a:\newslw.96 [4]Alan Lee MitchellStephen De'ak202000-07-26T20:37:00Z2006-07-01T22:26:00Z2006-07-01T22:26:00Z111986829 5616801111.8026 FURRER & SCOTT LLCConsider . . .VOL. 9, ISSUE 3 July, 2000Law OfficesFURRER & SCOTT LLC9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4540 -- (800) 334-8986 -- FAX: (503) 620-4315www.furrer-scott.comUPDATE ON NEW SUBCONTRACTOR LISTING REQUIREMENTSAs you should know, the 1999 Oregon Legislature added a new public contracting requirement that bidders must disclose certain first-tier subcontractors within four working hours of bid closing. (See Consider…, October, 1999).As many of you also know, this new law has created a great deal of comments and controversy. Some even say that rather than meeting its claimed purpose of reducing bid-shopping, it has actually increased bid-shopping. Whether or not this claim has any truth, there can be no doubt that the law has caused much discussion.One issue is whether the law applies to first-tier material-only suppliers. The statute refers to subcontractors “that will be furnishing labor or materials” in regard to the public improvement. To date, the Oregon Attorney General’s office has taken a position that this means the law does apply to first-tier material suppliers.Perhaps a bigger question is what happens if the law is not met. For example, what happens if a bidder fails to list a required first-tier subcontractor?In response to this issue, the Oregon state agencies are taking the position that the state may not declare the bid to be non-responsive. The agencies believe that this law is a reporting requirement only and that they have no obligation to “go beyond” the subcontractors listed on the disclosure form.Whether or not another bidder could pursue an action against the contractor who violated the law is a different question. This is an issue that will need to be decided by the courts or the legislature.NEW ODOT PREQUALIFICATION RULESThe Oregon Department of Transportation (“ODOT”) has recently instituted a new “prequalification” requirement for contractors wishing to bid on ODOT projects. While ODOT instituted this new system late last fall, it adopted permanent administrative rules only in January of this year. Other agencies are also now permitted to require prequalification.ODOT now requires that all bidders must be prequalified in order for a bid to be considered responsive. Non-responsive bids are, of course, rejected. Thus, a bid by a non-prequalified bidder would be rejected.Prequalification applies only to contractors submitting bids to the public body. It does not apply to subcontractors who submit bids to the prime contractor.Once a prequalification application is approved, it is valid only until the end of February in the following calendar year. There is a $100 annual application fee.The prequalification is only for the classes of work listed in the application. There is no “general” prequalification that allows a company to bid on every class of work designated by ODOT.A second aspect of the new prequalification rules is that ODOT will now evaluate contractors for their performance on each contract. The failure to pass the evaluation with certain scores can result with ODOT issuing a mandatory six-month suspension of the contractor’s prequalification.ARE YOU SURE YOU WANT TO FILE THAT CCB “SLOW PAY” CLAIM?In the October, 1999 edition of Consider… we noted the new legislation that allows the Oregon Construction Contractors Board (“CCB”) to refuse to register an applicant or re-register a contractor if the applicant failed to make timely payments under a public works contract. The legislation also allows contractors to file claims with the CCB against other contractors based upon these “slow pay” claims.The CCB has prepared a form for making these complaints. Use of this form is mandatory (you cannot use your own form). Copies of the form can be found at the CCB’s web site, HYPERLINK http://www.ccb.state.or.us www.ccb.state.or.us.A contractor who violates the “slow pay” requirements can be placed on a list of persons who are not qualified to bid on or hold public contracts. Since public bodies are now required to check this CCB list before awarding contracts, this creates a de facto debarment.Note, however, that merely making a claim against a contractor does not mean that the contractor is automatically placed on the CCB list. Listings will normally not occur until after the contractor has received notice of the claim and an opportunity for a hearing.The “catch” is that, if your claim is deemed to be false or in “bad faith,” then the same sanctions could be made against you rather than the contractor you made the claim against. Since the term “bad faith” is subject to interpretation, persons who want to file these types of claims should verify their facts carefully before submitting the claim to the CCB.CCB “HIGH POINTS” Once again, the CCB has issued new versions of its voluminous administrative rules. As of this date, the most current rules are dated July 1, 2000. As you may know, the 1999 Oregon Legislature made a number of changes concerning landscape contractors. The CCB has issued new administrative rules implementing these new changes. The new landscape contractor rules are dated February 1, 2000. When you use the Information Notice to Owner form, it must be the form published by the CCB. The most current version of this form is dated May 22, 2000. The failure to give the Information Notice to Owner at the correct time can result in the loss of any construction lien rights as well as in an administrative penalty from the CCB. As of July 1, 2000, you are no longer “registered” with the CCB; you are now “licensed” with the CCB. If you were already properly registered before July 1, then you should be “grandfathered” into the new licensing rules. If, however, your registration lapses for more than twelve months, then you may have to meet all the requirements as a new applicant for licensing.FIRM NEWS:MICHAEL J. SCOTT and ALAN L. MITCHELL presented a May 16, 2000 half-day seminar on Oregon construction lien and bond claims for the Eugene chapter of the National Electrical Contractors Association. MIKE and ALAN will present two more half-day seminars for NECA; on September 14, 2000, they will speak on Oregon contract issues and on November 9, 2000, they will speak on Oregon credit and collection issues. Both seminars will be held in Eugene.DOUGLAS R. HOOKLAND and ALAN L. MITCHELL will speak at an August 30, 2000 seminar in Portland for Lorman Business Seminars entitled “Oregon Credit and Collection Issues.” The seminar will cover issues such as credit applications, non-litigation collection tools, alternative dispute resolution and post-judgment collection options. This is a new seminar topic for this office. If you would like a brochure about the seminar, please contact Shari M. Persen at Furrer & Scott LLC.DOUGLAS R. HOOKLAND will speak at a September 27, 2000 seminar in Portland for National Business Institute entitled “Mechanics’ Lien Law and Strategies in Oregon.” Mr. Hookland will be speaking with ARNOLD L. GRAY and THOMAS A. LARKIN of Stewart, Sokol & Gray, LLC. The seminar will cover issues such as construction contracts, the payment process, and preserving and enforcing construction lien rights. . If you would like a brochure about the seminar, please contact Shari M. Persen at Furrer & Scott LLC.This newsletter is published quarterly by the law firm of Furrer & Scott LLC for the benefit of its clients and friends and is intended to inform them about legal matters of interest. While this information is meant to be current, we do not promise or guarantee that the information is correct, complete or up-to-date. This information is not intended to and should not be considered to provide legal advice or create an attorney-client relationship. No action should be undertaken in reliance hereon without professional legal counsel.Alan L. Mitchell, Editor