Citations Affected: IC 4-13; IC 5-21; IC 5-22; noncode.
Synopsis: Electronic procurement. Authorizes the department of
administration to establish Internet sites designed to facilitate: (1) state
and local public purchasing; and (2) purchasing by other entities that
are approved by the department. Requires the department of
administration to establish rules and fees for the use of Internet
purchasing sites in cooperation with the intelenet commission, the state
board of accounts, the attorney general, and the auditor of state. Permits
on-line reverse auctions for purchases of supplies and services.
Establishes procedures governing the conduct of an on-line reverse
auction. Requires that Internet purchasing sites be operational before
January 1, 2005.
Effective: Upon passage; July 1, 2004.
January 13, 2004, read first time and referred to Committee on Economic Development
January 22, 2004, reported favorably _ Do Pass.
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
SECTION 1. IC 4-13-17 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 17. Internet Purchasing Sites
Sec. 1. As used in this chapter, "department" refers to the Indiana department of administration.
Sec. 2. As used in this chapter, "internet purchasing site" means an open and interactive electronic environment that is:
(1) designed to facilitate the purchase and sale of supplies and services conducted under IC 5-22;
(2) approved and managed by the department; and
(3) linked to the electronic gateway administered by the intelenet commission established by IC 5-21-2-1.
Sec. 3. As used in this chapter, "purchasing agency" has the meaning set forth in IC 5-22-2-25.
Sec. 4. The department may adopt rules under IC 4-22-2 to establish:
(1) procedures for the use of Internet purchasing sites:
(i) a purchasing agency;
(ii) a cooperative purchasing organization described in IC 5-22-4-7; and
(iii) the public;
to facilitate purchases and sales conducted under IC 5-22; and
(B) by other entities to facilitate purchases and sales conducted by other entities, if considered beneficial by the department;
(2) user fees payable by a bidder using an Internet purchasing site;
(3) the technical requirements for operation of an Internet purchasing site;
(4) procedures requiring the proper officers to maintain adequate documentation of transactions performed through the Internet purchasing site so that the officers may be audited as provided by law;
(5) procedures necessary for the operation of Internet purchasing sites; and
(6) procedures for the use of commercial Internet auction sites under IC 5-22-22-4.5.
Sec. 5. An Internet purchasing site must:
(1) provide an authorized user with the ability to issue an invitation for bids electronically;
(2) protect the content of an electronic offer to the extent required under IC 5-22;
(3) provide an authorized user with a secure, accurate report of all information contained in electronic offers made through the site on or before the deadline established by the authorized user; and
(4) comply with IC 5-22.
Sec. 6. The department shall provide the equipment and information technology services necessary to operate the Internet purchasing sites required under this chapter.
Sec. 7. The department shall provide users and the public with access to Internet purchasing sites by links to the electronic gateway administered by the intelenet commission.
Sec. 8. The following shall cooperate with the department to implement this chapter:
(1) The intelenet commission.
other material be sent by mail, the material may be sent by electronic
means as stated in any of the following:
(1) Rules adopted by the governmental body.
(2) Written policies of the purchasing agency.
(3) A solicitation.
(b) Rules, written policies, and solicitation statements described in subsection (a):
(1) are subject to this article; and
(2) must provide that the transmission of information is at least as efficient and secure as sending the material by mail.
(c) A governmental body may receive electronic offers if both of the following apply:
(1) The solicitation indicates the procedure for transmitting the electronic offer to the governmental body.
(2) The governmental body receives the offer on a fax machine, by electronic mail, or by means of another electronic system that has a security feature that protects the content of an electronic offer with the same degree of protection as the content of an offer that is not transmitted by electronic means.
(d) A governmental body conducting a reverse auction must receive electronic offers through an Internet purchasing site.
SECTION 7. IC 5-22-7.5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]:
Chapter 7.5. On-Line Reverse Auctions
Sec. 1. As used in this chapter, "purchasing entity" means an entity that may use an Internet purchasing site under rules adopted under IC 4-13-17-4.
Sec. 2. (a) A purchasing entity may conduct a reverse auction for the purchase of property, supplies, and services by using an Internet purchasing site to:
(1) issue an invitation for bids; and
(2) receive bids.
(b) Except as provided in this chapter, a purchasing entity and a bidder must comply with the requirements of this article when participating in a reverse auction.
Sec. 3. Before conducting a reverse auction, the purchasing entity must adopt written policies that:
(1) establish the purchasing entity's reverse auction purchasing process, if required under IC 5-22-3-4;
(2) comply with rules for Internet public purchasing sites adopted by the Indiana department of administration under
IC 4-13-17-4; and
(3) require the purchasing entity to maintain adequate documentation regarding reverse auctions so that the transactions may be audited as provided by law.
Sec. 4. If a purchasing entity issues an invitation for bids using a reverse auction conducted through an Internet purchasing site under this chapter, only bids made:
(1) in accordance with the rules and policies described in section 3 of this chapter; and
(2) through the Internet purchasing site;
may be evaluated by the purchasing entity at the close of bidding.
Sec. 5. When used for a reverse auction, an Internet purchasing site must do the following:
(1) Provide information that the purchasing entity considers necessary or beneficial to potential bidders.
(2) Display the amount of all bids previously submitted regarding the reverse auction for public viewing.
(3) Conceal information that identifies a bidder.
(4) Comply with this article.
Sec. 6. The Indiana department of administration may charge a bidder in a reverse auction a fee adopted under IC 4-13-17-4(2).
Sec. 7. For purposes of IC 5-22-7-6, a bid made through an Internet purchasing site is considered to be opened when a computer generated record of the information contained in all bids for a proposed purchase or sale that were received by the site on or before the posted bid deadline is reviewed publicly by the purchasing entity in the presence of one (1) or more witnesses at the time and place designated in the invitation for bids.
SECTION 8. IC 5-22-22-4.5, AS ADDED BY P.L.31-2002, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 4.5. (a) The purchasing agency may sell surplus property using
an a commercial Internet auction site that satisfies if
both of the following are satisfied:
(1) The site is
approved used in compliance with the
procedures established by the intelenet commission Indiana
department of administration under IC 4-13-17-4(6).
(2) The site is linked to the electronic gateway administered by the intelenet commission.
(b) The purchasing agency's posting of the sale on the
auction site must include a detailed description of the surplus property
to be sold.
(c) The purchasing agency may pay the costs of conducting the
auction on the
Internet site as required by the person maintaining the
SECTION 9. [EFFECTIVE UPON PASSAGE] (a) The definitions in IC 4-13-17, as added by this act, apply throughout this SECTION.
(b) Notwithstanding IC 4-13-17, as added by this act, the Indiana department of administration shall:
(1) carry out the duties imposed under IC 4-13-17, as added by this act, under interim written guidelines approved by the department; and
(2) provide access to Internet purchasing sites for the purposes of IC 4-13-17 and IC 5-22-7.5, both as added by this act, before January 1, 2005.
(c) This SECTION expires January 1, 2005.
SECTION 10. [EFFECTIVE UPON PASSAGE] (a) Notwithstanding IC 5-22-22-4.5, as amended by this act, a purchasing agent may conduct a sale of surplus property under IC 5-22-22-4.5 as in effect before the amendments made by this act through a commercial Internet auction site approved by the intelenet commission before July 1, 2004.
(b) This SECTION expires January 1, 2005.
SECTION 11. An emergency is declared for this act.