Chapter 279 — Public Contracts and Purchasing

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2001 EDITION

PURCHASING AND BIDDING GENERALLY

279.005 Policy of competition in public contracts. (1) It is the policy of the State of Oregon to encourage public contracting competition that supports openness and impartiality to the maximum extent possible.

(2) The Legislative Assembly finds that:

(a) Competition exists not only in prices, but in the technical competence of suppliers, in their ability to make timely deliveries and in the quality and performance of their products and services and that a balance must exist between performance competition and price competition;

(b) The nature of effective competition varies with the product or service being procured and that while competitive sealed bids are a common method of procurement, it is not always the most advantageous or practical method of source selection; and

(c) Meaningful competition can be achieved through a variety of methods when procuring products or services. The methods include but are not limited to:

(A) Price competition as represented by the initial or acquisition price;

(B) Competition as represented by price and performance evaluations of the competing items and suppliers;

(D) Competition as represented by evaluation of the capabilities of the bidders or proposers to perform the services followed by a negotiation on price; or

(E) Competition as represented by another method of procurement that is reasonably calculated to satisfy the public contracting agency’s need. [1993 c.724 §19]

279.007 Methods of fostering competition. (1) All public contracts shall be made under conditions that foster competition among a sufficient number of potential suppliers that offer a wide spectrum of products and services and that represent a broad marketplace. Fostering competition shall be reflected in:

(a) Writing specifications and procurement documents in a simple and easy to read format;

(b) Searching for new sources of supply;

(d) Everyday courtesy shown to prospective suppliers and contractors; and

(e) The way information on contracting opportunities is provided to suppliers, including but not limited to advertisement in publications of general circulation or the Oregon Department of Administrative Services’ electronic bulletin board services, and any other reasonable methods that encourage competition and that are consistent with ORS 279.025.

(2) A public contracting agency may evaluate every aspect of competition in its effort to purchase products or services, choose the appropriate solicitation process in accordance with the criteria described in ORS 279.005 and arrive at offers that represent optimal value to the state. [1993 c.724 §20]

279.008 [Repealed by 1975 c.771 §33]

279.009 Exemption of public improvement contracts from ORS 279.005 and 279.007. Any contract of public improvement, as defined in ORS 279.011, shall not be subject to the requirements of ORS 279.005 and 279.007. [1993 c.724 §39]

Note: 279.009 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 279 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

279.010 [Repealed by 1975 c.771 §33]

279.011 Definitions for ORS 279.005 to 279.111. As used in ORS 279.005 to 279.111:

(1) "Board" means a local contract review board created pursuant to ORS 279.055.

(2) "Department" means the Oregon Department of Administrative Services.

(3) "Director" means the Director of the Oregon Department of Administrative Services.

(4) "Emergency" means circumstances that could not have been reasonably foreseen that create a substantial risk of loss, damage, interruption of services or threat to the public health or safety that requires prompt execution of a contract to remedy the condition.

(5) "Findings" means the justification for an agency conclusion that includes, but is not limited to, information regarding:

(a) Operational, budget and financial data.

(b) Public benefits.

(d) Specialized expertise required.

(e) Public safety.

(f) Market conditions.

(g) Technical complexity.

(h) Funding sources.

(6) "Public contract" means any purchase, lease or sale by a public agency of personal property, public improvements or services other than agreements which are for personal service.

(7) "Public agency" or "public contracting agency" means any agency of the State of Oregon or any political subdivision thereof authorized by law to enter into public contracts and any public body created by intergovernmental agreement.

(8) "Public improvement" means projects for construction, reconstruction or major renovation on real property by or for a public agency. "Public improvement" does not include emergency work, minor alteration, ordinary repair or maintenance necessary in order to preserve a public improvement. [1975 c.771 §1; 1979 c.196 §1; 1979 c.869 §1a; 1981 c.54 §1; 1983 c.690 §2; 1991 c.20 §1; 1993 c.500 §29; 1997 c.685 §1]

279.012 [Repealed by 1975 c.771 §33]

279.013 [1975 c.771 §2; 1977 c.456 §1; 1979 c.195 §1; 1981 c.466 §1; 1981 c.528 §5; 1981 c.712 §1; repealed by 1983 c.690 §28]

279.014 [Amended by 1967 c.202 §1; 1973 c.42 §1; repealed by 1975 c.771 §33]

279.015 Competitive bidding; exceptions; exemptions. (1) Subject to the policies and provisions of ORS 279.005 and 279.007, all public contracts shall be based upon competitive bids or proposals except:

(a) Contracts made with other public agencies or the federal government.

(b) Contracts made with qualified nonprofit agencies providing employment opportunities for disabled individuals.

(d) A contract for products, services or supplies if the value of the contract is less than $5,000.

(e) Insurance and service contracts as provided for under ORS 414.115, 414.125, 414.135 and 414.145.

(f) Contracts for repair, maintenance, improvement or protection of property obtained by the Director of Veterans’ Affairs under ORS 407.135 and 407.145 (1).

(g) Contracts between public agencies utilizing an existing solicitation or current requirement contract of one of the public agencies that is party to the contract for which:

(A) The original contract met the requirements of this chapter;

(B) The contract allows other public agency usage of the contract; and

(h) If a project is competitively bid and all responsive bids from responsible bidders exceed the public agency’s cost estimate, the public agency, in accordance with rules adopted by the public agency, may negotiate with the lowest responsive, responsible bidder, prior to awarding the contract, in order to solicit value engineering and other options to attempt to bring the project within the agency’s cost estimate. A negotiation with the lowest responsive, responsible bidder pursuant to this paragraph shall not result in the award of the contract to that bidder if the scope of the project is significantly changed from the original bid proposal. Notwithstanding any other provision of law, the records of a bidder used in contract negotiation pursuant to this paragraph are not subject to public inspection until after the negotiated contract has been awarded or the negotiation process has been terminated.

(2) Subject to subsection (6)(b) of this section, the Director of the Oregon Department of Administrative Services or a local contract review board may exempt certain public contracts or classes of public contracts from the competitive bidding requirements of subsection (1) of this section upon approval of the following findings submitted by the public contracting agency seeking the exemption:

(a) It is unlikely that such exemption will encourage favoritism in the awarding of public contracts or substantially diminish competition for public contracts; and

(b) The awarding of public contracts pursuant to the exemption will result in substantial cost savings to the public contracting agency. In making such finding, the director or board may consider the type, cost, amount of the contract, number of persons available to bid and such other factors as may be deemed appropriate.

(3)(a) Before final adoption of the findings required by subsection (2) of this section exempting a contract for a public improvement from the requirement of competitive bidding, a public agency shall hold a public hearing.

(b) Notification of the public hearing shall be published in at least one trade newspaper of general statewide circulation a minimum of 14 days prior to the hearing.

(c) The notice shall state that the public hearing is for the purpose of taking comments on the agency’s draft findings for an exemption from the competitive bidding requirement. At the time of the notice, copies of the draft findings shall be made available to the public. At the option of the public agency, the notice may describe the process by which the findings are finally adopted and may indicate the opportunity for any further public comment.

(d) At the public hearing, the public agency shall offer an opportunity for any interested party to appear and present comment.

(e) If a public agency is required to act promptly due to circumstances beyond its control that do not constitute an emergency, notification of the public hearing can be published simultaneously with the agency’s solicitation of contractors for the alternative public contracting method, as long as responses to the solicitation are due at least five days after the meeting and approval of the findings.

(4) A public contract also may be exempted from the requirements of subsection (1) of this section if:

(a) Emergency conditions require prompt execution of the contract;

(b) In case of sale of surplus property by a public agency, the number, value and nature of the items to be sold make it probable that the cost of conducting a sale by competitive bidding will be such that a liquidation sale will result in substantially greater net revenue to the public agency; or

(c)(A) The public contract is made between regularly organized fire departments, as defined in ORS 652.050, for fire protection equipment, as defined in ORS 476.005, and:

(i) The recipient regularly organized fire department makes a written request for the fire protection equipment to the transferor regularly organized fire department;

(ii) The fire protection equipment is surplus to or unusable by the transferor;

(iii) The total fair market value of fire protection equipment received by the recipient does not exceed $50,000 per calendar year; and

(iv) The transferor holds a public hearing, with notice given as outlined in subsection (3)(b) of this section, and finds that the public contract is in the public’s interest.

(B) As used in subparagraph (A) of this paragraph, "public contract" includes a sale at no cost.

(5) The director or board shall adopt rules allowing the governing body of a public agency and the officer of a public agency for contracts under $50,000 to declare that an emergency exists and establishing procedures for determining when the conditions in subsection (4)(a) of this section are present. The rules shall prescribe that if an emergency is declared, any contract awarded under this subsection and subsection (4)(a) of this section must be awarded within 60 days following declaration of the emergency, unless the director or board grants an extension.

(6) In granting exemptions pursuant to subsection (2)(a) and (b) of this section, the director or board shall:

(a) Where appropriate, direct the use of alternate contracting and purchasing practices that take account of market realities and modern or innovative contracting and purchasing methods, which are also consistent with the public policy of encouraging competition.

(b) Require and approve or disapprove written findings by the public contracting agency that support the awarding of a particular public contract or a class of public contracts, without the competitive requirements of subsection (1) of this section. The findings must show that the exemption of a contract or class of contracts complies with the requirements of subsection (2)(a) and (b) of this section.

(7) A written agreement under ORS chapter 190 is not necessary under subsection (1)(g) of this section if the arrangement is between or among units of local government. [1975 c.771 §3; 1977 c.304 §6; 1983 c.244 §1; 1983 c.590 §10; 1983 c.690 §3a; 1987 c.538 §1; 1987 c.777 §1; 1989 c.224 §40; 1989 c.454 §1; 1993 c.724 §21; 1995 c.612 §17; 1997 c.685 §2; 1997 c.802 §8a; 1999 c.59 §72; 2001 c.113 §1]

279.016 [Amended by 1971 c.481 §1; repealed by 1975 c.771 §33]

279.017 Specifications for contracts; exemptions. (1) Specifications for public contracts shall not expressly or implicitly require any product by any brand name or mark, nor the product of any particular manufacturer or seller unless the product is exempt under subsection (2) of this section.

(2) The Director of the Oregon Department of Administrative Services or a local contract review board may exempt certain products or classes of products from subsection (1) of this section upon any of the following findings:

(a) It is unlikely that such exemption will encourage favoritism in the awarding of public contracts or substantially diminish competition for public contracts;

(b) The specification of a product by brand name or mark, or the product of a particular manufacturer or seller, would result in substantial cost savings to the public agency;

(d) Efficient utilization of existing equipment or supplies requires the acquisition of compatible equipment or supplies. [1975 c.771 §4; 1983 c.690 §4; 1997 c.802 §9]

279.018 [Repealed by 1975 c.771 §33]

279.019 Exemption procedure; appeal. (1) Exemptions granted by the Director of the Oregon Department of Administrative Services pursuant to ORS 279.015 (2) or 279.017 (2) constitute rulemaking and not contested cases under ORS 183.310 to 183.550. However, an exemption granted with regard to a specific contract shall be granted by order of the director, which order shall set forth findings supporting the decision of the director to grant or deny the request for exemption. Such order shall be reviewable pursuant to ORS 183.484 and shall not constitute a contested case order. Jurisdiction for review of the order shall be with the Circuit Court of Marion County. The court may award costs and attorney fees to the prevailing party.

(2) Any person except the public contracting agency or anyone representing it may bring a petition for a declaratory judgment to test the validity of any rule adopted by the director under ORS 279.015 and 279.017 in the manner provided in ORS 183.400.

(3) Any person except the public contracting agency or anyone representing it may bring an action for writ of review pursuant to ORS chapter 34 to test the validity of any exemption granted pursuant to ORS 279.015, 279.017 and 279.055 by a board. [1975 c.771 §6; 1983 c.690 §5]

279.020 [Repealed by 1975 c.771 §33]

279.021 Preferences; foreign contractor. (1) In all public contracts, the public contracting agency shall prefer goods or services that have been manufactured or produced in this state if price, fitness, availability and quality are otherwise equal.

(2)(a) Where a public contract is awarded to a foreign contractor and the contract price exceeds $10,000, the contractor shall promptly report to the Department of Revenue on forms to be provided by the Department of Revenue the total contract price, terms of payment, length of contract and such other information as the Department of Revenue may require before final payment can be received on the public contract. The public contracting agency shall satisfy itself that the requirement of this subsection has been complied with before it issues a final payment on a public contract.

(b) For purposes of this subsection, a foreign contractor is one who is not domiciled in or registered to do business in the State of Oregon. [1975 c.771 §5]

279.022 [Repealed by 1975 c.771 §33]

279.023 Least cost policy for public improvements; costs estimates in budget process; record of costs. (1) It is the policy of the State of Oregon that public agencies shall make every effort to construct public improvements at the least cost to the public agency.

(2) Not less than 30 days prior to adoption of its budget for the subsequent budget period, each public agency shall prepare and file with the Commissioner of the Bureau of Labor and Industries a list of every public improvement known to the agency that the agency plans to fund in the budget period, identifying each improvement by name and estimating the total on-site construction costs. The list shall also contain a statement as to whether the agency intends to perform the construction by a private contractor. If the agency intends to perform construction work using the agency’s own equipment and personnel on a project estimated to cost more than $125,000, then the agency shall also show that its decision conforms to the policy stated in subsection (1) of this section. The list is a public record and may be revised periodically by the agency.

(3) Before a public agency constructs a public improvement with its own equipment or personnel:

(a) If the estimated cost exceeds $125,000, the public agency shall prepare adequate plans and specifications and the estimated unit cost of each classification of work. The estimated cost of the work shall include a reasonable allowance for the cost, including investment cost, of any equipment used. As used in this paragraph, "adequate" means sufficient to control the performance of the work and to assure satisfactory quality of construction by the public agency personnel.

(b) The public agency shall cause to be kept and preserved a full, true and accurate account of the costs of performing the work, including all engineering and administrative expenses and the cost, including investment costs, of any equipment used. The final account of the costs shall be a public record.

(4) Subsections (2) and (3) of this section do not apply to any public agency when the public improvement is to be used for the distribution or transmission of electric power.

(5) For purposes of this section, resurfacing of highways, roads or streets at a depth of two or more inches and at an estimated cost that exceeds $125,000 is a public improvement. [1975 c.771 §7; 1979 c.869 §2; 1981 c.281 §1; 1987 c.776 §2; 1997 c.239 §1]

279.024 [Repealed by 1975 c.771 §33]

279.025 Requirements for advertisement for bids. (1) An advertisement for bids shall be published at least once in at least one newspaper of general circulation in the area where the contract is to be performed and in as many additional issues and publications as the public contracting agency may determine. The Director of the Oregon Department of Administrative Services or a local contract review board, by rule or order, may authorize advertisements for bids to be published electronically instead of in a newspaper of general circulation if the director or board determines that electronic advertisements for bids are likely to be cost effective. If the contract is for a public improvement with an estimated cost in excess of $125,000, the advertisement for bids shall be published in at least one trade newspaper of general statewide circulation. The director or board may, by rule, require an advertisement for bids to be published more than once or in one or more additional publications.

(2) All advertisements for bids shall state:

(a) If the contract is for a public work subject to ORS 279.348 to 279.380 or the Davis-Bacon Act (40 U.S.C. 276a);

(b) The date and time after which bids will not be received, which shall be not less than five days after the date of the last publication of the advertisement;

(c) The date that prequalification applications must be filed under ORS 279.039 (1) and the class or classes of work for which bidders must be prequalified if prequalification is a requirement;

(d) The character of the work to be done or the material or things to be purchased;

(e) The office where the specifications for the work, material or things may be reviewed;

(f) The name and title of the person designated for receipt of bids; and

(g) The date, time and place that the public contracting agency will publicly open the bids. [Formerly 279.065; 1977 c.289 §1; 1979 c.282 §1; 1983 c.690 §6; 1985 c.724 §1; 1987 c.741 §18; 1987 c.776 §1; 1987 c.865 §2; 1991 c.197 §1; 1997 c.239 §2; 1997 c.802 §11; 1999 c.88 §1]

279.026 [Repealed by 1975 c.771 §33]

279.027 Requirements for bid documents and bids; disclosure of first-tier subcontractors. (1) A public contracting agency preparing bid documents for a public contract shall, at a minimum, include:

(a) A statement that, if the contract is for a public work subject to ORS 279.348 to 279.380 or the Davis-Bacon Act (40 U.S.C. 276a), no bid will be received or considered by the public contracting agency unless the bid contains a statement by the bidder as a part of its bid that the provisions of ORS 279.350 or 40 U.S.C. 276a are to be complied with;

(b) The date and time after which bids will not be received, which shall be not less than five days after the date of the last publication of the advertisement;

(c) The date that prequalification applications must be filed under ORS 279.039 (1) and the class or classes of work for which bidders must be prequalified if prequalification is a requirement;

(d) The character of the work to be done or the material or things to be purchased;

(e) The office where the specifications for the work, material or things may be reviewed;

(f) The name and title of the person designated for receipt of bids;

(g) The date, time and place that the public contracting agency will publicly open the bids;

(h) A statement that each bid must identify whether the bidder is a resident bidder, as defined in ORS 279.029;

(i) A statement that the public contracting agency may reject any bid not in compliance with all prescribed public bidding procedures and requirements and may reject for good cause any or all bids upon a finding of the agency that it is in the public interest to do so;

(j) Information addressing whether a contractor or subcontractor must be licensed under ORS 468A.720; and

(k) A statement that no bid for a construction contract shall be received or considered by the public contracting agency unless the bidder is registered with the Construction Contractors Board or licensed by the State Landscape Contractors Board as required by ORS 671.530.

(2) All bids made to the public contracting agency pursuant to ORS 279.015 and 279.025 shall be:

(a) In writing.

(b) Filed with the person designated for receipt of bids by the public contracting agency.

(3)(a) Within four working hours after the date and time of the deadline when the bids are due to the public contracting agency for a public improvement, a bidder shall submit to the public contracting agency a disclosure of the first-tier subcontractors that:

(A) Will be furnishing labor or will be furnishing labor and materials in connection with the public improvement; and

(B) Will have a contract value that is equal to or greater than five percent of the total project bid or $15,000, whichever is greater, or $350,000 regardless of the percentage of the total project bid.

(b) For each contract to which this subsection applies, the public contracting agency shall designate a deadline for submission of bids that has a date and time that is on Monday through Thursday or that is on Friday prior to 12 noon.

(d) This subsection does not apply to public contracts for public improvements that have been exempted from competitive bidding requirements under ORS 279.015 (2).

(4) The disclosure of first-tier subcontractors under subsection (3) of this section shall include:

(a) The name of each subcontractor; and

(b) The category of work that each subcontractor will be performing.

(5) A public contracting agency shall accept the subcontractor disclosure. The public contracting agency shall consider the bid of any contractor that does not submit a subcontractor disclosure to the public contracting agency to be a nonresponsive bid and may not award the contract to the contractor. A public contracting agency is not required to determine the accuracy or the completeness of the subcontractor disclosure.

(6) After having been opened, the bids and the subcontractor disclosures shall be filed for public inspection.

(7) A surety bond, irrevocable letter of credit issued by an insured institution as defined in ORS 706.008, cashier’s check or certified check of each bidder shall be attached to all bids as bid security unless the contract for which a bid is submitted has been exempted from this requirement pursuant to ORS 279.033. Such security shall not exceed 10 percent of the amount bid for the contract. [Formerly 279.070; 1997 c.351 §2; 1999 c.88 §2; 1999 c.689 §3; 2001 c.104 §86; 2001 c.507 §1]

Note: Section 6, chapter 507, Oregon Laws 2001, provides:

Sec. 6. Section 4 of this 2001 Act [279.323] and the amendments to ORS 279.027, 279.322 and 279.722 by sections 1, 2 and 5 of this 2001 Act apply to public contracts first advertised on or after January 1, 2002. [2001 c.507 §6]

279.028 [Repealed by 1975 c.771 §33]

279.029 Award of contract; bond; waiver of bond in case of emergency. (1) After the bids are opened as required by ORS 279.027, and after a determination is made that a contract is to be awarded, the public contracting agency shall award the contract to the lowest responsible bidder.

(2) In determining the lowest responsible bidder, a public contracting agency shall:

(a) If the contract is for a public improvement, check the list created by the Construction Contractors Board under ORS 701.227 for bidders who are not qualified to hold a contract for a public improvement; and

(b) For the purpose of awarding the contract, add a percent increase on the bid of a nonresident bidder equal to the percent, if any, of the preference given to that bidder in the state in which the bidder resides.

(3) The Oregon Department of Administrative Services on or before January 1 of each year shall publish a list of states that give preference to in-state bidders with the percent increase applied in each such state. The public contracting agency may rely on the names of states and percentages so published in determining the lowest responsible bidder without incurring any liability to any bidder.

(4) The successful bidder shall:

(a) Promptly execute a formal contract.

(b) If the contract is for a public improvement, execute and deliver to the public contracting agency a good and sufficient bond, to be approved by the public contracting agency, in a sum equal to the contract price for the faithful performance of the contract. In lieu of a surety bond, the public contracting agency may permit the successful bidder to submit a cashier’s check or certified check in an amount equal to 100 percent of the contract price. If the public improvement contract is with a single person to provide both design and construction of a public improvement, the obligation of the surety bond, or the obligation of the bidder on the cashier’s check or certified check, for the faithful performance of the contract required by this paragraph, shall be also for the preparation and completion of the design and related services covered under the contract. Notwithstanding when a cause of action, claim or demand accrues or arises, the surety or the bidder on the cashier’s check or certified check shall not be liable after final completion of the contract, or longer if defined in the contract, for damages of any nature, economic or otherwise and including corrective work, attributable to the design aspect of a design-build project, or for the costs of design revisions needed to implement corrective work.

(5) In cases of emergency, or where the interest or property of the public contracting agency probably would suffer material injury by delay or other cause, the requirement of furnishing a good and sufficient bond for the faithful performance of any public contract may be excused, if a declaration of such emergency is made and concurred in by all members of the governing board of the public contracting agency.

(6) As used in this section:

(a) "Lowest responsible bidder" means the lowest bidder who is not on the list established by the Construction Contractors Board pursuant to ORS 701.227 and who has:

(A) Substantially complied with all prescribed public bidding procedures and requirements;

(B) Met the standards of responsibility. In determining if a prospective bidder has met the standards of responsibility, the public contracting agency shall consider whether a prospective bidder has:

(i) Available the appropriate financial, material, equipment, facility and personnel resources and expertise, or ability to obtain the resources and expertise, necessary to indicate the capability of the prospective bidder to meet all contractual responsibilities;

(ii) A satisfactory record of performance. The public contracting agency shall document the record of performance of a prospective bidder if the public contracting agency finds the prospective bidder not to be responsible under this sub-subparagraph;

(iii) A satisfactory record of integrity. The public contracting agency shall document the record of integrity of a prospective bidder if the public contracting agency finds the prospective bidder not to be responsible under this sub-subparagraph;

(iv) Qualified legally to contract with the public contracting agency; and

(v) Supplied all necessary information in connection with the inquiry concerning responsibility. If a prospective bidder fails to promptly supply information requested by the public contracting agency concerning responsibility, the public contracting agency shall base the determination of responsibility upon any available information, or may find the prospective bidder not to be responsible; and

(b) "Resident bidder" means a bidder that has paid unemployment taxes or income taxes in this state during the 12 calendar months immediately preceding submission of the bid, has a business address in this state and has stated in the bid whether the bidder is a "resident bidder" pursuant to this subsection.

(c) "Nonresident bidder" means a bidder who is not a "resident bidder" as defined by paragraph (b) of this subsection. [Formerly 279.075; 1981 c.466 §2; 1987 c.865 §1; 1999 c.462 §1; 1999 c.647 §§1,1a]

279.030 [Amended by 1971 c.659 §1; repealed by 1975 c.771 §33]

279.031 Return or retention of bid security. Upon the execution of the contract and bond by the successful bidder, the bid security of the successful bidder shall be returned to the bidder. The bidder who is awarded a contract and who fails promptly and properly to execute the contract or bond shall forfeit the bid security that accompanied the successful bid. The bid security shall be taken and considered as liquidated damages and not as a penalty for failure of the bidder to execute the contract and bond. The bid security of unsuccessful bidders may be returned to them when the bids have been opened and the contract has been awarded, and shall not be retained by the public body after the contract has been duly signed. [Formerly 279.080; 1981 c.712 §2]

279.032 [Repealed by 1975 c.771 §33]

279.033 Exemption of contracts from bid security and bond. The Director of the Oregon Department of Administrative Services or a local contract review board may exempt certain contracts or classes of contracts from the requirement for bid security and from the requirement that a good and sufficient bond be furnished to assure performance of the contract and payment of obligations incurred in the performance; provided, however, the public contracting agency may require bid security and a good and sufficient performance and payment bond even though the contract is of a class exempted by the director or board. [1975 c.771 §11; 1983 c.690 §7]

279.034 [Repealed by 1975 c.771 §33]

279.035 Rejection of bids. The public contracting agency may reject any bid not in compliance with all prescribed public bidding procedures and requirements, and may, for good cause, reject any or all bids upon a finding of the agency it is in the public interest to do so. In any case where competitive bids are required and all bids are rejected, and the proposed contract is not abandoned, new bids may be called for as in the first instance. [1975 c.771 §12; 1985 c.724 §2]

279.036 [Amended by 1969 c.607 §1; repealed by 1975 c.771 §33]

279.037 Disqualification from consideration for award of contracts; written decision required. (1)(a) A public contracting agency may disqualify a person from consideration for award of that agency’s contracts for the reasons listed in subsection (2) of this section after providing the person with notice and a reasonable opportunity to be heard.

(b) In lieu of the disqualification process described in paragraph (a) of this subsection, a public contracting agency contracting for a public improvement may petition the Construction Contractors Board to disqualify a person from consideration for award of that agency’s public improvement contracts for the reasons listed in subsection (2) of this section. The Construction Contractors Board shall provide the person with notice and a reasonable opportunity to be heard.

(c) A public contracting agency or the Construction Contractors Board may not disqualify a person under this section for a period of more than three years.

(2) A person may be disqualified from consideration for award of an agency’s contracts for any of the following reasons:

(a) The person has been convicted of a criminal offense as an incident in obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of such contract or subcontract.

(b) The person has been convicted under state or federal statutes of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty that currently, seriously and directly affects the person’s responsibility as a contractor.

(d) The person has committed a violation of a contract provision that is regarded by the public contracting agency or the Construction Contractors Board to be so serious as to justify disqualification. A violation may include but is not limited to a failure to perform the terms of a contract or an unsatisfactory performance in accordance with the terms of the contract. However, a failure to perform or an unsatisfactory performance caused by acts beyond the control of the contractor may not be considered to be a basis for disqualification.

(e) The person does not carry workers’ compensation or unemployment insurance as required by statute.

(3) A public contracting agency or the Construction Contractors Board shall issue a written decision to disqualify a person pursuant to this section. The decision shall:

(a) State the reasons for the action taken; and

(b) Inform the disqualified person of the appeal right of the person under:

(A) ORS 279.043 and 279.045 if the decision to disqualify was issued by a public contracting agency; or

(B) ORS 183.310 to 183.550 if the decision to disqualify was issued by the Construction Contractors Board.

(4) A copy of the decision issued under subsection (3) of this section shall be mailed or otherwise furnished immediately to the disqualified person. [1975 c.771 §13; 1977 c.289 §7; 1999 c.647 §2; 2001 c.546 §1]

279.038 [Repealed by 1975 c.771 §33]

279.039 Prequalification of bidders; notification. (1) Any public contracting agency may adopt a rule, resolution, ordinance or other regulation requiring mandatory prequalification for all persons desiring to bid for public contracts that are to be let by the agency. The rule, resolution, ordinance or other regulation authorized by this section shall include the time for submitting prequalification applications and a general description of the type and nature of the contracts that may be let. The prequalification application shall be in writing on a standard form prescribed by the Director of the Oregon Department of Administrative Services or a local contract review board.

(2) The public contracting agency shall within 30 days of the receipt of the prequalification application submitted pursuant to subsection (1) of this section, notify the prospective bidder if the prospective bidder is qualified or not based on the standards of responsibility listed in ORS 279.029 (6)(a)(B), the nature and type of contracts that the prospective bidder is qualified to bid on and the time period for which the prequalification is valid. If the public contracting agency does not prequalify the prospective bidder as to any contracts covered by the rule, resolution, ordinance or other regulation, the notice shall specify which of the standards of responsibility listed in ORS 279.029 (6)(a)(B) the prospective bidder failed to meet. Unless the reasons are specified, the bidder shall be deemed to have been prequalified in accordance with the application.

(3) If a public contracting agency subsequently discovers that a person heretofore prequalified under subsections (1) and (2) of this section is no longer qualified, the agency may revoke the prequalification upon reasonable notice to the prospective bidder; provided, however, that such revocation shall be invalid as to any contract for which an advertisement for bids has already been made under ORS 279.025. [1975 c.771 §14; 1977 c.289 §2; 1981 c.712 §3; 1983 c.690 §8; 1999 c.647 §3]

279.040 [Repealed by 1975 c.771 §33]

279.041 Application for prequalification; notification; investigation, revocation or revision. (1) When a public contracting agency permits or requires prequalification of bidders, a person who wishes to prequalify shall submit a prequalification application to the agency on a standard form prescribed by the Director of the Oregon Department of Administrative Services or a local contract review board. Within 30 days after receipt of a prequalification application, the public contracting officer shall investigate the prospective bidder as necessary to determine if the prospective bidder is qualified. The determination shall be made in less than 30 days, if practical, if the prospective bidder requests an early decision to allow the bidder as much time as possible to prepare a bid on a contract that has been advertised. In making its determination, the agency shall consider only the applicable standards of responsibility listed in ORS 279.029 (6)(a)(B). The agency shall promptly notify the person whether or not that person is qualified.

(2) If the agency finds that a prospective bidder is qualified, the notice shall state the nature and type of contracts that the person is qualified to bid on and the period of time for which the qualification is valid under the rule, resolution, ordinance or other regulation. If the agency finds the prospective bidder is not qualified as to any contracts covered by the rule, resolution, ordinance or other regulation, the notice shall specify the reasons found under ORS 279.029 (6)(a)(B) for not prequalifying the prospective bidder and inform the person of the right to a hearing under ORS 279.043 and 279.045.

(3) If a public contracting agency has reasonable cause to believe that there has been a substantial change in the conditions of a prequalified person and that the person is no longer qualified or is less qualified, the agency may revoke or may revise and reissue the prequalification after reasonable notice to the prequalified person. The notice shall state the reasons found under ORS 279.029 (6)(a)(B) for revocation or revision of the prequalification of the person and inform the person of the right to a hearing under ORS 279.043 and 279.045. A revocation or revision does not apply to any contract for which publication of advertisement for bids, in accordance with ORS 279.025, commenced prior to the date the notice of revocation or revision was received by the prequalified person. [1975 c.771 §15; 1977 c.289 §3; 1981 c.712 §4; 1983 c.690 §9; 1999 c.647 §4]

279.042 [Repealed by 1975 c.771 §33]

279.043 Appeal of disqualification. Any person who wishes to appeal disqualification as a bidder shall, within three business days after receipt of notice of disqualification, notify the public contracting agency that the person appeals the disqualification. Immediately upon receipt of such notice of appeal, a public contracting agency which is an agency of the State of Oregon shall notify the Director of the Oregon Department of Administrative Services. If the public contracting agency is a political subdivision of the state or a public body created by intergovernmental agreement, it shall notify the appropriate board. [1975 c.771 §17; 1977 c.289 §4; 1983 c.690 §10]

279.044 [Repealed by 1975 c.771 §33]

279.045 Appeal procedure; hearing; costs; judicial review. (1) The procedure for appeal from a disqualification or denial, revocation or revision of a prequalification by a public contracting agency shall be in accordance with this section and is not subject to ORS 183.310 to 183.550 except where specifically provided by this section.

(2) Promptly upon receipt of notice of appeal from a public contracting agency as provided for by ORS 279.043, the Director of the Oregon Department of Administrative Services or the local contract review board shall notify the person appealing and the public contracting agency of the time and place of the hearing. The director or board shall conduct the hearing and decide the appeal within 30 days after receiving the notification from the public contracting agency. The director or board shall set forth in writing the reasons for the decision.

(3) In the hearing the director or board shall consider de novo the notice of disqualification or denial, revocation or revision of a prequalification, the reasons listed in ORS 279.037 (2) on which the public contracting agency based the disqualification or the standards of responsibility listed in ORS 279.029 (6)(a)(B) on which the public contracting agency based the denial, revocation or revision of the prequalification and any evidence provided by the parties. In all other respects, hearings before the director shall be conducted in the same manner as a contested case under ORS 183.415 (3) to (6) and (9), 183.425, 183.440, 183.450 and 183.452.

(4) The director may allocate the director’s cost for the hearing between the person appealing and the public contracting agency whose disqualification or prequalification decision is being appealed. The allocation shall be based upon facts found by the director and stated in the final order which, in the director’s opinion, warrant such allocation of the costs. If the final order does not allocate the director’s costs for the hearing, such costs shall be paid as follows:

(a) If the decision to disqualify or deny, revoke or revise a prequalification of a person as a bidder is upheld, the director’s costs shall be paid by the person appealing the disqualification or prequalification decision.

(b) If the decision to disqualify or deny, revoke or revise a prequalification of a person as a bidder is reversed by the director, the director’s costs shall be paid by the public contracting agency whose disqualification or prequalification decision is the subject of the appeal.

(5) The decision of the director or board may be reviewed only upon a petition, filed within 15 days after the date of the decision, in the circuit court of the county in which the director or board has its principal office. The circuit court shall reverse or modify the decision only if it finds:

(a) The decision was procured by corruption, fraud or undue means.

(b) There was evident partiality or corruption on the part of the director or board or any of its members.

(c) There was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing or property referred to in the decision.

(6) The procedure provided in this section is the exclusive means of judicial review of the decision of the director or board. The judicial review provisions of ORS 183.480 and writs of review and mandamus as provided in ORS chapter 34, and other legal, declaratory and injunctive remedies are not available.

(7) The circuit court may, in its discretion, stay the letting of the contract which is the subject of the petition in the same manner as a suit in equity. In the event the court determines that there has been an improper disqualification or denial, revocation or revision of a prequalification and the contract has been let, the court may proceed to take evidence to determine the damages, if any, suffered by the petitioner and award such damages as the court may find as a judgment against the director or board. The court may award costs and attorney fees to the prevailing party. [1975 c.771 §18; 1977 c.289 §5; 1983 c.690 §11; 1985 c.757 §6; 1997 c.802 §12; 1999 c.448 §8; 1999 c.647 §5; 1999 c.849 §60; 2001 c.104 §87]

Note: The amendments to 279.045 by section 61, chapter 849, Oregon Laws 1999, become operative January 1, 2004. See section 62, chapter 849, Oregon Laws 1999. The text that is operative on and after January 1, 2004, including amendments by section 88, chapter 104, Oregon Laws 2001, is set forth for the user’s convenience.

279.045. (1) The procedure for appeal from a disqualification or denial, revocation or revision of a prequalification by a public contracting agency shall be in accordance with this section and is not subject to ORS 183.310 to 183.550 except where specifically provided by this section.

(a) The decision was procured by corruption, fraud or undue means.

(b) There was evident partiality or corruption on the part of the director or board or any of its members.

(c) There was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing or property referred to in the decision.

279.046 [Repealed by 1975 c.771 §33]

279.047 Effect of prequalification by Department of Transportation or Oregon Department of Administrative Services; personal service contract selection process for local government public improvements; rules. (1) If a person is prequalified with the Department of Transportation to perform contracts, or with the Oregon Department of Administrative Services to perform contracts, that person is rebuttably presumed qualified with any other public contracting agency for the same kind of work. When qualifying for the same kind of work with another public contracting agency, that person may submit proof of such prequalification in lieu of a prequalification application as required by ORS 279.039 (1) or as a request for prequalification under ORS 279.041 (1).

(2)(a) The Department of Transportation, the Oregon Department of Administrative Services or any other state public contracting agency shall adopt rules establishing a two-tiered selection process for when the department or agency executes contracts with engineers, architects and land surveyors to perform personal service contracts. This process shall apply only if:

(A) A public improvement is owned and maintained by a local government; and

(B) The Department of Transportation, the Oregon Department of Administrative Services or other state public contracting agency will serve as the lead state public contracting agency and will execute personal service contracts with engineers, architects and land surveyors for work on the public improvement project.

(b) The selection process required by paragraph (a) of this subsection shall require the lead state public contracting agency to select no fewer than the three most qualified consultants where feasible in accordance with ORS 279.057.

(c) The local government shall be responsible for the final selection of the consultant from the list of qualified consultants selected by the lead state public contracting agency or through an alternative process adopted by the local government.

(d) Nothing in this subsection applies to the selection process used by a local public contracting agency when the agency executes a contract directly with engineers, architects or land surveyors. [1975 c.771 §16; 1977 c.289 §6; 2001 c.712 §1]

279.048 [Repealed by 1975 c.771 §33]

279.049 Model rules generally; applicability to agencies. (1) The Attorney General shall prepare and maintain model rules of procedure appropriate for use by all public contracting agencies governing bid procedures, advertisements, the awarding of bids, retainage, claims, liens, bid security, payment and performance bonds and other matters involving public contracts, and may devise and publish forms for use therewith. The model rules prepared by the Attorney General under this section must be adopted by the Attorney General in the manner provided by ORS 183.310 to 183.550. Before adopting or amending any such rule, the Attorney General shall consult with the Director of the Oregon Department of Administrative Services, the Director of Transportation, representatives of county governments, representatives of city governments, representatives of school boards and other knowledgeable persons.

(2)(a) The Attorney General shall add to the model rules described in subsection (1) of this section a provision for procedures for the screening and selection of persons to perform architectural, engineering and land surveying personal service contracts. In developing such procedures, the Attorney General shall use the least restrictive processes allowed under ORS 183.341.

(b) The Attorney General shall add to the model rules described in subsection (1) of this section a two-tiered selection process for contracts executed with engineers, architects and land surveyors to perform personal service contracts as required by ORS 279.047.

(3) After each legislative session, the Attorney General shall review all laws passed by the Legislative Assembly that affect public contracting to determine if the model rules prepared under this section should be modified by the adoption of a new rule or by the amendment or repeal of an existing rule. If the Attorney General determines that a modification to the model rules is necessary, the Attorney General shall prepare the modification within such time as to allow the modification to take effect no later than 120 days after the effective date of the legislation that caused the rule to be modified. However, the Attorney General may prepare a modification to take effect 121 days or more after the effective date of the legislation if the Attorney General provides notice designating the time period within which the modification will take effect to the state agencies and persons listed in subsection (1) of this section.

(4) All public contracting agencies that have not established their own rules of procedure under subsection (5) of this section are subject to the model rules adopted by the Attorney General under this section, including all modifications to the model rules that the Attorney General may adopt.

(5)(a) A public contracting agency may elect to establish its own rules of procedure for public contracts that:

(A) Specifically state that the model rules adopted by the Attorney General under this section do not apply to the agency; and

(B) Prescribe the rules of procedure that the agency will use for public contracts, which may include portions of the model rules adopted by the Attorney General.

(b) A public contracting agency that has adopted its own rules under paragraph (a) of this subsection shall review those rules each time the Attorney General adopts a modification to the model rules under subsection (3) of this section to determine whether any modifications need to be adopted by the agency to ensure compliance with statutory changes. [1975 c.771 §26; 1983 c.690 §12; 1991 c.414 §1; 1999 c.29 §1; 2001 c.712 §2]

279.050 [Amended by 1969 c.349 §1; 1971 c.180 §1; repealed by 1975 c.771 §33]

279.051 Personal services contracts; procedures. (1) Except as provided in ORS 279.712, public agencies may enter into contracts for personal services. The Oregon Department of Administrative Services shall enter into contracts for personal services on behalf of state agencies that are subject to ORS 279.712. The provisions of this section do not relieve the agency of the duty to comply with ORS 279.712, any other law applicable to state agencies or applicable city or county charter provisions. Each public agency authorized to enter into personal service contracts shall create procedures for the screening and selection of persons to perform personal services.

(2) The Director of the Oregon Department of Administrative Services or a local contract review board by ordinance, resolution, administrative rule or other regulation may designate certain service contracts or classes of service contracts as personal service contracts. [1975 c.771 §27; 1979 c.196 §2; 1981 c.766 §1; 1983 c.690 §13; 1997 c.802 §1]

279.052 [Repealed by 1975 c.771 §33]

279.053 Laws not to prohibit participation in affirmative action projects; authority to limit bidding for affirmative action purposes. (1) No provision contained in chapter 771, Oregon Laws 1975, shall be construed to prohibit any public contracting body from engaging in bidding and contracting practices designed to accomplish affirmative action goals for disadvantaged or minority groups.

(2) In carrying out the policy of affirmative action, by appropriate ordinance, resolution or administrative rule, a public contracting body may limit competitive bidding on any public contract for procurement of goods and services or on any other public contract estimated to cost $50,000 or less to contracting entities owned or controlled by persons described in subsection (3) of this section.

(3) As used in this section "affirmative action" is a program designed to insure equal opportunity in employment and business for persons otherwise disadvantaged by reason of race, color, religion, sex, national origin, age or physical or mental disability. [1975 c.771 §32; 1981 c.325 §4; 1985 c.724 §3; 1989 c.224 §41]

279.054 [Repealed by 1975 c.771 §33]

279.055 Local contract review board; creation; power. (1) Every county by ordinance may create a local contract review board for the county. The board so created may consist of the governing body of the county or at least three persons appointed by and serving at the pleasure of that governing body.

(2) Any other local public agency having a governing body may adopt a resolution or ordinance creating its governing body as a local contract review board for that public agency. The local public agency shall file a copy of the resolution or ordinance with the county governing body. The board created by the local public agency shall not exercise its powers under subsection (4) of this section until the resolution or ordinance has been filed pursuant to this subsection.

(3) A county board created pursuant to subsection (1) of this section shall serve as the local contract review board for local public agencies that do not create their own boards pursuant to subsection (2) of this section, and that have their principal administrative offices within the county. The county board may impose fees on local public agencies that it serves under this subsection if the ordinance creating the county board authorized such fees. The fees shall be prescribed by rule adopted under subsection (5) of this section and shall be calculated to reimburse the county for its costs in serving the local public agencies.

(4) Except as provided in ORS 279.019 (1) and (2) and the authority to prescribe the standard prequalification application forms in ORS 279.039 (1), boards created under this section shall have all the powers granted the Oregon Department of Administrative Services and the Director of the Oregon Department of Administrative Services under ORS 279.011 to 279.063. The board shall exercise such powers only after it has adopted rules pursuant to the requirements of subsection (5) of this section.

(5) Each board created under this section shall have rulemaking authority to carry out the powers and duties of the board under ORS 279.011 to 279.063. The rules shall be adopted in the manner prescribed in the resolution or ordinance creating the board.

(6) A local public agency, other than a county, by resolution or ordinance may rescind its action to create a local contract review board. The rescission shall take effect on the date a copy of the resolution or ordinance is filed with the county governing body or on the date stated therein, whichever is the later date. After the date of filing or the date specified, the county board, created pursuant to subsection (1) of this section, shall serve as the local contract review board for the public agency.

(7) Notwithstanding subsection (3) of this section, a local public agency may contract with another public agency to serve as its local contract review board with the powers and duties the local board has over contracts of its own local public agency. Notice of the contract and of its termination shall be given to the county in the same manner as notice is given to the county under subsections (2) and (6) of this section. [1975 c.771 §34(2); 1979 c.647 §1; 1979 c.804 §6; 1983 c.690 §14]

279.056 When federal law and rules prevail over ORS 279.011 to 279.063. Notwithstanding any provision of ORS 279.011 to 279.063, the applicable federal laws, rules and regulations shall govern in any case where federal funds are involved and the federal laws, rules and regulations conflict with any of the provisions of ORS 279.011 to 279.063 or require additional conditions in public contracts not authorized by ORS 279.011 to 279.063. [1979 c.504 §2]

279.057 Contracts for services of engineers, architects and land surveyors; selection procedure; compensation; applicability only to state agencies. (1) A contract entered into by a public agency for the consulting services of registered professional engineers, registered architects or registered professional land surveyors is a personal service contract.

(2) A public agency shall select consultants described in subsection (1) of this section on the basis of qualifications for the type of professional service required. A public agency may solicit or use pricing policies and proposals or other pricing information to determine consultant compensation only after the public agency has selected a candidate under subsection (3) or (4) of this section.

(3) Subject to the requirements of subsection (2) of this section, the procedures that a public agency creates for the screening and selection of consultants and the selection of a candidate under this section shall be within the sole discretion of the public agency and may be adjusted to accommodate the public agency’s scope, schedule and budget objectives for a particular project. Adjustments to accommodate an agency’s objectives may include provision for the direct appointment of a consultant if the value of the project does not exceed a threshold amount as determined by the agency. Screening and selection procedures may include a consideration of each candidate’s:

(a) Specialized experience, capabilities and technical competence that may be demonstrated by the proposed approach and methodology to meet the project requirements;

(b) Resources available to perform the work and the proportion of the candidate staff’s time that would be spent on the project, including any specialized services, within the applicable time limits;

(c) Record of past performance, including but not limited to price and cost data from previous projects, quality of work, ability to meet schedules, cost control and contract administration;

(d) Ownership status and employment practices regarding women, minorities and emerging small businesses or historically underutilized businesses;

(e) Availability to the project locale;

(f) Familiarity with the project locale; and

(g) Proposed project management techniques.

(4) If the screening and selection procedures created by a public agency under subsection (3) of this section result in the determination by the public agency that two or more candidates are equally qualified, the public agency may select a candidate through any process adopted by the public agency.

(5) It is the goal of this state to promote a sustainable economy in the rural areas of the state. In order to monitor progress toward this goal, a state agency to which this section applies shall keep a record of the locations for the personal service contracts to be performed throughout the state that are entered into on or after January 1, 2002, the locations of the selected consultants and the direct expenses on each contract. This record shall include the total number of contracts over a 10-year period for each consultant firm. The record of direct expenses shall include all personnel travel expenses as a separate and identifiable expense on the contract. Upon request, the state agency shall make these records available to the public.

(6) The public agency and the selected candidate shall mutually discuss and refine the scope of services for the project and shall negotiate conditions, including but not limited to compensation level and performance schedule, based on the scope of services. The compensation level paid must be reasonable and fair to the public agency as determined solely by the public agency. Authority to negotiate a contract under this section does not supersede any provision of ORS 279.316 or 279.712.

(7) If the public agency and the selected candidate are unable for any reason to negotiate a contract at a compensation level that is reasonable and fair to the public agency, the public agency shall, either orally or in writing, formally terminate negotiations with the selected candidate. The public agency may then negotiate with another candidate. The negotiation process may continue in this manner through successive candidates until an agreement is reached or the agency terminates the consultant contracting process.

(8) Notwithstanding ORS 279.011, this section applies only if the public agency personal service contract is issued by an agency of the State of Oregon and not by an agency of any political subdivision thereof or any public body created by intergovernmental agreement.

(9) Notwithstanding subsection (8) of this section, this section applies to the selection of consultants by an agency of any political subdivision of this state or any public body created by intergovernmental agreement if the agency or public body receives moneys from the State Highway Fund under ORS 366.525 or 366.800 or a grant or loan from this state that will be used to pay for any portion of the design and construction of the project and:

(a) The total amount of any grants, loans or moneys from the State Highway Fund and from the state for the project exceeds 35 percent of the value of the project; and

(b) The value of the project exceeds $400,000. [1997 c.861 §2; 1999 c.59 §73; 2001 c.712 §3; 2001 c.948 §1]

Note: Section 2, chapter 948, Oregon Laws 2001, provides:

Sec. 2. The amendments to ORS 279.057 by section 1 of this 2001 Act first apply to public contracts for personal services advertised or solicited on or after July 1, 2002. [2001 c.948 §2]

Note: The amendments to 279.057 by section 3, chapter 948, Oregon Laws 2001, become operative July 1, 2008, and first apply to public contracts for personal services advertised or solicited on or after July 1, 2008. See sections 4 and 5, chapter 948, Oregon Laws 2001. The text that is operative on and after July 1, 2008, is set forth for the user’s convenience.

279.057. (1) A contract entered into by a public agency for the consulting services of registered professional engineers, registered architects or registered professional land surveyors is a personal service contract.

(a) Specialized experience, capabilities and technical competence that may be demonstrated by the proposed approach and methodology to meet the project requirements;

(b) Resources available to perform the work, including any specialized services, within the applicable time limits;

(c) Record of past performance, including but not limited to price and cost data from previous projects, quality of work, ability to meet schedules, cost control and contract administration;

(d) Ownership status and employment practices regarding women, minorities and emerging small businesses or historically underutilized businesses;

(e) Availability to the project locale;

(f) Familiarity with the project locale; and

(g) Proposed project management techniques.

279.058 Direct contracts allowed for services of engineers, architects and land surveyors. (1) As used in this section, "consultant" means a registered professional engineer, registered architect or registered professional land surveyor.

(2) An agency of any political subdivision of this state may enter into a personal service contract directly with a consultant if the project described in the personal service contract consists of work that has been substantially described, planned or otherwise previously studied or rendered in an earlier contract with the consultant that was awarded pursuant to rules adopted under ORS 279.049 and the new contract is a continuation of that project.

(3) A political subdivision may adopt criteria for determining when this section shall apply to a personal service contract. [2001 c.712 §5]

279.059 Subcontracting to emerging small businesses. (1) A public contracting agency may require a bidder to subcontract some part of the contract to, or obtain materials to be used in performing the contract from, a business enterprise that is a certified emerging small business.

(2) A public contracting agency may require that a contract be awarded to a responsible bidder as defined in ORS 200.005 and 200.045 (3). [1985 c.769 §§2, 3; 1987 c.893 §6; 1989 c.1043 §7]

279.060 [1969 c.522 §2; repealed by 1975 c.771 §33]

279.061 Limitation on public agency constructing public improvement. If a public agency fails to adopt and apply a cost accounting system that substantially complies with the model cost accounting guidelines developed by the Oregon Department of Administrative Services pursuant to section 3, chapter 869, Oregon Laws 1979, as determined by an accountant qualified to perform audits required by ORS 297.210 and 297.405 to 297.555 (Municipal Audit Law), the public agency shall not construct a public improvement with its own equipment or personnel if the cost is in excess of $5,000. [1981 c.281 §2]

279.063 Waiver of unreasonable delay of public agency against public policy. (1) Any clause in a public contract for a public improvement that purports to waive, release or extinguish the rights of a contractor to damages or an equitable adjustment arising out of unreasonable delay in performing the contract, if the delay is caused by acts or omissions of the public contracting agency or persons acting therefor, is against public policy and is void and unenforceable.

(2) Subsection (1) of this section is not intended to render void any contract provision that:

(a) Requires notice of any delay;

(b) Provides for arbitration or other procedures for settlement of contract disputes; or

279.065 [1969 c.522 §3; 1975 c.771 §8; renumbered 279.025]

279.067 Suit by or on behalf of adversely affected bidder or proposer; exception for personal service contract. (1) Any bidder or proposer adversely affected or any trade association of construction contractors acting on behalf of a member of the association to protect interests common to construction contractor members may commence a suit in the circuit court for the county in which are located the principal offices of the public contracting agency, for the purpose of requiring compliance with, or prevention of violations of, ORS 279.011 to 279.063, or to determine the applicability of ORS 279.011 to 279.063 to matters or decisions of the agency.

(2) The court may order such equitable relief as it considers appropriate in the circumstances. In addition to or in lieu of any equitable relief, the court may award an aggrieved bidder or proposer any damages suffered by the bidder or proposer as a result of violations of ORS 279.011 to 279.063 for the reasonable cost of preparing and submitting a bid or proposal. A decision of the public contracting agency shall not be voided if other equitable relief is available.

(3) If the public agency is successful in defending its actions against claims of violation or potential violation of ORS 279.011 to 279.063, then the court may award to the aggrieved public agency any damages suffered as a result of the suit.

(4) The court may order payment of reasonable attorney fees and costs on trial and on appeal to a successful party in a suit brought under this section.

(5) This section does not apply to personal service contracts under ORS 279.057.

(6) As used in this section:

(a) "Bidder" means any person who submitted a bid to a public agency.

(b) "Proposer" means any person who submitted a proposal to a public agency. [1983 c.690 §27; 1990 c.6 §1; 1997 c.685 §6; 1997 c.861 §3; 2001 c.104 §89]

279.070 [1969 c.522 §4; 1971 c.659 §2; 1975 c.771 §9; renumbered 279.027]

279.073 Action against successful bidder; amount of damages; when action to be commenced; defenses. (1) Any person that loses a competitive bid for a contract involving the construction, repair, remodeling, alteration, conversion, modernization, replacement or renovation of a building or structure may bring an action for damages against another person who is awarded the contract for which the bid was made if the person making the losing bid can establish that the other person knowingly violates the provisions of ORS 279.350, 656.017, 657.505 or 701.055 while performing the work under the contract, or knowingly failed to pay to the Department of Revenue all sums withheld from employees pursuant to ORS 316.167.

(2) A person bringing an action under this section must establish a violation of ORS 279.350, 316.167, 656.017, 657.505 or 701.055 by a preponderance of the evidence.

(3) Upon establishing that the violation occurred, the person shall recover, as liquidated damages, 10 percent of the total amount bid, by the person bringing the action, on the contract, or $5,000, whichever is greater.

(4) In any action under this section, the prevailing party shall be entitled to an award of reasonable attorney fees.

(5) An action under this section shall be commenced within two years of the substantial completion of the construction, repair, remodeling, conversion, modernization, improvement, rehabilitation, replacement or renovation. For the purposes of this subsection, "substantial completion" has the meaning given in ORS 12.135.

(6) No person shall be allowed to recover any amounts under this section if the defendant in the action establishes by a preponderance of the evidence that the plaintiff:

(a) Was in violation of ORS 701.055 at the time of making the bid on the contract;

(b) Was in violation of ORS 316.167, 656.017 or 657.505 with respect to any employees of the plaintiff as of the time of making the bid on the contract; or

(c) Was in violation of ORS 279.350 with respect to any contract performed by the plaintiff within one year prior to making the bid on the contract. [1991 c.323 §1]

Note: 279.073 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 279 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

279.075 [1969 c.522 §5; 1975 c.771 §10; renumbered 279.029]

279.080 [1969 c.522 §6; renumbered 279.031]

279.085 [1969 c.522 §7; repealed by 1975 c.771 §33]

279.090 [1969 c.522 §8; repealed by 1975 c.771 §33]

279.095 Arrangements for use, operation, maintenance or disposition of personal property allowed. (1) Notwithstanding the public bidding requirements of this chapter, a local public body may negotiate with one or more private or public entities to establish contracts, agreements and other cooperative arrangements for the use, operation, maintenance or ultimate lawful disposition of personal property owned by or under the control of the local public body, including property acquired under ORS 279.820. Prior to approving such a contract, agreement or cooperative arrangement, the governing body of the public body must make a finding that the contract, agreement or arrangement will promote the economic development of the public body, of the geographical area in which the public body is situated or of other public bodies that perform similar functions.

(2) For the purposes of this section, "local public body" includes any city, county, port district, school district, special district or other political subdivision or municipal or public corporation and any instrumentality thereof, and any public body created by an intergovernmental agreement to which a local public body is a party. [1987 c.777 §2]

Note: 279.095 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 279 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

279.101 Districts authorized to enter into property purchase contracts with payment period less than 30 years; county authority to enter into property purchase contracts; effect on other powers. (1) A district, as defined in ORS 198.010, may enter into a contract for the purchase or for the lease with option to purchase of real or personal property when the period of time allowed for payment under the contract does not exceed 30 years. A district entering into a contract authorized by this subsection and subsection (2) of this section may budget funds annually for payment of amounts due under the contract in each year during the term of the contract, unless the contract is terminated sooner in accordance with its terms.

(2) A county may enter into a contract for the purchase or for the lease with option to purchase of real or personal property when:

(a) The period of time allowed for payment under the contract does not exceed 30 years; and

(b) The county is not obligated to make payments under the contract in any fiscal year unless the county governing body includes such payments in the county’s budget for that fiscal year and makes an appropriation therefor.

(3) The powers granted to districts and counties by subsections (1) and (2) of this section are in addition to any other powers possessed by districts and counties in this state and subsections (1) and (2) of this section shall not be construed to limit such powers. [1989 c.407 §§1,2; 1995 c.333 §26]

Note: 279.101 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 279 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

279.103 Evaluation of certain public improvement projects not contracted by competitive bidding. (1) Upon completion of and final payment for any public improvement contract in excess of $100,000 for which the public agency did not use the competitive bidding process, the public agency shall prepare and deliver to the Director of the Oregon Department of Administrative Services or the local contract review board an evaluation of the public improvement project.

(2) The evaluation shall include but not be limited to the following matters:

(a) The actual project cost as compared with original project estimates.

(b) The amount of any guaranteed maximum price.

(d) A narrative description of successes and failures during the design, engineering and construction of the project.

(e) An objective assessment of the use of the alternative contracting process as compared to the findings required by ORS 279.015.

(3) Evaluations required by this section shall be made available for public inspection.

(4) The evaluations required by this section must be completed within 30 days of the date that the public agency accepts the public improvement project. [1997 c.685 §4]

279.106 Requirement to subcontract with emerging small business. A public contracting agency may require a bidder to subcontract some part of the contract to, or obtain materials to be used in performing the contract from, certified emerging small businesses that are, as identified by the public contracting agency, located in, or draw their workforces from within, economically depressed areas, as designated by the Economic and Community Development Department in cooperation with the Employment Department. [1989 c.1043 §9]

Note: 279.106 and 279.111 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 279 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

279.111 Discrimination in subcontracting prohibited; disqualification; appeal. (1) A contractor who contracts with a public contracting agency shall not discriminate against minority, women or emerging small business enterprises in the awarding of subcontracts. The contractor shall certify as part of the bid documents accompanying the bid on a public contract that the contractor has not discriminated against minority, women or emerging small business enterprises in obtaining any required subcontracts.

(2) The public contracting agency may disqualify any person as a bidder on a public contract if the agency finds that the person has violated subsection (1) of this section in a contract between the person and the agency.

(3) If the person desires to appeal the disqualification, the appeal procedure shall be subject to ORS 279.043 and 279.045. [1989 c.1043 §11]

Note: See note under 279.106.

279.116 Forest products sale contracts exempt from bidding requirements. (1) Contracts for the sale of forest products from lands owned or managed by the State Board of Forestry and the State Forestry Department shall be exempt from the provisions of ORS 279.011 to 279.542.

(2) Contracts for the sale of forest products from lands owned or managed by the State Board of Forestry and the State Forestry Department shall be conducted according to the relevant provisions of ORS 273.522 to 273.541 and ORS chapter 530.

(3) As used in this section, "forest products" has the meaning for that term given in ORS 321.005. [1995 c.375 §2]

Note: 279.116 was added to and made a part of ORS chapter 279 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

PUBLIC CONTRACTS GENERALLY

(Conditions)

279.310 Definitions for ORS 279.310 to 279.323. When used in ORS 279.310 to 279.323, unless the context otherwise requires:

(1) "Person" includes the State Accident Insurance Fund Corporation and the Department of Revenue.

(2) "Public contract" means a contract made with the state, county, school district, municipality, municipal corporation or subdivision thereof.

(3) "Public improvement" has the meaning given that term by ORS 279.011. [Amended by 1953 c.131 §3; 1973 c.523 §1; 1983 c.740 §76; 2001 c.104 §90]

279.312 Conditions of public contracts concerning payment of laborers and suppliers of materials, contributions to Industrial Accident Fund, liens, withholding taxes and employee drug testing. (1) Every public contract shall contain a condition that the contractor shall:

(a) Make payment promptly, as due, to all persons supplying to such contractor labor or material for the prosecution of the work provided for in such contract.

(b) Pay all contributions or amounts due the Industrial Accident Fund from such contractor or subcontractor incurred in the performance of the contract.

(c) Not permit any lien or claim to be filed or prosecuted against the state, county, school district, municipality, municipal corporation or subdivision thereof, on account of any labor or material furnished.

(d) Pay to the Department of Revenue all sums withheld from employees pursuant to ORS 316.167.

(2) In addition to the conditions specified in subsection (1) of this section, every public improvement contract shall contain a condition that the contractor shall demonstrate that an employee drug testing program is in place. [Amended by 1953 c.131 §3; 1957 c.586 §14; 1965 c.26 §1; 1969 c.493 §76; 1999 c.588 §1]

279.313 Demolition contracts to require material salvage; lawn and landscape maintenance contracts to require composting or mulching. (1) Every public contract for demolition shall contain a condition requiring the contractor to salvage or recycle construction and demolition debris, if feasible and cost-effective.

(2) Every public contract for lawn and landscape maintenance shall contain a condition requiring the contractor to compost or mulch yard waste material at an approved site, if feasible and cost-effective. [1997 c.552 §20]

Note: 279.313 was added to and made a part of 279.310 to 279.323 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

279.314 Conditions concerning payment of claims by public officers, payment to persons furnishing labor or materials and complaints. (1) Every public contract shall contain a clause or condition that, if the contractor fails, neglects or refuses to make prompt payment of any claim for labor or services furnished to the contractor or a subcontractor by any person in connection with the public contract as such claim becomes due, the proper officer or officers representing the state, county, school district, municipality, municipal corporation or subdivision thereof, as the case may be, may pay such claim to the person furnishing the labor or services and charge the amount of the payment against funds due or to become due the contractor by reason of such contract.

(2) Every public contract for a public improvement shall contain a clause or condition that, if the contractor or a first-tier subcontractor fails, neglects or refuses to make payment to a person furnishing labor or materials in connection with the public contract for a public improvement within 30 days after receipt of payment from the public contracting agency or a contractor, the contractor or first-tier subcontractor shall owe the person the amount due plus interest charges commencing at the end of the 10-day period that payment is due under ORS 279.445 (4) and ending upon final payment, unless payment is subject to a good faith dispute as defined in ORS 279.445. The rate of interest charged to the contractor or first-tier subcontractor on the amount due shall equal three times the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve district that includes Oregon on the date that is 30 days after the date when payment was received from the public contracting agency or from the contractor, but the rate of interest shall not exceed 30 percent. The amount of interest may not be waived.

(3) Every public contract for a public improvement and every contract related to the public contract shall contain a clause or condition that, if the contractor or a subcontractor fails, neglects or refuses to make payment to a person furnishing labor or materials in connection with the public contract, the person may file a complaint with the Construction Contractors Board, unless payment is subject to a good faith dispute as defined in ORS 279.445.

(4) The payment of a claim in the manner authorized in this section shall not relieve the contractor or the contractor’s surety from obligation with respect to any unpaid claims. [Amended by 1981 c.712 §5; 1999 c.689 §1]

279.315 [Formerly 653.767; repealed by 1995 c.286 §34]

279.316 Condition concerning hours of labor. (1)(a) Every public contract shall also contain a condition that no person shall be employed for more than 10 hours in any one day, or 40 hours in any one week, except in cases of necessity, emergency, or where the public policy absolutely requires it, and in such cases, except in cases of contracts for personal services as described in ORS 279.051, the employee shall be paid at least time and a half pay:

(A) For all overtime in excess of eight hours a day or 40 hours in any one week when the work week is five consecutive days, Monday through Friday; or

(B) For all overtime in excess of 10 hours a day or 40 hours in any one week when the work week is four consecutive days, Monday through Friday; and

(b) An employer must give notice to employees who work on a public contract in writing, either at the time of hire or before commencement of work on the contract, or by posting a notice in a location frequented by employees, of the number of hours per day and days per week that the employees may be required to work.

(2) In the case of contracts for personal services as defined in ORS 279.051, the contract shall contain a provision that the employee shall be paid at least time and a half for all overtime worked in excess of 40 hours in any one week, except for individuals under these contracts who are excluded under ORS 653.010 to 653.261 or under 29 U.S.C. sections 201 to 209 from receiving overtime.

(3) In the case of a contract for services at a county fair or for other events authorized by a county fair board, the contract shall contain a provision that the labor performed on the contract shall be paid at least time and a half for work in excess of 10 hours in any one day or 40 hours in any one week. An employer must give notice to employees who work on such a contract in writing, either at the time of hire or before commencement of work on the contract, or by posting a notice in a location frequented by employees, of the number of hours per day and days per week that employees may be required to work.

(4)(a) Except as provided in subsection (3) of this section, contracts for services shall contain a provision that requires that persons employed under such contracts shall receive at least time and a half pay for work performed on the legal holidays specified in a collective bargaining agreement or in ORS 279.334 (1)(a)(C)(ii) to (vii) and for all time worked in excess of 10 hours a day or in excess of 40 hours in a week, whichever is greater.

(b) An employer must give notice to employees who work on a contract for services in writing, either at the time of hire or before commencement of work on the contract, or by posting a notice in a location frequented by employees, of the number of hours per day and days per week that the employees may be required to work. [Amended by 1967 c.167 §1; 1979 c.5 §1; 1989 c.572 §1; 1993 c.279 §1; 1995 c.739 §2; 1997 c.265 §1; 1997 c.793 §1; 2001 c.104 §91]

279.318 Provisions relating to environmental and natural resources laws and rules; remedies when requirements change. (1) Bid documents for a public contract for a public improvement shall make specific reference to federal, state and local agencies that have enacted ordinances or regulations dealing with the prevention of environmental pollution and the preservation of natural resources that affect the performance of the contract. If the successful bidder awarded the project is delayed or must undertake additional work by reason of existing regulations or ordinances of agencies not cited in the public contract or due to the enactment of new or the amendment of existing statutes, ordinances or regulations relating to the prevention of environmental pollution and the preservation of natural resources occurring after the submission of the successful bid, the public contracting agency may:

(a) Terminate the contract;

(b) Complete the work itself;

(d) Require that the underlying property owner be responsible for cleanup;

(e) Go out to bid for a new contractor to provide the necessary services under the competitive bid requirements of ORS 279.015; or

(f) Issue the successful bidder a change order setting forth the additional work that must be undertaken.

(2) In addition to the obligation imposed under subsection (1) of this section to refer to federal, state and local agencies with regulations dealing with the prevention of environmental pollution and the preservation of natural resources, a public bid document must also make specific reference to known conditions at the construction site that may require the successful bidder to comply with the statutes, ordinances or regulations identified under subsection (1) of this section.

(3) If the successful bidder encounters a condition not referred to in the bid documents and not caused by the successful bidder and not discoverable by a reasonable prebid visual site inspection and the condition requires compliance with the regulations referred to under subsection (1) of this section, the successful bidder shall immediately give notice of the condition to the public contracting agency.

(4) Except in the case of an emergency and except as may otherwise be required by any environmental or natural resource regulation, the successful bidder shall not commence work nor incur any additional job site costs in regard to the condition encountered and described in subsection (3) of this section without written direction from the public contracting agency.

(5) Upon request by the public contracting agency, the successful bidder shall estimate the emergency or regulatory compliance costs as well as the anticipated delay and costs resulting from the encountered condition. This cost estimate shall be promptly delivered to the public contracting agency for resolution.

(6) Within a reasonable period of time, the public contracting agency may:

(a) Terminate the contract;

(b) Complete the work itself;

(d) Require that the underlying property owner be responsible for cleanup;

(e) Go out to bid for a new contractor to provide the necessary services under the competitive bid requirements of ORS 279.015; or

(f) Issue the successful bidder a change order setting forth the additional work that must be undertaken.

(7)(a) If the public contracting agency chooses to terminate the contract under subsection (6)(a) of this section, the successful bidder shall be entitled to all costs and expenses incurred to the date of termination, including overhead and reasonable profits, on the percentage of the work completed. The awarding agency shall have access to the successful bidder’s bid documents when making its determination of the additional compensation due to the successful bidder.

(b) If the public contracting agency causes work to be done by another contractor under subsection (1)(c) or (e) of this section or under subsection (6)(c) or (e) of this section, the successful bidder shall not be held liable for actions or omissions of the other contractor.

(c) The change order under subsection (1)(f) of this section or under subsection (6)(f) of this section shall include the appropriate extension of contract time and compensate the successful bidder for all additional costs, including overhead and profit, reasonably incurred as a result of complying with the applicable regulations. The awarding agency shall have access to the successful bidder’s bid documents when making its determination of the additional compensation due to the successful bidder.

(8) Notwithstanding the provisions of this section, an awarding agency:

(a) May allocate all or a portion of the known environmental and natural resource risks to a contractor by listing such environmental and natural resource risks with specificity in the bid documents; and

(b) In a local improvement district, may allocate all or a portion of the known and unknown environmental and natural resource risks to a contractor by so stating in the bid documents. [Amended by 1973 c.523 §2; 1975 c.771 §19; 1991 c.638 §1]

279.319 Condition concerning use of inmate labor for removal, abatement or demolition of asbestos in state buildings. (1) Every public contract for the removal, abatement or demolition of asbestos in a state building shall contain a condition requiring the contractor to use a certified inmate workforce, if available, of:

(a) Thirty percent, not to exceed 30 inmates the first year.

(b) Twenty-five percent, not to exceed 50 inmates the second year.

(2) As used in this section:

(a) "Inmate" means an inmate of a Department of Corrections institution.

(b) "Certified inmate" means an inmate certified pursuant to ORS 468A.730. [1989 c.1092 §5]

279.320 Condition concerning payment for medical care and providing workers’ compensation. (1) Every public contract shall contain a condition that the contractor shall promptly, as due, make payment to any person, copartnership, association or corporation, furnishing medical, surgical and hospital care or other needed care and attention, incident to sickness or injury, to the employees of such contractor, of all sums which the contractor agrees to pay for such services and all moneys and sums which the contractor collected or deducted from the wages of employees pursuant to any law, contract or agreement for the purpose of providing or paying for such service.

(2) Every public contract also shall contain a clause or condition that all subject employers working under the contract are either employers that will comply with ORS 656.017 or employers that are exempt under ORS 656.126. [Amended by 1967 c.359 §687; 1981 c.712 §6; subsection (2) enacted as 1989 c.684 §3; 2001 c.104 §92; 2001 c.190 §1]

279.321 Compensation for contractor on contracts declared void by court; exceptions; applicability. (1) If a court determines that a public improvement contract is void because the public agency letting the contract failed to comply with any statutory or regulatory competitive bidding or other procurement requirements, and the contractor entered into the contract without intentionally violating the laws regulating public improvement contracts, then, unless the court determines that substantial injustice would result, the contractor is entitled to reimbursement for work performed under the contract as follows:

(a) If the work under the public improvement contract is substantially complete, the public agency shall ratify the contract.

(b) If the work under the public improvement contract is not substantially complete, then the public agency shall ratify the contract and the contract shall be deemed terminated. Upon termination, the contractor shall be paid in accordance with ORS 279.330, unless the court determines that payment pursuant to ORS 279.330 would be a substantial injustice either to the public agency or the contractor, in which case the contractor shall be paid as the court deems equitable.

(c) For the purposes of this section, a ratified contract shall be deemed valid, binding and legally enforceable, and the contractor’s payment and performance bonds shall remain in full force and effect.

(2) Notwithstanding subsection (1) of this section, if a court determines that a public contract is void as a result of fraudulent or criminal acts or omissions of either the contractor, or both the public agency letting the contract together with the contractor, the contractor is not entitled to reimbursement for work performed under the contract.

(3) This section shall not apply to any public improvement contract if:

(a) The public agency’s employee that awarded the public improvement contract did not have the authority to do so under law, ordinance, charter, contract or agency rule; or

(b) Payment is otherwise prohibited by Oregon law.

(4) The contractor and all subcontractors under a public improvement contract are prohibited from asserting that the public improvement contract is void for any reason described in this section. [1997 c.828 §2]

279.322 Authority to substitute nondisclosed first-tier subcontractor; circumstances; rules. A prime contractor whose bid is accepted may substitute a first-tier subcontractor that was not disclosed under ORS 279.027 (3) by submitting the name of the new subcontractor and the reason for the substitution in writing to the public contracting agency. A prime contractor may substitute a first-tier subcontractor pursuant to this section in the following circumstances:

(1) When the subcontractor disclosed under ORS 279.027 (3) fails or refuses to execute a written contract after having had a reasonable opportunity to do so after the written contract, which must be reasonably based upon the general terms, conditions, plans and specifications for the public improvement project or the terms of the subcontractor’s written bid, is presented to the subcontractor by the prime contractor.

(2) When the disclosed subcontractor becomes bankrupt or insolvent.

(3) When the disclosed subcontractor fails or refuses to perform the subcontract.

(4) When the disclosed subcontractor fails or refuses to meet the bond requirements of the prime contractor that had been identified prior to the bid submittal.

(5) When the prime contractor demonstrates to the public contracting agency that the subcontractor was disclosed as the result of an inadvertent clerical error.

(6) When the disclosed subcontractor does not hold a license from the Construction Contractors Board and is required to be licensed by the board.

(7) When the prime contractor determines that the work performed by the disclosed subcontractor is substantially unsatisfactory and not in substantial accordance with the plans and specifications or that the subcontractor is substantially delaying or disrupting the progress of the work.

(8) When the disclosed subcontractor is ineligible to work on a public improvement pursuant to the applicable statutory provisions.

(9) When the substitution is for good cause. The Construction Contractors Board shall define "good cause" by rule. "Good cause" shall include, but not be limited to, the financial instability of a subcontractor. The definition of "good cause" shall reflect the least cost policy for public improvements established in ORS 279.023 (1).

(10) When the substitution is reasonably based on the contract alternates chosen by the public contracting agency. [1999 c.689 §6; 2001 c.104 §93; 2001 c.507 §2]

Note: See note under 279.027.

279.323 Complaint process for substitutions of subcontractors; civil penalties. (1)(a) A subcontractor disclosed under ORS 279.027 may file a complaint based on the subcontractor disclosure requirements under ORS 279.027 (3) with the Construction Contractors Board about a contractor if the contractor has substituted another subcontractor for the complaining subcontractor.

(b) If more than one subcontractor files a complaint with the board under paragraph (a) of this subsection relating to a single subcontractor disclosure, the board shall consolidate the complaints into one proceeding. If the board imposes a civil penalty under this section against a contractor, the amount collected by the board shall be divided evenly among all of the complaining subcontractors.

(c) Each subcontractor filing a complaint under paragraph (a) of this subsection shall post a deposit of $500 with the board upon filing the complaint.

(d) If the board determines that a contractor’s substitution was not in compliance with ORS 279.322, the board shall return the full amount of the deposit posted under paragraph (c) of this subsection to the complaining subcontractor.

(e) If the board determines that a contractor has not substituted a subcontractor or that the contractor’s substitution was in compliance with ORS 279.322, the board shall award the contractor $250 of the deposit and shall retain the other $250, which may be expended by the board.

(2) Upon receipt of a complaint under subsection (1) of this section, the board shall investigate the complaint. If the board determines that a contractor has substituted a subcontractor in a manner not in compliance with ORS 279.322, the board may impose a civil penalty against the contractor pursuant to subsections (3) to (5) of this section. Civil penalties under this section shall be imposed in the manner provided under ORS 183.090.

(3) If the board imposes a civil penalty under subsection (2) of this section and it is the first time the board has imposed a civil penalty under subsection (2) of this section against the contractor during a three-year period, the board shall:

(a) Impose a civil penalty on the contractor of up to 10 percent of the amount of the subcontract bid submitted by the complaining subcontractor to the contractor or $15,000, whichever is less. Amounts collected by the board under this paragraph shall be awarded to the complaining subcontractor or subcontractors; and

(b) Impose a civil penalty on the contractor of up to $1,000. Amounts collected by the board under this paragraph shall be retained by the board and may be expended by the board.

(4) If the board imposes a civil penalty under subsection (2) of this section and it is the second time the board has imposed a civil penalty under subsection (2) of this section against the contractor during a three-year period, the board may:

(b) Impose a civil penalty on the contractor of up to $1,000 and shall place the contractor on the list established under ORS 701.227 for up to six months. Amounts collected by the board under this paragraph shall be retained by the board and may be expended by the board.

(5) If the board imposes a civil penalty under subsection (2) of this section and the board has imposed a civil penalty under subsection (2) of this section against the contractor three or more times during a three-year period, the board may:

(b) Impose a civil penalty on the contractor of up to $1,000 and shall place the contractor on the list established under ORS 701.227 for up to one year. Amounts collected by the board under this paragraph shall be retained by the board and may be expended by the board.

(6) Within 10 working days after receiving a complaint under subsection (1) of this section, the board shall notify, in writing, any public contracting agency that is a party to the contract for which the complaint has been filed that the complaint has been filed under this section. [2001 c.507 §4]

Note: See note under 279.027.

(Termination for Public Interest Reasons)

279.324 Definitions for ORS 279.324 to 279.332. As used in ORS 279.324 to 279.332 "labor dispute" means a labor dispute as defined in ORS 662.010. [Amended by 1973 c.738 §1; 1975 c.771 §20]

279.326 Agreement to terminate contract. The public body and the contractor that are parties to a public contract may agree to terminate the contract:

(1) If work under the contract is suspended by an order of a public agency for any reason considered to be in the public interest other than by a labor dispute or by reason of any third party judicial proceeding relating to the work other than a suit or action filed in regards to a labor dispute; and

(2) If the circumstances or conditions are such that it is impracticable within a reasonable time to proceed with a substantial portion of the public works. [Amended by 1973 c.738 §2]

279.328 Extension and compensation when work suspended in certain cases. If work under a contract is suspended pursuant to ORS 279.326 (1), and is not the result of a labor dispute but the contract is not terminated, the contractor is entitled to a reasonable extension of the contract time and reasonable compensation for all costs resulting from the suspension plus a reasonable allowance for overhead with respect to such costs. [Amended by 1973 c.738 §3]

279.330 Compensation when contract terminated. In the event of termination of a public contract pursuant to ORS 279.326, provision shall be made for the payment of compensation to the contractor. In addition to a reasonable amount of compensation for preparatory work and for all costs and expenses arising out of termination, the amount to be paid to the contractor:

(1) Shall be determined on the basis of the contract price in the case of any fully completed separate item or portion of the work for which there is a separate or unit contract price; and

(2) May, with respect to any other work, be a percent of the contract price equal to the percentage of the work completed. [Amended by 1973 c.738 §4]

279.332 Contractual provisions for compensation when contract terminated due to public interest. Any public body may provide in any public works contract detailed provisions under which the contractor shall be entitled, as a matter of right, to compensation upon termination of the contract on account of any reason considered to be in the public interest. [Amended by 1973 c.738 §5]

279.333 Application of ORS 279.324 to 279.330. ORS 279.324 to 279.330 shall not apply to suspension of the work or termination of the contract which occur as a result of the contractor’s violation of federal, state or local statutes, ordinances, rules or regulations in existence at the time the contract was executed or as a result of violations of the terms of the contract. [1973 c.738 §6]

(Hours)

279.334 Maximum hours of labor on public contracts; holidays; exceptions; liability to workers. (1)(a) In all cases where labor is employed by the state, county, school district, municipality, municipal corporation, or subdivision, through a contractor, no person shall be required or permitted to labor more than 10 hours in any one day, or 40 hours in any one week, except in cases of necessity, emergency, or where the public policy absolutely requires it, in which event, the person or persons so employed for excessive hours shall receive at least time and a half pay:

(A) For all overtime in excess of eight hours a day or 40 hours in any one week when the work week is five consecutive days, Monday through Friday; or

(B) For all overtime in excess of 10 hours a day or 40 hours in any one week when the work week is four consecutive days, Monday through Friday; and

(i) Each Sunday.

(ii) New Year’s Day on January 1.

(iii) Memorial Day on the last Monday in May.

(iv) Independence Day on July 4.

(v) Labor Day on the first Monday in September.

(vi) Thanksgiving Day on the fourth Thursday in November.

(vii) Christmas Day on December 25.

(b) An employer must give notice to employees who perform work under paragraph (a) of this subsection in writing, either at the time of hire or before commencement of work on the contract, or by posting a notice in a location frequented by employees, of the number of hours per day and days per week that employees may be required to work.

(2) For the purpose of this section, each time a holiday, other than Sunday, listed in subsection (1) of this section falls on Sunday, the succeeding Monday shall be recognized as a legal holiday. Each time a holiday listed in subsection (1) of this section falls on Saturday, the preceding Friday shall be recognized as a legal holiday.

(3) Subsections (1) and (2) of this section do not apply to a contract for a public improvement or for services if the contractor is a party to a collective bargaining agreement in effect with any labor organization.

(4) When specifically agreed to under a written labor-management negotiated labor agreement, an employee may be paid at least time and a half pay for work performed on any legal holiday specified in ORS 187.010 and 187.020 that is not listed in subsection (1) of this section.

(5) This section shall not apply to labor performed in the prevention or suppression of fire under contracts and agreements made pursuant to the authority of the State Forester or the State Board of Forestry, under ORS 477.406.

(6) This section shall not apply to contracts for personal services as defined in ORS 279.051, provided that persons employed under such contracts shall receive at least time and a half pay for work performed on the legal holidays specified in subsection (1)(a)(C)(ii) to (vii) of this section and for all overtime worked in excess of 40 hours in any one week, except for individuals under these contracts who are excluded under ORS 653.010 to 653.261 or under 29 U.S.C. sections 201 to 209 from receiving overtime.

(7) Subsection (1) of this section does not apply to contracts for services at a county fair or for other events authorized by a county fair board if persons employed under the contract receive at least time and a half for work in excess of 10 hours in any one day or 40 hours in any one week.

(8)(a) Subsection (1) of this section does not apply to contracts for services. However, persons employed under such contracts shall receive at least time and a half pay for work performed on the legal holidays specified in a collective bargaining agreement or in subsection (1)(a)(C)(ii) to (vii) of this section and for all time worked in excess of 10 hours a day or in excess of 40 hours in a week, whichever is greater.

(9) Any contractor or subcontractor or contractor’s or subcontractor’s surety who violates the provisions of this section shall be liable to the employees affected in the amount of their unpaid overtime wages and in an additional amount equal to the unpaid overtime wages as liquidated damages. If the violation resulted from willful falsification of payroll records, the contractor or subcontractor or contractor’s or subcontractor’s surety shall be liable to the employees affected in the amount of their unpaid overtime wages and in additional amount equal to twice the unpaid overtime wages as liquidated damages.

(10) An action to enforce liability to employees under subsection (9) of this section may be brought as an action on the contractor’s bond as provided for in ORS 279.536.

(11) In accordance with any applicable provision of ORS 183.310 to 183.550, the Commissioner of the Bureau of Labor and Industries may adopt rules to carry out the provisions of this section. [Amended by 1963 c.241 §1; 1967 c.167 §2; 1979 c.5 §2; 1981 c.281 §4; 1983 c.264 §1; 1989 c.572 §2; 1993 c.279 §2; 1995 c.739 §1; 1997 c.265 §2; 1997 c.793 §2]

279.335 Nonapplication of ORS 279.334 to financial institutions. ORS 279.334 does not apply to financial institutions as defined in ORS 706.008. [1993 c.394 §2; 1997 c.631 §432]

279.336 Time limitation on claim for overtime; posting of circular by contractor. Where labor is employed by the state, county, school district, municipality, municipal corporation or subdivision, through another as a contractor, any worker employed by the contractor shall be foreclosed from the right to collect for any overtime provided in ORS 279.334 unless a claim for payment is filed with the contractor within 90 days from the completion of the contract, providing the contractor has:

(1) Caused a circular clearly printed in blackface pica type and containing a copy of this section to be posted in a prominent place alongside the door of the timekeeper’s office or in a similar place which is readily available and freely visible to any or all workers employed on the work.

(2) Maintained such circular continuously posted from the inception to the completion of the contract on which workers are or have been employed. [Amended by 1981 c.712 §7]

279.338 Length of day’s labor on public works. (1) Eight hours shall constitute a day’s labor in all cases where the state, county, school district, or any municipality, municipal corporation or subdivision is the employer of labor, either directly or indirectly, by contract with another.

(2) This section does not apply to the employment by any contractor of work for the state, county, school district, or any municipality, municipal corporation, or subdivision thereof, of lead persons, security personnel and timekeepers paid on monthly rate. [Amended by 1981 c.712 §8]

279.340 Overtime for labor directly employed by public employers. (1) Labor directly employed by any public employer as defined in ORS 243.650 shall be compensated, if budgeted funds for such purpose are available, for overtime worked in excess of 40 hours in any one week, at not less than one and one-half times the regular rate of such employment. If budgeted funds are not available for the payment of overtime, such overtime shall be allowed in compensatory time off at not less than time and a half for employment in excess of 40 hours in any one week.

(2) Nothing in this section shall prevent a labor organization under the National Labor Relations Act or ORS 243.650 to 243.782 or other employees from negotiating additional overtime pay requirements with a public employer. [Amended by 1973 c.418 §1; 1995 c.286 §26]

279.342 Exceptions to ORS 279.340. The provisions of ORS 279.340 relating to pay for overtime shall not apply to:

(1) Labor employed in forest fire fighting.

(2) Employees of any irrigation system district actually engaged in the distribution of water for irrigation or domestic use.

(3) Employees of a public employer, as defined in ORS 243.650, who are employed in fire protection or law enforcement activities, including security personnel in corrections institutions, as those employees and activities are defined by rule of the Commissioner of the Bureau of Labor and Industries.

(4) Employees of a people’s utility district organized under ORS chapter 261.

(5) Employees exempted from overtime:

(a) By a public employer as defined in ORS 243.650 because of the executive, administrative, supervisory or professional nature of their employment as the nature of such employment is defined by rule of the Commissioner of the Bureau of Labor and Industries; or

(b) By a collective bargaining agreement expressly waiving application of ORS 279.340.

(6) Employees of a public employer as defined in ORS 243.650 engaged in the operation of a hospital or an establishment that is an institution primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises if, before performance of the work and pursuant to an agreement between the employer and employee or between the employer and the bargaining representative of the employees when the employees are represented under a collective bargaining agreement, a work period of 14 consecutive days is accepted in lieu of the workweek of seven consecutive days for purposes of overtime computation and if, for the employee’s employment in excess of eight hours in any workday and in excess of 80 hours in such 14-day period, the employee receives compensation at a rate not less than one and one-half times the rate at which the employee is employed.

(7) Members of the organized militia while on state active duty in accordance with ORS 399.075. [Amended by 1953 c.579 §3; 1955 c.510 §1; 1967 c.67 §1; 1973 c.460 §1; 1975 c.770 §1; 1977 c.388 §1; 1981 c.361 §3; 1983 c.699 §4; 1995 c.286 §27; 1995 c.635 §2; 1997 c.793 §3]

279.344 [Repealed by 1953 c.577 §2]

279.346 [Repealed by 1953 c.577 §2]

(Prevailing Wage Rate)

279.348 Definitions for ORS 279.348 to 279.380. As used in ORS 279.348 to 279.380, unless the context requires otherwise:

(1) "Prevailing rate of wage" means the rate of hourly wage, including all fringe benefits under subsection (4) of this section, paid in the locality to the majority of workers employed on projects of similar character in the same trade or occupation, as determined by the Commissioner of the Bureau of Labor and Industries. In making such determinations, the commissioner shall rely on an independent wage survey to be conducted once each year. However, if it appears to the commissioner that the data derived from the survey alone are insufficient to establish the rate, the commissioner also shall consider additional information such as collective bargaining agreements, other independent wage surveys and the prevailing wage rates determined by appropriate federal agencies or agencies of adjoining states. If there is not a majority in the same trade or occupation paid at the same rate, the average rate of hourly wage, including all fringe benefits under subsection (4) of this section, paid in the locality to workers in the same trade or occupation shall be the prevailing rate. If the wage paid by any contractor or subcontractor to workers on any public work is based on some period of time other than an hour, the hourly wage shall be mathematically determined by the number of hours worked in that period of time.

(2) "Locality" means the following district in which the public work, or the major portion thereof, is to be performed:

(a) District 1, composed of Clatsop, Columbia and Tillamook Counties;

(b) District 2, composed of Clackamas, Multnomah and Washington Counties;

(d) District 4, composed of Benton, Lincoln and Linn Counties;

(e) District 5, composed of Lane County;

(f) District 6, composed of Douglas County;

(g) District 7, composed of Coos and Curry Counties;

(h) District 8, composed of Jackson and Josephine Counties;

(i) District 9, composed of Hood River, Sherman and Wasco Counties;

(j) District 10, composed of Crook, Deschutes and Jefferson Counties;

(k) District 11, composed of Klamath and Lake Counties;

(L) District 12, composed of Gilliam, Grant, Morrow, Umatilla and Wheeler Counties;

(m) District 13, composed of Baker, Union and Wallowa Counties; and

(n) District 14, composed of Harney and Malheur Counties.

(3) "Public works" includes, but is not limited to, roads, highways, buildings, structures and improvements of all types, the construction, reconstruction, major renovation or painting of which is carried on or contracted for by any public agency to serve the public interest but does not include the reconstruction or renovation of privately owned property which is leased by a public agency.

(4) "Fringe benefits" means the amount of:

(a) The rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a plan, fund or program; and

(b) The rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program which is committed in writing to the workers affected, for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life insurance, disability and sickness insurance or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other federal, state or local law to provide any of such benefits.

(5) "Public agency" means the State of Oregon or any political subdivision thereof or any county, city, district, authority, public corporation or entity and any of their instrumentalities organized and existing under law or charter. [1959 c.627 §1; 1969 c.369 §1; subsection (4) enacted as 1969 c.369 §3; subsection (5) enacted as 1969 c.369 §4; 1977 c.797 §1; 1979 c.282 §2; 1981 c.712 §9; 1983 c.710 §1; 1989 c.752 §1; 1997 c.810 §1]

279.349 Policy. The Legislative Assembly declares that the purposes of the prevailing wage law are:

(1) To ensure that contractors compete on the ability to perform work competently and efficiently while maintaining community established compensation standards.

(2) To recognize that local participation in publicly financed construction and family wage income and benefits are essential to the protection of community standards.

(3) To encourage training and education of workers to industry skills standards.

(4) To encourage employers to use funds allocated for employee fringe benefits for the actual purchase of those benefits. [1995 c.594 §2]

Note: 279.349 was added to and made a part of 279.348 to 279.380 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

279.350 Workers on public works to be paid not less than prevailing rate of wage; posting of rates and health and welfare plan provisions. (1) The hourly rate of wage to be paid by any contractor or subcontractor to workers upon all public works shall be not less than the prevailing rate of wage for an hour’s work in the same trade or occupation in the locality where such labor is performed. The obligation of a contractor or subcontractor to pay the prevailing rate of wage may be discharged by making the payments in cash, by the making of contributions of a type referred to in ORS 279.348 (4)(a), or by the assumption of an enforceable commitment to bear the costs of a plan or program of a type referred to in ORS 279.348 (4)(b), or any combination thereof, where the aggregate of any such payments, contributions and costs is not less than the prevailing rate of wage.

(2) After a contract for a public works is executed with any contractor or work is commenced upon any public works, the amount of the prevailing rate of wage shall not be subject to attack in any legal proceeding by any contractor or subcontractor in connection with that contract.

(3) It shall not be a defense in any legal proceeding that the prevailing rate of wage is less than the amount required to be in the specifications of a contract for public works, or that there was an agreement between the employee and the employer to work at less than the wage rates required to be paid under this section.

(4) Every contractor or subcontractor engaged on a project for which there is a contract for a public work shall keep the prevailing wage rates for that project posted in a conspicuous and accessible place in or about the project. Contractors and subcontractors shall be furnished copies of these wage rates by the commissioner without charge.

(5) Every contractor or subcontractor engaged on a project for which there is a contract for a public work to which the prevailing wage requirements apply that also provides for or contributes to a health and welfare plan or a pension plan, or both, for its employees on the project shall post notice describing such plans in a conspicuous and accessible place in or about the project. The notice preferably shall be posted in the same place as the notice required under subsection (4) of this section. In addition to the description of the plans, the notice shall contain information on how and where to make claims and where to obtain further information.

(6)(a) Except as provided in paragraph (c) of this subsection, no person other than the contractor or subcontractor shall pay or contribute any portion of the prevailing rate of wage paid by the contractor or subcontractor to workers employed in the performance of a public works contract.

(b) For the purpose of this subsection, the prevailing rate of wage is the prevailing rate of wage specified in the contract.

(c) This subsection is not intended to prohibit payments to a worker who is enrolled in any government-subsidized training or retraining program.

(7) No person shall take any action that circumvents the payment of the prevailing rate of wage to workers employed on a public works contract, including, but not limited to, reducing an employee’s regular rate of pay on any project not subject to ORS 279.348 to 279.380 in a manner that has the effect of offsetting the prevailing wage on a public works project. [1959 c.627 §2; 1977 c.797 §2; 1981 c.712 §19; 1983 c.264 §2; 1983 c.710 §2; 1989 c.286 §1; 1995 c.594 §10]

279.352 Provision in contract for minimum rate of wage; fee for administration of law. (1) The specifications for every contract for a public work shall contain a provision stating the existing prevailing rate of wage which may be paid to workers in each trade or occupation required for such public work employed in the performance of the contract either by the contractor or subcontractor or other person doing or contracting to do the whole or any part of the work contemplated by the contract, and the contract shall contain a provision that such workers shall be paid not less than such specified minimum hourly rate of wage.

(2) The specifications for every contract for a public work shall contain a provision stating that a fee is required to be paid to the Commissioner of the Bureau of Labor and Industries as provided in ORS 279.375 (1), and the contract shall contain a provision that the fee shall be paid to the commissioner pursuant to the administrative rule of the commissioner. [1959 c.627 §§3, 4; 1965 c.449 §1; 1977 c.797 §3; 1979 c.282 §3; 1983 c.710 §3; 1995 c.594 §15]

279.354 Certification of rate of wage by contractor or subcontractor. (1) The contractor or the contractor’s surety and every subcontractor or the subcontractor’s surety shall file certified statements with the public contracting agency in writing in form prescribed by the Commissioner of the Bureau of Labor and Industries, certifying the hourly rate of wage paid each worker whom the contractor or the subcontractor has employed upon such public work, and further certifying that no worker employed upon such public work has been paid less than the prevailing rate of wage or less than the minimum hourly rate of wage specified in the contract, which certificate and statement shall be verified by the oath of the contractor or the contractor’s surety or subcontractor or the subcontractor’s surety that the contractor or subcontractor has read such statement and certificate and knows the contents thereof and that the same is true to the contractor or subcontractor’s knowledge. The certified statements shall set out accurately and completely the payroll records for the prior week including the name and address of each worker, the worker’s correct classification, rate of pay, daily and weekly number of hours worked, deductions made and actual wages paid.

(2) Each certified statement required by subsection (1) of this section shall be delivered or mailed by the contractor or subcontractor to the public contracting agency. Certified statements for each week during which the contractor or subcontractor employs a worker upon the public work shall be submitted once a month, by the fifth business day of the following month. Information submitted on certified statements may be used only to ensure compliance with the provisions of ORS 279.348 to 279.380.

(3) Each contractor or subcontractor shall preserve the certified statements for a period of three years from the date of completion of the contract.

(4) Certified statements received by a public contracting agency are public records subject to the provisions of ORS 192.410 to 192.505. [1959 c.627 §5; 1967 c.207 §1; 1977 c.797 §4; 1981 c.712 §12; 1983 c.710 §4; 1995 c.594 §16; 2001 c.337 §1]

279.355 Inspection to determine whether prevailing rate of wage being paid; proceedings to require payment of prevailing rate or overtime. (1) At any reasonable time the Commissioner of the Bureau of Labor and Industries may enter the office or business establishment of any contractor or subcontractor performing public works, and gather facts and information necessary to determine if the prevailing rate of wage is actually being paid by such contractor or subcontractor to workers upon public works.

(2) Every contractor or subcontractor performing work on public works shall make available to the commissioner for inspection during normal business hours and, upon request made a reasonable time in advance, any payroll or other records in the possession or under the control of the contractor or subcontractor that are deemed necessary by the commissioner to determine if the prevailing rate of wage is actually being paid by such contractor or subcontractor to workers upon public works.

(3) Notwithstanding ORS 192.410 to 192.505, any record obtained or made by the commissioner under this section shall not be open to inspection by the public.

(4) The Commissioner of the Bureau of Labor and Industries may, without necessity of an assignment, initiate legal proceedings against employers to enjoin future failures to pay required prevailing wages or overtime pay and to require the payment of prevailing wages or overtime pay due employees. The commissioner is entitled to recover, in addition to other costs, such sum as the court or judge may adjudge reasonable as attorney fees. If the commissioner does not prevail in such action, the commissioner shall pay all costs and disbursements from the Bureau of Labor and Industries Account. [1969 c.369 §5; 1981 c.712 §13]

279.356 Liability for violations. (1) Any contractor or subcontractor or contractor’s or subcontractor’s surety who violates the provisions of ORS 279.350 shall be liable to the workers affected in the amount of their unpaid minimum wages, including all fringe benefits under ORS 279.348 (4), and in an additional amount equal to said unpaid wages as liquidated damages.

(2) Actions to enforce liability to workers under subsection (1) of this section may be brought as actions on contractors’ bonds as provided for in ORS 279.536.

(3) If the public agency fails to include a provision that the contractor and any subcontractor shall comply with ORS 279.350 in the advertisement for bids, the request for bids, the contract specifications, the accepted bid or elsewhere in the contract documents, the liability of the public agency for unpaid minimum wages, as described in subsection (1) of this section, shall be joint and several with any contractor or subcontractor that had notice of the requirement to comply with ORS 279.350. The Commissioner of the Bureau of Labor and Industries may enforce the provisions of this subsection by a civil action under ORS 279.355 (4), by a civil action on an assigned wage claim under ORS 652.330, or by an administrative proceeding on an assigned wage claim under ORS 652.332. [1959 c.627 §§6, 7; 1969 c.369 §6; 1981 c.712 §14; 1983 c.264 §4; 1983 c.711 §3; 1997 c.255 §1]

279.357 Exemptions. (1) ORS 279.348 to 279.380 do not apply to:

(a) Projects for which the contract price does not exceed $25,000.

(b) Projects regulated under the Davis-Bacon Act (40 U.S.C. 276a). Notwithstanding such regulation, contractors and subcontractors shall pay individuals employed as flaggers on such projects not less than the prevailing rate of wage as determined by the Commissioner of the Bureau of Labor and Industries for that classification of work. As used in this paragraph, a "flagger" means a person who controls the movement of vehicular traffic through construction projects using sign, hand or flag signals.

(c)(A) Projects for which no funds of a public agency are directly or indirectly used. In accordance with ORS 183.310 to 183.550, the commissioner shall adopt rules to carry out the provisions of this paragraph.

(B) As used in this paragraph:

(i) "Funds of a public agency" does not include funds provided in the form of a government grant to a nonprofit organization, unless the government grant is issued for the purpose of construction.

(ii) "Nonprofit organization" means an organization or group of organizations described in section 501(c)(3) of the Internal Revenue Code that is exempt from income tax under section 501(a) of the Internal Revenue Code.

(2)(a) A public agency may not divide a public works project into more than one contract for the purpose of avoiding compliance with ORS 279.348 to 279.380.

(b) When the commissioner determines that a public agency has divided a public works project for the purpose of avoiding compliance with ORS 279.348 to 279.380, the commissioner shall issue an order compelling compliance.

(A) The physical separation of the project structures.

(B) The timing of the work on project phases or structures.

(D) The manner in which the public agency and the contractors administer and implement the project. [1977 c.797 §8; 1981 c.712 §15; 1983 c.710 §5; 1985 c.766 §1; 1995 c.594 §3; 2001 c.628 §1]

Note: 279.357 was added to and made a part of 279.348 to 279.380 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

Note: Sections 4, 5 and 6, chapter 628, Oregon Laws 2001, provide:

Sec. 4. The Bureau of Labor and Industries may not initiate or continue any action to enforce compliance with ORS 279.348 to 279.380 against any contractor, subcontractor or public agency involved with a project to which ORS 279.348 to 279.380 would not apply under ORS 279.357, as amended by section 1 of this 2001 Act, if the project were started on or after January 1, 2002. [2001 c.628 §4]

Sec. 5. (1) Notwithstanding section 4 of this 2001 Act, the Bureau of Labor and Industries may accept and enforce wage claims filed by workers who are entitled to be paid the prevailing rate of wage on a project if:

(a) The project was started before January 1, 2002; and

(b) ORS 279.348 to 279.380 would not have applied to the project under ORS 279.357, as amended by section 1 of this 2001 Act, if the project had been started on or after January 1, 2002.

(2) If a contractor, subcontractor or public agency mails to a worker a notice of the right to file a wage claim on a project described in subsection (1) of this section, the employee must file the wage claim with the bureau within 30 days after the date the notice is mailed. [2001 c.628 §5]

Sec. 6. Sections 4 and 5 of this 2001 Act are repealed on January 2, 2004. [2001 c.628 §6]

279.358 [1975 c.772 §5; renumbered 279.400]

279.359 Determination of prevailing rate of wage; providing commissioner with information. (1) The Commissioner of the Bureau of Labor and Industries shall determine the prevailing rate of wage for workers in each trade or occupation in each locality under ORS 279.348 at least once each year by means of an independent wage survey and make this information available at least twice each year. The commissioner may amend the rate at any time.

(2) A person shall make such reports and returns to the Bureau of Labor and Industries as the commissioner may require to determine the prevailing rates of wage. The reports and returns shall be made upon forms furnished by the bureau and within the time prescribed therefor by the commissioner. The person or an authorized representative of the person shall certify to the accuracy of the reports and returns.

(3) Notwithstanding ORS 192.410 to 192.505, all information or records provided to the commissioner under this section are confidential and not available for inspection by the public.

(4) In order to assist the commissioner in making determinations of the prevailing wage, the commissioner may enter into contracts with public or private parties to obtain relevant data and information. Any such contract may include provisions for the manner and extent of the market review of affected trades and occupations and such other requirements regarding timelines of reports, accuracy of data and information and supervision and review as the commissioner may prescribe.

(5) As used in this section, "person" includes any employer, labor organization or any official representative of an employee or employer association. [1977 c.797 §7; 1983 c.710 §6; 1995 c.594 §8; 1997 c.810 §2]

279.360 [1955 c.563 §1; 1963 c.136 §2; 1963 c.482 §1; 1971 c.743 §349; repealed by 1975 c.771 §33]

279.361 Ineligibility for public contracts for failure to pay or post prevailing rate of wage; payroll reports to commissioner. (1) When the Commissioner of the Bureau of Labor and Industries, in accordance with the provisions of ORS 183.310 to 183.550, determines that a contractor or subcontractor has intentionally failed or refused to pay the prevailing rate of wage to workers employed upon public works, a subcontractor has failed to pay to its employees amounts required by ORS 279.350 and the contractor has paid those amounts on the subcontractor’s behalf, or a contractor or subcontractor has intentionally failed or refused to post the prevailing wage rates as required by ORS 279.350 (4), the contractor, subcontractor or any firm, corporation, partnership or association in which the contractor or subcontractor has a financial interest shall be ineligible for a period not to exceed three years from the date of publication of the name of the contractor or subcontractor on the ineligible list as provided in this section to receive any contract or subcontract for public works. The commissioner shall maintain a written list of the names of those contractors and subcontractors determined to be ineligible under this section and the period of time for which they are ineligible. A copy of the list shall be published, furnished upon request and made available to contracting agencies.

(2) When the contractor or subcontractor is a corporation, the provisions of subsection (1) of this section shall apply to any corporate officer or corporate agent who is responsible for the failure or refusal to pay or post the prevailing rate of wage or the failure to pay to a subcontractor’s employees amounts required by ORS 279.350 that are paid by the contractor on the subcontractor’s behalf.

(3) For good cause shown, the Commissioner of the Bureau of Labor and Industries may direct the removal of the name of that contractor or subcontractor from the ineligible list.

(4) To assist the Commissioner of the Bureau of Labor and Industries in determining if the contractor or subcontractor is paying the prevailing rate of wage, when a prevailing wage rate claim is filed, or evidence indicating a violation has occurred, a contractor or subcontractor required to pay the prevailing rate of wage to workers employed upon public works under this chapter shall send a certified copy of the payroll for those workers when the commissioner requests the certified copy. [1977 c.797 §6; 1983 c.710 §7; 1995 c.594 §9]

279.362 [1955 c.563 §2; 1959 c.414 §1; repealed by 1975 c.773 §1]

279.363 Notifying commissioner of contract. Public contracting agencies shall notify the Commissioner of the Bureau of Labor and Industries in writing, on a form prescribed by the commissioner, whenever a contract subject to the provisions of ORS 279.348 to 279.380 has been awarded. The notification shall be made within 30 days of the date that such contract is awarded. The notification shall include a copy of the disclosure of first-tier subcontractors that was submitted under ORS 279.027. [1981 c.712 §11; 2001 c.746 §1]

279.365 Civil action to enforce payment of prevailing wage. (1) The Commissioner of the Bureau of Labor and Industries or any other person may bring a civil action in any court of competent jurisdiction to require a public agency under a public contract with a contractor to withhold twice the wages in dispute if it is shown that the contractor or subcontractor on the contract has intentionally failed or refused to pay the prevailing rate of wage to workers employed on that contract and to require the contractor to pay the prevailing rate of wage and any deficiencies that can be shown to exist because of improper wage payments already made. In addition to other relief, the court may also enjoin any such contractor or subcontractor from committing future violations. The contractor or subcontractor involved shall be named as a party in all civil actions brought under this section. In addition to other costs, the court may award the prevailing party a reasonable attorney fee at the trial and on appeal. However, no attorney fee may be awarded against the Commissioner of the Bureau of Labor and Industries under this section.

(2) The court shall require any party, other than the Commissioner of the Bureau of Labor and Industries, that brings a civil action under this section to post a bond sufficient to cover the estimated attorney fees and costs to the public agency and to the contractor or subcontractor of any temporary restraining order, preliminary injunction or permanent injunction awarded in the action, in the event that the party bringing the action does not ultimately prevail.

(3) In addition to any other relief, the court in a civil action brought under this section may enjoin the public agency from contracting with the contractor or subcontractor if the court finds that the Commissioner of the Bureau of Labor and Industries would be entitled to place the contractor or subcontractor on the ineligible list established under ORS 279.361 (1). If the court issues such an injunction, the commissioner shall place the contractor or subcontractor on the list for a period of three years, subject to the provision of ORS 279.361 (2).

(4) "Public agency" has the meaning given the term in ORS 279.011. [1983 c.711 §2]

279.370 Civil penalty for prevailing wage law violations. (1) In addition to any other penalty provided by law, the Commissioner of the Bureau of Labor and Industries may assess a civil penalty not to exceed $5,000 for each violation of any provision of ORS 279.348 to 279.380 or any rule of the commissioner adopted pursuant thereto.

(2) Civil penalties under this section shall be imposed as provided in ORS 183.090.

(3) All sums collected as penalties pursuant to this section shall be first applied toward reimbursement of costs incurred in determining violations, conducting hearings and assessing the collecting of such penalties. The remainder, if any, of sums collected as penalties pursuant to this section shall be paid into the State Treasury and credited to the General Fund and are available for general governmental expenses. [1995 c.594 §14]

279.375 Fee for costs of administering law and educational programs; Prevailing Wage Education and Enforcement Account. (1)(a) The Commissioner of the Bureau of Labor and Industries, by rule, shall establish a fee to be paid by the contractor to whom the contract for a public work subject to ORS 279.348 to 279.380 has been awarded. The fee shall be used to pay the costs of:

(A) Surveys to determine the prevailing wage;

(B) Administering and providing investigations under and enforcement of ORS 279.348 to 279.380; and

(b) The fee shall be .1 percent of the contract price. However, in no event shall a fee be charged and collected that is more than $5,000 nor less than $100.

(2) Moneys received by the commissioner pursuant to this section shall be paid into the State Treasury and credited to the Prevailing Wage Education and Enforcement Account created by ORS 651.185.

(3) The fee to be paid pursuant to this section shall be paid at the time of the first progress payment or 60 days after work on the contract has begun, whichever date is earlier.

(4) Failure to make timely payment pursuant to subsection (3) of this section shall subject the contractor to a civil penalty under ORS 279.370, in such amount as the commissioner, by rule, shall specify. [1995 c.594 §5; 1999 c.152 §1]

279.380 Advisory committee to assist in administration of laws. (1) The Commissioner of the Bureau of Labor and Industries shall appoint an advisory committee to assist the commissioner in the administering of ORS 279.348 to 279.380.

(2) The advisory committee shall include equal representation of members from management and labor in the building and construction industry who perform work on public works contracts and such other interested parties as the commissioner shall appoint. [1995 c.594 §12]

(Retainage)

279.400 Withholding of retainage. (1) The withholding of retainage by a contractor or subcontractor on public contracts for public improvements shall be in accordance with ORS 701.420 and 701.430 except when the charter of the public agency that is a party to a public contract contains provisions requiring retainage by the public agency of more than five percent of the contract price of the work completed.

(2) As used in this section:

(a) "Public contract" means any purchase, lease or sale by a public agency of personal property, public improvements or services other than agreements which are for personal service.

(b) "Public agency" or "public contracting agency" means any agency of the State of Oregon or any political subdivision thereof authorized by law to enter into public contracts.

(c) "Public improvement" means any construction of improvements on real property by or for a public agency. [Formerly 279.358; 1979 c.196 §3]

279.410 "Retainage" defined for ORS 279.011 to 279.542. As used in ORS 279.011 to 279.542, unless the context otherwise requires, "retainage" means the difference between the amount earned by the contractor on a public contract and the amount paid on the contract by the public contracting agency. [1977 c.727 §3]

279.420 Form of retainage. (1) Money retained by a public contracting agency under ORS 279.435 (7) shall be:

(a) Retained in a fund by the public contracting agency and paid to the contractor in accordance with ORS 279.435; or

(b) At the option of the contractor, paid to the contractor in accordance with subsection (3) or (4) of this section and in a manner authorized by the Director of the Oregon Department of Administrative Services.

(2) If the public agency incurs additional costs as a result of the exercise of the options described in subsection (1) of this section, the agency may recover such costs from the contractor by reduction of the final payment. As work on the contract progresses, the agency shall, upon demand, inform the contractor of all accrued costs.

(3) The contractor may deposit bonds or securities with the public contracting agency or in any bank or trust company to be held in lieu of the cash retainage for the benefit of the public contracting agency. In such event the public agency shall reduce the retainage in an amount equal to the value of the bonds and securities and pay the amount of the reduction to the contractor in accordance with ORS 279.435. Interest on such bonds or securities shall accrue to the contractor.

(4) If the contractor elects, the retainage as accumulated shall be deposited by the public contracting agency in an interest-bearing account in a bank, savings bank, trust company or savings association for the benefit of the public contracting agency. When the public contracting agency is an agency of the State of Oregon, the account shall be established through the State Treasurer. Earnings on such an account shall accrue to the contractor.

(5) Bonds and securities deposited or acquired in lieu of retainage, as permitted by this section, shall be of a character approved by the Director of the Oregon Department of Administrative Services, including but not limited to:

(a) Bills, certificates, notes or bonds of the United States.

(b) Other obligations of the United States or its agencies.

(d) Indebtedness of the Federal National Mortgage Association.

(6) The contractor, with the approval of the public contracting agency, may deposit a surety bond for all or any portion of the amount of funds retained, or to be retained, by the public contracting agency in a form acceptable to the public contracting agency. Such bond and any proceeds therefrom shall be made subject to all claims and liens and in the same manner and priority as set forth for retainage under ORS 279.400 to 279.542. The public contracting agency shall reduce the retainage in an amount equal to the value of the bond and pay the amount of the reduction to the contractor in accordance with ORS 279.435. Whenever a public contracting agency accepts a surety bond from a contractor in lieu of retainage, the contractor shall accept like bonds from any subcontractor or supplier from which the contractor has retainage. The contractor shall then reduce the retainage in an amount equal to the value of the bond and pay the amount of the reduction to the subcontractor or supplier. [1977 c.727 §4; 1983 c.690 §15; 1989 c.106 §1; 1991 c.516 §3; 1999 c.689 §11]

279.430 Limitation on retainage requirements. Unless otherwise specifically included by statute, the provisions of ORS 279.420 or 279.542 shall only apply as between the public contracting agency and the party with whom it contracts. [1977 c.727 §5]

(Payments)

279.435 Prompt payment policy; progress payments on public contracts; retainage; interest; exception; settlement of compensation disputes. (1) It is the policy of this state that all payments due on a public contract for a public improvement and owed by a public contracting agency shall be paid promptly. No public contracting agency shall be exempt from the provisions of this section.

(2) Public contracting agencies shall make progress payments on the contract monthly as work progresses on a public contract for a public improvement. Payments shall be based upon estimates of work completed that are approved by the public contracting agency. A progress payment shall not be considered acceptance or approval of any work or waiver of any defects therein. The public contracting agency shall pay to the contractor interest on the progress payment, not including retainage, due the contractor. The interest shall commence 30 days after receipt of the invoice from the contractor or 15 days after the payment is approved by the agency, whichever is the earlier date. The rate of interest charged to the public contracting agency on the amount due shall equal three times the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve district that includes Oregon on the date that is 30 days after receipt of the invoice from the contractor or 15 days after the payment is approved by the agency, whichever is the earlier date, but the rate of interest shall not exceed 30 percent.

(3) Interest shall be paid automatically when payments become overdue. The public contracting agency shall document, calculate and pay any interest due when payment is made on the principal. Interest payments shall accompany payment of net due on public contracts. The public contracting agency shall not require the contractor to petition, invoice, bill or wait additional days to receive interest due.

(4) In instances when an invoice is filled out incorrectly, or when there is any defect or impropriety in any submitted invoice or when there is a good faith dispute, the public contracting agency shall so notify the contractor within 15 days stating the reason or reasons the invoice is defective or improper or the reasons for the dispute. A defective or improper invoice, if corrected by the contractor within seven days of being notified by the agency, shall not cause a payment to be made later than specified in this section unless interest is also paid.

(5) If requested in writing by a first-tier subcontractor, the contractor, within 10 calendar days after receiving the request, shall send to the first-tier subcontractor a copy of that portion of any invoice, request for payment submitted to the public contracting agency or pay document provided by the public contracting agency to the contractor specifically related to any labor or materials supplied by the first-tier subcontractor.

(6) Payment of interest may be postponed when payment on the principal is delayed because of disagreement between the public contracting agency and the contractor. Whenever a contractor brings formal administrative or judicial action to collect interest due under this section, the prevailing party shall be entitled to costs and reasonable attorney fees.

(7) A public contracting agency may reserve as retainage from any progress payment on a public contract an amount not to exceed five percent of the payment. As work progresses, an agency may reduce the amount of the retainage and the agency may eliminate retainage on any remaining monthly contract payments after 50 percent of the work under the contract is completed if, in the agency’s opinion, such work is progressing satisfactorily. Elimination or reduction of retainage shall be allowed only upon written application by the contractor, which application shall include written approval of the contractor’s surety; except that when the contract work is 97-1/2 percent completed the agency may, at its discretion and without application by the contractor, reduce the retained amount to 100 percent of the value of the contract work remaining to be done. Upon receipt of a written application by the contractor, the agency shall respond in writing within a reasonable time.

(8) The retainage held by a public contracting agency shall be included in and paid to the contractor as part of the final payment of the contract price. The public contracting agency shall pay to the contractor interest at the rate of one and one-half percent per month on the final payment due the contractor, interest to commence 30 days after the work under the contract has been completed and accepted and to run until the date when the final payment is tendered to the contractor. The contractor shall notify the public contracting agency in writing when the contractor considers the work complete and the public contracting agency shall, within 15 days after receiving the written notice, either accept the work or notify the contractor of work yet to be performed on the contract. If the public contracting agency does not within the time allowed notify the contractor of work yet to be performed to fulfill contractual obligations, the interest provided by this subsection shall commence to run 30 days after the end of the 15-day period.

(9)(a) The public contracting agency shall pay, upon settlement or judgment in favor of the contractor regarding any dispute as to the compensation due a contractor for work performed under the terms of a public contract, the amount due plus interest at the rate of two times the discount rate, but not to exceed 30 percent, on 90-day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve district that includes Oregon on the date and accruing from the later of:

(A) The due date of any progress payment received under the contract for the period in which such work was performed; or

(B) Thirty days after the date on which the claim for the payment under dispute was presented to the public contracting agency by the contractor in writing or in accordance with applicable provisions of the contract.

(b) Such interest shall be added to and not made a part of the settlement or judgment. [Formerly 279.575; 1991 c.516 §1; 1999 c.689 §2]

(Subcontractors)

279.445 Contractor’s relations with subcontractors. (1) This section applies to contracts for contractors of public improvements.

(2) A contractor shall not request payment from the public contracting agency of any amount withheld or retained in accordance with subsection (6) of this section until such time as the contractor has determined and certified to the public contracting agency that the subcontractor has determined and certified to the public contracting agency that the subcontractor is entitled to the payment of such amount.

(3) A dispute between a contractor and first-tier subcontractor relating to the amount or entitlement of a first-tier subcontractor to a payment or a late payment interest penalty under a clause included in the subcontract pursuant to subsection (4) or (5) of this section does not constitute a dispute to which the public contracting agency is a party. The public contracting agency shall not be included as a party in any administrative or judicial proceeding involving such a dispute.

(4) Each contract awarded by a public contracting agency shall include a clause that requires the contractor to include in each subcontract for property or services entered into by the contractor and a first-tier subcontractor, including a material supplier, for the purpose of performing a construction contract:

(a) A payment clause that obligates the contractor to pay the first-tier subcontractor for satisfactory performance under its subcontract within 10 days out of such amounts as are paid to the contractor by the public contracting agency under such contract; and

(b) An interest penalty clause that obligates the contractor, if payment is not made within 30 days after receipt of payment from the public contracting agency, to pay to the first-tier subcontractor an interest penalty on amounts due in the case of each payment not made in accordance with the payment clause included in the subcontract pursuant to paragraph (a) of this subsection. A contractor or first-tier subcontractor shall not be obligated to pay an interest penalty if the only reason that the contractor or first-tier subcontractor did not make payment when payment was due is that the contractor or first-tier subcontractor did not receive payment from the public contracting agency or contractor when payment was due. The interest penalty shall be:

(A) For the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and

(B) Computed at the rate specified in ORS 279.314 (2).

(5) The contract awarded by the public contracting agency shall further require the contractor to include in each of its subcontracts, for the purpose of performance of such contract condition, a provision requiring the first-tier subcontractor to include a payment clause and an interest penalty clause conforming to the standards of subsection (4) of this section in each of its subcontracts and to require each of its subcontractors to include such clauses in their subcontracts with each lower-tier subcontractor or supplier.

(6)(a) The clauses required by subsections (4) and (5) of this section are not intended to impair the right of a contractor or a subcontractor at any tier to negotiate, and to include in the subcontract, provisions that:

(A) Permit the contractor or a subcontractor to retain, in the event of a good faith dispute, an amount not to exceed 150 percent of the amount in dispute from the amount due a subcontractor under the subcontract without incurring any obligation to pay a late payment interest penalty, in accordance with terms and conditions agreed to by the parties to the subcontract, giving such recognition as the parties consider appropriate to the ability of a subcontractor to furnish a performance bond and a payment bond;

(B) Permit the contractor or subcontractor to make a determination that part or all of the subcontractor’s request for payment may be withheld in accordance with the subcontract agreement; and

(i) A notice conforming to the standards of subsection (9) of this section has been previously furnished to the subcontractor; and

(ii) A copy of any notice issued by a contractor pursuant to sub-subparagraph (i) of this subparagraph has been furnished to the public contracting agency.

(b) As used in this subsection, "good faith dispute" means a documented dispute concerning:

(A) Unsatisfactory job progress.

(B) Defective work not remedied.

(D) Failure to make timely payments for labor, equipment and materials.

(E) Damage to prime contractor or subcontractor.

(F) Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract sum.

(7) If, after making application to a public contracting agency for payment under a contract but before making a payment to a subcontractor for the subcontractor’s performance covered by such application, a contractor discovers that all or a portion of the payment otherwise due such subcontractor is subject to withholding from the subcontractor in accordance with the subcontract agreement, the prime contractor shall:

(a) Furnish to the subcontractor a notice conforming to the standards of subsection (9) of this section as soon as practicable upon ascertaining the cause giving rise to a withholding, but prior to the due date for subcontractor payment;

(b) Furnish to the public contracting agency, as soon as practicable, a copy of the notice furnished to the subcontractor pursuant to paragraph (a) of this subsection;

(c) Reduce the subcontractor’s progress payment by an amount not to exceed the amount specified in the notice of withholding furnished under paragraph (a) of this subsection;

(d) Pay the subcontractor as soon as practicable after the correction of the identified subcontract performance deficiency;

(e) Make such payment within:

(A) Seven days after correction of the identified subcontract performance deficiency unless the funds therefor must be recovered from the public contracting agency because of a reduction under paragraph (f)(A) of this subsection; or

(B) Seven days after the contractor recovers such funds from the public contracting agency;

(f) Notify the public contracting agency upon:

(A) Reduction of the amount of any subsequent certified application for payment; or

(B) Payment to the subcontractor of any withheld amounts of a progress payment, specifying:

(i) The amounts of the progress payments withheld under paragraph (a) of this subsection; and

(ii) The dates that such withholding began and ended; and

(g) Be obligated to pay to the public contracting agency an amount equal to interest on the withheld payments computed in the manner provided in ORS 279.435 from the 11th day after receipt of the withheld amounts from the public contracting agency until:

(A) The day the identified subcontractor performance deficiency is corrected; or

(B) The date that any subsequent payment is reduced under paragraph (f)(A) of this subsection.

(8)(a) If a contractor, after making payment to a first-tier subcontractor, receives from a supplier or subcontractor of the first-tier subcontractor a written notice asserting a deficiency in such first-tier subcontractor’s performance under the contract for which the contractor may be ultimately liable and the contractor determines that all or a portion of future payments otherwise due such first-tier subcontractor is subject to withholding in accordance with the subcontract agreement, the contractor may, without incurring an obligation to pay a late payment interest penalty under subsection (7)(e) of this section:

(A) Furnish to the first-tier subcontractor a notice conforming to the standards of subsection (9) of this section as soon as practicable upon making such determination; and

(B) Withhold from the first-tier subcontractor’s next available progress payment or payments an amount not to exceed the amount specified in the notice of withholding furnished under subparagraph (A) of this paragraph.

(b) As soon as practicable, but not later than 10 days after receipt of satisfactory written notification that the identified subcontract performance deficiency has been corrected, the contractor shall pay the amount withheld under paragraph (a)(B) of this subsection to such first-tier subcontractor, or shall incur an obligation to pay a late payment interest penalty to such first-tier subcontractor computed at the rate specified in ORS 279.435.

(9) A written notice of any withholding shall be issued to a subcontractor, with a copy to the public contracting agency of any such notice issued by a prime contractor, specifying:

(a) The amount to be withheld;

(b) The specified causes for the withholding under the terms of the subcontract; and

(10) Except as provided in subsection (3) of this section, this section shall not limit or impair any contractual, administrative or judicial remedies otherwise available to a contractor or a subcontractor in the event of a dispute involving late payment or nonpayment by a contractor or deficient subcontractor performance or nonperformance by a subcontractor.

(11) A contractor’s obligation to pay a late payment interest penalty to a subcontractor pursuant to the clause included in a subcontract under subsection (4) or (5) of this section is not intended to be an obligation of the public contracting agency for such late payment interest penalty. A contract modification shall not be made for the purpose of providing reimbursement of such late payment interest penalty. A cost reimbursement claim shall not include any amount for reimbursement of such late payment interest penalty. [1991 c.516 §2; 1999 c.689 §2a]

Note: 279.445 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 279 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

279.502 [1957 c.650 §1; 1969 c.607 §2; repealed by 1975 c.771 §33]

279.510 [Amended by 1955 c.526 §1; 1957 c.650 §2; 1965 c.26 §2; 1969 c.493 §77; repealed by 1975 c.771 §33]

279.512 [Amended by 1957 c.650 §3; repealed by 1975 c.771 §33]

279.514 [Amended by 1957 c.650 §4; repealed by 1975 c.771 §33]

279.515 [1957 c.650 §5; repealed by 1975 c.771 §33]

279.516 [Repealed by 1957 c.650 §15]

279.518 [Amended by 1957 c.650 §9; renumbered 279.538]

279.520 [Amended by 1953 c.131 §3; 1955 c.526 §2; repealed by 1957 c.650 §15]

279.522 [Repealed by 1957 c.650 §15]

279.524 [Repealed by 1957 c.650 §15]

BONDS; ACTION ON BONDS

279.526 Right of action against bond of contractor or subcontractor; notice of claim. (1) A person claiming to have supplied labor or materials for the prosecution of the work provided for in the contract, including any person having direct contractual relationship with the contractor furnishing the bond or direct contractual relationship with any subcontractor, or an assignee of such person, or a person claiming moneys due the State Accident Insurance Fund Corporation, the State Department of Employment Trust Fund or the Department of Revenue in connection with the performance of the contract, has a right of action on the contractor’s bond, cashier’s check or certified check as provided for in ORS 279.029 only if:

(a) The person or the assignee of the person has not been paid in full; and

(b) The person gives written notice of claim, as prescribed in ORS 279.528, to the contractor and the state agency, if the contract is with a state agency, or the clerk or auditor of the public body that let the contract if the public body is other than a state agency.

(2) When, upon investigation, the Commissioner of the Bureau of Labor and Industries has received information indicating that one or more workers providing labor on a public work have not been paid in full at the prevailing rate of wage or overtime wages, the commissioner has a right of action on the contractor’s bond, cashier’s check or certified check as provided in ORS 279.029. The commissioner’s right of action exists without necessity of an assignment and extends to workers on the project who are not identified when the written notice of claim is given, but for whom the commissioner has received information indicating that the workers have provided labor on the public work and have not been paid in full. The commissioner shall give written notice of the claim, as prescribed in ORS 279.528, to the contractor and the state agency, if the contract is with a state agency, or to the clerk or auditor of the public body that let the contract if the public body is other than a state agency. [Amended by 1953 c.131 §3; 1957 c.650 §6; 1969 c.689 §1; 1975 c.771 §21; 1981 c.712 §16; 1983 c.264 §3; 1985 c.526 §1; 1993 c.98 §6; 1999 c.521 §1]

279.528 Notice of claim. (1) The notice of claim required by ORS 279.526 shall be sent by registered or certified mail or hand delivered no later than 120 days after the day the person last provided labor or furnished materials or 120 days after the worker listed in the notice of claim by the Commissioner of the Bureau of Labor and Industries last provided labor. The notice may be sent or delivered to the contractor at any place the contractor maintains an office or conducts business or at the residence of the contractor.

(2) Notwithstanding subsection (1) of this section, if the claim is for a required contribution to a fund of any employee benefit plan, the notice required by ORS 279.526 shall be sent or delivered within 150 days after the employee last provided labor or materials.

(3) The notice shall be in writing substantially as follows:

______________________________________________________________________________

To (here insert the name of the contractor and the name of the state agency or public body):

Notice hereby is given that the undersigned (here insert the name of the claimant) has a claim for (here insert a brief description of the labor or materials performed or furnished and the person by whom performed or furnished; if the claim is for other than labor or materials, insert a brief description of the claim) in the sum of (here insert the amount) dollars against the bond taken from (here insert the name of the principal and, if known, the surety or sureties upon the bond) for the work of (here insert a brief description of the work concerning which the bond was taken). Such material or labor was supplied to (here insert the name of the contractor or subcontractor).

____________ (here to be signed)

______________________________________________________________________________

(4) When notice of claim is given by the commissioner and if the claim includes a worker who is then unidentified, the commissioner shall include in the notice a statement that the claim includes an unidentified worker for whom the commissioner has received information indicating that the worker has not been paid in full at the prevailing rate of wage required by ORS 279.350 or overtime wages required by ORS 279.334.

(5) The notice shall be signed by the person making the claim or giving the notice. [Amended by 1957 c.650 §7; 1969 c.689 §2; 1975 c.771 §22; 1985 c.526 §2; 1993 c.98 §7; 1999 c.521 §2]

279.530 [Amended by 1957 c.650 §10; renumbered 279.540]

279.532 [Amended by 1953 c.131 §3; 1955 c.526 §3; 1957 c.650 §11; renumbered 279.542]

279.534 [Amended by 1953 c.131 §3; 1957 c.650 §12; renumbered 279.544]

279.536 Action on contractor’s bond; limitation. (1) The Commissioner of the Bureau of Labor and Industries or a person who has a right of action on the bond under ORS 279.526 and, where required, who has filed and served the notice or notices of claim, as required under ORS 279.526 and 279.528, or that person’s assignee, may institute an action on the contractor’s bond, cashier’s check or certified check as provided for in ORS 279.029 in the circuit court of this state or the federal district court of this district.

(2) The action shall be on the relation of the commissioner, the claimant, or that person’s assignee, as the case may be, and shall be in the name of the public body that let the contract. It may be prosecuted to final judgment and execution for the use and benefit of the commissioner, the claimant, or that person’s assignee, as the fact may appear.

(3) The action shall be instituted no later than the expiration of two years after the person last provided labor or materials or two years after the worker listed in the commissioner’s notice of claim last provided labor. [1957 c.650 §8; 1969 c.689 §3; 1975 c.771 §23; 1981 c.712 §17; 1985 c.526 §3; 1999 c.521 §3]

279.538 Preference of labor and material liens. All labor and material liens shall have preference and be superior to all other liens and claims of whatsoever kind or nature created by ORS 279.310 to 279.318 and 279.526 to 279.542. [Formerly 279.518]

279.540 Rights of persons furnishing medical care and attention to employees of contractor. A person furnishing or providing medical, surgical or hospital care or other needed care and attention, incident to sickness or injury, to the employees of a contractor of a contract made with a public body, or to the employees of the subcontractor, shall be deemed to have performed labor for prosecution of the work provided in the contract for the purposes of ORS 279.526 to 279.542. [Formerly 279.530]

279.542 Joint liability where bond not executed. If the contract is one for which a bond, cashier’s check or certified check as provided for in ORS 279.029 is required and the contractor fails to pay for labor or materials or to pay claims due the State Industrial Accident Fund, the Unemployment Compensation Trust Fund or the Department of Revenue and the officers of the public body that let the contract fail or neglect to require the person entering into the contract to execute the bond, cashier’s check or certified check:

(1) The State of Oregon and the officers authorizing the contract shall be jointly liable for the labor and materials used in the prosecution of any work under the contract, and for claims due the State Industrial Accident Fund, the Unemployment Compensation Trust Fund and the Department of Revenue, if the contract was entered into with the State of Oregon.

(2) The public body and the officers authorizing the contract shall be jointly liable for the labor and materials used in the prosecution of any work under the contract and for claims due the State Industrial Accident Fund, the Unemployment Compensation Trust Fund and the Department of Revenue, if the contract was entered into on behalf of a public body other than the state. [Formerly 279.532; 1975 c.771 §23a; 2001 c.104 §94]

279.544 [Formerly 279.534; repealed by 1975 c.771 §33]

RECYCLING PROGRAMS

(Generally)

279.545 Definitions for ORS 279.545 to 279.650. As used in ORS 279.545 to 279.650, unless the context otherwise requires:

(1) "Post-consumer waste" means a finished material which would normally be disposed of as solid waste, having completed its life cycle as a consumer item. "Post-consumer waste" does not include manufacturing waste.

(2) "Public agency" means a county, city, special district or other public or municipal corporation, and any instrumentality thereof.

(3) "Recycled material" means any material that would otherwise be a useless, unwanted or discarded material except for the fact that the material still has useful physical or chemical properties after serving a specific purpose and can, therefore, be reused or recycled.

(4) "Recycled paper" means a paper product with not less than:

(a) Fifty percent of its fiber weight consisting of secondary waste materials; or

(b) Twenty-five percent of its fiber weight consisting of post-consumer waste.

(5) "Recycled PETE product" means a product containing post-consumer polyethylene terephthalate material.

(6) "Recycled product" means all materials, goods and supplies, not less than 50 percent of the total weight of which consists of secondary and post-consumer waste with not less than 10 percent of its total weight consisting of post-consumer waste. "Recycled product" also includes any product that could have been disposed of as solid waste, having completed its life cycle as a consumer item, but otherwise is refurbished for reuse without substantial alteration of the product’s form.

(7) "Secondary waste materials" means fragments of products or finished products of a manufacturing process which has converted a virgin resource into a commodity of real economic value, and includes post-consumer waste, but does not include excess virgin resources of the manufacturing process. For paper, "secondary waste materials" does not include fibrous waste generated during the manufacturing process such as fibers recovered from waste water or trimmings of paper machine rolls, mill broke, wood slabs, chips, sawdust or other wood residue from a manufacturing process.

(8) "State agency" includes the Legislative Assembly, the courts and their officers and committees and the constitutional state officers. [Formerly 279.731; 1997 c.552 §24]

279.550 Policy. (1) The Legislative Assembly finds that:

(a) It is the policy of the state to conserve and protect its resources. The maintenance of a quality environment for the people of this state now and in the future is a matter of statewide concern.

(b) The volume of solid waste generated within the state, an increased rate in the consumption of products and materials, including paper products, and the absence of adequate programs and procedures for the reuse and recycling of these products and materials threaten the quality of the environment and well-being of the people of Oregon.

(2) Therefore, the Legislative Assembly declares that the policy and intent of ORS 279.545 to 279.650 is to improve environmental quality by providing for:

(a) The procurement of products made from recycled materials; and

(b) The recycling of waste materials. [1991 c.385 §63]

279.555 Purchasing agencies to use recovered resources and recycled materials; notice to prospective contractors. (1) All state agencies purchasing supplies, materials, equipment or personal services shall:

(a) Review their procurement specifications currently utilized in order to eliminate, wherever economically feasible, discrimination against the procurement of recovered resources or recycled materials.

(b) Provide incentives, wherever economically feasible, in all procurement specifications issued by them for the maximum possible use of recovered resources and recycled materials.

(c) Develop purchasing practices which, to the maximum extent economically feasible, assure purchase of materials which are recycled or which may be recycled or reused when discarded.

(d) Establish management practices which minimize the volume of solid waste generated by reusing paper, envelopes, containers and all types of packaging and by limiting the amount of materials consumed and discarded.

(e) Use and require persons with whom they contract to use, in the performance of the contract work, to the maximum extent economically feasible, recycled paper.

(f) Use and require persons with whom they contract to use, in the performance of the contract work, to the maximum extent economically feasible, recycled PETE products, as well as other recycled plastic resin products.

(2) Any invitation to bid or request for proposal under this chapter shall include the following language: "Vendors shall use recyclable products to the maximum extent economically feasible in the performance of the contract work set forth in this document."

(3) Each state agency shall strive to meet the higher of the following:

(a) The actual recycled product procurement level of the Oregon Department of Administrative Services for the preceding calendar year; or

(b) A recycled product procurement level established by rule by the Oregon Department of Administrative Services.

(4) If an agency does not meet the goal set forth in subsection (3) of this section, the agency shall submit to the Oregon Department of Administrative Services a specific, detailed explanation of the barriers encountered in trying to achieve the goal, in order to provide the Oregon Department of Administrative Services with the information necessary to provide targeted assistance to the agency. [Formerly 279.733; 1997 c.552 §25]

279.560 Rules for recycling and reusing solid waste; exemption. (1) Notwithstanding ORS 183.335 (5) the Oregon Department of Administrative Services shall adopt rules pursuant to ORS 183.310 to 183.550 that:

(a) Establish procedures for the separation of solid waste generated by state agencies which can be recycled or reused.

(b) Establish a system for the collection of solid waste generated by state agencies which can be recycled or reused. The system shall assure that the material is made available to appropriate agencies or private industries for reuse or recycling at the greatest economic value and to the greatest extent feasible for recycling.

(2) All state agencies shall comply with the procedures and systems established pursuant to subsection (1) of this section.

(3) The Governor may exempt any single activity or facility of any state agency from compliance under this section if the Governor determines it to be in the paramount interest of the state. Any exemption shall be for a period not in excess of one year, but additional exemptions may be granted for periods not to exceed one year. The Governor shall make public all exemptions together with the reasons for granting such exemptions. [Formerly 279.735]

279.562 Recycled product purchasing information. The Oregon Department of Administrative Services shall include recycled product purchasing information within publications and training programs provided to local governments requesting state government purchasing assistance. [1997 c.552 §23]

279.565 Guidelines and procedures to encourage paper conservation. (1) The Oregon Department of Administrative Services shall encourage paper conservation.

(2) The department shall provide guidelines to state agencies and state contractors on the availability of recycled paper and paper products, including the sources of supply and the potential uses of various grades of recycled paper.

(3) The department shall review the total paper purchases and utilization of each state agency.

(4) The department shall, in conjunction with the administrative heads of state agencies, develop procedures to eliminate excessive or unnecessary paper use, including but not limited to overpurchase of paper, overprinting of materials, purchase of too high a grade of paper, purchase of paper which is not recyclable and purchase of virgin paper when recycled paper is available in the same grade. [Formerly 279.737]

279.567 Purchase of equipment and supplies containing recycled polyethylene material. (1) The Oregon Department of Administrative Services shall provide guidelines to state agencies and state contractors on the availability of necessary supplies and materials that contain recycled PETE, as well as other recycled plastic resin supplies and materials.

(2) The Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality, shall revise its procedures and specifications for state purchases of supplies and materials containing recycled PETE, as well as other recycled plastic resins, to encourage the procurement of such supplies and materials.

(3) The Oregon Department of Administrative Services shall identify available suppliers able to provide necessary supplies and materials containing recycled PETE, as well as other recycled plastic resins.

(4) The Oregon Department of Administrative Services shall direct the procurement of supplies and materials containing recycled PETE, provided similarities in quality and price exist between recycled PETE products and products not qualifying as recycled PETE products, as well as other recycled plastic resin supplies and materials. [1997 c.552 §22]

279.570 Preference for recycled materials. (1) Notwithstanding provisions of law requiring a state agency or a public agency to enter into contracts with the lowest responsible bidder and subject to subsection (2) of this section, any state agency or public agency charged with the purchase of materials and supplies for any public use shall give preference to the purchase of materials and supplies manufactured from recycled materials.

(2) A state agency or public agency shall give preference to materials and supplies manufactured from recycled materials if:

(a) The recycled product is available;

(b) The recycled product meets applicable standards;

(d) Recycled product costs do not exceed the costs of nonrecycled products by more than five percent.

(3) At its discretion, a state or public agency may give preference to the purchase of materials and supplies manufactured from recycled materials, even if the cost differential exceeds the five percent preference set forth in subsection (2) of this section.

(4) State agencies, unless otherwise specified in ORS 279.545 to 279.650, and public agencies may give preference to the suppliers of recycled products and recycled paper or to products that reduce the amount of waste generated. State agencies, unless otherwise specified in ORS 279.545 to 279.650, and public agencies may determine the amount of this preference.

(5) In any bid in which the state has reserved the right to make multiple awards, the recycled product or recycled paper preference shall be applied to the extent possible to maximize the dollar participation of firms offering recycled products or recycled paper in the contract award.

(6) A state or public agency shall require the bidder to specify the minimum, if not exact, percentage of recycled paper in paper products or recycled product in products offered, and both the post-consumer and secondary waste content regardless of whether the product meets the percentage of recycled material specified for recycled paper or recycled products in ORS 279.545. For paper products, a state agency or public agency also shall require that the bidder specify the fiber type. The contractor may certify a zero percent recycled paper or product. All contract provisions impeding the consideration of products with recycled paper or recycled products shall be deleted in favor of performance standards.

(7) The Oregon Department of Administrative Services shall review and work with state agencies to develop procurement specifications that encourage the use of recycled products whenever quality of a recycled product is functionally equal to the same product manufactured with virgin resources. Except for specifications that have been established to preserve the public health and safety, all procurement and purchasing specifications shall be established in a manner that encourages procurement and purchase of recycled products.

(8) All public and state agencies shall establish purchasing practices that assure, to the maximum extent economically feasible, purchase of materials, goods and supplies that may be recycled or reused when discarded. [Formerly 279.739]

279.573 Report on effect of recycling programs; content. The Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality, shall prepare an annual report to the Legislative Assembly describing the purchase and procurement of products purchased by state agencies before and after January 1, 1992. The report shall detail, as much as possible, the amount of recycled product used by state contractors before and after July 1, 1991. The report shall include but not be limited to the following:

(1) Listed by department, the total dollar amounts, volume and number of contracts of individual products purchased by the department and any other state agency having delegated procurement authority.

(2) Total dollar amounts, volume and number of contracts of each product purchased by the state, including the Legislative Assembly.

(3) The total dollar amounts, volume and number of contracts of individual products, whether recycled or nonrecycled, purchased by the state.

(4) The total dollar amounts, volume and number of contracts for recycled products, recycled paper and compost products purchased, including whether the paper products commodity goals under ORS 279.621 were achieved.

(5) The total dollar amount and volume of compost and cocompost products used by the state under ORS 459A.605 to 459A.620 or any other state program. As used in this subsection, "cocompost" means a process that composts plant materials with organic sludges or a material resulting from such a process.

(6) For recycled paper products purchased by state agencies, the total number of contracts, dollar amounts and volume of those contracts that were eligible for the preference under ORS 279.621. The report shall indicate, for each state agency, the ratio of recycled paper purchased to total paper purchased, and the average percentage of post-consumer content of the recycled paper purchased. The Oregon Department of Administrative Services shall provide technical and educational assistance to those agencies unable to achieve recycled paper purchasing goals set by the department.

(7) For each recycled product, including recycled paper and compost products, the total dollar amounts, volume and number of contracts that were eligible for a preference or a combination thereof under ORS 279.570.

(8) The range of dollar amounts for bids on procurement contracts including but not limited to contracts for the procurement of individual recycled products.

(9) For each waste material, total revenue dollars and volume generated from the state recycling plan under ORS 279.635.

(10) Recommendations to the Legislative Assembly as to revisions of the percentage amounts contained in the secondary waste and post-consumer waste definitions for individual products that will result in greater procurement of recycled products composed of recycled resources that would otherwise be disposed of as solid waste in the state’s disposal facilities.

(11) Recommendations on specific products available containing secondary post-consumer waste that are procured by the state, used in the performance of a service or project for the state and used in state construction contracts. These products shall be recommended as candidates for the application of the recycled paper product preference described in ORS 279.621.

(12) The Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality, shall identify those products purchased in either large volumes or high dollar amounts by the state which are available as a recycled product. The Oregon Department of Administrative Services shall include this list in the department’s annual report and shall revise this list as products purchased by the state become feasibly available in recycled form. [1991 c.385 §81; 1995 c.612 §18; 1997 c.552 §26; 2001 c.104 §95]

279.575 [1969 c.423 §1; 1971 c.746 §1; 1973 c.384 §1; 1975 c.771 §28; 1975 c.772 §8; 1977 c.727 §1; 1979 c.406 §3; 1981 c.712 §18; 1985 c.435 §1; renumbered 279.435 in 1989]

(Recycling Oil)

279.580 Definitions for ORS 279.580 to 279.595. As used in ORS 279.580 to 279.595:

(1) "Industrial oil" means any compressor, turbine or bearing oil, hydraulic oil, metal-working oil or refrigeration oil.

(2) "Lubricating oil" means any oil intended for use in an internal combustion crankcase, transmission, gearbox or differential or an automobile, bus, truck, vessel, plane, train, heavy equipment or machinery powered by an internal combustion engine.

(3) "Recycled oil" means used oil that has been prepared for reuse as a petroleum product by refining, rerefining, reclaiming, reprocessing or other means provided that the preparation or use is operationally safe, environmentally sound and complies with all laws and regulations.

(4) "Used oil" has the meaning given that term in ORS 459A.555.

(5) "Virgin oil" means oil that has been refined from crude oil and that has not been used or contaminated with impurities. [1991 c.385 §64]

279.585 Exclusion of recycled oils prohibited. Every state agency or public agency shall revise its procedures and specifications for the purchase of lubricating oil and industrial oil to eliminate any exclusion of recycled oils and any requirement that oils be manufactured from virgin materials. [1991 c.385 §65]

279.590 Preference for oil products with greater recycled content. Every state agency and public agency shall require that purchases of lubricating oil and industrial oil be made from the seller whose oil product contains the greater percentage of recycled oil, unless a specific oil product containing recycled oil is:

(1) Not available within a reasonable period of time or in quantities necessary to meet an agency’s needs;

(2) Not able to meet the performance requirements or standards recommended by the equipment or vehicle manufacturer, including any warranty requirements; or

(3) Available only at a cost greater than five percent of the cost of comparable virgin oil products or other percent preference established by the agency under ORS 279.570 (3). [1991 c.385 §66]

279.595 Affirmative program for procuring oils with high recycled content. (1) Every state agency or public agency shall establish and maintain an affirmative program for procuring oils containing the maximum content of recycled oil.

(2) An affirmative program shall include but need not be limited to:

(a) Placement of descriptions of the preference for recycled oil products in publications used to solicit bids from suppliers.

(b) Descriptions of the recycled oil procurement program at bidders’ conferences.

(c) Discussion of the preference program in lubricating oil and industrial oil procurement solicitations or invitations to bid.

(d) Efforts to inform industry trade associations about the preference program. [1991 c.385 §67]

(Retreaded Tires)

279.605 Definition for ORS 279.615 and 279.617. As used in ORS 279.615 and 219.617, "retreaded tire" means any tire that uses an existing casing for the purpose of vulcanizing new tread to such casing that meets all performance and quality standards specified in the Federal Motor Vehicle Safety Standards determined by the United States Department of Transportation. [1991 c.385 §68]

279.610 [Amended by 1957 c.418 §1; repealed by 1975 c.771 §33]

279.612 [Amended by 1957 c.418 §2; 1969 c.415 §1; repealed by 1975 c.771 §33]

279.614 [Repealed by 1975 c.771 §33]

279.615 Rules for purchase of retreaded tires. The Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality and with representatives of the Oregon retreading industry, may adopt rules for the purchase of retreaded tires by the State of Oregon. The rules shall designate the state minimum quality standards for retreaded tires. The rules shall be designed to maximize the use of retreads without jeopardizing the safety of the occupants of the vehicle or the intended end use of the tire. [1991 c.385 §71]

279.616 [Repealed by 1975 c.771 §33]

279.617 When retreaded tires to be used; exceptions. (1) Unless the study under section 69, chapter 385, Oregon Laws 1991, recommends against state agency acquisition of retreaded tires, and the Legislative Assembly accepts the recommendations, on or before July 1, 1993, and to the extent that existing stock shall be used first, all tires for use on the nonsteering wheels of state agency and public agency vehicles shall, at the next required installation of tires, be equipped with retreaded tires.

(2) Subsection (1) of this section shall not apply to:

(a) Emergency vehicles as defined in ORS 801.260;

(b) Other fire suppression or emergency assistance vehicles; or

(3) At its discretion, a state agency or public agency may elect not to use retreaded tires as required under subsection (1) of this section if the cost per mile differential of retreaded tires exceeds the five percent preference set forth in ORS 279.570. [1991 c.385 §70]

279.618 [Amended by 1971 c.659 §3; repealed by 1975 c.771 §33]

279.620 [Amended by 1955 c.693 §1; repealed by 1975 c.771 §33]

(Paper Products)

279.621 Preference to paper products that reduce waste or are recycled. (1) The Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality, shall revise its procedures and specifications for state purchases of paper products to give preference to the purchase of paper products that reduce production of solid waste or contain recycled paper.

(2) The Oregon Department of Administrative Services shall give a preference to the suppliers of recycled paper. This preference shall be up to 12 percent of the lowest bid or price quoted by suppliers offering nonrecycled paper products. In any bid in which the state has reserved the right to make multiple awards, the recycled paper preference cost shall be applied, to the extent possible, to maximize the dollar participation of recycled business in the contract award.

(3) To encourage the use of post-consumer waste, the Oregon Department of Administrative Services’ specifications shall require recycled paper contracts to be awarded to the bidder whose paper product contains the greater percentage of post-consumer waste if the fitness, quality and price meet the requirements in this section and the type of recycled content is consistent with the type of virgin material, so that the purchase does not interfere with an existing recycling recovery program. The Director of the Oregon Department of Administrative Services shall determine:

(a) Whether use of any proposed paper constitutes an economic or environmental interference with an existing recycling recovery program; or

(b) If a reasonable modification of the existing recycling recovery program, in accordance with ORS 279.635 and 279.640, would allow the use of the proposed paper without economic or environmental interference.

(4)(a) By January 1, 1993, no less than 25 percent of state agency purchases of paper products shall be from recycled paper products.

(b) By January 1, 1995, no less than 35 percent of state agency purchases of paper products shall be from recycled paper products. [1991 c.385 §72]

279.622 [Amended by 1963 c.28 §1; repealed by 1975 c.771 §33]

279.624 [Repealed by 1975 c.771 §33]

279.625 Symbol on recycled paper. At the discretion of the individual agency director, a state agency may print a symbol on paper products selected by the agency director. This symbol shall be determined by the Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality, and shall be similar to the following: "Printed on recycled paper." This symbol may be printed only on recycled paper. [1991 c.385 §73]

279.626 [Repealed by 1975 c.771 §33]

279.628 [Repealed by 1975 c.771 §33]

279.630 Recycled paper specifications; purchasing practices; in-state preference for tax credit. (1) The director, in consultation with the Department of Environmental Quality, shall review the procurement specifications currently used by the Oregon Department of Administrative Services to eliminate, wherever economically feasible, discrimination against the procurement of recycled paper.

(2) The director, in consultation with the Department of Environmental Quality, shall review the recycled paper specifications at least annually to consider increasing the percentage of recycled paper in paper and woodpulp product purchases. The director’s conclusions and recommendations shall be included in the annual report required under ORS 279.573.

(3) When contracting with the department for the sale of material subject to this section, the contractor shall certify in writing to the contracting officer that the material offered contains the minimum percentage of recycled paper required by ORS 279.545 and shall specify the minimum, if not exact, percentage of secondary and post-consumer waste and fiber type in the paper products. The certification shall be furnished under penalty of perjury.

(4) The department, in consultation with the Department of Environmental Quality, shall establish purchasing practices that, to the maximum extent economically feasible, assure purchase of materials that may be recycled or reused when discarded.

(5) The department shall make every effort to eliminate purchases of paper products considered potential contaminants to the state’s recycling plan under ORS 279.640 (1).

(6) In addition to any other requirement of law, any person or corporation receiving a credit against taxes otherwise due under ORS chapter 316, 317 or 318 for the use of recycled or recyclable materials must show that the person receiving the credit gives preference to Oregon producers of the recycled or recyclable materials used.

(7) Subsections (6) and (7) of this section apply to tax years beginning on and after January 1, 1992. [1991 c.385 §74]

279.635 State waste paper collection program; waste audit. It is the intent of the Legislative Assembly that:

(1) For the current state waste paper collection program, the Oregon Department of Administrative Services, in consultation with the Department of Environmental Quality, shall provide participating locations with public awareness information and training to state and legislative employees, including but not limited to the proper separation and disposal of recycled resources. Additionally, the department, in consultation with the Department of Environmental Quality, shall provide training for personnel, including but not limited to state buildings and grounds personnel responsible for the collection of waste materials. This training shall include but not be limited to educating and training the personnel concerning the separation and collection of recyclable materials.

(2) The department continue the current state waste paper collection program and use this program as a model to develop a plan for other waste materials generated by state and legislative employees.

(3) The department, in consultation with the Department of Environmental Quality, shall submit a new recycling plan, which includes but is not limited to the collection and sale of waste materials generated by state and legislative employees. The plan shall include for each state agency, specific goals relating to office materials recovered from the waste stream, and waste not recovered on a per capita basis. This plan shall be submitted to the appropriate legislative policy committees on or before August 31, 1992. The plan may be phased in using those office facilities and collecting those waste materials most conducive to operation of a source separation program, but shall be fully implemented by June 1, 1993.

(4) The collection program for each product shall be reevaluated by the director on or before January 1, 1994. Subsequently, the director, in consultation with the Department of Environmental Quality, upon the determination that inclusion of any particular material type would result in a net revenue loss to the state, may exclude that material from the program, and shall include the director’s conclusions and recommendations in the report required under ORS 279.630 (6) and (7). In determining the net revenue loss for the collection of a specified waste material, the director shall include the avoided cost to dispose of the waste material.

(5) No individual, group of individuals, state office, agency or its employees shall establish a similar collection program or enter into agreement for a similar program unless approved by the director.

(6)(a) If any single activity or facility of state agency fails to meet the specific goals of the plan within six months after implementation of the plan, the department shall require the agency to implement at the activity or facility actions which:

(A) Shall include but need not be limited to:

(i) A waste audit to specifically determine the best way to meet the goals;

(ii) An employee information and education program to inform and encourage employee participation; and

(iii) A timetable for these remedial measures to take place; and

(B) May include a plan or contract for janitorial services that includes collection of source separated recyclables.

(b) As used in this subsection, "waste audit" means a systematic survey of the waste generation characteristics of a facility or agency that produces recommendations on how to most effectively reduce the volume of waste materials being generated through the applied techniques of source reduction, reuse and recycling. [1991 c.385 §75]

279.640 Recycling plan for Legislative Assembly. (1) After implementing a recycling plan under ORS 279.635 (3), the Oregon Department of Administrative Services, with the advice of the Department of Environmental Quality, shall establish, implement and maintain a recycling plan for the Legislative Assembly, which may include all legislative offices and individual member’s district offices and all state offices whether in state-owned buildings or leased facilities. The plan shall include provisions for recycling office paper, corrugated cardboard, newsprint, beverage containers as defined in ORS 459A.700, container glass, magazines, mixed waste paper, plastic bottles, waste oil and any other material at the discretion of the director, in consultation with the Department of Environmental Quality.

(2) The department may contract as necessary for the recycling of products returned under subsection (1) of this section. [1991 c.385 §§76,77; 1997 c.552 §27]

279.645 Revenues and savings to be used to offset costs. (1) Revenues received or cost reductions realized from the plan developed under ORS 279.621 to 279.640 or any other activity involving the collection and transfer of recyclable materials in state and legislative offices located in state-owned and state-leased buildings, such as the sale of waste materials through recycling programs operated by the Oregon Department of Administrative Services or in agreement with the department, shall be used to offset recycling program costs for the programs developed under ORS 279.621 to 279.640.

(2) Any remaining revenues not expended during a biennium shall be transferred to the Oregon State Productivity Improvement Revolving Fund established in ORS 182.375. [1991 c.385 §78]

279.650 Certain paper products required to be recyclable; exceptions. (1) Except as provided in subsection (2) of this section, after January 1, 1993, no state or public agency may purchase any office copier or facsimile paper product that is not recyclable.

(2) Subsection (1) of this section does not apply if:

(a) There is no alternative paper product available;

(b) A specific type of paper product that is not recyclable is required to be used in office copier or facsimile equipment purchased on or before July 1, 1991; or

(c) It is not economically feasible for a state or public agency to purchase facsimile equipment that uses recyclable paper.

(3) As used in this section, "recyclable" means the paper product is able to be collected for recycling as high grade ledger paper. [1991 c.385 §79]

STATE PURCHASING

279.710 Definitions for ORS 279.545 to 279.746. As used in ORS 279.545 to 279.746, unless the context otherwise requires:

(1) "Department" means the Oregon Department of Administrative Services.

(2) "State agency" or "agency" means every state officer, board, commission, department, institution, branch or agency of the state government, whose costs are paid wholly or in part from funds held in the State Treasury, except the Legislative Assembly, the courts and their officers and committees, and except the Secretary of State and the State Treasurer in the performance of the duties of their constitutional offices.

(3) "Purchase" includes acquisition of personal property by lease or rental agreement.

(4) "Services" includes services rendered by independent contractors to the state relating to insurance, fidelity bonds, public improvement projects and other services, including but not limited to personal services and utility services.

(5) "Personal services" means services designated by rule as such by the Director of the Oregon Department of Administrative Services pursuant to ORS 279.051. [Amended by 1957 c.660 §1; 1977 c.598 §30; 1993 c.500 §30; 1997 c.802 §2]

279.711 Title to property acquired by state agency to be taken in name of state. Notwithstanding any other provisions of law to the contrary, any state agency, including the constitutional state officers and the courts, authorized by law to acquire real or personal property or interest therein, shall take title to the same in the name of the State of Oregon. [Formerly 273.005]

279.712 Department to purchase for state agencies; approval of personal services; exemptions; procedure. (1) The Oregon Department of Administrative Services shall purchase or otherwise provide for the acquisition or furnishing of all supplies, materials, equipment and services, including architectural, engineering and other personal services, required by state agencies, except to the extent the department authorizes a state agency to purchase directly in accordance with ORS 279.727.

(2) Subsection (1) of this section does not apply to:

(a) Purchases of alcoholic liquor by the Oregon Liquor Control Commission;

(b) Agreements entered into by the Department of Education for the purchase or distribution of textbooks;

(c) Personal service and public improvement contracts of the Department of Transportation relating to maintenance or construction of highways, bridges, parks or other transportation facilities;

(d) Personal service and public improvement contracts of the State Department of Fish and Wildlife for dams, fishways, ponds and related fish and game propagation facilities;

(e) Insurance and service contracts to provide medical assistance as provided for under ORS 414.115, 414.125, 414.135 and 414.145;

(f) Personal service and public improvement contracts of the Economic and Community Development Department relating to its foreign trade offices operating outside the state;

(g) Personal service contracts of the Attorney General relating to attorney services required by law to be performed by the Attorney General;

(h) Personal service contracts entered into by the Director of Veterans’ Affairs for real estate broker or principal real estate broker services; and

(i) A contract of any other state agency when the agency is specifically authorized by any provisions of law other than this chapter to enter into the contract.

(3) The following requirements and procedures apply to personal service contracts:

(a) Except as provided in subsection (2) of this section, the Oregon Department of Administrative Services shall execute all personal service contracts of state agencies, and all requisite approvals must be obtained, including the approval of the Attorney General, if applicable, before any state agency personal service contract becomes binding upon the state and before any service may be performed or payment may be made under the contract, unless the contract is exempt from the prohibition against services being performed before review for legal sufficiency is obtained under ORS 291.047 (6).

(b) The department shall by rule set forth the requirements necessary to implement the provisions of this subsection, including but not limited to rules establishing:

(A) The type of documentation that must accompany contracts submitted to the department for procurement.

(B) A reporting system for personal service contracts. A state agency shall submit to the department personal service contract information as directed by the department.

(C) Procedures for the screening and selection of persons to perform personal services when the department authorizes a state agency to contract directly pursuant to ORS 279.051.

(D) Procedures to permit services to be performed when circumstances exist that create substantial risk of loss, damage, interruption of services or threat to public health or safety and that require prompt action to protect the interests of this state.

(c) The department may exempt certain personal service contracts or classes of personal service contracts, in whole or in part, from the requirements of this subsection if the department finds that:

(A) It is unlikely that an exemption will encourage favoritism in the awarding of a personal service contract or will substantially diminish competition for personal service contracts; and

(B) The awarding of a personal service contract pursuant to the exemption will result in substantial cost savings to the state agency.

(d) In making its findings under paragraph (c) of this subsection, the department may consider the type, cost and amount of the contract, number of persons available to contract and such other factors as the department considers appropriate.

(e) Each state agency shall file with the department a copy of each personal service contract entered into by the agency, including appropriate documentation as required by the department. The department shall keep the copy of the contract and its documentation on file for three years, after which the department may destroy the file.

(f) The department shall maintain a system for filing copies of personal service contracts and documentation submitted to it under paragraph (e) of this subsection.

(g) The department shall submit a biennial report to the Legislative Assembly concerning the use of personal service contracts by state agencies. The report shall specify the name of each contracting agency, the amount paid under each personal service contract entered into by the agency, the name of the contractor, the duration of the contract and the contract’s basic purpose. The report also shall include the total dollar figure of all personal service contracts for each year of the preceding biennium.

(h) The department may not approve any personal service contract before the contract has been reviewed for legal sufficiency and approved by the Attorney General, if such review and approval are required under ORS 291.047.

(i) Whenever a state agency pays more in a calendar year under a personal service contract for services historically performed by state employees than the agency would have paid to its employees performing the same work, the agency shall so report to the department and include in the report a statement of justification for the greater costs.

(j) The department shall notify all state agencies of the requirements of this section. [Amended by 1957 c.660 §2; 1973 c.84 §3; 1977 c.598 §31; 1983 c.590 §11; 1991 c.95 §2; 1993 c.500 §31; 1995 c.776 §1; 1997 c.802 §3; 1999 c.264 §3; 2001 c.300 §75]

Note: The amendments to 279.712 by section 75, chapter 300, Oregon Laws 2001, become operative July 1, 2002. See section 85, chapter 300, Oregon Laws 2001. The text that is operative until July 1, 2002, is set forth for the user’s convenience.

279.712. (1) The Oregon Department of Administrative Services shall purchase or otherwise provide for the acquisition or furnishing of all supplies, materials, equipment and services, including architectural, engineering and other personal services, required by state agencies, except to the extent the department authorizes a state agency to purchase directly in accordance with ORS 279.727.