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Regular Session, 2010
SENATE BILL NO. 367
BY SENATOR MICHOT
PROCUREMENT CODE. Authorizes the use of reverse auctions by certain public entities.
(7/1/10)
AN ACT1
To amend and reenact R.S. 39:1554(E) and to enact Part IV-A of Chapter 10 of Title 38 of2
the Louisiana Revised Statutes of 1950, to be comprised of R.S. 38:2271, and3
Subpart B-1 of Part III of Chapter 17 of Subtitle III of Title 39 of the Louisiana4
Revised Statutes of 1950, comprised of R.S. 39:1598.1, and R.S. 39:1661(D) and5
1671(H), relative to purchasing by certain public entities; to authorize the use of6
reverse auctions by certain public entities for the purchase of certain materials,7
supplies, services, products, or equipment; to provide for an effective date; and to8
provide for related matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. Part IV-A of Chapter 10 of Title 38 of the Louisiana Revised Statutes of11
1950, to be comprised of R.S. 38:2271 is hereby enacted to read as follows:12
PART IV-A. PURCHASE OF MATERIALS, SUPPLIES, OR EQUIPMENT13
BY CERTAIN POLITICAL SUBDIVISIONS USING CERTAIN14
AUCTION METHODS15
§2271. Purchase of materials, supplies, or equipment by certain political16
subdivisions using certain auction methods17 SB NO. 367
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A.(1) The bidding provisions of this Chapter shall not apply when a1
political subdivision purchases materials, supplies, or equipment using a reverse2
auction as authorized by, and in the manner provided herein. A political3
subdivision may use reverse auction only with the determination by its4
procurement officer that the best interests of the political subdivision would be5
served and that electronic online bidding is more advantageous than other6
procurement methods provided in this Chapter.7
(2) For the purposes of this Part: (a) "political subdivision" shall mean8
any political subdivision of the state, including but not limited to any political9
subdivision as defined in Article VI, Section 44 of the Constitution of Louisiana.10
(b) "Reverse auction" means a competitive online solicitation process on11
the Internet for equipment, supplies, and other materials in which vendors12
compete against each other online in real time in an open and interactive13
environment.14
B. Prior to the use of reverse auction authorized by this Part, the political15
subdivision shall develop policies and procedures that may require that:16
(1) Vendors register before the opening date and time, and as part of the17
registration, require that the vendors agree to any terms and conditions and18
other requirements of the solicitation.19
(2) Vendors be prequalified prior to placing bids and only allow bidders20
who are prequalified to submit bids.21
(3) The solicitation shall designate an opening date and time and the22
closing date and time. The closing date and time may be fixed or remain open23
depending on the structure of the item being bid.24
(4) At the opening date and time, the using agency shall begin accepting25
online bids and continue accepting bids until the bid is officially closed.26
Registered bidders shall be allowed to lower the price of their bid below the27
lowest bid posted on the Internet until the closing date and time.28
(5) Bidders' identities shall not be revealed during the bidding process;29 SB NO. 367
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only the successively lower prices, ranks, scores, and related bid details shall be1
revealed.2
(6) All bids shall be posted electronically and updated on a real-time3
basis.4
(7) The using agency shall retain the right to cancel the solicitation if it5
determines that it is in the agency's or the state's best interest.6
(8) The using agency shall retain its existing authority to determine the7
criteria that will be used as a basis for making awards.8
Section 2. R.S. 39:1554(E) is hereby amended and reenacted and Subpart B-1 of Part9
III of Chapter 17 of Subtitle III of Title 39 of the Louisiana Revised Statutes of 1950,10
comprised of R.S. 39:1598.1, and R.S. 39:1661(D) and 1671(H) are hereby enacted to read11
as follows:12
§1554. Application of this Chapter13
* * *14
E.(1) Political subdivisions authorized to adopt this Chapter. The15
procurement of supplies, services, major repairs, and construction by political16
subdivisions of this state shall be in accordance with the provisions of R.S. 38:218117
through 38:2316, except that all political subdivisions are authorized to adopt all or18
any part of this Chapter and its accompanying regulations.19
(2) Additionally, all political subdivisions which are not subject to this20
Chapter may adopt the provisions of R.S. 39:1598.1 and its accompanying21
regulations.22
* * *23
SUBPART B-1. CERTAIN AUCTION METHODS24
§1598.1. Reverse auction25
A.(1) Notwithstanding the provisions of Subpart B of this Part, with the26
approval of the state director of purchasing and the determination of the head27
of the using agency that the best interests of the state would be served and that28
electronic online bidding is more advantageous than other procurement29 SB NO. 367
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methods provided in this Chapter, a reverse auction may be utilized for the1
acquisition of materials, supplies, services, products, or equipment.2
(2) For purposes of this Subpart, "reverse auction" means a competitive3
online solicitation process on the Internet for materials, supplies, services,4
products, or equipment in which vendors compete against each other online in5
real time in an open and interactive environment.6
B. Prior to the implementation of this Subpart, the state director of7
purchasing shall develop policies, procedures, and promulgate regulations, in8
accordance with the Administrative Procedure Act. Such policies and9
procedures may require that:10
(1) Vendors register before the opening date and time, and as part of the11
registration, require that the vendors agree to any terms and conditions and12
other requirements of the solicitation.13
(2) Vendors be prequalified prior to placing bids and only allow bidders14
who are prequalified to submit bids.15
(3) The solicitation shall designate an opening date and time and the16
closing date and time. The closing date and time may be fixed or remain open17
depending on the structure of the item being bid.18
(4) At the opening date and time, the using agency shall begin accepting19
online bids and continue accepting bids until the bid is officially closed.20
Registered bidders shall be allowed to lower the price of their bid below the21
lowest bid posted on the Internet until the closing date and time.22
(5) Bidders' identities shall not be revealed during the bidding process;23
only the successively lower prices, ranks, scores, and related bid details shall be24
revealed.25
(6) All bids shall be posted electronically and updated on a real-time26
basis.27
(7) The using agency shall retain the right to cancel the solicitation if it28
determines that it is in the agency's or the state's best interest.29 SB NO. 367
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(8) The using agency shall retain its existing authority to determine the1
criteria that will be used as a basis for making awards.2
* * *3
§1661. Contract clauses; administration4
* * *5
D. Regulations may permit or require the inclusion in state contracts of6
clauses relative to reverse auctions pursuant to the implementation of the7
provisions of R.S. 39:1598.1.8
§1671. Authority to resolve protested solicitations and awards9
* * *10
H. The state director of purchasing is hereby authorized to promulgate11
regulations relative to protests, in accordance with the Administrative12
Procedure Act, to implement the provisions of R.S. 39:1598.1.13
Section 3. This Act shall become effective on July 1, 2010; if vetoed by the governor14
and subsequently approved by the legislature, this Act shall become effective on July 1,15
2010, or on the day following such approval by the legislature, whichever is later.16
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Jay R. Lueckel.
DIGEST
Michot (SB 367)
Present law provides for the purchase of materials, supplies, services, products, and
equipment by public entities. Includes procedure for advertisement for, receipt of, and
opening of public bids.
Present law relative to the La. Public Bid Law, provides for procuring of materials, supplies,
or equipment by political subdivisions, among other public entities, through the lowest
advertised bid.
Proposed law authorizes the use of reverse auction by political subdivisions based on the
determination of the procurement officer of such entity that the best interest of that entity
would be served by using such electronic procurement method.
Defines "reverse auction" as a competitive online solicitation process on the Internet for
materials, supplies, services, products, or equipment in which vendors compete against each
other online in real time in an open and interactive environment.
Provides that in a reverse auction, the entity may require, among other things, that:
(1) Vendors register before the opening date and time. SB NO. 367
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(2) Vendors be prequalified prior to placing bids.
(3) The solicitation designate an opening date and time and the closing date and time.
(4)At the opening date and time, the using agency begin accepting online bids and
continue accepting bids until the bid is officially closed.
(5) Bidders' identities not be revealed during the bidding process.
(6)All bids be posted electronically and updated on a real-time basis.
(7) The using agency retains the right to cancel the solicitation if it determines that it is
in the agency's or the state's best interest.
(8) The using agency retain its existing authority to determine the criteria that will be
used as a basis for making awards.
Present law relative to the La. Procurement Code, provides for procurement by state
agencies of material, supplies, services, products, or equipment.
Proposed law provides that with the approval of the state director of state purchasing and the
determination of the head of the using agency that the best interests of the state would be
served and that electronic online bidding is more advantageous than other procurement
methods provided in the La. Procurement Code, a reverse auction may be utilized for the
acquisition of materials, supplies, services, products, or equipment.
Authorizes the state director of purchasing to promulgate regulations, in accordance with the
APA, prior to implementation of proposed law.
Proposed law also authorizes the state director of purchasing to promulgate regulations
relative to contract clauses and award protests necessary to implementation of reverse
auctions.
Proposed law further authorizes all political subdivisions not subject to the La. Procurement
Code to adopt proposed law and its accompanying regulations and to conduct reverse
auctions. Requires that such reverse auctions be conducted in the manner provided in the
La. Procurement Code.
Effective July 1, 2010.
(Amends R.S. 39:1554(E); adds R.S. 38:2271 and R.S. 39:1598.1, 1661(D) and 1671(H))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Finance to the original
bill.
1. Adds authorization for the use of reverse auctions by state agencies based on
the approval of the state director of purchasing and the determination of head
of the using agency that the best interests of the state would be served with
such procurement method.