State Bidders To Be Asked More Probing Questions; Biz Groups Skeptical
April 20, 2021
The state will begin asking prospective bidders deeper questions on its vendor question worksheets regarding their labor and environmental compliance record and the Chamber is openly questioning the motives.
Gov. Gretchen Whitmer said the protocol changes on its contract bids will have bidder’s list their labor and environmental compliance record. The administration is also beginning the rule-making process to allow for debarment of suppliers who demonstrate a lack of integrity.
“We want Michigan to be a home for opportunity for everyone, which begins with supporting businesses that provide fair wages and good benefits,” Whitmer said. “Today’s actions strengthen our commitment to these priorities and bring the greatest possible benefit to Michigan’s businesses, workers and families.”
But Wendy Block, the Michigan Chamber of Commerce’s vice president of business advocacy, questioned whether the Whitmer administration is trying to do an “end run” to Michigan’s Right to Work law and a repeal of Michigan’s prevailing wage law.
“Is the goal to get around these laws? To force a higher or union-level wage. To force minimum benefit levels? It’s hard to know, but it seems the sky’s the limit in terms of how far the state could take things when compiling the answers to these questions on state-required ‘vendor question worksheets,'” Block said.
Also, companies bidding out for state contracts will need to certify that they’re not using “independent contractors” to essentially function as full-time employees, under the new protocols.
The governor said the “misclassifying” of employees as independent contractors can deprive workers of access to overtime pay, workers’ compensation, health care and retirement benefits, among other things.
Some employers have been known to get around the additional expense of bringing a worker in as an official employee to simplify the human resources end of the arrangement while arguably cutting costs.
The governor said today if employers want to do that, they’re going to have problems getting a state contract going forward.
“For companies that are doing the right thing, these anti-fraud measures are an important step forward that can promote fairness, competition and greater workplace protections,” said Tom Lutz, executive secretary-treasurer of the Michigan Regional Council of Carpenters and Millwrights. “Tax fraud hurts businesses that are doing the right thing and leaves workers with lower wages and no health care when they get hurt on the job.”
According to the Economic Policy Institute, “payroll fraud” cost more than 2.8 million Michigan workers an estimated $429 million in wages and overtime pay between 2013 and 2015.
The governor’s press release announcing the change included quotes of support from John Marinelli of Commercial Contracting Corp., Jim Judd of Master Craft Floors and Josh Barney of J.J. Barney Construction.
The move was also instantly supported by both Senate Minority Leader Jim Ananich (D-Flint) and House Minority Leader Donna Lasinski (D-Scio Twp.).
Someone not in support was Jimmy Greene of the Associated Builders and Contractors of Michigan, who called the move “overkill.” He said asking companies to certify independent contractors or those workers being paid through a 1099 are not taking the place of a full-time employee is presuming someone is guilty and then asking that they prove they’re innocent.
Companies use temporary work or temp agencies all the time for various reasons and to insinuate businesses are doing it “in a bad way” is “absurd” and “insulting,” he said.
“Just say you’re screening for union work and get it over with,” Greene said. “Seriously? This is the height of politics. Just say it and address it for what it is.”
Brian Calley, president of the Small Business Association of Michigan, said many of his members tell him they already find the process of becoming a state contractor “complicated and intimidating.”
He said he’s working with the governor’s office on “how to achieve the goals of this new policy while still ensuring that it does not deter small businesses from state procurement opportunities.”