PERRYSBURG — A more stringent municipal code for construction contractor bid requirements is working its way through city council.
Councilman Kevin Fuller has a draft amendment for the policy to refine the process determining who is a responsible bidder.
“When we spend taxpayer dollars, at the end of the day, we want people out there doing it right,” Fuller said. “You would be surprised how often in construction that people cheat. They cheat the system.”
The amendment was initially presented to the finance committee, because it would apply to the finance department. It has since been moved to the service committee. As part of the presentations and discussions it has gone through some revision.
In an initial version, the amendment would have applied to the awarding of all construction project bids in excess of $25,000; that has since been revised to $50,000. The section of code under discussion is what constitutes “Determination of lowest and best bid for public improvement projects.”
The ordinance would be amended to include requirements of the bidder to provide healthcare and retirement benefits to its employees. Additionally, the bidder must participate in, sponsor or exclusively hire graduates of a construction apprenticeship program certified and regulated by the State of Ohio or the U.S. Department of Labor.
“There is a general resurgence in interest in trade schools, and there’s a demand for it,” Fuller said. “With anyone who participates in a construction apprenticeship program, you are getting someone that’s experienced.”
Council President Jonathan Smith asked if this would be union exclusive.
Fuller found approximately 13,000 certified construction apprenticeship programs in Ohio, including both union and non-union affiliation.
Smith said he still has concerns about the costs of the requirements.
“My biggest concern is if it will make it more difficult for mom and pop contractors, the small, family-owned businesses,” he said. “If they’re family-run businesses, the may not have a health plan, because they have something personally and they don’t need it, because it’s not required, per the Affordable Care Act.
“I want some further discussion on that. I still think we’re in the conversation stages, to make sure we aren’t eliminating any of the smaller businesses.”
Fuller is a business representative for the Indiana-Kentucky-Ohio Regional Council of Carpenters, the Carpenters union.
“I think the expectation of the people who elected me, there was the expectation out there that ‘Hey, you are going to look into these construction projects?’” Fuller said.
“It’s something that I’m very passionate about. So I decided to sit down and spend a significant amount of time putting something like this together, and here you have it,” Fuller said.
The benefits package section has received the most attention, but there are also 15 disclosures required, as confirmation of past history, such as disclosure of official safety violations with the Occupational Safety and Health Administration, violations of wage and hour laws and legal judgements against the bidder.
“One of the concerns I have is with subcontractors,” Fuller said. “Oftentimes, what you will see in the construction industry — and it’s gotten worse since the recession — is people abusing the 1099 for-cash model, as an end-run to avoid paying taxes, for one, and to avoid paying workers’ compensation, Social Security, unemployment insurance and things like that.”
Smith also mentioned the possibility of a general contractor not knowing what subcontractors are doing, and that it looks like they would be required to police the other businesses. He also mentioned the possible alienation of businesses in the process.
“I understand what we’re trying to do — we don’t want the subcontractors with the day-laborer issues and businesses that aren’t paying a prevailing wage,” Smith said. “I am concerned with the unintended consequences of how it’s written.”
Fuller had the lone vote against the Schaller Building roof project, because he still had unanswered questions.
He said that it increases in importance with the scale of potential projects that are coming up, including a possible new municipal complex, a public utilities building, the Fort Meigs ditch project and a number of park projects.
“This expedites the process. You are putting it on the contractor that wants to eventually do business with the city,” Fuller said. “There could be a fantastic contractor out there that I’m unaware of, but I wouldn’t know that if I don’t have good information. These are all questions that I think we should be asking anyway.”
He said that this is not a pre-approval process, they are limited to requiring bidders be “responsive and responsible.”
“This is really an insurance policy. We see it up front,’” Fuller said.
He said that there appears to be support from the other service committee members.
“It’s important to note we trust a contractor, but how much do we really know about them? I found a set of potential errors and instead of complaining, I want to provide a solution,” Fuller said.