LB461 LB461
2024 2024
LEGISLATIVE BILL 461
Approved by the Governor February 13, 2024
Introduced by Arch, 14; Cavanaugh, M., 6; Brewer, 43.
A BILL FOR AN ACT relating to government procurement; to amend sections
16-321.01, 17-568.02, 57-1503, 60-3,100, 70-1033, 71-5667, 73-101, 73-301,
73-501, 73-502, 73-503, 73-504, 73-505, 73-506, 73-507, 73-508, 73-509,
73-510, 73-603, 81-154.01, 81-156, 81-161, 81-161.01, 81-161.02, 81-162,
81-1101, 81-1102, 81-1108.10, 81-1108.16, 81-1109, 81-1118.01, 81-1118.05,
81-1118.07, and 83-145, Reissue Revised Statutes of Nebraska, sections
66-1009, 81-153, 81-161.03, 81-1119, 81-1120, and 81-3721, Revised Statutes Cumulative Supplement, 2022, and sections 71-5666, 71-5668,
71-5669.01, 81-145, 81-1118, 81-1118.02, 85-2605, 85-3106, and 85-3110,
Revised Statutes Supplement, 2023; to name an act; to change, transfer,
and eliminate provisions relating to the materiel division of the Department of Administrative Services and procurement of services and personal property; to provide, change, and eliminate definitions; to eliminate a resident bidder preference; to eliminate obsolete provisions;
to harmonize provisions; to provide duties for the Revisor of Statutes; to repeal the original sections; and to outright repeal sections 73-101.01,
73-101.02, 81-146, 81-159, 81-1118.03, 81-1118.04, and 81-1118.06, Reissue Revised Statutes of Nebraska, and sections 73-701 and 81-154, Revised Statutes Cumulative Supplement, 2022.
Be it enacted by the people of the State of Nebraska,
Section 1. Sections 1 to 19 of this act shall be known and may be cited as the State Procurement Act.
Sec. 2. Section 73-501, Reissue Revised Statutes of Nebraska, is amended to read:
73-501 The purposes of the State Procurement Act sections 73-501 to 73-510
are to establish a standardized, open, and fair process for selection of
contracts contractual services, using performance-based contracting methods to
the maximum extent practicable, and to create an accurate reporting of expended funds for such contracts contractual services. This process shall promote a standardized method of selection for state contracts for services, assuring a fair assessment of qualifications and capabilities for project completion or
compliance with specifications. There shall also be an accountable, efficient reporting method of expenditures for these contracts services.
Sec. 3. Section 73-502, Reissue Revised Statutes of Nebraska, is amended to read:
73-502 For purposes of the State Procurement Act sections 73-501 to
73-510:
(1) Contract includes any contract for services and contract for personal property;
(2) Contract for personal property means any contract entered into by the state with another party for a stated consideration, which provides that the state agency is to receive the personal property or use of such personal property furnished by the other party. Contract for personal property includes leases;
(3) (1) Contract for services means any contract that directly engages the time or effort of an independent contractor whose purpose is to perform an
identifiable task, study, or report rather than to furnish an end item of
supply, goods, equipment, or material;
(4) Cooperative agreement means a legal instrument reflecting a relationship between the State of Nebraska and any other entity where (a) the principal purpose of the relationship is to transfer a thing of value to the entity to carry out a public purpose of support or stimulation by law instead of acquiring property or services for the direct benefit of the State of
Nebraska and (b) substantial involvement is expected between the State of
Nebraska and the entity when carrying out the activity contemplated in the agreement;
(5) (2) Division means the materiel division of the Department of
Administrative Services;
(6) (3) Emergency means necessary to meet an urgent or unexpected requirement or when health and public safety or the conservation of public resources is at risk;
(7) Grant agreement means a legal instrument reflecting a relationship between the State of Nebraska and any other entity where (a) the principal purpose of the relationship is to transfer a thing of value to the entity to
carry out a public purpose of support or stimulation by law instead of
acquiring property or services for the direct benefit of the State of Nebraska and (b) substantial involvement is not expected between the State of Nebraska and the entity when carrying out the activity contemplated in the agreement;
(8) (4) Occasional means seasonal, irregular, or fluctuating in nature;
(9) Personal property includes all materials, supplies, furniture,
equipment, printing, stationery, automotive and road equipment, and other chattels, goods, wares, and merchandise;
-1-
LB461 LB461
2024 2024
(10) (5) Sole source means of such a unique nature that the contractor selected is clearly and justifiably the only practicable source to provide the service or personal property. Determination that the contractor selected is
justifiably the sole source is based on either the uniqueness of the service or
personal property or sole availability at the location required;
(11) (6) State agency means any agency, board, or commission of this state, except for the University of Nebraska or the Nebraska state colleges.
For purposes of procurement of services, state agency does not include other than the University of Nebraska, the Nebraska state colleges, the courts, the Legislature, or any officer or state agency established by the Constitution of
Nebraska; and
(12) (7) Temporary means a finite period of time with respect to a specific task or result relating to a contract for services.
Sec. 4. Section 81-1118.05, Reissue Revised Statutes of Nebraska, is amended to read:
81-1118.05 The materiel division of the Department of Administrative Services shall:
(1) Establish by rules and regulations a process for resolving complaints from both vendors and state agencies;
(2) Maintain a record and written justification of purchases as follows:
(a) A list of and explanation for emergency purchases;
(b) A list of open market purchases made by the division; and
(c) A list of all purchases waived from the minimum time period requirement between bid advertisement and bid opening; and
(3) Have the authority to enter into joint purchasing agreements with political subdivisions in the state.
Sec. 5. Section 73-505, Reissue Revised Statutes of Nebraska, is amended to read:
73-505 State agency directors shall be responsible for maintaining accurate documentation of the process used for selection of all contracts for services and for ensuring and documenting that services and personal property required under the contract are being performed or provided in compliance with the terms of the contract for services. Such documentation shall be kept with each contract for services.
Sec. 6. Section 73-503, Reissue Revised Statutes of Nebraska, is amended to read:
73-503 (1) All state agencies shall process and document all contracts for services through the state accounting system. The Director of Administrative Services shall specify the format and type of information for state agencies to
provide and approve any alternatives to such formats. All state agencies shall enter the information on new contracts for services and amendments to existing contracts for services. State agency directors shall ensure that contracts for services are coded appropriately into the state accounting system.
(2) The requirements of this section also apply to the courts, the Legislature, and any officer or state agency established by the Constitution of
Nebraska, but not to the University of Nebraska or the Nebraska state colleges.
(3) The Nebraska state colleges shall document all contracts for services through the state accounting system.
(3) (4) The Director of Administrative Services shall establish a centralized database, either through the state accounting system or through an
alternative system, which specifically identifies where a copy of each contract for services may be found.
Sec. 7. Section 73-504, Reissue Revised Statutes of Nebraska, is amended to read:
73-504 Except as provided in section 13 of this act 73-507:
(1) All state agencies shall comply with the review and competitive bidding processes provided in this section for contracts for services. Unless otherwise exempt, no state agency shall expend funds for contracts for services without complying with this section;
(2) All proposed state agency contracts for services in excess of fifty thousand dollars shall be bid by a competitive formal bidding process in the manner prescribed by the division procurement manual or a process approved by
the Director of Administrative Services. Bidding for contracts for services may be performed at the state agency level or by the division. The division shall administer the public notice and bidding procedures for any contract for personal property Any state agency may request that the division conduct the competitive bidding process;
(3) If the bidding process is at the state agency level, then state agency directors shall ensure that bid documents for each contract for services in
excess of fifty thousand dollars are prereviewed by the division and that any changes to the proposed contract that differ from the bid documents in the proposed contract for services are reviewed by the division before signature by
the parties;
(4) State agency directors, in cooperation with the division, shall be
responsible for appropriate public notice of an impending contract contractual services project in excess of fifty thousand dollars in accordance with the division's procurement manual and the State Procurement Act sections 73-501 to
73-510; and
(5) State agency directors, in cooperation with the division, shall be
responsible for ensuring that a request for a contract contractual services in
excess of fifty thousand dollars is filed with the division for dissemination or website access to vendors interested in competing for contracts; and for services.
-2-
LB461 LB461
2024 2024
(6) When the division is responsible for the procurement of services or
personal property, the state agency shall at the time, in the form, and for the periods prescribed by the division, present to the division a detailed requisition for all services and personal property to be contracted.
Sec. 8. Section 81-161, Reissue Revised Statutes of Nebraska, is amended to read:
81-161 (1) All purchases, leases, or contracts which by law are required to be based on competitive bids shall be made only to the lowest responsible bidders bidder, taking into consideration, as applicable:
(a) The the best interests of the state; ,
(b) The the quality or performance of the personal property or services proposed to be supplied; ,
(c) The its conformity with the solicitation; specifications,
(d) The the purposes for which required; ,
(e) The and the times of delivery; .
(f) The life-cycle costs of the personal property in relation to the purchase price and specific use of the item;
(g) The performance of the personal property, taking into consideration any commonly accepted tests and standards of product usability and user requirements;
(h) The energy efficiency ratio as stated by the bidder for alternative choices of appliances or equipment;
(i) The information furnished by each bidder concerning life-cycle costs between alternatives for all classes of equipment, evidence of expected life,
repair and maintenance costs, and energy consumption on a per-year basis;
(j) The results of the United States Environmental Protection Agency tests on fleet performance of motor vehicles. Each bidder shall furnish information relating to such results; and
(k) Such other information as may be secured having a bearing on the decision to award the contract.
(2) In determining responsibility the lowest responsible bidder, in addition to price, the following elements shall be given consideration:
(a) The ability, capacity, and skill of the bidder to perform the contract required;
(b) The character, integrity, reputation, judgment, experience, and efficiency of the bidder;
(c) Whether the bidder can perform the contract within the time specified;
(d) The quality of performance of previous contracts; and
(e) The previous and existing compliance by the bidder with laws relating to the contract. ;
(f) The life-cycle costs of the personal property in relation to the purchase price and specific use of the item;
(g) The performance of the personal property, taking into consideration any commonly accepted tests and standards of product usability and user requirements;
(h) Energy efficiency ratio as stated by the bidder for alternative choices of appliances or equipment;
(i) The information furnished by each bidder concerning life-cycle costs between alternatives for all classes of equipment, evidence of expected life,
repair and maintenance costs, and energy consumption on a per-year basis;
(j) The results of the United States Environmental Protection Agency tests on fleet performance of motor vehicles. Each bidder shall furnish information relating to such results; and
(k) Such other information as may be secured having a bearing on the decision to award the contract.
(3) (2) Any appliance purchased or leased pursuant to this section shall be energy star certified, except that the materiel administrator may exempt the purchase or lease of an appliance from this subsection if he or she determines that the cost of compliance would exceed the projected energy cost savings.
(4) (3) All political subdivisions may follow the procurement principles set forth in this section if they are deemed applicable by the official authorized to make purchases for such political subdivision.
(5) (4) For purposes of this section, energy star certified means approval of energy usage by the United States Environmental Protection Agency and the United States Department of Energy. Such approval may be signified by the display of the energy star label.
Sec. 9. Section 81-161.01, Reissue Revised Statutes of Nebraska, is amended to read:
81-161.01 (1) A minimum of fifteen days shall elapse between the time formal bids are advertised and the time of their opening, except that this requirement may be waived by the materiel administrator upon a showing by the state using agency of an emergency, sole or specialized source, or other unique requirement.
(2) A solicitation shall be in the form of a public notice of the proposed purchase or lease and a general description of the personal property or
services needed in a paper of general circulation in the area where the agency will be operating or by any other method approved by the materiel administrator.
Sec. 10. Section 81-161.02, Reissue Revised Statutes of Nebraska, is amended to read:
81-161.02 (1) For the purposes of this section:
(a) Realistic price means a price at which the goods or services can actually and sufficiently be provided in accordance with the awarded contract
-3-
LB461 LB461
2024 2024
and price bid; and
(b) Reasonable price means the price of the goods or services is fair compensation for such goods or services.
(2) Any or all bids may be rejected by the state agency in accordance with the procurement manual. A state agency may reject a bid if the price is not reasonable or is not realistic.
(3) In considering whether a bid's price is not reasonable or not realistic, a state agency may consider factors, including prices bid by other bidders, the fair market value of the products or services, the availability of
the products or services, historical prices, or independent cost estimates materiel division. The materiel division may reject the bid of any bidder who has failed to perform a previous contract with the state. In any case where competitive bids are required and all bids are rejected, and the proposed purchase is not abandoned, new bids shall be solicited.
Sec. 11. Section 81-162, Reissue Revised Statutes of Nebraska, is amended to read:
81-162 A contract for personal property Contracts for purchases or leases may be made in any of the following forms:
(1) For the furnishing of specific personal property at specific prices;
(2) For the furnishing of personal property, according to the specifications, at a fixed rate for a minimum quantity, subject to furnishing a greater quantity at the same or a lesser rate; or
(3) For the furnishing of personal property, according to the specifications without a stated minimum at a rate stated, commonly known as a price agreement.
The form of the contract to be used in any case shall be subject to the discretion of the materiel division.
Sec. 12. Section 73-506, Reissue Revised Statutes of Nebraska, is amended to read:
73-506 State agency contracts for services shall be subject to the following requirements:
(1) Payments shall be made when contractual deliverables are received or
in accordance with specific contractual terms and conditions;
(2) State agencies shall not enter into contracts for services with an
unspecified or unlimited duration, and no contract for services shall be
amended to extend the duration of the contract for a period of more than fifty percent of the initial contract term. Following the adoption of any amendment to extend the contract for a period of fifty percent or less of the initial contract term, no further extensions of the original contract shall be
permitted. This subdivision does not prohibit the exercise of any renewal option expressly provided in the original contract;
(3) State agencies shall not structure contracts for services to avoid any of the requirements of the State Procurement Act sections 73-501 to 73-510; and
(4) State agencies shall not enter into contracts for services in excess of fifteen million dollars unless the state agency has