Compliance Begins With the Bid

In a recent article featured on Lexology.com, attorney Eric Su discusses the fact that compliance with prevailing wage laws and regulations begins with the bid. Su writes:

“Prior to bidding for the work, contractors must review the bid documents to ascertain the specific prevailing wage requirements governing the project(s) for which bids are being submitted. When in doubt, contractors should consult their counsel or the contracting officers and local labor departments to ascertain their wage and hour obligations.

Contractors should never prepare or submit any bids without a complete awareness of the prevailing wage requirements governing their targeted projects. Competitive bidding is a statutory requirement for most public improvements, and Sandy reconstruction work is no exception. Statutes generally require public contracts to be awarded to the lowest responsive bid submitted by a responsible bidder. Compliance with prevailing wage requirements has a profound effect on both the responsiveness of the bid and the responsibility status of the contractor. These terms are defined as follows.

What is a “responsible bidder”? A responsible bidder is one who is fiscally responsible, trustworthy, and of the utmost integrity. A contractor’s responsibility status is established through the contractor’s experience in performing public works contracts and the general business integrity and credit worthiness of the company and its owners and officers, disclosed through periodic vendor disclosures filed with the federal government. Contractors are required to disclose any ongoing or prior investigations over prevailing wage compliance and findings of prevailing wage violations by the contractor and any companies owned or controlled by the contractor’s owners or officers.

What is a “responsive bid”? A responsive bid is one that strictly complies with bid instructions. A bid that fails to factor in the required prevailing wage rates will, in most instances, be deemed unresponsive, since bid instructions generally require the application of prevailing wage rates. A bid that has been determined as non-responsive will have a substantial negative effect on a contractor’s responsibility status and the contractor will have to notify contract agencies of the non-responsive determinations in vendor disclosures. This will have a direct negative effect on the contractor’s bid eligibility for future public contracts.”

You can view the entire article here.