Bill Summary – FastDemocracy

SENATE BILL NO. 317
     May 02, 2023, Introduced by Senators MCDONALD RIVET, DAMOOSE, MCCANN,
       POLEHANKI, WOJNO, CAVANAGH, SINGH, MCMORROW, BAYER, CHANG, SHINK,
       SANTANA, HERTEL and BELLINO and referred to the Committee on Regulatory Affairs.
          A bill to amend 1984 PA 431, entitled
    "The management and budget act,"
    by amending section 261 (MCL 18.1261), as amended by 2020 PA 174.
                   THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 261. (1) The department shall provide for the purchase
 of, the contracting for, and the providing of supplies, materials,
 services, insurance, utilities, third party financing, equipment,
 printing, and all other items as needed by state agencies for which
 the legislature has not otherwise expressly provided. If consistent
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 with federal statutes, law, in all purchases made by the
 department, all other things being equal, preference shall must be
 given to products manufactured or services offered by Michigan-
 based firms or by facilities with respect to which the operator is
 designated as a clean corporate citizen under part 14 of the
 natural resources and environmental protection act, 1994 PA 451,
 MCL 324.1401 to 324.1429, or to biobased products whose content is
 sourced in this state. The department shall solicit competitive
 bids from the private sector whenever practicable to efficiently
 and effectively meet the state's needs. The department shall first
 determine that competitive solicitation of bids in the private
 sector is not appropriate before using any other procurement method
 for an acquisition.
       (2) The department shall make all discretionary decisions
 concerning the solicitation, award, amendment, cancellation, and
 appeal of state contracts.
       (3) The department shall utilize competitive solicitation for
 all purchases authorized under this act unless 1 or more of the
 following apply:
       (a) Procurement of goods or services is necessary for the
 imminent protection of public health or safety or to mitigate an
 imminent threat to public health or safety, as determined by the
 director or his or her the designated representative of the
 director.
       (b) Procurement of goods or services is for emergency repair
 or construction caused by unforeseen circumstances when the repair
 or construction is necessary to protect life or property.
       (c) Procurement of goods or services is in response to a
 declared state of emergency or state of disaster under the
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 emergency management act, 1976 PA 390, MCL 30.401 to 30.421.
        (d) Procurement of goods or services is in response to a
 declared state of emergency under 1945 PA 302, MCL 10.31 to 10.33.
        (d) (e) Procurement of goods or services is in response to a
 declared state of energy emergency under 1982 PA 191, MCL 10.81 to
 10.89.
        (e) (f) Procurement of goods or services is within a state
 agency's purchasing authority delegated under subsection (4), and
 the state agency has established policies or procedures approved by
 the department to ensure that goods or services are purchased by
 the state agency at fair and reasonable prices.
        (4) The department may delegate its procurement authority to
 other state agencies within dollar limitations and for designated
 types of procurements. The department may withdraw delegated
 authority upon a finding that a state agency did not comply with
 departmental procurement directives. If a state agency has the
 department's procurement authority delegated to it under this
 subsection and if it chooses to exercise an option under an
 existing procurement contract to continue that procurement
 contract, before exercising that option, the state agency shall
 must first obtain written approval from the department that
 exercising the option is in the best interest of this state.
        (5) The department may enter into lease purchases or
 installment purchases for periods not exceeding the anticipated
 useful life of the items purchased unless otherwise prohibited by
 law.
        (6) The department shall issue directives for the procurement,
 receipt, inspection, and storage of supplies, materials, and
 equipment, and for printing and services needed by state agencies.
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 The department shall provide standard specifications and standards
 of performance applicable to purchases.
       (7) The department may enter into a cooperative purchasing
 agreement with 1 or more other states or public entities for the
 purchase of goods, including, but not limited to, recycled goods,
 and services necessary for state programs.
       (8) In awarding a contract under this section, the department
 shall give a preference of up to 10% of the amount of the contract
 to a qualified disabled veteran. If the qualified disabled veteran
 otherwise meets the requirements of the contract solicitation and
 with the preference is the lowest bidder, the department shall must
 enter into a procurement contract with the qualified disabled
 veteran under this act. If 2 or more qualified disabled veterans
 are the lowest bidders on a contract, all other things being equal,
 the qualified disabled veteran with the lowest bid shall must be
 awarded the contract under this act.
       (9) It is the goal of the department to award each year not
 less than 5% of its total expenditures for construction, goods, and
 services to qualified disabled veterans. The department may count
 toward its 5% yearly goal described in this subsection that portion
 of all procurement contracts in which the business entity that
 received the procurement contract subcontracts with a qualified
 disabled veteran. Each year, the department shall report to each
 house of the legislature on all of the following for the
 immediately preceding 12-month period:
       (a) The number of qualified disabled veterans who that
 submitted a bid for a state procurement contract.
       (b) The number of qualified disabled veterans who that entered
 into procurement contracts with this state and the total value of
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 those procurement contracts.
       (c) Whether the department achieved the goal described in this
 subsection.
       (d) The recommendations described in subsection (10).
       (10) Each year, the department shall review the progress of
 all state agencies in meeting the 5% goal with input from statewide
 veterans service organizations and from the business community,
 including businesses owned by qualified disabled veterans, and
 shall make recommendations to each house of the legislature
 regarding continuation, increases, or decreases in the percentage
 goal. The recommendations shall must be based upon on the number of
 businesses that are owned by qualified disabled veterans and on the
 continued need to encourage and promote businesses owned by
 qualified disabled veterans.
       (11) To assist the department in reaching the goal described
 in subsection (9), the governor shall recommend to the legislature
 changes in programs to assist businesses owned by qualified
 disabled veterans.
       (12) Beginning October 1, 2017, the department and all state
 agencies may not enter into a contract with a person to acquire or
 dispose of supplies, services, or information technology unless the
 contract includes a representation that the person is not currently
 engaged in, and an agreement that the person will not engage in,
 the boycott of a person based in or doing business with a strategic
 partner.
       (13) The following records are exempt from disclosure under
 the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246,
 as provided in this subsection:
       (a) A bid, quote, or proposal submitted in connection with the
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 authority granted under this section, and records created in the
 preparation for and evaluation of the bid, quote, or proposal until
 the time of final notification of award of the contract.
       (b) Records containing a trade secret as defined under section
 2 of the uniform trade secrets act, 1998 PA 448, MCL 445.1902, or
 financial or proprietary information submitted in connection with
 the authority granted under this section.
       (14) The department shall develop policies and procedures that
 require all procurement contracts entered into by the department or
 a state agency, including departments that have delegated
 procurement authority under this act, to include performance-
 related liquidated damages or performance targets with incentives
 in all procurement contracts. The department shall also develop
 policies and procedures that require the department or state agency
 to enforce these provisions. Departments or state agencies acting
 under delegated authority shall inform the department of relevant
 performance issues. Exceptions to the inclusion or enforcement of
 performance-related contract provisions may only be granted by the
 department as provided in a written or electronic record by the
 department.
       (15) Beginning October 1, 2023, if the lowest responsive and
 responsible best value bidder on a contract in whole or in
 awardable part described in this section is not a Michigan
 business, all bidders on that contract that are Michigan businesses
 have 7 days to resubmit their bids in whole or awardable part to
 match or beat the bid from the bidder that is not a Michigan
 business. If only 1 Michigan business that bid on the contract
 resubmits a bid under this subsection that matches or beats the
 successful bid from the bidder that is not a Michigan business, the
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 department must enter into the contract with that Michigan
 business. If 2 or more Michigan businesses that bid on the contract
 resubmit a bid under this subsection that matches or beats the
 successful bid from the bidder that is not a Michigan business, the
 department must enter into the contract with the Michigan business
 that submitted the lowest responsive and responsible best value bid
 as determined by the department. The department shall make all
 discretionary determinations to implement this subsection. The
 department shall issue directives to all state agencies to
 implement this subsection.
       (16) (15) As used in this section:
       (a) "Biobased product" means a product granted the United
 States Department of Agriculture certified biobased product label.
       (b) "Boycott" means refusal to have dealings with, divest
 from, or otherwise engage with a person. Boycott does not include 1
 or more of the following:
       (i) A decision based on bona fide business or economic reasons.
       (ii) A boycott against a public entity of a foreign state when
 the boycott is applied in a nondiscriminatory manner.
       (iii) Conduct necessary to comply with applicable law in the
 person's home jurisdiction.
       (c) "Financial or proprietary information" means information
 that has not been publicly disseminated or which that is
 unavailable from other sources, the release of which might cause
 the submitter of the information competitive harm.
       (d) "Michigan business" means a business that meets all of the
 following:
       (i) Is a Michigan business, as that term is described in
 section 268.
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       (ii) Meets at least 1 of the following:
       (A) Is a business that has a global, North American, or United
 States headquarters located in this state.
       (B) Is a business that has the majority of its employee
 payroll paid to employees who are residents of this state and the
 majority of its employees are residents of this state.
       (iii) If the contract is for goods, those goods were
 manufactured, mined, or harvested entirely in this state.
       (e) (d) "Person" means any of the following:
       (i) An individual, corporation, company, limited liability
 company, business association, partnership, society, trust, or any
 other nongovernmental entity, organization, or group.
       (ii) Any governmental entity or agency of a government.
       (iii) Any successor, subunit, parent company, or subsidiary of,
 or company under common ownership or control with, any entity
 described in subparagraph (i) or (ii).
       (f) (e) "Qualified disabled veteran" means a business entity
 that is 51% or more owned by 1 or more veterans with a service-
 connected disability.
       (g) (f) "Service-connected disability" means a disability
 incurred or aggravated in the line of duty in the active military,
 naval, or air service as described in 38 USC 101(16).
       (h) (g) "Strategic partner" means a strategic partner
 described in 22 USC 8601 to 8606.8607.
       (i) (h) "Veteran" means an individual who meets both of the
 following:
       (i) Is a veteran, as that term is defined in section 1 of 1965
 PA 190, MCL 35.61.
       (ii) Was released from his or her service with an honorable or
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 general discharge.
        Enacting section 1. This amendatory act does not take effect
 unless Senate Bill No. 316 of the 102nd Legislature is enacted into
 law.
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Statutes affected: 
Senate Introduced Bill: 18.1261