
such clauses established under subsection (1) with adjustment
of profit or fee, all as specified in the contract or subsequently agreed upon; or
such any other manner as the contracting parties may mutually agree ; or (e) in the absence of agreement by the parties, by a unilateral determination by the state of the costs attributable to the
events or situations under such clauses with adjustment of profit or fee, all as computed by the state in accordance with
applicable sections of the rules adopted under 18-4-225.
(3) The department may
adopt rules permitting or requiring, in its discretion, permit or require the inclusion in state
contracts of clauses providing for appropriate remedies and relating to the following subjects:
(a) liquidated damages, as appropriate;
(b) specified excuses for delay or nonperformance;
(c) termination of the contract for default; and
(d) termination of the contract, in whole or in part, for the convenience of the state.
(4) The director or the head of a purchasing agency may vary the clauses established by the department under subsections
(1) and (3) for inclusion in any particular state contract. Any variations must be supported by a written determination that
states the circumstances justifying
such the variation. Notice of any material variation must be stated in the invitation for
bids or request for proposals.
(5) Regardless of a provision in a contract, the department may accept a lower price or better value offered by a contractor."
Section 9. Section 18-4-241, MCA, is amended to read:
"18-4-241. Authority to remove or suspend
from vendors' list vendor. (1) The department may remove a person
vendor for cause from consideration for award of contracts by the state. The removal may not be for a period of more than 3
(2) The department may temporarily suspend a
person vendor from consideration for award of contracts if there is probable
cause to believe that the person vendor has engaged in activities that may lead to removal. The suspension may not be for a
period exceeding 3 months unless If an indictment has been issued for an offense that would be a cause for removal under
subsection (3), in which case the suspension must, at the request of the attorney general, remain in effect at a minimum
until after the trial of the suspended person vendor. The authority to remove or suspend must be exercised in accordance
with rules adopted by the department.
(3) The causes for removal or suspension include the following:
(a) violation of contract provisions, as set forth in subsections (3)(a)(i) and (3)(a)(ii), of a character
which that is regarded
by the department to be so serious as to justify removal action:
(i) deliberate failure without good cause to perform in accordance with the specifications or within the time limit provided in the contract; or
(ii) a recent record of failure to perform or of unsatisfactory performance in accordance with the terms of one or more contracts, provided that failure to perform or unsatisfactory performance caused by acts beyond the control of the contractor may not be considered to be a basis for removal;
(b) failure to respond to a number of solicitations over a period of time as determined by the department in accordance
, and after adequate written notice to the affected person of the intent to remove or suspend or failure to provide
the department with a correct address;
(c) any other cause that the department determines to be so serious and compelling as to affect responsibility as a state
contractor, including removal by another governmental entity
for any cause listed in the department's rules; and
(d) failure to comply with the provisions of Title 39, chapter 51, or Title 39, chapter 71.
(4) The department shall issue a written decision to remove or suspend a vendor, stating the reasons for the action taken,
for reasons other than those reasons provided in subsection (3)(b). A copy of the decision must be mailed or otherwise
furnished immediately to the
person vendor involved."
Section 10. Section 18-4-242, MCA, is amended to read:
Remedies prior to and after award Exclusive remedies for unlawful solicitation or award. (1) If This
section establishes the exclusive remedies for a solicitation or award of a contract is determined to be in violation of the
law , the.
(2) Except for small purchases or limited solicitations made pursuant to 18-4-305, a bidder, offeror, or contractor aggrieved in connection with the solicitation or award of a contract may protest to the department. The protest must be submitted to the department in writing no later than 14 days after execution of the contract.
(3) If the protest is not resolved by mutual agreement, the department shall issue in writing a decision on the protest within 30 days after receipt of the protest. The decision must:
(a) state the reason for the action taken by the department with regard to the contract; and
(b) inform the aggrieved party of the party's right to request, within 14 days after the date of the department's written decision, a contested case hearing pursuant to the Montana Administrative Procedure Act.
(4) In a protest or contested case proceeding, the department may
apply the remedies, in an appropriate case, order a
remedy provided in subsections (2) and (3) subsection (5) or (6). (2)(5) If prior to before an award it is determined that a solicitation or proposed award of a contract is in violation of law,
the solicitation or proposed award must may be:
(a) canceled; or
(b) revised to comply with the law.
(3)(6) (a) If after an award it is determined that a solicitation or award of a contract is in violation of law and the person
awarded the contract has not acted fraudulently or in bad faith, the contract may be:
(i) ratified and affirmed, provided it is determined that doing so is in the best interests of the state; or
(ii) terminated, and the person awarded the contract must be compensated for the actual expenses reasonably incurred under
the contract, plus a reasonable profit,
prior to before the termination.
(b) If after an award it is determined that a solicitation or award of a contract is in violation of law and the person awarded the contract has acted fraudulently or in bad faith, the contract may be:
(i) declared void; or
(ii) ratified and affirmed if
such that action is in the best interests of the state, without prejudice to the state's rights to
appropriate damages. (4) In the event the matter is reviewed by a court, the court may apply the same remedies provided in subsections (2) and
(7) The exclusive method of judicial review of a solicitation or award by the department pursuant to this chapter is by a petition for judicial review pursuant to 2-4-702. In a proceeding pursuant to that section, the court may, in an appropriate case, order a remedy provided by subsection (5) or (6) of this section. Except as provided in subsections (6)(a)(ii) and (6)(b)(ii), there is no right under any legal theory to recover a form of damages or expenses for a solicitation or award of a contract in violation of law. Any other claim, cause of action, or request for relief for solicitations of awards allegedly made in violation of law may not be heard or granted by a district court other than as provided in this section.
(8) The state is not required to delay, halt, or modify the procurement process pending the result of a protest, contested case proceeding, or judicial review.
(9) The department may adopt rules governing the protest of solicitations and awards."
Section 11. Section 18-4-302, MCA, is amended to read:
"18-4-302. Methods of source selection. (1) Unless otherwise authorized by law, all state contracts for supplies and
services must be awarded by
competitive sealed bidding, pursuant to 18-4-303, except as provided in 18-4-133, 18-4-304
through 18-4-306, chapters 5 and 8 of a source selection method provided for in this title , and subsections (2) and (3) of this
section. Supplies or services offered for sale, lease, or rental by public utilities are exempt from this requirement if the
prices of the supplies or services are regulated by the public service commission or other governmental authority.
(2) At the time that the department or
a purchasing another agency opens bids or proposals, if a supplier's current publicly
advertised or established catalog price is received at or before the time that the bids or proposals are opened and is less than
the bid of the lowest responsible and responsive bidder or offeror or improves upon the conditions for the best proposal
received using the same factors and weights included in the proposal, the department or purchasing agency may reject all
bids and purchase the supply from that supplier without meeting the requirements of 18-4-303 through 18-4-306.
(3) An office supply procured by the department's central stores program
through bulk purchase or procured under a term
contract may be purchased by a purchasing an agency, without meeting the requirements of 18-4-303 through 18-4-306,
from a supplier whose publicly advertised price, established catalog price, or discount price offered to the purchasing
agency is less than the price offered by the central stores program or under the term contract if the office supply conforms
in all material respects to the terms, conditions, and quality offered by the central stores program or under the term contract.
A state office supply term contract must include a provision by which the contracting parties acknowledge and agree to the
provisions of this subsection."
Section 12. Section 18-4-303, MCA, is amended to read:
"18-4-303. Competitive sealed bidding. (1) An invitation for bids must be issued and must include a purchase description and conditions applicable to the procurement.
(2) Adequate public notice of the invitation for bids must be given a reasonable time
prior to before the date set forth
therein in the invitation for the opening of bids, in accordance with rules adopted by the department. Notice may include
publication in a newspaper of general circulation at a reasonable time prior to before the bid opening.
(3) Bids must be opened publicly
in the presence of one or more witnesses at the time and place designated in the
invitation for bids. Each bidder has the right to be present, either in person or by agent, when the bids are opened and has
the right to examine and inspect all bids. The amount of each bid and such other relevant information as may be specified
by rule, together with the name of each bidder, must be recorded. The record must be open to public inspection. After the
time of award, all bids and bid documents must be open to public inspection in accordance with the provisions of 2-6-102
and are subject to the requirements of subsection (4).
(4) Bids must be available for public inspection when the bids are opened if:
(a) the invitation for bids is issued by a state agency to contract with the private sector to provide services currently conducted by state employees; and
(b) acceptance of bids would result in the displacement of five or more state employees.
(5) Bids must be unconditionally accepted without alteration or correction, except as authorized in this chapter. Bids must
be evaluated based on the requirements set forth in the invitation for bids, which may include criteria to determine
acceptability, such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those
criteria that will affect the bid price and be considered in evaluation for award must be objectively measurable, such as
discounts, transportation costs, and total or life-cycle costs. The invitation for bids
shall must set forth the evaluation
criteria to be used. Only criteria set forth in the invitation for bids may be used in bid evaluation.
(6) Correction or withdrawal of inadvertently erroneous bids, before or after award, or cancellation of awards or contracts
such bid mistakes may be permitted in accordance with rules adopted by the department. After bid opening, no
changes in bid prices or other provisions of bids prejudicial to the interest of the state or fair competition may not be
permitted. Except as otherwise provided by rule, all decisions to permit the correction or withdrawal of bids or to cancel
awards or contracts based on bid mistakes must be supported by a written determination made by the department.
(7) The contract must be awarded with reasonable promptness by written notice to the lowest responsible and responsive
bidder whose bid meets the requirements and criteria set forth in the invitation for bids
, including the preferences
established by Title 18, chapter 1, part 1, including the preferences established by Title 18, chapter 1, part 1. If all bids
exceed available funds as certified by the appropriate fiscal officer and the low responsive and responsible and responsive
bid does not exceed such the funds by more than 5%, the director or the head of a purchasing agency is authorized may, in
situations where in which time or economic considerations preclude resolicitation of a reduced scope, to negotiate an
adjustment of the bid price, including changes in the bid requirements, with the low responsive and responsible and
responsive bidder in order to bring the bid within the amount of available funds.
(8) When it is considered impractical to initially prepare a purchase description to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers, to be followed by an invitation for bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation."
Section 13. Section 18-4-304, MCA, is amended to read:
"18-4-304. Competitive sealed proposals. (1)
When, under rules adopted by the department, the director, the head of a
purchasing agency, or a designee of either officer above the level of the procurement officer determines that the use of
competitive sealed bidding is either not practicable or not advantageous to the state, a contract may be entered into by
competitive sealed proposals. The department may provide by rule that it is either not practicable or not advantageous to
the state to procure specified types of supplies and services by competitive sealed bidding. The department may procure
supplies and services through competitive sealed proposals.
(2) Proposals must be solicited through a request for proposals.
(3) Adequate public notice of the request for proposals must be given in the same manner as provided in 18-4-303(2).
(4) Proposals must be opened so as to avoid disclosure of contents to competing offerors during the process of negotiation. A register of proposals must be prepared in accordance with rules adopted by the department and must be open for public inspection after contract award. After the contract is executed, proposal documents may be inspected by the public, subject to the limitations of the Uniform Trade Secrets Act, Title 30, chapter 14, part 4.
(5) The request for proposals must state the evaluation factors and their relative importance
of price and other evaluation
factors. The award must be made to the responsible and responsive offeror whose proposal best meets the evaluation
criteria. Other factors or criteria may not be used in the evaluation. The contract file must demonstrate the basis on which
the award is made.
As provided in the request for proposals and under rules adopted by the department, discussions with responsible
offerors who submit apparently responsive proposals may be conducted for the purpose of clarification in order to assure
full understanding of and responsiveness to the solicitation requirements. Offerors must be accorded fair and equal
treatment with respect to any opportunity for discussion and revision of proposals, and revisions may be permitted, after
submissions and prior to award, for the purpose of obtaining best and final offers. The department may discuss a proposal
with an offeror for the purpose of clarification or revision of the proposal. In conducting discussions, there may not be
disclosure of any information derived from proposals submitted by competing offerors. The department may require the
submission of cost or pricing data in connection with an award under this section. (7) The award must be made to the responsible offeror whose proposal is determined in writing to be the most
advantageous to the state, taking into consideration price, including the preference in 18-1-102, and the evaluation factors
set forth in the request for proposals. No other factors or criteria may be used in the evaluation. The contract file must
contain the basis on which the award is made."
Section 14. Section 18-4-305, MCA, is amended to read:
"18-4-305. Small purchases and limited solicitations. Any procurement not exceeding the amount established by rule may be made in accordance with small purchase or limited solicitation procedures established by the department. Procurement requirements may not be artificially divided so as to constitute a small purchase or limited solicitation under this section."
Section 15. Section 18-4-309, MCA, is amended to read:
"18-4-309. Prequalification of suppliers. Prospective suppliers may be prequalified in accordance with department rules
for particular types of supplies and services.
Solicitation mailing lists of potential contractors must include but not be
limited to such prequalified suppliers."
Section 16. Section 18-4-310, MCA, is amended to read:
"18-4-310. Types of contracts.
Subject to the limitations of this section, any Any type of contract that will promote the
best interests of the state may be used , except that the use of a cost-plus-percentage-of-cost contract is prohibited. A
cost-reimbursement contract may be used only when a determination is made in writing that such contract is likely to be
less costly to the state than any other type or that it is impracticable to obtain the supplies or services required except under
such a contract."
Section 17. Section 18-4-312, MCA, is amended to read:
"18-4-312. Bid and contract performance security. (1) For state contracts for the procurement of services or of supplies, the department may in its discretion require:
(a) bid security;
(b) contract performance security to guarantee the faithful performance of the contract and the payment of all laborers,
materialmen, mechanics, and subcontractors; or
(c) both bid and contract performance security.
(2) If security is required under subsection (1), the following types of security may be required to be deposited with the state:
(a) a sufficient bond with a licensed surety company as surety;
(b) an irrevocable letter of credit not to exceed $100,000 in accordance with the provisions of Title 30, chapter 5, part 1;
(c) money of the United States;
(d) a cashier's check, certified check, bank money order, certificate of deposit, money market certificate, or bank draft that is drawn or issued by a federally chartered or state-chartered bank or savings and loan association that is insured by or for which insurance is administered by the federal deposit insurance corporation or that is drawn and issued by a credit union insured by the national credit union share insurance fund.
(3) The amount and type of the security must be determined by the department to be sufficient to cover the risk involved to
the state. The security must be payable to the state of Montana
and. Contract performance security must remain in effect for
the entire contract period. In determining the amount and type of contract performance security required for each contract,
the department shall consider the nature of the performance and the need for future protection to the state. In determining
the need for and amount of bid security, the department shall consider the risks involved to the state if a successful bidder
or offeror fails to enter into a formal contract. The considerations must include but are not limited to the type of supply or
service being procured, the dollar amount of the proposed contract, and delivery time requirements. The department may
adopt rules to assist it in making these determinations and in protecting the state in dealing with irrevocable letters of credit.
Bid and contract security requirements must be included in the invitations for bids or requests for proposals.
(4) If a bidder or offeror to whom a contract is awarded fails or refuses to enter into the contract or provide contract performance security, as required by the invitation for bid or request for proposal, after notification of award, the department may, in its discretion, require the bidder to forfeit the bid security to the state and become immediately liable on the bid security, but not in excess of the sum stated in the security. The liability of the bidder or offeror, the maker of the security or bid bond, or the liability on the bid bond or other security may not exceed the amount specified in the invitation for bid or request for proposal.
(5) Negotiable instruments provided as bid security must be refunded to those bidders or offerors whose bids or proposals are not accepted.
(6) The provisions of Title 18, chapter 1, part 2, and Title 18, chapter 2, parts 2 and 3, do not apply to procurements under this chapter."
Section 18. Section 18-4-402, MCA, is amended to read:
"18-4-402. Cooperative purchasing authorized. The department may participate in, sponsor, conduct, or administer a
cooperative purchasing agreement for the procurement of any supplies or services with one or more public procurement
units in accordance with an agreement entered into between the participants independent of the requirements of part 3.
cooperative Cooperative purchasing may include purchasing through federal supply schedules of the United States general
services administration, joint or multi-party multiparty contracts between public procurement units and open-ended state
public procurement unit contracts that are made available to local public procurement units."
Section 19. Section 18-8-211, MCA, is amended to read:
"18-8-211. Coordination with other statutes. (1) This part need not be complied with by an agency when the contracting
authority makes a finding in accordance with this or any other applicable law that an emergency requires the immediate
execution of the work involved.
Nothing in this This part relieves does not relieve the contracting authority from complying
with applicable law limiting emergency expenditures.
(2) The limitation on the preparation of working drawings contained in 18-2-111 applies to this part.
(3) The procedure for appointment of architects and consulting engineers pursuant to 18-2-112 applies to this part, except that the agency shall select its proposed list of three architects or consulting engineers in accordance with this part prior to submission to the department of administration.
(4) The exception for services estimated to cost less than $5,000 in 18-8-105 applies to this part."
Section 20. Section 60-2-112, MCA, is amended to read:
"60-2-112. Competitive bidding. (1) Except as provided in subsections (2) through (4), when the estimated cost of any
work exceeds $50,000, the commission shall let the contract by competitive bidding to the lowest responsible and
responsive bidder. Award must be made upon the notice and terms that the commission prescribes by its rules.
except when prohibited by federal law, the commission shall make awards and contracts in accordance with 18-1-102 and
18-1-112. However, except when prohibited by federal law, the commission shall make awards and contracts in accordance
with 18-1-102 and 18-1-112.
(2) The commission may let a contract by means other than competitive bidding if it determines that special circumstances so require. The commission shall specify the special circumstances in writing.
(3) The commission may enter into contracts with units of local government for the construction of projects without competitive bidding if it finds that the work can be accomplished at lower total costs, including total costs of labor, materials, supplies, equipment usage, engineering, supervision, clerical and accounting services, administrative costs, and reasonable estimates of other costs attributable to the project.
(4) The commission may delegate to the department the authority to enter, without competitive bidding, agreed-upon price contracts for projects costing $50,000 or less."
Section 21. Repealer. Sections 18-4-131, 18-4-225, 18-8-101, 18-8-102, 18-8-103, 18-8-104, 18-8-105, 18-8-106, 18-8-111, and 18-8-112, MCA, are repealed.
Section 22. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
Section 23. Retroactive applicability. [Sections 2 and 10] and the repeal of 18-4-131 apply retroactively, within the meaning of 1-2-109, in the case of an unlawful solicitation for bid or unlawful award of a contract, to a claim, to a cause of action, or to a request for relief other than those authorized by [section 10], unless a complaint was filed in district court prior to January 1, 1992.
Section 24. Effective dates. (1) Except as provided in subsection (2), [this act] is effective October 1, 1997.
(2) [Sections 2, 10, 22, and 23 and this section] and the repeal of 18-4-131 are effective on passage and approval.