San Diego Municipal Code Div. 8 Debarment

(“Budget Estimate” added 1–22–1952 by O–5046 N.S.) (Retitled to “Debarment” on 4–15–1996 by O–18283 N.S.)

(a) In order to promote integrity in the City’s contracting processes and to protect the public interest, the City shall only do business with responsible bidders and contractors.

(b) This Division sets forth the grounds for debarment and suspension.
(“Statement of Purpose” repealed and “Statement of Purpose” added 9–3–2002 by
O–19093 N.S.)
(“Retitled from “Statement of Purpose” to “Purpose and Intent” and amended
8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

All defined terms in this Division appear in italics. For purposes of this Division:

Adequate evidence means information sufficient to support the reasonable belief that
a particular act or omission has occurred.

Affiliate means:

(a) the assignee, successor, subsidiary of, or parent company, of another person;
or,

(b) a controlling stockholder of a person; or,

(c) a person who has the same or similar management of the debarred corporate
or other legal entity; or,

(d) a person who directly or indirectly controls, or has the power to control,
another person, or is directly or indirectly controlled by another person.
Indicia of control include interlocking management or ownership, identity of
interests among relatives, shared facilities and equipment, and common use of
employees; or,

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(e) a business entity organized following the debarment, suspension, or proposed
debarment of a person which has the same or similar management, ownership
or principal employees as the bidder or contractor that was debarred,
suspended or proposed for debarment, or the debarred person or the business
entity created after the debarment, suspension, or proposed debarment
operates in a manner designed to evade the application of this Division or to
defeat the purpose of this Division.

Bidder means a person who submits a bid, proposal, or other document to the City
seeking award of a contract. The term bidder does not include a subcontractor.

Contract means any written agreement between the City and a person for public
works, goods, services, franchise, or consultant services.

Contractor means a person who has contracted with the City to provide public works,
goods, services, franchise, or consultant services for or on behalf of the City. The
term contractor includes a subcontractor, vendor, franchisee, consultant, or any of
their respective officers, directors, shareholders, partners, managers, employees, or
other individuals associated with the contractor, subcontractor, consultant, or vendor.

Controlling stockholder means a stockholder who:

(a) owns more than 25% of the voting stock of a corporation; or,

(b) notwithstanding the number of shares that the stockholder owns, has the power to direct or control the direction of the management or policies of a corporation.

Debar or Debarment means an action taken by the City which results in a bidder or contractor being prohibited from any of the following: bidding or proposing on a contract; being awarded a contract; or performing work on a contract for a defined period of time. A bidder or contractor subject to such prohibition is debarred.

Debarment Hearing Board means a board established by the City Manager to hold hearings, to take evidence, and to make debarment determinations for the City.

Department means a City department acting through the department director or designee.

Final Performance Evaluation means a City-issued final evaluation of a contractor’s overall performance which is generally issued subsequent to completion of performance on the contract.

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Management means the officers, partners, owners, foremen, or other individuals
responsible for a corporate or other legal entity’s financial and operational policies
and practices.

Person has the same meaning as that in San Diego Municipal Code section 11.0210.
In addition, if a person is a corporate or other legal entity, it includes individuals who
constitute the person’s management. It also includes any individual or other legal
entity that

(a) Directly or indirectly (e.g. through an affiliate), submits offers for or is
awarded, or reasonably may be expected to submit offers for or be awarded, a
contract, or a subcontract under a contract; or

(b) conducts business, or reasonably may be expected to conduct business, with
the City as an agent or representative of another person.

Preponderance of the evidence means proof by information that, compared with that
opposing it, leads to the conclusion that the fact at issue is more probably true than
not.

Prime contractor means a person who enters a contract directly with the City.

Relative means:

(a) an individual related by consanguinity within the second degree as determined
by the common law; or,

(b) a spouse; or,

(c) an individual related to a spouse within the second degree as determined by
the common law; or,

(d) an individual in an adoptive relationship within the second degree as
determined by the common law; or

(e) any individual considered to be “family” in commonly understood terms of the word.

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Subcontractor means:

(a) a person who contracts directly with a prime contractor but not directly with
the City; or,

(b) any person under contract with a prime contractor or another subcontractor to
provide any service, materials, labor or otherwise perform on a contract.

Suspend or Suspension means the debarment of a bidder or contractor for a
temporary period of time pending the completion of an investigation and any
proceedings before a Debarment Hearing Board or independent hearing officer and
any appeals therefrom.
(“Definitions” repealed and “Definitions” added 9–3–2002 by O–19093 N.S.)
(Amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) This Division establishes procedures for determining whether a bidder or contractor is to be debarred, suspended, or both.

(b) This Division sets forth the grounds for debarment and suspension.

(c) The City Manager shall adopt procedures and regulations to implement this
Division, including procedures for the conduct of debarment hearings,
suspension meetings, and appeals of final performance evaluations.
(“Debarment Procedures for Procurement and Public Works Contracts” repealed;
“Scope of Division” added 9–3–2002 by O–19093 N.S.)
(Amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)
(Amended 6-4-2020 by O-21193 N.S.; effective 7-4-2020.)

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(a) Upon a recommendation from a department for debarment other than debarments set forth in sections 22.0808(a)(1) and 22.0808(a)(2), the City Manager shall appoint a Debarment Hearing Board to hear and determine whether a bidder or contractor should be debarred.

(b) The City Manager shall appoint three individuals to serve on each Debarment
Hearing Board. These individuals may be City employees, but shall not be
employees who have participated in the decision to recommend the
debarment, or employees who work in the department recommending
debarment.
(“Debarment Procedures for Materials, Supplies, Equipment, Insurance or Personal
Service Contracts” repealed; “Debarment Hearing Board to be Established” added
9–3–2002 by O–19093 N.S.)
(Retitled from “Debarment Hearing Board to be Established” to “Debarment
Hearing Board” and amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) The City Manager may suspend a bidder or contractor pending a debarment decision if the City Manager determines that adequate evidence of one of the grounds for debarment listed in section 22.0807 exists.

(b) The City Manager shall, upon 72 hours’ notice, provide a suspended bidder or
contractor with an opportunity to appeal the suspension at an informal
meeting.

(c) The City Manager shall notify the bidder or contractor of the suspension in
accordance with section 22.0806.

(d) The suspension is effective until a final debarment decision is issued.
(“General” repealed; “Suspension Once City Manager Decides to Recommend
Debarment” added 9–3–2002 by O–19093 N.S.)
(Retitled from “Suspension Once City Manager Decides to Recommend Debarment”
to “Suspension While Debarment Proceedings are Pending” and amended 8-10-2016
by O-20715 N.S.; effective 9-9-2016.)
(Amended 6-4-2020 by O-21193 N.S.; effective 7-4-2020.)

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(a) Notice shall be by any of the following methods:

(1) Personal delivery with service effective on the date of delivery; or,

(2) Certified mail, postage prepaid, return receipt requested.
Simultaneously, the same notice may be sent by regular mail. If a
notice that is sent by certified mail is returned unsigned, then service
shall be deemed effective five calendar days after mailing by regular
mail, provided the notice that was sent by regular mail is not returned;
or

(3) Regular mail, if not returned, with service effective five calendar days
after mailing; or,

(4) Publication. Service shall be deemed effective on the first date of
publication.

(b) Proof of delivery of notice shall be made by the certificate of any officer or
employee of the City or by declaration under penalty of perjury of any person
over the age of eighteen years. The proof of delivery shall show that delivery
was done in conformity with this Division.

(c) The failure of any person to receive any notice served in accordance with this
Division shall not affect the validity of any debarment proceedings.
(“List of Debarred Contractors” repealed; “Notices” added 9–3–2002 by
O-19093 N.S.)
(Retitled from “Notices” to “Notices Required Under This Division” and amended
8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) Grounds for Permanent Debarment

(1) A judgment, settlement, stipulation, plea agreement, final conviction,
including a plea of nolo contendere, or final unappealable civil
judgment, of any of the grounds listed below, constitutes grounds for
permanent debarment of the bidder or contractor who is subject to, or
the affiliate of, the bidder or contractor who is subject to the
judgment, settlement, stipulation, plea agreement, final conviction, or
final unappealable civil judgment:

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(A) under any local, state, or federal law or regulation for
embezzlement, theft, bid rigging, perjury, forgery, bribery,
falsification or destruction of records, conspiracy, collusion, or
receiving stolen property; or,

(B) any offense, action, or inaction indicating a lack of business
integrity or business honesty; or,

(C) for commission of a criminal offense arising out of obtaining
or attempting to obtain a public or private contract or
subcontract, or in the performance of such contract or
subcontract.

(2) A Fair Political Practices Commission enforcement order against a
bidder or contractor, either following a hearing or by stipulation,
imposing a penalty for a violation of California Government Code
sections 84300(c) or 84301, or a City of San Diego Ethics
Commission enforcement order against a bidder or contractor, either
following a hearing or by stipulation, imposing a penalty for a
violation of San Diego Municipal Code sections 27.2941, 27.2943, or
27.2944.

(3) The bidder or contractor violated San Diego Charter section 97.

(4) The bidder or contractor has engaged in any corrupt practice in
bidding, award, administration, or performance of a contract.

(5) The bidder or contractor operates in a manner designed to evade the
application of this Division or to defeat the purpose of this Division.

(6) The City has issued the bidder or contractor four or more final
performance evaluations with a rating of unsatisfactory in any four
year period.

(7) The person has committed an act or omission so serious or compelling in nature that it affects the present responsibility of the bidder or contractor to be awarded a contract or to participate as a subcontractor.

(b) Grounds for Debarment of Three Years or More

(1) The bidder or contractor willfully breaches a material term of a
contract.

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(2) Violation of a local, state, or federal law or regulation applicable to a
contract other than those identified in section 22.0807(a).

(3) The bidder or contractor used substandard materials, or has failed to
furnish or install materials in accordance with contract requirements,
even if the discovery of the defect is subsequent to acceptance of the
work and expiration of the warranty, if such defect is because of
intentionally deficient or grossly negligent performance of the
contract.

(4) The bidder or contractor submits materially false information to the
City pertaining to:

(A) the City’s evaluation of the bidder or contractor as a Minority
Business Enterprise, Woman Business Enterprise,
Disadvantaged Business Enterprise, Small Local Business
Enterprise, Emerging Local Business Enterprise, or Disabled
Veteran Business Enterprise;

(B) the City’s prequalification or eligibility process; or,

(C) the bidder’s or contractor’s statement of gross income
submitted under the City’s Minor Public Works Construction
Project Program.

(5) The bidder or contractor has not implemented its Equal Employment
Opportunity Plan, or taken corrective action after sufficient notice by
the City.

(6) The bidder or contractor has engaged in unlawful discrimination in
employment.

(7) The bidder or contractor has received three or more final performance
evaluations with a rating of unsatisfactory in any three year period.

(8) The bidder or contractor fails to pay prevailing or living wages, or fails to comply with the City of San Diego’s Earned Sick Leave and Minimum Wage Ordinance.

(9) The bidder or contractor violates a material provision of any
settlement of a debarment action.

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(c) Grounds for Debarment of Two Years

A bidder or contractor may be debarred for two years if a bidder or
contractor has received two or more final performance evaluations with a
rating of unsatisfactory in any two-year period.

(d) Grounds for Debarment of One Year

(1) The bidder or contractor made two or more claims of computational
or other error in a bid to the City within a two-year period.

(2) The bidder or contractor failed to timely submit bond, contract,
insurance documents, or any other documentation required as a
condition of award or performance of a contract.
(“Effect of Listing” repealed; “Grounds for Debarment” added 9–3–2002 by
O-19093 N.S.)
(Amended 1-24-2005 by O-19353.)
(Amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)
(Amended 6-4-2020 by O-21193 N.S.; effective 7-4-2020.)

(a) The Debarment Hearing Board shall hear all recommendations for debarment other than:

(1) permanent debarment, which are heard in accordance with section
22.0809; and

(2) debarment based on unsatisfactory final performance evaluations,
which are heard in accordance with section 22.0811.

(b) The Debarment Hearing Board shall determine by a preponderance of the
evidence whether a bidder or contractor is to be debarred and for what length
of time in accordance with this Division. The Debarment Hearing Board may
increase, decrease, or accept the department’s recommendation of the length
of debarment. The debarment hearing board may not impose less than the
length of debarment specified in section 22.0807(b) and (d).

(c) The Debarment Hearing Board’s decision on debarment must be in writing
and is final.

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(d) The failure of a person recommended for debarment to appear at a debarment
hearing after notice under section 22.0806 constitutes a waiver of that
person’s right to contest the debarment recommendation, and the
department’s recommendation shall become final.
(“Continuation of Existing Contracts” repealed; “Debarment Proceedings before the
Debarment Hearing Board or City Council” added 9–3–2002 by O–19093 N.S.)
(Retitled from “Debarment Proceedings before the Debarment Hearing Board or
City Council” to “Debarment Proceedings before a Debarment Hearing Board” and
amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) The City Manager shall appoint an independent hearing officer.

(b) An independent hearing officer shall hear all recommendations that include
one or more grounds for permanent debarment, except for debarments based
on unsatisfactory final performance evaluations, which are heard in
accordance with section 22.0811.

(c) The independent hearing officer shall determine by a preponderance of the
evidence whether a person is to be debarred and for what length of time, in
accordance with this Division. The independent hearing officer may increase,
decrease, or accept the department’s recommendation of the length of
debarment. The independent hearing officer may not reduce the length of a
permanent debarment if the hearing officer determines a violation identified
in section 22.0807(a) occurred, or impose less than the length of debarment
specified in section 22.0807(b) and (d).

(d) The independent hearing officer’s decision on debarment must be in writing
and is final.

(e) The failure of a person recommended for debarment to appear at a debarment
hearing after notice under section 22.0806 constitutes a waiver of that
person’s right to contest the debarment recommendation, and the
department’s recommendation shall become final.

(f) Notwithstanding (d) and (e), any decision by an independent hearing officer
that debars a bidder or contractor based on collusion is not final and shall be
referred to the City Council to permanently debar that bidder or contractor in
accordance with Charter section 97. The City Council may adopt or deny the
independent hearing officer’s finding of collusion. The City Council’s
decision is final.

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(“Scope of Debarment” repealed; “Debarment Hearing Board’s Authority to Debar; Debarment Hearing Board’s Decision Final” added 9–3–2002 by O–19093 N.S.) (Retitled from “Debarment Hearing Board’s Authority to Debar; Debarment Hearing Board’s Decision Final” to “Debarment Proceedings before an Independent Hearing Officer” and amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.) (Amended 6-4-2020 by O-21193 N.S.; effective 7-4-2020.)

(a) The fraudulent, criminal, or other serious misconduct of any officer, director, shareholder, partner, employee, or other individuals associated with a bidder or contractor may be imputed to the bidder or contractor when the conduct occurred in connection with the individual’s performance of duties for, or on behalf of, the bidder or contractor, or with the bidder’s or contractor’s knowledge, approval, or acquiescence. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.

(b) The fraudulent, criminal, or other serious misconduct of a bidder or
contractor may be imputed to any officer, director, shareholder, partner,
employee, or other individual associated with the bidder or contractor who
participated in, knew of, or had reason to know of the bidder’s or contractor’s
conduct.

(c) The fraudulent, criminal, or other serious misconduct of one bidder or
contractor participating in a joint venture or similar arrangement may be
imputed to other participating bidders or contractors if the conduct occurred
for, on approval of, or acquiescence of these bidders or contractors.
Acceptance of the benefits derived from the conduct shall be evidence of such
knowledge, approval, or acquiescence.
(“Appeals to City Council from Certain Decisions of Debarment Hearing Board”
added 9-3-2002 by O-19093 N.S.)
(Retitled from “Appeals to City Council from Certain Decisions of Debarment
Hearing Board” to “Imputation of Knowledge and Conduct” and amended
8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

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(a) A bidder or contractor may appeal a final performance evaluation with a rating of unsatisfactory on a public works contract or an architectural or engineering consultant contract to the City Engineer.

(b) A bidder or contractor may appeal a final performance evaluation with a
rating of unsatisfactory on a goods, services, or non-engineering, non-
architectural consultant contract to the Purchasing Agent.

(c) A bidder or contractor must submit an appeal in writing to the City Engineer
or Purchasing Agent within sixty days after notice of the final performance
evaluation pursuant to section 22.0806. Evaluations may not be appealed after
sixty days from the date of such notice.

(d) The decision of the City Engineer and the Purchasing Agent to uphold an
unsatisfactory performance evaluation or a debarment determination shall be
issued to the bidder or contractor in writing and are final.

(e) The City Manager may, upon recommendation of the City Engineer or
Purchasing Agent, debar a bidder or contractor who has received an
unsatisfactory final performance evaluation. This determination shall be in
writing and is final.
(“Submission of Argument on Appeal” added 9-3-2002 by O-19093 N.S.)
(Retitled from “Submission of Argument on Appeal” to “Appeal of Final
Performance Evaluations” and amended 8-10-2016 by O-20715 N.S.; effective
9-9-2016.)

California Code of Civil Procedure section 1094.6 governs judicial review of a final debarment decision. (“Standard of Proof” added 9-3-2002 by O-19093 N.S.) (Retitled from “Standard of Proof” to “Judicial Review” and amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) The City Manager shall create, maintain, and make publicly available a list of the names, addresses, and applicable debarment or suspension commencement and expiration dates of all debarred or suspended bidders and contractors.

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(b) The City Manager shall establish procedures to provide for the effective use
of the list to ensure that the City does not do business with bidders or
contractors who have been debarred or suspended.
(“Imputation of Knowledge and Conduct” added 9-3-2002 by O-19093 N.S.)
(Retitled from “Imputation of Knowledge and Conduct” to “Creation of List of
Debarred and Suspended Persons” and amended 8-10-2016 by O-20715 N.S.;
effective 9-9-2016.)

(a) Bidders and contractors who have been debarred or suspended are excluded from submitting bids, submitting responses to requests for proposal or qualifications, receiving contract awards, executing contracts, participating as a subcontractor, employee, agent or representative of another person contracting with the City.

(b) The City shall not accept, evaluate for award, or include any proposals,
quotations, bids, or offers from any debarred or suspended bidders and
contractors.

(c) The City shall not award or approve the award of a contract or execute a
contract under which a debarred or suspended bidder or contractor is
intended to participate as a subcontractor or material supplier.

(d) A prime contractor shall not employ, subcontract with, or purchase materials
or services from a debarred or suspended bidder or contractor.

(e) The City Manager shall report debarments under this Division to the
appropriate local, state, and federal agencies and authorities.
(“Judicial Review” added 9-3-2002 by O-19093 N.S.)
(Retitled from “Judicial Review” to “Effect of Debarment or Suspension” and
amended 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) Affiliates are debarred or suspended to the same extent as the debarred or suspended bidder or contractor.

(b) A bidder or contractor may appeal the City’s determination that the bidder or
contractor is an affiliate in writing to the City Manager within sixty days after
notice of the affiliate’s debarment pursuant to section 22.0806.

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(c) An affiliate may not appeal the debarment of any other bidder or contractor
underlying the affiliate’s debarment.

(d) The decision of the City Manager shall be issued to the bidder or contractor
who is an affiliate in writing and is final.
(“Effect of Debarment or Suspension on an Affiliate” added 8-10-2016 by
O-20715 N.S.; effective 9-9-2016.)

The City Manager may debar a bidder or contractor who has been debarred by another governmental agency until the term of the debarment by the other governmental agency expires. The City Manager’s decision under this section is final, and not subject to a hearing before the Debarment Hearing Board or an independent hearing officer. (“Effect of Debarment by Another Governmental Agency” added 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

Any bidder or contractor who enters into a contract, either directly as a prime contractor or indirectly as a subcontractor, during a period of suspension or debarment imposed upon that bidder or contractor, shall be liable to the City for increased costs incurred as a result of replacing the debarred or suspended bidder or contractor. (“Liability for Increased Costs” added 8-10-2016 by O-20715 N.S.; effective 9-9-2016.)

(a) The City may continue or terminate contracts or subcontracts it has with a debarred or suspended bidder or contractor that are in existence at the time the bidder or contractor is debarred or suspended.

(b) The City shall not renew or otherwise extend the duration of current
contracts, or consent to subcontracts, with debarred or suspended bidders or
contractors, unless the City Manager certifies in writing compelling reasons
for such renewal or extension.

(c) The City may contract with another person to perform public works, goods,
services, or consultant services that a debarred contractor had been hired to
perform.
(“Effect of Debarment or Suspension on Existing Contracts” added 8-10-2016 by
O-20715 N.S.; effective 9-9-2016.)

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(a) The City may offer a bidder or contractor the opportunity to execute a written agreement not to bid or submit proposals or perform any work on contracts in lieu of the City’s pursuing debarment or suspension.

(b) This agreement not to bid or submit proposals for contracts in lieu of the
City’s pursuing debarment or suspension does not constitute a debarment.
(“Creation of List of Debarred and Suspended Persons” added 9-3-2002 by
O-19093 N.S.)
(Renumbered from former Section 22.0820, retitled from “Creation of List of
Debarred and Suspended Persons” to “Agreement Not to Bid or Submit Proposals in
Lieu of Debarment or Suspension” and amended 8-10-2016 by O-20715 N.S.;
effective 9-9-2016.)

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Article 2: Administrative Code