Summary — HB 5277 (House Bill)
Status
- Introduced (filed March 14, 2025). House version electronically reproduced 11/12/2025; read first time and referred to the Committee on Government Operations on 11/12/2025.
- Companion bill: SB 1831.
Purpose
- Amends section 261 of the Management and Budget Act (1984 PA 431; MCL 18.1261) to clarify and tighten state procurement rules, prioritize in‑state/qualified suppliers where permitted, require competitive solicitation as the default procurement method, and strengthen preferences and goals for businesses owned by qualified disabled veterans (QDV).
Key provisions (major changes)
- Default requirement for competitive solicitation: The Department (Department of Technology, Management & Budget or successor referenced as “the department”) must utilize competitive solicitation for all purchases unless one or more enumerated exceptions apply.
- In‑state and environmental preference: Where consistent with federal law, the department shall give preference (all other things equal) to:
- Michigan‑based firms;
- Facilities whose operator is designated a “clean corporate citizen” under Part 14 of the Natural Resources and Environmental Protection Act; or
- Biobased products whose content is sourced in Michigan.
- Centralized procurement authority: The department retains discretionary authority over solicitation, award, amendment, cancellation, and appeal of state contracts; it must determine competitive solicitation is not appropriate before using other procurement methods.
- Enumerated exceptions to competitive solicitation include: imminent protection of public health or safety, emergency repairs, procurements in response to declared emergencies/disasters (various statutes cited), and procurements made under delegated agency purchasing authority (when agency procedures are approved by the department).
- Delegation: The department may delegate procurement authority to other state agencies with dollar/transaction limits and may revoke delegated authority for noncompliance. Agencies must obtain written departmental approval before exercising options to extend existing contracts.
- Lease/installment purchases: Department may enter lease/installment purchases up to the anticipated useful life of items.
- Cooperative purchasing: Department may enter cooperative purchasing agreements with other states or public entities.
- Qualified Disabled Veteran (QDV) preference and goals:
- A contract preference of “up to 10% not more than 15% of the amount of the contract” is provided to a qualified disabled veteran (language in the introduced bill includes both figures).
- Annual goal: department to award not less than 5% of its annual expenditures for construction, goods, and services to QDVs. Subcontracts with QDVs can be counted toward the goal.
- Annual reporting to the Legislature on QDV participation (bidders, contracts awarded, total value, goal attainment) and annual review with recommendations on the percentage goal.
- Governor directed to recommend programs to assist QDV‑owned businesses.
- Boycott representation: Contracts must include a representation (and agreement) that the contractor is not engaged in, and will not engage in, a boycott of a “strategic partner” (effective language references an October 1, 2017 start in the amended statute).
- FOIA exemption: The bill retains an exemption from FOIA for bids/quotes/proposals and related evaluation records until a specified point (text in the provided version is truncated).
Who is affected
- All state departments and agencies that procure goods, services, insurance, utilities, IT, equipment, printing, and other items.
- Private contractors and vendors seeking state contracts, with emphasis on Michigan‑based firms, clean corporate citizens, biobased product suppliers, and businesses owned by qualified disabled veterans.
- The department responsible for state procurement (policy, oversight, delegation, reporting).
Potential impacts and considerations
- Increased centralization and uniformity of procurement, with competitive solicitation as the presumptive approach.
- Greater preference for Michigan‑sourced goods/services and environmental‑compliant operators could favor in‑state suppliers and green practices (subject to federal law constraints).
- Enhanced procurement opportunities for qualified disabled veterans via preference and a 5% annual goal — administrative tracking and reporting requirements will increase.
- Emergency and delegated exceptions preserve flexibility for urgent or specialized procurements.
- Some language (notably the QDV preference percentage) appears internally inconsistent in the introduced text and could require clarification in amendments. Portions of the FOIA-related language were truncated in the provided version.
