Responsible Contracting
Responsible use of taxpayer dollars
Responsible contracting policies help the public sector reduce the risk of contract failure by ensuring that only qualified contractors with a proven track record of providing quality work are used on projects. Responsible contractors are also required to abide by fair contracting processes and provide their employees with living wages and benefits.
How does a responsible contractor policy work?
- Receive public funding
- Require public approval
- Benefit from public investment
- Are fully licensed and bonded
- Have had no wage/hour violations for the past three consecutive years
- Provide OSHA 10-hour safety training
- Participate in an ERISA or joint labor-management training program
(e.g. certified apprenticeship program) - Pay Prevailing Wages and offer health insurance
- Provide all benefits of employment to their workforce
(including Social Security, Workers’ Compensation and unemployment insurance) - Comply with all other federal and state regulations
- Have no history of violating this policy in previous public contracts
Moreover...
Strong policies require general contractors to incorporate these components into their agreements with subcontractors.
IBEW Local 143 recommends using responsible contracting language in a prequalification system so that only those contractors who are prepared to meet responsible contracting requirements can move on to the bidding process. Experts advise the use of a standard points system and prequalification questionnaire for impartial review.
What if the lowest bidder does not meet this criteria?
An entity with a responsible contractor policy can refuse to hire any contractor who does not meet the requirements of this policy.
Specifically, when it comes to government, a municipality may reject any bid proposals that, in the municipality’s opinion, may contain inaccurate information or do not meet the responsible contractor policy contained in the bid specs.
The municipality reserves the right to accept or reject a bid or combination of bids if the contractor or contractor(s) are not “responsible contractors.”
Responsible contracting policies are part of a wider campaign to protect the community from harm by hiring unreputable contractors. These agreements are similar to Prevailing Wage statutes and Project Labor Agreements, which look at the larger economic picture to ensure quality construction work and a proper balance of interests that protects the public.
Benefits of a responsible contractor policy
Responsible contracting policies
Responsible contracting policies help create a higher-quality construction industry by ensuring that public policy and funding support only those contractors who meet these critical job quality standards. In regions where few construction workers belong to unions, responsible contracting policies can dissuade poor-performing contractors from bidding on public contracts.
responsible contractor language
By including responsible contractor language in construction contracts, entities make sure general contractors and subcontractors do not misclassify their workers as independent contractors, which renders the employees ineligible for Social Security, unemployment insurance, health insurance and Workers’ Compensation.
More Industry Issues:
Prevailing Wage
