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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
HOUSE BILL 3876 By: Boatman
AS INTRODUCED
An Act relating to state purchasing; defining terms;
authorizing promulgation of rules; determining size
standards for historically underutilized business;
providing for certif ication; providing for assistance
to certain businesses; authorizing mentor-protege
program; providing for planning an d reporting
requirements; providing for purchasing goals;
providing penalty; authorizing subcontra cting;
requiring good-faith compliance; providing for
codification; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.1 of Title 74, unless there
is created a duplication in numbering , reads as follows:
As used in this act:
1. "Goods" means supplies, materials, or equipment ;
2. "Historically underutilized business " means an entity with
its principal place of business in this state that is:
a. a corporation formed for the purpose of making a
profit in which fifty-one percent (51%) or more of all
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classes of the shares of stock or other equitable
securities are owned by one or more economically
disadvantaged persons who have a proportionate
interest and actively participate in the co rporation's
control, operation, and management ,
b. a sole proprietorship created for the purpose of
making a profit that is completely owned, operated,
and controlled by an economically disadvantaged
person,
c. a partnership formed for the purpose of m aking a
profit in which fifty-one (51%) percent or more of the
assets and interest in the partnership are owned by
one or more economically disadvantaged persons who
have a proportionate in terest and actively participate
in the partnership's control, operation, and
management,
d. a joint venture in which each entity in the venture is
a historically underutilized busine ss, or
e. a supplier contract between a historically
underutilized busines s and a prime contractor under
which the historically underut ilized business is
directly involved in the manufactu re or distribution
of the goods or otherwise warehouses and ships the
goods;
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3. "Economically disadvantaged person " means a person who:
a. is economically disadvantaged because of the person 's
identification as a member of a certain group,
including:
(1) Black Americans,
(2) Hispanic Americans,
(3) women,
(4) Asian Pacific Americans ,
(5) Native Americans, or
(6) veterans as defined by 38 U.S.C. , Section 101(2)
who have suffered at least a twenty percent (20%)
service-connected disability as defined by 38
U.S.C., Section 101(16), and
b has suffered the effects of discriminatory practices
or other similar insidious circumstance s over which
the person has no control; and
4. "Contract" includes an arrangement under which a state
agency receives professional or investment brokerage ser vices.
SECTION 2. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Sec tion 84.2 of Title 74, unless there
is created a duplication in numbering, reads as follows:
The Director of the Office of Management and E nterprise Services
shall promulgate rules to efficiently and effectively administer
this act. The rules shall provide goals for increasing the contract
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awards for the purchase of goods or services by state agencies to
businesses that qualify as historical ly underutilized businesses
because the businesses are owned or owned, operated, and controlled,
as applicable, wholl y or partly by one or more veterans , as defined
by 38 U.S.C., Section 101(2), who have a service-connected
disability as defined by 38 U.S. C., Section 101(16).
SECTION 3. NEW LAW A new section of law to be codifi ed
in the Oklahoma Statutes as Section 84.3 of Title 74, unless there
is created a duplication in number ing, reads as follows:
The Director of the Office of Ma nagement and Enterprise Services
shall establish size standards that a business may not exceed if it
is to be considered a historically underutilized business under this
act. In determining the size standards, the Director shall
determine the size at whic h a business should be considered
sufficiently large that the business does not significantly suf fer
from the effects of past discriminatory practices.
SECTION 4. NEW LAW A n ew section of law to be codifi ed
in the Oklahoma Statutes as Section 84.4 of Title 74, unless there
is created a duplication in numbering, reads as follows :
A. The Director of the Office of Management and Enterpri se
Services shall certify historically underutilized businesses.
B. As one of its certification pro cedures, the Director may:
1. Approve the certification program of one or more local
governments or nonprofit organizations in this state that certify
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historically underutilized businesses, minority business
enterprises, women's business enterprises, or d isadvantaged business
enterprises under substantially the same definition, to the extent
applicable, if the local government or nonprofit organization meets
or exceeds the standards establi shed by the Director; and
2. Certify a business that is certified by a local government
or by a nonprofit organization as a historically underutilized
business pursuant to this act.
C. To maximize the number of certified historically
underutilized businesses, the Director shall enter into agreements
with local governmen ts in this state that conduct certification
programs described by subsection B of this section and with
nonprofit organizations. The Director may terminate an agreement if
a local government or nonprofit organization fails to meet the
standards establishe d by the Director for certifying historically
underutilized businesses. The agreements shall take effect
immediately and:
1. Allow for automatic certification of businesses certified by
the local government or nonprofit o rganization;
2. Provide for the efficient updating of the Director's
database containing information about historically underutil ized
businesses and potential historically underutilized businesses; and
3. Provide for a method by which the Director may efficiently
communicate with business es certified by the local government or
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nonprofit organization and provide those businesses wit h information
about the state historically underutilized business program.
D. A local government or a nonprofit organization that
certifies historically underut ilized businesses, minority business
enterprises, women's business enterprises, or disadvantage d business
enterprises as defined in Section 1 of this act shall complete the
certification of an applicant o r provide an applicant with written
justification of the applicant's certification denial within the
period established by the Director in its rules for certification
activities.
E. A local government or a nonprofit organization t hat
certifies historically underutil ized businesses under subsection C
of this section or that conducts a certification program described
by and approved pursuant to subsection B of this section shall make
available to the public an online searchable database containing
information about historically underutilized businesses, m inority
business enterprises, women 's business enterprises, and
disadvantaged business enterprises certified by the loc al government
or nonprofit organization, including:
1. The name of the business;
2. The contact person or owner of the business;
3. The address and telephone number of the business;
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4. The type or category of business, including rel evant
capabilities of the business and the North American Industry
Classification System codes for the busines s; and
5. The expiration date of the business 's certification.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statute s as Section 84.5 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. The Director of the Office of Ma nagement and Enterprise
Services shall seek the advice of the Governor, Legislature, and
state agencies in identifying and developing opportunities for
historically underutilized businesses.
B. The Director shall offer historically underutilized
businesses assistance and training regarding state procurement
procedures.
C. The Director shall advise historically underutili zed
businesses of available state co ntracts and shall advise
historically underutilized bu sinesses to apply for registration on
the Director's master bidders list.
D. The Director shall send historically underutili zed
businesses an orientation package on certification or
recertification. The package shall include:
1. A certificate issued i n the historically underutilized
business's name;
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2. A description of the significance and value of
certification;
3. A list of state purchasing p ersonnel;
4. Information regarding elec tronic commerce opportunities; and
5. Additional information ab out the state procurement process.
E. A state agency with a budget that exceeds Ten Million
Dollars ($10,000,000.00) shall designate a staff member to serve as
the historically underutilized businesses coordinator for the agency
during the fiscal year. The procurement director may serve as the
coordinator. In agencies that employ a historicall y underutilized
businesses coordinator, the position of coor dinator, within the
agency's structure, shall be at least equal to the position of
procurement director . In addition to any other responsibilities,
the coordinator shall:
1. Coordinate training programs for the recruitment and
retention of historically u nderutilized busines ses;
2. Report required information to the Director; and
3. Match historically underutilized businesses with key staff
within the agency.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.6 of Title 74, unless there
is created a duplication in numbering, reads as follows:
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The Director of the Office of Management and Enterprise Services
shall encourage state agencies to use historically underutilized
businesses by:
1. Working with state agencies to establish a statewide policy
for increasing the use of historical ly underutilized businesses;
2. Assisting state agencies in seeking historically
underutilized businesses capable of supplying required goods or
services;
3. Assisting state agencies in identifying and advising
historically underutilized businesses on the types of goods and
services the agencies need; and
4. Assisting state agencies in increasing the amount of
business placed with historically underutil ized businesses.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.7 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. The Director of the Office of Managemen t and Enterprise
Services shall compile, in the most cost -efficient form, a director y
of businesses certified as historically underutilized businesses
under Section 4 of this act.
B. The Director, at least semiannually , shall update the
directory and provide access to the di rectory electronically or in
another form to each state agency.
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C. Depending on the needs of a state agency, the Director shall
provide access to the directory electronically or in another form.
D. The Director shall provide a copy of the directory to every
municipality in January and July of each year. On r equest, the
Director shall make the directory available to other local
governments and the public.
E. A state agency, including the Director, shall use the
directory in determinin g awards of state pu rchasing and public works
contracts.
SECTION 8. NEW LAW A new section of law to be codified
in the Oklahoma Statu tes as Section 84.8 of Title 74, unless there
is created a duplication in numbering, reads as follo ws:
A. The Director of the Office of Management and Enterpris e
Services shall design a mentor-protege program to foster long -term
relationships between prim e contractors and historically
underutilized businesses and to increase the ability of historically
underutilized businesses to contract with the state or to rec eive
subcontracts under a state contract. Each state agency with an
appropriation that exceeds Ten Million Dollars ($10,000,000.00)
shall implement the program designed by the Director.
B. Participation in the pr ogram shall be voluntary for both the
contractor and the histori cally underutilized business
subcontractor.
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SECTION 9. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.9 of Title 74, unless there
is created a duplicatio n in numbering, reads as follows:
A. The Director of the Office of Management and Enterprise
Services shall design a program of forums in which historically
underutilized businesses are invited by state agencies to deliver
technical and business presentat ions that demonstrate their
capability to do business with the agency to:
1. Senior managers and procurement person nel at state agencies
that acquire goods and ser vices of a type supplied by the
historically underutilized businesses; and
2. Contractors with the state who may be subcontract ing for
goods and services of a type supplied by the historically
underutilized businesses.
B. The forums shall be held at state agency offices.
C. Each state agency with a n appropriation that exce eds Ten
Million Dollars ($10,000,000.00) shall participate in the program by
sending senior managers and procurement personnel to atte nd relevant
presentations and by informing the agency 's contractors about
presentations that may be relevant to anticipate d subcontracting
opportunities.
D. Each state agency that has a historically underutilized
businesses coordinator shall:
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1. Design its own program and model the program to the extent
appropriate on the program dev eloped by the Director under this
section; and
2. Sponsor presentations b y historically underutilized
businesses at the agency.
E. The Director and each state agency that ha s a historically
underutilized businesses coordinator shall aggressivel y identify and
notify individual historically under utilized businesses regarding
opportunities to make presentations regarding the types of goods and
services supplied by the historica lly underutilized business and
shall advertise in appropriate trade pub lications that target
historically underutilized bus inesses regarding opportunities to
make presentations.
SECTION 10. NEW LAW A new section of law to be codifie d
in the Oklahoma Statutes as Section 84.10 of Title 74, unless there
is created a duplication in number ing, reads as follows:
A. The Director of the Office of Management and Enterprise
Services shall prepare a consolidated report that:
1. Includes the number and dollar amount of contracts awarded
and paid to historically underutilized businesses certified by the
Director;
2. Analyzes the relative level of opportunity f or historically
underutilized businesses for various categories of acquired goods
and services; and
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3. Tracks, by vendor identification number and, to the extent
allowed by federal law, by Social Security number, the graduation
rates for historically und erutilized businesses that grew to exceed
the size standards determined by the Director.
B. Each state agency shall send to the Director information
required by Section 11 of this act and other information required by
the Director for the preparation of the Director's report not later
than March 15 and September 15 of each year.
C. The Director shall base its report on the compilation and
analysis of reports received under subsection B of this section and
other information maintained or received by the Director.
D. The Director shall send to the presiding officer of each
chamber of the Legislature:
1. On May 15 of each year, a report on the previous six -month
period; and
2. On November 15 of each year, a repo rt on the preceding
fiscal year.
SECTION 11. NEW LAW A new section of law to be codified
in the Oklahoma Stat utes as Section 84.11 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. To ensure accuracy in reporting, a state agency shall
maintain and compile monthly information relating to the use by the
agency and each of its op erating divisions of historically
underutilized businesses, including information regarding
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subcontractors and suppliers req uired by subsection B of this
section.
B. A contractor or supplier awarded a contract by a state
agency shall report to the agency the identity of each historically
underutilized business to whom the contractor or supplier awarded a
subcontract for the pu rchase of goods or services.
C. Each state agency shall report to the Director of the Office
of Management and Enterprise Services the following information with
regard to the expenditure of funds:
1. The total dollar amount of purcha ses and payments mad e under
contracts awarded to historic ally underutilized businesses;
2. The number of businesses participating in any issuance of
state bonds by the agency;
3. The number of contracts awa rded to businesses with regard to
the agency's acquisition, construc tion, or equipping of a facility
or implementation of a program; and
4. The number of bids, proposals, or other applicable
expressions of interest made by historica lly underutilized
businesses with regard to the agency 's acquisition, construction, or
equipping of a facility or implementat ion of a program.
D. A state agency participating in a group purchasing program
shall send to the Director in the agency's report under Section 10
of this act a separate list of purchases from historic ally
underutilized businesses that are made through t he group purchasing
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program, including the dollar amount of each purchase allocated to
the reporting agency.
E. A state agency's report is a record of the ag ency's
purchases for which the agency selecte d the vendor. If th e vendor
was selected by the Director as part of its state contract program,
the Director shall include the purchase in the Director's report of
its own purchases unless the Director made a sole source purchase
for the agency pursuant to Section 85.44D1 of Title 74 of the
Oklahoma Statutes. The state agency for which the purchase was made
shall report the selection of the vendor on it s report as if the
agency selected the vendor when the agency drew specifications for
goods or services that are proprietary to one vendor.
SECTION 12. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.12 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. Each state agency shall have a strategic plan for increasing
the agency's use of historically underutilized businesses in
purchasing and public works contracting.
B. The plan shall include:
1. A policy or mission statement relating to increasing the use
of historically underutilized bu sinesses by the state agen cy;
2. Goals to be met by the agency in carrying out the policy or
mission; and
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3. Specific programs to be conducted by the agency to meet the
goals stated in the plan, including a specific program to encoura ge
contractors to use historically underuti lized businesses as partners
and subcontractors.
C. On request, the Director of the Office of Management and
Enterprise Services shall provide technical assistance to a state
agency that is preparing its plan.
D. The Director and the state auditor and inspector shall
cooperate to develop procedures providing for random periodic
monitoring of state agency compli ance with this section. The state
auditor shall report to the Director a state agency that is not
complying with this secti on. In determining whether a state agency
is making a good-faith effort to comply, the state auditor shall
consider whether the age ncy:
1. Has adopted rules pursuant to this act;
2. Has used the Director's directory under Section 7 of this
act and other resources to identify hi storically underutilized
businesses that are able and available to contract with the agency;
3. Made good-faith, timely efforts to contact identified
historically underutiliz ed businesses regarding contracting
opportunities;
4. Conducted its procuremen t program in accordance with the
good faith effort methodology ; and
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5. Established goals for contract ing with historically
underutilized businesses in each procurement category based on:
a. scheduled fiscal year expenditures, and
b. the availability of historically underutilized
businesses in each category as determined by r ules
adopted under Section 2 of this act.
E. In conducting an audit of an agency's compliance with this
section or an agency 's making of a good-faith effort to implement
the plan adopted under this section, the state auditor and inspector
shall consider the success or fail ure of the agency to contract with
historically underutilized businesses in accordance with the
agency's goals.
F. If the state auditor and inspector reports to the Director
that a state agency is not complying with this section, the Director
shall assist the agency i n complying.
SECTION 13. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.13 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. Each state agency shall prepare a report for each fiscal
year documenting progress under its plan to increase the use of
historically underutilize d businesses.
B. The Director of the Office of Management an d Enterprise
Services shall develop a standard form for the report.
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C. The state agency shall file the report with the Governor,
Lieutenant Governor, the Speaker of the House of Representatives,
and President Pro Tempore of the Senate not later than December 31
of each year.
SECTION 14. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.14 of Title 74, unless there
is created a duplication in numbering, reads as follows:
The Director of the Office of Management and Enterprise
Services, in cooperation with each state agency reporting u nder this
act, shall categorize each historically underutilized business
included in a report under this subch apter by sex, race, and
ethnicity and by whether the business qualifies as a historicall y
underutilized business because it is owned or owned, ope rated, and
controlled, as applicable, wholly or partly by one or more veterans
as defined by 38 U.S.C., Section 101(2) who have suffered at least a
twenty percent (20%) service-connected disability as defined by 38
U.S.C., Section 101(16).
SECTION 15. NEW LAW A new section of law to be codified
in the Oklahoma Stat utes as Section 84.15 of Title 74, unless there
is created a duplication in numbering, reads as follows:
Before October 15 of each year, the Director of the Office of
Management and Enterprise Services shall report to the Governor, the
Speaker of the Oklahoma House of Representatives, and the President
Pro Tempore of the Senate on the education and training efforts that
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the Director has made toward historically underutilized businesses.
The report shall include the following as related to historically
underutilized businesses:
1. The Director's vision, mission, and philosophy;
2. Marketing materials and other educational materials
distributed by the Director;
3. The Director's policy regarding education, outreach, and
dissemination of information;
4. Goals that the Director has attained during the fiscal year;
5. The Director's goals, objectives, and expected outc ome
measures for each outreach and education al event; and
6. The Director's planned future initiatives on education and
outreach.
SECTION 16. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.16 of Title 74, unless there
is created a duplication in numbering , reads as follows:
A. Each state agency shall include as part of its legislative
appropriations request a det ailed report for consideration by the
budget committees of the Legislature that show s the extent to which
the agency complied with this act and rules promulgated by the
Director of the Office of Management and Enterprise Services during
the two (2) calendar years preceding the calendar year in which the
request is submitted. To the extent th e state agency did not
comply, the report shall demonstrate the reasons for that fact. The
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extent to which a state agency complies with this act is considered
a key performance measure for purposes of the appropriations
process.
B. The report shall include:
1. The agency's goals established under Section 12 of this act
for contracting with historically underutilized businesses during
the two (2) calendar years preceding the calendar year in which the
request is submitted;
2. A statement regarding whether the goals established under
Section 12 of this act were met during the two (2) calendar years
preceding the calendar year in which the reques t is submitted; and
3. If the goals established under Section 12 of this act were
not met during the two (2) calendar years preceding the calendar
year in which the requ est is submitted:
a. a statement of the percentage by which the agency 's
actual use of historically underutilized businesses
deviated from the agency's goals, and
b. an explanation of why the goals were not met.
SECTION 17. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.17 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A state agency shall make a good-faith effort to increase the
contract awards for the purchase o f goods or services that the
agency expects to make during a fiscal year to historical ly
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underutilized businesses based on rules adopted by the Director of
the Office of Management and Enterprise Ser vices.
SECTION 18. NEW LAW A new s ection of law to be codified
in the Oklahoma Statutes as Section 84.18 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A state agency that contracts for a constru ction project shall
make a good-faith effort to increase th e construction contract
awards that the agency expects to make during a fiscal year t o
historically underutilized businesses based on rules adopted by the
Director of the Office of Management and Enterprise Services.
SECTION 19. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.19 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. Not later than the 60th day of its fiscal year, a state
agency shall:
1. Estimate the total value of contract awards the agency
expects to make for that fiscal year that a re subject to Section 17
of this act; and
2. Shall estimate the total value of contract awards the agenc y
expects to make for that fiscal year .
B. The state agency may r evise an estimate as new information
requires.
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SECTION 20. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.20 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A person who:
1. Intentionally applies as a historically underutilized
business for an award of a purchasing contract or public works
contract under this subtitle; and
2. Knows the person is not a historically underutilized
business;
shall be guilty of a felony.
SECTION 21. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.21 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. This section applies to all contracts entere d into by a
state agency with an expected value of One Hundred Thousand Dollars
($100,000.00) or more, including:
1. Contracts for the acquisition of a good or service; and
2. Contracts for or related to the construction of a public
building, road, or other public work.
B. This section applies to the contract without regard to:
1. Whether the contract is otherwise subject to this subtitle;
or
2. The source of funds for the contract, except that to the
extent federal funds are used to pay for the contr act, this
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subchapter does not apply if federal law prohibits the application
of this act in relation to the exp enditure of federal funds.
SECTION 22. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.22 of Title 74, unless there
is created a duplication in numbering, reads as f ollows:
A. Each state agency tha t considers entering into a contract
with an expected value of One Hundred Thousand Dollars ( $100,000.00)
or more shall, before the agency solici ts bids, proposals, offers,
or other applicable expressions of interest for th e contract,
determine whether the re will be subcontracting opportunities under
the contract. If the state ag ency determines that there is that
probability, the agency shall requ ire that each bid, proposal,
offer, or other applicable expression of interest for the contract
include a historically underutilized business subcontracting plan.
B. When a state agency requires a historically underutilized
business subcontracting plan un der subsection A of this section, a
bid, proposal, offer, or other applicable expression of interest for
the contract must contain a plan to be considered respon sive.
SECTION 23. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 84.23 of Title 74, unless there
is created a duplica tion in numbering, reads as follo ws:
A. When a state agency requires a historic ally underutilized
business subcontracting plan under Section 22 of this act, the
awarded contract shall contain, as a provision of the contract that
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must be fulfilled, the pla n that the contractor submitted i n its
bid, proposal, offer, or other applicable expression of interest for
the contract. The contractor shall make good -faith efforts to
implement the plan. A contractor 's participation in a mentor -
protege program under S ection 8 of this act and submission of a
protege as a subcontractor in the contr actor's historically
underutilized business subcontracting plan constitutes a good -faith
effort under this section for the particular area of the
subcontracting plan involving the protege.
B. To the extent that subcontracts are not contracted for as
originally submitted in the historically underutilized business
subcontracting plan, the contractor sha ll report to the state agency
all the circumstances that explain that fact and describe the good-
faith efforts made to find and subcontract with another hist orically
underutilized business.
C. The state agency shall audit the contractor 's compliance
with the historically underutilized business subcontracting plan.
In determining whether the contractor made the required good-faith
effort, the agency may not consider the success or failure of the
contractor to subcontract with historically underutilized bus inesses
in any specific quantity. The agency 's determination is restricted
to considering factors indicating good faith.
D. If a determination is made th at the contractor failed to
implement the plan in good faith, the agency, in addition to any
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other remedies, may bar the contractor from further contracting
opportunities with the agency.
SECTION 24. This act shall become effective November 1, 2022.
58-2-8877 LRB 01/14/22