The 2019 Oregon Legislature did not make many amendments to the Public Contracting Code (ORS chs 279A-279C), but the following affect school district procurement.
HB 2094 (Consideration of Debt to the State). Adds a section to ORS chapter 279A that permits a contracting agency to consider whether the bidder or proposer owes a debt to the state as part of its evaluation of a bid or proposal at any time before executing a public contract. Effective January 1, 2020.
Comment: Although directed at proposers or bidders with a debt to the state, this section applies to all contracting agencies. Rulemaking should clarify what, if any, actions local contracting agencies will have to take to implement this bill.
HB 2415 (Retainage). Amends ORS 279C.570 and 701.420 to require the owner, contractor, or subcontractor to place retainage in in interest-bearing escrow account for contracts over $500,000. Interest on the retainage amount accrues from the date the payment request is approved until the date the retainage is paid to the contractor to which it is due. Applies to contracts entered into on or after January 1, 2020.
Comment: School districts will need to put accounts in place to manage this new requirement.
HB 2496 (Modifications to 1.5 Percent Green Energy Requirement). This bill makes a number of significant amendments to ORS 279C.527 and 279C.528, as follows:
- Adds battery storage in conjunction with solar or geothermal to the definition of "green energy technology."
- Adds a more detailed description of what qualifies as part of the "total contract price." The definition now includes all contracts and subcontracts related to the project, including professional consultants, site demolition, and off-site improvements.
- Adds an exemption for projects with a total contract price under $5 million.
- Adds an option to expend half or more of the required allotment on other energy-reduction strategies if the contracting agency determines that green energy technology is not appropriate or solar fraction on the building site is 75 percent or less.
- Adds a requirement that solar fraction be determined as part of the analysis of whether green energy technology is appropriate.
- Allows aggregation of funds from multiple buildings to construct one green energy project on a specific site.
These amendments apply to contracts first advertised or solicited on or after January 1, 2020.
Comment: ORS 279C.527 and 279C.528 require a public contracting agency to expend 1.5 percent of the cost of certain capital improvement projects on "green energy technology." This has been a problematic requirement for some school districts because the investment frequently does not pencil out over time. These changes will require school districts to make more detailed analyses of suitability. School districts should watch for new Department of Energy rules implementing this bill.
HB 2769 (QBS Amendment). Amends ORS 279C.110 to permit local contracting agencies to allow consideration of pricing when evaluating proposals for architectural, engineering, photogrammetric mapping, transportation planning, and land surveying services. Applies to contracts solicited on or after January 1, 2020.
Comment: First enacted in 2003, Qualifications-Based Selection ("QBS") prohibited state agencies from consideration of pricing when evaluating proposals for certain construction-related professional services until after the top candidate had been selected based solely on qualifications. HB 3316 (2011) extended the application of QBS to local contracting agencies. This amendment restores local contracting agency authority to consider pricing in addition to qualifications. Note that the bill also establishes specific solicitation requirements.
Other Amendments. The 2019 Legislature also enacted SB 50 (exemption of timber sale contracts from Public Contracting Code) and SB 471 (consideration of "conflict materials"), but these bills apply only to the state contracting agencies.
More Information: The full text of each of the bills above is available at https://olis.leg.state.or.us/liz/2019R1/Measures/list/. We are happy to assist with any implementation questions.
