REPRESENTATIVES Raga, DeWine, Husted, Seitz, Willamowski, Calvert, Damschroder, Core, Lendrum, Hollister, Roman, Webster, D. Miller, Jolivette, Brinkman, Britton, Boccieri, Buehrer

To amend sections 125.01, 125.07, 125.08, 125.10,

1

125.11, 307.90, 505.103, and 717.21 and to enact

2

sections 9.314 and 125.072 of the Revised Code to

3

permit the Department of Administrative Services

4

and political subdivisions to purchase supplies or

5

services through a competitive reverse auction

6

process via the Internet and to make changes in

7

the notice required when the Department purchases

8

supplies or services by competitive selection.

9

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 125.01, 125.07, 125.08, 125.10,	10
125.11, 307.90, 505.103, and 717.21 be amended and sections 9.314	11
and 125.072 of the Revised Code be enacted to read as follows:	12

Sec. 9.314.  (A) As used in this section:

13

(1) "Contracting authority" has the same meaning as in	14
section 307.92 of the Revised Code.	15

(2) "Internet" means the international computer network of	16
both federal and nonfederal interoperable packet switched data	17
networks, including the graphical subnetwork called the world wide	18
web.	19

(3) "Political subdivision" means a municipal corporation,	20
township, county, school district, or other body corporate and	21
politic responsible for governmental activities only in geographic	22
areas smaller than that of the state and also includes a	23
contracting authority.	24

(4) "Reverse auction" means a purchasing process in which	25
offerors submit proposals in competing to sell supplies or	26
services in an open environment via the internet.	27

(5) "Services" means the furnishing of labor, time, or	28
effort by a person, not involving the delivery of a specific end	29
product other than a report which, if provided, is merely	30
incidental to the required performance. "Services" does not	31
include services furnished pursuant to employment agreements or	32
collective bargaining agreements.	33

(6) "Supplies" means all property, including, but not	34
limited to, equipment, materials, other tangible assets, and	35
insurance, but excluding real property or interests in real	36
property.	37

(B) Whenever any political subdivision that is required by	38
law to purchase services or supplies by competitive sealed bidding	39
or competitive sealed proposals determines that the use of a	40
reverse auction is advantageous to the political subdivision, the	41
political subdivision, in accordance with this section and rules	42
the political subdivision shall adopt, may purchase services or	43
supplies by reverse auction.	44

(C) A political subdivision shall solicit proposals through	45
a request for proposals. The request for proposals shall state	46
the relative importance of price and other evaluation factors.	47
The political subdivision shall give notice of the request for	48
proposals in accordance with the rules it adopts.	49

(D) As provided in the request for proposals and in the	50
rules a political subdivision adopts, and to ensure full	51
understanding of and responsiveness to solicitation requirements,	52
the political subdivision may conduct discussions with responsible	53
offerors who submit proposals determined to be reasonably	54
susceptible of being selected for award. The political	55
subdivision shall accord offerors fair and equal treatment with	56
respect to any opportunity for discussion regarding any	57
clarification, correction, or revision of their proposals.	58

(E) A political subdivision may award a contract to the	59
offeror whose proposal the political subdivision determines to be	60
the most advantageous to the political subdivision, taking into	61
consideration factors such as price and the evaluation criteria	62
set forth in the request for proposals. The contract file shall	63
contain the basis on which the award is made.	64

(F) The rules that a political subdivision adopts under this	65
section may require the provision of a performance bond, or	66
another similar form of financial security, in the amount and in	67
the form specified in the rules.	68

Sec. 125.01.  As used in this chapter:

69

(A) "Order" means a copy of a contract or a statement of the	70
nature of a contemplated expenditure, a description of the	71
property or supplies to be purchased or service to be performed,	72
other than a service performed by officers and regular employees	73
of the state, and per diem of the national guard, and the total	74
sum of the expenditure to be made therefor, if the sum is fixed	75
and ascertained, otherwise the estimated sum thereof, and an	76
authorization to pay for the contemplated expenditure, signed by	77
the person instructed and authorized to pay upon receipt of a	78
proper invoice.	79

(B) "Invoice" means an itemized listing showing delivery of	80
the supplies or performance of the service described in the order,	81
and the date of the purchase or rendering of the service, or an	82
itemization of the things done, material supplied, or labor	83
furnished, and the sum due pursuant to the contract or obligation.	84

(C) "Products" means materials, manufacturer's supplies,	85
merchandise, goods, wares, and foodstuffs.	86

(D) "Produced" means the manufacturing, processing, mining,	87
developing, and making of a thing into a new article with a	88
distinct character in use through the application of input, within	89
the state, of Ohio products, labor, skill, or other services.	90
"Produced" does not include the mere assembling or putting	91
together of non-Ohio products or materials.	92

(E) "Ohio products" means products whichthat are mined,	93
excavated, produced, manufactured, raised, or grown in the state	94
by a person where the input of Ohio products, labor, skill, or	95
other services constitutes no less than twenty-five per cent of	96
the manufactured cost. With respect to mined products, such	97
products shall be mined or excavated in Ohiothis state.	98

(F) "Purchase" means to buy, rent, lease, lease purchase, or	99
otherwise acquire supplies or services. "Purchase" also includes	100
all functions that pertain to the obtaining of supplies or	101
services, including description of requirements, selection and	102
solicitation of sources, preparation and award of contracts, all	103
phases of contract administration, and receipt and acceptance of	104
the supplies and services and payment thereforfor them.	105

(G) "Services" means the furnishing of labor, time, or	106
effort by a person, not involving the delivery of a specific end	107
product other than a report which, if provided, is merely	108
incidental to the required performance. "Services" does not	109
include services furnished pursuant to employment agreements or	110
collective bargaining agreements.	111

(H) "Supplies" means all property, including, but not	112
limited to, equipment, materials, insurance, and other tangible	113
assets, and insurance, but excluding landreal property or a	114
permanentan interest in landreal property.	115

(I) "Competitive selection" means eitherany of the	116
following procedures for making purchases:	117

(1) Competitive sealed bidding under section 125.07 of the	118
Revised Code;	119

(2) Competitive sealed proposals under section 125.071 of	120
the Revised Code;	121

(3) Reverse auctions under section 125.072 of the Revised	122
Code.	123

Sec. 125.07.  The department of administrative services, in	124
making a purchase by competitive selection pursuant to division	125
(B) of section 125.05 of the Revised Code, shall give notice in	126
the following manner:	127

(A) The department shall advertise suchthe intended	128
purchases by notice sentthat is posted by mail or electronic	129
means toand that is for the benefit of competing persons	130
producing or dealing in the supplies or services to be purchased,	131
including, but not limited to, the persons whose names appear on	132
the appropriate list provided for in section 125.08 of the Revised	133
Code. The notice may be in the form of the bid or proposal	134
document or of a listing in a periodic bulletin, or in any other	135
form the director of administrative services considers appropriate	136
to sufficiently notify qualified competing persons of the intended	137
purchasepurchases.	138

(B) SuchThe notice required under division (A) of this	139
section shall include the time and place where bids or proposals	140
will be accepted and opened, the conditions under which bids or	141
proposals will be received, the terms of the proposed purchase	142
purchases, and an itemized list of the supplies or services to be	143
purchased and the estimated quantities or amounts thereofof them.	144

(C) The mailingposting of such noticesthe notice required	145
under division (A) of this section shall be completed as follows:	146

(1) At least fifteen calendar days prior to the scheduled	147
opening date, for competitive sealed proposals and competitive	148
sealed bids;	149

(2) For printing contracts, awithin the number of days	150
determined by the director,determines preceding the day when such	151
the bids or proposals will be opened.	152

(D) The department shall also shall maintain, in a public	153
place in its office, a bulletin board upon which it shall post and	154
maintain a copy of suchthe notice required under division (A) of	155
this section for at least the number of days listed inthe	156
director determines under division (C) of this section, or, for	157
printing contracts, a number of days determined by the director,	158
preceding the day of the opening of suchthe bids or proposals.	159
The failure to so additionally post such noticesthe notice shall	160
invalidate all proceedings had and any contract entered into	161
pursuant to suchthe proceedings.	162

Sec. 125.072.  (A) As used in this section:

163

(1) "Internet" means the international computer network of	164
both federal and nonfederal interoperable packet switched data	165
networks, including the graphical subnetwork called the world wide	166
web.	167

(2) "Reverse auction" means a purchasing process in which	168
offerors submit bids or proposals in competing to sell services or	169
supplies in an open environment via the internet.	170

(B) Whenever the director of administrative services	171
determines that the use of a reverse auction is advantageous to	172
the state, the director, in accordance with rules the director	173
shall adopt, may purchase services or supplies by reverse auction.	174

(C) The director, by rule, may authorize a state agency that	175
is authorized to purchase services or supplies directly to	176
purchase them by reverse auction in the same manner as this	177
section and the rules adopted under this section authorize the	178
director to do so.	179

Sec. 125.08.  (A) The department of administrative services	180
may divide the state into purchasing districts wherein supplies or	181
services are to be delivered and shall describe suchthose	182
districts on all applications for the notification list provided	183
for in this section.	184

Any person may have that person's name and address, or the	185
name and address of an agent, placed on the competitive selection	186
notification list of the department of administrative services by	187
sending to the department the person's name and address, together	188
with a list of the supplies or services described in the manner	189
prescribed by the department produced or dealt in by the person	190
with a request for such listing, a list of the districts in which	191
the person desires to participate, and suchall other information	192
as the director of administrative services may prescribe. Whenever	193
suchany name and address together with a list of the supplies or	194
services produced or dealt in is so listed, the department shall	195
sendpost notice, as provided in division (A) of section 125.07 of	196
the Revised Code, to thosefor the benefit of the persons listed	197
on the notification list that are qualified Ohio business	198
enterprises, which shall include Ohio penal industries as defined	199
by rule of the director of administrative services, or have a	200
significant Ohio presence in this state's economy, except that, in	201
those circumstances in which the director considers it in the best	202
interest of this state, the director shall post notice shall be	203
sent to,as provided in division (A) of section 125.07 of the	204
Revised Code, for the benefit of all persons listed on the	205
notification list. The department need only provide competitive	206
selection documents for a proposed contract to persons who	207
specifically request suchthe documents. The	208

The director may remove a person from the notification list	209
and place the person on an inactive list if the person fails to	210
respond to any notices of proposed purchases that appear in four	211
consecutive bulletins or other forms of notification that list	212
suchthose notices. Upon written request to the director by the	213
person so removed, the director may return the person to the	214
notification list if the person provides sufficient evidence	215
regarding intent to offer bids or proposals to the state. The	216
director shall not remove any person from the list without notice	217
to suchthe person. The notice may be a part of the notices of	218
proposed purchase.	219

(B) Any person who is certified by the equal employment	220
opportunity coordinator of the department of administrative	221
services in accordance with the rules adopted under division	222
(B)(1) of section 123.151 of the Revised Code as a minority	223
business enterprise may have that person's name placed on a	224
special minority business enterprise notification list to be used	225
in connection with contracts awarded under section 125.081 of the	226
Revised Code. The minority business enterprise notification list	227
shall be used for bidding on contracts set aside for minority	228
business enterprises only. In all other respects, the list shall	229
be maintained and used in the same manner and according to the	230
same procedures as the notification list provided for under	231
division (A) of this section, except that a firm shall not be	232
removed from the list unless the coordinator determines that the	233
firm is no longer a minority business enterprise. A minority	234
business enterprise may have its name placed on both the	235
notification lists provided for in this section.	236

(C) The director of administrative services may require an	237
annual registration fee for the listings provided for in division	238
(A) or (B) of this section. This fee shall not be more than ten	239
dollars. The department may charge a fee for any compilation of	240
descriptions of supplies or services. This fee shall be	241
reasonable and shall not exceed the cost required to maintain the	242
notification lists and provide for the distribution of the	243
proposed purchase to the persons whose names appear on the lists.	244

Sec. 125.10. (A) The department of administrative services	245
may require that all competitive sealed bids and, competitive	246
sealed proposals,and bids or proposals received in a reverse	247
auction be accompanied by a performance bond or other cash surety	248
acceptable to the director of administrative services, in suchthe	249
sum and with suchthe sureties as it prescribes, payable to the	250
state, and conditioned that the person submitting the bid or	251
proposal, if that person's bid or proposal is accepted, will	252
faithfully execute the terms of the contract and promptly make	253
deliveries of the supplies or equipment, or contracts of	254
insurance, purchased. A	255

(B)A sealed copy of each competitive sealed bid or	256
competitive sealed proposal shall be filed with the department	257
prior to the time specified in the notice for opening of the bids	258
or proposals. All competitive sealed bids and competitive sealed	259
proposals shall be publicly opened in the office of the department	260
at the time specified in the notice. A representative of the	261
auditor of state shall be present at the opening of all	262
competitive sealed bids and competitive sealed proposals, shall	263
certify the opening of each competitive sealed bid and competitive	264
sealed proposal, and no competitive sealed bid or competitive	265
sealed proposal shall be considered valid unless it is so	266
certified.	267

Sec. 125.11.  (A) Subject to division (B) of this section,	268
contracts required to be awarded pursuant to competitive sealed	269
bidding, including such contracts awarded under section 125.081 of	270
the Revised Code, shall be awarded to the lowest responsive and	271
responsible bidder on each item in accordance with section 9.312	272
of the Revised Code. When the contract is for meat products as	273
defined in section 918.01 of the Revised Code or poultry products	274
as defined in section 918.21 of the Revised Code, only those bids	275
received from vendors offering products from establishments on the	276
current list of meat and poultry vendors established and	277
maintained by the director of administrative services under	278
section 125.17 of the Revised Code shall be eligible for	279
acceptance. The department of administrative services may accept	280
or reject any or all bids in whole or by items, except that when	281
the contract is for services or suppliesproducts available from a	282
qualified nonprofit agency pursuant to sections 4115.31 to 4115.35	283
of the Revised Code, the contract shall be awarded to that agency.	284

(B) Prior to awarding a contract under division (A) of this	285
section, the department of administrative services or the state	286
agency responsible for evaluating a contract for the purchase of	287
goodsproducts shall evaluate the bids received according to the	288
criteria and procedures established pursuant to divisions (C)(1)	289
and (2) of section 125.09 of the Revised Code for determining if a	290
product is produced or mined in the United States and if a product	291
is produced or mined inan Ohio product. The department or other	292
state agency shall first remove bids that offer suppliesproducts	293
that have not been or that will not be produced or mined in the	294
United States. From among the remaining bids, the department or	295
other state agency shall select the lowest responsive and	296
responsible bid, in accordance with section 9.312 of the Revised	297
Code, from among the bids that offer goodsproducts that have been	298
produced or mined inare Ohio products where sufficient	299
competition can be generated within Ohiothis state to ensure that	300
compliance with these requirements will not result in an excessive	301
price for the product or acquiring a disproportionately inferior	302
product. If there are two or more qualified bids that offer goods	303
which have been produced or mined inproducts that are Ohio	304
products, it shall be deemed that there is sufficient competition	305
to prevent an excessive price for the product or the acquiring of	306
a disproportionately inferior product.	307

(C) Division (B) of this section applies to contracts for	308
which competitive bidding is waived by the controlling board.	309

(D) Division (B) of this section does not apply to either of	310
the following:	311

(1) The purchase by the division of liquor control of	312
spirituous liquor;	313

(2) Purchases made under section 125.072 of the Revised	314
Code.	315

(E) The director of administrative services shall publish in	316
the form of a model act for use by counties, townships, and	317
municipal corporations, or any other political subdivision	318
described in division (B) of section 125.04 of the Revised Code, a	319
system of preferences for Ohio products,for products mined and	320
produced in Ohio and in the United States, and for Ohio-based	321
contractors. The model act shall reflect substantial equivalence	322
to the system of preferences in purchasing and public improvement	323
contracting procedures under which the state operates pursuant to	324
this chapter and section 153.012 of the Revised Code. To the	325
maximum extent possible, consistent with the Ohio system of	326
preferences in purchasing and public improvement contracting	327
procedures, the model act shall incorporate all of the	328
requirements of the federal "Buy America Act," 47 Stat. 1520	329
(1933), 41 U.S.C. 10a to 10d, as amended, and the rules adopted	330
thereunderunder that act.	331

Prior toBefore and during the development and promulgation	332
of the model act, the director shall consult with appropriate	333
statewide organizations representing counties, townships, and	334
municipal corporations so as to identify the special requirements	335
and concerns these political subdivisions have in their purchasing	336
and public improvement contracting procedures. The director shall	337
promulgate the model act by rule adopted pursuant to Chapter 119.	338
of the Revised Code and shall revise the act as necessary to	339
reflect changes in this chapter or section 153.012 of the Revised	340
Code.	341

The director shall make available copies of the model act,	342
supporting information, and technical assistance to any township,	343
county, or municipal corporation wishing to incorporate the	344
provisions of the act into its purchasing or public improvement	345
contracting procedure.	346

Sec. 307.90.  (A) The award of all contracts subject to	347
sections 307.86 to 307.92 of the Revised Code shall be made to the	348
lowest and best bidder. The bond or bid guaranty of all	349
unsuccessful bidders shall be returned to them by the contracting	350
authority immediately upon awarding the contract or rejection of	351
all bids. The contracting authority may reject all bids.	352

(B) With(1) Except as otherwise provided in division (B)(2)	353
of this section, with respect to any contract for the purchase of	354
equipment, materials, supplies, insurance, services, or a public	355
improvement into which a county or its officers may enter, a board	356
of county commissioners, by resolution, may adopt the model system	357
of preferences for Ohio products, for products mined or produced	358
in Ohio and the United States, and for Ohio-based contractors	359
promulgated pursuant tounder division (E) of section 125.11 of	360
the Revised Code. The resolution shall specify the class or	361
classes of contracts to which the system of preferences apply,	362
and, once the resolution is adopted, that system of preferences	363
operates to modify the awarding of suchthose contracts	364
accordingly. While the system of preferences is in effect, no	365
county officer or employee with the responsibility for doing so	366
shall award a contract to which the system applies in violation of	367
the preference system.	368

(2) Division (B)(1) of this section does not apply to or	369
affect purchases made under section 9.314 of the Revised Code.	370

Sec. 505.103. With(A) Except as otherwise provided in	371
division (B) of this section, with respect to any contract for the	372
purchase of equipment, materials, supplies, insurance, services,	373
or a public improvement into which a township or its officers may	374
enter, a board of township trustees by resolution, may adopt the	375
model system of preferences for Ohio products, for products mined	376
or produced in Ohio and the United States, and for Ohio-based	377
contractors promulgated pursuant tounder division (E) of section	378
125.11 of the Revised Code. The resolution shall specify the	379
class or classes of contracts to which the system of preferences	380
apply, and, once the resolution is adopted, that system of	381
preferences operates to modify the awarding of suchthose	382
contracts accordingly. While the system of preferences is in	383
effect, no township officer or employee with the responsibility	384
for doing so shall award a contract to which the system applies in	385
violation of the preference system.	386

(B) Division (A) of this section does not apply to or affect	387
purchases made under section 9.314 of the Revised Code.	388

Sec. 717.21. With(A) Except as otherwise provided in	389
division (B) of this section, with respect to any contract for the	390
purchase of equipment, materials, supplies, insurance, services,	391
or a public improvement into which a municipalitymunicipal	392
corporation or its officers may enter, the legislative authority	393
of the municipalitymunicipal corporation, by ordinance, may adopt	394
the model system of preferences for Ohio products, for products	395
mined or produced in Ohio and the United States, and for	396
Ohio-based contractors promulgated pursuant tounder division (E)	397
of section 125.11 of the Revised Code. The ordinance shall	398
specify the class or classes of contracts to which the system of	399
preferences apply, and, once the ordinance is adopted, that system	400
of preferences operates to modify the awarding of suchthose	401
contracts accordingly. While the system of preferences is in	402
effect, no municipal officer or employee with the responsibility	403
for doing so shall award a contract to which the system applies in	404
violation of the preference system.	405

(B) Division (A) of this section does not apply to or affect	406
purchases made under section 9.314 of the Revised Code.	407

Section 2.  That existing sections 125.01, 125.07, 125.08,	408
125.10, 125.11, 307.90, 505.103, and 717.21 of the Revised Code	409
are hereby repealed.	410

Section 3.  Section 125.11 of the Revised Code is presented	412
in this act as a composite of the section as amended by both Am.	413
Sub. S.B. 99 and Am. Sub. S.B. 162 of the 121st General Assembly.	414
The General Assembly, applying the principle stated in division	415
(B) of section 1.52 of the Revised Code that amendments are to be	416
harmonized if reasonably capable of simultaneous operation, finds	417
that the composite is the resulting version of the section in	418
effect prior to the effective date of the section as presented in	419
this act.	420