SB0076

SENATE BILL 76

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Bill Tallman

FOR THE LEGISLATIVE FINANCE COMMITTEE

AN ACT

RELATING TO PROCUREMENT; ADDING AND AMENDING DEFINITIONS IN THE PROCUREMENT CODE; REVISING THE ADVERTISING EXEMPTION; ELIMINATING THE EXEMPTIONS FOR THE FORT BAYARD MEDICAL CENTER AND CERTAIN HOSPITAL AND HEALTH CARE PROCUREMENT; REQUIRING THE STATE PURCHASING AGENT TO APPROVE SOLE SOURCE PROCUREMENT DETERMINATIONS; LIMITING THE TERM OF SOLE SOURCE AND EMERGENCY PROCUREMENT TO ONE YEAR; PROVIDING ADDITIONAL REQUIREMENTS FOR PROCUREMENT UNDER EXISTING CONTRACTS; REVISING THE TERM LIMITS OF MULTI-TERM CONTRACTS AND PROVIDING LIMITATIONS ON PRICE AMENDMENTS; MAKING TECHNICAL AND CONFORMING CHANGES; REPEALING SECTION 13-1-98.1 NMSA 1978 (BEING LAWS 1998, CHAPTER 69, SECTION 1).

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 9-7-6.5 NMSA 1978 (being Laws 2005, Chapter 317, Section 1, as amended) is amended to read:

"9-7-6.5. AGREEMENTS FOR A REPLACEMENT FACILITY FOR FORT BAYARD MEDICAL CENTER.--

A. Notwithstanding any other provision of state law or rule, the secretary may do one or more of the following:

(1) enter into an agreement, including an agreement with an independent contractor, to operate Fort Bayard medical center or a replacement for Fort Bayard medical center in Grant county;

(2) acquire by purchase, lease, construction, lease purchase or other financing arrangement a facility to be located in Grant county to replace Fort Bayard medical center; provided that, if the acquisition results in the transfer of the title to the facility, the title to the facility shall be in the name of the facilities management division of the general services department; or

(3) enter into an agreement with Grant county under which the department may construct or cause to be constructed the facility that will replace the Fort Bayard medical center.

[B. The provisions of the Procurement Code shall not apply to the procurement, by either the department or Grant county or both, of tangible personal property, services or construction deemed necessary by the department to effectuate the provisions of this section. However, agreements related to the acquisition of the facility to replace Fort Bayard medical center shall be subject to the provisions of state law regulating the acquisition and disposal of real property by governmental entities.

C.] B. An operating agreement entered into pursuant to this section shall include provisions for the continued employment of all current and future Fort Bayard medical center employees, excluding management employees of the contractor, as state employees, entitled and subject to all the rights and responsibilities of state employees. Under the terms of the agreement and the overall direction of the department, the independent contractor shall provide management and supervision to state employees at Fort Bayard medical center, including the provision of work assignments, evaluations and promotional and disciplinary actions.

[D.] C. Pursuant to Section 15-3-35 NMSA 1978, the legislature ratifies and approves a lease-purchase agreement, in a form approved by the state board of finance, between the department, as lessee-purchaser, and Grant county, as

lessor-seller, for the facility that will replace the Fort Bayard medical center; provided that, upon transfer of title, title to the facility shall be in the name of the facilities management division of the general services department."

SECTION 2. A new section of the Procurement Code is enacted to read:

"[NEW MATERIAL] DEFINITION--ADVERTISING.--"Advertising" means the promotion of a product or service through paid media and does not include marketing."

SECTION 3. A new section of the Procurement Code is enacted to read:

"[NEW MATERIAL] DEFINITION--MARKETING.--"Marketing" means the process of identifying public needs or desires and determining how best to meet those needs or desires, including any element of the process, such as creation, research, design, planning or data mining."

SECTION 4. Section 13-1-38.1 NMSA 1978 (being Laws 2013, Chapter 70, Section 1) is amended to read:

"13-1-38.1. DEFINITION--CHIEF PROCUREMENT OFFICER.--"Chief procurement officer" or "procurement officer" means that person within a state [agency's] agency or local public [body's central purchasing office] body who is responsible for the control of procurement of items of tangible personal property, services or construction. "Chief procurement officer" includes the state purchasing agent."

SECTION 5. Section 13-1-95.2 NMSA 1978 (being Laws 2013, Chapter 70, Section 3) is amended to read:

"13-1-95.2. CHIEF PROCUREMENT OFFICERS--REPORTING AND REGISTRATION REQUIREMENT--TRAINING--CERTIFICATION.--

A. [On or before January 1 of each year beginning in 2014, and every time] When a chief procurement officer is hired, [each] a state agency and local public body shall provide to the state purchasing agent the name of the state agency's or local public body's chief procurement officer and information identifying the state agency's or local public body's central purchasing office, if applicable, and shall register the chief procurement officer on the website of the purchasing division of the general services department and update the registration information as needed.

B. The state purchasing agent shall maintain a list of the names of the chief procurement officers reported to the state purchasing agent by state agencies and local public bodies. The state purchasing agent shall make the list of chief procurement officers available to the public through the [web site] website of the purchasing division of the general services department and in any other appropriate form.

C. The state purchasing agent shall annually review the list of chief procurement officers and notify the state agencies and local public bodies that do not have a chief procurement officer on the list or are otherwise out of compliance with Subsection A of this section and provide a copy of the notification to the state ethics commission.

D. The state purchasing agent shall annually report to the office of the state auditor procurements made by state agencies and local public bodies without a chief procurement officer.

[C.] E. The state purchasing agent shall offer a certification training program for chief procurement officers each year.

[D. On or before January 1, 2015, the state purchasing agent shall establish a] F. The certification program for chief procurement officers [that includes] shall include an initial certification and recertification every two years for all chief procurement officers. In order to be recertified, a chief procurement officer shall pass a recertification examination approved by the secretary of general services.

[E. On and after July 1, 2015] G. Only certified chief procurement officers may do the following, except that persons using procurement cards may continue to issue purchase orders and authorize small purchases:

(1) make determinations, including determinations regarding exemptions, pursuant to the Procurement Code;

(2) issue purchase orders and authorize small purchases pursuant to the Procurement Code; and

(3) approve procurement pursuant to the Procurement Code."

SECTION 6. Section 13-1-98 NMSA 1978 (being Laws 1984, Chapter 65, Section 71, as amended by Laws 2019, Chapter 48, Section 13 and by Laws 2019, Chapter 63, Section 1) is amended to read:

"13-1-98. EXEMPTIONS FROM THE PROCUREMENT CODE.--The provisions of the Procurement Code shall not apply to:

A. procurement of items of tangible personal property or services by a state agency or a local public body from a state agency, a local public body or external procurement unit except as otherwise provided in Sections 13-1-135 through 13-1-137 NMSA 1978;

B. procurement of tangible personal property or services for the governor's mansion and grounds;

C. printing and duplicating contracts involving materials that are required to be filed in connection with proceedings before administrative agencies or state or federal courts;

D. purchases of publicly provided or publicly regulated gas, electricity, water, sewer and refuse collection services;

E. purchases of books, periodicals and training materials in printed or electronic format from the publishers or copyright holders thereof and purchases of print, digital or electronic format library materials by public, school and state libraries for access by the public;

F. travel or shipping by common carrier or by private conveyance or to meals and lodging;

G. purchase of livestock at auction rings or to the procurement of animals to be used for research and experimentation or exhibit;

H. contracts with businesses for public school transportation services;

I. procurement of tangible personal property or services, as defined by Sections 13-1-87 and 13-1-93 NMSA 1978, by the corrections industries division of the corrections department pursuant to rules adopted by the corrections industries commission, which shall be reviewed by the purchasing division of the general services department prior to adoption;

J. purchases not exceeding ten thousand dollars ($10,000) consisting of magazine subscriptions, web-based or electronic subscriptions, conference registration fees and other similar purchases where prepayments are required;

K. municipalities having adopted home rule charters and having enacted their own purchasing ordinances;

L. the issuance, sale and delivery of public securities pursuant to the applicable authorizing statute, with the exception of bond attorneys and general financial consultants;

M. contracts entered into by a local public body with a private independent contractor for the operation, or provision and operation, of a jail pursuant to Sections 33-3-26 and 33-3-27 NMSA 1978;

N. contracts for maintenance of grounds and facilities at highway rest stops and other employment opportunities, excluding those intended for the direct care and support of persons with handicaps, entered into by state agencies with private, nonprofit, independent contractors who provide services to persons with handicaps;

O. contracts and expenditures for services or items of tangible personal property to be paid or compensated by money or other property transferred to New Mexico law enforcement agencies by the United States department of justice drug enforcement administration;

P. contracts for retirement and other benefits pursuant to Sections 22-11-47 through 22-11-52 NMSA 1978;

Q. contracts with professional entertainers;

R. contracts and expenditures for legal subscription and research services and litigation expenses in connection with proceedings before administrative agencies or state or federal courts, including experts, mediators, court reporters, paralegals, process servers and witness fees, but not including attorney contracts;

S. contracts for service relating to the design, engineering, financing, construction and acquisition of public improvements undertaken in improvement districts pursuant to Subsection L of Section 3-33-14.1 NMSA 1978 and in county improvement districts pursuant to Subsection L of Section 4-55A-12.1 NMSA 1978;

T. works of art for museums or for display in public buildings or places;

U. contracts entered into by a local public body with a person, firm, organization, corporation or association or a state educational institution named in Article 12, Section 11 of the constitution of New Mexico for the operation and maintenance of a hospital pursuant to Chapter 3, Article 44 NMSA 1978, lease or operation of a county hospital pursuant to the Hospital Funding Act or operation and maintenance of a hospital pursuant to the Special Hospital District Act;

V. purchases not exceeding ten thousand dollars ($10,000) of advertising in [all] any media, including radio, television, print and electronic. The Procurement Code shall apply to marketing;

W. purchases of promotional goods intended for resale by the tourism department;

X. procurement of printing, publishing and distribution services for materials produced and intended for resale by the cultural affairs department;

Y. procurement by or through the public education department from the federal department of education relating to parent training and information centers designed to increase parent participation, projects and initiatives designed to improve outcomes for students with disabilities and other projects and initiatives relating to the administration of improvement strategy programs pursuant to the federal Individuals with Disabilities Education Act; provided that the exemption applies only to procurement of services not to exceed two hundred thousand dollars ($200,000);

Z. procurement of services from community rehabilitation programs or qualified individuals pursuant to

the State Use Act;

AA. purchases of products or services for eligible persons with disabilities pursuant to the federal Rehabilitation Act of 1973;

[BB. procurement, by either the department of health or Grant county or both, of tangible personal property, services or construction that are exempt from the Procurement Code pursuant to Section 9-7-6.5 NMSA 1978;

CC.] BB. contracts for investment advisory services, investment management services or other investment-related services entered into by the educational retirement board, the state investment officer or the retirement board created pursuant to the Public Employees Retirement Act;

[DD.] CC. the purchase for resale by the state fair commission of feed and other items necessary for the upkeep of livestock;

[EE.] DD. contracts entered into by the crime victims reparation commission to distribute federal grants to assist victims of crime, including grants from the federal Victims of Crime Act of 1984 and the federal Violence Against Women Act of 1994;

[FF.] EE. procurement by or through the early childhood education and care department of early pre-kindergarten and pre-kindergarten services purchased pursuant to the Pre-Kindergarten Act;

[GG.] FF. procurement of services of commissioned advertising sales representatives for New Mexico magazine; and

[HH.] GG. procurements exempt from the Procurement Code as otherwise provided by law."

SECTION 7. Section 13-1-126 NMSA 1978 (being Laws 1984, Chapter 65, Section 99, as amended) is amended to read:

"13-1-126. SOLE SOURCE PROCUREMENT--CONDITIONS.--

A. A contract may be awarded without competitive sealed bids or competitive sealed proposals regardless of the estimated cost when the state purchasing agent or the chief procurement officer of a central purchasing office determines, in writing, that:

(1) there is only one source for the required service, construction or item of tangible personal property;

(2) the service, construction or item of tangible personal property is unique and this uniqueness is substantially related to the intended purpose of the contract; and

(3) other similar services, construction or items of tangible personal property cannot meet the intended purpose of the contract.

B. The state purchasing agent or a central purchasing office shall use due diligence in determining the basis for the sole source procurement, including reviewing available sources and consulting the using agency, and shall include its written determination in the procurement file.

C. An executive branch state agency or local public body may award a sole source contract only if the executive branch state agency or local public body provides its written determination to the state purchasing agent and the state purchasing agent approves the determination because the conditions of Subsection A of this section are met. The state purchasing agent shall review the written determination submitted by an executive branch state agency or local public body and decide within fifteen days after receipt of the written determination whether the conditions of Subsection A of this section are met. The state purchasing agent's approval, along with the written determination, shall be part of the procurement file.

[C.] D. The state purchasing agent or a central purchasing office shall conduct negotiations, as appropriate, as to price, delivery and quantity in order to obtain the price most advantageous to the state agency or a local public body. [D.] E. A contract for the purchase of research consultant services by institutions of higher learning constitutes a sole source procurement.

[E.] F. The state purchasing agent or a central purchasing office shall not circumvent this section by narrowly drafting specifications so that only one predetermined source would satisfy those specifications.

G. The term of a sole source procurement shall not exceed one year."

SECTION 8. Section 13-1-127 NMSA 1978 (being Laws 2019, Chapter 153, Section 5) is amended to read:

"13-1-127. EMERGENCY PROCUREMENT--REQUIRED CONDITIONS-- LIMITATIONS--NOTICE.--

A. The state purchasing agent or a central purchasing office may only make an emergency procurement when the service, construction or item of tangible personal property procured:

(1) is needed immediately to:

(a) control a serious threat to public health, welfare, safety or property caused by a flood, fire, epidemic, riot, act of terrorism, equipment failure or similar event; or

(b) plan or prepare for the response to a serious threat to public health, welfare, safety or property caused by a flood, fire, epidemic, riot, act of terrorism, equipment failure or similar event; and

(2) cannot be acquired through normal procurement methods.

B. The state purchasing agent or a central purchasing office:

(1) in making an emergency procurement, shall:

(a) employ a competitive process to the extent practicable under the circumstances; and

(b) use due diligence in determining the basis for the procurement and in selecting a contractor; and

(2) shall not make an emergency procurement for the purchase or lease of heavy road equipment.

C. The state purchasing agent or a central purchasing office that makes an emergency procurement shall outline its determination of the basis for the procurement and its selection of the contractor in writing and include the writing in the procurement file. Promptly thereafter:

(1) the state purchasing agent shall post notice of the procurement on its website; or

(2) the central purchasing office shall post notice of the procurement on its website, if it maintains one, and shall transmit the notice to the state purchasing agent for posting on the state purchasing agent's website.

D. The state purchasing agent or a central purchasing office that makes an emergency procurement to plan or prepare for the response to a serious threat to public health, welfare, safety or property caused by a flood, fire, epidemic, riot, act of terrorism, equipment failure or similar event shall account for the money spent in making the procurement and report on that accounting to the legislative finance committee and the department of finance and administration within sixty days after the end of the fiscal year in which the procurement was made.

E. The term of an emergency procurement shall not exceed one year."

SECTION 9. Section 13-1-129 NMSA 1978 (being Laws 1984, Chapter 65, Section 102, as amended) is amended to read:

"13-1-129. PROCUREMENT UNDER EXISTING CONTRACTS.--

A. Notwithstanding the requirements of Sections 13-1-102 through 13-1-118 NMSA 1978, the state purchasing agent or a central purchasing office may contract for services, construction or items of tangible personal property without the use of competitive sealed bids or competitive sealed proposals as follows:

(1) at a price equal to or less than the contractor's current federal supply contract price (GSA), providing the contractor has indicated in writing a willingness to extend such contractor pricing, terms and conditions to the state agency or local public body and the purchase order adequately identifies the contract relied upon; or

(2) with a business [which] that has a current exclusive or nonexclusive price agreement with the state purchasing agent or a central purchasing office for the item, services or construction meeting the same standards and specifications as the items to be procured if the following conditions are met:

(a) the quantity purchased does not exceed the quantity [which] that may be purchased under the applicable price agreement; [and]

(b) the purchase order adequately identifies the price agreement relied upon;

(c) for the purchase of construction or services, other than professional services, having a value greater than sixty thousand dollars ($60,000) or professional services having a value greater than five thousand dollars ($5,000), an executive branch state agency or local public body enters into a separate contract with the business that defines the scope of the work for the business according to the terms of the price agreement; and

(d) for the purchase of construction or services, other than professional services, or items of tangible personal property having a value between ten thousand dollars ($10,000) and sixty thousand dollars ($60,000), an executive branch state agency or local public body obtains three quotes for the construction, services or items of tangible personal property and documents the quotes in the procurement file and, for executive branch state agencies, in the statewide human resources, accounting and management reporting system.

B. The central purchasing office shall retain for public inspection and for the use of auditors a copy of each federal supply contractor state purchasing agent price agreement or exclusive or nonexclusive price agreement with the state purchasing agent or a central purchasing office relied upon to make purchases without seeking competitive bids or proposals."

SECTION 10. Section 13-1-150 NMSA 1978 (being Laws 1984, Chapter 65, Section 123, as amended) is amended to read:

"13-1-150. MULTI-TERM CONTRACTS--SPECIFIED PERIOD.--

A. A multi-term contract for items of tangible personal property, construction or services except for professional services [in an amount under twenty-five thousand dollars ($25,000)] may be entered into for any period of time deemed to be in the best interests of the state agency or a local public body not to exceed [four] five years, [provided that] including all extensions and renewals, except that for a contract entered into pursuant to the Public Facility Energy Efficiency and Water Conservation Act, the term shall not exceed twenty-five years, including all extensions and renewals. The term of the contract and conditions of renewal or extension, if any, [are] shall be included in the specifications, and funds [are] shall be available for the first fiscal period at the time of contracting. [If the amount of the contract is twenty-five thousand dollars ($25,000) or more, the term shall not exceed ten years, including all extensions and renewals, except that for a contract entered into pursuant to the Public Facility Energy Efficiency and Water Conservation Act, the term shall not exceed twenty-five years, including all extensions and renewals.] Payment and performance obligations for succeeding fiscal periods shall be subject to the availability and appropriation of funds therefor.

B. A contract for professional services may not exceed four years, including all extensions and renewals, except for the following:

(1) services required to support or operate federally certified medicaid, financial assistance and child support enforcement management information or payment systems;

(2) services to design, develop or implement the taxation and revenue information management systems project authorized by Laws 1997, Chapter 125;

(3) a multi-term contract for the services of trustees, escrow agents, registrars, paying agents, letter of credit issuers and other forms of credit enhancement and other similar services, excluding bond attorneys, underwriters and financial advisors with regard to the issuance, sale and delivery of public securities, may be for the life of the securities or as long as the securities remain outstanding;

(4) services relating to the implementation, operation and administration of the Education Trust Act;

(5) services relating to measurement and verification of conservation-related cost savings and utility cost savings pursuant to the Public Facility Energy Efficiency and Water Conservation Act; and

(6) services relating to the design and engineering of a state public works project:

(a) for a period not to exceed the requisite time for project completion and a subsequent warranty period; and

(b) upon approval of the secretary of finance and administration.

C. A price or cost increase included as part of an extension or renewal of a multi-term contract shall not exceed the price of the original contract, as cumulatively adjusted pursuant to any previous price or cost adjustment, multiplied by a fraction, the numerator of which is the most recent monthly consumer price index available at the time of the extension or renewal and the denominator of which is the consumer price index for the same month in the preceding calendar year. For the purposes of this subsection, "consumer price index" means the consumer price index for all urban consumers for all items as published by the United States bureau of labor statistics."

SECTION 11. Section 13-1-154.1 NMSA 1978 (being Laws 2007, Chapter 312, Section 1, as amended) is amended to read:

"13-1-154.1. MULTIPLE SOURCE CONTRACTS--ARCHITECTURAL AND ENGINEERING SERVICES CONTRACTS--INDEFINITE QUANTITY CONSTRUCTION CONTRACTS.--

A. A state agency or local public body may procure multiple architectural or engineering services contracts for multiple projects under a single qualifications-based request for proposals; provided that the total amount of multiple contracts and all renewals for a single contractor does not exceed seven million five hundred thousand dollars ($7,500,000) over four years and that a single contract, including any renewals, does not exceed six hundred fifty thousand dollars ($650,000).

B. A state agency or local public body may procure multiple indefinite quantity construction contracts pursuant to a price agreement for multiple projects under a single request for proposals or invitation to bid; provided that the total amount of a contract and all renewals does not exceed twelve million five hundred thousand dollars ($12,500,000) over three years and the contract provides that any one purchase order under the contract may not exceed four million dollars ($4,000,000).

C. A state agency or local public body may make procurements in accordance with the provisions of Subsection A or B of this section if:

(1) the advertisement and request for proposals states that multiple contracts may or will be awarded, states the number of contracts that may or will be awarded and describes the services or construction to be performed under each contract;

(2) there is a single selection process for all of the multiple contracts, except that for each contract there may be a separate final list and a separate negotiation of contract terms; and

(3) each of the multiple contracts for architectural or engineering services has a term not exceeding four years, or for construction, has a term not exceeding three years, each including all extensions and renewals.

D. A contract to be awarded pursuant to this section to a firm that is currently performing under a contract issued pursuant to this section shall not cause the total amount of all contracts issued pursuant to this section to that firm to exceed:

(1) seven million five hundred thousand dollars ($7,500,000) in any four-year period for architectural or engineering services; or

(2) twelve million five hundred thousand dollars ($12,500,000) in any three-year period for construction.

E. Procurement pursuant to this section is subject to the limitations of Sections 13-1-150 through 13-1-154 NMSA 1978.

F. A state agency and a local public body, not including an agency of the legislative or judicial branch of state government, shall report to the legislative finance committee on an annual basis and to the purchasing division of the general services department on, at minimum, a quarterly basis the aggregate amount of contracts for each contractor and the corresponding amounts to be spent under each multiple source contract pursuant to this section. The general services department may promulgate rules regarding reporting to the department pursuant to this subsection."

SECTION 12. Section 13-1-198 NMSA 1978 (being Laws 1984, Chapter 65, Section 171) is amended to read:

"13-1-198. KICK-BACKS--ADDITIONAL CIVIL PENALTY.--[Upon a showing that a subcontractor made a kick-back to a prime contractor or a higher-tier subcontractor in connection with the award of a subcontract or order thereunder]

A. It is conclusively presumed that the amount [thereof] of a kick-back was included in the price of the subcontract or order [and] that was ultimately borne by the state agency or a local public body if it is shown that:

(1) a subcontractor made a kick-back to a prime contractor or a higher-tier subcontractor in connection with the procurement award or order; or

(2) a contractor or subcontractor made a kick-back to a public official or public employee.

B. An amount equal to the kick-back [is] shall be imposed upon the recipient and upon the subcontractor making the kick-back as [a] an additional civil penalty by the state agency or a local public body [upon the recipient and upon the subcontractor making such kick-backs] in addition but pursuant to the terms and conditions of Section [169 of the Procurement Code] 13-1-196 NMSA 1978."

SECTION 13. REPEAL.--Section 13-1-98.1 NMSA 1978 (being Laws 1998, Chapter 69, Section 1) is repealed.

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