GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 306

Short Title:  GPAC/Purchasing Activities.	(Public)
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Sponsors: (by request) Representatives Hensley, Blue, Barnes, Diamont, Hackney, H. Hunter, G. Miller, Nesbitt, and Robinson.
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Referred to:  Appropriations.
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February 25, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT THE RECOMMENDATIONS OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE REGARDING STATE PURCHASING ACTIVITIES.
The General Assembly of North Carolina enacts:
––-UPDATE STATE PURCHASING MANUAL
Section 1.  (a)	The Division of Purchase and Contract of the Department of Administration shall update the State Purchasing Manual so that it:
(1)	Reflects current statutory and administrative requirements;
(2)	Provides agencies that are carrying out purchasing activity under delegated authority with guidance on informal purchasing policies such as proposed dollar thresholds on oral and written quotes, the number of quotes required, and documentation requirements;
(3)	Includes a buyer's code of ethics that sets out the conduct expected of State employees and prospective vendors; and
(4)	Includes policies and procedures for the handling of bid protests.
(b)	G.S. 143-53 reads as rewritten:
"§ 143-53.  Rules.
The Secretary of Administration may adopt rules governing the following:
(1)	Prescribing the routine and procedures to be followed in canvassing bids and awarding contracts, and for reviewing decisions made pursuant thereto, and the decision of the reviewing body shall be the final administrative review.
(2)	Prescribing routine for securing bids on items that do not exceed the bid value benchmark established under the provisions of G.S. 143-53.1.
(3)	Defining contractual services for the purposes of G.S. 143-49 (3).
(4)	Prescribing items and quantities, and conditions and procedures, governing the acquisition of goods and services which may be delegated to departments, institutions and agencies, notwithstanding any other provisions of this Article.
(5)	Prescribing conditions under which purchases and contracts for the purchase, rental or lease of equipment, materials, supplies or services may be entered into by means other than competitive bidding.
(6)	Prescribing conditions under which partial, progressive and multiple awards may be made.
(7)	Prescribing conditions and procedures governing the purchase of used equipment, materials and supplies.
(8)	Providing conditions under which bids may be rejected in whole or in part.
(9)	Prescribing conditions under which information submitted by bidders or suppliers may be considered proprietary or confidential.
(10)	Prescribing procedures for making purchases under programs involving participation by two or more levels or agencies of government, or otherwise with funds other than State-appropriated.
(11)	Prescribing procedures to encourage the purchase of North Carolina farm products, and products of North Carolina manufacturing enterprises.
(12)	Repealed by Session Laws 1987, c. 827, s. 216.
(13)	Prescribing procedures for handling bid protests.
The purpose of rules promulgated hereunder shall be to promote sound purchasing management.
Prior to adopting rules under this section, the Secretary of Administration may consult with the Advisory Budget Commission."
(c)	This section is effective upon ratification.
––-IMPROVE GOV'T PURCHASE STDS
Sec. 2.  (a)	G.S. 143-49 reads as rewritten:
"§ 143-49. Powers and duties of Secretary.
The Secretary of Administration shall have power and authority, and it shall be his duty, subject to the provisions of this Article:
(1)	To canvass sources of supply, and to purchase or to contract for the purchase, lease and lease-purchase of all supplies, materials, equipment and other tangible personal property required by the State government, or any of its departments, institutions or agencies under competitive bidding or otherwise as hereinafter provided.
(2)	To establish and enforce specifications or standards that shall apply to all supplies, materials and equipment to be purchased or leased for the use of the State government or any of its departments, institutions or agencies. The Secretary shall develop a program for prioritizing the commodities for which specifications or standards need to be developed according to the existing demand for the commodities and the current volume of purchases of the commodities.  The Secretary shall also consider the adoption of specifications or standards that have been developed or adopted by other governmental entities.
(3)	To purchase or to contract for, by sealed, competitive bidding or other suitable means, all contractual services and needs of the State government, or any of its departments, institutions, or agencies; or to authorize any department, institution or agency to purchase or contract for such services.
When the award of any contract for contractual services exceeding a cost of one hundred thousand dollars ($100,000) requires negotiation with prospective contractors, the Secretary shall request and the Attorney General shall assign a representative of the office of the Attorney General to assist in negotiation for the award of the contract. It shall be the duty of such representative to assist and advise in obtaining the most favorable contract for the State, to evaluate all proposals available from prospective contractors for that purpose, to interpret proposed contract terms and to advise the Secretary or his representatives of the liabilities of the State and validity of the contract to be awarded. All contracts and drafts of such contracts shall be prepared by the office of the Attorney General and copies thereof shall be retained by such office for a period of three years following the termination of such contracts. The term 'contractual services' as used in this subsection shall mean work performed by an independent contractor requiring specialized knowledge, experience, expertise or similar capabilities wherein the service rendered does not consist primarily of acquisition by this State of equipment or materials and the rental of equipment, materials and supplies. The term 'negotiation' as used herein shall not be deemed to refer to contracts entered into or to be entered into as a result of a competitive bidding process.
(4)	To have general supervision of all storerooms and stores operated by the State government, or any of its departments, institutions or agencies and to have supervision of inventories of all tangible personal property belonging to the State government, or any of its departments, institutions or agencies. The duties imposed by this subdivision shall not relieve any department, institution or agency of the State government from accountability for equipment, materials, supplies and tangible personal property under its control.
(5)	To make provision for or to contract for all State printing, including all printing, binding, paper stock and supplies or materials in connection with the same.
(6)	To make available to nonprofit corporations operating charitable hospitals, to local nonprofit community sheltered workshops or centers that meet standards established by the Division of Vocational Rehabilitation of the Department of Human Resources, to private nonprofit agencies licensed or approved by the Department of Human Resources as child placing agencies or residential child-care facilities, and to counties, cities, towns, governmental entities and other subdivisions of the State and public agencies thereof in the expenditure of public funds, the services of the Department of Administration in the purchase of materials, supplies and equipment under such rules, regulations and procedures as the Secretary of Administration may adopt. In adopting rules and regulations any or all provisions of this Article may be made applicable to such purchases and contracts made through the Department of Administration, and in addition the rules and regulations shall contain a requirement that payment for all such purchases be made in accordance with the terms of the contract. Prior to adopting rules and regulations under this subdivision, the Secretary of Administration may consult with the Advisory Budget Commission."
(b)	The Secretary of Administration shall evaluate the need to reassign standards engineers to the Division of Purchase and Contract and shall make the reassignments as he deems appropriate.
(c)	Subsection (a) of this section is effective upon ratification.  Subsection (b) of this section becomes effective July 1, 1993.
––-IMPROVE GOV'T PROCUREMENT
Sec. 3.  (a)	G.S. 143-49 is amended by adding a new subdivision to read:
"(3b)	To develop and implement innovative procurement practices so as to reduce the cost of ordering supplies and services, reduce the volume of inventory maintained by State departments and agencies, and increase the quality of products purchased.  These innovative procurement practices shall include (i) requiring State departments and agencies to order items from prime vendors for delivery at the time the items are needed instead of ordering for stock, when it is advisable to do so, and (ii) urging State departments and agencies to place orders with vendors electronically.
The Secretary may appoint a task force to assist him in the implementation of this duty."
(b)	This section is effective upon ratification.
––-PRIVATIZATION OF STATE SERVICES
Sec. 4.  (a)	Prior to March 15, 1994, the Office of State Budget and Management shall develop and propose to the General Assembly a policy and a program for contracting out to the private sector services traditionally performed by State employees.  The policy shall define the goals and objectives of a program for contracting out to the private sector, identify a strategy for implementation of the program, and assign responsibility for administration of the program to the Office of State Budget and Management.
The program to implement the policy shall consist of the following components:
(1)	The identification of the current functions and activities performed by the State that have the greatest potential to benefit from contracting out.  In making this determination, the Office of State Budget and Management shall consider whether (i) the service is available in the private sector, (ii) the demand for the service is increasing, decreasing, or remaining constant, (iii) management of the proposal can ensure quality, and (iv) outside cost is less expensive.
(2)	A framework for determining whether the identified functions should be contracted out.  This framework shall provide for (i) a study of the identified function by a task force made up of at least one representative of the Division of Purchase and Contract and one representative of each agency that will be using the service, (ii) the identification of direct service costs, overhead costs, and general administrative costs of the function being performed, (iii) the identification of the annual, one-time, and other costs to the State of contracting out, (iv) the disposition of any State assets used in the current process, and (v)  the determination of whether contracting out of the function would be financially beneficial.
Except as otherwise provided by law, the Office of State Budget and Management shall not implement either the policy or program without the approval of the General Assembly.
(b)	This section is effective upon ratification.
––-IMPROVE STATE TERM CONTRACTS
Sec. 5.  (a)	G.S. 143-53 reads as rewritten:
"§ 143-53.  Rules.
The Secretary of Administration may adopt rules governing the following:
(1)	Prescribing the routine and procedures to be followed in canvassing bids and awarding contracts, and for reviewing decisions made pursuant thereto, and the decision of the reviewing body shall be the final administrative review.
(2)	Prescribing routine for securing bids on items that do not exceed the bid value benchmark established under the provisions of G.S. 143-53.1.
(2a)	Prescribing the terms and conditions under which the State enters into term contracts so that all term contracts shall permit State departments, institutions, and agencies to make (i) purchases of under fifty dollars ($50.00) off term contracts and (ii) large-volume purchases, which exceed limits established by the Secretary, under separate contracts.
(3)	Defining contractual services for the purposes of G.S. 143-49 (3).
(4)	Prescribing items and quantities, and conditions and procedures, governing the acquisition of goods and services which may be delegated to departments, institutions and agencies, notwithstanding any other provisions of this Article.
(5)	Prescribing conditions under which purchases and contracts for the purchase, rental or lease of equipment, materials, supplies or services may be entered into by means other than competitive bidding.
(6)	Prescribing conditions under which partial, progressive and multiple awards may be made.
(7)	Prescribing conditions and procedures governing the purchase of used equipment, materials and supplies.
(8)	Providing conditions under which bids may be rejected in whole or in part.
(9)	Prescribing conditions under which information submitted by bidders or suppliers may be considered proprietary or confidential.
(10)	Prescribing procedures for making purchases under programs involving participation by two or more levels or agencies of government, or otherwise with funds other than State-appropriated.
(11)	Prescribing procedures to encourage the purchase of North Carolina farm products, and products of North Carolina manufacturing enterprises.
(12)	Repealed by Session Laws 1987, c. 827, s. 216.
The purpose of rules promulgated hereunder shall be to promote sound purchasing management.
Prior to adopting rules under this section, the Secretary of Administration may consult with the Advisory Budget Commission."
(b)	This section is effective upon ratification.
––-EXPEDITE STATE BID REVIEW
Sec. 6.  (a)	G.S. 143-52 reads as rewritten:
"§ 143-52.  Competitive bidding procedure; consolidation of estimates by Secretary; bids; awarding of contracts.
As feasible, the Secretary of Administration shall compile and consolidate all estimates of supplies, materials, equipment and contractual services needed and required by State departments, institutions and agencies to determine the total requirements of any given commodity.  Where the total requirements are projected to involve an expenditure in excess of the expenditure benchmark established under the provisions of G.S. 143-53.1 and where the competitive bidding procedure is employed as provided in this Article, sealed bids shall be solicited by advertisement in a newspaper of statewide circulation at least once and at least 10 days prior to the date designated for opening of the bids and awarding of the contract:  Provided, other methods of advertisement may be adopted by the Secretary of Administration when such other method is deemed more advantageous for certain items or commodities.  Regardless of the amount of the expenditure, under the competitive bidding procedure it shall be the duty of the Secretary of Administration to solicit bids direct by mail from qualified sources of supply.  Except as otherwise provided under this Article, contracts for the purchase of supplies, materials or equipment shall be based on competitive bids and acceptance made of the lowest and best bid(s)	most advantageous to the State as determined upon consideration of the following criteria: prices offered; the quality of the articles offered; the general reputation and performance capabilities of the bidders; the substantial conformity with the specifications and other conditions set forth in the request for bids; the suitability of the articles for the intended use; the personal or related services needed; the transportation charges; the date or dates of delivery and performance; and any other factors deemed pertinent or peculiar to the purchase in question, which if controlling shall be made a matter of record.  Competitive bids on the contracts shall be received in accordance with rules and regulations to be adopted by the Secretary of Administration, which rules and regulations shall prescribe for the manner, time and place for proper advertisement for the bids, the time and place when bids will be received, the articles for which the bids are to be submitted and the specifications prescribed for the articles, the number of the articles desired or the duration of the proposed contract, and the amount, if any, of bonds or certified checks to accompany the bids.  Bids shall be publicly opened. Any and all bids received may be rejected.  Each and every bid conforming to the terms of the invitation, together with the name of the bidder, shall be tabulated or otherwise entered as a matter of record, and all such records with the name of the successful bidder indicated thereon shall, after the award of the contract, be open to public inspection.  Provided, that trade secrets, test data and similar proprietary information may remain confidential.  Bids shall not be provided to the ordering State departments, institutions, or agencies for their review before an award is made unless the ordering departments, institutions, or agencies request the opportunity to review them.  Bids shall not be provided to the Board of Award for review prior to award unless the award is in excess of one hundred thousand dollars ($100,000) or the Secretary of Administration determines that review by the Board of Award is appropriate in a given case.  A bond for the faithful performance of any contract may be required of the successful bidder at bidder's expense and in the discretion of the Secretary of Administration.  After contracts have been awarded, the Secretary of Administration shall certify to the departments, institutions and agencies of the State government the sources of supply and the contract price of the supplies, materials and equipment so contracted for.  Prior to adopting other methods of advertisement under this section, the Secretary of Administration may consult with the Advisory Budget Commission.  Prior to adopting rules and regulations under this section, the Secretary of Administration may consult with the Advisory Budget Commission."
(b)	This section becomes effective October 1, 1993.
––-INFO. SYS./GOVT. PURCHASES
Sec. 7.  (a)	G.S. 143-49 is amended by adding a new subdivision to read:
"(3a)	To monitor the purchasing activity of the State and its departments, institutions, and agencies and to require standardized periodic reporting on the volume of purchases by commodity, service, and vendor category, and the volume of purchases under term contract and open-market procedures.  The Secretary shall compile and analyze the data no less than annually.
	The Secretary shall also conduct a biennial management review of the purchasing operations in State government and in each of its departments, institutions, and agencies to assure that they are using effective and efficient purchasing practices in accordance with law.  The Secretary may recommend measures to improve purchasing operations.
	The Secretary shall report his findings and recommendations under this subdivision to the Governor and the General Assembly on an annual basis."
(b)	The General Assembly finds that the Division of Purchase and Contract of the Department of Administration needs information on commodities purchased by State departments and agencies on the open market and under term contract so that the Office of State Controller can (i) determine expected volume of purchases by line items for new term contract solicitations, and (ii) oversee the use of term contracts and open-market purchases; therefore, the Office of State Controller shall give high priority to a management information system on purchase activity by State departments and agencies when it plans for the implementation of a new accounting system.  Until the State Controller has such a system in operation, the Division of Purchase and Contract of the Department of Administration shall direct all State departments and agencies to report to it on commodities purchased on the open market and under term contract, in accordance with G.S. 143-49(3a), and all State departments and agencies shall report as directed by the Division of Purchase and Contract.
(c)	This section is effective upon ratification.
––-CLARIFY CORRECTION ENTERPRISES
Sec. 8.  (a)	The Department of Administration, Purchase and Contracts Division, in consultation with the Department of Correction, shall develop policy concerning the manufacture of goods and the provision of services by Correction Enterprises.  The policy shall be for distribution to all State agencies and departments and shall:
(1) 	Address the appropriate levels of production and services by Correction Enterprises;
(2)	Provide guidelines for purchase by State agencies from Correction Enterprises whenever Correction Enterprises offers lower prices for quality products than other potential vendors; and
(3)	Identify the potential benefits to prisoner rehabilitation as a result of the Correction Enterprises program.
The Department of Administration shall submit the policy for approval by the General Assembly by March 15, 1994.
(b)	This section is effective upon ratification.
––-COMBINE NC/US SURPLUS PROP
Sec. 9.  (a)	The Department of Administration shall study the feasibility of consolidating the property units of the State Surplus Property Section and the Federal Surplus Property Section at the federal facility site.  In the course of the study the Department shall consider enhanced service the consolidation would provide to customers, the funds that the State would realize from the sale of the State facility, annual savings that would result from decreased staffing required by a consolidated facility, and the feasibility and cost of constructing sufficient additional space at the federal facility to house a consolidated facility.
The Department shall report to the General Assembly on the results of this study before March 15, 1994.
(b)	This section is effective upon ratification.
––-STATE SURPLUS MANAGEMENT SYSTEM
Sec. 10.  (a)	The Secretary of Administration shall, after consultation with the State Controller, develop a central automated inventory management system to facilitate agency and department access to information on surplus property.  The system shall combine State and federal surplus inventory information and shall be accessible from all State agencies and local governments.  The system shall provide information on the available surplus property inventory, the age and fair market value of the inventory, and the physical condition of the items and the dates they were reported as surplus.
The Secretary of Administration shall report to the General Assembly prior to March 15, 1994, on the system he develops pursuant to this section.
(b)	This section is effective upon ratification.
––-SURPLUS PROPERTY SALE PROCEEDS
Sec. 11.  (a)	G.S. 143-64.05 reads as rewritten:
"§ 143-64.05.  Warehousing, transfer, etc., charges.
The State agency for surplus property may assess and collect service charges or fees for the acquisition, receipt, warehousing, distribution or transfer of any State surplus property.  All receipts from the transfer or sale of surplus, obsolete, or unused equipment of State departments, institutions, and agencies, shall be available to the State departments, institutions, and agencies that reported the surplus for the purchase of fixed assets and shall be in addition to all other funds appropriated for fixed assets."
(b)	This section becomes effective July 1, 1993.
––-MINORITY BUSINESS COORDINATOR
Sec. 12.  (a)	G.S. 143-49 reads as rewritten:
"§ 143-49.  Powers and duties of Secretary.
The Secretary of Administration shall have power and authority, and it shall be his duty, subject to the provisions of this Article:
(1)	To canvass sources of supply, and to purchase or to contract for the purchase, lease and lease-purchase of all supplies, materials, equipment and other tangible personal property required by the State government, or any of its departments, institutions or agencies under competitive bidding or otherwise as hereinafter provided.
(2)	To establish and enforce specifications which shall apply to all supplies, materials and equipment to be purchased or leased for the use of the State government or any of its departments, institutions or agencies.
(3)	To purchase or to contract for, by sealed, competitive bidding or other suitable means, all contractual services and needs of the State government, or any of its departments, institutions, or agencies; or to authorize any department, institution or agency to purchase or contract for such services.
		When the award of any contract for contractual services exceeding a cost of one hundred thousand dollars ($100,000) requires negotiation with prospective contractors, the Secretary shall request and the Attorney General shall assign a representative of the office of the Attorney General to assist in negotiation for the award of the contract. It shall be the duty of such representative to assist and advise in obtaining the most favorable contract for the State, to evaluate all proposals available from prospective contractors for that purpose, to interpret proposed contract terms and to advise the Secretary or his representatives of the liabilities of the State and validity of the contract to be awarded. All contracts and drafts of such contracts shall be prepared by the office of the Attorney General and copies thereof shall be retained by such office for a period of three years following the termination of such contracts. The term 'contractual services' as used in this subsection shall mean work performed by an independent contractor requiring specialized knowledge, experience, expertise or similar capabilities wherein the service rendered does not consist primarily of acquisition by this State of equipment or materials and the rental of equipment, materials and supplies. The term 'negotiation' as used herein shall not be deemed to refer to contracts entered into or to be entered into as a result of a competitive bidding process.
(4)	To have general supervision of all storerooms and stores operated by the State government, or any of its departments, institutions or agencies and to have supervision of inventories of all tangible personal property belonging to the State government, or any of its departments, institutions or agencies. The duties imposed by this subdivision shall not relieve any department, institution or agency of the State government from accountability for equipment, materials, supplies and tangible personal property under its control.
(5)	To make provision for or to contract for all State printing, including all printing, binding, paper stock and supplies or materials in connection with the same.
(6)	To make available to nonprofit corporations operating charitable hospitals, to local nonprofit community sheltered workshops or centers that meet standards established by the Division of Vocational Rehabilitation of the Department of Human Resources, to private nonprofit agencies licensed or approved by the Department of Human Resources as child placing agencies or residential child-care facilities, and to counties, cities, towns, governmental entities and other subdivisions of the State and public agencies thereof in the expenditure of public funds, the services of the Department of Administration in the purchase of materials, supplies and equipment under such rules, regulations and procedures as the Secretary of Administration may adopt. In adopting rules and regulations any or all provisions of this Article may be made applicable to such purchases and contracts made through the Department of Administration, and in addition the rules and regulations shall contain a requirement that payment for all such purchases be made in accordance with the terms of the contract. Prior to adopting rules and regulations under this subdivision, the Secretary of Administration may consult with the Advisory Budget Commission.
(7)	To designate an employee of the Purchase and Contract Division to serve as a coordinator for the conduct of outreach programs designed to encourage participation by small, minority, physically handicapped, and women contractors in State purchasing of goods and services.  The minority business coordinator shall:
	a.	Conduct vendor fairs and seminars and prepare information packets that provide such businesses with instructions on doing business with the State; and
	b.	Coordinate with the Small Business Administration and the Minority Business Development Administration to facilitate participation by such businesses."
(b)	This section is effective upon ratification.
––-SINGLE PRIME/CAPITAL PROJECTS
Section 13.  (a)	Section 3 of Chapter 480 of the 1989 Session Laws reads as rewritten:
"Sec. 3. The State Construction Office of the Department of Administration, the Division of School Planning of the Department of Public Education, the Division of Facility Services of the Department of Human Resources, the North Carolina Association of County Commissioners, the North Carolina League of Municipalities, the School Board Association, and the North Carolina Hospital Association shall monitor and study the separate-prime and single-prime contract systems in the bidding of public building projects and shall compile data on the total verifiable contractual, legal, and administrative cost to the public. 
The State Building Commission shall develop the necessary forms and procedures to survey the public contracts let.  The public bodies responsible for the award of contracts  shall submit all necessary records to the appropriate office, division, association, or individual as directed by the State Building Commission.  The appropriate office, division, association, or individual shall maintain records of public contracts from bodies under their supervision or bodies that are their members.
The State Building Commission shall also develop additional forms and procedures to survey State agencies regarding the definitive and quantifiable impact in terms of State administrative costs, litigation costs, change orders, project completion, and occupancy costs resulting from using the separate-prime and single-prime contract systems.
An executive summary of data shall be submitted to the State Building Commission and such data shall be compiled and analyzed in a report to be made to the 1995 Session of the General Assembly.  If the State Building Commission's analysis of the data on separate-prime and single-prime contracts indicates that it is financially beneficial to use single-prime contracting as the primary method of contracting, the State Building Commission shall recommend to the 1995 Session of the General Assembly that the State use single-prime as the primary method of contracting.  The State Building Commission shall also identify the necessary steps, including statutory changes, that are needed to increase the use of single-prime contracts."
(b)	This section is effective upon ratification.
––-IMPROVE BLDG. DESIGNER SELECTION
Sec. 14.  (a)	G.S. 143-341(3) reads as rewritten:
"(3)	Architecture and Engineering:
	a.	To examine and approve all plans and specifications for the construction or renovation of:
1.	All State buildings; and
2.	All community college buildings requiring the estimated expenditure for construction or repair work for which public bidding is required under G.S. 143-129
		prior to the awarding of a contract for such work; and to examine and approve all changes in those plans and specifications made after the contract for such work has been awarded. To reduce the cost to the State of change orders, the Office of State Construction shall reevaluate the use of designers to issue construction change orders when the change orders may result from design defects.
	b.	To prepare preliminary studies and cost estimates and otherwise to assist all agencies in the preparation of requests for appropriations for the construction or renovation of all State buildings.
	c.	To supervise the letting of all contracts for the design, construction or renovation of all State buildings and all community college buildings whose plans and specifications must be examined and approved under a.2. of this subdivision.
			The Office of State Construction shall develop detailed estimates of the expected design costs for capital projects to provide a basis for (i) evaluating the reasonableness of fees proposed by selected design firms and (ii) negotiating changes in contract fees when there is a change in the scope of work.  If the Office of State Construction uses an outside contractor to develop the estimates of expected design costs, that contractor shall not be eligible for selection as the project designer.
	d.	To supervise and inspect all work done and materials used in the construction or renovation of all State buildings and all community college buildings whose plans and specifications must be examined and approved under a.2. of this subdivision; and no such work may be accepted by the State or by any State agency until it has been approved by the Department.  The contract with a designer shall require that the designer provide a specific plan for inspection during the construction phase of a project."
(b)	This section is effective upon ratification.