HB5417 104TH GENERAL ASSEMBLY

LRB104 19557 LNS 33005 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5417

Introduced 2/13/2026, by Rep. Michelle Mussman

SYNOPSIS AS INTRODUCED:

105 ILCS 5/10-20.21

Amends the School Code. In provisions concerning the award of certain contracts to the lowest responsible bidder, provides that a contract for goods, services, or management in the operation of a school's food service entered into between a school board and a food service management company shall (1) be for a duration of no longer than one year, with options for yearly renewal of the contract not exceeding 4 additional years and (2) include a termination clause whereby either party may cancel for cause after a 60-day notification. Provides that all competitive bids for a contract for goods, services, or management in the operation of a school's food service entered into between a school board and a food service management company are subject to standardized evaluation criteria created by the State Board of Education for scoring that have been published on the State Board's website in advance. Provides that the school board shall maintain a record of the evaluation scoring, to be disclosed to all bidders within 10 days after the date of the award of the contract.

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The School Code is amended by changing Section 10-20.21 as follows:

(105 ILCS 5/10-20.21)

Sec. 10-20.21. Contracts.

(a) To award all contracts for purchase of supplies and materials or work involving an expenditure in excess of $35,000 or a lower amount as required by board policy to the lowest responsible bidder, considering conformity with specifications, terms of delivery, quality and serviceability, after due advertisement, except the following:

(i) contracts for the services of individuals possessing a high degree of professional skill where the ability or fitness of the individual plays an important part;

(ii) contracts for the printing of finance committee reports and departmental reports;

(iii) contracts for the printing or engraving of bonds, tax warrants and other evidences of indebtedness;

(iv) contracts for the purchase of perishable foods and perishable beverages;

(v) contracts for materials and work which have been awarded to the lowest responsible bidder after due advertisement, but due to unforeseen revisions, not the fault of the contractor for materials and work, must be revised causing expenditures not in excess of 10% of the contract price;

(vi) contracts for the maintenance or servicing of, or provision of repair parts for, equipment which are made with the manufacturer or authorized service agent of that equipment where the provision of parts, maintenance, or servicing can best be performed by the manufacturer or authorized service agent;

(vii) purchases and contracts for the use, purchase, delivery, movement, or installation of data processing equipment, software, or services and telecommunications and interconnect equipment, software, and services;

(viii) contracts for duplicating machines and supplies;

(ix) contracts for the purchase of fuel, including diesel, gasoline, oil, aviation, natural gas, or propane, lubricants, or other petroleum products;

(x) purchases of equipment previously owned by some entity other than the district itself;

(xi) contracts for repair, maintenance, remodeling, renovation, or construction, or a single project involving an expenditure not to exceed $50,000 and not involving a change or increase in the size, type, or extent of an existing facility;

(xii) contracts for goods or services procured from another governmental agency;

(xiii) contracts for goods or services which are economically procurable from only one source, such as for the purchase of magazines, books, periodicals, pamphlets and reports, and for utility services such as water, light, heat, telephone or telegraph;

(xiv) where funds are expended in an emergency and such emergency expenditure is approved by 3/4 of the members of the board;

(xv) State master contracts authorized under Article 28A of this Code;

(xvi) contracts providing for the transportation of pupils, which contracts must be advertised in the same manner as competitive bids and awarded by first considering the bidder or bidders most able to provide safety and comfort for the pupils, stability of service, and any other factors set forth in the request for proposal regarding quality of service, and then price; and

(xvii) contracts for goods, services, or management in the operation of a school's food service, including a school that participates in any of the United States Department of Agriculture's child nutrition programs if a good faith effort is made on behalf of the school district to give preference to:

(1) contracts that procure food that promotes the health and well-being of students, in compliance with United States Department of Agriculture nutrition standards for school meals. Contracts should also promote the production of scratch made, minimally processed foods;

(2) contracts that give a preference to State or regional suppliers that source local food products;

(3) contracts that give a preference to food suppliers that utilize producers that adopt hormone and pest management practices recommended by the United States Department of Agriculture;

(4) contracts that give a preference to food suppliers that value animal welfare; and

(5) contracts that increase opportunities for businesses owned and operated by minorities, women, or persons with disabilities.

Food supplier data shall be submitted to the school district at the time of the bid, to the best of the bidder's ability, and updated annually thereafter during the term of the contract. The contractor shall submit the updated food supplier data. The data required under this item (xvii) shall include the name and address of each supplier, distributor, processor, and producer involved in the provision of the products that the bidder is to supply. However, at no time shall a cause of action lie against a school board for awarding a pupil transportation contract per the standards set forth in this subsection (a) unless the cause of action is based on fraudulent conduct.

All competitive bids for contracts involving an expenditure in excess of $35,000 or a lower amount as required by board policy must be sealed by the bidder and must be opened by a member or employee of the school board at a public bid opening at which the contents of the bids must be announced. Each bidder must receive at least 3 days' notice of the time and place of the bid opening. For purposes of this Section due advertisement includes, but is not limited to, at least one public notice at least 10 days before the bid date in a newspaper published in the district, or if no newspaper is published in the district, in a newspaper of general circulation in the area of the district. State master contracts and certified education purchasing contracts, as defined in Article 28A of this Code, are not subject to the requirements of this paragraph.

Under this Section, the acceptance of bids sealed by a bidder and the opening of these bids at a public bid opening may be permitted by an electronic process for communicating, accepting, and opening competitive bids. An electronic bidding process must provide for, but is not limited to, the following safeguards:

(1) On the date and time certain of a bid opening, the primary person conducting the competitive, sealed, electronic bid process shall log onto a specified database using a unique username and password previously assigned to the bidder to allow access to the bidder's specific bid project number.

(2) The specified electronic database must be on a network that (i) is in a secure environment behind a firewall; (ii) has specific encryption tools; (iii) maintains specific intrusion detection systems; (iv) has redundant systems architecture with data storage back-up, whether by compact disc or tape; and (v) maintains a disaster recovery plan.

It is the legislative intent of Public Act 96-841 to maintain the integrity of the sealed bidding process provided for in this Section, to further limit any possibility of bid-rigging, to reduce administrative costs to school districts, and to effect efficiencies in communications with bidders.

(b) To require, as a condition of any contract for goods and services, that persons bidding for and awarded a contract and all affiliates of the person collect and remit Illinois Use Tax on all sales of tangible personal property into the State of Illinois in accordance with the provisions of the Illinois Use Tax Act regardless of whether the person or affiliate is a "retailer maintaining a place of business within this State" as defined in Section 2 of the Use Tax Act. For purposes of this Section, the term "affiliate" means any entity that (1) directly, indirectly, or constructively controls another entity, (2) is directly, indirectly, or constructively controlled by another entity, or (3) is subject to the control of a common entity. For purposes of this subsection (b), an entity controls another entity if it owns, directly or individually, more than 10% of the voting securities of that entity. As used in this subsection (b), the term "voting security" means a security that (1) confers upon the holder the right to vote for the election of members of the board of directors or similar governing body of the business or (2) is convertible into, or entitles the holder to receive upon its exercise, a security that confers such a right to vote. A general partnership interest is a voting security.

To require that bids and contracts include a certification by the bidder or contractor that the bidder or contractor is not barred from bidding for or entering into a contract under this Section and that the bidder or contractor acknowledges that the school board may declare the contract void if the certification completed pursuant to this subsection (b) is false.

(b-5) To require all contracts and agreements that pertain to goods and services and that are intended to generate additional revenue and other remunerations for the school district in excess of $1,000, including without limitation vending machine contracts, sports and other attire, class rings, and photographic services, to be approved by the school board. The school board shall file as an attachment to its annual budget a report, in a form as determined by the State Board of Education, indicating for the prior year the name of the vendor, the product or service provided, and the actual net revenue and non-monetary remuneration from each of the contracts or agreements. In addition, the report shall indicate for what purpose the revenue was used and how and to whom the non-monetary remuneration was distributed.

(b-10) To prohibit any contract to purchase food with a bidder or offeror if the bidder's or offeror's contract terms prohibit the school from donating food to food banks, including, but not limited to, homeless shelters, food pantries, and soup kitchens.

(b-15) A contract for goods, services, or management in the operation of a school's food service, including a school that participates in any of the United States Department of Agriculture's child nutrition programs, entered into between a school board and a food service management company on or after the effective date of this amendatory Act of the 104th General Assembly shall:

(1) be of a duration of no longer than one year, with options for yearly renewal of the contract not exceeding 4 additional years; and

(2) include a termination clause whereby either party may cancel for cause after a 60-day notification.

(b-20) All competitive bids for a contract for goods, services, or management in the operation of a school's food service, including a school that participates in any of the United States Department of Agriculture's child nutrition programs, entered into between a school board and a food service management company solicited on or after the effective date of this amendatory Act of the 104th General Assembly are subject to standardized evaluation criteria created by the State Board of Education for scoring that have been published on the State Board of Education's website in advance of the solicitation. The standardized evaluation criteria for scoring must include at least the following:

(1) that any score for a bid or proposal that is considered a statistical outlier be re-reviewed by an uninterested third-party determined in advance by the State Board of Education; and

(2) a requirement that financial terms in bids or proposals must be evaluated by a certified public accountant or an equally qualified individual employed in the occupation of finance or accounting.

The school board shall maintain a record of the evaluation scoring, to be disclosed to all bidders within 10 days after the date of the award of the contract.

(c) If the State education purchasing entity creates a master contract as defined in Article 28A of this Code, then the State education purchasing entity shall notify school districts of the existence of the master contract.

(d) In purchasing supplies, materials, equipment, or services that are not subject to subsection (c) of this Section, before a school district solicits bids or awards a contract, the district may review and consider as a bid under subsection (a) of this Section certified education purchasing contracts that are already available through the State education purchasing entity.

(Source: P.A. 102-1101, eff. 6-29-22; 103-8, eff. 1-1-24.)