Section 663.620 Construction Contracts

Section 663.620  Construction Contracts

The following procedures shall apply to construction

contracts (subagreements) awarded by loan recipients for the construction phase

only.  They shall not apply to personal and professional service contracts.

a)

Each construction contract shall be

awarded after formal advertising, unless negotiation is permitted in accordance

with Section 663.610(i

).

b)

The bid advertisement shall notify the

bidders that the procurement will be subject to the following requirements:

1)         This Part;

2)         The Davis-Bacon

Act (40 U.S.C. 3141 through 3148) and regulations adopted under that Act by the

US Department of Labor;

3)         The Employment

of Illinois Workers on Public Works Act [30 ILCS 570];

4)         The

Participation by Disadvantaged Business Enterprises in United States

Environmental Protection Agency Programs (40 CFR 33);

5)         The use of

American iron and steel as required by Sec. 1452(a)(4) of the federal Safe

Drinking Water Act (42 U.S.C. 300j-12(a)(4)), as applicable;

6)         The Build

America Buy America Act (BABA Act) at Public Law 117-58, Sections 70901 through

70952 (41 U.S.C. 8301 note), as applicable; and

7)         Any applicable

federal or State executive orders.

c)         A complete set of bidding documents shall be maintained by the

loan recipient and shall be available for inspection and copying.  Bidding

documents shall include:

1)         A complete

statement of the work to be performed, including necessary drawings and

specifications, and the required completion schedule;

2)         The terms and

conditions of the contract to be awarded;

3)         A clear

explanation of the method of bidding, the method of evaluation of bid prices,

and the basis and method for award of the contract;

4)         The statement

that any contract awarded in response to the bid is expected to be funded in

part by a loan from the PWSLP, and that neither the State of Illinois nor any

of its departments, agencies, or employees is or will

be awarded;

3)         A clear

explanation of the method of bidding, the method of evaluation of bid prices,

and the basis and method for award of the contract;

4)         The statement

that any contract awarded in response to the bid is expected to be funded in

part by a loan from the PWSLP, and that neither the State of Illinois nor any

of its departments, agencies, or employees is or will be a party to this

bidding or any resulting contract;

5)         Responsibility

requirements or criteria that will be used in evaluating bidders, provided that

an experience requirement or performance bond may not be used unless adequately

justified by the loan recipient;

6)         A proposal form,

to be used by all bidders, that includes the following language:

A)        By submission of

the bid, each bidder certifies, and in the case of a joint bid, each party to

the joint bid certifies as to that party's own organization, that, in

connection with the bid:

i)          the prices in

the bid have been arrived at independently, without consultation, communication,

or agreement, for the purpose of restricting competition, as to any matter

relating to the prices with any other bidder or with any competitor;

ii)         unless

otherwise required by law, the prices quoted in the bid have not knowingly been

directly or indirectly disclosed to any other bidder or to any competitor prior

to opening; and

iii)        no attempt has

been made or will be made by the bidder to induce any other person or firm to

submit or withhold a bid for the purpose of restricting competition

der or with any competitor;

ii)         unless

otherwise required by law, the prices quoted in the bid have not knowingly been

directly or indirectly disclosed to any other bidder or to any competitor prior

to opening; and

iii)        no attempt has

been made or will be made by the bidder to induce any other person or firm to

submit or withhold a bid for the purpose of restricting competition. Also, each

bidder shall submit a certification regarding compliance with Section 33E-11 of

the Illinois Criminal Code of 2012 [720 ILCS 5];

B)        Each signer of the bid shall certify

that:

i)          the signer is

the person in the bidder's organization responsible for the decision as to the

prices being bid and that the signer has not participated, and will not

participate, in any action contrary to subsection (c)(6)(A); or

ii)         the signer is

not the person in the bidder's organization responsible for the decision as to

the prices being bid, but that the signer has been authorized to act as agent

certifying that the persons determining the prices have not participated, and

will not participate, in any action contrary to subsection (c)(6)(A), and as

the bidder's agent shall so certify. The signer shall also certify that the

signer has not participated, and will not participate, in any action contrary

to subsection (c)(6)(A).

d)         If the loan

applicant wishes to amend any part of the bidding documents (including drawings

and specifications) during the period when bids are being prepared, the loan

applicant shall send written addenda to all firms who have obtained bidding

documents in time to be considered prior to the bid opening. When appropriate,

the time period for submission of bids shall be extended. All addenda to the

bidding documents shall be submitted to the Agency for approval.

e)         Awarding the

Contract

1)         After bids are

opened, they shall be evaluated by the loan applicant in

accordance with

the methods and criteria set out in the bidding documents

me to be considered prior to the bid opening. When appropriate,

the time period for submission of bids shall be extended. All addenda to the

bidding documents shall be submitted to the Agency for approval.

e)         Awarding the

Contract

1)         After bids are

opened, they shall be evaluated by the loan applicant in

accordance with

the methods and criteria set out in the bidding documents.

2)         The loan

applicant shall submit a bid evaluation to the Agency that contains the

following:

A)        a copy of the

newspaper ad and the certificate of publication or equivalent;

B)        the bid

tabulations;

C)        any addenda

issued by the loan applicant, if applicable;

D)        an analysis of

the bids and recommendations for the award of the bids;

E)        a copy of the

loan applicant's notice of intent to award;

F)         selected bidder's

proposal and bid bond or cashier's check for not less than 5% of the bid

amount;

G)        a summary of the

evidence that the selected bidder has met the disadvantaged business enterprise

requirements of 40 CFR 33;

H)        a copy of the

selected bidder's certification regarding the use of American iron and steel

products;

I)         a copy of the

selected bidder's certification regarding the compliance with the BABA Act;

3)         The loan

applicant may reserve the right to reject all bids if it has documented sound

business reasons. Unless all bids are rejected, award shall be made to the low,

responsive, responsible bidder after the Agency issues the loan agreement or

provides other written permission; and

4)         If the award is

intended to be made to a firm that did not submit the lowest bid, prior to any

award the loan applicant shall submit to the Agency a written statement

explaining why each lower bidder was deemed not responsive or not responsible

all be made to the low,

responsive, responsible bidder after the Agency issues the loan agreement or

provides other written permission; and

4)         If the award is

intended to be made to a firm that did not submit the lowest bid, prior to any

award the loan applicant shall submit to the Agency a written statement

explaining why each lower bidder was deemed not responsive or not responsible.

f)         Each

construction contract shall include the following provisions:

1)         Audit;

Access to Records

A)        The

contractor shall maintain books, records, documents, and other evidence

directly pertinent to performance on loan work in accordance with generally accepted

accounting principles.  The contractor shall also maintain the financial

information and data used by the contractor in the preparation or support of

any cost submissions required under Section 663.420(b)(2) and a copy of the

cost summary submitted to the owner.  The Illinois Auditor General, the owner,

the Agency, or any of their authorized representatives shall have access to the

books, records, papers, documents, and other evidence for purposes of

inspection, audit, examination, excerpts, transcriptions, and copying.  The

contractor shall provide facilities for access and inspection.

B)        For a

formally advertised, competitively awarded, fixed price contract, the

contractor shall include access to records as required by subsection (a)(1)(A)

for all negotiated change orders and contract amendments in excess of $25,000

that affect the contract price.  In the case of all other prime contracts, the

contractor shall agree to include access to records required by subsection

For a

formally advertised, competitively awarded, fixed price contract, the

contractor shall include access to records as required by subsection (a)(1)(A)

for all negotiated change orders and contract amendments in excess of $25,000

that affect the contract price.  In the case of all other prime contracts, the

contractor shall agree to include access to records required by subsection

(a)(1)(A) in all contracts and all tier subcontracts or change orders in excess

of $25,000 that are directly related to project performance.

C)        Audits

shall be in accordance with U.S. generally accepted auditing standards.

D)        The

contractor shall agree to the disclosure of all information and reports

resulting from access to records required by subsection (a)(1)(A). When the

audit concerns the contractor, the auditing agency shall afford the contractor

an opportunity for an audit exit conference and an opportunity to comment on

the pertinent portions of the draft audit report. The final audit report shall

include the written comments, if any, of the audited parties.

E)        The

records required by subsection (a)(1)(A) shall be maintained and made available

during performance of the work under the loan agreement and for 3 years after

the date of final loan audit.  In addition, records that relate to any dispute

or litigation or the settlement of claims arising out of any performance, costs,

or items to which an audit exception has been taken shall be maintained and

made available for 3 years after resolution of the dispute, appeal, litigation,

claim, or exception

of the work under the loan agreement and for 3 years after

the date of final loan audit.  In addition, records that relate to any dispute

or litigation or the settlement of claims arising out of any performance, costs,

or items to which an audit exception has been taken shall be maintained and

made available for 3 years after resolution of the dispute, appeal, litigation,

claim, or exception.

F)         The

right of access will generally be exercised with respect to financial records

under:

i)          negotiated prime

contracts;

ii)         negotiated

change orders or contract amendments in excess of $25,000 affecting the price of

any formally advertised, competitively awarded, fixed price contract; and

iii)        subcontracts

or purchase orders under any contract other than a formally advertised,

competitively awarded, fixed price contract.

G)        The

right of access will generally not be exercised with respect to a prime

contract, subcontract, or purchase order awarded after effective price

competition.  In any event, the right of access shall be exercised under any

type of contract or subcontract:

i)          with

respect to records pertaining directly to contract performance, excluding any

financial records of the contractor; and

ii)         if

there is any indication that fraud, gross abuse, or corrupt practices may be

involved in the award or performance of the contract or subcontract.

2)         Covenant

Against Contingent Fees

The contractor shall warrant that

no person or selling agency has been employed or retained to solicit or secure

the contract upon an agreement or understanding for a commission, percentage,

brokerage, or contingent fee. For breach or violation of this warranty, the

owner shall have the right to annul the contract without liability or in its

discretion to deduct from the contract price or consideration, or otherwise

recover, the full amount of the commission, percentage, brokerage, or

contingent fee

re

the contract upon an agreement or understanding for a commission, percentage,

brokerage, or contingent fee. For breach or violation of this warranty, the

owner shall have the right to annul the contract without liability or in its

discretion to deduct from the contract price or consideration, or otherwise

recover, the full amount of the commission, percentage, brokerage, or

contingent fee.

3)         Wage

Provisions

The contractor shall pay

prevailing wages in accordance with the Davis-Bacon Act (40 U.S.C. 3141 through

3148) as defined by the US Department of Labor.

4)         Disadvantaged

Business Enterprise Requirements

The contractor shall provide

evidence that the contractor has taken affirmative steps in accordance with 40

CFR 33 to assure that disadvantaged business enterprises are used when possible

as sources of supplies, equipment, construction, and services, consistent with

the provisions of the Agency's Operating Agreement with USEPA.

5)         Debarment

and Suspension Provisions

The contract shall require the

successful bidders to submit a Certification Regarding Debarment, Suspension

and Other Responsibility Matters (EPA Form 5700-49) showing compliance with

federal Executive Order 12549.

6)         Nonsegregated

Facilities Provisions

The contractor shall be required

to submit a certification of nonsegregated facilities as prescribed by 18 U.S.C.

1001.

7)         American

Iron and Steel

If applicable, the contractor

shall be required to use American iron and steel pursuant to Sec. 1452(a)(4) of

the federal Safe Drinking Water Act (42 U.S.C. 300j-12(a)(4)).

8)         Build

America Buy America

If applicable, the contractor

shall be required to comply with the requirements of the BABA Act.

9)         A

clause that provides:

"No contractor or

subcontractor shall discriminate on the basis of race, color, national origin,

or sex in the performance of this contract

to Sec. 1452(a)(4) of

the federal Safe Drinking Water Act (42 U.S.C. 300j-12(a)(4)).

8)         Build

America Buy America

If applicable, the contractor

shall be required to comply with the requirements of the BABA Act.

9)         A

clause that provides:

"No contractor or

subcontractor shall discriminate on the basis of race, color, national origin,

or sex in the performance of this contract. The contractor or subcontractor

shall carry out applicable requirements of 40 CFR 33 in the award and

administration of contracts awarded under the PWSLP. Failure by the contractor

or subcontractor to carry out these requirements is a material breach of this

contract, which may result in the termination of this contract or other legally

available remedies."

g)         Subcontracts

Under Construction Contracts

The award or execution of all

subcontracts by a prime contractor and the procurement and negotiation

procedures used by the prime contractor shall comply with:

1)         All

applicable provisions of federal, State, and local law;

2)         All

provisions of this Part regarding fraud and other unlawful or corrupt

practices;

3)         All

provisions of this Part with respect to access to facilities, records, and

audit of records; and

4)         All

provisions of subsection (f)(5) that require a Certification Regarding

Debarment, Suspension, and Other Responsibility Matters (EPA Form 5700-49)

showing compliance with any controlling federal Executive Orders.

h)         Contractor

Bankruptcy

In the event of a contractor

bankruptcy, the loan recipient shall notify the Agency and shall keep the

Agency advised of any negotiations with the bonding company, including any

proposed settlement.  The Agency may participate in those negotiations and will

advise the loan recipient of the impact of any proposed settlement to the loan

agreement

cutive Orders.

h)         Contractor

Bankruptcy

In the event of a contractor

bankruptcy, the loan recipient shall notify the Agency and shall keep the

Agency advised of any negotiations with the bonding company, including any

proposed settlement.  The Agency may participate in those negotiations and will

advise the loan recipient of the impact of any proposed settlement to the loan

agreement.  The loan recipient shall be responsible for assuring that every

appropriate procedure and incidental legal requirement is observed in

advertising for bids and re-awarding a construction contract.

i)          Every

contract entered into by the loan recipient for construction work, and every

subagreement, shall provide Agency representatives with access to the work.  The

contractor or subcontractor shall provide facilities for the access and

inspection.