New Orleans Declares Felons Not Responsible Bidders on Public Projects and Washington Contemplating Similar Rule

Mike Purdy's Public Contracting Blog is so awesome, he got to this unique story that touts a legal link between Seattle, WA and New Orleans, LA before I could.    Before getting to the article, let me comment that if your company does public contracting work anywhere in the nation, Mike Purdy's blog is going to consistently feed you very relevant information on the topic.   I highly recommend you check it out, and subscribe to his feed. With that said, what article am I talking about? Well, if you're from the New Orleans area you likely remember the spat between former Mayor Ray Nagin and the city council about whether convicted felons are considered "responsible bidders" on city contracts.    After the fight, the vote, the veto, and the veto override, an ordinance (Ordinance Calendar No. 27,892) was adopted designed to stop the city from awarding contracts or grants to folks convicted of felonies in the previous 5 years.

Defining "Responsible Bidder"

What is a "responsible bidder?"   Nearly every state and city's public bid laws use the term, allowing government entities to award contracts only to "responsible bidders."    This interesting question of just what makes a bidder "responsible" was squarely in dispute between the New Orleans mayor and city council. In the mayor's veto message, he wrote that "under Louisiana law, responsibility [refers to] likely contractor performance, not the conviction history of a contractor's principals, members and/or officers." Council-member Stacey Head lead the fight against the mayor for the council, arguing that responsibility does refer to the qualifications of the bidder him/her/itself, and not simply whether the contractor is likely to perform.    In her veto-override press release, she quotes the Louisiana Attorney General and Louisiana Supreme Court on the subject. The AG states that "responsibility refers to the character or quality of the bidder - whether it is an entity with which you are safe doing business."   Understanding Public Bid Law, Michael J. Vallan, Assistant Attorney General, February 20, 2008. The Supreme Court allows an municipality to look at "financial ability, skill, integrity, business judgment, experience, reputation...and other similar factors bearing on the bidder's ability to successfully perform the contract."  Louisiana Associated General Contractors v. Calcasieu Parish School Board, 586 So.2d 1354 (La 1991).

Ordinance Cal. No. 27-892

So, what does this ordinance say?   Simplly, it prohibits the city from contracting with certain felons.   Here is the precise language:
[Prohibits City from contracting with] any person, corporation, or entity, whose principal(s), member(s), and/or officer(s) have within the preceding five years been convicted of, or pled guilty to, a felony under state or federal statutes for embezzlement, theft of public funds, bribery, falsification or destruction of public records.
The ordinance does not cast a terribly wide net, and so it's surprising that this caused any controversy at all.    The City is not restricted from contracting with any felons, only those who committed a felony that has some sort of public-corruption element.

Responsible Bidder Criteria Important in Washington and Elsewhere

New Orleans is not the only place examining the criteria of a "responsible bidder" in public bid law.  As Mike Purdy points out in his post, bidder responsibility is a hot topic in Washington, where a task force was created by the Capital Projects Advisory Review Board (CPARB) to "address concerns by contractors of how public agencies are using responsibility criteria." tThe CPARB has released Guidelines on Bidder Responsibility (check them out, and the CPARB page here).   The criteria guidelines released by CPARB are much broader than the New Orleans ordinance, requiring consideration of things like delinquent state taxes, on-going lawsuits and the like. One difference between the "Guidelines" and the "ordinance" is, of course, that the New Orleans ordinance actually prohibits a class of persons from being considered a responsible bidder, while the guidelines only offers suggestions as to what municipalities should consider when selecting a responsible bidder.    Will Washington take the next step and mandate the elimination of certain bidders?   Mike Purdy points out that they have the power:
Under RCW 39.04.350, a public agency in Washington State could establish Supplemental Bidder Responsibility Criteria similar to the New Orleans measure on not contracting with firms whose owners are convicted felons.   The Task Force on Bidder Responsibility will hold its second meeting on May 20, 2010.
Scott Wolfe
About the Author: Scott Wolfe
Scott Wolfe, Jr. obtained his J.D. degree from Loyola University of New Orleans, and his B.A. from Southern Methodist University in Dallas, TX. In 2006, 2007, 2008 and 2009, Scott was recognized as a Leader in Law by CityBusiness Magazine. The son and grandson of general contractors, Scott is a construction litigator in the Pacific Northwest, and the founding member of the bi-coastal law firm, Wolfe Law Group. Scott is also the founder and CEO of Express Lien, Inc., a legal document preparation service for contractors. In 2008, City Business Magazine recognized Scott as one of its Innovators of the Year for the Express Lien concept. As an entrepreneur himself, Scott has a strong background in business and commercial transactions and laws. He focuses his practice on the legal issues facing the construction industry, and has represented clients in multi-million dollar construction disputes in litigation and alternative dispute resolution proceedings. Scott is a LEED AP.

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