GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION LAW 2001-328
AN ACT amending the local government purchasing laws under the laws relating to public contracts and the sale of property for cities and towns.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 143-129 reads as rewritten:
"§
143-129. Procedure for letting of public contracts; purchases from
federal government by State, counties, etc.contracts.
(a) Bidding Required. -
No construction or repair work requiring the estimated expenditure of
public money in an amount equal to or more than one hundred thousand dollars
($100,000) or purchase of apparatus, supplies, materials, or equipment
requiring an estimated expenditure of public money in an amount equal to or
more than thirty thousand dollars ($30,000), except in cases of group
purchases made by hospitals through a competitive bidding purchasing program or
in cases of special emergency involving the health and safety of the people or
their property, shallfifty thousand dollars ($50,000) may be
performed, nor shallmay any contract be awarded therefor, by any
board or governing body of the State, or of any institution of the State
government, or of any county, city, town, or otherpolitical
subdivision of the State, unless the provisions of this section are complied
with. For purposes of this Article, a competitive bidding group purchasing
program is a formally organized program that offers purchasing services at
discount prices to two or more hospital facilities. The limitation contained in
this paragraph shall not apply to construction or repair work undertaken during
the progress of a construction or repair project initially begun pursuant to
this section. Further, the provisions of this section shall not apply to the
purchase of gasoline, diesel fuel, alcohol fuel, motor oil or fuel oil. Such
purchases shall be subject to G.S. 143-131.
For purchases of apparatus, supplies, materials, or
equipment, the governing body of any municipality, county, or other
political subdivision of the State may, subject to any restriction as to dollar
amount, or other conditions that the governing body elects to impose, delegate
to the manager or the chief purchasing officialofficial, or both,
the authority to award contracts, reject bids, or readvertise to receive
bids on behalf of the unit, or waive bid bonds or deposits, or performance
and payment bond requirements.unit. Any person to whom authority is
delegated under this subsection shall comply with the requirements of this
Article that would otherwise apply to the governing body.
(b) Advertisement of
the letting of such contracts shall be as follows:and Letting of
Contracts. - Where the contract is to be let by a board or governing body
of the State government,government or of a State institution, as
distinguished from a board or governing body of a subdivision of the State,
proposals shall be invited by advertisement at least one week before the
time specified for the opening of said proposals in a newspaper having
general circulation in the State of North Carolina. Where the contract is to
be let by a political subdivision of the State, proposals shall be invited by
advertisement in a newspaper having general circulation in the political subdivision
or by electronic means, or both. A decision to advertise solely by electronic
means, whether for particular contracts or generally for all contracts that are
subject to this Article, shall be approved by the governing board of the
political subdivision of the State at a regular meeting of the board. Provided
that the
The advertisements for bidders required by this
section shall be publishedappear at such a time thatwhere
at least seven full days shall lapse between the date of publication ofon
which the notice appears and the date of the opening of bids. The
advertisement shall: (i) state the time and place where plans and
specifications of proposed work or a complete description of the apparatus,
supplies, materials, or equipment may be had; (ii) state the time and place for
opening of the proposals; and (iii) reserve to the board or governing body the
right to reject any or all proposals.
Where the contract is to be let by a county, city, town or
other subdivision of the State, proposals shall be invited by advertisement at
least one week before the time specified for the opening of said proposals in a
newspaper having general circulation in such county, city, town or other
subdivision.
Such advertisement shall state the time and place where
plans and specifications of proposed work or a complete description of the
apparatus, supplies, materials or equipment may be had, and the time and place
for opening of the proposals, and shall reserve to said board or governing body
the right to reject any or all such proposals.
Proposals shall notmay be rejected for any
reason determined by the board or governing body to be in the best interest of
the unit. However, the proposal shall not be rejected for the purpose of
evading the provisions of this Article. No board or governing body of the State
or political subdivision thereof shallmay assume
responsibility for construction or purchase contracts, or guarantee the
payments of labor or materials therefor except under provisions of this
Article.
All proposals shall be opened in public and shall be
recorded on the minutes of the board or governing body and the award shall be
madethe board or governing body shall award the contract to the
lowest responsible bidder or bidders, taking into consideration quality,
performance and the time specified in the proposals for the performance of the
contract. In
In the event the lowest responsible bids are in excess
of the funds available for the project,project or purchase, the
responsible board or governing body is authorized to enter into negotiations
with the lowest responsible bidder above mentioned, making reasonable changes
in the plans and specifications as may be necessary to bring the contract price
within the funds available, and may award a contract to such bidder upon
recommendation of the Department of Administration in the case of the State
government or of a State institution or agency, or upon recommendation of the
responsible commission, council or board in the case of a subdivision of the
State, if such bidder will agree to perform the work or provide the
apparatus, supplies, materials, or equipment at the negotiated price within
the funds available therefor. If a contract cannot be let under the above
conditions, the board or governing body is authorized to readvertise, as herein
provided, after having made such changes in plans and specifications as may be
necessary to bring the cost of the project or purchase within the funds
available therefor. The procedure above specified may be repeated if necessary
in order to secure an acceptable contract within the funds available therefor.
No proposal shall for construction or repair work
may be considered or accepted by said board or governing body unless at the
time of its filing the same shall be accompanied by a deposit with said board
or governing body of cash, or a cashier's check, or a certified check on some
bank or trust company insured by the Federal Deposit Insurance Corporation in
an amount equal to not less than five percent (5%) of the proposal. In lieu of
making the cash deposit as above provided, such bidder may file a bid bond
executed by a corporate surety licensed under the laws of North Carolina to
execute such bonds, conditioned that the surety will upon demand forthwith make
payment to the oblige upon said bond if the bidder fails to execute the
contract in accordance with the bid bond. This deposit shall be retained if the
successful bidder fails to execute the contract within 10 days after the award
or fails to give satisfactory surety as required herein. In the case of
proposals for the purchase of apparatus, supplies, materials, or equipment, the
board or governing body may waive the requirement for a bid bond or other
deposit.
Bids shall be sealed and the opening of an envelope or package with knowledge that it contains a bid or the disclosure or exhibition of the contents of any bid by anyone without the permission of the bidder prior to the time set for opening in the invitation to bid shall constitute a Class 1 misdemeanor.
(c) Contract Execution
and Security. - All contracts to which this section applies shall be
executed in writing, and thewriting. The board or governing body
shall require the person to whom the award of a contract for
construction or repair work is made to furnish bond as required by Article
3 of Chapter 44A; or require a deposit of money, certified check or government
securities for the full amount of said contract to secure the faithful
performance of the terms of said contract and the payment of all sums due for
labor and materials in a manner consistent with Article 3 of Chapter 44A; and no
suchthe contract shall not be altered except by written
agreement of the contractor, the sureties on his bond,contractor
and the board or governing body. SuchThe surety bond or deposit
required herein shall be deposited with the board or governing body for which
the work is to be performed. When a deposit, other than a surety bond, is made
with the board or governing body, saidthe board or governing body
assumes all the liabilities, obligations and duties of a surety as provided in
Article 3 of Chapter 44A to the extent of said deposit. In the case of
contracts for the purchase of apparatus, supplies, materials, or equipment, the
board or governing body may waive the requirement for a surety bond or other
deposit.
The owning agency or the Department of Administration, in contracts involving a State agency, and the owning agency or the governing board, in contracts involving a political subdivision of the State, may reject the bonds of any surety company against which there is pending any unsettled claim or complaint made by a State agency or the owning agency or governing board of any political subdivision of the State arising out of any contract under which State funds, in contracts with the State, or funds of political subdivisions of the State, in contracts with such political subdivision, were expended, provided such claim or complaint has been pending more than 180 days.
(d) Use of Unemployment Relief Labor. - Nothing in this section shall operate so as to require any public agency to enter into a contract which will prevent the use of unemployment relief labor paid for in whole or in part by appropriations or funds furnished by the State or federal government.
(e) Exceptions. - The requirements of this Article do not apply to:
(1) Any board or
governing body of the State or any institution of the State government or of
any county, city, town, or other subdivision of the State may enter into any
contract withThe purchase, lease, or other acquisition of any apparatus,
supplies, materials, or equipment from: (i) the United States of America or
any agency thereof,thereof; or (ii) any other government unit or
agency thereof within the United States, for the purchase, lease, or other
acquisition of any apparatus, supplies, materials, or equipment without regard
to the foregoing provisions of this section or to the provisions of any other
section of this Article.States. The Secretary of Administration or the
governing board of any political subdivision of the State may designate any
officer or employee of the State or political subdivision to enter a bid or
bids in its behalf at any sale of apparatus, supplies, materials, equipment, or
other property owned by: (i) the United States of America or any agency
thereof; or (ii) any other governmental unit or agency thereof within the
United States. The Secretary of Administration or the governing board of any
political subdivision of the State may authorize the officer or employee to
make any partial or down payment or payment in full that may be required by
regulations of the governmental unit or agency disposing of the property.
(2) Cases of special emergency involving the health and safety of the people or their property.
(3) Purchases made through a competitive bidding group purchasing program, which is a formally organized program that offers competitively bid purchasing services at discount prices to two or more public agencies.
(4) Construction or repair work undertaken during the progress of a construction or repair project initially begun pursuant to this section.
(5) Purchase of gasoline, diesel fuel, alcohol fuel, motor oil, fuel oil, or natural gas. These purchases are subject to G.S. 143-131.
(6) Purchases of apparatus, supplies, materials, or equipment when: (i) performance or price competition for a product are not available; (ii) a needed product is available from only one source of supply; or (iii) standardization or compatibility is the overriding consideration. Notwithstanding any other provision of this section, the governing board of a political subdivision of the State shall approve the purchases listed in the preceding sentence prior to the award of the contract.
In the case of purchases by hospitals, in addition to the other exceptions in this subsection, the provisions of this Article shall not apply when: (i) a particular medical item or prosthetic appliance is needed; (ii) a particular product is ordered by an attending physician for his patients; (iii) additional products are needed to complete an ongoing job or task; (iv) products are purchased for "over-the-counter" resale; (v) a particular product is needed or desired for experimental, developmental, or research work; or (vi) equipment is already installed, connected, and in service under a lease or other agreement and the governing body of the hospital determines that the equipment should be purchased. The governing body of a hospital shall keep a record of all purchases made pursuant to this subsection. These records are subject to public inspection.
(7) Purchases of information technology through contracts established by the State Office of Information Technology Services as provided in G.S. 147-33.82(b) and G.S. 147-33.92(b).
(8) Guaranteed energy savings contracts, which are governed by Article 3B of Chapter 143 of the General Statutes.
(9) Purchases from contracts established by the State or any agency of the State, if the contractor is willing to extend to a political subdivision of the State the same or more favorable prices, terms, or conditions as established in the State contract.
(10) Purchase of used apparatus, supplies, materials, or equipment. For purposes of this subdivision, remanufactured or refabricated apparatus, supplies, materials, or equipment are not included in the exception.
The Secretary of Administration or the governing board of
any county, city, town, or other subdivision of the State may designate any
officer or employee of the State, county, city, town or subdivision to enter a
bid or bids in its behalf at any sale of apparatus, supplies, materials,
equipment or other property owned by (i) the United States of America or any
agency thereof, or (ii) any other governmental unit or agency thereof within
the United States, and may authorize such officer or employee to make any
partial or down payment or payment in full that may be required by regulations
of the government or agency disposing of such property.
(f) The
provisions of this Article shall not apply to purchases of apparatus, supplies,
materials, or equipment when performance or price competition for a product are
not available; when a needed product is available from only one source of
supply; or when standardization or compatibility is the overriding
consideration. Notwithstanding any other provision of this section, the
governing board of a municipality, county, or other subdivision of the State
shall approve the purchases listed in the preceding sentence prior to the award
of the contract. In the case of purchases by hospitals, in addition to the
other exceptions in this subsection, the provisions of this Article shall not
apply when a particular medical item or prosthetic appliance is needed; when a
particular product is ordered by an attending physician for his patients; when
additional products are needed to complete an ongoing job or task; when
products are purchased for "over-the-counter" resale; when a
particular product is needed or desired for experimental, developmental, or
research work; or when equipment is already installed, connected, and in
service under a lease or other agreement and the governing body of the hospital
determines that the equipment should be purchased. The governing body of a
hospital, municipality, county or other political subdivision of the State
shall keep a record of all purchases made pursuant to this subsection. These
records are subject to public inspection.
(g) Waiver of Bidding
for Previously Bid Contracts. - When the governing board of any municipality,
county, or otherpolitical subdivision of the State, or the manager or
purchasing official delegated authority under subsection (a) of this section,
determines that it is in the best interest of the unit, the requirements of
this section may be waived for the purchase of apparatus, supplies, materials,
or equipment from any person or entity that has, within the previous 12 months,
after having completed a public, formal bid process substantially similar to
that required by this Article, contracted to furnish the apparatus, supplies,
materials, or equipment to:
(1) The United States of America or any federal agency;
(2) The State of North Carolina or any agency or political subdivision of the State; or
(3) Any other state or any agency or political subdivision of that state,
if the person or entity is willing to furnish the items at the
same or more favorable prices, terms, and conditions as those provided under
the contract with the other unit or agency. Notwithstanding any other provision
of this section, any purchase made under this subsection shall be approved by
the governing body of the purchasing municipality, county, or other
political subdivision of the State at a regularly scheduled meeting of the
governing body no fewer than 10 days after publication of notice, in a
newspaper of general circulation in the area served by the governing body, that
a waiver of the bid procedure will be considered in order to contract with a
qualified supplier pursuant to this section. Rules issued by the Secretary of
Administration pursuant to G.S. 143-49(6) shall apply with respect to
participation in State term contracts.
(h) Transportation Authority Purchases. - Notwithstanding any other provision of this section, any board or governing body of any regional public transportation authority, hereafter referred to as a "RPTA," created pursuant to Article 26 of Chapter 160A of the General Statutes, or a regional transportation authority, hereafter referred to as a "RTA," created pursuant to Article 27 of Chapter 160A of the General Statutes, may approve the entering into of any contract for the purchase, lease, or other acquisition of any apparatus, supplies, materials, or equipment without competitive bidding and without meeting the requirements of subsection (b) of this section if the following procurement by competitive proposal (Request for Proposal) method is followed.
The competitive proposal method of procurement is normally conducted with more than one source submitting an offer or proposal. Either a fixed price or cost reimbursement type contract is awarded. This method of procurement is generally used when conditions are not appropriate for the use of sealed bids. If this procurement method is used, all of the following requirements apply:
(1) Requests for proposals shall be publicized. All evaluation factors shall be identified along with their relative importance.
(2) Proposals shall be solicited from an adequate number of qualified sources.
(3) RPTAs or RTAs shall have a method in place for conducting technical evaluations of proposals received and selecting awardees, with the goal of promoting fairness and competition without requiring strict adherence to specifications or price in determining the most advantageous proposal.
(4) The award may be based upon initial proposals without further discussion or negotiation or, in the discretion of the evaluators, discussions or negotiations may be conducted either with all offerors or with those offerors determined to be within the competitive range, and one or more revised proposals or a best and final offer may be requested of all remaining offerors. The details and deficiencies of an offeror's proposal may not be disclosed to other offerors during any period of negotiation or discussion.
(5) The award shall be made to the responsible firm whose proposal is most advantageous to the RPTA's or the RTA's program with price and other factors considered.
The contents of the proposals shall not be public records until 14 days before the award of the contract.
The board or governing body of the RPTA or the RTA shall, at the regularly scheduled meeting, by formal motion make findings of fact that the procurement by competitive proposal (Request for Proposals) method of procuring the particular apparatus, supplies, materials, or equipment is the most appropriate acquisition method prior to the issuance of the requests for proposals and shall by formal motion certify that the requirements of this subsection have been followed before approving the contract.
Nothing in this subsection subjects a procurement by competitive proposal under this subsection to G.S. 143-49, 143-52, or 143-53.
RPTAs and RTAs may adopt regulations to implement this subsection."
SECTION 2. G.S. 143-129.1 reads as rewritten:
"§ 143-129.1. Withdrawal of bid.
A public agency may allow a bidder submitting a bid pursuant
to North Carolina G.S. 143-129 for construction or repair work or for
the purchase of apparatus, supplies, materials, or equipment to withdraw
his bid from consideration after the bid opening without forfeiture of his bid
security if the price bid was based upon a mistake, which constituted a
substantial error, provided the bid was submitted in good faith, and the bidder
submits credible evidence that the mistake was clerical in nature as opposed to
a judgment error, and was actually due to an unintentional and substantial
arithmetic error or an unintentional omission of a substantial quantity of
work, labor, material orapparatus, supplies, materials, equipment, or
services made directly in the compilation of the bid, which unintentional
arithmetic error or unintentional omission can be clearly shown by objective
evidence drawn from inspection of the original work papers, documents or
materials used in the preparation of the bid sought to be withdrawn. A
request to withdraw a bid must be made in writing to the public agency which
invited the proposals for the work prior to the award of the contract, but not
later than 72 hours after the opening of bids.bids, or for a longer
period as may be specified in the instructions to bidders provided prior to the
opening of bids.
If a request to withdraw a bid has been made in accordance
with the provisions of this section, action on the remaining bids shall be
considered, in accordance with North Carolina G.S. 143-129, as though said bid
had not been received. Notwithstanding the foregoing, such bid shall be deemed
to have been received for the purpose of complying with the requirements of
G.S. 143-132. Provided, however, in the eventIf the work or
purchase is relet for bids, under no circumstances shallmay
the bidder who has filed a request to withdraw be permitted to rebid the work.work
or purchase.
If a bidder files a request to withdraw his bid, the agency shall promptly hold a hearing thereon. The agency shall give to the withdrawing bidder reasonable notice of the time and place of any such hearing. The bidder, either in person or through counsel, may appear at the hearing and present any additional facts and arguments in support of his request to withdraw his bid. The agency shall issue a written ruling allowing or denying the request to withdraw within five days after the hearing. If the agency finds that the price bid was based upon a mistake of the type described in the first paragraph of this section, then the agency shall issue a ruling permitting the bidder to withdraw without forfeiture of the bidder's security. If the agency finds that the price bid was based upon a mistake not of the type described in the first paragraph of this section, then the agency shall issue a ruling denying the request to withdraw and requiring the forfeiture of the bidder's security. A denial by the agency of the request to withdraw a bid shall have the same effect as if an award had been made to the bidder and a refusal by the bidder to accept had been made, or as if there had been a refusal to enter into the contract, and the bidder's bid deposit or bid bond shall be forfeited.
In the event said ruling denies the request to withdraw the bid, the bidder shall have the right, within 20 days after receipt of said ruling, to contest the matter by the filing of a civil action in any court of competent jurisdiction of the State of North Carolina. The procedure shall be the same as in all civil actions except all issues of law and fact and every other issue shall be tried de novo by the judge without jury; provided that the matter may be referred in the instances and in the manner provided for by North Carolina G.S. 1A-1, Rule 53, as amended. Notwithstanding the foregoing, if the public agency involved is the Department of Administration, it may follow its normal rules and regulations with respect to contested matters, as opposed to following the administrative procedures set forth herein. If it is finally determined that the bidder did not have the right to withdraw his bid pursuant to the provisions of this section, the bidder's security shall be forfeited. Every bid bond or bid deposit given by a bidder to a public agency pursuant to G.S. 143-129 shall be conclusively presumed to have been given in accordance with this section, whether or not it be so drawn as to conform to this section. This section shall be conclusively presumed to have been written into every bid bond given pursuant to G.S. 143-129.
Neither the agency nor any elected or appointed official, employee, representative or agent of such agency shall incur any liability or surcharge, in the absence of fraud or collusion, by permitting the withdrawal of a bid pursuant to the provisions of this section.
No withdrawal of the bid which would result in the award of the contract on another bid of the same bidder, his partner, or to a corporation or business venture owned by or in which he has an interest shall be permitted. No bidder who is permitted to withdraw a bid shall supply any material or labor to, or perform any subcontract or work agreement for, any person to whom a contract or subcontract is awarded in the performance of the contract for which the withdrawn bid was submitted, without the prior written approval of the agency. Whoever violates the provisions of the foregoing sentence shall be guilty of a Class 1 misdemeanor."
SECTION 3. Article 8 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-129.8. Purchase of information technology goods and services.
(a) In recognition of the complex and innovative nature of information technology goods and services and of the desirability of a single point of responsibility for contracts that include combinations of purchase of goods, design, installation, training, operation, maintenance, and related services, a political subdivision of the State may contract for information technology, as defined in G.S. 147-33.81(2), using the procedure set forth in this section, in addition to or instead of any other procedure available under North Carolina law.
(b) Contracts for information technology may be entered into under a request for proposals procedure that satisfies the following minimum requirements:
(1) Notice of the request for proposals shall be given in accordance with G.S. 143-129(a).
(2) Contracts shall be awarded to the person or entity that submits the best overall proposal as determined by the awarding authority. Factors to be considered in awarding contracts shall be identified in the request for proposals.
(c) The awarding authority may use procurement methods set forth in G.S. 143-135.9 in developing and evaluating requests for proposals under this section. The awarding authority may negotiate with any proposer in order to obtain a final contract that best meets the needs of the awarding authority. Negotiations allowed under this section shall not alter the contract beyond the scope of the original request for proposals in a manner that: (i) deprives the proposers or potential proposers of a fair opportunity to compete for the contract; and (ii) would have resulted in the award of the contract to a different person or entity if the alterations had been included in the request for proposals.
(d) Proposals submitted under this section shall not be subject to public inspection until a contract is awarded."
SECTION 4. G.S. 160A-266 is amended by adding a new subsection to read:
"(d) A city may discard any personal property that: (i) is determined to have no value; (ii) remains unsold or unclaimed after the city has exhausted efforts to sell the property using any applicable procedure under this Article; or (iii) poses a potential threat to the public health or safety."
SECTION 5. G.S. 160A-270 is amended by adding a new subsection to read:
"(c) The council may conduct auctions of real or personal property electronically by authorizing the establishment of an electronic auction procedure or by authorizing the use of existing private or public electronic auction services. Notice of an electronic auction of property shall identify, in addition to the information required in subsections (a) and (b) of this section, the electronic address where information about the property to be sold can be found and the electronic address where electronic bids may be posted. All requirements of subsections (a) and (b) of this section apply to electronic auctions."
SECTION 6. G.S. 160A-274(b) reads as rewritten:
"(b) Any governmental unit
may, upon such terms and conditions as it deems wise, with or without
consideration, exchange with, lease to, lease from, sell to, or purchase
from, or enter into agreements regarding the joint use byfrom any
other governmental unit of any interest in real or personal
property that it may own.property."
SECTION 7. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 24th day of July, 2001.
s/ Beverly E. Perdue
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 8:40 a.m. this 2nd day of August, 2001