GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 716

Short Title:  Reciprocal Preference Bid Law.	(Public)
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Sponsors: Representative Daughtry.
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Referred to:  State Government.
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April 1, 1993

A BILL TO BE ENTITLED
AN ACT TO PROVIDE THAT A BIDDER WITH A PRINCIPAL PLACE OF BUSINESS IN ANOTHER STATE WITH LAWS OR REGULATIONS CAUSING DISADVANTAGE IN ANOTHER STATE WILL BE AT RECIPROCAL DISADVANTAGE WHEN BIDDING ON A PUBLIC CONTRACT WITH THIS STATE.
The General Assembly of North Carolina enacts:
Section 1. Article 3 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-59.1.  Reciprocal preferences; out-of-State bidders.
(a)	The following definitions apply in this section:
(1)	'In-state preference' means a procedure established by statute, rule, regulation or practice whereby any state or local government procurement agency gives a bidder an advantage in the evaluation of bids based on whether the bidder maintains his principal place of business within the borders of the State or locality, and includes any advantage given to a bidder based on whether the goods or services offered in a bid were produced, manufactured, mined, or grown within the borders of the State or locality.
(2)	'Out-of-State bidder' means a bidder who does not have a regular place of business in North Carolina.
(3)	'Principal place of business' means an office, factory, warehouse or other space of a bidder which is recognized by any state or local government as the basis for applying an in-state preference in favor of the bidder.
(4)	'Regular place of business' means a bona fide office, factory, warehouse or other space which is regularly maintained by the bidder, occupied by one or more of the bidder's employees, and used in carrying on the bidder's business and shall not include the maintenance of a temporary job site or field office in this State, the storage of goods in this State, or the employment of an independent agent or subcontractor in this State.
(b)	Whenever a competitive bidding procedure is employed in accordance with G.S 143-52, a bidder with its principal place of business in another state which has provisions of state law, rules, or regulations causing disadvantage to any bidder for a public contract to provide like goods, services, or both to that state because the bidder's principal place of business is located outside that state shall have like conditions applied to it in accordance with rules adopted pursuant this section.  The reciprocal in-state preference shall apply even in the absence of a bidder having a regular place of business in this State.
(c)	The Secretary of Administration shall adopt rules for the competitive bidding of contracts with this State that:
(1)	Apply on a reciprocal basis against an out-of-State bidder any in-state preference which is applied in favor of that bidder by the state or locality in which the bidder's principal place of business is located.
(2)	Apply any reciprocal in-state preference reasonably in a similar manner and to similar effect as the other state or locality such that:
a.	Where an in-state preference is applied by another state or locality in the form of a percentage which is added to or subtracted from bidders' prices, markups, or discounts the Secretary shall similarly apply the same percentage against an affected out-of-State bidder; and
b.	Where an in-state preference is applied by another state or a locality in the form of a categorical rejection of certain bids, the Secretary shall apply a similar categorical rejection against an affected out-of-State bidder.
(d)	The Secretary of Administration may waive the application of a reciprocal in-state preference where the resulting prices for goods and services would exceed the reasonable cost estimate of the State department, institution, or agency that would use the goods and services or would otherwise be unreasonably high.
(e)	The Secretary of Administration shall waive a reciprocal in-state preference:
(1)	On procurements supported by federal funds where federal rules prohibit the use of residential preference.
(2)	When the action would result in an award to a vendor who has a poor record of contract performance, including complaints or contract terminations.
(3)	When, in accordance with G.S. 143-57, an emergency requires the immediate delivery of goods or performance of the service.
(f)	Nothing in this section shall be construed to:
(1)	Require the award of any contract to a bidder whose bid is not most advantageous to the State considering cost and other criteria.
(2)	Affect the preference given to North Carolina producers of certain products under G.S. 143-59.
(3)	Limit authority granted to the Secretary of Administration to obtain goods or services in the open market.
(g)	The Secretary of Administration shall maintain and make available for public inspection a list to be updated annually of states having statutes, rules, or regulations which grant in-state preferences in the competitive bidding for goods and services.  The Secretary of Administration shall compile the list based on surveys conducted by the Secretary and research conducted by national organizations of state and local governments, procurement agencies, government officials, and purchasing agents. The Secretary of Administration may receive information from prospective bidders which indicates that any state or local government agency outside of North Carolina applies an in-state preference in its procurement statutes, rules, regulations, ordinances, charters, or practices.
(h)	The Secretary of Administration shall prepare annually a report to the Governor, the State Auditor, and the General Assembly on the fiscal consequences to the State of applying the reciprocal in-state preference required by this section."
Sec. 2.  This act becomes effective January 1, 1994, and applies to competitive bids solicited by the State on or after that date.