Responsible Bidder Language

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About Responsible Bidder Language

Across the United States, public and private construction users are beginning to replace traditional low-bid procurement systems with alternatives that ensure quality and level the playing field.

Some construction users are adopting best-value and quality-contracting bidding procedures, while others are drafting legislation and regulation requiring contractors to pre-qualify before bidding.

The Building Trades Department and its affiliates have been working with a growing number of owners and construction users as they change the way construction services are procured.

Many municipalities are adopting responsible bidder ordinances. These ordinances typically require any contractor wishing to bid on public work to document

Contractors who do not pass these pre-qualifications can not bid on public work.

Rather than trying to chase down poor performing contractors after the fact, these ordinances check that all contractors are in compliance and have a good work performance.

Quick Overview

  • Compliance with prevailing wage laws
  • Provide health insurance for all their employees
  • Affliliated with a state-certified apprenticeship program
  • Classify workers as employees, not independent contractors
  • Pay the appropriate workers compensation insurance for their employees
  • Comply with local residency and minority participation requirements.

Why have responsible bidder language?

Responsible bidder language protects the municipality from shoddy work and unscrupulous contractors who bid low, bill high and cheat to compete.

More and more public and private construction users are demanding proof of compliance with federal and state laws, researching past performance, and assessing training, skills, productivity and other intangibles. This type of language promotes high quality, highly trained workforce and levels the playing field for all bidders.

The term “responsible bidder” for construction contracts means a bidder who meets all applicable criteria and submits evidence of such compliance.

Critical elements to assess when choosing a contractor

Does the contractor pay a living wage to its employees?

Does the contractor pay medical benefits for its employees?

Does the contractor promise a workforce skilled in new materials, procedures and standards?

Does the contractor bring jobs in safely, on time and within budget with a reputation for honesty and integrity?

Does the contractor follow all state and federal laws such as the National Labor Relations Act, Federal Labor Standards Act, Prevailing Wage Laws and anti-discrimination laws?

Doesn’t the Prevailing Wage clause result in higher construction costs?

The Prevailing Wage Act is an Illinois state law that applies to all public construction projects regardless of whether or not the awarding agency has an RBO – the RBO simply reiterates the law, assuring that the contractor hired will follow the law.

But the answer to this question is no – studies have shown that paying prevailing wages does not increase the overall construction cost of a given project.

“Data from numerous state-level studies on public construction costs show no evidence that lower prevailing wages and benefits reduced construction costs charged by contractors performing public works. Lower prevailing wage/minimum wages paid to workers have no measurable impact on public construction costs partly because wage declines lead to offsetting declines in productivity. Further, real savings in public construction costs are more likely to come from investments in worker training, which can make workers more productive, thereby lowering costs without cutting wages.”

– Professor Robert Bruno, Director of Labor Studies, Associate Professor of Labor and Industrial Relations – University of Illinois

Will fewer contractors bid on our work if we have an RBO?

Very few contractors will opt to not bid on work covered under an RBO, and the ones that do, are usually not ones you would want on the project anyway. Lawabiding contractors that adhere to Illinois contracting laws and desire a fair, competitive bidding landscape will welcome the presence of an RBO.

What types of Public Bodies can pass RBO’s?

We’re aware of none that can’t! Any public taxing body should adopt an RBO, from the State of Illinois, down to the smallest Soil & Water Conservation District.

Responsible Bidder Requirements


Public Act 097-0369

HB1375 Enrolled

LRB097 09020 PJG 49154 b

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Procurement Code is amended by changing Section 30-22 as follows:

(30 ILCS 500/30-22)

Sec. 30-22. Construction contracts; responsible bidder requirements. To be considered a responsible bidder on a construction contract for purposes of this Code, a bidder must comply with all of the following requirements and must present satisfactory evidence of that compliance to the appropriate construction agency:

The bidder must comply with all applicable laws concerning the bidder’s entitlement to conduct business in Illinois.

The bidder must comply with all applicable provisions of the Prevailing Wage Act.


The bidder must comply with Subchapter VI (“Equal Employment Opportunities”) of Chapter 21 of Title 42 of the United States Code (42 U.S.C. 2000e and following) and with Federal Executive Order No. 11246 as amended by Executive Order No. 11375.

The bidder must have a valid Federal EmployerIdentification Number or, if an individual, a valid Social Security Number

The bidder must have a valid certificate of insurance showing the following coverages: general liability, professional liability, product liability, workers’ compensation, completed operations, hazardous occupation, and automobile.

The bidder and all bidder’s subcontractors must participate in applicable apprenticeship and training programs approved by and registered with the United States Department of Labor’s Bureau of Apprenticeship and Training.

For contracts with the Illinois Power Agency, the Director of the Illinois Power Agency may establish additional requirements for responsible bidders. These additional requirements, if established, shall be set forth together with the other criteria contained in the invitation for bids, and shall appear in the appropriate volume of the Illinois Procurement Bulletin.

The bidder must submit a signed affidavit stating that the bidder will maintain an Illinois office as the primary place of employment for persons employed in the construction authorized by the contract. The provisions of this Section shall not apply to federally funded construction projects if such application would
jeopardize the receipt or use of federal funds in support of such a project. (Source: P.A. 95-481, eff. 8-28-07.)

A Responsible Bidder Ordinance is a Protection Plan for Taxpayers

Responsible Bidder Ordinance (RBO) is a policy that sets minimal requirements for all contractors bidding on publicly-funded projects in a given political jurisdiction. Typically, these requirements include proof of participation in an apprenticeship training program, proof of certificates of insurance, prequalification surveys, and compliance with all local, state, and federal laws. RBOs are a qualifications-based approach to construction contracting for public entities. The policies are a kind of “insurance policy” for taxpayers. The local ordinances establish clear, objective standards that contractors must meet in order to win bids and construct projects funded using taxpayer dollars.

In a true free-market setting, project owners could choose from any bidding procedure, from absolute low bids with fixed specifications to design-build, negotiated price, and time-and-materials procedures. However, nearly all governments accept the lowest bidder based on “hard” low bids. This type of public procurement puts downward pressure on contractors to reduce quality, cut wages, and avoid contributing to employee health insurance plans, among other items. Reputation, past performance, workforce quality, and even final costs are not emphasized in the low-bid model. As a result, this race-to-the-bottom process tends to result in imperfect design plans, cost overruns, change orders, added safety risks, and low-quality infrastructure.

A Responsible Bidder Ordinance is an acknowledgement that governments should consider benefits in addition to costs. RBOs protect taxpayers by setting minimum standards, ensuring that cheating contractors do not win bids, and awarding projects to the lowest responsible and responsive bidder. It is a qualifications-based approach that works within the low-bid system to provide the highest possible quality at the lowest possible cost. Thus, the purpose of the over-200 Responsible Bidder Ordinances that have passed and become law across the United States is to ensure that local governments hire only professional, competent contractors that provide the highest-quality work to complete taxpayer-funded projects safely, on time, and on budget.

The most authoritative research on RBOs comes from school districts in Ohio. A peer-reviewed, academic study investigated the bid costs of over 300 elementary schools from 1997 to 2008 and found that responsible contracting policies “exert no discernible statistical impact on construction bid costs” after controlling for geographic location. Thus, there is no evidence that RBO provisions raise construction costs. The study provides evidence that adopting RBOs “may be an effective way to improve employment conditions and living standards of construction workers without significantly raising costs for taxpayers.”

RBOs ensure that reputable contractors with proven track records complete jobs efficiently and within budget– without the need for additional re-construction later on. Contractors with workplace law violations are more than five times as likely to have a low performance rating as contractors with a clean record of workplace law compliance. A low performance rating indicates that a contractor is costly to a city. By weeding out cut-rate contractors, RBOs encourage successful project delivery and ensure that taxpayers get the quality they pay for. In fact, case studies from across the country have found that RBOs promote higher quality and more reliable services, increased competition among responsible contractors, and reduced back-end reconstruction and litigation costs. In addition, evidence suggests that 98% of construction owners using qualifications-based procurement models– like those in RBOs– report to being satisfied with project quality.

Responsible Bidder Ordinances ultimately drive economic development. RBOs increase the likelihood that local contractors will win bids, keeping tax dollars in the community and supporting the local economy through increased consumer demand. RBOs also ensure that infrastructure projects are completed right, on-time, the first time at high levels of quality. High-quality infrastructure ensures that schools are safe, bridges are durable, and transportation systems are able to efficiently transport goods and people to the global marketplace. Responsible Bidder Ordinances are the best value for taxpayers.

View this article as a Policy Memo: ILEPI Policy Memo – RBOs Are Taxpayer Protection Plans

Read the Full PDF

Read the full Responsible Bidder Language PDF