Criminal Laws Affecting Local Contracts By JOHN W. McCREE Illinois Department of Transportation

The January, 1989 issue of the Municipal Review contains an article written by Mr. Thomas W. Kelty, Chief Counsel, Illinois Municipal League, concerning Public Act 85-1295. Mr. Kelty presented an excellent summary of this Act as it affects local agency contract administration procedures. The purpose of the following discussion is to focus on the Act as it impacts road and street contract procedures, and to point out one area in which the Department disagrees with Mr. Kelty.

Public Act 85-1295 defines several new crimes in the "Criminal Code of 1961" affecting local agency contracts. County superintendents of highways, municipal engineers, and consulting engineers were informed of this new Act by letter from this office in late September, 1988.

The new laws became effective on January 1, 1989, and require immediate changes to the contract administration procedures of all local agencies, Three significant areas impacted by this Act are:

— Changes to contracts
— Certifications relating to bid rigging/rotating
— Information disclosure

All change orders which authorize a net increase or decrease in the cost of a contract by $10,000 or more or in the time of completion by 30 days or more require a written determination supporting the change. Briefly, the local official signing the change order or amendment must determine that the circumstances necessitating the change were not reasonably foreseeable, were not within the contemplation of the original contract, or that the change is in the best interest of the local agency and is authorized by law.

Every bid submitted to a governmental agency, and every contract executed, must contain a certification by the contractor that the contractor is not barred from bidding as a result of violation of the bid rigging or bid rotating provisions of the Act. Bid rigging is an agreement among competitors, or would-be competitors, which is intended to result in an award of a contract. Similarly, bid rotating is an agreement among competitors by which, over a period of time, bids are submitted in a manner that intends contracts to be rotated, or distributed, among businesses which submit bids on a substantial number of the same contracts.

This certification requirement applies to contracts for construction, maintenance, materials and consultant services. Bureau of Local Roads and Streets forms used for these contracts are being revised to include the certification. Most of the revised forms will have been sent to all local agency engineers and consultants by the time this article is published.

Finally, the Act contains two sections which concern the disclosure of selected information during the bidding and consultant selection process. Section 33E-5 regulates the acquisition or disclosure of bidding information by a public official, and Section 33E-6 concerns the interference by a public official with contract submission and award.

Section 33E-5 is specifically designed to cover the intentional opening of sealed bids and the disclosure of information contained therein except on a prescribed formal basis. It is not a violation to release information to any individual if that information is generally available to the public. In the IDOT Division of Highways, for example, this section does not prohibit the release of the identity of those contractors who have taken out plans for projects on lettings advertised by the Department. A list of these contractors holding bidding and not for bidding documents is available to the public and is frequently updated during the advertising period.

Section 33E-6 has resulted in some confusion as to what information may be disclosed by public officials during the bidding period for a competitively bid contract. Mr. Kelty states in his article that, strictly interpreted, this section would prohibit the clarification of specifications through any means other than a pre-bid conference. The Department does not believe such an interpretation is correct. The Act does not on its face prohibit and was not intended to prohibit the disclosure of information in keeping with proper procurement policy and procedures.

It is to the advantage of local agencies to encourage prospective bidders to ask questions regarding plans, specifications and project proposals during the period of advertisement. Such inquiries should be answered in order to aid effective and knowledgeable bidding.

This is a new law and over time it will be the subject of court interpretation and, perhaps, legislative amendment. The advice and recommendations contained in this article and in recent policy letters are based upon the most current, best information available. Your State's Attorney is available to provide advice as well. Your district Local Roads and Streets Field Engineer may be contacted for advice in situations where there is doubt as to the proper course of action. •

Page 6 / Illinois Municipal Review / February 1989