Federal and state laws contain many construction-related requirements that are routine for traditional government contracts and contractors. Not routine, however, are applications of these requirements outside the realm of traditional “public works” projects. Private developers, contractors and quasi-governmental entities often are surprised to learn that these public contracting requirements invade projects not thought to be typical government contract projects.
This happens most often where private development projects contain one or more public incentives. Examples include tax credits, special development districts, tax exemptions, tax abatement, and development bonds. Additionally, governments often condition land use approvals of private development projects on the developer’s agreement to make public improvements (often in the nature of traffic-related improvements such as road widening, turn-lane construction, and signalization). Depending on the structure of the incentive or the improvement, the law may impose one or more of the following requirements.
Contractors must give careful consideration to the contracting entities, to the nature and structure of the incentive and to the local laws and ordinances. Contractors easily can find themselves caught by subtle differences. For example, in Missouri a public hospital district is not an “agent of the state,” but a quasi-public utility company is an “agency of the state.” Failure to navigate through the subtleties and to comply with public contracting requirements may result in severe consequences, ranging from fines and other financial penalties to contract termination, debarment, and criminal sanctions.
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