New Orleans Declares Felons Are Not Responsible Bidders

Who is a responsible bidder?  Is a firm owned by people convicted of a felony within the past five years responsible?

These were questions with which the New Orleans City Council and Mayor Ray Nagin recently wrestled - and they came to very different conclusions.

Council Approves Ordinance:  On March 11, 2010, the New Orleans City Council approved an ordinance that would ban the city from awarding contracts  to companies whose principals, members, or officers were convicted of a state or federal felony within the previous five years involving "embezzlement, theft of public funds, bribery, or falsification or destruction of public records."

Ordinance Vetoed:  Mayor Nagin vetoed the ordinance on March 25, 2010, claiming that it violated the City's charter and the state's public bid laws that requires award to the "lowest responsible bidder."  Nagin asserted that felony convictions are not listed in the charter or state law as being reasons for finding a bidder not responsible.  In fact, Nagin wrote in his veto message that "under Louisiana law, responsibility" refers to "likely contractor performance, not the conviction history of a contractor's principals, members and-or officers."

Council Overrides Veto: The City Council disagreed with the Mayor and on April 8, 2010, by a 6-0 vote overrode the Mayor's veto.  City Councilwoman Stacy Head, who introduced the measure to override the Mayor's veto, noted that the courts have consistently given government agencies "wide discretion to determine bidder responsibility."  Furthermore, the Louisiana Attorney General has statement that "responsibility refers to the character or quality of the bidder - whether it is an entity with which you are safe doing business."

More Information:  

• Councilmember Stacy Head news release
• Mayor Ray Nagin news release after veto
• Click here for an April 8,2010 article from www.nola.com.

State of Washington Issues:  In Washington State, bidder responsibility is also a topic of discussion with the February 2010 creation of a statewide Task Force by the Capital Projects Advisory Review Board (CPARB) to address concerns by contractors of how public agencies are using responsibility criteria.

Supplemental Bidder Responsibility Criteria:  CPARB has issued Suggested Guidelines for Bidder Responsibility that includes eleven Supplemental Bidder Responsibility Criteria that public agencies may choose to include in some or all of their public works bidding documents.  The closest one to the convicted felon issue is titled "Public Bidding Crime."  It states that "The Bidder shall not have been convicted of a crime involving bidding on a public works contract within five years from the bid submittal deadline."

The other Supplemental Bidder Responsibility Criteria include the following:

1. Delinquent State Taxes
2. Federal Debarment
3. MWBE Participation on Federally Funded Projects
4. Apprenticeship
5. Subcontractor Responsibility
6. Claims Against Retainage and Bonds
7. Completion of Similar Projects
8. Termination for Cause
9. Lawsuits
10. Prevailing Wages

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.