1. Life Cycle Costing for the procurement of state property

105273-1 : n : 12/09/2008 : MCS / th LRS2008-4815

SYNOPSIS:         This bill would allow the procurement of personal property by the state to recognize life cycle costing, as ascertained by industry recognized and accepted sources, in the awarding of the lowest responsible bid for personal property.






Relating to the awarding of publicly-bid contracts for the procurement of personal property by the state; to amend Section 41-16-27, Code of Alabama 1975, to allow consideration of life cycle costing in determining the lowest responsible bid for personal property.


Section 1. Section 41-16-27, Code of Alabama 1975, is amended to read as follows:


"(a) When purchases are required to be made through competitive bidding, award shall, except as provided in subsection (e), be made to the lowest responsible bidder taking into consideration the qualities of the commodities proposed to be supplied, their conformity with specifications, the purposes for which required, the terms of delivery, transportation charges and the dates of delivery provided, that the awarding authority may at any time within 30 days after the bids are opened negotiate and award the contract to anyone, provided he secures a price at least five percent under the low acceptable bid. The award of such a negotiated contract shall be subject to approval by the Director of Finance and the Governor, except in cases where the awarding authority is a two-year or four-year college or university governed by a board. The awarding authority or requisitioning agency shall have the right to reject any bid if the price is deemed excessive or quality of product inferior.

"(b) Each bid, with the name of the bidder, shall be entered on a record. Each record, with the successful bid indicated thereon and with the reasons for the award if not awarded to the lowest bidder shall, after award of the order or contract, be open to public inspection.

"(c) The Purchasing Agent in the purchase of or contract for personal property or contractual services shall give preference, provided there is no sacrifice or loss in price or quality, to commodities produced in Alabama or sold by Alabama persons, firms, or corporations.

"(d)(1) Contracts for the purchase of personal property or contractual services other than personal services shall be let by competitive bid for periods not greater than five years and current contracts existing on February 28, 2006, may be extended or renewed for an additional two years with a 90-day notice of such extension or renewal given to the Legislative Council, however, any contract that generates funds or will reduce annual costs by awarding the contract for a longer term than a period of three years which is let by or on behalf of a state two-year or four-year college or university may be let for periods not greater than 10 years. Any contract awarded pursuant to this section for terms of less than 10 years may be extended for a period not to exceed 10 years from the initial awarding of the contract provided that the terms of the contract shall not be altered or renegotiated during the period for which the contract is extended.

"(2) For purchases of personal property made on or after January 1, 2009, in instances in which the awarding authority determines that the total cost of ownership over the expected life of the item or items, including acquisition costs plus sustaining costs, and including specifically life cycle costs, can be reasonably ascertained from industry recognized and accepted sources, the lowest responsible bid may be determined to be the bid offering the lowest life cycle costs and otherwise meeting all of the conditions and specifications contained in the invitation to bid. To utilize this provision to determine the lowest responsible bidder, the awarding authority must include a notice in the invitation to bid that the lowest responsible bid may be determined by using life cycle costs and identify the industry recognized and accepted sources that will be applicable to such an evaluation.

"(3) Industry recognized and accepted sources may be provided by rules adopted pursuant to the Alabama Administrative Procedure Act by the Green Fleet Review Committee if the review committee is established and enacted at the 2008 Regular Session. If the Green Fleet Review Committee is not enacted at the 2008 Regular Session, the Permanent Joint Legislative Committee on Energy Policy may adopt rules providing industry recognized and accepted sources.

"(4) The provisions of subdivisions (2) and (3) shall not affect the review of any contract by the Contract Review Permanent Legislative Oversight Committee.

"(e) Contracts for the purchase of services for receiving, processing, and paying claims for services rendered recipients of the Alabama Medicaid program authorized under Section 22-6-7 which are required to be competitively bid may be awarded to the bidder whose proposal is most advantageous to the state, taking into consideration cost factors, program suitability factors (technical factors) including understanding of program requirements, management plan, excellence of program design, key personnel, corporate or company resources and designated location, and other factors including financial condition and capability of the bidder, corporate experience and past performance and priority of the business to insure the contract awarded is the best for the purposes required. Each of these criteria shall be given relative weight value as designated in the invitation to bid, with price retaining the most significant weight. Responsiveness to the bid shall be scored for each designated criteria. If, for reasons cited above, the bid selected is not from the lowest bidding contractor, the Alabama Medicaid Agency shall present its reasons for not recommending award to the low bidder to the Medicaid Interim Committee. The committee shall evaluate the findings of the Alabama Medicaid Agency and must, by resolution, approve the action of the awarding authority before final awarding of any such contract. The committee shall also hear any valid appeals against the recommendation of the Alabama Medicaid Agency from the low bid contractor(s) whose bid was not selected.

"(f) Notwithstanding the requirements under Sections 41-16-20, 41-16-21, and this section, contractual services and purchases of personal property regarding the athletic department, food services, and transit services negotiated on behalf of two-year and four-year colleges and universities may be awarded without competitive bidding provided that no state revenues, appropriations, or other state funds are expended or committed and when it is deemed by the respective board that financial benefits will accrue to the institution, except that in the cases where an Alabama business entity as defined by this section is available to supply the product or service they will have preference unless the product or service supplied by a foreign corporation is substantially different or superior to the product or service supplied by the Alabama business entity. However, the terms and conditions of any of the services or purchases which are contracted through negotiation without being competitively bid and the name and address of the recipient of such a contract shall be advertised in a newspaper of general circulation in the municipality in which the college or university is located once a week for two consecutive weeks commencing no later than 10 days after the date of the contract. For the purposes of this section, the term Alabama business entity shall mean any sole proprietorship, partnership, or corporation organized in the State of Alabama."

Section 2. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.