BAN ON State Contracts with PROHIBITED Entities

Effective July 1, 2023, a new law derived from Senate Bill 189 (SDCL 5-18A-50 to 53), led by Governor Noem and approved by the legislature, brings important changes to state contracts and purchases. It affects deals, bids, and proposals for supplies, services, public improvements, and various contracts. The recent cancellation of Executive Order 2023-02 also takes effect on the same date.

Key Points of the New Law:

1. Prohibited Contracts: South Dakota forbids contracts with entities owned or controlled by foreign parent entities or governments from China, Iran, North Korea, Russia, Cuba, or Venezuela.
2. Notice and Certification: Documents related to contracts must inform about the law. Bidders must confirm their eligibility and lack of association with prohibited entities when submitting proposals, bids, or upon contract renewal.
3. Updates and Termination: Contract parties must inform if they become prohibited entities, which could lead to contract termination.
4. Covered Contracts: SB 189 applies to agreements for supplies, services, public improvements, design-build requests, construction manager-at-risk services, and online reverse auctions valued at $50,000 or more for supplies/services and $100,000 or more for public improvements.

Affected Agencies:
All state and local governmental bodies, excluding the federal government, are subject to the new law. Guidelines:

1. Existing Contracts: No extra action needed until renewal, which then must comply with the new law.
2. Under $50,000 Purchases: No added requirements for smaller goods/services.
3. Issuing RFPs/Bid Solicitations: Include language/term specified in SB189 RFP Insert to the RFP to ensure compliance with SB189.
4. Covered Contracts/Purchases: Contractors must have a Certification on file or agencies must add the language/term specified in SB189 Contract Insert to the contract before signing

The Compliant Vendor List identifies vendors who have met the requirements of the new law (SB189/SDCL 5-18A-50 to 53) by submitting a duly filled and signed Vendor Certification Form. You can download both the list and the certification form below:

• SB 189 Compliant Vendor List 
• SB189 Vendor Certification Form
  

If you are a vendor that is not on the current list and would like to be added, please email a signed copy of the Vendor Certification Form to OPM@state.sd.us

Contact your agency's attorney for assistance in complying with the new law. Share this information with colleagues responsible for RFPs, bid-lettings, or contracts.