|FAQs||Proposed Ordinance||Why You Need It||Current RBOs In Use|
responsible bidder ordinance faqWhat 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.
- All bidders must:
- Comply with all laws pre-requisite to doing business in Illinois;
- Produce evidence of a federal employer tax number or social security number;
- Provide evidence of all specified insurance coverage;
- Comply with all provisions of the Illinois Prevailing Wage Act;
- Must be participating in a USDOL approved and registered apprenticeship program;
- Comply with any/all other additional requirements a community may find beneficial.
- The public construction market has been the scene of an extraordinary amount of legal violations in recent years. Most recently in Illinois, the effects of balancing the State 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 the bearish economic climate, create competitive pressures that push unscrupulous contractors to cheat in order to submit low bids. Since awarding authorities normally award projects to the lowest bidder, those who are willing to cheat gain an enormous cost advantage.
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 called into question after awarding contracts to dishonorable contactors 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. With limited resources and personnel, these types of violations will likely be a concern for years to come. A “Responsible Bidder Ordinance” addresses these issues up front, as opposed to chasing the cheaters after the violations have occurred.
- 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, the Ordinance in neutral with respect to the union issue. It simply defines the phrase, “responsible bidder” as it relates to the language in the Illinois Municipal Code (65 ILCS 5/8-9-1) and in most of the procurement regulations around the State that say, “lowest responsible bidder.”
The Ordinance does not give an advantage to union contractors; it gives an advantage to responsible contractors. The Ordinance asks only that contractors who wish to benefit from public dollars play by the rules of fair and honest contracting.
- By requiring contractors to provide evidence that they comply with the laws of the State of Illinois, it is assuring the contracting agency that a company is legitimate and credible. For example, being current with the Secretary of State or the Department of Financial and Professional Regulation may demonstrate that a contractor is reputable and responsible.
By requiring the contractor to produce their Federal Employer Tax Number or Social Security Number provides an assurance to the contracting agency that they are working with legitimate contractors.
The “Equal Opportunity Employer” provisions provide for nondiscrimination in employment by government contractors and sub-contractors. Simply, it restates existing law to emphasize the importance.
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 Illinois requires; general liability, professional liability, product liability, worker’s compensation, completed operations, hazardous occupation, and automobile. Other communities have gone so far as to specify dollar amounts in their Ordinances.
By reinforcing that the contractors abide by the Illinois Prevailing Wage Act, a contracting agency is requiring that the prevailing wage is paid.
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, no employer should be subsidized by public funds without some training opportunities for his or her employees.
Other additional requirements could include; weekly certified payrolls, non-compliance penalties such as fines and debarment, policies on harassment, residency requirements, or a requirement for full and complete disclosure of past violations.
- Nothing, there will be no need to add enforcement officers because the Ordinance is designed to screen out offenders before the award of the contract. 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 bidders cannot demonstrate the minimum requirements, their bids will not be considered.
- The first Ordinance to define responsible bidder in Illinois was adopted in Winnebago County on May 12 1994. From that point numerous other Counties, Villages, and Cities adopted similar Ordinances until December 31, 2003. On that date, Governor Rod Blagojevich 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.
For more information, call the Midwest Regional Foundation for Fair Contracting at 217.789.6996