Req. No. 5012 Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 STATE OF OKLAHOMA 1st Session of the 59th Legislature (202 3) HOUSE BILL 1775 By: Williams AS INTRODUCED An Act relating to state government; creating the Department of Central Services; making Division a separate and distinct agency; directing Department and Director to continue to exercise statutory powers, duties, and responsibilities; providing for succession to contractual rights and responsibilities; requiring Director to adopt and enforce certain rules and authorizing further rulemaking authority; authorizing execution of certain agreement; requiring consent of employees prior to transfer; providing certain protections relating to salary, leave, time earned, and benefits; requiring transfer of personnel to be coordinated with Office of Management and Enterprise Services; requiring payment of certain expenses; abolishing certain division within the Office of Management and Enterprise Services upon completion of transfer; directing certain coordination; providing for certain transfers; amending 74 O.S. 2021, Sections 61.2, 85.3, 85.5, and 62 O.S. 2021, Section 34 .3.1, which relate to Department of Central Services; modifying references to Department and Direc tor; 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 61.10 of Title 74, unless there is created a duplication in numbering, reads as follows: Req. No. 5012 Page 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 A. 1. There is hereby created the Department of Central Services. The Governor shall appoint a Director of Department of Central Services, by and with the advice and consent of t he Senate, who shall hold office at the pleasure of the Governor and shall continue to serve until his or her successor is duly appointed and is qualified. The salary of the Director of the Department of Central Services shall be set by the Legislature. 2. The Director of the Department of Central Services , with the approval of the Governor, shall employ and make the a ppointment of such experts and assistants as may be necessary in the performance of the Director's duties as required by law. No appointments to positions shall be made in excess of the positions authorized by act of the Legislature for the Office of Manag ement and Enterprise Services. 3. Beginning on the effective date of this act, the Department of Central Services shall cease to be part of or a division of the Office of Management and Enterprise and shall be deemed to be a separate and distinct agency, to be known as the Department of Central Services. The Department of Central Services and the Director of the Department of Central Services shall continue to exercise their statutory powers, duties, and contractual responsibilities. All records, property, equipment, assets, monies, financial interests, liabilities, matters pendi ng, and funds of the Department of Central Services as a Division of the Office of Req. No. 5012 Page 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Management and Enterprise Services shall be transferred to the Department of Central Services. 4. The Department shall succeed to any contractual rights or responsibilities incurred by the Department of Central Services Division of the Office of Management and Enterprise Services . 5. Rules promulgated by the Department of Central Services Division of the Office of Management and Enterprise Services that are in effect on the effective date of this act shall be i mmediately adopted and enforced by the Department and the Director of the Department and shall maintain the authority to further promulgate and enforce rules. 6. The Department and the Office of Management and Enterprise Services may enter into an agreement for t he transfer of personnel from the Office of Management and Enterprise Services to the Department. No employee shall be transferred to the Department except on the freely given written consent of the employee. All employees who are transferred to the Department shall not be required to accept a lesser grade or salary than present ly received. All employees shall retain leave, sick, and annual time earned, and any retirement and longevity benefits which have accrued during their tenure with the Office of Management and Enterprise Services. The transfer of personnel between the state agencies shall be coordinated with the Office of Management and Enterprise Services. Req. No. 5012 Page 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 7. The expenses incurred by the Department as a result of the transfer required by this subsection shall b e paid by the Office of Management and Enterprise Services. 8. The Department of Central Services Division within the Office of Management and Enterprise Services shall be abolished by the Office of Management and Enterprise Services after the transfer has been completed. 9. The Office of Management and En terprise Services shall coordinate the transfer of records, property, equipment, assets, funds, allotments, purchase orders, liabilities, outstanding financial obligations, or encumbrances provided for in this subsection. SECTION 2. AMENDATORY 74 O.S. 20 21, Section 61.2, is amended to read as follows: Section 61.2 Whenever the terms "Board of Affairs", "State Board of Public Affairs", "Board" when used in reference to the Board of Public Affairs, or "Office of Public Affairs ", or "Department of Central S ervices" appear in the Oklahoma Statutes they shall mean the Office of Management and Enterprise Services. Whenever the term "Director of Public Affairs " appears in the Oklahoma Statutes it shall mean the Director of the Office of Management and Enterpris e Services. Whenever the term "Director of Central Services" appears in the Oklahoma Statutes it shall mean the Req. No. 5012 Page 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Director of the Office of Management and Enterprise Services or designee. SECTION 3. AMENDATORY 74 O.S. 2021, Section 85.3, is amended to read as follows: Section 85.3 A. There is hereby created and established in the Office of Management and Enterprise Services Department of Central Services a Purchasing Division, the administrative he ad of which shall be the State Pu rchasing Director. B. The Director of the Office of Management an d Enterprise Services Department of Central Services shall hire the State Purchasing Director. The State Purchasing Director shall: 1. Have a thorough knowledge of office practices and b uying procedures in volume purchasing; and 2. Be a graduate of an a ccredited college or university with at least five (5) years ' experience in commercial or governmental purchasing, or, in lieu of such education, have at least ten (10) years' experience in commercial or governmental purchasing. C. The State Purchasing Di rector, with the approval of the Director of the Office of Management and Enterprise Services Department of Central Services , may employ such personnel as may be necessary to exercise author ity and perform duties under the Oklahoma Central Purchasing Act. D. All activities of any state agency, department, or institution relating to purchasing shall be under the direction of Req. No. 5012 Page 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 the Purchasing Division unless otherwise provided by the Oklahoma Central Purchasing Act. E. The Purchasing Division shall provide qu alified personnel to assist the purchasing activities of state agencies, departments, and institutions, as required by the Oklahoma Central Purchasing Act. F. Each state agency, department, and institution shall designate personnel to coordinate its purch asing functions with the Purchasing Division. G. The Purchasing Division may, if the needs of a state agency, department, or institution are such as to so require, employ, and establish a buyer within a state agency. The state agency shall pay all expenses incurred for any buyer required to be placed within its agency. H. Except as provided in Section 34.36 of Title 62 of the Oklahoma Statutes, no state agency subject to the Oklahoma Centr al Purchasing Act shall have or maintain a purchasing section with out the prior approval in writing of the Purchasing Division unless otherwise provided in the Oklahoma Central Purchasing Act nor shall such purchasing section perform purchasing functions f or another state agency. I. The Purchasing Division shall make ac quisitions from industries operated by the Department of Corrections pursuant to the provisions of Section 549.1 of Title 57 of the Oklahoma Statutes. J. None of the personnel authorized by this section shall: Req. No. 5012 Page 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1. Sell to or otherwise provide acquisitions to any state agency subject to the Oklahoma Central Purchasing Act; 2. Be employees, partners, associates, officers, or stockholders in or with any business entity that sells to or otherwise provides acquisitions to any state agency subject to the Oklahoma Central Purchasing Act; 3. Be employed in any of the positions authorized by this section if a spouse or child owns any stock in any business entity which sells to or otherwise provides acquisitions to any agency subject to the Oklahoma Central Purchas ing Act; 4. Be employed in any of the positions authorized by this section if a relative within the third degree of consanguinity or affinity sells to or otherwise provides acquisitions to any state agency subject to the Oklahoma Central Purchasing Act or is interested in any business entity which does so, except that such relative, excluding a spouse or child, may own Twenty -five Thousand Dollars ($25,000.00) worth or less, or one percent ( 1%) or less, whichever amount is the lesser amount, of the stock o f a corporation or any business entity which sells to or otherwise provides acquisitions to any state agency subject to the Oklahoma Central Purchasing Act; or 5. Violate applicable rules o f the Ethics Commission promulgated pursuant to Article XXIX of th e Oklahoma Constitution that relate to accepting gifts from a vendor or a vendor 's agent. Req. No. 5012 Page 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 SECTION 4. AMENDATORY 74 O.S. 2021, Section 85.5, is amended to read as follows: Section 85.5 A. Except as otherwise provided in this section, the State Purchasing Director, under the supervision of the Director of the Office of Management and Enterprise Services Department of Central Services, shall have sole and excl usive authority and responsibility for all acquisitions by state agencies. In order to carry out the powers and duties of the Chief Information Officer and the Information Services Division , the Chief Information Officer shall have sole and exclusive auth ority and responsibility for all acquisitions of information and telecommunications technology, equipment, software, products and related peripherals and services by state agencies. Public construction contracts are awarded pursuant to Title 61 of the Okl ahoma Statutes and are not subject to the Oklahoma Central Purchasing Act. B. Every state agency shall determine its own quantitative needs for acquisitions and the general class or nature of the acquisitions. The State Purchasing Director, after consult ation with the requisitioning state agency, shall have authority to determine the particular brand, model or other specific classification of each acquisition and to draft or invoke pursuant to the Oklahoma Central Purchasing Act specifications establishin g the requirements for all necessary contracts or purchase orders. Req. No. 5012 Page 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 C. The Director of the Office of Management and Enterprise Services Department of Central Services shall have authority an d responsibility to promulgate rules in connection with provisions of the Oklahoma Central Purchasing Act for: 1. The time, manner, authentication and form of making requisitions for acquisitions; 2. Inspection, analysis and testing of acquisitions or sa mples bidders submit prior to contract award; 3. The form and manner of s ubmission for bids or proposals a bidder submits and the manner of accepting and opening bids or proposals; 4. The conditions under which the Office of Management and Enterprise Services Department of Central Services shall require written contracts for a cquisitions, the conditions under which acquisitions may be made on an open account basis, and the conditions and manner of negotiating such contracts; 5. Obtaining acquisitions pro duced by state institutions; 6. Conditions under which any of the rules h erein authorized may be waived; 7. The amounts of and deposits on any bond or other surety required to be submitted with a bid or contract for the furnishing of acquisitions and the conditions under which such bond or other surety shall be required; Req. No. 5012 Page 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 8. The manner and conditions of delivery, which shall incl ude the designation of the common carrier of property to be used to transport acquisitions whenever a common carrier is used, an d the acceptance, or rejection, including check of quantities, of any acquisitions; 9. The form of any estimate, order or other information required in connection with an acquisition; 10. State agency acquisitions not exceeding the acquisition threshold amount requiring competitive bid to ensure competitiveness, fairness, comp liance with the Oklahoma Central Purchasing Act and Se ction 3001 et seq. of this title, which relates to the State Use Committee. The rules shall include separate provisions based on acquisition amounts as follows: a. state agencies shall make acquisition s not exceeding Twenty-five Thousand Dollars ($25,000. 00), provided the acquisition process is fair and reasonable and is conducted pursuant to rules authorized pursuant to this section, and b. state agencies with certified procurement officers and internal purchasing procedures found compliant by the State Purchasing Director may make acquisitions in excess of the fair and reasonable acquisition threshold amount provided for in this section and not exceeding Two Hundred Fifty Thousand Dollars Req. No. 5012 Page 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 ($250,000.00), pursuant to rules authorized by this section; 11. Training by the State Purchasing Director of state agency procurement officers; 12. Review and audit by the State Purchasing Dir ector of state agency acquisitions; 13. The conditions for increasing acq uisition limits for state agencies which have had a pr ior reduction in acquisition limit by the Director of the Office of Management and Enterprise Services Department of Central Ser vices; 14. Use of a state purchase card to make acquisitions; 15. Any other matter or practice which relates to the responsibilities of the State Purchasing Director; 16. Conditions for determination and authorization of acquisition threshold amounts of state agencies; 17. The form and manner of verification by suppliers tha t the supplier is eligible to do business in the State of Oklahoma and has obtained all necessary permits and licenses, pursuant to applicable provisions of law; and 18. Payment procedure rules for state agencies to adhere to regarding statewide contracts . D. The State Purchasing Director shall provide training for state agency procureme nt officials, and other procurement staff, and is authorized to require retraining of such procur ement personnel Req. No. 5012 Page 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 found not to be in compliance with provisions of the Oklah oma Central Purchasing Act or associated rules. The training may include any matters related to state procurement practices. State agency purchasing officials that demonstrate prof iciency shall be certified as "certified procurement officers " by the State Purchasing Director and shall be authorized to make acquisitions pursuant to provisions of the Oklahoma Central Purchasing Act and associated rules. The State Purchasing Director may assess a fee to state agencies for the training that does not exceed e ach state agency's pro rata share of the costs the State Purchasing Director incurs to provide the training. E. The State Purchasing Director shall review state agency acquisitions for the purposes of: 1. Ensuring state agency compliance with provisions of the Oklahoma Central Purchasing Act; 2. Ensuring state agency compliance with rul es promulgated by the Office of Management and Enterprise Services Department of Central Services pursuant to the Oklahoma Central Purchasing Act; 3. Ensuring state agenc y compliance with provisions of Section 3001 et seq. of this title pertaining to the State Use Committee; 4. Reporting any acquisition by any state agency found not to be in compliance with those sections or rules to the Director of the Office of Management and Enterprise Services Department of Central Services; Req. No. 5012 Page 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 5. A determination by the State Purchasing Director to reduce a state agency's acquisition authority amount when the state agency is found not to be in compliance with the Oklahoma Central Purchas ing Act or associated rules or requirements of the State Purchasing Director pursuant to this section; and 6. A determination by the State Purchas ing Director to increase a state agency's acquisition authority amount after the agency cures deficiencies in connection with a prior reduction in the authority amount by the State Purchasing Director. F. Based on written findings and when recommended by the State Purchasing Director, the Director of the Office of Management and Enterprise Services Department of Central Services may: 1. Transmit written findings by the State Purchasing Director to the State Auditor and Inspector for further investigation, indicating purchasing procedur es that do not conform to the Oklahoma Central Purchasing Act or associated ru les; or 2. Transmit to the Attorney General or the State Auditor and Inspector for further investigation a report made by the State Purchasing Director that the Director of the Office of Management and Enterprise Services Department of Central Services reasonably believes indicates that an action that constitutes a criminal violation pursuant to the Oklahoma Central Purchasing Act or other laws has been taken by any state agency, sta te agency official, bidder or supplier. Req. No. 5012 Page 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 G. 1. Pursuant to the requiremen ts of the Oklahoma Central Purchasing Act, the State Purchasing Director shall have authority to enter into any statewide, multistate or multigovernmental contract. The state entity designated by law, as spec ified in Section 1010.3 of Title 56 of the Okla homa Statutes, shall participate in the purchase of pharmaceuticals available through such multistate or multigovernmental contracts entered into by the State Purchasing Director. 2. Whenever it appears advan tageous to the state or to any state agency to purchase or otherwise acquire any acquisition which may be offered for sale by the United States government or any agency thereof, the State Purchasing Director may execute a contrac t for the acquisition with the federal government or federal agency and may also utilize contracts awarded by other governmental agencies including, but not limited to, agencies of the United States of America. 3. The State Purchasing Director may designa te, for use by state agencies, contracts described in this subsection and contracts awarded on behalf of one or more state agencies. 4. Prior to exercising the authority to cancel a contract, the State Purchasing Director may authorize renegotiation of an existing contract with an incumbent supplier for the purposes of obtainin g more favorable terms for the state. Req. No. 5012 Page 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 5. The State Purchasing Director shall have the authority to designate certain contracts for state agencies as statewide contracts and mandator y statewide contracts. In order to carry out the powers and duties of the Chief Information Officer and Information Services Division, the Chief Information Officer shall have the authority to designate certain information technology and telecommunication contracts as statewide con tracts and mandatory statewide contracts and ma y negotiate consolidation contracts, enterprise agreements and high technology system contracts in lieu of or in conjunction with competitive bidding procedures to reduce acquisition cost. 6. The State Purcha sing Director may publish such specifications relating to materials, supplies, equipment and services to be acquired for the state as may best promote competition and apprise potential suppliers of the type of product desired. H. 1. The State Purchasing Director may develop and test new contracting policies, procedures and innovations that hold potential for making state procurement more effective and efficient and identify, and make recommendations to the Legislature of, any appropriate changes in law. Such development and testing, proof of concept, pilot project or other similar test shall not be considered an acquisition subject to the Oklahoma Central Purchasing Act. Req. No. 5012 Page 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2. The State Purchasing Director is authorized to explore and investigate cost savin gs in energy, resource usage and maintenance contracts and to identify and negotiate contract solutions including, but not limited to, pilot projects to achieve cost savings for this state. I. The State Purchasing Director shall endeavor to satisfy state agencies in terms of cost, quality and timeline ss of the delivery of acquisitions by using bidders who have a record of successful past performance, promoting competition, minimizing administrative operating costs and conducting business with integrity, fairness and openness. J. The State Purchasing D irector shall undertake the following: 1. The use of electronic commerce pursuant to the Oklahoma Online Bidding Act for solicitation, notification and other purchasing processes; 2. Monitoring rules promulg ated pursuant to the Oklahoma Central Purchasing Act to ensure that the rules satisfy the interests of the state, are clear and succinct and encourage efficiency in purchasing processes; 3. A program to identify suppliers ' performance records; 4. Development of criteria for the use of sealed bid contracting procedures, negotiated contracting procedures, selection of types of contracts, postaward administration of purchase orders Req. No. 5012 Page 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 and contracts, addendums, termination of contracts and contract pricing; 5. Continual improvement in the quality of the per formance of the Purchasing Division through training programs, management seminars, development of benchmarks and key management indicators, and development of standard provisions, c lauses and forms; 6. The State Purchasing Director shall prescribe standa rdized contract forms and all other forms or certifications requisite or deemed necessary by the State Purchasing Director to effectuate the provisions of the Oklahoma Central Purcha sing Act and associated rules; 7. Development of programs to improve cust omer relations through training, improved communications and appointment of technical representatives; 8. Provide for public two -way communication between procurement officers and potential bidders who have q uestions regarding a request for proposal or in vitation to bid; and 9. Determine whether and to what extent information included in a bid or similar offer is confidential and reject all requests to disclose the information so de signated. K. The State Purchasing Director may utilize and authorize state agencies to utilize reverse auctions to obtain acquisitions. L. Prior to the award of a contract to a supplier, the State Purchasing Director shall verify, pursuant to applicable provisions Req. No. 5012 Page 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 of law, that the supplier is eligible to do business in this st ate by confirming registration with the Secretary of State and franchise tax payment status pursuant to Sections 1203 and 1204 of Title 68 of the Oklahoma Statutes. The provisions o f this subsection shall be applicable only if the contract amount is Two H undred Fifty Thousand Dollars ($250,000.00) or greater. M. On an annual basis, the State Purchasing Director shall transmit to the Governor, Speaker of the House of Representatives and President Pro Tempore o f the Senate a report documenting the savings realized by each agency through the application of best spend practices including the collection and tracking of spend data, strategic sourcing programs and implementation of managed and mandatory statewide con tracts and include in the report information regarding emergency acquisitions. N. The acquisition threshold amount applicable to an acquisition made pursuant to this act or associated rules shall not apply to state agency purcha ses; provided, the State Pu rchasing Director determines the agency has sub ject matter experts on staff having the specialized expertise to purchase goods or services, the agency possesses the necessary legal and procurement staff to procure and monitor the contracts and provided the Director of the Office of Management and Enter prise Services Department of Central Services shall certify that the proposed purchase does not conflict with consolidated statewide spend initiatives. Req. No. 5012 Page 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1. Nothing in this subsection shall give an agency authority to issue statewide, multis tate or multigovernmental contracts. 2. Agencies making purchases pursuant to this subsection shall: a. be responsible for contracts awarded pursuant to this subsection, which includes, but may not be limited to, contract management, protest costs, all co sts connected with or incurred as a result of the contract, including legal representation, b. comply with rules and policies of the Office of Management and Enterprise Services Department of Central Services, and c. report contracts issued pursuant to this subsection to the Office of Management and Enterprise Services, Central Purchasing Division Department of Central Services, on a quarterly basis. 3. Purchases made in accordance with this subsect ion shall be made pursuant to rules authorized by this section. O. The State Purchasing Director, with approval by the Director of the Office of Management and Enterprise Services Department of Central Services, is authorized to make use of any state laboratories for the tests and analyses authorized in this section wherever practicable and to use private laboratories or the laboratories of another gove rnment agency if it is impracticable to use state laboratories. The State Purchasing Director is further Req. No. 5012 Page 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 authorized to cooperate in test and analysis programs or agreements with other states or the United States government and to accept federal funds and funds donated by private endowments or foundations for the purpose of participation in such testing progr ams. SECTION 5. AMENDATORY 62 O.S. 2021, Section 34.3.1, is amended to read as follows: Section 34.3.1 A. The Department of Central Services, Office of Personnel Management, Oklahoma Stat e Employees Benefits Council and the State and Education Employees Group Insurance Board are consolidated into the Office of Management and Enterprise Services. The Director of the Office of Management and Enterprise Services shall assume all executive -level responsibilities for each agency and shall function as and possess the powers of the agency director for each consolidated agency as enumerated by existing statute. For the purposes of this section the term "consolidated agencies " shall mean the Department of Central Services, Office of Personnel Management, Oklahoma State Employees Benefits Council and the State and Education Employees Group Insurance Board. Any funds appropriated to, in the possession of or allocated to any of the consolidated agencies shall be deemed to be funds of the Office of Management and Enterprise Services. B. Upon request of the Direct or of the Office of Management and Enterprise Services, the personnel of the consolidated agencies shall deliver to the Office of Management and Enterprise Services Req. No. 5012 Page 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 all books, papers, records and property of the consolidated agencies. C. All functions, po wers, duties and obligations previously assigned to each of the consolidated agencies are hereby transferred to the Office of Management and Enterprise Services. D. All rules, regulations, acts, orders, determinations and decisions of the consolidated age ncies pertaining to the functions and powers herein transferred and assigned to the Office of Management and Enterprise Services, in force at the time of such transfer, assignment, assumption or devolution shall continue in force and effect as rules, regul ations, acts, orders, determinations and decisions of the consolidated agencies until duly modified or abrogated by the appropriate body or u ntil otherwise provided by law. SECTION 6. This act shall become effective November 1, 2023. 59-1-5012 LRB 01/11/23