The Labor Commissioner of the Iowa Department of Labor ("DOL") has adopted new rules to enforce the reciprocal resident bidder and labor force preference statute, Iowa Code § 73A.21. The rules set forth requirements for public bodies involved in a public improvement project and set forth procedures for enforcement activities by the Labor Commissioner.
The application of the resident bidder preference law is unchanged. When awarding a contract for a public improvement to the lowest responsible bidder, the public body shall allow a preference to a resident bidder as against a nonresident bidder that is equal to any preference given or required by the home state or foreign country in which the nonresident bidder is a resident without regard to whether such preferences are actually enforced by the applicable regulatory body in each state. If the bidder is a subsidiary of a parent that would be a nonresident bidder if such parent were to bid on the public improvement in its own name, then the public body shall allow a preference as against such bidder that is equal to the preference given or required by the home state or foreign country of the bidder's parent. In the instance of a labor force preference, a public body shall apply the same resident labor force preference to a public improvement in this state as would be required in the construction of a public improvement by the home state or foreign country of the nonresident bidder, or the parent of a resident bidder if the parent would qualify as a nonresident bidder if such parent were to bid on the public improvement in its own name. A preference shall not be applied to a subcontractor unless the home state or foreign country of the nonresident bidder to whom the contract was awarded would apply a preference to the subcontractor.
The new rules require the following:
1. When a contract for a public improvement is to be awarded to the lowest responsible bidder, the public body shall request a statement from each bidder regarding the bidder's resident status.
2. The statement shall be on the form designated by the commissioner. The "Bidder Status Form" is available online at: http://www.iowaworkforce.org/labor/bidderstatusform.pdf
3. The statement shall require the bidder to certify whether the bidder is a resident bidder or a nonresident bidder.
4. In the case of a resident bidder, the statement shall require the resident bidder to identify each office at which the resident bidder has conducted business in the state during the previous three years and the dates on which the resident bidder conducted business at each office.
5. In the case of a nonresident bidder, the statement shall require the nonresident bidder to identify the nonresident bidder's home state or foreign country as reported to the Iowa secretary of state, to identify each preference offered by the nonresident bidder's home state or foreign country, and to certify that, except as set forth on the form, there are no other preferences offered by the nonresident bidder's home state or foreign country.
6. The statement shall include such additional information as requested by the commissioner.
7. The statement must be signed by an authorized representative of the bidder.
8. A fully completed statement shall be deemed to be incorporated by reference into all project bid specifications and contract documents with any bidder on a public improvement.
9. Failure to provide the statement with the bid may result in the bid being deemed nonresponsive. This may result in the bid being rejected by the public body.
The rules explain how to determine whether a person or entity qualifies as a "resident bidder" and whether they are "authorized to transact business" in Iowa.
If the DOL's Labor Services Division determines that a violation of the Act has occurred, the Division may sue for injunctive relief against the awarding of a contract, the undertaking of a public improvement, or the continuation of a public improvement.
Public bodies should contact their project architects / engineers to determine whether the Bidder Status Form has been required in the bid specifications. Notices to Bidders should be revised to include the following: "Failure to submit a fully completed Bidder Status Form with the bid may result in the bid being deemed nonresponsive and rejected."
This is a summary of the recently enacted rules. Specific questions should be addressed to counsel. If there are issues you wish to discuss or have clarified, please do not hesitate to contact the member of Ahlers & Cooney with whom you normally work.
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