ARTICLE 3

68.27BEST VALUE CONTRACTS

68.28    Section 1. Minnesota Statutes 2006, section 16C.02, is amended by adding a
68.29subdivision to read:
68.30    Subd. 4a. Best value; construction. For purposes of construction, building,
68.31alteration, improvement, or repair services, "best value" describes the result determined by
69.1a procurement method that considers price and performance criteria, which may include,
69.2but are not limited to:
69.3    (1) the quality of the vendor's or contractor's performance on previous projects;
69.4    (2) the timeliness of the vendor's or contractor's performance on previous projects;
69.5    (3) the level of customer satisfaction with the vendor's or contractor's performance
69.6on previous projects;
69.7    (4) the vendor's or contractor's record of performing previous projects on budget and
69.8ability to minimize cost overruns;
69.9    (5) the vendor's or contractor's ability to minimize change orders;
69.10    (6) the vendor's or contractor's ability to prepare appropriate project plans;
69.11    (7) the vendor's or contractor's technical capacities;
69.12    (8) the individual qualifications of the contractor's key personnel; or
69.13    (9) the vendor's or contractor's ability to assess and minimize risks.
69.14    "Performance on previous projects" does not include the exercise or assertion of a
69.15person's legal rights. This definition does not apply to sections 16C.32, 16C.33, 16C.34,
69.16and 16C.35.

69.17    Sec. 2. Minnesota Statutes 2006, section 16C.02, is amended by adding a subdivision
69.18to read:
69.19    Subd. 20. Vendor. "Vendor" means a business, including a construction contractor
69.20or a natural person, and includes both if the natural person is engaged in a business.
 

69.21    Sec. 3. Minnesota Statutes 2006, section 16C.03, subdivision 3, is amended to read:
69.22    Subd. 3. Acquisition authority. The commissioner shall acquire all goods, services,
69.23and utilities needed by agencies. The commissioner shall acquire goods, services, and
69.24utilities by requests for bids, requests for proposals, reverse auctions as provided in
69.25section 16C.10, subdivision 7, or other methods provided by law, unless a section of law
69.26requires a particular method of acquisition to be used. The commissioner shall make all
69.27decisions regarding acquisition activities. The determination of the acquisition method
69.28and all decisions involved in the acquisition process, unless otherwise provided for by
69.29law, shall be based on best value which includes an evaluation of price and may include
69.30other considerations including, but not limited to, environmental considerations, quality,
69.31and vendor performance. A best value determination must be based on the evaluation
69.32criteria detailed in the solicitation document. If criteria other than price are used, the
69.33solicitation document must state the relative importance of price and other factors. Unless
69.34it is determined by the commissioner that an alternative solicitation method provided by
70.1law should be used to determine best value, a request for bid must be used to solicit
70.2formal responses for all building and construction contracts. Any or all responses may
70.3be rejected. When using the request for bid process, the bid must be awarded to the
70.4lowest responsive and responsible bidder, taking into consideration conformity with
70.5the specifications, terms of delivery, the purpose for which the contract or purchase is
70.6intended, the status and capability of the vendor, and other considerations imposed in the
70.7request for bids. The commissioner may decide which is the lowest responsible bidder
70.8for all purchases and may use the principles of life-cycle costing, where appropriate, in
70.9determining the lowest overall bid. The duties set forth in this subdivision are subject to
70.10delegation pursuant to this section.

70.11    Sec. 4. Minnesota Statutes 2006, section 16C.03, is amended by adding a subdivision
70.12to read:
70.13    Subd. 3a. Acquisition authority; construction contracts. For all building and
70.14construction contracts, the commissioner shall award contracts pursuant to section
70.1516C.28, and "best value" shall be defined and applied as set forth in sections 16C.02,
70.16subdivision 4a, and 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
70.17The duties set forth in this subdivision are subject to delegation pursuant to this section.
70.18The commissioner shall establish procedures for developing and awarding best value
70.19requests for proposals for construction projects. The criteria to be used to evaluate the
70.20proposals must be included in the solicitation document and must be evaluated in an open
70.21and competitive manner.

70.22    Sec. 5. Minnesota Statutes 2006, section 16C.03, is amended by adding a subdivision
70.23to read:
70.24    Subd. 19. Training. Any personnel administering procurement procedures for a
70.25user of best value procurement or any consultant retained by a local unit of government to
70.26prepare or evaluate solicitation documents must be trained, either by the department or
70.27through other training, in the request for proposals process for best value contracting for
70.28construction projects. The commissioner may establish a training program for state and
70.29local officials, and vendors and contractors, on best value procurement for construction
70.30projects, including those governed by section 16C.28. If the commissioner establishes
70.31such a training program, the state may charge a fee for providing training.
 

70.32    Sec. 6. Minnesota Statutes 2006, section 16C.26, is amended to read:
70.3316C.26 COMPETITIVE BIDS OR PROPOSALS.
71.1    Subdivision 1. Application. Except as otherwise provided by sections 16C.10,
71.216C.26 and 16C.27, all contracts for building and construction or repairs must be based on
71.3competitive bids or proposals. "Competitive proposals" specifically refers to the method
71.4of procurement described in section 16C.28, subdivision 1, paragraph (a), clause (2),
71.5and paragraph (c).
71.6    Subd. 2. Requirement contracts. Standard requirement price contracts for building
71.7and construction must be established by competitive bids as provided in subdivision 1.
71.8The standard requirement price contracts may contain escalation clauses and may provide
71.9for a negotiated price increase or decrease based upon a demonstrable industrywide or
71.10regional increase or decrease in the vendor's costs or for the addition of similar products or
71.11replacement items not significant to the total value of existing contracts. The term of these
71.12contracts may not exceed five years including all extensions.
71.13    Subd. 3. Publication of notice; expenditures over $25,000. If the amount of an
71.14expenditure is estimated to exceed $25,000, bids or proposals must be solicited by public
71.15notice in a manner designated by the commissioner. To the extent practical, this must
71.16include posting on a state Web site. For expenditures over $50,000, when a call for bids is
71.17issued, the commissioner shall solicit sealed bids by providing notices to all prospective
71.18bidders known to the commissioner by posting notice on a state Web site at least seven
71.19days before the final date of submitting bids. All bids over $50,000 must be sealed when
71.20they are received and must be opened in public at the hour stated in the notice. All
71.21proposals responsive to a request for proposals according to section 16C.28, subdivision
71.221, paragraph (a), clause (2), and paragraph (c), shall be submitted and evaluated in the
71.23manner described in the request for proposals, regardless of the dollar amount. All original
71.24bids and proposals and all documents pertaining to the award of a contract must be retained
71.25and made a part of a permanent file or record and remain open to public inspection.
71.26    Subd. 4. Building and construction contracts; $50,000 or less. An informal bid
71.27may be used for building, construction, and repair contracts that are estimated at less than
71.28$50,000. Informal bids must be authenticated by the bidder in a manner specified by the
71.29commissioner. Alternatively, a request for proposals may be issued according to section
71.3016C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c), for such contracts.
71.31    Subd. 5. Standard specifications, security. Contracts must be based on the
71.32standard specifications prescribed and enforced by the commissioner under this chapter,
71.33unless otherwise expressly provided or as authorized under section 16C.28, subdivision
71.341, paragraph (a), clause (2), and paragraph (c). Each bidder for a contract vendor or
71.35contractor must furnish security approved by the commissioner to ensure the making of
71.36the contract being bid for.
72.1    Subd. 6. Noncompetitive bids. Agencies are encouraged to contract with small
72.2targeted group businesses designated under section 16C.16 when entering into contracts
72.3that are not subject to competitive bidding procedures.

72.4    Sec. 7. Minnesota Statutes 2006, section 16C.27, subdivision 1, is amended to read:
72.5    Subdivision 1. Single source of supply. Competitive bidding is or proposals are not
72.6required for contracts clearly and legitimately limited to a single source of supply, and the
72.7contract price may be best established by direct negotiation.

72.8    Sec. 8. Minnesota Statutes 2006, section 16C.28, is amended to read:
72.916C.28 CONTRACTS; AWARD.
72.10    Subdivision 1. Lowest responsible bidder Award requirements. (a) All state
72.11building and construction contracts entered into by or under the supervision of the
72.12commissioner or an agency for which competitive bids or proposals are required must
72.13be awarded to the lowest responsible bidder, taking into consideration conformity with
72.14the specifications, terms of delivery, the purpose for which the contract is intended, the
72.15status and capability of the vendor, and other considerations imposed in the call for bids.
72.16The commissioner may decide which is the lowest responsible bidder for all contracts
72.17and may use the principles of life cycle costing, where appropriate, in determining the
72.18lowest overall bid. The head of the interested agency shall make the decision, subject
72.19to the approval of the commissioner. Any or all bids may be rejected. In a case where
72.20competitive bids are required and where all bids are rejected, new bids, if solicited, must
72.21be called for as in the first instance, unless otherwise provided by law. may be awarded to
72.22either of the following:
72.23    (1) the lowest responsible bidder, taking into consideration conformity with the
72.24specifications, terms of delivery, the purpose for which the contract is intended, the status
72.25and capability of the vendor or contractor, other considerations imposed in the call for
72.26bids, and, where appropriate, principles of life-cycle costing; or
72.27    (2) the vendor or contractor offering the best value, taking into account the
72.28specifications of the request for proposals, the price and performance criteria as set forth
72.29in section 16C.02, subdivision 4a, and described in the solicitation document.
72.30    (b) The vendor or contractor must secure bonding, commercial general insurance
72.31coverage, and workers' compensation insurance coverage under paragraph (a), clause
72.32(1) or (2). The commissioner shall determine whether to use the procurement process
72.33described in paragraph (a), clause (1), or the procurement process described in paragraph
72.34(a), clause (2), and paragraph (c). If the commissioner uses the method in paragraph
73.1(a), clause (2), and paragraph (c), the head of the agency shall determine which vendor
73.2or contractor offers the best value, subject to the approval of the commissioner. Any
73.3or all bids or proposals may be rejected.
73.4    (c) When using the procurement process described in subdivision 1, paragraph (a),
73.5clause (2), the solicitation document must state the relative weight of price and other
73.6selection criteria. The award must be made to the vendor or contractor offering the
73.7best value applying the weighted selection criteria. If an interview of the vendor's or
73.8contractor's personnel is one of the selection criteria, the relative weight of the interview
73.9shall be stated in the solicitation document and applied accordingly.
73.10    Subd. 1a. Establishment and purpose. (a) The state recognizes the importance of
73.11the inclusion of a best value contracting system for construction as an alternative to the
73.12current low-bid system of procurement. In order to accomplish that goal, state and local
73.13governmental entities shall be able to choose the best value system in different phases.
73.14    (b) "Best value" means the procurement method defined in section 16C.02,
73.15subdivision 4a.
73.16    (c) The following entities are eligible to participate in phase I:
73.17    (1) state agencies;
73.18    (2) counties;
73.19    (3) cities; and
73.20    (4) school districts with the highest 25 percent enrollment of students in the state.
73.21Phase I begins on the effective date of this section.
73.22    (d) The following entities are eligible to participate in phase II:
73.23    (1) those entities included in phase I; and
73.24    (2) school districts with the highest 50 percent enrollment of students in the state.
73.25Phase II begins two years from the effective date of this section.
73.26    (e) The following entities are eligible to participate in phase III:
73.27    (1) all entities included in phases I and II; and
73.28    (2) all other townships, school districts, and political subdivisions in the state.
73.29Phase III begins three years from the effective date of this section.
73.30    (f) The commissioner or any agency for which competitive bids or proposals are
73.31required may not use best value contracting as defined in section 16C.02, subdivision 4a,
73.32for more than one project annually, or 20 percent of its projects, whichever is greater, in
73.33each of the first three fiscal years in which best value construction contracting is used.
73.34    Subd. 2. Alterations and erasures. A bid containing an alteration or erasure of
73.35any price contained in the bid which is used in determining the lowest responsible bid
74.1must be rejected unless the alteration or erasure is corrected in a manner that is clear and
74.2authenticated by an authorized representative of the responder. An alteration or erasure
74.3may be crossed out and the correction printed in ink or typewritten adjacent to it and
74.4initialed by an authorized representative of the responder.
74.5    Subd. 3. Special circumstances. The commissioner may reject the bid or proposal
74.6of any bidder vendor or contractor who has failed to perform a previous contract with
74.7the state. In the case of identical low bids from two or more bidders, the commissioner
74.8may use negotiated procurement methods with the tied low bidders for that particular
74.9transaction so long as the price paid does not exceed the low tied bid price. The
74.10commissioner may award contracts to more than one bidder vendor or contractor in
74.11accordance with subdivision 1, if doing so does not decrease the service level or diminish
74.12the effect of competition.
74.13    Subd. 4. Record. A record must be kept of all bids or proposals, including names of
74.14bidders, amounts of bids or proposals, and each successful bid or proposal. This record is
74.15open to public inspection, subject to section 13.591 and other applicable law.
74.16    Subd. 5. Preferences not cumulative. The preferences under sections 16B.121,
74.1716C.06, subdivision 7 , and 16C.16 apply, but are not cumulative. The total percentage
74.18of preference granted on a contract may not exceed the highest percentage of preference
74.19allowed for that contract under any one of those sections.
 

74.20    Sec. 9. Minnesota Statutes 2006, section 103D.811, subdivision 3, is amended to read:
74.21    Subd. 3. Awarding of contract. (a) At a time and place specified in the bid notice,
74.22the managers may accept or reject any or all bids and may award the contract to the lowest
74.23responsible bidder. The bidder to whom the contract is to be awarded must give a bond,
74.24with ample security, conditioned by satisfactory completion of the contract.
74.25    (b) Bids must not be considered which in the aggregate exceed by more than 30
74.26percent the total estimated cost of construction or implementation.
74.27    (c) As an alternative to the procurement method described in paragraph (a), the
74.28managers may issue a request for proposals and award the contract to the vendor or
74.29contractor offering the best value as described in section 16C.28, subdivision 1, paragraph
74.30(a), clause (2), and paragraph (c).
74.31    (d) The contract must be in writing and be accompanied by or refer to the plans and
74.32specifications for the work to be done as prepared by the engineer for the watershed
74.33district. The plans and specifications shall become a part of the contract.
74.34    (d) (e) The contract shall be approved by the managers and signed by the president,
74.35secretary, and contractor.

75.1    Sec. 10. Minnesota Statutes 2006, section 103E.505, subdivision 5, is amended to read:
75.2    Subd. 5. How contract may be awarded. The contract may be awarded in one
75.3job, in sections, or separately for labor and material and must may be let to the lowest
75.4responsible bidder. Alternatively, the contract may be awarded to the vendor or contractor
75.5offering the best value under a request for proposals as described in section 16C.28,
75.6subdivision 1, paragraph (a), clause (2), and paragraph (c).

75.7    Sec. 11. Minnesota Statutes 2006, section 116A.13, subdivision 5, is amended to read:
75.8    Subd. 5. How job may be let. The job may be let in one job, or in sections, or
75.9separately for labor and material, and shall may be let to the lowest responsible bidder or
75.10bidders therefor. Alternatively, the contract may be awarded to the vendor or contractor
75.11offering the best value under a request for proposals as described in section 16C.28,
75.12subdivision 1, paragraph (a), clause (2), and paragraph (c).

75.13    Sec. 12. Minnesota Statutes 2006, section 123B.52, subdivision 1, is amended to read:
75.14    Subdivision 1. Contracts. A contract for work or labor, or for the purchase of
75.15furniture, fixtures, or other property, except books registered under the copyright laws, or
75.16for the construction or repair of school houses, the estimated cost or value of which shall
75.17exceed that specified in section 471.345, subdivision 3, must not be made by the school
75.18board without first advertising for bids or proposals by two weeks' published notice in the
75.19official newspaper. This notice must state the time and place of receiving bids and contain
75.20a brief description of the subject matter.
75.21    Additional publication in the official newspaper or elsewhere may be made as the
75.22board shall deem necessary.
75.23    After taking into consideration conformity with the specifications, terms of delivery,
75.24and other conditions imposed in the call for bids, every such contract for which a call for
75.25bids has been issued must be awarded to the lowest responsible bidder, be duly executed
75.26in writing, and be otherwise conditioned as required by law. The person to whom the
75.27contract is awarded shall give a sufficient bond to the board for its faithful performance.
75.28Notwithstanding section 574.26 or any other law to the contrary, on a contract limited
75.29to the purchase of a finished tangible product, a board may require, at its discretion, a
75.30performance bond of a contractor in the amount the board considers necessary. A record
75.31must be kept of all bids, with names of bidders and amount of bids, and with the successful
75.32bid indicated thereon. A bid containing an alteration or erasure of any price contained in
75.33the bid which is used in determining the lowest responsible bid must be rejected unless the
75.34alteration or erasure is corrected as provided in this section. An alteration or erasure may
76.1be crossed out and the correction thereof printed in ink or typewritten adjacent thereto and
76.2initialed in ink by the person signing the bid. In the case of identical low bids from two or
76.3more bidders, the board may, at its discretion, utilize negotiated procurement methods
76.4with the tied low bidders for that particular transaction, so long as the price paid does not
76.5exceed the low tied bid price. In the case where only a single bid is received, the board
76.6may, at its discretion, negotiate a mutually agreeable contract with the bidder so long as
76.7the price paid does not exceed the original bid. If no satisfactory bid is received, the
76.8board may readvertise. Standard requirement price contracts established for supplies or
76.9services to be purchased by the district must be established by competitive bids. Such
76.10standard requirement price contracts may contain escalation clauses and may provide for a
76.11negotiated price increase or decrease based upon a demonstrable industrywide or regional
76.12increase or decrease in the vendor's costs. Either party to the contract may request that the
76.13other party demonstrate such increase or decrease. The term of such contracts must not
76.14exceed two years with an option on the part of the district to renew for an additional two
76.15years. Contracts for the purchase of perishable food items, except milk for school lunches
76.16and vocational training programs, in any amount may be made by direct negotiation
76.17by obtaining two or more written quotations for the purchase or sale, when possible,
76.18without advertising for bids or otherwise complying with the requirements of this section
76.19or section 471.345, subdivision 3. All quotations obtained shall be kept on file for a
76.20period of at least one year after receipt.
76.21    Every contract made without compliance with the provisions of this section shall be
76.22void. Except in the case of the destruction of buildings or injury thereto, where the public
76.23interest would suffer by delay, contracts for repairs may be made without advertising
76.24for bids.

76.25    Sec. 13. Minnesota Statutes 2006, section 123B.52, is amended by adding a
76.26subdivision to read:
76.27    Subd. 1b. Best value alternative. As an alternative to the procurement method
76.28described in subdivision 1, a contract for construction, building, alteration, improvement,
76.29or repair work may be awarded to the vendor or contractor offering the best value under a
76.30request for proposals as described in section 16C.28, subdivision 1, paragraph (a), clause
76.31(2), and paragraph (c).

76.32    Sec. 14. Minnesota Statutes 2006, section 160.17, is amended by adding a subdivision
76.33to read:
77.1    Subd. 2a. Best value alternative. As an alternative to the procurement method
77.2referenced in subdivision 2, counties or towns may issue a request for proposal and award
77.3the contract to the vendor or contractor offering the best value as described in section
77.416C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

77.5    Sec. 15. Minnesota Statutes 2006, section 160.262, is amended by adding a subdivision
77.6to read:
77.7    Subd. 5. Best value alternative. As an alternative to the procurement method
77.8described in subdivision 4, the commissioner may allow for the award of design-build
77.9contracts for the projects described in subdivision 4 to the vendor or contractor offering
77.10the best value under a request for proposals as described in section 16C.28, subdivision 1,
77.11paragraph (a), clause (2), and paragraph (c).
 

77.12    Sec. 16. Minnesota Statutes 2006, section 161.32, is amended by adding a subdivision
77.13to read:
77.14    Subd. 1f. Best value alternative. As an alternative to the procurement method
77.15described in subdivisions 1a to 1e, the commissioner may issue a request for proposals
77.16and award the contract to the vendor or contractor offering the best value as described in
77.17section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

77.18    Sec. 17. [161.3206] BEST VALUE CONTRACTING AUTHORITY.
77.19    Notwithstanding sections 16C.25, 161.32, 161.321, or any other law to the contrary,
77.20the commissioner may solicit and award all contracts, other than design-build contracts
77.21governed by section 161.3412, for a project on the basis of a best value selection process
77.22as defined in section 16C.02, subdivision 4a. Section 16C.08 does not apply to this section.

77.23    Sec. 18. Minnesota Statutes 2006, section 161.3412, subdivision 1, is amended to read:
77.24    Subdivision 1. Best value selection for design-build contracts. Notwithstanding
77.25sections 16C.25, 161.32, and 161.321, or any other law to the contrary, the commissioner
77.26may solicit and award a design-build contract for a project on the basis of a best value
77.27selection process. Section 16C.08 does not apply to design-build contracts to which the
77.28commissioner is a party.

77.29    Sec. 19. Minnesota Statutes 2006, section 161.38, subdivision 4, is amended to read:
77.30    Subd. 4. Effects on other law of public contract with commissioner. Whenever
77.31the road authority of any city enters into an agreement with the commissioner pursuant
78.1to this section, and a portion of the cost is to be assessed against benefited property,
78.2the letting of a public contract by the commissioner for the work shall be deemed to
78.3comply with statutory or charter provisions requiring the city (1) to advertise for bids
78.4before awarding a contract for a public improvement, (2) to let the contract to the lowest
78.5responsible bidder or to the vendor or contractor offering the best value, and (3) to require
78.6a performance bond to be filed by the contractor before undertaking the work. The
78.7contract so let by the commissioner and the performance bond required of the contractor
78.8by the commissioner shall be considered to be the contract and bond of the city for the
78.9purposes of complying with the requirements of any applicable law or charter provision,
78.10and the bond shall inure to the benefit of the city and operate for their protection to the
78.11same extent as though they were parties thereto.
 

78.12    Sec. 20. Minnesota Statutes 2006, section 365.37, is amended by adding a subdivision
78.13to read:
78.14    Subd. 2a. Best value alternative. As an alternative to the procurement method
78.15described in subdivision 2, a contract for construction, building, alteration, improvement,
78.16or repair work may be awarded to the vendor or contractor offering the best value under a
78.17request for proposals as described in section 16C.28, subdivision 1, paragraph (a), clause
78.18(2), and paragraph (c).

78.19    Sec. 21. Minnesota Statutes 2006, section 374.13, is amended to read:
78.20374.13 TO ADVERTISE FOR BIDS.
78.21    Subdivision 1. Bidding process. When the plans and specifications are completed
78.22and approved by the city council and the county board, the commission shall, after notice
78.23appropriate to inform possible bidders, obtain bids or proposals for all or any portion of
78.24the work or materials, or both, to be done, performed, or furnished in the construction of
78.25the building. All bids or proposals shall be sealed by the bidders or proposers and filed
78.26with the commission at or before the time specified for the opening of bids or proposals.
78.27At the time and place specified for the opening of bids or proposals, the commission shall
78.28meet, open the bids or proposals, tabulate them, and award the contract or contracts to the
78.29responsible bidder whose bid or proposal is the most favorable to the city or county, or
78.30reject all bids and proposals. If all bids or proposals are rejected, the commission may,
78.31after similar notice, obtain more bids or proposals or may modify or change the plans and
78.32specifications and submit the modified plans and specifications to the city council and the
78.33county board for approval. When the modified or changed plans and specifications are
78.34satisfactory to both the city council and the county board, the plans and specifications
79.1shall be returned to the commission and the commission shall proceed again, after similar
79.2notice, to obtain bids or proposals. Any contract awarded by the commission shall be
79.3subject to approval by the city council and the county board.
79.4    Subd. 2. Best value alternative. As an alternative to the procurement method
79.5described in subdivision 1, the commission may issue a request for proposals and award
79.6the contract to the vendor or contractor offering the best value as described in section
79.716C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

79.8    Sec. 22. Minnesota Statutes 2006, section 375.21, is amended by adding a subdivision
79.9to read:
79.10    Subd. 1b. Best value alternative. As an alternative to the procurement method
79.11described in subdivision 1, a county board may award a contract for construction, building,
79.12alteration, improvement, or repair work to the vendor or contractor offering the best value
79.13under a request for proposals as described in section 16C.28, subdivision 1, paragraph
79.14(a), clause (2), and paragraph (c).

79.15    Sec. 23. Minnesota Statutes 2006, section 383C.094, is amended by adding a
79.16subdivision to read:
79.17    Subd. 1a. Contracts in excess of $500; best value alternative. As an alternative to
79.18the procurement method described in subdivision 1, the contract may be awarded to the
79.19vendor or contractor offering the best value under a request for proposals as described in
79.20section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

79.21    Sec. 24. Minnesota Statutes 2006, section 412.311, is amended to read:
79.22412.311 CONTRACTS.
79.23    Subdivision 1. Lowest responsible bidder. Except as provided in sections 471.87
79.24to 471.89, no member of a council shall be directly or indirectly interested in any contract
79.25made by the council. Whenever the amount of a contract for the purchase of merchandise,
79.26materials or equipment or for any kind of construction work undertaken by the city is
79.27estimated to exceed the amount specified by section 471.345, subdivision 3, the contract
79.28shall be let to the lowest responsible bidder, after notice has been published once in the
79.29official newspaper at least ten days in advance of the last day for the submission of bids. If
79.30the amount of the contract exceeds $1,000, it shall be entered into only after compliance
79.31with section 471.345.
79.32    Subd. 2. Best value alternative. As an alternative to the procurement method
79.33described in subdivision 1, a contract for construction, building, alteration, improvement,
80.1or repair work may be awarded to the vendor or contractor offering the best value under a
80.2request for proposals as described in section 16C.28, subdivision 1, paragraph (a), clause
80.3(2), and paragraph (c).

80.4    Sec. 25. Minnesota Statutes 2006, section 429.041, is amended by adding a subdivision
80.5to read:
80.6    Subd. 2a. Best value alternative. As an alternative to the procurement method
80.7described in subdivision 2, the council may issue a request for proposals and award the
80.8contract to the vendor or contractor offering the best value as described in section 16C.28,
80.9subdivision 1, paragraph (a), clause (2), and paragraph (c).

80.10    Sec. 26. Minnesota Statutes 2006, section 458D.21, is amended by adding a
80.11subdivision to read:
80.12    Subd. 2a. Contracts in excess of $5,000; best value alternative. As an alternative
80.13to the procurement method described in subdivision 2, the board may issue a request for
80.14proposals and award the contract to the vendor or contractor offering the best value as
80.15described in section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

80.16    Sec. 27. Minnesota Statutes 2006, section 469.015, is amended by adding a subdivision
80.17to read:
80.18    Subd. 1a. Best value alternative. As an alternative to the procurement method
80.19described in subdivision 1, the authority may issue a request for proposals and award the
80.20contract to the vendor or contractor offering the best value under a request for proposals as
80.21described in section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

80.22    Sec. 28. Minnesota Statutes 2006, section 469.068, subdivision 1, is amended to read:
80.23    Subdivision 1. Contracts; bids; bonds. All construction work and every purchase
80.24of equipment, supplies, or materials necessary in carrying out the purposes of sections
80.25469.048 to 469.068, that involve the expenditure of $1,000 or more, shall be awarded by
80.26contract as provided in this subdivision or in subdivision 1a. Before receiving bids under
80.27sections 469.048 to 469.068, the authority shall publish, once a week for two consecutive
80.28weeks in the official newspaper of the port's city, a notice that bids will be received for the
80.29construction work, or purchase of equipment, supplies, or materials. The notice shall state
80.30the nature of the work, and the terms and conditions upon which the contract is to be let
80.31and name a time and place where the bids will be received, opened, and read publicly,
80.32which time shall be not less than seven days after the date of the last publication. After
81.1the bids have been received, opened, read publicly, and recorded, the commissioners
81.2shall award the contract to the lowest responsible bidder, reserving the right to reject
81.3any or all bids. The contract shall be executed in writing and the person to whom the
81.4contract is awarded shall give sufficient bond to the board for its faithful performance. If
81.5no satisfactory bid is received, the port authority may readvertise, or, by an affirmative
81.6vote of two of its commissioners in the case of a three-member commission, or five of
81.7its members in the case of a seven-member commission, may authorize the authority
81.8to perform any part or parts of any construction work by day labor under conditions it
81.9prescribes. The commissioners may establish reasonable qualifications to determine
81.10the fitness and responsibility of bidders, and require bidders to meet the qualifications
81.11before bids are accepted. If the commissioners by a two-thirds or five-sevenths vote
81.12declare that an emergency exists requiring the immediate purchase of any equipment or
81.13material or supplies at a cost in excess of $1,000, but not exceeding $5,000, in amount,
81.14or making of emergency repairs, it shall not be necessary to advertise for bids, but the
81.15material, equipment, or supplies may be purchased in the open market at the lowest price
81.16obtainable, or the emergency repairs may be contracted for or performed without securing
81.17formal competitive bids. An emergency, for purposes of this section, is unforeseen
81.18circumstances or conditions which result in the jeopardizing of human life or property.
81.19    In all contracts involving the employment of labor, the commissioners shall stipulate
81.20conditions they deem reasonable, as to the hours of labor and wages and may stipulate as
81.21to the residence of employees to be employed by the contractors.
81.22    Bonds shall be required from contractors for any works of construction as provided
81.23in and subject to all the provisions of sections 574.26 to 574.31.

81.24    Sec. 29. Minnesota Statutes 2006, section 469.068, is amended by adding a subdivision
81.25to read:
81.26    Subd. 1a. Contracts; best value alternative. As an alternative to the procurement
81.27method described in subdivision 1, a contract may be awarded to the vendor or contractor
81.28offering the best value under a request for proposals as described in section 16C.28,
81.29subdivision 1, paragraph (a), clause (2), and paragraph (c).

81.30    Sec. 30. Minnesota Statutes 2006, section 469.101, is amended by adding a subdivision
81.31to read:
81.32    Subd. 5a. Construction contracts. For all contracts for construction, alteration,
81.33repair, or maintenance work, the authority may award contracts to the vendor offering the
81.34best value, and "best value" shall be defined and applied as set forth in sections 16C.02,
82.1subdivision 4a, and 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
82.2Alternatively, the authority may award all contracts for construction, alteration, repair,
82.3or maintenance work to the lowest responsible bidder, reserving the right to reject any
82.4or all bids.

82.5    Sec. 31. Minnesota Statutes 2006, section 471.345, is amended by adding a subdivision
82.6to read:
82.7    Subd. 3a. Contracts over $50,000; best value alternative. As an alternative to the
82.8procurement method described in subdivision 3, municipalities may award a contract for
82.9construction, alteration, repair, or maintenance work to the vendor or contractor offering
82.10the best value under a request for proposals as described in section 16C.28, subdivision 1,
82.11paragraph (a), clause (2), and paragraph (c).

82.12    Sec. 32. Minnesota Statutes 2006, section 471.345, is amended by adding a subdivision
82.13to read:
82.14    Subd. 4a. Contracts from $10,000 to $50,000; best value alternative. As an
82.15alternative to the procurement method described in subdivision 4, municipalities may
82.16award a contract for construction, alteration, repair, or maintenance work to the vendor or
82.17contractor offering the best value under a request for proposals as described in section
82.1816C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).

82.19    Sec. 33. Minnesota Statutes 2006, section 471.345, subdivision 5, is amended to read:
82.20    Subd. 5. Contracts less than $10,000. If the amount of the contract is estimated
82.21to be $10,000 or less, the contract may be made either upon quotation or in the open