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H*4081
Session 110 (1993-1994)


H*4081(Rat #0265, Act #0178)  General Bill, By Boan and Wilkins
 A Bill to enact the "State Government Accountability and Reform Act of
 1993".-short title

   04/14/93  House  Introduced and read first time HJ-57
   04/14/93  House  Referred to Committee on Ways and Means HJ-59
   05/25/93  House  Committee report: Favorable with amendment Ways
                     and Means HJ-7
   05/27/93  House  Amended HJ-160
   05/27/93  House  Read second time HJ-196
   05/27/93  House  Unanimous consent for third reading on next
                     legislative day HJ-196
   05/28/93  House  Read third time and sent to Senate HJ-3
   06/01/93  Senate Introduced and read first time SJ-49
   06/01/93  Senate Referred to Committee on Finance SJ-49
   06/01/93  Senate Recalled from Committee on Finance SJ-87
   06/02/93  Senate Read second time SJ-66
   06/02/93  Senate Ordered to third reading with notice of
                     amendments SJ-66
   06/03/93  Senate Amended SJ-41
   06/03/93  Senate Read third time and returned to House with
                     amendments SJ-41
   06/03/93  House  Concurred in Senate amendment and enrolled HJ-72
   06/10/93         Ratified R 265
   06/16/93         Signed By Governor
   06/16/93         Effective date 07/01/93
   07/13/93         Copies available



(A178, R265, H4081)

AN ACT TO ENACT THE "STATE GOVERNMENT ACCOUNTABILITY AND REFORM ACT OF 1993" INCLUDING PROVISIONS TO PROVIDE A STATEMENT OF INTENT TO ENSURE AGENCY HEADS ARE HELD ACCOUNTABLE FOR PUBLIC RESOURCES ENTRUSTED TO THEM, TO PROVIDE THAT THE BUDGET AND CONTROL BOARD SHALL MONITOR AND EVALUATE THE IMPLEMENTATION OF THE PROCUREMENT AND MANAGEMENT REFORMS HEREIN CONTAINED; TO AMEND SECTION 2-47-50, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ESTABLISHMENT OF PERMANENT PROJECTS BY THE BUDGET AND CONTROL BOARD, SO AS TO ALLOW AGENCIES AND INSTITUTIONS TO ADVERTISE FOR ARCHITECTURAL AND ENGINEERING SERVICES PRIOR TO BOARD APPROVAL OF THE PROJECT SO LONG AS THE ARCHITECTURAL AND ENGINEERING CONTRACT IS NOT AWARDED UNTIL AFTER A STATE PROJECT NUMBER HAS BEEN ASSIGNED; TO ADD SECTION 2-47-55 SO AS TO ESTABLISH THE ANNUAL PERMANENT IMPROVEMENT PROGRAM (APIP) REGARDING AN AGENCY'S PERMANENT IMPROVEMENT PROJECTS AND PROVIDE FOR THE APPROVAL OR DISAPPROVAL OF THE APIP; TO ADD SECTION 2-47-56 SO AS TO ALLOW AGENCIES AND INSTITUTIONS TO ACCEPT GIFTS-IN-KIND OF A VALUE LESS THAN TWO HUNDRED FIFTY THOUSAND DOLLARS FOR ARCHITECTURAL AND ENGINEERING SERVICES AND CONSTRUCTION WITH CERTAIN APPROVAL; TO ADD SECTION 8-1-160 SO AS TO PROVIDE THAT STATE AGENCIES MAY INCREASE OR DECREASE INDIVIDUAL EMPLOYEE SALARIES BASED ON PERFORMANCE UNDER CERTAIN CONDITIONS, TO ADD SECTION 8-1-170 SO AS TO AUTHORIZE STATE AGENCIES TO DEVELOP GROUP PRODUCTIVITY INCENTIVE PROGRAMS, TO ADD SECTION 8-1-180 SO AS TO PERMIT STATE AGENCIES TO SPENDNext PUBLIC FUNDS ON EMPLOYEE AWARDS AND FUNCTIONS, TO ADD SECTION 8-1-190 SO AS TO AUTHORIZE THE BUDGET AND CONTROL BOARD TO ENTER INTO PILOT PROGRAMS FOR INNOVATIONS IN STATE GOVERNMENT; TO ADD SECTION 8-11-15 SO AS TO ESTABLISH A MINIMUM THIRTY-SEVEN AND ONE-HALF HOUR WORKWEEK FOR AGENCY AND INSTITUTION EMPLOYEES WHO WORK FULL TIME, AND ALLOW THE USE OF ALTERNATIVE SCHEDULING TO MEET THE AGENCY'S OR INSTITUTION'S SERVICE NEEDS; TO AMEND SECTION 8-17-320 RELATING TO DEFINITIONS IN REGARD TO THE STATE EMPLOYEE GRIEVANCE PROCEDURE, SO AS TO REVISE CERTAIN DEFINITIONS; TO AMEND SECTION 8-17-330, AS AMENDED, RELATING TO STATE AGENCY EMPLOYEE GRIEVANCE PROCEDURES, SO AS TO FURTHER PROVIDE FOR CERTAIN SITUATIONS OR ACTIONS WHICH ARE NOT CONSIDERED GRIEVANCES; TO AMEND SECTION 11-35-20, RELATING TO THE PURPOSE AND POLICIES OF THE CONSOLIDATED PROCUREMENT CODE, SO AS TO REVISE THESE PURPOSES AND POLICIES; TO AMEND SECTION 11-35-45, AS AMENDED, RELATING TO PAYMENT FOR GOODS AND SERVICES RECEIVED BY THE STATE SO AS TO REQUIRE VENDORS TO SPECIFY ON THE INVOICE THAT CERTAIN LATE PAYMENT PENALTIES ARE APPLICABLE; TO AMEND SECTION 11-35-70, RELATING TO SCHOOL DISTRICTS BEING SUBJECT TO THE PROCUREMENT CODE, SO AS TO CORRECT CERTAIN TECHNICAL REFERENCES AND FURTHER PROVIDE FOR THE CONDUCT OF PROCUREMENT AUDITS; TO AMEND SECTION 11-35-310, AS AMENDED, RELATING TO DEFINITIONS UNDER THE PROCUREMENT CODE, SO AS TO REVISE CERTAIN DEFINITIONS; TO AMEND SECTION 11-35-810, RELATING TO THE MATERIALS MANAGEMENT OFFICE OF THE DIVISION OF GENERAL SERVICES SO AS TO DELETE A PROVISION REQUIRING THE MATERIALS MANAGEMENT OFFICER TO ANSWER DIRECTLY TO THE DIRECTOR OF THE DIVISION OF GENERAL SERVICES; TO ADD SECTION 11-35-835 SO AS TO REQUIRE THE STATE ENGINEER'S OFFICE TO COMPLETE CERTAIN REVIEWS WITHIN A SPECIFIED TIME; TO ADD SECTION 11-35-845 SO AS TO ALLOW THOSE GOVERNMENTAL BODIES WHICH HAVE TOTAL MANAGEMENT CAPABILITY TO OVERSEE THE ADMINISTRATION OF PERMANENT IMPROVEMENT PROJECTS; TO AMEND SECTION 11-35-1030, RELATING TO PROCUREMENT TRAINING AND CERTIFICATION, SO AS TO CORRECT A TECHNICAL MISTAKE; TO AMEND SECTION 11-35-1410, RELATING TO DEFINITIONS FOR PURPOSES OF SOURCE SELECTION AND CONTRACT INFORMATION, SO AS TO REVISE THE DEFINITION OF RESPONSIVE BIDDER; TO AMEND SECTION 11-35-1520, AS AMENDED, RELATING TO COMPETITIVE SEALED BIDDING, SO AS TO INCREASE FROM TWO THOUSAND FIVE HUNDRED DOLLARS TO TWENTY-FIVE THOUSAND DOLLARS THE AMOUNT ON WHICH COMPETITIVE SEALED BIDS ARE REQUIRED AND TO REVISE THE PROCEDURES FOR COMPETITIVE SEALED BIDDING; TO AMEND SECTION 11-35-1530, RELATING TO COMPETITIVE SEALED PROPOSALS, SO AS TO REVISE THE PROCEDURES FOR SUCH PROPOSALS; TO AMEND SECTION 11-35-1550, RELATING TO SMALL PURCHASE PROCEDURES, SO AS TO FURTHER PROVIDE FOR THESE PROCEDURES AND THE DOLLAR AMOUNTS CONSTITUTING SMALL PURCHASES; TO ADD SECTION 11-35-1825 SO AS TO DIRECT THE DIVISION OF GENERAL SERVICES TO ESTABLISH A PROCEDURE FOR PRE-QUALIFYING BIDDERS ON CONSTRUCTION PROJECTS; TO AMEND SECTION 11-35-2010, RELATING TO TYPES AND FORMS OF CONTRACTS, SO AS TO ALLOW A GOVERNMENTAL BODY TO ENTER INTO RENTAL CONTRACTS FOR EQUIPMENT, WITHOUT USE OF THE STATE'S STANDARD EQUIPMENT FORM, WHEN THE EQUIPMENT IS VALUED AT TEN THOUSAND DOLLARS OR LESS AND THE CONTRACT DOES NOT EXCEED NINETY DAYS; TO AMEND SECTION 11-35-2410, RELATING TO FINALITY OF DETERMINATIONS, SO AS TO FURTHER PROVIDE FOR THE TYPES OF DETERMINATIONS WHICH ARE CONSIDERED FINAL; TO AMEND SECTION 11-35-3020, AS AMENDED, RELATING TO CONSTRUCTION PROCUREMENT PROCEDURES, SO AS TO REVISE THESE PROCEDURES; TO ADD SECTION 11-35-3025 SO AS TO ALLOW AGENCIES AND INSTITUTIONS TO APPROVE CHANGES IN ARCHITECTURAL AND ENGINEERING CONTRACTS AND CONSTRUCTION CONTRACTS WHEN THE CHANGE DOES NOT ALTER THE PROJECT'S SCOPE AND DOES NOT EXCEED THE PROJECT'S BUDGET; TO AMEND SECTION 11-35-3030, RELATING TO BOND AND SECURITY, SO AS TO FURTHER PROVIDE FOR THE REQUIREMENTS OF BID SECURITY AND FOR CERTAIN WAIVERS OF THIS REQUIREMENT; TO AMEND SECTION 11-35-3210, RELATING TO APPLICABILITY AND POLICY OF ARCHITECT-ENGINEER, CONSTRUCTION MANAGEMENT, AND LAND SURVEYING SERVICES, SO AS TO FURTHER PROVIDE FOR THIS APPLICABILITY; TO AMEND SECTION 11-35-3220, RELATING TO PROCUREMENT PROCEDURES IN REGARD TO ARCHITECT-ENGINEER, CONSTRUCTION MANAGEMENT, AND LAND SURVEYING SERVICES, SO AS TO FURTHER PROVIDE FOR THESE PROCEDURES; TO AMEND SECTION 11-35-3230, RELATING TO PROCUREMENT PROCEDURES FOR CERTAIN TYPES OF CONTRACTS, SO AS TO FURTHER PROVIDE FOR THESE PROCEDURES AND THE MAXIMUM FEES THAT MAY BE PAID TO ONE PERSON OR FIRM FOR CERTAIN SERVICES; TO AMEND CHAPTER 35, TITLE 11 OF THE 1976 CODE, RELATING TO THE CONSOLIDATED PROCUREMENT CODE, BY ADDING ARTICLE 10 SO AS TO PROVIDE FOR AND REGULATE INDEFINITE DELIVERY CONTRACTS FOR CERTAIN SERVICES; TO AMEND ARTICLE 17, CHAPTER 35 OF TITLE 11, RELATING TO LEGAL AND CONTRACTUAL REMEDIES UNDER THE PROCUREMENT CODE, SO AS TO REVISE THESE REMEDIES, THE PROCEDURES FOR OBTAINING THESE REMEDIES, AND FOR THE MEMBERSHIP, DUTIES, FUNCTIONS, AND PROCEDURES OF THE PROCUREMENT REVIEW PANEL; AND TO AMEND SECTION 59-103-35, RELATING TO SUBMISSION OF BUDGET OF INSTITUTIONS OF HIGHER LEARNING, SO AS TO ALLOW PUBLIC INSTITUTIONS OF HIGHER EDUCATION TO SUBMIT SUMMARY BUDGETS TO THE COMMISSION ON HIGHER EDUCATION INSTEAD OF HAVING TO SUBMIT LINE-ITEM BUDGETS.

Be it enacted by the General Assembly of the State of South Carolina:

Citation

SECTION 1. This act may be cited as the "State Government Accountability and Reform Act of 1993."

Intent for efficient resource use

SECTION 2. It is the intent of the General Assembly to ensure that the heads of state agencies, departments, and institutions are held accountable for the effective and efficient use of the public resources entrusted to them annually in the appropriation process. Each agency, department, or institution head is expected to have in place an effective system of management controls to prevent and detect improper conduct by their employees. In the event of mismanagement, waste, or abuse allowed by an agency, department, or institution head, the Governor, constitutional officer, or governing board is expected to take swift and appropriate action to correct the matter and regain the public trust.

It is the intent of the General Assembly that agencies and institutions comply with the provisions of Code Sections 11-35-1520, 1-11-35, and 44-96-140, as amended, relating to vendor preferences. The Division of General Services shall not be required to audit for compliance with these sections.

Monitoring of reforms

SECTION 3. The Budget and Control Board shall monitor and evaluate implementation of the procurement and construction management reforms contained in this act. The purpose of the evaluation is to:

(1) identify cost savings from the reduced cost of goods and services procured and also cost savings through increased administrative efficiency; and

(2) report on whether agencies and institutions are complying with the provisions of Section 11-35-1560, relating to sole source procurements.

State agencies and institutions shall cooperate with the board in the collection of data requested by the board to conduct its evaluation. The board annually shall report to the House Ways and Means and Senate Finance Committees on the results of their evaluation. The Budget and Control Board also shall report to the Ways and Means and Senate Finance Committees on administrative cost savings or organizational changes in the Division of General Services as a result of the reforms contained in this act. This reporting requirement ends July 1, 1996.

Advertising for architectural and engineering services

SECTION 4. The first paragraph of Section 2-47-50 of the 1976 Code is amended to read:

"The board shall establish formally each permanent improvement project before actions of any sort which implement the project in any way may be undertaken and no expenditure of any funds for any services or for any other project purpose contracted for, delivered, or otherwise provided prior to the date of the formal action of the board to establish the project shall be approved. State agencies and institutions may advertise and interview for project architectural and engineering services for a pending project so long as the architectural and engineering contract is not awarded until after a state project number is assigned. After the committee has reviewed the form to be used to request the establishment of permanent improvement projects and has reviewed the time schedule for considering such requests as proposed by the board, requests to establish permanent improvement projects shall be made in such form and at such times as the board may require."

Annual permanent improvement programs

SECTION 5. The 1976 Code is amended by adding:

"Section 2-47-55. All state agencies responsible for providing and maintaining physical facilities are required to submit an Annual Permanent Improvement Program (APIP) to the Joint Bond Review Committee and the Budget and Control Board. The APIP must include all of the agency's permanent improvement projects anticipated and proposed to be started in the upcoming year. The purpose of the APIP process is to provide the board and the committee with a comprehensive view of each agency's permanent improvement activities. Agencies must submit an APIP to the committee and the board on or before June 15 of each year. The APIP covers the next fiscal year period beginning July 1. The APIP for each higher education agency, including the technical colleges, must be submitted through the Commission on Higher Education which must review the APIP and provide its recommendations to the board and the committee. The board and the committee may develop policies and procedures to implement and accomplish the purposes of this section. The APIP must be approved by August first of the fiscal year for which the APIP applies.

The State shall define a permanent improvement only in terms of capital improvements, as defined by generally accepted accounting principles, for reporting purposes to the State."

Acceptance of gifts-in-kind

SECTION 6. The 1976 Code is amended by adding:

"Section 2-47-56. Each state agency and institution may accept gifts-in-kind for architectural and engineering services and construction of a value less than two hundred fifty thousand dollars with the approval of the Commission of Higher Education or its designated staff, the Director of the Division of General Services, and the Joint Bond Review Committee or its designated staff. No other approvals or procedural requirements, including the provisions of Section 11-35-10, may be imposed on the acceptance of such gifts."

Employee salaries, productivity incentive programs, awards, and pilot programs

SECTION 7. The 1976 Code is amended by adding:

"Section 8-1-160. Notwithstanding other provisions of law, state agencies may increase or decrease individual employee salaries based upon performance. Such increase or decrease shall be determined by the agency. Performance increases shall not place an employee's salary above the maximum of the grade or executive compensation level. Performance decreases may not place an employee's salary below the minimum of the grade or executive compensation level. Performance decreases shall be based on the results of an EPMS evaluation. Employees assessed salary decreases may seek redress through the state employees' grievance system.

Section 8-1-170. State agencies are authorized to develop group productivity incentive programs for the recognition and award of team accomplishments through group performance. Employees of any organizational unit within each of the various agencies are eligible to share equally twenty-five percent of the identified savings resulting from reduced operational costs in the unit up to a maximum of two thousand dollars per employee in a fiscal year. The agency shall adopt policies and procedures to determine unit expenses or base data and for the year of participation in the group productivity incentive program. Records of proposals, actual dollar savings, and employee awards will be reported to the Budget and Control Board or its designee. Any bonus or cash award paid as a group productivity incentive shall not become a part of the employee's base salary and shall not be considered as compensation in terms of contributions to and determination of benefits for any of the state's retirement systems.

Section 8-1-180. State agencies and institutions shall be allowed to Previousspend public funds on employee plaques, certificates, and other events, including meals and similar types of recognition to reward innovations or improvements by individual employees or employee teams that enhance the quality of work or productivity or as a part of employee development programs of their agency or institution. Awards shall be limited to fifty dollars for each individual.

Section 8-1-190. Notwithstanding other provisions of law, the Budget and Control Board is authorized to enter into pilot programs with individual agencies or groups of agencies in order to create innovations in State Government. The Budget and Control Board will monitor the findings and results of pilot programs to determine if legislative recommendations should be provided to the General Assembly."

Minimum workweek

SECTION 8. The 1976 Code is amended by adding:

"Section 8-11-15. The minimum full-time workweek for employees of state agencies and institutions is thirty-seven and one-half hours. The agency or institution may vary an employee's work schedule through the use of alternative scheduling strategies to meet the needs and service delivery requirements of the agency or institution."

Definitions revised

SECTION 9. Section 8-17-320(11) and (14) of the 1976 Code are amended to read:

"(11) `Probationary employee' means a full-time or part-time employee in the initial working test period of employment with the State of not more than twelve months' duration for noninstructional personnel or the academic year duration for instructional personnel. An employee who receives an unsatisfactory performance appraisal during the probationary period shall be terminated prior to becoming a permanent employee. The provisions of this item apply to employees hired before June 30, 1993.

(14) `Temporary employee' means a full-time or part-time employee hired to fill a position for a period not to exceed two years."

Actions or situations not considered grievances

SECTION 10. The fourth paragraph of Section 8-17-330 of the 1976 Code is amended to read:

"No employee shall be disciplined or otherwise prejudiced in employment for exercising rights or testifying under the plan, and agency heads shall encourage the use of the plan in the resolution of grievances arising in the course of public employment. As used in this article, grievances shall include dismissals, suspensions, involuntary reassignments, and demotions. Reclassification, reassignments, and transfers to the same pay grade are not considered grievances. Promotions shall not be deemed grievances. However, where an allegation is made that the grievant was excluded from consideration for promotion to a position greater than one organizational level above his present level for which he was qualified when the promotional opportunity occurred, and the grievant applied or would have applied if he had known of the promotion opportunity, and the state personnel director determines that there is any material issue of fact or conclusion to be drawn from the facts of the allegation, then the promotion shall be deemed grievable."

Purposes and policies revised

SECTION 11. Section 11-35-20 of the 1976 Code is amended to read:

"Section 11-35-20. The underlying purposes and policies of this code are:

(a) to provide increased economy in state procurement activities and to maximize to the fullest extent practicable the purchasing values of funds while ensuring that procurements are the most advantageous to the State and in compliance with the provisions of the Ethics, Government Accountability, and Campaign Reform Act;

(b) to foster effective broad-based competition for public procurement within the free enterprise system;

(c) to develop procurement capability responsive to appropriate user needs;

(d) to consolidate, clarify, and modernize the law governing procurement in this State and permit the continued development of explicit and thoroughly considered procurement policies and practices;

(e) to require the adoption of competitive procurement laws and practices by units of state and local governments;

(f) to ensure the fair and equitable treatment of all persons who deal with the procurement system which will promote increased public confidence in the procedures followed in public procurement;

(g) to provide safeguards for the maintenance of a procurement system of quality and integrity with clearly defined rules for ethical behavior on the part of all persons engaged in the public procurement process; and

(h) to develop an efficient and effective means of delegating roles and responsibilities to the various government procurement officers."

Late payment charges

SECTION 12. Section 11-35-45(B) of the 1976 Code, as last amended by Act 501 of 1992, is further amended to read:

"(B) All agencies and institutions of the State are required to comply with the provisions of this section. Beginning July 1, 1983, the Department of Mental Health, the Department of Mental Retardation, the Department of Corrections, the Interagency Council on Public Transportation, and the Sea Grants Consortium shall process all payments for goods and services through the office of the Comptroller General. Only the lump sum institutions of higher education are responsible for the payment of all goods or services within thirty work days after the receipt of the goods or services, whichever is received later, and shall pay an amount not to exceed fifteen percent per annum on any unpaid balance which exceeds the thirty work-day-period, if the vendor specifies on the statement or the invoice submitted to such institutions that a late penalty is applicable if not paid within thirty work days after the receipt of goods or services."

Conduct of procurement audits

SECTION 13. Section 11-35-70 of the 1976 Code is amended to read:

"Section 11-35-70. Irrespective of the source of funds any school district whose budget of total expenditures, including debt service, exceeds seventy-five million dollars annually is subject to the provisions of Chapter 35 of Title 11, and shall notify the Director of the Division of General Services of the Budget and Control Board of its expenditures within ninety days after the close of its fiscal year. However, if a district has its own procurement code which is in the written opinion of the Division of General Services of the State Budget and Control Board substantially similar to the provisions of the South Carolina Consolidated Procurement Code, the district is exempt from the provisions of the South Carolina Consolidated Procurement Code except for a procurement audit which must be performed every three years by an audit firm approved by the Division of General Services. Costs associated with the internal review and audits are the responsibility of the school district and will be paid to the entity performing the audit."

Definition revised

SECTION 14. Section 11-35-310(27) of the 1976 Code is amended to read:

"(27) `Services' means the furnishing of labor, time, or effort by a contractor not required to deliver a specific end product, other than reports which are merely incidental to required performance. This term includes consultant services other than architectural, engineering, land surveying, construction management, and related services. This term does not include employment agreements or services as defined in Section 11-35-310(1)(d)."

Definition revised

SECTION 15. Section 11-35-310(33) of the 1976 Code is amended to read:

"(33) `Term contract' means a contract established by the chief procurement officer for a specific product or service for a specified time and for which it is mandatory that all governmental bodies procure their requirements for the goods and services during its term. If a governmental body is offered a price that is less than the term contract price for the same goods or services, it may purchase from the vendor offering the lower price. A term contract may be a multiterm contract as provided in Section 11-35-2030."

Reporting provision deleted

SECTION 16. Section 11-35-810 of the 1976 Code is amended to read:

"Section 11-35-810. There is hereby created, within the Division of General Services, a materials management office to be headed by the materials management officer."

Reviews required within specified time

SECTION 17. The 1976 Code is amended by adding:

"Section 11-35-835. The Office of State Engineer must review properly completed schematic design, properly completed design development, and properly completed construction documents within a total of forty-five days of submission of documents."

Overseeing of permanent improvement projects

SECTION 18. The 1976 Code is amended by adding:

"Section 11-35-845. Each agency of state government that has total management capability as defined and certified by the Division of General Services shall be allowed to oversee the administration of permanent improvement projects with the State Engineer's office serving as an audit function. The State Engineer's office shall assist those small agencies who do not have the necessary expertise in permanent improvements."

Technical correction

SECTION 19. Section 11-35-1030 of the 1976 Code is amended to read:

"Section 11-35-1030. The Division of General Services shall develop a system of training for procurement in accordance with regulations by the board. Such training shall encompass the latest techniques and methods of public procurement. If deemed appropriate by the Division of General Services, such training shall include a requirement for the certification of the procurement officer of each purchasing agency." Definition revised

SECTION 20. Section 11-35-1410(7) of the 1976 Code is amended to read:

"(7) `Responsive bidder or offeror' means a person who has submitted a bid or offer which conforms in all material aspects to the invitation for bids or request for proposals."

Competitive sealed bidding procedures revised

SECTION 21. Section 11-35-1520 of the 1976 Code, as last amended by Act 442 of 1992, is further amended to read:

"Section 11-35-1520. (1) Condition for Use. Contracts amounting to twenty-five thousand dollars or more shall be awarded by competitive sealed bidding except as otherwise provided in Section 11-35-1510.

(2) Invitation for Bids. An invitation for bids shall be issued in an efficient and economical manner to at least three qualified sources on the bidders' lists appropriate for the particular procurement, and shall include specifications and all contractual terms and conditions applicable to the procurement. If the list does not contain three qualified sources, invitations for bids shall be issued to such qualified sources as are available.

(3) Bidders' Lists. All sources requesting to be put on a bidder's list shall be so enlisted, unless the chief procurement officer or head of purchasing agency makes a written determination that the source should not be enlisted in accordance with regulations of the board. Decisions to reject enlistment shall be appealable to the appropriate chief procurement officer and the Procurement Review Panel as specified in Article 17 of this chapter. The appropriate chief procurement officer and the heads of procurement agencies shall ensure that the bidders' lists contain all known sources interested in bidding on state procurement. The chief procurement officer shall review periodically the bidders' lists of the various governmental bodies and shall require the addition to such lists of any appropriate sources which are not contained therein.

(4) Notice. Adequate notice of the invitation for bids shall be given at a reasonable time prior to the date set forth therein for the opening of bids. Such notice shall include utilization of bidders' lists and may include publications in a newspaper of general circulation in the State such as `South Carolina Business Opportunities.'

(5) Receipt and Safeguarding of Bids. All bids (including modifications) received prior to the time of opening shall be kept secure and unopened in a locked box or safe, except as provided for by regulation of the board.

(6) Bid Opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids and in the manner prescribed by regulation of the board. The amount of each bid, and such other relevant information as may be specified by regulation, together with the name of each bidder, shall be tabulated. The tabulation shall be open to the public inspection at that time.

(7) Bid Acceptance and Bid Evaluation. Bids shall be accepted unconditionally without alteration or correction, except as otherwise authorized in this code. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the invitation for bids. Bids shall be evaluated based on the requirements set forth in the invitation for bids and in accordance with the regulations of the board.

(8) Correction or withdrawal of Bids; Cancellation of Awards. Correction or withdrawal of inadvertently erroneous bids before bid opening, withdrawal of inadvertently erroneous bids after award, or cancellation and reaward of awards or contracts, after award but prior to performance may be permitted in accordance with regulations promulgated by the board. After bid opening no changes in bid prices or other provisions of bids prejudicial to the interest of the State or fair competition shall be permitted. Except as otherwise provided by regulation, all decisions to permit the correction or withdrawal of bids, or to cancel awards or contracts, after award but prior to performance shall be supported by written determination of appropriateness made by the chief procurement officers or head of a purchasing agency.

(9) Tie bids. If two or more bidders are tied in price while otherwise meeting all of the required conditions, awards are determined as follows:

(a) If there is a South Carolina firm tied with an out-of-state firm, the award must be made automatically to the South Carolina firm.

(b) Tie bids involving South Carolina produced or manufactured products, when known, and items produced or manufactured out of the State must be resolved in favor of the South Carolina commodity.

(c) Tie bids involving South Carolina firms must be resolved in favor of the South Carolina firm located in the same taxing jurisdiction as the governmental body's consuming location.

(d) Tie bids involving South Carolina firms in the same taxing jurisdiction as the governmental body's consuming location must be resolved by the flip of a coin in the office of the chief procurement officer or the head of a purchasing agency witnessed by all interested parties.

These are the only conditions under which any in-state preference is shown.

(e) Competitive procurements made by any governmental body must be made from a responsive and responsible vendor resident in South Carolina:

(i) for procurements under two million, five hundred thousand dollars, if the bid does not exceed the lowest qualified bid from a nonresident vendor by more than two percent of the latter bid, and if the resident vendor has made written claim for the preference at the time the bid was submitted;

(ii) for procurements in excess of two million, five hundred thousand dollars, if the bid does not exceed the lowest qualified bid from a nonresident vendor by more than one percent of the latter bid, and if the resident vendor has made written claim for the preference at the time the bid was submitted. A vendor is considered to be a resident of this State if the vendor is (a) an individual, partnership, association, or corporation that is authorized to transact business within the State, (b) maintains an office in the State, (c) maintains an inventory for expendable items which are representative of the general type of commodities on which the bid is submitted and located in South Carolina at the time of the bid having a total value of ten thousand dollars or more based on the bid price, but not to exceed the amount of the contract, or is a manufacturer which is headquartered and has at least a ten million dollar payroll in South Carolina and the product is made or processed from raw materials into a finished end product by such manufacturer or an affiliate (as defined in Section 1563 of the Internal Revenue Code) of such manufacturer, and (d) has paid all assessed taxes.

Preferences under this subsection do not apply against a resident vendor whether or not he made written claim for the preference at the time of bid. Preferences under this subsection do not apply to contracts procured under Section 11-35-1530 nor to prime contractors or subcontractors as relates to the procurement of construction under Section 11-35-3020 nor to a vendor of goods whether in quantity or not when the price of a single unit of the item involved is more than ten thousand dollars.

(10) Award. Unless there is a compelling reason to reject bids as prescribed by regulation of the board, notice of an intended award of a contract to the lowest responsive and responsible bidder whose bid meets the requirements set forth in the invitation for bids shall be given by posting such notice at a location specified in the invitation for bids. The invitation for bids and the posted notice must contain a statement of a bidder's right to protest under Section 11-35-4210(1) and the date and location of posting must be announced at bid opening. When a contract has a total or potential value in excess of fifty thousand dollars in addition to the posted notice, notice of an intended award must be given to all bidders responding to the solicitation by first-class mail to the name and address on the bid documents. Such mailed notice must contain a statement of the bidder's right to protest under Section 11-35-4210(1).

When a contract has a total or potential value in excess of fifty thousand dollars, sixteen days after notice is given the agency may enter a contract with the bidder named in the notice in accordance with the provisions of this code and of the bid solicited. A determination of responsibility must be made before award in accordance with Section 11-35-1810.

(11) Multi-Step Sealed Bidding. When it is considered initially impractical to prepare a purchase description to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers to be followed by an invitation for bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation.

(12) Provisions Not to Apply. The provisions of this section shall not apply to maintenance services for aircraft of the South Carolina Aeronautics Commission.

(13) Minor Informalities and Irregularities in Bids. A minor informality or irregularity is one which is merely a matter of form or is some immaterial variation from the exact requirements of the invitation for bids having no effect or merely a trivial or negligible effect on total bid price, quality, quantity, or delivery of the supplies or performance of the contract, and the correction or waiver of which would not affect the relative standing of, or be otherwise prejudicial to, bidders. The procurement officer shall either give the bidder an opportunity to cure any deficiency resulting from a minor informality or irregularity in a bid or waive any such deficiency when it is to the advantage of the State. Such communication or determination shall be in writing. Examples of minor informalities or irregularities include, but are not limited to:

(a) failure of a bidder to return the number of copies of signed bids required by the solicitation;

(b) failure of a bidder to furnish the required information concerning the number of the bidder's employees or failure to make a representation concerning its size;

(c) failure of a bidder to sign its bid, but only if the firm submitting the bid has formally adopted or authorized the execution of documents by typewritten, printed, or rubber stamped signature and submits evidence of such authorization, and the bid carries such a signature or the unsigned bid is accompanied by other material indicating the bidder's intention to be bound by the unsigned document, such as the submission of a bid guarantee with the bid or a letter signed by the bidder with the bid referring to and identifying the bid itself;

(d) failure of a bidder to acknowledge receipt of an amendment to a solicitation, but only if (i) the bid received indicates in some way that the bidder received the amendment, such as where the amendment added another item to the solicitation and the bidder submitted a bid, thereon provided that the bidder states under oath that it received the amendment prior to bidding and that the bidder will stand by its bid price or (ii) the amendment has no effect or merely a trivial or negligible effect on price, quality, quantity, delivery, or the relative standing of bidders, such as an amendment correcting a typographical mistake in the name of the governmental body;

(e) failure of a bidder to furnish an affidavit concerning affiliates;

(f) failure of a bidder to execute the certifications with respect to Equal Opportunity and Affirmative Action Programs;

(g) failure of a bidder to furnish cut sheets or product literature;

(h) failure of a bidder to furnish certificates of insurance;

(i) failure of a bidder to furnish financial statements;

(j) failure of a bidder to furnish references; (k) failure of a bidder to furnish its bidder number; and

(l) notwithstanding Section 40-11-180, the failure of a bidder to indicate his contractor's license number or other evidence of licensure, provided that no contract shall be awarded to the bidder unless and until the bidder is properly licensed under the laws of South Carolina."

Competitive sealed proposal procedures revised

SECTION 22. Section 11-35-1530 of the 1976 Code is amended to read:

"Section 11-35-1530. (1) Conditions for Use. When the chief procurement officer, or the head of a purchasing agency, determines in writing that the use of competitive sealed bidding is either not practicable or not advantageous to the State, a contract may be entered into by competitive sealed proposals subject to the provisions of Section 11-35-1520 and the ensuing regulations, unless otherwise provided for in this section. Subject to the requirements of Section 11-35-3220, the board may provide by regulation that it is either not practicable or not advantageous to the State to procure specified types of supplies, services, or construction by competitive sealed bidding.

(2) Request for Proposal. Proposals shall be solicited from at least three qualified sources, when such sources are available, through a request for proposals.

(3) Public Notice. Adequate public notice of the request for proposals shall be given in the same manner as provided in Section 11-35-1520(4).

(4) Receipt of Proposals. Proposals shall be opened publicly in accordance with regulations of the board. A tabulation of proposals shall be prepared in accordance with regulations promulgated by the board and shall be open for public inspection after contract award.

(5) Request for Qualifications. Prior to soliciting proposals, the procuring agency, acting through the authorized procurement officer, may issue a request for qualifications from prospective offerors. Such request shall contain at a minimum a description of the goods or services to be solicited by the request for proposals and the general scope of the work and shall state the deadline for submission of information and how prospective offerors may apply for consideration. The request shall require information only on their qualifications, experience, and ability to perform the requirements of the contract.

After receipt of the responses to the request for qualifications from prospective offerors, the prospective offerors shall be ranked from most qualified to least qualified on the basis of the information provided. Proposals shall then be solicited from at least the top two prospective offerors by means of a request for proposals. The failure of a prospective offeror to be selected to receive the request for proposals shall not be grounds for protest under Section 11-35-4210.

(6) Public Notice. Adequate public notice of the request for qualifications shall be given in the manner provided in Section 11-35-1520(4).

(7) Evaluation Factors. The request for proposals shall state the relative importance of the factors to be considered in evaluating proposals but shall not require a numerical weighting for each factor. Price may but need not be an initial evaluation factor.

(8) Discussion with Responsive Offerors. As provided in the request for proposals, discussions may be conducted with responsive offerors who submit proposals for the purpose of clarification to assure full understanding of the requirements of the request for proposals. All offerors, whose proposals in the procuring agency's sole judgment need clarification shall be accorded such an opportunity.

(9) Selection and Ranking. Proposals shall be evaluated using only the criteria stated in the request for proposals and there must be adherence to any weightings that have been previously assigned. Once evaluation is complete, all responsive offerors shall be ranked from most advantageous to least advantageous to the State, considering only the evaluation factors stated in the request for proposals. If price is an initial evaluation factor, award shall be made in accordance with Section 11-35-1530(10) below.

If price is not an initial evaluation factor, negotiations shall be conducted with the top ranked responsive offeror for performance of the contract at a price which, in the sole opinion of the procuring agency, is fair and reasonable to the State. Should the procurement official representing the procurement agency be unable to negotiate a contract at a price which, in the sole opinion of the procuring agency, is fair and reasonable to the State, negotiations shall be formally terminated with the top ranked responsive offeror and negotiations commenced with the second most advantageous responsive offeror, and then the third and so on until a satisfactory contract has been negotiated. In conducting negotiations, there must be no disclosure of any information derived from proposals submitted by competing offerors.

(10) Award. Award must be made to the responsive offeror whose proposal is determined in writing to be the most advantageous to the State, taking into consideration price and the evaluation factors set forth in the request for proposals, unless the procuring agency determines to utilize one of the options provided in Section 11-35-1530(11). The contract file shall contain the basis on which the award is made and must be sufficient to satisfy external audit. Procedures and requirements for the notification of intent to award the contract shall be the same as those stated in Section 11-35-1520(10).

(11) Other. If, after following the procedures set forth in Section 11-35-1530(9), a contract is not able to be negotiated, the scope of the request for proposals may be changed in an effort to reduce the cost to a fair and reasonable amount, and all responsive offerors must be allowed to submit their best and final offers. Where price was an initial evaluation factor, the procuring agency, through the appropriate procurement official may, in its sole discretion and not subject to challenge through a protest filed under Section 11-35-4210, proceed in any of the manners indicated below:

(1) negotiate price with the highest scoring offeror. If a satisfactory price cannot be agreed upon, price negotiations may be conducted in the sole discretion of the procuring agency with the second, and then the third, and so on, ranked offerors to such level of ranking as determined by the procuring agency in its sole discretion; or

(2) negotiate with the highest ranking offeror on matters affecting the scope of the contract so long as the overall nature and intent of the contract is not changed. If a satisfactory contract cannot be negotiated with the highest ranking offeror, negotiations may be conducted in the sole discretion of the procuring agency with the second, and then the third, and so on, ranked offerors to such level of ranking as determined by the procuring agency in its sole discretion; or

(3) change the scope of the request for proposals and give all responsive offerors an opportunity to submit best and final offers.

If the agency chooses any of these options, and is still unable to award a contract, it may repeat any of the procedures outlined herein until a proposed contract is successfully achieved."

Small purchases

SECTION 23. Section 11-35-1550 of the 1976 Code is amended to read:

"Section 11-35-1550. (1) Authority. The following small purchase procedures may be utilized in conducting procurements for governmental bodies that are less than $25,000.00 in actual or potential value. Any agency may conduct its own procurement under $5,000.00 in actual or potential value, and any agency that has received procurement certification pursuant to Section 11-35-1210 to handle the type and estimated value of the procurement may conduct the procurement under its own authority in accordance with the procedures prescribed herein; provided, however, that procurement requirements shall not be artificially divided by governmental bodies so as to constitute a small purchase under this section.

(2) Competition and Price Reasonableness.

(a) Purchases Not in Excess of $1,500.00. Small purchases not exceeding $1,500.00 may be accomplished without securing competitive quotations if the prices are considered to be reasonable. The purchasing office shall annotate the purchase requisition: `Price is fair and reasonable' and sign. Such purchases shall be distributed equitably among qualified suppliers. When practical, a quotation will be solicited from other than the previous supplier prior to placing a repeat order. The administrative cost of verifying the reasonableness of the price of purchase `not in excess of' may more than offset potential savings in detecting instances of overpricing. Therefore, action to verify the reasonableness of the price need be taken only when the procurement officer of the governmental body suspects that the price may not be reasonable, e.g., comparison to previous price paid, personal knowledge of the item involved.

(b) Purchases from $1,501.00 to $5,000.00. Solicitations of verbal or written quotes from a minimum of three qualified sources of supply shall be made and documentation of the quotes attached to the purchase requisition. The award shall be made to the lowest responsive and responsible source.

(c) Purchases from $5,001.00 to $10,000.00. Solicitation of written quotes from a minimum of three qualified sources of supply shall be made and documentation of the quotes attached to the purchase requisition. The award shall be made to the lowest responsive and responsible sources.

(d) Purchases from $10,001.00 to $25,000.00. Written solicitation of written quotes from a minimum of five qualified sources of supply shall be made. The procurement shall be advertised at least once in the South Carolina Business Opportunities publication. A copy of the written solicitation and written quotes shall be attached to the purchase requisition. The award shall be made to the lowest responsive and responsible source.

(3) Protest Rights. The provisions of Section 11-35-4210 shall not apply to contracts awarded under the procedures set forth in this section."

Pre-qualifying construction bidders

SECTION 24. The 1976 Code is amended by adding:

"Section 11-35-1825. The State Engineer's Office shall develop a procedure and a list of criteria for pre-qualifying construction bidders. The criteria shall include, but not be limited to, prior performance, recent past references on all aspects of performance, financial stability, and experience on similar construction projects. A governmental body may use the pre-qualification process only for projects where the construction involved is unique in nature as determined by the State Engineer's Office, and under the supervision of the State Engineer's Office unless the project falls within the governmental body's procurement certification limits.

When the prequalification process is employed, only those bidders who are pre-qualified through this procedure are entitled to submit a bid for the project. The determination of which bidders are pre-qualified, and thereby entitled to bid, is not protestable under Section 11-35-4210 or any other provision of this code."

Equipment rental contracts

SECTION 25. Section 11-35-2010(2) of the 1976 Code is amended to read:

"(2) Contract forms. The board shall promulgate by regulation the form of the contracts to be used in connection with state purchasing and construction. The forms as shall be developed for Article 9 of this chapter shall be printed as a part of those regulations. A governmental body may enter into a contract or agreement without using the form promulgated pursuant to the board's regulation when the contract or agreement is for the rental of equipment valued at ten thousand dollars or less and the duration of the contract or agreement does not exceed ninety days."

Determinations considered final

SECTION 26. Section 11-35-2410 of the 1976 Code is amended to read:

"Section 11-35-2410. The determinations required by Section 11-35-1520(8) (Competitive Sealed Bidding: Correction or Withdrawal of Bids; Cancellation of Awards), Section 11-35-1530(1) (Competitive Sealed Proposals, Conditions for Use), Section 11-35-1530(9) (Competitive Sealed Proposals, Selection and Ranking of Prospective Offerors), Section 11-35-1530(10) (Competitive Sealed Proposals Award), Section 11-35-1540 (Negotiations After Unsuccessful Competitive Sealed Bidding), Section 11-35-1560 (Sole Source Procurement), Section 11-35-1570 (Emergency Procurement), Section 11-35-1810(2) (Responsibility of Bidders and Offerors, Determination of Nonresponsibility), Section 11-35-1830(3) (Cost or Pricing Data, Cost or Pricing Data Not Required), Section 11-35-2010 (Types and Forms of Contracts), Section 11-35-2020 (Approval of Accounting System), Section 11-35-2030(2) (Multi-Term Contracts, Determination Prior to Use), Section 11-35-3220(5) (Procurement Procedure, Selection and Ranking of the Five Most Qualified), and Section 11-35-4210(7) (Stay of Procurement During Protests. Decision to Proceed) shall be final and conclusive unless they are clearly erroneous, arbitrary, capricious, or contrary to law. The chief procurement officers shall review samples of such determinations periodically and issue reports and recommendations on the appropriateness of the determinations made."

Construction procurement procedures revised

SECTION 27. Section 11-35-3020 of the 1976 Code, as last amended by Act 442 of 1992, is further amended to read:

"Section 11-35-3020. (1) Source Selection. All state construction contracts shall be awarded by competitive sealed bidding pursuant to the procedures set forth in Section 11-35-1520 subject to the exceptions enumerated in subsection (2) of this section and except as provided in Sections 11-35-1550, 11-35-1560, and 11-35-1570. Competitive sealed proposals as provided in Section 11-35-1530 and multi-step sealed bidding as provided in Section 11-35-1520(11) shall not be used, except in such cases and in accordance with criteria as may be authorized and prescribed by regulation of the board.

(2) Exceptions in Competitive Sealed Bidding Procedures. The process of competitive sealed bidding as required by subsection (1) of this section shall be performed in accordance with the procedures outlined in Article 5 of this code subject to the following exceptions:

(a) Invitation for Bids. In lieu of Section 11-35-1520(2), Section 11-35-1520(3), and Section 11-35-1520(4), invitations for bids for each state construction project subject to subsection (1) of this section shall be made in the following manner. Each using agency shall be responsible for developing a formal invitation for bids for each state construction project subject to subsection (1) of this section. The invitation shall include, but not be limited to, all contractual terms and conditions applicable to the procurement. A copy of each invitation for bids shall be filed with the state engineer's office and shall be formally advertised in an official state government publication. The manner in which this official state government publication shall be published, the content of the publication itself, the frequency of the publication, the method of subscription to the publication, and the manner by which the publication will be distributed shall be established by regulation of the board.

(b) Bid Acceptance. In lieu of Section 11-35-1520(7), the following provision applies. Bids must be accepted unconditionally without alteration or correction, except as otherwise authorized in this code. The using agency's invitation for bids shall set forth all requirements of the bid including, but not limited to:

(i) The architectural and engineering firm hired by the agency must determine the significant subcontractors needed for the project, without percentages or dollars, on a project-by-project basis. It is mandatory that these significant subcontractors be included in the invitation for bids and the response to the invitation for bids. Any bidder in response to an invitation for bids shall set forth in his bid the name and location of the place of business of each significant subcontractor as referenced in appropriate documents of the American Institute of Architects (with no percentages or dollars) on a project-by-project basis and include these in the bid documents as mandatory to be supplied with the bid. If the prime contractor determines to use his own employees to perform any portion of the work for which he would otherwise be required to list a subcontractor and if the prime contractor is qualified to perform such work under the terms of the invitation for bids, the prime contractor shall indicate this in his bid and not subcontract any of that work except with the approval of the using agency for good cause shown.

(ii) Failure to comply with the listing requirements of subitem (i) above renders the bidder's bid unresponsive.

(iii) No prime contractor whose bid is accepted shall substitute any person as subcontractor in place of the subcontractor listed in the original bid, except for one or more of the following reasons:

(a) upon a showing satisfactory to the using agency by the contractor that a subcontractor who was listed is not financially responsible; (b) upon a showing satisfactory to the using agency by the contractor that the scope of work bid by a listed subcontractor did not include a portion of the work required in the plans and specifications, and the exclusion is not clearly set forth in the listed subcontractor's original bid;

(c) upon a showing satisfactory to the using agency made by the contractor within four working days of the bid opening that the subcontractor was listed as a result of an inadvertent clerical error;

(d) upon a showing satisfactory to the using agency by the contractor that the listed subcontractor failed or refused to submit a performance and payment bond when requested by the prime contractor after the subcontractor had represented to the prime contractor that he could obtain a performance and payment bond;

(e) upon a showing satisfactory to the using agency by the contractor that the listed subcontractor is required to be licensed and does not have the license by the time it is required by law;

(f) when the listed subcontractor fails or refuses to perform his subcontract;

(g) when the work of the listed subcontractor is found by the using agency to be substantially unsatisfactory;

(h) upon mutual agreement of the contractor and subcontractor;

(i) with the consent of the using agency for good cause shown.

The request for substitution must be made to the using agency in writing. This written request does not give rise to any private right of action against the prime contractor in the absence of actual malice.

(iv) Where substitution is allowed, the prime contractor, before obtaining prices from any other subcontractor, must attempt in good faith to negotiate a subcontract with at least one subcontractor whose bid was received prior to the submission of the prime contractor's bid. Nothing in this section affects a contractor's ability to request withdrawal of a bid in accordance with the provisions of this code and the regulations promulgated under it.

(c) In lieu of Section 11-35-1520(10) the following provisions apply. Unless there is a compelling reason to reject bids as prescribed by regulation of the board, notice of an intended award of a contract to the lowest responsive and responsible bidder whose bid meets the requirements set forth in the invitation for bids shall be given by posting such notice at a location which has been specified in the invitation for bids. The invitation for bids and the posted notice must contain a statement of a bidder's right to protest under Section 11-35-4210(1) and the date and location of posting must be announced at bid opening. In addition to posting notice as provided above, the using agency shall promptly send all responsive bidders a copy of the notice of intended award and of the bid tabulation. Such mailed notice must indicate the posting date and must contain a statement of the bidder's right to protest under Section 11-35-4210(1).

Sixteen days after notice is given the agency may enter into a contract with the bidder named in the notice in accordance with the provisions of this code and of the bid solicited. A determination of responsibility must be made before award in accordance with Section 11-35-1810.

(d) Negotiations After Unsuccessful Competitive Sealed Bidding. In lieu of Section 11-35-1540, the following provisions apply:

(1) When bids received pursuant to an invitation for bids exceed available funds or were not independently reached in open competition and it is determined in writing by the chief procurement officer or his designee that time or other circumstances will not permit the delay required to resolicit competitive sealed bids, a contract may be negotiated pursuant to this section with the lowest responsible and responsive bidder, provided that the lowest base bid does not exceed available funds by an amount greater than five percent of the construction budget established for that portion of the work. The using agency may change the scope of the work to reduce the cost to be within the established construction budget.

(2) When the lowest base bid received pursuant to an invitation for bids exceeds approved available funds and the using agency is able to identify additional funds for the project, as certified by the appropriate fiscal officers, in the amount of the difference between the lowest base bid and the approved available funds for the project, the using agency shall submit its request to use such additional funds to the board and the Joint Bond Review Committee in accordance with Sections 3A and 3B of Act 761 of 1976 which were added pursuant to Sections 2-47-40, and 2-47-50."

Changes in architectural, engineering, and construction contracts

SECTION 28. The 1976 Code is amended by adding:

"Section 11-35-3025. Each agency of state government shall be allowed to approve and pay for amendments to architectural/engineering contracts and change orders to construction contracts, within agency certification which do not alter the original scope or intent of the project, and which do not exceed the previously approved project budget."

Bid security revisions

SECTION 29. Section 11-35-3030(1)(a) of the 1976 Code is amended to read:

"(1) Bid Security. (a) Requirement for Bid Security. Bid security is required for all competitive sealed bidding for construction contracts in excess of one hundred thousand dollars and such other contracts as may be prescribed by the state engineer's office. Bid security shall be a bond provided by a surety company meeting the criteria established by the regulations of the board or otherwise supplied in a form which may be established by regulation of the board."

Curing of deficiencies

SECTION 30. Section 11-35-3030(1)(c) of the 1976 Code is amended to read:

"(c) Rejection of Bids for Noncompliance with Bid Security Requirements. When the invitation for bids requires security, noncompliance requires that the bid be rejected except that a bidder who fails to provide bid security in the proper amount or a bid bond with the proper rating shall be given one working day from bid opening to cure such deficiencies. If the bidder cannot cure these deficiencies within one working day of bid opening, his bid shall be rejected."

Waiver of requirements

SECTION 31. Section 11-35-3030(2)(a) of the 1976 Code is amended by adding at the end:

"(iii) in the case of a construction contract valued at one hundred thousand dollars or less, the using agency may waive the requirements of (i) and (ii) above, provided that the using agency has protected the State."

Applicability of certain provisions

SECTION 32. Section 11-35-3210(1) of the 1976 Code is amended to read:

"(1) Applicability. Architect-engineer, construction management, and land surveying services shall be procured as provided in Section 11-35-3220 except as authorized by Sections 11-35-1560, 11-35-1570, and 11-35-3230."

Procedures revised

SECTION 33. Section 11-35-3220(3), (5), and (6) of the 1976 Code are amended to read:

"(3) Response to Invitation. The date for submission of information from interested persons or firms in response to an invitation shall be not less than fifteen days after publication of the invitation. Interested architect-engineer, construction management, and land surveying persons or firms shall be required to respond to the invitation with the submission of a current and accurate Federal Standard Form 254, Architect-Engineer and Related Services Questionnaire and Federal Standard Form 255, Architect-Engineer and Related Services Questionnaire for Specific Project, or such similar information as the board may prescribe by regulation, and any other information which the particular invitation may require.

(5) Selection and Ranking of the Five Most Qualified. The agency selection committee shall evaluate each of the persons or firms interviewed in view of their:

(a) past performance;

(b) the ability of professional personnel;

(c) willingness to meet time and budget requirements;

(d) location;

(e) recent, current, and projected work loads of the firms;

(f) creativity and insight related to the project; and

(g) related experience on similar projects. Based upon these evaluations, the agency selection committee shall select the five persons or firms which, in its judgment, are the best qualified, ranking the five in priority order. The agency selection committee's report ranking the five chosen persons or firms shall be in writing and shall include data substantiating its determinations.

(6) Notice of Selection and Ranking. When it is determined that the ranking report is final by the agency, written notification of the election and order of preference shall be immediately sent to all of those that responded to the agency selection committee's invitation to submit information."

Procedures and maximum fees to any one person revised

SECTION 34. Section 11-35-3230 of the 1976 Code is amended to read:

"Section 11-35-3230. (1) Procurement Procedures for Certain Contracts. All governmental bodies securing architect-engineer or land surveying service which is estimated not to exceed eighteen thousand dollars may employ the architects, engineers, or land surveyors by direct negotiation and selection, taking into account (a) the nature of the project, (b) the proximity of the architect-engineer or land surveying services to the project, (c) the capability of the architect, engineer, or land surveyor to produce the required service within a reasonable time, (d) past performance, and (e) ability to meet project budget requirements.

(2) Maximum Fees Payable to One Person or Firm. Fees paid during the twenty-four month period immediately preceding negotiation of the contract by any single governmental body for professional services performed by any one architectural-engineering or land surveying firm pursuant to Section 11-35-3230(1) shall not exceed fifty-four thousand dollars. All persons or firms seeking to render professional services pursuant to this section shall furnish the governmental body with whom the firm is negotiating a list of professional services, including fees paid therefor, performed for the governmental body during the fiscal year immediately preceding the fiscal year in which the negotiations are occurring and during the fiscal year in which the negotiations are occurring.

(3) Approval of Contracts by State Engineer's Office. All contracts negotiated pursuant to this section shall be submitted for approval to the state engineer's office in accordance with regulations to be established by the board prior to the awarding and execution of the contracts.

(4) Splitting of Larger Projects Prohibited. No using agency may break a project into small projects for the purpose of circumventing the provisions of Section 11-35-3220 and this section."

Indefinite delivery contracts

SECTION 35. Chapter 35, Title 11 of the 1976 Code is amended by adding:

"Article 10

Indefinite Delivery Contracts

Section 11-35-3310. Indefinite Delivery Contracts for Construction Items, Architectural-Engineering and Land Surveying Services.

(1) General Applicability. Indefinite delivery contracts may be awarded on an as-needed basis for construction related services pursuant to the procedures set forth in Section 11-35-3020 and for architectural-engineering and land surveying services pursuant to Section 11-35-3220. When either of these two types of contracts is awarded they shall be limited to a total expenditure of $200,000 for a two-year period with individual project expenditures not to exceed $100,000.

(2) Grant or Other Funded Research Projects. A government body may establish an indefinite delivery contract pursuant to the procedures set forth in Section 11-35-3020 for use on an as-needed basis for construction or renovation funded by grant or other nonappropriated funds given for research projects. A contract established under this section shall be limited to a total expenditure of $250,000 for a two-year period with individual project fees not to exceed $100,000.

(3) Small Indefinite Delivery Contracts. Small indefinite delivery contracts for architectural-engineering and land surveying services may be procured as provided in Section 11-35-3230. A contract established under this section shall be subject to and included in the limitations for individual and total contract amounts provided in Section 11-35-3230, and any regulations promulgated thereunder."

Legal and contractual remedies revised, procurement review panel membership, functions, and procedures revised

SECTION 36. Article 17, Chapter 35 of Title 11 of the 1976 Code is amended to read:

"Article 17

Legal and Contractual Remedies

Subarticle I

Administrative Resolution of

Controversies

Section 11-35-4210. (1) Right to Protest; Exclusive Remedy. Any prospective bidder, offeror, contractor, or subcontractor who is aggrieved in connection with the solicitation of a contract shall protest to the appropriate Chief Procurement Officer in the manner stated in subsection (2) below within fifteen days of the date of issuance of the Invitation for Bids or Requests for Proposals or other solicitation documents whichever is applicable or any amendment thereto, if the amendment is at issue.

Any actual bidder, offeror, contractor, or subcontractor who is aggrieved in connection with the intended award or award of a contract shall protest to the appropriate Chief Procurement Officer in the manner stated in subsection (2) below within fifteen days of the date notification of award is posted in accordance with this code.

The rights and remedies granted in this article to a disappointed bidder, offeror, contractor, or subcontractor are to the exclusion of all other rights and remedies of such disappointed bidder, offeror, contractor, or subcontractor against the State at common law or otherwise for the loss or potential loss of an award of a contract under the South Carolina Consolidated Procurement Code.

(2) Protest Procedure. A protest under subsection (1) above shall be in writing, submitted to the appropriate Chief Procurement Officer and shall set forth the grounds of the protest and the relief requested with enough particularity to give notice of the issues to be decided.

(3) Duty and Authority to Attempt to Settle Protests. Prior to commencement of an administrative review as provided in subsection (4), the appropriate Chief Procurement Officer, the head of a purchasing agency, or designees thereof shall attempt to settle by mutual agreement a protest of an aggrieved bidder, offeror, contractor, or subcontractor, actual or prospective, concerning the solicitation or award of the contract. The appropriate Chief Procurement Officer, the head of the purchasing agency, or designees thereof shall have the authority to approve any settlement reached by mutual agreement.

(4) Administrative Review and Decision. If in the opinion of the Appropriate Chief Procurement Officer, after reasonable attempt, a protest cannot be settled by mutual agreement, the appropriate Chief Procurement Officer shall promptly conduct an administrative review and shall issue a decision in writing within ten days of completion of the review. The decision shall state the reasons for the action taken. (5) Notice of Decision. A copy of the decision under subsection (4) of this section along with a statement of appeal rights under Section 11-35-4210(6) shall be mailed or otherwise furnished immediately to the protestant and any other party intervening. The appropriate chief procurement officer shall also post a copy of the decision at a date and place communicated to all parties participating in the administrative review, and such posted decision shall indicate the date of posting on its face and shall be accompanied by a statement of the right to appeal provided in Section 11-35-4210(6).

(6) Finality of Decision. A decision under subsection (4) of this section shall be final and conclusive, unless fraudulent, or unless any person adversely affected by the decision requests a further administrative review by the Procurement Review Panel, under Section 11-35-4410(1) within ten working days of posting of the decision in accordance with Section 11-35-4210(5). The request for review shall be directed to the appropriate Chief Procurement Officer, who shall forward the request to the Panel, or to the Procurement Review Panel and shall be in writing, setting forth the reasons why the person disagrees with the decision of the appropriate Chief Procurement Officer. The person may also request a hearing before the Procurement Review Panel.

(7) Stay of Procurement During Protests. In the event of a timely protest under subsection (1) above, the State shall not proceed further with the solicitation or award of the contract until a decision is rendered by the appropriate Chief Procurement Officer, or in the event of timely appeal to the Procurement Review Panel until a decision is rendered by the panel; provided, however, that solicitation or award of a protested contract will not be stayed if the appropriate Chief Procurement Officer, after consultation with the head of the using agency, makes a written determination that the solicitation or award of the contract without delay is necessary to protect the best interests of the State.

Section 11-35-4220. (1) Authority. After reasonable notice to the person or firm involved and a reasonable opportunity for such person or firm to be heard, the appropriate Chief Procurement Officer shall have the authority to debar a person for cause from consideration for award of contracts, provided that doing so is in the best interest of the State and there is probable cause for debarment. The appropriate Chief Procurement Officer may also suspend a person or firm from consideration for award of contracts during an investigation where there is probable cause for debarment. The period of debarment or suspension shall be as prescribed by the appropriate Chief Procurement Officer.

(2) Causes for Debarment or Suspension. The causes for debarment or suspension shall include but not be limited to, the following:

(a) conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of such contract or subcontract;

(b) conviction under state or federal statutes of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or professional honesty which currently, seriously, and directly affects responsibility as a state contractor;

(c) conviction under state or federal antitrust laws arising out of the submission of bids or proposals;

(d) violation of contract provisions, as set forth below, of a character which is regarded by the appropriate chief procurement officer 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; provided that failure to perform or unsatisfactory performance caused by acts beyond the control of the contractor shall not be considered to be a basis for debarment;

(e) violation of an order of the Procurement Review Panel; and

(f) any other cause the appropriate Chief Procurement officer 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 herein.

(3) Decision. The appropriate Chief Procurement officer shall issue a written decision to debar or suspend within ten days of the completion of his administrative review of the matter. The decision shall state the action taken, the specific reasons therefor, and the period of debarment or suspension, if any.

(4) Notice of Decision. A copy of the decision under subsection (3) of this section and a statement of appeal rights under Section 11-35-4220(5) shall be mailed or otherwise furnished immediately to the debarred or suspended person and any other party intervening. The appropriate Chief Procurement officer shall also post a copy of the decision at a time and place communicated to all parties participating in the administrative review and such posted decision shall indicate the date of posting on its face and shall be accompanied by a statement of the right to appeal provided in Section 11-35-4220(5).

(5) Finality of Decision. A decision under subsection (3) of this section shall be final and conclusive, unless fraudulent, or unless the debarred or suspended person requests further administrative review by the Procurement Review Panel under Section 11-35-4410(1), within ten working days of the posting of the decision in accordance with Section 11-35-4220(4). The requesonfor review shall be directed to the appropriate Chief Procurement Officer, who shall forward the request to the Panel, or to the Procurement Review Panel and shall be in writing, setting forth the reasons why the person disagrees with the decision of the appropriate Chief Procurement Officer. The person may also request a hearing before the Procurement Review Panel.

Section 11-35-4230. (1) Applicability. This section applies to controversies between the State and a contractor or subcontractor when the subcontractor is the real party in interest, which arise under or by virtue of a contract between them including, but not limited to, controversies based upon breach of contract, mistake, misrepresentation, or other cause for contract modification or recision. The procedure set forth in this section shall constitute the exclusive means of resolving a controversy between the State and a contractor or subcontractor concerning a contract solicited and awarded under the provisions of the South Carolina Consolidated Procurement Code.

(2) Request for Resolution; Time for Filing. Either the contracting state agency or the contractor or subcontractor when the subcontractor is the real party in interest may initiate resolution proceedings before the appropriate Chief Procurement Officer by submitting a request for resolution to the appropriate Chief Procurement Officer in writing setting forth the general nature of the controversy and the relief requested with enough particularity to give notice of the issues to be decided. A request for resolution of contract controversy must be filed within one year of the date the contractor last performs work under the contract; provided, however, that in the case of latent defects a request for resolution of a contract controversy must be filed within one year of the date the requesting party first knows or should know of the grounds giving rise to the request for resolution.

(3) Duty and Authority to Attempt to Settle Contract Controversies. Prior to commencement of an administrative review as provided in subsection (4), the appropriate Chief Procurement Officer shall attempt to settle by mutual agreement a contract controversy brought under this section. The appropriate Chief Procurement Officer shall have the authority to approve any settlement reached by mutual agreement.

(4) Administrative Review and Decision. If, in the opinion of the appropriate Chief Procurement Officer, after reasonable attempt, a contract controversy cannot be settled by mutual agreement, the appropriate Chief Procurement Officer shall promptly conduct an administrative review and shall issue a decision in writing within ten days of completion of the review. The decision shall state the reasons for the action taken.

(5) Notice of Decision. A copy of the decision under subsection (4) of this section and a statement of appeal rights under Section 11-35-4230(6) shall be mailed or otherwise furnished immediately to all parties participating in the administrative review proceedings. The appropriate Chief Procurement Officer shall also post a copy of the decision at a time and place communicated to all parties participating in the administrative review, and such posted decision shall indicate the date of posting on its face and shall be accompanied by a statement of the right to appeal provided in Section 11-35-4230(6).

(6) Finality of Decision. A decision under subsection (4) of this section shall be final and conclusive unless fraudulent or unless any person adversely affected requests a further administrative review by the Procurement Review Panel under Section 11-35-4410(1) within ten working days of the posting of the decision in accordance with Section 11-35-4230(5). The request for review shall be directed to the appropriate Chief Procurement Officer who shall forward the request to the Panel or to the Procurement Review Panel and shall be in writing setting forth the reasons why the person disagrees with the decision of the appropriate Chief Procurement Officer. The person may also request a hearing before the Procurement Review Panel.

Subarticle 2

Remedies

Section 11-35-4310. Solicitations or Awards in Violation of the Law.

(1) Applicability. The provisions of this section apply where it is determined by either the appropriate Chief Procurement Officer or the Procurement Review Panel upon administrative review that a solicitation or award of a contract is in violation of the law. The remedies set forth herein may be granted by either the appropriate Chief Procurement Officer after review under Section 11-35-4210 or by the Procurement Review Panel after review under Section 11-35-4410(1).

(2) Remedies Prior to Award. If, prior to award of a contract, it is determined that a solicitation or proposed award of a contract is in violation of law, then the solicitation or proposed award may be:

(a) canceled;

(b) revised to comply with the law and rebid; or,

(c) awarded in a manner that complies with the provisions of this code.

(3) Remedies After Award. If, after an award of a contract, it is determined that the solicitation or award is in violation of law:

(a) the contract may be ratified and affirmed, provided it is in the best interests of the State; or

(b) the contract may be terminated and the payment of such damages, if any, as may be provided in the contract, may be awarded.

(4) Entitlement to Costs. In addition to or in lieu of any other relief, when a protest submitted under Section 11-35-4210 is sustained, and it is determined that the protesting bidder or offeror should have been awarded the contract under the solicitation but is not, then the protesting bidder or offeror may request and be awarded a reasonable reimbursement amount, including reimbursement of its reasonable bid preparation costs.

Section 11-35-4320. Contract Controversies, Remedies Available. In a contract controversy brought under the provisions of Section 11-35-4230, the appropriate Chief Procurement Officer or the Procurement Review Panel, in the case of review under Section 11-35-4410(1), may award such relief as is necessary to resolve the controversy as allowed by the terms of the contract or by applicable law.

Section 11-35-4330. Frivolous Protests. (1) Signature on Protest Constitutes Certificate. The signature of an attorney or party on a request for review, protest, motion, or other document constitutes a certificate by the signer that the signer has read such document, that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass, limit competition, or to cause unnecessary delay or needless increase in the cost of the procurement or of the litigation.

(2) Sanctions for Violation. If a request for review, protest, pleading, motion, or other document is signed in violation of this subsection on or after appeal to the Procurement Review Panel, the Procurement Review Panel, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the protest, pleading, motion, or other paper, including a reasonable attorney's fee.

Subarticle 3

Review Panel

Section 11-35-4410. (1) Creation. There is hereby created the South Carolina Procurement Review Panel which shall be charged with the responsibility to review and determine de novo:

(a) requests for review of written determinations of the Chief Procurement Officers under Sections 11-35-4210(6), 11-35-4220(5), and 11-35-4230(6); and

(b) requests for review of other written determinations, decisions, policies, and procedures as arise from or concern the procurement of supplies, services, or construction procured in accordance with the provisions of this code and the ensuing regulations; provided that any matter which could have been brought before the Chief Procurement Officers in a timely and appropriate manner under Sections 11-35-4210, 11-35-4220, or 11-35-4230, but was not, shall not be the subject of review under this paragraph. Requests for review under this paragraph shall be submitted to the Procurement Review Panel in writing, setting forth the grounds, within fifteen days of the date of such written determinations, decisions, policies, and procedures.

(2) Membership. The panel shall be composed of:

(a) [Deleted]

(b) [Deleted]

(c) [Deleted]

(d) the chairman, or his designee, of the Procurement Policy Committee;

(e) five members appointed by the Governor from the State at large who shall be representative of the professions governed by this title including, but not limited to:

(i) goods and services;

(ii) information technology procurement;

(iii) construction;

(iv) architects and engineers;

(v) construction management;

(vi) land surveying services.

(f) two state employees appointed by the Governor.

(3) Chairperson and Meetings. The panel shall elect a chairman from the members at large and shall meet as often as necessary to afford a swift resolution of the controversies submitted to it. Five members present and voting shall constitute a quorum. At-large members of the panel shall be paid per diem, mileage, and subsistence as provided by law for members of boards, commissions, and committees. State employee members shall be reimbursed for meals, lodging, and travel in accordance with current state allowances.

(4) Jurisdiction. Notwithstanding the provisions of Sections 1-23-10 et seq. or any other provision of law, the Procurement Review Panel shall be vested with the authority to (a) establish its own rules and procedures for the conduct of its business and the holding of its hearings (b) issue subpoenas (c) interview any person it deems necessary and (d) record all determinations.

(5) Procedure. Within fifteen days of receiving a grievance filed under Sections 11-35-4210(6), 11-35-4220(5), 11-35-4230(6), or 11-35-4410(1)(b), the chairman shall convene the Review Panel to conduct an administrative review. The Review Panel shall record its determination within thirty days and shall communicate its decision to those involved in the determination. In the alternative the chairman within ten days may appoint a hearing officer to conduct the administrative review and report his recommendations to the Review Panel for its determination. If a hearing officer is appointed, his report shall be submitted to the Review Panel within ten days after his appointment, and the Review Panel must still record its decision within thirty days after being convened for this purpose.

(6) Finality. The decision of the Procurement Review Panel is final as to administrative review and may be appealed to the Circuit Court under the provisions of the South Carolina Administrative Procedures Act."

Summary budgets

SECTION 37. Section 59-103-35 of the 1976 Code is amended to read:

"Section 59-103-35. All public institutions of higher learning shall submit summary budgets to the commission in the manner set forth in this section. The State Board for Technical and Comprehensive Education shall submit a summary budget to the commission representing the total request of all area-wide technical and comprehensive educational institutions. The budget submitted by each institution and the State Board for Technical and Comprehensive Education must include all state funds, federal grants, tuition, and fees other than funds derived wholly from athletic or other student contests, from the activities of student organizations, from approved private practice plans, and from the operation of canteens and bookstores which may be retained by the institutions and be used as determined by the respective governing boards, subject to annual audit by the State. Fees established by the respective governing boards for programs, activities, and projects not covered by appropriations or other revenues may be retained and used by each institution as previously determined by the respective governing boards, subject to annual audit by the State.

Supplemental appropriations requests from any public institution of higher education must be submitted first to the commission. If the commission does not concur in the requests the affected institution may request a hearing on the requests before the appropriate committee of the General Assembly. The commission may appear at the hearing and present its own recommendations and findings to the same committee.

No new program may be undertaken by any public institution of higher education without the approval of the commission. The provisions of this chapter apply to all college parallel, transferable, and associate degree programs of technical and comprehensive education institutions. All other programs and offerings of technical and comprehensive education institutions are excluded from this chapter. The commission has the authority to recommend the termination of an existing program at any institution within the purview of this chapter. An appeal from this recommendation must be made by the governing board of an affected institution within sixty days to the Senate Education Committee and the House Education and Public Works Committee which shall hear the parties to the appeal. If both committees refuse to concur in the recommendation for termination, the program must not be terminated pursuant to the recommendation of the commission which is the subject of this appeal. A decision must be reached by the committees within one hundred twenty days from the date of the filing of the appeal."

Applicability of provisions

SECTION 38. The provisions of this act relating to the requirements for protesting the solicitation or award of a contract are effective for bids or proposals solicited on or after July 1, 1993.

Time effective

SECTION 39. This act takes effect July 1, 1993.

Approved the 16th day of June, 1993.




Legislative Services Agency
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