This rule was filed as 1 NMAC
5.3
TITLE 1 GENERAL GOVERNMENT
ADMINISTRATION
CHAPTER 4 STATE PROCUREMENT
PART 2 RESIDENT BUSINESS AND
MANUFACTURER PREFERENCES
1.4.2.1 ISSUING AGENCY: General
Services Department, State Purchasing Division
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1.4.2.2 SCOPE: All executive branch
state agencies
A. Applicability. Except as provided in Subsection 2.2 [now
Subsection B of 1.4.2.2 NMAC], this rule applies to all competitive-sealed-bid
procurements and all competitive-price-quote small purchases by state agencies
and local public bodies.
B. Inapplicability. This rule does not apply in the following
situations:
(1)
when a procurement method other than competitive sealed bids (or
competitive price quotes for small purchases) is used; or
(2)
when a public works construction contract is being procured; or
(3)
when the expenditure of federal funds designated for a specific purchase
is involved; or
(4) for any bid price greater than five
million dollars ($5,000,000).
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1.4.2.3 STATUTORY AUTHORITY: 1978
Comp., Section 13-1-21, enacted by Laws 1979, Chapter 72, Section 1, amended by
Laws 1981, Chapter 104, Section 1; Laws 1988, Chapter 84, Section 1; Laws 1989,
Chapter 310, Section 1; Laws 1995, Chapter 60, Section 1; Laws 1997, Chapter 1,
Section 2; Laws 1997, Chapter 2, Section 2; Laws 1997, Chapter 3, Section 1.
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1.4.2.4 DURATION: Permanent.
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1.4.2.5 EFFECTIVE DATE: January 15,
1998 unless a later date is cited at the end of a section or paragraph.
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1.4.2.6 OBJECTIVE: Section 13-1-22
NMSA 1978 is titled "resident business and manufacturer certification;
application; information" and states in relevant part, "no resident
business or resident manufacturer, as those terms are defined in Section
13-1-21 NMSA 1978, shall be given any preference in the awarding of contracts
for furnishing materials or services to a state agency, unless the resident
business or resident manufacturer shall have qualified with the state
purchasing agent as a resident business or resident manufacturer, or both, by
making application to the state purchasing agent and receiving from him a
certification number." Therefore,
the objective of this rule is to establish a process for a resident business or
resident manufacturer to attain a certification number.
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1.4.2.7 DEFINITIONS:
A. "Affiliate"
means an entity that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with the qualifying
business through ownership of voting securities representing a majority of the
total voting power of the entity.
B. "Principal
place of business" means the place in which a business:
(1)
earns the largest percentage of its revenues; and
(2)
owns the largest percentage of its capital assets; and
(3)
employs the largest percentage of its full-time equivalent employees. A
business can have only one principal place of business.
C. "Resident
business" means a New Mexico resident business or a New York state
business enterprise.
D. "New
Mexico resident business" means a business which, at the time a contract
is awarded, is authorized to do and is doing business under the laws of this
state and:
(1)
maintains its principal place of business in this state; or
(2)
has staffed an office in this state and has paid applicable state taxes
for two years prior to the awarding of the contract and has five or more employees
who are residents of this state; or
(3) is an affiliate of a business which meets
the requirements of Paragraph 7.4.1. or Paragraph 7.4.2 [now Paragraph (1) or
(2) of Subsection D of 1.4.2.7 NMAC] above.
E. "New
York state business enterprise" means a business enterprise, including
sole proprietorship, partnership or corporation, that offers for sale or lease
or other form of exchange, goods or commodities that are substantially
manufactured, produced or assembled in New York state, or services, other than
construction services, that are substantially performed within New York state.
F. "Resident
manufacturer" means a person who offers materials grown, produced,
processed or manufactured wholly in the state; provided, however, that a New
York state business enterprise shall be deemed to be a resident manufacturer
solely for the purpose of evaluating the New York state business enterprise's
bid against the bid of a resident manufacturer that is not a New York state
business enterprise.
G. "Recycled
content goods" means supplies and materials composed in whole or in part
of recycled materials; provided that the recycled materials content meets or
exceeds the minimum content standards required by bid specifications.
H. "Virgin
content goods" means supplies and materials that are wholly composed of
nonrecycled materials or do not meet minimum recycled content standards
required by bid specifications.
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1.4.2.8 APPLICATION OF PREFERENCES:
A. Bids
from nonresident businesses and resident businesses. When bids are received only from nonresident businesses and
resident businesses and the lowest responsible bid is from a nonresident
business, the contract shall be awarded to the resident business whose bid is
nearest to the bid price of the otherwise low nonresident business bidder if
the bid price of the resident bidder is made lower than the bid price of the
nonresident business when multiplied by a factory [sic] of 0.95.
B. Bids
from nonresident businesses and resident manufacturers. When bids are received only from nonresident
businesses and resident manufacturers and the lowest responsible bid is from a
nonresident business, the contract shall be awarded to the resident
manufacturer whose bid is nearest to the bid price of the otherwise low nonresident
business bidder if the bid price of the resident manufacturer is made lower
than the bid price of the nonresident business when multiplied by a factor of
0.95.
C. Bids
from resident businesses and resident manufacturers. When bids are received only from resident businesses and resident
manufacturers and the lowest responsible bid is from a resident business, the
contract shall be awarded to the resident manufacturer whose bid is nearest to
the bid price of the otherwise low resident business bidder if the bid price of
the resident manufacturer is made lower than the bid price of the resident
business when multiplied by a factor of 0.95.
D. Bids
from resident manufacturers, resident businesses and nonresident businesses and
the lowest responsible bid is from a resident business. When bids are received from resident
manufacturers, resident businesses and nonresident businesses and the lowest
responsible bid is from a resident business, the contract shall be awarded to
the resident manufacturer whose bid is nearest to the bid price of the
otherwise low resident business bidder if the bid price of the resident
manufacturer is made lower than the bid price of the resident business when
multiplied by a factor of 0.95.
E. Bids
from resident manufacturers, resident businesses and nonresident businesses and
the lowest responsible bid is from a nonresident business. When bids are received from resident
manufacturers, resident businesses and nonresident businesses and the lowest
responsible bid is from a nonresident business, the contract shall be awarded
to the resident manufacturer whose bid is nearest to the bid price of the
otherwise low nonresident business bidder if the bid price of the resident
manufacturer is evaluated as lower than the bid price of the nonresident
business when multiplied by a factor of 0.95.
If there is no resident manufacturer eligible for award under this
provision, then the contract shall be awarded to the resident business whose
bid is nearest to the bid price of the otherwise low nonresident business
bidder if the bid price of the resident business is made lower than the bid
price of the nonresident business when multiplied by a factor of 0.95.
(1)
When bids are received for virgin content goods only or for recycled
content goods only, Subsections 8.3 and 8.4 [now Subsections C and D of 1.4.2.8
NMAC] shall apply.
(2)
When bids are received for both recycled content goods and virgin
content goods and the lowest responsible bid is for virgin content goods, the
contract shall be awarded to:
(a) a resident manufacturer offering the lowest bid on recycled
content goods of equal quality if the bid price of the resident manufacturer when
multiplied by a factor of .90 is made lower than the otherwise low virgin
content goods bid price;
(b) a resident business offering a bid on recycled content goods
of equal quality if:
(i) the bid price of no resident manufacturer
following application of the preference allowed in 8.5.2.1 of this subsection
[now Subparagraph (a) of Paragraph (2) of Subsection E of 1.4.1.8 NMAC] can be
made sufficiently low; and
(ii) the lowest bid price of the resident
business when multiplied by a factor of .90 is made lower than the otherwise
low virgin content goods bid price; or
(c) a nonresident business or nonresident manufacturer offering recycled
content goods of equal quality if:
(i) the bid price of no resident business or
resident manufacturer following application of the preference allowed in
8.5.2.1 or 8.5.2.2 of this subsection [now Subparagraph (a) or (b) of Paragraph
(2) of Subsection E of 1.4.2.8 NMAC] can be made sufficiently low; and
(ii) the lowest bid price of a nonresident
offering recycled content goods when multiplied by a factor of .95 is made
lower than the otherwise low virgin content bid price.
(3)
When bids are received for both recycled content goods and virgin
content goods, and the lowest responsible bid is for recycled content goods
offered by a nonresident business or nonresident manufacturer, the contract
shall be awarded to:
(a) a resident manufacturer offering the lowest bid on recycled
content goods of equal quality if the bid price of the resident manufacturer when
multiplied by a factor of .95 is made lower than the otherwise low recycled
content goods bid price; or
(b) a resident business offering a bid on recycled content goods
of equal quality if:
(i) the bid price
of no resident manufacturer following application of the preference allowed in
8.5.3.1 of this subsection can be made sufficiently low; and
(ii) the lowest bid price of the resident business
when multiplied by a factor of .95 is made lower than the otherwise low
recycled content goods bid price offered by a nonresident business or
manufacturer.
(4)
When bids are received for both recycled content goods and virgin content
goods, and the lowest responsible bid is for recycled content goods offered by
a resident business, the contract shall be awarded to a resident manufacturer
offering the lowest bid on recycled content goods of equal quality if the bid
price of the resident manufacturer when multiplied by a factor of .95 is made
lower than the otherwise low recycled content goods bid price.
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1.4.2.9 PREQUALIFICATION:
A. Resident
business. No business shall be given
any preference in the awarding of contracts by a state agency or local public
body unless the business has prequalified a resident business by making
application to the state purchasing agent and receiving from him a
certification number. The procedure for
application and certification shall be as follows:
(1)
the state purchasing agent shall prepare an application form for
certification as a resident business requiring such information and proof as he
deems necessary to prequalify the applicant under the terms of this rule;
(2)
a prospective resident business shall complete the application form and
submit it to the state purchasing agent prior to the awarding of any contract
in which the business desires to be given a preference;
(3)
the state purchasing agent shall examine the application and if
necessary may seek additional information or proof so as to be assured that the
applicant is indeed entitled to certification as a resident business. If the state purchasing agent is so assured,
he shall issue the applicant a distinctive certification number which is valid
until revoked and which, when used on bids and other purchasing documents for
state agencies or local public bodies, entitles the holder of the number to the
resident business preference.
B. Resident
manufacturers. Since a resident
manufacturer is a person who offers materials grown, produced, processed or
manufactured wholly in this state, the state purchasing agent will not
prequalify any person as a resident manufacturer. Rather, a person must establish that each item bid on which he
desires to be given a preference is for materials grown, produced, processed or
manufactured wholly in this state.
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1.4.2.10 REVOCATION OF CERTIFICATION NUMBERS:
A. General. All certification numbers are subject to
revocation in accordance with this rule. A certification number does not
establish conclusively that the holder of the number is a resident business. Rather, a certification number merely
establishes that the state purchasing agent believed, as of the date of
issuance, the holder was entitled to treatment as a resident business by state
agencies and local public bodies. Whenever
a certification number is challenged, the holder of the number has the burden
of persuasion on the issue of whether the holder is actually a resident
business.
B. Revocation. A certification number shall be revoked by
the state purchasing agent upon making a determination that the holder of the
number no longer qualifies as a resident business.
(1)
A revocation shall be effective immediately and shall apply to all
subsequent contract awards. A revocation shall not affect any previously
awarded contracts, though, in the absence of fraud or bad faith.
(2)
At any time, the state purchasing agent may request information or proof
from the holder of a certification number as to whether the holder continues to
qualify as a resident business. If the
holder fails to provide any requested information or proof, this certification
number may be revoked.
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1.4.2.11 PROTESTS:
A. Right
to protest. A bidder who is aggrieved
in the award of a contract to another bidder, who is relying on a resident
business or manufacturer preference, may protest to the central purchasing
office responsible for the procurement in accordance with Section 13-1-172 NMSA
1978.
B. Resident
businesses. If a protest presents the
issue of whether the holder of a certification number is actually a resident
business, the central purchasing office responsible for the procurement shall
refer the issue to the state purchasing agent for resolution in accordance with
1 NMAC 5.2 [now 1.4.1 NMAC] or succeeding regulations. If a protest governed by Subsection 11.2
[now this subsection - Subsection B of 1.4.2.11 NMAC]] presents additional
issues, the central purchasing office responsible for the procurement shall
remain responsible for resolution of the additional issues.
C. Resident
manufacturers. If a protest presents
the issue of whether a person is entitled to a resident manufacturer preference
on a particular bid, the central purchasing office responsible for the
procurement shall resolve the protest.
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History of 1.4.2 NMAC:
Pre-NMAC History:
Section 13-1-21 NMSA 1978,
enacted by Laws 1979, Chapter 72, Section 1, and amended in subsequent years
thereafter, applies to all procurement of items of tangible personal property
and construction effected by state agencies and local public bodies. The
section provides bidders preference to New Mexico businesses and New York state
business enterprises who have qualified with the office of the state purchasing
agent when competing against nonresident businesses for contracts let by state
agencies and local public bodies. To implement the relevant section of laws of
New Mexico, the subject and material found in this rule was filed with the
state records center and archives on August 18, 1989 as general services
department (GSD) Rule 89-603, and titled "Resident Business and
Manufacturer Preferences." GSD
Rule 89-603 was superseded by 1 NMAC 5.3 (now 1.4.2 NMAC), effective 1-15-1998.
History of Repealed Material: [Reserved]
GSD Rule 89-603 - superseded
1-15-1998