[HISTORY:[1] Adopted by the City Commission of the City of Royal Oak
as indicated in article histories. Amendments noted where applicable.]
[Adopted 11-8-2021 by Ord. No. 2021-10; amended in its entirety 11-28-2022 by Ord. No.
2022-07]
This article shall be known as and may be cited as the "Responsible
Contractor Ordinance."
The City of Royal Oak recognizes that there is a need to ensure
that all work on public construction and maintenance contracts is
performed by responsible, qualified firms that maintain the capacity,
expertise, personnel, and other qualifications and resources necessary
to successfully perform public contracts in a timely, reliable, and
cost-effective manner.
A.
To effectuate the purpose of selecting responsible contractors for
public contracts and to protect the City of Royal Oak's investments
in such contracts, prospective contractors and subcontractors should
be required to meet preestablished, clearly defined, minimum standards
relating to contractor responsibility, including requirements and
criteria concerning technical qualifications, competency, experience,
adequacy of resources, including equipment, financial and personnel,
and satisfactory records regarding past project performance, safety,
law compliance and business integrity.
B.
Further, due to the critical impact that skilled construction craft
labor has on public works projects, and due to the limited availability
of skilled construction craft labor and imminent craft labor skill
shortages, it is necessary to encourage contractors and subcontractors
to participate in established, formal apprenticeship training programs,
for the purpose of both promoting successful project delivery and
ensuring future workforce development. The City of Royal Oak also
recognizes that it is beneficial to the local community to ensure
that firms receiving public contracts provide adequate wages and benefits
to their employees and utilize fair business, employment and training
practices that have a positive impact on local communities affected
by such contracts.
C.
Therefore, the City of Royal Oak shall require compliance with the
provisions of this article by business entities seeking to provide
services to the City of Royal Oak as specified herein. The requirements
of this article are intended to supplement, not replace, existing
contractor qualification and performance standards or criteria currently
required by law, public policy or contracting documents. However,
in the event that any of the provisions of this article conflict with
any law, public policy or contracting documents of the City of Royal
Oak, this article shall prevail.
As used in this article, the following terms shall have the
meanings indicated:
A request for proposal procurement method that emphasizes
both value and price. "Best value" is a method that is utilized in
the evaluation process of the proposals received and reviewed. Best
value for construction will be determined based on a 100% distribution
looking at construction that includes, but is not limited to, the
following: quality of workmanship, quality of materials, references,
experience (including experience on past City or public works projects),
proposed schedule, safety, time, and cost.
Any application submitted by a bidder in response to an invitation
for bid, request for proposal or request for qualifications, or other
procurement process.
Any person or entity that applies for any contract, whether
or not the application process is through an invitation for bid, request
for proposal, request for qualifications, or other procurement process.
Any contract of more than $250,000 awarded for the construction,
alteration, demolition, or repair of any public building or public
work of the City of Royal Oak. The labor and material necessary, for
the construction, renovation, repair, or improvements to real property,
except repair in emergency situations, which requires solicited bids.
Any person, firm, corporation, partnership, association,
or any combination thereof, which enters into a contract with any
awarding authority of the City of Royal Oak and includes a recipient
of City financial assistance and a public lessee or licensee.
A bidder for a construction project that has satisfied the
prequalifying criteria designated in the bid and as provided in these
guidelines.
Any person not an employee who enters into a contract with
a contractor to assist the contractor in performing a contract, including
a contractor or subcontractor of a public lessee or licensee or sublessee
or sublicensee, to perform or assist in performing services on the
leased or licensed premises. The term "subcontractor" does not include
vendors or suppliers to City purchasing contractors.
A.
All contractors and subcontractors of any tier that perform work
on any public construction project valued at over $250,000 shall meet
the requirements of this article.
B.
All firms engaged in contracts covered by this article shall be qualified,
responsible contractors or subcontractors that have sufficient capabilities
in all respects to successfully perform contracts on which they are
engaged, including the necessary experience, equipment, technical
skills, and qualifications and organizational, financial and personnel
resources. Firms bidding on public contracts shall also be required
to have a satisfactory past performance record and a satisfactory
record of law compliance, integrity and business ethics as described
in this article.
A.
The Finance Department must promulgate rules and regulations for
implementation of this article. Said rules must be submitted to the
City commission for consideration as a component of officially designated
policies and procedures within 45 days after the effective date of
this article.
B.
The Finance Department must develop questionnaires to be used by
awarding authorities for determining bidder responsibility and best
bid within 45 days after the effective date of this article.
C.
The Finance Department must monitor compliance with this article,
including investigation of alleged violations.
A.
The City shall develop a questionnaire that each contractor intending to bid on a construction project contract must submit with its bid to determine if it is a responsible bidder based on the information in parts of Subsections B and C of this section. This questionnaire shall be developed within 30 days after the effective date of this article and must be made available to all contractors interested in bidding on City construction projects via commonly accessible spaces, such as the City website.
(1)
The response to the questionnaire must be signed under penalty of perjury. If the City learns any contractor submitted false information on the questionnaire, the City may terminate any contract and pursue remedies set forth in § 45-8, Subcontractor compliance. The contractor must be obligated to update its responses to the questionnaire during the term of the contract within 30 calendar days after any change to responses previously provided if such change would affect a contractor's fitness and ability to continue performing the contract. The City may consider failure of the contractor to update the questionnaire with this information as a material breach of the contract and invoke the remedies set forth in § 45-8, Subcontractor compliance.
(2)
There must be a period of no fewer than 14 calendar days between
the date for receipt of bids and the award of the contract in order
to allow full review of questionnaires submitted by bidders. If no
bid is required, the prospective contractor must submit a questionnaire
no fewer than 14 calendar days' prior to execution of the contract
in order to allow full review of the questionnaire. Questionnaires
will be public records and information contained therein will be available
for public review, except to the extent that such information is exempt
from disclosure pursuant to applicable law. The awarding authority
must rely on responses to the questionnaire, information from compliance
and regulatory agencies, and/or independent investigation to determine
bidder responsibility. All questions must be fully answered on the
questionnaire. If a contractor fails to provide all of the required
information on the prequalifying questionnaire, their bid must not
be considered.
(3)
Before being declared a nonresponsible bidder, a bidder must be notified
of the proposed determination of nonresponsibility, served with a
summary of the information upon which the awarding authority is relying
and provided with an opportunity to be heard in accordance with applicable
law. At the responsibility hearing, the bidder will be allowed to
rebut adverse information and to present evidence that it has the
necessary quality, fitness, and capacity to perform the work. The
bidder must exercise its right to request a hearing within five calendar
days after receipt of such notice. Failure to submit a written request
for a hearing within the time frame set forth in this section will
be deemed a waiver of the right to such a hearing and the awarding
authority may proceed to determine whether or not the award of the
contract should be made to another bidder. The determination by an
awarding authority that the bidder is nonresponsible must be final
and constitute exhaustion of the bidder's administrative remedies.
(4)
A list of individuals and entities which have been determined to be nonresponsible bidders by the City must be maintained by the Finance Department. Nonresponsible bidders must not be considered for City contracts for a minimum of six months. After six months from the date the individual or entity has been determined to be nonresponsible, the individual or entity may request removal from the list by the awarding authority. If the individual or entity can satisfy the awarding authority that it has the necessary quality, fitness, and capacity to perform work in accordance with the criteria set forth in § 45-6, Prequalifying screening, its name must be removed from the list. Unless otherwise removed from the list by the awarding authority, names must remain on the list for five years from the date of being declared a nonresponsible bidder.
(5)
If, through the prequalifying screening questionnaire, the City determines
a contractor to be a responsible bidder and is qualified to bid, that
determination may remain valid for a period not to exceed two years.
This shall not apply if changes are warranted. The Finance Department
shall maintain a list of qualified responsible bidders.
(6)
Contractors must ensure that their subcontractors meet the criteria
for responsibility as set forth in the prequalifying criteria of this
article.
B.
The prequalifying screening questionnaire will identify those criteria
which will automatically qualify and disqualify bidders by deeming
them either a responsible or a nonresponsible bidder. The City must
use the following criteria in the prequalifying screening questionnaire
to determine if a contractor is or is not a responsible bidder. If
a contractor is deemed a nonresponsible bidder their bid must not
be considered. The City may at any time add additional information
to the screening questionnaire. The information required on the prequalifying
screening questionnaire includes:
(1)
General information about the bidder's company, its principals,
and its history, including all former business names, and an explanation
of any business name changes.
(2)
If the submitting firm has ever operated under another name or is
controlled by another company or business entity or in the past five
years controlled or was controlled by another company or business
entity, whether as a parent company, subsidiary or in any other business
relation, it must attach a separate statement to its bid packet that
explains in detail the nature of any such relationship. Additional
information may be required from such an entity if the relationship
in question could potentially impact contract performance.
(3)
Information regarding the state and local licenses and license numbers
held by the bidder.
(4)
A confirmation that all employees, subcontractors, and other individuals
working on the construction project will maintain current applicable
licenses required by law for all licensed occupations and professions.
(5)
Documentation of master or journeyperson certification or status
for masters and journeypersons to be used on the project, and the
source of such certification or status.
(6)
Verification that the bidder is in compliance with all applicable
state and federal laws and visa requirements regarding the hiring
of non-U.S. citizens, and disclosure of any work visas sought or obtained
by the bidder, any of the bidder's subcontractors, or any of
the bidder's employees or independent contractors, in order to
perform any portion of the project.
(7)
A list of projects completed within the past five years of comparable
size/complexity, including dates, clients, approximate dollar value,
and size. Documentation from these previous projects, including, but
not limited to, all extra costs relating to the bidder's timeliness,
performance, quality of work, extension requests, contractual fines
and penalties imposed, liens filed, history of claims for extra work
and any contract defaults with an explanation of the reason for the
default and how the default was resolved.
(8)
The bidder must identify those portions of the project it reasonably
believes will be subcontracted and the names of the subcontractors.
(9)
Audited financial information current within the past 12 months,
such as a balance sheet, statement of operations, and bonding capacity.
Evidence that the applicant has financial resources to start up and
follow through on the project(s) and to respond to damages in case
of default as shown by written verification of bonding capacity equal
to or exceeding the amount of the bidder's scope of work on the
project. The written verification must be submitted by a licensed
surety company rated "B+" (or better) in the current A.M. Best Guide
and qualified to do business within the state of Michigan.
(10)
A list of all litigation and arbitrations currently pending and within
the past five years, including an explanation of each (parties, court/forum,
legal claims, damages sought, and resolution).
(11)
Disclosure of any violations of state, federal or local laws or regulations,
including the Occupational Safety Health Administration or the Michigan
Occupational Safety Health Administration violations, state or federal
prevailing wage laws, wage and hour laws, workers' compensation
or unemployment compensation laws, rules, or regulations, issued to
or against the bidder within the past five years.
(12)
Disclosure of any debarment by any federal, state, or local governmental
unit and/or findings of nonresponsibility or noncompliance with respect
to any public or private construction project performed by the bidder.
(13)
Proof of insurance, including certificates of insurance, confirming
existence and amount of coverage for liability, property damage, workers'
compensation, and any other insurances required by the proposed contract
documents.
(14)
A statement regarding the bidder's staffing capabilities and
labor sources, including subcontractors, and a verification from the
bidder that construction workers will not be misclassified as independent
contractors in violation of state or federal law.
(15)
Verification of an existing fitness for duty program (drugs and alcohol)
of each employee working on the proposed job site.
(16)
A warranty statement regarding labor, equipment, and materials.
(17)
A statement affirming that the firm will pay all craft employees
that it employs on the project the current wage rates and fringe benefits
as required under applicable federal or state wage laws.
(18)
A statement identifying what possible change orders could be necessary
and what their approximate subsequent total costs would be.
(19)
A statement from the contractor or subcontractor acknowledging their
obligation to comply with this article in each contract and subcontract.
(20)
Assurances that the project timeline the contractor submits will
be followed and that the project will finish in a timely fashion.
C.
The City must use the information collected on the prequalifying
screening questionnaire to determine if a bidder is a responsible
or a nonresponsible bidder. For the City to deem a contractor nonresponsible,
the information on the prequalifying screening must demonstrate at
least one of the following:
(1)
A determination that the bidder exhibits a pattern of negligence
pertaining to safety.
(2)
The absence of proper licensure from the state or other certifying
bodies.
(3)
A gross lack of qualifications or expertise by personnel at the bidding
company.
(4)
A pattern of poor performance or nonperformance on past contracts.
D.
The City's determination of these factors is within its sole discretion. If a contractor's prequalifying screening questionnaire does not demonstrate any of the items in Subsection C of this section, then the information provided in Subsection B will be used to determine if a contractor is a responsible bidder and proceed into evaluating the contractor's bid.
A.
Once the City deems a contractor a responsible bidder, having used the process identified in § 45-6, the City must consider the contractor's bid. The City must consider, at minimum, each of the evaluation criteria listed in this section in determining the best bid. The City may require contractors or subcontractors to provide additional information by inclusion in bid documents. Additionally, the list set forth below in no way limits any additional criteria that the City may deem relevant for purposes of determining of the best bid.
B.
Bid documents must require any contractor or subcontractor bidding
on the project to submit written responses and other information and
documentation regarding the listed criteria and any other criteria
specified by the City through the bid documents. The City may request
additional information or explanation from any contractor or subcontractor
regarding any particular criteria. The bid documents must provide
that the City retains the right in its discretion to reject any and
all bids. All required contractor financial and privileged information
must be kept from public disclosure unless otherwise required by law.
C.
For each separate bid package, the City in its discretion will weigh
the information provided by the contractor or subcontractor regarding
the evaluating criteria, as a whole, to determine the best bid.
D.
Except as otherwise required by law, no single criterion will necessarily
be determinative in assessing which bid is the best bid. The Finance
Department must weigh each of the criteria based on a distribution
of percentage points on a 100-point scale. The criteria to be considered
in bid evaluation on construction projects by the City shall be weighed
categorically as follows, and shall include:
(1)
Price (30%).
(2)
Corporate accountability (20%).
(a)
Qualifications of management and supervisory personnel to be
assigned by the bidder.
(b)
References from individuals or entities the bidder has worked
for within the last five years, including information regarding records
of performance and job site cooperation.
(c)
Evidence of any quality assurance program used by the bidder
and the results of any such program on the bidder's previous
projects.
(d)
Assurance that all construction work for this project must proceed
economically, efficiently, continuously and without interruption.
(3)
Workplace safety (25%).
(a)
The ratio of masters or journeypersons to apprentices proposed
to be used on the construction project job site if apprentices are
to be used on the project.
(b)
Evidence of the bidder's workers' compensation experience
modification rating (EMR). Preference will be given to contractors
and subcontractors who exhibit an EMR of 1.0 or less, based on a three-year
average.
(c)
Provide a description of safety training programs, including
the how often employees complete any relevant training.
(4)
Workforce development (15%).
(a)
Documentation as to pay rates of employees and whether the bidder
provides health insurance, pension or other retirement benefits, or
other benefits to its employees.
(b)
Documentation if the bidder has participated in a Class A apprenticeship
program for each separate trade or classification in which it employs
craft employees and shall continue to participate in such programs
for the duration of the project including the start of the program.
Class A apprenticeship program is an apprenticeship program that is
currently registered with and approved by the U.S. Department of Labor
or a state apprenticeship agency, and has graduated apprentices to
journeyperson status for at least three of the past five years. A
role setting forth the trades and classifications of craft employees
with their names and addresses will be furnished in order to verify
participation in a Class A apprenticeship program.
(c)
Documentation of how the bidder assesses the skills and qualifications
of any employees who do not have master or journeyperson certification
or status or are not participants in a registered apprenticeship program.
(5)
Social equity (10%).
(a)
A statement from the bidder as to what percentage of its workforce
can be drawn from Livingston, Macomb, Monroe, Oakland, St. Clair,
Washtenaw, and Wayne counties in southeastern Michigan, because a
goal of the City is to utilize, in its construction activities, local
residents as much as is economically feasible while retaining the
high quality of construction required for its construction activities,
consistent with applicable law. The City will consider in evaluating
which bids best serve its interests the extent to which responsible
and qualified bidders are able to achieve this goal.
(b)
Evidence of equal employment opportunity programs for minorities,
women, veterans, returning citizens, and small businesses.
(c)
Assurance that the bidder is an equal opportunity employer and
does not discriminate on the basis of race, sex, pregnancy, age, religion,
national origin, marital status, sexual orientation, gender identity
or expression, height, weight, or disability.
(d)
Documentation if contractor and/or subcontractors are certified
under the Michigan Department of Transportation Small Business Program
or equivalent program.
A.
A construction manager, general contractor or other lead or prime
contractor must not be permitted to use a subcontractor on any work
performed for the City unless it has identified the subcontractor
on its subcontractor list and a confirmation that the subcontractor
has been prequalified as stated in the prequalifying section.[1]
C.
In the event that the Finance Department determines that a prospective
subcontractor listed by the apparent bid awardee does not meet the
prequalifying standards of this article, it may, after informing the
prospective awardee, exercise one of the following options:
(1)
Permit the awardee to substitute a qualified, responsible, subcontractor
in accordance with the requirements of this article; or
(2)
Require the awardee to self-perform the work in question if the firm
has the required experience, licenses, and other qualifications to
perform the work in question; or
(3)
Disqualify the prospective awardee.
D.
In the event that a subcontractor is disqualified under this article,
the general contractor, construction manager or other lead or prime
contractor must not be permitted to make any type of contractual claim
against the Finance Department on the basis of a subcontractor disqualification.
E.
Subcontractors completing work that is less than $50,000 of the overall
bid price are not required to be designated as a responsible contractor.
The contractor shall still notify the City of which subcontractor
is being used and the percentage of the overall price for the work
performed by that subcontractor.
In the event the amount of a bid appears disproportionately
low when compared with estimates undertaken by or on behalf of the
City and/or compared to other bids submitted, the City reserves the
right to inquire further of the bidder to determine whether the bid
contains mathematical errors, omissions, and/or erroneous assumptions,
and whether the bidder has the capability to perform and complete
the contract for the bid amount.
A.
Contracts must provide that violation of this article must constitute
a material breach thereof and entitle the City to terminate the contract
and otherwise pursue legal remedies that may be available.
B.
Compliance with the prequalifying screening criteria of this article
must be required in contract amendments if the initial contract was
not subject to the provisions of this article. Contract amendments
must provide that violation of prequalifying screening criteria must
constitute a material breach thereof and entitle the City to terminate
the contract and otherwise pursue legal remedies that may be available.
C.
Information that is provided under the processes set forth in this
article that is at any point deemed false or in an attempt to mislead
the City entitles the City to terminate the contract and otherwise
pursue legal remedies that may be available.
D.
Violations of this article may be reported to the Finance Department
which must investigate such complaints. Whether based upon such a
complaint or otherwise, if the Finance Department has determined that
the contractor has violated any provision of this article, the Finance
Department must issue a written notice to the contractor that the
violation is to be corrected within 10 calendar days from receipt
of notice. In the event the contractor has not corrected the violation
or taken reasonable steps to correct the violation within 10 calendar
days, then the Finance Department may:
(1)
Request the awarding authority to declare a material breach of the
contract and exercise its contractual remedies thereunder, which are
to include, but not be limited to, termination of the contract.
The City must develop a complaint form that will allow members
of the public to report suspected violations of this article to the
Finance Department. Members of the public may at any time submit a
report of suspected violations of this article. The complaint form
must be accessible to the public on the City's website and a
physical copy of the form will be available at Royal Oak City Hall.
If the City receives a complaint through the public complaint form,
the Finance Department must investigate the claim and respond to the
complainant within 21 calendar days with the Finance Department's
reply to the complaint.
The terms, conditions, and provisions of this article are hereby
declared to be severable and, should any portion, part or provision
of this article be found by a court of competent jurisdiction to be
invalid, unenforceable, or unconstitutional, the City commission hereby
declares its intent that this article shall have been enacted without
regard to the invalid, unenforceable or unconstitutional portion,
part, or provision of this article.
