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THE IMPACT OF RESPONSIBLE BIDDER ORDINANCES ON UNION CONTRACTORS IN ILLINOIS AND INDIANA <br />Intro • • <br />Responsible bidder ordinances (RBOs) are policy tools that establish objective criteria and verifiable <br />standards for contractors bidding on public construction projects. They are designed to promote local <br />standards of quality and craftsmanship. A responsible bidder ordinance acknowledges value as well as <br />costs when it comes to projects. An RBO protects taxpayers by setting minimum standards, guaranteeing <br />that public projects are not awarded to contractors who cut corners or have poor track records. <br />Responsible bidder ordinances, sometimes referred to as responsible contractor policies, provide a <br />qualifications -based approach that works within the low -bid system to ensure quality by using <br />professional, competent contractors who complete projects safely, on time, and on budget. RBOs may <br />become particularly important as states and local government invest in public infrastructure with federal <br />dollars from the Infrastructure Investment and Jobs Act of 2021 (Biden White House, 2021). <br />RBOs have become increasingly common across the United States. Many communities in states that have <br />repealed prevailing wage laws —or do not have prevailing wage laws —have adopted RBOs to maintain <br />local construction standards and minimize the negative consequences associated with a lack of standards <br />on taxpayer -funded construction projects. For example, there are now more than 50 local RBOs in Indiana <br />(III FFC, 2021). The southern cites of New Orleans, LA and St. Peterburg, FL have also passed RBOs since <br />2020 (Stein, 2021; Municode, 2021). RBOs have been passed in counties, townships, cities, towns, and <br />special districts. <br />Even in states with prevailing wage laws and other high -road construction standards, there are legal <br />reasons to enact RBOs at the local -level. To be considered a "responsible bidder" in Illinois, for example, <br />the Illinois Procurement Code requires bidders to submit satisfactory evidence of compliance with the <br />Illinois Prevailing Wage Act and equal employment opportunity requirements, valid business registrations <br />and certificates of insurance, and participation in apprenticeship training programs approved by and <br />registered with the U.S. Department of Labor. However, the Illinois Procurement Code only applies to <br />state government contracts. The Illinois Municipal Code and the Illinois Counties Code, which apply to <br />local government contracts, do not have these provisions. RBOs have thus become a way to address this <br />lack of standards on public projects funded by local units of government. <br />This Illinois Economic Policy Institute (ILEPI) report evaluates the effect of 11 new responsible bidder <br />ordinances that have been passed in Illinois and Indiana since 2019 on union contractors. It also explores <br />a case study of the impact of RBOs in the Quad Cities area along the border between Illinois and Iowa. <br />The report concludes by recapping key findings. <br />Economic Research on Responsible Bidder Ordinances <br />The most authoritative research on RBOs comes from school districts in Ohio. A peer -reviewed, academic <br />study investigated the bid costs of over 300 elementary schools from 1997 to 2008 and found that <br />responsible contracting policies have "no discernible statistical impact on construction bid costs" after <br />controlling for geographic location. There was no evidence that RBO provisions raise construction costs. <br />The study concluded that adopting RBOs "may be an effective way to improve employment conditions <br />1 <br />