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Senate File 438 - IntroducedA Bill ForAn Act 1relating to bidding and contracting for public
2improvement projects, making penalties applicable, and
3including effective date and applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 26.9, Code 2017, is amended to read as
2follows:
326.9 Award of contract.
41. The contract for the public improvement must be awarded
5to the lowest responsive, responsible bidder. However,
6contracts relating to public utilities or extensions or
7improvements thereof, as described in sections 384.80 through
8384.94, may be awarded by the city as it deems to be in the best
9interests of the city. This section shall not be construed to
10prohibit a governmental entity in the award of a contract for a
11public improvement or a governing body of a city utility from
12providing, in the award of a contract for a public improvement,
13an enhancement of payments upon early completion of the public
14improvement if the availability of the enhancement payments is
15included in the notice to bidders, the enhancement payments are
16competitively neutral to potential bidders, the enhancement
17payments are considered as a separate item in the public
18hearing on the award of contract, and the total value of the
19enhancement payments does not exceed ten percent of the value
20of the contract.
212. A governmental entity shall not require a potential
22bidder on a public improvement to provide any information which
23the potential bidder may deem to be confidential or proprietary
24as a requirement for being deemed a responsive, responsible
25bidder. This subsection shall not be construed to prohibit a
26governmental entity from obtaining information from the lowest
27responsive bidder to determine the bidder’s responsibility
28relating to the bidder’s experience, number of employees,
29and ability to finance the cost of the public improvement.
30However, a governmental entity shall require nonresident
31bidders to comply with section 73A.21, subsection 4.
32 Sec. 2. NEW SECTION. 26.16 Prequalification requirements
33prohibited.
34A governmental entity shall not by ordinance, rule, or any
35other action relating to contracts for public improvements
-1-1for which competitive bids are required by this chapter
2impose any requirement that directly or indirectly restricts
3potential bidders to any predetermined class of bidders defined
4by experience on similar projects, size of company, union
5membership, or any other criteria. However, a governmental
6entity shall require nonresident bidders to comply with section
773A.21, subsection 4.
8 Sec. 3. Section 73A.1, Code 2017, is amended to read as
9follows:
1073A.1 Definitions.
11As used in this subchapter:
121. “Appeal board” as used in this chapter means the state
13appeal board, composed of the auditor of state, treasurer of
14state, and the director of the department of management.
152. “Municipality” as used in this chapter means township or
16the state fair board.
173. “Public improvement” as used in this chapter means a
18building or other construction work to be paid for in whole or
19in part by the use of funds of any municipality.
20 Sec. 4. Section 73A.16, Code 2017, is amended to read as
21follows:
2273A.16 Bonds and taxes void.
23Any bonds or other evidence of indebtedness issued contrary
24to the provisions of this chapter subchapter, and any tax
25levied or attempted to be levied for the payment of any such
26bonds or interest thereon, shall be null and void.
27 Sec. 5. NEW SECTION. 73A.25 Title.
28This subchapter shall be known as the “Fair and Open
29Competition in Governmental Construction Act”.
30 Sec. 6. NEW SECTION. 73A.26 Purpose.
31The purpose of this chapter is to provide for more
32economical, nondiscriminatory, neutral, and efficient
33procurement of construction-related goods and services by this
34state and political subdivisions of this state.
35 Sec. 7. NEW SECTION. 73A.27 Definitions.
-2- 1 As used in this subchapter, unless the context clearly
2indicates otherwise:
31. “Governmental entity” means the state, political
4subdivisions of the state, public school corporations, and all
5officers, boards, or commissions empowered by law to enter into
6contracts for the construction of public improvements.
72. “Public improvement” means any building or construction
8work which is constructed, repaired, remodeled, or demolished
9under the control of a governmental entity and is paid for
10in whole or in part with funds of the governmental entity,
11including a building or improvement constructed or operated
12jointly with any other public or private agency.
13 Sec. 8. NEW SECTION. 73A.28 Public improvement contracts —
14prohibited terms and exemptions.
151. A governmental entity awarding a contract for the
16construction, repair, remodeling, or demolition of a public
17improvement and any construction manager acting on its behalf
18shall not, in any bid specifications, project agreements, or
19other controlling documents do any of the following:
20a. Require a bidder, offeror, contractor, or subcontractor
21to enter into or adhere to an agreement with one or more labor
22organizations in regard to the public improvement or a related
23public improvement project.
24b. Prohibit a bidder, offeror, contractor, or subcontractor
25from entering into or adhering to an agreement with one or more
26labor organizations in regard to the public improvement or a
27related public improvement project.
28c. Discriminate against a bidder, offeror, contractor, or
29subcontractor for becoming or remaining or refusing to become
30or remain a signatory to, or for adhering or refusing to adhere
31to, an agreement with one or more labor organizations in regard
32to the public improvement or a related public improvement
33project.
342. A governmental entity shall not award a grant, tax
35abatement, or tax credit that is conditioned upon a requirement
-3-1that the awardee include a term described in subsection 1
2in a contract document for any construction, improvement,
3maintenance, or renovation to real property or fixtures that is
4the subject of the grant, tax abatement, or tax credit.
53. This section shall not be construed to do any of the
6following:
7a. Prohibit a governmental entity from awarding a contract,
8grant, tax abatement, or tax credit to a private owner, bidder,
9contractor, or subcontractor who enters into or who is party to
10an agreement with a labor organization, if being or becoming
11a party or adhering to an agreement with a labor organization
12is not a condition for award of the contract, grant, tax
13abatement, or tax credit, and if the governmental entity does
14not discriminate against a private owner, bidder, contractor,
15or subcontractor in the awarding of that contract, grant,
16tax abatement, or tax credit based upon the private owner’s,
17bidder’s, contractor’s, or subcontractor’s status as being or
18becoming, or the willingness or refusal to become, a party to
19an agreement with a labor organization.
20b. Prohibit a contractor or subcontractor from voluntarily
21entering into or complying with an agreement entered into with
22one or more labor organizations in regard to a contract with a
23governmental entity or funded in whole or in part from a grant,
24tax abatement, or tax credit from the governmental entity.
25c. Prohibit employers or other parties from entering into
26agreements or engaging in any other activity protected by the
27federal National Labor Relations Act, 29 U.S.C. §151 et seq.
28d. Interfere with labor relations of parties that are not
29regulated under the federal National Labor Relations Act, 29
30U.S.C. §151 et seq.
31 Sec. 9. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
32immediate importance, takes effect upon enactment.
33 Sec. 10. APPLICABILITY. This Act applies to notices to
34bidders for public improvements, bids awarded for public
35improvements, and contracts for public improvements entered
-4-1into on and after the effective date of this Act.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5IOWA CONSTRUCTION BIDDING PROCEDURES ACT. This bill
6prohibits a governmental entity from requiring a potential
7bidder on a public improvement to provide any information which
8the potential bidder may deem to be confidential or proprietary
9as a requirement for being deemed a responsive, responsible
10bidder. This provision shall not be construed to prohibit a
11governmental entity from obtaining information from the lowest
12responsive bidder to determine the bidder’s responsibility
13relating to the bidder’s experience, number of employees,
14and ability to finance the cost of the public improvement.
15However, the bill provides that a governmental entity must
16still require nonresident bidders to comply with the preference
17disclosure requirements of Code section 73A.21, subsection 4.
18The bill also prohibits a governmental entity from imposing
19any requirement that directly or indirectly restricts potential
20bidders to any predetermined class of bidders by ordinance,
21rule, or any other action relating to contracts for public
22improvements for which competitive bids are required by Code
23chapter 26. However, the bill provides that a governmental
24entity must still require nonresident bidders to comply with
25the preference disclosure requirements of Code section 73A.21,
26subsection 4.
27Current Code chapter 26 defines “governmental entity”
28as the state, political subdivisions of the state, public
29school corporations, and all officers, boards, or commissions
30empowered by law to enter into contracts for the construction
31of public improvements, excluding the state board of regents
32and the state department of transportation. Code chapter 26
33also defines “public improvement” as a building or construction
34work which is constructed under the control of a governmental
35entity and is paid for in whole or in part with funds of the
-5-1governmental entity, including a building or improvement
2constructed or operated jointly with any other public or
3private agency, but excluding urban renewal demolition and
4low-rent housing projects, industrial aid projects authorized
5under Code chapter 419, emergency work or repair or maintenance
6work performed by employees of a governmental entity, and
7excluding a highway, bridge, or culvert project, and excluding
8construction or repair or maintenance work performed for a city
9utility under Code chapter 388 by its employees or performed
10for a rural water district under Code chapter 357A by its
11employees.
12FAIR AND OPEN COMPETITION IN GOVERNMENTAL CONSTRUCTION
13ACT. The bill creates a new subchapter of Code chapter 73A,
14the fair and open competition in governmental construction
15Act. The purpose of the Act is to provide for more economical,
16nondiscriminatory, neutral, and efficient procurement of
17construction-related goods and services by this state and
18political subdivisions of this state.
19The bill prohibits a governmental entity from awarding
20a contract for the construction, repair, remodeling, or
21demolition of a public improvement and any construction manager
22acting on its behalf from engaging in certain activities in any
23bid specifications, project agreements, or other controlling
24documents.
25The governmental entity or construction manager is
26prohibited from requiring a bidder, offeror, contractor, or
27subcontractor to enter into or adhere to an agreement with one
28or more labor organizations in regard to the public improvement
29or a related public improvement project.
30The governmental entity or construction manager is
31prohibited from prohibiting a bidder, offeror, contractor, or
32subcontractor from entering into or adhering to an agreement
33with one or more labor organizations in regard to the public
34improvement or a related public improvement project.
35The governmental entity or construction manager is
-6-1prohibited from discriminating against a bidder, offeror,
2contractor, or subcontractor for becoming or remaining or
3refusing to become or remain a signatory to, or for adhering
4or refusing to adhere to, an agreement with one or more labor
5organizations in regard to the public improvement or a related
6public improvement project.
7The bill also prohibits a governmental entity from awarding
8a grant, tax abatement, or tax credit that is conditioned
9upon a requirement that the awardee include a term which the
10governmental entity is prohibited by the bill from imposing
11in a contract document for any construction, improvement,
12maintenance, or renovation to real property or fixtures that is
13the subject of the grant, tax abatement, or tax credit.
14The bill specifies certain activities which the bill shall
15not be construed to prohibit.
16The new subchapter of Code chapter 73A defines “governmental
17entity” as the state, political subdivisions of the state,
18public school corporations, and all officers, boards, or
19commissions empowered by law to enter into contracts for the
20construction of public improvements, and defines “public
21improvement” as any building or construction work which is
22constructed repaired, remodeled, or demolished under the
23control of a governmental entity and is paid for in whole or
24in part with funds of the governmental entity, including a
25building or improvement constructed or operated jointly with
26any other public or private agency.
27Under Code section 24.24, failure on the part of a public
28official to perform any of the duties prescribed in Code
29chapter 73A constitutes a simple misdemeanor and is sufficient
30ground for removal from office. A simple misdemeanor is
31punishable by confinement for no more than 30 days or a fine of
32at least $65 but not more than $625 or by both.
33GENERAL PROVISIONS. The bill takes effect upon enactment.
34The bill applies to notices to bidders for public improvements,
35bids awarded for public improvements, and contracts for public
-7-1improvements entered into on and after the effective date of
2the bill.
-8-je/rj
2improvement projects, making penalties applicable, and
3including effective date and applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 26.9, Code 2017, is amended to read as
2follows:
326.9 Award of contract.
41. The contract for the public improvement must be awarded
5to the lowest responsive, responsible bidder. However,
6contracts relating to public utilities or extensions or
7improvements thereof, as described in sections 384.80 through
8384.94, may be awarded by the city as it deems to be in the best
9interests of the city. This section shall not be construed to
10prohibit a governmental entity in the award of a contract for a
11public improvement or a governing body of a city utility from
12providing, in the award of a contract for a public improvement,
13an enhancement of payments upon early completion of the public
14improvement if the availability of the enhancement payments is
15included in the notice to bidders, the enhancement payments are
16competitively neutral to potential bidders, the enhancement
17payments are considered as a separate item in the public
18hearing on the award of contract, and the total value of the
19enhancement payments does not exceed ten percent of the value
20of the contract.
212. A governmental entity shall not require a potential
22bidder on a public improvement to provide any information which
23the potential bidder may deem to be confidential or proprietary
24as a requirement for being deemed a responsive, responsible
25bidder. This subsection shall not be construed to prohibit a
26governmental entity from obtaining information from the lowest
27responsive bidder to determine the bidder’s responsibility
28relating to the bidder’s experience, number of employees,
29and ability to finance the cost of the public improvement.
30However, a governmental entity shall require nonresident
31bidders to comply with section 73A.21, subsection 4.
32 Sec. 2. NEW SECTION. 26.16 Prequalification requirements
33prohibited.
34A governmental entity shall not by ordinance, rule, or any
35other action relating to contracts for public improvements
-1-1for which competitive bids are required by this chapter
2impose any requirement that directly or indirectly restricts
3potential bidders to any predetermined class of bidders defined
4by experience on similar projects, size of company, union
5membership, or any other criteria. However, a governmental
6entity shall require nonresident bidders to comply with section
773A.21, subsection 4.
8 Sec. 3. Section 73A.1, Code 2017, is amended to read as
9follows:
1073A.1 Definitions.
11As used in this subchapter:
121. “Appeal board” as used in this chapter means the state
13appeal board, composed of the auditor of state, treasurer of
14state, and the director of the department of management.
152. “Municipality” as used in this chapter means township or
16the state fair board.
173. “Public improvement” as used in this chapter means a
18building or other construction work to be paid for in whole or
19in part by the use of funds of any municipality.
20 Sec. 4. Section 73A.16, Code 2017, is amended to read as
21follows:
2273A.16 Bonds and taxes void.
23Any bonds or other evidence of indebtedness issued contrary
24to the provisions of this chapter subchapter, and any tax
25levied or attempted to be levied for the payment of any such
26bonds or interest thereon, shall be null and void.
27 Sec. 5. NEW SECTION. 73A.25 Title.
28This subchapter shall be known as the “Fair and Open
29Competition in Governmental Construction Act”.
30 Sec. 6. NEW SECTION. 73A.26 Purpose.
31The purpose of this chapter is to provide for more
32economical, nondiscriminatory, neutral, and efficient
33procurement of construction-related goods and services by this
34state and political subdivisions of this state.
35 Sec. 7. NEW SECTION. 73A.27 Definitions.
-2- 1 As used in this subchapter, unless the context clearly
2indicates otherwise:
31. “Governmental entity” means the state, political
4subdivisions of the state, public school corporations, and all
5officers, boards, or commissions empowered by law to enter into
6contracts for the construction of public improvements.
72. “Public improvement” means any building or construction
8work which is constructed, repaired, remodeled, or demolished
9under the control of a governmental entity and is paid for
10in whole or in part with funds of the governmental entity,
11including a building or improvement constructed or operated
12jointly with any other public or private agency.
13 Sec. 8. NEW SECTION. 73A.28 Public improvement contracts —
14prohibited terms and exemptions.
151. A governmental entity awarding a contract for the
16construction, repair, remodeling, or demolition of a public
17improvement and any construction manager acting on its behalf
18shall not, in any bid specifications, project agreements, or
19other controlling documents do any of the following:
20a. Require a bidder, offeror, contractor, or subcontractor
21to enter into or adhere to an agreement with one or more labor
22organizations in regard to the public improvement or a related
23public improvement project.
24b. Prohibit a bidder, offeror, contractor, or subcontractor
25from entering into or adhering to an agreement with one or more
26labor organizations in regard to the public improvement or a
27related public improvement project.
28c. Discriminate against a bidder, offeror, contractor, or
29subcontractor for becoming or remaining or refusing to become
30or remain a signatory to, or for adhering or refusing to adhere
31to, an agreement with one or more labor organizations in regard
32to the public improvement or a related public improvement
33project.
342. A governmental entity shall not award a grant, tax
35abatement, or tax credit that is conditioned upon a requirement
-3-1that the awardee include a term described in subsection 1
2in a contract document for any construction, improvement,
3maintenance, or renovation to real property or fixtures that is
4the subject of the grant, tax abatement, or tax credit.
53. This section shall not be construed to do any of the
6following:
7a. Prohibit a governmental entity from awarding a contract,
8grant, tax abatement, or tax credit to a private owner, bidder,
9contractor, or subcontractor who enters into or who is party to
10an agreement with a labor organization, if being or becoming
11a party or adhering to an agreement with a labor organization
12is not a condition for award of the contract, grant, tax
13abatement, or tax credit, and if the governmental entity does
14not discriminate against a private owner, bidder, contractor,
15or subcontractor in the awarding of that contract, grant,
16tax abatement, or tax credit based upon the private owner’s,
17bidder’s, contractor’s, or subcontractor’s status as being or
18becoming, or the willingness or refusal to become, a party to
19an agreement with a labor organization.
20b. Prohibit a contractor or subcontractor from voluntarily
21entering into or complying with an agreement entered into with
22one or more labor organizations in regard to a contract with a
23governmental entity or funded in whole or in part from a grant,
24tax abatement, or tax credit from the governmental entity.
25c. Prohibit employers or other parties from entering into
26agreements or engaging in any other activity protected by the
27federal National Labor Relations Act, 29 U.S.C. §151 et seq.
28d. Interfere with labor relations of parties that are not
29regulated under the federal National Labor Relations Act, 29
30U.S.C. §151 et seq.
31 Sec. 9. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
32immediate importance, takes effect upon enactment.
33 Sec. 10. APPLICABILITY. This Act applies to notices to
34bidders for public improvements, bids awarded for public
35improvements, and contracts for public improvements entered
-4-1into on and after the effective date of this Act.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5IOWA CONSTRUCTION BIDDING PROCEDURES ACT. This bill
6prohibits a governmental entity from requiring a potential
7bidder on a public improvement to provide any information which
8the potential bidder may deem to be confidential or proprietary
9as a requirement for being deemed a responsive, responsible
10bidder. This provision shall not be construed to prohibit a
11governmental entity from obtaining information from the lowest
12responsive bidder to determine the bidder’s responsibility
13relating to the bidder’s experience, number of employees,
14and ability to finance the cost of the public improvement.
15However, the bill provides that a governmental entity must
16still require nonresident bidders to comply with the preference
17disclosure requirements of Code section 73A.21, subsection 4.
18The bill also prohibits a governmental entity from imposing
19any requirement that directly or indirectly restricts potential
20bidders to any predetermined class of bidders by ordinance,
21rule, or any other action relating to contracts for public
22improvements for which competitive bids are required by Code
23chapter 26. However, the bill provides that a governmental
24entity must still require nonresident bidders to comply with
25the preference disclosure requirements of Code section 73A.21,
26subsection 4.
27Current Code chapter 26 defines “governmental entity”
28as the state, political subdivisions of the state, public
29school corporations, and all officers, boards, or commissions
30empowered by law to enter into contracts for the construction
31of public improvements, excluding the state board of regents
32and the state department of transportation. Code chapter 26
33also defines “public improvement” as a building or construction
34work which is constructed under the control of a governmental
35entity and is paid for in whole or in part with funds of the
-5-1governmental entity, including a building or improvement
2constructed or operated jointly with any other public or
3private agency, but excluding urban renewal demolition and
4low-rent housing projects, industrial aid projects authorized
5under Code chapter 419, emergency work or repair or maintenance
6work performed by employees of a governmental entity, and
7excluding a highway, bridge, or culvert project, and excluding
8construction or repair or maintenance work performed for a city
9utility under Code chapter 388 by its employees or performed
10for a rural water district under Code chapter 357A by its
11employees.
12FAIR AND OPEN COMPETITION IN GOVERNMENTAL CONSTRUCTION
13ACT. The bill creates a new subchapter of Code chapter 73A,
14the fair and open competition in governmental construction
15Act. The purpose of the Act is to provide for more economical,
16nondiscriminatory, neutral, and efficient procurement of
17construction-related goods and services by this state and
18political subdivisions of this state.
19The bill prohibits a governmental entity from awarding
20a contract for the construction, repair, remodeling, or
21demolition of a public improvement and any construction manager
22acting on its behalf from engaging in certain activities in any
23bid specifications, project agreements, or other controlling
24documents.
25The governmental entity or construction manager is
26prohibited from requiring a bidder, offeror, contractor, or
27subcontractor to enter into or adhere to an agreement with one
28or more labor organizations in regard to the public improvement
29or a related public improvement project.
30The governmental entity or construction manager is
31prohibited from prohibiting a bidder, offeror, contractor, or
32subcontractor from entering into or adhering to an agreement
33with one or more labor organizations in regard to the public
34improvement or a related public improvement project.
35The governmental entity or construction manager is
-6-1prohibited from discriminating against a bidder, offeror,
2contractor, or subcontractor for becoming or remaining or
3refusing to become or remain a signatory to, or for adhering
4or refusing to adhere to, an agreement with one or more labor
5organizations in regard to the public improvement or a related
6public improvement project.
7The bill also prohibits a governmental entity from awarding
8a grant, tax abatement, or tax credit that is conditioned
9upon a requirement that the awardee include a term which the
10governmental entity is prohibited by the bill from imposing
11in a contract document for any construction, improvement,
12maintenance, or renovation to real property or fixtures that is
13the subject of the grant, tax abatement, or tax credit.
14The bill specifies certain activities which the bill shall
15not be construed to prohibit.
16The new subchapter of Code chapter 73A defines “governmental
17entity” as the state, political subdivisions of the state,
18public school corporations, and all officers, boards, or
19commissions empowered by law to enter into contracts for the
20construction of public improvements, and defines “public
21improvement” as any building or construction work which is
22constructed repaired, remodeled, or demolished under the
23control of a governmental entity and is paid for in whole or
24in part with funds of the governmental entity, including a
25building or improvement constructed or operated jointly with
26any other public or private agency.
27Under Code section 24.24, failure on the part of a public
28official to perform any of the duties prescribed in Code
29chapter 73A constitutes a simple misdemeanor and is sufficient
30ground for removal from office. A simple misdemeanor is
31punishable by confinement for no more than 30 days or a fine of
32at least $65 but not more than $625 or by both.
33GENERAL PROVISIONS. The bill takes effect upon enactment.
34The bill applies to notices to bidders for public improvements,
35bids awarded for public improvements, and contracts for public
-7-1improvements entered into on and after the effective date of
2the bill.
-8-je/rj