HF 1984

as introduced - 88th Legislature (2013 - 2014) Posted on 02/25/2014 02:18pm

A bill for an act
relating to state government; providing for enhancement of accountability
and transparency in public construction; establishing a requirement for and a
definition of responsible contractor; proposing coding for new law in Minnesota
Statutes, chapter 16C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [16C.285] RESPONSIBLE CONTRACTOR REQUIREMENT
DEFINED.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.
new text end

new text begin (b) "Construction contract" means a contract for building, erection, construction,
alteration, remodeling, or repair work entered into by or at the direction of a state agency,
the Minnesota State Colleges and Universities, or a municipality where the amount of the
contract is estimated to exceed $25,000.
new text end

new text begin (c) "Contractor" means a vendor that performs building, erection, construction,
alteration, remodeling, or repair work and who submits a bid or proposal or otherwise
responds to a solicitation document of a contracting authority.
new text end

new text begin (d) "Contracting authority" means a state agency, the Minnesota State Colleges and
Universities, or a municipality that enters into a construction contract or authorizes or
directs entering into a construction contract.
new text end

new text begin (e) "Municipality" means a county, town, city, school district, or other municipal
corporation or political subdivision of the state authorized by law to enter into contracts.
new text end

new text begin (f) "Project" means building, erection, construction, alteration, remodeling, or repair
work performed pursuant to a construction contract.
new text end

new text begin (g) "Related entity" means a firm, partnership, corporation, joint venture, or other
legal entity substantially under the control of a contractor or vendor; a predecessor
corporation or other legal entity having one or more of the same owners or principals as a
contractor or vendor; a subsidiary of a contractor or vendor; one or more principals of a
contractor or vendor; and a person, firm, partnership, corporation, joint venture, or other
legal entity that substantially controls a contractor or vendor.
new text end

new text begin (h) "Solicitation document" means an invitation to bid, bid specifications, request
for proposals, request for qualifications, or other solicitation of contractors or vendors for
purposes of a construction contract.
new text end

new text begin (i) "Vendor" means a business, including a construction contractor or a natural
person, and includes both if the natural person is engaged in a business.
new text end

new text begin Subd. 2. new text end

new text begin Responsible contractor required. new text end

new text begin A contractor or vendor must meet the
minimum criteria in subdivision 3 to be eligible to be awarded a construction contract
as the lowest responsible bidder or the vendor or contractor offering the best value as
provided in section 16C.28, 123B.52, or 471.345.
new text end

new text begin Subd. 3. new text end

new text begin Minimum criteria. new text end

new text begin "Responsible contractor" means a contractor or vendor
that conforms to the requirements in the solicitation document and certifies that it meets
the following minimum criteria:
new text end

new text begin (1) the contractor or vendor is in compliance with all applicable licensing
requirements, bonding requirements, and insurance requirements, including workers'
compensation and unemployment insurance; is currently registered with the Department
of Revenue and the Department of Employment and Economic Development if it has
employees; has a valid federal tax identification number or a valid Social Security number
if an individual; and has complied with the applicable laws prerequisite to doing business
in Minnesota;
new text end

new text begin (2) the contractor, vendor, or related entity is in compliance with and, during the
five-year period before responding to the solicitation document, has not violated section
177.24, 177.25, 177.30, 177.41 to 177.44, 181.13, 181.14, or 181.722, and has not violated
United States Code, title 29, sections 201 to 209, or United States Code, title 40, sections
3141 to 3148. For purposes of this subdivision, a violation occurs when a contractor,
vendor, or related entity fails to pay statutorily required wages or penalties of $10,000 or
more, has been issued an order to comply, failed to maintain required records, or has been
found liable in an action brought in a court having jurisdiction;
new text end

new text begin (3) the contractor, vendor, or related entity is in compliance with and, during
the five-year period before responding to the solicitation document, has not violated
any municipality's ordinance, resolution, policy, or contractual provision establishing
requirements for payment of wages for construction work performed for that municipality.
For purposes of this subdivision, a violation occurs when a contractor, vendor, or related
entity fails to pay legally required wages or penalties of $10,000 or more. A final
adjudication is not necessary for a violation to occur, but the contracting municipality
must have determined that the contractor did not comply with its wage requirements;
new text end

new text begin (4) the contractor, vendor, or related entity is in compliance with and, during the
five-year period before responding to the solicitation document, has not violated section
181.723 or chapter 326B. For purposes of this subdivision, a violation occurs when a
contractor, vendor, or related entity has been issued a final administrative or licensing order;
new text end

new text begin (5) the contractor, vendor, or related entity has no current tax liens or tax
delinquencies;
new text end

new text begin (6) the contractor, vendor, or related entity has not operated under false names or
fronts as a small business, a socially or economically disadvantaged small business, or a
disadvantaged business enterprise;
new text end

new text begin (7) the contractor, vendor, or related entity is not currently debarred by the federal
government, the state, or a municipality; and
new text end

new text begin (8) all subcontractors or vendors of whatever tier the contractor intends to use to
perform project work have verified through written confirmation to the contractor that
they meet the minimum criteria listed in clauses (1) to (7).
new text end

new text begin Subd. 4. new text end

new text begin Verification of compliance. new text end

new text begin The contractor or vendor must submit a
signed statement under oath by an owner or officer verifying compliance with each of the
minimum criteria in subdivision 3. A contracting authority may accept a sworn statement
as sufficient to demonstrate that a contractor or vendor is a responsible contractor. Failure
to verify compliance with any one of the minimum criteria will render the contractor
or vendor ineligible to be awarded a contract. A false statement under oath verifying
compliance with any of the minimum criteria may result in termination of the contract
awarded to the contractor, subcontractor, or vendor that submits a false statement, and
will render that contractor, subcontractor, or vendor ineligible to be awarded a contract
by a contracting authority or allowed to perform work under a construction contract, as
defined in subdivision 1, for a period of three years. The contractor or vendor responding
to the solicitation document shall be responsible for ensuring that all subcontractors or
vendors performing project work meet the minimum criteria. Nothing in this section
shall restrict the discretion of a contracting authority to establish additional criteria for
defining a responsible contractor.
new text end

new text begin Subd. 5. new text end

new text begin Implementation. new text end

new text begin The definition of responsible contractor, as defined in
subdivision 3, must be included in the solicitation document for all construction projects
covered by this section. The solicitation document for any project must state that any
contractor or vendor that does not meet the minimum criteria in subdivision 3 is not
a responsible contractor and is not eligible to be awarded the construction contract for
the project. The solicitation document must provide that a false statement under oath
verifying compliance with any of the minimum criteria may result in termination of the
contract awarded to the contractor, subcontractor, or vendor that submits a false statement,
and will render that contractor, subcontractor, or vendor ineligible to be awarded a contract
by a contracting authority or allowed to perform work under a construction contract, as
defined in subdivision 1, for a period of three years.
new text end

new text begin Subd. 6. new text end

new text begin Severability. new text end

new text begin If any provision of this section is declared legally invalid
or unenforceable, or if any part of this section is suspended or restrained by a court of
competent jurisdiction, the remaining provisions shall remain in full force and effect.
new text end