Whenever the State of Nebraska, or any department or any agency thereof, any county board, county clerk, county highway superintendent, the mayor and city council or commissioner of any municipality, any entity created pursuant to the Interlocal Cooperation Act or the Joint Public Agency Act, or the officers of any school district, township, or other governmental subdivision, shall advertise for bids in pursuance of any statutes of the State of Nebraska, on any road contract work or any public improvements work, or for supplies, construction, repairs, and improvements, and in all other cases where bids for supplies or work, of any character whatsoever, are received for the various departments and agencies of the state, and other subdivisions and agencies enumerated in this section, they shall fix not only the day upon which such bids shall be returned, received, or opened, as provided by other statutes, but shall also fix the hour at which such bids shall close, or be received or opened, and they shall also provide that such bids shall be immediately and simultaneously opened in the presence of the bidders, or representatives of the bidders, when the hour is reached for the bids to close. Such bids may be withheld from disclosure until an intent to award is issued. If bids are being opened on more than one contract, the officials having in charge the opening of such bids may, if they deem it advisable, award each contract as the bids are opened. Sections 73-101 to 73-106 shall not apply to the State Park System Construction Alternatives Act or sections 39-2808 to 39-2823.

All governing authorities of the State of Nebraska, and governmental subdivisions thereof, and every person acting as purchasing agent for the State of Nebraska, or any governmental subdivision thereof, shall, in awarding contracts for public works, require all contractors bidding on public works to file with such authority a statement that he is complying with, and will continue to comply with, fair labor standards in the pursuit of his business and in the execution of the contract on which he is bidding. The governing authorities shall also require to be written into each and every contract for public works, in addition to such other provisions as are necessary and prescribed by law, a provision that in the execution of such contract fair labor standards shall be maintained; Provided, no agency or department of the State of Nebraska shall make any requirements, because of the provisions of sections 73-101 to 73-104, that will increase the cost to the state of merchandise, materials, supplies or services. This section shall not apply to such governing authorities that prescribe, in the terms of their contracts for public works, provisions governing the hours of labor, rates of pay, and conditions of employment.

A showing in a public hearing by interested parties, to the satisfaction of the awarding authority, that any contractor bidding upon public works, and having filed the statement as required by section 73-102, has not complied with fair labor standards in the pursuit of his business or occupation, shall be the basis for the disqualification of the low bid, in which case the awarding authority shall let the bid to the next lowest responsible bidder.

Fair labor standards, as used in sections 73-102 and 73-103 shall be construed to mean such a scale of wages and conditions of employment as are paid and maintained by at least fifty percent of the contractors in the same business or field of endeavor as the contractor filing such statement.

Any officer or person who may be in charge of any such bids prior to the time fixed for the simultaneous opening, who shall open prior to such time, or otherwise disclose to any bidder the contents, amount or other details of any rival bid, shall be guilty of a Class IV misdemeanor. Any person violating any of the provisions of sections 73-101 to 73-104 shall be guilty of a Class IV misdemeanor.

(1) Whenever any public school district in the state expends public funds for the construction, remodeling, or repair of any school-owned building or for site improvements, other than those expenditures authorized by section 81-829.51 for emergency expenditures or section 79-10,104 for facilities which are not to be owned by the district following their completion, the school board or its representative shall advertise for bids in the regular manner established by the board and accept or reject bids pursuant to section 73-101.

(2) This section does not apply to any construction, remodeling, or repair of any school-owned building or site improvements in which the contemplated expenditure for the complete project does not exceed one hundred thousand dollars. The State Board of Education shall adjust the dollar amount in this subsection every fifth year. The first such adjustment after August 30, 2015, shall be effective on July 1, 2020. The adjusted amount shall be equal to the then current amount adjusted by the cumulative percentage change in the Consumer Price Index for All Urban Consumers published by the Federal Bureau of Labor Statistics for the five-year period preceding the adjustment date. The amount shall be rounded to the next highest one-thousand-dollar amount.

(3) This section does not apply to the acquisition of existing buildings, purchase of new sites, or site expansions by the school district.

(1) When a state contract is to be awarded to the lowest responsible bidder, a resident disabled veteran or a business located in a designated enterprise zone under the Enterprise Zone Act shall be allowed a preference over any other resident or nonresident bidder if all other factors are equal.

(2) For purposes of this section, resident disabled veteran means any person (a) who resides in the State of Nebraska, who served in the United States Armed Forces, including any reserve component or the National Guard, who was discharged or otherwise separated with a characterization of honorable or general (under honorable conditions), and who possesses a disability rating letter issued by the United States Department of Veterans Affairs establishing a service-connected disability or a disability determination from the United States Department of Defense and (b)(i) who owns and controls a business or, in the case of a publicly owned business, more than fifty percent of the stock is owned by one or more persons described in subdivision (a) of this subsection and (ii) the management and daily business operations of the business are controlled by one or more persons described in subdivision (a) of this subsection.

(3) Any contract entered into without compliance with this section shall be null and void.

The Legislature finds that:

(1) Article IV, section 6, of the Constitution of Nebraska requires that the affairs of the state be economically and efficiently administered and thereby imposes a duty to expend no more for any service than it is worth;

(2) The types and provisions of contracts executed on behalf of the state have a direct bearing on the economical and efficient administration of the affairs of the state; and

(3) Fee-for-service contracts are the usual, customary, and accepted manner of contracting on behalf of the state.

For purposes of sections 73-201 to 73-204:

(1) Contingent fee means any fee, whether commission, percentage, brokerage, finder's fee, or contingent fee or otherwise denominated, which is a percentage or portion of the amount or value recovered, obtained, or involved;

(2) Contingent fee contract means any contract or agreement which provides for payment of a contingent fee; and

(3) State means any department or agency of the state other than (a) the University of Nebraska, (b) the Nebraska state colleges, and (c) any other board, commission, or agency established by the Constitution of Nebraska.

Any contingent fee contract of any kind whatsoever reasonably anticipated to result in the payment of a contingent fee or fees in excess of twenty-five thousand dollars per annum executed by the state or by any person on behalf of the state after September 9, 1995, is void unless executed by the Governor upon thirty days' notice to the public at large.

Any contingent fee contract of any kind whatsoever reasonably anticipated to result in the payment of a contingent fee or fees in excess of twenty-five thousand dollars per annum executed by (1) the University of Nebraska, (2) the Nebraska state colleges, or (3) any other board, commission, or agency established by the Constitution of Nebraska after September 9, 1995, is void unless executed by the highest executive officer thereof upon thirty days' notice to the public at large.

(1) The Commission for the Blind and Visually Impaired, the Nebraska Information Technology Commission, and the Chief Information Officer, in consultation with other state agencies and after at least one public hearing, shall develop a technology access clause to be included in all contracts entered into by state agencies on and after January 1, 2001.

(2) The technology access clause shall clearly state, as a condition for the expenditure of state funds in the purchase of information technology, that the input and output technology shall be capable of supporting modification and otherwise provide for equivalent access for both visual and nonvisual use.

(3) The technology access clause shall be included in all contracts made by state agencies that involve the purchase of an automated information system, without regard to:

(a) The source of funds used to make the purchase;

(b) Whether the purchase is made under delegated purchasing authority; or

(c) The source of law under which the purchase is made.

The Director of Administrative Services shall review and approve or disapprove any contract for personal services between a private entity and any state agency, other than (1) the University of Nebraska, (2) the Nebraska state colleges, and (3) any other board, commission, or agency established by the Constitution of Nebraska, if, on the effective date of the contract, the personal services are performed by permanent state employees of the agency and will be replaced by services performed by the private entity. The contract shall be subject to the public bidding procedures established in the State Procurement Act except in emergencies approved by the Governor.

For purposes of this section, contract for personal services means an agreement by a contractor to provide human labor but does not mean a contract to supply only goods or personal property. The term includes contracts with private service providers, consultants, and independent service contractors.

(1) A state agency that seeks to enter into a contract described in section 73-301 with a private entity shall submit the following information to the Director of Administrative Services: (a) The proposed contract, (b) a review of the long-term actual cost savings, (c) the measurable goals for improving the quality of the service, and (d) an assessment of the feasibility of alternatives within the agency to contracting for performance of the service.

(2) In calculating the cost savings under subsection (1) of this section, the state agency shall project, for twelve months and for sixty months, the following:

(a) Direct costs, including salary and fringe benefits;

(b) Indirect overhead costs which shall include only those costs that can be attributed solely to the work in question and that would not exist if the work were not performed by state employees. Indirect overhead costs shall include the pro rata share of existing administrative salaries and benefits, rents, equipment costs, utilities, and materials;

(c) Any continuing or transitional costs that are directly associated with contracting for the work, including unemployment compensation and the cost of transitional services; and

(d) Additional costs of performance of the work by state employees, including the salaries and benefits of additional staff performing inspection, supervision, and monitoring duties and the cost of additional space, equipment, and materials needed to perform the services.

A state agency that seeks to enter into a contract described in section 73-301 shall also submit to the Director of Administrative Services a formal plan of assistance to the state employees of such state agency who will be displaced by such contract. The plan shall include, but need not be limited to, the following provisions:

(1) Efforts by the state agency to place displaced employees in vacant positions in that agency or another state agency;

(2) Provisions in the contract for personal services, if feasible, for the hiring of displaced employees by the contractor; and

(3) Demonstration by the state agency that it has taken formal and positive steps in considering alternatives to such contract, including reorganization, reevaluation of service, and reevaluation of performance.

The Director of Administrative Services may approve a proposed contract if:

(1) The potential economic advantage of contracting is not outweighed by the public's interest in having the particular services performed directly by the state agency;

(2) The contract does not adversely affect the state's affirmative action efforts;

(3) The contract will include adequate control mechanisms to insure that the services are provided pursuant to the terms of the contract; and

(4) The private entity is fairly compensating its employees.

The Director of Administrative Services shall, within forty-five days after receipt of the information described in sections 73-302 and 73-303 from the state agency, prepare a report detailing why the proposed contract was approved or disapproved. The report shall be delivered electronically to the chairperson of the Appropriations Committee of the Legislature and the Legislative Fiscal Analyst.

The Department of Administrative Services shall adopt and promulgate rules and regulations to carry out sections 73-301 to 73-305. Such rules and regulations shall apply to the Director of Administrative Services in carrying out his or her duties pursuant to such sections.

Sections 73-301 to 73-306 shall not apply to the Nebraska Consultants' Competitive Negotiation Act, the State Park System Construction Alternatives Act, sections 39-2808 to 39-2823, or section 57-1503.

Sections 73-301 to 73-306 shall not be construed to apply to renewals of contracts already approved pursuant to or not subject to such sections, to amendments to such contracts, or to renewals of such amendments unless the amendments would directly cause or result in the replacement by the private entity of additional permanent state employees or positions greater than the replacement caused by the original contract.

Except for long-term care facilities subject to the jurisdiction of the state long-term care ombudsman pursuant to the Long-Term Care Ombudsman Act, the contracting agency shall ensure that any contract which a state agency enters into or renews which agrees that a corporation, partnership, business, firm, governmental entity, or person shall provide health and human services to individuals or service delivery, service coordination, or case management on behalf of the State of Nebraska shall contain a clause requiring the corporation, partnership, business, firm, governmental entity, or person to submit to the jurisdiction of the Public Counsel under sections 81-8,240 to 81-8,254 with respect to the provision of services under the contract.

Sections 73-601 to 73-605 shall be known and may be cited as the Transparency in Government Procurement Act.

(1) The Legislature finds that:

(a) Transparency in public procurement is an important tool to deter corruption and to maintain the public's trust in government contracting;

(b) Taxpayers deserve to know how and where their tax dollars are being spent;

(c) The economy and general welfare of this state and its people and the economy and general welfare of the United States are inseparably linked to the preservation and development of manufacturing industries in this state, as well as all the other states of this nation; and

(d) Recognizing such link, it should be the policy of this state that, whenever possible, taxpayer dollars be reinvested with its individual and employer taxpayers in order to foster job retention and growth and to ensure a broad and healthy tax base for future investments vital to the state's infrastructure.

(2) The Legislature declares that it shall be the policy of this state that the Department of Administrative Services shall quantify the portion of its procurement spending that is reinvested with taxpayers in this state and the nation.

(1) The Department of Administrative Services shall create an annual report that includes:

(a) The total number and value of contracts awarded by the department;

(b) The total number and value of contracts awarded by the department to contractors within this state; and

(c) The total number and value of contracts awarded by the department to foreign contractors.

(2) Such report shall be submitted to the Governor and the Legislature on or before September 1 each year and shall include the required information from the most recent fiscal year ending prior to such date. The reports submitted to the Legislature and the Governor shall be submitted electronically. Each annual report shall be made available to the public through publication on the department's website on or before September 1 of each year.

Beginning on July 1, 2014, each contract awarded by the Department of Administrative Services shall require that the contractors provide to the department any and all information needed for compliance with section 73-603.

The Transparency in Government Procurement Act applies only to contracts awarded by the Department of Administrative Services on and after July 1, 2014, and does not apply to the Office of the Nebraska Capitol Commission.

Sections 73-801 to 73-819 shall be known and may be cited as the State Procurement Act.

The purposes of the State Procurement Act are to establish a standardized, open, and fair process for selection of contracts and to create an accurate reporting of expended funds for such contracts. This process shall promote a standardized method of selection for state contracts, assuring a fair assessment of qualifications and capabilities for project completion or compliance with specifications. There shall also be an accountable, efficient reporting method of expenditures for these contracts.

For purposes of the State Procurement Act:

(1) Contract includes any contract for services and contract for personal property;

(2) Contract for personal property means any contract entered into by the state with another party for a stated consideration, which provides that the state agency is to receive the personal property or use of such personal property furnished by the other party. Contract for personal property includes leases;

(3) Contract for services means any contract that directly engages the time or effort of an independent contractor whose purpose is to perform an identifiable task, study, or report rather than to furnish an end item of supply, goods, equipment, or material;

(4) Cooperative agreement means a legal instrument reflecting a relationship between the State of Nebraska and any other entity where (a) the principal purpose of the relationship is to transfer a thing of value to the entity to carry out a public purpose of support or stimulation by law instead of acquiring property or services for the direct benefit of the State of Nebraska and (b) substantial involvement is expected between the State of Nebraska and the entity when carrying out the activity contemplated in the agreement;

(5) Division means the materiel division of the Department of Administrative Services;

(6) Emergency means necessary to meet an urgent or unexpected requirement or when health and public safety or the conservation of public resources is at risk;

(7) Grant agreement means a legal instrument reflecting a relationship between the State of Nebraska and any other entity where (a) the principal purpose of the relationship is to transfer a thing of value to the entity to carry out a public purpose of support or stimulation by law instead of acquiring property or services for the direct benefit of the State of Nebraska and (b) substantial involvement is not expected between the State of Nebraska and the entity when carrying out the activity contemplated in the agreement;

(8) Occasional means seasonal, irregular, or fluctuating in nature;

(9) Personal property includes all materials, supplies, furniture, equipment, printing, stationery, automotive and road equipment, and other chattels, goods, wares, and merchandise;

(10) Sole source means of such a unique nature that the contractor selected is clearly and justifiably the only practicable source to provide the service or personal property. Determination that the contractor selected is justifiably the sole source is based on either the uniqueness of the service or personal property or sole availability at the location required;

(11) State agency means any agency, board, or commission of this state, except for the University of Nebraska or the Nebraska state colleges. For purposes of procurement of services, state agency does not include the University of Nebraska, the Nebraska state colleges, the courts, the Legislature, or any officer or state agency established by the Constitution of Nebraska; and

(12) Temporary means a finite period of time with respect to a specific task or result relating to a contract for services.

The division shall:

(1) Establish by rules and regulations a process for resolving complaints from both vendors and state agencies;

(2) Maintain a record and written justification of purchases as follows:

(a) A list of and explanation for emergency purchases;

(b) A list of open market purchases made by the division; and

(c) A list of all purchases waived from the minimum time period requirement between bid advertisement and bid opening; and

(3) Have the authority to enter into joint purchasing agreements with political subdivisions in the state.

State agency directors shall be responsible for maintaining accurate documentation of the process used for selection of all contracts and for ensuring and documenting that services and personal property required under the contract are being performed or provided in compliance with the terms of the contract. Such documentation shall be kept with each contract.

(1) All state agencies shall process and document all contracts through the state accounting system. The Director of Administrative Services shall specify the format and type of information for state agencies to provide and approve any alternatives to such formats. All state agencies shall enter the information on new contracts and amendments to existing contracts. State agency directors shall ensure that contracts are coded appropriately into the state accounting system.

(2) The requirements of this section also apply to the courts, the Legislature, and any officer or state agency established by the Constitution of Nebraska, but not to the University of Nebraska or the Nebraska state colleges.

(3) The Director of Administrative Services shall establish a centralized database, either through the state accounting system or through an alternative system, which specifically identifies where a copy of each contract may be found.

Except as provided in section 73-813:

(1) All state agencies shall comply with the review and competitive bidding processes provided in this section. Unless otherwise exempt, no state agency shall expend funds for contracts without complying with this section;

(2) All proposed state agency contracts in excess of fifty thousand dollars shall be bid by a competitive formal bidding process in the manner prescribed by the division procurement manual or a process approved by the Director of Administrative Services. Bidding for contracts for services may be performed at the state agency level or by the division. The division shall administer the public notice and bidding procedures for any contract for personal property;

(3) If the bidding process is at the state agency level, then state agency directors shall ensure that bid documents for each contract in excess of fifty thousand dollars are prereviewed by the division and that any changes to the proposed contract that differ from the bid documents in the proposed contract are reviewed by the division before signature by the parties;

(4) State agency directors shall be responsible for appropriate public notice of an impending contract in excess of fifty thousand dollars in accordance with the division's procurement manual and the State Procurement Act;

(5) State agency directors shall be responsible for ensuring that a request for a contract in excess of fifty thousand dollars is filed with the division for dissemination or website access to vendors interested in competing for contracts; and

(6) When the division is responsible for the procurement of services or personal property, the state agency shall at the time, in the form, and for the periods prescribed by the division, present to the division a detailed requisition for all services and personal property to be contracted.

(1) All contracts which by law are required to be based on competitive bids shall be made only to responsible bidders, taking into consideration, as applicable:

(a) The best interests of the state;

(b) The quality or performance of the personal property or services proposed to be supplied;

(c) The conformity with the solicitation;

(d) The purposes for which required;

(e) The times of delivery;

(f) The life-cycle costs of the personal property in relation to the purchase price and specific use of the item;

(g) The performance of the personal property, taking into consideration any commonly accepted tests and standards of product usability and user requirements;

(h) The energy efficiency ratio as stated by the bidder for alternative choices of appliances or equipment;

(i) The information furnished by each bidder concerning life-cycle costs between alternatives for all classes of equipment, evidence of expected life, repair and maintenance costs, and energy consumption on a per-year basis;

(j) The results of the United States Environmental Protection Agency tests on fleet performance of motor vehicles. Each bidder shall furnish information relating to such results; and

(k) Such other information as may be secured having a bearing on the decision to award the contract.

(2) In determining responsibility, the following elements shall be given consideration:

(a) The ability, capacity, and skill of the bidder to perform the contract required;

(b) The character, integrity, reputation, judgment, experience, and efficiency of the bidder;

(c) Whether the bidder can perform the contract within the time specified;

(d) The quality of performance of previous contracts; and

(e) The previous and existing compliance by the bidder with laws relating to the contract.

(3) Any appliance purchased or leased pursuant to this section shall be energy star certified, except that the materiel administrator may exempt the purchase or lease of an appliance from this subsection if he or she determines that the cost of compliance would exceed the projected energy cost savings.

(4) All political subdivisions may follow the procurement principles set forth in this section if they are deemed applicable by the official authorized to make purchases for such political subdivision.

(5) For purposes of this section, energy star certified means approval of energy usage by the United States Environmental Protection Agency and the United States Department of Energy. Such approval may be signified by the display of the energy star label.

(1) A minimum of fifteen days shall elapse between the time formal bids are advertised and the time of their opening, except that this requirement may be waived by the materiel administrator upon a showing by the state agency of an emergency, sole or specialized source, or other unique requirement.

(2) A solicitation shall be in the form of a public notice of the proposed purchase or lease and a general description of the personal property or services needed in a paper of general circulation in the area where the agency will be operating or by any other method approved by the materiel administrator.

(1) For the purposes of this section:

(a) Realistic price means a price at which the goods or services can actually and sufficiently be provided in accordance with the awarded contract and price bid; and

(b) Reasonable price means the price of the goods or services is fair compensation for such goods or services.

(2) Any or all bids may be rejected by the state agency in accordance with the procurement manual. A state agency may reject a bid if the price is not reasonable or is not realistic.

(3) In considering whether a bid's price is not reasonable or not realistic, a state agency may consider factors, including prices bid by other bidders, the fair market value of the products or services, the availability of the products or services, historical prices, or independent cost estimates.

A contract for personal property may be made in any of the following forms:

(1) For the furnishing of specific personal property at specific prices;

(2) For the furnishing of personal property, according to the specifications, at a fixed rate for a minimum quantity, subject to furnishing a greater quantity at the same or a lesser rate; or

(3) For the furnishing of personal property, according to the specifications without a stated minimum at a rate stated, commonly known as a price agreement.

The form of the contract to be used in any case shall be subject to the discretion of the division.

State agency contracts shall be subject to the following requirements:

(1) Payments shall be made when contractual deliverables are received or in accordance with specific contractual terms and conditions;

(2) State agencies shall not enter into contracts with an unspecified or unlimited duration, and no contract shall be amended to extend the duration of the contract for a period of more than fifty percent of the initial contract term. Following the adoption of any amendment to extend the contract for a period of fifty percent or less of the initial contract term, no further extensions of the original contract shall be permitted. This subdivision does not prohibit the exercise of any renewal option expressly provided in the original contract;

(3) State agencies shall not structure contracts to avoid any of the requirements of the State Procurement Act;

(4) State agencies shall not enter into contracts in excess of fifteen million dollars unless the state agency has complied with section 73-817;

(5) A state agency shall not enter into a contract that purports to:

(a) Obligate the state to indemnify a contracting party from that party's own errors, omissions, or negligence;

(b) Consent to the jurisdiction of another state for the purposes of court proceedings; or

(c) Consent to venue in another state for the purposes of court proceedings;

(6) The Department of Administrative Services shall be the sole and final authority on contracts for personal property by a state agency. When the approval of the Governor is required, the Governor may confer complete authority upon the Department of Administrative Services in the review and approval for contract proposals;

(7) The Department of Administrative Services may adopt and promulgate rules and regulations to (a) develop and implement purchasing and leasing policies and procedures that ensure economical and efficient operations of state agencies and (b) carry out the State Procurement Act;

(8) State agencies shall use contracts designated by the division for statewide use, unless otherwise permitted by the materiel administrator; and

(9) The Director of Administrative Services shall not issue any warrant for the disbursement of money to pay for any contract that is not approved according to law.

(1) Subject to review by the Director of Administrative Services, the division shall provide procedures to grant limited exceptions from sections 73-807, 73-815, and 73-816 for:

(a) Sole source contracts, emergency contracts, and contracts when the price has been established by the federal General Services Administration or competitively bid by another state or group of states, a group of states and any political subdivision of any other state, a political subdivision of another state, or a cooperative purchasing organization on behalf of a group of states or political subdivisions of other states; and

(b) Other circumstances or specific contracts when any of the requirements of sections 73-807, 73-815, and 73-816 are not appropriate for or are not compatible with the circumstances or contract. The division shall provide a written rationale which shall be kept on file when granting an exception under this subdivision.

(2) The following types of contracts are not subject to sections 73-807, 73-815, 73-816, and 73-817:

(a) Contracts for services subject to the Nebraska Consultants' Competitive Negotiation Act;

(b) Contracts for services subject to federal law, regulation, or policy or state statute, under which a state agency is required to use a different selection process or to contract with an identified contractor or type of contractor;

(c) Contracts for professional legal services and services of expert witnesses, hearing officers, or administrative law judges retained by state agencies for administrative or court proceedings;

(d) Grant agreements or cooperative agreements;

(e) Contracts with a value of fifteen million dollars or less with direct providers of medical, behavioral, or developmental health services, child care, or child welfare services to an individual;

(f) Agreements for services to be performed for a state agency by another state or local government agency or contracts made by a state agency with a local government agency for the direct provision of services to the public;

(g) Agreements for services between a state agency and the University of Nebraska, the Nebraska state colleges, the courts, the Legislature, or other officers or state agencies established by the Constitution of Nebraska;

(h) Department of Insurance contracts for financial or actuarial examination, for rehabilitation, conservation, reorganization, or liquidation of licensees, and for professional services related to residual pools or excess funds under the agency's control;

(i) Department of Transportation contracts for all road and bridge projects;

(j) Nebraska Investment Council contracts;

(k) Contracts under section 57-1503;

(l) Contracts for the erection of, construction of, renovation of, repair of, or addition to any building; for original equipment for any building; for the construction of any road or bridge; or for the performance of any work related to such contracts;

(m) Subject to section 83-146, contracts for the purchase or use of the products of the labor of the inmates of any charitable, reformatory, or penal institution of the state;

(n) Contracts for leases by the state or a state agency of real property;

(o) Contracts for works of art;

(p) Contracts for advertising or public announcements; and

(q) Direct or miscellaneous purchases pursuant to section 73-814.

(1) The division may, by written order, permit contracts to be made by any state agency directly with the vendor or supplier whenever it appears to the satisfaction of the division that, because of the unique nature of the personal property, the price in connection therewith, the quantity to be purchased, the location of the state agency, the time of the use of the personal property, or any other circumstance, the interests of the state will be served better by purchasing or contracting direct.

(2) Such permission shall be revocable and shall be operative for a period not exceeding twelve months from the date of issue. Upon the request of the division, state agencies receiving such permission shall report their acts and expenditures under such orders to the division in writing at such time and covering such period as may be required by the division.

(3) The division shall adopt and promulgate rules and regulations establishing criteria which must be met by any agency seeking direct market purchase authorization. Purchases for miscellaneous needs may be made directly by any agency without prior approval from the division for purchases of less than fifty thousand dollars if the agency has completed a certification program as prescribed by the division.

(4) The Department of Correctional Services may purchase raw materials, supplies, component parts, and equipment perishables directly for industries established pursuant to section 83-183, whether such purchases are made to fill specific orders or for general inventories. Any such purchase shall not exceed fifty thousand dollars. The department shall comply with the bidding process of the division and shall be subject to audit by the division for such purchases.

Except as provided in section 73-813, all proposals for sole source contracts for services in excess of fifty thousand dollars shall be preapproved by the division except in emergencies. In case of an emergency, contract approval by the state agency director or his or her designee is required. A copy of the contract and state agency justification of the emergency shall be provided to the Director of Administrative Services within three business days after contract approval. The state agency shall retain a copy of the justification with the contract in the state agency files. The Director of Administrative Services shall maintain a complete record of such sole source contracts for services.

Each proposed contract for services in excess of fifty thousand dollars which requests services that are now performed or have, within the year immediately preceding the date of the proposed contract, been performed by a state employee covered by the classified personnel system or by any labor contract shall use a pre-process prescribed by the division. The pre-process shall include evaluation of the displacement of the employee of the state agency or position held by the employee of the state agency within the preceding year and of the disadvantages of such a contract for services against the expected advantages, whether economic or otherwise. Documentation of each evaluation shall be maintained in the contract file by the state agency.

(1) A state agency shall not enter into a new proposed contract for services in excess of fifteen million dollars unless the state agency has conducted, prior to the advertisement for bids or the execution of the contract when section 73-813 applies, a proof-of-need analysis described in this section.

(2) The proof-of-need analysis shall require state agencies to provide a review of any expected long-term actual cost savings and an explanation of the analysis used to determine such savings or a justification for contracting the service if the proposed contract is not expected to result in cost savings to the state.

(3) Upon conclusion of the contract, if the contract was expected to result in long-term actual cost savings, the state agency shall submit an analysis of whether the contract actually produced such cost savings. If the contract did not produce the expected cost savings, the state agency shall receive certification from the division prior to entering into another contract in excess of fifteen million dollars for the same services.

The division shall make available copies of current purchase agreements and standard specifications to the University of Nebraska. The University of Nebraska may utilize such purchase agreements if it determines that it would be to its advantage to do so. The division may utilize purchase agreements entered into by the University of Nebraska upon a finding by the materiel administrator that the use of such agreements would be in the best interests of the state. For purposes of this section, purchase agreements do not include contracts for personal services subject to sections 73-301 to 73-307.

The fee, required by any state or other laboratory for any analysis or test made by any prospective vendor prior to the award of a contract, shall be paid by such prospective vendor.

Sections 73-901 to 73-907 shall be known and may be cited as the Foreign Adversary Contracting Prohibition Act.

The Legislature finds that:

(1) Dealings with commercial entities that are organized under the laws of a foreign adversary or that have their principal place of business within a foreign adversary tend to be less commercially sound because such entities are unusually likely to be acting on noncommercial motivations and carry increased political risk, including from United States federal sanction authorities;

(2) When such a commercial entity is a state-owned entity, it presents heightened concerns and threatens this state's security, including by making accessible to the foreign adversary information about the structure, operations, resources, and infrastructure of the government of this state; and

(3) Dealings with such commercial entities, and especially state-owned entities, threaten the privacy and security of residents of this state, to the extent that they involve the personal information of such residents.

For purposes of the Foreign Adversary Contracting Prohibition Act:

(1) Company means any sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association that exists for the purpose of making a profit, including all wholly owned subsidiaries, majority owned subsidiaries, parent companies, or affiliates of any such entity or business association;

(2) Foreign adversary means a foreign adversary as determined pursuant to 15 C.F.R. 7.4;

(3) Owned in whole or in part means:

(a) For a publicly traded company, any share of ownership that entails the ability to direct or influence the operations of the company, the ability to appoint or discharge any board members, officers, or directors, or any other rights beyond those available to a retail investor holding an equivalent share of ownership; and

(b) For a privately held company, any share of ownership;

(4) Public entity means the state or any department, agency, commission, or other body of state government, including publicly funded institutions of higher education, any political subdivision of the state, and any other public or private agency, person, partnership, corporation, or business entity acting on behalf of any such public entity;

(5) Scrutinized company means:

(a) Any company organized under the laws of a foreign adversary or having its principal place of business within a foreign adversary, and any subsidiary of any such company;

(b) Any company owned in whole or in part or operated by the government of a foreign adversary, an entity controlled by the government of a foreign adversary, or any subsidiary or parent of any such company; or

(c) Any company that sells to a public entity a final technology-related product or service that originates with a company described in subdivision (5)(a) or (b) of this section without incorporating that product or service into another final product or service; and

(6) Technology-related product or service means a product or service used for information systems, surveillance, light detection and ranging, or communications.

A scrutinized company shall not bid on, submit a proposal for, or enter into, directly or indirectly through a third party, any contract or contract renewal with any public entity for any technology-related product or service.

A public entity shall require a company that submits a bid or proposal or enters into any contract or contract renewal with any public entity for any technology-related product or service to certify:

(1) That the company is not a scrutinized company;

(2) That the company will not subcontract with any scrutinized company for any aspect of performance of the contemplated contract; and

(3) That any products or services to be provided do not originate with a scrutinized company.

(1) No public entity shall enter into any contract or contract renewal that would result in any state or local government funds being transferred:

(a) To a scrutinized company in connection with any technology-related product or service; or

(b) To any company in connection with any technology-related product or service that originates with a scrutinized company.

(2) Notwithstanding subsection (1) of this section, a public entity may enter into a contract for goods manufactured by a scrutinized company if:

(a)(i) There is no other reasonable option for procuring such good;

(ii) The contract is preapproved by the Department of Administrative Services; and

(iii) Not procuring such good would pose a greater threat to the state than the threat associated with the good itself; or

(b) The purchasing entity is an electric supplier that is not out of compliance with the Critical Infrastructure Protection requirements issued by the North American Electric Reliability Corporation.

(1) Any contract entered into in violation of the Foreign Adversary Contracting Prohibition Act shall be null and void.

(2) Any scrutinized company that violates section 73-904 or that violates the certification provided pursuant to section 73-905:

(a) Shall be liable for a civil penalty in an amount equal to the highest of the following three amounts:

(i) Two hundred fifty thousand dollars;

(ii) Twice the amount of the contract for which a bid or proposal was submitted; or

(iii) The amount of any losses suffered by the public entity as a result of such violation; and

(b) Shall be ineligible to enter into any contract with any public entity for a period of five years.

(3) The Attorney General may bring an action in any court of competent jurisdiction against any person that violates the Foreign Adversary Contracting Prohibition Act.

(4) If a public entity believes that a company has violated the certification provided pursuant to section 73-905, the public entity shall give such company notice of the alleged violation. The company shall then have sixty days to respond to the notice. The public entity shall make a final determination on whether a violation of such certification has occurred within sixty days after receipt of the response from the company. If the public entity determines that a violation has occurred, the public entity may refer the matter to the Attorney General.

(5) Any individual may act as a whistleblower and report suspected violations of section 73-904 or suspected violations of the certification provided pursuant to section 73-905 to the Attorney General. If the reported violation results in a civil penalty under this section, the whistleblower shall be entitled to a reward equal to thirty percent of the civil penalty assessed.