Chapter 3.09
RESPONSIBLE CONTRACTORS – CITY CONTRACTS SECTION

Sections:

3.09.010    False claims – Change orders – Covenant of good faith and fair dealing.

3.09.020    Declaration of irresponsibility.

3.09.030    Finding of noncompliance.

3.09.040    Disqualification.

3.09.050    City attorney prosecution.

3.09.060    Definitions.

3.09.010 FALSE CLAIMS – CHANGE ORDERS – COVENANT OF GOOD FAITH AND FAIR DEALING.

(1)    The covenant of good faith and fair dealing is contained in every city contract, and city contractors and subcontractors shall at all times deal in good faith with the city and shall submit claims, requests for equitable adjustments, requests for change orders, requests for contract modifications or requests of any kind seeking increased compensation on a city contract, only upon a good faith, honest evaluation of the matter which is the subject thereof. Failure to abide by the covenant of good faith and fair dealing shall subject the contractor or subcontractor to the penalties set forth in this chapter.

(2)    The act of submitting a false, untrue or misleading claim, including, but not limited to, falsification of payroll records, misclassification of employees on payroll records, nonpayment of prevailing wages where called for by the contract, request for equitable adjustment, request for contract modification, request for change order or request of any kind seeking increased compensation, is sufficient of itself to subject the contractor or subcontractor to the penalties set forth in this chapter, regardless of the city’s reliance on, or response to, the submission.

(Ord. 96-14 § 1 (part), 1996).

3.09.020 DECLARATION OF IRRESPONSIBILITY.

Where a city contractor or subcontractor has committed one of the offenses enumerated in Section 3.09.010, has failed to abide by the terms of the contractor’s or subcontractor’s contract, has failed to abide by the applicable prevailing wage laws called for by the contract or has failed to abide by other applicable laws governing labor standards or working conditions, has failed to comply with any of the provisions of Chapter 3.08 applicable to contractors or subcontractors, or has failed to comply with any of the other provisions of the Santa Cruz Municipal Code which expressly reference the sanctions provided for in this chapter, said contractor or subcontractor, pursuant to procedures outlined in Section 3.09.030, may be declared an irresponsible contractor. Any such declaration of irresponsibility shall also be binding on any firm or entity where the contractor’s majority owner also owns more than 50% of that firm or entity.

(Ord. 96-14 § 1 (part), 1996).

3.09.030 FINDING OF NONCOMPLIANCE.

If the city department head with responsibility for contract administration has cause to believe that any contractor or subcontractor has committed any of the acts or omissions set forth in Section 3.09.020, the department head shall conduct an investigation. If, upon investigation, the department head determines that such an act or omission has indeed occurred, the department head, after consultation with the city manager or city manager’s designee, shall make a written finding of noncompliance which shall include a declaration of irresponsibility. The written finding of noncompliance shall provide the contractor or subcontractor with an opportunity to appeal the finding of noncompliance to the city council in accordance with Chapter 1.16 of this code. If the city council concurs with the finding of noncompliance, it shall affirm that finding along with the declaration of irresponsibility contained therein. The decision of the city council shall be final.

(Ord. 96-14 § 1 (part), 1996).

3.09.040 DISQUALIFICATION.

Any contractor or subcontractor declared to be irresponsible pursuant to the provisions of this chapter shall be disqualified from eligibility for providing goods, labor, materials or services to the city for a period of five years, with a right of review and reconsideration by the city council after two years upon a showing of corrective action indicating violations are not likely to recur.

(Ord. 96-14 § 1 (part), 1996).

3.09.050 CITY ATTORNEY PROSECUTION.

If the city attorney has reasonable cause to believe that any contractor or subcontractor has knowingly committed any of the acts or omissions set forth in subsection (2) of Section 3.09.010, the city attorney will be authorized to prosecute said contractor or subcontractor for violating the provisions of this chapter. Any such violation shall constitute an infraction; however, where the contract in question causes a loss to the city in excess of $5,000.00, the city attorney shall have the discretion to prosecute said violation as a misdemeanor. All such violations shall be punishable in accordance with Chapter 1.08 of this code.

(Ord. 96-14 § 1 (part), 1996).

3.09.060 DEFINITIONS.

For purposes of this chapter, the following words and phrases shall have the following definitions:

(1)    “Contractor” means any person or entity, including consultants and consulting firms, which, pursuant to a written agreement or purchase order, provides goods, services, labor or materials to the city.

(2)    “Subcontractor” means any person or entity, including consultants and consulting firms, which, pursuant to an agreement or purchase order with a city contractor or another subcontractor, participates in the provision of goods, services, labor or materials to the city.

(3)    “The act of submitting a false, untrue or misleading claim” shall include, but not be limited to, any of the following acts:

(a)    Presenting or causing to be presented to an officer or employee of the city a false claim or request for payment or approval;

(b)    Making, using or causing to be made or used a false record or statement, including, but not limited to, submitting a false payroll record or false characterization of employee classification, in order to have a false claim paid or approved by the city;

(c)    Conspiring to defraud the city into honoring or paying a false claim;

(d)    Failing to disclose and correct an inadvertent submission of a false claim to the city upon subsequently discovering the falsity of the claim within a twelve-month period of time after discovery of the false claim;

(e)    Any other act or omission of the type referenced in subsection (2) of Section 3.09.010.

(4)    “Claim” means any request or demand for money, compensation or consideration made to any employee, officer, or agent of the city, or to any contractor, in conjunction with goods, services, labor or materials provided to the city pursuant to a city contract or purchase order.

(5)    “Knowingly” means that a city contractor or subcontractor, with respect to information germane to the contract, does any of the following:

(a)    Has actual knowledge of the information;

(b)    Acts in deliberate ignorance of the truth or falsity of the information;

(c)    Acts in reckless disregard of the truth or falsity of the information.

Proof of specific intent is not required and reliance on the claim by the city is also not required to demonstrate knowledge.

(Ord. 96-14 § 1 (part), 1996).