VAGP Legislation Reviews Report

January 26, 2010

Bill Number	Bill Title	Bill Description	VAGP Position
SB 703	Public Procurement Act; preference for construction contractors hiring local residents.	Authorizes a locality to develop and implement a bidding system providing a preference to construction contractors that hire residents of the locality or the Commonwealth.	OPPOSE. VAGP supports open and unrestricted competition for public contracts. Preferences lead to limited competition and increased pricing.
SB 695	Virginia Public Procurement Act; cooperative procurement.	Provides that in cases where the cooperative procurement agreement involves construction, the public body awarding the contract must comply with the provisions of the Public-Private Education Facilities and Infrastructure Act of 2002 requiring posting, public notice and access to certain procurement records.	OPPOSE. This bill modifies a non-mandatory section of the VPPA. It is extremely problematic. 1) The limit on the ability to use cooperative purchasing as a tool to reduce administrative costs, accelerate project timelines and saving money through larger purchasing volume. 2) Not all localities have adopted PPEA, confuses compliance. 3) It is non-specific re. the requirements that require compliance. 3) It creates a circular reference to VPPA.
SB 691	Department of Minority Business Enterprise; small, women-owned, and minority-owned businesses; enhancement or remedial measures	Requires state contracts awarded pursuant to enhancement or remedial measures. Requires state contracts awarded pursuant to enhancement or remedial measures implemented to enhance participation by small, women-owned, and minority-owned businesses to include a requirement that no more than 60 percent of the work be subcontracted to another contractor except under certain circumstances. The bill authorizes the Department of Minority Business Enterprise to investigate complaints that the business has violated the contract provision and authorizes the Director to revoke the business's certification as a small, women-owned, or minority-owned business for a period of one year upon determination that the contract provision has been violated. The bill also provides that any enhancement or remedial measure require the state agency to solicit bids from all qualified vendors and not be limited to bids submitted by small, women-owned, and minority-owned businesses. Under the bill, any enhancement or remedial measure cannot exceed three percent of the total value of all vendor contracts calculated against the costs of accepting the lowest competent and qualifying bids.	OPPOSE. This bill establishes reciprocity provisions against states that deny SWAM status to Virginia certified SWAM vendors. This is a non-mandatory section of the VPPA. Unclear how contract violations can ‘de-certify’ SWAM status.
SB 52	Public Procurement Act; exempts sale of dogs trained for police work.	Virginia Public Procurement Act; exemptions; dogs trained for policy work. Exempts from the Virginia Public Procurement Act the sale of any dog especially trained for police work to the handler who was last in control of such dog. The bill also provides that the sale is not to be deemed a violation of the State and Local Government Conflict of Interests Act.	SUPPORT w/AMENDMENT. Recommend adding ‘or donation.’
SB 378	Virginia Public Procurement Act; establishment of Historically Underutilized Business Zones.	Virginia Public Procurement Act; establishment of Historically Underutilized Business Zones (HUB Zones) in the state. Requires the Department of General Services, in conjunction with the Department of Minority Business Enterprise, to develop a program that insures that at least 15 percent of state procurement contracts are awarded to small, women-owned, and minority-owned businesses located in historically underutilized business zones (HUB Zones). The bill defines HUB Zone.	OPPOSE. The establishment of preferences and mandatory set-asides for state contracts is a concern. This bill would invite higher costs for goods and services due to reduced competition. It is not a mandatory section of the VPPA; however, it may open the door to expanded application of the preferences.
SB 364	Public schools; financing.	Creates the Virginia School Construction Revolving Fund for financing elementary, secondary, or vocational education school projects.	NONE. 15.2-2717 refers to local government contracts. A reference to VPPA is recommended.
SB 34	Worker Misclassification Act; created.	Worker Misclassification Act; penalties. Prohibits an employer from classifying an individual as an independent contractor if he is an employee. An individual shall be considered an employee of the party which pays that remuneration, for purposes of Titles 40.1 (Labor and Employment), 60.2 (Unemployment Compensation), and 65.2 (Workers' Compensation) unless and until it is shown to the satisfaction of the Department of Labor and Industry that (i) the individual has been and will continue to be free from direction and control of the employer, both under his contract of service and in fact, (ii) the service is outside the usual course of the business of the employer, and (iii) the individual is customarily engaged in an independently established trade, occupation, profession, or business, both under his contract of service and in fact. Discrimination or taking adverse action against any person in retaliation for exercising rights protected under this measure is also prohibited. Violators are subject to criminal penalties, civil penalties, debarment from public contracts, private actions, and stop-work orders.	OPPOSE. Prohibits establishing a contract with a firm in violation of this act. Includes all state agencies and local governments. Implementation of this bill would be extremely problematic.
SB 225	Public Procurement Act; verification of legal presence.	Requires all public contractors and their subcontractors to register and participate in a federal Electronic Work Verification Program or similar electronic verification of work authorization program to determine that their employees and individual independent contractors are legally eligible for employment in the United States. Contractors and subcontractors are required to verify the employment status of their employees and independent contractors, and are prohibited from employing or contracting with an individual who is not determined to be legally eligible for employment in the United States as determined through the verification of the individual's status. Contractors who do not register and participate in the registration program are ineligible for prequalification.	OPPOSE. The Virginia Public Procurement Act is an inadequate tool for the enforcement of federal immigration laws. This act places public contracting officers in the role of immigration officials.
SB 181	Public-Private Acts of 1995 and 2002; agreements under.	Agreements under the Public-Private Transportation Act of 1995 and the Public-Private Education Facilities and Infrastructure Act of 2002. Authorizes state agencies and state authorities, upon the approval of the Governor, to enter into agreements with private entities under the Public-Private Transportation Act of 1995 and the Public-Private Education Facilities and Infrastructure Act of 2002 for the development of a project by the private entity, which agreements provide for the private entity to be paid grants from a portion of the growth in state taxes and fees attributable to the development of the project. The bill also would allow local governments, agencies, and authorities, upon the approval of the governing body of the locality, to join in the agreement entered into between the private entity and the state agency or state authority.	NONE. Applies to state agency or state authority only.
HJ 60	Study; JLARC; local school divisions to contract collectively in certain areas of procurement; repor	t. Directs the Joint Legislative Audit and Review Commission to study the feasibility and effectiveness of requiring local school divisions to contract collectively in certain areas of procurement.	SUPPORT. The intent of this study seems to support VAGP’s position on cooperative purchasing. Conflicts with stated intent of HB 426.
HB 990	Department of General Services; powers and duties; web-based procurement program.	Requires the Department of General Services to establish a fee schedule limited to 0.5 percent of the total purchase order for all procurement contracts made with its web-based electronic procurement program commonly known as "eVA." The bill also eliminates any vendor registration fee to participate in the program.	OPPOSE w/AMENDMENT. This bill eliminates the cap of $1500 per order. Recommend further study of impact on eVA vendors. Registration and renewal fees ($25) were eliminated on July 1, 2009.
HB 858	Procurement of services by certain state agencies.	Requires the Director of the Division of Purchases and Supply of the Department of General Services to require each state agency, except law-enforcement agencies, to procure nonprofessional services from the private sector if such services are listed in the Commonwealth Competition Council's list. The bill also provides that, upon a written determination made in advance by a state agency, the procurement of services from a commercial source is neither practicable nor fiscally advantageous; such service may continue to be performed by the state agency. The bill contains technical amendments.	NONE. Applicable to state agencies only.
HB 831	Virginia Public Procurement Act; foreign business entities.	Prohibits a foreign corporation, limited liability company, business trust, limited partnership, or registered limited liability partnership from bidding on, or entering into, amending, or renewing, a contract with a public body under the Virginia Public Procurement Act unless the foreign entity provides a copy of a valid certificate or authority or registration to conduct business in the Commonwealth. Such status shall be maintained during the term of a contract and for five years after its term is completed. A contract entered into by a business in violation of the requirements is voidable at the option of the public body.	OPPOSE. The proposed legislation would preclude a public body from accepting a bid or awarding any contract to the foreign entities described in the legislation unless it provides a copy of its certificate. Accordingly, it imposes an obligation upon the public body to ascertain whether this requirement has been met and increases the responsibilities of the public body in the evaluation of bids and contract award. As written, the provision appears to apply to all contracts, including small procurements, without regard to the dollar amount. This requirement could have significant administrative impact. It may have the effect of promoting local (or resident) bidders which limits competition and adversely affects prices.
HB 789	Virginia Public Procurement Act; methods of procurement.	Increases from $1 million to $10 million the cost of a construction contract for which a state or local public body may use competitive negotiation instead of competitive bidding to procure the construction.	RECOMMEND STUDY. Threshold changed to $1.5 million in subcommittee. Defer until appropriate threshold level is determined.
HB 768	Political contributions; prohibition during procurement process.	Provides that no bidder or offeror, or person acting on his behalf, who has submitted a bid or proposal for the award of a public contract with an expected value of $1 million or more pursuant to the Virginia Public Procurement Act shall make, directly or indirectly, a contribution to any campaign committee, political action committee, or political party committee during the period between the submission of the bid or proposal and the award of the contract. A person who violates this prohibition shall be subject to a civil penalty of up to two times the amount of the contribution.	NONE. Enforcement must be performed by state elections officials.
HB 737	E-Verify Program; requires state agencies, public contractors, localities, & employers to enroll.	E-Verify Program. Requires agencies of the Commonwealth, public contractors, localities, and employers with 15 or more employees within the Commonwealth to enroll in the E-Verify Program by December 1, 2010, and to use the Program for each newly hired employee who is to perform work within the Commonwealth. Employers and contractors that fail to do so are subject to suspension or revocation of certain licenses. Licenses will be reinstated when a business establishment enrolls in the Program or, if already enrolled but not using the Program, prepares and implements a compliance plan.	OPPOSE. This bill places the public contracting staff in the position of enforcing immigration laws. It is impractical and costly to expect localities to verify contractor compliance with immigration laws.
HB 709	Electronic textbooks; allows for purchase of printed textbooks, etc., for public schools.	Public schools; purchase of electronic textbooks. Requires contracts and purchase orders with publishers of textbooks approved by the Board of Education for use in grades 6-12 to allow for the purchase of printed textbooks, printed textbooks with electronic files, or electronic textbooks separate and apart from printed versions of the same textbook. In addition, allows each school board to purchase an assortment of textbooks in any of the three forms listed above.	NONE. Purchase of textbooks is exempt from VPPA. Bill expands definition of textbooks to include electronic media.
HB 615	Virginia Public Procurement Act; small, women, minority, and service disabled veteran-owned.	Virginia Public Procurement Act; small, women-owned, minority-owned, and service disabled veteran-owned business. Provides that for the solicitation or awarding of contracts with small, women-owned, minority-owned, or service disabled veteran-owned businesses, all public bodies shall include in every such contract the following provision: "During the performance of this contract, the contractor agrees that no more than 20 percent of the contracted work will be subcontracted to any business that does not meet the definition of small, women-owned, minority-owned, or service disabled veteran-owned business, except where there is a bona fide occupational qualification reasonably necessary to the normal operation of the contractor.%94 The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth these requirements. The bill provides that notices, advertisements, and solicitations placed in accordance with federal law, rule, or regulation shall be deemed sufficient posting. The bill contains technical amendments.	OPPOSE. Broadens disadvantaged business definition to include disabled veteran-owned businesses. Establishes contract set-asides - this practice is recognized to be anticompetitive and causes government to pay higher prices. This is a non-mandatory clause of VPPA.
HB 567	Virginia Public Procurement Act; state-aid construction projects.	Raises the competitive bidding/competitive negotiation dollar threshold from $30,000 to $50,000 for state-aid construction projects.	SUPPORT. VAGP BILL. This bill will establish consistent competitive thresholds for all formal procurement actions.
HB 542	Department of Minority Business Enterprise; certification of small, women or minority-owned bus.	Department of Minority Business Enterprise; certification of small, women-owned, or minority-owned businesses; inclusion of retired military personnel-owned businesses. Includes retired military personnel-owned business in the procurement opportunities and certification process currently in place for small, women-owned, and minority-owned businesses.	SUPPORT. This bill adds retired military personnel-owned business to classes of businesses protected from discrimination. Adds another category for record-keeping / business classification purposes.
HB 519	Virginia Public Procurement Act; Department of Minority Business Enterprise.	Virginia Public Procurement Act; Department of Minority Business Enterprise; implementation of remedial or enhancement measures for small, women-owned, and minority-owned businesses. Includes women-owned and minority-owned businesses in considerations for procurement enhancements or remedies established consistent with prevailing law. The bill also authorizes the Department of Minority Business Enterprises to enforce the implementation of the appropriate enhancements or remedial measures.	SUPPORT. Text changes only in procurement code 2.2-4310. Remaining changes affect state government only.
HB 480	Public-Private Transportation Act.	Requires the Commonwealth Transportation Board to conduct third party audits of agreements executed under the Under the bill, the audits will consists of a review of the bidding process and certain other summary information regarding each project. The bill requires responsible public entities proceeding under the Act to advertise in the area where the project will be located to encourage participation by local small contractors. In addition, the bill (i) provides that contracts must be rebid if a change order exceeds 25 percent or one million dollars over the original contract amount, (ii) limits agreements under the act from extending more than two years past the original completing date without being rebid, and (iii) requires all agreements to include standard small, women-owned and minority-owned participation components of 30 percent as of July 1, 2010.	OPPOSE. The change order threshold and process is restrictive. The SWAM set-asides limit competition and result in higher pricing.
HB 460	Department of Minority Business Enterprise.	Changes the name of the Department of Minority Business Enterprise to the Department of Supplier Diversity and Procurement Advocacy and moves the Department to the responsibilities of the Secretary of Administration from the Secretary of Commerce and Trade. The bill contains numerous technical amendments.	SUPPORT. Administrative change.
HB 444	Conflict of Interests Act, state and local government; prohibited contracts, exceptions.	State and Local Government Conflict of Interests Act; prohibited contracts; exceptions. Provides an exception to the conflict of interests rules, under certain circumstances, where an officer or employee whose personal interest in a contract with a public institution of higher education is by reason of an ownership in the contracting firm in excess of three percent of the contracting firm's equity or such an ownership interest and income from the contracting firm is in excess of $10,000. Currently the exception is limited to an employee or officer's personal interest in such contract by reason of an ownership in the contracting firm in excess of three percent of the contracting firm's equity.	NONE. Expands criteria for conflict of interest. Applies to higher education only.
HB 426	Public Procurement Act; cooperative procurement.	Virginia Prohibits a local public body from using another local public body's contract for construction where the cost of the project is in excess of $200,000 and the other local public body is more than 75 miles in distance from the local public body procuring the construction. The bill provides an exception to the above limitation for contracts for the installation of artificial turf. The bill contains technical amendments.	OPPOSE w/AMENDMENT. This bill modifies a non-mandatory section of the VPPA. However, cooperative purchasing is an important tool for governments seeking to reduce administrative costs and accelerate procurement timelines. This is an unreasonable restriction on cooperative purchasing. See proposed amendments to bill.
HB 398	Virginia-grown food products by state agencies; DGS to establish procurement procedures to purchase.	Purchase of Virginia-grown food products by state agencies and institutions and local school divisions. Provides for the Department of General Services to establish procurement procedures to facilitate the purchase of Virginia-grown food products by state agencies and institutions and local public school divisions to the maximum extent possible. The bill also provides local school divisions with an exemption from competitive sealed bidding under certain circumstances when procuring Virginia-grown food products for student consumption.	OPPOSE. Preferences are anti-competitive and lead to higher prices.
HB 139	Correctional facilities, state; allows exception for purchase of products by state agencies.	Exceptions as to purchases from state correctional facilities. Allows exception for purchase of products by state agencies where the cost of purchase and installation is more than 10 percent over the cost of the product and the product is commonly commercially available, or the requisition made cannot be complied with on account of an insufficient supply of the articles or supplies.	NONE. Expands exemption for purchases from state correctional facilities. State agencies only.
HB 1258	Indemnification provisions in construction contracts.	Declares that a provision in a construction contract that requires the contractor to provide insurance coverage, or to name a party to the contract as an additional insured on a policy of insurance, for the purpose of providing an indemnity that is prohibited under current law, is void and unenforceable. The measure also provides that a provision in a construction contract by which the contractor purports to indemnify or hold harmless another party against liability for damage caused by independent contractors of the other party is void and unenforceable.	Needs further review.
HB 1228	Virginia Public Procurement Act; establishment of Historically Underutilized Business Zones.	Virginia Public Procurement Act; establishment of Historically Underutilized Business Zones (HUB Zones) in the state. Requires the Department of General Services, in conjunction with the Department of Minority Business Enterprise, to develop a program that insures that at least 15 percent of state procurement contracts are awarded to small businesses located in historically underutilized business zones (HUB Zones). The bill defines HUB Zone.	OPPOSE. Do not support HUB zone and SWAM set-asides proposed in 2.2-4310.1. This is a non-mandatory section of the VPPA.
HB 1019	Virginia Public Procurement Act; alternative dispute resolution.	Provides that contractual claims submitted under § 2.2-4363 related to a construction contract entered into by or on behalf of the Virginia Community College System for which the System has not made a final decision in the time period specified in § 2.2-4363, the provisions of the contract to the contrary notwithstanding, shall be submitted for arbitration, mediation, or other alternative dispute resolution procedures. The bill also provides that it does not limit the contractor's right to institute immediate legal action. The bill also provides that it is limited to contractual claims submitted to the Virginia Community College System prior to February 1, 2010.	NONE. This is a non-mandatory clause of VPPA. Seeks to establish remedy that overrides processes identified in the contract.
HB 1279	Virginia Public Procurement Act; small, women-owned, or minority-owned businesses	Requires the Department of General Services, in conjunction with the Department of Minority Business Enterprise, to develop a program that insures that at least 15 percent of state procurement contracts are awarded to small, women-owned, and minority-owned businesses located in historically underutilized business zones (HUB Zone) that meet certain requirements. The bill defines HUB Zone.	OPPOSE. This bill establishes set-asides of 15% for SWAM businesses located in HUB zones. This action would invite higher costs for goods and services due to reduced competition.