---

Session of 2000
          HOUSE BILL No. 2892                           By Representatives Garner, Alldritt, Barnes, Burroughs, Crow, Dean,
                Findley, Flora, Gilbert, Grant, Henry, Johnston, Kirk, Larkin, McKin-
                ney, Nichols, O'Brien, Pauls, E. Peterson, Phelps, Rehorn, Ruff,
                Sharp, Shriver, Spangler, Tedder and Toelkes
                2-9                

---

13             AN  ACT concerning contracts for state agencies; amending K.S.A. 75-
14             3738 and 75-3740 and K.S.A. 1999 Supp. 74-8904 and 75-3739 and
15             repealing the existing sections.
16      
17       Be it enacted by the Legislature of the State of Kansas:
18             New Section  1. (a) Except as otherwise specifically provided by law,
19       all contracts for the providing of professional services for state agencies
20       shall be awarded in conformance with guidelines established pursuant to
21       rules and regulations adopted by the board of directors of the Kansas
22       development finance authority upon the basis of competitive bids. Except
23       as otherwise specifically provided by law, all consulting contracts for state
24       agencies shall be awarded in conformance with guidelines established
25       pursuant to rules and regulations adopted by the board of directors of
26       the Kansas development finance authority upon the basis of competitive
27       bids. All bids shall be solicited by notice published in the Kansas register.
28       Notice also shall be published not less than once in the journal or other
29       publication of the profession for which such services are to be contracted.
30       The director of purchases and officers and employees of all state agencies
31       shall provide such board with such information, records and assistance as
32       the board may require in its deliberations and determination in awarding
33       such contracts. When in the judgment of the board of directors of the
34       Kansas development finance authority, an agency emergency requires
35       immediate performance of services, competitive bids need not be
36       required.
37             (b) As used in this act, "professional services" shall mean and include
38       all services provided under contract to agencies of the state by any mem-
39       ber of any profession, the members of which are licensed or regulated
40       under the laws of the state of Kansas.
41             (c) As used in this act, "consulting contract" shall mean and include
42       all services provided under contract to agencies of the state by a
43       consultant.
44             (d) As used in this act, "consultant" shall have the meaning ascribed

2
  1       to it in K.S.A. 46-284, and amendments thereto.
  2             Sec.  2. K.S.A. 1999 Supp. 74-8904 is hereby amended to read as
  3       follows: 74-8904. Except as otherwise limited by this act, the authority
  4       shall have the following powers to:
  5             (a) Sue and be sued;
  6             (b) have a seal and alter such seal;
  7             (c) make and alter bylaws for its organization and internal
  8       management;
  9             (d) adopt such rules and regulations as may be necessary to carry out
10       the purposes of this act;
11             (e) acquire, hold and dispose of real and personal property for its
12       corporate purposes;
13             (f) appoint officers, agents and employees, prescribe their duties and
14       qualifications and fix their compensation;
15             (g) borrow money and to issue notes, bonds and other obligations
16       pursuant to K.S.A. 74-8905, and amendments thereto, whether or not the
17       interest on which is subject to federal income taxation, and to provide for
18       the rights of the lenders or holders thereof;
19             (h) purchase notes or participations in notes evidencing loans which
20       are secured by mortgages or security interests and to enter into contracts
21       in that regard;
22             (i) make secured or unsecured loans for any of the purposes for which
23       bonds of the authority may be issued under this act or to low and mod-
24       erate income multifamily rental housing projects participating in pro-
25       grams established in section 42 of the federal internal revenue code, and
26       provide financing for housing projects and programs in participation with
27       programs established by the United States department of housing and
28       urban development or the Kansas department of commerce and housing;
29       except as otherwise provided in this subsection, nothing in this act shall
30       be construed to authorize the authority to make loans directly to individ-
31       uals to finance housing developments;
32             (j) sell mortgages and security interests at public or private sale, to
33       negotiate modifications or alterations in mortgage and security interests,
34       to foreclose on any mortgage or security interest in default or commence
35       any action to protect or enforce any right conferred upon it by any law,
36       mortgage, security agreement, contract or other agreement, and to bid
37       for and purchase property which was the subject of such mortgage or
38       security interest at any foreclosure or at any other sale, to acquire or take
39       possession of any such property, and to exercise any and all rights as
40       provided by law for the benefit or protection of the authority or mortgage
41       holders;
42             (k) collect fees and charges in connection with its loans, bond guar-
43       antees, commitments and servicing, including, but not limited to, reim-

3
  1       bursement of costs of financing as the authority shall determine to be
  2       reasonable and as shall be approved by the authority;
  3             (l) make and execute contracts for the servicing of mortgages ac-
  4       quired by the authority pursuant to this act, and to pay the reasonable
  5       value of services rendered to the authority pursuant to those contracts;
  6             (m) enter into agreements with and accept gifts, grants, loans and
  7       other aid from the federal government, the state, any state agency, any
  8       political subdivision of the state, or any person or corporation, foundation
  9       or legal entity, and to agree to and comply with any conditions attached
10       to federal and state financial assistance not inconsistent with the provi-
11       sions of this act;
12             (n) invest moneys of the authority not required for immediate use,
13       including proceeds from the sale of any bonds, in such manner as the
14       board shall determine, subject to any agreement with bondholders stated
15       in the authorizing resolution providing for the issuance of bonds;
16             (o) procure insurance against any loss in connection with its pro-
17       grams, property and other assets;
18             (p) provide technical assistance and advice to the state or political
19       subdivisions of the state and to enter into contracts with the state or
20       political subdivisions of the state to provide such services. The state or
21       political subdivisions of the state are hereby authorized to enter into con-
22       tracts with the authority for such services and to pay for such services as
23       may be provided them;
24             (q) establish accounts in one or more depositories;
25             (r) lease, acquire, construct, sell and otherwise deal in and contract
26       concerning any facilities;
27             (s) have and exercise all of the powers granted to the public housing
28       authorities by the state, except that the authority shall not have the power
29       of eminent domain;
30             (t) do any and all things necessary or convenient to carry out purposes
31       of the authority and exercise the powers given and granted in this act;
32             (u) assist minority businesses in obtaining loans or other means of
33       financial assistance. The terms and conditions of such loans or financial
34       assistance, including the charges for interest and other services, will be
35       consistent with the provisions of this act. In order to comply with this
36       requirement, efforts must be made to solicit for review and analysis pro-
37       posed minority business ventures. Basic loan underwriting standards will
38       not be waived to inconsistently favor minority persons or businesses from
39       the intent of the authority's lending practices; and
40             (v) form one or more subsidiary corporations under K.S.A. 17-6001
41       et seq., and amendments thereto, in accordance with the procedures
42       therein contained. Each subsidiary corporation shall be subject to the
43       same restrictions and limitations as to the powers and purposes to which

4
  1       the authority is subject. The authority may delegate any of its powers,
  2       obligations and duties to any subsidiary corporation by inclusion of such
  3       powers, obligations and duties in the articles of incorporation of the sub-
  4       sidiary corporation. Subsidiary corporations so formed shall constitute
  5       legal entities separate and distinct from each other, the authority and the
  6       state. The authority shall not be liable for the debts or obligations or for
  7       any actions or inactions of its subsidiary corporations unless the authority
  8       expressly agrees otherwise in writing. The authority may make loans or
  9       grants to a subsidiary corporation from time to time to enable the sub-
10       sidiary corporation to carry out its purposes. The members of the au-
11       thority shall constitute all of the directors of each subsidiary corporation.;
12       and
13             (w) adopt rules and regulations establishing guidelines for the award-
14       ing of professional and consulting services contracts for state agencies, in
15       accordance with section 1, and amendments thereto.
16             The state, any municipality or any state commission, public authority,
17       agency, officer, department, board or division authorized and empowered
18       to enter into agreements with, to grant, convey, lease or otherwise transfer
19       any property to, or to otherwise transact business with the authority, shall
20       have the same authorization and power to engage in these activities with
21       each subsidiary corporation of the authority.
22             One or more such subsidiary corporation may be formed for purposes
23       of establishing state tax credit equity funds to assist in the development
24       of low-income and middle-income housing and obtain financing through
25       participation in the program established in section 42 of the federal in-
26       ternal revenue code.
27             Actions of the authority or any subsidiary corporation relating to hous-
28       ing pursuant to this subsection (v) shall be carried out in accordance with
29       any terms, conditions and limitations relating to policy issues regarding
30       housing, as established by the secretary of commerce and housing.
31             One or more such subsidiary corporations may be formed for purposes
32       of acquiring or conveying on behalf of the state and pursuant to this act
33       a project of statewide as well as local importance, issuing bonds on behalf
34       of the state pursuant to this act to finance a project of statewide as well
35       as local importance or otherwise financing on behalf of the state pursuant
36       to this act a project of statewide as well as local importance. The Kansas
37       statewide projects development corporation is hereby created in accord-
38       ance with this section.
39             Sec.  3. K.S.A. 75-3738 is hereby amended to read as follows: 75-
40       3738. Except as otherwise provided in section 1, and amendments thereto,
41       the director of purchases shall:
42             (a) Purchase, rent or otherwise provide for the furnishing of supplies,
43       materials, equipment or contractual services for all state agencies.

5
  1             (b) Have power to authorize any state agency to purchase directly
  2       certain specified supplies, materials, equipment or contractual services
  3       under prescribed conditions and procedures.
  4             (c) Prescribe the manner in which supplies, materials and equipment
  5       shall be purchased, delivered and distributed.
  6             (d) Prescribe the time, manner and authentication of making requi-
  7       sitions for supplies, materials, equipment and contractual services.
  8             (e) Establish standards of quality and quantity and develop standard
  9       specifications in consultation with the several state agencies.
10             (f) Prescribe the manner of making chemical and physical tests of
11       samples submitted with bids and samples of deliveries to determine com-
12       pliance with specifications and the manner in which state agencies shall
13       inspect all deliveries of supplies, materials and equipment.
14             (g) Prescribe the amounts and form of, accounting for and disposition
15       of any deposit or bond required to be submitted with a bid or a contract
16       and the amount of any such deposit or bond to be given for the faithful
17       performance of a contract.
18             (h) Require reports by state agencies of stocks of supplies, materials
19       and equipment on hand and prescribe the form of such reports and de-
20       liver copies of such reports to the director of purchases and the director
21       of accounts and reports.
22             Sec.  4. K.S.A. 1999 Supp. 75-3739 is hereby amended to read as
23       follows: 75-3739. In the manner as provided in this act and rules and
24       regulations established thereunder:
25             (a) Except as otherwise provided in subsection (n), all contracts for
26       construction and repairs, and all purchases of and contracts for supplies,
27       materials, equipment and contractual services to be acquired for state
28       agencies shall be based on competitive bids, except that competitive bids
29       need not be required in the following instances:
30             (1) For contractual services, supplies, materials, or equipment when,
31       in the judgment of the director of purchases, no competition exists;
32             (2) when, in the judgment of the director of purchases, chemicals
33       and other material or equipment for use in laboratories or experimental
34       studies by state agencies are best purchased without competition, or
35       where rates are fixed by law or ordinance;
36             (3) when, in the judgment of the director of purchases, an agency
37       emergency requires immediate delivery of supplies, materials or equip-
38       ment, or immediate performance of services;
39             (4) when any statute authorizes another procedure or provides an
40       exemption from the provisions of this section;
41             (5) when compatibility with existing contractual services, supplies,
42       materials or equipment is the overriding consideration;
43             (6) when a used item becomes available and is subject to immediate

6
  1       sale; or
  2             (7) when, in the judgment of the director of purchases and the head
  3       of the acquiring state agency, not seeking competitive bids is in the best
  4       interest of the state.
  5             When the director of purchases approves a purchase of or contract for
  6       supplies, materials, equipment, or contractual services in any instance
  7       specified in this subsection, the director may delegate authority to make
  8       the purchase or enter the contract under conditions and procedures pre-
  9       scribed by the director.
10             The director of purchases shall prepare a detailed report at least once
11       in each calendar quarter of all contracts over $5,000 entered into without
12       competitive bids under subsection (a)(1), (2), (3), (5), (6) or (7). The
13       director shall submit the report to the legislative coordinating council, the
14       chairperson of the committee on ways and means of the senate, the chair-
15       person of the committee on appropriations of the house of representatives
16       and the chairperson of the Kansas performance review board.
17             (b)  (1) Except as otherwise provided in subsection (n), if the amount
18       of the purchase is estimated to exceed $50,000, sealed bids shall be so-
19       licited by notice published once in the Kansas register not less than 10
20       days before the date stated in the notice for the opening of the bids. The
21       director of purchases may waive this publication of notice requirement
22       when the director determines that a more timely procurement is in the
23       best interest of the state. The director of purchases also may designate a
24       trade journal for the publication. The director of purchases also shall
25       solicit such bids by sending notices by mail to prospective bidders and by
26       posting the notice on a public bulletin board for at least 10 business days
27       before the date stated in the notice for the opening of the bids unless
28       otherwise provided by law. All bids shall be sealed when received and
29       shall be opened in public at the hour stated in the notice.
30             (2) The director of purchases shall prepare a detailed report at least
31       once in each calendar quarter of all instances in which the director waived
32       publication of the notice of bid solicitations in the Kansas register as
33       provided in this subsection. The director shall submit the report to the
34       legislative coordinating council, the chairperson of the committee on ways
35       and means of the senate, the chairperson of the committee on appropri-
36       ations of the house of representatives and the chairperson of the Kansas
37       performance review board.
38             (c) Except as otherwise provided in subsection (n), all purchases es-
39       timated to exceed approximately $25,000 but not more than $50,000, shall
40       be made after receipt of sealed bids following at least three days' notice
41       posted on a public bulletin board.
42             (d) Except as otherwise provided in subsection (n), all purchases es-
43       timated to be more than $5,000, but less than $25,000, may be made after

7
  1       the receipt of three or more bid solicitations by telephone, telephone
  2       facsimile or sealed bid, following at least three days' notice posted on a
  3       public bulletin board. Such bids shall be recorded as provided in subsec-
  4       tion (e) of K.S.A. 75-3740 and amendments thereto. Any purchase that
  5       is estimated to be less than $5,000 may be purchased under conditions
  6       and procedures prescribed by the director of purchases. Purchases made
  7       in compliance with such conditions and procedures shall be exempt from
  8       other provisions of this section.
  9             (e) With the approval of the secretary of administration, the director
10       of purchases may delegate authority to any state agency to make pur-
11       chases of less than $25,000 under certain prescribed conditions and pro-
12       cedures. The director of purchases shall prepare a report at least once in
13       each calendar quarter of all current and existing delegations of authority
14       to state agencies as provided in this subsection. The director shall submit
15       the report to the legislative coordinating council, the chairperson of the
16       committee on ways and means of the senate, the chairperson of the com-
17       mittee on appropriations of the house of representatives and the chair-
18       person of the Kansas performance review board.
19             (f) Subject to the provisions of subsection (e), contracts and purchases
20       shall be based on specifications approved by the director of purchases.
21       When deemed applicable and feasible by the director of purchases, such
22       specifications shall include either energy efficiency standards or appro-
23       priate life cycle cost formulas, or both, for all supplies, materials, equip-
24       ment and contractual services to be purchased by the state. The director
25       of purchases may reject a contract or purchase on the basis that a product
26       is manufactured or assembled outside the United States. No such speci-
27       fications shall be fixed in a manner to effectively exclude any responsible
28       bidder offering comparable supplies, materials, equipment or contractual
29       services.
30             (g) Notwithstanding anything herein to the contrary, all contracts
31       with independent construction concerns for the construction, improve-
32       ment, reconstruction and maintenance of the state highway system and
33       the acquisition of rights-of-way for state highway purposes shall be ad-
34       vertised and let as now or hereafter provided by law.
35             (h) The director of purchases may authorize state agencies to contract
36       for services and materials with other state agencies, or with federal agen-
37       cies, political subdivisions of Kansas, agencies of other states or subdivi-
38       sions thereof, or private nonprofit educational institutions, without com-
39       petitive bids.
40             (i) The director of purchases may participate in, sponsor, conduct, or
41       administer a cooperative purchasing agreement or consortium for pur-
42       chases of supplies, materials, equipment, and contractual services with
43       federal agencies or agencies of other states or local units of government.

8
  1       Cooperative purchasing agreements entered into under this subsection
  2       shall not be subject to K.S.A. 75-3739 through 75-3740a, and amend-
  3       ments thereto. Nothing in this subsection shall allow federal grant moneys
  4       to be handled differently from any other moneys of the state unless the
  5       requirements of the applicable federal grant specifically require such fed-
  6       eral moneys to be handled differently.
  7             (j) The director of purchases may delegate authority to any state
  8       agency to make purchases under certain prescribed conditions and pro-
  9       cedures when the acquisition is funded, in whole or in part, from a grant.
10       Purchases made in compliance with such conditions and procedures shall
11       be exempt from other provisions of this section. As used in this subsection
12       the term "grant" means a disbursement made from federal or private
13       funds, or a combination of these sources, to a state agency. Nothing in
14       this subsection shall allow federal grant moneys to be handled differently
15       from any other moneys of the state unless the requirements of the appli-
16       cable federal grant specifically require such federal moneys to be handled
17       differently.
18             (k) The director of purchases shall prepare a detailed report at least
19       once each calendar quarter of all contracts for services, supplies, materials
20       or equipment entered into pursuant to subsection (h), (i) or (j) and submit
21       it to the legislative coordinating council, the chairperson of the committee
22       on ways and means of the senate, the chairperson of the committee on
23       appropriations of the house of representatives and the chairperson of the
24       Kansas performance review board.
25             (l) Except as otherwise specifically provided by law, no state agency
26       shall enter into any lease of real property without the prior approval of
27       the secretary of administration. A state agency shall submit to the sec-
28       retary of administration such information relating to any proposed lease
29       of real property as the secretary may require. The secretary of adminis-
30       tration shall either approve, modify and approve or reject any such pro-
31       posed lease.
32             (m) The director of purchases shall require all bidders on state con-
33       tracts to disclose all substantial interests held by the bidder in the state.
34             (n) The final determination and awarding of all consulting contracts
35       and all contracts for the providing of professional services for state agen-
36       cies, shall be awarded in conformance with guidelines established pur-
37       suant to rules and regulations adopted by the board of directors of the
38       Kansas development finance authority and as provided by K.S.A. 74-8904
39       and section 1, and amendments thereto.
40             Sec.  5. K.S.A. 75-3740 is hereby amended to read as follows: 75-
41       3740. (a) Except as provided by K.S.A. 75-3740b, and amendments
42       thereto, all contracts and purchases made by or under the supervision of
43       the director of purchases or any state agency for which competitive bids

9
  1       are required shall be awarded to the lowest responsible bidder, taking
  2       into consideration conformity with the specifications, terms of delivery,
  3       and other conditions imposed in the call for bids.
  4             (b) Except as otherwise provided in subsection (g), the director of
  5       purchases shall have power to decide as to the lowest responsible bidder
  6       for all purchases, but if:
  7             (1) The dollar amount of the bid received from the lowest responsible
  8       bidder from within the state is identical to the dollar amount of the bid
  9       received from the lowest responsible bidder from without the state, the
10       contract shall be awarded to the bidder from within the state;
11             (2) in the case of bids for paper products specified in K.S.A. 75-
12       3740b, and amendments thereto, the dollar amounts of the bids received
13       from two or more lowest responsible bidders are identical, the contract
14       shall be awarded to the bidder whose bid is for those paper products
15       containing the highest percentage of recyclable materials; and
16             (3) in the case of bids for paper products specified in K.S.A. 75-
17       3740b, and amendments thereto, the dollar amounts of the bids received
18       from two or more lowest responsible bidders are identical, the contract
19       shall be awarded to the bidder whose bid is for those paper products
20       containing the highest percentage of recycled materials.
21             (c) Except as otherwise provided in subsection (g), any or all bids may
22       be rejected, and a bid shall be rejected if it contains any material alteration
23       or erasure. The director of purchases may reject the bid of any bidder
24       who is in arrears on taxes due the state, who is not properly registered to
25       collect and remit taxes due the state or who has failed to perform satis-
26       factorily on a previous contract with the state. The secretary of revenue
27       is hereby authorized to exchange such information with the director of
28       purchases as is necessary to effectuate the preceding sentence notwith-
29       standing any other provision of law prohibiting disclosure of the contents
30       of taxpayer records or information. Prior to determining the lowest re-
31       sponsible bidder on contracts for construction of buildings or for major
32       repairs or improvements to buildings for state agencies, the director of
33       purchases shall consider: (1) The criteria and information developed by
34       the secretary of administration, with the advice of the state building ad-
35       visory commission to rate contractors on the basis of their performance
36       under similar contracts with the state, local governmental entities and
37       private entities, in addition to other criteria and information available,
38       and (2) the recommendations of the project architect, or, if there is no
39       project architect, the recommendations of the secretary of administration
40       or the agency architect for the project as provided in K.S.A. 75-1254, and
41       amendments thereto. In any case where competitive bids are required
42       and where all bids are rejected, new bids shall be called for as in the first
43       instance, unless otherwise expressly provided by law.

10
  1             (d) Before the awarding of any contract for construction of a building
  2       or the making of repairs or improvements upon any building for a state
  3       agency, the director of purchases shall receive written approval from the
  4       state agency for which the building construction project has been ap-
  5       proved, that the bids generally conform with the plans and specifications
  6       prepared by the project architect, by the secretary of administration or
  7       by the agency architect for the project, as the case may be, so as to avoid
  8       error and mistake on the part of the contractors. In all cases where ma-
  9       terial described in a contract can be obtained from any state institution,
10       the director of purchases shall exclude the same from the contract.
11             (e) All bids with the names of the bidders and the amounts thereof,
12       together with all documents pertaining to the award of a contract, shall
13       be made a part of a file or record and retained by the director of purchases
14       for five years, unless reproduced as provided in K.S.A. 75-3737, and
15       amendments thereto, and shall be open to public inspection at all rea-
16       sonable times.
17             (f) As used in this section and in K.S.A. 75-3741, and amendments
18       thereto, "project architect" shall have the meaning ascribed thereto in
19       K.S.A. 75-1251, and amendments thereto.
20             (g) The final determination and awarding of all consulting contracts
21       and all contracts for the providing of professional services for state agen-
22       cies, shall be awarded in conformance with guidelines established pur-
23       suant to rules and regulations adopted by the board of directors of the
24       Kansas development finance authority and as provided in K.S.A. 74-8904
25       and section 1, and amendments thereto. 
26       Sec.  6. K.S.A. 75-3738 and 75-3740 and K.S.A. 1999 Supp. 74-8904
27       and 75-3739 are hereby repealed.
28        Sec.  7. This act shall take effect and be in force from and after its
29       publication in the statute book.