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Regular Session, 2010
SENATE BILL NO. 367
BY SENATORS MICHOT AND JACKSON
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 public notice; to provide8
for an effective date; and to 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 allow only 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
C. Adequate public notice for the purchases of materials, supplies, or9
equipment by a political subdivision using a reverse auction shall be given as10
follows:11
(1) The advertisement or notice shall be published two times in a12
newspaper in the locality, the first advertisement to appear at least fifteen days13
before the opening date of the reverse auction. In addition to the newspaper14
advertisement, a political subdivision may also publish an advertisement by15
electronic media available to the general public.16
(2) The first publication of the advertisement shall not occur on a17
Saturday, Sunday or legal holiday.18
Section 2. R.S. 39:1554(E) is hereby amended and reenacted and Subpart B-1 of Part19
III of Chapter 17 of Subtitle III of Title 39 of the Louisiana Revised Statutes of 1950,20
comprised of R.S. 39:1598.1, and R.S. 39:1661(D) and 1671(H) are hereby enacted to read21
as follows:22
§1554. Application of this Chapter23
* * *24
E.(1) Political subdivisions authorized to adopt this Chapter. The25
procurement of supplies, services, major repairs, and construction by political26
subdivisions of this state shall be in accordance with the provisions of R.S. 38:218127
through 38:2316 Chapter 10 of Title 38 of the Louisiana Revised Statutes of28
1950, except that all political subdivisions are authorized to adopt all or any part of29 SB NO. 367
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this Chapter and its accompanying regulations.1
(2) Additionally, all political subdivisions which are not subject to this2
Chapter may adopt the provisions of R.S. 39:1598.1 and its accompanying3
regulations.4
* * *5
SUBPART B-1. CERTAIN AUCTION METHODS6
§1598.1. Reverse auction7
A.(1) Notwithstanding the provisions of Subpart B of this Part, with the8
approval of the state director of purchasing and the determination of the head9
of the using agency that the best interests of the state would be served and that10
electronic online bidding is more advantageous than other procurement11
methods provided in this Chapter, a reverse auction may be utilized for the12
acquisition of materials, supplies, services, products, or equipment.13
(2) For purposes of this Subpart, "reverse auction" means a competitive14
online solicitation process on the Internet for materials, supplies, services,15
products, or equipment in which vendors compete against each other online in16
real time in an open and interactive environment.17
B. Prior to the implementation of this Subpart, the state director of18
purchasing shall develop policies, procedures, and promulgate regulations, in19
accordance with the Administrative Procedure Act. Such policies and20
procedures may require that:21
(1) Vendors register before the opening date and time, and as part of the22
registration, require that the vendors agree to any terms and conditions and23
other requirements of the solicitation.24
(2) Vendors be prequalified prior to placing bids and allow only bidders25
who are prequalified to submit bids.26
(3) The solicitation shall designate an opening date and time and the27
closing date and time. The closing date and time may be fixed or remain open28
depending on the structure of the item being bid.29 SB NO. 367
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(4) At the opening date and time, the using agency shall begin accepting1
online bids and continue accepting bids until the bid is officially closed.2
Registered bidders shall be allowed to lower the price of their bid below the3
lowest bid posted on the Internet until the closing date and time.4
(5) Bidders' identities shall not be revealed during the bidding process;5
only the successively lower prices, ranks, scores, and related bid details shall be6
revealed.7
(6) All bids shall be posted electronically and updated on a real-time8
basis.9
(7) The using agency shall retain the right to cancel the solicitation if it10
determines that it is in the agency's or the state's best interest.11
(8) The using agency shall retain its existing authority to determine the12
criteria that will be used as a basis for making awards.13
C. Adequate public notice for the purchase of materials, supplies,14
services, or equipment using a reverse auction shall be given as follows:15
(1) The advertisement or notice shall be published one time in the official16
journal of the state at least twenty days before the opening date of the reverse17
auction.18
(2) In the case of any purchase to meet the needs of a single budget unit,19
the advertisement shall be published also in a newspaper of general circulation20
printed in the parish in which the budget unit is situated, or, if there is not a21
newspaper printed in the parish, in a newspaper printed in the nearest parish22
that has a general circulation in the parish in which the budget unit is situated.23
* * *24
§1661. Contract clauses; administration25
* * *26
D. Regulations may permit or require the inclusion in state contracts of27
clauses relative to reverse auctions pursuant to the implementation of the28
provisions of R.S. 39:1598.1.29 SB NO. 367
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§1671. Authority to resolve protested solicitations and awards1
* * *2
H. The state director of purchasing is hereby authorized to promulgate3
regulations relative to protests, in accordance with the Administrative4
Procedure Act, to implement the provisions of R.S. 39:1598.1.5
Section 3. This Act shall become effective on July 1, 2010; if vetoed by the governor6
and subsequently approved by the legislature, this Act shall become effective on July 1,7
2010, or on the day following such approval by the legislature, whichever is later.8
The original instrument was prepared by Jay Lueckel. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Nancy Vicknair.
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.
(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. SB NO. 367
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(8) The using agency retain its existing authority to determine the criteria that will be
used as a basis for making awards.
Proposed law requires that adequate public notice for purchases of materials, supplies, or
equipment by a political subdivision using a reverse auction be given as follows:
(1)The advertisement or notice shall be published twice in a newspaper in the locality,
the first advertisement to appear at least 15 days before the opening date of the
reverse auction. In addition to the newspaper advertisement, a political subdivision
may also publish an advertisement by electronic media available to the general
public.
(2)The first publication of the advertisement shall not occur on a Saturday, Sunday, or
legal holiday.
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 requires that adequate public notice for the purchase of materials, supplies,
services, or equipment by state agencies using a reverse auction be given as follows:
(1)The advertisement or notice shall be published in the official journal of the state at
least 20 days before the opening date of the reverse auction.
(2)In the case of any purchase to meet the needs of a single budget unit, the
advertisement shall be published also in a newspaper of general circulation printed
in the parish in which the budget unit is situated, or, if there is not a newspaper
printed in the parish, in a newspaper printed in the nearest parish that has a general
circulation in the parish in which the budget unit is situated.
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)) SB NO. 367
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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.
Senate Floor Amendments to engrossed bill.
1. Makes technical changes.
2. Provides publication requirements for advertising public notices for the
purchase of materials, supplies, or equipment by a political subdivision using
a reverse auction.
3. Provides publication requirements for advertising public notices for the
purchase of materials, supplies, services, or equipment by state agencies
using a reverse auction.