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F I S C A L I M P A C T R E P O R T

SPONSOR Lujan, B.

ORIGINAL DATE

LAST UPDATED

2-6-06

2-9-06 HB 532/aHBIC

SHORT TITLE

ELECTRONIC PROCUREMENT BID

SUBMISSION

SB

ANALYST Hadwiger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

General Services Department (GSD)

Department of Transportation (NMDOT)

Public Education Department (PED)

SUMMARY

Synopsis of HBIC Amendment

The HBIC amendment to House Bill 532 deletes an amended section in the original bill that

would have allowed electronically submitted bids to be opened in private with a single witness

and inserts, in lieu thereof, language that specifies that sealed bids submitted electronically shall

be opened publicly in the presence of one or more witnesses at a time designated in the invitation

for bids (IFBs) or request for proposals. Specifically, the amendment provides new language for

that makes this provision for IFBs and applies existing language for RFPs.

House Bill 532/aHBIC – Page

2

Synopsis of Original Bill

House Bill 532 would amend the state procurement code to allow a central purchasing office, in

an invitation for bids (IFB) or a request for proposals (RFP) to require all or part of a bid to be

submitted electronically if the office determines this to be advantageous to the procurement

process.

This provision is elaborated as follows. No hard copy documents would be submitted unless

specified in the IFB or RFP. A fixed date and time for bid opening and closing would be speci-

fied. For sealed bids, a representative of the central purchasing office and a witness would open

the email or other secure electronic location immediately after the bid closing time, record the

vendors that submitted bids, the date and time submitted, the bids and associated prices and pre-

pare a bid tabulation of all responsive vendors for review. The bids would then be evaluated and

contract awarded as provided in the IFB or RFP. A distinction is made between traditional bid

submissions and electronic submissions whereby the former would be opened publicly at the

time and place designated in the IFB or RFP, and the electronic bids would be opened at the bid

closing time in the presence of a witness.

FISCAL IMPLICATIONS

The General Services Department (GSD) indicated that allowing electronic receipt of bids and

proposals, where appropriate, would save money and time for vendors and government entities

(e.g. paper products and postage).

The Department of Finance and Administration (DFA) anticipated that there could be some

slight impact if an agency desired or felt the need to keep hard copies of bids or proposals to

comport with Records and Archives' statute and regulations or for internal agency reasons and

therefore incurred the cost of printing such copies themselves instead of having that cost put

upon the vendors themselves as the situation currently exists.

SIGNIFICANT ISSUES

GSD noted that allowing electronic submission (receipt) of bids and proposals would modernize

the Procurement Code, the procurement process, and would save time and costs for government

entities and for vendors.

DFA identified two concerns about the original bill:

1.

the removal of a public opening for electronically submitted bids. NMDOT identified

this issue in the original bill as well; and

2.

the need to coordinate with Records and Archives in order to properly preserve records in

accordance with statute and regulation.

The HBIC amendment addresses the first issue by requiring that electronically submitted bills to

be opened publicly in the presence of one or more witnesses at the time and place designated in

the invitation for bids (ITBs) or request for proposals (RFP).

As to the second issue, DFA indicated that, since the language of the statute clearly states that no

hard copies should be received for those ITBs calling for electronic submission of bids as well as

House Bill 532/aHBIC – Page

3

those portions of any RFP calling for electronic submissions, the central purchasing office would

have to coordinate with Records and Archives in order to preserve the documentation on elec-

tronic media (CD) along with whatever portions would be hard copy. This is more an adminis-

trative issue regarding implementation than a statutory one.

NMDOT commented that, currently, that agency is in the process of establishing a system to al-

low electronic bidding on its transportation construction projects. However, under current law,

NMDOT cannot require that a contractor submit a bid electronically and must give contractors

the option of either submitting bids electronically or in the traditional paper form. This bill

would give NMDOT the option of requiring all bids to be submitted electronically for certain

projects.

PERFORMANCE IMPLICATIONS

GSD indicated that utilization of electronic receipt of bids and proposals will increase the effi-

ciency of the Purchasing Division. PED concurred that a more efficient and broad procurement

with more competitive bidding would be available by the new process proposed.

DOT also concurred, noting that allowing central purchasing offices to require electronic submit-

tal of bids and proposals will result in a more efficient procurement process, particularly regard-

ing bids for construction projects which often require bid prices on hundreds of different items.

Electronic bid submittals will decrease the amount of time spent by staff in reviewing bids and

will eliminate the need for staff to manually enter the prices for each bid item into a computer

software system that is used to assist in the evaluation of bids.

ADMINISTRATIVE IMPLICATIONS

According to GSD, a GSD rule change and training for agencies and vendors will be required.

There would be no significant increase in workload for GSD or other entities under the Procure-

ment Code.

DOT noted that central purchasing offices will have to establish a secure reliable process capable

of protecting confidential material if they choose electronic procurement. The offices will also

have to provide hard copies of electronic bids and RFPs to their custodians of records in order to

comply with potential Inspection of Public Records Act requests. Finally, every member of a

committee evaluating RFPs will have to have access to a computer and have access provided.

DH/nt