Chapter 562 Oregon Laws 2003

AN ACT

HB 3476

Relating to public contracts for energy conservation measures; amending ORS 279.011, 279.015 and 351.086.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 279.011 is amended to read:

279.011. As used in ORS 279.005 to 279.111:

(1) “Board” means a local contract review board created pursuant to ORS 279.055.

(2) “Department” means the Oregon Department of Administrative Services.

(3) “Director” means the Director of the Oregon Department of Administrative Services.

(4) “Emergency” means circumstances that could not have been reasonably foreseen that create a substantial risk of loss, damage, interruption of services or threat to the public health or safety that requires prompt execution of a contract to remedy the condition.

(5) “Energy savings performance contract” means a public contract between a public agency and a qualified energy service company for the identification, evaluation, recommendation, design and construction of energy conservation measures, including a design-build contract, that guarantee energy savings or performance.

[(5)] (6) “Findings” means the justification for an agency conclusion that includes, but is not limited to, information regarding:

(a) Operational, budget and financial data.

(b) Public benefits.

(d) Specialized expertise required.

(e) Public safety.

(f) Market conditions.

(g) Technical complexity.

(h) Funding sources.

[(6)] (7) “Public contract” means any purchase, lease or sale by a public agency of personal property, public improvements or services other than agreements which are for personal service.

[(7)] (8) “Public agency” or “public contracting agency” means any agency of the State of Oregon or any political subdivision thereof authorized by law to enter into public contracts and any public body created by intergovernmental agreement.

[(8)] (9) “Public improvement” means projects for construction, reconstruction or major renovation on real property by or for a public agency. “Public improvement” does not include emergency work, minor alteration, ordinary repair or maintenance necessary in order to preserve a public improvement.

SECTION 2. ORS 279.015, as amended by section 5, chapter 3, Oregon Laws 2002, is amended to read:

279.015. (1) Subject to the policies and provisions of ORS 279.005 and 279.007, all public contracts shall be based upon competitive bids or proposals except:

(a) Contracts made with other public agencies or the federal government.

(b) Contracts made with qualified nonprofit agencies providing employment opportunities for disabled individuals.

(d) A contract for products, services or supplies if the value of the contract is less than $5,000.

(e) Insurance and service contracts as provided for under ORS 414.115, 414.125, 414.135 and 414.145.

(f) Contracts for repair, maintenance, improvement or protection of property obtained by the Director of Veterans’ Affairs under ORS 407.135 and 407.145 (1).

(g) Contracts between public agencies utilizing an existing solicitation or current requirement contract of one of the public agencies that is party to the contract for which:

(A) The original contract met the requirements of this chapter;

(B) The contract allows other public agency usage of the contract; and

(h) If a project is competitively bid and all responsive bids from responsible bidders exceed the public agency’s cost estimate, the public agency, in accordance with rules adopted by the public agency, may negotiate with the lowest responsive, responsible bidder, prior to awarding the contract, in order to solicit value engineering and other options to attempt to bring the project within the agency’s cost estimate. A negotiation with the lowest responsive, responsible bidder pursuant to this paragraph shall not result in the award of the contract to that bidder if the scope of the project is significantly changed from the original bid proposal. Notwithstanding any other provision of law, the records of a bidder used in contract negotiation pursuant to this paragraph are not subject to public inspection until after the negotiated contract has been awarded or the negotiation process has been terminated.

(2) Subject to subsection (6)(b) of this section, the Director of the Oregon Department of Administrative Services, a local contract review board or, for contracts described in ORS 279.712 (2)(c), the Director of Transportation may exempt certain public contracts or classes of public contracts from the competitive bidding requirements of subsection (1) of this section upon approval of the following findings submitted by the public contracting agency seeking the exemption:

(a) It is unlikely that such exemption will encourage favoritism in the awarding of public contracts or substantially diminish competition for public contracts; and

(b) The awarding of public contracts pursuant to the exemption will result in substantial cost savings to the public contracting agency or, if the contracts are for public improvements described in ORS 279.712 (2)(c), to the agency or the public. In making such finding, the Director of the Oregon Department of Administrative Services, the Director of Transportation or the local contract review board may consider the type, cost, amount of the contract, number of persons available to bid and such other factors as may be deemed appropriate.

(3)(a) Before final adoption of the findings required by subsection (2) of this section exempting a contract for a public improvement, or a class of contracts for public improvements described in ORS 279.712 (2)(c), from the requirement of competitive bidding, a public agency shall hold a public hearing.

(b) Notification of the public hearing shall be published in at least one trade newspaper of general statewide circulation a minimum of 14 days prior to the hearing.

(c) The notice shall state that the public hearing is for the purpose of taking comments on the agency’s draft findings for an exemption from the competitive bidding requirement. At the time of the notice, copies of the draft findings shall be made available to the public. At the option of the public agency, the notice may describe the process by which the findings are finally adopted and may indicate the opportunity for any further public comment.

(d) At the public hearing, the public agency shall offer an opportunity for any interested party to appear and present comment.

(e) If a public agency is required to act promptly due to circumstances beyond its control that do not constitute an emergency, notification of the public hearing can be published simultaneously with the agency’s solicitation of contractors for the alternative public contracting method, as long as responses to the solicitation are due at least five days after the meeting and approval of the findings.

(4) A public contract also may be exempted from the requirements of subsection (1) of this section if:

(a) Emergency conditions require prompt execution of the contract;

(b) In case of sale of surplus property by a public agency, the number, value and nature of the items to be sold make it probable that the cost of conducting a sale by competitive bidding will be such that a liquidation sale will result in substantially greater net revenue to the public agency; [or]

(c) The procedures for entering into an energy savings performance contract under subsection (8) of this section apply; or

[(c)(A)] (d)(A) The public contract is made between regularly organized fire departments, as defined in ORS 652.050, for fire protection equipment, as defined in ORS 476.005, and:

(i) The recipient regularly organized fire department makes a written request for the fire protection equipment to the transferor regularly organized fire department;

(ii) The fire protection equipment is surplus to or unusable by the transferor;

(iii) The total fair market value of fire protection equipment received by the recipient does not exceed $50,000 per calendar year; and

(iv) The transferor holds a public hearing, with notice given as outlined in subsection (3)(b) of this section, and finds that the public contract is in the public’s interest.

(B) As used in subparagraph (A) of this paragraph, “public contract” includes a sale at no cost.

(5) The Director of the Oregon Department of Administrative Services or the local contract review board shall adopt rules allowing the governing body of a public agency and the officer of a public agency for contracts under $50,000 to declare that an emergency exists and establishing procedures for determining when the conditions in subsection (4)(a) of this section are present. The rules shall prescribe that if an emergency is declared, any contract awarded under this subsection and subsection (4)(a) of this section must be awarded within 60 days following declaration of the emergency, unless the director or board grants an extension.

(6) In granting exemptions pursuant to subsection (2)(a) and (b) of this section, the Director of the Oregon Department of Administrative Services, the Director of Transportation or the local contract review board shall:

(a) Where appropriate, direct the use of alternate contracting and purchasing practices that take account of market realities and modern or innovative contracting and purchasing methods, which are also consistent with the public policy of encouraging competition.

(b) Require and approve or disapprove written findings by the public contracting agency that support the awarding of a particular public contract or a class of public contracts, without the competitive requirements of subsection (1) of this section. The findings must show that the exemption of a contract or class of contracts complies with the requirements of subsection (2)(a) and (b) of this section.

(7) A written agreement under ORS chapter 190 is not necessary under subsection (1)(g) of this section if the arrangement is between or among units of local government.

(8) In accordance with ORS 279.049, the Attorney General shall adopt model rules appropriate for use by all public contracting agencies to govern the procedures for entering into energy savings performance contracts. Before adopting or amending a rule under this subsection, the Attorney General shall consult with the Oregon Department of Administrative Services, the Office of Energy, the Oregon University System, local public agencies and other knowledgeable persons. The Attorney General may develop standard contract forms for use with energy savings performance contracts.

SECTION 3. ORS 351.086 is amended to read:

351.086. (1) Except as otherwise provided in this chapter and ORS chapter 352, the provisions of ORS chapters 240, 279, 282 and 292 do not apply to the Oregon University System.

(2) Notwithstanding subsection (1) of this section, ORS 240.167, 240.185, 279.015 (8), 279.029 (4) and (5), 279.321, 279.348, 279.350, 279.352, 279.354, 279.355, 279.356, 279.357, 279.361, 279.363, 279.365, 279.370, 279.375, 279.526 to 279.542, 279.835 to 279.855 and 292.043 shall apply to the Oregon University System.

(3) Notwithstanding any other law, the following provisions shall not apply to the Oregon University System:

(a) ORS 182.310 to 182.400; and

(b) ORS 276.071 and 276.072.

(4) In carrying out the duties, functions and powers imposed by law upon the Oregon University System, the State Board of Higher Education or the Chancellor of the Oregon University System may contract with any public agency for the performance of such duties, functions and powers as the Oregon University System considers appropriate.

Approved by the Governor July 8, 2003

Filed in the office of Secretary of State July 8, 2003

Effective date January 1, 2004

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