Bill Summary – FastDemocracy

CERTIFICATION OF ENROLLMENT
                               HOUSE BILL 1471
                       Chapter 140, Laws of 2024
                               68th Legislature
                             2024 Regular Session
                STATE PROCUREMENT—VARIOUS PROVISIONS
                      EFFECTIVE DATE: June 6, 2024
Passed by the House March 5, 2024                    CERTIFICATE
  Yeas 96 Nays 0
                                       I, Bernard Dean, Chief Clerk of the
                                       House of Representatives of the
            LAURIE JINKINS             State of Washington, do hereby
Speaker of the House of                certify that the attached is HOUSE
Representatives                        BILL 1471 as passed by the House of
                                       Representatives and the Senate on
                                       the dates hereon set forth.
Passed by the Senate February 28,
                                              BERNARD DEAN
  Yeas 49 Nays 0                                                   Chief Clerk
              DENNY HECK
President of the Senate
Approved March 18, 2024 3:06 PM                         FILED
                                                    March 19, 2024
                                                 Secretary of State
              JAY INSLEE                         State of Washington
Governor of the State of Washington
                                 HOUSE BILL 1471
                           AS AMENDED BY THE SENATE
                   Passed Legislature - 2024 Regular Session
     State of Washington         68th Legislature     2023 Regular Session
     By Representatives Stearns, Ramos, Gregerson, and Ryu; by request of
     Department of Enterprise Services
     Read first time 01/20/23.   Referred to Committee on State Government
     & Tribal Relations.
      AN ACT Relating to modifying state procurement procedures for
  competitive, sole source, convenience, and emergency goods and
  services contracts; and amending RCW 39.26.010, 39.26.070, 39.26.130,
  39.26.140, and 39.26.200.
  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
     Sec. 1.   RCW 39.26.010 and 2022 c 71 s 12 are each amended to
 read as follows:
     The definitions in this section apply throughout this chapter
 unless the context clearly requires otherwise.
     (1) "Agency" means any state office or activity of the executive
 and judicial branches of state government, including state agencies,
 departments, offices, divisions, boards, commissions, institutions of
 higher education as defined in RCW 28B.10.016, and correctional and
 other   types  of    institutions.   "Agency"   does not   include   a
 comprehensive   cancer   center   participating   in a   collaborative
 arrangement as defined in RCW 28B.10.930 that is operated in
 conformance with RCW 28B.10.930.
     (2) "Bid" means an offer, proposal, or quote for goods or
 services in response to a solicitation issued for such goods or
 services by the department or an agency of Washington state
 government.
                                       p. 1                     HB 1471.SL
     (3) "Bidder" means an individual or entity who submits a bid,
 quotation, or proposal in response to a solicitation issued for such
 goods or services by the department or an agency of Washington state
 government.
     (4) "Client services" means services provided directly to agency
 clients including, but not limited to, medical and dental services,
 employment and training programs, residential care, and subsidized
 housing.
     (5) "Community rehabilitation program of the department of social
 and health services" means any entity that:
     (a) Is registered as a nonprofit corporation with the secretary
 of state; and
     (b) Is recognized by the department of social and health
 services, division of vocational rehabilitation as eligible to do
 business as a community rehabilitation program.
     (6) "Competitive solicitation" means a documented formal process
 providing an equal and open opportunity to bidders and culminating in
 a selection based on predetermined criteria.
     (7) "Contractor" means an individual or entity awarded a contract
 with an agency to perform a service or provide goods.
     (8) "Debar" means to prohibit a contractor, individual, or other
 entity from submitting a bid, having a bid considered, or entering
 into a state contract during a specified period of time as set forth
 in a debarment order.
     (9) "Department" means the department of enterprise services.
     (10) "Director" means the director of the department of
 enterprise services.
     (11) "Estimated useful life" of an item means the estimated time
 from the date of acquisition to the date of replacement or disposal,
 determined in any reasonable manner.
     (12) "Goods" means products, materials, supplies, or equipment
 provided by a contractor.
     (13) "In-state business" means a business that has its principal
 office located in Washington.
     (14) "Life-cycle cost" means the total cost of an item to the
 state over its estimated useful life, including costs of selection,
 acquisition, operation, maintenance, and where applicable, disposal,
 as far as these costs can reasonably be determined, minus the salvage
 value at the end of its estimated useful life.
                                     p. 2                       HB 1471.SL
     (15) "Master contracts" means a contract for specific goods or
 services, or both, that is solicited and established by the
 department in accordance with procurement laws and rules on behalf of
 and for general use by agencies as specified by the department.
     (16) "Microbusiness" means any business entity, including a sole
 proprietorship, corporation, partnership, or other legal entity,
 that: (a) Is owned and operated independently from all other
 businesses; and (b) has a gross revenue of less than ((one million
 dollars)) $1,000,000 annually as reported on its federal tax return
 or on its return filed with the department of revenue.
     (17) "Minibusiness" means any business entity, including a sole
 proprietorship, corporation, partnership, or other legal entity,
 that: (a) Is owned and operated independently from all other
 businesses; and (b) has a gross revenue of less than ((three million
 dollars)) $3,000,000, but ((one million dollars)) $1,000,000 or more
 annually as reported on its federal tax return or on its return filed
 with the department of revenue.
     (18)   "Polychlorinated   biphenyls"    means    any   polychlorinated
 biphenyl congeners and homologs.
     (19)   "Practical    quantification    limit"     means   the   lowest
 concentration that can be reliably measured within specified limits
 of   precision,   accuracy,   representativeness,      completeness,   and
 comparability during routine laboratory operating conditions.
     (20) "Purchase" means the acquisition of goods or services,
 including the leasing or renting of goods.
     (21)   "Services"   means   labor,   work,    analysis,   or   similar
 activities provided by a contractor to accomplish a specific scope of
 work.
     (22) "Small business" means an in-state business, including a
 sole proprietorship, corporation, partnership, or other legal entity,
 that:
     (a) Certifies, under penalty of perjury, that it is owned and
 operated independently from all other businesses and has either:
     (i) Fifty or fewer employees; or
     (ii) A gross revenue of less than ((seven million dollars))
 $7,000,000 annually as reported on its federal income tax return or
 its return filed with the department of revenue over the previous
 three consecutive years; or
     (b) Is certified with the office of women and minority business
 enterprises under chapter 39.19 RCW.
                                       p. 3                         HB 1471.SL
      (23) "Sole source" means a contractor providing goods or services
  of such a unique nature or sole availability ((at the location
  required)) that the contractor is clearly and justifiably the only
  practicable source to provide the goods or services.
      (24) "Washington grown" has the definition in RCW 15.64.060.
     Sec. 2. RCW 39.26.070 and 2015 c 79 s 6 are each amended to read
 as follows:
     A convenience contract is a contract for specific goods or
 services, or both, that is solicited and established in accordance
 with procurement laws and rules for use by ((a specific agency or)) a
 specified group of agencies ((as needed from time to time)). A
 convenience contract is not available for general use and ((may
 only)) must be ((used as specified)) approved by the department.
 Convenience contracts are not intended to replace or supersede master
 contracts as defined in this chapter.
     Sec. 3.   RCW 39.26.130 and 2012 c 224 s 15 are each amended to
 read as follows:
     (1) An agency may make emergency purchases as defined in
 subsection (((3))) (4) of this section. When an emergency purchase is
 made, the agency head shall submit written notification of the
 purchase within ((three)) 10 business days of the purchase to the
 director. This notification must contain a description of the
 purchase, a description of the emergency and the circumstances
 leading up to the emergency, and an explanation of why the
 circumstances required an emergency purchase.
     (2) Emergency contracts must be submitted to the department and
 made available for public inspection within ((three working)) 10
 business days following the commencement of work or execution of the
 contract, whichever occurs first.
     (3) The department may authorize exceptions to this section due
 to exigent circumstances.
     (4) As used in this section, "emergency" means a set of
 unforeseen circumstances beyond the control of the agency that
 either:
     (a) Present a real, immediate, and extreme threat to the proper
 performance of essential functions; or
                                     p. 4                       HB 1471.SL
      (b) May reasonably be expected to result in material loss or
  damage to property, bodily injury, or loss of life, if immediate
  action is not taken.
     Sec. 4.   RCW 39.26.140 and 2012 c 224 s 16 are each amended to
 read as follows:
     (1) Agencies must submit sole source contracts to the department
 and make the contracts available for public inspection not ((less))
 fewer than ((ten)) 15 working days before the proposed starting date
 of the contract. Agencies must provide documented justification for
 sole source contracts to the department when the contract is
 submitted, and must include evidence that the agency posted the
 contract opportunity at a minimum on the state's enterprise vendor
 registration and bid notification system.
     (2) The department must approve sole source contracts before any
 such contract becomes binding and before any services may be
 performed or goods provided under the contract. These requirements
 shall also apply to all sole source contracts except as otherwise
 exempted by the director.
     (3) The director may provide an agency an exemption from the
 requirements of this section for a contract or contracts. Requests
 for exemptions must be submitted to the director in writing.
     (4) Contracts awarded by institutions of higher education from
 nonstate funds are exempt from the requirements of this section.
     Sec. 5.   RCW 39.26.200 and 2020 c 269 s 3 are each amended to
 read as follows:
     (1)(a) The director shall provide notice to the contractor of the
 director's intent to either fine or debar with the specific reason
 for either the fine or debarment. The department must establish the
 debarment and fining processes by rule.
     (b) After reasonable notice to the contractor and reasonable
 opportunity for that contractor to be heard, the director has the
 authority to debar a contractor for cause from consideration for
 award of contracts. The debarment must be for a period of not more
 than three years.
     (2) The director may either fine or debar a contractor based on a
 finding of one or more of the following causes:
     (a) Conviction for commission of a criminal offense as an
 incident to obtaining or attempting to obtain a public or private
                                     p. 5                       HB 1471.SL
 contract or subcontract, or in the performance of such contract or
 subcontract;
     (b) Conviction or a final determination in a civil action under
 state or federal statutes of fraud, embezzlement, theft, forgery,
 bribery, falsification or destruction of records, receiving stolen
 property, violation of the federal false claims act, 31 U.S.C. Sec.
 3729 et seq., or the state medicaid fraud false claims act, chapter
 74.66 RCW, or any other offense indicating a lack of business
 integrity or business honesty that currently, seriously, and directly
 affects responsibility as a state contractor;
     (c) Conviction under state or federal antitrust statutes arising
 out of the submission of bids or proposals;
     (d) Two or more violations within the previous five years of the
 national labor relations act as determined by the national labor
 relations board or court of competent jurisdiction;
     (e) Violation of contract provisions, as set forth in this
 subsection, of a character that is regarded by the director to be so
 serious as to justify debarment 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,
 however the failure to perform or unsatisfactory performance caused
 by acts beyond the control of the contractor may not be considered to
 be a basis for debarment;
     (f) Violation of ethical standards set forth in RCW 39.26.020;
     (g) Any other cause the director determines to be so serious and
 compelling as to affect responsibility as a state contractor,
 including debarment by another governmental entity for any cause
 listed in regulations; and
     (h) ((During the 2017-2019 fiscal biennium, the)) The failure to
 comply with a provision in a state master contract or other agreement
 with a state agency that requires equality among its workers by
 ensuring similarly employed individuals are compensated as equals.
     (3) The director must issue a written decision to debar. The
 decision must:
     (a) State the reasons for the action taken; and
     (b) Inform the debarred contractor of the contractor's rights to
 judicial or administrative review.
                                     p. 6                       HB 1471.SL
Passed by the House March 5, 2024.
Passed by the Senate February 28, 2024.
Approved by the Governor March 18, 2024.
Filed in Office of Secretary of State March 19, 2024.
                        --- END ---
                           p. 7                         HB 1471.SL
Statutes affected: 
Original Bill: 39.26.010, 15.64.060, 39.26.130, 39.26.140, 39.26.200
Bill as Passed Legislature: 39.26.010, 15.64.060, 39.26.130, 39.26.140, 39.26.200
Session Law: 39.26.010, 15.64.060, 39.26.130, 39.26.140, 39.26.200