| 18.3.101 | PURPOSE |
(2) The Montana department of transportation will debar or suspend contractors which violate these rules, and will not do business with, or allow prime and subcontractors to do business with, on department-related projects, persons debarred or suspended by the federal government, by another state, or by another agency of Montana state government.
(3) If a person commits an act, as defined in these rules, indicating that the person no longer merits the privilege of contracting with the department or participating in department projects, the department may begin proceedings under these rules to debar the person from bidding on or otherwise participating in department contracts or projects. A person's decision to bid upon or accept contracts with the department, or otherwise participate in department contracts, is a voluntary acceptance of the provisions of these rules and their requirements.
(4) Disputes under this process, while they are contested and part of the adversarial process of these rules and subject to their safeguards, are not a "contested case" under the Montana Administrative Procedure Act, in accordance with 2-4-102, MCA.
(5) These provisions are in addition to other actions that may be taken against a person (i.e., criminal prosecution, civil actions for false, fraudulent or fictitious claims or to recover amounts incorrectly paid under such claims, disadvantaged business enterprise program decertification, etc.) , and do not prevent other actions or sanctions from being taken, where considered appropriate.
| 18.3.102 | DEFINITIONS |
(1) "Adequate evidence" means information sufficient to support the reasonable belief that a particular act or omission
has occurred.
(2) "Administrator" is an administrator of a division of
the Montana department of transportation.
(3) "Commission" is the Montana transportation commission.
(4) "Convicted" means any finding of guilt of an offense, whether after a trial or upon a plea of guilty or nolo contendere (or any equivalent) in any court in the United States, whether or not it is pending appeal. A conviction ceases to be a conviction only when it is later reversed by a court of competent jurisdiction.
(5) "Debarment" is an action taken or decision made by an agency, other than temporary determinations of nonresponsibility or suspension, that excludes a person from bidding on or participating in projects and contracts. Debarment or suspension of a person under these rules constitutes debarment or suspension of all its divisions and other organizational elements.
(6) "Department", unless obviously referring to another agency, is the Montana department of transportation.
(7) "Director" is the director of the Montana department of transportation.
(8) "Notice" is written communication served in person or sent by certified mail, return receipt requested or equivalent, to the last known address of a person, its identified counsel, its agent for service of process, its then-listed corporate agent, or any partner, officer, director, owner, or joint venturer of the party. Notice, if returned by the U.S. postal service as being undeliverable by mail, shall be considered to have been received by the addressee five days after being properly sent to the last address known to the department. It is the responsibility of persons doing business with the department to provide current, accurate mailing addresses.
(9) "Participating" in a department project means a person performing any work in any capacity (e.g., prime contractor, subcontractor, sub-subcontractor, clearing rights-of-way for utilities, designer, consultant, etc.) , or providing any equipment, labor, services, or materials to be used in the project.
(10) "Person" is any individual, corporation, partnership, firm, association or other legal entity, however organized.
(11) "State" applies to any of the United States and the District of Columbia, unless by its use in these rules it clearly is limited only to Montana.
(12) "Suspension" is a temporary exclusion of a person from bidding on or participating in contracts, work or projects during the period pending completion of any investigation into, and the initiation and completion of, possible debarment proceedings as may ensue. It is a discretionary administrative decision by the director, and is appealable only to the commission under the procedures stated in ARM 18.3.106.
| 18.3.103 | SCOPE |
(2) A person submitting a bid on a federal-aid project must certify compliance with Part XI of the Federal Highway Administration Form FHWA 1273 (Required Contract Provisions, Federal-Aid Construction Contracts) and provide certification to the department that all subcontractors, material suppliers, vendors and other lower tier participants used are in full compliance with Part XI of the Form FHWA 1273. A person submitting a bid to the department on a federal-aid contract must make its certification part of every subcontract, material supply agreement, purchase order or other covered lower tier transaction. "Covered lower tier transactions" include primary purchase of materials for contract items incorporated into the work. A copy of the Form FHWA 1273 may be obtained from department offices at 2701 Prospect Avenue, Helena, MT 59620-1001.
(3) Debarment is distinct from a commission finding of nonresponsibility. The commission has the authority and ability in its discretion to find a person nonresponsible for purposes of disallowing a bid on a project or contract, or prohibiting a person from otherwise participating in a project or contract (e.g., as a subcontractor, supplier, etc.) without conducting debarment proceedings.
(4) Debarment applies both to a firm and individuals. In the case of the former, it may be applied against any or all businesses in which a firm has involvement (i.e., joint ventures) , or over which it has ownership or control (i.e., subsidiaries) . In the case of the latter, debarment may be applied to and enforced against any and all businesses in which the individual has any level of interest, ownership, or control.
(5) If debarred by the federal government or any Montana government agency, a person may not bid on or otherwise participate in any department project or contract in any capacity (prime contractor, subcontractor, supplier, etc.) , including as a separate contractor for a utility to relocate utilities required by a department project, until after the completion of the entire debarment period, whether or not the department debars the person. Debarment proceedings may proceed even if the person ceases doing business during the proceedings.
(6) If a person is debarred by any agency of the federal government for any period, the department may debar it for a period up to that set by the federal government without need for further debarment proceedings. The only evidence required in a debarment hearing in a case based on an existing debarment will be a certified copy of an order, agency letter or other final action declaring the debarment in the other jurisdiction. That will not prevent the person from presenting evidence to dispute the proposed debarment or its length. If the person is debarred by a branch or agency other than of the Montana or federal government (i.e., another state, a county, etc.) , or if the department may wish a debarment period exceeding that set by the other Montana agency or the federal government, the department must hold debarment proceedings before increasing the debarment period.
(7) A person planning to bid on or participate in a department contract or work, or who has already bid on or is participating in a department contract or work, must immediately notify the director in writing of any debarment or suspension against it, or of any debarment or suspension proceedings pending against it in any jurisdiction.
| 18.3.104 | REASONS FOR DEBARMENT |
(a) Has been convicted of, or has committed, one of the following offenses, whether a violation of any state's or federal law or regulation, within the prior three years:
(i) Fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;
(ii) Violation of federal or state antitrust statutes, including those proscribing price-fixing between competitors, allocation of customers between competitors, and bid-rigging;
(iii) Embezzlement, theft, forgery, falsification or destruction of records, making false statements, receiving stolen property, making false, fraudulent or fictitious claims, bribery, or obstruction of justice;
(iv) Any act prohibited by state or federal law committed in any jurisdiction involving conspiracy, collusion, lying or material misrepresentation with respect to bidding on any public or private contract, or fraud;
(v) Any felony (federal or state) or other offense indicating a lack of business or personal integrity, or business or personal honesty that seriously and directly affects the present integrity of a person;
(vi) Violation of a prior federal or state suspension or debarment; or
(vii) Any other cause of a serious and compelling nature
which affects the responsibility of the contractor to be awarded contracts by the commission or department.
(b) Filed a false, fictitious or fraudulent claim to any federal or state agency in conjunction with: work performed on a department project; work performed for the department; or any claim that the department (or the state of Montana as the department's self-insuring entity) owes the person for purported acts of the department or one of its agents. If a contractor submits a claim, either under the department claims procedure, in a lawsuit against the department, or by any other means, which is not adequately and fully supported with factual evidence and cost data, it will be considered to be false, fictitious or fraudulent under these rules;
(c) Violated terms of a public agreement or contract, affecting his integrity for future contracts with the department or performance in department contracts. This includes:
(i) a willful failure to perform in accordance with the terms of one or more public agreements or transactions, including contract requirements (i.e., standard specifications, special provisions, etc.) , or serious or repeated violations of specifications, bid requirements or claims procedures. If a person wishes to contract with the department or participate in projects, he must abide by the department's specifications and requirements, or will no longer be allowed the privilege;
(ii) a history of failure to perform or of unsatisfactory performance in one or more public agreements or transactions. This includes, among other possible examples, a common or repeated practice of a contractor submitting low bid and later submitting claims which are determined to be unfounded or unreasonable (i.e., claiming for work or conditions which were called for in or should reasonably have been anticipated for the project) , and a prime contractor = s repeated failure to promptly pay its subcontractors and/or suppliers after the prime has been paid by the project owner;
(iii) a failure to reimburse the department, after written demand is made, for an overpayment made by the department to the person under a contract;
(iv) a willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction; or
(v) serious or repeated violations of U.S. or Montana department of labor wage requirements.
(d) Knowingly violated Montana or federal disadvantaged business enterprise (DBE) programs. It includes violations of the department's DBE program (i.e., establishing or dealing with a known DBE "front"; dealing with a DBE which he knows is not performing a "commercially useful function"; or performing part of the DBE's required work; or not making prompt payment as required by law to DBE subcontractors or suppliers) ;
(e) Has done, is doing, or is attempting to do business with, a debarred, suspended or otherwise ineligible person on a department project or contract while knowing of the debarment, suspension or ineligibility;
(f) Has not timely paid all required taxes (i.e., fuel taxes) , fees, charges or wages in connection with its work on a project(s) , or has not procured all legally-required permits or notices for the due and lawful prosecution of its work;
(g) Has not observed or complied with significant required laws or regulations in the accomplishment of its work; or
(h) For any other cause of so serious or compelling a nature that it affects the present responsibility of the person.
(2) For purposes of these rules, an indictment or the filing of criminal charges of offenses enumerated in these rules against the person shall constitute adequate evidence for purposes of suspension.
| 18.3.105 | PROCEDURES |
(2) The administrator of the division concerned with the alleged conduct or contract will obtain any information that may be readily obtained on the alleged conduct. If the administrator, deputy director, or department's legal counsel initially determines that there exists credible evidence that the person has committed a violation set forth above, they shall notify the director in writing of the known information supporting or rebutting such a determination.
(3) If the director, in his discretion, agrees that, from the information available, credible evidence exists that the person has committed a violation set forth above, the director shall mail, certified return receipt requested, a written notice to the person. The notice shall contain a statement of the pertinent facts, the alleged violations being considered, notice of the right to an administrative hearing, and that debarment is being considered. If debarment is proposed based on a debarment by another state or federal agency, a copy of that debarment or its notice letter will be attached.
(4) A person against which debarment is proposed shall be provided an opportunity for administrative hearing. A written request for hearing must be received by the department's chief counsel within 14 calendar days after the date of the mailing of the notice of the determination.
(a) Failure to timely submit a written request constitutes a waiver of the opportunity for administrative hearing and appeal, and a final debarment decision by default may then be entered by the director, which is not subject to appeal.
(b) Default orders will use the procedure stated in Model Rule 10, ARM 1.3.214.
(5) The person against whom debarment is being considered has the right to be accompanied, represented and advised by counsel, and to appear in person or by or with counsel. Counsel will not be provided by or at the expense of the department.
(6) Service of notice and later documents for the hearing will be complete and effective when made upon a person, or his counsel, if he has counsel.
(7) Upon timely receipt of a written request for an administrative hearing, the director shall appoint a hearing examiner. A written notice appointing the hearing examiner shall be issued by the director, and sent to the person requesting the hearing.
(8) The proceedings may be handled informally using the procedures stated in model Rule 11, ARM 1.3.215.
(9) A notice of hearing shall be sent by the hearing examiner to the person requesting the administrative hearing. The notice shall include:
(a) A statement of the date, time, and location of the hearing;
(b) A reference to the provisions of the violation(s) involved;
(c) A short, understandable statement of the matters asserted; and
(d) A statement advising the party of its right to be represented by legal counsel at the hearing.
(10) The hearing examiner shall not engage in communications prohibited by 2-4-613, MCA.
(11) For administrative hearings:
(a) The department shall record any administrative hearing conducted and maintain an administrative record of the proceedings. The administrative record shall include:
(i) the initial determination of the administrator;
(ii) the written request for administrative hearing;
(iii) the appointment of the hearing examiner;
(iv) the notice of administrative hearing;
(v) the evidence offered to, or considered by, the hearing examiner;
(vi) any objections and rulings thereon;
(vii) all matters placed on the record at the administrative hearing;
(viii) all briefs or memoranda submitted by the parties; and
(ix) any transcript made of the proceedings.
(b) The hearing examiner presiding over the hearing shall have the powers and duties stated in 2-4-611(3) , MCA.
(c) Discovery will be available to the parties in accordance with Rules 26, 28 through 37 (except Rule 37(b) (1) and 37(b) (2) (d) ) of the Montana Rules of Civil Procedure in effect as of the date of the adoption of these rules. Provided that: all references in the Montana Rules of Civil Procedure to a "court" are considered to refer to the department; all references to the use of subpoena power are considered to refer to the power in these rules; references to "trial" are considered to refer to the hearing; all references to "plaintiff" are considered to refer to a "party"; all references to "clerk of court" are considered to refer to the department person designated by the director to keep documents filed in the case.
(i) If a party or other witness refuses to be sworn or refuses to answer any question after being directed to do so by the department, the refusal to obey the department's order shall be enforced as provided in these rules.
(ii) If a party seeking discovery from the department believes he has been prejudiced by a protective order issued by the department under Rule 26(c) , Montana Rules of Civil Procedure, or, if the department refuses to make discovery, the party may petition the District Court, First Judicial District for the County of Lewis and Clark, for review of the intermediate agency action under 2-4-701, MCA.
(d) The department and the hearing examiner shall have the same authority, powers, and responsibilities for issuing and enforcing subpoenas and subpoena duces tecum as stated in Model Rule 25, ARM 1.3.230.
(e) The usual order of presentation at a hearing shall be:
(i) Argument and the submission of evidence and testimony on behalf of the department;
(ii) Argument and the submission of evidence and testimony from the party requesting the hearing; and
(iii) The introduction of rebuttal evidence and testimony by the department.
(f) The hearing may be continued with recesses as determined by the hearing examiner.
(g) Evidence introduced at the hearing may be received in written form or oral testimony given under oath or affirmation. Parties have a right to cross-examine all persons testifying at a hearing.
(i) The hearing examiner may consider hearsay evidence for the purpose of supplementing or explaining other evidence. A decision should not ordinarily be based wholly upon hearsay evidence, however, circumstances in some cases may require it (i.e., debarment based on a prior debarment in another jurisdiction) , at the discretion of the hearing examiner.
(ii) Judicially noticed facts are not hearsay.
(iii) Fraudulent, criminal or other seriously improper conduct of any individual (officer, director, shareholder, partner, 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 the benefits derived from the conduct will be evidence of such knowledge, approval or acquiescence.
(iv) The department's experience, technical competence, and specialized knowledge may be utilized in the evaluation of evidence.
(v) Exhibits shall be marked and the markings shall identify the party offering the exhibit. Exhibits shall be preserved by the department as part of the administrative record.
(h) Objections to offers of evidence must be made at the time of the offer and shall be noted in the administrative record. A hearing examiner may rule on evidentiary objections at the time of the hearing, after receipt of oral or written argument by the parties, or at the time of entry of the proposed decision.
(i) The person must present all potential and available grounds to contest the debarment, and failure to raise an issue before the hearing examiner will waive that issue's consideration on any appeal or potential judicial review.
(j) The department's burden of proof for the hearing will be a preponderance of the admissible evidence presented. That is proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not.
(k) After the hearing and any required post-hearing briefs and submissions, the hearing examiner shall enter a proposed decision, which shall be served on all parties by certified mail, return receipt requested, to their designated agent. The proposed decision shall contain findings of fact and conclusions of law supported by the administrative record, and recommend a proposed action to the director.
(12) The director shall within 30 days review the proposed
decision and enter the department's final decision. The director may accept, reject or modify the proposed decision. The director's final decision shall contain findings of fact and conclusions of law, and shall be mailed to the parties by certified mail, return receipt requested.
(13) The sole method of appeal of the director's decision is as follows:
(a) The director's decision is final unless appeal is made
to the commission. An appeal may only be made if it is submitted to the director in writing, and only if received by the director's office no later than 10 calendar days after date of mailing of the final decision to the designated agent of the appealing party. If delivery of the final decision is refused or for any other reason not able to be delivered to the designated agent (i.e., returned as undeliverable, addressee moved and left no forwarding address, etc.) , the decision will be final and the 10-day appeal period will begin to toll on the date the certified letter is returned to the director's office.
(b) Appeal of the director's decision is to the commission, which shall review the administrative record of the proceedings and its findings and conclusions only. The commission will determine whether or not the findings and conclusions are supported by that record. The commission may affirm, reject or modify the director's decision. If the commission determines that the record does not support the findings and conclusions, it may refer the matter back to the director for any action the commission deems appropriate and directs.
(c) The commission's review will not be a de novo hearing, nor will it receive written briefs from a party except on the issue of whether or not the findings and conclusions are supported by the administrative record. The commission will not hear oral argument or testimony, or receive any evidence that was not presented in the hearing.
(d) A stenographic record of the oral proceedings of the administrative hearing will be transcribed upon receipt of a written request. The department may arrange for the record to be transcribed by a business, rather than by the department, in which case the requester will be responsible to make direct arrangements for payment with the firm. Otherwise, the estimated cost of transcription and mailing must be paid by the requester prior to transcription of the record. Any balance of payment due must be received by the department prior to delivery, and any amount determined to be excess shall be returned to the requester upon completion of the transcript.
(e) All final decisions and orders shall be available for
public inspection on request. Copies of final decisions and orders will be given to the public on request on payment of reasonable costs.
(14) The period of debarment will be commensurate with the
seriousness of the cause(s) , and be for a specified term. While the term will usually not exceed three years, if circumstances warrant, a longer period of debarment may be imposed.
(a) The date(s) of the offenses for which debarment is imposed are inapplicable to a debarment period and participation in projects or contracts.
(b) Projects or contracts already awarded to a person at the time it is debarred will not be affected, except as follows: A bid may be rejected, or contract award rescinded, if a person submits the bid or is awarded the contract after the date on which it was debarred by any agency or in any jurisdiction.
(15) The procedures herein provided are mandatory for anyone wishing to contest a debarment. Failure to properly request a hearing, present all defenses, or to perfect an appeal
will be a failure to exhaust administrative remedies, and will absolutely waive the protesting party's right to any judicial review that might otherwise be available.
(16) Reinstatement of a debarred person occurs automatically after the completion of the entire time period of the debarment.
| 18.3.106 | SUSPENSION |
(2) The scope of a suspension is the same as the scope of a debarment (see ARM 18.3.103, above) .
(3) Suspensions may last for a reasonable period pending the completion of an investigation and any debarment proceedings, but in no case more than six months. If legal or debarment proceedings are not initiated within six months after the date of the suspension notice, the suspension shall be terminated.
(4) Suspension will be imposed by written notice from the director, either at the director's discretion or on the written recommendation of the administrator of an affected division or the department's legal counsel.
(5) The suspended person will be immediately provided a copy of the director's letter imposing its suspension, the reasons therefor, that the suspension is temporary pending investigation of the reasons stated, and the suspension's effect, and the procedures available to the person under (6) , below.
(6) In the absence of a department determination that public safety could be jeopardized if the suspension is not immediately imposed, the suspension will be effective five calendar days after the date of notice. Before the effective date of the suspension or within five calendar days thereafter, the suspended person may request a hearing to contest the suspension. If a hearing is timely requested, the director shall appoint a hearing officer, who will schedule a hearing. The hearing will be held not more than 10 calendar days after the request for hearing is received by the director. The hearing officer shall set a date, time, and place for the hearing, at which the department will present its reasons for seeking suspension of the person. The person shall be given the opportunity to respond to the department's reasons. Within five working days after the hearing, the hearing officer shall submit to the director:
(a) findings and conclusions as to whether or not a suspension is warranted; and
(b) a proposed order for the director's consideration;
(c) The director will issue the department = s decision on the issues raised by the person within five workdays of receipt of the findings, conclusions, and proposed order.
(7) However, no opportunity to contest the suspension will be provided if:
(a) the suspension is based upon the filing of a felony information or indictment, or conviction or civil judgment, involving actions applicable under ARM 18.3.104; or,
(b) a determination is made in writing by the director, based on the advice of department = s legal counsel, that the substantial interests of the state in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced by the above (e.g., interfering with a state or federal criminal investigation, having to identify a confidential informant, etc.) .
(8) If the person wishes to appeal the director = s decision, the sole appeal will be to the Montana transportation commission, which will review the written record of the appeal either at a regular or special meeting, consistent with the commission = s policies for public notice of meetings. The commission will not receive new evidence, but will only review the documentation that was available to the director, together with the transcript of the person = s appearance before the
director. The commission may, upon majority vote of its members, hear oral argument on the issues involved. The commission will issue its written decision within 10 working days of its meeting.
(9) The decision of the commission will be final. It is a discretionary decision made in the commission = s status as a quasi-judicial board.
(10) The time of suspension may, but need not, be included in any eventual period of debarment, at the discretion of the director or commission.
| 18.3.201 | STANDARDS OF RESPONSIBILITY |
�
that may be considered in determining whether the standard of responsibility has been met are whether a prospective contractor (however that person will be participating in a department project) :
(a) has available the appropriate financial, material, equipment, facility, and personnel resources and expertise, or the reasonable ability to obtain them, necessary to indicate the capability to meet all contractual requirements;
(b) has a satisfactory record of integrity (e.g., has not violated department requirements, such as the DBE program, has not filed false or inflated claims on contracts, has not improperly used dyed fuels on department projects, etc.) on any public works contracts;
(c) is qualified legally to contract with the commission;
(d) has not failed to supply any necessary information in connection with any inquiry concerning the responsibility; and
(e) has a satisfactory record of past performance and contract compliance on any public works contracts.
(2) Nothing shall prevent the commission from establishing additional responsibility standards for a particular contract or all future contracts, provided that these additional standards are set forth in the contract documents (e.g., its specifications) .
(3) A prospective contractor must supply information requested by the commission concerning the responsibility of the contractor. � If the contractor fails to supply the requested information, the commission shall base a determination of responsibility upon any available information or may find the prospective contractor nonresponsible.
(4) The prospective contractor may demonstrate the availability of necessary financing, equipment, facilities, expertise, and personnel by submitting upon request:
(a) evidence that the contractor possesses the necessary items;
(b) acceptable plans to subcontract for the necessary items; or
(c) a documented commitment from, or explicit arrangement with, a satisfactory source to provide the necessary items.
(5) If a bidder who otherwise may have been awarded a contract is found nonresponsible, or if a person is otherwise found nonresponsible, a written determination of nonresponsibility setting forth the basis of the finding must be prepared by the commission. � The determination must be made part of the contract file and a copy of the determination mailed to the affected bidder. � The determination may be for a stated period of time, although that is not necessary.