AN ACT

RELATING TO PUBLIC WORKS; CLARIFYING LANGUAGE REQUIRING CONTRACTORS TO BE REGISTERED; CLARIFYING APPLICABILITY TO USING AGENCIES; SPECIFYING THAT BIDS SUBMITTED BY UNREGISTERED CONTRACTORS OR PRIME CONTRACTORS SHALL NOT BE CONSIDERED FOR AWARD; SPECIFYING THAT BIDS SUBMITTED WITH UNREGISTERED SUBCONTRACTORS SHALL BE CONSIDERED FOLLOWING SUBSTITUTION; SPECIFYING ADDITIONAL REASONS FOR SUBSTITUTION OF NAMED SUBCONTRACTORS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 13-1-105 NMSA 1978 (being Laws 1984, Chapter 65, Section 78, as amended) is amended to read:

     "13-1-105. COMPETITIVE SEALED BIDS--RECEIPT AND ACCEPTANCE OF BIDS.--

          A. Bids shall be unconditionally accepted for consideration for award without alteration or correction, except as authorized in the Procurement Code. In addition to the requirement for the prime contractor and subcontractors to be registered as provided in Section 13-4-13.1 NMSA 1978, bids shall be evaluated based on the requirements set forth in the invitation for bids, which requirements may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery and suitability for a particular purpose. Those criteria such as discounts, transportation costs and total or life-cycle costs that will affect the bid price shall be objectively measurable, which shall be defined by rule. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the invitation for bids. A bid submitted by a prime contractor that was not registered as required by Section 13-4-13.1 NMSA 1978 shall not be considered for award. A bid submitted by a registered prime contractor that includes any subcontractor that is not registered in accordance with that section may be considered for award following substitution of a registered subcontractor for any unregistered subcontractor in accordance with Section 13-4-36 NMSA 1978.

          B. If the lowest responsible bid has otherwise qualified, and if there is no change in the original terms and conditions, the lowest bidder may negotiate with the purchaser for a lower total bid in order to avoid rejection of all bids for the reason that the lowest bid was up to ten percent higher than budgeted project funds. Such negotiation shall not be allowed if the lowest bid was more than ten percent over budgeted project funds."

     Section 2. Section 13-4-13.1 NMSA 1978 (being Laws 2004, Chapter 89, Section 1) is amended to read:

     "13-4-13.1. PUBLIC WORKS CONTRACTS--REGISTRATION OF CONTRACTORS AND SUBCONTRACTORS.--

          A. Except as otherwise provided in this subsection, in order to submit a bid valued at more than fifty thousand dollars ($50,000) in order to respond to a request for proposals or to be considered for award of any portion of a public works project greater than fifty thousand dollars ($50,000) for a public works project that is subject to the Public Works Minimum Wage Act, the contractor, serving as a prime contractor or not, shall be registered with the labor and industrial division of the labor department. Bidding documents issued or released by a state agency or political subdivision of the state shall include a clear notification that each contractor, prime contractor or subcontractor is required to be registered pursuant to this subsection. The provisions of this section do not apply to vocational classes in public schools or public post-secondary educational institutions.

          B. The state or any political subdivision of the state shall not accept a bid on a public works project subject to the Public Works Minimum Wage Act from a prime contractor that does not provide proof of required registration for itself.

          C. Contractors and subcontractors may register with the division on a form provided by the division and in accordance with labor department rules. The division shall charge an annual registration fee of two hundred dollars ($200). The division shall issue to the applicant a certificate of registration within fifteen days after receiving from the applicant the completed registration form and the registration fee.

          D. Registration fees collected by the division shall be deposited in the labor enforcement fund."

     Section 3. Section 13-4-36 NMSA 1978 (being Laws 1988, Chapter 18, Section 6, as amended) is amended to read:

     "13-4-36. SUBSTITUTION OF SUBCONTRACTOR.--

          A. No contractor whose bid is accepted shall substitute any person as subcontractor in place of the subcontractor listed in the original bid, except that the using agency shall consent to the substitution of another person as a subcontractor in the following circumstances:

                (1) when the subcontractor listed in the bid, after having had a reasonable opportunity to do so, fails or refuses to execute a written contract, when such written contract, based upon the general terms, conditions, plans and specifications for the project involved and the terms of such subcontractor's written bid, is presented to him by the contractor;

                (2) when the subcontractor listed in the original bid becomes bankrupt or insolvent prior to execution of a subcontract;

                (3) when the using agency refuses to approve the subcontractor listed in the original bid, provided such approval has been reserved in the bidding documents;

                (4) when the subcontractor listed in the original bid fails or refuses to perform his subcontract;

                (5) when the contractor demonstrates to the using agency or its duly authorized officer that the name of the subcontractor was listed as the result of an inadvertent clerical error;

                (6) when a bid alternate accepted by the using agency causes the listed subcontractor's bid not to be low;

                (7) when the contractor can substantiate to the using agency that a listed subcontractor's bid is incomplete;

                (8) when the listed subcontractor fails or refuses to meet the bond requirements of the contractor;

                (9) when it is determined that the listed subcontractor does not have a proper license to perform the work and the contractor has submitted the name of the subcontractor along with proof that the subcontractor bid work for which he was not licensed by the construction industries division of the regulation and licensing department; or

                (10) when it is determined by the using agency, the prime contractor or the director of the labor and industrial division of the labor department that a listed subcontractor is not a registered subcontractor on the date bids are unconditionally accepted for consideration.

          B. Prior to approval of the contractor's request for substitution of a subcontractor, the using agency shall give notice in writing to the listed subcontractor of the contractor's request to substitute and of the reasons for the request. The notice shall be served by certified or registered mail to the last known address of the subcontractor. The listed subcontractor who has been so notified has five working days within which to submit written objections to the substitution to the using agency. Failure to file written objections shall constitute the listed subcontractor's consent to the substitution. If written objections are filed, the using agency shall give at least five working days notice in writing to the listed subcontractor of a hearing by the using agency on the contractor's request for substitution.

          C. No contractor whose bid is accepted shall permit any subcontract to be voluntarily assigned or transferred or allow it to be performed by anyone other than the original subcontractor listed in the original bid without the consent of the using agency.

          D. No contractor whose bid is accepted, other than in the performance of change orders causing changes or deviations from the original contract, shall sublet or subcontract any portion of the work in excess of the listing threshold as to which his original bid did not designate a subcontractor unless:

                (1) the contractor fails to receive a bid for a category of work. Under such circumstances, the contractor may subcontract. The contractor shall designate on the listing form that no bid was received; or

                (2) the contractor fails to receive more than one bid for a category of work. Under such circumstances, the contractor may subcontract. The contractor shall state on the listing form that only one subcontractor's bid was received, together with the name of the subcontractor. This designation shall not occur more than one time on the subcontractor list."