AN ACT enacting protest procedures for the award of state information technology contracts.

The General Assembly of North Carolina enacts:

SECTION 1.  Part 4 of Article 15 of Chapter 143B of the General Statutes is amended by adding a new section to read:

§ 143B‑1363.  Protest procedures for award of information technology contracts.

(a)        The following procedures and requirements apply whenever an offeror protests an information technology contract awarded by an agency if the contract value is twenty‑five thousand dollars ($25,000) or more:

(1)        The offeror shall deliver a written request for a protest meeting to the agency head or the agency head's designee within 15 calendar days from the date of contract award. The offeror's request shall contain specific reasons and any supporting documentation regarding why there is a concern with the award. The agency head shall furnish a copy of the written request to the State CIO within 10 calendar days of receipt.

(2)        If the offeror's request does not contain this information or the agency head determines that a meeting would serve no purpose, then the agency head, within 10 calendar days from the date of receipt, may respond in writing to the offeror and refuse the protest meeting request. A copy of the agency head's letter shall be forwarded to the State CIO.

(3)        If the protest meeting is granted, the agency head shall give written notice to the State CIO and any awarded vendor of the date and time of the protest meeting. The agency shall give notice to the awarded vendor and the State CIO stating whether any purchase order or performance has been suspended or terminated. The agency head shall schedule the meeting within 30 calendar days after receipt of the letter, unless a later date is accepted by the protesting party and the agency.

(4)        Within 10 calendar days from the date of the protest meeting, the agency head shall respond to the offeror in writing with an agency decision. A copy of the agency head's letter shall be forwarded to the State CIO.

(5)        If a protest is determined to be valid by the State CIO, then one of following outcomes shall occur:

a.         The award and issued purchase order shall be canceled and the solicitation for offers to contract is not rebid.

b.         The award and issued purchase order shall be canceled and the solicitation for offers to contract is rebid.

c.         The award and issued purchase order shall be canceled and the contract shall be awarded to the next lowest priced, technically competent, qualified offeror, if that offeror agrees to still honor its submitted bid.

(b)        The following procedures and requirements apply whenever an offeror protests an information technology contract awarded by the State CIO if the contract value is twenty‑five thousand dollars ($25,000) or more:

(1)        The offeror shall deliver a written request for a protest meeting to the State CIO within 15 calendar days from the date of contract award. The offeror's request shall contain specific reasons and any supporting documentation regarding the offeror's concern with the award. If the request does not contain this information or the State CIO determines that a meeting would serve no purpose, then the State CIO, within 10 calendar days from the date of receipt of the offeror's protest, may respond in writing to the offeror and refuse the protest meeting request. A copy of the State CIO's letter shall be forwarded to the designated hearing officer.

(2)        If the protest meeting is granted, the State CIO shall attempt to schedule the meeting within 30 calendar days after receipt of the offeror's protest unless a later date is accepted by the protesting party and the State CIO. Within 10 calendar days from the date of the protest meeting, the State CIO shall respond to the offeror in writing with a decision. A copy of the decision shall be forwarded to the designated hearing officer.

(c)        The following procedures and requirements apply whenever an offeror protests a statewide term or convenience contract, or master agreement, established by the State CIO:

(1)        The offeror shall deliver a written request for a protest meeting to the State CIO within 15 calendar days from the date of the contract award. The offeror's request shall contain specific reasons and any supporting documentation regarding the offeror's concern with the award. If the request does not contain this information or the State CIO determines that a meeting would serve no purpose, the State CIO, within 10 calendar days from the date of receipt of the offeror's request, shall respond in writing to the offeror and refuse the protest meeting request. A copy of the State CIO's letter shall be forwarded to the designated hearing officer.

(2)        If the protest meeting is granted, the State CIO shall give written notice to the designated hearing officer and any awarded vendor of the date and time of the protest meeting. Notice shall be given to the awarded vendor and the designated hearing officer stating whether any purchase order or performance has been suspended or terminated. The State CIO shall schedule the meeting within 30 calendar days after receipt of the offeror's protest unless a later date is accepted by the protesting party and the State CIO. Within 10 calendar days from the date of the protest meeting, the State CIO shall respond to the protesting offeror in writing with a decision. A copy of the decision shall be forwarded to the designated hearing officer.

(d)       If a party desires further administrative review after the protest meeting and receipt of the decision under subsection (a), (b), or (c) of this section, the party may, within 60 days from the date the decision is received, request a hearing and final decision by the State CIO under this section and Article 3A of Chapter 150B of the General Statutes. The State CIO shall schedule the hearing within 30 days after receipt of the offeror's request and respond in writing with a final decision within 10 days of the date of the hearing.

(e)        The State CIO's failure to adhere to the time line and notice requirements for a protest shall render null and void the State CIO's objections or decision related to that protest.

(f)        The agency shall be a party in the further review processes when the further administrative review involves a contract awarded by an agency that is twenty‑five thousand dollars ($25,000) or more in value.

(g)        The agency shall establish procedures to address protests by offerors where the award value is less than twenty‑five thousand dollars ($25,000). An agency decision under this subsection is final and subject to review under Article 3A of Chapter 150B of the General Statutes.

(h)        The signature of an attorney or party on a protest constitutes a certification by the signer that the signer has read such document; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law; and that it is not interposed for any improper purpose such as to harass, cause unnecessary delay, or a needless increase in the cost of the procurement or of the litigation. If a protest is determined to be frivolous or to have been filed without any substantial basis or reasonable expectation to believe that the protest was meritorious, the State CIO, upon motion or upon the State CIO's own initiative, may impose any sanction available under Chapter 1A‑1 of the General Statutes, the Rules of Civil Procedure. Notification to the affected party shall be made in writing.

SECTION 2.  G.S. 150B‑38 reads as rewritten:

§ 150B‑38.  Scope; hearing required; notice; venue.

(a)        The provisions of this Article shall apply to:

…

(4)        The State Chief Information Officer in the administration of the provisions of Article 15 of Chapter 143B of the General Statutes.

…

(b)        Prior to any agency action in a contested case, the agency shall give the parties in the case an opportunity for a hearing without undue delay and notice not less than 15 days before the hearing. Notice to the parties shall include:

(1)        A statement of the date, hour, place, and nature of the hearing;

(2)        A reference to the particular sections of the statutes and rules involved; and

(3)        A short and plain statement of the facts alleged.

(c)        Notice shall be given by one of the methods for service of process under G.S. 1A‑1, Rule 4(j) or Rule 4(j3). If given by registered or certified mail, by signature confirmation as provided by the United States Postal Service, or by designated delivery service authorized pursuant to 26 U.S.C. § 7502(f)(2) with delivery receipt, notice shall be deemed to have been given on the delivery date appearing on the return receipt, copy of proof of delivery provided by the United States Postal Service, or delivery receipt. If notice cannot be given by one of the methods for service of process under G.S. 1A‑1, Rule 4(j) or Rule 4(j3), then notice shall be given in the manner provided in G.S. 1A‑1, Rule 4(j1).

(d)       A party who has been served with a notice of hearing may file a written response with the agency. If a written response is filed, a copy of the response must be mailed to all other parties not less than 10 days before the date set for the hearing.

(e)        All hearings conducted under this Article shall be open to the public. A hearing conducted by the agency shall be held in the county where the agency maintains its principal office. A hearing conducted for the agency by an administrative law judge requested under G.S. 150B‑40 shall be held in a county in this State where any person whose property or rights are the subject matter of the hearing resides. If a different venue would promote the ends of justice or better serve the convenience of witnesses, the agency or the administrative law judge may designate another county. A person whose property or rights are the subject matter of the hearing waives his objection to venue if he proceeds in the hearing.

(f)        Any person may petition to become a party by filing with the agency or hearing officer a motion to intervene in the manner provided by G.S. 1A‑1, Rule 24. In addition, any person interested in a contested case under this Article may intervene and participate to the extent deemed appropriate by the agency hearing officer.

(g)        When contested cases involving a common question of law or fact or multiple proceedings involving the same or related parties are pending before an agency, the agency may order a joint hearing of any matters at issue in the cases, order the cases consolidated, or make other orders to reduce costs or delay in the proceedings.

(h)        Every agency shall adopt rules governing the conduct of hearings that are consistent with the provisions of this Article.

(i)         Standards adopted by the State Chief Information Officer and are applied to information technology as defined in G.S. 143B‑1320.G.S. 143B‑1320. The provisions of G.S. 143B‑1363(e) apply if the State CIO fails to adhere to the time line and notice requirements of this Article.

SECTION 3.  This act is effective when it becomes law and applies to protests commenced on or after that date.