Construction of a border wall between the United States and Mexico has become a hotly debated political topic in recent years. The Federal Government has put forth a plan to fund and build a barrier along roughly half of the 2,000 miles of the United States and Mexico border in the states of California, Arizona, New Mexico and Texas. Such a barrier was in fact authorized over a decade ago by the Secure Fence Act of 2006 and some fencing was constructed pursuant to the Act.
But lawmakers in California have proposed a bill aimed at dissuading contractors from participating in the barrier project, arguing that such a wall or “barrier” will slow the movement of goods from California to Mexico (the Golden State’s largest export market) take away valuable jobs and threaten endangered species located in the area where the barrier is proposed to be built.
Senate Bill 30 California-Mexico Border: Federally Funded Infrastructure (“SB-30”) was introduced on December 5, 2016 by Democrat Senator Ricardo Lara, who also serves as the bill’s primary sponsor. SB-30 will add a chapter to California’s Government Code and amend a section of California’s Public Contract Code relating to infrastructure. SB-30 seeks to prevent the State of California from executing or renewing a contract with a company or individual that accepts a federal contract to provide goods or services related to a barrier project along California’s southern border.
The stated public policy serving as the basis of SB-30 is that such a wall or barrier would “do serious economic, social, and environmental harm to the state.” Specifically, SB-30 prohibits the State of California from not only contracting with these companies or individuals but also from renewing contracts with them once already existing contracts expire.
SB-30 would add Chapter 15 (commencing with Section 8900) to California’s Government Code, which would prohibit California from awarding or renewing a contract with a company that “is providing or has provided goods or services to the Federal Government for the construction of a federally funded wall, fence, or other barrier along California’s southern border…” beginning January 1, 2018.
SB-30 would also amend Section 1103 of the Public Contract Code to change the definition of “responsible bidder” to not include “a bidder who, at the time of the bid or proposal for a new contract or renewal of an existing contract, is providing or has provided goods or services to the Federal Government for the construction of a federally funded wall, fence, or other barrier along California’s southern border,” effective Jan. 1, 2018.
Currently, the law defines a “responsible bidder” for the purposes of public works contracts as a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity and experience to satisfactorily perform a public works contract.
SB-30’s practical purpose is to preclude contractors from doing business with the State of California if such contractors do business with the Federal Government on a border barrier across the 130 miles of the California and Mexico border, beginning January 1, 2018.
Whether SB-30 is successful in discouraging those contracts, many fear the practical effect of the bill will be to inadvertently result in identification of contractors and create some sort of “blacklist” of individuals and contractors who provide goods or services for the construction of the barrier. “Goods or services” is undefined in SB-30 and could therefore be interpreted broadly to include a large number of perhaps unintended people and companies.
Also, notes from the Senate’s analysis of SB-30 indicate that based on a plain reading of the bill, it is unclear if the ban would apply to all subcontractors, material suppliers, project designers, businesses that supply security technology along the border, construction equipment providers, entities that supply food and housing for workers, construction-site phone or internet service providers and others.
But if enacted, SB-30 should not have an impact on individuals or companies who have provided such goods or services to the Federal Government for the construction of the barrier on or before Dec. 31, 2017.
SB-30 applies to any “wall, fence, or other barrier,” but does not include a port of entry. In today’s age of advanced technology, this raises the question of whether drone monitoring, heat sensors or other electronic surveillance could be considered a “barrier.”
While the controversial project today is the proposed federal border wall project to be constructed on the border of California and Mexico, in the future it could be some other project that the elected officials in California oppose.
If it is, such contractors providing these services will be affected by SB-30 as well and be precluded from contracting with the State of California beginning Jan. 1, 2018. SB-30 passed by a majority vote of the Senate on June 1, 2017 and was read for the first time in the Assembly on June 15, 2017. It was later referred to the committee for Accountability and Administrative Review. There was a hearing set for July 12, 2017, but Senator Lara requested this hearing be canceled. No reason is listed for this request.
The passage of SB-30 will send a message to all businesses and individuals both inside and outside of California that participating in a controversial construction project could have a preclusive effect in the future, preventing them from the ability to contract with the State of California on other projects. This is true even though the construction of a wall, fence or barrier between California and Mexico is a legitimate federal construction project. A further concern is that SB-30 will establish precedent.
The passage of this law would establish that when a state disagrees with a federal construction project, it can simply enact laws precluding a particular industry from working on state projects if a class of contractors provides services to the disfavored federal project. This could, and in all likelihood would, eventually go beyond the construction and design industry.
While the controversial project today is the proposed federal border wall project to be constructed on the border of California and Mexico, in the future it could be some other project that the elected officials in California oppose.
The passage of SB-30 would be a large step away from historical competitive bidding on projects and would almost certainly create an atmosphere of uncertainty for contractors doing business in California, which may cause them to look elsewhere for work.
This would likely cause an increase in construction costs as the number of contractors willing to do business in California would decrease due to the risk, and therefore the cost to attract contractors willing to do the work would increase in light of the uncertainty about what major construction projects in California happen to be unpopular at a given time.
_____________________________________________________________
Michael J. Baker is a partner and member of the Commercial Litigation and Construction practice groups at the law firm Snell & Wilmer, while Jamie N. Furst is a member of the firm’s Commercial Litigation Practice Group.
No comments:
Post a Comment