What is a Responsible Bidding?
Responsible contractors comply with the law and deliver a high quality product at fair market price. Responsible contractors complete jobs on time, pay their subcontractors on time and don’t saddle communities with unexpected costs associated with shoddy construction. In the long run, responsible contractors provide greater taxpayer value than the contractor who is cutting corners in the areas of materials, training, labor or safety.
“Responsible Bidding” is the idea that public works construction projects paid for with taxpayer money such as schools and roads need not automatically be awarded to the lowest bidder. The public Owner letting the project should utilize its discretion to award the project to the “lowest responsible bidder” per New York State General Municipal Law §103.
What is a Responsible Bidder Law and Why Have One?
A community can ensure that it hires only responsible contractors by passing a Local Law that allows a public Owner to specify criteria necessary to qualify for the award, and/or provides the Owner with additional information on a contractor and subcontractor’s financial responsibility, accountability, reliability, skill, judgment and integrity. The public Owner can also establish standards or criteria to use in evaluating bids. The information and guidelines assist the public Owner in selecting the lowest responsible bidder.
What are the specific requirements?
Communities across the country have drafted their own Responsible Bidding Laws to meet their local needs and concerns. At minimum, the law requires that bidding contractors demonstrate past compliance with State bidding laws such as evidence of proper insurance, licensing and bonding. Some laws have specific requirements, such as a requirement that bidding contractors participate in State-certified apprenticeship program or provide healthcare. Other laws seek additional information from contractors such as information about past experience on other public works with references or a list of intended subcontractors.
One option in New York State is for public Owners to require that bidding contractors submit the New York State Vendor Responsibility Questionnaire, a form required by State Agencies (e.g. NYSDOT, NYS Dormitory Authority) in the bidding process for State work. The Questionnaire requires detailed disclosure about a contractor’s financial integrity, past performance and legal concerns. Requiring this questionnaire will also streamline the process given that many of the bidding contractors will be familiar with the State system and will have already completed the questionnaire.
With the NYFFC’s assistance, Cattaraugus County recently passed a Responsible Bidder Law which utilizes the NYS Vendor Responsibility Questionnaire and guidelines for evaluating bidders established in Executive Order No. 170.
Is this just a pro-union law?
The law does not give an advantage to union contractors; it gives an advantage to responsible contractors. A Responsible Bidder Law simply requires that contractors who benefit from public dollars play by the rules of fair and competitive contracting. Like the prevailing wage law, a Responsible Bidder Law is neutral with respect to union status.
What will the passage of a Responsible Bidder Law cost?
Essentially nothing. The Law only requires that contractors to fill out a questionnaire and show proof of “responsibility,” as defined by the law. The public Owner awarding the contract must review the questionnaires and evaluate them before awarding the bid.