N.M. Stat. § 13-4-2 (2026)

A. For the purposes of this section:

       (1)    "formal bid process" means a competitive sealed bid process;

      (2)    "formal request for proposals process" means a competitive sealed
proposal process, including a competitive sealed qualifications-based proposal process;
       (3)   "Native American resident contractor" means a person that has a valid
Native American resident contractor certificate issued by the taxation and revenue
department pursuant to Section 13-1-22 NMSA 1978 but does not include a Native
American resident veteran contractor;

       (4)    "Native American resident veteran contractor" means a person that has a
valid Native American resident veteran contractor certificate issued by the taxation and
revenue department pursuant to Section 13-1-22 NMSA 1978;

        (5)     "public body" means a department, commission, council, board,
committee, institution, legislative body, agency, government corporation, educational
institution or official of the executive, legislative or judicial branch of the government of
the state or a political subdivision of the state and the agencies, instrumentalities and
institutions thereof, including two-year post-secondary educational institutions, school
districts, local school boards and all municipalities, including home-rule municipalities;

      (6)    "public works contract" means a contract for construction, construction
management, architectural, landscape architectural, engineering, surveying or interior
design services;

        (7)    "resident contractor" means a person that has a valid resident contractor
certificate issued by the taxation and revenue department pursuant to Section 13-1-22
NMSA 1978 but does not include a resident veteran contractor; and

       (8)   "resident veteran contractor" means a person that has a valid resident
veteran contractor certificate issued by the taxation and revenue department pursuant
to Section 13-1-22 NMSA 1978.

   B. For the purpose of awarding a public works contract using a formal bid process,
a public body shall deem a bid submitted by a:

      (1)    resident contractor or Native American resident contractor to be eight
percent lower than the bid actually submitted; or

       (2)    resident veteran contractor or Native American resident veteran contractor
with annual gross revenues of up to six million dollars ($6,000,000) in the preceding tax
year to be ten percent lower than the bid actually submitted.

   C. When a public body awards a contract using a formal request for proposals
process, not including contracts awarded on a point-based system, the public body shall
award an additional:

      (1)    eight percent of the total weight of all the factors used in evaluating the
proposals to a resident contractor or Native American resident contractor; or
      (2)     ten percent of the total weight of all the factors used in evaluating the
proposals to a resident veteran contractor or Native American resident veteran
contractor that has annual gross revenues of up to six million dollars ($6,000,000) in the
preceding tax year.

   D. When a public body makes a purchase using a formal request for proposals
process, and the contract is awarded based on a point-based system, the public body
shall award an additional of the equivalent of:

      (1)   eight percent of the total possible points to a resident contractor or Native
American resident contractor; or

        (2)    ten percent of the total possible points to a resident veteran contractor or
Native American resident veteran contractor that has annual gross revenues of up to six
million dollars ($6,000,000) in the preceding tax year.

    E. When a joint bid or joint proposal is submitted by a combination of resident
veteran, Native American resident veteran, resident, Native American resident or
nonresident contractors, the preference provided pursuant to Subsection B, C or D of
this section shall be calculated in proportion to the percentage of the contract, based on
the dollar amount of the goods or services provided under the contract, that will be
performed by each contractor as specified in the joint bid or joint proposal.

   F. A person shall not benefit from the provisions of this section based on more than
one business concurrently.

   G. A public body shall not award a contractor both a resident contractor preference
and a resident veteran contractor preference or a Native American resident contractor
preference and a Native American resident veteran contractor preference.

    H. The procedures provided in Sections 13-1-172 through 13-1-183 NMSA 1978 or
in an applicable purchasing ordinance apply to a protest to a public body concerning the
awarding of a contract in violation of this section.

History: 1978 Comp., § 13-4-2, enacted by Laws 1984, ch. 66, § 2; 1988, ch. 84, § 3;
1989, ch. 310, § 2; 1997, ch. 1, § 3; 1997, ch. 2, § 3; 2001, ch. 174, § 1; 2011 (1st S.S.),
ch. 3, § 5; 2012, ch. 56, § 5; 2012, ch. 56, § 6; 2016, ch. 5, § 2; 2022, ch. 6, § 3.

                                     ANNOTATIONS

Repeals. — Laws 2016, ch. 5, § 4, effective July 1, 2016, repealed Laws 2012, ch. 56,
§ 6, which was to become effective July 1, 2022. For provisions of former section, see
the 2015 NMSA 1978 on NMOneSource.com.

The 2022 amendment, effective July 1, 2022, increased the preference for New Mexico
resident contractors, increased the maximum allowable gross revenue for resident
veteran contractors to qualify for certain preferences, amended existing provisions
giving a preference to resident contractors and resident veteran contractors to include
Native American resident contractors and Native American resident veteran contractors,
defined "Native American resident contractor" and Native American resident veteran
contractor" for purposes of this section, and removed a provision that prohibited a
business from claiming a preference for more than ten consecutive years; in Subsection
A, added new Paragraphs A(3) and A(4) and redesignated former Paragraphs A(3)
through A(6) as Paragraphs A(5) through A(8), respectively; in Subsection B, Paragraph
B(1), after "resident contractor", added "or Native American resident contractor", after
"to be", deleted "five" and added "eight", and in Paragraph B(2), after "resident veteran
contractor", added "or Native American resident veteran contractor", and after "annual
gross revenues of up to", deleted "three million dollars ($3,000,000)" and added "six
million dollars ($6,000,000)"; in Subsection C, Paragraph C(1), deleted "five" and added
"eight", and after "resident contractor", added "or Native American resident contractor",
and in Paragraph C(2), after "resident veteran contractor", added "or Native American
resident veteran contractor", and after "annual gross revenues of up to", deleted "three
million dollars ($3,000,000)" and added "six million dollars ($6,000,000)"; in Subsection
D, in Paragraph D(1), after the paragraph designation, deleted "five" and added "eight",
and after "resident contractor", added "or Native American resident contractor", and in
Paragraph D(2), after "resident veteran contractor" and added "or Native American
resident veteran contractor", and after "annual gross revenues of up to", deleted "three
million dollars ($3,000,000)" and added "six million dollars ($6,000,000)"; in Subsection
E, after the first occurrence of "resident veteran,", added "Native American resident
veteran", and after the next occurrence of "resident", added "Native American resident";
in Subsection F, deleted "A resident veteran contractor shall not benefit from the
preference pursuant to this section for more than ten consecutive years. A person that
is an owner of a business that is a resident veteran contractor shall not benefit from the
preference pursuant to this section for more than ten consecutive years"; and in
Subsection G, after "resident veteran contractor preference", added "or a Native
American resident contractor preference and a Native American resident veteran
contractor preference".

The 2016 amendment, effective July 1, 2016, reduced the maximum revenue that a
resident veteran contractor can earn to receive the veteran contractor preference,
merged the former tiered preferences into one ten percent preference, set a ten
consecutive year maximum time for a vendor to use the resident veteran contractor
preference, and limited the benefit to one business concurrently; in Subsection B, in
Paragraph (1), after the semicolon, added "or", in Paragraph (2), after "annual", added
"gross", and after "revenues of", deleted "one million dollars ($1,000,000) or less" and
added "up to three million dollars ($3,000,000) in the preceding tax year", and deleted
Paragraphs (3) and (4) which provided for a tiered resident veteran contractor
preference; in Subsection C, Paragraph (1), after the semicolon, added "or", in
Paragraph (2), after "annual", added "gross", and after "revenues of", deleted "one
million dollars ($1,000,000) or less" and added "up to three million dollars ($3,000,000)
in the preceding tax year", and deleted Paragraphs (3) and (4), which provided for a
tiered resident veteran contractor preference; in Subsection D, Paragraph (1), after the
semicolon, added "or", in Paragraph (2), after "annual", added "gross", and after
"revenues of", deleted "one million dollars ($1,000,000) or less" and added "up to three
million dollars ($3,000,000) in the preceding tax year", and deleted Paragraphs (3) and
(4), which provided for a tiered resident veteran contractor preference; deleted former
Subsection F, which limited the former tiered resident veteran contractor preferences to
an aggregate of ten million dollars ($10,000,000) in purchases by public bodies from all
resident veteran contractors receiving preferences; and added a new Subsection F.

The 2012 amendment, effective July 1, 2012, gave resident veteran businesses a
preference; in the title, deleted "Resident contractor defined"; in Subsection A, in
Paragraph (5), after "Section 13-1-22 NMSA 1978", added the remainder of the
sentence and added Paragraph (6); in Subsection B, added Paragraphs (2) through (4);
in Subsection C, in the introductory sentence, after "proposals process", added the
remainder of the sentence, in Paragraph (1), after "evaluating the proposals", deleted
"shall be awarded" and after "resident contractor", deleted "based on the resident
contractor possessing a valid resident contractor certificate; or", and added Paragraphs
(2) through (4); in Subsection D, in the introductory sentence, added "When a public
body makes a purchase using a formal request for proposal process, and" and after
"point-based system", deleted "a" and added the remainder of the sentence, in
Paragraph (1), at the beginning of the sentence, deleted "resident contractor shall be
awarded the equivalent of", after "total possible points to", deleted "be awarded based
on the" and added "a", and after "resident contractor", deleted "possessing a valid
resident contractor certificate", and added Paragraphs (2) through (4); in Subsection E,
after "proposal is submitted by", deleted "both resident and" and added "a combination
of resident veteran, resident or", after "nonresident contractors, the", deleted "resident
contractor", after "Subsection B", deleted "or", after "Subsection B, C", added "or D",
after "this section shall be", deleted "reduced" and added "calculated", and after "will be
performed by" deleted "a nonresident" and added "each"; and added Subsections F and
G.

The 2011 (1st. S.S.) amendment, effective October 5, 2011, provided a five percent
advantage to bids and proposals by resident contractors; eliminated the practice of
brokering the preference through joint bids or proposals by resident and non-resident
contractors by reducing the preference by the percentage of the contract performed by
the nonresident contractor; eliminated the preference for New York state business
enterprises; provided the procedure for protesting violations of this section; deleted
former Sections A through E, which defined "resident contractor", "New Mexico resident
contractor", "New York state business enterprise", and "affiliate", provided for awarding
a contract to a resident contractor when the bid by the resident contractor is made
lower, by the application of a five percent preference, than the lowest bid from a
nonresident contractor, and provided for the certification of resident contractors and the
issuance of a certification number by the state purchasing agent; and added new
Subsections A through E.

The 2001 amendment, effective June 15, 2001, in Subsection B, deleted residency
requirements for the majority of stockholders and those who have a beneficial interest in
the corporations, partnerships, and trusts who bid with a New Mexico resident
contractor in Paragraphs (1) and (2); deleted "and the individual shall be a citizen of and
domiciled in the state" from Paragraph (3); deleted the paragraph designation D(1) and
deleted Paragraph D(2), which contained the definition for "beneficially owned" or
"beneficial interest".

The 1997 amendment, effective January 24, 1997, inserted "means a New Mexico
resident contractor or a New York state business enterprise" in Subsection A;
designated Subsection B and added "'New Mexico resident contractor' means" at the
beginning; deleted "New Mexico" preceding "Unemployment Compensation Law" in
Paragraph B(4); added Subsection C and redesignated former Subsections B through D
as Subsections D through F and substituted "Subsection E" for "Subsection C" near the
end of Subsection F(3).

Constitutionality. — Plaintiff shareholder's privileges and immunities claim under
Article 4, § 2 of the United States Constitution was granted where defendant/state
burdened the right to own a business by discriminating against owners solely on the
basis of citizenship, and plaintiff was able to establish that § 13-1-21A(2) under the
former Procurement Contract Code was a better-tailored statute than this section. C.S.
McCrossan Constr., Inc. v. Rahn, 96 F. Supp. 2d 1238 (D.N.M. 2000) (decided prior to
2001 amendment, which amended residency requirement provision).

Equal protection. — This section does not violate the equal protection clause of the
United States Constitution because encouraging economic development and supporting
the state's road construction industry are legitimate purposes of the resident contractor
preference statute. C.S. McCrossan Constr., Inc. v. Rahn, 96 F. Supp. 2d 1238 (D.N.M.
2000).

Application. — Where a county in New Mexico decided to build a jail and bypassed the
resident preference for contractors found in Subsection E, the court of appeals found
that the resident preference formula applied to all bids for public works contracts and
had to be followed. Bradbury & Stamm Constr. v. Board of Cnty. Comm'rs, 2001-NMCA-
106, 131 N.M. 293, 35 P.3d 298.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Works and
Contracts §§ 66 to 69.

Constitutionality of enactment or regulation forbidding or restricting employment of
aliens in public employment or on public works, 38 A.L.R.3d 1213.

72 Supp. C.J.S. Public Contracts §§ 12, 15, 16.