SF 1919

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/13/2014 09:18am

A bill for an act
relating to state government; providing for enhancement of accountability and
transparency in public construction; establishing a requirement for 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 following terms
have the meanings given them.
new text end

new text begin (b) "Construction contract" means a contract for building, erection, construction,
alteration, remodeling, demolition, or repair of public buildings, real property, highways,
roads, bridges, or other public construction work entered into by or at the direction of a
state agency, the Minnesota State Colleges and Universities, the University of Minnesota,
the Metropolitan Council, the Metropolitan Airports Commission, or a municipality.
new text end

new text begin (c) "Contractor" means a vendor that performs building, erection, construction,
alteration, remodeling, demolition, or repair of public buildings, real property, highways,
roads, bridges, or other public construction 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, the University of Minnesota, the Metropolitan Council, the Metropolitan
Airports Commission, 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, home rule charter or statutory city, school
district, housing and redevelopment authority, port authority, economic development
authority, sports facilities authority, joint powers board or organization created under
section 471.59 or other statute, drainage authority, watershed district, destination medical
center corporation, 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,
demolition, or repair of public buildings, real property, highways, roads, bridges or other
public construction work performed pursuant to a construction contract.
new text end

new text begin (g) "Related entity" means:
new text end

new text begin (1) a firm, partnership, corporation, joint venture, or other legal entity substantially
under the control of a contractor or vendor;
new text end

new text begin (2) a predecessor corporation or other legal entity having one or more of the same
principals as the contractor or vendor;
new text end

new text begin (3) a subsidiary of a contractor or vendor;
new text end

new text begin (4) one or more principals of a contractor or vendor; and
new text end

new text begin (5) 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) 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 sections 16C.28, 103D.811, 103E.505, 116A.13, 123B.52, 160.17, 160.262,
161.32, 161.3206, 161.3209, 161.38, 162.17, 365.37, 374.13, 375.21, 383C.094, 412.311,
429.041, 458D.21, 469.015, 469.068, 469.101, 471.345, 473.4057, 473.523, 473.652,
473.756, and 473J.11, or any of their successor provisions.
new text end

new text begin (b) This section applies where the amount of a construction contract is estimated
to exceed $50,000 and where a construction contract is awarded pursuant to a lowest
responsible bidder requirement or a best-value selection method.
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 at the time that it responds to the solicitation document:
new text end

new text begin (1) the contractor or vendor is in compliance with workers' compensation and
unemployment insurance requirements; is currently registered with the Department
of Revenue and the Department of Employment and Economic Development if it has
employees; and has a valid federal tax identification number or a valid Social Security
number if an individual;
new text end

new text begin (2) the contractor, vendor, or related entity is in compliance with, and, during the
three-year period before responding to the solicitation document, has not violated sections
177.24, 177.25, 177.41 to 177.44, 181.13, 181.14, or 181.722, and has not violated United
States Code, title 29, sections 201 to 219, or United States Code, title 40, sections 3141
to 3148. For purposes of this clause, 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 by the commissioner of labor and industry or authorized
designee or representative, has been issued a determination letter by the Department of
Transportation finding a violation, 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
three-year period before responding to the solicitation document, has not violated any
municipality's requirements for payment of wages for construction work performed for
that municipality as provided in ordinance, resolution, policy, or contractual provision.
For purposes of this clause, a violation occurs when a municipality determines that
a contractor, vendor, or related entity fails to pay wages or penalties required by the
municipality in the amount of $10,000 or more;
new text end

new text begin (4) the contractor, vendor, or related entity is in compliance with, and, during the
three-year period before responding to the solicitation document, has not violated section
181.723 or chapter 326B. For purposes of this clause, 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 is currently not ineligible to be awarded a
contract by a contracting authority or perform work under a construction contract under
subdivision 4; 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 to the contractor or vendor through a signed statement
under oath by an owner or officer 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 and
shall not be held liable for awarding a contract in reasonable reliance on such a statement.
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 period of ineligibility may be
reduced by the commissioner of administration in the event of an emergency.
new text end

new text begin Subd. 5. new text end

new text begin Subcontractor verifications. new text end

new text begin The contractor's or vendor's verification of
compliance under subdivision 4 must include an accurate list of all subcontractors and
vendors to be used on the project. The contractor or vendor must submit to the contracting
authority upon request copies of the signed verifications of compliance obtained from all
subcontractors and vendors as provided in subdivision 3, clause (8).
new text end

new text begin Subd. 6. new text end

new text begin Additional criteria. new text end

new text begin 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. 7. 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. The solicitation document must state
that the contractor or vendor must submit to the contracting authority upon request copies
of the signed verifications of compliance obtained from all subcontractors and vendors
as provided in subdivision 3, clause (8).
new text end

new text begin Subd. 8. 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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2015, and applies to all
contracts entered into on or after that date.
new text end