72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 3476
Sponsored by Representative MERKLEY
CHAPTER ................
AN ACT
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.
(c) Value engineering.
(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.
Enrolled House Bill 3476 (HB 3476-INTRO) Page 1
{ - (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.
(c) A public contract exempt under subsection (2) of this
section.
(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
(C) The original contracting public agency concurs.
(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
Enrolled House Bill 3476 (HB 3476-INTRO) Page 2
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.
Enrolled House Bill 3476 (HB 3476-INTRO) Page 3
(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.
Enrolled House Bill 3476 (HB 3476-INTRO) Page 4
----------
Passed by House April 23, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 20, 2003
...........................................................
President of Senate
Enrolled House Bill 3476 (HB 3476-INTRO) Page 5
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 3476 (HB 3476-INTRO) Page 6