Current through Register Vol. 48, No. 12, March 22, 2024
This Section provides additional requirements for the
substantial compliance with the Sections of the Illinois Procurement Code
listed in Section 930.130. This Section supplements the requirements found in
the Code and does not excuse substantial compliance with any of the Code
requirements.
a) Substantial
Compliance with Code Section 20-160 (Business Entities; Certification;
Registration with the State Board of Elections) and Section 50-37 (Prohibition
of Political Contributions)
1) These
requirements generally apply to a vendor whose existing State contracts have an
aggregate value in excess of $50,000, whose aggregate value of bids/proposals
for State contracts exceeds $50,000, or whose aggregate value of State
contracts and bids/proposals exceeds $50,000, calculated on a calendar-year
basis.
2) On a calendar-year basis,
each vendor or potential vendor must keep track of the value of contracts and
bids/proposals. Vendors must register with the State Board of Elections when
the vendor determines that the value of the contracts and bids/proposals meets
the threshold for registration.
3)
Documentation of vendor compliance must be in the procurement file in relation
to any contract for which a vendor is required to register as set forth in
subsection (a)(2), unless the vendor certifies it is not required to register.
A) For contract renewals and extensions, if
the value of the renewal or extension by itself, or in combination with the
contract being renewed/extended and other contracts and bids/proposals, exceeds
$50,000, the vendor must provide documentation of vendor compliance upon
request and make the appropriate contract certification, if it has not already
done so. The Registration Certificate issued by the State Board of Elections,
or other evidence of vendor compliance, may be provided by reference to and
incorporation of the vendor's prequalification by the CPO.
B) CDB shall identify in the solicitation
whether the contract is estimated to exceed $50,000 annually. Vendors
submitting bids or offers for master contracts estimated to exceed $50,000
annually, regardless of actual vendor consumption, are required to register
with State Board of Elections.
C)
For indefinite quantity/estimated value contracts that are not estimated to
exceed $50,000 annually, a vendor who is otherwise not required to register
shall register with the State Board of Elections when the maximum value of
orders that may be placed pursuant to an indefinite/estimated value contract,
plus all other contracts and bids/proposals, exceeds $50,000 annually. The
vendor shall register with the State Board of Elections within 10 business days
after orders exceed $50,000.
D) For
contract amendments, if the value of the amendment, by itself or in combination
with the contract being renewed plus other contracts and bids/proposals exceeds
$50,000 annually, the vendor must provide the Registration Certificate or other
evidence of compliance upon request and make the appropriate contract
certification, if it has not already done so.
E) Any contracts mistakenly executed in
violation of this Section must be amended to include the contract
certifications, and the vendor must supply the Registration Certificate or
other evidence of compliance upon request. If any violation by the vendor is
not cured within 5 business days after receipt of notification of the
violation, the contract is voidable by the State without penalty.
F) Certification of the requirement to
register with the State Board of Elections (see 30 ILCS 20 -160(a)) shall be
included in or added to each contract that must be filed with the State
Comptroller pursuant to Section 20-80 of the Code and those written two-party
contracts that need not be filed with the Comptroller. CDB may require written
confirmation of the certification at any time.
b) Substantial Compliance with Code Section
50-13 (Conflicts of Interest)
1) These
conflicts apply to the direct interests of specified State employees or
officeholders.
2) Office or
Employment. It is unlawful for any person holding an elective office in
this State, holding a seat in the General Assembly, or appointed to or employed
in any of the offices or agencies of State government and who receives
compensation for such employment in excess of 60% of the salary of the Governor
of the State of Illinois, or who is an officer or employee of the Capital
Development Board or the Illinois Toll Highway Authority, or who is the spouse
or minor child of any such person, to have or acquire any contract, or any
direct pecuniary interest in the contract therein, whether for stationery,
printing, paper, or any services, materials, or supplies, that will be wholly
or partially satisfied by the payment of funds appropriated by the General
Assembly of the State of Illinois or in any contract of the Capital Development
Board or the Illinois Toll Highway Authority. [
30 ILCS
500/50-13(a) ].
3) Financial Interests. It is
unlawful for any firm, partnership, association, or corporation, in which any
person as described in subsection (b)(2) is
entitled to receive more than 7½% of the total distributable income or
an amount in excess of the salary of the Governor, to have or acquire any such
contract or direct pecuniary interest therein. [
30 ILCS
500/50-13(b) ].
4) Combined Financial Interests. It
is unlawful for any firm, partnership, association or corporation, in which any
person listed in subsection (b)(2) together with his or her
spouse or minor children is entitled to receive more than 15%, in the
aggregate, of the total distributable income or an amount in excess of 2 times
the salary of the Governor, to have or acquire any such contract or direct
pecuniary interest therein. [
30 ILCS
500/50-13(c) ].
5) For the purpose of this Part, an
individual has a direct pecuniary interest in a contract when the individual is
owed a payment or otherwise received a direct financial benefit in conjunction
with performance of a contract, including finder's fees and commission
payments.
6) For the purpose of
this Part, "distributable income" means the income of a company after payment
of all expenses, including employee salary and bonuses, and retained earnings,
which is distributed to those entitled to receive a share of the income. In the
case of a for-profit corporation, distributable income means "dividends". When
calculating entitlement to distributable income, the entitlement shall be
determined at the end of the company's most recent fiscal year.
7) This Section applies to those elected or
appointed to an office of Illinois State government. This Section does not
apply to those elected to local government offices, including school districts,
nor does it apply to those elected to federal offices in this State.
c) Substantial Compliance with
Code Section 50-15 (Negotiations)
1)
It is unlawful for any person employed in or on a continual contractual
relationship with any of the offices or agencies of State government to
participate in contract negotiations on behalf of that office or agency with
any vendor, partnership, association or corporation with whom that person has a
contract for future employment or is negotiating concerning possible future
employment. [
30 ILCS
500/50-15(a) ]
2) An individual who performs services
pursuant to a contract and who meets the requirements of an "employee" as
opposed to an "independent contractor" is in a "continual contractual
relationship" from the effective date of the contract until such time as the
contract is terminated.
3) An
individual who performs services pursuant to a contract and who meets the
requirements of an "independent contractor", as opposed to an "employee", is in
a "continual contractual relationship" if the contract term is indefinite, is
automatically renewed, is renewable at the individual's option, is renewable
unless the State must act to terminate, or has a definite term of at least
three months.
d)
Substantial Compliance with Code Section 50-20 (Exemptions). If an individual
finds a conflict of interest under Section 50-13 of the Code with the vendor
selected for award or contract negotiations, he or she shall forward to the CPO
the name of the vendor and a description of the proposed contract and of the
potential conflict, and shall state why an exemption should be granted. The CPO
shall decide whether to disapprove the contract or request an exemption from
the Executive Ethics Commission in accordance with Section 50-20 of the
Code.
e) Substantial Compliance
with Code Section 50-35 (Financial Disclosure and Potential Conflicts of
Interest)
1) In circumstances in which the
vendor refuses or is unable to provide disclosures, the CPO may authorize CDB
to move forward with the transaction. In granting that authorization, CDB must
provide documentation of efforts to obtain compliance.
2) New disclosures are required on contract
renewals. New disclosures are not required for contract amendments.
3) For purposes of:
A) Section 50-35(b) of the Code, "parent
entity" means an entity that owns 100% of the bidding or offering
entity.
B) Section 50-35(b) of the
Code, "distributive income" means the income of a company after payment of all
expenses, including employee salaries and bonuses, and retained earnings that
are distributed to those entitled to receive a share of that income. In the
case of a for-profit corporation, distributable income means dividends. When
calculating entitlement to distributable income, the entitlement shall be
calculated at the end of the company's most recent fiscal year or when
distributed.
C) Section 50-35(b) of
the Code, "subject to federal 10K reporting" means subject to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 (
15
USC 78a et seq.). "10K disclosure" means a
report required under those statutes.
D) Section 50-35(b)(1) of the Code,
"contractual employment of services" means any contract to provide services to
the State, whether as independent contractor or employee, that is by and
between the State and the named individual.
4) 10K Disclosures
A) Any vendor subject to federal 10K
reporting requirements may submit its 10K to CDB in satisfaction of the
disclosure requirement of Section 50-35(b) of the Code. The vendor may be
required to identify the specific sections or parts in the 10K disclosure
containing information, if any, pertaining to those who have an ownership
interest or an interest in the distributive income of the vendor or its parent,
or other information that the vendor knows or reasonably should know identifies
a potential conflict of interest with the State. If the financial interest or
conflict of interest information requested by the State is not in the 10K, or
in a document that may be submitted to the SEC in conjunction with, or in lieu
of, the 10K, then that additional documentation shall be provided.
B) 10K disclosures are available for public
review. Any potential conflict of interest identified by the public and brought
to the attention of CDB, or the CPO, shall be investigated.
C) In circumstances in which a vendor may
submit a 10K disclosure in lieu of the specific disclosure requirements of the
Code, the CPO may consider information identified by the vendor in the 10K
disclosure and any information disclosed pursuant to public review of the 10K
disclosure in determining whether a potential conflict of interest
exists.
5) When an
alleged conflict of interest or violation of the Code is identified, it shall
be reviewed by the CPO, who must determine whether the contract, subcontract,
bid, offer or proposal should be awarded. Prior to making a final
determination, the potential conflict shall be submitted to PPB for review in
accordance with Section 50-35(d) of the Code. If PPB recommends to allow the
contract or subcontract, the CPO may award the contract. If the PPB recommends
the contract, bid or offer be voided, then the CPO may determine to award the
contract, considering whether the best interest of the State of Illinois will
be served. Upon that determination, the EEC shall hold a public hearing. After
the public hearing, the CPO may award the contract. The CPO may, at any
juncture, determine to void the contract or award if to do so is determined to
be in the best interest of the State. All written determinations and any
documents relied upon or made part of any public hearing shall become a
publicly available part of the procurement file.
f) Substantial Compliance with Code Section
50-36 (Disclosure of Business in Iran).
A period not to exceed 5 business days may be granted by the
CPO to cure a failure to provide the disclosures required by this
subsection.
g) Voidable
Contracts
1) If any contract or amendment to
the contract is entered into, or purchase or expenditure of funds is made, at
any time in violation of this Part or any law, the contract or amendment may be
declared void by the CPO or may be ratified and affirmed, provided the CPO
determines that ratification is in the best interests of the State. If the
contract is ratified and affirmed, it shall be without prejudice to the State's
rights to any appropriate damages.
2) If, during the term of a contract, the CPO
determines that the contractor is in violation of Section 50-10.5 of the Code,
the CPO shall declare the contract void.
3) If, during the term of a contract, CDB
determines that the contractor no longer qualifies to enter into State
contracts by reason of Section 50-5, 50-10, 50-12, or 50-37 of the Code, the
CPO may declare the contract void if it determines that voiding the contract is
in the best interests of the State.
4) If, during the term of a contract, the CPO
determines that a subcontractor no longer qualifies to enter into State
contract by reason of Section 50-5, 50-10, 50-10.5, or 50-12 of the Code, the
CPO may declare the related contract void if it determines that voiding the
contract is in the best interests of the State. However, the related contract
shall not be declared void unless the contractor refuses to terminate the
subcontract, upon CDB's request, after a finding that the subcontractor no
longer qualifies to enter into State contracts by reason of Section 50-5,
50-10, 50-10.5 or 50-12 of the Code.