ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

Second Regular Session

House: GOV DP 5-2-2-0

HB 2436: state contracts; foreign adversary; prohibition

Sponsor: Representative Diaz, LD 19

Caucus & COW

Overview

Stipulates that a covered company may not enter into a contract with a state agency or political subdivision of this state for goods or services.

History

The Director of the Arizona Department of Administration (ADOA) is authorized by statute to adopt rules that govern the procurement and management of all construction, materials and services to be procured by this state and the disposal of materials (A.R.S. § 41-2511).

Provisions

1. Prohibits a covered company from bidding on, submitting a proposal for or entering into a contract with a state agency or political subdivision for goods or services. (Sec. 1)

2. Requires all companies that submit a proposal or bid for a state contract for goods or services to submit a certification letter to ADOA certifying that the company is not a covered company. (Sec. 1)

3. Directs the following to occur if ADOA determines that a company has submitted a false or misleading certification letter:

a) the company is liable for a civil penalty of $250,000 or twice the amount of the contract, whichever is greater;

b) the state agency or ADOA must terminate the contract with the company; and

c) the company is prohibited from bidding on any state contracts for at least 60 months. (Sec. 1)

4. Authorizes a state agency to enter into a contract for goods manufactured by a covered company if:

a) there are no other reasonable options for the procurement of the specific good;

b) the contract is preapproved by ADOA; and

c) not procuring the good would pose a greater threat than the threat associated with the manufacture of the good by a covered company. (Sec. 1)

5. Stipulates that each bid or offer submitted for a state contract must include a disclosure that states whether 24 months prior to submission, the bidder, offerer or any subsidiaries had any business operations involving contracts with or services from:

a) a foreign adversary;

b) a state-owned enterprise of a foreign adversary; or

c) a company domiciled within a foreign adversary.

6. Allows a bidder or offerer to be given an opportunity after the bid or offer is submitted to submit the required disclosure if not previously done. (Sec. 1)

7. Authorizes a procurement officer to consider the disclosure when evaluating the bid, offer or when awarding the contract. (Sec. 1)

8. Requires a procurement officer to provide a state agency with the name of each entity enumerated in the required disclosure. (Sec. 1)

9. Prohibits a bid or offer to be submitted for a state contract if the bidder, offerer or any subsidiaries has at least 60 months prior to submission had any business operations involving contracts with or services from:

a) a military entity of any foreign adversary;

b) a political party of a foreign adversary; or

c) a federally banned corporation. (Sec. 1)

10. Prescribes that the following must occur if ADOA determines a violation of the prohibited practices:

a) the company is liable for a civil penalty of $250,000 or twice the amount of the contract, whichever is greater;

b) the state agency or ADOA must terminate the contract with the company; and

c) the company is prohibited from bidding on any state contracts for at least 60 months. (Sec. 1)

11. Entitles this legislation the "Protection Procurement Act." (Sec. 2)

12. Defines:

a) company;

b) covered company;

c) domicile;

d) federally banned corporation; and

e) foreign adversary. (Sec. 1)

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i) HB 2436

j) Initials SJ Page 0 Caucus & COW

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