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HF2097 (Legislative Session 94 (2025-2026))

Application of small business programs expanded, and direct negotiation of certain contracts authorized.

Related bill: SF2038

AI Generated Summary

Purpose of the Bill

The bill aims to expand the application of small business programs for the Metropolitan Council. It focuses on supporting small targeted group businesses and veteran-owned small businesses by authorizing direct negotiation of certain contracts and providing preferences in bid processes.

Main Provisions

  • Direct Negotiation of Contracts: Allows the Metropolitan Council to directly negotiate contracts for construction or maintenance work if the estimated cost does not exceed a specified limit. This can be done without advertising for bids or adhering to competitive bidding requirements.

  • Bid Preference: Authorizes the Metropolitan Council and specified agencies to give up to a six percent bid preference to small targeted group businesses and veteran-owned small businesses. This aims to encourage their participation in providing goods, services, or construction work.

  • Exclusive Contract Opportunities: Permits the Council and designated agencies to restrict certain contracts exclusively to small targeted group businesses or veteran-owned small businesses if there are at least three such businesses likely to bid.

  • Subcontracting Goals: Sets goals for prime contractors to subcontract a portion of their work to small targeted group businesses and veteran-owned small businesses. Financial incentives and penalties are established based on these goals, with a waiver process if qualified businesses are not available.

  • Direct Awards for Small Purchases: Allows for direct contract awards to small targeted group businesses and veteran-owned small businesses for purchases not subject to competitive bidding, up to a certain contract value.

  • Payment Requirements: Mandates that prime contractors must pay subcontractors within ten days of receiving payment from the Council, with interest penalties for late payment.

  • Working Capital Fund: Supports a working capital fund to provide or guarantee loans to businesses owned by socially or economically disadvantaged individuals to help them secure contracts with government agencies.

Significant Changes to Existing Law

  • Amends Minnesota Statutes to allow more flexibility in awarding contracts to small businesses without traditional competitive bidding.
  • Introduces financial incentives and penalties related to subcontracting goals, altering how prime contractors engage with subcontractors.
  • Establishes a new framework for direct negotiation and preferences for specific small business groups, potentially impacting competitive dynamics in local government contracting.

Relevant Terms: Metropolitan Council, small business programs, direct negotiation, bid preference, small targeted group businesses, veteran-owned small businesses, competitive bidding, subcontracting goals, working capital fund, socially disadvantaged, economically disadvantaged.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025HouseFloorActionIntroduction and first reading, referred toElections Finance and Government Operations

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces a rule for direct negotiation based on contract amount limits specified in 161.32 subdivision 2."
      ],
      "removed": [],
      "summary": "The bill amends current contract negotiation processes by referencing section 161.32 subdivision 2 to set limits on direct negotiation contract amounts.",
      "modified": []
    },
    "citation": "161.32 subdivision 2"
  },
  {
    "analysis": {
      "added": [
        "Provides for a direct award of contracts to businesses identified under 16C.16 without a competitive bid."
      ],
      "removed": [],
      "summary": "This bill updates certain preferences and requirements for small and veteran-owned businesses, using parameters set by section 16C.16.",
      "modified": [
        "Adjusts bid preferences using percentages defined in 16C.16."
      ]
    },
    "citation": "16C.16"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill modifies preferential bidding treatments by referring to section 161.321 subdivision 2 for percentage guidelines.",
      "modified": [
        "Changes the preference percentage for bids by small and veteran-owned businesses according to 161.321 subdivision 2."
      ]
    },
    "citation": "161.321 subdivision 2"
  },
  {
    "analysis": {
      "added": [
        "Allows metropolitan agencies as defined in 473.121 subdivision 5a to participate in working capital guarantees."
      ],
      "removed": [],
      "summary": "Amendments reference section 473.121 subdivision 5a to define metropolitan agencies eligible for working capital fund usage.",
      "modified": []
    },
    "citation": "473.121 subdivision 5a"
  },
  {
    "analysis": {
      "added": [
        "Defines eligible businesses for loans using criteria from Code of Federal Regulations title 49 section 23.5 26.5."
      ],
      "removed": [],
      "summary": "The bill aligns state business loan guarantee programs with federal definitions found in Code of Federal Regulations title 49.",
      "modified": []
    },
    "citation": "Code of Federal Regulations title 49 section 23.5 26.5"
  }
]

Sponsors