Responsible contracting policies help governments reduce the risk of contract failure and ensure that contractors have a track record of providing employees with living wages and benefits. It leads to better quality services and reduces the hidden costs that result when workers do not receive living wages and benefits. Responsible contracting can be achieved through ordinances or laws, regulations or administrative policies.
Responsible contracting policies establish a basic set of qualifications that all firms must meet in order to bid on public construction or private construction projects that receive public funding, require public approvals or benefit from public investment.
Responsible contracting policies typically require contractors to demonstrate that they offer high-quality employment and work. In practice, firms that meet responsible contractor standards typically would be able to show that they:
– Are fully licensed and bonded
– Have had no wage/hour violations for the past three consecutive years
– Provide OSHA 10-hour safety training
– Participate in an ERISA or joint labor-management training program (e.g. certified apprenticeship program)
– Pay prevailing wages and offer health insurance
– Provide all benefits of employment to their workforce (including social security, workers comp, and unemployment insurance)
– Comply with all other federal and state regulations
– Have no history of violating this policy in previous public contracts
– Moreover, strong policies require general contractors to incorporate these components into their agreements with subcontractors.