2013 End of Session Wrap Up: Procurement Legislation

This post summarizes the status of procurement related bills that MACo either considered or took a position on.

American Manufactured Goods: HB 191/ SB 47, as introduced, would have expanded the “Buy American Steel” procurement requirements to include American manufactured goods. MACo opposed the bill stating that it would add both cost and complexity to a wide range of public procurements, undermining the most efficient use of public funds. Although there were nominal exemptions to the requirement, they were unreasonably stringent. Under the bill, the price of a qualifying product would need to exceed the cost of an otherwise comparable product by 20% to 30% before being considered unreasonable.  As amended, the bill mirrors the statute for “Buy American Uniforms” and would apply more reasonable criteria to determine unreasonable amount, reasonably available, and substantially less.

Final Status:  Both bills passed the General Assembly with amendments offered by MACo. MACo dropped its opposition to the bill as amended.

Contract Retainage Amount: HB 293 / SB 140 would reduce the retainage amount a local government would be able to withhold on a construction contract to 5% for the life of the contract. Under current law, a local government can withhold no more than 10% during the first half of a contract, dropping to no more than 5% for the second half of the contract. MACo opposed this legislation stating that local governments do not have the same practical bargaining power as the State, so this “one size fits all” approach to match state requirements is inappropriate.  In addition, most local governments do not have the same overall presence in the marketplace to otherwise influence performance of private contractors, making the presence of sufficient retainage an essential protection for taxpayer investments.

Final Status:  Both bills passed the General Assembly with no amendments.

Prevailing Wage Study: As introduced, HB 1098 / SB 290 would have lowered the State funding threshold for which prevailing wage would apply to a local public work project from 50 to 25%. As amended by the House, HB 1098 would require prevailing wage rates to be paid for a local project receiving any amount of State funds. MACo opposed the bill in this posture stating that this “one size fits all” approach would significantly undermine a local government’s ability to fund and manage its capital budget, especially those smaller in size and in more rural areas of the state. As amended by the Senate, both HB 1098 and SB 290 establish a task force to examine the prevailing wage law and how it applies to various aspects of school construction projects.

Final Status:  HB 1098 passed the General Assembly with amendments worked on by MACo to change the bill to a task force to examine the applicability of the prevailing wage law. MACo dropped its opposition to the bill as amended.  SB 290 died on the Senate floor.

 

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