6. What will the passage of a Responsible Bidder Ordinance Cost?
Essentially nothing, there will be no need to add enforcement officers because the ordinance is designed to screen out offenders before the contract is awarded instead of pursuing them after the violations have been committed. Enforcement for most of the provisions is provided at the State level. The Responsible Bidder Ordinance simply requires bidders and sub-bidders to demonstrate that they can comply with the specifications written into the bid documents. If they are not able to, their bids will not be considered.
2. What are the specific requirements?
All bidders must:
a) Comply with all laws pre-requisite to doing business in The City of Houston
b) Produce evidence of a federal employer tax number or social security number
c) Provide evidence of compliance with Equal Opportunity Employer requirements
d) Provide evidence of all specified insurance coverages
e) Comply with all provisions of the City of Houston Prevailing Wages
f) Must be participating in a USDOL approved and registered apprenticeship program
g) Comply with any other additional requirements a community may find beneficial
family-sustaining living wage and provide basic benefits (healthcare & retirement)
High unemployment or low-income areas
Second chance hire
7. Is the Responsible Bidder Ordinance Lawful?
The first Ordinance to “Further Define Responsible Bidder” in Illinois was adopted by Winnebago County, on May 12th, 1994. From that point, it was adopted by numerous other Counties, and Cities until December 31, 2003, when The Governor of Illinois signed HB3048, making it Public Act 93-0642 an act that amended the Illinois Procurement Code to include “Responsible Bidder” language on state construction projects.
5. What is the significance of each provision?
a) By requiring contractors to provide evidence that they are in compliance with the laws of doing business in City of Houston, it is assuring the contracting agency that a company is legitimate and credible, by for example being current with the Secretary of State, if necessary, and not classified as “debarred” by the Department of Labor, to mention a few.
b) By requiring the contractor to produce their Federal Employer Tax Number or Social Security Number, (if they are an individual) it provides an assurance to the contracting agency that they are working with legitimate contractors.
c) The “Equal Opportunity Employer provisions” Provide for nondiscrimination in employment by government contractors and sub-contractors. This simply restates the existing Federal regulations.
d) Requiring specific certificates of insurance coverage is a way for the contracting agency to protect itself from the irresponsible actions of a dishonorable contractor. The State of Texas requires; general liability, professional liability, product liability, worker’s compensation, completed operations, hazardous occupation, and automobile. Other communities have required commercial umbrella policies and even gone so far as to specify dollar amounts in their Ordinances.
e) By reinforcing that contractors abide by the City of Houston Prevailing Wage Act, a contracting agency is not only requiring that the prevailing wage is paid but that employees covered under the act are also provided with medical and hospitalization insurance as well as retirement benefits as mandated by State law.
f) Participation in a United States Department of Labor’s Bureau of Apprenticeship and Training approved program creates an environment that supports and endorses education. With education, such a major part of public policy today, no employer should be subsidized by public funds without some training contribution. If apprentices are on the job but not part of a USDOL-BAT registered program, it is most likely a ruse to pay lower wages without offering genuine training.
g) Other additional requirements could include; weekly certified payrolls, non-compliance penalties such as fines and debarment, policies on harassment, family-sustaining living wage and provide basic benefits, mandating local hire requirements, Veterans hire, and High unemployment areas in our City and Second Chance workforce.
An Introduction to Responsible Bidder Ordinances
1. What is a Responsible Bidder Ordinance?
It is an ordinance that sets minimal requirements for all contractors and subcontractors bidding on publicly funded projects in the political jurisdiction covered by the ordinance. The requirements are then incorporated into all bid documents (similar to other state and local regulations) so that all potential bidders will know what is expected of them.
4. Is this just a pro-union law?
The word “union” does not appear in any Responsible Bidder Ordinance. The Ordinance
simply attempts to create a level playing field for all contractors, union and non-union alike, so that the lowest bids reflect managerial expertise rather than the willingness to subvert the laws of the State. Like the prevailing wage law which was enacted in 1933 in Texas, the Ordinance is neutral with respect to the union issue. It simply further defines the phrase “responsible bidder” as it relates to the term “lowest responsible bidder” that is referenced in the Local Govt. Code §252.043(a)-(b).and been incorporated into the majority of procurement regulations around the state.
It does not give an advantage to union contractors; it gives an advantage to responsible contractors. The Ordinance simply asks that contractors who wish to benefit from public dollars play by the rules of fair and honest contracting.
3. Why is a Responsible Bidder Ordinance needed?
The public construction market has been the scene of an extraordinary amount of legal violations in recent years. Most recently, in Houston the effects of balancing the City budget have resulted in cuts to every level of government, creating a decline in the effectiveness of the offices charged with the enforcement of prevailing wages and other relevant laws. This combined with a bearish economic climate create competitive pressures that push unscrupulous contractors to cheat in order to submit low bids. Since awarding, authorities must award projects to the lowest bidder, those who are willing to cheat, gain an enormous cost advantage, and have the effect of driving legitimate contractors out of the market.
Many people have been hurt by the destruction of standards in the public construction market. Workers have been cheated out of wages, communities have been cheated out of revenue, taxpayers have been subsidizing illegal activities, and the integrity of public officials has been brought into question after awarding contracts to dishonorable contractors who deliver poor quality products over budget and behind schedule.
While enforcement efforts may be bolstered by pending legislation, budgetary restraints will always continue to factor, so with limited resources and personnel, these types of violations will most likely be a concern for years to come. What the ”Responsible Bidder Ordinance” does is address these issues up front as opposed to chasing the cheaters after the violations have occurred.