Brief ⁽¹⁾

SB 227 would provide for on-line procurement of goods, services, construction materials, or information services by the state. Under the bill, state agencies could use on-line bidding to obtain bids electronically for the purchase of goods and services if the appropriate administrator (either Director of Purchases or Secretary of Transportation) determines that electronic, on-line bidding would be more advantageous than other procurement methods. Procedures for on-line bidding would be prescribed by the Director of Purchases.

The bill sets out the following requirements for on-line bidding:

• •Solicitation for bids must designate an opening and closing date and time (closing date and time may be fixed or remain open, depending on the structure of the item being bid on-line).
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• •Acceptance of on-line electronic bids by the appropriate administrator must begin at the opening date and time, and must continue until the bid is officially closed.
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• •Bids must either be posted electronically and updated on a real-time basis or opened at the bid closing time.
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• •Bidders may be required to register before the opening date and time and to agree to any terms, conditions, or other requirements of the solicitation.
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• •Prequalification of bidders may be required and on-line bidding may be restricted to only prequalified bidders.

The bill allows municipalities to adopt procedures for the acceptance of on-line bids for goods and services similar to those set out for the state.

The bill also amends current law governing the sale of municipal bonds to allow for on-line sale of municipal bonds.

Background

The Senate Committee held hearings on SB 227, at which time representatives of Kirkpatrick Pettis, the Olathe School District, Gilmore and Bell, the State of Kansas Director of Purchases, the Association of General Contractors of Kansas, and the Kansas Contractors Association, Inc. testified on the bill. Several amendments were requested by conferees. The Senate Committee amended SB 227 in the following ways:

• •Added provisions allowing for on-line sale of municipal bonds. (Under current law this is not possible due to the requirement that bids be sealed and that a check be included with bids submitted.)
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• •Adopted amendments proposed by the Department of Administration, Division of Purchases, to clarify the authority of the Director of Purchases in on-line bidding.
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• •Added language giving authority to the Secretary of Transportation to conduct on-line bidding for goods and services used in construction and maintenance of roads and highways.
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The Senate Committee of the Whole amended the bill to remove the definition of "information technology," and to clarify that on-line bidding may be used for construction materials as opposed to actual construction.

The Division of the Budget reports that passage of SB 227 would not require additional resources for the Division of Purchases. However, there would be a cost resulting from the need to pay a third party service provider for the ability to undertake on-line competitive bidding.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi