1. (1) As used in this section, “services” means services as defined in ORS 279A.010 (1)(kk) and personal services designated under ORS 279A.055.

2. (2)

   1. (a) Notwithstanding provisions of law requiring a contracting agency to award a contract to the lowest responsible bidder or best proposer or provider of a quotation, a contracting agency that uses public funds to procure goods or services for a public use under ORS chapter 279B may give preference to:

      1. (A) Procuring goods or services from one of the following sources, if the goods or services cost not more than five percent more than goods or services available from contractors other than the source:

         1. (i) A benefit company that is incorporated, organized, formed or created under ORS 60.754, that submits with a bid or proposal a certificate of existence issued under ORS 60.027 and has the majority of the benefit company’s regular, full-time workforce located in this state at the time the benefit company submits the bid or proposal; or
         2. (ii) An entity in which the entity’s employees own at least 50 percent of the ownership interest in the entity directly or through an employee stock ownership plan, as defined in 26 U.S.C. 4975(e)(7), as in effect on September 26, 2025, that the United States Internal Revenue Service recognizes as a qualified plan; or
      2. (B) Procuring goods that are fabricated or processed, or services that are performed, entirely within this state if the goods or services cost not more than 10 percent more than goods that are not fabricated or processed, or services that are not performed, entirely within this state.
   2. (b) If more than one bidder or proposer qualifies for a preference described in paragraph (a) of this subsection, the contracting agency may give a further preference to a qualifying bidder or proposer that resides in or is headquartered in this state.
   3. (c) A contracting agency may give a preference to an entity described in paragraph (a)(A)(ii) of this subsection only if the entity submits with a bid or proposal for a public contract evidence that shows that employees of the entity own at least 50 percent of the entity’s ownership interest directly or through an employee stock ownership plan.
   4. (d) The contracting agency by order may set a higher cost percentage than the cost percentages set forth in paragraph (a) of this subsection if the contracting agency, in a written determination to support the order, finds good cause to set the higher cost percentage and explains the contracting agency’s reasons and evidence for the finding.
3. (3) Notwithstanding ORS 279C.320 (1), subsection (2) of this section does not apply to emergency work, minor alterations, ordinary repairs or maintenance work for public improvements or to other construction contracts described in ORS 279C.320 (1).

[2009 c.214 §2; 2011 c.237 §1; 2023 c.559 §1; 2025 c.304 §1]