Responsible Contractor Policies & Contractor Prequalification Laws
Responsible Contractor Policies and Contractor Prequalification (RCP/PQ) systems can be viewed as threshold, pass/fail qualification tests that determine whether a firm is eligible to bid work. Here, the low bid still rules -- but only if the prospective contractor first meets pre-established qualification standards.
The purpose of such laws is to protect and promote the interests of government contracting agencies and taxpayers by ensuring that contractors receiving public dollars are properly qualified in all respects and play by the rules as law-abiding companies. Highlights of these policies include the following:
- RCP/PQ tests, which have been successfully promoted by building unions in many areas, provide meaning and substance to the concept of lowest responsible bidder by imposing specific qualification and performance criteria in the bidding system.
- Areas examined in these systems can generally include anything relevant to project success, such as past performance, technical expertise, financial stability, bonding, licensing, management capabilities, equipment, safety and law compliance.
- Union-sponsored RCP laws usually also require contractors and subcontractors to prove they participate in registered apprenticeship programs, provide health insurance and meet other conditions relevant to craft employees, e.g., substance abuse programs. This approach helps ensure that contractors have safe, qualified manpower. It also promotes the community interests of the affected jurisdiction by creating bona fide training opportunities for local youth and ensuring adequate health coverage for locally employed construction workers.
- Responsible Contractor Policies are usually incorporated into public bidding systems by statutes and administrative regulations. These policies govern the qualification screening process on a project-by-project basis. If a contractor fails the test on one project, it can re-apply on the next project and pass the test if its deficiencies have been corrected.
- Prequalification Systems, on the other hand, authorize eligible contractors to bid projects for a particular public agency or program for a set period of time, typically one or two years. Generally, the authority to use prequalification must be specifically granted by statute.
For Additional Information on RCP/PQ Laws: Contact Bobby Crider, Bcrider@bctd.org and request a copy of BCTD 2003 Regional Conference Paper -- Legislative Initiatives for Building & Construction Trades Unions.