Chapter Trans 504

Trans 504.04(1)(a) (a) The department may not knowingly solicit bids from, award contracts to, renew an existing contract with, or consent to subcontracts with a debarred or suspended contractor, unless the secretary determines, in writing, that a compelling reason for dealing with the contractor exists.

Trans 504.04(1)(b) (b) The department shall not enter a contract with an ineligible contractor and, if applicable, shall exclude ineligible contractors from subcontracts under the conditions and for the period set forth in the applicable statutes, rules, orders or legal authorities. The department may not knowingly solicit bids from, award contracts to, renew an existing contract with, or consent to subcontract with these contractors except in accord with the applicable statutes, rules, orders or legal authorities.

Trans 504.04(2) (2) Review. Prior to any pre-award conference or to any of the procurement actions enumerated in sub. (1), with respect to a particular bidder, offeror or proposed subcontractor, the department shall review the consolidated list.

Trans 504.04(3) (3) Current contract continuation.

Trans 504.04(3)(a) (a) Notwithstanding the listing of a contractor, the department may continue contracts or subcontracts in existence at the time the contractor was debarred or suspended, unless the secretary determines that contract termination is in the public interest.

Trans 504.04(3)(b) (b) Contract termination decisions, if any, may be made only after review by and consultation with both department contracting and purchasing personnel and department legal counsel to assure the propriety of the proposed contract termination.

Trans 504.04(3)(c) (c) The department shall not renew existing contracts or subcontracts with debarred or suspended contractors, unless the secretary determines and states in writing a compelling reason for the contract renewal or extension.

Trans 504.04(4) (4) Subcontract restrictions. When a debarred or suspended contractor is proposed as a subcontractor for any subcontract subject to department approval, the department may not give approval unless the secretary determines and states in writing a compelling reason for the approval.

Trans 504.04 History History: Cr. Register, December, 1983, No. 336, eff. 1-1-84.

Trans 504.05 Trans 504.05 Debarment.

Trans 504.05(1) (1) General.

Trans 504.05(1)(a) (a) The department may, in the public interest, debar a contractor for any of the causes contained in sub. (2), using the procedures in sub. (3). The existence of a cause for debarment as specified in sub. (2), however, shall not necessarily require that a contractor be debarred; the seriousness of any contractor’s acts or omissions and any mitigating factors shall be considered in making any debarment decision.

Trans 504.05(1)(b) (b) Debarment of a contractor constitutes debarment of all divisions or other organizational elements of the debarred contractor, unless the debarment is explicitly limited to specific divisions, organizational elements or commodities.

Trans 504.05(1)(c) (c) The department may extend the debarment to include any affiliates of a debarred contractor, if the affiliates are specifically named and are given written notice of the proposed debarment and an opportunity to respond pursuant to sub. (4).

Trans 504.05(1)(d) (d) When no suspension is in effect pursuant to s. Trans 504.06 at the time the department contemplates debarment of a contractor, no contracts shall be awarded to, and no subcontracts shall be approved for, the contractor, pending a debarment decision by the department.

Trans 504.05(2) (2) Causes for debarment. The secretary may debar a contractor for any one or more of the following causes:

Trans 504.05(2)(a) (a) Conviction, civil judgment or admission of:

Trans 504.05(2)(a)1. 1. Fraud, collusion or any criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract;

Trans 504.05(2)(a)2. 2. Violation of any federal or state antitrust statute relating to the submission of bids or proposals;

Trans 504.05(2)(a)3. 3. Embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property or obstruction of justice; or

Trans 504.05(2)(a)4. 4. Any other offense indicating a lack of business integrity or of business honesty which offense seriously and directly affects the responsibility of the contractor or subcontractor.

Trans 504.05(2)(b) (b) Violation of the terms of any government contract or subcontract when that violation is so serious as to justify debarment, including:

Trans 504.05(2)(b)1. 1. Willful failure to perform in accordance with a contract; or

Trans 504.05(2)(b)2. 2. A history of failure to perform or of unsatisfactory performance of one or more contracts.

Trans 504.05(2)(c) (c) Any other cause that is so serious or compelling that it affects the responsibility of a contractor or subcontractor.

Trans 504.05(2)(d) (d) Debarment for any of the above causes listed in pars. (a) through (c) by another state or federal entity.

Trans 504.05(3) (3) Procedures for debarment.

Trans 504.05(3)(a) (a) Referral. Department employees and all other persons having information appropriate for department consideration under this section shall promptly report that information to the secretary.

Trans 504.05(3)(b) (b) Decision-making process.

Trans 504.05(3)(b)1. 1. The debarment decision-making process shall be as informal as practicable, consistent with fundamental due process of law principles. The debarment decision-making process shall permit contractors and any specifically named affiliates to submit information and arguments in opposition to a proposed debarment. The department may require that a contractor’s opposition be submitted in writing or may permit an oral presentation in person or through a representative.

Trans 504.05(3)(b)2. 2. Whenever a proposal to debar is based upon a conviction, judgment or debarment by another state or federal entity for any of the causes listed in sub. (2), the department need not conduct a fact-finding hearing.

Trans 504.05(3)(b)3. 3. Whenever a proposal to debar is not based upon a conviction, judgment, admission or debarment by another state or federal entity, and if the department finds that the contractor’s opposition raises a genuine dispute over facts relevant to the proposed debarment, the department shall conduct a fact-finding hearing. A department hearing examiner shall:

Trans 504.05(3)(b)3.a. a. Permit the contractor to appear with counsel, to submit documents, to present witnesses and to confront and cross-examine any person the department presents;

Trans 504.05(3)(b)3.b. b. Ensure that a transcript of the hearing is prepared and made available to the contractor at a reasonable cost, unless the contractor and the department mutually waive the transcript requirement; and

Trans 504.05(3)(b)3.c. c. Act in accord with and have the authority provided by s. 227.46, Stats.

Trans 504.05(4) (4) Notice of proposal to debar. The department shall initiate a debarment proceeding by informing the involved contractor and any specifically named affiliate by certified mail return receipt requested. The mailed notice shall state:

Trans 504.05(4)(a) (a) That the department is considering a debarment;

Trans 504.05(4)(b) (b) The reasons for the proposed debarment in terms sufficient to notify the contractor of the conduct or transaction upon which debarment is proposed;

Trans 504.05(4)(c) (c) The cause or causes under sub. (2) that the department relies upon for the proposed debarment;

Trans 504.05(4)(d) (d) That the contractor may submit, within 15 days of the date of the department’s mailed notice, a written response providing information or argument in opposition to the proposed debarment;

Trans 504.05(4)(e) (e) The department’s procedures governing debarment decision-making as specified in sub. (5);

Trans 504.05(4)(f) (f) The potential effect of the proposed debarment as provided under s. Trans 504.04; and

Trans 504.05(4)(g) (g) That pending a debarment decision, no contract will be awarded to, and no subcontracts will be approved for, the contractor.

Trans 504.05(5) (5) Department’s debarment decision.

Trans 504.05(5)(a) (a) In debarment actions based upon a conviction, judgment, or admission or upon debarment by another state or federal entity for any of the causes listed in sub. (2) or in debarment actions in which no dispute exists over facts relevant to the proposed debarment, the secretary shall make a debarment decision based upon the information in the administrative record, including any submission made by the affected contractor. If no suspension is in effect under s. Trans 504.06, the debarment decision shall be made within 30 days after the secretary receives the last written response providing information or argument in opposition to the proposed debarment as provided for in sub. (4) (d).

Trans 504.05(5)(b) (b) In debarment actions in which a fact-finding hearing is necessary under sub. (3) (b) 3., the designated hearing examiner shall prepare written findings of fact, and the secretary or designee shall render a debarment decision based upon those written findings of fact. A cause for debarment must be established by a preponderance of the evidence. The debarment decision shall by made after the conclusion of the proceedings with respect to the disputed facts.

Trans 504.05(6) (6) Notice of department decision.

Trans 504.05(6)(a) (a) If debarment is imposed, the department shall promptly notify the contractor and any affiliates involved by certified mail return receipt requested. The notice shall contain the following:

Trans 504.05(6)(a)1. 1. Reference to the notice of proposed debarment that initiated the action under sub. (4);

Trans 504.05(6)(a)2. 2. Reasons for debarment; and

Trans 504.05(6)(a)3. 3. Period of debarment, specifying the effective date.

Trans 504.05(6)(b) (b) If debarment is not imposed, the department shall give prompt notice of that fact to the contractor and any affiliates involved by certified mail return receipt requested.

Trans 504.05(7) (7) Period of debarment.

Trans 504.05(7)(a) (a) Debarments shall be for a period commensurate with the seriousness of the cause or causes for debarment. Generally, debarment shall not exceed 3 years. If suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.

Trans 504.05(7)(b) (b) The department may extend the debarment for an additional period if the department determines that an extension is necessary to protect the public interest. However, an extension may not be based solely on the facts and circumstances upon which the initial debarment was based. If an extension is proposed, the procedures in sub. (3) above shall be followed to extend the debarment.

Trans 504.05(7)(c) (c) The department may terminate a debarment or may reduce the period or extent of a debarment, upon the contractor’s request, for reasons considered appropriate by the department, such as:

Trans 504.05(7)(c)1. 1. Newly discovered relevant evidence;

Trans 504.05(7)(c)2. 2. Reversal of the conviction or judgment upon which debarment was based;

Trans 504.05(7)(c)3. 3. A bona fide change in ownership or management of the contractor; or

Trans 504.05(7)(c)4. 4. Elimination of the cause or causes for which debarment was imposed.

Trans 504.05(8) (8) Imputed conduct.

Trans 504.05(8)(a) (a) The fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee or other individual associated with a contractor may be imputed to the contractor when the conduct occurred in connection with the individual’s performance of duties for or on behalf of the contractor, or with the contractor’s knowledge, approval or acquiescence. The contractor’s acceptance of the benefits derived from the conduct shall be evidence of the contractor’s knowledge, approval or acquiescence.

Trans 504.05(8)(b) (b) The fraudulent, criminal or other seriously improper conduct of a contractor may be imputed to any officer, director, shareholder, partner, employee or other individual associated with the contractor who participated in, knew of or had reason to know of the contractor’s conduct.

Trans 504.05(8)(c) (c) The fraudulent, criminal or other seriously improper conduct of one contractor participating in a joint venture or similar arrangement may be imputed to other participating contractors if the conduct occurred for or on behalf of the joint venture or similar arrangement or with the knowledge, approval or acquiescence of those contractors. Acceptance of the benefits derived from the conduct shall be evidence of the contractor’s knowledge, approval or acquiescence.

Trans 504.05 History History: Cr. Register, December, 1983, No. 336, eff. 1-1-84; correction in (3) (b) 3. c. made under s. 13.92 (4) (b) 7., Stats., Register March 2012 No. 675.

Trans 504.06 Trans 504.06 Suspension.

Trans 504.06(1) (1) General.

Trans 504.06(1)(a) (a) The department may, in the public interest, suspend a contractor for any of the causes contained in sub. (2), using the procedures in sub. (3).

Trans 504.06(1)(b) (b) Suspension is to be imposed only on the basis of adequate evidence of one or more of the causes set out in sub. (2), pending completion of investigation or legal proceedings, when immediate action is necessary to protect the public interest. In assessing the adequacy of the evidence, the department may consider: the amount of available information, the credibility of that information, whether important allegations are corroborated, and what reasonable inferences can be drawn. The department’s assessment may include examination of available basic documents such as: contracts, inspection reports and correspondence.

Trans 504.06(1)(c) (c) Suspension of a contractor constitutes suspension of all divisions or other organizational elements of the suspended contractor, unless the suspension is explicitly limited to specific divisions, organizational elements or commodities.

Trans 504.06(1)(d) (d) The department may extend the suspension to include any affiliates of a suspended contractor if the affiliates are specifically named and are given written notice of the proposed suspension and an opportunity to respond.

Trans 504.06(2) (2) Causes for suspension.

Trans 504.06(2)(a) (a) The department may suspend a contractor whenever it finds adequate evidence that the contractor has engaged in one or more of the following:

Trans 504.06(2)(a)1. 1. Fraud, collusion or any criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract;

Trans 504.06(2)(a)2. 2. Violation of any federal or state antitrust statute relating to the submission of bids or proposals;

Trans 504.06(2)(a)3. 3. Embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property or obstruction of justice; or

Trans 504.06(2)(a)4. 4. Any other offense indicating a lack of business integrity or of business honesty, seriously and directly affecting the responsibility of the contractor or subcontractor.

Trans 504.06(2)(b) (b) An indictment for any of the causes set forth in par. (a) may constitute adequate evidence for suspension.

Trans 504.06(2)(c) (c) The department may suspend a contractor whenever it finds adequate evidence of any other cause of so serious or compelling a nature that it affects the responsibility of a contractor or subcontractor.

Trans 504.06(2)(d) (d) The department may suspend a contractor based upon a suspension or debarment imposed by another state or federal entity for any of the causes in par. (a), (b) or (c).

Trans 504.06(3) (3) Procedures for suspension.

Trans 504.06(3)(a) (a) Referral. Department employees and all other persons having information appropriate for department consideration under this section shall promptly report that information to the secretary.

Trans 504.06(3)(b) (b) Decision-making process.

Trans 504.06(3)(b)1. 1. The suspension decision-making process shall be as informal as practicable, consistent with fundamental due process of law principles. The suspension decision-making process shall permit contractors and any specifically named affiliates to submit information and arguments in opposition to a proposed debarment. The department may require that a contractor’s opposition be submitted in writing or may permit an oral presentation in person or through a representative.

Trans 504.06(3)(b)2. 2. Whenever a proposal to suspend is not based upon an indictment or a suspension or debarment imposed by another state or federal entity, and if the department finds that the contractor’s opposition raises a genuine dispute over facts relevant to the proposed suspension, and if no determination is made on the basis of advice from the department of justice or other prosecuting official that substantial interests of the government in pending or contemplated legal proceedings based upon the same facts as the suspension would be prejudiced, the department shall conduct a fact-finding hearing. A department hearing examiner shall conduct the fact-finding hearing and shall:

Trans 504.06(3)(b)2.a. a. Permit the contractor to appear with counsel, to submit documents, to present witnesses and to confront and cross-examine any person the department presents;

Trans 504.06(3)(b)2.b. b. Ensure that a transcript of the hearing is prepared and made available to the contractor at a reasonable cost, unless the contractor and the department mutually waive the transcript requirement; and

Trans 504.06(3)(b)2.c. c. Act in accord with and have the authority provided by s. 227.46, Stats.

Trans 504.06(3)(c) (c) Notice of suspension. If suspension is imposed, the department shall promptly notify the contractor and any affiliates involved by certified mail return receipt requested. The notice shall state the following: