REPRESENTATIVES Raga, DeWine, Husted, Seitz, Willamowski, Calvert, Damschroder, Core, Lendrum, Hollister, Roman, Webster, D. Miller, Jolivette, Brinkman, Britton, Boccieri, Buehrer, Faber, Hagan, Carey, Evans, Grendell, Hoops, Wilson, Collier, Peterson, Schaffer, Cates, Niehaus, Schneider, White, Flannery, Redfern, Schmidt, Coates, Widowfield, Manning, Wolpert, Fessler, Kearns, Reidelbach, Carmichael, Young, Driehaus, Barnes, Woodard, Salerno, Gilb

To amend sections 125.01, 125.07, 125.08, 125.10, and

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125.11 and to enact sections 9.314 and 125.072 of

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the Revised Code to permit the Department of

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Administrative Services and political subdivisions

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to purchase supplies or services through a

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competitive reverse auction process via the

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Internet and to make changes in the notice

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required when the Department purchases supplies or

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services by competitive selection.

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

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

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

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(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 services or	26
supplies 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:

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(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, or, when bids are made in a reverse	141
auction, the time when bids will be accepted; the conditions under	142
which bids or proposals will be received,; the terms of the	143
proposed purchase,purchases; and an itemized list of the supplies	144
or services to be purchased and the estimated quantities or	145
amounts thereofof them.	146

(C) The mailingposting of such noticesthe notice required	147
under division (A) of this section shall be completed as follows:	148

(1) At least fifteen calendar days prior to the scheduled	149
opening date, for competitive sealed proposals and competitive	150
sealed bids;	151

(2) For printing contracts, aby the number of days	152
determined by the director,determines preceding the day when such	153
the bids or proposals will be opened or accepted.	154

(D) The department shall also shall maintain, in a public	155
place in its office, a bulletin board upon which it shall post and	156
maintain a copy of suchthe notice required under division (A) of	157
this section for at least the number of days listed inthe	158
director determines under division (C) of this section, or, for	159
printing contracts, a number of days determined by the director,	160
preceding the day of the opening or acceptance of suchthe bids or	161
proposals. The failure to so additionally post such noticesthe	162
notice shall invalidate all proceedings had and any contract	163
entered into pursuant to suchthe proceedings.	164

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

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(1) "Internet" means the international computer network of	166
both federal and nonfederal interoperable packet switched data	167
networks, including the graphical subnetwork called the world wide	168
web.	169

(2) "Reverse auction" means a purchasing process in which	170
offerors submit bids in competing to sell services or supplies in	171
an open environment via the internet.	172

(B) Whenever the director of administrative services	173
determines that the use of a reverse auction is advantageous to	174
the state, the director, in accordance with rules the director	175
shall adopt, may purchase services or supplies by reverse auction.	176

(C) The director, by rule, may authorize a state agency that	177
is authorized to purchase services or supplies directly to	178
purchase them by reverse auction in the same manner as this	179
section and the rules adopted under this section authorize the	180
director to do so.	181

Sec. 125.08.  (A) The department of administrative services	182
may divide the state into purchasing districts wherein supplies or	183
services are to be delivered and shall describe suchthose	184
districts on all applications for the notification list provided	185
for in this section.	186

Any person may have that person's name and address, or the	187
name and address of an agent, placed on the competitive selection	188
notification list of the department of administrative services by	189
sending to the department the person's name and address, together	190
with a list of the supplies or services described in the manner	191
prescribed by the department produced or dealt in by the person	192
with a request for such listing, a list of the districts in which	193
the person desires to participate, and suchall other information	194
as the director of administrative services may prescribe. Whenever	195
suchany name and address together with a list of the supplies or	196
services produced or dealt in is so listed, the department shall	197
sendpost notice, as provided in division (A) of section 125.07 of	198
the Revised Code, to thosefor the benefit of the persons listed	199
on the notification list that are qualified Ohio business	200
enterprises, which shall include Ohio penal industries as defined	201
by rule of the director of administrative services, or have a	202
significant Ohio presence in this state's economy, except that, in	203
those circumstances in which the director considers it in the best	204
interest of this state, the director shall post notice shall be	205
sent to,as provided in division (A) of section 125.07 of the	206
Revised Code, for the benefit of all persons listed on the	207
notification list. The department need only provide competitive	208
selection documents for a proposed contract to persons who	209
specifically request suchthe documents. The	210

The director may remove a person from the notification list	211
and place the person on an inactive list if the person fails to	212
respond to any notices of proposed purchases that appear in four	213
consecutive bulletins or other forms of notification that list	214
suchthose notices. Upon written request to the director by the	215
person so removed, the director may return the person to the	216
notification list if the person provides sufficient evidence	217
regarding intent to offer bids or proposals to the state. The	218
director shall not remove any person from the list without notice	219
to suchthe person. The notice may be a part of the notices of	220
proposed purchase.	221

(B) Any person who is certified by the equal employment	222
opportunity coordinator of the department of administrative	223
services in accordance with the rules adopted under division	224
(B)(1) of section 123.151 of the Revised Code as a minority	225
business enterprise may have that person's name placed on a	226
special minority business enterprise notification list to be used	227
in connection with contracts awarded under section 125.081 of the	228
Revised Code. The minority business enterprise notification list	229
shall be used for bidding on contracts set aside for minority	230
business enterprises only. In all other respects, the list shall	231
be maintained and used in the same manner and according to the	232
same procedures as the notification list provided for under	233
division (A) of this section, except that a firm shall not be	234
removed from the list unless the coordinator determines that the	235
firm is no longer a minority business enterprise. A minority	236
business enterprise may have its name placed on both the	237
notification lists provided for in this section.	238

(C) The director of administrative services may require an	239
annual registration fee for the listings provided for in division	240
(A) or (B) of this section. This fee shall not be more than ten	241
dollars. The department may charge a fee for any compilation of	242
descriptions of supplies or services. This fee shall be	243
reasonable and shall not exceed the cost required to maintain the	244
notification lists and provide for the distribution of the	245
proposed purchase to the persons whose names appear on the lists.	246

Sec. 125.10. (A) The department of administrative services	247
may require that all competitive sealed bids and, competitive	248
sealed proposals,and bids received in a reverse auction be	249
accompanied by a performance bond or other cash surety acceptable	250
to the director of administrative services, in suchthe sum and	251
with suchthe sureties as it prescribes, payable to the state, and	252
conditioned that the person submitting the bid or proposal, if	253
that person's bid or proposal is accepted, will faithfully execute	254
the terms of the contract and promptly make deliveries of the	255
supplies or equipment, or contracts of insurance, purchased. A	256

(B)A sealed copy of each competitive sealed bid or	257
competitive sealed proposal shall be filed with the department	258
prior to the time specified in the notice for opening of the bids	259
or proposals. All competitive sealed bids and competitive sealed	260
proposals shall be publicly opened in the office of the department	261
at the time specified in the notice. A representative of the	262
auditor of state shall be present at the opening of all	263
competitive sealed bids and competitive sealed proposals, and	264
shall certify the opening of each competitive sealed bid and	265
competitive sealed proposal, and no. No competitive sealed bid or	266
competitive sealed proposal shall be considered valid unless it is	267
so certified.	268

Sec. 125.11.  (A) Subject to division (B) of this section,	269
contracts required to be awarded pursuant to a reverse auction	270
under section 125.072 of the Revised Code or pursuant to	271
competitive sealed bidding, including such contracts awarded under	272
section 125.081 of the Revised Code, shall be awarded to the	273
lowest responsive and responsible bidder on each item in	274
accordance with section 9.312 of the Revised Code. When the	275
contract is for meat products as defined in section 918.01 of the	276
Revised Code or poultry products as defined in section 918.21 of	277
the Revised Code, only those bids received from vendors offering	278
products from establishments on the current list of meat and	279
poultry vendors established and maintained by the director of	280
administrative services under section 125.17 of the Revised Code	281
shall be eligible for acceptance. The department of	282
administrative services may accept or reject any or all bids in	283
whole or by items, except that when the contract is for services	284
or suppliesproducts available from a qualified nonprofit agency	285
pursuant to sections 4115.31 to 4115.35 of the Revised Code, the	286
contract shall be awarded to that agency.	287

(B) Prior to awarding a contract under division (A) of this	288
section, the department of administrative services or the state	289
agency responsible for evaluating a contract for the purchase of	290
goodsproducts shall evaluate the bids received according to the	291
criteria and procedures established pursuant to divisions (C)(1)	292
and (2) of section 125.09 of the Revised Code for determining if a	293
product is produced or mined in the United States and if a product	294
is produced or mined in Ohiothis state. The department or other	295
state agency shall first remove bids that offer suppliesproducts	296
that have not been or that will not be produced or mined in the	297
United States. From among the remaining bids, the department or	298
other state agency shall select the lowest responsive and	299
responsible bid, in accordance with section 9.312 of the Revised	300
Code, from among the bids that offer goodsproducts that have been	301
produced or mined in Ohiothis state where sufficient competition	302
can be generated within Ohiothis state to ensure that compliance	303
with these requirements will not result in an excessive price for	304
the product or acquiring a disproportionately inferior product. If	305
there are two or more qualified bids that offer goods which	306
products that have been produced or mined in Ohiothis state, it	307
shall be deemed that there is sufficient competition to prevent an	308
excessive price for the product or the acquiring of a	309
disproportionately inferior product.	310

(C) Division (B) of this section applies to contracts for	311
which competitive bidding is waived by the controlling board.	312

(D) Division (B) of this section does not apply to the	313
purchase by the division of liquor control of spirituous liquor.	314

(E) The director of administrative services shall publish in	315
the form of a model act for use by counties, townships, and	316
municipal corporations, or any other political subdivision	317
described in division (B) of section 125.04 of the Revised Code, a	318
system of preferences for products mined and produced in Ohiothis	319
state and in the United States and for Ohio-based contractors. The	320
model act shall reflect substantial equivalence to the system of	321
preferences in purchasing and public improvement contracting	322
procedures under which the state operates pursuant to this chapter	323
and section 153.012 of the Revised Code. To the maximum extent	324
possible, consistent with the Ohio system of preferences in	325
purchasing and public improvement contracting procedures, the	326
model act shall incorporate all of the requirements of the federal	327
"Buy America Act," 47 Stat. 1520 (1933), 41 U.S.C. 10a to 10d, as	328
amended, and the rules adopted thereunderunder that act.	329

Prior toBefore and during the development and promulgation	330
of the model act, the director shall consult with appropriate	331
statewide organizations representing counties, townships, and	332
municipal corporations so as to identify the special requirements	333
and concerns these political subdivisions have in their purchasing	334
and public improvement contracting procedures. The director shall	335
promulgate the model act by rule adopted pursuant to Chapter 119.	336
of the Revised Code and shall revise the act as necessary to	337
reflect changes in this chapter or section 153.012 of the Revised	338
Code.	339

The director shall make available copies of the model act,	340
supporting information, and technical assistance to any township,	341
county, or municipal corporation wishing to incorporate the	342
provisions of the act into its purchasing or public improvement	343
contracting procedure.	344

Section 2.  That existing sections 125.01, 125.07, 125.08,	345
125.10, and 125.11 of the Revised Code are hereby repealed.	346

Section 3.  Not later than twelve months after the effective	348
date of this act, the Department of Administrative Services shall	349
report to the committees of the House of Representatives and	350
Senate with jurisdiction over legislation dealing with state	351
purchasing regarding the effect of reverse auctions on purchases	352
from Ohio businesses, including minority and female business	353
enterprises.	354

Section 4. Section 125.11 of the Revised Code is presented in	355
this act as a composite of the section as amended by both Am. Sub.	356
S.B. 99 and Am. Sub. S.B. 162 of the 121st General Assembly. The	357
General Assembly, applying the principle stated in division (B) of	358
section 1.52 of the Revised Code that amendments are to be	359
harmonized if reasonably capable of simultaneous operation, finds	360
that the composite is the resulting version of the section in	361
effect prior to the effective date of the section as presented in	362
this act.	363