Bill Text: VA HB473 | 2018 | Regular Session | Prefiled
Bill Title: Virginia Public Procurement Act; use of best value contracting.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2018-02-13 - Left in General Laws [HB473 Detail]
Download: Virginia-2018-HB473-Prefiled.html
Be it enacted by the General Assembly of Virginia:
1. That §§2.2-4300, 2.2-4301, and 4302.2 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding in Chapter 43 of Title 2.2 an article numbered 7, consisting of sections numbered 2.2-4377.1, 2.2-4377.2, and 2.2-4377.3, as follows:
§2.2-4300. Short title; purpose; declaration of intent.
A. This chapter may be cited as the Virginia Public Procurement Act.
B. The purpose of this chapter is to enunciate the public policies pertaining to governmental procurement from nongovernmental sources, to include governmental procurement that may or may not result in monetary consideration for either party. This chapter shall apply whether the consideration is monetary or nonmonetary and regardless of whether the public body, the contractor, or some third party is providing the consideration.
C. To the end that public bodies in the Commonwealth obtain
high quality goods and services at reasonable cost, that all procurement
procedures be conducted in a fair and impartial manner with avoidance of any
impropriety or appearance of impropriety, that all qualified vendors have
access to public business and that no offeror be arbitrarily or capriciously
excluded, it is the intent of the General Assembly that competition be sought
to the maximum feasible degree, that procurement procedures involve openness
and administrative efficiency, that individual public bodies enjoy broad flexibility
in fashioning details of such competition, that the rules governing contract
awards be made clear in advance of the competition, that specifications reflect
the procurement needs of the purchasing body rather than being drawn to favor a
particular vendor, and that the purchaser and vendor freely exchange
information concerning what is sought to be procured and what is offered. Public
bodies may consider best value concepts when procuring goods and
nonprofessional services, but not construction or professional services. The
criteria, factors, and basis for consideration of best value and the process
for the consideration of best value shall be as stated in the procurement
solicitation.
§2.2-4301. Definitions.
As used in this chapter:
"Affiliate" means an individual or business that controls, is controlled by, or is under common control with another individual or business. A person controls an entity if the person owns, directly or indirectly, more than 10 percent of the voting securities of the entity. For the purposes of this definition "voting security" means a security that (i) confers upon the holder the right to vote for the election of members of the board of directors or similar governing body of the business or (ii) is convertible into, or entitles the holder to receive, upon its exercise, a security that confers such a right to vote. A general partnership interest shall be deemed to be a voting security.
"Best value," as predetermined in the solicitation, means the overall combination of quality, price, and various elements of required services that in total are optimal relative to a public body's needs. Objective criteria that may be considered in determining the best value include the best value contractor's (i) financial condition; (ii) quality of performance on previous projects; (iii) timeliness of performance on previous projects; (iv) record of ability to minimize cost overruns; (v) use of local hiring pools; (vi) proven ability to minimize or eliminate change orders; (vii) provision of training or apprenticeship programs; (viii) technical capacities; (ix) provision of health care benefits for workers; (x) use of background checks and voluntary drug testing for employees and workers; (xi) participation in the E-Verify program; (xii) key personnel qualifications; (xiii) safety record, including the ability to minimize workplace safety risks; (xiv) use of small, woman-owned, minority-owned, and veteran-owned contractors and subcontractors; and (xv) environmental sustainability and track record.
"Business" means any type of corporation, partnership, limited liability company, association, or sole proprietorship operated for profit.
"Competitive negotiation" is the method of contractor selection set forth in §2.2-4302.2.
"Competitive sealed bidding" is the method of contractor selection set forth in §2.2-4302.1.
"Construction" means building, altering, repairing, improving or demolishing any structure, building or highway, and any draining, dredging, excavation, grading or similar work upon real property.
"Construction management contract" means the same as that term is defined in §2.2-4379.
"Design-build contract" means the same as that term is defined in §2.2-4379.
"Employment services organization" means an organization that provides employment services to individuals with disabilities that is an approved Commission on the Accreditation of Rehabilitation Facilities (CARF) accredited vendor of the Department for Aging and Rehabilitative Services.
"Experience modification factor" means a value assigned to an employer as determined by a rate service organization in accordance with its uniform experience rating plan required to be filed pursuant to subsection D of §38.2-1913.
"Financial condition" means the financial resources needed to perform the contract. The criteria used to evaluate a bidder's financial condition shall include, at a minimum, capacity to obtain all required payment bonds, performance bonds, and liability insurance.
"Goods" means all material, equipment, supplies, printing, and automated data processing hardware and software.
"Informality" means a minor defect or variation of a bid or proposal from the exact requirements of the Invitation to Bid, or the Request for Proposal, which does not affect the price, quality, quantity or delivery schedule for the goods, services or construction being procured.
"Job order contracting" means a method of procuring construction by establishing a book of unit prices and then obtaining a contractor to perform work as needed using the prices, quantities, and specifications in the book as the basis of its pricing. The contractor may be selected through either competitive sealed bidding or competitive negotiation depending on the needs of the public body procuring the construction services. A minimum amount of work may be specified in the contract. The contract term and the project amount shall not exceed the limitations specified in § 2.2-4303.2.
"Multiphase professional services contract" means a contract for the providing of professional services where the total scope of work of the second or subsequent phase of the contract cannot be specified without the results of the first or prior phase of the contract.
"Nonprofessional services" means any services not specifically identified as professional services in the definition of professional services.
"Potential bidder or offeror," for the purposes of §§2.2-4360 and 2.2-4364, means a person who, at the time a public body negotiates and awards or proposes to award a contract, is engaged in the sale or lease of goods, or the sale of services, insurance or construction, of the type to be procured under the contract, and who at such time is eligible and qualified in all respects to perform that contract, and who would have been eligible and qualified to submit a bid or proposal had the contract been procured through competitive sealed bidding or competitive negotiation.
"Professional services" means work performed by an independent contractor within the scope of the practice of accounting, actuarial services, architecture, land surveying, landscape architecture, law, dentistry, medicine, optometry, pharmacy or professional engineering. "Professional services" shall also include the services of an economist procured by the State Corporation Commission.
"Public body" means any legislative, executive or judicial body, agency, office, department, authority, post, commission, committee, institution, board or political subdivision created by law to exercise some sovereign power or to perform some governmental duty, and empowered by law to undertake the activities described in this chapter. "Public body" shall include (i) any independent agency of the Commonwealth, and (ii) any metropolitan planning organization or planning district commission which operates exclusively within the Commonwealth of Virginia.
"Public contract" means an agreement between a public body and a nongovernmental source that is enforceable in a court of law.
"Responsible bidder" or "offeror" means a person who has the capability, in all respects, to perform fully the contract requirements and the moral and business integrity and reliability that will assure good faith performance, and who has been prequalified, if required.
"Responsive bidder" means a person who has submitted a bid that conforms in all material respects to the Invitation to Bid.
"Reverse auctioning" means a procurement method wherein bidders are invited to bid on specified goods or nonprofessional services through real-time electronic bidding, with the award being made to the lowest responsive and responsible bidder. During the bidding process, bidders' prices are revealed and bidders shall have the opportunity to modify their bid prices for the duration of the time period established for bid opening.
"Safety record" means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidder's safety record shall include, at a minimum, its experience modification factor for the most recent three-year period and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period.
"Services" means any work performed by an independent contractor wherein the service rendered does not consist primarily of acquisition of equipment or materials, or the rental of equipment, materials and supplies.
§2.2-4302.2. Process for competitive negotiation.
A. The process for competitive negotiation shall include the following:
1. Issuance of a written Request for Proposal indicating in general terms that which is sought to be procured, specifying the factors that will be used in evaluating the proposal, indicating whether a numerical scoring system will be used in evaluation of the proposal, and containing or incorporating by reference the other applicable contractual terms and conditions, including any unique capabilities, specifications or qualifications that will be required. In the event that a numerical scoring system will be used in the evaluation of proposals, the point values assigned to each of the evaluation criteria shall be included in the Request for Proposal or posted at the location designated for public posting of procurement notices prior to the due date and time for receiving proposals. No Request for Proposal for construction authorized by this chapter shall condition a successful offeror's eligibility on having a specified experience modification factor;
2. Public notice of the Request for Proposal at least 10 days prior to the date set for receipt of proposals by posting on the Department of General Services' central electronic procurement website or other appropriate websites. Additionally, public bodies shall publish in a newspaper of general circulation in the area in which the contract is to be performed so as to provide reasonable notice to the maximum number of offerors that can be reasonably anticipated to submit proposals in response to the particular request. Posting on the Department of General Services' central electronic procurement website shall be required of any state public body. Local public bodies are encouraged to utilize the Department of General Services' central electronic procurement website to provide the public with centralized visibility and access to the Commonwealth's procurement opportunities. In addition, proposals may be solicited directly from potential contractors. Any additional solicitations shall include certified businesses selected from a list made available by the Department of Small Business and Supplier Diversity; and
3. For goods, nonprofessional services, and insurance, selection shall be made of two or more offerors deemed to be fully qualified and best suited among those submitting proposals, on the basis of the factors involved in the Request for Proposal, including price if so stated in the Request for Proposal. In the case of a proposal for information technology, as defined in § 2.2-2006, a public body shall not require an offeror to state in a proposal any exception to any liability provisions contained in the Request for Proposal. Negotiations shall then be conducted with each of the offerors so selected. The offeror shall state any exception to any liability provisions contained in the Request for Proposal in writing at the beginning of negotiations, and such exceptions shall be considered during negotiation. Price shall be considered, but need not be the sole or primary determining factor. After negotiations have been conducted with each offeror so selected, the public body shall select the offeror which, in its opinion, has made the best proposal and provides the best value, and shall award the contract to that offeror. When the terms and conditions of multiple awards are so provided in the Request for Proposal, awards may be made to more than one offeror. Should the public body determine in writing and in its sole discretion that only one offeror is fully qualified, or that one offeror is clearly more highly qualified than the others under consideration, a contract may be negotiated and awarded to that offeror; or
4. For professional services, the public body shall engage in individual discussions with two or more offerors deemed fully qualified, responsible and suitable on the basis of initial responses and with emphasis on professional competence, to provide the required services. Repetitive informal interviews shall be permissible. The offerors shall be encouraged to elaborate on their qualifications and performance data or staff expertise pertinent to the proposed project, as well as alternative concepts. In addition, offerors shall be informed of any ranking criteria that will be used by the public body in addition to the review of the professional competence of the offeror. The Request for Proposal shall not, however, request that offerors furnish estimates of man-hours or cost for services. At the discussion stage, the public body may discuss nonbinding estimates of total project costs, including, but not limited to, life-cycle costing, and where appropriate, nonbinding estimates of price for services. In accordance with §2.2-4342, proprietary information from competing offerors shall not be disclosed to the public or to competitors. For architectural or engineering services, the public body shall not request or require offerors to list any exceptions to proposed contractual terms and conditions, unless such terms and conditions are required by statute, regulation, ordinance, or standards developed pursuant to §2.2-1132, until after the qualified offerors are ranked for negotiations. At the conclusion of discussion, outlined in this subdivision, on the basis of evaluation factors published in the Request for Proposal and all information developed in the selection process to this point, the public body shall select in the order of preference two or more offerors whose professional qualifications and proposed services are deemed most meritorious.
Negotiations shall then be conducted, beginning with the offeror ranked first. If a contract satisfactory and advantageous to the public body can be negotiated at a price considered fair and reasonable and pursuant to contractual terms and conditions acceptable to the public body, the award shall be made to that offeror. Otherwise, negotiations with the offeror ranked first shall be formally terminated and negotiations conducted with the offeror ranked second, and so on until such a contract can be negotiated at a fair and reasonable price.
Notwithstanding the foregoing, if the terms and conditions for multiple awards are included in the Request for Proposal, a public body may award contracts to more than one offeror.
Should the public body determine in writing and in its sole discretion that only one offeror is fully qualified or that one offeror is clearly more highly qualified and suitable than the others under consideration, a contract may be negotiated and awarded to that offeror.
B. Multiphase professional services contracts satisfactory and advantageous to the completion of large, phased, or long-term projects may be negotiated and awarded based on a fair and reasonable price for the first phase only, where the completion of the earlier phases is necessary to provide information critical to the negotiation of a fair and reasonable price for succeeding phases. Prior to entering into any such contract, the public body shall (i) state the anticipated intended total scope of the project and (ii) determine in writing that the nature of the work is such that the best interests of the public body require awarding the contract.
For the purposes of subdivision A 1, "experience
modification factor" means a value assigned to an employer as determined
by a rate service organization in accordance with its uniform experience rating
plan required to be filed pursuant to subsection D of §38.2-1913.
§2.2-4377.1. Definitions.
As used in this article, unless the context requires a different meaning:
"Best value contract" means a contract entered into pursuant to the provisions of this article.
"Best value contractor" means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.
"Demonstrated management competency" means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
"Qualifications" means the financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record of the bidder and, if required by the bidding documents, any of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work.
"Relevant experience" means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
§2.2-4377.2. Use of best value contracting by state and local government.
A. Notwithstanding any provision of this chapter to the contrary, any public body may consider best value concepts during the process for the procurement of goods, services, or construction in accordance with this article.
B. The public body shall include in every Invitation to Bid or Request for Proposal a notice to potential best value contractors that the procurement decision shall be made on the basis of best value. In addition, the Invitation to Bid or Request for Proposal for each best value contract shall include a section identifying and describing the (i) criteria that will be considered in evaluating bids, (ii) methodology and rating or weighting system that will be used in evaluating bids, and (iii) relative importance or weight assigned to the criteria identified in the Invitation to Bid or Request for Proposal.
§2.2-4377.3. Selection of the best value contractor.
A. Selection of the best value contractor shall be made as follows:
1. The public body shall evaluate the qualifications of the bidders solely on the basis of the criteria set forth in the Invitation to Bid or Request for Proposal and shall assign a qualifications score to each bid.
2. The award of the contract shall be made to the bidder whose bid is determined by the public body to be the best value. To determine the best value contractor, the public body shall divide each bidder's price by its qualifications score. The lowest resulting cost per quality point will represent the best value bid.
3. The public body shall issue a written decision of its contract award.
B. Upon issuance of a contract award, the public body shall announce its award identifying the best value contractor to which the award is made, the project, the project price, and the selected best value contractor's score based on the evaluation criteria listed in the Invitation to Bid or Request for Proposal. The notice of award shall be made public and include the score of the selected best value contractor in relation to all other responsive bidders and their respective prices. The contract file shall include documentation sufficient to support the decision to award.
