Ventura Municipal Code Ch. 6.700 Contractor Debarment

The city council of the city of San Buenaventura finds that the regulation of contracting with the city is a municipal affair authorized under Section 400 of the City Charter and the California Constitution. Contracts with persons who fail to deal with the city in good faith compromise the integrity of the contracting process and result in the improper expenditure of public funds. The city intends to do business only with responsible persons, and by enacting this chapter, it is the purpose and intent of the council to establish standards of responsibility, integrity and trustworthiness for all persons who do business with the city of San Buenaventura, and to set forth procedures for determining in advance of submittal of bids or proposals on city contracts whether a contractor has demonstrated the requisite responsibility, integrity and trustworthiness to enter into contracts with the city of San Buenaventura. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. This chapter shall apply to all contracts awarded by, executed by, or entered into by the city, including, without limitation, purchases, contracts or leases for goods, materials or equipment, contracts for nonprofessional and general services, contracts for public works or construction projects, and contracts with insurance or surety companies issuing insurance policies or bonds for city public works or construction projects, city-sponsored events or privately sponsored events at city facilities.

B. This chapter establishes the grounds for debarment, sets forth procedures for determining whether a person is to be debarred, establishes the consequences of a person’s debarment, and provides that a list of debarred persons is to be created and maintained by the city manager.

C. Nothing in this chapter shall limit the city’s ability to determine, prior to or at the time of contracts award, whether a bid or proposal is responsive to the city’s solicitation for bids or proposals and whether the person submitting the bid or proposal has the requisite qualifications, fitness, capacity, trustworthiness and integrity needed to perform the contract.

D. Nothing in this chapter shall prevent the city, in its sole discretion, from amending or modifying the provisions of any city contract, or from entering into compromise or settlement agreements with persons about the future performance of city contracts by such persons. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

The following definitions shall apply for the purposes of this chapter:

“Affiliate” means a person who:

1. Is the assignee, successor, subsidiary of, or parent company, of another person; or

2. Is a controlling stockholder; or

3. Has the same or similar management of the debarred corporate or other legal entity; or

4. 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, but are not limited to, interlocking management or ownership, identity of interests among relatives, shared facilities and equipment, common use of employees, or a business entity organized following the debarment or proposed debarment of a person having the same or similar management, ownership or principal employees as the contractor that was debarred or proposed for debarment, or the debarred person or the business entity created after the debarment or proposed debarment in a manner designed to evade the application of this chapter or to defeat the purpose of this chapter.

“Contract” means any written agreement in any form between the city and another person and includes, but is not limited to, public works contracts, agreements, leases, licenses, purchase orders or lease-purchase agreements.

“Contractor” means any individual person or business entity, firm, partnership, corporation, or combination that submits a qualification statement, proposal, bid or quote or who contracts directly or indirectly with the city for the purpose of providing any goods, services, labor and materials to or for the city in exchange for city funds, including without limitation any contractor, subcontractor, consultant, subconsultant or supplier. The term “contractor” shall include any responsible managing corporate officer who has personal involvement and/or responsibility in obtaining a contract with the city or in supervising and/or performing the work prescribed by the contract.

“Controlling stockholder” means a stockholder who:

1. Owns more than 25 percent of the voting stock of a corporation; or

2. 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.

“Debarment” means an administrative determination against a potential bidder or contractor declaring such potential bidder or contractor to be irresponsible and disqualified from:

1. Bidding on a city contract;

2. Submitting responses to city’s requests for proposals or qualifications;

3. Being awarded a city contract;

4. Executing a city contract;

5. Participating in a city contract as a subcontractor, material supplier, or employee of a prime contractor or another subcontractor for a period of time specified in the debarment order issued by the debarment hearing panel;

6. Directly or indirectly submitting offers for, or executing contracts, or subcontracts with the city; or

7. Conducting business with the city as an employee, agent, or representative of another person.

“Debarment hearing panel” means a one- to three-member panel appointed by the local building appeals board to hold hearings, take evidence, and to make determinations about debarment for the city.

“Department” means a city department organized under authority of the city manager.

“Management” means the officers, partners, owners, forepersons or other individuals responsible for the financial and operational policies and practices of a person.

“Person” has the meaning given in Section 1.10.010. 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:

1. Directly or indirectly 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

2. 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 just enough evidence to make the fact at issue more likely true than not.

“Public works contract” has the meaning given in Section 4.600.080.

“Relative” means:

1. An individual related by consanguinity within the second degree as determined by the common law;

2. A spouse;

3. An individual related to a spouse within the second degree as determined by the common law; or

4. An individual in an adoptive relationship within the second degree as determined by the common law.

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

“Willfully failed to cooperate” means:

1. Intentionally failed to attend a hearing and/or give testimony; or

2. Intentionally failed to provide documents, books, papers, or other information upon request of the city manager, the debarment hearing panel, or the city council. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. The covenant of good faith and fair dealing is contained in every city contract, and city contractors shall at all times deal in good faith with the city and shall submit invoices for payment, claims, requests for equitable adjustments, requests for change orders, requests for contract modifications or requests of any kind seeking compensation on a city contract, only upon a good faith, honest evaluation of the matter which is the subject thereof.

B. The city requires in all of its procurement procedures that all persons who submit bids, proposals or offers to enter into a contract with the city do so truthfully and in good faith, and shall not attempt to mislead the city with respect to the following items, including, but not limited to, records regarding the nature or quality of the work performed under the contract, payroll records, classification of employees in payroll records, and payment of prevailing wages where called for by the contract.

C. All city contractors shall adhere to the highest standards of performance and workmanship in the performance of work on city contracts.

D. All city contractors shall adhere to all applicable laws and regulations including, but not limited to, city ordinances and state or federal law regarding nondiscrimination, gifts to city officials, and conflict of interest regulations.

E. All city contractors shall comply with all city policies applicable to the contract to which they are a party. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

Debarment may be imposed on a person by the debarment hearing panel, or by the city council on appeal, in accordance with the procedures established by this chapter on one or more of the following grounds:

A. Commission of any act of:

1. Fraud, bribery, collusion, or conspiracy,

2. Bid rigging, price fixing or any act in violation of any state or federal statute or municipal ordinance in connection with the bidding upon, award, or performance of any public or private contract, or

3. Embezzlement, theft, fraudulent schemes and artifices, fraudulent schemes and practices, perjury, forgery, falsification, fabrication or destruction of records, or receiving stolen property;

B. Commission of any act indicating a lack of business integrity or business honesty which could affect the person’s or its affiliate’s responsibility or reliability of performance under a contract, including without limitation, improper, aberrant or unethical conduct in connection with the person’s or its affiliate’s performance of any public or private contract;

C. Submission of a bid, proposal, insurance policy, bond, guarantee or other document that is known, or should be known, by such person to be false, misleading or nonmeritorious or to contain false information;

D. Submission of any false, misleading or nonmeritorious claim, demand or lawsuit against any public agency, including the city;

E. A consistent pattern and practice of unjustifiably disregarding or failing to honor terms or conditions of city contracts, including without limitation, repeated unexcused delays and poor performance;

F. Substandard performance on any city contract including, but not limited to, a material breach thereof, a failure to complete work in a timely manner or within the contract price when such failure is attributable to the negligent or wrongful actions or inactions of such person, substandard quality of work, inadequate personnel or equipment to complete the work in a timely manner, inability or unwillingness to cooperate with city representatives, or any negligent or wrongful failure to cooperate with any city department, or to comply with a city policy which is applicable to the contract;

G. Knowingly doing business with a debarred third person in performance of the city’s purchase of any supplies, materials and equipment or general services contract awarded after debarment of such third person;

H. A verdict, judgment, settlement, stipulation or plea agreement establishing the person’s violation of any civil or criminal law relevant to the person’s ability or capacity to perform or comply with the terms and conditions of a city contract;

I. A conviction under federal or state antitrust statutes involving public contracts or the submission of offers or bid proposals;

J. Breach of the duty of good faith and fair dealing, including a violation of any local, state, or federal law or regulation applicable to a contract or transaction;

K. Noncompliance with any law governing the handling, transfer, storage or disposal of hazardous materials or hazardous waste, or failure to perform a contract in such a way that environmental damage results or a violation of environmental laws or permits is committed;

L. Noncompliance with labor or safety statutes and regulations including, but not limited to, regulations or standards governing prevailing wage, occupational safety and health, nondiscrimination requirements or other local, state, or federal laws;

M. Evidence that the person lacks financial responsibility, such as unpaid debts, unfulfilled insurance or bond obligations or other evidence of financial instability or irresponsibility;

N. Failure to have or maintain in good standing all necessary licenses, permits or other approvals required to transact business within the state of California;

O. Any other ground which the debarment hearing panel, or the city council on appeal, determines to significantly impair the ability of the person to perform on a city contract including evidence that the person was established to or operates in a manner designed to evade the application of this chapter or to defeat the purpose of this chapter. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Evidence of grounds for debarment may be determined to exist if:

1. Within the last 10 years, the person has been convicted of a criminal charge for any act or omission described in Section 6.700.050 whether entered upon a verdict or a plea, including a plea of no contest;

2. Within the last five years, a civil judgment has been entered against the person for any act or omission described in Section 6.700.050; or

3. The debarment hearing panel, or the city council on appeal, finds that based upon a preponderance of the evidence presented, such grounds described in Section 6.700.050 exist.

B. In determining whether a person should be debarred, and the duration for any debarment, the debarment hearing panel, or the city council on appeal, may consider in addition to any other relevant factors, the following:

1. The degree to which the person cooperated with local, state or federal authorities in any criminal or civil proceeding or investigation which forms the grounds for debarment;

2. The degree to which the person provided restitution for any damages or injury occasioned by the person’s acts or omissions set forth under Section 6.700.050;

3. Whether the person fully investigated the circumstances surrounding such acts or omissions set forth under Section 6.700.050, and promptly provided the city with the results of the investigation; and

4. Whether the person implemented or agreed to implement remedial measures to prevent a recurrence of such acts or omissions including, without limitation, new or revised internal control procedures and other measures recommended, identified or prescribed by any public agency. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Debarment of a person under this chapter constitutes disqualification of that person from submitting bids or proposals to the city for the purpose of entering into or in any manner participating in any city contract, or any part of any city contract, and shall apply to all individuals, divisions, subsidiaries, affiliates and parent corporations of that person unless the decision to debar is limited by its terms to one or more specifically identified individuals, divisions, subsidiaries, affiliates, parents or other organizational elements.

B. The debarment of a person shall apply to any existing affiliate of the person where the affiliate is specifically named and given notice of the proposed debarment and opportunity to respond. The debarment shall also apply to any successor-in-interest or any affiliate of the debarred person formed during or after the debarment proceedings.

C. Debarment of any person shall apply to any business entity, whether or not such business entity was in existence at the time of such debarment, for which the debarred person acts as a principal during the debarment period.

D. The city shall not accept, receive, open a bid, evaluate for award, or include any proposals, quotations, bids, or offers from any debarred person for the duration of the debarment.

E. The city shall not award or approve the award of a contract or execute a contract under which a debarred person is intended to participate as a subcontractor, material supplier, insurer or surety. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Debarment shall be for a period commensurate with the seriousness of the grounds for debarment, as determined by the debarment hearing panel or by the city council on appeal, except that the initial period of debarment shall not exceed five years.

B. At the expiration of the time period of any debarment imposed under this chapter, the city manager may review the record of the evidence presented during the debarment proceedings, as well as any additional information or evidence relevant to a review of the debarment received by the city manager prior to such review. The city manager may extend any existing debarment for an additional period of up to three years, if the city manager determines that sufficient evidence supporting an extension of the debarment exists and that such 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 for debarment established in this chapter commencing with Section 6.700.100, and shall act as the charging official in any proceedings to extend debarment.

C. Unless the city manager has extended the debarment pursuant to subsection B of this section, the debarment shall automatically terminate upon the expiration of the debarment term. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

Any city department director who, based on available evidence and with respect to a contract under their department’s control, has cause to believe that a contractor has engaged in any willful misconduct with respect to any city bid, request for qualification, request for proposals, purchase order or contract, or committed any act or omission relating to any matter consistent with the grounds for debarment specified in Section 6.700.050 may initiate debarment proceedings by filing a complaint with the city manager. The complaint must be in writing, and shall state the name of the contractor whose conduct allegedly merits debarment, and provide a specific and detailed narrative description of the conduct alleged to be grounds for debarment. Such charging official may issue the complaint regardless whether such charging official awarded, was responsible for, or was involved in any way with the underlying contract or circumstances leading to the complaint. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

Upon receipt of a complaint recommending debarment, or after determining that extension of an existing debarment is necessary to protect the public interest, the city manager or their designee shall deliver a written notice of proposed debarment to each named contractor and to any interested party by personal service or United States mail in a manner ensuring written confirmation of delivery. The notice of proposed debarment shall contain the following:

A. Notice that debarment is being considered;

B. The grounds for the proposed debarment, in terms sufficient to put the contractor on notice of the conduct or action(s) upon which it is based;

C. The potential consequences of the debarment, including the intended period of debarment;

D. The city’s debarment procedures set forth in this chapter, which may be in the form of a copy of Section 6.700.110; and

E. The name and address to which the contractor may submit a written request for a hearing on the proposed debarment. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Within 15 days after receipt of the notice of proposed debarment, the contractor or the contractor’s authorized representative may submit a written request to be heard, in person or through a representative. Any such written request to be heard shall be filed with the city clerk and copied to the city manager. The written request shall specify the name and address of the person to which all subsequent notices and communications should be mailed.

B. Failure of the contractor to submit to the city a written request to be heard within the time required by this section, or failure of the contractor or the contractor’s representative to appear for a requested hearing that has been duly noticed, shall be deemed admission by the contractor of the allegations of the complaint.

C. If the contractor submits a written request to be heard in person or through a representative, within 15 days of the filing of such request, the city manager shall refer the written request to the local building appeals board for the purpose of appointing a fair and impartial debarment hearing panel to hear and determine whether the contractor should be debarred. Within 30 days of the filing of the written request to be heard, the local building appeals board shall appoint one to three of its members to serve as the debarment hearing panel.

D. Within 15 calendar days of its appointment, the debarment hearing panel shall notify each person named in the notice of proposed debarment and the charging official of the time, date and location of the scheduled hearing. The hearing date shall be set at the panel’s sole discretion, except the hearing must commence within 90 days of the date the city manager served the notice of proposed debarment. The debarment hearing panel may extend the 90-day period upon good cause shown.

E. The debarment hearing panel may, in its sole discretion, direct any named contractor and the charging official to submit in advance of the hearing, statements, legal analyses, lists of witnesses, exhibits, documents or any other information the panel deems pertinent to the determination of the charged misconduct. The panel may request the respective parties to submit rebuttals to such information. The panel may limit the length, scope or content of any such statement, analysis, list, rebuttal, document, or other requested information. The panel shall set due dates for all written presentations.

F. If the panel determines, with the written agreement of each named contractor and the charging official, that the hearing shall be by written presentation, then all final writings shall be due no later than 90 days from the date the city manager served the notice of proposed debarment.

G. All notices and writings required to be served under this section shall be delivered by personal service or United States mail in a manner ensuring written confirmation of delivery. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

The proceedings shall be as informal as is compatible with the requirements of due process. The debarment hearing panel need not be bound by the common law or statutory rules of evidence and procedure, but may make inquiries in the matter through all means and in a manner best calculated to make a just factual determination. The standard of proof for the debarment hearing shall be a preponderance of the evidence. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. The fraudulent, criminal or other improper conduct of any officer, director, partner, shareholder, employee or other individual associated with a person may be imputed to the person when the conduct occurred in connection with the individual’s performance of duties for, or on behalf of the person, or with the person’s knowledge, approval, or acquiescence. The person’s acceptance of benefits derived from the conduct shall be evidence of such knowledge, approval or acquiescence.

B. The fraudulent, criminal or other improper conduct of one person participating in a joint venture or similar arrangement may be imputed to other participating persons if the conduct occurred for, on approval of, or acquiescence of these persons. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval or acquiescence. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Hearings may occur in person or in writing, as set forth in Section 6.700.110. If the hearing is to occur in person, the debarment hearing panel shall specify the time and place for the charging official to present the case and for the contractor to rebut the charges. The panel may, in its sole discretion, allow offers of proof, shorten the time to produce records or witnesses, and limit the scope of evidence presented based on relevancy. Each side shall be entitled to call witnesses, and the panel may allow cross-examination of witnesses. The members of the debarment hearing panel may ask questions of any party for the purpose of reaching a determination. The hearing shall be open to the public.

B. The debarment hearing panel shall follow procedures established in this chapter and shall make decisions based on evidence taken at a hearing. The panel shall consider the evidence submitted by the charging department and the contractor. Within 15 days of the hearing, or of the date final written presentations are due, the panel shall issue its findings and recommendation. If the debarment hearing panel finds that based upon a preponderance of the evidence presented at the hearing, one or more grounds of debarment exist as described in Section 6.700.050 and recommends a term of debarment, such decision shall be in writing, shall contain findings of fact, and shall specify the grounds for debarment based on the record of facts and information presented at the hearing.

C. The debarment hearing panel shall serve its findings and determination on the charging official, the named contractor(s), and/or their respective legal counsel or authorized representatives, and shall submit the same to the city manager. Service may be accomplished by personal service or United States mail in a manner ensuring written confirmation of delivery.

D. Except as provided in Section 6.700.150, the debarment hearing panel’s decision shall be final. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

Either the charging official or the contractor may appeal any decision made by the debarment hearing panel to the city council by delivering written notice of the appeal to the city clerk within 10 days of personal service of the debarment hearing panel’s findings and determination. The city council shall hear the matter at a date convenient to the parties but not later than 90 days after the notice of appeal, and shall conduct a de novo hearing in accordance with the provisions of Sections 6.700.110 through 6.700.140, inclusive. The decision of the city council shall be final. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Except as otherwise provided in Section 6.700.170, a person who has been debarred is disqualified from conducting business with the city on behalf of themselves or as agent or representative of other persons for the duration of the debarment.

B. Except as otherwise provided in Section 6.700.170, a person who has been debarred is disqualified from conducting business or from acting in a capacity where the person reasonably may be expected to conduct business with the city as an agent or representative of another person.

C. The management of a corporate or other legal entity that has been debarred shall not conduct business or act in a capacity where such individuals may be expected to conduct business with the city under a different corporate identity.

D. A person who has been debarred is disqualified from submitting bids directly or indirectly, submitting responses to requests for proposals or qualifications, receiving contract awards, executing contracts, participating as a subcontractor, employee, agent or representative of another person contracting with the city, or receiving contracts for the period of debarment.

E. A person who is an affiliate of a person that is debarred is debarred to the same extent as the person that has been debarred.

F. When a debarred person sells or otherwise transfers to a relative or to any other person over whose actions the debarred person exercises substantial influence or control, then that relative or other person is automatically debarred to the same extent as the seller or transferor is debarred.

G. Violation of any order of debarment, such as by submission of a proposal or bid during the term of debarment, may be considered a false claim as provided in the California Government Code.

H. Administrative debarment shall neither exclude nor preclude any other administrative or legal action that might be taken by the city. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. Notwithstanding the debarment of a person, the city may elect to continue contracts or subcontracts it has with that person that were in existence at the time the person was debarred.

B. If the city manager believes that termination of contracts with a person that are in existence at the time the person is debarred is in the best interests of the city, the city manager may take actions necessary to terminate those contracts only after consultation with the city attorney to ensure the propriety and legality of the proposed action(s).

C. The city shall not renew or otherwise extend the duration of contracts in existence at the time of debarment with debarred persons unless the city council determines that such renewal or extension is in the best interest of the city. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. A contractor who is awarded a contract with the city shall not knowingly employ, subcontract with, or purchase materials or services from a person who is currently debarred pursuant to this chapter. Violation of this subsection may result in rejection of the bid or proposal, nonpayment by the city for work performed, annulment of award or termination of an award of contract, issuance of a stop work order, disqualification from submitting future bids or proposals on city contracts, or any other remedy provided by law.

B. A person who uses or lists a debarred subcontractor, supplier, insurer or surety without having actual or constructive knowledge of such disqualification shall be allowed to substitute the disqualified person in accordance with state law or, if not applicable, the provisions of the contract governing contract changes. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. The city may determine the eligibility of any contractor bidding or submitting a proposal for a city contract by requiring that the contractor submit, upon request, a statement under penalty of perjury declaring that neither the contractor, nor any principal nor affiliate of the contractor, nor any subcontractor, supplier or surety to be engaged by the contractor:

1. Within the last 10 years, has been convicted of a criminal charge for any act or omission described in Section 6.700.050 whether entered upon a verdict or a plea, including a plea of no contest.

2. Within the last five years, has been subject to a civil judgment, penalty, or debarment by any governmental agency for any act or omission described in Section 6.700.050.

B. The city may determine the eligibility of any contractor bidding or submitting a proposal for a city contract by requiring that the contractor submit, upon request, any other information or documentation deemed necessary to determine the person’s eligibility. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)

A. The city manager shall create and maintain a list of persons who have been debarred in accordance with procedures of this chapter and the effective dates of such disqualification. Such list shall be filed with the city clerk, who shall make the list available for public inspection and copying during regular business hours.

B. The list of persons who have been debarred by the city shall be deemed to be constructive notice as to persons who have been disqualified from submitting bids or proposals on city contracts or who are ineligible to participate in such contracts.

C. The city manager shall establish procedures to provide for the effective use of the list to ensure the city does not do business with persons who have been debarred. (Ord. No. 2011-002, § 1, 1-24-11; Ord. No. 2013-011, § 3, 11-18-13)