BILL REQ. #:  S-3917.1 

Read first time 01/19/12.   Referred to Committee on Government Operations, Tribal Relations & Elections.

     AN ACT Relating to increasing the purchase of made in America products by the state of Washington; amending RCW 43.19.1905; adding new sections to chapter 39.04 RCW; adding a new section to chapter 43.19 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   The legislature finds that the state of Washington's procurement policies should replicate the state of Washington's and the United States' goal to accelerate economic growth through local job creation. It is therefore the intent of the legislature to encourage all state agencies to aid and promote the economy of the state of Washington and the United States by requiring a process to be established that increases the procurement of iron, steel, and manufactured goods produced in the United States in all public works and procurement contracts.

NEW SECTION.  Sec. 2   A new section is added to chapter 39.04 RCW to read as follows:
     For the purposes of this section, section 3 of this act, RCW 43.19.1905, and section 5 of this act:
     (1) "Agency" means any state office or activity of the executive and judicial branches of state government, including the 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.
     (2) "Bid" means an offer, proposal, or quote for goods or services in response to a solicitation issued for such goods or services by an agency of Washington state.
     (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 an agency of Washington state.
     (4) "Board" means the capital projects advisory review board created in RCW 39.10.220.
     (5) "Made in America" means:
     (a) In the case of an iron or steel product, such product is deemed to be made in America if all manufacturing has taken place in the United States, except metallurgical processes involving the refinement of steel additives; and
     (b) In the case of a manufactured good, such good is deemed to be made in America if:
     (i) All of the manufacturing processes for the good take place in the United States; and
     (ii) All of the components of the good are of United States origin. A component will be considered a good of United States origin if all of the manufacturing processes of the component have taken place in the United States, regardless of the origin of its subcomponents.
     (6) "Public works" has the same meaning as defined in RCW 39.04.010.

NEW SECTION.  Sec. 3   A new section is added to chapter 39.04 RCW to read as follows:
     (1)(a) In determining "lowest responsible bidder," in addition to price, an agency must consider whether the iron, steel, and manufactured goods to be used or supplied in the performance of the public works project contract or any subcontract thereto have been made in America.
     (b) An agency shall give a preference to a bidder that includes additional information in their bid that verifies the use of products made in America to fulfill the obligations of the public works project contract.
     (2) Subsection (1) of this section does not apply if the director of the agency or the director's designee finds that:
     (a) After consultation with the governor's advisor for trade policy, the application of subsection (1) of this section would be in violation of an international trade agreement in which the United States is a signatory country and the state of Washington is subject to the terms of such agreement;
     (b) The application of subsection (1) of this section would be inconsistent with the public interest;
     (c) Such materials and products as required by subsection (1) of this section are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality;
     (d) Inclusion of such materials and products as required by subsection (1) of this section will increase the cost of the overall project contract by more than: (i) Five percent on projects valued under one million dollars; (ii) the greater of fifty thousand dollars or two and one-half percent for projects valued between one million and five million dollars; or (iii) the greater of one hundred twenty-five thousand dollars or one percent for projects valued over five million dollars; or
     (e) An emergency necessitates the immediate execution of such public works project.
     (3) If the director of the agency or the director's designee determines it is necessary to waive the application of subsection (1) of this section based on a finding under subsection (2) of this section, the director of the agency or director's designee shall, before the date on which such finding takes effect:
     (a) Publish a notice detailing the reason for the waiver at least once in a legal newspaper of general circulation published in or as near as possible to that part of the county in which such work is to be done;
     (b) Provide notice of such finding and an opportunity for public comment on such finding for a period not to exceed fifteen days; and
     (c) Consider all comments received during the comment period in evaluating the waiver request.
     (4) Notwithstanding the provisions of subsection (3) of this section, when an emergency necessitates the immediate execution of a public works project, the director of the agency or the director's designee shall make public a description and estimate of the public work within seven days after the commencement of the work.
     (5) If a court or federal or state agency determines that any person intentionally committed one of the following acts, such person is ineligible to receive any contract or subcontract from a state agency:
     (a) Affixed a label bearing a made in America inscription or any inscription with the same meaning to any material or product sold in or shipped to the United States that was not manufactured in the United States and that was in a project to which this section applies; or
     (b) Represented that any material or product sold in or shipped to the United States that was not made in America and that was used in a project to which this section applies was made in America.
     (6) The board shall develop suggested guidelines to assist agencies in developing the made in America bid preference criteria. The guidelines must be posted on the board's web site.

Sec. 4   RCW 43.19.1905 and 2011 1st sp.s. c 43 s 208 are each amended to read as follows:
     (1) The director of enterprise services shall establish overall state policy for compliance by all state agencies, including educational institutions, regarding the following purchasing and material control functions:
     (a) Development of a state commodity coding system;
     (b) A standard notification form for state agencies to report cost-effective direct purchases, which shall at least identify the price of the goods as available through the department, the price of the goods as available from the alternative source, the total savings, and the signature of the notifying agency's director or the director's designee;
     (c) Screening of supplies, material, and equipment excess to the requirements of one agency for overall state need before sale as surplus;
     (d) Determining when centralized rather than decentralized purchasing shall be used to obtain maximum benefit of volume buying of identical or similar items, including procurement from federal supply sources;
     (e) Development of criteria for use of leased, rather than state owned, warehouse space based on relative cost and accessibility;
     (f) Determination of how transportation costs incurred by the state for materials, supplies, services, and equipment can be reduced by improved freight and traffic coordination and control;
     (g) Establishment of a formal certification program for state employees who are authorized to perform purchasing functions as agents for the state under the provisions of this chapter ((43.19 RCW));
     (h) Development of performance measures for the reduction of total overall expense for material, supplies, equipment, and services used each biennium by the state;
     (i) Establishment of a standard system for all state organizations to record and report dollar savings and cost avoidance which are attributable to the establishment and implementation of improved purchasing and material control procedures;
     (j) Development of procedures for mutual and voluntary cooperation between state agencies, including educational institutions, and political subdivisions for exchange of purchasing and material control services;
     (k) Resolution of all other purchasing and material matters which require the establishment of overall statewide policy for effective and economical supply management;
     (l) Development of guidelines and criteria for the purchase of vehicles, high gas mileage vehicles, alternate vehicle fuels and systems, equipment, and materials that reduce overall energy-related costs and energy use by the state, including investigations into all opportunities to aggregate the purchasing of clean technologies by state and local governments, and including the requirement that new passenger vehicles purchased by the state meet the minimum standards for passenger automobile fuel economy established by the United States secretary of transportation pursuant to the energy policy and conservation act (15 U.S.C. Sec. 2002);
     (m) Development of goals for state use of recycled or environmentally preferable products through specifications for products and services, processes for requests for proposals and requests for qualifications, contractor selection, and contract negotiations;
     (n) Development of procurement policies and procedures, such as unbundled contracting and subcontracting, that encourage and facilitate the purchase of products and services by state agencies and institutions from Washington small businesses to the maximum extent practicable and consistent with international trade agreement commitments;
     (o) Development of food procurement procedures and materials that encourage and facilitate the purchase of Washington grown food by state agencies and institutions to the maximum extent practicable and consistent with international trade agreement commitments; ((and))
     (p) Development of policies requiring all food contracts to include a plan to maximize to the extent practicable and consistent with international trade agreement commitments the availability of Washington grown food purchased through the contract; and
     (q) Development of procurement policies and procedures that encourage, facilitate, and provide a preference for the purchase of made in America products by state agencies and institutions to the maximum extent practicable and consistent with international trade agreement commitments.
     (2) The definitions in this subsection apply throughout this section and RCW 43.19.1908.
     (a) "Common vendor registration and bid notification system" has the definition in RCW 39.29.006.
     (b) "Small business" has the definition in RCW 39.29.006.
     (c) "Washington grown" has the definition in RCW 15.64.060.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.19 RCW to read as follows:
     If a court or federal or state agency determines that any person intentionally committed one of the following acts, such person is ineligible to receive any contract or subcontract from a state agency:
     (1) Affixed a label bearing a made in America inscription or any inscription with the same meaning to any material or product sold in or shipped to the United States that was not manufactured in the United States and that was in a contract or service to which this section applies; or
     (2) Represented that any material or product sold in or shipped to the United States that was not made in America and that was used in a contract or service to which this section applies was made in America.

NEW SECTION.  Sec. 6   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.