Wednesday, June 4th, 2014

“Responsible Bidder” Legislation for Public Works Contracts

Legislation is pending with the Illinois Legislature that would require all public works contracts over a certain dollar amount to be eligible only to contractors and sub-contractors who are “responsible bidders” as defined by the legislation.  This legislation has potentially significant effects on the way units of local government and local businesses handle public works projects.

The proposed legislation (Senate Amendment 1 to HB 924) would create the “Illinois Responsible Bidder on Public Works Projects Act” which requires that all contractors and sub-contractors working on all local government public works projects be “responsible bidders.”  Under the Act, a “responsible bidder” must meet the following requirements: (1) comply with all laws to conduct business in Illinois; (2) comply with Prevailing Wage Act; (3) comply with Subchapter VI of Chapter 21 of Title 42 of United States Code and Federal Executive Order No. 11246; (4) have a valid Federal Employer Identification Number or Social Security number (if an individual); (5) have a valid certificate of insurance; (6) contractor and any sub-contractor must participate in apprenticeship and training programs approved by and registered with the U.S. Department of Labor’s Bureau of Apprenticeship and Training; (7) submit an affidavit stating that the bidder will maintain an Illinois office as the primary place of employment for those working on the project; and (8) agree to (or already have an existing contractual obligation to) maximize the use of apprentices on public works projects.

The requirements to become a “responsible bidder” are very involved and will likely result in numerous local businesses being unable to qualify for public works projects. The apprenticeship requirements alone may make individual or small contractors ineligible to bid on or compete for most public works contracts.

There is an exemption for public works contracts under a certain dollar amount  which would not be subject to the “responsible bidder” requirement.  The exemption threshold is contracts under $100,000 through June 30, 2016; under $50,000 through June 30, 2017; and under $20,000 thereafter.  Therefore, after June 2017, the exemption amount is projects costing under $20,000.

Units of local government and contractors that violate this requirement could face daily civil penalties ranging from $5,000 to $10,000 per day that a violation exists.

The Illinois Municipal League has strongly opposed this legislation since its inception due to the requirements being difficult if not impractical for many contractors and the potential for increased costs for units of local government.  This legislation is still in the preliminary phase, and we will keep you posted as further developments arise.


Timothy J. Clifton

Author: Timothy J. Clifton