AN ACT Relating to state purchasing; amending RCW 39.76.010; adding a new section to chapter 39.76 RCW; and adding a new section to chapter 43.19 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 43.19 RCW to read as follows:

(1) It is the intent of the legislature that state purchasing be accomplished, to the maximum extent practicable, through the use of competitive sealed bid procedures as required under RCW 43.19.190 through 43.19.1939. However, the legislature recognizes that there are special circumstances under which the use of competitive sealed bidding prevents the state from taking advantage of new or innovative techniques, materials, or equipment of which it may be unaware. Therefore, in order to test procedures which may provide for the most economical use of public funds and which may provide the state purchasing and material control director with the flexibility needed to take advantage of new or innovative techniques, materials, or equipment, the legislature hereby establishes a pilot-scale program authorizing the use of competitive sealed proposals.

(2) Contracts may be entered into by competitive sealed proposals when the director of general administration, through the director of purchasing and material control, determines that: (a) The use of competitive sealed proposals would allow the state to take advantage of new or innovative techniques, materials, or equipment of which the state would be unable to take advantage through a competitive bid procedure; and (b) the total estimated cost of the techniques, materials, or equipment is not more than one million dollars. Such determinations shall be in writing and shall be filed in the office of the director of purchasing and material control at the time the contract is awarded.

(3) The evaluation of competitive sealed proposals and selection of contractors shall be by a procurement committee consisting of not less than five persons. The procurement committee shall be chaired by a procurement official of the division of purchasing and shall include representatives of the division or department for which the goods or services are being purchased. One member of the procurement committee shall be a representative of the office of minority and women's business enterprises. A new and separate procurement committee shall be established for each acquisition and the committee shall disband after completion of the acquisition.

(4) The use of competitive sealed proposals shall conform to the following procedures and requirements:

(a) Adequate public notice shall be given.

(b) Requests for proposals shall be sent to all vendors who have qualified by application to the division of purchasing in accordance with RCW 43.19.1908.

(c) Requests for proposals shall set forth the requirements, in addition to price, that will be considered in awarding the contract. In setting forth these requirements, the requests for proposals shall also set forth the relative importance which will be assigned to each requirement for the purposes of evaluating proposals. Requests for proposals shall specify the time, date, and place for the submission of (i) competitive sealed proposals and (ii) final offers by qualified offerors.

(d) Once requests for proposals have been issued, the procurement committee shall hold a preproposal conference, publicized in advance, to allow potential offerors an opportunity to clarify questions and increase understanding of contract objectives.

(e) Receipt of competitive sealed proposals shall be documented on a register during a public meeting held at the time and date specified in the request for proposals. The proposals shall be opened so as to avoid disclosure of their contents to competing offerors.

(f) After the opening of proposals from offerors, the procurement committee shall review all proposals and shall select those offerors whose proposals, when measured against the requirements set forth in the request for proposal, indicate that they are capable of being selected for award of the contract. Offerors selected in this manner shall be considered "qualified offerors." The procurement committee may conduct discussions with the qualified offerors for the purpose of ensuring full understanding of and responsiveness to the requirements set forth in the request for proposal. Qualified offerors shall be permitted to revise their proposals prior to the submission of final offers. Discussions shall be conducted in accordance with ethical business standards and there shall be no disclosure of any information derived from competing proposals. Auction techniques shall be prohibited. Qualified offerors shall be accorded fair and equal treatment with respect to opportunities for discussion and revision of proposals.

(g) Final offers shall be submitted no later than the time and date specified in the request for proposal unless extended by majority vote of the procurement committee, in which case the extension shall apply to and be communicated to all qualified offerors. Final offers shall include the price of delivering the goods or services as specified in the offer.

(h) The contract shall be awarded to the qualified offeror whose proposal is determined by the procurement committee to best meet the requirements set forth in the request for proposal. The determination shall be in writing and shall be filed in the office of the director of purchasing and material control at the time the contract is awarded.

(i) All requests for proposals, revisions, final offers, and the determination required under subsections (2) and (4)(h) of this section shall be open for public inspection, in accordance with chapter 42.17 RCW, after the contract is awarded or all proposals are rejected.

(5) In regard to proposals submitted under this section, the director of general administration, through the director of purchasing and material control, may (a) award contracts based on the proposals received, (b) reject any or all proposals and request new proposals or issue requests for bids in accordance with RCW 43.19.1911, or (c) cancel the procurement.

(6) All offerors have the same right to appeal the award of a contract entered into under this section as is afforded to bidders who wish to appeal the award of a contract entered into through a competitive sealed bid procedure authorized under RCW 43.19.190 through 43.19.1939.

(7) The authority to enter into contracts under this section rests solely with the director of general administration, through the director of purchasing and material control, and this authority shall not be delegated to any other state agency or institution of higher education or related board.

(8) The director of general administration, through the director of purchasing and material control, may adopt rules under chapter 34.04 RCW necessary to carry out the purposes of this section.

(9) This section shall expire on June 30, 1987, unless extended by law for an additional period of time. Prior to this expiration date, the legislative budget committee shall cause to be conducted a study of the provisions of this section and their implementation. Upon completion of this study and no later than December 1, 1986, the legislative budget committee shall submit a report, including recommendations, to the secretary of the senate and the chief clerk of the house of representatives for referral to and review by the appropriate standing committees. The study required by this subsection shall include, for each contract entered into under this section, an analysis aimed at determining whether the use of competitive sealed proposals resulted in a lower total cost to the state than would have been incurred through a competitive sealed bid procedure. In determining the total cost to the state, the price of the technique, material or equipment and the cost of conducting the purchase shall be considered and, where appropriate, the life cycle costing technique as defined in RCW 43.19.1911 may be applied.

Sec. 2. Section 1, chapter 68, Laws of 1981 and RCW 39.76.010 are each amended to read as follows:

(1) Except as provided in ((~~RCW 39.76.020~~)) this chapter, every state agency and unit of local government shall pay interest at the rate of one percent per month, but at least one dollar per month, on amounts due on ((~~written~~)) contracts for public works, personal services, goods and services, equipment, and travel, whenever the state agency or unit of local government fails to make timely payment.

(2) For purposes of this section, payment shall be considered timely if:

(a) A check or warrant is mailed or is available on the date specified for the amount specified in the applicable contract documents, if any, or, if no date is specified, within thirty days of receipt of a properly completed invoice or receipt of goods or services, whichever is later.

(b) For any amount which is required to be withheld under state or federal law, a check or warrant is mailed or is available in the proper amount on the date the amount may be released under the applicable law.

(3) "Contract," as used in this section, means any contract entered into by a state agency and a written contract entered into by a unit of local government.

NEW SECTION. Sec. 3. A new section is added to chapter 39.76 RCW to read as follows:

The special rules provided in this section shall apply to each contract of the department of labor and industries for which both: (1) The payment date is not specified in a contract document, if there is a contract document; and (2) the interest provided in RCW 39.76.010 would not have applied to the contract had it been entered into prior to the effective date of this 1985 act. The special rules are as follows: For the purposes of this chapter, payment on the department's contract shall be considered timely if made within sixty days of receipt of a properly completed invoice or receipt of goods or services, whichever is later, if the receipt is before July 1, 1987.

This section shall expire on July 1, 1987, but the expiration shall not affect any existing right acquired or liability or obligation incurred prior to July 1, 1987.