Analysis

Synopsis:

 February 10, 2021:

STBTCcs/SB 53: The Senate Tax, Business and Transportation Committee, committee substitute for Senate Bill 53 replaces the original act with its own substitute and changes and enacts sections of the NMSA 1978 relating to procurement. This committee substitute repeals: Laws 2012, Chapter 56, Section 4; and Laws 2015, Chapter 73, Section 25. The provisions of this act are effective on July 1, 2021.


January 18, 2021:

Senate Bill 53 (SB 53)  creates preferences and certification requirements for resident minority businesses and resident tribal businesses. SB 53 retains the resident veteran business preference. SB 53 authorizes procurements for exclusive bidding by New Mexico businesses or small businesses. SB 53 adds and revises definitions in the procurement code. SB 53 specifies when the negotiation process ends. SB 53 clarifies electronic submission requirements. SB53 allows virtual bid openings. SB 53 revises chief procurement officer registration requirements. SB 53 clarifies reporting requirements for in-state and out-of-state contracts. SB 53 applies the procurement code to marketing. SB 53 allows the rejection of identical low bids based on the appearance of non-independent bidding. SB 53 specifies posting requirements for emergency procurement. SB5 3 prescribes requirements for purchases of sustainable and recycled content goods. SB 53 authorizes audits related to sales under a contract. SB 53 defines offerors for purposes of protesting an award. SB 53 requires reporting on contracts awarded to New Mexico businesses. SB 53 allows the purchase of electric and gas-electric hybrid vehicles made outside North America. SB 53 changes, repeals and enacts sections of the NMSA 1978. SB 53 is effective on July 1, 2021.

Analysis:

 Senate Bill 53 (SB53) repeals Laws 2012, Chapter 56, Section 4 and Laws 2015, Chapter 73, Section 25. 

New Law:

SB53 enacts a new section of the Procurement Code, titled: New Mexico Businesses-Exclusive Procurements Authorized.
•	Allows a state purchasing agent or a central purchasing office to design procurements to exclusively receive proposals, bids or responses from New Mexico businesses.

New Law:

SB53 enacts a new section of the Procurement Code, titled: Definition-Advertising.

SB53 creates the following new definition:
•	Advertising means the promotion of a product or service through paid media and does not include marketing.

New Law:

SB53 enacts a new section of the Procurement Code, titled: Definition-Evaluation Factors.

SB53 creates the following new definition:
•	Evaluation Factors means the factors stated in the request for proposals that are used by evaluators to determine which competing proposal is most advantageous to the procuring state agency or local public body.

New Law:

SB53 enacts a new section of the Procurement Code, titled: Definition-Marketing.

B53  creates the following new definition:
•	Marketing means the process of identifying agency needs and determining how best to meet those needs, including any element of the process such as creation, research, design, planning or data mining.

New Law:

SB53 enacts a new section of the Procurement Code, titled: Definition-Negotiation Process.

SB53 creates the following new definition:
•	Negotiation Process means the actions taken to obtain a best and final offer between the parties to an awarded contract before the contract is fully executed.

Changed Law:

Application of Preferences, Section 13-1-21 NMSA 1978.

SB53 creates the following new definitions:

•	Bid means a submission by a prospective supplier in response to a solicitation involving a formal bid process, where all bids are submitted wholly independent of each other in a competitive manner.

•	Resident Tribal Business means a business that has a valid resident tribal business certificate issued by the Taxation and Revenue Department pursuant to Section 13-1-22 NMSA 1978.

•	Resident Minority Business means a business that has a valid resident minority business certificate issued by the Taxation and Revenue Department pursuant to Section 13-1-22 NMSA 1978.

SB53 changes the following definition under this section:
•	Recycled Content Goods means supplies and materials composed twenty-five percent or more of recycled materials or sustainable materials, as determined by the General Services Department; provided the recycled materials content meets or exceeds the minimum content standards required by bid specifications.

SB53 makes the following changes to this section:

When a public body makes a purchase using a formal bid process, the public body will deem a bid submitted by: 
•	(1) a resident business, resident minority business or resident tribal business to be favored with a five percent advantage over the bid actually submitted; or (2) a resident veteran business with annual gross revenues of up to three million dollars ($3,000,000) in the preceding tax year to be favored with a ten percent advantage over the bid actually submitted.

When a public body makes a purchase using a formal bid process and the bids are received for both recycled content goods and nonrecycled content goods, the public body will deem: 
•	(1) bids submitted for recycled content goods from any business, except a resident veteran business, to be favored with a five percent advantage over the bids actually submitted; or
•	(2) bids submitted for recycled content goods from a resident veteran business with annual gross revenues of up to three million dollars ($3,000,000) in the preceding tax year to be favored with a ten percent advantage over the bids actually submitted.

When a public body makes a purchase using a formal request for proposals process, not including contracts awarded on a point-based system, the public body will award an additional: 
•	(1) five percent of the total weight of all the factors used in evaluating the proposals to a resident business, resident minority business or resident tribal business.

When a public body makes a purchase using a formal request for proposals process, and the contract is awarded based on a point-based system, the public body will award additional points equivalent to: 
•	(1) five percent of the total possible points to a resident business, resident minority business or resident tribal business.

When a joint bid or joint proposal is submitted by a combination of resident veteran, resident or nonresident, resident minority or resident tribal businesses the preference provided pursuant to Subsection B, C, D or E of this section will be:
•	calculated in proportion to the percentage of the contract, based on the dollar amount of the goods or services provided under the contract, that will be performed by each business as specified in the joint bid or proposal.

A resident veteran business, resident minority business or resident tribal business will not benefit from the preference pursuant to this section for more than ten consecutive years. 
•	A person that is an owner of a business that is a resident veteran business, resident minority business or resident tribal business will not benefit from the preference pursuant to this section for more than ten consecutive years. 
•	A person will not benefit from the provisions of this section based on more than one business concurrently.

A public body will not award a business more than one preference pursuant to this section.

Changed Law:

Resident Business, Resident Veteran Business Resident Contractor and Resident Veteran Contractor Certification, Section 13-1-22 NMSA 1978.

SB53 changes this section's titled to now read as:
•	Certifications-Resident Business, Resident Veteran Business, Resident Minority Business, Resident Tribal Business, Resident Contractor and Resident Veteran Contractor.

SB53 now stipulates that to receive a resident business, resident veteran business, resident minority business or resident tribal business preference pursuant to Section 13-1-21 NMSA 1978, or a resident contractor or resident veteran contractor preference pursuant to Section 13-4-2 NMSA 1978, a business or contractor will 
•	submit with its bid or proposal a copy of the certificate issued by the Taxation and Revenue Department to the business or contractor pursuant to this section.

SB53 requires an application for a resident minority business certificate to include: 
•	(1) the affidavit required by this section; and 
•	(2) verification, as prescribed by the Taxation and Revenue Department, that more than fifty percent of the business is owned by women or persons who identify as African American, Latino or Hispanic, Asian, Pacific Islander, Native American or Alaska native. 

SB53 requires an application for a resident tribal business certificate to include: 
•	(1) an affidavit stating that the business' principal place of business is on tribal land within the boundaries of New Mexico; and 
•	(2) verification, as prescribed by the Taxation and Revenue Department, that: (a) the business is wholly owned by a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico, including a political subdivision, agency or department of the Indian nation, tribe or pueblo; (b) the business is an incorporated or unincorporated enterprise of a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico; (c) more than fifty percent of the business is owned by persons who are enrolled members of a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico; or (d) the business is a corporation considered to be an Indian nation, tribe or pueblo, located wholly or partially in New Mexico, by the federal government or the state.

SB53 states that if no notification is provided by the department, the certificate is deemed approved. 
•	A certificate is valid for three years from the date of its issuance; provided, if there is a change of ownership of more than fifty percent, a business will reapply for a certificate.

If the administrative hearings office finds, following a hearing and an opportunity to be heard, that a business or contractor provided false information to the Taxation and Revenue Department in order to obtain a certificate pursuant to this section or that a business or contractor used a certificate to obtain a preference for a bid or proposal and the business or contractor did not perform the percentage of the contract specified in the bid or proposal, the business or contractor:
•	(1) is not eligible to receive a certificate or a preference pursuant to Section 13-1-21 or 13-4-2 NMSA 1978, for a period of five years from the date on which the Taxation and Revenue Department became aware of the submission of the false information or the failure to perform the contract as specified in the bid or proposal; and 
•	(2) is subject to an administrative penalty of up to fifty thousand dollars ($50,000) for each violation.

Changed Law: 

Electronic Transmissions, Section 13-1-95.1 NMSA 1978.

•	If electronic submission is required the invitation for bids or request for proposals will specify an opening date and time, a fixed closing date and time and a secure electronic location to which the electronic bid or proposal will be submitted; provided the process of uploading and submitting the electronic bid or proposal will be completed in full no later than the fixed closing date and time.
•	Sealed bids submitted electronically will be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids, including virtual openings conducted by video conferencing. 

Changed Law:

Chief Procurement Officers-Reporting Requirement-Training-Certification, Section 13-1-95.2 NMSA 1978.

When a chief procurement officer is hired, each state agency and local public body will provide to the state purchasing agent the name of the state agency's or local public body's chief procurement officer and information identifying the state agency's or local public body's central purchasing office, if applicable, and will register the chief procurement officer on the purchasing division website along with updated information, as needed. 
•	Corrective action to update information, registration and replacement of chief procurement officers is the responsibility of each state agency and local public body. 

Changed Law: 

Competitive Sealed Bids-Identical Bids, Section 13-1-110 NMSA 1978.

When competitive sealed bids are used and two or more of the bids submitted are identical in price and are the low bid, the state purchasing agent or a central purchasing office may:
•	reject the identical low bids if the bids are submitted by separately registered bidders that have the same physical address, shared operations or shared ownership.

Changed Law:

Recycled Content Goods-Cooperative Procurement, Section 13-1-135.1 NMSA 1978.
•	A central purchasing office will purchase sustainable and recycled content goods through contracts established by the purchasing division of the General Services Department or with other central purchasing offices whenever its quality, quantity, availability and delivery requirements are met and the cost of the sustainable and recycled content goods is no more than ten percent higher than the cost of comparable conventional goods.
•	A central purchasing office may negotiate contracts and design procurements to exclusively purchase sustainable goods and recycled content goods.

Roadrunner Capitol Reports - Legislative Tracking and Reporting Service.
www.roadrunnercapitol.com