Legal Matters: Doing business with public-sector clients | Finance ...

Brendan D. Cummins, left, and Robert J. Alfton are attorneys with the Minneapolis law firm of Cummins & Cummins, which specializes in labor, employment, civil rights and consumer protection. (STAFF PHOTO: BILL KLOTZ)

Labor attorneys share tips on intricacies of government contracting

With the state budget deficit a higher priority than an off-year bonding bill and more transportation projects, private contractors might be wondering about their chances of gaining work with public entities this year.

The good news, according to attorneys who work in that sector, is that the work is out there if you don?t mind hunting for it. Gaining work with city, county and state agencies can be lucrative and rewarding, but there are some issues to consider.

For one thing, keep in mind that each of Minnesota?s 853 cities and 87 counties has its own way of operating, said Robert J. Alfton, a labor and employment lawyer with Cummins & Cummins in Minneapolis.

?You can?t assume that the city of Bemidji operates the same as Minneapolis,? said Alfton, a former city attorney for the city of Minneapolis. ?They?re different in their legal structure ? some are statutory cities, some are charter cities.?

Fortunately, most cities and counties document and publish their various structures, regulations and mandates on their websites, giving business owners little excuse for not knowing what?s expected from them.

St. Louis Park attorney Gregg Corwin agreed, adding that the leadership of public entities can differ widely: A city might operate under a weak-mayor system in which department heads wield relatively greater power.

?You can?t look at government entities as a monolith,? said Corwin. ?They?re made up of individuals. You might find that dealing with a building official in one city is completely different from dealing with someone in the same position from a city 50 miles away. Get to know the individual.?

Part of that getting-to-know-you process means becoming a regular presence at council and board meetings as well as keeping your eyes open for events that may help to get your name in front of the right players.

According to Marylee Abrams of Abrams & Schmidt in Arden Hills, both the League of Minnesota Cities and the Association of Minnesota Counties have annual conferences where business owners can rent booth space.

Diversity is key

From a legal standpoint, some ongoing issues need to be watched by businesses that want to gain public-entity work, one of which is diversity ? not just in the bidding and hiring process but also in the makeup of business ownership.

A number of public agencies have adopted programs to advance the hiring of minority- and women-owned businesses, according to Brendan Cummins, also with Cummins & Cummins.

?Public agencies have a strong interest in expanding the sphere of who they?re doing business with, and that often includes small businesses,? said Cummins.

He pointed to the example of Minneapolis, which passed an ordinance favoring small and under-utilized businesses. Chapter 423 of the city code, better known as the Small and Underutilized Business Program (SUBP), establishes goals for hiring women- and minority-owned small businesses.

?The goal, as they see it, is to level the playing field in contracting,? said Cummins. ?You see this kind of public policy being carried out in public contracting in a number of locations.

?A lot of contractors might think it?s just about the low bid, but there are a lot of public policy goals, particularly involving diversity, that public entities are pushing.?

That viewpoint is similar at the state level, although rules of construction contracting place a greater emphasis on the makeup of a company?s work force than on owner status. The state Department of Human Rights has set its work force goals ? not mandates ? for state-funded construction projects minorities in Hennepin and Ramsey Counties at 32 percent minorities and 6 percent women.

?This requires a substantial reworking of the business model a lot of contractors have used,? said Cummins. ?Businesses have had to look at who they?re hiring.?

?Have the facts ready about your minority and women employees in case the subject comes up, because it probably will come up,? said Alfton.

Keep an eye on the Capitol

Another legal issue is that union membership among public employees is many times what it is in the private sector ? 37 percent in the former as opposed to about 7 percent in the latter, according to figures from the federal Bureau of Labor Statistics.

?You?ll need to keep that in mind as you bid,? said Alfton. ?It can affect everything about the project, starting with the budget.?

Finally, attorneys recommend keeping a close eye on the Legislature. The jury is out on bonding, and will likely stay that way. But even absent a nine-digit bonding measure like we saw last year, that doesn?t mean state-funded projects won?t be approved piecemeal.

?Stability in state funding is a big issue for our public-sector clients ? there are a lot of cities that get local government aid,? said Abrams. ?And I see transportation being a big topic this session ? finding ways to pay for a lot of transportation projects that have been sitting on the books for a long time.?

This entry was posted on Monday, January 14th, 2013 at 1:18 pm and is filed under Legal Matters. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2013/01/legal-matters-doing-business-with-public-sector-clients/

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