MODEL BILLS

Contracting Accountability Act

Summary: The Contracting Accountability Act ensures that government contracts with businesses that have a good record of compliance with applicable laws.

SECTION 1. SHORT TITLE

This Act shall be called the “Contracting Accountability Act”

SECTION 2. FINDINGS AND PURPOSE

(A) FINDINGS—The [legislature/council/commission] finds that:

1. The [state/city/county] seeks to conduct business with high-performing and successful companies that work to maintain a good record of compliance with applicable laws.

2. The [state/city/county] cannot rely on the quality of goods and services from companies that significantly or repeatedly violate the law.

(B) PURPOSE—This law is enacted to improve the quality of goods and services purchased by the government.

SECTION 3. CONTRACTING ACCOUNTABILITY

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS—In this section:

1. “Government” means the [state/city/county] or a principal unit of government with the authority to enter into contracts.

2. “Government contractor” means a for-profit or nonprofit entity that has a government contract.

3. “Government contract” means:

a. A contract for services with the government valued at $100,000 or more; or

b. A subcontract valued at $25,000 or more for providing part or all of the services covered by another entity’s contract for services with the state valued at $100,000 or more.

4. “Bidder” means a for-profit or nonprofit entity that has applied for a government contract. In the case of a sole proprietorship, “bidder” includes the entity as well as the owner of the sole proprietorship. In the case of a partnership, “bidder” includes the partnership as well as each partner. In the case of a corporation, “bidder” includes the corporation, its subsidiaries and any joint venture in which it holds 25 percent or more share, as well as each executive officer and managing officer and each shareholder who owns more than 25 percent of the corporation’s stock. If the prospective bidder has conducted business under a different name within the past five years or has been an executive officer, managing officer, or owner of 25 percent or more of a corporation within the past five years, the information required by this section shall be reported with regard to those other entities.

5. “Significant violation” shall be construed as any violation of law involving serious injury or death, any felony convictions, and violations resulting in a penalty of $5,000 or more.

(B) REPORTING BY BIDDERS

1. The government shall require prospective bidders for government contracts to complete a questionnaire and financial disclosure statement relating to the bidder’s financial ability and experience in responsible performance of public works and other contracts.

2. A long with such questionnaires, prospective bidders shall be required to report and certify, under penalty of perjury all civil, administrative and criminal enforcement actions brought against the bidder in the previous five years by government agencies involving a felony charge, or a misdemeanor or civil charge where potential fines may be $1,000 or more. The reports shall specify the agency bringing the charge, the charge, and the outcome of the action if any, including plea agreements, consent decrees, findings of innocence, convictions and fines and other penalties, as well as any other information that the may require.

(C) ACCOUNTABILITY STANDARDS

1. Except in the case where a prospective bidder has successfully appealed his or her disqualification, the government shall disqualify a prospective bidder that lists in the questionnaire three or more significant violations of law within the prior five years. The government may disqualify a prospective bidder with fewer than three violations if it deems that the violation or violations indicate a lack of trustworthiness or responsibility.

2. An entity shall be presumed not responsible and therefore ineligible with respect to the award of a contract if it has had rendered against it twice within any three-year period a judgment or conviction for the same offense, or similar offenses.

(D) WAIVERS AND EXEMPTIONS

1. The government may grant a waiver to bidders if it has made a reasonable effort to find an alternative bidder and determined that the services or goods are not available elsewhere at a reasonable cost.

2. If a disqualified prospective bidder believes that its violations should not disqualify it from a government contract, the bidder may request a hearing before the individual at the department designated to hear the appeal to present evidence as to why it should be deemed a qualified prospective bidder. Pursuant to this procedure, the director of the department may approve a prospective bidder’s application.

3. Nothing in this section shall be construed in any way to impair the obligation of any prior existing contract between a vendor and the state.

(E) ENFORCEMENT

1. No government contractor shall escape the accountability standard requirements by subcontracting through a third party, reincorporating under a new name, or by otherwise incorporating a new unit for the purposes of obtaining the contract and circumventing the accountability standards.

2. All questionnaires for prospective bidders shall be filed both in hard copy and electronically. Electronic reports shall be maintained on a publicly accessible Internet website.

SECTION 4. EFFECTIVE DATE

This Act shall take effect on July 1, 20XX.