1 / 65

PUBLIC WORKS CONTRACTS: Streamlining A Complicated PROCESS

PUBLIC WORKS CONTRACTS: Streamlining A Complicated PROCESS. St. Louis County Municipal League Municipal Officials Training Academy May 23, 2013. Ryan A. Moehlman Cunningham, Vogel & Rost, P.C. legal counselors to local government 333 S. Kirkwood Road, Suite 300 St. Louis, MO 63122

yul
Download Presentation

PUBLIC WORKS CONTRACTS: Streamlining A Complicated PROCESS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. PUBLIC WORKS CONTRACTS:Streamlining A Complicated PROCESS St. Louis County Municipal League Municipal Officials Training Academy May 23, 2013 Ryan A. Moehlman Cunningham, Vogel & Rost, P.C. legal counselors to local government 333 S. Kirkwood Road, Suite 300 St. Louis, MO 63122 314.446.0800 www.municipalfirm.com

  2. STATE LAW REQUIREMENTS Public Works

  3. Contracts RFPs & Other Calls for Bids Mandatory Requirements OSHA Training - § 292.675 RSMo. Participation in Work Authorization Program § 285.530RSMo. Proof of Lawful Presence - § 208.009RSMo. Prompt Payment Act - § 34.057 RSMo. Bond-§ 107.170RSMo. Prevailing Wage - § 290.210 RSMo., et seq. Excessive Unemployment - §§ 290.550 - 290.580 RSMo. American Products -§ 34.353 RSMo. See Exhibit 1 in Handouts

  4. A CONTRACT §432.070 RSMO requires that … • No county, city, town, village . . . or other municipal corporation shall make any contract, unless • it is within the scope of its powers or expressly authorized by law, and • the contract is made upon a promise to perform AFTER making of the contract • includes the price term ($$$$$)

  5. A CONTRACT §432.070 RSMO requires that … • And unless the contract: • Is in writing • dated when made, and • signed by the parties thereto (or their agents authorized by law and duly appointed) and • authorized in writing

  6. OSHA TRAINING

  7. OSHA Training § 292.675 RSMo All “on-site employees” of contractors & subcontractors working on a public works project must take the 10-hour, OSHA-approved construction safety course provided by their contractor or subcontractor

  8. TRAINING?We DON’t NEED NO STINKING TRAINING Ladder Stacking Techniques

  9. OSHA Training under § 292.675 RSMo What is it? • For each public works project, statute’s requirements must appear in the: • resolution/ordinance • call for bids for the contract and • contract A one-time requirement that on-site employees must either: • complete the program within 60 days of beginning work, or • hold documentation of prior completion of the program

  10. PROPER BACKHOE OPERATION

  11. OSHA Training - Section 292.675 RSMo • Enforcement by MoDOLIR • Employee working without OSHA training has 20 days to complete the training before employee is removed from project and penalties accrue. • Penalties = $2,500.00 plus $100.00/day per employee found on site without evidence of training • Penalties forfeited to city/county • City/county must withhold penalty amounts assessed by MoDOLIR from payments to contractor. • Notice of these penalty provisions must be included in contract.

  12. FORKLIFT COMBOS For that extra lift.

  13. WORK AUTHORIZATION

  14. Immigration 285.530.2 RSMO • As a condition for the award of any contract or grant in excess of $5,000 by a political subdivision to a business entity: • business entity shall, by sworn affidavit& provision of documentation, affirm enrollment &participation in a federal work authorization program with respect to employees working on contracted services. • Affidavit affirming that business entity does not knowingly employ any person who is an unauthorized alien in connection with the contracted services. • See Exhibit 2

  15. MoDOLIR Regulations15 CSR 60-15.020 Any bid or responseto an RFP for the award of any contract for services in excess of $5,000shall be accompanied by an affidavitfrom business entity that: • Enrolled & participating in, E-Verify, or other federal work authorization program AND • Does not knowingly employ any person who is an unauthorized alien in conjunction with the contracted services.

  16. Missouri Department of Labor regulations implication– • City/County should require submittal of affidavit & documentation of participation in a federal work authorization program (i.e. E-Verify) as part of the bid package

  17. Immigration285.530 RSMO Emergency exception. • emergency = natural and manmade disasters: major snow and ice storms, floods, tornadoes, severe weather, earthquakes, hazardous material incidents, nuclear power plant accidents, other radiological hazards, and major mechanical failures of a public utility facility. • Suspends the requirements for 15 working days (3 weeks)

  18. Immigration 285.530 RSMO Does NOT apply to: • Permits or licenses issued by the City • Purchase of goods or products

  19. PROOF OF LAWFUL PRESENCE Illegal aliens prohibited from receiving any state or local public benefit

  20. §208.009 RSMO • Prohibits any illegal alien from receiving state or local "public benefits" • Requires all applicants at time of application for public benefits to provide “affirmative proof that the applicant is a citizen or a permanent resident of the United States or is lawfully present in the United States.”

  21. Public Benefits 208.009 RSMO “public benefit” • means any grant, contract, or loan provided by a … local government …

  22. Public Benefits 208.009 RSMO affirmative proofrequired “at the time of application” • Driver’s license or other document recognized by the federal government as proof of lawful presence

  23. Public Benefits 208.009 RSMo • NO AFFIDAVIT REQUIRED unless applicant cannot supply documentation, then can request “temporary public benefits” upon affidavit • Affidavit only good for 90 days • See Exhibit 3

  24. Other contract requirements

  25. http://www.labor.mo.gov/Public_Bodies_GuidebookExhibit 4

  26. Prompt Payment Act § 34.057 RSMo.

  27. §34.057.1. ... all public works contracts made and awarded by...any municipality, county..., for construction, reconstruction or alteration of any public works project, shall provide for prompt payment by the public owner to the contractor Prompt payment act

  28. Must “make progress payments to the contractor on at least a monthly basis as the work progresses, or, on a lump sum basis according to the terms of the lump sum contract” §34.057.1(1) RSMo. PROMPT PAYMENT ACT

  29. Retention • “shall not exceed 5% of the value of the contract …unless the public owner and the architect or engineer determine that a higher rate of retainage is required to ensure performance of the contract” • But never more than 10% • Only if public owner and the architect or engineer determine that a higher rate of retainage is required to ensure performance of the contract • Include determination in bid documents PROMPT PAYMENT ACT

  30. Retention • Must pay the retainage, less any offsets/deductions authorized in the contract or otherwise authorized by law, after substantial completion of the work and acceptance by the public owner's authorized contract representative PROMPT PAYMENT ACT

  31. Must be paid within 30 days of the first of the following to occur: • Completion of the project and complete filing of all documents required by contract • Architect/Engineer certification of completion • Certification of completion by the contracting authority Payment “made” when placed in US Mail PROMPT PAYMENT ACT FINAL PAYMENT

  32. If payment is not made within the 30 days & NO GOOD FAITH and Reasonable Cause to withhold payment: • Interest at 1½% per month PROMPT PAYMENT ACT FINAL PAYMENT

  33. Liquidated damages • Unsatisfactory job progress • Defective construction work/material not remedied • Disputed work • Failure to comply with any material contract provision • Third party claims filed or reasonable evidence that a claim will be filed; • Failure to make timely payments for labor, equipment or materials; • Damage to a contractor, subcontractor or material supplier; • Reasonable evidence that a subcontractor or material supplier cannot be fully compensated under its contract with the contractor for the unpaid balance of the contract sum; • Citation of contractor or subcontractor for failure to comply with material provision of contract and which result in violation of any federal, state or local law, regulation or ordinance applicable to project causing additional costs or damages to the owner. PROMPT PAYMENT ACT§34.057.5 REASONS TO WITHHOLD FINAL PAYMENT What constitutes “reasonable cause” & “good faith”:

  34. Payment bond

  35. Payment Bond; § 107.170 • On every project with estimated costs in excess of $25,000.00 • Must require a payment bond from a contractor • Generally equal to contract amount • Provides equivalent protection on public projects as provided by mechanics lien laws

  36. Payment Bond; § 107.170 • WARNING: Officials Charged with requiring Payment Bond may incur personal liability for failing to comply with statute. • Union Pacific R. Co. v. St. Louis Marketplace, Ltd. Partnership, 212 F.3d 386, 390-91 (8th Cir. 2000) (Official immunity did not protect city officials, Mayor and Comptroller, who were charged with performing ministerial duty of requiring payment bond from a contractor.) • A public entity may defend, save harmless and indemnify any of its officers and employees, whether elective or appointive…arising out of an alleged act or omission occurring in the performance of a duty under this section. • IF IN DOUBT, REQUIRE PAYMENT BOND

  37. Prevailing wage

  38. Prevailing Wage; § 290.210 et seq. Public Policy of State of Missouri • Workers employed by or on behalf of a public body are to be paid no less than the prevailing wage on public works projects • The prevailing wage rate differs by county and for different types of work.

  39. Prevailing Wage; § 290.210 et seq. • Wage rates must be attached to and made part of the specifications for the work • Must “specify in the resolution or ordinance and in the call for bids for the contract what is the prevailing hourly rate”

  40. Request for wage determination form PW-3 Sent to Division of Labor Standards before project is bid

  41. Prevailing wage Notice to MoDOLIR Prior to beginning any work on a public works project, public body awarding a contract shall notify the Department of Labor, on a form prescribed by the department, of the scope of the work to be done, the various types of craftsmen who will be needed on the project, & the date work will commence on the project. • Submit PW-3 for Every Project • Typical turnaround by MoDOLIR: 2-3 Days

  42. Project notification form PW-2 Filed with Division of Labor Standards when project is awarded

  43. Prevailing Wage; § 290.210 et seq. Required Ordinance or Resolution Provisions • Must specify in the resolution or ordinance and in the call for bids for the contract what is the prevailing hourly rate of wages in the locality for each type of workman needed to execute the contract and also the general prevailing rate for legal holiday and overtime work. 290.262.10

  44. Prevailing Wage; § 290.210 et seq. Required contract provisions: The public body awarding the contract shall cause to be inserted in the contract a stipulation to the effect that not less than the prevailing hourly rate of wages shall be paid to all workmen performing work under the contract.  290.250.1.

  45. §290.290.2. Upon completion of work and prior to final payment, each contractor and subcontractor shall file with the contracting public body an affidavitof full compliance with the Prevailing Wage Law • City/County cannot make final payment until affidavit is filed in proper form and order.

  46. DAVis-bacon (federal) 40 usc §3141 • Applies when federal assistance (grants, loans, loan guarantees) used to pay for project over $2,000 and where law under which federal assistance is provided requires it. • Required contract language in 29 CFR 5.5

  47. federal DAVis-bacon v.STATE PREVAILING WAGE Which Applies to My Federal Funded Project? • BOTH – Frank Bros. v. Wisc. DOT, 409 F.3d 880 (7th Cir. 2005) • (1) Davis-Bacon Act did not implicitly preempt application of state's prevailing wage law, and • (2) there was no conflict between federal and state statutory schemes. • Include both Federal and State Wage Determination in Bids Documents for Federally Funded Projects • Federal Wage Determinations available at: http://www.wdol.gov/dba.aspx

  48. Excessive Unemployment – Sections 290.550 -580 RSMo • Excessive Unemployment in EffectOnly Missouri laborers & laborers from “nonrestrictive” states allowed to be employed on Missouri public works projects when unemployment rate exceeds 5% for 2 consecutive months • Restrictive states: AK, AZ, CA, CO, CT, DE, DC, FL, ID, IL, IA, ME, MA, MS, MT, NV, NJ, ND, OK, SD, U.S. Virgin Islands, WV and WY

  49. Excessive Unemployment – Sections 290.550 -580 RSMo See Lakeside Roofing Co. v. Nixon (EDMo. 2012) Mo. Excessive Unemployment Law held unconstitutional under the Privileges and Immunities and Equal Protection Clauses Problem: • Law Still on the Books, but is Unenforceable DO NOT Deny Contracts based on Worker Residence

  50. American Products - §34.353 RSMo • Each contract made by a public agency for . . . any public works shall contain a provision that any manufactured goods/commodities used or supplied in performance of that contract or any subcontract thereto shall be manufactured or produced in the U.S.

More Related