COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 36

(By Senator Klempa)

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[Originating in the Committee on Labor;

reported February 16, 2012.]

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A BILL to amend and reenact §5-22-1 of the Code of West Virginia, 1931, as amended, relating to requiring the disclosure of subcontractors providing over a certain monetary amount of services within one business day of the close of bids for public construction contracts.

Be it enacted by the Legislature of West Virginia:

    That §5-22-1 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 22. GOVERNMENT CONSTRUCTION CONTRACTS.

§5-22-1. Bidding required; government construction contracts to go to lowest qualified responsible bidder; procedures to be followed in awarding government construction projects; penalties for violation of procedures and requirements debarment; exceptions.

    (a) This section and the requirements set forth in this section may be referred to as the “West Virginia Fairness In Competitive Bidding Act.”

    (b) As used in this section:

    (1) “Lowest qualified responsible bidder” means the bidder that bids the lowest price and that meets, as a minimum, all the following requirements in connection with the bidder̓s response to the bid solicitation. The bidder must certify that it:

    (A) Is ready, able and willing to timely furnish the labor and materials required to complete the contract;

    (B) Is in compliance with all applicable laws of the State of West Virginia; and

    (C) Has supplied a valid bid bond or other surety authorized or approved by the contracting public entity.

    (2) “The state and its subdivisions” means the State of West Virginia, every political subdivision thereof, every administrative entity that includes such a subdivision, all municipalities and all county boards of education.

    (c) The state and its subdivisions shall, except as provided in this section, solicit competitive bids for every construction project exceeding $25,000 in total cost: Provided, That a vendor who has been debarred pursuant to the provisions of sections thirty-three-a through thirty-three-f, inclusive, article three, chapter five-a of this code may not bid on or be awarded a contract under this section. All bids submitted pursuant to this chapter shall include a valid bid bond or other surety as approved by the State of West Virginia or its subdivisions.

    (d) Following the solicitation of bids, the construction contract shall be awarded to the lowest qualified responsible bidder who shall furnish a sufficient performance and payment bond. Provided, That The state and its subdivisions may reject all bids and solicit new bids on the project. All bidders on a construction contract with the Department of Administration, Division of Purchasing, valued at more than $500,000.00 shall submit a list of all subcontractors who will perform more than $25,000.00 of work on the project including labor and materials: Provided, That this section shall not apply to “design-build” projects as defined in subsection (3), section two, article twenty-two-a of this chapter. Such list shall include the license numbers as required by article eleven, chapter twenty-one of this code. In addition, such listing shall include addresses of the subcontractors. This information shall be provided to the soliciting entity within one business day of the close of bids for review prior to the awarding of a construction contract. If no subcontractors are to be used to complete the project it will be so noted on the subcontractor list. Failure to submit the subcontractor list within twenty-four hours after the deadline for submitting bids shall result in disqualification of the bid. Written approval must be obtained from the contracting public entity before any subcontractor substitution is permitted. Substitutions are not permitted unless:

    (1) The subcontractor listed in the original bid becomes bankrupt or insolvent prior to execution of a subcontract;

    (2) When the using agency refuses to approve the subcontractor list in the original bid, provided such approval has been reserved in the bidding documents;

    (3) When the subcontractor listed in the original bill fails, is unable or refuses to perform his subcontract; or

    (4) When a bid alternate accepted by the using agency causes the listed subcontractor’s bid not to be low.

    The provisions regarding subcontractors shall expire one year from passage.

    (e) The contracting public entity may not award the contract to a bidder which fails to meet the minimum requirements set out in this section. As to any prospective low bidder which the contracting public entity determines not to have met any one or more of the requirements of this section or other requirements as determined by the public entity in the written bid solicitation, prior to the time a contract award is made, the contracting public entity shall document in writing and in reasonable detail the basis for the determination and shall place the writing in the bid file. After the award of a bid under this section, the bid file of the contracting public agency and all bids submitted in response to the bid solicitation shall be open and available for public inspection.     (f) Any public official or other person who individually or together with others knowingly makes an award of a contract under this section in violation of the procedures and requirements of this section is subject to the penalties set forth in section twenty-nine, article three, chapter five-a of the Code of West Virginia.

    (g) No officer or employee of this state or of any public agency, public authority, public corporation or other public entity and no person acting or purporting to act on behalf of such officer or employee or public entity shall require that any performance bond, payment bond or surety bond required or permitted by this section be obtained from any particular surety company, agent, broker or producer.

    (h) All bids shall be open in accordance with the provisions of section two of this article, except design-build projects which are governed by article twenty-two-a of this chapter and are exempt from these provisions.

    (I) Nothing in this section shall apply to:

    (1) Work performed on construction or repair projects by regular full-time employees of the state or its subdivisions;

    (2) Prevent students enrolled in vocational educational schools from being utilized in construction or repair projects when the use is a part of the student̓s training program;

    (3) Emergency repairs to building components and systems. For the purpose of this subdivision, the term emergency repairs means repairs that if not made immediately will seriously impair the use of building components and systems or cause danger to those persons using the building components and systems; and

    (4) Any situation where the state or a subdivision thereof reaches an agreement with volunteers, or a volunteer group, whereby the governmental body will provide construction or repair materials, architectural, engineering, technical or any other professional services and the volunteers will provide the necessary labor without charge to, or liability upon, the governmental body.

    NOTE: The purpose of this bill is to require the disclosure of subcontractors when construction contracts are of a certain value. Additionally, this bill would require contractors one business day of the close of bids to submit this information for public contracts. The bill provides that if this disclosure is not made the bid will be disqualified. The bill also requires that if no subcontractors are to be used their non-use will be noted. Additionally, the bill prohibits the substitution of a contractor unless it is to the owner’s advantage.

    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.