Responsible contractor policies are designed to ensure taxpayer dollars are not spent on unqualified contractors performing work on public projects.
A responsible contractor policy helps ensure only qualified contractors, with a proven record of performing quality work, are selected for public construction projects. Responsible contracting policies require contractors to demonstrate that they offer high-quality employment and work.
These policies can lead to quality contractors bidding on construction projects by making sure public policy and public funding support goes only to contractors who meet these standards. In some regions, responsible contracting policies can dissuade poor performing contractors from bidding on public contracts.
Responsible contracting policies establish a basic set of qualifications that all firms must meet in order to bid on construction projects that receive public funding, require public approval or benefit from public investment. Such policies usually require contractors to abide by fair contracting processes and provide their employees with living wages and benefits.
Firms that meet responsible contractor standards are able to show they are fully licensed and bonded, pay employees Prevailing Wage, offer employees healthcare and other benefits (such as social security, unemployment insurance and Workers’ Compensation), have had no wage/hour violations for the past three consecutive years and provide OSHA 10-hour safety training. Other standards can include participation in a registered apprenticeship program, compliance with all other federal and state regulations and have no history of violating this policy in previous public contracts.
Most responsible contracting policies also require general contractors incorporate these same components into their agreements with subcontractors.
Responsible contracting can be achieved through ordinances or laws, regulation, or administrative policies.
Having a responsible contractor can benefit the workers and employers for many reasons, including making sure contractors do not misclassify their employees as independent contractors. A misclassified employee is unable to receive benefits such as social security, health insurance, retirement benefits, unemployment benefits and Workers’ Compensation.