Sacramento Municipal Code Art. VII Debarment of Contractors

This article applies to all contracts let by the city, including purchases and contracts for goods, nonprofessional services, public projects, and professional services. (Ord. 2024-0010 § 4)

Notwithstanding any other provision of this code:

A. The city manager, or a hearing examiner on appeal, may debar any person from submitting a bid or proposal, or being awarded, any contract with the city, or from being a subcontractor or supplier at any tier of a contract, in accordance with the procedures established by this article.

B. During the time period that the debarment pursuant to this article of any person is in effect, the city shall not accept bids or proposals from, enter into contracts with, or allow performance of subcontracts or supply contracts by, that person, in accordance with the procedures established by this article.

C. During the time period that the debarment of any person by a state or federal agency is in effect, the city shall not, in conjunction with any city project receiving funds from the state or federal agency, accept bids or proposals from, contract with, or allow performance of subcontracts or supply contracts by, that person, whether or not that person has been debarred pursuant to this article. (Ord. 2024-0010 § 4)

Whenever notice is required to be given under this article, it is effective on the day the notice is either personally delivered or deposited in the U.S. mail, first class postage prepaid and addressed to the last known address of the person to be notified. (Ord. 2024-0010 § 4)

Debarment may be imposed on a person by the city manager, or a hearing examiner on appeal, in accordance with the procedures established by this article on any of the following grounds:

A. Commission by the person of any act of:

1. Fraud, bribery, collusion, or conspiracy;

2. Bid rigging, price fixing, or any other act in violation of any federal, state, or local law in connection with the bidding upon, award or performance of any contract; or

3. Embezzlement, theft, forgery, falsification or fabrication of records, or perjury.

B. Submission by the person of a bid, proposal, or other document pertaining to or required by a city contract, or pertaining to or required by any provision of this code, that is known by the person to be false or contain false information.

C. The person knowingly doing business with a debarred third person in performance of any city contract awarded after debarment of the third person.

D. More than one occurrence of substandard performance by the person on any city contract, including: (1) a material breach of the contract; (2) a failure to complete work required under the contract on time or within budget when the failure is attributable to the person's negligent or wrongful actions or inactions; (3) substandard quality of work; or (4) any negligent or wrongful failure to cooperate with the city such that timely, satisfactory completion of the work was jeopardized. The occurrences of substandard performance described herein may occur on the same contract or on different contracts.

E. One or more serious violation by the person, during the performance of any city contract, of any labor or safety statutes, regulations, or standards, including applicable local, state, or federal statutes, regulations, or standards governing prevailing wage, occupational safety and health, and nondiscrimination requirements.

F. One or more serious violation by the person of any law or regulation governing the handling, transfer, storage, or disposal of hazardous materials or hazardous waste.

G. One or more serious violation by the person of any law or regulation governing the handling, transfer, storage, or disposal of solid waste generated in connection with construction or demolition.

H. A violation by the person of any law or regulation governing conflict of interest.

I. The issuance to the person, within a two-year period, of three final administrative penalty orders for violating any section of chapter 12.20. Multiple administrative penalty orders issued for continuing violations occurring on the same calendar day is considered one administrative penalty order for purposes of this section. (Ord. 2024-0010 § 4)

A. The city manager, or a hearing examiner on appeal, may determine that grounds for debarment exist, as described in section 3.56.380. Written notice of proposed debarment must be provided within three years of the date of the events relied upon for the proposed debarment. The following are sufficient to determine that grounds for debarment exist:

1. The person has been convicted of a criminal charge for any act or omission described in section 3.56.380, whether entered upon a verdict or a plea, including a plea of no contest;

2. A final civil judgment arising out of any act or omission described in section 3.56.380 has been entered against the person;

3. A significant penalty or sanction, including monetary penalties and other sanctions, such as debarment, has been imposed on the person by a federal, state, or local agency for any act or omission described in section 3.56.380; or

4. The person has committed one or more acts or omissions described in section 3.56.380 as established by a preponderance of evidence in the record of facts and information presented to the city manager or a hearing examiner on appeal.

B. Conduct may be imputed to a person for whom debarment is being considered as follows:

1. An act or omission, as described in section 3.56.380, of any principal, may be imputed to the person when the conduct occurred in connection with the principal's performance of duties for or on behalf of the person, or with the person's knowledge, approval, or acquiescence.

2. An act or omission, as described in section 3.56.380, of a person may be imputed to any principal who participated in, knew of, or had reason to know of the person's conduct.

3. An act or omission, as described in section 3.56.380, of one person in a joint venture or similar arrangement may be imputed to other participants if the conduct occurred for or on behalf of the joint venture or similar arrangement or with the knowledge, approval, or acquiescence of the participants. Acceptance of the benefits derived from the conduct is evidence of the knowledge, approval, or acquiescence.

C. In determining whether to debar a person, and the duration of any debarment, the city manager or a hearing examiner may consider, in addition to any other relevant factors, the following:

1. The degree to which the person cooperated fully with local, state, or federal authorities during any investigation or any administrative or judicial proceeding that forms the grounds for debarment.

2. The degree to which the person has paid or has agreed to pay all criminal, civil, and administrative liability resulting from any of the acts or omissions set forth under section 3.56.380, including any investigative or administrative costs incurred by any public agency, and has made or has agreed to make full restitution for any damages incurred as a result of any of the acts or omissions.

3. Whether the person had effective standards of conduct and internal control systems in place at the time of any of the acts or omissions set forth in section 3.56.380 or had adopted the procedures before any investigation of the acts or omissions.

4. Whether the person brought any of the acts or omissions set forth in section 3.56.380 to the attention of the appropriate public agency or agencies in a timely manner.

5. Whether the person has fully investigated the circumstances surrounding any of the acts or omissions set forth in section 3.56.380 and, if so, has made the result of the investigation available to the city.

6. Whether the person has taken appropriate disciplinary action against the individuals responsible for any of the acts or omissions set forth in section 3.56.380.

7. Whether the person has implemented or agreed to implement remedial measures to prevent a recurrence of any of the acts or omissions set forth in section 3.56.380, including new or revised review and control procedures and ethics training programs, as well as any other measures identified by any public agency.

8. Whether the person has had adequate time to eliminate the circumstances within the organization that led to any of the acts or omissions set forth in section 3.56.380. (Ord. 2024-0010 § 4)

A. A debarment of a group, association, firm, corporation, partnership, company, or other entity under this article constitutes debarment of all of the entity's divisions and other organizational elements from all city contracts, unless the debarment decision is limited by its terms to one or more specifically-identified individuals, divisions, or other organizational elements.

B. The debarment of a person may include any existing affiliate of the person where the affiliate is specifically named and given notice of the proposed debarment and an opportunity to respond. The debarment automatically includes any successor-in-interest or any affiliate of the debarred person formed after the debarment.

C. Debarment of any person includes debarment of any business entity, whether or not the business entity was in existence at the time of the debarment, for which the debarred person acts as a principal during the debarment period. (Ord. 2024-0010 § 4)

A. The period of debarment must be commensurate with the seriousness of the grounds, as determined by the city manager, or by a hearing examiner on appeal. An initial period of debarment may not exceed three years.

B. Before the debarment period imposed under this article expires, the city manager may review the record of the evidence presented during the debarment proceedings, as well as any additional facts or information relevant to a review of the debarment. The city manager may extend the existing debarment, for successive additional periods of up to two years each, if the city manager determines that the extension is necessary to protect the public interest. If the city manager determines that debarment for an additional period is necessary, the city manager shall follow the procedures established by section 3.56.400 before imposing the extension.

C. Unless the city manager has extended the debarment pursuant to subsection B, the debarment automatically terminates upon expiration of the debarment period. (Ord. 2024-0010 § 4)

A. Before debarring any person under this article, the city manager shall mail by certified or registered mail, return receipt requested, or deliver by personal service a written notice of the proposed debarment to the person proposed to be debarred, hereinafter referred to as "respondent." The notice must contain the following:

1. Notice that a debarment is being considered;

2. The grounds for the proposed debarment, in terms sufficient to put the respondent on notice of the conduct or transactions upon which it is based;

3. The potential period of the debarment;

4. The city's procedures governing debarment; and

5. The address to which a request for a hearing or information and argument in opposition to the proposed debarment must be delivered or mailed.

B. Within 30 days after personal service or mailing of the notice of proposed debarment, the respondent or the respondent's representative may submit in writing a request for a hearing or information and argument in opposition to the proposed debarment. The written request or information and argument must also specify the address to which subsequent notices and other communications to the respondent should be mailed.

C. If the respondent requests a hearing in accordance with subsection B, the city manager shall, within 30 days after receipt of the request, schedule an informal hearing at which the respondent or the respondent's representative shall have a reasonable opportunity to provide information and argument, including the presentation and questioning of witnesses, to the city manager. The city manager shall mail the respondent, by certified or registered mail, return receipt requested, written notice of the time, date, and location of the hearing, which must be held no sooner than 10 days from the date of the notice of hearing.

D. The city manager's debarment decision shall be made within 30 days after expiration of the 30-day period specified in subsection B, or within 30 days after a hearing is held, whichever is later. If the city manager decides it is in the best interest of the city to impose debarment, the decision must be in writing, contain findings of fact, and specify the grounds for debarment based on the record of facts and information presented to the city manager.

E. A copy of the decision by the city manager shall be mailed to the respondent by certified or registered mail, return receipt requested, no later than five days after the decision is made. If the city manager decides to impose debarment, the decision must specify the period of debarment. Except in cases where the city manager's debarment decision is appealed in accordance with section 3.56.430, the period of debarment begins on the date the decision is mailed to the respondent. If the city manager's debarment decision is appealed in accordance with section 3.56.430, the period of debarment begins on the date that the hearing examiner makes a decision to uphold or modify the city manager's debarment decision, in accordance with section 3.56.430.

F. If the respondent fails to submit either a written request for a hearing or written information and argument in opposition to a proposed debarment within the 30 day period specified in subsection B, or if respondent fails to appear at the hearing, the decision of the city manager is final, and is not subject to appeal pursuant to section 3.56.430.

G. The city manager may reverse a decision to debar a person, or may reduce the scope or time period of debarment for any reason that obviates the need for the debarment or that indicates a shorter debarment period will adequately protect the public interest. Those reasons include, but are not limited to, the following:

1. Newly discovered material evidence;

2. Reversal of the conviction, civil judgment, or administrative penalty or sanction upon which the debarment was based;

3. Bona fide change in ownership or management; or

4. Elimination of other grounds for which the debarment was imposed.

The reversal or reduction in scope or time period of the debarment may be initiated by the city manager or by the debarred person upon a request submitted to the city manager. The debarred person's request must be in writing and supported by documentation. The debarred person shall provide any additional documentation requested by the city manager to review the request. The city manager shall notify the debarred person of the decision made upon any such request submitted by a debarred person within 30 days after receipt of the request or any supporting documentation. A debarred person may not submit such a request until a minimum of 12 months have elapsed after the period of debarment begins, and no more than one such request may be submitted during each successive 12-month period thereafter. (Ord. 2024-0010 § 4)

A. Any appeal of a decision of the city manager regarding a debarment or the period or scope of debarment imposed must be heard by a hearing examiner from a panel of hearing examiners designated for this purpose by resolution of the city council. A hearing examiner may not be a city employee at the time of the hearing.

B. The respondent or respondent's representative may appeal any decision made by the city manager regarding a debarment or the period or scope of debarment imposed, by delivery to the city clerk of a written notice of appeal no later than 30 calendar days after the date that notice of the city manager's decision is mailed to the respondent. The written notice of appeal must include a copy of the city manager's debarment decision and must comply with the requirements set forth in article I of chapter 1.24.

C. If a valid notice of appeal is timely filed, the city clerk shall establish the date of the hearing before the hearing examiner, and shall mail the respondent written notice of the hearing that specifies the location, time, and date of the hearing, which shall be held no sooner than 10 days from the date of the notice of hearing.

D. The hearing by the hearing examiner is a de novo hearing. The hearing examiner has no power to declare the provisions of this article unenforceable or unconstitutional, and the hearing examiner's decision must be based on the criteria specified in this article.

E. The proceedings at the hearing must be recorded. Either party may provide a certified shorthand reporter to maintain a record of the proceedings at the party's own expense. The hearing examiner may, upon request of either party, grant continuances for good cause shown, or upon his or her own motion. The hearing examiner shall administer the oath or affirmation. California Government Code section 11513, subdivisions (a), (b), and (c) apply to hearings under this section, except that relevant hearsay evidence may be sufficient in itself to support a finding if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs.

F. At the hearing, the city manager bears the burden of showing, by a preponderance of evidence in the record of facts and information presented to the city manager and the hearing examiner, that there exist grounds for debarment in accordance with the provisions of this article. The hearing examiner may take official notice, either before or after the close of the hearing, of any fact that may be judicially noticed by the courts of this state or that may appear in any of the official records of the city or any of its departments.

G. After the close of the hearing, the hearing examiner may uphold, reverse, or modify the city manager's debarment decision. Any decision upholding or modifying the city manager's decision must be in writing, contain findings of fact, specify the grounds for debarment based on the record of facts and information presented to the city manager and the hearing examiner, and specify any modifications to the city manager's decision. A copy of the hearing examiner's decision must be mailed to the respondent no later than five days after the decision is made.

H. The decision of the hearing examiner is final. Judicial review of any decision made by a hearing examiner pursuant to this section is governed by section 1094.5 of the California Code of Civil Procedure. (Ord. 2024-0010 § 4)

The city may require any person bidding or submitting a proposal on a city contract to certify under penalty of perjury, as a part of any bid or proposal submitted, whether the person, including any principal, affiliate, or predecessor-in-interest of the person:

A. Is currently under debarment, or has been under debarment at any time during the preceding three years, by any federal, state, or local agency; and

B. Has, at any time during the preceding three years, been convicted, been subject to a civil judgment, or been subject to a penalty or sanction by any federal, state, or local agency, for any act or omission described in section 3.56.380. (Ord. 2024-0010 § 4)

In the performance of any city contract, no person shall knowingly utilize the services of any person who is debarred under this chapter. No person shall knowingly use or list, in any bid or proposal for a city contract, any subcontractor or supplier who is debarred. Violation of this section may result in rejection of the bid or proposal, nonpayment by the city for work performed by the debarred person, annulment of award or termination of contract, issuance of a stop work order, debarment, or any other remedy provided by law. If a person lists a debarred subcontractor or supplier without knowledge of the debarment, the person will be allowed to substitute the debarred subcontractor or supplier listed in accordance with provisions of the contract governing contract changes. (Ord. 2024-0010 § 4)

The city shall not renew or extend the term of any existing contract with any person who is debarred in accordance with this chapter, unless the city council upon a two-thirds vote determines that the renewal or extension is in the best interest of the city. (Ord. 2024-0010 § 4)

A. The city manager shall maintain a list of all persons who are currently debarred by the city pursuant to this article and the dates of each debarment. The list must not include a person debarred by another local agency or the state or federal government unless the person also has been debarred under this article. The list must be filed with the city clerk. The city clerk shall make the list available for inspection and copying by any person during reasonable hours and upon reasonable notice.

B. The list of persons who are currently debarred shall be included in the solicitation for any city contract governed by this chapter. By including the list, bidders and proposers are deemed to be on notice as to the persons debarred under this article. (Ord. 2024-0010 § 4)