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Applicability of HB 1885 and the Public Competitive Bidding Act

Applicability of HB 1885 and the Public Competitive Bidding Act

What you need to know, including if this new provision apply to schools.

HB 1885, passed this legislative session, amends 60 O.S. Section 176 (dealing with public trusts) and, relevant to school districts, 61 O.S. Section 103, the Public Competitive Bidding Act.The amendments allow for “local bid preference” options, as follows:

 

“Notwithstanding subsection A of this section, in awarding public construction contracts exceeding Fifty Thousand Dollars ($50,000.00), counties, cities, other local units of government and any public trust with a county or a municipality as its sole beneficiary may provide for a local bid preference of not more than five percent (5%) of the bid price if the awarding public agency determines that there is an economic benefit to the local area or economy. Provided, however, the local bidder or contractor must agree to perform the contract for the same price and terms as the bid proposed by the nonlocal bidder or contractor. Any bid preference granted hereunder must be in accordance with an established policy adopted by the governing body of the awarding public agency to clearly demonstrate the economic benefit to the local area or economy. Provided, further, no local bid preference shall be granted unless the local bidding entity is the second lowest qualified bid on the contract. The bid specifications shall clearly state that the bid is subject to a local bidder preference law. For purposes of this section, "local bid" means the bidding person is authorized to transact business in this state and maintains a bona fide establishment for transacting such business within this state. This provision does not apply to any construction contract for which federal funds are available for expenditure when its provisions may be in conflict with federal law or regulation.”

 

Aside from potential implications of the changes themselves (which could warrant additional consideration), question has arisen among school attorneys as to the applicability of this new provision to schools. Does it or doesn’t it?

 

At issue is the bill’s lack of specificity in either including or excluding schools in the new language. Clearly schools are not counties, cities or public trusts. But are they “other local units of government” within the context of the amendment? The short answer is that we just don’t know for sure. There is not a clear consensus among school attorneys at this time. Some of are of the opinion that the amendment does include schools, while others believe it does not. What is agreed is that, for whatever reason, the bill does not make it obvious one way or the other.

 

It is possible that in the future we could receive guidance in the form of an AG Opinion or declaratory judgment. Although the matter is not yet settled, the good news is that no entity is mandated to provide for a local bid preference.The language is merely permissive. As hinted previously, even in the event schools are determined to be squarely included within the amendment, there are additional issues to consider and board policy language that must be adopted prior to implementation.

Terri Thomas

Legal Services

Terri Thomas serves as Director of Legal Services for OPSRC. Ms. Thomas is an attorney practicing exclusively in the area of Oklahoma school law, with a primary focus on rural and smaller school districts. Prior to OPSRC, she served as legal counsel for the Organization of Rural Oklahoma Schools (OROS).

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