The Responsible Contractor Law requires a contracting authority to enter into construction contracts on projects with only “responsible contractors”. Under the law, a contracting authority is defined broadly to include all state agencies and municipalities.
What projects are covered under the law?
Any publicly owned or financed building, erection, construction, alteration, remodeling, demolition or repair of buildings, real property, highways, roads, bridges or other construction work performed pursuant to a construction contract estimated to exceed $50,000.
What is a state agency under the law?
Any Minnesota state agency, Minnesota State Colleges & Universities, the University of Minnesota, the Met Council, the Metropolitan Airports Commission or a municipality.
What is considered a municipality under the law?
A county, town, home rule charter or statutory city, school district, watershed district, housing and redevelopment authorities, port authority, economic development authority, sport facility authority, drainage authority, joint powers board or organization created under Minnesota Statute § 471.59, special district, instrumentality, destination medical center corporation, or other municipal corporation or political subdivision authorized by law to enter into contracts.
What is a prime contractor under the law?
The definition of a “prime contractor” in this law is essentially a vendor who bids on a project. However, the minimum criteria for a “responsible contractor” apply to the prime and its related entities. A related entity is defined broadly to include:
- businesses substantially under the control of the prime
- subsidiaries
- predecessors
- principals
- people or businesses that substantially control the prime
What is a “Responsible Contractor” under the law?
In order to qualify as a “responsible contractor,” a contractor must meet certain minimum criteria.
How must a contractor show that it is a “Responsible Contractor”?
Bidding contractors must submit to the contracting authority a sworn statement under oath by an owner or officer stating that it meets the minimum criteria for a responsible contractor under this law. With this verification, the prime contractor must submit a list of subcontractors they intend to use on the project.
Subcontractors – Prior to execution of a construction contract, a prime contractor must obtain verifications of compliance from each subcontractor it intends to use and confirm that they have obtained these verifications with the project owner.
A contractor is responsible for false statements of its subcontractors only if that contractor accepted the verification of compliance from the subcontractor with actual knowledge that it includes a false statement.
Subcontractors must meet the minimum criteria no matter what the value of the subcontract.
What must be included in the project bid documents regarding the new law?
The definition of “responsible contractor” taken directly from the statute or a clear reference to that statutory definition must be included in the bid documents for all covered projects. Bids can be awarded either to the lowest responsible bidder or by a best-value selection method.