Chapter 507 Oregon Laws 2001

AN ACT

HB 2052

Relating to public contracting; creating new provisions; and amending ORS 279.027, 279.322 and 279.722.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 279.027 is amended to read:

279.027. (1) A public contracting agency preparing bid documents for a public contract shall, at a minimum, include:

(a) A statement that, if the contract is for a public work subject to ORS 279.348 to 279.380 or the Davis-Bacon Act (40 U.S.C. 276a), no bid will be received or considered by the public contracting agency unless the bid contains a statement by the bidder as a part of its bid that the provisions of ORS 279.350 or 40 U.S.C. 276a are to be complied with;

(b) The date and time after which bids will not be received, which shall be not less than five days after the date of the last publication of the advertisement;

(c) The date that prequalification applications must be filed under ORS 279.039 (1) and the class or classes of work for which bidders must be prequalified if prequalification is a requirement;

(d) The character of the work to be done or the material or things to be purchased;

(e) The office where the specifications for the work, material or things may be reviewed;

(f) The name and title of the person designated for receipt of bids;

(g) The date, time and place that the public contracting agency will publicly open the bids;

(h) A statement that each bid must identify whether the bidder is a resident bidder, as defined in ORS 279.029;

(i) A statement that the public contracting agency may reject any bid not in compliance with all prescribed public bidding procedures and requirements[,] and may reject for good cause any or all bids upon a finding of the agency that it is in the public interest to do so;

(j) Information addressing whether a contractor or subcontractor must be licensed under ORS 468A.720; and

(k) A statement that no bid for a construction contract shall be received or considered by the public contracting agency unless the bidder is registered with the Construction Contractors Board or licensed by the State Landscape Contractors Board as required by ORS 671.530.

(2) All bids made to the public contracting agency pursuant to ORS 279.015 and 279.025 shall be:

(a) In writing.

(b) Filed with the person designated for receipt of bids by the public contracting agency.

[(3)(a) Within four working hours of the date and time of the deadline when the bids were due to the public contracting agency for a public improvement, a bidder shall submit to the public contracting agency a disclosure of any first-tier subcontractor that will be furnishing labor or materials in connection with the public improvement and whose contract value is equal to or greater than:]

[(A) Five percent of the total project bid or $15,000, whichever is larger; or]

[(B) $500,000, regardless of the percentage of the total project bid.]

[(b) The disclosure of first-tier subcontractors shall include:]

[(A) The name and address of each subcontractor;]

[(B) The registration number assigned to the subcontractor by the Construction Contractors Board if the subcontractor is required to have a certificate of registration issued by the board; and]

[(C) The amount of the contract of the subcontractor.]

(3)(a) Within four working hours after the date and time of the deadline when the bids are due to the public contracting agency for a public improvement, a bidder shall submit to the public contracting agency a disclosure of the first-tier subcontractors that:

(A) Will be furnishing labor or will be furnishing labor and materials in connection with the public improvement; and

(B) Will have a contract value that is equal to or greater than five percent of the total project bid or $15,000, whichever is greater, or $350,000 regardless of the percentage of the total project bid.

[(c)] (b) For each contract to which this subsection applies, the public contracting agency shall designate a deadline for submission of bids that has a date and time that is on Monday through Thursday or that is on Friday prior to 12 noon.

[(d)] (c) This subsection shall apply only to public improvements with a contract value of more than $75,000.

(d) This subsection does not apply to public contracts for public improvements that have been exempted from competitive bidding requirements under ORS 279.015 (2).

(4) The disclosure of first-tier subcontractors under subsection (3) of this section shall include:

(a) The name of each subcontractor; and

(b) The category of work that each subcontractor will be performing.

(5) A public contracting agency shall accept the subcontractor disclosure. The public contracting agency shall consider the bid of any contractor that does not submit a subcontractor disclosure to the public contracting agency to be a nonresponsive bid and may not award the contract to the contractor. A public contracting agency is not required to determine the accuracy or the completeness of the subcontractor disclosure.

[(4)] (6) After having been opened, the bids and the subcontractor disclosures shall be filed for public inspection.

[(5)] (7) A surety bond, irrevocable letter of credit issued by an insured institution as defined in ORS 706.008, cashier’s check or certified check of [the] each bidder shall be attached to all bids as bid security unless the contract for which [the] a bid is submitted has been exempted from this requirement pursuant to ORS 279.033. Such security shall not exceed 10 percent of the amount bid for the contract.

SECTION 2. ORS 279.322 is amended to read:

279.322. A prime contractor whose bid is accepted may substitute a first-tier subcontractor that was not disclosed under ORS 279.027 (3)[(a)] by submitting the name of the new subcontractor and the reason for the substitution in writing to the public contracting agency. A prime contractor may substitute a first-tier subcontractor pursuant to this section in the following circumstances:

(1) When the subcontractor disclosed under ORS 279.027 (3)[(a)] fails or refuses to execute a written contract after having had a reasonable opportunity to do so after the written contract, [that is] which must be reasonably based upon the general terms, conditions, plans and specifications for the public improvement project or the terms of [that] the subcontractor’s written bid, is presented to the subcontractor by the prime contractor.

(2) When the disclosed subcontractor becomes bankrupt or insolvent.

(3) When the disclosed subcontractor fails or refuses to perform the subcontract.

(4) When the disclosed subcontractor fails or refuses to meet the bond requirements of the prime contractor that had been identified prior to the bid submittal.

(5) When the prime contractor demonstrates to the public contracting agency that the subcontractor was disclosed as the result of an inadvertent clerical error.

(6) When the disclosed subcontractor does not hold a certificate of registration from the Construction Contractors Board and is required to be registered with the board.

(7) When the prime contractor determines that the work performed by the disclosed subcontractor is substantially unsatisfactory and not in substantial accordance with the plans and specifications[,] or that the subcontractor is substantially delaying or disrupting the progress of the work.

(8) When the disclosed subcontractor is ineligible to work on a public improvement pursuant to the applicable statutory provisions.

(9) When the substitution is for good cause. The Construction Contractors Board shall define “good cause” by rule. “Good cause” shall include, but not be limited to, the financial instability of a subcontractor. The definition of “good cause” shall reflect the least cost policy for public improvements established in ORS 279.023 (1).

(10) When the substitution is reasonably based on the contract alternates chosen by the public contracting agency.

SECTION 3. Section 4 of this 2001 Act is added to and made a part of ORS 279.310 to 279.322.

SECTION 4. (1)(a) A subcontractor disclosed under ORS 279.027 may file a complaint based on the subcontractor disclosure requirements under ORS 279.027 (3) with the Construction Contractors Board about a contractor if the contractor has substituted another subcontractor for the complaining subcontractor.

(b) If more than one subcontractor files a complaint with the board under paragraph (a) of this subsection relating to a single subcontractor disclosure, the board shall consolidate the complaints into one proceeding. If the board imposes a civil penalty under this section against a contractor, the amount collected by the board shall be divided evenly among all of the complaining subcontractors.

(c) Each subcontractor filing a complaint under paragraph (a) of this subsection shall post a deposit of $500 with the board upon filing the complaint.

(d) If the board determines that a contractor’s substitution was not in compliance with ORS 279.322, the board shall return the full amount of the deposit posted under paragraph (c) of this subsection to the complaining subcontractor.

(e) If the board determines that a contractor has not substituted a subcontractor or that the contractor’s substitution was in compliance with ORS 279.322, the board shall award the contractor $250 of the deposit and shall retain the other $250, which may be expended by the board.

(2) Upon receipt of a complaint under subsection (1) of this section, the board shall investigate the complaint. If the board determines that a contractor has substituted a subcontractor in a manner not in compliance with ORS 279.322, the board may impose a civil penalty against the contractor pursuant to subsections (3) to (5) of this section. Civil penalties under this section shall be imposed in the manner provided under ORS 183.090.

(3) If the board imposes a civil penalty under subsection (2) of this section and it is the first time the board has imposed a civil penalty under subsection (2) of this section against the contractor during a three-year period, the board shall:

(a) Impose a civil penalty on the contractor of up to 10 percent of the amount of the subcontract bid submitted by the complaining subcontractor to the contractor or $15,000, whichever is less. Amounts collected by the board under this paragraph shall be awarded to the complaining subcontractor or subcontractors; and

(b) Impose a civil penalty on the contractor of up to $1,000. Amounts collected by the board under this paragraph shall be retained by the board and may be expended by the board.

(4) If the board imposes a civil penalty under subsection (2) of this section and it is the second time the board has imposed a civil penalty under subsection (2) of this section against the contractor during a three-year period, the board may:

(b) Impose a civil penalty on the contractor of up to $1,000 and shall place the contractor on the list established under ORS 701.227 for up to six months. Amounts collected by the board under this paragraph shall be retained by the board and may be expended by the board.

(5) If the board imposes a civil penalty under subsection (2) of this section and the board has imposed a civil penalty under subsection (2) of this section against the contractor three or more times during a three-year period, the board may:

(b) Impose a civil penalty on the contractor of up to $1,000 and shall place the contractor on the list established under ORS 701.227 for up to one year. Amounts collected by the board under this paragraph shall be retained by the board and may be expended by the board.

(6) Within 10 working days after receiving a complaint under subsection (1) of this section, the board shall notify, in writing, any public contracting agency that is a party to the contract for which the complaint has been filed that the complaint has been filed under this section.

SECTION 5. ORS 279.722 is amended to read:

279.722. (1) In its discretion, the Oregon Department of Administrative Services may require that bids be accompanied either by a certified check, or by a bond in favor of the state furnished by a surety company authorized to do business in this state, in a sum not less than five percent of the total amount of the bid, but not more than the amount specified by ORS 279.027 (7).

(2) Notwithstanding the provisions of ORS 293.265 or any other provision of law, when bid security is in the form of a certified check, the department shall deposit such a check in the Oregon Department of Administrative Services Operating Fund, established under ORS 283.076. However, the department shall return the appropriate bid security held to an unsuccessful bidder in a timely manner and pursuant to the provisions of ORS 279.031.

SECTION 6. Section 4 of this 2001 Act and the amendments to ORS 279.027, 279.322 and 279.722 by sections 1, 2 and 5 of this 2001 Act apply to public contracts first advertised on or after January 1, 2002.

Approved by the Governor June 21, 2001

Filed in the office of Secretary of State June 22, 2001

Effective date January 1, 2002

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