Bill Description: House Bill 889 would amend the state’s procurement laws in numerous ways, including creating a vendor debarment process, making it more difficult to challenge a bid award, and requiring vendors to report financial expenditures.
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Does it in any way restrict public access to information related to government activity or otherwise compromise government transparency, accountability, or election integrity? Conversely, does it increase public access to information related to government activity or increase government transparency, accountability, or election integrity?
House Bill 889 would amend numerous sections (and repeal and replace one) within Chapter 92, Title 67, Idaho Code, the State Procurement Act.
One existing and important element of the procurement process is contained in Section 67-9232, Idaho Code, titled Challenges and Appeals. The bill would newly require “any person or vendor filing a formal written protest of his intention to challenge bid specifications” to “post with the administrator at the time of filing a protest bond in the form of a certified check, cashier's check, bid bond, or surety bond.”
This bond would be equal to 1% of the estimated total value of a contract bid worth less than $10 million or 0.5% of the estimated total value of a contract bid worth more than $10 million.
It says that “failure to post the protest bond at the time of filing the formal written protest shall result in the immediate summary dismissal of the protest by the administrator.”
Most concerning of all, if the protest or appeal is denied, “and the final agency decision issued by the administrator or director finds the protest to be a frivolous protest,” the state “shall retain the protest bond in its entirety as liquidated damages for the delay and administrative costs of the procurement.”
These provisions substantially hamper the challenge and appeal process and would likely discourage appeals, thereby reducing accountability in the procurement process.
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Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?
The bill would also create a new a process termed “debarment” whereby “the administrator may debar a vendor from bidding on any state project or service for a period of up to three (3) years.”
Of note, the law already provides for vendor disqualification in response to a vendor’s failure to perform according to the terms of any contract and other serious offense.
The bill provides several reasons why a vendor could be debarred that are more minor than those currently listed as reasons for disqualification. Among the potential reasons for debarment are “a documented record of unsatisfactory performance on one (1) or more state contracts within the preceding three (3) years based on included contract metrics” or a “failure to complete a project or service within the time frames established in the contract without good cause.”
While these reasons may or may not justify the penalty, another reason for debarment would be a history of filing three or more “frivolous bid protests” within a 24-month period.
So, in addition to the bonding requirement and threatened forfeiture of the bond if a vendor that avails itself of the challenges and appeals process would now risk debarment.
Discouraging challenges and appeals in this manner not only reduces government accountability, it also threatens to push vendors out of the market who are seen as disruptive.
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The bill would prohibit a former elected official from participating in the solicitation, bid, or contract process on behalf of a vendor for one year following their exit from elected office.
It would also prohibit a vendor from employing a former elected official or any individual who has worked in a state agency or institution for one year after winning a bid where such individual participated in the solicitation, bid, or contract process.
While such restrictions are not unprecedented, they do restrict market participation by certain individuals and restrict the freedom of contract between individuals and vendors.
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Does it violate the spirit or the letter of either the United States Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the US Constitution or the Idaho Constitution?
One of the more concerning elements of the bill would be the creation of a new subsection within Section 67-9233, Idaho Code, that says, “Vendors, employees of a vendor, or any persons acting on behalf of a vendor shall report to the secretary of state any financial expenditures over fifty dollars ($50.00), including but not limited to reimbursements for meals and travel.”
While not explicitly stated in this language, the scope of the section suggests that the mandated reporting of expenditures would be in the context of the procurement process, though there are no relevant definitions anywhere in the chapter of what constitutes a financial expenditure by a vendor. There is also no clarity on how this information will be handled or if it will be considered confidential or made public. If the information were made public, it could risk exposing the internal business decisions and practices of a private company to its competitors.
This reporting requirement is vague and (much like with the frivolous bid protest and debarment provisions) seems intended to give the government more leverage against vendors.
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